SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)*
COMPUTER TASK GROUP, INCORPORATED
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $.01 PER SHARE
205477 10 2
(CUSIP NUMBER)
PETER P. RADETICH, ESQ.
GENERAL COUNSEL AND SECRETARY
COMPUTER TASK GROUP, INCORPORATED
800 DELAWARE AVENUE
BUFFALO, NEW YORK 14209
TEL. 716-882-8000
FAX. 716-887-7370
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS)
OCTOBER 29, 1999
(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 Sections 240.13d- 1(e), 240.13d-1(f) or 240.13d-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 Section 240.13d-7(b) for
other parties to whom copies are to be sent.
* 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>
SCHEDULE 13D
CUSIP No. 205477102
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person:
Computer Task Group, Incorporated Stock Employee Compensation Trust
Thomas R. Beecher, Trustee
I.R.S. Id. No. 16-1453664
2. Check the Appropriate Box if a Member of a Group (a) [ ] (b) [ ]
3. SEC Use Only:
4. Source of Funds: SC
5. Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ].
6. Citizenship or Place of Organization: New York
7. Sole Voting Power: 4,571,139
8. Shared Voting Power: -0-
9. Sole Dispositive Power: -0-
10. Shared Dispositive Power: 4,571,139
11. Aggregate Amount Beneficially Owned by Each Reporting Person: 4,571,139
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
13. Percent of Class Represented by Amount in Row (11): 21.89
14. Type of Reporting Person: EP, 00
<PAGE>
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER.
Item 1 is hereby amended and restated as follows:
This amendment no. 5 ("Amendment No. 5") amends the statement on
Schedule 13D (the "Statement") filed on May 12, 1994 with the Securities and
Exchange Commission (the "SEC"), as amended by Amendment No. 1 filed with the
SEC on December 14, 1994, Amendment No. 2 filed with the SEC on August 26, 1997,
Amendment No. 3 filed with the SEC on May 21, 1998 ("Amendment No.3") and
Amendment No. 4 filed with the SEC on May 21, 1999 ("Amendment No. 4") by the
person named in Item 2 of the Statement relating to the Common Stock, $.01 par
value (the "Common Stock") of Computer Task Group, Incorporated, a New York
corporation (the "Issuer" or "CTG"). The principal executive offices of the
Issuer are located at 800 Delaware Avenue, Buffalo, New York 14209.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is hereby amended and restated as follows:
Effective May 3, 1994, (a) the Issuer and the Trustee, as trustee of
the Trust, entered into a trust agreement creating the Trust (the "Trust
Agreement"); (b) the Trust borrowed $13,400,000 from the Issuer pursuant to the
terms of a Promissory Note (the "Original Note"); (c) the Trust purchased an
aggregate of 1,570,200 shares of the Issuer's Common Stock (the "Original
Shares") for $13,346,700 ($8.50 per Original Share) in privately negotiated
transactions from two unrelated third parties; and (d) the Trust pledged the
Original Shares to the Issuer as collateral for the Original Note. The Original
Note bears interest at a rate equal to the "prime" rate of interest charged from
time to time by Manufacturers and Traders Trust Company and is payable in
quarterly installments through April 1, 2004.
Effective December 7, 1994, (a) the Trust borrowed $1,481,200 from the
Issuer pursuant to the terms of a promissory note (the "Second Note"); (b) the
Trust purchased an aggregate of 200,000 shares of the Issuer's Common Stock (the
"Second Shares") for $1,481,200 ($7.406 per Second Share) from International
Business Machines Corporation in a privately negotiated transaction; and (c) the
Trust pledged the Second Shares to the Issuer as collateral for the Second Note.
The Second Note bears interest at a rate equal to the "prime" rate of interest
charged from time to time by Manufacturers and Traders Trust Company and is
payable in quarterly installments through October 1, 2004.
Effective March 21, 1997, (a) the Trust borrowed $7,113,521.00 from the
Issuer pursuant to the terms of a promissory note (the "Third Note"); (b) the
Trust used the borrowed funds to acquire shares of the Issuer in the
transactions described in Amendment No. 3 (the "Third Shares"); and (c) the
Trust pledged the Third Shares to the Issuer as collateral for the Third Note.
The Third Note bears interest at a rate equal to the "prime" rate of interest
charged from time to time by Manufacturers and Traders Trust Company and is
payable in quarterly installments through July 1, 2007.
Effective October 29, 1997, (a) the Trust entered into a promissory
note with the Issuer permitting it to borrow up to $65,000,000 (the "Fourth
Note"); (b) the Trust used funds borrowed under the Fourth Note to acquire
shares of the Issuer in the transactions described in Amendment No. 4 and below
(the "Fourth Shares"); and (c) the Trust pledged the Fourth Shares to the Issuer
as collateral for the Fourth Note. The Fourth Note is a Demand Grid Note that
bears interest at a rate equal to the "prime" rate of interest charged from time
to time by Manufacturers and Traders Trust Company and is payable on demand.
The Trust engaged in the following transactions subsequent to the
filing of Amendment No. 4:
05/03/99 Transfer to CTG 401(K) Plan 2,445
05/06/99 Transfer to CTG Stock Option Plan 4,275
05/18/99 Transfer to CTG 401(K) Plan 2,672
06/01/99 Transfer to CTG 401(K) Plan 2,845
06/14/99 Transfer to CTG 401(K) Plan 2,688
06/17/99 Open Market Purchase 59,100
06/28/99 Transfer to CTG 401(K) Plan 2,592
07/07/99 Transfer to CTG Employee Stock Purchase Plan 17,331
07/12/99 Transfer to CTG Stock Option Plan 5,750
07/13/99 Transfer to CTG 401(K) Plan 2,815
07/27/99 Transfer to CTG 401(K) Plan 2,806
07/30/99 Transfer to CTG Employee Stock Purchase Plan 44
08/03/99 Transfer to CTG Stock Option Plan 225
08/06/99 Transfer to CTG Stock Option Plan 6,750
08/09/99 Transfer to CTG Stock Option Plan 16,000
08/09/99 Transfer to CTG 401(K) Plan 2,633
08/23/99 Transfer to CTG 401(K) Plan 2,533
09/07/99 Transfer to CTG 401(K) Plan 2,458
09/14/99 Open Market Purchase 50,000
09/15/99 Open Market Purchase 28,800
09/16/99 Open Market Purchase 50,000
09/20/99 Transfer to CTG 401(K) Plan 2,927
09/22/99 Transfer to Stock Option Plan 9.650
10/04/99 Transfer to CTG 401(K) Plan 2,780
10/13/99 Transfer to CTG Employee Stock Purchase Plan 14,868
10/13/99 Open Market Purchase 10,000
10/14/99 Open Market Purchase 20,000
10/15/99 Open Market Purchase 12,700
10/18/99 Transfer to CTG 401(K) Plan 2,875
10/18/99 Open Market Purchase 14,600
10/20/99 Open Market Purchase 10,000
10/21/99 Open Market Purchase 10,000
10/22/99 Open Market Purchase 10,000
10/25/99 Open Market Purchase 10,000
10/26/99 Open Market Purchase 10,000
10/27/99 Open Market Purchase 10,000
10/28/99 Open Market Purchase 10,000
10/29/99 Open Market Purchase 10,000
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended and restated as follows:
This Amendment No. 5 updates the status of the aggregate shareholdings
of the Trust. As of October 31, 1999 the Trust owned a total of 4,571,139 shares
equaling approximately 21.89% of the Issuer's total shares outstanding. This
amount represents an increase of 215,237 shares from the total number of
4,355,902 shares owned as of the date of Amendment No. 4 and an increase in
percentage owned to approximately 21.89% from approximately 20.86% as of the
date of Amendment No. 4. The Trust engaged in the transactions described herein
for the purpose of supplying shares to various Issuer equity based employee
benefit plans.
The Issuer has advised the Trustee that the Trust was created to foster
employee ownership in the Issuer with an intent to motivate employees and thus
to enhance the Issuer's long-term performance, thereby benefiting all
stockholders of the Issuer. The Trust may in the future acquire additional
securities of the Issuer in open market or privately negotiated transactions,
and it may dispose of securities by transferring them to fund the Issuer's
employee share benefit plans or by selling them in order to promote the purposes
of the Trust.
The Issuer has further advised the Trustee that the Issuer is aware
that the creation of the Trust and the purchase of shares of Common Stock by the
Trust may have certain anti-takeover effects. The Trust Agreement provides that
the Trustee, in his sole discretion, shall vote or abstain from voting, all
common stock of the Issuer held by the Trust, and shall tender or exchange, or
refrain from tendering or exchanging common stock of the Issuer held in the
Trust in any tender offer or exchange offer relating to shares of the Issuer's
stock. The Trust Agreement also provides that in exercising such rights, the
Trustee agrees to consider in connection with such decisions not only the direct
financial impact on the Trust fund, but also the potential effects, direct or
indirect, upon participants in the Issuer's employee benefit plans served by the
Trust and the Issuer's current and former employees. In connection with such
deliberations, the Trustee shall undertake, to the extent possible, to obtain
information as to how shares of the Issuer's stock previously held in the Trust
and currently held by such plans will be voted, tendered or exchanged. Further,
the Trustee agrees to consult with the Board of Directors and the Operating
Committee of the Issuer to obtain their assessment of the effects exercising
such rights will have on the Issuer. The Trust Agreement provides that the
Trustee shall not be held to be in breach of any fiduciary duty for any
consideration given to the preceding factors, or such other factors as the
Trustee in his reasonable judgment determine should be considered. The Trust
Agreement also provides that except as required by law or court order, the
Trustee shall maintain confidential all information regarding the manner of
voting or tendering of common stock held by the Trust. The foregoing is merely a
summary of certain provision of the Trust Agreement and is qualified in its
entirety by reference to the Trust Agreement, a copy of which was previously
filed as Exhibit A to the Statement.
The Issuer has advised the Trustee of the following potential anti-
takeover effects of the Trust. Under the New York Business Corporation Law, a
merger generally requires the affirmative vote of two-thirds of the outstanding
shares of the Issuer. The transfer of shares of Common Stock to the Trust may
thus make it more difficult for an acquiror to obtain an affirmative merger vote
without the support of the Trustee. Section 912 of the New York Business
Corporation Law provides that, unless the approval of a "business combination"
is received from the Board of Directors of a "resident domestic corporation" (an
"RDC"), such as the Issuer, by a potential acquiror prior to such acquiror
gaining beneficial ownership of 20% of the outstanding voting stock of the RDC,
or unless the Board of Directors has approved the stock acquisition that caused
the acquiror to pass the 20% threshold, the unapproved shareholder will be
prohibited for a minimum of five years from the date of crossing the 20%
threshold from engaging in a "business combination" with the RDC unless certain
"formula" price provisions are met. The term "business combination" is broadly
defined to include not only mergers and consolidations but also self-dealing
transactions between the unapproved shareholder and the RDC, such as certain
sales or purchases of assets over specified thresholds and obtaining the benefit
(other than proportionately as a shareholder) of any loans, advances or other
financial assistance provided by the RDC. At the end of the five year period,
the unapproved shareholder is permitted to effect a "business combination" with
the RDC only if such "business combination" is approved by a majority of the
shares of the RDC not held by the unapproved shareholder.
Alternatively, the unapproved shareholder may effect a "business
combination" provided it meets the two thirds voting approval requirement and
pays all remaining shareholders of the RDC a price equal to a "formula" price
designed to assure that all shareholders of the RDC receive at least the highest
price paid for the RDC's shares by the unapproved shareholder within the
previous five years.
The Trust holds approximately 21.89% of the Company's outstanding
shares of Common Stock. Thus, a potential acquiror who has not received Board
approval may find it more difficult to obtain the requisite shareholder approval
for a "business combination" unless it is able to induce the Trustee to support
its proposal.
The Issuer's Certificate of Incorporation and by-laws (the
"Organizational Documents") provide, among other things, that the Issuer shall
maintain a classified Board of Directors. The Organizational Documents also
provide that shareholders may adopt, alter, amend or repeal provisions of the
Organizational Documents only by 66 2/3% of the voting power of the outstanding
voting stock, voting together as a single class. Accordingly, a potential
acquiror would find it more difficult to obtain the necessary shareholder
approval in order to change provisions of the Organizational Documents that
might facilitate a change in control of the Issuer unless it was able to induce
the Trustee to support its proposals.
The foregoing discussions of the New York Business Corporation Law and
of the Organizational Documents are merely brief summaries of certain provisions
that the Issuer believes may be relevant to the anti-takeover effects of the
Trust, do not purport to provide complete or definitive statements of such law
or of the Organizational Documents, and are qualified in their entirety by
reference to such law and the Organizational Documents for their actual terms.
Except as described above and in the Trust Agreement, neither the Trust
nor the Trustee have any plans or proposals that relate to or would result in:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer
or any of its subsidiaries;
(d) Any change in the present board of directors or management
including any plans or proposals to change the number or term of directors or to
fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions that may impede the acquisition of
control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for
termination or registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended and restated as follows:
The Trust beneficially owns 4,571,139 shares as to which it may be
deemed to have sole voting power and shared dispositive power. The Shares
constitute 21.89% of the outstanding Common Stock. The Shares are held by the
Trust and will be released by the Trust to the Issuer's share benefit plans
served by the Trust (the "Plans") as the Trust repays the Notes and as the
Compensation Committee of the Issuer's Board of Directors directs the Trustee,
all as provided in the Trust Agreement. The Shares are pledged to the Issuer as
collateral security for the Notes pursuant to the terms of a Pledge Agreement
with the Issuer (the "Pledge Agreement"). The Issuer has advised the Trustee
that the Issuer's contributions to the Plans will be decreased by the value of
the shares allocated to the Plans from the Trust.
For a discussion of the Trustee's powers with respect to voting or
tendering the Common Stock held by the Trust, see Item 4, above. For a
discussion of the transactions in Common Stock by the Trust, see Item 3, above.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: November 3, 1999 COMPUTER TASK GROUP, INCORPORATED
STOCK EMPLOYEE COMPENSATION TRUST
BY: /S/ THOMAS R. BEECHER, JR.
-------------------------------------
Thomas R. Beecher, Jr., Trustee of
the Computer Task Group, Incorporated
Stock Employee Compensation Trust
