UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Computer Sciences Corporation
(Name of Issuer)
Common Stock, Par Value $1.00 Per Share
(Title of Class of Securities)
205363104
(CUSIP Number)
Copy to:
Robert C. Canfield, Esq. John F. Marvin, Esq.
DST Systems, Inc. Watson & Marshall, L.C.
1055 Broadway, 9th Floor 1010 Grand Avenue, Suite 500
Kansas City, Missouri 64105 Kansas City, Missouri 64106
(816) 435-1000 (816) 842-3132
FAX: (816) 435-8630 FAX: (816) 842-1247
(Name, Address and Telephone Number of Persons Authorized
to receive Notices and Communications)
August 1, 1996
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
SCHEDULE 13D
1. Name Of Reporting Person
S.S. or I.R.S. Identification No. Of Above Person:
DST Systems, Inc.
2. Check The Appropriate Box If A Member Of A Group: (a) [ ] (b) [ ]
3. SEC Use Only
4. Source of Funds: OO
5. Check Box If Disclosure Of Legal Proceedings Is Required Pursuant To Items
2(d) or 2(e) [ ]
6. Citizenship Or Place Of Organization: Delaware
7. Sole Voting Power: 4,324,571
8. Shared Voting Power: --
9. Sole Dispositive Power: 4,324,571
10. Shared Dispositive Power: --
11. Aggregate Amount Beneficially Owned By Each Reporting Person: 4,324.571
12. Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares [ ]
13. Percent Of Class Represented By Amount In Row (11) 5.73%
14. Type Of Reporting Person: CO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
This Schedule 13D is filed on behalf of DST Systems, Inc., a Delaware
corporation ("DST") to reflect the recent acquisition of the common stock of
Computer Sciences Corporation, a Nevada corporation ("Issuer"). DST received
the stock as a result of a merger between The Continuum Company, Inc., a
Delaware corporation ("Continuum"), and a wholly-owned subsidiary of Issuer
(the "Merger").
Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D relates is the
CSC Common Stock, $1.00 par value per share ("CSC Common Stock"), of Issuer.
The principal executive offices of Issuer are located at 1200 East Grand
Avenue, El Segundo, California 90245.
Item 2. Identity and Background.
This statement is being filed on behalf of DST. The principal executive
office of DST is located at 1055 Broadway, Kansas City, Missouri 64105.
DST provides sophisticated information processing and computer software
services and products, primarily to mutual funds, insurance providers, banks
and other financial services organizations.
Kansas City Southern Industries, Inc., a Delaware corporation ("KCSI")
owns approximately 40 percent of the outstanding common stock of DST. In
addition, Messrs. A. Edward Allinson and Michael G. Fitt, who are directors of
DST, are also directors of KCSI. DST has not entered into any agreements with
respect to its management or corporate policies with KCSI. The existence of
cumulative voting and the exemption of KCSI from DST's Stockholders' Rights
Plan provide KCSI with the potential to effectively control the corporate
governance of DST. However, KCSI disclaims control of DST and beneficial
ownership of CSC Common Stock as a result of its stock ownership in DST.
Neither DST nor any of its executive officers or directors hereinafter
listed has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) nor been a party to a
civil proceeding of a judicial or administrative body resulting in a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Each of the executive officers and directors whose names and business
addresses appear below is a U.S. citizen and is principally employed by DST or
its affiliates in the capacities shown, except as indicated otherwise. The
business address of such officers and directors of DST is 1055 Broadway, Kansas
City, Missouri 64105.
DST Executive Officers
Name Office
Thomas A. McDonnell President/Chief Executive Officer
Thomas A. McCullough Executive Vice President
Morton B. Comer Senior Vice President
Robert C. Canfield Senior Vice President/General Counsel/Secretary
James P. Horan Chief Information Officer
Kenneth V. Hager Vice President/Chief Financial Officer/Treasurer
Charles W. Schellhorn President, Output Technologies, Inc.
Michael A. Waterford Group Vice President
Robert L. Tritt Group Vice President
John W. McBride Group Vice President
J. Philip Kirk, Jr. Vice President
Joan J. Horan Vice President
John T. O'Neal Vice President
James H. Reinert Vice President
John J. Faucett Controller
Michael Winn DST International Limited, United Kingdom -
Manager, not a U.S. citizen
DST Directors
Name Office
Thomas A. McDonnell President/Chief Executive Officer of
DST Systems, Inc.
Thomas A. McCullough Executive Vice President of DST Systems, Inc.
A. Edward Allinson Chairman of the Board of Boston Financial Data
Services. Executive Vice President of State
Street Bank and Trust Company
Michael G. Fitt Retired
M. Jeannine Strandjord Senior Vice President and Treasurer of Sprint
Corporation
William C. Nelson Chairman of the Board, Chief Executive Officer
and President of Boatmen's First National
Bank of Kansas City
Item 3. Source and Amount of Funds or Other Consideration.
DST acquired CSC Common Stock as a result of the Merger. The Merger is
described in the proxy statement/prospectus contained in the Form S-4, as
amended, filed by Issuer as of June 10, 1996, and in the Form 8-K filed by
Issuer as of August 1, 1996.
Item 4. Purpose of Transaction.
DST holds CSC Common Stock for investment purposes, but, subject to the
agreements described in Item 6 of this Schedule 13D, it reserves the right to
exercise any and all rights and privileges as a stockholder of Issuer in a
manner consistent with its own best interests, to purchase or sell CSC Common
Stock or other securities of Issuer, and to communicate with management,
stockholders of Issuer or others and/or to participate, alone or with others,
in various plans, proposals or transactions respecting Issuer or its
securities.
Except as set forth in this Schedule 13D, DST has no present plans or
intentions which relate to or would result in any of the events described in
paragraphs (a) through (j) of Item 4 of the instructions to Schedule 13D.
However, as previously noted, DST reserves the right to change its intentions
with respect to such matters.
Item 5. Interest in Securities of the Issuer.
With respect to DST's holdings of CSC Common Stock, the responses to Items
7, 8, 9, 10, 11 and 13 of the inside cover page of this Schedule 13D are hereby
incorporated by reference in response to this Item 5. DST acquired CSC Common
Stock as a result of the Merger and of the agreements described in Item 6 of
this Schedule 13D.
Item 6. Contracts, Arrangements, Understandings or Relationships with
respect to Securities of the Issuer.
There are no contracts, arrangements, understandings or relationships
among the persons named in Item 2 with respect to CSC Common Stock.
By letter dated April 28, 1996 to Issuer, DST agreed that it would not
transfer, sell or dispose of the CSC Common Stock received in the Merger except
(i) pursuant to an effective registration statement under the Securities Act of
1933, as amended ("Securities Act") or (ii) as permitted by, and in accordance
with, Rule 145, if applicable, or another applicable exemption under the
Securities Act. DST further agreed, except in certain circumstances, not to
sell the CSC Common Stock received in the Merger or otherwise reduce its risk
until after such time as financial results reflecting at least 30 days of post-
Merger combined operations of Issuer and Continuum have been published by
Issuer. DST further agreed to deliver to Continuum's counsel, at a reasonably
requested time and for purposes of a tax opinion, a certificate that it has no
plan or intention as of the date of the certificate of disposing of CSC Common
Stock. DST made certain acknowledgments respecting the CSC Common Stock
received in the Merger including without limitation the fact that the share
certificates would bear a restrictive legend.
By letter dated April 28, 1996 to DST, Issuer agreed in part that, subject
to certain conditions, the registration rights of DST with respect to shares of
Continuum DST was granted pursuant to Section 11 of the Agreement dated
September 30, 1993, among Continuum, Continuum Acquisition, Inc. and Vantage
Computer Systems, Inc. will be assumed by Issuer and will apply to all of the
shares of CSC Common Stock issued to DST in the Merger. DST's registration
rights will entitle DST, on one occasion, to require Issuer to register some or
all (but not less than 50,000) of DST's shares of CSC Common Stock for resale
under the Securities Act, subject to the right of Issuer to defer registration
under certain circumstances.
Item 7. Material to be Filed as Exhibits.
The following was referenced in Item 6 to this Schedule 13D and is filed
herewith as an exhibit to this Schedule 13D:
99.1 DST's letter to Issuer dated April 28, 1996.
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in the statement is true,
complete and correct.
Dated as of August 9, 1996.
DST SYSTEMS, INC.
By: /s/ Robert C. Canfield
Robert C. Canfield
Senior Vice President,
General Counsel and Secretary
INDEX TO EXHIBITS
Exhibit No. Description
99.1 DST letter to Issuer dated April 28, 1996
EXHIBIT 99.1
EXECUTION COPY
DST SYSTEMS, INC.
1055 Broadway
Kansas City, Missouri 64105
April 28, 1996
Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
Dear Sirs:
Reference is made to the provisions of the Agreement and Plan of Merger,
dated as of April 28, 1996 (together with any amendments thereto, the "Merger
Agreement"), among The Continuum Company, Inc., a Delaware corporation (the
"Company"), Computer Sciences Corporation, a Nevada corporation ("Parent"), and
Continental Acquisition, Inc., a Delaware corporation and a wholly-owned
subsidiary of Parent ("Merger Sub"), pursuant to which Merger Sub will be
merged with and into the Company, with the Company continuing as the surviving
corporation (the "Merger"). This letter constitutes the undertakings of the
undersigned contemplated by the Merger Agreement.
DST Systems, Inc., a Delaware corporation ("DST"), understands that it may
be deemed to be an "affiliate" of the Company, as such term is defined for
purposes of Rule 145 ("Rule 145") promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), and that the transferability of the shares
of common stock, par value $1.00 per share, of Parent (the "Parent Shares")
which DST will receive upon the consummation of the Merger in exchange for its
shares of common stock of the Company (the "Company Shares") is restricted.
Nothing herein shall be construed as an admission that DST is an affiliate.
DST hereby represents, warrants and covenants to Parent that:
(a) DST will not transfer, sell or otherwise dispose of any of the
Parent Shares except (i) pursuant to an effective registration statement under
the Securities Act, or (ii) as permitted by, and in accordance with, Rule 145,
if applicable, or another applicable exemption under the Securities Act; and
(b) DST will not (i) transfer, sell or otherwise dispose of any
Company Shares prior to the earlier of (x) the termination of the Merger
Agreement, (y) upon the filing of a Certificate of Merger with the Secretary of
State of Delaware or (z) September 30, 1996 or (ii) if the Merger is
consummated, sell or otherwise reduce its risk (within the meaning of the
Securities and Exchange Commission's Financial Reporting Release No. 1.,
"Codification of Financial Reporting Policies," Section 201.01 [47 F. R. 21028]
(May 17, 1982) with respect to any Parent Shares until after such time (the
"Delivery Time") as financial results reflecting at least 30 days of post-
Merger combined operations of Parent and the Company have been published by
Parent, except as permitted by Staff Accounting Bulletin No. 76 issued by the
Securities and Exchange Commission; and
(c) DST shall execute and deliver to Vinson & Elkins, L.L.P., counsel
to the Company, and to the Company (with a copy to Parent), a certificate
stating that as of the date of the certificate DST has no plan or intention of
disposing of the Parent Shares to be received in the Merger, such certificate
to be delivered at such time or times as may be reasonably requested by such
law firm or the Company, as the case may be, in connection with such law firm's
delivery of a tax opinion with respect to the transactions contemplated by the
Merger Agreement.
DST hereby acknowledges that, except as otherwise provided in the Merger
Agreement and the Letter Agreement dated April 28, 1996 between DST and Parent
regarding registration rights, Parent is under no obligation to register the
sale, transfer, pledge or other disposition of the Parent Shares or to take any
other action necessary for the purpose of making an exemption from registration
available.
DST understands that Parent will issue stop transfer instructions to its
transfer agents with respect to the Parent Shares and that a restrictive legend
will be placed on the certificates delivered to it evidencing the Parent Shares
in substantially the following form:
"This certificate and the shares represented hereby have been issued
pursuant to a transaction governed by Rule 145 ("Rule 145") promulgated
under the Securities Act of 1933, as amended (the "Securities Act"), and
may not be sold or otherwise disposed of unless registered under the
Securities Act pursuant to a Registration Statement in effect at the time
or unless the proposed sale or disposition can be made in compliance with
Rule 145 or without registration in reliance on another exemption
therefrom. Reference is made to that certain letter agreement, dated
April 28 , 1996, between the Holder and the Issuer, a copy of which is on
file in the principal office of the Issuer which contains further
restrictions on the transferability of this certificate and the shares
represented hereby."
The term Parent Shares as used in this letter shall mean and include not
only the common stock of Parent as currently constituted, but also any other
stock which may be issued in exchange for, in lieu of, or in addition to, all
or any part of such Parent Shares.
DST hereby acknowledges that the receipt of this letter by Parent is an
inducement and a condition to Parent's obligation to consummate the Merger
under the Merger Agreement and that DST understands the requirements of this
letter and the limitations imposed upon the transfer, sale or other disposition
of the Company Shares and the Parent Shares.
Very truly yours,
DST Systems, Inc.
By: /s/ Thomas A. McDonnell
Name: Thomas A. McDonnell
Title: President and CEO
