<PAGE>
As filed with the Securities and Exchange Commission on October 10, 1995
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
Form S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------------------
SunGard/(R)/ Data Systems Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 7379 51-0267091
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
1285 Drummers Lane, Wayne, Pennsylvania 19087
(610) 341-8700
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
----------------------------------
Lawrence A. Gross, Esquire
Vice President and General Counsel
SunGard Data Systems Inc.
1285 Drummers Lane, Wayne, Pennsylvania 19087
(610) 341-8700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------------------
Copies to:
Arthur H. Miller, Esquire Thomas A. Ritchie, Esquire
Blank, Rome, Comisky & McCauley Ritchie & Rediker, L.L.C.
1200 Four Penn Center Plaza 312 North 23rd Street
Philadelphia, Pennsylvania 19103 Birmingham, Alabama 35203
----------------------------------
Approximate date of commencement of proposed sale of the securities to the
public: The date of mailing of the within Information Statement-Prospectus to
the shareholders of MACESS Corporation.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Title of Amount Proposed maximum Proposed maximum Amount of
each class of securities to be offering price aggregate registration
to be registered registered per share offering price fee
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,990,000 shares/(1)/ $29.00/(2)/ $57,710,000/(2)/ $19,900.14
par value $0.01 per share
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement covers shares to be issued by the Registrant in
connection with a proposed merger transaction. It does not include
additional shares that may be issued by reason of potential adjustment for
recapitalization. Pursuant to Rule 416, this Registration Statement covers
such additional shares, the number of which is indeterminable as of the date
hereof. Because such additional shares, if issued, will be issued for no
additional consideration, no additional registration fee is required.
(2) Based upon the average of the last reported high and low prices of the
Common Stock as reported by The Nasdaq Stock Market on October 2, 1995,
estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f)(1) under the Securities Act of 1933, as amended.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
SUNGARD DATA SYSTEMS INC.
CROSS-REFERENCE SHEET FOR REGISTRATION STATEMENT ON FORM S-4
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
ITEM NUMBER IN FORM S-4 PROSPECTUS CAPTION OR LOCATION
- ------------------------------------------------------------------------------------
A. Information About the Transaction
- ------------------------------------------------------------------------------------
<S> <C>
1. Forepart of Registration Facing Page of Registration Statement; Outside
Statement and Outside Front Front Cover Page of Information
Cover Page of Prospectus Statement-Prospectus
- ------------------------------------------------------------------------------------
2. Inside Front and Outside Available Information; Incorporation of
Back Cover Pages of Documents by Reference; Table of Contents
Prospectus
- ------------------------------------------------------------------------------------
3. Risk Factors, Ratio of Summary; The Proposed Merger
Earnings to Fixed Charges
and Other Information
- ------------------------------------------------------------------------------------
4. Terms of the Transaction Summary; Introductory Statement; The Proposed
Merger; Description of Capital Stock; Comparison
of the Rights of Stockholders of SunGard and
MACESS
- ------------------------------------------------------------------------------------
5. Pro Forma Financial Summary; Unaudited Pro Forma Combined Condensed
Information Financial Information
- ------------------------------------------------------------------------------------
6. Material Contracts with Summary; The Proposed Merger
the Company Being Acquired
- ------------------------------------------------------------------------------------
7. Additional Information Inapplicable
Required for Reoffering by
Persons and Parties Deemed
to Be Underwriters
- ------------------------------------------------------------------------------------
8. Interests of Named Inapplicable
Experts and Counsel
- ------------------------------------------------------------------------------------
9. Disclosure of Commission Inapplicable
Position on Indemnification
for Securities Act
Liabilities
- ------------------------------------------------------------------------------------
<CAPTION>
B. Information About the Registrant
- ------------------------------------------------------------------------------------
<S> <C>
10. Information with Incorporation of Documents by Reference;
Respect to S-3 Registrants Summary; The Proposed Merger
- ------------------------------------------------------------------------------------
11. Incorporation of Incorporation of Documents by Reference
Certain Information by
Reference
- ------------------------------------------------------------------------------------
12. Information with Inapplicable
Respect to S-2 or S-3
Registrants
- ------------------------------------------------------------------------------------
13. Incorporation of Inapplicable
Certain Information by
Reference
- ------------------------------------------------------------------------------------
14. Information with Inapplicable
Respect to Registrants
Other Than S-3 or S-2
Registrants
- ------------------------------------------------------------------------------------
<CAPTION>
C. Information About the Company Being Acquired
- ------------------------------------------------------------------------------------
<S> <C>
15. Information with Inapplicable
Respect to S-3 Companies
- ------------------------------------------------------------------------------------
16. Information with Inapplicable
Respect to S-3 or
S-2 Companies
- ------------------------------------------------------------------------------------
17. Information with Summary; The Proposed Merger; Business of
Respect to Companies Other MACESS; Market Prices of MACESS Stock and
Than S-3 or S-2 Companies Dividends; Selected Financial Information of
MACESS; Management's Discussion and Analysis of
Financial Condition and Results of Operations of
MACESS; Principal Shareholders of MACESS;
Financial Statements of MACESS
- ------------------------------------------------------------------------------------
<CAPTION>
D. Voting and Management Information
- ------------------------------------------------------------------------------------
<S> <C>
18. Information if Proxies, Inapplicable
Consents or Authorizations
are to be Solicited
- ------------------------------------------------------------------------------------
19. Information if Proxies, Incorporation of Documents by Reference;
Consents or Authorizations Summary; Introductory Statement; The Proposed
are not to be Solicited or Merger; Principal Shareholders of MACESS
in an Exchange Offer
- ------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
MACESS Corporation
402 Office Park Drive, Suite 150
Birmingham, Alabama 35223
(205) 870-4100
- --------------------------------------------------------------------------------
Notice of Special Meeting of Shareholders
-----------------------------------------
Notice is hereby given that the Special Meeting of Shareholders of MACESS
Corporation, an Alabama corporation ("MACESS"), will be held on Wednesday,
November 8, 1995, at 2:00 p.m. local time, at MACESS' headquarters located at
402 Office Park Drive, Suite 150, Birmingham, Alabama for the following
purposes:
1. To consider and act upon a proposal to approve the Agreement and
Plan of Reorganization, dated September 29, 1995 (the "Reorganization
Agreement"), among SunGard Data Systems Inc. ("SunGard"), SDS Merger Inc., a
wholly owned subsidiary of SunGard ("Newco"), MACESS and the eight principal
shareholders of MACESS (the "Principals"), and the related Agreement and Plan
of Merger, dated September 29, 1995 (the "Merger Agreement"), among SunGard,
Newco and MACESS, pursuant to which (a) Newco would be merged with and into
MACESS (the "Merger"), with MACESS surviving the Merger under the name "MACESS
Corporation," and (b) MACESS shareholders (other than shareholders who perfect
dissenter's rights) would receive 0.2783022 shares of common stock, $0.01 par
value per share, of SunGard for each share of their MACESS voting common
stock, $0.002 par value per share, and MACESS Class A non-voting common stock,
$0.002 par value per share, all as more fully described in the accompanying
Information Statement-Prospectus; and
2. Such other matters as may properly be brought before the meeting or
any adjournments or postponements thereof.
The record date for the Special Meeting of Shareholders is the close of
business on the date immediately preceding the date of this Notice. Only
holders of record of MACESS voting common stock and Class A non-voting common
stock on that date will be entitled to notice of, and to vote at, the Special
Meeting and any adjournments or postponements thereof.
By Order of the Board of Directors,
William W. Featheringill
Secretary
October ___, 1995
- --------------------------------------------------------------------------------
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
YOU HAVE THE RIGHT TO DEMAND PAYMENT IN CASH OF THE FAIR VALUE OF YOUR SHARES OF
MACESS STOCK IF YOU FULLY COMPLY WITH THE ALABAMA STATUTE CONCERNING THE RIGHTS
OF DISSENTING SHAREHOLDERS, AS EXPLAINED IN THE ACCOMPANYING INFORMATION
STATEMENT-PROSPECTUS.
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
----------
SunGard(R) Data Systems Inc.
1,990,000 Shares of Common Stock
This Prospectus of SunGard Data Systems Inc. ("SunGard") covers 1,990,000
shares of common stock, $0.01 par value per share ("SunGard Common Stock"),
that may be issued to the shareholders of MACESS Corporation, an Alabama
corporation ("MACESS"), upon consummation of the proposed merger (the
"Merger") of SDS Merger Inc. ("Newco"), a wholly owned subsidiary of SunGard,
with and into MACESS pursuant to the Agreement and Plan of Reorganization,
dated September 29, 1995 (the "Reorganization Agreement"), among SunGard,
Newco, MACESS and the eight principal shareholders of MACESS (the
"Principals"), and the related Agreement and Plan of Merger, dated September
29, 1995 (the "Merger Agreement"), among SunGard, Newco and MACESS. This
Prospectus also constitutes an Information Statement of MACESS and is being
furnished to the holders of MACESS voting common stock, $0.002 par value per
share ("MACESS Common Stock"), and MACESS Class A non-voting common stock,
$0.002 par value per share ("MACESS Class A Stock" and together with MACESS
Common Stock "MACESS Stock"), in connection with a Special Meeting of
Shareholders of MACESS to vote on the Merger.
Based upon the preliminary exchange ratio of 0.2783022 shares of SunGard
Common Stock for each share of MACESS Stock, a total of 1,990,000 shares of
SunGard Common Stock would be issued in the Merger, representing approximately
5% of all SunGard Common Stock outstanding after the Merger. This number of
shares may increase or decrease if there is a recapitalization of SunGard
before the Special Meeting of Shareholders of MACESS. See The Proposed
Merger--Principal Terms of the Merger.
All information contained in this Information Statement-Prospectus with
respect to SunGard and its subsidiaries was supplied by SunGard, and all
information with respect to MACESS was supplied by MACESS. No person is
authorized to give any information or to make any representation not contained
in this Information Statement-Prospectus, and, if given or made, such
information or representation should not be relied upon as having been
authorized. This Information Statement-Prospectus does not constitute an
offer to sell or a solicitation of an offer to purchase the securities offered
hereby to or from any person in any jurisdiction where it is unlawful to make
such offer or solicitation. Neither the delivery of this Information
Statement-Prospectus nor any distribution of securities made hereunder shall,
under any circumstances, create an implication that there has been no change
in the affairs of SunGard or MACESS since the date of this Information
Statement-Prospectus.
THE SUNGARD COMMON STOCK TO BE ISSUED IN THE MERGER HAS NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
INFORMATION STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Information Statement-Prospectus is October ____, 1995.
This Information Statement-Prospectus does not constitute a
prospectus for public reoffering of SunGard Common Stock.
(i)
<PAGE>
Available Information
SunGard has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-4 under the Securities Act of
1933 (the "Registration Statement") with respect to the offering of SunGard
Common Stock to be issued in connection with the Merger. This Information
Statement-Prospectus constitutes a part of the Registration Statement and, in
accordance with the rules of the Commission, omits certain of the information
contained in the Registration Statement. For such information, reference is
made to the Registration Statement and the exhibits thereto.
SunGard is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Commission. The
Registration Statement, as well as such reports, proxy statements and other
information, can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's regional offices at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and at
Seven World Trade Center, New York, New York 10048. Copies of such material
also can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, such materials and other information concerning SunGard can be
inspected at the National Association of Securities Dealers, Inc., 1735 K
Street, Washington, D.C. 20006.
This Information Statement-Prospectus incorporates by reference certain
documents that are not presented herein or delivered herewith. SunGard hereby
undertakes to provide without charge to each person, including any beneficial
owner, to whom a copy of this Information Statement-Prospectus is delivered,
upon written or oral request of such person, a copy of any and all documents
and information that have been incorporated by reference herein (not including
exhibits thereto unless such exhibits are specifically incorporated by
reference into the information incorporated herein). Such documents and
information are available upon request from SunGard Data Systems Inc., 1285
Drummers Lane, Wayne, Pennsylvania 19087, Attention: Investor Relations;
telephone: (610) 341-8700. In order to ensure timely delivery of any such
documents and information, any request should be made by October ___, 1995.
Incorporation of Documents by Reference
The following documents filed by SunGard with the Commission are hereby
incorporated by reference in this Information Statement-Prospectus: (1)
SunGard's Annual Report on Form 10-K for the year ended December 31, 1994; (2)
SunGard's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995
and June 30, 1995; (3) SunGard's Definitive Proxy Statement in connection with
its 1995 Annual Meeting of Shareholders; (4) SunGard's Current Report on Form
8-K filed on October 6, 1995; and (5) the description of SunGard Common Stock
that is incorporated by reference in SunGard's Registration Statement on Form
8-A filed on February 14, 1986, including any amendments or reports filed for
the purpose of updating such description.
All documents filed by SunGard pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Information Statement-
Prospectus and before the date of the Special Meeting of Shareholders of
MACESS shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing thereof. Any statement contained herein or in
any document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Information
Statement-Prospectus to the extent that a statement contained herein or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein, modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed to constitute a part
of this Information Statement-Prospectus, except as so modified or superseded.
(ii)
<PAGE>
Table of Contents
Page
----
Summary.................................................................. (v)
Introductory Statement................................................... -1-
Proposals to be Presented at the Special Meeting.................... -1-
Voting Rights and Shareholder Approval.............................. -1-
The Proposed Merger...................................................... -2-
Background.......................................................... -2-
MACESS Board Approval and Reasons for the Merger.................... -3-
Principal Terms of the Merger....................................... -4-
Conditions to Closing............................................... -5-
Modification, Waiver and Termination................................ -6-
Representations and Warranties...................................... -6-
Rights of Dissenting Shareholders................................... -6-
Certain Federal Income Tax Consequences............................. -8-
Conduct of Business Before Closing.................................. -8-
Fees and Expenses................................................... -10-
Accounting Treatment................................................ -10-
Regulatory Matters.................................................. -11-
Management of MACESS After Closing and Other Employment Matters..... -11-
Exchange of Stock Certificates...................................... -12-
Escrow Agreement.................................................... -12-
Resales of SunGard Common Stock..................................... -13-
Description of Capital Stock............................................. -13-
SunGard Capital Stock............................................... -13-
MACESS Capital Stock................................................ -13-
Comparison of the Rights of Stockholders of SunGard and MACESS........... -14-
Recent Developments of SunGard........................................... -17-
(iii)
<PAGE>
Unaudited Pro Forma Combined Condensed Financial Information............. -17-
Market Prices of MACESS Stock and Dividends.............................. -19-
Selected Financial Information of MACESS................................. -19-
Management's Discussion and Analysis of Financial
Condition and Results of Operations of MACESS................ -20-
Business of MACESS....................................................... -22-
Principal Shareholders of MACESS......................................... -22-
Experts.................................................................. -23-
Legal Opinions........................................................... -23-
Index to Financial Statements of MACESS.................................. -24-
Appendix A-- Agreement and Plan of Reorganization.......................... A
Appendix B-- Agreement and Plan of Merger.................................. B
Appendix C-- Form of Escrow Agreement...................................... C
Appendix D-- Alabama Statute Concerning Rights of Dissenting Stockholders.. D
(iv)
<PAGE>
Summary
The following is a summary of certain significant matters discussed
elsewhere in this Information Statement-Prospectus. This summary is qualified
in its entirety by reference to the more detailed information appearing
elsewhere in this Information Statement-Prospectus and the Appendices hereto.
Shareholders are urged to read the entire Information Statement-Prospectus,
including the Appendices hereto. Certain terms used in this summary and
elsewhere in this Information Statement-Prospectus are used as defined in the
Summary or elsewhere in this Information Statement-Prospectus.
Special Meeting
The Special Meeting of Shareholders of MACESS (the "Special Meeting")
will be held at MACESS' headquarters located at 402 Office Park Drive, Suite
150, Birmingham, Alabama on Wednesday, November 8, 1995, at 2:00 p.m. local
time. See Introductory Statement. At the Special Meeting, holders of MACESS
Stock will be asked to consider and vote upon the Merger of Newco, a wholly
owned subsidiary of SunGard, with and into MACESS pursuant to the
Reorganization Agreement and the Merger Agreement. See The Proposed Merger.
Outstanding Shares and Required Vote
Only holders of record of MACESS Stock at the close of business on
the date immediately preceding the date of the Notice of the Special Meeting
of Shareholders of MACESS (the "Record Date") are entitled to notice of and to
vote at the Special Meeting. Approval of the Merger will require the
affirmative vote of the holders of at least two-thirds of the 1,430,100 shares
of MACESS Common Stock outstanding on the Record Date and at least two-thirds
of the 5,720,400 shares of MACESS Class A Stock outstanding on the Record
Date. SunGard's obligation to consummate the Merger, however, is subject to
the condition (which it may waive) that the Merger is approved by at least 92%
of outstanding shares of each class of MACESS Stock. See The Proposed Merger-
-Conditions to Closing. On the Record Date, the Principals are entitled to
vote a total of 1,408,100 or 98.5% of the outstanding shares of MACESS Common
Stock and 5,632,400 or 98.5% of the outstanding shares of MACESS Class A
Stock. See Principal Shareholders of MACESS.
The Parties
SunGard: SunGard is a Delaware corporation which is in the business
of computer service and application software. SunGard is a specialized
provider of proprietary investment support systems, comprehensive computer
disaster recovery services, and healthcare information systems. SunGard's
principal executive offices are located at 1285 Drummers Lane, Wayne,
Pennsylvania 19087, telephone (610) 341-8700.
MACESS: MACESS is an Alabama corporation which provides imaging-
based, automated document and work flow management software systems and
related services and products to the managed healthcare industry. MACESS'
principal executive offices are located at 402 Office Park Drive, Suite 150,
Birmingham, Alabama 35223, telephone (205) 870-4100. See Business of MACESS.
Newco: Newco is an Alabama corporation and wholly owned subsidiary
of SunGard. Newco was recently formed for the purposes of effecting the
Merger with MACESS, will not engage in any business prior to the Merger and
will not survive the Merger.
(v)
<PAGE>
MACESS Board Approval
The Board of Directors of MACESS has unanimously approved the Merger
and determined that the terms of the proposed Merger are fair to and in the
best interests of the MACESS shareholders. See The Proposed Merger--MACESS
Board Approval and Reasons for the Merger.
The Proposed Merger
Subject to MACESS shareholder approval and certain other conditions,
Newco will be merged with and into MACESS, with MACESS surviving the Merger
(the "Surviving Corporation"). The Surviving Corporation will become a wholly
owned subsidiary of SunGard and will be named "MACESS Corporation." See The
Proposed Merger. In the Merger, each MACESS shareholder (other than
shareholders who perfect dissenters' rights) will receive 0.2783022 shares of
SunGard Common Stock for each share of MACESS Stock, and the total shares of
SunGard Common Stock issued to each MACESS shareholder will be rounded to the
nearest whole number of shares. The 0.2783022 exchange ratio will not be
adjusted as a result of any decrease or increase in the price of SunGard
Common Stock. See The Proposed Merger--Principal Terms of the Merger.
Conditions to Closing and Effective Date
The parties' respective obligations to consummate the Merger are
subject to MACESS shareholder approval and a number of other conditions, each
of which may be waived either before or after the Special Meeting. The Merger
will be consummated only if it is approved by at least 92% of each class of
MACESS Stock and the other conditions to closing are satisfied or waived. If
so, then the Merger will be consummated on the date and time of filing of the
Articles of Merger and all other necessary documents with the Secretary of
State of the State of Alabama (the "Effective Date"). See The Proposed
Merger--Conditions to Closing.
Modification, Waiver and Termination
Each party may, at any time before the Effective Date, whether before
or after the Special Meeting, waive any of the terms or conditions of the
Reorganization Agreement or the Merger Agreement, or agree to any amendment or
modification to either agreement, as long as the waiver, amendment or
modification does not result in a decrease in the exchange ratio or have a
material adverse effect on MACESS shareholders. The Reorganization Agreement
and the Merger Agreement may be terminated at any time before the Effective
Date, whether before or after the Special Meeting, by the mutual written
consent of SunGard and MACESS, by written notice from either SunGard or MACESS
to the other if the party giving such notice is not willing to waive a
condition that the other party cannot satisfy on or before November 30, 1995,
or by written notice from either SunGard or MACESS to the other if the Merger
is not consummated by November 30, 1995 for any reason other than a breach by
the party giving such notice. See The Proposed Merger--Modification, Waiver
and Termination.
Exchange of Stock Certificates
As of the Effective Date, each MACESS shareholder (other than
shareholders who perfect dissenters' rights) will be entitled to receive, upon
surrender of certificate(s) formerly representing shares of MACESS Stock,
certificates representing 90% of the shares of SunGard Common Stock to which
he is entitled, with the 10% balance being held in escrow until it is released
in accordance with the Escrow Agreement, the form of which is attached hereto
as Appendix C (the "Escrow Agreement"). Instructions for surrendering MACESS
stock certificates will be forwarded to the former MACESS shareholders as
soon as possible after the Effective Date.
(vi)
<PAGE>
See The Proposed Merger--Exchange of Stock Certificates and Escrow Agreement.
Rights of Dissenting Shareholders
Subject to consummation of the Merger, each holder of MACESS Stock
who files a written objection to the Merger with MACESS before the Special
Meeting and who otherwise complies with the applicable procedures under
Alabama law, will be entitled to receive the fair value of his shares of
MACESS Stock in cash. See The Proposed Merger--Rights of Dissenting
Shareholders.
Certain Federal Income Tax Consequences
The Merger will constitute a tax-free reorganization under the
Internal Revenue Code of 1986, as amended. For federal income tax purposes,
therefore, no gain or loss will be recognized by MACESS shareholders upon the
exchange of their shares for shares of SunGard Common Stock, except to the
extent of cash received by any dissenting MACESS shareholders. See The
Proposed Merger--Certain Federal Income Tax Consequences.
Regulatory Matters
Other than certain filings to be made pursuant to the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, and certain filings to
be made and approvals obtained under certain federal and state securities or
"blue sky" laws, there are no federal or state regulatory requirements that
must be complied with or approval obtained in connection with the Merger. See
The Proposed Merger--Regulatory Matters.
Accounting Treatment
The Merger will be accounted for by SunGard under the pooling-of-
interests method of accounting. See The Proposed Merger--Accounting
Treatment.
Management of MACESS After Closing
After the Effective Date, the Surviving Corporation will be a wholly
owned subsidiary of SunGard and will own and operate the business conducted by
MACESS before the Effective Date. SunGard intends that the operations of the
Surviving Corporation after the Effective Date will be conducted substantially
the same as those of MACESS before the Effective Date, with present MACESS
management personnel retained except that William W. Featheringill, Chairman
and Chief Executive Officer of MACESS, will resign from his positions
effective as of the Effective Date. See The Proposed Merger--Management of
MACESS After Closing and Other Employment Matters.
Interests of Certain Persons in Merger
Of the outstanding MACESS Stock, approximately 96% is beneficially
owned by persons who are employed by MACESS, including all of its officers and
directors. Mr. Featheringill, Chairman and Chief Executive Officer
of MACESS, will resign from his positions as of the Effective Date, but the
Surviving Corporation will provide Mr. Featheringill an office and the
services of a secretary for up to one year after the Effective Date, in
exchange for his consulting services to the Surviving Corporation. See The
Proposed Merger--Management of MACESS After Closing and Other Employment
Matters.
(vii)
<PAGE>
Fees and Expenses
If the Merger is not consummated solely due to the failure of the
condition that at least 92% of the outstanding shares of each class of MACESS
Stock approve the Merger, then MACESS will owe SunGard a fee of $6,000,000.
In addition, if, within one year after the date of the Reorganization
Agreement, a company other than SunGard acquires a majority of the outstanding
MACESS Stock or assets of MACESS having a market value equal to 50% or more of
the value of all of the assets of MACESS, or MACESS files a registration for a
public offering of its securities, then, depending upon the amount of
consideration received by MACESS or its shareholders, MACESS may owe SunGard
an additional cash payment. Mr. Featheringill has guaranteed such contingent
payments. See The Proposed Merger--Fees and Expenses.
Comparative Per Share Data
In addition to agreeing to acquire MACESS, SunGard recently acquired
another healthcare information systems company named Intelus Corporation
("Intelus"), and SunGard recently signed a definitive agreement to acquire a
derivative instruments trading systems company named Renaissance Software Inc.
("Renaissance"). See Recent Developments of SunGard.
The following table presents certain historical per share data and
pro forma data of SunGard, MACESS, Renaissance and Intelus, based upon the
historical financial statements of such companies. The pro forma information
gives effect to all three transactions as if they had occurred at the
beginning of the periods presented, with each of the transactions accounted
for on a pooling-of-interests basis. The pro forma information is provided
for illustrative purposes only and is not necessarily indicative of the
results of operations that actually would have been obtained if the three
transactions had been effected on the date indicated or of the results that
may be obtained in the future. The following information should be read in
conjunction with the other unaudited pro forma financial information that is
included in this Information Statement-Prospectus (see Unaudited Pro Forma
Combined Condensed Financial Information), the separate financial statements
of SunGard, Renaissance and Intelus that are incorporated by reference in this
Information Statement-Prospectus, and the separate financial statements of
MACESS that are included in this Information Statement-Prospectus. See Index
to Financial Statements of MACESS.
<TABLE>
<CAPTION>
SunGard Pro Forma
Historical Combined
---------- ---------
<S> <C> <C>
Fully diluted net income per common share:
--------------------------------------------
Six months ended:
June 30, 1995 $ 0.61 $0.61
June 30, 1994 0.51 0.53
Year ended:
December 31, 1994 1.12 1.08
December 31, 1993 1.04 1.00
December 31, 1992 0.79 0.75
Book value per common share:
--------------------------------------------
As of:
June 30, 1995 10.22 9.57
December 31, 1994 9.57 8.97
</TABLE>
(viii)
<PAGE>
Market Price Data
SunGard Common Stock trades on The Nasdaq Stock Market ("Nasdaq") and
the London Stock Exchange under the symbol SNDT. There is no established
trading market for MACESS Stock. See Market Price of MACESS Stock and
Dividends. The following table presents (1) the last sale price per share of
SunGard Common Stock, as reported by Nasdaq on September 29, 1995, the last
full trading day before public announcement of the Merger; and (2) the pro
forma equivalent price per share of MACESS Stock, calculated by multiplying
0.2783022 (the preliminary exchange ratio) by such SunGard Common Stock price.
See The Proposed Merger--Principals Terms of the Merger.
<TABLE>
<CAPTION>
Market Value Pro Forma
of SunGard Equivalent of
Common Stock MACESS Stock
------------ -------------
<S> <C> <C>
Price Per Share as of September 29, 1995.. $29.25 $8.14
</TABLE>
On _____ __, 1995, the last sale price per share of SunGard Common Stock, as
reported by Nasdaq, was $ ____.
Selected Financial Information of SunGard
(in thousands, except per share data)
The following information summarizes certain selected historical
consolidated financial data of SunGard and should be read in conjunction with
the consolidated financial statements of SunGard that are incorporated by
reference in this Information Statement-Prospectus. The following information
has not been restated to reflect SunGard's pooling-of-interests with
Intelus that closed on August 31, 1995, because the effect of such restatement
would not be material.
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended
(unaudited) December 31,
-------------------- --------------------------------------------------
1995 1994 1994 1993/(2)/ 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
- ----------------------
Revenues $246,609 $206,744 $437,190 $381,372 $324,570 $283,550 $262,108
Income from operations 36,964 32,701 70,326 59,645 50,336 42,491 40,330
Net income 23,339 19,841 43,087 38,474 25,808 21,467 20,480
Net income per share:/(1)/
Primary 0.61 0.51 1.12 1.07 0.82 0.70 0.67
Fully diluted 0.61 0.51 1.12 1.04 0.79 0.68 0.67
Balance Sheet Data:
- -------------------
Total assets $490,345 $485,740 $418,135 $365,580 $313,459 $302,687
Total short term and
long term debt 6,582 10,567 6,523 89,790 87,820 109,232
Stockholders' equity 384,395 359,292 316,960 189,899 162,998 140,266
</TABLE>
/(1)/ Net income per share has been adjusted for the two-for-one stock split
which occurred in July 1995.
/(2)/ 1993 includes after-tax gain on sale of product line of $3,371, or $0.09
per share on a fully diluted basis.
(ix)
<PAGE>
INFORMATION STATEMENT-PROSPECTUS
--------------------------------
Special Meeting of Shareholders of MACESS Corporation (an
Alabama corporation) to be held November 8, 1995
Introductory Statement
This Information Statement-Prospectus is being furnished to the
shareholders of MACESS Corporation, an Alabama corporation ("MACESS"), in
connection with the Special Meeting of Shareholders to be held on Wednesday,
November 8, 1995, at 2:00 p.m. local time, at MACESS' headquarters located at
402 Office Park Drive, Suite 150, Birmingham, Alabama and any adjournments or
postponements thereof (the "Special Meeting"). This Information Statement-
Prospectus and the attached Notice of Special Meeting are first being mailed
to MACESS shareholders on or about October __, 1995.
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. YOU MAY VOTE FOR OR AGAINST THE MERGER BY ATTENDING THE SPECIAL
MEETING. YOU HAVE THE RIGHT TO DEMAND PAYMENT IN CASH OF THE FAIR VALUE OF
YOUR SHARES OF MACESS STOCK IF YOU FULLY COMPLY WITH THE ALABAMA STATUTE
CONCERNING THE RIGHTS OF DISSENTING SHAREHOLDERS. See The Proposed Merger--
Rights of Dissenting Shareholders.
With respect to the information set forth in this Information Statement-
Prospectus, you also should refer to the preceding Summary beginning on Page
(v). All information contained in this Information Statement-Prospectus with
respect to SunGard Data Systems Inc., a Delaware corporation ("SunGard"), and
its subsidiaries was supplied by SunGard, and all information with respect to
MACESS was supplied by MACESS.
Proposals to be Presented at the Special Meeting
At the Special Meeting, MACESS shareholders will be asked to consider and
vote upon the following proposals:
1. Approval of the Agreement and Plan of Reorganization, dated
September 29, 1995 (the "Reorganization Agreement"), among SunGard, SDS Merger
Inc., a wholly owned subsidiary of SunGard ("Newco"), MACESS and the eight
principal shareholders of MACESS (the "Principals"), and the related Agreement
and Plan of Merger, dated September 29, 1995 (the "Merger Agreement"), among
SunGard, Newco and MACESS, pursuant to which (a) Newco would be merged with
and into MACESS (the "Merger"), with MACESS surviving the Merger under the
name "MACESS Corporation," and (b) MACESS shareholders (other than
shareholders who perfect dissenter's rights) would receive 0.2783022 shares of
SunGard common stock, $0.01 par value per share ("SunGard Common Stock") for
each share of their MACESS voting common stock, $0.002 par value per share
("MACESS Common Stock"), and MACESS Class A non-voting common stock, $0.002
par value per share ("MACESS Class A Stock" and together with MACESS Common
Stock "MACESS Stock"), all as more fully described in this Information
Statement-Prospectus; and
2. Such other matters as may properly be brought before the meeting or
any adjournments or postponements thereof.
Voting Rights and Shareholder Approval
The record date for the Special Meeting is the close of business on the
date immediately preceding the date of the Notice of the Special Meeting of
Shareholders of MACESS (the "Record Date"). Only holders of record of MACESS
Stock on the Record Date are entitled to notice of and to
-1-
<PAGE>
vote at the Special Meeting. On the Record Date, there were 1,430,100 shares
of MACESS Common Stock and 5,720,400 shares of MACESS Class A Stock
outstanding. Holders of record of MACESS Common Stock on the Record Date are
entitled to one vote per share on any matter that may properly come before the
Special Meeting. Holders of record of MACESS Class A Stock on the Record Date
are also entitled to one vote per share on the Merger (although Alabama law is
unclear as to this matter). The presence of the holders of at least a
majority of the shares of each class of MACESS Stock outstanding on the Record
Date is necessary to constitute a quorum at the Special Meeting.
Approval of the Merger will require the affirmative vote of the holders
of at least two-thirds of the shares of each class of MACESS Stock outstanding
on the Record Date. SunGard's obligation to consummate the Merger, however,
is subject to the condition (which it may waive) that the Merger is approved
by at least 92% of outstanding shares of each class of MACESS Stock. See The
Proposed Merger--Conditions to Closing and Accounting Treatment.
The Principals are entitled to vote a total of 1,408,100 of the shares of
MACESS Common Stock outstanding on the Record Date and 5,632,400 of the shares
of MACESS Class A Stock outstanding on the Record Date, representing 98.5% of
all shares of each class of MACESS Stock outstanding on the Record Date. See
Principal Shareholders of MACESS.
The Proposed Merger
The following information concerning the Merger, insofar as it relates to
the Reorganization Agreement, the Merger Agreement and the Escrow Agreement,
is qualified in its entirety by reference to the Reorganization Agreement, the
Merger Agreement and the Escrow Agreement, which are attached as Appendices A,
B and C, respectively, to this Information Statement-Prospectus. YOU ARE
URGED TO CAREFULLY READ THE ENTIRE REORGANIZATION AGREEMENT, MERGER AGREEMENT
AND ESCROW AGREEMENT.
Background
Since its inception, SunGard has pursued a strategy for growth, both
internally and from the acquisition of computer services companies that
complement or expand SunGard's existing business lines. In mid-1994, SunGard
determined that the market for providing computer services to the healthcare
industry was a market with both good growth potential and attributes similar
to SunGard's existing business lines. At the beginning of 1995, SunGard
narrowed its interest in the healthcare industry by concluding that work-
flow/document-imaging products and services were a new computer application
that had higher growth prospects than older, more established healthcare
computer applications. By the end of August 1995, SunGard had completed its
first healthcare industry acquisition by acquiring Intelus Corporation, which
primarily provides work-flow/document-imaging products and services to large
healthcare providers.
Since its inception, MACESS has focused on a vertical-market solution for
the managed healthcare and health insurance industry. During late 1993 and
early 1994, MACESS began to explore the possibility of selling its document-
imaging-based, operations-management software systems to vertical markets
within the financial services industry, such as large pension fund managers,
which have paper-intensive, transaction-oriented operations similar to the
healthcare industry. MACESS concluded that, although MACESS had gained
significant credibility in healthcare markets, substantial new resources would
be required to market its software systems to the financial services industry.
In mid-1994, MACESS considered the possibility of attracting a venture
capital investor active in the financial services industry to help meet two
objectives. The primary objective would be to raise
-2-
<PAGE>
capital for MACESS' entry into its targeted financial software
markets. A secondary objective would be to provide contacts in the financial
services industry that would assist MACESS in gaining access to these markets.
As a result, MACESS conducted discussions with several potential venture
capital investors throughout late 1994 and early 1995.
In April 1995, MACESS was contacted by an investment-banking firm
retained by SunGard, Broadview Associates, L.P. ("Broadview"), regarding
MACESS' interest in a possible business combination with SunGard. Shortly
thereafter, SunGard met with MACESS to review the technical capabilities of
the MACESS software systems. In June 1995, SunGard, accompanied by Broadview,
visited MACESS to evaluate a potential combination of SunGard and MACESS by
investigating the strategic direction of MACESS and becoming familiar with the
management and operations of MACESS. SunGard made requests for certain
financial information and other information regarding MACESS to aid SunGard in
its evaluation.
During April through July 1995, MACESS evaluated publicly available
information regarding SunGard. After review of such information, MACESS
concluded that a merger with SunGard would meet the two major objectives
MACESS had defined in deciding to pursue a potential venture capital investor.
Publicly available financial information regarding SunGard demonstrated that
SunGard was financially sound and had the capital resources necessary to
finance an entry into the new markets targeted by MACESS. In addition,
SunGard, with a high concentration of its business in the financial services
industry, offered MACESS the potential access to these markets that MACESS had
determined desirable. To assist the MACESS Board of Directors and management
in evaluating a reasonable value for MACESS in a potential business
combination with SunGard, MACESS engaged the investment-banking firm of
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"). Merrill
Lynch assisted MACESS in determining an appropriate valuation of MACESS and in
assessing the financial condition of SunGard and the potential for growth in
the market value of SunGard Common Stock that would be received in a merger.
MACESS did not request nor receive from Merrill Lynch any opinion regarding
the fairness of the Merger to MACESS shareholders.
Discussions took place during June 1995 between SunGard and MACESS in
order to explore the potential business and financial benefits of combining
the two companies. As a result of those discussions, the senior managements of
SunGard and MACESS determined that an acquisition of MACESS by SunGard would
be in the best interests of each company and its shareholders.
During late July and early August 1995, senior officers of MACESS and
SunGard, together with a representative of Broadview, conducted negotiations
regarding the number of shares of SunGard Common Stock to be issued by SunGard
in exchange for all of the outstanding shares of MACESS Stock. During
September 1995, SunGard conducted a "due diligence" investigation of MACESS,
and the senior officers of SunGard and MACESS negotiated the terms of the
Reorganization Agreement and the Merger Agreement. The Merger was approved by
the Board of Directors of SunGard on September 26, 1995 and by the Board of
Directors of MACESS on September 29, 1995.
MACESS Board Approval and Reasons for the Merger
On September 29, 1995, the Board of Directors of MACESS, in an action by
unanimous written consent, determined that the Merger was in the best interest
of MACESS and its shareholders and approved the Reorganization Agreement and
Merger Agreement and the transactions necessary to consummate the Merger.
Prior to reaching its decision, the MACESS Board of Directors had received
information from management of MACESS, its legal counsel, accountants,
financial advisors and others regarding various aspects of SunGard, including
its products, employees, suppliers and management. Based on this information
and a description of the terms of the Reorganization Agreement and the Merger
Agreement, the Board of Directors approved the Reorganization Agreement, the
Merger Agreement and the Merger and authorized the filing of a registration
statement, the obtaining of all
-3-
<PAGE>
regulatory approvals, and the performance of all additional actions necessary,
appropriate or advisable in order to consummate the Merger. The Board of
Directors of MACESS recommends that the shareholders of MACESS vote FOR
approval and adoption of the Reorganization Agreement and the Merger Agreement
and the transactions contemplated thereby.
In reaching its conclusion to enter into the Reorganization Agreement and
the Merger Agreement and to recommend that the shareholders of MACESS vote FOR
the approval and adoption of those agreements, the Board of Directors of
MACESS considered a number of factors, including, without limitation, the
following:
(i) The value of the consideration to be received by the shareholders of
MACESS, including the fact that the Merger was expected to be treated as a
tax-free reorganization and that, with the Merger, the shareholders of MACESS
could continue to participate in any continued growth in the development of
document imaging-based, operations management software systems and related
services for the managed healthcare industry and other markets by acquiring an
interest in a larger, more diverse enterprise;
(ii) The publicly available financial information regarding SunGard,
certain other information provided by SunGard and information regarding
SunGard Common Stock, the relative financial performance of SunGard, the
business reputation and capabilities of SunGard and its management, SunGard's
financial strength, and the liquidity and the historical performance of the
publicly traded SunGard Common Stock;
(iii) The opportunity for holders of MACESS Stock to continue participating
in the potential for long-term gains in MACESS through the ownership of
SunGard Common Stock following the Merger;
(iv) The perceived strengths of MACESS and SunGard combined, including the
potential developments and information that are expected to be shared between
the two companies after the Merger is consummated, and the belief that
SunGard's concentration in financial oriented markets provides a broad new
customer-base for MACESS' software systems; and
(v) The likelihood that the Merger will be consummated.
In view of the wide variety of factors considered by the Board of Directors
of MACESS in connection with its evaluation of the terms of the proposed
Merger, the Board did not find it practicable to, and did not, quantify or
otherwise attempt to assign relative weights to the specific factors
considered in reaching its determinations.
Principal Terms of the Merger
Effect of the Merger. If the Merger is approved by at least 92% of the
outstanding shares of each class of MACESS Stock and the other conditions to
closing specified in the Reorganization Agreement are satisfied or waived,
then Newco will be merged with and into MACESS, with MACESS being the
surviving corporation (the "Surviving Corporation") of the Merger. The
Surviving Corporation will be named "MACESS Corporation" and will be a wholly
owned subsidiary of SunGard. On the Effective Date, by operation of law, the
separate corporate existence of Newco will cease.
-4-
<PAGE>
Conversion of MACESS Stock. On the Effective Date, each issued and
outstanding share of MACESS Stock (except shares owned by shareholders who
perfect dissenter's rights) will be converted into 0.2783022 shares of SunGard
Common Stock (the "Preliminary Exchange Ratio"), subject to adjustment as
explained below. Under the Merger Agreement, the conversion of MACESS Stock
into shares of SunGard Common Stock will occur automatically on the Effective
Date without any action by the MACESS shareholders.
Promptly upon surrender of their MACESS stock certificates, MACESS
shareholders of record on the Effective Date will be entitled to receive a
certificate representing 90% of the number of shares of SunGard Common Stock
(rounded to the nearest whole number of shares) into which their shares of
MACESS Stock are converted in the Merger. A balance certificate representing
10% of the number of shares of SunGard Common Stock (rounded to the nearest
whole number of shares) into which their shares of MACESS Stock are converted
in the Merger will be placed in escrow and distributed in accordance with the
terms of the Escrow Agreement, the form of which is attached hereto as
Appendix C (the "Escrow Agreement"). See Exchange of Stock Certificates and
Escrow Agreement. Until so surrendered, each outstanding certificate that,
before the Effective Date, represented shares of MACESS Stock will be deemed
to evidence ownership of such shares of SunGard Common Stock.
Exchange Ratio Adjustments. The Preliminary Exchange Ratio is subject to
adjustment to take into account any stock split, stock dividend or similar
recapitalization effected by SunGard between the date of the Reorganization
Agreement and the Effective Date. The Preliminary Exchange Ratio will not be
adjusted as a result of any increase or decrease in the price of SunGard
Common Stock or any other change in the number of outstanding shares of
SunGard Common Stock, such as changes resulting from acquisitions or offerings
or changes resulting from transactions under SunGard's stock option, purchase
and award plans.
Conditions to Closing
In addition to the condition that the Merger must be approved by at least
92% of the outstanding shares of each class of MACESS Stock, the Merger will
occur only if certain additional conditions specified in the Reorganization
Agreement are either satisfied or waived. The additional conditions include
(among others) that on or before the Effective Date: (1) SunGard shall have
received a letter from Coopers & Lybrand L.L.P., SunGard's independent
auditors, to the effect that, based upon the facts known to them as of the
date of such letter, the Merger will qualify for pooling-of-interests
accounting treatment if consummated in accordance with the Merger Agreement
and Reorganization Agreement; (2) the Registration Statement shall have become
effective under the Securities Act of 1933, as amended, no stop order
suspending its effectiveness shall be in effect, and no stop order with
respect thereto shall be pending or threatened; (3) SunGard shall have
received from each affiliate of MACESS other than MACESS and the Principals,
if any, a letter stating that such affiliate will not sell or otherwise
transfer any MACESS stock or SunGard Common Stock at any time during the 30
day period ending on the Closing Date (as defined in the Reorganization
Agreement) and will not sell any shares of MACESS or SunGard received in the
Merger until SunGard shall have published financial results covering at least
30 days of post-Merger combined operations of SunGard and MACESS; (4) the
representations and warranties contained in the Reorganization Agreement shall
not have been false or misleading in any material respect, and all of the
terms and conditions of the Reorganization Agreement to be satisfied or
performed by the Closing Date shall have been substantially satisfied or
performed; (5) no action, suit or other proceeding shall have been instituted
(excluding any action, suit or proceeding initiated by one of the parties), no
judgment or order shall have been issued, and no new law shall have been
enacted, that seeks to or does prohibit or restrain, or that seeks damages as
a result of, the consummation of the Merger; (6) there shall not have been any
material adverse change or material casualty loss affecting MACESS or SunGard
and there shall not have been any material adverse change in the financial
performance of MACESS or SunGard between the date the Reorganization Agreement
was entered into by the parties and the Closing Date; (7) all applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended ("HSP Act"), with respect to the transactions contemplated by
the Reorganization Agreement shall have expired
-5-
<PAGE>
and neither the Federal Trade Commission nor the Antitrust Division of
the Department of Justice shall have required any party to divest itself of
any assets in order to consummate such transactions or taken any actions to
prohibit the consummation of such transactions; (8) SunGard shall have
received a stock pledge agreement from each MACESS shareholder who received
MACESS Stock on December 28, 1994 in exchange for a note payable to MACESS;
and (9) the Escrow Agreement shall have been executed by all required parties.
No assurance can be given as to when, if ever, all of the conditions to
closing the Merger will be satisfied or waived. If all of the conditions to
closing specified in the Reorganization Agreement are satisfied or waived,
then the Merger Agreement and appropriate Articles of Merger will be filed
with the proper officials of the State of Alabama on the date of the Special
Meeting or as soon thereafter as is practicable. The Merger will become
effective on the date such filing is made with the State of Alabama.
Modification, Waiver and Termination
At any time before the Effective Date, whether before or after the Merger
is approved by MACESS shareholders at the Special Meeting, each party to the
Reorganization Agreement and the Merger Agreement may waive any of the terms
or conditions of the Reorganization Agreement or the Merger Agreement, or
agree to any amendment or modification to either agreement, without seeking
further approval of MACESS shareholders, as long as the waiver, amendment or
modification does not result in a decrease in the Preliminary Exchange Ratio
or have a material adverse effect on MACESS shareholders.
At any time before the Effective Date, whether before or after the Merger
is approved by MACESS shareholders at the Special Meeting, the Reorganization
Agreement and the Merger Agreement may be terminated, and the Merger
abandoned, by (1) the mutual written consent of SunGard and MACESS, authorized
by their respective Boards of Directors, (2) written notice from either
SunGard or MACESS to the other if the party giving such notice is not willing
to waive a condition that the other party cannot satisfy on or before November
30, 1995, or (3) written notice from either SunGard or MACESS to the other
party if the Merger shall not have been consummated by November 30, 1995 for
any reason other than a breach by the party giving such notice.
Representations and Warranties
The representations and warranties of MACESS and the Principals and of
SunGard and Newco contained in the Reorganization Agreement include various
representations and warranties typical in such agreements and are included in
Sections 3 through 6 and Section 11 of the Reorganization Agreement, a copy of
which is attached hereto as Appendix A.
Rights of Dissenting Shareholders
Subject to consummation of the Merger, MACESS shareholders may demand to
be paid the fair value of their shares of MACESS Stock in cash, if they follow
the procedures specified in the Alabama Business Corporation Act (the
"ABCA"), Sections 10-2B-13.01, et. seq. of the ABCA (the "ABCA Dissenter's
Statute"), a copy of which is attached to this Information Statement-
Prospectus as Exhibit D. The following summary of the ABCA Dissenter's
Statute is qualified in its entirety by reference to the full text thereof
which is attached as Appendix D to this Information Statement-Prospectus.
SINCE FAILURE TO STRICTLY COMPLY WITH THE STATUTORY PROCEDURES MAY RESULT IN A
TERMINATION OR WAIVER OF THESE STATUTORY RIGHTS, MACESS SHAREHOLDERS WHO MAY
DESIRE TO EXERCISE SUCH RIGHTS ARE URGED TO READ THE ENTIRE ABCA DISSENTER'S
STATUTE.
A shareholder electing to exercise the right of dissent must (i) file
with MACESS, prior to a vote being taken on the Merger at the Special Meeting,
a written objection to the Merger, and (ii) not vote
-6-
<PAGE>
in favor of the Merger. A vote in favor of the Merger Agreement constitutes a
waiver of the right to dissent. If the Merger is approved, within 10 days
after the Special Meeting, the Surviving Corporation must deliver to the
dissenting shareholders satisfying the above noted requirements, a written
notice, (i) stating where the payment demand must be sent, (ii) informing the
holders of the shares to what extent the transfer of the shares will be
restricted after the payment demand is received, (iii) supplying a form for
demanding payment, (iv) setting a deadline date for which the Surviving
Corporation must receive the payment demand from the dissenting shareholder,
and (v) enclosing a copy of the ABCA Dissenter's Statute (a "Dissenters'
Notice"). A dissenting shareholder that is sent a Dissenters' Notice must
demand payment in accordance with the terms of the Dissenters' Notice (the
"Payment Demand"). Any shareholder failing to make such a Payment Demand
within the period specified in the Dissenter's Notice will not be entitled to
receive fair value for shares of MACESS Stock and shall instead be bound by
the terms of the Merger Agreement.
As soon as the Merger is approved or upon receipt of a Payment Demand,
the Surviving Corporation shall offer to pay each dissenting shareholder the
amount that the Surviving Corporation estimates to be the "fair value" of such
shareholder's shares. Within 20 days after demanding payment of fair value
for shares of MACESS Stock, a dissenting shareholder must submit the
certificate or certificates representing his shares of MACESS Stock to the
Surviving Corporation for notation thereon that such demand has been made. If
a dissenting shareholder fails to submit certificates for notation, the
Surviving Corporation may terminate such shareholder's rights under Section
10-2B-13.24 of the ABCA unless a court of competent jurisdiction otherwise
directs for good and sufficient cause shown. Upon receiving the certificate
or certificates, the Surviving Corporation shall pay each dissenter the fair
value of his shares, plus accrued interest. Upon receiving payment, a
dissenting shareholder ceases to have any interest in the shares.
Any dissenting shareholder making such a Payment Demand will thereafter
be entitled only to payment of fair value in accordance with the ABCA
Dissenter's Statute and will not be entitled to vote or exercise any other
rights as a shareholder of MACESS; provided, however, that shareholder status
will be restored and the right to receive fair value for shares of MACESS
Stock will cease (without prejudice to any corporate proceedings that may have
been taken in the interim) if MACESS does not consummate the Merger within 60
days after the date set for the submission of the Payment Demand.
If, within 30-days of the Dissenter's Notice regarding the fair value of
the dissenter's shares, the dissenting shareholder disagrees with the
Surviving Corporation's determination of fair value, then the dissenting
shareholder may notify the Surviving Corporation in writing, within such 30-
day period, of the dissenting shareholder's estimate of the fair value of the
shares (the "Fair Value Notice"). Within 60 days of the receipt of the Fair
Value Notice, if the fair value remains unsettled, the Surviving Corporation
shall file a petition in the Circuit Court in Jefferson County, Alabama (the
county where the principal office of MACESS is located), requesting that the
fair value of the shares of MACESS Stock owned by the dissenting shareholder
be found and determined. If the Surviving Corporation fails to institute a
proceeding within 60 days of the Fair Value Notice, it shall pay each
dissenter whose demand remains unsettled, the amount demanded in the Fair
Value Notice.
If a petition is filed, all dissenting shareholders, wherever residing,
shall be made parties to the proceeding as an action against their shares. A
copy of the petition will be served on each dissenting shareholder. The court
may appoint one or more persons as appraisers to hear evidence and recommend a
decision on the question of fair value. All shareholders who are parties to
the proceeding are entitled to judgment against the Surviving Corporation for
the amount the court finds to be the fair value of their shares of MACESS
Stock, plus accrued interest. The judgment shall be payable only upon and
concurrently with surrender to the Surviving Corporation of the certificate or
certificates representing shares of MACESS Stock. Upon payment of the
judgment, the dissenting shareholders shall cease to have any interest in such
shares.
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<PAGE>
The costs and expenses of a proceeding to determine fair value shall be
determined by the court and assessed against the Surviving Corporation;
provided, however that all or any part of the costs and expenses may be
assessed as the court deems equitable against any or all of the dissenting
shareholders who are parties to the proceeding to whom the Surviving
Corporation shall have made an offer to pay for the shares, if the court finds
that such shareholders' failure to accept such offer was arbitrary or
vexatious or not in good faith.
Shareholders who receive cash for the fair value of their shares of
MACESS Stock upon the exercise of the dissenters' rights will realize taxable
gain or loss for federal income tax purposes. Each shareholder of MACESS is
urged to consult with his own personal tax and financial advisors concerning
federal income tax consequences of the exercise of dissenters' rights, as well
as any applicable state, local, foreign or other tax consequences, based upon
such shareholder's own particular facts and circumstances.
Under the Merger Agreement, SunGard is responsible for paying all cash
amounts due to dissenting MACESS shareholders.
Certain Federal Income Tax Consequences
The following summary of certain federal income tax consequences of the
Merger has been prepared by counsel to SunGard and is based upon certain
representations by MACESS and SunGard and certain assumptions. This summary is
included solely for the general information of MACESS shareholders. BECAUSE
THE TAX CONSEQUENCES FOR ANY PARTICULAR SHAREHOLDER MAY BE AFFECTED BY MATTERS
NOT TAKEN INTO ACCOUNT IN THIS SUMMARY, EACH SHAREHOLDER SHOULD CONSULT HIS
OWN TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES (INCLUDING ANY STATE AND
LOCAL TAX CONSEQUENCES) RESULTING FROM THE MERGER AND FROM ANY LATER
DISPOSITION OF SUNGARD COMMON STOCK ACQUIRED PURSUANT TO THE MERGER, OR
RESULTING FROM THE RECEIPT OF CASH AFTER EXERCISE OF DISSENTER'S RIGHTS.
Provided that the Merger qualifies as a statutory merger under applicable
state law and that holders of no more than 50%/(a)/ of the shares of MACESS
Stock exercise dissenter's rights: (1) the Merger will constitute a
reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended (the "Code"); (2) no gain or
loss will be recognized by SunGard upon the exchange of MACESS Stock solely in
exchange for SunGard Common Stock; (3) no gain or loss will be recognized by
MACESS shareholders upon the exchange of their MACESS Stock solely for SunGard
Common Stock; (4) the basis of SunGard Common Stock received by MACESS
shareholders in the Merger will be the same as the basis of their MACESS Stock
surrendered in exchange therefor; (5) for capital gains purposes, the holding
period of SunGard Common Stock received by MACESS shareholders in the Merger
will include the period during which the MACESS Stock surrendered in exchange
therefor was held, provided that such MACESS Stock is held as a capital asset
on the Effective Date; and (6) cash received for MACESS Stock by a MACESS
shareholder who exercises dissenter's rights will be treated as payment for
such stock, subject to the conditions and limitations of Section 302 of the
Code.
-------------------------
(a) SunGard's obligation to consummate the Merger, however, is subject to the
condition (which it may waive) that the Merger be approved by at least
92% of the outstanding shares of each class of MACESS Stock. See
Conditions to Closing.
Conduct of Business Before Closing
The Reorganization Agreement provides that, between September 29, 1995
(the date of the Reorganization Agreement) and the Effective Date, except with
SunGard's consent, the Principals and MACESS will comply with certain
requirements, summarized as follows:
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1. MACESS will, and the Principals will cause MACESS to, conduct its
business in a diligent manner, refrain from making any material change in
its business practices, and use its best efforts to preserve its business
organization intact, keeping available the services of its current officers
and employees, and maintaining the good will of its customers and other
persons having business relations with MACESS. Each Principal involved in
MACESS' daily business operations will remain actively involved in MACESS'
business consistent with past practices and, upon SunGard's request, will
consult with SunGard as to the management of MACESS' business and affairs.
MACESS will deliver monthly financial statements to SunGard.
2. Except in the ordinary course of business consistent with past
practices, MACESS will not, and the Principals will not permit MACESS to,
create any encumbrance upon any of its assets, incur any debt, make any
loan, guarantee any third party obligation, commit for any capital
expenditure, dispose of any assets, waive any right, assume or enter into
any contract (other than the Reorganization Agreement, the Merger Agreement
and any other contract contemplated thereby), increase employee
compensation or benefits, or do anything else outside the ordinary course
of business consistent with past practices.
3. Even in the ordinary course of business consistent with past
practices, MACESS will not, and the Principals will not permit MACESS to,
borrow or lend any funds, purchase any goods or services, lease any
equipment, incur any debt, or enter into any contract (excluding customer
contracts and related commitments entered into in the ordinary course of
business consistent with past practices) or other transaction involving, in
any single case, an amount exceeding $25,000 or, in the aggregate, an
amount exceeding $100,000.
4. MACESS will not, and the Principals will not permit MACESS to, cause
a breach or default under any of its contracts, insurance policies,
licenses or permits, adopt any new employee benefit plan, participate in
any merger, consolidation or reorganization, begin to engage in any new
type of business, acquire the business or any bulk assets of any third
party, completely or partially liquidate or dissolve, or terminate any
material part of its business.
5. MACESS will, and the Principals will cause MACESS to, maintain its
real estate and fixed personal property assets in good condition, maintain
its insurance policies in full force and effect, repair or replace any of
its assets that is damaged, destroyed, lost or stolen, comply with all
applicable laws, properly file all tax returns, fully pay when due all
taxes payable by it, maintain corporate existence and good standing in
applicable jurisdictions, and refrain from amending its charter or bylaws.
6. MACESS will not, and the Principals will not permit MACESS to,
redeem, retire or purchase, or create, grant or issue any contracts,
options, warrants or other rights with respect to, any shares of MACESS
Stock, or create, grant or issue any stock options, stock appreciation
rights, phantom shares or other similar rights. MACESS and each Principal
will maintain all of their shares of MACESS Stock free of any claims or
encumbrances, and will not sell, dispose of or encumber any such shares.
Neither MACESS nor any Principal will buy, sell or engage in any other
transaction involving SunGard Common Stock other than in connection with
the Merger.
7. Neither MACESS nor any Principal (nor any officer, employee,
representative or agent of MACESS) will, directly or indirectly, solicit,
initiate, encourage or respond to inquiries or proposals from, or
participate in any discussions or negotiations with, or provide any non-
public information to, any person or group (other than SunGard) concerning
any sale of any material portion of MACESS' assets, any sale of shares of
MACESS Stock, or any merger, consolidation or similar transaction involving
MACESS. MACESS and the Principals will advise SunGard of the terms of any
such inquiry or proposal received by them.
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SunGard and Newco and, subject to the approval of the Merger by MACESS'
shareholders, MACESS each agreed to take such action as is required to
consummate the Merger and the other transactions contemplated thereby as of
the earliest practicable date and to refrain from taking any action that would
impair the prospect of completing the Merger. In addition, MACESS, the
Principals, SunGard and Newco agreed to refrain from knowingly taking any
action that would prevent the Merger from qualifying for pooling-of-interests
accounting treatment. SunGard is not prevented under the Merger Agreement or
the Reorganization Agreement from proceeding with other mergers or
acquisitions, regardless of whether SunGard Common Stock or other securities
are used as the consideration.
Fees and Expenses
Each party will pay all fees and expenses incurred by it in consummating
the Merger. In the Reorganization Agreement, MACESS agreed not to incur
legal, accounting and investment banking fees in connection with the Merger in
excess of $775,000.
In order to induce SunGard to enter into the Reorganization Agreement and
the Merger Agreement, MACESS will make the following payments to SunGard (and
Mr. Featheringill guarantees such payments) if the Merger is not consummated
solely due to the failure of the condition that at least 92% of the
outstanding shares of MACESS Common Stock approve the Merger: (i) $6,000,000;
and (ii) if, within one year after the date of the Reorganization Agreement
(September 29, 1995), a company other than SunGard acquires a majority of the
outstanding capital stock of MACESS or assets of MACESS having a market value
equal to 50% or more of the value of all of the assets of MACESS, or MACESS
files a registration for a public offering of its securities (a "Later Sale"),
an additional cash payment equal to 25% of the following amount: the
aggregate consideration received by MACESS and/or its shareholders in such
Later Sale, minus $57,000,000 (subject to adjustment if less than all of
MACESS' stock or assets is involved in the Later Sale), minus $6,000,000.
Accounting Treatment
It is anticipated that the Merger will be accounted for by SunGard under
the pooling-of-interests method of accounting. Under that method of
accounting: (1) the historical book values of the assets, liabilities and
stockholders' equity of MACESS will be carried over on the consolidated
balance sheet of SunGard, and no goodwill will be created; (2) if material,
SunGard will include in its consolidated financial statements the operating
results of MACESS for the entire year during which the Merger is consummated,
and, if material, SunGard will combine the operating results of MACESS and
restate its previously reported operating results for prior periods; and (3)
certain expenses incurred by SunGard, MACESS and the MACESS shareholders to
effect the Merger, currently estimated at a total of $1,800,000, will be
charged against SunGard's consolidated income in the quarter during which the
Merger is consummated and will not be deductible for income tax purposes.
The consummation of the Merger is subject to the condition that SunGard
receives a letter from Coopers & Lybrand L.L.P. to the effect that, based upon
the facts known to them as of the date of such letter, the Merger will qualify
for pooling-of-interests accounting treatment if consummated in accordance
with the Reorganization Agreement and the Merger Agreement.
In the Reorganization Agreement, each Principal has agreed that (a)
before closing of the Merger, he will not sell, dispose of or encumber, or
otherwise reduce his risk relating to, any of his MACESS Common Stock, and (b)
after the Merger is consummated, he will not sell, dispose of or encumber
(except for pledges in connection with fully recourse bank loans), or
otherwise reduce his risk relating to, any SunGard Common Stock he receives as
a result of the Merger, until SunGard shall have published financial results
covering at least 30 days of post-Merger combined operations of SunGard and
MACESS. Such restrictions are required in connection with pooling-of-
interests transactions.
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Regulatory Matters
The HSR Act provides that certain acquisition transactions (including the
Merger) may not be consummated unless certain information has been furnished
to the Antitrust Division of the Department of Justice ("Justice") and the
Federal Trade Commission (the "FTC") and certain waiting period requirements
have been satisfied. The required information was furnished to Justice and
the FTC by SunGard on October 4, 1995 and by MACESS on October 3, 1995,
respectively. At any time before or after the consummation of the Merger,
Justice, the FTC or some other person could seek to enjoin or rescind the
Merger on antitrust grounds. See Conditions to closing. Other than certain
filings under certain federal securities laws and certain state securities or
"blue sky" laws, there are no other federal or state regulatory requirements
that must be complied with or approval obtained in connection with the Merger.
Management of MACESS After Closing and Other Employment Matters
Post-Closing Management. MACESS will be the Surviving Corporation of the
Merger, and, after the Effective Date, will continue to own and operate the
business conducted by MACESS before the Effective Date. SunGard intends that
the operations of the Surviving Corporation after the Effective Date will be
conducted substantially the same as those of MACESS before the Effective Date,
with present MACESS management personnel retained except that William W.
Featheringill, Chairman and Chief Executive Officer of MACESS, will resign
from his positions effective as of the Effective Date.
Consistent with SunGard's management of its other subsidiaries, the Board
of Directors of the Surviving Corporation will consist of Kenneth R. Adams,
Lawrence A. Gross and Michael J. Ruane, and the officers of the Surviving
Corporation will include certain of the current officers of MACESS, T. Alan
Ritchie, President, and W. Sanders Pitman, Vice President, plus Kenneth R.
Adams, who will become Chief Executive Officer, Andrew P. Bronstein and
Michael J. Ruane, who will each become Assistant Vice President and Assistant
Secretary, and Lawrence A. Gross, who will become Assistant Vice President and
Secretary. Kenneth R. Adams, formerly the Chief Executive Officer of the
SunGard Recovery Services Group, is currently the Chief Executive Officer of
the SunGard Technology Systems Group, the group comprised of MACESS, Intelus
Corporation and any related businesses that SunGard has acquired or may
acquire. Andrew P. Bronstein is the Vice President and Controller of SunGard,
Lawrence A. Gross is the Vice President and General Counsel of SunGard, and
Michael J. Ruane is the Vice President-Finance and Chief Financial Officer of
SunGard.
Other Employees. All employees of MACESS as of the Effective Date will
be employed by the Surviving Corporation after the Effective Date on an "at-
will" basis and for the same salaries or wages in effect as of the date of the
Reorganization Agreement
Employee Benefit Plans. After the Effective Date, MACESS' existing group
benefit plans will be replaced with SunGard's group benefit plans except where
cost factors or unusual circumstances dictate otherwise. In addition, the
Surviving Corporation will adopt SunGard's savings plan and SunGard's employee
stock purchase plan. MACESS' existing savings and employee stock ownership
plan will be "frozen" as of the Effective Date, and, as soon as is
practicable, the full accounts of all MACESS employees thereunder will be
transferred directly to the accounts of those employees under SunGard's
savings plan.
Interests of Certain Persons in the Merger. Of the outstanding MACESS
Stock, approximately 96% is beneficially owned by persons who are employed by
MACESS, including all of its officers and directors. With the exception of
Mr. Featheringill, all MACESS employees as of the Effective Date will be
employed by the Surviving Corporation. See Post-Closing Management and Other
Employees above in this section. As of the Effective Date, Mr. Featheringill
will resign from his positions as Chairman and Chief Executive Officer of
MACESS. The Surviving Corporation will provide Mr. Featheringill an office and
the services of a
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secretary for up to one year after the Effective Date in exchange for his
agreement to provide consulting services to the Surviving Corporation on an
as-needed basis during that time. This consulting arrangement may be extended
beyond the one year term upon the mutual agreement of the Surviving
Corporation and Mr. Featheringill.
Exchange of Stock Certificates
As soon as is practicable after the Effective Date, instructions for
surrendering outstanding certificates that immediately before the Effective
Date represented shares of MACESS Stock will be mailed to each MACESS
shareholder of record. Upon the surrender of such certificate to the Norwest
Bank Minnesota, N.A. (the "Exchange Agent") in accordance with such
instructions, the Exchange Agent shall exchange such certificate for (a) a new
certificate representing 90% of such number of shares of SunGard Common Stock
into which the shares of MACESS Stock represented by such certificate have
been converted in accordance with the Merger Agreement ("Closing Stock"),
which shall be promptly delivered to the holder, and (b) a new certificate for
the balance of such number of shares of SunGard Common Stock into which the
share of MACESS Stock represented by such certificate have been converted
("Escrowed Stock"), which shall be held in escrow and distributed in
accordance with the terms of the Escrow Agreement. If applicable, such
certificates shall be accompanied by any distributions due with respect to
shares of SunGard Common Stock that were paid to SunGard's stockholders of
record as of a date between the Effective Date and the date of distribution of
either the certificate representing the Closing Stock or the certificate
representing the Escrowed Stock.
Until surrendered in accordance with the foregoing, each outstanding
certificate that immediately before the Effective Date represented shares of
MACESS Stock shall be deemed to evidence ownership of the number of shares of
SunGard Common Stock into which the shares of MACESS Stock represented by such
certificate have been converted in accordance with the Merger Agreement,
subject to the escrow requirement described above; provided, however, that any
such certificate that is not properly submitted for exchange to SunGard or the
Exchange Agent within three years after the Effective Date shall no longer
evidence ownership of shares of Closing Stock or Escrowed Stock and all rights
of the holder of such certificate, as a stockholder of SunGard with respect to
the shares previously evidenced by such certificate, shall cease.
No fractional shares of SunGard Common Stock will be issued. Instead,
the number of shares of SunGard Common Stock to be issued to each shareholder
of MACESS in accordance with the Merger Agreement will be rounded off to the
nearest whole number of shares of SunGard Common Stock.
PLEASE DO NOT SEND IN ANY CERTIFICATES FOR YOUR MACESS STOCK AT THIS
TIME.
Escrow Agreement
Pursuant to the Escrow Agreement, the form of which is attached as
Appendix C, to be entered into among MACESS, SunGard, Newco, the Exchange
Agent and all shareholders of MACESS who sign the Escrow Agreement, the
Exchange Agent will maintain an account for each MACESS shareholder containing
such shareholder's Escrowed Stock. The Escrowed Stock will be distributed to
the MACESS shareholders one year after the Effective Date less the shares and
cash having a value equal to the aggregate amount set forth in any payment
notices delivered by SunGard under Section 3 of the Escrow Agreement for
indemnification matters under Sections 15 and 6.3 of the Reorganization
Agreement. The Escrow Agreement may be amended to add other provisions
relating to the Escrow Agent by the mutual consent of SunGard, Newco, MACESS,
the Escrow Agent and the Principals and any such amendment(s) shall be binding
on all parties to the Escrow Agreement.
The Escrow Agreement also will be signed by Mr. Featheringill as
Stockholders Agent. In his capacity as Stockholders Agent under the Escrow
Agreement and the Reorganization Agreement, Mr. Featheringill will have the
authority to act on behalf of all MACESS shareholders with respect to escrow
and indemnification matters and for the purpose of sending and receiving
notices. Mr. Featheringill's actions in this capacity will be binding upon all
MACESS shareholders.
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Resales of SunGard Common Stock
The shares of SunGard Common Stock to be issued in the Merger have been
registered under the Securities Act and will be freely transferable, except
for shares received by those shareholders who may be deemed to be "affiliates"
of MACESS, as that term is defined in Rule 145 under the Securities Act. Rule
145 limits the amount of SunGard Common Stock that such persons may sell
during any three-month period and specifies certain other restrictions on
resale. In the Reorganization Agreement, the Principals agreed not to sell or
otherwise transfer any of the SunGard Common Stock they receive in connection
with the Merger, except in compliance with the Securities Act and any other
applicable securities laws. In addition, the Principals have agreed that they
will not sell any shares of SunGard Common Stock received in the Merger until
SunGard shall have published financial results covering at least 30 days of
post-Merger combined operations of SunGard and MACESS. See Conditions to
Closing.
Description of Capital Stock
SunGard Capital Stock
The authorized capital stock of SunGard consists of 60,000,000 shares of
SunGard Common Stock and 5,000,000 shares of preferred stock, par value $.01
per share ("SunGard Preferred Stock"). As of September 30, 1995, there were
approximately 38,330,000 shares of SunGard Common Stock outstanding. No
shares of SunGard Preferred Stock have been issued.
The holders of SunGard Common Stock are entitled to one vote per share.
Subject to the powers, preferences, rights, qualifications, limitations and
restrictions of any series of SunGard Preferred Stock that may be issued,
holders of SunGard Common Stock are entitled, among other things, to (1)
dividends if, as and when declared by the Board of Directors out of funds
legally available therefor, and (2) to a ratable share in the distribution of
assets legally available therefor upon the liquidation, dissolution or
winding-up of the corporation after payment of debts and expenses.
As of September 30, 1995, there were approximately 1,870 holders of
record of SunGard Common Stock.
The Board of Directors of SunGard may, without action of the
stockholders, issue SunGard Preferred Stock from time to time in one or more
series with distinctive dividend, liquidation, conversion, voting or other
rights and preferences which could adversely affect the voting power or other
rights of the holders of SunGard Common Stock. It is not possible to state
the actual effect of the authorization of SunGard Preferred Stock upon the
rights of the holders of SunGard Common Stock until the Board of Directors
determines the specific rights of the holders of a series of SunGard Preferred
Stock. Issuance of SunGard Preferred Stock, while providing desirable
flexibility in connection with possible acquisitions and other corporate
purposes, could make it more difficult for a third party to acquire a majority
of the outstanding voting stock of SunGard. Although SunGard has no present
plans to issue any shares of SunGard Preferred Stock, there can be no
assurance that SunGard will not do so in the future.
The transfer agent and registrar for SunGard Common Stock is Norwest Bank
Minnesota, N.A.
MACESS Capital Stock
MACESS is authorized by its Articles of Incorporation to issue 1,500,000
shares of MACESS Common Stock, of which 1,430,100 shares were issued and
outstanding as of the Record Date and were held of record by ten shareholders,
and 6,000,000 shares of MACESS Class A Stock, of which 5,720,400 were issued
and outstanding as of the Record Date and were held by eleven shareholders.
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Holders of shares of MACESS Common Stock are entitled to one vote per
share on all matters to be voted on by shareholders. MACESS shareholders are
not entitled to cumulate their votes in the election of directors. The holders
of MACESS Common Stock are entitled to receive such dividends, if any, as may
be declared by the Board of Directors in its discretion out of funds legally
available therefor. Subject to the rights of any preferred stock outstanding,
upon liquidation or dissolution of MACESS, the holders of MACESS Common Stock
are entitled to receive, on a pro rata basis, all assets remaining for
distribution to shareholders. The MACESS Common Stock does not have preemptive
or other subscription rights or other conversion rights (or redemption or
sinking fund provisions). All of the outstanding shares of MACESS Common Stock
are fully paid and nonassessable.
The relative rights, privileges and limitations of the MACESS Class A
Stock are in all respects identical, share for share, with the rights
privileges and limitations of the MACESS Common Stock, except that the voting
power for the election of the directors and for all other purposes is vested
exclusively in the holders of the MACESS Common Stock except as otherwise
provided by law. All of the outstanding shares of MACESS Class A Stock are
fully paid and nonassessable.
MACESS acts as its own transfer agent and registrar with respect to the
MACESS Stock.
Comparison of the Rights of
Stockholders of SunGard and MACESS
Upon consummation of the Merger, all MACESS shareholders (other than
MACESS shareholders who perfect dissenter's rights) will become stockholders
of SunGard, and their rights as stockholders will be governed by the Delaware
General Corporation Law and by SunGard's Amended and Restated Certificate of
Incorporation.
Although the Alabama and Delaware corporation laws are substantially
similar, there are some differences. Such differences may affect the
substantive rights which the shareholders of MACESS are afforded under Alabama
law, and may impair the ability of minority shareholders to affect those
matters requiring shareholder approval. While it would be impractical to
state all of the differences between Alabama and Delaware corporation laws,
the following is a summary of certain differences which may be of interest to
shareholders.
By-laws. Under Alabama law, the board of directors or the shareholders
have the power to adopt the initial bylaws of the corporation unless this
power is reserved to the shareholders in the articles of incorporation. In
addition, both the board of directors and the shareholders are vested with the
power to amend, repeal or add new bylaws unless this power is reserved to the
shareholders by the articles of incorporation. However, the board of
directors may not amend, repeal or add new bylaws establishing what
constitutes a quorum at shareholders' meetings and may not make a change
regarding voting requirements at shareholders' meetings. Under the Delaware
law, the power to adopt the original bylaws is vested with the incorporators
or the initial directors named in the certificate of incorporation. After
receipt of any payment for stock, however, the power to adopt, amend or repeal
bylaws rests with the stockholders. The certificate of incorporation may
confer such power upon the directors, but the stockholders cannot be divested
of their right to amend, adopt or repeal bylaws.
Power to Sell, Mortgage or Pledge Assets. Under Delaware law, a
corporation may not sell, lease or exchange all or substantially all of its
property and assets without authorization by a resolution adopted by a
majority of the outstanding stock of the corporation entitled to vote thereon.
Delaware law provides that a corporation may, however, mortgage or pledge the
corporation's assets without stockholder authorization. Alabama law allows a
corporation to mortgage, pledge or dedicate all of its
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assets without the approval of its shareholders; however, the bonded
indebtedness of a corporation may not be increased without shareholder
approval.
Under Alabama law, a shareholder of MACESS currently has the right to
dissent from a sale or disposition of all or substantially all of the
corporate assets, and receive the appraised value of his shares, if the sale
or disposition is not in the regular course of business. Under Delaware law,
the stockholders do not have the right to dissent from the sale, lease or
exchange of all property and assets of the corporation unless such right is
expressly provided by the certificate of incorporation.
Merger. Under Delaware law, a majority vote of the outstanding shares
entitled to vote must approve a merger. No vote of the stockholders of a
corporation surviving a merger is required under Delaware law if (1) the
number of shares to be issued in the merger does not exceed twenty percent of
the shares of the surviving corporation outstanding immediately prior to such
issuance, (2) the merger effects no amendment to the certificate of
incorporation of the surviving corporation, and (3) the merger effects no
change in shares outstanding immediately prior to the merger. Under Alabama
law, except for the merger of certain parent corporations with subsidiaries,
the shareholders of a corporation which is a party to a merger must approve
the merger by an affirmative vote of at least two-thirds of the outstanding
shares, unless the articles of incorporation provide for a majority or greater
vote of the shareholders. Accordingly, it may be less difficult to obtain the
majority vote necessary to approve a merger under Delaware law than the two-
thirds vote required under Alabama law.
Appraisal Rights. Under Alabama law, shareholders of MACESS currently
have appraisal rights upon the merger or sale of all or substantially all of
the assets of MACESS. In Alabama, shareholders have the right to dissent and
demand the appraised value of their shares in such transactions. See The
Proposed Merger--Rights of Dissenting Shareholders.
In contrast, under Delaware law, there is no right to receive the
appraised value of shares with respect to (a) a merger involving the sale of
all or substantially all of a corporation's assets, (b) a merger by a
corporation, the shares of which are either listed on a national securities
exchange or designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc. or
widely held (by more than 2,000 shareholders) if holders of such shares
receive shares of the surviving corporation or a listed or designated or
widely held corporation, or (c) shareholders of a corporation surviving a
merger if no vote or such shareholders is required to approve the merger.
Voting by Ballot. Under Delaware law, all elections of directors are by
written ballot unless otherwise provided in the corporation's certificate of
incorporation. Alabama law contains no provision concerning voting by written
ballot.
Classified Board. Classification of directors is permitted under both
Alabama and Delaware law. A classified board is divided into two or three
classes and the terms of each class of directors are staggered. Therefore,
the shareholders elect a portion, rather than all, of the directors at each
annual meeting. The existence of a classified board is generally viewed as
having an anti-takeover effect, and as impairing cumulative voting. Alabama
law requires a minimum of nine directors for classification, as opposed to
Delaware law, which requires no minimum.
Removal of Directors. Under Alabama and Delaware law, a director or the
entire Board of Directors can be removed with or without cause by a majority
of the outstanding shares entitled to vote at an election of directors.
However, in Delaware, a director of a corporation with a classified board of
directors can be removed only for cause unless the certificate of
incorporation of the corporation otherwise provides.
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Inspection of Shareholder List. Any stockholder of a Delaware
corporation has the right upon written demand under oath to inspect the
stockholder list for a purpose reasonably related to that person's interest as
a stockholder. Under Alabama law, however, the right to inspect a
corporations's shareholder list is restricted to (a) persons holding five
percent or more of the corporation's voting shares or (b) persons who have
been holders of record for at least six months.
Books and Records, Financial Reports. Alabama law requires that at least
one complete set of the corporation's books and records of account be
maintained at its principal office in Alabama and that the corporation mail to
each shareholder a financial statement within 120 days after the close of the
corporation's fiscal year. These requirements do not exist under Delaware
law, although federal securities laws to which SunGard is presently subject
require that annual financial and other records be sent to shareholders.
Dissolution. Under Alabama law, unless the articles of incorporation
provide for a voting requirement of a majority or greater number of
shareholders, the authorization of the dissolution of a corporation must be
approved by shareholders holding at least two-thirds of the shares entitled to
vote. By contrast, Delaware law requires only a majority vote to authorize a
corporation's dissolution.
Dividends. Alabama law generally allows the payment of cash dividends to
the extent that the payment will not cause the corporation to become
insolvent. Delaware law is more restrictive, in that it restricts cash
dividends to be paid (a) out of "surplus," which consists of the excess of the
net assets of the corporation over its capital; or (b) if there is no surplus,
out of net profits for the fiscal year in which the dividend is declared
and/or the preceding fiscal year.
Anti-Takeover Law. Delaware law prohibits any corporation from engaging
in certain business combinations with an interested stockholder (generally the
owner of 15% or more of the outstanding voting stock of a corporation) for a
period of three years following the date such stockholder became an interested
stockholder, unless (a) the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder before the stockholder became
an interested stockholder, (b) the interested stockholder acquired at least
85% of the voting stock of the corporation in the transaction in which the
stockholder became an interested stockholder, or (c) the business combination
is approved by the board of directors and by the affirmative vote of the
holders of at least two-thirds of the outstanding voting stock (other than
stock owned by the interested shareholder) of the corporation. Delaware law
permits a corporation in its original certificate of incorporation to
expressly elect not to be governed by the Delaware anti-takeover law.
The effect of the Delaware law is to delay for three years business
combinations with acquirors not approved by the board of directors unless the
acquiror is able to obtain in his offer 85% of the stock of the corporation or
a vote of two-thirds of the shareholders other than the acquiror exempts a
given business combination from the restrictions of the anti-takeover law. As
a result, the Delaware anti-takeover law may have the effect of discouraging
tender offers or other acquisition proposals respecting SunGard even though
such offers or acquisition proposals might be favorable to the shareholders.
Alabama law does not have any comparable statute or anti-takeover law;
however, under Alabama law, unless the articles of incorporation provide
otherwise, the affirmative vote of the holders of two-thirds of the
outstanding shares of capital stock is required to approve most types of
business combinations.
Increase of Authorized Capital Stock or Bonded Indebtedness. The
Constitution of Alabama of 1901 provides that the authorized capital stock and
bonded indebtedness of an Alabama corporation may be increased only at a
meeting of shareholders called by giving 30 days prior written notice.
Delaware law also provides that a majority of a corporation's stockholders
entitled to vote must approve an increase in the corporation's authorized
capital stock; however, under Delaware law, notice of a meeting of
stockholders for the purpose of increasing the authorized capital stock of a
corporation or
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for any other purpose may be given no fewer than 10 days and no more than 60
days before the meeting. Consequently, a Delaware corporation may increase
its authorized capital stock on as few as 10 days notice to stockholders,
whereas 30 days is required under Alabama law. Further, under Delaware law
there is no similar provision to the Alabama constitutional requirement of
shareholder approval to increase the authorized bonded indebtedness of the
corporation.
Recent Developments of SunGard
On September 28, 1995, SunGard and Renaissance Software Inc., a
California corporation ("Renaissance"), announced the signing of an Agreement
and Plan of Merger and a related Agreement and Plan of Reorganization by and
among Renaissance, the four principal shareholders of Renaissance, SunGard and
a wholly owned subsidiary of SunGard providing for the merger (the
"Renaissance Merger") of such subsidiary with and into Renaissance with
Renaissance surviving as a wholly owned subsidiary of SunGard. Renaissance's
principal business is developing and licensing software used by financial
institutions, banks and other market makers in the trading of over-the-counter
interest rate derivative instruments. The closing of the Renaissance Merger
is subject to certain conditions, including, among other conditions, certain
regulatory approvals and the approval of the shareholders of Renaissance. The
closing is expected to occur in November 1995.
On August 31, 1995, SunGard completed the acquisition of Intelus
Corporation, a Delaware corporation ("Intelus"), whereby Intelus became a
wholly owned subsidiary of SunGard in accordance with an Agreement and Plan of
Merger and a related Agreement and Plan of Reorganization dated August 23,
1995 (the "Intelus Merger"). Intelus' principal business is providing work-
flow management and document imaging systems to the healthcare and financial
services industries, with an emphasis on hospitals.
MACESS and Intelus will form the nucleus of a new business group called
SunGard Technology Systems headed by Kenneth R. Adams who was chief executive
officer of SunGard's Recovery Services Group since 1988. Michael F.
Mulholland, president and chief operating officer of SunGard Recovery Services
Inc. has succeeded Mr. Adams as the chief executive officer of the Recovery
Services Group. With the addition of Renaissance, SunGard is also reorganizing
its trading and risk management businesses under the SunGard Trading Systems
Group, formerly known as the SunGard Capital Markets Group. The SunGard
Trading Systems Group will continue to be led by Cristobal I. Conde.
Unaudited Pro Forma Combined Condensed Financial Information
The Unaudited Pro Forma Combined Condensed Income Statement Data assumes
that the MACESS Merger, the Renaissance Merger and the Intelus Merger
(collectively, the "Mergers") had occurred on January 1, 1992, combining the
results of SunGard, MACESS, Renaissance and Intelus for the six months ended
June 30, 1995 and 1994 and for each of the three years in the period ended
December 31, 1994, with each of the Mergers accounted for on a pooling-of-
interests basis. The pro forma information is provided for illustrative
purposes only and is not necessarily indicative of the results of operations
that actually would have been obtained if the Mergers had been effected on the
dates indicated or of the results that may be obtained in the future.
Unaudited pro forma combined condensed balance sheet data as of June 30, 1995
and December 31, 1994 are not provided herein
-17-
<PAGE>
because the Mergers would not have had a material effect on SunGard's
historical consolidated balance sheets. During the nine month period ended
September 30, 1995, SunGard has completed five business acquisitions accounted
for as purchases. Pro forma data for these acquisitions are not presented
since the financial condition and results of operations as reported in
SunGard's historical financial statements would not be materially different.
The Unaudited Pro Forma Combined Condensed Income Statement Data should
be read in conjunction with the historical financial statements and the
related notes thereto of SunGard, MACESS, Renaissance and Intelus, all of
which are included or incorporated by reference in this Information Statement-
Prospectus.
With respect to the following financial information, you also should
refer to the Summary--Comparative Per Share Data on Page (viii) of this
Information Statement-Prospectus.
Unaudited Pro Forma Combined Condensed Income Statement Data
<TABLE>
<CAPTION>
Six Months Ended
June 30, Years Ended December 31,
------------------- -----------------------------------
1995 1994 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues (as reported):
SunGard $246,609 $206,744 $437,190 $381,372 $324,570
MACESS 6,515 5,597 10,315 6,470 1,872
Renaissance/(1)/ 8,156 5,325 12,527 10,271 9,054
Intelus 7,111 3,694 6,965 6,296 4,795
-------- -------- -------- -------- --------
Pro Forma Combined $268,391 $221,360 $466,997 $404,409 $340,291
======== ======== ======== ======== ========
Net income (as reported):
SunGard $ 23,339 $ 19,841 $ 43,087 $ 38,474/(5)/ $ 25,808
MACESS 1,061 1,518 2,030 1,108 119
Renaissance/(1)/ 1,923 1,011/(6)/ 2,377 985/(6)/ 1,418
Intelus (94) 144 (1,052) 662 21
-------- -------- -------- -------- --------
Pro Forma Combined/(2)/ $ 26,229 $ 22,514 $ 46,442 $ 41,229 $ 27,366
======== ======== ======== ======== ========
Fully diluted net income
per common share/(3)/:
SunGard (as reported) $ 0.61 $ 0.51 $ 1.12 $ 1.04/(5)/ $ 0.79
======== ======== ======== ======== ========
Pro Forma Combined $ 0.61 $ 0.53 $ 1.08 $ 1.00 $ 0.75
======== ======== ======== ======== ========
Shares used to compute fully
diluted net income per
common share:
SunGard (as reported)/(4)/ 38,348 38,534 38,502 38,352 37,982
MACESS 1,990 1,990 1,990 1,990 1,990
Renaissance 1,513 1,513 1,513 1,513 1,513
Intelus 810 810 810 810 810
-------- -------- -------- -------- --------
Pro Forma Combined 42,661 42,847 42,815 42,665 42,295
======== ======== ======== ======== ========
</TABLE>
/(1)/ The fiscal year of Renaissance ends March 31. For purposes of the pro
forma financial information presented above, the fiscal years ended March
31, 1995, 1994 and 1993 are included in the 1994, 1993 and 1992 columns,
respectively. Interim six month information is presented on a calendar
year basis.
/(2)/ Excludes merger costs which are estimated to be approximately $4.5
million.
/(3)/ Fully diluted net income per common share includes assumed interest
expense savings on convertible subordinated debentures, net of income
taxes, of $1,565 and $4,337 in 1993 and 1992,
-18-
<PAGE>
respectively. The debentures were converted into common stock of
SunGard on May 12, 1993.
/(4)/ All shares have been adjusted for the two-for-one stock split which
occurred in July 1995.
/(5)/ 1993 includes after-tax gain on sale of product line of $3,371, or $0.09
per share on a fully diluted basis.
/(6)/ Includes after-tax charges of $1,150 and $164 during the fiscal year
ended March 31, 1994 and the six months ended June 30, 1994, respectively,
in connection with the settlement of litigation.
Market Prices of MACESS Stock and Dividends
As of the Record Date, there were ten holders of record of MACESS Common
Stock and eleven holders of record of MACESS Class A Stock. There is no
established public trading market for either MACESS Common Stock or MACESS
Class A Stock. As a result, the market value for shares of MACESS stock is
not readily ascertainable.
MACESS has never paid any dividends and has no current intention to pay
dividends in the foreseeable future.
Selected Financial Information of MACESS
The following selected financial data for the five years ended December 31,
1994, are derived from the financial statements of MACESS. The financial data
for the years ended December 31, 1992, 1991 and 1990, and for the six months
ended June 30, 1995 and 1994 are derived from unaudited financial statements.
The financial data for the six months ended June 30, 1995 and 1994 include all
adjustments, consisting of normal recurring accruals, which MACESS considers
necessary for a fair presentation of the financial position and the results of
operations for these periods. Operating results for the six months ended June
30, 1995 are not necessarily indicative of the results that may be expected for
the entire year ended December 31, 1995. The data should be read in conjunction
with the financial statements, related notes, and other financial information of
MACESS included herein. See INDEX TO FINANCIAL STATEMENTS OF MACESS.
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
-------------------- -----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990/(1)/
Unaudited Unaudited Unaudited Unaudited Unaudited
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
- ---------------------
(in thousands)
Net sales $6,515 $5,597 $10,315 $6,470 $1,872 $ 714 $ -0-
Income (loss) from
operations 1,710 2,390 3,286 1,865 200 (289) (578)
Net income (loss) 1,061 1,518 2,030 1,108 119 (322) (601)
Balance Sheet Data:
- ------------------
(in thousands)
Total assets $5,473 $ 3,780 $1,808 $ 895 $ 716 $ 133
Total short term and
long term debt 463 513 400 1,050 731 605
</TABLE>
-19-
<PAGE>
/(1)/ No sales were made during 1990 as this was a period of research and
development. MACESS Corporation was formed December 29, 1989.
Management's Discussion and Analysis of Financial
Condition and Results of Operations of MACESS
General Background
MACESS is a software and services company providing an imaging based
operations management product for the managed healthcare industry. Revenue is
generated from 1) licensing software, 2) selling value added specialty
hardware, 3) providing re-engineering consulting, training and implementation
services, and 4) providing support and maintenance. MACESS provides a turnkey
solution for the managed healthcare industry and is a provider of imaging and
workflow software for the managed healthcare vertical market. Sales are
generated through a direct sales force and growth has been through internal
expansion as opposed to acquisition.
In 1990, MACESS began designing and developing the software for Complete
Health Services, Inc., an Alabama managed healthcare company, and the intent was
for MACESS to license the software to other non-competing managed healthcare
companies across the country. In 1991, MACESS signed its first contract with
Complete Health Services, Inc. and completed implementation. Development and de-
bugging continued through out the year to insure that the product was robust and
sufficiently stable for nationwide sales and installation. MACESS sold four
systems in 1992 and focused on building a consulting, training and
implementation process which is still in use today. The first three years were
start-up years with MACESS breaking even in 1992.
MACESS is organized in three major departments. The first department is
Sales and Marketing. The second department, Operations, includes project
managers, trainers, technical writers, network services, and purchasing. The
third department, Development, includes development programmers, technical
implementation, and support. Other independent areas include quality
assurance and accounting. MACESS does not utilize contract programmers for
its core products, and design, development, testing and implementation are
performed in-house and delivered with vertical market expertise.
Results of Operations
Six months ended June 30, 1995 compared to six months ended June 30, 1994
Net sales increased $0.9 million (16%) for the six month interim period ending
June 30, 1995 over the comparable period in 1994. Approximately 70% of the
increase in net sales during the six month period ended June 30, 1995 over the
comparable period during 1994 consists of sales to new customers. The balance of
the increase is attributable to additional sales to existing customers. Income
from operations decreased $679,865 (28%) due to a 39% increase in cost of sales
and a 61% increase in selling, general and administrative expenses. Cost of
sales as a percentage of net sales increased 6%. This increase reflects changes
in market technology which necessitated hardware upgrades, thereby rearranging
the product mix to include a larger component of hardware which carries a
smaller profit margin. The increase in selling, general and administrative
expenses consists primarily of salaries and related costs associated with the
growth of MACESS' work force to facilitate growth and increased market presence
in the managed healthcare market and to prepare for launch into new vertical
markets.
-20-
<PAGE>
Year ended December 31, 1994 compared to December 31, 1993
Net sales increased $3.8 million, or 59%, in 1994 over 1993. This increase
reflects sales growth in the managed healthcare market with the addition of 12
new customers. Approximately 80% of the increase in net sales during 1994 over
1993 consists of sales to new customers. The balance of the increase is
attributable to additional sales to existing customers. Income from operations
increased $1.4 million (76%) to $3.3 million in 1994. This increase is
primarily due to a 6% decrease in cost of sales as a percentage of net sales,
offset slightly by a 3% increase in selling, general and administrative
expenses as a percentage of net sales. The decrease in the percentage of cost
of sales is a result of improved purchasing practices and a slight change in
product mix. The increase in the percentage of selling, general and
administrative expenses consists primarily of salaries and related costs
associated with the growth of MACESS' work force commensurate with increasing
sales and market presence. MACESS expanded its employee base from 32 employees
at December 31, 1993 to 55 at December 31, 1994. Net income increased $922,617
(83%) during 1994. This increase is due to the increase in income from
operations accompanied by a decrease in loss on the disposal of assets and an
increase in the provision for taxes. Loss on disposal of assets for 1994 and
1993 was $73,213 and $201,370, respectively. Items disposed of in 1994
consisted mainly of leasehold improvements on MACESS' former office location,
and items disposed of in 1993 included mostly obsolete purchased software
items.
Year ended December 31, 1993 compared to year ended December 31, 1992
Net sales increased $4.6 million (246%) in 1993 from 1992, which was the
first year of active marketing of the MACESS products and services. Income
from operations increased $1.7 million (833%) as there was no material
operating income in 1992. Selling, general and administrative expenses
increased $561,034 (49%) in 1993. This increase corresponds to an increase in
sales volume and number of employees. The number of employees at December 31,
1993 and 1992 was 32 and 18 respectively.
Changes in Financial Condition - June 30, 1995 compared to December 31, 1994
Total assets increased by $1,693,007 (45%) from June 30, 1995 to December
31, 1994. This increase is due primarily to a 78% increase in accounts
receivable and a 61% increase in property, plant and equipment. The increase
in accounts receivable is the result of additional sales and a larger customer
base. The increase in property, plant and equipment is due to both a
relocation to a larger facility in the first quarter of 1995 and an expanded
work force. Total current liabilities increased 58%. This change in current
liabilities is primarily due to fluctuations in accounts payable, accrued
liabilities, taxes payable and current deferred taxes payable. Accounts
payable increased due to purchases of equipment at the end of the period. The
increase in taxes payable is a direct result of increased income before taxes
while the decrease in the current deferred taxes payable is the result of a
reclassification of certain items to non-current deferred taxes payable.
Liquidity and Capital Resources
At December 31, 1994, cash and cash equivalents increased $776,778 to
$1,280,756 from December 31, 1993. At June 30, 1995 cash and cash equivalents
were $1,592,490. Cash equivalents are invested in institutional money market
funds. MACESS has utilized excess cash flow to fund the business and has not
drawn on any outside credit facility. As of December 31, 1994 and June 30,
1995, MACESS had two notes payable to stockholders totaling $512,909 and
$463,179, respectively. Subsequent to June 30, 1995, excess cash flow was
used to pay off the remaining principal balance of $300,544 and associated
interest related to the larger of the two notes.
Cash flow from operations increased 6% to $1,702,821 in 1994. Capital
expenditures for property and equipment increased slightly by $112,543 from
December 31, 1993 to December 31, 1994. However, at June 30, 1995, capital
expenditures for property and equipment were $446,683. This
-21-
<PAGE>
increase is due to a relocation to a larger facility in the first quarter of
1995 and an expanded work force necessitating these additional capital
expenditures. Management believes MACESS has adequate working capital to
accommodate its anticipated growth.
Business of MACESS
MACESS is a privately held software development and services company
located in Birmingham, Alabama. Incorporated in 1989, MACESS was founded in
order to develop a document imaging based, operations management system for
health insurance and managed healthcare organizations. The system is a client
server based product operating on a Novell local area network and running
under Microsoft Windows. MACESS' integrated imaging application software
products automate the entry, routing and storage of claims, enrollments,
correspondence and other documents that are generated in health insurance
organizations. The MACESS products, known as I-MAX and Entrendex, emphasize
operational efficiency, accountability and problem resolution in claims,
customer service and other departments of managed care organizations and other
healthcare insurance companies. MACESS also offers services to its customers
including implementation (project management and training) services, workflow,
and reengineering services and system support services.
MACESS has grown from a customer base of one customer in 1991 to 38
customers as of August 1995. The customer base of MACESS has been
concentrated in the eastern United States, although MACESS currently has 8
customers in the west coast region of the United States. The customer base of
MACESS includes health insurance plans that range in size from 30,000 members
to over 500,000 members. The fundamental software and hardware system product
of MACESS, I-MAX, was designed to be interfaced with the majority of the host
management information systems (claims payment) used by managed care
companies. The objective of MACESS' software products and services is to
streamline operations of its customers. This is achieved by increasing
efficiencies and productivity while lowering administrative expenses and
providing useful tools for superior customer service within the healthcare
insurance industry.
Principal Shareholders of MACESS
The following table sets forth, as of the Record Date, certain information
with respect to the beneficial ownership of MACESS Common Stock (voting) and
MACESS Class A Common Stock (nonvoting) by (i) each person who is the
beneficial owner of more than 5% of the outstanding MACESS Common Stock or
MACESS Class A Common Stock, (ii) each director of MACESS who is a
shareholder, (iii) each of the executive officers of MACESS, and (iv) all
directors and executive officers as a group. Except as otherwise noted, the
named beneficial owner has sole voting and/or investment power over the shares
of MACESS capital stock indicated.
-22-
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership
Common Stock Class A Common Stock
Name Shares Percent Shares Percent
- ---- ------ ------- -------- --------
<S> <C> <C> <C> <C>
William W. Featheringill
402 Office Park
Suite 150
Birmingham, Alabama 35223 1,093,000 76.4% 4,372,000/1/ 76.4%
T. Alan Ritchie 52,500 3.7% 210,000 3.7%
William Sanders Pitman 52,500 3.7% 210,000 3.7%
John S. Williams 52,500 3.7% 210,000 3.7%
All Executive Officers
and Directors as a group
(4 Persons) 1,250,500 87.4% 5,002,000 87.4%
</TABLE>
- --------------------------
(1) The amount reported includes 1,875,000 shares of Class A Common Stock owned
by The Featheringill Family Partnership, Ltd.
Experts
The consolidated balance sheets of SunGard and subsidiaries as of December
31, 1994 and 1993 and the related consolidated statements of income,
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1994 have been incorporated by reference in this
Information Statement-Prospectus and in the Registration Statement in reliance
upon the report of Coopers & Lybrand L.L.P., independent certified public
accountants, given on the authority of that firm as experts in accounting and
auditing.
The financial statements of MACESS at December 31, 1994 and 1993, and for
the years then ended, appearing in this Information Statement-Prospectus and in
the Registration Statement, have been audited by Ernst & Young LLP, auditors, as
set forth in their report appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
Legal Opinions
Blank, Rome, Comisky & McCauley, Philadelphia, Pennsylvania, will render an
opinion to the effect that the shares of SunGard Common Stock to be issued in
exchange for shares of MACESS Common Stock, when issued pursuant to the Merger,
will be legally issued, fully paid and non-assessable. SunGard's General Counsel
will pass on certain other legal matters on behalf of SunGard. Ritchie &
Rediker, L.L.C., Birmingham, Alabama, will pass on certain legal matters on
behalf of MACESS.
-23-
<PAGE>
Index to
Financial Statements of
MACESS
June 30, 1995 (unaudited) and 1994 (unaudited) and
December 31, 1994, 1993 and 1992 (unaudited)
Contents
Report of Independent Auditors.............................................. F-1
Financial Statements
Balance Sheets.............................................................. F-2
Statements of Income........................................................ F-3
Statements of Cash Flows.................................................... F-4
Statements of Changes in Stockholders' Equity............................... F-6
Notes to Financial Statements............................................... F-7
-24-
<PAGE>
Report of Independent Auditors
The Board of Directors
MACESS Corporation
We have audited the accompanying balance sheets of MACESS Corporation as of
December 31, 1994 and 1993, and the related statements of income, changes in
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MACESS Corporation at December
31, 1994 and 1993, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
May 31, 1995
Birmingham, Alabama
F-1
<PAGE>
MACESS Corporation
Balance Sheets
<TABLE>
<CAPTION>
June 30 December 31
1995 1994 1993
---------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,592,490 $ 1,280,756 $ 503,978
Accounts receivable 2,340,190 1,313,703 551,604
Prepaid taxes -- 86,841 --
Prepaid expenses 67,384 30,984 2,445
---------------------------------------------------
Total current assets 4,000,064 2,712,284 1,058,027
Property, plant and equipment 903,330 562,225 385,725
Capitalized software development costs, less accumulated
amortization of $481,114 in 1995, $372,261 in 1994 and
$203,381 in 1993 569,353 505,231 364,202
---------------------------------------------------
Total assets $ 5,472,747 $ 3,779,740 $ 1,807,954
===================================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 249,139 $ 15,640 $ 41,821
Accrued liabilities 300,323 220,133 316,929
Taxes payable 350,268 -- 85,145
Deferred taxes payable 332,975 399,570 70,660
Notes payable to stockholders due within one year 407,465 403,317 400,000
---------------------------------------------------
Total current liabilities 1,640,170 1,038,660 914,555
---------------------------------------------------
Notes payable to stockholders 55,714 109,592 --
---------------------------------------------------
Deferred taxes payable 246,115 188,360 158,790
---------------------------------------------------
Stockholders' equity:
Common stock, voting 2,891 2,891 14,456
Common stock, non-voting 11,565 11,565 --
Paid-in-capital 12,461 12,461 --
Treasury stock (66,504) (66,504) --
Notes receivable (241,490) (267,750) --
Retained earnings 3,811,825 2,750,465 720,153
---------------------------------------------------
Total stockholders' equity 3,530,748 2,443,128 734,609
---------------------------------------------------
Total liabilities and stockholders' equity $ 5,472,747 $ 3,779,740 $ 1,807,954
===================================================
</TABLE>
See accompanying notes.
F-2
<PAGE>
MACESS Corporation
Statements of Income
<TABLE>
<CAPTION>
Six months ended June 30 Year ended December 31
1995 1994 1994 1993 1992
---------------------------------------------------------------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Net sales $ 6,514,555 $ 5,597,064 $ 10,314,617 $ 6,470,204 $ 1,871,653
Cost of sales 2,379,868 1,716,353 3,983,625 2,877,628 488,451
---------------------------------------------------------------------------------------------
4,134,687 3,880,711 6,330,992 3,592,576 1,383,202
Operating expenses:
General and administrative:
Salaries 1,166,086 831,521 1,618,875 896,236 452,482
Other 683,134 267,821 602,505 345,093 377,581
Selling:
Salaries 388,696 282,487 564,974 279,532 150,828
Other 139,762 99,149 202,072 190,698 169,634
Research and development 46,940 9,799 56,301 16,300 32,878
---------------------------------------------------------------------------------------------
Income from operations 1,710,069 2,389,934 3,286,265 1,864,717 199,799
Interest expense 25,371 18,801 44,276 56,057 80,686
Loss on disposal of assets -- -- 73,213 201,370 --
---------------------------------------------------------------------------------------------
1,684,698 2,371,133 3,168,776 1,607,290 119,113
Provision for taxes 623,338 853,608 1,138,464 499,595 --
---------------------------------------------------------------------------------------------
Net income $ 1,061,360 $ 1,517,525 $ 2,030,312 $ 1,107,695 $ 119,113
=============================================================================================
</TABLE>
See accompanying notes.
F-3
<PAGE>
MACESS Corporation
Statements of Cash Flows
<TABLE>
<CAPTION>
Six months ended June 30 Year ended December 31
1995 1994 1994 1993 1992
-------------------------------------------------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $ 1,061,360 $ 1,517,525 $ 2,030,312 $ 1,107,695 $ 119,113
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 214,431 153,800 326,417 280,199 181,919
Provision for deferred taxes (8,840) 354,656 358,480 229,450 --
Loss on disposal of assets -- -- 73,213 201,370 --
Change in assets and liabilities:
Accounts receivable (1,026,487) (954,018) (762,099) (545,694) (133,672)
Prepaid expenses (36,400) -- (28,539) (2,445) --
Accounts payable and accrued liabilities 313,689 (50,949) (122,977) 252,628 (264,054)
Taxes 437,109 227,633 (171,986) 85,145 --
-------------------------------------------------------------------------------
Total adjustments (106,498) (268,878) (327,491) 500,653 (215,807)
-------------------------------------------------------------------------------
Net cash provided (used) by operating activities 954,862 1,248,647 1,702,821 1,608,348 (96,694)
Cash flows from investing activities:
Purchase of equipment and leasehold improvements (446,683) (190,877) (389,749) (277,206) (17,203)
Additions to capitalized software development costs (172,975) (114,571) (327,410) (312,221) (133,692)
-------------------------------------------------------------------------------
Net cash used in investing activities (619,658) (305,448) (717,159) (589,427) (150,895)
-------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of notes payable -- -- -- -- 319,000
Issuance of stock -- -- -- -- 5,000
Net payments on stockholder notes (23,470) (170,283) (208,884) (640,943) --
-------------------------------------------------------------------------------
Net cash provided (used) by financing activities (23,470) (170,283) (208,884) (640,943) 324,000
-------------------------------------------------------------------------------
Increase in cash and cash equivalents 311,734 772,916 776,778 377,978 76,411
Cash and cash equivalents at beginning of period 1,280,756 503,978 503,978 126,000 49,589
-------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 1,592,490 $ 1,276,894 $ 1,280,756 $ 503,978 $ 126,000
===============================================================================
</TABLE>
F-4
<PAGE>
MACESS Corporation
Statements of Cash Flows (continued)
<TABLE>
<CAPTION>
Six months ended June 30 Year ended December 31
1995 1994 1994 1993 1992
------------------------------------------------------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Supplemental disclosure of cash
flow information and non-cash transactions:
Cash paid during the period for:
Interest $ 8,288 $ 416 $ 18,912 $ -- $ 46,875
Income taxes 195,069 105,000 951,970 185,000 --
Issuance of note payable for purchase of
treasury stock -- 321,793 321,793 -- --
Issuance of notes receivable for sale of
treasury stock -- -- 267,750 -- --
</TABLE>
See accompanying notes.
F-5
<PAGE>
MACESS Corporation
Statements of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Common stock, par value of $.002;
1,500,000 shares authorized, Common stock, $.002 par value;
1,445,600 shares issued and 6,000,000 shares authorized,
1,430,100, 1,430,100, 1,445,600 5,782,400 shares issued and
and 1,445,600 shares outstanding 5,720,400 outstanding at
at June 30, 1995 and December 31, June 30, 1995 and
1994, 1993, and 1992, respectively December 31, 1994
-------------------------------------------------------------------
Voting Non-Voting Paid-in Treasury
Shares Amount Shares Amount Capital Stock
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1991
(unaudited) 945,600 $ 9,456 -- $ -- $ -- $ --
Issuance of stock 500,000 5,000 -- -- -- --
Net income -- -- -- -- -- --
----------------------------------------------------------------------------------------------------
Balance at December 31, 1992
(unaudited) 1,445,600 14,456 -- -- -- --
Net income -- -- -- -- -- --
----------------------------------------------------------------------------------------------------
Balance at December 31, 1993 1,445,600 14,456 -- -- -- --
Purchase of treasury stock -- -- -- -- -- (321,793)
Treasury stock sold -- -- -- -- 12,461 255,289
Five-for-one stock split -- (11,565) 5,782,400 11,565 -- --
Net income -- -- -- -- -- --
----------------------------------------------------------------------------------------------------
Balance at December 31, 1994 1,445,600 2,891 5,782,400 11,565 12,461 (66,504)
Payments on notes receivable -- -- -- -- -- --
Net income -- -- -- -- -- --
----------------------------------------------------------------------------------------------------
Balance at June 30, 1995
(unaudited) 1,445,600 $ 2,891 5,782,400 $ 11,565 $ 12,461 $ (66,504)
====================================================================================================
<CAPTION>
Total
Retained Stockholders'
Notes Earnings Equity
Receivable (Deficit) (Deficit)
-------------------------------------------------------
<S> <C> <C> <C>
Balance at December 31, 1991
(unaudited) $ -- $ (506,655) $ (497,199)
Issuance of stock -- -- 5,000
Net income -- 119,113 119,113
-------------------------------------------------------
Balance at December 31, 1992
(unaudited) -- (387,542) (373,086)
Net income -- 1,107,695 1,107,695
-------------------------------------------------------
Balance at December 31, 1993 -- 720,153 734,609
Purchase of treasury stock -- -- (321,793)
Treasury stock sold (267,750) -- --
Five-for-one stock split -- -- --
Net income -- 2,030,312 2,030,312
-------------------------------------------------------
Balance at December 31, 1994 (267,750) 2,750,465 2,443,128
Payments on notes receivable 26,260 -- 26,260
Net income -- 1,061,360 1,061,360
-------------------------------------------------------
Balance at June 30, 1995
(unaudited) $ (241,490) $ 3,811,825 $ 3,530,748
=======================================================
</TABLE>
See accompanying notes.
F-6
<PAGE>
MACESS Corporation
Notes to Financial Statements
June 30, 1995 (unaudited) and 1994 (unaudited) and
December 31, 1994, 1993 and 1992 (unaudited)
1. Basis of Presentation
MACESS Corporation (the Company) was formed December 29, 1989 for the purpose of
developing and selling computer software, providing consultation, installation
and training services to meet the needs of potential customers. The Company's
software sales are part of a turnkey vertical market solution to meet its
customers needs which include the above-mentioned services as well as support
and maintenance services and ongoing software sales.
The accompanying unaudited financial statements for the six months ended
June 30, 1995 and 1994 have been prepared in accordance with generally accepted
accounting principles for interim financial information. The Company has
included adjustments (consisting of normal recurring accruals) necessary for a
fair presentation of the Company's financial position at June 30, 1995 and
results of operations and cash flows for the six-month periods ended June 30,
1995 and 1994.
2. Accounting Policies
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments with a maturity of three months or less to be cash
equivalents. Cash equivalents, consisting primarily of money market funds, are
valued at cost which approximates market.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Depreciation and
amortization are computed on the straight-line method over the estimated useful
lives of the related assets ranging from three to five years, except for
leasehold improvements which is 39 years.
F-7
<PAGE>
MACESS Corporation
Notes to Financial Statements (continued)
2. Accounting Policies (continued)
Capitalized Software
Amortization of software development costs begins at the time the product is
ready for sale, and is calculated on the straight-line method over the estimated
economic life of the product. Research and development costs related to
software development are expensed as incurred.
Taxes
Deferred taxes are provided for differences between financial and income tax
reporting.
Revenue Recognition
The Company recognizes revenue based on the terms of the contract which
correlates to the percentage of completion method of accounting. The contract
payment terms for software, consulting and training generally include an initial
payment equal to 25% of the contract value, 50% after the computer system is
installed and the final 25% 30 to 90 days after installation. The contract
payment terms for hardware generally include an initial payment equal to 25% of
the contract value and 75% after the computer system is installed. The Company
generally does not require collateral as security for payment.
3. Property, Plant and Equipment
Property, plant and equipment, net consists of the following:
<TABLE>
<CAPTION>
June 30 December 31
1995 1994 1993
------------------------------------
(Unaudited)
<S> <C> <C> <C>
Furniture and equipment $ 517,674 $ 300,114 $ 154,533
Leasehold improvements 46,206 - 47,913
Computer equipment 701,812 518,895 332,303
-------------------------------------
1,265,692 819,009 534,749
Less accumulated depreciation (362,362) (256,784) (149,024)
--------------------------------------
$ 903,330 $ 562,225 $ 385,725
======================================
</TABLE>
F-8
<PAGE>
MACESS Corporation
Notes to Financial Statements (continued)
4. Capitalized Software Development Costs
The Company capitalized salaries and indirect costs of $172,975 for the six
months ended June 30, 1995 and $327,410, $312,221 and $133,692 in 1994, 1993 and
1992, respectively, relating to the development of new software products,
including product enhancements. Capitalization of software development costs
begins upon the establishment of technological feasibility and continues until
such software is available for sale.
The establishment of technological feasibility, the point at which the product
is ready for general release, and the ongoing assessment of recoverability of
capitalized software development costs requires the exercise of judgment by
management. In the opinion of management, all such costs capitalized at June 30,
1995 are recoverable through anticipated future sales of the applicable
products.
5. Notes Payable to Stockholders
Notes payable to stockholders consisted of the following:
<TABLE>
<CAPTION>
June 30 December 31
1995 1994 1993
-----------------------------------------
(Unaudited)
<S> <C> <C> <C>
Notes payable to stockholder,
interest at 8%, payable on demand $ 300,544 $ 300,544 $ 400,000
Note payable to stockholder, interest
at 8%, payable in monthly
installments through 1996 and
1997 162,635 212,365 --
-----------------------------------------
463,179 512,909 400,000
Less current maturities (407,465) (403,317) (400,000)
-----------------------------------------
$ 55,714 $ 109,592 $ --
=========================================
</TABLE>
In 1994 the Company purchased 75,000 shares of common stock from a stockholder
through the issuance of a note payable of $321,793, with a balance of $212,365
at December 31, 1994. In connection with this transaction, the Company entered
into a covenant not-to-compete with monthly payments of $6,250 through December
31, 1997.
F-9
<PAGE>
MACESS Corporation
Notes to Financial Statements (continued)
5. Notes Payable to Stockholders (continued)
The Company's notes payable mature as follows:
<TABLE>
<CAPTION>
<S> <C>
1995 $ 407,465
1996 55,714
---------------
$ 463,179
===============
</TABLE>
6. Taxes
The Company follows the provisions of Financial Accounting Standards Board
Statement No. 109 "Accounting for Income Taxes." Under Statement 109, the
liability method is used in accounting for income taxes. Deferred tax assets
and liabilities are determined based on differences between financial reporting
and tax bases of assets and liabilities and are measured using the enacted tax
rates and laws that will be in effect when the differences are expected to
reverse.
The provision for taxes as a percentage of income before taxes differs from the
U.S. federal statutory rate as follows:
<TABLE>
<CAPTION>
Six months
ended June 30 December 31
1995 1994 1993 1992
---------------------------------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Federal provision at the current
statutory rate $ 572,797 $ 1,077,384 $ 546,479 $ 40,498
Tax (benefit) resulting from:
State tax expense 50,541 62,414 27,023 3,573
Adjustment to provision -- -- 50,000 --
Change in beginning of the year
valuation allowance -- (123,907) (44,071)
Other -- (1,334) -- --
---------------------------------------------------------------
$ 623,338 $ 1,138,464 $ 499,595 $ --
===============================================================
</TABLE>
F-10
<PAGE>
MACESS Corporation
Notes to Financial Statements (continued)
6. Taxes (continued)
An analysis of the Company's tax provision is as follows:
<TABLE>
<CAPTION>
Six months
ended June 30 December 31
1995 1994 1993 1992
---------------------------------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Current:
Federal $ 579,091 $ 714,484 $ 247,806 $ -
State 53,087 65,500 22,339 -
---------------------------------------------------------------
632,178 779,984 270,145 -
---------------------------------------------------------------
Deferred:
Federal (8,122) 329,414 210,845 -
State (718) 29,066 18,605 -
---------------------------------------------------------------
(8,840) 358,480 229,450 -
---------------------------------------------------------------
$ 623,338 $ 1,138,464 $ 499,595 $ -
===============================================================
</TABLE>
The deferred tax position is as follows:
<TABLE>
June 30 December 31
1995 1994 1993
--------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Deferred tax liabilities:
Accrual to cash differences $ 332,975 $ 399,570 $ 70,660
Capitalized software 209,115 154,075 134,755
Tax over book depreciation 37,000 34,285 24,035
--------------------------------------------
$ 579,090 $ 587,930 $ 229,450
============================================
</TABLE>
7. 401(k) Plan
The Company began a 401(k) plan in April 1994. The Plan covers substantially
all of the Company's employees ages 21 and over who have completed 12 months of
service. The Company matches contributions in amounts determined by the Board
of Directors at the beginning of each Plan year. The Company's contribution to
the Plan in 1994 was $16,500, and $30,117 for the six months ended June 30,
1995.
F-11
<PAGE>
MACESS Corporation
Notes to Financial Statements (continued)
8. Commitments
The Company leases its office space under an operating lease. Rental expense
amounted to $156,889 for the six months ended June 30, 1995, and $171,579,
$108,473 and $51,911 in 1994, 1993 and 1992, respectively. Future minimum lease
payments under the lease are $276,500 annually through 1999.
9. Related Party Transactions
Effective January 1, 1993, the Company entered into a management agreement with
Complete Health Services, Inc. (CHS) which terminated April 15, 1994. CHS was
founded by a major shareholder of the Company and sold to an unrelated party in
May 1994. In return for services provided to CHS at substantially reduced
rates, CHS agreed to provide all accounting, payroll and bookkeeping functions
for the Company. In connection with this agreement, the Company recognized
revenue and management fee expense of $5,800 and $12,500 in 1994 and 1993,
respectively.
Under the terms of the agreement, CHS also employed all employees on behalf of
the Company and was fully reimbursed at the end of each month by the Company.
Included in general and administrative and selling expenses is $1,058,000, and
$1,373,000 in 1994, and 1993, respectively, for such reimbursed amounts.
10. Subsequent Event (unaudited)
On September 29, 1995, the Company entered into an agreement with SunGard Data
Systems Inc. (SunGard) whereby all of the Company's common stock will be
exchanged for approximately 1,990,000 shares of SunGard's common stock.
F-12
<PAGE>
Appendix A
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
dated September 29, 1995
FOR THE ACQUISITION OF
MACESS CORPORATION
BY
SUNGARD DATA SYSTEMS INC.
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
Table of Contents
-----------------
Section 1: Defined Terms................................................... -2-
1.1. "Accounts Receivable"...................................... -2-
1.2. "Asset".................................................... -2-
1.3. "Cash Asset"............................................... -2-
1.4. "Consent".................................................. -2-
1.5. "Contract"................................................. -3-
1.6. "Contract Right"........................................... -3-
1.7. "Employee Benefit Plan".................................... -3-
1.8. "Encumbrance".............................................. -3-
1.9. "GAAP"..................................................... -3-
1.10. "Hazardous Substances"..................................... -3-
1.11. "Insurance Policy"......................................... -3-
1.12. "Intangible"............................................... -4-
1.13. "Judgment"................................................. -4-
1.14. "Law"...................................................... -4-
1.15. "Obligation"............................................... -4-
1.16. "Permit"................................................... -4-
1.17. "Person"................................................... -4-
1.18. "Proceeding"............................................... -4-
1.19. "Real Property"............................................ -4-
1.20. "SEC"...................................................... -4-
1.21. "Software"................................................. -4-
1.22. "Tangible Property"........................................ -4-
1.23. "Tax"...................................................... -5-
Section 2: The Merger ..................................................... -5-
Section 3: Representations of MACESS and Principals........................ -5-
3.1. Organization............................................... -5-
3.2. Effect of Agreement........................................ -5-
3.3. Capital Stock and Ownership................................ -6-
3.4. Financial and Corporate Records............................ -7-
3.5. Compliance with Law........................................ -7-
3.6. Financial Statements....................................... -7-
3.7. Assets..................................................... -8-
3.8. MACESS' Obligations........................................ -8-
3.9. Operations Since August 31, 1995........................... -8-
3.10. Accounts Receivable........................................ -9-
3.11. Tangible Property.......................................... -9-
3.12. Real Property.............................................. -9-
3.13. Software and Intangibles.................................. -10-
3.14. Contracts................................................. -10-
3.15. Employees and Independent Contractors..................... -11-
3.16. Employee Benefit Plans.................................... -12-
3.17. Customers, Prospects and Suppliers........................ -13-
3.18. Taxes..................................................... -13-
(i)
<PAGE>
3.19. Proceedings and Judgments................................. -14-
3.20. Insurance................................................. -14-
3.21. Questionable Payments..................................... -14-
3.22. Related Party Transactions................................ -15-
3.23. Brokerage Fees............................................ -15-
3.24. Acquisition Proposals..................................... -15-
3.25. Full Disclosure........................................... -15-
Section 4: Several Representations of Principals.......................... -15-
4.1. Ownership of Shares........................................ -15-
4.2. Effect of Agreement........................................ -16-
4.3. Acquisition Proposals...................................... -16-
4.4. Brokerage Fees............................................. -16-
4.5. Full Disclosure............................................ -16-
Section 5: Representations of SunGard and Newco........................... -16-
5.1. Organization............................................... -16-
5.2. Agreement.................................................. -17-
5.3. SunGard's Stock............................................ -17-
5.4. SEC Filings................................................ -17-
5.5. Investment Matters......................................... -17-
5.6. Brokerage Fees............................................. -17-
5.7. Operations since June 30, 1995............................. -17-
Section 6: Securities Filings and Approval of the MACESS Stockholders..... -18-
6.1. Registration Statement..................................... -18-
6.2. MACESS Stockholder Approval................................ -18-
6.3. MACESS' and Principals' Representations as to
the Registration Statement................................. -18-
6.4. SunGard's and Newco's Representations as to Registration
Statement.................................................. -19-
6.5. State Securities Filings................................... -19-
Section 7: Certain Obligations of MACESS and Principals Pending Closing... -19-
7.1. Conduct of MACESS' Business................................ -19-
7.2. Interim Financial Statements............................... -21-
7.3. Access to Information...................................... -21-
7.4. Consents................................................... -21-
7.5. Acquisition Proposals...................................... -21-
7.6. Advice of Changes.......................................... -22-
7.7. Hart-Scott-Rodino Filing................................... -22-
7.8. 8-K Reports................................................ -22-
7.9. Binding Effect............................................. -22-
Section 8: Certain Obligations of SunGard and Newco Pending Closing....... -22-
8.1. Corporate Status........................................... -22-
8.2. Material Consents.......................................... -23-
8.3. SEC Reports................................................ -23-
(ii)
<PAGE>
Page
----
8.4. Hart-Scott-Rodino Filing................................... -23-
8.5. Advice of Changes.......................................... -23-
8.6. Binding Effect............................................. -23-
Section 9: Conditions Precedent to MACESS' and Principals' Closing
Obligations.......................................................... -23-
9.1. Effectiveness of Registration Statement.................... -23-
9.2. Approval of the MACESS Stockholders........................ -24-
9.3. SunGard's and Newco's Representations...................... -24-
9.4. SunGard's and Newco's Performance.......................... -24-
9.5. Absence of Proceedings..................................... -24-
9.6. Adverse Changes............................................ -24-
9.7. Hart-Scott-Rodino.......................................... -24-
Section 10: Conditions Precedent to SunGard's and Newco's Closing
Obligations.......................................................... -24-
10.1. Qualification for Pooling Treatment........................ -24-
10.2. Effectiveness of Registration Statement.................... -24-
10.3. Affiliate Letters.......................................... -25-
10.4. Approval of the MACESS Stockholders........................ -25-
10.5. MACESS' and the Principals' Representations................ -25-
10.6. MACESS' and the Principals' Performance.................... -25-
10.7. Absence of Proceedings..................................... -25-
10.8. Adverse Changes............................................ -25-
10.9. Hart-Scott-Rodino.......................................... -25-
Section 11: Closing....................................................... -25-
11.1. Closing.................................................... -25-
11.2. Principals' Obligations at Closing......................... -26-
11.3. SunGard's and Newco's Obligations at Closing............... -28-
Section 12: Certain Obligations of Principals after Closing............... -29-
12.1. Restrictions on Dispositions of SunGard Stock.............. -29-
12.2. Cooperation with SunGard and the Surviving Corporation..... -29-
12.3. Further Assurances......................................... -29-
Section 13: Certain Obligations of SunGard and the Surviving Corporation
after Closing........................................................ -30-
13.1. Final Tax Returns.......................................... -30-
13.2. Employment Matters......................................... -30-
13.3. Employee Benefit Plans..................................... -30-
13.4. Disposition of Savings Plan................................ -30-
Section 14: Restrictive Covenants of the Principals........................ -30-
14.1. Certain Acknowledgements................................... -30-
14.2. Nondisclosure Covenants.................................... -31-
14.3. Noncompetition Covenants................................... -32-
14.4. Certain Exclusions......................................... -32-
14.5. Newsoftco.................................................. -33-
(iii)
<PAGE>
Page
----
14.6. Enforcement of Covenants................................... -33-
14.7. Scope of Covenants......................................... -33-
Section 15: Indemnification............................................... -33-
15.1. Principals' General Indemnification........................ -33-
15.2. Indemnification Procedures................................. -34-
15.3. Limits on Indemnification.................................. -35-
15.4. Exceptions................................................. -36-
15.5. Allocation................................................. -36-
15.6. Mediation.................................................. -36-
Section 16: Other Provisions.............................................. -36-
16.1. Termination................................................ -36-
16.2. Publicity.................................................. -37-
16.3. Fees and Expenses.......................................... -37-
16.4. Notices.................................................... -38-
16.5. Survival of Representations................................ -38-
16.6. Interpretation of Representations.......................... -38-
16.7. Reliance by SunGard and Newco.............................. -38-
16.8. Entire Understanding....................................... -39-
16.9. Parties in Interest........................................ -39-
16.10. Waivers.................................................... -39-
16.11. Severability............................................... -39-
16.12. Counterparts............................................... -39-
16.13. Section Headings........................................... -39-
16.14. References................................................. -39-
16.15. Controlling Law............................................ -39-
16.16. Jurisdiction and Process................................... -40-
16.17. Post-Closing Actions by the Surviving Corporation.......... -40-
16.18. No Third-Party Beneficiaries............................... -40-
16.19. Nature of Transactions..................................... -40-
16.20. Stockholders Agent......................................... -40-
(iv)
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
Parties: MACESS Corporation
an Alabama corporation ("MACESS")
402 Office Park Drive, Suite 150
Birmingham, AL 35223
William W. Featheringill ("Featheringill")
3211 Pine Ridge Road
Birmingham AL 35213
The Featheringill Family Partnership, Ltd. ("The Family
Partnership")
402 Office Park Drive, Suite 150
Birmingham, AL 35223
Richard T. Harley ("Harley")
112 Spring Road
Birmingham, AL 35242
T. Alan Ritchie ("Ritchie")
90 Mountain Avenue
Birmingham, AL 35213
W. Sanders Pitman ("Pitman")
221 Devon Drive
Birmingham, AL 35209
John S. Williams ("Williams")
2100 Shades Crest Road
Birmingham, AL 35216
Lawrence A. Stein ("Stein")
2317 Vestbrook Drive
Birmingham, AL 35243
Thomas W. Claussen ("Claussen")
3859 Carisbrooke Drive
Birmingham, AL 35226
SunGard Data Systems Inc.
a Delaware corporation ("SunGard")
1285 Drummers Lane, Wayne, Pennsylvania 19087
SDS Merger Inc.
an Alabama corporation ("Newco")
1285 Drummers Lane, Wayne, Pennsylvania 19087
Date: September 29, 1995
-1-
<PAGE>
Background: MACESS is in the business of designing, developing, selling,
licensing and maintaining a variety of imaging-based, automated document and
work flow management software systems and related services and products to the
managed health care industry. ("MACESS' Business"). Featheringill, The Family
Partnership, Harley, Ritchie, Pitman, Williams, Stein and Claussen
(collectively, the "Principals") own, collectively, directly and indirectly,
approximately 98% of the issued and outstanding shares of capital stock of
MACESS ("MACESS' Stock"). The parties desire that Newco be merged with and into
MACESS (the "Merger") on the terms and subject to the conditions set forth in
this Agreement and Plan of Reorganization (this "Agreement") and the Agreement
and Plan of Merger dated this date and designated as Exhibit A hereto (the
"Plan"). The Board of Directors of MACESS has determined that the Merger and
the other transactions contemplated by this Agreement and the Plan
(collectively, the "Transactions") are in the best interests of MACESS and its
stockholders ("Stockholders"). The respective Boards of Directors of SunGard
and Newco, a wholly-owned subsidiary of SunGard, have determined that the
Transactions are in the best interests of SunGard and Newco and their respective
stockholders.
Intending to be legally bound, in consideration of the mutual
agreements contained herein and subject to the satisfaction of the terms and
conditions set forth herein, the parties hereto agree as follows:
Section 1: Defined Terms
Certain defined terms used in this Agreement and not specifically defined in
context are defined in this Section 1, as follows:
1.1. "Accounts Receivable" means (a) any right to payment for goods
sold, leased or licensed or for services rendered, whether or not it has been
earned by performance, whether billed or unbilled, and whether or not it is
evidenced by any Contract (as defined in Section 1.5); (b) any note receivable;
or (c) any other receivable or right to payment of any nature.
1.2. "Asset" means any real, personal, mixed, tangible or intangible
property of any nature, including, but not limited to, Cash Assets (as defined
in Section 1.3), prepayments, deposits, escrows, Accounts Receivable (as defined
in Section 1.1), Tangible Property (as defined in Section 1.22), Real Property
(as defined in Section 1.19), Software (as defined in Section 1.21), Contract
Rights (as defined in Section 1.6), Intangibles (as defined in Section 1.12) and
good will, and claims, causes of action and other legal rights and remedies.
1.3. "Cash Asset" means any cash on hand, cash in bank or other
accounts, readily marketable securities, and other cash-equivalent liquid assets
of any nature.
1.4. "Consent" means any consent, approval, order or authorization
of, or any declaration, filing or registration with, or any application or
report to, or any waiver by, or any other action (whether similar or dissimilar
to any of the foregoing) of, by or with, any Person (as defined in
Section 1.17), which is necessary in order to take a specified action or
actions in a specified manner and/or to achieve a specified result.
-2-
<PAGE>
1.5. "Contract" means any written or oral contract, agreement,
instrument, order, arrangement, commitment or understanding of any nature,
including, but not limited to, sales orders, purchase orders, leases, subleases,
data processing agreements, maintenance agreements, license agreements,
sublicense agreements, loan agreements, promissory notes, security agreements,
pledge agreements, deeds, mortgages, guaranties, indemnities, warranties,
employment agreements, consulting agreements, sales representative agreements,
joint venture agreements, buy-sell agreements, options or warrants.
1.6. "Contract Right" means any right, power or remedy of any nature
under any Contract (as defined in Section 1.5) including, but not limited to,
rights to receive property or services or otherwise derive benefits from the
payment, satisfaction or performance of another party's Obligations (as defined
in Section 1.15), rights to demand that another party accept property or
services or take any other actions, and rights to pursue or exercise remedies or
options.
1.7. "Employee Benefit Plan" means any employee benefit plan as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or any other plan, program, policy or arrangement for or
regarding bonuses, commissions, incentive compensation, severance, vacation,
deferred compensation, pensions, profit sharing, retirement, payroll savings,
stock options, stock purchases, stock awards, stock ownership, phantom stock,
stock appreciation rights, medical/dental expense payment or reimbursement,
disability income or protection, sick pay, group insurance, self insurance,
death benefits, employee welfare or fringe benefits of any nature; but not
including employment Contracts with individual employees.
1.8. "Encumbrance" means any lien, security interest, pledge,
mortgage, easement, covenant, restriction, reservation, conditional sale, prior
assignment, or other encumbrance, claim, burden or charge of any nature.
1.9. "GAAP" means generally accepted accounting principles under
United States accounting rules and regulations, consistently applied in
accordance with MACESS accounting policies, including the policies described in
Schedule 3.6; provided that in no event shall the consistent application of the
accounting policies used by MACESS have priority over generally accepted
accounting principles, regardless of materiality.
1.10. "Hazardous Substances" means any substance, waste,
contaminant, pollutant or material that has been determined by any United States
federal government authority, or any state or local government authority having
jurisdiction over MACESS' Real Property, to be capable of posing a risk of
injury or damage to health, safety, property or the environment, including, but
not limited to, (a) all substances, wastes, contaminants, pollutants and
materials defined or designated as hazardous, dangerous or toxic pursuant to any
Law of any state in which any of MACESS' leased or owned Real Property is
located or any United States Law, and (b) asbestos, polychlorinated biphenyls
("PCB's") and petroleum.
1.11. "Insurance Policy" means any public liability, product
liability, general liability, comprehensive, property damage, vehicle, life,
hospital, medical, dental, disability, worker's compensation, key man, fidelity
bond, theft, forgery, errors and omissions, directors' and officers' liability,
or other insurance policy of any nature.
-3-
<PAGE>
1.12. "Intangible" means any name, corporate name, fictitious name,
trademark, trademark application, service mark, service mark application, trade
name, brand name, product name, slogan, trade secret, know-how, patent, patent
application, copyright, copyright application, design, logo, formula, invention,
product right or other intangible asset of any nature, whether in use, under
development or design, or inactive.
1.13. "Judgment" means any order, writ, injunction, citation, award,
decree or other judgment of any nature of any foreign, federal, state or local
court, governmental body, administrative agency, regulatory authority or
arbitration tribunal.
1.14. "Law" means any provision of any foreign, federal, state or
local law, statute, ordinance, charter, constitution, treaty, rule or
regulation.
1.15. "Obligation" means any debt, liability or obligation of any
nature, whether secured, unsecured, recourse, nonrecourse, liquidated,
unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained,
known, unknown or otherwise.
1.16. "Permit" means any license, permit, approval, waiver, order,
authorization, right or privilege of any nature, granted, issued, approved or
allowed by any foreign, federal, state or local governmental body,
administrative agency or regulatory authority.
1.17. "Person" means any individual, sole proprietorship, joint
venture, partnership, corporation, limited liability company or partnership,
association, cooperative, trust, estate, governmental body, administrative
agency, regulatory authority or other entity of any nature.
1.18. "Proceeding" means any demand, claim, suit, action, litigation,
investigation, arbitration, administrative hearing or other proceeding of any
nature.
1.19. "Real Property" means any real estate, land, building,
condominium, town house, structure or other real property of any nature, all
shares of stock or other ownership interests in cooperative or condominium
associations or other forms of ownership interest through which interests in
real estate may be held, and all appurtenant and ancillary rights thereto,
including, but not limited to, easements, covenants, water rights, sewer rights
and utility rights.
1.20. "SEC" means the United States Securities and Exchange
Commission.
1.21. "Software" means any computer program, operating system,
applications system, firmware or software of any nature, whether operational,
under development or inactive, including all object code, source code, technical
manuals, user manuals and other documentation therefor, whether in machine-
readable form, programming language or any other language or symbols, and
whether stored, encoded, recorded or written on disk, tape, film, memory device,
paper or other media of any nature.
1.22. "Tangible Property" means any furniture, fixtures, leasehold
improvements, vehicles, office equipment, computer equipment, other equipment,
machinery, tools, forms, supplies or other tangible personal property of any
nature.
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1.23. "Tax" means (a) any foreign, federal, state or local income,
earnings, profits, gross receipts, franchise, capital stock, net worth, sales,
use, occupancy, general property, real property, personal property, intangible
property, transfer, fuel, excise, payroll, withholding, unemployment
compensation, social security, value added, retirement or other tax of any
nature; (b) any foreign, federal, state or local organization fee, qualification
fee, annual report fee, filing fee, occupation fee, assessment, sewer rent or
other fee or charge of any nature; or (c) any deficiency, interest or penalty
imposed with respect to any of the foregoing.
Section 2: The Merger
Subject to the terms and conditions of this Agreement and the Plan, Newco
shall be consolidated and merged with and into MACESS (the "Surviving
Corporation") in accordance with the provisions of this Agreement and the
provisions of the Plan. The closing of the Merger and the other Transactions
shall take place on the Closing Date (as defined in Section 11, 11.1) and shall
be effective on the Effective Date (as defined in Section 11, 11.1).
Section 3: Representations of MACESS and Principals
Knowing that SunGard and Newco rely thereon, MACESS and the Principals,
represent and warrant, with liability to be allocated in accordance with Section
15.5, to SunGard and Newco as of the date of this Agreement, and covenant with
SunGard and Newco, as follows:
3.1. Organization. MACESS is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Alabama. MACESS
possesses the full corporate power and authority to own its Assets, conduct its
business as and where presently conducted, and enter into and perform this
Agreement. MACESS has no employees residing or offices located outside of the
State of Alabama. MACESS does not own any securities of any corporation or any
other interest in any Person, except as set forth on Schedule 3.1. MACESS does
not have any predecessors. Schedule 3.1 states, for MACESS (a) its exact legal
name; (b) its jurisdiction and date of formation; (c) its federal employer
identification number; (d) its headquarters address, telephone number and
facsimile number; (e) its directors and officers, indicating all current
title(s) of each individual; (f) its registered agent and/or office in its
jurisdiction of formation (if applicable); (g) all fictitious, assumed or other
names of any type that are registered or used by it or under which it has done
business at any time since January 1, 1990; and (h) any name changes,
recapitalizations, mergers, reorganizations or similar events since its date of
formation. Accurate and complete copies of articles or certificate of
incorporation, bylaws and other organization and related documents, each as
amended to date, and all Contracts relating to the acquisition of MACESS (or its
affiliates or predecessors) have been delivered to SunGard.
3.2. Effect of Agreement. MACESS' execution, delivery and
performance of this Agreement, and its consummation of the transactions
contemplated by this Agreement, have been duly authorized by all necessary
corporate actions by its board of directors and stockholders and do not
constitute a violation of or default under its charter, bylaws and/or other
organizational documents. For MACESS, its execution, delivery and performance of
this Agreement, and its consummation of the transactions contemplated by this
Agreement, (a) except as set forth on Schedule 3.2, do not constitute a default
or breach (immediately or
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after the giving of notice, passage of time or both) under any Contract to which
it is a party or by which it is bound, (b) do not constitute a violation of any
Law (as defined in Section 1.14) or Judgment (as defined in Section 1.13) that
is applicable to it or to the business or Assets of MACESS, or to the
transactions contemplated by this Agreement, (c) except as set forth on Schedule
3.2, do not accelerate or otherwise modify any Obligation (as defined in Section
1.15) of MACESS, (d) do not result in the creation of any Encumbrance (as
defined in Section 1.8) upon, or give to any third party any interest in, any of
the business or Assets of MACESS, or any of the capital stock of MACESS, except
as contemplated by this Agreement and except for restrictions generally imposed
on transfer under federal and state securities Laws, and (e) except as stated on
Schedule 3.2 and except for the filing of the Certificate of Merger with the
proper officials of the State of Alabama, do not require the Consent (as defined
in Section 1.4) of any Person (as defined in Section 1.17). This Agreement
constitutes the valid and legally binding agreement of MACESS enforceable
against MACESS in accordance with its terms. A certified copy of the
resolutions duly adopted by the board of directors of MACESS authorizing MACESS
to execute, deliver and perform this Agreement and the Plan, are attached to
Schedule 3.2.
3.3. Capital Stock and Ownership. The authorized capital stock of
MACESS ("MACESS Stock") consists of: (i) 1,500,000 shares of voting common
stock, $.002 par value per share, of which 1,430,100 shares are issued and
outstanding, and 15,500 shares are held in treasury, (ii) 6,000,000 shares of
Class A non-voting common stock, $.002 par value per share, of which 5,720,400
are issued and outstanding, and 62,000 shares are held in treasury. Schedule
3.3A is an accurate and complete list of (a) the full legal names of all of the
Principals and all other stockholders of MACESS, (b) the addresses of their
respective current principal residences, (c) their social security numbers or
federal tax identification numbers, and (d) the numbers of and type of shares of
MACESS Stock owned of record by them and the certificate numbers of the stock
certificates representing such shares. MACESS has not ever authorized, offered,
sold or issued any securities other than ordinary shares of common stock and the
Class A non-voting common stock described in this Section. Except as described
on Schedule 3.3A, there are no other record or beneficial owners of any shares
of capital stock of MACESS. Except for the shares of MACESS Stock listed on
Schedule 3.3A, there are no other issued or outstanding shares of capital stock
of MACESS. Except as set forth on Schedule 3.3A, all of the issued and
outstanding shares of MACESS Stock have been duly authorized and validly issued,
and are fully paid and nonassessable, with no liability attaching to the
ownership thereof. All offerings, sales and issuances by MACESS of any shares
of capital stock were conducted in compliance with all applicable federal and
state securities Laws and all applicable state corporation Laws. Schedule 3.3B
is an accurate and complete list of all options granted by MACESS including the
full legal names of all of the holders, the addresses of their respective
current principal residences, their social security numbers, the number of
options granted, the date of grant, the exercise price, and whether or not such
options have vested as of August 31, 1995. Schedule 3.3C is an accurate and
complete list of all warrants issued by MACESS including the full legal names of
all of the holders, the addresses of their respective current principal
residences, their social security numbers or tax identification numbers, the
number of warrants issued and the exercise price. All options granted and
warrants issued have been duly authorized. Attached to Schedule 3.3B and 3.3C,
respectively, are complete and accurate copies of all options plans and all
warrants. Except for this Agreement or as described in any of Schedules 3.3A,
3.3B and 3.3C, there are no outstanding options, puts, calls, warrants,
subscriptions, stock appreciation rights, phantom stock, or other Contracts or
Contract Rights relating to the offering, sale, issuance, redemption or
disposition of any shares of capital stock, or other securities of
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MACESS. Upon the consummation of the Merger, SunGard shall have good and
marketable title to all of the issued and outstanding capital stock of the
Surviving Corporation, free and clear of any Encumbrance.
3.4. Financial and Corporate Records. Except as set out in Schedule
3.6, the books and records of MACESS are and have been properly prepared and
maintained in accordance with GAAP (as defined in Section 1.9), and such books
and records fairly and accurately reflect in all material respects all of the
Assets and Obligations of MACESS and all Contracts and other transactions to
which MACESS is or was a party or by which MACESS or MACESS' Business or MACESS'
Assets is or was affected. Accurate and complete copies of the contents of the
minute books and stock books of MACESS have been delivered to SunGard. Such
minute books and stock books include (a) minutes of all meetings of the
stockholders, board of directors and any committees of the board of directors at
which any material action was taken, which minutes accurately record all actions
taken at such meetings, (b) accurate and complete written statements of all
actions taken by the stockholders, board of directors and any committees of the
board of directors without a meeting, and (c) accurate and complete records of
the issuance, transfer and cancellation of all shares of capital stock and other
securities since the date of incorporation. Neither the stockholders, board of
directors or any committee of the board has taken any material action other than
those actions reflected in the records referenced in clauses (a) and (b) of the
preceding sentence. Schedule 3.4 is an accurate and complete list of all bank
accounts, other accounts, certificates of deposit, marketable securities, other
investments, safe deposit boxes, lock boxes and safes of MACESS, and the names
of all officers, employees or other individuals who have access thereto or are
authorized to make withdrawals therefrom or dispositions thereof.
3.5. Compliance with Law. Except as set forth on Schedule 3.5,
MACESS' operations, the conduct of MACESS' Business as and where such business
has been or presently is conducted, and the ownership, possession and use of
MACESS' Assets have complied and currently do comply with all Laws (as defined
in Section 1.14) applicable to MACESS, its operations, business, Assets or
Obligations. Except as set forth on Schedule 3.5, to the knowledge of MACESS and
each of the Principals, MACESS has obtained and holds all Permits (as defined in
Section 1.16) required for the lawful operation of its business as and where
such business is presently conducted. All Permits held by MACESS are listed on
Schedule 3.5, and copies of such Permits have been delivered to SunGard and
Newco .
3.6. Financial Statements. MACESS' fiscal year ends on December 31.
Schedule 3.6A includes accurate and complete copies of the following financial
statements ("Audited Financial Statements"): (a) a balance sheet of MACESS as of
December 31, 1994 and December 31, 1993; and (b) statements of income,
statements of changes in stockholders' equity, and statements of cash flows for
the periods from January 1, 1994 to December 31, 1994, and January 1, 1993 to
December 31, 1993, and notes thereto. Schedule 3.6B includes accurate and
complete copies of all the following unaudited financial statements: ("Unaudited
Financial Statements") an unaudited balance sheet of MACESS as of August 31,
1995 ("August 1995 Balance Sheet") and related unaudited financial statements,
included but not limited to, unaudited statements of income, prepared by the
management of MACESS on an ongoing basis since the Audited Financial Statements.
All of the Audited Financial Statements were (x) prepared in accordance with
GAAP; (y) fairly present the financial condition and results of operations of
MACESS as of the dates and for the periods indicated; and (z) were audited by
Ernst & Young LLP, whose report thereon is without qualification or explanatory
paragraphs; provided, however, the method of revenue
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recognition is set out in footnote number 2 (Accounting Policies) to the Audited
Financial Statements and is further explained on Schedule 3.6C. All of the
Unaudited Financial Statements were prepared in accordance with GAAP, but
exclude footnote disclosures, statements of changes in stockholder's equity,
statements of cash flows, and, except for the August 1995 Balance Sheet, normal
year-end adjustments. The Unaudited Financial Statements present fairly, in all
material respects, the financial position of MACESS as of August 31, 1995 and
the results of operations for the eight month period then ended. Set out on
Schedule 3.6C is an explanation of the generally accepted accounting policies
used by MACESS in connection with: (i) revenue recognition, (ii) capitalization
and amortization of developed Software, and (iii) fixed asset depreciation. The
Principals shall not be liable to SunGard in connection with any adverse change
in MACESS' financial statement or condition caused by a change in an accounting
policy of MACESS made after the Effective Date provided that such old accounting
policy of MACESS was in accordance with GAAP. The Principals shall be
responsible for any net loss, cost, expense or taxes resulting from any errors
or omissions in the application of such policies that may have been incurred on
or before the Effective Date, provided, however, that such amount shall be
reduced by any timing difference benefit received in future periods.
3.7. Assets. Schedule 3.7A includes detailed lists of all Assets of
MACESS reflected on the August 1995 Balance Sheet, itemized by balance sheet
account, including (a) Cash Assets, itemized by bank or other account, showing
cost and market value if different from cost; (b) Accounts Receivable, showing
customer names, individual invoice dates, individual invoice amounts and
allowances for doubtful accounts, or, in the case of earned but not billed
receivables, customer names and individual dates on which the receivables are
billable; (c) other current Assets, itemized by category and with appropriate
explanation; (d) Tangible Property, grouped as to type, showing cost,
accumulated depreciation and net book value; and (e) Software and Intangibles,
showing cost or amount capitalized, accumulated amortization and net book value.
MACESS has good and marketable title to all of its Assets and has the right to
transfer all rights, title and interest in such Assets, free and clear of any
Encumbrance (as defined in Section 1.8). Except for the Assets listed on
Schedule 3.7B, no other Assets are necessary to operate MACESS' Business.
3.8. MACESS' Obligations. Schedule 3.8 includes detailed lists of
all Obligations of MACESS reflected on the August 1995 Balance Sheet, itemized
by balance sheet account, and with aggregate net balances equal to the balances
on the August 1995 Balance Sheet, including (a) accounts payable, (b) accrued
expenses and reserves, itemized by category and with appropriate explanation,
and (c) other current and long-term liabilities. Except as described on Schedule
3.8, none of MACESS' Obligations are guaranteed by any Person.
3.9. Operations Since August 31, 1995. Except as set forth on
Schedule 3.9, from August 31, 1995 to the date of this Agreement:
(a) Except in the ordinary course of its business consistent with its
past practices, MACESS has not (a) created or assumed any Encumbrance upon any
of its business or Assets, (b) incurred any Obligation, (c) made any loan or
advance to any Person; (d) assumed, guaranteed or otherwise become liable for
any Obligation of any Person; (e) committed for any capital expenditure; (f)
purchased, leased, sold, abandoned or otherwise acquired or disposed of any
business or Assets; (g) waived any right or canceled any debt or claim; (h)
assumed or entered into any Contract other than this Agreement; (i) increased,
or
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authorized an increase in, the compensation or benefits paid or provided to any
of its directors, officers, employees, salesmen, agents or representatives; or
(j) done anything else outside the ordinary course of business, whether or not
specifically described in any of the foregoing clauses which would have a
material adverse effect on its business, Assets or financial condition.
(b) Even in the ordinary course of its business consistent with its
past practices, MACESS has not incurred any Obligation, made any loan to any
Person, acquired or disposed of any business or Assets, entered into any
Contract (other than customer contracts and other than the acquisition of
computer hardware and software directly related to customer contracts) or other
transaction, or done any of the other things described in Section 3.9(a),
involving an amount exceeding $25,000 in any single case or $100,000 in the
aggregate.
(c) There has been no material adverse change or material casualty
loss affecting MACESS, MACESS' Business, Assets or financial condition, and
there has been no material adverse change in the financial performance of
MACESS.
(d) Since August 31, 1995 (a) MACESS has not incurred any outstanding
bank debt or notes payable, (b) MACESS has not incurred any outstanding
indebtedness to any current or former stockholder, director or officer of MACESS
(excluding compensation and benefits due to such Persons in their capacities as
employees, officers or directors of MACESS and excluding indebtedness described
on Schedule 3.22) or to any affiliate (as such term is defined for purposes of
the Securities Exchange Act of 1934, as amended ("1934 Act")) of MACESS or any
of its stockholders, directors or officers, (c)except as set forth on Schedule
3.9, MACESS has not had any Obligation for any overdrafts with respect to any of
its bank accounts or other Cash Assets, and (d) no dividend or other
distribution of Cash Assets or other Assets has been made by MACESS to or on
behalf of any of the Principals (excluding compensation and benefits due to such
Persons in their capacities as employees, officers or directors of MACESS). All
deferred bonuses and compensation due from MACESS to the Principals or other
employees or agents of MACESS have been fully paid or accrued on MACESS' August
1995 Balance Sheet.
3.10. Accounts Receivable. All Accounts Receivable listed in
Schedule 3.7 arose in the ordinary course of business and are proper and valid
accounts receivable. To the knowledge of the Principals, there are no refunds,
discounts, rights of setoff or assignment affecting any such Accounts
Receivable. The accounts receivable included in Schedule 3.7 are included
utilizing the method of revenue recognition described on Schedule 3.6C.
3.11. Tangible Property. MACESS has good and marketable title to all
of its Tangible Property, free and clear of any Encumbrances. Except as set
forth on Schedule 3.11, all of MACESS' Tangible Property is located at MACESS'
offices or facilities, and MACESS has the full and unqualified right to require
the immediate return of any of its Tangible Property which is not located at
MACESS' offices or facilities. All Tangible Property used by MACESS is in good
condition, ordinary wear and tear excepted, and is sufficient for MACESS'
operations as presently conducted.
3.12. Real Property. MACESS does not own any Real Property (as
defined in Section 1.19). Schedule 3.12 is a detailed list of all Real Property
leased by MACESS, showing location, rental cost and landlord. All Real Property
under lease to or otherwise used by MACESS is in good condition, ordinary wear
and tear excepted, and is sufficient for the
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current operations of MACESS. No such Real Property, nor the occupancy,
maintenance or use thereof, is in violation of, or breach or default under, any
Contract or Law, and no notice from any lessor, governmental body or other
Person has been received by MACESS or any of the Principals or served upon any
such Real Property claiming any violation of, or breach or default under, any
Contract or Law, or requiring or calling attention to the need for any work,
repairs, construction, alteration or installations. MACESS has not placed or
caused to be placed, and neither MACESS nor any of the Principals has any
knowledge or belief that there were or are any Hazardous Substances on or under
any of MACESS' Real Property.
3.13. Software and Intangibles. Schedule 3.13 is an accurate and
complete list and description of all Software (as defined in Section 1.21) and
Intangibles (as defined in Section 1.12) owned, marketed, licensed, used or
under development by MACESS, and, in the case of Software, a product
description, the language in which it is written and the type of hardware
platform(s) on which it runs. Except for general business third party Software
which is readily, commercially available and is not embedded in or necessary to
run any of the Software products of MACESS, no other Software is required to
operate MACESS' Business. Except as explained on Schedule 3.13, MACESS has good
and marketable title to, and has the full right to use, all of the Software and
Intangibles listed on Schedule 3.13, free and clear of any Encumbrance (as
defined in Section 1.8). No rights of any third party are necessary to market,
license, sell, modify, update, and/or create derivative works for the Software
listed on Schedule 3.13. With respect to the Software listed on Schedule 3.13,
(a) MACESS maintains machine-readable master-reproducible copies, reasonably
complete technical documentation and/or user manuals for the most current
releases or versions thereof and for all earlier releases or versions thereof
currently being supported by MACESS; (b) in each case, the machine-readable copy
substantially conforms to the corresponding source code listing; (c) such
Software is written in the language set forth on Schedule 3.13, for use on the
hardware set forth on Schedule 3.13 with standard operating systems; (d) such
Software can be maintained and modified by reasonably competent MACESS
programmers familiar with such language, hardware and operating systems; and (e)
in each case, the Software operates in accordance with the user manual therefor
without material operating defects. None of the Software or Intangibles listed
on Schedule 3.13, or their respective past or current uses, has violated or
infringed upon, or is violating or infringing upon, any Software, patent,
copyright, trade secret or other Intangible of any Person. MACESS has
adequately maintained all trade secrets and copyrights with respect to the
Software. To the best knowledge of MACESS and each of the Principals, no Person
is violating or infringing upon, or has violated or infringed upon at any time,
any of the Software or Intangibles listed on Schedule 3.13. None of the
Software or Intangibles listed on Schedule 3.13 is owned by or registered in the
name of any current or former owner, stockholder, partner, director, executive,
officer, employee, salesman, agent, customer, representative or contractor of
any of the Principals nor does any such Person have any interest therein or
right thereto, including but not limited to the right to royalty payments.
3.14. Contracts. Schedule 3.14 is an accurate and complete list of
all of the following types of Contracts to which Macess is a party or by which
MACESS is bound (collectively, the "Specified Contracts"), grouped into the
following categories and, where applicable, subdivided by product line or
division: (a) customer Contracts; (b) Contracts for the purchase or lease of
Real Property or otherwise concerning Real Property owned or used by MACESS
including a description of the Real Property; (c) loan agreements, mortgages,
notes, guarantees and other financing Contracts; (d) except for Contracts for a
total commitment of less than $15,000, Contracts for the purchase, lease and/or
maintenance of
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computer equipment and other equipment, Contracts for the purchase, license,
lease and/or maintenance of software under which MACESS is the purchaser,
licensee, lessee or user, and other supplier Contracts; (e) employment,
consulting and sales representative Contracts (excluding Contracts which
constitute Employee Benefit Plans listed on Schedule 3.16, and excluding oral
Contracts with employees for "at will" employment); (f) Contracts under which
any rights in and/or ownership of any Software product of MACESS, any prior
version thereof, or any part of the customer base or business of MACESS was
acquired; and (g) except for Contracts for a total commitment of less than
$15,000, other Contracts (excluding Contracts which constitute Insurance
Policies listed on Schedule 3.20, excluding this Agreement and all other
Contracts entered into between MACESS and SunGard, or among MACESS, SunGard and
other parties in connection herewith). A description of each oral Specified
Contract is included on Schedule 3.14, and copies of each written Specified
Contract have been delivered to SunGard and Newco. Except as set forth on
Schedule 3.14, each of MACESS' license Contracts for its software products is
identical to the form license agreement therefor that is attached as part of
Schedule 3.14, and each of MACESS' maintenance Contracts is identical to the
form maintenance agreement therefor that is attached as part of Schedule 3.14.
With respect to each applicable customer Contract, Schedule 3.14 will include,
as of August 31, 1995, a complete description of all work remaining to be
performed under such Contracts (together with an estimate of the number of
person hours required to complete such work), and all credits granted to, or
other adjustments made for, the customer to be applied against future payments
or purchases. Except as provided on Schedule 3.14, all customers have accepted
the Software described in their respective customer Contracts. Except as set
forth on Schedule 3.14, with respect to each of the Specified Contracts, MACESS
neither is in default thereunder nor would be in default thereunder with the
passage of time, the giving of notice of both. Except as set forth on Schedule
3.14, to the best knowledge and belief of MACESS and each of the Principals,
none of the other parties to any Specified Contract is in default thereunder or
would be in default thereunder with the passage of time, the giving of notice or
both. Except as set forth on Schedule 3.14, MACESS has not given or received
any notice of default or notice of termination with respect to any Specified
Contract, and each Specified Contract is in full force and effect in accordance
with its terms. The Specified Contracts are all the Contracts necessary and
sufficient to operate MACESS' Business. Except as set forth on Schedule 3.14,
there are no currently outstanding proposals or offers submitted by MACESS to
any customer, prospect, supplier or other Person which, if accepted, would
result in a legally binding Contract of MACESS involving an amount or commitment
exceeding $25,000 in any single case or an aggregate amount or commitment
exceeding $100,000 in the aggregate.
3.15. Employees and Independent Contractors. Schedule 3.15A is a
list of all of MACESS' employees and (a) their titles or responsibilities; (b)
their social security numbers and principal residence address; (c) their dates
of hire; (d) their current salaries or wages; (e) their last compensation
changes and the dates on which such changes were made; (f) any specific bonus,
commission or incentive plans or agreements for or with them; and (g) any
outstanding loans or advances made to them. MACESS has delivered to SunGard and
Newco an accurate and complete list of all bonuses, commissions and incentives
paid to the employees listed on Schedule 3.15A at any time during the past
twelve months. Schedule 3.15B is a list of all sales representatives and
independent contractors engaged by MACESS, their tax identification numbers and
states of residence, their payment arrangements (if not set forth in a Contract
listed or described on Schedule 3.14), and a brief description of their jobs or
projects currently in progress. Except as limited by any employment Contracts
listed on Schedule 3.14 and except for any limitations of general application
which may be imposed
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under applicable employment Laws, MACESS has the right to terminate the
employment of each of its employees at will and to terminate the engagement of
any of its independent contractors without payment to such employee or
independent contractor other than for services rendered through termination and
without incurring any penalty or liability other than liability for severance
pay in accordance with MACESS' disclosed severance pay policy. MACESS is in
full compliance with all Laws respecting employment practices. MACESS has never
been a party to or bound by any union or collective bargaining Contract, nor is
any such Contract currently in effect or being negotiated by or on behalf of
MACESS. Since January 1, 1990, MACESS has not experienced any labor problem
that was or is material to MACESS. MACESS' relations with its employees are
currently on a good and normal basis. Except as indicated on Schedule 3.15A,
since January 1, 1994, no employee of MACESS having an annual salary of $40,000
or more has indicated an intention to terminate or has terminated his or her
employment with MACESS. Neither MACESS nor any of the Principals has any
knowledge or belief that the transactions contemplated by this Agreement will
adversely affect relations with MACESS' employees.
3.16. Employee Benefit Plans. Except as set forth on Schedule 3.16,
MACESS does not sponsor, maintain or contribute to, or have any ongoing
Obligations with respect to, any Employee Benefit Plan (as defined in
Section 1.7). Schedule 3.16 includes an accurate description of each of MACESS'
Employee Benefit Plans that is currently in effect or as to which MACESS has any
ongoing Obligation, which description indicates, generically, the employees
covered or affected thereby and all of MACESS' Obligations thereunder. Copies
of all Employee Benefit Plans described on Schedule 3.16 and all written
materials used by MACESS to describe its Employee Benefit Plans to employees
have been delivered to SunGard and Newco. Except as set forth on Schedule 3.16,
MACESS is not a party to any Contract to create any additional Employee Benefit
Plan or to continue, modify, change or terminate any of its current Employee
Benefit Plans. MACESS has no responsibility or liability with respect to a
layoff or other employment termination except as described in its severance
policies, a copy of which is attached to Schedule 3.16. If permitted or
required by applicable Law, MACESS has properly submitted, or intends to
properly submit, all Employee Benefit Plans described on Schedule 3.16, for the
purpose of meeting the applicable requirements of ERISA and/or the Internal
Revenue Code of 1986, as amended ("Code"), to the Internal Revenue Service
("IRS") for its approval within the time prescribed therefor. Copies of all
favorable determination letters from the IRS, the most recent annual returns on
Form 5500 and the most current actuarial or valuation reports (as applicable)
for all Employee Benefit Plans described on Schedule 3.16, have been delivered
to SunGard and Newco. Each such valuation report correctly shows the value of
the assets in the fund as of the date thereof, the total accrued and vested
liabilities, all of MACESS' contributions, and the assumptions on which the
calculations are based. With respect to each Employee Benefit Plan described on
Schedule 3.16, (a) MACESS has made all payments required to be made by it to
date, has accrued all payments due but not yet payable as of the date of this
Agreement in accordance with GAAP (as defined in Section 1.9, and shall have
made on or before the Effective Date all payments due as of the Effective Date;
(b) MACESS has operated and currently operates such plan in compliance with the
plan documents and to the knowledge of MACESS and the Principals all applicable
Laws, including without limitation ERISA and the Code (including, but not
limited to, Section 4980B thereof) and the regulations thereunder; (c) there has
not been any Reportable Event (as defined in ERISA); (d) there has not been any
event described in Section 4068(f) of ERISA; (e) there has not been any
violation of the reporting and disclosure provisions of the Code and ERISA; (f)
there has not been any Prohibited Transaction (as defined in ERISA or the Code);
(g) there has not been any violation of Section 404, 406 or 407
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of ERISA; and (h) there has not been any termination or partial termination of
such plan (including, but not limited to, any termination or partial termination
attributable to the transactions contemplated by this Agreement). There are no
circumstances arising out of MACESS' sponsorship of any Employee Benefit Plan
that will result in MACESS having any Obligations with respect thereto, other
than Obligations for contributions, benefit payments, administrative costs and
liabilities incurred in the ordinary course of business consistent with past
practices. There will be no Obligations of MACESS under Title IV of ERISA if any
of its Employee Benefit Plans are terminated as of the Effective Date. MACESS
has not incurred, and will not incur, any Obligation to the Pension Benefit
Guaranty Corporation (or any successor thereto), including, but not limited to,
any Obligation under Section 4063 or 4064 of ERISA. MACESS has not incurred, and
will not incur, any withdrawal liability, and MACESS does not have, and will not
have, any contingent withdrawal liability, to any multiemployer plan under
ERISA, as amended by the Multiemployer Pension Plan Amendments Act of 1980.
There has never been in existence, and there currently does not exist, any
Employee Pension Benefit Plan (as defined in Section 3(2) of ERISA) involving
MACESS that is subject to the provisions of Title IV of ERISA, or any such Plan
that is subject to the funding requirements of Section 412 of the Code or
Sections 301 et seq. of ERISA. To the knowledge of MACESS and the Principals, no
event has occurred, and no circumstances currently exist, that do or will result
in any liability under ERISA or the Code in connection with any Employee Pension
Benefit Plan that has been established, maintained or contributed to by MACESS
or any other entity or entities which, together with MACESS, constitute elements
of either a controlled group of corporations (within the meaning of Section
414(b) of the Code), a group of trades or businesses under common control
(within the meaning of Section 414(c) of the Code or Section 4001 of ERISA), an
affiliated service group (within the meaning of Section 414(m) of the Code), or
another arrangement covered by Section 414(o) of the Code.
3.17. Customers, Prospects and Suppliers. All customers of MACESS
have signed a Contract and are listed in the list of customers included as part
of Schedule 3.14. Schedule 3.17 is a complete list of all current active
prospects and material suppliers of MACESS. Except as set forth on Schedule
3.17, since January 1, 1992, none of MACESS' customers or suppliers has given
notice or otherwise indicated to MACESS that it will or intends to terminate or
not renew its Contract with MACESS before the scheduled expiration date or
otherwise terminate its relationship with MACESS. The relationship of MACESS
with its customers are currently on a good and normal basis and MACESS has not
experienced any material problems with customers or suppliers since January 1,
1992. Neither MACESS nor any of the Principals has any knowledge or belief that
the transactions contemplated by this Agreement will adversely affect relations
with any of MACESS' customers or suppliers. MACESS has delivered to SunGard and
Newco an accurate and complete copy of MACESS' most recent customer surveys.
3.18. Taxes. Schedule 3.18 is an accurate and complete list of all
federal, state, local, foreign and other Tax (as defined in Section 1.23)
returns and reports (including, but not limited to, information returns)
(collectively "Returns") filed by MACESS with respect to its last five (5)
fiscal years. Accurate and complete copies of all federal, state, local and
foreign income and sales tax Returns filed by MACESS with respect to its last
five fiscal years are attached to Schedule 3.18, and accurate and complete
copies of all other Tax Returns listed thereon have been delivered or made
available to SunGard. Except as explained on Schedule 3.18, (a) MACESS has
properly and timely filed all Tax Returns required to be filed by it, all of
which were accurately prepared and completed; (b) MACESS has properly withheld
from payments to its employees, agents, representatives, contractors and
suppliers all
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amounts required by Law to be withheld for Taxes; (c) except as reserved against
on the August 1995 Balance Sheet in accordance with GAAP, MACESS has paid all
amounts for Taxes required to be paid by it except for current Taxes which are
not yet due or Taxes which are being contested in good faith (as disclosed on
Schedule 3.18) by appropriate proceedings diligently prosecuted, provided that,
in either case, adequate reserves therefor have been established in accordance
with GAAP; (d) except as set forth on Schedule 3.18(d), no audit of MACESS by
any governmental taxing authority has ever been conducted, or is currently
pending or, to the knowledge of MACESS or any of the Principals, threatened; (e)
no notice of any proposed Tax audit, or of any Tax deficiency or adjustment, has
been received by MACESS, and there is no reasonable basis for any Tax deficiency
or adjustment to be assessed against MACESS; and (f) there are no agreements or
waivers currently in effect that provide for an extension of time for the
assessment of any tax against MACESS.
3.19. Proceedings and Judgments. Except as described on Schedule
3.19, (a) no Proceeding (as defined in Section 1.18) is currently pending or
threatened in writing, nor has any Proceeding occurred at any time since January
1, 1990, to which MACESS is or was a party, or by which MACESS or any of its
Assets or business is or was affected; (b) no Judgment (as defined in Section
1.13) is currently outstanding, nor has any Judgment been outstanding at any
time since January 1, 1990, against MACESS, or by which MACESS or any of its
Assets or business is or was affected; and (c) no breach of contract, breach of
warranty, tort, negligence, infringement, product liability, discrimination,
wrongful discharge or other claim of any nature has been asserted or threatened
in writing by or against MACESS at any time since January 1, 1990, and there is
no basis for any such claim. As to each matter described on Schedule 3.19,
accurate and complete copies of all pertinent pleadings, judgments, orders,
correspondence and other legal documents have been delivered to SunGard and
Newco.
3.20. Insurance. Schedule 3.20 is an accurate and complete list and
description of all Insurance Policies (as defined in Section 1.11) currently
owned or maintained by MACESS (excluding Insurance Policies that constitute
Employee Benefit Plans described on Schedule 3.16) and all liability and errors
and omissions Insurance Policies owned or maintained by MACESS and/or any of its
predecessors at any time since January 1, 1990. Except as indicated on Schedule
3.20, all such Insurance Policies are or were on an "occurrence" rather than a
"claims made" basis. MACESS has not received notice of cancellation with
respect to any such current Insurance Policy, and there is no basis for the
insurer thereunder to terminate any such current Insurance Policy. Except as
indicated on Schedule 3.20, accurate and complete copies of all Insurance
Policies described on Schedule 3.20 have been delivered to SunGard and Newco.
Each such Insurance Policy is or was in full force and effect during the
period(s) of coverage indicated on Schedule 1.11. Except as described on
Schedule 3.20, there are no claims that are pending under any of the Insurance
Policies described on Schedule 3.20.
3.21. Questionable Payments. None of the Principals, nor any of
MACESS' current or former partners, owners, stockholders, directors, executives,
officers, representatives, agents or employees (when acting in such capacity or
otherwise on behalf of MACESS or any of its predecessors), (a) has used or is
using any corporate funds for any illegal contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (b) has used or is using
any corporate funds for any direct or indirect unlawful payments to any foreign
or domestic government officials or employees; (c) has violated or is violating
any provision of the Foreign Corrupt Practices Act of 1977, except where such
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violation was not, is not and will not be material to MACESS; (d) has
established or maintained, or is maintaining, any unlawful or unrecorded fund of
corporate monies or other properties; (e) has made, at any time since January 1,
1990, any false or fictitious entries on the books and records of MACESS; (f)
has made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment of any nature using corporate funds or otherwise on behalf of
MACESS; or (g) made any material favor or gift that is not deductible for
federal income tax purposes using corporate funds or otherwise on behalf of
MACESS.
3.22. Related Party Transactions. Except as described on Schedule
3.22 and except for any employment Contracts listed on Schedule 3.14, there are
no real estate leases, personal property leases, loans, guarantees, Contracts,
transactions, understandings or other arrangements of any nature between MACESS
and any current or former partners, owners, stockholders, director, executive,
officer or controlling Person of MACESS (or any of their respective
predecessors) or any other Person affiliated with MACESS (or any of their
respective predecessors).
3.23. Brokerage Fees. Except as set forth on Schedule 3.23, no
Person acting on behalf of MACESS is or shall be entitled to any brokerage or
finder's fee in connection with the transactions contemplated by this Agreement.
3.24. Acquisition Proposals. Since the date hereof, MACESS has not,
directly or indirectly through an authorized agent or representative, solicited,
initiated or responded to any inquiries or proposals from, or participated in
any discussions or negotiations with, or provided any non-public information to,
any Person or group (other than SunGard and its officers, employees,
representatives and agents) concerning sale of all or substantially all of the
Assets of MACESS, any sale of shares of capital stock, or other securities of
MACESS, or any merger, consolidation or similar transaction involving MACESS.
3.25. Full Disclosure. No representation or warranty made in this
Section 3 or pursuant hereto (a) contains any untrue statement of any fact; or
(b) omits to state any fact that is necessary to make the statements made, in
the context in which made, not false or misleading in any respect. The copies
of documents attached as Schedules to this Agreement or otherwise delivered or
made available to SunGard and Newco in connection with the transactions
contemplated by this Agreement, are accurate and complete, and are not missing
any amendments, modifications, correspondence or other related papers which
would be pertinent to SunGard's or Newco's understanding thereof in any respect.
Section 4: Several Representations of Principals
Knowing that SunGard and Newco rely thereon, each of the Principals
severally represents and warrants to SunGard and Newco as of the date of this
Agreement, and covenants with SunGard and Newco, as follows:
4.1. Ownership of Shares. Such Principal (a) is the sole legal and
beneficial owner of all shares of MACESS' Stock held by him of record, as
indicated on Schedule 3.3; (b) has good and marketable title to his shares of
MACESS Stock (as defined below), except as set forth on Schedule 4.1, free and
clear of any Encumbrance (as defined in Section 1.8); and (c) except as set
forth on Schedule 4.1, has the full legal right to transfer good and marketable
title to such shares free and clear of any Encumbrance.
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4.2. Effect of Agreement. Such Principal's execution, delivery and
performance of this Agreement, and his consummation of the transactions
contemplated by this Agreement (a) do not constitute a default or breach
(immediately or after the giving of notice, passage of time or both) under any
Contract to which he is a party or by which he is bound, (b) do not constitute a
violation of any Law (as defined in Section 1.14) or Judgment (as defined in
Section 1.13) that is applicable to him or to the business or Assets of MACESS,
or to the transactions contemplated by this Agreement, (c) do not accelerate or
otherwise modify any Obligation (as defined in Section 1.15) of MACESS, (d) do
not result in the creation of any Encumbrance (as defined in Section 1.8) upon,
or give to any third party any interest in, any of the business or Assets of
MACESS, or any of the capital stock of MACESS, except as contemplated by this
Agreement and except for restrictions generally imposed on transfer under
federal and state securities Laws, and (e) except as stated on Schedule 3.2 and
except for the filing of the Certificate of Merger with the proper officials of
the State of Alabama, do not require the Consent (as defined in Section 1.4) of
any Person (as defined in Section 1.17). This Agreement constitutes the valid
and legally binding agreement of such Principal, enforceable against him in
accordance with its terms.
4.3. Acquisition Proposals. Since the date hereof, such Principal has
not, directly or indirectly through an authorized agent or representative,
solicited, initiated or responded to any inquiries or proposals from, or
participated in any discussions or negotiations with, or provided any non-public
information to, any Person or group (other than SunGard and its officers,
employees, representatives and agents) concerning sale of all or substantially
all of the Assets of MACESS, any sale of shares of capital stock, or other
securities of MACESS, or any merger, consolidation or similar transaction
involving MACESS.
4.4. Brokerage Fees. Except as set forth on Schedule 4.4, no Person
acting on behalf of such Principal is or shall be entitled to any brokerage or
finder's fee in connection with the transactions contemplated by this Agreement.
4.5. Full Disclosure. To the best knowledge of such Principal, no
representation or warranty made by such Principal in this Section 4 contains
any untrue statement of any material fact, or omits to state any fact that is
necessary to make the statements made, in the context in which made, not false
or misleading in any material respect. To the best knowledge of such Principal,
there is no fact (excluding facts about general economic or market conditions)
that has not been disclosed to SunGard and Newco in the Schedules referenced in
this Agreement or otherwise in writing that has, or which such Principal
believes will have, (a) a material adverse effect on MACESS' business, MACESS'
Assets taken as a whole or MACESS's financial condition, or (b) a material
adverse effect on the ability of such Principal to perform his obligations under
this Agreement.
Section 5: Representations of SunGard and Newco
Knowing that the Principals rely thereon, SunGard and Newco, jointly and
severally represent and warrant to MACESS and the Principals as of the date of
this Agreement, and covenant with MACESS and the Principals, as follows:
5.1. Organization. SunGard and Newco each is a corporation that is duly
organized, validly existing and in good standing under the Laws (as defined in
Section 1.14) of the States of Delaware and Alabama, respectively. SunGard and
Newco each possesses the full corporate power and authority to own its Assets,
conduct its business as and where
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such business is presently conducted, and enter into this Agreement and the
Plan. Newco is a wholly owned subsidiary of SunGard.
5.2. Agreement. Each of SunGard's and Newco's execution, delivery and
performance of this Agreement, and its consummation of the transactions
contemplated by this Agreement, (a) have been duly authorized by all necessary
corporate actions by their respective boards of directors, and in the case of
Newco, its sole stockholder; (b) do not constitute a violation of or default
under their respective charters or bylaws; (c) do not constitute a default or
breach (immediately or after the giving of notice, passage of time or both)
under any Contract to which SunGard or Newco is a party or by which SunGard or
Newco is bound; (d) do not constitute a violation of any Law (as defined in
Section 1.14) or Judgment (as defined in Section 1.13) that is applicable to it
or to their respective businesses or Assets, or to the transactions contemplated
by this Agreement; and (e) except as stated on Schedule 5.2, do not require the
Consent (as defined in Section 1.4) of any Person (as defined in Section 1.17).
This Agreement constitutes the valid and legally binding agreement of each of
SunGard and Newco, enforceable against each of them in accordance with its
terms.
5.3. SunGard's Stock. The authorized capital stock of SunGard is
60,000,000 shares of common stock, $0.01 par value per share ("SunGard Stock"),
of which approximately 18,907,417 shares were issued and outstanding as of June
30, 1995 (such number of issued and outstanding shares is not adjusted for the
two-for-one stock spit for which the payment date was July 7, 1995), and
5,000,000 shares of preferred stock, $0.01 par value per share, none of which is
issued or outstanding. The shares of SunGard Stock to be issued as the merger
consideration ("Total SunGard Stock Issued"): (a) when issued, shall be validly
authorized, validly issued, fully paid and nonassessable; (b) constitute part of
the class of securities that has been registered under the 1934 Act; and (c)
will not be issued in violation of the preemptive right of any stockholder of
SunGard.
5.4. SEC Filings. SunGard has provided to Principals accurate and
complete copies of the following reports and documents filed by SunGard with the
SEC ("SEC Filings"): (a) SunGard's Annual Report on Form 10-K for the year ended
December 31, 1994; (b) SunGard's 1994 Annual Report to Stockholders; (c)
SunGard's April 3, 1995 Proxy Statement; and (d) SunGard's Quarterly Report on
Form 10-Q for the quarters ended March 31, 1995 and June 30, 1995. As of their
respective dates, none of the SEC Filings contained any untrue statement of any
material fact or omitted any material fact required to be stated therein or
necessary to make the statements therein not misleading, except to the extent
that any such statement or omission has been modified or superseded in a SEC
Filing subsequently filed with the SEC. The SEC Filings comply with Federal
securities law.
5.5. Investment Matters. SunGard is acquiring the MACESS Stock for its
own account for investment purposes only and not with a view to, or for sale in
connection with, any resale or distribution thereof.
5.6. Brokerage Fees. Except as set forth on Schedule 5.6, no Person
acting on behalf of SunGard is or shall be entitled to any brokerage or finder's
fee in connection with the transactions contemplated by this Agreement.
5.7. Operations since June 30, 1995. Since June 30, 1995, there has
been no adverse change or casualty loss having a material adverse effect on
SunGard and its
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subsidiaries taken as a whole, or on their businesses, assets or financial
condition taken as a whole, and there has been no material adverse change in
SunGard's and its subsidiaries' financial performance taken as a whole.
Section 6: Securities Filings and Approval of the MACESS Stockholders
6.1. Registration Statement. As promptly as practicable after the
execution of this Agreement, SunGard shall prepare and file such registration
statement (the "Registration Statement") as shall be necessary to register under
the Securities Act of 1933, as amended, ("1933 Act") the shares of SunGard Stock
to be issued and delivered to the Principals in accordance with this Agreement
and the Plan. MACESS and each Principal shall promptly provide to SunGard all
information concerning the business, financial condition and affairs of MACESS
that may be required or reasonably requested by SunGard in connection with the
preparation or filing of the Registration Statement, including without
limitation the financial statements, financial statement schedules and auditor's
consents required to be included therein or filed therewith, and shall otherwise
cooperate and cause their representatives to cooperate with SunGard in the
preparation and filing of the Registration Statement. The parties shall use
their best efforts to cause the Registration Statement to become effective as
soon as practicable and to distribute copies of SunGard's prospectus and MACESS'
information statement contained in such Registration Statement (the "Information
Statement-Prospectus") to the MACESS Stockholders. After the execution of this
Agreement and before the effectiveness of the Registration Statement, and
thereafter until the Closing Date, MACESS and each Principal shall promptly
advise SunGard of any facts that should be set forth in an amendment or
supplement to the Information Statement-Prospectus or the Registration
Statement, and each party shall take all actions that may be necessary to keep
the Registration Statement and the Information Statement-Prospectus current and
effective until the Closing Date. Except with the prior written consent of
SunGard, neither MACESS nor any Principal shall publish any communication, other
than the Information Statement-Prospectus, relating to this Agreement, the Plan
or the Transactions. SunGard shall not be required to maintain the
effectiveness of the Registration Statement or the Information Statement-
Prospectus for the purpose of resale by affiliates of MACESS.
6.2. MACESS Stockholder Approval. As promptly as practicable after
the Registration Statement becomes effective and in accordance with applicable
law, MACESS will duly hold a meeting of its Stockholders ("Stockholders
Meeting") for the purpose of voting on the Merger. MACESS shall not postpone or
adjourn the Stockholders Meeting without the prior written consent of SunGard.
Unless the board of directors of MACESS, in its good faith judgment determines
that it is otherwise required by law, MACESS shall recommend the Merger to the
Stockholders for approval. After the Stockholders shall have approved the
Merger, such approval shall not be revocable. MACESS shall not solicit proxies
from the Stockholders for use at the Stockholders Meeting. Except with the prior
written consent of SunGard, neither MACESS nor any Principal shall distribute
any materials to the Stockholders in connection with the Stockholders Meeting
other than the Information Statement-Prospectus.
6.3. MACESS' and Principals' Representations as to the
Registration Statement. MACESS and the Principals, jointly and severally,
warrant and represent to SunGard and Newco and covenant with SunGard and Newco
that, at the time the Registration Statement shall become effective and at all
times subsequent to effectiveness up to and
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including the Closing Date, the Registration Statement and all amendments or
supplements thereto, with respect to the information therein furnished by
MACESS, any Principal or its or their representatives, (a) will comply in all
material respects with the provisions of the 1933 Act, the 1934 Act and the
respective rules and regulations thereunder, and (b) will 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 contained therein not
misleading. MACESS and the Principals, jointly and severally, warrant and
represent to SunGard and Newco, that all information furnished by MACESS, any
Principal or its or their representatives for use in the filings described in or
contemplated by this Agreement and the Plan shall 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 contained therein not
misleading. MACESS and the Principals shall, jointly and severally, indemnify
and hold harmless SunGard, Newco, each Person who controls SunGard and/or Newco
(within the meaning of Section 15 of the 1933 Act) and SunGard's and Newco's
respective directors, officers and representatives, from and against any and all
losses, claims, liabilities, damages and expenses (including reasonable
attorneys' fees and court costs) that arise out of or are based upon a breach of
any of the warranties, representations and covenants of this Section 6.3.
6.4. SunGard's and Newco's Representations as to Registration
Statement. SunGard and Newco, jointly and severally, warrant and represent to
MACESS and the Principals and covenant with MACESS and the Principals that, at
the time the Registration Statement shall become effective and at all times
subsequent to effectiveness up to and including the Closing Date, the
Registration Statement and all amendments or supplements thereto, with respect
to the information therein furnished by SunGard or its representatives, (a) will
comply in all material respects with the provisions of the 1933 Act, the 1934
Act and the respective rules and regulations thereunder, and (b) will 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 contained
therein not misleading. SunGard and Newco, jointly and severally, warrant and
represent to MACESS and the Principals that all information furnished by SunGard
or its representatives for use in the filings described in or contemplated by
this Agreement and the Plan shall 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 contained therein not misleading. SunGard and Newco,
jointly and severally, shall indemnify and hold harmless MACESS, the Principals
and the directors, officers and representatives of MACESS, from and against any
and all losses, claims, liabilities, damages and expenses (including reasonable
attorneys' fees and court costs) that arise out of or are based upon a breach of
any of the warranties, representations and covenants of this Section 6.4.
6.5. State Securities Filings. SunGard shall make all filings
under applicable state securities laws that are required in connection with the
Transactions. MACESS and each Principal shall cooperate with SunGard and furnish
all information that may be required or reasonably requested by SunGard in
connection with such filings.
Section 7: Certain Obligations of MACESS and Principals Pending Closing
7.1. Conduct of MACESS' Business. Between the date of this
Agreement and the Closing Date, except as disclosed in the Schedules or with the
prior written consent of SunGard:
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(a) MACESS shall, and the Principals shall cause MACESS to, (i)
conduct its business in a diligent manner, (ii) not make any material change in
its business practices, and (iii) use its best efforts to preserve its business
organization intact, keeping available the services of its current officers,
employees, salesmen, agents and representatives, and maintaining the good will
of its customers, suppliers and other Persons having business relations with
MACESS. Each Principal involved in MACESS' daily business operations shall
remain actively involved in MACESS' daily business operations, consistent with
his past practices. MACESS and the Principals shall consult with SunGard as to
the management of MACESS' business and affairs.
(b) Except in the ordinary course of its business consistent with
its past practices, MACESS shall not, and the Principals shall not permit MACESS
to, (i) create or assume any claims, liens or other encumbrances upon any of its
business or assets, (ii) incur any debt, liability or obligation, (iii) make any
loan or advance, (iv) assume, guarantee or otherwise become liable for any debt,
liability or obligation of any third party, (v) commit for any capital
expenditure, (vi) sell, abandon or otherwise dispose of any assets, (vii) waive
any right or cancel any debt or claim, (viii) assume, enter into or modify any
contract other than this Agreement and the Plan (and any other contract
contemplated herein), (ix) increase, or authorize an increase in, the
compensation or benefits paid or provided to any of its directors, officers,
employees, salesmen, agents or representatives, or (x) do anything else outside
the ordinary course of its business consistent with its past practices, whether
or not specifically described in any of the foregoing clauses.
(c) Even in the ordinary course of its business consistent with
its past practices, MACESS shall not, and the Principals shall not permit MACESS
to, borrow or lend any funds, purchase any goods or services, lease any
equipment, incur any debt, liability or obligation, or enter into any contract
(excluding customer contracts and related commitments entered into in the
ordinary course of business consistent with past practices) or other transaction
involving, in any single case, an amount exceeding $25,000 or, in the aggregate,
an amount exceeding $100,000.
(d) MACESS shall not, and the Principals shall not permit MACESS
to, (i) permit or cause a breach or default by it under any of its contracts,
insurance policies, licenses or permits, (ii) adopt or enter into any new
Employee Benefit Plan or modify any existing Employee Benefit Plan, (iii)
participate in any merger, consolidation or reorganization, (iv) begin to engage
in any new type of business, (v) acquire the business or any bulk assets of any
other Person, (vi) completely or partially liquidate or dissolve, or (vii)
terminate any material part of its business.
(e) MACESS shall, and the Principals shall cause MACESS to, (i)
maintain its real estate and fixed personal property assets in good condition,
(ii) maintain its insurance policies in full force and effect, (iii) repair,
restore or replace any of its assets that is damaged, destroyed, lost or stolen,
(iv) comply with all applicable laws, (v) properly file all tax returns, annual
reports and other returns and reports required to be filed by it, and (vi) fully
pay when due all taxes and fees payable by it.
(f) MACESS shall, and the Principals shall cause MACESS to,
maintain its corporate existence and good standing in its jurisdiction of
incorporation. MACESS shall not, and the Principals shall not permit MACESS to,
amend its charter or bylaws.
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(g) MACESS shall not, and the Principals shall not permit MACESS
to, redeem, retire or purchase, or create, grant or issue any options, warrants
or other Contracts or Contract rights with respect to, any shares of MACESS
Stock, or any other capital stock or other securities of MACESS, or create,
grant or issue any stock options, stock appreciation rights, phantom shares or
other similar rights. Neither MACESS nor the Principals shall permit any sales
of the shares of MACESS Stock.
(h) MACESS shall not nor shall any Principal sell, assign, give,
pledge or otherwise transfer, dispose of or encumber any shares of the MACESS
Stock, or any other capital stock or other securities of MACESS owned or held by
it or him.
(i) MACESS and each Principal shall maintain all shares of the
MACESS Stock owned or held by it or him free and clear of all Encumbrances.
(j) Neither MACESS nor any Principal shall buy, sell or engage in
any other transaction involving SunGard Stock, other securities of SunGard or
any equity interests in SunGard, other than the Merger and the other
Transactions.
(k) Neither MACESS nor any Principal shall enter into any
contract or agreement that commits it or him to take any action or omit to take
any action that would be inconsistent with any of the provisions of this Section
7.1 or any other provisions of this Agreement or the Plan.
7.2. Interim Financial Statements. For each calendar month that
ends between August 31, 1995 and the Closing Date, MACESS shall, and the
Principals shall cause MACESS to, promptly prepare and deliver to SunGard
monthly financial statements, which shall be prepared in accordance with the
principles utilized in preparing the August 1995 Balance Sheet and shall reflect
all adjustments (consisting only of normal recurring adjustments) that are
necessary for a fair presentation of the financial condition of MACESS as of the
end of such month and of the results of operations of MACESS for such month.
7.3. Access to Information. For the purpose of keeping SunGard
informed as to MACESS' financial condition and business operations, between the
date of this Agreement and the Closing Date, MACESS and the Principals shall (a)
permit SunGard and its authorized representatives to have reasonable access to
MACESS' facilities and offices during normal business hours, to observe MACESS'
operations, to meet with MACESS' officers, and MACESS officers will be
responsive to all reasonable requests of SunGard for information.
7.4. Consents. Between the date of this Agreement and the Closing
Date, MACESS and the Principals shall in good faith use their best efforts to
obtain all consents and approvals of all lenders, lessors, vendors, customers
and other Persons necessary to permit the Merger and the other Transactions to
be consummated without violating any loan agreement, lease or other material
contract to which MACESS is a party or by which MACESS is bound, and to give the
notices and make the filings described on Schedule 3.2.
7.5. Acquisition Proposals. Between the date of this Agreement and
the Closing Date, neither MACESS, nor any Principal, nor any officer, employee,
representative or agent of MACESS shall, directly or indirectly, solicit,
initiate, encourage or respond to any inquiries or proposals from, or
participate in any discussions or negotiations with, or provide any non-public
information to, any Person or group (other than SunGard and its officers,
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employees, representatives and agents) concerning any bulk sale of any of
MACESS' assets, any sale of shares of capital stock or other securities of
MACESS, or any merger, consolidation or similar transaction involving MACESS.
MACESS and each Principal shall immediately advise SunGard of, and communicate
to SunGard the terms of, any such inquiry or proposal received by MACESS or any
Principal.
7.6. Advice of Changes. Between the date of this Agreement and the
Closing Date, MACESS and each Principal shall promptly advise SunGard, in
writing, of any fact of which any of them obtains knowledge and that, if
existing or known as of the date of this Agreement, would have been required to
be set forth or disclosed in or pursuant to this Agreement (it being understood
that such advice shall not be deemed to modify the representations, warranties
and covenants of MACESS and/or any Principal contained in this Agreement).
7.7. Hart-Scott-Rodino Filing. Between the date of this Agreement
and the Closing Date, Featheringill shall file on behalf of Featheringill with
respect to the Transactions the filing(s) required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended ("HSR Act"), and shall deliver to
SunGard, accurate and complete copies of such filing(s). MACESS and the
Principals shall use their best efforts to cause the applicable waiting periods
under the HSR Act with respect to the Transactions to expire, and shall promptly
provide all information concerning the business, financial condition and affairs
of MACESS and the Principals that may be requested by the Federal Trade
Commission or the Antitrust Division of the Department of Justice in connection
with such filing(s) under the HSR Act.
7.8. 8-K Reports. MACESS, the Principals and MACESS' accountants
shall fully cooperate with SunGard and its accountants in connection with the
furnishing of information, financial statements, audit reports, consents and
other items required by SunGard in connection with the preparation and filing by
SunGard of Current Reports on Form 8-K with respect to the Transactions, and
MACESS and its accountants also shall assist SunGard and its accountants in
connection with the preparation of any "pro forma" financial information to be
included in any such Form 8-K.
7.9. Binding Effect. Subject to approval of the Merger by the
MACESS Stockholders, MACESS shall take such action as is required on its part to
consummate the Merger and the other Transactions as of the earliest practicable
date. MACESS shall not take, or cause to be taken, or to the best of its ability
permit to be taken, any action that would impair the prospect of completing the
Merger and the other Transactions. Neither MACESS nor any Principal shall
knowingly take any action that would prevent the Merger from qualifying for
pooling-of-interests accounting treatment.
Section 8: Certain Obligations of SunGard and Newco Pending Closing
8.1. Corporate Status. Between the date of this Agreement and the
Closing Date:
(a) SunGard and Newco each shall maintain its corporate existence
and good standing in the States of Delaware and Alabama, respectively, and shall
not amend its charter or bylaws in any manner that would be inconsistent with
its obligations under this Agreement or the Plan.
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(b) Neither SunGard nor Newco shall enter into any contract or
agreement that commits it to take any action or omit to take any action that
would be inconsistent with any of the provisions of this Section 8.1 or any
other provisions of this Agreement or the Plan.
8.2. Material Consents. Between the date of this Agreement and the
Closing Date, SunGard and Newco shall in good faith cooperate with MACESS and
the Principals in their efforts to obtain the consents and approvals, and to
give the notices and make the filings, described in Schedule 5.2.
8.3. SEC Reports. Between the date of this Agreement and the
Closing Date, SunGard shall file all reports and other filings required to be
filed by it under the 1934 Act, and SunGard shall deliver to MACESS and the
Principals, promptly after they become available, all registration statements,
proxy statements, reports and other filings, and all amendments thereto, that
SunGard files with the SEC.
8.4. Hart-Scott-Rodino Filing. Between the date of this Agreement
and the Closing Date, SunGard shall file on behalf of SunGard with respect to
the Transactions the filing(s) required under the HSR Act. SunGard and Newco
shall use their best efforts to cause the applicable waiting periods under the
HSR Act with respect to the Transactions to expire, and shall promptly provide
all information concerning the business, financial condition and affairs of
SunGard and Newco that may be requested by the Federal Trade Commission or the
Antitrust Division of the Department of Justice in connection with such
filing(s) under the HSR Act.
8.5. Advice of Changes. Between the date of this Agreement and the
Closing Date, SunGard shall promptly advise MACESS and the Principals, in
writing, of any fact of which it obtains knowledge and that, if existing or
known as of the date of this Agreement, would have been required to be set forth
or disclosed in or pursuant to this Agreement (it being understood that such
advice shall not be deemed to modify the representations, warranties and
covenants of SunGard and/or Newco contained in this Agreement).
8.6. Binding Effect. SunGard and Newco shall take such action as
is required on their part to consummate the Merger and the other Transactions as
of the earliest practicable date, and neither SunGard nor Newco shall take, or
cause to be taken, or to the best of its ability permit to be taken, any action
that would impair the prospect of completing the Merger and the other
Transactions. Neither SunGard nor Newco shall knowingly take any action that
would prevent the Merger from qualifying for pooling-of-interests accounting
treatment.
Section 9: Conditions Precedent to MACESS' and Principals' Closing Obligations
Each obligation of MACESS and the Principals to be performed on the
Closing Date shall be subject to the satisfaction of each of the conditions
stated in this Section 9, except to the extent that such satisfaction is waived
by MACESS in writing.
9.1. Effectiveness of Registration Statement. The Registration
Statement shall have become effective under the 1933 Act, no stop order
suspending its effectiveness shall be in effect, and no stop order proceeding
with respect thereto shall be pending or threatened.
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9.2. Approval of the MACESS Stockholders. The Merger shall have
been duly approved by the affirmative vote of MACESS Stockholders entitled to
vote at least two thirds of each class of the outstanding shares of MACESS
Stock.
9.3. SunGard's and Newco's Representations. All representations,
warranties and certifications made by SunGard and/or Newco in this Agreement or
pursuant hereto shall not have been false or misleading in any material respect.
9.4. SunGard's and Newco's Performance. All of the terms and
conditions of this Agreement to be satisfied or performed by SunGard and/or
Newco on or before the Closing Date shall have been substantially satisfied or
performed.
9.5. Absence of Proceedings. No action, suit or other proceeding
shall have been instituted (excluding any action, suit or proceeding instituted
by or on behalf MACESS or any Principal), no judgment or order shall have been
issued, and no new law shall have been enacted, on or before the Closing Date,
that seeks to or does prohibit or restrain, or that seeks damages as a result
of, the consummation of the Merger or any of the other Transactions.
9.6. Adverse Changes. There shall not have been any adverse change
or casualty loss having a material adverse effect on SunGard and its
subsidiaries taken as a whole, or on their businesses, assets or financial
condition taken as a whole, between the date of this Agreement and the Closing
Date, and there shall not have been any material adverse change in SunGard's and
its subsidiaries' financial performance taken as a whole between the date of
this Agreement and the Closing Date.
9.7. Hart-Scott-Rodino. All applicable waiting periods with
respect to the transactions contemplated by this Agreement shall have expired
under the HSR Act, and neither the Federal Trade Commission nor the Antitrust
Division of the Department of Justice shall have (a) required any party to
divest itself of any assets in order to consummate such transactions, or (b)
taken any actions to prohibit the consummation of such transactions.
Section 10: Conditions Precedent to SunGard's and Newco's Closing Obligations
Each obligation of SunGard and Newco to be performed on the Closing Date
shall be subject to the satisfaction of each of the conditions stated in this
Section 10, except to the extent that such satisfaction is waived by SunGard in
writing.
10.1. Qualification for Pooling Treatment. SunGard shall have
received a letter from Coopers & Lybrand L.L.P., dated the Closing Date, to the
effect that, based on the facts known to such accountants as of such date, the
Merger will qualify for pooling-of-interests accounting treatment if closed and
consummated in accordance with this Agreement and the Plan.
10.2. Effectiveness of Registration Statement. The Registration
Statement shall have become effective under the 1933 Act, no stop order
suspending its effectiveness shall be in effect, and no stop order proceeding
with respect thereto shall be pending or threatened.
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10.3. Affiliate Letters. SunGard shall have received, from each
affiliate of MACESS other than MACESS and the Principals (if any), a duly signed
letter, in form and substance satisfactory to SunGard, stating that such
affiliate (a) has not sold any shares of capital stock or other securities of
MACESS or of SunGard at any time during the 30-day period ending on the Closing
Date, and (b) will not sell, assign, give, pledge or otherwise transfer, dispose
of or reduce such affiliate's risk relating to any of such affiliate's shares of
capital stock or other securities of MACESS or of SunGard until SunGard shall
have published financial results covering at least 30 days of post-Merger
combined operations of SunGard and MACESS ("Publication Date") and, thereafter,
except in compliance with applicable federal and state securities laws.
10.4. Approval of the MACESS Stockholders. The Merger shall have
been duly approved by the affirmative vote of MACESS Stockholders entitled to
vote at least ninety-two percent (92%) of each class of the outstanding shares
of MACESS Stock.
10.5. MACESS' and the Principals' Representations. All
representations, warranties and certifications made by MACESS and/or any
Principal in this Agreement or pursuant hereto shall not have been false or
misleading in any material respect.
10.6. MACESS' and the Principals' Performance. All of the terms and
conditions of this Agreement to be satisfied or performed by MACESS and/or any
Principal on or before the Closing Date shall have been substantially satisfied
or performed.
10.7. Absence of Proceedings. No action, suit or other proceeding
shall have been instituted (excluding any such action, suit or proceeding
initiated by or on behalf SunGard or any of its subsidiaries), no judgment or
order shall have been issued, and no new law shall have been enacted, on or
before the Closing Date, that seeks to or does prohibit or restrain, or that
seeks damages as a result of, the consummation of the Merger or any of the other
Transactions.
10.8. Adverse Changes. There shall not have been any material
adverse change or material uninsured casualty loss affecting MACESS, or its
business, assets or financial condition, between the date of this Agreement and
the Closing Date, and there shall not have been any material adverse change in
the financial performance of MACESS between the date of this Agreement and the
Closing Date.
10.9. Hart-Scott-Rodino. All applicable waiting periods with
respect to the transactions contemplated by this Agreement shall have expired
under the HSR Act, and neither the Federal Trade Commission nor the Antitrust
Division of the Department of Justice shall have (a) required any party to
divest itself of any assets in order to consummate such transactions, or (b)
taken any actions to prohibit the consummation of such transactions.
Section 11: Closing
11.1. Closing. The closing of the Merger (the "Closing") shall be
held at a mutually agreeable time on the date of the Stockholders Meeting or as
soon thereafter as is practicable (the "Closing Date"), at such location and in
such manner as is mutually acceptable to the parties. On the Closing Date or as
soon thereafter as is practicable, the parties shall cause the Plan and a proper
Certificate or Articles of Merger to be filed with the proper officials of the
State of Alabama, and the parties shall take such further actions as may be
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required by the State of Alabama, and any other applicable laws in connection
with the consummation of the Merger. The Merger shall be effective on the date
such filing is made with the State of Alabama (the "Effective Date").
11.2. Principals' Obligations at Closing. At the Closing, the
Principals shall deliver the following to SunGard:
(a) MACESS Stock. Stock certificates representing all of the
issued and outstanding shares of MACESS Stock, together with assignments
separate from certificate in blank, dated the Effective Date and duly executed
by the Principals.
(b) Documents of Transfer. All instruments or documents necessary
to change the names of the individuals who have access to or are authorized to
make withdrawals from or dispositions of all bank accounts, other accounts,
certificates of deposits, marketable securities, other investments, safe deposit
boxes, lock boxes and safes of MACESS described on Schedule 3.4 and all keys and
combinations to all safe deposit boxes, lock boxes and safes of MACESS and other
depositories described on Schedule 3.4.
(c) Closing Certificate. A certificate, dated the Closing Date,
in form and substance satisfactory to SunGard, signed by the Chairman and
President of MACESS and by each Principal, certifying, jointly and severally,
that (i) all representations and warranties made by MACESS and/or any Principal
in this Agreement are correct in all material respects as of the Closing Date,
as if made on and as of the Closing Date, except for changes contemplated or
permitted by this Agreement, (ii) all of the terms and conditions of this
Agreement to be satisfied or performed by MACESS and/or any Principal on or
before the Closing Date have been substantially satisfied or performed, and
(iii) there has not been any material adverse change or material uninsured
casualty loss affecting MACESS, or its business, assets or financial condition,
between the date of this Agreement and the Closing Date, and there has not been
any material adverse change in MACESS' financial performance between the date of
this Agreement and the Closing Date.
(d) Articles of Mergers. The Certificate of Merger (as defined in
Section 11.3(b)), dated the Closing Date and duly executed by MACESS.
(e) Consents. The original signed copies of all Consents listed
on Schedule 3.2.
(f) Escrow. The Escrow Agreement (as defined in
Section 11.3(c)), dated the Closing Date and duly executed by MACESS, the
Stockholders Agent and each Principal.
(g) Minute Books and Resignations. All of the original minute
books and stock books of MACESS and duly executed resignations, dated the
Effective Date, of all directors and officers of MACESS other than as specified
by SunGard.
(h) Good Standing. Good standing certificates for MACESS, dated
no earlier than ten (10) days before the Closing Date, from the State of Alabama
and from each other jurisdiction in which it is qualified or registered to do
business as a foreign corporation.
(i) Incumbency Certificate. A certificate of the Secretary of
MACESS as to the incumbency and signatures of the officers of MACESS executing
this Agreement.
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(j) Resolutions. Copies of the resolutions duly adopted by the
board of directors of MACESS, authorizing MACESS to execute, deliver and perform
this Agreement and the Plan and to consummate the Transactions, certified by an
officer of MACESS as in full force and effect, without modification or
rescission, on and as of the Closing Date.
(k) Opinion of Counsel. An opinion of counsel to MACESS and the
Principals addressed to SunGard and dated the Closing Date, in form and
substance reasonably acceptable to SunGard.
(l) General Release. A General Release of MACESS, in form
acceptable to SunGard, dated the Closing Date and duly executed by each of the
Principals, releasing MACESS from all claims other than those arising under
employment contracts, and as to Richard T. Harley, a Promissory Note and
Covenant Not to Compete Agreement.
(m) Employees and Independent Contractors. Copies of employee
agreements, in the form normally used by MACESS, signed by all current employees
of MACESS who as of the date of this Agreement had not yet signed such
agreements (as identified on Schedule 14); and a copy of such an employee
agreement signed by Featheringill provided that Featheringill's employee
agreement shall acknowledge and except out the matters referred to in Section
14.5.
(n) Shareholder's Basis. A schedule listing for each Stockholder
of MACESS that Stockholder's tax basis in his or its MACESS Stock.
(o) Stock Pledge Agreements. For each Stockholder of MACESS who
received MACESS Stock on December 28, 1994 ("Note Stock") in exchange for a note
payable to MACESS ("Note"), a Stock Pledge Agreement, dated the Closing Date, in
form and substance satisfactory to SunGard, executed by such Stockholder and by
MACESS, providing for the waiver by MACESS of its repurchase rights with respect
to such Stockholder's Note Stock, in exchange for and consideration of the
receipt by MACESS of a pledge of such Stockholder's SunGard Stock received in
the Merger as collateral for such Stockholder's Note.
(p) Certain Closing Representations. A certificate, dated the
Closing Date, in form and substance satisfactory to SunGard, signed by the
Principals, in which the Principals represent and warrant to SunGard and Newco
as of the Closing Date as follows:
(i) There is no present plan or intention by the Principals
to sell, exchange, or otherwise dispose of a number of shares of SunGard Stock
(as defined in Section 5.3) received in the Merger that would reduce the
Principals' ownership of SunGard Stock to a number of shares having a value, as
of the Effective Date of the Merger, of less than 50% of the value of all of the
formerly outstanding stock of MACESS as of the same date. For purposes of this
representation shares of MACESS Stock and shares of SunGard Stock held by any of
the Principals and otherwise sold, redeemed, or disposed of prior or subsequent
to the Merger shall be included. In the Merger, shares of MACESS Stock
representing control of MACESS, as defined in Section 368(c) of the Code, will
be exchanged solely for voting stock of SunGard. Except as set forth on Schedule
3.3, MACESS does not have outstanding any warrants, options, convertible
securities, or any other type of right pursuant to which any Person could
acquire stock in MACESS that, if exercised or converted, would affect SunGard's
acquisition or retention of control of MACESS, as defined in Section 368(c) of
the Code.
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MACESS is not an investment company within the meaning of Section
368(a)(2)(F)(iii)) and (iv) of the Code.
(ii) As to each Principal, such Principal has received and
examined the Information Statement-Prospectus, as well as SunGard's April 3,
1995 Proxy Statement, SunGard's Annual Report on Form 10-K for the year ended
December 31, 1994, SunGard's 1994 Annual Report to Stockholders and SunGard's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995 and June
30, 1995. Such Principal has had the opportunity to ask questions and receive
answers from SunGard concerning SunGard, and has been furnished with all other
information about SunGard which he or it has requested.
(q) Other Documents. All other agreements, certificates,
instruments, financial statement certifications, opinions of counsel and
documents reasonably requested by SunGard in order to fully consummate the
Transactions and carry out the purposes and intent of this Agreement and the
Plan.
11.3. SunGard's and Newco's Obligations at Closing. At the Closing,
SunGard and Newco shall deliver the following to the Principals:
(a) SunGard Stock. Certificates representing the shares of
SunGard Stock to which the Principals are entitled to at Closing, in accordance
with Section 2 and the Plan.
(b) Articles of Mergers. Articles of Merger for the State of
Alabama, in form and substance acceptable to the parties ("Certificate of
Merger"), dated the Closing Date and duly executed by Newco.
(c) Escrow. An Escrow Agreement, substantially in the form
attached hereto as Exhibit 11.3(c) ("Escrow Agreement"), dated the Closing Date
and duly executed by SunGard and the escrow agent thereunder.
(d) Closing Certificate. A certificate, dated the Closing Date,
in form and substance satisfactory to the Principals, signed by the Chief
Financial Officer of SunGard, certifying that (i) all representations and
warranties made by SunGard and/or Newco in this Agreement are correct in all
material respects as of the Closing Date, as if made on and as of the Closing
Date, except for changes contemplated or permitted by this Agreement, (ii) all
of the terms and conditions of this Agreement to be satisfied or performed by
SunGard and/or Newco on or before the Closing Date have been substantially
satisfied or performed, and (iii) there shall not have been any adverse change
or casualty loss having a material adverse effect on SunGard and its
subsidiaries taken as a whole, or on their businesses, assets or financial
condition taken as a whole, between the date of this Agreement and the Closing
Date, and there shall not have been any material adverse change in SunGard's and
its subsidiaries' financial performance taken as a whole between the date of
this Agreement and the Closing Date.
(e) Good Standing. Good standing certificates for SunGard and
Newco, dated no earlier than ten (10) days before the Closing Date, from the
States of Delaware and Alabama, respectively.
(f) Resolutions. Copies of the resolutions duly adopted by the
board of directors of SunGard and by the board of directors and the sole
stockholder of Newco,
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authorizing SunGard and Newco, respectively, to execute, deliver and perform
this Agreement and the Plan and to consummate the Transactions, certified by an
officer of SunGard or Newco, respectively, as in full force and effect, without
modification or rescission, on and as of the Closing Date.
(g) Incumbency Certificate. A certificate of the Secretary of
each of SunGard and Newco as to the incumbency and signatures of the officers of
SunGard and Newco executing this Agreement.
(h) Opinion of Counsel. An opinion of counsel to SunGard,
addressed to the Principals and dated the Closing Date, in form and substance
reasonably acceptable to the Principals,
(i) Other Documents. All other agreements, certificates,
instruments, opinions of counsel and documents reasonably requested by the
Principals in order to fully consummate the Transactions and carry out the
purposes and intent of this Agreement.
Section 12: Certain Obligations of Principals after Closing
12.1. Restrictions on Dispositions of SunGard Stock. From and after
the Closing Date, none of the Principals shall sell, assign, give, pledge
(except in connection with fully recourse bank loans) or otherwise transfer,
dispose of or reduce his risk relating to any of his shares of capital stock or
other securities of MACESS or of SunGard until the Publication Date (as defined
in Section 10.3), and, thereafter, except in compliance with applicable federal
and state securities laws.
12.2. Cooperation with SunGard and the Surviving Corporation. From
and after the Closing Date, (a) each Principal shall fully cooperate to transfer
to SunGard and the Surviving Corporation the full control and enjoyment of
MACESS' Business and Assets; (b) none of the Principals shall take any action,
directly or indirectly, alone or together with others, that obstructs or impairs
the smooth assumption by SunGard and the Surviving Corporation of MACESS'
Business and the Assets; (c) each Principal shall fully cooperate with SunGard
and the Surviving Corporation in connection with the preparation and audit of
any financial statements of MACESS for periods before the Closing Date,
including, where appropriate, the signing of such management representation
letters are required in connection with such audit; and (d) the Principals shall
promptly deliver to SunGard and the Surviving Corporation all correspondence,
papers, documents and other items and materials received by any of the
Principals or found to be in the possession of any of the Principals which
pertain to MACESS' Business or the Assets.
12.3. Further Assurances. At any time and from time to time after
the Closing Date, at SunGard's request and without further consideration (but at
SunGard's expense), each Principal shall promptly execute and deliver all such
further agreements, certificates, instruments and documents and perform such
further actions as SunGard may reasonably request, in order to fully consummate
the Merger and the other Transactions and to fully carry out the purposes and
intent of this Agreement and the Plan, including, but not limited to, such
documents and actions as may be required in connection with the continuation or
termination of MACESS' employee benefit plans, the adoption by the Surviving
Corporation of SunGard's employee benefit plans, and the filing of tax returns
of MACESS for all periods ending on or before the Effective Date.
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Section 13: Certain Obligations of SunGard and the Surviving Corporation after
Closing
13.1. Final Tax Returns. Surviving Corporation shall timely prepare
and file all federal and state income tax returns required to be filed by MACESS
for the period from January 1, 1995 through the Effective Date, and the
Principals shall fully cooperate with the Surviving Corporation with respect
thereto.
13.2. Employment Matters. All Persons who are full-time employees
of MACESS on the Effective Date shall continue to be employed by the Surviving
Corporation after the Effective Date on an "at-will" basis and for salaries or
wages consistent with the levels in effect as of the date of this Agreement.
13.3. Employee Benefit Plans. As soon as is practicable after the
Effective Date, SunGard and the executives of MACESS shall review MACESS'
Employee Benefit Plans to determine which such plans should remain in effect as
plans of the Surviving Corporation and which should be replaced with SunGard's
Employee Benefit Plans, with a view toward replacing all of MACESS' Employee
Benefit Plans with SunGard's Employee Benefit Plans except where cost factors or
unusual circumstances dictate otherwise. Immediately after the Merger, except
as provided above in this Section 13.3, the employees of MACESS shall be
entitled to participate in SunGard's applicable standard Employee Benefit Plans,
as and when such employees become eligible to participate under the terms of
such plans, and after MACESS' employees are eligible to participate in a SunGard
standard Employee Benefit Plan, the corresponding, separate Employee Benefit
Plans of MACESS shall be terminated. Each employee of MACESS shall receive
credit, to the extent possible under the applicable standard Employee Benefit
Plans of SunGard, for his or her years of service with MACESS.
13.4. Disposition of Savings Plan. After the Effective Date, the
following plans of MACESS shall be handled as follows:
(a) As soon as is practicable after the Effective Date, MACESS'
401(k) (the "401(k) Plan") shall be "frozen" and the employees of MACESS shall
begin to participate in SunGard's 401(k) Savings Plan. As soon as is practicable
after the Effective Date but not later than nine months thereafter, the full
accounts of the MACESS employees under the MACESS 401(k) Plan shall be
transferred directly to the accounts of such employees under SunGard's 401(k)
Savings Plan, and the MACESS 401(k) Plan shall terminate.
(b) As soon as is practicable after the Effective Date, the
Surviving Corporation shall adopt and join in SunGard's Employee Stock Purchase
Plan.
Section 14: Restrictive Covenants of the Principals.
14.1. Certain Acknowledgements. Each Principal expressly
acknowledges that:
(a) "Imaging Business" shall mean the developing, enhancing and
licensing of imaging-based, automated document management or work flow
management proprietary Software and computer systems that provide functionality
the same as or substantially similar to the functionality contained in the
Software products and computer systems marketed, licensed, owned, claimed to
have been owned, under development or planned by MACESS at any time prior to the
Effective Date (or, with respect to a Principal who remains an employee
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of the Surviving Corporation after the Effective Date, the date of such
Principal's termination of employment with the Surviving Corporation, SunGard or
any of its affiliates) ("Imaging Software") and providing data processing and
related services using the Imaging Software and such computer systems;
irrespective of the hardware platform or software platform on which the Imaging
Software and computer systems operate, irrespective of the technology utilized
to effect such functionality, irrespective of the markets to which the Imaging
Software and computer systems are marketed or licensed and irrespective of which
existing and/or future subsidiaries of SunGard may engage in such business.
SunGard and all existing and future subsidiaries of SunGard, including MACESS,
engaged in the Imaging Business are referred to as the "SunGard Group."
(b) The Imaging Business is highly competitive, is marketed
throughout the United States, and requires long sales "lead times" often up to
one year. MACESS expends, and the SunGard Group will expend, substantial time
and money, on an ongoing basis, to train its employees, maintain and expand its
customer base, and improve and develop its software and services.
(c) In connection with the Transactions and during his tenure as
an owner and/or executive of MACESS, he has had access to proprietary and
confidential property, knowledge and information of MACESS' operations which,
after Closing, shall be proprietary and confidential property, knowledge and
information of the SunGard Group; such property, knowledge and information must
be kept in strict confidence to protect the Imaging Business and maintain the
SunGard Group's competitive positions in the marketplace; and such knowledge and
information would be useful to competitors of the SunGard Group for indefinite
periods of time.
(d) The covenants of this Section 14 (the "Covenants") are a
material part of this Agreement and are an integral part of the obligations of
the Principals hereunder; the Covenants are supported by good and adequate
consideration; and the Covenants are reasonable and necessary to protect the
legitimate business interests of the SunGard Group.
14.2. Nondisclosure Covenants. At all times after the date of this
Agreement, for an indefinite period of time, except with SunGard's prior written
consent, or except in connection with the proper performance of services for and
as an employee of the SunGard Group, none of the Principals shall, directly or
indirectly, in any capacity:
(a) Communicate, publish or otherwise disclose to any Person, or
use for the benefit of any Person, any confidential or proprietary property,
knowledge or information of the SunGard Group or concerning any of its business,
software, assets or financial condition, no matter when or how such knowledge or
information was obtained, including without limitation (a) any information
concerning the Assets, or the conduct and details of MACESS' Business; (b) the
identity of customers and prospects, their specific requirements, and the names,
addresses and telephone numbers of individual contacts at customers and
prospects; (c) prices, renewal dates and other detailed terms of customer and
supplier Contracts and proposals; (d) pricing policies, marketing and sales
strategies, methods of delivering Software and services, and Software and
service development projects and strategies; (e) source code, object code, user
manuals, technical manuals and other documentation for Software products; (f)
screen designs, report designs and other designs, concepts and visual
expressions for Software products; (g) employment and payroll records; (h)
forecasts, budgets and other
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nonpublic financial information; and (i) expansion plans, management policies,
methods of operation, and other business strategies and policies.
(b) Disclose, use or refer to any proprietary software or other
confidential or proprietary property, knowledge or information of the SunGard
Group, no matter when or how acquired, for any purpose not in furtherance of the
business and interests of the SunGard Group, including without limitation the
purposes of designing, developing, marketing and/or selling any Software that is
similar to, visually or functionally, or competitive with any proprietary
Software of the SunGard Group.
14.3. Noncompetition Covenants. During the period beginning on the
date of this Agreement and ending on the third (3rd) anniversary of the
Effective Date (or with respect to the Principals employed by Surviving
Corporation, the later of: (i) the third (3rd) anniversary of the Effective
Date, or (ii) the first (1st) anniversary of the date of termination of
employment with SunGard or any of its affiliates), except with SunGard's prior
written consent, none of the Principals shall, directly or indirectly, in any
capacity, at any location worldwide:
(a) Communicate with or solicit any Person who is or during such
period becomes a customer, prospect, supplier, employee, salesman, agent or
representative of, or a consultant to, the SunGard Group, in any manner which
interferes or might interfere with such Person's relationship with the Imaging
Business of the SunGard Group, or in an effort to obtain any such Person as a
customer, supplier, employee, salesman, agent or representative of, or a
consultant to, any other Person that conducts a business competitive with or
similar the Imaging Business.
(b) Market or sell, in any manner other than in furtherance of
the business and interests of the SunGard Group, any Imaging Software.
(c) Establish, own, manage, operate, finance or control, or
participate in the establishment, ownership, management, operation, financing or
control of, or be a director, officer, employee, salesman, agent or
representative of, or be a consultant to, any Person that conducts an Imaging
Business.
It is the intent of the Parties that each of the Principals be prohibited for
said period from selling, marketing or furthering a system that has
substantially the same functionality as the Imaging Software and can be used in
lieu of the Imaging Software in a competitive manner against the Imaging
Software of the SunGard Group.
14.4. Certain Exclusions. Confidential and proprietary property,
knowledge and information of the SunGard Group shall not include any information
that is now known by or readily available to the general public, nor shall it
include any information that in the future becomes known by or readily available
to the general public other than as a result of any breach of the Covenants of
this Agreement. The ownership by any of the Principals of not more than five
percent (5%) of the outstanding securities of any public company shall not, by
itself, constitute a breach of the Covenants of Section 14.3, even if such
public company competes with the SunGard Group. Any noncontrolling, passive,
investment by Featheringill in the ordinary course of his venture capital
financing shall not constitute a breach of the Covenants of Section 14.3, even
if the company in which Featheringill makes such noncontrolling passive
investment competes with the SunGard Group.
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14.5. Newsoftco. The parties acknowledge that MACESS has entered
into an agreement with another company ("Newsoftco"), of which MACESS and
Featheringill are investors, to construct an electronic software system
consisting of the integration of various functions and programs described in
Exhibit 14.5 attached hereto. Based on the representations and information
contained in Exhibit 14.5, it is agreed that the development and the operation
of Newsoftco is not competitive with the current business and functionality of
MACESS and that the involvement of MACESS and Featheringill in Newsoftco shall
not constitute a breach of Section 14.3 of this Agreement.
14.6. Enforcement of Covenants. Each of the Principals expressly
acknowledges that it would be extremely difficult to measure the damages that
might result from any breach of the Covenants, and that any breach of the
Covenants will result in irreparable injury to the SunGard Group for which money
damages could not adequately compensate. If a breach of the Covenants occurs,
then the SunGard Group shall be entitled, in addition to all other rights and
remedies that it may have at law or in equity, to have an injunction issued by
any competent court enjoining and restraining the Principals and all other
Persons involved therein from continuing such breach. The existence of any
claim or cause of action that any of the Principals or any such other Person may
have against any member of the SunGard Group shall not constitute a defense or
bar to the enforcement of any of the Covenants. If the SunGard Group must
resort to litigation to enforce any of the Covenants that has a fixed term, then
such term shall be extended for a period of time equal to the period during
which a breach of such Covenant was occurring, beginning on the date of a final
court order (without further right of appeal) holding that such a breach
occurred or, if later, the last day of the original fixed term of such Covenant.
14.7. Scope of Covenants. If any Covenant, or any part thereof, or
the application thereof, is construed to be invalid, illegal or unenforceable,
then the other Covenants, or the other portions of such Covenant, or the
application thereof, shall not be affected thereby and shall be enforceable
without regard thereto. If any of the Covenants is determined to be
unenforceable because of its scope, duration, geographical area or other factor,
then the court making such determination shall have the power to reduce or limit
such scope, duration, area or other factor, and such Covenant shall then be
enforceable in its reduced or limited form.
Section 15: Indemnification
15.1. Principals' General Indemnification. From and after the
Closing Date, the Principals, with liability allocated in accordance with
Section 15.5, shall indemnify and hold harmless the members of the SunGard Group
and all affiliated SunGard entities, and their respective successors and
assigns, and their respective directors, officers, employees, agents and
representatives, from and against any and all actions, suits, claims, demands,
debts, liabilities, obligations, losses, damages, costs and expenses, including
without limitation reasonable attorney's fees and court costs, arising out of or
caused by, directly or indirectly, any or all of the following:
(a) Misrepresentation. Any misrepresentation, breach or failure
of any warranty or representation made in or pursuant to this Agreement.
(b) Unscheduled Obligations. Obligations other than: (i)
Obligations reflected on the August 1995 Balance Sheet, (ii) Obligations set
forth in Schedule 3.8, (iii) Obligations
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under Contracts listed or not required to be listed on Schedule 3.14, provided
that as of August 31, 1995, no such Obligation consisted of or resulted from a
default under or violation of any such Contract, and (iv) Obligations incurred
since August 31, 1995 and not in breach of any of the representations and
warranties made in Section 3.9 or any of the covenants of Section 7.1.
(c) Taxes. Any deficiency or adjustment for Taxes and related
interest, penalties and expenses, assessed against or imposed upon MACESS (or
its successor) with respect to any period ending on or before the Closing Date
to the extent not reserved against on the August 1995 Balance Sheet. The right
of the SunGard Group to indemnification under this Section 15.1(c) shall not be
affected by the fact that the applicable tax deficiency, adjustment, interest or
penalties may be assessed against SunGard as a result of the fact that, after
the Closing Date, MACESS shall be included in the consolidated federal income
tax returns filed by SunGard; provided that the Principals shall not be liable
for Taxes, interest, penalties and expenses to the extent resulting solely from
voluntary amendments to previously filed tax returns made after Closing by
MACESS or SunGard.
15.2. Indemnification Procedures. With respect to each event,
occurrence or matter ("Indemnification Matter") as to which any member of the
SunGard Group (the "Indemnitee") is entitled to indemnification from the
Principals (the "Indemnitor") under this Section 15:
(a) Notice. Within ten (10) days after the Indemnitee receives
written documents underlying the Indemnification Matter or, if the
Indemnification Matter does not involve a third-party action, suit, claim or
demand, promptly after the Indemnitee first has actual knowledge of the
Indemnification Matter, the Indemnitee shall give reasonably detailed notice to
the Indemnitor of the nature of the Indemnification Matter and the amount
demanded or claimed in connection therewith ("Indemnification Notice"), together
with copies of any such written documents.
(b) Defense. If a third-party action, suit, claim or demand is
involved, then, upon receipt of the Indemnification Notice, the Indemnitor
shall, at its expense and through counsel of its choice, promptly assume and
have sole control over the litigation, defense or settlement (the "Defense") of
the Indemnification Matter, except that (a) the Indemnitee may, at its option
and expense and through counsel of its choice, participate in (but not control)
the Defense; (b) if the Indemnitee reasonably believes that the handling of the
Defense by the Indemnitor may have a material adverse affect on the Indemnitee,
its business or financial condition, or its relationship with any customer,
prospect, supplier, employee, salesman, consultant, agent or representative,
then the Indemnitee may, at its option and expense and through counsel of its
choice, assume control of the Defense, provided that the Indemnitor shall be
entitled to participate in the Defense at its expense and through counsel of its
choice; (c) the Indemnitor shall not consent to any Judgment, or agree to any
settlement, without the Indemnitee's prior written consent; and (d) if the
Indemnitor does not promptly assume control over the Defense or, after doing so,
does not continue to prosecute the Defense in good faith, the Indemnitee may, at
its option and through counsel of its choice, but at the Indemnitor's expense,
assume control over the Defense. In any event, the Indemnitor and the
Indemnitee shall fully cooperate with each other in connection with the Defense,
including without limitation by furnishing all available documentary or other
evidence as is reasonably requested by the other.
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(c) Payments. All amounts owed by the Indemnitor to the
Indemnitee (if any) shall be paid in full within fifteen (15) business days
after a final Judgment (without further right of appeal) determining the amount
owed is rendered, or after a final settlement or agreement as to the amount owed
is executed.
15.3. Limits on Indemnification. Liability under this Section 15
shall be limited as follows:
(a) Threshold. No amount shall be payable under this Section 15
unless and until the aggregate amount otherwise payable under this Section 15
exceeds Six Hundred Thousand Dollars ($600,000), in which event the Indemnitor
shall pay such aggregate amount and all future amounts payable by the Indemnitor
under this Section 15.
(b) Ceiling.
(i) With respect to Indemnification Matters related to
title to or infringement caused by any Software product, or component thereof,
which was marketed, licensed, owned or claimed to have been owned by MACESS at
any time before Closing ("Software Indemnification Matter"), except as set forth
in Section 15.4, the total liability under this Section 15 shall not exceed two
thirds (2/3) of the Merger Consideration (as defined below), and each
Principal's total liability under this Section 15 shall not exceed two thirds
(2/3) of such Principal's share of the Merger Consideration, in accordance with
the applicable percentages set forth on Exhibit 15.5. "Merger Consideration"
means the Total SunGard Stock Issued multiplied by the last reported sale price
of one share of SunGard Stock, as reported on The Nasdaq Stock Market on the
Closing Date.
(ii) With respect to all other Indemnification Matters,
except as set forth in Section 15.4, the total liability under this Section 15
shall not exceed ten percent (10%) of the Merger Consideration and each
Principal's total liability under this Section 15 shall not exceed ten percent
(10%) of such Principal's share of the Merger Consideration, in accordance with
the applicable percentages set forth on Exhibit 15.5.
(c) Time Periods.
(i) With respect to Indemnification Matters expected to be
encountered in the routine audit process of a wholly-owned subsidiary, the
Indemnitor shall not be liable as to any such Indemnification Matter for which
the Indemnitee does not give an Indemnification Notice to the Indemnitor in
accordance with Section 15.2.(a) by March 31, 1996.
(ii) With respect to Software Indemnification Matters, the
Indemnitor shall not be liable as to any such Indemnification Matter for which
the Indemnitee does not give an Indemnification Notice to the Indemnitor in
accordance with Section 15.2.(a) within five (5) years after the Effective Date.
(iii) With respect to all other Indemnification Matters,
except as set forth in Section 15.4, the Indemnitor shall not be liable as to
any such Indemnification Matter for which the Indemnitee does not give an
Indemnification Notice to the Indemnitor in accordance with Section 15.2.(a)
within twelve (12) months after the Effective Date.
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15.4. Exceptions. None of the foregoing limitations shall apply
in the case of any Indemnification Matter involving (i) intentional
misrepresentation, fraud or criminal matters; or (ii) an Indemnification Matter
the basis of which is a breach of the representations and/or warranties
contained in Section 4.
15.5. Allocation.
(a) Except as to an Indemnification Matter the basis of which is
a breach of the representations and/or warranties contained in Section 4, all
liability under this Agreement shall be allocated in accordance with the
applicable percentages set forth on Exhibit 15.5. SunGard shall be paid first
from the Escrow Stock (as defined in the Escrow Agreement) to the extent
available and sufficient by having the Escrow Agent distribute from the Escrow
Stock to SunGard such number of shares of SunGard Stock as is equal to (i) the
amount for which the SunGard Group is entitled to indemnification divided by
(ii) the last reported sale price of one share of SunGard Stock, as reported on
The Nasdaq Stock Market on the Closing Date, and if the Escrow Stock is either
not available or not sufficient, then each Principal shall pay SunGard directly
such Principal's share of the insufficiency, in accordance with the applicable
percentages set forth on Exhibit 15.5.
(b) With respect to an Indemnification Matter the basis of which
is a breach of the representations and/or warranties contained in Section 4,
SunGard shall collect from such Principal's share of the Escrow Stock to the
extent available and sufficient, and if the Escrow Stock is either not available
or not sufficient, then such Principal shall pay SunGard directly the amount of
the insufficiency.
15.6. Mediation. If a dispute between the Principals and SunGard
arises out of or relates to an Indemnification Matter, and if the dispute cannot
be settled through negotiation between the parties, the parties agree first to
try in good faith to settle the dispute by non-binding mediation in Alabama
under the Mediation Rules of the American Arbitration Association with a neutral
mediator selected by the American Arbitration Association, before resorting to
litigation.
15.7. Featheringill and The Family Partnership Liability. The
foregoing in this Section 15 notwithstanding, all liability of Featheringill
and The Family Partnership under this Agreement shall be joint and several, and
for the purposes of allocating liability under Section 15.5 and determining the
maximum liability under Section 15.3.(b), the percentage applicable to the
joint and several liability of Featheringill and The Family Partnership shall
be the sum of the percentages next to their respective names on Exhibit 15.5.
Section 16: Other Provisions
16.1. Termination. At any time before the Closing, whether or not
the Merger has been approved by MACESS' Stockholders, this Agreement may be
terminated and the Merger abandoned in accordance with any of the following
methods:
(a) By the mutual written consents of SunGard and MACESS,
authorized by their respective boards of directors.
(b) By written notice from SunGard to MACESS, or from MACESS to
SunGard, if it becomes certain (for all practical purposes) that any of the
conditions to the
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closing obligations of the party giving such notice cannot be satisfied on or
before November 30, 1995, for a reason other than such party's default, and such
party is not willing to waive the satisfaction of such condition.
(c) By written notice from SunGard to MACESS, or from MACESS to
SunGard, if the Closing does not occur on or before November 30, 1995 for any
reason other than a breach of this Agreement by the party giving such notice.
16.2. Publicity. Without the prior written consent of SunGard,
neither MACESS nor any Principal shall make any public announcement regarding
the Transactions, nor shall they in any manner disseminate any information
regarding MACESS, SunGard, the Merger or the other Transactions, except through
distribution of the Registration Statement. Unless required by Law or stock
exchange or NASDAQ regulation, in the opinion of SunGard's counsel, neither
SunGard nor Newco shall make any public announcement regarding the Transactions
without first consulting with the Principals. With respect to any announcement
that any of the parties is required by Law or stock exchange or NASDAQ
regulation to issue, such party shall, to the extent possible under the
circumstances, review the necessity for the contents of the announcement with
the other party before issuing the announcement. The provisions of this Section
16.2 shall survive any termination of this Agreement for a period of five years.
16.3. Fees and Expenses.
(a) SunGard shall pay all of the fees and expenses incurred by it
and/or Newco; MACESS shall pay all of the fees and expenses incurred by it; and
the Principals shall pay any fees and expenses separately incurred by them, in
negotiating and preparing this Agreement and the Plan (and all other Contracts
and documents executed in connection herewith or therewith) and in consummating
the Transactions, except that all SEC and state filing or registration fees
shall be divided equally between MACESS and SunGard. MACESS shall not incur,
and Principals shall not permit MACESS to incur, legal, accounting, investment
banking, brokerage and other professional fees and expenses with respect to the
transactions contemplated by this Agreement, including, in an aggregate amount
exceeding $775,000.
(b) In order to induce SunGard to enter into this Agreement and
the Plan, MACESS shall make the following payments to SunGard (and Featheringill
hereby guarantees such payments) if the Merger is not consummated due to the
failure of the condition set forth in Section 10.4, provided that the failure of
MACESS Stockholders to approve the Merger is not due to a failure of one of the
conditions in Section 9 other than Section 9.2:
(i) A cash payment of Six Million Dollars ($6,000,000),
payable on December 1, 1995.
(ii) If a Later Sale (as defined below) occurs within one
year after the date of this Agreement, an additional cash payment equal to
Twenty-Five Percent (25%) of the following amount: the aggregate consideration
received by MACESS and/or the Stockholders in such Later Sale; minus Fifty-Seven
Million Dollars ($57,000,000) (or, if less than all of the \assets or shares of
MACESS are involved in the Later Sale, the corresponding portion of
$57,000,000); minus Six Million Dollars ($6,000,000). Such additional cash
payment shall be payable upon consummation of the transaction constituting the
Later Sale (whether or not such consummation shall have occurred within one year
from the date hereof).
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A "Later Sale" shall have occurred if (x) a Person other than SunGard acquires,
or commits to acquire, a majority of the outstanding shares of capital stock of
MACESS or assets of MACESS having a market value equal to Fifty Percent (50%) or
more of the aggregate market value of all of the assets of MACESS, (y) MACESS
merges or consolidates, or commits to merge or consolidate, with a Person other
than SunGard, or (z) MACESS files a registration with the SEC for a public
offering of its securities.
16.4. Notices. All notices, consents or other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given (a) when delivered personally, (b) three
business days after being mailed by first class certified mail, return receipt
requested, postage prepaid, or (c) one business day after being sent by a
reputable overnight delivery service, postage or delivery charges prepaid, to
the parties at their respective addresses stated on the first page of this
Agreement. Notices may also be given by prepaid facsimile and shall be
effective on the date transmitted if confirmed within 24 hours thereafter by a
signed original sent in the manner provided in the preceding sentence. Before
the Closing, notices to MACESS shall be sent to its address stated on page one
of this Agreement to the attention of its President, with a copy sent
simultaneously to the same address to the attention of its Chief Executive
Officer and another copy sent simultaneously to Thomas A. Ritchie, Esquire,
Ritchie & Rediker, L.L.C., 312 North 23rd Street, Birmingham, Alabama. Before
the Closing, any such notice to MACESS shall suffice as notice to MACESS and to
all of the Principals. After the Closing, notices to MACESS shall be sent to
SunGard (in the manner provided below), notices to the Principals or the
Stockholders shall be sent to the Stockholders Agent in accordance with Section
16.20, and copies of notices to the Stockholders Agent shall be sent
simultaneously to Thomas A. Ritchie, Esquire, at the address stated above.
Notices to SunGard and/or Newco (before or after the Closing) shall be sent to
SunGard's address stated on page one of this Agreement to the attention of its
General Counsel, with a copy sent simultaneously to the same address to the
attention of its Chief Financial Officer. Any party may change its address for
notice and the address to which copies must be sent by giving notice of the new
addresses to the other parties in accordance with this Section 16.4, provided
that any such change of address notice shall not be effective unless and until
received.
16.5. Survival of Representations. All representations and
warranties made in this Agreement or pursuant hereto shall survive the date of
this Agreement, the Closing Date, the Effective Date and the consummation of the
Transactions.
16.6. Interpretation of Representations. Each representation and
warranty made in this Agreement or pursuant hereto is independent of all other
representations and warranties made by the same parties, whether or not covering
related or similar matters, and must be independently and separately satisfied.
Exceptions or qualifications to any such representation or warranty shall not be
construed as exceptions or qualifications to any other representation or
warranty.
16.7. Reliance by SunGard and Newco. Notwithstanding the right of
SunGard and Newco to investigate MACESS' Business, Assets and financial
condition of MACESS, and notwithstanding any knowledge determined or
determinable by SunGard and Newco as a result of such investigation, SunGard and
Newco have the unqualified right to rely upon, and have relied upon, each of the
representations and warranties made by the Principals in this Agreement or
pursuant hereto.
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16.8. Entire Understanding. This Agreement, together with the
Exhibits and Schedules hereto, states the entire understanding among the parties
with respect to the subject matter hereof, and supersedes all prior oral and
written communications and agreements, and all contemporaneous oral
communications and agreements, with respect to the subject matter hereof,
including without limitation all confidentiality letter agreements and letters
of intent previously entered into among some or all of the parties hereto. No
amendment or modification of this Agreement shall be effective unless in writing
and signed by the party against whom enforcement is sought. MACESS may agree to
any amendment or supplement to this Agreement, or a waiver of any provision of
this Agreement, either before or after the approval of the MACESS Stockholders
is obtained (as contemplated by this Agreement) and without seeking further
stockholder approval, so long as such amendment, supplement or waiver does not
result in a decrease in the Preliminary Merger Exchange Ratio (as defined in the
Plan) or have a material adverse effect on the MACESS Stockholders. This
Agreement may not be terminated except as provided in Section 16.1.
16.9. Parties in Interest. This Agreement shall bind, benefit, and
be enforceable by and against MACESS, The Family Partnership, SunGard and Newco
and their respective successors and assigns, and the individual Principals and
their respective heirs, estates and personal representatives. No party shall in
any manner assign any of its rights or obligations under this Agreement without
the express prior written consent of the other parties.
16.10. Waivers. Except as otherwise expressly provided herein, no
waiver with respect to this Agreement shall be enforceable unless in writing and
signed by the party against whom enforcement is sought. Except as otherwise
expressly provided herein, no failure to exercise, delay in exercising, or
single or partial exercise of any right, power or remedy by any party, and no
course of dealing between or among any of the parties, shall constitute a waiver
of, or shall preclude any other or further exercise of, any right, power or
remedy.
16.11. Severability. If any provision of this Agreement is construed
to be invalid, illegal or unenforceable, then the remaining provisions hereof
shall not be affected thereby and shall be enforceable without regard thereto.
16.12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original
hereof, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one counterpart hereof.
16.13. Section Headings. Section and subsection headings in this
Agreement are for convenience of reference only, do not constitute a part of
this Agreement, and shall not affect its interpretation.
16.14. References. All words used in this Agreement shall be
construed to be of such number and gender as the context requires or permits.
16.15. Controlling Law. THIS AGREEMENT IS MADE UNDER, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA APPLICABLE TO AGREEMENTS MADE AND TO BE
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PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW.
16.16. Jurisdiction and Process. In any action between or among any
of the parties, whether arising out of this Agreement or otherwise, (a) each of
the parties irrevocably consents to the exclusive jurisdiction and venue of the
federal and state courts located in the Commonwealth of Pennsylvania; (b) if any
such action is commenced in a state court, then, subject to applicable law, no
party shall object to the removal of such action to any federal court located in
the Commonwealth of Pennsylvania; (c) each of the parties irrevocably waives the
right to trial by jury; (d) each of the parties irrevocably consents to service
of process by first class certified mail, return receipt requested, postage
prepaid, to the address at which such party is to receive notice in accordance
with Section 16.4; and (e) the prevailing parties shall be entitled to recover
their reasonable attorney's fees and court costs from the other parties.
16.17. Post-Closing Actions by the Surviving Corporation. No action
taken by the Surviving Corporation after the Closing, with respect to this
Agreement, the Plan or the Transactions, including any waiver, consent or
approval, shall be effective unless approved in writing by a majority of the
Surviving Corporation's Board of Directors.
16.18. No Third-Party Beneficiaries. No provision of this Agreement
or the Plan is intended to or shall be construed to grant or confer any right to
enforce this Agreement or the Plan, or any remedy for breach of this Agreement
or the Plan, to or upon any Person other than the parties hereto, including, but
not limited to, any customer, prospect, supplier, employee, contractor,
salesman, agent or representative of MACESS.
16.19. Nature of Transactions. The parties intend that the Merger
shall constitute a pooling-of-interests under GAAP and a tax-free reorganization
under the Internal Revenue Code of 1986, as amended.
16.20. Stockholders Agent. Featheringill shall be constituted and
appointed as agent ("Stockholders Agent") for the Principals and the
Stockholders in accordance with the following:
(a) The Stockholders Agent shall have the full power and
authority, for and on behalf of each and all of the Principals and each and all
of the Stockholders, to give and receive notices and communications, to
authorize and object to deliveries to SunGard of Escrowed Stock (as defined in
the Escrow Agreement) in satisfaction of Indemnification Matters, to select
counsel for and administer the Defense of Indemnification Matters, to agree to,
negotiate, enter into settlements and compromises of, and comply with court
orders with respect to, such matters, and to take all actions necessary or
appropriate in the judgment of the Stockholders Agent for the accomplishment of
the foregoing.
(b) Notices or communications to or from the Stockholders Agent
shall constitute notices to or from each of the Principals or each of the
Stockholders, as applicable, and no separate or individual notices to each of
the Principals or each of the Stockholders shall be required for any purposes
with respect to this Agreement unless required by law.
(c) The Stockholders Agent, in his capacity as agent on behalf of
the Principals and Stockholders, shall not be liable for any act done or omitted
hereunder as
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<PAGE>
Stockholders Agent while acting in good faith, and any act done or omitted
pursuant to the advice of counsel shall be conclusive evidence of such good
faith. The Principals or Stockholders, as appropriate, shall severally
indemnify the Stockholders Agent and hold him harmless against any loss,
liability or expense incurred without bad faith on the part of the Stockholders
Agent and arising out of or in connection with the performance of his duties and
exercise of his rights as agent hereunder.
(d) A decision, act, consent or instruction of the Stockholders
Agent, taken in the manner set forth herein or in the Escrow Agreement, shall
constitute a decision, act, consent or instruction of all Principals or
Stockholders, as applicable, and shall be final, binding and conclusive upon
each of the Principals or each of the Stockholders, as applicable, and SunGard
and the Escrow Agent each may rely upon any decision, act, consent or
instruction of the Stockholders Agent taken in such manner as being the
decision, act, consent or instruction of each and every of the Principals or
Stockholders, as applicable. The Escrow Agent and SunGard each are hereby
relieved from any liability to any person for any acts done by them in
accordance with such decisions, acts, consents and instructions of the
Stockholders Agent taken in such manner.
(e) If Featheringill is unable to act as Stockholders Agent, then
his designee from among the Principals shall serve as Stockholders Agent (or if
he is unable to appoint such designee, Ritchie shall serve as Stockholder
Agent), upon not less than ten (10) days' prior written notice to SunGard and
the Escrow Agent.
16.21. No Offers. THIS AGREEMENT DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SHARES OF COMMON STOCK OR OTHER
SECURITIES OF SUNGARD. NO SUCH OFFER SHALL BE MADE OTHER THAN BY DELIVERY OF
THE INFORMATION STATEMENT-PROSPECTUS CONTEMPLATED HEREBY.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
WITNESS THE DUE EXECUTION AND DELIVERY HEREOF AS OF THE DATE FIRST STATED
ABOVE.
MACESS Corporation
By:/s/ William W. Featheringill
---------------------------------------
William W. Featheringill,
Chairman and Chief Executive Officer
SunGard Data Systems Inc.
By:/s/ Richard C. Tarbox
---------------------------------------
Richard C. Tarbox,
Vice President-Corporate Development
SDS Merger Inc.
By:/s/ Lawrence A. Gross
---------------------------------------
Lawrence A. Gross,
Vice President
Principals:
/s/ William W. Featheringill /s/ Richard T. Harley
- ------------------------------------------ --------------------------------
William W. Featheringill Richard T. Harley
/s/ T. Alan Ritchie /s/ W. Sanders Pitman
- ------------------------------------------ --------------------------------
T. Alan Ritchie W. Sanders Pitman
/s/ John S. Williams /s/ Lawrence A. Stein
- ------------------------------------------ --------------------------------
John S. Williams Lawrence A. Stein
/s/ Thomas W. Claussen
- ------------------------------------------
Thomas W. Claussen
The Featheringill Family Partnership, Ltd.
By: /s/ William W. Featheringill, General Partner
----------------------------------------------
William W. Featheringill, General Partner
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<PAGE>
SCHEDULES AND EXHIBITS
TO
AGREEMENT AND PLAN OF REORGANIZATION
Schedules Description
- --------- -----------
3.1 Corporate Information of MACESS.
3.2 Required Authorizations and Filings.
3.3A Stockholders.
3.3B Option Holders.
3.3C Warrants.
3.4 Bank Accounts.
3.5 Compliance with Laws.
3.6A Audited Financial Statements
(included in the Information Statement-Prospectus).
3.6B Unaudited Financial Statements as of August 31, 1995.
3.6C Accounting Policies Used by MACESS.
3.7A Assets.
3.7B Assets Necessary to Operate MACESS' Business
3.8 Obligations.
3.9 Operations Since August 31, 1995.
3.11 Tangible Property.
3.12 Real Property.
3.13 Software and Intangibles.
3.14 Contracts.
3.15A Employees.
3.15B Sales Representatives and Independent Contractors.
3.16 Employee Benefit Plans.
3.17 Prospects and Suppliers.
3.18 Taxes.
3.19 Proceedings and Judgments.
3.20 Insurance.
3.22 Related Party Transactions.
3.23 MACESS Brokerage Fees.
4.1 Principals' Ownership of Shares.
4.4 Principals' Brokerage Fees.
5.2 SunGard Consents Required.
5.6 SunGard Brokerage Fees.
Exhibits Description
- -------- -----------
Exhibit A Agreement and Plan of Merger (included as
Exhibit 2.2 to this Registration Statement).
Exhibit 11.3(c) Escrow Agreement (included as Exhibit 2.3 to this
Registration Statement).
Exhibit 14.5 Description of Software Company in which
Featheringill may invest.
Exhibit 15.5 Allocation of Indemnification Liability Percentages.
- --------------------------------------------------------------------------------
THE REGISTRANT AGREES TO FURNISH SUPPLEMENTALLY A COPY OF ANY OMITTED SCHEDULE
OR EXHIBIT TO THE COMMISSION UPON REQUEST.
<PAGE>
Appendix B
<PAGE>
AGREEMENT AND PLAN OF MERGER
Parties: MACESS Corporation
an Alabama corporation ("MACESS")
402 Office Park Drive, Suite 150
Birmingham, AL 35223
SunGard Data Systems Inc.
a Delaware corporation ("SunGard")
1285 Drummers Lane, Wayne, Pennsylvania 19087
SDS Merger Inc.
an Alabama corporation ("Newco")
1285 Drummers Lane, Wayne, Pennsylvania 19087
Date: September 29, 1995
Background: Newco is a wholly-owned subsidiary of SunGard. MACESS, SunGard,
Newco and the principal equity owners of MACESS have entered into an Agreement
and Plan of Reorganization, dated this date (the "Reorganization Agreement"),
that contemplates the consolidation and merger of Newco with and into MACESS
(the "Merger") in accordance with the provisions of the Reorganization Agreement
and the provisions of this Agreement and Plan of Merger (this "Plan").
Now, therefore, in consideration of the mutual agreements contained herein
and subject to the satisfaction of the terms and conditions set forth herein and
in the Reorganization Agreement, the parties hereto, intending to be legally
bound, agree as follows:
1. Merger. On the Effective Date (as defined below), Newco shall be
consolidated and merged with and into MACESS in accordance with the provisions
of this Plan and in compliance with the Alabama Corporation Law and any other
applicable corporate laws (the "Corporation Laws"), and the Merger shall have
the effect provided for in the Corporation Laws. MACESS (sometimes referred to
as the "Surviving Corporation") shall be the surviving corporation of the Merger
and shall continue to exist and to be governed by the laws of the State of
Alabama. The corporate existence and identity of MACESS, with its purposes and
powers, shall continue unaffected and unimpaired by the Merger, and MACESS shall
become a wholly-owned subsidiary of SunGard after the Effective Date. On the
Effective Date, MACESS shall succeed to and be fully vested with the corporate
existence and identity of Newco, and the separate corporate existence and
identity of Newco shall cease.
2. Name. The name of the Surviving Corporation shall be "MACESS
Corporation."
3. Charter. Immediately after the Merger, the Certificate of
Incorporation of the Surviving Corporation shall be that of MACESS immediately
before the Merger.
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<PAGE>
4. Bylaws. Immediately after the Merger, the Bylaws of the Surviving
Corporation shall be those of MACESS immediately before the Merger.
5. Directors. Immediately after the Merger, the directors of the
Surviving corporation shall be the following persons, who shall serve in
accordance with the Bylaws of the Surviving Corporation:
Kenneth R. Adams
Lawrence A. Gross
Michael J. Ruane
6. Officers. Immediately after the Merger, the officers of the Surviving
Corporation shall be the following persons, who shall serve in accordance with
the Bylaws of the Surviving Corporation:
Kenneth R. Adams ....... Chairman, Chief Executive Officer
T. Alan Ritchie ........ President
W. Sanders Pitman ...... Vice President
Lawrence A. Gross ...... Assistant Vice President, Secretary
Michael J. Ruane ....... Assistant Vice President, Assistant Secretary
Andrew P. Bronstein .... Assistant Vice President, Assistant Secretary
7. Conversion of Newco Stock. On the Effective Date, each share of the
total of 1,000 shares of common stock of Newco, $1.00 par value per share,
issued and outstanding immediately before the Effective Date shall, by virtue of
the Merger and without any action on the part of the holder thereof, be
automatically converted into and become one share of voting common stock, $0.002
par value per share, of the Surviving Corporation. It is the intention of the
parties that, immediately after the Merger, SunGard shall own all of the issued
and outstanding capital stock of the Surviving Corporation.
8. Conversion of MACESS Stock On the Effective Date, each share of
capital stock of MACESS, including 1,430,100 shares of voting common stock,
$0.002 par value per share, and 5,720,400 shares of Class A non-voting common
stock, $0.002 par value per share, issued and outstanding immediately before the
Effective Date shall, by virtue of the Merger and without any action on the part
of the holder thereof, be automatically converted into and become 0.2783022 (the
"Preliminary Merger Exchange Ratio") shares of common stock of SunGard, $0.01
par value per share ("SunGard Stock"), subject to the possible adjustment
described in Section 9 of this Plan.
9. Possible Adjustment due to Recapitalization. If, between the date of
this Plan and the Effective Date, there is a change in the number of issued and
outstanding shares of SunGard Stock as a result of a stock split, reverse stock
split, stock dividend, reclassification, exchange of shares or similar
recapitalization, then the Preliminary Merger Exchange Ratio shall be
appropriately adjusted. The Preliminary Merger Exchange Ratio shall not be
adjusted as a result of any other changes in the number of issued and
outstanding shares of SunGard Stock, such as changes resulting from acquisitions
or offerings or changes resulting from exercises of stock options, purchases or
awards of stock, or similar transactions under SunGard's stock option, purchase
and award plans. The Preliminary Merger Exchange Ratio, after adjustment in
accordance with this Section 9 (if any), shall be referred to as the "Final
Merger Exchange Ratio."
B-2
<PAGE>
10. No Fractional Shares. No fractional shares of SunGard Stock shall be
issued as a result of the Merger. In lieu of the issuance of fractional shares,
the number of shares of SunGard Stock to be issued to each stockholder of MACESS
in accordance with this Plan shall be rounded off to the nearest whole number of
shares of SunGard Stock.
11. MACESS Stock held by MACESS. On the Effective Date, any shares of
MACESS Stock that are held by MACESS (as treasury shares) immediately before the
Effective Date shall, by virtue of the Merger and without any action on the part
of the holder thereof, be automatically canceled.
12. Exchange Procedures. SunGard shall designate its transfer agent to
act as the "Exchange Agent" under this Plan. As soon as is practicable after
the Effective Date, SunGard or the Exchange Agent shall mail, to each record
holder of an outstanding certificate that immediately before the Effective Date
represented shares of MACESS Stock, instructions for use in effecting the
surrender of such certificate to the Exchange Agent. Upon the surrender of such
certificate to the Exchange Agent in accordance with such instructions, the
Exchange Agent shall exchange such certificate for (a) a new certificate
representing 90% of such number of shares of SunGard Stock into which the shares
of MACESS Stock represented by such certificate have been converted in
accordance with this Plan ("Closing Stock"), which shall be promptly delivered
to the holder, and (b) a new certificate for the balance of such number of
shares of SunGard Stock into which the share of MACESS Stock represented by such
certificate have been converted in accordance with this Plan ("Escrow Stock"),
which shall be held and distributed in escrow in accordance with the terms of
the Escrow Agreement by and among MACESS, SunGard, Newco and the non-dissenting
stockholders of MACESS and dated as of the date hereof. If applicable, such
certificates shall be accompanied by any distributions due with respect to
shares of SunGard Stock that were paid to SunGard's stockholders of record as of
a date between the Effective Date and the date of distribution of either the
certificate representing the Closing Stock or the certificate representing the
Escrow Stock. Until surrendered in accordance with the foregoing, each
outstanding certificate that immediately before the Effective Date represented
shares of MACESS Stock shall be deemed to evidence ownership of the number of
shares of SunGard Stock into which the shares of MACESS Stock represented by
such certificate have been converted in accordance with this Plan, subject to
the escrow requirement described above; provided, however, that any such
certificate that is not properly submitted for exchange to SunGard or the
Exchange Agent within three years after the Effective Date shall no longer
evidence ownership of shares of Closing Stock or Escrow Stock and all rights of
the holder of such certificate, as a stockholder of SunGard with respect to the
shares previously evidenced by such certificate, shall cease.
13. Dissenter's Rights. Stockholders of MACESS shall be entitled to
exercise the rights of dissenting stockholders with respect to the Merger and
this Plan, as provided in the Corporation Laws. SunGard shall be responsible
for paying all cash amounts due to dissenting stockholders of MACESS.
14. Effective Date. As used in this Plan, the "Effective Date" shall mean
the date upon which this Plan and a proper Articles of Merger for the Merger
have been duly signed and filed with the proper official of the State of
Alabama.
B-3
<PAGE>
15. Entire Understanding. This Plan, together with the Reorganization
Agreement (and the Exhibits and Schedules thereto), states the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersedes all prior oral and written communications and agreements, and all
contemporaneous oral communications and agreements, with respect to the subject
matter hereof. No amendment or modification of this Plan, and no waiver of any
provision of this Plan, shall be effective unless in writing and signed by the
party against whom enforcement is sought. MACESS may agree to any amendment or
supplement to this Plan, or a waiver of any provision of this Plan, either
before or after the approval of MACESS's stockholders is obtained (as
contemplated by the Reorganization Agreement) and without seeking further
stockholder approval, so long as such amendment, supplement or waiver does not
result in a decrease in the Preliminary Merger Exchange Ratio or have a material
adverse effect on MACESS's stockholders. The obligations of the parties under
this Plan shall be subject to all of the terms and conditions of the
Reorganization Agreement. If the Reorganization Agreement is terminated in
accordance with its terms, then this Plan shall simultaneously terminate, and
the Merger shall be abandoned without further action by the parties hereto.
16. Parties in Interest. This Plan shall bind, benefit and be enforceable
by and against the parties hereto and their respective successors and assigns.
No party hereto shall in any manner assign any of its rights or obligations
under this Plan without the express prior written consent of the other parties.
Nothing in this Plan or the Reorganization Agreement is intended to confer, or
shall be deemed to confer, any rights or remedies upon any persons other than
the parties hereto and their respective stockholders and directors.
17. Severability. If any provision of this Plan is construed to be
invalid, illegal or unenforceable, then the remaining provisions hereof shall
not be affected thereby and shall be enforceable without regard thereto.
18. Counterparts. This Plan may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original
hereof, and it shall not be necessary in making proof of this Plan to produce or
account for more than one counterpart hereof.
19. Section Headings. Section and subsection headings in this Plan are
for convenience of reference only, do not constitute a part of this Plan, and
shall not affect its interpretation.
20. References. All words used in this Plan shall be construed to be of
such number and gender as the context requires or permits.
21. Controlling Law. This Plan is made under, and shall be construed and
enforced in accordance with, the laws of the State of Alabama applicable to
merger agreements made and to be performed solely therein, without giving effect
to principles of conflicts of law.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
B-4
<PAGE>
In testimony whereof, each undersigned corporation has caused this Agreement
and Plan of Merger to be signed by a duly authorized officer and its corporate
seal, duly attested by another such officer, to be hereunto affixed, as of the
date first stated above.
MACESS Corporation
By:/s/ William W. Featheringill
------------------------------------
William W. Featheringill,
Chairman and Chief Executive Officer
SunGard Data Systems Inc.
By:/s/ Richard C. Tarbox
------------------------------------
Richard C. Tarbox,
Vice President-Corporate Development
SDS Merger Inc.
By:/s/ Lawrence A. Gross
------------------------------------
Lawrence A. Gross,
Vice President
B-5
<PAGE>
Appendix C
<PAGE>
APPENDIX C
ESCROW AGREEMENT
Parties: MACESS Corporation
an Alabama corporation ("MACESS")
402 Office Park Drive, Suite 150
Birmingham, AL 35223
SunGard Data Systems Inc.
a Delaware corporation ("SunGard")
1285 Drummers Lane, Wayne, Pennsylvania 19087
SDS Merger Inc.
an Alabama corporation ("Newco")
1285 Drummers Lane, Wayne, Pennsylvania 19087
William W. Featheringill,
as Stockholders Agent
All stockholders of MACESS whose signatures appear at the end of
this Agreement
Norwest Bank Minnesota, N.A. ("Escrow Agent")
Norwest Center, Sixth Street and Marquette Avenue
Minneapolis, MN 55479
Date: _______________________, 1995
Background
A. MACESS, Newco, SunGard and the principal equity owners of MACESS
(the "Principals") are parties to an Agreement and Plan of Reorganization dated
as of September ___, 1995 (the "Reorganization Agreement') and a related Plan of
Merger dated the same date (the "Plan of Merger") providing for the merger of
Newco with and into MACESS (the "Merger") with, subject to the rights of
dissenting stockholders, the conversion of each outstanding share of MACESS
Stock (as defined in the Reorganization Agreement) into immediately deliverable
shares of SunGard Stock (as defined in the Plan of Merger) and the right to
receive additional shares of SunGard Stock held by the Escrow Agent under this
Agreement. As of the Effective Date, SunGard will deliver to the Escrow Agent
such number of shares of SunGard Stock ("Escrowed Stock") as is equal to ten
percent (10%) of the Total SunGard Stock (as defined in the Reorganization
Agreement).
B. Within a reasonable period after the Effective Date, MACESS and
SunGard have delivered to the Escrow Agent a list of the names and addresses of
MACESS's stockholders ("Stockholders") showing as to each the number of shares
of SunGard Stock (including fractional shares), as the case may be, deposited in
respect of the shares of MACESS Stock owned by such Stockholder.
NOW, THEREFORE, the parties hereto agree as follows:
<PAGE>
1. Stockholder Accounts. The Escrow Agent shall maintain records
and an account for each Stockholder showing the number of shares deposited
hereunder in respect of the shares of MACESS Stock owned by each such
Stockholder. As soon as practicable after the Effective Date (as defined in the
Plan of Merger), the Escrow Agent shall mail to each Stockholder a statement
showing the number of shares of Escrowed Stock held by the Escrow Agent for such
Stockholder. Subsequent statements shall be distributed following any
distributions pursuant to Section 3.b hereof.
2. Distribution of Escrowed Stock. The Escrow Agent shall distribute
the Escrowed Stock as follows:
a. In accordance with the mutual written direction of SunGard and
the Stockholders Agent (as defined in the Reorganization Agreement).
b. When payment of any claim for indemnification becomes due
under Section 15 of the Reorganization Agreement or after a comparable final
determination is made regarding payment of any indemnification claim under
Section 6.3 of the Reorganization Agreement, SunGard shall forward to the Escrow
Agent a notice ("Payment Notice") setting forth the amount to which SunGard is
entitled and from which Stockholders SunGard is so entitled, and provide
evidence to the Escrow Agent of the receipt by the Stockholders Agent of the
Payment Notice. The amount set forth in the Payment Notice shall be applied
against the accounts maintained by the Escrow Agent for each Stockholder named
in the Payment Notice, based upon the amounts of Escrowed Stock initially
deposited therein. The Escrow Agent within 15 business days thereafter shall
deliver to SunGard certificates representing such number of shares of SunGard
Stock, rounded downward to the nearest whole number of shares, having a total
value, based upon the Valuation Price (as defined in Section 4 hereof), equal to
the amount specified in the Payment Notice. In the event that the number of
Escrowed Stock in an account is insufficient to pay the allocable portion of the
amount specified in the Payment Notice, the Escrow Agent shall not be entitled
to make up any deficiency from any other account.
c. On November __, 1996 (the "Termination Date"), the Escrow
Agent shall distribute to the Stockholders the remaining shares held hereunder
(less a number of shares equal to the aggregate of the fractional share
interests to which SunGard is entitled by reason of the deposit by SunGard of an
excess fractional share hereunder or by reason of distribution to SunGard of
less than the amount specified in a Payment Notice, which shall be distributed
to SunGard) less the shares having a total value, based upon the Valuation
Price, equal to the aggregate amount set forth in any then outstanding claim
notices delivered under Sections 6.3 or 15 of the Reorganization Agreement
("Claim Notices"). For this purpose the amount set forth in any outstanding
Claim Notices shall be allocated among accounts in the same manner as set forth
in Section 3.b hereof.
d. After the Termination Date, upon final resolution of any
remaining outstanding Claim Notices in accordance with the procedure set forth
in Section 2(b) with respect to Payment Notices, the Escrow Agent shall
distribute to the Stockholders the remaining shares held hereunder (less a
number of shares equal to the aggregate of the fractional share interests to
which SunGard is entitled by reason of the deposit by SunGard of an excess
fractional share hereunder or by reason of distribution to SunGard of less than
-2-
<PAGE>
the amount specified in a Payment Notice, which shall be distributed to SunGard)
less the shares having a total value, based upon the Valuation Price, equal to
the aggregate amount set forth in any then outstanding Claim Notices. For this
purpose the amount set forth in any outstanding Claim Notices shall be allocated
among accounts in the same manner as set forth in Section 3.b hereof.
e. SunGard shall forward to the Escrow Agent a notice
("Dissenters Notice") setting forth the names of those MACESS Stockholders who
have dissented to the Merger and provide evidence to the Escrow Agent of the
receipt by the Stockholders Agent and the dissenting Stockholders of the
Dissenters Notice. The Escrow Agent within 15 business days thereafter shall
deliver to SunGard certificates representing such number of shares of SunGard
Stock, held by the Escrow Agent in accounts for such dissenting Stockholders.
f. No fractional shares of SunGard Stock shall be distributed by
the Escrow Agent. In lieu of the distribution of fractional shares, the number
of shares of SunGard Stock to be distributed to each Stockholder in accordance
with this Agreement shall be rounded off to the nearest whole number of shares
of SunGard Stock.
g. In the event that any holder of certificates formerly
representing shares of MACESS Stock has not surrendered them for exchange by the
Termination Date or the date of any subsequent distribution, Escrowed Stock held
by the Escrow Agent for such holder shall be held or disposed of in accordance
with Section 15 of the Plan of Merger.
3. Voting of Escrowed Stock. SunGard shall furnish to the Escrow
Agent copies of all proxy solicitation material furnished by SunGard to its
stockholders. The Escrow Agent shall furnish such material to the Stockholders
and vote whole Escrowed Stock in accordance with their directions. Fractional
share interests shall not be voted.
4. Valuation of Escrowed Stock. Except as otherwise expressly
provided for, the value of each share of the Escrowed Stock for purposes of this
Agreement shall be the last reported sale price of one share of SunGard Stock,
as reported on The Nasdaq Stock Market on the date of this Agreement ("Valuation
Price").
5. Exchange of Collateral. A Stockholder may, at its or his option,
deposit with the Escrow Agent an equivalent value, based upon the Valuation
Price, of cash, U.S. treasury securities or triple-A rated state and local
government general obligation bonds ("Escrowed Cash") in exchange for all of the
Escrowed Stock in such Stockholder's account. In any such case, references to
the Escrowed Stock in this Agreement and the Reorganization Agreement and
distributions thereof shall be deemed to refer instead to the Escrowed Cash and
distributions thereof.
6. Resignation and Removal of Escrow Agent. The Escrow Agent may
resign at any time or be removed by the mutual consent of SunGard and the
Principals upon notice given at least 30 days prior to the effective date of
such resignation or removal; provided, however, that no resignation or removal
of the Escrow Agent and no appointment of a successor Escrow Agent shall be
effective until the acceptance of appointment by a successor Escrow Agent in the
manner herein provided. In the event of the resignation or removal of the
Escrow Agent, and the failure of SunGard and the Principals to agree upon a
successor Escrow
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<PAGE>
Agent within 30 days after the receipt of notice of such resignation or removal,
SunGard shall have the right to appoint a successor Escrow Agent which shall be
a commercial bank or trust company having a combined capital and surplus of at
least $10,000,000. Any successor Escrow Agent, whether appointed by the mutual
agreement of SunGard and the Principals or otherwise, shall execute and deliver
to the predecessor Escrow Agent an instrument accepting such appointment, and
thereupon such successor Escrow Agent shall, without further act, become vested
with all the estates, properties, rights, powers and duties of the predecessor
Escrow Agent as if originally named herein.
7. Liability of Escrow Agent; Expenses. The Escrow Agent shall have
no liability or obligation hereunder except for its willful misconduct or gross
negligence. The Escrow Agent may rely upon any instrument, not only as to its
due execution, validity and effectiveness, but also as to the truth and accuracy
of any information contained therein, which the Escrow Agent shall in good faith
believe to be genuine, to have been signed or presented by the person or parties
purporting to sign the same and to conform to the provisions of this Agreement.
The Escrow Agent may consult legal counsel selected by it in the event of any
dispute or question of the construction of any of the provisions hereof or of
the Reorganization Agreement or of its duties hereunder, and shall incur no
liability and shall be fully protected in acting in accordance with the opinion
or instruction of such counsel. The fees and expenses of the Escrow Agent
charged and incurred in performing its obligations hereunder shall be borne by
SunGard. Escrow Agent shall be entitled to compensation for its services as
stated in the fee schedule attached hereto as Exhibit A, which such compensation
shall be paid by SunGard. The fee agreed upon for the services rendered
hereunder is intended as full compensation for Escrow Agent's services as
contemplated by this Agreement; provided, however, that in the event that the
conditions for the disbursement of funds under this Agreement are not fulfilled,
or Escrow Agent renders any material service not contemplated in this Agreement,
or there is any assignment of interest in the subject matter of this Agreement,
or any material modification hereof, or if any material controversy arises
hereunder, or Escrow Agent is made a party to any litigation pertaining to this
Agreement, or the subject matter hereof, then Escrow Agent shall be reasonably
compensated for such extraordinary services and reimbursed for all costs and
expenses, including reasonable attorney's fees, occasioned by any delay,
controversy, litigation or event, and the same shall be recoverable from
SunGard.
8. MACESS, SunGard and the Principals jointly and separately hereby
indemnify and hold harmless Escrow Agent from and against, any and all loss,
liability, cost, damage and expense, including, without limitation, reasonable
counsel fees, which Escrow Agent may suffer or incur by reason of any action,
claim or proceeding brought against Escrow Agent arising out of or relating in
any way to this Agreement or any transaction to which this Agreement relates
unless such action, claim or proceeding is the result of the willful misconduct
or gross negligence of Escrow Agent. This Agreement may be amended to add other
provisions relating to the Escrow Agent by the mutual consent of SunGard, Newco,
MACESS, the Escrow Agent and the Principals and any such amendment(s) shall be
binding on all parties to this Agreement.
9. Notices. All notices, consents, waivers or other communications
which are required or permitted hereunder shall be sufficient if given in
writing and delivered personally
-4-
<PAGE>
or by registered or certified mail, return receipt requested, postage prepaid,
as follows (or to such other addressee or address as shall be set forth in a
notice given in the same manner):
If to SunGard, the Principals or all Stockholders, as set forth in
Section 16.4 and 16.20 of the Reorganization Agreement.
If to the Escrow Agent (including any Payment Notice):
Norwest Bank Minnesota, N.A.
Norwest Center
Attention: Alice Weibye
9th Floor, MS 0065
Sixth Street and Marquette Avenue
Minneapolis, MN 55479-0065
Fax (612) 667-3822
with copies to SunGard, the Stockholders Agent and counsel to the
Principals (at their respective addresses set forth in the
Reorganization Agreement)
10. Governing Law. This Agreement shall be governed by and
interpreted under the laws of the Commonwealth of Pennsylvania except that the
fiduciary duties and responsibilities of the Escrow Agent shall be governed by
the laws of the State of Minnesota.
11. Assignment; Binding Effect. The rights of the Stockholders
hereunder are personal and may not be assigned or otherwise transferred except
by operation of law. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
12. Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original and all of which together shall
constitute one and the same instrument.
13. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and cannot be changed, modified or terminated except by written amendment.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
-5-
<PAGE>
In Witness Whereof, this Escrow Agreement has been executed as of the
day and year first written above.
MACESS Corporation
By:
------------------------------------
William W. Featheringill,
Chairman and Chief Executive Officer
SunGard Data Systems Inc.
By:
------------------------------------
Richard C. Tarbox,
Vice President-Corporate Development
SDS Merger Inc.
By:
------------------------------------
Lawrence A. Gross,
Vice President
Norwest Bank, N.A., as Escrow Agent
By:
------------------------------------
Stockholders Agent:
- ---------------------------------------
William W. Featheringill,
as Stockholders Agent
-6-
<PAGE>
In Witness Whereof, this Escrow Agreement has been executed as of the
day and year first written above.
MACESS STOCKHOLDER:
- ------------------------------------
Name:
-------------------------------
-7-
<PAGE>
Appendix D
<PAGE>
Appendix D
(S) 10-2B- 13.01. Definitions.
(1) "Corporate action" means the filing of articles of merger or share
exchange by the probate judge or Secretary of State, or other action giving
legal effect to a transaction that is the subject of dissenters' rights.
(2) "Corporation" means the issuer of shares held by a dissenter before the
corporate action, or the surviving or acquiring corporation by merger or share
exchange of that issuer.
(3) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under Section 10-2B-13.02 and who exercises that right when
and in the manner required by Sections 10-2B-13.20 through 10-2B-13.28.
(4) "Fair Value," with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.
(5) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans, or, if none, at a rate that is fair
and equitable under all circumstances.
(6) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
to the extent of the rights granted by a nominee certificate on file with a
corporation.
(7) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
(8) "Shareholder" means the record shareholder or the beneficial
shareholder. (Acts 1994, No. 94-245, p. 343 (S) 1.) -
(S) 10-2B-13.02. Right to dissent.
(a) A shareholder is entitled to dissent from, and obtain payment of the
fair value of his or her shares in the event of, any of the following
corporate actions:
(1) Consummation of a plan of merger to which the corporation is a
party (i) if shareholder approval is required for the merger by Section 10-
2B-11.03 or the articles of incorporation and the shareholder is entitled
to vote on the merger or (ii) if the corporation is a subsidiary that is
merged with its parent under Section 10-2B-11.04;
(2) Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(3) Consummation of a sale or exchange by all, or substantially all, of
the property of the corporation other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which
all or substantially all of the net proceeds of the sale will be
distributed to the shareholders within one year after the date of sale;
(4) To the extent that the articles of incorporation of the corporation
so provide, an amendment of the articles of incorporation that materially
and adversely affects rights in respect to a dissenter's shares because it:
(i) Alters or abolishes a preferential right of the shares;
(ii) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase of the shares;
(iii) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(iv) Excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights; or
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(v) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be
acquired for cash under Section 10-2B-6.04; or
(5) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
(b) A shareholder entitled to dissent and obtain payment for shares under
this chapter may not challenge the corporate action creating his or her
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation. (Acts 1994, No. 94-245, p. 343 (S) 1.)
(S) 10-2B-13.03. Dissent by nominees and beneficial owners.
(a) A record shareholder may assert dissenters' rights as to fewer than all
of the shares registered in his or her name only if he or she dissents with
respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
he or she asserts dissenters' rights. The rights of a partial dissenter under
this subsection are determined as if the shares to which he or she dissents
and his or her other shares were registered in the names of different
shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares
held on his or her behalf only if:
(1) He or she submits to the corporation the record shareholder's
written consent to the dissent not later than the time the beneficial
shareholder asserts dissenters' rights; and
(2) He or she does so with respect to all shares of which he or she is
the beneficial shareholder or over which he or she has power to direct the
vote. (Acts 1994, No. 94-245, p. 343 (S) 1.)
(S) 10-2B-13.20. Notice of dissenters' rights.
(a) If proposed corporate action creating dissenters' rights under Section
10-2B-13.02 is submitted to a vote at a shareholders' meeting, the meeting
notice must state that shareholders are or may be entitled to assert
dissenters' rights under this article and be accompanied by a copy of this
article.
(b) If corporate action creating dissenters' rights under Section 10-2B-
13.02 is taken without a vote of shareholders, the corporation shall (1)
notify in writing all shareholders entitled to assert dissenters' rights that
the action was taken; and (2) send them the dissenters' notice described in
Section 10-2B-13.22. (Acts 1994, No. 94-245, p. 343 (S) 1.)
(S) 10-2B-13.21. Notice of Intent to demand payment.
(a) If proposed corporate action creating dissenters' rights under Section
10-2B-13.02 is submitted to a vote at a shareholder's meeting, a shareholder
who wishes to assert dissenters' rights (1) must deliver to the corporation
before the vote is taken written notice of his or her intent to demand payment
or his or her shares if the proposed action is effectuated; and (2) must not
vote his or her shares in favor of the proposed action.
(b) A shareholder who does not satisfy the requirements of subsection (a)
is not entitled to payment for his or her shares under this article. (Acts
1994, No. 94-245, p. 343 (S) 1.)
(S) 10-2B-13.22. Dissenters' notice.
(a) If proposed corporate action creating dissenters' rights under Section
10-2B-13.02 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of Section 10-2B-13.21.
(b) The dissenters' notice must be sent no later than 10 days after the
corporate action was taken, and must:
(1) State where the payment demand must be sent;
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(2) Inform holders of shares to what extent transfer of the shares will
be restricted after the payment demand is received;
(3) Supply a form for demanding payment;
(4) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than 30 nor more than 60 days after the
date the subsection (a) notice is delivered; and
(5) Be accompanied by a copy of this article. (Acts 1994, No. 94-245,
p. 343 (S) 1.)
(S) 10.2B.13.23. Duty to demand payment.
(a) A shareholder sent a dissenters' notice described in Section 10.2B-
13.22 must demand payment in accordance with the terms of the dissenters'
notice.
(b) The shareholder who demands payment retains all other rights of a
shareholder until those rights are canceled or modified by the taking of the
proposed corporate action.
(c) A shareholder who does not demand payment by the date set in the
dissenters' notice is not entitled to payment for his or her shares under this
article.
(d) A shareholder who demands payment under subsection (a) may not
thereafter withdraw that demand and accept the terms offered under the
proposed corporate action unless the corporation shall consent thereto. (Acts
1994, No. 94-245, p. 343 (S) 1.)
(S) 10-2B-13.24. Share restrictions.
(a) Within 20 days after making a formal payment demand, each shareholder
demanding payment shall submit the certificate or certificates representing
his or her shares to the corporation for (1) notation thereon by the
corporation that such demand has been made and (2) return to the shareholder
by the corporation.
(b) The failure to submit his or her shares for notation shall, at the
option of the corporation, terminate the shareholders' rights under this
article unless a court of competent jurisdiction, for good and sufficient
cause, shall otherwise direct.
(c) If shares represented by a certificate on which notation has been made
shall be transferred, each new certificate issued therefor shall bear similar
notation, together with the name of the original dissenting holder of such
shares.
(d) A transferee of such shares shall acquire by such transfer no rights in
the corporation other than those which the original dissenting shareholder had
after making demand for payment of the fair value thereof. (Acts 1994, No. 94-
245, p.343 (S) 1.)
(S) 10-2B-13.25. Offer of payment.
(a) As soon as the proposed corporate action is taken, or upon receipt of a
payment demand, the corporation shall offer to pay each dissenter who complied
with Section 10-2B-13.23 the amount the corporation estimates to be the fair
value of his or her shares, plus accrued interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of the offer, an income
statement for that year, and the latest available interim financial
statements, if any;
(2) A statement of the corporation's estimate of the fair value of the
shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under
Section 10-2B-13.28; and
(5) A copy of this article.
(c) Each dissenter who agrees to accept the corporation's offer of payment
in full satisfaction of his or her demand must surrender to the corporation
the certificate or certificates representing his or her shares in accordance
with terms of the dissenters' notice. Upon receiving the certificate or
certificates, the corporation shall pay each dissenter the fair value of his
or her shares, plus accrued
D-3
<PAGE>
interest, as provided in subsection (a). Upon receiving payment, a dissenting
shareholder ceases to have any interest in the shares. (Acts 1994, No. 94-245,
p.343 (S) 1.)
(S) 10-2B-13.26. Failure to take corporate action.
(a) If the corporation does not take the proposed action within 60 days
after the date set for demanding payment, the corporation shall release the
transfer restrictions imposed on shares.
(b) If, after releasing transfer restrictions, the corporation takes the
proposed action, it must send a new dissenters' notice under Section 10-2B-
13.22 and repeat the payment demand procedure. (Acts 1994, No. 94-245, p. 343
(S) 1.)
(S) 10-2B-13.27. Reserved.
(S) 10-2B-13.28. Procedure if shareholder dissatisfied with offer of payment.
(a) A dissenter may notify the corporation in writing of his or her own
estimate of the fair value of his or her shares and amount of interest due,
and demand payment of his or her estimate, or reject the corporation's offer
under Section 10-2B-13.25 and demand payment of the fair value of his or her
shares and interest due, if:
(1) The dissenter believes that the amount offered under Section 10-2B-
13.25 is less than the fair value of his or her shares or that the
interest due is incorrectly calculated;
(2) The corporation fails to make an offer under Section 10-2B-13.25
within 60 days after the date set for demanding payment; or
(3) The corporation, having failed to take the proposed action, does
not release the transfer restrictions imposed on shares within 60 days
after the date set for demanding payment.
(b) A dissenter waives his or her right to demand payment under this
section unless he or she notifies the corporation of his or her demand in
writing under subsection (a) within 30 days after the corporation offered
payment for his or her shares. (Acts 1994, No. 94-245, p. 343 (S) 1.)
(S) 10-2B-13.30. Court action.
(a) If a demand for payment under Section 10-2B-13.28 remains unsettled,
the corporation shall commence a proceeding within 60 days after receiving the
payment demand and petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not commence the
proceeding within the 60 day period, it shall pay each dissenter whose demand
remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding in the circuit court of
the county where the corporation's principal office (or, if none in this
state, its registered office) is located. If the corporation is a foreign
corporation without a registered office in this state, it shall commence the
proceeding in the county in this state where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
corporation was located.
(c) The corporation shall make all dissenters (whether or not residents of
this state) whose demands remain unsettled parties to the proceeding as in an
action against their shares, and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided under the Alabama Rules of Civil Procedure.
(d) After service is completed, the corporation shall deposit with the
clerk of the court an amount sufficient to pay unsettled claims of all
dissenters party to the action in an amount per share equal to its prior
estimate of fair value, plus accrued interest, under Section 10-2B-13.25.
(e) The jurisdiction of the court in which the proceeding is commenced
under subsection (b) is plenary and exclusive. The court may appoint one or
more persons as appraisers to receive evidence and recommend decision on the
question of fair value. The appraisers have the powers described in the order
appointing them, or in any amendment to it. The dissenters are entitled to
the same discovery rights as parties in other civil proceedings.
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<PAGE>
(f) Each dissenter made a party to the proceeding is entitled to judgment
for the amount the court finds to be the fair value of his or her shares, plus
accrued interest. If the court's determination as to the fair value of a
dissenter's shares, plus accrued interest, is higher than the amount estimated
by the corporation and deposited with the clerk of the court pursuant to
subsection (d), the corporation shall pay the excess to the dissenting
shareholder. If the court's determination as to fair value, plus accrued
interest, of a dissenter's shares is less than the amount estimated by the
corporation and deposited with the clerk of the court pursuant to subsection
(d), then the clerk shall return the balance of funds deposited, less any
costs under Section 10-2B-13.31, to the corporation.
(g) Upon payment of the judgment, and surrender to the corporation of the
certificate or certificates representing the appraised shares, a dissenting
shareholder ceases to have any interest in the shares. (Acts 1994, No. 94-
245, p. 343 (S) 1.)
(S) 10-2B-13.31. Court costs and counsel fees.
(a) The court in an appraisal proceeding commenced under Section 10-2B-
13.30 shall determine all costs of the proceeding, including compensation and
expenses of appraisers appointed by the court. The court shall assess the
costs against the corporation, except that the court may assess costs against
all or some of the dissenters, in amounts the court finds equitable, to the
extent the court finds the dissenters acted arbitrarily, vexatiously, or not
in good faith in demanding payment under Section 10-2B-13.28.
(b) The court may also assess the reasonable fees and expenses of counsel
and experts for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of Sections 10-2B-13.20 through 10-2B-13.28; or
(2) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this chapter.
(c) If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of the amounts
awarded the dissenters who were benefitted (Acts 1994, No. 94-245, p. 343 (S)
1.)
(S) 10-2B-13.32. Status of shares after payment.
Shares acquired by a corporation pursuant to payment of the agreed value
therefor or to payment of the judgment entered therefor, as in this chapter
provided, may be held and disposed of by such corporation as in the case of
other treasury shares, except that, in the case of a merger or share exchange,
they may be held and disposed of as the plan of merger or share exchange may
otherwise provide. (Acts 1994, No. 94-245, p. 343 (S) 1.)
D-5
<PAGE>
PART II
Information Not Required in Prospectus
Item 20. Indemnification of Directors and Officers
The Delaware General Corporation Law provides, in substance, that Delaware
corporations shall have the power, under specified circumstances, to indemnify
their directors, officers, employees and agents in connection with actions,
suits or proceedings brought against them by third parties and in connection
with actions or suits by or in the right of the corporation, by reason of the
fact that they were or are such directors, officers, employees and agents,
against expenses (including attorney's fees) and, in the case of actions,
suits or proceedings brought by third parties, against judgments, fines and
amounts paid in settlement actually and reasonably incurred in any such
action, suit or proceeding.
SunGard's Bylaws provide for indemnification to the fullest extent
permitted by the Delaware General Corporation Law. Reference is made to the
Bylaws of SunGard filed as Exhibit 3.2 hereto.
As permitted by the Delaware General Corporation Law, SunGard has adopted
an amendment to its Amended and Restated Certificate of Incorporation to
eliminate the personal liability of its directors to SunGard and its
stockholders, in certain circumstances, for monetary damages arising from a
breach of the director's duty of care. Additionally, SunGard has entered into
indemnification agreements (in the form approved by SunGard's stockholders at
its 1987 Annual Meeting) with each of its directors and officers. These
agreements provide indemnification to the fullest extent permitted by law and,
in certain respects, provide greater protection than that specifically
provided by the Delaware General Corporation Law. The agreements do not
provide indemnification for, among other things, conduct that is adjudged to
be fraud, deliberate dishonesty or willful misconduct.
SunGard has obtained directors' and officers' liability insurance that
covers certain liabilities, including liabilities to SunGard and its
stockholders, in the amount of $20 million.
Item 21. Exhibits and Financial Statement Schedules
Item 21(a). Exhibits
Number Document
- ------ -------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization dated September 29, 1995 among
SunGard, Newco, MACESS and the principals (included in the
Information Statement-Prospectus as Appendix A).
2.2 Agreement and Plan of Merger dated September 29, 1995 among SunGard,
Newco and MACESS (included in the Information Statement-Prospectus
as Appendix B).
2.3 Form of Escrow Agreement among MACESS, SunGard, Newco, the Exchange
Agent, the Stockholders Agent and all shareholders of MACESS who
sign the Escrow Agreement (included in the Information Statement-
Prospectus as Appendix C).
3.1/(1)/ Amended and Restated Certificate of Incorporation of SunGard.
3.2/(2)/ Amended and Restated Bylaws of SunGard.
4.1/(2)/ Specimen Common Stock Certificate of SunGard.
5.1 Opinion of Blank, Rome, Comisky & McCauley as to the validity of the
issuance of the shares of SunGard Common Stock to be issued in the
Transactions.
10.1/(2)/ Lease, dated June 18, 1981, between SunGard and American National
Bank and Trust Company of Chicago, relating to SunGard's facility in
Northbrook, Illinois ("First Northbrook Lease").
10.2/(3)/ Amendment to the First Northbrook Lease, dated September 16,
1986.
10.3/(4)/ Amendment to the First Northbrook Lease, dated October 14, 1987.
10.4/(5)/ Amendment to the First Northbrook Lease, dated October 1, 1988.
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<PAGE>
Number Document
- ------ -------------------------------------------------------------------
10.5/(5)/ Lease, dated October 1, 1988, between SunGard and American
National Bank and Trust Company of Chicago, relating to SunGard's
facility in Northbrook, Illinois ("Second Northbrook Lease").
10.6/(6)/ Amendment to the Second Northbrook Lease, dated September 15,
1989.
10.7/(7)/ Lease, dated April 12, 1984, between SunGard and Broad and Noble
Associates, Inc., relating to SunGard's facility at 401 North Broad
Street, Philadelphia, Pennsylvania, and Amendments thereto, dated
October 18, 1989, September 30, 1991 and November 19, 1992.
10.8/(1)/ Lease, dated May 19, 1989, between SunGard and Northmeadow
Associates, relating to SunGard's facility in Roswell, Georgia,
Amendment thereto, dated June 1989, and Assignment and Assumption
thereof, dated December 31, 1990.
10.9/(1)/ SunGard's 1982 Incentive Stock Option Plan and Amendments
thereto, dated January 1, 1987 and November 8, 1991./(11)/
10.10/(8)/ SunGard's 1986 Stock Option Plan, Amendments thereto, dated
January 1, 1987, November 1, 1988, February 6, 1990, November 8,
1991, February 16, 1993 and February 13, 1995, and United Kingdom
Addendum thereto, dated February 12, 1991./(11)/
10.11/(1)/ SunGard's 1988 Nonqualified Stock Option Plan and Amendment
thereto, dated October 30, 1990./(11)/
10.12/(6)/ SunGard's 1990 Amended and Restated Restricted Stock Incentive
Plan./(11)/
10.13/(9)/ SunGard's Restricted Stock Award Plan for Outside
Directors./(11)/
10.14/(10)/ SunGard's 1994 Equity Incentive Plan./(11)/
10.15/(10)/ Summary Description of SunGard's Annual Executive Incentive
Compensation Program./(11)/
10.16/(8)/ Summary Description of SunGard's Long-Term Executive Incentive
Compensation Plan./(11)/
10.17/(1)/ Form of Indemnification Agreement entered into by SunGard with
its directors and officers./(11)/
11.1/(8)/ Statement Re Computation of Per Share Earnings.
21.1 Subsidiaries of SunGard.
23.1 Consent of Coopers & Lybrand L.L.P. with respect to SunGard.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Deloitte & Touche LLP.
23.4 Consent of Coopers & Lybrand L.L.P. with respect to Intelus
Corporation.
23.5 Consent of Blank, Rome, Comisky & McCauley (included in Exhibit
5.1).
24.1 Power of attorney of certain signatories (included on the Signature
Page).
Notes Regarding Exhibits Incorporated by Reference:
(1) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1991
(Commission File No. 0-14232).
(2) Incorporated by reference to the Exhibits filed with SunGard's
Registration Statement on Form S-1 and Amendments No. 1, No. 2, and No. 3
thereto (Registration No. 33-3181).
(3) Incorporated by reference to the Exhibits filed with SunGard's
Registration Statement on Form S-1 and Amendment No. 1 thereto
(Registration No. 33-12536).
(4) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1987
(Commission File No. 0-14232).
(5) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1988
(Commission File No. 0-14232).
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<PAGE>
(6) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989
(Commission File No. 0-14232).
(7) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992
(Commission File No. 0-14232).
(8) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994
(Commission File No. 0-14232).
(9) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990
(Commission File No. 0-14232).
(10) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993
(Commission File No. 0-14232).
(11) Management contract or compensatory plan or arrangement.
Item 21(b). Financial Statement Schedules.
None.
Item 22. Undertakings.
(a)(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(a)(2) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of
a prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
(a)(3) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (a)(2) immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415 ((S)230.415 of this
chapter), will be filed as part of an amendment to the registration statement
and will not be used until such amendment is effective, and that, for purposes
of determining any liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(a)(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of SunGard pursuant to the foregoing provisions, or otherwise, SunGard
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by SunGard
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<PAGE>
of expenses incurred or paid by a director, officer or controlling person of
SunGard in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, SunGard will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Wayne, Pennsylvania, on the date
indicated.
SunGard Data Systems Inc.
Date: October 6, 1995 By: /s/ James L. Mann
---------------------------------------
James L. Mann,
Chairman, President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated. Each person whose signature appears below hereby
authorizes James L. Mann and Michael J. Ruane and each of them, as Attorney-
in-fact, to sign on his behalf individually and in each capacity stated below,
and to file, any amendments, including post-effective amendments, to this
registration statement.
<TABLE>
<CAPTION>
Signature Capacity Date
- ------------------------------- ------------------------------ ---------------
<S> <C> <C>
/s/ James L. Mann Chief Executive Officer, October 6, 1995
- ------------------------------- President, and Chairman
James L. Mann of the Board of Directors
(principal executive officer)
/s/ Michael J. Ruane Chief Financial Officer and October 6, 1995
- ------------------------------- Vice President-Finance
Michael J. Ruane (principal financial officer)
/s/ Andrew P. Bronstein Vice President and Controller October 6, 1995
- ------------------------------- (principal accounting officer)
Andrew P. Bronstein
/s/ Gregory S. Bentley Director October 6, 1995
- -------------------------------
Gregory S. Bentley
/s/ Michael C. Brooks Director October 6, 1995
- -------------------------------
Michael C. Brooks
/s/ Albert A. Eisenstat Director October 6, 1995
- -------------------------------
Albert A. Eisenstat
/s/ Bernard Goldstein Director October 6, 1995
- -------------------------------
Bernard Goldstein
/s/ Michael Roth Director October 6, 1995
- -------------------------------
Michael Roth
/s/ Malcolm I. Ruddock Director October 6, 1995
- -------------------------------
Malcolm I. Ruddock
/s/ Lawrence J. Schoenberg Director October 6, 1995
- -------------------------------
Lawrence J. Schoenberg
</TABLE>
<PAGE>
Exhibit Index
Number Document
------ --------
2.1 Agreement and Plan of Reorganization dated September 29, 1995 among
SunGard, Newco, MACESS and the Principals (included in the Information
Statement-Prospectus Statement as Appendix A).
2.2 Agreement and Plan of Merger dated September 29, 1995 among SunGard,
Newco and MACESS (included in the Information
Statement-Prospectus Statement as Appendix B).
2.3 Form of Escrow Agreement among MACESS, SunGard, Newco, the Exchange
Agent, the Stockholders Agent and all shareholders of MACESS who sign
the Escrow Agreement (included in the Information Statement-Prospectus
as Appendix C).
5.1 Opinion of Blank, Rome, Comisky & McCauley as to the validity
of the issuance of the shares of SunGard Common Stock to be
issued in the Transactions.
21.1 Subsidiaries of SunGard.
23.1 Consent of Coopers & Lybrand L.L.P. with respect to SunGard.
23.2 Consent of Ernst & Young LLP.
23.3 Consent of Deloitte & Touche LLP.
23.4 Consent of Coopers & Lybrand L.L.P. with respect to Intelus
Corporation.
23.5 Consent of Blank, Rome, Comisky & McCauley (included in Exhibit 5.1).
24.1 Power of attorney of certain signatories (included on the Signature
Page).
<PAGE>
Exhibit 5.1
[LETTERHEAD OF BLANK, ROME, COMISKY & McCAULEY APPEARS HERE]
October 10, 1995
SunGard Data Systems Inc.
1285 Drummers Lane
Wayne, PA 19087
RE: SunGard Data Systems Inc.
(File No. 0-14232)
Registration Statement on Form S-4
----------------------------------
Gentlemen:
We have acted as counsel to SunGard Data Systems Inc. ("SunGard") in
connection with the Registration Statement on Form S-4 (the "Registration
Statement") filed by SunGard pursuant to the Securities Act of 1933, as
amended, relating to the issuance of 1,990,000 shares of common stock, par
value $0.01 per share, of SunGard (the "Common Stock") in connection with the
merger of SDS Merger Inc., a wholly-owned subsidiary of SunGard, with and
into MACESS Corporation ("Macess"), plus an indeterminate number of shares of
Common Stock which may be issued by reason of potential adjustments for
recapitalizations (the 1,990,000 shares plus such indeterminate number of
shares being collectively referred to hereinafter as the "Shares"). This
opinion is furnished pursuant to the requirements of Item 601(b)(5) of
Regulation S-K.
In rendering this opinion, we have examined only the following documents:
(1) the Amended and Restated Certificate of Incorporation of SunGard; (2) the
Bylaws of SunGard; (3) resolutions adopted by the Board of Directors of
SunGard relating to the transactions contemplated by the Registration
Statement; and (4) the Registration Statement. We have not performed any
independent investigation other than the document examination described by the
scope of that document examination. We have assumed and relied on the truth,
completeness, authenticity and due authorization of all documents and records
examined and the genuineness of all signatures. This opinion is limited to
the laws of the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that the
Shares, when issued in the manner contemplated by the Registration Statement,
will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Opinions" in the Information Statement-Prospectus, which is a part of
the Registration Statement.
Very truly yours,
/s/ Blank, Rome, Comisky & McCauley
BLANK, ROME, COMISKY & McCAULEY
<PAGE>
Exhibit 21.1
SunGard Data Systems Inc.
Subsidiaries of the Registrant
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name of Subsidiary Jurisdiction of Incorporation
- --------------------------------------------------------------------------------
<S> <C>
Bi-Tech Software Inc./(1)/ Delaware
- --------------------------------------------------------------------------------
Intelus Corporation/(1)/ Delaware
- --------------------------------------------------------------------------------
Portfolio Administration Limited/(1)//(2)/ England
- --------------------------------------------------------------------------------
Shaw Data Securities, Inc./(1)/ New York
- --------------------------------------------------------------------------------
Shaw Data Services, Inc./(1)//(3)/ New York
- --------------------------------------------------------------------------------
SunGard Business Systems Inc./(1)//(4)/ Alabama
- --------------------------------------------------------------------------------
SunGard Capital Markets Inc./(1)//(5)/ Pennsylvania
- --------------------------------------------------------------------------------
SunGard Computer Services Inc./(6)/ Pennsylvania
- --------------------------------------------------------------------------------
SunGard/DML Inc./(1)/ Delaware
- --------------------------------------------------------------------------------
SunGard Financial Systems Inc./(1)//(7)/ Delaware
- --------------------------------------------------------------------------------
SunGard Investment Systems Inc./(1)/(8)/ Delaware
- --------------------------------------------------------------------------------
SunGard Investment Ventures, Inc./(9)//(10)/ Delaware
- --------------------------------------------------------------------------------
SunGard Management Inc./(1)//(10)/ Delaware
- --------------------------------------------------------------------------------
SunGard MIS Inc./(1)/ Delaware
- --------------------------------------------------------------------------------
SunGard Recovery Services Inc./(1)//(11)/ Pennsylvania
- --------------------------------------------------------------------------------
SunGard Shareholder Systems Inc./(1)/ Delaware
- --------------------------------------------------------------------------------
SunGard Trust Systems Inc./(1)/ North Carolina
- --------------------------------------------------------------------------------
</TABLE>
(1) Wholly owned subsidiary of SunGard Investment Ventures, Inc.
(2) Conducts certain operations through two wholly owned foreign subsidiaries.
(3) Conducts certain operations through two wholly owned domestic
subsidiaries, one wholly owned foreign subsidiary, and one foreign
subsidiary of a sister corporation.
(4) Organized into, and conducts business under the names of, three operating
divisions--SunGard Asset Management Systems ("SAMS"), SunGard Employee
Benefit Systems ("SEBS"), and SunGard Mailing Services. SAMS and SEBS each
conducts certain operations through one foreign subsidiary of a sister
corporation.
(5) Conducts certain operations through three wholly owned domestic
subsidiaries and fourteen wholly owned foreign subsidiaries.
(6) Wholly owned subsidiary of SunGard Management Inc.
(7) Sometimes conducts business under the names Money Management Systems,
Phase3 Systems, SunGard Brokerage Systems, SunGard Digital Solutions Inc.,
SunGard Global Systems, SunGard Insurance Systems, SunGard Securities
Systems, Warrington Financial Systems and Wismer Associates; conducts
certain operations through one wholly owned domestic subsidiary which
sometimes conducts business under the names Information Systems of America
and ISA.
<PAGE>
(8) Conducts certain operations through two foreign subsidiaries of a sister
corporation.
(9) Wholly owned subsidiary of SunGard Data Systems Inc.
(10) Not an operating company.
(11) Conducts certain operations through one wholly owned foreign subsidiary.
Sometimes conducts business under the name SunGard Planning Solutions.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
SunGard Data Systems Inc. on Form S-4 and into the SunGard Data Systems Inc.'s
Registration Statements on Form S-8 (Registration Nos. 33-6425, 33-14984,
33-33602, 33-42345, 33-69650 and 33-58515) of our report dated February 8,
1995, on our audits of the consolidated financial statements of SunGard Data
Systems Inc. and Subsidiaries as of December 31, 1994 and 1993 and for each
of the three years in the period ended December 31, 1994, which report is
included in the Annual Report on Form 10-K. We also consent to the reference
to our firm under the heading "Experts" in the Registration Statement.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 6, 1995
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated May 31, 1995, with respect to the financial statements
of MACESS Corporation included in the Registration Statement (Form S-4) of
SunGard Data Systems Inc., dated October 10, 1995, for the registration of
1,990,000 shares of its common stock.
We also consent to the incorporation by reference in the Registration
Statements (Form S-8 Nos. 33-6425, 33-14984, 33-33602, 33-42345, 33-69650 and
33-58515) of SunGard Data Systems Inc. of our report dated May 31, 1995, with
respect to the financial statements of MACESS Corporation included in the
Registration Statement (Form S-4) of SunGard Data Systems Inc. dated October
10, 1995.
Ernst & Young LLP
Birmingham, Alabama
October 6, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Registration Statement of
SunGard Data Systems Inc. on Form S-4 of our report dated May 17, 1995
(September 23, 1995 as to Note 8) relating to the financial statements (not
presented separately herein) of Renaissance Software, Inc. for the year ended
March 31, 1995, appearing in Form 8-K of SunGard Data Systems Inc. dated
September 29, 1995.
DELOITTE & TOUCHE LLP
San Jose, California
October 6, 1995
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
SunGard Data Systems Inc. on Form S-4 and into the SunGard Data Systems Inc.'s
Registration Statements on Form S-8 (Registration Nos. 33-6425, 33-14984, 33-
33602, 33-42345, 33-69650 and 33-58515) of our report, which includes
explanatory paragraphs relating to the acquisition as of August 31, 1995 and
to the change in its method of accounting for income taxes to conform with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" in the year ended December 31, 1993, dated August 29, 1995, on our
audits of the financial statements of Intelus Corporation as of December 31,
1994 and 1993 and for the years then ended.
Coopers & Lybrand L.L.P.
Washington, D.C.
October 6, 1995
