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
SECURITY CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
July 17, 1997
Date of Report (Date of earliest event reported)
Delaware 1-7921 13-3003070
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1111 North Loop West, Suite 400, Houston, Texas 77008
(Address of principal executive offices) (Zip Code)
(713) 880- 7100
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
As previously reported in a Current Report on Form 8-K filed by the Company
on October 16, 1992, the Company's indirect, wholly-owned subsidiary, Foster
Insurance Managers, Inc., a Texas corporation ("FIM"), is party to an Agency and
Management Services Agreement (the "Agency Agreement"), effective September 1,
1992, as amended by an Amendment dated September 30, 1994, with Foster Insurance
Services, Inc., a Texas corporation ("FIS"), pursuant to which FIS serves FIM as
its local recording agent in the State of Texas and FIM provides management
consulting services to FIS and maintains insurance markets for the placement of
the insurance business produced by FIS. FIM is also party to a Buy-Sell
Agreement (the "Buy-Sell Agreement"), effective September 1, 1992, with FIS and
Edward G. Britt, Jr. ("Britt"), the sole shareholder of FIS. For a description
of the terms of the Agency Agreement and the Buy-Sell Agreement, reference is
made to the Company's Current Report on Form 8-K filed on October 16, 1992 and
the exhibits attached thereto, which are incorporated by reference herein.
As also previously reported in a Current Report on Form 8-K filed by the
Company on October 17, 1996, on August 29, 1996, Britt exercised his put option
pursuant to Section 2(a) of the Buy-Sell Agreement to require FIM to purchase
all of the shares of FIS common stock held by Britt for the put option price of
$1,000. By the same notice, Britt also exercised his option (the "Option")
pursuant to Section 2(b) of the Buy-Sell Agreement to purchase all of the
assets, liabilities and business of FIS at fifty percent (50%) of their Fair
Market Value (as defined in the Buy-Sell Agreement).
On July 17, 1997, FIM and Britt consummated the purchases and sales
described above pursuant to a Purchase Agreement (the "Purchase Agreement"),
dated as of July 3, 1997, by and among FIM, FIS, BMD&B, Inc., a Texas
corporation (the "Buyer"), Larry M. Karren ("Karren") and Britt. Prior to the
closing under the Purchase Agreement, all of the Buyer's shareholders, including
Britt, transferred all of their shares of capital stock in Buyer to Bowen,
Miclette & Descant, Inc., now known as Bowen, Miclette, Descant & Britt, Inc.
("BMD"), and Britt transferred all of his proprietary interest in FIS, including
all of the issued and outstanding capital stock of FIS (collectively, the
"Britt/FIS Proprietary Interest") and his Option to BMD which, in turn,
transferred and contributed the Britt/FIS Proprietary Interest and the Option to
Buyer.
Pursuant to the Purchase Agreement, FIM transferred to Buyer all of its
beneficial ownership in FIS in consideration of $1,314,484.64 (which represents
the purchase price of $1,525,845.00 specified in the Purchase Agreement, less
the net amount due FIS, Buyer or any of their respective affiliates other than
FIM and the Company (collectively, the "Buyer Group") from FIM or the Company,
after subtracting all amounts due to FIM or the Company by any of the Buyer
Group (including, without limitation, pursuant to the Agency Agreement and the
letter agreement, dated June 28, 1994, from Buyer to Capital Partners, Inc. with
respect to the institution of a management fee for the collection of life and
group commissions), through, at a
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minimum, June 30, 1997 (the "Effective Date")). The purchase price is subject
to adjustment based on a review by the Company's auditors, Deloitte & Touche
LLP, of financial information with respect to FIS and Bowen, Miclette, Descant
& Britt (the "Partnership") through the Effective Date. Disputes between FIM
and the Buyer are subject to arbitration.
In addition to the purchase price, FIM is entitled to receive 25% of the
value received by FIS on any accounts receivable of FIS and/or the Partnership
that have been written off as uncollectible prior to and as of the Effective
Date.
The Purchase Agreement also provides that FIS and Buyer, jointly and
severally, will indemnify FIM, its directors, officers, employees, affiliates
and assigns on account of claims, losses, damages and costs (including interest,
penalties and reasonable attorneys' fees) (i) which arise, result from, or
relate to (A) liabilities of FIS, (B) any breach of, or failure by Buyer, FIS or
Britt to perform any of its or his representations, warranties and covenants
contained in the Purchase Agreement or (C) the Agreements (as hereinafter
defined) (including the termination or modification thereof), (ii) which
otherwise relate to or arise out of the business (whether arising before or
after the closing) of FIS, Buyer or Britt, including all claims arising out of,
resulting from or relating to the QUALITY OILFIELD PRODUCTS, INC. litigation or
any other litigation described in the Purchase Agreement or (iii) which arise,
result from, or relate to any claim by any of Messrs. Karren, Acree or Drew that
any of them have any interest in or right to any interest in FIS or Buyer or any
affiliate thereof.
Finally, pursuant to the Purchase Agreement, the Buy-Sell Agreement and the
Agency Agreement were terminated as of the Effective Date, subject to payment of
all fees due FIM under the Agency Agreement through such date. FIM, FIS, Buyer,
BMD, Britt, Karren, David G. Miclette, Dennis M. Descant, Samuel F. Bowen,
William G. Bowen, Jr. and their respective spouses also entered into a
Modification Agreement, dated as of July 3, 1997, whereby each of (i) the Stock
Purchase Agreement effective the 1st day of January, 1993 among Britt and Karren
(and their respective spouses), FIS, FIM and Buyer, (ii) the Shareholder
Agreement effective as of the 1st day of January, 1993 by and among BMD, David
G. Miclette, Dennis Michael Descant, Samuel F. Bowen, William G. Bowen, Karren,
their respective spouses, Buyer, FIM and FIS, (iii) the Management Services
Agreement dated August 10, 1994 between FIM, FIS, BMD and Buyer, (iv) the
Partnership Agreement of the Partnership dated June 15, 1994 between BMD and
FIS, (v) the Personnel Services and Clarification Agreement dated June 15, 1994
among BMD, FIS, Buyer and the Partnership, and (vi) the Interim Agreement dated
October 30, 1992 between FIS, FIM, BMD, Samuel F. Bowen, David G. Miclette, D.
Michael Descant, William G. Bowen, Jr., Thomas C. Cook and Britt (each of
foregoing, together with the Buy-Sell Agreement and the Agency Agreement,
collectively, the "Agreements") was modified to remove FIM as a party thereto,
effective June 30, 1997.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information.
The Company believes that it is impracticable to provide any of the
required pro forma financial information at the time of filing of this Current
Report on Form 8-K. The required pro forma financial information will be filed
as soon as practicable and, in any event, not later than 60 days following the
due date of this Current Report on Form 8-K.
(c) Exhibits.
NUMBER EXHIBIT
1. Agency and Management Services Agreement (the "Agency Agreement"),
effective September 1, 1992, between Foster Insurance Managers, Inc.
("FIM") and Foster Insurance Services, Inc. ("FIS") (Incorporated by
reference to Exhibit 1 to the Company's Current Report on Form 8-K
dated September 1, 1992).
2. Amendment, dated September 30, 1994, to the Agency Agreement between
FIM and FIS (Incorporated by reference to Exhibit 10.10A to the
Company's Form 10-K Annual Report for the fiscal year ended September
30, 1994).
3. Buy-Sell Agreement, effective September 1, 1992, between FIM, FIS and
Edward G. Britt, Jr. ("Britt") (Incorporated by reference to Exhibit 2
to the Company's Current Report on Form 8-K dated September 1, 1992).
4. Purchase Agreement, dated as of July 3, 1997, by and among FIM, FIS,
BMD&B, Inc., a Texas corporation, formerly known as Bowen, Miclette,
Descant & Britt, Inc. ("Buyer"), Larry M. Karren ("Karren") and Britt.
5. Modification Agreement, dated as of July 3, 1997, by and among FIM,
FIS, Bowen, Miclette, Descant & Britt, Inc., a Texas corporation,
formerly known as Bowen, Miclette & Descant, Inc. ("BMD"), and Buyer.
6. Stock Purchase Agreement effective the 1st day of January, 1993 among
Britt, Patricia C. Britt, Karren, Jodi S. Karen, FIS, FIM and Buyer
(Incorporated by reference to Exhibit 10.18 to the Company's Form 10-K
Annual Report for the fiscal year ended September 30, 1995).
7. Shareholder Agreement effective as of the 1st day of January, 1993 by
and among BMD, David G. Miclette, Dennis Michael Descant, Samuel F.
Bowen, William G. Bowen, Karren, their respective spouses, Buyer, FIM
and FIS (Incorporated by reference to Exhibit 10.22 to the Company's
Form 10-K Annual Report for the
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fiscal year ended September 30, 1995).
8. Management Services Agreement dated August 10, 1994 between FIS, BMD
and Buyer (Incorporated by reference to Exhibit 10.15 to the Company's
Form 10-Q Quarterly Report for the period ended June 30, 1994).
9. Partnership Agreement of Bowen, Miclette, Descant & Britt (the
"Partnership") dated June 15, 1994 between BMD and FIS (Incorporated
by reference to Exhibit 3 to the Company's Form 10-Q Quarterly Report
for the period ended June 30, 1994).
10. Personnel Services and Clarification Agreement dated June 15, 1994
among BMD, FIS, Buyer and the Partnership (Incorporated by reference
to Exhibit 10.16 to the Company's Form 10-Q Quarterly Report for the
period ended June 30, 1994).
11. Interim Agreement dated October 30, 1992 between FIS, FIM, BMD,
Samuel F. Bowen, David G. Miclette, D. Michael Descant,
William G. Bowen, Jr., Thomas C. Cook, and Britt (Incorporated by
reference to Exhibit 10(P) to the Company's Form 10-K Annual Report
for the fiscal year ended September 30, 1992).
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SIGNATURE
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.
SECURITY CAPITAL CORPORATION
(Registrant)
Dated: August 1, 1997 By:
----------------------------
A. George Gebauer
President
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INDEX OF EXHIBITS
Sequentially
Numbered
NUMBER EXHIBIT PAGE
1. Agency and Management Services Agreement
(the "Agency Agreement"), effective
September 1, 1992, between Foster Insurance
Managers, Inc. ("FIM") and Foster Insurance
Services, Inc. ("FIS") (Incorporated by
reference to Exhibit 1 to the Company's
Current Report on Form 8-K dated
September 1, 1992).
2. Amendment, dated September 30, 1994, to the
Agency Agreement between FIM and FIS (Incorporated
by reference to Exhibit 10.10A to the Company's
Form 10-K Annual Report for the fiscal year ended
September 30, 1994).
3. Buy-Sell Agreement, effective September 1,
1992, between FIM, FIS and Edward G. Britt,
Jr. ("Britt") (Incorporated by reference to
Exhibit 2 to the Company's Current Report on
Form 8-K dated September 1, 1992).
4. Purchase Agreement, dated as of July 3,
1997, by and among FIM, FIS, BMD&B, Inc., a
Texas corporation, formerly known as Bowen,
Miclette, Descant & Britt, Inc. ("Buyer"),
Larry M. Karren ("Karren") and Britt.
5. Modification Agreement, dated as of
July 3, 1997, by and among FIM, FIS, Bowen,
Miclette, Descant & Britt, Inc., a Texas
corporation, formerly known as Bowen, Miclette &
Descant, Inc. ("BMD"), and Buyer.
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6. Stock Purchase Agreement effective the 1st
day of January, 1993 among Britt, Patricia
C. Britt, Karren, Jodi S. Karen, FIS, FIM
and Buyer (Incorporated by reference to
Exhibit 10.18 to the Company's Form 10-K
Annual Report for the fiscal year ended
September 30, 1995).
7. Shareholder Agreement effective as of the
1st day of January, 1993 by and among BMD,
David G. Miclette, Dennis Michael Descant,
Samuel F. Bowen, William G. Bowen, Karren,
their respective spouses, Buyer, FIM and FIS
(Incorporated by reference to Exhibit 10.22
to the Company's Form 10-K Annual Report for
the fiscal year ended September 30, 1995).
8. Management Services Agreement dated August
10, 1994 between FIS, BMD and Buyer
(Incorporated by reference to Exhibit 10.15
to the Company's Form 10-Q Quarterly Report
for the period ended June
9. Partnership Agreement of Bowen, Miclette,
Descant & Britt (the "Partnership") dated
June 15, 1994 between BMD and FIS
(Incorporated by reference to Exhibit 3 to
the Company's Form 10-Q Quarterly Report for
the period ended June 30, 1994).
10. Personnel Services and Clarification
Agreement dated June 15, 1994 among BMD, FIS,
Buyer and the Partnership (Incorporated
by reference to Exhibit 10.16 to the Company's
Form 10-Q Quarterly Report for the period ended
June 30, 1994).
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11. Interim Agreement dated October 30, 1992
between FIS, FIM, BMD, Samuel F. Bowen,
David G. Miclette, D. Michael Descant,
William G. Bowen, Jr., Thomas C. Cook, and
Britt (Incorporated by reference to Exhibit
10(P) to the Company's Form 10-K Annual
Report for the fiscal year ended September 30, 1992).