UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): June 11, 1998
National Research Corporation
(Exact name of registrant as specified in its charter)
Wisconsin 0-29466 47-0634000
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1033 "O" Street, Lincoln, Nebraska 68508
(Address of principal executive offices, including zip code)
(402) 475-2525
(Registrant's telephone number)
Item 2. Acquisition or Disposition of Assets.
On June 11, 1998 (but effective for all business and accounting
purposes as of the close of business on May 31, 1998), National Research
Corporation (the "Company") acquired substantially all of the assets of
Healthcare Research Systems, Ltd., an Ohio limited liability company
("HRS"), pursuant to an Asset Purchase Agreement, dated as of June 11,
1998, by and among the Company, HRS and the members of HRS (the "Purchase
Agreement"). The Company's acquisition of the assets of HRS as well as
the consummation of the transactions related thereto is referred to herein
as the "Acquisition." To date, the Company has paid a total cash
consideration of $5,417,515 in the Acquisition and has paid or accrued
approximately $126,000 of direct acquisition costs.
Pursuant to the Purchase Agreement, except for certain excluded
assets (including cash, tax credits and records, obligations of affiliates
of HRS and organization and capitalization records), the Company acquired
all of the business, rights, claims and assets of HRS including, but not
limited to, HRS' (a) leased real property, (b) personal property, (c)
personal property leases, (d) trademarks and other intellectual property,
(e) contracts and purchase and sales orders, (f) computer software and
hardware, (g) sales and promotional literature, (h) records, files,
customer lists and other data, (i) inventories, (j) accounts receivable,
(k) licenses and permits, (l) interests in the name "Healthcare Research
Systems" and the letters "HRS" and derivatives therefrom and names similar
thereto and (m) general intangibles. The Company did not assume any
liabilities of HRS in the Acquisition except for certain specified
liabilities including (a) certain contractual obligations, (b) liabilities
under certain permits and licenses, (c) specified accounts payable, (d)
product or service warranty, rework or return liabilities and (e) a
portion of certain audit fees.
The Company acquired the assets of HRS for (i) the assumption of
the certain specified liabilities; (ii) $5,417,515 in cash at the closing
of the Acquisition; (iii) the post-closing determination of the dollar
amount by which the net current assets of HRS as of May 31, 1998 exceeded
the liabilities of HRS assumed by the Company in the Acquisition, $350,000
of which was paid to HRS at the closing of the Acquisition as an estimate
of such amount; (iv) an additional payment of up to $1,500,000 payable in
April 1999 if 1998 revenues recognized for certain accounts of HRS ("HRS
Revenues") exceed a specified level; and (v) an additional payment of
$1,500,000 payable in June 1999, subject to a potential downward
adjustment if HRS Revenues do not exceed a specified level. However, in
the event the Company does not collect all May 31, 1998 accounts
receivable and costs in excess of billings of HRS by December 31, 1998,
the Company will reduce the additional payment specified in clause (iv)
above by the dollar amount of such uncollected items. The purchase price
paid by the Company for the assets of HRS was determined on the basis of
arm's length negotiations between the parties. The Company funded the
Acquisition and paid costs associated with the Acquisition through
available cash.
In connection with the Acquisition, the Company entered into an
employment agreement (which contains noncompetition and confidentiality
provisions) with the founder and former president of HRS and
noncompetition and confidentiality agreements with certain former
employees of HRS who became employees of the Company following the
consummation of the Acquisition.
The Purchase Agreement is filed as an exhibit to this Current
Report on Form 8-K and is incorporated herein by reference. The brief
summary of the material provisions of the Purchase Agreement set forth
above is qualified in its entirety by reference to the Purchase Agreement
filed as an exhibit hereto.
Similar to the Company, HRS was engaged in the design, production,
marketing, distribution and sale of survey-based performance measurement
analysis and tracking services and products for the healthcare industry.
The Company intends to continue that business.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The required financial statements for HRS are not filed with this
Current Report on Form 8-K, but will be filed as soon as practicable and
in no event later than August 25, 1998.
(b) Pro Forma Financial Information.
The required pro forma financial information is not filed with this
Current Report on Form 8-K, but will be filed as soon as practicable and
in no event later than August 25, 1998.
(c) Exhibits.
The exhibits listed in the accompanying Exhibit Index are filed as
part of this Current Report on Form 8-K.
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.
NATIONAL RESEARCH CORPORATION
Date: June 22, 1998 By: /s/ Patrick E. Beans
Patrick E. Beans
Vice President, Treasurer, Secretary
and Chief Financial Officer
NATIONAL RESEARCH CORPORATION
EXHIBIT INDEX TO FORM 8-K
Report Dated June 11, 1998
Exhibit
No. Description
(2) Asset Purchase Agreement, dated as of June 11, 1998, by
and among National Research Corporation, Healthcare
Research Systems, Ltd., and the members of Healthcare
Research Systems, Ltd.*
__________
* The schedules and exhibits to this document are not being filed
herewith. The registrant agrees to furnish supplementally a copy
of any such schedule or exhibit to the Securities and Exchange
Commission upon request.