EXHIBIT 99.1
SHAREHOLDER AGREEMENT
This SHAREHOLDER AGREEMENT, dated as of April 16, 1998 (this
"Agreement"), is made and entered into by and among Sterling Commerce, Inc., a
Delaware corporation ("Parent"), Xxxxxx X. Xxxxxxxx ("Xx. Xxxxxxxx"), Xxxxxx
Xxxxxxxx ("Xx. Xxxxxxxx") and The Xxxxxxxx Investment Limited Partnership, a
Georgia limited partnership (each, a "Shareholder" and, collectively, the
"Shareholders").
RECITALS:
A. Parent, Sterling Commerce (Southern), Inc., a Delaware corporation
and wholly owned subsidiary of Parent ("Merger Sub"), and XcelleNet, Inc., a
Georgia corporation ("Company"), propose to enter into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), pursuant to which
Company will merge with and into Merger Sub (the "Merger") on the terms and
subject to the conditions set forth in the Merger Agreement. Except as otherwise
defined herein, terms used herein with initial capital letters have the
respective meanings ascribed thereto in the Merger Agreement.
B. As of the date hereof, each Shareholder beneficially owns the number
of shares of common stock, par value $0.01 per share, of Company ("Common
Stock") set forth opposite such Shareholder's name on Schedule A hereto (such
shares of Common Stock, together with any other shares of capital stock of
Company acquired by such Shareholder during the period from and including the
date hereof through and including the earlier of (i) the Effective Time and (ii)
the date and time on which the Merger Agreement is terminated pursuant to and in
accordance with Section 8.1 thereof, are collectively referred to herein as such
Shareholder's "Subject Shares"). Except for Xx. Xxxxxxxx, who has entered into
an agreement with Xx. Xxxxxxxx with respect to the shares of Common Stock owned
by her, each Shareholder is entitled to dispose of (or to direct the disposition
of) and to vote (or to direct the voting of) the number of shares of Common
Stock set forth opposite such Shareholder's name on Schedule A hereto.
C. Each Shareholder may be deemed an "affiliate" of Company within the
meaning of Rule 145 ("Rule 145") promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), by the Securities and Exchange Commission
(the "SEC").
D. As a condition and inducement to Parent's willingness to enter into
the Merger Agreement, Parent has requested that each Shareholder agree, and each
Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and covenants contained in this Agreement and the
Merger Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
VOTING AGREEMENT
Section 1.1 Agreement to Vote Shares. At any meeting of the
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shareholders of Company called to consider and vote upon the adoption of the
Merger Agreement (and at any and all postponements and adjournments thereof),
and in connection with any action to be taken in respect of the adoption of the
Merger Agreement by written consent of shareholders of Company, each Shareholder
shall vote or cause to be voted (including by written consent, if applicable)
all of such Shareholder's Subject Shares in favor of the adoption of the Merger
Agreement and in favor of any other matter necessary for the consummation of the
transactions contemplated by the Merger Agreement and considered and voted upon
at such meeting or made the subject of such written consent, as applicable. At
any meeting of the shareholders of Company called to consider and vote upon any
Adverse Proposal (and at any and all postponements and adjournments thereof),
and in connection with any action to be taken in respect of any Adverse Proposal
by written consent of shareholders of Company, each Shareholder shall vote or
cause to be voted (including by written consent, if applicable) all of such
Shareholder's Subject Shares against such Adverse Proposal. For purposes of this
Agreement, the term "Adverse Proposal" means any (a) extraordinary corporate
transaction, including without limitation a merger, consolidation or other
business combination involving Company or any of its Subsidiaries, (b) sale,
lease or transfer of a material amount of assets of Company or any of its
Subsidiaries, (c) reorganization, recapitalization, dissolution or liquidation
of Company or any of its Subsidiaries, (d) change in a majority of the Board of
Directors of Company, (e) material change in the present capitalization of
Company or any amendment of Company's certificate of incorporation or bylaws, or
(f) other material change in Company's corporate structure or business;
provided, however, that neither the Merger nor any other transaction
contemplated by the Merger Agreement to be consummated by Company or Parent in
connection with the Merger shall constitute an Adverse Proposal. The
Shareholders' obligation to vote or cause to be voted the Subject Shares shall
be fully satisfied by the grant of the irrevocable proxy pursuant to Section 1.2
hereof, unless such Section shall have been judicially determined to be invalid
and unenforceable.
Section 1.2 Irrevocable Proxy.
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(a) Grant of Proxy. EACH SHAREHOLDER HEREBY APPOINTS PARENT
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AND ANY DESIGNEE OF PARENT, EACH OF THEM INDIVIDUALLY, SUCH SHAREHOLDER'S PROXY
AND ATTORNEY-IN-FACT PURSUANT TO THE PROVISIONS OF SECTION 14-2-722 OF THE
GEORGIA BUSINESS CORPORATION CODE, WITH FULL POWER OF SUBSTITUTION AND
RESUBSTITUTION, TO VOTE OR ACT BY WRITTEN CONSENT WITH RESPECT TO SUCH
SHAREHOLDER'S SUBJECT SHARES SOLELY ON THE MERGER AGREEMENT OR ANY ADVERSE
PROPOSAL IN ACCORDANCE WITH SECTION 1.1 HEREOF. THIS PROXY IS GIVEN TO SECURE
THE PERFORMANCE OF THE DUTIES OF SUCH SHAREHOLDER UNDER THIS AGREEMENT. EACH
SHAREHOLDER AFFIRMS THAT THIS PROXY IS COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE. EACH SHAREHOLDER SHALL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH
OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY.
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(b) Other Proxies Revoked. Each Shareholder represents that
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any proxies heretofore given in respect of such Shareholder's Subject Shares are
not irrevocable, and that all such proxies are hereby revoked.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Certain Representations and Warranties of the
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Shareholders. Each Shareholder, jointly and severally, represents and warrants
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to Parent as follows:
(a) Ownership. Except as specified on Schedule 2.1(a), such
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Shareholder is the sole record and beneficial owner of the number of shares of
Common Stock set forth opposite such Shareholder's name on Schedule A hereto and
has full and unrestricted power to dispose of and to vote such shares of Common
Stock, except for Xx. Xxxxxxxx who has entered an agreement with Xx. Xxxxxxxx
with respect to the common stock owned by her. Such Shareholder does not own any
securities of Company on the date hereof other than the shares of Common Stock
set forth on Schedule A.
(b) Due Authorization. Such Shareholder has all requisite
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power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by such Shareholder and the consummation by such Shareholder of the transactions
contemplated hereby have been duly authorized by all necessary action, if any,
on the part of such Shareholder. This Agreement has been duly executed and
delivered by such Shareholder and constitutes a valid and binding obligation of
such Shareholder, enforceable against such Shareholder in accordance with its
terms.
(c) No Conflicts. The execution and delivery of this Agreement
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do not, and compliance with the provisions hereof will not, conflict with,
result in a breach or violation of or default (with or without notice or lapse
of time or both) under, or give rise to a material obligation, a right of
termination, cancellation, or acceleration of any obligation or a loss of a
material benefit under, or require notice to or the consent of any person under
any agreement, instrument, undertaking, law, rule, regulation, judgment, order,
injunction, decree, determination or award binding on such Shareholder, other
than any such conflicts, breaches, violations, defaults, obligations, rights or
losses that individually or in the aggregate would not impair the ability of
such Shareholder to perform such Shareholder's obligations under this Agreement.
Section 2.2 Representations and Warranties of Parent. Parent hereby
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represents and warrants to each Shareholder that:
(a) Due Authorization. Parent has all requisite corporate
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power and authority to enter into this Agreement and the Merger Agreement and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Merger Agreement by Parent and the
consummation by Parent of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of Parent.
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This Agreement and the Merger Agreement have been duly executed and delivered by
Parent and constitute valid and binding obligations of Parent, enforceable
against Parent in accordance with their terms.
(b) No Conflicts. The execution and delivery of this Agreement
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and the Merger Agreement do not, and, the consummation of the transactions
contemplated hereby and thereby and compliance with the provisions thereof will
not, conflict with, result in a breach or violation of or default (with or
without notice or lapse of time or both) under, or give rise to a material
obligation, right of termination, cancellation, or acceleration of any
obligation or a loss of a material benefit under, or require notice to or the
consent of any person under any agreement, instrument, undertaking, law, rule,
regulation, judgment, order, injunction, decree, determination or award binding
on Parent, other than any such conflicts, breaches, violations, defaults,
obligations, rights or losses that individually or in the aggregate would not
(i) impair the ability of Parent to perform its obligations under this Agreement
or the Merger Agreement or (ii) prevent or delay the consummation of any of the
transactions contemplated hereby and thereby.
ARTICLE III
CERTAIN COVENANTS
Section 3.1 Certain Covenants of Shareholders.
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(a) Restriction on Transfer of Subject Shares, Proxies and
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Noninterference. No Shareholder shall directly or indirectly: (i) except
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pursuant to the terms of this Agreement or the Merger Agreement, offer for sale,
sell, transfer, tender, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of such
Shareholder's Subject Shares; (ii) except pursuant to the terms of this
Agreement, grant any proxies or powers of attorney, deposit any of such
Shareholder's Subject Shares into a voting trust or enter into a voting
agreement with respect to any of such Shareholder's Subject Shares; or (iii)
take any action that would make any representation or warranty contained herein
untrue or incorrect or have the effect of impairing the ability of such
Shareholder to perform such Shareholder's obligations under this Agreement.
(b) Restrictions on Transfer of Parent Common Stock. Following
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the Effective Time and subject to the provisions of Section 3.1(c), no
Shareholder shall sell, assign or otherwise dispose of any of the shares of
Parent Common Stock received by such Shareholder pursuant to the Merger, as the
case may be, except (i) pursuant to an effective registration statement under
the Securities Act, (ii) in conformity with the provisions of SEC Rule 144 or
SEC Rule 145, as applicable, or (iii) in a transaction which, in the opinion of
counsel reasonably satisfactory to Parent, is not required to be registered
under the Securities Act. Each Shareholder understands and acknowledges that
Parent shall not be required to file or maintain the effectiveness of any
registration statement under the Securities Act for the purpose of facilitating
the resale of any Parent Common Stock by such Shareholder. In the event of a
sale, assignment or other disposition by any Shareholder of Parent Common Stock
pursuant to SEC Rule 145,
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such Shareholder shall supply Parent with evidence of compliance with such Rule
as reasonably requested by Parent. Each Shareholder understands and acknowledges
that Parent may instruct its transfer agent to withhold the transfer of any
Parent Common Stock disposed of by any Shareholder, but that (provided such
transfer is not prohibited by any other provision of this Agreement) upon
receipt of such evidence of compliance, Parent shall cause the transfer agent to
effectuate the transfer of the Parent Common Stock sold as promptly as
practicable.
(c) Restrictions on Sale of Parent Company Stock.
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Notwithstanding anything contained in this Agreement to the contrary, prior to
the second anniversary of the Effective Time, the Shareholders shall not, in the
aggregate, sell, assign, transfer, pledge, encumber or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, transfer, pledge, encumbrance,
assignment or other disposition of such number of shares of Parent Common Stock
representing more than 35% of the Merger Consideration received by the
Shareholders pursuant to the Merger. To determine the number of shares of Parent
Common Stock subject to restriction pursuant to this Section 3.1(c), the parties
(i) multiply the number of shares of Parent Common Stock received by the
Shareholders as part of the Merger Consideration by the closing sales price of
the Parent Common Stock on the day on which the Effective Time occurs, (ii) add
the aggregate Cash Payment received by the Shareholders as part of the Merger
Consideration, and (iii) divide the sum of the amounts determined in clauses (i)
and (ii) by the closing sales price of the Parent Common Stock on the date on
which the Effective Time occurs.
(d) Tax Treatment. No Shareholder shall or shall permit any
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Shareholder Entity to take any position on any federal, state or local income
tax return, or take any other action or reporting position, that is inconsistent
with the treatment of the Merger as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), or
with the representations made in this Agreement, unless otherwise required
pursuant to a "determination" (as defined in Section 1313(a)(1) of the Code).
ARTICLE IV
MISCELLANEOUS
Section 4.1 Fees and Expenses. Each party hereto shall pay its own
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expenses incident to preparing for, entering into and carrying out this
Agreement and the consummation of the transactions contemplated hereby.
Section 4.2 Amendment. This Agreement may not be amended except by an
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instrument in writing signed on behalf of each of the parties hereto.
Section 4.3 Extension; Waiver. Any agreement on the part of a party to
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waive any provision of this Agreement, or to extend the time for any performance
hereunder, shall be valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of such rights.
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Section 4.4 Legend. Each Shareholder acknowledges and agrees that the
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legend set forth below shall be placed on certificates representing shares of
Parent Common Stock received by such Shareholder in connection with the Merger,
or held by a transferee of such Shareholder, which legend shall be removed by
delivery of substitute certificates upon the second anniversary of the Effective
Time, or upon (a) the earlier sale of such shares of Parent Common Stock (i)
pursuant to an effective registration statement under the Securities Act or (ii)
in conformity with the provisions of SEC Rule 144 or SEC Rule 145, as
applicable, or (b) the receipt by Parent of an opinion in form and substance
reasonably satisfactory to Parent from independent counsel reasonably
satisfactory to Parent to the effect that such legend is no longer required for
purposes of the Securities Act.
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES. THE SHARES MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OF 1933 OR AN EXEMPTION THEREFROM AND AS OTHERWISE
PERMITTED UNDER THE SHAREHOLDERS AGREEMENT, DATED APRIL 16, 1998. THE
FOREGOING RESTRICTIONS ON TRANSFER ARE SET FORTH IN A SHAREHOLDER
AGREEMENT, DATED APRIL 16, 1998, A COPY OF WHICH MAY BE OBTAINED FROM
THE GENERAL COUNSEL OF STERLING COMMERCE, INC."
Section 4.5 Entire Agreement; No Third-Party Beneficiaries. This
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Agreement constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement, and is not intended to confer upon any person
other than the parties any rights or remedies.
Section 4.6 Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of Georgia, regardless of
the laws that might otherwise govern under applicable principles of conflict of
laws thereof.
Section 4.7 Notices. All notices, requests, claims, demands and other
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communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, or sent by overnight courier (providing proof of
delivery), in the case of the Shareholders, to the address set forth on Schedule
A hereto or, in the case of Parent, to the address set forth below (or, in each
case, at such other address as shall be specified by like notice).
Sterling Commerce, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attention: General Counsel
Telecopy: 000-000-0000
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with a copy (which shall not constitute notice) to:
Xxxxx, Day, Xxxxxx & Xxxxx
2300 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. X'Xxxxxx
Telecopy: (000) 000-0000
Section 4.8 Assignment. Neither this Agreement nor any of the rights,
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interests, or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise, by any party hereto without
the prior written consent of all other parties, and any such assignment or
delegation that is not consented to shall be null and void. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
Section 4.9 Enforcement. Irreparable damage would occur in the event
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that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. Accordingly, the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in the Superior Court in and for Xxxxxx County in the State of Georgia (or, if
such court lacks subject matter jurisdiction, any appropriate state or federal
court in Xxxxxx County in the State of Georgia) this being in addition to any
other remedy to which they are entitled at law or in equity. Each of the parties
hereto (i) shall submit itself to the personal jurisdiction of the Superior
Court in and for Xxxxxx County in the State of Georgia (or, if such court lacks
subject matter jurisdiction, any appropriate state or federal court in Xxxxxx
County in the State of Georgia) in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) shall not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court, and (iii) shall not bring any action relating to this
Agreement or any of the transactions contemplated hereby in any court other than
the Superior Court in and for Xxxxxx County in the State of Georgia (or, if such
court lacks subject matter jurisdiction any appropriate state or federal court
in Xxxxxx County in the State of Georgia).
Section 4.10 Severability. Whenever possible, each provision or portion
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of any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
Section 4.11 Term. This Agreement shall terminate upon the earlier of
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(i) the termination of the Merger Agreement pursuant to the terms thereof or
(ii) the Effective Time
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(except with respect to Articles II and IV and Sections 3.1(b), (c), (d), hereof
which shall survive the Effective Time).
Section 4.12 Counterparts. This Agreement may be executed in one or
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more counterparts, all of which shall be considered one and the same instrument
and shall become effective when one or more counterparts have been signed by
each party and delivered to the other parties.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed as of the day and year first written above.
STERLING COMMERCE, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Executive Vice President
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SHAREHOLDERS:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, individually and as
trustee and custodian
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
THE XXXXXXXX INVESTMENT LIMITED
PARTNERSHIP
By: Xxxxxxxx Investment Management
Co., LLC, its sole general partner
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Controlling
Manager
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SCHEDULE A
Number of Shares
Name and Address of Shareholder of Common Stock
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Xxxxxx X. Xxxxxxxx 80,231
00 Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax 000-000-0000
Xxxxxx Xxxxxxxx 104,800
00 Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax 000-000-0000
Xxxxxx X. Xxxxxxxx, as trustee for Xxxxxx Xxxxxxxx 3,800
00 Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax 000-000-0000
Xxxxxx X. Xxxxxxxx, as custodian for Caitlin and Xxxxxxx Xxxxxxxx 3,000
00 Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax 000-000-0000
The Xxxxxxxx Investment Limited Partnership 1,200,000
00 Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax 000-000-0000
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