SC 13D: Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity securities
Published on February 6, 1997
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Checkfree Corporation
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
162812 10 1
(CUSIP Number)
Catherine L. Valentine, Esq. Kenneth A. Linhares, Esq.
Intuit Inc. Fenwick & West LLP
2535 Garcia Avenue Two Palo Alto Square
Mountain View, CA 94043 Palo Alto, CA 94306
(415) 944-6000 (415) 494-0600
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
January 27, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act.
SCHEDULE 13D
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CUSIP NO. 162812 10 1
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
INTUIT INC.; 77-0034661
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
2 (B) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS AF; 00 (1)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE (USA)
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7 SOLE VOTING POWER
NUMBER
OF 12,600,000
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED NOT APPLICABLE
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BY 9 SOLE DISPOSITIVE POWER
EACH
REPORTING 12,600,000
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PERSON 10 SHARED DISPOSITIVE POWER
WITH
NOT APPLICABLE
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,600,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.3%
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14 TYPE OF REPORTING PERSON
CO
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(1) See Item 3 of this Schedule 13D.
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ITEM 1. SECURITY AND ISSUER
This statement relates to the Common Stock, $0.01 par value per
share ("Common Stock"), of Checkfree Corporation, a Delaware corporation (the
"Issuer"). The 12,600,000 shares of the Issuer's Common Stock which are the
subject of this statement will be referred to as the "Shares" throughout this
statement. The principal executive offices of the Issuer are located at 4411
East Jones Bridge Road, Norcross, Georgia 30092.
ITEM 2. IDENTITY AND BACKGROUND
This statement is filed on behalf of Intuit Inc., a Delaware
corporation ("Intuit"). Intuit develops, markets and supports personal finance,
small business accounting, tax preparation and other consumer software products,
and related electronic services and supplies. The address of Intuit's principal
business and its principal office is 2535 Garcia Avenue, Mountain View,
California 94043.
The following is a list of the directors and executive officers of
Intuit:
BOARD OF DIRECTORS
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EXECUTIVE OFFICERS
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(1) The present principal occupation of all executive officers of Intuit is with
Intuit.
During the last five years, neither Intuit nor, to the best of
Intuit's knowledge, any person named in this Item 2 has been: (a) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors); or
(b) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which it was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to an Agreement and Plan of Merger dated as of September
15, 1996, as amended (the "Plan") by and among the Issuer, Intuit, Checkfree
Acquisition Corporation II, a Delaware corporation and wholly-owned subsidiary
of the Issuer ("Acquisition") and Intuit Services Corporation, a Delaware
corporation and wholly-owned subsidiary of Intuit ("ISC"), Intuit acquired the
Shares from the Issuer in consideration for the merger (the "Merger") of the
Issuer's wholly-owned subsidiary Acquisition with and into Intuit's wholly-owned
subsidiary ISC in a reverse triangular merger, pursuant to which the Issuer
acquired all of the outstanding stock of ISC. The Merger became effective on
January 27, 1997 (the "Effective Time").
ITEM 4. PURPOSE OF TRANSACTION
The purpose of the acquisition of the Issuer's Shares was the merger
of the Issuer's wholly-owned subsidiary Acquisition with and into Intuit's
wholly-owned subsidiary ISC, in accordance with the Plan. On January 27, 1997,
the Issuer's stockholders approved the terms of the Plan. No approval of the
Plan was required by Intuit's stockholders. On January 27, 1997, the sole
stockholder of Acquisition and the sole stockholder of ISC each approved the
terms of the Plan. The Merger became effective by the filing of a Certificate of
Merger between Acquisition and ISC with the Delaware Secretary of State on
January 27, 1997.
Prior to consummating the Merger, Intuit provided electronic home
banking and electronic bill payment services and other related on-line services
through its ISC subsidiary. Intuit concluded that it was in its best long-term
interests to focus the efforts of its management on Intuit's core business of
developing and marketing "front-end" software products and services, rather than
devoting substantial management time and effort to building ISC's transactions
processing business. Accordingly, Intuit elected to dispose of the ISC business
to Checkfree in the Merger in exchange for the Shares in order to achieve this
objective while retaining an indirect interest in ISC's business through an
ownership stake in Checkfree Common Stock.
(a) To account for its investment in the Shares on the cost method of
accounting, Intuit must ultimately retain less than twenty
percent (20%) of the outstanding
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Common Stock of Checkfree. Accordingly, Intuit currently intends to
meet this requirement by selling approximately 2,000,000 Checkfree
Shares within several months following registration of the resale of
the Shares by Checkfree under the Securities Act of 1933, as
amended. Such sales may be made through open market sales in
accordance with Rule 144 under the Securities Act of 1933, as
amended, by the exercise of registration rights granted to Intuit by
Checkfree in the Merger (see Item 6 below), through private sales,
through broker-dealers, directly to one or more purchasers or
otherwise. The exact number of Shares to be sold, and the price or
manner of such anticipated sales, has not been finally determined.
Further sales of Shares may be made by Intuit in the future, but no
such sales are currently planned. Intuit does not have any plans or
proposals which would relate to or would result in the acquisition
of additional securities of the Issuer.
(b) Intuit does not presently have any plans or proposals which relate
to or would result in an extraordinary corporate transaction, such
as a merger, reorganization or liquidation, involving the Issuer or
any of its subsidiaries.
(c) Intuit does not presently have any plans or proposals which relate
to or would result in a sale or transfer of a material amount of
assets of the Issuer or of any of its subsidiaries.
(d) Pursuant to the Plan, for so long as Intuit holds no less than 10%
of the outstanding shares of the Issuer's Common Stock, the Issuer
must permit one representative of Intuit to attend all meetings of
the board of directors of the Issuer in a non-voting observer
capacity.
Intuit has made no changes to the board of directors or management
of the Issuer and has no present plans or proposals to make any
changes in the present board of directors or management of the
Issuer, including any changes in the number or term of directors or
the filling of any existing vacancies on the board of directors.
Intuit may exercise its right pursuant to the Plan to send its
representative to meetings of the Issuer's board of directors in a
non-voting observer capacity.
(e) Intuit does not presently have any plans or proposals which relate
to or would result in any material change in the present
capitalization or dividend policy of the Issuer.
(f) Intuit does not presently have any plans or proposals which relate
to or would result in any other material change in the Issuer's
business or corporate structure.
(g) Intuit does not presently have any plans or proposals which relate
to or would result in changes in the Issuer's charter, bylaws or
instruments corresponding thereto or other actions which may impede
the acquisition of control of the Issuer by any person.
(h) Intuit does not presently have any plans or proposals which relate
to or would result in a class of securities of the Issuer being
delisted from a national securities
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exchange or ceasing to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association.
(i) Intuit does not presently have any plans or proposals which relate
to or would result in a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(j) Intuit does not presently have any plans or proposals which relate
to or would result in an action similar to any of those enumerated
above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of the date of this statement, Intuit beneficially owns a
total of 12,600,000 shares of the Issuer's Common Stock. The
12,600,000 shares of Common Stock beneficially owned by Intuit on
the date of this statement represent a beneficial ownership of
approximately 23.3% of the Issuer's outstanding shares of Common
Stock, based upon the Issuer's statement in its Form 10-Q for the
quarter ended September 30, 1996, as amended December 9, 1996,
that 41,450,064 shares of Common Stock were outstanding on
November 6, 1996 (to which were added the 12,600,000 shares of
Common Stock issued to Intuit in the Merger on January 27,
1997).
(b) Intuit has sole power to vote and to direct the vote of, and sole
power to dispose or to direct the disposition of, all 12,600,000
shares of the Issuer's Common Stock which it beneficially owns on
the date of this statement.
(c) Except as set forth herein, Intuit has not effected any transaction
in the Issuer's Common Stock during the past 60 days, and, to the
best of its knowledge, no person named in Item 2 has effected any
transactions in the Issuer's Common Stock during the past 60 days.
(d) No other person is known to Intuit to have the right to receive or
the power to direct the receipt of dividends from, or proceeds from
the sale of, any shares of Common Stock beneficially owned by Intuit
on the date of this statement.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
ESCROW AGREEMENT
Intuit, the Issuer and Key Trust Company of Ohio, N.A., entered into
the Escrow Agreement dated as of January 27, 1997 (the "Escrow Agreement").
Pursuant to the Plan and the Escrow Agreement, until the first anniversary of
the Effective Time of the Merger (i.e., January 27, 1998), ten percent (10%) of
the Shares (i.e., 1,260,000 shares) will be held in escrow as security for
certain indemnification obligations of Intuit under the Plan.
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STOCK RESTRICTION AGREEMENT
Intuit and the Issuer have entered into an Amended and Restated
Checkfree Corporation Stock Restriction Agreement dated as of September 15, 1996
(the "Stock Restriction Agreement"). The Stock Restriction Agreement restricts
Intuit's ability to sell and purchase the Shares, solicit proxies from the
Issuer's stockholders and initiate or participate in any group which has the
purpose of changing the control of the Issuer. The Stock Restriction Agreement
will irrevocably terminate at the first time that Intuit shall beneficially own
less than ten percent (10%) of the Issuer's outstanding Common Stock.
Under the Stock Restriction Agreement, Intuit may sell shares of the
Issuer's Common Stock:
(a) to any "Qualified Institutional Buyer" (defined as a person
who, assuming such person's ownership of five percent (5%)
or more of the Issuer's Common Stock, would be eligible to
file reports of beneficial ownership on Schedule 13G as
prescribed by the Securities and Exchange Commission
("SEC") because such person fits the description in Rule
13d-1(b)(1)(i) under the Exchange Act (as such Rule was in
effect on September 15, 1996) so long as the Qualified
Institutional Buyer would own, after such purchase from
Intuit, not more than ten percent (10%) of the then
outstanding shares of the Issuer's Common Stock; except
that, in the case of a sale in accordance with sections (c),
(d) or (e) below and certain additional requirements, no
restrictions under this section (a) will apply;
(b) to any person who is not a Qualified Institutional Buyer
("Other Buyer") so long as such Other Buyer would own, after
such purchase from Intuit, not more than five percent (5%)
of the then outstanding shares of the Issuer's Common
Stock; except that, in the case of a sale in accordance
with sections (c), (d) or (e) below and certain additional
requirements, no restrictions under this section (b) will
apply;
(c) in compliance with SEC Rule 144 under the Securities Act of
1933, as amended (the "Securities Act");
(d) pursuant to underwritten public offerings of the Issuer's
Common Stock in which the parties have mutually approved the
managing underwriters;
(e) pursuant to offerings of the Issuer's Common Stock that are
not underwritten but are registered under the Securities Act
pursuant to a shelf registration under Rule 415 of the
Securities Act that has been effected pursuant to the
Registration Rights Agreement described below; and
(f) in any other manner that the Issuer agrees to in advance in
writing.
Pursuant to the Stock Restriction Agreement, Intuit has agreed that
it may purchase shares of the Issuer's Common Stock only where such purchase
would result in Intuit's
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beneficial ownership of not more than fifteen percent (15%) of the then
outstanding shares of the Issuer's Common Stock, except where Intuit has
received the prior written consent of the Issuer's board of directors or the
Issuer's authorized representative; provided, however, that Intuit may not hold
more than the number of shares of the Issuer's Common Stock issued to it in the
Merger so long as the Stock Restriction Agreement remains in effect.
Under the Stock Restriction Agreement, Intuit agreed not to solicit
proxies from the Issuer's stockholders in opposition to any recommendation of
the Issuer's board of directors. Further, Intuit agreed not to initiate or
participate in any group which proposes, without the support of the Issuer's
board of directors, any change in the control of the Issuer, whether by tender
offer, merger, or otherwise. In any event, Intuit, itself, is permitted to make
such an offer or proposal to the Issuer's board of directors; provided, however,
that any such offer or proposal by Intuit shall be made on a strictly
confidential basis and shall not be publicly disclosed without the prior consent
of the Issuer's board of directors.
REGISTRATION RIGHTS AGREEMENT
Intuit and the Issuer entered into the Amended and Restated
Registration Rights Agreement as of September 15, 1996 (the "Registration Rights
Agreement") which provides, among other things, with respect to the Shares the
following (a) registration rights and (b) restrictions.
As soon as practicable after the Effective Time of the Merger, the
Issuer is required to file a registration statement on Form S-3 for a continuous
registered shelf offering under Rule 415 of the Securities Act (the "Shelf
Registration Statement") covering all of the Shares. The Issuer agreed to
continuously maintain the effectiveness of the Shelf Registration Statement at
all times until the second anniversary of the Effective Time of the Merger. For
as long as Intuit may be an affiliate of the Issuer as defined in the Securities
Act, the amount of Shares that may be sold by Intuit in each sale of Shares in
reliance on the Shelf Registration Statement, together with all sales of other
shares of the Issuer's Common Stock for the account of Intuit within the
preceding three months (excluding any sales of the Issuer's Common Stock by
Intuit pursuant to Demand Registrations (defined below) or Piggyback
Registrations (defined below)), shall not exceed the greater of (i) one percent
(1%) of the shares of the Issuer's Common Stock outstanding as shown by the most
recent report or statement published by the Issuer, or (ii) the average weekly
reported volume of trading in shares of the Issuer's Common Stock on all
national securities exchanges and/or reported through the automated quotation
system of a registered securities association during the four calendar weeks
preceding Intuit's delivery to the Issuer of the required prior written notice
of a sale of Shares in reliance on the Shelf Registration Statement. Shares sold
by Intuit in reliance on the Shelf Registration Statement must have a minimum
aggregate sale price of at least $250,000. For sales of Shares in reliance on
the Shelf Registration Statement, Intuit is required to bear all of its selling
expenses and the fees and disbursements of counsel for Intuit, while the Issuer
must bear all of the rest of the registration expenses.
Subject to certain limitations, Intuit may also require the Issuer
to file a registration statement under the Securities Act with respect to the
Shares (a "Demand Registration"). Intuit may request only one Demand
Registration per calendar year and must
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request that at least 20% of the Shares issued to it in the Merger be registered
in such Demand Registration, except that (i) the first Demand Registration may
be for such lesser number of Shares as would reduce Intuit's ownership of the
Issuer's Common Stock to less than 20% of the outstanding shares of the Issuer's
Common Stock, and (ii) if Intuit is prevented by factors outside its control
from registering the minimum number of Shares required under the Registration
Rights Agreement, Intuit may nevertheless register such lesser number of Shares
as it is able to register. Intuit may request that the Shares registered in a
Demand Registration be offered by means of an underwriting. For an underwritten
offering of the Issuer's securities, the underwriters may reduce the number of
shares to be included in the Demand Registration, but shall not limit the Shares
to be included by Intuit unless all other securities are first entirely
excluded. For sales of Shares in reliance on Demand Registrations, Intuit is
required to bear all of its selling expenses and its "pro rata" share of
one-half of the registration expenses. Intuit's "pro rata" share is the
percentage obtained by dividing the number of Shares registered and sold by
Intuit in the offering by the total number of shares of the Issuer's Common
Stock sold in the offering by all parties other than the Issuer.
If the Issuer proposes to register any of its securities under the
Securities Act, it must give prior notice to Intuit and permit Intuit, subject
to certain limitations, to include in such registration all or part of the
Shares (a "Piggyback Registration"). An underwriter may reduce the number of
Shares to be included in a Piggyback Registration, subject to certain
limitations. For sales of Shares in reliance on Piggyback Registrations, Intuit
is required to bear all of its selling expenses and the fees and disbursements
of counsel for Intuit, while the Issuer must bear all of the rest of the
registration expenses.
For so long as it holds at least 5% of the Issuer's outstanding
voting equity securities and subject to certain other conditions, Intuit has
agreed, if requested by the Issuer or the underwriters managing an underwritten
offering of the Issuer's securities, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any of its Shares
without the prior written consent of the Issuer or such underwriters for a
period not to exceed 90 days from the effective date of such registration.
The Registration Rights Agreement will terminate (a) if all the
Shares issued to Intuit in the Merger have been registered and sold pursuant to
registrations effected pursuant to the Registration Rights Agreement or (b)
after the fifth anniversary of the Effective Time of the Merger (except that if
the Issuer deferred, pursuant to the Registration Rights Agreement, a Demand
Registration, then this date shall be extended by one calendar year for each
such deferral).
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following documents are filed as exhibits hereto:
Exhibit 7.1: Agreement and Plan of Merger, dated as of
September 15, 1996, among the Issuer, Acquisition,
Intuit and ISC.
Exhibit 7.2: Amendment No. 1 to Agreement and Plan of Merger,
dated as of September 15, 1996, among the Issuer,
Acquisition, Intuit and ISC.
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Exhibit 7.3: Escrow Agreement, dated as of January 27, 1997,
among the Issuer, Intuit and Key Trust Company of
Ohio, N.A.
Exhibit 7.4: Amended and Restated Checkfree Corporation Stock
Restriction Agreement, dated as of September 15,
1996, between the Issuer and Intuit.
Exhibit 7.5: Amended and Restated Registration Rights Agreement,
dated as of September 15, 1996, between the Issuer
and Intuit.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: February __, 1997
INTUIT INC.
By: /s/ CATHERINE L. VALENTINE
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Catherine L. Valentine
Secretary
EXHIBIT INDEX