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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
TANDEM COMPUTERS INCORPORATED
(Name of Issuer)
COMMON STOCK
$0.25 PAR VALUE
(Title of Class of Securities)
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875370108
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(CUSIP Number)
COMPAQ COMPUTER CORPORATION
(Name of Persons Filing Statement)
J. David Cabello, Esq.
Senior Vice President
General Counsel and Secretary
Compaq Computer Corporation
20555 SH 249
Houston, TX 77070
Tel. No.: (281) 370-0670
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
June 22, 1997
(Date of Event which Requires Filing of
this Statement)
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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 statement because of Rule 13d-1(b)(3) or (4), check the
following: [ ]
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SCHEDULE 13D
<TABLE>
<S> <C> <C> <C> <C>
CUSIP No. 875370108
- ---------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Compaq Computer Corporation
76-0011617
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
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
17,400,000(1)(2)
NUMBER OF SHARES
BENEFICIALLY OWNED BY 8 SHARED VOTING POWER
EACH REPORTING PERSON None
WITH
9 SOLE DISPOSITIVE POWER
17,400,000(1)(2)
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,400,000(1)(2)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.98(3)
14 TYPE OF REPORTING PERSON*
HC; CO
o*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 7
</TABLE>
Draft: 1.25.91
1. The shares of common stock of Tandem Computers Incorporated
(the "Issuer") covered by this report are purchasable by Compaq Computer
Corporation ("Compaq") upon exercise of an option (the "Option") granted to
Compaq pursuant to the Stock Option Agreement dated as of June 22, 1997
between the Issuer and Compaq (the "Stock Option Agreement"), and described in
Item 4 of this report. Prior to the exercise of the Option, Compaq is not
entitled to any rights as a shareholder of the Issuer as to the shares covered
by the Option. The number of shares of common stock of the Issuer purchasable
by Compaq under the Option, which is initially set to equal 17,400,000 shares,
will be adjusted in certain circumstances, provided that the number of shares
purchasable by Compaq upon exercise of the Option at the time of its exercise
may not exceed 15% of the total outstanding shares of common stock of the
Issuer immediately prior to the time of such exercise. The Option may only be
exercised upon the happening of certain events, none of which has occurred as
of the date hereof. Prior to such exercise, Compaq expressly disclaims
beneficial ownership of the shares of common stock of the Issuer which are
purchasable by Compaq upon exercise of the Option.
2. The number of shares indicated represents approximately 15%
of the total outstanding shares of common stock of the Issuer as of June 20,
1997, excluding shares issuable upon exercise of the Option.
3. Adjusted to reflect the issuance by the Issuer of 17,400,000
shares of common stock of the Issuer upon exercise of the Option as described
herein.
Item 1. Security and Issuer
This Schedule 13D relates to the common stock, par value $.025
per share (the "Common Stock," an individual share of which is a "Share"), of
Tandem Computers Incorporated, a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 19333 Vallco Parkway,
Cupertino, CA 95014.
Item 2. Identity and Background
This Schedule 13D is filed by Compaq Computer Corporation
("Compaq"), a Delaware corporation, that is the world's largest supplier of
personal computers. Compaq develops and sells its products along four
customer-focused global product groups: PC Products, Enterprise Computing,
Consumer Products and Communication Products. Compaq's principal offices
are located at 20555 SH 249, Houston, TX 77070.
During the last five years, to the best of Compaq's knowledge,
neither Compaq nor any of its executive officers or directors has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction 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.
All executive officers and directors of Compaq are citizens of
the United States except Eckhard Pfeiffer, Andreas Barth and Hans W. Gutch,
who are citizens of Germany. The name, business address and present principal
occupation (including the name and address of the corporation or organization
in which such employment is conducted) of each executive officer and director
is set forth in Schedule A to this Schedule 13D and is specifically
incorporated herein by reference.
Item 3. Source and Amount of Funds or Other Consideration
This Statement relates to an option granted to Compaq by the
Issuer to purchase shares of Common Stock from the Issuer as described in Item
4 below (the "Option"). The Option entitles Compaq to purchase up to
17,400,000 Shares (the "Option Shares") under the circumstances specified in
the Stock Option Agreement dated as of June 22, 1997 between Compaq and the
Issuer (the "Stock Option Agreement") and as described in Item 4 below, for a
purchase price of $22.44 per Share (the "Purchase Price"). The number of
Option Shares will be adjusted in certain circumstances, provided that the
number of shares purchasable by Compaq upon exercise of the Option at the time
of its exercise may not exceed 15% of the total outstanding shares of Common
Stock of the Issuer immediately prior to the time of such exercise. Reference
is hereby made to the Stock Option Agreement, which is included as Exhibit 2.2
to the Current Report on Form 8-K filed by Compaq on June 26, 1997 (the "Form
8-K"), for the full text of its terms, including the conditions upon which it
may be exercised. The Stock Option Agreement is incorporated herein by
reference in its entirety.
The Option was granted by the Issuer as an inducement to Compaq
to enter into the Agreement and Plan of Merger dated as of June 22, 1997 among
Compaq, Compaq-Project, Inc. ("Merger Subsidiary") and the Issuer (the
"Merger Agreement"). Pursuant to the Merger Agreement and subject to the
terms and conditions set forth therein (including approval by the stockholders
of Issuer and various regulatory agencies), Merger Subsidiary will merge with
and into the Issuer (the "Merger") with the Issuer continuing as the surviving
corporation (the "Surviving Corporation"), and each issued and outstanding
share of Common Stock of the Issuer (other than those shares owned by the
Issuer or Compaq) will be converted into the right to receive 0.21 shares of
common stock, $0.01 par value per share, of Compaq. If the Merger is
consummated, the Option will not be exercised. No monetary consideration was
paid by Compaq to the Issuer for the Option.
If Compaq elects to exercise the Option, it currently
anticipates that the funds to pay the Purchase Price will be generated by
available working capital.
Item 4. Purpose of Transaction
As stated above, the Option was granted to Compaq in connection
with the execution of the Merger Agreement as an inducement to Compaq to enter
into the Merger Agreement.
The Option shall become exercisable upon the occurrence of
certain events set forth in Section 2 of the Stock Option Agreement, none of
which has occurred at the time of this filing.
If the Merger is consummated in accordance with the terms of
the Merger Agreement, the Board of Directors of the Surviving Corporation
shall consist of the directors of Merger Subsidiary at the effective time of
the Merger (all of whom will be directors or officers of Compaq) (the
"Effective Time") and the officers of the Surviving Corporation shall be the
officers of Tandem at the Effective Time. The certificate of incorporation of
Merger Subsidiary in effect at the Effective Time shall be the certificate of
incorporation of the Surviving Corporation (except that Article 1 shall be
amended to read "The name of the company is Tandem Computers Incorporated").
The bylaws of Merger Subsidiary in effect at the Effective Time shall be the
bylaws of the Surviving Corporation.
In the event the Merger is consummated, the Tandem Common Stock
will be delisted from the New York Stock Exchange and any other exchange on
which it is listed, and will become eligible for termination of registration
under the Act, as amended.
The descriptions herein of the Stock Option Agreement and the
Merger Agreement are qualified in their entirety by reference to such
agreements, copies of which were filed as Exhibits 2.2 and 2.1, respectively,
to the Form 8-K and which are incorporated herein by reference in their
entirety.
Other than as described above, Compaq has no plans or proposals
which relate to, or may result in, any of the matters listed in items 4(a)-(j)
of Schedule 13D (although Compaq reserves the right to develop such plans).
Item 5. Interest in Securities of the Issuer
As a result of the issuance of the Option, Compaq may be deemed
to be the beneficial owner of 17,400,000 Shares, which would represent
approximately 12.98% of the Shares outstanding after exercise of the Option
(based on the number of Shares outstanding on June 20, 1997, as set forth in
the Merger Agreement). Compaq will have sole voting and dispositive power
with respect to such Shares.
The Option Shares described herein are subject to the Option,
which is not currently exercisable. Nothing herein shall be deemed to be an
admission by Compaq as to the beneficial ownership of any Shares, and, prior to
exercise of the Option, Compaq disclaims beneficial ownership of all Option
Shares.
Except as described herein, neither Compaq nor, to the best of
Compaq's knowledge, any other person referred to in Schedule A attached
hereto, beneficially owns or has acquired or disposed of any Shares of the
Issuer during the past 60 days.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
Except for the Merger Agreement and the Stock Option Agreement,
none of the persons named in Item 2 has any contracts, arrangements,
understandings or relationships (legal or otherwise) with any persons with
respect to any securities of the Issuer, including, but not limited to,
transfers or voting of any securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies.
Item 7. Materials to be Filed as Exhibits
Exhibit Description
- ------- -----------
1 Stock Option Agreement dated as of June 22, 1997 between Tandem
Computers Incorporated, as Issuer, and Compaq Computer
Corporation, as Grantee (incorporated by reference to Exhibit
2.2 to the Current Report on Form 8-K of Compaq Computer
Corporation dated June 26, 1997 (the "Form 8-K")).
2 Agreement and Plan of Merger dated as of June 22, 1997, among
Compaq Computer Corporation, Compaq-Project, Inc. and Tandem
Computers Incorporated (incorporated by reference from Exhibit
2.1 to the Form 8-K).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Schedule 13D is true,
complete and accurate.
July 2, 1997 COMPAQ COMPUTER CORPORATION
By: /s/ Earl L. Mason
-----------------------------
Name: Earl L. Mason
Title: Senior Vice President and
Chief Financial Officer
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF COMPAQ
The name, business address, title, present principal occupation
or employment of each of the directors and executive officers of Compaq
Computer Corporation ("Compaq") are set forth below. If no business address is
given the director's or officer's business address is 20555 SH 249, Houston,
TX 77070. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to Compaq.
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
- ------------------------------------------------------------ ---------------------------------------------
Directors
<S> <C>
Benjamin M. Rosen........................................... Chairman of the Board; Chairman, Rosen Motors
Sevin Rosen Management Company
200 Park Avenue, Suite 4503
New York, New York 10166
Eckhard Pfeiffer............................................ President and Chief Executive Officer
Lawrence T. Babbio, Jr...................................... Vice Chairman, Bell Atlantic Corporation
Bell Atlantic Corporation
1310 North Courthouse Road, 11th Floor
Arlington, Virginia 22201
Robert Ted Enloe, III....................................... Managing Partner, Balquita Partners, Ltd.
Balquita Partners, Ltd.
3102 Maple Avenue, Suite 200
Dallas, Texas 75201
George H. Heilmeier......................................... Chairman of the Board and Chief Executive Officer, Bell
Bell Communications Research Communications Research, Inc.
Morris Corporate Center (MCC)
445 South Street
Morristown, New Jersey 07960-6438
Adm. George E.R. Kinnear II, USN (Ret.)..................... Chairman Emeritus, Retired Officers Association of the
Retired Officers Association of the United States United States; Chairman of the Audit Committee
20 Roaring Rock Road
York Harbor, Maine 03909-1503
Peter N. Larson............................................. Chairman and Chief Executive, Brunswick Corporation
Brunswick Corporation
1 N. Field Court
Lake Forrest, Illinois 60045
Kenneth I. Lay.............................................. Chairman of the Board and Chief Executive Officer, Enron
ENRON Corp. Corp.
1400 Smith Street, 50th Floor
Houston, Texas 77002
Kenneth Roman............................................... Independent Management Consultant
866 Third Avenue
26th Floor
New York, New York 10022
Lucille S. Salhany.......................................... President and Chief Executive Officer, United Paramount
United Paramount Network (UPN) Network
11800 Wilshire Blvd.
Los Angeles, California 90025
</TABLE>
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation
- ------------------------------------------------------------ ---------------------------------------------
<S> <C>
Executive Officers
(Who Are Not Directors)
Andreas Barth............................................... Senior Vice President, Europe, Middle East and Africa
J. David Cabello............................................ Senior Vice President, General Counsel and Secretary
Hans W. Gutsch.............................................. Senior Vice President, Human Resources and Environment
Michael D. Heil............................................. Senior Vice President, Consumer Products Group
Alan G. Lutz................................................ Senior Vice President, Communication Products Group
Earl L. Mason............................................... Senior Vice President and Chief Financial Officer
Gregory E. Petsch........................................... Senior Vice President, Manufacturing and Quality
John T. Rose................................................ Senior Vice President, Enterprise Computing Group
Richard N. Snyder........................................... Senior Vice President, Worldwide Sales, Marketing,
Service and Support
Robert W. Stearns........................................... Senior Vice President, Technology and Corporate
Development
Michael J. Winkler.......................................... Senior Vice President, PC Products Group
John W. White............................................... Vice President and Chief Information Officer
</TABLE>
