SECURITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 11, 1998
COMPAQ COMPUTER CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-9026 76-0011617
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
20555 SH 249, Houston Texas 77070
(Address, including zip code,
of Registrant's principal executive offices)
Registrant's telephone number, including area code: (281) 370-0670
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On June 11, 1998, Compaq Computer Corporation ("Compaq") consummated
its acquisition of Digital Equipment Corporation ("Digital"). The transaction
was closed pursuant to the Amended and Restated Agreement and Plan of Merger
(the "Merger Agreement"), dated January 25, 1998, by and among Compaq, a
wholly owned subsidiary of Compaq and Digital. As a result of the
transaction, Digital is a wholly owned subsidiary of Compaq. The purchase
price consisted of approximately $4.5 billion of cash, and the issuance of
approximately 141 million shares of Compaq common stock valued at $4.3
billion, and the issuance of approximately 25 million options to purchase
Compaq common stock valued at approximately $249 million. The cash and Compaq
common stock were issued in exchange for substantially all the outstanding
common stock of Digital as of the date of consummation (approximately 149
million shares) based on an exchange ratio equal to $30 in cash plus 0.945
shares of Compaq common stock for each share of Digital common stock acquired
and the Compaq common stock options were issued in exchange for outstanding
Digital common stock options. The value of the Compaq common stock issued was
based on the share value of approximately $30 calculated as the average market
price of Compaq common stock during the five business days immediately
preceding and subsequent to the date of the Merger Agreement. The value of
the Compaq common stock options was based on the estimated fair market value
of these options as of June 11, 1998, the date the transaction was
consummated, using the Black-Scholes model. The cash component of the
purchase price was paid through the use of Compaq's general corporate funds.
The purchase price was determined through a series of arms length
negotiations between officers, representatives, and the Board of Directors of
Compaq and Digital. There were no material relationships between such persons
and Compaq or any of its affiliates, any director or officer of Compaq, or any
associate of any such director or officer. The basic terms of the Merger
Agreement, and the relationships between Compaq and Digital and their
respective directors and executive officers, were described in the Proxy
Statement/Prospectus dated May 6, 1998 filed in connection with Compaq's
Registration Statement on Form S-4 (No. 333-51903), which is incorporated
herein by reference.
Digital's assets consist of cash, receivables, inventory, property and
equipment, and other tangible and intangible assets. The purchase price and
associated charges will be allocated among the identifiable tangible and
intangible assets of Digital based on their fair market value at the
acquisition date under the purchase method of accounting for business
combinations.
The consummation of the Merger Agreement and the acceptance for purchase
of Digital shares of common stock by Compaq pursuant thereto was announced in
a press release of Compaq dated June 11, 1998, a copy of which was filed with
Compaq's Form 8-K dated June 11, 1998.
(b) The acquisition by Compaq of shares of Digital common stock pursuant
thereto is deemed the indirect acquisition of the assets of Digital
represented thereby, including Digital's plant, equipment and other physical
property. Digital utilizes such assets in the conduct of its business as a
leader in implementing and supporting networked business solutions in
multivendor environments. Compaq will continue to utilize such assets in the
conduct of its business as a leader in enterprise solutions committed to
delivering high customer value through standards-based, partner-leveraged
computing that features world-class services and support and market-focused
solutions.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
The financial statements required to be filed were previously reported in
Digital's Annual Report on Form 10-K for the fiscal year ended June 29, 1997
and Quarterly Reports on Form 10-Q for the quarters ended September 27, 1997,
December 27, 1997 and March 28, 1998, respectively, and incorporated herein by
reference.
(b) PRO FORMA FINANCIAL INFORMATION
The unaudited combined condensed pro forma financial statements of Compaq
and Digital, as required by Section 13 or 15(d) of the Securities Exchange Act
of 1934, are not included herein. These required pro forma financial
statements will be filed as an amendment to this Form 8-K under cover of Form
8-K/A on or before August 25, 1998.
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 hereunto duly authorized.
June 22, 1998 COMPAQ COMPUTER CORPORATION
/s/ Earl L. Mason
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Earl L. Mason
Senior Vice President and
Chief Financial Officer
(as authorized officer and
as principal financial
officer)
