<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 20, 1998
REGISTRATION NO. 333-45633
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------
SUNGARD DATA SYSTEMS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 7379 51-0267091
(Primary Standard (I.R.S. Employer
(State or other Industrial Classification Identification No.)
jurisdiction of Code Number)
incorporation or
organization)
SUNGARD DATA SYSTEMS INC.
1285 DRUMMERS LANE
WAYNE, PENNSYLVANIA 19087
610-341-8700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------------------------
LAWRENCE A. GROSS, ESQUIRE
VICE PRESIDENT AND GENERAL COUNSEL
SUNGARD DATA SYSTEMS INC.
1285 DRUMMERS LANE
WAYNE, PENNSYLVANIA 19087
610-341-8700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------------------
COPIES TO:
ARTHUR H. MILLER, ESQUIRE DAVID SMALLEY, ESQUIRE
BLANK ROME COMISKY & MCCAULEY LLP DEBEVOISE & PLIMPTON
ONE LOGAN SQUARE 1 CREED COURT
PHILADELPHIA, PENNSYLVANIA 19103 5 LUDGATE HILL
215-569-5500 LONDON EC4M 7AA
44-171-329-0779
----------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: The date of mailing of the within Offer Document to the shareholders
of Rolfe & Nolan Plc.
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. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the following
box and list the Securities Act of 1933 registration statement number of the
earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act of 1933 registration statement number of the earlier effective
registration statement for the same offering. [_]
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.
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- -------------------------------------------------------------------------------
<PAGE>
THIS OFFER DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
When considering what action you should take, you are recommended to seek your
own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorized under the
Financial Services Act 1986.
This Offer Document should be read in conjunction with the accompanying Form
of Acceptance.
If you have sold or transferred all your holding of Rolfe & Nolan Shares,
please forward this Offer Document and the accompanying Form of Acceptance and
reply-paid envelope to the purchaser or transferee or to the stockbroker, bank
or other agent through whom the sale or transfer was effected for transmission
to the purchaser or transferee. However, such documents should not be
forwarded or transmitted in, into or from Canada, Australia or Japan.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RECOMMENDED OFFER
BY
BROADVIEW ASSOCIATES
ON BEHALF OF
SUNGARD DATA SYSTEMS INC.
FOR
ROLFE & NOLAN PLC
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Offer is not being made, directly or indirectly, in or into Canada,
Australia or Japan and this document and the Form of Acceptance are not being,
and must not be, mailed or transmitted in or into Canada, Australia or Japan.
A letter from the Chairman of Rolfe & Nolan recommending the Offer is set out
on pages 5 to 8.
The procedure for acceptance is set out on pages 20 to 23 of this Offer
Document and in the accompanying Form of Acceptance. To accept the Offer, the
Form of Acceptance must be completed and returned as soon as possible, and in
any event so as to be received no later than 3:00 p.m. (UK time) on 20 March,
1998.
See Appendix VIII for definitions of terms used in this Offer Document.
THE SHAREHOLDERS OF ROLFE & NOLAN ARE STRONGLY URGED TO READ AND CONSIDER
CAREFULLY THIS OFFER DOCUMENT IN ITS ENTIRETY, INCLUDING THE MATTERS REFERRED
TO UNDER "INFORMATION REGARDING SUNGARD -- RISK FACTORS", BEGINNING ON PAGE
24.
THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE OFFER HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SEC OR THE SECURITIES COMMISSION OF ANY STATE
OF THE UNITED STATES NOR HAS THE SEC OR ANY SUCH STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFER DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
Broadview Associates, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, is acting for SunGard and no-one
else in connection with the Offer and will not be responsible to anyone other
than SunGard for providing the protections afforded to customers of Broadview
Associates or for giving advice in relation to the Offer. Broadview Associates
will be acting through Broadview Associates LLC for the purposes of making the
Offer in and into the United States.
Close Brothers, which is regulated in the United Kingdom by The Securities and
Futures Authority Limited, is acting for Rolfe & Nolan and no-one else in
connection with the Offer and will not be responsible to anyone other than
Rolfe & Nolan for providing the protections afforded to customers of Close
Brothers or for giving advice in relation to the Offer.
CERTAIN MARKET MAKERS ON THE LSE THAT ARE AFFILIATED WITH THE FINANCIAL
ADVISERS TO ROLFE & NOLAN MAY ENGAGE IN "MARKET MAKING" TRANSACTIONS ON THE
LSE IN ROLFE & NOLAN SHARES DURING THE PERIOD FROM THE ANNOUNCEMENT OF THE
OFFER UNTIL THE END OF THE OFFER PERIOD. SUCH MARKET MAKERS HAVE RECEIVED FROM
THE SEC NO-ACTION RELIEF FROM RULE 10B-13 UNDER THE EXCHANGE ACT IN ORDER TO
ENGAGE IN SUCH ACTIVITIES. FURTHERMORE, SUNGARD, THE FINANCIAL ADVISERS TO
ROLFE & NOLAN AND ANY ONE OR MORE OF THEIR AFFILIATES HAVE RECEIVED FROM THE
SEC NO-ACTION RELIEF FROM RULE 10B-13 UNDER THE EXCHANGE ACT TO PURCHASE ROLFE
& NOLAN SHARES, SUBJECT TO CERTAIN CONDITIONS, IN ANY PERIOD DURING WHICH THE
OFFER REMAINS OPEN BUT AFTER SUNGARD SHALL HAVE BECOME ENTITLED TO APPLY THE
PROVISIONS OF SECTIONS 428-430F OF THE COMPANIES ACT TO ACQUIRE COMPULSORILY
ANY OUTSTANDING ROLFE & NOLAN SHARES.
<PAGE>
AVAILABLE INFORMATION
SunGard has filed with the SEC the Registration Statement with respect to the
offering of SunGard Common Stock to be issued in connection with the Offer.
This Offer Document constitutes a part of the Registration Statement and, in
accordance with the rules of the SEC, 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 Exchange Act and in
accordance therewith files reports, proxy statements and other information
with the SEC. 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 SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC'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 can also be obtained from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The SEC
also maintains a WorldWide Web site that contains reports, proxy and
information statements, and other information regarding registrants that file
electronically with the SEC. The site and this Registration Statement may be
accessed at http: www.sec.gov. SunGard Common Stock is traded on the NYSE. In
addition, such materials and other information concerning SunGard also can be
inspected at the NYSE at 20 Broad Street, New York, New York, 10005. The
Registration Statement may also be inspected at the offices of Norton Rose,
Kempson House, Camomile Street, London EC3A 7AN, England, during normal
business hours on any weekday (English public holidays excepted) while the
Offer remains open for acceptance.
INCORPORATION OF DOCUMENTS BY REFERENCE
This Offer Document 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 Offer Document 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 in the
United States upon request from SunGard, 1285 Drummers Lane, Wayne,
Pennsylvania 19087, USA, Attention: Investor Relations, telephone: 610-341-
8700, and in the United Kingdom upon request from Norton Rose, Kempson House,
Camomile Street, London EC3A 7AN, Attention: Mary Harmey, telephone: 0171-283-
6000. In addition, such documents and information may also be inspected at the
offices of Norton Rose, Kempson House, Camomile Street, London EC3A 7AN,
England during normal business hours on any weekday (English public holidays
excepted) while the Offer remains open for acceptance.
The following documents filed by SunGard with the SEC are hereby incorporated
by reference in this Offer Document: (1) SunGard's Annual Report on Form 10-K
for the year ended December 31, 1996; (2) SunGard's Quarterly Report on Form
10-Q for the quarters ended March 30, 1997, June 30, 1997 and September 30,
1997; (3) SunGard's Definitive Proxy Statement in connection with its 1997
Annual Meeting of Shareholders; and (4) SunGard's Current Reports on Form 8-K
dated October 27, 1997 and January 16, 1998.
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 Offer Document and prior to the
date on which the Offer becomes or is declared unconditional in all respects
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 Offer Document 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 Offer Document
except as so modified or superseded.
2
<PAGE>
----------------
RULE 8 NOTICES
Any person who, alone or acting together with any other person(s) pursuant to
any agreement (formal or informal), owns or controls, or becomes the owner or
controller of, directly or indirectly, 1 per cent. or more of any relevant
securities (as such term is defined on page V-4 of this Offer Document) is
required, under the provisions of Rule 8 of the City Code, to notify the
Company Announcements Office of the LSE, which will notify the Panel and the
United Kingdom press, by no later than 12:00 noon on the business day
following the date of the relevant transaction of every dealing in any
relevant securities until the first closing date of the Offer or (if later)
such time as the Offer becomes or is declared unconditional in all respects or
lapses, in accordance with Rule 8. Dealings by "associates" (within the
meaning of the City Code) of SunGard or Rolfe & Nolan in SunGard Common Stock
or Rolfe & Nolan Shares until such time must also be disclosed. Please consult
your legal counsel immediately if you believe Rule 8 may be applicable to you.
----------------
FINANCIAL INFORMATION
The extracts from the consolidated financial statements of, and other
information about, SunGard appearing in this Offer Document are presented in
US dollars ($) and have been prepared in accordance with US GAAP. The extracts
from the consolidated financial statements of, and other information about,
Rolfe & Nolan appearing in this Offer Document are presented in pounds
sterling ((Pounds)) and have been prepared in accordance with UK GAAP. US GAAP
and UK GAAP differ in certain significant respects. As a result, and for the
convenience of the reader, the financial information of Rolfe & Nolan used in
the preparation of the pro forma information appearing in this Offer Document
has been adjusted to comply with US GAAP and contains translations of pounds
sterling amounts into US dollars at rates specified in "Information Regarding
Rolfe & Nolan--Selected Rolfe & Nolan Financial Information." Such
translations should not be construed as representations that the pounds
sterling amounts represent, or have been, or could be converted into US
dollars at that or any other rate. The mid-point of the closing spread of the
dollar to sterling spot rate, as shown in the Financial Times (UK edition)
effective on 4 February 1998, the last dealing date before the announcement of
the Offer, was 1.6425 and effective on 18 February 1998, the last practicable
date prior to the posting of this Offer Document, was 1.6413. The noon buying
rate in New York City for cable transfers in pounds sterling as certified for
customs purposes by the Federal Reserve Bank of New York on these dates was
1.6580 and 1.6395, respectively. This information is provided for the
convenience of the reader and may differ from the actual rates in effect
during the periods covered by the Rolfe & Nolan financial information
discussed herein. All US GAAP information for Rolfe & Nolan appearing in this
Offer Document is unaudited.
3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
LETTER FROM THE CHAIRMAN OF ROLFE & NOLAN TO ROLFE & NOLAN SHAREHOLDERS... 5
OFFER LETTER FROM BROADVIEW ASSOCIATES TO ROLFE & NOLAN SHAREHOLDERS...... 9
1.Introduction.......................................................... 9
2.The Offer............................................................. 9
3.Dealing Facility...................................................... 11
4.Financial Effects of the Offer........................................ 11
5.Rolfe & Nolan Share Option Schemes.................................... 12
6.Accounting Treatment.................................................. 12
7.Illustrative Comparative Per Share Data............................... 13
8.Information Regarding SunGard......................................... 14
9.Information Regarding Rolfe & Nolan................................... 14
10.Background to and Reasons for the Offer.............................. 15
11.Employees............................................................ 17
12.Taxation............................................................. 17
13.Procedure For Acceptance............................................. 20
14.Settlement........................................................... 23
15.Further Information.................................................. 23
INFORMATION REGARDING SUNGARD............................................. 24
1.Risk Factors.......................................................... 24
2.Preliminary Announcement of SunGard's 1997 Financial Results.......... 26
3.Recent Developments of SunGard........................................ 26
4.Selected Financial Information of SunGard............................. 28
INFORMATION REGARDING ROLFE & NOLAN....................................... 29
1.Business.............................................................. 29
2.Selected Rolfe & Nolan Financial Information.......................... 30
3.Rolfe & Nolan Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................. 31
4.Nature of Trading Markets............................................. 33
5.Market Risk........................................................... 33
</TABLE>
<TABLE>
<C> <S> <C>
APPENDICES
APPENDIX I Conditions and Further Terms of the Offer.............. I-1
APPENDIX II SunGard Financial Statements........................... II-1
APPENDIX III Rolfe & Nolan Financial Statements..................... III-1
APPENDIX IV Certain Market and Dividend Information................ IV-1
APPENDIX V Additional Information................................. V-1
APPENDIX VI Description of SunGard Capital Stock and Changes in the
Rights of Rolfe & Nolan Shareholders.................. VI-1
APPENDIX VII Certain Provisions of The Companies Act................ VII-1
APPENDIX VIII Definitions............................................ VIII-1
</TABLE>
4
<PAGE>
LOGO
(Registered in England No. 1157638)
Registered Office:
Rolfe & Nolan Plc
Lowndes House
1/9 City Road
London
EC1Y 1AA
Directors:
Tim M Hearley* (CHAIRMAN)
Peter D Day (CHIEF EXECUTIVE)
David A Battle
Anthony G Biddle*
Colin N Day*
Stephen C Rapkin
Paul K Wright
* Non executive
20 February 1998
To Rolfe & Nolan Shareholders and, for information only, to participants in
the Rolfe & Nolan Share Option Schemes
Dear Shareholder
RECOMMENDED OFFER BY SUNGARD FOR ROLFE & NOLAN
The boards of Rolfe & Nolan and SunGard announced on 5 February 1998 that they
had agreed the terms of a recommended share for share offer to be made by
Broadview Associates on behalf of SunGard for the whole of the share capital
of Rolfe & Nolan. I am writing to explain the background to the Offer and the
reasons why your directors consider that the terms of the Offer are fair and
reasonable and, accordingly, why they unanimously recommend that you accept
the Offer.
BACKGROUND TO AND REASONS FOR THE RECOMMENDATION
During its 16 years as a quoted company, Rolfe & Nolan has successfully
developed its core business of providing software support for worldwide
futures and options operations. In the year ended 28 February 1997 this
business accounted for approximately 94 per cent. of the Rolfe & Nolan Group's
turnover. The continuing increase in derivatives transaction volumes now
provides the Rolfe & Nolan Group with substantial revenue and profit streams.
In 1993, Rolfe & Nolan recognised that the growing need for sophisticated
systems to manage the global capital markets operations of international
banking groups created a particularly attractive area into which to expand.
For this purpose it acquired the rights to the Lighthouse system, which has
been developed further over the last four years. Lighthouse is a high
performance real-time trading and risk management product designed to support
treasury derivatives trading operations. Throughout Rolfe & Nolan's
development of Lighthouse, the Board has recognised the high level of
investment needed to create technically complex systems able to operate across
global markets. As Lighthouse has developed, it has become apparent that the
lead times for achieving new sales are longer than originally anticipated and
that the timing of sales is difficult to predict with accuracy. At the same
time, the development costs of Lighthouse have continued to grow and now place
an increasing strain on Rolfe &
5
<PAGE>
Nolan's development and financial resources. As a result, the Board believes
that a number of attractive opportunities to build on the Rolfe & Nolan
Group's core future and options products and services are not being realised.
Although Rolfe & Nolan has recently signed a master agreement for Lighthouse
with a leading US investment bank, the timing and the amounts of licence
payments have yet to be agreed and will have an important influence on the
Rolfe & Nolan Group's results for the year to 28 February 1998. The outcome
for the year will depend substantially on being able to book this and certain
other significant contract income against costs incurred in the financial year
to date. In addition, the Board believes that the Offer may increase the risk
that these contracts will not be concluded before year end. In the event that
these contracts are not booked by 28 February 1998, the Board of Rolfe & Nolan
believes that trading for the current financial year would be more likely to
result in a loss than a profit for the Rolfe & Nolan Group. This would be a
materially worse outcome than the current stock market expectations.
In the event that the Offer does not become or is not declared unconditional
in all respects, the Board believes that as an independent company, Rolfe &
Nolan would need a substantial further equity capital raising in the early
part of 1998 to resource its continued development costs.
Against this background, the Board of Rolfe & Nolan has for some time been
exploring the strategic options available to maximize shareholder value whilst
managing risk.
Following an approach from SunGard in the Autumn of 1997, discussions have led
to agreement on the terms of the Offer which your Board considers is fair and
reasonable having in particular taken into account the constraints facing
Rolfe & Nolan as an independent company.
The Board considers that SunGard represents a partner which has both the
financial and development resources to enable Rolfe & Nolan to take full
advantage of the opportunities available to it. The Board believes that the
combination of Rolfe & Nolan's and SunGard's operations and the financial
resources which SunGard can provide will result in a business better able to
offer successful and highly competitive products to customers.
TERMS OF THE OFFER
The formal Offer, which is set out in the letter from Broadview Associates
beginning on page 8 of this Offer Document, is being made on the following
basis:
FOR EACH ROLFE & NOLAN SHARE A FRACTION OF A SHARE OF SUNGARD
COMMON STOCK EQUIVALENT IN VALUE (ON
THE BASIS DESCRIBED BELOW) TO 525P,
SUBJECT TO THE MINIMUM AND MAXIMUM
FRACTIONS REFERRED TO BELOW.
The exact fraction of a share of SunGard Common Stock to be issued for each
Rolfe & Nolan Share as consideration under the Offer will depend on the Final
SunGard Price and the Final Exchange Rate. Such fraction will be calculated
(rounded to 4 decimal places) by dividing 525p by the sterling equivalent in
pence (calculated at the Final Exchange Rate) of the Final SunGard Price,
subject to a maximum of 0.3100 of a share of SunGard Common Stock and a
minimum of 0.2750 of a share of SunGard Common Stock.
Rolfe & Nolan Shareholders should note that this basis of calculation provides
them with a certain degree of protection against a fall in the sterling
equivalent value of the Offer in that changes in the market price of SunGard
Common Stock prior to the day on which the Offer becomes or is declared
unconditional in all respects will not affect the sterling equivalent value of
the Offer, which will remain constant at 525p, unless:
- -- the sterling equivalent of the Final SunGard Price is more than
(Pounds)19.09 ($31.36 at the Illustrative Exchange Rate) in which case the
sterling equivalent value of the Offer will rise; or
- -- the sterling equivalent of the Final SunGard Price is less than
(Pounds)16.94 ($27.82 at the Illustrative Exchange Rate) in which case the
sterling equivalent value of the Offer will fall.
6
<PAGE>
Based on the closing SunGard Common Stock price on the NYSE on 4 February
1998, the last dealing day before the announcement of the Offer, and the
Illustrative Exchange Rate, the fraction of a share of SunGard Common Stock to
be issued for each Rolfe & Nolan Share would be 0.2765 and the sterling
equivalent value of the Offer would be 525p per Rolfe & Nolan Share. This
values the whole of Rolfe & Nolan at approximately (Pounds)71.2 million on a
fully diluted basis. Based on the closing SunGard Common Stock price on the
NYSE on 18 February 1998, the last practicable date prior to the posting of
this Offer Document, (and the Illustrative Exchange Rate), the fraction of a
share of SunGard Common Stock to be issued for each Rolfe & Nolan Share would
be 0.2750 and the sterling equivalent of the Offer would be 534p per Rolfe &
Nolan Share. This values the whole of Rolfe & Nolan at approximately
(Pounds)72.4 million on a fully diluted basis.
An Offer value of 525p per Rolfe & Nolan Share represents a premium of 45.8
per cent. over the closing middle market price of 360p per Rolfe & Nolan Share
as derived from SEDOL on 4 February 1998, the last dealing day before the
announcement of the Offer.
DEALING FACILITY
The New SunGard Common Stock will be traded on the NYSE but will not be listed
or traded on the LSE. Since Rolfe & Nolan Shareholders may not be able to deal
easily or economically in the US market, Rolfe & Nolan Shareholders will
shortly receive information regarding a dealing facility developed by IRG
Trustees Limited utilising the services of Merrill Lynch International. This
arrangement will enable Rolfe & Nolan Shareholders who wish to sell all of
their New SunGard Common Stock to deal through Merrill Lynch International at
a competitive rate of commission.
UNDERTAKINGS TO ACCEPT THE OFFER
Your directors have given irrevocable undertakings to accept the Offer in
respect of their entire beneficial holdings amounting in total to 1,020,020
Rolfe & Nolan Shares, representing approximately 7.7 per cent. of Rolfe &
Nolan's issued share capital.
MANAGEMENT AND EMPLOYEES
The Board of SunGard has given assurances that the existing employment rights,
including pension rights, of employees of the Rolfe & Nolan Group will be
fully safeguarded.
ROLFE & NOLAN SHARE OPTION SCHEMES
The Offer extends to any Rolfe & Nolan Shares which are issued or
unconditionally allotted while the Offer remains open for acceptance,
including any such shares unconditionally allotted or issued as a result of
the exercise of options under the Rolfe & Nolan Share Option Schemes. If the
Offer becomes or is declared unconditional in all respects, under the rules of
the Rolfe & Nolan Share Option Schemes all outstanding options will
(irrespective of their date of grant) become exercisable.
To the extent that options under the Rolfe & Nolan Share Option Schemes are
not exercised, and if the Offer becomes or is declared unconditional in all
respects, SunGard will in due course make appropriate proposals reflecting the
terms of the Offer to Optionholders.
ACTION TO BE TAKEN TO ACCEPT THE OFFER
The procedure for acceptance of the Offer is set out under "Procedure for
Acceptance" in paragraph 13 of the letter from Broadview Associates included
in this Offer Document. IN ORDER TO ACCEPT THE OFFER, YOU SHOULD RETURN YOUR
COMPLETED FORM OF ACCEPTANCE IN ACCORDANCE WITH THE INSTRUCTIONS THEREON AS
SOON AS POSSIBLE AND, IN ANY EVENT, SO AS TO BE RECEIVED NOT LATER THAN 3.00
P.M. ON 20 MARCH 1998.
TAXATION
Your attention is drawn to the discussion under "Taxation" in paragraph 12 of
the letter from Broadview Associates included in this Offer Document. IF YOU
ARE IN ANY DOUBT AS TO YOUR TAX POSITION, YOU SHOULD CONSULT YOUR INDEPENDENT
PROFESSIONAL ADVISER.
7
<PAGE>
RECOMMENDATION
YOUR DIRECTORS, WHO HAVE BEEN SO ADVISED BY CLOSE BROTHERS, CONSIDER THE TERMS
OF THE OFFER TO BE FAIR AND REASONABLE. IN PROVIDING ADVICE TO THE DIRECTORS
OF ROLFE & NOLAN, CLOSE BROTHERS HAS TAKEN INTO ACCOUNT THE COMMERCIAL
ASSESSMENTS OF THE DIRECTORS OF ROLFE & NOLAN.
YOUR DIRECTORS THEREFORE UNANIMOUSLY RECOMMEND YOU TO ACCEPT THE OFFER, AS
THEY HAVE IRREVOCABLY UNDERTAKEN TO DO IN RESPECT OF THEIR ENTIRE BENEFICIAL
HOLDINGS AMOUNTING TO 1,020,020 ROLFE & NOLAN SHARES, REPRESENTING
APPROXIMATELY 7.7 PER CENT. OF THE ISSUED SHARE CAPITAL OF ROLFE & NOLAN.
AS WITH ANY INVESTMENT IN SHARES OF A HIGH TECHNOLOGY COMPANY, INCLUDING ROLFE
& NOLAN, AN INVESTMENT IN SUNGARD COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
ROLFE & NOLAN SHAREHOLDERS SHOULD HAVE REGARD TO THE FACTORS REFERRED TO UNDER
"INFORMATION REGARDING SUNGARD--RISK FACTORS" BEGINNING ON PAGE 24 OF THIS
OFFER DOCUMENT WHEN MAKING FUTURE INVESTMENT DECISIONS WITH RESPECT TO NEW
SUNGARD COMMON STOCK.
Yours sincerely
Tim Hearley
Chairman
8
<PAGE>
[BROADVIEW ASSOCIATES LOGO]
20 February 1998
To Rolfe & Nolan Shareholders and, for information purposes only, to
participants in the Rolfe & Nolan Share Option Schemes
Dear Shareholder
RECOMMENDED OFFER FOR ROLFE & NOLAN PLC
1. INTRODUCTION
It was announced on 5 February 1998 that the Boards of SunGard and Rolfe &
Nolan had reached agreement on the terms of a recommended share for share
offer to be made by Broadview Associates on behalf of SunGard for the whole of
the share capital of Rolfe & Nolan. This letter contains the formal offer from
Broadview Associates on behalf of SunGard.
YOUR ATTENTION IS DRAWN TO THE LETTER FROM YOUR CHAIRMAN, TIM HEARLEY,
BEGINNING ON PAGE 5 OF THIS OFFER DOCUMENT FROM WHICH YOU WILL SEE THAT THE
BOARD OF ROLFE & NOLAN CONSIDERS THE TERMS OF THE OFFER TO BE FAIR AND
REASONABLE AND UNANIMOUSLY RECOMMENDS ROLFE & NOLAN SHAREHOLDERS TO ACCEPT THE
OFFER.
THE DIRECTORS OF ROLFE & NOLAN AND CERTAIN OTHER PERSONS ASSOCIATED WITH THEM
HAVE GIVEN IRREVOCABLE UNDERTAKINGS TO ACCEPT THE OFFER IN RESPECT OF THEIR
ENTIRE BENEFICIAL HOLDINGS AMOUNTING IN TOTAL TO 1,020,020 ROLFE & NOLAN
SHARES, REPRESENTING APPROXIMATELY 7.7 PER CENT. OF ROLFE & NOLAN'S ISSUED
SHARE CAPITAL.
The Offer is being made to all Rolfe & Nolan Shareholders, including United
States persons. Accordingly, the Offer and this Offer Document are subject to
the requirements of both the Panel and the SEC.
2.THE OFFER
FINANCIAL TERMS
The Offer is being made on, and subject to, the terms and conditions set out
in this Offer Document and the Form of Acceptance on the following basis:
FOR EACH ROLFE & NOLAN SHARE A FRACTION OF A SHARE OF SUNGARD
COMMON STOCK EQUIVALENT IN VALUE (ON
THE BASIS SET OUT BELOW) TO 525P,
SUBJECT TO THE MINIMUM AND MAXIMUM
FRACTIONS REFERRED TO BELOW.
The exact fraction of a share of SunGard Common Stock to be issued for each
Rolfe & Nolan Share as consideration under the Offer will depend on the Final
SunGard Price and the Final Exchange Rate (which will be determined as
described below). Such fraction will be calculated (rounded to 4 decimal
places) by dividing 525p by the sterling equivalent in pence (calculated at
the Final Exchange Rate) of the Final SunGard Price, subject to a maximum of
0.3100 of a share of SunGard Common Stock and a minimum of 0.2750 of a share
of SunGard Common Stock.
This calculation can be represented mathematically (subject to the maximum and
minimum fractions referred to above) as:
Fraction of a share of = 525p
SunGard Common Stock for -----------------------
each Rolfe & Nolan Share sterling equivalent of
the Final SunGard Price
33 Cavendish Square, London W1M 0DS, UK Tel: +44-(0)171-290 8500 Fax: +44-
(0)171-290 8550
BVA Associates Ltd. Registered Office: 33 Cavendish Square, London W1M 0DS
Registered in England 2333826
Regulated by the Securities and Futures Authority
Fort Lee, NJ LONDON Foster City, CA
- --------------------------------------------------------------------------------
9
<PAGE>
The Final SunGard Price will be the average of the closing prices on the NYSE
of a share of SunGard Common Stock for the 20 trading days up to (but
excluding) the day on which the Offer becomes or is declared unconditional in
all respects. The Final Exchange Rate will be the average of mid-points of the
closing spread of the dollar to sterling spot rate, as shown in the Financial
Times (UK Edition), prevailing on the same 20 days.
Based on the closing SunGard Common Stock price on the NYSE on 4 February
1998, the last dealing day before the announcement of the Offer, (and the
Illustrative Exchange Rate), the fraction of a share of SunGard Common Stock
to be issued for each Rolfe & Nolan Share would be 0.2765 and the sterling
equivalent value of the Offer would be 525p per Rolfe & Nolan Share. Based on
the closing SunGard Common Stock price on the NYSE on 18 February 1998, the
last practicable date prior to the posting of this Offer Document, (and the
Illustrative Exchange Rate), the fraction of a share of SunGard Common Stock
to be issued for each Rolfe & Nolan Share would be 0.2750 and the sterling
equivalent of the Offer would be 534p per Rolfe & Nolan Share.
Changes in the market price of SunGard Common Stock prior to the Offer
becoming or being declared unconditional in all respects will not affect the
implied sterling value of the Offer which will remain constant at 525p,
unless:
- --the sterling equivalent of the Final SunGard Price is more than
(Pounds)19.09 ($31.36 at the Illustrative Exchange Rate) in which case the
sterling equivalent value of the Offer will rise; or
- --the sterling equivalent of the Final SunGard Price is less than
(Pounds)16.94 ($27.82 at the Illustrative Exchange Rate) in which case the
sterling equivalent value of the Offer will fall.
The table below illustrates the fraction of a share of SunGard Common Stock
which would be issued in exchange for each Rolfe & Nolan Share (and the
implied sterling value of the Offer), assuming the Final Exchange Rate is the
same as the Illustrative Exchange Rate, on the basis of the following possible
Final SunGard Prices:
<TABLE>
<CAPTION>
FINAL FRACTION
SUNGARD PRICE OF A SHARE OF
(STERLING SUNGARD COMMON
EQUIVALENT AT STOCK FOR EACH
THE ILLUSTRATIVE ROLFE & IMPLIED VALUE
FINAL SUNGARD PRICE EXCHANGE RATE) NOLAN SHARE OF THE OFFER
------------------- ---------------- --------------- --------------
<S> <C> <C> <C>
$33.00 (Pounds)20.09 0.2750 553P
$32.00 (Pounds)19.48 0.2750 536P
-------------------------------------------------------------------------
$31.36 (Pounds)19.09 0.2750 525P
$31.00 (Pounds)18.87 0.2782 525P
$30.00 (Pounds)18.26 0.2874 525P
$29.00 (Pounds)17.66 0.2973 525P
$28.00 (Pounds)17.05 0.3080 525P
$27.82 (Pounds)16.94 0.3100 525P
-------------------------------------------------------------------------
$27.00 (Pounds)16.44 0.3100 510P
$26.00 (Pounds)15.83 0.3100 491P
</TABLE>
There will be no adjustment to the fraction of a share of SunGard Common Stock
to be issued in exchange for each Rolfe & Nolan Share for any changes in the
price of SunGard Common Stock or the dollar to sterling spot rate after the
latest date by reference to which the Final SunGard Price and the Final
Exchange Rate are fixed.
SunGard will announce, on a daily basis through the LSE, commencing on the day
after the posting of this Offer Document and concluding on the day on which
the Offer becomes or is declared unconditional in all respects, the rolling
average closing price on the NYSE of a share of SunGard Common Stock and the
rolling average of the mid-points of the closing spread of the dollar to
sterling spot rate, as shown in the Financial Times (UK Edition), each
calculated in relation to the Reference Period. SunGard will announce the
fraction of SunGard Common Stock that would be issued for each Rolfe & Nolan
Share based on such rolling averages.
The Rolfe & Nolan Shares which are the subject of the Offer will be acquired
fully paid and free from all liens, charges, equitable interests,
encumbrances, rights of pre-emption or other third
10
<PAGE>
party rights of any nature and together with all rights attaching thereto,
including the right to receive all dividends and other distributions declared,
paid or made hereafter.
TREATMENT OF FRACTIONS
If the Offer becomes or is declared unconditional in all respects, fractions
of a share of SunGard Common Stock will not be issued to accepting Rolfe &
Nolan Shareholders who will instead receive from SunGard an amount in cash (in
sterling calculated at the Final Exchange Rate) in lieu of any entitlements to
a fraction of a share of SunGard Common Stock. However, individual
entitlements of less than (Pounds)3.00 will not be paid to Rolfe & Nolan
Shareholders but will be retained for the benefit of the Enlarged SunGard
Group.
SUNGARD COMMON STOCK
The New SunGard Common Stock will be issued credited as fully paid and will
rank PARI PASSU in all respects with the existing SunGard Common Stock,
including the right to any dividends and other distributions declared, paid or
made hereafter. The New SunGard Common Stock will be issued free from all
liens, equities, charges, encumbrances and other interests.
Rolfe & Nolan Shareholders should bear in mind that the sterling value of any
investment in SunGard Common Stock and any dividend income from that
investment (payable in US dollars and subject to US withholding tax) will be
affected by the dollar to sterling exchange rate.
3.DEALING FACILITY
The New SunGard Common Stock will be traded on the NYSE but will not be listed
or traded on the LSE. Since Rolfe & Nolan Shareholders may not be able to deal
easily or economically in the US market, Rolfe & Nolan Shareholders will
shortly receive information regarding a dealing facility developed by IRG
Trustees Limited utilising the services of Merrill Lynch International. This
arrangement will enable Rolfe & Nolan Shareholders who wish to sell all of
their New SunGard Common Stock to deal through Merill Lynch International at a
competitive rate of commission.
4.FINANCIAL EFFECTS OF THE OFFER
CAPITAL VALUE
The following table illustrates the increase in capital value under the Offer
for a holder of 100 Rolfe & Nolan Shares who accepts the Offer if the Offer
becomes or is declared unconditional in all respects. Both columns show the
increase in capital value of 100 Rolfe & Nolan Shares based on the closing
middle market price of 360p as derived from SEDOL of one Rolfe & Nolan Share
on 4 February 1998, the last dealing day before the announcement of the Offer.
The first column shows the increase in capital value based on the sterling
equivalent value of the closing price of SunGard Common Stock on the NYSE of
$31.1875 on 4 February 1998 (the last dealing day before the announcement of
the Offer) and the second column shows the increase in capital value based on
the sterling equivalent of the closing price of SunGard Common Stock on the
NYSE of $31.8750 on 18 February 1998 (the last practicable date prior to the
posting of this Offer Document), in each case at the Illustrative Exchange
Rate.
<TABLE>
<CAPTION>
SUNGARD SUNGARD
COMMON COMMON
STOCK STOCK
CLOSING PRICE CLOSING PRICE
AS OF AS OF
4 FEBRUARY 18 FEBRUARY
1998 1998
-------------- --------------
<S> <C> <C>
Sterling equivalent value of SunGard Common (Pounds)525.0 (Pounds)533.7
Stock issued in exchange for 100 Rolfe &
Nolan Shares under the Offer ................
Market value of 100 Rolfe & Nolan Shares..... (Pounds)360.0 (Pounds)360.0
Increase in value (1)........................ (Pounds)165.0 (Pounds)173.7
Percentage increase (1)...................... 45.8 per cent. 48.3 per cent.
</TABLE>
- --------
(1) No account has been taken of any liability to taxation nor for the
treatment of fractional entitlements to SunGard Common Stock.
11
<PAGE>
INCOME
SunGard intends to continue its policy of retaining earnings for use in its
operations and in the expansion of its business and therefore does not
anticipate paying any cash dividends or making any other form of distribution
of income for the foreseeable future. Historically, SunGard has never paid a
cash dividend.
For the year ended 28 February 1997, a holder of 100 Rolfe & Nolan Shares
would have received net dividend income totalling 550p.
On 17 October 1997 SunGard made certain statements regarding its prospects for
the year ending 31 December 1998. These statements were made in the US within
the "safe harbor" provisions of the US Private Litigation Reform Act 1995. At
the time they were made, SunGard had not sought, nor was it under any
obligation to seek, any independent verification of these statements by its
advisers. Given the uncertainty inherent in seeking to make a statement
regarding its prospects for an unexpired period as long as the year ending 31
December 1998, it is not possible for independent accountants and SunGard's
financial advisers to obtain sufficient comfort on the assumptions underlying
that statement to enable them to report thereon in accordance with the
requirements of the City Code. Accordingly, there can be no assurances that
the financial performance set forth in the statement regarding SunGard's
prospects for the year ending 31 December 1998 will be realised. THEREFORE,
ROLFE & NOLAN SHAREHOLDERS SHOULD PLACE NO RELIANCE WHATSOEVER ON THAT
STATEMENT IN DETERMINING THE ACTION THAT THEY SHOULD TAKE IN RESPECT OF THE
OFFER.
5.ROLFE & NOLAN SHARE OPTION SCHEMES
The Offer extends to any Rolfe & Nolan Shares which are issued or
unconditionally allotted while the Offer remains open for acceptance,
including any such shares unconditionally alotted or issued as a result of the
exercise of options granted under the Rolfe & Nolan Share Option Schemes.
Appropriate proposals reflecting the terms of Offer will be made in due course
to participants in the Rolfe & Nolan Share Option Schemes if the Offer becomes
or is declared unconditional in all respects.
6.ACCOUNTING TREATMENT
POOLING OF INTERESTS
It is a condition of the Offer that SunGard receives a letter from Coopers &
Lybrand L.L.P., SunGard's auditors, dated as of the date which the Offer
becomes or is declared unconditional in all respects, confirming that they
continue to concur with SunGard management's conclusion that the acquisition
of Rolfe & Nolan may be accounted for as a pooling of interests under US GAAP.
Coopers & Lybrand L.L.P. have confirmed to SunGard that they concur with
SunGard management's current conclusion that the acquisition of Rolfe & Nolan
may be accounted for as a pooling of interests under US GAAP.
The Offer is expected to become or be declared unconditional in all respects
during the second quarter of 1998, subject to, amongst other things,
regulatory approval and acceptance by 90 per cent. of Rolfe & Nolan
Shareholders.
AFFILIATE AGREEMENTS
In order that the acquisition of Rolfe & Nolan may be treated as a pooling of
interests under US GAAP, the Directors of Rolfe & Nolan and certain persons
associated with them have entered into Affiliate Agreements with SunGard in
respect of 1,034,020 Rolfe & Nolan Shares (representing approximately 7.8 per
cent. of Rolfe & Nolan's issued share capital). Under the Affiliate
Agreements, the Affiliates agree, unless certain conditions set out in the
Affiliate Agreements are satisfied, not to deal in their Rolfe & Nolan Shares
(other than to accept the Offer) or their New SunGard Common Stock until
SunGard has published financial statements incorporating at least 30 days of
combined operations of SunGard and Rolfe & Nolan.
12
<PAGE>
7.ILLUSTRATIVE COMPARATIVE PER SHARE DATA
The following table illustrates certain historical and pro forma comparative
per share data of SunGard and Rolfe & Nolan (pro forma combined financial
statements for SunGard and Rolfe & Nolan are not included in this Offer
Document due to the immateriality of Rolfe & Nolan to SunGard).
<TABLE>
<CAPTION>
SUNGARD
------------------------------------------------------------------------
Combined with
Combined with Rolfe & Nolan
Historical Per Infinity Pro Forma Per Pro Forma Per
Share Data(/7/)(/9/) Share Data(/2/)(/7/)(/9/) Share Data(/3/)(/6/)(/7/)
-------------------- ------------------------- -------------------------
<S> <C> <C> <C>
Nine months ended
September 30,
1997:
Net
income(/4/).... $0.62 $0.59 $0.59
Book
value(/5/)..... 6.06 5.75 5.66
Cash dividends
declared per
share.......... -- -- 0.01
Nine months ended
September 30,
1996:
Net
income(/4/).... 0.24 0.24 0.25
Book
value(/5/)..... 5.30 4.80 4.71
Cash dividends
declared per
share.......... -- -- 0.01
Year ended
December 31,
1996:
Net
income(/4/).... 0.41 0.41 0.42
Book
value(/5/)..... 5.50 5.21 5.12
Cash dividends
declared per
share.......... -- -- 0.01
Year ended
December 31,
1995:
Net
income(/4/).... 0.61 0.55 0.56
Book
value(/5/)..... 5.04 4.53 4.44
Cash dividends
declared per
share.......... -- -- 0.01
Year ended
December 31,
1994:
Net
income(/4/).... 0.56 0.50 0.50
Book
value(/5/)..... 4.81 4.29 4.20
Cash dividends
declared per
share.......... -- -- 0.01
<CAPTION>
ROLFE & NOLAN(/1/)
----------------------------------------
Pro Forma
Historical Per Equivalent Per
Share Data Share Data(/4/)(/6/)(/8/)
-------------- -------------------------
<S> <C> <C>
Nine months ended
September 30,
1997:
Net
income(/4/).... $0.18 $0.18
Book
value(/5/)..... 1.07 1.75
Cash dividends
declared per
share.......... 0.03 0.01
Nine months ended
September 30,
1996:
Net
income(/4/).... 0.13 0.08
Book
value(/5/)..... 0.79 1.46
Cash dividends
declared per
share.......... 0.03 0.01
Year ended
December 31,
1996:
Net
income(/4/).... 0.22 0.13
Book
value(/5/)..... 0.89 1.59
Cash dividends
declared per
share.......... 0.09 0.01
Year ended
December 31,
1995:
Net
income(/4/).... 0.19 0.17
Book
value(/5/)..... 0.71 1.38
Cash dividends
declared per
share.......... 0.07 0.01
Year ended
December 31,
1994:
Net
income(/4/).... 0.11 0.15
Book
value(/5/)..... 0.62 1.30
Cash dividends
declared per
share.......... 0.06 0.01
</TABLE>
- --------
(1) Pounds sterling amounts have been converted into US dollars at either the
exchange rate at the end of the period presented or the weighted average
exchange rate, as appropriate. A table setting forth the pound-dollar
exchange rate at the end of certain financial periods, the average rate
for each period and the range of high and low rates for each period can be
found on page 31 of this Offer Document.
(2) On January 2, 1998 SunGard merged with Infinity (the "Infinity Merger") in
a stock-for-stock transaction. The pro forma data presents SunGard's
historical data combined with Infinity's historical data assuming the
Infinity Merger had occurred on January 1, 1994.
(3) The pro forma data presents SunGard's historical data combined with Rolfe
& Nolan's historical data assuming the combination of SunGard and Rolfe &
Nolan had occurred on January 1, 1994. The data includes the pro forma
effects of the Infinity Merger as discussed in Note 2 above.
(4) The years ended December 31, 1996 and 1995 include one-time charges for
purchased in-process research and development, merger and other costs of
$51,083,000 and $4,236,000, respectively ($33,468,000 and $4,238,000
after-tax, or $0.39 and $0.05 per share, respectively), and the nine
months ended September 30, 1997 and 1996 include one-time charges for
purchased in-process research and development, merger and other costs of
$9,956,000 and $44,032,000, respectively ($6,143,000 and $28,287,000
after-tax, or $0.07 and $0.33 per share, respectively).
(5) The historical book value per common share is computed by dividing total
stockholders' equity by the number of shares of common stock outstanding
at the end of the period. The pro forma book value per share is computed
by dividing pro forma stockholders' equity by the pro forma number of
shares of common stock as of the end of each of the periods presented.
(6) Excludes merger costs which will be charged to combined operations during
the period in which the combination is consummated. Also excluded are
restructuring costs associated with the integration of SunGard's and Rolfe
& Nolan's operations. An estimate of these costs has not yet been
determined as management is still in the process of finalizing their
plans.
(7) All shares have been adjusted retroactively for the two-for-one stock
splits which occurred in July 1995 and September 1997.
(8) The Rolfe & Nolan per share equivalents are calculated by multiplying the
SunGard combined pro forma per share amounts by 0.3100, the maximum
fraction of a share of SunGard Common Stock that will be exchanged for
each Rolfe & Nolan Share.
(9) Net income and cash dividends declared per share data were calculated
based on the weighted average number of shares and common equivalent
shares outstanding during the period.
13
<PAGE>
8.INFORMATION REGARDING SUNGARD
SunGard is a computer services and software company that specialises in
proprietary investment support systems, comprehensive computer disaster
recovery services and proprietary healthcare information systems. SunGard is a
leading provider of investment support systems to the financial services
industry and a leading provider of comprehensive computer disaster recovery
services. SunGard's business approach is to focus on market niches in which it
has opportunities to develop or acquire leading products and market positions.
SunGard's operations are decentralised, and its management philosophy is one
of "controlled entrepreneurship." SunGard's services are provided through
separate business units. Each business is directed by its own management team
and has its own sales, marketing, product development, operations and customer
support personnel. Overall corporate control and coordination are achieved
through centralised budgeting, financial and legal reporting, cash management
and strategic planning. SunGard believes that this approach has facilitated
more focused marketing, specialised product development, responsive customer
service and highly motivated management.
For the year ended 31 December 1996, SunGard generated income before taxes of
$63.6 million ((Pounds)38.7 million at the Illustrative Exchange Rate) on
revenues of $670.3 million ((Pounds)408.1 million at the Illustrative Exchange
Rate). As of 31 December 1996 SunGard had total stockholders' equity
(shareholders' funds) of $464.6 million ((Pounds)282.9 million at the
Illustrative Exchange Rate). SunGard's preliminary announcement of results for
the year ended 31 December 1997 can be found beginning on page 26 of this
Offer Document.
On 2 January 1998, SunGard completed the acquisition of Infinity by way of an
issue of SunGard Common Stock. Based on the closing price of SunGard Common
Stock of $29.5625 on the NYSE at that date, the shares issued as consideration
for the acquisition had a value of approximately $389 million ((Pounds)237
million at the dollar to sterling exchange rate on that date). Infinity
develops, markets and supports enterprise software solutions for financial
trading and risk management.
SunGard Common Stock is traded on the NYSE under the symbol "SDS" and had a
market capitalisation of approximately $3,256 million ((Pounds)1,982 million
at the Illustrative Exchange Rate) as of 18 February 1998, the latest
practicable date prior ot the posting of this Offer Document, based on the
closing SunGard Common Stock price on the NYSE of $31.875.
Further information on SunGard can be found beginning on page 24.
9.INFORMATION REGARDING ROLFE & NOLAN
Rolfe & Nolan is a supplier of risk management software for global treasury
and capital markets operations and settlement software for the worldwide
derivatives industry. Using leading edge technology, its systems are capable
of satisfying clients' operational needs in these areas across the globe.
Rolfe & Nolan's turnover is primarily derived from its bureaux and facilities
management services related to its settlement software system, which generate
a strong monthly recurring revenue stream. In addition the Rolfe & Nolan Group
licences its software to larger clients for use on their in-house computer
installations and provides ancillary services to its full customer base. The
Rolfe & Nolan Group has data centres in four locations and staff in three time
zones supporting approximately 280 clients in 23 countries.
Rolfe & Nolan's core operation is its futures and options business which is
engaged in the provision and support of settlement software for the futures
and options industry. In the year ended 28 February 1997, this business
accounted for approximately 94 per cent. of the Rolfe & Nolan Group's
turnover.
In 1993 the Rolfe & Nolan Group purchased the intellectual property rights to
the Lighthouse system which it has been developing internally since that time.
Lighthouse is a software product designed to support treasury derivatives
trading operations. It is designed to meet the administration, risk management
and accounting requirements of banks, other financial institutions and
corporates trading treasury and over-the-counter derivatives products, such as
swaps, interest rate options, money market instruments and foreign exchange.
14
<PAGE>
For the year ended 28 February 1997, Rolfe & Nolan's turnover was (Pounds)20.3
million and reported profit before tax was (Pounds)2.8 million. At that date
the Rolfe & Nolan Group's net assets were (Pounds)5.3 million.
Although Rolfe & Nolan has recently signed a master agreement for Lighthouse
with a leading US investment bank, the timing and amounts of licence payments
have yet to be agreed and will have an important influence on the Rolfe &
Nolan Group's results for the year to 28 February 1998. The outcome for the
year will depend substantially on being able to book this and certain other
significant contract income against costs incurred in the financial year to
date. In addition, the Board believes that the announcement of the Offer may
increase the risk that these contracts will not be concluded before the year
end. In the event that these contracts are not booked by 28 February 1998, the
Board of Rolfe & Nolan believes that trading for the current financial year
would be more likely to result in a loss than a profit for the Rolfe & Nolan
Group. This would be a materially worse outcome than current stock market
expectations.
In the event that the Offer does not become or is not declared unconditional
in all respects, the Board believes that as an independent company, Rolfe &
Nolan would need a substantial further equity capital raising in the early
part of 1998 to resource its continued development costs.
10.BACKGROUND TO AND REASONS FOR THE OFFER
BACKGROUND
Since becoming an independent company in the early 1980s, a key element of
SunGard's stated corporate growth strategy has been the active pursuit of
business acquisitions that would complement or expand SunGard's existing
business lines. Both SunGard and Rolfe & Nolan are participants in the
worldwide market of providing trading and risk management software for global
treasury and capital markets operations and settlement software for the
treasury and derivatives industry.
On 3 September 1997, Douglas Bergeron, Chief Executive Officer of the Futures
Systems Division of SunGard's Trading Systems Group, at his request, met with
Peter Day, Chief Executive Officer of Rolfe & Nolan, for a general discussion
of their businesses, at which time Mr. Bergeron suggested that the two
companies explore the possible benefits of a combination of SunGard and Rolfe
& Nolan.
On 14 October 1997, Mr. Bergeron and Cristobal Conde, Chief Executive Officer
of SunGard's Trading Systems Group, met with Mr. Day and Tim Hearley, Rolfe &
Nolan's Chairman, to discuss the possible business synergies that SunGard
perceived might be achieved from a combination involving SunGard and Rolfe &
Nolan, and the possible benefits that such a combination would have to the
companies' respective stockholders and customers. As part of this meeting,
Messrs. Conde and Bergeron discussed the possible steps that could be taken to
pursue the proposed acquisition further.
On 10 November 1997, Richard Tarbox, Vice President--Corporate Development of
SunGard, met with Mr. Hearley for the purpose of discussing SunGard's views on
the range of valuations of Rolfe & Nolan and on potential transaction
structures and process.
On 18 November 1997, Messrs. Conde and Tarbox met with Messrs. Day and Hearley
to further discuss issues of potential business synergies, the benefits of a
combination of the two businesses, organisational and management issues,
ranges of valuations, the form of any potential offer for the shares of Rolfe
& Nolan, and the requirements of making such a potential offer under the City
Code.
Subsequent to this meeting, SunGard engaged Broadview Associates and Rolfe &
Nolan engaged Close Brothers as their respective financial advisers in
connection with discussions regarding a potential offer by SunGard for the
shares of Rolfe & Nolan. On 5 December 1997, a Confidentiality and Standstill
Agreement was executed between the parties. Between 5 December 1997 and
12 December 1997, a series of meetings took place between various senior
officers of SunGard and Rolfe & Nolan, Broadview Associates, Close Brothers,
the firms of Norton Rose and Blank Rome Comisky and McCauley LLP, legal
representatives of SunGard,
15
<PAGE>
Cameron McKenna, legal representatives of Rolfe & Nolan, and Coopers & Lybrand
L.L.P. and Grant Thornton, the independent accountants to SunGard and Rolfe &
Nolan, respectively. The purpose of these meetings was to discuss matters
relating primarily to the terms and structure of any potential offer for Rolfe
& Nolan, regulatory requirements relating to any such formal offer, and the
due diligence investigation to be performed by SunGard in order to assess the
perceived benefits of a potential combination with Rolfe & Nolan.
During a special meeting of its Board of Directors on 18 December 1997,
SunGard's senior management informed the SunGard Board of the preliminary
discussions that had taken place between SunGard and Rolfe & Nolan and their
respective advisers. During this meeting, SunGard's Board of Directors
authorised SunGard's management to continue to pursue discussions with Rolfe &
Nolan concerning a potential offer.
During a meeting of the Rolfe & Nolan Board of Directors on 12 January 1998,
the discussions that had taken place between SunGard and Rolfe & Nolan and
their respective advisers were discussed. During this meeting, the Rolfe &
Nolan Board of Directors agreed to continue discussions with SunGard.
On 6, 7, 15 and 21 of January 1998, Messrs. Tarbox and Hearley had a series of
meetings, certain of which were attended by representatives of Broadview
Associates and Close Brothers, to discuss issues of the potential merits of a
combination of SunGard and Rolfe & Nolan and of a range of valuation of Rolfe
& Nolan.
On 27 January 1998, SunGard's Board of Directors held a special meeting in
which James Mann, SunGard's Chairman and Chief Executive Officer, presented
the proposed acquisition of Rolfe & Nolan. After discussion of the proposed
valuation of Rolfe & Nolan, the potential impact on SunGard's 1998 earnings
per share and future earnings, SunGard's Board of Directors authorised
management to proceed to negotiate the terms of a formal offer for Rolfe &
Nolan and to take steps necessary to complete such a transaction.
During a series of meetings between 27 January 1998 and 5 February 1998, the
financial and legal advisers of SunGard and Rolfe & Nolan met to discuss the
required documentation necessary for a formal offer by SunGard for Rolfe &
Nolan.
On 2 February 1998, the Rolfe & Nolan Board of Directors held a meeting at
which it agreed to take the steps necessary to finalise the terms of a formal
offer for Rolfe & Nolan from SunGard and to take steps necessary to complete
such a transaction.
On 5 February 1998, SunGard and Rolfe & Nolan issued a press release
announcing the terms of the Offer.
SUNGARD'S REASONS FOR THE OFFER
SunGard's Board of Directors has determined that the terms of the Offer are
fair to, and in the best interests of, SunGard and its stockholders. In
reaching its determination, SunGard's Board of Directors consulted with
management, as well as its financial adviser, legal counsel and independent
accountants, and gave significant consideration to a number of factors. The
SunGard Board of Directors believes that the acquisition of Rolfe & Nolan will
be beneficial to SunGard and its stockholders for the following reasons:
SunGard seeks to grow both internally and through the acquisition of
complementary businesses. Rolfe & Nolan's products will complement and
broaden SunGard's existing product lines and customer bases in the
investment support systems business.
SunGard sells its computer services and software to the financial services
industry and believes that Rolfe & Nolan's products will enhance SunGard's
ability to service that industry. The demand for trading and risk
management systems by the financial services industry has grown
significantly over the past several years. Financial institutions
worldwide have increasingly invested financial and other resources in the
development and acquisition of trading and risk management technology.
SunGard believes that the addition of Rolfe & Nolan's products should
assist SunGard to take advantage of this trend and should help further
establish SunGard as a leading provider of trading and risk management
solutions software.
16
<PAGE>
The Offer is also in response to and in anticipation of significant
changes in the marketplace as a result of consolidation of the financial
services industry. Such consolidation increases the purchasing power of
customers and imposes increased pressure on vendors that supply and
support software products and services to reduce their costs. The
combination of the technologies and product development resources of Rolfe
& Nolan and SunGard should enable SunGard to respond more effectively to
the demand for technological change and continuing product development
relating to software products for the financial services industry.
SunGard believes there is significant potential enhancement of the
strategic and market position of the combined companies beyond that
achievable by SunGard alone.
In addition to the reasons set forth above, in the course of its deliberations
concerning the combination of SunGard and Rolfe & Nolan, the SunGard Board of
Directors consulted with SunGard's management, legal counsel and accountants
and reviewed a number of other factors relevant to the combination, including:
Information concerning the business, assets, operations, properties,
management, financial condition, operating results, competitive position
and prospects of SunGard and Rolfe & Nolan;
The historical market prices and trading information with respect to
SunGard Common Stock and Rolfe & Nolan Shares;
The expected tax and accounting treatment of the combination;
Reports from legal counsel on specific terms of the Offer; and
SunGard's belief that the management styles and corporate cultures of the
two companies would be complementary.
The SunGard Board of Directors also considered a number of potentially
negative factors in its deliberations concerning the combination, including:
The possibility of management disruption associated with the combination
and the risk that key technical and management personnel of Rolfe & Nolan
or SunGard might not continue with Rolfe & Nolan or SunGard; and
The possibility that the combination might adversely affect SunGard's or
Rolfe & Nolan's relationship with certain of their respective customers;
and
The risks that the potential benefits of the combination might not be
realised.
The SunGard Board of Directors concluded, however, that the benefits of the
combination to SunGard and its stockholders outweighed the risks associated
with the combination.
The foregoing discussion of the information and factors considered by the
SunGard Board of Directors is not intended to be exhaustive, but is believed
to include all material factors considered by the SunGard Board of Directors.
In view of the wide variety of factors considered by the SunGard Board of
Directors, the SunGard Board of Directors did not find it practicable to
quantify or otherwise assign relative weight to the specific factors
considered. However, after taking into account all of the factors set forth
above, the SunGard Board of Directors believed that the combination was fair
to, and in the best interests of, SunGard and its stockholders and that
SunGard should proceed with the Offer.
11.EMPLOYEES
The existing employment rights, including pension rights, of employees of the
Rolfe & Nolan Group will be fully safeguarded.
12.TAXATION
The following discussion of taxation is included for general information and
only relates to the position of a person who is either a UK Resident or a US
Resident and who is the absolute beneficial owner of Rolfe & Nolan Shares. In
particular, the following does not discuss all of the
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tax consequences that may be relevant to a Rolfe & Nolan Shareholder in light
of such shareholder's particular circumstances or to holders subject to
special rules, such as life insurance companies, dealers in securities, or US
Residents whose functional currency is not the US dollar. The explanation of
US and UK tax laws set out below is based on laws and, in the case of the UK,
practice at present in effect, including the Treaty, and, in the case of both
the US and the UK, judicial and administrative precedent as of 5 February
1998. This explanation is subject to any changes in those laws, practice (in
the case of the UK) and precedent occurring after that date and does not
discuss any tax laws other than those of the US and the UK. Rolfe & Nolan
Shareholders who are in any doubt as to their taxation position or are subject
to taxation in any jurisdiction other than the US or the UK are urged to
consult their professional advisers as to the specific tax consequences to
them of the Offer.
The comments on US tax consequences are based upon an opinion provided by
Blank Rome Comisky & McCauley LLP, SunGard's US counsel. The comments on UK
tax consequences are based upon an opinion provided by Norton Rose, SunGard's
UK counsel, and assume that SunGard is tax resident only in the U.S.
TAXATION OF UK RESIDENTS
UK Taxation
The following discussion summarizes for a Rolfe & Nolan Shareholder who is a
UK Resident and who holds Rolfe & Nolan Shares as an investment the principal
UK tax consequences associated with the exchange of securities pursuant to the
Offer.
Taxation of Capital Gains. The exchange of Rolfe & Nolan Shares by a Rolfe &
Nolan Shareholder in return for New SunGard Common Stock will not be treated
as a disposal of Rolfe & Nolan Shares for the purposes of UK taxation of
capital gains, provided that either the Rolfe & Nolan Shareholder, together
with persons connected with him, owns not more than 5 per cent. of, or of any
class of, the shares in or debentures of Rolfe & Nolan or the clearance from
the UK Inland Revenue referred to below is granted. The New SunGard Common
Stock will instead be treated as the same asset as the Rolfe & Nolan Shares,
acquired as and when the Rolfe & Nolan Shares were acquired.
SunGard has applied to the UK Inland Revenue for a tax clearance under section
138 of the Taxation of Chargeable Gains Act 1992 which, if granted, will
confirm that the Inland Revenue is satisfied that the exchange of securities
pursuant to the Offer is being effected for bona fide commercial reasons and
not for tax avoidance purposes.
The Directors of SunGard believe that this tax clearance should be
forthcoming, but the Offer is not conditional upon this tax clearance being
granted.
A Rolfe & Nolan Shareholder will, to the extent that he receives cash in lieu
of a fraction of a share of New SunGard Common Stock, be treated as making a
part disposal of his Rolfe & Nolan Shares which may, depending upon his
individual circumstances, give rise to a liability to UK taxation of capital
gains.
A subsequent disposal of New SunGard Common Stock by a UK Resident may give
rise to a liability to UK taxation of capital gains.
Stamp Duty and Stamp Duty Reserve Tax. No UK stamp duty or stamp duty reserve
tax will be payable by a Rolfe & Nolan Shareholder on the transfer of Rolfe &
Nolan Shares to SunGard. Any liability to UK stamp duty or stamp duty reserve
tax on the transfer of such Rolfe & Nolan Shares to SunGard will be borne by
SunGard. No UK stamp duty or stamp duty reserve tax will be payable on the
issue of New SunGard Common Stock.
Dividends. A UK Resident will generally be liable to income tax or corporation
tax in the UK on the aggregate of any dividend received from SunGard and any
tax withheld at source in the US (see below under "Taxation of UK Residents--
US Taxation") and any tax withheld in the UK (see below). In computing that
liability to taxation, credit will be given for any tax withheld in the US and
any tax withheld in the UK. No repayment of the US tax credit will be
available to a UK Resident. In the case of a corporate UK Resident which
controls 10 per cent. or more of the voting stock of SunGard, credit will also
be available for underlying tax against UK taxes in respect of the dividend.
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Special rules apply to UK Residents who are not domiciled in the UK.
An agent in the UK who, on behalf of a UK Resident, collects a dividend paid
by SunGard may be required to withhold a sum on account of UK income tax or
corporation tax, currently at the rate of 20 per cent. Regulations, however,
allow credit to be given for tax withheld in the US, thereby reducing the
aggregate withholding to 20 per cent. of the gross dividend.
Inheritance Tax. Where SunGard Common Stock is held by an individual who is
neither domiciled nor deemed to be domiciled in the UK, no liability to UK
inheritance tax will arise. Where SunGard Common Stock is held by an
individual who is either domiciled or deemed to be domiciled in the UK,
liability to UK inheritance tax may arise on the death of, or on a gift (or
disposal at an undervalue) of the SunGard Common Stock by, that individual.
US Taxation
UK persons acquiring SunGard Common Stock will be subject to US taxation on
dividends received from SunGard. Generally, such dividends would be subject to
a 30 per cent. withholding tax. However, under the terms of the Treaty, the
rate of withholding tax will be reduced to 15 per cent. of the gross dividend
or, in the case of any corporate UK resident shareholder of SunGard
controlling at least 10 per cent. of the voting stock of SunGard, the rate of
withholding tax will be reduced to 5 per cent. of the gross dividend. Such tax
will be withheld by SunGard in its capacity as withholding agent. No
withholding taxes will apply if the dividends received are effectively
connected with a US trade or business of the shareholder in the US; rather,
the dividends will be subject to US tax at graduated rates.
Eligibility for the reduced rate of withholding or exemption from withholding
tax on effectively connected income tax may be contingent on the UK
shareholder complying with certain formal Internal Revenue Service
requirements including, but not limited to, providing SunGard with valid
documentation of non-US residency.
A person who is not a US Resident generally will not be subject to US income
tax on a gain on the sale of SunGard Common Stock unless such gain is
effectively connected with the conduct of a US trade or business. However, if
the non-resident is in the US for more than 183 days during the year in
question they could be taxed at 30 per cent. on the gain.
TAXATION OF US RESIDENTS
UK Taxation
The following discussion summarizes for a Rolfe & Nolan Shareholder who is a
US Resident, but not a UK Resident, the principal UK tax consequences
associated with the exchange of securities pursuant to the Offer.
Taxation of Capital Gains. The exchange of Rolfe & Nolan Shares by a Rolfe &
Nolan Shareholder in return for New SunGard Common Stock will not be subject
to the regime governing UK taxation of capital gains unless, at the time of
the disposal, the Rolfe & Nolan Shareholder carries on a business in the UK
through a branch or agency, and the Rolfe & Nolan Shares are or have been
used, held or acquired for the purposes of such branch or agency, in which
event the comments contained in "Taxation of UK Residents--Taxation of Capital
Gains" will apply in the same way as they apply to UK Residents.
Stamp Duty and Stamp Duty Reserve Tax. No UK stamp duty or stamp duty reserve
tax will be payable by a Rolfe & Nolan Shareholder on the transfer of Rolfe &
Nolan Shares to SunGard. Any liability to UK stamp duty or stamp duty reserve
tax on the transfer of such Rolfe & Nolan Shares to SunGard will be borne by
SunGard. No UK stamp duty or stamp duty reserve tax will be payable on the
issue of New SunGard Common Stock.
Dividends. Dividends, if any, paid on SunGard Common Stock to a person who is
not a UK Resident will not be subject to UK tax unless that person carries on
a business in the UK through a branch or agency and the SunGard Common Stock
is effectively connected with that branch or agency.
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US Taxation
The exchange by Rolfe & Nolan Shareholders of Rolfe & Nolan Shares for shares
of SunGard Common Stock pursuant to the Offer will be treated as a
"reorganization" as described in Section 368(a) of the IRC. As a result, a
Rolfe & Nolan Shareholder will not recognize gain or loss on the exchange of
Rolfe & Nolan Shares pursuant to the Offer and will have an aggregate basis in
the SunGard Common Stock received in exchange for Rolfe & Nolan Shares equal
to such Rolfe & Nolan Shareholder's basis in the Rolfe & Nolan Shares. Cash
received in lieu of a fraction of a share of SunGard Common Stock will result
in taxable gain or loss equal to the difference between the cash and the Rolfe
& Nolan Shareholder's basis in the fractional shares. The holding period of
shares of SunGard Common Stock acquired in exchange for Rolfe & Nolan Shares
in the Offer will include the Rolfe & Nolan Shareholder's holding period in
the Rolfe & Nolan Shares.
Distributions, if any, paid with respect to SunGard Common Stock to a former
Rolfe & Nolan Shareholder will be treated as ordinary dividend income to the
extent of SunGard's current or accumulated earnings and profits, then as a
return of capital to the extent of tax basis, and then as gain from the sale
of stock. In the case of corporate holders, such distributions, to the extent
they are treated as ordinary dividend income, will generally qualify for a
dividends-received deduction of 70 to 80 per cent. of the amount of the
dividend.
Upon the sale or exchange of SunGard Common Stock, a former Rolfe & Nolan
Shareholder will have taxable capital gain or loss equal to the difference
between the amount realised from the sale or exchange and such holder's tax
basis in the shares, assuming that the shares of SunGard Common Stock are held
as a capital asset on the day of the sale or exchange.
"Backup" withholding and information reporting requirements apply to certain
payments of dividends and of proceeds from the sale of stock by certain non-
corporate US Residents. SunGard, its agent, a broker or any paying agent, as
the case may be, will be required to withhold from any payment that is subject
to backup withholding a tax equal to 31 per cent. of such payment if the US
Resident fails to furnish his taxpayer identification number (social security
number or employer identification number), to certify that such holder is not
subject to backup withholding or to comply otherwise with the applicable
requirements of the backup withholding rules. Any amounts withheld under the
backup withholding rules from a payment to a US Resident would be allowed as a
refund or a credit against such US Resident's US federal income tax if the
required information is furnished to the Internal Revenue Service.
13.PROCEDURE FOR ACCEPTANCE
THIS SECTION SHOULD BE READ TOGETHER WITH THE NOTES ON THE FORM OF ACCEPTANCE.
You should note that, if you hold Rolfe & Nolan Shares in both certificated
form and uncertificated form (that is, in CREST), you should complete a
separate Form of Acceptance for each holding. If you hold Rolfe & Nolan Shares
in uncertificated form, but under different member account IDs, you should
complete a separate Form of Acceptance in respect of each member account ID.
Similarly, if you hold Rolfe & Nolan Shares in certificated form but under
different designations, you should complete a separate Form of Acceptance in
respect of each designation.
TO ACCEPT THE OFFER
To accept the Offer, the Form of Acceptance must be completed and returned,
whether or not your Rolfe & Nolan Shares are in CREST. You should complete
Boxes 1 and 3 and (if your Rolfe & Nolan Shares are in CREST) Box 4, and in
all cases sign Box 2 of the Form of Acceptance in the presence of a witness,
who should also sign in accordance with the instructions printed therein.
RETURN OF FORM ACCEPTANCE
The completed Form of Acceptance, together, if your Rolfe & Nolan Shares are
in certificated form, with your share certificate(s) for such Rolfe & Nolan
Shares and/or other document(s) of title, should be returned by post or
(during normal business hours) by hand to IRG Plc, Balfour
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House, 390-398 High Road, Ilford, Essex IG1 1NQ AS SOON AS POSSIBLE BUT IN ANY
EVENT SO AS TO BE RECEIVED NOT LATER THAN 3:00 P.M. ON 20 MARCH 1998. A reply-
paid envelope is enclosed for your convenience and may be used by Rolfe &
Nolan Shareholders for returning the Form of Acceptance within the UK. No
acknowledgment of receipt of documents will be given. The instructions printed
on the Form of Acceptance shall be deemed to form part of the terms of the
Offer.
SHARES IN UNCERTIFICATED FORM (THAT IS, IN CREST)
If your Rolfe & Nolan Shares are in uncertificated form, you should insert in
Box 4 of the enclosed Form of Acceptance the participant ID and member account
ID under which such shares are held by you in CREST and otherwise complete and
return the Form of Acceptance as described above. In addition, you should take
(or procure to be taken) the action set out below to transfer the Rolfe &
Nolan Shares in respect of which you wish to accept the Offer to an escrow
balance, specifying IRG Plc (in its capacity as a CREST participant under its
participant ID referred to below) as the escrow agent, as soon as possible AND
IN ANY EVENT SO THAT THE TRANSFER TO ESCROW SETTLES NOT LATER THAN 3:00 P.M.
ON 20 MARCH 1998.
IF YOU ARE A CREST SPONSORED MEMBER, YOU SHOULD REFER TO YOUR CREST SPONSOR
BEFORE TAKING ANY ACTION. Your CREST sponsor will be able to confirm details
of your participant ID and the member account ID under which your Rolfe &
Nolan Shares are held. In addition, only your CREST sponsor will be able to
send the TTE instruction to CRESTCo in relation to your Rolfe & Nolan Shares.
You should send (or, if you are a CREST sponsored member, procure that your
CREST sponsor sends) a TTE instruction to CRESTCo which must be properly
authenticated in accordance with CRESTCo's specifications and which must
contain, in addition to the other information that is required for a TTE
instruction to settle in CREST, the following details:
. the number of Rolfe & Nolan Shares to be transferred to an escrow
balance;
. your member account ID. This must be the same member account ID as the
member account ID that is inserted in Box 4 of the Form of Acceptance;
. your participant ID. This must be the same participant ID as the
participant ID that is inserted in Box 4 of the Form of Acceptance;
. the participant ID of the escrow agent, IRG, in its capacity as a
CREST receiving agent. This is RA06;
. the member account ID of IRG. This is ROLF;
. the Form of Acceptance Reference Number. This is the Reference Number
that appears on page 3 of the Form of Acceptance. This Reference
Number should be inserted in the first eight characters of the shared
note field on the TTE instruction. Such insertion will enable IRG to
match the transfer to escrow to your Form of Acceptance. You should
keep a separate record of this Reference Number for future reference;
and
. the intended settlement date. This should be as soon as possible and
in any event not later than 20 March 1998.
After settlement of the TTE instruction, you will not be able to access the
Rolfe & Nolan Shares concerned in CREST for any transaction or charging
purposes. If the Offer becomes or is declared unconditional in all respects,
IRG will transfer the Rolfe & Nolan Shares concerned to itself in accordance
with paragraph (e) of Part C of "Appendix I--Conditions and Further Terms of
the Offer."
You are recommended to refer to the CREST Manual published by CRESTCo for
further information on the CREST procedure outlined above. For ease of
processing, you are requested, wherever possible, to ensure that a Form of
Acceptance relates to only one transfer to escrow.
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If no Form of Acceptance Reference Number, or an incorrect Form of Acceptance
Reference Number, is included on the TTE instruction, SunGard may treat any
amount of Rolfe & Nolan Shares transferred to an escrow balance in favour of
IRG specified above from the participant ID and member account ID identified
in the TTE instruction as relating to any Form of Acceptance which relates to
the same member account ID and participant ID (up to the amount of Rolfe &
Nolan Shares inserted or deemed to be inserted on the Form of Acceptance
concerned).
YOU SHOULD NOTE THAT CRESTCO DOES NOT MAKE AVAILABLE SPECIAL PROCEDURES, IN
CREST, FOR ANY PARTICULAR CORPORATE ACTION. NORMAL SYSTEM TIMINGS AND
LIMITATIONS WILL THEREFORE APPLY IN CONNECTION WITH A TTE INSTRUCTION AND ITS
SETTLEMENT. YOU SHOULD THEREFORE ENSURE THAT ALL NECESSARY ACTION IS TAKEN BY
YOU (OR BY YOUR CREST SPONSOR) TO ENABLE A TTE INSTRUCTION RELATING TO ROLFE &
NOLAN SHARES TO SETTLE PRIOR TO 3:00 P.M. ON 20 MARCH 1998. IN THIS CONNECTION
YOU ARE REFERRED IN PARTICULAR TO THOSE SECTIONS OF THE CREST MANUAL
CONCERNING PRACTICAL LIMITATIONS OF THE CREST SYSTEM AND TIMINGS.
SunGard will make an appropriate announcement if any of the details contained
under "Procedure for Acceptance--Shares in Uncertificated Form (that is, in
CREST)" or this paragraph 13 alter for any reason.
SHARE CERTIFICATES NOT READILY AVAILABLE OR LOST
If your Rolfe & Nolan Shares are in certificated form but your share
certificate(s) and/or other document(s) of title is/are not readily available
or is/are lost, the relevant Form of Acceptance should nevertheless be
completed, signed and returned as stated above so as to arrive not later than
3:00 p.m. on 20 March 1998, together with any share certificate(s) and/or
other document(s) of title that you have available, accompanied by a letter
stating that the balance will follow or that you have lost one or more of your
share certificate(s) and/or document(s) of title. You should then arrange for
the relevant share certificate(s) and/or other document(s) of title to be
forwarded as soon as possible thereafter. No acknowledgment of receipt of
documents will be given. In the case of loss, you should write as soon as
possible to Rolfe & Nolan's registrars, IRG Plc, Balfour House, 390-398 High
Road, Ilford, Essex IG1 1NQ, for a letter of indemnity for lost share
certificate(s) and/or other document(s) of title which, when completed in
accordance with the instructions given, should be returned to IRG Plc at the
address referred to above.
DEPOSITS OF ROLFE & NOLAN SHARES INTO, AND WITHDRAWALS OF ROLFE & NOLAN
SHARES FROM, CREST
Normal CREST procedures (including timings) will be applied in relation to any
Rolfe & Nolan Shares that are, or are to be, converted from uncertificated to
certificated form, or from certificated to uncertificated form, during the
course of the Offer (whether any such conversion arises as a result of a
transfer of Rolfe & Nolan Shares or otherwise). Rolfe & Nolan Shareholders who
are proposing so to convert any such shares are recommended to ensure that the
conversion procedure is implemented in sufficient time to enable the person
holding or acquiring the shares as a result of the conversion to take all
necessary steps in connection with an acceptance of the Offer (in particular,
as regards delivery of share certificate(s) and/or other document(s) of title
or transfers to an escrow balance as described above) prior to 3:00 p.m. on 20
March 1998.
VALIDITY OF ACCEPTANCE
Subject to provisions of the City Code and without prejudice to paragraph 5 of
Part B of "Appendix I--Conditions and Further Terms of the Offer", SunGard
reserves the right to treat as valid any acceptance of the Offer which is not
entirely in order or which is not accompanied by the relevant transfer to
escrow or (as applicable) the relevant share certificate(s) and/or other
document(s) of title. In that event, no shares of SunGard Common Stock will be
issued, and no payment of cash made, under the Offer until after the relevant
transfer to escrow has settled or (as applicable) the relevant share
certificate(s) and/or other document(s) of title or indemnities satisfactory
to SunGard have been received.
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OVERSEAS SHAREHOLDERS
The attention of shareholders who are citizens or residents of jurisdictions
outside the United Kingdom is drawn to paragraph 7 of Part B and Part C of
"Appendix I--Conditions and Further Terms of the Offer" and to the relevant
provisions of the Form of Acceptance, including Box 5.
FORMS OF ACCEPTANCE SHOULD BE RETURNED AS SOON AS POSSIBLE AND IN ANY EVENT SO
AS TO BE RECEIVED BY NO LATER THAN 3:00 P.M. (UK TIME) ON 20 MARCH 1998.
IF YOU ARE IN ANY DOUBT AS TO THE PROCEDURE FOR ACCEPTANCE, PLEASE CONTACT IRG
PLC BY TELEPHONE ON 0181 639 2000 OR AT THE ADDRESS REFERRED TO ABOVE. YOU ARE
REMINDED THAT, IF YOU ARE A CREST MEMBER, YOU SHOULD CONTACT YOUR CREST
SPONSOR BEFORE TAKING ANY SPONSORED ACTION.
14.SETTLEMENT
Subject to the Offer becoming or being declared unconditional in all respects
and, in the case of Rolfe & Nolan Shareholders who are citizens, nationals or
residents of jurisdictions outside the UK or who are in Canada, Japan or
Australia, except as provided in paragraph 7 of Part B of "Appendix I--
Conditions and Further Terms of the Offer", settlement of the consideration to
which any Rolfe & Nolan Shareholder is entitled under the Offer will be
effected (i) in the case of acceptances received, complete in all respects, by
the date on which the Offer becomes or is declared unconditional in all
respects, within 14 days of such date or (ii) in the case of acceptances of
the Offer received, complete in all respects, after the date on which the
Offer becomes or is declared unconditional in all respects but whilst it
remains open for acceptance, within 14 days of such receipt. Certificates for
New SunGard Common Stock and, where applicable, cheques representing
fractional entitlements will be despatched to Rolfe & Nolan Shareholders. In
the case of joint holders of Rolfe & Nolan Shares, these will be despatched to
the joint holder whose name appears first in the register of members. All
documents will be sent by pre-paid post at the risk of the person entitled
thereto. Accepting Rolfe & Nolan Shareholders will receive their New SunGard
Common Stock certificates without having to take any further action. Dealings
in New SunGard Common Stock are expected to commence on the NYSE shortly after
the Offer becomes or is declared unconditional in all respects. Pending
despatch of certificates, transfers of New SunGard Common Stock will be
certified against the register of members of SunGard.
If the Offer does not become or is not declared unconditional in all respects,
(i) share certificate(s) and/or other document(s) of title will be returned by
post (or such other method as may be approved by the Panel) within 14 days of
the Offer lapsing to the person or agent whose name and address outside
Canada, Japan and Australia is set out in Box 6 of the Form of Acceptance or,
if none is set out, to the first named holder at his or her registered address
outside Canada, Japan and Australia and (ii) IRG will, immediately after the
lapsing of the Offer (or within such longer period, not exceeding 14 days
after the Offer lapsing, as the Panel may approve), give TFE instructions to
CRESTCo to transfer all Rolfe & Nolan Shares held in escrow balances to the
original available balances of the Rolfe & Nolan Shareholders concerned.
All documents and remittances sent by, to, or from Rolfe & Nolan Shareholders
or their appointed agents will be sent at their own risk.
15.FURTHER INFORMATION
Your attention is drawn to the other sections and Appendices contained in this
Offer Document which contain certain additional relevant information.
Yours faithfully,
for and on behalf of Broadview Associates
Patrick Seely
Managing Director
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INFORMATION REGARDING SUNGARD
1.RISK FACTORS
This Offer Document contains forward-looking statements that involve risks and
uncertainties. SunGard's and Rolfe & Nolan's actual results may differ
materially from those anticipated in these forward-looking statements as a
result of certain risks and uncertainties, including risks relating to: (a)
the integration of SunGard and Rolfe & Nolan; (b) the integration by SunGard
of other acquisitions that currently are under agreement or that have recently
been completed; (c) the respective businesses of SunGard and Rolfe & Nolan,
including risks relating to the timing and magnitude of software sales, the
timing and scope of technological advances and the overall condition of the
financial services industry; and (d) other matters set forth in this section
and elsewhere in this Offer Document and in the documents incorporated herein
by reference. In addition to the other information in this Offer Document, the
following risk factors should be considered carefully by Rolfe & Nolan
Shareholders in determining whether or not to accept the Offer.
RISKS RELATING TO THE OFFER
Uncertainty Relating to Integration. The Offer involves the integration of two
companies that have previously operated independently. Such integration will
require significant effort from each company, including the coordination of
their research and development and sales and marketing efforts. There can be
no assurance that SunGard will integrate the operations of Rolfe & Nolan
without encountering difficulties or experiencing the loss of Rolfe & Nolan or
SunGard personnel or that the benefits expected from such integration will be
realized. The diversion of the attention of management and any difficulties
encountered in the transition process (including the interruption of, or a
loss of momentum in, Rolfe & Nolan's activities, problems associated with
integration of management information and reporting systems, and delays in
implementation of consolidation plans) could have an adverse impact on
SunGard's ability to realize anticipated synergies from the Offer.
Risks Associated with the Exchange Ratio. Upon exchange, each Rolfe & Nolan
Share will be exchanged for a fraction of a share of SunGard Common Stock. The
exact fraction of a share of SunGard Common Stock to be issued for each Rolfe
& Nolan Share will depend on the Final SunGard Price and the Final Exchange
Rate, and will be calculated (rounded to 4 decimal places) by dividing 525p by
the sterling equivalent (calculated at the Final Exchange Rate) of the Final
SunGard Price, subject to a maximum of 0.3100 of a share of SunGard Common
Stock and a minimum of 0.2750 of a share of SunGard Common Stock. In the event
that fluctuations in the closing price per share of SunGard Common Stock or in
the Final Exchange Rate would otherwise result in a fraction of a share
greater than 0.3100, the fraction of a share would nonetheless be fixed at
0.3100. Under such circumstances, Rolfe & Nolan Shareholders could receive
SunGard Common Stock with an implied value of less than 525p. The market
prices of SunGard Common Stock and Rolfe & Nolan Shares as of various recent
dates are set forth herein under "Financial Effects of the Offer" in paragraph
4 of the letter from Broadview Associates included in this Offer Document,
under "Information Regarding Rolfe & Nolan--Nature of Trading Market" and in
"Appendix IV--1. Market and Price Data". Rolfe & Nolan Shareholders are
advised to obtain recent market quotations for SunGard Common Stock and Rolfe
& Nolan Shares. SunGard Common Stock and Rolfe & Nolan Shares historically
have been subject to price volatility. No assurance can be given as to the
market prices of SunGard Common Stock or Rolfe & Nolan Shares at any time.
EFFECT OF OFFER ON OPERATING RESULTS, CUSTOMERS AND PARTNERS. Certain of Rolfe
& Nolan's existing customers or strategic partners may take the opportunity
following a change of control of Rolfe & Nolan to review their contractual
relationships. Such a review could result in delayed or lost sales to either
SunGard or Rolfe & Nolan.
RIGHTS OF HOLDERS OF ROLFE & NOLAN SHARES FOLLOWING THE OFFER. Following the
Offer, Rolfe & Nolan Shareholders will become holders of SunGard Common Stock.
Certain differences exist between the rights of Rolfe & Nolan Shareholders
under Rolfe & Nolan's Articles of Association and the rights of SunGard
Stockholders under SunGard's Amended and Restated Certificate of
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Incorporation and SunGard's Amended and Restated Bylaws. See "Appendix VI--
Description of SunGard Capital Stock and Changes in the Rights of Rolfe &
Nolan Shareholders."
FAILURE TO QUALIFY FOR POOLING OF INTERESTS ACCOUNTING TREATMENT. The Offer is
intended to qualify for pooling of interests treatment under US GAAP. Under
pooling of interests treatment, the accounts of SunGard will be combined with
those of Rolfe & Nolan at their historical carrying amounts and SunGard's
financial statements for all prior periods will be restated, if material, to
reflect the accounts of SunGard as if the two companies had been combined for
all periods.
SunGard anticipates that most of the requirements necessary for the
transaction to be treated as a pooling of interests will be met at the date
that the Offer becomes or is declared unconditional in all respects. Certain
requirements will continue after such date, including the requirement that no
Affiliate of either company may reduce its risk relative to its shareholdings
within the period beginning 30 days prior to the date that the Offer is
declared unconditional in all respects and ending when financial results
covering at least 30 days of post-combination operations have been published.
SunGard has entered into Affiliate Agreements with Rolfe & Nolan's Directors
and certain persons associated with them to restrict the disposition of shares
by such persons to the extent necessary to preserve pooling of interests
treatment. There can be no assurance, however, that the acquisition of Rolfe &
Nolan, if consummated, will qualify for pooling of interests treatment.
Should the transaction become or be declared unconditional in all respects and
not qualify for pooling of interests treatment, the purchase method of
accounting may be applied. Under that method, the fair market value of the New
SunGard Common Stock issued to effect the transaction would be recorded as the
cost of acquiring Rolfe & Nolan's business. That cost would be allocated to
the individual assets acquired and liabilities assumed according to their
respective fair values. The fair market value of the New SunGard Common Stock
to be issued in the transaction is in excess of the amounts at which the net
assets are carried in Rolfe & Nolan's accounts. A portion of the excess could
be charged to expense immediately and the remainder would be amortized. Such
treatment could have a material adverse impact on the reported operating
results of the combined companies during those periods as compared to that
under pooling of interests treatment.
FUTURE SALES OF SHARES ISSUED UNDER THE OFFER. Assuming the Offer is
successfully completed, based on the closing SunGard Common Stock price on the
NYSE on 18 February 1998 and the Illustrative Exchange Rate, up to 3,730,451
shares of SunGard Common Stock will be issued, of which 3,446,096 shares will
be immediately freely tradeable under the Securities Act. The remaining
284,355 shares, which will be issued to the Directors of Rolfe & Nolan and
certain other persons associated with them, will become freely tradeable after
SunGard has published financial results covering at least 30 days of combined
operations. Sales of a substantial number of such shares of SunGard Common
Stock could adversely affect the market price of the SunGard Common Stock.
RISKS RELATING TO SUNGARD'S BUSINESS
Acquisitions. SunGard seeks to grow both internally and through the
acquisition of complementary businesses. SunGard's growth, in part, depends
upon the availability of suitable acquisition candidates and whether
acquisitions can be completed on acceptable terms. Competition from other
acquirors and the alternative of a public equity offering may adversely affect
both the availability and terms of future acquisitions. Further acquisitions
by SunGard may require the use of debt or equity financing. During 1997,
SunGard acquired 12 businesses, including the acquisition of Infinity which
closed on January 2, 1998. Infinity derives a significantly larger portion of
its revenues from software licensing fees than does SunGard. Since there are
inherent difficulties in predicting the timing and magnitude of software
sales, the potential for fluctuations in quarterly revenues and income will be
higher for the combined operations after the Infinity acquisition than for
SunGard alone before the Infinity acquisition. Moreover, there can be no
assurance that SunGard will be able to successfully integrate its recent or
future acquisitions or that any acquired business will perform as expected.
Failure to successfully integrate an acquisition or poor performance by an
acquired business could adversely affect SunGard's results and cause
impairment of part of SunGard's goodwill and other intangible assets related
to acquisitions accounted for as a purchase.
25
<PAGE>
Technological Changes. SunGard's success, in part, depends upon continued
adaptation of its proprietary software and recovery services to new computer
and telecommunications technology on a timely and cost effective basis. In
particular, rapid technological developments, which cannot be predicted, could
have a material adverse effect on SunGard's business and prospects.
Product Development. SunGard must continually enhance and evolve its
proprietary software to keep pace with developments in the financial services
and healthcare industries. There can be no assurance that SunGard will be able
to update its software or develop new systems without experiencing unforeseen
delays or that newly developed products will be successfully marketed and
sold.
Financial Services Industry. SunGard sells most of its computer services and
software to the financial services industry and is generally dependent upon
the continued vitality of that industry. A material adverse change in the
condition of the financial services industry, such as a significant decline in
securities or derivatives trading activities or in the number or value of
managed portfolios, could have a material adverse effect on SunGard's business
and prospects.
New Business Line. In 1995, SunGard established its Healthcare Information
Systems Group by acquiring two providers of work-flow management and document-
imaging systems to the healthcare industry. Recently, SunGard acquired another
company in the healthcare information systems market. Although SunGard has
experience managing software businesses, prior to 1995, SunGard had no
experience in the healthcare information systems market. In addition, a number
of SunGard's competitors in this market have substantially greater financial,
technological and marketing resources than SunGard.
2.PRELIMINARY ANNOUNCEMENT OF SUNGARD'S 1997 FINANCIAL RESULTS
On 12 February 1998, SunGard announced its 1997 audited financial results. The
following information summarizes those results. All information set forth
below is in thousands, except per share amounts.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1997(1) 1996(2)
----------- -----------
<S> <C> <C>
Revenues............................................... $ 862,151 $ 670,309
Income before income taxes............................. 133,704 63,569
Income taxes........................................... 56,158 28,668
Net income............................................. 77,546 34,901
Net income per common share:
Basic................................................ 0.89 0.41
Diluted.............................................. 0.87 0.41
</TABLE>
- --------
(1) Includes one-time charge of $12,808 ($8,995 after-tax, or $0.10 per
diluted share) for purchased in-process research and development in
connection with the acquisition of certain assets of Premier Solutions
Ltd. and merger costs associated with poolings of interests.
(2) Includes one-time charge of $51,083 ($33,468 after-tax, or $0.39 per
diluted share) for purchased in-process research and development in
connection with the acquisition of NCS Financial Systems, Inc. and two
smaller acquisitions, and other items.
3.RECENT DEVELOPMENTS OF SUNGARD
On January 2, 1998, SunGard acquired Infinity in a stock-for-stock transaction
in which each share of Infinity common stock was exchanged for 0.68 of a share
of SunGard Common Stock. The acquisition is intended to be accounted for as a
pooling of interests. SunGard issued 13,223,128 shares of SunGard Common Stock
in the transaction and may issue up to approximately 1,684,658 shares of
SunGard Common Stock in connection with the exercise of stock options assumed
by SunGard in the transaction.
Infinity develops, markets and supports enterprise software solutions for
financial trading and risk management. Infinity targets global organizations
that manage complex financial assets and has approximately 70 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.
26
<PAGE>
The following Summary Unaudited Pro Forma Combined Condensed Financial Data
assumes that the Infinity Merger occurred on January 1, 1994, combining the
results of SunGard and Infinity as of September 30, 1997 and December 31,
1996, and for the nine months ended September 30, 1997 and for each of the
three years in the period ended December 31, 1996, with the Infinity Merger
accounted for as a pooling of interests. 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 had 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 set forth below, the financial condition and results
of operations as reported in SunGard's historical financial statements would
not be materially different. All financial information set forth below is in
thousands, except per share amounts.
<TABLE>
<CAPTION>
AS OF AND FOR THE
NINE MONTHS
ENDED AS OF AND FOR THE
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------- ------------------------------------
1997 1996 1995 1994
----------------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
SunGard (as reported).. $609,557 $670,309 $532,628 $437,190
Infinity (as
reported)............. 46,209 41,548 24,738 12,595
Pro Forma Combined..... 655,766 711,857 557,366 449,785
Net Income:
SunGard (as reported).. 54,978(/5/) 34,901(/5/) 48,672(/5/) 43,087
Infinity (as
reported)............. 5,375(/2/) 5,405 2,173(/3/) 1,641
Pro Forma
Combined(/1/)......... 60,353 40,306 50,845 44,728
Fully Diluted net income
per common share:
SunGard (as
reported)(/4/)........ 0.62(/5/) 0.41(/5/) 0.61(/5/) 0.56
Infinity (as
reported)............. 0.26(/2/) 0.28 0.12(/3/) 0.09
Pro Forma Combined..... 0.59 0.41 0.55 0.50
Shares used to compute
fully diluted net
income per common
share:(/4/)
SunGard (as reported).. 88,620 86,122 79,336 77,004
Infinity(/6/).......... 14,273 13,085 12,500 12,149
Pro Forma Combined..... 102,893 99,207 91,836 89,153
Book Value per common
share:
SunGard (as
reported)(/4/)........ $ 6.06 $ 5.50
Infinity (as
reported)............. 2.48 2.23
Pro Forma
Combined(/4/)......... 5.75 5.21
</TABLE>
- --------
(1) Excludes merger costs which are estimated to be approximately $4,000.
(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 splits which
occurred in July 1995 and 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 $9,956 for the nine months ended September 30, 1997
($6,143 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.
27
<PAGE>
4.SELECTED FINANCIAL INFORMATION OF SUNGARD
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 Offer Document. All financial information set forth below is
in thousands, except per share amounts.
<TABLE>
<CAPTION>
AS OF AND FOR THE
NINE MONTHS AS OF AND FOR THE
ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------- --------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- -------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
DATA:(1)
Revenues............... $ 609,557 $ 477,012 $670,309 $532,628 $437,190 $381,372 $324,570
Income from opera-
tions................. 94,280 34,249 59,786 80,076 70,326 59,645 50,336
Net income............. 54,978 20,386 34,901 48,672 43,087 38,474 25,808
Net income per
share:(2)
Primary.............. 0.62 0.24 0.41 0.61 0.56 0.54 0.41
Fully diluted........ 0.62 0.24 0.41 0.61 0.56 0.52 0.40
BALANCE SHEET DATA:
Total Assets........... $ 737,341 $ 613,791 $679,318 $579,734 $485,740 $418,135 $365,580
Total short term and
long term debt........ 23,884 7,269 39,346 10,002 10,567 6,523 89,790
Stockholders' equity... 525,823 447,612 464,638 422,292 359,292 316,960 189,899
</TABLE>
- --------
(1) The years ended December 31, 1996 and 1995, respectively, include one-time
charges for purchased in-process research and development, merger and
other costs of $51,083 and $4,238 ($33,468 and $4,238 after-tax, or $0.39
and $0.05 per share, respectively). The nine months ended September 30,
1997 and 1996 include one time charges for purchased in-process research
and development, merger and other costs of $9,956 and $44,032,
respectively ($6,143 and $28,287 after-tax, or $0.07 and $0.33 per share,
respectively). The year ended December 31, 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.
28
<PAGE>
INFORMATION REGARDING ROLFE & NOLAN
1.BUSINESS
Rolfe & Nolan is a provider on a worldwide basis of risk management software
for global treasury and capital markets operations and settlement software for
the derivatives industry. Using leading edge technology the systems supplied
are capable of satisfying clients' operational needs in these areas across the
globe. Rolfe & Nolan's turnover is primarily derived from its bureaux and
facilities management services related to its settlement software system,
which generate a strong monthly recurring revenue stream. In addition, the
Rolfe & Nolan Group licenses its software to larger clients for use on their
in house computer installations and provides ancillary services to its full
customer base. The Rolfe & Nolan Group has data centres in four locations and
staff in three time zones supporting approximately 280 clients in 23
countries.
Rolfe & Nolan floated on the UK stock market in 1981, obtaining a full listing
in 1991. Since that time it has accelerated its growth through acquisitions in
the US and the UK and by establishing companies in mainland Europe and the
Asia Pacific region.
In 1993 the Rolfe & Nolan Group purchased the intellectual property rights to
the Lighthouse system which it has been developing internally since that time.
Lighthouse is a software product that supports treasury and derivatives
trading operations. It is designed to meet the requirements of banks, other
financial institutions and corporate entities trading treasury and over-the-
counter derivatives products, such as swaps, interest rate options, money
market instruments and foreign exchange. The system provides for the
administration, risk management and accounting of treasury and treasury
derivative products.
In August 1997 the Rolfe & Nolan Group raised (Pounds)1.9 million from
existing shareholders by way of a private placing of shares.
Rolfe & Nolan's operating results were materially restricted during the period
under review by the development costs of bringing its Lighthouse product to
market. All development costs relating to both Lighthouse and to the futures
and options business have been expensed in the year in which they were
incurred. The core futures and options business of Rolfe & Nolan continues to
expand.
In the year ended 28 February 1997 (fiscal 1997) the Rolfe & Nolan Group
increased its capital expenditure in upgrading its development and operating
infrastructure for both futures and options and capital markets divisions. In
addition the Rolfe & Nolan Group significantly increased its expenses for
personnel and marketing in the capital markets division. This has had a
negative impact on Rolfe & Nolan's operating results in the first half of the
year ending 28 February 1998 (fiscal 1998). However, the directors of Rolfe &
Nolan expect that the investment made in its infrastructure will provide the
basis for growth of this business in the future.
European operations have traditionally been, and continue to be, the principal
source of revenue, accounting for 70 per cent. of Rolfe & Nolan Group sales in
fiscal 1997. The US-based business suffered losses for many years up to and
including the year ended 29 February 1996 (fiscal 1996). In fiscal 1997,
however, the US operation generated 27 per cent. of Rolfe & Nolan Group
revenue resulting in a small profit. The Asia Pacific operation started in
1996 and in the period under review had not reached sufficient revenue levels
to cover the fixed cost base in the region. In fiscal 1997 the losses in Asia
Pacific reduced Rolfe & Nolan Group profit before interest and taxation by
(Pounds)480,000.
As is common in banking software markets, due to the high value of individual
licence sales, the results of the Rolfe & Nolan Group have been, and remain,
dependent on the precise timing of these sales.
29
<PAGE>
2.SELECTED ROLFE & NOLAN FINANCIAL INFORMATION
<TABLE>
<CAPTION>
AS OF AND
FOR THE
SIX MONTHS
ENDED
31 AUGUST AS OF AND FOR THE FINANCIAL YEAR ENDED
------------- -----------------------------------------------------------
28 FEBRUARY 29 FEBRUARY 28 FEBRUARY 28 FEBRUARY 28 FEBRUARY
1997 1996 1997 1996 1995 1994 1993
------ ----- ----------- ----------- ----------- ----------- -----------
(IN (Pounds)000 EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
PROFIT AND LOSS ACCOUNT
DATA:
Turnover................ 9,692 8,630 20,299 17,128 14,288 12,720 11,232
Operating
profit/(loss).......... (568) 1,048 2,635 2,383 1,395 1,476 1,023
Profit/(loss) on
ordinary activities
before taxation........ (569) 1,107 2,758 2,517 1,512 1,573 1,216
Profit/(loss) for the
period attributable to
ordinary shareholders.. (370) 698 1,819 1,520 816 770 998
Earnings/(loss) per
share.................. (2.93) 5.57 14.5p 12.33p 6.7p 6.4p 8.9p
Dividends per share..... 1.7p 1.7p 5.5p 4.8p 4.0025p 4.0p 3.6p
BALANCE SHEET DATA:
Total assets............ 11,848 9,352 10,204 9,102 7,782 7,839 7,116
Long-term obligations
and redeemable
preferred stock........ (844) (191) (230) (349) (184) (254) (364)
Net assets.............. 6,547 4,634 5,304 4,037 2,939 2,543 2,812
</TABLE>
The following table shows certain of the above items for Rolfe & Nolan's last
three financial years reconciled to US GAAP.(/1/)
<TABLE>
<CAPTION>
AS OF AND FOR THE FINANCIAL YEAR
ENDED
-----------------------------------
28 FEBRUARY 28 FEBRUARY 28 FEBRUARY
1997 1996 1995
----------- ----------- -----------
(IN 000 EXCEPT PER SHARE AND
EXCHANGE RATE DATA)
<S> <C> <C> <C>
PROFIT FOR THE PERIOD ATTRIBUTABLE TO OR-
DINARY SHAREHOLDERS
UK GAAP ((Pounds))...................... 1,819 1,520 816
Adjustments: Amortisation of goodwill..... (121) (121) (121)
Recognition of deferred tax credit...... 95 167 140
------ ------ ------
US GAAP ((Pounds))...................... 1,793 1,566 835
Exchange rate........................... 1.5890 1.5700 1.5541
US GAAP ($)............................. 2,849 2,459 1,298
EARNINGS PER SHARE
UK GAAP ((Pounds))...................... 0.14 0.12 0.07
Adjustments: Amortisation of goodwill..... (0.01) (0.01) (0.01)
Recognition of deferred tax credit........ 0.01 0.01 0.01
------ ------ ------
US GAAP ((Pounds))...................... 0.14 0.12 0.07
Exchange rate........................... 1.5890 1.5700 1.5541
US GAAP ($)............................. 0.22 0.19 0.11
TOTAL ASSETS
UK GAAP ((Pounds))...................... 10,204 9,102 7,782
Adjustments: Capitalisation of goodwill... 2,418 2,418 2,418
Accumulated amortisation................ (605) (484) (363)
Reclassification of investment in own
shares................................. (356) (356) (356)
Recognition of deferred tax asset....... 95 167 140
------ ------ ------
US GAAP ((Pounds))...................... 11,756 10,847 9,621
Exchange rate........................... 1.6287 1.5320 1.5840
US GAAP ($)............................. 19,147 16,618 15,240
NET ASSETS
UK GAAP ((Pounds))...................... 5,304 4,037 2,939
Adjustments: Capitalisation of goodwill... 2,418 2,418 2,418
Accumulated amortisation................ (605) (484) (363)
Reclassification of investment in own
shares................................. (356) (356) (356)
Recognition of deferred tax asset....... 95 167 140
------ ------ ------
US GAAP ((Pounds))...................... 6,856 5,782 4,778
Exchange rate........................... 1.6287 1.5320 1.5840
US GAAP ($)............................. 11,166 8,858 7,568
</TABLE>
- --------
(1) An explanation of the reconciliations to US GAAP in this table can be found
on page 33 of this Offer Document.
30
<PAGE>
The following table shows a five year summary of net dividends per share paid
in full and stated in both pounds and dollars based on the exchange rate at
each payment date:
<TABLE>
<CAPTION>
PAID IN RESPECT OF THE YEAR ENDED
-----------------------------------------------------------
28 FEBRUARY 29 FEBRUARY 28 FEBRUARY 28 FEBRUARY 28 FEBRUARY
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Dividend (pence)... 5.5 4.8 4.0 8.0 7.2
Dividend (cents)... 9.1 7.4 6.2 12.2 10.8
</TABLE>
The following table shows the pound-dollar exchange rate at the end of certain
financial periods, the average rate for each period and the range of high and
low rates for each period(/1/):
<TABLE>
<CAPTION>
AS OF AND FOR
THE
SIX MONTHS
ENDED AS OF AND FOR THE
31 AUGUST FINANCIAL YEAR ENDED
------------- --------------------------
28 29 28
FEBRUARY FEBRUARY FEBRUARY
1997 1996 1997 1996 1995
------ ------ -------- -------- --------
<S> <C> <C> <C> <C> <C>
End of financial period................ 1.6203 1.5612 1.6287 1.5320 1.5840
Average for period..................... 1.6375 1.5417 1.5890 1.5700 1.5541
High................................... 1.6935 1.5612 1.7123 1.6440 1.6368
Low.................................... 1.5775 1.4948 1.4948 1.5030 1.4621
</TABLE>
- --------
(1) The pounds sterling to U.S. dollar exchange rate used in this table is the
noon buying rate used in New York City for cable transfers in pounds
sterling as certified for customs purposes by the Federal Reserve Bank of
New York.
3. ROLFE & NOLAN MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
YEARS ENDED 28 FEBRUARY 1997, 29 FEBRUARY 1996, 28 FEBRUARY 1995:
Turnover
Rolfe & Nolan derives its turnover from two sources: (1) the provision and
support of settlement software in relation to futures and options by way of
bureaux, facilities management services or in house licence sales and (2) the
provision and support of risk management software for global treasury
operations. Total turnover grew 20 per cent. from (Pounds)14.3 million in
fiscal 1995 to (Pounds)17.1 million in fiscal 1996 and 19 per cent. to
(Pounds)20.3 million in fiscal 1997.
Turnover of the futures and options business grew 18 per cent. from
(Pounds)13.7 million in fiscal 1995 to (Pounds)16.2 million in fiscal 1996,
and by 17 per cent. to (Pounds)18.9 million in fiscal 1997. During the above
periods the ratio of recurring revenue as a percentage of the total costs of
the business remained in excess of 80 per cent. (which represents the
percentage of global futures and options fixed costs covered by ongoing
monthly fees). The growth in the turnover of the futures and options business
was due to the increased volumes transacted on the European and US Futures
Exchanges, and to the global expansion of the Rolfe & Nolan Group into the
Asia Pacific markets.
Turnover of the Capital Markets products reflected licence fees and other
consultancy services for the Lighthouse product paid by Credit Suisse during
fiscal 1995, 1996 and 1997. Total revenues generated during this period
totalled approximately (Pounds)3 million. Lighthouse was developed during this
period and sales and marketing activities commenced in fiscal 1997.
Operating expenditure
Operating expenditure consists of all personnel related costs (which represent
over 60 per cent. of the total Rolfe & Nolan Group cost base), those costs
associated with sales, marketing and general administrative activities and
professional fees and other costs associated with being a publicly quoted
company. Development costs for both the Futures and Options and the Lighthouse
products were expensed in the year in which they were incurred. The Rolfe &
Nolan Group did not capitalise the cost of any internally developed software
during the periods under review.
Operating expenditure increased 14 per cent. from (Pounds)12.9 million in
fiscal 1995 to (Pounds)14.7 million in fiscal 1996 and by 19 per cent. to
(Pounds)17.6 million in fiscal 1997. The increase in operating
31
<PAGE>
expenditure in fiscal 1997 principally reflected the cost of additional
personnel as the Rolfe & Nolan Group expanded its futures and options business
and created a sales and customer support team for its Lighthouse product.
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
Profit before taxation in fiscal 1995, 1996 and 1997 can be analysed in the
context of the change in turnover and operating expenditure and net interest
receivable. The net interest receivable is the difference between operating
profit/(loss) and profit/(loss) on ordinary activities before taxation as
shown above.
TAXATION ON PROFITS FROM ORDINARY ACTIVITIES
The effective tax rate was 46 per cent., 39 per cent. and 34 per cent. during
fiscal 1995, 1996, and 1997 respectively. The high effective rates in the
earlier years reflected losses made in the US for which the future benefit was
not taken.
HALF YEARS ENDED 31 AUGUST 1996 AND 1997
TURNOVER
Turnover of the Futures and Options business grew 18 per cent. from
(Pounds)8.3 million in the six-month period ended 31 August 1996 to
(Pounds)9.5 million in the six-month period ended 31 August 1997. The higher
turnover was due to increased licence sales in Europe. During the above
periods the ratio of recurring revenue, as a percentage of the total costs of
the business, fell slightly to 77 per cent.
Turnover of the Capital Markets product (Lighthouse) was negligible in both
periods.
OPERATING EXPENDITURE
Operating expenditure increased by 35 per cent. from (Pounds)7.6 million in
the six-month period ended 31 August 1996 to (Pounds)10.3 million during the
six-month period ended 31 August 1997. This increase reflected the investment
in staff and in the infrastructure for the Capital Markets operation which
progressed from its development phase to marketability.
Profit on ordinary activities before taxation
Profit on ordinary activities before taxation in the half year ended 31 August
1996 and 1997 must be analysed in the context of the changes in turnover and
operating expenditure and net interest receivable. The net interest receivable
is the difference between operating profit/(loss) and profit/(loss) on
ordinary activities before taxation as shown above. The increase in
expenditure resulting from the investment in the capital markets division led
to an operating loss of (Pounds)568,000 in the half year ended 31 August 1997.
TAXATION ON PROFITS FROM ORDINARY ACTIVITIES
The rate of taxation shown in the six-month period represents management's
estimate of the rate to be applied for the full year. Under UK GAAP the six-
month period has not been treated as a discrete accounting period but as a
part of the full twelve months ending on the last day of February.
LIQUIDITY AND CAPITAL RESOURCES
Rolfe & Nolan has historically satisfied its cash requirements through its own
cash flow from operations, supplemented by facilities from its principal
bankers. In August 1997 Rolfe & Nolan completed a private placing of equity
shares to raise (Pounds)1.9 million from existing shareholders. The money was
raised to finance the sales and marketing roll out of its Lighthouse product,
including purchases of capital equipment and the hiring of additional
personnel.
Cash flows from operations can vary significantly from period to period,
depending upon the timing of operating cash receipts. The total cash and short
term investments were (Pounds)2.1 million and (Pounds)3.2 million. In
addition, purchases of tangible fixed assets varied from (Pounds)636,000 in
fiscal 1995 to (Pounds)818,000 in fiscal 1996 to (Pounds)762,000 in fiscal
1997.
32
<PAGE>
As at 31 August 1997 Rolfe & Nolan had cash and short term cash deposits of
(Pounds)2.1 million which, together with expected cash flow from operations
and bank facilities in place, was believed to be sufficient to meet its then
anticipated working capital and capital expenditure requirements over the
following 6 months.
IMPACT OF INFLATION
During the period under review, the business of Rolfe & Nolan was not
materially affected by inflation.
RECONCILIATION OF UK TO US GAAP
Certain profit and loss and balance sheet items in the UK published accounts
of the Rolfe & Nolan Group have been adjusted for the purposes of this
document principally to reflect the different treatment of goodwill, deferred
tax and investment in its own shares under UK and US GAAP. UK GAAP allows
goodwill to be written off to reserves in the year of acquisition. US GAAP
requires the recognition of deferred tax assets whereas UK GAAP does not.
Under UK GAAP, a company's investment in its own shares (for example where
held by an employee benefit trust) is considered an asset of the business
whereas US GAAP treats such items as treasury stock. This reconciliation is
shown in Section 2 above.
4.NATURE OF TRADING MARKET
Rolfe & Nolan Shares have been traded on the LSE since 1991. There is no
trading market for Rolfe & Nolan Shares in the U.S.
As at 23 January 1998 there were approximately 9 holders of record of Rolfe &
Nolan Shares with registered addresses in the US, holding an aggregate of
209,478 Rolfe & Nolan Shares (approximately 1.6 per cent. of Rolfe & Nolan's
then issued share capital). Certain US holdings may be held in nominee
accounts with registered addresses outside the U.S.
The following table sets out, for the quarters indicated, the reported highest
and lowest middle market quotations for Rolfe & Nolan Shares, as derived from
SEDOL:
<TABLE>
<CAPTION>
(Pounds) (Pounds)
PER PER
ORDINARY ORDINARY
SHARE SHARE
QUARTER HIGH LOW
------- -------- --------
<S> <C> <C>
1 December 1995 to 29 February 1996 3.03 2.68
1 March 1996 to 31 May 1996 3.23 2.88
1 June 1996 to 31 August 1996 3.58 3.08
1 September 1996 to 30 November 1996 3.875 3.375
1 December 1996 to 28 February 1997 4.525 3.275
1 March 1997 to 31 May 1997 4.075 3.775
1 June 1997 to 31 August 1997 3.875 3.075
1 September 1997 to 30 November 1997 3.475 2.875
</TABLE>
5.MARKET RISK
Rolfe & Nolan is not exposed to any market risk sensitive instruments except
its treasury investments. These investments constitute sterling denominated
cash bank deposits yielding rates of interest available on London money
markets. To the extent that these rates of interest are affected by market
conditions, Rolfe & Nolan's interest income will change but this is currently
not expected to impact materially on its results.
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APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE OFFER
PART A
CONDITIONS OF THE OFFER
The Offer is subject to the following conditions:
(a) valid acceptances being received (and not, where permitted, withdrawn) by
not later than 3.00 p.m. on the First Closing Date of the Offer (or such
later time(s) and/or date(s) as SunGard may, subject to the rules of the
City Code, decide) in respect of not less than90 per cent. (or such
lesser percentage as SunGard may decide) of the Rolfe & Nolan Shares to
which the Offer relates, provided that this condition will not be
satisfied unless SunGard and/or its wholly-owned subsidiaries shall have
acquired or agreed to acquire (pursuant to the Offer or otherwise) Rolfe
& Nolan Shares carrying in aggregate more than 50 per cent. of the voting
rights then exercisable at a general meeting of Rolfe & Nolan. For the
purposes of this condition, Rolfe & Nolan Shares which have been
unconditionally allotted shall be deemed to carry the voting rights they
will carry upon their being entered in the register of members of Rolfe &
Nolan;
(b) the approval for listing on the NYSE, subject to official notice of
issuance, of the New SunGard Common Stock;
(c) the Office of Fair Trading indicating, in terms satisfactory to SunGard,
that it is not the intention of the Secretary of State for Trade and
Industry to refer the proposed acquisition of Rolfe & Nolan by SunGard or
any matters arising therefrom to the Monopolies and Mergers Commission;
(d) SunGard having received a letter from Coopers & Lybrand L.L.P., dated as
of the date on which the Offer becomes or is declared unconditional in
all respects (with Coopers & Lybrand L.L.P. having received a supporting
letter from Grant Thornton, Rolfe & Nolan's auditors), confirming its
earlier letter to SunGard that Coopers & Lybrand L.L.P. concurs with
SunGard management's conclusion that the acquisition of Rolfe & Nolan may
be accounted for as a pooling of interests under US GAAP;
(e) the Registration Statement, and any post-effective amendments thereto,
having become effective under the Securities Act and no stop order
suspending the effectiveness of such registration statement or any part
thereof having been issued and no proceeding for that purpose having been
initiated or threatened by the SEC;
(f) no Third Party having instituted, implemented or threatened, or having
decided to institute, implement or threaten, any action, proceeding,
suit, investigation, enquiry or reference or having made, proposed or
enacted or required any action to be taken or information to be provided
and there not continuing to be outstanding any statute, regulation, order
or decision which would or might:
(i) make the Offer or the acquisition by SunGard of any or all Rolfe &
Nolan Shares, or control of Rolfe & Nolan by SunGard, void, illegal or
unenforceable, or otherwise, directly or indirectly, restrict,
prohibit, materially delay or otherwise interfere with the
implementation of, or impose additional material conditions or
obligations with respect to, or otherwise materially challenge, the
Offer or the acquisition of any or all Rolfe & Nolan Shares or control
of Rolfe & Nolan by SunGard;
(ii) require or prevent the divestiture by the Wider SunGard Group or by
the Wider Rolfe & Nolan Group of all or any material portion of their
respective businesses, assets or properties or impose any material
limitation on the ability of any of them to conduct their respective
businesses or to own their respective assets or property or any part
of them;
(iii) impose any limitation on the ability of any member of the Wider
SunGard Group to acquire, directly or indirectly, or to hold or
exercise effectively all or any rights of ownership of Rolfe & Nolan
Shares or on the ability of Rolfe & Nolan or any member of the Wider
Rolfe & Nolan Group or SunGard to hold or exercise effectively any
rights of ownership of shares in any member of the Wider Rolfe &
Nolan Group held or owned by it;
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(iv) result in a delay in the ability of any member of the Wider SunGard
Group, or render any member of the Wider SunGard Group unable, to
acquire some or all of the shares in Rolfe & Nolan;
(v) save pursuant to the Offer or Part XIIIA of the Companies Act, require
any member of the Wider SunGard Group or of the Wider Rolfe & Nolan
Group to offer to acquire any shares in any member of the Wider Rolfe
& Nolan Group owned by any third party; or
(vi) otherwise materially and adversely affect the business, profits or
prospects of any member of the Wider Rolfe & Nolan Group,
and all applicable waiting periods during which any Third Party could
institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference under the laws of any jurisdiction
having expired, lapsed or been terminated;
(g) all necessary filings having been made and all appropriate waiting
periods under any applicable legislation and regulations in any
jurisdiction having expired, lapsed or been terminated and no notice of
any intention to revoke any of the same having been received, in each
case as may be necessary in connection with the Offer or the acquisition
by any member of the Wider SunGard Group of any shares in, or control of,
Rolfe & Nolan and all authorisations, orders, recognitions, grants,
consents, clearances, confirmations, licences, permissions and approvals
necessary or appropriate for or in respect of the Offer or the proposed
acquisition of Rolfe & Nolan by any member of the Wider SunGard Group
having been obtained in terms and in a form satisfactory to SunGard from
all appropriate Third Parties and all such authorisations, orders,
recognitions, grants, consents, clearances, confirmations, licences,
permissions and approvals remaining in full force and effect at the time
the Offer becomes otherwise unconditional and there being no intimation
of any intention to revoke or amend or not to renew the same in
connection with the Offer under the laws or regulations of any
jurisdiction and all necessary statutory or regulatory obligations in any
jurisdiction having been complied with;
(h) except as SunGard and Rolfe & Nolan have agreed in writing has been
disclosed to SunGard, there being no provision of any arrangement,
agreement or other instrument to which any member of the Wider Rolfe &
Nolan Group or any partnership or company in which any member of the
Wider Rolfe & Nolan Group is interested (an "associate") is a party or by
or to which any member or associate or any of their respective assets may
be bound or be subject which could, in consequence of the Offer or the
proposed acquisition of Rolfe & Nolan Shares by SunGard, result in:
(i) any moneys borrowed by or any other indebtedness, actual or
contingent, of any such member or associate becoming repayable or
capable of being declared repayable immediately or prior to the stated
repayment date in such arrangement, agreement or instrument or the
ability of such member or associate to incur any indebtedness being
withdrawn or inhibited;
(ii) the creation of any mortgage, charge or other security interest over
the whole or any part of the business, property or assets of any such
member or associate or any such security (whenever arising or having
arisen) becoming enforceable;
(iii) any such arrangement, agreement or instrument being terminated or
adversely modified or any action of an adverse nature being taken or
onerous obligation arising thereunder;
(iv) any assets or interests of any such member or associate being or
falling to be disposed of or charged or any right arising under which
any such asset or interest could be required to be disposed of or
charged otherwise than in the ordinary course of business;
(v) the respective financial or trading position, profits or prospects of
any such member or associate being prejudiced or adversely affected;
(vi) the interests or business of any such member or associate in or with
any other person, firm or company (or any arrangements relating to
such interests or business) being adversely affected; or
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(vii) any such member or associate ceasing to be able to carry on business
under any name under which it presently does so,
and in any such case the result will be adverse to and material in the
context of the Wider Rolfe & Nolan Group taken as a whole;
(i) except as disclosed in the Annual Report and Accounts of Rolfe & Nolan
for the year ended 28 February 1997 or as publicly announced to the LSE
prior to 5 February 1998 or as SunGard and Rolfe & Nolan have agreed in
writing has been disclosed to SunGard, no member of the Rolfe & Nolan
Group having since 28 February 1997:
(i) (save for transactions solely with wholly-owned subsidiaries of Rolfe
& Nolan) issued or agreed to or authorised or proposed the issue of
additional shares of any class, or securities convertible into, or
rights, warrants or options to subscribe for or acquire, any such
shares or convertible securities save for options granted and the
issue of shares pursuant to the exercise of options granted on or
before 5 February 1998 under the Rolfe & Nolan Share Option Schemes;
(ii) save for the final dividend of 3.8p per share paid by Rolfe & Nolan
in respect of the period to 28 February 1997 and the interim dividend
of 1.7p per share paid on 30 January 1998, declared, paid or made or
proposed to declare, pay or make any bonus, dividend or other
distribution whether payable in cash or otherwise other than to Rolfe
& Nolan or wholly owned subsidiaries of Rolfe & Nolan;
(iii) authorised, proposed or announced an intention to authorise or
propose any merger or acquisition, demerger, disposal or transfer of
assets (other than in the ordinary course of trading);
(iv) authorised, proposed or announced its intention to authorise or
propose any change to its share or loan capital (save for any Rolfe &
Nolan Shares allotted upon the exercise of options granted on or
before 5 February 1998 under the Rolfe & Nolan Share Option Schemes);
(v) disposed of or transferred, mortgaged or encumbered any assets or any
right, title or interest in any asset (save in the ordinary course of
trading) which in any such case is adverse to and material in the
context of the Rolfe & Nolan Group taken as a whole;
(vi) issued or proposed the issue of any debentures or (save in the
ordinary course of business) incurred any indebtedness or contingent
liability which in any such case is adverse to and material in the
context of the Rolfe & Nolan Group taken as a whole;
(vii) entered into any arrangement, agreement, transaction or commitment
(whether in respect of capital expenditure, trading obligations or
otherwise) which is of a loss making, long term, onerous or unusual
nature or which involves or could involve an obligation of such a
nature or magnitude which in any such case is adverse to and
material in the context of the Rolfe & Nolan Group taken as a whole;
(viii) entered into or varied the terms of any service agreement or
agreement for services with any director of Rolfe & Nolan;
(ix) purchased any of its own shares;
(x) proposed any voluntary winding-up;
(xi) waived or compromised any claim which is adverse to and material in
the context of the Rolfe & Nolan Group taken as a whole;
(xii) terminated or varied the terms of any agreement or arrangement
between any member of the Wider Rolfe & Nolan Group and any other
person in a manner which would or might be expected to have a
material adverse effect on the position or prospects of the Rolfe &
Nolan Group; or
(xiii) entered into any arrangement, agreement or commitment or passed any
resolution with respect to any of the transactions, matters or
events referred to in this paragraph (i);
(j) except as disclosed in the Annual Report and Accounts of Rolfe & Nolan
for the year ended 28 February 1997, or as publicly announced to the LSE
prior to 5 February 1998 or as SunGard and Rolfe & Nolan have agreed in
writing has been disclosed to SunGard, since 28 February 1997 and prior
to the date on which the Offer becomes otherwise unconditional:
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(i) there having been no adverse change in the business, financial or
trading position or profits or prospects of any member of the Wider
Rolfe & Nolan Group; and
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings having been threatened, announced, intimated or instituted
by or remaining outstanding against any member of the Wider Rolfe &
Nolan Group (whether as plaintiff or defendant or otherwise); and
(iii) no claim being made, and no circumstance having arisen which might
lead to a claim being made, under the insurance of any member of the
Wider Rolfe & Nolan Group which would or might reasonably be expected
to have an effect on the Wider Rolfe & Nolan Group; and
(iv) no contingent liability having arisen or become apparent which might
be likely in either case to have an adverse effect on any member of
the Wider Rolfe & Nolan Group,
which in any such case is adverse to and material in the context of the
Rolfe & Nolan Group taken as a whole; and
(k) except as SunGard and Rolfe & Nolan have agreed in writing has been
disclosed in writing to SunGard, SunGard not having discovered that the
financial, business or other information publicly disclosed at any time by
or on behalf of any member of the Wider Rolfe & Nolan Group contains a
misrepresentation of material fact or omits to state a material fact
necessary to make the information contained therein not materially
misleading.
SunGard reserves the right (but shall be under no obligation) to waive all or
any of conditions (c) to (k) both inclusive, in whole or in part. In order for
the Offer not to lapse, conditions (c) to (k) both inclusive must be satisfied
as at, or waived on or before midnight on, the 21st day after the later of the
first closing date of the Offer and the date on which condition (a) is
satisfied (or in each case such later date as the Panel may agree). SunGard
shall be under no obligation to waive or treat as satisfied any of conditions
(c) to (k) both inclusive by a date earlier than the latest date specified
above for the satisfaction thereof notwithstanding that the other conditions
of the Offer may at such earlier date have been waived or fulfilled and that
there are at such earlier date no circumstances indicating that the relevant
condition may not be capable of satisfaction.
If SunGard is required by the Panel to make an offer or offers for Rolfe &
Nolan Shares under the provisions of Rule 9 of the City Code, SunGard may make
such alterations to the terms and conditions of the Offer, including condition
(a) above, as are necessary to comply with the provisions of that Rule.
The Offer will lapse if the proposed acquisition of Rolfe & Nolan is referred
to the Monopolies and Mergers Commission before 3.00 p.m. (London time) on the
first closing date of the Offer or the date when the Offer becomes or is
declared unconditional as to acceptances, whichever is the later. If the Offer
so lapses, the Offer will cease to be capable of further acceptance and
accepting Rolfe & Nolan Shareholders and SunGard will cease to be bound by any
Forms of Acceptance submitted before the time when the Offer lapses.
PART B
FURTHER TERMS OF THE OFFER
The following further terms apply in this Part B and Part C of this Appendix I
and in the Form of Acceptance, unless the context otherwise requires, and
references to:
(a) the "Offer" shall mean the Offer and any revision thereof or extension
thereto;
(b) "the Offer becoming unconditional" shall include references to the Offer
being declared unconditional;
(c) "the Offer becoming or being declared unconditional" shall be construed as
the Offer becoming or being declared unconditional as to acceptances,
whether or not any other condition of the Offer remains to be fulfilled;
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(d) the "acceptance condition" shall mean the condition as to acceptances set
out in paragraph (a) of Part A of this Appendix I;
(e) "acceptances of the Offer" shall include deemed acceptances of the Offer;
and
Any reference to any hour of the day shall refer to such time in the UK.
1.ACCEPTANCE PERIOD
(a) The Offer will initially be open for acceptance until 3:00 p.m. on 20
March 1998. Although no revision is envisaged, if the Offer is revised
it will remain open for acceptance for a period of at least 10 US
Business Days from the date on which written notification of the
revision is posted to Rolfe & Nolan Shareholders (or such other period
as may be permitted by the Panel). Except with the consent of the
Panel, no such written notification may be posted after 7 April 1998
or if earlier or later, the date falling 10 US Business Days prior to
the last date on which the Offer is capable of becoming unconditional.
(b) The Offer, whether revised or not, shall not be capable of becoming
unconditional after midnight on 21 April 1998 (or any earlier time
and/or date beyond which SunGard has stated, and has not withdrawn
such statement, that the Offer will not be extended) nor of being kept
open after that time unless it has previously become unconditional,
provided that SunGard reserves the right, with the permission of the
Panel, to extend the Offer to a later time(s) and/or date(s). Except
with the permission of the Panel, SunGard may not, for the purpose of
determining whether the acceptance condition has been satisfied, take
into account acceptances received or purchases of shares made unless
all relevant documentation is received by IRG no later than 1:00 p.m.
on 21 April 1998 (or any earlier time and/or date beyond which SunGard
has stated that the Offer will not be extended and in respect of which
it has not withdrawn that statement) or such later time(s) and/or
date(s) as SunGard, with the permission of the Panel, may determine.
(c) If the Offer becomes unconditional in all respects, it will remain
open for acceptance for not less than 14 days from the date on which
it would otherwise have expired. If the Offer has become unconditional
and it is stated that the Offer will remain open until further notice,
then not less than 14 days written notice will be given prior to the
closing of the Offer. If a competitive situation arises after SunGard
has made a "no increase" and/or "no extension" statement in relation
to the Offer, SunGard may, if it specifically reserves the right to do
so at the time such statement is made, withdraw such statement if it
announces such withdrawal within four business days after the
announcement of the competing offer and notifies Rolfe & Nolan
Shareholders in writing thereof (or, in the case of Rolfe & Nolan
Shareholders with registered addresses outside the UK, or whom SunGard
knows to be a nominee, trustee or custodian holding Rolfe & Nolan
Shares for such persons, by an announcement in the UK) at the earliest
opportunity. SunGard may choose not to be bound by the terms of a "no
increase" or "no extension" statement if, having reserved the right to
do so, it posts an increased or improved offer which is recommended
for acceptance by the Rolfe & Nolan Board or in other circumstances
permitted by the Panel.
(d) Unless otherwise determined by the Panel, SunGard shall be entitled at
any particular time to decide that the acceptance condition is then
satisfied taking account only of those Rolfe & Nolan Shares which have
been unconditionally allotted or issued before that time and written
notice of the allotment or issue of which, containing all relevant
details, has been received before that time by IRG on behalf of
SunGard from Rolfe & Nolan or its agents at the address specified in
sub-paragraph 3(a) of this Part B. Telex, e-mail or facsimile
transmission will not be sufficient.
2. ANNOUNCEMENTS
(a) Without prejudice to sub-paragraph 3(a) of this Part B, by 8:30 a.m.
on the business day (the "Relevant Day") following the day on which
the Offer is due to expire or become unconditional or is revised or
extended, as the case may be, (or such later time(s) or date(s) as the
Panel may agree), SunGard will make an appropriate announcement and
simultaneously inform the LSE of the position. Such announcement will
(unless
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otherwise permitted by the Panel) state (as nearly as practicable) the
total number of Rolfe & Nolan Shares and rights over Rolfe & Nolan
Shares:
(i) for which acceptances of the Offer have been received (and to what
extent such acceptances have been received from persons acting in
concert with SunGard for the purposes of the Offer);
(ii) acquired or agreed to be acquired by or on behalf of SunGard (or
by persons acting in concert with SunGard for the purposes of the
Offer) during the Offer Period; and
(iii) held by or on behalf of SunGard (or by persons acting in concert
with SunGard for the purposes of the Offer) prior to the Offer
Period,
and will specify the percentage of Rolfe & Nolan's ordinary share capital
represented by each of these figures.
(b) Any decision to extend the date by which the acceptance condition has
to be fulfilled may be made at any time up to, and will be announced
not later than, 8:30 a.m. on the Relevant Day (or such later time(s)
and/or date(s) as the Panel may agree) and the announcement will state
the next expiry date (unless the Offer is unconditional, in which case
a statement may instead be made that the Offer will remain open until
further notice). In computing the number of Rolfe & Nolan Shares
represented by acceptances and purchases there may be included or
excluded for announcement purposes, subject to sub-paragraph 5(a) of
this Part B, acceptances and purchases not in all respects in order or
subject to verification.
(c) In this Appendix I, references to the making of an announcement by or
the giving of notice by or on behalf of SunGard include the release of
an announcement to the press by public relations consultants or by
Broadview Associates and the delivery by hand or telephone, facsimile,
telex or other electronic transmission of an announcement to the LSE.
An announcement made otherwise than to the LSE shall be notified
simultaneously to the LSE.
3. RIGHTS OF WITHDRAWAL
(a) If SunGard, having announced the Offer to be unconditional, fails to
comply by 3.30 p.m. on the Relevant Day (or such later time(s) and/or
date(s) as the Panel may agree) with any of the other relevant
requirements specified in sub-paragraph 2(a) of this Part B, an
accepting Rolfe & Nolan Shareholder may (unless the Panel otherwise
agrees) immediately thereafter withdraw his acceptance(s) of the Offer
by written notice signed by such Rolfe & Nolan Shareholder given by
post or by hand to IRG Plc, Balfour House, 390-398 High Road Ilford,
Essex IG1 1NQ. Subject to sub-paragraph 1(b) of this Part B, this
right of withdrawal may be terminated not less than eight days after
the Relevant Day by SunGard confirming, if such be the case, that the
Offer is still unconditional and complying with the other requirements
specified in sub-paragraph 2(a) of this Part B. If any such
confirmation is given, the first period of 14 days referred to in sub-
paragraph 1(c) of this Part B will run from the date of such
confirmation and compliance.
(b) If by 3:00 p.m. on 10 April 1998 (or such later time(s) and/or date(s)
as the Panel may agree) the Offer has not become unconditional, an
accepting Rolfe & Nolan Shareholder may withdraw his acceptance(s) at
any time thereafter by written notice received by IRG on behalf of
SunGard at the address and in the manner referred to in sub-paragraph
3(a) of this Part B, until the earlier of (i) the time when the Offer
becomes unconditional; and (ii) the final time for lodgement of
acceptances of the Offer which can be taken into account in accordance
with sub-paragraph 1(b) of this Part B.
(c) If a "no increase" and or "no extension" statement has been withdrawn
in accordance with sub-paragraph 1(c) of this Part B, any Rolfe &
Nolan Shareholder who accepts the Offer after such statement is made
may withdraw that acceptance thereafter in the manner referred to in
sub-paragraph 3(a) of this Part B not later than the eighth day after
the posting of written notice of such withdrawal to Rolfe & Nolan
Shareholders.
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(d) Except as provided by this paragraph 3 and sub-paragraph 7(c) of this
Part B, acceptances and elections shall be irrevocable.
(e) In this paragraph 3, "written notice" (including any letter of
appointment, direction or authority) means notice in writing bearing
the original signature(s) of the relevant accepting Rolfe & Nolan
Shareholder(s), or his/their agent(s) duly appointed in writing
(evidence of whose appointment is produced with the notice in a form
reasonably satisfactory to SunGard). Telex, e-mail or facsimile
transmission or copies will not be sufficient to constitute written
notice. No notice which is postmarked in, or otherwise appears to
SunGard or its agents to have been sent from Canada, Australia or Japan
will be treated as valid.
4. REVISED OFFER
(a) Although no such revision is envisaged, if the Offer (in its original
or any previously revised form) is revised and such revision
represents, on the date on which such revision is announced, (on such
basis as Broadview Associates may consider appropriate) an improvement
(or no diminution) in the value of the Offer as so revised compared
with the value of the overall consideration or terms previously
offered, the benefit of the revised Offer will, subject as provided in
sub-paragraphs 4(b) and 4(c) and paragraph 7 of this Part B, be made
available to Rolfe & Nolan Shareholders who have accepted the Offer in
its original or any previously revised form(s) (each a "Previous
Acceptor"). The acceptance by or on behalf of a Previous Acceptor of
the Offer in its original or any previously revised form(s) shall,
subject as provided in sub-paragraphs 4(b), (c), (d) and (e) of this
Part B and subject to any election for alternative forms of
consideration made as provided in the remainder of this paragraph 4(a),
be treated as an acceptance of the Offer so revised and shall also
constitute the separate appointment of SunGard and/or any director of
SunGard and/or Broadview Associates and/or any director of Broadview
Associates as his attorney and agent with authority to accept any such
revised Offer on behalf of the Previous Acceptor and, if such revised
Offer includes alternative forms of consideration, to make an election
as to the form of consideration and/or the proportion thereof on behalf
of a Previous Acceptor as such attorney and agent in his absolute
discretion thinks fit and to execute on behalf of and in the name of
such Previous Acceptor all such further documents (if any) as may be
required to give effect to such acceptances and/or elections. In making
any such election, such attorney and agent shall take into account the
nature of any previous acceptances and/or elections made by the
Previous Acceptor and such other facts or matters as he may reasonably
consider relevant.
(b) The deemed acceptance referred to and authorities conferred by sub-
paragraph 4(a) of this Part B shall not apply or (as the case may be)
be exercised if as a result thereof the Previous Acceptor would (on
such basis as Broadview Associates may consider appropriate) thereby
receive less in aggregate in consideration under the revised Offer than
he would have received in aggregate in consideration as a result of
acceptance of the Offer in the form in which it was originally accepted
by him having regard to any election or previous acceptance originally
made by him, unless the Previous Acceptor has previously agreed in
writing to receive less aggregate consideration.
(c) The deemed acceptance referred to and exercise of the powers of
attorney and agency so conferred by this paragraph 4 shall be
ineffective to the extent that a Previous Acceptor shall lodge, within
14 days of the posting of the document pursuant to which the revision
of the Offer is made available to Rolfe & Nolan Shareholders (or such
later date as SunGard may determine), a form in which he validly elects
(to the extent possible) to receive the consideration receivable by him
under the revised Offer in some other manner.
(d) Subject to sub-paragraph 4(c) of this Part B, the authorities referred
to in this paragraph 4 and any acceptance of a revised Offer and any
election pursuant thereto shall be irrevocable unless and until the
Previous Acceptor becomes entitled to withdraw his acceptance under
paragraph 3 of this Part B and duly does so.
(e) SunGard reserves the right to treat an executed Form of Acceptance
relating to the Offer (in its original or any previously revised
form(s)) which is received after the
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announcement or issue of the Offer in any revised form as a valid
acceptance of the revised Offer and/or, where applicable, a valid
election for or acceptance of any of the alternative forms of
consideration and such acceptance shall constitute an authority and
request in the terms of paragraph 4(a) of this Part B, mutatis mutandis,
on behalf of the relevant Rolfe & Nolan Shareholder.
5. ACCEPTANCES AND PURCHASES
Except as otherwise agreed by the Panel:
(a) an acceptance of the Offer shall not be treated as valid for the
purposes of the acceptance condition unless the requirements of Note 4
and, if applicable, Note 6 of Rule 10 of the City Code are satisfied
in respect of it;
(b) a purchase of Rolfe & Nolan Shares by SunGard or its nominee(s) or any
person acting in concert with it or its or their nominees will only be
treated as valid for the purposes of the acceptance condition if the
requirements of Note 5 and, if applicable, Note 6 of Rule 10 of the
City Code are satisfied in respect of it; and
(c) before the Offer may become unconditional, IRG must have issued a
certificate to SunGard and/or to Broadview Associates which states the
number of Rolfe & Nolan Shares in respect of which acceptances have
been received and which comply with paragraph 5(a) of this Part B, and
the number of Rolfe & Nolan Shares otherwise acquired, whether before
or during the Offer Period, which comply with paragraph 5(b) of this
Part B. Copies of such certificate will be sent to the Panel and to
the financial advisers of Rolfe & Nolan as soon as possible after
issue.
6. GENERAL
(a) Save with the consent of the Panel, the Offer will lapse unless all
the conditions have been satisfied or (if capable of waiver) waived
or, where appropriate, have been determined by SunGard in its
reasonable opinion to be or remain satisfied by, or where appropriate
at, midnight on 10 April 1998 or on the date which is 21 days after
the date on which the Offer becomes unconditional, whichever is the
later, or such later date as SunGard may, with the consent of the
Panel, decide. In such a case the Offer shall cease to be capable of
further acceptance and SunGard and Broadview Associates and Rolfe &
Nolan Shareholders shall thereupon cease to be bound by prior
acceptances.
(b) The expression "Offer Period" when used in this Offer Document means,
in relation to the Offer, the period commencing on 5 February 1998 and
ending on whichever of the following times shall be the latest:
(i) 3:00 p.m. on 20 March 1998; and
(ii) the earlier of:
(A) the time at which the Offer lapses; and
(B) the time at which the Offer becomes unconditional.
(c) The Offer will lapse if the proposed acquisition of Rolfe & Nolan is
referred to the Monopolies and Mergers Commission before 3:00 p.m. on
20 March 1998 or the date when the Offer becomes or is declared
unconditional as to acceptances, whichever is the later. If the Offer
so lapses, the Offer will cease to be capable of further acceptance
and accepting Rolfe & Nolan Shareholders and SunGard will thereupon
cease to be bound by any acceptance submitted before the time when the
Offer lapses.
(d) Except with the consent of the Panel, settlement of the consideration
to which any Rolfe & Nolan Shareholder is entitled under the Offer
will be implemented in full in accordance with the terms of the Offer
without regard to any lien, right of set-off, counterclaim or other
analogous right to which SunGard may otherwise be, or claim to be,
entitled as against any such shareholder.
(e) The terms, provisions, instructions and authorities contained in or
deemed to be incorporated in the Form of Acceptance constitute part of
the terms of the Offer. Words
I-8
<PAGE>
and expressions defined in this Offer Document have the same meanings
when used in the Form of Acceptance unless the context otherwise
requires.
(f) The Offer and the Form of Acceptance and all acceptances of the Offer
and elections in respect thereof and all contracts made pursuant to
the Offer and action taken or deemed to be taken under any of the
foregoing shall be governed by and construed in accordance with
English law.
Execution by or on behalf of a Rolfe & Nolan Shareholder of a Form of
Acceptance will constitute his submission, in relation to all matters
arising out of the Offer and the Form of Acceptance, to the jurisdiction
of the courts of England and the relevant shareholder's agreement that
nothing shall limit the right of SunGard or Broadview Associates to
bring any action, suit or proceeding arising out of or in connection
with the Offer and the Form of Acceptance in any other manner permitted
by law or in any court of competent jurisdiction.
(g) All references in this Offer Document and in the Form of Acceptance to
each of 20 March 1998 and the First Closing Date of the Offer shall
(except in sub-paragraphs 6(b) and 6(c) of this Part B and except
where the context otherwise requires) be deemed, if the expiry date of
the Offer be extended, to refer to the expiry date of the Offer as so
extended.
(h) Any omission to despatch the Offer Document and/or the Form of
Acceptance or any notice required to be despatched under the terms of
the Offer to, or any failure to receive the same by, any person to
whom the Offer is made, or should be made, shall not invalidate the
Offer in any way or create any implication that the Offer has not been
made to any such person. The Offer extends to any such person to whom
the Offer Document, the Form of Acceptance and any related documents
may not be despatched or who may not receive such documents, and such
persons may collect copies of such documents from IRG at the address
set out in paragraph 3(a) of this Part B.
(i) SunGard and Broadview Associates reserve the right to notify Rolfe &
Nolan Shareholders regarding any matter, including the making of the
Offer, to all or any Rolfe & Nolan Shareholders with a registered
address outside the UK or whom Rolfe & Nolan knows to be a nominee
holding Rolfe & Nolan Shares for such persons, by announcement or paid
advertisement in a daily newspaper published and circulated in the UK,
or any part thereof, in which event such notice shall be deemed to
have been sufficiently given, notwithstanding any failure by any such
shareholder(s) to receive or see such notice, and all references in
the Offer Document to notice or the provision of information in
writing by or on behalf of SunGard and/or Broadview Associates and/or
their respective agents shall be construed accordingly.
(j) Due completion of a Form of Acceptance will constitute an instruction
to SunGard, on the Offer becoming unconditional in all respects, to
cancel all mandates and other instructions entered in the records of
Rolfe & Nolan in force relating to holdings of Rolfe & Nolan Shares.
Such mandates and other instructions will not continue in force in
relation to New SunGard Common Stock issued to such shareholders.
(k) Without prejudice to any other provisions of this Part B, SunGard and
Broadview Associates reserve the right to treat acceptances as valid
if received by or on behalf of either of them at any place or places
or in any manner which may be otherwise than as set out herein or in
the Form of Acceptance.
(l) If sufficient acceptances are received and/or sufficient Rolfe & Nolan
Shares are otherwise acquired, SunGard intends to apply the provisions
of sections 428-430F of the Companies Act to acquire compulsorily any
outstanding Rolfe & Nolan Shares and to apply for the cancellation of
Rolfe & Nolan's listing of such shares on the LSE.
(m) All powers of attorney, appointment of agents and authorities on the
terms conferred by or referred to in this Appendix I or in the Form of
Acceptance are given by way of security for the performance of the
obligations of the Rolfe & Nolan Shareholder concerned and are
irrevocable in accordance with section 4 of the Powers of Attorney
I-9
<PAGE>
Act 1971 except in the circumstances where the grantor of such power of
attorney, appointment or authority is entitled to withdraw his
acceptance in accordance with paragraph 3 of this Part B and duly does
so.
(n) No acknowledgement of receipt of any Form of Acceptance, transfer by
means of CREST share certificate(s) and other document(s) will be
given by or on behalf of SunGard. All communications, notices,
certificates, documents of title and remittances to be delivered by or
sent to or from Rolfe & Nolan Shareholders (or their designated
agent(s)) will be delivered by or sent to or from them (or their
designated agent(s)) at their own risk.
(o) If the Offer does not become unconditional in all respects or lapses:
(i) the Form of Acceptance, share certificate(s) and other document(s)
of title will be returned by post (or by such other method as may
be approved by the Panel) within 14 days of the Offer lapsing, at
the risk of the person entitled thereto, to the person or agent
whose name and address is set out in Box 6 on the Form of
Acceptance or, if none is set out, to the first-named holder at his
registered address; and
(ii) IRG will, immediately after the lapsing of the Offer (or within
such longer period as the Panel may permit, not exceeding 14 days
of the lapsing of the Offer), give instructions to CRESTCo to
transfer all Rolfe & Nolan Shares held in escrow balances and in
relation to which it is the escrow agent for the purposes of the
Offer to the original available balances of Rolfe & Nolan
Shareholders concerned.
(p) The Rolfe & Nolan Shares which are the subject of the Offer will be
acquired free from all liens, charges, restrictions (including
restrictions imposed by law), third party rights, and encumbrances and
together with all rights now or hereafter attaching thereto, including
voting rights and the right to all dividends and other distributions
declared, paid or made hereafter.
(q) Save, in the case of any New SunGard Common Stock to be issued to any
Affiliate, as agreed under the terms of the Affiliate Agreements:
(i) the New SunGard Common Stock will be issued free from all liens,
charges and other encumbrances or other equitable interests; and
(ii) the New SunGard Common Stock will rank pari passu in all respects
with existing SunGard Common Stock, including the right to receive
in full all dividends (which are payable in US dollars), if any,
and other distributions declared, paid or made on such shares
after the date hereof.
(r) The Offer is made at 3:00 p.m. on 20 February 1998 and is capable of
acceptance from and after that time. Copies of this Offer Document and
Forms of Acceptance are available at IRG from that time at the address
set out in paragraph 3(a) of this Part B.
(s) In relation to any acceptance of the Offer in respect of a holding of
Rolfe & Nolan Shares which are in uncertificated form, SunGard
reserves the right to make such alterations, additions or
modifications as may be necessary or desirable to give effect to any
purported acceptance of the Offer, whether in order to comply with the
facilities or requirements of CREST or otherwise, provided such
alterations, additions or modifications are consistent with the
requirements of the City Code or are otherwise made with the consent
of the Panel.
(t) All references in this Appendix I to statutory provisions shall
include a statute or statutory provision which corrects, consolidates
or replaces the same (whether before or after the date hereof).
7. OVERSEAS SHAREHOLDERS
(a) The making of the Offer in, or to persons resident in or nationals of
or citizens of jurisdictions outside the UK or who are nominees of, or
custodians or trustees for, citizens or nationals of other countries
("overseas shareholders") may be affected by the laws of the relevant
jurisdictions. Such overseas shareholders should inform
I-10
<PAGE>
themselves about and observe any applicable legal requirements. It is
the responsibility of any overseas shareholder wishing to accept the
Offer to satisfy himself/herself as to the full observance of the laws
and regulatory requirements of the relevant jurisdiction in connection
therewith, including the obtaining of any governmental, exchange control
or other consents which may be required, or the compliance with other
necessary formalities needing to be observed and the payment of any
issue, transfer or other taxes or duties due in such jurisdiction. Any
such overseas shareholder will be responsible for any such issue,
transfer or other taxes or other payments by whomsoever payable and
SunGard and Broadview Associates (and any person acting on behalf of
either of them) shall be fully indemnified and held harmless by such
overseas shareholder for any such issue, transfer of other taxes or
duties as SunGard or Broadview Associates (and any person acting on
behalf of either of them) may be required to pay.
(b) In particular, the Offer is not being made, directly or indirectly, in
or into Canada, Australia or Japan. Furthermore, no steps have been
taken to qualify the New SunGard Common Stock for distribution in Japan
or any province or territory of Canada and no prospectus in relation to
the New SunGard Common Stock has been, or will be, lodged with or
registered by the Australian Securities Commission. SunGard will not
(unless otherwise determined by SunGard in its sole discretion and save
as provided for in paragraph 7(c) below) mail or deliver, or authorise
the mailing or delivery of, this Offer Document, the Form of Acceptance
or any related offering document in or into Canada, Australia or Japan
including to Rolfe & Nolan Shareholders with registered addresses in
Canada, Australia or Japan or to persons whom SunGard knows to be
trustees, nominees or custodians holding Rolfe & Nolan Shares for such
persons ("Restricted Overseas Person"). Persons receiving such
documents (including, without limitation, trustees, nominees or
custodians) should not distribute or send them in or into Canada,
Australia or Japan or use such mails or any such means or
instrumentality for any purpose directly or indirectly in connection
with the Offer and so doing may invalidate any purported acceptance.
Persons wishing to accept the Offer should not use such mails or any
such means or instrumentality for any purpose directly or indirectly
related to acceptance of the Offer. Envelopes containing the Form of
Acceptance should not be postmarked in Canada, Australia or Japan or
otherwise despatched from Canada, Australia or Japan and all acceptors
must provide addresses outside Canada, Australia or Japan for the
receipt of the consideration available under the Offer or for the
return of the Form of Acceptance, certificate(s) for Rolfe & Nolan
Shares and/or other document(s) of title. Unless an exemption under the
relevant securities laws is available as aforesaid, SunGard will not
issue New SunGard Common Stock or authorise the deliver of any
document(s) of title in respect of New SunGard Common Stock to (i) any
person who is, or who SunGard has reason to believe is, a Restricted
Overseas Person, or (ii) to any person who is unable or fails to give
the warranty set out in paragraph (b) of Part C below or (iii) to any
person with a registered address in Canada, Australia or Japan.
(c) These provisions and any other terms of the Offer relating to overseas
shareholders may be waived, varied or modified as regards specific
Rolfe & Nolan Shareholders or on a general basis by SunGard in its
absolute discretion. Subject thereto, the provisions of this paragraph
7 supersede any terms of the Offer inconsistent therewith. References
in this paragraph 7 to a Rolfe & Nolan Shareholder include references
to the person or persons executing a Form of Acceptance and, in the
event of more than one person executing the Form of Acceptance, the
provisions of this paragraph 7 shall apply to them jointly and
severally.
PART C
FORM OF ACCEPTANCE
Each Rolfe & Nolan Shareholder by whom, or on whose behalf, a Form of
Acceptance is executed irrevocably undertakes, represents, warrants and agrees
to and with SunGard, Broadview Associates and IRG, so as to bind such
shareholder, such shareholder's personal representatives, heirs, successors
and assigns, to the following effect:
I-11
<PAGE>
(a) that the execution of a Form of Acceptance (whether or not any boxes
therein are completed) shall constitute:
(i) an acceptance of the Offer in respect of the number of Rolfe &
Nolan Shares inserted or deemed to be inserted in Box 1 of the Form
of Acceptance,
(ii) an undertaking to execute any further documents and give any
further assurances which may be required to enable SunGard to
obtain the full benefit of this Part C and for SunGard and/or any
of its directors and/or Broadview Associates and/or any of its
directors and/or IRG to perfect any of the authorities to be given
hereunder;
in each case on and subject to the terms and conditions set out in this
Offer Document and the Form of Acceptance and, subject only to the
rights of withdrawal set out in paragraph 3 of Part B of this Appendix
I, each such acceptance shall be irrevocable;
(b) unless "YES" is put in Box 5 of the Form of Acceptance, such Rolfe &
Nolan Shareholder has not received or sent copies of this Offer
Document, the Form of Acceptance or any related offering documents in,
into or from Canada, Australia or Japan;
(c) that the Rolfe & Nolan Shares in respect of which the Offer is accepted
or deemed to be accepted are fully paid up and are sold free from all
liens, equitable interests, charges, restrictions (including
restrictions imposed by law), third party rights and encumbrances and
together with all rights now or hereafter attaching thereto, including
voting rights and the right to all dividends and other distributions
hereafter declared, paid or made;
(d) that the execution of the Form of Acceptance constitutes, subject to
the Offer becoming unconditional in all respects in accordance with its
terms and to the accepting Rolfe & Nolan Shareholder not having validly
withdrawn his acceptance, the irrevocable separate appointment of
SunGard and/or any of its directors and/or Broadview Associates and/or
any of its directors as such Rolfe & Nolan Shareholder's attorney
and/or agent, and an irrevocable instruction to the attorney and/or
agent to complete and execute all or any form(s) of transfer and/or
other document(s) at the attorney's and/or agent's discretion in
relation to the Rolfe & Nolan Shares referred to in sub-paragraph
(a)(i) of this Part C held in (or subsequently converted into)
certificated form in favour of SunGard or such other person or persons
as SunGard may direct and to deliver such form(s) of transfer and/or
other document(s) at the attorney's and/or agent's discretion together
with the share certificate(s) and/or other document(s) relating to such
Rolfe & Nolan Shares for registration within 6 months of the Offer
becoming or being declared unconditional in all respects and to do all
such other acts and things as may in the opinion of such attorney
and/or agent be necessary or expedient for the purposes of or in
connection with the acceptance of the Offer and to vest in SunGard or
any subsidiary or nominee(s) of such company the Rolfe & Nolan Shares
as aforesaid;
(e) that the execution of the Form of Acceptance constitutes the
irrevocable appointment of IRG as such shareholder's attorney and/or
agent and an irrevocable instruction and authority to the attorney
and/or agent (i) subject to the Offer becoming unconditional in all
respects in accordance with its terms and to an accepting Rolfe &
Nolan Shareholder not having validly withdrawn his acceptance, to
transfer to itself (or to such other person or persons as SunGard or
its agents may direct) by means of CREST all or any of the Relevant
Rolfe & Nolan Shares (but not exceeding the number of Rolfe & Nolan
Shares in respect of which the Offer is accepted or deemed to be
accepted) and (ii), if the Offer does not become unconditional in all
respects, to give instructions to CRESTCo, immediately after the
lapsing of the Offer (or within such longer period as the Panel may
permit, not exceeding 14 days of the lapsing of the Offer), to
transfer all Relevant Rolfe & Nolan Shares to the original available
balance of the accepting Rolfe & Nolan Shareholder. "Relevant Rolfe &
Nolan Shares" means Rolfe & Nolan Shares in uncertificated form and in
respect of which a transfer or transfers to escrow has or have been
effected pursuant
I-12
<PAGE>
to the procedures described in the letter from Broadview Associates
contained in this Offer Document and where the transfer(s) to escrow was
or were made in respect of Rolfe & Nolan Shares held under the same
member account ID and participant ID as the member account ID and
participant ID relating to the Form of Acceptance concerned (but
irrespective of whether or not any Form of Acceptance Reference Number,
or a Form of Acceptance Reference Number corresponding to that appearing
on the Form of Acceptance concerned, was included in the TTE instruction
concerned);
(f) that the execution of the Form of Acceptance constitutes, subject to
the Offer becoming or being declared unconditional in all respects in
accordance with its terms and to the accepting Rolfe & Nolan
Shareholder not having validly withdrawn his acceptance, an irrevocable
authority and request:
(i) to Rolfe & Nolan or its agents to procure the registration of the
transfer of the Rolfe & Nolan Shares pursuant to the Offer and, if
applicable, the delivery of the share certificate(s) and/or other
document(s) of title in respect thereof to SunGard or as it may
direct;
(ii) to SunGard or its agents to procure that such Rolfe & Nolan
Shareholder's name is entered on the share register of SunGard in
respect of New SunGard Common Stock to which such shareholder
becomes entitled under the Offer (subject to the provisions of
SunGard's certificate of incorporation and bylaws); and
(iii) to SunGard or its agents to procure the despatch by post (or by
such other method as may be approved by the Panel) of the
document(s) of title for any New SunGard Common Stock to which an
accepting Rolfe & Nolan Shareholder becomes entitled pursuant to
such Rolfe & Nolan Shareholder's acceptance of the Offer, at the
risk of such Rolfe & Nolan Shareholder, to the person whose name
and address is set out in Box 6 of the Form of Acceptance or, if
none is set out, to the first-named holder at such holder's
registered address provided that this is outside Canada, Australia
and Japan;
(g) that the execution of the Form of Acceptance constitutes separate
authority to SunGard and/or its directors and/or Broadview Associates
and/or its directors and/or their respective agents and the irrevocable
appointment of SunGard and/or its directors and/or Broadview Associates
and/or its directors as such shareholder's attorney and agent within
the terms of paragraph 4 of Part B of this Appendix I in respect of
those Rolfe & Nolan Shares in respect of which the Offer has been
accepted and such acceptance has not been validly withdrawn;
(h) that SunGard shall be entitled, after the Offer has become
unconditional in all respects (or if the Offer would become or be
declared unconditional in all respects or lapse immediately upon the
outcome of the resolution in question or if the Panel otherwise gives
its consent) and pending registration, to direct the exercise of any
votes and any or all other rights and privileges (including the right
to requisition the convening of a general meeting of Rolfe & Nolan or
of any class of its shareholders) attaching to any Rolfe & Nolan Shares
in respect of which the Offer has been accepted and such acceptance has
not been validly withdrawn, and with regard to any such Rolfe & Nolan
Shares, the execution of the Form of Acceptance will constitute an
authority to Rolfe & Nolan from such Rolfe & Nolan Shareholder to send
any notice, warrant or other document or communication (including any
share certificate(s) and/or other document(s) of title issued as a
result of conversion of such Rolfe & Nolan Shares into certificated
form) which may be required to be sent to him (as a member of Rolfe &
Nolan) to SunGard at its registered office or such other address
nominated by SunGard, and an authority to SunGard or any person
appointed by SunGard to sign any consent to short notice of a general
or separate class meeting on his behalf and/or execute a form of proxy
in respect of such Rolfe & Nolan Shares appointing and/or to appoint
any person determined by SunGard to attend general meetings and
separate class meetings of Rolfe & Nolan or its members or any of them
(and any adjournment thereof) and to exercise the votes attaching to
such Rolfe & Nolan Shares on his behalf, where relevant, such votes to
be cast so far as possible to satisfy any outstanding condition of the
Offer, and will also (subject as aforesaid) constitute the agreement of
I-13
<PAGE>
such Rolfe & Nolan Shareholder not to exercise any of such rights
without the consent of SunGard and the irrevocable undertaking of such
shareholder not to appoint a proxy for or to attend any such general
meetings or separate class meetings;
(i) that he will deliver to IRG at the address given in paragraph 3(a) of
Part B of this Appendix I his share certificate(s) and or other
document(s) of title in respect of the Rolfe & Nolan Shares referred to
in sub-paragraph (a)(i) of this Part C held by him in (or subsequently
converted into) certificated form or an indemnity acceptable to SunGard
in lieu thereof, as soon as possible and in any event within six months
of the Offer becoming or being declared unconditional in all respects;
(j) that he will take (or procure to be taken) the action set out in
paragraph 13 of the letter from Broadview Associates contained in this
Offer Document to transfer all Rolfe & Nolan Shares in respect of which
the Offer has been accepted or is deemed to have been accepted and not
validly withdrawn held by him in (or subsequently converted into)
uncertificated form to an escrow balance as soon as possible and in any
event so that the transfer to escrow settles within 6 months of the
Offer becoming unconditional in all respects;
(k) that if, for any reason, any Rolfe & Nolan Shares in respect of which a
transfer to an escrow balance has been effected in accordance with
paragraph 13 of the letter from Broadview Associates contained in this
Offer Document are converted to certificated form, he will (without
prejudice to paragraph (g) of this Part C) immediately deliver or
procure the immediate delivery of the share certificate(s) or other
document(s) of title in respect of all such Rolfe & Nolan Shares as so
converted to IRG at the address referred to in paragraph 3(a) of Part B
of this Appendix I or to SunGard at its registered office or as SunGard
or its agents may direct;
(l) that the execution of the Form of Acceptance constitutes his
submission, in relation to all matters arising out of the Offer and the
Form of Acceptance, to the jurisdiction of the courts of England;
(m) that on execution the Form of Acceptance shall take effect as a deed;
(n) that the terms of this Part C and the Offer generally shall be
incorporated in and form part of the Form of Acceptance, which shall be
read and construed accordingly;
(o) that, if he accepts the Offer, he shall do all such acts and things as
shall be necessary or expedient to vest in SunGard or its subsidiaries
or nominees or such other persons as it may decide the Rolfe & Nolan
Shares aforesaid and all such acts and things as may be necessary or
expedient to enable IRG to perform its functions as escrow agent for
the purposes of the Offer;
(p) that he agrees to ratify each and every act or thing which may be done
or effected by SunGard and/or any of its directors and/or Broadview
Associates and/or any of its directors or their respective agents or
Rolfe & Nolan or its agents, as the case may be, in the proper exercise
of any of his or its powers and/or authorities hereunder; and
(r) that he undertakes, if any provisions of Part B of this Appendix I or
this Part C shall in any way be unenforceable, invalid or not operate
so as to afford SunGard and/or Broadview Associates and/or their
respective agents the full benefit of the authorities expressed be
given herein, with all practicable speed to do all such acts and things
and execute all such documents as may be required or desirable to
enable SunGard and/or any of its directors and/or Broadview Associates
and/or any of its directors and/or IRG to secure the full benefit of
the authorities and powers of attorney conferred by or referred to in
Part B of this Appendix I or this Part C.
References in this Part C to a Rolfe & Nolan Shareholder shall include
references to the person or persons executing a Form of Acceptance and
in the event of more than one person executing a Form of Acceptance the
provisions of this Part C shall apply to them jointly and to each of
them.
I-14
<PAGE>
APPENDIX II
SUNGARD FINANCIAL STATEMENTS
INDEX TO SUNGARD FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
(i)SunGard Unaudited Interim Financial Statements.......................... II-2
(ii)Report of Independent Accountants...................................... II-8
(iii)SunGard Audited Annual Financial Statements........................... II-9
</TABLE>
ALL SHARE AND PER SHARE AMOUNTS IN SUNGARD'S UNAUDITED INTERIM FINANCIAL
STATEMENTS HAVE BEEN ADJUSTED TO REFLECT THE TWO-FOR-ONE STOCK SPLIT WHICH
OCCURRED IN SEPTEMBER 1997. THE SHARE AND PER SHARE AMOUNTS IN SUNGARD'S
ANNUAL FINANCIAL STATEMENTS HAVE NOT BEEN ADJUSTED FOR SUCH STOCK SPLIT.
II-1
<PAGE>
(I) SUNGARD UNAUDITED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current:
Cash and equivalents.............................. $ 32,841 $ 46,072
Trade receivables, less allowance for doubtful
accounts of $17,266 and $10,391.................. 153,748 130,404
Earned but unbilled receivables................... 36,524 27,842
Prepaid expenses and other current assets......... 20,415 18,507
Deferred income taxes............................. 20,628 13,632
--------- ---------
Total current assets............................ 264,156 236,457
Property and equipment, less accumulated
depreciation of $192,027 and $158,214.............. 116,673 109,523
Software products, less accumulated amortization of
$82,486 and $68,780................................ 79,393 71,917
Goodwill, less accumulated amortization of $29,804
and $23,444........................................ 159,470 156,796
Other intangible assets, less accumulated
amortization of $46,793 and $34,590................ 117,649 104,625
--------- ---------
$ 737,341 $ 679,318
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Short-term and current portion of long-term debt.. $ 20,847 $ 34,932
Accounts payable.................................. 12,383 13,531
Accrued compensation and benefits................. 39,428 41,581
Other accrued expenses............................ 26,969 24,004
Accrued income taxes.............................. 7,938 5,873
Deferred revenues................................. 100,916 90,345
--------- ---------
Total current liabilities....................... 208,481 210,266
--------- ---------
Long-term debt...................................... 3,037 4,414
--------- ---------
COMMITMENTS
Stockholders' equity:
Preferred stock, par value $.01 per share; 5,000
shares authorized................................ -- --
Common stock, par value $.01 per share; 120,000
shares authorized; 86,789 and 42,300 shares
issued........................................... 868 423
Capital in excess of par value.................... 181,880 175,937
Notes receivable for common stock................. (96) (559)
Restricted stock plans............................ (1,281) (1,535)
Retained earnings................................. 349,923 292,113
Foreign currency translation adjustment........... (5,381) (266)
--------- ---------
525,913 466,113
Treasury stock, at cost, 22 and 43 shares........... (90) (1,475)
--------- ---------
Total stockholders' equity...................... 525,823 464,638
--------- ---------
$ 737,341 $ 679,318
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
II-2
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues.......................... $ 609,557 $ 477,012 $ 214,485 $ 171,646
--------- --------- --------- ---------
Costs and expenses:
Cost of sales and direct
operating...................... 264,304 211,881 92,250 75,120
Sales, marketing and
administration................. 118,828 94,672 42,443 33,262
Product development............. 52,985 41,584 16,691 14,727
Depreciation of property and
equipment...................... 35,538 26,813 12,514 9,177
Amortization of intangible
assets......................... 33,666 23,781 11,126 9,924
Purchased in-process research
and development and other
costs.......................... 9,956 44,032 338 44,032
--------- --------- --------- ---------
515,277 442,763 175,362 186,242
--------- --------- --------- ---------
Income from operations............ 94,280 34,249 39,123 (14,596)
Interest income................. 1,374 4,198 397 518
Interest expense................ (2,015) (675) (694) --
--------- --------- --------- ---------
Income before income taxes........ 93,639 37,772 38,826 (14,078)
Income taxes.................... 38,661 17,386 16,057 (3,613)
--------- --------- --------- ---------
Net income........................ $ 54,978 $ 20,386 $ 22,769 $ (10,465)
========= ========= ========= =========
Fully diluted net income (loss)
per common share................. $ 0.62 $ 0.24 $ 0.26 $ (0.12)
========= ========= ========= =========
Shares used to compute fully
diluted net income per common
share............................ 88,620 86,276 88,900 86,460
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
II-3
<PAGE>
SUPPLEMENTAL INCOME STATEMENT INFORMATION
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Investment support systems....... $ 393,155 $ 288,904 $ 137,476 $ 103,978
Disaster recovery services....... 167,064 141,273 58,334 50,765
Computer services and other...... 49,338 46,835 18,675 16,903
--------- --------- --------- ---------
$ 609,557 $ 477,012 $ 214,485 $ 171,646
========= ========= ========= =========
Income from operations:
Investment support systems....... $ 68,719 $ 47,219 $ 24,537 $ 16,501
Disaster recovery services....... 34,307 31,218 13,505 12,207
Computer services and other...... 7,837 5,551 3,540 2,447
Corporate administration......... (6,627) (5,707) (2,121) (1,719)
Purchased in-process research and
development..................... (9,956) (44,032) (338) (44,032)
--------- --------- --------- ---------
$ 94,280 $ 34,249 $ 39,123 $ (14,596)
========= ========= ========= =========
Operating margin:
Investment support systems....... 17.5% 16.3% 17.8% 15.9%
========= ========= ========= =========
Disaster recovery services....... 20.5% 22.1% 23.2% 24.0%
========= ========= ========= =========
Computer services and other...... 15.9% 11.9% 19.0% 14.5%
========= ========= ========= =========
Total............................ 15.5% 7.2% 18.2% -8.5%
========= ========= ========= =========
Total, excluding one-time
charges......................... 17.1% 16.4% 18.4% 17.1%
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
II-4
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1997 1996
--------- ---------
<S> <C> <C>
Cash flow from operations:
Net income............................................. $ 54,978 $ 20,386
Reconciliation of net income to cash flow from
operations:
Depreciation and amortization.......................... 69,204 50,594
Purchased in-process research and development and
other costs........................................... 9,300 44,032
Other noncash charges.................................. 3,485 1,933
Deferred income tax benefit............................ (11,991) (19,547)
--------- ---------
124,976 97,398
Cash provided by (used for) working capital, net of
effect of acquired businesses:
Accounts receivable and other current assets........... (24,019) (2,079)
Accounts payable and accrued expenses.................. (4,891) (11,429)
Deferred revenues...................................... 3,615 1,014
--------- ---------
Cash flow from operations............................ 99,681 84,904
--------- ---------
Financing activities:
Cash received under employee stock plans............... 8,138 10,335
Cash paid for treasury stock........................... (140) (4,221)
Cash received under revolving line of credit and other
borrowings............................................ 168,098 --
Repayments of debt..................................... (186,588) (5,644)
--------- ---------
Total financing activities........................... (10,492) 470
--------- ---------
Long-term investment activities:
Cash paid for acquired businesses, net of cash
acquired.............................................. (57,852) (129,571)
Cash paid for property and equipment................... (37,810) (29,615)
Cash paid for software and other long-term assets...... (6,758) (4,876)
--------- ---------
Total long-term investment activities................ (102,420) (164,062)
--------- ---------
Decrease in cash and equivalents before short-term
investment activities.................................. (13,231) (78,688)
Short-term investment activities:
Purchase of short-term investments..................... -- (2,660)
Maturities of short-term investments................... -- 38,726
--------- ---------
Decrease in cash and equivalents........................ (13,231) (42,622)
Beginning cash and equivalents.......................... 46,072 79,091
--------- ---------
Ending cash and equivalents............................. $ 32,841 $ 36,469
========= =========
Supplemental information:
Acquired businesses:
Property and equipment................................. 5,643 7,440
Software products...................................... 16,507 35,233
Purchased in-process research and development.......... 9,300 37,400
Deferred income taxes.................................. 1,761 5,722
Goodwill and other intangible assets................... 30,474 59,808
Purchase price obligations and debt assumed............ (3,135) (2,840)
Net current liabilities assumed........................ (103) (13,192)
Common stock issued.................................... (2,595) --
--------- ---------
Cash paid for acquired businesses, net of cash
acquired............................................... $ 57,852 $ 129,571
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
II-5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine and three
month periods ended September 30, 1997 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1997. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended December 31, 1996.
2. ACQUISITIONS:
During the first nine months of 1997, the Company completed five business
acquisitions accounted for as purchase transactions. Three acquisitions were
in the Company's investment support systems business, and two were in its
disaster recovery services business. Total cash paid in connection with these
acquisitions was $57,125,000, subject to certain adjustments.
In connection with the acquisition of the Global Plus product line and certain
other assets of Premier Solutions Ltd., the Company engaged a nationally
recognized, independent appraisal firm to express an opinion on the fair
market value of the assets acquired to serve as the basis of allocation of the
purchase price to the various classes of assets acquired. During 1997, the
Company recorded a charge of $9,300,000, representing that portion of the
purchase price related to purchased in-process research and development. This
charge represents, as of the date of acquisition, the value of software
products still in development, but not considered to have reached
technological feasibility or to have any alternate future use. Global Plus is
a real-time, multi-currency trust and custody accounting system.
During the first nine months of 1997, the Company completed two acquisitions
accounted for as poolings-of-interests. In January 1997, the Company issued
764,655 shares of common stock in connection with the acquisition of GMI
Software, Inc. (GMI), a global provider of application software supporting
exchange-traded futures and options. In July 1997, the Company issued 121,788
shares of common stock in connection with the acquisition of Med Data Systems,
Inc. (Med Data), a domestic supplier of software used by hospitals and medical
centers to manage patient medical records. The accompanying consolidated
financial statements include the results of GMI from January 1, 1997, and Med
Data from July 1, 1997. Prior period consolidated financial statements have
not been restated because the effect of such restatement is not material.
Except for the charge related to purchased in-process research and development
described above, these acquisitions are not expected to have a material effect
on the Company's financial condition or results of operations.
3. SUBSEQUENT EVENT:
On October 17, 1997, the Company signed a definitive 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 the Company's common stock. Based upon the Company's
closing price of $24 1/16 on October 16, 1997, the shares to be issued by the
Company in the transaction, representing approximately fifteen percent of its
outstanding shares, will have a value of approximately $313 million. The
merger, which is subject to certain conditions including regulatory approval
and approval of the stockholders of Infinity, is expected to close by the end
of 1997 or early in 1998.
Infinity develops, markets and supports enterprise software solutions for
financial trading and risk management. Infinity, which was founded in 1989,
targets global organizations that manage complex financial assets.
II-6
<PAGE>
The Company expects that the merger will be accounted for as a pooling of
interests. The following unaudited pro forma combined condensed financial data
is provided for illustrative purposes only and assumes that the merger with
Infinity had occurred as of the beginning of each of the periods presented.
The following pro forma information should not be relied upon as necessarily
being indicative of the historical results that would have been obtained if
the companies had always been combined, or the results which may be obtained
in the future.
<TABLE>
<CAPTION>
NET INCOME PER
REVENUES OPERATING INCOME COMMON SHARE
----------------- ---------------- ----------------
ACTUAL PRO FORMA ACTUAL PRO FORMA ACTUAL PRO FORMA
------- --------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Nine months ended Sept.
30, 1997 ................ 609,557 655,766 94,280 101,614 0.62 0.59
------- ------- ------ ------- ---- ----
Nine months ended Sept.
30, 1996 ................ 477,012 505,576 34,249 40,323 0.24 0.24
------- ------- ------ ------- ---- ----
Year ended Dec. 31, 1996.. 670,309 711,857 59,786 68,285 0.41 0.41
------- ------- ------ ------- ---- ----
Year ended Dec. 31, 1995.. 532,628 557,366 80,076 85,752 0.61 0.55
------- ------- ------ ------- ---- ----
Year ended Dec. 31, 1994.. 437,190 449,785 70,326 72,450 0.56 0.50
======= ======= ====== ======= ==== ====
</TABLE>
4. Fully diluted net income per common share was calculated using the
weighted-average number of common shares and common-equivalent shares
outstanding during the period. Common-equivalent shares are principally
attributable to unexercised stock options. In February 1997, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 128, "Earnings Per Share" (SFAS 128), which specifies a new methodology
for the computation, presentation and disclosure of earnings per share and
makes the U.S. standard for computing earnings per share more compatible with
that of other countries and with the International Accounting Standards
Committee.
SFAS 128 requires a dual presentation of basic and diluted earnings per share.
The new standard is required to be adopted in the fourth quarter of 1997.
While early adoption is not permitted, SFAS 128 requires restatement of all
prior period earnings per share data at the time of adoption. The Company's
new earnings per share amounts are not expected to be materially different
from those computed under the present accounting standard for the nine and
three months ended September 30, 1997 and 1996.
5. On August 15, 1997, the Company's Board of Directors authorized a two-for-
one stock split of the Company's common stock. The stock split was effective
for stockholders of record on September 2, 1997, and shares were issued on
September 22, 1997. The number of shares used for purposes of calculating net
income per common share and all per share data have been adjusted for all
periods presented to reflect this stock split.
II-7
<PAGE>
(II) REPORT OF INDEPENDENT ACCOUNTANTS
To The Board of Directors and Stockholders SunGard Data Systems Inc.:
We have audited the accompanying consolidated balance sheets of SunGard
Data Systems Inc. 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 three years in the period ended December 31, 1996. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of SunGard Data Systems Inc. and subsidiaries as of December 31, 1996 and
1995, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 13, 1997
II-8
<PAGE>
(III) SUNGARD AUDITED ANNUAL FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
----------- --------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current:
Cash and equivalents................................... $ 46,072 $ 79,091
Short-term investments, at cost, which approximates
market................................................ -- 36,066
Trade receivables, less allowance for doubtful accounts
of $10,391 and $6,426................................. 130,404 118,169
Earned but unbilled receivables........................ 27,842 25,090
Prepaid expenses and other current assets.............. 18,507 16,020
Deferred income taxes.................................. 13,632 6,727
-------- --------
Total current assets................................. 236,457 281,163
Property and equipment, less accumulated depreciation of
$158,214 and $126,580................................... 109,523 95,745
Software products, less accumulated amortization of
$68,780 and $59,033..................................... 71,917 35,375
Goodwill, less accumulated amortization of $23,444 and
$19,658................................................. 156,796 116,455
Other intangible assets, less accumulated amortization of
$34,590 and $27,015..................................... 104,625 50,996
-------- --------
$679,318 $579,734
======== ========
LIABILITIES AND STOCKHOLDERS EQUITY
Current:
Short-term and current portion of long-term debt....... $ 34,932 $ 6,761
Accounts payable....................................... 13,531 12,428
Accrued compensation and benefits...................... 41,581 29,330
Other accrued expenses................................. 24,004 15,773
Accrued income taxes................................... 5,873 10,639
Deferred revenues...................................... 90,345 72,642
-------- --------
Total current liabilities............................ 210,266 147,573
-------- --------
Long-term debt........................................... 4,414 3,241
-------- --------
Deferred income taxes.................................... -- 6,628
-------- --------
COMMITMENTS
Stockholders' equity:
Preferred stock, par value $.01 per share; 5,000 shares
authorized............................................ -- --
Common stock, par value $.01 per share; 60,000 shares
authorized; 42,300 and 42,111 shares issued........... 423 421
Capital in excess of par value......................... 175,937 171,558
Notes receivable for common stock...................... (559) (2,817)
Restricted stock plans................................. (1,535) (220)
Retained earnings...................................... 292,113 260,172
Foreign currency translation adjustment................ (266) (1,279)
-------- --------
466,113 427,835
Treasury stock, at cost, 43 and 189 shares.............. (1,475) (5,543)
-------- --------
Total stockholders' equity........................... 464,638 422,292
-------- --------
$679,318 $579,734
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
II-9
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Revenues........................................... $670,309 $532,628 $437,190
Costs and expenses:
Cost of sales and direct operating................ 291,580 234,011 194,838
Sales, marketing and administration............... 135,403 109,226 89,579
Product development............................... 61,474 50,338 36,741
Depreciation of property and equipment............ 37,356 30,807 24,268
Amortization of intangible assets................. 33,627 23,932 21,438
Purchased in-process research and development and
other costs...................................... 51,083 4,238 --
-------- -------- --------
610,523 452,552 336,864
-------- -------- --------
Income from operations............................. 59,786 80,076 70,326
Interest income, net.............................. 3,783 5,036 2,202
-------- -------- --------
Income before income taxes......................... 63,569 85,112 72,528
Income Taxes...................................... 28,668 36,440 29,441
-------- -------- --------
Net income......................................... $ 34,901 $ 48,672 $ 43,087
======== ======== ========
Fully diluted net income per common share.......... $ 0.81 $ 1.23 $ 1.12
======== ======== ========
Shares used to compute fully diluted net income per
common share...................................... 43,061 39,668 38,502
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
II-10
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1996 1995 1994
--------- -------- --------
<S> <C> <C> <C>
CASH FLOW FROM OPERATIONS
Net income..................................... $ 34,901 $ 48,672 $ 43,087
Reconciliation of net income to cash flow from
operations:
Depreciation and amortization.................. 70,983 54,739 45,706
Purchased in-process research and development
and other charges............................. 51,083 -- --
Other noncash charges.......................... 2,529 1,886 1,286
Deferred income tax benefit.................... (21,921) (1,374) (3,668)
--------- -------- --------
137,575 103,923 86,411
Cash provided by (used for) working capital,
net of effect of acquired businesses:
Accounts receivable and other current assets... (9,669) (30,650) (11,536)
Accounts payable and accrued expenses.......... 863 9,729 4,594
Deferred revenues.............................. 5,396 7,007 10,300
--------- -------- --------
Cash flow from operations..................... 134,165 90,009 89,769
--------- -------- --------
FINANCING ACTIVITIES
Cash received under employee stock plans....... 12,246 5,999 3,687
Cash paid for treasury stock................... (4,221) (10,029) (7,979)
Borrowings under line of credit................ 18,000 -- --
Repayments of debt............................. (9,274) (8,594) (2,121)
--------- -------- --------
Total financing activities..................... 16,751 (12,624) (6,413)
--------- -------- --------
LONG-TERM INVESTMENT ACTIVITIES
Cash paid for acquired businesses, net of cash
acquired...................................... (165,682) (27,294) (28,061)
Cash paid for property and equipment........... (41,347) (31,652) (34,286)
Cash paid for software and other assets........ (12,972) (5,879) (3,191)
--------- -------- --------
Total long-term investment activities.......... (220,001) (64,825) (65,538)
--------- -------- --------
Increase (decrease) in cash and equivalents
before short-term investment activities........ (69,085) 12,560 17,818
SHORT-TERM INVESTMENT ACTIVITIES
Purchase of short-term investments............. (2,660) (56,188) (48,775)
Maturities of short-term investments........... 38,726 54,228 47,493
Increase (decrease) in cash and equivalent...... (33,019) 10,600 16,536
Beginning cash and equivalents.................. 79,091 68,491 51,955
--------- -------- --------
Ending cash and equivalents..................... $ 46,072 $ 79,091 $ 68,491
========= ======== ========
SUPPLEMENT INFORMATION
Interest paid.................................. $ 1,213 $ 919 $ 703
Income taxes paid.............................. $ 50,140 $ 33,556 $ 30,405
========= ======== ========
Acquired businesses:
Property and equipment......................... $ 11,690 $ 4,719 $ 2,250
Software products.............................. 42,110 14,597 2,620
Purchased in-process research and development.. 44,451 -- --
Goodwill and other intangible assets........... 98,320 31,933 38,274
Deferred income taxes.......................... 9,447 379 (3,234)
Purchase price obligations and debt assumed.... (20,217) (7,769) (5,184)
Net current liabilities assumed................ (20,119) (1,117) (6,665)
Common stock issued............................ -- (15,521) --
--------- -------- --------
Cash paid for acquired businesses, net of cash
acquired of $132, $8,077 and $12,777 in 1996,
1995 and 1994, respectively.................. $ 165,682 $ 27,294 $ 28,061
========= ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
II-11
<PAGE>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
FOREIGN
CAPITAL NOTES RESTRICTED CURRENCY
NUMBER OF PAR EXCESS OF RECEIVABLE FOR STOCK RETAINED TRANSLATION NUMBER
SHARES VALUE PAR VALUE COMMON STOCK PLANS EARNINGS ADJUSTMENT OF SHARES COST TOTAL
--------- ----- --------- -------------- ---------- -------- ----------- --------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December
31, 1993.......... 18,801 $188 $161,149 $ -- $(2,156) $162,034 $(4,041) (6) $ (214) $316,960
Net income....... -- -- -- -- -- 43,087 -- -- -- 43,087
Purchase of
common stock..... -- -- -- -- -- -- -- (212) (7,979) (7,979)
Shares issued
under restricted
stock plans,
net.............. 5 -- 164 -- (164) -- -- -- -- --
Shares issued
under stock
purchase, option
and award plans.. 92 1 522 -- -- -- -- 87 3,164 3,687
Compensation
expense related
to restricted
stock plans...... -- -- -- -- 1,462 -- -- -- -- 1,462
Income tax
benefit arising
from transaction
in common stock
options.......... -- -- 400 -- -- -- -- -- -- 400
Foreign currency
translation
adjustment....... -- -- -- -- -- -- 1,675 -- -- 1,675
------ ---- -------- ------- ------- -------- ------- ----- ------- --------
Balances, December
31, 1994.......... 18,898 189 162,235 -- (858) 205,121 (2,366) (131) (5,029) 359,292
Poolings-of-
interest......... 4,253 43 8,878 (3,332) -- 9,800 32 -- -- 15,421
Net income....... -- -- -- -- -- 48,672 -- -- -- 48,672
Two-for-one
common stock
split............ 18,898 189 (189) -- -- -- -- (91) -- --
Purchase of
common stock..... -- -- -- -- -- -- -- (400) (10,029) (10,029)
Note repayments.. -- -- -- 515 -- -- -- -- -- 515
Shares issued
under stock
purchase, option
and award plans.. 62 -- 84 -- -- (3,421) -- 433 9,515 6,178
Compensation
expenses related
stock plans...... -- -- -- -- 638 -- -- -- -- 638
Income tax
benefit arising
from transactions
in common stock
options.......... -- -- 550 -- -- -- -- -- -- 550
Foreign currency
translation
adjustment....... -- -- -- -- -- -- 1,055 -- -- 1,055
------ ---- -------- ------- ------- -------- ------- ----- ------- --------
Balances, December
31, 1995.......... 42,111 421 171,558 (2,817) (220) 260,172 (1,279) (189) (5,543) 422,292
Net income....... -- -- -- -- -- 34,901 -- -- -- 34,901
Purchase of
common stock..... -- -- -- -- -- -- -- (131) (4,221) (4,221)
Note repayments.. -- -- -- 2,258 -- -- -- -- -- 2,258
Shares issued
under restricted
stock plans...... 50 -- 1,687 -- (1,687) -- -- -- -- --
Shares issued
under stock
purchase, option
award plans...... 139 2 1,520 -- -- (2,960) -- 277 8,289 6,851
Compensation
expense related
to restricted
stock plans...... -- -- -- -- 372 -- -- -- -- 372
Income tax
benefit arising
from transaction
in common stock
options.......... -- -- 1,172 -- -- -- -- -- -- 1,172
Foreign currency
translation
adjustment....... -- -- -- -- -- -- 1,013 -- -- 1,013
------ ---- -------- ------- ------- -------- ------- ----- ------- --------
Balances, December
31, 1996.......... 42,300 $423 $175,937 $ (559) $(1,535) $292,113 $ (266) (43) $(1,475) $464,638
====== ==== ======== ======= ======= ======== ======= ===== ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
II-12
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
SunGard Data Systems Inc. (the "Company"), through its wholly owned
subsidiaries, operates in a single industry segment, principally in the United
States, providing computer services, principally proprietary processing
services and software to the financial services industry, computer disaster
recovery services and healthcare information systems. The consolidated
financial statements include the accounts of the Company and its subsidiaries.
All significant intercompany transactions and accounts have been eliminated.
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,
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. Future events could cause actual results to differ from
those estimates. The Company amortizes intangible assets, including software
product costs, over periods that it believes approximate the related useful
lives of those assets based upon estimated future operating results and cash
flows of the underlying business operations. It is possible that the Company's
estimates of those lives could change based upon changes in numerous factors,
including product demand, market conditions, technological developments,
economic conditions and competitor activities.
Revenue Recognition
Revenues from remote processing, disaster recovery and software maintenance
services are recognized over the terms of the related contracts or as the
related service is provided. License-fee revenues from proprietary products
are generally recognized upon the signing of a contract and delivery of the
product, except in those instances where the Company provides training,
installation and other significant post-delivery services. In those instances,
a portion of the contract price is deferred and recognized as the related
services are provided. License-fee revenues from proprietary products that are
paid for over an extended period of time and are bundled together with
computer equipment and other post-delivery services, and for which significant
credit, technology or service risks exist, are recorded ratably over the
contract period. Revenues from fixed-fee contracts requiring a significant
amount of program modification or customization, installation, systems
integration and/or related services are recognized based upon the estimated
percentage of completion. Changes in estimated costs during the course of a
contract are reflected in the period in which the facts become known.
Cash Equivalents and Short-Term Investments
Cash in excess of daily requirements is invested primarily in institutional
money-market funds, commercial paper, time deposits, certificates of deposit
and short-term bonds. Investments purchased with a maturity of three months or
less at the date of purchase are considered to be cash equivalents; those with
maturities greater than three months are considered to be short-term
investments.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations
of credit risk consist of temporary cash and short-term investments and
receivables. By policy the Company places its temporary cash and short-term
investments with institutions of high credit-quality and limits the amount of
credit exposure to any one issuer. The Company sells a significant portion of
its products and services to the financial services industry and could be
directly affected by the overall condition of that industry. The Company
believes that any credit risk associated with receivables is substantially
mitigated by a relatively large number of customer accounts and reasonably
short collection terms. Receivables are stated at estimated net realizable
value, which approximates fair value.
II-13
<PAGE>
Property and Equipment
Property and equipment are recorded at cost, and depreciation is provided on
the straight-line method over the estimated useful lives of the related assets
(two to eight years for equipment and ten to forty years for buildings and
improvements). Leasehold improvements are amortized ratably over their
remaining lease term or useful life, if shorter.
Foreign Currency Translation
The functional currency of each of the Company's foreign operations is the
local currency of the country in which the operation is headquartered.
Accordingly, all assets and liabilities are translated into U.S. dollars using
exchange rates in effect at the balance sheet date. Revenues and expenses are
translated using average exchange rates during the period. Increases and
decreases in net assets resulting from foreign currency translation are
accumulated as a separate component of stockholders' equity.
Software Development and Product Costs
Product development costs are expensed as incurred and consist primarily of
design and development costs of new products and significant enhancements
incurred prior to the establishment of technological feasibility. Costs
associated with purchased software, software obtained through business
acquisitions, and new products and enhancements to existing products that meet
technological feasibility and recoverability tests are capitalized and
amortized over the estimated useful lives of the related products, generally
five to ten years, using the straight-line method or the ratio of current
revenues to current and anticipated revenues from such software, whichever
provides the greater amortization. Amortization of all software products
aggregated $15,358,000, $9,601,000 and $9,778,000 during 1996, 1995 and 1994,
respectively.
Goodwill
Goodwill represents the excess of cost over the fair value of net assets
acquired and is amortized using the straight-line method over periods ranging
from twelve to forty years. The recoverability of goodwill is periodically
reviewed by the Company. In assessing recoverability, many factors are
considered, including operating results and cash flows of the acquired
businesses, as well as benefits that the acquired businesses contribute to
existing and related products, services and markets. After consideration of
these factors during 1996, the Company shortened the remaining life of
goodwill related to one acquisition and concluded that goodwill related to
another business that was acquired more than ten years ago, the principal
markets of which were state and municipal governments and thrift institutions,
was impaired. Therefore, during 1996, the Company wrote off the remaining
amount of goodwill associated with this acquisition, which totaled $5,157,000.
The Company believes that no further impairment of goodwill existed at
December 31, 1996.
Other Intangible Assets
Other intangible assets consist primarily of contract rights, customer bases
and noncompetition agreements obtained in business acquisitions. Contract
rights and customer bases are amortized using the straight-line method over
their estimated useful lives, ranging from five to thirty years.
Noncompetition agreements are amortized using the straight-line method over
the term of such agreements, ranging from three to seven years.
Income Taxes
The Company recognizes deferred tax assets and liabilities based upon the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Deferred tax assets and liabilities are
calculated based on the difference between the financial and tax bases of
assets and liabilities using the currently enacted tax rates in effect during
the years in which the differences are expected to reverse.
Fully Diluted Net Income Per Common Share
Fully diluted net income per common share is calculated using the weighted-
average number of common and common-equivalent shares outstanding during the
year. Common-
II-14
<PAGE>
equivalent shares are attributable to unexercised stock options. Primary net
income per common share approximates fully diluted net income per common
share.
2.ACQUISITIONS
Purchase Transactions
During 1996, the Company completed eight business acquisitions accounted for
as purchase transactions. Five acquisitions were in the Company's investment
support systems business and three were in its disaster recovery services
business.
Total cash paid in connection with these acquisitions was $158,080,000,
subject to certain adjustments. Goodwill recorded in connection with these
acquisitions was approximately $42,681,000. In addition, contingent payments
of up to $11,000,000 (including 9,500,000 Australian dollars, or approximately
$7,500,000 at December 31, 1996) may be paid in connection with three of these
acquisitions, depending upon each business achieving certain future financial
results.
During 1996, the Company recorded a charge of $44,451,000 ($0.64 per fully
diluted share) for purchased in-process research and development associated
with the acquisitions of NCS Financial Systems, Inc. (NCS) and two small
investment support systems businesses.
In connection with the acquisition of NCS, the Company engaged a nationally
recognized, independent appraisal firm to express an opinion on the fair
market value of the assets acquired to serve as the basis of allocation of the
purchase price to the various classes of assets acquired. While the allocation
of the purchase price is still preliminary (primarily since both the Company
and National Computer Systems, Inc., previously the parent company of NCS,
have not yet finalized the allocation of the purchase price for tax purposes),
the Company has recorded a charge against earnings for that portion of the
purchase price related to purchased in-process research and development. This
charge represents, as of the date of acquisition, the value of software
products still in development, but not considered to have reached
technological feasibility or to have any alternate future use.
Also during 1996, the Company paid an additional 50,000,000 Swedish Kroner
(approximately $7,452,000) as the contingent portion of the purchase price
related to a 1992 acquisition. Goodwill was increased by the amount of that
payment.
During 1995, the Company completed six business acquisitions accounted for
as purchase transactions. Four acquisitions were in the Company's investment
support systems business and two were in its disaster recovery services
business.
Total cash paid in connection with these acquisitions was approximately
$23,962,000, subject to certain adjustments. Goodwill recorded in connection
with these acquisitions was approximately $13,838,000. In addition, contingent
payments of up to $10,500,000 may be paid in connection with two of these
acquisitions, depending upon each business achieving certain future financial
results.
Also during 1995, the Company paid $11,179,000 as the contingent portion of
the purchase price in connection with a 1992 acquisition. Goodwill was
increased during 1995 by the amount of that payment. During 1994, the Company
completed four business acquisitions. Two acquisitions were in the Company's
investment support systems business and two were in its disaster recovery
services business. Total cash paid in connection with these acquisitions was
approximately $28,307,000. Goodwill recorded in connection with these
acquisitions was approximately $12,956,000. The results of operations of these
acquired businesses have been included in the accompanying Consolidated
Statements of Income from the date of acquisition. Pro forma combined results
of operations are not presented since the results of operations as reported in
the accompanying Consolidated Statements of Income would not be materially
different.
Pooling ofInterests Transactions
During 1995, the Company issued a total of 4,253,000 shares of common stock
in connection with three business combinations accounted for as poolings of
interests. Two of the
II-15
<PAGE>
combinations form the nucleus of a new operating group that provides work-flow
management and document-imaging systems primarily to the healthcare industry.
The remaining combination was in the Company's investment support systems
business and provides trading, risk management and accounting systems
primarily to the financial services industry. During 1995, the Company
recorded merger costs of $4,238,000 ($0.10 per fully diluted share) in
connection with these transactions. These costs consist primarily of
investment banking, legal and accounting fees that are not deductible for
income tax purposes. The consolidated results of operations for the year ended
December 31, 1995 include the operations of each of these businesses from the
beginning of the quarter in which the business combination was completed. The
consolidated financial statements for prior periods have not been restated
since the impact of such restatement would not be material.
3.PROPERTY AND EQUIPMENT
Property and equipment consist of the following at December 31 (in
thousands):
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Computer and telecommunications equipment.............. $ 166,934 $ 142,387
Leasehold improvements................................. 38,403 32,082
Office furniture and equipment......................... 38,292 27,156
Buildings and improvements............................. 18,490 16,059
Land................................................... 2,285 2,229
Construction in progress............................... 3,333 2,412
--------- ---------
267,737 222,325
Accumulated depreciation and amortization.............. (158,214) (126,580)
--------- ---------
$ 109,523 $ 95,745
========= =========
</TABLE>
4.LONG-TERM DEBT
Long-term debt consists of the following at December 31 (in thousands):
<TABLE>
<CAPTION>
1996 1995
-------- -------
<S> <C> <C>
Bank credit agreement (5.7 per cent. interest rate)..... $ 15,000 $ --
Other bank debt (8 per cent. interest rate)............. 16,813 --
Purchase price obligations due former owners of acquired
businesses............................................. 5,302 6,610
Other, primarily capital lease obligations for computer
equipment and buildings................................ 2,231 3,392
-------- -------
39,346 10,002
Less current maturities................................. (34,932) (6,761)
-------- -------
$ 4,414 $ 3,241
======== =======
</TABLE>
The Company has an unsecured revolving credit agreement (Credit Agreement)
that provides for up to $150,000,000 of borrowings for an initial period
ending August 2001. Thereafter, the Credit Agreement may be extended for one
year, on an annual basis, at the lender's option. The Company may borrow at
LIBOR plus a margin, depending upon certain financial ratios at the time of
the borrowing, or a base rate, generally the Prime rate, at the Company's
option. In order to remain eligible to borrow under the Credit Agreement, the
Company must, among other requirements, maintain a defined minimum net worth,
maintain a defined minimum fixed-charge coverage ratio, and limit its total
debt. Borrowings under the Credit Agreement at December 31, 1996 were
$15,000,000.
Annual maturities of long-term debt during the next five years are as
follows: 1997-- $34,932,000; 1998--$2,309,000; 1999--$491,000; 2000--$111,000;
and 2001--$91,000.
5.STOCK OPTION AND AWARD PLANS
Employee Stock Purchase Plans
Under the Company's Employee Stock Purchase Plans, a maximum of 2,200,000
shares of common stock may be issued to substantially all full-time employees.
Eligible employees may purchase a limited number of shares of common stock
each quarter through payroll deductions, at a purchase price equal to 85 per
cent. of the closing price of the Company's common stock on the last business
day of each calendar quarter. During 1996, 1995 and 1994, employees
II-16
<PAGE>
purchased 152,000, 156,000 and 173,000 shares, respectively, at average
purchase prices of $33.50, $22.49 and $15.49 per share, respectively. At
December 31, 1996, 1,057,000 shares of common stock were reserved for issuance
under these plans.
Equity Incentive Plans
Under the Company's 1994 and 1996 Equity Incentive Plans, awards or options
to purchase up to 2,750,000 shares of common stock may be granted to key
employees of the Company, with an individual limit of 200,000 shares per
participant per year under each plan. Options may be either incentive stock
options or nonqualified stock options, and the option price generally must be
at least equal to the fair value of the Company's common stock on the date of
award or grant. Generally, options are granted for a ten-year term and become
fully exercisable one year from the date of grant, subject to a four- or five-
year vesting schedule.
During 1996, 1995 and 1994, long-term incentive awards (LTIP awards) were
granted for future options of up to an aggregate of 294,000, 88,000 and 84,000
shares, respectively. The actual number of shares and the exercise price per
share are contingent upon achieving certain cumulative financial results over
a three-year period, beginning on January 1 of the year of each LTIP award. If
and when the option shares are earned, the exercise price per share will be
$28.54, $19.05 and $19.33, respectively, but could be reduced to a minimum of
$16.48, $12.09 and $12.37, respectively, if actual operating results during
the three-year period exceed targeted operating results. Compensation expense,
if any, is estimated initially at the time the achievement of the cumulative
financial results becomes probable and is recorded over the remaining three-
year period of each LTIP award, based upon the difference between the market
value and exercise price of the shares earned. During the years ended December
31, 1996 and 1995, compensation expense of $1,875,000 and $631,000,
respectively, was recorded in connection with certain 1995 and 1994 LTIP
awards. No compensation expense has been recorded for the 1996 LTIP awards.
Under the Company's 1986 and 1982 Stock Option Plans, options to purchase up
to 4,094,000 shares of the Company's common stock may be issued to officers
and key employees. These options may be either incentive stock options or
nonqualified stock options, and the option price must be at least equal to the
fair value of the Company's common stock on the date of grant. Generally,
options are granted for a ten-year term and become fully exercisable one year
from the date of grant, subject to a four- or five-year vesting schedule.
The table on page II-18 summarizes transactions under these equity incentive
and stock option plans. All share and per share amounts have been restated to
reflect a July 1995 two-for-one stock split (see Note 10).
At December 31, 1996, 4,061,000 shares of common stock were reserved for
issuance under the Company's equity incentive and stock option plans.
Restricted Stock Plans
The Company's Restricted Stock Award Plan for Outside Directors (RSAP)
provides for awards of up to 200,000 shares of the Company's common stock.
Each outside director automatically receives an initial award of 10,000 shares
of the Company's common stock upon election to the Company's Board of
Directors and, upon re-election as an outside director every fifth year
thereafter, automatically receives another 10,000 shares. Shares awarded under
the RSAP are subject to certain transfer and forfeiture restrictions that
lapse over a five-year vesting period. RSAP awards for 50,000 shares were
granted during 1996, and an RSAP award for 10,000 shares was granted during
1994, at market values of $33.75 and $17.31 per share, respectively. There
were no awards during 1995. At December 31, 1996, 71,000 shares of common
stock were reserved for issuance under this plan.
The Company's Restricted Stock Incentive Plan (RSIP) provides for awards of
up to 800,000 shares of the Company's common stock to key management
employees. Shares awarded under the RSIP are subject to certain transfer and
forfeiture restrictions that lapse over a five-year vesting period. There have
been no awards granted since 1991. At December 31, 1996, 107,000 shares of
common stock were reserved for issuance under this plan.
II-17
<PAGE>
Unearned compensation expense related to the restricted stock plans is
reported as a reduction of stockholders' equity in the accompanying
consolidated financial statements. For accounting purposes, compensation
expense is recorded ratably over the five-year period during which the shares
are subject to transfer and forfeiture restrictions and is based on the market
value on the award date less the par value of the shares awarded. Compensation
expense related to the RSAP and RSIP aggregated $372,000, $638,000 and
$1,462,000 for the years ended December 31, 1996, 1995 and 1994, respectively.
Pro Forma Information
The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees," in accounting for its stock option and award plans. Accordingly,
compensation expense has been recorded for its LTIP, RSAP and RSIP awards, and
no expense has been recorded for its other stock-based plans. FASB Statement
No. 123, "Accounting for Stock-Based Compensation" (SFAS 123), changes the
method for recognition of cost on stock option and award plans that are
similar to those of the Company. Adoption of the cost recognition requirements
under SFAS 123 is optional; however, pro forma information is presented in the
following paragraph.
Had compensation cost for the Company's stock option and award plans been
determined based upon the fair value at the date of grant, as prescribed under
SFAS 123, the Company's net income and earnings per share would have been
reduced by approximately $5,110,000 and $1,185,000, or $0.12 and $0.03 per
share, in 1996 and 1995, respectively. The fair value of the options granted
during 1996 and 1995 is estimated to be $16.72 and $12.11 per share,
respectively, on the date of grant using the Black-Scholes pricing model with
the following assumptions: volatility of 37 per cent.; expected term of six
years; risk- free interest rate of 6.5 per cent.; and no dividend yield. The
effects of applying SFAS 123 in this pro forma disclosure are not necessarily
indicative of the impact on future years, since SFAS 123 does not apply to
grants and awards made prior to 1995 and the Company's options and awards
generally vest over five years. The Company also anticipates that additional
options and awards will be made in future years.
<TABLE>
<CAPTION>
SHARES
--------------------------------------
WEIGHTED
UNDER LTIP AVAILABLE
AVERAGE AWARD OR OPTION PRICE
---------- --------------- ----------
<S> <C> <C> <C>
Balances at December 31, 1993 ($2.50-
$19.50 per share)...................... 636,000 1,394,000 $7.18
Authorized............................. 1,000,000 -- --
LTIP awards ($12.37-$19.33 per share).. (84,000) 84,000 --
Canceled ($7.00-$11.69 per share)...... 10,000 (10,000) 8.49
Granted ($19.25-$19.38 per share)...... (102,000) 102,000 19.31
Exercised ($2.50-$11.69 per share)..... -- (184,000) 6.04
---------- ---------
Balances at December 31, 1994 ($2.50-
$19.50 per share)...................... 1,460,000 1,386,000 8.36
Poolings-of-interests ($0.38-$8.21 per
share)................................ -- 89,000 5.40
LTIP awards ($12.09-$19.05 per share).. (88,000) 88,000 --
Canceled ($7.00-$19.50 per share)...... 56,000 (56,000) 10.75
Granted ($20.63-$30.75 per share)...... (729,000) 729,000 24.98
Exercised ($2.50-$19.50 per share)..... -- (339,000) 5.58
---------- ---------
Balances at December 31, 1995 ($0.38-
$30.75 per share)...................... 699,000 1,897,000 15.58
Authorized............................. 1,750,000 -- --
LTIP awards ($16.48-$28.54 per share).. (294,000) 294,000 --
Canceled ($2.19-$40.87 per share)...... 153,000 (175,000) 26.56
Granted ($29.00-$41.25 per share)...... (1,554,000) 1,554,000 35.20
Exercised ($0.38-$20.63 per share)..... -- (263,000) 11.92
---------- ---------
Balances at December 31, 1996 ($0.38-
$41.25 per share)...................... 754,000 3,307,000 26.21
========== =========
</TABLE>
II-18
<PAGE>
The following table summarizes information concerning outstanding and
exercisable options as of December 31, 1996:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
----------------------------------------------------------
WEIGHTED AVERAGE OPTIONS EXERCISABLE
--------------------------- --------------------------
NUMBER OF NUMBER OF WEIGHTED
RANGE OF OPTIONS AND REMAINING OPTIONS AND AVERAGE
EXERCISE PRICES LTIP AWARDS LIFE (YEARS) EXERCISE PRICE LTIP AWARDS EXERCISE PRICE
---------------- ----------- ------------ -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
$0.38 to $10.00 488,000 3.9 $6.12 482,000 $6.11
$10.00 to $20.00 223,000 6.4 15.32 223,000 15.32
$20.00 to $30.00 747,000 8.7 25.21 607,000 24.33
$30.00 to $40.00 1,102,000 9.1 34.23 72,000 30.75
Over $40.00 281,000 9.7 40.96 -- --
</TABLE>
6.SAVINGS PLANS
The Company and its subsidiaries maintain savings plans that cover
substantially all employees. These plans generally provide that the Company
will contribute a certain percentage of employee compensation or contributions
up to a specified level. Company contributions charged to income under these
plans aggregated $6,125,000, $5,338,000 and $3,800,000 for the years ended
December 31, 1996, 1995 and 1994, respectively.
7.INCOME TAXES
The provisions for income taxes for the years ended December 31, 1996, 1995
and 1994 consist of the following (in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
-------- ------- -------
<S> <C> <C> <C>
Current:
Federal........................................ $ 37,460 $26,112 $22,251
State.......................................... 8,973 6,708 6,810
Foreign........................................ 4,156 4,994 4,048
-------- ------- -------
50,589 37,814 33,109
-------- ------- -------
Deferred:
Federal........................................ (19,639) (1,376) (2,579)
State.......................................... (2,680) (216) (603)
Foreign........................................ 398 218 (486)
-------- ------- -------
(21,921) (1,374) (3,668)
-------- ------- -------
$ 28,668 $36,440 $29,441
======== ======= =======
</TABLE>
Differences between income tax expense at the United States federal
statutory income tax rate and the Company's effective income tax rate for the
years ended December 31, 1996, 1995 and 1994 are as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Tax at federal statutory rate................... $22,249 $29,789 $25,385
State income taxes, net of federal benefit.... 4,090 4,393 4,034
Purchased in-process research and development
and other costs.............................. 2,656 -- --
Merger costs.................................... -- 1,524 --
Intangible amortization....................... 1,365 1,039 1,142
Tax-exempt interest income.................... (234) (648) (859)
Foreign taxes................................... (444) (120) 196
Other, net...................................... (1,014) 463 (457)
------- ------- -------
$28,668 $36,440 $29,441
======= ======= =======
Effective income tax rate................... 45.1% 42.8% 40.6%
======= ======= =======
</TABLE>
II-19
<PAGE>
Deferred taxes are recorded based upon differences between financial
statement and tax bases of assets and liabilities. The following deferred
taxes were recorded as of December 31, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Current:
Accounts receivable..................................... $ 3,799 $ 2,483
Accrued compensation and benefits....................... 5,692 2,810
Other accrued expenses.................................. 2,554 1,434
Deferred revenues....................................... 1,587 --
------- -------
$13,632 $ 6,727
======= =======
Long-Term:*
Property and equipment.................................. $ 1,334 $ 1,759
Intangible assets....................................... (9,807) (8,387)
Purchased in-process research and development and other
acquisition-related items.............................. 23,360 --
------- -------
$14,887 $(6,628)
======= =======
</TABLE>
- --------
* Included in other intangible assets.
8.EXPORT SALES
The Company's domestic operations recorded revenues primarily from
international software licenses and maintenance and professional services of
approximately $58,019,000, $51,273,000 and $33,505,000 for the years ended
December 31, 1996, 1995 and 1994, respectively.
9.COMMITMENTS
The Company leases a substantial portion of its computer equipment and
facilities under operating leases. Future minimum rentals under operating
leases with initial or remaining noncancellable lease terms in excess of one
year as of December 31, 1996 follow (in thousands):
<TABLE>
<S> <C>
1997................................................................ $ 51,225
1998................................................................ 45,389
1999................................................................ 25,074
2000................................................................ 14,990
2001................................................................ 8,623
Thereafter.......................................................... 15,013
--------
$160,314
========
</TABLE>
Rent expense aggregated $56,451,000, $52,359,000 and $45,923,000 for the
years ended December 31, 1996, 1995 and 1994, respectively.
10.STOCKHOLDERS' EQUITY
Common Stock Split
On June 2, 1995, the Company's Board of Directors authorized a two-for-one
stock split of the Company's common stock. The stock split was effective for
stockholders of record on June 15, 1995, and shares were issued on July 7,
1995. The number of shares used for purposes of calculating net income per
common share and all per share data have been adjusted for all periods
presented to reflect this stock split.
II-20
<PAGE>
APPENDIX III
ROLFE & NOLAN FINANCIAL STATEMENTS
INDEX TO ROLFE & NOLAN FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
(i) Rolfe & Nolan Unaudited Interim Statement............................ III-2
(ii) Extract from the Report of Independent Chartered Accountants........ III-7
(iii) Rolfe & Nolan Audited Annual Results............................... III-8
(a) Consolidated Profit and Loss Accounts............................. III-8
(b) Statements of Total Recognised Gains and Losses................... III-8
(c) Balance Sheets.................................................... III-9
(d) Consolidated Cash Flow Statements................................. III-11
(e) Notes to the Accounts for the year ended 28th February 1997....... III-12
</TABLE>
III-1
<PAGE>
(I)ROLFE & NOLAN UNAUDITED INTERIM STATEMENT
The following is extracted from Rolfe & Nolan's Interim Statement for the
six months ended 31 August 1997:
"CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31ST AUGUST 1997
<TABLE>
<CAPTION>
6 MONTHS TO 6 MONTHS TO 12 MONTHS TO
31ST AUG 1997 31ST AUG 1996 28TH FEB 1997
UNAUDITED UNAUDITED AUDITED
(Pounds)'000 (Pounds)'000 (Pounds)'000
-------------- -------------- --------------
<S> <C> <C> <C>
Turnover......................... 9,692 8,630 20,299
Administrative Expenses.......... 10,260 7,582 17,664
------ ----- ------
Operating Profit/(Loss).......... (568) 1,048 2,635
------ ----- ------
Interest Receivable.............. 26 81 182
Interest Payable................. (27) (22) (59)
------ ----- ------
Profit/(Loss) before Taxation.... (569) 1,107 2,758
------ ----- ------
Taxation......................... (199) 409 939
------ ----- ------
Profit/(Loss) for the Period..... (370) 698 1,819
Ordinary Dividends............... 222 214 688
------ ----- ------
Retained profit/(loss) for the
period.......................... (592) 484 1,131
------ ----- ------
Earnings per ordinary share
(pence)......................... (2.93) 5.57 14.5
------ ----- ------
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
<CAPTION>
6 MONTHS TO 6 MONTHS TO 12 MONTHS TO
31ST AUG 1997 31ST AUG 1996 28TH FEB 1997
UNAUDITED UNAUDITED AUDITED
(Pounds)'000 (Pounds)'000 (Pounds)'000
-------------- -------------- --------------
<S> <C> <C> <C>
Profit/(loss)for the period...... (370) 698 1,819
Exchange adjustments on foreign
currency net investments........ (22) 18 38
------ ----- ------
Total recognised gains/(losses)
for the period.................. (392) 716 1,857
------ ----- ------
</TABLE>
III-2
<PAGE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
AT 31ST AUG 1997 AT 28TH FEB 1997
UNAUDITED AUDITED
(Pounds)'000 (Pounds)'000
------------------ ------------------
<S> <C> <C> <C> <C>
FIXED ASSETS
Intangible Assets...................... 916 1,017
Tangible Assets........................ 1,344 1,113
Investments............................ 12 12
Investment in own Shares............... 356 356
CURRENT ASSETS
Debtors................................ 7,099 5,617
Investments............................ 1,605 1,650
Cash at bank and in hand............... 516 439
-------- --------
9,220 7,706
CREDITORS:
Falling due within one year............ (4,457) (4,670)
Net Current Assets..................... 4,763 3,036
-------- --------
CREDITORS:
Falling due after more than one year... (844) (230)
-------- --------
NET ASSETS............................. 6,547 5,304
======== ========
CAPITAL AND RESERVES
Share Capital.......................... 1,327 1,258
Share Premium.......................... 2,307 258
Other Reserves......................... (1,755) (1,494)
Profit and Loss........................ 4,668 5,282
-------- --------
EQUITY SHAREHOLDERS' FUNDS............. 6,547 5,304
======== ========
</TABLE>
III-3
<PAGE>
CONSOLIDATED CASH FLOW STATEMENT
<TABLE>
<CAPTION>
6 MONTHS TO 6 MONTHS TO
31ST AUG 31ST AUG
1997 1996
UNAUDITED UNAUDITED
------------------------- -------------------------
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash (outflow)/inflow from
operating activities..... (1,321) 833
Returns on investments and
servicing of finance..... (3) 56
Taxation paid............. (52) (49)
Capital expenditure and
financial investment.....
Purchase of tangible fixed
assets................... (754) (402)
Acquisitions and dispos-
als...................... (50) 0
Equity dividends paid..... (456) (396)
------ -----
Cash (outflow)/inflow be-
fore use of liquid re-
sources and financing.... (2,636) 42
Management of liquid re-
sources.................. 45 0
Proceeds from issue of
shares................... 2,119 95
Lease financing........... (54) (50)
----- ---
2,065 45
------ -----
(Decrease)/Increase in
cash for the period...... (526) 87
====== =====
Reconciliation of net cash
flow movement in net
funds
(Decrease)/Increase in
cash for the period...... (526) 87
Cash outflow from decrease
in debt and lease
financing................ 54 50
Cash inflow from decrease
in liquid resources...... (45) 0
----- ---
Change in net (debt)/cash
resulting from cash
flows.................... (517) 137
New finance leases........ (197) 0
Translation difference.... 22 (47)
------ -----
Movement in net funds in
the period............... (692) 90
Opening net funds......... 1,925 2,721
------ -----
Closing net funds......... 1,233 2,811
====== =====
</TABLE>
III-4
<PAGE>
NOTES
1.ACCOUNTING POLICIES
The principal accounting policies of the Group, as set out on pages 32 and 33
of the accounts for the year ended 28th February 1997, are unchanged.
2.ANALYSIS OF TURNOVER AND PROFIT BEFORE INTEREST
(a) Turnover by destination
<TABLE>
<CAPTION>
6 MONTHS TO 6 MONTHS TO 12 MONTHS TO
31ST AUG 1997 31ST AUG 1996 28TH FEB 1997
(Pounds)'000 (Pounds)'000 (Pounds)'000
-------------- -------------- --------------
<S> <C> <C> <C>
U.K.............................. 4,563 3,750 8,624
Rest of Europe................... 2,720 2,423 5,489
North America.................... 1,957 2,341 5,611
Asia Pacific..................... 452 116 575
----- ----- ------
9,692 8,630 20,299
===== ===== ======
(b) Profit before interest
<CAPTION>
6 MONTHS TO 6 MONTHS TO 12 MONTHS TO
31ST AUG 1997 31ST AUG 1996 28TH FEB 1997
(Pounds)'000 (Pounds)'000 (Pounds)'000
-------------- -------------- --------------
<S> <C> <C> <C>
Europe........................... 421 1,338 2,907
North America.................... (977) 46 208
Asia Pacific..................... (12) (336) (480)
----- ----- ------
(568) 1,048 2,635
===== ===== ======
3.RECONCILIATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
<CAPTION>
6 MONTHS TO 6 MONTHS TO 12 MONTHS TO
31ST AUG 1997 31ST AUG 1996 28TH FEB 1997
(Pounds)'000 (Pounds)'000 (Pounds)'000
-------------- -------------- --------------
<S> <C> <C> <C>
Profit/(loss) for the financial
period.......................... (370) 698 1,819
Ordinary Dividends............... 222 214 688
----- ----- ------
(592) 484 1,131
Other recognised gains/(losses)
relating to the period.......... (22) 18 38
Issue of shares, including premi-
um.............................. 2,118 95 98
Goodwill written off on
acquisition of Hudson Consulting
Limited......................... (261) -- --
----- ----- ------
1,243 597 1,267
===== ===== ======
4.TAXATION
The taxation charge has been estimated on the basis that the six month period
forms an integral part of the annual reporting period. The taxation estimate is
analysed as follows:
<CAPTION>
6 MONTHS TO 6 MONTHS TO 12 MONTHS TO
31ST AUG 1997 31ST AUG 1996 28TH FEB 1997
(Pounds)'000 (Pounds)'000 (Pounds)'000
-------------- -------------- --------------
<S> <C> <C> <C>
United Kingdom Taxation.......... 175 385 900
Overseas Taxation................ (374) 24 39
----- ----- ------
(199) 409 939
===== ===== ======
</TABLE>
III-5
<PAGE>
5.EARNINGS PER SHARE
The calculation of earnings per share has been made on a weighted average of
12,580,838 ordinary shares in issue during the period (1996: 12,531,641).
6.DIVIDENDS
<TABLE>
<CAPTION>
1997/98 1996/97
(Pounds)'000 (Pounds)'000
-------------- --------------
<S> <C> <C>
Interim Payable of 1.7p per share................. 222 210
Final paid of 3.8p per share...................... -- 478
------ -----
222 688
====== =====
7.CASH FLOW
<CAPTION>
6 MONTHS TO 6 MONTHS TO
31ST AUG 1997 31ST AUG 1996
(Pounds)'000 (Pounds)'000
-------------- --------------
<S> <C> <C>
Operating profit/(loss)........................... (576) 1,048
Depreciation Charges.............................. 390 357
Increase in debtors............................... (1,575) (150)
Increase/(Decrease) in creditors.................. 440 (422)
------ -----
(1,321) 833
====== =====
</TABLE>
8.ACCOUNTS
The financial information set out in this document does not comprise the
statutory accounts of the Group within the meaning of section 240(5) of the
Companies Act 1985. The statutory audited accounts of the Group for the year
ended 28th February 1997, upon which the auditors have given an unqualified
report, have been delivered to the Registrar of Companies in England and
Wales."
III-6
<PAGE>
(ii) EXTRACT FROM THE REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS IN ROLFE &
NOLAN'S AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28TH FEBRUARY
1997.
"To the Members of Rolfe & Nolan
We have audited the Financial Statements on pages 23 to 44, which have been
prepared under the accounting policies set out on pages 32 and 33. We have
also examined the amounts disclosed relating to the emoluments and share
options of the Directors.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The Directors are responsible for the preparation of Financial Statements. It
is our responsibility to form an independent opinion, based on our audit, on
those Financial Statements and to report our opinion to you.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the Financial Statements.
It also includes an assessment of the significant estimates and judgments made
by the Directors in the preparation of the Financial Statements, and whether
the accounting policies are appropriate to the circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the Financial Statements
are free from material mis-statement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the Financial Statements.
OPINION
In our opinion the Financial Statements give a true and fair view of the state
of affairs of the Company and the Group at 28th February 1997 and of the
profit of the Group for the year then ended and have been properly prepared in
accordance with the Companies Act 1985.
Grant Thornton
Registered Auditors
Chartered Accountants
London
29th May 1997"
III-7
<PAGE>
(iii) ROLFE & NOLAN AUDITED ANNUAL RESULTS
(a) CONSOLIDATED PROFIT AND LOSS ACCOUNTS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
28TH FEBRUARY 29TH FEBRUARY 28TH FEBRUARY
NOTES 1997 1996 1995
------------ ------------- ------------- -------------
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C>
Turnover................ 2 20,299 17,128 14,288
Total operating ex-
penses................. (17,664) (14,745) (12,893)
------- ------- -------
Operating profit........ 2,635 2,383 1,395
Net interest receiv-
able................... 4 123 134 117
------- ------- -------
Profit on ordinary ac-
tivities before taxa-
tion................... 5 2,758 2,517 1,512
Taxation on profit on
ordinary activities.... 6 (939) (997) (696)
------- ------- -------
Profit for the financial
year attributable to
ordinary shares........ 1,819 1,520 816
Dividends paid and pro-
posed.................. 7 (688) (592) (480)
------- ------- -------
Transfer to reserves.... 17 1,131 928 336
------- ------- -------
Earnings per share
(pence)................ 8 14.5 12.3 6.7
------- ------- -------
(b) STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
28TH FEBRUARY 29TH FEBRUARY 28TH FEBRUARY
1997 1996 1995
------------- ------------- -------------
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Profit attributable to
ordinary shareholders.. 1,819 1,520 816
Exchange adjustments on
foreign currency net
investments............ 38 2 23
------- ------- -------
Total recognised
gains/(losses) for the
year................... 1,857 1,522 839
------- ------- -------
</TABLE>
All Rolfe & Nolan Group operations are continuing operations within the
meaning of Financial Reporting Standard No. 3. Movements in reserves are set
out in note 17 to these financial statements.
III-8
<PAGE>
(C) BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AT 28TH FEBRUARY AT 29TH FEBRUARY
NOTES 1997 1996
----- ------------------------- -------------------------
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Intangible assets....... 9 1,017 --
Tangible assets......... 10 1,113 1,039
Investment in subsidiar-
ies.................... 11 12 12
Investment in own
shares................. 12 356 356
CURRENT ASSETS
Debtors................. 13 5,617 4,497
Investments............. 14 1,650 2,900
Cash at bank and in
hand................... 439 298
------ ------
7,706 7,695
CREDITORS: AMOUNTS FALL-
ING DUE WITHIN ONE
YEAR................... 15 (4,670) (4,716)
------ ------
Net current assets...... 3,036 2,979
------ -----
Total assets less cur-
rent liabilities....... 5,534 4,386
CREDITORS: AMOUNTS
FALLING DUE AFTER MORE
THAN ONE YEAR.......... 15 (230) (349)
------ -----
NET ASSETS.............. 5,304 4,037
------ -----
CAPITAL AND RESERVES:
Called up share capi-
tal.................... 16 1,258 1,249
Share premium account... 17 258 169
Other reserves.......... 17 (1,494) 1,494
Profit and loss ac-
count.................. 17 5,282 4,113
------ -----
EQUITY SHAREHOLDERS'
FUNDS.................. 18 5,304 4,037
------ -----
</TABLE>
The financial statements for the year ended 28th February 1997 were approved by
the Board of Directors on 29th May 1997 and were signed on its behalf by P.D.
Day and P.K. Wright, Directors.
III-9
<PAGE>
COMPANY BALANCE SHEETS
<TABLE>
<CAPTION>
AT 28TH FEBRUARY AT 29TH FEBRUARY
NOTES 1997 1996
----- ------------------------- -------------------------
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C> <C>
FIXED ASSETS
Intangible assets....... 9 1,017 --
Tangible assets......... 10 850 753
Investment in subsidiar-
ies.................... 11 3,538 3,517
Investment in own
shares................. 12 356 356
CURRENT ASSETS
Debtors................. 13 5,379 4,511
Investments............. 14 1,650 2,900
Cash at bank and in
hand................... 359 250
------ ------
7,388 7,661
CREDITORS: AMOUNTS FALL-
ING DUE WITHIN ONE
YEAR................... 15 (3,921) (4,374)
------ ------
Net current assets...... 3,467 3,287
----- -----
Total assets less cur-
rent liabilities....... 9,228 7,913
CREDITORS: AMOUNTS FALL-
ING DUE AFTER MORE THAN
ONE
YEAR.................... 15 (110) (66)
----- -----
NET ASSETS.............. 9,118 7,847
----- -----
CAPITAL AND RESERVES:
Called up share capi-
tal.................... 16 1,258 1,249
Share premium account... 17 258 169
Other reserves.......... 17 465 465
Profit and loss ac-
count.................. 17 7,137 5,964
----- -----
EQUITY SHAREHOLDERS'
FUNDS.................. 9,118 7,847
----- -----
</TABLE>
The financial statements for the year ended 28th February 1997 were approved by
the Board of Directors on 29th May 1997 and were signed on its behalf by P.D.
Day and P.K. Wright, Directors.
III-10
<PAGE>
(D) CONSOLIDATED CASH FLOW STATEMENTs
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
NOTES 28TH FEBRUARY 1997 29TH FEBRUARY 1996
----- ------------------------- -------------------------
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C> <C>
Net cash inflow from op-
erating activities..... 23 2,088 2,535
RETURNS ON INVESTMENTS
AND SERVICING OF FI-
NANCE:
Interest received....... 182 189
Interest paid........... (41) (29)
Finance lease interest
paid................... (18) (34)
Dividends paid.......... (605) (509)
------ ------
Net cash outflow from
returns on investments
and servicing of fi-
nance.................. (482) (383)
----- ------
TAXATION:
UK corporation tax
paid................... (777) (704)
Overseas tax paid....... -- (1)
------ ------
Tax paid................ (777) (705)
----- ------
INVESTING ACTIVITIES:
Purchase of intangible
fixed assets........... (1,017) --
Purchase of tangible
fixed assets........... (762) (614)
Reduction/(increase) in
short term deposits.... 1,250 (1,149)
------ ------
Net cash outflow from
investing activities... (529) (1,763)
----- ------
Net cash
inflow/(outflow) before
financing.............. 300 (316)
FINANCING:
Issue of shares......... 98 168
Capital element of fi-
nance lease rentals.... (108) (106)
------ ------
Net cash
(outflow)/inflow from
financing.............. 23 (10) 62
----- ------
Increase / (decrease) in
cash and cash equiva-
lents.................. 23 290 (254)
----- ------
</TABLE>
III-11
<PAGE>
(E) NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
1.PRINCIPAL ACCOUNTING POLICIES
The Accounts have been prepared under the historical cost convention and in
accordance with applicable accounting standards. A summary of the Group
accounting policies, which have been applied consistently, is set out below.
BASIS OF CONSOLIDATION
The Group financial statements consolidate those of the Company and, where
material, its subsidiary undertakings as referred to in note 11 to the
Accounts for the year ended 28th February 1997.
GOODWILL
Goodwill arising on consolidation is written-off against reserves in the year
of acquisition.
TURNOVER
Turnover is the total amount receivable by the Group, excluding Value Added
Tax and sales tax, in the ordinary course of business for goods and services
provided. Credit is taken in respect of software license sales based on the
stage of completion of each installation with due regard for contract terms
and anticipated future costs.
DEPRECIATION/AMORTISATION
Depreciation is calculated on a straight line basis to write-off the cost less
estimated residual value of fixed assets over their expected useful lives. The
periods generally applicable are:
<TABLE>
<S> <C>
Computer facilities.................. 2-5 years
Furniture, fixtures, fittings and
office equipment.................... 4-7 years
Leasehold improvements............... minimum remaining period of the lease
Purchased Intellectual Property
Rights.............................. 5 years
</TABLE>
DEFERRED TAXATION
Deferred taxation is provided, using the liability method, in respect of the
taxation effect of all timing differences to the extent that the Directors
consider that a liability is likely to arise.
INVESTMENTS
Short-term investments are stated at the lower of cost or market value.
DEVELOPMENT EXPENDITURE
Development expenditure is charged to profits in the period in which it is
incurred.
FOREIGN CURRENCIES
Transactions denominated in foreign currencies are recorded at the rates of
exchange at the date of the transaction. Monetary assets and liabilities are
translated into sterling at the rates of exchange at the Balance Sheet date
and, where material, resulting exchange differences are reflected in the
results for the year. On consolidation, the results and net assets of overseas
subsidiaries are translated into sterling at the average rate of exchange for
the year and at the rate of exchange at the Group's Balance Sheet date
respectively. Exchange differences arising on translation are included as a
movement on reserves.
III-12
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
INVESTMENT IN OWN SHARES
Shares in Rolfe & Nolan Plc held by the Employee Trust are shown at cost.
Provisions for a permanent diminution in value of the shares are charged to
profits in the period in which the diminution in value occurs.
LEASED ASSETS
Assets acquired under a finance lease are recorded as tangible fixed assets
together with corresponding obligations to pay future rentals. Leasing
payments are regarded as consisting of a capital element which reduces the
outstanding liability and an interest element which is charged against
profits. All other leases are regarded as operating leases and the total
payments made under them are charged to the Profit and Loss Account on a
straight line basis over the period of the lease.
PENSION COSTS
The Group made contributions to pension plans in the UK and overseas which
were charged against profits in respect of the accounting period. The UK
scheme is operated as a money purchase scheme. Overseas pension plans are
provided by contributions to government or insured schemes. The assets of the
UK scheme are held by the Trustees and are kept separate from those of the
Group.
III-13
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
2.SEGMENTAL ANALYSIS
Turnover relates to the principal activity of the Group and consists of
computer software charges, including bureau charges, together with related
hardware revenues. It is analysed geographically.
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ------------
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
By origin:
Europe................................. 14,322 12,320 10,078
USA.................................... 5,470 4,154 4,210
Asia Pacific........................... 507 654 0
------ ------ ------
20,299 17,128 14,288
------ ------ ------
By destination:
UK..................................... 8,624 6,748 6,143
Rest of Europe......................... 5,489 5,346 3,958
North America.......................... 5,611 4,119 3,654
Asia Pacific........................... 575 915 533
------ ------ ------
20,299 17,128 14,288
------ ------ ------
The geographical analysis of profit
before
interest and taxation was as follows:
Europe................................. 2,907 2,286 1,654
USA.................................... 208 (142) (259)
Asia Pacific........................... (480) 239 0
------ ------ ------
2,635 2,383 1,395
------ ------ ------
Net assets/(liabilities) by location:
Europe................................. 5,988 4,412 3,235
USA.................................... (378) (533) (296)
Asia Pacific........................... (306) 158 0
------ ------ ------
5,304 4,037 2,939
------ ------ ------
</TABLE>
III-14
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
3.DIRECTORS AND EMPLOYEES
Staff costs during the year were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ------------
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Wages and salaries................. 8,581 6,976 6,096
Social Security costs.............. 495 598 533
Other pension costs................ 533 256 236
----- ----- -----
9,609 7,830 6,865
===== ===== =====
The average number of employees of the Group during the year was 238
(1996: 202; 1995: 178)
Directors' remuneration, including
benefits, was as follows:
Non-Executive Directors' fees...... 44 53 46
Emoluments for management.......... 761 702 605
Pension contributions.............. 134 104 91
Compensation for loss of office.... 105 67 --
----- ----- -----
1,044 926 742
===== ===== =====
</TABLE>
The emoluments of the Directors whose work was carried out mainly in the UK
were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------------------------- ------------------------- -------------------------
HIGHEST HIGHEST HIGHEST
PAID PAID PAID
CHAIRMAN DIRECTOR CHAIRMAN DIRECTOR CHAIRMAN DIRECTOR
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C> <C> <C>
Fees/salary including
benefits in kind....... 20 186 21 139 18 121
Annual performance
related bonus.......... -- -- -- 40 -- --
Pension contributions... -- 12 -- 45 -- --
--- --- --- --- --- ---
20 198 21 224 18 121
=== === === === === ===
</TABLE>
Other Directors received emoluments (excluding pension contributions) in the
following ranges:
<TABLE>
<CAPTION>
NUMBER NUMBER NUMBER
------ ------ ------
<S> <C> <C> <C>
(Pounds)5,000 - (Pounds)10,000........................ -- 1 --
(Pounds)10,001 - (Pounds)15,000....................... 2 2 1
(Pounds)15,001 - (Pounds)20,000....................... -- -- 1
(Pounds)55,001 - (Pounds)60,000....................... -- 1 1
(Pounds)70,000 - (Pounds)75,000....................... -- -- 1
(Pounds)75,001 - 80,000............................... 1 1 --
(Pounds)85,000 - 90,000............................... -- -- 3
(Pounds)90,001 - 95,000............................... -- 1 1
(Pounds)95,001 - 100,000.............................. 1 -- --
(Pounds)100,001 - (Pounds)105,000..................... 1 -- 3
(Pounds)105,001 - (Pounds)110,000..................... -- 1 --
(Pounds)110,001 - (Pounds)115,000..................... -- 1 --
(Pounds)140,001 - (Pounds)145,000..................... 1 -- --
</TABLE>
III-15
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
4.NET INTEREST RECEIVABLE
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ------------
(Pounds)'00 (Pounds)'00 (Pounds)'00
<S> <C> <C> <C>
Interest receivable from short
term deposits................... 182 197 172
--- --- ---
Interest payable:
On bank overdraft repayable on
demand.......................... 41 29 33
On finance leases................ 18 34 22
--- --- ---
59 63 55
--- --- ---
123 134 117
=== === ===
5.PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
<CAPTION>
1997 1996 1995
------------ ------------ ------------
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
Profit on ordinary activities is
stated after:
Auditors' remuneration........... 36 32 20
Other services provided by
auditors........................ 32 27 27
Operating lease costs - plant and
equipment....................... 182 243 249
- property 600 459 455
Depreciation..................... 670 705 679
6.TAXATION ON PROFIT ON ORDINARY ACTIVITIES
The taxation charge is based on the results for the year and is made up as
follows:
<CAPTION>
1997 1996 1995
------------ ------------ ------------
(Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C>
UK corporation tax at 33 per
cent.
--current year................... 900 856 701
--prior years.................... -- 24 (27)
Overseas tax..................... 39 117 22
--- --- ---
939 997 696
=== === ===
</TABLE>
The Company has a deferred tax asset of (Pounds)95,000 (1996: (Pounds)168,000,
1995: (Pounds)140,000) which, in accordance with SSAP 15, has not been
recognised in these financial statements.
7.DIVIDENDS
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Interim dividend paid of 1.7p per share (1996: 1.6p, 1995:
1.4025p)...................................................... 210 197 168
Final dividend proposed of 3.8p per share (1996: 3.2p, 1995:
2.6p)......................................................... 478 395 312
--- --- ---
688 592 480
=== === ===
</TABLE>
The Trustee of the Rolfe & Nolan Employee Trust has, in accordance with the
Trust Deed dated 31st December 1993, waived all rights to any future dividends
which may be payable on any shares in the Company from time to time held by
the Trust, save 0.01p per share. The dividends for the year have been reduced
by (Pounds)11,200 (1996: (Pounds)10,600, 1995: (Pounds)8,000) in respect of
this waiver.
8.EARNINGS PER SHARE
Calculated on the profit attributable to ordinary shareholders of
(Pounds)1,819,000 (1996: (Pounds)1,520,000, 1995: (Pounds)816,000) and using a
weighted average of 12,554,964 ordinary shares of 10p each in issue during the
year (1996: 12,332,800, 1995: 12,163,402). Dilution in earnings per share
resulting
III-16
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
from the issue of shares under the Company's share option schemes (note 16)
would not be material.
9.INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
(Pounds)000
-----------
<S> <C>
GROUP
Cost:
At 1st March 1996.............................................. --
Additions...................................................... 1,017
-----
At 28th February 1997.......................................... 1,017
-----
COMPANY
Cost:
At 1st March 1996.............................................. --
Additions...................................................... 1,017
-----
At 28th February 1997.......................................... 1,017
-----
</TABLE>
Included under Intangible Fixed Assets are the purchased Intellectual Property
Rights for software modules to be integrated into Lighthouse. The rights were
purchased in February 1997 and consequently no amortisation was charged in the
year.
10.TANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
SHORT
COMPUTER FIXTURES AND LEASEHOLD
TOTAL FACILITIES FITTINGS IMPROVEMENTS
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
GROUP
COST:
At 1st March 1996......... 5,419 4,259 643 517
Additions................. 762 620 114 28
Disposals................. (28) (28) -- --
Exchange adjustments...... (98) (87) (9) (2)
----- ----- --- ---
At 28th February 1997..... 6,055 4,764 748 543
----- ----- --- ---
DEPRECIATION:
At 1st March 1996......... 4,380 3,431 500 449
Disposals................. (28) (28) -- --
Provided in the year...... 670 545 84 41
Exchange adjustments...... (80) (69) (9) (2)
----- ----- --- ---
At 28th February 1997..... 4,942 3,879 575 488
----- ----- --- ---
Net book value at 28th
February 1997............ 1,113 885 173 55
----- ----- --- ---
Net book value at 29th
February 1996............ 1,039 828 143 68
----- ----- --- ---
</TABLE>
III-17
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
Included under computer facilities in equipment held under finance leases the
net book value of which was (Pounds)136,000 at 28th February 1997 (1996:
(Pounds)243,000). The depreciation charge for the year for this equipment was
(Pounds)108,000 (1996: (Pounds)116,000).
COMPANY
<TABLE>
<S> <C> <C> <C> <C>
COST:
At 1st March 1996......................................... 3,808 2,885 447 476
Additions................................................. 567 430 110 27
Disposals................................................. (28) (28) -- --
----- ----- --- ---
At 28th February 1997..................................... 4,347 3,287 557 503
----- ----- --- ---
DEPRECIATION:
At 1st March 1996......................................... 3,055 2,306 321 428
Disposals................................................. (28) (28) -- --
Provided in the year...................................... 470 358 74 38
----- ----- --- ---
At 28th February 1997..................................... 3,497 2,636 395 466
----- ----- --- ---
Net book value at 28th February 1997...................... 850 651 162 37
----- ----- --- ---
Net book value at 29th February 1996...................... 753 579 126 48
----- ----- --- ---
</TABLE>
Included under computer facilities is equipment held under finance leases the
net book value of which (Pounds)37,000 at 28th February 1997 (1996:
(Pounds)60,000). The depreciation charge for the year for equipment held under
finance leases was (Pounds)23,000 (1996: (Pounds)10,000).
11.INVESTMENT IN SUBSIDIARY UNDERTAKINGS
<TABLE>
<CAPTION>
GROUP COMPANY
------------------------- -------------------------
1997 1996 1997 1996
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment in subsidiary
undertakings:
Cost at 1st March 1996.... 12 12 3,517 3,533
Acquired during the year.. -- -- 21 --
Disposed of during the
year..................... -- -- -- (16)
--- --- ----- -----
Cost at 28th February
1997..................... 12 12 3,538 3,517
--- --- ----- -----
</TABLE>
The Company owns 100 per cent. of the share capital of Rolfe & Nolan Ges.mbH,
incorporated in Austria. This company did not trade in the period to 28th
February 1997 nor does it have a significant level of net assets, and has
therefore not been consolidated.
During the year the Company acquired 100 per cent. of the share capital of
Rolfe & Nolan GmbH which was incorporated in Germany on 23rd August 1996.
At 28th February 1997 the Company owned 100 per cent. of the share capital of
Rolfe & Nolan (USA), Inc., Rolfe & Nolan (Malaysia), Sdn Bhd., and Rolfe &
Nolan GmbH incorporated in the USA, Malaysia and Germany respectively. The
principal activity of these companies is the same as that of Rolfe & Nolan
Plc. The results of these companies have been consolidated in the Group
figures.
12.INVESTMENT IN OWN SHARES
<TABLE>
<CAPTION>
GROUP COMPANY
------------------------- -------------------------
1997 1996 1997 1996
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares held by Rolfe &
Nolan Employee Trust..... 356 356 356 356
--- --- --- ---
</TABLE>
The market value of these shares at 28th February 1997 was (Pounds)820,000
(1996: (Pounds)603,000). Further information relating to the Employee Trust is
given in note 16.
III-18
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
13.DEBTORS
<TABLE>
<CAPTION>
GROUP COMPANY
------------------------- -------------------------
1997 1996 1997 1996
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
AMOUNTS FALLING DUE WITHIN
ONE YEAR:
Trade debtors............. 4,113 3,707 3,312 3,052
Amounts owed by group un-
dertakings............... -- -- 1,100 745
Prepayments and accrued
income................... 908 691 844 615
----- ----- ----- -----
5,021 4,398 5,256 4,412
AMOUNTS FALLING DUE AFTER
MORE THAN ONE YEAR:
Trade debtors............. 473 -- -- --
Advance Corporation Tax
recoverable.............. 123 99 123 99
----- ----- ----- -----
5,617 4,497 5,379 4,511
----- ----- ----- -----
</TABLE>
14.CURRENT ASSET INVESTMENT
<TABLE>
<CAPTION>
GROUP COMPANY
------------------------- -------------------------
1997 1996 1997 1996
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Unlisted short term depos-
its...................... 1,650 2,900 1,650 2,900
----- ----- ----- -----
</TABLE>
15.CREDITORS
<TABLE>
<CAPTION>
GROUP COMPANY
------------------------- -------------------------
1997 1996 1997 1996
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
AMOUNTS FALLING DUE WITHIN
ONE YEAR:
Bank overdraft............ 25 230 -- 132
Trade creditors........... 1,815 838 1,225 407
Amounts owed to group un-
dertakings............... -- -- 130 555
Current taxation.......... 1,083 921 837 898
Social Security and other
taxes.................... 475 408 474 390
Proposed dividends........ 478 395 478 395
Accruals and deferred in-
come..................... 699 1,823 753 1,575
Obligations under finance
leases................... 95 101 24 22
----- ----- ----- -----
4,670 4,716 3,921 4,374
----- ----- ----- -----
AMOUNTS FALLING DUE AFTER
MORE THAN ONE YEAR:
Obligations under finance
leases due between one
and two years............ 44 100 15 24
Obligations under finance
leases due between two
and five years........... -- 46 -- 15
Other creditors due be-
tween one and two years.. 162 155 95 18
Other creditors due be-
tween two and five
years.................... 24 48 -- 9
----- ----- ----- -----
230 349 110 66
----- ----- ----- -----
</TABLE>
Obligations under finance leases are secured by fixed charges over the assets
concerned.
16.SHARE CAPITAL
<TABLE>
<CAPTION>
1997 1996
-------------------------------- --------------------------------
ALLOTTED CALLED UP ALLOTTED CALLED UP
AUTHORISED AND FULLY PAID AUTHORISED AND FULLY PAID
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------------- ------------ -------------------
<S> <C> <C> <C> <C>
12,580,838 Ordinary
shares of 10p each
(1996: 12,493,732).... 1,500 1,258 1,500 1,249
----- ----- ----- -----
</TABLE>
87,106 shares were allotted during the year for an aggregate consideration of
(Pounds)97,968.
III-19
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
At 28th February 1997 the following options had been granted and were still
outstanding under the Company's Share Option Schemes:
EXECUTIVE SHARE OPTION SCHEME
<TABLE>
<CAPTION>
NUMBER OF SHARES OPTION PRICE DATES NORMALLY EXERCISABLE
---------------- ------------ --------------------------
<S> <C> <C> <C>
PD Day................ 39,322 113p June 1996 to June 2003
</TABLE>
The exercise of this option is not dependent upon performance criteria and
there are no other constraints apart from the time limits.
EXECUTIVE SHARE OPTION SCHEME (1993)
Options over 100,000 shares, which have been bought on the open market by, and
are held by, the Rolfe & Nolan Employee Trust, have been granted as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES OPTION PRICE DATES NORMALLY EXERCISABLE
---------------- ------------ ------------------------------
<S> <C> <C> <C>
PD Day............ 100,000 117p December 1997 to December 2004
</TABLE>
Mr. Day's option may only be exercised if, not less than three years following
the date of grant, the earnings per share of the Group exceed a target set at
8.85p for the year to 28th February 1995 and increased annually by a
percentage equivalent to the percentage increase in the Retail Prices Index
for the preceding twelve months plus five percentage points.
Options over 93,002 shares held by the Trust have been granted to various
employees under the Savings Related Share Option Scheme (1995).
A further 8,174 unallocated shares were held by the Trust at 28th February and
1st May 1997 (1996: 28,366).
Purchase of shares by the Trust is funded by an interest free loan from the
Company amounting to (Pounds)356,000 at 28th February 1997 and at 29th
February 1996, and repayable in normal circumstances on or before 31st
December 2004.
EXECUTIVE SHARE OPTION SCHEME (1995)
<TABLE>
<CAPTION>
NUMBER OF SHARES OPTION PRICE DATES NORMALLY EXERCISABLE
---------------- ------------ ------------------------------
<S> <C> <C> <C>
P S E Cleaver..... 70,000 270p October 1998 to October 2005
P K Wright........ 40,000 300p January 1999 to January 2006
R N Freeman....... 9,523 315p May 1999 to May 2006
D A Battle........ 8,888 337.5p December 1999 to December 2006
</TABLE>
Mr. Cleaver's option may only be exercised if, not less than three years
following the date of grant, the earnings per share of the Group exceed a
target set at 8.85p for the year to 28th February 1995 and increased annually
by a percentage equivalent to the percentage increase in the Retail Prices
Index for the preceding twelve months plus five percentage points.
The options of Messrs. Wright, Freeman and Battle may only be exercised, if
not less than three years following the date of grant, the earnings per share
of the Group for the year ended 29th February 1996 are increased in each
successive year by a percentage increase equivalent to the percentage increase
in the Retail Price Index for the preceding twelve months plus five percentage
points.
EXECUTIVE SHARE OPTION SCHEME OF OVERSEAS EMPLOYEES
(AS AMENDED BY DIRECTORS' RESOLUTION ON 16TH JULY 1996)
<TABLE>
<CAPTION>
NUMBER OF SHARES OPTION PRICE DATES NORMALLY EXERCISABLE
---------------- ------------ ------------------------------
<S> <C> <C> <C>
D A Battle........ 31,112 337.5p December 1999 to December 2006
S Victore......... 15,000 337.5p December 1999 to December 2006
</TABLE>
III-20
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
The foregoing options may only be exercised if not less than three years
following the date of grant, the earnings per share of the Group for the year
ended 29th February 1996 are increased in each successive year by a percentage
increase equivalent to the percentage increase in the Retail Prices Index for
the preceding twelve months plus five percentage points.
SAVINGS RELATED SHARE OPTION SCHEME
<TABLE>
<CAPTION>
NUMBER OF SHARES NUMBER OF SHARES
1997 1996 OPTION PRICE DATES NORMALLY EXERCISABLE
----------------- ----------------- ------------ ----------------------------
<S> <C> <C> <C>
-- 2,500 60p February 1996 to August 1996
-- 5,442 62p August 1996 to February 1997
3,868 6,292 77.5p February 1997 to August 1997
15,764 15,764 88p August 1997 to February 1998
29,392 29,392 90p February 1998 to August 1998
11,258 11,258 104p August 1998 to February 1999
68,889 72,399 157.2p August 2000 to February 2001
21,940 21,134 157.2p August 2000 to February 2001
71,062 -- 286.4p August 1999 to February 2000
</TABLE>
The shares over which these options have been granted have been purchased by,
and are held by, the Rolfe & Nolan Employee Trust (see above).
17.RESERVES
<TABLE>
<CAPTION>
GROUP COMPANY
--------------------------------------- ---------------------------------------
SHARE SHARE
PREMIUM OTHER PROFIT AND PREMIUM OTHER PROFIT AND
ACCOUNT RESERVES LOSS ACCOUNT ACCOUNT RESERVES LOSS ACCOUNT
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
At 1st March 1996....... 169 (1,494) 4,113 169 465 5,964
Retained profit for the
year................... -- -- 1,131 -- -- 1,144
Arising on shares issued
in the year............ 89 -- -- 89 -- --
Exchange adjustments.... -- -- 38 -- -- 29
--- ------ ----- --- --- -----
At 28th February 1997... 258 (1,494) 5,282 258 465 7,137
=== ====== ===== === === =====
</TABLE>
The balance on Other Reserves represents merger relief granted under Section
131 of the Companies Act 1985, and in the case of the Group balance is net of
Goodwill written off on the acquisition Rolfe & Nolan (USA), Inc.
The cumulative amount of goodwill written off to reserves at 28th February
1997 was (Pounds)2,418,000 (1996: (Pounds)2,418,000).
In accordance with the exemption allowed by Section 230 of the Companies Act
1985, the Company has not presented its own profit and loss account. The
profit of the Company for the year amounted to (Pounds)2,498,000 (1996:
(Pounds)2,411,000).
III-21
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
18.RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
<TABLE>
<CAPTION>
1997 1996
(Pounds)'000 (Pounds)'000
------------ ------------
<S> <C> <C>
Profit attributable to ordinary shareholders........ 1,819 1,520
Ordinary dividends.................................. (688) (592)
----- -----
1,131 928
Exchange adjustments on foreign currency net invest-
ments.............................................. 38 2
New share capital issued............................ 98 168
----- -----
Net addition to shareholders' funds................. 1,267 1,098
Opening shareholders' funds......................... 4,037 2,939
----- -----
Closing shareholders' funds......................... 5,304 4,037
===== =====
</TABLE>
19.CAPITAL COMMITMENTS
Neither the Company nor the Group has entered into any capital commitments at
28th February 1997.
20.GUARANTEES
The Company had a contingent liability in respect of guarantees given on bank
loans and equipment leases of Rolfe & Nolan (USA), Inc. amounting to $324,000
(approximately (Pounds)202,000) at 28th February 1997. The comparative figure
at 29th February 1996 was $470,000 ((Pounds)307,000). Since the year end a
further $378,000 ((Pounds)236,000) has been guaranteed.
21.OPERATING LEASE COMMITMENTS
At 28th February 1997 annual commitments under operating leases were as
follows:
<TABLE>
<CAPTION>
1997 1996
------------------------- -------------------------
PROPERTY OTHER PROPERTY OTHER
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
GROUP
Operating leases which ex-
pire:
Within one year........... 253 60 -- 147
In the second to fifth
years inclusive.......... 527 117 219 60
After five years.......... -- -- 246 --
--- --- --- ---
780 177 465 207
--- --- --- ---
COMPANY
Operating leases which ex-
pire:
Within one year........... 232 33 -- 25
In the second to fifth
years inclusive.......... 171 56 219 60
--- --- --- ---
403 89 219 85
--- --- --- ---
</TABLE>
22.PENSIONS
During the year the Company operated an occupational pension scheme for
certain employees and directors. This scheme is a defined contribution scheme,
under which the majority of members are contracted out of the State Earnings
Related Pension Scheme. The assets of the scheme are held separately from
those of the Company and are invested in insurance policies and units in an
insurance company pooled fund.
The scheme was terminated on 5th April 1997, and is in the process of being
wound up, its assets being reinvested at the election of individual members.
From 6th April 1997, the Company operates a Group Personal Pension Scheme to
which it contributes on behalf of members.
III-22
<PAGE>
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 28TH FEBRUARY 1997
A previous arrangement, whereby members were able to contract out under a
final salary scheme, was terminated at 31st July 1992, and was wound up on
21st September 1994, its assets having been reinvested at the election of
individual members.
23.CASH FLOW
<TABLE>
<CAPTION>
1997 1996
------------ ------------
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Reconciliation of operating profit to net cash flow
from operating activities:
Operating profit.................................... 2,635 2,383
Depreciation........................................ 670 705
Loss of Sale on Fixed Asset Investment.............. -- 16
(Increase) in debtors............................... (1,096) (369)
(Decrease) in creditors............................. (121) (200)
------ -----
Net cash inflow from operating activities........... 2,088 2,535
------ -----
</TABLE>
<TABLE>
<CAPTION>
1997 1996
---------------------------- -----------------------------
SHARE CAPITAL LOANS AND SHARE CAPITAL LOANS AND
INCLUDING FINANCE LEASE INCLUDING FINANCE LEASE
PREMIUM OBLIGATIONS PREMIUM OBLIGATIONS
------------- -------------- -------------- --------------
(Pounds)'000 (Pounds)'000 (Pounds)'000 (Pounds)'000
<S> <C> <C> <C> <C>
Analysis of changes in
financing during the
year:
Balance at 1st March.... 1,418 247 1,250 149
Net cash
inflow/(outflow) from
financing.............. 98 (108) 168 (106)
Inception of finance
leases................. -- -- -- 204
----- ---- ----- ----
Balance at 28th Februar-
y...................... 1,516 139 1,418 247
----- ---- ----- ----
<CAPTION>
1997 1996
------------- --------------
(Pounds)'000 (Pounds)'000
<S> <C> <C>
Analysis of changes in
cash and cash
equivalents during the
year:
Balance at 1st March.... 68 329
Net cash
inflow/(outflow)....... 290 (254)
Exchange adjustments.... 56 (7)
----- ----
Balance at 28th Februar-
y...................... 414 68
----- ----
</TABLE>
<TABLE>
<CAPTION>
CHANGE IN
CHANGE IN PREVIOUS
1997 1996 1995 YEAR YEAR
----- ----- ----- --------- ---------
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents comprise:
Cash at bank and in hand............. 439 298 619 141 (321)
Bank overdraft....................... (25) (230) (290) 205 60
----- ----- ----- ------ -----
414 68 329 346 (261)
Short term deposits (original matu-
rity more than 90 days)............. 1,650 2,900 1,751 (1,250) 1,149
----- ----- ----- ------ -----
Total net funds...................... 2,064 2,968 2,080 (904) 888
----- ----- ----- ------ -----
</TABLE>
III-23
<PAGE>
APPENDIX IV
CERTAIN MARKET AND DIVIDEND INFORMATION
1.MARKET AND PRICE DATA
The following table sets out the closing middle market quotations for a Rolfe
& Nolan Share (as derived from SEDOL) and the closing price for a share of
SunGard Common Stock on the NYSE, in each case for the first dealing day that
both the LSE and the NYSE were open for business in each month from August
1997 to February 1998, for 4 February 1998 (the last dealing day before the
announcement of the Offer) and for 18 February 1998 (the last practicable date
before posting this Offer Document):
<TABLE>
<CAPTION>
ROLFE & PRICE PER SHARE
NOLAN OF SUNGARD
SHARE PRICE COMMON STOCK
DATE (IN PENCE) DATE (IN DOLLARS)
- ---------------- ------------ ---------------- ----------------
<S> <C> <C> <C>
1 August 1997 362.5 1 August 1997 25.031
1 September 1997 317.5 2 September 1997 26.250
1 October 1997 342.5 1 October 1997 24.625
3 November 1997 300.0 3 November 1997 23.313
1 December 1997 300.0 1 December 1997 26.625
2 January 1998 342.5 2 January 1998 29.938
2 February 1998 342.5 2 February 1998 29.750
4 February 1998 360.0 4 February 1998 31.188
18 February 1998 477.5 18 February 1998 31.875
</TABLE>
2.DIVIDEND POLICY
No dividends have ever been paid on SunGard's Common Stock. SunGard's current
policy is to retain earnings for use in its business. Any payment of cash
dividends in the future will depend upon the financial condition, capital
requirements and earnings of SunGard, as well as other factors as the Board of
Directors of SunGard may deem relevant.
IV-1
<PAGE>
APPENDIX V
ADDITIONAL INFORMATION
1. RESPONSIBILITY
(a) The directors of SunGard (whose names are set out in paragraph 2(a)
below) accept responsibility for the information contained in this
Offer Document, except for the information in this Offer Document
concerning Rolfe & Nolan, its subsidiaries and their respective
businesses, the directors of Rolfe & Nolan and their connected persons
and persons acting in concert with, and associates of, Rolfe & Nolan.
Subject as aforesaid, to the best of the knowledge and belief of the
Directors of SunGard (who have taken all reasonable care to ensure
that such is the case), the information contained in this Offer
Document for which they are responsible is in accordance with the
facts and does not omit anything likely to affect the import of such
information.
(b) The directors of Rolfe & Nolan (whose names are set out in paragraph
2(b) below) accept responsibility for the information contained in
this Offer Document relating to Rolfe & Nolan, its subsidiaries and
their respective businesses, themselves and their connected persons,
and persons acting in concert with, and associates of, Rolfe & Nolan.
To the best of the knowledge and belief of the directors of Rolfe &
Nolan (who have taken all reasonable care to ensure that such is the
case), the information contained in this Offer Document for which they
are responsible is in accordance with the facts and does not omit
anything likely to affect the import of such information.
(c) The statements set out in paragraphs (a) and (b) above are included
solely to comply with the requirements of Rule 19.2 of the City Code
and shall not be deemed to establish or expand any liability under the
Securities Act.
2. DIRECTORS
(a) The directors of SunGard are as follows:
<TABLE>
<C> <S>
James L Mann Chairman of the Board, President and Chief
Executive Officer
Gregory S Bentley Non-Executive Director
Michael C Brooks Non-Executive Director
Albert A Eisenstat Non-Executive Director
Bernard Goldstein Non-Executive Director
Michael Roth Non-Executive Director
Malcolm I Ruddock Non-Executive Director
Lawrence J Schoenberg Non-Executive Director
</TABLE>
The executive offices of SunGard are located at 1285 Drummers Lane, Wayne,
PA 19087-1586, USA.
(b) The directors of Rolfe & Nolan are as follows:
<TABLE>
<C> <S>
Peter Donal Day Chief Executive
David Arthur Battle Managing Director, Futures & Options
Anthony Garry Biddle Non-Executive Director
Tim Michael Hearley Non-Executive Director
Stephen Charles Rapkin Managing Director, Asia Pacific
Paul Keith Wright Finance Director
Colin Norman Day Non-Executive Director
</TABLE>
The registered office of Rolfe & Nolan, which is also the business address
of its directors, is Lowndes House, 1-9 City Road, London EC1Y 1AA.
3. DISCLOSURES OF INTERESTS AND DEALINGS
(a) At the close of business on 18 February 1998 (the last practicable
date prior to the posting of this Offer Document), the interests of
the directors of Rolfe & Nolan and
V-1
<PAGE>
their connected persons (within the meaning of section 346 of the
Companies Act), all of which (save as noted below) are beneficial, in
Rolfe & Nolan Shares which have been notified to Rolfe & Nolan pursuant
to section 324 or 328 of the Companies Act or are required to be entered
in the register of Rolfe & Nolan directors' interests maintained under
the provisions of section 325 of the Companies Act were as follows:
<TABLE>
<CAPTION>
NO. OF ROLFE
& NOLAN
NAME SHARES
---- ------------
<S> <C>
Peter Donal Day 350,678
David Arthur Battle 5,286
Anthony Garry Biddle 12,000
Colin Norman Day nil
Tim Michael Hearley 120,000(1)
Stephen Charles Rapkin 538,056
Paul Keith Wright 8,000(2)
</TABLE>
--------
(1) 9,000 Rolfe & Nolan Shares noted against T. M. Hearley's name
represent non-beneficial interests.
(2) 5,000 Rolfe & Nolan Shares noted against P. K. Wright's name
represent a holding by his wife.
The above persons, who comprise all of the directors of Rolfe & Nolan
who own Rolfe & Nolan Shares at 18 February 1998, have irrevocably
undertaken to accept the Offer in respect of all the Rolfe & Nolan
Shares set out above, other than those referred to in the notes,
representing in aggregate approximately 7.7 per cent. of the issued
share capital of Rolfe & Nolan.
The irrevocable undertakings referred to above do not cease to be
binding in the event of an improved offer for Rolfe & Nolan.
(b) As of the close of business on 18 February 1998 (the latest
practicable date prior to the posting of this document) the following
options and awards over Rolfe & Nolan Shares had been granted to
certain directors of Rolfe & Nolan and remain outstanding under the
Rolfe & Nolan Share Schemes.
<TABLE>
<CAPTION>
NO. OF ROLFE
& NOLAN FIRST
SHARES UNDER EXERCISE EXERCISE
NAME DATE OF GRANT OPTION PRICE DATE EXPIRY DATE
------------------------ ------------- ------------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
David Arthur Battle..... 19.12.1996 31,112(4) 337.5p 19.12.99 19.12.06
19.12.1996 8,888(3) 337.5p 19.12.99 19.12.06
01.08.1993 662(5) 104p 01.08.98 01.02.99
01.10.1995 2,194(5) 157.2p 01.10.00 01.04.01
01.08.1996 817(5) 286.4p 01.08.99 01.02.00
Peter Donal Day......... 10.06.1993 39,322(1) 113p 10.06.96 10.06.03
20.12.1994 100,000(2) 177p 20.12.97 20.12.04
01.08.1996 817(5) 286.4p 01.08.99 01.02.00
Paul Keith Wright....... 23.01.1996 40,000(3) 300p 23.01.99 23.01.06
01.08.1996 817(5) 286.4p 01.08.99 01.02.00
</TABLE>
--------
(1) This option was granted under the Rolfe & Nolan Executive Share
Option Scheme. The exercise of this option is not dependent upon
any performance criteria or any other constraints apart from the
period during which exercise must take place.
(2) This option was granted under the Rolfe & Nolan Executive Share
Option Scheme (1993). This option may only be exercised if, not
less than three years following the date of grant, the earnings per
share of Rolfe & Nolan exceed a target set at 8.85p for the year to
28th February 1995 and then have increased by a percentage increase
equal to the aggregate of the percentage increase in the Retail
Prices Index for the preceding twelve months and five percentage
points.
(3) These options were granted under the Rolfe & Nolan Executive Share
Option Scheme (1995). The options of Messrs. Wright, and Battle may
only be exercised if, not less than three years following the date
of grant, the earnings per share of Rolfe & Nolan for each
financial year after the year ended 29th February 1996 have
increased by a percentage increase equal to the aggregate of the
percentage increase in the Retail Prices Index for the preceding
twelve months and five percentage points.
(4) This option was granted under the Rolfe & Nolan Executive Share
Option Scheme for Overseas Employees. This option may only be
exercised if, not less than three years following the date of
grant, the earnings per share of Rolfe & Nolan for each financial
year after the year ended 29th February 1996 have increased by a
percentage increase equal to the aggregate of the percentage
increase in the Retail Prices Index for the preceding twelve months
and five percentage points.
V-2
<PAGE>
(5) Indicates options granted under the Rolfe & Nolan Savings Related
Share Option Scheme or the Rolfe & Nolan Savings Related Share
Option Scheme (1995).
(c) There have been no dealings by directors of Rolfe & Nolan or their
connected persons in Rolfe & Nolan Shares during the disclosure
period, save as follows:
<TABLE>
<CAPTION>
NUMBER OF PRICE PER
ROLFE & ROLFE &
NOLAN NOLAN
NAME DATE TRANSACTION SHARES SHARE (P)
---------------------- ---------- ------------------ ---------- ----------
<S> <C> <C> <C> <C>
David Arthur Battle... 07-04-1997 Exercise of option 1,934 77.5
David Arthur Battle... 10-09-1997 Exercise of option 852 88
</TABLE>
(d) As of 18 February 1998 (the last practicable date before posting this
Offer Document), the beneficial interests of the directors of SunGard
and their connected persons in SunGard Common Stock were as follows:
<TABLE>
<CAPTION>
NO. OF SHARES
OF SUNGARD
NAME COMMON STOCK
------------------------------------------ --------------
<S> <C>
James L. Mann............................. 900,088(1)
Gregory S. Bentley........................ 179,850(2)
Michael C. Brooks......................... 44,000(3)
Albert A. Eisenstat....................... 44,000(3)
Bernard Goldstein......................... 40,000(4)
Michael. Roth............................. 40,000(3)
Malcolm I. Ruddock........................ 44,000(3)(5)
Lawrence J. Schoenberg.................... 37,752(3)
</TABLE>
--------
(1) None of Mr. Mann's shares are restricted. Mr. Mann also holds the
following options, all of which must be exercised within 10 years
and 5 days of the relevant date of grant:
<TABLE>
<CAPTION>
Grant Date No. of Shares Exercise Price
---------- ------------- --------------
<S> <C> <C>
02-19-91 125,000 $ 3.50
10-31-95 400,000 $13.125
10-31-95 400,000 $13.125
01-07-96 200,000 $ 14.50
</TABLE>
(2) Includes 4,000 restricted shares that become unrestricted in May
1998.
(3) Includes 16,000 restricted shares that become unrestricted at the
rate of 4,000 shares per year in May each year beginning May 1998
and ending May 2001.
(4) Includes 8,000 restricted shares that become unrestricted at the
rate of 4,000 in May 1998 and 4,000 in May 1999. Includes 2,000
shares of SunGard Common Stock held by Mr. Goldstein's wife.
(5) Includes 11,000 shares of SunGard Common Stock held by Mr.
Ruddock's wife.
(e) There have been no dealings for value by the directors of SunGard or
their connected persons in SunGard Common Stock during the disclosure
period, save as follows:
<TABLE>
<CAPTION>
NO. OF SHARES
OF SUNGARD
NAME DATE TRANSACTION COMMON STOCK PRICE PER SHARE
------------------ -------- ----------- -------------- ---------------
<S> <C> <C> <C> <C>
James L. Mann 12-30-96 Sale 68,600 20.25(/1/)
12-30-96 Sale 14,000 19.75(/1/)
Gregory S. Bentley 11-17-97 Sale 15,500 24.1875
11-17-97 Sale 4,400 24.3127
05-08-97 Sale 20,000 23.875(/1/)
02-20-97 Sale 30,000 22.25(/1/)
</TABLE>
- --------
(1) As adjusted to reflect the two-for-one stock split which occurred
in September 1997.
(f) Save as disclosed above:
(i) neither SunGard nor any subsidiary of SunGard owns any Rolfe &
Nolan Shares;
(ii) no Director of SunGard or Rolfe & Nolan is interested (as defined
in Parts VI and X of the Companies Act), directly or indirectly,
in relevant securities (as defined below);
(iii) no person acting in concert with SunGard owns or controls any
relevant securities;
V-3
<PAGE>
(iv) no person who has irrevocably committed himself to accept the
Offer owns or controls any relevant securities;
(v) Rolfe & Nolan owns no relevant securities;
(vi) no subsidiary of Rolfe & Nolan, nor any pension fund of Rolfe &
Nolan or of any of its subsidiaries, nor any bank, stockbroker,
financial or other professional adviser (excluding exempt market-
makers) to Rolfe & Nolan or to any subsidiary of Rolfe & Nolan or
to any associated company of Rolfe & Nolan or any persons
controlling, controlled by, or under the same control as any such
bank, stockbroker, financial or other professional adviser, owns
or controls or is interested, directly or indirectly in any
relevant securities; and
(vii) no person mentioned in subparagraphs (i) to (v) above has dealt
for value in relevant securities during the disclosure period
and no person mentioned in subparagraph (vi) has dealt for value
in relevant securities between 5 February 1998 and 18 February
1998 (the last practicable date before posting this Offer
Document).
(g) For purposes of the above:
(i) "relevant securities" include:
(A) Rolfe & Nolan Shares;
(B) securities convertible into (A), rights to subscribe for (A)
and options (including traded options) in respect of, or
derivatives referenced to, (A);
(C) equity share capital of SunGard;
(D) securities of SunGard which carry substantially the same rights
as those to be issued under the Offer; and
(E) securities convertible into (C) or (D), rights to subscribe for
(C) or (D) and options (including traded options) in respect
of, or derivatives referenced to, (C) or (D);
(ii) "bank" means any bank whose relationship to any relevant party is
not solely the provision of normal commercial banking services;
and
(iii) "disclosure period" means the period commencing on 5 February
1997 and ending on 18 February 1998 being respectively the date
12 months preceding the commencement of the Offer Period and the
last practicable date before posting this Offer Document.
4. SERVICE CONTRACTS OF ROLFE & NOLAN DIRECTORS
(a) Under a service contract with Rolfe & Nolan dated 24 May 1990, Mr. S.
C. Rapkin is entitled to an annual salary of (Pounds)104,270 together
with use of a company car, an interest-free season ticket loan,
private health insurance and permanent health insurance. The contract
is terminable by him or Rolfe & Nolan by 12 months' notice save that
Rolfe & Nolan is obliged to give Mr. Rapkin 36 months notice where a
person has acquired over 50 per cent. of Rolfe & Nolan's equity share
capital. Rolfe & Nolan is not required to provide such additional
notice where the acquisition of such shareholding is in consequence of
a reconstruction or amalgamation voluntarily undertaken by the
Company.
(b) Save as disclosed above there are no contracts of service between any
director of Rolfe & Nolan and Rolfe & Nolan or any of its subsidiaries
having more than twelve months to run, and no such contract has been
entered into or amended or replaced within the six months preceding
the date of this Offer Document.
V-4
<PAGE>
5. MATERIAL CONTRACTS
(a) The following contract (not being a contract entered into in the
ordinary course of business) has been entered into by SunGard or its
subsidiaries since 5 February 1996 and is or may be material:
(i) Agreement and Plan of Merger and Reorganization dated as of
October 17, 1997 between SunGard, Infinity and Information Data
Inc., relating to SunGard's acquisition of Infinity as described
in "Information Regarding SunGard--3. Recent Developments of
SunGard."
(b) The following contracts (not being contracts entered into in the
ordinary course of business) have been entered into by Rolfe & Nolan
or its subsidiaries since 5 February 1996 and are or may be material:
(i) An acquisition agreement dated 27 June 1997 between Tim John
Hudson and Georgina Susan Hudson (together the "Sellers") and
Rolfe & Nolan whereby Rolfe & Nolan acquired the whole of the
issued share capital of Hudson Consulting Limited ("HCL") for cash
consideration of (Pounds)50,000 paid at completion (being the date
of the agreement) and the allotment and issue of 57,048 Rolfe &
Nolan Ordinary Shares credited as fully paid at completion. The
acquisition agreement contains warranties relating to HCL given by
the Sellers to Rolfe & Nolan.
(ii) A placing agreement dated 22 August 1997 between Greig Middleton
& Co. Limited and Rolfe & Nolan whereby Greig Middleton agreed to
use its reasonable endeavours to procure persons to subscribe for
629,130 new Rolfe & Nolan Ordinary Shares at a price of 305p per
share and to make an application to the LSE for these shares to
be admitted to the Official List of the LSE. Rolfe & Nolan agreed
to pay a commission of 1 per cent. of the aggregate placing price
of the shares.
6. THE COMPULSORY ACQUISITION
If, on or before the expiration of four months from the date of posting of
this Offer Document, SunGard has as a result of acceptances of the Offer,
or, subject to certain conditions, acquired or contracted to acquire, at
least 90 per cent. in value of the Rolfe & Nolan Shares to which the Offer
relates then (i) SunGard will be entitled, and intends, to acquire
compulsorily the remainder of the outstanding Rolfe & Nolan Shares in
accordance with sections 428-430F of the Companies Act, and (ii) in such
circumstances a holder of Rolfe & Nolan Shares may require SunGard to
purchase his or her Rolfe & Nolan Shares in accordance with the procedures
and time limits described in section 430A of the Companies Act. A copy of
sections 428-430F of the Companies Act is set out in Appendix VII to this
Offer Document.
7. US STATE BLUE SKY LAWS
The Offer is being made to all Rolfe & Nolan Shareholders; provided,
however, that Rolfe & Nolan Shareholders in any jurisdiction in the US in
which the making of the Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction should not accept or purport
to accept the Offer. SunGard is not presently aware of any jurisdiction in
the US that prohibits the making of the Offer. SunGard will take all
necessary or appropriate action for the purpose of making the Offer
available to all Rolfe & Nolan Shareholders in any jurisdiction in the US.
In any jurisdiction the securities laws or Blue Sky Laws of which require
the Offer to be made by a registered broker or dealer, the Offer is being
made on behalf of SunGard by one or more registered brokers or dealers that
are licensed under the laws of such jurisdiction.
8. LEGAL MATTERS
Certain legal matters with respect to the validity of the SunGard Common
Stock registered hereby and with respect to certain US federal income tax
consequences discussed under
V-5
<PAGE>
"Taxation" in the letter from Broadview Associates which begins on page 8
of this Offer Document are being passed upon by Blank Rome Comisky &
McCauley LLP, Philadelphia, Pennsylvania. Certain matters with respect to
UK tax consequences discussed under "Taxation" in the letter from Broadview
Associates are being passed upon by Norton Rose, London.
9. 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 included in Appendix II to this Offer
Document have been audited by Coopers & Lybrand L.L.P., independent public
accountants, and have been included herein on the authority of that firm as
experts in accounting and auditing.
The consolidated financial statements and schedule of Infinity for the year
ended December 31, 1996 appearing in the Infinity Annual Report on Form 10-
K for the year ended December 31, 1996 and included as an Exhibit to
SunGard's Current Report on Form 8-K dated January 16, 1998 have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report, given upon
the authority of such firm as experts in accounting and auditing.
The financial statements of Rolfe & Nolan as of 28 February 1997 and 29
February 1996 and for the years ended 28 February 1997, 29 February 1996
and 28 February 1995 included in this Offer Document have been audited by
Grant Thornton, chartered accountants, as indicated in their reports with
respect thereto and are included herein in reliance upon the authority of
said firm as experts in giving said reports.
10. GENERAL
(a) Broadview Associates, Close Brothers, Blank Rome Comisky & McCauley
LLP and Norton Rose have given and not withdrawn their written consent
to the issue of this Offer Document with the references to their
names, and Coopers & Lybrand L.L.P., independent public accountants,
Grant Thornton, chartered accountants, and Ernst & Young LLP,
independent auditors, have given and have not withdrawn their consent
to the inclusion of their opinions, each in the form and context in
which they are included.
(b) Rolfe & Nolan have agreed with Paul Wright that, conditional on the
Offer becoming or being declared unconditional in all respects, the
period of notice of termination required to be given by Paul Wright
under his service agreement with Rolfe & Nolan shall be reduced to one
month. Save as disclosed in this sub-paragraph(b), no agreement,
arrangement or understanding (including any compensation arrangement)
exists between SunGard or any party acting in concert with SunGard for
the purposes of the Offer and any of the directors or recent
directors, shareholders or recent shareholders of Rolfe & Nolan having
any connection with or dependence on the Offer.
(c) There is no agreement, arrangement or understanding whereby the
beneficial ownership of any of the Rolfe & Nolan Shares to be acquired
by SunGard pursuant to the Offer will be transferred to any other
person, except that SunGard reserves the right to transfer any Rolfe &
Nolan Shares to any of its subsidiaries.
(d) Save as disclosed in paragraph 3(a) above, neither SunGard nor any
person acting in concert with SunGard nor Rolfe & Nolan nor any
associate of Rolfe & Nolan has any arrangement (including any
indemnity or option arrangement), agreement or understanding (formal
or informal) of whatever nature relating to relevant securities (as
defined in paragraph 3(g) above), which may be an inducement to deal
or refrain from dealing.
V-6
<PAGE>
In this sub-paragraph (d):
(i) references to an "associate" are to:
(A) subsidiaries and associated companies of SunGard and Rolfe &
Nolan respectively and companies of which any such subsidiaries
or associated companies are associated companies;
(B) banks, financial and other professional advisers (including
stockbrokers) to SunGard and Rolfe & Nolan respectively or a
company covered in (A) above, including persons controlling,
controlled by or under the same control as such banks,
financial or other professional advisers;
(C) the directors (together with their close relatives and related
trusts) of SunGard and Rolfe & Nolan respectively or a company
covered in (A) above; and
(D) the pension funds of SunGard and Rolfe & Nolan respectively or
a company covered in (A) above;
(ii) references to a "bank" do not apply to a bank whose sole
relationship with SunGard and Rolfe & Nolan respectively or a
company covered in (A) above is the provision of normal
commercial banking services or such activities in connection with
the Offer as handling acceptances and other registration work;
and
(iii) ownership or control of 20 per cent. or more of the equity share
capital of a company is regarded as the test of associated
status and "control" means a holding, or aggregate holdings, of
shares carrying 30 per cent. or more of the voting rights
attributable to the share capital of a company which are
currently exercisable at a general meeting, irrespective of
whether the holding or aggregate holding gives de facto control.
(e) No proposal exists in connection with the Offer that any payment or
other benefit shall be made or given to any director of Rolfe & Nolan
as compensation for loss of office or as consideration for or in
connection with his retirement from office.
(f) The total emoluments receivable by the Directors of SunGard will not
be varied as a result of the proposed acquisition of Rolfe & Nolan or
by any other associated transactions.
(g) (i) So far as the Directors of SunGard are aware, and save as
disclosed in this Offer Document, there have been no material
changes in the financial or trading position of SunGard since 31
December 1996 (the date to which its last published audited
accounts were prepared); and
(ii) So far as the directors of Rolfe & Nolan are aware, and save as
disclosed in this Offer Document (in particular in the Chairman's
letter to Rolfe & Nolan Shareholders), there have been no
material changes in the financial or trading position of Rolfe &
Nolan since 28 February 1997 (the date to which its last
published audited accounts were prepared).
(h) Broadview Associates, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, has approved the contents of
this Offer Document solely for the purposes of section 57 of the
Financial Services Act 1986.
11. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection during
normal business hours on any weekday (English public holidays excepted) at
the offices of Norton Rose, Kempson House, Camomile Street, London EC3A 7AN
while the Offer remains open for acceptance:
(a) the Certificate of Incorporation and Bylaws of SunGard;
V-7
<PAGE>
(b) the Memorandum and Articles of Association of Rolfe & Nolan;
(c) the published audited consolidated accounts of Rolfe & Nolan for the
two financial years ended 28 February 1997;
(d) the Form 10K of SunGard for the two financial years ended 31 December
1995 and 31 December 1996;
(e) the Quarterly Reports on Form 10-Q of SunGard in respect of the
quarters ended 31 March 1997, 30 June 1997 and 30 September 1997;
(f) the Definitive Proxy Statement of SunGard in connection with SunGard's
1997 Annual Meeting of Shareholders;
(g) the Current Reports on Form 8-K of SunGard dated October 27, 1997 and
January 16, 1998;
(h) the preliminary announcement of SunGard's financial results for the
year ended 31 December 1997;
(i) the undertakings to accept the Offer referred to on pages 7 and 8 of
this Offer Document;
(j) the service contract referred to in paragraph 4 of this Appendix V;
(k) the material contracts of Rolfe & Nolan and SunGard referred to in
paragraph 5 of this Appendix V;
(l) the letters of consent referred to in paragraph 10(a) of this Appendix
V;
(m) the Affiliate Agreements referred to on page 11 of this Offer
Document;
(n) this Offer Document and the Form of Acceptance; and
(o) the rules of the Rolfe & Nolan Share Option Schemes.
V-8
<PAGE>
APPENDIX VI
DESCRIPTION OF SUNGARD CAPITAL STOCK AND
CHANGES IN THE RIGHTS OF ROLFE & NOLAN SHAREHOLDERS
1. DESCRIPTION OF THE CAPITAL STOCK OF SUNGARD
1.1. SUNGARD COMMON STOCK
As of 14 January 1997, 102,106,478 shares of SunGard Common Stock were
outstanding, out of a total authorized share capital of 120,000,000
shares of SunGard Common Stock. All outstanding shares of SunGard
Common Stock are fully paid and nonassessable.
1.2. AUTHORIZED BUT UNISSUED PREFERRED STOCK
The SunGard Board of Directors has the authority, without further
action by the SunGard Stockholders, to issue up to 5,000,000 shares of
preferred stock, par value $.01, in one or more series and to fix the
rights, preferences, privileges and restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, and the number of shares
constituting any series or the designation of such series. 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. There are currently no
shares of preferred stock issued or outstanding.
2. DESCRIPTION OF SUNGARD COMMON STOCK
The following is a brief description of certain rights of holders of
SunGard Common Stock. For a complete understanding of these rights,
stockholders are referred to the laws and applicable regulations and
listing requirements of the State of Delaware, United States, the NYSE and
the constitutional documents of SunGard.
2.1 GENERAL
SunGard is incorporated in the state of Delaware, United States and
operates in accordance with the Delaware General Corporation Law (the
"DGCL"). The rights of SunGard Stockholders are determined by the
DGCL, the securities and other legislation of the United States,
SunGard's Restated Certificate of Incorporation and SunGard's Amended
and Restated By-Laws. SunGard Common Stock is traded on the NYSE.
2.2 CERTIFICATES
SunGard Common Stock is issued in registered form. Every holder of
SunGard Common Stock is entitled to a share certificate.
2.3 DIVIDENDS
Subject to preferences applicable to any outstanding SunGard preferred
stock, holders of SunGard Common Stock are entitled to receive ratably
such dividends as may be declared by the SunGard Board of Directors
out of funds legally available for this purpose.
2.4 MEETINGS
Annual meetings of the SunGard Stockholders are held on the date
designated by the SunGard Board of Directors. Written notice must be
mailed to each stockholder entitled to vote not less than ten nor more
than sixty days before the date of the meeting. The presence in person
or by proxy of the holders of record of a majority of the issued and
outstanding shares of SunGard entitled to vote at such meeting
VI-1
<PAGE>
constitutes a quorum for the transaction of business at meetings of
the stockholders. Special meetings of the stockholders may be called
for any purpose by the Board of Directors, the Chairman of the Board
or the President and shall be called by the Chairman of the Board, the
President or the Secretary upon the written request of stockholders
holding of record at least 50 per cent. of the outstanding shares of
stock of SunGard entitled to vote at such meeting.
2.5. VOTING RIGHTS
The holders of SunGard Common Stock are entitled to one vote for each
share held of record. Stockholders may vote by proxy.
2.6. LIQUIDATION, DISSOLUTION OR WINDING UP
In the event of a liquidation, dissolution or winding up of SunGard,
after payment shall have been made to holders of preferred stock of
the full amounts to which they shall be entitled , the holders of
SunGard Common Stock are entitled, to the exclusion of the holders of
preferred stock, to share ratably according to the number of shares
held by them in all remaining assets available for distribution to the
SunGard stockholders.
2.7. TRANSFERS
The SunGard By-Laws do not allow the Board of Directors to refuse to
register transfers of shares.
2.8. OTHER RIGHTS
Holders of SunGard Common Stock have no preemptive, redemption,
conversion or other subscription rights.
3. DIFFERENCES BETWEEN SUNGARD COMMON STOCK AND ROLFE & NOLAN SHARES
There are a number of differences between the rights attaching to
SunGard Common Stock, as detailed above, and those attaching to Rolfe
& Nolan Shares. Certain rights attaching to Rolfe & Nolan Shares,
where those differences exist, are identified below. Such differences
may arise from the differences between the legislation governing Rolfe
& Nolan and SunGard as well as between the constitutional documents of
the two companies. The following is not a complete description of the
differences between the rights associated with Rolfe & Nolan Shares
compared to SunGard Common Stock.
Further, it does not address the differing rights of holders of
SunGard preferred stock should any be issued.
For a complete understanding of such differences, Stockholders are
referred to the laws and applicable regulations of England and the
State of Delaware, United States, the rules of the LSE, the NYSE, and
the constitutional documents of both Rolfe & Nolan and SunGard.
3.1 GENERAL
Rolfe & Nolan is incorporated in England and operates in accordance
with the Companies Act. Rules and regulations governing trading of
Rolfe & Nolan Shares differ from those relating to SunGard.
3.2 DIVIDENDS
Pursuant to Rolfe & Nolan's Articles of Association, and subject to
the restrictions of English law, dividends may be declared by the
Board of Rolfe & Nolan, or by Rolfe & Nolan, on the recommendation of
the Rolfe & Nolan Board, by ordinary resolution in an amount not to
exceed that recommended by the Rolfe & Nolan Board.
VI-2
<PAGE>
3.3 MEETINGS
The holders of not less than one tenth of the paid up voting capital
of Rolfe & Nolan have the right to requisition general meetings of
shareholders.
3.4 TRANSFERS
The Rolfe & Nolan Articles of Association allow the Rolfe & Nolan
Board, in its absolute discretion, and without giving any reason for
so doing to refuse to register certain transfers of Rolfe & Nolan
Shares, being shares which are not fully paid up, or being shares,
whether fully paid up or not which are in favour of more than four
joint transferees.
VI-3
<PAGE>
APPENDIX VII
CERTAIN PROVISIONS OF THE COMPANIES ACT
Set out below is an extract from the Companies Act:
"PART XIIIA
TAKEOVER OFFERS
428.TAKEOVER OFFERS
(1) In this Part of this Act "takeover offer" means an offer to acquire all
the shares, or all the shares of any class or classes, in a company (other
than shares which at the date of the offer are already held by the
offeror), being an offer on terms which are the same in relation to all
the shares to which the offer relates or, where those shares include
shares of different classes, in relation to all the shares of each class.
(2) In subsection (1) "shares" means shares which have been allotted on the
date of the offer but a takeover offer may include among the shares to
which it relates all or any shares that are subsequently allotted before a
date specified in or determined in accordance with the terms of the offer.
(3) The terms offered in relation to any shares shall for the purposes of this
section be treated as being the same in relation to all the shares or, as
the case may be, all the shares of a class to which the offer relates
notwithstanding any variation permitted by subsection (4).
(4) A variation is permitted by this subsection where:
a. the law of a country or territory outside the United Kingdom precludes
an offer of consideration in the form or any of the forms specified in
the terms in question or precludes it except after compliance by the
offeror with conditions with which he is unable to comply or which he
regards as unduly onerous; and
b. the variation is such that the persons to whom an offer of consideration
in that form is precluded are able to receive consideration otherwise
than in that form but of substantially equivalent value.
(5) The reference in subsection (1) to shares already held by the offeror
includes a reference to shares which he has contracted to acquire but that
shall not be construed as including shares which are the subject of a
contract binding the holder to accept the offer when it is made, being a
contract entered into by the holder either for no consideration and under
seal or for no consideration other than a promise by the offeror to make
the offer.
(6) In the application of subsection (5) to Scotland, the words "and under
seal" shall be omitted.
(7) Where the terms of an offer make provision for their revision and for
acceptances on the previous terms to be treated as acceptances on the
revised terms, the revision shall not be regarded for the purposes of this
Part of this Act as the making of a fresh offer and references in this
Part of this Act to the date of the offer shall accordingly be construed
as references to the date on which the original offer was made.
(8) In this Part of this Act "the offeror" means, subject to section 430D, the
person making a takeover offer and "the company" means the company whose
shares are the subject of the offer.
429.RIGHT OF OFFEROR TO BUY OUT MINORITY SHAREHOLDERS
(1) If, in a case in which a takeover offer does not relate to shares of
different classes, the offeror has by virtue of acceptance of the offer
acquired or contracted to acquire not less than nine-tenths in value of
the shares to which the offer relates he may give notice to the
VII-1
<PAGE>
holder of any shares to which the offer relates which the offeror has not
acquired or contracted to acquire that he desires to acquire those shares.
(2) If, in a case in which a takeover offer relates to shares of different
classes, the offeror has by virtue of acceptances of the offer acquired or
contracted to acquire not less than nine-tenths in value of the shares of
any class to which the offer relates, he may give notice to the holder of
any shares of that class which the offeror has not acquired or contracted
to acquire that he desires to acquire those shares.
(3) No notice shall be given under subsection (1) or (2) unless the offeror
has acquired or contracted to acquire the shares necessary to satisfy the
minimum specified in that subsection before the end of the period of four
months beginning with the date of the offer; and no such notice shall be
given after the end of the period of two months beginning with the date on
which he has acquired or contracted to acquire shares which satisfy that
minimum.
(4) Any notice under this section shall be given in the prescribed manner; and
when the offeror gives the first notice in relation to an offer he shall
send a copy of it to the company together with a statutory declaration by
him in the prescribed form stating that the conditions for the giving of
the notice are satisfied.
(5) Where the offeror is a company (whether or not a company within the
meaning of this Act) the statutory declaration shall be signed by a
director.
(6) Any person who fails to send a copy of a notice or statutory declaration
as required by subsection (4) or makes such a declaration for the purposes
of that subsection knowing it to be false or without having reasonable
grounds for believing it to be true shall be liable to imprisonment or a
fine, or both, and for continued failure to send the copy or declaration,
to a daily default fine.
(7) If any person is charged with an offence for failing to send a copy of a
notice as required by subsection (4) it is a defense for him to prove that
he took reasonable steps for securing compliance with that subsection.
(8) When during the period within which a takeover offer can be accepted the
offeror acquires or contracts to acquire any of the shares to which the
offer relates but otherwise than by virtue of acceptances of the offer,
then, if:
(a) the value of the consideration for which they are acquired or
contracted to be acquired ("the acquisition consideration") does not at
that time exceed the value of the consideration specified in the terms
of the offer; or
(b) those terms are subsequently revised so that when the revision is
announced the value of the acquisition consideration, at the time
mentioned in paragraph (a) above, no longer exceeds the value of the
consideration specified in those terms,
the offeror shall be treated for the purposes of this section as having
acquired or contracted to acquire those shares by virtue of acceptances of
the offer; but in any other case those shares shall be treated as excluded
from those to which the offer relates.
430.EFFECT OF NOTICE UNDER SECTION 429
(1) The following provisions shall, subject to section 430C, have effect where
a notice is given in respect of any shares under section 429.
(2) The offeror shall be entitled and bound to acquire those shares on the
terms of the offer.
(3) Where the terms of an offer are such as to give the holder of any shares a
choice of consideration the notice shall give particulars of the choice
and state:
(a) that the holder of the shares may within six weeks from the date of
the notice indicate his choice by a written communication sent to the
offeror at an address specified in the notice; and
VII-2
<PAGE>
(b) which consideration specified in the offer is to be taken as applying
in default of his indicating a choice as aforesaid;
and the terms of the offer mentioned in subsection (2) shall be determined
accordingly.
(4) Subsection (3) applies whether or not any time-limit or the other
conditions applicable to the choice under the terms of the offer can still
be complied with; and if the consideration chosen by the holders of the
shares:
(a) is not cash and the offeror is no longer able to provide it; or
(b) was to have been provided by a third party who is no longer bound or
able to provide it,
the consideration shall be taken to consist of an amount of cash payable
by the offeror which at the date of the notice is equivalent to the chosen
consideration.
(5) At the end of six weeks from the date of the notice the offeror shall
forthwith:
(a) send a copy of the notice to the company; and
(b) pay or transfer to the company the consideration for the shares to
which the notice relates.
(6) If the shares to which the notice relates are registered, the copy of the
notice sent to the company under subsection (5)(a) shall be accompanied by
an instrument of transfer executed on behalf of the shareholder by a
person appointed by the offeror; and on receipt of that instrument the
company shall register the offeror as the holder of those shares.
(7) If the shares to which the notice relates are transferable by the delivery
of warrants or other instruments, the copy of the notice sent to the
company under subsection (5)(a) shall be accompanied by a statement to
that effect; and the company shall on receipt of the statement issue the
offeror with warrants or other instruments in respect of the shares and
those already in issue in respect of the shares shall become void.
(8) Where the consideration referred to in paragraph (b) of subsection (5)
consists of shares or securities to be allotted by the offeror the
reference in that paragraph to the transfer of the consideration shall be
construed as a reference to the allotment of the shares or securities to
the company.
(9) Any sum received by a company under paragraph (b) of subsection (5) and
any other consideration received under that paragraph shall be held by the
company on trust for the person entitled to the shares in respect of which
the sum or other consideration was received.
(10) Any sum received by a company under paragraph (b) of subsection (5), and
any dividend or other sum accruing from any other consideration received
by a company under that paragraph, shall be paid into a separate bank
account, being an account the balance on which bears interest at an
appropriate rate and can be withdrawn by such notice (if any) as is
appropriate.
(11) Where after reasonable enquiry made at such intervals as are reasonable
the person entitled to any consideration held on trust by virtue of
subsection (9) cannot be found and twelve years have elapsed since the
consideration was received or the company is wound up the consideration
(together with any interest, dividend or other benefit that has accrued
from it) shall be paid into court.
(12) In relation to a company registered in Scotland, subsections (13) and
(14) shall apply in place of subsection (11).
(13) Where after reasonable enquiry made at such intervals as are reasonable
the person entitled to any consideration held on trust by virtue of
subsection (9) cannot be found and
VII-3
<PAGE>
twelve years have elapsed since the consideration was received or the
company is wound up:
(a) the trust shall terminate;
(b) the company or, as the case may be, the liquidator shall sell any
consideration other than cash and any benefit other than cash that has
accrued from the consideration; and
a sum representing:
(i)the consideration so far as it is cash;
(ii)the proceeds of any sale under paragraph (b) above; and
(iii)any interest, dividend or other benefit that has accrued from the
consideration,
shall be deposited in the name of the Accountant of Court in a bank
account such as is referred to in subsection (10) and the receipt for the
deposit shall be transmitted to the Accountant of Court.
(14) Section 58 of the Bankruptcy (Scotland) Act 1985 (so far as consistent
with this Act) shall apply with any necessary modifications to sums
deposited under subsection (13) as that section applies to sums deposited
under section 57(1) of that Act.
(15) The expenses of any such enquiry as is mentioned in subsection (11) or
(13) may be defrayed out of the money or other property held on trust for
the person or persons to whom the enquiry relates.
430A.RIGHT OF MINORITY SHAREHOLDER TO BE BOUGHT OUT BY OFFEROR
(1) If a takeover offer relates to all the shares in a company and at any time
before the end of the period within which the offer can be accepted:
(a) the offeror has by virtue of acceptances of the offer acquired or
contracted to acquire some (but not all) of the shares to which the
offer relates; and
(b) those shares, with or without any other shares in the company which he
has acquired or contracted to acquire, amount to not less than nine-
tenths in value of all the shares in the company, the holder of any
shares to which the offer relates who has not accepted the offer may by
a written communication addressed to the offeror require him to acquire
those shares.
(2) If a takeover offer relates to shares of any class or classes and at any
time before the end of the period within which the offer can be accepted:
(a) the offeror has by virtue of acceptances of the offer acquired or
contracted to acquire some (but not all) of the shares of any class to
which the offer relates; and
(b) those shares, with or without any other shares of that class which he
has acquired or contracted to acquire, amount to not less than nine-
tenths in value of all the shares of that class,
the holder of any shares of that class who has not accepted the offer may
by a written communication addressed to the offeror require him to acquire
those shares.
(3) Within one month of the time specified in subsection (1) or, as the case
may be, subsection (2) the offeror shall give any shareholder who has not
accepted the offer notice in the prescribed manner of the rights that are
exercisable by him under that subsection; and if the notice is given
before the end of the period mentioned in that subsection it shall state
that the offer is still open for acceptance.
(4) A notice under subsection (3) may specify a period for the exercise of the
rights conferred by this section and in that event the rights shall not be
exercisable after the end of that
VII-4
<PAGE>
period; but no such period shall end less than three months after the end
of the period within which the offer can be accepted.
(5) Subsection (3) does not apply if the offeror has given the shareholder a
notice in respect of the shares in question under section 429.
(6) If the offeror fails to comply with subsection (3) he and, if the offeror
is a company, every officer of the company who is in default or to whose
neglect the failure is attributable, shall be liable to a fine and for
continued contravention, to a daily default fine.
(7) If an offeror other than a company is charged with an offence for failing
to comply with subsection (3) it is a defense for him to prove that he
took all reasonable steps for securing compliance with that subsection.
430B.EFFECT OF REQUIREMENT UNDER SECTION 430A
(1) The following provision shall, subject to section 430C, have effect where
a shareholder exercises his rights in respect of any shares under section
430A.
(2) The offeror shall be entitled and bound to acquire those shares on the
terms of the offer or on such other terms as may be agreed.
(3) Where the terms of an offer are such as to give the holder of shares a
choice of consideration the holder of the shares may indicate his choice
when requiring the offeror to acquire them and the notice given to the
holder under section 430A(3):
(a) shall give particulars of the choice and of the rights conferred by
this subsection; and
(b) may state which consideration specified in the offer is to be taken as
applying in default of his indicating a choice;
and the terms of the offer mentioned in subsection (2) shall be determined
accordingly.
(4) Subsection (3) applies whether or not any time-limit or other conditions
applicable to the choice under the terms of the offer can still be
complied with; and if the consideration chosen by the holder of the
shares:
(a) is not cash and the offeror is no longer able to provide it; or
(b) was to have been provided by a third party who is no longer bound or
able to provide it,
the consideration shall be taken to consist of an amount of cash payable by
the offeror which at the date when the holder of the shares requires the
offeror to acquire them is equivalent to the chosen consideration.
430C.APPLICATIONS TO THE COURT
(1) Where a notice is given under section 429 to the holder of any shares the
court may, on an application made by him within six weeks from the date on
which the notice was given:
(a) order that the offeror shall not be entitled and bound to acquire the
shares; or
(b) specify terms of acquisition different from those of the offer.
(2) If an application to the court under subsection (1) is pending at the end
of the period mentioned in subsection (5) of section 430 that subsection
shall not have effect until the application has been disposed of.
(3) Where the holder of any shares exercises his rights under section 430A the
court may, on an application made by him or the offeror, order that the
terms on which the offeror is entitled and bound to acquire the shares
shall be such as the court thinks fit.
VII-5
<PAGE>
(4) No order for costs or expenses shall be made against a shareholder making
an application under subsection (1) or (3) unless the court considers:
(a) that the application was unnecessary, improper or vexatious; or
(b) that there has been unreasonable delay in making the application or
unreasonable conduct on his part in conducting the proceedings on the
application.
(5) Where a takeover offer has not been accepted to the extent necessary for
entitling the offeror to give notices under subsection (1) or (2) of
section 429 the court may, on the application of the offeror, make an
order authorizing him to give notices under that subsection if satisfied:
(a) that the offeror has after reasonable enquiry been unable to trace one
or more of the persons holding shares to which the offer relates;
(b) that the shares which the offeror has acquired or contracted to acquire
by virtue of acceptances of the offer, together with the shares held by
the person or persons mentioned in paragraph (a), amount to not less
than the minimum specified in that subsection; and
(c) that the consideration offered is fair and reasonable;
but the court shall not make an order under this subsection unless it
considers that it is just and equitable to do so having regard, in
particular, to the number of shareholders who have been traced but who have
not accepted the offer.
430D.JOINT OFFERS
(1) A takeover offer may be made by two or more persons jointly and in that
event this Part of this Act has effect with the following modifications.
(2) The conditions for the exercise of the rights conferred by sections 429
and 430A shall be satisfied by the joint offerors acquiring or contracting
to acquire the necessary shares jointly (as respects acquisitions by
virtue of acceptances of the offer) and either jointly or separately (in
other cases); and, subject to the following provisions, the rights and
obligations of the offeror under those sections and sections 430 and 430B
shall be respectively joint rights and joint and several obligations of
the joint offerors.
(3) It shall be a sufficient compliance with any provision of those sections
requiring or authorizing a notice or other document to be given or sent by
or to the joint offerors that it is given or sent by or to any of them;
but the statutory declaration required by section 429(4) shall be made by
all of them and, in the case of a joint offeror being a company, signed by
a director of that company.
(4) In sections 428, 430(8) and 430E references to the offeror shall be
construed as references to the joint offerors or any of them.
(5) In section 430(6) and (7) references to the offeror shall be construed as
references to the joint offerors or such of them as they may determine.
(6) In sections 430(4)(a) and 430B(4)(a) references to the offeror being no
longer able to provide the relevant consideration shall be construed as
references to none of the joint offerors being able to do so.
(7) In section 430C references to the offeror shall be construed as references
to the joint offerors except that any application under subsection (3) or
(5) may be made by any of them and the reference in subsection (5)(a) to
the offeror having been unable to trace one or more of the persons holding
shares shall be construed as a reference to none of the offerors having
been able to do so.
430E.ASSOCIATES
(1) The requirement in section 428(1) that a takeover offer must extend to all
the shares, or all the shares of any class or classes, in a company shall
be regarded as satisfied notwithstanding that the offer does not extend to
shares which associates of the offeror
VII-6
<PAGE>
hold or have contracted to acquire; but, subject to subsection (2), shares
which any such associate holds or has contracted to acquire, whether at the
time when the offer is made or subsequently, shall be disregarded for the
purposes of any reference in this Part of this Act to the shares to which a
takeover offer relates.
(2) Where during the period within which a takeover offer can be accepted any
associate of the offeror acquires or contracts to acquire any of the
shares to which the offer relates, then, if the condition specified in
subsection (8)(a) or (b) of section 429 is satisfied as respects those
shares they shall be treated for the purposes of that section as shares to
which the offer relates.
(3) In section 430A(1)(b) and (2)(b) the reference to shares which the offeror
has acquired or contracted to acquire shall include a reference to shares
which any associate of his has acquired or contracted to acquire.
(4) In this section "associate", in relation to an offeror, means:
(a) a nominee of the offeror;
(b) a holding company, subsidiary or fellow subsidiary of the offeror or a
nominee of such a holding company, subsidiary or fellow subsidiary;
(c) a body corporate in which the offeror is substantially interested; or
(d) any person who is, or is a nominee of, a party to an agreement with the
offeror for the acquisition of, or of an interest in, the shares which
are the subject of the takeover offer, being an agreement which
includes provisions imposing obligations or restrictions such as are
mentioned in section 204(2)(a).
(5) For the purposes of subsection (4)(b) a company is a fellow subsidiary of
another body corporate if both are subsidiaries of the same body corporate
but neither is a subsidiary of the other.
(6) For the purposes of subsection (4)(c) an offeror has a substantial
interest in a body corporate if:
(a) that body or its directors are accustomed to act in accordance with his
directions or instructions; or
(b) he is entitled to exercise or control the exercise of one-third or more
of the voting power at general meetings of that body.
(7) Subsections (5) and (6) of section 204 shall apply to subsection (4)(d)
above as they apply to that section and subsections (3) and (4) of section
203 shall apply for the purposes of subsection (6) above as they apply for
the purposes of subsection (2)(b) of that section.
(8) Where the offeror is an individual his associates shall also include his
spouse and any minor child or step-child of his.
430F.CONVERTIBLE SECURITIES
(1) For the purposes of this Part of this Act securities of a company shall be
treated as shares in the company if they are convertible into or entitle
the holder to subscribe for such shares; and references to the holder of
shares or a shareholder shall be construed accordingly.
(2)Subsection (1) shall not be construed as requiring any securities to be
treated:
(a) as shares of the same class as those into which they are convertible or
for which the holder is entitled to subscribe; or
(b) as shares of the same class as other securities by reason only that the
shares into which they are convertible or for which the holder is
entitled to subscribe are of the same class."
VII-7
<PAGE>
APPENDIX VIII
DEFINITIONS
In this Offer Document and the accompanying Form of Acceptance the following
definitions apply, unless the current context requires otherwise:
<TABLE>
<S> <C>
"Affiliate"
when used in relation to a specified person, a
person that directly or indirectly through one or
more intermediaries, controls, or is controlled
by, or is under common control with such
specified person
"Affiliate Agreements"
agreements between SunGard and the Affiliates,
INTER ALIA, restricting the ability of the
Affiliates to deal in Rolfe & Nolan Shares or
SunGard Common Stock
"Australia"
the Commonwealth of Australia and its dependent
territories
"Board" or "Directors" or
"Board of Directors"
the board of directors of SunGard or Rolfe &
Nolan, as the case may be
"Broadview Associates"
BVA Associates Limited
"Canada"
Canada, its possessions and territories and all
areas subject to its jurisdiction or any
political sub-division thereof
"certificated" or "in
certificated form"
not in uncertificated form
"City Code"
The City Code on Takeovers and Mergers of the
United Kingdom
"Close Brothers"
Close Brothers Corporate Finance Limited
"Companies Act"
Companies Act 1985 of Great Britain, as amended
"Compulsory Acquisition"
compulsory acquisition by SunGard, pursuant to
sections 428 to 430F in each case inclusive of
the Companies Act on the same terms as the Offer,
of all outstanding Rolfe & Nolan Shares to which
the Offer relates
"CREST"
the relevant system (as defined in the
Regulations) in respect of which CRESTCo is the
Operator (as defined in the Regulations)
"CRESTCo"
CRESTCo Limited
"CREST member"
a person who has been admitted by CRESTCo as a
system-member (as defined in the Regulations)
"CREST participant"
a person who is, in relation to CREST, a system-
participant (as defined in the Regulations)
"CREST sponsor"
a CREST participant admitted to CREST as a CREST
sponsor
"CREST sponsored member"
a CREST member admitted to CREST as a sponsored
member
"dollars" or "$"
US dollars
"Enlarged SunGard Group"
the SunGard Group following the acquisition of
Rolfe & Nolan pursuant to the Offer
"Exchange Act"
United States Securities Exchange Act of 1934, as
amended, and the rules thereunder
"Final Exchange Rate"
the average of the midpoints of the closing
spread of the dollar to sterling spot rate, as
shown in the Financial Times (UK Edition), in
relation to the 20 days used to calculate the
Final SunGard Price
</TABLE>
VIII-1
<PAGE>
<TABLE>
<S> <C>
"Final SunGard Price" the average of the closing prices per share of
SunGard Common Stock on the NYSE for each of the
20 US Trading Days up to (but excluding) the day
on which the Offer becomes or is declared
unconditional in all respects
"First Closing Date of the
Offer" 20 March 1998
"Form of Acceptance"
the form of acceptance relating to the Offer
"Illustrative Exchange
Rate" 1.6425 (being the midpoint of the closing spread
of the dollar to sterling spot rate, as shown in
the Financial Times (UK Edition) on 4 February
1998)
"Infinity"
Infinity Financial Technology, Inc.
"Infinity Merger"
the merger between SunGard and Infinity effective
on 17 October 1997
"Inland Revenue"
The UK Inland Revenue
"IRC"
The United States Internal Revenue Code of 1986,
as amended
"IRG"
IRG Plc
"Japan"
Japan, its cities, prefectures, territories and
possessions
"LSE"
London Stock Exchange Limited
"member account ID"
the identification code or number attached to any
member account in CREST
"New SunGard Common Stock"
SunGard Common Stock to be issued pursuant to the
Offer
"NYSE"
New York Stock Exchange, Inc.
"Offer"
the recommended offer by Broadview Associates on
behalf of SunGard to acquire all the Rolfe &
Nolan Shares on the terms and subject to the
conditions set out in this Offer Document and the
Form of Acceptance including, where the context
so requires, any subsequent revision, variation,
extension or renewal thereof
"Offer Document"
this document including the Appendices hereto
"Optionholders"
holders of options under the Rolfe & Nolan Share
Option Schemes
"Panel"
The Panel on Takeovers and Mergers of the United
Kingdom
"participant ID"
the identification code or membership number used
in CREST to identify a particular CREST member or
other CREST participant
"pounds", "pounds
sterling", "sterling" or
"(Pounds)" UK pounds sterling
"Reference Period"
the rolling period consisting of up to a maximum
20 US Trading Days, initially commencing on the
day on which the Offer Document is posted and
always terminating on the day immediately
preceding the day on which the relevant
announcement is made
"Registration Statement"
the Registration Statement on Form S-4 relating
to the Offer, filed by SunGard with the SEC under
the Securities Act
"Regulations"
the Uncertificated Securities Regulations 1995
(SI 1995 No. 95/3272) of the United Kingdom
"Rolfe & Nolan"
Rolfe & Nolan Plc
"Rolfe & Nolan Group"
Rolfe & Nolan and its subsidiaries
"Rolfe & Nolan Shares"
existing issued and fully paid ordinary shares of
10p each in Rolfe & Nolan and any further such
shares which are unconditionally allotted or
issued before the date on which the Offer closes
(or such earlier date as SunGard may, subject to
the City Code, determine)
</TABLE>
VIII-2
<PAGE>
<TABLE>
<S> <C>
"Rolfe & Nolan holders of Rolfe & Nolan Shares
Shareholders"
"Rolfe & Nolan Share
Option Schemes"
the Rolfe & Nolan Executive Share Option Scheme,
the Rolfe & Nolan Executive Share Option Scheme
(1993),
the Rolfe & Nolan Executive Share Option Scheme
for Overseas Employees, the Rolfe & Nolan
Executive Share Option Scheme (1995), the Rolfe &
Nolan Savings Related Share Option Scheme and the
Rolfe & Nolan Savings Related Share Option Scheme
(1995)
"Rolfe & Nolan Shares to
which the Offer relates"
the aggregate of (a) the Rolfe & Nolan Shares
which have been unconditionally allotted or
issued on the date of the Offer and (b) the Rolfe
& Nolan Shares unconditionally allotted or issued
after the date of the Offer but on or before the
date on which the Offer closes (or such earlier
date as SunGard may, subject to the City Code,
decide) but excluding Rolfe & Nolan Shares which
at the date of the Offer are held by SunGard
and/or its associates (within the meaning of
section 430E of the Companies Act) or which, at
such date, SunGard and/or its associates have
(otherwise than under such a contract as is
described in section 428(5) of the Companies Act)
contracted to acquire
"SEC"
United States Securities and Exchange Commission
"Securities Act"
United States Securities Act of 1933, as amended,
and the rules thereunder
"SEDOL"
the London Stock Exchange Daily Official List
"SunGard"
SunGard Data Systems Inc.
"SunGard Common Stock"
$0.01 par value common stock of SunGard
"SunGard Group"
SunGard and its affiliates
"SunGard Stockholders"
holders of SunGard Common Stock
"TFE instruction"
a Transfer from Escrow instruction (as defined by
the CREST Manual issued by CRESTCo)
"TTE instruction"
a Transfer to Escrow instruction (as defined by
the CREST Manual issued by CRESTCo)
"Third Party"
government or governmental, quasi-governmental,
supranational, statutory, regulatory or
investigative body, trade agency, professional
association, institution, court or any other
similar person or body whatsoever in any
jurisdiction
"Treaty"
US-UK double tax convention relating to income
and capital gains
"uncertificated" or "in
uncertificated form"
for the time being recorded on the register of
members of Rolfe & Nolan as being held in
uncertificated form and title to which, by virtue
of the Regulations, may be transferred by means
of CREST
"UK GAAP"
UK generally accepted accounting principles
"UK Resident"
a person who is resident in the UK for tax
purposes and, in the case of UK taxation of
capital gains, a person who is ordinarily
resident in the UK for tax purposes
"United Kingdom" or "UK"
United Kingdom of Great Britain and Northern
Ireland
</TABLE>
VIII-3
<PAGE>
<TABLE>
<S> <C>
"United States" or "US" United States of America, its territories and
possessions, any State of the United States and
the District of Columbia
"US Business Day"
any day other than Saturday, Sunday or a federal
holiday in the US
"US GAAP"
US generally accepted accounting principles
"US Resident"
a person that is any of the following: (1) a
citizen of the US, (2) a resident alien (for US
federal income tax purposes), (3) a corporation,
partnership or other entity created or organized
in or under the laws of the US or any political
subdivision thereof, and (4) an estate or trust
the income of which is subject to US federal
income taxation regardless of source and that is
not resident in the UK for tax purposes
"US Trading Day"
any day on which the NYSE is open for trading
"Wider Rolfe & Nolan
Group" Rolfe & Nolan, its subsidiaries and any companies
in which Rolfe & Nolan or any of its subsidiaries
has a direct or indirect interest of 20 per cent.
or more of the equity capital
"Wider SunGard Group"
SunGard, its subsidiaries and any companies in
which SunGard or any of its subsidiaries has a
direct or indirect interest of 20 per cent. or
more of the equity capital
</TABLE>
VIII-4
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Delaware General Corporation Law provides, in substance, that Delaware
corporations shall have the power, under specified circumstances, to indemnify
their directors, officers, employees and agents in connection with actions,
suits or proceedings brought against them by third parties and in connection
with actions or suits by or in the right of the corporation, by reason of the
fact that they were or are such directors, officers, employees and agents,
against expenses (including attorney's fees) and, in the case of actions,
suits or proceedings brought by third parties, against judgments, fines and
amounts paid in settlement actually and reasonably incurred in any such
action, suit or proceeding.
SunGard's Bylaws provide for indemnification to the fullest extent permitted
by the Delaware General Corporation Law. Reference is made to the Bylaws of
SunGard filed as Exhibit 3.2 hereto.
As permitted by the Delaware General Corporation Law, SunGard has adopted an
amendment to its Amended and Restated Certificate of Incorporation to
eliminate the personal liability of its directors to SunGard and its
stockholders, in certain circumstances, for monetary damages arising from a
breach of the director's duty of care. Additionally, SunGard has entered into
indemnification agreements (in the form approved by SunGard's stockholders at
its 1987 Annual Meeting) with each of its directors and officers. These
agreements provide indemnification to the fullest extent permitted by law and,
in certain respects, provide greater protection than that specifically
provided by the Delaware General Corporation Law. The agreements do not
provide indemnification for, among other things, conduct that is adjudged to
be fraud, deliberate dishonesty or willful misconduct.
SunGard has obtained directors' and officers' liability insurance that
covers certain liabilities, including liabilities to SunGard and its
stockholders, in the amount of $20 million.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
ITEM 21(A). EXHIBITS
<TABLE>
<CAPTION>
NUMBER DOCUMENT
------ --------
<C> <S>
2.1(/1//4/) Agreement and Plan of Merger and Reorganization dated as of
October 17, 1997 among SunGard, Infinity and Information Data
Inc.
2.2(/1//4/) Agreement and Plan of Merger dated October 17, 1997 among SunGard
and Infinity.
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 LLP as to the validity
of the issuance of the shares of SunGard Common Stock to be
issued in the Offer.
8.1 Tax Opinion of Blank Rome Comisky & McCauley LLP as to the US tax
consequences described in the Offer Document.
8.2 Tax Opinion of Norton Rose as to the UK tax consequences
described in the Offer Document.
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.
</TABLE>
Part II-1
<PAGE>
<TABLE>
<CAPTION>
NUMBER DOCUMENT
------ --------
<C> <S>
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(/1//3/) 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(/1//0/) 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(/1//1/) SunGard's Restricted Stock Award Plan for Outside Directors.(14)
10.17(/1//2/) SunGard's 1994 Equity Incentive Plan.(14)
10.18(/8/) SunGard's 1996 Equity Incentive Plan.(14)
10.19(/1//3/) The United Kingdom Addendum to the Company's 1996 Equity
Incentive Plan.(14)
10.20(/1//3/) Summary Description of SunGard's Annual Executive Incentive
Compensation Program.(14)
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(/1//3/) Statement Re Computation of Per Share Earnings.
21.1(/1//3/) Subsidiaries of SunGard.
23.1 Consent of Coopers & Lybrand L.L.P. with respect to SunGard.
23.2 Consent of Grant Thornton with respect to Rolfe & Nolan.
23.3 Consent of Ernst & Young LLP, Independent Auditors.
23.4 Consent of Blank Rome Comisky & McCauley LLP (included in
Exhibits 5.1and 8.1).
23.5 Consent of Norton Rose (included in Exhibit 8.1).
24.1 Power of attorney of certain signatories (included on the
Signature Page).
99.1(/1//4/) Form of Voting Agreement related to the Infinity Merger dated as
of October 17, 1997.
99.2 Press Announcement.
99.3 Form of Acceptance.
</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).
Part II-2
<PAGE>
(6) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989
(Commission File No. 0-14232).
(7) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992
(Commission File No. 0-14232).
(8) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995
(Commission File No. 0-14232).
(9) Incorporated by reference to the Exhibits filed with SunGard's Quarterly
Report on Form 10-Q for the quarterly period ended September 30, 1996
(Commission File No. 0-14232).
(10) Incorporated by reference to the Exhibits filed with SunGard's Annual
Report on Form 10-K for the fiscal year ended December 31, 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 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.
Part II-3
<PAGE>
(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.
Part II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 1 TO THE 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.
/s/ James L. Mann
Date: February 19, 1998 By: _________________________________
JAMES L. MANN CHAIRMAN,
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
SIGNATURE CAPACITY DATE
/s/ James L. Mann Chief Executive
- ------------------------------------- Officer, President, February 19,
JAMES L. MANN and Chairman of the 1998
Board of Directors
(PRINCIPAL
EXECUTIVE OFFICER)
/s/ Michael J. Ruane Chief Financial
- ------------------------------------- Officer and Vice February 19,
MICHAEL J. RUANE President-Finance 1998
(PRINCIPAL
FINANCIAL OFFICER)
/s/ Andrew P. Bronstein Vice President and
- ------------------------------------- Controller February 19,
ANDREW P. BRONSTEIN (PRINCIPAL 1998
ACCOUNTING OFFICER)
Director
* February 19,
- ------------------------------------- 1998
GREGORY S. BENTLEY
Director
* February 19,
- ------------------------------------- 1998
MICHAEL C. BROOKS
Director
* February 19,
- ------------------------------------- 1998
ALBERT A. EISENSTAT
</TABLE>
Part II-5
<PAGE>
<TABLE>
<S> <C> <C>
SIGNATURE CAPACITY DATE
Director
* February 19,
- ------------------------------------- 1998
BERNARD GOLDSTEIN
Director
* February 19,
- ------------------------------------- 1998
MICHAEL ROTH
Director
* February 19,
- ------------------------------------- 1998
MALCOLM I. RUDDOCK
Director
* February 19,
- ------------------------------------- 1998
LAWRENCE J. SCHOENBERG
*By /s/ James L. Mann
- ------------------------------------- Director
ATTORNEY-IN-FACT February 19,
1998
</TABLE>
Part II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DOCUMENT
------ --------
<C> <S>
*5.1 Opinion of Blank Rome Comisky & McCauley LLP as to the validity of the
issuance of the shares of SunGard Common Stock to be issued in the
Offer.
**8.1 Tax Opinion of Blank Rome Comisky & McCauley LLP as to the US tax
consequences described in the Offer Document.
**8.2 Tax Opinion of Norton Rose as to the UK tax consequences described in
the Offer Document.
*23.1 Consent of Coopers & Lybrand L.L.P. with respect to SunGard.
*23.2 Consent of Grant Thornton with respect to Rolfe & Nolan.
*23.3 Consent of Ernst & Young LLP, Independent Auditors.
Consent of Blank Rome Comisky & McCauley LLP (included in Exhibits 5.1
23.4 and 8.1).
23.5 Consent of Norton Rose (included in Exhibit 8.2).
Power of attorney of certain signatories (included on the Signature
24.1 Page).
**99.2 Press Announcement
*99.3 Form of Acceptance.
</TABLE>
- --------
*Filed herewith
**Previously filed
<PAGE>
EXHIBIT 5.1
OPINION OF BLANK ROME COMISKY & MCCAULEY LLP
(ON BLANK ROME COMISKY & MCCAULEY LLP LETTERHEAD)
February 19, 1998
SunGard Data Systems, Inc.
1285 Drummers Lane
Wayne, PA 19087
RE: SunGard Data Systems, Inc. Registration Statement on Form S-4
Gentlemen:
We have acted as counsel to SunGard Data Systems, Inc.. (the "Company") in
connection with the Registration Statement on Form S-4 (the "Registration
Statement") filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, relating to the offer and
sale of up to 4,205,236 shares of common stock, par value $0.01 per share (the
"Common Stock"), by the Company in connection with the proposed acquisition of
Rolfe & Nolan Plc. This opinion is furnished pursuant to the requirements of
Item 601(b)(5) of Regulation S-K.
In rendering this opinion, we have examined only the following documents:
(i) the Company's Amended and Restated Certificate of Incorporation and
Bylaws, (ii) resolutions adopted by the Board of Directors of the Company
relating to the transactions contemplated by the Registration Statement, and
(iii) the Registration Statement. We have not performed any independent
investigation other than the document examination described above. Our opinion
is therefore qualified in all respects by the scope of that document
examination. We have assumed and relied on the truth, completeness,
authenticity and due authorization of all documents, and records examined and
the genuineness of all signatures. This opinion is limited to the laws of the
State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that the
shares of Common Stock of the Company which are being offered and sold by the
Company pursuant to the Registration Statement, when issued in the manner
contemplated by the Registration Statement, will be legally issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement.
Sincerely,
/s/ Blank Rome Comisky & McCauley
LLP
BLANK ROME COMISKY & McCAULEY LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF COOPERS & LYBRAND L.L.P.INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Amendment No. 1 to the Registration
Statement on Form S-4 of our report dated February 13, 1997, on our audits of
the consolidated financial statements of SunGard Data Systems Inc. as of
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996. We also consent to the reference to our firm under the
heading "Experts".
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 19, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We have issued our report dated May 29, 1997 accompanying the Group financial
statements of Rolfe & Nolan Plc for the year ended February 28, 1997, in
accordance with Auditing Standards in the United Kingdom which are included in
this Amendment No. 1 to the Registration Statement. We consent to the
inclusion in this Amendment No. 1 to the Registration Statement of the
aforementioned report and to the use of our name as it appears under the
caption "Experts."
/s/ Grant Thornton
Grant Thornton
Melton Street
London, United Kingdom
February 19, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-4) of SunGard Data
Systems Inc. for the registration of 4,205,236 shares of its common stock and
to the incorporation by reference therein of our report dated January 21, 1997
with respect to the consolidated financial statements and schedule of Infinity
Financial Technology, Inc. included in its Annual Report (Form 10-K) for the
year ended December 31, 1996 and included in SunGard's Current Report on Form
8-K dated January 16, 1998, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Palo Alto, California
February 19, 1998
<PAGE>
EXHIBIT 99.3
FORM OF ACCEPTANCE
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. WHEN
CONSIDERING WHAT ACTION YOU SHOULD TAKE, YOU ARE RECOMMENDED TO SEEK YOUR OWN
FINANCIAL ADVICE FROM YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR
OTHER INDEPENDENT FINANCIAL ADVISER DULY AUTHORISED UNDER THE FINANCIAL
SERVICES ACT 1986.
This document (the "Form") should be read in conjunction with the accompanying
offer document dated 20 February 1998 from Broadview Associates (the "Offer
Document"). Unless the context otherwise requires, the definitions contained
in the Offer Document also apply to this Form.
IF YOU HAVE SOLD OR TRANSFERRED ALL YOUR HOLDING OF ROLFE & NOLAN SHARES,
PLEASE FORWARD THIS FORM, THE OFFER DOCUMENT, THE REPLY-PAID ENVELOPE AND ANY
RELATED OFFERING DOCUMENTS TO THE PURCHASER OR TRANSFEREE OR TO THE
STOCKBROKER, BANK OR OTHER AGENT THROUGH WHOM THE SALE OR TRANSFER WAS
EFFECTED FOR TRANSMISSION TO THE PURCHASER OR TRANSFEREE. HOWEVER, SUCH
DOCUMENTS SHOULD NOT BE FORWARDED OR TRANSMITTED IN, INTO OR FROM CANADA,
JAPAN OR AUSTRALIA.
The Offer is not being made, directly or indirectly, in or into Canada,
Australia or Japan, and this Form, the Offer Document and any related offering
documents are not being, and must not be, mailed or transmitted in or into
Canada, Japan or Australia. The attention of overseas shareholders is drawn to
paragraph 7 of Part B and paragraph (b) of Part C of Appendix I to the Offer
Document.
If you are a CREST sponsored member, you should refer to your CREST sponsor
before completing this Form.
Broadview Associates are acting for Santa and no one else in connection with
the Offer, and accordingly will not be responsible to any other person for
providing the protections afforded to their customers nor for providing advice
in relation to the Offer.
- -------------------------------------------------------------------------------
FORM OF ACCEPTANCE AND AUTHORITY
in respect of the
RECOMMENDED OFFER
by
BROADVIEW ASSOCIATES
on behalf of
SUNGARD DATA SYSTEMS INC.
for
ROLFE & NOLAN PLC
ACTION TO BE TAKEN
. To accept the Offer, complete this form on page 3 by following the
instructions and notes for guidance set out on pages 2 and 4.
. RETURN THIS FORM, DULY COMPLETED AND SIGNED AND ACCOMPANIED, IF YOUR
ROLFE & NOLAN SHARES ARE IN CERTIFICATED FORM, BY YOUR SHARE
CERTIFICATE(S) AND/OR OTHER DOCUMENT(S) OF TITLE, BY POST OR BY HAND
(DURING NORMAL BUSINESS HOURS) TO IRG PLC, NEW ISSUES SECTION, BALFOUR
HOUSE, 390-398 HIGH ROAD, ILFORD, ESSEX IG1 1NQ, UNITED KINGDOM, AS SOON
AS POSSIBLE, BUT IN ANY EVENT SO AS TO ARRIVE NO LATER THAN 3.00PM ON 20
MARCH 1998. A FIRST CLASS REPLY-PAID ENVELOPE IS ENCLOSED FOR USE IN THE
UNITED KINGDOM.
. If your Rolfe & Nolan Shares are in uncertificated form (that is, in
CREST), you should return this Form and take the action set out in
Section 13 of the letter from Broadview Associates contained in the Offer
Document to transfer your Rolfe & Nolan Shares to an escrow balance. For
this purpose, the participant ID of the Escrow Agent, IRG plc, is RA06,
the member account ID of the escrow agent is ROLF and the Form of
Acceptance Reference Number of this Form (for insertion in the first
eight characters of the shared note field on the TTE instruction) is
shown in Section 1 on page 3. You should ensure that the transfer to
escrow settles as soon as possible and in any event, no later than 3.00pm
on 20 March, 1998. If you are a CREST sponsored member, you should refer
to your CREST sponsor before completing this Form.
. If you hold Rolfe & Nolan Shares in both certificated and uncertificated
form, you should complete a separate Form for each holding. Similarly,
you should complete a separate Form for Rolfe & Nolan Shares held in
uncertificated form but under a different member account ID, and for
Rolfe & Nolan Shares held in certificated form but under a different
designation. You can obtain further Forms by contacting IRG plc, New
Issues Section, Balfour House, 390-398 High Road, Ilford, Essex IG1 1NQ,
United Kingdom (telephone number: 0181 639 2000).
. If your Rolfe & Nolan Shares are in certificated form and your share
certificate(s) and/or other document(s) of title are with your bank,
stockbroker or other agent, you should complete and sign this Form and
arrange for it to be lodged by such agent with the relevant document(s).
. Please read Parts B and C of Appendix I to the Offer Document, the terms
of which are incorporated in and form part of this Form.
. If you hold Rolfe & Nolan Shares jointly with others, you must arrange
for all your co-holders to sign this Form.
. If you have any questions regarding this Form you should contact IRG plc
(telephone number: 0181 639 2000).
<PAGE>
PAGE 2
If you are in any doubt as to how to fill in this Form, please contact IRG plc,
at the address above (telephone number: 0181 639 2000).
HOW TO COMPLETE THIS FORM
THE PROVISIONS OF PARTS B AND C OF APPENDIX I TO THE OFFER DOCUMENT ARE
INCORPORATED INTO AND FORM PART OF THIS FORM
- ---------------------------------------------------------------------------
1 THE OFFER
To accept the Offer, insert in Box 1 the total number of Rolfe & Nolan
Shares for which you wish to accept the Offer. You must also sign Box
2 in accordance with the instructions set out herein and complete Box
3 and, if appropriate, Box 4, Box 5 and/or Box 6. If no number, or a
number greater than your entire holding of Rolfe & Nolan Shares, is
inserted in Box 1 and you have signed Box 2 you will be deemed to have
received the Offer Document and to have accepted the Offer in respect
of your entire holding of Rolfe & Nolan Shares (being your entire
holding under the name and address specified in Box 3 or, if your
Rolfe & Nolan Shares are in CREST, under the participant ID and member
account ID specified in Box 4). CREST participants are requested to
insert in Box 1 the same number of Rolfe & Nolan Shares as entered on
the related TTE instruction.
- ---------------------------------------------------------------------------
2 SIGNATURES
You must sign Box 2 and, in the case of a joint holding, arrange for
all joint holders to do likewise in order to acknowledge receipt of
the Offer Document and to accept the Offer. Each holder must sign in
the presence of a witness who must also sign Box 2. The witness must
be over 18 years of age and must not be one of the joint registered
holders (if any). The same witness may witness each signature of joint
holders. If the acknowledgement and the acceptance is not made by the
registered holder(s), insert the name(s) and capacity (e.g. executor)
of the person(s) making the acknowledgement and the acceptance. A
company may either execute under seal, the seal being affixed and
witnessed in accordance with its articles of association or other
regulations or, if applicable, in accordance with section 36A of the
Companies Act. A company incorporated outside Great Britain may
execute the Form in accordance with the laws of the territory in which
the relevant company is incorporated. Execution on behalf of a company
should be expressed to be by the company.
- ---------------------------------------------------------------------------
3 FULL NAME(S) AND ADDRESS(ES)
Complete Box 3 with the full name and address of the sole or first
named registered holder in BLOCK CAPITALS together with the full
name(s) and address(es) of any joint holder(s). Please also provide a
daytime telephone number where you may be contacted in the event of
any query on the Form of Acceptance you have completed. Unless you
complete Box 6, the address of the first registered holder inserted in
Box 3 will be the address to which the consideration will be sent. If
that address is in Canada, Japan or Australia, you must provide in Box
6, an alternative address outside Canada, Japan or Australia to which
such consideration will be sent.
- ---------------------------------------------------------------------------
4 PARTICIPANT ID AND MEMBER ACCOUNT ID
If your Rolfe & Nolan Shares are in CREST, you must insert in Box 4
the participant ID and the member account ID under which such shares
are held by you in CREST. You must also transfer (or procure the
transfer of) the Rolfe & Nolan Shares concerned to an escrow balance,
specifying in the TTE instruction the participant ID and member
account ID inserted in Box 4 and the Form of Acceptance Reference
Number of this Form and the other information specified in Section 13
of the letter from Broadview Associates contained in the Offer
Document. The Form of Acceptance Reference Number appears in Section 1
on page 3 of this Form.
- ---------------------------------------------------------------------------
5 OVERSEAS PERSONS
If you are unable to give the warranty in paragraph (b) of Part C of
Appendix I to the Offer Document YOU MUST PUT "YES" IN BOX 5. If you
do not put "YES" in Box 5 you will be deemed to have given such
warranty. Your attention is also drawn to Box 6.
- ---------------------------------------------------------------------------
6 ALTERNATIVE ADDRESS
Insert in Box 6 your own name and address (but not an address in
Canada, Japan or Australia) or the name and address of the person or
agent (for example, your bank, but not in Canada, Japan or Australia)
to whom you wish the consideration or returned documents to be sent if
not the same as in Box 3. If you leave Box 6 blank, the consideration
or returned documents will be sent to the address of the first-named
registered holder (unless such address is in Canada, Japan or
Australia).
- ---------------------------------------------------------------------------
<PAGE>
PAGE 3
PLEASE COMPLETE AS EXPLAINED ON PAGES 2 AND 4
The provisions of Parts B and C of Appendix I to the Offer Document are
incorporated into and form part of this Form.
To accept the Offer FOR
BOX 1 OFFICE USE
Complete Box 1, Box 3 and (if ONLY
relevant) Box 4,
Box 5 and/or Box 6 and sign Box 2 -------
below Holder
No.
No. of Rolfe & Nolan Shares
-------
Holding
-------
Cover
-------
THE FORM OF ACCEPTANCE NUMBER OF THIS FORM IS
Query
SIGN HERE TO ACKNOWLEDGE SAFE RECEIPT OF THEOFFER DOCUMENT AND TO ACCEPT THE
OFFER
BOX 2
Signed and Witnessed by:
delivered as a 1. Name: .............
deed by: Address:............... Signature ...........
1. ............... 2. Name: .............
2. ............... Address:............... Signature ...........
3. ............... 3. Name: .............
4. ............... Address:............... Signature ...........
4. Name: .............
Address:............... Signature ...........
NOTE: THE SIGNATURE
OF EACH REGISTERED
HOLDER WHO IS AN
INDIVIDUAL SHOULD
BE WITNESSED AND
THE WITNESS SHOULD
ALSO COMPLETE BOX 2
AS INDICATED.
- -------------------------------------------------------------------------------
FULL NAME(S) AND ADDRESS(ES)
BOX 3
First registered
holder
1. Mr., Mrs., 2. Mr., Mrs., 3. Mr., Mrs., 4. Mr., Mrs.,
Ms., or title: Ms., or title: Ms., or title: Ms., or title:
................. ................. ................. .................
Forename(s):..... Forename(s):..... Forename(s):..... Forename(s):.....
Surname:......... Surname:......... Surname:......... Surname:.........
Address:......... Address:......... Address:......... Address:.........
................. ................. ................. .................
................. ................. ................. .................
................. ................. ................. .................
Postcode:........ Postcode:........ Postcode:........ Postcode:........
In case of a query please state daytime telephone number
- -------------------------------------------------------------------------------
BOX 4
Participant ID and member account ID
Complete this Box only if your Participant ID........................
Rolfe & Nolan Shares are in CREST Member account ID ....................
- -------------------------------------------------------------------------------
Overseas persons, please put "YES" in Box 5 BOX 5
if you are unable to give the
representations and warranty relating to
overseas shareholders in paragraph (b) of
Part C of Appendix I to the Offer Document
- -------------------------------------------------------------------------------
Complete this box if you wish the consideration
and/or other document(s) to be sent to someone
at an address (but not an address in Canada,
Japan or Australia) other than the address of
the first named registered holder set out in Box BOX 6
3
Name:................................. For Stock
Address:.............................. Exchange/Registrar
Daytime telephone number...Postcode... use only
- -------------------------------------------------------------------------------
(To be completed in BLOCK CAPITALS)
<PAGE>
PAGE 4
ADDITIONAL NOTES REGARDING THE COMPLETION OF THIS FORM
In order to avoid inconvenience and delay, the following points may assist
you:
1. IF A HOLDER IS AWAY FROM HOME (E.G. ABROAD OR ON HOLIDAY):
Send this Form by the quickest means (e.g. air mail) to the holder for
execution (but not into Canada, Japan or Australia), or, if he has executed a
power of attorney, have this Form signed by the attorney. In the latter case
the power of attorney (or a copy thereof duly certified in accordance with the
Powers of Attorney Act 1971) should be lodged with this Form for noting. No
other signatures are acceptable.
2. IF YOU HAVE SOLD OR TRANSFERRED ALL, OR WISH TO SELL OR TRANSFER PART, OF
YOUR HOLDING OF ROLFE & NOLAN SHARES:
If you have sold or transferred all your holding of Rolfe & Nolan Shares, you
should at once send or hand this Form to the stockbroker, bank or other agent
through whom you made the sale or transfer for transmission to the purchaser.
However, such documents may not be forwarded or transmitted in, into or from
Canada, Japan or Australia. If your Rolfe & Nolan Shares are in certificated
form and you wish to sell or transfer part of your holding of Rolfe & Nolan
Shares and also wish to accept the Offer and are unable to obtain the balance
certificate, you should ensure that the stockbroker, bank or other agent
through whom you make the sale obtains the appropriate endorsement or
certification, signed on behalf of the registrars of Rolfe & Nolan, IRG plc,
in respect of the balance of your holding of Rolfe & Nolan Shares.
3. IF THE SOLE HOLDER HAS DIED:
If grant of probate or letters of administration has/have been registered with
the registrars of Rolfe & Nolan, IRG plc, this Form must be signed by the
personal representative(s) of the deceased holder, each in the presence of a
witness, and returned to IRG plc at the address given on page 1.
If grant of probate or letters of administration has/have not been registered
with the registrars of Rolfe & Nolan, IRG plc, the personal representative(s)
or prospective personal representative(s) should sign this Form and forward it
to IRG plc at the address given on page 1, with (if the shares are
certificated) the share certificate(s) and/or other document(s) of title.
However, a grant of probate or letters of administration must be lodged before
the consideration due under the Offer can be forwarded to the personal
representative(s).
4. IF ONE OF THE JOINT HOLDERS HAS DIED:
This Form is valid if signed by the surviving holder(s) (if the shares are
certificated) and lodged with the share certificate(s) and/or other
document(s) of title and the death certificate, grant of probate or letters of
administration of the deceased holder.
5. IF YOUR ROLFE & NOLAN SHARES ARE IN CERTIFICATED FORM AND THE SHARE
CERTIFICATE(S) IS/ARE HELD BY YOUR STOCKBROKER, BANK OR OTHER AGENT:
If your share certificate(s) and/or other document(s) of title is/are with
your stockbroker, bank or other agent, you should complete this Form and, if
the share certificate(s) and/or the document(s) of title is/are readily
available, arrange for it/them to be lodged by such agent with IRG plc at the
address given on page 1, accompanied by the share certificate(s) and/or other
document(s) of title.
6. IF YOUR ROLFE & NOLAN SHARES ARE IN CERTIFICATED FORM AND ANY SHARE
CERTIFICATE HAS BEEN LOST:
Complete and lodge this Form together with a letter of explanation and any
available certificate(s) with IRG plc at the address given on page 1. You
should then write to the registrars of Rolfe & Nolan, IRG plc, Registrar's
Department, Balfour House, 390-398 High Road, Essex IG1 1NQ, United Kingdom,
for a letter of indemnity which should be completed in accordance with the
instructions given. When completed, the letter of indemnity must be lodged
with IRG plc at the address given on page 1, in support of this Form.
7. IF YOUR ROLFE & NOLAN SHARES ARE IN CREST:
You should take the action set out in Section 13 of the letter from Broadview
Associates contained in the Offer Document to transfer your Rolfe & Nolan
Shares to an escrow balance. You are reminded to keep a record of the Form of
Acceptance Reference Number (which appears in Section 1 on page 3 of this
Form) so that such number can be inserted in the TTE instruction.
8. IF YOUR FULL NAME OR OTHER PARTICULARS DIFFER FROM THOSE APPEARING IN THE
CERTIFICATE, E.G.:
(a) Incorrect name, e.g.:
Name on the certif- James Smith
icate...............
Correct name........ James Smythe
Complete this Form with the correct name and lodge it, accompanied by a letter
from your bank, stockbroker or solicitor confirming that the person described
on the certificate and the person who signed this Form are one and the same.
(b) Incorrect address:
Write the correct address in Box 3 of this Form.
(c) Change of name:
Lodge your marriage certificate or the deed poll with this Form for noting.
9. IF YOU ARE NOT RESIDENT IN THE UK:
The attention of Rolfe & Nolan Shareholders not resident in the UK is drawn to
paragraph 7 of Part B and paragraph (b) of Part C of Appendix I to the Offer
Document.
WITHOUT PREJUDICE TO PARAGRAPH 5 OF PART B OF APPENDIX I TO THE OFFER
DOCUMENT, THE OFFEROR RESERVES THE RIGHT TO TREAT AS VALID ANY ACCEPTANCE OF
THE OFFER WHICH IS NOT ENTIRELY IN ORDER OR WHICH IS NOT ACCOMPANIED BY THE
RELEVANT TRANSFER TO ESCROW INSTRUCTION OR (AS APPROPRIATE) THE RELEVANT SHARE
CERTIFICATE(S) AND/OR OTHER DOCUMENT(S) OF TITLE. IN THAT EVENT, NO
CONSIDERATION DUE UNDER THE OFFER WILL BE SENT UNTIL AFTER THE RELEVANT
TRANSFER TO ESCROW INSTRUCTION HAS BEEN MADE OR (AS APPROPRIATE) THE RELEVANT
SHARE CERTIFICATE(S) AND/OR OTHER DOCUMENT(S) OF TITLE OR INDEMNITIES
SATISFACTORY TO THE OFFEROR HAVE BEEN RECEIVED.
