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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 2)
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ENTERPRISE SOFTWARE, INC.
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(Name of Issuer)
Common Stock, par value $0.001 per share
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(Title of Class of Securities)
45337P10
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(CUSIP Number)
Wolf, Block, Schorr and Solis-Cohen LLP
111 South 15th Street
Philadelphia, PA 19102
Attention: Herbert Henryson II, Esquire
(215) 977-2556
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 12, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of
$$240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box [ ].<PAGE>
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This Statement aments the Schedule 13D, dated August
19, 1998 (the "Schedule 13D"), filed by Robert Lautz and the
other Filing Persons named therein relating to the Common Stock,
$.001 par value (the "Common Stock"), of Enterprise Software,
Inc. (formerly Indenet, Inc.), a Delaware corporation (the
"Company"). All capitalized terms used and not otherwise defined
herein have the meanings ascribed to them in the Schedule 13D.
Item 4. Purpose of Transaction.
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Item 4 is hereby amended to add the following:
On January 12, 1999, Robert Lautz and Cary S. Fitchey
sent a letter to the Board of Directors of the Company requesting
that the Board terminate Mr. Andre A. Blay's employment with the
Company as Chief Executive Officer, remove Mr. Blay as Chairman
of the Board and seek Mr. Blay's resignation as a director. A
copy of the letter is attached hereto as Exhibit 3 and is hereby
incorporated herein by reference.
Item 7. Material to Be Filed as Exhibits.
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Item 7 is hereby amended to add the following:
3. Letter to Board of Directors of the Company, dated
January 12, 1999.
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SIGNATURE
After reasonable inquiry and to the best of its
knowledge and belief, the undersigned certifies that the
information set forth in this Statement is true, complete and
correct.
Dated: January 15, 1999
ROBERT LAUTZ
By: /s/ Cary S. Fitchey
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Cary S. Fitchey,
Attorney in Fact
GRAEME JENNER
By: /s/ Cary S. Fitchey
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Cary S. Fitchey,
Attorney in Fact
PETER RHODES-DIMMER
By: /s/ Cary S. Fitchey
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Cary S. Fitchey,
Attorney in Fact
JUDITH K. THOME
By: /s/ Cary S. Fitchey
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Cary S. Fitchey,
Attorney in Fact
STEVEN MICHAEL ROSS
By: /s/ Cary S. Fitchey
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Cary S. Fitchey,
Attorney in Fact
WILLIAM D. KILLION
By: /s/ Cary S. Fitchey
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Cary S. Fitchey,
Attorney in Fact
WILLIAM KUNKEL
By: /s/ Cary S. Fitchey
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Cary S. Fitchey,
Attorney in Fact
CARY S. FITCHEY
/s/ Cary S. Fitchey
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EXHIBIT INDEX
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Exhibit No. Description
- ----------- -----------
3 Letter to Board of Directors of the
Company, dated January 12,1999.
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Exhibit 3
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January 12, 1999
Board of Directors
Enterprise Software, Inc.
38705 Seven Mile Road
Suite 435
Livonia, MI 48152-1056
Gentlemen:
The purpose of this letter is to express our outrage
with recent actions by the Company which appear to have been
calculated to benefit the Chairman and Chief Executive Officer at
the expense of the Company's shareholders. We believe that
excessive benefits to Mr. Blay, wholly inadequate disclosure to
shareholders and misguided acquisition and divestiture decisions
are primarily responsible for the severe under performance of the
Company's common stock. In view of the fact that Mr. Blay has
responsibility for all such actions, we urge the Board of
Directors to discharge Mr. Blay for cause under the terms of his
employment agreement with the Company and immediately remove him
as a director of the Company, cancel his SARs and deny him his
excessive severance package. We believe that unless such actions
are taken, Mr. Blay will continue to dominate and control the
actions of the Company and thereby deprive the Company's
shareholders of their right to receive the best value available
for their shares.
We have summarized below the principal reasons we
believe the Board should take the actions noted above:
1. Material Conflicts of Interest. A significant
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number of events have transpired which suggest that Mr. Blay has
made numerous decisions in his capacity as Chairman and Chief
Executive Officer which are primarily motivated by his own self-
interest rather than the best interests of the Company and its
shareholders.
At the Annual Meeting of Shareholders held on January
6, 1999, when asked to explain why the Board granted stock
appreciation rights in circumvention of the will of the Company's
shareholder expressed at the July 2, 1998 Special Meeting, Mr.
Blay answered with the glib statement, "Do you want us to sell
the Company?" Such a response clearly demonstrates that Mr. Blay
was willing to consider a sale of the Company only if he were
assured a significant personal benefit, at the expense of the
Company's shareholders, from such sale. In view of the fact that
the Company elected to spurn a $16 per share interest (post
split) from Big Flower Holdings, a credible buyer, in early 1998,
we must question whether that decision was prompted by Mr. Blay's
concern that he had not yet been awarded additional equity by the
Company. That conclusion is further bolstered by the decision of
the Company to engage Schroder & Co., Inc. at the same time that
it awarded Mr. Blay his SARs.
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The award of the SARs to Mr. Blay in clear violation of
the expressed will of the Company's shareholders is in all events
inexcusable. Later actions relating to the SARs further compound
the error. We have retained counsel to review the actions
relating to the award of the SARs to determine whether the
Company violated any Delaware corporate laws or Federal
securities laws in connection with such awards, especially given
that the Company has been anything but forthright in its
disclosure to stockholders regarding the awards. The effected
ignorance of Mr. Blay and the Company's attorney at the Annual
Meeting of Shareholders of such basic terms of the SARs as its
change of control provisions creates the inference that either
(i) the terms of the SARs had not yet been finalized and approved
by the Board of Directors despite being otherwise disclosed, (ii)
the directors had breached their duty of care under Delaware law
in awarding the SARs and/or (iii) Messrs. Blay and Birgbauer were
not being forthright with the shareholders. Any of the foregoing
is reason enough to terminate Mr. Blay's employment with the
Company for cause. Of course, the failure of Mr. Blay to justify
the award to him of twice as many SARs as options under his
employment agreement suggests further self interest. In
addition, although SEC rules may not require disclosure in the
Annual Meeting proxy statement of the terms of the SARs, it is
shocking under these circumstances that the Company would endorse
a statement to the effect that such disclosure will be made a
year or more later. Indeed, in view of the material amendment to
Mr. Blay's employment agreement effected by the award of the SARs
in lieu of the contingent options, we believe that disclosure of
the terms of the SARs is indeed mandated by the SEC disclosure
rules.
In addition to the foregoing, it was at the direction
of Mr. Blay that the corporate headquarters was moved to
Michigan, a move described by the last analyst to follow the
Company as follows: "it appears the basis for this decision is
that INDE's CEO lives there." Of course, the Company, and not
the CEO, must pay the additional overhead costs of maintaining
its headquarters in Michigan.
2. Disclosure Obligations. In his capacity as
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Chairman and Chief Executive Officer, Mr. Blay has responsibility
to ensure that the Company satisfies its disclosure obligations
under Federal law. Ever since Mr. Blay assumed the post of
Chairman of the Board, the disclosures relating to any matters in
which Mr. Blay has an interest have been meager or non-existent.
Mr. Blay's failure to file applicable forms under Section 16(a)
of the Exchange Act, particularly as they relate to purchases of
the Company's stock at the time that Big Flower Holdings was
seeking to negotiate an acquisition of the Company, have been
widely reported. His failure to file his employment agreement
with the SEC until two days prior to the Annual Meeting (and only
in response to letters from a 13D group of shareholders), and
even then to omit the SARs which materially amend the agreement,
is a clear violation of the SEC disclosure obligations. Indeed,
to this day, there is a gap in disclosure relating to Mr. Blay's
terms of employment from the date Mr. Blay was appointed Chief
Executive Officer until the date of his employment agreement
(which is dated as of February 6, 1998 but is likely to have been
drafted and agreed to long after that date). In addition, the
Company has never disclosed the reasons why Messrs. Kunkel and
Fitchey were removed from the Board of Directors, although we
suspect that it relates to their role on the Compensation
Committee and their attempt in that capacity to ensure
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the truth of the Company's April 1, 1997 press release which
stated that Mr. Blay's compensation plan was based primarily on
stock performance. Of course the compensation plan Mr. Blay
negotiated with himself provides him enormous benefits with no
performance hurdles. Further disclosure which would appear to be
required under SEC rules but has never been made available to
shareholders relates to the terms of the $15 million financing
completed in March 1998, and the related warrants and debenture.
One wonders whether any terms of those instruments serve Mr.
Blay's special interests.
3. Material Harm to the Company. At the time of Mr.
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Blay's appointment as Chairman, the Company was extremely well
positioned to be sold for a fair price that would have given
value to shareholders. Indeed, the terms of Mr. Blay's
engagement were negotiated with just such a sale as the basic
premise. In lieu of pursuing that direction, as noted above, Mr.
Blay turned down the opportunity to negotiate the sale of the
Company to a bona fide buyer while he purchased shares on the
open market, maneuvered to obtain equity grants from the Company
and agreed to a very rich golden parachute payment. In addition,
the acquisition of Revive Technologies, Inc. for a grossly
inflated purchase price with no fairness opinion, questionable
due diligence and extremely limited indemnifications, has served
to significantly decrease the value of the Company to any
potential third party. Accordingly, the value of the Company to
the shareholders has been materially diminished by dint of Mr.
Blay's self-serving actions and poor strategic decisions.
We would appreciate your prompt attention to this
letter and the actions requested herein.
Very truly yours,
By: /s/ Robert Lautz
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Robert Lautz
By: /s/ Cary Fitchey
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Cary Fitchey
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