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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9/A
(AMENDMENT NO. 1)
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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COMPUTER LANGUAGE RESEARCH, INC.
(Name of Subject Company)
COMPUTER LANGUAGE RESEARCH, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
205195 10 0
(CUSIP Number of Class of Securities)
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STEPHEN T. WINN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
COMPUTER LANGUAGE RESEARCH, INC.
2395 MIDWAY ROAD
CARROLLTON, TEXAS 75006
(972) 250-7000
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing statement)
With a copy to:
GUY KERR, ESQ.
LOCKE PURNELL RAIN HARRELL
(A PROFESSIONAL CORPORATION)
2200 ROSS AVENUE, SUITE 2200
DALLAS, TEXAS 75201
(214) 740-8000
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This Amendment No. 1 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
filed with the Securities and Exchange Commission on January 16, 1998 by
Computer Language Research, Inc., a Texas corporation (the "Company"), relating
to the tender offer by Sabre Acquisition, Inc., a Delaware corporation
("Purchaser"), a wholly owned subsidiary of The Thomson Corporation, a
corporation incorporated under the laws of Ontario, Canada ("Parent"), to
purchase all of the issued and outstanding shares of common stock, par value
$.01 per share of the Company (the "Common Stock" or the "Shares"), at a price
of $22.50 per share, net to the seller in cash, upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated January 16, 1998, and
the related Letter of Transmittal. All capitalized terms used and not defined
herein shall have the same meaning as set forth in the Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4(b) of the Schedule 14D-9 is hereby amended and supplemented to
read in its entirety as follows:
(b) REASONS FOR THE BOARD'S RECOMMENDATION
In reaching the determination and recommendation described in
paragraph (a) above, the Board considered a number of factors, including the
following:
(1) The requirement by Parent, as a condition to Parent's
willingness to agree to acquire the Company, that the Majority
Shareholders enter into a binding agreement for the sale of their
Shares; and the stated desire of the Majority Shareholders to proceed
with the sale of their Shares to Purchaser pursuant to the Stock
Purchase Agreement. The Board viewed this factor as supportive
because the Majority Shareholders' commitment increased the likelihood
that the Offer and the Merger would be consummated.
(2) The financial condition and results of operations of
the Company. The Board viewed this factor as supportive because,
among other things, the transaction offered a significant premium as
a multiple of the Company's recent operating results.
(3) The projected financial results, prospects and
strategic objectives of the Company, as well as the risks involved in
achieving those results, prospects and objectives in the tax and
accounting software and services industry. The members of the Board
were knowledgeable about
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the Company's business and affairs, including the potential impact on
the Company's prospects as a result of increased competition from
consolidation among existing and potential customers and competitors,
rapid changes and developments in tax and accounting software technology
and changes and improvements in new and existing products that compete
with the Company's products. The Board viewed as supportive that the
transaction offered a significant premium over recent market prices (see
paragraph 4 below), and that the achievement of comparable values
through growth of the Company's business would require successful
implementation of the Company's strategic plan, which might not be
achieved because of the inherent uncertainties relating to the
development and marketing of new and improved products and technologies
and which cannot be predicted with any degree of assurance.
(4) The fact that the $22.50 per Share to be received by
the Company's shareholders in both the Offer and Merger represents a
significant premium (63.6%) over the closing market price of $13.75
per Share on January 12, 1998 (the last trading day prior to the
Board's approval of the transaction referred to in paragraph (a) of
this Item 4); and the fact that the $22.50 per Share to be received by
the Company's shareholders in both the Offer and Merger represents a
significant premium (120.4%) over the five-year weighted average
market price per Share. An analysis of premiums paid in comparable
transactions supported the Board's recommendation.
(5) Developments relating to the consolidation in the tax
and accounting software and services industry. The members of the
Board were knowledgeable about the consolidation trend in the industry
which has resulted in competitors which are significantly larger and
have greater financial resources than the Company and which indicated
to the Board the difficulty for a company the size of the Company to
remain competitive in a consolidating industry.
(6) The Board's view, after consultation with management
and Goldman Sachs, regarding the likelihood of the existence of other
viable buyers on terms as favorable as those in the Offer and the
Merger. Based on the foregoing, the Board determined that the
proposed transaction was the best available transaction.
(7) Presentations to the Board by Goldman Sachs and the
oral opinion of Goldman Sachs (subsequently confirmed in writing)
that, as of January 12, 1998, the $22.50 per Share in cash to be
received by the holders of Shares in the Offer and the Merger is fair
from a financial point of view to such holders. The full text of the
written opinion of Goldman Sachs, which sets forth assumptions made,
procedures followed, matters considered and limits on the review
undertaken, is attached as Exhibit 5 to this statement and is
incorporated herein by reference. THE COMPANY'S SHAREHOLDERS ARE
URGED TO READ THIS OPINION IN ITS ENTIRETY.
(8) The availability of appraisal rights under Articles
5.11 - 5.13 of Texas Law for dissenting Shares.
(9) The terms and conditions of the Merger Agreement and
the Stock Purchase Agreement and the course of the negotiations
resulting in the execution thereof. The Board viewed favorably that
the Merger Agreement and the Stock Purchase Agreement imposed limited
conditions to the closing of the Merger and limited termination
rights, thus making consummation of the transaction more likely than
one in which the agreement imposes more significant conditions to the
consummation or greater termination rights.
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(10) The likelihood that the proposed acquisition would be
consummated, including the likelihood of obtaining the regulatory
approvals required pursuant to, and satisfying the other conditions
to, the Offer and the Merger contained in the Merger Agreement, the
experience, reputation and financial condition of the Parent and the
risks to the Company if the acquisition were not consummated.
(11) The recommendation of the Company's management with
respect to the proposed transaction, which the Board believed was based
on management's review of the Company and its position within the tax
and accounting software and services industry, increasing competitive
pressures within the industry and their analysis of the risks
associated with the implementation of the Company's strategic plan as
discussed above.
The members of the Board evaluated the factors listed above in light
of their knowledge of the business and operations of the Company and their
business judgment. In view of the wide variety of factors considered in
connection with its evaluation of the Offer and the Merger, the Board did not
find it practicable to, and did not, quantify or otherwise attempt to assign
relative weights to the specific factors considered in reaching its
determination. On balance, each of the factors listed above supported the
Board's recommendation. The Board recognized that Purchaser, by virtue of the
acquisition of the Shares of the Majority Shareholders pursuant to the Stock
Purchase Agreement, will have sufficient voting power to approve the Merger
without the affirmative vote of any other shareholder of the Company. While
consummation of the Offer would result in the remaining shareholders of the
Company receiving a premium for their Shares over the trading prices of the
Shares prior to the announcement of the Offer and the Merger, it would
eliminate any opportunity for the shareholders of the Company other than Parent
to participate in the potential future growth prospects of the Company. The
Board, however, believed that the value of such potential future growth was
reflected in the Offer Price to be paid and also recognized that there can be
no assurance of growth, if any, to be attained by the Company in the future.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
Item 6(a) of the Schedule 14D-9 is hereby amended and supplemented by
adding to the end thereof the following paragraph:
On January 14, 1998, an investment manager with discretion over the
personal account of Mr. Jeffrey T. Leeds, a director of the Company, effected
the sale of 430 Shares beneficially owned by Mr. Leeds at $22.1875 per Share
without the knowledge or direction of Mr. Leeds.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 of the Schedule 14D-9 is hereby amended and supplemented by
adding thereto the following exhibit:
Exhibit 9 - Leeds Group Letter Agreement, dated as of January 9, 1998,
between Stephen T. Winn and Leeds Group Inc.
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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: February 6, 1998.
COMPUTER LANGUAGE RESEARCH, INC.
By: /s/ Stephen T. Winn
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Name: Stephen T. Winn
Title: President and Chief
Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
9 - Leeds Group Letter Agreement
</TABLE>
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EXHIBIT 9
LEEDS GROUP INC.
January 9, 1998
Mr. Stephen T. Winn
c/o Computer Language Research, Inc.
2395 Midway Road
Carrollton, TX 75006
Dear Mr. Winn:
Pursuant to our recent discussions, this letter confirms that we will act
as financial advisor to you in connection with a possible sale, in one or a
series of transactions, of all or substantially all of your stock in Computer
Language Research, Inc. or any similar transaction (hereinafter referred to as
a Sale). We are to act in such capacity, subject to the following conditions:
1. We shall advise and assist you in your evaluation of any Sale, and,
if requested, we shall participate in negotiations relating to any Sale.
2. Should a Sale occur, you agree to pay us in cash upon closing a fee
of $100,000.
3. You will reimburse us for all of our out-of-pocket expenses
(including, but not limited to, fees and reasonable expenses of our counsel, if
any, retained with your consent) incurred in acting as your financial advisor
pursuant hereto. You will have no obligation to reimburse us for more than
$5,000 of such expenses.
4. This letter is made in New York and shall be governed by the laws of
the State of New York, without regard to the state's rules concerning conflicts
of laws.
5. No fees payable to any other financial advisor, either by you or by
any other person, shall reduce or otherwise affect any fee payable hereunder by
you.
6. The provisions hereof shall inure to the benefit of and be binding
upon the successors and assigns of you and Leeds Group.
Please confirm that the foregoing is in accordance with our agreement by
signing and returning to Leeds Group the enclosed copy of this letter.
Very truly yours,
Leeds Group Inc.
By: /s/ Jeffrey T. Leeds
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Jeffrey T. Leeds
President
AGREED TO AND ACCEPTED
Stephen T. Winn
/s/ Stephen T. Winn
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