SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
August 1, 1997
XEROX CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-4471 16-0468020
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
800 Long Ridge Road
P. O. Box 1600
Stamford, Connecticut 06904-1600
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:
(203) 968-3000
This document consists of 4 pages.
Item 5. Other Events
1. On September 9, 1997 Registrant announced an agreement to sell The
Resolution Group, Inc. ("TRG"), insurance unit of Talegen Holdings, Inc.
("Talegen"), for a total of $612 million to an investor group led by Michael
A. Coutu, chief executive officer of TRG. Talegen is wholly owned by Xerox
Financial Services, Inc., a subsidiary of Registrant.
Under the terms of the agreement, the investor group will acquire the stock of
TRG for $150 million in cash and $462 million in performance-based
instruments. Both the purchase price and transaction structure are consistent
with assumptions made by Registrant when it discontinued its insurance
operations in 1995. The transaction is subject to customary closing
conditions and regulatory approvals and is expected to close by year-end.
Registrant announced in 1993 that it would disengage from the financial
services business and focus exclusively on its core document processing
business. Its property and casualty insurance operations were subsequently
reorganized into seven independent insurance groups under Talegen. Chicago-
based TRG, one of the seven insurance groups, was formed to manage the claims
run-off and reinsurance collections associated with various books of business
which the Talegen insurance units had discontinued writing.
Following the TRG announcement, two insurance groups, Crum & Forster Insurance
and Westchester Specialty Group, remain for sale.
2. Reference is made to the first paragraph in Note 9 of the Notes to
Consolidated Financial Statements contained in Registrant's Form 10-Q for the
quarterly period ended June 30, 1997 relating to the lawsuit by two
independent service organizations (ISOs). On September 8, 1997 the United
States Court of Appeals for the Federal Circuit denied plaintiffs' petition
for permission to appeal the District Court's April 7, 1997 Order. No trial
date has been set for the remaining issues in the case. Registrant denies any
wrongdoing and intends to vigorously defend the remaining claims and pursue
its counterclaims.
3. On January 3, 1996, an action was commenced by Barneyscan Corporation
against Registrant, Pixelcraft, Inc., a wholly owned subsidiary of Registrant,
and three individuals, seeking damages "in excess of $10 million" for breach
of contract and fraud, punitive damages, attorneys' fees and an accounting.
Plaintiff claimed it was entitled to royalties on certain machines and
software sold by Pixelcraft between July 1, 1992 and June 30, 1996. In August
1997, in an amended letter to a court-appointed mediator, plaintiff expanded
its damage claim by alleging that it was also entitled to royalties in excess
of $400 million for use of Barneyscan technology in conjunction with Xerox
color copiers and printers during that time period. Pixelcraft admits that
Barneyscan is entitled to royalties of approximately $750,000 from Pixelcraft
alone, minus certain offsets, and no more. Registrant denies (i) any
liability to plaintiff, (ii) the use of Barneyscan technology as alleged by
plaintiff, and (iii) asserts that the royalty calculation used by plaintiff is
inconsistent with the facts in numerous respects. Defendants intend to
vigorously defend the action. There is no trial date.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly authorized this report to be signed on its behalf by the
undersigned duly authorized.
XEROX CORPORATION
/s/ MARTIN S. WAGNER
--------------------------------
By: MARTIN S. WAGNER
Assistant Secretary
Dated: September 15, 1997
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