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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
CONTROL DATA SYSTEMS, INC.
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(Name of Issuer)
Common Stock, $0.01 Par Value
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(Title of Class of Securities)
21238F 10 6
--------------------------------
(CUSIP Number)
William M. Kelly
Vice President, Business Development
and General Counsel
Silicon Graphics, Inc.
2011 North Shoreline Boulevard
Mountain View, CA 94043-1389
(415) 960-1980
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(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications)
February 22, 1994
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(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 / /.
Check the following box if a fee is being paid with the statement / /. (A fee
is not required only if the reporting persons: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7). NOTE: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) 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).
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Page 2 of 12 Pages
SCHEDULE 13D
CUSIP No. 21238F 10 6
-----------
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1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Silicon Graphics, Inc. I.R.S. No. 94-2789662
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Silicon Graphics, Inc. is a Delaware corporation
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7 SOLE VOTING POWER
NUMBER OF
1,185,224
SHARES ------------------------------------------------------
BENEFICIALLY OWNED 8 SHARED VOTING POWER
BY EACH 0
------------------------------------------------------
REPORTING
9 SOLE DISPOSITIVE POWER
PERSON
1,185,224
WITH ------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,185,224
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES /X/
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.67%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Page 3 of 12 Pages
This Amendment No. 1 amends and restates the statement on Schedule 13D dated
August 19, 1992 filed by Silicon Graphics, Inc. relating to the common stock of
Control Data Systems, Inc. ("Control Data"). Capitalized terms used herein
without definition have the meanings ascribed to those terms in the initial
filing.
ITEM 1: SECURITY AND ISSUER.
The title of the class of securities to which this Schedule 13D relates is
common stock, $0.01 par value per share (the "Common Stock") of Control Data
Systems, Inc., a Delaware corporation ("Control Data"). The principal executive
offices of Control Data are located at 4201 Lexington Avenue North, Arden Hills,
Minnesota 55126.
ITEM 2: IDENTITY AND BACKGROUND.
This Schedule 13D is filed on behalf of Silicon Graphics, Inc., a Delaware
corporation ("SGI"), with its principal executive office at 2011 North Shoreline
Boulevard, Mountain View, California 94039. SGI designs, manufactures, markets
and distributes visual computing systems. Through its wholly-owned subsidiary,
MIPS Technologies, Inc. ("MIPS"), SGI licenses RISC microprocessor designs for
the manufacturing and sale of microprocessors by third-party semiconductor
foundries.
The attached Schedule I is a list of the executive officers and directors
of SGI, which is incorporated herein by this reference. Such list contains the
following information with respect to each such person:
(a) Name;
(b) Business Address;
(c) Present principal occupation or employment and the name,
principal business and address of any corporation or other
organization in which such employment is conducted; and
(d) Citizenship.
During the last five years, neither SGI nor, to the best of SGI's
knowledge, any person named on Schedule I 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 and as a result of such proceeding was or is subject to 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.
ITEM 3: SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to a Stock Purchase Agreement dated July 31, 1992 by and between
Control Data and SGI (the "Purchase Agreement"), SGI purchased from Control Data
1,185,224 shares of newly issued Common Stock on August 10, 1992 for $14,444,444
in cash. SGI funded the payment of the purchase price through internally
generated working capital.
ITEM 4: PURPOSE OF TRANSACTION.
SGI acquired the shares of Common Stock to which this Schedule 13D relates
for investment purposes. In addition, the Purchase Agreement provided that SGI
and Control Data would use their best reasonable efforts to amend or restate the
OEM Agreement between SGI and Control Data's predecessor, Ceridian Corporation
("Ceridian"), pursuant to which Control Data purchased computer
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Page 4 of 12 Pages
workstations from SGI for remarketing by Control Data as part of its product
line. In addition, SGI and Control Data agreed to enter into a technology
development agreement with respect to Control Data's technology and development
activities related to certain SGI/MIPS products. Furthermore, Control Data
agreed that, for two years from the date of the Purchase Agreement, the
workstation products it markets would be based primarily and principally on the
MIPS/ARC RISC technology.
In 1992, pursuant to the Purchase Agreement, Control Data increased the
size of its board of directors from six to seven members, and appointed Mark W.
Perry, then a senior executive of SGI, to fill the resulting vacancy. The
Purchase Agreement originally provided that so long as SGI held at least five
percent of the total voting power of Control Data, Control Data would nominate
and use its best efforts to cause the election to Control Data's board of
directors of a nominee designated by SGI, reasonably acceptable to Control Data
and who would not cause SGI and Control Data to violate Section 8 of the Clayton
Act. Mr. Perry has advised SGI and Control Data of his intention not to stand
for re-election as a director of Control Data at the next annual meeting of
stockholders. SGI has agreed to relinquish its right under the Purchase
Agreement to designate a nominee for election to the Control Data board of
directors.
SGI has agreed, pursuant to the Purchase Agreement, to a number of
limitations on its actions, including limitations on its ability to acquire
additional shares of voting stock of Control Data ("Voting Stock"), to vote its
shares of Voting Stock and to sell its Voting Stock. See Item 6 below for a
summary of some of these limitations, and the Purchase Agreement itself,
attached as Exhibit A.
SGI intends to review, from time to time, Control Data's business affairs
and financial position. Based on such evaluation and review, as well as general
economic and industry conditions existing at the time, SGI may consider from
time to time alternative courses of action, as permitted by the Purchase
Agreement. Such actions may include, to the extent permitted by the Purchase
Agreement and subject to compliance with applicable laws and receipt of any
necessary regulatory approvals, the acquisition of additional Voting Stock
through open market purchases, privately negotiated transactions or otherwise.
Alternatively, and subject to the terms of the Purchase Agreement, such actions
may involve the sale of all or a portion of the shares to which this Schedule
13D relates in the open market, in privately negotiated transactions, through
public offerings or otherwise.
Except as set forth above and except as contemplated by the Purchase
Agreement, neither SGI nor, to the best of its knowledge, any of the persons
named on Schedule I has any plan or proposal which relates to or would result in
any of the transactions described in subparagraphs (a) through (j) of Item 4 of
Schedule 13D.
ITEM 5: INTEREST IN SECURITIES OF THE ISSUER.
As of the date of this amendment, SGI beneficially owns 1,185,224 shares of
Control Data's Common Stock, or 8.67% of the total shares issued and outstanding
at January 25, 1994. SGI has sole power to vote and dispose of all such shares.
SGI does not have shared voting or dispositive power with respect to any of
Control Data's Common Stock. Mark W. Perry, a director of SGI, is the
beneficial owner of an option to purchase 8,333 shares of Control Data's common
stock. To the best of SGI's knowledge, no person named on Schedule I is the
beneficial owner of any of Control Data's Common Stock. Neither SGI nor, to the
best of SGI's knowledge, any person named on Schedule I has effected any
transaction in Control Data's Common Stock during the past 60 days.
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Page 5 of 12 Pages
ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERTAKINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The Purchase Agreement, incorporated herein by reference to Exhibit A to
the Schedule 13D dated August 19, 1992, contains a number of agreements and
restrictions relating to the Voting Stock of Control Data. These agreements and
restrictions are summarized below. This summary does not purport to be
complete, however, and it is subject to, and qualified in its entirety by
reference to, all the provisions of the Purchase Agreement.
During the term of the Purchase Agreement, SGI will not acquire, or offer
or agree to acquire, beneficial ownership of any Voting Stock (or rights to
acquire Voting Stock) if the effect of such acquisition would be to increase the
number of shares of such Voting Stock (or rights to acquire shares of such
Voting Stock) held by SGI to more than 10 percent of the then-outstanding Voting
Stock. This permitted percentage will be reduced to match SGI's ownership level
of Voting Stock after certain dispositions of such stock by SGI.
Notwithstanding the foregoing, SGI has, under the Purchase Agreement,
certain rights to acquire additional Voting Stock of Control Data, either
from Control Data or in the open market, if SGI's percentage interests in
Control Data's Voting Stock is reduced as a result of the issuance of additional
shares of Voting Stock by Control Data. Furthermore, SGI is not obligated to
dispose of any Voting Stock if its percentage ownership is increased as a result
of a recapitalization or repurchase of securities by Control Data.
The Purchase Agreement also provides that, during its term, all Control
Data Voting Stock owned by SGI must be voted for management's nominees to
Control Data's board of directors, and proportionately with Control Data's other
stockholders on most other matters. SGI is, however, free to vote its shares of
Voting Stock as it chooses on certain fundamental matters affecting Control Data
or SGI's investment therein. During the term of the Purchase Agreement, SGI may
not in general (i) subject any of its shares of Voting Stock to any trust or
other arrangement with respect to voting such shares, (ii) solicit proxies or
participate in an election contest with respect to Control Data or its Voting
Stock, or (iii) act in concert with others for the purpose of acquiring, holding
or disposing Control Data Voting Stock.
The restrictions on SGI described above, including the limitation on the
amount of Control Data Voting Stock SGI may hold, terminate: (a) if a person or
group (other than an employee benefit plan of Control Data) holds or has the
right to acquire more than 33% of Control Data's then-outstanding Voting Stock,
(b) if a person or group makes a tender offer which would result in its owning
or having the right to acquire 40% or more of Control Data's then-outstanding
Voting Stock, or (c) after July 31, 2002.
As discussed above under Item 4, the Purchase Agreement contains certain
agreements between SGI and Control Data regarding their commercial and
technology relationships. Control Data has also agreed to indemnify SGI against
any liability asserted against SGI solely by reason of its stockholdings in
Control Data with respect to any liability of Control Data under any
environmental laws. Control Data has also agreed to give SGI certain notices
regarding substantial issuances of Voting Stock by Control Data, acquisitions of
Voting Stock by third parties, and the like.
During the term of the Purchase Agreement, SGI is not permitted to sell or
transfer any Control Data Voting Stock except: (i) to Control Data or any person
or group approved by Control Data; (ii) to a corporation controlled by SGI;
(iii) pursuant to a registered public offering under the Securities Act of 1933
which is structured to avoid ten percent or more of the total Voting Stock being
transferred to a single person or group; (iv) pursuant to a rights offering or
dividend or other
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Page 6 of 12 Pages
distribution to SGI's shareholders; (v) pursuant to Rule 144 under the
Securities Act; (vi) in response to an offer by or on behalf of Control Data
from a person or group not opposed by Control Data; (vii) pursuant to a bona
fide pledge agreement; (viii) pursuant to certain business combinations involv-
ing Control Data; (ix) pursuant to the liquidation of Control Data; (x) subject
to Control Data's right of first refusal, in response to any other offer that
would result in a person or group owning or having the right to acquire more
than 40% of Control Data's then-outstanding Voting Stock, or (xi) subject to
Control Data's right of first refusal, in any other transaction so long as such
transaction does not result in any single person or group acquiring or having
the right to acquire ten percent of more of Control Data's then-outstanding
Voting Stock. In addition, Control Data may repurchase all shares of its Common
Stock held by SGI upon a liquidation or change of control (as defined in the
Purchase Agreement) of SGI.
The Purchase Agreement also provides SGI with the right to demand
registration (at SGI's expense) of the Common Stock it holds, such rights being
exercisable with regard to a portion the SGI's shares commencing twelve months
after the date of the Purchase Agreement and increasing to all shares held by
SGI during the succeeding twelve months. Notwithstanding the foregoing, if
during such twenty-four month period Control Data evidences a clear intention no
longer to market hardware products primarily and principally based on MIPS/ARC
RISC technology, SGI will have the immediate right to demand registration of all
its shares at Control Data's expense. SGI's demand registration rights are
exercisable on no more than three separate occasions, and not more often than
once during any six-month period. SGI is also entitled to include shares in any
registered offering of Common Stock to the public by Control Data, subject to
cut-back or total exclusion if such inclusion would, in the good faith judgment
of the underwriter for such offering, adversely affect the marketing of the
offering.
The Purchase Agreement terminates on July 31, 2002, although SGI's
registration rights survive such termination. In addition, either party may
terminate the Purchase Agreement sooner if SGI owns less than 5 percent of the
Control Data Voting Stock then outstanding, although the limit on SGI's
acquisition of more than 10% of Control Data's Voting Stock will survive such a
termination by SGI for one year, unless SGI's percentage decrease was caused
solely by reason of dilution resulting from other issuances by Control Data.
SGI may also terminate the Purchase Agreement if there are certain specified
changes in the composition of Control Data's board of directors as the result of
an election contest, although SGI's registration rights also survive such a
termination. Finally, either party may terminate its obligations under the
Purchase Agreement following a default by the other party, although again SGI's
registration rights survive such a termination.
ITEM 7: MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A: Stock Purchase Agreement dated July 31, 1992 by and between
Silicon Graphics, Inc. and Control Data Systems, Inc.*
Exhibit B: Letter agreement dated February 17, 1994 between Silicon
Graphics, Inc. and Control Data Systems, Inc.
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* Incorporated by reference to Schedule 13D dated August 19, 1992 filed by
Silicon Graphics, Inc. with the Securities and Exchange Commission.
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Page 7 of 12 Pages
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 23, 1994
SILICON GRAPHICS, INC.
By: /s/ William M. Kelly
-------------------------------------
William M. Kelly
Vice President, Business Development,
General Counsel and Secretary
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Page 8 of 12 Pages
SCHEDULE I
Set forth below are the names, positions, business addresses and principal
occupations of each executive officer and director of Silicon Graphics, Inc.
Each of the persons named below is a citizen of the United States of America,
except for Mr. Bishop, who is a citizen of Australia, and Mr. Ramsay, who is a
citizen of the United Kingdom.
BUSINESS ADDRESS AND PRINCIPAL
NAME OCCUPATION OR EMPLOYMENT
- ------------------------------ ------------------------------------------
Robert R. Bishop Silicon Graphics, Inc.
President, Silicon Graphics 2011 North Shoreline Boulevard
World Trade Corporation, and Mountain View, California 94043-1389
Director
Allen F. Jacobson Former Chairman of the Board &
Director Chief Executive Officer
3M Corporation
3050 Minnesota World Trade Center
30 Seventh Street East
St. Paul, Minnesota 55101-4901
Thomas A. Jermoluk Silicon Graphics, Inc.
President and Chief 2011 North Shoreline Boulevard
Operating Officer, Director Mountain View, California 94043-1389
C. Richard Kramlich Managing General Partner
Director New Enterprise Associates
235 Montgomery Street
Suite 1025
San Francisco, California 94194
Edward R. McCracken Silicon Graphics, Inc.
Chairman of the Board and 2011 North Shoreline Boulevard
Chief Executive Officer, Mountain View, California 94043-1389
Director
James A. McDivitt Senior Vice President, Government
Director Operations and International
Rockwell International Corporation
1745 Jefferson Davis Highway
Suite 1200
Arlington, Virginia 22202
Robert C. Miller President and Chief Executive Officer
Director NeTpower, Inc.
545 Oakmead Parkway
Sunnyvale, California 94088
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Page 9 of 12 Pages
BUSINESS ADDRESS AND PRINCIPAL
NAME OCCUPATION OR EMPLOYMENT
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Joseph A. Mollica Chairman of the Board and Chief
Director Executive Officer
Pharmacopeia, Inc.
201 College Road East
Princeton, New Jersey 08540
Glenn M. Mueller General Partner
Director Mayfield Fund
2800 Sand Hill Road
Menlo Park, California 94025
Mark W. Perry 2606 Jackson Street
Vice Chairman of the Board San Francisco, California 94115
Lucille Shapiro The Chair of the Department
Director of Developmental Biology
Stanford University School of Medicine
Stanford, California 94305-5427
James G. Treybig President & Chief Executive Officer
Director Tandem Computers, Inc.
10436 North Tantau Avenue
Cupertino, California 95014
Forest Baskett Silicon Graphics, Inc.
Senior Vice President, 2011 North Shoreline Boulevard
Research and Development, Mountain View, California 94043-1389
and Chief Technical Officer
Kenneth L. Coleman Silicon Graphics, Inc.
Senior Vice President, 2011 North Shoreline Boulevard
Administration Mountain View, California 94043-1389
Stephen Goggiano Silicon Graphics, Inc.
Senior Vice President/ 2011 North Shoreline Boulevard
Operations Mountain View, California 94043-1389
Gary L. Lauer Silicon Graphics, Inc.
Senior Vice President, 2011 North Shoreline Boulevard
North American Field Operations Mountain View, California 94043-1389
Stanley J. Meresman Silicon Graphics, Inc.
Senior Vice President, Finance 2011 North Shoreline Boulevard
and Chief Financial Officer Mountain View, California 94043-1389
Michael J. Ramsay Silicon Graphics, Inc.
Senior Vice President, 2011 North Shoreline Boulevard
Visual Systems Group Mountain View, California 94043-1389
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Page 10 of 12 Pages
BUSINESS ADDRESS AND PRINCIPAL
NAME OCCUPATION OR EMPLOYMENT
- ------------------------------ ------------------------------------------
Wei Yen Silicon Graphics, Inc.
Senior Vice President, 2011 North Shoreline Boulevard
Computer Systems Group Mountain View, California 94043-1389
William M. Kelly Silicon Graphics, Inc.
Vice President, Business 2011 North Shoreline Boulevard
Development, General Mountain View, California 94043-1389
Counsel and Secretary
Dennis P. McBride Silicon Graphics, Inc.
Vice President, Controller 2011 North Shoreline Boulevard
Mountain View, California 94043-1389
Thomas J. Oswold Silicon Graphics, Inc.
Vice President, Finance 2011 North Shoreline Boulevard
Mountain View, California 94043-1389
Tommy G. Whiteside Silicon Graphics, Inc.
Vice President 2011 North Shoreline Boulevard
President, MIPS Mountain View, California 94043-1389
Technologies, Inc.
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Page 11 of 12 Pages
INDEX TO EXHIBITS
EXHIBIT PAGE
- ------- ----
A: Stock Purchase Agreement dated July 31, 1992 by and between -
Silicon Graphics, Inc. and Control Data Systems, Inc.*
B: Letter agreement dated February 17, 1994 between Silicon 12
Graphics, Inc. and Control Data Systems, Inc.
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* Incorporated by reference to Schedule 13D dated August 19, 1992 filed by
Silicon Graphics, Inc. with the Securities and Exchange Commission.
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Page 12 of 12 Pages
EXHIBIT B
February 17, 1994
VIA FEDERAL EXPRESS
- -------------------
Control Data Systems, Inc.
4201 Lexington Avenue North
Arden Hills, MN 55126
Attention: Corporate Secretary
Ladies and Gentlemen:
We understand that Mark Perry has advised you that he will not stand for re-
election as a director of Control Data Systems, Inc. ("CDSI") at CDSI's upcoming
annual stockholders' meeting. This letter will confirm our agreement that,
effective on the expiration of Mr. Perry's current term as a CDSI director,
Silicon Graphics, Inc. ("SGI") will relinquish its right to designate a director
of CDSI pursuant to Section 4.3 of the Stock Purchase Agreement between us dated
July 31, 1992. Please acknowledge our agreement by countersigning the enclosed
copy of this letter and returning it in the envelope provided.
SILICON GRAPHICS, INC.
/s/ William M. Kelly
------------------------------------
William M. Kelly
Vice President, Business Development,
General Counsel and Secretary
AGREED AND ACKNOWLEDGED:
CONTROL DATA SYSTEMS, INC.
/s/ Ralph W. Beha
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Name: Ralph W. Beha
Title: General Counsel and Secretary
