Back to GetFilings.com
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended May 28, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the transition period
from to .
Commission File Number: 1-6453
NATIONAL SEMICONDUCTOR CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-2095071
-------- ----------
(State of incorporation) (I.R.S. Employer Identification Number)
2900 SEMICONDUCTOR DRIVE, P.O. BOX 58090
SANTA CLARA, CALIFORNIA 95052-8090
----------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 721-5000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
- ------------------- ------------------------
Depositary shares, each representing New York Stock Exchange
1/10th share of $32.50 Convertible
Preferred Shares, par value $0.50 per share
Common stock, par value New York Stock Exchange
$0.50 per share Pacific Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
$32.50 Convertible Preferred Shares ($0.50 par value) with a liquidation
preference of $500 per share.
(Title of class)
--Continued on next page--
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d)of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. Yes X . No .
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10K or any amendment to this Form 10-K. []
The aggregate market value of voting stock held by non affiliates of the
registrant as of July 14, 1995, was approximately $2,344,064,326.
Shares of Common Stock held by each officer and director and by each
person who owns 5% or more of the outstanding Common Stock have been
excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive
determination for other purposes.
The number of shares of the registrant's common stock, $0.50 par value,
as of July 14, 1995, was 123,661,548.
DOCUMENTS INCORPORATED BY REFERENCE
Document Location in Form 10-K
-------- ---------------------
1995 Annual Report to Shareholders (pp. 23-48, 50-51) Parts I, II and IV
Portions of the Proxy Statement for the Part III
Annual Meeting of Stockholders to be
held on or about September 29, 1995.
Portions of the Company's Registration Part IV
Statement on Form S-3, Registration
No. 33-48935, which became effective
October 5, 1992.
Portions of the Company's Registration Part IV
Statement on Form S-3, Registration
No. 33-52775, which became effective
March 22, 1994.
Portions of the Company's Registration Part IV
Statement on Form S-8, Registration
No. 33-54931, which became effective
August 5, 1994.
Portions of the Company's Registration Part IV
Statement on Form S-8, Registration
No. 33-55699, which became effective
September 30, 1994.
Portions of the Proxy Statement for the Part IV
Annual Meeting of Stockholders held
September 30, 1994
The Index to Exhibits is located on pages 24-26.
PART I
ITEM 1. BUSINESS
General
National Semiconductor Corporation, including its subsidiaries,
("National" or the "Company") designs, develops, manufactures and
markets a broad line of analog intensive, mixed signal and other
integrated circuits for applications in the communications, personal
systems and industrial market place. National was incorporated under
the laws of the state of Delaware in 1959.
During fiscal years 1995 and 1994, the Company substantially
completed its manufacturing consolidation and reduction in cost
structure in accordance with the restructuring plan announced in fiscal
1992. In the past two years, these actions included the closure of a
wafer fabrication module in its Salt Lake City, Utah facility, closure
of a wafer fabrication line in Santa Clara, California, consolidation of
its Dynacraft, Inc. ("DCI") business which resulted in the elimination
of a manufacturing facility in Milpitas, California and other reductions
in personnel and related infrastructure at its Santa Clara facility.
The Company has initiated significant recapitalization of
facilities, machinery and equipment over the past three years. Capital
investments over the past three years, inclusive of fiscal year 1995,
total $984.6 million. These investments, in conjunction with sizable
research and development investments, are required for the introduction
of leading edge products into the Company's chosen markets.
During fiscal 1995, the Company acquired Comlinear, Inc., a
producer of analog products based in Fort Collins, Colorado. While the
results of the acquisition are immaterial to the Company's overall
financial position and results of operations, the acquisition adds to
the Company's analog products portfolio and brings new design core
competencies into the Company.
Also during fiscal 1995, the Company entered into a joint venture
with a partner in Shanghai, Peoples' Republic of China ("PRC"). The
joint venture, which is majority owned by National, will produce
integrated circuit boards using various National products for
consumption by telecommunications and other enterprises within the PRC.
The joint venture is not material to the Company's overall financial
position and results of operations.
The Company operates in one industry segment. The information
with respect to sales and identifiable assets for National's geographic
segments appearing on page 44-45 of the Company's 1995 Annual Report to
Shareholders under the caption "Industry and Geographic Segment
Information" is incorporated herein by reference.
Products
Semiconductors are integrated circuits (in which a number of transistors
and other elements are combined to form a more complicated circuit) or
discrete devices (such as individual transistors). In an integrated
circuit, various elements are fabricated in a small area or "chip" of
silicon, which is then encapsulated in plastic, ceramic or other
advanced forms of packaging and connected to a circuit board or
substrate.
National manufactures a broad variety of analog intensive, mixed
signal and digital products. National's products are used in numerous
commercial applications, including personal systems, telecommunications
and communications products, data processing, automotive, local and wide
area networking and other industrial applications as well as some
consumer applications.
The Company is a leading supplier of analog and mixed signal
products, serving both broad based markets such as the industrial and
consumer market, and more narrowly defined markets such as Ethernet
Local Area Networks ("LAN") and automotive. While no precise industry
standard for analog and mixed signal exists, the Company considers
products which process analog information, converts analog to digital or
converts digital to analog as analog and mixed signal. Analog and mixed
signal products include amplifiers and regulators, power monitors and
line drivers, products optimized for audio, video, automotive or display
applications, data acquisition and mass storage products. Other Company
products with significant digital to analog or analog to digital
capacity include Local Area Network, wireless networking and wireless
communications, and personal systems and personal communications
products such as its office automation and Super I/O offerings. Analog
and mixed signal business units accounted for 56% of Company revenue in
1995 and their revenues have been increasing over the past few years as a
percentage of total Company revenue.
The Company also sells bipolar and complimentary metal oxide
silicon ("CMOS") logic and memory products. These products are largely
older, more mature offerings serving broad markets in data processing,
switching equipment and personal computing. The Company's bipolar and
CMOS products include many of the mature logic families such as Advanced
Schottky ("AS") and Advanced Low Power Schottky ("ALS"), High
Performance CMOS ("HCMOS") as well as lower density Electronically
Erasable Programmable Read Only Memory ("EEPROM") and Erasable Read Only
Memory ("EPROM") products. The Company is limiting its investment in
mature products to opportunities which complement its analog and mixed
signal product focus. Bipolar and CMOS products accounted for 22% of
1995 revenues, down from the previous year and declining as a percentage
of total Company revenue over the past several years.
The Company's other product offerings include discretes, its 100%
owned DCI plating and stamping operation, and various other products such
as low density microcontrollers and customized integrated circuits.
These products accounted for 22% of sales in 1995 and revenues have been
essentially flat as a percentage of total revenue for several years.
Corporate Structure and Organization. For the last three fiscal
years, the Company's operating divisions were divided into two groups:
the Standards Products Group ("SPG") and the Communications and
Computing Group ("CCG"). SPG served primarily horizontal markets and
CCG served primarily vertical markets. At the start of fiscal 1996, the
Company was further decentralized by eliminating the group structure,
leaving seven main operating divisions, described as follows:
Analog and Mixed Signal Divisions. National continues to be a
leader in analog products and technology, which has been one of the
Company's core competencies since its inception. Analog devices control
continuously variable functions (such as light, color, sound, and power)
and are used in automotive, telecommunications, audio/video and many
industrial applications. The Company's analog products include high
performance operational amplifiers, power management circuits, data
acquisition circuits and voltage regulators. National provides a
variety of analog products including standard products, application
specific products and full custom products, as well as advanced mixed
analog digital solutions. The Company's mixed signal products include
circuits for video monitors and consumer audio products, real time
clocks, automotive, custom linear ASIC ("CLASIC"), and peripheral
drivers. The Company's discrete products are comprised primarily of
transistors and diodes which are used as control and actuating devices
in a broad range of electronic systems.
Data Management Division. This Division's products incorporate
bipolar, CMOS and BiCMOS technologies for high-performance applications
such as switching and data manipulation. These applications are used in
a variety of communications applications and computationally intensive
applications such as workstations and computers, where the Company's
FACT, FAST, BCT and 100K ECL product families are industry standards.
Embedded Technologies Division. The Company's Embedded Technology
Division consists of 4-, 8-, 16-, and 32-bit microcontrollers and memory
products in the form of electronically programmable read only memories
("EPROM") and electronically erasable read only memories ("EEPROM").
The division addresses markets which combine basic computational or
logic algorithms with specific memory storage on chips. National's
higher end, more complex microcontrollers have been optimized for laser
printers, high speed facsimile machines, scanners, and other imaging
applications. Memory configurations of varying densities are also sold
into markets for temporary or permanent data storage such as personal
computers and workstations.
Local Area Networks Division. The worldwide market for Ethernet
LAN products has experienced significant growth in the last several
years. LANs enable individual computer users within close proximity to
share data as a work group. National is one of the world's leading
suppliers of LAN Ethernet controller chip sets, which are currently the
dominant protocol for LANs. National's LAN family includes a number of
sophisticated control functions for networking over standard twisted-
pair telephone wiring such as the Systems Oriented Network Interface
Controller ("SONIC-T"), the AT/LANTIC single chip network controller for
personal computers, and the Repeater Interface Controller ("RIC") for
use with hubs. Through an alliance with Novell, Inc., the Company also
markets its own line of Ethernet adapter cards under its Info Mover
trademark. The LAN Division is also developing products in wireless
networking which operate independent of twisted-pair or coaxial cabling.
Wide Area Networks Division. The Wide Area Networks ("WAN")
Division offers products which allow customers to transmit large amounts
of data at high speed from one location to another anywhere in the
world. The WAN Division also includes wireless communication products
and high performance Application Specific Integrated Circuit ("ASIC")
products. The Company currently supplies numerous solutions that enable
existing telecommunications equipment as well as next generation
SONET/ATM transmission equipment.
Personal Systems Division. The Personal Systems Division develops
products for the personal computer and workstation market. The Company
does not attempt to compete with the host microprocessor, but instead
designs and develops peripheral products which work in tandem with the
host microprocessor in either the personal computer or workstation. For
example, National offers a family of input/output devices which
consolidate many dependent functions on the motherboard. The Division
also markets mass storage products found in high performance disk drives
such as read write amplifiers, pulse detectors, data synchronizers,
encoder/decoder circuits and a family of motor speed and head
positioning control devices.
In addition to the seven product line divisions, National's wholly
owned subsidiary, DCI, produces semiconductor packaging materials such
as low and high pincount leadframes, advanced packaging materials and
tools for both internal consumption and for sale to other semiconductor
manufacturers throughout the world.
Aside from the operating divisions, the Company's corporate
structure also includes the International Business Group ("IBG") and the
Corporate Technology Group ("CTG"), both providing corporate functions
in support of the Company's global customers and technology strategies.
The IBG is organized around the four major regions of the world in which
the Company operates: the Americas, Europe, Japan and Asia and is
comprised of the Company's worldwide sales and marketing organization.
CTG is the central research arm of the Company, providing pure research,
process development and initial product prototyping necessary for many
of the Company's core production processes and leading edge products.
The CTG also leads in the selection and implementation of integrated
Computer Aided Design ("CAD") tools which design, layout, simulate and
test the logical and physical representation of new products before they
are actually produced.
Marketing and Sales
The Company markets its products throughout the world to original
equipment manufacturers ("OEMs") and distributors. Major OEMs include
IBM, Hewlett Packard, Compaq, Ford, and General Motors as well as NEC,
Fujitsu, Goldstar, Siemens, L.M. Ericsson and others. In addition to
its direct sales force, National uses distributors in all four of its
business regions and has recently initiated a manufacturers
representation ("rep") program in the United States.
The Company has established cross regional marketing groups
responsible for customers operating in multiple regions. In addition,
the Company's focus on analog intensive and mixed signal markets has led
to the introduction of strategic market segment teams who identify
emerging trends and opportunities in these two broad categories, as well
as others.
Customer support is handled by comprehensive, state of the art
central facilities in the United States and Europe. These Customer
Support Centers ("CSC") provide rapid turnaround on product pricing and
availability, technical support for customers questions, order entry and
scheduling. A third CSC is planned for Singapore in early fiscal 1996
to support the Asia region.
National augments its sales effort with application engineers
based in the field. These engineers are specialists in National's
complex product portfolio and work with customers to design National
parts for their systems. These engineers also help identify emerging
markets for new products and are supported by Company design centers in
the field or at manufacturing sites.
In line with industry practices, National generally credits
distributors for the effect of price reductions on their inventory of
National products, and under specific conditions repurchases products
that are unsold, slow moving or have been discontinued by the Company.
Customers
National is not dependent upon any single customer, the loss of which
would have a material effect on the Company. In addition, no one
customer or distributor accounted for 10 percent or more of total net
sales in fiscal 1995.
Backlog
Semiconductor backlog quantities and shipment schedules under
outstanding purchase orders are frequently revised to reflect changes in
customer needs. Binding agreements calling for the sale of specific
quantities at specific prices which are contractually subject to price
or quantity revisions are, as a matter of industry practice, rarely
formally enforced. For these reasons, National does not believe that
the amount of backlog at any particular date is meaningful.
Seasonality
Generally, National is affected by the seasonal trends of the
semiconductor and related industries. As a result of these trends, the
Company typically experiences lower revenue in the third fiscal quarter,
primarily due to customer holiday demand adjustments. Revenue usually
has a seasonal peak in the Company's fourth quarter.
Manufacturing
The design of semiconductor products is based upon customer requirements
and general market trends and needs. These designs are compiled and
digitized by state of the art design equipment and then transferred to
silicon wafers in a series of complex precision processes which include
oxidation, lithography, chemical etching, diffusion, deposition,
implantation and metalization. Production of integrated circuits
continues with wafer sort, where the wafers are tested and separated
into individual circuit devices; assembly, where tiny wires are used to
connect the electronic circuits on the device to the stronger metal
leads or "prongs" of the package in which the device is encapsulated for
protection; and final test, where the devices are subjected to a series
of vigorous tests using computerized circuit testers and for certain
applications, environmental testers such as burn in ovens, centrifuges,
temperature cycle testers, moisture resistance testers, salt atmosphere
testers and thermal shock testers.
The Company's product design and development activities are
conducted predominantly in the United States. Wafer fabrication is
concentrated in four facilities in the United States and in a facility
in Scotland. Nearly all product assembly and final test operations are
performed in facilities in Southeast Asia. For capacity utilization and
other economic reasons, National employs subcontractors to perform
certain manufacturing functions in the United States, Southeast Asia and
Japan. National also utilizes manufacturing capacity of a minority
owned joint venture which operates the Company's former facility in
Israel, and the Company recently established a small, majority owned
joint venture in Shanghai, PRC, for the manufacture of boards using
National produced integrated circuits.
National's wafer manufacturing processes span Bipolar, Metal Oxide
Silicon ("MOS"), Complementary Metal Oxide Silicon ("CMOS") and Bipolar
Complementary Metal Oxide Silicon ("BiCMOS") technologies. As products
decrease in size and increase in functionality, National's wafer
fabrication facilities are now required in many cases to be able to
manufacture integrated circuits with sub-micron circuit pattern widths.
Precision manufacturing in wafer fabrication has carried over to
assembly and test where advanced packaging technology and comprehensive
test operations are required for more and more powerful integrated
circuits.
Wafer fabrication processes have been adapted for mixed signal
applications. National also has optimized its CMOS process for
nonvolatile memories, both ultraviolet and electrically erasable. There
are a number of Bipolar processes supporting the Company's standard
products. Of particular importance are several groups of processes that
are optimal for manufacturing the Company's analog products.
Raw Materials
National's manufacturing processes make use of certain key raw materials
critical to its products. These include silicon wafers, certain
chemicals and gases, ceramic and plastic packaging materials and various
precious metals. The Company also is increasingly relying on
subcontractors to supply finished or semi-finished products which the
Company markets through its sales channels. Both raw materials and
semi-finished or finished products are obtained from various sources,
although the number of sources for any particular material or product is
relatively limited. Although the Company feels its current supply of
essential materials is adequate, shortages from time to time have
occurred and could occur again. Significant increases in demand, rapid
product mix changes or natural disaster all could affect the Company's
ability to procure materials or goods.
Research and Development
National's research and development ("R&D") consists of pure research in
metallurgical, electro-mechanical and solid state sciences,
manufacturing process development and product design. At the corporate
level, CTG performs pure research functions. Much of the process
development is also defined and developed by CTG. The Company envisions
that its process capability will be prototyped in corporate R&D
facilities but more and more of the actual process development and
product design will be done by the operating divisions. R&D expenses
were $283.1 million in 1995 and $257.8 million in 1994, with both years
experiencing increases in R&D in the Company's core Analog and Mixed
Signal products.
Patents
National owns numerous United States and non-U.S. patents and has many
patent applications pending. It considers the development of patents
and the maintenance of an active patent program advantageous to the
conduct of its business but believes that continued success will depend
more on engineering, production, marketing, financial and managerial
skills than on its patent program. The Company licenses certain of its
patents to other manufacturers and participates in a number of cross
licensing arrangements with other parties. In addition, the Company is
currently involved in a program to further capitalize on its
intellectual property assets through licensing of its intellectual
property; the amount of income from the licensing program has varied in
the past and the amount and timing of future income from this program
cannot be forecast with certainty.
Employees
At May 28, 1995, National employed approximately 22,400 people of whom
approximately 7,900 were employed in the United States, 2,500 in Europe,
11,500 in Southeast Asia and 500 in other areas. The Company believes
that its future success depends fundamentally on its ability to recruit
and retain skilled technical and professional personnel. National's
employees in the United States are not covered by collective bargaining
agreements. The Company considers its employee relations worldwide to
be favorable.
Competition and Risks
The Semiconductor Industry
The semiconductor industry is characterized by rapid technological
change and frequent introduction of new technology leading to more
complex and powerful products. The result is a cyclical economic
environment generally characterized by short product life cycles, rapid
selling price erosion and high sensitivity to the overall business
cycle. In addition, substantial capital and R&D investment is required
for development and manufacture of products and processes. The Company
may experience periodic fluctuations in its operating results because of
industry wide conditions. National competes with a number of major
companies in the high-volume segment of the industry. These include
several companies whose semiconductor business may be only part of their
overall operations, such as Motorola, Inc., Philips Electronics, NV, and
Texas Instruments Incorporated. National also competes with a large
number of companies that target particular markets such as Linear
Technology Corporation, Analog Devices, Inc., Advanced Micro Devices,
Inc., SGS-Thompson Microelectronics SA and Cirrus Logic, Inc.
Competition is based on design and quality of the products, product
performance, price and service, with the relative importance of such
factors varying among products and markets.
International Operations
National conducts a substantial portion of its operations outside the
United States and its business is subject to risks associated with many
factors beyond its control. These factors include fluctuations in
foreign currency rates, instability of foreign economy or its emerging
infrastructure to support demanding manufacturing requirements,
government changes, and U.S. and foreign laws and policies affecting
trade and investment. Although the Company has not experienced any
materially adverse effects with respect to its foreign operations
arising from such factors, the Company has been impacted in the past by
one or more of these factors and could be impacted in the future by such
factors. In addition, although the Company seeks to hedge its exposure
to currency exchange rate fluctuations, the Company's competitive
position relative to non-U.S. suppliers can be affected by the exchange
rate of the U.S. dollar against other currencies, particularly the
Japanese yen.
Environmental Regulations
National believes that compliance with federal, state and local laws or
regulations which have been enacted or adopted to regulate the
environment has not had, nor will have, a material effect upon the
Company's capital expenditures, earnings, competitive or financial
position. (Also see Item 3, Legal Proceedings.)
ITEM 2. PROPERTIES
National's principal administrative and research facilities are located
in Santa Clara, California. Several other sites in the United States
have major concentrations of wafer fabrication and research and
development capability, including the Company's plants in Salt Lake
City, Utah, South Portland, Maine, and Arlington, Texas. The Company
also operates smaller facilities in Murrysville, Pennsylvania and Fort
Collins, Colorado, among others.
The Company conducts significant manufacturing offshore. One of
National's largest wafer fabrication facility exists in Greenock,
Scotland. Assembly and test functions are performed primarily in
Southeast Asia. These facilities are located in Penang and Malacca,
Malaysia, Cebu, the Philippines, and Singapore. A small manufacturing
facility, majority owned by National, was established in January 1995,
in Shanghai, Peoples' Republic of China. The regional headquarters for
National's International Business Group are located in Santa Clara,
California, Munich, Germany, Tokyo, Japan and Kowloon, Hong Kong.
National maintains local sales offices in various locations and
countries throughout its four business regions. In general, the Company
owns its manufacturing facilities and leases most of its sales and
administrative offices.
During fiscal 1995, the Company repurchased its manufacturing
facility in Arlington, Texas and its research and development facility
in Santa Clara, California, which were part of sales and subsequent
operating leaseback transactions entered into prior to 1990. The
Company continues to increase its property and plant expenditures in
addition to the aforementioned purchases. Wafer fabrication capacity
utilization approached 90% for most of 1995 and the Company continues to
invest substantial sums in modernization and expansion of its
facilities. The Company feels its current plant, property and leased
facilities are well maintained.
ITEM 3. LEGAL PROCEEDINGS
In July 1983, the United States Internal Revenue Service ("IRS")
issued an examination report for the fiscal years ended 1978 and 1979.
The Company filed a protest with the appeals office of the IRS in
September 1983. The IRS issued a Notice of Deficiency for these years in
December 1988 seeking additional taxes of approximately $24 million
(exclusive of interest). The issues giving rise to the proposed
adjustments related primarily to intercompany product transfer prices
and the application of Subpart F provisions of the United States
Internal Revenue Code. The Company filed a petition with the United
States Tax Court contesting the Notice of Deficiency in March 1989. The
IRS' subsequent examination of the Company's United States tax returns
for fiscal years 1980 through 1982 resulted in a Notice of Deficiency
issued in January 1990 seeking additional taxes of approximately $52
million (exclusive of interest) for the fiscal years ended 1976, 1977,
1980, 1981 and 1982. The issues giving rise to the proposed adjustments
for the earlier years related primarily to reductions in the available
net operating loss carrybacks and, for the later years, to intercompany
product transfer prices, full absorption inventory costing,
deductibility of certain reserves and spare parts depreciation. The
Company filed a petition with the United States Tax Court contesting
this Notice of Deficiency in April 1990. By order dated August 8, 1991,
the Tax Court granted the Company's and the IRS' motion to consolidate
the two cases for trial. Prior to trial, which was held during February
1993, the Company and the IRS reached a settlement on all disputed
issues except for the issue of intercompany product transfer prices;
this settlement reduced the total of the additional taxes being sought
to approximately $52 million (exclusive of interest). An opinion was
issued by the Tax Court on May 2, 1994. The opinion found that
adjustments to income of $40.6 million were due, which the Company
estimates, after giving effect to loss and credit carrybacks, will
result in a tax deficiency of approximately $5 million plus associated
interest of between $35 million and $45 million. The IRS filed a motion
for reconsideration of the opinion on June 3, 1994, seeking an
additional $31 million in income adjustments. The motion was denied by
the Court on June 10, 1994. The Company and the IRS have reached
agreement on the allocation of the additional income, and this agreement
was then presented to the Court. A final decision implementing the
opinion was entered by the Tax Court on June 6, 1995 and is subject to
appeal within 90 days by either the Company or the IRS. It is not known
if an appeal will follow at this time. With respect to the IRS'
examination of tax returns for other fiscal years, the Company and the
IRS settled in January 1994 all issues for fiscal years 1983 through
1985, including issues relating to intercompany product transfer
pricing, without the payment of additional federal tax. This result is
affected by certain net operating loss carryovers and credits, which
will not be determined until the Tax Court litigation is completed. In
April 1995, the IRS issued a Notice of Deficiency for fiscal years 1986
through 1989 seeking additional taxes of approximately $11 million
(exclusive of interest). The issues giving rise to this set of proposed
adjustments relate primarily to the Company's former Israeli operation
and the purchase price paid for Fairchild Semiconductor Corporation.
The Company intends to file a protest with the appeals office of the IRS
contesting the Notice of Deficiency. The Company expects the IRS to
begin examination of the Company's tax returns for fiscal years 1990
through 1993 shortly. The Company believes that adequate tax payments
have been made or accrued for all years and that the Tax Court opinion
will not have a material adverse effect on the Company's financial
position.
On April 22, 1988, the District Director of the United States
Customs Service, San Francisco, issued a Notice of Proposed Action and a
Pre-penalty Notice to the Company alleging underpayment of duties of
approximately $19.5 million on merchandise imported from the Company's
foreign subsidiaries during the period from June 1, 1979 to March 1,
1985. The Company filed an administrative appeal in September 1988. On
May 23, 1991, the District Director revised his action and issued a
Notice of Penalty Claim and Demand for Restoration of Duties, reducing
the alleged underpayment of duties for the same period to approximately
$6.9 million; the alleged underpayment was subsequently reduced on April
22, 1994 to approximately $3.6 million. The revised alleged
underpayment could be subject to penalties that may be computed as a
multiple of the underpayment. The Company is continuing to contest the
Penalty Notice in proceedings at the administrative agency level. The
Company believes that resolution of this matter will not have a material
impact on the Company's financial position.
A sales tax examination conducted by the California State Board of
Equalization for the tax years 1984 to 1988 resulted in a proposed
assessment of approximately $12 million (exclusive of interest and
penalty) in October 1991, which assessment has been subsequently reduced
to $2.1 million. The Company is waiting for the State Board of
Equalization to approve the assessment. The Company believes adequate
provisions have been recorded and that its potential liability, if any,
in excess of amounts already accrued will not have a material adverse
effect upon its financial position.
On December 2, 1992, Hughes Aircraft Company ("Hughes") filed an
action in the U.S. District Court for the Eastern Division of the
Northern District of Illinois alleging the Company had infringed U.S.
Patents Nos. 3,472,712; 3,507,709; and 3,615,934 and seeking unspecified
amounts of damages and costs. The Company was served with the suit on
January 7, 1993. The Company countersued Hughes' parent company,
General Motors ("GM") and Hughes in the same action alleging
infringement of U.S. Patents Nos. 3,901,735; 4,325,984; and 4,599,634.
The case was transferred to the U.S. District Court for the Northern
District of California. The Company also filed an action in California
State Court seeking declaratory relief and alleging breach of contract
by Hughes and GM in connection with a prior patent cross license
agreement entered into between GM and Fairchild Camera and Instruments
Corporation (subsequently renamed Fairchild Semiconductor Corporation
and purchased by the Company in October 1987). In September 1994, the
parties agreed to resolve the dispute in its entirety in a binding
minitrial procedure structured to handle the primary disputed issue; as
part of the agreement, the Company dismissed with prejudice the related
California State Court action. In December 1994, the minitrial was
conducted before a judge selected by the parties on the single issue of
whether claim 2 of the U.S. Patent No. 3,472,712 owned by Hughes was
infringed by one of the Company's semiconductor fabrication processes.
For purposes of the minitrial, the patent was presumed valid and the
parties agreed in advance to the amounts of damages that would be paid
by the Company which amount was not disclosed to the judge until after
the judge had issued his findings. The judge found for Hughes on the
single issue presented in the minitrial and pursuant to prior agreement
of the parties, the Company paid to Hughes the sum of $10 million and
the Federal Court action was dismissed with prejudice. The dismissal
constituted a full settlement and release of all claims for past
infringement of the patents in issue. In addition, the Company granted
Hughes and GM licenses under its patents at issue; no such license was
granted by Hughes back to the Company because the Hughes patents at
issue had expired.
By letter dated January 6, 1994, the Company was notified by the
California Department of Toxic Substances Control ("DTSC") of a Report
of Violation ("ROV") listing 39 violations arising out of inspections of
certain facilities and operations of the Company and its wholly owned
subsidiary, Dynacraft, Inc. ("DCI") located in Santa Clara, California
and the DTSC's further review of information obtained during the
inspections. The deficiencies cited can be described as violations of
various provisions of the California Health and Safety Code and the
California Code of Regulations relating to the record keeping for and
the handling, treatment, storage, and disposal of hazardous products and
wastes. The Company worked with DTSC to correct the deficiencies noted
in the ROV and signed a Stipulation and Order with the DTSC on June 16,
1995 whereby the Company agreed to pay a fine of $490,000. The Company
believes adequate provisions have been recorded and that its potential
liability, if any, in excess of amounts already accrued will not have a
material adverse effect upon its financial position.
On June 18, 1991, the U.S. Environmental Protection Agency ("EPA")
issued a Finding of Violation and Order to the Company and DCI relating
to the alleged failure of the Company and DCI to comply with the federal
categorical pretreatment standards arising from the city of San Jose,
California's pretreatment program. The Order requires the Company and
DCI to comply with all Federal categorical pretreatment standards and to
take further actions to maintain permanent compliance. Since 1992, the
Company and DCI have worked with the U.S. Department of Justice ("DOJ")
and the EPA to settle this matter. A Consent Decree was entered by the
U.S. District Court, Northern District of California on March 30, 1995.
Under the terms of the Consent Decree, National and DCI agreed to pay a
civil penalty in the amount of $50,000 and perform three Supplemental
Environmental Projects ("SEPs"), the costs of which are estimated at
$445,000. The $50,000 civil penalty has been paid. In the event the
Company and DCI do not perform any or all of the SEPs within two years
of March 30, 1995, stipulated penalties in the amounts of $62,517,
$55,303, and/or $96,180 (the respective amounts for each of the SEPs)
must be paid to the EPA.
The Company has been named to the National Priorities List
("Superfund") for its Santa Clara, California site and has completed a
Remedial Investigation/Feasibility Study with the Regional Water Quality
Control Board ("RWQCB"), acting as agent for the EPA. The Company has
agreed in principle with the RWQCB to a site remediation plan. In
addition to the Santa Clara site, the Company has been designated as a
potentially responsible party by federal and state agencies with respect
to certain waste sites with which the Company may have had direct or
indirect involvement. Such designations are made regardless of the
extent of the Company's involvement. These claims are in various stages
of administrative or judicial proceedings and include demands for
recovery of past governmental costs and for future investigations and
remedial actions. In many cases, the dollar amounts of the claims have
not been specified and have been asserted against a number of other
entities for the same cost recovery or other relief as was asserted
against the Company. The Company accrues costs associated with such
matters when they become probable and reasonably estimable. The amount
of all environmental charges to earnings, including charges relating to
the Santa Clara site remediation, which did not include potential
reimbursements from insurance coverage, have not been material during
the last three fiscal years. The Company believes that the potential
liability, if any, in excess of amounts already accrued will not have a
material effect on the Company's financial position.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the
fiscal year covered by this report.
EXECUTIVE OFFICERS OF THE REGISTRANT *
Name Current Title Age *
- ---- ------------- -----
Gilbert F. Amelio (1) Chairman of the Board,
President and Chief Executive Officer 52
Richard M. Beyer (2) Executive Vice President and
Chief Operating Officer 46
Patrick J. Brockett (3) President, International Business Group 47
Charles P. Carinalli (4)Senior Vice President and 47
Chief Technical Officer
John M. Clark III (5) Senior Vice President, General Counsel 45
and Secretary
Donald Macleod (6) Executive Vice President, Finance and 46
Chief Financial Officer
Kirk P. Pond (7) Executive Vice President and 50
Chief Operating Officer
George M. Scalise (8) Executive Vice President and 61
Chief Administrative Officer
* as of July 1, 1995
Business Experience During Last Five Years
- ------------------------------------------
(1) Mr. Amelio has been President, Chief Executive Officer, and a
Director of the Company since joining the Company in February 1991. He
was named Chairman of the Board in July 1995. Prior to joining the
Company, Mr. Amelio was President of Rockwell Communications Systems and
had previously served as President of Rockwell International
Corporation's Semiconductor Products Division.
(2) Mr. Beyer joined the Company in February 1993 and served as
President of the Communications and Computing Group until being named
Executive Vice President and Chief Operating Officer in June 1995.
Prior to joining the Company, Mr. Beyer was Vice President and General
Manager of the Switching Systems Division of Rockwell International
Corporation.
(3) Mr. Brockett joined the Company in September 1979. Prior to
becoming President, International Business Group in February 1993, he
had held positions as Corporate Vice President, International Business
Group; Vice President, North America Business Center; Vice President and
Managing Director, European Operations; and Vice President and Director
of European Sales.
(4) Mr. Carinalli joined the Company in June 1970. Prior to
becoming Senior Vice President and Chief Technical Officer in February
1993, he was Executive Vice President, Communications and Computing
Group and Chief Technical Officer. Prior to that, he had held positions
as Vice President, Integrated Systems Group; Group Director, Integrated
Systems Group; and Director of Technology, Advanced Digital Products.
(5) Mr. Clark joined the Company in May 1978. Prior to becoming
Senior Vice President, General Counsel and Secretary in April 1992, he
had held positions as Associate General Counsel, Vice President and
Assistant Secretary.
(6) Mr. Macleod joined the Company in February 1978. Prior to
becoming Executive Vice President, Finance and Chief Financial Officer
in June 1995, he had held positions as Senior Vice President, Finance
and Chief Financial Officer; Vice President, Finance and Chief Financial
Officer; Vice President, Financial Projects; Vice President and General
Manager, Volume Products - Europe; and Director of Finance and
Management Services - Europe.
(7) Mr. Pond joined the Company as an employee of Fairchild
Semiconductor Corporation ("Fairchild") when Fairchild was acquired by
the Company in October 1987. Prior to becoming Executive Vice President
and Chief Operating Officer in June 1994, he held positions as Co-
President, Standard Products Group and Vice President, Digital Logic
Division.
(8) Mr. Scalise joined the Company in August 1991. Prior to
becoming Executive Vice President and Chief Administrative Officer in
June 1995, he held the positions as Senior Vice President and Chief
Administrative Officer and Senior Vice President, Planning and
Development. Prior to joining the Company, Mr. Scalise served as Senior
Vice President of Advanced Micro Devices, Inc. until July 1987 and as
President and Chief Executive Officer of Maxtor Corporation from July
1987 to January 1991. From January 1991 until August 1991, Mr. Scalise
was a private investor, and Chairman and Chief Executive Officer of
Advantage Production Technology Corporation.
Executive officers serve at the pleasure of the Company's Board of
Directors. There is no family relationship among any of the Company's
directors and executive officers.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
See information appearing on pages 37-38, 40-41, 46, and 51 under the
captions "Debt Financing", "Shareholders' Equity", "Financial
Information by Quarter (Unaudited)" and "Common Stock Data" of the
registrant's 1995 Annual Report to Shareholders which is incorporated
herein by reference. Market price range data are based on the New York
Stock Exchange Composite Tape. Market price per share at the close of
business on July 14, 1995 was $30.375. At July 14, 1995, the number of
record holders of the Company's common stock was 12,986.
ITEM 6. SELECTED FINANCIAL DATA
See "Five-Year Selected Financial Data" on page 23 of the registrant's
1995 Annual Report to Shareholders which is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
See "Management's Discussion and Analysis of Results of Operations and
Financial Condition" on pages 24 through 27 of the registrant's 1995
Annual Report to Shareholders which is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements described in Item 14(a)1 of Part IV of this
report are incorporated herein by reference.
The "Financial Information by Quarter (Unaudited)," appearing on
page 46 of the registrant's 1995 Annual Report to Shareholders, is
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information with respect to directors, appearing under the caption
"Election of Directors" including subcaptions thereof, in the
registrant's Proxy Statement for the 1995 annual meeting of shareholders
to be held on or about September 29, 1995 and which will be filed in
definitive form pursuant to Regulation 14a on or about August 20, 1995
(hereinafter "1995 Proxy Statement"), is incorporated herein by
reference. Information concerning executive officers is set forth in
Part I hereof under the caption "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
The information appearing under the caption "Director Compensation",
"Compensation Committee Interlocks and Insider Participation", and
"Executive Compensation" (including all related sub captions thereof) in
the 1995 Proxy Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information concerning the only known ownership of more than 5
percent of the Company's outstanding Common Stock "Outstanding Capital
Stock, Quorum and Voting" in the 1995 Proxy Statement, is incorporated
herein by reference. The information concerning the ownership of the
Company's equity securities by directors, certain executive officers and
directors and officers as a group, appearing under the caption "Security
Ownership of Management" in the 1995 Proxy Statement is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing under the caption "Compensation Committee
Interlocks and Insider Participation" and "Certain Transactions and
Relations" in the 1995 Proxy Statement is incorporated herein by
reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)1. Financial Statements
- ---------------------------
The following items appearing in the 1995 Annual Report to Shareholders
are incorporated by reference into Part II of this report:
Pages in 1995 Annual
Report to Shareholders
----------------------
Consolidated Balance Sheets at May 28, 1995 28
and May 29, 1994.
Consolidated Statements of Operations for each 29
of the years in the three-year period ended
May 28, 1995.
Consolidated Statements of Shareholders' Equity 30
for each of the years in the three-year period
ended May 28, 1995.
Consolidated Statements of Cash Flows for each 31
of the years in the three-year period ended
May 28, 1995.
Notes to Consolidated Financial Statements. 32-46
Independent Auditors' Report. 47
Pages in
(a)2. Financial Statement Schedule this document
- ------------------------------------ -------------
For the three years ended May 28, 1995:
Independent Auditors' Report 17
Schedule II -- Valuation and Qualifying Accounts 18
All other schedules are omitted since the required information is
inapplicable or the information is presented in the consolidated
financial statements or notes thereto.
Separate financial statements of the registrant are omitted
because the registrant is primarily an operating company and all
subsidiaries included in the consolidated financial statements being
filed, in the aggregate, do not have minority equity interest or
indebtedness to any person other than the registrant in an amount which
exceeds five percent of the total assets as shown by the most recent
year end consolidated balance sheet filed herein.
(a)3. Exhibits
- ---------------
The exhibits listed in the accompanying Index to Exhibits on pages
20 and 21 of this report are filed or incorporated by reference as part
of this report.
(b) Reports on Form 8-K
- ------------------------
No reports on Form 8-K were filed during the fiscal quarter ended
May 28, 1995.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
National Semiconductor Corporation:
Under date of June 7, 1995, we reported on the consolidated balance
sheets of National Semiconductor Corporation and subsidiaries as of May
28, 1995, and May 29, 1994, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the years in
the three-year period ended May 28, 1995, as contained in the 1995
Annual Report to Shareholders. These consolidated financial statements
and our report thereon are incorporated by reference in the May 28, 1995
annual report on Form 10-K of National Semiconductor Corporation. In
connection with our audits of the aforementioned consolidated financial
statements, we also audited the related consolidated financial statement
schedule as listed under item 14(a)2. The financial statement schedule
is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement schedule based on
our audits.
In our opinion, the financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set
forth therein.
KPMG PEAT MARWICK LLP
San Jose, California
June 7, 1995
NATIONAL SEMICONDUCTOR CORPORATION
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
Years Ended May 30, 1993, May 29, 1994, and May 28,1995
(in millions)
Deducted from receivables
in the consolidated balance sheets
Doubtful Returns and
Description Accounts Allowances Total
- ----------- -------- ----------- -----
Year ended May 30, 1993
- -----------------------
Balance at beginning of period $ 3.5 $ 35.7 $ 39.2
Additions charged against revenue - 222.9 222.9
Additions charged to costs and expenses 0.1 - 0.1
Deductions (0.1)(1) (229.1) (229.2)
-------- -------- --------
Balance at end of period $ 3.5 $ 29.5 $ 33.0
======== ======== ========
Year ended May 29, 1994
- -----------------------
Balance at beginning of period $ 3.5 $ 29.5 $ 33.0
Additions charged against revenue - 193.2 193.2
Deductions (0.5)(1) (191.9) (192.4)
------- ------- --------
Balance at end of period $ 3.0 $ 30.8 $ 33.8
======= ======= ========
Year ended May 28, 1995
- -----------------------
Balance at beginning of period $ 3.0 $ 30.8 $ 33.8
Additions charged against revenue - 214.1 214.1
Deductions (0.6)(1) (213.6) (214.2)
------- --------- --------
Balance at end of period $ 2.4 $ 31.3 $ 33.7
======== ========= ========
________________________________________________
(1) Doubtful accounts written off, less recoveries.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
NATIONAL SEMICONDUCTOR CORPORATION
Date: July 27, 1995 By: /S/ GILBERT F. AMELIO
----------------------
Gilbert F. Amelio
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities stated and on the 27th day of July
1995.
Signature Title
/S/ GILBERT F. AMELIO Chairman of the Board, President
Gilbert F. Amelio and Chief Executive Officer
(Principal Executive Officer)
/S/ DONALD MACLEOD* Executive Vice President, Finance
Donald Macleod and Chief Financial Officer
(Principal Financial Officer)
/S/ ROBERT B. MAHONEY* Vice President and Controller
Robert B. Mahoney (Principal Accounting Officer)
/S/ GARY P. ARNOLD* Director
Gary P. Arnold
/S/ ROBERT BESHAR* Director
Robert Beshar
/S/ MODESTO A. MAIDIQUE* Director
Modesto A. Maidique
Director
Edward R. McCracken
/S/ J. TRACY O'ROURKE* Director
J. Tracy O'Rourke
/S/ CHARLES E. SPORCK* Director
Charles E. Sporck
/S/ DONALD E. WEEDEN* Director
Donald E. Weeden
*By /S/ GILBERT F. AMELIO
Gilbert F. Amelio, Attorney-in-fact
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
National Semiconductor Corporation:
We consent to incorporation by reference in the Registration
Statements No. 33-48943, 33-48941, 33-54931, 33-55699, 33-55703, and 33-
55715 on Form S-8 of National Semiconductor Corporation and subsidiaries
of our report dated June 7, 1995, relating to the consolidated balance
sheets of National Semiconductor Corporation and subsidiaries as of May
28, 1995, and May 29, 1994, and the related consolidated statements of
operations, shareholders' equity, and cash flows for each of the years
in the three-year period ended May 28, 1995, which report appears on
page 47 of the 1995 National Semiconductor Corporation Annual Report to
Shareholders ("National Annual Report") and is incorporated by reference
in the May 28, 1995 annual report on Form 10-K of National Semiconductor
Corporation and our report dated June 7, 1995, on the related financial
statement schedule which appears on page 21 of the May 28, 1995 annual
report on Form 10-K. Our report which appears in the National Annual
Report refers to a change in accounting for certain costs in inventory.
KPMG PEAT MARWICK LLP
San Jose, California
July 27, 1995
INDEX TO EXHIBITS
Item 14(a) (3)
The following documents are filed as part of this report:
1. Financial Statements: reference is made to the Financial
Statements described under Part IV, Item 14(a) (1).
2. Other Exhibits:
Designation Description of Exhibit
- ----------- ----------------------
3.1 Second Restated Certificate of Incorporation of the
Company, as amended (incorporated by reference from the Exhibits to the
Company's Registration Statement on Form S-3 Registration No. 33-52775,
which became effective March 22, 1994); Certificate of Powers,
Designations, Preferences and Rights designating the $32.50 Convertible
Preferred Stock (incorporated by reference from the Exhibits to the
Company's Registration Statement on Form S-3 Registration No. 33-52775,
which became effective March 22, 1994). Certificate of Amendment of
Certificate of Incorporation dated September 30, 1994.
3.2 By-Laws of the Company
4.1 Form of Common Stock Certificate (incorporated by
reference from the Exhibits to the Company's Registration Statement on
Form S-3 Registration No. 33-48935, which became effective October 5,
1992).
4.2 Rights Agreement (incorporated by reference from the
Exhibits to the Company's Registration Statement on Form 8-A filed
August 10, 1988).
4.3 Deposit Agreement and Form of Depositary Receipt
(incorporated by reference from the Exhibits to the Company's
Registration Statement on Form S-3 Registration No. 33-52775, which
became effective March 22, 1994).
10.1 Management Contract or Compensatory Plan or Arrangement:
License Agreement with Wave Systems Corporation (incorporated by
reference from the Exhibits to the Company's 10-Q filed March 18,1994).
10.2 Management Contract or Compensatory Plan or Arrangement:
Key Employee Incentive Plan (incorporated by reference from the Exhibits
to the Company's 10-K filed July 28, 1994). 1995 Key Employee Incentive
Plan Agreement (incorporated by reference from the Exhibits to the
Company's 10-K filed July 28, 1994). 1995 Key Employee Incentive Plan
Agreement as amended through January 12, 1995 (incorporated by reference
from the Exhibits to the Company's 10-Q filed March 17, 1995.)
10.3 Management Contract or Compensatory Plan or Arrangement:
Executive Officer Incentive Plan (incorporated by reference from the
Exhibits to the Company's definitive Proxy Statement for the Annual
Meeting of Stockholders held September 30, 1994 filed on August 10,
1994). 1995 Executive Officer Incentive Plan Agreement (incorporated by
reference from the Exhibits to the Company's 10-K filed July 28, 1994).
1996 Executive Officer Incentive Plan Agreement.
10.4 Management Contract or Compensatory Plan or Arrangement:
Stock Option Plan, as amended through January 19, 1995 (incorporated by
reference from the Exhibits to the Company's 10-Q filed March 17, 1995).
10.5 Management Contract or Compensatory Plan or Arrangement:
Benefit Restoration Plan (incorporated by reference from the Exhibits to
the Company's 10-Q filed December 14, 1994).
10.6 Management Contract or Compensatory Plan or Arrangement:
Promissory Note and Agreement with Peter J. Sprague (incorporated by
reference from the Exhibits to the Company's Form 10-K filed August 22,
1991). Amendment Letter dated November 30, 1993 (incorporated by
reference from the Exhibits to the Company's 10-K filed July 28, 1994).
Agreement with Peter J. Sprague dated May 17, 1995. Non Qualified Stock
Option Agreement with Peter J. Sprague dated May 18, 1995.
10.7 Management Contract or Compensatory Plan or Arrangement:
Airplane Use Letter Agreement with Gilbert F. Amelio doing business as
Aero Ventures (incorporated by reference from the Exhibits to the
Company's Form 10-K filed August 22, 1991). 1992 Extension of Airplane
Use Letter Agreement with Gilbert F. Amelio doing business as Aero
Ventures (incorporated by reference from the Exhibits to the Company's
10-K filed August 24, 1992). 1993 Extension of Airplane Use Letter
Agreement with Gilbert F. Amelio doing business as Aero Ventures
(incorporated by reference from the Exhibits to the Company's 10-K filed
August 9, 1993). Airplane Use Agreement with Gilbert F. Amelio doing
business as Aero Ventures (incorporated by reference from the Exhibits
to the Company's 10-Q filed March 18, 1994). Amendment No. 1 to
Airplane Use Agreement with Gilbert F. Amelio doing business as Aero
Ventures (incorporated by reference from the Exhibits to the Company's
10-Q filed December 14, 1994).
10.8 Management Contract or Compensatory Plan or Arrangement:
Loan Agreement with Gilbert F. Amelio (incorporated by reference from
the Exhibits to the Company's 10-K filed August 24, 1992).
10.9 Management Contract or Compensatory Plan or Arrangement:
Director Stock Plan (incorporated by reference from the Exhibits to the
Company's Registration Statement on Form S-8 Registration No. 33-54931
which became effective August 5, 1994).
10.10 Management Contract or Compensatory Plan or Arrangement:
Performance Award Plan (incorporated by reference from the Exhibits to
the Company's Registration Statement on form S-8 Registration No. 33-
55699 which became effective September 30,1994).
10.11 Management Contract or Compensatory Plan or Arrangement:
Consulting Agreement with Harry H. Wetzel (incorporated by reference
from the Exhibits to the Company's 10-K filed July 28, 1994).
10.12 Management Contract or Compensatory Plan or Arrangement:
Preferred Life Insurance Program (incorporated by reference from the
Exhibits to the Company's 10-K filed July 28, 1994).
10.13 Management Contract or Compensatory Plan or Arrangement:
Retired Officers and Directors Health Plan.
11.0 Computation of Earnings (Loss) per share assuming full
dilution.
13.0 Portions of the Annual Report to Shareholders for the
fiscal year ended May 28, 1995 (to be deemed filed only to the extent
required by the instructions to Exhibits for reports on Form 10-K).
21.0 List of Subsidiaries.
23.0 Consent of Independent Auditors (included in Part IV).
24.0 Power of Attorney.