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) March 24, 1995
Audits & Surveys Worldwide, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State of Other Jurisdiction of Incorporation)
1-7675 57-0486003
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(Commission File Number) (I.R.S. Employer Identification No.)
650 Avenue of the Americas, New York, NY 10011
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(Address of Principal Executive Offices) (Zip Code)
212 627-9700
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(Registrant's Telephone Number, Including Area Code)
The Triangle Corporation/62 Southfield Ave/Stamford, CT 06902
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(Former Name or Former Address, if Changed Since Last Report)
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Item 1. Changes in Control of Registrant.
Pursuant to the consummation of the Merger (as defined and discussed in
Item 2 below, which discussion is incorporated into this Item 1 by this
reference), on March 24, 1995, a change in control of the Registrant occurred.
Prior to the consummation of the Merger, the following parties (other than H.
Arthur Bellows, Jr. whose beneficial ownership is disclosed in the immediately
following table) owned beneficially more than 5% of the outstanding common stock
of Triangle (as defined in Item 2 below) as of March 1, 1995:
Name and Address No. of Percent
of Beneficial Owner Shares of Class
------------------- ------- --------
Rothenberger Group ............. 351,841 13.43%
c/o Helmut Rothenberger
Industriestrasse 7
D-6233 Kelkheim, GERMANY
Marvin C. Schwartz ............. 193,700 7.40%
c/o Neuberger & Berman
605 Third Avenue
New York, NY 10158
Dimensional Fund Advisors, Inc . 157,537(1) 6.02%
1299 Ocean Avenue, Suite 650
Santa Monica, CA 90401
--------------------
(1) Triangle has been advised by Dimensional Fund Advisors, Inc.
("Dimensional") that Dimensional is a registered investment advisor and is
deemed to have beneficial ownership of 157,537 shares of Triangle's common
stock as of January 31, 1995, all of which shares are held in portfolios of
DFA Investment Dimensions Group Inc., a registered open-end investment
company, or in a series of the DFA Investment Trust Company, a Delaware
business trust, or the DFA Group Trust and DFA Participating Group Trust,
investment vehicles for qualified employee benefit plans, for all of which
Dimensional serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
--------------------
The following table sets forth, as of February 28, 1995, the number of
shares of Triangle's outstanding common stock beneficially owned by each of the
directors and named executive officers of Triangle immediately prior to the
Merger, individually, and by all such directors and executive officers as a
group without naming them.
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Name and Address No. of Percent
of Beneficial Owner Shares Owned(1) of Class
------------------- --------------- ---------
H. Arthur Bellows, Jr ...................... 674,153(2) 25.45%
Charles E. Bradley ......................... 16,714(3) *
Thomas P. Howes ........................... 9,108 *
William A. Zebedee ......................... 7,837 *
Alan J. Ritter ............................. 8,470(3) *
All Directors and executive officers
as a group (5 persons) ................... 716,282(2)(3) 26.81%
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* Represents less than 1% of the class.
(1) Includes currently exercisable options to purchase common stock as follows:
Mr. Bellows - 30,250; Mr. Bradley - 8,745; Mr. Howes - 5,115; Mr. Zebedee -
6,930; Mr. Ritter - 1,210; all Directors and executive officers as a group
- 52,250.
(2) Includes 76,200 shares owned by Mr. Bellows' wife and children, as to which
shares Mr. Bellows disclaims beneficial ownership.
(3) Includes 2,656 shares owned by Mr. Bradley's wife and 7,260 shares owned by
the children of Mr. Ritter, as to which shares such director and such
officer disclaim beneficial ownership.
--------------------
The following table sets forth certain information regarding the ownership
of the Registrant's common stock as of the date hereof, giving effect to the
Merger, for: (a) each shareholder of A&S (as defined in Item 2 below) who became
the beneficial owner of at least 5% of the Registrant's common stock by virtue
of the Merger; (b) each stockholder of Triangle who is the beneficial owner of
at least 5% of the Registrant's common stock subsequent to the consummation of
the Merger; (c) each executive officer and director of the Registrant subsequent
to the Merger; and (d) all such executive officers and directors as a group:
Number of Registrant's
Name of Shares Beneficially Percentage
Beneficial Owner Owned of Total
---------------- ---------------------- ----------
Solomon Dutka(1) ................ 5,689,444(2) 43.45%
Carl Ravitch(1) ................. 1,526,713 11.66%
Estate of Irving Roshwalb ....... 813,664 6.21%
H. Arthur Bellows, Jr.(1) ....... 643,903 4.91%
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Number of Registrant's
Name of Shares Beneficially Percentage
Beneficial Owner Owned of Total
---------------- ---------------------- ----------
Anthony Timiraos(1) ............... 479,980 3.67%
Charles E. Bradley(3) ............. 7,969 *
William A. Zebedee(3) ............. 907 *
Sol Young(3) ...................... 0 *
William Newman(3) ................. 0 *
Robert C. Miller(3) ............... 0 *
Matthew Goldstein(3) .............. 0 *
Ira C. Herbert(3) ................. 0 *
All executive officers and
directors of the Registrant
after the consummation of
the Merger (11 persons) ....... 8,348,916 63.76%
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(1) Executive Officer and Director.
(2) Includes an aggregate of 844,539 shares of the Registrant's common stock
held in three trusts for the benefit of Dr. Dutka's family, as to which
shares Dr. Dutka disclaims beneficial ownership.
(3) Director.
* Represents less than 1% of class.
--------------------
Therefore, the consummation of the Merger resulted in a change in control of the
Registrant from the Registrant's pre-Merger shareholders to Mr. Solomon Dutka
and the other shareholders of A&S.
Prior to the consummation of the Merger, H. Arthur Bellows, Jr., the
Chairman, President, Chief Executive Officer and a director of Triangle, was
party to an employment agreement with Triangle containing severance arrangements
which, by virtue of prior events, entitled Mr. Bellows, at any time prior to the
termination of such agreement, at his sole and absolute discretion, to terminate
said employment agreement and to receive from Triangle a lump sum payment of
$915,000, equal to three times Mr. Bellows's annual salary of $305,000, plus a
continuation of all insurance coverages for three years from the date of such
termination. It was estimated that such insurance benefits would cost Triangle
approximately $75,000, making the total cost to Triangle of Mr. Bellows's
election to terminate his employment contract approximately $990,000. Upon the
consummation of the Merger (the "Effective Time"), (i) in lieu of receiving the
approximately $990,000 of severance payments to which he was entitled, Mr.
Bellows allowed Triangle to terminate his existing employment
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agreement and, in full satisfaction of the $990,000 obligation, pay Mr. Bellows
only $545,000 in cash, (ii) Mr. Bellows used a portion of this amount to repay
Triangle the $145,000 that Mr. Bellows had theretofore borrowed from Triangle,
(iii) Mr. Bellows additionally waived his right to receive supplemental
retirement benefits that Triangle had already agreed to provide him (the present
value of the cost thereof to Triangle would have been approximately $125,000),
and (iv) Mr. Bellows entered into the new employment agreement described in the
immediately following paragraph and the Stockholders Agreement described below
(pursuant to which Mr. Bellows would agree, subject to certain exceptions, not
to sell any of his shares of the Registrant's common stock for two years).
At the Effective Time, Mr. Bellows entered into a new employment agreement
with the Registrant whereby Mr. Bellows became employed as the Registrant's
President and Chief Operating Officer, and as a director of the Registrant, for
a three-year term commencing March 24, 1995. Pursuant to such agreement, Mr.
Bellows will receive a salary of $300,000 in return for his services, as well as
such bonuses as may be determined from time to time by the Board of Directors of
the Registrant and such insurance, disability, health and medical benefits, and
such other miscellaneous benefits, as the Registrant makes generally available
to its executives. If, during the term of Mr. Bellows's employment agreement,
the Registrant terminates his employment without cause, or if Mr. Bellows
terminates his employment agreement for Good Reason (as such term is defined in
Mr. Bellows's previous employment agreement), Mr. Bellows would be entitled to
continue to receive a continuation of his salary and benefits for the longer of
(i) one full year or (ii) the remaining term of his employment agreement,
subject to reduction by the amount of any compensation earned by Mr. Bellows
during the one year period after the effective date of his termination by virtue
of Mr. Bellows being hired on a full-time basis by another employer or by virtue
of his being self-employed on a full-time basis. In addition, Mr. Bellows has
agreed not to compete with the Registrant during the term of his employment
agreement and for a period of one year thereafter, and not to solicit or induce
any creditor, customer, client, supplier, officer, employee or agent of the
Registrant or any of its subsidiaries or affiliates to sever his or its
relationship with or leave the employ of any of such entities.
At the Effective Time, the Registrant entered into employment agreements
with Solomon Dutka, A&S's Chairman and Chief Executive Officer, Carl Ravitch,
A&S's Executive Vice President and Chief Marketing Officer, and Anthony
Timiraos, A&S's Executive Vice President, Chief Financial Officer, Secretary and
Treasurer, pursuant to which each of such individuals will be retained as
executive employees of the Registrant. The employment agreement with Dr. Dutka
provides that Dr. Dutka will be employed for a five-year term at a salary of
$350,000 per annum, as well as such bonuses as may be determined from time to
time by the Board of
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Directors of the Registrant, and such insurance, disability, health and medical
benefits, and such other miscellaneous benefits, as the Registrant makes
generally available to its executive employees. At any time after the third
anniversary of the Effective Time, Dr. Dutka may elect to terminate his status
as a full-time employee of the Registrant and become a consultant to the
Registrant for the balance of the term of his employment agreement. In such
event, Dr. Dutka would receive a consulting fee for his services in an amount
equal to $175,000 per annum. The Registrant's employment agreements with Messrs.
Ravitch and Timiraos will provide for such individuals to be employed for
three-year terms at salaries of $250,000 and $195,000 per annum, respectively,
as well as in each case such bonuses as may be determined from time to time by
the Board of Directors of the Registrant and such insurance, disability, health
and medical benefits, and such other miscellaneous benefits, as the Registrant
generally makes available to its executive employees. Subject to certain limited
exceptions, during the term of the employment agreements and for three years
thereafter, Dr. Dutka and Messrs. Ravitch and Timiraos have agreed not to
solicit or induce any creditor, customer, client, supplier, officer, employee or
agent of the Registrant or any of its subsidiaries or affiliates to sever his or
its relationship with, or leave the employ of such entities.
Pursuant to the Merger Agreement, at the Effective Time the Registrant
purchased and retired all 52,250 then-outstanding options to purchase the
Registrant's common stock in return for cash consideration of $0.50 per option.
All of such options were held by Triangle's directors and executive officers and
had exercise prices ranging from a low of $7.14 per share to a high of $9.23 per
share.
Pursuant to the terms of a "Stockholders Agreement" entered into at the
Effective Time by Mr. Bellows and each of A&S's shareholders, Mr. Bellows and
each A&S shareholder agreed not to sell any of the Registrant's common stock
during the period commencing at the Effective Time and continuing for two years
thereafter, except for sales made by Dr. Dutka, the Estate of Irving Roshwalb
and Mr. Bellows pursuant to the Registration Rights Agreement (as described in
the immediately following paragraph), and except that such restrictions would
terminate (except for the Estate of Irving Roshwalb) in the event that such
shareholder's employment with the Registrant is terminated by the Registrant
without cause or by virtue of the shareholder's death or disability (or, in the
case of Mr. Bellows, for any reason whatsoever). The termination of the
restrictions on sale of the Registrant's common stock set forth in the
Stockholders Agreement would not, however, allow such shareholder to sell any
shares of the Registrant's common stock without complying with the requirements
of the Securities Act of 1933, as amended (the "Securities Act") and applicable
state securities and blue sky laws. The Stockholders Agreement also requires
A&S's current shareholders to vote their
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shares of the Registrant's common stock (i) for the election of Mr. Bellows to
the Registrant's Board of Directors for so long as Mr. Bellows remains an
employee of the Registrant, and (ii) at the Registrant's 1995 and 1996 Annual
Meeting of Stockholders, for the election to the Registrant's Board of Directors
of three nominees of Mr. Bellows (including Mr. Bellows pursuant to clause (i)
above) or, if Mr. Bellows is deceased while the provisions of this clause remain
operative, nominees of the directors previously nominated by Mr. Bellows.
Dr. Dutka, Mr. Bellows and the Estate of Irving Roshwalb also entered into
a "Registration Rights Agreement" pursuant to which Dr. Dutka will have the
right to require the Registrant to effect one registration under the Securities
Act for not less than 900,000 and not more than 3,250,000 shares of the
Registrant's common stock. Until the second anniversary of the Effective Time or
his earlier termination without cause, Dr. Dutka's registration rights will be
limited to 20% of the shares of the Registrant's Common Stock owned by Dr. Dutka
at the Effective Time. In the event of such a demand, Mr. Bellows and the Estate
of Irving Roshwalb would have the right to "piggy-back" on this registration,
subject to underwriters' cutbacks and, in the case of Mr. Bellows, that Mr.
Bellows would only be able to include in such a registration up to 20% of the
shares of the Registrant's common stock owned by him at the Effective Time until
the second anniversary of the Merger or his earlier termination without cause.
Item 2. Acquisition or Disposition of Assets.
On March 24, 1995, Audits and Surveys, Inc., a New York corporation
("A&S"), was merged with and into the Registrant, f/k/a The Triangle
Corporation, a Delaware corporation ("Triangle"), such that Triangle was the
surviving corporation of such merger (the "Merger") and the separate corporate
existence of A&S was terminated. At the time of the Merger, the name of the
Registrant was changed to "Audits & Surveys Worldwide, Inc."
As a result of the consummation of the Merger, the Registrant acquired all
of the assets and liabilities of A&S in return for the issuance to A&S's
stockholders of 10,475,804 shares of the Registrant's common stock. The shares
of the Registrant's common stock issued to A&S's stockholders at the time of the
Merger constitute 80% of the Registrant's common stock now issued and
outstanding, and the 2,618,951 shares of the Registrant's common stock which
constituted all of the Registrant's issued and outstanding common stock prior to
the consummation of the Merger now constitute 20% of the shares of the
Registrant's common stock issued and outstanding. The Registrant did not pay any
cash or other consideration, other than the issuance of its shares of common
stock, to A&S's stockholders as consideration for the Merger.
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Prior to the consummation of the Merger, no material relationship existed
between Triangle and its officers, directors or other affiliates and/or
associates, on the one hand, and A&S and its officers, directors or other
affiliates and/or associates, on the other. The number of shares of the
Registrant's common stock received by the former stockholders of A&S as a result
of the Merger was determined by arms-length bargaining. Each former shareholder
of A&S received 1407.565 shares of the Registrant's common stock for each share
of A&S's common stock theretofore owned by them.
The assets acquired by Triangle pursuant to the Merger with A&S include (as
of December 31, 1994) approximately $9.4 million of accounts receivable, $1.9
million of other current assets (principally prepaid expenses and deferred
charges and cash and cash equivalents), $2.5 million of property, plant and
equipment, and $2.6 million of other noncurrent assets. While, for accounting
and financial reporting purposes, the Merger will be treated as a purchase, with
A&S being deemed to be the acquiring party and Triangle being deemed to be the
acquired party and no goodwill will be recorded on the Registrant's financial
statements as a result of the Merger, to the extent that Triangle is viewed as
the acquiror (which, as a matter of corporate and securities laws, is in fact
the case) Triangle also acquired A&S's goodwill as an ongoing business concern.
A&S used these assets to conduct an international marketing research business,
providing clients with a broad selection of services and information used to
assist in the development of marketing, advertising and investment strategies
for their products and services. These marketing research services are provided
to a wide variety of major commercial, industrial, institutional and academic
organizations in over 60 countries. The Registrant intends to continue to use
the assets acquired from A&S to conduct the business of A&S.
Item 4. Changes in Registrant's Certifying Accountant.
On March 24, 1995, upon the consummation of the Merger and in connection
therewith, Price Waterhouse LLP, formerly the independent accountants for the
Registrant, was dismissed, and the certified public accounting and auditing firm
of Deloitte & Touche LLP was retained as the Registrant's independent accounting
and auditing firm for purposes of auditing the Registrant's financial
statements.
Price Waterhouse LLP was dismissed because it was determined that only one
certified public accounting firm was necessary to represent the Registrant after
the consummation of the Merger. Since Deloitte & Touche LLP had been A&S's
independent accounting and auditing firm, and A&S's constituent business now
represents the vast majority of the Registrant's business, it made more sense to
retain Deloitte & Touche LLP. The reports of Price Waterhouse LLP on the
Registrant's financial statements for each of the past
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two fiscal years did not contain an adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or accounting
principles. In connection with their audits of the Registrants' financial
statements for each of the two most recent fiscal years, Price Waterhouse LLP
and the Registrant have not had any disagreements on any matters of accounting
principles or practices, financial statement disclosure or auditing scope and
procedures which disagreements, if not resolved to the satisfaction of Price
Waterhouse LLP, would have caused Price Waterhouse LLP to make a reference to
the subject matter of the disagreements in their report. Price Waterhouse LLP
has not performed any procedures with respect to interim periods after the most
recent fiscal year end.
The Registrant has requested that Price Waterhouse LLP furnish it with a
letter addressed to the Securities and Exchange Commission stating whether or
not it agrees with the above statements. A copy of such letter, dated March 29,
1995, is filed as Exhibit 16 to this Form 8-K.
The decision to change accountants upon the consummation of the Merger was
approved by the Registrant's Board of Directors at the time that they approved
the Merger. No separate audit committee approval was obtained.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired. It is impracticable for
the Registrant to include herein the financial statements required by this Item
7(a) because Deloitte & Touche L.L.P. has not yet completed its audit with
respect to A&S's year ended December 31, 1994. Such audited financial statements
will be filed with the Commission as soon as practicable, but not later than 60
days after the date on which this Report on Form 8-K is required to be filed.
(b) Pro forma financial information. It is impracticable for the Registrant
to include herein the pro forma financial information required by this Item 7(b)
until such time as the audit described in Item 7(a) above is completed. Such pro
forma financial information will be filed on a Form 8 as soon as practicable,
but not later than 60 days after the date on which this Report on Form 8-K is
required to be filed.
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(c) Exhibits.
<TABLE>
<CAPTION>
Page Number or
Exhibit Incorporation by
Number Description Reference To
------- ----------- ----------------
<S> <C> <C>
(2)(i) Merger Agreement between The Triangle Exhibit (2)(i) to Report on Form 10-Q for the
Corporation and Audits and Surveys, Inc., quarter ended September 30, 1994
dated as of August 11, 1994
(2)(ii) Amendment No. 1, dated as of October 7, Exhibit (2)(ii) to Report on Form 10-Q for the
1994, to the Merger Agreement between The quarter ended September 30, 1994
Triangle Corporation and Audits and Surveys,
Inc.
(2)(iii) Amendment No. 2, dated as of January 6, Exhibit (2)(iii) to Report on Form 10-K for
1995, to the Merger Agreement between The the year ended December 31, 1994
Triangle Corporation and Audits and Surveys,
Inc.
(2)(iv) Amendment No. 3, dated as of January 31, Exhibit (2)(iv) to Report on Form 10-K for the
1995, to the Merger Agreement between The year ended December 31, 1994
Triangle Corporation and Audits and Surveys,
Inc.
(2)(v) Amendment No. 4, dated as of February 8, Exhibit (2)(v) to Report on Form 10-K for the
1995, to the Merger Agreement between The year ended December 31, 1994
Triangle Corporation and Audits and Surveys,
Inc.
(16) Letter from Price Waterhouse LLP, the Page 12
Registrant's independent accountants, dated
March 29, 1995, regarding their concurrence
or disagreement with the statements made by
the Registrant in Item 4 of this Form 8-K
(27) Financial Data Schedule To be filed by amendment
</TABLE>
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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 hereunto duly authorized.
Audits & Surveys Worldwide, Inc.
(Registrant)
Date: March 30, 1995 By: /s/ H. ARTHUR BELLOWS, JR.
----------------------------------
Name: H. Arthur Bellows, Jr.
Title: President
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Price Waterhouse LLP
March 29, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
The Triangle Corporation
We have read Item 4 of The Triangle Corporation's Form 8-K dated March 24, 1995
and are in agreement with the statements contained in Item 4 therein.
Yours very truly,
Price Waterhouse LLP [signature]
