10-Q 1 d10q.txt PERIOD ENDING 09/30/2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q X Quarterly Report Pursuant to Section 13 or 15(d) of --- The Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 2002 OR ___ Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the Transition Period from _________ to _________ Commission File Number: 0-13576 ENCORE COMPUTER CORPORATION --------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 04-2789167 --------------------------------------- --------------------------------------- (State of Incorporation) (IRS Employer Identification No.) 34929 Curtis Boulevard Eastlake, Ohio 44095 --------------------------------------- --------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (440) 953-5170 Securities registered pursuant to Section 12(g) of the Act: Title of each class Common Stock, par value $.01 per share 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 ____ --- On November 12, 2002 the registrant had 80,746,722 outstanding shares of common stock, par value $.01 per share. Page 1 ENCORE COMPUTER CORPORATION INDEX

PART I. FINANCIAL INFORMATION Page Number Item 1. Financial Statements Condensed Consolidated Statement of Net Assets in Liquidation 3 Condensed Consolidated Statement of Changes in Net Assets in Liquidation 4 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk 1213 Item 4. Controls and Procedures 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings 1314 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 1315 Signatures 1417 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 18

Page 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ENCORE COMPUTER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF NET ASSETS IN LIQUIDATION (In thousands, Except Share Data)

~~June~~September 30, December 31, 2002 2001 ----~~-------~~ -----~~------~~ (Unaudited) ASSETS Cash and cash equivalents $ 32,~~225~~977 $ 3,291 ------------ ------------ Total assets $ 32,~~225~~977 $ 3,291 ============ ============ LIABILITIES AND NET ASSETS IN LIQUIDATION Accounts payable and accrued liabilities $ ~~317~~57 $ 433 ------------ ------------ Total current liabilities ~~317~~57 433 Net assets in liquidation 2,~~908~~920 2,858 ------------ ------------ Total liabilities and net assets in liquidation $ 32,~~225~~977 $ 3,291 ============ ============ Number of Common Shares outstanding 80,746,722 80,746,722 ============ ============ Net assets in liquidation per Common Share $ .036 $ .035 ============ ============

The accompanying notes are an integral part of these condensed consolidated financial statements. Page 3 ENCORE COMPUTER CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION (Unaudited) (In thousands)

Three Months Ended ~~Six~~Nine Months Ended ------------------ ----------------- ~~June~~Sept. 30, 2002 ~~July~~Sept. 130, 2001 ~~June~~Sept. 30, 2002 ~~July~~Sept. 130, 2001 -------------- -------------- -------------- -------------- Net assets in liquidation at beginning of period $ 2,908 $ 2,~~559~~588 $ 2,858 $ 2,520 Interest income 1312 2927 2436 6895 Other adjustments ~~(13)~~0 --227 26 --227 ------- ------- ------- ------- Net assets in liquidation at end of period $ 2,~~908~~920 $ 2,~~588~~842 $ 2,~~908~~920 $ 2,~~588~~842 ======= ======= ======= =======

The accompanying notes are an integral part of these condensed consolidated financial statements. Page 4 ENCORE COMPUTER CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A. Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Encore Computer Corporation, founded in 1983, designed, manufactured, distributed and supported scalable real-time data systems and advanced clustering technologies. Headquartered in Fort Lauderdale, Florida, the company had sales offices and distributors in the United States, Canada, Europe, and the Far East. Significant Accounting Policies The condensed consolidated financial statements include the accounts of Encore Computer Corporation and its subsidiaries (collectively, "Encore" or the "Company"). All material intercompany balances and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements are unaudited and have been prepared by Encore in accordance with accounting principles generally accepted in the United States. Certain information and footnote disclosures normally included in the Company's annual consolidated financial statements have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2001. The condensed consolidated financial statements, in the opinion of the Company, reflect all adjustments (including normal recurring accruals) necessary for a fair statement of the results for interim periods. All adjustments made during the interim periods are normal recurring adjustments. The year end condensed statement of net assets in liquidation data is derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States. Intention of Liquidation During fiscal 1997, Encore sold substantially all of its storage products business assets to Sun Microsystems, Inc. ("Sun"). Furthermore, during fiscal 1998, the Company sold its real-time computer systems business to Gores Technology Group. After these transactions, management contemplated that the Company would be liquidated. However, because of a provision of the agreements relating to Encore's sale of its storage products business to Sun, Encore's stockholders could not vote on the liquidation of Encore at the meeting on September 11, 1998, at which they approved the sale of the real-time computer systems business. The Board of Directors terminated the employment of the Company's President on September 30, 1998 and the employment of the Company's Chief Executive Officer on November 24, 1998 in view of the fact that the Company no longer had any active business. Page 5 The Company's staff was reduced to its General Counsel, who took the position of President, its Chief Financial Officer, its Vice President of Human Resources (who continued to be involved in employee compensation matters arising out of the sales of the storage products and the real-time computer systems businesses) and a few clerical and administrative employees. The Company also moved its offices to a substantially smaller space, which it occupied under a short-term lease. Those offices were closed on or about June 30, 1999, and the Company's further activities are conducted in space provided by Gould Electronics Inc. ("Gould") in Eastlake, Ohio. Since Management expected that liquidation of the Company would occur, the Company adopted the liquidation basis of accounting as of December 31, 1998 and for all periods subsequent to December 31, 1998. See Note F for a discussion of the resolution of the litigation and the dissolution and liquidation of the Company. Based on the court-approved settlement of the litigation, no assets will remain after payments pursuant to the settlement agreement. Under the liquidation basis of accounting, assets are stated at their estimated net realizable value and liabilities are stated at their estimated amounts. The valuation of assets and liabilities necessarily requires many estimates and assumptions, and there are substantial uncertainties in liquidating the Company. The valuations presented in the accompanying Statement of Net Assets in Liquidation represent estimates, based on present facts and circumstances, of the estimated realizable values of assets, estimated liabilities and estimated costs associated with carrying out the liquidation of the Company. The actual values and costs could be higher or lower than the amounts recorded as of September 30, 2002. Accounts payable and accrued liabilities as of September 30, 2002 include estimates of costs to be incurred in carrying out the liquidation of the Company. The actual costs could vary significantly from the related provisions due to uncertainty related to the length of time required to liquidate the Company and complexities and contingencies. See Note F for additional information regarding future liquidation costs. Page 6 B. Asset Purchase Agreement with Sun Microsystems On November 24, 1997, the Company sold substantially all the assets associated with its storage products business to Sun Microsystems, Inc. ("Sun"). The Asset Purchase Agreement under which the transaction took place contemplated that Sun would pay $185 million for the storage products business, of which $150 million would be paid in cash at the closing and $35 million would be paid on July 1, 1998, subject to Sun's right to make offsets against the second payment. In fact, because of certain closing adjustments, Sun paid Encore $151,168,227 at the closing. In connection with the sale of Encore's storage product business to Sun, Gould also entered into an agreement with Sun under which Gould guaranteed most of Encore's obligations under the Asset Purchase Agreement between Encore and Sun, agreed to provide whatever funds were necessary to ensure that Encore would not become insolvent within one year after the closing of the transaction with Sun, and indemnified Sun against any losses Sun might incur if the sale of Encore's storage products business to Sun were challenged in an insolvency proceeding relating to Encore commenced within two years after the closing. Shortly before July 1, 1998, Sun asserted claims against Encore totaling $9,692,000. Because of that, on July 1, 1998, Sun paid only $25,308,000 of the $35,000,000 which was due on that date. On July 16, 1999, Sun and Encore entered a Settlement Agreement and Mutual Release pursuant to which Sun paid $2,500,000 to Gould as a settlement for the receivable and Sun released these claims. Sun did not release Gould's other indemnification obligations related to Encore's obligations under the Asset Purchase Agreement. On November 24, 1997, Gould held (i) notes, secured by all of Encore's assets, under which Encore owed Gould $93.55 million for money Encore had borrowed from Gould plus unpaid interest, and (ii) convertible preferred stock of Encore with a liquidation preference totaling $411 million, which Encore had issued to Gould between 1991 and 1996 in exchange for cancellation of indebtedness for money Encore had borrowed from Gould and interest on those borrowings. In addition, Gould held approximately 48.44% of Encore's common stock, which Gould had obtained as part of the consideration for the sale of its Computer Systems Division to Encore in 1989 or through conversion of convertible preferred stock. In connection with the sale of Encore's storage products business to Sun, Encore and Gould agreed that Encore would redeem all the convertible preferred stock which Gould held for $60 million, of which $25 million was to be paid at the closing of the Sun transaction, and the balance was to be satisfied with the second payment due from Sun. In addition, Gould agreed that if it received the entire $35 million by July 31, 1998, Gould would waive its right to receive additional shares of preferred stock with a liquidation preference of approximately $43 million, which were due to it as past-due dividends on the convertible preferred stock which was being redeemed. Finally, Gould agreed that if Encore were liquidated before November 24, 1999, Gould would waive any right it had as a holder of Encore's common stock with regard to the first $30 million of liquidating distributions made to Encore's common stockholders. Page 7 Because Sun withheld $9,692,000 of the payment due on July 1, 1998, Encore remained obligated to Gould in that amount and had to either pay that amount to Gould out of its own funds by July 31, 1998 or issue to Gould the over-due dividend shares of convertible preferred stock, which had a liquidation preference of $42,678,400. However, in order to give Encore more time to attempt to resolve Sun's claims, Gould agreed that if Encore issued those dividend shares to it, Gould would give Encore the option to repurchase the dividend shares on or before July 31, 1999 for an amount equal to the balance of the $9,692,000 which remained unpaid ($7,192,000 after the payment of $2,500,000 received on July 16, 1999) plus interest at 8.5% per annum from August 1, 1998. Encore then issued the dividend shares to Gould. On July 31, 1999, Gould extended Encore's option to repurchase the dividend shares to October 30, 1999; Gould subsequently extended Encore's option to December 15, 1999, when it expired. On December 30, 1999, the Company paid $7,192,000 to Gould to settle its obligation for the amounts withheld by Sun, and Gould, among other things, agreed to convert the dividend shares into common stock and agreed that if Encore were liquidated before November 24, 2000, Gould would waive any right it had as a holder of Encore's common stock with regard to the first $30 million of liquidating distributions made to Encore's common stockholders. Additionally, Gould agreed to indemnify Encore for any obligations it might incur to indemnify its current and future directors, up to a total of $7,192,000. On January 20, 2000, Gould converted its convertible preferred stock to 13,295,815 shares of common stock. Page 8 C. Sale to Gores Technology When the Company completed the sale of its storage products business, the Board of Directors decided that, at least until the Board's January 1998 meeting, the Company should (a) explore the possibility of attempting to develop and market clustering software related to Windows NT(R) and (b) explore the feasibility of the Company's continuing, and attempting to expand, its real-time computer systems business. In January 1998, the Board of Directors (i) decided the Company should discontinue its efforts to develop clustering software relating to Windows NT and (ii) authorized the Company to retain an investment banker to try to find a purchaser for the real-time computer systems business. On March 2, 1998, the Company signed a non-binding letter of intent to sell its real-time computer systems business to Gores Technology Group ("Gores") for approximately $5.5 million, based on an estimated December 31, 1997 balance sheet for that business. On June 4, 1998, the Company and Gores entered into a definitive agreement for the Company to sell the real-time business to Gores for $3 million in cash. The reduction in price from that contemplated in the letter of intent reflected operating results during the first quarter of 1998 and differences between the estimated December 31, 1997 balance sheet and the actual balance sheet at March 29, 1998. At the same time the Company entered into the agreement to sell its real-time computer systems business to Gores, the Company entered into a management agreement under which Gores took over management of the real-time computer systems business, retaining any positive cash flow and bearing any negative cash flow, but receiving a management fee of $100,000 per month, which was to be refunded to Encore upon closing of the sale of the real-time computer systems business to Gores. Encore provided a $2 million line of credit to Gores to fund its operation of the real-time computer systems business until the closing. The sale of the real-time computer systems business to Gores was approved by the Company's stockholders on September 11, 1998, and the transaction was completed on January 6, 1999. At the closing of the sale, the Company received $2,750,000 (with the additional $250,000 set off against the purchase price to resolve an alleged breach of indemnity claim) and the parties agreed to resolve shortly after the closing disputed items relating to the sale, including the amounts due to Encore under the management agreement and the line of credit, and certain other indemnity claims by Gores. On August 10, 2000, the Company reached an agreement in principle to resolve such items. In connection with the agreement, Encore and Gores agreed to reduce the principal balance of the receivable by (1) $96,000 relating to an uncollectible note receivable purchased by Gores in the acquisition of the real-time business and (2) $150,000 for expenses incurred in the negotiation of this settlement. As a result, the receivable balance due to Encore was $2,979,000. Page 9 In order to reduce this balance, Gores agreed to make payments on Encore's behalf relating to the closing of certain foreign offices. Such payments included lease termination fees and payment of taxes. During fiscal 1999, Gores paid $35,000 relating to the termination of Encore's Belgium office lease. As a result, the outstanding balance of the receivable was $2,944,000 as of December 31, 1999. Subsequent to December 31, 1999, Gores paid approximately $1,845,000 relating to lease termination costs and a tax settlement. After these payments, the receivable balance amounted to $1,098,000. Gores agreed to make cash payments for the remainder of the receivable balance. In August and October 2000, Encore received payments totaling $500,000 toward the receivable balance. In February 2001, the Company received the remaining $598,000 plus an additional $16,000. D. Accounts Payable and Accrued Liabilities During the three months ended September 30, 2002, the Company paid $260,000 of previously accrued liquidation costs as follows: Legal fees $ 50,000 Stock record keeping 6,000 Gould 201,000 Other 3,000 --------- $ 260,000 ========= The payment to Gould covered administrative services for the period July 1, 1999 through June 30, 2002. Page 10 E. Other Adjustments During the three months and nine months ended September 30, 2002, the Company received $0 and $45,000, respectively, for various refunds and reimbursements of amounts previously paid. F. Litigation Shortly before the Sun Transaction was closed, shareholders of the Company brought a derivative suit in the Delaware Chancery Court against Gould and the Company's then directors, C. David Ferguson, Robert Fedor, Rowland Thomas and Kenneth Fisher. Three similar shareholder suits were also filed and all four suits were consolidated as Civil Action #16044, In Re Encore Computer Corporation Shareholders Litigation. The shareholders filed an amended complaint adding directors Michael Veysey and Thomas Rich as defendants and eliminating the Company as other than a nominal defendant. The defendants moved for summary judgment and that motion was granted on June 16, 2000. Two of the plaintiffs filed a notice of appeal in the Delaware Supreme Court. Although not a party to the litigation, the Company was obligated to indemnify its officers and directors against liability for matters such as those which are the subject of the litigation. On July 6, 2001, the parties reached a proposed settlement that, upon court approval, would have provided for a repurchase by the Company and redistribution to class members of the defendants' common stock holdings in the Company and the individual defendants' resignation from their positions with the Company in favor of the plaintiffs' nominees. At a hearing on October 12, 2001, the court did not grant its approval to the proposed settlement. Attorneys for parties to the lawsuit and for two shareholders who objected to the settlement (the Objectors) reached an agreement to resolve the litigation and the Objectors' contentions. The new settlement agreement, which was signed on July 29, 2002, was approved by the court on October 2, 2002 and became final on November 1, 2002. Under the settlement, the Company will be dissolved; $2.1 million (less certain attorneys' fees and expenses) will be distributed to current shareholders, including the defendant shareholders other than Gould; a fund of up to $100,000 will be set aside for certain claims of former shareholders; the balance of the Company's distributable assets will be distributed to Gould; and all claims would be dismissed and released as to the defendants and their privies. After all of the payments are made pursuant to the settlement, the Company will have no remaining assets and will be dissolved. Gould has agreed to pay, out of its settlement proceeds, any other fees and expenses of the Company relating to the dissolution and liquidation and any claims timely filed by any creditors of the Company and shall also receive any unclaimed portion of the $100,000 fund set aside for the former shareholders. The dissolution and liquidation of the Company have been approved unanimously by the Board of Directors of the Company and by shareholders of the Company, including the Objectors and the defendants, who collectively hold more than 75% of the outstanding common stock of the Company, by a written consent. Page 11 A pro forma statement of net assets in liquidation reflecting the settlement follows: Sept. 30, 2002 -------------- (Pro forma) (In Thousands) Cash and equivalents $2,977 ====== Liabilities Amounts due pursuant to the settlement agreement: Current shareholders other than Gould $2,020 Cash reserve for former shareholders 100 Fees awarded to plaintiffs' and objectors' counsel 80 Gould 777 ------ Total liabilities 2,977 ------ Net assets in liquidation $ -0- ------ Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company has conducted no business operations since December 31, 1998. The Company's financial statements are presented on a liquidation basis. See Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2001. As of September 30, 2002, the amount of each significant component of net assets in liquidation is as follows: Amount (In Thousands) --------------------- Assets Treasury bills $2,862 Money market funds 89 Checking account 26 ------ $2,977 Liabilities Estimated legal costs $ 37 Auditor fees 10 Miscellaneous (record storage, printing, stock record keeping, etc.) 10 ------ $ 57 Page 12 Item 3. Quantitative and Qualitative Disclosures About Market Risk Not applicable. Item 4. Controls and Procedures Our President and Treasurer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures within 90 days of the filing date of this quarterly report, and, based on such evaluation, our President and Treasurer have concluded that these controls and procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of such evaluation. Disclosure controls and procedures are our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our President and Treasurer, as appropriate to allow timely decisions regarding required disclosure. Page 13 PART II OTHER INFORMATION Item 1. Legal Proceedings No legal proceedings were filed against the Company during the quarter ended September 30, 2002. See Note F to Condensed Consolidated Financial Statements for information regarding the settlement of the shareholders' litigation. Item 4. Submission of Matters to a Vote of Security Holders In connection with the settlement of the shareholders' litigation, stockholders holding more than 75% of the outstanding shares of Common Stock executed a written consent approving the dissolution and liquidation of the Company conditioned upon court approval which was obtained on October 2, 2002. The terms of the settlement and matters related to the dissolution and liquidation of the Company are described in an Information Statement filed with the Securities and Exchange Commission which was mailed to the Company's shareholders. Item 5. Other Information In November 1997, shareholders of the Company brought a derivative suit in the Delaware Chancery Court against Gould and the Company's then directors, C. David Ferguson, Robert Fedor, Rowland Thomas and Kenneth Fisher. Three similar shareholder suits were also filed and all four suits were consolidated as Civil Action #16044, In Re Encore Computer Corporation Shareholders Litigation. The shareholders filed an amended complaint adding directors Michael Veysey and Thomas Rich as defendants and eliminating the Company as other than a nominal defendant. The defendants moved to dismiss the lawsuit and that motion was granted on June 16, 2000. Two of the plaintiffs filed a notice of appeal in the Delaware Supreme Court. Although not a party to the litigation, the Company was obligated to indemnify its officers and directors against liability for matters such as those which are the subject of the litigation. On July 6, 2001, the parties reached a proposed settlement that, upon court approval, would have provided for a repurchase by the Company and redistribution to class members of the defendants' common stock holdings in the Company and the individual defendants' resignation from their positions with the Company in favor of the plaintiffs' nominees. At a hearing on October 12, 2001, the court did not grant its approval to the proposed settlement. Attorneys for parties to the lawsuit and for two shareholders who objected to the settlement (the Objectors) reached an agreement to resolve the litigation and the Objectors' contentions. The new settlement agreement, which was signed on July 29, 2002, was approved by the court on October 2, 2002 and became final on November 1, 2002. Under the settlement, the Company will be dissolved; $2.1 million (less certain attorneys' fees and expenses) will be distributed to current shareholders, including the defendant shareholders other than Gould; a fund of up to $100,000 will be set aside for certain claims of former shareholders; the balance of the Page 14 Company's distributable assets will be distributed to Gould; and all claims would be dismissed and released as to the defendants and their privies. After all of the payments are made pursuant to the settlement, the Company will have no remaining assets and will be dissolved. Gould has agreed to pay, out of its settlement proceeds, any other fees and expenses of the Company relating to the dissolution and liquidation and any claims timely filed by any creditors of the Company and shall also receive any unclaimed portion of the $100,000 fund set aside for the former shareholders. The dissolution and liquidation of the Company have been approved unanimously by the Board of Directors of the Company and by shareholders of the Company, including the Objectors and the defendants, who collectively hold more than 75% of the outstanding common stock of the Company, by a written consent. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation S-K The following exhibits are filed as part of this report: (3) Articles of Incorporation and Bylaws: *(a) Certificate of Incorporation of the Company dated May 2, 1983 *(b) Certificate of Amendment of Certificate of Incorporation of the Company dated July 12, 1983 *(c) Certificate of Amendment of Certificate of Incorporation of the Company dated January 13, 1984 *(d) Certificate of Amendment of Certificate of Incorporation of the Company dated April 1, 1984 *(e) Certificate of Amendment of Certificate of Incorporation of the Company dated February 8, 1985 *(f) Certificate of Amendment of Certificate of Incorporation of the Company dated April 10, 1987 *(g) Certificate of Amendment of Certificate of Incorporation of the Company dated May 31, 1990 *(h) Certificate of Amendment of Certificate of Incorporation of the Company dated June 18, 1991 *(i) Certificate of Amendment of Certificate of Incorporation of the Company dated September 30, 1993 *(j) Certificate of Amendment of Certificate of Incorporation of the Company dated August 8, 1995 *(k) Bylaws of the Company *(4) Instruments defining the Rights of Encore's Equity Security Holders: The rights of Encore's equity security holders are defined in Article 1 of the Company's Bylaws (see Exhibit 3(k)). Page 15 (10) Material Contracts: **(a) Information Statement and Notice of Pendency of Class Action, Proposed Settlement of Class Action, and Settlement hearing. **(b) Stipulation and Agreement of Compromise, Settlement and Release dated as of July 29, 2002. (99) Additional Exhibits: (1) President's certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2) Treasurer's certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended September 30, 2002. * Incorporated by reference to the corresponding exhibit number of the Registrant's Current Report on Form 10-Q/A for the quarter ended June 30, 2002. ** Incorporated by reference to the Registrant's Schedule 13E-3 filed on August 30, 2002. Page 16 ENCORE COMPUTER CORPORATION Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Encore Computer Corporation Date: November 12, 2002 /s/ Michael C. Veysey /s/ Thomas N. Rich -------------------------- ------------------------------------ Michael C. Veysey Thomas N. Rich President Treasurer (Principal Accounting Officer) Page 17 CERTIFICATION ACCOMPANYING PERIODIC REPORT PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. 1350) I, Michael C. Veysey, President, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Encore Computer Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and Page 18 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 12, 2002 /s/ Michael C. Veysey --------------------------------- Michael C. Veysey President Page 19 CERTIFICATION ACCOMPANYING PERIODIC REPORT PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. 1350) I, Thomas N. Rich, Treasurer (Principal Accounting Officer), certify that: 1. I have reviewed this quarterly report on Form 10-Q of Encore Computer Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and Page 20 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 12, 2002 /s/ Thomas N. Rich --------------------------------------- Thomas N. Rich Treasurer (Principal Accounting Officer) Page 21 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION ----------- ----------- 3 Articles of Incorporation and Bylaws: *(a) Certificate of Incorporation of the Company dated May 2, 1983 *(b) Certificate of Amendment of Certificate of Incorporation of the Company dated July 12, 1983 *(c) Certificate of Amendment of Certificate of Incorporation of the Company dated January 13, 1984 *(d) Certificate of Amendment of Certificate of Incorporation of the Company dated April 1, 1984 *(e) Certificate of Amendment of Certificate of Incorporation of the Company dated February 8, 1985 *(f) Certificate of Amendment of Certificate of Incorporation of the Company dated April 10, 1987 *(g) Certificate of Amendment of Certificate of Incorporation of the Company dated May 31, 1990 *(h) Certificate of Amendment of Certificate of Incorporation of the Company dated June 18, 1991 *(i) Certificate of Amendment of Certificate of Incorporation of the Company dated September 30, 1993 *(j) Certificate of Amendment of Certificate of Incorporation of the Company dated August 8, 1995 *(k) By-laws of the Company *(4) Instruments defining the Rights of Encore's Equity Security Holders: The rights of Encore's equity security holders are defined in Article 1 of the Company's Bylaws (see Exhibit 3(k)). (10) Material Contracts: **(a) Information Statement and Notice of Pendency of Class Action, Proposed Settlement of Class Action, and Settlement hearing. **(b) Stipulation and Agreement of Compromise, Settlement and Release dated as of July 29, 2002. (99) Additional Exhibits: (1) President's certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2) Treasurer's certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. -------------------- * Incorporated by reference to the corresponding exhibit number of the Registrant's Current Report on Form 10-Q/A for the quarter ended June 30, 2002. ** Incorporated by reference to the Registrant's Schedule 13E-3 filed on August 30, 2002.

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