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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 14D-9
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SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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MARCAM SOLUTIONS, INC.
(NAME OF SUBJECT COMPANY)
MARCAM SOLUTIONS, INC.
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK
PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
566 14A 107
(CUSIP NUMBER OF CLASS OF SECURITIES)
JONATHAN C. CRANE, CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MARCAM SOLUTIONS, INC.
95 WELLS AVENUE
NEWTON, MA 02459
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING STATEMENT)
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COPIES TO:
MARK H. BURNETT, ESQ.
EDWIN L. MILLER, JR., ESQ.
TESTA, HURWITZ & THIBEAULT, LLP
125 HIGH STREET
BOSTON, MASSACHUSETTS 02110
(617) 248-7000
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INTRODUCTION
This Solicitation/Recommendation Statement on Schedule 14D-9 (this
"Schedule 14D-9") relates to an offer by M Merger Sub, Inc., a Delaware
corporation (the "Offeror"), a direct wholly owned subsidiary of M Acquisition
Corp., a Delaware corporation ("Acquisition" or "Purchaser") and an indirect
wholly owned subsidiary of Invensys plc, a public limited company organized
under the laws of England and Wales ("Invensys" or "Parent"), to purchase all of
the Shares (as defined below) of Marcam Solutions, Inc., a Delaware corporation.
ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is Marcam Solutions, Inc., a Delaware
corporation (the "Company"). The address of the principal executive offices of
the Company is 95 Wells Avenue, Newton, MA 02459. The title of the class of
equity securities of the Company to which this Schedule 14D-9 relates is the
common stock, par value $.01 per share (the "Common Stock"), together with the
associated preferred stock purchase rights issued pursuant to the Amended and
Restated Rights Agreement, dated September 18, 1998, as amended through the date
hereof, between the Company and BankBoston, N.A., as Rights Agent (the "Rights"
and, together with the Common Stock, the "Shares") of the Company.
ITEM 2. TENDER OFFER OF THE BIDDER.
This Schedule 14D-9 relates to the tender offer (the "Offer") disclosed in
the Schedule 14D-1 dated June 3, 1999 (as amended or supplemented, the "Schedule
14D-1") filed with the Securities and Exchange Commission (the "SEC" or the
"Commission") by the Offeror, Acquisition and Invensys relating to an offer by
the Offeror to purchase all outstanding Shares at $7.50 per share, net to the
seller in cash, without interest (the "Offer Price"), upon the terms and subject
to the conditions set forth in the Offer to Purchase and the related letter of
transmittal (the "Letter of Transmittal"). The Schedule 14D-1 states that the
principal executive offices of Invensys are located at Carlisle Place, London,
SW1P 1BX, England and that the principal executive offices of the Offeror are
located at 33 Commercial Street, Foxboro, Massachusetts 02035.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of May 27, 1999 (the "Merger Agreement") among the Company, Invensys, the
Offeror and Acquisition. A copy of the Merger Agreement is filed as Exhibit 99.1
to this Schedule 14D-9 and is hereby incorporated by reference. The Merger
Agreement provides that, among other things, as soon as practicable after the
purchase of Shares pursuant to the Offer and the satisfaction of the other
conditions set forth in the Merger Agreement and in accordance with the relevant
provisions of the General Corporation Law of the State of Delaware ("Delaware
Law"), the Offeror will be merged with and into the Company (the "Merger").
Following consummation of the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and will become a direct wholly owned
subsidiary of Acquisition and an indirect wholly owned subsidiary of Invensys.
At the effective time of the Merger (the "Effective Time"), each Share issued
and outstanding immediately prior thereto shall be canceled and extinguished and
each Share (other than Shares held in the treasury of the Company, Shares held
by Invensys or any subsidiary thereof, and Shares with respect to which
appraisal rights are properly exercised) will, by virtue of the Merger and
without any action on the part of the Offeror, the Company or the holders of the
Shares, be converted into the right to receive $7.50 (or any higher price that
may be paid for each Share pursuant to the Offer) in cash, without interest (the
"Merger Consideration"). The Merger Agreement is summarized in Item 3 of this
Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and business address of the Company, which is the person
filing this Schedule 14D-9, are set forth in Item 1 above. Unless the context
otherwise requires, references to the Company in this Schedule 14D-9 are to the
Company and its subsidiaries, viewed as a single entity.
(b)(1) Arrangements with the Company, its Executive Officers, Directors and
Affiliates. Except as set forth in this Item 3(b)(1), to the knowledge of the
Company, as of the date hereof, there are no material
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contracts, agreements, arrangements or understandings or actual or potential
conflicts of interest between the Company or its affiliates and the Company, its
executive officers, directors or affiliates.
(i) Certain contracts, agreements, arrangements or understandings between
the Company or its affiliates and certain of the Company's directors, executive
officers and affiliates are described in the Information Statement of the
Company attached to this Schedule 14D-9 as Annex A (the "Information
Statement"). The Information Statement is being furnished to the Company's
stockholders pursuant to Section 14(f) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and Rule 14f-1 promulgated under the Exchange
Act in connection with the right of Invensys (after consummation of the Offer)
to designate persons to the Board of Directors of the Company (sometimes
referred to herein as the "Board") other than at a meeting of the stockholders
of the Company. The Information Statement is herein incorporated by reference.
Capitalized terms used below in this Section have the meanings given them in the
Information Statement or in the Merger Agreement, as the case may be.
(ii) The Company is party to an employment agreement with Jonathan C.
Crane, the Company's Chairman, President and Chief Executive Officer, dated
December 22, 1998 (the "Crane Employment Agreement"). The Crane Employment
Agreement is described in the Information Statement under the heading "Certain
Employment Arrangements -- Jonathan C. Crane," and was previously filed with the
SEC as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1998. The Company is also party to employment
agreements with Denis E. Liptak, the Company's Senior Vice President of Business
Development, Harlan B. Plumley, the Company's Vice President of Finance and
Chief Financial Officer, and Stephen R. Quehl, the Company's Executive Vice
President -- Worldwide Field Operations. The employment agreement with Mr.
Liptak was previously filed with the SEC as Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997. The
employment agreement with Mr. Quehl is described in the Information Statement
under the heading "Certain Employment Arrangements -- Stephen R. Quehl," and was
previously filed with the SEC as Exhibit 10.4 to the Company's quarterly Report
on Form 10-Q for the quarter ended December 31, 1998. The employment agreement
with Mr. Plumley is filed as Exhibit 99.11 to this Schedule 14D-9. All such
employment agreements are incorporated herein by reference.
(iii) Invensys and Mr. Crane executed a summary of terms with respect to
his relationship with the Company and its affiliates after consummation of the
Offer (the "Summary of Terms"). The Summary of Terms provides that Mr. Crane
will provide consultative assistance on matters involving customers, strategies
and organizational matters for 90 days after the completion of the Offer. In
consideration for this service, the Company shall, and Invensys shall cause the
Company to, pay to Mr. Crane $250,000, subject to repayment in full of the loan
referred to below. This payment will be made regardless as to whether Mr. Crane
becomes an employee or consultant of any other party and thus becomes less
available to perform services during such 90-day period. Additionally, Invensys
and the Company will honor in accordance with its terms the Crane Employment
Agreement and will pay the amounts due under the Crane Employment Agreement with
respect to the termination of Mr. Crane's employment with the Company promptly
after consummation of the Offer. Furthermore, the loan agreement, dated as of
December 22, 1998, between the Company and Mr. Crane, and the promissory note,
dated December 22, 1998, relating thereto, will remain in effect through the
90-day period, except that Mr. Crane will not borrow any additional amounts
under the loan agreement or the promissory note. At the end of the 90-day
period, Mr. Crane will repay the entire principal amount ($410,000) of such loan
and all accrued interest on this loan prior to receiving the $250,000
consideration referred to above. A copy of the Summary of Terms is filed as
Exhibit 99.7 to this Schedule 14D-9 and is incorporated herein by reference.
(iv) The Company previously agreed to pay Mr. Liptak a $25,000 bonus to
retain his services for the period commencing on May 15, 1999 and terminating on
the earlier of June 11, 1999 or when the Company completes a sale of
substantially all of its assets, merger, consolidation or other business
combination. In addition, Mr. Liptak's severance upon expiration of such term
will be $165,000 plus other benefits in accordance with the terms of his
employment agreement. Copies of memoranda to Mr. Liptak dated March 19, 1999 and
May 20, 1999 relating to this arrangement with the Company are filed as Exhibits
99.8 and 99.9, respectively, to this Schedule 14 D-9, and are incorporated
herein by reference.
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(v) On January 1, 1999, the Company granted options to purchase 1,500
shares of Common Stock to each of Messrs. Campbell, Grimes, Henson, Quinlan,
Smithson and Wyman pursuant to the Company's 1997 Non-Employee Director Stock
Option Plan (the "Director Plan").
(vi) Pursuant to the Merger Agreement, all options outstanding immediately
prior to the Effective Time under the Company's 1997 Stock Plan (the "1997
Plan") or the Director Plan, whether or not then exercisable, shall be canceled
and each holder of an option shall promptly after the Effective Time receive
from the Surviving Corporation, for each share of Common Stock underlying such
option, whether or not exercisable, an amount in cash equal to the excess, if
any, of the Merger Consideration over the per share exercise price of such
option, without interest, in full settlement of the Company's (and the Surviving
Corporation's) obligations under each such option. To the extent that the per
share exercise price of any option exceeds the Merger Consideration, at the
Effective Time such option shall be canceled and the holder of such option shall
not receive or be entitled to receive any consideration in connection with the
Merger.
(vii) Pursuant to the Company's 1997 Employee Stock Purchase Plan (the
"Purchase Plan"), participating employees of the Company, including certain
executive officers, receive rights to purchase Common Stock of the Company
through payroll deductions (the "Purchase Rights"). Pursuant to the Merger
Agreement, the current "Payment Period" under the Purchase Plan shall terminate
on the earlier of the Effective Time and July 23, 1999. If the Offer is
consummated on or before the final day of the current Payment Period under the
Purchase Plan, the holders of Purchase Rights shall receive from the Company,
promptly after the last day of the Payment Period, a cash payment in exchange
for each share of Common Stock issuable upon exercise of such holder's Purchase
Rights as of the last day of the Payment Period, in an amount equal to the
Merger Consideration, and each such Purchase Right shall terminate automatically
upon such payment. If the Offer is not consummated on or before the final day of
the current Payment Period, the Purchase Rights will be exercisable solely for
Common Stock in accordance with the terms of the Purchase Plan. So long as the
Merger Agreement has not been terminated, no additional Payment Period shall
begin after the termination of the current Payment Period.
(viii) Effective April 1, 1999, the Company maintains an incentive pay
program for its executive officers based on a combination of Company financial
performance, expense management for the executive's area of responsibility and
achievement of certain performance targets within specified time frames.
Generally, a budgeted amount for incentive pay is set for each executive
officer. Fifty percent (50%) of the officer's incentive pay is based upon the
attainment of quarterly Company financial performance goals; twenty-five percent
(25%) of the officer's incentive pay is based upon attainment of the quarterly
expense budget directly under the control of the officer; and twenty-five
percent (25%) of the officer's incentive pay is based upon attainment of certain
performance targets for the quarter.
(ix) In connection with the execution of the Merger Agreement, the Company
entered into Amendment No. 1 (the "Rights Agreement Amendment") dated as of May
26, 1999 to the Amended and Restated Rights Agreement dated as of September 18,
1998 (the "Rights Agreement") between the Company and BankBoston, N.A. (A copy
of the Rights Agreement Amendment is filed as Exhibit 4.1 to the Company's
Current Report on Form 8-K filed with the SEC on June 2, 1999 and as Exhibit
99.10 to this Schedule 14D-9, and is incorporated by reference herein.) The
Rights Agreement Amendment provides, among other things, that the Rights
Agreement shall not apply to, and, without limiting the foregoing, none of
Invensys, Acquisition, Merger Sub, nor any Option Stockholder (as defined
below), nor any affiliate or associate of any such parties, will become an
"Acquiring Person" or an "Adverse Person," and no "Adverse Person Event,"
"Triggering Event," "Stock Acquisition Date," "Distribution Date" or "Final
Amendment Date" (as such terms are defined in the Rights Agreement) will occur,
as a result of (i) the approval, execution, delivery or performance of the
Merger Agreement or the consummation of the Offer or Merger pursuant thereto,
(ii) the announcement of the Offer or Merger, (iii) the approval, execution,
delivery or performance of the Tender and Option Agreement by any of the parties
thereto, or (iv) the purchase, disposition, voting or beneficial ownership (as
defined in the Rights Agreement) of shares of Common Stock of the Company by
Invensys, Acquisition, Merger Sub or any of the Option Stockholders pursuant to
or otherwise arising from or relating to any of the foregoing, and no shares of
Common Stock shall be deemed to be Beneficially Owned (as defined in the Rights
Agreement) by any such persons as a result of the foregoing. In addition, the
Board has authorized
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and approved the Offer, the Merger and the other transactions contemplated by
the Merger Agreement and Tender and Option Agreement, such that General Atlantic
Partners 32, L.P., General Atlantic Partners 21, L.P. and GAP Coinvestment
Partners, L.P., stockholders of the Company (collectively, the "Major
Stockholder"), shall continue to be "Exempt Persons" for all purposes under the
Rights Agreement, notwithstanding the execution and delivery of the Merger
Agreement and Tender and Option Agreement and the consummation of the Merger.
(x) The Company's executive officers and directors are parties to the
Tender and Option Agreement (as defined below), which is described below in this
Item 3.
(b)(2) Arrangements with Invensys, the Offeror or Any of their Respective
Executive Officers, Directors and Affiliates. Except as set forth in this Item
3(b)(2), to the knowledge of the Company, as of the date hereof, there are no
material contracts, agreements, arrangements or understandings or actual or
potential conflicts of interest between the Company or its affiliates and
Invensys or the Offeror or their respective officers, directors or affiliates.
(i) Confidentiality Agreement. In connection with the negotiation of a
possible transaction with the Company, Invensys executed a nondisclosure letter
agreement (the "Confidentiality Agreement"), dated May 17, 1999, a copy of which
is filed as Exhibit 99.2 to the Company's Current Report on Form 8-K filed with
the SEC on June 2, 1999 and as Exhibit 99.3 to this Schedule 14D-9, and is
incorporated herein by reference. The Confidentiality Agreement contains
customary provisions pursuant to which, among other matters, Invensys agrees to
keep confidential all non-public, confidential or proprietary information
furnished to it by the Company relating to the Company, subject to certain
standard exceptions (the "Confidential Information") and to use the Confidential
Information solely for the purpose of evaluating a possible transaction
involving the Company and Invensys. The provisions of the Confidentiality
Agreement relating to confidentiality terminate three (3) years after the date
of such agreement.
(ii) The Merger Agreement
The following is a summary of the Merger Agreement, a copy of which is
filed as an Exhibit to the Schedule 14D-1 filed by Invensys and the Offeror with
the SEC in connection with the Offer, as Exhibit 2.1 to the Company's Current
Report on Form 8-K filed with the SEC on June 2, 1999, and as Exhibit 99.1 to
this Schedule 14D-9, and is incorporated herein by reference. Such summary is
qualified in its entirety by reference to the Merger Agreement. Capitalized
terms not otherwise defined in the following description of the Merger Agreement
have the respective meanings ascribed to them in the Merger Agreement.
The Offer. The Merger Agreement provides for the commencement of the
Offer, in connection with which Parent, Purchaser and Offeror have expressly
reserved the right to waive certain conditions of the Offer, but without the
prior written consent of the Company, Offeror has agreed not to (i) waive or
increase the Minimum Condition (as defined below), (ii) reduce the number of
Shares subject to the Offer, (iii) reduce the price per Share to be paid
pursuant to the Offer, (iv) extend the Offer if all of the Offer conditions are
satisfied or waived, (v) change the form of consideration payable in the Offer,
or (vi) amend, modify or add to the conditions of the Offer or the Offer in any
manner adverse to the holders of Shares. Notwithstanding the foregoing, Offeror
may, without the consent of the Company, extend the Offer at any time and from
time to time (A) if at the then scheduled expiration date of the Offer any of
the conditions to the Offer shall not have been satisfied or waived, such
extension not to exceed such time as Offeror shall reasonably conclude is
necessary for all such conditions to be satisfied or waived; (B) for any period
required by any statute or rule, regulation, interpretation or position of the
Commission or its staff applicable to the Offer; (C) for any period required by
applicable law in connection with an increase in the consideration to be paid
pursuant to the Offer; and (D) if all Offer conditions are satisfied or waived
but the number of Shares tendered is less than 90% of the then outstanding
number of Shares, but only if Offeror waives all Offer conditions, for an
aggregate period of not more than 10 business days (for all such extensions
under this clause (D)) beyond the latest expiration date that would be permitted
under clause (A), (B) or (C) of this sentence. So long as the Merger Agreement
is in effect and the Offer conditions are not satisfied on any scheduled
expiration date of the Offer, then, provided that all such conditions are and
continue to be reasonably probable of being satisfied by the date that is 30
business days after commencement of the Offer, Parent, Purchaser and Offeror
shall extend the
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Offer from time to time, until such conditions are satisfied or waived, provided
that Parent, Purchaser and Offeror shall not be required to extend the Offer
beyond the date that is 30 business days after the commencement of the Offer.
Consideration to be Paid in the Merger. The Merger Agreement provides that
subject to the terms and conditions set forth in the Merger Agreement and the
applicable provisions of the Delaware Law, Offeror shall be merged with and into
the Company and the separate existence of Offeror will cease, and the Company
shall be the Surviving Corporation and shall be a wholly owned subsidiary of
Purchaser. In the Merger, each share of common stock, $.01 par value per share,
of Offeror outstanding immediately prior to the time of filing of a certificate
of merger relating to the Merger with the Secretary of State of the State of
Delaware, or such later time as is agreed by the parties, shall be converted
into and exchanged for one validly issued, fully paid and non-assessable share
of Common Stock, $.01 par value per share, of the Surviving Corporation. At the
Effective Time, each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Parent, Purchaser or Offeror or held
by the Company, all of which shall be cancelled, and Shares held by stockholders
who perfect appraisal rights under Delaware law) shall, by virtue of the Merger
and without any action on the part of the holder thereof, be converted into the
right to receive the Merger Consideration, without interest. The Merger
Agreement provides that (subject to the provisions of the Merger Agreement and
the applicable provisions of the Delaware Law) the closing of the Merger shall
occur as soon as practicable following the satisfaction or, to the extent
permitted under the Merger Agreement, waiver of the conditions to the Merger set
forth in Article 7 of the Merger Agreement.
Treatment of Stock Options and Warrants. The Merger Agreement provides
that all options (individually, an "Option" and collectively, the "Options")
outstanding immediately prior to the Effective Time under any of the Company's
stock option plans and stock purchase plans, whether or not then exercisable,
and all warrants to acquire Shares (individually, a "Warrant" and collectively,
"Warrants") outstanding immediately prior to the Effective Time, whether or not
then exercisable, and all rights (individually a "Purchase Right" and
collectively, the "Purchase Rights") to purchase shares of Common Stock under
the Company's 1997 Employee Stock Purchase Plan (the "Purchase Plan") shall be
cancelled. Promptly after the Effective Time, each holder of an Option or
Warrant shall be entitled to receive from the Surviving Corporation, for each
Share subject to an Option or Warrant, whether or not then exercisable, an
amount in cash equal to the excess, if any, of the Merger Consideration over the
per share exercise price of such Option or Warrant, without interest, in full
settlement of the Company's (and the Surviving Corporation's) obligations under
each Option or Warrant. To the extent that the per share exercise price of any
Option or Warrant exceeds the Merger Consideration, at the Effective Time, such
Option or Warrant shall be cancelled and the holder of such Option or Warrant
shall not receive or be entitled to receive any consideration from Purchaser,
Merger Sub or the Surviving Corporation. All amounts payable in respect of
Options and Warrants shall be subject to all applicable withholding of taxes.
Additionally, promptly after the Effective Time, each holder of a Purchase Right
shall be entitled to receive from the Surviving Corporation the Merger
Consideration for each Purchase Right, without interest, in full settlement of
the Company's (and the Surviving Corporation's) obligations under each Purchase
Right. The Company has agreed to take all actions as may be necessary to effect
the foregoing.
Board Representation. The Merger Agreement provides that, promptly upon
the purchase of Shares pursuant to the Offer, Purchaser shall be entitled to
designate such number of directors as will give Purchaser representation on the
Board of Directors equal to the product of (i) the number of directors on the
Board of Directors and (ii) the percentage that the number of Shares purchased
by Purchaser or Offeror bears to the number of Shares outstanding, rounded up to
the next whole number, but rounded down if rounding up would cause Purchaser's
representatives to constitute the entire Board of Directors, and the Company
shall, upon request by Purchaser, promptly increase the size of the Board of
Directors and/or exercise its best efforts to secure the resignations of such
number of directors as is necessary to enable Purchaser's designees to be
elected to the Board of Directors and will cause Purchaser's designees to be so
elected. At the request of Purchaser, the Company will use its best efforts to
cause such individuals designated by Parent to constitute the same percentage of
(i) each committee of the Board of Directors, (ii) the board of directors of
each subsidiary of the Company, and (iii) each committee of each such
subsidiary's board of directors. The
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Company's obligations to appoint designees to the Board of Directors are subject
to Section 14(f) of the Exchange Act.
Stockholder Meeting. The Merger Agreement provides that, if required by
applicable law, the Company, acting through the Board of Directors, shall (i)
call, as promptly as practicable following the consummation of the Offer, a
meeting of its stockholders (the "Stockholder Meeting") for the purpose of
voting upon the Merger, (ii) hold the Stockholder Meeting as soon as practicable
after the purchase of Shares pursuant to the Offer and (iii) recommend to its
stockholders the approval of the Merger. At the Stockholder Meeting, Parent
shall cause all the Shares then owned by Parent, Purchaser, Offeror and any of
their subsidiaries or affiliates to be voted in favor of the Merger. The Merger
Agreement provides that, notwithstanding the foregoing, if Offeror, or any other
direct or indirect subsidiary of Purchaser, shall acquire at least 90 percent of
the outstanding Shares, the parties thereto shall take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a vote of stockholders of
the Company, in accordance with Section 253 of the Delaware Law.
Representations and Warranties. The Merger Agreement contains various
representations and warranties of the parties thereto. These include
representations and warranties by the Company with respect to (i) the due
organization, existence and, subject to certain limitations, the qualification,
good standing, corporate power and authority of the Company and its
subsidiaries; (ii) the due authorization, execution, and delivery of the Merger
Agreement and certain ancillary documents executed in connection therewith and
the consummation of transactions contemplated thereby, and the validity and
enforceability thereof; (iii) subject to certain exceptions and limitations, the
compliance by the Company and its subsidiaries with all applicable foreign,
federal, state or local laws, statutes, ordinances, rules, regulations, orders,
judgments, rulings and decrees ("Laws") of any foreign, federal, state or local
judicial, legislative, executive, administrative or regulatory body or
authority, or any court, arbitration, board or tribunal ("Governmental Entity");
(iv) the capitalization of the Company, including the number of shares of
capital stock of the Company outstanding, the number of shares reserved for
issuance on the exercise of options and similar rights to purchase shares; (v)
the identity, ownership and capitalization of each of the Company's subsidiaries
and ownership by the Company and its subsidiaries of interests or investments in
entities other than subsidiaries of the Company or its subsidiaries; (vi)
subject to certain exceptions and limitations, the absence of consents and
approvals necessary for consummation by the Company of the Merger and the
absence of any violations, breaches or defaults which would result from
compliance by the Company with any provision of the Merger Agreement; (vii)
compliance with the Securities Act of 1933, as amended (the "Securities Act")
and the Exchange Act, in connection with each registration statement, report,
proxy statement or information statement (as defined under the Exchange Act)
prepared by it since September 30, 1997, each in the form (including exhibits
and any amendments thereto) filed with the Commission (collectively, the
"Company Reports") and the financial statements included therein filed by the
Company with the Commission, the Schedule 14D-9, the information statement, if
any, filed by the Company in connection with the Offer pursuant to Rule 14f-1
under the Exchange Act and any schedule required to be filed by the Company with
the Commission or any amendment or supplement thereto; (viii) subject to certain
exceptions and limitations, the absence of pending or (to the knowledge of the
Company) threatened claims, actions, suits, proceedings, arbitrations,
investigations or audits (collectively, "Litigation"); (ix) the absence of
certain changes or effects; (x) certain tax matters; (xi) certain employee
benefit and ERISA matters; (xii) certain labor and employment matters; (xiii)
certain fees in connection with the transactions contemplated by the Merger
Agreement; (xiv) certain matters relating to the Company's intellectual
property; (xv) subject to certain limitations, the possession by the Company and
its subsidiaries of necessary franchises, grants, authorizations, licenses,
permits, easements, variances, exceptions, consents, certificates, approvals and
orders; (xvi) certain environmental matters; (xvii) subject to certain
exceptions and limitations, title to assets; (xviii) certain insurance policy
matters; (xix) material contracts of the Company and its subsidiaries; (xx) the
opinion of Broadview; (xxi) state takeover statutes; (xxii) the required vote of
stockholders of the Company with respect to the transactions contemplated by the
Merger Agreement; (xxiii) the Rights Agreement and (xxiv) year 2000 and euro
compliance.
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Parent, Purchaser and Offeror have also made certain representations and
warranties, including with respect to (i) the due incorporation, existence, good
standing and, subject to certain limitations, corporate power and authority of
Parent, Purchaser and Offeror; (ii) the due authorization, execution and
delivery of the Merger Agreement and certain ancillary documents executed in
connection therewith and the consummation of the transactions contemplated
thereby, and the validity and enforceability thereof; (iii) subject to certain
exceptions and limitations, the absence of consents and approvals necessary for
consummation by Parent, Purchaser and Offeror and the absence of any violations,
breaches or defaults which would result from compliance by Parent, Purchaser and
Offeror with any provision of the Merger Agreement; (iv) the interim operations
of Offeror; (v) the sufficiency of funds available to Parent, Purchaser and
Offeror for the consummation of the Offer and the Merger; and (vi) the lack of
beneficial ownership by Parent, Purchaser or Offeror of any Shares.
Conduct of the Merger. The Company has agreed that from the date of the
Merger Agreement to the Effective Time, with certain exceptions, unless
Purchaser has consented in writing thereto, the Company shall, and shall cause
each of its subsidiaries to: (i) conduct its operations according to its
ordinary course of business consistent with past practice; (ii) use its
reasonable best efforts to preserve intact its business organizations and
goodwill, keep available the services of its officers and employees and maintain
satisfactory relationships with those persons having business relationships with
them; (iii) promptly upon the discovery thereof, notify Purchaser of the
existence of any breach of any representation or warranty contained in the
Merger Agreement (or, in the case of any representation and warranty that makes
no reference to Material Adverse Effect (as defined in the Merger Agreement),
any breach of such representation and warranty in any material respect) or the
occurrence of any event that would cause any representation or warranty
contained in the Merger Agreement no longer to be true and correct (or in the
case of any representation and warranty that makes no reference to Material
Adverse Effect, to no longer be true and correct in any material respect); and
(iv) promptly deliver to the Purchaser true and correct copies of any report,
statement or schedule filed with the Commission subsequent to the date of the
Merger Agreement, any internal monthly reports prepared for or delivered to the
Board of Directors after the date of the Merger Agreement and monthly financial
statements for the Company and its subsidiaries for and as of each month end
subsequent to the date of the Merger Agreement.
The Company has agreed that from the date of the Merger Agreement to the
Effective Time, with certain exceptions, unless Purchaser has consented in
writing thereto, the Company shall not, and shall not permit any of its
subsidiaries to, (i) amend its certificate of incorporation or by-laws; (ii)
issue, sell or pledge any shares of its capital stock or other ownership
interest in the Company (other than issuances of shares of Common Stock in
respect of any exercise of Options or Warrants outstanding on the date of the
Merger Agreement and disclosed to Purchaser or pursuant to the Purchase Plan) or
any of the subsidiaries, or any securities convertible into or exchangeable for
any such shares or ownership interest, or any rights, warrants or options to
acquire or with respect to any such shares of capital stock, ownership interest,
or convertible or exchangeable securities (or derivative securities in respect
of the foregoing); (iii) effect any stock split or otherwise change its
capitalization as it exists on the date of the Merger Agreement; (iv) grant,
confer or award any option, warrant, convertible security or other right to
acquire any shares of its capital stock or take any action to cause to be
exercisable any otherwise unexercisable option under any existing stock option
plan (except as otherwise required by the terms of such unexercisable options);
(v) declare, set aside or pay any dividend or make any other distribution or
payment with respect to any shares of its capital stock or other ownership
interests (other than such payments by a subsidiary); (vi) directly or
indirectly redeem, purchase or otherwise acquire any shares of its capital stock
or capital stock of any of its subsidiaries; (vii) sell, lease or otherwise
dispose of any of its assets (including capital stock of subsidiaries), except
the sale or disposition of inventory or the license of the Company's products in
the ordinary course of business or the sale, lease or other disposition of
assets which, individually or in the aggregate, are obsolete or not material to
the Company and its subsidiaries, taken as a whole; (viii) acquire by merger,
purchase or any other manner, any business or entity or otherwise acquire any
assets that would be material, individually or in the aggregate, to the Company
and its subsidiaries taken as a whole, except for purchases of inventory,
supplies or capital equipment in the ordinary course of business consistent with
past practice; (ix) incur or assume any long-term or short-term debt for
borrowed money, including debt under the Company's existing credit agreement;
provided that, upon the written consent of
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<PAGE> 9
Purchaser (which consent shall not be unreasonably withheld), the Company may
incur or assume debt under its existing credit agreement at any time after 75
days after the date of the Merger Agreement (x) subject to certain exceptions,
assume, guarantee or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the debt or other obligations of any other person
except obligations (other than debt) of the subsidiaries of the Company; (xi)
make or forgive any loans, advances or capital continuations to, or investments
in, any other person; (xii) grant any stock-related or performance awards;
(xiii) enter into any new employment, severance, consulting or salary
continuation agreements with any officers, directors or employees or grant any
increases in compensation or benefits to employees; (xiv) except to the extent
required by Law, adopt or amend in any material respect any material employee
benefit plan or arrangement; (xv) amend, change or waive (or exempt any person
or entity from the effect of) the Rights Agreement, except as set forth in the
Merger Agreement; (xvi) permit any insurance policy naming the Company or any
subsidiary as a beneficiary or a loss payee to be cancelled or terminated other
than in the ordinary course of business; (xvii) settle or compromise any pending
or threatened litigation; (xviii) make any tax election or settle any tax
liability other than settlements involving solely the payment of money (without
admission of liability) not to exceed $50,000; or (xix) agree in writing or
otherwise to take any of the foregoing actions.
Access to Information. Under the Merger Agreement, from the date of the
Merger Agreement to the closing date of the Merger, the Company shall, and shall
cause its subsidiaries to, (i) give Purchaser and its authorized representatives
full access to all books, records, personnel, offices and other facilities and
properties of the Company and its subsidiaries and their accountants and
accountants' work papers, (ii) permit Purchaser to make such copies and
inspections thereof as Purchaser may reasonably request and (iii) furnish
Purchaser with such financial and operating data and other information with
respect to the business and properties of the Company and its subsidiaries as
Purchaser may from time to time reasonably request; provided that no
investigation or information furnished pursuant to the Merger Agreement shall
affect any representations or warranties made by the Company therein or the
conditions to the obligations of Parent, Purchaser and Offeror to consummate the
transactions contemplated thereby.
No Solicitation. The Company has agreed in the Merger Agreement that from
the date of the Merger Agreement to the Effective Time or termination of the
Merger Agreement in accordance with Article 8 thereof, neither it nor any of its
subsidiaries shall, and it shall direct and use its best efforts to cause its
officers, directors, employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its subsidiaries) ("Representatives") not to, initiate, solicit or encourage,
directly or indirectly, any inquiries or the making or implementation of any
proposal or offer (including, without limitation, any proposal or offer to its
stockholders) with respect to a merger, acquisition, consolidation or similar
transaction involving, or any purchase of all or any significant portion of the
assets or any equity securities (other than pursuant to Options, Warrants and
Purchase Rights) of, the Company or any of its subsidiaries (any such proposal
or offer being hereinafter referred to as an "Alternative Proposal") or engage
in any negotiations concerning, or provide any confidential information or data
to, afford access to the properties, books or records of the Company or any of
its subsidiaries to, or have any discussions with, any person relating to an
Alternative Proposal, or otherwise facilitate any effort or attempt to make or
implement an Alternative Proposal; (b) that it will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing, and it will
take the necessary steps to inform such parties of the obligations undertaken
under Section 6.1 of the Merger Agreement; and (c) that it will notify Purchaser
immediately of the identity of the potential acquiror and the terms of such
person's or entity's proposal if any such inquiries or proposals are received
by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, the Company; provided,
however, that these provisions shall not prohibit the Company or its
subsidiaries or its Representatives, upon approval by the Board of Directors of
the Company, from (i) prior to the acceptance for payment of Shares pursuant to
the Offer, furnishing information to, or entering into discussions or
negotiations with, any person or entity that makes an unsolicited bona fide
proposal to acquire the Company pursuant to a merger, consolidation, share
exchange, purchase of substantially all of the assets of the Company, a business
combination or other similar transaction, if, and only to the extent that, (A)
such proposal was not solicited, encouraged or knowingly facilitated by the
Company, its subsidiaries or their agents
8
<PAGE> 10
in violation of Section 6.1 of the Merger Agreement or the Letter Agreement (as
defined below), (B) such proposal is not subject to the receipt of any necessary
financing, unless the Board of Directors has determined in good faith, based on
the advice of Broadview or other nationally recognized investment banking firm,
that such proposal is readily financeable, and involves consideration that
provides a higher value per share than the Merger Consideration, (C) the Board
of Directors of the Company determines in good faith after receiving a written
opinion from outside counsel that the failure to take such action would be a
violation by the Board of Directors of its fiduciary duties to stockholders
imposed by Law and (D) prior to furnishing information to, or entering into
discussions or negotiations with, such person or entity, the Company provides
written notice to Purchaser to the effect that it is furnishing information to,
or entering into discussions or negotiations with, such person or entity; and
(ii) to the extent applicable, complying with Rule 14e-2(a) promulgated under
the Exchange Act with regard to an Alternative Proposal. Additionally, the
Merger Agreement requires the Company to keep Purchaser immediately informed of
the status of any such discussions or negotiations permitted pursuant to the
previous sentence (including the identity of such person or entity and the terms
of any proposal).
Fees and Expenses. Except as otherwise provided in the Merger Agreement,
whether or not the Offer or the Merger is consummated, all fees, costs and
expenses incurred in connection with the Merger Agreement and the transactions
contemplated by the Merger Agreement shall be paid by the party incurring such
fees, costs and expenses.
The Merger Agreement provides that, under certain circumstances, the
Company shall (a) pay to Purchaser a fee equal to $3,000,000 (the "Termination
Fee"). The Company is obligated to pay the Termination Fee under the following
circumstances: (i) Purchaser or the Company terminates the Merger Agreement
because of the failure of the condition to the Offer that the Company's
representations and warranties made by the Company in the Merger Agreement that
are qualified by materiality or Material Adverse Effect shall have been true and
correct in all respects when made (except to the extent that any such
representation or warranty refers specifically to another date, in which case
such representation or warranty shall be true and correct in all respects as of
such other date), the other representations and warranties made by the Company
in the Merger Agreement shall have been true and correct in all material
respects when made (except to the extent that any such representation or
warranty refers specifically to another date, in which case such representation
or warranty shall be true and correct in all material respects as of such other
date) or the Company shall have not breached and shall have complied in all
material respects with any of its obligations under the Merger Agreement; (ii)
Purchaser or the Company terminates the Merger Agreement because of the failure
of the condition to the Offer that no corporation, entity, "group" or "person"
(as defined in the Exchange Act), other than Purchaser or Offeror, shall have
acquired beneficial ownership of a majority of the outstanding Shares; (iii)
Purchaser or the Company terminates the Merger Agreement because of the failure
of the condition to the Offer that the Company's Board of Directors shall not
have modified or amended its recommendation of the Offer in any manner adverse
to Purchaser or Offeror or shall not have withdrawn its recommendation of the
Offer or shall not have recommended acceptance of any Alternative Proposal or
shall not have resolved to do any of the foregoing; (iv) the Company terminates
the Merger Agreement because of an Alternative Proposal which the Board of
Directors in good faith determines is more favorable from a financial point of
view to the stockholders of the Company as compared to the Offer and the Merger
and the Board of Directors determines, after receiving a written opinion from
outside counsel, that failure to terminate the Merger Agreement would constitute
a violation by the Board of Directors of its fiduciary duties to stockholders
imposed by Law, subject to certain provisos that would render such termination
right unavailable; or (v) Purchaser terminates the Merger Agreement because the
Board of Directors shall have failed to recommend, or shall have withdrawn,
modified or amended its approval or recommendation of the Offer or the Merger in
a manner adverse to Purchaser, or shall have resolved to do any of the
foregoing. In addition, the Company will be obligated to pay the Termination Fee
if an Alternative Proposal shall have been made known to the Company or shall
have been made directly to the stockholders of the Company generally or shall
have otherwise become publicly known or any person shall have publicly announced
an intention (whether or not conditional) to make an Alternative Proposal and
thereafter Purchaser or the Company terminates the Merger Agreement as a result
of (1) the Effective Time not having occurred on or before November 30, 1999 or
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<PAGE> 11
(2) the Offer terminating or expiring on account of the failure of the Minimum
Condition to be satisfied prior to the expiration of the Offer; provided,
however, that the Termination Fee shall not be payable to Purchaser pursuant to
this sentence unless and until within 12 months of such termination the Company
or any of its subsidiaries enters into any definitive agreement with respect to
any Alternative Proposal or any Alternative Proposal is consummated, in which
event the Termination Fee shall be payable upon consummation thereof.
Other Agreements. The Merger Agreement provides that, subject to the terms
and conditions provided in the Merger Agreement, the Company, Parent, Purchaser
and Offeror shall: (a) use their best efforts to cooperate with one another in
(i) determining which filings are required to be made prior to the Expiration
Date (as defined below) or the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to the
Effective Time from, Governmental Entities or other third parties in connection
with the execution and delivery of the Merger Agreement and certain other
ancillary documents and the consummation of the transactions contemplated
thereby and (ii) timely making all such filings and timely seeking all such
consents, approvals, permits, authorizations and waivers; and (b) use their
reasonable best efforts to take, or cause to be taken, all other action and do,
or cause to be done, all other things necessary, proper or appropriate to
consummate and make effective the transactions contemplated by the Merger
Agreement at the earliest practicable time. If, at any time after the Effective
Time, any further action is necessary or desirable to carry out the purpose of
the Merger Agreement, the proper officers and directors of Parent, Purchaser and
the Surviving Corporation shall take all such necessary action.
Dividends and Distributions.
Pursuant to the terms of the Merger Agreement, from and after the date of
the Merger Agreement until the Effective Time, unless Purchaser has consented in
writing thereto, the Company shall not, and shall not permit its subsidiaries
to, (a) issue, sell or pledge any shares of its capital stock or other ownership
interest in the Company (other than issuances of Common Stock in respect of any
exercise of stock options or warrants outstanding on the date of the Merger
Agreement or pursuant to the Employee Stock Purchase Plan to acquire Shares in
accordance with its terms in effect on the date of the Merger Agreement) or its
Subsidiaries, or any securities convertible into or exchangeable for any such
shares or ownership interest, or any rights, warrants or options to acquire or
with respect to any such shares of capital stock, ownership interest, or
convertible or exchangeable securities (or derivative instruments in respect of
the foregoing); (b) effect any stock split or otherwise change its
capitalization as it exists on the date hereof; (c) grant, confer or award any
option, warrant, convertible security or other right to acquire any shares of
its capital stock or take any action to cause to be exercisable any otherwise
unexercisable option under any existing stock option plan (except as otherwise
required by the terms of such unexercisable options or the stock option plan);
(d) declare, set aside or pay any dividend or make any other distribution or
payment with respect to any shares of its capital stock or other ownership
interests (other than such payments by its subsidiaries to the Company); or (e)
directly or indirectly redeem, purchase or otherwise acquire any shares of its
capital stock or capital stock of its Subsidiaries.
Certain Conditions to the Offer.
Notwithstanding any other term of the Offer, Offeror shall not be required
to accept for payment or pay for, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) of the Exchange Act, any
Shares not theretofore accepted for payment or paid for and may terminate or
amend the Offer as to such Shares to the extent permitted by the Merger
Agreement, unless there shall have been validly tendered and not withdrawn prior
to the expiration of the Offer that number of Shares which would represent at
least a majority of the outstanding Shares on a fully diluted basis and any
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, applicable to the purchase of Shares pursuant to the Offer shall
have been expired or been terminated. Furthermore, notwithstanding any other
term of the Offer or the Merger Agreement, Offeror shall not be required to
accept for payment or, subject as aforesaid, to pay for any Shares not
theretofore accepted for payment or paid for, and may terminate or amend the
Offer to the extent permitted by the Merger Agreement, if at any time on or
after the date of the Merger
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<PAGE> 12
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions shall exist or occur and remain in
effect:
(a) there shall have been instituted, pending or threatened in writing
any litigation by the Government of the United States of America or by any
agency or instrumentality thereof that seeks to (i) challenge the
acquisition by Purchaser or Offeror (or any of its affiliates) of Shares
pursuant to the Offer or restrain or prohibit the making or consummation of
the Offer or the Merger, or obtain damages in connection thereunder, (ii)
make the purchase of or payment for some or all of the Shares pursuant to
the Offer or the Merger illegal, (iii) in connection with the Offer or the
Merger or the transactions contemplated to the Merger Agreement, impose
limitations on the ability of Purchaser or Offeror (or any of their
affiliates) effectively to acquire or hold, or to require Purchaser,
Offeror or the Company or any of their respective affiliates or
subsidiaries to dispose of or hold separate, any material portion of their
assets or the business of any one of them, (iv) impose limitations on the
ability of Purchaser, Offeror or their affiliates to exercise full rights
of ownership of the Shares purchased by it, including, without limitation,
the right to vote the Shares purchased by it on all matters properly
presented to the stockholders of the Company, or (v) in connection with the
Offer or the Merger or the transactions contemplated by the Merger
Agreement, affect Purchaser, Offeror, the Company or any of their
respective affiliates which, in the sole judgment of Purchaser, may have or
be likely to have a Material Adverse Effect or a material adverse effect on
Purchaser, Offeror or any of their affiliates or otherwise make
consummation of the Offer or the Merger or the consummation of the
transactions contemplated hereunder unduly burdensome; or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any Governmental Entity,
any Law that could directly or indirectly result in any of the consequences
referred to in subsection (a) above; or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) (i) any of the representations and warranties made by the Company
in the Merger Agreement that are qualified by materiality or Material
Adverse Effect shall not have been true and correct in all respects when
made (except to the extent that any such representation or warranty refers
specifically to another date, in which case such representation or warranty
shall be true and correct in all respects as of such other date), or the
other representations and warranties made by the Company in the Merger
Agreement shall not have been true and correct in all material respects
when made (except to the extent that any such representation or warranty
refers specifically to another date, in which case such representation or
warranty shall be true and correct in all material respects as of such
other date) or (ii) the Company shall have breached or failed to comply in
any material respect with any of its obligations under the Merger
Agreement; or
(e) any corporation, entity, "group" or "person" (as defined in the
Exchange Act), other than Purchaser or Offeror, shall have acquired
beneficial ownership of a majority of the outstanding Shares; or
(f) the Company's Board of Directors shall have modified or amended
its recommendation of the Offer in any manner adverse to Purchaser or
Offeror or shall have withdrawn its recommendation of the Offer or shall
have recommended acceptance of any Alternative Proposal or shall have
resolved to do any of the foregoing; or
(g) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or in the over the counter market in the United States, (ii) a
declaration of any banking moratorium by federal or state authorities or
any suspension of payments in respect of banks or any limitation (whether
or not mandatory) imposed by federal or state authorities on the extension
of credit by lending institutions in the United States, or (iii) in the
case of the foregoing clause existing at the time of the commencement of
the Offer, in the reasonable judgment of Parent, a material acceleration or
worsening thereof.
Other than the Minimum Condition, the foregoing conditions are for the sole
benefit of Purchaser and Offeror and may be asserted by Purchaser or Offeror
regardless of the circumstances (including any action or
11
<PAGE> 13
inaction by Purchaser or the Company) giving rise to any such condition and may
be waived by Purchaser or Offeror, in whole or in part, at any time and from
time to time, in the sole discretion of Purchaser. The failure by Purchaser or
Offeror at any time to exercise any of the foregoing rights will not be deemed a
waiver of any right, the waiver of such right with respect to any particular
facts or circumstances shall not be deemed a waiver with respect to any other
facts or circumstances, and each right will be deemed an ongoing right which may
be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares shall promptly be returned by the depositary to the tendering
stockholders.
Conditions to the Merger. The respective obligations of each party to
effect the Merger are subject to the satisfaction or waiver, where permissible,
prior to the Effective Time, of the following conditions: (i) if approval of the
Merger Agreement and the Merger by the holders of Shares is required by
applicable Law, the Merger Agreement and the Merger shall have been approved by
the requisite vote of such holders; and (ii) there shall not have been issued
any injunction or issued or enacted any Law, which prohibits or has the effect
of prohibiting the consummation of the Merger or making such consummation
illegal.
The obligations of Purchaser and Offeror to effect the Merger shall be
further subject to the satisfaction or waiver, on or prior to the Effective
Time, of the condition that Purchaser shall have accepted for payment and paid
for Shares tendered pursuant to the Offer.
Termination. The Merger Agreement, notwithstanding approval thereof by the
stockholders of the Company, may be terminated at any time prior to the
Effective Time:
(a) by mutual written consent of the Board of Directors of Purchaser
and the Company;
(b) by Purchaser or the Company:
(i) if the Effective Time shall not have occurred on or before
November 30, 1999 (provided that the right to terminate the Merger
Agreement pursuant to this clause (i) shall not be available to any
party whose failure to fulfill any obligation under the Merger Agreement
has been the cause of or resulted in the failure of the Effective Time
to occur on or before such date);
(ii) if there shall be any Law that makes consummation of the Offer
or the Merger illegal or prohibited, or if any court of competent
jurisdiction in the United States or other Governmental Entity shall
have issued an order, judgment, decree or ruling, or taken any other
action restraining, enjoining or otherwise prohibiting the Merger and
such order, judgment, decree, ruling or other action shall have become
final and non-appealable;
(iii) if the Offer terminates or expires on account of the failure
of any condition specified in Section 14 without Offeror having
purchased any Shares thereunder (provided that the right to terminate
the Merger Agreement pursuant to this clause (iii) shall not be
available to any party whose failure to fulfill any obligation under the
Merger Agreement has been the cause of or resulted in the failure of any
such condition); or
(iv) upon a vote at a duly held meeting, or upon any adjournment
thereof, the stockholders of the Company shall have failed to give any
approval required by applicable Law;
(c) by the Company if there is an Alternative Proposal which the Board
of Directors in good faith determines is more favorable from a financial
point of view to the stockholders of the Company as compared to the Offer
and the Merger, and the Board of Directors determines in good faith after
receiving a written opinion from outside counsel that failure to terminate
the Merger Agreement would constitute a violation by the Board of Directors
of its fiduciary duties to stockholders imposed by Law; provided, however,
that the right to terminate the Merger Agreement in such event shall not be
available (i) if the Company has breached its obligations not to solicit an
Alternative Proposal, or (ii) if the Alternative Proposal (x) is subject to
a financing condition or (y) involves consideration that is not entirely
cash or does not permit stockholders to receive the payment of the offered
consideration in respect of all Shares at the same time, unless the Board
of Directors has determined in good faith, based
12
<PAGE> 14
on the advice of Broadview (as defined below) or other nationally
recognized investment banking firm, that (in the case of clause (x)) the
Alternative Proposal is readily financeable and (in the case of clause (y))
that such offer provides a higher value per share than the consideration
per share pursuant to the Offer or the Merger, or (iii) if, prior to or
concurrently with any purported termination pursuant to this clause (c),
the Company shall not have paid the fees contemplated by Section 8.2 of the
Merger Agreement, or (iv) if the Company has not provided Purchaser and
Offeror with three business days prior written notice of its intent to
terminate the Merger Agreement and delivered to Purchaser and Offeror a
copy of the written agreement embodying the Alternative Proposal in its
then most definitive form; and
(d) by Purchaser if the Board of Directors shall have failed to
recommend, or shall have withdrawn, modified or amended its approval or
recommendation of the Offer or the Merger in a manner adverse to Purchaser
or shall have resolved to do any of the foregoing.
Indemnification. The Merger Agreement provides that Purchaser will cause
the Surviving Corporation to maintain in effect for not less than three years
after the Effective Time, the Company's current directors and officers insurance
policies, if such insurance is obtainable (or policies of at least the same
coverage containing terms and conditions no less advantageous to the current and
all former directors and officers of the Company) with respect to acts or
failures to act prior to the Effective Time, including acts relating to the
transactions contemplated by the Merger Agreement; provided, however, that in
order to maintain or procure such coverage, Purchaser and the Surviving
Corporation shall not be required to maintain or obtain policies providing such
coverage except to the extent such coverage can be provided at an annual cost of
no greater than 1.5 times the most recent annual premium paid by the Company
prior to the date hereof (the "Cap"); and provided, further, that if equivalent
coverage cannot be obtained, or can be obtained only by paying an annual premium
in excess of the Cap, Purchaser or the Surviving Corporation shall only be
required to obtain as much coverage as can be obtained by paying an annual
premium equal to the Cap.
The Merger Agreement also provides that from and after the Effective Time,
Purchaser and the Surviving Corporation shall indemnify and hold harmless each
person who is, or has been at any time prior to the date hereof or who becomes
prior to the Effective Time, an officer or director of the Company or any of its
subsidiaries (each, an "Indemnified Party"), in connection with any claim,
action, suit, proceeding or investigation (an "Action") arising out of or
pertaining to acts or omissions by them in their capacities as such, which acts
or omissions occurred prior to the Effective Time, whether asserted or claimed
prior to, at or after the Effective Time, at least to the extent that such
Indemnified Party is presently indemnified by the Company. In the event of any
such Action, the Surviving Corporation shall control the defense of such Action
with counsel selected by the Surviving Corporation, which counsel shall be
reasonably acceptable to the Indemnified Party; provided, however, that the
Indemnified Party shall be permitted to participate in the defense of such
Action through counsel selected by the Indemnified Party, which counsel shall be
reasonably acceptable to the Surviving Corporation, at the Indemnified Party's
expense. Notwithstanding the foregoing, if there is any conflict between the
Surviving Corporation and any Indemnified Parties or there are additional
defenses available to any Indemnified Parties, the Indemnified Parties shall be
permitted to participate in the defense of such Action with counsel selected by
the Indemnified Parties, which counsel shall be reasonably acceptable to the
Surviving Corporation, and Purchaser shall cause the Surviving Corporation to
pay the reasonable fees and expenses of such counsel, as accrued and in advance
of the final disposition of such Action to the fullest extent permitted by
applicable law; provided, however, that the Surviving Corporation shall not be
obligated to pay the reasonable fees and expenses of more than one counsel for
all Indemnified Parties in any single Action except to the extent that, in the
opinion of counsel for the Indemnified Parties, two or more of such Indemnified
Parties have conflicting interests in the outcome of such Action. The Surviving
Corporation shall not be liable for any settlement effected without its written
consent, which consent shall not unreasonably be withheld.
Purchaser has also agreed to cause the Surviving Corporation promptly to
adopt and keep in effect provisions in the Surviving Corporation's certificate
of incorporation and by-laws to provide for exculpation of director and officer
liability and indemnification (and advancement of expenses related thereto) of
the past and present officers and directors of the Company at least to the
extent they are presently indemnified by the Company and such provisions shall
not be amended except as either required by applicable Law or to make
13
<PAGE> 15
changes permitted by Law that would enhance the rights of past or present
officers and directors to indemnification or advancement of expenses. Purchaser
has also agreed to cause the Surviving Corporation to comply with the terms and
conditions of all existing indemnification agreements with the Company's
officers and directors.
Certain Employee Matters. The Merger Agreement provides that the Company
shall take such action as is required to cause the current "Payment Period"
under the Purchase Plan to terminate on the earlier of the Effective Time and
July 23, 1999. If the Offer is consummated on or before the final day of the
current Payment Period under the Purchase Plan, the holders of Purchase Rights
shall receive from the Company, promptly after the last day of the Payment
Period, a cash payment in exchange for each Share issuable upon exercise of such
holder's Purchase Rights as of the last day of the Payment Period as set forth
in the first sentence hereof, in an amount equal to the Merger Consideration,
and each Purchase Right shall terminate automatically upon such payment. If the
Offer is not consummated on or before the final day of the current Payment
Period, the Purchase Rights will be exercisable solely for Common Stock in
accordance with the terms of the Purchase Plan. So long as this Agreement has
not been terminated, no additional Payment Period shall begin after the
termination of the current Payment Period.
From and after the Effective Time, the Surviving Corporation and its
subsidiaries will honor in accordance with their terms all existing employment,
severance, consulting and salary continuation agreements between the Company or
any of its subsidiaries and any current or former officer, director, employee or
consultant of the Company or any of its subsidiaries or group of such officers,
directors, employees or consultants which agreements have been previously
disclosed to Purchaser.
The Merger Agreement also provides that, to the extent permitted under
applicable law, each employee of the Company or its subsidiaries shall be given
credit for all service with the Company or its subsidiaries (or service credited
by the Company or its subsidiaries) under all employee benefit plans, programs,
policies and arrangements maintained by the Surviving Corporation or Purchaser
in which they participate or in which they become participants for purposes of
eligibility and vesting (but not benefit accrual), but only to the extent such
years of service would have been credited under the relevant plan of Purchaser
or its Subsidiaries if the employee had been a similarly situated employee of
Purchaser or its Subsidiaries during the relevant period of time.
Additionally, to the extent that any benefit plan of the Surviving
Corporation or any of its subsidiaries in which an employee of the Company or
its subsidiaries participates after the Effective Time provides medical or
dental benefits, the Surviving Corporation shall cause any eligible expenses
incurred by such employee on or before the Effective Time under a similar
Company Employee Benefit Plan to be taken into account under the Surviving
Corporation or its subsidiaries' plan for purposes of satisfying all deductible,
coinsurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year. The Surviving
Corporation agrees to maintain the Company's Flexible Benefits Plan, as in
effect as of the date hereof, through the end of its current plan year.
Amendment.
To the extent permitted by applicable law, the Merger Agreement may be
amended by action taken by or on behalf of the Board of Directors of the
Company, Parent and Purchaser at any time before or after adoption of the Merger
Agreement by the stockholders of the Company but, after any such stockholder
approval, no amendment shall be made which decreases the Merger Consideration or
which adversely affects the rights of, or the income tax consequences to, the
Company's stockholders thereunder without the approval of such stockholders;
provided, however, that any amendment occurring after the election or
appointment of Purchaser's designees to the Board of Directors shall require
approval of a majority of the directors of the Company then in office, and
Purchaser shall ensure that its designees who are serving on the Board of
Directors do not vote or take any action to approve any such amendment without
the approval of a majority of the directors then in office who are not
designated by Purchaser. The Merger Agreement may not be amended except by an
instrument in writing signed on behalf of all of the parties.
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Timing. The exact timing and details of the Merger will depend upon legal
requirements and a variety of other factors, including the number of Shares
acquired by Offeror pursuant to the Offer. Although Purchaser has agreed to
cause the Merger to be consummated on the terms contained in the Merger
Agreement, there can be no assurance as to the timing of the Merger.
(iii) Tender and Option Agreement
The following is a summary of the Tender and Option Agreement dated as of
May 27, 1999 (the "Tender and Option Agreement") between Acquisition, the
Offeror and certain stockholders of the Company listed on Schedule A thereto
(the "Option Stockholders"), a copy of which is filed as an Exhibit to the
Schedule 14D-1 filed by Invensys and the Offeror with the SEC in connection with
the Offer, as Exhibit 99.1 to the Company's Current Report on Form 8-K filed
with the SEC on June 2, 1999, and as Exhibit 99.2 to this Schedule 14D-9, and is
incorporated herein by reference. Such summary is qualified in its entirety by
reference to the Tender and Option Agreement. Capitalized terms not otherwise
defined in the following description of the Tender and Option Agreement have the
respective meanings ascribed to them in the Tender and Option Agreement.
Concurrently with the execution and delivery of the Merger Agreement, the
Major Stockholder, which has beneficial ownership (as defined in Rule 13d-3 of
the Exchange Act) with respect to 2,000,000 Shares, and the directors and
officers of the Company, who collectively have beneficial ownership (as defined
in Rule 13d-3 of the Exchange Act) of 848,107 Shares, entered into the Tender
and Option Agreement with Purchaser and Offeror. Assuming all options and
warrants owned by the Major Stockholder and the Directors and Officers are
exercised, the Major Stockholder and the Directors and Officers beneficially own
(as defined pursuant to Rule 13d-3 of the Exchange Act) 31.5% of the Shares.
Pursuant to the Tender and Option Agreement, the Major Stockholder and the
Directors and Officers (the "T&O Stockholders") have agreed, among other things,
to tender promptly the Shares held by them pursuant to the Offer, and not to
withdraw any such Shares, and to various other provisions described below.
Transfer of the Shares. The Tender and Option Agreement provides that
during its term, except as otherwise expressly provided therein, each T&O
Stockholder agrees that such T&O Stockholder will not (a) tender into any tender
or exchange offer or otherwise sell, transfer, pledge, assign, hypothecate or
otherwise dispose of, or encumber with any lien, any of the Shares, except for
(i) transfers to any spouse or descendant (including by adoption) of such T&O
Stockholder, or any trust or retirement plan or account for the benefit of such
T&O Stockholder, spouse or descendant; provided any such transferee agrees in
writing to be bound by the terms of the Tender and Option Agreement and (ii)
transfers by operation of Law; provided that any such transferee shall be bound
by the terms of the Tender and Option Agreement, (b) acquire any Shares or other
securities of the Company (otherwise than in connection with a transaction in
connection with adjustments or by exercising any of the Options, Warrants or
Rights), (c) deposit the Shares into a voting trust, enter into a voting
agreement or arrangement with respect to the Shares or grant any proxy or power
of attorney with respect to the Shares, (d) enter into any contract, option or
other arrangement (including any profit sharing arrangement) or undertaking with
respect to the direct or indirect acquisition or sale, transfer, pledge,
assignment, hypothecation or other disposition of any interest in or the voting
of any Shares or any other securities of the Company, (e) exercise any rights
(including, without limitation, under Section 262 of the Delaware General
Corporation Law) to demand appraisal of any Shares which may arise with respect
to the Merger, or (f) take any other action that would in any way restrict,
limit or interfere with the performance of such T&O Stockholder's obligations
hereunder or the transactions contemplated hereby or which would otherwise
diminish the benefits of the Tender and Option Agreement to Purchaser or
Offeror.
Tender of Shares. The Tender and Option Agreement provides that each T&O
Stockholder agrees that such T&O Stockholder will validly tender (or cause the
record owner of such shares to validly tender) and sell (and not withdraw,
except in the event the Purchase Option is exercised, in which case such
withdrawal shall be for the limited purpose of consummating the Purchase Option)
pursuant to and in accordance with the terms of the Offer not later than the
fifth business day after commencement of the Offer (or the earlier of the
expiration date of the Offer and the fifth business day after such Shares are
acquired by such T&O Stockholder if the T&O Stockholder acquires Shares after
the date hereof), or, if the T&O Stockholder has not received the Offer
documents by such time, within two business days following receipt of such
documents,
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all of the then outstanding Shares beneficially owned by such T&O Stockholder
(including the Shares outstanding as of the date of the Tender and Option
Agreement and shares issued following the exercise (if any) of the Options,
Warrants and Rights.
Voting Agreement. The Tender and Option Agreement also provides that each
T&O Stockholder, (a) agrees to appear (or not appear, if requested by Purchaser
or Offeror) at any annual, special, postponed or adjourned meeting of the
stockholders of the Company or otherwise cause the Shares such T&O Stockholder
beneficially owns to be counted as present (or absent, if requested by Purchaser
or Offeror) thereat for purposes of establishing a quorum and to vote or
consent, and (b) constitutes and appoints Purchaser and Offeror, or any nominee
thereof, with full power of substitution, during and for the term of the Merger
Agreement, as his true and lawful attorney and proxy for and in his name, place
and stead, to vote all the Shares such T&O Stockholder beneficially owns at the
time of such vote, at any annual, special, postponed or adjourned meeting of the
stockholders of the Company (and this appointment will include the right to sign
his or its name (as stockholder) to any consent, certificate or other document
relating to the Company that laws of the State of Delaware and the Commonwealth
of Massachusetts may require or permit), in the case of both (a) and (b) above,
(x) in favor of approval and adoption of the Merger Agreement and approval and
adoption of the Merger and the other transactions contemplated thereby and (y)
against (1) any Alternative Proposal, (2) any action or agreement that would
result in a breach in any respect of any covenant, agreement, representation or
warranty of the Company under the Merger Agreement and (3) the following actions
(other than the Merger and the other transactions contemplated by the Merger
Agreement and the ancillary documents thereto): (i) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving the Company or any of its subsidiaries; (ii) a sale, lease or transfer
of a material amount of assets of the Company or any of its subsidiaries, or a
reorganization, recapitalization, dissolution or liquidation of the Company or
any of its subsidiaries; (iii)(A) any change in a majority of the persons who
constitute the board of directors of the Company or any of its subsidiaries as
of the date hereof; (B) any change in the present capitalization of the Company
or any amendment of the Company's or any of its subsidiaries' certificate of
incorporation or bylaws, as amended to date; (C) any other material change in
the Company's or any of its subsidiaries' corporate structure or business; or
(D) any other action that is intended, or could be expected, to impede,
interfere with, delay, postpone, or adversely affect the Offer, the Merger and
the other transactions contemplated by the Tender and Option Agreement, the
Merger Agreement and the ancillary documents thereto.
Grant of Purchase Option. The Tender and Option Agreement also provides
that each T&O Stockholder grants to Purchaser and Offeror an irrevocable option
(the "Purchase Option") to purchase for cash, in a manner set forth below, any
or all of the Shares (and including Shares acquired after the date hereof by
such Stockholder) beneficially owned by the T&O Stockholder at a price per share
(the "Exercise Price") equal to the Merger Consideration. The Merger
Consideration as it relates to the Options, Warrants and Purchase Rights shall
be an amount in cash equal to the excess, if any, of the Merger Consideration
over the per share exercise price of such Option, Warrant or Purchase Right,
without interest, in full settlement of the Company's (and the Surviving
Corporation's) obligations under each such Option, Warrant or Purchase Right. To
the extent that the per share exercise price of any Option, Warrant or Purchase
Right exceeds the Merger Consideration, such Option, Warrant or Purchase Right
shall be canceled and the T&O Stockholder shall not receive or be entitled to
receive any consideration from Purchaser, Offeror or the Company relating
thereto. The amount payable shall be subject to all applicable withholding
taxes.
Exercise of Purchase Option. The Tender and Option Agreement provides that
the Purchase Option may be exercised by Purchaser or Offeror, in whole or in
part, at any time or from time to time after the occurrence of any Trigger
Event. A Trigger Event will occur if: (i) the Merger Agreement becomes
terminable under circumstances that entitle Purchaser or Offeror to receive the
Termination Fee (regardless of whether the Merger Agreement is actually
terminated and whether such Termination Fee is then actually paid), (ii) the
Offer is consummated but, due to the failure of the T&O Stockholder to validly
tender and not withdraw all of the then outstanding Shares beneficially owned by
such T&O Stockholder, Purchaser has not accepted for payment or paid for all of
such T&O Stockholder's shares of Common Stock, (iii) a tender or exchange offer
for at least 20% of the Shares shall have been publicly proposed to be made or
shall have been
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made by another person or "group" (as defined in Section 13(d)(3) of the
Exchange Act) (other than Parent, Purchaser or Offeror), or (iv) it shall have
been publicly disclosed that (A) any person or "group" (other than Purchaser or
Offeror) shall have acquired or proposed to acquire beneficial ownership of more
than 20% of any class or series of capital stock of the Company (including the
Common Stock), through the acquisition of stock, the formation of a group or
otherwise, or shall have been granted any option, right or warrant, conditional
or otherwise, to acquire beneficial ownership of more than 20% of any class or
series of capital stock of the Company or any of its subsidiaries, or (B) any
person or "group" (other than Parent, Purchaser and Offeror) shall have entered
into or publicly offered to enter into a definitive agreement or an agreement in
principle with respect to a merger, consolidation or other business combination
with the Company or any of its subsidiaries.
Total Profit Remittance. The Tender and Option Agreement provides that in
the event that, within 12 months of the exercise of the Purchase Options,
Purchaser or Offeror sells, to a third party which is not an affiliate of
Purchaser, Shares acquired by means of exercise of the Purchase Options
("Exercise Shares") for an aggregate consideration (the "Aggregate
Consideration") greater than the aggregate Exercise Price (the "Aggregate
Exercise Price") paid for such Exercise Shares, Purchaser agrees to pay to the
T&O Stockholders an amount equal to the excess of the Aggregate Consideration
over the Aggregate Exercise Price. The excess of the Aggregate Consideration
over the Aggregate Exercise Price shall be distributed to the T&O Stockholders
who sold shares to Purchaser or Merger Sub pursuant to the exercise of the
Purchase Options in a manner so that each such T&O Stockholder shall have
received the same consideration after including such payments for each Share so
sold. In addition, in the event that, within 12 months of the exercise of the
Purchase Options, Parent, Purchaser or Offeror or any of their affiliates shall
consummate a merger or other business combination with the Company, or shall
purchase Shares pursuant to a tender offer for all Shares, at a price per share
(taking into account any stock dividends, stock splits, reverse stock splits,
recapitalizations, combinations, exchanges of shares or the like) in excess of
the Exercise Price paid for any Shares, Purchaser agrees to pay each T&O
Stockholder such excess for each Exercise Share purchased from such T&O
Stockholder.
Representations and Warranties. Under the Tender and Option Agreement, the
T&O Stockholders made customary representations and warranties to Purchaser and
Offeror, including with respect to their authority to enter into and perform
their obligations under the Tender and Option Agreement, the due execution and
delivery by the T&O Stockholders of the Tender and Option Agreement and their
good title to all of the Shares, free and clear of all encumbrances.
Each of Purchaser and Offeror has also made customary representations and
warranties under the Tender and Option Agreement, including with respect to
Purchaser's and Offeror's authority to enter into and perform its obligations
under the Tender and Option Agreement, the due execution and delivery by
Purchaser and Offeror of the Tender and Option Agreement, and each of
Purchaser's and Offeror's representation that it will not transfer or dispose of
the Option Shares except in compliance with the Securities Act.
Termination. The Tender and Option Agreement will terminate, with respect
to any T&O Stockholder, upon the purchase by Purchaser or Offeror of all of the
then outstanding Shares beneficially owned by such T&O Stockholder in accordance
with Section 6 of the Tender and Option Agreement, and otherwise, upon the
earliest of: (i) the Effective Time; (ii) termination of the Merger Agreement
other than upon, during the continuance of, or after, a Trigger Event; or (iii)
90 days following any termination of the Merger Agreement upon, during the
continuance of or after a Trigger Event (or if, at the expiration of such 90 day
period the Purchase Option cannot be exercised by reason of any applicable
judgment, decree, order, injunction, law or regulation, 10 business days after
such impediment to exercise has been removed or has become final and not subject
to appeal).
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(A) Recommendation of the Board of Directors.
The Board of Directors of the Company has unanimously approved the Offer
and the Merger and determined that the terms of the Offer and the Merger are
fair to, and in the best interests of, the stockholders
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of the Company and unanimously recommends that stockholders of the Company
accept the Offer and tender their Shares to the Offeror.
As set forth in the Offer, the Merger Agreement and the Letter of
Transmittal (the "Offer Documents"), the Offeror will purchase shares tendered
prior to the close of the Offer (and not validly withdrawn) if the conditions to
the Offer have been satisfied (or waived). One of the conditions to the Offer is
that there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer shares of Common Stock representing at least a majority
of the outstanding shares of Common Stock on a fully diluted basis (the "Minimum
Condition"). Stockholders considering not tendering their shares in order to
wait for the Merger should note that if the Minimum Condition is not satisfied
or any of the other conditions to the Offer are not satisfied, the Offeror is
not obligated to purchase any Shares, and can terminate the Offer and the Merger
Agreement and not proceed with the Merger. Under Delaware Law, the approval of
the Board and the affirmative vote of the holders of a majority of the
outstanding shares are required to approve the Merger. Accordingly, if the
conditions to the Offer are satisfied, the Offeror will have sufficient voting
power to cause the approval of the Merger without the affirmative vote of any
other stockholder. Under Delaware Law, if the Offeror acquires, pursuant to the
Offer or otherwise, at least 90% of the then outstanding Shares, the Offeror
will be able to approve and adopt the Merger Agreement and the Merger without a
vote of the Company's stockholders. The parties to the Merger Agreement have
agreed to use their best efforts to take, or cause to be taken, actions
necessary, proper or advisable to consummate and make effective in the most
expeditious manner possible the Merger and the transactions contemplated by the
Merger Agreement. If the Offeror does not acquire at least 90% of the then
outstanding Shares pursuant to the Offer or otherwise and a vote of the
Company's stockholders is required under Delaware Law, a significantly longer
period of time will be required to effect the Merger. The Offer will expire upon
the Expiration Date. The term "Expiration Date" means 12:00 midnight, New York
City time, on June 30, 1999, unless the Offeror shall have extended the period
of time for which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by the
Offeror, shall expire. A copy of the press releases issued by the Company and
Invensys on May 27, 1999 announcing the Merger and the Offer is filed as Exhibit
99.5 to this Schedule 14D-9 and is incorporated herein by reference.
(B) Background of the Offer; Reasons for the Recommendation.
Background of the Offer
At a meeting of the Board of Directors on January 22, 1999, the Board of
Directors and certain members of senior management analyzed a number of industry
trends and conditions, as well as issues specific to the Company. The Board of
Directors directed management to explore strategic alternatives for the Company.
On January 28, 1999, the Company met with Broadview International LLC
("Broadview") to discuss strategic alternatives, including the possible sale of
one or more product lines or the Company. On February 25, 1999, the Company
engaged Broadview as its financial advisor to assist the Company in exploring
its strategic alternatives.
During the period from February 1999 through May 20, 1999, Broadview
solicited interest in an acquisition of all or part of the Company from 21
potential acquirors, and the Company held discussions with seven companies. Four
companies expressed an interest in acquiring the Company.
On May 10, 1999, the Board of Directors met to discuss the state of the
Company's business and receive an update from Broadview's representatives on the
status of their activities. The Board reviewed with the senior management of the
Company the Company's financial condition, including the Company's expectations
regarding operating results and cash outlays for fiscal 1999. Broadview provided
an update on the status of discussions with potential acquirers, the current
merger and acquisitions market environment, and a preliminary valuation analysis
of the Company. The Board encouraged management and Broadview to continue to
pursue acquirers for the sale of all or part of the Company. The Board
designated Franchon M. Smithson, one of the Company's directors, as the Board
contact person for potential transaction discussions with interested parties.
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On May 17, 1999, Roy H. Slavin, President of Wonderware Corporation, an
affiliate of Invensys, contacted Jonathan C. Crane, President of the Company to
discuss a possible acquisition of the Company by an affiliate of Invensys and to
arrange a meeting on May 18, 1999 in Boston, Massachusetts. In addition, on May
17, 1999, the Company and Invensys executed the Confidentiality Agreement.
On May 18, 1999, Mr. Crane, Denis E. Liptak, Senior Vice President of
Business Development, and representatives of Broadview delivered a presentation
relating to the possible acquisition of the Company by Invensys to various
senior officers of Invensys and its affiliates.
On May 19, 1999 and May 20, 1999, the Company and its accountants held
additional meetings in Newton, Massachusetts with Invensys and its outside
counsel and accountants with respect to legal, business, accounting and
financial issues and to negotiate a possible purchase price. The Company's
outside legal counsel participated in discussions with respect to the proposed
terms of a possible acquisition of the Company by Invensys.
On May 20, 1999, the Company's Board of Directors, together with
representatives from the Company's outside counsel and from Broadview, held a
telephonic Board meeting to review, among other things, the price and principal
terms of the proposed transaction with Invensys, the status of negotiations with
other parties and a proposed timetable for negotiating and completing the
proposed transaction. The Board authorized Mr. Crane and Broadview to continue
negotiations with Invensys on certain terms.
On May 21, 1999, after additional negotiations with respect to the proposed
purchase price and certain other terms, the Company and Invensys signed a
non-binding letter agreement pursuant to which the per Share purchase price
would be $7.50 in cash, subject to the completion of due diligence, the
negotiation of a definitive acquisition agreement, and the execution of
customary support agreements by the principal stockholders of the Company (the
"Letter Agreement"). This non-binding Letter Agreement contained, among other
things, a prohibition on the solicitation of alternative acquisition proposals
for a limited period of time.
On May 22, 1999, Invensys's outside counsel distributed the first draft of
the Merger Agreement and the Tender and Option Agreement.
On May 23, 1999, Broadview distributed material to the Board which provided
an update on the proposed transaction with Invensys and included, among other
things, an updated valuation analysis of the Company. In addition, the Company's
outside counsel distributed to Invensys's outside counsel initial comments to
the Merger Agreement and the Tender and Option Agreement.
On May 24, 1999, the Board of Directors held a telephonic meeting, at which
representatives of the Company's outside counsel, Broadview, and Company
management participated. At the meeting, Broadview provided its preliminary
analysis of the proposed transaction. The Company's outside counsel reviewed
with the Board the provisions of the draft legal documentation, as well as their
principal comments with respect thereto. Management discussed the various
reasons they believed the Merger was in the best interests of the Company's
stockholders. Management and the Company's outside counsel and financial
advisors requested the Board's input with respect to certain terms of a possible
transaction. The Board of Directors discussed the status of the negotiations and
the terms of a possible transaction and provided guidance to management and the
Company's outside legal and financial advisors with respect to the negotiations.
The Board instructed management to continue the negotiations and report back to
the Board.
From May 24, 1999 through May 27, 1999, the Company, Invensys and their
respective legal and financial advisors participated in numerous conferences
during which the terms of the draft Merger Agreement, Tender and Option
Agreement and ancillary documents, and the manner in which the transaction
should be effected, were reviewed, discussed and negotiated extensively.
Furthermore, during this period, members of Invensys's management and legal and
financial advisors conducted additional legal, financial and business due
diligence on the Company.
On May 25, 1999, the Board of Directors held two additional meetings to
review the status of the transaction. At those meetings, management and the
Company's legal and financial advisors described in
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detail for the Board the status of the transaction generally and the principal
issues remaining with respect to the negotiations of the revised draft Merger
Agreement, Tender and Option Agreement and other documentation. Management and
the Company's advisors also reviewed, and the Board discussed at length, an
overall summary of the current terms of the transaction documents and the
transaction itself, as well as the potential risks and benefits of the proposed
transaction and related issues. At the first such meeting on May 25, 1999,
Broadview presented its fairness opinion to the Board that as of such date and
based upon and subject to the various assumptions and limitations set forth
therein, the cash consideration to be received by the holders of Shares in the
Offer and Merger is fair from a financial point of view to such stockholders.
The Board considered these issues carefully. During these meetings, management
and the Company's outside counsel and financial advisors requested the Board's
input with respect to certain terms of a possible transaction. The Board
discussed with management and the Company's legal advisors alternatives to
resolving the outstanding issues, and provided management with further direction
regarding the negotiation of the draft Merger Agreement.
Negotiations between management and counsel for the Company and Invensys
continued after the Board meeting on the evening of May 25, 1999. On May 26,
1999, after the conclusion of the principal negotiations, the Board held a
telephonic meeting at which the Company's legal advisors described in detail for
the Board the proposed resolution of the outstanding issues and the proposed
final terms of the Merger Agreement, Tender and Option Agreement, and ancillary
documents. After an extensive discussion concerning the proposed final terms and
after considering the advice of counsel and the Broadview opinion, the Board of
Directors unanimously approved the transaction, including the execution and
delivery of the Merger Agreement and the Tender and Option Agreement and related
matters. The Board instructed management and the Company's legal advisors to
work with Invensys' management and counsel to finalize the documentation based
upon the Board's approval of the proposed final terms. Management of the Company
and Invensys, and their respective legal advisors, worked together through the
morning of May 27, 1999 to finalize the documentation to reflect the agreed-upon
resolution of the remaining issues. The Merger Agreement and the Tender and
Option Agreement were executed and delivered during the morning of May 27, 1999.
Reasons for the Recommendation
At the meeting on May 27, 1999, the Board of Directors of the Company
unanimously approved the Offer and the Merger and determined that the terms of
the Offer and the Merger are fair to, and in the best interests of, the
stockholders of the Company, and unanimously resolved to recommend that
stockholders accept the Offer and tender their Shares.
In arriving at its decision to approve the transaction, including to
recommend acceptance of the Offer, the Board of Directors considered, among
other things, (i) the terms and conditions of the Merger Agreement, including
the amount and form of the consideration; (ii) the fact that the $7.50 per Share
price represents a premium of approximately 111% over the closing sale price of
$3.56 per Share as reported on the Nasdaq National Market on May 25, 1999 (the
last trading day prior to the date the Board of Directors authorized and
approved the transaction) and a premium of approximately 200% over the closing
sale price of $2.50 per Share as reported on the Nasdaq National Market on May
18, 1999 (the date of the first meeting between the Company and Invensys with
respect to a possible acquisition of the Company by Invensys); (iii) the Board
of Directors' knowledge of the recent losses of the Company, and that the
Company had experienced significant losses in each of its last five fiscal
years; (iv) the significant reduction in the Company's cash balances during the
first two quarters of fiscal 1999; (v) the possibilities of significant losses
and continuing reductions in cash balances for the remainder of fiscal 1999, and
the Board's consideration of the Company's prospects and strategic alternatives
in light of such possibilities; (vi) the likelihood that the proposed Merger
would be consummated, based on the experience, reputation and financial
condition of Invensys and the conditions to the Offer as set forth in the Merger
Agreement, including the fact that the consummation of the Merger is not
conditioned on there being no material adverse change to the Company after the
date of execution of the Merger Agreement or on the accuracy of any of the
representations and warranties made by the Company in the Merger Agreement as of
any date after the date of the Merger Agreement; (vii) the fact that the Offer
was higher than any of the offers received by the Company over the prior several
months and the uncertainty of the
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timing and economic value of a proposal from any third party and the uncertainty
of whether there would be a transaction with any third party that would yield
greater value for the Company's stockholders than the Offer and the Merger;
(viii) the advantages in a competitive environment of strategically aligning
with a large, well-capitalized company; (ix) the fact that pursuant to the
Merger Agreement, the Company is not prohibited from responding to certain
unsolicited offers to acquire the Company; (x) the recognition by the Board that
consummation of the Offer and the Merger will deprive current stockholders of
the Company of the opportunity to participate in the future growth prospects of
the Company; and (xi) the opinion of Broadview, dated May 25, 1999, to the
effect that as of such date and based upon and subject to the various
assumptions and limitations set forth therein, the cash consideration to be
received by the holders of Shares in the Offer and the Merger is fair from a
financial point of view to such stockholders.
THE FULL TEXT OF BROADVIEW'S FAIRNESS OPINION IS FILED AS EXHIBIT 99.6 TO
THIS SCHEDULE 14D-9 AND IS ALSO ATTACHED HERETO AS ANNEX B. STOCKHOLDERS ARE
URGED TO READ SUCH OPINION IN ITS ENTIRETY.
In light of all the factors set forth above, the Board of Directors
unanimously approved the transaction. In view of the variety of factors
considered in connection with its evaluation of the transaction, the Board of
Directors did not assign relative weights to the specific factors considered in
reaching its decision.
It is expected that if the Shares are not accepted for payment by the
Offeror in the Offer and if the Merger is not consummated, the Company's current
management, under the general direction of the Board of Directors, will continue
to manage the Company as an ongoing business. However, the Company may, under
these circumstances, continue to explore other possible methods of maximizing
stockholder value.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Company retained Broadview to provide financial advisory services in
connection with a possible business transaction for the Company. Pursuant to a
letter agreement dated February 25, 1999 between the Company and Broadview, the
Company, as compensation for such services, agreed to pay Broadview a
transaction fee equal to $500,000 plus 1.25% of the total consideration beyond
the first twenty million dollars paid directly or indirectly to or by the
Company to its stockholders in connection with an acquisitive transaction
(including, without limitation, contingent consideration and other post-closing
payments). In addition, the Company agreed to pay to Broadview a fee in the
amount of $200,000 upon the delivery to the Company of a fairness opinion. Such
$200,000 fee shall be credited against the transaction fee described above,
which will be due when the consideration is received by the Company's
stockholders. The Company also paid Broadview a one-time commitment fee of
$50,000 upon execution of the letter agreement. The Company has also agreed to
reimburse Broadview for its reasonable out-of-pocket expenses incurred in
connection with rendering financial advisory services, including fees and
disbursements of its legal counsel, up to a maximum aggregate amount of $25,000.
In addition, the Company has agreed to indemnify and hold harmless Broadview,
its managing directors, employees, agents, affiliates and controlling persons,
for certain claims, damages and liabilities related to or arising in any manner
out of any transaction, proposal or any other matter contemplated by its
engagement as financial advisor.
Except as set forth above, neither the Company nor any person acting on its
behalf has or currently intends to employ, retain or compensate any person to
make solicitations or recommendations to the stockholders of the Company on its
behalf with respect to the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) During the past 60 days, no transactions in Shares have been effected
by the Company or, to the Company's knowledge, by any of its executive officers,
directors, affiliates or subsidiaries, except as follows:
1. The Company has granted options to, and sold stock upon exercise
of stock options held by, employees and consultants under its stock plans.
2. One of the Company's executive officers participates in the
Company's Employee Stock Purchase Plan pursuant to which such officers
purchase Common Stock of the Company through payroll deductions.
21
<PAGE> 23
3. One of the Company's directors purchased 500 shares of the
Company's Common Stock on the open market on February 18, 1999 at a price
of $3.50 per share, and purchased 1,000 shares of Common Stock on the open
market on May 20, 1999 at a price of $2.50 per share.
(b) All of the Company's executive officers and directors are parties to
the Tender and Stock Option Agreement, the terms of which are described under
Item 3(b)(2) above, pursuant to which, among other things, such officers and
directors are obligated under certain circumstances to tender to Offeror and
Acquisition in the Offer all Shares beneficially owned by them.
To the knowledge of the Company, all of its executive officers, directors,
affiliates or subsidiaries who are also stockholders presently intend either to
tender their Shares in the Offer or vote in favor of the Merger.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth herein, no negotiation is being undertaken or is
underway by the Company in response to the Offer that relates to or would result
in (i) an extraordinary transaction, such as a merger or reorganization
involving the Company or any subsidiary thereof; (ii) a purchase, sale or
transfer of a material amount of assets by the Company or any subsidiary
thereof; (iii) a tender offer for or other acquisition of securities by or of
the Company; or (iv) any material change in the present capitalization or
dividend policy of the Company.
(b) Except as set forth herein, there is no transaction, board resolution,
agreement in principle or signed contract in response to the Offer that relates
to or would result in one or more of the events referred to in Item 7(a) above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The Information Statement attached hereto as Annex A is being furnished in
connection with the contemplated designation by Invensys, pursuant to the Merger
Agreement, of certain persons to be appointed to the Board of Directors of the
Company other than at a meeting of the Company's stockholders following the
purchase by Invensys, pursuant to the Offer, of the number of shares
representing not less than the number of Shares that will satisfy the Minimum
Condition.
22
<PAGE> 24
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are filed herewith:
EXHIBIT INDEX
<TABLE>
<S> <C>
Exhibit 99.1 Agreement and Plan of Merger dated as of May 27, 1999 among
Invensys, Acquisition, Merger Sub and the Company.
Exhibit 99.2 Tender and Option Agreement dated as of May 27, 1999 between
Acquisition, Merger Sub and each of the Stockholders of the
Company listed on Schedule A thereto.
Exhibit 99.3 Confidentiality Agreement dated as of May 17, 1999 between
the Company and Invensys.
Exhibit 99.4 Letter, dated June 3, 1999, from Jonathan C. Crane,
Chairman, President and Chief Executive Officer of the
Company, to the stockholders of the Company concerning the
Offer.
Exhibit 99.5 Press Release of the Company and Invensys, dated May 27,
1999.
Exhibit 99.6 Opinion of Broadview International LLC dated May 25, 1999
(attached hereto as Annex B).
Exhibit 99.7 Summary of Terms between Invensys and Jonathan C. Crane.
Exhibit 99.8 Memorandum dated March 19, 1999 from Jonathan C. Crane to
Denis Liptak.
Exhibit 99.9 Memorandum dated May 20, 1999 from Jonathan C. Crane to
Denis Liptak.
Exhibit 99.10 Amendment No. 1, dated as of May 26, 1999, to the Amended
and Restated Rights Agreement dated as of September 18, 1998
between the Company and BankBoston, N.A.
Exhibit 99.11 Letter Agreement dated March 24, 1999 by and between the
Company and Harlan B. Plumley.
Exhibit 99.12 Employment Agreement dated December 22, 1998 by and between
the Company and Jonathan C. Crane, filed as Exhibit 10.1 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1998, File No. 000-22841, and
incorporated herein by reference.
Exhibit 99.13 Loan Agreement dated December 22, 1998 by and between the
Company and Jonathan C. Crane, filed as Exhibit 10.2 to the
Quarterly Report on Form 10-Q for the quarter ended December
31, 1998, File No. 000-22841, and incorporated herein by
reference.
Exhibit 99.14 Promissory Note dated December 22, 1998 by and between the
Company and Jonathan C. Crane, filed as Exhibit 10.3 to the
Quarterly Report on Form 10-Q for the quarter ended December
31, 1998, File No. 000-22841, and incorporated herein by
reference.
Exhibit 99.15 Letter Agreement dated October 20, 1998 by and between the
Company and Stephen R. Quehl, filed as Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended December 31, 1998, File No. 000-22841, and
incorporated herein by reference.
Exhibit 99.16 Marcam Solutions, Inc. 1997 Stock Plan, as amended, filed as
Exhibit 4.1 to the Registration Statement on Form S-8, filed
with the SEC on March 30, 1999, Registration No. 333-75245,
and incorporated herein by reference.
Exhibit 99.17 Marcam Solutions, Inc. 1997 Non-Employee Director Stock
Option Plan, filed as Exhibit 10.6 to the Post-Effective
Amendment No. 1 on Form S-8 to Form S-4, filed with the SEC
on July 23, 1997, Registration No. 333-29285, and
incorporated herein by reference.
Exhibit 99.18 Marcam Solutions, Inc. 1997 Employee Stock Purchase Plan, as
amended, filed as Exhibit 10.15 to the Annual Report on Form
10-K for the fiscal year ended September 30, 1997, File No.
000-22841, and incorporated herein by reference.
</TABLE>
23
<PAGE> 25
<TABLE>
<S> <C>
Exhibit 99.19 Form of Letter Agreement dated June 10, 1997 by and between
Marcam Corporation, the Company and Messrs. Ebling and
Liptak and Ms. Clark, filed as Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997, File No. 000-22841, and incorporated herein by
reference.
Exhibit 99.20 Amended and Restated Rights Agreement dated as of September
18, 1998, between the Company and BankBoston, N.A., which
includes as Exhibit A the form of Certificate of Designation
of Preferred Stock, as Exhibit B the Form of Rights
Certificate, and as Exhibit C the Summary of Rights to
Purchase Preferred Stock, filed as Exhibit 4.5 to the
Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1998, File No. 000-22841, and
incorporated herein by reference.
Exhibit 99.21 The Company's Information Statement pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 thereunder
(attached hereto as Annex A).
</TABLE>
24
<PAGE> 26
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.
MARCAM SOLUTIONS, INC.
By: /s/ JONATHAN C. CRANE
------------------------------------
Jonathan C. Crane
Chairman of the Board, President,
and Chief Executive Officer
Dated: June 3, 1999
25
<PAGE> 27
ANNEX A
MARCAM SOLUTIONS, INC.
95 WELLS AVENUE
NEWTON, MA 02159
INFORMATION STATEMENT
(PURSUANT TO SECTION 14(F) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14F-1 THEREUNDER)
This Information Statement is being mailed on or about June 3, 1999, as a
part of the Solicitation/ Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") of Marcam Solutions, Inc. (the "Company") to the holders of
record of shares of Common Stock, par value $.01 per share, together with the
associated preferred stock purchase rights issued pursuant to the Amended and
Restated Rights Agreement, dated September 18, 1998, as amended through the date
hereof, between the Company and BankBoston, N.A., as Rights Agent (the "Rights"
and, together with the Common Stock, the "Shares") of the Company at the close
of business on or about May 28, 1999. You are receiving this Information
Statement in connection with the possible election of persons designated by
Purchaser (as defined below) to a majority of the seats on the Board of
Directors of the Company.
On May 27, 1999, the Company, Invensys plc, a public limited company
organized under the laws of England and Wales ("Invensys"), M Acquisition Corp.,
a Delaware corporation and an indirect wholly owned subsidiary of Invensys
("Purchaser"), and M Merger Sub, a Delaware corporation and a direct wholly
owned subsidiary of Purchaser and an indirect wholly owned subsidiary of Parent
(the "Offeror"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") in accordance with the terms and subject to the conditions of which
(i) Invensys and Purchaser will cause the Offeror to commence a tender offer
(the "Offer") for all outstanding Shares at a price of $7.50 per Share to the
stockholders of the Company in cash and without interest thereon, and (ii)
Merger Sub will be merged with and into the Company (the "Merger"). As a result
of the Offer and the Merger, the Company will become an indirect wholly owned
subsidiary of Invensys.
The Merger Agreement requires the Company to use its best efforts to cause
the directors designated by Purchaser to be elected to the Board of Directors of
the Company under the circumstances described therein. See "Boards of Directors
and Executive Officers of Invensys and the Company."
This Information Statement is required by Section 14(f) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 14f-1
thereunder. You are urged to read this Information Statement carefully. You are
not, however, required to take any action. Capitalized terms used herein and not
otherwise defined herein shall have the meaning set forth in the Schedule 14D-9.
Pursuant to the Merger Agreement, the Offeror commenced the Offer on June
3, 1999. The Offer is scheduled to expire at 12:00 Midnight, New York City time,
on June 30, 1999, unless the Offer is extended.
BOARDS OF DIRECTORS AND EXECUTIVE OFFICERS
OF INVENSYS AND THE COMPANY
The Shares are the only class of voting securities of the Company
outstanding. Each Share has one vote. As of May 27, 1999, there were 7,818,087
shares of Common Stock outstanding.
Pursuant to the Company's Certificate of Incorporation, the Company's Board
of Directors is divided into three classes: Class I Directors, whose terms
expire at the 2001 annual meeting of stockholders; Class II Directors, whose
terms expire at the 2002 annual meeting of stockholders; and Class III
Directors, whose terms expire at the 2000 annual meeting of stockholders. Each
director is elected for a three-year term of
A-1
<PAGE> 28
office, with one class of directors being elected at each annual meeting of
stockholders. Each director holds office until his successor is elected and
qualified or until his earlier death, resignation or removal.
The Merger Agreement provides that promptly upon the purchase of Shares
pursuant to the Offer, Purchaser shall be entitled to designate members of the
Board of Directors of the Company such that Purchaser, subject to the provisions
of Section 14(f) of the Exchange Act, will have a number of representatives on
the Board of Directors equal to the product obtained by multiplying the number
of directors on the Board by the percentage of outstanding Shares beneficially
owned by the Offeror and Purchaser (rounded up to the next whole number but
rounded down if rounding up would cause Purchaser's representatives to
constitute the entire Board). The Company has agreed, upon the request of
Purchaser, to promptly increase the size of the Board of Directors and/or use
its best efforts to secure the resignations of such number of directors as is
necessary to enable Purchaser's designees to be elected to the Board of
Directors and has agreed to cause Purchaser's designees to be so elected. The
Company has agreed, at the request of the Offeror and at its expense, to take
all actions necessary to effect the foregoing.
DIRECTORS AND EXECUTIVE OFFICERS OF INVENSYS
Invensys has informed the Company that Purchaser currently intends to
designate a majority of the directors of the Company following the consummation
of the Offer. It is currently anticipated that Invensys will designate Dr.
George W. Sarney, Roy H. Slavin, James C. Bays, Philip Maynard, Thomas G. Foley,
Samuel Auriemma, and/or James Mueller, or such other persons listed below as
Invensys shall determine (collectively the "Invensys Designees"). The names and
ages of the directors and executive officers of Invensys, Purchaser and the
Offeror, and their present principal occupations, are set forth below. Unless
otherwise indicated, each individual is a citizen of the United Kingdom and his
business address is Carlisle Place, London SW1P 1BX, England.
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<PAGE> 29
PARENT
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH
NAME AND AGE PARENT; MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------ ----------------------------------------------------------
<S> <C>
Lord Marshall of Knightsbridge (65)....... Chairman since June 1998 and Deputy Chairman from January
1998 until June 1998. Chairman of British Airways Plc
since 1993. Chairman of Inchcape plc since 1996. Deputy
Chairman of British Telecommunications plc since 1995.
Non-Executive Director of HSBC Holdings plc. President of
the Confederation of British Industry from May 1996 until
July 1998.
Ian C. Strachan (56)(a)................... Deputy Chairman since February 1999. Member of Board of
Directors of BTR plc ("BTR") since April 1995 and Chief
Executive Officer of BTR from January 1996 until February
1999. Deputy Chief Executive of RTZ Corporation plc from
1981 until 1991.
Allen M. Yurko (47)(b).................... Member of Board of Directors since 1991, Chief Executive
since February 1999, Managing Director and Chief Executive
Officer from January 1994 until February 1999, and
Managing Director and Chief Operating Officer from October
1992 until January 1994. Member of the Board of Directors
of Tate & Lyle plc since April 1996.
Kathleen A. O'Donovan (41)................ Member of Board of Directors and Chief Financial Officer
since February 1999. Member of Board of Directors of BTR
since July 1991 and Finance Director of BTR from July 1991
until February 1999. Partner at Ernst & Young from 1989
until June 1991. Member of Board of Directors of EMI Group
plc since November 1997.
Robert Bauman (68)(c)..................... Member of Board of Directors since February 1999. Member
of Board of Directors of BTR since August 1997 and
Chairman of BTR from May 1998 until February 1999. Chief
Executive of SmithKline Beecham plc from July 1989 until
April 1994. Chairman of British Aerospace plc from May
1994 until April 1998. Member of Board of Directors of
Reuters Holdings plc since 1993.
Sir Philip Beck (64)...................... Member of Board of Directors since 1991, Chairman from
March 1998 until June 1998 and Deputy Chairman from June
1998 until February 1999. Deputy Chairman of Railtrack plc
since May 1999. Member of Board of Directors of Delta plc
since August 1994. Member of Board of Directors of
Kitagawa Europe Limited since June 1990.
Rolf Borjesson (56)(d).................... Member of Board of Directors since July 1998. Chief
Executive and Managing Director of Rexam PLC since July
1996. Member of Board of Directors of Midway Holding AB
since May 1995. Member of Board of Directors of Svenska
Handelsbanken AB since August 1995. Chief Executive of PLM
AB from March 1988 until June 1996.
Hugh Collum (58).......................... Member of Board of Directors since October 1998. Executive
Vice President and Chief Financial Officer of SmithKline
Beecham plc from 1989 until 1998. Member of Board of
Directors of Whitehead Mann Group plc since 1997, Safeway
plc since 1997, and South African Breweries plc since
1999. Non-Executive Chairman of Chiroscience Group plc
since 1998.
</TABLE>
A-3
<PAGE> 30
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH
NAME AND AGE PARENT; MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------ ----------------------------------------------------------
<S> <C>
Sir Graham Hearne (61).................... Member of Board of Directors since February 1999. Member
of Board of Directors of BTR since June 1998. Chairman of
Enterprise Oil since 1991. Member of Board of Directors of
N.M. Rothschild & Sons Limited since 1977, NRM
Continuation Limited since 1997 and Gallagher Group plc
since 1987.
Simon Robertson (58)...................... Member of Board of Directors since February 1999. Member
of Board of Directors of BTR since March 1997. Managing
Director of Goldman Sachs International since September
1997. Chairman of Kleinwort Benson Group plc ("Kleinwort")
from 1996 until 1997 and Deputy Chairman of Kleinwort from
1992 until 1996. Member of Board of Directors of Inchcape
plc since May 1996 and Berry Bros. & Rudd since June 1998.
James F. Mueller (52)(e).................. Chief Operating Officer since February 1999 and member of
Board of Directors from April 1996 until February 1999.
President and Chief Operating Officer of Siebe Temperature
and Compliance Control from 1993 until February 1999.
James C. Bays (49)(f)..................... Senior Vice President since February 1999, General Counsel
and Chief Legal Officer since March 1996 and Vice
President from March 1996 until February 1999. Vice
President, Law and Assistant General Counsel of GenCorp.
Inc. from April 1993 until March 1996.
R.P.A. Coles (56)......................... Director of Legal Affairs, Group Senior Counsel since
February 1999 and Director of Legal Affairs and Company
Secretary from 1988 until February 1999.
Philip G. Cox (47)........................ Vice President-Operational Planning since February 1999,
Member of the Board of Directors from July 1998 until
February 1999 and Group Financial Director from July 1998
until February 1999. Has occupied various positions with
Parent since 1989.
Barry C. Francis (54)..................... Senior Vice President and Director of Public Relations
since February 1999. Group Public Relations Director from
1993 until February 1999.
John B. Saunders (56)..................... Senior Vice President and Director of Corporate Strategy
and Development since February 1999. Director, Corporate
Strategy and Development from January 1996 until February
1999. Senior Vice President and Director Corporate
Strategy at SmithKline Beecham plc from 1988 until 1994.
</TABLE>
PURCHASER AND OFFEROR
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH PURCHASER,
NAME AND AGE OFFEROR; MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------ -----------------------------------------------------------
<S> <C>
Dr. George W. Sarney (59)(g).............. Member of Board of Directors. Member of Board of Directors
of Siebe plc from January 1994 until February 1999,
Division Chief Executive for Invensys Intelligent
Automation Division, since February 1999, President and
Chief Operating Officer of Siebe Intelligent Automation
Division, from 1994 until February 1999 and President and
Chief Operating Officer of Siebe Temperature and Appliance
Controls Division, from June 1993 until September 1993.
Non-executive director of Bowthorpe plc.
</TABLE>
A-4
<PAGE> 31
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH PURCHASER,
NAME AND AGE OFFEROR; MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------ -----------------------------------------------------------
<S> <C>
Thomas G. Foley (57)(h)................... Member of Board of Directors, Vice President and Treasurer.
Chief Financial Officer of Invensys Intelligent Automation
Division, since February 1999 and Chief Financial Officer
of Siebe Intelligent Automation Division, from 1993 until
February 1999. Chief Financial Officer of Foxboro Company
since October 1990.
Philip Maynard (45)(i).................... Member of Board of Directors and Secretary. General Counsel
of Wonderware Corporation, since October 1997 and Assistant
General Counsel of Invensys Intelligent Automation
Division, since May 1999. Vice President, Secretary and
General Counsel for National Education Corporation, from
February 1994 until May 1999.
Roy H. Slavin (53)(j)..................... Member of Board of Directors. President and Chief Executive
Officer of Wonderware Corporation, since July 1995 and
Chairman of Wonderware Corporation from July 1995 until
April 1998; President and Chief Executive Officer of
Siemens Industrial Automation Incorporated, from October
1993 until June 1995.
</TABLE>
- ------------
(a) Mr. Strachan is a citizen of the United States and the United Kingdom and
his business address is Carlisle Place, London SW1P 1BX United Kingdom.
(b) Mr. Yurko is a citizen of the United States and his business address is
Carlisle Place, London SW1P 1BX United Kingdom.
(c) Mr. Bauman is a citizen of the United States and his business address is
Carlisle Place, London SW1P 1BX United Kingdom.
(d) Mr. Borjesson is a citizen of Sweden and his business address is Carlisle
Place, London SW1P 1BX United Kingdom.
(e) Mr. Mueller is a citizen of the United States and his business address is
Carlisle Place, London SW1P 1BX United Kingdom.
(f) Mr. Bays is a citizen of the United States and his business address is
Carlisle Place, London SW1P 1BX United Kingdom.
(g) Dr. Sarney is a citizen of the United States and his business address is 33
Commercial Street, Foxboro, Massachusetts 02035.
(h) Mr. Foley is a citizen of the United States and his business address is 33
Commercial Street, Foxboro, Massachusetts 02035.
(i) Mr. Maynard is a citizen of the United States and his business address is
100 Technology Drive, Irvine, California 92618.
(j) Mr. Slavin is a citizen of the United States and his business address is 100
Technology Drive, Irvine, California 92618.
None of the Invensys Designees (i) is currently a director of, or holds any
position with, the Company, (ii) has a familial relationship with any of the
directors or executive officers of the Company or (iii) based on information
provided to the Company by Invensys, to the best of Invensys's knowledge,
beneficially owns any securities (or rights to acquire any securities) of the
Company. The Company has been advised by Invensys that, to the best of
Invensys's knowledge, none of the Invensys Designees has been involved in any
transaction with the Company or any of its directors, executive officers or
affiliates which are required to be disclosed pursuant to the rules and
regulations of the Securities and Exchange Commission (the "Commission" or
"SEC"), except as may be disclosed herein or in the Schedule 14D-9.
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<PAGE> 32
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Biographical information concerning each of the Company's current directors
and executive officers is as follows:
<TABLE>
<CAPTION>
CLASS OF PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH THE
NAME AND AGE DIRECTOR COMPANY; MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------ -------- -----------------------------------------------------------
<S> <C> <C>
Jonathan C. Crane (49)...... III Chairman of the Board of Directors, President and Chief
Executive Officer of the Company since November 1997; Chief
Operating Officer of Geotek Communications, Inc., a
wireless voice and data communications company, from
October 1995 until July 31, 1997; consultant in the
telecommunications industry from February 1995 to October
1995; President and Chief Executive Officer of Lightstream
Corporation, a majority owned subsidiary of Bolt, Beranek &
Newman, which developed and marketed ATM switching network
products, from January 1994 to January 1995. Prior to 1994,
Mr. Crane held a number of management positions with MCI
Corporation, including Executive Vice President,
Multi-National Accounts.
Denis E. Liptak (46)........ Senior Vice President of Business Development of the
Company since May 13, 1999; Vice President of Finance and
Chief Financial Officer of the Company from August 1997 to
May 12, 1999; Vice President, Treasurer and Controller of
the Company from July 1997 to August 1997; Vice President,
Treasurer and Controller of Marcam Corporation (the
Company's former parent entity) from December 1996 to July
1997; Director of Finance of Marcam Corporation from
December 1994 to November 1996. Prior to joining Marcam
Corporation in 1994, Mr. Liptak held a number of financial
management positions at Digital Equipment Corporation.
Harlan B. Plumley (47)...... Vice President of Finance and Chief Financial Officer since
May 13, 1999; Vice President of Financial Operations from
March 24 to May 13, 1999; Vice President, Treasurer and
Corporate Controller from November 1997 to March 24, 1999
and Director of Finance for the Americas from April to
November 1997. Before joining Marcam, Mr. Plumley was
employed at Digital Equipment Corporation for fifteen years
in a variety of financial management positions. His most
recent positions at Digital Equipment Corporation were as
the Director of Finance and Planning for the PC Desktop
Business (1996 to April 1997) and the Director of Finance
and Operations for the Multia Business Group (1994 to
1996).
Stephen R. Quehl (45)....... Executive Vice President, Worldwide Field Operations since
November 1998; Senior Vice President, Worldwide Field
Operations for Gensym Corporation, an expert systems
software and services company, from October 1997 to
November 1998; Senior Vice President, Americas Field
Operations at Wang Software, Wang Laboratories, Inc., which
later became Eastman Software, Inc., a subsidiary of
Eastman Kodak, from September 1994 to August 1997. From
1989 to 1994, Mr. Quehl held several executive positions at
ViewStar Corporation, a work management software and
services company.
</TABLE>
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<PAGE> 33
<TABLE>
<CAPTION>
CLASS OF PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT WITH THE
NAME AND AGE DIRECTOR COMPANY; MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------ -------- -----------------------------------------------------------
<S> <C> <C>
John Campbell (51).......... II Director of the Company since July 1997; Executive Vice
President of the Company from August 1997 through June
1998. Mr. Campbell was a co-founder of Marcam Corporation
and served as a director of Marcam Corporation since its
organization in 1980. Mr. Campbell also served as Marcam
Corporation's Executive Vice President from 1980 until
April 1996.
E. Clark Grimes (50)........ II Director of the Company since December 22, 1998. President
of Meritus Consulting Services, LLC, a management
consulting firm specializing in addressing the operational
needs of manufacturing companies, from 1991 to 1997; also a
director of New Canaan Bank & Trust Company.
Joe M. Henson (65).......... I Director of the Company since December 4, 1997; Chairman of
the Board of Legent Corporation, a computer systems
software company, from November 1989 to February 1995; also
a director of Harrah's Entertainment, Inc.
Michael J. Quinlan (57)..... III Director of the Company since June 1997; President and
Chief Executive Officer from July 1997 until November 1997;
President and Chief Executive Officer of Marcam Corporation
from January 1996 until August 1997 and director of Marcam
Corporation from February 1996 until August 1997; Senior
Vice President of Marketing for Telular Corporation, a
developer of fixed wireless phone systems, from June 1994
to October 1995; Director of Technology at the Wharton
School from July 1992 to June 1994; Chief Executive Officer
of Access Technology group, a multimedia production company
specializing in executive presentations and sales tools,
from July 1993 to June 1994. Prior to 1992, Mr. Quinlan
held a number of senior management positions including
Director of Strategic Planning, President of the National
Accounts Division and Chief Financial Officer of IBM's Asia
Pacific Group.
Franchon M. Smithson (47)... III Director of the Company since August 1997; member of
General Atlantic Partners, LLC since 1995; from 1992 to
1995, Senior Vice President and Chief Financial Officer of
Legent Corporation, a computer systems software company.
William W. Wyman (60)....... I Director of the Company since December 22, 1998; Managing
Partner of Oliver, Wyman & Company, a consulting firm he
founded which specializes in management consulting to
financial institutions in North America and Europe, from
1984 to 1995; employed at Booz, Allen & Hamilton, an
international management consulting firm, from 1965 to
1984; also a director of SS&C Technologies, Inc., a company
which provides client/server-based financial software
solutions for financial institutions.
</TABLE>
THE COMPANY'S BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company met seven times and took action by
unanimous written consent three times during the fiscal year ended September 30,
1998. The Board of Directors has a standing Audit Committee and a standing
Compensation Committee, the memberships of which were most recently fixed by
A-7
<PAGE> 34
the Board of Directors on December 22, 1998, and does not have a standing
committee for nominating directors. The Audit Committee, which oversees the
accounting and financial functions of the Company, including matters relating to
the appointment and activities of the Company's independent auditors, met six
times during fiscal 1998. Messrs. Smithson and Wyman are currently members of
the Audit Committee. The Compensation Committee of the Company, which reviews
and makes recommendations concerning executive compensation and administers
certain of the Company's stock plans, took action by written consent 16 times
during fiscal 1998. Messrs. Henson and Grimes are currently members of the
Compensation Committee.
All directors attended at least 75 percent of the total number of meetings
of the Board of Directors and the total number of meetings of all committees of
the Board on which they served during fiscal 1998.
DIRECTOR COMPENSATION
The Company compensates its non-employee directors through a one-time
initial grant under the Company's 1997 Non-Employee Director Stock Option Plan
(the "Directors Plan") of a stock option to purchase 10,000 shares of the
Company's Common Stock and an annual grant under the Directors Plan of a stock
option to purchase 1,500 shares of the Company's Common Stock. In addition,
non-employee directors receive $1,000 for each Board meeting and committee
meeting attended on a day other than when the Board of Directors meets.
EXECUTIVE COMPENSATION
The following table sets forth the compensation received by (i) any person
who served as the Chief Executive Officer of the Company during any part of
fiscal 1998, (ii) the four other most highly compensated executive officers of
the Company who served as such at September 30, 1998 and whose annual
compensation and bonus were $100,000 or more, and (iii) any person for whom
disclosure would have been provided pursuant to clause (ii) but for the fact
that the person did not serve as an executive officer at September 30, 1998 (the
"Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS/
ANNUAL SECURITIES
COMPENSATION(1) UNDERLYING
------------------------ OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) (#)(3)(4) COMPENSATION($)(1)(5)
- --------------------------- ---- --------- ----------- ---------------- ---------------------
<S> <C> <C> <C> <C> <C>
Jonathan C. Crane(6).............. 1998 $315,442 $ 75,000 296,270 $31,480
President, Chief Executive 1997 -- -- -- --
Officer and Chairman
Denis E. Liptak(7)................ 1998 $155,000 $113,100 10,000 $ 5,531
Senior Vice President of 1997 $127,504 $ 60,600 25,000 $ 4,792
Business Development 1996 $105,384 $ 24,562 -- $ 2,436
Former executives:
Thomas D. Ebling(8)............... 1998 $175,000 $141,481 15,000 $ 5,066
Executive Vice President 1997 $175,000 $ 95,500 57,896 $ 4,823
Customer Operations 1996 $178,740 $ 23,500 -- $ 2,640
Michael J. Quinlan(9)............. 1998 $ 84,923 $103,600 35,000 $ 542
President and Chief 1997 $240,000 $103,600 125,000 $ 70
Executive Officer 1996 $175,385 $ 40,000 -- $ 84
Sharon R. Clark(10)............... 1998 $211,076 $ 32,178 -- $ 323
Vice President, Marketing 1997 $160,000 $ 53,000 37,500 $ 4,512
and Communications 1996 -- -- -- $ 16
</TABLE>
- ---------------
(1) During fiscal 1996, all compensation was paid solely by Marcam Corporation,
the Company's former parent entity. In July 1997, Marcam Corporation spun
off in a tax-free distribution certain of its business assets and product
lines, transferring them to the Company, at that time a wholly owned
subsidiary of
A-8
<PAGE> 35
Marcam Corporation. Marcam Corporation distributed all of its ownership
interest in the Company by means of a distribution on July 29, 1997 to its
stockholders of record on July 23, 1997. In connection with these
transactions, certain of the Named Executive Officers were transferred from
Marcam Corporation to the Company. As a result, during fiscal 1997,
compensation was paid by both Marcam Corporation and the Company.
(2) Includes bonus payments earned by the Named Executive Officers in the year
indicated for services rendered in such year which were paid in the
subsequent year.
(3) The Company did not grant any restricted stock awards or stock appreciation
rights ("SARs") or make any long-term incentive plan payouts to the Named
Executive Officers during the fiscal year ended September 30, 1998. Neither
the Company nor Marcam Corporation granted any restricted stock awards or
SARs or made any long-term incentive plan payouts to the Named Executive
Officers during the fiscal year ended September 30, 1997 or 1996.
(4) All options other than the 10,000 options granted to Mr. Quinlan under the
Directors Plan have been granted under the Company's 1997 Stock Plan.
(5) Unless otherwise noted, "All Other Compensation" consists of amounts
contributed on behalf of the Named Executive Officers under group life
insurance policies of the Company, as well as matching contributions made
by the Company to the 401(k) Plan based on a percentage of the individual's
contributions to such 401(k) Plan.
(6) Mr. Crane joined the Company in October 1997 and was elected Chairman of
the Board, President and Chief Executive Officer in November 1997. The
296,270 options granted during fiscal 1998 were granted on October 27, 1997
upon the commencement of his employment. Of the $31,480 listed under "All
Other Compensation," $31,414 was paid to Mr. Crane as a reimbursement of
monthly housing rental expenses through September 30, 1998, and the
remainder was paid in the form of a contribution on behalf of Mr. Crane
under group life insurance policies of the Company. See footnote 5 above.
(7) Mr. Liptak served as the Company's Vice President of Finance and Chief
Financial Officer from August 1997 through May 12, 1999, and has served as
Senior Vice President of Business Development since May 13, 1999. The
10,000 options granted during fiscal 1998 were granted in two equal grants
of 5,000 shares each on April 21, 1998 and April 27, 1998, respectively.
The 25,000 options granted during fiscal 1997 were granted on July 28,
1997.
(8) Mr. Ebling served as the Company's Executive Vice President, Customer
Operations from September 1998 through March 31, 1999. Mr. Ebling served as
the Company's Senior Vice President from December 1997 through August 1998
and as Senior Vice President, Development and Support from July 1997
through November 1997. The 15,000 options granted during fiscal 1998 were
granted on October 1, 1997. The 57,896 options granted during fiscal 1997
were granted on July 28, 1997.
(9) Mr. Quinlan served as the Company's President and Chief Executive Officer
from July 28, 1997 through November 17, 1997 and resigned his employment
with the Company effective January 27, 1998. Of the 35,000 options granted
in fiscal 1998, 25,000 were granted on October 23, 1997 and the remaining
10,000, which were granted under the Directors Plan, were granted on
January 29, 1998.
(10) Ms. Clark served as the Company's Vice President, Marketing and
Communications from July 1997 through December 31, 1997. Compensation
payments during fiscal 1998 include a lump-sum payment of $166,153 pursuant
to an Employment Contract between the Company and Ms. Clark. The 37,500
options granted during fiscal 1997 were granted on July 28, 1997.
A-9
<PAGE> 36
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on stock option grants made
pursuant to the Company's 1997 Stock Plan during the fiscal year ended September
30, 1998 to the Named Executive Officers.
<TABLE>
<CAPTION>
PERCENT OF
TOTAL POTENTIAL REALIZABLE VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SECURITIES GRANTED TO EXERCISE STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION -----------------------------
NAME GRANTED(#) YEAR(1) ($/SH) DATE 5%($) 10%($)
---- ---------- ---------- -------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jonathan C. Crane(3)....... 296,270 39.7% $ 8.25 10/27/07 $1,535,855 $3,628,490
Denis E. Liptak(4)......... 5,000 * $ 9.00 04/21/08 $ 23,778 $ 62,334
5,000 * $ 8.25 04/27/08 $ 27,583 $ 66,252
Thomas D. Ebling(5)........ 15,000 2.0% $11.00 10/01/07 $ 35,810 $ 140,378
Michael J. Quinlan(6)...... 25,000 3.4% $ 9.13 10/23/07 $ 107,545 $ 283,771
Sharon R. Clark............ -- -- -- -- -- --
</TABLE>
- ---------------
* less than 1%
(1) Options to purchase a total of 746,099 shares of Common Stock were granted
in fiscal 1998 under the Company's 1997 Stock Plan, the purpose of which is
to provide incentives to key employees who are in a position to make
significant contributions to the Company.
(2) Amounts reported in this column represent hypothetical amounts that may be
realized upon exercise of the options immediately prior to the expiration of
their term assuming the specified compounded rates of appreciation of the
Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Company's estimate of future stock price
growth. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and the future
performance of the Company's Common Stock. There can be no assurance that
the rates of appreciation assumed in this table can be achieved or that the
amounts reflected will be received by the individuals. This table does not
take into account (i) any appreciation in the price of the Common Stock from
the date of grant to the current date or (ii) any applicable tax or expense
payments that may be associated with such option exercises.
(3) Of the indicated options, 59,254 options are exercisable as of September 30,
1998 and the remaining 237,016 options are exercisable periodically through
October 2001.
(4) Of the indicated options, 2,500 options are exercisable as of September 30,
1998 and the remaining 7,500 options are exercisable periodically through
April 2001.
(5) Of the indicated options, 3,000 options are exercisable as of September 30,
1998 and the remaining 12,000 options are exercisable periodically through
October 2001.
(6) Of the indicated options, 25,000 options were exercisable as of September
30, 1998.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to options to
purchase the Company's Common Stock granted under the Company's 1997 Stock Plan,
including (i) the number of shares of Common Stock received upon exercise of
options in the fiscal year ended September 30, 1998, (ii) the net value realized
upon
A-10
<PAGE> 37
such exercise, (iii) the number of unexercised options held as of September 30,
1998, and (iv) the aggregate dollar value of unexercised options as of September
1998.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT
SHARES AT SEPTEMBER 30, 1998(#) SEPTEMBER 30, 1998($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jonathan C. Crane...... -- -- 59,254 237,016 $22,220 $88,882
Denis E. Liptak........ -- -- 9,375 25,625 $14,190 $38,042
Thomas D. Ebling....... 40,396 $228,199 18,000 14,500 $50,925 $ 5,213
Michael J. Quinlan..... -- -- 75,000 10,000 $51,250 $21,250
Sharon R. Clark........ 15,000 $184,287 22,500 -- $52,088 --
</TABLE>
- ---------------
(1) Value is based on the difference between the option exercise price and the
fair market value per share of Common Stock as of September 30, 1998
($8.625) multiplied by the number of shares underlying the option.
CERTAIN EMPLOYMENT ARRANGEMENTS
Jonathan C. Crane. The Company has entered into an employment agreement
with Jonathan C. Crane, the Company's Chairman of the Board, Chief Executive
Officer and President (the "Crane Agreement"). Under the Crane Agreement, Mr.
Crane is to serve as the Company's Chairman of the Board, Chief Executive
Officer and President for a term from December 22, 1998 through September 30,
1999. The term of the Crane Agreement automatically extends thereafter for
additional one-year periods, unless terminated by either party at least 30 days
prior to the expiration of the then current term. Pursuant to the Crane
Agreement, Mr. Crane will receive a base salary (the "Base Salary") and will be
eligible to earn a bonus if the Company meets certain performance objectives
established by the Compensation Committee of the Board of Directors (the
"Committee"). The Crane Agreement provides that Mr. Crane's Base Salary for the
initial term will be paid at an annual rate of $398,000.
If the Company terminates Mr. Crane's employment without Cause (as defined
in the Crane Agreement) either (i) prior to a Change in Control (as defined in
the Crane Agreement) or (ii) after the first anniversary of a Change in Control,
then, in addition to the payment of normal post-termination benefits in
accordance with the Company's retirement, insurance and other benefit plans and
arrangements, (x) Mr. Crane will receive a severance benefit equal to 12 months
of Base Salary at the rate paid to him immediately prior to such termination and
(y) Mr. Crane will have 12 months following the date of such termination during
which to exercise any options which were vested and exercisable as of the date
of such termination. If at any time during a period commencing with a Change in
Control and ending on the first anniversary of a Change in Control, either (i)
the Company terminates Mr. Crane's employment without Cause or (ii) Mr. Crane
terminates his employment for specified Good Reason (as defined in the Crane
Agreement), then, in addition to the payment of normal post-termination benefits
in accordance with the Company's retirement, insurance and other benefit plans
and arrangements, (x) Mr. Crane will receive a severance benefit equal to (1) 24
months of Base Salary at the rate paid to him immediately prior to such
termination plus (2) the average of the annual bonuses paid to him by the
Company with respect to the most recently completed three fiscal years (or such
shorter period as Mr. Crane shall have been employed by the Company) and (y) all
options that were unvested as of the date of such termination will become
immediately vested and exercisable as of such date and Mr. Crane will have 12
months following such date during which to exercise any such options. If the
Company terminates Mr. Crane's employment due to a disability (as defined in the
Crane Agreement), then, in addition to the payment of normal post-termination
benefits in accordance with the Company's retirement, insurance and other
benefit plans and arrangements, (x) Mr. Crane will receive a severance benefit
equal to six months of Base Salary at the rate paid to him immediately prior to
such termination and (y) Mr. Crane will have 12 months following such
termination to exercise any options granted to Mr. Crane after December 22, 1998
which were vested and exercisable as of the date of such
A-11
<PAGE> 38
termination. If Mr. Crane dies, then, in addition to the payment of normal
post-termination benefits in accordance with the Company's retirement, insurance
and other benefit plans and arrangements, (x) the Company will pay to Mr.
Crane's estate an amount equal to six months of Mr. Crane's Base Salary at the
rate paid to him immediately prior to such termination and (y) Mr. Crane's
estate will have 12 months following such termination to exercise any options
granted to Mr. Crane after December 22, 1998 and which were vested and
exercisable at the date of his death. If the Company terminates Mr. Crane's
employment for Cause, or Mr. Crane terminates his employment for other than Good
Reason, Mr. Crane will be entitled to receive compensation and benefits through
the date of termination and payment of normal post-termination benefits in
accordance with the Company's retirement, insurance and other benefit plans and
arrangements.
The Crane Agreement also contains provisions prohibiting Mr. Crane from
directly or indirectly soliciting any of the Company's employees or customers
during the term of the Crane Agreement for the one-year period following the
termination of Mr. Crane's employment with the Company. In addition, Mr. Crane
has entered into an Employee Agreement on Ideas, Inventions, Confidential
Information, and Non-Competition, which contains restrictions (i) on the use of
the Company's proprietary information and (ii) on Mr. Crane's ability to compete
with the Company.
In connection with the execution of the Crane Agreement, the Company also
entered into a loan agreement with Mr. Crane, whereby the Company agreed to loan
Mr. Crane up to $700,000 (the "Loan") at an interest rate equal to the
applicable Federal rate in effect on the date of the drawdown under Section
1274(d) of the Internal Revenue Code of 1986, as amended, compounded
semiannually. The Loan matures on the earlier of (i) October 27, 2001, (ii) 120
days following the expiration or termination of Mr. Crane's employment with the
Company under the Crane Agreement, or (iii) prior to Mr. Crane's commencement of
any employment, consultancy or advisory services with or to any person that the
Board of Directors determines to be a competitor of the Company.
In connection with the Offer and the Merger, Invensys and Mr. Crane
executed a summary of terms with respect to his relationship with the Company
and its affiliates after consummation of the Offer. This arrangement provides
that Mr. Crane will provide consultative assistance on matters involving
customers, strategies and organizational matters for 90 days after the
completion of the Offer. In consideration for this service, the Company shall,
and Invensys shall cause the Company to, pay to Mr. Crane $250,000 subject to
repayment in full of the Loan. This payment will be made regardless as to
whether Mr. Crane becomes an employee or consultant of any other party and thus
becomes less available to perform services during such 90-day period.
Additionally, Invensys and the Company will honor in accordance with its terms
the Crane Agreement and will pay the amounts due under the Crane Agreement with
respect to the termination of Mr. Crane's employment with the Company promptly
after consummation of the Offer. Furthermore, the loan agreement between the
Company and Mr. Crane and the promissory note relating thereto, will remain in
effect through the 90-day period, except that Mr. Crane will not borrow any
additional amounts under the loan agreement or the promissory note. At the end
of the 90-day period, Mr. Crane will repay the entire principal amount
($410,000) of such Loan and all accrued interest on this Loan prior to receiving
the $250,000 consideration referred to above.
Stephen R. Quehl. Stephen R. Quehl was hired on November 11, 1998 as
Executive Vice President, Worldwide Field Operations. In Mr. Quehl's offer
letter, dated October 20, 1998 (the "Offer Letter"), the Company agreed to pay
him a signing bonus equal to $72,783, of which $22,783 is repayable to Marcam
if, within the first twelve (12) months of his employment, Mr. Quehl voluntarily
resigns. The amount to be repaid is reduced by 1/12 per month commencing upon
the completion of his first month of employment. In addition, in the Offer
Letter, the Company agreed that if Mr. Quehl's employment was terminated during
the first year for any reason other than gross misconduct, Mr. Quehl would
receive a severance benefit, payable in one lump sum equal to one year's then
current base salary. Further, in the event of a change of control, Mr. Quehl is
entitled to twelve months' severance if his position is reduced, if he is forced
to move, or if the acquiring company does not offer him employment.
Michael J. Quinlan. Under a letter agreement dated October 23, 1997
between Michael J. Quinlan and the Company, Mr. Quinlan resigned as President
and Chief Executive Officer effective November 17, 1997
A-12
<PAGE> 39
and remained an employee of the Company through January 27, 1998 (the
"Resignation Date"). Under the terms of the letter agreement, Mr. Quinlan was
granted an option to purchase 25,000 shares of Common Stock under the Company's
1997 Stock Plan, such option to be 100% vested upon the date of grant and at an
exercise price of $9.125 per share. As of the Resignation Date, Mr. Quinlan's
existing unvested stock options were forfeited in accordance with their terms
and the period of time in which to exercise any vested options was extended,
pursuant to a prior agreement, through the balance of the term of such options.
The letter agreement superseded an employment agreement with Mr. Quinlan dated
June 10, 1997.
Other Named Executive Officers. The Company is party to employment
agreements with its other Named Executive Officers (the "Employment
Agreements"). The Employment Agreements provide that if an individual's
employment with the Company or any of its subsidiaries or affiliates is either
terminated by the Company for any reason (other than gross dereliction of duty
or a criminal or civil judgment which, in the good faith judgment of the Company
or its successor, renders the individual unsuitable for such employment) or is
terminated for Good Reason (as defined below), then: (a) the Company will pay
the individual an amount equal to the sum of (i) one year's then current base
salary, (ii) an amount, determined at the individual's then current salary, for
all earned but untaken vacation days, and (iii) any award previously made to the
individual under the then current bonus plan which has not yet been paid; (b)
the Company will make payments on the individual's behalf under the Consolidated
Omnibus Budget Reconciliation Act of 1985 for one year; (c) any options
previously granted to the individual will become immediately vested and
exercisable, including any options previously granted under the stock plans of
the Company's former parent, Marcam Corporation; and (d) the Company will
otherwise pay the individual's ordinary post-termination benefits in accordance
with its retirement, insurance and other benefit plans and arrangements.
"Good Reason" is defined in the Employment Agreements as (a) a reduction in
compensation or benefits without providing an adequate substitute therefor; (b)
a substantial adverse change in the nature of duties or authority, or in title,
position or status; (c) the relocation by the Company of the office outside the
thirty mile radius of the place where it was located on the date of the
Employment Agreement; (d) a material breach by the Company of any employment,
compensation or similar agreement with the individual; and (e) the failure by
the Company to give the individual, within ten days after request, written
assurance of its intent to honor the Employment Agreement.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
INTRODUCTION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for developing the Company's executive compensation policies and
advising the Board of Directors with respect to such policies. Joe M. Henson and
E. Clark Grimes, both non-employee directors, are currently the members of the
Committee. The Committee's goal is to create and implement a compensation
program which will attract and retain talented executives and provide incentives
to management to enhance Company performance by basing a significant portion of
annual and long-term compensation on achievement of targeted levels of
performance.
EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program consists of three elements:
salary (base pay); incentive pay (cash bonus); and stock options. This program
applies to the Company's key management positions, including the position of
Chief Executive Officer. All of the Company's executives also are eligible for
employee benefits offered to all Company employees, including life, health,
disability and dental insurance, and the Company's savings plan and employee
stock purchase plan.
Salary. Base salary of top management in fiscal year 1998 was set by the
Committee after review of salary levels in the software industry for various
executive positions. The Committee reviewed salary information presented in
several independent surveys, ranging from broad-based overviews of the entire
A-13
<PAGE> 40
software industry to information regarding entities more similar to the Company:
software companies with over $50 million in revenue. Based on such comparative
information, the Committee used "median" levels as a guide for setting salaries
for its top management positions.
Incentive Pay. Incentive pay in the form of cash bonuses for executive
officers of the Company is based either (a) 100% on the Company's financial
performance, or (b) on a combination of the Company's financial performance and
the achievement of certain performance targets within specified timeframes.
Generally, a budgeted amount for incentive pay for financial performance is
set for each executive by the Committee, and payment is made based on
achievement of specific performance targets. For executives with managerial
responsibilities chiefly linked with one business unit, performance targets
relate to that profit center. For executives with diverse responsibilities and
for the most senior management, performance targets may also include those set
in terms of the Company's earnings-per-share ("EPS").
The amount of incentive pay, if any, is based on achievement of the
specified performance targets. No incentive pay is payable until performance
exceeds 50% of targeted levels. From 50% to 150% of targeted performance, the
executive receives 2% of the budgeted amount for each 1% of performance
achieved. Bonuses based on business unit contribution are paid when the
corresponding revenue is collected by the Company. Incentive pay based on
financial performance is payable quarterly. During fiscal 1998, incentive pay
received by all Company executives ranged from $32,178 to $141,481, including
bonuses paid in the first quarter of fiscal 1999 for the Company's performance
in the fourth quarter of fiscal 1998.
Stock Options. Executives are eligible for stock option grants under the
"Incentive Stock Options Program" (the "ISO Program"). This program is designed
to provide long-term performance and retention incentives for top management. An
executive's participation in this program is determined by the Committee.
Executives participating in the ISO Program are eligible for stock option
grants in amounts determined by the Committee. Stock option grants are made by
the Committee in its discretion upon review of an executive's performance. The
stock options granted pursuant to the ISO Program have an exercise price equal
to the fair market value of the Company's Common Stock at the time of grant and,
generally, options granted vest 25% on the date of grant, and in equal annual
installments for three years thereafter.
A-14
<PAGE> 41
During fiscal 1998, Messrs. Crane, Ebling, Liptak and Quinlan were granted
options to purchase 296,270, 15,000, 10,000 and 25,000 shares of Common Stock,
respectively, pursuant to the ISO Program. Stephen R. Quehl was granted an
option to purchase 150,000 shares of Common Stock pursuant to the ISO Program
upon the commencement of his employment on November 11, 1998.
CHIEF EXECUTIVE OFFICER'S COMPENSATION
Mr. Crane's compensation for fiscal 1998 was determined in accordance with
the executive compensation program described above.
Salary and Incentive Pay. Mr. Crane's fiscal 1998 base salary of $350,000
was based upon the comparative information reviewed by the Committee as
described above. Mr. Crane's incentive pay, based 100% on achievement of EPS
performance targets, was $75,000 in 1998. During fiscal 1998, Mr. Crane also
received $31,414 as reimbursement of monthly housing rental expenses through
September 30, 1998. Mr. Crane was granted an option to purchase 296,270 shares
under the 1997 Plan upon the commencement of his employment on October 27, 1997.
Mr. Crane's total compensation for fiscal year 1998 is set out in detail in
the Summary Compensation Table above.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section
162(m)"), generally disallows a tax deduction to the Company for compensation in
excess of $1 million paid to any of the Company's Named Executive Officers.
Qualifying performance-based compensation, however, will not be subject to the
deduction limit if certain requirements are met. The Committee has decided that,
for so long as it is consistent with its overall compensation objective, the
Committee will operate the 1997 Stock Plan so that compensation attributable to
options granted pursuant to the 1997 Stock Plan will qualify as performance-
based for purposes of Section 162(m) and deductions attributable to such options
will therefore not be disallowed by Section 162(m). Therefore, the Committee
will grant options under the 1997 Stock Plan with an exercise price per share
equal to the fair market value of the Common Stock on the date of grant.
Compensation Committee:
Joe M. Henson
E. Clark Grimes
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
Messrs. Henson and Grimes, both non-employee directors, comprise the
Compensation Committee of the Board of Directors. No person who served as a
member of the Compensation Committee during fiscal 1998: (a) was an officer or
employee of the Company or any of its subsidiaries during such fiscal year, (b)
was an officer of the Company or any of its subsidiaries prior to such fiscal
year, or (c) had any relationship requiring disclosure herein. No executive
officer of the Company served as a member of the compensation committee of
another entity (or other committee of the Board of Directors performing
equivalent functions, or, in the absence of any such committee, the entire Board
of Directors), one of whose executive officers served as a director of the
Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On August 17, 1998, Longworth LLC, a company controlled by Paul Margolis, a
former director of the Company and current holder of 5% of the Company's Common
Stock, purchased shares of Obtech, Inc. from the Company for $500,000. In
reaching the sale price, the Company's Board of Directors consulted with
PricewaterhouseCoopers LLP, which prepared a valuation of the Company's interest
based upon a discounted cash flow analysis and an analysis of market
comparables. At the time of the sale, Mr. Margolis was no longer a director of
the Company.
A-15
<PAGE> 42
SECURITIES OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT
The following table sets forth as of the dates indicated below, certain
information regarding beneficial ownership of the Company's Common Stock (i) by
each person who, to the knowledge of the Company, beneficially owned more than
5% of any class of the Company's voting securities; (ii) by each director of the
Company; (iii) by each executive officer named in the Summary Compensation Table
above; and (iv) by all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OWNERSHIP(1) OF CLASS
- ---------------- ------------ --------
<S> <C> <C>
General Atlantic Partners, LLC(2)........................... 2,000,000 24.0%
c/o General Atlantic Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830
Clover Capital Management, Inc.(3).......................... 1,167,878 14.9%
11 Tobey Village Office Park
Pittsford, NY 14534
Michael H. Iles(4).......................................... 414,518 5.3%
260 Engleburn Avenue
Peterborough, Ontario, Canada K9H 157
Paul A. Margolis(5)......................................... 390,519 4.9%
c/o The Longworth Companies
P.O. Box 67
Weston, MA 02493
John Campbell(6)............................................ 104,153 1.3%
Jonathan C. Crane(7)........................................ 138,508 1.7%
E. Clark Grimes............................................. 1,500 *
Joe M. Henson(8)............................................ 3,375 *
Denis E. Liptak(9).......................................... 18,000 *
Harlan B. Plumley(10)....................................... 8,750 *
Stephen R. Quehl(11)........................................ 37,500 *
Michael J. Quinlan(12)...................................... 77,850 *
Franchon M. Smithson(13).................................... 2,002,875 24.1%
William W. Wyman............................................ -- *
All executive officers and directors as a group (10
persons)(14).............................................. 2,392,511 27.9
</TABLE>
- ---------------
* less than 1%
(1) The persons and entities named in the table have sole voting and investment
power with respect to all shares shown as beneficially owned by them,
except as noted below. Information is as of June 3, 1999 unless otherwise
indicated. Unless otherwise indicated, the address of each person listed on
this table is in care of Marcam Solutions, Inc., 95 Wells Avenue, Newton,
Massachusetts 02459.
(2) Consists of 431,595 shares of Common Stock held by General Atlantic
Partners 32, L.P. ("GAP 32"), 880,290 shares of Common Stock held by
General Atlantic Partners 21, L.P. ("GAP 21"), and 188,115 shares of Common
Stock held by GAP Coinvestment Partners, L.P. ("GAP Coinvestment"). Also
includes warrants to purchase 431,595 and 68,405 shares of Common Stock
held by GAP 32 and GAP Coinvestment, respectively, William E. Ford, Steven
A. Denning, David C. Hodgson, J. Michael Cline, Franchon M. Smithson,
William O. Grabe, and Peter L. Bloom (the "GA Members") are the managing
members of General Atlantic Partners, LLC, which is the sole general
partner of each of GAP 32 and GAP 21, and are the same persons who are the
general partners of GAP Coinvestment. The GA Members disclaim beneficial
ownership of such shares, except to the extent of each member's
proportionate pecuniary interest therein.
A-16
<PAGE> 43
(3) According to the Schedule 13G/A filed on February 9, 1999 with the SEC, as
investment adviser to certain client accounts, Clover Capital Management,
Inc. ("Clover") shares the voting and dispositive power with the respective
account owners, and, as directors of Clover, James G. Gould, Michael E.
Jones, Geoffrey H. Rosenberger and Charles W. Ruff share the voting and
dispositive powers with Clover. Does not include 32,850, 9,050 and 6,500
shares of Common Stock as to which Messrs. Jones, Ruff and Gould,
respectively, hold sole and/or shared (other than indirectly through
Clover) voting and dispositive power.
(4) According to Schedule 13G filed on January 5, 1999 with the SEC. Consists
of 414,518 shares of Common Stock beneficially owned by Michael H. Iles, of
which 316,718 shares are held of record by Technology Investors I Limited
Partnership ("Technology Investors"), whose sole general partner is a
wholly-owned subsidiary of Closeburn Management Ltd. ("Closeburn").
Closeburn acts as the investment manager of Technology Investors, and
Technology Investors has the right to receive any dividends on or proceeds
from the sale of such securities. Closeburn is wholly-owned by Michael H.
Iles ("Iles"). Because Closeburn is wholly-owned by Iles, Iles may be
deemed the beneficial owner of 316,718 shares of Common Stock held of
record by Technology Investors. Iles is the record holder of 97,800 shares
of Common Stock.
(5) Includes 16,222 shares held in trust and 158,994 shares issuable upon the
exercise of outstanding stock options exercisable currently or within 60
days.
(6) Includes 50,000 shares held by Mr. Campbell's wife and 4,750 shares
issuable upon the exercise of outstanding stock options exercisable
currently or within 60 days.
(7) Includes 118,508 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(8) Includes 2,875 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(9) Includes 17,500 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(10) Includes 7,500 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(11) Includes 37,500 shares issuable upon the exercise of outstanding stock
options exercisable currently or within 60 days.
(12) Includes 350 shares held by Mr. Quinlan's wife and 77,500 shares issuable
upon the exercise of outstanding stock options exercisable currently or
within 60 days.
(13) Includes 2,000,000 shares beneficially owned by General Atlantic Partners,
LLC. See note 2 above. Also includes 2,875 shares issuable upon the
exercise of outstanding stock options exercisable currently or within 60
days.
(14) The group is comprised of those persons who were directors and/or executive
officers of the Company on May 27, 1999. Includes 769,008 shares which the
directors and executive officers as a group have the right to acquire upon
the exercise of outstanding warrants and stock options exercisable
currently or within 60 days.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater-than-ten percent
stockholders are required by SEC regulation to furnish the Company with all
Section 16(a) forms they file.
Based solely on a review of the forms received by the Company pursuant to
Section 16(a) of the Exchange Act and on written representations received by it,
the Company believes that during fiscal 1998, the Company's directors, executive
officers and persons who beneficially own more than ten percent of the Company's
Common Stock complied with all applicable Section 16(a) filing requirements.
A-17
<PAGE> 44
ANNEX B
[BROADVIEW LETTERHEAD]
May 25, 1999
CONFIDENTIAL
Board of Directors
Marcam Solutions, Inc.
95 Wells Avenue
Newton, MA 02159
Dear Members of the Board:
We understand that Marcam Solutions, Inc. ("Marcam" or the "Company"),
Wonderware Corporation or another United States affiliate of Invensys plc (the
"Purchaser"), and a wholly owned subsidiary of the Purchaser (the "Merger Sub"),
propose to enter into an Agreement and Plan of Merger (the "Agreement") pursuant
to which Purchaser will cause the Merger Sub to offer to purchase all of the
outstanding shares of Marcam common stock, par value $0.01 per share (the
"Common Stock"), for $7.50 cash per share (the "Offer"), upon the terms and
subject to the conditions described in the Agreement, and subsequently merge
with and into Marcam (the "Merger"). Pursuant to the Merger, each issued and
outstanding share of Marcam not acquired in the Offer will be converted into the
right to receive an amount of cash equal to the consideration paid pursuant to
the Offer. The terms and conditions of the above described Offer and Merger
(together the "Transaction") are more fully detailed in the Agreement.
You have requested our opinion as to whether the consideration to be
received by Marcam shareholders in the Transaction is fair, from a financial
point of view, to Marcam shareholders.
Broadview International LLC focuses on providing merger and acquisition
advisory services to information technology ("IT"), communications and media
companies. In this capacity, we are continually engaged in valuing such
businesses, and we maintain an extensive database of IT, communications and
media mergers and acquisitions for comparative purposes. We are currently acting
as financial advisor to the Marcam Board of Directors and will receive a fee
from Marcam upon the successful conclusion of each the Offer and the Merger.
In rendering our opinion, we have, among other things:
1) reviewed the terms of the Agreement dated May 21, 1999 furnished to us
by Marcam management on May 22, 1999 (which, for the purposes of this
opinion, we have assumed, with your permission, to be identical in all
material respects to the agreement to be executed);
2) reviewed Marcam's Form 10-K for its fiscal years ended September 30,
1998, including the audited financial statements included therein, and
Marcam's Form 10-Q for its quarterly period ended March 31, 1999,
including the unaudited financial statements included therein;
3) reviewed certain internal financial and operating information,
including projections through December 31, 2000, relating to Marcam,
prepared by Marcam management and furnished to us by Marcam management;
4) participated in discussions with Marcam management concerning the
operations, business strategy, current financial performance and
prospects for Marcam;
5) discussed with Marcam management its view of the strategic rationale
for the Transaction;
6) reviewed the recent reported closing prices and trading activity for
Marcam Common Stock;
7) compared certain aspects of the financial performance of Marcam with
public companies we deemed comparable;
B-1
<PAGE> 45
8) analyzed available information, both public and private, concerning
other mergers and acquisitions we believe to be comparable in whole or
in part to the Transaction;
9) assisted in negotiations and discussions related to the Transaction
among Marcam and the Purchaser and their financial and legal advisors;
and
10) conducted other financial studies, analyses and investigations as we
deemed appropriate for purposes of this opinion.
In rendering our opinion, we have relied, without independent verification,
on the accuracy and completeness of all the financial and other information
(including without limitation the representations and warranties contained in
the Agreement) that was publicly available or furnished to us by Marcam. With
respect to the financial projections examined by us, we have assumed that they
were reasonably prepared, except as otherwise indicated by Marcam management,
and reflected the best available estimates and good faith judgments of the
management of Marcam as to the future performance of Marcam. We have neither
made nor obtained an independent appraisal or valuation of any of Marcam assets.
Based upon and subject to the foregoing, we are of the opinion that the
consideration to be received by Marcam shareholders in the Transaction is fair,
from a financial point of view, to Marcam shareholders.
For purposes of this opinion, we have assumed that Marcam is not currently
involved in any material transaction other than the Transaction and those
activities undertaken in the ordinary course of conducting its business. Our
opinion is necessarily based upon market, economic, financial and other
conditions as they exist and can be evaluated as of the date of this opinion,
and any change in such conditions may impact this opinion.
This opinion speaks only as of the date hereof. It is understood that this
opinion is for the information of the Board of Directors of Marcam in connection
with its consideration of the Transaction and does not constitute a
recommendation to any Marcam shareholder as to whether such shareholder should
tender his shares in the Offer or as to how such shareholder should vote on the
Merger. This opinion may not be published or referred to, in whole or part,
without our prior written permission, which shall not be unreasonably withheld.
Broadview International LLC hereby consents to references to and the inclusion
of this opinion in its entirety in the Offer Documents (as defined in the
Agreement), in the Schedule 14D-9 to be distributed to Marcam shareholders in
connection with the Offer, and in the Proxy Statement, if any, distributed to
Marcam shareholders in connection with the Merger.
Sincerely,
/s/ BROADVIEW INTERNATIONAL LLC
--------------------------------------
Broadview International LLC
B-2
<PAGE> 1
EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
among
INVENSYS, plc,
M ACQUISITION CORP.
M MERGER SUB, INC.
and
MARCAM SOLUTIONS, INC.
Dated as of May 27, 1999
<PAGE> 2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of May 27,
1999, among Invensys, plc, a United Kingdom public limited company ("Parent"), M
Acquisition Corp., a Delaware corporation and indirect wholly-owned subsidiary
of Parent ("Purchaser"), M Merger Sub, Inc., a Delaware corporation and a wholly
owned subsidiary of Purchaser ("Merger Sub"), and Marcam Solutions, Inc., a
Delaware corporation (the "Company").
RECITALS
WHEREAS, the respective boards of directors of Parent, Purchaser and
the Company each have determined that it is in the best interests of their
respective companies and stockholders for Purchaser to acquire the Company upon
the terms and subject to the conditions set forth herein; and
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the transactions
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
1. The Offer.
1.1 The Offer. (a) Subject to the provisions of this Agreement
and this Agreement not having been terminated in accordance with Article 8, as
promptly as practicable but in no event later than Thursday, June 3, 1999,
Merger Sub shall commence, and Parent and Purchaser shall cause Merger Sub to
commence, within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (the
"Exchange Act"), an offer to purchase all of the outstanding shares of common
stock, par value $.01 per share (the "Common Stock"), of the Company together
with the associated Rights (as hereinafter defined), at a price of $7.50 per
share of Common Stock, net to the seller in cash (the "Offer"). Except where the
context otherwise requires, all references herein to the shares of Common Stock
shall include the associated Rights. The obligation of Merger Sub, and of Parent
and Purchaser to cause Merger Sub, to commence the Offer and to accept for
payment, and to pay for any shares of Common Stock tendered pursuant to the
Offer shall be subject only to the conditions set forth in Exhibit A (the "Offer
Conditions"). Subject to
-1-
<PAGE> 3
the provisions of this Agreement, the Offer shall initially expire on the 20th
business day from and after the date the Offer is commenced, including the date
of the commencement of the Offer as the first business day in accordance with
Rule 14d-2, unless this Agreement is terminated in accordance with Article 8, in
which case the Offer (whether or not previously extended in accordance with the
terms hereof) shall expire on such date of termination.
(b) Without the prior written consent of the Company, Parent,
Purchaser and Merger Sub shall not (i) waive or increase the Minimum Condition
(as defined in Exhibit A), (ii) reduce the number of shares of Common Stock
subject to the Offer, (iii) reduce the price per share of Common Stock to be
paid pursuant to the Offer, (iv) extend the Offer if all of the Offer Conditions
are satisfied or waived, (v) change the form of consideration payable in the
Offer, or (vi) amend, modify or add to the Offer Conditions or the Offer in any
manner adverse to the holders of Common Stock. Notwithstanding the foregoing,
Merger Sub may, without the consent of the Company, extend the Offer at any time
and from time to time: (i) if at the then scheduled expiration date of the Offer
any of the Offer Conditions shall not have been satisfied or waived, such
extension not to exceed such time as Merger Sub shall reasonably conclude is
necessary for all such conditions to be satisfied or waived; (ii) for any period
required by any statute or rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") or its staff applicable to the
Offer; (iii) for any period required by applicable law in connection with an
increase in the consideration to be paid pursuant to the Offer; and (iv) if all
Offer Conditions are satisfied or waived but the number of shares of Common
Stock tendered is less than 90% of the then outstanding number of shares of
Common Stock, but only if Merger Sub waives all Offer Conditions, for an
aggregate period of not more than 10 business days (for all such extensions
under this clause (iv)) beyond the latest expiration date that would be
permitted under clause (i), (ii) or (iii) of this sentence. Notwithstanding the
foregoing, Parent, Purchaser and Merger Sub agree that if all of the Offer
Conditions are not satisfied on any scheduled expiration date of the Offer then,
provided that all such conditions are and continue to be reasonably probable of
being satisfied by the date that is 30 business days after the commencement of
the Offer, Parent, Purchaser and Merger Sub shall extend the Offer from time to
time until such conditions are satisfied or waived, provided that Parent,
Purchaser and Merger Sub shall not be required to extend the Offer beyond the
date that is 30 business days after the commencement of the Offer. Subject to
and in accordance with the terms and conditions of the Offer and this Agreement
(but subject to the right of termination in accordance with Article 8), Merger
Sub shall, and Parent and Purchaser shall cause Merger Sub to, accept for
payment, in accordance with the terms of the Offer, all shares of Common Stock
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after the expiration of the Offer.
-2-
<PAGE> 4
1.2. Actions by Purchaser and Merger Sub. (a) As soon as
reasonably practicable following execution of this Agreement, but in no event
later than five business days from the date hereof, Parent, Purchaser and Merger
Sub shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with
respect to the Offer, which shall contain an offer to purchase and a related
letter of transmittal (such Schedule 14D-1 and the documents therein pursuant to
which the Offer will be made, together with any supplements or amendments
thereto, the "Offer Documents"). The Company and its counsel shall be given an
opportunity to review and comment upon the Offer Documents prior to the filing
thereof with the SEC. The Offer Documents shall comply as to form in all
material respects with the requirements of the Exchange Act. On the date filed
with the SEC and on the date first published, sent or given to the Company's
stockholders, the Offer Documents shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent, Purchaser or Merger Sub with respect to
information supplied by the Company in writing specifically for inclusion in the
Offer Documents. Each of Parent, Purchaser and Merger Sub agrees to correct
promptly, and the Company agrees to notify Purchaser promptly as to, any
information provided by it in writing specifically for inclusion in the Offer
Documents if and to the extent such information shall have become false or
misleading in any material respect, and each of Parent, Purchaser and Merger Sub
further agrees to take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to all of the holders
of shares of Common Stock, in each case as and to the extent required by
applicable federal securities laws. Parent, Purchaser and Merger Sub agree to
provide the Company and its counsel in writing any comments Parent, Purchaser,
Merger Sub or their counsel may receive from the SEC or its staff with respect
to the Offer Documents promptly after receipt of such comments. Parent,
Purchaser and Merger Sub shall use their reasonable best efforts, after
consultation with the Company, to respond promptly to all such comments of and
requests by the SEC. Parent, Purchaser and Merger Sub shall provide the Company
copies of any written responses and telephonic notification of any verbal
responses by Parent, Purchaser, Merger Sub or their counsel.
(b) Parent shall provide or cause to be provided to Merger Sub
all of the funds necessary to purchase any shares of Common Stock that Merger
Sub becomes obligated to purchase pursuant to the Offer at such time as such
funds are necessary.
1.3. Actions by the Company. (a) The Company hereby approves
of and consents to the Offer and represents and warrants that the board of
directors of the Company (the "Board of Directors" or the "Board"), at a meeting
duly called and held, has duly adopted, by unanimous vote, resolutions: (i)
approving this Agreement, the Offer and the Merger (as hereinafter defined),
(ii) determining that the Merger is advisable and
-3-
<PAGE> 5
that the terms of the Offer and Merger are fair to, and in the best interests
of, the Company's stockholders, (iii) recommending that the Company's
stockholders accept the Offer and approve the Merger and this Agreement, (iv)
taking all action necessary to render (x) Section 203 of the Delaware General
Corporation Law (the "DGCL") and (y) the Company's Amended and Restated Rights
Agreement, dated as of September 18, 1998, between the Company and BankBoston,
N.A., as rights agent (the "Rights Agreement"), inapplicable to the Offer, the
Merger, the Tender and Option Agreement, dated as of May 27, 1999, among
Purchaser, Merger Sub and each of the persons listed on Schedule A thereto (the
"Option Agreement"), this Agreement or any of the transactions contemplated
hereby or thereby. The Company further represents and warrants that the Board of
Directors has received the written opinion of Broadview International LLC (the
"Financial Advisor") to the effect that, as of May 25, 1999, the consideration
to be received by the holders of shares of Common Stock pursuant to the Offer
and the Merger is fair to such holders from a financial point of view (the
"Fairness Opinion"). The Company hereby consents to the inclusion in the Offer
Documents of the recommendation of the Board of Directors described in the first
sentence of this Section 1.3(a). The Company hereby represents and warrants that
it has been authorized by the Financial Advisor to permit the inclusion of the
Fairness Opinion and references thereto, subject to prior review and consent by
the Financial Advisor (such consent not to be unreasonably withheld) in the
Offer Documents, the Schedule 14D-9 (as hereinafter defined) and the Proxy
Statement (as hereinafter defined).
(b) On the date the Offer Documents are filed with the SEC,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendations described in
Section 1.3(a) and shall mail the Schedule 14D-9 to the stockholders of the
Company. To the extent practicable, the Company shall cooperate with Purchaser
in mailing or otherwise disseminating the Schedule 14D-9 with the appropriate
Offer Documents to the Company's stockholders. Purchaser and its counsel shall
be given an opportunity to review and comment upon the Schedule 14D-9 prior to
the filing thereof with the SEC. The Schedule 14D-9 shall comply in all material
respects with the requirements of the Exchange Act. On the date filed with the
SEC and on the date first published, sent or given to the Company's
stockholders, the Schedule 14D-9 shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent, Purchaser or Merger Sub in writing specifically for inclusion in the
Schedule 14D-9. The Company agrees to correct promptly, and each of Purchaser
and Merger Sub agrees to notify the Company promptly as to, any information
provided by it in writing specifically for inclusion in the Schedule 14D-9 if
and to the extent such information shall have become false or misleading in any
material respect,
-4-
<PAGE> 6
and the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to all of
the holders of shares of Common Stock, in each case as and to the extent
required by applicable federal securities laws. The Company agrees to provide
Purchaser and its counsel in writing any comments the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments. The Company shall use its reasonable best
efforts, after consultation with Purchaser, to respond promptly to all such
comments of and requests by the SEC. The Company shall provide Purchaser copies
of any written responses and telephonic notification of any verbal responses by
the Company and its counsel.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Merger Sub with mailing labels containing the names
and addresses of the record holders of Common Stock as of a recent date and of
those persons becoming record holders subsequent to such date, together with
copies of all lists of stockholders and security position listings and all other
information in the Company's possession or control regarding the beneficial
owners of Common Stock, and shall furnish to Merger Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Merger Sub may reasonably request in communicating the
Offer to the Company's stockholders. Subject to the requirements of law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Offer and the Merger, Parent,
Purchaser and Merger Sub and each of their affiliates and associates shall hold
in confidence the information contained in any of such labels, lists and files,
shall use such information only in connection with the Offer and the Merger,
and, if this Agreement is terminated, shall promptly deliver to the Company all
copies of such information then in their possession and otherwise treat such
information as subject to the Confidentiality Agreement, between Purchaser and
the Company, dated May 17, 1999 (the "Confidentiality Agreement").
(d) Subject to the terms and conditions of this Agreement, if
there shall occur a change in law or in a binding judicial interpretation of
existing law which would, in the absence of action by the Company or the Board,
prevent the Merger Sub, were it to acquire a specified percentage of the shares
of Common Stock then outstanding, from approving and adopting this Agreement by
its affirmative vote as the holder of a majority of shares of Common Stock and
without the affirmative vote of any other stockholder, the Company will use its
best efforts to promptly take or cause such action to be taken.
1.4. Directors. (a) Promptly upon the purchase of shares of
Common Stock pursuant to the Offer, Purchaser shall be entitled to designate
such number of directors as will give Purchaser representation on the Board
equal to the product of (i) the number of directors on the Board and (ii) the
percentage that the number of shares of
-5-
<PAGE> 7
Common Stock purchased by Merger Sub or Purchaser bears to the number of shares
of Common Stock then outstanding (the "Percentage"), rounded up to the next
whole number but rounded down if rounding up would cause the Purchaser's
representatives to constitute the entire Board, and the Company shall, upon
request by Purchaser, promptly increase the size of the Board and/or exercise
its best efforts to secure the resignations of such number of directors as is
necessary to enable the Purchaser's designees to be elected to the Board and
shall cause the Purchaser's designees to be so elected. At the request of
Purchaser, the Company will use its best efforts to cause such individuals
designated by Purchaser to constitute the same Percentage of (i) each committee
of the Board, (ii) the board of directors of each Subsidiary (as defined in
Section 4.5) and (iii) each committee of each Subsidiary's board of directors.
The Company's obligations to appoint designees to the Board of Directors shall
be subject to compliance with Section 14(f) of the Exchange Act. The Company
shall take, at its expense, all action necessary to effect any such election,
and shall include in the Schedule 14D-9 the information required by Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. Parent and
Purchaser will supply to Company in writing, and be solely responsible for, any
information with respect to itself and its nominees, directors and affiliates
that is required by Section 14(f) and Rule 14f-1.
(b) Following the election or appointment of Purchaser's
designees pursuant to this Section 1.4 and prior to the Effective Time, the
approval of a majority of the directors of the Company then in office shall be
required to authorize, on behalf of the Company, any permitted termination of
this Agreement by the Company, any amendment of this Agreement requiring action
by the Board, any extension of time for the performance of any of the
obligations or other acts of Purchaser or Merger Sub, and any waiver of
compliance with any of the agreements or conditions contained herein for the
benefit of the Company, and Purchaser shall ensure that its designees who are
serving on the Board do not vote or take any other action to approve any such
authorization without the approval of a majority of the directors then in office
who are not designated by Purchaser.
ARTICLE 2
2. The Merger.
2.1. The Merger. At the Effective Time, subject to the terms
and conditions of this Agreement and the applicable provisions of the DGCL,
Merger Sub shall be merged with and into the Company and the separate corporate
existence of Merger Sub shall thereupon cease (the "Merger"). The Company shall
be the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation"). The Merger shall have the effects specified in the
DGCL.
-6-
<PAGE> 8
2.2. The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at the
offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New
York, New York, at 10:00 a.m., local time, as soon as practicable following the
satisfaction (or waiver if permissible) of the conditions set forth in Article
7. The date on which the Closing occurs is hereinafter referred to as the
"Closing Date."
2.3. Effective Time. If all the conditions to the Merger set
forth in Article 7 shall have been fulfilled or waived in accordance herewith
and this Agreement shall not have been terminated as provided in Article 8 (and
subject to Section 3.6), the parties hereto shall cause a Certificate of Merger
meeting the requirements of Section 251 of the DGCL to be properly executed and
filed in accordance with such Section on the Closing Date. The Merger shall
become effective at the time of filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the DGCL or at
such later time which the parties hereto shall have agreed upon and designated
in such filing as the effective time of the Merger (the "Effective Time").
2.4. Certificate of Incorporation, Bylaws, Directors and
Officers of the Surviving Corporation. Unless otherwise agreed by the Company
and Purchaser prior to the Closing, at the Effective Time:
(a) The Certificate of Incorporation of Merger Sub as in
effect immediately prior to the Effective Time shall be the certificate of
incorporation of the Surviving Corporation, until duly amended in accordance
with applicable law and the terms thereof;
(b) The By-Laws of Merger Sub as in effect immediately prior
to the Effective Time shall be the by-laws of the Surviving Corporation, until
duly amended in accordance with applicable law, the terms thereof, and the
Surviving Corporation's certificate of incorporation;
(c) The officers of the Company immediately prior to the
Effective Time shall continue to serve in their respective offices of the
Surviving Corporation from and after the Effective Time, until their successors
are duly appointed or elected in accordance with applicable law and the
Surviving Corporation's certificate of incorporation and by-laws; and
(d) The directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation from and
after the Effective Time, until their successors are duly appointed or elected
in accordance with applicable law and the Surviving Corporation's certificate of
incorporation and by-laws.
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<PAGE> 9
ARTICLE 3
3. Effect of the Merger on Securities of Merger Sub and the Company.
3.1. Merger Sub Stock. At the Effective Time, each share of
common stock, $.01 par value per share, of Merger Sub that is outstanding
immediately prior to the Effective Time shall be converted into and exchanged
for one validly issued, fully paid and non-assessable share of common stock,
$.01 par value per share, of the Surviving Corporation.
3.2. Company Securities. (a) At the Effective Time, each share
of Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares of Common Stock owned by Parent, Purchaser or Merger Sub or
held by the Company, all of which shall be canceled, and other than the shares
of Dissenting Common Stock (as defined in Section 3.5)) shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into the right to receive the highest per share consideration paid in the Offer,
without interest (the "Merger Consideration").
(b) As a result of the Merger and without any action on the
part of the holder thereof, at the Effective Time, all shares of Common Stock
shall cease to be outstanding and shall be canceled and retired and shall cease
to exist, and each holder of shares of Common Stock (other than Merger Sub,
Purchaser and the Company and other than shares of Dissenting Common Stock)
shall thereafter cease to have any rights with respect to such shares of Common
Stock, except the right to receive, without interest, the Merger Consideration
in accordance with this Section 3.2 and Section 3.3 upon the surrender of a
certificate or certificates (a "Certificate") representing such shares of Common
Stock.
(c) Each share of Common Stock issued and held in the
Company's treasury at the Effective Time, or held by Merger Sub, Purchaser or
Parent, shall, by virtue of the Merger, cease to be outstanding and shall be
canceled and retired without payment of any consideration therefor.
(d) All options (individually, an "Option" and collectively,
the "Options") outstanding immediately prior to the Effective Time under any
Company stock option plan, including the Marcam Solutions 1997 Stock Plan (the
"1997 Plan") and the Marcam Solutions, Inc. 1997 Non-Employee Director Stock
Option Plan (the "Directors Plan") (the "Stock Option Plans"), whether or not
then exercisable, and all warrants to acquire shares of Common Stock
(individually, a "Warrant" and collectively, the "Warrants") outstanding
immediately prior to the Effective Time, whether or not then exercisable, and
all rights (individually, a "Purchase Right" and collectively, the "Purchase
Rights") to purchase shares of Common Stock under the Company's 1997 Employee
Stock Purchase
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<PAGE> 10
Plan (the "Purchase Plan") shall be canceled and (i) each holder of an Option or
Warrant shall promptly after the Effective Time receive from the Surviving
Corporation, for each share of Common Stock subject to an Option or Warrant,
whether or not exercisable, an amount in cash equal to the excess, if any, of
the Merger Consideration over the per share exercise price of such Option or
Warrant, without interest, in full settlement of the Company's (and the
Surviving Corporation's) obligations under each such Option or Warrant, and (ii)
each holder of a Purchase Right shall promptly after the Effective Time receive
from the Surviving Corporation the Merger Consideration for each such Purchase
Right, without interest, in full settlement of the Company's (and the Surviving
Corporation's) obligations under each such Purchase Right. To the extent that
the per share exercise price of any Option or Warrant exceeds the Merger
Consideration, at the Effective Time such Option or Warrant shall be canceled
and the holder of such Option or Warrant shall not receive or be entitled to
receive any consideration from Purchaser, Merger Sub or the Surviving
Corporation. The amount payable pursuant to this Section 3.2(d) shall be subject
to all applicable withholding of taxes. The Company shall take all actions as
may be necessary to effectuate the foregoing.
3.3. Exchange of Certificates Representing Common Stock. (a)
Prior to the Effective Time, Purchaser shall appoint a commercial bank or trust
company, subject to the reasonable satisfaction of the Company, to act as paying
agent hereunder for payment of the Merger Consideration upon surrender of
Certificates (the "Paying Agent"). Parent and Purchaser shall take all steps
necessary to cause the Surviving Corporation to provide the Paying Agent with
cash in amounts necessary to pay for all the shares of Common Stock pursuant to
Section 3.2(a) and, in connection with the Options, Warrants and Purchase
Rights, pursuant to Section 3.2(d), as and when such amounts are needed by the
Paying Agent. Such amounts shall hereinafter be referred to as the "Exchange
Fund."
(b) As soon as practicable after the Effective Time, Purchaser
shall cause the Paying Agent to mail to each holder of record of shares of
Common Stock (i) a letter of transmittal which shall specify that delivery shall
be effected, and risk of loss and title to such Certificates shall pass, only
upon delivery of the Certificates to the Paying Agent and which letter shall be
in such form and have such other provisions as are customary for letters of this
nature and (ii) instructions for effecting the surrender of such Certificates in
exchange for the Merger Consideration. Upon surrender of a Certificate to the
Paying Agent together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other documents
as may be reasonably required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the amount of cash
into which shares of Common Stock theretofore represented by such Certificate
shall have been converted pursuant to Section 3.2, and the shares represented by
the Certificate so surrendered shall forthwith be canceled. No interest will be
paid or will accrue on the cash payable upon surrender of any Certificate.
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<PAGE> 11
In the event of a transfer of ownership of Common Stock that is not registered
in the transfer records of the Company, payment may be made with respect to such
Common Stock to such a transferee if the Certificate representing such shares of
Common Stock is presented to the Paying Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
(c) At or after the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the shares of Common
Stock that were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation,
they shall be canceled and exchanged as provided in this Article 3.
(d) Any portion of the Exchange Fund (including the proceeds
of any interest and other income received by the Paying Agent in respect of all
such funds) that remains unclaimed by the former stockholders of the Company six
months after the Effective Time shall be delivered to the Surviving Corporation.
Any former stockholders of the Company who have not theretofore complied with
this Article 3 may thereafter look only to the Surviving Corporation for payment
of any Merger Consideration, without any interest thereon, that may be payable
in respect of each share of Common Stock such stockholder holds as determined
pursuant to this Agreement.
(e) None of Parent, Purchaser, the Company, the Surviving
Corporation, the Paying Agent or any other person shall be liable to any former
holder of shares of Common Stock for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
(f) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim which may be made against it with respect to such Certificate, the
Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration payable in respect thereof pursuant to this
Agreement.
3.4. Adjustment of Merger Consideration. In the event that,
subsequent to the date of this Agreement but prior to the Effective Time, the
outstanding shares of Common Stock shall have been changed into a different
number of shares or a different class as a result of a stock split, reverse
stock split, stock dividend, subdivision, reclassification, split, combination,
exchange, recapitalization or other similar transaction, the Merger
Consideration shall be appropriately adjusted.
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<PAGE> 12
3.5. Dissenting Company Stockholders. Notwithstanding any
provision of this Agreement to the contrary, if required by the DGCL but only to
the extent required thereby, shares of Common Stock that are issued and
outstanding immediately prior to the Effective Time and which are held by
holders of such shares of Common Stock who have properly exercised appraisal
rights with respect thereto in accordance with Section 262 of the DGCL (the
"Dissenting Common Stock") will not be exchangeable for the right to receive the
Merger Consideration, and holders of such shares of Dissenting Common Stock will
be entitled to receive payment of the appraised value of such shares of Common
Stock in accordance with the provisions of such Section 262 unless and until
such holders fail to perfect or effectively withdraw or lose their rights to
appraisal and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses such right, such
shares of Common Stock will thereupon be treated as if they had been converted
into and to have become exchangeable for, at the Effective Time, the right to
receive the Merger Consideration, without any interest thereon. The Company will
give Purchaser prompt notice of any demands received by the Company for
appraisals of shares of Common Stock prior to the Effective Time. The Company
shall not, except with the prior written consent of Purchaser, make any payment
with respect to any demands for appraisal or offer to settle or settle any such
demands.
3.6. Merger Without Meeting of Stockholders. In the event that
Merger Sub, or any other direct or indirect subsidiary of Purchaser, shall
acquire at least 90 percent of the outstanding shares of Common Stock, the
parties hereto shall take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after the expiration of the
Offer without a vote of stockholders of the Company, in accordance with Section
253 of the DGCL.
ARTICLE 4
4. Representations and Warranties of the Company. The Company
hereby represents and warrants to Parent, Purchaser and Merger Sub as of the
date of this Agreement as follows:
4.1. Existence; Good Standing; Corporate Authority. Each of
the Company and each of its Subsidiaries is (i) a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and (ii) is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of any other state of the
United States in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except where the failure to be so qualified or to be in good standing would not
have, individually or in the aggregate, a material adverse effect on the
business,
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<PAGE> 13
operations, revenues, assets or financial condition of the Company and its
Subsidiaries taken as a whole or the ability of the Company and its Subsidiaries
to conduct their business after the Closing substantially consistent with the
manner conducted in the past (a "Material Adverse Effect") (it being understood
that (i) any adverse effect that is caused by conditions affecting the economy
or securities markets generally shall not be taken into account in determining
whether there has been a Material Adverse Effect (ii) any adverse effect that is
caused by conditions affecting the primary industry in which the Company
currently competes shall not be taken into account in determining whether there
has been a Material Adverse Effect (provided that such effect does not affect
the Company in a disproportionate manner) and (iii) any adverse effect resulting
from the Offer, the Merger or any of the transactions contemplated hereby or the
announcement thereof (including those resulting from litigation brought or
threatened against the Company or any member of its Board of Directors in
respect thereof) shall not be taken into account in determining whether there
has been a Material Adverse Effect). Each of the Company and each of its
Subsidiaries has all requisite corporate power and authority to own or lease and
operate its properties and carry on its business as now conducted. The Company
has heretofore made available to Purchaser true and correct copies of the
Company's Certificate of Incorporation and By-Laws as currently in effect.
4.2. Authorization, Validity and Effect of Agreements. The
Company has the requisite corporate power and authority to execute and deliver
this Agreement and all agreements and documents contemplated hereby (the
"Ancillary Documents") and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the Ancillary
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
Board of Directors, and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement and the Ancillary Documents or
to consummate the transactions contemplated hereby and thereby (other than the
approval of this Agreement by the holders of a majority of the shares of Common
Stock if required by applicable law). This Agreement has been, and any Ancillary
Document at the time of execution will have been, duly and validly executed and
delivered by the Company, and (assuming this Agreement and such Ancillary
Documents each constitutes a valid and binding obligation of Purchaser and
Merger Sub) constitutes and will constitute the valid and binding obligations of
the Company, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
4.3. Compliance with Laws. Except as set forth in Section 4.3
of the disclosure letter, dated as of the date hereof, delivered by the Company
to Purchaser (the "Company Disclosure Letter"), neither the Company nor any of
its Subsidiaries is in violation of any order of any foreign, federal, state or
local judicial, legislative, executive,
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<PAGE> 14
administrative or regulatory body or authority or any court, arbitration board
or tribunal ("Governmental Entity"), or any foreign, federal, state or local
law, statute, ordinance, rule, regulation, order, judgment or decree ("Laws")
applicable to the Company or its Subsidiaries or any of their respective
properties or assets, except where the failure to be in compliance, individually
or in the aggregate, would not have a Material Adverse Effect.
4.4. Capitalization, etc. The authorized capital stock of the
Company consists of 30,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock, $.01 par value, of which 30,000 shares have been designated as
Series A Junior Participating Preferred Stock ("Preferred Stock"). As of the
date hereof, (a) 7,818,087 shares of Common Stock are outstanding, (b) 30,000
shares of Preferred Stock are subject to Preferred Stock Purchase Rights
("Rights") issued pursuant to the Company's Rights Agreement and no other shares
of Preferred Stock are issued and outstanding, (c) 0 shares of Common Stock are
held by the Company in its treasury, and (d) no shares of capital stock of the
Company are held by the Company's Subsidiaries. Section 4.4 of the Company
Disclosure Letter sets forth a complete and accurate list, as of the date
hereof, of (i) the number of outstanding Options and Warrants, (ii) the number
of shares of Common Stock which can be acquired upon the exercise of all
outstanding Options and Warrants, respectively, (iii) the number of shares of
Common Stock which are reserved for issuance upon the exercise of outstanding
Options and the number of shares which are reserved for future grants under the
Stock Option Plans, (iv) the number of shares of Common Stock which are reserved
for issuance upon the exercise of outstanding Warrants, and (v) the exercise
price of each outstanding Option and Warrant, and (vi) the number of shares of
Common Stock which are reserved for issuance pursuant to the Purchase Plan.
Except for the Common Stock, the Rights, the Options, the Warrants, and the
Purchase Rights, the Company has no outstanding bonds, debentures, notes or
other obligations entitling the holders thereof to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of the Company on any matter. Except as set forth in Section
4.4 of the Company Disclosure Letter, since March 31, 1999, the Company (i) has
not issued any shares of Common Stock other than upon the exercise of Options
and Warrants or pursuant to the Purchase Plan, (ii) has granted no Options to
purchase shares of Common Stock under the Stock Option Plans, (iii) has not
amended the Purchase Plan, and (iv) has not split, combined or reclassified any
of its shares of capital stock. All issued and outstanding shares of Common
Stock are duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. Except as set forth above in this Section 4.4 or in Section
4.4 of the Company Disclosure Letter, there are no other shares of capital stock
or voting securities of the Company, and no existing options, warrants, calls,
subscriptions, convertible securities, and no stock appreciation rights or
limited stock appreciation rights or other rights (including rights of first
refusal), agreements or commitments which obligate the Company or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock of, or
equity interests in,
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<PAGE> 15
or any material assets of, the Company or any of its Subsidiaries. Except as set
forth in Section 4.4 of the Company Disclosure Letter, the Company is not
obligated to issue any Options, Warrants or Purchase Rights after the date
hereof. There are no outstanding obligations of the Company or any Subsidiaries
to repurchase, redeem or otherwise acquire any shares of capital stock of the
Company and there are no unissued performance awards outstanding under the Stock
Option Plan or any other outstanding stock related awards. At the Effective
Time, each outstanding Option and Warrant shall be canceled without the consent
of any other party or the payment of any consideration other than as provided in
Section 3.2(d). After the Effective Time, the Surviving Corporation will have no
obligation to issue, transfer or sell any shares of capital stock of the Company
or the Surviving Corporation pursuant to any Company Employee Benefit Plan (as
defined in Section 4.11). There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party with
respect to the voting of capital stock of the Company or any of its
Subsidiaries.
4.5. Subsidiaries. Except as set forth in Section 4.5 of the
Company Disclosure Letter, the Company owns, directly or indirectly, all of the
outstanding shares of capital stock of each subsidiary of the Company (the
"Subsidiaries"). Except as set forth in Section 4.5 of the Company Disclosure
Letter, all of the outstanding shares of capital stock of each Subsidiary are
duly authorized, validly issued, fully paid and nonassessable, and are owned,
directly or indirectly, by the Company free and clear of all liens, pledges,
security interests, claims or other encumbrances ("Encumbrances"). Section 4.5
of the Company Disclosure Letter sets forth for each Subsidiary: (i) its name
and jurisdiction of incorporation or organization; (ii) its authorized capital
stock or share capital; (iii) the number of issued and outstanding shares of
capital stock or share capital; and (iv) the holder or holders of such shares.
Except for the Company's direct or indirect interests in the Subsidiaries or as
set forth in Section 4.5 of the Company Disclosure Letter, neither the Company
nor any of its Subsidiaries owns directly or indirectly any interest or
investment (whether equity or debt) in any corporation, partnership, joint
venture, business, trust or entity.
4.6. No Violation. Except as set forth in Section 4.6 of the
Company Disclosure Letter, neither the execution and delivery by the Company of
this Agreement or any of the Ancillary Documents nor the consummation by the
Company of the transactions contemplated hereby or thereby will: (i) violate,
conflict with or result in a breach of any provision of the Certificate of
Incorporation or By-Laws of the Company or any Subsidiary; (ii) violate,
conflict with, result in a breach of any provision of, constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, result in the termination or in a right of termination of,
accelerate the performance required by or benefit obtainable under, result in
the triggering of any payment or other obligations pursuant to, result in the
creation of any Encumbrance upon any of the properties of the Company or any of
its Subsidiaries under, or result in there
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<PAGE> 16
being declared void, voidable, or without further binding effect, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust or any license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries or
any of their respective properties is bound (each, a "Contract" and,
collectively, "Contracts"), except for any of the foregoing matters specified in
this clause (ii) which, individually or in the aggregate, would not have a
Material Adverse Effect or prevent or delay or be likely to prevent or delay the
consummation of the transactions contemplated hereby; (iii) other than the
filings provided for in Section 2.3 and the filings required under the Exchange
Act and under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the "HSR Act"), require any
consent, approval or authorization of, or declaration, filing or registration
with, any Governmental Entity, the lack of which, individually or in the
aggregate, would have a Material Adverse Effect or, by Law, prevent or delay the
consummation of the transactions contemplated hereby; or (iv) violate any Laws
applicable to the Company, any of its Subsidiaries or any of their respective
assets, except for violations which individually or in the aggregate would not
have a Material Adverse Effect or materially adversely affect the ability of the
Company to consummate the transactions contemplated hereby.
4.7. Company Reports; Offer Documents. (a) Since September 30,
1997, the Company has filed all documents with the SEC required to be filed by
the Company under the Exchange Act. The Company has made available to Purchaser
each registration statement, report, proxy statement or information statement
(as defined under the Exchange Act) filed by it with the SEC since September 30,
1997, each in the form (including exhibits and any amendments thereto) so filed
(collectively, the "Company Reports"). As of their respective dates, the Company
Reports (i) complied as to form in all material respects with the applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the Exchange Act, and the rules and regulations thereunder and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
Each of the consolidated balance sheets of the Company included in the Company
Reports (including the related notes and schedules) fairly presented the
consolidated financial position of the Company and its Subsidiaries as of its
date, and each of the consolidated statements of operations, cash flows and
stockholders' equity of the Company included in or incorporated by reference
into the Company Reports (including the related notes and schedules) fairly
presented the results of operations, cash flows and shareholders' equity of the
Company and its Subsidiaries for the periods set forth therein, in each case in
accordance with generally accepted accounting principles consistently applied
during the periods involved, except as may be noted therein or in the notes
thereto and except that the unaudited interim financial statements are subject
to normal
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<PAGE> 17
year-end adjustments and any other adjustments referred to therein or in the
notes thereto and do not contain all of the footnote disclosures required by
generally accepted accounting principles. Except as set forth in Section 4.7 of
the Company Disclosure Letter or as disclosed in the Company Reports, neither
the Company nor any of its Subsidiaries has any liabilities or obligations,
contingent or otherwise, except (i) liabilities and obligations in the
respective amounts reflected or reserved against in the Company's consolidated
balance sheet as of March 31, 1999 included in the Company Reports (the "1999
Balance Sheet") or (ii) liabilities and obligations incurred in the ordinary
course of business since March 31, 1999 which individually or in the aggregate
would not have a Material Adverse Effect or (iii) obligations and liabilities
incurred or to be incurred relating to the transactions contemplated by this
Agreement.
(b) None of the Schedule 14D-9, the information statement, if
any, filed by the Company in connection with the Offer pursuant to Rule 14f-1
under the Exchange Act (the "Information Statement"), any schedule required to
be filed by the Company with the SEC or any amendment or supplement thereto, at
the respective times such documents are filed with the SEC or first published,
sent or given to the Company's stockholders, shall contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading except that no
representation is made by the Company with respect to information supplied by
the Purchaser or Merger Sub in writing specifically for inclusion in the
Schedule 14D-9 or Information Statement or any amendment or supplement. None of
the information supplied or to be supplied by the Company in writing
specifically for inclusion or incorporation by reference in the Offer Documents
will, at the date of filing with the SEC, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time prior
to the Effective Time the Company shall obtain knowledge of any facts with
respect to itself, any of its officers and directors or any of its Subsidiaries
that would require the supplement or amendment to any of the foregoing documents
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or to comply with applicable Laws, such
amendment or supplement shall be promptly filed with the SEC and, as required by
Law, disseminated to the stockholders of the Company, and in the event Purchaser
shall advise the Company as to its obtaining knowledge of any facts that would
make it necessary to supplement or amend any of the foregoing documents, the
Company shall promptly amend or supplement such document as required and
distribute the same to its stockholders.
4.8. Litigation. Except as set forth in the Company Reports or
in Section 4.8 of the Company Disclosure Letter, (i) there are no claims,
actions, suits, proceedings, arbitrations, or to the knowledge of the Company,
investigations or audits
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<PAGE> 18
(collectively, "Litigation") by or before a Governmental Entity pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries, at law or in equity, other than those in the ordinary course of
business that, individually or in the aggregate, would not have a Material
Adverse Effect nor does the Company or any of its Subsidiaries have knowledge of
any facts or circumstances that it believes would be likely to form the basis
for any such claims, actions, suits, proceedings, arbitrations, investigations
or audits.
4.9. Absence of Certain Changes. Except as set forth in the
Company Reports or in Section 4.9 of the Company Disclosure Letter, since March
31, 1999, the Company and its Subsidiaries have conducted their business in the
ordinary course of such business consistent with past practices, and there has
not been (i) any event or state of fact that, individually or in the aggregate,
would have a Material Adverse Effect; (ii) any declaration, setting aside or
payment of any dividend or other distribution with respect to its capital stock
or any repurchase, redemption or any other acquisition by the Company or its
Subsidiaries of any outstanding shares of capital stock or other securities of,
or other ownership interests in, the Company or any of its Subsidiaries; (iii)
any change in accounting principles, practices or methods; (iv) any entry into
any employment agreement with, or any increase in the rate or terms (including,
without limitation, any acceleration of the right to receive payment) of
compensation payable or to become payable by the Company or any of its
Subsidiaries to, their respective directors, officers or employees, except
increases for employees who are not officers or directors occurring in the
ordinary course of business in accordance with their customary practices; (v)
any increase in the rate or terms (including, without limitation, any
acceleration of the right to receive payment) of any bonus, insurance, pension
or other employee benefit plan or arrangement covering any such directors,
officers or employees, except increases for employees who are not officers or
directors occurring in the ordinary course of business in accordance with its
customary practices; (vi) any entry into any Contracts or transaction by the
Company or any Subsidiary which is material to the Company and its Subsidiaries
taken as a whole whether or not in the ordinary course of business; (vii) any
revaluation by the Company or any of its Subsidiaries of any of their respective
assets, including, without limitation, write-downs of inventory or write-offs of
accounts receivable other than in the ordinary course of business consistent
with past practices; or (viii) any action by the Company which if taken after
the date hereof would constitute a breach of Section 6.2(b) hereof (other than
Sections 6.2(b)(ii) and 6.2(b)(xiii)).
4.10. Taxes. The Company and its Subsidiaries have timely
filed (taking into account extensions) all material Tax Returns (as defined
below) required to be filed by any of them. All such Tax Returns are true,
correct and complete, except for such instances which individually or in the
aggregate would not have a Material Adverse Effect. Except as would not have a
Material Adverse Effect, except for those Taxes (as
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defined below) being contested in good faith and for which adequate reserves
have been established in the financial statements included in the Company
Reports in accordance with GAAP, and except as set forth in Section 4.10 of the
Company Disclosure Letter, the Company and its Subsidiaries have paid all Taxes
required to be paid by any of them or claimed or asserted by any taxing
authority to be due. There is no action, suit, claim or assessment pending with
respect to Taxes which, if upheld, would, individually or in the aggregate, have
a Material Adverse Effect. The Company and its Subsidiaries have withheld and
paid over to the relevant taxing authority all Taxes required to have been
withheld and paid in connection with payments to employees, independent
contractors, creditors, stockholders or other third parties, except for such
Taxes which, individually or in the aggregate, would not have a Material Adverse
Effect. The Company had no "plan or intention" (within the meaning of Revenue
Procedure 96-30), at the time of the consummation of the transactions set forth
in the Distribution Agreement, dated as of July 17, 1997, between MAPICS, Inc.
(f/k/a Marcam Corporation) ("MAPICS") and the Company (the "Distribution
Agreement"), to liquidate the Company, to merge the Company with any other
corporation (including for this purpose a transaction that would be treated for
federal income tax purposes as a sale of stock), or to sell or otherwise dispose
of the assets of the Company, except in the ordinary course of business. No
circumstances exist that could cause the Company or any of its Subsidiaries not
to be entitled to indemnification under Section 6(a)(iii) of the Tax Sharing
Agreement, dated as of July 17, 1997, by and between MAPICS and the Company, by
reason of the exception set forth therein relating to Section 5.02(e) of the
Distribution Agreement.
For purposes of this Agreement, (A) "Tax" (and, with correlative meaning,
"Taxes") means any federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll, premium,
withholding, alternative or added minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or penalty, imposed by
any Governmental Entity, and (B) "Tax Return" means any return, report or
similar statement required to be filed with respect to any Tax (including any
attached schedules), including, without limitation, any information return,
claim for refund, amended return or declaration of estimated Tax.
4.11. Employee Benefit Plans. (a) Section 4.11 of the Company
Disclosure Letter sets forth a list of all "employee benefit plans," as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and all other material employee benefit or compensation
arrangements, including, without limitation, any such arrangements providing
severance pay, sick leave, vacation pay, salary continuation for disability,
retirement benefits, deferred compensation, bonus pay, incentive pay, stock
options (including those held by directors, employees, and consultants),
hospitalization insurance, medical insurance, life insurance, scholarships or
tuition reimbursements, that are maintained by the Company or any of its
Subsidiaries or
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to which the Company or any of its Subsidiaries is obligated to contribute
thereunder for current or former directors, employees, independent contractors,
consultants and leased employees of the Company or any Company Subsidiary (the
"Company Employee Benefit Plans").
(b) None of the Company Employee Benefit Plans is a
"multiemployer plan," as defined in Section 4001(a)(3) of ERISA (a
"Multiemployer Plan") or a plan subject to Title IV of ERISA, and neither the
Company nor any of its Subsidiaries presently maintains or has maintained any
such plan, or has any liability, contingent or otherwise, with respect to any
such plan.
(c) Except as provided in Part 6 of Title I of ERISA or as set
forth in Section 4.11 of the Company Disclosure Letter, the Company does not
maintain or contribute to any plan or arrangement which provides or has any
liability to provide life insurance or medical or other employee welfare
benefits to any employee or former employee upon his retirement or termination
of employment, and the Company has never represented, promised or contracted
(whether in oral or written form) to any employee or former employee that such
benefits would be provided.
(d) Except as set forth in Section 4.11 of the Company
Disclosure Letter, (i) the execution of, and performance of the transactions
contemplated in, this Agreement will not, either alone or upon the occurrence of
subsequent events, result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any
employee, and (ii) there are no severance agreements applicable to the Company
or any of its Subsidiaries. No payment or benefit which will or may be made by
the Company, Parent or any of their Subsidiaries or affiliates with respect to
any employee of the Company or any of its Subsidiaries will be characterized as
an "excess parachute payment" within the meaning of Section 280G(b)(1) of the
Code.
(e) (i) each Company Employee Benefit Plan that is intended to
qualify under Section 401 of the Internal Revenue Code of 1986, as amended (the
"Code"), and each trust maintained pursuant thereto, has been determined to be
exempt from federal income taxation under Section 501 of the Code by the
Internal Revenue Service, and nothing has occurred with respect to the operation
or organization of any such Company Employee Benefit Plan that would cause the
loss of such qualification or exemption or the imposition of any material
liability, penalty or tax under ERISA or the Code, (ii) there are no pending
material actions, claims (other than claims for benefits), investigations or
lawsuits which have been asserted, filed or, to the Company's knowledge,
threatened, in connection with the Company Employee Benefit Plans, (iii) no
"non-exempt" "prohibited transaction" (within the meaning of Section 4975 of the
Code or Section 406 of ERISA) has occurred with respect to any Company Employee
Benefit Plan that could result in a material liability to the Company, any
Company Employee Benefit Plan or any of the
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beneficiaries thereof, and (iv) the Company Employee Benefit Plans have been
maintained in all material respects in accordance with their terms and with all
applicable provisions of ERISA and the Code (including rules and regulations
thereunder) and all other applicable federal and state laws and regulations.
(f) Neither the Company nor any of its Subsidiaries has made
any payment or is obligated to make any payment that is not or will not be fully
deductible under Section 162(m) of the Code, nor is the Company or any of its
Subsidiaries a party to any agreement that could result in any such payment.
(g) Section 4.11 of the Company Disclosure Letter sets forth a
complete list of all amounts (other than de mimimus amounts) outstanding
relating to bonuses payable to employees and any obligation to pay bonuses to
employees relating to the Company's performance, the employee's performance or
the transactions contemplated hereby.
(h) Other than the Subsidiaries, there is no business or
entity which is a member of the same "controlled group of corporations," under
"common control" or an "affiliated service group" with the Company within the
meanings of Sections 414(b), (c) or (m) of the Code, or required to be
aggregated with the Company under Section 414(o) of the Code, or is under
"common control" with the Company, within the meaning of Section 4001(a)(14) of
ERISA, or any regulations promulgated or proposed under any of the foregoing
Sections.
4.12. Labor and Employment Matters. Except as set forth in
Section 4.12 of the Company Disclosure Letter, neither the Company nor any of
its Subsidiaries is a party to, or bound by, any collective bargaining agreement
or other Contracts or understanding with a labor union or labor organization.
Except for such matters which, individually or in the aggregate, would not have
a Material Adverse Effect and, there is no (i) unfair labor practice, labor
dispute (other than routine individual grievances) or labor arbitration
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries relating to their businesses, (ii) activity
or proceeding by a labor union or representative thereof to organize any
employees of the Company or any of its Subsidiaries, or (iii) lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect to such
employees. The Company is in compliance with all Laws regarding employment,
employment practices, terms and conditions of employment and wages and Laws,
except for such noncompliance which, either individually or in the aggregate,
would not have a Material Adverse Effect.
4.13. Brokers. Except for the Financial Advisor, no broker,
finder or financial advisor is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
that is based upon any
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arrangement made by or on behalf of the Company. The Company's fee arrangements
with the Financial Advisor have been disclosed to the Purchaser.
4.14. Intellectual Property Rights. Each item of Company
Intellectual Property which is (i) owned by the Company and is a patent, patent
application, material or registered trademark, trademark application, material
or registered service mark, service mark application, material trade dress,
material logo, trade name, domain name, corporate name, copyright registration,
copyright application, mask work registration or mask work application, or (ii)
a material license out of the ordinary course of business, material sublicense
out of the ordinary course of business or material agreement out of the ordinary
course of business is set forth in Section 4.14A of the Company Disclosure
Letter or filed as an exhibit to the Company Reports. Except as set forth in
Section 4.14B(a) of the Company Disclosure Letter, (i) the Company owns the
Company Intellectual Property, free and clear of any Encumbrance, license or
other restriction, or has the valid right to make, use, sell or license as
necessary in the conduct of its business the Company Intellectual Property; (ii)
the Company has the right to require any Company employee or contractor having
rights in any Company Intellectual Property which is an application for
registration, including but not limited to patent applications, trademark
applications, service mark applications, copyright applications, or mask work
applications, to transfer ownership to the Company of the application and of the
registration once it issues, and all registered patents, trademarks, service
marks and copyrights owned by the Company are valid and subsisting and in full
force and effect; and (iii) Company Intellectual Property is all the
Intellectual Property that is necessary for the ownership, maintenance and
operation of the Company's properties and assets and the Company has the right
to make, use, sell or license as necessary in the conduct of its business all of
the Company Intellectual Property in all jurisdictions in which the Company
conducts or proposes to conduct its business. The consummation of the
transactions contemplated hereby will not alter or impair any such rights in any
manner which, individually or in the aggregate, would have a Material Adverse
Effect (other than as a result of limitations arising because of contractual or
other restrictions to which the Purchaser or its affiliates is a party). Other
than exceptions which, individually or in the aggregate, would not have a
Material Adverse Effect, (i) the Company has not, and the continued operation of
the Company's and its Subsidiaries' businesses as presently conducted will not,
interfere with, infringe upon, misappropriate or otherwise come into conflict
with, any Intellectual Property rights of third parties, and the Company has not
received any charge, complaint, claim, demand or notice so alleging (including
any claim that the Company must license or refrain from using any Intellectual
Property rights of any third party); (ii) the Company has never agreed to defend
or indemnify any person for or against any interference, infringement,
misappropriation or other conflict with respect to any Company Intellectual
Property, other than in license agreements with customers and agreements with
business partners entered into in the ordinary course of business (and in
substantially all such agreements, the Company has excluded consequential
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damages and in the remainder of such agreements, has limited consequential
damages); (iii) no third party has interfered with, infringed upon,
misappropriated or otherwise come into conflict with any Company Intellectual
Property; and (iv) no action, suit, proceeding or hearing, or to the knowledge
of the Company, investigation, charge, complaint, claim or demand, has been
made, is pending, or, to the knowledge of the Company, is threatened which
challenges the legality, validity, enforceability, use or ownership of any
Company Intellectual Property. Except as set forth in Section 4.14B(b) of the
Company Disclosure Letter, the Company does not license any Intellectual
Property from any third party which Intellectual Property is integral to the
operation of the Company's independently developed core standard software
products. The Company has obtained from all of its employees, former employees,
independent contractors and former independent contractors (collectively,
"Inventors") valid and effective assignments of all of such Inventors' rights in
any Intellectual Property developed by such Inventors while employed by, or
under contract with, the Company or its predecessor, except where the failure to
obtain such assignments, individually or in the aggregate, would not have a
Material Adverse Effect.
"Company Intellectual Property" means (a) all inventions
(whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereon, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof, (b) all
trademarks, service marks, trade dress, logos, trade names, domain names, and
corporate names, together with all translations, adaptations, derivations and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith, (c) all
copyrightable works, all copyrights and all applications, registrations and
renewals in connection therewith, (d) all mask works and all applications,
registrations and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, methods, schematics, technology, technical data, designs, drawings,
flowcharts, block diagrams, specifications, customer and supplier lists, pricing
and cost information and business and marketing plans and proposals), (f) all
computer software (including data and related documentation) (g) all other
proprietary rights, and (h) all licenses, sublicenses, or agreements related to
the foregoing categories of intellectual property listed in subsections (a)
through (g) herein (categories (a) through (h) herein are collectively referred
to as "Intellectual Property") which is used, has been used, or is proposed to
be used in connection with the Business.
4.15. Permits. The Company and its Subsidiaries are in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any court, governmental or regulatory authority necessary for the Company and
its Subsidiaries to own, lease and operate its
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properties or to lawfully conduct their respective businesses as presently
conducted (the "Company Permits"), except where the failure to have any of the
Company Permits, individually or in the aggregate, would not have a Material
Adverse Effect. As of the date hereof, no suspension or cancellation of any of
the Company Permits is pending or, to the knowledge of the Company threatened,
except where the suspension or cancellation of any of the Company Permits,
individually or in the aggregate, would not have a Material Adverse Effect.
4.16. Environmental Matters. (a) Except as set forth in the
Company Reports filed prior to the date hereof and with such other exceptions
which, individually or in the aggregate, would not have a Material and Adverse
Effect:
(i) the Company and each of its Subsidiaries has at
all times been operated, and is, in compliance with all applicable Environmental
Laws, and neither the Company nor any of its Subsidiaries has received any
written communication from any Person or Governmental Entity that alleges that
the Company or any of its Subsidiaries is not in compliance with applicable
Environmental Laws;
(ii) the Company and each of its Subsidiaries has
obtained or has applied for all applicable environmental, health and safety
permits, licenses, variances, approvals and authorizations required under
Environmental Laws (collectively, "Environmental Permits") necessary for the
conduct of its operations, and such Environmental Permits are in effect or,
where applicable, a renewal application has been timely filed, and the Company
and its Subsidiaries are in compliance in all respects with all terms and
conditions of such Environmental Permits;
(iii) there is no Environmental Claim pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries;
(iv) to the knowledge of the Company, there have been
no Releases of any Hazardous Materials that would be reasonably likely to form
the basis of any material Environmental Claim against the Company, any of its
Subsidiaries or any predecessor thereof; and
(v) none of the properties currently owned, leased or
operated, or, to the knowledge of the Company, formerly owned, leased or
operated, by the Company, its Subsidiaries or any predecessor thereof, are now,
or were in the past, listed on the National Priorities List of Superfund Sites,
any analogous state list or any database listing sites for the purpose of
investigation under Environmental Laws.
(b) For purposes of this Agreement:
(i) "Environmental Claim" means any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
information requests,
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directives, claims, liens, investigations, proceedings or notices of
noncompliance, violation or status as a potentially responsible person or
otherwise liable party by any Person (including any Governmental Entity)
relating to or alleging potential liability (including, without limitation,
potential responsibility for or liability for enforcement, investigatory costs,
cleanup costs, response costs, removal costs, natural resources damages,
property damages, personal injuries or penalties) relating to (A) the presence,
or Release or threatened Release into the environment, of any Hazardous
Materials at any location; or (B) circumstances forming the basis of any
violation or alleged violation of any Environmental Law; or (C) any and all
claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief relating to any Environmental Laws.
(ii) "Environmental Laws" means all applicable
federal, state and local laws, rules, requirements, regulations and judicial or
administrative opinions, orders or decrees, and any common law causes of action,
in each case relating to pollution, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or protection of human or employee health or safety including, without
limitation, laws and regulations relating to Releases of Hazardous Materials.
(iii) "Hazardous Materials" means (A) any petroleum
or any by-products or fractions thereof, asbestos or asbestos-containing
materials, urea formaldehyde foam insulation, any form of natural gas,
explosives, polychlorinated biphenyls ("PCBs"), radioactive materials, ionizing
radiation or electromagnetic field radiation; (B) any chemicals, materials or
substances which are included in the definition of "wastes," "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
substances," "toxic substances," "toxic pollutants," "pollutants,"
"contaminants," or words of similar import under any Environmental Law; and (C)
any other chemical, material or substance, regulated under any Environmental
Law.
(iv) "Release" means any release, spill, emission,
leaking, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including without limitation ambient air,
atmosphere, soil, surface water, groundwater or property).
4.17. Title to Assets. The Company and its Subsidiaries have
good and marketable title to all of their real and personal properties and
assets reflected in the 1999 Balance Sheet (other than assets disposed of since
March 31, 1999 in the ordinary course of business, and properties and assets
acquired since March 31, 1999), in each case free and clear of all Encumbrances
except for (i) liens for Taxes accrued but not yet payable; (ii) liens arising
as a matter of law in the ordinary course of business with respect to
obligations incurred after the date of the 1999 Balance Sheet, provided that the
obligations secured by such liens are not delinquent; (iii) such imperfections
of title and
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Encumbrances, if any, as would not have a Material Adverse Effect; and (iv) the
matters set forth in Section 4.7 of the Company Disclosure Letter. The Company
and its Subsidiaries own, or have valid leasehold interests in, all properties
and assets used in the conduct of their business. Any real property and other
assets held under lease by the Company or any of its Subsidiaries are held under
valid, subsisting and enforceable leases with such exceptions which,
individually or in the aggregate, would not interfere with the use made or
proposed to be made by the Company or any of its Subsidiaries of such property.
4.18. Insurance Policies. The Company and its Subsidiaries
have obtained and maintained in full force and effect insurance with insurance
companies or associations in such amounts, on such terms and covering such
risks, as is customarily carried by reasonably prudent persons conducting
businesses or owning or leasing assets similar to those conducted, owned or
leased by the Company, except where the failure to obtain or maintain such
insurance, individually or in the aggregate, would not have a Material Adverse
Effect.
4.19. Material Contracts. Section 4.19 of the Company
Disclosure Letter sets forth a list of all (i) Contracts for borrowed money or
guarantees thereof, (ii) Contracts containing non-compete covenants restricting
the business activities of the Company or its Subsidiaries and (iii) Contracts
for indebtedness payable to the Company or any of its Subsidiaries from any
officers or directors or affiliates (other than the Company's Subsidiaries). All
Contracts to which the Company or any of its Subsidiaries is a party, or by
which any of their respective assets are bound, are valid and binding, in full
force and effect and, to the Company's knowledge, enforceable against the
parties thereto in accordance with their respective terms, except where the
failure to be so valid and binding, in full force and effect or enforceable,
individually or in the aggregate, would not have a Material Adverse Effect.
Except as set forth in Section 4.19 of the Company Disclosure Letter, there is
not under any such Contract, any existing default, or event, which after notice
or lapse of time, or both, would constitute a default, by the Company or any of
its Subsidiaries, or to the Company's knowledge, any other party, other than any
such defaults or events which, individually or in the aggregate, would not have
a Material Adverse Effect. As of the date hereof, the Company has no outstanding
indebtedness for borrowed money and has not incurred any indebtedness under the
Loan and Security Agreement, dated April 20, 1999, between Greyrock Capital, a
Division of NationsCredit Commercial Corporation and the Company (the "Loan
Agreement").
4.20. Opinion of Financial Advisor. The Board of Directors of
the Company has received the written opinion of the Financial Advisor to the
effect that, as of May 25, 1999, the consideration to be received by the holders
of shares of Common Stock pursuant to the Offer and the Merger is fair to such
holders from a financial point of view.
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4.21. State Takeover Statutes. The Board of Directors of the
Company has approved the Offer, the Merger and this Agreement and such approval
is sufficient to render inapplicable to the Offer, the Merger, this Agreement
and the Option Agreement and the transactions contemplated hereby or by the
Ancillary Documents, the provisions of Section 203 of the DGCL to the extent, if
any, such Section is applicable to the transactions contemplated hereby or
thereby. To the Company's knowledge, no other state takeover statute or similar
statute or regulation applies to the Offer, the Merger or the transactions
contemplated hereby.
4.22. Required Vote of Company Stockholders. Unless the Merger
may be consummated in accordance with Section 253 of the DGCL, the only vote of
the stockholders of the Company required to adopt this Agreement, the Ancillary
Documents and to approve the Merger and the transactions contemplated hereby and
thereby, is the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock.
4.23. Rights Agreement. The Company has amended the Rights
Agreement so that the Rights Agreement will not be applicable to this Agreement,
the Offer, the announcement of the Offer, the purchase of shares of Common Stock
by Parent or Merger Sub pursuant to the Offer, the Merger, the Option Agreement
or any other action contemplated hereby or by the Ancillary Documents.
4.24. Year 2000 Compliance; Euro Compliance. (a) Except as set
forth in Section 4.24 of the Company Disclosure Letter or the Company Reports:
(i) the computer systems of the Company and its Subsidiaries are Year 2000
Compliant and Euro Compliant in all material respects; (ii) all inventory,
products and independently developed applications of the Company and its
Subsidiaries that is, consists of, includes or uses computer software is Year
2000 Compliant and Euro Compliant in all material respects; and (iii) to the
knowledge of the Company, any failure on the part of the customers of and
suppliers to the Company and its Subsidiaries to be Year 2000 Compliant by
December 31, 1999 will not have a Material Adverse Effect.
(b) The term "Year 2000 Compliant", with respect to a computer
system or software program, means that such computer system or program: (i) is
capable of recognizing, processing, managing, representing, interpreting and
manipulating correctly date-related data for dates earlier and later than
January 1, 2000; (ii) has the ability to provide date recognition for any data
element without limitation; (iii) has the ability to function automatically into
and beyond the year 2000 without human intervention and without any change in
operations associated with the advent of the year 2000; (iv) has the ability to
interpret data, dates and time correctly into and beyond the year 2000; (v) has
the ability not to produce noncompliance in existing data, nor otherwise corrupt
such data, into and beyond the year 2000; (vi) has the ability to process
correctly after January
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1, 2000, data containing dates before that date; and (vii) has the ability to
recognize all "leap year" dates, including February 29, 2000.
(c) The term "Euro Compliant, with respect to a computer
system or software program, means that such computer system or program contain
Euro functionality enabling companies to process multiple currencies and address
the requirements of Euro compliance.
ARTICLE 5
5. Representations and Warranties of Parent, Purchaser and Merger Sub.
Parent, Purchaser and Merger Sub hereby represent and warrant to the Company as
of the date of this Agreement as follows:
5.1. Existence; Good Standing; Corporate Authority. Each of
Parent, Purchaser and Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to own,
operate and lease its properties and carry on its business as now conducted,
except where the failure to have such power and authority, individually or in
the aggregate, would not materially adversely affect the ability of Parent,
Purchaser and Merger Sub to consummate the transactions contemplated hereby and
by the Ancillary Documents.
5.2. Authorization, Validity and Effect of Agreements. Each of
Parent, Purchaser and Merger Sub has the requisite corporate power and authority
to execute and deliver this Agreement and the Ancillary Documents and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Ancillary Documents and the consummation by
Parent, Purchaser and Merger Sub of the transactions contemplated hereby and
thereby have been duly and validly authorized by the respective Boards of
Directors of Parent, Purchaser and Merger Sub and by Purchaser as the sole
stockholder of Merger Sub and no other corporate proceedings on the part of
Parent, Purchaser or Merger Sub are necessary to authorize this Agreement and
the Ancillary Documents or to consummate the transactions contemplated hereby
and thereby. This Agreement has been, and any Ancillary Documents at the time of
execution will have been, duly and validly executed and delivered by Parent,
Purchaser and Merger Sub, and (assuming this Agreement and such Ancillary
Documents each constitutes a valid and binding obligation of the Company)
constitutes and will constitute the valid and binding obligations of each of
Parent, Purchaser and Merger Sub, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
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<PAGE> 29
5.3. No Violation. Neither the execution and delivery of this
Agreement or any of the Ancillary Documents by Parent, Purchaser and Merger Sub,
nor the consummation by them of the transactions contemplated hereby or thereby,
will (i) violate, conflict with or result in any breach of any provision of the
respective certificates of incorporation or by-laws of Parent, Purchaser or
Merger Sub; (ii) other than the filings provided for in Section 2.3 and the
filings required under the Exchange Act and the HSR Act, require any consent,
approval or authorization of, or declaration, filing or registration with, any
Governmental Entity, the lack of which, individually or in the aggregate, would
have a material adverse effect on the ability of Parent, Purchaser or Merger Sub
to consummate the transactions contemplated hereby, (iii) violate any Laws
applicable to Parent, Purchaser or the Merger Sub or any of their respective
assets, except for violations which, individually or in the aggregate, would not
have a material adverse effect on the ability of Parent, Purchaser or Merger Sub
to consummate the transactions contemplated hereby, and (iv) violate, conflict
with or result in a breach of any provision of, constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, result in the termination or in a right of termination of, accelerate the
performance required by or benefit obtainable under, result in the creation of
any Encumbrance upon any of the properties of Parent, Purchaser or Merger Sub
under, or result in there being declared void, voidable, or without further
binding effect, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any license, franchise, permit, lease,
contract, agreement or other instrument, commitment or obligation to which
Parent, Purchaser or Merger Sub is bound, except for any of the foregoing
matters which, individually or in the aggregate, would not materially adversely
affect the ability of Parent, Purchaser and Merger Sub to consummate the
transactions contemplated hereby and by the Ancillary Documents.
5.4. Interim Operations of Merger Sub. Merger Sub was formed
solely for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations as
contemplated hereby.
5.5. Financing. Parent has, and will have at the time of
consummation of the Offer and at the Effective Time, funds available to it
sufficient to consummate the Offer and the Merger on the terms contemplated
hereby. At the time of consummation of the Offer and at the Effective Time,
Parent and Purchaser will cause the Merger Sub to have funds available to it
sufficient to consummate the Offer and the Merger on the terms contemplated
hereby.
5.6. Interested Stockholder. Provided that the approvals set
forth in Section 1.3(a) are obtained, as of the date hereof, (i) neither Parent,
Purchaser nor Merger Sub nor any of their affiliates is, with respect to the
Company, an "Interested Stockholder", as such term is defined in Section 203 of
the DGCL and (ii) neither Parent,
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Purchaser nor Merger Sub nor any of their affiliates beneficially owns any
shares of Common Stock of the Company.
ARTICLE 6
6. Covenants.
6.1. Alternative Proposals. The Company agrees (a) that,
between the date hereof and the earlier of the Effective Time or the termination
of this Agreement in accordance with Article 8, neither it nor any of its
Subsidiaries shall, and it shall direct and use its best efforts to cause its
officers, directors, employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) (the "Representatives") not to, initiate, solicit or
encourage, directly or indirectly, any inquiries or the making or implementation
of any proposal or offer (including, without limitation, any proposal or offer
to its stockholders) with respect to a merger, acquisition, consolidation or
similar transaction involving, or any purchase of all or any significant portion
of the assets or any equity securities (other than pursuant to outstanding
Options, Warrants and Purchase Rights) of, the Company or any of its
Subsidiaries (any such proposal or offer being hereinafter referred to as an
"Alternative Proposal") or engage in any negotiations concerning, or provide any
confidential information or data to, afford access to the properties, books or
records of the Company or any of its Subsidiaries to, or have any discussions
with, any person relating to an Alternative Proposal, or otherwise facilitate
any effort or attempt to make or implement an Alternative Proposal; (b) that it
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing, and it will take the necessary steps to inform such
parties of the obligations undertaken in this Section 6.1; and (c) that it will
notify Purchaser immediately of the identity of the potential acquiror and the
terms of such person's or entity's proposal if any such inquiries or proposals
are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with, the
Company; provided, however, that nothing contained in this Section 6.1 shall
prohibit the Company or its Subsidiaries or its Representatives, upon approval
by the Board, from (i) prior to the acceptance for payment of shares of Common
Stock by Merger Sub pursuant to the Offer, furnishing information to, or
entering into discussions or negotiations with, any person or entity that makes
an unsolicited bona fide proposal to acquire the Company pursuant to a merger,
consolidation, share exchange, purchase of substantially all of the assets of
the Company, a business combination or other similar transaction, if, and only
to the extent that, (A) such proposal was not solicited, encouraged or knowingly
facilitated by the Company, its Subsidiaries or their agents in violation of
this Section 6.1 or the letter, dated May 27, 1999, from Wonderware Corporation
to the Company, (B) such proposal is not subject to the receipt of any necessary
financing, unless the Board has determined
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in good faith, based on the advice of the Financial Advisor or other nationally
recognized investment banking firm, that such proposal is readily financeable
and involves consideration that provides a higher value per share than the
Merger Consideration, (C) the Board of Directors of the Company determines in
good faith after receiving a written opinion from outside counsel that the
failure to take such action would be a violation by the Board of Directors of
its fiduciary duties to stockholders imposed by Law and (D) prior to furnishing
information to, or entering into discussions or negotiations with, such person
or entity, the Company provides written notice to Purchaser to the effect that
it is furnishing information to, or entering into discussions or negotiations
with, such person or entity; and (ii) to the extent applicable, complying with
Rule 14e-2(a) promulgated under the Exchange Act with regard to an Alternative
Proposal. The Company shall keep Purchaser immediately informed of the status of
any such discussions or negotiations permitted pursuant to the previous sentence
(including the identify of such person or entity and the terms of any proposal).
Nothing in this Section 6.1 shall (x) permit the Company to terminate this
Agreement (except as specifically provided in Article 8 hereof), (y) permit the
Company to enter into any agreement with respect to an Alternative Proposal
during the term of this Agreement, or (z) affect any other obligation of the
Company under this Agreement.
6.2. Interim Operations. (a) From the date of this Agreement
until the Effective Time, except as set forth in Section 6.2 of the Company
Disclosure Letter, unless Purchaser has consented in writing thereto, the
Company shall, and shall cause its Subsidiaries to, (i) conduct its operations
according to its ordinary course of business consistent with past practice; (ii)
use its reasonable best efforts to preserve intact its business organizations
and goodwill, keep available the services of its officers and employees, and
maintain satisfactory relationships with those persons having business
relationships with them; (iii) upon the discovery thereof, promptly notify
Purchaser of the existence of any breach of any representation or warranty
contained herein (or, in the case of any representation or warranty that makes
no reference to Material Adverse Effect, any breach of such representation or
warranty in any material respect) or the occurrence of any event that would
cause any representation or warranty contained herein no longer to be true and
correct (or, in the case of any representation or warranty that makes no
reference to Material Adverse Effect, to no longer be true and correct in any
material respect); and (iv) promptly deliver to Purchaser true and correct
copies of any report, statement or schedule filed with the SEC subsequent to the
date of this Agreement, any internal monthly reports prepared for or delivered
to the Board of Directors after the date hereof and monthly financial statements
for the Company and its Subsidiaries for and as of each month end subsequent to
the date of this Agreement.
(b) From and after the date of this Agreement until the
Effective Time, except as set forth in Section 6.2 of the Company Disclosure
Letter, unless Purchaser has consented in writing thereto, the Company shall
not, and shall not permit its Subsidiaries to, (i) amend its certificate of
incorporation or by-laws; (ii) issue, sell or pledge any
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shares of its capital stock or other ownership interest in the Company (other
than issuances of Common Stock in respect of any exercise of stock options or
warrants outstanding on the date hereof and disclosed in Section 4.4 of the
Company Disclosure Letter or pursuant to the Purchase Plan as permitted by
Section 6.9) or its Subsidiaries, or any securities convertible into or
exchangeable for any such shares or ownership interest, or any rights, warrants
or options to acquire or with respect to any such shares of capital stock,
ownership interest, or convertible or exchangeable securities (or derivative
instruments in respect of the foregoing); (iii) effect any stock split or
otherwise change its capitalization as it exists on the date hereof; (iv) grant,
confer or award any option, warrant, convertible security or other right to
acquire any shares of its capital stock or take any action to cause to be
exercisable any otherwise unexercisable option under any existing stock option
plan (except as otherwise required by the terms of such unexercisable options or
the stock option plan); (v) declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital stock or
other ownership interests (other than such payments by the Subsidiaries to the
Company); (vi) directly or indirectly redeem, purchase or otherwise acquire any
shares of its capital stock or capital stock of its Subsidiaries; (vii) sell,
lease or otherwise dispose of any of its assets (including capital stock of its
Subsidiaries), other than the sale or disposition of inventory or the license of
the Company's products in the ordinary course of business or the sale, lease or
other disposition of assets which, individually or in the aggregate, are
obsolete or not material to the Company and its Subsidiaries taken as a whole;
(viii) (x) acquire by merger, purchase or any other manner, any business or
entity or (y) otherwise acquire any assets which would be material, individually
or in the aggregate, to the Company and its Subsidiaries taken as a whole,
except for purchases of inventory, supplies or capital equipment in the ordinary
course of business consistent with past practice; (ix) incur or assume any
long-term or short-term debt for borrowed money, including debt under the Loan
Agreement; provided that, upon the written consent of Purchaser (which consent
shall not be unreasonably withheld), the Company may incur or assume debt under
the Loan Agreement at any time after 75 days after the date hereof; (x) assume,
guarantee or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the debt or other obligations of any other person
excluding the endorsement of checks and other commercial instruments in the
ordinary course of business, other than obligations (other than debt) of its
Subsidiaries incurred in the ordinary course of business; (xi) make or forgive
any loans, advances or capital continuations to, or investments in, any other
person; (xii) grant any stock-related or performance awards; (xiii) enter into
any new employment, severance, consulting or salary continuation agreements with
any officers, directors or employees or grant any increases in compensation or
benefits to employees; (xiv) except to the extent required by Law, adopt or
amend in any material respect any material employee benefit plan or arrangement;
(xv) amend, change or waive (or exempt any person or entity from the effect of)
the Rights Agreement, except as contemplated by Section 4.23; (xvi) permit any
insurance policy naming the Company or any Subsidiary as a beneficiary or a loss
payee
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to be canceled or terminated other than in the ordinary course of business;
(xvii) settle or compromise any pending or threatened Litigation; (xviii) make
any Tax election or settle any Tax liability other than settlements involving
solely the payment of money (without admission of liability) not to exceed
$50,000; and (xix) agree in writing or otherwise to take any of the foregoing
actions.
6.3. Company Stockholder Approval; Proxy Statement. (a) If
approval or action in respect of the Merger by the stockholders of the Company
is required by applicable Law, the Company, acting through the Board, shall (i)
call as promptly as practicable following the consummation of the Offer, a
meeting of its stockholders (the "Stockholders Meeting") for the purpose of
voting upon the Merger, (ii) hold the Stockholders Meeting as soon as
practicable following the purchase of shares of Common Stock pursuant to the
Offer, and (iii) recommend to its stockholders the approval of the Merger. The
record date for the Stockholders Meeting shall be a date subsequent to the date
on which Purchaser or Merger Sub becomes a record holder of Common Stock
purchased pursuant to the Offer.
(b) If required by applicable Law, the Company will, as soon
as practicable following the expiration of the Offer, prepare and file a
preliminary Proxy Statement (such proxy statement, and any amendments or
supplements thereto, the "Proxy Statement") or, if applicable, an information
statement with the SEC with respect to the Stockholders Meeting and will use its
best efforts to respond to any comments of the SEC or its staff and to cause the
Proxy Statement to be cleared by the SEC. The Company will notify Purchaser of
the receipt of any comments from the SEC or its staff and of any request by the
SEC or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply Purchaser with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. The Company shall give Purchaser and its counsel the
opportunity to review the Proxy Statement prior to it being filed with the SEC
and shall give Purchaser and its counsel the opportunity to review all
amendments and supplements to the Proxy Statement and all responses to requests
for additional information and replies to comments prior to their being filed
with, or sent to, the SEC. Each of the Company and Purchaser agrees to use its
best efforts, after consultation with the other parties hereto, to respond
promptly to all such comments of and requests by the SEC. As promptly as
practicable after the Proxy Statement has been cleared by the SEC, the Company
shall mail the Proxy Statement to the stockholders of the Company. If at any
time prior to the approval of this Agreement by the Company's stockholders there
shall occur any event which should be set forth in an amendment or supplement to
the Proxy Statement, the Company will prepare and mail to its stockholders such
an amendment or supplement.
(c) The Company represents and warrants that the Proxy
Statement will comply in all material respects with the Exchange Act and, at the
respective times filed
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with the SEC and distributed to stockholders of the Company, will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation or warranty as to
any information included in the Proxy Statement that was provided by Parent,
Purchaser or Merger Sub. Purchaser represents and warrants that none of the
information supplied by Parent, Purchaser or Merger Sub for inclusion in the
Proxy Statement will, at the respective times filed with the SEC and distributed
to stockholders of the Company, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) Following the consummation of the Offer, the Company shall
use its best efforts to obtain the necessary approvals by its stockholders of
the Merger, this Agreement and the transactions contemplated hereby.
(e) Parent agrees to cause all shares of Common Stock
purchased by Merger Sub pursuant to the Offer and all other shares of Common
Stock owned by Purchaser, Merger Sub or any other subsidiary or affiliate of
Parent to be voted in favor of the approval of the Merger.
6.4. Filings; Other Action. Subject to the terms and
conditions herein provided, the Company, Parent, Purchaser, and Merger Sub
shall: (a) use their reasonable best efforts to cooperate with one another in
(i) determining which filings other than under the Exchange Act and under the
HSR are required to be made prior to the expiration of the Offer or the
Effective Time with, and which consents, approvals, permits or authorizations
are required to be obtained prior to the Effective Time from, Governmental
Entities or other third parties in connection with the execution and delivery of
this Agreement and any other Ancillary Documents and the consummation of the
transactions contemplated hereby and thereby and (ii) timely making all filings
under the Exchange Act and under the HSR and all such other filings and timely
seek all required consents, approvals, permits, authorizations and waivers; and
(b) use their reasonable best efforts to take, or cause to be taken, all other
action and do, or cause to be done, all other things necessary, proper or
appropriate to consummate and make effective the transactions contemplated by
this Agreement at the earliest practicable time. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purpose of this Agreement, the proper officers and directors of Parent,
Purchaser and the Surviving Corporation shall take all such necessary action.
6.5. Access to Information. (a) From the date of this
Agreement until the Closing, the Company shall, and shall cause its Subsidiaries
to, (i) give Purchaser and
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its authorized representatives full access to all books, records, personnel,
offices and other facilities and properties of the Company and its Subsidiaries
and their accountants and accountants' work papers, (ii) permit Purchaser to
make such copies and inspections thereof as Purchaser may reasonably request and
(iii) furnish Purchaser with such financial and operating data and other
information with respect to the business and properties of the Company and its
Subsidiaries as Purchaser may from time to time reasonably request; provided
that no investigation or information furnished pursuant to this Section 6.5
shall affect any representation or warranty made herein by the Company or the
conditions to the obligations of Parent, Purchaser and Merger Sub to consummate
the transactions contemplated by this Agreement.
(b) All such information shall be subject to the terms and
conditions of the Confidentiality Agreement.
6.6. Publicity. The initial press release relating to this
Agreement shall be issued jointly by the Company and Parent. Thereafter, subject
to their respective legal obligations, the Company and Parent shall consult with
each other, and use reasonable efforts to agree upon the text of any press
release, before issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
6.7. Further Action. Each party hereto shall, subject to the
fulfillment at or before the Effective Time of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the Merger.
6.8. Insurance; Indemnity. (a) Purchaser will cause the
Surviving Corporation to maintain in effect for not less than three years after
the Effective Time, the Company's current directors and officers insurance
policies, if such insurance is obtainable (or policies of at least the same
coverage containing terms and conditions no less advantageous to the current and
all former directors and officers of the Company) with respect to acts or
failures to act prior to the Effective Time, including acts relating to the
transactions contemplated by this Agreement; provided, however, that in order to
maintain or procure such coverage, Purchaser and the Surviving Corporation shall
not be required to maintain or obtain policies providing such coverage except to
the extent such coverage can be provided at an annual cost of no greater than
1.5 times the most recent annual premium paid by the Company prior to the date
hereof (the "Cap"); and provided, further, that if equivalent coverage cannot be
obtained, or can be obtained only by paying an annual premium in excess of the
Cap, Purchaser or the Surviving Corporation shall only be required to obtain as
much coverage as can be obtained by paying an annual premium equal to the Cap.
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(b) From and after the Effective Time, Purchaser and the
Surviving Corporation shall indemnify and hold harmless each person who is, or
has been at any time prior to the date hereof or who becomes prior to the
Effective Time, an officer or director of the Company or any of its Subsidiaries
(each, an "Indemnified Party"), in connection with any claim, action, suit,
proceeding or investigation (an "Action") arising out of or pertaining to acts
or omissions by them in their capacities as such, which acts or omissions
occurred prior to the Effective Time, whether asserted or claimed prior to, at
or after the Effective Time, at least to the extent that such Indemnified Party
is presently indemnified by the Company. In the event of any such Action, the
Surviving Corporation shall control the defense of such Action with counsel
selected by the Surviving Corporation, which counsel shall be reasonably
acceptable to the Indemnified Party; provided, however, that the Indemnified
Party shall be permitted to participate in the defense of such Action through
counsel selected by the Indemnified Party, which counsel shall be reasonably
acceptable to the Surviving Corporation, at the Indemnified Party's expense.
Notwithstanding the foregoing, if there is any conflict between the Surviving
Corporation and any Indemnified Parties or there are additional defenses
available to any Indemnified Parties, the Indemnified Parties shall be permitted
to participate in the defense of such Action with counsel selected by the
Indemnified Parties, which counsel shall be reasonably acceptable to the
Surviving Corporation, and Purchaser shall cause the Surviving Corporation to
pay the reasonable fees and expenses of such counsel, as accrued and in advance
of the final disposition of such Action to the fullest extent permitted by
applicable law; provided, however, that the Surviving Corporation shall not be
obligated to pay the reasonable fees and expenses of more than one counsel for
all Indemnified Parties in any single Action except to the extent that, in the
opinion of counsel for the Indemnified Parties, two or more of such Indemnified
Parties have conflicting interests in the outcome of such Action. The Surviving
Corporation shall not be liable for any settlement effected without its written
consent, which consent shall not unreasonably be withheld.
(c) Purchaser shall cause the Surviving Corporation promptly
to adopt and keep in effect provisions in the Surviving Corporation's
certificate of incorporation and by-laws to provide for exculpation of director
and officer liability and indemnification (and advancement of expenses related
thereto) of the past and present officers and directors of the Company at least
to the extent they are presently indemnified by the Company and such provisions
shall not be amended except as either required by applicable Law or to make
changes permitted by Law that would enhance the rights of past or present
officers and directors to indemnification or advancement of expenses. Purchaser
shall cause the Surviving Corporation to comply with the terms and conditions of
all existing indemnification agreements with the Company's officers and
directors.
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(d) If Parent, Purchaser or the Surviving Corporation or any
of their respective successors or assigns (i) shall consolidate with or merge
into any other corporation or other entity and shall not be the continuing or
surviving corporation or entity of the consolidation or merger or (ii) shall
transfer all or substantially all of its properties and assets to any
individual, corporation or other entity, then and in each such case, proper
provisions shall be made so that the successors and assigns of Parent, Purchaser
or the Surviving Corporation shall assume all of the obligations set forth in
this Section 6.8.
(e) The provisions of this Section 6.8 are intended to be for
the benefit of, and shall be enforceable by, each of the Indemnified Parties,
their heirs and their representatives.
6.9. Employee Stock Purchase Plan. The Company shall take such
action as is required to cause the current "Payment Period" under the Purchase
Plan to terminate on the earlier of the Effective Time and July 23, 1999. If the
Offer is consummated on or before the final day of the current Payment Period
under the Purchase Plan, the holders of Purchase Rights shall receive from the
Company, promptly after the last day of the Payment Period, a cash payment in
exchange for each share of Common Stock issuable upon exercise of such holder's
Purchase Rights as of the last day of the Payment Period as set forth in the
first sentence hereof, in an amount equal to the Merger Consideration, and each
such Purchase Right shall terminate automatically upon such payment. If the
Offer is not consummated on or before the final day of the current Payment
Period, the Purchase Rights will be exercisable solely for Common Stock in
accordance with the terms of the Purchase Plan. So long as this Agreement has
not been terminated, no additional Payment Period shall begin after the
termination of the current Payment Period.
6.10. Employee Benefits Plan. (a) From and after the Effective
Time, the Surviving Corporation and its Subsidiaries will honor in accordance
with their terms all existing employment, severance, consulting and salary
continuation agreements between the Company or any of its Subsidiaries and any
current or former officer, director, employee or consultant of the Company or
any of its Subsidiaries or group of such officers, directors, employees or
consultants which agreements have been previously disclosed to Purchaser.
(b) To the extent permitted under applicable law, each
employee of the Company or its subsidiaries shall be given credit for all
service with the Company or its Subsidiaries (or service credited by the Company
or its Subsidiaries) under all employee benefit plans, programs, policies and
arrangements maintained by the Surviving Corporation or Purchaser in which they
participate or in which they become participants for purposes of eligibility and
vesting (but not benefit accrual), but only to the extent such years of service
would have been credited under the relevant plan of Purchaser or its
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Subsidiaries if the employee had been a similarly situated employee of Purchaser
or its Subsidiaries during the relevant period of time.
(c) To the extent that any benefit plan of the Surviving
Corporation or any of its Subsidiaries in which an employee of the Company or
its Subsidiaries participates after the Effective Time provides medical or
dental benefits, the Surviving Corporation shall cause any eligible expenses
incurred by such employee on or before the Effective Time under a similar
Company Employee Benefit Plan to be taken into account under the Surviving
Corporation or its Subsidiaries' plan for purposes of satisfying all deductible,
coinsurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year. The Surviving
Corporation agrees to cause to maintain the Company's Flexible Benefits Plan, as
in effect as of the date hereof, through the end of its current plan year.
ARTICLE 7
7. Conditions.
7.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction or waiver, where permissible, prior to the Effective
Time, of the following conditions:
(a) If approval of this Agreement and the Merger by the
holders of Common Stock is required by applicable Law, this Agreement and the
Merger shall have been approved by the requisite vote of such holders.
(b) There shall not have been issued any injunction, or issued
or enacted any Law, which prohibits or has the effect of prohibiting the
consummation of the Merger or makes such consummation illegal.
7.2. Conditions to Obligation of Purchaser and Merger Sub to
Effect the Merger. The obligations of Purchaser and Merger Sub to effect the
Merger shall be further subject to the satisfaction or waiver, on or prior to
the Effective Time, of the condition that Purchaser shall have accepted for
payment and paid for all of the shares of Common Stock tendered pursuant to the
Offer.
ARTICLE 8
8. Termination.
8.1. Termination. This Agreement, notwithstanding approval
thereof by the stockholders of the Company, may be terminated at any time prior
to the Effective Time:
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(a) by mutual written consent of the Board of Directors of the
Company and the Purchaser;
(b) by the Purchaser or the Company:
(i) if the Effective Time shall not have occurred on
or before November 30, 1999 (provided that the right to
terminate this Agreement pursuant to this clause (i) shall not
be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or
resulted in the failure of the Effective Time to occur on or
before such date);
(ii) if there shall be any Law that makes
consummation of the Offer or the Merger illegal or prohibited,
or if any court of competent jurisdiction in the United States
or other Governmental Entity shall have issued an order,
judgment, decree or ruling, or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and
such order, judgment, decree, ruling or other action shall
have become final and non-appealable;
(iii) if the Offer terminates or expires on account
of the failure of any condition specified in Exhibit A without
the Merger Sub having purchased any shares of Common Stock
thereunder (provided that the right to terminate this
Agreement pursuant to this clause (iii) shall not be available
to any party whose failure to fulfill any obligation under
this Agreement has been the cause of or resulted in the
failure of any such condition); or
(iv) if, upon a vote at a duly held meeting, or upon
any adjournment thereof, the stockholders of the Company shall
have failed to give any approval required by applicable Law;
(c) by the Company if there is an Alternative Proposal which
the Board of Directors in good faith determines is more favorable from a
financial point of view to the stockholders of the Company as compared to the
Offer and the Merger, and the Board of Directors determines in good faith after
receiving a written opinion from outside counsel, that failure to terminate this
Agreement would constitute a violation by the Board of Directors of its
fiduciary duties to stockholders imposed by Law; provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(c) shall not be
available (i) if the Company has breached its obligations under Section 6.1, or
(ii) if the Alternative Proposal (x) is subject to a financing condition or (y)
involves consideration that is not entirely cash or does not permit stockholders
to receive the payment of the offered consideration in respect of all shares at
the same time, unless the Board has determined in good faith, based on the
advice of the Financial Advisor or other nationally recognized
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investment banking firm, that (in the case of clause (x)) the Alternative
Proposal is readily financeable and (in the case of clause (y)) that such offer
provides a higher value per share than the consideration per share pursuant to
the Offer or the Merger, or (iii) if, prior to or concurrently with any
purported termination pursuant to this Section 8.1(c), the Company shall not
have paid the fees contemplated by Section 8.2, or (iv) if the Company has not
provided Purchaser and Merger Sub with three business days prior written notice
of its intent to so terminate this Agreement and delivered to the Purchaser and
Merger Sub a copy of the written agreement embodying the Alternative Proposal in
its then most definitive form; and
(d) by Purchaser if the Board of Directors shall have failed
to recommend, or shall have withdrawn, modified or amended its approval in a
manner adverse or recommendation of the Offer or the Merger in a manner adverse
to Purchaser, or shall have resolved to do any of the foregoing.
8.2. Effect of Termination and Abandonment. In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article 8, all obligations of the parties hereto shall terminate, except the
obligations of the parties pursuant to this Section 8.2 and Sections 6.5(b),
6.6, 9.5 and 9.6. If this Agreement (i) shall terminate pursuant to Section
8.1(b)(iii) as a result of the failure of the Company to satisfy any of the
conditions set forth in paragraphs (d), (e) or (f) of Exhibit A, or pursuant to
Sections 8.1(c) or 8.1(d), or (ii) in the event that an Alternative Proposal
shall have been made known to the Company or shall have been made directly to
the stockholders of the Company generally or shall have otherwise become
publicly known or any person shall have publicly announced an intention (whether
or not conditional) to make an Alternative Proposal and thereafter this
Agreement is terminated by either Purchaser or the Company pursuant to (x)
Section 8.1(b)(i) or (y) Section 8.1(b)(iii) as a result of the failure of the
Minimum Condition to be satisfied prior to the expiration of the Offer, then the
Company shall concurrently with any such termination, pay to Purchaser a fee
equal to $3,000,000 (the "Termination Fee"); provided, however, that the
Termination Fee shall not be payable to Purchaser pursuant to clause (ii) of
this Section 8.2 unless and until within 12 months of such termination the
Company or any of its Subsidiaries enters into any definitive agreement with
respect to any Alternative Proposal or any Alternative Proposal is consummated,
in which event the Termination Fee shall be payable upon consummation thereof.
The parties agree that such Termination Fee shall be Parent's, Purchaser's and
Merger Sub's exclusive remedy for any loss, liability, damage or claim arising
out of or in connection with any such termination of this Agreement. The
Termination Fee shall be exclusive of any expenses paid pursuant to Section 9.6.
The Company acknowledges that the agreements contained in this Section 8.2 are
an integral part of the transactions contemplated by this Agreement, and that,
without these agreements, Parent, Purchaser and Merger Sub would not enter into
this Agreement.
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8.3. Amendment. To the extent permitted by applicable law,
this Agreement may be amended by action taken by or on behalf of the Board of
Directors of the Company (subject to Section 1.4) and Parent and Purchaser at
any time before or after adoption of this Agreement by the stockholders of the
Company but, after any such stockholder approval, no amendment shall be made
which decreases the Merger Consideration or which adversely affects the rights
of, or the income tax consequences to, the Company's stockholders hereunder
without the approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of all of the parties.
8.4. Extension; Waiver. At any time prior to the Effective
Time, any party hereto, by action taken by its board of directors, may, to the
extent legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE 9
9. General Provisions.
9.1. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement, or in any instrument
delivered pursuant to this Agreement, shall survive the Effective Time.
9.2. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date of receipt and shall be delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt
requested), sent by overnight courier or sent by facsimile, to the applicable
party at the following addresses or facsimile numbers (or at such other address
or telecopy number for a party as shall be specified by like notice):
If to Purchaser or Merger Sub: If to the Company:
Foxboro Company Marcam Solutions, Inc.
33 Commercial Street 95 Wells Avenue
B52-SI Newton, Massachusetts 02159
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<PAGE> 42
Foxboro, Massachusetts 02035-2099 Attention: President
Attention: Dr. George Sarney Facsimile: (617) 964-5614
Facsimile: (508) 549-6689
With copies to: With a copy to:
Fried, Frank, Harris, Testa, Hurwitz & Thibeault, LLP
Shriver & Jacobson 125 High Street
One New York Plaza Boston, Massachusetts 02110
New York, NY 10004 Attention: Mark H. Burnett, Esq. and
Attention: Paul M. Reinstein, Esq. Edwin L. Miller, Jr., Esq.
Facsimile: (212) 859-4000 Facsimile (617) 248-7100
and
Wonderware Corporation
100 Technology Drive
Irvine, California 92618
Attention: Philip Maynard
Facsimile: (949) 453-6543
9.3. Assignment; Binding Effect. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties; provided, however, that either
Purchaser or Merger Sub (or both) may assign its rights hereunder (including,
without limitation, the right to make the Offer and/or to purchase shares of
Common Stock pursuant to the Offer) to a wholly owned subsidiary or subsidiaries
of Parent; and, further provided that nothing shall relieve the assignor from
its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns. Notwithstanding anything contained in
this Agreement to the contrary, except for the provisions of Sections 6.8 and
6.10 which may be enforced directly by the beneficiaries thereof, nothing in
this Agreement, expressed or implied, is intended to confer on any person other
than the parties hereto or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
9.4. Entire Agreement. This Agreement, the Confidentiality
Agreement, the Company Disclosure Letter, the Exhibits, the Ancillary Documents
and any other documents delivered by the parties in connection herewith
constitute the entire
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<PAGE> 43
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto.
9.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its rules of conflict of laws. Each of the Company, Parent, Purchaser and Merger
Sub hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of any federal district court located in the City of Wilmington,
Delaware or any court of the State of Delaware located in the City of Wilmington
(the "Delaware Courts") for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such courts), waives any objection to
the laying of venue of any such litigation in the Delaware Courts and agrees not
to plead or claim in any Delaware Court that such litigation brought therein has
been brought in an inconvenient forum.
9.6. Fees and Expenses. Except as otherwise provided in
Section 8.2, whether or not the Offer or the Merger is consummated, all fees,
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees,
costs and expenses.
9.7. Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
(i) "affiliate" of a Person means a Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned Person.
(ii) "knowledge" of any party hereto shall mean the
knowledge of any of the executive officers of that party after due inquiry by
such officers.
(iii) "Person" means an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization, entity or group (as defined in the Exchange Act).
9.8. Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever. The table of contents contained
in this Agreement is for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
9.9. Interpretation. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural
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persons shall include corporations and partnerships and vice versa. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be understood to be followed by the words "without limitation."
9.10. Waivers. 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 in this Agreement or in any of the Ancillary Documents. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
9.11. Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
9.12. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any Delaware Court, this
being in addition to any other remedy to which they are entitled at law or in
equity.
9.13. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which, when so executed and
delivered, shall be an original. All such counterparts shall together constitute
one and the same instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
MARCAM SOLUTIONS, INC. INVENSYS, plc
By: /s/ Jonathan C. Crane By: /s/ Allen Yurko
----------------------------- -----------------------------
Name: Jonathan C. Crane Name: Allen Yurko
Title: President Title: President and CEO
M ACQUISITION CORP.
By: /s/ George Sarney
-----------------------------
Name: George Sarney
Title: President
M MERGER SUB, INC.
By: /s/ Thomas G. Foley
-----------------------------
Name: Thomas G. Foley
Title: Vice President
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<PAGE> 46
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1................................................................................................ 1
1. The Offer................................................................................... 1
1.1. The Offer.......................................................................... 1
1.2. Actions by Purchaser and Merger Sub................................................ 3
1.3. Actions by the Company............................................................. 3
1.4. Directors.......................................................................... 5
ARTICLE 2................................................................................................ 6
2. The Merger.................................................................................. 6
2.1. The Merger......................................................................... 6
2.2. The Closing........................................................................ 7
2.3. Effective Time..................................................................... 7
2.4. Certificate of Incorporation, Bylaws, Directors and Officers of the
Surviving Corporation.............................................................. 7
ARTICLE 3................................................................................................ 8
3. Effect of the Merger on Securities of Merger Sub and the Company............................ 8
3.1. Merger Sub Stock................................................................... 8
3.2. Company Securities................................................................. 8
3.3. Exchange of Certificates Representing Common Stock................................. 10
3.4. Adjustment of Merger Consideration................................................. 11
3.5. Dissenting Company Stockholders.................................................... 11
3.6. Merger Without Meeting of Stockholders............................................. 11
ARTICLE 4................................................................................................ 11
4. Representations and Warranties of the Company............................................... 12
4.1. Existence; Good Standing; Corporate Authority...................................... 12
4.2. Authorization, Validity and Effect of Agreements................................... 12
4.3. Compliance with Laws............................................................... 13
4.4. Capitalization, etc. .............................................................. 13
4.5. Subsidiaries....................................................................... 14
4.6. No Violation....................................................................... 14
4.7. Company Reports; Offer Documents................................................... 15
4.8. Litigation......................................................................... 17
4.9. Absence of Certain Changes......................................................... 17
4.10. Taxes.............................................................................. 18
4.11. Employee Benefit Plans............................................................. 19
4.12. Labor and Employment Matters....................................................... 20
4.13. Brokers............................................................................ 21
4.14. Intellectual Property Rights....................................................... 21
</TABLE>
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<PAGE> 47
<TABLE>
<S> <C>
4.15. Permits............................................................................ 23
4.16. Environmental Matters.............................................................. 23
4.17. Title to Assets.................................................................... 25
4.18. Insurance Policies................................................................. 25
4.19. Material Contracts................................................................. 25
4.20. Opinion of Financial Advisor....................................................... 26
4.21. State Takeover Statutes............................................................ 26
4.22. Required Vote of Company Stockholders.............................................. 26
4.23. Rights Agreement................................................................... 26
4.24. Year 2000 Compliance, Euro Compliance.............................................. 26
ARTICLE 5................................................................................................ 27
5. Representations and Warranties of Purchaser and Merger Sub.................................. 27
5.1. Existence; Good Standing; Corporate Authority...................................... 28
5.2. Authorization, Validity and Effect of Agreements................................... 28
5.3. No Violation....................................................................... 29
5.4. Interim Operations of Merger Sub................................................... 29
5.5. Financing.......................................................................... 29
5.6. Interested Stockholder............................................................. 29
ARTICLE 6................................................................................................ 29
6. Covenants................................................................................... 29
6.1. Alternative Proposals.............................................................. 31
6.2. Interim Operations................................................................. 31
6.3. Company Stockholder Approval; Proxy Statement...................................... 32
6.4. Filings; Other Action.............................................................. 34
6.5. Access to Information.............................................................. 35
6.6. Publicity.......................................................................... 35
6.7. Further Action..................................................................... 35
6.8. Insurance; Indemnity............................................................... 35
6.9. Employee Stock Purchase Plan....................................................... 36
6.10. Employee Benefits Plan............................................................. 37
ARTICLE 7................................................................................................ 38
7. Conditions.................................................................................. 38
7.1. Conditions to Each Party's Obligation to Effect the Merger......................... 38
7.2. Conditions to Obligation of Purchaser and Merger Sub to Effect the
Merger............................................................................. 38
ARTICLE 8................................................................................................ 38
8. Termination................................................................................. 38
8.1. Termination........................................................................ 38
8.2. Effect of Termination and Abandonment.............................................. 40
8.3. Amendment.......................................................................... 40
8.4. Extension; Waiver.................................................................. 41
</TABLE>
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<PAGE> 48
<TABLE>
<S> <C>
ARTICLE 9................................................................................................ 41
9. General Provisions......................................................................... 41
9.1. Nonsurvival of Representations and Warranties...................................... 41
9.2. Notices............................................................................ 41
9.3. Assignment; Binding Effect......................................................... 42
9.4. Entire Agreement................................................................... 42
9.5. Governing Law...................................................................... 42
9.6. Fee and Expenses................................................................... 43
9.7. Certain Definitions................................................................ 43
9.8. Headings........................................................................... 43
9.9. Interpretation..................................................................... 43
9.10. Waivers............................................................................ 43
9.11. Severability....................................................................... 43
9.12. Enforcement of Agreement........................................................... 44
9.13. Counterparts....................................................................... 44
</TABLE>
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<PAGE> 49
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer, Merger Sub shall not be
required to accept for payment or pay for, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) of the Exchange Act, any shares
of Common Stock not theretofore accepted for payment or paid for and may
terminate or amend the Offer as to such shares of Common Stock to the extent
permitted by this Agreement unless (i) there shall have been validly tendered
and not withdrawn prior to the expiration of the Offer that number of shares of
Common Stock which would represent at least a majority of the outstanding shares
of Common Stock on a fully diluted basis (the "Minimum Condition") and (ii) any
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, applicable to the purchase of shares of Common Stock pursuant to the
Offer shall have expired or been terminated. Furthermore, notwithstanding any
other term of the Offer or this Agreement, Merger Sub shall not be required to
accept for payment or, subject as aforesaid, to pay for any shares of Common
Stock not theretofore accepted for payment or paid for, and may terminate or
amend the Offer to the extent permitted by this Agreement if at any time on or
after the date of this Agreement and before the acceptance of such shares of
Common Stock for payment or the payment therefor, any of the following
conditions shall exist or occur and remain in effect:
(a) there shall have been instituted, pending or threatened in
writing any litigation by the Government of the United States or by any
agency or instrumentality thereof that seeks to: (i) challenge the
acquisition by Purchaser or Merger Sub (or any of its affiliates) of
shares of Common Stock pursuant to the Offer or restrain or prohibit
the making or consummation of the Offer or the Merger, or obtain
damages in connection thereunder, (ii) make the purchase of or payment
for some or all of the shares of Common Stock pursuant to the Offer or
the Merger illegal, (iii) in connection with the Offer or the Merger or
the transactions contemplated by the Merger Agreement, impose
limitations on the ability of Purchaser or Merger Sub (or any of their
affiliates) effectively to acquire or hold, or to require Purchaser,
Merger Sub or the Company or any of their respective affiliates or
subsidiaries to dispose of or hold separate, any material portion of
their assets or the business of any one of them, (iv) impose
limitations on the ability of Purchaser, Merger Sub or their affiliates
to exercise full rights of ownership of the shares of Common Stock
purchased by it, including, without limitation, the right to vote the
shares purchased by it on all matters properly presented to the
stockholders of the Company, or (v) in connection with the Offer or the
Merger or the transactions contemplated by the Merger Agreement, affect
the Purchaser, the Merger Sub, Company or any of their respective
affiliates
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which, in the sole judgment of Purchaser, may have or be likely to have
a Material Adverse Effect or a material adverse effect on the Purchaser
and Merger Sub or any of their affiliates or otherwise make
consummation of the Offer or the Merger or the consummation of the
transactions contemplated hereunder unduly burdensome; or
(b) there shall have been promulgated, enacted, entered,
enforced or deemed applicable to the Offer or the Merger, by any
Governmental Entity any Law that could directly or indirectly result in
any of the consequences referred to in subsection (a) above; or
(c) this Agreement shall have been terminated in accordance
with its terms; or
(d) (i) any of the representations and warranties made by the
Company in this Agreement that are qualified by materiality or Material
Adverse Effect shall not have been true and correct in all respects
when made (except to the extent that any such representation or
warranty refers specifically to another date, in which case such
representation or warranty shall be true and correct in all respects as
of such other date), or the other representations and warranties made
by the Company in this Agreement shall not have been true and correct
in all material respects when made (except to the extent that any such
representation or warranty refers specifically to another date, in
which case such representation or warranty shall be true and correct in
all material respects as of such other date), or (ii) the Company shall
have breached or failed to comply in any material respect with any of
its obligations under this Agreement; or
(e) any corporation, entity, "group" or "person" (as defined
in the Exchange Act), other than Purchaser or Merger Sub, shall have
acquired beneficial ownership of a majority of the outstanding shares
of Common Stock; or
(f) the Company's Board of Directors shall have modified or
amended its recommendation of the Offer in any manner adverse to
Purchaser or Merger Sub or shall have withdrawn its recommendation of
the Offer or shall have recommended acceptance of any Alternative
Proposal or shall have resolved to do any of the foregoing; or
(g) there shall have occurred (i) any general suspension of,
or limitation on prices for, trading in securities on any national
securities exchange or in the over the counter market in the United
States, (ii) a declaration of any banking moratorium by federal or
state authorities or any suspension of payments in respect of banks or
any limitation (whether or not mandatory) imposed by federal or state
authorities on the extension of credit by lending institutions in the
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<PAGE> 51
United States, or (iii) in the case of any of the foregoing existing at
the time of the commencement of the Offer, in the sole judgment of the
Purchaser, a material acceleration or worsening thereof.
Other than the Minimum Condition, the foregoing conditions are for the
sole benefit of Purchaser and Merger Sub and may be asserted by Purchaser or
Merger Sub regardless of the circumstances (including any action or inaction by
Purchaser or the Company) giving rise to any such condition and may be waived by
Purchaser or Merger Sub, in whole or in part, at any time and from time to time,
in the sole discretion of Purchaser. The failure by Purchaser or Merger Sub at
any time to exercise any of the foregoing rights will not be deemed a waiver of
any right, the waiver of such right with respect to any particular facts or
circumstances shall not be deemed a waiver with respect to any other facts or
circumstances, and each right will be deemed an ongoing right which may be
asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions,
all tendered shares of Common Stock shall promptly be returned by the depositary
to the tendering stockholders.
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<PAGE> 1
EXHIBIT 99.2
TENDER AND OPTION AGREEMENT
between
M ACQUISITION CORP.,
M MERGER SUB, INC.
and
THE STOCKHOLDERS LISTED ON SCHEDULE A
Dated as of May 27, 1999
<PAGE> 2
TENDER AND OPTION AGREEMENT
TENDER AND OPTION AGREEMENT, dated as of May 27, 1999 (this
"Agreement"), between M Acquisition Corp., a Delaware corporation ("Purchaser"),
M Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of
Purchaser ("Merger Sub"), and each of the persons listed on Schedule A hereto
(each a "Stockholder" and, collectively, the "Stockholders").
RECITALS
WHEREAS, Invensys, plc ("Parent") Purchaser, Merger Sub and
Marcam Solutions, Inc., a Delaware corporation (the "Company"), propose to enter
into an Agreement and Plan of Merger dated as of the date hereof (as the same
may be amended or supplemented, the "Merger Agreement") providing for, among
other things, the making of the Offer by Purchaser for all of the issued and
outstanding shares of common stock, par value $0.01 per share, of the Company
(referred to herein as "Common Stock"), and the merger of the Company and Merger
Sub on the terms and conditions set forth in the Merger Agreement (the
"Merger");
WHEREAS, each Stockholder is the beneficial owner of the
shares of Common Stock, Options, Warrants and Rights set forth opposite such
Stockholder's name on Schedule A hereto (collectively referred to herein as the
"Securities" of such Stockholder; such Securities, as such Securities may be
adjusted by stock dividend, stock split, recapitalization, combination or
exchange of shares, merger, consolidation, reorganization or other change or
transaction of or by the Company, together with shares of Common Stock issuable
upon the exercise of Options, Warrants and Preferred Shares issuable upon the
exercise of Rights being referred to herein as the "Shares" of such
Stockholder); and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Parent, Purchaser and Merger Sub have requested that the
Stockholders enter into this Agreement;
NOW, THEREFORE, to induce Purchaser and Merger Sub to enter
into, and in consideration of their entering into, the Merger Agreement, and in
consideration of the premises and the representations, warranties and agreements
contained herein, the parties agree as follows:
Section 1. Certain Definitions. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to such terms in the Merger
Agreement.
Section 2. Representations and Warranties of the Stockholders. Each
Stockholder, severally and not jointly, represents and warrants to Purchaser and
Merger
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<PAGE> 3
Sub, as of the date hereof and as of the Closing (as defined below), as
follows:
(a) The Stockholder is the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of, and has good title to, all of the Shares,
free and clear of any pledge, hypothecation, claim, security interest, charge,
encumbrance, voting trust agreement, interest, option, lien, charge or similar
restriction or limitation, including any restriction on the right to vote, sell
or otherwise dispose of the Shares, other than those arising under the federal
and state securities laws (each, a "Lien"), except as set forth in this
Agreement.
(b) The Shares constitute all of the securities (as defined in
Section 3(a)(10) of the Exchange Act) of the Company beneficially owned,
directly or indirectly, by the Stockholder.
(c) Except for the Shares, the Stockholder does not, directly
or indirectly, beneficially own or have any option, warrant or other right to
acquire any securities of the Company that are or may by their terms become
entitled to vote or any securities that are convertible or exchangeable into or
exercisable for any securities of the Company that are or may by their terms
become entitled to vote, nor is the Stockholder subject to any contract,
commitment, arrangement, understanding, restriction or relationship (whether or
not legally enforceable), other than this Agreement, that provides for such
Stockholder to vote or acquire any securities of the Company. The Stockholder
holds exclusive power to vote the Common Stock and has not granted a proxy to
any other Person to vote the Common Stock (including those issuable upon
exercise of the Options, Warrants or Rights), subject to the limitations set
forth in this Agreement.
(d) This Agreement has been duly executed and delivered by the
Stockholder.
(e) Neither the execution and delivery of this Agreement nor
the performance by the Stockholder of the Stockholder's obligations hereunder
will conflict with, result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would result in a
default) or give rise to any right of termination, amendment, cancellation, or
acceleration or result in the creation of any Lien on any Shares under, (i) any
contract, commitment, agreement, understanding, arrangement or restriction of
any kind to which the Stockholder is a party or by which the Stockholder is
bound or (ii) any injunction, judgment, writ, decree, order or ruling applicable
to the Stockholder; except for conflicts, violations, breaches, defaults,
terminations, amendments, cancellations, accelerations or Liens that would not
individually or in the aggregate be expected to prevent or materially impair or
delay the consummation by such Stockholder of the transactions contemplated
hereby.
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<PAGE> 4
(f) Neither the execution and delivery of this Agreement nor
the performance by the Stockholder of the Stockholder's obligations hereunder
will violate any Law applicable to the Stockholder or require any order,
consent, authorization or approval of, filing or registration with, or
declaration or notice to, any court, administrative agency or other governmental
body or authority, other than any required notices or filings pursuant to the
HSR Act, foreign antitrust or competition laws or the federal securities laws.
(g) No investment banker, broker, finder or other intermediary
is, or will be, entitled to a fee or commission from Merger Sub, Purchaser or
the Company in respect of this Agreement based on any arrangement or agreement
made by or on behalf of such Stockholder in his or her capacity as a stockholder
of the Company.
(h) The Stockholder understands and acknowledges that
Purchaser is entering into, and causing Merger Sub to enter into, the Merger
Agreement in reliance upon the Stockholder's execution and delivery of this
Agreement.
Section 3. Representations and Warranties of Purchaser and Merger Sub.
Purchaser and Merger Sub represent and warrant to the Stockholders, as of the
date hereof and as of the Closing, as follows:
(a) Each of Purchaser and Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation, has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement.
(b) This Agreement has been duly executed and delivered by
Purchaser and Merger Sub and, assuming the due authorization, execution and
delivery of this Agreement by the Company and the Stockholders, is a valid and
binding obligation of each of Purchaser and Merger Sub, enforceable against each
of them in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally; and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(c) Neither the execution and delivery of this Agreement nor
the performance by Purchaser and Merger Sub of their respective obligations
hereunder will conflict with, result in a violation or breach of, or constitute
a default (or an event that, with notice or lapse of time or both, would result
in a default) or give rise to any right of termination, amendment, cancellation,
or acceleration under, (i) their respective
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<PAGE> 5
certificates of incorporation or bylaws, (ii) any contract, commitment,
agreement, understanding, arrangement or restriction of any kind to which
Purchaser or Merger Sub is a party or by which Purchaser or Merger Sub is bound
or (iii) any judgment, writ, decree, order or ruling applicable to Purchaser or
Merger Sub; except in the case of clauses (ii) and (iii) for conflicts,
violations, breaches or defaults that would not individually or in the aggregate
be reasonably expected to prevent or materially impair or delay the consummation
by Purchaser or Merger Sub of the transactions contemplated hereby.
(d) Neither the execution and delivery of this Agreement nor
the performance by Purchaser and Merger Sub of their respective obligations
hereunder will violate any Law applicable to Purchaser or Merger Sub or require
any order, consent, authorization or approval of, filing or registration with,
or declaration or notice to, any court, administrative agency or other
governmental body or authority, other than any required notices or filings
pursuant to the HSR Act or the federal securities laws.
(e) Any Shares acquired upon exercise of the Purchase Option
(as defined below) will be acquired for Purchaser's or Merger Sub's own account,
for investment purposes only and will not be, and the Purchase Option is not
being, acquired by Purchaser and Merger Sub with a view to public distribution
thereof in violation of any applicable provisions of the Securities Act.
Section 4. Transfer of the Shares. During the term of this Agreement,
except as otherwise expressly provided herein, each Stockholder agrees that such
Stockholder will not (a) tender into any tender or exchange offer or otherwise
sell, transfer, pledge, assign, hypothecate or otherwise dispose of, or encumber
with any Lien, any of the Shares, except for (i) transfers to any spouse or
descendant (including by adoption) of such Stockholder, or any trust or
retirement plan or account for the benefit of such Stockholder, spouse or
descendant; provided any such transferee agrees in writing to be bound by the
terms of this Agreement and (ii) transfers by operation of Law; provided that
any such transferee shall be bound by the terms of this Agreement, (b) acquire
any shares of Common Stock or other securities of the Company (otherwise than in
connection with a transaction of the type described in Section 5 or by
exercising any of the Options, Warrants or Rights), (c) deposit the Shares into
a voting trust, enter into a voting agreement or arrangement with respect to the
Shares or grant any proxy or power of attorney with respect to the Shares, (d)
enter into any contract, option or other arrangement (including any profit
sharing arrangement) or undertaking with respect to the direct or indirect
acquisition or sale, transfer, pledge, assignment, hypothecation or other
disposition of any interest in or the voting of any Shares or any other
securities of the Company, (e) exercise any rights (including, without
limitation, under Section 262 of the Delaware General Corporation Law) to demand
appraisal of any Shares which may arise
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<PAGE> 6
with respect to the Merger, or (f) take any other action that would in any way
restrict, limit or interfere with the performance of such Stockholder's
obligations hereunder or the transactions contemplated hereby or which would
otherwise diminish the benefits of this Agreement to Purchaser or Merger Sub.
Section 5. Adjustments. (a) In the event (i) of any stock dividend,
stock split, recapitalization, reclassification, combination or exchange of
shares of capital stock or other securities of the Company on, of or affecting
the Shares or the like or any other action that would have the effect of
changing a Stockholder's ownership of the Company's capital stock or other
securities or (ii) a Stockholder becomes the beneficial owner of any additional
Shares of or other securities of the Company, then the terms of this Agreement
will apply to the shares of capital stock held by such Stockholder immediately
following the effectiveness of the events described in clause (i) or such
Stockholder becoming the beneficial owner thereof, as described in clause (ii),
as though they were Shares hereunder.
(b) Each Stockholder hereby agrees, while this Agreement is in
effect, to promptly notify Purchaser and Merger Sub of the number of any new
Shares acquired by such Stockholder, if any, after the date hereof.
Section 6. Tender of Shares. Each Stockholder hereby agrees that such
Stockholder will validly tender (or cause the record owner of such shares to
validly tender) and sell (and not withdraw, except in the event the Purchase
Option is exercised, in which case such withdrawal shall be for the limited
purpose of consummating the Purchase Option) pursuant to and in accordance with
the terms of the Offer not later than the fifth business day after commencement
of the Offer (or the earlier of the expiration date of the Offer and the fifth
business day after such Shares are acquired by such Stockholder if the
Stockholder acquires Shares after the date hereof), or, if the Stockholder has
not received the Offer Documents by such time, within two business days
following receipt of such documents, all of the then outstanding shares of
Common Stock beneficially owned by such Stockholder (including the shares of
Common Stock outstanding as of the date hereof and shares issued following the
exercise (if any) of the Options, Warrants and Rights, in each case as set forth
on Schedule A hereto opposite such Stockholder's name). Upon the purchase by
Purchaser or Merger Sub of all of such then outstanding shares of Common Stock
beneficially owned by such Stockholder pursuant to the Offer in accordance with
this Section 6, this Agreement will terminate as it relates to such Stockholder.
In the event, notwithstanding the provisions of the first sentence of this
Section 6, any shares of Common Stock beneficially owned by a Stockholder are
for any reason withdrawn from the Offer or are not purchased pursuant to the
Offer, such Shares will remain subject to the terms of this Agreement. Each
Stockholder acknowledges that Purchaser's obligation to accept for payment and
pay for
-5-
<PAGE> 7
the shares of Common Stock tendered in the Offer is subject to all the terms and
conditions of the Offer.
Section 7. Voting Agreement. Each Stockholder, by this Agreement, does
hereby (a) agree to appear (or not appear, if requested by Purchaser or Merger
Sub) at any annual, special, postponed or adjourned meeting of the stockholders
of the Company or otherwise cause the shares of Common Stock such Stockholder
beneficially owns to be counted as present (or absent, if requested by Purchaser
or Merger Sub) thereat for purposes of establishing a quorum and to vote or
consent, and (b) constitute and appoint Purchaser and Merger Sub, or any nominee
thereof, with full power of substitution, during and for the term of this
Agreement, as his true and lawful attorney and proxy for and in his name, place
and stead, to vote all the shares of Common Stock such Stockholder beneficially
owns at the time of such vote, at any annual, special, postponed or adjourned
meeting of the stockholders of the Company (and this appointment will include
the right to sign his or its name (as stockholder) to any consent, certificate
or other document relating to the Company that laws of the State of Delaware and
the Commonwealth of Massachusetts may require or permit), in the case of both
(a) and (b) above, (x) in favor of approval and adoption of the Merger Agreement
and approval and adoption of the Merger and the other transactions contemplated
thereby and (y) against (1) any Alternative Proposal, (2) any action or
agreement that would result in a breach in any respect of any covenant,
agreement, representation or warranty of the Company under the Merger Agreement
and (3) the following actions (other than the Merger and the other transactions
contemplated by the Merger Agreement and the Ancillary Documents): (i) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or any of its subsidiaries; (ii) a
sale, lease or transfer of a material amount of assets of the Company or any of
its subsidiaries, or a reorganization, recapitalization, dissolution or
liquidation of the Company or any of its Subsidiaries; (iii) (A) any change in a
majority of the persons who constitute the board of directors of the Company or
any of its Subsidiaries as of the date hereof; (B) any change in the present
capitalization of the Company or any amendment of the Company's or any of its
Subsidiaries' certificate of incorporation or bylaws, as amended to date; (C)
any other material change in the Company's or any of its Subsidiaries' corporate
structure or business; or (D) any other action that is intended, or could be
expected, to impede, interfere with, delay, postpone, or adversely affect the
Offer, the Merger and the other transactions contemplated by this Agreement, the
Merger Agreement and the Ancillary Documents. This proxy and power of attorney
is a proxy and power coupled with an interest, and each Stockholder declares
that it is irrevocable until this Agreement shall terminate in accordance with
its terms. Each Stockholder hereby revokes all and any other proxies with
respect to the shares of Common Stock that such Stockholder may have heretofore
made or granted. For shares of Common Stock as to which a Stockholder is the
beneficial but not the record owner, such Stockholder shall use his or its best
efforts
-6-
<PAGE> 8
to cause any record owner of such Shares to grant to Purchaser a proxy to the
same effect as that contained herein. Each Stockholder hereby agrees to permit
Purchaser and Merger Sub to publish and disclose in the Offer Documents and the
Proxy Statement and related filings under the securities laws such Stockholder's
identity and ownership of Shares and the nature of his or its commitments,
arrangements and understandings under this Agreement.
Section 8. No Solicitation. Each Stockholder agrees that neither such
Stockholder nor any of such Stockholder's officers, directors, employees,
trustees, representatives, agents or affiliates (including, without limitation,
any investment banker, attorney or accountant retained by any of them) will
directly or indirectly initiate, solicit or encourage (including by way of
furnishing non-public information or assistance), or take any other action to
facilitate, any inquiries or the making or submission of any Alternative
Proposal, or enter into or maintain or continue discussions or negotiate with
any person or entity in furtherance of such inquiries or to obtain or induce any
person to make or submit an Alternative Proposal or agree to or endorse any
Alternative Proposal or assist or participate in, facilitate or encourage, any
effort or attempt by any other person or entity to do or seek any of the
foregoing or authorize or permit any of its officers, directors, employees,
trustees or any of its affiliates or any investment banker, financial advisor,
attorney, accountant or other representative or agent retained by any of them to
take any such action. Each Stockholder shall promptly advise Purchaser in
writing of the receipt of request for information or any inquiries or proposals
relating to an Alternative Proposal.
Section 9. Grant of Purchase Option. The Stockholder hereby grants to
Purchaser and Merger Sub an irrevocable option (the "Purchase Option") to
purchase for cash, in a manner set forth below, any or all of the Shares (and
including Shares acquired after the date hereof by such Stockholder)
beneficially owned by the Stockholder at a price per share (the "Exercise
Price") equal to the Merger Consideration. In the event of any stock dividends,
stock splits, recapitalizations, combinations, exchanges of shares or the like,
the Merger Consideration will be appropriately adjusted for the purpose of this
Section 9. The Merger Consideration as it relates to the Options, Warrants and
Rights shall be an amount in cash equal to the excess, if any, of the Merger
Consideration over the per share exercise price of such Option, Warrant or
Right, without interest, in full settlement of the Company's (and the Surviving
Corporation's) obligations under each such Option, Warrant or Right. To the
extent that the per share exercise price of any Option, Warrant or Right exceeds
the Merger Consideration, such Option, Warrant or Right shall be canceled and
the Stockholder shall not receive or be entitled to receive any consideration
from Purchaser, Merger Sub or the Company relating thereto. The amount payable
pursuant to this Section 9 shall be subject to all applicable withholding taxes.
-7-
<PAGE> 9
Section 10. Exercise of Purchase Option.
(a) Subject to the conditions set forth in Section 12 hereof,
the Purchase Option may be exercised by Purchaser or Merger Sub, in whole or in
part, at any time or from time to time after the occurrence of any Trigger Event
(as defined below). Each Stockholder shall notify Purchaser in writing of the
occurrence of any Trigger Event promptly after the learning of the occurrence
thereof, it being understood that the giving of such notice by the Stockholder
is not a condition to the right of Purchaser or Merger Sub to exercise the
Purchase Option. In the event Purchaser or Merger Sub wishes to exercise the
Purchase Option, Purchaser shall deliver to each Stockholder a written notice
(an "Exercise Notice") specifying the total number of Shares it wishes to
purchase from such Stockholder. Each closing of a purchase of Shares (a
"Closing") will occur at a place, on a date and at a time designated by
Purchaser or Merger Sub in an Exercise Notice delivered at least two business
days prior to the date of the Closing.
(b) A "Trigger Event" means any one of the following: (i) the
Merger Agreement becomes terminable under circumstances that entitle Purchaser
or Merger Sub to receive the Termination Fee under Section 8.2 of the Merger
Agreement (regardless of whether the Merger Agreement is actually terminated and
whether such Termination Fee is then actually paid), (ii) the Offer is
consummated but, due to the failure of the Stockholder to validly tender and not
withdraw all of the then outstanding shares of Common Stock beneficially owned
by such Stockholder, the Purchaser has not accepted for payment or paid for all
of such Stockholder's shares of Common Stock, (iii) a tender or exchange offer
for at least 20% of the shares of Common Stock shall have been publicly proposed
to be made or shall have been made by another Person or group (as defined in
Section 13(d)(3) of the Exchange Act) (other than Parent, Purchaser or Merger
Sub), or (iv) it shall have been publicly disclosed that (A) any Person or
"group" (as defined in Section 13(d)(3) of the Exchange Act) (other than
Purchaser or Merger Sub) shall have acquired or proposed to acquire beneficial
ownership of more than 20% of any class or series of capital stock of the
Company (including the Common Stock), through the acquisition of stock, the
formation of a group or otherwise, or shall have been granted any option, right
or warrant, conditional or otherwise, to acquire beneficial ownership of more
than 20% of any class or series of capital stock of the Company or any of its
subsidiaries, or (B) any Person or group (other than Parent, Purchaser and
Merger Sub) shall have entered into or publicly offered to enter into a
definitive agreement or an agreement in principle with respect to a merger,
consolidation or other business combination with the Company or any of its
subsidiaries.
(c) If requested by Purchaser and Merger Sub in the Exercise
Notice, such Stockholder shall exercise all Options, Warrants and Rights (to the
extent exercisable) and other rights (including conversion or exchange rights),
other than Options, Warrants
-8-
<PAGE> 10
and Rights with exercise prices above the Exercise Price, beneficially owned by
such Stockholder and shall sell or, if directed by Purchaser and Merger Sub,
tender the Shares acquired pursuant to such exercise to Purchaser or Merger Sub
as provided in this Agreement; provided, however, that Purchaser and Merger Sub
shall not be entitled to require General Atlantic Partners 32, L.P., General
Atlantic Partners 21, L.P., and GAP Coinvestment Partners, L.P. and their
affiliates to exercise any Options, Warrants or Rights that can be transferred
to and exercised by Purchaser or Merger Sub.
(d) In the event that, within 12 months of the exercise of the
Purchase Options, Purchaser or Merger Sub sells, to a third party which is not
an affiliate of Purchaser, Shares acquired by means of exercise of the Purchase
Options ("Exercise Shares") for an aggregate consideration (the "Aggregate
Consideration") greater than the aggregate Exercise Price (the "Aggregate
Exercise Price") paid for such Exercise Shares, Purchaser agrees to pay to the
Stockholders an amount equal to the excess of the Aggregate Consideration over
the Aggregate Exercise Price. The excess of the Aggregate Consideration over the
Aggregate Exercise Price shall be distributed to the Stockholders who sold
shares to Purchasers or Merger Sub pursuant to the exercise of the Purchase
Options in a manner so that each such Stockholder shall have received the same
consideration after including such payments for each Share so sold. In addition,
in the event that, within 12 months of the exercise of the Purchase Options,
Parent, Purchaser or Merger Sub or any of their affiliates shall consummate a
merger or other business combination with the Company, or shall purchase Shares
pursuant to a tender offer for all shares of Common Stock at a price per share
(taking into account any stock dividends, stock splits, reverse stock splits,
recapitalizations, combinations, exchanges of shares or the like) in excess of
the Exercise Price paid for any Shares, Purchaser agrees to pay each Stockholder
such excess for each Exercise Share purchased from such Stockholder.
Section 11. Termination. This Agreement will terminate (a) pursuant to
Section 6 or (b) upon the earliest of: (i) the Effective Time; (ii) termination
of the Merger Agreement other than upon, during the continuance of, or after, a
Trigger Event; or (iii) 90 days following any termination of the Merger
Agreement upon, during the continuance of or after a Trigger Event (or if, at
the expiration of such 90 day period the Purchase Option cannot be exercised by
reason of any applicable judgment, decree, order, injunction, law or regulation,
10 business days after such impediment to exercise has been removed or has
become final and not subject to appeal). Upon the giving by Purchaser or Merger
Sub to the Stockholder of the Exercise Notice and the tender of the aggregate
Exercise Price, Purchaser or Merger Sub, as the case may be, will be deemed to
be the holder of record of the Shares transferable upon such exercise,
notwithstanding that the stock transfer books of the Company are then closed or
that certificates representing such Shares have not been actually delivered to
Purchaser.
-9-
<PAGE> 11
Section 12. Conditions To Closing. The obligation of each Stockholder
to sell such Stockholder's Shares to Purchaser or Merger Sub hereunder is
subject to the conditions that (i) all waiting periods, if any, under the HSR
Act, applicable to the sale of the Shares or the acquisition of the Shares by
Purchaser or Merger Sub, as the case may be, hereunder have expired or have been
terminated; (ii) all consents, approvals, orders or authorizations of, or
registrations, declarations or filings with, any court, administrative agency or
other Governmental Entity, if any, required in connection with the sale of the
Shares or the acquisition of the Shares by Purchaser or Merger Sub hereunder
have been obtained or made; and (iii) no preliminary or permanent injunction or
other order by any court of competent jurisdiction prohibiting or otherwise
restraining such sale or acquisition is in effect.
Section 13. Closing. At any Closing with respect to Shares beneficially
owned by a Stockholder, (a) such Stockholder will deliver to Purchaser, Merger
Sub or their respective designee a certificate or certificates in definitive
form representing the number of the Shares designated by Purchaser or Merger
Sub, as the case may be, in its Exercise Notice, such certificate to be
registered in the name of Purchaser, Merger Sub or their respective designee and
(b) Purchaser or Merger Sub, as the case may be, will deliver to the Stockholder
the aggregate Exercise Price for the Shares so designated and being purchased by
wire transfer of immediately available funds.
Section 14. Fees and Expenses. Except as otherwise expressly provided
herein or in the Merger Agreement, whether of not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses.
Section 15. Further Assurances. Each party hereto will execute and
deliver all such further documents and instruments and take all such further
action as may be reasonably necessary in order to consummate the transactions
contemplated hereby.
Section 16. Publicity. A Stockholder shall not issue any press release
or otherwise make any public statements with respect to this Agreement or the
Merger Agreement or the other transactions contemplated hereby or thereby
without the consent of Purchaser and Merger Sub, except as may be required by
Law or applicable stock exchange rules.
Section 17. Stockholder Capacity. No person executing this Agreement
makes any agreement or understanding herein in such Stockholder's capacity as a
director or officer of the Company or any Subsidiary of the Company. Each
Stockholder signs solely in such Stockholder's capacity as the beneficial owner
of such
-10-
<PAGE> 12
Stockholder's Shares and nothing herein shall limit or affect any actions taken
by a Stockholder in such Stockholder's capacity as an officer or director of the
Company or any subsidiary of the Company to the extent specifically permitted by
the Merger Agreement.
Section 18. Enforcement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms or was otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any Delaware Court, this being
in addition to any other remedy to which they are entitled at law or in equity.
Section 19. Miscellaneous.
(a) All representations and warranties contained herein will
survive for twelve months after the termination hereof. The covenants and
agreements made herein will survive in accordance with their respective terms.
(b) Any provision of this Agreement may be waived at any time
by the party that is entitled to the benefits thereof. No such waiver, amendment
or supplement will be effective unless in writing and signed by the party or
parties sought to be bound thereby. Any waiver by any party of a breach of any
provision of this Agreement will not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement or one or more sections hereof will not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(c) This Agreement constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements among the parties with respect to such matters. This Agreement
may not be amended, changed, supplemented, waived or otherwise modified, except
upon the delivery of a written agreement executed by the parties hereto.
(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to its rules of
conflict of laws. Each of the Company, Purchaser and Merger Sub hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the Delaware Courts for any litigation arising out of or relating to this
Agreement and the transactions contemplated hereby (and agrees not to commence
any litigation relating thereto except in such courts), waives any objection to
the laying of venue of any such litigation in the Delaware Courts and agrees not
to plead or claim in any Delaware Court that such litigation brought therein has
been brought in an inconvenient forum.
-11-
<PAGE> 13
(e) The descriptive headings contained herein are for
convenience and reference only and will not affect in any way the meaning or
interpretation of this Agreement. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, and words denoting any gender shall include all genders
and words denoting natural persons shall include corporations and partnerships
and vice versa. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be understood to be followed by the words "without
limitation."
(f) All notices and other communications hereunder will be in
writing and will be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by telecopy, or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Company to:
Marcam Solutions, Inc.
95 Wells Avenue
Newton, Massachusetts 02159
Attention: President
Facsimile: (617) 964-5614
With a Copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, Massachusetts 02110
Attention: Mark H. Burnett, Esq. and
Edwin L. Miller, Esq.
Facsimile: (617) 248-7100
-12-
<PAGE> 14
If to Purchaser or Merger Sub to:
Foxboro Company
33 Commercial Street
B52-SI
Foxboro, Massachusetts 02035-2099
Attention: Dr. George Sarney
Facsimile: (508) 549-6689
with copies to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Paul Reinstein
Facsimile: (212) 859-8586
and
Wonderware Corporation
100 Technology Drive
Irvine, California 92618
Attention: Philip Maynard
Facsimile: (949) 453-6543
If to a Stockholder, at the address set forth on Schedule A hereto or
to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
(g) This Agreement may be executed by the parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be
an original. All such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
(h) This Agreement is binding upon and is solely for the
benefit of the parties hereto and their respective successors, legal
representatives and assigns. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement will be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that Purchaser and Merger Sub will have the right to assign to any direct or
indirect wholly owned subsidiary or subsidiaries of Parent or Purchaser any and
all rights and obligations of Purchaser or Merger Sub under this Agreement,
provided that
-13-
<PAGE> 15
any such assignment will not relieve either Purchaser or Merger Sub from any of
its obligations hereunder.
(i) Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
(j) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity will be
cumulative and not alternative, and the exercise of any thereof by either party
will not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
-14-
<PAGE> 16
IN WITNESS WHEREOF, each of the Purchaser and Merger Sub has
caused this Agreement to be signed by its officer or director thereunto duly
authorized and each Stockholder has signed this Agreement, all as of the date
first written above.
M ACQUISITION CORP.
By: /s/ George Surney
---------------------------------------------
Name: George Surney
Title: President
M MERGER SUB, INC.
By: /s/ Thomas G. Foley
---------------------------------------------
Name: Thomas G. Foley
Title: Vice President
STOCKHOLDERS:
/s/ Jonathan C. Crane
---------------------------------------------
Name: Jonathan C. Crane
/s/ Michael Quinlan
---------------------------------------------
Name: Michael Quinlan
/s/ John Campbell
---------------------------------------------
Name: John Campbell
/s/ Z. Alan Fink
---------------------------------------------
Name: Z. Alan Fink
/s/ E. Clark Grimes
---------------------------------------------
Name: E. Clark Grimes
/s/ Joe M. Henson
---------------------------------------------
Name: Joe M. Henson
/s/ Franchon M. Smithson
---------------------------------------------
Name: Franchon M. Smithson
/s/ William W. Wyman
---------------------------------------------
Name: William W. Wyman
/s/ Denis E. Liptak
---------------------------------------------
Name: Denis E. Liptak
/s/ Harlan Plumley
---------------------------------------------
Name: Harlan Plumley
/s/ Stephen R. Quehl
---------------------------------------------
Name: Stephen R. Quehl
/s/ Diane R. Tormey
---------------------------------------------
Name: Diane R. Tormey
GENERAL ATLANTIC PARTNERS 32, L.P.
By: General Atlantic Partners, LLC, its general partner
By: /s/ Thomas J. Murphy
---------------------------------------------
Name: Thomas J. Murphy
Title: Attorney-in-Fact
GENERAL ATLANTIC PARTNERS 21, L.P.
By: General Atlantic Partners, LLC, its general partner
By: /s/ Thomas J. Murphy
---------------------------------------------
Name: Thomas J. Murphy
Title: Attorney-in-Fact
GAP COINVESTMENT PARTNERS, L.P.
By: /s/ Thomas J. Murphy
---------------------------------------------
Name: Thomas J. Murphy
Title: Attorney-in-Fact
-1-
<PAGE> 17
SCHEDULE A
<TABLE>
<CAPTION>
Number Number Number of Number
Stockholder Address of Shares of Options Warrants of Rights
----------- ------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
John Campbell 99,403 13,000 -- 99,403
Jonathan C. Crane 20,000 296,270 -- 20,000
E. Clark Grimes 1,000 11,500 -- 1,000
Joe M. Henson 500 13,000 -- 500
Michael J. Quinlan 350 86,500 -- 350
Franchon M. Smithson** -- 13,000 -- --
William W. Wyman -- 11,500 -- --
Z. Alan Fink 210* 25,000 -- 210*
Denis E. Liptak 500 35,000 -- 500
Harlan B. Plumley 1,250* 22,000 -- 1,250*
Stephen Quehl -- 150,000 -- --
Diane R. Tormey 5,428 42,696 -- 5,428
</TABLE>
- --------------
*Currently participating in Employee Stock Purchase Plan
**Excluding shares held by General Atlantic Partners 32, L.P., General Atlantic
Partners 21, L.P. and GAP Coinvestment Partners, L.P.
-2-
<PAGE> 18
<TABLE>
<S> <C> <C> <C> <C> <C>
General Atlantic Partners 32, c/o General Atlantic 431,595 -- 431,595 431,595
L.P. Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830
General Atlantic Partners 21, c/o General Atlantic 880,290 -- -- 880,290
L.P. Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830
GAP Coinvestment Partners, L.P. c/o General Atlantic 188,115 -- 68,405 188,115
Service Corporation
3 Pickwick Plaza
Greenwich, CT 06830
</TABLE>
-3-
<PAGE> 1
BROADVIEW
EXHIBIT 99.3
May 17, 1999
CONFIDENTIAL
------------
Mr. Roy H. Slavin
President & Chief Executive Officer
Wonderware Corp., an Invensys Company
100 Technology Drive
Irvine, CA 92618
Dear Mr. Slavin:
In connection with your consideration of a possible transaction with Marcam
Solutions, Inc. (the "Company"), you have requested financial and other
information concerning the business and affairs of the Company. As a condition
to the Company's furnishing to you and your representatives financial and other
information which has not theretofore been made available to the public, you
agree to treat all such non-public information furnished to you in writing or
orally by the Company or its representatives on and after the date of this
agreement (herein collectively referred to as the "evaluation material"), as
follows:
(1) You recognize and acknowledge the competitive value and
confidential nature of the evaluation material and the damage
that could result to the Company if information contained
therein is disclosed to any third party. You also recognize and
acknowledge that the evaluation material is being provided to
you in reliance upon your acceptance of the terms of this
agreement.
(2) You agree that the evaluation material will be used solely for
the purpose of evaluating the proposed transaction. You also
agree that you, your directors, officers, employees and agents
and representatives of your advisors, herein collectively
referred to as "your representatives," will not disclose or
permit the disclosure of any of the evaluation material now or
hereafter received or obtained from the Company or its
representatives to any third party or otherwise use or permit
the use of the evaluation material in any way detrimental to the
Company, except as required by applicable law or legal process,
without the prior written consent of the Company, provided,
however, that any such information may be disclosed to such of
your representatives who need to know such information for
the purpose of
<PAGE> 2
Mr. Roy H. Slavin May 17, 1999
Page 2
evaluating the proposed transaction and who are advised of this
agreement and agree to keep such information confidential and to
be bound by this agreement to the same extent as if they were
parties hereto, it being understood that you shall be
responsible for any breach of this agreement by your
representatives.
(3) In the event that the transaction contemplated by this
agreement is not consummated, neither you nor any of your
representatives shall, without prior written consent of the
Company, use any of the evaluation material now or hereafter
received or obtained from the Company or its representatives for
any purpose.
(4) In the event that the transaction contemplated by this
agreement is not consummated, all evaluation material (and all
copies, summaries, and notes of the contents or parts thereof)
shall be returned upon the Company's request or destroyed and
not retained by you or your representatives in any form or for
any reason.
(5) You and your representatives shall have no obligation hereunder
with respect to any information in the evaluation materials to
the extent that such information has been made publicly
available nor any obligation with respect to information which
can be demonstrated by you to be already properly in your
possession on a non-confidential basis from sources other than
the Company, or its representatives other than by acts by you or
your representatives in violation of this agreement.
(6) You are aware, and will advise your representatives who are
informed of the matters that are the subject of this Agreement,
of the restrictions imposed by the United States securities laws
on the purchase or sale of securities by any person who has
received material, non-public information from the Company and
on the communication of such information to any other person who
may purchase or sell such securities in reliance upon such
information. You and your representatives will comply with all
applicable securities laws in connection with the purchase or
sale, directly or indirectly, of securities of the Company for
as long as you or your representatives are in possession of
material non-public information about the Company.
<PAGE> 3
Mr. Roy H. Slavin May 17, 1999
Page 3
(7) The provisions of this agreement relating to confidentiality
shall terminate three years from the date hereof. The invalidity
or unenforceability of any provision of this agreement shall not
affect the validity or enforceability of any other provision.
It is further agreed that the intention of Marcam Solutions, Inc. to engage in
these discussions, and the subsequent exercise of that intention shall be kept
confidential by you.
Acceptance of the above terms shall be indicated by having this letter
countersigned on your behalf and returning one original to Broadview.
Sincerely,
BROADVIEW INTERNATIONAL LLC
For: Marcam Solutions, Inc.
By: /s/ Scot Sedlacek
-------------------------------
Received and consented to this
17th day of May, 1999
Invensys plc
By: /s/ Roy H. Slavin
------------------------------------
<PAGE> 1
EXHIBIT 99.4
June 3, 1999
To Our Stockholders:
I am pleased to inform you that Marcam Solutions, Inc. ("Marcam"),
Invensys, plc, M Acquisition Corp., an indirect wholly owned subsidiary of
Invensys, and M Merger Sub, Inc., a direct wholly owned subsidiary of Purchaser
and an indirect wholly owned subsidiary of Invensys ("Offeror"), have entered
into an Agreement and Plan of Merger dated as of May 27, 1999 (the "Merger
Agreement") pursuant to which Offeror has commenced a cash tender offer (the
"Offer") to purchase all of the outstanding shares of Marcam common stock and
associated preferred stock purchase rights (the "Shares") for $7.50 per share.
Under the Merger Agreement, the Offer will be followed by a merger of Offeror
into Marcam (the "Merger") in which any remaining Shares (other than Shares as
to which appraisal rights have been properly exercised and perfected, Shares
held in treasury by the Company or Shares owned by Invensys or its affiliates)
will be converted into the right to receive $7.50 per Share in cash, without
interest.
Your Board of Directors has unanimously determined that the Offer and the
Merger are fair to and in the best interests of Marcam's stockholders and
recommends that stockholders accept the Offer and tender their Shares pursuant
to the Offer. You are encouraged to consult with your financial or tax adviser
regarding the impact thereof on you prior to tendering your Shares in the Offer
or voting to approve the Merger.
In arriving at its recommendations, the Board of Directors gave careful
consideration to a number of factors described in the attached Schedule 14D-9
that has been filed with the Securities and Exchange Commission, including,
among other things, the opinion of Broadview International LLC, the financial
advisor retained by the Board of Directors, to the effect that, as of May 25,
1995, the $7.50 in cash to be received by the holders of Shares in the Offer and
Merger is fair to such holders from a financial point of view.
In addition to the attached Schedule 14D-9 relating to the Offer, also
enclosed is the Offer to Purchase, dated June 3, 1999, of Offeror, together with
related materials, including a Letter of Transmittal to be used for tendering
your Shares. These documents set forth the terms and conditions of the Offer and
the Merger and provide instructions as to how to tender your Shares. We urge you
to read the enclosed material carefully.
Sincerely,
/s/ JONATHAN C. CRANE
--------------------------------------
Jonathan C. Crane
Chairman of the Board, President
and Chief Executive Officer
<PAGE> 1
EXHIBIT 99.5
[MARCAM SOLUTIONS NEWS LETTERHEAD]
INVENSYS PLC TO ACQUIRE MARCAM SOLUTIONS, INC.
NEWTON, MASSACHUSETTS -- MAY 27, 1999 -- Invensys plc and Marcam Solutions, Inc.
(NASDAQ Trading Symbol: MRCM) announced today that Invensys has entered into a
definitive agreement to acquire Marcam for $7.50 per share in cash, or
approximately $60 million.
Marcam is a Massachusetts-based software company, which specialities in
enterprise resource planning and enterprise asset management applications for
industrial customers. The company's products provide customers with the
necessary enterprise-wide financial, planning, and production information to
improve the productivity of their business and manufacturing operations. The
company employs 715 employees and has more than 1,400 customers in 40+ countries
worldwide. For the twelve months ended September 30, 1998. Marcam had sales of
$124.52 million, which yielded an operating loss of $6.2 million.
"We believe that Marcam with their Windows NT and Object-based ERP and Asset
Management Software products, is a clear technology leader in Enterprise
Management Systems," said Allen Yurko, Chief Executive of Invensys. "Combining
Marcam software with our highly successful Wonderware FactorySuite will enable
us to offer a complete software solution to the process automation market. This
proposed acquisition provides further evidence of our strategy to enhance our
leadership position in the Automation and Controls industry."
"The acquisition of Marcam is a major step toward realizing our vision of a
real time, bottoms up, plant-focused ERP system," says Roy Slavin, President and
Chief Executive Officer of Wonderware (a member of the Invensys Intelligent
Automation Division. "The combination of Marcam, our FactorySuite and the
commercial simulation software from our sister company, Simulation Science
will enable us to extend our already broad software product offerings into the
higher end world of enterprise software."
"This acquisition shows the depth of commitment to our 'Sensor to Boardroom'
strategy," added George Sarney, Division Chief Executive of the Invensys
Intelligent Automation Division. "We believe Wonderware's presence as a leading
source of plant data and Marcam's position as a leading Enterprise Resource
Planning (ERP) supplier for the process industry will enable a new generation of
plant-centric information systems."
"At Marcam, we are pleased with this acquisition and what it means for our
stockholders, employees and customers," said Jonathan Crane, Marcam Chairman,
President and Chief Executive Officer. "We are all very appreciative of the
confidence Invensys has in Marcam as evidenced by this merger. We are confident
our employees and affiliates will gain from the much larger size of the
Intelligent Automation division at Invensys and Wonderware's standing in a very
competitive marketplace. We also believe our customers will benefit from the
increased viability of Marcam as well as access to a more comprehensive solution
for achieving enterprise excellence."
<PAGE> 2
Marcam Solutions - News and Events Page 2 of 3
The offer was unanimously approved by Marcam's Board of Directors. Under the
terms of the merger agreement with Marcam, a subsidiary of Invensys is expected
to start a tender offer for all of the outstanding shares of Marcam no later
than June 3, 1999. General Atlantic Partners, which beneficially owns
approximately 25% of Marcam's stock, and the officers and directors of Marcam
have agreed to tender their shares and support the merger.
The offer is subject to the condition that a majority of the shares are tendered
and other customary conditions. If the tender offer is successful, it will be
followed as promptly as possible by a merger in which any remaining shares of
Marcam stock will be converted into the right to receive $7.50 per share in
cash.
Invensys plc is a global electronics and engineering company created by the
merger of BTR plc and Siebe plc on 4th February, 1999. Operating globally
through over 500 companies and employing over 120,000 people, Invensys is a
worldwide leader in automation and controls. More than 75% of the company's
business is controls and automation based, with products ranging from advanced
control systems for automating industrial plants and controlling the
environments of buildings, to electronic devices found in many domestic and
commercial appliances.
CONTACT:
Al Fink
Marcam Solutions, Inc.
(617) 928-8237
[email protected]
Charlotte Locke
Marcam Solutions, Inc.
(617) 928-8256
[email protected]
ABOUT MARCAM SOLUTIONS
Marcam Solutions, Inc. (NASDAQ:MRCM) is a global provider of process enterprise
resource planning (ERP) and enterprise asset management (EAM) solutions,
enabling more than one thousand customers to achieve true enterprise
operational excellence. Serving AS/400, UNIX and NT environments, Marcam's
solutions are differentiated by their advanced functionality which provides
strong fit to vertical markets as well as of integration to complementary
industry solutions.
Marcam's process ERP solutions address the unique requirements of its target
markets: food, beverage, and chemical industries. The Protean and PRISM
solutions encompass a broad range of applications including production,
planning, inventory, procurement, order management, costing, financials and
maintenance.
Avantis is Marcam's best of breed solution for the EAM market. The Avantis.XA
and Avantis.Pro suites provide extensive functionality including maintenance
management, MRO inventory control and procurement. Targeted to Fortune 500
companies, Avantis is widely used in capital-intensive industries such as
chemical, metals & mining, and pulp & paper, and for facilities management in
areas such as education and municipalities.
Headquartered in Newton, Massachusetts, the company is represented in more than
40 countries. For more information, visit Marcam at http://www.marcam.com and
Avantis at http://www.avantis.marcam.com.
(C) 1999 Marcam Solutions, Inc. All rights reserved, Marcam, PRISM, Protean
and Avantis are registered trademarks of Marcam Solutions, Inc. Portions of
PRISM and Protean are the subject of U.S. Patent numbers 4,864,507,
5,493,671 and 5,737,609. Other patents pending. Other product,
<PAGE> 3
Marcam Solutions - News and Events Page 3 of 3
company and service names mentioned herein may be trademarks or service marks
of their respective holders.
<PAGE> 1
EXHIBIT 99.7
Summary of Terms
----------------
The following is a summary of certain terms of Jonathan C. Crane's
relationship with Invensys, plc ("Invensys") and Marcam Solutions, Inc.
("Marcam") after Marcam's acquisition by an affiliate of Invensys pursuant to
the Agreement and Plan of Merger dated as of May 27, 1999 (the "Merger
Agreement"):
- Mr. Crane will provide consultative assistance on matters involving
customers, strategies, organizational matters, etc. for 90 days
after the completion of the tender offer made pursuant to the Merger
Agreement. Mr. Crane agrees to be reasonably available during this
time.
- In consideration for this service, Marcam shall, and Invensys
shall cause Marcam to, pay to Mr. Crane $250,000. Full re-payment
of the loan referred to below is a necessary condition for this
payment. This payment will be made even if Mr. Crane becomes an
employee or consultant of any other party and thus becomes less
available to perform services during such 90-day period.
- Invensys and Marcam will honor in accordance with its terms
Mr. Crane's Employment Agreement dated December 22, 1998 with
Marcam, and will pay the amounts due under the Employment Agreement
with respect to the termination of Mr. Crane's employment with
Marcam promptly after the completion of the tender offer made
pursuant to the Merger Agreement.
- The Loan Agreement dated as of December 22, 1998 between Marcam
and Mr. Crane and the Promissory Note dated December 22, 1998
relating thereto will remain in effect through the 90-day period,
except that Mr. Crane will not borrow any additional amounts under
the Loan Agreement or the Promissory Note. At the end of the 90-day
period, Mr. Crane will repay the entire principal amount ($410,000)
and all accrued interest on this loan prior to receiving the
$250,000 consideration referred to above.
INVENSYS, PLC
By: /s/ Roy H. Slavin /s/ Jonathan C. Crane
----------------------- ------------------------
Roy H. Slavin Jonathan C. Crane
<PAGE> 1
EXHIBIT 99.8
M E M O R A N D U M
TO: Denis Liptak
FROM: Jonathan Crane
DATE: March 19, 1999
SUBJ: Your Responsibilities
- --------------------------------------------------------------------------------
Denis, you and I have discussed the need for you to move out of day to day
responsibility for the financial operations of Marcam Solutions, Inc. We
have agreed that your sole responsibilities going forward will be as an
individual contributor and will focus on i) working on the Avantis project and
managing the company's relationship with Broadview in this respect, ii)
managing the Company's Information Technology Group, and iii) assisting in
Investor Relations matters as required. We will mutually agree an announcement
of the change in your responsibilities.
We have agreed that your employment with Marcam Solutions, Inc. will end on May
15, 1999 (the "Termination Date") whether or not a transaction involving the
Avantis Business Group is consummated by that time. The terms and conditions of
the Letter Agreement dated June 10, 1997 between you and the Company will apply
to the termination of your employment on the Termination Date.
I believe this accurately reflects our discussion on this matter. Please sign
below to evidence your agreement.
Agreed:
/s/ Denis E. Liptak
- ----------------------------------------
Denis E. Liptak
<PAGE> 1
EXHIBIT 99.9
M E M O R A N D U M
TO: Denis Liptak
CC: Diane Tormey
DATE: May 20, 1999
SUBJECT: Bonus
- --------------------------------------------------------------------------------
It is agreed that for remaining past May 15 and assisting in the Broadview
activities, you will receive your third and fourth quarter bonuses in their
entirety for a total of $25,000. It is agreed that you will remain until
June 11 or when the activities cease, whichever occurs first.
Jonathan Crane
<PAGE> 1
EXHIBIT 99.10
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT NO. 1, dated as of May 26, 1999 (this "Amendment"), to the
AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of September 18, 1998 between
MARCAM SOLUTIONS, INC., a Delaware corporation (the "Company"), and BANKBOSTON,
N.A., a national banking association, as Rights Agent (the "Rights Agreement").
All terms not otherwise defined herein shall have the meanings given such terms
in the Rights Agreement.
W I T N E S S E T H:
WHEREAS, on June 13, 1997, the Board of Directors of the Company (the
"Board") authorized and declared a dividend distribution with respect to each
share of Common Stock of the Company (the "Common Stock") outstanding as of the
close of business on July 21, 1997 constituting the right to purchase one
one-thousandth of a share of Series A Junior Participating Preferred Stock of
the Company, as reflected in the Rights Agreement; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
may cause the Rights Agreement to be amended at any time prior to the Final
Amendment Date (as defined in the Rights Agreement) without the approval of any
holders of certificates representing shares of Common Stock; and
WHEREAS, on May 26, 1999, the Board authorized and approved the
amendment of the Rights Agreement in anticipation of and in connection with
approving the acquisition of the Company pursuant to a cash tender offer and
merger (the "Merger") pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") among the Company, Invensys, plc (the "Parent"), M Acquisition
Corp., an indirect wholly-owned subsidiary of Parent (the "Purchaser"), and M
Merger Sub, Inc., a wholly-owned subsidiary of Purchaser ("Merger Sub"); and
WHEREAS, on May 26, 1999, in connection with the Merger, the Board
authorized and approved the execution of the Tender and Option Agreement dated
as of May 27, 1999 among Purchaser, Merger Sub, and certain stockholders (the
"Option Stockholders") of the Company listed on Schedule A thereto (the "Option
Agreement"), including for the express purpose of ensuring that General Atlantic
Partners 32, L.P., General Atlantic Partners 21, L.P. and GAP Coinvestment
Partners, L.P., and their Affiliates and Associates (each as defined in the
Rights Agreement) (collectively, the "GAP Parties") continue to qualify as
"Exempt Persons" under the Rights Agreement notwithstanding the execution and
delivery of the Merger Agreement and Option Agreement and the consummation of
the transactions contemplated thereby.
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Notwithstanding anything to the contrary in the Rights Agreement,
the Rights Agreement shall not apply to, and, without limiting the foregoing,
none of Parent, Purchaser, Merger Sub, nor any Option Stockholder (including,
without limitation, the GAP Parties), nor any Affiliate or Associate of any such
parties, will become an "Acquiring Person" or an "Adverse Person," and no
"Adverse Person Event," "Triggering Event," "Stock Acquisition Date,"
"Distribution Date" or "Final Amendment Date" (as such terms are defined in the
Rights Agreement) will occur, as a result of (i) the approval, execution,
delivery or performance of the Merger Agreement or the consummation of the Offer
or Merger pursuant thereto, (ii) the announcement of the Offer or Merger, (iii)
the approval, execution, delivery or performance of the Option Agreement by any
of the parties thereto, or (iv) the purchase, disposition, voting or beneficial
ownership (as defined in the Rights Agreement) of shares of Common Stock of the
Company by Parent, Purchaser, Merger Sub or any of the Option Stockholders
(including, without limitation, the GAP Parties) pursuant to or otherwise
arising from or relating to any of the foregoing, and no shares of Common Stock
shall be deemed to be Beneficially Owned by any such persons as a result of the
foregoing.
2. Without limiting the provisions of Section 1 above, the Board has
authorized and approved the Offer, the Merger and the other transactions
contemplated by the Merger Agreement and Option Agreement as provided for in the
penultimate proviso of the definition of "Exempt Person" in Section 1 of the
Rights Agreement, such that the GAP Parties shall not be deemed to have become
the Beneficial Owner of an additional 1% or more of shares of Common Stock of
the Company or to have entered into any of the transactions set forth in Section
11(a)(ii)(A) of the Rights Agreement pursuant to clauses (1)(i) and (1)(ii),
respectively, of said "Exempt Person" definition, and, accordingly, shall
continue to be "Exempt Persons" for all purposes under the Rights Agreement,
notwithstanding the execution and delivery of the Merger Agreement and Option
Agreement and the consummation of the transactions contemplated thereby.
3. Parent, Purchaser and Merger Sub are third party beneficiaries of
this Amendment and the terms of this Amendment shall not be withdrawn, amended
or otherwise modified without their written consent.
4. Except as amended hereby, the Rights Agreement shall continue in
full force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Rights Agreement to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
Attest:
MARCAM SOLUTIONS, INC.
By: /s/ Diane R. Tormey By: /s/ Harlan B. Plumley
------------------- ---------------------
Name: Diane R. Tormey Name: Harlan B. Plumley
Title: Secretary Title: Chief Financial Officer
Attest:
BANKBOSTON, N.A.
By: /s/ Geoffrey D. Anderson By: /s/ James J. Robinson
------------------------ -----------------------
Name: Geoffrey D. Anderson Name: James J. Robinson
Title: Director Title: Vice President
-3-
<PAGE> 1
Exhibit 99.11
March 24, 1999
Mr. Harlan B. Plumley
83 Ferncroft Road
Waban, MA 02168
Dear Harlan:
The Board of Directors (the "Board") of Marcam Solutions, Inc. (the "Company")
believes that, given the changes to the Company currently being considered by
the Board and the possibility that the Company may receive proposals from third
parties with respect to its future, it is important to the Company that your
management and technical skills continue to be available to the Company and that
you be able to assess and advise the Board whether such proposals would be in
the best interests of the Company and its shareholders and to take such other
actions regarding such proposals as the Board might determine to be appropriate.
The Board has therefore authorized this Agreement as a means of assuring you,
that in the event your employment is terminated within twelve months after a
Change in Control of the Company, as defined below, you will be entitled to
receive the items set forth below. This Agreement is designed to assure the
Company that it will have your continued management efforts, dedication and the
availability of your advice and counsel, notwithstanding the potential results
of the changes being considered or proposals from such third parties. The
effective date of this Agreement is as set forth above. In consideration of the
foregoing and for other good and valuable consideration, the Company and you
hereby agree as follows:
1. If within twelve (12) months after a Change in Control (as defined below) of
the Company, your employment with the Company (including its subsidiaries or
affiliates) is (a) terminated by the Company for any reason other than (i) your
gross dereliction of duty, or (ii) criminal or civil judgment which, in the
Company's or its successor's good faith judgment, renders you unsuitable for
such employment, or (b) terminated by you for Good Reason (as defined below),
then:
a) the Company will pay you as termination compensation, within thirty
(30) days after such termination, a lump sum equal to (i) one year's
then current base salary, plus (ii) an amount equal to your salary on a
per diem basis for any outstanding vacation earned but not taken
through the date of your termination, plus (iii) any award previously
made to you under your then current bonus plan and not previously paid
to you;
b) the termination date shall be treated as a "qualifying event" under
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
and should you elect continuation of coverage under the Company's
health plans in accordance with COBRA, the Company agrees to pay COBRA
payments for a period of one (1) year from the
<PAGE> 2
Harlan B. Plumley
March 24, 1999
Page 2
termination date;
c) notwithstanding any provisions of the Company's 1997 Stock Plan, or
of any other incentive stock option plans or non-qualified stock option
plans which may subsequently be adopted (collectively, the "Plans") or
any agreements thereunder, all stock options granted to you under the
Plans and not then vested shall in such event and at such time become
immediately vested and exerciseable as of the date of termination and
the period of time in which to exercise such options shall be extended
through the balance of the term of the stock option; and
d) the Company shall pay your normal post-termination benefits in
accordance with the Company's retirement, insurance and other benefit
plans and arrangements.
In the event your employment with Company is terminated as a result of
i) your gross dereliction of duty or ii) criminal or civil judgment which, in
the Company's or its successor's good faith judgment, renders you unsuitable for
such employment or if you die, become disabled or voluntarily leave the Company
for other than Good Reason as defined below, you shall not be entitled to any
compensation or benefits following the date of such termination, other than
compensation and benefits required to be paid or provided by law and payment of
the your normal post-termination benefits in accordance with the Company's
retirement, insurance and other benefit plans and arrangements.
2. "Change in Control" means the occurrence of any of the following events
during the Term:
a) The Company is merged, consolidated or reorganized into or with
another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than a majority of the
combined voting power of the then-outstanding securities of the
combined corporation or person immediately after such transaction are
held in the aggregate by the holders of the combined voting power of
the then-outstanding securities entitled to vote generally in the
election of directors of the Company ("Voting Stock") immediately prior
to such transaction;
b) The Company sells or otherwise transfers all or substantially all of
its assets to any other corporation or other legal person, and less
than a majority of the combined voting power of the then-outstanding
securities of such corporation or person immediately after such sale or
transfer is held in the aggregate by the holders of the Voting Stock of
the Company immediately prior to such sale or transfer;
c) There is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"),
disclosing that any person (as the term "person" is used in Section
13(d)(3) or Section 14(d)(2) or the 1934 Act) has become the beneficial
owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the 1934 Act) of
securities representing 25% or more of the Voting Stock;
d) The Company files a report or proxy statement with the Securities
and Exchange
<PAGE> 3
Harlan B. Plumley
March 24, 1999
Page 3
Commission pursuant to the 1934 Act disclosing in response to Form 8-K
or Schedule 14A (or any successor schedule, form or report or item
therein) that a change in control of the Company has or may have
occurred or will or may occur in the future pursuant to any
then-existing contract or transaction; or
e) If during any period of two consecutive years, individuals who at
the beginning of any such period constitute the directors of the
Company cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by the Company's
stockholders, of each director of the Company first elected during such
period was approved by a vote of at least two-thirds of the directors
then still in office who were directors of the Company at the beginning
of any such period;
provided, however, that notwithstanding the foregoing provisions (c)
and (d) of this Section 2, a "Change in Control" shall not be deemed to have
occurred for purposes of this Agreement solely because (i) the Company, (ii) an
entity in which the Company directly or indirectly beneficially owns 50% or more
of the voting securities, or (iii) any Company-sponsored employee stock
ownership plan or any other employee benefit plan of the Company, either files
or becomes obligated to file a report or a proxy statement under or in response
to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under the 1934 Act, disclosing
beneficial ownership by it of shares of Voting Stock, whether in excess of 25%
or otherwise, or because the Company reports that a change in control of the
Company has or may have occurred or will or may occur in the future by reason of
such beneficial ownership.
3. For purposes of this Agreement, "Good Reason" shall mean any of the
following:
a) a reduction in the rate of your salary or in some other form of your
compensation or benefits, including failure to continue any incentive
compensation or employee benefit or stock option or purchase plan,
without providing an appropriate substitute therefor of equal value to
you,
b) a substantial adverse change in (i) the nature or scope of your
duties, responsibilities, powers or authority or (ii) your title,
position or status,
c) the relocation by the Company or its successor of your office to any
place outside the thirty (30) mile radius from your present principal
site of employment with the Company,
d) a material breach by the Company or its successor of any employment,
compensation or similar agreement between you and the Company, or
e) failure of the Company or its successor to give you, within ten (10)
days after your written request therefor, written assurance of its
intention to honor this Agreement.
4. The terms and conditions of the Marcam Solutions Employee Agreement on Ideas,
Inventions, Confidential Information and Non-Competition (the "Employee
Agreement"), or
<PAGE> 4
Harlan B. Plumley
March 24, 1999
Page 4
successor agreement, which you signed upon the commencement of employment shall
survive the termination of your employment.
5. In the event of the termination of your employment under the circumstances
described in the lead in to Section 1, the arrangements provided for by this
Agreement, by any stock option or other agreement between the Company or any of
its subsidiaries and you in effect at the time, and by any other applicable plan
of the Company or any of its subsidiaries will constitute the entire obligation
of the Company to you and performance thereof by the Company will constitute
full settlement of any claim that you might otherwise assert against the Company
or any of its subsidiaries on account of such termination. You shall not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise, nor shall the amount of payments provided
for in this Agreement be reduced by any compensation earned by you as the result
of employment by another employer after the termination of your employment with
the Company or one of its subsidiaries.
6. This Agreement shall be binding upon and inure to the benefit of the Company
and any successor of the Company. Neither this Agreement nor any rights arising
hereunder may be assigned or pledged by you during your lifetime. This Agreement
shall inure to the benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devises and legatees. If you should die while any amount would still be payable
to you hereunder if you had continued to live other than amounts the payment of
which is by its terms determined with respect to your death, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your devisee, legatee or other designee or, if there be no
such designee, to your estate.
7. This Agreement may not be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in a writing signed by you and such
officer as may be specifically designated by the Board. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the Commonwealth of Massachusetts. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
(space left intentionally blank)
<PAGE> 5
Harlan B. Plumley
March 24, 1999
Page 5
If you are in agreement with the foregoing, please so indicate by signing and
returning to the Company the original of this Agreement, whereupon this shall
constitute a binding agreement between you and the Company. The second copy is
for your files.
Very truly yours,
Marcam Solutions, Inc.
By: /s/ Jonathan C. Crane
---------------------------
Name: Jonathan C. Crane
Agreed:
By: /s/ Harlan B. Plumley
------------------------
Harlan B. Plumley
