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Exhibit (c)(4)
STOCKHOLDER AGREEMENT
AGREEMENT, dated September 1, 1999, among IFS Americas, Inc., a
Delaware corporation ("Parent"), IFS Acquisition, Inc., a Wisconsin corporation
and a wholly-owned subsidiary of Parent (the "Purchaser"), and Xxxxxx X. Xxxxxxx
(the "Stockholder").
WITNESSETH:
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent, the Purchaser and Effective Management Systems, Inc., a
Wisconsin corporation (the "Company"), have entered into an Agreement and Plan
of Merger (as such agreement may hereafter be amended from time to time, the
"Merger Agreement"), pursuant to which the Purchaser will be merged with and
into the Company (the "Merger"); and
WHEREAS, in furtherance of the Merger, Parent and the Company desire
that as soon as practicable (and not later than five business days) after the
announcement of the execution of the Merger Agreement, the Purchaser shall
commence a cash tender offer (the "Offer") to purchase at the Offer Price all
outstanding shares of Common Stock (each as defined in Section 1 hereof),
including all of the Securities (as defined in Section 2 hereof) beneficially
owned by the Stockholder; and
WHEREAS, as an inducement and a condition to entering into the Merger
Agreement, Parent has required that the Stockholder agree, and the Stockholder
has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Beneficially Owned" or "Beneficial Ownership" with
respect to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), including pursuant to any
agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person (as hereinafter defined) shall include securities
Beneficially Owned by all other Persons with whom such Person would constitute a
"group" within the meaning of Section 13(d)(3) of the Exchange Act.
(b) "Common Stock" shall mean the Common Stock, $.01 par value
per share, of the Company.
(c) "Offer Price" shall mean cash in the amount of $4.50 per
share of Common Stock or, if greater, the price per share paid by the Purchaser
in the Offer.
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(d) "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
(e) Capitalized terms used and not defined herein shall have
the respective meanings ascribed to them in the Merger Agreement.
2. Tender of Shares.
(a) In order to induce Parent and the Purchaser to enter into
the Merger Agreement, the Stockholder hereby agrees to validly tender (or cause
the record owner of such shares to validly tender), and not to withdraw,
pursuant to and in accordance with the terms of the Offer, not later than the
tenth business day after commencement of the Offer pursuant to Section 1.01 of
the Merger Agreement and Rule 14d-2 under the Exchange Act, the number of shares
of Common Stock set forth opposite the Stockholder's name on Schedule I hereto
(the "Existing Securities," and together with any shares of Common Stock
acquired by the Stockholder in any capacity after the date hereof and prior to
the termination of this Agreement by means of purchase, dividend, distribution,
exercise of options or other rights to acquire Common Stock or in any other way,
the "Securities"), all of which are Beneficially Owned by the Stockholder. The
Stockholder hereby acknowledges and agrees that Parent's and the Purchaser's
obligation to accept for payment and pay for the Securities in the Offer,
including the Securities Beneficially Owned by the Stockholder, is subject to
the terms and conditions of the Offer.
(b) The Stockholder hereby permits Parent and the Purchaser 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 Securities and the nature of its commitments, arrangements and
understandings under this Agreement; provided that the Stockholder shall have a
right to review and comment on such disclosure a reasonable time before it is
publicly disclosed.
3. Additional Agreements.
(a) No Inconsistent Arrangements. Except as necessary to
exercise Stockholder's fiduciary duties as a director of the Company with
respect to a Superior Proposal, the Stockholder hereby covenants and agrees
that, except as contemplated by this Agreement and the Merger Agreement, it
shall not (i) transfer (which term shall include, without limitation, any sale,
gift, pledge (other than a pledge which does not impair the Stockholder's
ability to perform under this Agreement) or other disposition), or consent to
any transfer of, any or all of the Securities or any interest therein, (ii)
enter into any contract, option or other agreement or understanding with respect
to any transfer of any or all of the Securities or any interest therein, (iii)
grant any proxy, power-of-attorney or other authorization in or with respect to
the Securities, (iv) deposit the Securities into a voting trust or enter into a
voting agreement or arrangement with respect to the Securities or (v) take any
other action that would in any way restrict, limit or interfere with the
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performance of its obligations hereunder or the transactions contemplated hereby
or by the Merger Agreement or the Stock Option Agreement.
(b) No Solicitation. The Stockholder hereby agrees, in the
capacity as a stockholder of the Company, that neither the Stockholder nor any
affiliates, representatives or agents shall (and, if the Stockholder is a
corporation, partnership, trust or other entity, the Stockholder shall cause its
officers, directors, partners, and employees, representatives and agents,
including, but not limited to, investment bankers, attorneys and accountants,
not to), directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent,
the Purchaser or any of their respective affiliates or representatives)
concerning any proposal relating to an Acquisition Transaction. The Stockholder
shall notify the Parent and the Purchaser no later than 24 hours after receipt
by the Stockholder (or its advisors), of any proposal with respect to an
Acquisition Transaction or any request for non-public information in connection
with a proposed Acquisition Transaction or for access to the properties, books
or records of the Company by any person or entity that informs the Company that
it is considering making, or has made, an Acquisition Transaction (as defined in
Section 6.07 of the Merger Agreement). Such notice to the Parent and Purchaser
shall be made orally and in writing and shall indicate in reasonable detail the
identity of the person making the Acquisition Proposal (as defined in Section
6.07 of the Merger Agreement) and the terms and conditions of such proposal,
inquiry or contact. Any action taken by the Company or any member of the Board
of Directors of the Company in accordance with Section 6.07 of the Merger
Agreement shall be deemed not to violate this Section 3(b).
(c) Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable Laws to consummate and
make effective the transactions contemplated by this Agreement. Each party shall
promptly consult with the other and provide any necessary information and
material with respect to all filings made by such party with any Governmental
Entity in connection with this Agreement and the transactions contemplated
hereby.
(d) Waiver of Appraisal Rights. The Stockholder hereby waives
any rights of appraisal or rights to dissent from the Merger that it may have.
4. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to Parent and the Purchaser as follows:
(a) Ownership of Securities. The Stockholder is the record and
Beneficial Owner of the Existing Securities, as set forth on Schedule I. On the
date hereof, the Existing Securities constitute all of the Securities owned of
record or Beneficially Owned by the Stockholder. Except as set forth on Schedule
I, the Stockholder has sole voting power and sole power to issue instructions
with respect to the matters set forth in Sections 2 and 3 hereof, sole power of
disposition, sole power to demand appraisal rights and sole power to agree to
all of the matters set forth in this Agreement,
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in each case with respect to all of the Existing Securities with no limitations,
qualifications or restrictions on such rights, subject to applicable securities
laws and the terms of this Agreement.
(b) Power; Binding Agreement. The Stockholder has the power
and authority to enter into and perform all of the Stockholder's obligations
under this Agreement. The execution, delivery and performance of this Agreement
by the Stockholder will not violate any other agreement to which the Stockholder
is a party including, without limitation, any voting agreement, proxy
arrangement, pledge agreement, stockholders agreement or voting trust. This
Agreement has been duly and validly executed and delivered by the Stockholder
and constitutes a valid and binding agreement of the Stockholder, enforceable
against the Stockholder in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and (ii) is subject to general principles of equity. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust of which the Stockholder is a trustee, or any party to any other agreement
or arrangement, whose consent is required for the execution and delivery of this
Agreement or the consummation by the Stockholder of the transactions
contemplated hereby.
(c) No Conflicts. Except for filings under the HSR Act, other
applicable Antitrust Laws and the Exchange Act (i) no filing with, and no
permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution and delivery of this Agreement by the Stockholder,
the consummation by the Stockholder of the transactions contemplated hereby and
the compliance by the Stockholder with the provisions hereof and (ii) none of
the execution and delivery of this Agreement by the Stockholder, the
consummation by the Stockholder of the transactions contemplated hereby or
compliance by the Stockholder with any of the provisions hereof, except in cases
in which any conflict, breach, default or violation described below would not
interfere with the ability of such Stockholder to perform such Stockholder's
obligations hereunder, shall (A) conflict with or result in any breach of any
organizational documents applicable to the Stockholder, (B) result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third party right of termination,
cancellation, modification or acceleration) under, any of the terms, conditions
or provisions of any note, loan agreement, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which the Stockholder is a party or by which the
Stockholder or any of its properties or assets may be bound, or (C) violate any
order, writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to the Stockholder or any of such Stockholder's properties or assets.
(d) No Liens. Except as permitted by this Agreement, the
Existing Securities and the certificates representing such securities are now,
and at all times during the term hereof will be, held by the Stockholder, or by
a nominee or custodian for the benefit of the Stockholder, free and clear of all
Liens, proxies, voting trusts or agreements, understandings or arrangements or
any other rights whatsoever, except for any such Liens or proxies arising
hereunder.
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(e) No Finder's Fees. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the
Stockholder.
(f) Reliance by Parent. The Stockholder understands and
acknowledges that Parent is entering into, and causing the Purchaser to enter
into, the Merger Agreement in reliance upon the Stockholder's execution and
delivery of this Agreement.
5. Representations and Warranties of Parent and the Purchaser. Each of
Parent and the Purchaser hereby represents and warrants to the Stockholder as
follows:
(a) Power; Binding Agreement. Parent and the Purchaser each
has the corporate power and authority to enter into and perform all of its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by each of Parent and the Purchaser will not violate any other
agreement to which either of them is a party. This Agreement has been duly and
validly executed and delivered by each of Parent and the Purchaser and
constitutes a valid and binding agreement of each of Parent and the Purchaser,
enforceable against each of Parent and the Purchaser in accordance with its
terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
(b) No Conflicts. Except for filings under the HSR Act, other
applicable Antitrust Laws and the Exchange Act, (i) no filing with, and no
permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution of this Agreement by each of Parent and the
Purchaser, the consummation by each of Parent and the Purchaser of the
transactions contemplated hereby and the compliance by Parent and the Purchaser
with the provisions hereof and (ii) none of the execution and delivery of this
Agreement by each of Parent and the Purchaser, the consummation by each of
Parent and the Purchaser of the transactions contemplated hereby or compliance
by each of Parent and the Purchaser with any of the provisions hereof, except in
cases in which any conflict, breach, default or violation described below would
not interfere with the ability of Parent or the Purchaser to perform their
respective obligations hereunder, shall (A) conflict with or result in any
breach of any organizational documents applicable to either of Parent or the
Purchaser, (B) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, modification or acceleration) under,
any of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind to which either of
Parent or the Purchaser is a party or by which either of Parent or the Purchaser
or any of their properties or assets may be bound, or (C) violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to either of Parent or the Purchaser or any of their properties or
assets.
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6. Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further lawful action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
7. Stop Transfer. The Stockholder shall not request that the Company
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Securities, unless such transfer
is made in compliance with this Agreement. In the event of a stock dividend or
distribution, or any change in the Common Stock by reason of any stock dividend,
split-up, recapitalization, combination, exchange of shares or the like, the
term "Securities" shall refer to and include the Securities as well as all such
stock dividends and distributions and any shares into which or for which any and
all of the Securities may be changed or exchanged.
8. Termination. The covenant and agreements contained herein with
respect to the Securities shall terminate upon the earlier of (a) the Effective
Time, (b) the first anniversary of the date hereof, or (c) the termination of
the Merger Agreement pursuant to (i) Section 8.01(a), (ii) Section 8.01(b),
(iii) Section 8.01(c), (iv) by the Company pursuant to Section 8.01(d) thereof
or (v) Section 8.01(e).
9. No Limitation. Nothing in this Agreement shall be construed to
prohibit the Stockholder who is a member of the Board of Directors of the
Company from exercising his fiduciary duties as a member of such Board of
Directors.
10. Miscellaneous.
(a) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
(b) Binding Agreement. This Agreement and the obligations
hereunder shall attach to the Securities and shall be binding upon any person or
entity to which legal or beneficial ownership of the Securities shall pass,
whether by operation of law or otherwise, including, without limitation, the
Stockholder's administrators or successors. Notwithstanding any transfer of
Securities, the transferor shall remain liable for the performance of all
obligations of the transferor under this Agreement.
(c) Assignment. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the
Stockholder or Parent and the Purchaser, as the case may be, provided that
Parent or the Purchaser may assign, in its respective sole discretion, its
rights and obligations hereunder to any direct or indirect subsidiary of Parent,
but no such assignment shall relieve Parent or the Purchaser of its obligations
hereunder if such assignee does not perform such obligations.
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(d) Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if given) by hand delivery or telecopy (with a
confirmation copy sent for next day delivery via courier service, such as
Federal Express), or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to the Stockholder:
Xxxxxx X. Xxxxxxx
c/o Effective Management Systems, Inc.
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Copy to:
Xxxxx & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Xxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Parent or the Purchaser:
IFS Americas, Inc.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Chief Executive Officer and
President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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Copy to:
Xxxxxxx Lang, XX
Xxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx, III, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision or portion
of any provision of this Agreement will 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 will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will 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. Notwithstanding anything to the contrary contained in this
Agreement, neither Parent nor the Purchaser shall be deemed to be the owner, nor
shall Parent or the Purchaser have the power to vote for the election of
directors, with respect to some or all of the Securities for purposes of the WBC
until the purchase of, and payment for, such Securities is actually consummated.
The rights of Parent and the Purchaser hereunder shall be limited as provided in
the preceding sentence.
(g) Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore in the event of any such breach the aggrieved party shall be entitled
to the remedy of specific performance of such covenants and agreements and
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any
rights, 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, and 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.
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(j) No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Wisconsin, without giving
effect to the principles of conflicts of law thereof.
(l) Waiver of Jury Trial. Each party hereto hereby waives any
right to a trial by jury in connection with any action, suit or proceeding
brought in connection with this Agreement.
(m) Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(n) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, Parent, the Purchaser and the Stockholder have
caused this Agreement to be duly executed as of the day and year first above
written.
IFS AMERICAS, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Its: President
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IFS ACQUISITION, INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Its: President
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STOCKHOLDER
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
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SCHEDULE I
NAME OF STOCKHOLDER NUMBER OF SHARES OF COMMON STOCK
BENEFICIALLY OWNED
Xxxxxx X. Xxxxxxx - 410,000 shares owned through the
Xxxxxx X. and Xxxxx X. Xxxxxxx
Trust. Xx. Xxxxxxx has sole voting
and dispositive power with respect
to the shares held by the Trust.
- 150,000 shares owned through the
Xxxxxxx Family Limited Partnership.
Xx. Xxxxxxx is the sole managing
partner of the Partnership. Xx.
Xxxxxxx and his wife, Xxxxx X.
Xxxxxxx, have voting and
dispositive power with respect to
the shares held by the Partnership.
