<PAGE>
As filed with the Securities and Exchange Commission on November 12, 1997
REGISTRATION NO. 333-38927
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
AMENDMENT NO. 1 TO
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)
DELAWARE 7379 51-0267091
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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:
FRANCIS E. DEHEL, ESQUIRE WILLIAM CONTENTE, ESQUIRE
BLANK ROME COMISKY & MCCAULEY LUCASH, GESMER & UPDEGROVE, LLP
ONE LOGAN SQUARE 40 BROAD STREET
PHILADELPHIA, PENNSYLVANIA 19103 BOSTON, MA 02109-4310
(215) 569-5500 (617) 350-6800
-------------------------------------------------------
Approximate date of commencement of proposed sale of the securities to
the public: The date of mailing of the within Proxy Statement-Prospectus to the
shareholders of BancWare, Inc.
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. [ ]
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>
BancWare, Inc.
88 Broad Street
Boston, MA 02110
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Notice is hereby given that the Special Meeting of Shareholders of
BancWare, Inc., a Massachusetts corporation ("BancWare"), will be held on
December 12, 1997, at 10:00 a.m. local time, at BancWare's headquarters located
at 88 Broad Street, Boston, MA 02110 for the following purposes:
1. To consider and act upon a proposal to approve the Agreement and Plan of
Reorganization, dated September 22, 1997 (the "Reorganization Agreement"), among
SunGard Data Systems Inc. ("SunGard"), BWI Acquisition Inc., a wholly owned
subsidiary of SunGard ("Newco"), BancWare, William E. Popp ("Popp"), Douglas
Drane ("Drane") and M.I. Mandalinci ("Mandalinci") (Popp, Drane and Mandalinci
are collectively referred to as the "Principal Selling Parties"), and the
related Agreement and Plan of Merger, dated September 22, 1997 (the "Merger
Agreement"), among SunGard, Newco and BancWare, pursuant to which (a) Newco
would be merged with and into BancWare (the "Merger"), with BancWare surviving
the Merger under the name BancWare, Inc. and (b) BancWare shareholders (other
than shareholders who perfect dissenter's rights) would receive, subject to
adjustment under certain circumstances, an aggregate of up to 360,000 shares of
common stock, $0.01 par value per share, of SunGard ("SunGard Common Stock") to
be allocated among the holders of BancWare Class A Common Stock, $0.01 par value
per share ("Class A Common Stock"), BancWare Class B Common Stock, $0.01 par
value per share ("Class B Common Stock") and BancWare Convertible Preferred
Stock, $1.00 par value per share ("Preferred Stock") (collectively, "BancWare
Stock"), all as more fully described in the accompanying Proxy
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 BancWare Class A Common Stock, Class B Common Stock, and Preferred
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 President,
WILLIAM E. POPP
President
November 12, 1997
THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST TWO-THIRDS OF THE
OUTSTANDING SHARES OF CLASS A COMMON STOCK, CLASS B COMMON STOCK AND
PREFERRED STOCK OF BANCWARE, VOTING AS SEPARATE CLASSES, IS REQUIRED FOR
APPROVAL OF THE REORGANIZATION AGREEMENT AND THE MERGER AGREEMENT.
ACCORDINGLY, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN
PERSON, YOU ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
MAIL IT PROMPTLY IN THE ACCOMPANYING POSTAGE-PREPAID ENVELOPE. IF YOU
ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON. THE PROXY
MAY BE REVOKED AT ANY TIME BEFORE ITS EXERCISE IN THE MANNER DESCRIBED IN
THE ATTACHED PROXY STATEMENT-PROSPECTUS.
<PAGE>
PROSPECTUS
SUNGARD(R) DATA SYSTEMS INC.
360,000 SHARES OF COMMON STOCK
This Prospectus of SunGard Data Systems Inc. ("SunGard") covers up to
360,000 shares of common stock, $0.01 par value per share ("SunGard Common
Stock"), that may be issued to the shareholders of BancWare, Inc., a
Massachusetts corporation ("BancWare"), upon consummation of the proposed merger
(the "Merger") of BWI Acquisition Inc. ("Newco"), a wholly owned subsidiary of
SunGard, with and into BancWare pursuant to the Agreement and Plan of
Reorganization, dated September 22, 1997 (the "Reorganization Agreement"), among
SunGard, Newco, BancWare, William E. Popp ("Popp"), Douglas Drane ("Drane") and
M.I. Mandalinci ("Mandalinci") (Popp, Drane and Mandalinci are collectively
referred to as the "Principal Selling Parties") and the related Agreement and
Plan of Merger, dated September 22, 1997 (the "Merger Agreement"), among
SunGard, Newco and BancWare. This Prospectus also constitutes a Proxy Statement
of BancWare and is being furnished to the holders of BancWare Class A Common
Stock, $0.01 par value per share ("Class A Common Stock"), BancWare Class B
Common Stock, $0.01 par value per share ("Class B Common Stock") and BancWare
Convertible Preferred Stock, $1.00 par value per share ("Preferred Stock")
(collectively, "BancWare Stock"), in connection with a Special Meeting of
Shareholders of BancWare to vote on the Merger.
BancWare shareholders will receive an aggregate of up to 360,000 shares
of SunGard Common Stock in the Merger. The actual number of shares of SunGard
Common Stock to be issued in the Merger will depend upon the last reported sale
price per share of SunGard Common Stock on The New York Stock Exchange on the
closing date of the Merger (the "Market Value of SunGard Stock"), the number of
shares for which dissenter's rights have been perfected, the number of shares of
Preferred Stock which are converted into Class A Common Stock and the number of
outstanding options to purchase BancWare Stock which are exercised prior to the
Merger.
Assuming that all shares of Preferred Stock are converted into Class A
Common Stock, that no BancWare shareholders exercise dissenter's rights and that
no stock options to purchase BancWare Stock are exercised prior to the Merger,
and assuming that the Market Value of SunGard Stock was $23-7/16 per share
(which, for the purpose of this example was based upon the last reported sale
price on The New York Stock Exchange on October 27, 1997), a total of
approximately 331,278 shares of SunGard Common Stock would be issued in the
Merger (representing approximately 0.38% of all SunGard Common Stock outstanding
after the Merger), each outstanding share of Class A Common Stock would be
converted into 0.054692631 shares of SunGard Common Stock and each outstanding
share of Class B Common Stock would be converted into 0.049359298 shares of
SunGard Common Stock in the Merger. See THE PROPOSED MERGER--Principal Terms of
the Merger.
All information contained in this Proxy Statement-Prospectus with
respect to SunGard and its subsidiaries was supplied by SunGard, and all
information with respect to BancWare was supplied by BancWare. No person is
authorized to give any information or to make any
(i)
<PAGE>
representation not contained in this Proxy Statement-Prospectus, and, if given
or made, such information or representation should not be relied upon as having
been authorized. This Proxy 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 Proxy 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
BancWare since the date of this Proxy 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 PROXY
STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Proxy Statement-Prospectus is November 12, 1997.
This Proxy Statement-Prospectus does not constitute a
prospectus for public reoffering of SunGard Common Stock.
(ii)
<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 Proxy
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 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and at Seven World Trade Center,
Suite 1300, 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. The Commission also
maintains a WorldWide Web site that contains reports, proxy and information
statements, and other information regarding registrants that file electronically
with the Commission. The site and this Registration Statement may be accessed at
http:\\www.sec.gov. SunGard's Common Stock is traded on the New York Stock
Exchange. In addition, such materials and other information concerning SunGard
also can be inspected at the New York Stock Exchange at 20 Broad Street, New
York, New York, 10005.
This Proxy 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 Proxy 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 December 5, 1997.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by SunGard with the Commission are hereby
incorporated by reference in this Proxy Statement-Prospectus: (1) SunGard's
Annual Report on Form 10-K for the year ended December 31, 1996; (2) SunGard's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997 and June
30, 1997; (3) SunGard's Definitive Proxy Statement in connection with its 1997
Annual Meeting of Shareholders; (4) SunGard's Current Report on Form 8-K dated
October 27, 1997; and (5) the description of SunGard Common Stock that is
incorporated by reference in SunGard's Registration Statement on Form 8-A filed
on May 14, 1997, including any amendments or reports filed for the purpose of
updating such description.
(iii)
<PAGE>
On October 17, 1997, SunGard entered into an agreement to merge with
Infinity Financial Technology, Inc. ("Infinity"). See RECENT DEVELOPMENTS OF
SUNGARD beginning on page 20. The following documents filed by Infinity with the
Commission are hereby incorporated by reference in this Proxy
Statement-Prospectus: (1) the financial statements contained in Infinity's
Annual Report on Form 10-K for the year ended December 31, 1996; and (2) the
financial statements contained in Infinity's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997.
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 Proxy Statement-Prospectus and
before the date of the Special Meeting of Shareholders of BancWare 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 Proxy 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 Proxy
Statement-Prospectus, except as so modified or superseded.
(iv)
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
SUMMARY.............................................................................. (vi)
INTRODUCTORY STATEMENT............................................................... 1
Proposals to be Presented at the Special Meeting............................. 1
Voting Rights and Shareholder Approval....................................... 2
Proxies...................................................................... 2
The Proposed Merger.................................................................. 3
Background................................................................... 3
BancWare Board Approval and Reasons for the Merger........................... 4
Principal Terms of the Merger................................................ 5
Conditions to Closing........................................................ 6
Modification, Waiver and Termination......................................... 7
Representations and Warranties............................................... 8
Rights of Dissenting Shareholders............................................ 8
Certain Federal Income Tax Consequences...................................... 9
Conduct of Business Before Closing........................................... 10
Fees and Expenses............................................................ 12
Accounting Treatment......................................................... 12
Regulatory Matters........................................................... 12
Management of BancWare After Closing and Other Employment Matters............ 13
Exchange of Stock Certificates............................................... 14
Escrow Agreement............................................................. 14
Resales of SunGard Common Stock.............................................. 15
DESCRIPTION OF CAPITAL STOCK......................................................... 16
SunGard Capital Stock........................................................ 16
BancWare Capital Stock....................................................... 16
Common Stock................................................................. 17
Preferred Stock.............................................................. 17
Stock Options................................................................ 18
COMPARISON OF THE RIGHTS OF STOCKHOLDERS OF SUNGARD AND BANCWARE..................... 18
RECENT DEVELOPMENTS OF SUNGARD....................................................... 20
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA................................ 21
MARKET PRICES OF BANCWARE STOCK AND DIVIDENDS........................................ 22
SELECTED FINANCIAL INFORMATION OF BANCWARE........................................... 22
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS OF BANCWARE................................................ 23
General...................................................................... 23
Results of Operations........................................................ 24
Liquidity and Capital Resources.............................................. 25
BUSINESS OF BANCWARE................................................................. 26
PRINCIPAL SHAREHOLDERS OF BANCWARE................................................... 27
EXPERTS.............................................................................. 28
LEGAL OPINIONS....................................................................... 28
INDEX TO FINANCIAL STATEMENTS OF BANCWARE............................................ 29
Appendix A -- Agreement and Plan of Reorganization................................... A-1
Appendix B -- Agreement and Plan of Merger........................................... B-1
Appendix C -- Form of Escrow Agreement............................................... C-1
Appendix D -- Massachusetts Statute Concerning Rights of Dissenting Stockholders..... D-1
</TABLE>
(v)
<PAGE>
SUMMARY
The following is a summary of certain significant matters discussed
elsewhere in this Proxy Statement-Prospectus. This summary is qualified in its
entirety by reference to the more detailed information appearing elsewhere in
this Proxy Statement-Prospectus and the Appendices hereto. Shareholders are
urged to read the entire Proxy Statement-Prospectus, including the Appendices
hereto. Certain terms used in this summary and elsewhere in this Proxy
Statement-Prospectus are used as defined in the Summary or elsewhere in this
Proxy Statement-Prospectus.
Special Meeting
The Special Meeting of Shareholders of BancWare (the "Special Meeting")
will be held at BancWare's headquarters located at 88 Broad Street, Boston, MA
02110 on December 12, 1997, at 10:00 a.m. local time. See INTRODUCTORY
STATEMENT. At the Special Meeting, holders of BancWare Stock will be asked to
consider and vote upon the Merger of Newco, a wholly owned subsidiary of
SunGard, with and into BancWare pursuant to the Reorganization Agreement and the
Merger Agreement. See THE PROPOSED MERGER.
Outstanding Shares and Required Vote
Only holders of record of BancWare Stock at the close of business on
the date immediately preceding the date of the Notice of the Special Meeting of
Shareholders of BancWare (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 outstanding shares of Class A
Common Stock, Class B Common Stock and Preferred Stock of BancWare, voting as
separate classes, which all BancWare shareholders are entitled to cast thereon.
The Principal Selling Parties of BancWare and their affiliates are entitled to
vote an aggregate of approximately 51.5% of the total shares of BancWare Class A
Common Stock, approximately 91.4% of the total Shares of BancWare Class B Common
Stock and no shares of BancWare Preferred Stock outstanding as of the Record
Date. See PRINCIPAL SHAREHOLDERS OF BANCWARE.
If the shareholders of BancWare fail to approve the Merger, and if the
Principal Selling Parties either fail to vote their shares in favor of the
Merger or encourage other BancWare shareholders to vote against the Merger,
BancWare has agreed to pay SunGard the sum of $1,000,000. In addition, if the
shareholders of BancWare fail to approve the Merger and if BancWare is acquired,
or agrees to be acquired prior to September 22, 1998, BancWare would be
obligated to pay SunGard an amount equal to twenty-five percent of the excess of
the acquisition price over $9,000,000, less any amount paid to SunGard pursuant
to the preceding sentence.
(vi)
<PAGE>
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.
BancWare: BancWare is a Massachusetts corporation which is in the
business of providing software and professional consulting services relating to
interest rate risk management, financial forecasting, coterminous funds transfer
pricing and financial database record management for thrifts and other financial
institutions. BancWare's principal executive offices are located at 88 Broad
Street, Boston, MA 02110, telephone 617-542-2800. See BUSINESS OF BANCWARE.
Newco: Newco is a Delaware corporation and wholly owned subsidiary of
SunGard. Newco, recently formed for the purposes of effecting the Merger with
BancWare, will not engage in any business prior to the Merger and will not
survive the Merger.
BancWare Board Approval
The Board of Directors of BancWare has unanimously approved the Merger
and has recommended that BancWare shareholders vote in favor of the proposed
Merger. See THE PROPOSED MERGER--BancWare Board Approval and Reasons for the
Merger.
The Proposed Merger
Subject to BancWare shareholder approval and certain other conditions,
Newco will be merged with and into BancWare, with BancWare surviving the Merger
(the "Surviving Corporation"). The Surviving Corporation will become a wholly
owned subsidiary of SunGard and will be named BancWare, Inc. See THE PROPOSED
MERGER. BancWare shareholders will receive an aggregate of up to 360,000 shares
of SunGard Common Stock in the Merger. The actual number of shares of SunGard
Common Stock to be issued in the Merger will depend upon the last reported sale
price per share of SunGard Common Stock on The New York Stock Exchange on the
closing date of the Merger (the "Market Value of SunGard Stock"), the number of
shares for which dissenter's rights have been perfected, the number of shares of
Preferred Stock which are converted into Class A Common Stock and the number of
outstanding options to purchase BancWare Stock which are exercised prior to the
Merger.
Assuming that all shares of Preferred Stock are converted into Class A
Common Stock, that no BancWare shareholders exercise dissenter's rights and that
no stock options to purchase BancWare Stock are exercised prior to the Merger,
and assuming that the Market Value of SunGard Stock was $23-7/16 share (which,
for the purpose of this example was based upon the last reported sale price on
The New York Stock Exchange on October 27,
(vii)
<PAGE>
1997), a total of approximately 331,278 shares of SunGard Common Stock would be
issued in the Merger (representing approximately 0.38% of all SunGard Common
Stock outstanding after the Merger), and each outstanding share of Class A
Common Stock would be converted into 0.054692631 shares of SunGard Common Stock
and each outstanding share of Class B Common Stock would be converted into
0.049359298 shares of SunGard Common Stock in the Merger (collectively, the
"Assumed Merger Exchange Ratios"). In lieu of the issuance of fractional shares,
the number of shares of SunGard Common Stock to be issued to each shareholder of
BancWare in accordance with the Plan will be rounded off to the nearest whole
number of shares of SunGard Common Stock. Shareholders should not send in their
BancWare stock certificates until they receive written instructions from the
exchange agent. BancWare shareholders are urged to promptly notify BancWare of
lost, stolen or destroyed certificates or certificates not properly registered
in order to begin the process of issuing replacement certificates. 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 BancWare 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 the BancWare shareholders and the
other conditions to closing are satisfied or waived. If so, then the Merger will
be consummated on the date of the Special Meeting or as soon thereafter as is
practicable (the "Closing Date") and will be effective at the time of filing of
the Articles of Merger and all other necessary documents with the Secretary of
State of the States of Delaware and Massachusetts (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 merger exchange ratios or have
a material adverse effect on BancWare 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 BancWare, by written notice from either SunGard or BancWare 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 December 19, 1997, or by
written notice from either SunGard or BancWare to the other if the Merger is not
consummated by December 19, 1997 for any reason other than a breach by the party
giving such notice. See THE PROPOSED MERGER--Modification, Waiver and
Termination.
(viii)
<PAGE>
Exchange of Stock Certificates
As of the Effective Date, each BancWare shareholder (other than
shareholders who perfect dissenter's rights) will be entitled to receive, upon
surrender of certificate(s) formerly representing shares of BancWare Stock,
certificates representing 90% of the shares of SunGard Common Stock to which he
is entitled, with the balance being held in escrow in accordance with the Escrow
Agreement, the form of which is attached hereto as Appendix C (the "Escrow
Agreement"). Instructions for surrendering BancWare stock certificates will be
forwarded to the former BancWare shareholders as soon as possible after the
Effective Date. See THE PROPOSED MERGER--Exchange of Stock Certificates and
Escrow Agreement.
Rights of Dissenting Shareholders
Subject to consummation of the Merger, each holder of BancWare Stock
who files a written objection to the Merger with BancWare before the Special
Meeting and who otherwise complies with the applicable procedures under
Massachusetts law will be entitled to receive the fair value of his shares of
BancWare 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 BancWare shareholders upon the exchange of
their shares for shares of SunGard Common Stock, except to the extent of cash
received by any dissenting BancWare shareholders. See THE PROPOSED
MERGER--Certain Federal Income Tax Consequences.
Regulatory Matters
Other than 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.
(ix)
<PAGE>
Management of BancWare 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
BancWare 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 BancWare before the Effective Date, with present BancWare
management personnel retained. See THE PROPOSED MERGER--Management of BancWare
After Closing and Other Employment Matters.
Interests of Certain Persons in Merger
Of the outstanding BancWare Stock, approximately 84.5% is beneficially
owned by persons who are employed by BancWare, including its officers and
directors. After the effectiveness of the Merger, William E. Popp, President and
Chief Executive Officer of BancWare, and M. I. Mandalinci, Executive Vice
President, Assistant Clerk and Chief Operating Officer of BancWare, who
collectively own approximately 34.7% of the outstanding BancWare Stock
(including outstanding stock options), will continue to be employed by the
Surviving Corporation as employees at-will. See THE PROPOSED MERGER--Management
of BancWare After Closing and Other Employment Matters.
Recent Developments of SunGard
On October 17, 1997, SunGard entered into an agreement to merge with
Infinity Financial Technology, Inc. ("Infinity") in a stock-for-stock
transaction in which each share of Infinity common stock will be exchanged for
0.68 of a share of SunGard Common Stock (the "Infinity Merger"). Based upon
SunGard's closing price of $24 1/16 on October 16, 1997, the shares to be issued
by SunGard in the transaction, representing approximately fifteen percent of its
outstanding shares, will have a value of approximately $313 million. See RECENT
DEVELOPMENTS OF SUNGARD beginning on page 20.
(x)
<PAGE>
Comparative Per Share Data
The following table presents certain historical per share data and pro
forma per share data of SunGard and BancWare based upon the historical financial
statements of such companies. The pro forma information gives effect to the
Merger as if it had occurred at the beginning of the periods presented, with
such transaction 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 Merger had been effected on the date indicated or the results that may be
obtained in the future. The pro forma information set forth below does not give
effect to the pending Infinity Merger. See RECENT DEVELOPMENTS OF SUNGARD
beginning on page 20. Pro forma information with respect to the BancWare Merger
is not being presented elsewhere in this Proxy Statement-Prospectus because the
effect of the Merger is not material to the financial condition or results of
operations of SunGard. The following information should be read in conjunction
with the separate financial statements of SunGard that are incorporated by
reference in this Proxy Statement-Prospectus, the separate financial statements
of BancWare that are included in this Proxy Statement-Prospectus and the
unaudited pro forma financial information that is included in this Proxy
Statement-Prospectus with respect to the Infinity Merger. See INDEX TO FINANCIAL
STATEMENTS OF BANCWARE AND RECENT DEVELOPMENTS OF SUNGARD beginning on page 20.
<TABLE>
<CAPTION>
SunGard BancWare Pro Forma
Historical/(1)/ Historical Combined
--------------- ------------- -------------
Fully diluted net income per common share:
- -----------------------------------------
<S> <C> <C> <C>
Six months ended:
June 30, 1997....................... $0.36 $0.03 $0.36
June 30, 1996....................... 0.36 0.02 0.36
Year ended:
December 31, 1996................... 0.41 (0.02) 0.40
December 31, 1995................... 0.61 (0.01) 0.61
Book value per common share:
- ---------------------------
As of:
June 30, 1997....................... 5.80 (0.01) 5.77
December 31, 1996................... 5.50 (0.04) 5.47
- -------------------
</TABLE>
(1) Per share amounts have been adjusted for the two-for-one stock split which
occurred in September 1997.
(xi)
<PAGE>
Market Price Data
SunGard Common Stock trades on The New York Stock Exchange ("NYSE") and
the London Stock Exchange under the symbol SDS. There is no established trading
market for BancWare Stock. See MARKET PRICE OF BANCWARE STOCK AND DIVIDENDS. The
following table presents (1) the last sale price per share of SunGard Common
Stock, as reported by NYSE on October 27, 1997; and (2) the pro forma equivalent
price per share of BancWare Preferred Stock, Class A Common Stock and Class B
Common Stock calculated, in the case of Preferred Stock by reference to its
liquidation preference, and in the case of the Class A Common Stock and
Class B Common Stock, by multiplying the Assumed Merger Exchange Ratios,
0.054692631 and 0.049359298, respectively, by such SunGard Common Stock price.
See THE PROPOSED MERGER--Principals Terms of the Merger.
<TABLE>
<CAPTION>
Pro Forma
Equivalent of BancWare Stock
------------------------------------------
Market Value Class A Class B
of SunGard Preferred Common Common
Common Stock Stock Stock Stock
--------------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Price Per Share as of October 27, 1997 $ 23.4375 $1.125/(1)/ $1.2819/(2)/ $1.1569/(2)/
- ---------------------------
</TABLE>
(1) Pursuant to the Articles of Reorganization, as amended, of BancWare and
the Merger Agreement, each share of Preferred Stock will be converted
into SunGard Common Stock having a value of $1.125 based on the last
reported closing price of SunGard Common Stock on NYSE on the Closing
Date.
(2) Assumes that all shares of Preferred Stock are converted into Class A
Common Stock.
On September 22, 1997, the last full trading day before public
announcement of the Merger, the last sale price per share of SunGard Common
Stock, as reported by NYSE, was $26.00 (after adjustment for the two-for-one
stock split which occurred on September 22, 1997).
(xiii)
<PAGE>
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 Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
Six Months
Ended June 30, Year Ended
(unaudited) December 31,
----------------------- ---------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:/(1)/
Revenues.................... $395,072 $305,366 $670,309 $532,628 $437,190 $381,372 $324,570
Income from operations...... 55,157 48,845 59,786 80,076 70,326 59,645 50,336
Net income.................. 32,209 30,851 34,901 48,672 43,087 38,474 25,808
Net income per share:/(2)/
Primary.................. 0.37 0.36 0.41 0.61 0.56 0.54 0.41
Fully diluted............ 0.36 0.36 0.41 0.61 0.56 0.52 0.40
Balance Sheet Data:
Total Assets................ $715,649 $597,590 $679,318 $579,734 $485,740 $418,135 $365,580
Total short term and
long term debt.............. 48,178 6,388 39,346 10,002 10,567 6,523 89,790
Stockholders' equity........ 500,761 455,145 464,638 422,292 359,292 316,960 189,899
</TABLE>
- -------------------------
(1) Includes one-time charges for purchased in-process research and
development, merger and other costs of $51,083 and $4,238 in 1996 and
1995 ($33,468 and $4,238 after-tax, or $0.39 and $0.05 per share,
respectively), and $9,618 for the six months ended June 30, 1997
($5,805 after-tax, or $0.07 per share). 1993 includes after-tax gain
on sale of product line of $3,371 ($0.04 per share).
(2) Adjusted to reflect the two-for-one stock splits which occurred in
July 1995 and September 1997.
Forward Looking Statements
Statements about the pending Infinity Merger, SunGard's 1997 and 1998
outlook and all other statements in this Proxy Statement-Prospectus other than
historical facts are forward-looking statements. Since these statements involve
risks and uncertainties (including those relating to the possible inability to
complete the Infinity Merger as scheduled, or at all) and are subject to change
at any time, SunGard's actual results could differ materially from expected
results. Assuming completion of the Infinity Merger, such risks and
uncertainties include risks that integration of the operations and products of
the combining companies might not occur as anticipated. SunGard derives most of
its forward-looking statements from its operating budgets and forecasts, which
are based upon many detailed assumptions. While SunGard believes that its
assumptions are reasonable, it cautions that
(xiii)
<PAGE>
there are inherent difficulties in predicting certain important factors,
especially the timing and magnitude of software sales, the timing and scope of
technological advances, the performance of recently acquired businesses, the
prospects for future acquisitions, and the overall condition of the financial
services industry. Whether or not the pending Infinity Merger closes, actual
results, including the level of earnings of both SunGard and Infinity, may
differ materially from historical results and those discussed. These factors, as
and when applicable, are discussed in SunGard's filings with the Securities and
Exchange Commission, including its most recent Annual Report on Form 10-K, a
copy of which may be obtained from SunGard without charge, and in Infinity's
most recent Annual Report on Form 10-K. See RECENT DEVELOPMENTS OF SUNGARD
beginning on page 20.
(xiv)
<PAGE>
PROXY STATEMENT - PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS OF BANCWARE, INC.
TO BE HELD DECEMBER 12, 1997
INTRODUCTORY STATEMENT
This Proxy Statement-Prospectus is being furnished to the shareholders
of BancWare, Inc., a Massachusetts corporation ("BancWare"), in connection with
the Special Meeting of Shareholders to be held on December 12, 1997, at 10:00
a.m. local time, at BancWare's headquarters located at 88 Broad Street, Boston,
MA 02110, and any adjournments or postponements thereof (the "Special Meeting").
This definitive Proxy Statement-Prospectus and the attached Notice of Special
Meeting are first being mailed to BancWare shareholders on or about November 12,
1997.
With respect to the information set forth in this Proxy
Statement-Prospectus, you also should refer to the preceding SUMMARY beginning
on page (vi). All information contained in this Proxy 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
BancWare was supplied by BancWare.
Proposals to be Presented at the Special Meeting
At the Special Meeting, BancWare shareholders will be asked to consider
and vote upon the following proposals:
1. To consider and act upon a proposal to approve the Agreement and
Plan of Reorganization, dated September 22, 1997 (the "Reorganization
Agreement"), among SunGard Data Systems Inc. ("SunGard"), BWI Acquisition Inc.,
a wholly owned subsidiary of SunGard ("Newco"), BancWare, William E. Popp
("Popp"), Douglas Drane ("Drane") and M.I. Mandalinci ("Mandalinci") (Popp,
Drane and Mandalinci, collectively the "Principal Selling Parties"), and the
related Agreement and Plan of Merger, dated September 22, 1997 (the "Merger
Agreement"), among SunGard, Newco and BancWare, pursuant to which (a) Newco
would be merged with and into BancWare (the "Merger"), with BancWare surviving
the Merger under the name BancWare, Inc. and (b) BancWare shareholders (other
than shareholders who perfect dissenter's rights) would receive, subject to
adjustment under certain circumstances, an aggregate of up to 360,000 shares of
common stock, $0.01 par value per share, of SunGard ("SunGard Common Stock") to
be allocated among the holders of BancWare Class A Common Stock, $0.01 par value
per share ("Class A Common Stock"), BancWare Class B Common Stock, $0.01 par
value per share ("Class B Common Stock") and BancWare Convertible Preferred
Stock, $1.00 par value per share ("Preferred Stock") (collectively, "BancWare
Stock"), all as more fully described in the accompanying Proxy
Statement-Prospectus; and
2. Such other matters as may properly be brought before the meeting or
any adjournments or postponements thereof.
<PAGE>
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 BancWare (the "Record Date"). Only holders of record of BancWare
Stock on the Record Date are entitled to notice of and to vote at the Special
Meeting. On the Record Date, there were 1,086,532 shares of BancWare Class A
Common Stock, 5,280,475 shares of BancWare Class B Common Stock and 205,000
shares of BancWare Preferred Stock outstanding. Holders of record of BancWare
Class A Common Stock, BancWare Class B Common Stock, and BancWare Preferred
Stock on the Record Date are entitled to one vote per share on the Merger and
the presence of the holders of at least a majority of the shares of each class
of BancWare 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, either in
person or by proxy, of the holders of BancWare Class A Common Stock, BancWare
Class B Common Stock and BancWare Preferred Stock, voting as separate classes,
entitled to cast at least two-thirds of the votes which all holders of each
class of BancWare Stock are entitled to cast thereon.
The Principal Selling Parties are entitled to vote an aggregate of
approximately 51.5% of the shares of BancWare Class A Stock, approximately 91.4%
of the shares of BancWare Class B Common Stock and no shares of BancWare
Preferred Stock outstanding on the Record Date.
Proxies
A Proxy for use in connection with the BancWare Special Meeting is
enclosed. Each properly executed and returned proxy will be voted at the
BancWare Special Meeting in accordance with the instructions thereon. If no
instructions are given, such proxy will be voted FOR the proposal to approve the
Reorganization Agreement and the Merger Agreement.
Sending in an executed proxy will not affect a shareholder's right to
attend and vote at the Special Meeting, since the proxy is revocable. Any
shareholder who submits a proxy may revoke it at any time before it is voted by
submitting a later-dated proxy or by giving written notice of such revocation to
the Clerk of BancWare. The presence at the BancWare Special Meeting of any
shareholder who has given a proxy will not revoke the proxy unless the
shareholder files written notice of revocation with the Clerk of BancWare before
the voting of the proxy.
The enclosed proxy confers discretionary authority to vote with respect
to any and all of the following matters that may come before the respective
Special Meeting: (1) matters which BancWare does not know a reasonable time
before the meeting are to be presented at the meeting; and (2) matters incident
to the conduct of the meeting. BancWare's Board of Directors do not know of any
matters, other than the proposals described in this Proxy Statement, that will
be presented for consideration at the BancWare Special Meeting.
-2-
<PAGE>
However, if other matters properly come before the BancWare Special Meeting, it
is intended that the persons designated as proxy agents will vote upon such
matters in accordance with their best judgment.
BancWare will bear the expenses in connection with the solicitation of
proxies from its shareholders. In addition to solicitation by mail, proxies may
be solicited in person by directors, officers and employees of BancWare, without
additional compensation, by telephone, telegram, teletype, facsimile or similar
method. BancWare will, on request, reimburse its respective shareholders of
record who are brokers, dealers, banks or voting trustees, or their nominees,
for their reasonable expenses in sending proxy materials to the beneficial
owners of the shares they hold of record. See PRINCIPAL SHAREHOLDERS OF
BANCWARE.
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 Proxy Statement-Prospectus and are incorporated
herein by reference. YOU ARE URGED TO CAREFULLY READ THE ENTIRE REORGANIZATION
AGREEMENT, MERGER AGREEMENT AND ESCROW AGREEMENT.
Background
Since its inception, SunGard has pursued a strategy of augmenting the
internal growth of its business through the acquisition of computer services
companies that complement and expand its existing business lines. During the
early part of 1997, SunGard independently determined that the market for
providing computer software to financial institutions in the application area of
asset and liability management ("ALM") both was a suitable complement to
SunGard's existing financial risk management software business and had
attractive potential growth opportunities. After performing preliminary research
on the ALM software market and identifying the various market participants,
SunGard made initial contact with BancWare in March 1997 to determine its
interest in pursuing acquisition discussions with SunGard.
During April 1997, senior officers of SunGard and BancWare conducted
preliminary discussions regarding the potential business and financial benefits
of combining the two companies. As a result of those discussions, in May 1997
the senior managements of both SunGard and BancWare separately determined that
an acquisition of BancWare by SunGard was in the best interests of each company
and its stockholders, and the parties signed a letter of intent dated June 2,
1997. Subsequent to that date, SunGard conducted a "due diligence" investigation
of BancWare, and the senior officers of SunGard and BancWare conducted
negotiations to establish the terms of the Merger Agreement and the
Reorganization Agreement, both of which were signed on September 22, 1997. The
Merger
-3-
<PAGE>
was approved by the Board of Directors of SunGard on August 14, 1997 and by the
Board of Directors of BancWare on September 19, 1997.
BancWare Board Approval and Reasons for the Merger
On September 19, 1997, the Board of Directors of BancWare, in an action
by unanimous written consent, approved the Reorganization Agreement and Merger
Agreement and the transactions necessary to consummate the Merger. Prior to
reaching its decision, the BancWare Board of Directors had received information
from management of BancWare, 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 regulatory approvals, and the performance of all additional actions
necessary, appropriate or advisable in order to consummate the Merger. The Board
of Directors of BancWare recommends that the shareholders of BancWare 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 BancWare vote
FOR the approval and adoption of those agreements, the Directors of BancWare
considered a number of factors, including, without limitation, the following:
(i) The value of the consideration to be received by the
shareholders of BancWare, including the fact that the Merger was expected to be
treated as a tax-free reorganization and that, with the Merger, the shareholders
of BancWare are acquiring an interest in a larger, more diverse enterprise;
(ii) The publicly available financial information regarding 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 BancWare Stock to continue
participating in the potential for long-term gains in BancWare through the
ownership of SunGard Common Stock following the Merger;
(iv) The perceived strengths of BancWare 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
(v) The likelihood that the Merger will be consummated.
-4-
<PAGE>
In view of the wide variety of factors considered by the Board of
Directors of BancWare 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 two-thirds
of the outstanding shares of each class of BancWare Stock and the other
conditions to closing specified in the Reorganization Agreement are satisfied or
waived, then Newco will be merged with and into BancWare, with BancWare being
the surviving corporation (the "Surviving Corporation") of the Merger. The
Surviving Corporation will be named BancWare, Inc. 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.
Conversion of BancWare Stock. Under the terms of BancWare's Articles of
Organization, as amended, in the event of a merger of BancWare, holders of
Preferred Stock are entitled to a liquidation preference of $1.125, and no more,
holders of Class A Common Stock are entitled to a liquidation preference of
$0.125 and holders of Class A Common Stock and Class B Common Stock are entitled
to receive the balance of the consideration on an equal per share basis. Under
the Merger Agreement, all shares of BancWare Stock which are outstanding on the
Closing Date will be converted into SunGard Common Stock as follows:
(i) Each share of Preferred Stock will be converted into such
fraction of a share of SunGard Common Stock equal to $1.125 divided by the last
reported sale price of one share of SunGard Common Stock as reported on The New
York Stock Exchange on the Closing Date (the "Market Value of SunGard Common
Stock").
(ii) Each share of Class A Common Stock will be converted into such
fraction of a share of SunGard Common Stock equal to the sum of (a) $0.125
divided by the Market Value of SunGard Common Stock (the "Class A Liquidation
Preference") plus (b) the Class B Common Stock Merger Exchange Ratio (as
hereinafter defined).
(iii) Each share of Class B Common Stock will be converted into such
fraction of a share of SunGard Common Stock equal to (a) 360,000 shares minus
the number of shares of SunGard Common Stock to be issued with respect to the
Preferred Stock and the Class A Liquidation Preference divided by (b) the total
of all shares of Class A Common Stock and Class B Common Stock outstanding on
the Effective Date and that number of additional shares of Class A Common Stock
and Class B Common Stock that would be outstanding on the Effective Date
assuming the exercise of all outstanding options, warrants or rights to purchase
Class A Common Stock or Class B Common Stock (the "Class B Common Stock Merger
Exchange Ratio").
Each share of Preferred Stock is convertible into one share of Class A
Common Stock. Because the consideration payable in the Merger with respect to
the Class A Common Stock is anticipated to be greater than the consideration
payable with respect to the Preferred Stock
-5-
<PAGE>
in the Merger, it is expected that the holders of the Preferred Stock will
convert all such stock into Class A Common Stock. Assuming that all shares of
Preferred Stock are converted into Class A Common Stock and assuming that the
Market Value of SunGard Stock was $23-7/16 per share (which, for the purpose of
this example was based upon the last reported sale price on The New York Stock
Exchange on October 27, 1997), each outstanding share of Class A Common Stock
would be converted into 0.054692631 shares of SunGard Common Stock and each
outstanding share of Class B Common Stock would be converted into 0.049359298
shares of SunGard Common Stock in the Merger (collectively, the "Assumed Merger
Exchange Ratios"). Under the Merger Agreement, the conversion of BancWare Stock
into shares of SunGard Common Stock will occur automatically on the Effective
Date without any action by the BancWare shareholders.
Promptly upon surrender of their BancWare stock certificates, BancWare
shareholders of record on the Effective Date each will be entitled to receive a
certificate representing 90% of the number of shares of SunGard Common Stock
into which their shares of BancWare Stock are converted in the Merger. A balance
certificate representing 10% of the number of shares of SunGard Common Stock
into which each shareholder's shares of BancWare 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 BancWare Stock will be deemed to evidence ownership
of such shares of SunGard Common Stock. No fractional shares of SunGard Common
Stock shall be issued as a result of the Merger. In lieu of the issuance of
fractional shares, the number of shares of SunGard Common Stock to be issued to
each shareholder of BancWare in accordance with this Plan shall be rounded off
to the nearest whole number of shares of SunGard Common Stock.
Conditions to Closing
In addition to the condition that the Merger must be approved by at
least two-thirds of the outstanding shares of each class of BancWare 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) 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; (2)
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; (3) SunGard shall have received from each affiliate of
BancWare including, without limitation, the Principal Selling Parties, a letter
stating that such affiliate will not sell or otherwise transfer any BancWare
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 BancWare 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 BancWare; (4) the aggregate number of shares of
BancWare Stock owned by those BancWare shareholders (if any) who
-6-
<PAGE>
shall have exercised (or given notice of their intent to exercise) the rights of
dissenting stockholders under applicable corporate law shall be less than ten
percent (10%) of the total number of outstanding shares of BancWare Stock; (5)
SunGard's due diligence investigation of BancWare's Business shall have been
completed to SunGard's good faith satisfaction; (6) 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; (7) no action, suit or
other proceeding shall have been instituted (excluding any action, suit or
proceeding initiated by one of the parties or their respective affiliates), 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; (8) there shall not have been any
material adverse change or material casualty loss affecting BancWare, and there
shall not have been any material adverse change in the financial performance of
BancWare between the date the Reorganization Agreement was entered into by the
parties and the Closing Date; (9) BancWare shall have obtained all consents and
approvals of all lenders, lessors, vendors, customers and other persons
necessary to permit the Merger to be consummated without violating any loan
agreement, lease or other material contract to which BancWare is a party or by
which BancWare is bound; and (10) the Escrow Agreement shall have been executed
by BancWare shareholders representing at least 95% of the issued and outstanding
BancWare Stock and all other 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 States of Delaware and Massachusetts on the date of the
Special Meeting or as soon thereafter as is practicable. The Merger will become
effective on the date such filings are made with the States of Delaware and
Massachusetts.
Modification, Waiver and Termination
At any time before the Effective Date, whether before or after the
Merger is approved by BancWare 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 BancWare shareholders, as long as the waiver, amendment or
modification does not result in a decrease in the merger exchange ratios or have
a material adverse effect on BancWare shareholders.
At any time before the Effective Date, whether before or after the
Merger is approved by BancWare 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 BancWare,
authorized by their respective Boards of Directors, (2) written notice from
either SunGard or BancWare 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
December 19, 1997, or (3) written notice from either SunGard or BancWare to the
other
-7-
<PAGE>
party if the Merger shall not have been consummated by December 19, 1997 for any
reason other than a breach by the party giving such notice.
Representations and Warranties
The representations and warranties of BancWare and the Principal
Selling Parties and of SunGard and Newco contained in the Reorganization
Agreement include various representations and warranties and are included in
Sections 3 and Section 4 of the Reorganization Agreement, a copy of which is
attached hereto as Appendix A.
Rights of Dissenting Shareholders
Subject to consummation of the Merger, BancWare shareholders may demand
to be paid the fair value of their shares of BancWare Stock in cash, if they
follow the procedures specified in Sections 85 through 98 (inclusive) of the
Massachusetts Business Corporation Law (the "Massachusetts Dissenter's
Statute"), a copy of which is attached to this Proxy Statement-Prospectus as
Exhibit D. The following summary of the Massachusetts Dissenter's Statute is
qualified in its entirety by reference to the full text thereof which is
attached as Appendix D to this Proxy Statement-Prospectus. SINCE FAILURE TO
STRICTLY COMPLY WITH THE STATUTORY PROCEDURES MAY RESULT IN A TERMINATION OR
WAIVER OF THESE STATUTORY RIGHTS, BANCWARE SHAREHOLDERS WHO MAY DESIRE TO
EXERCISE SUCH RIGHTS ARE URGED TO READ THE ENTIRE MASSACHUSETTS DISSENTER'S
STATUTE.
Under the Massachusetts Dissenter's Statute, each dissenting BancWare
shareholder electing to demand the appraisal of his or her shares of BancWare
Stock must (1) file a written objection to the Merger with BancWare before the
taking of the vote on the Merger at the Special Meeting, stating the intention
of such shareholder to demand payment for the shares owned by such shareholder
if the Merger is approved and consummated, (2) vote against the Merger or
abstain from voting, and (3) make written demand to BancWare for payment for his
or her shares within 20 days after the date of mailing of a notice by BancWare
to objecting shareholders that the Merger has become effective (which notice
must be mailed by BancWare to all objecting shareholders within 10 days after
the Effective Date of the Merger).
A vote in favor of the Merger, or the return of an executed proxy upon
which no vote is specified, will constitute a waiver of appraisal rights under
the Massachusetts Dissenter's Statute. Although voting against the Merger or
abstaining from voting is required to preserve such rights, those actions do not
satisfy the other requirements to file a written objection to the Merger before
the vote is taken and to make a written demand for payment after the vote is
taken. All three requirements must be satisfied. Both the written objection and
the written demand should be delivered to BancWare at its headquarters located
at 88 Broad Street, Boston, Massachusetts 02110, Attention: Chief Financial
Officer. In order to prove delivery, it is recommended that objections and
demands be sent by registered or certified mail, return receipt requested.
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If a BancWare shareholder objects to the Merger and timely preserves
his or her rights under the Massachusetts Dissenter's Statute, then BancWare and
the dissenting BancWare shareholders have a period of 30 days, beginning after
the end of the 20-day period for making written demands, to agree on an
appraisal value. If agreement is not reached during the 30-day period, then
BancWare or any such shareholder may file a bill in equity in the Superior court
of Suffolk County, Massachusetts, asking that the court determine the value in
issue. The bill in equity must be filed within four months after the end of the
30-day period. After a hearing, the court will enter a decree determining the
value of the BancWare Stock and will order BancWare to make payment of such
value (and interest, if any) to the shareholders entitled to payment. For
appraisal proceeding purposes, value is determined as of the day before the
approval of the Merger by BancWare shareholders and excludes any element of
value arising from the expectation or accomplishment of the Merger.
The Massachusetts Dissenter's Statute provides that each party shall
bear its own legal and other professional fees and such other costs as the court
directs. The Massachusetts Dissenter's Statute also contains provisions
regarding dividends on dissenting shares, rights of dissenting shares prior to
purchase, discontinuance of dissenters' rights, and other related matters. The
right of appraisal under the Massachusetts Dissenter's Statute is the exclusive
remedy of a BancWare shareholder who objects to the Merger, although the
Massachusetts Dissenter's Statute does not prohibit a BancWare shareholder from
bringing an appropriate proceeding to obtain relief on the grounds that the
Merger is or will be illegal or fraudulent as to that shareholder. In addition,
the Massachusetts Supreme Judicial Court has held that dissenting shareholders
are not limited to the statutory remedy of judicial appraisal where violation of
fiduciary duty exists.
Under the Merger Agreement, BancWare is responsible for paying all cash
amounts due to dissenting BancWare shareholders. SunGard's obligation to
consummate the Merger, however, is subject to the condition (which it may waive)
that dissenting BancWare shareholders hold less than 10% of the outstanding
shares of BancWare Stock.
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 BancWare and SunGard and certain assumptions. This summary is
included solely for the general information of BancWare 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 10% of the shares of
BancWare 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
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"Code"); (2) no gain or loss will be recognized by SunGard upon the exchange of
BancWare Stock solely in exchange for SunGard Common Stock; (3) no gain or loss
will be recognized by BancWare shareholders upon the exchange of their BancWare
Stock solely for SunGard Common Stock; (4) the basis of SunGard Common Stock
received by BancWare shareholders in the Merger will be the same as the basis of
their BancWare Stock surrendered in exchange therefor; (5) for capital gains
purposes, the holding period of SunGard Common Stock received by BancWare
shareholders in the Merger will include the period during which the BancWare
Stock surrendered in exchange therefor was held, provided that such BancWare
Stock is held as a capital asset on the Effective Date; and (6) cash received
for BancWare Stock by a BancWare 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.
Conduct of Business Before Closing
The Reorganization Agreement provides that, between September 22, 1997
(the date of the Reorganization Agreement) and the Effective Date, except with
SunGard's consent, the Principal Selling Parties and BancWare will comply with
certain requirements, summarized as follows:
1. BancWare will, and the Principal Selling Parties will cause
BancWare 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 BancWare. Each Principal Selling Party involved in BancWare's
daily business operations will remain actively involved in BancWare's
business consistent with past practices and will consult with SunGard
as to the management of BancWare's business and affairs.
2. Except in the ordinary course of business consistent with past
practices, BancWare will not, and the Principal Selling Parties will
not permit BancWare 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, BancWare will not, and the Principals will not permit
BancWare 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
$15,000 or, in the aggregate, an amount exceeding $75,000 with certain
specified exceptions.
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4. BancWare will not, and the Principal Selling Parties will not
permit BancWare 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. BancWare will, and the Principal Selling Parties will cause
BancWare 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 its corporate existence and good standing in applicable
jurisdictions, and refrain from amending its charter or bylaws.
6. BancWare will not, and the Principal Selling Parties will not
permit BancWare to, redeem, retire or purchase, or create, grant or
issue any contracts, options, warrants or other rights with respect to,
any shares of BancWare Stock, or create, grant or issue any stock
options, stock appreciation rights, phantom shares or other similar
rights. BancWare and each Principal Selling Party will maintain all of
their shares of BancWare Stock free of any claims or encumbrances, and
will not sell, dispose of or encumber any such shares. The foregoing,
however, will not prohibit the conversion of Preferred Stock into Class
A Common Stock in accordance with its terms or the exercise of any
outstanding stock options in accordance with their terms. Neither
BancWare nor any Principal Selling Party will buy, sell or engage in
any other transaction involving SunGard Common Stock other than in
connection with the Merger.
7. Neither BancWare nor any Principal Selling Party (nor any
officer, employee, representative or agent of BancWare) 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 BancWare'
assets, any sale of shares of BancWare Stock, or any merger,
consolidation or similar transaction involving BancWare. BancWare and
the Principal Selling Parties will advise SunGard of the terms of any
such inquiry or proposal received by them.
SunGard and Newco and, subject to the approval of the Merger by
BancWare's shareholders, BancWare 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. 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.
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Fees and Expenses
Each party will pay all fees and expenses incurred by it in
consummating the Merger. If the shareholders of BancWare fail to approve the
Merger, and if the Principal Selling Parties either fail to vote their shares in
favor of the Merger or encourage other BancWare shareholders to vote against the
Merger, BancWare has agreed to pay SunGard the sum of $1,000,000. In addition,
if the shareholders of BancWare fail to approve the Merger and if BancWare is
acquired, or agrees to be acquired prior to September 22, 1998, BancWare would
be obligated to pay SunGard an amount equal to twenty-five percent of the excess
of the acquisition price over $9,000,000, less any amount paid to SunGard
pursuant to the preceding sentence.
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 BancWare 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 BancWare for the entire year during which the Merger is consummated,
and, if material, SunGard will combine the operating results of BancWare and
restate its previously reported operating results for prior periods; and (3)
certain expenses incurred by SunGard, BancWare and the BancWare shareholders to
effect the Merger, currently estimated at a total of $800,000, will be charged
against SunGard's consolidated income in the quarter during which the Merger is
consummated but may 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.
Pursuant to the Reorganization Agreement, each Principal Selling Party
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 BancWare
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
BancWare. Such restrictions are required in connection with pooling-of-interests
transactions.
Regulatory Matters
Other than certain filings under certain federal securities laws and
certain 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.
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Management of BancWare After Closing and Other Employment Matters
Post-Closing Management. BancWare will be the Surviving Corporation of
the Merger and, after the Effective Date, will continue to own and operate the
business conducted by BancWare 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 BancWare before the Effective Date,
with present BancWare management personnel retained.
Consistent with SunGard's management of its other subsidiaries, the
Board of Directors of the Surviving Corporation will consist of Cristobal I.
Conde, Lawrence A. Gross and Michael J. Ruane, and the officers of the Surviving
Corporation will include certain of the current officers of BancWare, William E.
Popp, President, and M. I. Mandalinci, Chief Operating Officer, plus Cristobal
I. Conde, who will become the Chairman and Chief Executive Officer, Thomas J.
McDugall, who will become the Chief Financial Officer and Treasurer, Lawrence A.
Gross, who will become Assistant Vice President and Clerk, and Andrew P.
Bronstein and Michael J. Ruane, who will each become Assistant Vice President
and Assistant Clerk. Cristobal I. Conde is the Chief Executive Officer of
SunGard Trading Systems Group, Thomas J. McDugall is the Vice President and
Chief Financial Officer of SunGard Trading Systems Group, Lawrence A. Gross is
the Vice President and General Counsel of SunGard, Andrew P. Bronstein is the
Vice President and Controller of SunGard, and Michael J. Ruane is the Vice
President-Finance and Chief Financial Officer of SunGard.
Other Employees. All employees of BancWare 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. As soon as practicable after the Effective
Date, SunGard and the executives of BancWare shall review the employee benefit
plans of BancWare 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 the plans of
BancWare with SunGard's employee benefit plans except where cost factors or
unusual circumstances dictate otherwise.
Stock Options. After the closing of the Merger (the "Closing"),
BancWare's 1988 Incentive Stock Option Plan (the "1988 ISO Plan") for key
employees shall remain in effect only as long as any options granted before
Closing remain outstanding thereunder, provided that no further options shall be
granted under the 1988 ISO Plan. In addition, options granted by BancWare to
certain directors, Frank Rizzo and John N. Rees, but not pursuant to the 1988
ISO Plan, will remain in effect after the closing of the Merger. As soon as is
practicable after the Closing, the 1988 ISO Plan and the options granted to
Messrs. Rizzo and Rees shall be amended to (a) change the definition of
"Committee," "Compensation Committee" or "Stock Option Committee" to mean the
Compensation Committee of SunGard's Board of Directors, (b) change all
references to "Class B Common Stock" to mean SunGard Common Stock, and (c) make
other similar or conforming changes.
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Interests of Certain Persons in the Merger. Of the outstanding BancWare
Stock, approximately 84.5% is beneficially owned by persons who are employed by
BancWare, including its officers and directors. See Principal Shareholders of
BancWare.
Exchange of Stock Certificates
As soon as is practicable after the Effective Date, instructions and a
letter of transmittal for surrendering outstanding certificates that immediately
before the Effective Date represented shares of BancWare Stock will be mailed to
each BancWare shareholder of record. Upon the surrender of such certificate and
a properly completed letter of transmittal to 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 BancWare 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 BancWare 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
BancWare Stock shall be deemed to evidence ownership of the number of shares of
SunGard Common Stock, into which the shares of BancWare 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 two 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.
PLEASE DO NOT SEND IN ANY CERTIFICATES FOR YOUR BANCWARE 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 BancWare, SunGard, Newco, the Principal
Selling Parties, the Exchange Agent and the shareholders of BancWare, the
Exchange Agent will maintain an account for each BancWare shareholder containing
such shareholder's Escrowed Stock. The Escrowed Stock will be distributed to the
BancWare 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 2 of the Escrow Agreement for
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indemnification matters under Sections 14 and 5.3 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, BancWare, the
Escrow Agent and the Principal Selling Parties and any such amendment(s) shall
be binding on all parties to the Escrow Agreement. It is a condition precedent
to SunGard's obligation to consummate the Merger that BancWare shareholders
representing at least 95% of the BancWare Stock become party to the Escrow
Agreement.
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
BancWare, 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 Principal Selling Parties 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 Principal Selling Parties 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 BancWare. See
Conditions to Closing.
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DESCRIPTION OF CAPITAL STOCK
SunGard Capital Stock
The authorized capital stock of SunGard consists of 120,000,000 shares
of SunGard Common Stock and 5,000,000 shares of preferred stock, par value $.01
per share ("SunGard Preferred Stock"). As of October 21,1997, there were
approximately 87,789,932 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) 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. The holders
of Common Stock have no preemptive rights to subscribe for additional shares of
SunGard.
As of October 21, 1997, there were approximately 3,208 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.
BancWare Capital Stock
BancWare is authorized by its Articles of Organization, as amended, to
issue 2,000,000 shares of Class A Common Stock, $.01 par value per share,
6,000,000 shares of Class B Common Stock, $.01 par value per share, and
1,000,000 shares of Preferred Stock, $1.00 par value per share. As of August 31,
1997, there were 1,086,532 shares of Class A Common Stock outstanding and held
of record by 56 shareholders, 5,280,475 shares of Class B Common Stock
outstanding and held of record by 7 shareholders, and 205,000 shares of
Preferred Stock outstanding and held of record by 15 shareholders.
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BancWare acts as its own transfer agent and registrar with respect to
the BancWare Stock.
Common Stock
The holders of Class A Common Stock and Class B Common Stock (together,
the "Common Stock") are entitled to one vote per share on all matters to be
voted upon by the shareholders. The holders of Common Stock of both classes are
entitled to receive such dividends, if any, as may be declared from time to time
by the Board of Directors out of funds legally available therefor. Except in
connection with a liquidation, dissolution or winding up of BancWare, no
dividends may be paid on any shares of either class of Common Stock unless the
same dividend is paid on all shares of Common Stock of both classes outstanding
at the time of such payment and unless equivalent or greater dividends are
declared and paid at the same time on the Preferred Stock.
In the event of liquidation, dissolution or winding up of BancWare, or
the merger or consolidation of BancWare with another corporation in which the
BancWare shareholders receive distributions of cash, assets or securities as a
result of such consolidation or merger, or the sale, transfer or other
disposition of all or substantially all the assets of BancWare, the holders of
shares of Class A Common Stock are entitled to be paid out of BancWare's assets
available for distribution to its shareholders, after payment to holders of
Preferred Stock, but before any payment shall be made to the holders of Class B
Common Stock, an amount equal to $.125 per share plus declared but unpaid
dividends on the Class A Common Stock, if any (the "Class A Liquidation
Preference"). In the event of a liquidation, dissolution or winding up of
BancWare, after payment shall have been made in full to the holders of Preferred
Stock of the Preferred Liquidation Preference (as defined below) and to the
holders of the Class A Common Stock of the Class A Liquidation Preference, the
holders of Class A Common Stock and Class B Common Stock shall be entitled, to
the exclusion of the holders of Preferred Stock, to share ratably in all
BancWare assets remaining for distribution.
Shares of Common Stock have no preemptive or conversion rights or other
subscription rights. All outstanding shares of Common Stock are fully paid and
non-assessable.
Preferred Stock
The holders of Preferred Stock are entitled to one vote per share on
all matters to be voted upon by the shareholders. No dividends may be declared
or paid on any class of Common Stock unless equal or greater dividends are
declared and paid on the Preferred Stock at the same time.
In the event of liquidation, dissolution winding up of BancWare, or the
merger or consolidation of BancWare with another corporation in which the
BancWare shareholders receive distributions of cash, assets or securities as a
result of such consolidation or merger, or the sale, transfer or other
disposition of all or substantially all the assets of BancWare, holders of
shares of Preferred Stock are entitled to be paid out of BancWare's assets
available for distribution to its shareholders (a) before any payment shall be
made to the
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holders of Class A Common Stock, an amount equal to $1.00 per share plus
declared but unpaid dividends on the Preferred Stock, if any, and (b) before any
payment shall be made to the holders of Class B Common Stock, an amount equal to
an additional $.125 per share plus declared but unpaid dividends on the
Preferred Stock, if any (the "Preferred Liquidation Preference").
Shares of Preferred Stock are convertible, at the option of the holder
thereof, into Class A Common Stock. All shares of Preferred Stock are currently
convertible on a one-for-one basis into Class A Common Stock. A holder of shares
of Preferred Stock may exercise the conversion right by delivering the
certificate or certificates for the shares to be converted to BancWare at its
main offices during business hours, duly endorsed or assigned in blank or to
BancWare, accompanied by a written notice stating that the holder elects to
convert such shares and stating the name or names (with address) in which the
certificate or certificates for the shares of Class A Common Stock are to be
issued.
Shares of Preferred Stock will not be convertible after the Closing
Date.
Shares of Preferred Stock have no preemptive or conversion rights or
other subscription rights. All outstanding shares of Preferred Stock are fully
paid and non-assessable.
Stock Options
As of July 31, 1997, BancWare had issued and outstanding options (the
"Options") held by eight individuals to purchase an aggregate of 581,900 shares
of Class B Common Stock. Options to purchase 80,000 shares are exercisable at
$0.05 per share, options to purchase 239,900 shares are exercisable at $0.15 per
share, options to purchase 240,000 shares are exercisable at $0.40 per share,
and options to purchase 22,000 shares are exercisable at $0.56 per share. All of
the Options will become immediately exercisable upon the Merger. On the
Effective Date, each Option shall, by virtue of the Merger and without any
action on the part of the holder thereof, be automatically adjusted to provide
that (a) the number and type of shares issuable upon exercise of such Option
shall be that number of shares of SunGard Common Stock (rounded off to the
nearest whole number of shares) equal to the number of shares of BancWare Stock
issuable upon exercise of such Option immediately before the Effective Date,
multiplied by the Class B Common Stock Merger Exchange Ratio, and (b) the
exercise price per share of SunGard Common Stock under such Option shall be that
amount (rounded up to the nearest whole cent) equal to the exercise price per
share of BancWare Stock under such Option immediately before the Effective Date,
divided by the Class B Common Stock Merger Exchange Ratio
COMPARISON OF THE RIGHTS OF
STOCKHOLDERS OF SUNGARD AND BANCWARE
Upon consummation of the Merger, all BancWare shareholders (other than
BancWare 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 ("Delaware Corporate Law") and by SunGard's Amended and
Restated Certificate of Incorporation.
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Stockholders of SunGard, like shareholders of BancWare, are entitled to (1)
dividends if, as and when declared by the board of directors out of funds
legally available therefor, (2) one vote per share on all matters submitted to a
vote of stockholders, and (3) ratable sharing in the distribution of assets
legally available therefor upon the liquidation, dissolution or winding-up of
the corporation after payment of debts and expenses. Like shareholders of
BancWare, stockholders of SunGard have no preemptive rights.
There are certain differences in stockholder rights between Delaware
Corporate Law and the Massachusetts Business Corporation Law ("Massachusetts
Corporate Law") which currently governs the rights of BancWare shareholders.
Some of the more significant differences are:
1. Delaware Corporate Law requires only a majority vote of stockholders
to approve a merger, consolidation, sale of assets or charter amendment, while
Massachusetts Corporate Law requires a two-thirds vote to approve these actions.
2. Delaware Corporate Law provides for dissenter's rights of appraisal
only with respect to certain mergers and consolidations, while Massachusetts
Corporate Law generally provides for such rights with respect to all mergers and
consolidations as well as certain dispositions and adverse charter amendments.
3. Delaware Corporate Law generally permits broader indemnification of
directors and officers than does Massachusetts Corporate Law. SunGard's bylaws
provide for indemnification to the fullest extent permitted by Delaware
Corporate Law. In addition, SunGard has entered into indemnification agreements
(in the form approved by its stockholders) with its directors and officers that
provide indemnification to the fullest extent permitted by Delaware Corporate
Law and, in certain respects, provide greater protection than that specifically
provided by Delaware Corporate Law.
4. Although Delaware Corporate Law and Massachusetts Corporate Law
permit corporations to adopt charter provisions limiting the liability of
directors to the corporation and its stockholders under certain circumstances,
the permitted limitations under Delaware Corporate Law are somewhat more
beneficial to directors than those under Massachusetts Corporate Law.
Unlike the charter of BancWare, SunGard's Amended and Restated
Certificate of Incorporation authorizes the Board of Directors of SunGard to
issue up to 5,000,000 shares of Preferred Stock from time to time in one or more
series with distinctive serial designations. The issuance of Preferred Stock by
SunGard could make it more difficult for a third party to acquire a majority of
the outstanding voting stock of SunGard and could adversely affect the rights of
holders of SunGard Common Stock, such as dividend and liquidation rights.
-19-
<PAGE>
RECENT DEVELOPMENTS OF SUNGARD
On October 17, 1997, SunGard entered into an agreement to merge with
Infinity Financial Technology, Inc. ("Infinity") in a stock-for-stock
transaction in which each share of Infinity common stock will be exchanged for
0.68 of a share of SunGard Common Stock (the "Infinity Merger"). Based upon
SunGard's closing price of $24-1/16 on October 16, 1997, the shares to be issued
by SunGard in the transaction, representing approximately fifteen percent of its
outstanding shares, will have a value of approximately $313 million.
Infinity develops, markets and supports enterprise software solutions
for financial trading and risk management. Infinity, which was founded in 1989
by current chief executive officer Roger A. Lang, Jr., targets global
organizations that manage complex financial assets and has about seventy
installations, including some of the premier financial institutions worldwide.
Infinity's suite of off-the-shelf applications, which run on Windows NT and UNIX
operating systems, are based on the open Infinity Data Model and Fin ++ Class
Library.
SunGard management believes that, while the acquisition of Infinity
could add to SunGard's 1998 earnings growth, it should dilute 1997 earnings by
approximately $0.04 per share exclusive of one-time costs related to the merger.
The acquisition, which is intended to be accounted for as a
pooling-of-interests, is expected to close by the end of 1997 or early in 1998,
subject to, among other things, regulatory approval and approval of the
shareholders of Infinity.
The following Unaudited Pro Forma Combined Condensed Financial Data
assumes that the Infinity Merger has occurred on January 1, 1994, combining the
results of SunGard and Infinity as of June 30, 1997 and December 31, 1996, and
for the six months ended June 30, 1997 and 1996 and for each of the three years
in the period ended December 31, 1996, with the Infinity Merger 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 Infinity Merger had
been effected on the dates indicated or the results that may be obtained in the
future.
During the nine month period ended September 30, 1997, SunGard has
completed seven acquisitions. Pro forma data for these acquisitions are not
presented because, except for one time charges related to purchased in-process
research and development as described in Note 5 to the Unaudited Pro Forma
Combined Condensed Financial Data appearing on page 21, 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 Financial Data should be
read in conjunction with the historical financial statements and the related
notes thereto of SunGard and Infinity, all of which are incorporated by
reference in this Proxy Statement-Prospectus.
-20-
<PAGE>
SUNGARD DATA SYSTEMS INC. AND INFINITY FINANCIAL TECHNOLOGY, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months
Ended June 30, Years Ended December 31,
--------------------------- ------------------------------------------
1997 1996 1996 1995 1994
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
SunGard.................... $395,072 $305,366 $670,309 $532,628 $437,190
Infinity................... 29,053 17,947 41,548 24,738 12,595
Pro Forma Combined......... 424,125 323,313 711,857 557,366 449,785
Net Income:
SunGard.................... 32,209/(5)/ 30,851 34,901(5) 48,672/(5)/ 43,087
Infinity................... 3,189/(2)/ 2,483 5,405 2,173/(3)/ 1,641
Pro Forma Combined/(1)/.... 35,398 33,334 40,306 50,845 44,728
Fully Diluted net income per
common share:/(4)/
SunGard (as reported)...... 0.36/(5)/ 0.36 0.41/(5)/ 0.61/(5)/ 0.56
Infinity/(6)/.............. 0.22/(2)/ 0.19 0.41 0.17/(3)/ 0.14
Pro Forma Combined......... 0.35 0.34 0.41 0.55 0.50
Shares used to compute fully
diluted net income per
common share:/(4)/
SunGard (as reported)...... 88,288 85,962 86,122 79,336 77,004
Infinity/(6)/.............. 14,291 12,805 13,085 12,500 12,149
Pro Forma Combined......... 102,579 98,767 99,207 91,836 89,153
Book Value per common share:
SunGard (as reported)/(4)/. $ 5.80 $ 5.50
Infinity/(6)/.............. 3.50 3.27
Pro Forma Combined/(4)/.... 5.50 5.21
</TABLE>
- -------------------------------
(1) Excludes merger costs which are estimated to be approximately $4.0
million.
(2) Includes one-time charge for purchased in-process research and development
of $861 ($551 after tax).
(3) Includes reduction of $1,276 from net income in connection with the
redemption of the Series B Preferred Stock of Infinity.
(4) All shares have been adjusted for the two-for-one stock split which
occurred in September 1997.
(5) Includes one-time charges for purchased in-process research and
development, merger and other costs of $51,083 and $4,238 in 1996 and 1995
($33,468 and $4,238 after-tax, or $0.39 and $0.05 per share,
respectively), and $9,618 for the six months ended June 30, 1997 ($5,805
after-tax, or $0.07 per share).
(6) Presented on a pro forma equivalent basis, converting Infinity's as
reported shares to SunGard equivalent shares using the exchange ratio of
0.68 of a share of SunGard Common Stock for each share of Infinity Common
Stock.
-21-
<PAGE>
MARKET PRICES OF BANCWARE STOCK AND DIVIDENDS
As of the Record Date, there were 56 holders of record of BancWare
Class A Common Stock, seven holders of record BancWare Class B Common Stock and
15 holders of record of BancWare Preferred Stock. There is no established public
trading market for either BancWare Class A Common Stock, BancWare Class B Common
Stock or BancWare Preferred Stock. As a result, the market value for shares of
BancWare Stock is not readily ascertainable.
BancWare has never paid any dividends and has no current intention to
pay dividends in the foreseeable future.
SELECTED FINANCIAL INFORMATION OF BANCWARE
The following selected financial data for the years ended December 31,
1996 and 1995 are derived from the financial statements of BancWare. The
financial data for the six months ended June 30, 1997 and 1996 are derived from
unaudited financial statements. The financial data for the six months ended June
30, 1997 and 1996 include all adjustments, consisting of normal recurring
accruals, which BancWare 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, 1997 are not necessarily indicative of
the results that may be expected for the entire year ended December 31, 1997.
The data should be read in conjunction with the financial statements, related
notes, and other financial information of BancWare included herein. See INDEX TO
FINANCIAL STATEMENTS OF BANCWARE.
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
--------------------------- --------------------------
1997 1996 1996 1995
------------ ----------- ----------- -----------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Income Statement Data:
Revenues............................. $1,921 $1,369 $2,651 $2,008
Income (loss) from operations........ 233 107 (48) (60)
Net income (loss).................... 175 94 (105) (83)
Net income (loss) per share:
Primary..................... 0.03 0.02 (0.02) (0.01)
Fully diluted............... 0.03 0.02 (0.02) (0.01)
Balance sheet Data:
Total Assets......................... 781 537 545 491
Total short term and long term debt.. 0 0 0 0
Stockholders' equity (deficit)....... (75) (52) (250) (145)
</TABLE>
-22-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS OF BANCWARE
General
BancWare was founded in 1982 and provides planning, reporting, and
analysis software to the banking industry. Its two main products are BancWare
Convergence, a planning and analysis model, and BancWare Financial Controller, a
data collection and distribution tool.
BancWare's sales come from three primary sources: sales of new software
licenses, consulting and training services, and annual maintenance which
includes license renewal and customer support. Revenues first topped $1,000,000
in 1992 and reached $2,651,000 in 1996. Revenues for the first six months of
1997 were $1,921,000, as compared to $1,369,000 for the same period for 1996.
Much of the recent growth in sales has come in international markets.
In the second half of 1995, BancWare entered into distribution agreements with
distributors in Korea, Japan and Australia, and all have produced significant
sales. A European distributor was added in December 1996. BancWare's new
software licensing revenues are generated by a relatively small number of sales,
each with a significant dollar value. While Management believes that the overall
trend in revenues will continue to be positive, revenues are likely to fluctuate
unpredictably when viewed on a quarter-to-quarter, or even a year-to-year basis.
All areas of BancWare's business have been expanding over the past two
years. Despite consolidation in the banking business, which continues to be a
significant business risk, BancWare's customer retention has been very strong.
As a result, as new licenses are sold the customer base grows leading to growth
in consulting, training, and license renewal revenues. In addition to its
distributors, BancWare has an internal sales team that now has four members,
three of which were added in June 1997. The expanded sales force is expected to
have a significant impact starting in the fourth quarter of 1997.
BancWare's operations are self-funding and management believes the
company's capital resources are sufficient to fund current needs. Within this
goal of being self-funding, management invests as much as possible in the growth
of the business by devoting resources to product development and sales. BancWare
has a $350,000 working capital line of credit that currently has no amounts
outstanding against it.
Product sales are not seasonal but can fluctuate widely from month to
month due to the timing of orders. BancWare has a diverse customer base within
the banking industry and is not dependent on any single customer.
BancWare has two key product development projects scheduled for
completion at the end of 1997. One is for the Option Adjusted Value of Risk,
which is critical for continuing sales of BancWare Convergence. The other is
Mapping Manager, which is a Windows(TM) based
-23-
<PAGE>
replacement for the Extract Manager and is critical for BancWare Financial
Controller sales. Delays in completing these projects could have a significant
impact on BancWare revenues.
The software employment market in the Boston area is currently very
competitive. Though BancWare does not anticipate losing any key employees in the
near future, there is considerable risk of such loss, and any losses could
adversely affect development schedules and sales targets. The competitive
employment market will also continue to apply pressure to salary levels. Travel
expenses, which are the next largest category after compensation, are expected
to remain proportionate to sales. Within 18 months, BancWare expects to require
additional office space and expects to renegotiate the five-year lease it signed
late in 1996.
Results of Operations
Revenues
Net revenue for the six months ended June 30, 1997 totaled $1,921,000,
an increase of 40% from the same period in 1996. Domestic license sales grew
27%, from $378,000 to $481,000, and new license sales by foreign distributors
grew 65%, from $268,000 to $443,000. The foreign sales increase was primarily
due to foreign distributors in their second year with BancWare becoming
increasingly productive. Consulting revenue rose 80% due to growth of the
customer base and a 40% rate increase. Maintenance revenue was up 9% due to an
increased customer base. Revenue per employee was $80,000 for the six months
ended June 30, 1997, and $68,000 for the same period in 1996.
Net revenue in 1996 increased 32% to $2,651,000 from $2,008,000 in
1995. Most of the increase came from new license sales in international markets
as BancWare's distributors in Korea, Australia, and Japan became productive. In
1996, total billing to customers outside North America was $581,000, up from
$91,000 in 1995. Though new license sales in North American declined 5%, the
increase in the installed base of customers led to a 16% increase in maintenance
revenue and a 26% increase in consulting and training fees.
Net revenue in 1995 was up 10% from 1994. New license sales increased
9% while maintenance and consulting revenues increased 6% and 11%, respectively,
as a result of the larger customer base. Sales per employee were $121,000,
$112,000, and $107,000 in 1996, 1995, and 1994, respectively.
Expenses
Operating expenses for the six months ended June 30, 1997 totaled
$1,689,000, an increase of 34% from the same period in 1996. This increase is
partly due to the increase in sales, but primarily reflects management's efforts
to invest as much as possible in expansion of the business. Headcount, including
contractors, increased from 22 at June 30, 1996 to 28 at June 30, 1997. Three
new sales people were added in June 1997 but management believes it will take at
lease several months to realize new sales as a result of these additions.
Operating margin was 12% for the six months ended June 30, 1997 and 8% for the
same period in 1996.
-24-
<PAGE>
Operating expenses in 1996 increased 31% to $2,697,000 from $2,062,000
in 1995. Part of the increase is due to increases in sales, but the remainder is
from investment in product development. During 1996, total headcount increased
from 18 to 24, and payroll expenses in engineering and product management
increased 122% over 1995. Expenses in 1995 increased 14% to $2,062,000 from
$1,811,000 in 1994. Operating margins were (2)%, (3)%, and 1% in 1996, 1995, and
1994, respectively.
Income Taxes
Income tax expense for the six months ended June 30, 1997 was $62,000,
an effective rate of 26% compared to 15% for the same period in 1996. No federal
income taxes were accrued in 1996, while $35,000 was accrued through June 30,
1997.
The provision for state income taxes in 1996 was $62,000 and $28,400 in
1995. There was no federal income tax expense recorded either year.
Liquidity and Capital Resources
At June 30, 1997, BancWare had cash and equivalents of $145,000, up
from $58,000 a year earlier, reflecting cumulative profitability. Receivables
were $574,000, up from $432,000 a year earlier, due to higher sales. The ratio
of current assets to total liabilities was .88:1 at June 30, 1997 and .91:1 at
June 30, 1996.
At December 31, 1996, BancWare had cash and equivalents of $151,000,
down from $376,000 at December 31, 1995. Most of this change had to do with the
timing of sales and collections, which can fluctuate greatly month to month due
to the timing of license sales and renewals. Receivables at December 31, 1996
were $365,000 and the ratio of current assets to total liabilities was .65:1. At
December 31, 1995, receivables were $98,000 and the ratio of current assets to
total liabilities was .77:1. Cash and equivalents at December 31, 1995 were
$5,000 higher than at December 31, 1994. At December 31, 1994, the ratio of
current assets to total liabilities was .85:1.
As of June 30, 1997, BancWare had a line of credit of $350,000 from a
local bank. This line of credit was $175,000, $100,000, and $50,000 at December
31, 1996, December 31, 1995, and December 31, 1994, respectively. No amounts
were outstanding on any of those dates however. Due to fluctuations in
collections, BancWare has borrowed funds under the line of credit periodically.
-25-
<PAGE>
BUSINESS OF BANCWARE
BancWare is a privately held software development, sales and service
company located in Boston, Massachusetts. Formed in 1981 and incorporated in
1982, BancWare was founded to provide balance sheet simulation software to
support the newly formed asset/liability management process in U.S. banks and
thrifts. Over the years, BancWare's software offerings have expanded and the
market has become an international one. The basic asset/liability simulation
software has been enhanced to support financial forecasting. In addition,
BancWare has added software options for the Monte-Carlo generation of interest
rate scenarios, multi-currency support, an Intex CMO interface and an advanced
prepayment module. BancWare optionally offers professional services
implementation consulting engagements to implement all of the products and
options above. Finally, through a combination of software and professional
services consulting, BancWare supports asset/liability and planning data feeds
for forecasting or asset/liability management from the application accounting
systems, coterminous funds transfer pricing ("CFTP") for balance sheet cost
accounting, and the financial database of record to optionally retain the
information provided by the feeds or CFTP.
In the last two years, BancWare has moved from an exclusively
U.S.-based focus to an international one. BancWare has 85 clients of which 28
are located in Asia or Australia. BancWare also has two clients in Belgium, one
in Sweden and one in Peru. BancWare has international distributors in Japan,
Australia, Europe and Korea. BancWare's distributors in Korea and Japan are each
responsible for converting BancWare's Convergence product to their native
languages.
-26-
<PAGE>
PRINCIPAL SHAREHOLDERS OF BANCWARE
The following table sets forth, as of the Record Date, certain
information with respect to the beneficial ownership of BancWare Class A Common
Stock, BancWare Class B Common Stock, and BancWare Preferred Stock by (i) each
person who is the beneficial owner of more than 5% of the outstanding BancWare
Class A Common Stock, BancWare Class B Common Stock or BancWare Preferred Stock,
(ii) each director of BancWare, (iii) each of the executive officers of
BancWare, 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 BancWare capital stock indicated.
<TABLE>
<CAPTION>
Class A Class B
Common Stock Common Stock Preferred Stock
------------------------ ------------------------- ------------------------
Name Shares Percent Shares Percent Shares Percent
- ------------------------------------- ----------- ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
William E. Popp 535,000 49.24% 1,465,000 27.74% -- --
Director, President and Chief
Executive Officer
M. I. Mandalinci/(1)/ -- -- 312,000 5.58 -- --
Executive Vice President, Assistant
Clerk, Chief Operating Officer
Douglas Drane/(2)/ 25,000 2.30 3,361,875 63.67 -- --
Director
John N. Rees/(3)/ 50,000 4.60 40,000 * 87,500 42.68%
Treasurer, Director, Chairman
Frank Rizzo/(3)/ -- -- 40,000 * -- --
Director
Wilfred E. Gardner 28,511 2.62 -- -- -- --
Clerk and Secretary
All directors and executive officers
(6 persons) 638,511 58.77 5,218,875 92.01 87,500 42.68
Fleet National Bank -- -- -- -- 40,000 19.51
Louis A. Bruso, Jr. 106,500 9.80 293,500 5.25 -- --
Lydia D. Hart/(4)/ 10,521 * -- -- 12,000 5.85
</TABLE>
- ---------------------------
*Less than 1.0%
(1) Includes options to purchase 311,900 shares of Class B Common Stock which
are exercisable within 60 days of the Record Date. Does not include
options to purchase 168,000 shares of Class B Common Stock, which will
become exercisable upon the Effective Date.
(2) Includes 1,401,875 shares of Class B Common Stock held in the name of
Drane Associates, Inc.
(3) Includes options to purchase 40,000 shares of Class B Common Stock which
are exercisable within 60 days of the Record Date.
(4) Includes: 2,000 shares of Class A Common Stock and 4,000 shares of
Preferred Stock held in the name of Lydia D. Hart, Custodian under UGMA
for Andrew Ely Hart and 2,173 shares of Class A Common Stock and 4,000
shares of Preferred Stock held in the name of Lydia D. Hart, Custodian
under UGMA for Caroline B. Hart. Lydia D. Hart has the authority to vote
all of these shares.
-27-
<PAGE>
EXPERTS
The consolidated balance sheets of SunGard and subsidiaries as of
December 31, 1996 and 1995 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, 1996 have been incorporated by reference in this Proxy
Statement-Prospectus and in the Registration Statement in reliance upon the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The financial statements of BancWare at December 31, 1996, and for the
years ended December 31, 1996 and 1995, appearing in this Proxy
Statement-Prospectus and in the Registration Statement, have been audited by
Carlin, Charron & Rosen LLP, independent 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.
The consolidated financial statements and schedule of Infinity
Financial Technology, Inc. appearing in Infinity Financial Technology, Inc.'s
Annual Report (Form 10-K) for the year ended December 31, 1996, have been
audited by Ernst & Young, LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference 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, has rendered
an opinion to the effect that the shares of SunGard Common Stock to be issued in
exchange for shares of BancWare 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. Lucash, Gesmer, &
Updegrove LLP will pass on certain legal matters on behalf of BancWare.
-28-
<PAGE>
INDEX TO FINANCIAL STATEMENTS OF BANCWARE
PAGE
----
Report of Independent Auditors............................................. F-1
Audited Financial Statements
Balance Sheet as of December 31, 1996...................................... F-2
Statements of Operations for the Years Ended
December 31, 1996 and 1995........................................ F-3
Statements of Cash Flows for the Years Ended
December 31, 1996 and 1995........................................ F-4
Statement of Deficiency in Assets for the Years Ended
December 31, 1996 and 1995........................................ F-5
Unaudited Financial Statements
Balance Sheet as of June 30, 1997.......................................... F-6
Statements of Operations for the Six Months
Ended June 30, 1997 and 1996...................................... F-7
Statements of Cash Flows for the Six Months
Ended June 30, 1997 and 1996...................................... F-8
Statement of Deficiency in Assets for the Six Months
Ended June 30, 1997 and 1996...................................... F-9
Notes to Financial Statements............................................. F-10
-29-
<PAGE>
INDEPENDENT AUDITOR'S REPORT
----------------------------
The Board of Directors
BancWare, Inc.
Boston, Massachusetts
We have audited the accompanying balance sheet of BancWare, Inc. as of
December 31, 1996 and for each of the years ended December 31, 1996 and 1995 the
related statements of operations, deficiency in assets, and cash flows. 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 audit provides 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 BancWare, Inc. at
December 31, 1996 and for each of the years ended December 31, 1996 and 1995 the
results of its operations and its cash flows in conformity with generally
accepted accounting principles.
As discussed in Note 11 to the financial statements, certain errors
resulting in overstatement of previously reported net income as of December 31,
1996 and 1995, were discovered by management of the Company during the current
year. Accordingly, an adjustment has been made to deficit as of December 31,
1996 and 1995, to correct the errors.
CARLIN CHARRON & ROSEN LLP
MILFORD, MASSACHUSETTS
January 29, 1997
(except for Note 11, as to which
the date is October 27, 1997)
F-1
<PAGE>
BANCWARE, INC.
-------------
BALANCE SHEET
-------------
DECEMBER 31, 1996
-----------------
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 150,708
Accounts receivable 364,789
Prepaid expenses 1,863
-----------
TOTAL CURRENT ASSETS 517,360
-----------
PROPERTY AND EQUIPMENT:
Furniture and fixtures 25,775
Equipment 70,799
Leasehold improvements 3,789
-----------
100,363
Less accumulated depreciation 96,885
-----------
3,478
-----------
OTHER ASSETS:
Deposits 24,237
-----------
24,237
-----------
$ 545,075
===========
<CAPTION>
LIABILITIES AND DEFICIENCY IN ASSETS
------------------------------------
<S> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 221,478
State income tax payable 7,105
Deferred income 566,745
-----------
TOTAL CURRENT LIABILITIES 795,328
-----------
DEFICIENCY IN ASSETS:
Preferred stock, $1.00 par value. Authorized
1,000,000 shares, issued and outstanding
205,000 shares 205,000
Class A common stock, $.01 par value. Authorized
2,000,000 shares, issued and outstanding
1,086,532 shares 10,865
Class B common stock, $.01 par value. Authorized
6,000,000 shares, issued and outstanding
5,280,475 shares 52,805
Additional paid-in capital 1,035,351
Deficit (1,482,256)
-----------
(178,235)
Less treasury stock, 732,054 Class A common shares (72,018)
-----------
(250,253)
-----------
$ 545,075
===========
</TABLE>
See notes to financial statements. F-2
<PAGE>
BANCWARE, INC.
--------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
----------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
REVENUE $ 2,650,673 $ 2,007,561
OPERATING EXPENSES, excluding depreciation 2,697,429 2,062,246
----------- -----------
OPERATING LOSS BEFORE DEPRECIATION AND OTHER
INCOME, EXPENSE AND TAXES ON INCOME (46,756) (54,685)
DEPRECIATION AND OTHER INCOME(EXPENSE):
Depreciation (696) (5,274)
Interest income 5,691 5,148
Interest expense (1,148) --
----------- -----------
3,847 (126)
----------- -----------
LOSS BEFORE TAXES (42,909) (54,811)
----------- -----------
TAXES ON INCOME 62,172 28,400
----------- -----------
NET LOSS $ (105,081) $ (83,211)
=========== ===========
</TABLE>
See notes to financial statements. F-3
<PAGE>
BANCWARE, INC.
--------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
----------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $(105,081) $ (83,211)
--------- ---------
Adjustments to reconcile net loss to net
cash (used) provided by operating activities:
Depreciation and amortization 696 5,274
Changes in operating assets and liabilities:
Decrease (increase) prepaid expenses 15,000 (12,208)
Increase in accounts receivable (266,345) (98,444)
Increase in deposits (24,237) --
(Decrease) increase in state income
tax payable (21,295) 28,400
Increase in accounts payable and
accrued expenses 100,996 85,682
Increase in deferred income 79,245 78,625
--------- ---------
Total adjustments (115,940) 87,329
--------- ---------
Net cash (used) provided by operating
activities (221,021) 4,118
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (4,174) --
Net cash used by investing activity (4,174) --
--------- ---------
NET (DECREASE) INCREASE IN CASH (225,195) 4,118
CASH, beginning of year 375,903 371,785
--------- ---------
CASH, end of year $ 150,708 $ 375,903
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid during the year for -
Interest $ 1,148 $ --
========= =========
Income taxes $ 59,595 $ --
========= =========
</TABLE>
See notes to financial statements. F-4
<PAGE>
BANCWARE, INC.
--------------
STATEMENT OF DEFICIENCY IN ASSETS
---------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
----------------------------------------------
<TABLE>
<CAPTION>
Class A Class B
Preferred Stock Common Stock Common Stock
(Par value = $1.00) (Par value = $.01) (Par value = $.01)
------------------------ ------------------------- -------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1995, 205,000 $205,000 1,082,788 $10,828 5,280,475 $52,805
as restated
RECLASSIFICATION 3,744 37
NET INCOME, as restated -- -- -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
BALANCE, December 31, 1995 205,000 205,000 1,086,532 $10,865 5,280,475 $52,805
NET INCOME, as restated -- -- -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
BALANCE, December 31, 1996 205,000 $205,000 1,086,532 $10,865 5,280,475 $52,805
=========== ============ ============ ============ ============ ============
<CAPTION>
Treasury Stock
Additional ------------------------
Paid-in
Capital Deficit Shares Amount
------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
BALANCE, January 1, 1995, $1,035,388 $(1,293,964) 732,054 $ (72,018)
as restated
RECLASSIFICATION (37)
NET INCOME, as restated -- (83,211) -- --
------------- ------------- ----------- ------------
BALANCE, December 31, 1995 $1,035,351 $(1,377,175) 732,054 $(72,018)
NET INCOME, as restated -- (105,081) -- --
------------- ------------- ----------- ------------
BALANCE, December 31, 1996 $1,035,351 $(1,482,256) 732,054 $(72,018)
============= ============= =========== ============
</TABLE>
See notes to financial statements. F-5
<PAGE>
BANCWARE, INC.
--------------
BALANCE SHEET
-------------
JUNE 30, 1997
-------------
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 144,727
Accounts receivable less reserve of $10,000
for uncollectable receivables 563,833
Prepaid expenses 44,689
-----------
TOTAL CURRENT ASSETS 753,249
-----------
PROPERTY AND EQUIPMENT:
Furniture and fixtures 25,775
Equipment 70,799
Leasehold improvements 3,789
-----------
100,363
Less accumulated depreciation 96,884
-----------
3,479
-----------
OTHER ASSETS:
Deposits 24,237
-----------
24,237
-----------
$ 780,965
===========
<CAPTION>
LIABILITIES AND DEFICIENCY IN ASSETS
------------------------------------
<S> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 348,598
State income tax payable 7,105
Deferred income 500,226
-----------
TOTAL CURRENT LIABILITIES 855,929
-----------
DEFICIENCY IN ASSETS:
Preferred stock, $1.00 par value. Authorized
1,000,000 shares, issued and outstanding
205,000 shares 205,000
Class A common stock, $.01 par value. Authorized
2,000,000 shares, issued and outstanding
1,086,532 shares 10,865
Class B common stock, $.01 par value. Authorized
6,000,000 shares, issued and outstanding
5,280,475 shares 52,805
Additional paid-in capital 1,035,351
Deficit (1,306,967)
-----------
(2,946)
Less treasury stock, 732,054 Class A common shares (72,018)
-----------
(74,964)
-----------
$ 780,965
===========
</TABLE>
See notes to financial statements. F-6
<PAGE>
BANCWARE, INC.
--------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
REVENUE $1,921,495 $1,369,027
OPERATING EXPENSES 1,688,878 1,261,956
---------- ----------
OPERATING INCOME BEFORE INTEREST
INCOME AND TAXES ON INCOME 232,617 107,071
INTEREST INCOME 4,252 3,438
---------- ----------
INCOME BEFORE TAXES 236,869 110,509
INCOME TAXES:
State 26,580 16,965
Federal 35,000 --
---------- ----------
NET INCOME $ 175,289 $ 93,544
========== ==========
</TABLE>
See notes to financial statements. F-7
<PAGE>
BANCWARE, INC.
--------------
STATEMENTS OF CASH FLOWS
------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
-----------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES: 1997 1996
--------- ---------
<S> <C> <C>
Net income $ 175,289 $ 93,544
--------- ---------
Adjustments to reconcile net income to net
cash used by operating activities:
Changes in operating assets and liabilities:
Prepaid expenses (40,826) (30,004)
Accounts receivable (201,044) (333,355)
Accounts payable and accrued expenses 127,119 (25,551)
Deferred income (66,519) (22,659)
--------- ---------
Total adjustments (181,270) (411,569)
--------- ---------
Net cash used by operating activities (5,981) (318,025)
--------- ---------
NET DECREASE IN CASH (5,981) (318,025)
CASH, beginning of period 150,708 375,903
--------- ---------
CASH, end of period $ 144,727 $ 57,878
========= =========
</TABLE>
See notes to financial statements. F-8
<PAGE>
BANCWARE, INC.
--------------
STATEMENT OF DEFICIENCY IN ASSETS
---------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1997
--------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
Class A Class B
Preferred Stock Common Stock Common Stock
(Par value = $1.00) (Par value = $.01) (Par value = $.01)
------------------------ ------------------------- -------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, at December 31, 1996
as restated 205,000 $205,000 1,086,532 $10,865 5,280,475 $52,805
NET INCOME -- -- -- -- -- --
BALANCE, at June 30, 1997 205,000 $205,000 1,086,532 $10,865 5,280,475 $52,805
=========== ============ ============ ============ ============ ============
<CAPTION>
Treasury Stock
Additional -------------------------
Paid-in
Capital Deficit Shares Amount
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, at December 31, 1996
as restated $1,035,351 $(1,482,256) 732,054 $ (72,018)
NET INCOME -- 175,289 -- --
BALANCE, at June 30, 1997 $1,035,351 $(1,306,967) 732,054 $(72,018)
============ ============= ============ ============
</TABLE>
See notes to financial statements. F-9
<PAGE>
BANCWARE, INC.
--------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. Nature of Business:
------------------
BancWare, Inc. (the Company) was incorporated on September 1, 1982 at
which time the Company acquired the net assets from BancWare (a predecessor
partnership) in exchange for common stock. The Company designs, develops and
markets proprietary computer software throughout the world.
2. Summary of Significant Accounting Policies:
------------------------------------------
Property, Equipment and Depreciation - Property and equipment are
------------------------------------
stated at cost. Depreciation is computed using the straight-line method at rates
sufficient to write off the cost of the applicable assets over their estimated
useful lives.
Revenue Recognition - The Company recognizes revenue from various
-------------------
sources as follows:
Renewals/Maintenance Income - Revenue from license renewals is
recognized upon renewal of the contract. Revenue from maintenance contracts is
recognized over the term of the contract.
New License Fee Income is recognized as revenue as follows:
Standard Orders - License fees for standard orders, orders which do not
require acceptance or penalty clauses after delivery of the product, are
recognized upon delivery.
Conditional Orders - License fees for conditional orders which require
customer acceptance contingencies, are recognized upon final acceptance of the
licensed product by the customer.
Consulting and Training - Consulting and training income is recognized
as services are performed.
Advertising - The Company expenses advertising as incurred. Advertising
-----------
expense was $7,231 and $1,935 for the years ended December 31, 1996 and
1995, respectively.
Use of Estimates - The preparation of financial statements in
----------------
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Bad Debts - The Company uses the allowance method of accounting for bad
---------
debts. No allowance was deemed necessary at December 31, 1996 and 1995.
F-10
<PAGE>
BANCWARE, INC.
--------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
Income Taxes - Investment tax and research and development credits are
------------
accounted for as a reduction of the provision for Federal income taxes in the
year realized.
3. Software Production Costs:
-------------------------
In accordance with the requirements of SFAS No. 86, "Accounting for
Costs of Computer Software to be Sold, Leased or Otherwise Marketed", the
company expenses all costs to develop computer software.
4. Income Taxes:
------------
In accordance with SFAS 109, "Accounting for Income Taxes," the Company
recorded deferred tax assets net of a valuation allowance to reflect the future
tax benefits of financial operating loss and tax credit carryforwards, and
temporary differences due primarily to differences between tax and financial
reporting for software development costs and software maintenance revenues.
A valuation allowance is required by SFAS 109 if, based on the weight
of available evidence, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. The need for a valuation allowance
is evaluated periodically by management. Based on available evidence, management
concluded that a valuation allowance of $199,800 and $291,100 was necessary at
December 31, 1996 and 1995, respectively.
At December 31, 1996 and 1995, income tax expense consisted solely of
state income taxes. No federal income tax expense was recorded due to the use of
federal tax credit and net operating loss carryforwards. The Company has unused
tax credits available to offset future taxable income and tax liabilities as
follows:
<TABLE>
<CAPTION>
Date Expired Tax Credits
------------ -----------
<S> <C>
1997 $ 8,305
1998 18,750
1999 13,308
2000 11,507
2001 18,530
2003 --
2004 --
2007 --
Beyond 2007 16,000
-------
$86,400
=======
</TABLE>
F-11
<PAGE>
BANCWARE, INC.
--------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
5. Line of Credit:
--------------
The Company has a $175,000 line of credit with a bank. There were no
outstanding borrowings under this line of credit at December 31, 1996 and 1995.
Interest on outstanding borrowings accrue at the bank's prime rate plus one half
per cent. The line of credit is secured by all assets of the Company.
6. Commitments:
-----------
The Company has several noncancelable operating leases for computer
equipment and a lease for office space. In 1996 and 1995, the rental expense
was $120,749 and $115,372, respectively.
Future rental expense under these leases is as follows:
<TABLE>
<S> <C>
1997 $172,397
1998 $152,304
1999 $146,382
2000 $145,428
2001 $133,309
</TABLE>
7. Stock Options and Warrants:
--------------------------
On April 20, 1988 the Company established an incentive stock option
plan that provides for the granting of options to certain key employees of the
corporation. Under the terms of the plan, the aggregate number of shares which
may be issued upon exercise of all options granted under the plan shall not
exceed 720,000 shares of the $.01 par value Class B common stock. The price at
which shares of stock may be purchased under the plan shall be determined by the
Board of Directors and such price shall be at least equal to the fair market
value of such shares on the date on which the option is granted.
Incentive stock option plan transactions for the years ended December
31, 1996 and 1995 are as follows:
<TABLE>
<S> <C>
Options granted and outstanding
at January 1, 1995 560,000
Options granted - 1995 120,000
Options exercised or cancelled - 1995 320,000
---------
Options granted and outstanding
at December 31, 1995 360,000
Options granted - 1996 162,000
Options exercised or cancelled - 1996 20,000
----------
Options granted and outstanding
at December 31, 1996 502,000
==========
</TABLE>
F-12
<PAGE>
BANCWARE, INC.
--------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
In addition to the incentive stock option plan described above, the
Company granted non-qualified stock options to purchase 80,000 shares of Class B
common stock at an exercise price of $.05 per share. The non-qualified stock
options expire ten (10) years from date of grant, vest in full immediately and
exercise of the non-qualified option is subject to continuous affiliation of the
optionee as a director or consultant for the Company.
8. Concentration of Credit Risk:
----------------------------
The Company places its cash and temporary investments with high credit
quality institutions. At times such investments may be in excess of FDIC
insurance limitations.
9. Major Customer:
--------------
Sales to a major customer for 1996 and 1995 were $288,259 and $327,958,
respectively.
10. Deferred Income:
---------------
Deferred income represents the unearned portion of maintenance contract
income. Maintenance contract income is recognized ratably over the term of the
contract, normally 12 months.
11. Restated Financial Statements:
-----------------------------
The 1996 and 1995 financial statements have been restated to comply
with generally accepted accounting principles required for the accounting of
maintenance contract income, accrued expenses and software production costs. The
effect of these changes in accounting reduced 1996 and 1995 income and by
$269,024 and $261,686, respectively.
F-13
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
PARTIES: BANCWARE, INC.
a Massachusetts corporation ("BancWare")
88 Broad Street
Boston, Massachusetts 02110
WILLIAM E. POPP ("Popp")
28 Sunnyrock Drive
Walpole, Massachusetts 02081
DOUGLAS DRANE ("Drane")
13 Robroy
Austin, Texas 78746
M.I. MANDALINCI ("Mandalinci")
30 Hideaway Lane
Methuen, Massachusetts 01844
SUNGARD DATA SYSTEMS INC.
a Delaware corporation ("SunGard")
1285 Drummers Lane, Wayne, Pennsylvania 19087
BWI ACQUISITION INC.
a Delaware corporation ("Newco")
1285 Drummers Lane, Wayne, Pennsylvania 19087
DATE: September 22, 1997
BACKGROUND: BancWare is in the business of designing, developing, selling,
licensing and maintaining interest rate risk management, financial forecasting,
coterminus funds transfer pricing and financial database record software for
thrifts and other financial institutions ("BancWare Business"). Popp,
Mandalinci and Drane (collectively "Principal Selling Parties") own
approximately 82.0% of the issued and outstanding shares of BancWare Stock (as
defined in Section 3.3). The Principal Selling Parties and the other
shareholders of BancWare Stock are hereinafter referred to as the
"Shareholders." The parties desire that Newco be merged with and into BancWare
(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 BancWare 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 BancWare and its shareholders. The
respective Boards of Directors of SunGard
A-1
<PAGE>
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, 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 goodwill, 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.
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 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
A-2
<PAGE>
(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"), and 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, provided
that, in cases where such generally accepted accounting principles permit the
use of two or more accounting policies ("Accepted Policies") yielding different
results, the following Accepted Policy shall be used, regardless of materiality:
(a) the historical Accepted Policy used by BancWare, if one is applicable; (b)
if none of the historical Accepted Policies used by BancWare is applicable, the
historical Accepted Policy used by SunGard, if one is applicable; or (c) if none
of the historical Accepted Policies used by BancWare or by SunGard, is
applicable, the preferred Accepted Policy under United States accounting rules
and regulations. In no event shall the consistent application of the historical
accounting policies used by BancWare have priority over GAAP, 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 the Real Property of BancWare, 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, designated or regulated as hazardous, dangerous or toxic
pursuant to any Law of any state in which any of the leased or owned Real
Property of BancWare is located or any United States Law, and (b) asbestos,
polychlorinated biphenyls ("PCB's"), petroleum, petroleum products and urea
formaldehyde.
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.
1.12. "Intangible" means any name, corporate name, fictitious name,
trademark, trademark application, service mark, service mark application, trade
name, brand
A-3
<PAGE>
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.
A-4
<PAGE>
1.22. "Tangible Property" means any furniture, fixtures, leasehold im
provements, vehicles, office equipment, computer equipment, other equipment,
machinery, tools, forms, supplies or other tangible personal property of any
nature.
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 BancWare (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 10.1) and shall be
effective on the Effective Date (as defined in Section 10.1).
SECTION 3: REPRESENTATIONS OF BANCWARE AND THE PRINCIPAL SELLING PARTIES
Knowing that SunGard and Newco rely thereon, BancWare and the Principal
Selling Parties, jointly and severally, represent and warrant to SunGard and
Newco as of the date of this Agreement as follows:
3.1 Organization. BancWare is a corporation duly organized, validly
existing and in good standing under the Laws of Massachusetts. BancWare
possesses the full corporate power and authority to enter into and perform this
Agreement. BancWare possesses the full corporate power and authority to own its
Assets, conduct its business as and where presently conducted except as
disclosed on Schedule 3.1. BancWare is not required to be qualified or
registered to do business in any jurisdiction except as disclosed on Schedule
31. BancWare does not own any securities of any corporation or any other
interest in any Person. BancWare does not have any predecessors other than as
set forth on Schedule 3.1. Schedule 3.1 states, for BancWare (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 foreign jurisdictions in
which it is qualified or registered to do business, the date it so qualified or
registered, and its registered agent and/or office in each such jurisdiction (if
applicable); (h) 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
such company's date of incorporation; and (i) 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,
A-5
<PAGE>
and all Contracts relating to the acquisition of BancWare (or its affiliates or
predecessors) have been delivered to SunGard.
3.2. Effect of Agreement. BancWare's 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 do not constitute a violation of
or default under its charter, bylaws and/or other organizational documents. For
BancWare and each of the Principal Selling Parties, its or his execution,
delivery and performance of this Agreement, and its or his consummation of the
transactions contemplated by this Agreement, (a) except as disclosed on Schedule
3.2, do not constitute a default or breach (immediately or after the giving of
notice, passage of time or both) under any Contract to which it or he is a party
or by which it or he is bound, (b) do not constitute a violation of any Law or
Judgment that is applicable to it or him, or to the business or Assets of
BancWare, or to the transactions contemplated by this Agreement, (c) except as
disclosed on Schedule 3.2, do not accelerate or otherwise modify any Obligation
of BancWare, (d) except as disclosed on Schedule 3.2, do not result in the
creation of any Encumbrance upon, or give to any third party any interest in,
any of the BancWare Business or Assets, or any of the capital stock of BancWare,
and (e) except for the approval of the shareholders of BancWare as described in
Section 5, 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 Massachusetts,
do not require the Consent of any Person. This Agreement constitutes the valid
and legally binding agreement of BancWare and each of the Principal Selling
Parties, enforceable against BancWare and each of the Principal Selling Parties
in accordance with its terms. A certified copy of the resolutions duly adopted
by the board of directors of BancWare authorizing it to execute, deliver and
perform this Agreement and the Plan, are attached to Schedule 3.2. There exists
no right of first refusal or other preemptive rights with respect to BancWare,
BancWare Stock, BancWare Business or BancWare Assets except for rights of first
refusal held by BancWare to purchase stock of certain Shareholders.
3.3. Capital Stock and Ownership. The authorized capital stock of
BancWare consists of: (a) 2,000,000 shares of Class A Common Stock, $.01 par
value per share ("Class A Common Stock"), of which 1,086,532 shares are issued
and outstanding; (b) 6,000,000 shares of Class B Common Stock, $.01 par value
per share ("Class B Common Stock"), of which 5,280,475 shares are issued and
outstanding; and (c) 1,000,000 shares of Convertible Preferred Stock, $1.00 par
value per share ("Preferred Stock"), of which 205,000 shares are issued and
outstanding (collectively, the "BancWare Stock"). Schedule 3.3A is an accurate
and complete list of (a) the names of all Shareholders of record of BancWare,
(b) the addresses of record of each Shareholder, (c) the social security numbers
or federal tax identification numbers of the Principal Selling Parties, and (d)
the numbers of, type of shares of and the certificate numbers of the stock
certificates representing shares of outstanding BancWare Stock. Each of the
Principal Selling Parties is the sole record and beneficial owner of the shares
of BancWare Stock set forth opposite his name on Schedule 3.3A and has good and
marketable title to such shares of capital stock, free and clear of any
Encumbrance. Each of the other Shareholders is the sole record owner of the
shares of BancWare Stock set forth opposite such Shareholder's name on Schedule
3.3A and, to the knowledge of BancWare and the Principal Selling Parties, has
good and marketable title to such shares of capital stock, free
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and clear of any Encumbrance. BancWare has not ever authorized, sold or issued
any securities other than the shares of BancWare Stock as described in this
Section except for warrants or options which have expired or terminated. There
are no outstanding offers to issue or sell any capital stock of BancWare except
pursuant to outstanding options described on Schedule 3.3B. Except for the
Shareholders listed on Schedule 3.3A, there are no other record owners of any
shares of BancWare Stock. Except for the shares of BancWare Stock listed on
Schedule 3.3A, there are no other issued or outstanding shares of capital stock
of BancWare. All of the issued and outstanding shares of capital stock of
BancWare 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 BancWare 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 outstanding options granted by BancWare including the names
of all of the holders of record, their addresses of record, their social
security numbers, the number of options granted, the class of capital stock for
which such option may be exercised, the date of grant, the exercise price, and
whether or not such options have vested as of the date of this Agreement. All
options granted have been duly authorized. Attached to Schedule 3.3B are
complete and accurate copies of all options plans. Except for this Agreement or
as described in any of Schedules 3.3A and 3.3B, 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 BancWare.
3.4. Financial and Corporate Records. The books and records of
BancWare are and have been properly prepared and maintained in form and
substance adequate for preparing audited financial statements in accordance with
GAAP, and such books and records fairly and accurately reflect all of the Assets
and Obligations of BancWare and all Contracts and other transactions to which
BancWare is or was a party or by which BancWare or the business or Assets of
BancWare is or was affected. Accurate and complete copies of the contents of the
minute books and stock books of BancWare have been delivered to SunGard. Such
minute books and stock books include (a) minutes of all meetings of the
shareholders, 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 shareholders, board of directors and any committees of the
board of directors without a meeting at which any material action was taken, 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 shareholders, 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 BancWare, and the names of all
officers, employees or other individuals who have access thereto or are
authorized to make withdrawals therefrom or dispositions thereof.
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3.5. Compliance with Law. Except as set forth on Schedule 3.5,
BancWare's operations, and the conduct of the BancWare Business, as and where
such business has been or presently is conducted, and the ownership, possession
and use of the Assets have complied and currently do comply with all applicable
Laws. Except as set forth on Schedule 3.5, BancWare has obtained and holds all
Permits required for the lawful operation of its business as and where such
business is presently conducted. All Permits held by BancWare are listed on
Schedule 3.5, and copies of such Permits have been delivered to SunGard and
Newco.
3.6. Financial Statements. BancWare's fiscal year ends on December 31.
Schedule 3.6A includes accurate and complete copies of the following unaudited
annual financial statements ("Annual Financial Statements") of BancWare: (a) a
balance sheet as of the end of each of the two most recent fiscal years; and (b)
statements of operations, statements of stockholders' equity, and statements of
cash flows for each of the two most recent fiscal years, and notes thereto.
Schedule 3.6B includes accurate and complete copies of all the following
unaudited financial statements ("Interim Financial Statements"): an unaudited
balance sheet of each of BancWare as of July 31, 1997 ("July 1997 Balance
Sheet") and related unaudited financial statements, included but not limited to,
unaudited statements of operations, unaudited statements of stockholders' equity
and unaudited statements of cash flows prepared by the management of BancWare on
an ongoing basis since the Annual Financial Statements. All of the Annual
Financial Statements were (x) prepared in accordance with GAAP except as
described on Schedule 3.6A; and (y) fairly present the financial condition and
results of operations of BancWare as of the dates and for the periods indicated.
All of the Interim Financial Statements were prepared in accordance with GAAP
except as described on Schedule 3.6B, and all adjustments that are necessary for
a fair presentation thereof (consisting only of normal recurring adjustments)
have been made.
3.7. Assets. Schedule 3.7 includes detailed lists of all Assets of
BancWare 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. BancWare 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 except for the Encumbrances
listed on Schedule 3.7. Except for the Assets listed on Schedule 3.7, no other
Assets are necessary to operate the BancWare Business.
3.8. Obligations of BancWare. Schedule 3.8 includes detailed lists of
all Obligations of BancWare reflected on the July 1997 Balance Sheet, itemized
by balance sheet account, and with aggregate net balances equal to the balances
on the July 1997 Balance Sheet, including (a) accounts payable, (b) accrued
expenses and reserves, itemized by category and with appropriate explanation,
(c) deferred revenues, itemized by customer and time periods, and (d) other
current and long-term liabilities. BancWare has no Obligations other than
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(i) Obligations reflected on its July 1997 Balance Sheet, (ii) Obligations set
forth in Schedule 3.8, (iii) Obligations under Contracts of the type listed or
not required to be listed on Schedule 3.14, provided that as of July 31, 1997,
no such Obligation consisted of or resulted from a default under or violation of
any such Contract, and (iv) Obligations incurred since July 31, 1997 and not in
breach of any of the representations and warranties made in Section 3.9. None of
the Obligations of BancWare are guaranteed by any Person.
3.9. Operations Since July 31, 1997. Except as set forth on Schedule
3.9, from July 31, 1997 to the date of this Agreement:
(a) Except in the ordinary course of its business consistent with its
past practices, BancWare has not (i) created or assumed any Encumbrance upon any
of its business or Assets, (ii) incurred any Obligation, (iii) made any loan or
advance to any Person; (iv) assumed, guaranteed or otherwise become liable for
any Obligation of any Person; (v) committed for any capital expenditure; (vi)
purchased, leased, sold, abandoned or otherwise acquired or disposed of any
business or Assets; (vii) waived any right or canceled any debt or claim; (viii)
assumed or entered into any Contract other than this Agreement; (ix) increased,
or authorized an increase in, the compensation or benefits paid or provided to
any of its directors, officers, employees, salesmen, agents or representatives;
or (x) done anything else outside the ordinary course of business, whether or
not specifically described in any of the foregoing clauses.
(b) Even in the ordinary course of its business consistent with its
past practices, BancWare 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) or other transaction, or done any of
the other things described in Section 3.9, involving an amount exceeding $15,000
in any single case or $75,000 in the aggregate.
(c) There has been no material adverse change or material casualty
loss affecting BancWare or its business, Assets or financial condition, and
there has been no adverse change in the financial performance of BancWare.
(d) Since December 31, 1996 (i) BancWare has not incurred any
outstanding bank debt or notes payable, (ii) BancWare has not incurred any
outstanding indebtedness to any current or former stockholder, director or
officer of BancWare (excluding compensation and benefits due to such Persons in
their capacities as employees, officers or directors of BancWare 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 BancWare or any of its stockholders, directors or officers, (iii)
BancWare has not had any Obligation for any overdrafts with respect to any of
its bank accounts or other Cash Assets, and (iv) no dividend or other
distribution of Cash Assets or other Assets has been made by BancWare to or on
behalf of any of the Shareholders (excluding compensation and benefits due to
such Persons in their capacities as employees, officers or directors of
BancWare). All deferred bonuses and compensation due from BancWare to the
Shareholders or other employees or agents of BancWare have been fully paid or
accrued on BancWare's July 1997 Balance Sheet.
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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. There are no refunds, discounts, rights of setoff or assignment
affecting any such Accounts Receivable. Except as described on Schedule 3.6A,
proper amounts of deferred revenues appear on the books and records of BancWare,
in accordance with GAAP, with respect to all of BancWare's (a) billed but
unearned Accounts Receivable; (b) previously billed and collected Accounts
Receivable still unearned; and (c) unearned customer deposits.
3.11. Tangible Property. BancWare has good and marketable title to all
of its Tangible Property, free and clear of any Encumbrances except for the
Encumbrances listed on Schedule 3.7. All of the Tangible Property of BancWare is
located at the offices or facilities of BancWare except as disclosed on Schedule
3.11, and BancWare has the full and unqualified right to require the immediate
return of any of its Tangible Property which is not located at its offices or
facilities. All Tangible Property used by BancWare or its customers is in good
condition, ordinary wear and tear excepted, and is sufficient for the operations
of BancWare as presently conducted.
3.12. Real Property. BancWare does not own any Real Property. Schedule
3.12 is a detailed list of all Real Property leased by BancWare, showing
location, rental cost and landlord. All Real Property under lease to or
otherwise used by BancWare is in good condition, ordinary wear and tear
excepted, and is sufficient for the current operations of BancWare. 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 or threat from any
lessor, governmental body or other Person has been received by BancWare or
served upon any such Real Property claiming any violation of, or breach, default
or liability under, any Contract or Law, or requiring or calling attention to
the need for any work, repairs, construction, alteration, installations or
environmental remediation. BancWare has not placed or caused to be placed, and
to the best knowledge and belief of BancWare and each of the Selling Parties
there were not and/or are not, any Hazardous Substances in, on, under or
migrating from any of the Real Property of BancWare.
3.13 Softare and Intangibles. Schedule 313 is an accurate and complete
list and description of all Software and Intangibles owned, marketed, licensed,
supported, maintained, used or under development by BancWare, 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. No other Software is required to
operate the BancWare Business. Except as explained on Schedule 3.13, BancWare
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. Except as explained on Schedule 313, 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 identified as developed and owned by BancWare
("Proprietary Software"), (a) BancWare maintains machine-readable master-
reproducible copies, source code listings, technical documentation and user
manuals for the most current releases or versions thereof and for all earlier
releases or versions thereof currently being supported by them; (b) in each
case, the machine-readable copy substantially conforms to the corresponding
source code listing;
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(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 programmers
familiar with such language, hardware and operating systems; (e) in each case,
the Software operates in accordance with the user manual therefor without
material operating defects; and (f) in each case, except as disclosed on
Schedule 3.13, each component of such Software that creates, accepts, displays,
stores, retrieves, accesses, recognizes, distinguishes, compares, sorts,
manipulates, processes, calculates or otherwise uses dates or date-related data
will do so accurately, without operating defects, using dates in the 20th and
21st centuries, and will not be adversely affected by the advent of the year
2000, the advent of the 21st century, or the transition from the 20th century
through the year 2000 and into the 21st century. None of the Proprietary
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. Except as explained on Schedule 3.13, BancWare's past or current uses of
Software licensed from third parties has not violated or infringed upon, and is
not violating or infringing upon, any Software, patent, copyright, trade secret
or other Intangible of the licensor. BancWare has used commercially reasonable
efforts to maintain all trade secrets and copyrights with respect to its
Proprietary Software in accordance with general industry practices. To the best
knowledge and belief of BancWare and each of the Principal Selling Parties, no
Person is violating or infringing upon, or has violated or infringed upon at any
time, any of the Proprietary Software or Intangibles listed on Schedule 3.13.
Except as disclosed 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, shareholder, partner, director, executive, officer, employee, salesman,
agent, customer, representative or contractor or any of the Principal Selling
Parties 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 BancWare is a party or by which
BancWare is bound (collectively, the "Specified Contracts"), grouped into the
following categories and, where applicable, subdivided by product line or
division: (a) Software license, Software maintenance, services and other
customer Contracts; (b) Contracts for the purchase or lease of Real Property or
otherwise concerning Real Property owned or used by BancWare including a
description of the Real Property; (c) loan agreements, mortgages, notes,
guarantees and other financing Contracts; (d) Contracts for the purchase, lease
and/or maintenance of computer equipment and other equipment, Contracts for the
purchase, license, lease and/or maintenance of Software under which BancWare 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 BancWare, or any
prior version thereof, or any part of the customer base, business or Assets of
BancWare, or any shares or other ownership interests in BancWare (or any of its
predecessors) was acquired; and (g) other Contracts (excluding Contracts which
constitute Insurance Policies listed on Schedule 3.20, this Agreement and all
other Contracts entered into between BancWare and SunGard, or among
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BancWare, 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. To the
knowledge of BancWare and each of the Principal Selling Parties, the provisions
of each license Contract used by BancWare for its Software products, including
provisions regarding proprietary protection and limitations on liability, are
binding on the licensee and enforceable by BancWare. With respect to each
applicable customer Contract, Schedule 3.14 includes, as of July 31, 1997, a
complete description of all work remaining to be performed under such Contracts
(together with a good faith, non-binding 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, BancWare is
not in default thereunder nor would be in default thereunder with the passage of
time, the giving of notice, or both. Except as set forth on Schedule 3.14, to
the best knowledge and belief of BancWare and each of the Principal Selling
Parties, 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, BancWare 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, together with the
Employee Benefit Plans listed on Schedule 3.16 and the Insurance Policies listed
on Schedule 3.20, are all the Contracts necessary and sufficient to operate the
BancWare Business. Except as set forth on Schedule 3.14 or in the list of
prospects delivered to SunGard pursuant to Section 3.17, there are no currently
outstanding proposals or offers submitted by BancWare to any customer, prospect,
supplier or other Person which, if accepted, would result in a legally binding
Contract of such company involving an amount or commitment exceeding $10,000 in
any single case or an aggregate amount or commitment exceeding $50,000 in the
aggregate.
3.15. Employees and Independent Contractors. Schedule 3.15A is a list
as of the date set forth in such Schedule of all of the employees of BancWare
and (a) their titles or responsibilities; (b) their social security numbers and
principal residence address as provided to BancWare by such employees ; (c)
their dates of hire; (d) their current salaries or wages and all bonuses,
commissions and incentives paid at any time during the past twelve months; (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. Schedule 3.15B is
a list of all sales representatives and independent contractors engaged by
BancWare and (a) their tax identification numbers and state or country of
residence as provided to BancWare by such persons; (b) their payment
arrangements (if not set forth in a Contract listed or described on Schedule
314); and (c) brief description of their jobs or projects currently in progress.
Except as described on Schedule 3.15A with respect to BancWare's notice of
termination policy, except as limited by any employment Contracts listed on
Schedule 3.14 and except for any limitations of general application which may be
imposed under applicable employment Laws, BancWare 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
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employee or independent contractor other than for services rendered through
termination and without incurring any penalty or liability. BancWare is in full
compliance with all Laws respecting employment practices except as described on
Schedule 3.15A. BancWare has not ever 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 BancWare. Since the incorporation date of
BancWare, it has not experienced any labor problem that was or is material to
it. BancWare's relations with its employees are currently on a good and normal
basis. Except as set forth on Schedule 3.15A, each of BancWare's current and
past employees have signed an employee agreement which contains certain
restrictive covenants substantially in the form attached to Schedule 3.15A.
Except as set forth on Schedule 3.15B, each of BancWare's current and past
contractors have signed agreements with BancWare containing appropriate
restrictions with respect to the protection of proprietary and confidential
information and the ownership of items developed by such contractor. Except as
indicated on Schedule 3.15A, since January 1, 1997, no employee of BancWare
having an annual salary of $40,000 or more has indicated an intention to
terminate or has terminated his or her employment with such company. Except as
indicated on Schedule 3.15A, neither BancWare nor any of the Principal Selling
Parties has any knowledge or belief that the transactions contemplated by this
Agreement will adversely affect relations with any employees of BancWare.
3.16. Employee Benefit Plans. Except as set forth on Schedule 3.16,
BancWare has not established, maintained or contributed to any Employee Benefit
Plans, and BancWare has not proposed any Employee Benefit Plans which it will
establish, maintain, or to which it will contribute, and it has not proposed any
changes to any Employee Benefit Plans now in effect (all of the preceding
referred to collectively hereinafter as "BancWare's Employee Benefit Plans").
True and correct copies and descriptions of all of BancWare's Employee Benefit
Plans, all employees affected or covered by BancWare's Employee Benefit Plans
and all Liabilities and Obligations thereunder are attached to Schedule 3.16. If
permitted and/or required by applicable Law, BancWare has properly submitted all
of BancWare's Employee Benefit Plans in good faith to meet the applicable
requirements of ERISA and/or the Internal Revenue Code of 1986, as amended, (the
"Code") to the Internal Revenue Service (the"IRS") for its approval within the
time prescribed therefor under applicable federal regulations except as
described on Schedule 3.16. Favorable letters of determination of such tax-
qualified status from the IRS are attached to Schedule 3.16. With respect to
BancWare's Employee Benefit Plans, BancWare will have made, on or prior to the
Closing Date, all payments required to be made by it on or prior to the Closing
Date and will have accrued (in accordance with GAAP consistently applied) as of
the Closing Date all payments due but not yet payable as of the Closing Date, so
there will not have been, nor will there be, any Accumulated Funding
Deficiencies (as defined in ERISA or the Code) or waivers of such deficiencies.
BancWare has furnished SunGard with a true and correct copy of the most current
Form 5500 and any other form or filing required to be submitted to any
governmental agency with regard to any of BancWare's Employee Benefit Plans and
the most current actuarial report with regard to any of BancWare's Employee
Benefit Plans. All of BancWare's Employee Benefit Plans are, and have been,
operated in full compliance with their provisions and with all applicable Laws
including, without limitation, ERISA and the Code and the regulations and
rulings thereunder. BancWare and all fiduciaries of BancWare's Employee Benefit
Plans have complied with the
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provisions of BancWare's Employee Benefit Plans and with all applicable Laws
including, without limitation, ERISA and the Code and the regulations and
rulings thereunder. There have been no Reportable Events (as defined in ERISA),
no events described in Sections 4062, 4063 or 4064 of ERISA, and no termination
or partial termination (including any termination or partial termination
attributable to this sale) of any of BancWare's Employee Benefit Plans. There
would be no Obligation of BancWare under Title IV of ERISA if any of BancWare's
Employee Benefit Plans were terminated as of the Closing Date. BancWare has not
incurred, or will not incur, any withdrawal liability, nor does BancWare have
any contingent withdrawal liability, under ERISA to any Multiemployer Plan (as
defined in ERISA or the Code). BancWare has not incurred, or will not incur, any
Obligation to the Pension Benefit Guaranty Corporation (or any successor
thereto). Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due from BancWare under any of
BancWare's Employee Benefit Plans, (ii) increase any benefits otherwise payable
under any of BancWare's Benefit Plans, or (iii) result in the acceleration of
the time of payment or vesting of any such benefits to any extent. There are no
pending actions, claims or lawsuits which have been asserted or instituted
against any of BancWare's Employee Benefit Plans, the assets of any of the
trusts under such plans, the plan sponsor, the plan administrator or against any
fiduciary of BancWare's Employee Benefit Plans (other than routine benefit
claims) nor does BancWare or any of the Selling Parties have any knowledge or
belief of facts which could form the basis for any such action, claim or
lawsuit. There are no investigations or audits of any of BancWare's Employee
Benefit Plans, any trusts under such plans, the plan sponsor, the plan
administrator or any fiduciary of any of BancWare's Employee Benefit Plans which
have been threatened or instituted nor does BancWare or any of the Selling
Parties have knowledge or belief of facts which could form the basis for any
such investigation or audit. Except as disclosed in Schedule 316, no event has
occurred or will occur which will result in BancWare having an Obligation in
connection with any Employee Benefit Plan established, maintained, or
contributed to (currently or previously) by it or by any other entity which,
together with BancWare, constitute elements of either (i) a controlled group of
corporations (within the meaning of Section 4.14(b) of the Code), (ii) a group
of trades or businesses under common control (within the meaning of Sections
4.14(c) of the Code or 4001 of ERISA), (iii) an affiliated service group (within
the meaning of Section 4.14(m) of the Code), or (iv) another arrangement covered
by Section 4.14(o) of the Code.
3.17. Customers, Prospects and Suppliers. All customers of BancWare
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 suppliers of BancWare
as of the date set forth in Schedule 3.17. A complete list of the prospects of
BancWare as of the date set forth in such list has been delivered to SunGard.
Except as set forth on Schedule 3.17, since January 1, 1992, none of the
customers or suppliers of BancWare has given notice or otherwise indicated to
BancWare that it will or intends to terminate or not renew its Contract with
BancWare before the scheduled expiration date or otherwise terminate its
relationship with BancWare. The relationship of BancWare with its respective
customers are currently on a good and normal basis and BancWare has not
experienced any problems with customers or suppliers since January 1, 1992. None
of BancWare or Principal Selling Parties has any knowledge or belief
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that the transactions contemplated by this Agreement will adversely affect
relations with any of the customers or suppliers of any of BancWare. BancWare
does not conduct customer surveys.
3.18. Taxes. Schedule 3.18 is an accurate and complete list of all
federal, state, local, foreign and other Tax returns and reports (including, but
not limited to, information returns) (collectively "Returns") filed by BancWare
with respect to its last five (5) fiscal years. Accurate and complete copies of
all federal, state, local and foreign income, sales and use tax Returns filed by
BancWare 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 to SunGard. Except as explained on Schedule 3.18, (a)
BancWare has properly and timely filed all Tax Returns required to be filed by
it, all of which were accurately prepared and completed; (b) BancWare has
properly withheld from payments to its employees, agents, representatives,
contractors and suppliers all amounts required by Law to be withheld for Taxes;
(c) BancWare has paid all Taxes required to be paid by it; (d) no audit of
BancWare by any governmental taxing authority has ever been conducted, is
currently pending or, to the best knowledge and belief of BancWare and each of
the Principal Selling Parties, threatened; (e) no notice of any proposed Tax
audit, or of any Tax deficiency or adjustment, has been received by BancWare,
and, to the knowledge of BancWare and each of the Principal Selling Parties,
there is no reasonable basis for any Tax deficiency or adjustment to be assessed
against BancWare; 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
BancWare.
3.19. Proceedings and Judgments. Except as described on Schedule 3.19,
(a) no Proceeding is currently pending or threatened in writing, nor has any
Proceeding occurred at any time since January 1, 1992, to which BancWare is or
was a party, or by which BancWare or any Assets or business of BancWare is or
was affected; (b) no Judgment is currently outstanding, nor has any Judgment
been outstanding at any time since January 1, 1992, against BancWare, or by
which BancWare or any Assets or business of BancWare 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 BancWare at any
time since January 1, 1992, and, to the knowledge of BancWare and each of the
Principal Selling Parties, 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 (excluding Insurance Policies that
constitute BancWare's Employee Benefit Plans described on Schedule 3.16) owned
or maintained by any of BancWare and/or any of its predecessors at any time
since January 1, 1992. Except as indicated on Schedule 3.20, all such Insurance
Policies are or were on an "occurrence" rather than a "claims made" basis.
Except as indicated on Schedule 3.20, BancWare 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
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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 3.20. 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 Principal Selling Parties,
nor any current or former partners, owners, shareholders, directors, executives,
officers, representatives, agents or employees of BancWare (when acting in such
capacity or otherwise on behalf of BancWare 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 violation was not, is not and will not be material to
BancWare; (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, 1992, any false or fictitious entries on the books and
records of BancWare; (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 BancWare; 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 BancWare.
3.22 Related Party Transactions. Except as described on Schedule 3.22
and except for any employment Contracts listed on Schedule 314, there are no
real estate leases, personal property leases, loans, guarantees, Contracts,
transactions, understandings or other arrangements of any nature between
BancWare and any current or former partner, owner, shareholder, director,
officer or controlling Person of BancWare (or any of their respective
predecessors) or any other Person affiliated with BancWare (or any of their
respective predecessors).
3.23. Brokerage Fees. Except as set forth on Schedule 3.23, no Person
acting on behalf of BancWare or any of the Principal Selling Parties 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. Except as described on Schedule 3.24,
since January 1, 1997, neither BancWare nor any of the Principal Selling Parties
has, 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 BancWare, any sale of shares of capital stock, or other
securities of BancWare, or any merger, consolidation or similar transaction
involving BancWare.
3.25. Tax Free Reorganization Representations. There is no present
plan or intention by the Shareholders to sell, exchange, or otherwise dispose of
a number of shares of SunGard Stock received in the Merger that would reduce the
Shareholders' ownership of SunGard Stock to a number of shares having a value,
as of the Effective Date of the Merger,
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of less than 50% of the value of all of the formerly outstanding stock of
BancWare as of the same date. For purposes of this representation, shares of
BancWare Stock and shares of SunGard Stock held by any of the Shareholders and
otherwise sold, redeemed, or disposed of prior or subsequent to the Merger shall
be included. In the Merger, shares of BancWare Stock representing control of
BancWare, as defined in Section 3.68(c) of the Code, will be exchanged solely
for voting stock of SunGard. As of the Effective Date of the Merger, BancWare
does not have outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any Person could acquire stock in such
company that, if exercised or converted, would affect SunGard's acquisition or
retention of control of BancWare, as defined in Section 3.68(c) of the Code.
BancWare is not an investment company within the meaning of Section
3.68(a)(2)(F)(iii) and (iv) of the Code.
3.26 Full Disclosure. No representation or warranty made by either
BancWare or the Principal Selling Parties in this Agreement or pursuant hereto
(a) contains any untrue statement of any material fact; or (b) omits to state
any material fact that is necessary to make the statements made, in the context
in which made, not false or misleading. The copies of documents attached as
Schedules to this Agreement or otherwise delivered to SunGard and Newco in
connection with the transactions contemplated by this Agreement, are accurate
and complete in all material respects, 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 material respect. There is
no fact known to either BancWare or any of the Principal Selling Parties, that
has not been disclosed to SunGard and Newco in the Schedules to this Agreement
or otherwise in writing, that was or is, or so far as either BancWare or any of
the Principal Selling Parties can reasonably foresee will have a material
adverse effect on BancWare, the BancWare Business, the Assets or financial
condition of BancWare or the ability of BancWare or any of the Principal Selling
Parties to perform their obligations under this Agreement.
SECTION 4: REPRESENTATIONS OF SUNGARD AND NEWCO
Knowing that BancWare and the Principal Selling Parties rely thereon,
SunGard and Newco, jointly and severally represent and warrant to BancWare and
the Principal Selling Parties as of the date of this Agreement, and covenant
with BancWare and the Principal Selling Parties, as follows:
4.1. Organization. SunGard and Newco each is a corporation that is
duly organized, validly existing and in good standing under the Laws of the
States of Delaware and Massachusetts, respectively. SunGard and Newco each
possesses the full corporate power and authority to own its Assets, conduct its
business as and where such business is presently conducted, and enter into this
Agreement and the Plan. Newco is a wholly owned subsidiary of SunGard.
4.2. 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
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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 or Judgment 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 4.2, do not require the Consent of any Person.
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.
4.3 SunGard's Stock. The authorized capital stock of SunGard is
120,000,000 shares of common stock, $0.01 par value per share ("SunGard Stock"),
of which approximately 43,341,903 shares were issued and outstanding as of
September 11, 1997, 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 consideration for the Merger in accordance with the terms of the Plan
("Merger Consideration") when issued, shall be validly authorized and validly
issued.
4.4. SEC Filings. SunGard has provided to the Principal Selling
Parties accurate 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, 1996; (b) SunGard's 1996 Annual Report to Stockholders;
(c) SunGard's March 31, 1997 Proxy Statement; and (d) SunGard's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1997.
4.5. Investment Matters. SunGard is acquiring the BancWare 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.
SECTION 5: SECURITIES FILINGS AND APPROVAL OF THE BANCWARE
SHAREHOLDERS
5.1. 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 (the "1933 Act") the shares of SunGard
Stock to be issued and delivered to the Shareholders in accordance with this
Agreement and the Plan. BancWare and each of the Principal Selling Parties shall
promptly provide to SunGard all information concerning the business, financial
condition and affairs of BancWare and/or such Principal Selling Party 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, and shall otherwise cooperate and
cause their representatives to cooperate with SunGard in the preparation 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 BancWare's proxy statement
contained in such Registration Statement (the "Proxy Statement/Prospectus") to
the Shareholders. After the execution of this Agreement and until the Closing
Date, BancWare and each Principal Selling Party shall
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promptly advise SunGard of any facts that should be set forth in an amendment or
supplement to the Proxy Statement/Prospectus or the Registration Statement, and
each party shall take all actions that may be necessary to keep the Proxy
Statement/Prospectus and the Registration Statement current and effective until
the Closing Date. Except with the prior written consent of SunGard or except as
provided in Section 1.52, neither BancWare nor any Principal Selling Party shall
publish any communication, other than the Proxy 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 Proxy
Statement/Prospectus for the purpose of resale by affiliates of BancWare.
5.2 BancWare Shareholder Approval. As promptly as practicable after
the Registration Statement becomes effective, and in accordance with applicable
law, BancWare will duly hold a meeting of the Shareholders (the "Shareholders
Meeting") for the purpose of voting on the Merger. Unless the board of directors
of BancWare in its good faith judgment determines that it is otherwise required
by law, BancWare shall recommend the Merger to the Shareholders for approval.
Except with the prior written consent of SunGard, neither BancWare nor any
Principal Selling Party shall distribute any materials to the Shareholders in
connection with the Shareholders Meeting other than the Proxy
Statement/Prospectus. After the Shareholders shall have approved the Merger,
such approval shall not be revocable. BancWare shall solicit proxies from the
Shareholders for use at the Shareholders Meeting.
5.3 BancWare's and Principal Selling Parties' Representations as to
the Registration Statement. BancWare and the Principal Selling Parties, jointly
and severally, represent and warrant 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 including the
Closing Date, the Registration Statement and all amendments or supplements
thereto, with respect to information furnished by BancWare, any Principal
Selling Party or its or their representatives regarding BancWare, (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 any material fact, or omit to state any fact
required to be stated therein or necessary to make the statements made therein,
in the context in which made, not misleading in any material respect. Each
Principal Selling Party severally represents and warrants to SunGard and Newco
and covenants with SunGard and Newco 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 information furnished by such Principal
Selling Party regarding such Principal Selling Party, (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 any material fact, or omit to state any fact required to be stated
therein or necessary to make the statements made therein, in the context in
which made, not misleading in any material respect. BancWare and the Principal
Selling Parties, jointly and severally, represent and warrant to SunGard and
Newco and covenant with SunGard and Newco that the information furnished by
BancWare, any Principal Selling Party or its or their representatives regarding
BancWare for use in the filings described in or contemplated by this Agreement
will not contain any untrue statement of any material fact, or omit to state any
fact required to be stated
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therein or necessary to make the statements made therein, in the context in
which made, not misleading in any material respect. Each Principal Selling Party
severally represents and warrants to SunGard and Newco and covenants with
SunGard and Newco that the information furnished by such Principal Selling Party
regarding such Principal Selling Party for use in the filings described in or
contemplated by this Agreement will not contain any untrue statement of any
material fact, or omit to state any fact required to be stated therein or
necessary to make the statements made therein, in the context in which made, not
misleading in any material respect. BancWare and the Principal Selling Parties,
jointly and severally, shall 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, in accordance with the procedures set forth in Section 14.2,
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 joint and several warranties, representations
and covenants of BancWare and the Principal Selling Parties in this Section 5.3.
Each Principal Selling Party severally shall 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, in accordance with the procedures set
forth in Section 14.2, 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 several warranties,
representations and covenants of such Principal Selling Party in this Section
5.3.
5.4. SunGard's and Newco's Representations as to the Registration
Statement. SunGard and Newco, jointly and severally, warrant and represent to
BancWare and the Principal Selling Parties and covenant with BancWare and the
Principal Selling Parties 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, Newco 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.
SunGard and Newco, jointly and severally, warrant and represent to BancWare and
the Principal Selling Parties that all information furnished by SunGard, Newco
or their respective 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 BancWare, the Principal Selling Parties and the directors, officers and
representatives of BancWare, in accordance with the procedures set forth in
Section 14.2, 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 5.4.
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5.5 State Securities Filings. SunGard shall make all filings under
applicable state securities laws that are required in connection with the
Transactions. BancWare and each Principal Selling Party shall cooperate with
SunGard and furnish all information that may be required or reasonably requested
by SunGard in connection with such filings.
SECTION 6: CERTAIN OBLIGATIONS OF BANCWARE AND PRINCIPAL SELLING PARTIES
PENDING CLOSING
6.1. Conduct of BancWare's Business. Between the date of this
Agreement and the Closing Date, except with the prior written consent of
SunGard:
(a) BancWare shall, and the Principal Selling Parties shall cause
BancWare 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 BancWare. Each Principal Selling Party involved in
BancWare's daily business operations shall remain actively involved in
BancWare's daily business operations, consistent with his past practices.
BancWare and the Principal Selling Parties shall consult with SunGard as to the
management of BancWare's business and affairs.
(b) Except in the ordinary course of its business consistent with
its past practices, BancWare shall not, and the Principal Selling Parties shall
not permit BancWare to, (i) create or assume any Encumbrances upon any of its
business or Assets, (ii) incur any Obligation, (iii) make any loan or advance,
(iv) assume, guarantee or otherwise become liable for any Obligation of any
Person, (v) commit for any capital expenditure, (vi) purchase, lease, sell,
abandon or otherwise dispose of any Assets, (vii) waive any right or cancel any
debt or claim, (viii) assume or enter into 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, BancWare shall not, and the Principal Selling Parties shall
not permit BancWare to, borrow or lend any funds, purchase any goods or
services, lease any equipment, incur any 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 $15,000 or, in the aggregate,
an amount exceeding $75,000, except for Software licensed or purchased from
third parties in an amount not exceeding $50,000 in the aggregate and except for
expenses incurred in sponsoring the BancWare User Conference or in attending the
BAI Conference provided that such expenses are consistent with historical
expenses for such conferences.
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(d) BancWare shall not, and the Principal Selling Parties shall
not permit BancWare 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 part of its business.
(e) BancWare shall, and the Principal Selling Parties shall cause
BancWare to, (i) maintain its Real Property and Tangible Property in good
condition and repair, (ii) maintain its Insurance Policies and Permits 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 Contracts,
Permits and 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) BancWare shall, and the Principal Selling Parties shall cause
BancWare to, maintain its corporate existence and good standing in its
jurisdiction of incorporation and its good standing in each jurisdiction where
it is currently qualified as a foreign corporation. BancWare shall not, and the
Principal Selling Parties shall not permit BancWare to, amend its charter or
bylaws.
(g) BancWare shall not, and the Principal Selling Parties shall
not permit BancWare 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 BancWare Stock, or any other capital stock or other securities of
BancWare, or create, grant or issue any stock options, stock appreciation
rights, phantom shares or other similar rights, provided, however, that the
foregoing shall not prohibit (i) the conversion of any shares of Preferred Stock
into Class A Common Stock in accordance with the terms of the Preferred Stock or
(ii) the exercise of outstanding stock options in accordance with their terms.
Neither BancWare nor the Principal Selling Parties shall permit any sales of the
shares of BancWare Stock.
(h) BancWare shall not nor shall any Principal Selling Party sell,
assign, give, pledge or otherwise transfer, dispose of or encumber any shares of
the BancWare Stock, or any other capital stock or other securities of BancWare
owned or held by it or him, provided, however, that the foregoing shall not
prohibit (i) the conversion of any shares of Preferred Stock into Class A Common
Stock in accordance with the terms of the Preferred Stock or (ii) the exercise
of outstanding stock options in accordance with their terms.
(i) BancWare and each Principal Selling Party shall maintain all
shares of the BancWare Stock owned or held by it or him free and clear of all
Encumbrances.
(j) Neither BancWare nor any Principal Selling Party 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.
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(k) Neither BancWare nor any Principal Selling Party shall enter
into any Contract 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 61
or any other provisions of this Agreement or the Plan.
6.2. Interim Financial Statements. For each calendar month that
ends between July 31, 1997 and the Closing Date, BancWare shall, and the
Principal Selling Parties shall cause BancWare to, promptly prepare and deliver
to SunGard monthly financial statements, which shall be prepared in accordance
with GAAP and shall reflect all adjustments (consisting only of normal recurring
adjustments) that are necessary for a fair presentation of the financial
condition of BancWare as of the end of such month and of the results of
operations of BancWare for such month.
6.3. SunGard's Due Diligence Investigation. Between the date of
this Agreement and the Closing Date, BancWare and the Principal Selling Parties
shall (a) permit SunGard and its authorized representatives to have reasonable
access to BancWare's facilities and offices during normal business hours, to
observe BancWare's operations, to meet with BancWare's officers and employees,
to contact BancWare's customers, prospects and suppliers, and to audit, examine
and copy BancWare's files, books and records and other documents and papers, and
(b) provide to SunGard and its authorized representatives all information
concerning BancWare, its Business, Assets and financial condition, the BancWare
Stockholders and the BancWare Stock that SunGard reasonably requests.
6.4. Consents. Between the date of this Agreement and the Closing
Date, BancWare and the Principal Selling Parties 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 BancWare is a party or by which BancWare is
bound, and to give the notices and make the filings described on Schedule 32.
6.5. Acquisition Proposals. Between the date of this Agreement and
the Closing Date, neither BancWare, nor any Principal Selling Party, nor any
officer, employee, representative or agent of BancWare 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, employees, representatives and agents) concerning any bulk
sale of any of BancWare's Assets, any sale of shares of capital stock or other
securities of BancWare, or any merger, consolidation or similar transaction
involving BancWare. BancWare and each Principal Selling Party shall immediately
advise SunGard of, and communicate to SunGard the terms of, any such inquiry or
proposal received by BancWare or any Principal Selling Party.
6.6. Advice of Changes. Between the date of this Agreement and the
Closing Date, BancWare and each Principal Selling Party 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
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Agreement (it being understood that such advice shall not be deemed to modify
the representations, warranties and covenants of BancWare and/or any Principal
Selling Party contained in this Agreement).
6.7. S-4 Financial Statements. BancWare shall prepare annual and
quarterly financial statements of the type and for the periods required for use
in the Registration Statement on Form S-4 under the 1933 Act and the 1934 Act
(collectively, the "S-4 Financial Statements") which financial statements shall
be prepared in accordance with GAAP and applicable SEC requirements. The S-4
Financial Statements shall be substantially identical to the Annual Financial
Statements and Interim Financial Statements attached to Schedule 3.6A and
Schedule 3.6B, respectively, except that the S-4 Financial Statements shall not
have the exceptions to GAAP noted in Schedule 3.6A and 3.6B, respectively. The
annual financial statements contained in such S-4 Financial Statements shall be
audited by Joseph B. Cohan & Associates (Carlin, Charron & Rosen LLP as of
January 1, 1997) whose reports shall be without qualification or explanatory
paragraphs. BancWare and each of the Principal Selling Parties represent and
warrant and covenant that (a) all of the audited annual financial statements
contained in the S-4 Financial Statements will (i) be prepared in accordance
with GAAP; and (ii) fairly present the financial condition and results of
operations of BancWare as of the dates and for the periods indicated; and (b)
the unaudited interim financial statements contained in the S-4 Financial
Statements will be prepared in accordance with GAAP, and all adjustments that
are necessary for a fair presentation thereof (consisting only of normal
recurring adjustments) will be made.
6.8. Best Efforts. BancWare and each Principal Selling Party shall
use their best efforts to consummate the Merger and the other Transactions as of
the earliest practicable date. Neither BancWare nor any Principal Selling Party
shall take, or cause to be taken, or to the best of their ability permit to be
taken, any action that would impair the prospect of completing the Merger and
the other Transactions.
SECTION 7: CERTAIN OBLIGATIONS OF SUNGARD AND NEWCO PENDING CLOSING
7.1. 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 their respective jurisdiction of incorporation and shall
not amend its charter or bylaws in any manner that would be inconsistent with
its obligations under this Agreement or the Plan.
(b) Neither SunGard nor Newco shall enter into any Contract 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 71 or any other
provisions of this Agreement or the Plan.
7.2. BancWare Due Diligence Investigation. Between the date of this
Agreement and the Closing Date, upon BancWare's request, SunGard shall (a)
permit BancWare, the Principal Selling Parties and their authorized
representatives to visit SunGard's
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facilities during normal business hours, to meet with SunGard's key officers,
and (b) provide to BancWare, the Principal Selling Parties and their authorized
representatives all publicly available information concerning SunGard and its
subsidiaries and their businesses, assets and financial condition, that BancWare
and the Principal Selling Parties reasonably request.
7.3. Material Consents. Between the date of this Agreement and the
Closing Date, SunGard and Newco shall in good faith cooperate with BancWare and
the Principal Selling Parties in their efforts to obtain the consents and
approvals, and to give the notices and make the filings, described in Section
42.
7.4. 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 BancWare and the
Principal Selling Parties, promptly after they become available, all
registration statements, proxy statements, reports and other filings, and all
amendments thereto, that SunGard files with the SEC.
7.5. Advice of Changes. Between the date of this Agreement and the
Closing Date, SunGard shall promptly advise BancWare and the Principal Selling
Parties, 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).
7.6. Best Efforts. SunGard and Newco shall use their best efforts
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.
SECTION 8: CONDITIONS PRECEDENT TO BANCWARE'S AND PRINCIPAL SELLING
PARTIES' CLOSING OBLIGATIONS
Each obligation of BancWare and the Principal Selling Parties to be
performed on the Closing Date shall be subject to the satisfaction of each of
the conditions stated in this Section 8, except to the extent that such
satisfaction is waived by BancWare in writing.
8.1. 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.
8.2. Approval of the BancWare Shareholders. The Merger shall have
been duly approved by the affirmative vote of BancWare Shareholders entitled to
vote at least two-thirds of the outstanding shares of each class of BancWare
Stock.
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8.3. Due Diligence. BancWare's due diligence investigation of
SunGard's business as described in Section 72 of this Agreement shall have been
completed to BancWare's good faith satisfaction.
8.4. 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.
8.5. 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.
8.6. Absence of Proceedings. No Proceeding shall have been
instituted (excluding any Proceeding instituted by or on behalf BancWare or any
Principal Selling Party or any affiliate under any of their control), no
Judgment 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.
8.7. Tax Certificate SunGard and Newco shall have delivered a
certificate to Lucash, Gesmer & Updegrove, LLP, counsel for BancWare, in form
and substance reasonably acceptable to such Firm, as to certain matters of fact
with respect to such Firm's rendering an opinion to the shareholders of BancWare
that the Merger qualifies as a tax-free reorganization under the Internal
Revenue Code of 1986, as amended (provided, however, that this clause shall not
be interpreted to imply that such Firm is in anyway obligated to render such an
opinion or that the receipt of such an opinion is a condition to Closing
hereunder).
SECTION 9: 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 9, except to the extent that such satisfaction is waived by SunGard
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.
9.2. Qualification for Pooling Treatment. SunGard shall have
received letters from Coopers & Lybrand L.L.P., dated as of a date prior to the
date that the Registration Statement is filed with the SEC and as of 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. The
receipt of such letter shall also be a condition precedent to SunGard's and
Newco's obligation to file the Registration Statement.
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9.3. Related Management Representation Letter. Coopers & Lybrand
L.L.P. shall have received letters from BancWare (and SunGard shall have
received a copy), in form and substance satisfactory to Coopers & Lybrand
L.L.P., dated as of a date prior to the date that the Registration Statement is
filed with the SEC and as of the Closing Date.
9.4. Affiliate Letters. SunGard shall have received, from each
affiliate of BancWare (including, without limitation, the Principal Selling
Parties), 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 BancWare 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 BancWare or
of SunGard until SunGard shall have published financial results covering at
least 30 days of post-Merger combined operations of SunGard and BancWare
("Publication Date") and, thereafter, except in compliance with applicable
federal and state securities laws.
9.5. Approval of the BancWare Shareholders. The Merger shall have
been duly approved by the affirmative vote of BancWare Shareholders entitled to
vote at least two-thirds of the outstanding shares of each class of BancWare
Stock.
9.6. Dissenting BancWare Shareholders. The aggregate number of
shares of BancWare Stock owned by those BancWare Shareholders (if any) who shall
have exercised (or given notice of their intent to exercise) the rights of
dissenting stockholders under the Massachusetts Business Corporation Law or any
other applicable corporate law shall be less than ten percent (10%) of the total
number of outstanding shares of BancWare Stock.
9.7. Due Diligence. SunGard's due diligence investigation of
BancWare's Business of this Agreement shall have been completed to SunGard's
good faith satisfaction.
9.8. BancWare's and the Principal Selling Parties' Representations.
All representations, warranties and certifications made by BancWare and/or any
Principal Selling Party in this Agreement or pursuant hereto shall not have been
false or misleading in any material respect.
9.9. BancWare's and the Principal Selling Parties' Performance. All
of the terms and conditions of this Agreement to be satisfied or performed by
BancWare and/or any Principal Selling Party on or before the Closing Date shall
have been substantially satisfied or performed.
9.10. Absence of Proceedings. No Proceeding shall have been
instituted (excluding any such Proceeding initiated by or on behalf of SunGard
or any of its subsidiaries or any of its affiliates under its control), no
Judgment 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.
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9.11. Adverse Changes. There shall not have been any material
adverse change or material casualty loss affecting BancWare, 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 BancWare between the date of this Agreement and the
Closing Date.
9.12. Escrow Agreement. The Escrow Agreement (as defined in Section
10.2(g) shall have been signed by the holders of at least 95% of the outstanding
BancWare Stock.
9.13. Consents. BancWare shall have obtained 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
BancWare is a party or by which BancWare is bound, and shall have given the
notices and made the filings described on Schedule 32.
9.14. Settlement of Credential Proceedings. The Credential Services
International, Inc. Proceeding as more particularly described on Schedule 319
shall have been settled or a final judgment or order (without further right of
appeal) shall have been rendered, in either event, on terms acceptable to
SunGard. BancWare shall have also obtained a general release from John Rees with
respect to any Obligation to John Rees from BancWare arising from such
Proceeding. The satisfaction of this Section 9.14 shall also be a condition
precedent to SunGard's and Newco's obligation to file the Registration Statement
with the SEC.
SECTION 10: CLOSING
10.1 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 BancWare's
headquarters or such other location 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 States of Massachusetts and Delaware, and the
parties shall take such further actions as may be required by the States of
Massachusetts and Delaware, 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 States of Massachusetts and Delaware (the "Effective
Date").
10.2 BancWare's Obligations at Closing. At the Closing, BancWare
and the Principal Selling Parties shall deliver, or cause to be delivered, the
following to SunGard:
(a) Stock certificates, or affidavits of loss in form reasonably
acceptable to SunGard and duly executed, representing all of the issued and
outstanding shares of BancWare Stock held by the Principal Selling Parties,
together with assignments separate from certificate in blank, dated the
Effective Date and duly executed by the Principal Selling Parties.
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(b) Stamps or other proper evidence of the payment of any stock
transfer or similar Taxes due as a result of the transfer of BancWare Stock by
any Shareholder pursuant to the Transactions.
(c) 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 BancWare described on Schedule 34 and all keys and combinations to all
safe deposit boxes, lock boxes and safes of BancWare and other depositories
described on Schedule 34.
(d) A certificate, dated the Closing Date, in form and substance
satisfactory to SunGard, signed by the President and Treasurer of BancWare and
by each Principal Selling Party, certifying, jointly and severally, that (i) all
representations and warranties made by BancWare and/or any Principal Selling
Party 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 or except as disclosed in such certificate (which
disclosures shall not be deemed to modify any representations or warranties of
BancWare or the Principal Selling Parties or modify or waive any of SunGard's
rights and remedies hereunder or any of the conditions precedent to SunGard's
and Newco's closing obligations, including, without limitation, Section 9.8),
(ii) all of the terms and conditions of this Agreement to be satisfied or
performed by BancWare and/or any Principal Selling Party on or before the
Closing Date have been substantially satisfied or performed, and (iii) there has
not been any material adverse change or material casualty loss affecting
BancWare, 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 BancWare's financial performance between the date of this Agreement
and the Closing Date.
(e) Articles or Certificates of Merger for the States of
Massachusetts and Delaware, in form and substance, acceptable to the parties
(collectively, "Certificates of Merger"), dated the Closing Date and duly
executed by BancWare.
(f) The original signed copies of all Consents listed on Schedule
32.
(g) An Escrow Agreement, substantially in the form attached hereto
as Exhibit 10.2(g) ("Escrow Agreement"), dated the Closing Date, and duly
executed by BancWare and each Principal Selling Party.
(h) All of the original minute books and stock books of BancWare
and duly executed resignations, dated the Effective Date, of all directors and
officers of BancWare other than as specified by SunGard.
(i) Good standing certificates for BancWare, dated no earlier than
ten (10) days before the Closing Date, from the State of Massachusetts and from
each other jurisdiction in which it is qualified or registered to do business as
a foreign corporation.
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(j) A certificate of the Clerk of BancWare as to the incumbency
and signatures of the officers of BancWare executing this Agreement.
(k) Copies of the resolutions duly adopted by the board of
directors and Shareholders of BancWare, authorizing BancWare to execute, deliver
and perform this Agreement and the Plan and to consummate the Transactions,
certified by an officer of BancWare as in full force and effect, without
modification or rescission, on and as of the Closing Date.
(l) A duly signed letter, from each affiliate of BancWare
(including, without limitation, the Principal Selling Parties), in form and
substance satisfactory to SunGard, stating that such affiliate (a) has not sold
any shares of capital stock or other securities of BancWare or of SunGard at any
time during the 30-day period ending on the Closing Date, and (b) will not sell,
assign, give, pledge (except in connection with fully recourse bank loans) 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 BancWare or
of SunGard until SunGard shall have published financial results covering at
least 30 days of post-Merger combined operations of SunGard and BancWare and,
thereafter, except in compliance with applicable federal and state securities
laws.
(m) An opinion of counsel from Lucash, Gesmer & Updegrove, LLP,
addressed to SunGard and dated the Closing Date, in form and substance
acceptable to SunGard.
(n) Share Conversion Tables after calculating the Number of Fully
Diluted Common Shares and the Merger Exchange Ratios (as defined in the Plan)
executed by BancWare and the Principal Selling Parties.
(o) A General Release of BancWare, in form acceptable to SunGard,
dated the Closing Date and duly executed by each of the Principal Selling
Parties and the directors and officers of BancWare.
(p) Copies of SunGard's Employee and Independent Contractor
Agreements in the form of Exhibit 10.2(p) signed by all employees and
independent contractors, respectively, that will be employed by the Surviving
Corporation after Closing.
(q) 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.
10.3. SunGard's and Newco's Obligations at Closing. At the Closing,
SunGard and Newco shall deliver the following to the Principal Selling Parties:
(a) Certificates of Merger duly executed by Newco.
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(b) Share Conversion Tables after calculating the Number of Fully
Diluted BancWare Shares and the Merger Exchange Ratios executed by BancWare and
the Principal Selling Parties.
(c) The Escrow Agreement duly executed by SunGard.
(d) A certificate, dated the Closing Date, in form and substance
satisfactory to the Principal Selling Parties, signed by a Vice President and
the Chief Financial Officer or Chief Accounting 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 and (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.
(e) Good standing certificates for SunGard and Newco, dated no
earlier than ten (10) days before the Closing Date, from the State of Delaware.
(f) 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, 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) A certificate of Secretary of each of SunGard and Newco as to
the incumbency and signatures of the officers of SunGard and Newco executing
this Agreement.
(h) An opinion of counsel from Blank Rome Comisky & McCauley
addressed to the Principal Selling Parties and dated the Closing Date in form
and substance acceptable to the Principal Selling Parties.
(i) All other agreements, certificates, instruments, opinions of
counsel and documents reasonably requested by the Principal Selling Parties in
order to fully consummate the Transactions and carry out the purposes and intent
of this Agreement.
SECTION 11: CERTAIN OBLIGATIONS OF PRINCIPAL SELLING PARTIES AFTER CLOSING
11.1. Receipts. The Principal Selling Parties shall deliver to
SunGard receipts acknowledging receipt of certificates representing the shares
of SunGard Stock.
11.2. Restrictions on Dispositions of SunGard Stock. From and after
the Closing Date, none of the Principal Selling Parties shall sell, assign,
give, pledge (except in connection with fully recourse bank loans) or otherwise
transfer, dispose of or reduce his or its risk relating to any of his or its
shares of capital stock or other securities of BancWare or of SunGard until
SunGard shall have published financial results covering at least 30 days of
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post-Merger combined operations of SunGard and BancWare, and, thereafter, except
in compliance with applicable federal and state securities laws.
11.3. Cooperation with SunGard and the Surviving Corporation. From
and after the Closing Date, (a) each of the Principal Selling Parties shall
fully cooperate to transfer to SunGard and the Surviving Corporation the full
control and enjoyment of the BancWare Business and Assets of BancWare, (b) none
of the Principal Selling Parties 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 the BancWare Business; (c) each
Principal Selling Party shall fully cooperate with SunGard and the Surviving
Corporation in connection with the preparation and audit of any financial
statements of BancWare 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 Principal Selling Parties shall
promptly deliver to SunGard and the Surviving Corporation all correspondence,
papers, documents and other items and materials received by any of the Principal
Selling Parties or found to be in the possession of any of the Principal Selling
Parties which pertain to BancWare's Business or the Assets. 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 of the Principal Selling Parties
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 the employee
benefit plans of BancWare, the adoption by the Surviving Corporation of
SunGard's employee benefit plans, and the filing of tax returns of BancWare for
all periods ending on, before or including the Closing Date.
SECTION 12: CERTAIN OBLIGATIONS OF SUNGARD AND THE SURVIVING CORPORATION
AFTER CLOSING
12.1. Final Tax Returns. The Surviving Corporation shall timely
prepare and file all (a) federal and state income tax returns required to be
filed by BancWare for the period from December 31, 1996 through the Closing Date
and (b) all other tax returns required to be filed by it for any period ending
after the Closing Date, and each of the Principal Selling Parties shall fully
cooperate with the Surviving Corporation with respect thereto.
12.2. Employment Matters. All employees of BancWare 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.
12.3. Disposition of Employee Benefit Plans. As soon as is
practicable after the Effective Date, SunGard and the executives of BancWare
shall review the Employee Benefit Plans of BancWare 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
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Plans, with a view toward replacing all of the plans of BancWare with SunGard's
Employee Benefit Plans except where cost factors or unusual circumstances
dictate otherwise.
12.4. Incentive Stock Option Plan. After the closing, BancWare's
1988 Incentive Stock Option Plan (the "1988 ISO Plan") for key employees shall
remain in effect only as long as any options granted before Closing remain
outstanding thereunder, provided that no further options shall be granted under
the 1988 ISO Plan. As soon as is practicable after Closing, the 1988 ISO Plan
and the options granted to Messrs. Rizzo and Rees shall be amended, as
applicable, to (a) change the definition of "Board" or "Board of Directors" to
mean SunGard's Board of Directors, (b) change the definition of "Committee",
"Compensation Committee" or "Stock Option Committee" to mean the Compensation
Committee of SunGard's Board of Directors, (c) change all references to "Class B
Common Stock" to mean SunGard Stock, and (d) make other similar or conforming
changes. After the closing, SunGard shall use its reasonable efforts to register
on Form S-8 under the 1933 Act the shares of SunGard Stock issuable under the
1988 ISO Plan and the options granted to Messrs. Rizzo and Rees, to the extent
eligible, within 120 days after the Effective Date (but in no event earlier than
the Publication Date).
12.5. Financial Results. SunGard shall publish its financial results
covering at least 30 days of post-Merger combined operations of SunGard and
BancWare (which 30 days may be included in reports covering larger periods) in
accordance with its normal business practices.
12.6. Rule 144. For a period of two years after the Effective Date,
SunGard shall use its reasonable efforts to file in a timely manner any reports
required to be filed by it under the 1933 Act and the 1934 Act to satisfy the
current information requirements of Rule 144 promulgated under the 1933 Act.
SECTION 13: RESTRICTIVE COVENANTS OF THE PRINCIPAL SELLING PARTIES.
13.1. Certain Acknowledgments. Each Principal Selling Party
expressly acknowledges that:
(a) The trading systems software and asset and liability systems
software businesses (collectively, "SunGard's Trading Systems Business")
conducted by BancWare and the other subsidiaries of SunGard now or in the future
(SunGard and all such existing and future subsidiaries of SunGard, including the
BancWare and the Surviving Corporation, are referred to as the "SunGard Group")
involve the provision of data processing and related services using proprietary
Software, and the licensing, maintaining, enhancing and development of
proprietary Software, which proprietary Software systems are used for portfolio
management, securities and derivative instrument trading, investment performance
analysis, and other investment support and financial applications, and all
related Software and services which SunGard may in the future develop internally
or obtain through acquisition.
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(b) SunGard's Trading Systems Business is highly competitive, is
marketed throughout the United States, throughout Europe and in many other
locations worldwide, and requires long sales "lead times" often exceeding one
year.
(c) The SunGard Group expends 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.
(d) In connection with the Transactions and during his or her
tenure as a shareholder and/or employee of the BancWare and future employment,
if applicable, with the SunGard Group, he or she has had and will continue to
have access to, receive, learn, develop and/or conceive proprietary and
confidential knowledge and information of the SunGard Group; such knowledge and
information must be kept in strict confidence to protect SunGard's Trading
Systems 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.
(e) The covenants of this Section 13 (the "Covenants") are a
material part of the agreement among the parties hereto and are an integral part
of the obligations of the Principal Selling Parties 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.
13.2. Nondisclosure Covenants. At all times after the Closing Date,
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 Principal Selling Parties 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 (i) the identity of
customers and prospects, their specific requirements, and the names, addresses
and telephone numbers of individual contacts at customers and prospects, (ii)
prices, renewal dates and other detailed terms of customer and supplier
contracts and proposals, (iii) pricing policies, marketing and sales strategies,
methods of delivering Software and services, and Software and service
development projects and strategies, (iv) source code, object code, user
manuals, technical manuals and other documentation for Software products, (v)
screen designs, report designs and other designs, concepts and visual
expressions for Software products, (vi) employment and payroll records, (vii)
forecasts, budgets and other nonpublic financial information, (viii) expansion
plans, management policies, methods of operation, and other business strategies
and policies, and (ix) any information concerning the Assets or the conduct and
details of the BancWare Business.
(b) Disclose, use or refer to any proprietary Software or other
confidential or proprietary knowledge or information of the SunGard Group, no
matter when or how
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acquired, for any purpose not in furtherance of the businesses 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.
13.3. Noncompetition Covenants. During the period beginning on the
Closing Date and ending on the third anniversary of the Closing Date or, if
later, two years after termination of employment with the SunGard Group, except
with SunGard's prior written consent, none of the Principal Selling Parties
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 SunGard
Group, or in an effort to obtain any such Person as a customer, employee,
supplier, salesman, agent or representative of, or a consultant to, any other
Person that conducts a business competitive with or similar to all or any part
of SunGard's Trading Systems Business.
(b) Market or sell, in any manner other than in furtherance of the
business and interests of the SunGard Group, any Software that is similar to
(visually or functionally) or competitive with any proprietary Software of the
SunGard Group.
(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 a business
competitive with or similar to all or any part of SunGard's Trading Systems
Business.
13.4. Certain Exclusions. For purposes of this Section 13,
confidential and proprietary knowledge and information of the SunGard Group
shall not include any knowledge and information that is now known by or readily
available to the general public, or that becomes known by or readily available
to the general public other than as a result of any breach of this Section 13.
The ownership by any of the Principal Selling Parties of not more than five
percent of the outstanding securities of any public company shall not, by
itself, constitute a breach of the Covenants of Section 133, even if such public
company competes with the SunGard Group. The provisions of Section 13.3(b) and
(c) shall not prohibit Drane's ownership of the stock or securities of any
Person or his being a member of the board of directors of any such Person
provided that (a) Drane is not involved in the active management or operation of
such Person and (b) the services or products offered by any such Person which
competes with SunGard's Trading Systems Business are and remain ancillary to and
in support of the principal products or services provided by such Person and are
not offered as a stand-alone or principal service or product.
13.5. Enforcement of Covenants. Each of the Principal Selling
Parties expressly acknowledges that it would be extremely difficult to measure
the damages that might result
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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, SunGard shall be
entitled, in addition to all other rights and remedies that SunGard may have at
law or in equity, to have an injunction issued by any competent court enjoining
and restraining any or all Principal Selling Parties and all other Persons
involved therein from continuing such breach. The existence of any claim or
cause of action that any or all Principal Selling Parties or any such other
Person may have against any member of the SunGard Group shall not constitute a
defense or bar to the enforce ment of any of the Covenants. If SunGard 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.
13.6. Scope of Covenants. If any Covenant, or any part thereof, or
the appli cation 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 14: INDEMNIFICATION
14.4. Principal Selling Parties' General Indemnification. From and
after the Closing Date, the Principal Selling Parties, jointly and severally,
shall indemnify and hold harmless the members of the SunGard Group, 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 of the
following:
(a) Any misrepresentation, breach or failure of any warranty or
representation made by BancWare or the Principal Selling Parties in or pursuant
to this Agreement.
(b) Any failure or refusal by BancWare or the Principal Selling
Parties to satisfy or perform any covenant, term or condition of this Agreement
required to be satisfied or performed by any or all of them.
(c) The matters listed in Schedule 14.1(c).
(d) Any Proceeding against the SunGard Group by any Person (other
than the Principal Selling Parties) arising out of or caused by, directly or
indirectly, any act or omission of BancWare, or any of its shareholders,
directors, officers, employees, agents or
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representatives, occurring at any time prior to the Effective Date excluding any
Proceeding based on any action or omission to the extent that all the facts and
circumstances constituting the basis of such Proceeding have been disclosed in
BancWare's Schedules hereto (but not excluding the matters listed in Schedule
14.1(c)).
(e) Any deficiency or adjustment for Taxes and related interest,
penalties and expenses, assessed against or imposed upon BancWare (or any of its
successors) with respect to any period ending on or before the Closing Date. The
right of the SunGard Group to indemnification under this Section 14.1.(e) 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, BancWare shall be included in the consolidated
federal income tax returns filed by SunGard.
(f) Any Proceeding against the SunGard Group by any Person
claiming that the amount of Merger Consideration issued to such Person was not
correctly calculated.
14.2. Indemnification Procedures. With respect to each event,
occurrence or matter (an "Indemnification Matter") as to which any member of the
SunGard Group or any of the Principal Selling Parties (in either case, referred
to collectively as the "Indemnitee") is entitled to indemnification from any of
the Principal Selling Parties or SunGard, as the case may be (in either case,
referred to collectively as the "Indemnitor"), under Section 5.3, Section 5.4,
Section 141 or Section 14.7, as the case may be:
(a) 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 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) If a third party action, suit, claim or demand is involved,
then, upon receipt of the Indemnification Notice, the Indemnitee 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 (i) SunGard shall assume and continue the
defense of any Indemnification Matter under Section 14.7), (ii) the Indemnitor
may, at its option and expense and through counsel of its choice, participate in
(but not control) the Defense; (iii) neither the Indemnitor nor the Indemnitee
shall consent to any judgment or order, or agree to any settlement, without the
other's prior written consent (which shall not be unreasonably delayed or
withheld); and (iv) except for Indemnification Matters under Section 14.7, the
Indemnitor shall reimburse the Indemnitee's fees, costs and expenses incurred in
the Defense in the event that a final judgment or order (without further right
of appeal) in favor of the third party is entered or a settlement is agreed upon
by the Indemnitor, Indemnitee and the third party. The Indemnitee shall
prosecute the Defense in good faith. 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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(b) All amounts owed by the Indemnitor to the Indemnitee (if any)
shall be paid in full within three business days after a final judgment or order
(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.
14.3. Limits on Indemnification. Indemnitor's liability under this
Section 14 shall be limited as follows:
(a) No amount shall be payable by the Indemnitor under this
Section 14 unless and until the aggregate amount otherwise payable by the
Indemnitor under this Section 14 exceeds One Hundred Thousand Dollars
($100,000), in which event the Indemnitor shall pay the amount in excess of
$100,000 and all future amounts payable by the Indemnitor under this Section 14.
(b) The total liability of any Principal Selling Party under this
Section 14 shall not exceed the Merger Consideration issued to such Principal
Selling Party (including any shares of SunGard Stock issued to Shareholders who
are affiliates (as defined in the 1933 Act) of such Principal Selling Party and
any shares of SunGard Stock issued to such Principal Selling Party or his
affiliates held pursuant to the Escrow Agreement) multiplied by the last
reported sales price of SunGard Stock as reported on the New York Stock Exchange
on the Closing Date.
(c) Time Periods.
(i) With respect to Indemnification Matters expected to be
encountered in the routine audit process of a wholly-owned subsidiary of
SunGard, except as set forth in Section 144, 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 14.2.(a) by
the conclusion of SunGard's audit for the year ended December 31, 1997.
(ii) With respect to all other Indemnification Matters, except
as set forth in Section 144, 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 14.2.(a) within twelve (12)
months after the Effective Date.
14.4. Exceptions. The limitations of Section 14.3(a) and Section
14.3(c) shall not apply in the case of any Indemnification Matter involving (i)
intentional misrepresentation, fraud or criminal matters; (ii) title to or
infringement caused by any Software product, or component thereof, which, at any
time before Closing was marketed, licensed, maintained, supported, owned or
claimed to have been owned by BancWare; (iii) title to the shares of BancWare
Stock or the shares of BancWare; (iv) covenants or other obligations to be
performed after Closing (excluding indemnification obligations arising under
this Section 14, it being understood that the limitations of Section 14.3(a) and
Section 14.3(c) shall apply to such indemnification obligations except as
provided in the other clauses of this Section 14.4); or (v) the matters listed
in Schedule 14.1(c) (except that the limitation of Section 14.3(a) shall
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apply to those matters so indicated on Schedule 14.1(c)). The limitations of
Section 14.3(c) shall not apply in the case of any Indemnification Matter
involving Taxes. The limitations of Section 14.3(b) shall not apply in the case
of any Indemnification Matter involving intentional misrepresentation, fraud or
criminal matters with respect to any Indemnitor who was involved in such
intentional misrepresentation, fraud or criminal matters or who had knowledge of
such intentional misrepresentation, fraud or criminal matters (which knowledge
shall include knowledge of the intentionally misrepresentative, fraudulent or
criminal nature of such matter) as of the date of this Agreement or as of the
Closing Date.
14.5. Recovery. The SunGard Group shall be entitled to recover from
any or all of the Principal Selling Parties and/or the other Shareholders, any
applicable amounts for indemnification payments hereunder as follows:
(a) With respect to any claim, SunGard shall be paid from Escrow
Fund (as defined in the Escrow Agreement) to the extent available and sufficient
by having the Escrow Agent distribute from the Escrow Fund 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 New York Stock
Exchange on the Closing Date and such distribution shall be made proportionately
from each account held in escrow.
(b) With respect to any claim, if the Escrow Fund is not available
or sufficient, then SunGard may collect, jointly and severally, from all
Principal Selling Parties.
14.6. Sole Remedy for Monetary Damages. The Indemnitee's right to
indemnification under this Section 14 constitutes the Indemnitee's sole remedy
for monetary damages arising out of the subject matter of this Agreement,
whether brought in contract, tort or otherwise (but excluding actions in equity
or for injunctive relief). The foregoing shall not be construed as a waiver of
or limitation upon any rights or remedies of the Indemnitee: (i) in the event of
fraud, intentional misrepresentation or criminal matters or (ii) of any other
rights or remedies other than with respect to monetary damages.
14.7. Brokerage Fees. From and after the Closing Date, BancWare
shall indemnify and hold harmless the Principal Selling Parties, and their
respective successors and assigns, from and against any claim by The Corum Group
Ltd. for brokerage or finder's fees in connection with the transactions
contemplated by this Agreement to the extent arising from the letter agreement
dated December 29, 1995 between Corum and BancWare, a copy of which is attached
to Schedule 3.23.
SECTION 15: OTHER PROVISIONS
15.1. Termination. At any time before the Closing, whether or not
the Merger has been approved by BancWare's Stockholders, this Agreement may be
terminated and the Merger abandoned in accordance with any of the following
methods:
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(a) By the mutual written consents of SunGard and BancWare,
authorized by their respective boards of directors.
(b) By written notice from SunGard to BancWare, or from BancWare
to SunGard, if it becomes certain (for all practical purposes) that any of the
conditions to the closing obligations of the party giving such notice cannot be
satisfied on or before November 21, 1997, 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 BancWare, or from BancWare
to SunGard, if the Closing does not occur on or before November 21, 1997 for any
reason other than a breach of this Agreement by the party giving such notice.
15.2. Publicity. Without the prior written consent of SunGard,
neither BancWare nor any Principal Selling Party shall make any public
announcement regarding the Transactions, nor shall they in any manner
disseminate any information regarding BancWare, SunGard, the Merger or the other
Transactions. Unless required by Law or stock exchange 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
Principal Selling Parties. With respect to any announcement that any of the
parties is required by Law or stock exchange 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 152 shall survive any termination
of this Agreement for a period of five years.
15.3. Fees and Expenses.
(a) SunGard shall pay all of the fees and expenses incurred by it
and/or Newco, BancWare shall pay all of the fees and expenses incurred by it,
and the Principal Selling Parties 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 BancWare and SunGard. All
legal fees and accounting fees incurred by BancWare shall be reasonable and
based upon actual time spent on the Transactions and on standard hourly rates
and shall be paid within one week after Closing and receipt of an itemized bill
therefor.
(b) In order to induce SunGard to enter into this Agreement and
the Plan, BancWare shall make the following payments to SunGard (and the
Principal Selling Parties hereby guarantee such payments) if the Merger is not
consummated due to the failure of the condition set forth in Section 9.5 to be
satisfied, provided that the failure of BancWare Shareholders to approve the
Merger is not due to a failure of one of the conditions in Section 8 other than
Section 8.2:
(i) A cash payment of One Million Dollars ($1,000,000),
payable on December 1, 1997 provided that no payment shall be due pursuant to
this clause (i) if (x)
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the Merger was approved by the holders of two-thirds of the outstanding Class B
Common Stock, (y) the Principal Selling Parties cast votes for all BancWare
Stock owned by them or their affiliates in favor of the Merger and (iii) the
Principal Selling Parties did not solicit any other Shareholder, or cause any
other Shareholder to be solicited ,to vote against or to abstain from voting on
the Merger.
(ii) If a Later Sale (as defined below) occurs within one year
after the date of this Agreement, a cash payment equal to twenty-five percent
(25%) of the following amount: the aggregate consideration received by BancWare
and/or the Shareholders in such Later Sale; minus Nine Million Dollars
($9,000,000) (or, if less than all of the assets or shares of BancWare are
involved in the Later Sale, the corresponding portion of $9,000,000); minus any
amount received by SunGard pursuant to the preceding clause (i). The 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). 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 BancWare or assets of BancWare having a market value
equal to Fifty Percent (50%) or more of the aggregate market value of all of the
assets of BancWare or (y) BancWare merges or consolidates, or commits to merge
or consolidate, with a Person other than SunGard.
15.4. 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 when delivered personally or one
business day after being sent by a nationally recognized overnight delivery
service, postage or delivery charges prepaid. Notices may also be given by
prepaid facsimile and shall be effective on the date transmitted if confirmed
within 48 hours thereafter by a signed original sent in the manner provided in
the preceding sentence. Notices to the Shareholders shall be sent to their most
recent addresses of record with SunGard or its transfer agent. Notices to
BancWare (prior to Closing) and the Principal Selling Parties shall be sent to
their respective address stated on page one of this Agreement, with a copy sent
simultaneously to Lucash, Gesmer & Updegrove, LLP, 40 Broad Street, Boston, MA
02109-4310, Attention: William Contente, Esquire. Notices to SunGard, Newco
and/or BancWare (after Closing) shall be sent to SunGard's address stated on
page one of this Agreement to the attention of its General Counsel, with copies
sent simultaneously to the same address to the attention of its Chief Financial
Officer and to Blank Rome Comisky & McCauley, One Logan Square, Philadelphia, PA
19103, Attention: Fred Blume, Esquire. 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 154, provided
that any such change of address notice shall not be effective unless and until
received.
15.5. Survival of Representations and Covenants. All representations
and warranties and covenants 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, subject only to any applicable time
limitations set forth in Section 14.3(c) (as modified by Section 14.4).
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15.6. 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.
15.7. Reliance by SunGard and Newco. Notwithstanding the right of
SunGard and Newco to investigate the business, Assets and financial condition of
BancWare, 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 Principal Selling Parties in this
Agreement or pursuant hereto.
15.8. Entire Understanding. This Agreement, together with the
Exhibits and Schedules hereto, and the Plan and the Escrow Agreement, state the
entire understanding among the parties with respect to the subject matter
hereof, and supersede 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. BancWare 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 shareholders of BancWare is obtained (as contemplated by this Agreement)
and without seeking further shareholder approval, so long as such amendment,
supplement or waiver does not result in a decrease in the Merger Exchange Ratios
(as defined in the Plan) or have a material adverse effect on the shareholders
of BancWare.
15.9. Parties in Interest. This Agreement shall bind, benefit, and
be enforceable by and against BancWare, SunGard and Newco and their respective
successors and assigns, and the Principal Selling Parties 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. Nothing in this Agreement or the Plan is
intended to confer, or shall be deemed to confer, any rights or remedies upon
any Persons other than the parties hereto and the respective directors and
stockholders of BancWare, SunGard and Newco.
15.10. 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.
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15.11 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.
15.12. 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.
15.13. 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.
15.14. References. All words used in this Agreement shall be
construed to be of such number and gender as the context requires or permits.
15.15. Controlling Law. Except and only to the extent that the
corporate law aspects of the Merger are governed by the corporate laws of
Massachusetts, 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 PERFORMED SOLELY THEREIN, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.
15.16. 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 irrevocable 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 154, and the prevailing parties shall be entitled to recover their
reasonable attorneys' fees and court costs from the other parties.
15.17. 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.
15.18. 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 BancWare.
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15.19. 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.
15.20. Bankruptcy Qualification. Each representation or warranty made
in or pursuant to this Agreement regarding the enforceability of any contract
shall be qualified to the extent that such enforceability may be effected by
bankruptcy, insolvency and other similar laws or equitable principles (but not
those concerning fraudulent conveyance) generally affecting creditors' rights
and remedies.
15.21. Right of Representative to Act for Principal Selling Parties.
Each of the Principal Selling Parties expressly grants to the Principal Selling
Party designated pursuant to this Section (the "Representative") the full power
and authority to represent such Principal Selling Party and to take any and all
actions with respect to this Agreement on behalf of such Principal Selling Party
including, but not limited to, (a) administering any Indemnification Matter on
behalf of the Principal Selling Parties, agreeing to the settlement of any
Indemnification Matter and otherwise handling and negotiating Indemnification
Matters; and (b) agreeing to any waiver, consent or amendment under or to this
Agreement, provided that no such waiver, consent or amendment shall affect the
amount or allocation of payments of Merger Consideration to any Principal
Selling Party who does not expressly consent thereto in writing. Each of the
Principal Selling Parties acknowledges that this Section 15.21 is intended to
have the broadest possible scope for the purpose of promoting the efficient
negotiation and handling of all matters which arise under or in connection with
this Agreement. The Representative shall be William E. Popp , provided, however,
that upon written notice to SunGard and the other Principal Selling Parties,
Douglas Drane may designate himself as the Representative; provided, further,
however, that any such notice from Douglas Drane shall not affect any actions
taken by William E. Popp as Representative prior to the receipt of such notice
by SunGard and the other Principal Selling Parties.
[Balance of page intentionally left blank.]
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WITNESS THE DUE EXECUTION AND DELIVERY HEREOF AS OF THE DATE FIRST STATED
ABOVE.
BANCWARE, INC.
BY: /S/ WILLIAM E. POPP
-----------------------------
PRINT NAME: WILLIAM E. POPP
PRINT TITLE: PRESIDENT
/S/ WILLIAM E. POPP
- --------------------------------
WILLIAM E. POPP
/S/ DOUGLAS DRANE
- --------------------------------
DOUGLAS DRANE
/S/ M. I. MANDALINCI
- --------------------------------
M. I. MANDALINCI
SUNGARD DATA SYSTEMS INC.
BY: /S/ RICHARD C. TARBOX
------------------------------
PRINT NAME: RICHARD C. TARBOX
PRINT TITLE: VICE PRESIDENT
CORPORATE DEVELOPMENT
BWI ACQUISITION INC.
BY: /S/ RICHARD C. TARBOX
------------------------------
PRINT NAME: RICHARD C. TARBOX
TITLE: VICE PRESIDENT
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SCHEDULES AND EXHIBITS TO
AGREEMENT AND PLAN OF REORGANIZATION
SCHEDULE DESCRIPTION
-------- -----------
3.1 Organization of BancWare
3.2 Required Consents
3.3 Capital Stock and Ownership
3.3B Options
3.4 Financial and Corporate Records
3.5 Permits
3.6A Annual Financial Statements
3.6B Interim Financial Statements
3.7 Assets
3.8 Obligations
3.9 Operations Since July 31, 1997
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 Customers, Prospects and Suppliers
3.18 Taxes
3.19 Proceedings and Judgments
3.20 Insurance
3.22 Related Party Transactions
3.23 Brokerage Fees
3.24 Stock Sales
4.2 Required Consents
14.1(c) Certain Indemnification Matters
EXHIBIT DESCRIPTION
------- -----------
Exhibit A Agreement and Plan of Merger (included as
Appendix A to the Proxy Statement-Prospectus)
Exhibit 10.2(g) Form of Escrow Agreement (included as Appendix C
to the Proxy Statement-Prospectus)
Exhibit 10.2(p) SunGard's Employee and Independent Contractor Agreements
- --------------------------------------------------------------------------------
THE REGISTRANT AGREES TO FURNISH SUPPLEMENTALLY A COPY OF ANY OMITTED SCHEDULE
TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST.
A-46
<PAGE>
Amendment No. 1 to
AGREEMENT AND PLAN OF REORGANIZATION
Parties: BancWare, Inc.
a Massachusetts corporation ("BancWare")
88 Broad Street
Boston, Massachusetts 02110
William E. Popp ("Popp")
28 Sunnyrock Drive
Walpole, Massachusetts 02081
Douglas Drane ("Drane")
13 Robroy
Austin, Texas 78746
M.I. Mandalinci ("Mandalinci")
30 Hideaway Lane
Methuen, Massachusetts 01844
SunGard Data Systems Inc.
a Delaware corporation ("SunGard")
1285 Drummers Lane, Wayne, Pennsylvania 19087
BWI Acquisition Inc.
a Delaware corporation ("Newco")
1285 Drummers Lane, Wayne, Pennsylvania 19087
Date: November 11, 1997
Background: Newco is a wholly-owned subsidiary of SunGard. BancWare, SunGard,
Newco and Popp, Mandalinci and Drane (collectively "Principal Selling Parties")
have entered into an Agreement and Plan of Reorganization (the "Reorganization
Agreement"), and BancWare, SunGard and Newco have entered into a related
Agreement and Plan of Merger (the "Merger Agreement"), each dated September 22,
1997, that contemplate the consolidation and merger of Newco with and into
BancWare (the "Merger") in accordance with the provisions of the Reorganization
Agreement and the Merger Agreement.
Section 15.1 of the Reorganization Agreement provides for the termination
of the Reorganization Agreement in the event that Closing, or certain conditions
to Closing, do not occur on or before November 21, 1997. The parties desire to
enter into this Amendment No. 1 (the "Amendment") to amend the Reorganization
Agreement to extend such date to December 19, 1997.
A-47
<PAGE>
Intending to be legally bound, in consideration of the mutual agreements
contained herein, the parties hereto agree as follows:
Section 1: Amendment
Section 15.1 of the Reorganization Agreement is amended and restated to
read in its entirety as set forth below:
"15.1 Termination. At any time before the Closing, whether or not the
Merger has been approved by BancWare's 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 BancWare,
authorized by their respective boards of directors.
(b) By written notice from SunGard to BancWare, or from BancWare to
SunGard, if it becomes certain (for all practical purposes) that any of the
conditions to the closing obligations of the party giving such notice cannot be
satisfied on or before December 19, 1997, 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 BancWare, or from BancWare to
SunGard, if the Closing does not occur on or before December 19, 1997 for any
reason other than a breach of this Agreement by the party giving such notice."
Section 2: Miscellaneous
Except as set forth in Section 1 of this Amendment, the Reorganization
Agreement and Merger Agreement shall remain in full force and effect in
accordance with their respective terms. Capitalized terms used in this Amendment
and not defined herein shall have the meaning set forth in the Reorganization
Agreement. This Amendment is made under, and shall be construed in accordance,
with the laws of the Commonwealth of Pennsylvania applicable to agreements made
and to be performed solely therein, without giving affect to principles of
conflicts of law. This Amendment shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns. This
Amendment may be signed in counterparts all of which when taken together shall
constitute an original agreement.
[balance of page intentionally left blank; signatures begin on next page]
A-48
<PAGE>
Witness the due execution and delivery hereof as of the date first stated
above.
BancWare, Inc.
By: /s/ William E. Popp
--------------------------------
Print Name: William E. Popp
Print Title: President
/s/ William E. Popp
--------------------------------
William E. Popp
/s/ Douglas Drane
--------------------------------
Douglas Drane
/s/ M. I. Mandalinci
--------------------------------
M. I. Mandalinci
SunGard Data Systems Inc.
By: /s/ Richard C. Tarbox
--------------------------------
Print Name: Richard C. Tarbox
Print Title: Vice President
Corporate Development
BWI Acquisition Inc.
By: /s/ Richard C. Tarbox
--------------------------------
Print Name: Richard C. Tarbox
Print Title: Vice President
A-49
<PAGE>
Appendix B
AGREEMENT AND PLAN OF MERGER
Parties: BancWare, Inc.
a Massachusetts corporation ("BancWare")
88 Broad Street
Boston, Massachusetts 02110
SunGard Data Systems Inc.
a Delaware corporation ("SunGard")
1285 Drummers Lane
Wayne, Pennsylvania 19087
BWI Acquisition Inc.
a Delaware corporation ("Newco")
1285 Drummers Lane
Wayne, Pennsylvania 19087
Date: September 22, 1997
Background: Newco is a wholly-owned subsidiary of SunGard. BancWare, SunGard,
Newco and certain shareholders of BancWare 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 BancWare (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 BancWare in accordance with the provisions
of this Plan and in compliance with the Massachusetts Business Corporation Law
and any other applicable corporate laws (the "Corporation Laws"), and the Merger
shall have the effect provided for in the Corporation Laws. BancWare (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
Commonwealth of Massachusetts. The corporate existence and identity of
BancWare, with its purposes and powers as set forth below, shall continue
unaffected and unimpaired by the Merger, and BancWare shall become a wholly
owned subsidiary of SunGard after the Effective Date. On the Effective Date,
BancWare 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.
B-1
<PAGE>
2. Name and Purpose. The name of the Surviving Corporation shall be
BancWare, Inc. The purpose of the Surviving Corporation shall be to conduct a
general business of designing, developing and marketing packaged computer
software products and computer components and systems; to make investments in
real estate and other assets, of all types; and to carry on any other business
permitted by the laws of the Commonwealth of Massachusetts for a corporation
organized under Chapter 156B of the General Laws, as the same may be amended
from time to time hereafter, or any successor statute.
3. Charter and Authorized Shares. Immediately after the Merger, the
Articles of Organization of the Surviving Corporation shall be those of BancWare
immediately before the Merger except as amended as set forth in Appendix 1
attached hereto. The Surviving Corporation shall be authorized to issue 1,000
shares of common stock, $1.00 par value per share.
4. Bylaws. Immediately after the Merger, the Bylaws of the Surviving
Corporation shall be those of BancWare 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:
Cristobal I. Conde
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:
Cristobal I. Conde...... Chairman, Chief Executive Officer
William E. Popp......... President
M.I. Mandalinci......... Chief Operating Officer
Thomas J. McDugall...... Chief Financial Officer and Treasurer
Lawrence A. Gross....... Assistant Vice President, Clerk
Michael J. Ruane........ Assistant Vice President, Assistant Clerk
Andrew P. Bronstein..... Assistant Vice President, Assistant Clerk
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 common stock,$1.00 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 BancWare Capital Stock. On the Effective Date, each
share of BancWare's Class A Common Stock, $.01 par value per share ("Class A
Common Stock"), Class B Common Stock, $.01 par value per share ("Class B Common
Stock") and Convertible
B-2
<PAGE>
Preferred Stock, $1.00 par value per share ("Preferred Stock") (collectively,
"BancWare Stock") issued and outstanding immediately before the Effective Date,
except for any such shares owned by shareholders of BancWare who have duly
asserted dissenters' rights in accordance with applicable Corporation Laws,
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be automatically converted into and become that number of shares of
common stock of SunGard, $0.01 par value per share ("SunGard Stock") as shall be
equal to the results of the following formulae (such results are hereinafter
collectively referred to as the "Merger Exchange Ratios"):
(a) Each share of Preferred Stock shall be automatically converted into and
become that number of shares of SunGard Stock as shall be equal to the result of
the following formula with the result rounded off to nine decimal places (such
result is hereinafter referred to as the "Preferred Stock Merger Exchange
Ratio"):
$1.125
-----------------------------
Market Value of SunGard Stock
(b) Each share of Class A Common Stock shall be automatically converted into
and become that number of shares of SunGard Stock as shall be equal to the
result of the following formula with the result rounded off to nine decimal
places (such result is hereinafter referred to as the "Class A Common Stock
Merger Exchange Ratio"):
$0.125 + Class B Common Stock Merger Exchange Ratio
- -----------------------------
Market Value of SunGard Stock
(c) Each share of Class B Common Stock shall be automatically converted into
and become that number of shares of SunGard Stock as shall be equal to the
result of the following formula with the result rounded off to nine decimal
places (such result is hereinafter referred to as the "Class B Common Stock
Merger Exchange Ratio"):
180,000 - [[P x $1.125] +[A x $0.125] x 1
--------------------------- --------------------------------
Market Value of SunGard Stock Number of Fully Diluted Common
Shares
As used in this Plan:
(a) The "Market Value of SunGard Stock" shall equal the last reported sale
price of one share of SunGard Stock as reported on The New York Stock Exchange
on the Closing Date (as defined in and provided for in Section 10.1 of the
Reorganization Agreement).
(b) The "Number of Fully Diluted Common Shares" shall equal the sum of (i)
the number of shares of BancWare Class A Common Stock and Class B Common Stock
issued and outstanding on the Effective Date and (ii) that number of additional
shares of BancWare Class A Common Stock and Class B Common Stock that would be
issued and outstanding on the
B-3
<PAGE>
Effective Date assuming the exercise or conversion of all options, warrants or
rights (whether exercisable or convertible then or in the future) to purchase or
acquire BancWare Class A Common Stock or Class B Common Stock which options,
warrants or rights are outstanding on the Effective Date, excluding, however,
(I) any shares of Class A Common Stock which are issuable upon the conversion of
shares of Preferred Stock which have not been converted as of the Effective Date
and (II) any shares of BancWare Class A Common Stock or Class B Common Stock
that are held by BancWare (as treasury shares).
(c) "P" shall equal the sum of (i) the number of shares of BancWare
Preferred Stock issued and outstanding on the Effective Date and (ii) that
number of additional shares of BancWare Preferred Stock that would be issued
and outstanding on the Effective Date assuming the exercise or conversion of all
options, warrants or rights (whether exercisable or convertible then or in the
future) to purchase or acquire BancWare Preferred Stock which options, warrants
or rights are outstanding on the Effective Date, excluding, however, any shares
of BancWare Preferred Stock that are held by BancWare (as treasury shares).
(d) "A" shall equal the sum of (i) the number of shares of BancWare Class A
Common Stock issued and outstanding on the Effective Date and (ii) that number
of additional shares of BancWare Class A Common Stock that would be issued and
outstanding on the Effective Date assuming the exercise or conversion of all
options, warrants or rights (whether exercisable or convertible then or in the
future) to purchase or acquire BancWare Class A Common Stock which options,
warrants or rights are outstanding on the Effective Date, excluding, however,
(I) any shares of BancWare Class A Common Stock which are issuable upon the
conversion of shares of Preferred Stock which have not been converted as of the
Effective Date and (II) any shares of BancWare Class A Common Stock that are
held by BancWare (as treasury shares).
9. Possible Adjustment due to Recapitalization. If, between the date of
the 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 Merger Exchange Ratio, the Market Value of SunGard
Stock, the number "180,000" and any other applicable numerical values set forth
in Section 8 (which shall not include any dollar amounts set forth in Section 8)
shall be appropriately adjusted. The Merger Exchange Ratio and such other
amounts shall not be adjusted as a result of any other changes in the number of
issued and outstanding shares of SunGard Stock, including without limitation,
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.
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 shareholder of
BancWare in accordance with this Plan shall be rounded off to the nearest whole
number of shares of SunGard Stock.
11. Stock Options. BancWare's 1988 Incentive Stock Option Plan (the "1988
ISO Plan") and all options to acquire shares of BancWare Stock granted pursuant
to the 1988 ISO Plan and those options granted to Messrs. Rizzo and Rees to
acquire shares of BancWare Stock which were not granted pursuant to the 1988
ISO Plan that are issued and outstanding
B-4
<PAGE>
immediately before the Effective Date (collectively, the "Options"), shall be
assumed by SunGard on the Effective Date and shall continue in effect, as an
option plan of SunGard and as options issued by SunGard, respectively, in
accordance with the terms and conditions by which they are governed immediately
before the Effective Date, subject to the adjustments set forth in the next
sentence. On the Effective Date, each Option shall, by virtue of the Merger and
without any action on the part of the holder thereof, be automatically adjusted
to provide that (a) the number and type of shares issuable upon exercise of such
Option shall be that number of shares of SunGard Stock (rounded off to the
nearest whole number of shares) equal to the number of shares of BancWare Stock
issuable upon exercise of such Option immediately before the Effective Date,
multiplied by the Class B Common Stock Merger Exchange Ratio, and (b) the
exercise price per share of SunGard Stock under such Option shall be that amount
(rounded up to the nearest whole cent) equal to the exercise price per share of
BancWare Stock under such Option immediately before the Effective Date, divided
by the Class B Common Stock Merger Exchange Ratio.
12. BancWare Stock held by BancWare. On the Effective Date, any shares of
BancWare Stock that are held by BancWare (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.
13. 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 BancWare Stock, instructions for use in effecting the
surrender of such certificate to the Exchange Agent together with a letter of
transmittal. Upon the surrender of such certificate to the Exchange Agent in
accordance with such instructions and proper completion of the letter of
transmittal, 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 BancWare Stock represented by such certificate have been
converted in accordance with this Plan ("Closing Stock"), which shall be
promptly delivered to the holder thereof (or in accordance with instructions
provided by the holder thereof), and (b) a new certificate for the balance of
such number of shares of SunGard Stock into which the shares of BancWare Stock
represented by such certificate have been converted in accordance with this Plan
("Escrow Stock"), which shall be held in escrow and distributed in accordance
with the terms of the Escrow Agreement attached hereto as Appendix 2 ("Escrow
Agreement"). 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 BancWare Stock shall be deemed to evidence
ownership of the number of shares of SunGard Stock into which the shares of
BancWare 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 two years after the Effective Date shall
no longer evidence ownership of shares of Closing 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.
B-5
<PAGE>
14. Dissenter's Rights. Shareholders of BancWare shall be entitled to
exercise the rights of dissenting shareholders 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 shareholders of BancWare.
15. Effective Date. As used in this Plan, the "Effective Date" shall mean
the date upon which this Plan and properly completed and executed Articles of
Merger and Certificate of Merger for the Merger have been duly filed with the
proper officials of the Commonwealth of Massachusetts and the State of Delaware,
respectively.
16. 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. BancWare 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 BancWare's shareholders is obtained (as
contemplated by the Reorganization Agreement) and without seeking further
shareholder approval, so long as such amendment, supplement or waiver does not
result in a decrease in the Merger Exchange Ratio or have a material adverse
effect on BancWare's shareholders. 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.
17. 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.
18. 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.
19. 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.
20. 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.
B-6
<PAGE>
21. References. All words used in this Plan shall be construed to be of
such number and gender as the context requires or permits.
In testimony whereof, each undersigned corporation has caused this Agreement
and Plan of Merger to be signed by its duly authorized President or Vice
President and Treasurer or Assistant Treasurer and its corporate seal affixed as
of the date first stated above.
BancWare, Inc.
By: /s/ WILLIAM E. POPP
------------------------------------
Print Name: WILLIAM E. POPP
Print Title: PRESIDENT
By: /s/ JOHN N. REES
------------------------------------
Print Name: JOHN N. REES
Print Title: TREASURER
SunGard Data Systems Inc.
By: /s/ RICHARD C. TARBOX
--------------------------------------
Print Name: RICHARD C. TARBOX
Print Title: Vice President
Corporate Development
By: /s/ MICHAEL J. RUANE
---------------------------------------
Print Name: MICHAEL J. RUANE
Print Title: Vice President,
Chief Financial Officer and
Treasurer
BWI Acquisition Inc.
By: /s/ RICHARD C. TARBOX
--------------------------------------
Print Name: RICHARD C. TARBOX
Print Title: Vice President
By: /s/ MICHAEL J. RUANE
---------------------------------------
Print Name: MICHAEL J. RUANE
Print Title: Vice President,
Chief Financial Officer and
Treasurer
B-7
<PAGE>
APPENDIX C
ESCROW AGREEMENT
PARTIES: BANCWARE, INC.
a Massachusetts corporation ("BancWare")
88 Broad Street
Boston, Massachusetts 02110
WILLIAM E. POPP ("Popp")
28 Sunnyrock Drive
Walpole, Massachusetts 02081
DOUGLAS DRANE ("Drane")
13 Robroy
Austin, Texas 78746
M.I. MANDALINCI ("Mandalinci")
30 Hideaway Lane
Methuen, Massachusetts 01844
THE SHAREHOLDERS OF BANCWARE
LISTED ON THE SIGNATURE PAGE HERETO
SUNGARD DATA SYSTEMS INC.
a Delaware corporation ("SunGard")
1285 Drummers Lane, Wayne, Pennsylvania 19087
BWI ACQUISITION INC.
a Delaware corporation ("Newco")
1285 Drummers Lane, Wayne, Pennsylvania 19087
NORWEST BANK, MINNESOTA, N.A. ("Escrow Agent")
161 N. Concord Exchange
South St. Paul, MN 55075-0738
DATE: , 1997
BACKGROUND
A. BancWare, SunGard, Newco and Popp, Mandalinci and Drane (the
"Principal Selling Parties") are parties to an Agreement and Plan of
Reorganization dated September 22, 1997 (the "Reorganization Agreement"), and
BancWare, SunGard and Newco are parties to a related Agreement and Plan of
Merger dated the same date (the "Plan of Merger") providing for the merger of
Newco with and into BancWare (the "Merger") with, subject to the rights of
dissenting shareholders, the conversion of each outstanding share of BancWare
Stock (as defined in the Reorganization Agreement) into immediately deliverable
shares of SunGard Stock (as
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<PAGE>
defined in the Plan of Merger) and the right to receive additional shares of
SunGard Stock held by the Escrow Agent under this Agreement. 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 issued as
the Merger Consideration (as defined in the Reorganization Agreement).
B. BancWare and SunGard have delivered to the Escrow Agent a list of the
names and addresses of BancWare's shareholders (hereinafter, "Shareholders")
showing as to each the number of shares of SunGard Stock (including fractional
shares) to be deposited in respect of the shares of BancWare Stock owned by such
Shareholder.
NOW, THEREFORE, the parties hereto agree as follows:
1. Shareholders General Indemnification. From and after the Closing Date
(as defined in the Reorganization Agreement), each of the Shareholders, jointly
and severally, joins in and agrees to be bound by the obligations of the
Principal Selling Parties to indemnify and hold harmless, and hereby agrees to
indemnify and hold harmless, the members of the SunGard Group (as defined in the
Reorganization Agreement) , 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 of the matters set forth in Section 5.3 or
Section 14.1 of the Reorganization Agreement, subject to the terms, conditions
and limitations set forth in Section 14 of the Reorganization Agreement;
provided, however, that the liability of any Shareholder hereunder (other than a
Principal Selling Party) shall be limited to their shares of Escrowed Stock held
hereunder. Nothing in this Agreement shall be deemed to modify, limit or
affect the Obligations (as defined in the Reorganization Agreement) of any
Principal Selling Party under the Reorganization Agreement.
2. Shareholder Accounts. The Escrow Agent shall maintain records and an
account for each Shareholder showing the number of shares deposited hereunder in
respect of the shares of BancWare Stock owned by each such Shareholder. As soon
as practicable after the Effective Date (as defined in the Plan of Merger), the
Escrow Agent shall mail to each Shareholder a statement showing the number of
shares of Escrowed Stock held by the Escrow Agent for such Shareholder.
Subsequent statements shall be distributed following any distributions pursuant
to Section 3.b hereof.
3. 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 Representative (as defined in Section 16) .
b. When payment of any claim for indemnification becomes due under
Section 14.2(c) of the Reorganization Agreement, SunGard shall forward to the
Escrow Agent a notice ("Payment Notice") setting forth the amount to which
SunGard is entitled ("Claim Amount") and provide evidence to the Escrow Agent
that the Payment Notice was sent to the
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<PAGE>
Representative. The Claim Amount shall be applied against all Shareholders'
accounts maintained by the Escrow Agent on a pro rata basis 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
share, valued at the Valuation Price (as defined below), equal to the amount
specified in the Payment Notice allocated by the Escrow Agent to accounts
containing Escrowed Stock. In the event that the value of the Escrowed Stock in
an account is insufficient to pay the allocable portion of the Claim Amount, the
Escrow Agent shall not be entitled to make up any deficiency from any other
account.
c. On ___________________, 1998 (the "Termination Date"), which date
is the first anniversary of the Effective Date (as defined in the Reorganization
Agreement) of the Merger, the Escrow Agent shall distribute to the Shareholders
the remaining shares of Escrowed Stock 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 Claim 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 ("Pending Claim
Amount") delivered under Section 14 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 resolution of any remaining
outstanding Claim Notices in accordance with the procedure set forth in Section
3.b with respect to Payment Notices, the Escrow Agent shall distribute to the
Shareholders the remaining shares of Escrowed Stock 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 Claim 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 BancWare Shareholders, if any, who
have dissented to the Merger and provide evidence to the Escrow Agent that the
Dissenters Notice was sent to the Representative and the dissenting
Shareholders. 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 Shareholders.
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 Shareholder in accordance with
this Agreement shall be rounded off to the nearest whole number of shares of
SunGard Stock.
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<PAGE>
g. In the event that any holder of certificates formerly representing
shares of BancWare 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 13 of the Plan of Merger.
4. Voting of Escrowed Shares. Shareholders shall have the right to vote
their respective shares of Escrowed Stock held by the Escrow Agent.
5. 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 New York Stock Exchange on the Closing Date (the "Valuation
Price").
6. Exchange of Collateral. A Shareholder may, at its or his option,
deposit with the Escrow Agent an equivalent value, based upon the Valuation
Price, of cash ("Escrowed Cash") in exchange for all of the Escrowed Stock in
such Shareholder's account. In any such case, references to the Escrowed Stock
and distributions thereof shall be deemed to refer instead to the Escrowed Cash
and distributions thereof.
7. 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
Representative 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 Representative to agree upon a
successor Escrow 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 $100,000,000. Any successor Escrow Agent,
whether appointed by the mutual agreement of SunGard and the Representative 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.
8. 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
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<PAGE>
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.
9. Indemnification of Escrow Agent. BancWare, SunGard and the
Shareholders jointly and severally 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; provided, however, that the liability of any Shareholder (other than a
Principal Selling Party) under this Section 9 who is not a party to such action,
suit or proceeding shall be limited to their shares of Escrowed Stock held
hereunder.
10. Notices. All notices, consents, waivers or other communications which
are required or permitted hereunder shall be sufficient if given in writing and
delivered personally 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 BancWare, SunGard or the Principal Selling Parties, as set forth in
Section 15.4 of the Reorganization Agreement.
If to any Shareholder (other than the Principal Selling Parties), to the
address set forth opposite their name on the signature page hereto with a copy
to the Representative.
If to the Escrow Agent (including any Payment Notice):
Norwest Bank Minnesota, N.A.
Norwest Center
Attention: Jane Schweiger
Sixth Street and Marquette Avenue
Minneapolis, MN 55479-0069
Fax: (612) 667-9825
with a copy to SunGard.
11. 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.
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12. Assignment; Binding Effect. The rights of the Shareholders 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.
13. 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.
14. 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 executed by the
parties hereto.
15. 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. Each
Shareholder agrees that the failure of any other Shareholder to execute and
deliver this Agreement shall not affect in any way the validity or
enforceability of this Agreement or the rights of SunGard or BancWare under this
Agreement, the Plan of Merger or the Reorganization Agreement.
16. Right of Representative to Act for Shareholders. Each of the
Shareholders expressly grants to the Principal Selling Party designated pursuant
to this Section (the "Representative") the full power and authority to
represent such Shareholder and to take any and all actions with respect to this
Agreement on behalf of suchShareholder including, but not limited to, (a)
administering any Indemnification Matter (as defined in the Reorganization
Agreement) on behalf of the Shareholders, agreeing to the settlement of any
Indemnification Matter and otherwise handling and negotiating Indemnification
Matters; (b) agreeing on behalf of the Shareholders; and (c) agreeing to any
waiver, consent or amendment under or to this Agreement, provided that no such
waiver, consent or amendment shall affect the method of allocation of payments
from the Escrowed Stock as set forth in Section 3.b hereof with respect to any
Shareholder who does not expressly consent thereto. Each of the Shareholders
acknowledges that this Section16 is intended to have the broadest possible scope
for the purpose of promoting the efficient negotiation and handling of all
matters which arise under or in connection with this Agreement. The
Representative shall be William E. Popp, provided, however, that upon written
notice to SunGard and the other Principal Selling Parties, Douglas Drane may
designate himself as the Representative; provided, further, however, that any
such notice from Douglas Drane shall not affect any actions taken by William E.
Popp as Representative prior to the receipt of such notice by SunGard and the
other Principal Selling Parties.
17. Limitation of Liability and Release. Absent fraud or breach of
fiduciary duty, none of BancWare, the Representative or any Principal Selling
Party shall incur any liability to any Shareholder as a result of any action
taken, or omitted to be taken, in connection with the Reorganization Agreement,
the Plan of Merger and/or the transactions contemplated thereby, including
without limitation the making of any incorrect representation or warranty under
the Reorganization Agreement, and, absent fraud or breach of fiduciary duty,
each Shareholder hereby releases BancWare and each Principal Selling Party from
any and all such liability;
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<PAGE>
provided, that this sentence shall not apply with respect to any liability of
any Principal Selling Party to any other Principal Selling Party.
In Witness Whereof, this Escrow Agreement has been executed as of the day
and year first written above.
BANCWARE, INC.
By:
------------------------------
Print Name:
Print Title:
- ---------------------------------
WILLIAM E. POPP
- ---------------------------------
DOUGLAS DRANE
- ---------------------------------
M. I. MANDALINCI
SUNGARD DATA SYSTEMS INC.
By:
------------------------------
Print Name:
Print Title:
BWI ACQUISITION INC.
By:
------------------------------
Print Name:
Print Title:
NORWEST BANK, MINNESOTA, N.A.
By:
------------------------------
Print Name:
Print Title:
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<PAGE>
BANCWARE SHAREHOLDERS
(Please sign and print your name exactly as it appears on your stock
certificate)
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Print Name: Address
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Print Name: Address
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Print Name: Address
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Print Name: Address
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Print Name: Address
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Print Name: Address
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Print Name: Address
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Print Name: Address
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Print Name: Address
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Print Name: Address
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Print Name: Address
[signatures and addresses of Shareholders continued on following pages]
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APPENDIX D
MASSACHUSETTS STATUTE CONCERNING RIGHTS OF DISSENTING STOCKHOLDERS
(FROM CHAPTER 156B OF THE GENERAL LAWS OF MASSACHUSETTS)
(S)85. PAYMENT FOR STOCK OF DISSENTING STOCKHOLDER.
A stockholder in any corporation organized under the laws of Massachusetts
which shall have duly voted to consolidate or merge with another corporation or
corporations under the provisions of sections seventy-eight or seventy-nine who
objects to such consolidation or merger may demand payment for his stock from
the resulting or surviving corporation and an appraisal in accordance with the
provisions of sections eighty-six to ninety-eight, inclusive, and such
stockholder and the resulting or surviving corporation shall have the rights and
duties and follow the procedure set forth in those sections. This section shall
not apply to the holders of any shares of stock of a constituent corporation
surviving a merger if, as permitted by subsection (c) of section seventy-eight,
the merger did not require for its approval a vote of the stockholders of the
surviving corporation.
(S)86. RIGHT OF APPRAISAL
If a corporation proposes to take a corporate action as to which any
section of this chapter provides that a stockholder who objects to such action
shall have the right to demand payment for his shares and an appraisal thereof,
sections eighty-seven to ninety-eight, inclusive, shall apply except as
otherwise specifically provided in any section of this chapter. Except as
provided in sections eighty-two and eighty-three, no stockholder shall have such
right unless (1) he files with the corporation before the taking of the vote of
the shareholders on such corporation action, written objection to the proposed
action stating that he intends to demand payment for his shares if the action is
taken and (2) his shares are not voted in favor of the proposed action.
(S)87. NOTICE OF STOCKHOLDERS MEETING TO CONTAIN
STATEMENT AS TO APPRAISAL RIGHTS
The notice of the meeting of stockholders at which the approval of such
proposed action is to be considered shall contain a statement of the rights of
objecting stockholders. The giving of such notice shall not be deemed to create
any rights in any stockholder receiving the same to demand payment for his
stock, and the directors may authorize the inclusion in any such notice of a
statement of opinion by the management as to the existence or non-existence of
the right of the stockholders to demand payment for their stock on account of
the proposed corporate action. The notice may be in such form as the directors
or officers calling the meeting deem advisable, but the following form of notice
shall be sufficient to comply with this section:
"If the action proposed is approved by the stockholders at the
meeting and effected by the corporation, any stockholder (1) who
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files with the corporation before the taking of the vote on the
approval of such action, written objection to the proposed action
stating that he intends to demand payment for his shares if the
action is taken and (2) whose shares are not voted in favor of
such action has or may have the right to demand in writing from
the corporation (or, in the case of a consolidation or merger,
the name of the resulting or surviving corporation shall be
inserted), within twenty days after the date of mailing to him of
notice in writing that the corporate action has become effective,
payment for his shares and an appraisal of the value thereof.
Such corporation and any such stockholder shall in such cases
have the rights and duties and shall follow the procedure set
forth in sections 88 to 98, inclusive, of chapter 156B of the
General Laws of Massachusetts."
(S)88. NOTICE TO OBJECTING STOCKHOLDER THAT CORPORATE
ACTION HAS BECOME EFFECTIVE
The corporation taking such action, or in the case of a merger or
consolidation the surviving or resulting corporation shall, within ten days
after the date on which such corporate action became effective, notify each
stockholder who filed written objection meeting the requirements of section
eighty-six and whose shares were not voted in favor of the approval of such
action, that the action approved at the meeting of the corporation of which he
is a stockholder has become effective. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock. The notice shall be sent by registered or certified
mail, addressed to the stockholder at his last known address as it appears in
the records of the corporation.
(S)89. DEMAND FOR PAYMENT BY OBJECTING STOCKHOLDER
If within twenty days after the date of mailing of a notice under
subsection (e) of section eighty-two, subsection (f) of section eighty-three, or
section eighty-eight any stockholder to whom the corporation was required to
give such notice shall demand in writing from the corporation taking such
action, or in the case of a consolidation or merger from the resulting or
surviving corporation, payment for his stock, the corporation upon which such
demand is made shall pay to him the fair value of his stock within thirty days
after the expiration of the period during which such demand may be made.
(S)90. DETERMINATION OF VALUE OF STOCK BY SUPERIOR COURT
If during the period of thirty days provided for in section eighty-nine the
corporation upon which such demand is made and any such objecting stockholder
fail to agree as to the value of such stock, such corporation or any such
stockholder may within four months after the expiration of such thirty-day
period demand a determination of the value of the stock of all such objecting
stockholders by a bill in equity field in the superior court in the county where
the corporation in which such objecting stockholder held stock had or has its
principal office
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in the commonwealth.
(S)91. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING
STOCKHOLDERS ON FAILURE TO AGREE ON VALUE THEREOF ETC; PARTIES TO
BILL ETC; SERVICE OF BILL ON CORPORATION; NOTICE TO STOCKHOLDER
PARTIES ETC.
If the bill is filed by the corporation, it shall name as parties
respondent all stockholders who have demanded payment for this shares and with
whom the corporation has not reached agreement as to the value thereof. If the
bill is filed by a stockholder, he shall bring the bill in his own behalf and in
behalf of all other stockholders who have demanded payment for their shares and
with whom the corporation has not reached agreement as to the value thereof, and
service of the bill shall be made upon the corporation by subpoena with a copy
of the bill annexed. The corporation shall file with its answer a duly verified
list of all such other stockholders, and such stockholders shall thereupon be
deemed to have been added as parties to the bill. The corporation shall give
notice in such form and returnable on such date as the court shall order to each
stockholder party to the bill by registered or certified mail, addressed to the
last known address of such stockholder as shown in the records of the
corporation, and the court may order such additional notice by publication or
otherwise as it deems advisable. Each stockholder who makes demand as provided
in section eighty-nine shall be deemed to have consented to the provisions of
this section relating to notice, and the giving of notice by the corporation to
any such stockholder in compliance with the order of the court shall be a
sufficient service of process on him. Failure to give notice to any stockholder
making demand shall not invalidate the proceedings as to other stockholders to
whom notice was properly given, and the court may at any time before the entry
of a final decree make supplementary orders of notice.
(S)92. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING
STOCKHOLDERS ON FAILURE TO AGREE ON VALUE THEREOF, ETC; ENTRY OF
DECREE DETERMINING VALUE OF STOCK; DATE ON WHICH VALUE IS TO BE
DETERMINED.
After hearing the court shall enter a decree determining the fair value of
the stock of those stockholders who have become entitled to the valuation of and
payment for their shares; and shall order the corporation to make payment of
such value, together with interest, if any, as hereinafter provided, to the
stockholders entitled thereto upon the transfer by them to the corporation of
the certificates representing such stock if certificates or if uncertificated,
upon receipt of an instruction transferring such stock to the corporation. For
this purpose, the value of the shares shall be determined as of the day
preceeding the date of the vote approving the proposed corporate action and
shall be exclusive of any element of value arising from the expectation or
accomplishment of the proposed corporate action.
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(S)93. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING
STOCKHOLDERS ON FAILURE TO AGREE ON VALUE THEREOF, ETC.; COURT
MAY REFER BILL, ETC., TO SPECIAL MASTER TO HEAR PARTIES, ETC.
The court in its discretion may refer the bill or any question arising
thereunder to a special master to hear the parties, make findings and report the
same to the court, all in accordance with the usual practice in suits in equity
in the superior court.
(S)94. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING
STOCKHOLDERS ON FAILURE TO AGREE ON VALUE THEREOF, ETC.;
STOCKHOLDER PARTIES MAY BE REQUIRED TO SUBMIT THEIR STOCK
CERTIFICATES FOR NOTATION THEREON OF PENDENCY OF BILL, ETC.
On motion the court may order stockholder parties to the bill to submit
their certificates of stock to the corporation for notation thereon of the
pendency of the bill, and may order, the corporation to note such pendency in
its records with respect to any uncertificated shares held by such stockholder
parties, and may on motion dismiss the bill as to any stockholder who fails to
comply with such order.
(S)95. BILL IN EQUITY TO DETERMINE VALUE OF STOCK OF OBJECTING
STOCKHOLDERS ON FAILURE TO AGREE ON VALUE THEREOF, ETC.; TAXATION
OF COSTS, ETC.; INTEREST ON AWARD, ETC.
The costs of the bill, including the reasonable compensation and expenses
of any master appointed by the court, but exclusive of fees of counsel or of
experts, retained by any party, shall be determined by the court and taxed upon
the parties to the bill, or any of them, in such manner as appears to be
equitable, except that all costs of giving notice to stockholders, as provided
in this chapter shall be paid by the corporation. Interest shall be paid upon
any award from the date of the vote approving the proposed corporate action, and
the court may on application of any interested party determine the amount of
interest to be paid in the case of any stockholder.
(S)96. STOCKHOLDER DEMANDING PAYMENT FOR STOCK NOT ENTITLED TO NOTICE OF
STOCKHOLDERS' MEETINGS OR TO VOTE STOCK OR TO RECEIVE DIVIDENDS,
ETC.; EXCEPTIONS .
Any stockholder who has demanded payment for his stock as provided in this
chapter shall not thereafter be entitled to notice of any meeting of
stockholders or to vote such stock for any purpose and shall not be entitled to
the payment of dividends or other distribution on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the date of the vote approving the proposed corporate action) unless:
(1) A bill shall not be filed within the time provided in section ninety;
(2) A bill, if filed, shall be dismissed as to such stockholder; or
(3) Such stockholder shall with the written approval of the corporation, or
in the case of a consolidation or merger, the resulting or surviving
corporation, deliver
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<PAGE>
to it a written withdrawal of his objections to and an acceptance of such
corporate action.
Notwithstanding the provisions of clauses (1) to (3), inclusive, said
stockholder shall have only the rights of a stockholder who did not so demand
payment for his stock as provided in this chapter.
(S)97. CERTAIN SHARES PAID FOR BY CORPORATION TO HAVE STATUS OF TREASURY
STOCK, ETC.
The shares of the corporation paid for by the coproration pursuant to the
provisions of this chapter shall have the status of treasury stock or in the
case of a consolidation or merger the shares or the securities of the resulting
or surviving corporation into which the shares of such objecting stockholder
would have been converted had he not objected to such consolidation or merger
shall have the status of treasury stock or securities.
(S)98. ENFORCEMENT BY STOCKHOLDER OF RIGHT TO RECEIVE PAYMENT FOR HIS
SHARES TO BE EXCLUSIVE REMEDY; EXCEPTION.
The enforcement by a stockholder of his right to receive payment for his
shares in the manner provided in this chapter shall be an exclusive remedy
except that this chapter shall not exclude the right of such stockholder to
bring or maintain an appropriate proceeding to obtain relief on the ground that
such corporate action will be or is illegal or fraudulent as to him.
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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
<TABLE>
<CAPTION>
NUMBER DOCUMENT
- ------ -----------------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Reorganization dated September 22, 1997 among
SunGard, Newco, BancWare and the Principal Selling Parties and
Amendment No.1 thereto (included in the Proxy Statement-Prospectus as
Appendix A).
2.2 Agreement and Plan of Merger dated September 22, 1997 among SunGard,
Newco and BancWare (included in the Proxy Statement-Prospectus as
Appendix B).
2.3 Form of Escrow Agreement among BancWare, SunGard, Newco, and the Escrow
Agent, (included in the Proxy Statement-Prospectus as Appendix C).
</TABLE>
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<TABLE>
<CAPTION>
NUMBER DOCUMENT
- ------ ---------------------------------------------------------------------
<S> <C>
2.4/(14)/ Agreement and Plan of Merger and Reorganization dated as of October
17, 1997 among SunGard, Infinity and Information Data Inc.
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
Merger.
8.1 Opinion of Blank Rome Comisky & McCauley as to the tax consequences
described in the Proxy Statement-Prospectus.
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.
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 ("401
Lease").
10.8/(8)/ Amendment to 401 Lease, dated October 9, 1995.
10.9/(13)/ Amendment to 401 Lease, dated December 23, 1996.
10.10/(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.
10.11/(9)/ Credit Agreement, dated August 29, 1996, among SunGard, certain banks
and other financial institutions and PNC Bank, National Association,
as Agent.
10.12/(1)/ SunGard's 1982 Incentive Stock Option Plan and Amendments thereto,
dated January 1, 1987 and November 8, 1991./(14)/
10.13/(10)/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./(14)/
10.14/(1)/ SunGard's 1988 Nonqualified Stock Option Plan and Amendment thereto,
dated October 30, 1990./(14)/
10.15/(6)/ SunGard's 1990 Amended and Restated Restricted Stock Incentive
Plan./(14)/
10.16/(11)/SunGard's Restricted Stock Award Plan for Outside Directors./(14)/
10.17/(12)/SunGard's 1994 Equity Incentive Plan./(14)/
10.18/(8)/ SunGard's 1996 Equity Incentive Plan./(14)/
10.19/(13)/The United Kingdom Addendum to the Company's 1996 Equity Incentive
Plan./(14)/
10.20/(13)/Summary Description of SunGard's Annual Executive Incentive
Compensation Program./(14)/
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
NUMBER DOCUMENT
- ------ ---------------------------------------------------------------------
<S> <C>
10.21/(8)/ Summary Description of SunGard's Long-Term Executive Incentive
Compensation Plan./(14)/
10.22/(1)/ Form of Indemnification Agreement entered into by SunGard with its
directors and officers./(14)/
11.1/(13)/ Statement Re Computation of Per Share Earnings.
21.1/(13)/ Subsidiaries of SunGard.
*23.1 Consent of Coopers & Lybrand L.L.P. with respect to SunGard.
*23.2 Consent of Carlin, Charron & Rosen LLP with respect to BancWare
*23.3 Consent of Ernst & Young LLP, independent auditors.
*23.4 Consent of Blank Rome Comisky & McCauley (included in Exhibit 5.1).
*24.1 Power of attorney of certain signatories (included on the Signature
Page).
99.1/(14)/ Form of Voting Agreement related to the Infinity Merger dated as of
October 17, 1997, a substantially similiar version of which has been
executed by SunGard and each of Terry H. Carlitz, James Dorrian, Till
M. Guldimann, Roger A, Lang, Jr., Michael A. Laven, Douglas M. Leone,
John C. Lewis, Sequoia Capital Growth Fund and Sequoia Technology
Partners III.
99.2 Form of Proxy sent to BancWare Stockholders.
99.3 Form of Memorandum sent by BancWare to BancWare Stockholders.
- -----------------
* Previously filed.
</TABLE>
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).
(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, 1995 (Commission
File No. 0-14232).
(9) Incorporated by reference to the Exhibits filed with the Company's
Quarterly Report on Form 10-Q for the quarterly period ended September 30,
1996 (Commission Filed No. 0-14232).
II-3
<PAGE>
(10) 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).
(11) 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).
(12) 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).
(13) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996 (Commission
File No. 0-14232).
(14) Incorporated by reference to the Exhibits filed with SunGard's Current
Report on Form 8-K dated October 27, 1997 (Commission File No. 1-12989).
(15) 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
II-4
<PAGE>
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 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.
II-5
<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: November 11, 1997 By: /s/ Michael J. Ruane
----------------------------
Michael J. Ruane
Chief Financial Officer
and Vice-President-Finance
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.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------- -------- ----
<S> <C> <C>
* Chief Executive Officer, November 11, 1997
- ---------------------------- President, and Chairman
JAMES L. MANN of the Board of Directors
(principal executive officer)
/s/ Michael J. Ruane Chief Financial Officer and November 11, 1997
- ---------------------------- Vice President-Finance
MICHAEL J. RUANE (principal financial officer)
/s/ Andrew P. Bronstein Vice President and Controller November 11, 1997
- ---------------------------- (principal accounting officer)
ANDREW P. BRONSTEIN
* Director November 11, 1997
- ----------------------------
GREGORY S. BENTLEY
* Director November 11, 1997
- ----------------------------
MICHAEL C. BROOKS
* Director November 11, 1997
- ----------------------------
ALBERT A. EISENSTAT
* Director November 11, 1997
- ----------------------------
BERNARD GOLDSTEIN
* Director November 11, 1997
- ----------------------------
MICHAEL ROTH
* Director November 11, 1997
- ----------------------------
MALCOLM I. RUDDOCK
* Director November 11, 1997
- ----------------------------
LAWRENCE J. SCHOENBERG
*By: /s/ Michael J. Ruane November 11, 1997
------------------------
MICHAEL J. RUANE
(Power of Attorney)
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DOCUMENT
- ------ --------
<S> <C>
2.1 Agreement and Plan of Reorganization dated September 22, 1997 among
SunGard, Newco, BancWare and the Principal Selling Parties and
Amendment No. 1 thereto (included in the Proxy Statement-Prospectus as
Appendix A).
2.2 Agreement and Plan of Merger dated September 22, 1997 among SunGard,
Newco and BancWare (included in the Proxy Statement-Prospectus as
Appendix B).
2.3 Form of Escrow Agreement among BancWare, SunGard, Newco, the Principal
Selling Parties, the shareholders of BancWare and the Escrow Agent
(included in the Proxy Statement-Prospectus as Appendix C).
8.1 Opinion of Blank Rome Comisky & McCauley as to the Tax consequences
described in the Proxy-Statement Prospectus.
99.2 Form of Proxy sent to BancWare Stockholders.
99.3 Form of Memorandum sent by BancWare to BancWare Stockholders.
</TABLE>
<PAGE>
EXHIBIT 8.1
OPINION OF BLANK ROME COMISKY & McCAULEY
November 11, 1997
SunGard Data Systems Inc.
1285 Drummers Lane
Wayne, PA 19087
Gentlemen:
We refer to the Agreement and Plan of Merger dated September 22, 1997 (the
"Merger Agreement"), among SunGard Data Systems Inc. ("SunGard"), BWI
Acquisition, Inc., a wholly-owned subsidiary of SunGard ("Newco"), BancWare,
Inc., a Massachusetts corporation ("BancWare"), and the related Agreement and
Plan of Reorganization, dated September 22, 1997 (the "Reorganization
Agreement"), among SunGard, Newco, BancWare and certain of the stockholders of
BancWare (the "Principals"), pursuant to which (a) Newco would be merged with
and into BancWare, with BancWare surviving the merger under the name "BancWare,
Inc.," and (b) BancWare stockholders (other than BancWare stockholders who
perfect dissenter's rights) would receive SunGard Common Stock pursuant to
formula conversion ratios.
The Reorganization Agreement and the Merger Agreement are hereinafter
collectively referred to as the "Agreements" and the transactions contemplated
thereby are hereinafter collectively referred to as the "Reorganization." We
also refer to Amendment No. 1 to the Registration Statement on Form S-4 (the
"Registration Statement") being filed by SunGard with the Securities and
Exchange Commission relating to the issuance of up to 360,000 shares of common
stock, par value $.01 per share, of SunGard (the "SunGard Common Stock"). The
Proxy Statement- Prospectus (the "Proxy Statement"), which is part of the
Registration Statement, contains a section entitled "THE PROPOSED MERGER -
Certain Federal Income Tax Consequences" (the "Section").
In rendering the opinion hereinafter expressed, we have assumed the initial
and continuing accuracy of the information, statements and representations set
forth in the Agreements and the Proxy Statement (excluding references to tax
consequences), and that the Reorganization and any related transactions will be
consummated in the manner described in such documents. We have not independently
verified such assumptions but have no reason to believe such assumptions are not
valid. In addition, in rendering such opinion we have relied
<PAGE>
SunGard Data Systems Inc.
Page 2
November 11, 1997
upon the factual assumptions contained in a Certificate to be executed by
certain executive officers of SunGard and BancWare.
In rendering the opinion hereinafter expressed, we have considered the
applicable provisions of the Internal Revenue Code of 1986, as amended, Treasury
Regulations promulgated thereunder, pertinent judicial authorities, and such
other authorities as we have deemed appropriate under the circumstances.
Based on and subject to the foregoing and our consideration of such other
matters as we have deemed necessary or appropriate, we are of the opinion that,
while the descriptions of federal income tax consequences contained in the
Section do not purport to discuss all possible federal income tax consequences
of the Reorganization under present laws and regulations, such descriptions are,
in all material respects, fair summaries of the federal income tax consequences
of the Reorganization to the stockholders of BancWare.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the Rules and Regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
BLANK ROME COMISKY & McCAULEY
<PAGE>
EXHIBIT 99.2
PROXY
BANCWARE, INC.
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 12, 1997
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BANCWARE, INC.
The undersigned hereby constitutes and appoints William E. Popp and M.I.
Mandalinci and each of them, as attorneys and proxies of the undersigned, with
full power of substitution, for and in the name, place and stead of the
undersigned, to appear at the Special Meeting of Shareholders of BancWare, Inc.
("BancWare") to be held on December 12, 1997, and at any postponement or
adjournment thereof, and to vote all of the shares of BancWare which the
undersigned is entitled to vote, with all the powers and authority the
undersigned would possess if personally present.
PROPOSAL 2. [_] FOR [_] AGAINST [_] ABSTAIN the proposal to
approve the Agreement and Plan of Reorganization, dated September 22, 1997 (the
"Reorganization Agreement"), among SunGard Data Systems Inc. ("SunGard"), BWI
Acquisition Inc., a wholly owned subsidiary of SunGard ("Newco"), BancWare,
William E. Popp ("Popp"), Douglas Drane ("Drane") and M.I. Mandalinci
("Mandalinci"), and the related Agreement and Plan of Merger, dated September
22, 1997 (the "Merger Agreement"), among SunGard, Newco and BancWare, pursuant
to which (a) Newco would be merged with and into BancWare (the "Merger"), with
BancWare surviving the Merger under the name BancWare, Inc. and (b) BancWare
shareholders (other than shareholders who perfect dissenter's rights) would
receive, subject to adjustment under certain circumstances, an aggregate of up
to 360,000 shares of common stock, $0.01 par value per share, of SunGard, to be
allocated among the holders of BancWare Stock, all as more fully described in
the accompanying Proxy Statement-Prospectus; and
PROPOSAL 2. To consider such other matters as may properly be brought before
the meeting or any adjournments or postponements thereof.
(continued and to be signed on reverse side)
<PAGE>
THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS TO THE CONTRARY ARE
INDICATED, THE PROXY AGENTS INTEND TO VOTE FOR THE APPROVAL OF PROPOSAL 1.
BOTH PROXY AGENTS PRESENT AND ACTING IN PERSON OR BY THEIR SUBSTITUTES (OR,
IF ONLY ONE IS PRESENT AND ACTING, THEN THAT ONE) MAY EXERCISE ALL THE POWERS
CONFERRED BY THIS PROXY. DISCRETIONARY AUTHORITY IS CONFERRED BY THIS PROXY AS
TO CERTAIN MATTERS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT-PROSPECTUS.
The undersigned hereby acknowledges receipt of Notice of BancWare's 1997
Special Meeting of Shareholders and the Proxy Statement-Prospectus relating
thereto.
DATE: , 1997
-------------------------
(Please date this Proxy)
ORGANIZATION/TRUST SIGNATURE: INDIVIDUAL SIGNATURE:
- ------------------------------------ --------------------------------
Print Name of Stockholder Print Name of Stockholder(s)
By:
--------------------------------- --------------------------------
Signature Signature
- ------------------------------------ --------------------------------
Print Name and Title of Person Signing Signature
It would be helpful if you signed your name
exactly as it appears on your stock
certificate(s), indicating any official position
or representative capacity. If shares are
registered in more than one name, all owners
should sign.
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE
PAID ENVELOPE.
<PAGE>
EXHIBIT 99.3
MEMORANDUM
TO: Shareholders of BancWare, Inc.
FROM: Bill Popp and Matt Mandalinci
BancWare, Inc.
DATE: November 12, 1997
- --------------------------------------------------------------------------------
You should have received a preliminary copy of a Proxy Statement-Prospectus
recently, relating to the acquisition of BancWare by SunGard Data Systems Inc.
An amendment to the Proxy Statement-Prospectus was filed with the SEC, and the
SEC has declared it effective.
Now that the Proxy Statement-Prospectus is effective, for the acquisition to go
forward, among other things, the shareholders of BancWare must vote to approve
the transaction.
A copy of the amended Proxy Statement-Prospectus (including a Notice of Special
Meeting of Shareholders), a proxy card and a return envelope for the proxy card
are enclosed. In addition, a blank signature page to the Escrow Agreement
(described in the Proxy Statement-Prospectus and attached to the Proxy
Statement-Prospectus as Appendix C) is enclosed for your signature. Please
complete the signature page to the Escrow Agreement by signing your name,
printing your name below your signature and printing your address in the space
provided. You should return your signed signature page to BancWare along with
your signed proxy card in the enclosed return envelope.
PLEASE NOTE THAT THE SPECIAL MEETING OF SHAREHOLDERS OF BANCWARE HAS BEEN
RESCHEDULED TO BE HELD DECEMBER 12, 1997 AT 10:00AM AT BANCWARE'S HEADQUARTERS
-----------------
AT 88 BROAD STREET, BOSTON, MA 02110.
As always, please call either of us at 617-542-2800 (Bill at ext. 245 and Matt
at ext. 628) with any questions.
