-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PYLZgrXAMr7bGxBTfmARAtr7zneX2VHJoee1FHFKU+WKWEdOZq9m7TZMiuHC7yPg c+15OpiJcCTXTbor6GGQpA== 0000950135-97-005197.txt : 19971229 0000950135-97-005197.hdr.sgml : 19971229 ACCESSION NUMBER: 0000950135-97-005197 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19971224 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRIMARK CORP CENTRAL INDEX KEY: 0000356064 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 382383282 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-43299 FILM NUMBER: 97744608 BUSINESS ADDRESS: STREET 1: 1000 WINTER ST STE 4300N CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6174666611 MAIL ADDRESS: STREET 1: 1000 WINTER ST STREET 2: STE 4300 NORTH CITY: WALTHAM STATE: MA ZIP: 02154 S-3 1 PRIMARK CORPORATION 1 THE INFORMATION CONTAINED IN THIS DOCUMENT IS ------------------------------------------------------------- CONFIDENTIAL ------------------------------------------------------------- WE WANT TO PROVIDE YOU WITH THE BEST SERVICE POSSIBLE PLEASE HELP US IN OUR EFFORT BY NOTING THE FOLLOWING POINTS: - -- WRITE LEGIBLY. - -- SPECIFY BLACKLINING REQUIREMENTS. - -- USE MOST RECENT VERSION OF DOCUMENT TO MARK-UP. - -- ALLOW 1/4" FROM EDGE OF PAGE WHEN MAKING CHANGES. - -- AVOID USE OF FELT-TIPPED OR BLUE INK PENS AND SOFT LEAD PENCILS. - -- INDICATE MINOR CHANGES WITH AN "X" IN THE MARGIN. - -- AVOID USE OF "POST-ITS" AND STAPLES WHENEVER POSSIBLE. EDGAR FILERS: - -- SUBMIT EDGAR EXHIBITS WELL IN ADVANCE OF FILING DATE. - -- SUBMIT CIK & CCC #S IN ADVANCE FOR TEST FILING. TELEPHONE: (617) 542-1926 FAX: (617) 542-5790 YOUR CUSTOMER SERVICE REPRESENTATIVES ARE:
(8:00 A.M. -- 4:00 P.M.) (4:00 P.M. -- 12:00 A.M.) (12:00 A.M. -- 8:00 A.M.) - ---------------------------- ---------------------------- ---------------------------- Bob Strause Rick Lydon John Connolly Steve Muller Michael Boris Peter Hanlon Tim Sweeney Mike Miller Kevin Robinson Tom Walsh Peggy Bayliss Brian Kostanski Sandy Bandanza Scott Gagnon Tracy Goulet
(LOGO) BOWNE OF BOSTON 411 D STREET, BOSTON, MA 02210 2 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1997 REGISTRATION NO. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 PRIMARK CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MICHIGAN 38-2383282 (STATE OF INCORPORATION OF (IRS EMPLOYER CORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1000 WINTER STREET SUITE 4300N WALTHAM, MASSACHUSETTS 02154 (781) 466-6611 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) MICHAEL R. KARGULA, ESQ. EXECUTIVE VICE PRESIDENT GENERAL COUNSEL AND SECRETARY PRIMARK CORPORATION 1000 WINTER STREET SUITE 4300N WALTHAM, MASSACHUSETTS 02150 (781) 466-661 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration statement is declared effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
============================================================================================================ PROPOSED MAXIMUM PROPOSED MAXIMUM AGGREGATE TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------ Common stock, without par value............. 2,200,000 $40.22 $88,484,000 $26,102.78 - ------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457 (c) of the Securities Act of 1933 based on the average of the high and low prices for shares of the Registrant's Common Stock on December 19, 1997 on the NYSE. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. IF, AS A RESULT OF STOCK SPLITS, STOCK DIVIDENDS OR SIMILAR TRANSACTIONS, THE NUMBER OF SECURITIES PURPORTED TO BE REGISTERED ON THIS REGISTRATION STATEMENT CHANGES, THE PROVISIONS OF RULE 416 SHALL APPLY TO THIS REGISTRATION STATEMENT AND THIS REGISTRATION STATEMENT SHALL BE DEEMED TO COVER THE ADDITIONAL SECURITIES RESULTING FROM THE SPLIT OF, OR THE DIVIDEND ON, THE SECURITIES COVERED BY THIS REGISTRATION STATEMENT. ================================================================================ 3 2,200,000 SHARES [PRIMARK LOGO] COMMON STOCK This Prospectus relates to 2,200,000 shares of Common Stock of Primark Corporation ("Primark" or the "Company") that may be offered from time to time by certain shareholders of the Company, who were the prior owners of ICV Limited ("ICV"), an indirect wholly owned subsidiary of the Company. See "Selling Shareholders." The Company will not receive any of the proceeds from the sale of such shares. The Common Stock is traded on the New York Stock Exchange ("NYSE") and Pacific Exchange under the symbol "PMK." On December 19, 1997, the last reported sale price of the Common Stock on the NYSE was $40.625 per share. The Company has been advised that the Selling Shareholders may sell, from time to time, in one or more transactions (which may include block transactions), all or a portion of their shares on the NYSE or the Pacific Stock Exchange, in special offerings, in the over-the-counter market, in negotiated transactions, through underwriters or otherwise at market prices prevailing at the time of sale or at negotiated prices. The Selling Shareholders have indicated that if any of the Common Stock offered hereby is sold through underwriters, brokers or dealers, then the Selling Shareholders may pay customary underwriting discounts and brokerage commissions and charges. The Selling Shareholders and any underwriters, brokers or dealers or other persons who participate with them in the distribution of the shares offered hereby may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), although the Selling Shareholders disclaim such status. Any commissions and discounts received by such underwriters, brokers or dealers, and any profit on the resale of the stock by such underwriters, brokers or dealers, may be deemed to be underwriting discounts and commissions under the Securities Act. The shares of Common Stock being offered hereby may also be sold by the Selling Shareholders pursuant to Rule 144 promulgated under the Securities Act. See "Plan of Distribution." The Company has entered into an agreement which provides for the sale of TASC, Inc. and The Analytic Sciences Corporation Limited, each, an indirect wholly owned subsidiary of the Company. See "The Company." FOR INFORMATION CONCERNING CERTAIN FACTORS RELATING TO THIS OFFERING, SEE "RISK FACTORS" ON PAGE FIVE OF THIS PROSPECTUS. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS DECEMBER 24, 1997. 4 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). Such reports, proxy statements and other information filed by the Company can be inspected and copied at the public reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices of the SEC located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and at 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such reports, proxy statements and other information can be obtained by mail from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC maintains a Web site that contains reports, proxy statements and other information regarding registrants that file electronically with the SEC which may be obtained at the SEC's Web site [http://www.sec.gov]. Such reports, proxy statements and other information can also be inspected at the offices of the NYSE, Inc., 20 Broad Street, New York, New York 10005; and the Pacific Exchange, Inc., 301 Pine Street, San Francisco, California 94104. The Company has filed with the SEC a Registration Statement on Form S-3 (herein together with all exhibits, referred to as the "Registration Statement") under the Securities Act with respect to the Common Stock being offered by this Prospectus. For further information with respect to the Company and the Common Stock offered hereby, reference is made to the Registration Statement and the exhibits and schedules thereto. Statements contained in this Prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance reference is made to the copy of such contract or document filed, or incorporated by reference, as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. The Registration Statement, together with exhibits and schedules thereto, may be inspected without charge at the public reference facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549. Copies of all or any part of the Registration Statement, may be obtained at prescribed rates from the public reference facilities of the SEC at its Washington, D.C. address. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company incorporates by reference the following documents heretofore filed with the SEC pursuant to the Exchange Act: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1996 and Amendment on Form 10-K/A dated December 11, 1997; 2. The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997; 3. The Company's Current Reports on Form 8-K dated January 7, 1997 (amending the Form 8-K filed November 14, 1996), February 4, 1997, April 3, 1997, April 18, 1997, June 19, 1997, July 11, 1997, July 28, 1997, December 9, 1997 and December 10, 1997 (amending the Form 8-K dated December 9, 1997); and 4. The description of the Company's Common Stock set forth in the Company's Form 10 dated November 17, 1981, the Company's form 8-A dated October 18, 1985, the Company's Form 8-A dated June 16, 1992 and the Company's Form 8-A dated June 20, 1997. All documents filed by the Company with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the Offering hereby shall be deemed to be incorporated by reference in this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be 2 5 incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of this Prospectus except as so modified or superseded. The Company will provide without charge, upon written or oral request, a copy of any or all of the documents containing information which is incorporated herein by reference, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed to Primark Corporation, Investor Relations, 1000 Winter Street, Suite 4300N, Waltham, Massachusetts 02154-1248, telephone: (781) 466-6611. 3 6 THE COMPANY The Company is a Michigan corporation organized in 1981. The Company is engaged principally in the information services industry serving two primary markets, financial information ("Financial Information") and applied technology ("Applied Technology"). The Company's Financial Information businesses consist of the operations of Datastream, Disclosure, DAFSA, I/B/E/S, ICV, Vestek, Worldscope, Baseline and WEFA. Primark also has an equity interest in Primark Decision Economics, Inc. Primark develops and markets "value-added" database and information products that cover established and emerging markets worldwide, as well as proprietary analytical software for the analysis and presentation of financial and economic information. Customers include investment managers, investment bankers, financial market traders, analysts, accounting and legal professionals and information and reference service providers. The Applied Technology activities, conducted through TASC, Yankee and WSI, provide a broad spectrum of information technology services and products primarily to United States government agencies principally involved in national security and intelligence related activities, as well as customers of real-time and historical weather information. Within Applied Technology, Yankee supplies market research to vendors and users of telecommunications and computing. On December 8, 1997, the Company entered into a stock purchase agreement providing for the sale of the outstanding securities of TASC, its subsidiaries, including WSI, and TASC U.K. to Litton Industries, Inc. and Litton U.K. Limited, respectively, for an aggregate purchase price of $432 million, as adjusted (the "Proposed TASC Sale"). Following consummation of the Proposed TASC Sale, the Company's management will focus its resources primarily on the Company's financial, economic and market research information services businesses. The Company also will focus its resources on opportunities for growth in the global market for information content. The Company's management intends to consider new approaches to its business systems and organizational structure to achieve efficiencies, improve profitability and customer service, and accelerate new product development. The Company's information content businesses will continue to receive information technology support from TASC through a three-year Information Technology Services Agreement (the "IT Services Agreement"), which is a part of the Proposed TASC Sale. The Company also continues to engage BT Alex. Brown Incorporated ("BT Alex. Brown") to assist the Company in evaluating strategic alternatives that could increase shareholder value. As part of this process, the Company anticipates that BT Alex. Brown will assist it in the preparation of information that could be furnished to parties that indicate an interest in acquiring the Company or key businesses other than those being disposed of in the Proposed TASC Sale. BT Alex. Brown had been initially retained earlier in 1997 when the Company was approached by various third parties regarding a possible sale of the Company. The Company, with BT Alex. Brown's assistance, will explore various strategic alternatives which could include, among other things, a sale of the Company, repurchase of the Company's shares of Common Stock, further reductions in bank debt or acquisitions in the financial economic and market research information services sector. It should be emphasized that, at this time, the Company has not made a decision to pursue any particular alternative, including without limitation, a sale of the Company. In June 1997, the Company adopted a formal plan to sell its non-core transportation services segment, TIMCO. The Company anticipates that the sale of TIMCO will be completed within one year at amounts which will at least approximate its net book value. The business of TIMCO, a wholly-owned subsidiary of the Company is being accounted for as a discontinued operation. For the year ended December 31, 1996, TIMCO employed 1,313 persons and reported revenues of $106.4 million. The Company's principal executive offices are located at Primark Corporation, 1000 Winter Street, Suite 4300N, Waltham, Massachusetts 02154, and its telephone number is (781) 466-6611. Further information on Primark's businesses can be accessed via the Internet through Primark's home page at http://www.primark.com. All of the product names referred to herein are trademarks owned by the Company or its subsidiaries and some are registered trademarks or are the subject of pending trademark applications. The Company's subsidiaries and affiliates referred to in this Prospectus include Baseline Financial Services Inc. ("Baseline"), Datastream International Limited and its affiliates ("Datastream"), Disclosure 4 7 Incorporated ("Disclosure"), Groupe DAFSA S.A. ("DAFSA"), I/B/E/S International, Inc. ("I/B/E/S"), ICV Limited ("ICV"), Vestek Systems, Inc. ("Vestek"), WEFA Holdings, Inc. ("WEFA"),Worldscope/Disclosure LLC ("Worldscope"), TASC, Inc. ("TASC"), The Analytic Sciences Corporation Limited ("TASC U.K."), WSI Corporation ("WSI"), Triad International Maintenance Corporation ("TIMCO"), Yankee Group Research, Inc. ("Yankee") and an equity interest in Primark Decision Economics, Inc. ("PDE"). RISK FACTORS FOREIGN CURRENCY EXCHANGE RATE RISK International revenues accounted for 21.3% of the Company's 1996 revenues. Since not all of the Company's revenues and expenses are incurred in U.S. dollars, the Company's operations have been and may continue to be affected by fluctuations in currency exchange rates. The Company engages in hedging activities including foreign currency options and forward contracts, in order to minimize the ongoing exposure to foreign currency exchange risk with respect to its foreign source operating income and cash flows. In 1996, the Company recorded a $1.9 million gain before income taxes for foreign currency transactions. With regard to foreign currency, the Company does have substantial foreign currency expenses, especially in the United Kingdom, which in part offset revenue losses due to currency fluctuations. In addition, the Company typically maintains foreign currency hedges for its significant foreign currency exposures. Excluding the operations of TASC and TIMCO, the Company would have had international revenues of approximately 59% for the year ending December 31, 1996. TECHNOLOGICAL CHANGES The Company operates principally in the information services industry, which is a rapidly changing and highly competitive industry. Even if the Company remains abreast of the latest developments and available technology, it could be adversely affected by technological advances and/or the introduction of new products and services in the information services industry. There are many large and successful companies which compete in the information services industry, many of which have greater resources. The future success of the Company will depend significantly on its ability to develop and deliver technologically advanced quality products and services. The Company's future results of operations could be adversely affected by the cost of developing such products and services. LEVEL OF INDEBTEDNESS The Company has substantial indebtedness. At September 30, 1997, the Company had consolidated total debt of $350.4 million and consolidated common shareholders' equity of $462.8 million. Subject to certain restrictions on the Company and certain subsidiaries, including the satisfaction of certain debt coverage tests, the Company and its subsidiaries may incur additional indebtedness from time to time for general corporate purposes, including but not limited to, acquisitions and capital expenditures. Historically, cash generated from operating activities, in conjunction with borrowings and proceeds from equity issuances, has been sufficient to meet its debt service requirements, acquisitions and investment and capital expenditure requirements. The Company believes that cash generated from operating activities, together with borrowings from existing and future credit facilities and proceeds from future equity issuances, will be sufficient to meet its future debt service requirements and to make anticipated acquisitions, investments and capital expenditures. However, there can be no assurances in this regard. Offsetting these risks, following consummation of the Proposed TASC Sale, the Company will redeem in full its $112 million of 8.75% Senior Notes due October 15, 2000, thereby reducing fixed charges. LOSS OF TASC Following the Proposed TASC Sale, the Company's business will principally serve institutions and professionals in the financial markets, although the Company will also have corporate and government customers in both the United States and other countries. As a result, any downturn in the financial markets could adversely affect to a greater degree the Company's overall revenues and profits. 5 8 DEPENDENCE ON FEDERAL GOVERNMENT CONTRACTS A substantial potion of the Company's revenues is derived from services performed directly or indirectly under contracts with the U.S. government. Revenues derived from contracts with the U.S. government, primarily at TASC, accounted for approximately 44%, 49% and 58% of the Company's revenues for the years ended December 31, 1996, 1995, and 1994, respectively. All contracts made with the U.S. government may be terminated by the U.S. government at any time, with or without cause. There can be no assurance that any existing or future contracts with the U.S. government would not be terminated or that the U.S. government will continue to use the Company's services at levels comparable to current use. Companies that contract with the U.S. government are subject to regular audits with respect to costs charged to the government. Such audits may result in the disallowance of amounts charged to or paid by the government. There can be no assurance that such disallowances will not be claimed or imposed against the Company, and if imposed, will not have a material impact on the Company. National and global political, social and economic events may affect U.S. national security programs. Contracts made with the U.S. government are normally subject to annual approval of funding. Limitations imposed on spending by U.S. government agencies, which might result from efforts to reduce the Federal deficit or for other reasons, may limit both the continued funding of existing contracts with the U.S. government and the ability to obtain additional contracts. These limitations, if significant, could have a material adverse effect on the Company. No assurance can be given that the current level of government spending for national security programs will continue, that the U.S. government will continue its commitment to programs in which the Company's products and services are applicable or that it will not be adversely affected by any decline in that spending or commitment by the U.S. government. The Company's dependence on federal government contracts will be substantially lowered upon consummation of the Proposed TASC Sale. DEPENDENCE ON TECHNICAL PERSONNEL The Company's future success is dependent upon its ability to attract and retain highly skilled personnel. The market for these professionals is competitive. There can be no assurance that the Company will continue to be successful in its effort to attract and retain such qualified professionals. NEED FOR SECURITY CLEARANCES TASC is involved in a number of classified programs. TASC's ability to maintain its current base of business and to grow in the future is based in part upon its ability to provide employees and facilities which meet rigorous U.S. government security requirements. There can be no assurance that TASC will be able to meet such requirements in the future. The Company's need for security clearances will be eliminated upon consummation of the Proposed TASC Sale. USE OF PROCEEDS The shares of Common Stock offered hereby are being sold by the Selling Shareholders. The Company will not receive any of the proceeds from the sale of such shares. The Company will pay approximately $100,000 in expenses associated with the Offering. DIVIDEND POLICY Since 1988, the Company has not paid cash dividends on its Common Stock. The Company currently intends to retain its earnings for future growth and therefore does not anticipate paying any cash dividends in the foreseeable future. See the Consolidated Financial Statements of the Company and the Notes thereto incorporated herein by reference concerning restrictions on dividends. 6 9 SELLING SHAREHOLDERS The Selling Shareholders (the former owners of ICV) acquired 2,200,000 shares of the Common Stock of Primark on October 24, 1996 when the Company acquired ICV. Pursuant to the terms of a Registration Rights Agreement between the Company and the Selling Shareholders dated as of October 24, 1996, the Company has agreed to provide registration rights with respect to such shares. The following table sets forth the position held with the Company by each Selling Shareholder for the past three years (except as otherwise noted), the number of shares of Common Stock beneficially owned by the Selling Shareholders as of November 30, 1997 and the number of shares of Common Stock offered by the Selling Shareholders pursuant to this Prospectus. The shares of Common Stock offered hereby are those shares that have been acquired at the time of the Company's acquisition of ICV. Because the Selling Shareholders may sell, from time to time, all or some of the Common Stock offered hereby, no estimate can be made of the aggregate amount of Common Stock that will be owned by each Selling Shareholder upon completion of the offering to which this Prospectus relates.
SHARES BENEFICIALLY OWNED AS OF NOVEMBER 30, NUMBER OF SHARES NAME AND POSITION OF HOLDER 1997 BEING OFFERED - ------------------------------------------------------------ -------------------- ----------------- GNI Holdings Limited........................................ 103,671 103,671 Anita Florence Taylor(1).................................... 411,735 381,735 3i plc...................................................... 42,011 42,011 Harry Ferguson Holdings Ltd Timothy James Sheldon Trust UA 5/27/87................................................... 100,457 100,457 K.E. Ahl & E.J. Kaier....................................... 84,022 84,022 Technical Investments Holdings SA........................... 66,964 66,964 Goddard Nominees (Jersey) Limited(2)........................ 1,205,501 1,205,501 G McCaldin.................................................. 4,681 4,681 C A Stevens(3).............................................. 64,074 60,274 Adrian Dear(4).............................................. 50,228 50,228 Paren Knadjian(5)........................................... 61,978 50,228 Kevin Underwood(6).......................................... 37,437 30,137 Barry Woodward(7)........................................... 23,583 18,283 Tracy Woodward(7)........................................... 1,808 1,808 --------- --------- 2,258,150 2,200,000 ========= =========
- --------------- Notes: (1) Ms. Anita Florence Taylor is the wife of Mr. David Taylor, Managing Director of ICV Limited. As of November 30, 1997, Mr. Taylor held options on 30,000 shares of Primark common stock at an exercise price of $26.25 per share. (2) Goddard Nominees (Jersey) Limited is the trustee for Mr. Christopher Sharples, Chairman of ICV limited. (3) Ms. Claire Stevens is the Technical Director of Data Production and a Senior Manager of ICV Limited. As of November 30, 1997, Ms. Stevens held options on 3,800 shares of Primark common stock at exercise prices ranging from $26.25 to $29.56. (4) Mr. Adrian Dear held the position of Director of Marketing of ICV Limited until December of 1996. (5) Mr. Paren Knadjian is the Director of Marketing and Product Development and a Senior Manager of ICV Limited. As of November 30, 1997, Mr. Knadjian held options on 11,750 shares of Primark common stock at exercise prices ranging from $26.25 to $29.56. (6) Mr. Kevin Underwood is the Group Administration Director and a Senior Manager of ICV Limited. As of November 30, 1997, Mr. Underwood held options on 7,300 shares of Primark common stock at prices ranging from $26.25 to $29.56. (7) Mr. Barry Woodward is the Director of Operations and a Senior Manager of ICV Limited. Ms. Tracy Woodward is his wife. As of November 30, 1997, Mr. Woodward held options on 5,300 shares of Primark common stock at prices ranging from $26.25 to $29.56. 7 10 SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA The following table sets forth selected consolidated historical and pro forma financial and operating data concerning the Company. With the exception of (i) the selected data as of September 30, 1997 and for the nine months ended September 30, 1997 and 1996, and (ii) the pro forma data for the nine months ended September 30, 1997, and the fiscal year ended December 31, 1996, the "Income Statement Data," "Other Operating and Financial Data" and "Balance Sheet Data" are derived from historical consolidated financial statements of the Company restated to present the results of operations of TIMCO as a discontinued operation. The Company's consolidated financial statements as of December 31, 1996 and 1995, and for each of the three years in the period ended December 31, 1996, are incorporated by reference in this Registration Statement and have been audited by Deloitte & Touche LLP, independent auditors, whose report thereon is also incorporated by reference herein. The selected financial data as of September 30, 1997, and for the nine months ended September 30, 1997 and 1996, have been derived from the unaudited interim consolidated financial statements of the Company incorporated by reference in this Registration Statement. The selected pro forma data are derived from the Unaudited Pro Forma Consolidated Financial Statements and Notes thereto appearing elsewhere in this Registration Statement. The selected financial data should be read in conjunction with the Consolidated Financial Statements of the Company and Notes thereto and the information contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations" incorporated herein by reference, and the Unaudited Pro Forma Consolidated Financial Statements and Notes thereto appearing elsewhere in this Registration Statement.
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, --------------------------------------------------------------------- --------------------------------- HISTORICAL(1)(2) PRO FORMA HISTORICAL(1)(2) PRO FORMA -------------------------------------------------------- (2)(3) -------------------- (2)(3) 1992 1993 1994 1995 1996 1996 1996 1997 1997 -------- -------- -------- -------- -------- --------- -------- -------- --------- (IN THOUSANDS EXCEPT STATISTICAL DATA AND PER SHARE DATA) INCOME STATEMENT DATA: Operating revenues........... $298,721 $395,054 $423,193 $530,979 $660,763 $277,063 $478,322 $617,468 $294,725 Cost of services.... 268,648 259,705 236,903 297,968 368,749 113,125 255,962 342,830 117,996 Selling, general and administrative..... 5,406 78,864 128,955 150,840 189,721 102,817 146,577 179,905 115,043 Depreciation........ 5,656 10,266 11,469 14,137 18,241 12,318 12,348 16,963 13,108 Amortization of goodwill and other intangible assets............. 5,496 15,287 15,361 21,203 23,909 19,800 17,118 26,081 23,287 Restructuring charge............. -- -- -- -- -- -- -- 6,800 6,800 ------- ------- ------- ------- ------- ------- ------- ------- ------- Operating income.... 13,515 30,932 30,505 46,831 60,143 29,003 46,317 44,889 18,491 Interest expense (income) -- net.... 2,909 10,174 9,853 15,084 15,950 (2,675) 10,625 17,021 735 Foreign currency transaction loss (gain) -- net...... (1,130) 1,477 1,329 2,620 (1,864) (1,836) (1,487) (2,327) (2,325) Other expense (income) 2,266 33 (533) 807 1,294 (66) 735 (1,646) (1,679) Income tax expense............ 5,034 9,059 8,988 13,190 19,219 12,612 16,859 18,537 13,119 ------- ------- ------- ------- ------- ------- ------- ------- ------- Income from continuing operations......... $ 4,436 $ 10,189 $ 10,868 $ 15,130 $ 25,544 $ 20,968 $ 19,585 $ 13,304 $ 8,641 ======= ======= ======= ======= ======= ======= ======= ======= ======= Earnings per share from continuing operations(4)...... $ 0.16 $ 0.44 $ 0.47 $ 0.66 $ 0.95 $ 0.78 $ 0.75 $ 0.48 $ 0.31 Net income (loss) applicable to Common Stock....... $ 5,821 $ 4,087 $ 12,316 $ 16,882 $ 36,749 $ 20,609 $ 30,019 $ 10,797 $ 8,641 Weighted average shares of Common Stock outstanding........ 19,388 19,805 19,909 20,602 26,555 26,555 25,807 27,577 27,577 OTHER OPERATING AND FINANCIAL DATA: EBITDA(5)........... $ 24,667 $ 56,485 $ 57,335 $ 82,171 $102,293 $ 61,121 $ 75,783 $ 87,933 $ 54,886 EBITDA as a % of operating revenue............ 8.3% 14.3% 13.5% 15.5% 15.5% 22.1% 15.8% 14.2% 18.6% Capital expenditures and capitalized software........... $ 7,294 $ 16,183 $ 22,464 $ 21,499 $ 40,406 $ 36,328 $ 26,328 $ 38,844 $ 31,697 Book value per share.............. $ 11.08 $ 11.33 $ 12.14 $ 15.19 $ 17.59 N/A $ 17.79 $ 19.15 $ 24.51
8 11
NINE MONTHS ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, -------------------------------------------------------- ----------------------------------- HISTORICAL(1)(2) HISTORICAL(1)(2) PRO FORMA -------------------------------------------------------- ---------------------- (2)(3) 1992 1993 1994 1995 1996 1996 1997 1997 -------- -------- -------- -------- -------- -------- ---------- --------- (IN THOUSANDS EXCEPT STATISTICAL DATA AND PER SHARE DATA) BALANCE SHEET DATA: Current assets................. $116,346 $110,927 $121,145 $188,140 $201,552 $206,029 $ 243,141 $145,407 Goodwill and other intangibles -- net............ 301,151 297,863 296,097 485,953 665,560 505,168 745,917 647,148 Property, plant & equipment -- net.............. 24,102 25,620 30,534 41,747 53,417 45,287 58,318 46,576 Net assets of discontinued operations.................... 17,290 6,769 10,639 32,428 39,930 33,463 16,609 16,609 Other noncurrent assets........ 16,284 10,804 6,508 11,156 11,124 38,848 7,680 7,361 ------- ------- ------- ------- ------- ------- ------- ------- Total assets................... $475,173 $451,983 $464,923 $759,424 $971,583 $828,795 $1,071,665 $863,101 ======= ======= ======= ======= ======= ======= ======= ======= Accounts payable and other current liabilities........... $ 65,434 $ 64,083 $ 72,969 $100,022 $210,271 $121,418 $ 222,994 $117,246 Total debt and capital lease obligations (including current maturities)................... 161,088 130,386 115,573 239,476 248,340 240,091 350,374 27,050 Other noncurrent liabilities... 30,574 32,506 34,726 48,923 36,490 58,783 34,636 80,206 Minority interest -- -- -- -- 265 -- 907 907 Series A Preferred Stock....... 16,522 16,874 16,874 16,874 -- -- -- -- Common shareholders' equity.... 201,555 208,134 224,781 354,129 476,217 408,503 462,754 637,692 ------- ------- ------- ------- ------- ------- ------- ------- Total liabilities and shareholders' equity.......... $475,173 $451,983 $464,923 $759,424 $971,583 $828,795 $1,071,665 $863,101 ======= ======= ======= ======= ======= ======= ======= =======
- --------------- (1) In June of 1997, the Company adopted a formal plan to sell TIMCO. Accordingly, the historical financial statement data presented herein has been restated to present the operations of TIMCO separately as a discontinued operation. (2) The historical and pro forma financial information includes the operations of the following companies from their respective dates of acquisition: Datastream acquired September 25, 1992; Vestek acquired June 30, 1994; Disclosure and I/B/E/S acquired June 29, 1995; DAFSA acquired June 18, 1996; Yankee acquired August 9, 1996; Worldscope acquired October 15, 1996; ICV acquired October 24, 1996; Baseline acquired January 6, 1997; and WEFA acquired February 7, 1997. (3) Gives effect to the Proposed TASC Sale for the sale of TASC and its affiliates assuming the transaction occurred on January 1 of the period presented. See "Unaudited Pro Forma Consolidated Financial Information." (4) Earnings per share represent earnings per common and common share equivalent before discontinued and extraordinary items. (5) EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. EBITDA represents supplemental information only and should not be construed as an alternative to operating income or to cash flows from operating activities as defined by U.S. generally accepted accounting principles. N/A Not applicable. 9 12 PRIMARK CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION The unaudited pro forma consolidated financial information presented herein gives effect to the Company's sale of the TASC Entities and their affiliates. For purposes of the Unaudited Pro Forma Consolidated Financial Information, the term "TASC" shall mean TASC, Inc., its affiliates and TASC U.K. The Unaudited Pro Forma Condensed Consolidated Statements of Income for the nine months ended September 30, 1997 and for the year ended December 31, 1996 assume that the Proposed TASC Sale occurred on January 1. Accordingly, the pro forma financial information for the 1997 period is based upon the historical financial statements of Primark and TASC for the nine months ended September 30, 1997. The pro forma financial information for 1996 is based upon the historical financial statements of Primark and TASC for the twelve months ended December 31, 1996, adjusted to reflect the operations of TIMCO as discontinued. Certain reclassifications have been made to the historical income statements to conform with the Company's current presentation. The Unaudited Pro Forma Consolidated Financial Statements include the accounts of TASC and give effect to events that are directly attributable to the Proposed TASC Sale and expected to have a continuing impact on the Company. Explanations for these adjustments are included in the Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet and Income Statements. The pro forma condensed consolidated income statement for the year ended December 31, 1996 does not reflect interest income which would have been earned on approximately $78,556,000 of unapplied proceeds. Assuming the Company had invested such unapplied proceeds in over night funds, it would have earned interest income of approximately $4,000,000. It should be noted that the Unaudited Pro Forma Condensed Consolidated Statement of Income for the year ended December 31, 1996 includes the operations of the following companies from their respective dates of acquisition: DAFSA acquired June 18, 1996: Yankee, acquired August 9, 1996; ICV Limited acquired October 24, 1996: Worldscope/Disclosure LLC acquired October 15, 1996. Similarly, the unaudited pro forma financial information for the nine months ended September 30, 1997 includes the operations of Baseline Financial Services, Inc. and WEFA from their January 6, 1997 and February 7, 1997 dates of acquisition, respectively. With the exception of this matter, the Company knows of no specific matters that would cause the unaudited pro forma consolidated financial information included herein not to be indicative of future operations. However, such pro forma operating results have been prepared for comparative purposes only and do not necessarily represent actual operating results that may occur in the future or that would have occurred had the Proposed TASC Sale been consummated on the above-mentioned assumed date. The Company's Unaudited Pro Forma Consolidated Financial Information should be read in conjunction with the historical financial statements of Primark and the information contained in the Company's "Management's Discussion and Analysis of Financial Condition and Results of Operations" incorporated herein by reference. 10 13 PRIMARK CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1997
UNAUDITED AS PROPOSED PRO REPORTED TASC(1) TRANSACTION ADJUSTMENTS FORMA ---------- -------- ----------- ----------- --------- (IN THOUSANDS OF DOLLARS) Cash and cash equivalents.................... $ 16,308 $ (160) $ 429,190(2) $(429,190) $ 16,148 Accounts receivable.......................... 181,969 (94,411) 87,558 Net assets of discontinued operations........ 16,609 151,723 (151,723)(2) 16,609 Other current assets......................... 44,864 (3,163) 41,701 Goodwill, net................................ 652,763 (93,298) 559,465 Capitalized data and other intangibles, net........................................ 49,194 (883) (3,899)(4) 44,412 Capitalized software, net.................... 43,960 (689) 43,271 Other assets................................. 7,680 (319) 7,361 Property, Plant and Equipment................ 58,318 (11,742) 46,576 ---------- -------- --------- --------- -------- Total assets............................. $1,071,665 $(52,942) $ 277,467 $(433,089) $863,101 ========== ======== ========= ========= ======== Notes payable................................ $ 2,951 $ 2,951 Accounts payable and accrued liabilities..... 61,263 $(28,751) $ (6,905)(3) 25,607 Federal income, property and other taxes payable.................................... 11,767 (3,428) $ 3,013(2) (1,862)(5) 9,490 94,061(2) (94,061)(3) Deferred income.............................. 88,912 (6,763) 82,149 Long term debt............................... 347,423 (323,324)(3) 24,099 Deferred income taxes........................ 15,043 (6,933) (1,482)(4) 6,628 Other liabilities............................ 80,645 (7,067) 73,578 Minority interest............................ 907 907 Stockholders' equity......................... 462,754 180,393(6) (3,038)(5) 637,692 (2,417)(4) ---------- -------- --------- --------- -------- Total liabilities and stockholders' equity................................ $1,071,665 $(52,942) $ 277,467 $(433,089) $863,101 ========== ======== ========= ========= ========
The notes to the unaudited pro forma condensed consolidated financial statements are an integral part of this statement. 11 14 PRIMARK CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET 1. TASC The pro forma condensed consolidated balance sheet gives effect to the classification of TASC as a discontinued operation upon receipt of shareholder approval. Included in the net assets of TASC is an account receivable, net, from Primark of $18,435,000. 2. PROPOSED TASC SALE The pro forma condensed consolidated balance sheet gives effect to the sale of TASC for $432,000,000, net of estimated transaction costs of $2,810,000. Income taxes associated with the sale of TASC are estimated to be $94,061,000. In connection with the proposed transaction, Primark has agreed to fund all federal and state income tax liabilities of TASC as of the closing. Federal and state income taxes at September 30, 1997 included in the historical financial statements of TASC aggregate $3,013,000. 3. USE OF PROCEEDS The pro forma condensed consolidated balance sheet assumes for the purpose of this presentation that the proceeds will be used to (i) prepay all amounts outstanding on the Company's $112,000,000 senior callable bonds, including a 4.375% premium aggregating $4,900,000, together with the accrued interest thereon, (ii) repay $211,324,000 of the Company's outstanding term loan together with accrued interest thereon, and (iii) to fund the estimated income tax liability associated with the proposed transaction of $94,061,000. The actual amount of taxes to be paid and the level and timing of bank debt to be repaid, if any, will be determined following completion of the Proposed TASC Sale. 4. DEBT ISSUE COSTS The pro forma condensed consolidated balance sheet gives effect to the write off of unamortized debt issue cost of $3,899,000 and related tax benefit of $1,482,000 associated with prepayment of the senior callable bonds and term loan described in note 3 above. Such amounts will be reflected as an extraordinary item in the Company's consolidated statement of income. 5. DEBT PREPAYMENT PREMIUM The pro forma condensed consolidated balance sheet gives effect to charge for the prepayment premium of $4,900,000, net of tax benefit of $1,862,000, as described in note 2 above. Such amounts will be reflected as an extraordinary item in the Company's consolidated statement of income. 6. CLOSING ADJUSTMENTS The actual gain at the closing date will be adjusted from the amounts presented herein on a dollar for dollar basis for increases or decreases in stockholder's equity of TASC between September 30, 1997 and the closing date, excluding the effect of changes resulting from income tax liabilities to be paid by the Company as described in note 2 above. 12 15 PRIMARK CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
UNAUDITED AS REPORTED TASC(1) ADJUSTMENTS PRO FORMA ----------- ---------- ----------- --------- (THOUSANDS EXCEPT PER SHARE AMOUNTS) Operating Revenues......................... $ 617,468 $ (324,753) $ 2,010(2) $ 294,725 -------- ---------- ------- -------- Operating Expenses: Cost of Services......................... 342,830 (226,046) 1,212(2) 117,996 Selling General and Administrative....... 179,905 (64,862) 115,043 Depreciation............................. 16,963 (3,855) 13,108 Amortization of Goodwill................. 13,893 (2,070) 11,823 Amortization of other intangible assets................................ 12,188 (724)(6) 11,464 Restructuring Charge..................... 6,800 6,800 -------- ---------- ------- -------- Total Operating Expenses.............. 572,579 (296,833) 488 276,234 -------- ---------- ------- -------- Operating Income......................... 44,889 (27,920) 1,522 18,491 -------- ---------- ------- -------- Other Income and (Deductions) Investment Income........................ 904 (776) 742(2) 870 Interest Expense......................... (17,925) 108 (32)(2) (1,605) 16,244(3) Foreign Currency Gain (loss)............. 2,327 (2) 2,325 Other.................................... 1,646 33 1,679 -------- ---------- ------- -------- Total Other........................... (13,048) (637) 16,954 3,269 -------- ---------- ------- -------- Income From Continuing Operations Before Income Taxes............................. 31,841 (28,557) 18,476 21,760 Income Taxes............................... 18,537 (12,439) 7,021(4) 13,119 -------- ---------- ------- -------- Income From Continuing Operations.......... $ 13,304 $ (16,118) $11,455 $ 8,641 ======== ========== ======= ======== Earnings per Common and Common Equivalent Share.................................... $ 0.48 $ 0.31 ======== ======== Weighted Average Common and Common Equivalent Shares Outstanding............ 27,577 27,577 ======== ========
The notes to the unaudited pro forma condensed consolidated financial statements are an integral part of this statement. 13 16 PRIMARK CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996
AS REPORTED UNAUDITED RESTATED PRO AS REPORTED TIMCO(5) TIMCO TASC(1) ADJUSTMENTS FORMA ----------- --------- --------- --------- ----------- --------- (IN THOUSANDS EXCEPT PER SHARE DATA) Operating Revenues.......... $ 767,125 $(106,362) $660,763 $(386,953) $ 3,253(2) $277,063 --------- --------- -------- --------- ------- -------- Operating Expenses: Cost of services.......... 457,528 (88,779) 368,749 (258,768) 3,144(2) 113,125 Selling General and Administrative.......... 199,922 (10,201) 189,721 (86,904) 102,817 Depreciation.............. 19,445 (1,204) 18,241 (5,923) 12,318 Amortization of Goodwill................ 13,369 13,369 (2,753) 10,616 Amortization of other intangible assets....... 10,540 10.540 (192) (1,164)(6) 9,184 Restructuring Charge...... --------- --------- -------- --------- ------- -------- Total Operating Expenses.............. 700,804 (100,184) 600,620 (354,540) 1,980 248,060 --------- --------- -------- --------- ------- -------- Operating Income.......... 66,321 (6,178) 60,143 (32,413) 1,273 29,003 --------- --------- -------- --------- ------- -------- Other Income and (Deductions) Investment income......... 2,703 (4) 2,699 (638) 614(2) 2,675 Interest Expense.......... (20,193) 1,544 (18,649) 26 18,623(3) -- Foreign Currency Gain (Loss).................. 1,864 1,864 (28) 1,836 Other..................... (1,533) 239 (1,294) 1,360 66 --------- --------- -------- --------- ------- -------- Total Other............. (17,159) 1,779 (15,380) 720 19,237 4,577 --------- --------- -------- --------- ------- -------- Income From Continuing Operations Before Income Taxes..................... 49,162 (4,399) 44,763 (31,693) 20,510 33,580 Income Taxes................ 21,207 (1,988) 19,219 (14,401) 7,794(4) 12,612 --------- --------- -------- --------- ------- -------- Income From Continuing Operations................ 27,955 $ (2,411) $ 25,544 $ (17,292) $12,716 20,968 ========= ======== ========= ======= Dividends on Preferred Stock..................... (359) (359) --------- -------- Income Applicable to Common Stock..................... $ 27,596 $ 20,609 ========= ======== Earnings per Common and Common Equivalent Share... $ 1.04 $ 0.78 ========= ======== Weighted Average Common and Common Equivalent Shares Outstanding............... 26,555 26,555 ========= ========
The notes to the unaudited pro forma condensed consolidated financial statements are an integral part of this statement. 14 17 PRIMARK CORPORATION AND SUBSIDIARIES NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENTS 1. TASC The pro forma condensed consolidated income statements give effect to the classification of TASC as a discontinued operation upon the receipt of shareholder approval. 2. INTERCOMPANY ELIMINATION The pro forma condensed consolidated income statements give effect to the elimination of transactions between TASC and Primark or any of its other subsidiaries that are included in the amounts reported for TASC on a separate entity basis. 3. INTEREST EXPENSE The pro forma condensed consolidated income statements give effect to the reduction of interest expense as a result of the application of the proceeds from the proposed transaction to repay outstanding debt balances. The pro forma condensed consolidated income statement for the year ended December 31, 1996 does not reflect interest income which would have been earned on approximately $78,556,000 of unapplied proceeds. Assuming the Company had invested such unapplied proceeds in over night funds, it would have earned interest income of approximately $4,000,000. 4. INCOME TAXES The pro forma condensed consolidated income statements give effect to the tax benefit of adjustments in notes 1 through 3 and note 6, as described above and below, at an incremental rate of 38%. 5. TIMCO The pro forma condensed consolidated income statement for the year ended December 31, 1996 gives effect to the classification of TIMCO, a wholly owned subsidiary of the Company, as discontinued operation as a result of the Company's June 1997 announced plan to dispose of TIMCO. The September 30, 1997 financial statements of the Company as previously reported reflect TIMCO as a discontinued operation. 6. DEBT ISSUE COSTS The pro forma condensed consolidated income statements give effect to the reduction in amortization of debt issue costs as a result of the Company's assumed repayment of outstanding debt. 15 18 PLAN OF DISTRIBUTION This offering of 2,200,000 shares of Common Stock is being made by the Selling Shareholders, who have indicated they are acting independently of each other and the Company in determining the manner and extent of sales of the shares of Common Stock included herein. The Company will receive none of the proceeds of this Offering. Although all of the shares of Common Stock that are currently owned by the Selling Shareholders, or that would be owned by them upon the exercise of options granted under the Plan, are being registered for public sale, the sale of any or all of such shares by a Selling Shareholder may depend on the sale price of such shares and market conditions generally prevailing at the time. The Selling Shareholders reserve the right to reject any order in whole or in part. The Selling Shareholders have informed the Company that they may sell the shares of Common Stock being offered hereby in one or more transactions (which may involve block transactions) effected from time to time on the NYSE or the Pacific Stock Exchange, in special offerings, in the over-the counter market, in negotiated transactions, or through a combination of such methods of sale, in each case at market prices prevailing at the time of sale, at prices relating to such prevailing market prices, or at negotiated prices. The shares of Common Stock may be sold by one or more of the following methods: (i) a block trade in which the broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (ii) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (iii) an exchange distribution and/or a secondary distribution in accordance with the rules of the NYSE or the Pacific Stock Exchange, as applicable; and (iv) ordinary brokerage transactions and transactions in which the broker solicits purchasers. In effecting sales, brokers or dealers engaged by the Selling Shareholders may arrange for other brokers or dealers to participate. Some or all of the shares offered hereunder also may be sold to or through an underwriter or underwriters. Any shares sold in that manner will be acquired by such underwriters for their own accounts and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Such shares may be offered to the public through underwriting syndicates represented by one or more managing underwriters or may be offered to the public directly by one or more underwriters. Any initial public offering price and any discounts or concessions allowed or disallowed or paid to dealers may be changed from time to time. The Selling Shareholders have indicated that if any of the Common Stock offered hereby is sold through underwriters, brokers or dealers, then the Selling Shareholders may pay customary brokerage commissions and charges or an underwriting discount or concession. The Selling Shareholders and any underwriters, brokers or dealers or other persons who participate with them in the distribution of the shares offered hereby may be deemed to be "underwriters" within the meaning of the Securities Act, although the Selling Shareholders disclaim such status. Any commissions and discounts received by such persons, or any profit on the resale of the stock by such persons, may be deemed to be underwriting discounts and commissions under the Securities Act. Neither the delivery of the Prospectus, or any Prospectus Supplement, nor any other action taken by the Company, the Selling Shareholders or any purchaser in connection with the purchase or sale of shares offered hereby shall be deemed or treated as an admission that any of them is an underwriter within the meaning of the Securities Act in connection with the sales of any shares. The Selling Shareholders have agreed to indemnify and hold harmless the Company, its officers and directors, with respect to any untrue statement in or omission from, this Prospectus or the Registration Statement of which it is a part, including amendments and supplements, if such statement or omission was made in reliance upon information furnished to the Company by such Selling Shareholder for use in the preparation of this Prospectus or Registration Statement. The Company will pay all expenses incidental to the registration of the Common Stock, but will not pay selling or other expenses incurred in the offering, including the discounts and commissions of broker-dealers. 16 19 The Company has agreed to indemnify the Selling Shareholders against certain civil liabilities, including liabilities under the Securities Act, in connection with the Common Stock offered hereby. The shares of Common Stock being offered hereby may also be sold by the Selling Shareholders pursuant to Rule 144 promulgated under the Securities Act. LEGAL MATTERS The validity of the shares of Common Stock offered hereby and certain legal matters relating to the Offering will be passed upon for the Company and the Selling Shareholders by Michael R. Kargula, General Counsel of the Company. As of December 22, 1997, Mr. Kargula beneficially owned 333,872 shares of Common Stock. EXPERTS The consolidated financial statements incorporated in this Prospectus by reference from the Company's Annual Report on Form 10-K for the year ended December 31, 1996 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report which is incorporated herein by reference and has been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 17 20 ====================================================== NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. ------------------------ TABLE OF CONTENTS
PAGE ---- Available Information................. 2 Incorporation of Certain Documents by Reference........................... 2 The Company........................... 4 Risk Factors.......................... 5 Use of Proceeds....................... 6 Dividend Policy....................... 6 Selling Shareholders.................. 7 Selected Consolidated Historical and Pro Forma Financial and Operating Data................................ 8 Unaudited Pro Forma Consolidated Financial Information............... 10 Plan of Distribution.................. 16 Legal Matters......................... 17 Experts............................... 17
====================================================== ====================================================== 2,200,000 SHARES [PRIMARK LOGO] COMMON STOCK --------------------------- PROSPECTUS --------------------------- DECEMBER 24, 1997 ====================================================== 21 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. FEES* Securities and Exchange Commission Registration Fee....................... $ 26,103 Printing Expenses......................................................... 10,000 Accounting Fees........................................................... 5,000 Miscellaneous............................................................. 58,897 ---------- Total..................................................................... $100,000 ==========
- --------------- * All amounts except registration fee are estimates. All fees, excluding underwriting fees and discounts, will be paid by the Company. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Sections 561 through 571 of the Michigan Business Corporation Act (the "MBCA") contain detailed provisions concerning the indemnification of directors, officers, employees, and agents against judgments, penalties, fines and amounts paid in settlement of litigation that they may incur in their capacity as such. Section 561 through 571 of the MBCA, which are filed as Exhibit 99.1 to this Registration Statement, are incorporated herein by reference. Article VIII of the Articles of Incorporation of the Registrant provides that the Registrant shall indemnify any person who is or was a director or officer of the registrant or is or was serving at the request of the Registrant as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed action, suit, or proceeding to the full extent provided by the MBCA from time to time in effect. Section 6.1 of the By-laws of the Registrant provides that the Registrant shall indemnify its officers, directors, employees, agents and other persons to the fullest extent to which corporations are empowered to indemnify such persons at law. Article IX of the Articles of Incorporation of the Registrant provides that a director of the Registrant shall not be personally liable to the Registrant or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Registrant or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) for a violation of Section 551(1) of the MBCA or (iv) for any transaction from which the director derived any improper personal benefit. The Company maintains a director's and officer's liability insurance policy that covers its directors and officers for certain claims and actions incurred in the course of their duties, including, under certain circumstances, alleged violations of the Securities Act of 1933, as amended. II-1 22 ITEM 16. EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- ----------------------------------------------------------------------------------- 4.1 Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Registration Statement No. 2-74688); Amendment to the Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant's 1985 Form 10-K); Amendment dated August 8, 1991 (incorporated by reference to Exhibit 3(a) to the Registrant's Form 8-K dated August 9, 1991); Amendment dated May 27, 1992 (incorporated by reference to Exhibit 3.1 to the Registrant's June 30, 1992 Form 10-Q); Amendment dated May 28, 1997 (incorporated by reference to Exhibit 3.1 to the Registrant's June 30, 1997 Form 10-Q). 4.2 By-laws of the Registrant, as amended (incorporated by reference to the Registrant's September 30, 1990 Form 10-Q). 5.1* Opinion of Michael R. Kargula, General Counsel of the Company, regarding the legality of the shares of Common Stock being offered hereby. 23.1* Consent of Deloitte & Touche LLP. 23.2* Consent of Michael R. Kargula, General Counsel of the Company (included in Exhibit 5.1). 99.1* Sections 561-571 of the Michigan Business Corporation Act.
- --------------- * Filed herewith. For documents incorporated by reference, references are to File No. 1-8260. ITEM 17. UNDERTAKINGS (a) The undersigned Registrant hereby undertakes: (1) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-2 23 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Waltham, Commonwealth of Massachusetts, on December 24, 1997. PRIMARK CORPORATION By: STEPHEN H. CURRAN ----------------------------------- Executive Vice President and Chief Financial Officer December 24, 1997 The undersigned directors and officers of Primark Corporation, a Michigan corporation, hereby severally constitute and appoint Joseph E. Kasputys, Stephen H. Curran and Michael R. Kargula, and each of them, (with full power to act without the others), his or her true and lawful attorneys-in-fact and agents, with full powers of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to execute and file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a Registration Statement on Form S-3 offering for sale to the public of 2,200,000 shares of Primark common stock ("Registration Statement') and any and all amendments (including post-effective amendments) to the Registration Statement, hereby giving and granting unto said attorneys full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as he or she might or could do if personally present at the time thereof, hereby ratifying and confirming all that said attorneys and agents, or any of them, or their or his or her substitute or substitutes, may or shall lawfully do, or cause to be done, by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE - ------------------------------------------ ------------------------------ ------------------- * Chairman, President and Chief December 23, 1997 - ------------------------------------------ Executive Officer (Principal Joseph E. Kasputys Executive Officer) /s/ STEPHEN H. CURRAN Executive Vice President and December 23, 1997 - ------------------------------------------ Chief Financial (Principal Stephen H. Curran Accounting and Financial Officer) * Director December 23, 1997 - ------------------------------------------ Jonathan Newcomb * Director December 23, 1997 - ------------------------------------------ Kevin J. Bradley * Executive Vice President and December 23, 1997 - ------------------------------------------ Director John C. Holt
II-3 24
SIGNATURE TITLE DATE - ------------------------------------------ ------------------------------ ------------------- * Director December 23, 1997 - ------------------------------------------ Steven Lazarus * Director December 23, 1997 - ------------------------------------------ Patricia McGinnis * Director December 23, 1997 - ------------------------------------------ Constance K. Weaver
*By: /S/ STEPHEN H. CURRAN -------------------------- Stephen H. Curran Attorney-in-Fact II-4 25 EXHIBIT INDEX
EXHIBIT SEQUENTIALLY NO. DESCRIPTION NUMBERED PAGE - ------- ------------------------------------------------------------------------ -------------- 4.1 Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Registration Statement No. 2-74688); Amendment to the Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant's 1985 Form 10-K); Amendment dated August 8, 1991 (incorporated by reference to Exhibit 3(a) to the Registrant's Form 8-K dated August 9, 1991); Amendment dated May 27, 1992 (incorporated by reference to Exhibit 3.1 to the Registrant's June 30, 1992 Form 10-Q); Amendment dated May 28, 1997 (incorporated by reference to Exhibit 3.1 to the Registrant's June 30, 1997 Form 10-Q). 4.2 By-laws of the Registrant, as amended (incorporated by reference to the Registrant's September 30, 1990 Form 10-Q). 5.1* Opinion of Michael R. Kargula, General Counsel of the Company, regarding the legality of the shares of Common Stock being offered hereby. 23.1* Consent of Deloitte & Touche LLP. 23.2* Consent of Michael R. Kargula, General Counsel of the Company (included in Exhibit 5.1). 99.1* Sections 561-571 of the Michigan Business Corporation Act.
- --------------- * Filed herewith. For the Company's documents incorporated by reference, references are to File No. 1-8260. II-5 EX-5.1 2 OPINION OF MICHAEL R. KARGULA 1 EXHIBIT 5.1 December 24, 1997 Primark Corporation 1000 Winter Street Suite 4300 Waltham, MA 02154 Ladies and Gentlemen: I am General Counsel of Primark Corporation, a Michigan corporation (the "Company"). I am providing you with this opinion in connection with the underwritten public offering of 2,200,000 shares of the Company's Common Stock, without par value (the "Common Stock") to be sold by the Selling Shareholders named in the Registration Statement, as hereinafter defined. This opinion is delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the "Act"). In connection with this opinion, I have examined (i) the Registration Statement of the Company on Form S-3 relating to the Company Shares filed with the Securities and Exchange Commission (the "Commission") on December 24, 1997 (the "Registration Statement"); (ii) the Articles of Incorporation and the By-laws of the Company, in each case as amended to the date hereof; (iii) certain resolutions of the Board of Directors of the Company; and (iv) such other documents as I have deemed necessary or appropriate for the opinions expressed below. In my examination I have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to me as originals, the conformity to the original documents of all documents submitted to me as certified or photostatic copies and the authenticity of the originals of such copies. As to any facts material to the opinions expressed below which I did not independently establish or verify, I have relied upon oral or written statements and representations of officers and other representatives of the Company and others. I am admitted to the Bar of the State of Michigan and I do not express any opinion as to the law of any other jurisdiction. Based upon and subject to the foregoing, I am of the opinion that the 2,200,000 shares of Company Stock outstanding on the date hereof are validly issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the caption "Legal Matters" in the prospectus which constitutes a part of the Registration Statement. In giving such consent, I do not thereby admit that I am in the category of persons whose consent is required under Section 7 of the Act or rules and regulations of the Commission promulgated thereunder. Very truly yours, /s/ MICHAEL R. KARGULA - ----------------------------------- MICHAEL R. KARGULA II-6 EX-23.1 3 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Primark Corporation on Form S-3 of our report dated February 11, 1997, incorporated by reference in the Annual Report on Form 10-K of Primark Corporation for the year ended December 31, 1996 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. DELOITTE & TOUCHE LLP Boston, Massachusetts December 23, 1997 II-7 EX-99.1 4 SECTIONS 561-571 OF THE MICHIGAN CORPORATION ACT 1 EXHIBIT 99.1 SECTION 561. INDEMNIFICATION FOR EXPENSES, JUDGMENTS, FINES AND SETTLEMENTS; PLEA OF NOLO CONTENDERE, EFFECT. A Corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal, other than an action by or in the right of the corporation, by reasons of the fact that he or she is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses, including attorneys' fees, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if the person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders, and with respect to any criminal action or proceeding, if the person had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, does not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. SECTION 562. INDEMNIFICATION FOR EXPENSE INCURRED FOR DEFENSE OR SETTLEMENT OF LITIGATION; NEGLIGENCE OR MISCONDUCT; EXTENT OF INDEMNIFICATION. A corporation has the power to indemnify a person who was or is a party or is threatened to be made a party to a threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, whether for profit or not, against expenses, including attorneys' fees, and amounts paid in settlement actually and reasonably incurred by the person in connection with the action or suit, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interest of the corporation or its shareholders. Indemnification shall not be made for a claim, issue, or matter in which the person has been found liable to the corporation except to the extent authorized in section 564c. SECTION 563. SUCCESS IN DEFENSE OF LITIGATION. To the extent that a director, officer, employee, or agent of a corporation has been successful on the merits or otherwise in defense of an action, suit, or proceeding referred to in section 561 or 562, or in defense of a claim, issue, or matter in the action, suit, or proceeding, he or she shall be indemnified against actual and reasonable expenses, including attorneys' fees, incurred by him or her in connection with the action, suit, or proceeding and an action, suit, or proceeding brought to enforce the mandatory indemnification provided in this subsection. SECTION 564a. DETERMINING PERMISSIBILITY OF INDEMNIFICATION AND REASONABLENESS OF EXPENSE. (1) An indemnification under section 561 or 562, unless ordered by the court, shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in sections 561 and 562 and upon an evaluation of the reasonableness of expenses and amounts paid in settlement. This determination and evaluation shall be made in any of the following ways: By a majority vote of a quorum of the board consisting of directors who are not parties or threatened to be made parties to the action, suit or proceeding. If a quorum cannot be obtained under subdivision (a), by majority vote of a committee duly designated by the board and consisting solely of 2 or more directors not at the time parties or threatened to be made parties to the action, suit, or proceeding. By independent legal counsel in a written opinion, which counsel shall be selected in 1 of the following ways: II-8 2 By the board or its committee in the manner prescribed in subdivision (a) or (b). If a quorum of the board cannot be obtained under subdivision (a) and a committee cannot be designated under subdivision (b), by the board. By all independent directors who are not parties or threatened to be made parties to the action, suit, or proceeding. By the shareholders, but shares held by directors, officers, employees, or agents who are parties or threatened to be made parties to the action, suit, or proceeding may not be voted. In the designation of a committee under subsection (1)(b) or in the selection of independent legal counsel under subsection (1)(c)(ii), all directors may participate. If a person is entitled to indemnification under section 561 or 562 for a portion of expenses, including reasonable attorneys' fees, judgments, penalties, fines and amounts paid in settlement, but not for the total amount, the corporation may indemnify the person for the portion of the expenses, judgments, penalties, fines, or amounts paid in settlement for which the person is entitled to be indemnified. SECTION 564b. ADVANCEMENT OF REASONABLE EXPENSES PRIOR TO FINAL DISPOSITION; CONDITIONS. (1) A corporation may pay or reimburse the reasonable expenses incurred by a director, officer, employee, or agent who is a party or threatened to be made a party to an action, suit, or proceeding in advance of final disposition of the proceeding if all of the following apply: The person furnishes the corporation a written affirmation of his or her good faith belief that he or she has met the applicable standard of conduct set forth in sections 561 and 562. The person furnishes the corporation a written undertaking, executed personally or on his or her behalf, to repay the advance if it is ultimately determined that he or she did not meet the standard of conduct. A determination is made that the facts then known to those making the determination would not preclude indemnification under this act. The undertaking required by subsection (1)(b) must be an unlimited general obligation of the person but need not be secured. Determinations and evaluations under this section shall be made in the manner specified in section 564a. SECTION 564c. APPLICATION TO COURT FOR INDEMNIFICATION. A director, officer, employee, or agent of the corporation who is a party or threatened to be made a party to an action, suit, or proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice it considers necessary may order indemnification if it determines that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he or she met the applicable standard of conduct set forth in sections 561 and 562 or was adjudged liable as described in section 562, but if he or she was adjudged liable, his or her indemnification is limited to reasonable expenses incurred. SECTION 565. NONEXCLUSIVITY OF STATUTE; RIGHTS OF OTHER PERSONS; CONTINUATION OF RIGHTS. (1) The indemnification or advancement of expenses provided under section 561 to 564c is not exclusive of other rights to which a person seeking indemnification or advancement of expenses may be entitled under the articles of incorporation, bylaws, or a contractual agreement. The total amount of expenses advanced or indemnified from all sources combined shall not exceed the amount of actual expenses incurred by the person seeking indemnification or advancement of expenses. (2) The indemnification provided for in sections 561 to 565 continues as to a person who ceases to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, personal representatives, and administrators of the person. SECTION 567. INSURANCE AGAINST LIABILITY. A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the corporation, or is II-9 3 or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against him or her and incurred by him or her status as such, whether or not the corporation would have power to indemnify him or her against liability under sections 561 to 565. Section 569. CORPORATION; CONSTRUCTION OF REFERENCES TO. For purposes of section 561 to 567, "corporation" include all constituent corporations absorbed in a consolidation or merger and the resulting or surviving corporation, so that a person who is or was a director, officer, partner, trustee, employee, or agent of such constituent corporation or is or was serving at the request of the constituent corporation as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise whether for profit or not shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as the person would if he or she had served the resulting or surviving corporation in the same capacity. SECTION 571. DEFINITIONS. For the purposes of section 561 to 567: "Fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan. "Other enterprises" shall include employee benefit plans. "Serving at the request of the corporation" shall include any service as a director, officer employee, or agent of the corporation which imposes duties on, or involves services by, the director, officer, employee, or agent with respect to an employee benefit plan, its participants, or its beneficiaries. A person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be considered to have acted in a manner "not opposed to the best interests of the corporation or its shareholders" as referred to in sections 561 and 562. II-10 -----END PRIVACY-ENHANCED MESSAGE-----