-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, S2RrDX3UTxfEujWhtpkTM00gkjQzhXmEO0UxHgdYJq7vd4SDlSKpeqmTOEuAb9Pu oOs9/UTt0Kos12GkrQrnIw== 0000950134-95-000249.txt : 19950222 0000950134-95-000249.hdr.sgml : 19950222 ACCESSION NUMBER: 0000950134-95-000249 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19950221 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELL COMPUTER CORP CENTRAL INDEX KEY: 0000826083 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 742487834 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-57775 FILM NUMBER: 95513760 BUSINESS ADDRESS: STREET 1: 9505 ARBORETUM BLVD CITY: AUSTIN STATE: TX ZIP: 78759-7299 BUSINESS PHONE: 5123384400 MAIL ADDRESS: STREET 1: 9505 ARBORETUM BLVD CITY: AUSTIN STATE: TX ZIP: 78759-7299 S-3 1 FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 21, 1995. REGISTRATION NO. 33- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- DELL COMPUTER CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 2112 KRAMER LANE, BUILDING 1 74-2487834 (State or other jurisdiction of AUSTIN, TEXAS 78758-4012 (I.R.S. Employer incorporation or organization) (512) 338-4400 Identification No.) (Address, including ZIP code, and telephone number, including area code, of registrant's principal executive offices)
--------------------- MICHAEL S. DELL CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER DELL COMPUTER CORPORATION 2112 KRAMER LANE, BUILDING 1 AUSTIN, TEXAS 78758-4012 (512) 338-4400 (Name, address, including ZIP code, and telephone number, including area code, of agent for service) --------------------- Copies to: THOMAS B. GREEN LARRY W. SONSINI GENERAL COUNSEL WILSON, SONSINI, GOODRICH & ROSATI DELL COMPUTER CORPORATION PROFESSIONAL CORPORATION 2112 KRAMER LANE, BUILDING 1 650 PAGE MILL ROAD AUSTIN, TEXAS 78758-4012 PALO ALTO, CALIFORNIA 94304 (512) 338-4400 (415) 493-9300 --------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: /X/ CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ PROPOSED PROPOSED MAXIMUM MAXIMUM AGGREGATE AMOUNT OF TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(1) PRICE(1) FEE - ------------------------------------------------------------------------------------------------------ Common Stock, $.01 par value........ 5,263,125 shares $45.25 $238,156,407.00 $82,123.00 - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee. --------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. SUBJECT TO COMPLETION, DATED FEBRUARY 21, 1995 PROSPECTUS 5,263,125 SHARES DELL (LOGO) COMMON STOCK (PAR VALUE $.01 PER SHARE) --------------------- TO BE OFFERED BY SEVERAL HOLDERS OF THE COMMON STOCK OF DELL COMPUTER CORPORATION --------------------- This Prospectus relates to the offering (the "Offering") of up to 5,263,125 shares (the "Shares") of common stock, par value $.01 per share (the "Common Stock"), by the Selling Stockholders named herein under "Selling Stockholders" of Dell Computer Corporation (the "Company" or "Dell"), which have been issued to the Selling Stockholders upon the conversion of shares of the Company's Series A Convertible Preferred Stock (the "Series A Preferred Stock") pursuant to the Company's conversion offer. Pursuant to the conversion offer, the Company offered to pay to holders of Series A Preferred Stock a conversion premium of $8.25 per share of Series A Preferred Stock converted into shares of Common Stock during a special conversion period which expired on March 22, 1995. The distribution of the Shares by the Selling Stockholders is not subject to any underwriting agreement. The Company will receive no part of the proceeds of sales made hereunder. All expenses of registration incurred in connection with this offering are being borne by the Company, but all selling and other expenses incurred by Selling Stockholders will be borne by such Selling Stockholders. None of the shares offered pursuant to this Prospectus have been registered prior to the filing of the Registration Statement of which this Prospectus is a part. The Shares may be sold from time to time through April , 1995 pursuant to this Prospectus, by the Selling Stockholders. It is anticipated that the Selling Stockholders will generally offer Shares for sale at prevailing prices in the over-the-counter market on the date of sale. The Shares may be sold only in ordinary brokerage transactions and transactions in which brokers solicit purchasers. See "Plan of Distribution." THIS PROSPECTUS MAY NOT BE USED FOR SALES MADE AFTER APRIL , 1995. The Common Stock of the Company is traded on the Nasdaq National Market under the symbol "DELL". As of the close of trading on February 14, 1995, the closing sale price of the Common Stock as quoted on the Nasdaq National Market was $45 3/8 per share. FOR A DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK, SEE "INVESTMENT CONSIDERATIONS." Each Selling Stockholder and any broker executing selling orders on behalf of the Selling Stockholders may be deemed to be an "underwriter" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). Commissions received by any such broker may be deemed to be underwriting commissions under the Securities Act. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------------- THE DATE OF THIS PROSPECTUS IS MARCH , 1995. 3 AVAILABLE INFORMATION No person is authorized to give any information or to make any representations, other than those contained in this Prospectus, in connection with the offering described herein, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or any Selling Stockholder. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, nor shall there be any sale of these securities by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances create an implication that the information contained herein is correct as of any time subsequent to the date hereof. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the Exchange Act, the Company files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). The reports, proxy statements and other information can be inspected and copied at the public reference facilities that the Commission maintains at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices located at 7 World Trade Center, 13th Floor, New York, New York 10048, and Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of these materials can be obtained at prescribed rates from the Public Reference Section of the Commission at the principal offices of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. The Company has filed with the Commission a registration statement on Form S-3 (herein, together with all amendments and exhibits, referred to as the "Registration Statement") under the Securities Act. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. --------------------- INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission (File No. 0-17017) pursuant to the Exchange Act are incorporated in this Prospectus by reference: 1. The Company's Annual Report on Form 10-K for the Fiscal Year Ended January 30, 1994; 2. The Company's Quarterly Reports on Form 10-Q for the Fiscal Quarters Ended May 1, 1994, July 31, 1994, and October 30, 1994; and 3. The description of the Company's Common Stock in Item 1 of the Company's Registration Statement on Form 8-A dated June 20, 1988. 4. The Company's Current Report on Form 8-K dated February 21, 1995. All other documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Prospectus and to be part hereof from the date of filing such documents. The Company will provide without charge to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of any such person, a copy of any or all of the documents that are incorporated by reference, other than exhibits to such documents not specifically incorporated by reference. Requests for such copies should be directed to Dell Computer Corporation, 2 4 2112 Kramer Lane, Building 1, Austin, Texas 78758-4012, Attention: Investor Relations, telephone (512) 728-8315. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THE COMPANY Dell designs, develops, manufactures, markets, services and supports personal computer systems worldwide under the Dell(R) brand name, which is one of the leading brand names in the personal computer industry. The Company provides all of the elements of complete personal computer solutions to its customers, including personal computer hardware, software, peripherals, communications capabilities, and service and support programs. Dell primarily markets its personal computer products and services directly to its customers, which include major corporate, government and education accounts as well as small businesses and individuals. The Company believes that its direct customer relationships provide it with a competitive advantage in that the information the Company gathers and analyzes as a result of these relationships enables it to better understand and respond to customer demands for personal computer products and services. Dell supplements its direct marketing strategy by selling personal computer systems through certain value-added remarketers and system integrators. The Company has pursued a build-to-order manufacturing strategy, which is designed to allow it to rapidly produce personal computer solutions customized to customer specifications. INVESTMENT CONSIDERATIONS In addition to reviewing the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 1994, the other documents incorporated herein by reference and the other information in this prospectus, the following factors should be considered carefully in evaluating the Company and its business before purchasing the Common Stock offered hereby: Competition. The personal computer industry is highly competitive and is characterized by the frequent introduction of new products, continual improvement in product price/performance characteristics, price sensitivity on the part of customers, and a large number of competitors. The Company and other manufacturers of personal computers that adhere to industry standards generally have access to and make use of many of the same components, often from the same group of suppliers. The prices of many of these components decline periodically, and the general practice of the Company and other personal computer manufacturers is to reduce the prices of their personal computer products to reflect these component price declines. The Company may take additional pricing actions as it attempts to maintain a competitive mix of price, performance and customer support services while managing its liquidity, profitability and growth. The Company attempts to mitigate the effects of price reductions by improving product mix, further reducing component costs and lowering operating costs. There can be no assurance that pricing actions will be effective in stimulating higher levels of sales or that cost reduction efforts will offset the effects of pricing actions on the Company's gross margins. Some of the Company's competitors have greater financial, marketing, manufacturing and technological resources, broader product lines, greater brand name recognition, and larger installed customer bases than those of the Company. There can be no assurance that the Company will continue to compete successfully. Dependence on Direct Marketing Strategy. Dell primarily markets its personal computer products and services directly to customers by means of telephone and catalogues, and provides related sales, technical support and other customer services primarily by means of telephone. Accordingly, the Company is dependent on the growth of direct distribution channels in order to have a growing 3 5 market in which to sell its products and services. There can be no assurance that worldwide direct marketing channels will grow or that the Company would be able to establish a more significant presence in indirect channels of distribution if it becomes necessary or desirable in the future. New Product Development. To maintain its competitive position, the Company must continue to improve its existing products while developing and improving new products. To do so it must obtain and incorporate new hardware, software, communications and peripheral technologies that are primarily developed by others. The Company believes that it is necessary for its products to adhere to generally accepted industry standards, which are subject to change in ways that are not within the control of the Company. There can be no assurance that the Company's product development activities will be successful, that new technologies will be available to the Company, that the Company will be able to deliver commercial quantities of new products in a timely manner, that those products will adhere to generally accepted industry standards, or that the products will achieve market acceptance. Some new products introduced by the Company are intended to replace existing products. Although the Company monitors the products that are intended to be replaced and attempts to phase out the manufacture of those products in a timely manner, there can be no assurance that such transitions will be executed without adversely affecting the Company's results of operations or financial condition. Fluctuations in Operating Results, Economic Conditions and Customer Spending Patterns. The Company's operating results have varied and may continue to fluctuate from quarter to quarter and will depend on numerous factors, including, but not limited to, customer demand and market acceptance of the Company's products, new product introductions, product obsolescence, component price fluctuations, varying product mix and other factors. In addition, the Company has operated without a material backlog so that net sales in a given quarter are dependent on customer orders received in that quarter and operating expenditures are primarily based on forecasts of customer demand. As a result, if demand does not meet the Company's expectations in any given period, the sales shortfall may result in an increased impact on operating results due to the Company's inability to adjust operating expenditures quickly enough to compensate for such shortfall. The Company's business is sensitive to the spending patterns of its customers, which in turn are subject to prevailing economic conditions and other factors beyond the Company's control. The Company's results of operations could be materially adversely affected by changes in economic conditions or customer spending patterns for personal computer products. International Sales and Operations. Sales outside the United States of America represented approximately 36% of the Company's consolidated net sales in the first nine months of fiscal 1995. The Company currently sells personal computer products in more than 125 countries and manufactures products in the United States and other countries. The success and profitability of international sales and operations may be adversely affected by risks associated with international activities, including local economic and labor conditions, political instability, tax laws (including U.S. taxes on foreign subsidiaries), and changes in the value of the United States dollar versus the local currency in which products are sold. Changes in exchange rates may adversely affect the Company's net consolidated sales (as expressed in United States dollars) and gross profit margins from international operations. The Company attempts to mitigate this exposure through hedging transactions. Reliance on Key Suppliers. The Company's manufacturing process requires a high volume of quality components that are procured from third-party suppliers. Reliance on suppliers, as well as industry supply conditions, generally involves several risks, including the possibility of defective parts, a shortage of components, increases in component costs, and reduced control over delivery schedules, any or all of which could adversely affect the Company's financial results. The Company has several single supplier relationships, and the lack of availability of timely and reliable supply of components from these sources could adversely affect the Company's business. Also, the Company occasionally experiences certain defective components, which can affect the reliability and reputation of its products. There can be no assurance that the Company will be able to continue to obtain additional supplies of reliable components in a timely or cost-effective manner. In particular, 4 6 the Company obtains its supply of microprocessors, from Intel Corporation, although certain comparable microprocessors are available from other sources. The Company is continuing to increase its shipments of products incorporating Intel's Pentium microprocessor, for which there is no comparable microprocessor currently available in commercial quantities from other sources. Consolidated net sales from the Company's Pentium processor-based products represented 28% and 20% of consolidated net sales of the Company for the third fiscal quarter and nine months ended October 30, 1994, respectively. In November 1994, an inaccuracy in Intel's Pentium microprocessors was publicized that, in some cases, may cause errors in division. Based on information from Intel Corporation, the Company believes only a limited number of its Pentium microprocessor customers perform calculations affected by the inaccuracy. Nonetheless, Intel has offered replacement microprocessors to end-users for any Pentium microprocessor exhibiting this inaccuracy. By early February 1995, all of the Company's new shipments of Pentium processor-based products contained the corrected Pentium microprocessors. Although the Company had an inventory of Pentium microprocessors that exhibited the inaccuracy and previously shipped products which included such microprocessors, the Company believes that the costs associated with this inventory and replacement of Pentium microprocessors which exhibit this inaccuracy previously shipped to customers will not have a material adverse effect on the Company's results of operations or financial condition. Intellectual Property Rights. From time to time, other companies and individuals assert exclusive patent, copyright, trademark and other intellectual property rights to technologies or marks that are important to the personal computer industry or the Company's business. The Company evaluates each claim relating to its products and, if appropriate, seeks a license to use the protected technology. For example, the Company has entered into a licensing agreement with IBM providing for a license under certain IBM computer patents. The licensing agreement with IBM does not require IBM to assist the Company in duplicating its patented technology and does not protect the Company from trade secret, copyright or other violations by the Company or its suppliers in developing or selling these products. There can be no assurance, however, that the Company will be able to obtain licenses to intellectual property of third parties on commercially reasonable terms, if at all. In addition, the Company could be at a disadvantage if its competitors obtain licenses for protected technologies with more favorable terms than does the Company. If the Company or its suppliers are unable to license protected technology used in the Company's products, the Company could be prohibited from marketing those products or may have to market products without desirable features. The Company could also incur substantial costs to redesign its products or to defend any legal action taken against the Company. If the Company's products should be found to infringe protected technology, the Company could be enjoined from further infringement and required to pay damages to the infringed party. Any of these results could have a material adverse effect on the Company. Management of Growth. The Company has experienced rapid growth, which has required it to enhance and expand its management team, information systems, manufacturing operations, and other aspects of its infrastructure. If the Company continues to experience rapid growth, of which there can be no assurance, it will need to continue to improve and expand its infrastructure. There can be no assurance that the Company will be able to manage expansion of its infrastructure to support future growth effectively, nor can there be any assurance that the Company's results of operations will not be adversely affected by any such growth, enhancements or expansion. Reliance on Key Executives. The Company depends on the services of members of its executive staff, including Michael S. Dell, the founder of the Company and its Chairman and Chief Executive Officer. The loss of the services of members of its executive staff, including Michael S. Dell, could have a material adverse effect upon the Company. Share Ownership of Michael S. Dell. As of February 14, 1995, Michael S. Dell owned 8,999,735 shares of Common Stock representing approximately 23% of the outstanding shares of Common Stock as of that date. Although Mr. Dell does not hold a majority of the outstanding Common Stock, 5 7 he is likely to be in a position to influence significantly the election of some or all of the members of the Company's Board of Directors and the outcome of most corporate actions requiring stockholder approval. See "Description of Capital Stock." Impediments to Changes in Control. Certain provisions in the Certificate of Incorporation and Bylaws of the Company may make more difficult or discourage attempts to change the composition of the Board of Directors, may make more difficult or discourage takeovers of the Company, including those in which holders of the Company's Common Stock might receive a substantial premium for some or all of their shares, and could potentially depress the market price of shares of Common Stock. In addition, the ability of the Board of Directors to issue shares of preferred stock or rights to purchase preferred stock and to fix the voting, redemption, conversion and other rights thereof without stockholder approval could hinder any proposed tender offer, merger or other attempt to gain control of the Company. See "Description of Capital Stock." Hedging Activities. On November 30, 1992, the Securities and Exchange Commission's Division of Enforcement notified the Company about an informal inquiry regarding the Company's accounting practices for foreign currency hedging and trading activities and the completeness of the Company's public disclosure about those activities. The Company and its independent accountants are voluntarily cooperating with the Commission in the informal inquiry. For more information on the hedging activities of the Company, see the discussion under the caption "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -- Hedging Activities" in the Company's Annual Report on Form 10-K for the Fiscal Year Ended January 30, 1994 and under the caption "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations -- Hedging Activities" in the Company's Quarterly Report on Form 10-Q for the Quarterly Period Ended October 30, 1994, which reports are incorporated by reference herein. Volatility of Stock Price. The Common Stock is currently quoted on the Nasdaq National Market. The Company believes that factors including but not limited to new product or other announcements by the Company, its competitors or suppliers and quarterly fluctuations in the Company's and competitors' results of operations have caused significant fluctuations in the market price of the Common Stock and could continue to do so in the future. In addition, substantial sales of the Company's Common Stock in excess of historical trading volumes, as may be occasioned by the sale of Shares offered hereby, are likely to have an adverse effect on the trading price of the Company's Common Stock. Further, the Company competes in a highly dynamic industry which may result in increased volatility of the Company's Common Stock price. See "Market Prices of Common Stock." 6 8 MARKET PRICES OF COMMON STOCK The Common Stock is quoted on the Nasdaq National Market under the trading symbol DELL. The following table sets forth, for the fiscal quarters indicated, the high and low reported bid prices for the Common Stock as reported on the Nasdaq National Market.
HIGH LOW ---- ---- Fiscal Year Ending January 28, 1996 First Quarter (January 30, 1995, through February 14, 1995)................. $45 5/8 $39 1/2 Fiscal Year Ending January 29, 1995 Fourth Quarter................................................... $47 3/4 $36 3/4 Third Quarter.................................................... $44 $27 1/2 Second Quarter................................................... $30 3/4 $21 1/2 First Quarter.................................................... $30 1/8 $19 1/8 Fiscal Year Ended January 30, 1994 Fourth Quarter................................................... $28 1/8 $20 1/8 Third Quarter.................................................... $21 5/8 $15 1/8 Second Quarter................................................... $34 3/4 $13 7/8 First Quarter.................................................... $49 1/4 $27 5/8
The Common Stock was held of record by approximately 3,313 persons as of February 14, 1995. DIVIDEND POLICY COMMON STOCK Dividends on the Common Stock are payable when, as and if declared by the Board of Directors of the Company. The Company has never paid cash dividends on its Common Stock. The Company intends to retain earnings for use in its business and, therefore, does not anticipate paying any cash dividends on the Common Stock for at least the next twelve months. In addition, the Company's current line of credit generally prohibits the payment of cash dividends by the Company on the Common Stock except in certain circumstances. PREFERRED STOCK Holders of shares of the Series A Preferred Stock are entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefore, cash dividends at an annual rate of $7.00 per share, payable quarterly in arrears. Dividends are cumulative and are payable to the holders of record as they appear on the stock transfer books on such record dates as are fixed by the Board of Directors. The Series A Preferred Stock has priority as to dividends over the Common Stock. See "Description of Capital Stock -- Series A Preferred Stock." 7 9 CAPITALIZATION The following table sets forth the actual capitalization of the Company at October 30, 1994, and the pro forma capitalization adjusted to reflect the assumed conversion of all of the outstanding shares of Series A Preferred Stock to Common Stock and the payment of the aggregate conversion premium and the estimated expenses of the Company's conversion offer commenced February 21, 1995. Pursuant to the conversion offer, the Company offered to pay to holders of Series A Preferred Stock a conversion premium of $8.25 per share of Series A Preferred Stock converted into shares of Common Stock during a special conversion period which expired on March 22, 1995. This table should be read in conjunction with the Company's Annual Report on Form 10-K for the Fiscal Year Ended January 30, 1994, and Quarterly Report on Form 10-Q for the Quarterly Period Ended October 30, 1994, incorporated herein by reference.
OCTOBER 30, 1994 --------------------- PRO ACTUAL FORMA -------- -------- (IN THOUSANDS) Long-term debt(1).................................................... $100,000 $100,000 Stockholders' equity: Preferred Stock, $.01 par value (liquidation preference $100.00 per share); shares authorized: 5,000,000; shares issued and outstanding (liquidation preference $100.00 per share): 1,250,000 actual and no shares outstanding pro forma............ 13 -- Common Stock, $.01 par value; shares authorized: 100,000,000; shares issued and outstanding: 39,086,664 actual and 44,349,789 pro forma(2).................................................... 391 444 Additional paid-in capital......................................... 342,909 342,869 Unrealized loss on short-term investments.......................... (2,451) (2,451) Retained earnings.................................................. 253,114 242,501 Translation adjustment............................................. (12,155) (12,155) -------- -------- Total stockholders' equity................................. 581,821 571,208 -------- -------- Total capitalization....................................... $681,821 $671,208 ======== ========
- --------------- (1) Consists of the Company's 11% Senior Notes Due August 15, 2000. (2) Excludes 10,262,391 shares of Common Stock reserved for issuance under the Company's employee benefit plans. Options for 6,203,033 shares under such plans were outstanding at October 30, 1994. 8 10 SELLING STOCKHOLDERS The following table sets forth the name of each Selling Stockholder and relationship with the Company and (i) the number of shares of Common Stock owned by each Selling Stockholder as of February 21, 1995, (ii) the maximum number of shares of Common Stock which may be offered for the account of such Selling Stockholder under this Prospectus, and (iii) the amount and percentage of Common Stock to be owned by the Selling Stockholder after completion of the offering assuming the sale of all the Common Stock which may be offered hereunder.
AMOUNT AND PERCENTAGE OF COMMON STOCK OWNED AFTER MAXIMUM NUMBER OF THE OFFERING(2) NAME OF SHARES OWNED SHARES WHICH MAY BE ----------------------- SELLING STOCKHOLDER PRIOR TO OFFERING(1) SOLD HEREUNDER AMOUNT PERCENTAGE - ----------------------------- -------------------- ------------------- -------- ----------
- --------------- (1) Beneficial ownership as of , 1995 based upon information provided by the respective Selling Stockholders. (2) Assumes sale of all shares of Common Stock registered hereunder, although Selling Stockholders are under no obligation known to the Company to sell any shares of Common Stock at this time. The Company will pay the expenses of registering the shares of Common Stock being sold hereunder, which are estimated to be $ . 9 11 PLAN OF DISTRIBUTION The Shares may be sold pursuant to the offer made hereby from time to time through April , 1995, by the Selling Stockholders. The sales may be made only in ordinary brokerage transactions and transactions in which brokers solicit purchasers at prices and at terms then prevailing or at prices related to the then current market price of the Common Stock on the Nasdaq National Market. The Shares consist of Common Stock issued to the Selling Stockholders upon conversion of the Company's Series A Preferred Stock. The Selling Stockholders must effect sales to or through broker-dealers, and the broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholders or the purchasers of the shares of Common Stock for that the broker-dealer is selling, or both. The Company has advised the Selling Stockholders that the anti-manipulative Rules 10b-6 and 10b-7 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), may apply to their sales in the market and has informed them of the need for delivery of copies of this Prospectus. The Company is not aware as of the date of this Prospectus of any agreements between any of the Selling Stockholders and any broker-dealers with respect to the sale of the shares offered by this Prospectus. The Selling Stockholders and any broker, dealer or other agent executing sell orders on behalf of the Selling Stockholders may be deemed to be "underwriters" within the meaning of the Securities Act, in which case the commissions received by any such broker, dealer or agent and profit on any resale of the shares of Common Stock may be deemed to underwriting commissions under the Securities Act. The commissions received by a broker, dealer or agent may be in excess of customary compensation. The Company will receive no part of the proceeds from the sale of Shares hereunder. Pursuant to the Registration Agreement entered into by and among the Company and the Selling Stockholders, the Selling Stockholders will pay their costs and expenses of selling the Shares hereunder, including commissions and discounts of underwriters, brokers, dealers or agents, and the Company has agreed to pay the costs and expenses incident to its registration and qualification of the Shares offered hereby, including registration and filing fees. In addition, the Company has agreed to indemnify the Selling Stockholders against certain liabilities, including liabilities arising under the Securities Act. There can be no assurance that any of the Selling Stockholders will sell any or all of the shares of Common Stock offered by them hereunder. 10 12 DESCRIPTION OF CAPITAL STOCK The following summary description is qualified in its entirety by reference to the Company's Certificate of Incorporation, as amended, which is filed as an exhibit to the Registration Statement of which this Prospectus is a part. The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par value $.01 per share (the "Preferred Stock"). COMMON STOCK The Company is authorized to issue up to 100,000,000 shares of Common Stock. As of February 14, 1995, there were 39,695,611 shares of Common Stock outstanding. The holders of Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Because holders of Common Stock do not have cumulative voting rights, the holders of a majority of the shares of Common Stock represented at a meeting have the power to elect all of the directors to be elected at that meeting. Subject to the prior rights of holders of Preferred Stock, the holders of Common Stock are entitled to dividends, when and as declared by the Board of Directors out of funds legally available therefor. The terms of the Company's line of credit restrict payment of cash dividends except in certain circumstances. See "Dividend Policy." If the Company dissolves or is liquidated, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of Preferred Stock. Holders of Common Stock have no preemptive rights and have no right to convert their Common Stock into any other securities. All of the outstanding shares of Common Stock are, and all shares of Common Stock offered hereby are or will be, upon conversion of Series A Preferred Stock, fully paid and nonassessable. The Certificate of Incorporation of the Company divides the Board of Directors of the Company into three classes, each class to be as nearly equal in number of directors as possible. At each annual meeting of stockholders, directors in each class are elected for three year terms to succeed the directors of that class whose terms are expiring. Paul O. Hirschbiel, Donald J. Carty and Thomas W. Luce, III, are Class I directors with their terms of office expiring in 1995. Michael S. Dell and Michael H. Jordan are Class II directors with their terms of office expiring in 1996. George Kozmetsky and Claudine B. Malone are Class III directors with their terms of office expiring in 1997. The Certificate of Incorporation and Bylaws of the Company also provide that directors may be removed from office only for cause (as defined in the Certificate of Incorporation), that stockholder action must be taken at a duly called annual or special meeting (and not by written consent), and that stockholders follow an advance notification procedure for certain stockholder nominations of candidates for the Board of Directors and for certain other stockholder business to be conducted at an annual meeting. The existence of these provisions of the Company's Certificate of Incorporation and Bylaws may be disadvantageous to the extent they discourage takeovers in which stockholders might receive a substantial premium for some or all of their shares. Therefore, stockholders who desire to participate in such a takeover may not be afforded the opportunity to do so, even when such stockholders believe participation to be in their best interest. Also, such provisions may reduce temporary fluctuations in the market price of the Common Stock that may accompany the accumulation of large blocks of Common Stock and thereby deprive stockholders of an opportunity to sell their stock at a temporarily higher price. In addition to reducing temporary market fluctuations, such provisions could potentially depress the market price of shares of Common Stock and may have the effect of discouraging changes in control, particularly those that are opposed by the Company's incumbent management, even if a majority of stockholders desire the change in control. Such provisions thereby could also prevent the removal of management. 11 13 In addition, the ability of the Board of Directors to issue shares of Preferred Stock and to fix the voting, redemption, conversion and other rights thereof without stockholder approval could hinder any proposed tender offer, merger or other attempt to gain control of the Company. See "Description of Capital Stock -- Blank Check Preferred Stock." TRANSFER AGENT AND REGISTRAR The transfer agent and registrar for the Common Stock is American Stock Transfer & Trust Company. BLANK CHECK PREFERRED STOCK Pursuant to the Certificate of Incorporation of the Company, the Board of Directors has the authority, without further stockholder approval, to provide for the issuance of up to 5,000,000 shares of Preferred Stock in one or more series and to determine the dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preferences, the number of shares constituting any such series, and the designation of such series. Because the Board of Directors has the power to establish the preferences and rights of each series, it may afford the holders of any Preferred Stock preferences, powers and rights (including voting rights) senior to the rights of the holders of Common Stock. Other than the shares of Series A Preferred Stock described below, no shares of Preferred Stock have been issued and remain outstanding before this Offering. The issuance of shares of Preferred Stock or the issuance of rights to purchase shares of stock may have the effect of delaying, deferring or preventing a change in control of the Company. SERIES A PREFERRED STOCK The Series A Preferred Stock has been authorized as a series of Preferred Stock, consisting of 1,250,000 shares. As of February 14, 1995, 1,250,000 shares of Series A Preferred Stock were issued and outstanding. The terms and provisions of the Series A Preferred Stock are set forth in the Certificate of Designation (the "Certificate of Designation") creating the Series A Preferred Stock. Certain terms and provisions are summarized below. This summary does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of the Certificate of Designation, including the definitions therein of certain terms, which is incorporated herein by reference. A copy of the Certificate of Designation may be obtained from Dell Computer Corporation, 2112 Kramer Lane, Building 1, Austin, Texas 78758-4012, Attention: Investors Relations. Dividends. Holders of shares of Series A Preferred Stock are entitled to receive, when, as and if declared by the Board of Directors out of funds legally available therefore, cash dividends at an annual rate of $7.00 per share, payable quarterly in arrears. Dividends are cumulative and are payable to the holders of record as they appear on the stock transfer books on such record dates as are fixed by the Board of Directors. The Series A Preferred Stock has priority as to dividends over the Common Stock and any other series or class of the Company's stock thereafter issued that ranks junior as to dividends to the Series A Preferred Stock, when and if issued (collectively, "Junior Dividend Stock"), and no dividend (other than dividends payable solely in stock that is Junior Dividend Stock and that ranks junior to the Series A Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary (such stock that is junior as to liquidation rights, "Junior Liquidation Stock") (the Common Stock and any other capital stock of the Company that is both Junior Dividend Stock and Junior Liquidation Stock, "Junior Stock") may be paid on any Junior Dividend Stock, and no payment may be made on account of the purchase redemption, retirement, or other acquisition of Junior Dividend Stock or Junior Liquidation Stock (other than such acquisitions pursuant to employee or director incentive or benefit plans or arrangements, or acquisitions or exchanges solely for Junior Stock), unless all accrued and unpaid 12 14 dividends on the Series A Preferred Stock for all dividend payment periods ending on or before the date of payment of such dividends on Junior Dividend Stock, or such payment for such Junior Dividend Stock or Junior Liquidation Stock, as the case may be, have been paid or declared and set apart for payment. The Company may not pay dividends on any other series or class of the Company's stock hereafter issued that ranks on a parity with the Series A Preferred Stock as to dividends ("Parity Dividend Stock"), and may not make any payment on account of the purchase, redemption, retirement or other acquisition of shares of Parity Dividend Stock or any other series or class of the Company's stock hereafter issued that ranks on a parity with the Series A Preferred Stock as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary (such stock that has parity with the Series A Preferred Stock as to liquidation rights, "Parity Liquidation Stock") (other than such acquisitions pursuant to employee or director incentive or benefit plans or arrangements, or acquisitions or exchanges solely for Junior Stock), unless all accrued and unpaid dividends on the Series A Preferred Stock for all dividend payment periods ending on or before the date of payment of such dividends on Parity Dividend Stock, or such payment for such Parity Dividend Stock or Parity Liquidation Stock, as the case may be, have been paid or declared and set apart for payment. Liquidation Rights. In the case of the voluntary or involuntary liquidation, dissolution or winding up of the Company, holders of shares of Series A Preferred Stock are entitled to receive the liquidation preference of $100.00 per share, plus an amount equal to any accrued and unpaid dividends to the payment date, before any payment or distribution is made to the holders of Common Stock or any other series or class of the Company's stock hereafter issued that ranks junior to the Series A Preferred Stock as to distributions of assets upon such liquidation, dissolution or winding up, but the holders of the shares of the Series A Preferred Stock will not be entitled to receive the liquidation preference of such shares until the liquidation preference of any other series or class of the Company's stock hereafter issued that ranks senior to the Series A Preferred Stock as to distributions of assets upon such dissolution, liquidation or winding up ("Senior Liquidation Stock") has been paid in full. The holders of Series A Preferred Stock and all series or classes of the Company's stock hereafter issued that rank on a parity with the Series A Preferred Stock as to distributions of assets upon such liquidation, dissolution or winding up of the Company are entitled to share ratably, in accordance with the respective preferential amounts payable on such stock, in any distribution (after payment of the liquidation preference of the Senior Liquidation Stock) which is not sufficient to pay in full the aggregate of the preferential amounts payable thereon. After payment in full of the liquidation preference of the shares of the Series A Preferred Stock, the holders of such shares will not be entitled to any further participation in any distribution of assets by the Company. Neither a consolidation or merger of the Company with another corporation nor a sale or transfer of all or part of the Company's assets for cash, securities or other property will be considered a liquidation, dissolution or winding up of the Company. Voting Rights. The holders of the Series A Preferred Stock have no voting rights except as described below or as required by law. In exercising any such vote, each outstanding share of Series A Preferred Stock will be entitled to one vote, excluding shares held by the Company or any affiliate of the Company, which shares have no voting rights. Whenever dividends on the Series A Preferred Stock or on any outstanding shares of Parity Dividend Stock have not been paid in an aggregate amount equal to at least six quarterly dividends on such shares (whether or not consecutive), the number of members of the Company's Board of Directors will be increased by two, and the holders of the Series A Preferred Stock, voting separately as a class with the holders of Parity Dividend Stock on which like voting rights have been conferred and are exercisable, will be entitled to elect such two additional directors at any meeting of stockholders at which directors are to be elected held during the period such dividends remain in arrears. Such voting rights will terminate when all such accrued and unpaid dividends have been declared and paid or set apart for payment. The term of office of all directors so elected will terminate immediately upon the termination of such voting rights. 13 15 In addition, so long as any Series A Preferred Stock is outstanding, the Company may not, without the affirmative vote or consent of the holders of at least 66 2/3% (unless a higher percentage shall then be required by applicable law) of all outstanding shares of Series A Preferred Stock, voting separately as a class, (i) amend, alter or repeal any provision of the Company's Certificate of Incorporation or Bylaws so as to affect adversely the relative rights, preferences, qualifications, limitations, or restrictions of the Series A Preferred Stock, (ii) create, authorize or issue, or reclassify any authorized stock of the Company into, or increase the authorized amount of, any series or class of stock that ranks senior to the Series A Preferred Stock as to dividends or distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any security convertible into any such class or series of such stock, or (iii) enter into a share exchange that affects the Series A Preferred Stock, consolidate with or merge into another entity, or permit another entity to consolidate with or merge into the Company, unless in each such case each share of Series A Preferred Stock remains outstanding and unaffected or is converted into or exchanged for convertible preferred stock of the surviving entity having powers, preferences and relative participating optional or other rights and qualification limitations and restrictions thereof identical to that of a share of Series A Preferred Stock (except for changes that do not affect the holders of the Series A Preferred Stock adversely). Redemption at Option of the Company. The Series A Preferred Stock may not be redeemed before August 25, 1996. On and after that date, the Series A Preferred Stock may be redeemed by the Company, at its option, in whole or in part at any time, subject to the limitations, if any, imposed by applicable law, at a redemption price per share of $104.67 if redeemed at any time during the period from August 25, 1996, through August 15, 1997, and at the following redemption prices per share, if redeemed during the 12-month period ending August 15:
PRICE YEAR PER SHARE ---- --------- 1998.............................................. $103.89 1999.............................................. 103.11 2000.............................................. 102.33 2001.............................................. 101.56 2002.............................................. 100.78
and thereafter at $100.00 per share, plus, in each case, accrued and unpaid dividends to but excluding the redemption date. Conversion Rights. The holder of any shares of Series A Preferred Stock has the right, at the holder's option, to convert any or all shares into Common Stock at any time at the rate of 4.2105 shares of Common Stock for each share of Series A Preferred Stock (equivalent to a conversion price of $23.75 for each share of Common Stock), subject to adjustment in certain circumstances, except that if the Series A Preferred Stock is called for redemption, the conversion right will terminate at the close of business on the fifth business day prior to the date fixed for such redemption. LEGAL MATTERS The validity of the shares of Common Stock being sold in the offering is being passed upon for the Company by Wilson, Sonsini, Goodrich, & Rosati, Professional Corporation, Palo Alto, California. EXPERTS The consolidated financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the Fiscal Year Ended January 30, 1994, have been so incorporated in reliance on the report of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. 14 16 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. --------------------- TABLE OF CONTENTS
PAGE ---- Available Information................. 2 Incorporation of Certain Documents by Reference........................... 2 The Company........................... 3 Investment Considerations............. 3 Market Prices of Common Stock......... 7 Dividend Policy....................... 7 Capitalization........................ 8 Selling Stockholders.................. 9 Plan of Distribution.................. 10 Description of Capital Stock.......... 11 Legal Matters......................... 14 Experts............................... 14
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5,263,125 SHARES DELL COMPUTER CORPORATION COMMON STOCK (PAR VALUE $.01 PER SHARE) --------------------- DELL (LOGO) --------------------- PROSPECTUS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 17 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The estimated expenses payable by Dell Computer Corporation (the "Registrant") in connection with the registration of the securities offered hereby are as follows: SEC filing fee........................................................... $ * Printing and engraving expenses.......................................... * Legal fees and expenses.................................................. * Accounting fees and expenses............................................. * Transfer agent and registrar fees........................................ * Miscellaneous............................................................ * -------- Total.................................................................. $ * =========
- --------------- * To be supplied by amendment. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Registrant's Certificate of Incorporation provides that no director of the Registrant will be personally liable to the Registrant or any of its stockholders for monetary damages arising from the director's breach of fiduciary duty as a director. However, this does not apply with respect to any action in which the director would be liable under Section 174 of Title 8 of the General Corporation Law of Delaware nor does it apply with respect to any liability in which the director (i) breached his duty of loyalty to the Registrant; (ii) did not act in good faith or, in failing to act, did not act in good faith; (iii) acted in a manner involving intentional misconduct or a knowing violation of law or, in failing to act, shall have acted in a manner involving intentional misconduct or a knowing violation of law; or (iv) derived an improper personal benefit. The Registrant's Certificate of Incorporation and Bylaws provide that it will indemnify its officers and directors and former officers and directors against any expenses, judgments or settlement payments sustained or paid by such persons as a result of having acted as an officer or director of the Registrant, or, at the request of the Registrant, as an officer, director, agent or employee of another business entity. The Bylaws further provide that the Registrant may, by action of its Board of Directors, provide indemnification to employees and agents of the Registrant, individually or as a group, with the same scope and effect as the indemnification of directors and officers. The Registrant has entered into indemnity contracts with some of its executive officers and directors. Each such indemnity agreement provides for indemnification of officers and directors of the Registrant to the greatest extent permitted by the General Corporation Law of Delaware and additionally provides (i) that such persons shall be indemnified for amounts paid in settlement of derivative actions, (ii) for advances of investigation and litigation expenses subject to repayment if indemnification is disallowed, (iii) that indemnification is available unless the Board of Directors or independent legal counsel determines that the relevant standards were not satisfied, with the Registrant bearing the burden of proving same in any suit for indemnification, (iv) for partial indemnification where the officer or director is not entitled to full indemnification, (v) that no claim or cause of action may be asserted by or on behalf of the Registrant after the expiration of two years from the date such persons cease to be directors and/or officers with respect to claims against them in such capacities, and (vi) for payment to such persons of expenses incurred in connection with the successful prosecution, in whole or in part, of any amount not timely paid (generally within 30 days of demand) by the Registrant. In addition, the Registrant currently maintains directors and officers liability insurance. II-1 18 Pursuant to the provisions of Section 145 of the General Corporation Law of Delaware, every Delaware corporation has the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of any corporation, partnership, joint venture, trust or other enterprise, against any and all expenses, judgments, fines and amounts paid in settlement and reasonably incurred in connection with such action, suit or proceeding. The power to indemnify applies only if such person acted in good faith and in a manner he reasonably believed to be in the best interest, or not opposed to the best interest, of the corporation and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The power to indemnify applies to actions brought by or in the right of the corporation as well, but only to the extent of defense and settlement expenses and not to any satisfaction of a judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event of any adjudication of negligence or misconduct unless the court, in its discretion, believes that in light of all the circumstances indemnification should apply. To the extent any of the persons referred to in the two immediately preceding paragraphs is successful in the defense of the actions referred to therein, such person is entitled pursuant to Section 145 to indemnification as described above. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"), may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT - --------------------------------------------------------------------------------------------- 3.1 -- Certificate of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 of the Registrant's Annual Report on Form 10-K for the year ended February 2, 1992, Commission File No. 0-17017). 3.2 -- Certificate of Amendment to the Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant's Annual Report on Form 10-K for the year ended January 31, 1993, Commission File No. 0-17017). 3.3 -- Certificate of Correction to the Certificates of Amendment of Certificate of Incorporation filed on May 9, 1988 and July 10, 1992, respectively, of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended May 1, 1994, Commission File No. 0-17017). 3.4 -- Certificate of Stock Designation of the Registrant (incorporated by reference to Exhibit 3.3 of the Registrant's Registration Statement on Form S-4 as filed with the Securities and Exchange Commission on October 1, 1993, Registration No. 33-69680). 3.5 -- Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant's Annual Report on Form 10-K for the year ended February 2, 1992, Commission File No. 0-17017). 5.1* -- Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation. 10.1 -- Severance Agreement dated September 15, 1994, between the Company and Joel Kocher.
II-2 19
EXHIBIT NO. DESCRIPTION OF EXHIBIT - --------------------------------------------------------------------------------------------- 23.1 -- Consent of Price Waterhouse LLP 23.2* -- Consent of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1). 24.1 -- Power of attorney (included on the signature page on Part II of this Registration Statement). 99.1 -- Registration Agreement among the Registrant and the Selling Stockholders named herein.
- --------------- * To be filed by amendment. ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act. (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that the undertakings set forth in Paragraph (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are incorporated by reference in this Registration Statement. 2. That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 4. That, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 20 Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-4 21 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas, on February 20, 1995. DELL COMPUTER CORPORATION By: /s/ MICHAEL S. DELL Michael S. Dell Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Each person whose signature appears below hereby authorizes and appoints Michael S. Dell, Thomas J. Meredith, Thomas B. Green and Dalton W. Kaye, or any of them, as his or her attorney-in-fact to sign on his or her behalf, individually and in the capacity stated below, all amendments and post-effective amendments to this Registration Statement as that attorney-in-fact may deem necessary or appropriate.
SIGNATURE TITLE DATE - --------------------------------------------- --------------------------- ------------------ /s/ MICHAEL S. DELL Chairman of the Board and Michael S. Dell Chief Executive Officer (Principal Executive Officer) February 20, 1995 /s/ THOMAS J. MEREDITH Chief Financial Officer Thomas J. Meredith (Principal Financial and Accounting Officer) February 20, 1995 /s/ DONALD J. CARTY Director Donald J. Carty February 20, 1995 /s/ DR. GEORGE KOZMETSKY Director Dr. George Kozmetsky February 20, 1995 /s/ PAUL O. HIRSCHBIEL, JR. Director Paul O. Hirschbiel, Jr. February 20, 1995 /s/ THOMAS W. LUCE, III Director Thomas W. Luce, III February 20, 1995 /s/ MICHAEL H. JORDAN Director Michael H. Jordan February 20, 1995 /s/ CLAUDINE B. MALONE Director Claudine B. Malone February 20, 1995
II-5 22 INDEX TO EXHIBITS
SEQUENTIAL EXHIBIT PAGE NO. DESCRIPTION OF EXHIBIT NUMBER - ---------------------------------------------------------------------------------------------- 3.1 -- Certificate of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 of the Registrant's Annual Report on Form 10-K for the year ended February 2, 1992, Commission File No. 0-17017). 3.2 -- Certificate of Amendment to the Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant's Annual Report on Form 10-K for the year ended January 31, 1993, Commission File No. 0-17017). 3.3 -- Certificate of Correction to the Certificates of Amendment of Certificate of Incorporation filed on May 9, 1988 and July 10, 1992, respectively, of the Registrant (incorporated by reference to Exhibit 3.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended May 1, 1994, Commission File No. 0-17017). 3.4 -- Certificate of Stock Designation of the Registrant (incorporated by reference to Exhibit 3.3 of the Registrant's Registration Statement on Form S-4 as filed with the Securities and Exchange Commission on October 1, 1993, Registration No. 33-69680). 3.5 -- Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant's Annual Report on Form 10-K for the year ended February 2, 1992, Commission File No. 0-17017). 5.1* -- Opinion of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation. 10.1 -- Severance Agreement dated September 15, 1994, between the Company and Joel Kocher. 23.1 -- Consent of Price Waterhouse LLP 23.2* -- Consent of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1). 24.1 -- Power of attorney (included on the signature page on Part II of this Registration Statement). 99.1 -- Registration Agreement among the Registrant and the Selling Stockholders named herein.
- --------------- * To be filed by amendment. EX-10.1 2 JOEL KOCHER SEVERANCE AGREEMENT 1 September 15, 1994 Mr. Joel J. Kocher 9201 Simmons Road #109 Austin, Texas 78759 Dear Joel: This letter sets forth the mutual agreement (the "Agreement") between Dell Computer Corporation for itself and its subsidiaries (collectively, the "Company") and you regarding your voluntary election to terminate your employment by the Company. 1. You and Dell agree that this Agreement is entered into in connection with the amicable termination of your employment by Dell, and that your employment will be terminated effective 11:59 p.m. local time in Austin, Texas on October 4, 1994 (the "Termination Effective Date"). The Company agrees to pay to you in full all of your salary and every other type of benefit due and owing to you or accrued to you (including any accrued right to present or future deferred compensation) through and including the Termination Effective Date. Dell will also pay your health insurance through the Termination Effective Date. After that date, you will be responsible for the payments to continue health insurance provided under Dell's group policy, if you wish to continue such insurance, pursuant to the conditions of COBRA. Disability insurance benefits will be discontinued on the effective date of this letter agreement, which is September 15, 1994 (the "Execution Date"). The Company will pay for all services provided to you by Price, Waterhouse & Co. through the Termination Effective Date in accordance with your present entitlements to Price, Waterhouse tax preparation services. 2. You agree that you are not entitled to receive from Dell, or from any of its officers, managers, directors, employees, agents or representatives, any form of consideration or the payment of any amount other than what is expressly set forth in this Agreement. You agree that you are not entitled to receive from Dell any payment or distribution of any other type of property, except as expressly set forth in this Agreement. You further agree that as of the Execution Date you do not own and do not hold any rights to outstanding vested and unexercised stock options to purchase shares of Dell's Common Stock from the Company with the exception of the following shares at the indicated exercise prices: 21,000 shares at $3.92/share; 23,070 shares at $17.33/share; 40,950 shares at $9.77/share; 9,000 shares at $23.66/share; 35,000 shares at $.0100/share; and 2,400 shares at 30.69/share. As provided in 2 Mr. Joel Kocher September 15, 1994 Page 2 the option agreements, the period for you to exercise all of such options will expire and terminate automatically without further notice at 11:59 p.m. local time in Austin, Texas on November 3, 1994. In addition, as provided in the option agreements, if you fail to exercise any or all of the options listed in this paragraph prior to 11:59 p.m. on November 3, 1994, you will lose the right to acquire the shares subject to any of such options which remain unexercised at that time, and all of such unexercised options shall become null and void and of no further force or effect without any further action or notice of any kind. In the exercise of such options, as well as in connection with any other transactions involving Dell's securities, you understand and agree that you are and will be subject to all the requirements of applicable laws, rules and regulations, including but not limited to the provisions and requirements of Federal securities laws and regulations with regard to "short-swing" trading; and you agree to comply with all such laws, rules and regulations. You further agree to inform the Company regarding, and provide the Company with a copy of, any divorce decree or other agreement that may affect your ability to retain ownership of any or all of the stock options specified in this Agreement, prior to exercising any of such options. 3. On September 14, 1994, you resigned from all positions as a corporate officer or director of Dell Computer Corporation and its subsidiaries and affiliates, without prejudice to your rights to compensation through the Termination Effective Date. 4. You agree that the consideration and promises set forth in this Agreement constitute full and adequate consideration to support this Agreement and each provision hereof. In addition to the other consideration granted to you in this Agreement, the Company agrees to allow you to retain, as your sole property, the Dell 486P computer, monitor and printer and Dell Latitude XP notebook computer currently in your possession. The Company further agrees that you may retain the office chair, as your sole property, which you are currently using at the Execution Date at the Company's place of business. You shall have access to these items and to your personal office during regular office hours until 5:00 p.m. local time on Saturday, September 17, 1994 as necessary to remove these items and your personal belongings. 5. Your vested balance in Dell's 401(k) Plan Trust (if any) and Dell's Deferred Compensation Plan will be available for you to withdraw or roll over in accordance with the provisions of the Plan after the end of the current calendar quarter, subject to applicable laws and regulations. Any balance you may have in Dell's Employee Stock Purchase Plan will also be available for you to withdraw in accordance with the provisions of the Plan. The Company holds 9000 shares of Dell's Common Stock belonging to you, which will be available for delivery to you in accordance with the stock option agreement, as amended by this letter, under which such stock was issued. You agree to inform the Company, and provide the Company with a copy, of any divorce decree or other agreement that may affect your rights of ownership or right to retain such stock, as well as any balance in Dell's 401(k) Plan Trust, Dell's Deferred Compensation Plan, or Dell's Employee Stock Purchase Plan prior to the time that you withdraw or roll over any balance in either of the above plans. 3 Mr. Joel Kocher September 15, 1994 Page 3 6. From and after the time of your resignation as set forth in Paragraph 3 you will have no duties, obligations or responsibilities to perform any work or services for or on behalf of the Company except as expressly provided in this Agreement. You agree to cooperate with the Company and provide a mutually acceptable amount of assistance, at no additional charge, to the Company in preparing its defense to the litigation it is currently involved in instituted by some of its shareholders. The Company will pay, or, at your election, reimburse your actual, reasonable out-of-pocket expenses incurred in connection with such assistance. You further agree that you will comply with any continuing obligation under the Federal Securities Laws, including any reporting requirements regarding your trading activity in Dell's securities; and that you will promptly provide the Company with copies of any reports you submit to the U.S. Securities and Exchange Commission regarding your trading activities in Dell's securities. You will be free to undertake other employment after the Execution Date so long as your employment and services do not contravene any other provision of this Agreement. The Company represents and agrees that it has and shall continue to have after the execution date, an obligation, in accordance with the provisions of Dell's Charter and Bylaws, to indemnify you against, and hold you harmless from, any and all third party claims, demands and causes of action (including those based on negligence or gross negligence but excluding those based on intentional misconduct or the willful violation of any statute or law), and from all liability, damages, fines, penalties and other assessments or obligations of any kind (including costs of defense and amounts paid in settlement) asserted by any third party to the extent attributable to your status as an employee or officer (except for claims based on intentional misconduct or the willful violation of any statute based on intentional misconduct or the willful violation of any statute or law). This indemnity shall be limited as necessary to assure compliance by the Company with any law, rule or regulation prohibiting indemnification of the Company's officers or employees for specific kinds of claims. The Company also represents that you are and will continue to be an "insured" with respect to any claim which may become subject to the foregoing indemnity under all policies of insurance maintained by the Company from time to time insuring such risks. 7. The Company is immediately entitled to receive and recover from you any of the profits received by you from the stock options with accelerated vesting, as further described in Paragraph 17, in the event, and only in the event, and to the extent, and only to the extent, of any loss or expense incurred by the Company due to your breach of any provision of this Agreement, including any provision requiring future compliance with the Federal Securities Laws, to the extent that such loss or expense would otherwise be recoverable in an action for breach of the Agreement. 8. You agree that by execution of the Agreement you fully, finally, completely and generally release the Company and each of its officers, managers, directors, control persons, employees, agents and representatives, individually and separately, from any and all claims, actions, liabilities, obligations, demands, and/or causes of action, of whatever kind or character, whether known or unknown, arising from, relating to, or in any way connected with (i) any of the foregoing persons, (ii) your employment, resignation or termination of employment with the 4 Mr. Joel Kocher September 15, 1994 Page 4 Company, (iii) your decision to move to or from or accept employment in Austin, Texas, (iv) your severance of employment with your former employer prior to accepting employment with the Company, or (v) any act or omission that has occurred on or before the Execution Date in connection with any activity related to any of the foregoing persons or to any activity, statements, controversy or dispute related to your employment, resignation or termination of employment with the Company. The foregoing release does not cover any claim, demand, or cause of action to the extent that it arises out of any breach of or default under this Agreement or any other act or omission after the Execution Date. 9. The release set forth in Paragraph 8 above shall be construed as broadly as possible and shall include without limitation: (1) any tort, contractual or other claim you may have; (2) any claim arising out of or in connection with the initiation, termination or existence of your employment relationship with the Company, or any act, service or omission performed or not performed by or on behalf of the Company; (3) any claim arising under the Federal Age Discrimination in Employment Act, the Civil Rights Act of 1964, or any applicable Texas statute or regulation; and (4) except as to rights under the plans described in Paragraph 4 above and the stock options described in Paragraph 2 above, any claim regarding accrued vacation, bonuses, deferred compensation or any other form of tangible or intangible benefit from or attributable to the Company or any of the persons described in Paragraph 8. You represent that you have not assigned to any other person any of the claims and causes of action described in this Paragraph and in Paragraph 8 and that you have the full right to grant the release set forth in this Agreement. 10. The Company hereby fully, finally, completely and generally releases you from any and all claims, actions, demands and/or causes of action, of whatever kind or character, whether known or unknown, arising from, relating to, or in any way connected with any act or omission by you that has occurred on or before the Execution Date in connection with your employment by the Company; provided, however, that such release shall not be applicable to any acts or omissions by you which constitute willful or intentional misconduct, or willful or intentional wrongdoing. The foregoing release does not cover any claim, demand, or cause of action to the extent that it arises out of any breach of or default under this Agreement or any other act or omission after the Execution Date. 11. The release set forth in Paragraph 10 above shall be construed as broadly as possible and shall include without limitation: (1) any tort, contractual or other claim the Company may have; (2) any claim arising out of or in connection with the initiation, termination or existence of your employment relationship with the Company; and (3) any claim arising out of any act, service or omission performed or not performed by you; but shall not include any act or omission by you which constitutes willful or intentional misconduct, or willful or intentional wrongdoing. The Company represents that it has not assigned to any other person any of the claims and causes of action described in this Paragraph and in Paragraph 10 and that it has the full right to grant the release set forth in this Agreement. 5 Mr. Joel Kocher September 15, 1994 Page 5 12. You represent that you do not have in your possession or under your control any correspondence, any memoranda, or any other documents or tangible media of any kind (whether duplicated, copies or originals) which contain any information belonging to the Company or related in any manner whatsoever to its business. You agree that you will not take any such documents or media as described above from the control or premises of the Company, and that if you should find yourself in the possession of any of the same, you will return all of the same (and any duplications and copies thereof) to the Company immediately. You will have the right to review the Company's records at any reasonable time upon reasonable notice, and to make copies or extracts thereof, as necessary to respond to any third party claim, demand, or inquiry into the propriety of your conduct while employed by the Company, provided that the Company may take any measures deemed by it to be necessary (including denial of access by you) to protect its trade secrets or Confidential and Proprietary Information as herein defined. The Company agrees to provide you with access to all of the nonconfidential business files currently in your office, at a reasonable location within the Company's Braker 1 building selected by the Company, during regular business hours through Friday, September 23, 1994 for the purpose of abstracting from such business files such managerial and other information as you choose which does not constitute valuable proprietary "Confidential Information" (as defined elsewhere in this Agreement) belonging to Dell, and taking such abstracts with you for your future use. You agree not to make exact copies of, or remove from the Braker 1 building, any of such business files or any document therein. You also agree to permit Dell's General Counsel or his designee to inspect the location where you have been abstracting files each day immediately prior to your departure from that location. 13. For the duration of the "Restriction Period" (which for purposes of this Agreement shall be defined to mean the period from the Execution Date, through and including October 31, 1996), except as permitted under Paragraph 4 above, as incidental to the negotiation and documentation of this agreement, or as otherwise requested or permitted in writing by the Company, you will not return to the place of business where you were employed by the Company, you will not travel to or visit any of the Company's business locations, and you will not call or visit any of the Company's employees during working hours or in any way or at any time disrupt or undertake any activity that would have a tendency to disrupt the business endeavors of the Company or its employees. Upon the Company's prior written request or permission, you may visit the Company for the purpose of establishing and maintaining a business relationship between your new employer and the Company. 14. You acknowledge that the Company conducts business in all fifty states of the United States and in numerous foreign nations including but not limited to the countries of the U.K., Eire, France, Germany, Spain, Italy, Switzerland, Finland, Norway, Sweden, Canada, Mexico, Australia, Japan, the Czech Republic and Poland. In addition, you acknowledge that at the Execution Date the Company's products are sold through distributors and resellers in more than 100 additional nations throughout the world and that you were since May, 1993 ultimately in charge of and responsible for the Company's sales in all such nations. You further acknowledge and agree that in your position with the Company you have since May, 1993 6 Mr. Joel Kocher September 15, 1994 Page 6 represented the Company throughout the world and have since May, 1993 acted as the Company's most senior officer (except for the CEO) everywhere in the world; that you have received from the Company unique and special knowledge and training which was not previously available to you before your employment with the Company; that the Company possesses and utilizes at the Execution Date trade secrets not known or used by the Company's competitors, which trade secrets give the Company an advantage over its competitors; that during your employment with the Company you have received knowledge of and confidential information about the Company's trade secrets including but not limited to those relating to its production, research, marketing, service, support, pricing and sales practices and policies; that at the Execution Date the Company's manufacturing, administrative and other premises are restricted by security procedures put in place by the Company and that Company-hired security guards are on duty at all times to monitor and protect the Company's premises and information; that it would take any person or entity a significant amount of time to enter any of the Company's markets and to achieve substantial commercial success in such markets because the necessary understanding of any technical data and information relating to such markets (and to their customers, pricing, product offerings and service delivery methods) would be difficult and costly to develop; that you were involved in organizing the Company's pricing practices and had access to the Company's sales data and customer lists; that the Company's customer lists at the Execution Date contain information not readily ascertainable to its competitors relating to such matters as credit histories and credit ratings, customer preferences and the name of customer decision-makers; and that unauthorized use by you of the knowledge, information, data and trade secrets of the Company described above would seriously damage the Company and hinder its ability to do business worldwide. The character of any knowledge or information as a trade secret will be determined from time to time according to the facts then prevailing and applicable law. Nothing in this Paragraph 14 will cause any knowledge or information which is not in fact a trade secret to be treated as such. 15. Non-Competition. For the duration of the Restriction Period, you agree ---------------- that you will not manage, operate, join, control or participate in, directly or indirectly, consult on behalf of or for the benefit of, or derive any benefit whatsoever from (other than receipt of any amount from a "Competitor," after you have terminated all relationships with that Competitor, payable pursuant to any agreement entered into before the Competitor's commencement of activities proscribed by this Section 15 and in connection with acquisition by a third party of a controlling interest in the Competitor), or be an officer, director, employee, partner, agent, consultant or shareholder of, any business or activity, or any parent, subsidiary or affiliate of any business or activity (the "Competitor"), that designs, develops, manufactures, assembles, sells or resells personal computers or computer workstations anywhere in the world (the "PC/Workstation Industry"). You will not be in violation of this Paragraph 15 merely because you own publicly traded securities issued by a Competitor as long as you own less than 5% of any class of such securities then outstanding. You will not be in violation of this Paragraph 15 because you engage in any of the above described transactions or relationships with a Competitor if your relationship, transactions, and other involvement with that Competitor are limited to a line of business and activities other than the PC/Workstation Industry, and if the 7 Mr. Joel Kocher September 15, 1994 Page 7 annual revenue received by the Competitor and all of its parent, subsidiary, and affiliated entities (taken in the aggregate) from the PC/Workstation Industry is and continues to be less than both $50 million per year and 5% of the total aggregate annual revenue of the Competitor and all of its parent, subsidiary, and affiliated entities. The prohibition of this Paragraph 15 will cease to apply if and when there is a final judicial determination by a court of competent jurisdiction that the Company has committed a substantial breach or default in the performance of any of its material obligations under this Agreement. You will not be in violation of this Paragraph 15 merely because you have entered into an employment relationship with Artisoft, Inc. or its subsidiary or affiliated corporations, unless the nature of the business conducted by Artisoft, Inc. or its subsidiary or affiliated corporations changes materially after the Execution Date. 16. You agree that the non-competition provision set forth in Paragraph 15 is ancillary to this Agreement, that this Agreement is an otherwise enforceable agreement, and that the non-competition provision is therefore ancillary to an otherwise enforceable agreement. You further agree that the non-competition provision contains reasonable limitations as to the time, geographical area and scope of activity for which you are to be restrained; that the limitations of this Agreement and your covenant not to compete with the Company do not impose a greater restraint than is necessary to protect the goodwill or other business interests of the Company; and that the primary purpose of this Agreement does not obligate you to render personal services to the Company. 17. As separate consideration for the non-competition provision set forth in Paragraph 15, the Company hereby agrees to pay you, within seven (7) days after final execution of this letter agreement, the gross amount of Three Hundred Ninety Thousand and No/100 Dollars ($390,000.00) (subject to withholding of all taxes and other amounts required by applicable law) by check. As further separate consideration for the same non-competition provision, the Company and you hereby amend the stock option grant agreements relating to stock options previously granted to you, but currently unvested, so as to accelerate the vesting dates for the following currently unvested options which you hold to purchase shares of Dell's Common Stock at the indicated exercise prices per share: 6,930 shares at $17.33/share; 13,500 shares at $23.66/share; 9,600 shares at $30.69/share; 22,000 shares at $22.50/share; 17,408 shares at $26.00/share; and 68,250 shares at $9.77/share. The vesting dates for each of such options are hereby accelerated so as to cause 25% of each such option to vest on each of the following dates: January 1, 1995; April 1, 1995; July 1, 1995; and October 1, 1995. In addition, you and the Company hereby amend the stock option grant agreements related to such options to extend the deadline dates for exercise of all of such options to 5:00 p.m. local time in Austin, Texas on October 31, 1995. You understand and agree that you will have no right to exercise options or purchase Dell's Common Stock from the Company except as set forth in this letter Agreement, and you and the Company further agree that the stock option agreements between you and the Company which relate to the options described in Paragraph 2 and this Paragraph 17 are amended to the extent necessary (and only to the extent necessary) to accelerate the vesting dates for the options described in this Paragraph 17, and to permit you to exercise the options 8 Mr. Joel Kocher September 15, 1994 Page 8 described in Paragraph 17 more than thirty (30) days after your employment with the Company has terminated and as otherwise set forth in Paragraph 2 above. You also understand and agree that your right to exercise options and purchase Dell's Common Stock in accordance with this Agreement is further conditioned upon your compliance with the provisions of the stock option agreements (as amended hereby) in effect between you and the Company, and upon your full and complete compliance with the remaining provisions of this Paragraph 17. No earlier than the fifth day prior to, and no later than the fifth day after each Vesting Date listed above, you will execute and deliver to the Company a sworn affidavit (the "Compliance Affidavit"), in the form attached hereto as Exhibit A. In the Compliance Affidavit, you will attest under oath that as of the date of the affidavit and at all times prior thereto, you are and have been in full and complete compliance with the terms of this Agreement, including without limitation, the non-competition, non-solicitation, non-disclosure and non-use provisions hereof. You will not be entitled to receive the number of shares scheduled to vest on the then-scheduled Vesting Date, and such vesting shall not occur, unless and until you have executed and delivered a true and accurate Compliance Affidavit to the General Counsel of the Company in accordance with the terms set forth above. If any or all of the options specified in this Paragraph are not exercised on or before October 31, 1995, such unexercised options will automatically expire and become null and void on that date without further notice of any kind. In addition to your other holdings of the Company's stock, you presently own 9,000 shares of the Company's common stock which were issued to you upon your exercise of an option under the Special and Nonstatutory Stock Option Agreement under Dell Computer Corporation 1989 Stock Option Plan dated June 22, 1992 (the "1992 Option Agreement") and which are subject to restrictions on transfer (the "Two Year Restriction") for a period of two years in accordance with the paragraph of the 1992 Option Agreement entitled "Limitations on --------------- Ownership of Common Stock received on Exercise." You are also presently entitled - ------------------------------------------------ to acquire an additional 21,000 shares of the Company's common stock under the 1992 Option Agreement which will be subject to the Two Year Restriction. The Company hereby waives the Two Year Restriction as to the 9,000 shares and 21,000 shares described above insofar as the Two Year Restriction would extend beyond October 31, 1994, it being the intent of this waiver that those shares not be subject after October 31, 1994 to any restriction on transfer imposed by the 1992 Option Agreement. At your request at any time after October 31, 1994 the Company will take appropriate steps to remove from any certificate representing the 9,000 shares or the 21,000 shares, any legend reflecting the Two Year Restriction. You acknowledge and agree that the rights granted to you by the provisions of this Paragraph 17 were not otherwise available to you and constitute substantial independent consideration for your agreement not to compete set forth in Paragraph 15. 18. The Company agress that, upon your exercise of the options described in Paragraphs 2 and 17 of this Agreement, you shall have the right to sell any or all of the shares acquired 9 Mr. Joel Kocher September 15, 1994 Page 9 through such exercise immediately or at any time thereafter, subject to the provisions of applicable laws and regulations, and the provisions of the option agreements between you and the Company, as amended hereby. You agree that it shall be your sole responsibility to comply with all applicable laws related to the exercise of such options and sale of such shares, and the use and disposition of all proceeds therefrom, and to pay all applicable taxes, fees and other charges related thereto. You understand that it is your responsibility to keep the Company informed of your trading activities regarding these shares in accordance with the requirements stated in Paragraph 6 above and that you may owe the Company any profits resulting from your sale of such shares unless you have fully complied with all reporting and other requirements under the Federal Securities laws. 19. Non-Solicitation. You agree that you will not, during the Restriction ----------------- Period, alone or with others, directly or indirectly, solicit or recruit for your benefit, or for the benefit of any person or entity, the employment or other services of any person who is an employee of the Company or who within the six month period preceding such solicitation or recruitment has been an employee of the Company. You agree that you will not, during the Restriction Period, cause or facilitate (by providing information or otherwise) the solicitation or the recruitment of such employment or other services by or for the benefit of any person or organization with which you may be associated. 20. In addition to the other agreements contained herein, you agree that you will not use, publish, misappropriate or disclose in any manner, directly or indirectly, for yourself or for the benefit of any other person or entity, any Confidential and Proprietary Information. "Confidential and Proprietary Information" means, without limitation, any information that you have learned or originated during your employment with the Company, to the extent that such information is related to the products, marketing plans, sales plans, operating procedures, properties, or financial condition, prospects, or results of operations of the Company, which information is commercially valuable and is not publicly available to or readily ascertainable by third parties through proper means, and any information disclosed by third parties in confidence to the Company. Confidential and Proprietary Information specifically includes, without limitaiton, all such information of the kinds described in subparagraphs A through G below: A. Manufacturing and research processes currently in use, planned or under development, including design rules, device characteristics, process flow, manufacturing capabilities and yields. B. Computer product, process and device strategies planned or under development, including device specifications, system architectures, logic designs, circuit implementations and long-range plans. C. Software products in use, planned or under development, including operating system adaptations or enhancements, language compilers, interpreters and translators, system design and evaluation tools, and application and diagnostic programs. 10 Mr. Joel Kocher September 15, 1994 Page 10 D. Information relating to Company employees; actual and anticipated relationships between the Company and other companies or persons; sales levels, profit levels, pricing and other unpublished financial data; and budget, staffing compensation, equipment and related plans. E. Information relating to the Company's customer, supplier and vendor relationships. This includes performance requirements, development and delivery schedules, device and product pricing and quantities, and other information communicated to the Company by its customers, suppliers or vendors. F. Information relating to the compensation, skills, and work histories of the Company's employees. G. Any Intellectual Property defined below and any copyrightable works described below, except as publicly disclosed in patents and other publicly available documents. 21. You agree that all discoveries, ideas, improvements or inventions you have created, conceived, developed or discovered, alone or with others, during your employment with the Company which relate to the Company's business or which result from the use of the Company's equipment, supplies, facilities or information, and which are protectable under applicable patent or copyright laws (collectively, the "Intellectual Property"), in whatever form, is the Company's sole and exclusive property. You hereby assign to the Company all of your rights in any Intellectual Property. You agree that you will assist the Company at the Company's expense in all ways in the future, including giving evidence and executing any documents deemed helpful or necessary by the Company, to establish, perfect and register worldwide, at the Company's expense, the Company's title and exclusive ownership in the Intellectual Property. You agree that you will not do anything in conflict with the Company's rights in the Intellectual Property and that you will cooperate fully to protect the Intellectual Property against misappropriation or infringement. 22. You agree that the Company is the copyright owner in all coprightable works of every kind and description created or developed by you, solely or jointly with others, during the time of your employment with the Company. If so requested at any time, and for no additional consideration, you will execute in writing any acknowledgements or assignments of copyright ownership of such works as may be appropriate in the opinion of the Company for preservation of the worldwide ownership in the Company of such copyrights. 23. You agree that your obligations pursuant to Paragraphs 20 and 21 with respect to the Intellectual Property will survive the satisfaction or completion of any other term of this Agreement and will continue for the duration of the Restriction Period as to Paragraph 20 and in perpetuity as to Paragraph 21 except as otherwise specified herein. You and the Company acknowledge that you have entered into previous agreements with the Company from time to 11 Mr. Joel Kocher September 15, 1994 Page 11 time, including the "Special Nonstatutory Stock Option Agreement under Dell Computer Corporation 1989 Stock Option Plan" dated June 22, 1992, in respect of Confidential and Proprietary Information and Intellectual Property, covenants not to compete, non-solicitation and non-hire provisions, and provisions concerning non contravention of your employment agreement; and you and the Company agree that all such agreements are merged into and superseded by the provisions of this Agreement, the intent being that your only obligations with respect to Confidential and Proprietary Information and Intellectual Property, covenants not to compete, non-solicitation and non-hire provisions, and provisions concerning non contravention of your employment agreement, shall be as provided herein. 24. You acknowledge that your breach of any of the non-competition, non-solicitation, non-disclosure or non-use provisions set forth above will cause irreparable harm to the Company, for which there may be no adequate remedy at law and for which the ascertainment of damages would be difficult. You therefore agree that in the event of your breach of any such provision, in addition to and without having to prove the inadequacy of other remedies at law, the Company shall be entitled to receive specific performance by you of any such provision that you have breached, and the Company will furthermore be entitled to the issuance of a court order directing full and immediate injunctive relief against you without the Company being required to post any bond or other security. However, the provisions of this Paragraph should not be interpreted in any way as a limitation on the Company's right to obtain money damages against you in the event of a breach of any of the provisions set forth above. You agree that in the event the Company files legal proceedings against you for a breach or threatened breach of such provisions, the Company has the right to suspend immediately by written notice to you, all further vesting of any of the then-unvested stock options to purchase Dell's Common Stock held by you, and the further right to require you to exercise all then-vested stock options to purchase Dell's Common Stock held by you within thirty (30) days after written notice from the Company. In the event, however, that the Company does not prevail in such legal proceedings, vesting of all then-unvested shares shall occur immediately upon final judgement in your favor, and you shall have nine (9) months after such final judgement or, if later, until October 31, 1996, to exercise all such shares as well as any previously vested shares that were not exercised prior to the final judgment, after which all of such options shall terminate and expire without further action or notice of any kind. 25. You and the Company agree to maintain in confidence the terms of this Agreement and not to disclose the same publicly or to any third parties except as may be required in compliance with the requirements of applicable law or this Agreement, or pursuant to your decree of divorce entered September 9, 1994. You and the Company further agree to the joint issuance of a press release in the form of Exhibit B attached hereto, and that thereafter, except as provided in the next sentences, neither you nor any representative of the Company will make further comment, on or off the record, for attribution or otherwise with regard to the circumstances of your departure except as authorized in writing in advance by the party about whom the comment is made. In addition, you will make no comment, on or off the record, for attribution or otherwise, during the Restriction Period, about your employment with the 12 Mr. Joel Kocher September 15, 1994 Page 12 Company, or about the Company or any aspect of its business or operations, without the express prior written agreement of the Company, except as you may be required to do so under oath in response to a subpoena. You also agree that in the event you breach this covenant of confidentiality and the Company is damaged as a result of such breach, you shall be personally liable for all damages arising from such breach, including reasonable attorneys' fees and costs incurred by the Company in pursuing such claim against you. Neither the Company nor any person acting on behalf of the Company shall make any disparaging remark to any person concerning your employment, your performance or conduct as an employee of the Company, or the termination of your employment with the Company. 26. You agree that all time periods which commence with the termination of your employment with the Company begin to run as of the Termination Effective Date. 27. This Agreement shall be governed in all respects by the internal laws of the State of Texas, excluding its rules regarding conflicts of laws, and all venue hereunder shall be solely in Travis County, Texas. 28. In the event of litigation or other proceeding (through and including, without limitation, any appeals process) to enforce the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees and costs of such litigation or other proceeding from the non-prevailing party. 29. You agree that you have had sufficient opportunity to thoroughly discuss the implications of this Agreement with independent legal counsel of your choice and that you have retained legal counsel of your choice to review this Agreement and to advise you regarding same prior to your signing and delivering this agreement to the Company. In signing the Agreement, you agree that you have not relied on or been induced to execute this Agreement by any statement, representations or agreements made by any person other than what is expressly set forth in this Agreement. 30. This Agreement constitutes the entire agreement of the parties and, except as otherwise provided herein, supersedes any and all prior and/or contemporaneous oral or written agreements with the Company concerning the subject matter hereof. This Agreement may not be modified except by a written instrument executed by you and by an authorized officer of the Company. 31. Any waiver of any term or condition of this Agreement shall be effective only if set forth in a written document signed by an authorized officer of the Company. A waiver of any breach or any failure to enforce any of the terms or conditions of this Agreement shall not in any way affect, limit or waive a party's rights under this Agreement at any time to enforce strict compliance thereafter with each and every term or condition of this Agreement. Any decision by the Company to enforce its rights or withhold the performance of its obligations under this Agreement will be made by a majority of the Board of Directors of Dell Computer Corporation. 13 Mr. Joel Kocher September 15, 1994 Page 13 32. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law effective during the term hereof, such provision shall be fully severable. In such event, this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof and the remaining portions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a new provision or a reformed provision as similar in terms and effect to such illegal, invalid or unenforceable provision as may be legal and enforceable. 33. Any notice required or permitted under this Agreement shall be given by certified mail, receipted overnight courier service, or completed telecopy transmission to the party entitled thereto, addressed as follows: If to you: Joel J. Kocher ________________________________ ________________________________ ________________________________ With copy to: Clark, Thomas & Winters, a Professional Corporation 700 Lavaca Street, 12th Floor Austin, Texas 78701 Attn: C. Joseph Cain Telecopy: (512) 474-1129 If to the Company: Dell Computer Corporation 2214 W. Braker Lane Austin, Texas 78758 Attn: General Counsel Telecopy: (512) 728-3773 Either party may change its notice address by written notice to the other party. Notice shall be deemed to have been received on the earlier of actual receipt or the fourth day after dispatch. 14 Mr. Joel Kocher September 15, 1994 Page 14 34. For purposes of this Agreement, the term "Company" shall be deemed to include any organization, partnership, corporation, trust or entity controlled by or under common control with the Company. For this purpose, the concept of "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of another, whether through the ownership of voting securities, by contract, or otherwise. 35. This Agreement is binding upon and shall inure to the benefit of the parties and their respective heirs, representatives, successors and assigns. 15 Mr. Joel Kocher September 15, 1994 Page 15 If this letter accurately sets forth your agreement with respect to the matters set forth herein, please so signify by signing this letter where indicated below and then delivering to the Company your executed original of this Agreement. DELL COMPUTER CORPORATION By: /s/ Thomas B. Green ___________________________ General Counsel & Secretary Dated: 10/4/94 ________________________ 16 Mr. Joel Kocher September 15, 1994 Page 16 I have carefully read the foregoing Agreement. On behalf of myself, my executor, heirs, successors and assigns, I agree to, and agree to be bound by, each and all of the terms of the Agreement. I acknowledge recepit of a copy of the Agreement, and I agree to the sufficiency of the consideration and payments recited in the Agreement. /s/ JOEL J. KOCHER ___________________ Joel J. Kocher Dated: Oct. 4, 1994 ____________ 17 EXHIBIT A _________ COMPLIANCE AFFIDAVIT ____________________ STATE OF _______________ COUNTY OF ______________ I, JOEL J. KOCHER, residing at __________________________________________ ______________________, being duly sworn, declare under oath that the following statements are true and correct: 1. I am providing this Compliance Affidavit to and for the benefit of Dell Computer Corporation and its subsidiaries and affiliates (collectively, the "Company") pursuant to that certain letter agreement (the "Agreement") between the Company and me dated __________________, 199_, regarding matters relating to my employment with the Company and termination thereof. 2. I hereby certify, declare and attest under oath that as of the date of this Compliance Affidavit and at all times prior to the date hereof, I am and have been in full and complete compliance with the terms of the Agreement, including without limitation, the non-competition, non-solicitation, non-disclosure and non-use provisions contained in the Agreement, and I acknowledge and reaffirm all of my obligations as set forth in the Agreement. ______________________________ JOEL J. KOCHER, Affiant SUBSCRIBED AND SWORN TO before me on the ____ day of ____________, 199___. (SEAL) __________________________________ Notary Public--State of My Commission Expires: __________________________________ _____________________ Printed Name of Notary Public EX-23.1 3 CONSENT OF PRICE WATERHOUSE 1 Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Prospectus constituting part of this Registration Statement on Form S-3 of our report dated March 2, 1994 appearing on page 24 of Dell Computer Corporation's Annual Report on Form 10-K for the Fiscal Year Ended January 30, 1994. We also consent to the reference to us under the heading "Experts" in such Prospectus. /s/Price Waterhouse LLP PRICE WATERHOUSE LLP Austin, Texas February 17, 1995 EX-99.1 4 REGISTRATION AGREEMENT 1 DELL COMPUTER CORPORATION REGISTRATION AGREEMENT FOR SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF SERIES A CONVERTIBLE PREFERRED STOCK PURSUANT TO ITS OFFER OF PREMIUM DATED FEBRUARY 21, 1995 THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, MARCH 22, 1995, UNLESS EXTENDED BY THE COMPANY. PLEASE SIGN AND COMPLETE BELOW TO HAVE SHARES REGISTERED IN THE RESALE REGISTRATION EXACT NAME OF HOLDER:___________________________________________________________ STREET ADDRESS OF HOLDER:_______________________________________________________ PHONE NUMBER:______________________________ TELECOPY NUMBER: ___________________ NUMBER OF SHARES OF COMMON STOCK BENEFICIALLY OWNED AS OF FEBRUARY 21, 1995 (EXCLUDING SHARES ISSUABLE UPON CONVERSION OF SERIES A PREFERRED STOCK): NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF SERIES A PREFERRED STOCK TO BE REGISTERED UNDER THIS AGREEMENT [IF NO INDICATION IS MADE, ALL SUCH SHARES OF COMMON STOCK ISSUED UPON CONVERSION OF SERIES A PREFERRED STOCK WILL BE REGISTERED]:_________________________________________________________________ SIGNATURE OF HOLDER:____________________________________________________________ [IF AN ENTITY] By:______________________________________________________________ Name (please print):_____________________________________________ Title (please print):____________________________________________ NUMBER OF PROSPECTUSES NEEDED (LIMIT OF 20):____________________________________ 2 The Conversion Agent: CITIBANK, N.A. By Mail: By Overnight Courier: By Hand: Citibank, N.A. Citibank, N.A. Citibank, N.A. c/o Citicorp Data Distribution, c/o Citicorp Data Distribution, Corporate Trust Window Inc. Inc. 111 Wall Street, 5th Floor P.O. Box 7072 404 Sette Drive New York, New York Paramus, New Jersey 07653 Paramus, New Jersey 07652 Confirm by Telephone: (800) 422-2066
Delivery of this Registration Agreement to an address other than as set forth above will not constitute a valid delivery. In order for shares of Common Stock issuable upon conversion to be registered for resale, the beneficial owner of the shares of Series A Preferred Stock being tendered for conversion must complete, sign and deliver this Registration Agreement to the Conversion Agent before 12:00 midnight, New York City time, on Wednesday, March 22, 1995, unless extended by the Company. EVEN IF YOU ARE TENDERING SERIES A PREFERRED STOCK THROUGH A BROKER OR OTHER CUSTODIAN WHO HOLDS STOCK FOR YOUR ACCOUNT, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION WILL NOT BE REGISTERED FOR RESALE UNDER THE SECURITIES ACT OF 1933 UNLESS YOU TIMELY SIGN AND DELIVER THIS REGISTRATION AGREEMENT TO THE CONVERSION AGENT. REGISTRATION AGREEMENT This REGISTRATION AGREEMENT (the "Agreement") is made and entered into by and among Dell Computer Corporation, a Delaware corporation (the "Company"), and the undersigned holders (the "Holders") of the Series A Convertible Preferred Stock of the Company (the "Series A Preferred Stock"), effective as of the closing of the Conversion Offer (hereinafter defined). RECITALS A. The Company has offered to register under the Securities Act and applicable U.S. state securities laws, the resale from time to time of the shares of Common Stock to be issued upon conversion of the Series A Preferred Stock by the holders thereof pursuant to that certain Offer of Premium Upon Conversion dated February 21, 1995, the related Special Conversion Notice, and this Registration Agreement (which together constitute the "Conversion Offer"). B. To facilitate the transactions contemplated by the Conversion Offer and to provide certain information required by the Company to be included in the Registration Statement (hereinafter defined), the Company and the Holders desire to enter into this Agreement. AGREEMENTS NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Company and the Holders hereby agree as follows: 1. Certain Definitions. For purposes of this Agreement, the following terms shall have the following respective meanings: (a) "Commission" means the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. (b) "Common Stock" means the Company's common stock, par value $.01 per share. 2 3 (c) "Conversion Offer" means the Company's offer to the holders of the Series A Preferred Stock to convert such shares into the Company's Common Stock pursuant to that certain Offer of Premium Upon Conversion dated February 21, 1995, the related Special Conversion Notice, and this Agreement. (d) "Effective Date" means the date on which the Commission declares the Registration Statement effective or on which the Registration Statement otherwise becomes effective. (e) "Exchange Act" means the Securities Exchange Act of 1934, or any successor thereto, as the same shall be amended from time to time. (f) "Expiration Date" means the date upon which the Conversion Offer expires. (g) "Prospectus" means the final prospectus contained in the Registration Statement or filed pursuant to Rule 424(b) under the Securities Act, as it may be amended or supplemented by the Company from time to time. (h) "Registrable Securities" means the shares of Common Stock to be issued to Holders upon conversion of the Series A Preferred Stock pursuant to the Conversion Offer and identified on the signature page for each of such Holders and to be registered by the Company in accordance with this Agreement. (i) "Registration Expenses" has the meaning assigned thereto in Section 4 hereof. (j) "Registration Statement" means the Company's registration statement on Form S-3 or such other successor form, in the form it is declared effective by the Commission, registering for resale the Registrable Securities. (k) "Securities Act" means the Securities Act of 1933, or any successor thereto, as the same shall be amended from time to time. 2. Registration under the Securities Act. The Company agrees to use its reasonable commercial efforts to register the resale by the Holders from time to time during the Resale Window (hereinafter defined) of the Registrable Securities under the Securities Act and any applicable U.S. state securities or "blue sky" laws and to have the Registration Statement declared effective by the Commission as soon as reasonably practicable after the Expiration Date; provided, however, that the Company may, in its sole discretion, delay the effectiveness of such Registration Statement until a later date as the Company determines may be required or advisable. The Company further agrees to use its reasonable commercial efforts to keep the Registration Statement covering the Registrable Securities effective for a period of 30 calendar days after the Effective Date (the "Resale Window"). In counting the days in the Resale Window, the day the Registration Statement is declared effective shall count as the first day if it is declared effective at or before 10:00 a.m., New York City time. The Company will promptly notify the Holders of the Registrable Securities of the Effective Date at the address and telecopy number provided by such Holders on the signature page above. 3. Covenants of the Holders. As a condition of the Company's obligation to register the Registrable Securities and any and all other obligations of the Company under this Agreement, each Holder hereby represents, warrants and agrees: (a) to furnish to the Company the information requested next to such Holder's signature below, which shall include such Holder's name exactly as it appears upon the stock transfer records of the Company, its current street address, phone number, telecopy number, relationship to the Company, if any, the exact number of shares of Series A Preferred Stock beneficially owned by such Holder, and the exact number of shares of Common Stock beneficially owned by such Holder and such other information reasonably available to such Holder as the Company may reasonably request; 3 4 (b) that such Holder shall not take, directly or indirectly, any action that is designed to or which has constituted or that might reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Common Stock; (c) that such Holder will comply with Rule 10b-6 under the Exchange Act, which requires a seller of Registrable Securities and all affiliates of the that seller (as "affiliate" is defined in such rule) to suspend all bids for or purchases of shares of Common Stock at least two business days before and during any offers and sales of Registrable Shares by that seller and until that seller's offers and sales terminate; (d) that such Holder will comply with Rule 10b-7 under the Exchange Act, which prohibits any person from stabilizing the prices of a security to facilitate and offering of that security; (e) that such Holder shall not offer, sell, contract to sell, establish any short position in, or otherwise offer or dispose of any other Registrable Securities prior to the Effective Date; and (f) that such Holder will not offer, sell, pledge or otherwise dispose of the Series A Preferred Stock and the Common Stock issuable upon conversion thereof prior to the Effective Date; (g) that such Holder will offer and sell the Registrable Securities only in the manner described in the Registration Statement; (h) that such Holder will deliver or cause to be delivered a Prospectus to the buyer at or before any sale of Registrable Securities; (i) that, if such Holder sells Registrable Securities on the Nasdaq National Market in an ordinary brokerage transaction, such holder will deliver to its broker (i) a copy of the letter attached as Exhibit A completed and executed by such Holder (the "Seller's Letter"), and (ii) a copy of the letter attached as Exhibit B (the "Broker's Letter"), and shall cause its broker to execute the Broker's Letter and promptly to deliver both the Seller's Letter and the Broker's Letter to the transfer agent for the Common Stock and to the Company, attention: General Counsel, and that the Company may refuse to authorize transfer of such Registrable Securities if such letters are not delivered to the Company in form and substance satisfactory to the Company; (j) that, if such Holder sells Registrable Securities directly to another person other than in an ordinary brokerage transaction on the Nasdaq National Market, such holder will deliver to the transfer agent for the Common Stock and to the Company, attention: General Counsel, a copy of the Seller's Letter completed and executed by such Holder, and that the Company may refuse to authorize transfer of such Registrable Securities if such letter is not delivered to the Company in form and substance satisfactory to the Company; (k) that such Holder will immediately suspend all offers and sales of Registrable Securities pursuant to the Registration Statement upon termination of the Resale Window or, if earlier, upon notification from the Company that the Prospectus may no longer be used for offers or sales; and (l) that such Holder is the beneficial owner of the shares of Series A Preferred Stock and Common Stock set forth on the signature page of such Holder hereto. 4. Registration Expenses. The Company agrees to bear and to pay or cause to be paid promptly upon request being made therefor all expenses incident to the Company's performance of or compliance with this Agreement, including, without limitation, (a) all Commission registration and filing fees and expenses, (b) all fees and expenses in connection with the qualification of the Common Stock for offering and sale under any U.S. state securities and "blue sky" laws, (c) all expenses relating to the preparation, printing, distribution and reproduction of each registration 4 5 statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the certificates representing the Common Stock and all other documents relating hereto, (d) messenger and delivery expenses, (e) internal expenses (including, without limitation, all salaries and expenses of the Company's officers and employees performing legal or accounting duties), (f) fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or "cold comfort" letters required by or incident to such performance and compliance), and (g) fees, expenses and disbursements of any other persons, including special experts, retained by the Company in connection with such registration (collectively, the "Registration Expenses"). Notwithstanding the foregoing, the Holders shall pay all agency fees and commissions, underwriting discounts and commissions, and transfer and other taxes attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such Holders (severally or jointly). 5. Indemnification. (a) Indemnification by the Company. On and after the effectiveness of the registration of the resale of the Registrable Securities pursuant to Section 2 hereof, and in consideration of the agreements of the Holders contained herein, the Company agrees to indemnify and hold harmless each of the Holders in any offering or sale of the Registrable Securities against any losses, claims, damages or liabilities, joint or several, to which such Holder may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement under which such Registrable Securities were registered under the Securities Act, or any final prospectus contained therein or furnished by the Company to any such holder, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company agrees to reimburse such Holder for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement or final prospectus, or amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein; provided, further, that the Company shall not be liable to any person to the extent such loss, claim, damage, or liability results from the fact that there was not delivered by such person a final prospectus the delivery of which would have avoided such loss, claim, damage or liability. (b) Indemnification by the Holders. Each of the Holders, severally, hereby agrees (i) to indemnify and hold harmless the Company, and all other Holders, against any losses, claims, damages or liabilities to which the Company or such other Holders of may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any final prospectus contained therein or furnished by the Company to any such Holder, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use therein, and (ii) reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim; provided, however, that no such Holder shall be required to undertake liability to any person under this Section 5(b) for any amounts in excess of the dollar 5 6 amount of the proceeds to be received by such Holder from the sale of such Holder's Registrable Securities pursuant to such registration. (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 5, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party other than under the indemnification provisions of or contemplated by Section 5(a) or 5(b) hereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. (d) Contribution. Each party hereto agrees that, if for any reason the indemnification provisions contemplated by Section 5(a) or Section 5(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 5(d) were determined by pro rata allocation (even if the holders or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 5(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such Holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders' obligations in this Section 5(d) to contribute shall be several in proportion to the principal amount of Registrable Securities registered by them and not joint. (e) The obligations of the Company under this Section 5 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each Holder and each person, if any, who controls any Holder 6 7 within the meaning of the Securities Act; and the obligations of the Holders contemplated by this Section 5 shall be in addition to any liability which the respective Holder may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in any registration statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Securities Act. 6. Miscellaneous. (a) Specific Performance. The parties hereto acknowledge that there may be no adequate remedy at law if any party fails to perform any of its obligations hereunder and that each party may be irreparably harmed by any such failure, and accordingly agree that each party, in addition to any other remedy in which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of any other party under this Agreement in accordance with the terms and conditions hereunder, in any court of the United States or any State thereof having jurisdiction. (b) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested), or upon electronic confirmation of receipt if delivered by telecopy, as follows: If to the Company, to it at Dell Computer Corporation, 2112 Kramer Lane, Building 1, Austin, Texas 78758-4012, Attention: General Counsel, Telecopy number: (512) 728-3773, and if to a Holder, to it at the address and telecopy number provided by such Holder herein, or to such other address as any party may have furnished to the others in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (c) Successors and Assigns. All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and assigns of the parties hereto. (d) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any Holder, any director, officer or partner of such Holder, or any controlling person of such Holder, and shall survive the effectiveness of the Registration Statement. (e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. (f) Headings. The descriptive headings of the several Sections and paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. (g) Entire Agreement. This Agreement and the other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter, and supersede all prior agreements and understandings between the parties with respect to its subject matter. (h) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute one and the same agreement. 7 8 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective the closing of the Conversion Offer. DELL COMPUTER CORPORATION By: Thomas J. Meredith Chief Financial Officer THE SIGNATURE OF THE HOLDER ON THE COVER OF THIS REGISTRATION AGREEMENT SHALL BE A COUNTERPART SIGNATURE TO THIS REGISTRATION AGREEMENT 8 9 EXHIBIT A SELLER'S LETTER __________________, 1995 General Counsel Dell Computer Corporation 2112 Kramer Lane, Building 1 Austin, Texas 78758-4012 Telephone: (512) 338-4400 Telecopy: (512) 728-3773 American Stock Transfer & Trust Company 40 Wall Street New York, New York 10005 Telephone: (718) 921-8200 (212) 936-5100 Telecopy: (718) 236-4588 Re: Dell Computer Corporation Common Stock Issued Upon Conversion of Series A Convertible Preferred Stock Ladies and Gentlemen: The undersigned has sold_______________________[insert number] shares ("Shares") of Common Stock of Dell Computer Corporation (the "Company") to ________________________________________[insert name] (the "Purchaser"). Terms having their initial letter capitalized but not defined in this letter have the meanings ascribed them in the Registration Agreement between the undersigned and the Company. In order to induce you to transfer the Shares and to issue, register and countersign new certificates representing the Shares without a legend restricting the transfer thereof, the undersigned acknowledges and represents to the Company and American Stock Transfer & Trust Company as follows: 1. The undersigned delivered, or caused to be delivered, to the Purchaser a copy of the Prospectus of the Company relating to the Shares at or before the written confirmation of the sale of the Shares to the Purchaser. 2. No written materials other than the Prospectus and confirmation were used in connection with the sale. 3. The sale was made in compliance with all applicable state securities or blue-sky laws. 4. The undersigned also acknowledges and represents that the undersigned has complied with all its covenants in the Registration Agreement, including without limitation the covenants regarding compliance with Rule 10b-6 and Rule 10b-7 under the Exchange Act and the prohibits against offering or selling the Shares before the Effective Date of the Registration Statement. I represent that I am not, and at no time have been, an affiliate of the Company. INDIVIDUAL: ________________________________________ (Signature of Selling Security Holder) ________________________________________ (Printed Name of Selling Security Holder) ________________________________________ PARTNERSHIP, CORPORATION OR TRUST: Print Name of Entity: By:_____________________________________ (Signature of Authorized Officer or Representative) ________________________________________ (Print Name of Authorized Officer or Representative) ________________________________________ (Title) 9 10 EXHIBIT B BROKER'S LETTER ______________, 1995 General Counsel Dell Computer Corporation 2112 Kramer Lane, Building 1 Austin, Texas 78758-4012 Telephone: (512) 338-4400 Telecopy: (512) 728-3773 American Stock Transfer & Trust Company 40 Wall Street New York, New York 10005 Telephone: (718) 921-8200 (212) 936-5100 Telecopy: (718) 236-4588 Re: Dell Computer Corporation Common Stock Issued Upon Conversion of Series A Convertible Preferred Stock Ladies and Gentlemen: We have read the letter of ________________________________ [print name of seller] dated ______________________, 1995, concerning the proposed sale of shares (the "Shares") of Common Stock of Dell Computer Corporation (the "Company") through us and advise you that, in connection with the sale of the Shares: 1. We have sold or will sell the Shares in a brokerage transaction as agent for the named seller. 2. The undersigned delivered, or caused to be delivered, to the purchaser of the Shares a copy of the Prospectus of the Company relating to the Shares at or before the written confirmation of the sale of the Shares to the Purchaser through the undersigned firm. 3. No written materials other than the Prospectus and confirmation were used in connection with the sale. 4. The selling of the Shares by the undersigned as agent for the named seller does not constitute participation by the undersigned in a distribution within the meaning of the Securities and Exchange Commission's Rule 10b-6(c)(5). We understand that this determination may depend on the magnitude of the number of shares we are asked to sell, or foreseeably will be asked to sell, and the presence of any special selling efforts or selling methods. If our participation constitutes participation in a distribution within the meaning of Rule 10b-6(c)(5), we represent and acknowledge to you that we have complied with Rule 10b-6.* Sincerely, ______________________________________ (Print Name of Firm) ______________________________________ (Signature of Authorized Representative) ______________________________________ (Print Name and Capacity of Signer) ______________________________________ (Telephone Number) - --------------- *Note: In the view of the Securities and Exchange Commission, additional compensation offered to registered representatives or a favorable research report or any recommendation by the broker are indicia of special selling efforts and may indicate the transaction constitutes a distribution for purposes of Rule 10b-6. When a broker-dealer agrees with one or more shareholders to act as their exclusive agent in connection with sales off a shelf registration statement, the broker-dealer will be subject to Rule 10b-6, and the broker-dealer will be prohibited from engaging in market making or other activities proscribed by Rule 10b-6. 10 -----END PRIVACY-ENHANCED MESSAGE-----