UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Fiscal Year Ended October 31, 1993 Commission File No. 1-10411
SAFECARD SERVICES, INCORPORATED
(Exact name of Registrant as specified in its charter)
Delaware 13-2650534
- - - ------------------------------ --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
3001 E. Pershing Blvd, Cheyenne, Wyoming 82001
- - - ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (307) 771-2700
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of Exchange on Which Registered
- - - ---------------------------- ------------------------------------
Common Stock, $.01 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant (based on the closing market price on January 25, 1994):
$434,053,000.
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock as of January 25, 1994: Common Stock, $.01 Par Value -
24,182,815 shares.
Documents Incorporated By Reference
Portions of the Annual Report to Shareholders for the year ended October 31,
1993 are incorporated by reference into Part II.
Portions of the Proxy Statement for the 1994 Annual Meeting of Shareholders
are incorporated by reference into Part III.
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
Certain of the agreements listed below, including, but not limited to,
the Property Lease identified as Exhibit 10(j), are the subject of litigation
with Peter Halmos and parties related to him.
(a)1. Financial Statements
The Financial Statements are in the Index thereto set forth in Item
8. Financial Statements and Supplementary Data.
(a)2. Financial Statement Schedules Page
Report of Independent Accountants 19
Schedule I 20-22
Schedule VIII 23
(a)3. Exhibits
3(a) SafeCard Services, Incorporated's Certificate of
Incorporation, incorporated by reference to Exhibit 3(a) of the Company's
Annual Report on Form 10-K for its fiscal year ended October 31, 1992.
3(b) SafeCard Services, Incorporated's Certificate of
Amendment of Certificate of Incorporation, as filed with the Secretary of
State of Delaware, Division of Corporations on August 20, 1987, incorporated
by reference to Exhibit 3(g) of the Company's Annual Report on Form 10-K for
its fiscal year ended October 31, 1987.
3(c) SafeCard Services Insurance Company's Certificate of
Incorporation, incorporated by reference to Exhibit 3(e) of the Company's
Annual Report on Form 10-K for its fiscal year ended October 31, 1987.
3(d) SafeCard Services Insurance Company's By-Laws,
incorporated by reference to Exhibit 3(f) of the Company's Annual Report on
Form 10-K for its fiscal year ended October 31, 1987.
3(e) SafeCard Services, Incorporated By-Laws as amended
through September 13, 1993, incorporated by reference to Exhibit 10(c) of the
Company's Quarterly Report on Form 10-Q for its fiscal quarter ended July 31,
1993.
10(a) Description of 1979 Stock Option Plan, incorporated by
reference to Exhibit 10(b) to the Company's Registration Statement on Form
S-1, No. 2-72966, as filed with the Securities and Exchange Commission on
June 26, 1981.
10(b) Form of Non-Qualified Stock Option Agreement dated August
30, 1989 between the Company and each of William T. Bacon and Richard W.
Nixon, incorporated by reference to Exhibit 10(a) of the Company's Quarterly
Report on Form 10-Q for its fiscal quarter ended July 31, 1989.
10(c) Form of 1987 Non-Qualified Stock Option Agreement dated
August 30, 1989 between the Company and each of various employees of the
Company, incorporated by reference to Exhibit 10(b) of the Company's
Quarterly Report on Form 10-Q for its fiscal quarter ended July 31, 1989.
10(d) Form of Non-Qualified Stock Option Agreement dated August
30, 1989 between the Company and each of six officers of the Company,
incorporated by reference to Exhibit 10(c) of the Company's Quarterly Report
on Form 10-Q for its fiscal quarter ended July 31, 1989.
10(e) Form of Non-Qualified Stock Option Agreement dated August
30, 1989 between the Company and each of Peter Halmos and Steven J. Halmos,
incorporated by reference to Exhibit 10(d) of the Company's Quarterly Report
on Form 10-Q for its fiscal quarter ended July 31, 1989.
10(f) Form of 1989 Stock Option Plan Amended Non-Qualified
Stock Option Agreement between the Company and each of various employees of
the Company, effective November 9, 1990, incorporated by reference to Exhibit
10(f) of the Company's Annual Report on Form 10-K for its fiscal year ended
October 31, 1990.
10(g) Form of Non-Qualified Stock Option Agreement, effective
as of November 29, 1989, between the Company and Steven J. Halmos,
incorporated by reference to Exhibit 10(c) to the Company's Quarterly Report
on Form 10-Q for its fiscal quarter ended April 30, 1990.
10(h) Form of Termination Agreements dated August 31, 1989
between the Company and each of six officers of the Company, incorporated by
reference to Exhibit 10(f) of the Company's Annual Report on Form 10-K for
its fiscal year ended October 31, 1989.
10(i) Form of letter amending Termination Agreements between
the Company and each of six officers of the Company, incorporated by
reference to Exhibit 10(b) to the Company's Quarterly Report on Form 10-Q for
its fiscal quarter ended April 30, 1990.
10(j) Property Lease, dated March 1, 1985, between the Company
and a partnership consisting of Peter Halmos and Steven J. Halmos,
incorporated by reference to Exhibit 10(c) to the Company's Annual Report on
Form 10-K, for its fiscal year ended October 31, 1986.
10(k) Agreement with Citicorp (South Dakota), N.A., effective
January 1, 1989, incorporated by reference to the Company's Form 8 Amendment
No. 3, dated November 10, 1989, to its Quarterly Report on Form 10-Q for its
fiscal quarter ended April 30, 1989.
10(l) Agreement with Peter Halmos, dated November 1, 1988,
regarding a marketing license for credit information services, incorporated
by reference to Exhibit 10(e) of the Company's Annual Report on Form 10-K,
for its fiscal year ended October 31, 1988.
10(m) First Amendment to Agreement, dated January 25, 1991,
regarding marketing license for credit information services, incorporated by
reference to Exhibit 10(m) of the Company's Annual Report on Form 10-K for
its fiscal year ended October 31, 1990.
10(n) Form of Non-Qualified Stock Option Agreement dated
October 16, 1991 between the Company and an outside director, incorporated by
reference to Exhibit 10(n) of the Company's Annual Report on Form 10-K for
its fiscal year ended October 31, 1991.
10(o) Form of Non-Qualified 1991 Employee Stock Option Plan
dated October 16, 1991 between the Company and twenty key employees,
incorporated by reference to Exhibit 10(o) of the Company's Annual Report on
Form 10-K for its fiscal year ended October 31, 1991.
10(p) Public Relations Consulting Agreement dated October 1,
1991 between the Dilenschneider Group, Inc. and the Company, incorporated by
reference to Exhibit 10(p) of the Company's Annual Report on Form 10-K for
its fiscal year ended October 31, 1991.
10(q) Letter Agreement dated January 27, 1992, between
CreditLine Corporation and the Company, incorporated by reference to Exhibit
10(q) of the Company's Annual Report on Form 10-K for its fiscal year ended
October 31, 1991.
10(r) Confirmation Agreement between Peter Halmos, High Plains
Capital Corporation, CreditLine Corporation and the Company dated January 27,
1992, incorporated by reference to Exhibit 10(r) of the Company's Annual
Report on Form 10-K for its fiscal year ended October 31, 1991.
10(s) Board of Directors' Resolution dated December 6, 1991
establishing a non-employee director retirement plan, incorporated by
reference to Exhibit 10(s) of the Company's Annual Report on Form 10-K for
its fiscal year ended October 31, 1991.
10(t) SafeCard Services, Incorporated Employee Relocation
Incentive Package, incorporated by reference to Exhibit 10(a) to the Company'
Quarterly Report on Form 10-Q for its fiscal quarter ended April 30, 1992.
10(u) Second Amendment to Agreement with Citicorp (South
Dakota), N.A. dated March 31, 1992 incorporated by reference to Exhibit 10(b)
to the Company's Quarterly Report on Form 10-Q for its fiscal quarter ended
April 30, 1992.
10(v) Letter Agreement dated May 28, 1992 between SafeCard
Services, Incorporated and Gerald R. Cahill incorporated by reference to
Exhibit 10(a) to the Company's Quarterly Report on Form 10-Q for its fiscal
quarter ended July 31, 1992.
10(w) Letter Agreement dated October 26, 1992 between SafeCard
Services, Incorporated and WM Stalcup incorporated by reference to Exhibit
10(w) to the Company's Annual Report on Form 10-K for its fiscal year ended
October 31, 1992.
10(x) Indemnification Agreements for the Company's Directors
and certain of the Company's executive officers dated October 2, 1992
incorporated by reference to Exhibit 10(x) to the Company's Annual Report on
Form 10-K for its fiscal year ended October 31, 1992.
10(y) Memorandum of Understanding between SafeCard Services,
Incorporated and Steven J. Halmos dated December 19, 1992, incorporated by
reference to Exhibit 1 of the Company's report on form 8-K as filed with the
Securities and Exchange Commission on December 19, 1992.
10(z) Amended Complaint filed February 24, 1993 in Peter Halmos
v. SafeCard Services, Incorporated, Civil Case No. 93-04354 (Circuit Court
for the 17th Judicial Circuit in and for Broward County) incorporated by
reference to Exhibit 10(c) of the Company's Quarterly Report on Form 10-Q for
its fiscal quarter ended April 30, 1993.
10(aa) Answer and Affirmative Defenses, Counterclaims and Third
Party Complaint, and Demand for Jury Trail of SafeCard Services, Incorporated
filed May 26, 1993 in Peter Halmos v. SafeCard Services, Incorporated, Civil
Case No. 93-04354 (Circuit Court for the 17th Judicial Circuit in and for
Broward County, Florida) incorporated by reference to Exhibit 10(d) of the
Company's Quarterly Report on Form 10-Q for its fiscal quarter ended April
30, 1993.
10(ab) Complaint filed May 26, 1993 in Peter Halmos, et al. v.
SafeCard Services, Incorporated, et al., Case No. 93-CH-4807 (Circuit Court
of Cook County, Illinois, County Department, Chancery Division) incorporated
by reference to Exhibit 10(e) of the Company's Quarterly Report on Form 10-Q
for its fiscal quarter ended April 30, 1993.
10(ac) Agreements between SafeCard Services, Incorporated and
Steven J. Halmos as follows:
* Standstill, Voting and Right of First Refusal Agreement dated
April 1, 1993 between SafeCard Services, Incorporated and Steven
J. Halmos.
* The first Amended and Restated Memorandum of Understanding dated
April 1, 1993 between SafeCard Services, Incorporated and Steven
J. Halmos.
* Side Letter Agreement dated April 1, 1993 between SafeCard
Services, Incorporated and Steven J. Halmos referred to in
Paragraph 10.1.1 of the First Amended and Restated Memorandum of
Understanding.
incorporated by reference to Exhibit 1 of the Company's report on Form 8-K
as filed with the Securities and Exchange Commission on April 1, 1993.
10(ad) Complaint filed August 11, 1993 in SafeCard Services,
Incorporated v. Peter A. Halmos, et al., Doc. 134, No. 192 (District Court,
First Judicial District, Laramie County, Wyoming) incorporated by reference
to Exhibit 10(a) of the Company's Quarterly Report on Form 10-Q for its
fiscal quarter ended July 31, 1993.
10(ae) Second Amended Complaint filed July 27, 1993 in Halmos
Trading & Investment Co., a Florida general partnership, by and through Peter
Halmos, as managing general partner v. SafeCard Services, Incorporated, et
al., Case No. 93-04354 (06) (Circuit Court, 17th Judicial Circuit, Broward
County, Florida, Civil Division) incorporated by reference to Exhibit 10(b)
of the Company's Quarterly Report on Form 10-Q for its fiscal quarter ended
July 31, 1993.
10(af) Investor Relations Consulting Agreement dated June 21,
1993, effective January 1, 1993 between the Dilenschneider Group, Inc. and
the Company incorporated by reference to Exhibit 10(d) of the Company's
Quarterly Report on Form 10-Q for its fiscal quarter ended July 31, 1993.
10(ag) Investor Relations Consulting Agreement dated June 21,
1993, effective January 1, 1993 between Eugene Miller and the Company
incorporated by reference to Exhibit 10(e) of the Company's Quarterly Report
on Form 10-Q for its fiscal quarter ended July 31, 1993.
10(ah) Third Amendment to the Agreement with Citibank (South
Dakota), N.A., dated August 30, 1993. *
10(ai) Indemnification Agreements for two of the Company's
Directors dated February 11, 1993 and September 1, 1993.
10(aj) Forms of Non-Qualified Stock Option Agreements dated
February 11, 1993 and September 1, 1993 between the Company and two outside
directors.
- - - ----------------
* Portions of Exhibit 10(ah) have been omitted and filed separately with the
Commission pursuant to a confidential treatment request.
10(ak) 1994 Long Term Stock-Based Incentive Plan, incorporated
by reference to the Company's definitive proxy statement.
10(al) Counterclaim filed January 14, 1994 by Peter Halmos in
Halmos Trading & Investment Co., a Florida general partnership, by and
through Peter Halmos, as managing general partner v. SafeCard Services,
Incorporated, et al., Case No. 93-04354 (06) (Circuit Court, 17th Judicial
Circuit, Broward County, Florida, Civil Division) incorporated by reference
to Exhibit 1 of the Company's Current Report on Form 8-K filed on January 14,
1994.
10(am) Amended complaint filed December 1, 1993 in Peter Halmos,
et al. v. SafeCard Services, Inc., et al., Case No. 93-CH-4807 (circuit Court
of Cook County, Illinois, County Department, Chancery Division.
10(an) Employment Agreement, effective as of December 1, 1993,
between the Company and Paul G. Kahn incorporated by reference to Exhibit 1
of the Company's Current Report on Form 8-K filed on December 6, 1993.
10(ao) Investor relations letter agreement dated January 6,
1994, effective January 1, 1994 between the Company and the Dilenschneider
Group, Inc.
10(ap) Investor relations letter agreement dated December 20,
1993, effective January 1, 1994 between the Company and Eugene Miller.
10(aq) Letter Agreement dated May 28, 1992 between SafeCard
Services, Incorporated and Lynn C. Torrent.
10(ar) Letter Agreement dated December 4, 1992 between SafeCard
Services, Incorporated and David Gallimore.
11(a) Computation of Primary Earnings Per Share.
11(b) Computation of Fully Diluted Earnings Per Share.
13 SafeCard Services, Incorporated 1993 Annual Report.
15 Consent of Independent Accountants to incorporation by
reference of their report in Prospectuses constituting part of Registration
Statements on Forms S-3 and S-8.
22 Subsidiaries of the Registrant.
(b) Reports on Form 8-K
NONE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
SAFECARD SERVICES, INCORPORATED
By: FRANCIS J. MARINO
------------------------------
Francis J. Marino
Vice Chairman
Exhibit Index
Exhibit Page Numbers
3(a) SafeCard Services, Incorporated Incorporated by reference to
Certificate of Incorporation. Exhibit 3(a) of the Company's
Annual Report on Form 10-K
for its fiscal year ended
October 31, 1992.
3(b) SafeCard Services, Incorporated Incorporated by reference to
Certificate of Amendment of Exhibit 3(g) of the Company's
Certificate of Incorporation, as Annual Report on Form 10-K for
filed with the Secretary of State its fiscal year ended October
of Delaware, Division of Corporations 31, 1987.
on August 20, 1987.
3(c) SafeCard Services Insurance Incorporated by reference to
Company's Certificate of Exhibit 3(e) of the Company's
Incorporation. Annual Report on Form 10-K for
its fiscal year ended October
31, 1987.
3(d) SafeCard Services Insurance Incorporated by reference to
Company's By-Laws. Exhibit 3(f) of the Company's
Annual Report on Form 10-K for
its fiscal year ended October
31, 1987.
3(e) SafeCard Services, Incorporated Incorporated by reference to
By-Laws as amended through Exhibit 10(c) of the Company's
September 13, 1993. Quarterly Report on Form 10-Q
for its fiscal quarter ended
July 31, 1993.
10(a) Description of 1979 Incorporated by reference to
Stock Option Plan. Exhibit 10(b) to the Company's
Registration Statement on Form
S-1, No. 2-72966, as filed
with the Securities and
Exchange Commission on June
26, 1981.
10(b) Form of Non-Qualified Stock Option Incorporated by reference to
Agreement dated August 30, 1989 Exhibit 10(a) of the Company's
between the Company and each of Quarterly Report on Form 10-Q
William T. Bacon and Richard W. Nixon. for its fiscal quarter ended
July 31, 1989.
10(c) Form of 1987 Non-Qualified Stock Incorporated by reference to
Option Agreement dated August 30, Exhibit 10(b) of the Company's
1989 between the Company and each Quarterly Report on Form 10-Q
of Peter Halmos and Steven J. Halmos. of its fiscal quarter ended
July 31, 1989.
Exhibit Index
Exhibit Page Numbers
10(d) Form of Non-Qualified Stock Option Incorporated by reference to
Agreement dated August 30, 1989 Exhibit 10(c) of the Company's
between the Company and each of Report on Form 10-Q of its
six officers. fiscal quarter ended July 31,
1989.
10(e) Form of Non-Qualified Stock Option Incorporated by reference to
Agreement dated August 30, 1989 Exhibit 10(d) of the Company's
between the Company and each of Quarterly Report on Form 10-Q
Peter Halmos and Steven J. Halmos. for its fiscal quarter ended
July 31, 1989.
10(f) Form of 1989 Stock Option Plan Incorporated by reference to
Amended Non-Qualified Stock Option Exhibit 10(f) of the Company's
Agreement between the Company and Annual Report on Form 10-K for
each of various employees of the its fiscal year ended October
Company, effective November 9, 1990. 31, 1990.
10(g) Form of Non-Qualified Stock Option Incorporated by reference to
Agreement, effective as of November Exhibit 10(c) to the Company's
29, 1989, between the Company and Quarterly Report on Form 10-Q
Steven J. Halmos. for its fiscal quarter ended
April 30, 1990.
10(h) Form of Termination Agreements dated Incorporated by reference to
August 31, 1989 between the Company Exhibit 10(f) of the Company's
and each of six officers of the Annual Report on Form 10-K for
Company. its fiscal year ended October
31, 1989.
10(i) Form of letter amending Termination Incorporated by reference to
Agreements between the Company and Exhibit 10(b) to the Company's
each of six officers of the Company. Quarterly Report on Form 10-Q
for its fiscal quarter ended
April 30, 1990.
10(j) Property Lease, dated March 1, 1985, Incorporated by reference to
between the Company and a partnership Exhibit 10(c) to the Company's
consisting of Peter Halmos and Steven Annual Report on Form 10-K for
J. Halmos. its fiscal year ended October
31, 1986.
10(k) Agreement with Citicorp (South Incorporated by reference to
Dakota), N.A., effective January 1, the Company's Form 8 Amendment
1989. No. 3, dated November 10,
1989, to its Quarterly Report
on Form 10-Q for its fiscal
quarter ended April 30, 1989.
10(l) Agreement with Peter Halmos, dated Incorporated by reference to
November 1, 1988, regarding a marketing Exhibit 10(e) to the Company's
for credit information services. Annual license Report on Form
10-K for its fiscal year ended
October 31, 1988.
Exhibit Index
Exhibit Page Numbers
10(m) First Amendment to Agreement, dated Incorporated by reference to
January 25, 1991, regarding marketing Exhibit 10(m) of the Company's
license for credit information Annual Report on Form 10-K for
services. its fiscal year ended October
31, 1990.
10(n) Form on Non-Qualified Stock Option Incorporated by reference to
Agreement dated October 16, 1991 Exhibit 10(n) of the Company's
between the Company and an outside Annual Report on Form 10-K
director. for its fiscal year ended
October 31, 1991.
10(o) Form of Non-Qualified Stock Option Incorporated by reference to
Plan dated October 16, 1992 between Exhibit 10(o) of the Company's
the Company and twenty key employees. Annual Report on Form 10-K for
its fiscal year ended October
31, 1991.
10(p) Public Relations Consulting Agreement Incorporated by reference to
dated October 1, 1992 between The Exhibit 10(p) of the Company's
Dilenschneider Group, Inc. and Annual Report on Form 10-K for
the Company. its fiscal year ended october
31, 1991.
10(q) Letter Agreement dated January 27, Incorporated by reference to
1992, between CreditLine Corporation Exhibit 10(q) of the Company's
and the Company. Annual Report on Form 10-K for
its fiscal year ended October
31, 1991.
10(r) Confirmation Agreement between Peter Incorporated by reference to
Halmos, High Plains Capital Exhibit 10(r) of the Company's
Corporation, CreditLine Corporation Annual Report on Form 10-K for
and the Company dated January 27, 1992. its fiscal year ended October
31, 1992.
10(s) Board of Directors' Resolution dated Incorporated by reference to
December 6, 1991 establishing non- Exhibit 10(s) of the Company's
employee director retirement plan. Annual Report on Form 10-K for
its fiscal year ended October
31, 1991.
Exhibit Index
Exhibit Page Numbers
10(t) SafeCard Services, Incorporated Incorporated by reference to
Employee Relocation Incentive Packages. Exhibit 10(a) to the Company's
Quarterly Report on Form 10-Q
for its fiscal quarter ended
April 30, 1992.
10(u) Second Amendment to Agreement with Incorporated by reference to
Citicorp (South Dakota), N.A. Exhibit 10(b) to the Company's
dated March 31, 1992. Quarterly Report on Form 10-Q
for its fiscal quarter ended
April 30,1992.
10(v) Letter Agreement dated May 28, 1992 Incorporated by reference to
between SafeCard Services, Exhibit 10(a) to the Company's
Incorporated and Gerald R. Cahill. Quarterly Report on Form 10-Q
for its fiscal quarter ended
July 31, 1992.
10(w) Letter Agreement dated October 26, Incorporated by reference to
1992 between SafeCard Services, Exhibit 10(w) to the Company's
Incorporated and WM Stalcup. Annual Report on Form 10-K for
its fiscal year ended October
31, 1992.
10(x) Indemnification Agreements for the Incorporated by reference to
Company's Directors and certain of Exhibit 10(x) to the Company's
the Company's executive officers Annual Report on Form 10-K for
dated October 2, 1992. its fiscal year ended October
31, 1992.
10(y) Memorandum of Understanding between Incorporated by reference to
SafeCard Services, Incorporated and Exhibit 1 of the Company's
Steven J. Halmos dated December 19, report on form 8-K as filed
1992. with the Securities and
Exchange Commission on
December 19, 1992.
10(z) Amended Complaint filed February 24, Incorporated by reference to
1993 in Peter Halmos v. SafeCard Exhibit 10(c) of the Company's
Services, Incorporated, Civil Case Quarterly Report on Form 10-Q
No. 93-04354 (Circuit Court for the for its fiscal quarter ended
17th Judicial Circuit in and for April 30, 1993.
Broward County).
10(aa) Answer and Affirmative Defenses, Incorporated by reference to
Counterclaims and Demand for Exhibit 10(d) of the Company's
Jury Trial of SafeCard Services, Quarterly Report on Form 10-Q
Incorporated May 26, 1993 in Peter for its fiscal quarter ended
Halmos v. SafeCard Services, April 30, 1993.
Incorporated, Civil Case No. 93-
04354 (Circuit Court for the 17th
Judicial Circuit in and for Broward
County, Florida).
<PAGE>
Exhibit Index
Exhibit Page Numbers
10(ab) Complaint filed May 26, 1993 in Incorporated by reference to
Peter Halmos et al. v. SafeCard Exhibit 10(e) of the Company's
Services, Incorporated, et al., Quarterly Report on Form 10-Q
Case No. 93-CH-4807 (Circuit Court for its fiscal quarter ended
of Cook County, Illinois, County April 30, 1993.
Department, Chancery Division).
10(ac) Agreements between SafeCard Services, Incorporated by reference to
Incorporated and Steven J. Halmos. Exhibit 1 of the Company's
report on Form 8-K as filed
with the Securities and
Exchange Commission on April
1, 1993.
10(ad) Complaint filed August 11, 1993 in Incorporated by reference to
SafeCard Services, Incorporated v. Exhibit 10(a) of the Company's
Peter A. Halmos et al., Doc. 134, Report on Form 10-Q for its
No. 192 (District Court, First fiscal quarter ended July 31,
Judicial District, Laramie County, 1993.
Wyoming).
10(ae) Second Amended Complaint filed July Incorporated by reference to
27, 1993 Halmos Trading & Investment Exhibit 10(b) of the Company's
Co., a Florida general partnership, Quarterly Report on Form 10-Q
by and through Peter Halmos, as for its fiscal quarter ended
managing general partner v. SafeCard July 31, 1993.
Services, Incorporated, et al., Case
No. 93-04354(06) (Circuit Court, 17th
Judicial District, Laramie County,
Wyoming).
10(af) Investor Relations Consulting Agreement Incorporated by reference to
dated June 21, 1993, effective January Exhibit 10(d) of the Company's
1, 1993 between The Dilenschneider Quarterly Report on Form 10-Q
Group Inc. and the Company. for its fiscal quarter ended
July 31, 1993.
10(ag) Investor Relations Consulting Agreement Incorporated by reference to
dated June 21, 1993, effective January Exhibit 10(e) of the Company's
1, 1993 between Eugene Miller and the Quarterly Report on Form 10-Q
Company. for its fiscal quarter ended
July 31, 1993.
10(ah) Third Amendment to the Agreement with 33 - 36
Citibank (South Dakota), N.A. dated
August 30, 1993. *
10(ai) Indemnification Agreements for two of 37 - 54
the Company's Directors dated February
11, 1993 and September 1, 1993.
10(aj) Forms of Non-Qualified Stock Option 55 - 67
Agreements dated February 11, 1993
and September 1, 1993 between the
Company and two outside directors.
- - - -------------------
* Portions of Exhibit 10(ah) have been omitted and filed separately with the
Commission pursuant to a confidential treatment request.
Exhibit Index
Exhibit Page Numbers
10(ak) 1994 Long Term Stock-Based Incorporated by reference to
Incentive Plan. the Company's 1993 definitive
proxy statement.
10(al) Counterclaim filed January 14, 1994 Incorporated by reference to
by Peter Halmos in Halmos Trading & Exhibit 1 of the Company's
Investment Co., a Florida general Current Report on Form 8-K
partnership, by and through Peter filed on January 14, 1994.
Halmos, as managing general partner
v. SafeCard Services Incorporated,
et al., Case No. 93-04354 (06)
(Circuit Court, 17th Judicial
Circuit, Broward County, Florida
Civil Division).
10(am) Amended Complaint filed December 1, 1993 68 - 125
in Peter Halmos, et al. v. SafeCard
Services, Incorporated, et al., Case No.
93-CH-4807 (Circuit Court of Cook County,
Illinois, County Department, Chancery Division.
10(an) Employment Agreement, effective as of Incorporated by reference to
December 1, 1993, between the Company Exhibit 1 of the Company's
and Paul G. Kahn. Current Report on Form 8-K
filed on December 6, 1993.
10(ao) Investor relations letter agreement dated 126
January 6, 1994, effective January 1, 1994
between the Company and the Dilenschneider
Group, Inc.
10(ap) Investor relations letter agreement dated 127
December 20, 1993, effective January 1, 1994
between the Company and Eugene Miller.
10(aq) Letter Agreement dated May 28, 1992 between 128
SafeCard Services, Incorporated and
Lynn C. Torrent.
10(ar) Letter Agreement dated December 4, 1992 129
between SafeCard Services, Incorporated
and David Gallimore.
11(a) Computation of Primary Earnings Per Share. 130
11(b) Computation of Fully Diluted Earnings Per Share. 131
13 SafeCard Services, Incorporated 132 - 157
1993 Annual Report.
15 Consent of Independent Accountants to incorporate 158
by reference their report in Prospectuses
constituting part of the Registration Statements on
Forms S-3 and S-8.
22 Subsidiaries of the Registrant. 159
EXHIBIT 10(ah)
THIRD AMENDMENT
TO THE AGREEMENT
BY AND BETWEEN
CITIBANK (SOUTH DAKOTA), N.A.
AND
SAFECARD SERVICES, INC.
This Amendment entered into on the 30th day of August, 1993,
by and between CITIBANK (SOUTH DAKOTA), N.A. ("CBSD"), having its
offices at 701 East 60th Street North, Sioux Falls, South Dakota
57117, and SAFECARD SERVICES, INC. ("SafeCard"), having offices at
3001 East Pershing Boulevard, Cheyenne, Wyoming 82001.
WHEREAS, pursuant to an agreement dated as of January 1, 1989
between CBSD and SafeCard, as amended, (the "Agreement"), SafeCard
provides a card registration service to CBSD Cardholders; and
WHEREAS, CBSD and SafeCard now desire to change the Agreement
(as previously amended) as set forth herein, said changes to be
effective as of the date first above written unless otherwise noted
below;
NOW, THEREFORE, CBSD and SafeCard agree as follows:
1. Article 2.1 (d) will be replaced in its entirety with the
following. The remainder of Article 2.1 (i.e., Articles 2.1 (a),
(b), (c), (e), (f), and (g)) will remain in effect as currently
written.
"(d) At SafeCard's expense, SafeCard and/or its
agents will conduct Telemarketing solicitations. The
number of Cardholders SafeCard will call and the timing
of such solicitations shall be determined by mutual
agreement, except that each year (July 1 to June 30 or
prorated portion thereof) this Agreement is in effect,
CBSD will provide SafeCard with and allow SafeCard to
call [ Confidential treatment requested ]; and
Cardholders at least once each year (or part thereof).
SafeCard shall cause its Phone Agents to meet the
Performance Standards for Telephone Solicitation as
set forth in Schedule 2.1(d)-1 attached hereto and
the Telemarketing Ethics Statement attached hereto
as Schedule 2.1(d)-2.
"New Accounts" is defined as all Cardholders who have
been Cardholders [ Confidential treatment requested ],
except for Choice Cardholders for whom New Accounts will
mean Choice Cardholders who have been Choice Cardholders
[ Confidential treatment requested ].
With respect to the above referenced New Accounts, it is
the intent of the parties that SafeCard be allowed to
call [ Confidential treatment requested ] that CBSD and
SafeCard mutually agree presents a marketing opportunity,
except those that CBSD is prohibited from allowing
SafeCard to call under the specific terms of written
agreement(s) CBSD has or may enter into with a third
party with whom CBSD offers a co-branded bankcard.
2. Article 1 of the Agreement will be amended to replace
articles 1.6 and 1.7 (which were added pursuant to the Second
Amendment to the Agreement) as follows:
"1.6 Second Term will be defined as the period from
July 1, 1993 until December 31, 1999."
"1.7 Cardholders will be defined to mean holders of
CBSD Cards, collectively including, but not limited to,
Classic Cardholders, Preferred Cardholders, AAdvantage
Cardholders, Choice Cardholders, and any holders of any
new Visa or MasterCard cards CBSD introduces during the
term of the Agreement, excluding business and corporate
cards."
3. Article 7.1 (which was amended by the Second Amendment)
will be amended to replace "December 31, 1997" with "December 31,
1999."
4. A new Article 9.18 will be added to the Agreement as
follows:
"9.18 New Program Tests. CBSD agrees to allow
SafeCard to conduct Solicitations to Cardholders on a
test basis (as set forth below) regarding at least the
following three new SafeCard services (the "New
Services"):
(i) Protection Plus Wallet Coverage (enhanced
version of the Program)
(ii) Protection Plus and CreditLine (credit
monitoring combination service
(iii) CreditLine (credit monitoring service)
For purposes of this Article 9.18, CBSD agrees to allow
SafeCard to conduct said tests as follows:
a. The parties agree to conduct Solicitations for the
tests of (i) Protection Plus Wallet Coverage and
(ii) Protection Plus and CreditLine (combination
service) in the form of Solo Mailings, Inserts, and
Telemarketing to [ Confidential treatment requested ]
Cardholders for each of the New Services. The timing
of such Solicitations will be as mutually agreed,
but will take place as soon as possible (but at the
latest [ Confidential treatment requested ] from the
date of this Third Amendment).
b. Because it would be difficult to establish specific
criteria for measuring the success of each test
Solicitation (particularly for such things as
customer service activity generated by the test),
the parties agree that [ Confidential treatment
requested ]. SafeCard is entering into this Third
Amendment based upon CBSD's assurances thereof.
c. If the above-referenced combination tests (Item
(ii) above) is deemed successful by both parties,
then CBSD will agree to test the stand-alone
CreditLine service (item (iii)) by allowing
SafeCard to conduct solicitations to cardholders
that CBSD and SafeCard mutually agree upon on a
test basis as set forth in items a and b above.
d. Will respect to the Solicitations relating to the
test, the general terms (but not the financial
terms) of the Agreement will apply to the New
Services. The financial arrangements under which
the test will be conducted will be [ Confidential
treatment requested ], with net sales defined as
gross sales, less credits resulting from
cancellations. Financial terms for roll-out of the
New Services will be [ Confidential treatment requested ].
e. In addition to the two New Services set forth
above, CBSD will allow SafeCard to do a test
regarding SafeCard's PAWS pet savings program if
and when CBSD's agreement with the service provider
for the competitive program CBSD is testing allows
CBSD to test with SafeCard.
5. Regarding Choice Cardholders: SafeCard has heretofore
offered a service similar to the Program under SafeCard's trade
name, Hot-Line Credit Card Protection, to Citibank's Choice
Cardholders pursuant to an agreement dated December 12, 1990, which
agreement has been terminated. Future marketing to, and servicing
of renewals of, Choice Cardholders will henceforth be governed by
the Agreement, using for renewals of currently-existing members and
new member solicitations either the Hot-Line name of (if the
parties so agree) the Protection Plus name.
On the Reconciliation Statement set forth in Section 3.2
of the Agreement, SafeCard will include five additional categories
of Participating Cardholders, those who are Choice Cardholders.
These additional categories will represent Choice Cardholders who
became Participating Cardholders on a one-year membership basis
prior to the date hereof via mail solicitations and via
telemarketing solicitations (Categories J and K respectively);
Choice Cardholders who became Participating Cardholders on a three-
year membership basis prior to the date hereof via mail
solicitations and via telemarketing solicitations (Categories L and
M respectively); and Choice Cardholders who become Participating
Cardholders on or after the date hereof (Category N).
All of the provisions of subsection 3.2(b) will apply to
said additional Categories J, K, and L and the sum of each of said
Categories as determined pursuant to subsection 3.2(b) will be
multiplied by the following percentages:
Category J [ Confidential treatment requested ]
Category K [ Confidential treatment requested ]
Category L [ Confidential treatment requested ]
Category M [ Confidential treatment requested ]
Category N [ Confidential treatment requested ]
6. SafeCard has proposed certain new business opportunities
to Citicorp Retail Services, Inc. ("CRS"). CBSD agrees to
encourage CRS to work with SafeCard and not to impede SafeCard's
efforts to convince CRS to do so.
7. Protection Plus Pricing. Participating Cardholders in
Protection Plus currently pay a fee of $15 for one year memberships
and $39 for three year memberships.
[ Confidential treatment requested ]
8. In the event of contradiction(s) between any provision(s)
of this Third Amendment and those of the Agreement (as previously
amended), then this Third Amendment will govern.
Except as set forth herein, the Agreement will remain in
full force and effect as currently written.
CITIBANK (SOUTH DAKOTA), N.A. SAFECARD SERVICES, INC.
By: /s/ Ronald F. Williamson By: /s/ WM Stalcup, Jr.
------------------------- ---------------------
Name: Ronald F. Williamson Name: WM Stalcup, Jr.
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Title: President and CEO Title: President
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Date: August 30, 1993 Date: August 25, 1993
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