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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 5, 1999
(Date of earliest event reported)
FIRSTMARK CORP.
(Exact Name of Registrant as Specified in its Charter)
Maine 0-20806 01-0389195
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
P.O. Box 1398
Richmond, Virginia 23218
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(804) 648-9048
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Item 2. Acquisition or Disposition of Assets.
On March 5, 1999, Firstmark Corp. (the "Registrant") sold all of the
issued and outstanding capital stock of Investors Southern Corporation ("ISC")
(the "Transaction") pursuant to a Stock Purchase Agreement by and among the
Registrant, Southern Capital Acquisition Corporation, a Virginia corporation
("SCAC"), ISC, and Southern Title Insurance Corporation, a Virginia insurance
company ("STIC"), and Old Guard Group, Inc., a Pennsylvania corporation ("Old
Guard"), dated as of December 2, 1998 (the "Stock Purchase Agreement").
The Registrant is the parent company of SCAC, which owned all of the
outstanding shares of the capital stock of ISC prior to the Transaction. ISC is
a holding company and owns all of the outstanding shares of the capital stock of
STIC, a title insurance company, as well as several other entities conducting
activities related to the title insurance and settlement business. As a result
of the Transaction, ISC and STIC, the Registrant's principal operating
subsidiary, became wholly owned subsidiaries of Old Guard.
The purchase price paid by Old Guard consists of two components: cash
paid upon the consummation of the Transaction and a three year earn-out to be
paid, if earned, in cash in 2000, 2001 and 2002. Upon the consummation of the
Transaction, Old Guard paid to SCAC $6.75 million by wire transfer of
immediately available funds. In addition, in 2000, 2001 and 2002, SCAC will
receive additional cash payments based on the pre-tax net income of ISC and its
subsidiaries, including STIC, for each of the fiscal years ending December 31,
1999, 2000 and 2001. Such earn-out payments will be paid in cash within 90 days
following the end of each such fiscal year and will be in an amount equal to 25%
of (i) the pre-tax net income of ISC and its subsidiaries, including STIC, for
such fiscal year less (ii) the cumulative net loss of ISC and its subsidiaries
during all such prior fiscal years.
Pursuant to the Stock Purchase Agreement, Old Guard has agreed to
continue to operate ISC and its subsidiaries in a manner that is consistent with
past practice. In addition, Old Guard has agreed that, when determining ISC's
pre-tax net income, it will not allocate against the revenues of ISC and its
subsidiaries any liabilities or expenses that did not arise in the ordinary
course of business. Finally, Old Guard has agreed that it will not transfer any
of the business operations of ISC and its subsidiaries to itself or one of its
own subsidiaries or sell, assign or otherwise transfer the business of ISC and
its subsidiaries to a third party, whether by sale of assets or stock, merger or
otherwise.
Donald V. Cruickshanks, President, Chief Executive Officer and Chairman
of the Board of the Registrant, will continue to serve as President and Chief
Executive Officer of STIC.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
The pro forma financial information required to be included in this
report is not included herein pursuant to Item 7(b)(2) and will be
filed as soon as possible.
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(c) Exhibits.
2.1 Stock Purchase Agreement by and among the Registrant,
Southern Capital Acquisition Corporation, a Virginia
corporation, Investors Southern Corporation, a Virginia
corporation, and Southern Title Insurance Corporation, a
Virginia insurance company, and Old Guard Group, Inc., a
Pennsylvania corporation, dated as of December 2, 1998,
incorporated by reference to Appendix A to the Registrant's
definitive Proxy Statement for its Special Meeting of
Shareholders to be held on February 17, 1999, filed with
the Commission on January 29, 1999.
99.1 Press release issued by the Registrant on March 8, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FIRSTMARK CORP.
(Registrant)
Date: March 5, 1999 By: /s/ Donald V. Cruickshanks
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Donald V. Cruickshanks
President and Chief Executive Officer
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Exhibit Index
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Number Document
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2.1 Stock Purchase Agreement by and among the Registrant, Southern
Capital Acquisition Corporation, a Virginia corporation, Investors
Southern Corporation, a Virginia corporation, and Southern Title
Insurance Corporation, a Virginia insurance company, and Old Guard
Group, Inc., a Pennsylvania corporation, dated as of December 2,
1998, incorporated by reference to Appendix A to the Registrant's
definitive Proxy Statement for its Special Meeting of Shareholders
to be held on February 17, 1999, filed with the Commission on
January 29, 1999.
99.1 Press release issued by the Registrant on March 8, 1999.
NEWS RELEASE
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FIRSTMARK CORP.
901 East Cary Street Richmond, Virginia 23219 (804) 648-9048
March 8, 1999 Contact:
Blair Winston, Firstmark Corp.
FOR IMMEDIATE RELEASE (804) 648-9048
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FIRSTMARK CORP. COMPLETES SALE
OF INSURANCE SUBSIDIARY TO OLD GUARD GROUP, INC.
RICHMOND, Va. --- Firstmark Corp. (NASDAQ: FIRM) announced today that
it has completed the sale of its principal operating subsidiary, Southern Title
Insurance Corp., and related corporate entities to Old Guard Group, Inc.
(Nasdaq: OGGI), a holding company for property and casualty insurance companies
based in Lancaster, Pennsylvania. Southern Title, which was founded in 1925,
provides residential and commercial title insurance and related services through
more than 100 offices. The sale is valued at approximately $8 million.
Under the terms of the sale, Firstmark received $6.75 million in cash
and could receive additional cash payments based on the pre-tax net income of
Southern Title for each of the next three fiscal years. While Firstmark expects
to post an after-tax loss from the sale, the additional capital will allow the
company to examine its plans for 1999 and beyond without the regulatory
limitations on the use of the capital resources of its former insurance
subsidiary.
Donald V. Cruickshanks, president and chief executive officer of both
Firstmark and Southern Title said, "The proceeds from this transaction will
significantly enhance the liquidity and overall financial strength of Firstmark,
and it will enable the company to pursue other opportunities."
Mr. Cruickshanks will continue to head Southern Title's operations
within the Old Guard family of insurance companies.
Firstmark Corp., founded in 1982, is a publicly-held Maine company with
executive offices in Richmond, Virginia. The company currently has various real
estate holdings and venture capital investments.
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Certain statements in this letter may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Although Firstmark believes that its expectations with respect to
certain forward looking statements are based upon reasonable assumptions within
the bounds of its business operations, there can be no assurance that actual
results, performance or achievements of Firstmark will not differ materially
from any future results, performance or achievements expressed or implied by
such forward-looking statements.
