UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 6)
The Continuum Company, Inc.
(Name of Issuer)
Common Stock, Par Value $.10 Per Share
(Title of Class of Securities)
212180
(CUSIP Number)
Copy to:
Robert C. Canfield, Esq. John F. Marvin, Esq.
DST Systems, Inc. Watson & Marshall, L.C.
1055 Broadway, 9th Floor 1010 Grand Avenue, Suite 500
Kansas City, Missouri 64105 Kansas City, Missouri 64106
(816) 435-1000 (816) 842-3132
FAX: (816) 435-8630 FAX: (816) 842-1247
(Name, Address and Telephone Number of Persons Authorized
to receive Notices and Communications)
August 1, 1996
(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. [ ]
SCHEDULE 13D
1. Name Of Reporting Person
S.S. or I.R.S. Identification No. Of Above Person:
DST Systems, Inc.
2. Check The Appropriate Box If A Member Of A Group: (a) [ ] (b) [ ]
3. SEC Use Only
4. Source of Funds: N/A
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: 0
8. Shared Voting Power: 0
9. Sole Dispositive Power: 0
10. Shared Dispositive Power: 0
11. Aggregate Amount Beneficially Owned By Each Reporting Person: 0
12. Check Box If The Aggregate Amount In Row (11) Excludes Certain Shares [ ]
13. Percent Of Class Represented By Amount In Row (11) 0%
14. Type Of Reporting Person: CO
AMENDMENT NO. 6 TO SCHEDULE 13D
Under the Securities Exchange Act of 1934
This Amendment No. 6 to Schedule 13D is filed on behalf of DST
Systems, Inc., a Delaware corporation ("DST") to reflect recent
developments in connection with DST's ownership of the common stock, $.10
par value, of The Continuum Company, Inc., a Delaware corporation
("Issuer"). Reference is made to the initial statement on Schedule 13D
dated as of October 1, 1993 (the "DST Statement") as amended by Amendments
No. 1, 2, 3, 4, and 5 thereto, dated December 1, 1993, December 22, 1993,
January 6, 1994, January 19, 1994, and November 21, 1995, respectively.
The DST Statement is hereby further amended and supplemented as follows:
Item 1. Security and Issuer.
The class of equity securities to which this Schedule 13D relates is
the common stock, $0.10 par value per share ("CNU Common Stock"), of
Issuer. The principal executive offices of Issuer are located at 9500
Arboretum Boulevard, Austin, Texas 78759-6399.
Item 2. Identity and Background.
This statement is being filed on behalf of DST. The principal
executive office of DST is located at 1055 Broadway, Kansas City, Missouri
64105. DST Systems Inc., a Missouri corporation, was reorganized into DST
in August, 1995.
DST provides sophisticated information processing and computer
software services and products, primarily to mutual funds, insurance
providers, banks and other financial services organizations.
Kansas City Southern Industries, Inc., a Delaware corporation
("KCSI"), reduced its ownership in DST on October 31, 1995 through a
primary and secondary public offering of 25,300,000 shares of DST's common
stock. DST is no longer a wholly-owned subsidiary of KCSI, and KCSI
currently owns approximately 40 percent of the outstanding common stock of
DST. In addition, Messrs. A. Edward Allinson and Michael G. Fitt, who are
directors of DST, are also directors of KCSI. DST has not entered into any
agreements with respect to its management or corporate policies with KCSI.
The existence of cumulative voting and the exemption of KCSI from DST's
Stockholders' Rights Plan provide KCSI with the potential to effectively
control the corporate governance of DST. However, KCSI disclaims control
of DST and beneficial ownership of CNU Common Stock as a result of its
stock ownership in DST.
Neither DST nor any of its executive officers or directors hereinafter
listed has, during the last five years, been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) nor been
a party to a civil proceeding of a judicial or administrative body
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.
Each of the executive officers and directors whose names and business
addresses appear below is a U.S. citizen and is principally employed by DST
or its affiliates in the capacities shown, except as indicated otherwise.
The business address of such officers and directors of DST is 1055
Broadway, Kansas City, Missouri 64105.
DST Executive Officers
Name Office
Thomas A. McDonnell President/Chief Executive Officer
Thomas A. McCullough Executive Vice President
Morton B. Comer Senior Vice President
Robert C. Canfield Senior Vice President/General Counsel/Secretary
James P. Horan Chief Information Officer
Kenneth V. Hager Vice President/Chief Financial Officer/Treasurer
Charles W. Schellhorn President, Output Technologies, Inc.
Michael A. Waterford Group Vice President
Robert L. Tritt Group Vice President
John W. McBride Group Vice President
J. Philip Kirk, Jr. Vice President
Joan J. Horan Vice President
John T. O'Neal Vice President
James H. Reinert Vice President
John J. Faucett Controller
Michael Winn DST International Limited, United Kingdom-Manager,
not a U.S. citizen
DST Directors
Name Office
Thomas A. McDonnell President/Chief Executive Officer of DST
Systems, Inc.
Thomas A. McCullough Executive Vice President of DST Systems, Inc.
A. Edward Allinson Chairman of the Board of Boston Financial Data
Services. Executive Vice President of State
Street Bank and Trust Company
Michael G. Fitt Retired
M. Jeannine Strandjord Senior Vice President and Treasurer of Sprint
Corporation
William C. Nelson Chairman of the Board, Chief Executive Officer and
President of Boatmen's First National Bank of
Kansas City
Item 3. Source and Amount of Funds or Other Consideration.
Not applicable to transaction prompting amendment.
Item 4. Purpose of Transaction.
DST has no plans or intentions which relate to or would result in any
of the events described in paragraphs (a) through (j) of Item 4 of the
instructions to Schedule 13D.
Item 5. Interest in Securities of the Issuer.
With respect to DST's holdings of CNU Common Stock, the responses to
Items 7, 8, 9, 10, 11 and 13 of the inside cover page of this Schedule 13D
are hereby incorporated by reference in response to this Item 5. DST made
a charitable gift of 75,000 shares of CNU Common Stock on July 30, 1996,
which was not a material disposition under 17 C.F.R. Section 240.13d-2(a).
DST exchanged on August 1, 1996 the remaining shares of CNU Common Stock for
shares of common stock, $1.00 par value, of Computer Sciences Corporation,
a Nevada corporation ("CSC"). The exchange occurred as the result of a
merger between a direct, wholly-owned subsidiary of CSC and Issuer (the
"Merger"). For information about the exchange of CNU Common Stock for
shares of common stock of CSC, see the Schedule 13D DST filed on August 12,
1996, relating to its acquisition of common stock of CSC, the proxy
statement/prospectus contained in the Form S-4, as amended, filed by CSC as
of June 10, 1996, and the Form 8-K filed by CSC as of August 1, 1996. The
mean price of CNU Common Stock on July 30, 1996 was $52.6875 and on August
1, 1996 was $55.00.
Item 6. Contracts, Arrangements, Understandings or Relationships
with respect to Securities of the Issuer.
DST entered into a Stockholder Agreement dated April 28, 1996, with
CSC in which DST agreed to vote in favor of the Merger. DST also agreed
not to directly or indirectly (i) sell, pledge, or otherwise dispose of its
holdings of CNU Common Stock, or (ii) grant any proxy or power of attorney
with respect to such CNU Common Stock, or deposit such CNU Common Stock
into a voting agreement.
By letter dated April 28, 1996, to CSC, DST also made certain
representations that it would not transfer, sell or dispose of CNU Common
Stock until certain circumstances relating to the Merger occurred.
Item 7. Material to be Filed as Exhibits.
The following were referenced in Item 6 of this Schedule 13D and are
filed herewith as exhibits to this Schedule 13D:
99.7 The Stockholder Agreement dated April 28, 1996; and
99.8 The DST letter to CSC dated April 28, 1996.
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in the statement
is true, complete and correct.
Dated as of August 9, 1996.
DST SYSTEMS, INC.
By: /s/ Robert C. Canfield
Robert C. Canfield
Senior Vice President,
General Counsel and Secretary
INDEX TO EXHIBITS
Exhibit No. Description
99.7 Stockholder Agreement dated April 28, 1996
99.8 DST letter to CSC dated April 28, 1996
EXHIBIT 99.7
EXECUTION COPY
STOCKHOLDER AGREEMENT
AGREEMENT, dated April 28, 1996 (this "Agreement"), by and between
Computer Sciences Corporation, a Nevada corporation ("Parent"), and DST
Systems, Inc., a Delaware corporation ("Stockholder").
WITNESSETH:
WHEREAS, concurrently herewith, Parent, Continental Acquisition, Inc.,
a Delaware corporation and a direct wholly-owned subsidiary of Parent
("Merger Sub"), and The Continuum Company, Inc., a Delaware corporation
(the "Company"), are entering into an Agreement and Plan of Merger (as such
agreement may hereafter be amended from time to time, the "Merger
Agreement") pursuant to which Merger Sub will be merged with and into the
Company (the "Merger");
WHEREAS, Stockholder owns the number of shares, par value $.10 per
share, of common stock of the Company (the "Stock" or "Company Common
Stock") set forth opposite Stockholder's name on Schedule I hereto;
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent has required that Stockholder agree, and Stockholder has
agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
premises, representations, warranties, covenants and agreements contained
herein, the parties hereto hereby agree as follows:
1. Provisions Concerning Company Common Stock. Stockholder hereby
agrees that during the period commencing on the date hereof and continuing
until the Termination Date (as defined in Section 3 below), at any meeting
of the holders of Company Common Stock, however called, where approval of
the Merger has been recommended by the Board of Directors of the Company,
or in connection with any written consent of the holders of Company Common
Stock, where approval of the Merger has been recommended by the Board of
Directors of the Company, Stockholder shall vote (or cause to be voted) the
Stock held of record or Beneficially Owned (as defined below) by
Stockholder, whether now owned or hereafter acquired, in favor of approval
of the Merger Agreement and any actions required in furtherance thereof and
hereof. For purposes of this Agreement, "Beneficially Own" or "Beneficial
Ownership" with respect to any securities shall mean having "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
including pursuant to any agreement, arrangement or understanding, whether
or not in writing; provided, however, any Stock owned by Thomas A.
McDonnell shall not be deemed to be Beneficially Owned by Stockholder.
Stockholder shall have no obligation to call or convene any meeting of
Company stockholders or to solicit any proxies respecting any such meeting.
2. Covenants, Representations and Warranties. Stockholder hereby
represents and
warrants to Parent as follows:
(a) Ownership of Stock. Stockholder (i) is the Beneficial Owner
of the Stock set forth opposite Stockholder's name on Schedule I hereto,
which at the date hereof and at all times up until the Termination Date
will be free and clear of any liens, claims, charges, options, warrants or
other encumbrances or commitments; (ii) does not Beneficially Own any
shares of Company Common Stock other than the Stock set forth on Schedule I
hereto; and (iii) has full power and authority to make, enter into and
carry out the terms of this Agreement.
(b) Restriction on Transfer. Proxies and Non-Interference. Prior
to the Termination Date, Stockholder shall not, directly or indirectly: (i)
except as contemplated by the Merger Agreement, offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, sale, transfer, tender,
pledge, encumbrance, assignment or other disposition of, any or all of the
Company Common Stock Beneficially Owned by Stockholder or any interest
therein; (ii) grant any proxies or powers of attorney with respect to any
Stock, or deposit any Stock into a voting agreement, except in connection
with the Merger; or (iii) take any action that would make any
representation or warranty of Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling Stockholder from
performing Stockholder's obligations under this Agreement.
(c) Reliance by Parent. Stockholder understands and acknowledges
that Parent is entering into, and causing Merger Sub to enter into, the
Merger Agreement in reliance upon Stockholder's execution and delivery of
this Agreement.
3. Termination. Except as otherwise provided herein, the
covenants and agreements contained herein with respect to the Stock shall
terminate upon the earlier of (a) termination of the Merger Agreement in
accordance with its terms, (b) upon filing of a Certificate of Merger with
the Secretary of State of Delaware, and (c) September 30, 1996 (the
"Termination Date").
4. Stockholder Capacity. Stockholder is executing and delivering
this Agreement solely in its capacity as the record and Beneficial Owner of
the Shares of Company Common Stock subject hereto.
5. Miscellaneous.
(a) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof.
(b) Certain Events. Stockholder agrees that this Agreement and
the obligations hereunder shall attach to shares of Company Common Stock
Beneficially Owned by Stockholder and shall be binding upon any person or
entity to which legal or beneficial ownership of such Stock shall pass,
whether by operation of law or otherwise, including, without limitation,
Stockholder's successors. Notwithstanding any transfer of Stock, the
transferor shall remain liable for the performance of all obligations under
this Agreement of the transferor.
(c) Assignment. This Agreement shall not be assigned by operation
of law or otherwise without the prior written consent of the other party,
provided that Parent may assign, in its sole discretion, its rights and
obligations hereunder to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Parent of its obligations
hereunder if such assignee does not perform such obligations.
(d) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except
upon the execution and delivery of a written agreement executed by the
parties hereto.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly received if so given) by hand delivery,
telegram, telex or telecopy, or by mail (registered or certified mail,
postage prepaid, return receipt requested) or by any courier service, such
as Federal Express, providing proof of delivery. All communications
hereunder shall be delivered to the respective parties at the following
addresses:
If to Stockholder: At the address set forth
on Schedule I hereto
If to Parent
or Merger Sub: Computer Sciences Corporation
2100 E. Grand Avenue
El Segundo, California 90245
Telephone: (310) 615-1700
Facsimile: (310) 322-9767
Attention: Hayward D. Fisk
with a copy to: Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071-3197
Attention: Ronald S. Beard, Esq.
Telephone: (213) 229-7000
Facsimile: (213) 229-7520
or to such other address as the person to whom notice is given may have
previously furnished to
the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or portion of any provision in such
jurisdiction, and this Agreement will be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal or unenforceable provision
or portion of any provision had never been contained herein.
(g) Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages
for which it would not have an adequate remedy at law for money damages,
and therefore each of the parties hereto agrees that in the event of any
such breach the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other
equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available
in respect hereof at law or in equity, or to insist upon compliance by any
other party hereto with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or
other right, power or remedy or to demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not intended
to be for the benefit of, and shall not be enforceable by, any person or
entity who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware, without giving effect
to the principles of conflicts of law thereof.
(1) Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
(m) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same Agreement.
IN WITNESS WHEREOF, Parent and Stockholder have caused this Agreement
to be
duly executed as of the day and year first above written.
COMPUTER SCIENCES CORPORATION
By: /s/ Van B. Honeycutt
Name: Van B. Honeycutt
Title: President
DST SYSTEMS, INC.
By: /s/ Thomas A. McDonnell
Name: Thomas A. McDonnell
Title: President and CEO
Schedule I to
Stockholder Agreement
Name and Address Number of Shares Owned
DST Systems, Inc. 5,549,141
1055 Broadway, 9th Floor
Kansas City, Missouri 64105
Attn: President
EXHIBIT 99.8
EXECUTION COPY
DST SYSTEMS, INC.
1055 Broadway
Kansas City, Missouri 64105
April 28, 1996
Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
Dear Sirs:
Reference is made to the provisions of the Agreement and
Plan of Merger, dated as of April 28, 1996 (together with any
amendments thereto, the "Merger Agreement"), among The Continuum
Company, Inc., a Delaware corporation (the "Company"), Computer
Sciences Corporation, a Nevada corporation ("Parent"), and
Continental Acquisition, Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Merger Sub"), pursuant to
which Merger Sub will be merged with and into the Company, with
the Company continuing as the surviving corporation (the
"Merger"). This letter constitutes the undertakings of the
undersigned contemplated by the Merger Agreement.
DST Systems, Inc., a Delaware corporation ("DST"),
understands that it may be deemed to be an "affiliate" of the
Company, as such term is defined for purposes of Rule 145 ("Rule
145") promulgated under the Securities Act of 1933, as amended
(the "Securities Act"), and that the transferability of the
shares of common stock, par value $1.00 per share, of Parent (the
"Parent Shares") which DST will receive upon the consummation of
the Merger in exchange for its shares of common stock of the
Company (the "Company Shares") is restricted. Nothing herein
shall be construed as an admission that DST is an affiliate.
DST hereby represents, warrants and covenants to Parent
that:
(a) DST will not transfer, sell or otherwise dispose of
any of the Parent Shares except (i) pursuant to an effective
registration statement under the Securities Act, or (ii) as
permitted by, and in accordance with, Rule 145, if applicable, or
another applicable exemption under the Securities Act; and
(b) DST will not (i) transfer, sell or otherwise dispose
of any Company Shares prior to the earlier of (x) the termination
of the Merger Agreement, (y) upon the filing of a Certificate of
Merger with the Secretary of State of Delaware or (z) September
30, 1996 or (ii) if the Merger is consummated, sell or otherwise
reduce its risk (within the meaning of the Securities and
Exchange Commission's Financial Reporting Release No. 1.,
"Codification of Financial Reporting Policies," Section 201.01
[47 F. R. 21028] (May 17, 1982) with respect to any Parent Shares
until after such time (the "Delivery Time") as financial results
reflecting at least 30 days of post-Merger combined operations of
Parent and the Company have been published by Parent, except as
permitted by Staff Accounting Bulletin No. 76 issued by the
Securities and Exchange Commission; and
(c) DST shall execute and deliver to Vinson & Elkins,
L.L.P., counsel to the Company, and to the Company (with a copy
to Parent), a certificate stating that as of the date of the
certificate DST has no plan or intention of disposing of the
Parent Shares to be received in the Merger, such certificate to
be delivered at such time or times as may be reasonably requested
by such law firm or the Company, as the case may be, in
connection with such law firm's delivery of a tax opinion with
respect to the transactions contemplated by the Merger Agreement.
DST hereby acknowledges that, except as otherwise provided
in the Merger Agreement and the Letter Agreement dated April 28,
1996 between DST and Parent regarding registration rights, Parent
is under no obligation to register the sale, transfer, pledge or
other disposition of the Parent Shares or to take any other
action necessary for the purpose of making an exemption from
registration available.
DST understands that Parent will issue stop transfer
instructions to its transfer agents with respect to the Parent
Shares and that a restrictive legend will be placed on the
certificates delivered to it evidencing the Parent Shares in
substantially the following form:
"This certificate and the shares represented hereby have
been issued pursuant to a transaction governed by Rule 145
("Rule 145") promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), and may not be sold or
otherwise disposed of unless registered under the Securities
Act pursuant to a Registration Statement in effect at the
time or unless the proposed sale or disposition can be made
in compliance with Rule 145 or without registration in
reliance on another exemption therefrom. Reference is made
to that certain letter agreement, dated April 28 , 1996,
between the Holder and the Issuer, a copy of which is on
file in the principal office of the Issuer which contains
further restrictions on the transferability of this
certificate and the shares represented hereby."
The term Parent Shares as used in this letter shall mean and
include not only the common stock of Parent as currently
constituted, but also any other stock which may be issued in
exchange for, in lieu of, or in addition to, all or any part of
such Parent Shares.
DST hereby acknowledges that the receipt of this letter by
Parent is an inducement and a condition to Parent's obligation to
consummate the Merger under the Merger Agreement and that DST
understands the requirements of this letter and the limitations
imposed upon the transfer, sale or other disposition of the
Company Shares and the Parent Shares.
Very truly yours,
DST Systems, Inc.
By: /s/ Thomas A. McDonnell
Name: Thomas A. McDonnell
Title: President and CEO
