SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 1) (1)
HEALTH SYSTEMS DESIGN CORPORATION
(Name of Issuer)
Common Stock, $.001 par value
(Title of Class of Securities)
421964107
(CUSIP Number)
Helen R. Franco, Esq.
Edwards & Angell, LLP
250 Royal Palm Way, Suite 300
Palm Beach, Florida 33480
(561) 833-7700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communic ations)
August 15, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[_]
Note. Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Rule 13d-7(b) for other parties to whom copies are to be sent.
(Continued on following pages)
---------------------------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
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Cusip No. 421964107 Schedule 13D
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--------- ---------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITY ONLY)
AristaData, Inc.
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [x]
(b) [_]
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
SEC USE ONLY
3
--------- ---------------------------------------------------------------------
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4 SOURCE OF FUNDS*
WC
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
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--------- ---------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
New York
--------- ---------------------------------------------------------------------
-------------------------------- ------ ---------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
------ ---------------------------------------
------ ---------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY EACH
------ ---------------------------------------
------ ---------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
0
PERSON
------ ---------------------------------------
------ ---------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
-------------------------------- ------ ---------------------------------------
--------- ---------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
0
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12
CERTAIN SHARES*
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
0.00%
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
--------- ---------------------------------------------------------------------
<PAGE>
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Cusip No. 421964107 Schedule 13D
---------------------------------------
--------- ---------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITY ONLY)
David R. Caplan
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [x]
(b) [_]
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
SEC USE ONLY
3
--------- ---------------------------------------------------------------------
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4 SOURCE OF FUNDS*
PF
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
U.S.A.
--------- ---------------------------------------------------------------------
-------------------------------- ------ ---------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
------ ---------------------------------------
------ ---------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY EACH
------ ---------------------------------------
------ ---------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
0
PERSON
------ ---------------------------------------
------ ---------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
334,000
-------------------------------- ------ ---------------------------------------
--------- ---------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
334,000
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12
CERTAIN SHARES*
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
4.94%
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
--------- ---------------------------------------------------------------------
<PAGE>
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Cusip No. 421964107 Schedule 13D
---------------------------------------
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITY ONLY)
Maria B. Caplan
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a)
(b)
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
SEC USE ONLY
3
--------- ---------------------------------------------------------------------
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4 SOURCE OF FUNDS*
PF
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
5 TO ITEMS 2(d) OR 2(e)
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
U.S.A.
--------- ---------------------------------------------------------------------
-------------------------------- ------ ---------------------------------------
7 SOLE VOTING POWER
NUMBER OF 334,000
SHARES
------ ---------------------------------------
------ ---------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY EACH
------ ----------------------------------------
------ ----------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
0
PERSON
------ ---------------------------------------
------ ---------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
334,000
-------------------------------- ------ ---------------------------------------
--------- ---------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
334,000
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12
CERTAIN SHARES*
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
4.94%
--------- ---------------------------------------------------------------------
--------- ---------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
IN
--------- ---------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
This Amendment No. 1 to Schedule 13D ("Amendment No. 1") amends and supplements
the Schedule 13D filed with the Securities and Exchange Commission on June 27,
2000 (the "Original 13D") on behalf of AristaData, Inc., David R. Caplan and
Maria B. Caplan (individually, a "Reporting Person," and collectively, the
"Reporting Persons"). Capitalized terms used in this Amendment No. 1 without
definition shall have the respective meanings assigned to them in the Original
13D.
Item 4. Purpose of Transaction.
The Reporting Persons acquired the Common Stock for investment purposes;
accordingly, the Reporting Persons may determine to buy additional shares of
Common Stock, or to sell any or all of their shares of Common Stock, at any
time.
The Reporting Persons have believed for some time that the public trading
price of the Common Stock does not reflect either the intrinsic or strategic
value of HSDC. The Reporting Persons have been major stockholders of HSDC for
some period of time and have from time to time had discussions with senior HSDC
officers regarding possible transactions that might enhance stockholder value.
However, no such discussions have occurred for several months, and HSDC has
informed Mr. Caplan (and has reported in its public filings) that HSDC has
retained BankBoston Robertson Stephens & Co. ("Robertson Stephens") to represent
HSDC in connection with any potential transactions.
On July 5, 2000, the Reporting Persons wrote to HSDC expressing their
dissatisfaction with HSDC's failure to address their concerns and requesting
that HSDC (i) announce the activities in progress that HSDC and Robertson
Stephens have undertaken; (ii) expand the Board of Directors to include a
majority of outside, unaffiliated directors compensated principally by stock
options; (iii) better align the interests of the President with those of HSDC's
stockholders by increasing the equity portion of his compensation; and (iv)
provide to the Reporting Persons complete information concerning the financial
arrangements between HSDC and each member of the Board of Directors and their
respective affiliates.
On July 24, 2000, the Reporting Persons wrote a second letter expressing
their dismay at the lack of response and on July 31, 2000, counsel to the
Reporting Persons advised HSDC that the Reporting Persons have determined that
it may be in their best interests to reduce their combined holdings in HSDC and
offered HSDC the opportunity to acquire some or all of the shares held by the
Reporting Persons.
In a letter dated August 4, 2000, HSDC's counsel responded to counsel for
the Reporting Persons asserting that it would not be appropriate for HSDC to
selectively disclose information concerning its efforts with Robertson Stephens
and that the Board of Directors would not review the President's compensation
arrangements because there was no basis for the Board to conclude that the
President has obstructed HSDC's efforts to explore strategic alternatives. HSDC
counsel also noted that HSDC was not currently in a position to repurchase
shares of Common Stock held by the Reporting Persons.
After careful consideration of the situation, the Reporting Persons have
determined that it is in their best interest at this time to reduce their
holdings and, therefore, have begun to sell shares of Common Stock. See Item 5
below. However, the Reporting Persons will continue to evaluate their position
and the position and performance of HSDC and may at any time determine to
discontinue selling the Common Stock or acquire more Common Stock.
Item 5. Interest in Securities of the Issuer.
(a) The aggregate number and percentage of the Common Stock (based upon
information set forth in HSDC's most recent Form 10-Q as to the number of
outstanding shares of common stock at July 31, 2000) beneficially owned by each
Reporting Person is as follows:
No. of Shares Percentage
AristaData, Inc. 0 0.00%
David R. Caplan 334,000* 4.94%*
Maria B. Caplan 334,000 4.94%
* Represents 334,000 shares held by Ms. Caplan, with respect to which Mr.
Caplan shares dispositive power with Ms. Caplan.
The Reporting Persons hold as a group, within the meaning of Section
13(d)(3) of the Act, an aggregate of 334,000 shares of Common Stock, which
represents 4.94% of the total shares of Common Stock of HSDC issued and
outstanding as of July 31, 2000. None of the Reporting Persons has a present
right to acquire any other shares of Common Stock.
(b) Ms. Caplan has sole voting power and shares dispositive power with Mr.
Caplan with respect to 334,000 shares of Common Stock.
(c) During the last sixty (60) days, the transactions involving the Common
Stock effected by any Reporting Person over NASDAQ were the purchase of (i) 200
shares of Common Stock by Mr. Caplan at $3.56 per share on June 22, 2000, (ii)
8,500 shares of Common stock by AristaData at a price of $4.06 per share on June
26, 2000 and (iii) an aggregate of 26,600 shares of Common Stock by AristaData
at an average price of $3.94 per share in multiple transactions during the
period from July 5 through 28, 2000; and the sale on August 15, 2000 of 35,100
shares of Common Stock by AristaData at an average price of $1.61 per share and
2,900 shares of Common Stock by Mr. Caplan at an average price of $1.78 per
share.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds of sale of, any of the
securities listed in Item 5(a).
(e) Not applicable.
Item 7. Material to be Filed as Exhibits.
Exhibit II Letter dated July 5, 2000 from AristaData, Inc.,
David R. Caplan and Maria B. Caplan to the Board of
Directors of Health Systems Design Corporation.
Exhibit III Letter dated July 24, 2000 from AristaData, Inc. to
the Board of Directors of Health Systems Design
Corporation.
Exhibit IV Letter dated July 31, 2000 from Edwards & Angell,
LLP, counsel to AristaData, Inc., to Health Systems
Design Corporation.
Exhibit V Letter dated August 4, 2000 from Gibson, Dunn &
Crutcher LLP, counsel to Health Systems Design
Corporation, to Edwards & Angell, LLP, counsel to
AristaData, Inc.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of knowledge and belief of the
Reporting Persons, each Reporting Person certifies that the information set
forth in this statement is true, complete and correct.
Dated: August 15, 2000 ARISTADATA, INC.
By:/s/David R. Caplan
---------------------------------
David R. Caplan, President
/s/David R. Caplan
---------------------------------
David R. Caplan
/s/Maria B. Caplan
---------------------------------
Maria B. Caplan
<PAGE>
Exhibit II
[LETTERHEAD OF ARISTADATA, INC.]
July 5, 2000
Board of Directors
Health Systems Design Corporation
1111 Broadway, Suite 1800
Oakland, CA 94607
Attn: Richard C. Auger, Chairman
Dear Rich:
As you are aware, AristaData, Inc., David R. Caplan and Maria B. Caplan
(collectively, the "AristaData Holders") have filed a Schedule 13-D reflecting
their collective ownership of more than five percent (5%) or the outstanding
stock of Health Systems Design Corporation (the "Company"). As you have been
previously advised, the AristaData Holders are disappointed and frustrated with
the progress of the Company in restoring the profitability and growth of its
business and in pursuing strategic alternatives for enhancing stockholder value.
In due course, we will be making a formal request for a list of the stockholders
in order to be in a position to communicate directly with them concerning
matters of interest to the stockholders and the progress of the Company in
taking actions to enhance stockholder value.
In the meantime, the AristaData Holders request that the Company take the
following actions:
1. The Company should make a public announcement concerning the activities
in progress which the Company and its financial advisor, BankBoston Robertson
Stephens & Co., have made toward evaluating the Company's strategic alternatives
for enhancing stockholder value. It has been over seven months since Robertson
Stephens was engaged and no apparent progress has been made on this important
objective.
2. The Company should expand the Board of Directors to include a majority
of outside, unaffiliated directors, each of whom would be compensated
principally by stock options. The nominees should be persons who have experience
in the industry and markets in which the Company participates, as well as with
senior management of successful companies and with corporate finance and M&A
transactions.
3. The Company should immediately review its compensation arrangement with
its President. Notwithstanding the statements in the Company's Proxy Statement,
it does not appear that the compensation arrangement with the President is
designed to align the interests of the President with those of the stockholders,
since the equity incentive portion of such compensation arrangement is
immaterial in relation to the fixed cash compensation portion. In addition, the
fixed cash compensation portion seems out of line for a company of the size and
with the financial performance of Health Systems Design Corporation. We believe
that the implementation, and certainly the continuation, of this arrangement may
be a breach of the directors' duties to the Company.
In addition, we would like you to send us copies of all written agreements and a
summary of all oral arrangements between the Company and its CEO and his
affiliates, as well as the material (comparative data, studies and analyses from
compensation consultants, etc.) examined and relied upon by the Compensation
Committee in connection with its deliberations concerning the arrangements with
the current CEO, as well as minutes of the Compensation Committee meeting at
which this matter was considered and discussed.
4. We are also concerned about other financial arrangements between the
Company and members of its Board of Directors and their affiliates. Please
provide us with complete information concerning the arrangements with Mackowski
& Shepler, including a description of the nature and extent of the services
provided during the last fiscal year, as well as any ongoing financial
arrangements with Mackowski & Shepler, Matthew Mackowski, Christopher Herron,
Catherine Roth and yourself.
We believe that we are speaking on behalf of all of the outside stockholders of
the Company in expressing our concerns regarding the Company's recent progress
and performance. We trust that the directors will be responsive to these
concerns.
Very truly yours,
ARISTADATA, INC.
By:/s/David R. Caplan
---------------------------------
David R. Caplan, President
/s/Maria B. Caplan
---------------------------------
Maria R. Caplan
/s/David R. Caplan
---------------------------------
David R. Caplan
<PAGE>
Exhibit III
[LETTERHEAD OF ARISTADATA, INC.]
July 24, 2000
Board of Directors
Health Systems Design Corporation
1111 Broadway, Suite 1800
Oakland, CA 94607
Attn: Richard C. Auger, Chairman
Dear Rich:
We are dismayed that we have not yet received a response to our letter dated,
July 5, 2000, which requested you to provide certain information to us and for
the Board of Directors of Health Systems Design Corporation to take certain
actions designed to accelerate the process of enhancing stockholder value.
We believe we are acting in the best interests of the stockholders in pressing
for these matters at this critical juncture of HSDC's development and are
concerned that the current Board and senior management are not taking the
appropriate actions under the circumstances. We are especially frustrated that
you have not taken the time to respond to the legitimate questions and concerns
of one of HSDC's largest independent stockholders.
We await your response.
Very truly yours,
ARISTADATA, INC.
By:/s/David R. Caplan
--------------------------------------
David R. Caplan, President
<PAGE>
Exhibit IV
[LETTERHEAD OF EDWARDS & ANGELL, LLP]
July 31, 2000
Health Systems Design Corporation
1111 Broadway, Suite 1800
Oakland, CA 94607
Attn: Arthur M. Southam, M.D., President and CEO
Dear Dr. Southam:
We are counsel for AristaData, Inc., David Caplan and Maria Caplan (the
"AristaData Group") in connection with the Group's investment in Health Systems
Design Corporation ("HSDC").
It is obvious to the AristaData Group from the lack of response from HSDC to the
Group's prior correspondence that you and the Board of Directors are not
concerned with the well being of the stockholders.
In light of the unwillingness, and perhaps inability, of management to explain
itself properly to the stockholders, the AristaData Group has determined that it
may be in their best interests to substantially reduce, if not completely
dispose of, their combined holdings in HSDC. If the company is interested in
acquiring some or all of these shares, you should have the company's counsel
contact me.
While the AristaData Group has not made a definitive decision on the matter, the
Group is likely to decide upon a definitive course of action in the next couple
of days. If so, the Group will commence selling promptly, with a suitable
amendment to its Schedule 13-D.
We look forward to hearing from you.
Very truly yours,
/s/Jonathan E. Cole
--------------------------------------
Jonathan E. Cole
JEC:lvm
cc: David and Maria Caplan
<PAGE>
Exhibit V
(LETTERHEAD OF GIBSON, DUNN & CRUTCHER LLP]
August 4, 2000
VIA FACSIMILE
Jonathan E. Cole
Edwards & Angell LLP
250 Royal Palm Way, Suite 300
Palm Beach, FL 33490
Re: Health Systems Design Corp.
Dear Mr. Cole:
We are counsel to Health Systems Design Corp. ("HSD"). Your letter of July
31 has been referred to us for reply.
HSD takes strong exception to your assertion that the Board is "not
concerned with the well being of the stockholders." To the extent that your
client may wish that HSD consummate a strategic merger or other business
combination in order to enhance shareholder value, that wish is shared by HSD's
Board. Indeed, the Board, will the assistance of outstanding outside
professionals, has endeavored for the last several months to accomplish that
goal, unfortunately without success. Without discussing confidential
information, which the Company cannot do with individual shareholders, it is
clear that market conditions have affected the Company's ability to consummate a
transaction at this time.
The prior letter from your client dated July 5 made demands that the
Company does not believe are appropriate or constructive. In particular, it is
not appropriate for the Company to make selective disclosure of information
about its continuing efforts with Robertson Stephens & Co., both because it is
premature and because it would possibly jeopardize on-going discussions.
Similarly, there is no basis for the Board to conclude that the Company's
President has in any way attempted to obstruct the Company's efforts to explore
strategic alternatives, and therefore there is no basis for the Board to revisit
his compensation arrangements. As for your client's other demands, they do not
appear to set forth a proper purpose for the Company to provide the documents
and information requested.
We regret your client's decision to commence selling its holdings. We are
not in a position to re-purchase your client's shares at this time. While we do
not require a reply to this letter, please direct any future correspondence to
the undersigned.
Very truly yours,
/s/Jonathan C. Dickey
--------------------------------------
Jonathan C. Dickey
