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SECURITIES 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 (Date of earliest event reported): SEPTEMBER 27, 1996
DATAWORKS CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
0-26814 33-0209937
(Commission File No.) (IRS Employer Identification No.)
5910 PACIFIC CENTER BLVD., SUITE 300
SAN DIEGO, CALIFORNIA 92121
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (619) 546-9600
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 27, 1996, DataWorks Acquisition Sub., Inc. ("DataWorks
Sub"), a Minnesota corporation and a wholly owned subsidiary of DataWorks
Corporation ("DataWorks"), was merged with and into DCD Corporation ("DCD"), a
Minnesota corporation, pursuant to an Agreement and Plan of Merger and
Reorganization, dated August 16, 1996, among DataWorks, DataWorks Sub, DCD and
certain stockholders of DCD (the "Plan of Reorganization"). Upon consummation of
the merger of DataWorks Sub with DCD (the "Merger"), DataWorks Sub ceased to
exist, and DCD, the surviving corporation, became a wholly owned subsidiary of
DataWorks. DCD designs, develops, markets and supports business management
software for "make-to-order" manufacturing companies, primarily job shops and
custom manufacturers. DataWorks intends to continue operating the DCD business
in order to continue servicing these organizations. The Merger is intended to be
a tax-free reorganization for federal income tax purposes and is to be accounted
for as a pooling of interests by DataWorks.
Under the terms of the Plan of Reorganization, each share of DCD Common
Stock, no par value, outstanding immediately prior to the closing of the Merger
converted into approximately 3.36 shares of Common Stock, no par value, of
DataWorks ("DataWorks Common Stock"). At the closing of the Merger, 1,763,704
shares of DataWorks Common Stock (the "Merger Consideration") were issued, which
represented approximately 22.6% of the shares of DataWorks Common Stock
outstanding immediately after consummation of the Merger. Pursuant to the Plan
of Reorganization, shares representing ten percent of the Merger Consideration
(the "Escrow Shares") were issued in the name of an Escrow Agent. In the event
of indemnification claims for which compensation is granted pursuant to the
Escrow Agreement, dated August 16, 1996, among DataWorks, certain stockholders
of DCD, Robert W. Brandel as representative of the DCD stockholders and
ChaseMellon Shareholder Services as Escrow Agent, shares with a value sufficient
to provide indemnification will be issued in the name of DataWorks. The Escrow
Shares will be released, with certain limitations, beginning September 27, 1997.
A cash payment was made for fractional shares resulting from the conversion.
DataWorks used its current cash resources to fund the payments for fractional
shares.
Robert W. Brandel, the President and a director of DCD, a Vice
President of DataWorks and a former shareholder of DCD, received 667,185 shares
of DataWorks Common Stock and $21.70 in lieu of fractional shares in exchange
for his DCD Common Stock in the Merger.
DataWorks expects to incur charges currently estimated to be
approximately $2.5 million, net of taxes, to reflect costs associated with
combining the operations of the two companies and transaction fees and costs
incident to the Merger. This amount is a preliminary estimate and there can be
no assurance that DataWorks will not incur additional charges to reflect costs
associated with the Merger.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
i. Financial Statements of DCD Corporation on December 31,
1995 and 1994, and for each of the years in the three-year
period ended December 31, 1995, with an audit report by
Price Waterhouse LLP, are incorporated by reference from
pages F-21 through F-30 of Registrant's Registration
Statement on Form S-4 (No. 333-11741) (the "Registration
Statement").
ii. Unaudited interim financial statements of DCD Corporation
at June 30, 1996 and for the six-month periods ended June
30, 1996 and 1995 are incorporated by reference from pages
F-22 through F-30 of the Registration Statement.
(b) PRO FORMA FINANCIAL INFORMATION
The pro forma financial information for the period through
June 30, 1996 is incorporated by reference to the Unaudited
Pro Forma Combined Condensed Financial Information at pages 47
through 50 of the Registration Statement.
(c) EXHIBITS.
2.1 Agreement and Plan of Merger and Reorganization dated
August 16, 1996 among DataWorks Corporation,
DataWorks Acquisition Sub., Inc., DCD Corporation and
certain shareholders of DCD.*
99.1 Press release, dated September 27, 1996.
99.2 Value Added Reseller Agreement dated December 27,
1995 between the Registrant and VMARK Software, Inc.+
*Filed as an exhibit to Registrant's Registration Statement on Form S-4
(No. 333-11741) and incorporated by reference herein.
+Confidential treatment has been requested with respect to certain
portions of this exhibit. Omitted portions have been filed separately
with the Securities and Exchange Commission.
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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.
DATAWORKS CORPORATION
Dated: October 7, 1996 By: /s/ Stuart W. Clifton
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Stuart W. Clifton
Chairman of the Board, Chief Executive
Officer and President
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INDEX TO EXHIBITS
2.1 Agreement and Plan of Merger and Reorganization
dated August 16, 1996 among DataWorks Corporation,
DataWorks Acquisition Sub., Inc., DCD Corporation
and certain stockholders of DCD.*
23.1 Consent of Price Waterhouse LLP.
99.1 Press release, dated September 27, 1996.
99.2 Value Added Reseller Agreement dated December 27,
1995 between the Registrant and VMARK Software, Inc.+
*Filed as an exhibit to Registrant's Registration Statement on Form
S-4 (No. 333-11741) and incorporated by reference herein.
+Confidential treatment has been requested with respect to certain
portions of this exhibit. Omitted portions have been filed separately
with the Securities and Exchange Commission.
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