<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
JANUARY 28, 2000 (JANUARY 14, 2000)
PEROT SYSTEMS CORPORATION
-------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-22495 75-2230700
- ------------------------------- ------------------------ -------------------
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (IRS EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
12404 PARK CENTRAL DRIVE
DALLAS, TEXAS 75251
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(972) 340-5000
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 14, 2000, Perot Systems Corporation (the "Registrant")
completed the sale of its 40% minority equity interest in a Switzerland-based
systems and software development company, Systor AG ("Systor") to UBS Capital
B.V., a wholly owned subsidiary of UBS AG ("UBS"). UBS was the holder of the
remaining 60% interest in Systor. The transaction was effected as a sale of all
stock in Systor held by the Registrant to UBS Capital B.V. for a cash purchase
price of US$ 55,485,798. The purchase price was the result of negotiations
between the Registrant and UBS.
UBS is the Registrant's largest customer. Approximately 27.3% and 27.2%
of the Registrant's revenues were earned in connection with services performed
on behalf of UBS and its affiliates for the years ended December 31, 1998 and
1997, respectively. UBS is, as of December 31, 1999, also the beneficial owner
of 2,428,403 shares of the Registrant's Class B Common Stock (includes shares
and options that are exercisable within 60 days of such date).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information
The following pro forma condensed consolidated data of the Registrant
presents the sale by the Registrant of its 40% interest in Systor (the
"Transaction"). The unaudited pro forma condensed consolidated
statements of operations have been presented as if the Transaction had
occurred at the beginning of each period and the unaudited condensed
consolidated balance sheet as of September 30, 1999 has been presented
as if the Transaction had occurred on September 30, 1999.
2
<PAGE> 3
PEROT SYSTEMS CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(SHARES AND DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments
December 31, 1998 for Disposition Pro Forma
----------------- ----------------- -----------------
<S> <C> <C> <C>
Revenue ............................................... $ 993,589 $ -- $ 993,589
Costs and expenses:
Direct cost of services .......................... 787,877 -- 787,877
Selling, general and administrative expenses ..... 140,262 -- 140,262
Goodwill impairment .............................. 4,135 -- 4,135
----------------- ----------------- -----------------
Operating income ...................................... 61,315 -- 61,315
Interest income ....................................... 4,471 -- 4,471
Interest expense ...................................... (245) -- (245)
Equity in earnings of unconsolidated affiliates ....... 7,933 (5,050)(a) 2,883
Other income (expense), net ........................... 2,732 -- 2,732
----------------- ----------------- -----------------
Income before taxes ................................... 76,206 (5,050) 71,156
Provision for income taxes ............................ 35,741 (2,332)(b) 33,409
----------------- ----------------- -----------------
Net income ....................................... $ 40,465 $ (2,718) $ 37,747
================= ================= =================
Basic and diluted earnings per common share:
Basic earnings per common share .................. $ 0.53 $ 0.49
Weighted average common shares outstanding ....... 76,882 76,882
Diluted earnings per common share ................ $ 0.42 $ 0.39
Weighted average diluted common shares
outstanding ...................................... 97,142 97,142
</TABLE>
(a) Represents the elimination of earnings in Systor reflected in each
respective historical income statement.
(b) Represents the elimination of the taxes related to the earnings in
Systor for each respective historical income statement.
Note: The gain (net of tax) on the Transaction has not been reflected in the
foregoing pro forma presentations.
3
<PAGE> 4
PEROT SYSTEMS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(SHARES AND DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Historical Pro Forma
Nine Months Ended Adjustments
September 30, 1999 for Disposition Pro Forma
------------------ ------------------ ------------------
<S> <C> <C> <C>
Revenue ............................................... $ 861,412 $ -- $ 861,412
Costs and expenses:
Direct cost of services .......................... 660,516 -- 660,516
Selling, general and administrative expenses ..... 125,361 -- 125,361
------------------ ------------------ ------------------
Operating income ................................. 75,535 -- 75,535
Interest income ....................................... 7,743 -- 7,743
Interest expense ...................................... (439) -- (439)
Equity in earnings of unconsolidated affiliates ....... 6,413 (2,533)(a) 3,880
Other income (expense), net ........................... (541) -- (541)
------------------ ------------------ ------------------
Income before taxes ................................... 88,711 (2,533) 86,178
Provision for income taxes ............................ 35,484 (1,013)(b) 34,471
------------------ ------------------ ------------------
Net income ....................................... $ 53,227 $ (1,520) $ 51,707
================== ================== ==================
Basic and diluted earnings per common share:
Basic earnings per common share .................. $ 0.61 $ 0.59
Weighted average common shares outstanding ....... 87,042 87,042
Diluted earnings per common share ................ $ 0.47 $ 0.46
Weighted average diluted common shares
outstanding ...................................... 112,762 112,762
</TABLE>
(a) Represents the elimination of earnings in Systor reflected in each
respective historical income statement.
(b) Represents the elimination of the taxes related to the earnings in
Systor for each respective historical income statement.
Note: The gain (net of tax) on the Transaction has not been reflected in the
foregoing pro forma presentations.
4
<PAGE> 5
PEROT SYSTEMS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET AS OF SEPTEMBER 30, 1999
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
Pro Forma
Historical Adjustments
September 30 1999 for Disposition Pro Forma
----------------- ----------------- -----------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents ............................... $ 263,215 $ 55,486(a) $ 318,701
Accounts receivable, net ................................ 172,978 -- 172,978
Prepaid expenses and other .............................. 59,574 -- 59,574
----------------- ----------------- -----------------
Total current assets ................................ 495,767 55,486 551,253
Investments in and advances to unconsolidated companies .... 48,872 (13,967)(b) 34,905
Property, equipment and purchased software, net ............ 35,322 -- 35,322
Other assets ............................................... 11,998 -- 11,998
----------------- ----------------- -----------------
Total assets ........................................ $ 591,959 $ 41,519 $ 633,478
================= ================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Account payable ......................................... $ 45,429 $ -- $ 45,429
Accrued liabilities ..................................... 121,137 -- 121,137
Accrued compensation .................................... 43,366 -- 43,366
Other current liabilities ............................... 19,076 16,608(c) 35,684
----------------- ----------------- -----------------
Total current liabilities ........................... 229,008 16,608 245,616
Other long-term liabilities ................................ 6,361 -- 6,361
----------------- ----------------- -----------------
Total liabilities ................................... 235,369 16,608 251,977
----------------- ----------------- -----------------
Stockholders' equity:
Total stockholders' equity .......................... 356,590 24,911(d) 381,501
----------------- ----------------- -----------------
Total liabilities and stockholders' equity .......... $ 591,959 $ 41,519 $ 633,478
================= ================= =================
</TABLE>
(a) Represents the cash which will be received by the Registrant in the
Transaction.
(b) Represents the elimination of the investment in Systor AG as of
September 30, 1999.
(c) Represents the taxes payable which will be due upon the sale of the
Registrant's investment in Systor AG. Taxes payable are calculated as
the sales price less the investment times the effective tax rate of 40%.
(d) Represents the gain on the sale of Systor AG net of taxes to be paid.
5
<PAGE> 6
(c) Exhibits
2.1 Share Purchase Agreement dated January 14, 2000 between Perot
Systems Corporation and UBS Capital B.V.
6
<PAGE> 7
SIGNATURES
Pursuant to the requirements 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.
Dated: January 28, 2000 PEROT SYSTEMS CORPORATION
By: /s/ TERRY ASHWILL
--------------------------------
Terry Ashwill
Vice President and Chief
Financial Officer
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------
<S> <C>
2.1 Share Purchase Agreement dated January 14, 2000 between Perot
Systems Corporation and UBS Capital B.V.
</TABLE>
<PAGE> 1
EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
(the "AGREEMENT")
between
Perot Systems Corporation
12404 Park Central Drive
Dallas, TX 75251
USA
hereinafter the "SELLER"
and
UBS Capital B.V.
Parkweg 2
2585 JJ The Hague
The Netherlands
hereinafter the "PURCHASER"
regarding
Systor AG
hereinafter the "COMPANY"
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
Article I - Purchase and Sale of Shares........................................................................
I.1 PURCHASE AND SALE............................................................................
I.2 PURCHASE PRICE...............................................................................
I.3 PURCHASE PRICE PAYMENT.......................................................................
Article II - Closing...........................................................................................
II.1 PLACE AND DATE...............................................................................
II.2 CLOSING DOCUMENTS............................................................................
Article III - Representations and Warranties...................................................................
III.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER..................................................
(a) Organization of Purchaser...............................................................
(b) Authority...............................................................................
III.2 REPRESENTATIONS AND WARRANTIES OF SELLER.....................................................
(a) Organization............................................................................
(b) Authority...............................................................................
(c) Ownership of Sale Shares................................................................
Article IV - Covenant..........................................................................................
IV.1 RELEASE FROM DIRECTORS LIABILITY.............................................................
Article V - Miscellaneous......................................................................................
V.1 NOTICES......................................................................................
V.2 ENTIRE AGREEMENT.............................................................................
V.3 EXCLUSIVE REMEDY.............................................................................
V.4 SEVERABILITY OF PROVISIONS...................................................................
V.5 BINDING EFFECT, BENEFIT......................................................................
V.6 ASSIGNABILITY................................................................................
V.7 AMENDMENT AND MODIFICATION; WAIVER...........................................................
V.8 ANNOUNCEMENTS................................................................................
V.9 CONFIDENTIALITY..............................................................................
V.10 ADVISER'S FEES; EXPENSES.....................................................................
V.11 APPLICABLE LAW...............................................................................
V.12 ARBITRATION..................................................................................
</TABLE>
i
<PAGE> 3
WHEREAS the Company is a company incorporated in Switzerland, having its
registered office at Baslerstrasse 60, 8048 Zurich, Switzerland; and
WHEREAS the Company has a fully paid-up share capital of CHF 5'000'000.- (Swiss
francs five million), divided into 500'000 registered shares with a par value of
CHF 10.- (Swiss francs ten) each; and
WHEREAS the Seller is currently the owner of 200'000 registered shares of the
Company (hereinafter the "SALE SHARES"); and
WHEREAS the Seller desires to sell the Sale Shares and in reliance upon the
representations, warranties and undertakings set out in this Agreement, the
Purchaser desires to purchase the Sale Shares on the terms and conditions set
out in this Agreement;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I - PURCHASE AND SALE OF SHARES
I.1 PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, Seller agrees to sell to
Purchaser and Purchaser agrees to purchase from Seller good and valid title to
the Sale Shares, all free and clear of all liens, charges and encumbrances.
I.2 PURCHASE PRICE
The purchase price for the Sale Shares is USD 55'485'798.--(United States Dollar
fifty five million four hundred eighty five thousand seven hundred ninety eight)
plus accrued interest at an interest rate of 8% p.a., calculated on the basis of
a 360 days year since December 23, 1999 until and including the Closing Date
(hereinafter the "PURCHASE PRICE").
I.3 PURCHASE PRICE PAYMENT
At Closing, Purchaser shall pay to the Seller by wire transfer of immediately
available funds to account No 9102-783595, in the name of Brinson Relationship
Funds, sub-account No 405610, in the name of the Seller, with Chase Manhattan
Bank, New York, NY, USA (ABA: 021000021) an amount equal to the Purchase Price.
ARTICLE II - CLOSING
II.1 PLACE AND DATE
The closing of the transaction contemplated herein (hereinafter the "CLOSING")
takes place simultaneously with the execution of this Agreement at the offices
of Lenz & Staehelin, Zurich, on the date written on the signatory page of this
Agreement (hereinafter the "CLOSING DATE").
<PAGE> 4
II.2 CLOSING DOCUMENTS
II.2.1 Upon Closing, Seller shall deliver to Purchaser:
(a) the certificates representing the Sale Shares duly endorsed in blank;
(b) letters of resignation from all Seller's representatives on the board
of directors of the Company, each effective as of the Closing Date
containing a statement of the resigning director that he has been fully
compensated for his services rendered to the Company and a mutual
statement of both the Company and the resigning director that, as of
the date and subject to the provision of Article IV.1 hereof, none of
them has a claim of whatever nature against the other.
II.2.2 Upon Closing, Purchaser shall deliver to Seller:
(a) evidence of payment of the Purchase Price.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
Each party hereby makes the representations and warranties contained in this
Article III to the other party, each of which is true and correct as of the
Closing Date.
The parties do not make any representations nor give any warranties other than
the representations and warranties contained in this Article III. The parties
exclude any and all other representations and warranties.
III.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
Organization of Purchaser
The Purchaser is duly organized and validly existing under the laws of
The Netherlands.
Authority
This Agreement has been duly authorized and validly executed and
delivered by the Purchaser, and is valid and enforceable against the
Purchaser in accordance with its terms; the Purchaser has full power
and authority to enter into this Agreement and to carry out the
transactions contemplated by this Agreement.
The execution of this Agreement by the Purchaser does not violate the
Purchaser's articles of association or internal regulations, any
agreement to which it is a signatory or any governmental law,
regulation, order or judgement to which it is subject.
<PAGE> 5
III.2 REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller makes the following representations and warranties to Purchaser:
(a) Organization
The Seller is duly organized and validly existing under the laws of
Delaware, USA.
(b) Authority
This Agreement has been duly authorized and validly executed and
delivered by the Seller, and is valid and enforceable against the
Seller in accordance with its terms; the Seller has full power and
authority to enter into this Agreement and to carry out the
transactions contemplated by this Agreement.
The execution of this Agreement by the Seller does not violate the
Seller's certificate of incorporation or by-laws, any agreement to
which it is a signatory or any governmental law, regulation, order or
judgement to which it is subject.
(c) Ownership of Sale Shares
Seller holds, and upon Closing Purchaser receives, good and valid title
to the Sale Shares. The Sale Shares are free and clear of all
encumbrances, mortgages, charges, liens, security interests or any
other right of any third party.
ARTICLE IV - COVENANT
IV.1 RELEASE FROM DIRECTORS LIABILITY
The Purchaser and UBS AG hereby undertake in their capacity as shareholders of
the Company to release the Seller's representatives on the board of directors of
the Company from their directors' liability ("Erteilen der Decharge") at the
next ordinary shareholders' meeting of the Company.
ARTICLE V - MISCELLANEOUS
V.1 NOTICES
All notices, requests, demands, waivers and other communications (together
"NOTICES"), required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been duly given if sent by registered mail
or by telefax with a confirmation by registered mail, as follows:
<PAGE> 6
a. if to the Seller, to:
James A. Champy
Perot System Corporation
101 Main Street, 11th floor
Cambridge, MA 02142
USA
Tel. 001 617 303 5001
Fax 001 617 303 5085
with a copy to:
Peter A. Altabef
Perot Systems Corporation
12404 Park Central Drive
Dallas, TX 75251
USA
Tel. 001 972 340 6692
Fax 001 972 340 6085
b. if to the Purchaser, to:
Marteen Frech
UBS Capital B.V.
Parkweg 2
2585 JJ The Hague
Tel. 0031 70 358 8612
Fax 0031 70 358 9507
c. if to UBS AG, to:
Derek Smith
UBS AG
Bahnhofstrasse 45
8098 Zurich
Tel. 0041 1 234 23 92
Fax 0041 1 234 20 23
in the event of a notice to b. or c. above,
with a copy to:
Robert Kahn
UBS Capital
100 Liverpool Street London, EC2 M2RH
Tel. 0044 171 568 7003
Fax 0044 171 568 7023
<PAGE> 7
or to such other substitute person or address as any party shall from time to
time specify by notice in writing to the other parties.
Notices and communications made by fax shall be deemed to be received on the
date of dispatch provided that an answer-back confirmation is available,
irrespective of the date of receipt of the confirmation by registered mail.
Notices given by registered mail only are deemed to be received upon delivery to
the addressee.
V.2 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto and
supersedes all prior agreements and undertakings, oral or written, between the
parties hereto with respect to the subject matter hereof. In particular, the
parties hereto, by signing this Agreement, explicitly agree that the stock
purchase agreement between the UBS AG and the Seller, dated January 1, 1996, and
the amendment agreement between the Seller and UBS AG, dated April 24, 1997
(hereinafter the "AGREEMENTS"), are hereby terminated as of the Closing Date and
that the parties hereto shall have no claim of whatever nature against each
other on the basis of the Agreements.
V.3 EXCLUSIVE REMEDY
The sole and exclusive remedy of any party for any misrepresentation or any
breach of a warranty or covenant set forth in or made pursuant to this Agreement
shall be a claim for indemnification. Other legal remedies, in particular the
right to rescind the Agreement pursuant to Art. 205 of the Swiss Code of
Obligations, are expressly excluded.
V.4 SEVERABILITY OF PROVISIONS
If any term or provision of this Agreement or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement and the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and be enforceable to the fullest extent permitted
by law.
V.5 BINDING EFFECT, BENEFIT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors, heirs and assigns. Nothing in this
Agreement, express or implied, is intended to confer on any person other than
the parties hereto or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
V.6 ASSIGNABILITY
This Agreement shall not be assigned by any party hereto without the prior
written consent of the other parties hereto, provided, however, that the parties
may assign,
<PAGE> 8
without the other party's prior consent, all its rights under the Agreement to
any corporate entity of their respective group to which they belong.
V.7 AMENDMENT AND MODIFICATION; WAIVER
This Agreement may be amended or modified by a written instrument duly executed
by the Purchaser and the Seller at any time with respect to any of the terms
contained herein. No waiver by any party of any provision hereof shall be
effective unless explicitly set forth in writing and executed by the party so
waiving. Except as provided in the preceding sentence, no action taken pursuant
to this Agreement, including, without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver by the party taking
such action of compliance with any representations, warranties, covenants, or
agreements contained herein, and in any documents delivered or to be delivered
pursuant to this Agreement and in connection with the Closing hereunder. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other or subsequent breach or a
waiver of any other provision of this Agreement.
V.8 ANNOUNCEMENTS
No announcement concerning this sale and purchase will be made on or after
Closing by any party to this Agreement except as appropriate under applicable
law or with respect to any competent regulatory authority or with the written
approval of the other party hereto (such approval not to be unreasonably
withheld or delayed).
V.9 CONFIDENTIALITY
The parties agree to keep the terms of this Agreement and any information
acquired during the course of the negotiations having led to this Agreement
strictly confidential, except as required by applicable law.
V.10 ADVISER'S FEES; EXPENSES
Except as otherwise specifically provided in this Agreement, each of the parties
shall bear its own fees and costs incident to this Agreement and the
transactions contemplated hereby, including those of its financial, technical,
legal and other advisers.
V.11 APPLICABLE LAW
This Agreement and the legal relations between the parties hereto shall be
governed by and construed in accordance with the laws of Switzerland.
V.12 ARBITRATION
(a) All disputes arising out of or in connection with the present Agreement
that cannot be settled by mutual agreement shall be finally settled by
arbitration to the exclusion of the ordinary courts, by a three-person
arbitral tribunal (the "ARBITRAL TRIBUNAL").
<PAGE> 9
(b) In the event of such dispute, the Seller shall jointly appoint one
arbitrator and the Purchaser, jointly with UBS AG, as the case may be,
one arbitrator, and the so-appointed arbitrators shall jointly appoint
a third arbitrator who shall act as the president of the Arbitral
Tribunal (the "PRESIDENT"). Should either party fail to appoint its
arbitrator within thirty days from the date of appointment of the other
party's arbitrator, or, if the two appointed arbitrators cannot agree
on the President within fifteen days from the date of appointment of
the second arbitrator, the necessary appointment shall be made by the
President of the Zurich Chamber of Commerce at the request of one or
both parties. Such appointment shall be final and binding on the
parties hereto. The Arbitral Tribunal shall have its seat in Zurich and
the arbitration proceedings, including arguments and briefs, shall be
conducted in English. The rules of arbitration of the Zurich Chamber of
Commerce shall be applicable.
(c) The parties hereby waive the filing of the award with the competent
judicial authority. The award shall be delivered to the parties by the
Arbitral Tribunal.
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date written below.
Perot Systems Corporation
/s/ James A. Champy
- ---------------------------
Date: 1/14/2000
Name: James A. Champy
Title: Vice President
UBS CAPITAL B.V.
/s/ A. Rotheli
- ------------------------------ ---------------------------------------
Date: 19/1/00 Date:
Name: A. Rotheli Name:
Title: Attorney Title:
For purposes of Articles IV.1 and V only:
UBS AG
/s/ D.K. Smith /s/ Erwin Staub
- ------------------------------ ---------------------------------------
Date: 16/1/2000 Date: 14-1-2000
Name: D.K. Smith Name: Erwin Staub
Title: Executive Director Title: Director
