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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): April 3, 2001
COMPUTER NETWORK TECHNOLOGY CORPORATION
(Exact Name of Registrant as Specified in Charter)
Minnesota 0-139944 41-1356476
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
6000 Nathan Lane North, Minneapolis, MN 55442
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (763) 268-6000
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
On April 3, 2001, the Registrant acquired all of the issued
and outstanding capital stock of Articulent Inc., a Delaware corporation
("Articulent") and certain intangible assets from Ernest J. Parsons. Articulent
is a provider of storage management services, enabling companies to store,
protect and manage business-critical information. Founded in 1989, Articulent
provides professional services, specialized consulting, implementation, and
critical infrastructure solutions to manage data.
The purchase price was approximately $12 million in cash.
Articulent had approximately $24 million of balance sheet liabilities and $19
million of tangible assets as of February 28, 2001. The acquisition will be
accounted for under the purchase method of accounting. The Registrant is in the
process of evaluating the allocation of purchase price to the assets acquired
(principally accounts receivable, inventory and fixed assets) and liabilities of
Articulent (principally accounts payable, accrued expenses and bank debt). The
Registrant believes the fair value of the accounts receivable, inventory and
fixed assets acquired is approximately $19 million. The cash purchase price was
paid utilizing the Registrant's existing working capital resources.
In connection with the acquisition, the Registrant agreed to
make additional payments of up to $3.5 million to Ernest J. Parsons upon
attainment by Articulent of certain revenue and operating income targets. Any
payment would be due prior to June 30, 2002. The calculation of the payment of
additional purchase price is set forth in Exhibit 99.1 hereto. As used in that
Exhibit, "Buyer" means the Registrant, Seller means Ernest J. Parsons, and the
Company means Articulent. In addition to the foregoing, Articulent adopted a
bonus plan under which bonus payments of up to $6.5 million will be made upon
attainment by Articulent of certain revenue and operating income targets. The
bonus plan is attached hereto as Exhibit 99.2. The Registrant guaranteed the
payment and performance of Articulent under the bonus plan to Ernest J. Parsons.
The words "may," "should," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "intend," "potential" or "continue" and similar
expressions are generally intended to identify forward-looking statements. These
forward-looking statements involve risks and uncertainties. Actual results could
differ materially from those expressed or implied by these forward-looking
statements as a result of certain risk factors, including but not limited to (i)
competitive factors, including pricing pressures; (ii) variability in quarterly
sales; (iii) economic trends generally and in various geographic markets; (iv)
relationships with our strategic partners; (v) unanticipated risks associated
with introducing new products and features, including Propelis BPm (TM) ; (vi)
technological change affecting our products; (vii) ability to successfully
integrate Articulent into our existing business; and (viii) other events and
other important factors disclosed previously and from time to time in our
filings with the U.S. Securities and Exchange Commission. We assume no
obligation to update any forward-looking statements. These statements are only
predictions. Although we believe that the expectations reflected in the
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forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired: The Registrant will file
any financial statements required under Item 7 of this form within the time
period provided therefor.
(b) Pro Forma Financial Information: The Registrant will file any pro
forma information required under Item 7 of this form within the time period
provided therefor.
(c) Exhibits:
99.1 Calculation of Additional Purchase Price.
99.2 Articulent One-Time Bonus Plan.
[Remainder of page is blank.]
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SIGNATURE
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 thereunto duly authorized.
Date: April 16, 2001 COMPUTER NETWORK
TECHNOLOGY CORPORATION
By /s/ Gregory T. Barnum
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Gregory T. Barnum
Chief Financial Officer
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EXHIBIT INDEX
99.1 Calculation of Additional Purchase Price.
99.2 Articulent One-Time Bonus Plan.
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