<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 6, 1996
REGISTRATION NO. 333-04727
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PRIMARK CORPORATION
(Exact name of registrant as specified in its charter)
------------------------
AMENDMENT NO. 1
<TABLE>
<S> <C>
MICHIGAN 38-2383282
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1000 WINTER STREET
SUITE 4300N
WALTHAM, MASSACHUSETTS 02154
(617) 466-6611
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
MICHAEL R. KARGULA, ESQ.
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
PRIMARK CORPORATION
1000 WINTER STREET
SUITE 4300N
WALTHAM, MASSACHUSETTS 02154
(617) 466-6611
(Name and Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent for Service)
Please send copies of communications to:
STANLEY H. MEADOWS, P.C.
MCDERMOTT, WILL & EMERY
227 WEST MONROE STREET
CHICAGO, IL 60606
(312) 372-2000
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 the only 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. / /
If this Form is filed to register additional securities for an offering
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 this Form is a post-effective amendment filed pursuant to Rule 462(c)
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. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED SHARE(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
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Common Stock, without par value....... 914,276 $37.50 $34,285,350.00 $11,822.53
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<FN>
(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 May 28, 1996 on the New York Stock Exchange.
------------------------
</TABLE>
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.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 6, 1996
914,276 SHARES
[LOGO]
COMMON STOCK
------------------------
This Prospectus relates to the offer and sale of 914,276 shares of Common
Stock of Primark Corporation ("Primark" or the "Company") offered for sale by
the Profit Sharing and Stock Ownership Plan ("PSSOP" or the "Selling
Shareholder") of TASC, Inc., a wholly owned subsidiary of the Company. See
"Selling Shareholder" and "Underwriting." The PSSOP, which may be deemed an
affiliate of the Company, acquired 1,164,276 shares of Common Stock of Primark
on May 2, 1996 when it converted all of the outstanding shares of Primark's
Series A Cumulative Convertible Preferred Stock (the "Preferred Stock"). The
Company will not receive any of the proceeds from the sale of such shares.
The Common Stock is traded on the New York and Pacific Stock Exchanges
under the symbol "PMK." On June 5, 1996, the last reported sale price of the
Common Stock on the New York Stock Exchange was $35.375 per share. See "Price
Range of Common Stock."
FOR INFORMATION CONCERNING CERTAIN FACTORS RELATING TO THIS OFFERING, SEE
"RISK FACTORS" ON PAGE 8 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.
<TABLE>
<CAPTION>
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Underwriting Proceeds to
Price to Discounts and Selling
Public Commissions(1) Shareholder(2)
<S> <C> <C> <C>
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Per Share.....................
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Total.........................
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<FN>
(1) See "Underwriting."
(2) Before deducting expenses estimated at $200,000, which are payable by the
Company.
</TABLE>
------------------------
The shares are offered by the Underwriter, subject to prior sale, when, as
and if delivered to and accepted by the Underwriter, and subject to its right to
reject orders in whole or in part. It is expected that delivery of the Common
Stock will be made in New York City on or about June , 1996.
------------------------
PAINEWEBBER INCORPORATED
------------------------
THE DATE OF THIS PROSPECTUS IS JUNE 6, 1996.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK AND PACIFIC STOCK
EXCHANGES, OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
------------------------
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.
Such reports, proxy statements and other information can also be inspected at
the offices of The New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005; and the Pacific Stock 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, 1995;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996;
3. The Company's Current Reports on Form 8-K dated June 8, 1995, and
July 3, 1995 as amended by Amendment No. 1 on Form 8-K/A dated September
11, 1995, Amendment No. 2 on Form 8-K/A dated October 26, 1995 and
Amendment No. 3 on Form 8-K/A dated November 28, 1995; 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 January 13, 1988 and the
Company's Form 8-A dated June 16, 1992.
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
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 to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, 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: (617) 466-6611.
2
<PAGE> 4
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements and notes thereto set forth
elsewhere in this Prospectus or incorporated herein by reference. "EBITDA"
represents earnings before interest expense, income taxes, depreciation and
amortization. Due to the high non-cash amortization expense recorded to net
income, the Company presents EBITDA to provide the investor a measure of cash
flows within operations. EBITDA represents supplemental information only and is
not to be construed as an alternative to operating income or to cash flows from
operating activities as defined by U.S. generally accepted accounting
principles. All references to "pro forma 1995 revenues" and "pro forma 1995
EBITDA" mean pro forma consolidated operating revenues and pro forma earnings
before interest expense, income taxes, depreciation and amortization,
respectively, of the Company for the year ended December 31, 1995 assuming the
Company had acquired Disclosure and its affiliates as of January 1, 1995. See
"Unaudited Pro Forma Consolidated Financial Information." Certain terms
referring to the Company's subsidiaries are defined on page 5 of this
Prospectus.
THE COMPANY
Primark is an international company engaged principally in the information
services industry, serving two primary markets, Financial Information and
Applied Information Technology. The Company's Financial Information businesses
consist of the operations of Datastream, Disclosure, I/B/E/S, Vestek and
Worldscope. Through its Financial Information businesses, Primark develops and
markets value-added database products which provide financial and economic
information on established and emerging markets worldwide, as well as
proprietary analytical software for the analysis and presentation of such
information. Customers of the Financial Information businesses include
investment managers, investment bankers, accountants, financial professionals,
lawyers, professional researchers and librarians in 59 countries. The Company's
Applied Information Technology activities, conducted through TASC, provide a
broad spectrum of technology-based information services and products primarily
to U.S. government agencies involved in national security and intelligence
related activities. TASC also serves the weather information market through its
subsidiary, WSI, and has a growing commercial business, including initiatives in
document management, environmental surveillance, aviation systems and
multi-media markets. The Company also conducts contract maintenance services on
commercial aircraft through TIMCO and leasing of underground gas storage fields
through PSLC. Primark is a global business with pro forma 1995 revenues and pro
forma 1995 EBITDA of $668.6 million and $105.3 million, respectively.
International revenues represented approximately 20.0% of the Company's pro
forma 1995 revenues.
Commencing with Primark's acquisition of TASC in 1991, the Company embarked
on a strategy of combining information technology expertise with proprietary
data content to serve the increasing information requirements of its customers
with value-added products. The Company focused its strategy on the financial
information market through its acquisitions of Datastream in 1992 and Vestek in
1994, while divesting certain of its non-core operations. Primark significantly
expanded its domestic presence in financial information content services through
the June 1995 acquisition of Disclosure and its subsidiary, I/B/E/S. As a result
of this strategic transition and internal growth, the global Financial
Information businesses accounted for 35.3% of Primark's pro forma 1995 revenues
and 60.3% of pro forma 1995 EBITDA. Primark intends to continue its expansion in
financial information and other data content businesses through internal growth
and acquisitions, as well as to seek opportunities to divest non-core
businesses. The Company from time-to-time has, and currently is, engaged in
discussions regarding such potential acquisitions and divestitures, although no
binding agreements regarding any such transactions have been reached.
FINANCIAL INFORMATION
Primark's Financial Information businesses provide a broad range of unique
database products, delivery systems, software and support services to meet the
rapidly growing demand for global financial and economic data and analytics by
financial and investment professionals worldwide. A significant percentage of
the Company's Financial Information revenues are generated under annual
subscriptions or service agreements with historical renewal rates exceeding 90%.
Of the Company's pro forma 1995 revenues attributable to the
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3
<PAGE> 5
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Financial Information businesses, 54.3% were generated outside the United
States. The following are the Company's principal Financial Information
businesses:
- Datastream is a leading on-line provider of global financial and economic
information covering over 135,000 securities in 58 countries. Datastream
delivers its products on a subscription basis directly to customer
mainframes, workstations and personal computers, together with
proprietary software applications that allow customers to use the data in
investment research and portfolio management.
- Disclosure is the leading provider of "as reported" and abstracted
financial information in the United States and has a growing
international presence. Disclosure distributes information on over 16,000
U.S. companies and 13,000 foreign companies, derived from a variety of
government and third party sources. Disclosure's document and database
services are provided on a subscription and demand basis through various
media, including paper, laser discs and the Internet. Disclosure also
distributes its information through third-party vendors which include
CompuServe, America Online, The Microsoft Network, and Lexis/Nexis.
- I/B/E/S is a leading source of global earnings estimates, serving
investors, financial institutions and money managers worldwide. I/B/E/S
aggregates and processes earnings per share estimates for over 16,000
companies, developed by 6,700 equity research analysts. The estimates and
supporting data are sold principally on an annual subscription basis
through a proprietary on-line service, printed publications and
third-party distributors.
- Vestek develops, markets and supports investment management applications,
providing portfolio optimization, performance measurement, stock
valuation and asset allocation analytical tools to pension and mutual
fund managers, plan sponsors and insurance companies, primarily in North
America.
- Worldscope is a supplier of standardized fundamental financial data on
over 11,900 public companies from 45 countries, delivered to its
customers through CD-ROM and on-line platforms.
APPLIED INFORMATION TECHNOLOGY
Through TASC, the Company provides high-end information systems engineering
and integration services to government agencies and commercial customers in a
variety of industries. TASC maintains its technological leadership: (i) through
its business of designing and building advanced information systems; (ii) by
performing over $30 million annually in applied information systems research and
development, most of which is government sponsored; and (iii) by maintaining a
highly qualified technical staff, a majority of which have advanced degrees.
TASC contributed 51.8% of the Company's pro forma consolidated 1995 revenues.
TASC's customers utilize its advanced systems engineering and integration
services to support the design, development, management and operation of
sophisticated sensor systems, large scale information processing and
dissemination systems, and strategic and tactical weapons systems. U.S.
government contracts, which generated approximately 86.7% of TASC's 1995
revenues, are focused on classified projects where information technology is
utilized to increase the effectiveness and efficiency of defense systems and
intelligence activities. TASC's revenues have increased for 29 consecutive years
despite changes in the level of government funding of defense and intelligence
activities. The Company believes its products and services will continue to be
in high demand as information technology is increasingly utilized to improve the
effectiveness of defense systems and intelligence activities which face
declining resources. Approximately 68% of TASC's 1995 contract awards were
derived from contracts secured on a sole source basis with U.S. government
defense and intelligence agencies. TASC's ten largest current contracts relate
to work on existing and predecessor programs with which TASC has been associated
for an average of 14 years. Approximately 82% of TASC's 1995 U.S. government
revenues were derived from contracts which provide for cost reimbursement plus a
negotiated fee, allowing a measure of profit margin stability. A significant
amount of these cost-plus contracts also provide for additional fees as
compensation for superior performance. TASC's contract backlog was $512.5
million at March 31, 1996.
While the government's need for information technology remains a stable
source of growth, TASC's strategy is to leverage its information technologies
and applied research and development investment into new higher margin
commercial markets, including weather, aviation, financial services and
communications.
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4
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TASC's subsidiary, WSI, is a dominant provider of real-time weather information
services to news media organizations in the United States, including The Weather
Channel, CNN and a majority of television stations nationwide. Other commercial
applications for TASC's information technologies include document management,
environmental surveillance, aviation systems and interactive multi-media.
BUSINESS STRATEGY
Primark's mission is to help its customers become more effective and
efficient in their own pursuits by providing them with advanced information
technology applications and timely, reliable data. Companies, government
agencies and individuals value the information services purchased based on the
usefulness of such services to their operations or decision-making processes.
Therefore, Primark's principal strategy is to grow by integrating forward into
the processes of its customers and thereby becoming increasingly essential to
them.
Primark uniquely combines the extensive resources of TASC in information
technology applications with strong data content franchises serving the
financial and weather markets. While each of its businesses has a leadership
position in the marketplace on its own, their capabilities can be combined to
provide more integrated solutions that are of greater value to customers.
Primark's primary objective is to maintain robust growth in its core
information businesses. Primark intends to gain additional growth through the
integration of data content from its various companies with software tailored to
meet the needs of specific niche markets. The Company believes it has a number
of competitive advantages, including: (i) leading edge technology maintained
through significant research and development investment; (ii) unique data
content along with proprietary analytics and applications; (iii) comprehensive
and integrated financial information products; and (iv) market recognition for
quality, dependability and technological innovation.
Primark's business strategy is to capitalize on these and other business
strengths to pursue growth opportunities such as: (i) rapid expansion of global
investing by U.S. institutions; (ii) global access to financial investors for
integrated product offerings; (iii) commercial applications of technology
developed through government contracts; (iv) expanded access to new customers,
e.g. individual investors, through electronic distribution; and (v) increased
U.S. government demand for information technology.
The Company intends to continue its expansion through internal growth and
acquisitions to complement its Financial Information and other data content
businesses.
GENERAL
As of March 31, 1996 the Company and its subsidiaries employed 5,395
persons. The Company's principal executive offices are located at Primark
Corporation, 1000 Winter Street, Suite 4300N, Waltham, Massachusetts 02154, and
its telephone number is (617) 466-6611. Primark 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 Datastream International Limited and its affiliates ("Datastream"),
Disclosure, Incorporated ("Disclosure"), I/B/E/S International, Inc.
("I/B/E/S"), Vestek Systems, Inc. ("Vestek"), TASC, Inc. ("TASC"), WSI
Corporation ("WSI"), Triad International Maintenance Corporation ("TIMCO"),
Primark Storage Leasing Corporation ("PSLC") and Worldscope/Disclosure Partners
("Worldscope"), a joint venture in which Disclosure and Wright Investors'
Service each currently hold a 50% interest.
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THE OFFERING
Common Stock Offered by:
The Selling Shareholder..................... 914,276 shares
Common Stock to be Outstanding after the
Offering.................................... 24,778,355 shares (1)
Use of Proceeds............................... The Company will not receive
any of the proceeds from the
sale of shares in the Offering.
See "Use of Proceeds."
New York Stock Exchange Symbol................ PMK
Pacific Stock Exchange Symbol................. PMK
- ---------------
(1) Based upon shares outstanding as of April 30, 1996. Excludes 4,234,903
shares of Common Stock issuable upon exercise of stock options outstanding,
of which 3,295,684 were exercisable at an average price of $9.88 per share
as of April 30, 1996.
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6
<PAGE> 8
SUMMARY CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL DATA
The following table sets forth certain summary consolidated historical and
pro forma financial data of the Company and its subsidiaries. This data should
be read in conjunction with the Consolidated Financial Statements of the Company
and the Notes thereto and Management's Discussion and Analysis of Financial
Condition and Results of Operations, incorporated herein by reference and the
Selected Consolidated Historical and Pro Forma Financial and Operating Data and
the Unaudited Pro Forma Consolidated Financial Statement and Notes thereto
appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------------------------ ------------------------
HISTORICAL PRO HISTORICAL
------------------------------------ FORMA(1) ------------------------
1993 1994 1995 1995 1995 1996
-------- -------- ------------ -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS EXCEPT STATISTICAL DATA AND PER SHARE DATA)
INCOME STATEMENT DATA:
Operating revenues........................ $444,015 $477,026 $617,310 $668,586 $135,861 $180,729
Depreciation.............................. 10,910 12,091 15,068 17,397 3,211 4,138
Amortization of intangible assets......... 15,287 15,446 21,287 26,274 4,353 5,653
Operating income.......................... 37,270 38,036 56,911 61,672 11,817 16,589
Interest expense--net..................... 13,799 13,524 19,303 26,525 3,145 4,748
Income from continuing operations......... 11,729 13,750 18,850 16,230 4,454 6,400
Earnings per share(2)..................... $0.52 $0.62 $0.85 $0.72 $0.20 $0.24
Weighted average common and equivalent
shares outstanding...................... 19,805 19,909 20,602 20,602 20,152 25,362
AS ADJUSTED FOR CONVERSION:
Earnings per share(4)..................... $0.87 $0.75 $0.21 $0.24
Weighted average common and equivalent
shares outstanding(4)................... 21,766 21,766 21,316 26,526
OTHER OPERATING AND FINANCIAL DATA:
EBITDA(3)................................. $63,467 $65,573 $93,266 $105,343 $19,381 $26,380
EBITDA as a % of operating revenues....... 14.3% 13.7% 15.1% 15.8% 14.3% 14.6%
Capital expenditures and software
capitalization.......................... $16,688 $26,988 $28,894 $31,968 $5,940 $7,246
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1996
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BALANCE SHEET DATA: ACTUAL AS ADJUSTED(4)
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(IN THOUSANDS)
<S> <C> <C>
Current assets......................................................................... $236,364 $236,164
Goodwill and other intangible assets--net.............................................. 460,666 460,666
Other noncurrent assets................................................................ 115,800 115,800
-------- --------
Total assets........................................................................... $812,830 $812,630
======== ========
Total debt, including current maturities............................................... $269,519 $269,519
Other current and noncurrent liabilities............................................... 161,452 161,452
Series A Preferred Stock............................................................... 16,874 --
Common shareholders' equity............................................................ 364,985 381,659
-------- --------
Total liabilities and shareholders' equity............................................. $812,830 $812,630
======== ========
<FN>
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(1) Gives effect to the June 29, 1995 acquisition of Disclosure and its
affiliates (the "Transaction"), assuming the Transaction occurred on January
1, 1995. The $185 million portion of the $200 million cash purchase price
was financed with: (i) a $125 million term loan, (ii) $45 million in
borrowings under a $75 million revolving credit facility, and (iii) a $15
million unsecured term loan to TASC. See "Unaudited Pro Forma Consolidated
Financial Information."
(2) Earnings per share represents earnings per common and common equivalent
share before discontinued operations and extraordinary items.
(3) 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.
(4) As adjusted to give effect to the conversion of 674,943 shares of preferred
stock to 1,164,276 shares of Common Stock and the Company's payment of
expenses in connection with the Offering by the Selling Shareholder.
Earnings per share as adjusted gives effect as if the conversion occurred on
January 1, of the periods presented. See "Capitalization" and "Selling
Shareholder."
</TABLE>
7
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RISK FACTORS
In addition to other information in this Prospectus, the following should
be considered carefully in evaluating an investment in the Common Stock.
DEPENDENCE ON FEDERAL GOVERNMENT CONTRACTS
A substantial portion of the Company's revenues is derived from services
performed by TASC directly or indirectly under contracts with the U.S.
government. A small portion of Disclosure's revenues are derived from contracts
with the U.S. government. Revenues derived from contracts with the U.S.
government accounted for approximately 45.0% of the Company's pro forma 1995
revenues and approximately 44.7% of the Company's revenues for the three months
ended March 31, 1996. The Company's revenues from the largest three of such
contracts comprised approximately 11.7% of the Company's pro forma 1995 revenues
and approximately 12.1% of the Company's revenues for the three months ended
March 31, 1996.
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, such as TASC and
Disclosure, 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 TASC's and
Disclosure's products and services are applicable or that TASC and Disclosure
will not be adversely affected by any decline in that spending or commitment by
the U.S. government.
DEPENDENCE ON TECHNICAL PERSONNEL; NEED FOR SECURITY CLEARANCES
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 efforts to attract and retain such qualified professionals.
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. See "Business -- Applied
Information Technology Market -- TASC -- Government Business."
TECHNOLOGICAL CHANGES
The Company operates principally in the information services industry,
which is a rapidly changing industry. Even if the Company remains abreast of the
latest developments and available technology in the industry, it could be
adversely affected by such developments and technological advances and the
introduction of new products and services in the information services industry.
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.
8
<PAGE> 10
LEVEL OF INDEBTEDNESS
The Company has substantial indebtedness. At March 31, 1996, the Company
had consolidated total debt of $269.5 million and consolidated common
shareholders' equity of $365.0 million. See "Capitalization." 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.
FOREIGN CURRENCY EXCHANGE RATE RISK
International revenues accounted for 20.0% of the Company's pro forma 1995
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 1995, the Company
recorded a $2.6 million loss before income taxes for foreign currency contracts
that were finalized or adjusted to market value.
USE OF PROCEEDS
The shares of Common Stock offered hereby are being sold by the Selling
Shareholder. The Company will not receive any of the proceeds from the sale of
such shares. The Company will pay approximately $200,000 in accounting, printing
and other expenses associated with the Offering.
PRICE RANGE OF COMMON STOCK
The Common Stock is listed on the New York Stock Exchange ("NYSE") and on
the Pacific Stock Exchange under the symbol "PMK." The table below sets forth,
for the calendar periods indicated, the high and low intra-day sales price per
share of the Common Stock as reported on the NYSE Composite Tape.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1994
First Quarter................................................................ $15 $11
Second Quarter............................................................... 14 5/8 11 1/8
Third Quarter................................................................ 13 3/8 11 1/8
Fourth Quarter............................................................... 13 1/4 12 1/4
1995
First Quarter................................................................ 14 1/2 12 3/4
Second Quarter............................................................... 18 3/4 14 1/2
Third Quarter................................................................ 26 1/4 17 5/8
Fourth Quarter............................................................... 30 1/4 21 7/8
1996
First Quarter................................................................ 40 27
Second Quarter (through June 5, 1996)........................................ 38 1/2 34 1/4
</TABLE>
The closing sales price for the shares of Common Stock as reported on the
NYSE Composite Tape on June 5, 1996 was $35.375.
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.
9
<PAGE> 11
CAPITALIZATION
The following table sets forth the consolidated capitalization and cash of
the Company as of March 31, 1996, as adjusted to give effect to the conversion
of Preferred Stock to Common Stock and the Company's payment of expenses in
connection with the Offering. See "Use of Proceeds." This table should be read
in conjunction with the Company's Consolidated Financial Statements and Notes
thereto incorporated herein by reference.
<TABLE>
<CAPTION>
MARCH 31, 1996
---------------------------
ACTUAL AS ADJUSTED
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
Cash............................................................... $ 58,939 $ 58,739
======== ========
Total long-term debt............................................... $269,519 $269,519
-------- --------
Series A Preferred Stock........................................... 16,874 --
-------- --------
Common shareholders' equity:
Common Stock, without par value; 65,000,000 shares authorized;
23,597,686 shares(1) and 24,761,962 shares as adjusted,
respectively, issued and outstanding at $0.02 stated value.... 489 496
Additional paid-in capital....................................... 227,156 232,945
Retained earnings................................................ 148,369 148,369
Treasury stock, unearned compensation and cumulative foreign
currency translation adjustment............................... (11,029) (151)
-------- --------
Total common shareholders' equity........................ 364,985 381,659
-------- --------
Total capitalization............................................... $651,378 $651,178
======== ========
<FN>
- ---------------
(1) Excludes 4,246,253 shares of Common Stock issuable upon the exercise of
options outstanding under the Company's stock option plans of which
3,305,384 options were exercisable as of March 31, 1996.
</TABLE>
10
<PAGE> 12
SELECTED CONSOLIDATED HISTORICAL
AND PRO FORMA FINANCIAL AND OPERATING DATA
<TABLE>
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 March 31, 1996 and for the three months ended March
31, 1996 and 1995, (ii) the pro forma data for the fiscal year ended December
31, 1995 and (iii) the as adjusted data for March 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.
The Company's consolidated financial statements as of December 31, 1995 and 1994
and for each of the three years in the period ended December 31, 1995 are
incorporated by reference in this Prospectus 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 March 31, 1996 and for the
three months ended March 31, 1996 and 1995 have been derived from the unaudited
interim consolidated financial statements of the Company incorporated by
reference in this Prospectus. The selected pro forma data are derived from the
Unaudited Pro Forma Consolidated Financial Statements and Notes thereto
appearing elsewhere in this Prospectus. The unaudited information furnished
herein, in the opinion of management, reflects all adjustments necessary for a
fair statement of the results of operations during the interim periods. The
selected financial data should be read in conjunction with the Consolidated
Financial Statements of the Company and Notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
incorporated herein by reference and the information contained in the Unaudited
Pro Forma Consolidated Financial Statement and Notes thereto appearing elsewhere
in this Prospectus.
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------------------------------------------------- --------------------
HISTORICAL HISTORICAL
-------------------------------------------------------- PRO FORMA --------------------
1991(1) 1992(1) 1993 1994(1) 1995(1) 1995(2) 1995 1996
-------- -------- -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS EXCEPT STATISTICAL DATA AND PER SHARE DATA)
INCOME STATEMENT DATA:
Operating revenues................ $133,647 $344,959 $444,015 $477,026 $617,310 $668,586 $135,861 $180,729
Cost of services.................. 97,324 251,891 292,942 309,158 403,435 429,553 81,694 105,407
Selling, general and
administrative.................. 36,609 59,622 87,606 102,295 120,609 133,690 34,786 48,942
Depreciation...................... 2,218 6,211 10,910 12,091 15,068 17,397 3,211 4,138
Amortization of goodwill and other
intangible assets............... 1,401 5,496 15,287 15,446 21,287 26,274 4,353 5,653
-------- -------- -------- -------- -------- -------- -------- --------
Operating income (loss)........... (3,905) 21,739 37,270 38,036 56,911 61,672 11,817 16,589
Interest expense
(income) -- net................. (3,963) 3,863 13,799 13,524 19,303 26,525 3,145 4,748
Foreign currency loss (gain)...... -- (1,130) 1,477 1,329 2,620 2,620 643 (216)
Other expense (income)............ (1,231) 2,480 720 (334) 1,026 1,058 92 45
Income tax expense................ 237 7,306 9,545 9,767 15,112 15,239 3,483 5,612
-------- -------- -------- -------- -------- -------- -------- --------
Income from continuing
operations...................... $ 1,052 $ 9,220 $ 11,729 $ 13,750 $ 18,850 $ 16,230 $ 4,454 $ 6,400
======== ======== ======== ======== ======== ======== ======== ========
Earnings per share(3)............. $ 0.03 $ 0.41 $ 0.52 $ 0.62 $ 0.85 $ 0.72 $ 0.20 $ 0.24
Net income applicable to Common
Stock........................... $ 375 $ 5,821 $ 4,087 $ 12,316 $ 16,882 $ 14,796 $ 4,096 $ 6,041
Weighted average common and
equivalent shares outstanding... 19,689 19,388 19,805 19,909 20,602 20,602 20,152 25,362
AS ADJUSTED FOR CONVERSION:
Earnings per share(4)............. $ 0.87 $ 0.75 $ 0.21 $ 0.24
Weighted average common and
equivalent shares
outstanding(4).................. 21,766 21,766 21,316 26,526
OTHER OPERATING AND
FINANCIAL DATA:
EBITDA(5)......................... $ (286) $ 33,446 $ 63,467 $ 65,573 $ 93,266 $105,343 $ 19,381 $ 26,380
EBITDA as a % of operating
revenues........................ NM 9.7% 14.3% 13.7% 15.1% 15.8% 14.3% 14.6%
Capital expenditures and software
capitalization.................. $ 4,922 $ 8,767 $ 16,688 $ 26,988 $ 28,894 $ 31,968 $ 5,940 $ 7,246
</TABLE>
11
<PAGE> 13
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31, 1996
-------------------------------------------------------- ------------------------
1991 1992 1993 1994 1995 ACTUAL AS ADJUSTED(5)
-------- -------- -------- -------- -------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
BALANCE SHEET DATA:
Current assets............................ $129,103 $140,392 $124,029 $134,998 $220,369 $236,364 $236,164
Goodwill and other intangible assets --
net..................................... 108,480 301,151 290,013 285,625 465,277 460,666 460,666
Property, plant and equipment -- net...... 29,575 43,357 44,682 53,477 71,810 72,501 72,501
Other noncurrent assets................... 42,630 39,504 38,854 33,816 44,943 43,299 43,299
-------- -------- -------- -------- -------- -------- --------
Total assets.............................. $309,788 $524,404 $497,578 $507,916 $802,399 $812,830 $812,630
======== ======== ======== ======== ======== ======== ========
Accounts payable and other current
liabilities............................. $ 35,043 $ 76,901 $ 80,152 $ 92,201 $133,614 $134,879 $134,879
Total debt and capital lease obligations
(including current maturities).......... 55,182 204,545 169,458 150,833 270,968 269,519 269,519
Other noncurrent liabilities.............. 8,980 24,881 22,960 23,227 26,814 26,573 26,573
Series A Preferred Stock.................. 15,190 16,522 16,874 16,874 16,874 16,874 --
Common shareholders' equity............... 195,393 201,555 208,134 224,781 354,129 364,985 381,659
-------- -------- -------- -------- -------- -------- --------
Total liabilities and shareholders'
equity.................................. $309,788 $524,404 $497,578 $507,916 $802,399 $812,830 $812,630
======== ======== ======== ======== ======== ======== ========
- ---------------
<FN>
(1) The historical financial data for the Company includes the following from
their date of acquisition: Disclosure in June 1995 for $200 million; Vestek
in June 1994 for $6.9 million; Datastream in September 1992 for $191
million; and TASC in August 1991 for $167 million.
(2) Gives effect to the June 29, 1995 acquisition of Disclosure and its
affiliates (the "Transaction"), assuming the Transaction occurred on January
1, 1995. The $185 million portion of the $200 million cash purchase price
was financed with: (i) a $125 million term loan, (ii) $45 million in
borrowings under a $75 million revolving credit facility, and (iii) a $15
million unsecured term loan to TASC. See "Unaudited Pro Forma Consolidated
Financial Information."
(3) Earnings per share represents earnings per common and common equivalent
share before discontinued operations and extraordinary items.
(4) As adjusted to give effect to the conversion of 674,943 shares of preferred
stock to 1,164,276 shares of Common Stock and the Company's payment of
expenses in connection with the Offering by the Selling Shareholder.
Earnings per share as adjusted gives effect as if the conversion occurred on
January 1, of the years presented. See "Capitalization" and "Selling
Shareholder."
(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.
NM means not meaningful
</TABLE>
12
<PAGE> 14
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 acquisition of Disclosure and its affiliates (the
"Transaction"). For purposes of the Unaudited Pro Forma Consolidated Financial
Information, the term "Disclosure" shall mean Disclosure, Incorporated and its
affiliates. The Unaudited Pro Forma Consolidated Statements of Income for the
year ended December 31, 1995 assume that the Transaction occurred on January 1,
1995. Accordingly, the pro forma financial information for the 1995 period is
based upon the historical financial statements of Primark for the year ended
December 31, 1995 and of Disclosure for the six months ended June 30, 1995.
Certain reclassifications have been made to the historical income statements of
Disclosure to conform with the historical income statement presentation of the
Company.
The Unaudited Pro Forma Consolidated Statements of Income include the
accounts of Disclosure and give effect to events that are directly attributable
to the Transaction and expected to have a continuing impact on the Company.
Explanations for these adjustments are included in the Notes to the Unaudited
Pro Forma Consolidated Financial Statements.
The Company's Consolidated Statement of Financial Position as of December
31, 1995, as contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, reflects the Transaction and is incorporated herein by
reference. The Company's Unaudited Pro Forma Consolidated Financial Information
should be read in conjunction with the historical financial statements of
Primark and Disclosure and the information contained in the Company's
Management's Discussion and Analysis of Financial Condition and Results of
Operations, incorporated herein by reference.
13
<PAGE> 15
<TABLE>
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
THE YEAR ENDED DECEMBER 31, 1995
----------------------------------------------------------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
DISCLOSURE
THROUGH
PRIMARK JUNE 30, PRO
CONSOLIDATED 1995(A) ADJUSTMENTS FORMA
------------ ------- ----------- --------
<S> <C> <C> <C> <C>
Operating revenues..................... $617,310 $51,356 $ (80)(1) $668,586
-------- ------- -------- --------
Operating expenses:
Cost of services..................... 403,435 26,118 429,553
Selling, general and
administrative.................... 120,609 13,900 (819)(2) 133,690
Depreciation......................... 15,068 2,329 17,397
Amortization of goodwill and other
intangible assets................. 21,287 3,307 2,686 (3) 26,274
(1,006)(4)
-------- ------- -------- --------
Total operating expenses............. 560,399 45,654 861 606,914
-------- ------- -------- --------
Operating income..................... 56,911 5,702 (941) 61,672
-------- ------- -------- --------
Other income and (deductions):
Investment income.................... 1,079 339 (697)(5) 441
(280)(4)
Interest expense..................... (20,382) (788) (6,507)(6a) (26,966)
711 (4)
Foreign currency transaction
loss -- net....................... (2,620) -- (2,620)
Other................................ (1,026) (79) 47 (6b) (1,058)
-------- ------- -------- --------
Total other income and
(deductions).................... (22,949) (528) (6,726) (30,203)
-------- ------- -------- --------
Income before income taxes and
extraordinary item................... 33,962 5,174 (7,667) 31,469
Income tax expense (benefit)........... 15,112 2,319 (2,192)(7) 15,239
-------- ------- -------- --------
Income before extraordinary item....... 18,850 2,855 (5,475) 16,230
Dividends on preferred stock........... (1,434) -- -- (1,434)
-------- ------- -------- --------
Income before extraordinary item
applicable to common stock........... $ 17,416 $ 2,855 $ (5,475) $ 14,796
======== ======= ======== ========
Earnings per common and common
equivalent share before extraordinary
item................................. $0.85 $ 0.72
Weighted average common and common
equivalent shares outstanding........ 20,602 20,602
======== ========
- ---------------
<FN>
(a) Amounts for Disclosure represent historical operating results for the six
months ended June 30, 1995. Operating results for the six months ended
December 31, 1995 are included in the Primark Consolidated column.
</TABLE>
The notes to the unaudited pro forma consolidated financial statements are an
integral part of this statement.
14
<PAGE> 16
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED STATEMENT OF INCOME
1. CONFORMANCE OF ACCOUNTING POLICY
In connection with the Transaction, Disclosure has changed its accounting
policy with respect to revenue recognition of certain subscription sales to
conform with the policies of Primark and provide consistency with its other
subsidiaries. The Unaudited Pro Forma Consolidated Statement of Income (the "Pro
Forma Income Statement") gives effect to the revenues which would have been
recorded under the revenue recognition policies of Primark.
2. NON-RECURRING ADJUSTMENTS
The Pro Forma Income Statement presented excludes the effect of certain
non-recurring charges directly attributable to the Transaction. The Pro Forma
Income Statement for the year ended December 31, 1995 has been adjusted to
exclude $819,000 of non-recurring bonus and severance charges incurred by
Disclosure which were contingent upon its acquisition by Primark.
3. AMORTIZATION OF INTANGIBLE ASSETS AND DEBT ISSUE COSTS
<TABLE>
The Transaction was accounted for as a purchase. Accordingly, the
Transaction purchase price of $200,000,000 along with approximately $6,076,000
of related acquisition fees, was allocated to Disclosure's tangible and
intangible net assets acquired based upon their estimated fair values.
Allocations made to certain intangible net assets acquired consisted of the
following (in thousands of dollars):
<CAPTION>
COST LIFE
------- ---------------
<S> <C> <C>
Non-compete covenants............................... $ 2,417 2 to 3.5 years
Database............................................ 2,600 5 years
Unfavorable lease commitment........................ (3,738) 8.5 years
-------
$ 1,279
=======
</TABLE>
These intangible net assets, along with related net deferred tax assets of
approximately $293,000, are being amortized to income on a straight-line basis
over their estimated useful lives (recognition of deferred income tax assets is
reflected in income tax expense (Note 7)). Additionally, the Company allocated
$10,323,000 to net tangible assets and liabilities. The excess of the
Transaction purchase price over the estimated fair value of total net assets
acquired was allocated to goodwill. Of the total $188,105,000 allocated to
goodwill, $16,360,000 was attributed to I/B/E/S and is being amortized to income
on a straight-line basis over 25 years. The remaining portion will be amortized
on a straight-line basis over 40 years.
Approximately $4,737,000 of the total $6,076,000 acquisition fees represent
debt issue costs incurred in connection with obtaining the external financing
for the Transaction (Note 6a). These costs were capitalized and are being
amortized to income over the related debt terms.
The Pro Forma Income Statement gives effect to the periodic amortization of
all intangible assets and debt issue costs that would have resulted during the
period presented.
4. TRANSACTIONS WITH VNU
The Pro Forma Income Statement gives effect to the exclusion of
Disclosure's net interest income and expense relative to transactions with its
previous parent company, VNU International Inc. ("VNU") which would not have
occurred had the Company owned Disclosure for the pro forma period presented.
Also reflected is the exclusion of goodwill amortization related to Disclosure's
previous acquisitions.
5. INVESTMENT INCOME
Of the $200,000,000 cash consideration paid, along with approximately
$6,076,000 of cash that was paid for debt issue costs and other acquisition fees
associated with the Transaction, $21,076,000 was funded with
15
<PAGE> 17
PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED STATEMENT OF INCOME -- (CONTINUED)
the Company's cash balances. Accordingly, had the Transaction occurred on
January 1, 1995, the Company would have earned lower investment income on
reduced cash balances due to the Transaction funding. The Company's consolidated
cash balances would also have been reduced by the payment of principal, interest
and bank fees on the external financing.
The Pro Forma Income Statement gives effect to the lower investment income
that would have been earned during the period presented. Such calculations were
based upon the actual weighted average investment yields earned during that
period.
6. TRANSACTION FINANCING
a. INTEREST COSTS
The Company obtained $215,000,000 of external financing, of which
$185,000,000 was used to finance the cash consideration paid in the acquisition.
Bank financing was obtained through a $125,000,000 term loan and a $45,000,000
draw on a $75,000,000 revolving line of credit, pursuant to a Term Loan
Agreement (the "Term Loan") and a Revolving Credit Facility (the "Credit
Facility") entered into June 29, 1995. The remaining $15,000,000 of bank
financing was obtained pursuant to a Loan Agreement (the "Loan") dated June 29,
1995 between the Company's wholly-owned subsidiary TASC, Inc. ("TASC") and
Mellon Bank, N.A.
The Credit Facility replaced the Company's prior $75,000,000 credit
agreement due to expire in 1996. The new Credit Facility expires on October 15,
2000. Interest on outstanding borrowings is payable at a rate of 1.75% above the
current prevailing LIBOR rate of interest. For purposes of this presentation,
the outstanding balance on the Credit Facility is presumed to have been reduced
by the net cash sweeps which would have been received from Disclosure. Beginning
in 1996, the Company is eligible for performance pricing adjustments, based upon
meeting certain financial tests, which would reduce the applicable interest rate
margins.
The Company's Term Loan is due June 30, 2002. Principal payments are due
semi-annually commencing on December 31, 1997. For purposes of this
presentation, it is assumed that no principal prepayments were made. Interest on
outstanding borrowings under the Term Loan is payable at a rate of 2.0% above
the current prevailing LIBOR rate of interest.
TASC's Loan is due June 28, 1996. For purposes of this presentation, it is
assumed that semi-annual payments commenced on June 30, 1995. Interest on
outstanding borrowings under the Loan is payable at a rate of 1.75% above the
current prevailing LIBOR rate of interest.
The Pro Forma Income Statement gives effect to the periodic interest
charges on the external financing that would have been incurred during the
period presented.
b. BANK FEES
Commitment fees on the Company's $75,000,000 revolving line of credit are
payable quarterly at a rate of 0.375% per annum on the average daily unused
portion of the facility. For purposes of this presentation, the unused
commitment is based upon the anticipated balance outstanding at the end of each
quarter (See Note 6a). A $100,000 per annum agent's fee is also payable
semi-annually in advance. The Pro Forma Income Statement gives effect to these
periodic expenses that would have been incurred during the period presented.
7. INCOME TAXES
The Pro Forma Income Statement has been adjusted to reflect the combined
amount that would have been accrued for income taxes had the Transaction
occurred on January 1, 1995.
16
<PAGE> 18
BUSINESS
GENERAL
Primark is an international company engaged principally in the information
services industry serving two primary markets, Financial Information and Applied
Information Technology. The Company's Financial Information businesses consist
of the operations of Datastream International Limited and it affiliates
("Datastream"), Disclosure, Incorporated ("Disclosure"), I/B/E/S International,
Inc. ("I/B/E/S"), Vestek Systems, Inc. ("Vestek") and Worldscope/Disclosure
Partners ("Worldscope"). Through its Financial Information businesses, Primark
develops and markets value-added database products which provide financial and
economic information on established and emerging markets worldwide, as well as
proprietary analytical software for the analysis and presentation of such
information. Customers of the Financial Information businesses include
investment managers, investment bankers, accountants, financial professionals,
lawyers, professional researchers and librarians in 59 countries. The Company's
Applied Information Technology activities, conducted through TASC, Inc.
("TASC"), provide a broad spectrum of technology-based information services and
products primarily to U.S. government agencies involved in national security and
intelligence related activities. TASC also serves the weather information market
through its subsidiary WSI Corporation ("WSI"), and has a growing commercial
business, including initiatives in document management, environmental
surveillance, aviation systems and multi-media markets. Primark also owns
businesses involved in aircraft maintenance and natural gas storage leasing.
Primark is a global business with pro forma 1995 revenues and pro forma 1995
EBITDA of $668.6 million and $105.3 million, respectively. International
revenues represented 20.0% of the Company's pro forma 1995 revenues.
Commencing with Primark's acquisition of TASC in 1991, the Company embarked
on a strategy of combining information technology expertise with proprietary
data content to serve the increasing information requirements of its customers
with value-added products. The Company focused its strategy on the financial
information market through its acquisitions of Datastream in 1992 and Vestek in
1994, while divesting certain of its non-core operations. Primark significantly
expanded its domestic presence in financial information content services through
the June 1995 acquisition of Disclosure and its subsidiary, I/B/E/S. As a result
of this strategic transition and internal growth, the global Financial
Information businesses represented 35.3% of Primark's pro forma 1995 revenues
and 60.3% of pro forma 1995 EBITDA.
BUSINESS STRATEGY
Primark's mission is to help its customers become more effective and
efficient in their own pursuits by providing them with advanced information
technology applications and timely, reliable data. Businesses, government
agencies and individuals value the information services purchased based on the
usefulness of such services to their operations or decision-making processes.
Therefore, Primark's principal strategy is to grow by integrating forward into
the processes of its customers and thereby becoming increasingly essential to
them.
Primark uniquely combines the extensive resources of TASC in information
technology applications with strong data content franchises serving the
financial and weather markets. While each of its businesses has a leadership
position in the marketplace on its own, their capabilities can be combined to
provide more integrated solutions that are of greater value to customers.
Primark's primary objective is to maintain robust growth in its core
information technology businesses. Primark intends to gain additional growth
through the integration of data content from its various companies with software
tailored to the needs of specific niche markets. The Company believes it has a
number of competitive advantages including:
- Leading edge technology -- TASC-developed information technology provides
the Company with: (i) superior information technology platforms for
product delivery; (ii) state-of-the-art computer system architecture to
enhance the internal productivity of all Primark businesses; and (iii)
software, communications and computing capabilities to assist the
Company's customers in meeting their own information technology
requirements.
- Unique data content -- Primark's financial and weather information
businesses possess a comprehensive collection of accurate databases
necessary for their customers' operations. Primark invests
17
<PAGE> 19
significant resources to ensure that its data: (i) encompasses the needs
of its customers; (ii) is reliable and accurate; and (iii) is delivered
in a timely fashion for customer use.
- Proprietary analytics and applications -- Primark delivers its data with
proprietary analytical tools and applications designed to enhance the
customer's effective use of the data.
- Integrated financial information product offerings -- Following the
Company's recent acquisition of Disclosure and I/B/E/S, Primark is able
to offer its customers a more comprehensive range of global financial
information to enhance their investment decisions. Primark can provide
its customers with historical and current company accounts, securities
prices, financial documents, country and industry economics, earnings
estimates and associated financial accounting and investment software.
- Strong name recognition -- Primark has assembled a group of companies
with well recognized names in their fields of operations. TASC,
Datastream, Disclosure, I/B/E/S, Vestek, Worldscope and WSI are widely
recognized in their respective markets for quality, dependability and
technological innovation.
Primark's business strategy is to capitalize on these and other business
strengths to pursue growth opportunities, including the following:
- Rapid expansion of global investing by U.S. institutions -- Primark's
comprehensive international financial and economic databases ideally
position the Company to capitalize on the current trend toward global
investing and attendant demand for foreign financial information. In the
United States alone, according to Intersec Research, international assets
held by pension funds grew at a compound annual rate of 33.7% from $94
billion in 1990 to $300 billion in 1994. By 1999, these international
assets are expected to grow by 19.3% annually to $725 billion.
- Cross-selling of Primark's financial information products -- Primark's
acquisitions of Disclosure, I/B/E/S and Vestek have provided Datastream
with an extensive customer base and network of sales and support offices
reaching the community of U.S. financial institutions and investors.
Similarly, Datastream's extensive international sales and customer
support organization provides Disclosure, I/B/E/S and Vestek with access
to investment communities around the world. Datastream's U.S. revenues
and Disclosure's international revenues grew at compound annual rates of
22.2% and 38.5%, respectively, from 1992 to 1995, to $9.7 million and
$7.6 million, respectively.
- Commercial applications of information technology developed under
government contracting -- Primark is pursuing numerous commercial
business initiatives which will leverage its government-developed
information technology. TASC utilized its satellite imaging,
communications, database and workstation technology as the foundation for
WSI's weather information business. TASC has also focused on document
imaging, environmental surveillance, aviation systems and interactive
multi-media to extend its information technology expertise. From 1991 to
1995, TASC's commercial revenues grew at a compound annual rate of 23.1%,
from $20.2 million to $46.4 million.
- Access new customers through electronic distribution -- The Company is
rapidly expanding its ability to reach individual investors through
electronic distribution channels. Recently, the Company entered into
distribution agreements with America Online and The Microsoft Network,
and inaugurated an Internet service. Primark currently has data
distribution agreements with 56 third party vendors.
- U.S. government demand for information technology -- U.S. government
initiatives to reduce national security spending are expected to continue
to provide a strong impetus to TASC's growth. The U.S. government is
increasingly relying on information technology in areas such as: (i)
battlefield simulations in lieu of live exercises; (ii) backfitting of
existing hardware with superior information technology, e.g. "smart"
weapons, in lieu of new program/hardware development; (iii) computer-
based analysis and testing instead of hardware prototypes; and (iv)
logistical support. TASC's government revenues grew at a compound annual
rate of 8.1% from 1991 to 1995.
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The Company intends to continue its expansion through internal growth and
acquisitions to complement its Financial Information and other data content
businesses. The Company from time-to-time has, and currently is, engaged in
discussions regarding such potential acquisitions and divestitures, although no
binding agreements regarding any such transactions have been reached.
INFORMATION SERVICES SEGMENT
Primark's information services segment serves two primary markets,
Financial Information and Applied Information Technology. The operations of
Datastream, Disclosure, I/B/E/S, Vestek and Worldscope provide the financial
information markets with economic and financial information and analysis of the
information through proprietary software. TASC's applied information technology
activities provide a broad range of technology-based information services and
products, primarily to U.S. government national security and intelligence
agencies and, increasingly, to commercial customers.
FINANCIAL INFORMATION MARKET
Primark's Financial Information businesses provide a broad range of unique
database products, delivery systems, software and support services to meet the
rapidly growing demand for global financial and economic data and analytics by
financial and investment professionals worldwide. A significant percentage of
Financial Information revenues are generated under annual subscriptions or
service agreements with historical renewal rates exceeding 90%. Of the Company's
pro forma 1995 revenues attributable to the Financial Information businesses,
54.3% were generated by sales to customers outside the United States.
DATASTREAM
Founded in 1964 and acquired by Primark in 1992, Datastream provides
on-line historical economic and financial information, along with proprietary
analytical software for accessing and manipulating such information. Datastream
is also a leading provider of computer-based investment valuation and fund
services in the United Kingdom. Datastream's customers include approximately
1,800 financial organizations in 49 countries, including investment bankers,
brokers, pension and money fund managers and insurance companies that use
financial and economic information for investment research and analysis. Other
users include publishers of financial journals and daily newspapers, business
schools and universities. Approximately 92% of Datastream's 1995 revenues were
derived from outside the United States.
The core of Datastream's operations is its centralized data system which
maintains a series of linked databases of extensive international economic and
financial data collected from wire services, official publications of national
and international agencies, stock, options and futures exchanges, other
information vendors, brokers, dealers, banks and issuers. Customers have on-line
access to Datastream's databases through personal computers, networks or
workstations. Datastream's products and services enable customers to perform
extensive investment research and analysis, investment administration and
portfolio valuations on securities in all major markets, and to produce
graphics, statistics and time series analysis and perform other analytical
functions.
Datastream's customers typically subscribe through annual contracts. These
contracts are automatically renewed, unless notice of cancellation is given two
months before the annual renewal date. None of Datastream's customers
contributes more than 3% of Datastream's total revenues. Datastream has
experienced historical renewal rates for its subscription services of over 90%.
Datastream's products and services fall into two principal categories --
investment research and fund management services.
Investment research services accounted for approximately 86%, 85%, 82% and
80% of Datastream's total revenues for the three months ended March 31, 1996 and
the fiscal years ended November 30, 1995, 1994 and 1993, respectively. These
services consist of a set of software programs to manipulate, analyze and
present financial and economic information obtained from Datastream's databases.
The software is designed to facilitate the customers' access to data from any of
Datastream's databases, and to manipulate this data in a variety of
pre-programmed and pre-formatted ways, such as graphs, regressions and tables.
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Fund management services accounted for approximately 14%, 15%, 18% and 20%
of Datastream's total revenues for the three months ended March 31, 1996 and the
fiscal years ended November 30, 1995, 1994 and 1993, respectively. Fund
management services provide investment accounting, portfolio valuation and
performance measurement activities predominantly to fund managers, unit trusts,
mutual funds and portfolio managers located primarily in the UK. Other customers
include UK clearing banks, insurance companies and international financial
institutions.
A critical component of Datastream's business is the data itself.
Datastream's principal supply requirements are for raw financial data which are
acquired from numerous data suppliers worldwide and developed internally. Once
acquired, the data are edited and stored in Datastream's databases for access
and manipulation through Datastream's applications and value-added software
programs. Data suppliers generally retain ownership of the raw data, but allow
Datastream and its customers the use of such data. Datastream places great
importance on the quality of its data and has developed a program to
continuously review its data sources to ensure quality, control and continuity.
Wherever possible, Datastream develops multiple sources of data to provide
backup and cross checking.
Data relating to equities include pricing information for earnings and
dividends on approximately 44,000 stocks from 58 countries including all major
markets and a number of emerging markets. This data include historical earnings
and dividend data, as well as forecast data supplied by market specialists. Data
relating to bonds include maturity and yield on approximately 90,000 corporate
and government bonds from 42 countries, all Eurobonds and related indices.
Datastream's financial information data cover 13,000 companies worldwide. Data
relating to futures and options include current prices, previously traded
prices, trading volume and intra-day high and low values from the international
options and futures exchanges, including LIFFE (London), MONEP and MATIF
(Paris), SOFFEX (Switzerland), EOE (Amsterdam), DTB (Germany), Chicago and
Philadelphia.
Datastream has included databases from both I/B/E/S and Worldscope as an
integral part of its investment research services. Consequently, it has helped
these two companies gain additional customers, as well as customers new to
Datastream. Datastream has also installed the full Disclosure index on its
on-line system, and offers index searches and electronic ordering of hardcopy
documents to Datastream users. Vestek is also developing investment management
software products which will be marketed and supported by Datastream's European
sales and service personnel.
DISCLOSURE
Founded in 1968, Disclosure was acquired by the Company on June 29, 1995.
Disclosure is the leading provider of "as reported" and abstracted financial
information in the U.S. market, covering over 16,000 U.S. companies and 13,000
foreign companies, derived from a variety of government and third-party sources.
Disclosure's image-based and database services are provided on a subscription
and demand basis through electronic media such as on-line terminals and compact
laser disks, as well as through printed products. Disclosure's customer base
includes the majority of U.S. investment banks, law and accounting firms,
together with other institutions and individuals performing financial research.
Disclosure's offering of financial information includes a wide spectrum of
SEC documents, such as Forms 10-K and 10-Q, proxy statements, registration
statements and material event reports, as well as non-SEC documents such as U.S.
and foreign annual reports. Disclosure's archival collection totals more than
four million documents dating back to 1968. The information included in
Disclosure's products is obtained through contractual relationships with the SEC
and major stock exchanges, as well as commercial acquisition of the information.
Once acquired, Disclosure indexes, tags and formats the information to allow for
ease in navigation, searches and analysis. This information is then delivered to
clients through a variety of products including Laser D (an image-based CD-ROM
product), Disclosure Select (a user-defined subset of the Laser D document
collection), Compact D (a searchable electronic database on CD-ROM), Global
Access (an Internet-based index of Disclosure documents featuring on-line
ordering and retrieval), on-line distribution channels and printed products.
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Subscription services, including on-line vendor distribution channels,
accounted for 50%, 51% and 50% of Disclosure's revenues for the three months
ended March 31, 1996 and the years ended December 31, 1995 and 1994,
respectively. Disclosure has experienced renewal rates for its subscription
services in excess of 90%. The remainder of Disclosure's revenues are
predominantly derived from sales at Disclosure's Demand Centers. No single
customer accounts for more than 5% of Disclosure's revenues. Disclosure's
products fall into two major categories: image-based services and database
services.
Disclosure's image-based services provide financial documents via paper,
microfiche, a CD-ROM product, and on-line services. The delivery of
document-based information is handled through Disclosure's Demand Centers, as
well as the Laser D and Global Access Applications. The Demand Centers are
staffed by research specialists who assist customers in locating requested
information and provide alert services for customers who want early
identification of specified documents. In 1995, Disclosure delivered over one
million documents through its Demand Centers network. Laser D is a multi-disc
CD-ROM document database which provides a desktop library of information to high
volume document users who require instant access to documents filed with the
SEC, banking agencies and U.S. and foreign stock exchanges. Global Access is an
Internet-based product that offers on-line delivery of Disclosure's unique
proprietary electronic index of public company documents and access to the SEC's
EDGAR filings. Global Access provides desktop searching and ordering from
Disclosure's information repository of over 29,000 companies. Approximately 83%,
81% and 83% of Disclosure's total revenues were derived from image-based
services for the three months ended March 31, 1996 and the twelve months ended
December 31, 1995 and 1994, respectively.
Disclosure's database segment provides products which can be machine read
and manipulated by the end users. The products are delivered on CD-ROM disks,
through direct electronic and tape feeds to clients and through a growing list
of third party on-line vendors. The Company's EdgarPlus product contains all
EDGAR filings from 1993 to present and full text filings back to 1987 through
Disclosure's SEC On-line product, all of which have been enhanced with
value-added navigational and formatting tags. The SEC On-line product had been
creating EDGAR type databases prior to the EDGAR project's implementation by the
SEC. The Disclosure/SEC Database is an abstracted database containing a
collection of company profiles and financial statements on over 11,000 U.S.
public companies, indexed and organized for searching and screening. The Company
also delivers other products such as the New Issues Database, which is a
collection of abstracted information on security registrations and initial
public offerings and Compact D/Canada, which provides information on 10,000
Canadian companies. Approximately 17%, 19% and 17% of Disclosure's total
revenues were derived from database services for the three months ended March
31, 1996 and the years ended December 31, 1995 and 1994, respectively. See
Amendment No. 2 on Form 8-K/A dated October 26, 1995 to the Company's Current
Report on Form 8-K dated July 3, 1995 which includes the historical financial
statements of Disclosure.
I/B/E/S
I/B/E/S is a leading source of global earnings estimates for investors,
financial institutions and portfolio managers worldwide. I/B/E/S collects and
processes earnings per share estimates provided by 6,700 individual securities
analysts representing approximately 790 firms on 16,000 companies globally. The
estimates and related data are delivered through third party distributors,
I/B/E/S Express (a proprietary software delivery system) and in printed
publications. Approximately 78% of I/B/E/S' 1995 revenues were derived through
annual subscription contracts and 22% through soft dollar arrangements. Many
I/B/E/S products permit the customer to perform manipulative functions and are
enhanced by analytics and graphics.
I/B/E/S, founded in 1971 and acquired by Disclosure in June 1994, serves
over 1,000 customers worldwide. I/B/E/S customers are represented by financial
institutions and portfolio managers, with particular strength in the
quantitative analysts who access and download information directly into
analytical models. I/B/E/S products are also sold to end users, such as
management consultants and traditional investment analysts who utilize I/B/E/S
for general research. No customer contributes more than 2% of I/B/E/S' total
revenues.
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VESTEK
Acquired by Primark in June 1994, Vestek develops, markets and supports
investment information services and application software used to manage, analyze
and optimize institutional portfolios of equity, fixed income and other
financial instruments. Vestek also provides consulting services for investment
managers and plan sponsors. Vestek currently serves over 200 clients in five
countries, including major banks, plan sponsors, consultants, insurers and
investment managers. The majority of Vestek's revenues are derived from on-line
services. None of Vestek's customers contributes more than 6% of Vestek's total
revenues.
WORLDSCOPE
Worldscope contains a collection of descriptive profiles and detailed
financial statements on over 11,900 companies in 45 countries. Worldscope is
indexed and organized for cross-border screening and searching. In addition to
its global database, Worldscope offers an emerging market database. Worldscope
products are delivered via third party distributors, CD-ROM and on-line
platforms. Worldscope is a joint venture currently owned 50% by the Company and
50% by Wright Investors' Service.
TRADEMARKS
Primark's financial information companies hold numerous trademarks
worldwide which are subject to continuous renewal for periods ranging up to 20
years. These trademarks are significant to the Company's business, and are
registered in all of the Company's major markets to ensure recognition among its
many global trading customers.
MARKETING
The products and services of Primark's financial information companies are
marketed worldwide. Datastream is headquartered in London, England and has sales
and support offices located in Germany, France, Italy, Switzerland, The
Netherlands, Sweden, Japan, Hong Kong, Singapore, Thailand, Australia, Korea,
Canada and the United States.
Disclosure, headquartered in Bethesda, Maryland, markets and distributes
its products, predominantly in the United States. In addition to employing a
domestic and international sales force, Disclosure extends its sales and
marketing reach with Demand Centers strategically located in the major financial
centers including ten offices in major U.S. cities and several international
locations including London, Frankfurt, Madrid, Paris, Milan, Hong Kong, Mexico
City and Tokyo.
I/B/E/S, headquartered in New York City with offices in London and Tokyo,
delivers its products directly to customers via state-of-the-art electronic
delivery media. I/B/E/S Express, the fastest growing delivery mechanism, is a
PC-based proprietary software, database management and communications package.
I/B/E/S also offers its products through a network of more than 30 electronic
third party distributors, including FactSet, OneSource, Datastream, FAME,
Bloomberg, Reuters, Telerate and CompuServe. These third party distributors
offer I/B/E/S a mechanism to reach new markets and link I/B/E/S data to other
databases and applications software.
In addition, Datastream is marketing and selling I/B/E/S products in Asia
and plans to market and sell Disclosure products in both Asia and Europe in the
near future.
No single customer of the Financial Information businesses accounts for
more than 5% of the Company's consolidated revenues.
COMPETITION
The global financial information industry is highly competitive. The
advancement of electronic delivery via on-line vendors and the Internet has
further impacted the competitive environment in the financial information
market. There are many large and successful companies in the financial
information services industry which supply financial data competitive to
products and services provided by Primark's Financial Information businesses.
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Principal competitive factors include the quality, reliability and
comprehensiveness of the analytical services and data provided, flexibility in
tailoring services to client needs, experience, innovation, the capability of
technical and client service personnel, data processing and decision support
software, reputation, price and geographic coverage. Primark distinguishes its
products through its broad international coverage, wide range of databases, high
accuracy of the data, proprietary software applications, reputation, experience
and quality of customer support provided.
I/B/E/S competes on quality, depth and breadth of data, price, accuracy and
timeliness of delivery. I/B/E/S' major direct competitor is First Call, a unit
of the Thomson Corporation. While First Call provides certain services not
currently offered by I/B/E/S' products, I/B/E/S believes its products are more
globally comprehensive and provide a unique historical database for analysis and
backtesting.
Overall, Primark's ability to remain competitive in the financial
information markets will depend largely upon its ability to maintain and develop
new products and access new markets in a cost efficient manner, including
integration of all its financial information products and services. There can be
no assurance that Primark will continue to maintain its market share in the
future.
FOREIGN OPERATING RISKS
Substantially all of Datastream's revenues are derived from various foreign
markets. Approximately 47% of Datastream's 1995 revenues were derived from the
U.K. Consequently, the Company is exposed to certain risks associated with an
international business, particularly with respect to foreign currency exchange
rate movements. Datastream's business is also subject to the customary risks
associated with international transactions, including political risks, local
laws and taxes, the potential imposition of trade or currency exchange
restrictions, tariff increases and difficulties or delays in collecting accounts
receivable. Weak foreign economies and/or a weakening of foreign currencies in
certain countries against the U.S. dollar would adversely affect Datastream's
overall future operating results and cash flows. However, operating income,
under this condition, has been and will continue to be somewhat insulated due to
high levels of British pound-based operating expenses which also fluctuate
against the U.S. dollar. The Company has been and will continue hedging the
currency risk associated with Datastream's foreign operations as may be needed
in the future.
APPLIED INFORMATION TECHNOLOGY MARKET
TASC
TASC was founded in 1966 to provide solutions to complex analytical and
technological problems. Concentrating on the application of leading-edge
information technology, TASC now provides a broad spectrum of products, services
and systems primarily to U.S. government organizations responsible for
intelligence and national defense activities. Growing demand for information
technology support has increased TASC's government and commercial customer base,
both in the United States and internationally.
Primark acquired TASC in August 1991 as the information technology
cornerstone of its planned information services business. Primark recognized
that not only would the U.S. government have greater needs for information
technology but also that TASC was capable of expanding its customer base to many
other organizations. Technology developed by TASC under U.S. government
contracts could be readily applied to create new products and services and to
assist commercial organizations in improving internal performance as well as
service to their own customers. For example, using internally developed imaging,
database, communication and workstation technologies, TASC has leveraged its
weather information subsidiary, WSI, into a leading market position.
As Primark has acquired data content companies such as Datastream,
Disclosure, I/B/E/S and Vestek, it has used TASC to assist these acquisitions in
a variety of ways. TASC has participated in the development of technology
platforms that are used to deliver data and software to Financial Information
customers and, in one case, undertook turn-key development of a new product
platform, Easystream. TASC has also played a vital role in planning and
development of the internal computer systems architecture and world-wide
communications networks used by Primark's Financial Information businesses.
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Finally, TASC has assisted the customers of the Financial Information
businesses with their own internal information technology requirements, often
involving the integration of data from Primark with internal databases and other
third-party data. To accomplish these various objectives, personnel from TASC
consult on a reimbursable basis for periods of up to one year or TASC enters
into contracts with other companies within Primark.
TASC maintains its leadership in information technology in two principal
ways. First, TASC's core business involves the design and development of
advanced systems that encompass various information technologies, including
database development and access, software engineering, information system
architecture design, simulation and modeling, signal processing and visual
computing. While this work keeps TASC at the leading edge, TASC also receives
research contracts sponsored by U.S. government agencies to develop these
technologies further. In addition, TASC conducts its own internal research and
development programs. Total TASC research spending has historically exceeded $30
million annually. TASC has built the information technology research area as an
independent revenue source and uses the results of such research to continue to
support other business areas of TASC and the Company.
Second, TASC recruits top talent from leading universities, research
laboratories and businesses, retaining these individuals by providing
challenging work in a stimulating atmosphere. Of TASC's 2,465 employees as of
March 31, 1996, approximately 86% were professional or technical personnel, the
majority of which hold advanced degrees in engineering, computer science,
mathematics, earth and environmental sciences, business or economics. TASC
maintains 27 offices in the United States and abroad to provide its customers
with ready access to its personnel. The recognized quality and professionalism
of TASC's staff in providing unique information technology solutions to both
governmental and commercial customers have contributed to TASC's record of 29
years of uninterrupted growth in revenues.
For the three months ended March 31, 1996 and the years ended December 31,
1995, 1994 and 1993, respectively, approximately 45%, 49%, 57% and 60% of
Primark's consolidated historical revenues were derived from contracts that TASC
holds with U.S. government agencies and from subcontracts with U.S. government
prime contractors.
Government Business
TASC's strategy with its U.S. government customers is to provide high value
through the design, development and implementation of major systems that will
enable these customers to perform their missions in a superior manner and at
lower cost. Through the experience and qualifications of its personnel and its
history of performing top quality work, TASC is able to command higher prices
and margins than many competitors. However, TASC believes its solutions provide
the lowest overall cost to customers since systems provided through TASC are
typically completed within schedule and budget, and most importantly, combine
state-of-the-art capabilities with reliable performance.
In many cases, TASC assists its U.S. government customers with the
determination of future requirements, assessments of technical feasibility, cost
estimates and systems design. Work of this nature is often termed systems
engineering, and involves mathematical modeling of complex systems development,
risk assessment, cost-performance tradeoffs, engineering, management information
systems development and decision support services.
Once a system has been designed and approved for procurement, TASC
frequently supports its customers in the development, testing and deployment of
such systems. Work of this nature is called program management support. TASC
participates in structuring requests for proposals and in evaluating responses.
Once contractors have been selected, TASC supports its government customers in
overseeing the performance of these contractors. In addition to continuing much
of the systems engineering work described in the preceding paragraph, TASC
performs configuration control, testing and independent validation and
verification, along with maintaining the management systems used to monitor
cost, schedule and performance. TASC has developed its own tools, models,
software and methods to perform both systems engineering and program management
support.
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In performing systems engineering and program management support work, TASC
acts as an "extension" of the government organization management team,
supporting them in their responsibilities to manage multiple contractors to
create complex operational systems. TASC has tended to align itself with a wide
variety of long-term classified government programs of significant national
importance. TASC helps government managers in their oversight of these programs
and in sustaining technological superiority by moving systems from one
generation to the next.
Systems engineering and program management support comprise the majority of
TASC's work for the U.S. government, but TASC also builds and implements
turn-key systems itself. This work, called specialized information system
integration, is usually done by integrating commercial hardware and software
programs with TASC-developed custom software.
Due to its technology and management expertise, TASC is also called upon to
provide analytical studies and evaluations of various technical, organizational
and policy issues for U.S. government customers in areas of defense,
intelligence, arms control, economic assessment, procurement and manufacturing.
For use in manufacturing applications, TASC has developed unique analytical
tools and databases to measure the cost and effectiveness of government
incentive strategies and defense system warranties. For example, TASC authored
the recent "Perry" study (named after Secretary of Defense Perry) on the cost of
U.S. government regulations in the procurement process.
TASC has successfully grown its U.S. government business revenues in the
face of national security spending cutbacks through the company's emphasis on
leading edge technology and its application to critical missions. As the U.S.
government has shifted to using information technology to maintain an adequate
defense posture with fewer resources, TASC has increased its emphasis on
surveillance, command/control communications, simulation, "smart weapons" and
the integration of tactical and strategic intelligence.
The following are certain important characteristics of TASC's business with
the U.S. government:
Concentration. Approximately 89%, 87%, 88% and 89% of TASC's revenues for
the three months ended March 31, 1996 and the years ended December 31, 1995,
1994 and 1993, respectively, was derived from contracts held by TASC with U.S.
government agencies and from subcontracts with U.S. government prime
contractors. TASC's revenues from its three largest contracts with the U.S.
government comprised approximately 24%, 23%, 26% and 32% of TASC's total revenue
for the three months ended March 31, 1996 and the years ended December 31, 1995,
1994 and 1993, respectively. No other single customer accounted for 10% or more
of TASC's or Primark's consolidated revenues for these periods.
Government Security Clearances. TASC is involved in a number of classified
programs and its 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.
Pricing. TASC's U.S. government business is performed under cost
reimbursement, fixed price and fixed-rate time and materials ("T&M") contracts.
Cost reimbursement contracts awarded to TASC include cost plus fixed fee and
cost plus award fee contracts. Fees may either be fixed by the contract (cost
plus fixed fee), or variable based on actual performance within specified limits
for such factors as cost, quality and delivery schedule, and the customer's
subjective evaluation of TASC's work (cost plus award fee). TASC is subject to
regular audit with respect to costs incurred and charged to the government. For
the year ended December 31, 1995, approximately 82% of TASC's revenue from U.S.
government contracts was generated by cost reimbursement contracts;
approximately $321 million and $215 million of TASC's backlog at December 31,
1995 and 1994, respectively, were associated with cost reimbursement contracts.
See "-- Backlog."
Under fixed price contracts, TASC agrees to perform certain work for a
fixed price and, accordingly, realizes the benefit or detriment resulting from
decreased or increased costs of performing the contract. Under a fixed-rate T&M
contract, TASC has the responsibility to deliver professional services at a
predetermined hourly rate; thus, the profitability of such contracts depends
upon TASC's ability to deliver the specified services at costs below the rates
received from the government. For the year ended December 31, 1995,
approximately 18% of TASC's revenue from U.S. government contracts were fixed
price or fixed rate T&M
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contracts; approximately $131 million and $73 million of TASC's backlog at
December 31, 1995 and 1994, respectively, were associated with such contracts.
See "-- Backlog."
Annual Funding. The U.S. government programs in which TASC participates
may extend for several years, but are normally contracted and funded on an
annual basis. Government contracts generally are conditioned upon the continuing
availability of Congressional appropriations. Congress usually appropriates
funds on a fiscal year basis, even though contract performance may take several
years. Consequently, at the outset of a major program, the contract is usually
partially funded and additional monies are normally committed to the contract by
the procuring agency only if and as appropriations are made by Congress for
future fiscal years.
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 the continued funding of TASC's existing contracts with the U.S.
government and may limit the ability of TASC to obtain additional contracts. All
contracts made with the U.S. government may be terminated by the U.S. government
at any time, with or without cause. In addition, TASC's operations are subject
to the usual risks inherent in contracting with the U.S. government on national
security related programs such as national and global political, social and
economic events that may affect U.S. national security programs. 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 TASC's products and services are applicable or that TASC will
not be adversely affected by any decline in that spending or commitment by the
U.S. government.
TASC has rarely had a contract cancelled and has been working on most of
its programs for many years; in some cases, this has encompassed the entire
29-year history of the company. However, one notable exception was TASC's
contract with the BMDO, which was formerly called the Strategic Defense
Initiative. TASC was one of the largest of three systems engineering and
technical assistance contractors for this program, and held a contract to
support the program for over six and one-half years, from April 1, 1988 to
December 31, 1994. Revenues from this contract peaked in 1992, reaching $55.6
million. Due to changing government priorities, funding was reduced to $40.6
million in 1993 and $16.5 million in 1994. The contract was recompeted for 1995
and the number of prime contractors reduced from three to one. Although TASC was
not selected for the contract, it continues to perform a modest amount of work
for BMDO. Despite these funding cuts, TASC was able to grow its overall revenues
in 1994, 1995 and in the first three months of 1996 by 5.6%, 10.9%, and 7.7%,
respectively. During these same periods, TASC's non-BMDO revenues grew 16.0%,
16.6% and 9.5%, respectively.
Backlog. TASC's backlog (anticipated revenues from the uncompleted
portions of existing government contracts, including options to continue
specific contracts beyond the current funding period) at March 31, 1996,
December 31, 1995 and 1994 was approximately $513 million, $453 million and $288
million, respectively. The increase in 1995 is principally due to a very high
"win" rate of competitively bid contracts, together with a sustained level of
sole-source negotiated awards. Approximately $247 million of the 1995 backlog
and $263 million of the March 31, 1996 backlog represent revenues expected to be
realized beyond a 12 month period. TASC's backlog is subject to seasonal
fluctuations as a result of multi-year contracts and annual renewals of other
contracts throughout the year. Substantially all of TASC's contracts reflected
in the backlog are subject to termination at the convenience of the customer.
Commercial Business
While the U.S. government's need for information technology remains a
stable source of growth, the principal growth strategy for TASC is to leverage
information technology developed under government contracts into new higher
margin commercial markets. Most importantly, TASC has used its satellite
imaging, communications, database and workstation technologies as the foundation
for the weather information business of its subsidiary, WSI.
WSI provides its clients with timely and accurate weather information
services on a 24 hour basis. WSI, through the application of information
technology supplied by TASC, has developed automated satellite ground stations
to receive information from meteorological satellites which are used to create a
variety of
26
<PAGE> 28
information products, including weather satellite images commonly seen on
commercial television. An information system has been built to use this
information from meteorological satellites, together with inputs from the U.S.
national network of weather radar and worldwide observations of weather
conditions supplied through the World Meteorological Organization. This data,
along with forecasts and warnings provided by the U.S. National Weather Service,
is used as the basis for specialized information services which are provided to
users of real-time weather information including news media organizations, the
aviation industry, agri-businesses, and energy utilities. TASC also provides
weather information services throughout Europe through its two weather related
United Kingdom subsidiaries, The Weather Department, Ltd., and The Computer
Department, Ltd.
TASC is entering a number of new commercial markets on a worldwide basis,
using information technology developed under U.S. government contracts. Document
management is a fast-growing market as more businesses move to the "paperless
office" to organize their data, speed information retrieval and reduce storage
costs. Using proprietary data compression and COLD (computer output to laser
disk) software, TASC has designed and built document management systems for
financial services and health care firms, as well as for state government
agencies. TASC's geographic information systems software, sensor technology and
hyperspectral analysis capabilities have positioned it to perform environmental
analysis, surveillance and monitoring for business and government, both within
the United States and in foreign countries. Aviation systems engineering and
development has been an active growth area for TASC, with contracts completed or
in process for several airlines, air cargo carriers, the Eurocontrol air traffic
system, the Federal Aviation Administration and the governments of the United
Kingdom and Poland. TASC's extensive capabilities in the collection, storage,
retrieval and dissemination of imagery data have positioned it well to serve the
technology needs of the entertainment, cable and telephone companies entering
the interactive multi-media field. Additionally, TASC's communications engineers
have assisted major oil companies and financial institutions with network design
and are providing support to Motorola in the development of the Iridium personal
communications system.
MARKETING
TASC's marketing activities are conducted principally by its senior
management and by its professional staff of engineers, scientists and analysts.
TASC's marketing approach for both U.S. government and commercial organizations
begins with the development and organization of information concerning both
present and future requirements of potential customers. TASC believes that its
marketing approach enables it to anticipate the technical and other needs of its
customers, and allows it to develop proposals which satisfy customers'
requirements. TASC places significant emphasis on the importance of client
satisfaction and development of repeat business.
TASC prepares a number of proposals in response to U.S. government Requests
for Proposals ("RFPs"). The bidding on RFPs is often highly competitive and
preparing bids is an expensive and time consuming process requiring significant
allocation of highly qualified TASC personnel. If TASC's proposal for a contract
is accepted, TASC and its customer will negotiate and enter into a contract with
agreed upon price, terms and conditions. In addition, TASC often submits
unsolicited proposals to various U.S. government agencies which often lead to
contract awards on a negotiated basis. Approximately 32% of TASC's 1995
contracts resulted from the competitive RFP process.
For commercial markets, TASC utilizes direct sales personnel, mailings,
trade journal advertising and trade shows to distribute information on the
products and services offered. The marketing of larger, customized systems often
uses techniques similar to those employed for the U.S. government, involving
professional personnel, the submission of unsolicited proposals and the response
to commercially prepared RFPs.
COMPETITION
Most of the business areas in which TASC is involved are competitive and
require highly skilled and experienced technical personnel. TASC believes that
the skills and experience of its technical personnel are
27
<PAGE> 29
critical to maintaining its competitive position. Many of these business areas
also require high levels of U.S. government security clearances, as previously
discussed. TASC competes with many companies in the business areas in which it
is engaged, some of which have greater resources than TASC, and there can be no
assurance that TASC will compete successfully in the future.
Many of TASC's contracts are acquired as a result of competitive bidding,
only a portion of which may result in the award of contracts. TASC believes that
its success in the competitive bidding process depends on a variety of factors,
including the technical content of the contract proposal, performance on
previous contracts, reputation, experience and price.
OTHER SEGMENTS
TRANSPORTATION SERVICES
Triad International Maintenance Corporation ("TIMCO") was formed by the
Company in 1989 to operate a newly constructed heavy aircraft maintenance
facility located at the Piedmont Triad International Airport in Greensboro,
North Carolina. TIMCO opened for business in October 1990. The company provides
major aircraft maintenance services such as scheduled maintenance checks,
modifications, overhauls and repair work on transport category aircraft. TIMCO
holds a Class IV Repair Station Certificate issued by the Federal Aviation
Administration which enables TIMCO to work on all aircraft types. TIMCO has also
been classified as a Designated Alteration Station by the FAA, allowing the
company to approve major modifications to aircraft normally reserved for the
FAA.
TIMCO's services are offered to the industry at large but, in particular,
to operators and owners of aircraft who do not have maintenance facilities of
their own, or whose facilities are unable to accommodate an increasing workload.
Emphasis has been and will continue to be placed on air cargo carrier customers
which have limited facilities to accomplish their required work. In addition,
TIMCO targets both aircraft involved in sale or lease transactions and passenger
airlines without adequate maintenance facilities as potential sources of
business.
TIMCO currently has six major customers, ABX Air, Inc. (also known as
"Airborne Express"), Emery Worldwide Airlines, Continental Airlines, Northwest
Airlines, General Electric Capital Aviation Services and United Parcel Service.
The first three of these customers generated over 1,096,000 man-hours of TIMCO's
1,519,000 total man-hours in 1995. Loss of any of the above customers contracts,
or any future contracts with major customers, could have a material adverse
effect on TIMCO. As of December 31, 1995, TIMCO had approximately 1,082,000
man-hours worth of business contracted for 1996.
The industry in which TIMCO operates is highly competitive. Space
availability, price, quality, trained personnel, on-time delivery and
accountability are the key competitive factors in the heavy aircraft maintenance
industry. These factors, with respect to TIMCO's performance, will determine its
future success in the industry.
FINANCIAL SERVICES
Primark Storage Leasing Corporation ("PSLC") owns and leases eight
underground natural gas storage fields and related facilities located in
Michigan to ANR Pipeline Company. PSLC is also involved in the exploration and
development of mineral resources underneath the storage fields through various
farm out agreements with exploration companies.
Lease revenue accounted for 95%, 93% and 94% of PSLC's total revenues for
the years ended December 31, 1995, 1994, and 1993, respectively. PSLC's storage
fields and facilities are leased under non-cancelable agreements that expire in
2003, and provide for two renewal options of five years each, which could extend
the lease term to 2013. Lease payments are calculated on a net plant base that
was approximately $27.4 million at December 31, 1995. The depreciation of this
plant base results in a corresponding reduction in the lease payments.
28
<PAGE> 30
LEGAL PROCEEDINGS
Bradley v. Gelb et al. On June 24, 1994, a jury in a civil case in the
Massachusetts Superior Court (the "Court") returned an unfavorable verdict
against the two founders of TASC, and against TASC itself. The suit was brought
by a former employee regarding a TASC stock transaction which took place in
1976, prior to the Company's acquisition of TASC in 1991. On June 28, 1994, the
Court ordered that judgment be entered on the verdict requiring the two founders
(but not TASC itself) to disgorge $19,800,000. Such amount accrues post-judgment
interest at a statutory rate. As an alternative course of action, the plaintiff
may pursue the two founders and TASC, jointly and severally, for $48,600. Based
on the adjudication, the Company has denied requests of the two founders for
indemnification. Certain post-verdict motions (including a motion for judgment
notwithstanding the verdict, and in the alternative, a motion for a new trial)
are pending. While the outcome of these motions cannot be predicted with
certainty, the Company believes it will not be required to pay any portion of
this judgment.
The Company and its subsidiaries are involved in routine litigation and
administrative proceedings incident to the normal course of their business.
Management cannot predict the final disposition of such litigation and
proceedings but, in any event, the outcome of any such litigation or proceedings
would not have a material adverse effect on the financial condition or results
of operations of the Company.
29
<PAGE> 31
MANAGEMENT
<TABLE>
The following sets forth certain information regarding the directors and executive
officers of the Company, provided as of March 31, 1996.
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Joseph E. Kasputys....................... 59 Chairman of the Board of Directors,
President and Chief Executive Officer
John C. Holt............................. 55 Director, Executive Vice President of
the Company, President and Chief
Executive Officer of TASC
Stephen H. Curran........................ 48 Senior Vice President and Chief
Financial Officer
Michael R. Kargula....................... 48 Senior Vice President, General
Counsel and Secretary
Patrick G. Richmond...................... 45 Vice President of Corporate
Development
William J. Swift, III.................... 43 Vice President and Tax Counsel
Kevin J. Bradley......................... 67 Director
Steven Lazarus........................... 64 Director
Patricia G. McGinnis..................... 48 Director
Robert W. Stewart........................ 71 Director
Constance K. Weaver...................... 43 Director
</TABLE>
DIRECTORS
JOSEPH E. KASPUTYS has served as Chairman, President and Chief Executive
Officer of the Company since May 1988. From June 1987 until May 1988, he served
as President and Chief Operating Officer of the Company. Prior to joining the
Company in June 1987, he was Executive Vice President of McGraw-Hill, Inc., a
publishing and information services company. Prior to joining McGraw-Hill, Inc.
in 1985, he was President and Chief Executive Officer of Data Resources, Inc.,
an economic forecasting and consulting firm. Mr. Kasputys has been a director of
the Company since 1987. He is a member of the Finance and Nominating Committees
of the Board. Mr. Kasputys is also a director of Lifeline Systems, Inc.
JOHN C. HOLT is the President and Chief Executive Officer of TASC and
Executive Vice President of the Company. From 1982 until January 1994, Mr. Holt
held the position of Executive Vice President of The Dun & Bradstreet
Corporation ("D&B"), an information services company, and served as a director
of that company from 1985 until 1994. In addition, Mr. Holt is the former
Chairman, President and Chief Executive Officer of the A.C. Nielsen Company, a
marketing information company and an affiliate of D&B. Mr. Holt has been a
director of the Company since 1985. He is a member of the Nominating Committee
of the Board.
KEVIN J. BRADLEY is the Chairman of Corporate Investment Associates, Inc.,
an investment management firm specializing in non-conventional investments for
corporate investors. From November 1985 until October 31, 1990, he was a Limited
Partner of Weiss Asset Management Limited Partnership, an investment management
firm. From 1977 through November 1985 he served as Chairman and Chief Executive
Officer of the Travelers Investment Management Company, a subsidiary of The
Travelers Corporation (a financial services company). Mr. Bradley has been a
director of the Company since 1981. He is Chairman of the Compensation Committee
and a member of the Audit Committee of the Board.
STEVEN LAZARUS is Managing Director of the ARCH Venture Partners L.P., a
venture partnership investing in companies in the early stage of development,
and has held that position since July 1994. From 1986 to 1994, he was President
and Chief Executive Officer of Argonne National Laboratory/The University of
Chicago Development Corporation ("ARCH"), which transforms scientific
discoveries into viable high technology products and services. Prior to joining
ARCH in October 1986, he was a Group Vice President at Baxter Travenol
Laboratories, Inc., a manufacturer and distributor of hospital supplies and
related medical equipment. Mr. Lazarus has been a director of the Company since
1987. He is Chairman of the Nominating
30
<PAGE> 32
Committee and a member of the Compensation Committee and the Audit Committee of
the Board. Mr. Lazarus is also a director of Amgen Inc., and Illinois
Superconductor Corporation.
PATRICIA G. MCGINNIS is the President and Chief Executive Officer of the
Council for Excellence in Government, a national membership organization of
private sector leaders who have served as senior officials in government. From
1982 until May 1994, she was a principal at the public affairs consulting firm
of Winner/Wagner & Francis (formerly the FMR Group). Previously, she served in
various senior policy positions in the federal government including the Office
of the Vice President, the Department of Health and Human Services, the
Department of Commerce, the Office of Management and Budget and the Senate
Budget Committee. Ms. McGinnis was elected to the Board on May 22, 1995 and is a
member of the Compensation Committee of the Board.
ROBERT W. STEWART served as Chairman and Chief Executive Officer of the
Company from January 1982 until May 1988, and as President of the Company from
January 1982 until June 1987. Mr. Stewart has been a director of the Company
since 1981. He is Chairman of the Finance Committee and a member of the
Nominating Committee of the Board.
CONSTANCE K. WEAVER is Financial Vice President for Investor Relations of
AT&T. From May 1995 until June 1996, Ms. Weaver held the position of Senior
Director, Investor Relations of Microsoft Corporation. From June 1993 through
May 1995 she held the position of Vice President, Investor Relations of MCI
Communications Corporation, a telecommunications company. From June 1991 until
June 1993 and from January 1990 until May 1991, she held the position of
Director, Investor Relations and Director, Corporate Communications,
respectively, of that company. From 1988 until January 1990, she was the
Executive Director, Business Week Executive Programs and Services Department for
McGraw-Hill, Inc. Ms. Weaver was appointed to the Board on February 28, 1994.
She is Chairwoman of the Audit Committee and a member of the Finance Committee
of the Board.
EXECUTIVE OFFICERS
STEPHEN H. CURRAN has served as Senior Vice President and Chief Financial
Officer of the Company since May 1988.
MICHAEL R. KARGULA has served as Senior Vice President, General Counsel and
Secretary of the Company since May 1988.
PATRICK G. RICHMOND has served as Vice President of Corporate Development
of the Company since May 1989.
WILLIAM J. SWIFT, III has served as Vice President and Tax Counsel of the
Company since May 1988.
SELLING SHAREHOLDER
The Selling Shareholder may be deemed an affiliate of the Company. The
Selling Shareholder acquired 1,164,276 shares of the Common Stock of Primark on
May 2, 1996 when it converted all of the outstanding shares of Primark's Series
A Cumulative Convertible Preferred Stock. Pursuant to the terms of a
Registration Rights Agreement between the Company and the Selling Shareholder
dated as of August 8, 1991, the Company has agreed to provide the PSSOP
registration rights with respect to such shares. Mr. R. Evan Hineman, Executive
Vice President of TASC, Mr. Stephen L. Landry, Vice President of TASC, and Mr.
John W. Putney, Chief Financial Officer of TASC, are trustees of the PSSOP. Upon
completion of the Offering, the PSSOP will hold 250,000 shares of Primark Common
Stock.
31
<PAGE> 33
The following table sets forth information with respect to the beneficial
ownership of Common Stock by each of the Trustees as of April 30, 1996.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME OWNED*
- ---- ----------
<S> <C>
R. E. Hineman......................................................... 40,659
S. L. Landry.......................................................... 4,153
J. W. Putney.......................................................... 21,736
<FN>
- ---------------
* Includes 40,072, 4,153, and 21,150 shares of Primark Common Stock subject to
stock options exercisable within 60 days of April 30, 1996, held by Messrs.
Hineman, Landry and Putney, respectively.
</TABLE>
UNDERWRITING
PaineWebber Incorporated (the "Underwriter") has agreed, subject to the
terms and conditions set forth in the Underwriting Agreement by and among the
Company, the Selling Shareholder and PaineWebber Incorporated (the "Underwriting
Agreement"), to purchase from the Selling Shareholder, and the Selling
Shareholder has agreed to sell to the Underwriter, 914,276 shares of Common
Stock.
The Company and the Selling Shareholder have been advised by the
Underwriter that it proposes to offer the Common Stock to the public initially
at the public offering price set forth on the cover page of this Prospectus. The
public offering price and other selling terms may be changed by the Underwriter.
The Company has agreed to indemnify the Underwriter and any person who
controls the Underwriter against certain liabilities, including certain
liabilities 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 Shareholder by Michael R. Kargula, General Counsel of the Company. As of
May 20, 1996, Mr. Kargula beneficially owned 400,230 shares of Common Stock.
Certain legal matters relating to the Offering will be passed upon for the
Underwriter by McDermott, Will & Emery, Chicago, Illinois.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1995 and 1994 and for each of the three years in the period ended December 31,
1995 incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
The combined financial statements of Disclosure and its affiliated
companies as of December 31, 1994, 1993, 1992 and 1991 and for each of the four
years in the period ended December 31, 1994 incorporated in this Prospectus by
reference from the Company's Current Report on Form 8-K dated July 3, 1995 as
amended by Amendment No. 1 on Form 8-K/A dated September 11, 1995, Amendment No.
2 on Form 8-K/A dated October 26, 1995 and Amendment No. 3 on Form 8-K/A dated
November 28, 1995 have been audited by Leslie Sufrin and Company, P.C.,
independent auditors, as stated in their reports which are incorporated herein
by reference, and have been so incorporated in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
32
<PAGE> 34
(This Page Intentionally Left Blank)
<PAGE> 35
(This Page Intentionally Left Blank)
<PAGE> 36
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 OTHER THAN THE REGISTERED 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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................... 2
Incorporation of Certain Documents
by Reference............................. 2
Prospectus Summary......................... 3
Risk Factors............................... 8
Use of Proceeds............................ 9
Price Range of Common Stock................ 9
Dividend Policy............................ 9
Capitalization............................. 10
Selected Consolidated Historical and Pro
Forma Financial and Operating Data....... 11
Unaudited Pro Forma Consolidated
Financial Information.................... 13
Business................................... 17
Legal Proceedings.......................... 29
Management................................. 30
Selling Shareholder........................ 31
Underwriting............................... 32
Legal Matters.............................. 32
Experts.................................... 32
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
914,276 SHARES
[LOGO]
COMMON STOCK
----------------------
PROSPECTUS
----------------------
PAINEWEBBER INCORPORATED
------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 37
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION*
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee....................... $ 11,822
Printing Expenses......................................................... 40,000
Accounting Fees........................................................... 25,000
National Association of Securities Dealers fees........................... 17,500
Blue Sky Qualifications and Expenses (including counsel fees)............. 15,000
New York Stock Exchange fees.............................................. 3,200
Pacific Stock Exchange fees............................................... 2,286
Transfer Agent and Registrar fees......................................... 4,000
Miscellaneous............................................................. 81,192
--------
Total........................................................... $200,000
========
</TABLE>
- ---------------
* All amounts except registration fee are estimates.
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.
Sections 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 attorneys'
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
<PAGE> 38
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- ------------------------------------------------------------------------------
<C> <S>
1.1 -- Form of Underwriting Agreement.
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, SEC File No. 00108260); 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, SEC File
No. 00108260).
4.2 -- By-laws of the Registrant, as amended (incorporated by reference to the
Registrant's September 30, 1990 Form 10-Q, SEC File No. 00108260).
4.3 -- Rights Agreement, dated January 12, 1988, between the Registrant and Bankers
Trust Company, which includes, as Exhibit A thereto, the Rights Certificate
and, as Exhibit B thereto, the Summary of Rights to Purchase Common Stock
(incorporated by reference to Exhibit 28.1 to the Registrant's Form 8-K dated
January 14, 1988, SEC File No. 00108260); Certified copy of resolution
amending the Registrant's Rights Agreement (incorporated by reference to
Exhibit 28.4 to the Registrant's Form 8-K dated July 13, 1988, SEC File No.
00108260); Amendment to Rights Agreement, dated April 9, 1990 (incorporated by
reference to Exhibit 28.1 to the Registrant's Form 8-K dated April 12, 1990,
SEC File No. 00108260); Letter, dated May 10, 1990, regarding appointment of
Bank of America as new Rights Agent under the Rights Agreement, as amended
(incorporated by reference to Exhibit 28.1 to the Registrant's 1990 Form 10-K,
SEC File No. 00108260); Amendment to Rights Agreement, dated May 31, 1992,
between the Registrant and Bank of America National Trust and Savings
Association, as Rights Agent (incorporated by reference to Exhibit 28.1 to the
Registrant's June 30, 1992 Form 10-Q, SEC File No. 00108260); Letter dated
July 31, 1992 regarding appointment of The First National Bank of Boston as
new Rights Agent (incorporated by reference to Exhibit 28.2 to the
Registrant's June 30, 1992 Form 10-Q, SEC File No. 00108260).
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 Leslie Sufrin & Company, P.C.
23.3 -- Consent of Michael R. Kargula, General Counsel of the Company (included in
Exhibit 5.1).
24.1 -- Powers of Attorney.*
99.1 -- Sections 561 through 571 of the Michigan Business Corporation Act.*
<FN>
- ---------------
* Previously filed.
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
II-2
<PAGE> 39
(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.
(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 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.
(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-3
<PAGE> 40
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 June 6,
1996.
PRIMARK CORPORATION
By: /S/ STEPHEN H. CURRAN
---------------------------------
STEPHEN H. CURRAN
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
<TABLE>
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.
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ----------------------------------- -------------
<S> <C> <C>
* Chairman, President and Chief May 20, 1996
- ---------------------------------------- Executive Officer
Joseph E. Kasputys (Principal Executive Officer)
/S/ STEPHEN H. CURRAN Senior Vice President and Chief May 20, 1996
- ---------------------------------------- Financial Officer
Stephen H. Curran (Principal Accounting and Financial
Officer)
* Director May 21, 1996
- ----------------------------------------
Robert W. Stewart
* Director May 20, 1996
- ----------------------------------------
Kevin J. Bradley
* Executive Vice President and May 20, 1996
- ---------------------------------------- Director
John C. Holt
* Director May 22, 1996
- ----------------------------------------
Steven Lazarus
* Director May 22, 1996
- ----------------------------------------
Patricia G. McGinnis
* Director May 21, 1996
- ----------------------------------------
Constance K. Weaver
*By:/S/ STEPHEN H. CURRAN
- ----------------------------------------
Stephen H. Curran
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 41
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------------ ------------
<C> <S>
1.1 -- Form of U.S. Underwriting Agreement.
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, SEC File No. 00108260); Amendment dated August 8, 1991
(incorporated by reference to Exhibit 3(a) to the Registrant's
Form 8-K dated August 9, 1991, SEC File No. 00108260); Amendment
dated May 27, 1992 (incorporated by reference to Exhibit 3.1 to
the Registrant's June 30, 1992 Form 10-Q, SEC File No. 00108260).
4.2 -- By-laws of the Registrant, as amended (incorporated by reference
to the Registrant's September 30, 1990 Form 10-Q, SEC File No.
00108260).
4.3 -- Rights Agreement, dated January 12, 1988, between the Registrant
and Bankers Trust Company, which includes, as Exhibit A thereto,
the Rights Certificate and, as Exhibit B thereto, the Summary of
Rights to Purchase Common Stock (incorporated by reference to
Exhibit 28.1 to the Registrant's Form 8-K dated January 14, 1988,
SEC File No. 00108260); Certified copy of resolution amending the
Registrant's Rights Agreement (incorporated by reference to
Exhibit 28.4 to the Registrant's Form 8-K dated July 13, 1988, SEC
File No. 00108260); Amendment to Rights Agreement, dated April 9,
1990 (incorporated by reference to Exhibit 28.1 to the
Registrant's Form 8-K dated April 12, 1990, SEC File No.
00108260); Letter, dated May 10, 1990, regarding appointment of
Bank of America as new Rights Agent under the Rights Agreement, as
amended (incorporated by reference to Exhibit 28.1 to the
Registrant's 1990 Form 10-K, SEC File No. 00108260); Amendment to
Rights Agreement, dated May 31, 1992, between the Registrant and
Bank of America National Trust and Savings Association, as Rights
Agent (incorporated by reference to Exhibit 28.1 to the
Registrant's June 30, 1992 Form 10-Q, SEC File No. 00108260);
Letter dated July 31, 1992 regarding appointment of The First
National Bank of Boston as new Rights Agent (incorporated by
reference to Exhibit 28.2 to the Registrant's June 30, 1992 Form
10-Q, SEC File No. 00108260).
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 Leslie Sufrin & Company, P.C.
23.3 -- Consent of Michael R. Kargula, General Counsel of the Company
(included in Exhibit 5.1).
24.1 -- Powers of Attorney.*
99.1 -- Sections 561 through 571 of the Michigan Business Corporation
Act.*
<FN>
- ---------------
* Previously filed.
</TABLE>
<PAGE> 1
914,276 Shares
PRIMARK CORPORATION
Common Stock
UNDERWRITING AGREEMENT
----------------------
June _____, 1996
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
The shareholder named in Schedule I (the "Selling
Shareholder"), an affiliate of TASC, Inc., a wholly owned subsidiary of Primark
Corporation, a Michigan corporation (the "Company") proposes to sell an
aggregate of 914,276 shares (the "Shares") of the Company's Common Stock,
$0.02 stated value (the "Common Stock"), to PaineWebber Incorporated (the
"Underwriter") in connection with the offering and sale of such shares of Common
Stock.
The initial public offering price per share for the Shares and
the purchase price per share for the Shares to be paid by the Underwriter shall
be agreed upon by the Company, the Selling Shareholder and the Underwriter, and
such agreement shall be set forth in a separate written instrument substantially
in the form of Exhibit A hereto (the "Price Determination Agreement"). The Price
Determination Agreement may take the form of an exchange of any standard form of
written telecommunication among the Company, the Selling Shareholder and the
Underwriter and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by this Agreement,
as supplemented by the Price Determination Agreement. From and after the date of
execution and delivery of the Price Determination Agreement, this Agreement
shall be deemed to incorporate, and, unless the context otherwise indicates, all
references contained herein to "this Agreement" and to the phrase "herein" shall
be deemed to include the Price Determination Agreement.
The Selling Shareholder has executed and delivered a Custody
Agreement and a Power of Attorney in the form attached hereto as Exhibit B
(collectively, the "Agreement and Power of Attorney") pursuant to which the
Selling Shareholder has placed its
<PAGE> 2
Shares in custody and appointed the persons designated therein as a committee
(the "Committee") with authority to execute and deliver this Agreement on behalf
of the Selling Shareholder and to take certain other actions with respect
thereto and hereto.
The Company and the Selling Shareholder, severally and not
jointly, confirm as follows their respective agreements with the Underwriter.
1. Agreement to Sell and Purchase.
(a) On the basis of the respective representations, warranties
and agreements of the Company and the Selling Shareholder herein
contained and subject to all the terms and conditions of this
Agreement, (i) the Selling Shareholder agrees to sell to the
Underwriter and (ii) the Underwriter agree to purchase from the Selling
Shareholder at the purchase price per share for the Shares to be agreed
upon by the Underwriter and the Selling Shareholder in accordance with
Section 2 of the Price Determination Agreement.
(b) If the Company has elected not to rely on Rule 430A, the
initial public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by the Underwriter shall be
agreed upon and set forth in the Price Determination Agreement, which
shall be dated the date hereof, and an amendment to the Registration
Statement (as hereinafter defined) containing such per share price
information shall be filed before the Registration Statement becomes
effective.
(c) If the Company has elected to rely on Rule 430A, the
initial public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by the Underwriter shall be
agreed upon and set forth in the Price Determination Agreement. In the
event that the Price Determination Agreement has not been executed by
the close of business on the fourteenth business day following the date
on which the initial registration statement (as defined below) becomes
effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Section 7 shall remain in
effect.
2. Delivery and Payment. Delivery of the Shares shall be made
to the Underwriter against payment of the purchase price by certified or
official bank check payable in New York Clearing House (next-day) funds or, in
the sole discretion of the Underwriter, by wire transfer to an account
designated by the Selling Shareholder, in the case of a check, at the office of
PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New York 10019.
Any purchase price paid by way of wire transfer shall be reduced by an
- 2 -
<PAGE> 3
amount equal to interest on such purchase price, from the Closing Date to the
next Business Day, computed at PaineWebber Incorporated's cost of funds. Such
payment shall be made at 10:00 a.m., New York City time, on the fourth business
day following the date of this Agreement or, if the Company has elected to rely
on Rule 430A, the fourth business day after the date on which the first bona
fide offering of the Shares to the public is made by the Underwriter or at
such time on such other date as may be agreed upon by the Selling Shareholder
and the Underwriter (such date is hereinafter referred to as the "Closing
Date").
The cost of tax stamps, if any, in connection with the sale of
the Shares by the Selling Shareholder shall be borne by the Selling Shareholder.
The Selling Shareholder will pay and save the Underwriter and any subsequent
holder of the Shares harmless from any and all liabilities with respect to or
resulting from any failure or delay in paying Federal and state stamp and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the sale to the Underwriter of the Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to the Underwriter that:
(a) The Company meets the requirements for use of Form S-3. A
registration statement (Registration No. 333-04727) on Form S-3
relating to the Shares (the "initial registration statement"),
including a preliminary prospectus and such amendments to such
registration statement, as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (collectively referred to as the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The term
"preliminary prospectus" as used herein means a preliminary prospectus
as contemplated by Rule 430 or Rule 430A ("Rule 430A") of the Rules and
Regulations included at any time as part of the initial registration
statement. Copies of the initial registration statement and amendments
thereto have been delivered to the Underwriter, and copies of each
related preliminary prospectus have been delivered to the Underwriter.
If the initial registration statement has not become effective, a
further amendment to the initial registration statement, including a
form of final prospectus, necessary to permit the initial registration
statement to become effective will be filed promptly by the Company
with the Commission. If the initial registration statement has become
effective, a final
- 3 -
<PAGE> 4
prospectus containing information permitted to be omitted at the time
of effectiveness of the initial registration statement by Rule 430A
will be filed by the Company with the Commission in accordance with
Rule 424(b) of the Rules and Regulations ("Rule 424(b)") promptly after
execution and delivery of the Price Determination Agreement. The term
"Registration Statement" means, collectively, the initial registration
statement as amended at the time it becomes or became effective (the
"Effective Date"), including financial statements and all exhibits and
any information deemed to be included by Rule 430A. The term
"Prospectus" means, collectively, (i) a prospectus relating to the
Shares in the form it is first filed with the Commission pursuant to
Rule 424(b), or if the Company elects to rely on Rule 434(c) of the
Rules and Regulations ("Rule 434(c)"), the preliminary prospectus and
abbreviated term sheet in the form such term sheet is first filed with
the Commission pursuant to Rule 424(b) (the "Prospectus") or, if such
filings under Rule 424(b) are not required, the forms of final
prospectuses included in the Registration Statement at the Effective
Date. Any reference herein to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on or before the Effective
Date, or the date of such preliminary prospectus or the Prospectus, as
the case may be. Any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
Effective Date, or the date of any preliminary prospectus or the
Prospectus, as the case may be, and deemed to be incorporated therein
by reference.
(b) On the Effective Date, the date the Prospectus is first
filed with the Commission pursuant to Rule 424(b) (if required), at all
times subsequent to and including the Closing Date and when any
post-effective amendment to the Registration Statement becomes
effective or any amendment or supplement to the Prospectus is filed
with the Commission, the Registration Statement and the Prospectus (as
amended or as supplemented if the Company shall have filed with the
Commission any amendment or supplement thereto), including the
financial statements included or incorporated by reference in the
Prospectus, did or will comply with all applicable provisions of the
- 4 -
<PAGE> 5
Act, the Exchange Act, the rules and regulations thereunder (the
"Exchange Act Rules and Regulations",) and the Rules and Regulations
and will contain all statements required to be stated therein in
accordance with the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations. On the Effective Date, and
when any post-effective amendment to the Registration Statement becomes
effective, no part of the Registration Statement or any such amendment
did or will contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading. At the Effective
Date, the date the Prospectus or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date, the
Prospectus did not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing representations and warranties
in this Section 3(b) do not apply to any statements or omissions made
in reliance on and in conformity with information relating to the
Underwriter furnished in writing to the Company by the Underwriter
specifically for inclusion in the Registration Statement or Prospectus
or any amendment or supplement thereto. For all purposes of this
Agreement, the statements set forth under the heading "Underwriting" in
the Prospectus constitute the only information relating to the
Underwriter furnished in writing to the Company by the Underwriter for
inclusion in the preliminary prospectus, the Registration Statement or
the Prospectus. The Company has not distributed any offering material
in connection with the offering or sale of the Shares other than the
Registration Statement, the preliminary prospectus, and the Prospectus.
(c) The documents which are incorporated by reference in the
preliminary prospectus and the Prospectus or from which information is
so incorporated by reference, when they become effective or were filed
with the Commission, as the case may be, complied in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations; and any documents so filed and incorporated by reference
subsequent to the Effective Date shall, when they are filed with the
Commission, conform in all material respects with the requirements of
the Act and the Exchange Act, as applicable, the Exchange Act Rules and
Regulations and the Rules and Regulations.
- 5 -
<PAGE> 6
(d) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on Exhibit C
attached hereto (the "subsidiaries"). The Company and each of its
subsidiaries listed on Exhibit D attached hereto (the "Material
Subsidiaries") is, and at the Closing Date will be, a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Company and each of its Material
Subsidiaries has, and at the Closing Date will have, full power and
authority to conduct all the activities conducted by it, to own or
lease all the assets owned or leased by it and to conduct its business
as described in the Registration Statement and the Prospectus. The
Company and each of its subsidiaries is, and at the Closing Date will
be, duly licensed or qualified to do business and in good standing as a
foreign corporation in all jurisdictions in which the nature of the
activities conducted by it or the character of the assets owned or
leased by it makes such licensing or qualification necessary except
where the failure to be so qualified, considering all such cases in the
aggregate, does not involve a material risk to the business,
properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its subsidiaries, taken as a
whole. Except for (i) the stock of its subsidiaries, (ii) as disclosed
in the Registration Statement, (iii) partnerships and joint ventures of
which all partners, participants and other persons having ownership
interests therein are wholly owned subsidiaries of the Company, (iv)
ownership of fewer than fifty shares of capital stock in any
publicly-traded corporation and other de minimis stockholdings, (v)
ownership of not more than 5% of the outstanding shares of capital
stock of Corporate Financials Online, Inc., (vi) ownership of capital
stock of Healthqual Systems Corporation, (vii) ownership of partnership
interests in Worldscope/Disclosure Partnership and affiliated entities,
(viii) ownership of partnership interests in The Weather Network (U.K.)
Limited; and (ix) the pending acquisition of all of the issued and
outstanding shares of capital stock of Talisman, a French societe
anonyme, and the parent company of Groupe DAFSA and its affiliates,
the Company does not own, and at the Closing Date will not own,
directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other
entity. Complete and correct copies of the charter documents, by-laws,
and other governing instruments of the Company and each of its
subsidiaries and all amendments thereto have been delivered to the
Underwriter, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date.
- 6 -
<PAGE> 7
(e) The outstanding shares of Common Stock have been duly
authorized, validly issued, fully paid and nonassessable and are not
subject to any preemptive or similar right. The description of the
Common Stock contained or incorporated by reference in the Registration
Statement and the Prospectus is, and at the Closing Date will be,
complete and accurate in all material respects. Except as set forth in
the Prospectus, the Company does not have outstanding, and at the
Closing Date will not have outstanding, any options to purchase, or any
rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any
shares of Common Stock, any shares of capital stock of any subsidiary
or any such warrants, convertible securities or obligations. All of the
issued and outstanding shares of capital stock of, or other ownership
interests in, each Material Subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and nonassessable,
and, except as disclosed in the Prospectus as of the Closing Date, all
of the shares of capital stock of, or other ownership interests in,
each Material Subsidiary of the Company will be owned, directly or
through subsidiaries of the Company, by the Company free and clear of
any security interest, mortgage, pledge, claim, lien or encumbrance
other than as created by the Company's $75,000,000 Credit Agreement
dated June 29, 1995 (the "Credit Agreement"). No Material Subsidiary of
the Company is prohibited, directly or indirectly, from paying any
dividends to the Company or any other Material Subsidiary of the
Company, from making any other distribution on such Material
Subsidiary's capital stock, from repaying to the Company or any other
Material Subsidiary of the Company, any loans or advances to such
Material Subsidiary from the Company or from transferring any of such
Material Subsidiary's property or assets to the Company or any other
Material Subsidiary of the Company, except as described in or
contemplated by the Prospectus.
(f) Except for the financial statements and schedules of
Disclosure Incorporated and its affiliates ("Disclosure") reviewed by
Leslie Sufrin and Company, P.C., the financial statements and schedules
included or incorporated by reference in the Registration Statement or
the Prospectus present fairly the consolidated financial condition of
the Company as of the respective dates thereof and the consolidated
results of operations and cash flows of the Company for the respective
periods covered thereby, all in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
entire period involved, except as
- 7 -
<PAGE> 8
otherwise disclosed in the Prospectus. No other financial statements or
schedules of the Company are required by the Act, the Exchange Act, the
Rules and Regulations, or the Exchange Act Rules and Regulations to be
included in the Registration Statement or the Prospectus. Deloitte &
Touche LLP, who have reported on such financial statements and
schedules, are independent accountants with respect to the Company as
required by the Act and the Rules and Regulations. The financial
statements of Disclosure, Incorporated and its affiliated companies
("Disclosure") incorporated by reference in the Registration Statement
present fairly the combined financial condition of Disclosure as of the
respective dates thereof and the combined results of operations and
cash flows of Disclosure for the respective periods covered thereby,
all in conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire period involved, except as
otherwise disclosed in therein. No other financial statements or
schedules of any subsidiary are required by the Act, the Exchange Act,
the Rules and Regulations, or the Exchange Act Rules and Regulations to
be included in the Registration Statement or the Prospectus. Leslie
Sufrin and Company, P.C., who have reported on such financial
statements and schedules of Disclosure, are independent accountants
with respect to the Company and Disclosure as required by the Act and
the Rules and Regulations. Deloitte and Touche LLP is the independent
accountant with respect to the Company as required by the Act and the
Rules and Regulations. Deloitte and Touche LLP together with Leslie
Sufrin and Company, P.C. are referred to as the "Accountants." The
statements included in the Registration Statement with respect to each
of the Accountants pursuant to Rule 509 of Regulation S-K of the Rules
and Regulations are true and correct in all material respects.
(g) The pro forma financial statements and related notes
included or incorporated by reference in the Registration Statement or
the Prospectus have been prepared in accordance with the applicable
requirements of the Act and include all adjustments appropriate to give
effect to the transactions or circumstances referred to therein and to
present fairly the pro forma financial condition and results of
operations at the respective dates and for the respective periods
indicated and all assumptions used in preparing the pro forma financial
statements are reasonable.
- 8 -
<PAGE> 9
(h) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to
the Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been and
will not have been any change in the capitalization of the Company
(other than shares issued pursuant to exercise of currently outstanding
stock options), or any material adverse change in the business,
properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and its subsidiaries taken as a
whole, arising for any reason whatsoever, (ii) neither the Company nor
any of its subsidiaries has incurred nor will it incur any liabilities
or obligations, direct or contingent, that are material to the Company
and its subsidiaries taken as a whole nor has it entered into nor will
it enter into any transactions that are material to the Company and its
subsidiaries taken as a whole other than pursuant to this Agreement and
the transactions referred to herein and (iii) the Company has not and
will not have paid or declared any dividends or other distributions of
any kind on any class of its capital stock, other than dividends on the
Company's Series A Preferred Stock.
(j) Neither the Company nor any subsidiary is an "investment
company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
(k) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits, or proceedings (including
compliance audits and investigations) pending against or affecting the
Company
- 9 -
<PAGE> 10
or any of its subsidiaries or any of their respective directors or
officers in his capacity as such or, to the knowledge of the Company
and each of its Material Subsidiaries, threatened against or affecting
the Company or any of its Material Subsidiaries or any of their
respective directors or officers in his capacity as such, before or by
any Federal or state court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, which are
reasonably expected to materially and adversely affect the Company or
any of its subsidiaries or its business, properties, business
prospects, condition (financial or otherwise) or results of
operations taken as a whole.
(l) The Company and each of its Material Subsidiaries has, and
at the Closing Date will have, (i) all governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to carry
on its business as contemplated in the Prospectus, (ii) all security
clearances necessary to complete all current contracts or agreements
between the Company or any of its Material Subsidiaries, on the one
hand, and any Federal or state regulatory body, administrative agency
or other governmental body, domestic or foreign, on the other hand,
(iii) complied in all respects with all laws, regulations and orders
applicable to it or its business and (iv) performed all its obligations
required to be performed by it, and is not, and at the Closing Date
will not be, in default, under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note
agreement, lease, contract or other agreement or instrument
(collectively a "contract or other agreement") to which it is a party
or by which its property is bound or affected, which default could have
a material adverse effect on the business, properties, business
prospects, condition (financial or otherwise) or results of operations
of the Company and its subsidiaries taken as a whole. To the best
knowledge of the Company and each of its Material Subsidiaries, no
other party under any contract or other agreement to which it is a
party is in default in any respect thereunder, which default could have
a material adverse effect on the business, properties, business
prospects, condition (financial or otherwise) or results of operations
of the Company and its subsidiaries taken as a whole. Neither the
Company nor any of its Material Subsidiaries is, nor at the Closing
Date will any of them be, in violation of any provision of its charter
documents, by-laws, or other governing instruments.
- 10 -
<PAGE> 11
(m) Except for filing by the Company of the final prospectus
with the Commission in accordance with Rule 424(b), no consent,
approval, authorization or order of, or any filing or declaration with,
any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part
contemplated herein, except such as have been obtained under the Act or
the Rules and Regulations and such as may be required under state
securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. (the "NASD") in connection with
the purchase and distribution by the Underwriter of the Shares.
(n) The Company has full corporate power and authority to
enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company
in accordance with the terms hereof and thereof, except as such
enforceability may be limited by general principles of equity, whether
applied in a court of law or a court of equity, and by bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies
generally. The performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of
the Company or any of its subsidiaries pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or give any other
party a right to terminate any of its obligations under, or result in
the acceleration of any obligation under, the charter documents,
by-laws, or other governing instruments of the Company or any of its
subsidiaries, any contract or other agreement to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute,
rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company or any of its
subsidiaries which would have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(o) The Company and each of its subsidiaries has good and
marketable title to all properties and assets described in the
Prospectus as owned by them, free and clear of all liens, charges,
encumbrances or
- 11 -
<PAGE> 12
restrictions, except such as are described in the Prospectus or in the
financial statements included in the Prospectus or are not material to
the business of the Company or its subsidiaries. The Company and each
of its subsidiaries has valid and subsisting leases for the properties
described in the Prospectus as leased by it, with such exceptions as
are not material and do not materially interfere with the use made and
proposed to be made of such properties by the Company and such
subsidiaries.
(p) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which is not
described or filed as required, giving effect to Rule 171 of the Rules
and Regulations. All such contracts to which the Company or any of its
Material Subsidiaries is a party have been duly authorized, executed
and delivered by the Company or such subsidiary, constitute valid and
binding agreements of the Company or such subsidiary and are
enforceable against the Company or such subsidiary in accordance with
the terms thereof, except as such enforceability may be limited by
general principles of equity, whether applied in a court of law or a
court of equity, and by bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally. Neither the Company
nor any of its subsidiaries has been advised that any contract material
to the Company and its subsidiaries taken as a whole to which the
Company or any of its subsidiaries is a party that is terminable within
the next twelve months will not be renewed by the other party to such
contract in the ordinary course.
(q) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Underwriter was or
will be, when made, inaccurate, untrue or incorrect in any material
respect.
(r) Neither the Company nor, to the best of the Company's
knowledge, any of its directors, officers or controlling persons has
taken, directly or indirectly, any action intended, or which might
reasonably be expected, to cause or result, under the Act or otherwise,
in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Shares.
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<PAGE> 13
(s) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of
the Registration Statement.
(t) The Shares are listed on the New York and Pacific Stock
Exchanges.
(u) Neither the Company nor any of its Material Subsidiaries
is involved in any material labor dispute nor, to the knowledge of the
Company and each of its Material Subsidiaries, is any such dispute
threatened.
(v) The Company and its subsidiaries own, or are licensed or
otherwise have the full right to use, all material patents, trademarks,
trade names, and other items of intellectual property which are used in
or necessary for the conduct of their respective businesses as
described in the Prospectus. No claims have been asserted by any person
with respect to such patents, trademarks, trade names, or other items
of intellectual property or challenging or questioning the validity or
effectiveness of any such patents, trademarks, trade names, or other
items of intellectual property. The use, in connection with the
business and operations of the Company and its subsidiaries, of such
patents, trademarks, trade names, or other items of intellectual
property does not, to the Company's knowledge, infringe on the rights
of any person, except as listed on Exhibit E attached hereto.
(w) Neither the Company nor any of its subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any
subsidiary has made any payment of funds of the Company or any
subsidiary or received or retained any funds in violation of any law,
rule or regulation which payment, receipt or retention is of a
character required to be disclosed in the Prospectus.
(x) The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have
paid all taxes shown as due thereon except where extensions have been
obtained or a failure to file a return would not have a material
adverse effect on the condition (financial or otherwise) or the results
of operations of the Company and its subsidiaries, taken as a whole;
and the Company and each of its Material Subsidiaries has no knowledge
of any tax deficiency which has been or might be asserted or threatened
against the Company or any of its subsidiaries which would materially
and adversely affect the condition (financial or
- 13 -
<PAGE> 14
otherwise) or the results of operations of the Company and its
subsidiaries, taken as a whole.
(y) All material transactions between the Company and its
subsidiaries and the officers, directors and major stockholders of the
Company have been accurately disclosed in the Registration Statement
and the terms of each such transaction are fair to the Company and
comparable to the terms that could have been obtained from unrelated
parties.
(z) Neither the Company nor any of its subsidiaries has at any
time during the last five years made any payment to any government
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by laws
of the United States or any jurisdiction thereof.
(aa) All offers and sales by the Company of its securities,
including but not limited to their capital stock and options to
purchase their capital stock, prior to the date hereof were made in
compliance with the Act, the Rules and Regulations, and all other
federal, state, and foreign laws and regulations.
4. Representations and Warranties of the Selling Shareholder.
The Selling Shareholder represents, warrants and covenants to the Underwriter
that:
(a) The Selling Shareholder has full power and authority to
enter into this Agreement. All authorizations and consents necessary
for the execution and delivery by the Selling Shareholder of the
Agreement and Power of Attorney, and for the execution of this
Agreement on behalf of the Selling Shareholder, have been given. Each
of the Agreement and Power of Attorney and this Agreement has been duly
authorized, executed and delivered by or on behalf of the Selling
Shareholder and constitutes a valid and binding agreement of the
Selling Shareholder and is enforceable against the Selling Shareholder
in accordance with the terms thereof and hereof, except as such
enforceability may be limited by general principles of equity, whether
applied in a court of law or a court of equity, and by bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies
generally. The Trustees of the Selling Shareholder are R.E. Hineman,
S.L. Landry and J.W. Putney (collectively the "Trustees"). The Trustees
have been duly appointed under the TASC Profit Sharing and Stock
Ownership Plan (the "Plan and Trust"). The
- 14 -
<PAGE> 15
Trustees have taken all necessary action to enter into this Agreement
and the Agreement and Power of Attorney and have authority to take such
action under the Plan and Trust. The execution and delivery of said
documents and the sale of the Shares do not and will not contravene any
provisions of the Plan and Trust or any fiduciary or regulatory
requirement applicable to the Trustees.
(b) The Selling Shareholder has and at the time of delivery
thereof hereunder will have, (i) good and marketable title to the
Shares to be sold by the Selling Shareholder hereunder, free and clear
of all liens, encumbrances and claims whatsoever (other than pursuant
to the Agreement and Power of Attorney), and (ii) full legal right and
power, and all authorizations and approvals required by law, to sell,
transfer and deliver such Shares to the Underwriter and to make the
representations, warranties and agreements made by the Selling
Shareholder herein. Upon the delivery of and payment for such Shares
hereunder, such Selling Shareholder will deliver good and marketable
title thereto, free and clear of all liens, encumbrances and claims
whatsoever.
(c) On the Closing Date, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection
with the sale and transfer of the Shares to be sold by such Selling
Shareholder to the Underwriter hereunder will have been fully paid or
provided for by the Selling Shareholder and all laws imposing such
taxes will have been fully complied with.
(d) The performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of
the Selling Shareholder pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the acceleration of any
obligation under, any contract or other agreement to which the Selling
Shareholder is a party or by which the Selling Shareholder or any of
its property is bound or affected, or under any ruling, decree,
judgment, order, statute, rule or regulation of any court or other
governmental agency or body having jurisdiction over the Selling
Shareholder or the property of the Selling Shareholder.
(e) No consent, approval, authorization or order
of, or any filing or declaration with, any court or
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<PAGE> 16
governmental agency or body is required for the consummation by the
Selling Shareholder of the transactions on its part contemplated herein
and in the Agreement and Power of Attorney, except such as have been
obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and
rules of the NASD in connection with the purchase and distribution by
the Underwriter of the Shares to be sold by the Selling Shareholder.
(f) The Selling Shareholder has no knowledge of any material
fact or condition not set forth in the Registration Statement or the
Prospectus which has adversely affected, or may adversely affect, the
business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company taken as a whole,
and the sale of the Shares proposed to be sold by the Selling
Shareholder is not prompted by any such knowledge.
(g) With respect to all information pertaining to the Selling
Shareholder contained in the Registration Statement and the Prospectus
(as amended or supplemented, if the Company shall have filed with the
Commission any amendment or supplement thereto), the Registration
Statement and Prospectus complied and will comply with all applicable
provisions of the Act and the Rules and Regulations, contain and will
contain all statements required to be stated therein in accordance with
the Act and the Rules and Regulations, and does not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(h) To the best knowledge of the Selling Shareholder, the
representations and warranties of the Company contained in Section 3
are true and correct.
(i) Other than as permitted by the Act and the Rules and
Regulations, the Selling Shareholder has not distributed and will not
distribute any preliminary prospectus, the Prospectus or any other
offering material in connection with the offering and sale of the
Shares. The Selling Shareholder has not taken, directly or indirectly,
any action intended, or which might reasonably be expected, to cause or
result in, under the Act or otherwise, or which has constituted,
stabilization
- 16 -
<PAGE> 17
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(j) Certificates in negotiable form for the Shares to be sold
hereunder by the Selling Shareholder have been placed in custody, for
the purpose of making delivery of such Shares under this Agreement
previously made and under the Agreement and Power of Attorney which
appoints Michael R. Kargula as custodian (the "Custodian") for the
Selling Shareholder. The Selling Shareholder agrees that the Shares
represented by the certificates held in custody for it under the
Agreement and Power of Attorney are for the benefit of and coupled with
and subject to the interest hereunder of the Custodian, the Committee,
the Underwriter and the Company, that the arrangements made by the
Selling Shareholder for such custody and the appointment of the
Custodian and the Committee by the Selling Shareholder are irrevocable,
and that the obligations of the Selling Shareholder hereunder shall not
be terminated by operation of law, whether by the death, disability, or
incapacity of the Selling Shareholder or the occurrence of any other
event. If the Selling Shareholder should die, become disabled or
incapacitated or if any other such event should occur before the
delivery of the Shares hereunder, certificates for the Shares shall be
delivered by the Custodian in accordance with the terms and conditions
of this Agreement and actions taken by the Committee and the Custodian
pursuant to the Agreement and Power of Attorney shall be as valid as if
such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian or the Committee, or either of them, shall
have received notice thereof.
5. Agreements of the Company and the Selling Shareholder. The
Company and the Selling Shareholder, respectively, agree, severally and not
jointly, with the Underwriter as follows:
(a) The Company will not, either prior to the Effective Date
or thereafter during such period as the Prospectus is required by law
to be delivered in connection with sales of the Shares by the
Underwriter or a dealer, file any amendment or supplement to the
Registration Statement or the Prospectus, unless a copy thereof shall
first have been submitted to the Underwriter within a reasonable period
of time prior to the filing thereof.
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<PAGE> 18
(b) The Company will use its best efforts to cause the
Registration Statement to become effective, and will notify the
Underwriter promptly, and will confirm such advice in writing (1) when
the Registration Statement has become effective and when any
post-effective amendment thereto becomes effective, (2) of any request
by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information, (3) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose or the threat thereof, (4) of the
happening of any event during the period mentioned in the second
sentence of Section 5(e) that in the judgment of the Company makes any
statement made in the Registration Statement or the Prospectus untrue
or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in
light of the circumstances in which they are made, not misleading and
(5) of receipt by the Company or any representative or attorney of the
Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order
suspending the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal of such
order at the earliest possible moment. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A, the
Company will use its best efforts to comply with the provisions of and
make all requisite filings with the Commission pursuant to said Rule
430A and to notify the Underwriter promptly of all such filings.
(c) The Company will furnish to the Underwriter, without
charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed under
the Exchange Act and deemed to be incorporated by reference into the
Prospectus).
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time to time,
the Company will deliver to the Underwriter, without charge, as many
copies of the Prospectus or any
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<PAGE> 19
amendment or supplement thereto as the Underwriter may reasonably
request. The Company consents to the use of the Prospectus or any
amendment or supplement thereto by the Underwriter and by all dealers
to whom the Shares may be sold, both in connection with the offering or
sale of the Shares and for any period of time thereafter during which
the Prospectus is required by law to be delivered in connection
therewith. If during such period of time any event shall occur which in
the judgment of the Company or counsel to the Underwriter should be set
forth in the Prospectus in order to make any statement therein, in the
light of the circumstances under which it was made, not misleading, or
if it is necessary to supplement or amend the Prospectus to comply with
law, the Company will forthwith prepare and duly file with the
Commission an appropriate supplement or amendment thereto, and will
deliver to the Underwriter, without charge, such number of copies of
such supplement or amendment to the Prospectus as the Underwriter may
reasonably request. The Company shall not file any document under the
Exchange Act before the termination of the offering of the Shares by
the Underwriter if such document would be deemed to be incorporated by
reference into the Prospectus which is not approved by the Underwriter
after reasonable notice thereof.
(f) Prior to any public offering of the Shares, the Company
will cooperate with the Underwriter and its counsel in connection with
the registration or qualification of the Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Underwriter may request; provided, that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so
subject.
(g) During the period of five years commencing on the
Effective Date, the Company will furnish to the Underwriter copies of
such financial statements and other periodic and special reports as the
Company may from time to time distribute generally to the holders of
any class of its capital stock, and will furnish to the Underwriter a
copy of each annual or other report it shall be required to file with
the Commission.
(h) The Company will make generally available to holders of
its securities as soon as may be practicable but in no event later than
the last day of the fifteenth
:
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<PAGE> 20
full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement (which need not be audited
but shall be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the Underwriter, all costs and
expenses incident to the performance of the obligations of the Company
and the Selling Shareholder under this Agreement, including but not
limited to costs and expenses of or relating to (1) the preparation,
printing and filing of the Registration Statement and exhibits to it,
each preliminary prospectus, Prospectus and any amendment or supplement
to the Registration Statement or Prospectus, (2) the preparation and
delivery of certificates representing the Shares, (3) the printing of
this Agreement, any Dealer Agreements, any Underwriters' Questionnaire
and the Agreement and Power of Attorney, (4) furnishing (including
costs of shipping and mailing) such copies of the Registration
Statement, the Prospectus and any preliminary prospectus, and all
amendments and supplements thereto, as may be requested for use in
connection with the offering and sale of the Shares by the Underwriter
or by dealers to whom Shares may be sold, (5) any filing fees required
to be made by the Underwriter with the NASD, and the fees,
disbursements and other charges of counsel for the Underwriter in
connection therewith, (6) the registration or qualification of the
Shares for the offer and sale under the securities or Blue Sky laws of
such jurisdictions designated pursuant to Section 5(f), including the
fees, disbursements and other charges of counsel for the Underwriter in
connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (7) counsel to the Company
and the Selling Shareholder and (8) the transfer agent and registrar
for the Shares.
(j) If this Agreement shall be terminated by the Company or
the Selling Shareholder pursuant to any of the provisions hereof or
thereof (otherwise than pursuant to Section 9 hereof and Section 9
thereof) or if for any reason the Company or the Selling Shareholder
shall be unable to perform its obligations hereunder or thereunder, in
the absence of a breach of this Agreement
- 20 -
<PAGE> 21
by the Underwriter, the Company will reimburse the Underwriter for all
out-of-pocket expenses (including the fees, disbursements and other
charges of its counsel) reasonably incurred by the Underwriter in
connection herewith.
(k) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the
price of the shares of Common Stock to facilitate the sale or resale of
any of the Shares.
(1) As soon as the Selling Shareholder is advised thereof, the
Selling Shareholder will advise the Underwriter and confirm such advice
in writing, (1) of receipt by the Selling Shareholder, or by any
representative of the Selling Shareholder, of any communication from
the Commission relating to the Registration Statement, the Prospectus
or any preliminary prospectus, or any notice or order of the Commission
relating to the Company in connection with the transactions
contemplated by this Agreement and (2) of the happening of any event
during the period from and after the Effective Date that in the
judgment of the Selling Shareholder makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the
making of any changes in the Registration Statement or the Prospectus
in order to make the statements therein, in light of the circumstances
in which they were made, not misleading.
(m) The Selling Shareholder will deliver to the Underwriter
prior to or on the Closing Date a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu
thereof).
6. Conditions of the Obligations of the Underwriter. In
addition to the execution and delivery of the Price Determination Agreement, the
obligations of the Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Underwriter not later than 5:00
p.m., New York City time, on the date of this Agreement or at such
later date and time as shall be consented to in writing by the
Underwriter and all filings required by Rule 424 of the Rules and
Regulations and Rule 430A shall have been made.
- 21 -
<PAGE> 22
(b) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall be pending or threatened by the Commission, (ii) no
order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or
Blue Sky laws of any jurisdiction shall be in effect and no proceeding
for such purpose shall be pending before or threatened or contemplated
by the Commission or the authorities of any such jurisdiction, (iii)
any request for additional information on the part of the staff of the
Commission or any such authorities shall have been compiled with to the
satisfaction of the staff of the Commission or such authorities and
(iv) the Underwriter shall have received certificates, dated the
Closing Date and signed by the Chief Executive Officer or the Chairman
of the Board of Directors of the Company and the Chief Financial
Officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of
clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall
not have been a material adverse change in the general affairs,
business, business prospects, properties, management, condition
(financial or otherwise) or results of operations of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and
the Prospectus and (ii) neither the Company nor any of its subsidiaries
shall have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree,
which is not set forth in the Registration Statement and the
Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the
sale and delivery of the Shares by the Underwriter.
(d) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall
have been no litigation or other proceeding (including any
investigation) instituted against or with respect to the Company or any
of its subsidiaries or any of their respective officers or
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<PAGE> 23
directors in their capacities as such, before or by any Federal, state
or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding (including any
disqualification under any current or future contract) would materially
and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the
Company and its subsidiaries taken as a whole.
(e) Each of the representations and warranties of the Company
and the Selling Shareholder contained herein shall be true and correct
in all material respects at the Closing Date as if made at the Closing
Date, and all covenants and agreements contained herein to be performed
on the part of the Company and the Selling Shareholder and all
conditions contained herein to be fulfilled or complied with by the
Company and the Selling Shareholder at or prior to the Closing Date
shall have been duly performed, fulfilled or complied with.
(f) The Underwriter shall have received an opinion,
each dated the Closing Date and satisfactory in form and substance to
counsel to the Underwriter from Michael R. Kargula, counsel to the
Company and the Selling Shareholder, to the effect set forth in
Exhibit F.
(g) The Underwriter shall have received an opinion, dated the
Closing Date, from McDermott, Will & Emery, counsel to the Underwriter,
with respect to the Registration Statement, the Prospectus and this
Agreement, which opinion shall be satisfactory in all respects to the
Underwriter.
(h) Concurrently with the execution and delivery of this
Agreement, or, if the Company elects to rely on Rule 430A, on the date
of the Prospectus, each of the Accountants shall have furnished to the
Underwriter a letter, dated the date of its delivery, addressed to the
Underwriter and in form and substance satisfactory to the Underwriter,
confirming that they are independent accountants with respect to the
Company and Disclosure as required by the Act and the Rules and
Regulations and with respect to certain financial and other statistical
and numerical information contained in the Registration Statement or
incorporated by reference therein. At the Closing Date each of the
Accountants shall have furnished to the Underwriter another letter,
dated the date of its delivery, which shall confirm, on the basis of a
review
- 23 -
<PAGE> 24
in accordance with the procedures set forth in the letter referred to
in the prior sentence, that nothing has come to each of their
attention during the period from the date of the letter referred to in
the prior sentence to a date (specified in the subsequent letter) not
more than five days prior to the Closing Date, which would require any
change in the letter referred to in the prior sentence dated the date
hereof if it were required to be dated and delivered at the Closing
Date.
(i) Concurrently with the execution and delivery of this
Agreement, or, if the Company elects to rely on Rule 430A, on the date
of the Prospectus, and at the Closing Date, there shall be furnished to
the Underwriter an accurate certificate, dated the date of its
delivery, signed by each of the Chief Executive Officer and the Chief
Financial Officer of the Company, in form and substance satisfactory to
the Underwriter, to the effect that:
(i) Each signer of such certificate has carefully examined
the Registration Statement and the Prospectus (including any
documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus) and (A) as of
the date of such certificate, such documents are true and
correct in all material respects and do not omit to state a
material fact required to be stated therein or necessary in
order to make the statements therein not untrue or misleading
and (B) in the case of the certificate delivered at the
Closing Date, since the Effective Date no event has occurred
as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein not
untrue or misleading in any material respect and there has
been no document required to be filed under the Exchange Act
and the Exchange Act Rules and Regulations that upon such
filing would be deemed to be incorporated by reference into
the Prospectus that has not been so filed.
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally
made, and are, at the time such certificate is dated, true and
correct in all material respects.
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<PAGE> 25
(iii) Each of the covenants required to be performed by
the Company herein on or prior to the date of such certificate
has been duly, timely and fully performed and each condition
herein required to be satisfied or fulfilled on or prior to
the date of such certificate has been duly, timely and fully
satisfied or fulfilled.
(j) Concurrently with the execution and delivery of this
Agreement and at the Closing Date, there shall have been furnished to
the Underwriter an accurate certificate, dated the date of its
delivery, signed by the Committee on behalf of the Selling Shareholder,
in form and substance satisfactory to the Underwriter, to the effect
that the representations and warranties of the Selling Shareholder
contained herein are true and correct in all material respects on and
as of the date of such certificate as if made on and as of the date of
such certificate, and each of the covenants and conditions required
herein to be performed or complied with by the Selling Shareholder on
or prior to the date of such certificate has been duly, timely and
fully performed or complied with.
(k) On or prior to the Closing Date, the Underwriter shall
have received the executed agreements referred to in Section 5(n).
(1) The Shares shall be qualified for sale in such
jurisdictions as the Underwriter may reasonably request, and each such
qualification shall be in effect and not subject to any stop order or
other proceeding on the Closing Date.
(m) The Shares shall be listed on the New York and Pacific
Stock Exchanges.
(n) The Company and the Selling Shareholder shall have
furnished to the Underwriter such certificates, in addition to those
specifically mentioned herein, as the Underwriter may have reasonably
requested as to the accuracy and completeness at the Closing Date of
any statement in the Registration Statement or the Prospectus or any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, as to the accuracy at the Closing Date
of the representations and warranties of the Company and the Selling
Shareholder herein, as to the performance by the Company and the
Selling Shareholder of their respective
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<PAGE> 26
obligations hereunder, or as to the fulfillment of the conditions
concurrent and precedent to your obligations hereunder.
7. Indemnification.
----------------
(a) The Company will indemnify and hold harmless the
Underwriter, its directors, officers, employees and agents and each
person, if any, who controls the Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, liabilities, expenses and damages
(including any and all investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted),
to which they, or any of them, may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement
or alleged untrue statement of a material fact contained in any
preliminary prospectus, the Registration Statement, or the Prospectus
or any amendment or supplement to the Registration Statement or the
Prospectus, or in any documents filed under the Exchange Act and deemed
to be incorporated by reference into the Prospectus, or the omission or
alleged omission to state in such document a material fact required to
be stated in it or necessary to make the statements in it not
misleading, provided that the Company will not be liable to the extent
that such loss, claim, liability, expense or damage arises from the
sale of the Shares in the public offering to any person by the
Underwriter and is based on an untrue statement or omission or alleged
untrue statement or omission made in reliance on and in conformity with
information relating to the Underwriter furnished in writing to the
Company by the Underwriter expressly for inclusion in the Registration
Statement, the Preliminary Prospectus or the Prospectus, provided,
however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of the
Underwriter from whom the person asserting any such losses, claims,
liabilities, expenses or damages purchased Shares, or any person
controlling the Underwriter, if a copy of the Prospectus (as then
amended or supplemented) was not sent or given by or on behalf of the
Underwriter to such person, at or prior to the written confirmation of
the sale of such Shares to such person, and if the Prospectus (as so
amended or supplemented) would have cured the default giving rise to
such loss, claim, liability, expense or damage.
<PAGE> 27
(b) The Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act,
each director of the Company and each officer of the Company who signs
the Registration Statement to the same extent as the foregoing
indemnity from the Company to the Underwriter, but only insofar as
losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information
relating to the Underwriter furnished in writing to the Company by the
Underwriter expressly for use in the Registration Statement, the
Preliminary Prospectus or the Prospectus. This indemnity will be in
addition to any liability that the Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section 7, notify each such indemnifying party of the commencement of
such action, enclosing a copy of all papers served, but the omission so
to notify such indemnifying party will not relieve it from any
liability that it may have to any indemnified party under the foregoing
provisions of this Section 7 unless, and only to the extent that, such
omission results in the forfeiture of substantive rights or defenses by
the indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the
- 27 -
<PAGE> 28
commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except
as provided below and except for the reasonable costs of investigation
subsequently incurred by the indemnified party in connection with the
defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of
such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there
may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists (based
on advice of counsel to the indemnified party) between the indemnified
party and the indemnifying party (in which case the indemnifying party
will not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in fact
employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying
party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm
admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they
are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 7 is applicable in accordance with
its terms but for any reason is held to be unavailable from the Company
or the Underwriter, the Company and the Underwriter will contribute to
the total losses, claims, liabilities, expenses and damages (including
- 28 -
<PAGE> 29
any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claims asserted, but after deducting any
contribution received by the Company from persons other than the
Underwriter, such as persons who control the Company within the meaning
of the Act, officers of the Company who signed the Registration
Statement and directors of the Company, who also may be liable for
contribution) to which the Company or the Selling Shareholder and the
Underwriter may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company and Selling
Shareholder on the one hand and the Underwriter on the other. The
relative benefits received by the Company and the Selling Shareholder,
on the one hand, and the Underwriter, on the other, shall be deemed to
be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Shareholder bear to the total underwriting discounts and commissions
received by the Underwriter, in each case as set forth in the table on
the cover page of the Prospectus. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law,
the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in
the foregoing sentence but also the relative fault of the Company and
the Selling Shareholder, on the one hand, and the Underwriter, on the
other, with respect to the statements or omissions which resulted in
such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling
Shareholder, or the Underwriter, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriter
agree that it would not be just and equitable if contributions pursuant
to this Section 7(d) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in
this Section 7(d) shall be deemed to include, for
- 29 -
<PAGE> 30
purposes of this Section 7(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
this Section 7(d), the Underwriter shall not be required to contribute
any amount in excess of the underwriting discounts received by it and
no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7(d), any person who
controls a party to this Agreement within the meaning of the Act will
have the same rights to contribution as that party, and each officer of
the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after
receipt of notice of commencement of any action against such party in
respect of which a claim for contribution may be made under this
Section 7(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not
relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 7(d). No
party will be liable for contribution with respect to any action or
claim settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained in
this Section 7 and the representations and warranties of the Company
and the Selling Shareholder contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
investigation made by or on behalf of the Underwriter, (ii) acceptance
of any of the Shares and payment therefor or (iii) any termination of
this Agreement.
8. Termination. The obligations of the Underwriter under this
Agreement may be terminated at any time on or prior to the Closing Date, by
notice to the Company and the Committee from the Underwriter, without liability
on the part of the Underwriter to the Company or the Selling Shareholder, if,
prior to delivery and payment for the Shares, in the sole judgment of the
Underwriter, (i) trading in any of the equity securities of the Company shall
have been suspended by the Commission, by the New
- 30 -
<PAGE> 31
York Stock Exchange or by the Pacific Stock Exchange, (ii) trading in securities
generally on the New York Stock Exchange shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by either Federal or New York State authorities, (iv) a moratorium in
foreign exchange trading by major international banks shall have been declared
or (v) any material adverse change in the financial or securities markets in the
United States or Europe or in political, financial or economic conditions in the
United States or Europe or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or other
calamity or crisis shall have occurred, the effect of any of which is such as to
make it, in the sole judgment of the Underwriter, impracticable or inadvisable
to market the Shares on the terms and in the manner contemplated by the
Prospectus.
9. Miscellaneous. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office of
the Company, 1000 Winter Street, Suite 4300N, Waltham, Massachusetts 02154,
Attention: Joseph E. Kasputys with a copy to Michael R. Kargula, Esq., (b) if to
the Selling Shareholder, at TASC, Inc., 55 Walkers Brook Drive, Reading,
Massachusetts 01867, Attention: J.W. Putney with a copy to Michael R. Kargula or
(c) if to the Underwriter, at the offices of PaineWebber Incorporated, 1285
Avenue of the Americas, New York, New York 10019, Attention: Corporate Finance
Department. Any such notice shall be effective only upon receipt. Any notice
under Section 8 may be made by telex or telephone, but if so made shall be
subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of
the Underwriter, the Company and the Selling Shareholder and of the controlling
persons, directors and officers referred to in Section 7, and their respective
successors and assigns, no other person shall acquire or have any right under or
by virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Shares from the
Underwriter.
- 31 -
<PAGE> 32
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Company, the Selling Shareholder and the Underwriter each
hereby irrevocably waive any right they may have to a trial by jury in respect
of any claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
* * *
- 32 -
<PAGE> 33
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Selling Shareholder and the Underwriter.
Very truly yours,
PRIMARK CORPORATION
BY:_____________________________
Title:
TASC PROFIT SHARING AND STOCK
OWNERSHIP PLAN
By: The Committee
By:_____________________________
J.W. Putney
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
By: PAINEWEBBER INCORPORATED
By:__________________________
Title:
- 33 -
<PAGE> 34
SCHEDULE I
SELLING SHAREHOLDER
<TABLE>
<CAPTION>
Name of Total
Selling Number of Shares
Shareholder to be Sold
----------- -----------------
<S> <C>
TASC Profit Sharing
and Stock Ownership Plan 914,276
</TABLE>
- 34 -
<PAGE> 35
EXHIBIT A
PRIMARK CORPORATION
---------------
PRICE DETERMINATION AGREEMENT
__________, 1996
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Reference is made to the Underwriting Agreement, dated
_____________, 1996 (the "Underwriting Agreement"), among Primark Corporation, a
Michigan corporation (the "Company"), the Selling Shareholder named in Schedule
I thereto or hereto (the "Selling Shareholder") and you. The Underwriting
Agreement provides for the purchase by you from the Selling Shareholder, subject
to the terms and conditions set forth therein, of an aggregate of 914,276 shares
(the "Shares") of the Company's Common Stock, $0.02 stated value. This Agreement
is the Price Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agree with you as follows:
1. The initial public offering price per share for the Shares
shall be $____________.
2. The purchase price per share for the Shares to be paid by
you shall be $__________ representing an amount equal to the initial public
offering price set forth above, less $1.00 per share.
The Company represents and warrants to you that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
The Selling Shareholder represents and warrants to you that
the representations and warranties of the Selling Shareholder
A-1
<PAGE> 36
set forth in Section 4 of the Underwriting Agreement are accurate as though
expressly made at and as of the date hereof.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of
the agreement among you, the Company and the Selling Shareholder, please sign
and return to the Company a counterpart hereof, whereupon this instrument along
with all counterparts and together with the Underwriting Agreement shall be a
binding agreement among you, the Company and the Selling Shareholder in
accordance with its terms and the terms of the Underwriting Agreement.
Very truly yours,
PRIMARK CORPORATION
By:_____________________________
Title:
TASC PROFIT SHARING AND STOCK
OWNERSHIP PLAN
By: The Committee
By:_____________________________
J.W. Putney
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
By: PAINEWEBBER INCORPORATED
By:___________________________
Title:
A-2
<PAGE> 37
EXHIBIT B
POWER OF ATTORNEY
PRIMARK CORPORATION
Common Stock
R.E. Hineman
S.L. Landry
J.W. Putney
55 Walkers Brook Drive
Reading, Massachusetts 01867
Dear Sirs:
The undersigned understands that Primark Corporation, a
Michigan corporation (the "Company"), intends to file a registration statement
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act") in connection with the proposed public offering and sale by the
undersigned (the "Selling Shareholder") of the Company's Common Stock, $0.02
stated value (the "Common Stock").
The Selling Shareholder desires to sell certain shares of
Common Stock and to include such shares among the shares covered by the
Registration Statement. The number of shares of Common Stock which the
undersigned desires to sell (the "Shares") are set forth beneath the signature
of the Selling Shareholder below.
Concurrently with the execution and delivery of this Power of
Attorney, the undersigned is delivering to you, certificates for the Shares,
which you are authorized to deposit with Michael R. Kargula, as custodian
(the "Custodian"), pursuant to a custody agreement in the form attached as
Attachment A hereto (the "Custody Agreement").
1. In connection with the foregoing, the Selling Shareholder
hereby makes, constitutes and appoints you collectively, and each of you,
individually (a "Member") and each of your respective substitutes under Section
3, the true and lawful attorneys-in-fact of the undersigned (the Members or any
of them or their respective substitutes, being herein referred to collectively
as the "Committee"), with full power and authority, in the name and on behalf of
the Selling Shareholder:
B-1
<PAGE> 38
(a) To enter into the Custody Agreement and deposit with the
Custodian pursuant thereto the certificates for the Shares delivered to
the Committee concurrently herewith;
(b) For the purpose of effecting the sale of the Shares, to
execute and deliver (i) an Underwriting Agreement (the "Underwriting
Agreement"), by and among the Company, the Selling Shareholder and
PaineWebber Incorporated (the "Underwriter"), and (ii) a Price
Determination Agreement (as defined in the Underwriting Agreement), by
and among the Company, the Selling Shareholder and the Underwriter;
(c) To endorse, transfer and deliver certificates for the
Shares to or on the order of the Underwriter, or to its nominee or
nominees, and to give such orders and instructions to the Custodian as
the Committee may in its sole discretion determine with respect to (i)
the transfer on the books of the Company of the Shares in order to
effect such sale (including the names in which new certificates for
such Shares are to be issued and the denominations thereof); (ii) the
delivery to or for the account of the Underwriter of the certificates
for the Shares against receipt by the Custodian of the full purchase
price to be paid therefor; (iii) the remittance to the Selling
Shareholder of the Selling Shareholder's share of the proceeds, after
payment of the expenses described in the Underwriting Agreement, from
any sale of Shares; and (iv) the return to the Selling Shareholder of
certificates representing the number of Shares (if any) deposited with
the Custodian but not sold by the Selling Shareholder under the
Registration Statement for any reason;
(d) To take for the Selling Shareholder all steps deemed
necessary or advisable by the Committee in connection with the
registration of the Shares under the Act, including without limitation
filing amendments to the Registration Statement, requesting
acceleration of effectiveness of the Registration Statement, informing
said Commission that the Selling Shareholder has no knowledge of any
material adverse information with regard to the current and prospective
operations of the Company which is not stated in the Registration
Statement, and such other steps as the Committee may in its absolute
discretion deem necessary or advisable;
(e) To make, acknowledge, verify and file on the behalf of the
Selling Shareholder applications, consents to service of process and
such other undertakings or
B-2
<PAGE> 39
reports as may be required by law with state commissioners or officers
administering state securities or Blue Sky laws and to take any other
action required to facilitate the qualification of the Shares under the
securities or Blue Sky laws of the jurisdictions in which the Shares
are to be offered;
(f) If necessary, to endorse (in blank or otherwise) on behalf
of the Selling Shareholder the certificate or certificates representing
the Shares, or a stock power or powers attached to such certificate or
certificates; and
(g) To make, execute, acknowledge and deliver all such other
contracts, orders, receipts, notices, requests, instructions,
certificates, letters and other writings and, in general, to do all
things and to take all action which the Committee in its sole
discretion may consider necessary or proper in connection with or to
carry out the aforesaid sale of Shares, as fully as could the Selling
Shareholder if personally present and acting.
2. This Power of Attorney and all authority conferred hereby
is granted and conferred subject to and in consideration of the interest of the
Company, the Underwriter, and for the purpose of completing the transactions
contemplated by this Power of Attorney, this Power of Attorney and all authority
conferred hereby shall be irrevocable and shall not be terminated by any act of
the Selling Shareholder or by operation of law, whether by the death,
disability, or incapacity of the Selling Shareholder or by the occurrence of any
other event or events, and if, after the execution hereof, the Selling
Shareholder shall die or become disabled or incapacitated, or if any other such
event or events shall occur before the completion of the transactions
contemplated by this Power of Attorney, the Committee shall nevertheless be
authorized and directed to complete all such transactions as if such death,
disability, incapacity, or other event or events had not occurred and regardless
of notice thereof.
3. Each Member shall have the full power to make and
substitute any person in the place and stead of such Member, and the Selling
Shareholder hereby ratifies and confirms all that each Member or substitute or
substitutes shall do by virtue of these presents. All actions hereunder may be
taken by any one Member or his substitute. In the event of the death, disability
or incapacity of any Member, the remaining Member or Members shall appoint a
substitute therefor.
4. The Selling Shareholder hereby represents, warrants and
covenants that:
B-3
<PAGE> 40
(a) All information furnished to the Company by or on behalf
of the Selling Shareholder for use in connection with the preparation
of the Registration Statement is and will be true and correct in all
material respects and does not and will not omit any material fact
necessary to make such information not misleading;
(b) The Selling Shareholder, having full right, power and
authority to do so, has duly executed and delivered this Power of
Attorney;
(c) The Selling Shareholder has carefully reviewed
the Registration Statement and will carefully review each amendment
thereto immediately upon receipt thereof from the Company and will
promptly advise the Company in writing if:
(i) The name and address of the Selling Shareholder
is not properly set forth in each preliminary prospectus
(collectively, the "Preliminary Prospectus") contained in the
Registration Statement at the time it becomes effective;
(ii) The Selling Shareholder has reason to believe
that (A) any information furnished to the Company by or on
behalf of the Selling Shareholder for use in connection with
the Registration Statement, the Preliminary Prospectus, or the
final prospectus (including the abbreviated term sheet, if
any) (the "Prospectus") is not true and complete; and (B) any
Preliminary Prospectus, the Prospectus and any supplements
thereto contain any untrue statement of a material fact or
omit to state any material fact required to be stated herein
or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
(iii) The Selling Shareholder knows of any material
adverse information with regard to the current or prospective
operations of the Company or any of its subsidiaries which is
not disclosed in any Preliminary Prospectus, the Prospectus or
the Registration Statement; or
(iv) Except as indicated in the Prospectus, the
Selling Shareholder knows of any arrangements made or to be
made by any
B-4
<PAGE> 41
person, or of any transaction already effected, (A) to limit
or restrict the sale of shares of the Common Stock during the
period of the public distribution, (B) to stabilize the market
for the Common Stock or (C) to withhold commissions, or
otherwise to hold any other person responsible for the
distribution of the Selling Shareholder's participation;
(d) In connection with the offering of the Shares,
the Selling Shareholder has not taken and will not knowingly take,
directly or indirectly, any action intended to, or which might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Shares to facilitate the sale or
resale of the Shares;
(e) The Selling Shareholder has not distributed and will not
distribute any prospectus or other offering material in connection with
the offering and sale of the Shares other than a Preliminary
Prospectus, the Prospectus or other material permitted by the Act;
(f) The Selling Shareholder will notify the Company in writing
immediately of any changes in the foregoing information which should be
made as a result of developments occurring after the date hereof and
prior to the Closing Dates under the Underwriting Agreement, and the
Committee may consider that there has not been any such development
unless advised to the contrary;
(g) The Selling Shareholder has, and at the time of delivery
of the Shares to the Underwriter it will have, full power and authority
to enter into this Power of Attorney, to carry out the terms and
provisions hereof and to make all the representations, warranties and
covenants contained herein; and
(h) This Power of Attorney is the valid and binding agreement
of the Selling Shareholder and is enforceable against the Selling
Shareholder in accordance with its terms, except as such enforceability
may be limited by general principles of equity, whether applied in a
court of law or a court of equity, and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally.
5. The representations, warranties and covenants of the
Selling Shareholder in this Power of Attorney are made for the benefit of, and
may be relied upon by, the Committee, the Company
B-5
<PAGE> 42
and its counsel, the Custodian, the Underwriter and its representatives,
agents and counsel.
6. The Committee shall be entitled to act and rely upon any
statement, request, notice or instructions respecting this Power of Attorney
given to it by the Selling Shareholder, not only as to the authorization,
validity and effectiveness thereof, but also as to truth and acceptability of
any information therein contained.
It is understood that the Committee assumes no responsibility
or liability to any person other than to deal with the Shares deposited with it
and the proceeds from the sale of the Shares in accordance with the provisions
hereof. The Committee makes no representations with respect to and shall have no
responsibility for the Registration Statement, the Prospectus or any Preliminary
Prospectus nor, except as herein expressly provided, for any aspect of the
offering of Common Stock, and it shall not be liable for any error of judgment
or for any act done or omitted or for any mistake of fact or law except for its
own negligence or bad faith. The Selling Shareholder agrees to indemnify the
Committee for and to hold the Committee harmless against any loss, claim, damage
or liability incurred on its part arising out of or in connection with it acting
as the Committee under this Power of Attorney, as well as the cost and expense
of investigating and defending against any such loss, claim, damage or
liability, except to the extent such loss claim, damage or liability is due to
the negligence or bad faith of the Member seeking indemnification; provided that
the maximum amount for which any Selling Shareholder shall be liable under this
Agreement shall be the net proceeds from the offering received by the Selling
Shareholder less any amounts for which the Selling Shareholder is liable under
Section 7 of the Custody Agreement. The Selling Shareholder agrees that the
Committee may consult with counsel of its own choice (who may be counsel for
the Company) and it shall have full and complete authorization and protection
for any action taken or suffered by it hereunder in good faith and in
accordance with the opinion of such counsel.
7. It is understood that the Committee shall serve entirely
without compensation.
8. This Power of Attorney shall be governed by the laws of the
State of New York.
This Power of Attorney may be signed in two or more
counterparts with the same effect as if the signature thereto and hereto upon
the same instrument.
B-6
<PAGE> 43
In case any provision in this Power of Attorney shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
The Power of Attorney shall be binding upon the Committee and
the Selling Shareholder and the heirs, legal representatives, distributees,
successors and assigns of the Selling Shareholder.
Dated:_____________, 1996
Very truly yours,
TASC PROFIT SHARING AND STOCK
OWNERSHIP PLAN
By:_____________________________
R.E. Hineman
By:_____________________________
S.L. Landry
By:_____________________________
J.W. Putney
SHARES TO BE SOLD:
914,276 shares of Common Stock
ACKNOWLEDGED AND ACCEPTED
THE COMMITTEE:
____________________________________
R.E. Hineman
____________________________________
S.L. Landry
____________________________________
J.W. Putney
B-7
<PAGE> 44
Attachment A
CUSTODY AGREEMENT
-----------------
CUSTODY AGREEMENT, dated _______________, 1996, among Michael
R. Kargula, as Custodian (the "Custodian"), and the entity listed on Annex I
hereto (the "Selling Shareholder").
Primark Corporation, a Michigan corporation (the "Company"),
intends to file a registration statement (the "Registration Statement") under
the Securities Act of 1933, as amended (the "Act") with the Securities and
Exchange Commission to register for sale to the public under the Act, shares of
the Company's Common Stock, $0.02 stated value (the "Common Stock").
The shares to be covered by the Registration Statement shall
consist of up to 914,276 shares of Common Stock (the "Shares") to be sold by the
Selling Shareholder.
The Selling Shareholder has executed and delivered a Power of
Attorney (the "Power of Attorney") naming R.E. Hineman, S.L. Landry and J.W.
Putney, and each of them, as its attorney-in-fact (the "Committee"), for
certain purposes, including the execution, delivery and performance of this
Agreement in its name, place and stead, in connection with the proposed sale
by the Selling Shareholder of the Shares.
1. A custody arrangement is hereby established by the Selling
Shareholder with the Custodian with respect to the Shares, and the Custodian is
hereby instructed to act in accordance with this Agreement and any amendments or
supplements hereto authorized by the Committee.
2. There are herewith delivered to the Custodian, and the
Custodian hereby acknowledges receipt of, certificates representing the Shares,
which certificates have been endorsed in blank or are accompanied by duly
executed stock powers. Such certificates are to be held by the Custodian for
the account of the Selling Shareholder and are to be disposed of by the
Custodian in accordance with this Agreement.
3. The Custodian is authorized and directed by the Selling
Shareholder:
(a) To hold the certificates representing the Shares delivered
by the Selling Shareholder in its custody;
A-1
<PAGE> 45
(b) On or prior to the statement date for any Shares
sold pursuant to the Registration Statement (the "Closing Date"), to
cause such Shares to be transferred on the books of the Company into
such names as the Custodian shall have been instructed by PaineWebber
Incorporated (the "Underwriter"); to cause to be issued, against
surrender of the certificates for the Shares, a new certificate or
certificates for such Shares, free of any restrictive legend,
registered in such name or names; to deliver such new certificates
representing such Shares to the Underwriter on the Closing Date for its
account or accounts against full payment therefor; and to give receipt
for such payment; and
(c) To disburse such payments in the following manner: (i) to
itself, as agent for the Selling Shareholder, a reserve amount to be
designated in writing by the Committee from which amount the Custodian
shall pay, as soon as reasonably practicable, any applicable stock
transfer taxes; and (ii) to the Selling Shareholder, pursuant to the
written instructions of the Committee, (A) on the Closing Date, a sum
equal to the share of the proceeds to which the Selling Shareholder is
entitled, as determined by the Committee, less the reserve amount
designated by any Committee, and (B) promptly after all proper charges,
disbursements, costs and expenses shall have been paid, any remaining
balance of the amount reserved under clause (i) above. Before making
any payment from the amount reserved under clause (i) above, except
payments made pursuant to subclause (B) of clause (ii) above, the
Custodian shall request and receive the written approval of the
Committee.
4. In the event Shares are not sold prior to July 31, 1996,
the Custodian shall deliver to the Selling Shareholder as soon as practicable
after the earlier to occur of such date and termination of the offering of the
Shares, certificates representing such Shares deposited by such Selling
Shareholder. Certificates returned to the Selling Shareholder shall be returned
with any related stock powers, and any new certificates issued to the Selling
Shareholder with respect to such Shares shall bear any appropriate legend
reflecting the unregistered status thereof under the Act.
5. This Agreement is for the express benefit of the Company,
the Selling Shareholder, and the Underwriter. The obligations and authorizations
of the Selling Shareholder hereunder are irrevocable and shall not be terminated
by any act of the Selling Shareholder or by operation of law, whether by the
death,
A-2
<PAGE> 46
disability, or incapacity of the Selling Shareholder or by the occurrence of any
other event or events, and if after the execution hereof the Selling Shareholder
shall die or become disabled or incapacitated, or if any other event or events
shall occur before the delivery of the Selling Shareholder's Shares hereunder to
the Underwriter, such Shares shall be delivered to the Underwriter in accordance
with the terms and conditions of this Agreement, as if such event had not
occurred, regardless of whether or not the Custodian shall have received notice
of such event.
6. Until payment of the purchase price for the Shares has been
made to the Selling Shareholder or to the Custodian, the Selling Shareholder
shall remain the owner of (and shall retain the right to receive dividends and
distributions on, and to vote) the number of Shares delivered by each of them to
the Custodian hereunder. Until such payment in full has been made or until the
offering of Shares has been terminated, the Selling Shareholder agrees that it
will not give, assign, sell, agree to sell, pledge, hypothecate, grant any lien
on, transfer, or otherwise dispose of the Shares or any interests therein.
7. The Custodian shall assume no responsibility to any person
other than to deal with the certificates for the Shares and the proceeds from
the sale of the Shares represented thereby in accordance with the provisions
hereof, and the Selling Shareholder, hereby agrees to indemnify the Custodian
for and to hold the Custodian harmless against any and all losses, claims,
damages or liabilities incurred on its part arising out or in connection with it
acting as the Custodian pursuant hereto, as well as the cost and expenses of
investigating and defending any such losses, claims, damages or liabilities,
except to the extent such losses, claims, damages or liabilities are due to the
negligence or bad faith of the Custodian; provided that the maximum amount for
which the Selling Shareholder shall be liable under this Agreement shall be the
net proceeds from the offering received by the Selling Shareholder less any
amounts for which the Selling Shareholder is liable under Section 6 of the
Agreement and Power of Attorney. The Selling Shareholder agrees that the
Custodian may consult with counsel of its own choice (who may be counsel for
the Company), and the Custodian shall have full and complete authorization and
protection for any action taken or suffered by the Custodian hereunder in good
faith and in accordance with the opinion of such counsel.
8. The Selling Shareholder hereby represents and warrants
that: (a) it has, and at the time of delivery of its Shares to the Underwriter
it will have, full power and authority to enter into this Agreement and the
Power of Attorney, to carry out the terms and provisions hereof and thereof and
to make all of the representations, warranties and agreements contained herein
and
A-3
<PAGE> 47
therein; and (b) this Agreement and the Power of Attorney are the valid and
binding agreements of the Selling Shareholder and are enforceable against the
Selling Shareholder in accordance with their respective terms.
9. The Custodian's acceptance of this Agreement by the
execution hereof shall constitute an acknowledgment by the Custodian of the
authorization herein conferred and shall evidence the Custodian's agreement to
carry out and perform the Agreement in accordance with its terms.
10. The Custodian shall be entitled to act and rely upon any
statement, request, notice or instruction with respect to this Agreement given
to it on behalf of each of the Selling Shareholders if the same shall be made or
given to the Custodian by the Committee, not only as to the authorization,
validity and effectiveness thereof, but also as to the truth and acceptability
of any information therein contained.
11. This Agreement may be executed in two or more counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument. Execution by the Custodian of one counterpart hereof and its
delivery thereof to the Committee shall constitute the valid execution of this
Agreement by the Custodian.
12. This Agreement shall be binding upon the Custodian, the
Selling Shareholder and the respective heirs, legal representatives,
distributees, successors and assigns of the Selling Shareholder.
13. This Agreement shall be governed by the laws of the State
of New York.
14. Any notice given pursuant to this Agreement shall be
deemed given if in writing and delivered in person, or if given by telephone or
telegraph if subsequently confirmed by letter: (i) if to the Selling
Shareholder, to its address set forth in Annex I; and (ii) if to the Custodian,
to it at Michael R. Kargula, Primark Corporation, 1000 Winter Street, Suite
4300N, Waltham, Massachusetts 02154.
* * *
A-4
<PAGE> 48
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
_____________________________________
Michael R. Kargula, as Custodian
THE SELLING SHAREHOLDER LISTED
IN ANNEX I HERETO:
By: The Committee
By:__________________________________
R. E. Hineman
By:__________________________________
S. L. Landry
By:__________________________________
J. W. Putney
A-5
<PAGE> 49
Annex I
-------
<TABLE>
<CAPTION>
Name and Address of
Selling Shareholder Shares to be Sold
------------------- -----------------
<S> <C>
TASC Profit Sharing and Stock Ownership Plan
55 Walkers Brook Drive
Reading, Massachusetts 01867 914,276
</TABLE>
A-6
<PAGE> 50
EXHIBIT C
SUBSIDIARIES
------------
<TABLE>
<CAPTION>
NAME PLACE OF INCORPORATION
<S> <C>
Primark Holding Corporation Delaware
Primark Storage Leasing Corporation Michigan
Primark Financial Technologies, Inc. Delaware
TASC, Inc. Massachusetts
TASC Services Corporation Delaware
TASC Systems Engineering Corporation Delaware
The Analytic Sciences Corporation Limited England
The Computer Department Limited England
The Weather Department Limited England
WSI Corporation Massachusetts
Weather Services International (UK) Ltd. England
Triad International Maintenance Corporation Delaware
Vestek Systems, Inc. California
Westmark Insurance Services, Inc. California
Datastream England
Datastream Group England
Datastream International (Australia) Pty Ltd. Australia
Datastream International (Canada) Ltd. Canada
Datastream International (France) SA France
Datastream International (Hong Kong) Limited Hong Kong
Datastream International (Italy) Srl Italy
Datastream International (Japan) K.K. Japan
Datastream International (Korea) Limited Korea
Datastream International (South Africa)(Proprietary) Limited South Africa
Datastream International (Sweden) Aktiebolag Sweden
Datastream International (Switzerland) Limited Switzerland
Datastream International (D.C.) Inc. Delaware
Datastream International B.V. The Netherlands
Datastream International GmbH Germany
Datastream International Limited England
Datastream International, Inc. Delaware
Datastream Investment Management Services Limited England
Datastream Pension Trustees Limited England
Disclosure GmbH Germany
Disclosure Incorporated Delaware
Disclosure Information Services, Inc. Delaware
Disclosure International, Inc. Delaware
Disclosure Ltd. England
I/B/E/S Inc. Delaware
I/B/E/S International, Inc. Delaware
I/B/E/S Japan K.K. Japan
I/B/E/S UK Ltd. England
Primark France SA France
Primark Hong Kong Limited Hong Kong
Primark Information Services UK Limited England
ACN 3802444 Pty (formerly Primark Australia Pty Ltd.) Australia
<CAPTION>
WorldScope
- ----------
NAME PLACE OF INCORPORATION
WorldScope/Disclosure Incorporated LLC (50% ownership) Delaware
WorldScope/Disclosure Partners (50% ownership) Connecticut
WorldScope/Disclosure International Partners (50% ownership) Ireland
WorldScope/Disclosure Incorporated India Pvt. Ltd. India
(owned by WorldScope/Disclosure Incorporated LLC)
</TABLE>
C-1
<PAGE> 51
EXHIBIT D
MATERIAL SUBSIDIARIES
---------------------
Datastream International, Inc.
Disclosure Incorporated
I/B/E/S International, Inc.
Primark Holding Corporation
Primark Storage Leasing Corporation
Triad International Maintenance Corporation
TASC, Inc.
Vestek Systems, Inc.
D-1
<PAGE> 52
Exhibit E
The Company, certain of its subsidiaries, and certain other individuals and
entities have been named as defendants in the matter captioned JOSEPH M.
STAUSKAS v. TASC, INC. ET AL. which was filed in the United States District
Court, Northern District of Florida. The plaintiff's allegations include
violation of United States copyright laws and trademark law, breach of
contract, misappropriation, fraud, negligent misrepresentation, unjust
enrichment, and false designation of origin. The Company believes that the
allegations are without merit and intends to defend the action vigorously.
E-1
<PAGE> 53
EXHIBIT F
Form of Opinion of
Counsel to the Company
and the Selling Shareholder
---------------------------
F-1
<PAGE> 1
Exhibit 5.1
PRIMARK
- ----------------------------------------------------------------------------
Michael R. Kargula Primark Corporation
Senior Vice President, 1000 Winter Street
General Counsel Suite 4300
and Secretary Waltham, MA 02154
(617) 487-2120
May 29, 1996
Primark Corporation
1000 Winter Street, Suite 4300N
Waltham, MA 02154
Dear 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 914,276 shares of the Company's Common Stock,
without par value (the "Common Stock") to be sold by the Selling Shareholder
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 May 29, 1996 (the
"Registration Statement"); (ii) the Certificate 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
us 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.
<PAGE> 2
Page 2
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 914,276
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
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-04727 of Primark Corporation on Form S-3 of our
report dated February 8, 1996, incorporated by reference in the Annual Report on
Form 10-K of Primark Corporation for the year ended December 31, 1995, and to
the references to us under the headings "Selected Consolidated Historical and
Pro Forma Financial and Operating Data" and "Experts" in the Prospectus, which
is part of this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Boston, Massachusetts
June 6, 1996
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-04727 of Primark Corporation on Form S-3 of our
reports dated February 3, 1995 and January 29, 1993, except for Note 12, which
date is September 6, 1993, appearing in Amendment No. 2 on Form 8-K/A to the
Current Report on Form 8-K dated July 3, 1995 of Primark Corporation, and to the
references to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ LESLIE SUFRIN AND COMPANY, P.C.
Leslie Sufrin and Company, P.C.
New York, New York
June 6, 1996
