EXHIBIT 4
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (the "Agreement") is entered into as of
November 13, 2002, by and among SofTech, Inc., a Massachusetts corporation
("Parent"), SofTech Acquisition Corp., a Delaware corporation and a wholly-
owned subsidiary of Parent ("Merger Sub"), and certain stockholders of
Workgroup Technology Corporation, a Delaware corporation (the "Company")
whose names appear on Schedule I hereto (each, a "Signatory Stockholder"
and collectively, the "Signatory Stockholders").
W I T N E S S E T H:
--------------------
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Parent, Merger Sub and the Company are entering into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides for, upon the terms and subject to the
conditions set forth therein, (i) the commencement by Merger Sub of a
tender offer (the "Offer") for all of the issued and outstanding shares of
common stock, par value $0.01 per share, of the Company (the "Shares"), at
a price per share equal to the Offer Consideration (as defined in the
Merger Agreement), and (ii) the subsequent merger of Merger Sub with and
into the Company (the "Merger") (capitalized terms used herein without
definitions shall have the meanings ascribed to them in the Merger
Agreement);
WHEREAS, as of the date hereof, each Signatory Stockholder owns
(beneficially and of record) the number of Shares set forth opposite such
Signatory Stockholder's name on Schedule I hereto (all such shares so owned
and which may hereafter be acquired by such Signatory Stockholder prior to
the termination of this Agreement, whether upon the exercise of options or
by means of purchase, dividend, distribution or otherwise, being referred
to herein as such Signatory Stockholder's "Subject Shares");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Merger Sub have requested that the Signatory
Stockholders enter into this Agreement; and
WHEREAS, in order to induce Parent and Merger Sub to enter into the
Merger Agreement, the Signatory Stockholders are willing to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Merger Sub and the Signatory Stockholders hereby
agree as follows:
ARTICLE I.
TRANSFER AND VOTING OF SUBJECT SHARES;
OTHER COVENANTS OF THE STOCKHOLDERS
SECTION 1.1. Voting of Subject Shares. Each Signatory Stockholder
hereby agrees that for so long as this Agreement remains in effect (the
"Term"), at any meeting of the stockholders of the Company, however called,
and in any action by consent of the stockholders of the Company, each
Signatory Stockholder shall vote its Subject Shares (i) in favor of the
Merger and the Merger Agreement (as amended from time to time, provided
that no such amendment would have the effect of reducing the Offer
Consideration or the Merger Consideration or otherwise modify or amend the
Merger Agreement to reduce the rights or benefits of the Company or any of
the stockholders of the Company (including the Signatory Stockholders),
(ii) against any action or agreement that would result in a breach of any
covenant, representation or warranty or any other obligation or agreement
of the Company under the Merger Agreement, and (iii) except as otherwise
agreed to in writing in advance by Parent, against the following actions
(other than the Merger and the transactions contemplated by the Merger
Agreement): (A)(1) any change in the directors of the Company other than
contemplated by the Merger Agreement, (2) any change in the present
capitalization of the Company or any amendment to the Company's Certificate
of Incorporation or By-Laws, (3) any other material change in the Company's
corporate structure or business, or (4) any other action which in the case
of each of the matters referred to in clauses (A)(1), (2) or (3) could
reasonably be expected to impede, interfere with, delay, postpone or
materially adversely affect the transactions contemplated by the Merger
Agreement; (B) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company
("Extraordinary Transaction"); and (C) a sale, lease or transfer of a
material amount of assets of the Company, or a reorganization,
recapitalization, dissolution or liquidation of the Company.
SECTION 1.2. No Inconsistent Arrangements. Except as contemplated
by this Agreement and the Merger Agreement, each Signatory Stockholder
shall not during the Term (i) transfer (which term shall include, without
limitation, any sale, assignment, gift, pledge, hypothecation or other
disposition), or consent to any transfer of, any or all of such Signatory
Stockholder's Subject Shares or any interest therein, or create or permit
to exist any Encumbrance (as defined below) on such Subject Shares, (ii)
enter into any contract, option or other agreement or understanding with
respect to any transfer of any or all of such shares or any interest
therein, (iii) grant any proxy, power-of-attorney or other authorization in
or with respect to such Subject Shares, (iv) deposit such Subject Shares
into a voting trust or enter into a voting agreement or arrangement with
respect to such Subject Shares, or (v) take any other action that would in
any way restrict, limit or interfere with the performance of its
obligations hereunder or the transactions contemplated hereby or by the
Merger Agreement.
SECTION 1.3. Proxy. Each Signatory Stockholder hereby revokes any
and all prior proxies or powers of attorney in respect of any of such
Signatory Stockholder's Subject Shares and constitutes and appoints Parent,
or any nominee of Parent, with full power of substitution
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and resubstitution as its true and lawful attorney and proxy, for and in
its name, place and stead, to vote the Subject Shares of each such
Signatory Stockholder solely as and to the extent set forth in Section
1.1(i) through (iii); provided, however, that without limiting the
foregoing, in any such vote or other action pursuant to such proxy, Parent
shall not in any event have the right (and such proxy shall not confer the
right) to vote against the Merger, to vote to reduce the Offer
Consideration or the Merger Consideration or otherwise modify or amend the
Merger Agreement to reduce the rights or benefits of the Company or any
stockholders of the Company (including the Signatory Stockholders) under
the Offer or the Merger Agreement or to reduce the obligations of Parent
and/or Merger Sub thereunder; and provided, further, that the proxy granted
pursuant to this Section 1.3 shall cease and shall be of no further force
or effect upon (i) any material breach by Parent and/or Merger Sub of any
of their obligations under Section 1.01 of the Merger Agreement, (ii) any
material violation by Parent and/or Merger Sub of any of the terms of this
Agreement or (iii) the termination of the Merger Agreement or this
Agreement in accordance with their respective terms.
THE FOREGOING PROXY AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH
AN INTEREST THROUGHOUT THE TERM.
SECTION 1.4. Waiver of Appraisal Rights. Each Signatory Stockholder
hereby waives any rights of appraisal or rights to dissent from the Merger.
SECTION 1.5. Stop Transfer. Each Signatory Stockholder agrees not
to request that the Company register the transfer (book-entry or otherwise)
of any certificate or uncertificated interest representing any of such
Signatory Stockholder's Subject Shares, unless such transfer is made in
compliance with this Agreement.
SECTION 1.6. No Solicitation. During the Term, each Signatory
Stockholder shall not, nor shall it permit or authorize any of its
officers, directors, employees, agents or representatives (collectively,
the "Representatives") to, (i) solicit or initiate, or encourage, directly
or indirectly, any inquiries regarding or the submission of, any
Extraordinary Transaction, (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any information or data
with respect to, or take any other action to knowingly facilitate the
making of any proposal that constitutes, or may reasonably be expected to
lead to, any Extraordinary Transaction or (iii) enter into any agreement
with respect to any Extraordinary Transaction or approve or resolve to
approve any Extraordinary Transaction. Upon execution of this Agreement,
each Signatory Stockholder shall, and it shall cause its Representatives
to, immediately cease any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any of the foregoing.
Each Signatory Stockholder will promptly notify Parent of the existence of
any proposal, discussion, negotiation or inquiry received by such Signatory
Stockholder, and each Signatory Stockholder will immediately communicate to
Parent the terms of any proposal, discussion, negotiation or inquiry which
it may receive (and will promptly provide to Parent copies of any written
materials received by it in connection with such proposal, discussion,
negotiation or inquiry) and the identity of the Person making such proposal
or inquiry or engaging in such discussion or negotiation.
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ARTICLE II.
TENDER OF SHARES
SECTION 2.1. Tender. Each Signatory Stockholder hereby agrees to
validly tender (or cause the record owner of such shares to validly tender)
such Signatory Stockholder's Subject Shares pursuant to and in accordance
with the terms of the Offer, not later than the fifth (5th) business day
after commencement of the Offer pursuant to Section 1.01 of the Merger
Agreement and Rule 14d-2 under the Exchange Act, and not thereafter
withdraw such tender. Each Signatory Stockholder hereby acknowledges and
agrees that Merger Sub's obligation to accept for payment and pay for such
Signatory Stockholder's Subject Shares in the Offer is subject to the terms
and conditions of the Offer. Parent acknowledges and agrees that this
Agreement shall not be binding upon such Signatory Stockholder in the event
that the Merger Agreement shall be amended by the parties thereto to lower
or change the form of consideration constituting the Offer Consideration
(as defined in the Merger Agreement). For all its Subject Shares validly
tendered in the Offer and not withdrawn, each Signatory Stockholder will be
entitled to receive the highest price paid by Merger Sub pursuant to the
Offer. Upon the terms and subject to the conditions of the Offer, Parent
shall cause Merger Sub to accept for payment and pay for all shares of
Common Stock (including all of the Signatory Stockholders' Subject Shares)
validly tendered and not withdrawn pursuant to the Offer as soon as Merger
Sub is permitted to do so under applicable law.
SECTION 2.2. Certain Warranties. Without limiting the generality or
effect of any other term or condition of the Offer, upon full payment by
Parent or Merger Sub for the Subject Shares tendered, the transfer by a
Signatory Stockholder of such Signatory Stockholder's Subject Shares to
Merger Sub in the Offer shall pass to and unconditionally vest in Merger
Sub good and valid title to the Subject Shares, free and clear of all
Encumbrances whatsoever.
SECTION 2.3. Disclosure. Each Signatory Stockholder hereby
authorizes Parent and Merger Sub to publish and disclose in the Offer
Documents and, if approval of the Company's stockholders is required under
applicable law, the Proxy Statement (including all documents and schedules
filed with the SEC), its identity and ownership of the Shares and the
nature of its commitments, arrangements and understandings under this
Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Signatory Stockholder hereby represents and warrants to Parent
and Merger Sub as follows:
SECTION 3.1. Due Authorization, etc. Such Signatory Stockholder has
all requisite power and authority to execute, deliver and perform this
Agreement, to appoint Merger Sub and Parent as its Proxy and to consummate
the transactions contemplated hereby. The execution, delivery and
performance of this Agreement, the appointment of Merger Sub and Parent as
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Signatory Stockholder's Proxy and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on
the part of Signatory Stockholder. This Agreement has been duly executed
and delivered by or on behalf of such Signatory Stockholder and constitutes
a legal, valid and binding obligation of such Signatory Stockholder,
enforceable against such Signatory Stockholder in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws and except that the availability of
equitable remedies, including specific performance, is subject to the
discretion of the court before which any proceeding for such remedy may be
brought. There is no beneficiary or holder of a voting trust certificate or
other interest of any trust of which such Signatory Stockholder is trustee
whose consent is required for the execution and delivery of this Agreement
of the consummation by such Signatory Stockholder of the transactions
contemplated hereby.
SECTION 3.2. No Conflicts; Required Filings and Consents.
(a) The execution and delivery of this Agreement by such
Signatory Stockholder does not, and the performance of this Agreement
by such Signatory Stockholder will not, (i) conflict with or violate
any trust agreement or other similar documents relating to any trust
of which such Signatory Stockholder is trustee, (ii) conflict with or
violate any law applicable to such Signatory Stockholder or by which
such Signatory Stockholder or any of such Signatory Stockholder's
properties is bound or affected or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or give to others any rights
of termination, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any assets of such Signatory
Stockholder, including, without limitation, such Signatory
Stockholder's Subject Shares, pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which such Signatory Stockholder is
a party or by which such Signatory Stockholder or any of such
Signatory Stockholder's assets is bound or affected, except, in the
case of clauses (ii) and (iii), for any such breaches, defaults or
other occurrences that would not prevent or delay the performance by
such Signatory Stockholder of such Signatory Stockholder's
obligations under this Agreement.
(b) The execution and delivery of this Agreement by such
Signatory Stockholder does not, and the performance of this Agreement
by such Signatory Stockholder will not, require any consent,
approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority (other than any
necessary filing under the Exchange Act), domestic or foreign, except
where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, would not
prevent or delay the performance by such Signatory Stockholder of
such Signatory Stockholder's obligations under this Agreement.
SECTION 3.3. Title to Subject Shares. Such Signatory Stockholder is
the sole record and beneficial owner of its Subject Shares, free and clear
of any pledge, lien, security interest, mortgage, charge, claim, equity,
option, proxy, voting restriction, voting trust or agreement,
understanding, arrangement, right of first refusal, limitation on
disposition, adverse claim of ownership or use or encumbrance of any kind
("Encumbrances"), other than restrictions imposed by the securities laws or
pursuant to this Agreement and the Merger Agreement.
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SECTION 3.4. No Finder's Fees. No broker, investment banker,
financial advisor or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with
the transactions contemplated hereby based upon arrangements made by or on
behalf of such Signatory Stockholder. Such Signatory Stockholder, on
behalf of itself and its affiliates, hereby acknowledges that it is not
entitled to receive any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby or by the Merger Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERER SUB
Parent and Merger Sub hereby, jointly and severally, represent and
warrant to the Signatory Stockholders that each of Merger Sub and Parent
are duly organized, validly existing and in good standing under the laws of
their jurisdiction of incorporation. Merger Sub and Parent have all
requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by each of Merger Sub and Parent have been
duly authorized by all necessary corporate action on the part of Merger Sub
and Parent, respectively. This Agreement has been duly executed and
delivered by each of Merger Sub and Parent and constitutes a legal, valid
and binding obligation of each of Merger Sub and Parent, enforceable
against Merger Sub and Parent in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws and except that the availability of equitable remedies,
including specific performance, is subject to the discretion of the court
before which any proceeding for such remedy may be brought.
ARTICLE V.
MISCELLANEOUS
SECTION 5.1. Definitions. For purposes of this Agreement:
(a) "Common Stock" shall mean at any time the common stock,
$.01 par value, of the Company.
(b) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
SECTION 5.2. Termination. This Agreement shall terminate and be of
no further force and effect upon the earlier to occur of (i) the written
mutual consent of the parties hereto, (ii) the consummation of the Merger
or (iii) the termination of the Merger Agreement in accordance with its
terms. In addition, this Agreement may be terminated by the Signatory
Stockholders if Parent and/or Merger Sub shall have failed to comply in any
material respect with its obligations
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under Section 1.01 of the Merger Agreement. This Agreement shall also
terminate upon the issuance of a final, non-appealable decree, injunction
or order by a court or governmental entity which prevents the consummation
of the transactions contemplated hereby. No such termination of this
Agreement shall relieve any party hereto from any liability for any breach
of this Agreement prior to termination.
SECTION 5.3. Further Assurance. From time to time, at another
party's request and without consideration, each party hereto shall execute
and deliver such additional documents and
take all such further action as may be necessary or desirable to consummate
and make effective, in the most expeditious manner practicable, the
transaction contemplated by this Agreement.
SECTION 5.4. Certain Events. Each Signatory Stockholder agrees that
this Agreement and such Signatory Stockholder's obligations hereunder shall
attach to such Signatory Stockholder's Subject Shares and shall be binding
upon any person or entity to which legal or beneficial ownership of such
Subject Shares shall pass, whether by operation of law or otherwise,
including, without limitation, such Signatory Stockholder's heirs,
guardians, administrators, or successors. Notwithstanding any transfer of
Subject Shares, the transferor shall remain liable for the performance of
all its obligations under this Agreement.
SECTION 5.5. No Waiver. The failure of any party hereto to exercise
any right, power, or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, any
custom or practice of the parties at variance with the terms hereof shall
not constitute a waiver by such party of its right to exercise any such or
other right, power or remedy or to demand such compliance.
SECTION 5.6. Specific Performance. Each Signatory Stockholder
acknowledges that if such Signatory Stockholder fails to perform any of its
obligations under this Agreement immediate and irreparable harm or injury
would be caused to Parent and Merger Sub for which money damages would not
be an adequate remedy. In such event, each Signatory Stockholder agrees
that each of Parent and Merger Sub shall have the right, in addition to any
other rights it may have, to specific performance of this Agreement.
Accordingly, if Parent or Merger Sub should institute an action or
proceeding seeking specific enforcement of the provisions hereof, each
Signatory Stockholder hereby waives the claim or defense that Parent or
Merger Sub, as the case may be, has an adequate remedy at law and hereby
agrees not to assert in any such action or proceeding the claim or defense
that such a remedy at law exists. Each Signatory Stockholder further
agrees to waive any requirements for the securing or posting of any bond in
connection with obtaining any such equitable relief.
SECTION 5.7. Notice. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made (i) as of the date delivered or sent by facsimile if
delivered personally or by facsimile; provided that confirmation of such
delivery (electronic or otherwise) is obtained; (ii) on the first Business
Day after delivery by overnight courier; and (iii) on the third business
day after deposit in the U.S. mail, if mailed by registered or certified
mail (postage prepaid, return receipt requested), in each case to the
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parties at the following addresses (or at such other address for a party as
shall be specified by like notice, except that notices of changes of
address shall be effective upon receipt):
(a) If to Parent or Merger Sub:
SofTech, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: President and Chief Operating Officer
Facsimile:
With a copies to:
Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile: 617 342-4001
(b) If to a Signatory Stockholder, at the address set forth
below such Signatory Stockholder's name on Schedule I hereto.
SECTION 5.8. Expenses. Except as otherwise expressly set forth
herein, all fees, costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such fees, costs and expenses.
SECTION 5.9. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 5.10. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the maximum extent possible.
SECTION 5.11. Entire Agreement; No Third-Party Beneficiaries. This
Agreement constitutes the entire agreement and supersede any and all other
prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof, and
this Agreement is not intended to confer upon any other person any rights
or remedies hereunder.
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SECTION 5.12. Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
SECTION 5.13. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed entirely within
that State.
SECTION 5.14. Amendment. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto.
SECTION 5.15. Waiver. Any party hereto may (a) extend the time for
the performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and
warranties of the other parties hereto contained herein or in any document
delivered pursuant hereto and (c) waive compliance by the other parties
hereto with any of their agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver
shall be valid only as against such party and only if set forth in an
instrument in writing signed by such party. The failure of any party hereto
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
SECTION 5.16. Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which shall constitute one and the same agreement.
SECTION 5.17 Confidentiality. Each Signatory Stockholder agrees not
to disclose or discuss this Agreement, the Merger Agreement or any matter
that is the subject hereof or thereof, including the Merger and the Offer
(until public disclosure thereof) with anyone not a party to this Agreement
(other than such Signatory Stockholder's counsel and advisors, if any)
without the prior written consent of Parent, except for filings required
pursuant to the Exchange Act and the rules and regulations thereunder or
disclosures such Signatory Stockholder's counsel advises are necessary in
order to fulfill such Signatory Stockholder's obligations imposed by law or
legal process in connection with obtaining any requisite governmental
approvals, or in connection with obligations pursuant to any requirement of
any national securities exchange or national securities quotation system.
If any such filings or disclosures are required, such Signatory Stockholder
shall give notice thereof to Parent as promptly as practicable so as to
enable Parent to seek a protective order from a court of competent
jurisdiction if necessary with respect thereto.
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IN WITNESS WHEREOF, Parent, Merger Sub and the Stockholders have
caused this Agreement to be executed as of the date first written above.
SOFTECH, INC.
By: ___________________
Name:
Title:
SOFTECH ACQUISITION CORP.
By: ___________________
Name:
Title: President
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
XXXXXX X. XXXXXX -
FIDELITY TRADITIONAL XXX
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
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Schedule I
----------
Number of Shares
Name and Address of Signatory Stockholder Owned
----------------------------------------- ----------------
Xxxxxx X. Xxxxxx
0 Xxxxx Xxxxx
Xxxxxxx, XX 00000 466,551
Xxxxxx X. Xxxxxx -
Fidelity Traditional Xxx
0 Xxxxx Xxxxx
Xxxxxxx, XX 00000 20,700
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