As filed with the Securities and Exchange Commission on November 12, 2002
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_____________________________
FISERV, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 7374 39-1506125
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Identification No.)
Code Number)
255 Fiserv Drive
Brookfield, Wisconsin 53045
(262) 879-5000 (Address,
including zip code, and telephone number,
including area code, of registrant's principal executive offices)
____________________
Kenneth R. Jensen
Senior Executive Vice President
Fiserv, Inc.
255 Fiserv Drive
Brookfield, Wisconsin 53045
(262) 879-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
____________________
Copies to:
Charles W. Sprague, Esq. Benjamin F. Garmer, III
Fiserv, Inc. Foley & Lardner
255 Fiserv Drive 777 East Wisconsin Avenue
Brookfield, Wisconsin 53045 Milwaukee, Wisconsin 53202-5367
(262) 879-5000 (414) 271-2400
Lance M. Hardenburg
Hallett & Perrin, P.C.
2001 Bryan Street
Dallas, Texas 75201
(214) 953-0053
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective and all
other conditions to the merger described herein have been satisfied or waived.
If the securities being registered on this Form are 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, check the following box and
list the Securities Act 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, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
======================================== ======================== ======================== ======================== ================
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities Amount to Offering Price Per Aggregate Offering Registration
to be Registered be Registered Share Price Fee
- ---------------------------------------- ------------------------ ------------------------ ------------------------ ----------------
Common Stock, $.01 par value (1) N/A (2) N/A (2) $9,882,851.16(3) $909.23
======================================== ======================== ======================== ======================== ================
(1) Each share of Fiserv, Inc. Common Stock has attached thereto one Preferred Stock Purchase Right.
(2) Pursuant to Rule 457(o) under the Securities Act of 1933, this information is not included.
(3) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933.
Pursuant to Rule 457(f)(1), the proposed maximum aggregate offering price was calculated in accordance with Rule 457(c) under
the Securities Act of 1933 as: (a) $2.73, the average of the high and low prices per share of the common stock of AVIDYN, Inc.
on November 7, 2002 as reported on the Nasdaq SmallCap Market, multiplied by (b) 3,620,092, the aggregate number of shares of
the common stock of AVIDYN, Inc. outstanding as of November 7, 2002.
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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THE INFORMATION IN THIS PROXY STATEMENT/PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THE SECURITIES BEING OFFERED BY THIS PROXY STATEMENT/PROSPECTUS MAY NOT
BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, OF WHICH THIS PROXY STATEMENT/PROSPECTUS IS A PART, IS DECLARED
EFFECTIVE. THIS PROXY STATEMENT/PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THE SECURITIES IN ANY STATE.
[AVIDYN Logo]
, 2002
Dear AVIDYN, Inc. Stockholder:
AVIDYN, Inc. has agreed to be acquired by Fiserv, Inc. through the
merger of AVIDYN and a subsidiary of Fiserv under the terms of an agreement and
plan of merger with Fiserv. Before Fiserv can acquire AVIDYN, AVIDYN must obtain
the requisite approval of its stockholders. AVIDYN will hold a special meeting
of its stockholders on , 2003, at 9:30 a.m., Central Time, at AVIDYN's
corporate offices at 16980 Dallas Parkway, Suite 120, Dallas, Texas 75248,
during which you will be asked to vote on the merger.
In the merger, you will receive shares of Fiserv common stock for your
shares of AVIDYN common stock. Fiserv's common stock is traded on the Nasdaq
National Market under the symbol FISV. The exact number of shares that you will
receive will be determined based on a formula set forth in the merger agreement,
which includes an adjustment based upon the net assets of AVIDYN at the
effective time of the merger as agreed upon by the parties. The merger agreement
formula provides that, in exchange for each of your outstanding shares of AVIDYN
common stock, you will receive a fraction of a share of Fiserv common stock
equal to:
o $10.5 million, divided by
o the number of shares of AVIDYN common stock outstanding
immediately before the effective time of the merger, divided by
o the average closing price for Fiserv common stock for the twenty
business days ending two business days prior to the effective time
of the merger;
provided that the $10.5 million amount used in the above calculation will be
increased or decreased by the difference between (1) the total assets of AVIDYN
less the total liabilities of AVIDYN at the effective time of the merger, and
(2) $6.8 million, unless the difference is less than $25,000, in which case no
adjustment to the $10.5 million amount will be made.
Based on the average closing price for Fiserv common stock of $
for the twenty business days ending two business days prior to the date of the
proxy statement/prospectus accompanying this letter and the 3,620,092 shares of
AVIDYN common stock outstanding on the record date, you would receive
shares of Fiserv common stock for each share of your AVIDYN common stock in the
merger. This estimate assumes no adjustment based upon the net assets of AVIDYN
and is intended only to illustrate the calculation of the merger consideration.
This per share number is not likely to be the actual number of shares of Fiserv
common stock you will receive in the merger for each share of your AVIDYN common
stock because the actual number of shares of Fiserv common stock issuable in the
merger will be a function of the closing sale price for Fiserv common stock for
the twenty business days ending two business days prior to the effective time of
the merger and AVIDYN's net assets at the effective time of the merger.
The actual number of shares of Fiserv common stock issuable in the
merger will not be determined until after the close of business on the second
business day before the special meeting of AVIDYN stockholders. Fiserv and
AVIDYN expect to notify AVIDYN stockholders of the number of shares of Fiserv
common stock that will be received for shares of AVIDYN common stock pursuant to
the formula above before the date of the AVIDYN special meeting by issuing a
press release and filing it with the Securities and Exchange Commission.
The proxy statement/prospectus accompanying this letter provides you
with detailed information about the proposed merger. It also contains
information about AVIDYN and Fiserv that has been filed with the Securities and
Exchange Commission. You are encouraged to read carefully this proxy
statement/prospectus and the documents incorporated by reference in this proxy
statement/prospectus. You should also consider the matters discussed under "Risk
Factors" on page 16 of the accompanying proxy statement/prospectus before
voting.
AFTER CAREFUL CONSIDERATION, THE AVIDYN BOARD OF DIRECTORS UNANIMOUSLY
DETERMINED THAT THE TERMS OF THE MERGER AGREEMENT AND THE MERGER ARE ADVISABLE
AND FAIR TO, AND IN THE BEST INTERESTS OF, AVIDYN AND ITS STOCKHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" ADOPTION OF THE MERGER AGREEMENT AND
APPROVAL OF THE MERGER.
YOUR VOTE IS VERY IMPORTANT, regardless of the number of shares you
own. Holders of a majority of the outstanding shares of AVIDYN common stock must
vote to adopt the merger agreement and approve the merger for the merger to
proceed. Only holders of AVIDYN common stock at the close of business on ,
2002 will be entitled to vote at the special meeting.
Please vote your shares as soon as possible so that your shares are
represented at the special meeting. To vote your shares, please complete, sign
and date the enclosed proxy card and promptly return it in the enclosed
postage-paid envelope.
Very truly yours,
------------------------------
John Ward Hunt
Chairman of the Board
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated , 2002, and is first
being mailed to AVIDYN stockholders on or about , 2002.
NOTICE OF SPECIAL MEETING OF
AVIDYN, INC. STOCKHOLDERS
TO BE HELD ON , 2003
______________________________
AVIDYN, Inc. will hold a special meeting of its stockholders on ,
2003, at 9:30 a.m., Central Time, at AVIDYN's corporate office at 16980 Dallas
Parkway, Suite 120, Dallas, Texas 75248, for the following purposes:
1. To consider and vote on a proposal to adopt the Agreement and Plan
of Merger, dated as of November 2, 2002, by and among Fiserv,
Inc., Fiserv Merger Sub, Inc., a wholly owned subsidiary of
Fiserv, and AVIDYN, Inc., and to approve the merger contemplated
by that agreement; and
2. To transact any other business as may properly come before the
special meeting and any adjournment or postponement of the special
meeting.
Only holders of record of AVIDYN common stock at the close of business
on , 2002, are entitled to receive this notice and to vote their shares at the
special meeting or any adjournments or postponements of the special meeting.
Each share of AVIDYN common stock is entitled to one vote on each matter
properly brought before the special meeting. A list of record holders will be
available for examination by any AVIDYN stockholder, for any purpose related to
the special meeting, at the offices of AVIDYN in Dallas, Texas during normal
business hours for a period of ten days prior to the date of the special
meeting.
Please vote your shares as soon as possible so that your shares are
represented at the special meeting. To vote your shares, please complete, sign
and date the enclosed proxy card and promptly return it in the enclosed
postage-paid envelope. If you attend the special meeting, you may vote in person
if you wish by completing a ballot at the special meeting, regardless of whether
you have already signed, dated and returned your proxy card.
AFTER CAREFUL CONSIDERATION, THE AVIDYN BOARD OF DIRECTORS HAS
UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE MERGER AND UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" ADOPTION OF THE MERGER AGREEMENT AND APPROVAL OF
THE MERGER.
Please review the proxy statement/prospectus accompanying this notice
for more complete information regarding the merger agreement, the merger and
related matters. A copy of the merger agreement is attached as Annex A to the
accompanying proxy statement/prospectus.
By the Order of the Board of Directors,
---------------------------------------
John Ward Hunt
Chairman of the Board
, 2002
PLEASE VOTE YOUR SHARES PROMPTLY.
YOU CAN FIND INSTRUCTIONS FOR VOTING ON THE ENCLOSED PROXY CARD.
REFERENCE TO ADDITIONAL INFORMATION
This document incorporates important business and financial information
about AVIDYN and Fiserv from documents that are not included in or delivered
with this document. This information is available to you without charge upon
your written or oral request. You can obtain documents related to AVIDYN and
Fiserv that are incorporated by reference in this document, without charge, by
requesting them in writing or by telephone from the appropriate company:
Fiserv, Inc. AVIDYN, Inc.
255 Fiserv Drive 16980 Dallas Parkway, Suite 120
Brookfield, Wisconsin 53045 Dallas, Texas 75248
(262) 879-5000 (972) 447-6447
Attention: Charles W. Sprague, Attention: Stephanie L. McVay,
Secretary Secretary
IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY , 2002,
TO RECEIVE THEM BEFORE THE AVIDYN SPECIAL MEETING.
See "Where You Can Find More Information" on page 60.
TABLE OF CONTENTS
Page
QUESTIONS AND ANSWERS ABOUT THE MERGER.....................................1
SUMMARY ...................................................................5
SELECTED FISERV HISTORICAL CONSOLIDATED FINANCIAL DATA....................11
SELECTED AVIDYN HISTORICAL CONSOLIDATED FINANCIAL DATA....................12
UNAUDITED COMPARATIVE PER SHARE DATA......................................13
MARKET PRICE INFORMATION..................................................14
RISK FACTORS..............................................................16
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS.................18
THE SPECIAL MEETING.......................................................19
Time and Place...................................................19
Purpose of the Special Meeting...................................19
Recommendation of the AVIDYN Board of Directors..................19
Record Date; Stock Entitled to Vote..............................19
Quorum ..........................................................19
Vote Required....................................................20
Share Ownership of Management and Others.........................20
Proxies; Voting and Revocation...................................20
Adjournment and Postponement.....................................21
Solicitation of Proxies..........................................21
THE MERGER................................................................22
Background of the Merger.........................................22
AVIDYN's Reasons for the Merger..................................25
Recommendation of the AVIDYN Board of Directors..................28
Fiserv's Reasons for the Merger..................................28
Accounting Treatment.............................................28
Material U.S. Federal Income Tax Consequences....................28
Regulatory Matters...............................................30
Interests of AVIDYN Directors and Officers in the Merger.........30
Appraisal Rights.................................................32
Federal Securities Laws Consequences.............................35
THE MERGER AGREEMENT......................................................36
The Merger.......................................................36
Completion of the Merger.........................................36
Consideration to be Received in the Merger.......................36
Exchange of Certificates.........................................37
Fractional Shares................................................38
Representations and Warranties...................................38
Conduct of AVIDYN's Business Prior to the Merger.................39
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No Solicitation..................................................39
Stockholders' Meeting............................................41
Nasdaq Listing...................................................41
Officers' and Directors' Indemnification.........................41
Miscellaneous....................................................41
Conditions to Completion of the Merger...........................42
Termination......................................................43
Effect of Termination............................................44
Termination Payment; Expenses....................................44
Amendment and Waiver.............................................45
Indemnification Agreement........................................45
DESCRIPTION OF FISERV CAPITAL STOCK.......................................46
Fiserv Common Stock..............................................46
Fiserv Preferred Stock...........................................46
Fiserv Rights Plan...............................................47
Transfer Agent, Registrar and Exchange Agent.....................48
COMPARISON OF STOCKHOLDER RIGHTS..........................................49
LEGAL MATTERS.............................................................59
EXPERTS ..................................................................59
STOCKHOLDER PROPOSALS.....................................................59
WHERE YOU CAN FIND MORE INFORMATION.......................................60
AGREEMENT AND PLAN OF MERGER.............................................A-1
FORM OF AGREEMENT TO FACILITATE MERGER...................................B-1
DELAWARE GENERAL CORPORATION LAW ss.262 - APPRAISAL RIGHTS...............C-1
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QUESTIONS AND ANSWERS ABOUT THE MERGER
Q. What am I being asked to vote upon at the special meeting?
A. You are being asked to vote to adopt the merger agreement entered into
among Fiserv, Fiserv Merger Sub and AVIDYN and to approve the merger
contemplated by the merger agreement. In the merger, Fiserv Merger Sub,
a wholly-owned subsidiary of Fiserv, will be merged with and into
AVIDYN. After the merger is completed, AVIDYN, which will be the
company surviving the merger, will be a wholly-owned subsidiary of
Fiserv.
Q. Why is AVIDYN proposing to merge?
A. The AVIDYN board of directors has thoroughly considered the advantages
and disadvantages of the proposed merger. The board believes that it is
in the best interests of AVIDYN and its stockholders to complete the
merger and that the merger will provide AVIDYN stockholders with the
best opportunity for return on their investments, through ownership of
a larger, more competitive company. The board of directors has
considered the highly competitive nature of the industry in which
AVIDYN competes, the additional capital investment that would be
required for AVIDYN to experience growth as an independent company, the
increased costs of operating as an independent public company and
AVIDYN's position in the industry. Based on its consideration of those
factors, the board believes that AVIDYN would not be able to compete
effectively in this industry in the future as an independent company.
The board of directors also believes that following the merger AVIDYN's
operating subsidiaries will have a stronger competitive position due to
the increased exposure they will have to Fiserv's current customer base
and other strategic partners. The board of directors has also
determined that there is an absence of any other economically
competitive offers for business combinations. Although an independent
investment banking firm valuation has not been obtained, the board of
directors believes that the consideration to be received from Fiserv in
connection with the proposed merger is fair.
Q. What will I receive in the merger?
A. In the merger, you will receive shares of Fiserv common stock for your
shares of AVIDYN common stock. Fiserv's common stock is traded on the
Nasdaq National Market under the symbol FISV. The exact number of
shares that you will receive will be determined based on a formula set
forth in the merger agreement, which includes an adjustment based upon
the net assets of AVIDYN at the effective time of the merger as agreed
upon by the parties. The merger agreement formula provides that, in
exchange for each of your outstanding shares of AVIDYN common stock,
you will receive a fraction of a share of Fiserv common stock equal to:
o $10.5 million, divided by
o the number of shares of AVIDYN common stock outstanding
immediately before the effective time of the merger, divided
by
o the average closing price for Fiserv common stock for the
twenty business days ending two business days prior to the
effective time of the merger;
provided that the $10.5 million amount used in the above calculation
will be increased or decreased by the difference between (1) the total
assets of AVIDYN less the total liabilities of
-1-
AVIDYN at the effective time of the merger, and (2) $6.8 million,
unless the difference is less than $25,000, in which case no adjustment
to the $10.5 million amount will be made.
Based on the average closing price for Fiserv common stock of $ for the
twenty business days ending two business days prior to the date of this
proxy statement/prospectus and the 3,620,092 shares of AVIDYN common
stock outstanding on the record date, you would receive shares of
Fiserv common stock for each share of your AVIDYN common stock in the
merger. This estimate assumes no adjustment based upon the net assets
of AVIDYN and is intended only to illustrate the calculation of the
merger consideration. This per share number is not likely to be the
actual number of shares of Fiserv common stock you will receive in the
merger for each share of your AVIDYN common stock because the actual
number of shares of Fiserv common stock issuable in the merger will be
a function of the closing sale price for Fiserv common stock for the
twenty business days ending two business days prior to the effective
time of the merger and AVIDYN's net assets at the effective time of the
merger. See "Risk Factors - The number of shares of Fiserv common stock
that AVIDYN stockholders will receive in the merger will fluctuate due
to the formula under the merger agreement."
Please see "The Merger Agreement - Consideration to be Received in the
Merger" for a more detailed explanation of the merger consideration.
Q. How will I find out how many shares of Fiserv common stock I will
receive in the merger?
A. The actual number of shares of Fiserv common stock issuable in the
merger will not be determined until after the close of business on the
second business day before the special meeting of AVIDYN stockholders.
Fiserv and AVIDYN expect to notify you of the number of shares of
Fiserv common stock that you will receive for shares of AVIDYN common
stock pursuant to the formula above before the date of the AVIDYN
special meeting by issuing a press release and filing it with the SEC.
See "Risk Factors - The number of shares of Fiserv common stock that
AVIDYN stockholders will receive in the merger will not be determined
until shortly before the special meeting."
Q. What is the determination and recommendation of the AVIDYN board of
directors with respect to the merger?
A. The AVIDYN board of directors unanimously determined that the terms of
the merger agreement and the merger are advisable and fair to, and in
the best interests of, AVIDYN and it stockholders and has unanimously
approved the merger agreement and the merger. The AVIDYN board of
directors unanimously recommends that the stockholders of AVIDYN vote
"FOR" adoption of the merger agreement and approval of the merger.
Q. Will I receive any fractional shares of Fiserv common stock in the
merger?
A. Fiserv will not issue fractional shares of common stock in the merger.
Instead, you will receive a cash payment equal to the fractional
interest of Fiserv common stock you would have been otherwise entitled
to receive in the merger multiplied by the average closing price for
Fiserv common stock as reported on the Nasdaq National Market for the
twenty business days ending two business days prior to the effective
time of the merger.
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Q. How do I vote?
A. After carefully reading and considering the information contained in,
or incorporated by reference in, this proxy statement/prospectus,
please complete and sign your proxy and return it in the enclosed
return envelope as soon as possible so that your shares may be
represented at the special meeting. If you sign and send in your proxy
and do not indicate how you want to vote, AVIDYN will count your proxy
as a vote in favor of adoption of the merger agreement and approval of
the merger. If you abstain from voting or do not vote your shares by
proxy or in person, it will have the same effect as a vote against
adoption of the merger agreement and approval of the merger.
The special meeting will be held on , 2003, at 9:30 a.m.,
Central Time at AVIDYN's corporate offices at 16980 Dallas Parkway,
Suite 120, Dallas, Texas 75248.
Q. What vote is required to complete the merger?
A. Adoption of the merger agreement and approval of the merger requires
the affirmative vote of the holders of a majority of the shares of
AVIDYN common stock outstanding on the record date. Failure to vote,
abstentions and broker non-votes will not be deemed to be cast either
"FOR" or "AGAINST" the merger agreement and the merger. However,
because adoption of the merger agreement and approval of the merger
requires the affirmative vote of the holders of a majority of the
outstanding shares of AVIDYN common stock, the failure to vote,
abstentions and broker non-votes will have the same effect as a vote
"AGAINST" the merger agreement and the merger. In connection with the
merger agreement, certain AVIDYN directors and/or their affiliates, who
collectively beneficially own approximately 44.4% of the outstanding
shares of AVIDYN common stock, entered into agreements to facilitate
the merger with Fiserv, pursuant to which they agreed to vote their
shares of AVIDYN common stock in favor of adoption of the merger
agreement and approval of the merger. See "The Merger - Interests of
AVIDYN Directors and Officers in the Merger - Agreements to Facilitate
Merger."
Q. Can I change my vote after I have mailed my signed proxy?
A. You can change your vote at anytime before your proxy is voted at the
special meeting. You can do this in any one of the following ways:
o You can send a written notice to the Secretary of AVIDYN
stating that you would like to revoke your proxy.
o You can complete and submit a new proxy.
o You can attend the special meeting and vote in person. You
will not revoke your proxy simply by attending the special
meeting unless you complete a ballot.
If you have instructed a broker to vote your shares, then you must
follow directions received from your broker to change your vote.
Q. If my shares are held in "street name" by my broker or nominee, will my
broker or nominee vote my shares for me?
A. Your broker or nominee will vote your shares only if you provide
instructions on how to vote. You should follow the directions provided
by your broker or nominee regarding how to instruct your broker or
nominee to vote your shares. Without instructions, your shares will not
be voted,
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which will have the effect of a vote against adoption of the merger
agreement and approval of the merger.
Q. Should I send in my stock certificates now?
A. No. After the merger is completed, Fiserv will instruct EquiServe Trust
Company, N.A., as the exchange agent, to send you written instructions
for exchanging your stock certificates. Please do not send in your
stock certificates with your proxy card.
Q. When do you expect the merger to be completed?
A. AVIDYN and Fiserv are working to complete the merger as quickly as
possible. If AVIDYN stockholders adopt the merger agreement and approve
the merger at the special meeting, then AVIDYN and Fiserv expect to
complete the merger on the date of the special meeting.
Q. Am I entitled to appraisal rights?
A. Under Delaware law, you may object to the merger and demand in writing
that AVIDYN pay you in cash the fair value of your shares of AVIDYN
common stock as determined by a Delaware court. To exercise your
appraisal rights you must follow detailed procedures set forth in the
Delaware General Corporation Law. See "The Merger - Appraisal Rights."
Q. What are the tax consequences of the merger to me?
A. The exchange of your shares for Fiserv common stock in the merger has
been structured to be tax-free to you for federal income tax purposes.
However, you will have to pay taxes on cash received for fractional
shares. Your tax basis in your total shares of Fiserv common stock
received and fractional shares deemed received in the merger will equal
your tax basis in your AVIDYN common stock. Tax matters are
complicated, and the consequences of the merger to you will depend on
your particular tax situation. You should consult your own tax advisor
to fully understand the tax consequences of the merger to you.
Q. Who can help answer my questions?
A. If you have any questions about the merger, including how to complete
and return your proxy card, or if you need additional copies of this
proxy statement/prospectus or the enclosed proxy, you should contact:
AVIDYN, Inc.
16980 Dallas Parkway, Suite 120
Dallas, Texas 75248
(972) 447-6447
Attention: Stephanie L. McVay, Secretary
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SUMMARY
This brief summary highlights selected information from this proxy
statement/prospectus. It does not contain all of the information that is
important to you. Fiserv and AVIDYN urge you to read carefully the entire proxy
statement/prospectus, the other documents to which this proxy statement/
prospectus refers and the documents of Fiserv and AVIDYN that are incorporated
by reference in this proxy statement/prospectus. See "Where You Can Find More
Information." A copy of the merger agreement is attached as Annex A to this
proxy statement/prospectus and is incorporated by reference in this proxy
statement/prospectus. We have included page references parenthetically to direct
you to a more complete description of the topics presented in this summary.
THE COMPANIES
Fiserv, Inc.
255 Fiserv Drive
Brookfield, Wisconsin 53045
(262) 879-5000
Fiserv is a leading technology resource for information management
systems used by the financial industry. Fiserv, a Wisconsin corporation, was
formed on July 31, 1984, through the combination of two major regional data
processing firms located in Milwaukee, Wisconsin and Tampa, Florida. These firms
- - First Data Processing of Milwaukee and Sunshine State Systems of Tampa - began
their operations in 1964 and 1971, respectively, as the data processing
operations of their parent financial institutions. Historically, operations were
expanded by developing a range of services for these parent organizations as
well as other financial institutions. Since its organization in 1984, Fiserv has
grown through the continuing development of highly specialized services and
product enhancements, the addition of new clients and the acquisition of firms
complementing the Fiserv organization.
Headquartered in Brookfield, Wisconsin, Fiserv provides information
management technology and related services to banks, broker-dealers, credit
unions, financial planners and investment advisers, insurance agents and
companies, leasing companies, mortgage lenders and savings institutions. Fiserv
operates centers nationwide for full-service financial data processing, software
system development, item processing and check imaging, technology support and
related product businesses. In addition, Fiserv has business support centers in
Argentina, Australia, Colombia, Indonesia, the Philippines, Poland, Singapore
and the United Kingdom.
AVIDYN, Inc.
16980 Dallas Parkway, Suite 120
Dallas, Texas 75248
(972) 447-6447
AVIDYN is a healthcare information services company incorporated in
Delaware in 1989 under the name Medical Control, Inc. AVIDYN conducts its
business through two operating companies serving the healthcare industry.
AVIDYN's two operating subsidiaries are ppoONE, Inc., which provides application
service provider eHealth solutions for preferred provider organizations, or
PPOs, and payers, and ValueCHECK, Inc., which provides utilization review and
case management for third party administrators, payers and PPOs.
ppoONE, using its proprietary application software, database structures
and reports, is an Internet-based application service provider delivering
enterprise software solutions for PPOs, insurance companies and other healthcare
provider network organizations. ppoONE enables such entities and their clients
to manage provider data, contract data and client data, to reprice healthcare
claims to reflect negotiated rates and to produce data analyses.
-5-
ValueCHECK's primary target market is the self-insured employer.
ValueCHECK's services are primarily distributed through third party
administrators and PPOs. ValueCHECK sells its services on a stand-alone basis.
As of January 1, 2002, ValueCHECK provided service to over 850 employer clients
representing over 1,000,000 covered lives.
In the first quarter of 2001, AVIDYN sold MedicalControl Network
Solutions, Inc., which provides managed care services primarily through its
preferred provider networks, and Diversified Group Administrators, Inc., which
provides third party administrator services. Accordingly, the historical
operating results of MedicalControl Network Solutions and Diversified Group
Administrators are reported as discontinued operations.
THE SPECIAL MEETING (PAGE 19)
The special meeting will be held on , 2003, at 9:30 a.m.,
Central Time, at AVIDYN's corporate offices at 16980 Dallas Parkway, Suite 120,
Dallas, Texas 75248.
At the special meeting, AVIDYN stockholders will be asked to vote to
adopt the merger agreement and approve the merger and to conduct any other
business properly brought before the meeting. If AVIDYN stockholders adopt the
merger agreement and approve the merger at the special meeting, then AVIDYN and
Fiserv expect to complete the merger on the date of the special meeting.
RECORD DATE; VOTE REQUIRED (PAGES 19 AND 20)
You can vote, or submit a proxy to vote, at the special meeting if you
were a record holder of AVIDYN common stock at the close of business on ,
2002. On the record date, there were 3,620,092 shares of AVIDYN common stock
outstanding and entitled to vote at the special meeting.
Holders of AVIDYN common stock as of the record date are entitled to
one vote per share on each matter to be voted on at the special meeting.
The merger will be approved only if the holders of a majority of the
outstanding shares of AVIDYN common stock entitled to vote at the special
meeting vote for the proposal to adopt the merger agreement and approve the
merger. In connection with the merger agreement, certain AVIDYN directors and/or
their affiliates, who collectively beneficially own approximately 44.4% of the
outstanding shares of AVIDYN common stock, entered into agreements to facilitate
the merger with Fiserv, pursuant to which they agreed to vote their shares of
AVIDYN common stock in favor of the adoption of the merger agreement and
approval of the merger. See "The Merger - Interests of AVIDYN Directors and
Officers in the Merger - Agreements to Facilitate Merger."
RECOMMENDATION OF THE AVIDYN BOARD OF DIRECTORS (PAGE 22)
The AVIDYN board of directors unanimously determined that the terms of
the merger agreement and the merger are advisable and fair to, and in the best
interests of, AVIDYN and it stockholders and has unanimously approved the merger
agreement and the merger. The AVIDYN board of directors unanimously recommends
that the stockholders of AVIDYN vote "FOR" adoption of the merger agreement and
approval of the merger.
ACCOUNTING TREATMENT (PAGE 28)
The merger will be accounted for as a purchase business combination for
financial reporting and accounting purposes.
-6-
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES (PAGE 28)
The exchange of AVIDYN common stock for Fiserv common stock in the
merger has been structured to be tax-free to AVIDYN stockholders for federal
income tax purposes. However, AVIDYN stockholders will have to pay taxes on cash
received for fractional shares. An AVIDYN stockholder's tax basis in the total
shares of Fiserv common stock received and fractional shares deemed received in
the merger will equal the stockholder's tax basis in AVIDYN common stock. Tax
matters are complicated, and the tax consequences of the merger to any
particular AVIDYN stockholder will depend on the stockholder's particular tax
situation. AVIDYN stockholders should consult their own tax advisors to fully
understand the tax consequences of the merger.
REGULATORY MATTERS (PAGE 30)
There are no significant federal or state regulatory requirements with
which the parties must comply and no significant federal or state regulatory
approvals that the parties must obtain in connection with the merger.
INTERESTS OF AVIDYN DIRECTORS AND OFFICERS IN THE MERGER (PAGE 30)
AVIDYN's stockholders should be aware that some directors and executive
officers of AVIDYN have interests in the merger that are different from, or in
addition to, those of AVIDYN stockholders generally. These interests include the
following:
o certain AVIDYN directors and/or their affiliates, who
collectively beneficially own approximately 44.4% of the
outstanding shares of AVIDYN common stock, entered into
agreements to facilitate the merger with Fiserv, pursuant to
which they agreed to vote their shares of AVIDYN common stock
in favor of the adoption of the merger agreement and approval
of the merger;
o certain executive officers of AVIDYN have agreed to enter into
an employment agreement or amend their existing employment
agreement;
o certain executive officers of AVIDYN will receive an aggregate
of $45,000 in bonuses contingent upon and payable at the
closing of the merger; and
o each of the directors and officers of AVIDYN will be entitled
to continued indemnification by AVIDYN and Fiserv.
APPRAISAL RIGHTS (PAGE 32)
The Delaware General Corporation Law grants appraisal rights in the
merger to the holders of AVIDYN common stock. Under Section 262 of the Delaware
General Corporation Law, AVIDYN stockholders may object to the merger and demand
in writing that AVIDYN pay to them the fair value of their shares of AVIDYN
common stock as determined by a Delaware court. Stockholders who elect to
exercise appraisal rights must comply with all of the procedures set forth in
Section 262 to preserve their appraisal rights.
TERMS OF THE MERGER AGREEMENT
We have attached the merger agreement, which is the legal document that
governs and sets the terms of the merger, as Annex A to this proxy
statement/prospectus. We encourage you to read the merger agreement in its
entirety.
-7-
CONSIDERATION TO BE RECEIVED IN THE MERGER (PAGE 36)
At the effective time of the merger, each share of AVIDYN common stock
then issued and outstanding will be converted into the right to receive a
fraction of a share of Fiserv common stock as determined based on a formula
contained in the merger agreement, which includes an adjustment based upon the
net assets of AVIDYN at the effective time of the merger as agreed upon by the
parties. Under this formula, holders of AVIDYN common stock will receive, in
exchange for each of their outstanding shares of AVIDYN common stock, a fraction
of a share of Fiserv common stock equal to:
o $10.5 million, divided by
o the number of shares of AVIDYN common stock outstanding
immediately before the effective time of the merger, divided
by
o the average closing price for Fiserv common stock for the
twenty business days ending two business days prior to the
effective time of the merger;
provided that the $10.5 million amount used in the above calculation will be
increased or decreased by the difference between (1) the total assets of AVIDYN
less the total liabilities of AVIDYN at the effective time of the merger, and
(2) $6.8 million, unless the difference is less than $25,000, in which case no
adjustment to the $10.5 million amount will be made.
Based on the average closing price for Fiserv common stock of $ for
the twenty business days ending two business days prior to the date of this
proxy statement/prospectus and the 3,620,092 shares of AVIDYN common stock
outstanding on the record date, AVIDYN stockholders would receive shares of
Fiserv common stock for each share of your AVIDYN common stock in the merger.
This estimate assumes no adjustment based upon the net assets of AVIDYN and is
intended only to illustrate the calculation of the merger consideration. This
per share number is not likely to be the actual number of shares of Fiserv
common stock AVIDYN stockholders will receive in the merger for each share of
AVIDYN common stock because the actual number of shares of Fiserv common stock
issuable in the merger will be a function of the closing sale price for Fiserv
common stock for the twenty business days ending two business days prior to the
effective time of the merger and AVIDYN's net assets at the effective time of
the merger. See "Risk Factors - The number of shares of Fiserv common stock that
AVIDYN stockholders will receive in the merger will fluctuate due to the formula
under the merger agreement."
The actual number of shares of Fiserv common stock issuable in the
merger will not be determined until after the close of business on the second
business day before the special meeting of AVIDYN stockholders. Fiserv and
AVIDYN expect to notify AVIDYN stockholders of the number of shares of Fiserv
common stock that will be received for shares of AVIDYN common stock pursuant to
the formula above before the date of the AVIDYN special meeting by issuing a
press release and filing it with the Securities and Exchange Commission. See
"Risk Factors - The number of shares of Fiserv common stock that AVIDYN
stockholders will receive in the merger will not be determined until shortly
before the special meeting."
Holders of AVIDYN common stock will receive only whole shares of Fiserv
common stock and will receive cash instead of fractional shares, as described
under "The Merger Agreement - Fractional Shares."
CONDUCT OF AVIDYN'S BUSINESS PRIOR TO THE MERGER (PAGE 39)
AVIDYN has agreed that, except as otherwise contemplated by the
agreement, AVIDYN, including its subsidiaries, will conduct its operations in
its ordinary and usual course of business.
-8-
NO SOLICITATION (PAGE 39)
AVIDYN has agreed, subject to limited exceptions set forth in the
merger agreement, not to initiate or engage in discussions with any other party
about a business combination with the other person or provide any nonpublic
information to any other person prior to the termination of the merger
agreement.
STOCKHOLDERS' MEETING (PAGE 41)
AVIDYN has agreed to use its reasonable efforts to convene the AVIDYN
special meeting as soon as practicable. Under the merger agreement, AVIDYN's
board of directors is required to recommend the adoption of the merger agreement
and the approval of the merger by the stockholders at the special meeting,
unless it complies with certain requirements under the merger agreement. The
board may not withdraw, or modify in a manner adverse to Fiserv, its
recommendation unless AVIDYN has complied with the nonsolicitation covenants of
the merger agreement and such withdrawal or modification is required under
applicable law in order for the board to comply with its fiduciary duties.
NASDAQ LISTING (PAGE 41)
Fiserv has agreed to prepare and submit to Nasdaq a listing application
for the Fiserv common stock to be issued in the merger pursuant to the merger
agreement.
CONDITIONS TO COMPLETION OF THE MERGER (PAGE 42)
Several conditions must be satisfied or waived before the merger will
be completed, including:
o the absence of any order, decree or injunction that prevents
or materially delays the merger or materially limits Fiserv's
ability to exercise full rights of ownership of AVIDYN or its
assets or business;
o the adoption of the merger agreement and the approval of the
merger by the AVIDYN stockholders;
o Fiserv and AVIDYN will have agreed on the balance sheet of
AVIDYN as of the effective time of the merger;
o the accuracy of the representations and warranties of AVIDYN
and Fiserv, except where the failure of representations and
warranties made by AVIDYN to be accurate have not had, and
would not be reasonably likely to have, a material adverse
effect on AVIDYN;
o the fulfillment in all material respects of the covenants of
AVIDYN and Fiserv under the merger agreement;
o the shares of Fiserv common stock to be issued in the merger
shall have been approved for listing on Nasdaq;
o the absence of any action or proceeding arising by reason of
the merger which is reasonably likely to have a material
adverse effect;
o AVIDYN will have obtained certain consents or waivers to the
merger; and
o certain employees of AVIDYN will have executed and delivered
to Fiserv employment agreements.
-9-
TERMINATION OF THE MERGER AGREEMENT (PAGE 43)
Fiserv and AVIDYN may mutually agree to terminate the merger agreement
at any time. In addition, either Fiserv or AVIDYN may terminate the merger
agreement if specified events do or do not occur. These events include:
o if the merger is not completed by May 2, 2003, other than as a
result of the failure by the party proposing to terminate the
merger agreement to perform its obligations;
o if a court or governmental body permanently prohibits the
merger or a proceeding for it to do so is pending on and after
November 2, 2003;
o if the AVIDYN stockholders fail to approve the merger
agreement and the merger at the special meeting; or
o if a party has materially breached any of its covenants and
the other party has not materially breached its obligations
under the merger agreement.
Fiserv may also terminate the merger agreement if:
o the AVIDYN board of directors has recommended to the
stockholders or entered into an agreement regarding an
alternative transaction; or
o the AVIDYN board of directors has withdrawn or modified in a
manner adverse to Fiserv its recommendation of the merger.
AVIDYN may also terminate the merger agreement under certain
circumstances if the AVIDYN board of directors determines in good faith, after
consultation with its financial advisors and outside counsel, that an
alternative transaction is more favorable to AVIDYN stockholders than the
merger.
TERMINATION PAYMENT (PAGE 44)
AVIDYN must pay Fiserv a termination fee of $400,000 plus all fees and
expenses of Fiserv incurred in connection with the preparation of the
transactions contemplated by the merger agreement if the merger agreement is
terminated under certain circumstances including the AVIDYN board of directors
recommending an alternative transaction, a withdrawal or modification of the
AVIDYN board of directors in a manner adverse to Fiserv of its recommendation of
the merger, the AVIDYN board of directors authorizing AVIDYN to enter into an
agreement concerning an alternative transaction or AVIDYN entering into an
alternative transaction within twelve months of the date on which AVIDYN
materially breached its covenants under the merger agreement. These
circumstances are described in detail in "The Merger Agreement - Termination
Payment; Expenses."
-10-
SELECTED FISERV HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data of Fiserv as of and for the
years ended December 31, 2001, 2000 and 1999 has been derived from consolidated
financial statements of Fiserv, which have been audited by Deloitte & Touche
LLP, independent auditors, and are incorporated by reference in this proxy
statement/prospectus. The selected consolidated financial data of Fiserv as of
and for the years ended December 31, 1998 and 1997 has been derived from audited
consolidated financial statements previously filed with the SEC but not
incorporated by reference in this proxy statement/prospectus. The selected
consolidated financial data of Fiserv as of and for the nine months ended
September 30, 2002 and 2001 has been derived from unaudited condensed
consolidated financial statements filed by Fiserv with the SEC and are
incorporated by reference in this proxy statement/prospectus and include all
adjustments, consisting only of normal recurring accruals, that Fiserv considers
necessary for a fair statement of the consolidated financial position, results
of operations and cash flows. Operating results for the nine months ended
September 30, 2002 are not necessarily indicative of the results that may be
expected for the entire year ending December 31, 2002. The financial information
for Fiserv is qualified in its entirety by, and you should read it in
conjunction with, the consolidated financial statements, the notes thereto and
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" for Fiserv incorporated by reference in this proxy
statement/prospectus. See "Where You Can Find More Information."
Nine Months Ended
September 30, Years Ended December 31,
---------------------------- ------------------------------------------------------------------------
2002 2001 2001 2000 1999 1998 1997
---- ---- ---- ---- ---- ---- ----
(In thousands, except per share data)
Total revenues (1)......... $1,900,026 $1,610,506 $2,189,181 $1,929,221 $1,407,545 $1,233,670 $974,432
Income before income
taxes.................... 324,441 258,971 347,028 300,035 233,675 193,684 153,899
Income tax provision....... 126,532 103,588 138,811 123,014 95,807 79,410 63,099
Net income (2)............. 197,909 155,383 208,217 177,021 137,868 114,274 90,800
Net income per
share: (2)(3)
Basic.................. $1.03 $0.83 $1.11 $0.96 $0.75 $0.62 $0.52
Diluted................ $1.01 $0.81 $1.09 $0.93 $0.73 $0.60 $0.50
Total assets............... $5,665,831 $5,228,229 $5,322,242 $5,586,320 $5,307,710 $3,958,338 $3,636,491
Long-term obligations...... 260,734 250,283 343,093 334,958 472,824 389,622 252,031
Shareholders' equity....... 1,769,305 1,416,841 1,604,826 1,252,072 1,091,016 885,797 769,255
_____________
(1) Total revenues have been restated to reflect the impact of Fiserv adopting Emerging Issues Task Force Issue No. 01-14, "Income
Statement Characterization of Reimbursements Received for `Out of Pocket' Expenses Incurred," which requires that customer
reimbursements received for direct costs paid to third parties and related expenses be characterized as revenues. Total
revenues and expenses have been increased by $216,775 for the nine months ended September 30, 2001, $298,714 for the year ended
December 31, 2001 and $275,615 for the year ended December 31, 2000. Revenues and expenses for periods 1999 and prior were not
restated as it was impracticable to obtain this information. The adoption of Emerging Issues Task Force Issue No. 01-14 did not
impact Fiserv's financial position, operating income or net income.
(2) On January 1, 2002, Fiserv adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
Pro forma net income, adjusted to eliminate historical amortization of goodwill and related tax effects, was $169,198 for the
nine months ended September 30, 2001, $226,656 for the year ended December 31, 2001 and $193,616 for the year ended December
31, 2000. The impact of adopting this statement would have increased diluted net income per share by $0.07 for the nine months
ended September 30, 2001, $0.09 for the year ended December 31, 2001 and $0.09 for the year ended December 31, 2000.
(3) Net income per share has been restated to recognize three-for-two stock splits effective in August 2001, April 1999 and May
1998.
-11-
SELECTED AVIDYN HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data of AVIDYN as of and for the
years ended December 31, 2001 and 2000 has been derived from consolidated
financial statements of AVIDYN, which have been audited by Grant Thornton LLP,
independent certified public accountants, and are incorporated by reference in
this proxy statement/prospectus. The selected consolidated financial data of
AVIDYN as of and for the years ended December 31, 1999, 1998 and 1997 has been
derived from audited consolidated financial statements previously filed with the
SEC but not incorporated by reference in this proxy statement/prospectus. The
selected consolidated financial data of AVIDYN as of and for the nine months
ended September 30, 2002 and 2001 has been derived from unaudited consolidated
financial statements filed by AVIDYN with the SEC and are incorporated by
reference in this proxy statement/prospectus and include all adjustments,
consisting only of normal recurring accruals, that AVIDYN considers necessary
for a fair statement of the consolidated financial position, results of
operations and cash flows. Operating results for the nine months ended September
30, 2002 are not necessarily indicative of results that may be expected for the
entire year ending December 31, 2002. The financial information for AVIDYN is
qualified in its entirety by, and you should read it in conjunction with, the
consolidated financial statements, the notes thereto and "Management's
Discussion and Analysis of Results of Operations and Financial Condition" for
AVIDYN incorporated by reference in this proxy statement/prospectus. See "Where
You Can Find More Information."
Nine Months Ended
September 30, Years Ended December 31,
----------------------------- ---------------------------------------------------------------------
2002 2001 2001 2000 1999 1998 1997
---- ---- ---- ---- ---- ---- ----
(In thousands, except per share data)
Revenues .................. $ 6,268 $ 4,230 $ 5,931 $ 2,150 $ 949 $ 1,454 $ 947
Loss before income tax
benefit and discontinued
operations .............. (296) (2,049) (2,872) (2,587) (1,547) (1,708) (1,283)
Income tax benefit ........ 101 738 903 966 569 581 487
Loss from
continuing operations ... (195) (1,311) (1,969) (1,621) (978) (1,127) (795)
Gain and income (loss) from
discontinued operations . -- 4,335 4,422 1,215 (578) (62) 1,084
Net income (loss) ......... (195) 3,024 2,453 (406) (1,556) (1,189) 289
Basic and diluted income
(loss) per share:
Continuing operations . $ (0.05) $ (0.28) $ (0.44) $ (0.35) $ (0.22) $ (0.29) $ (0.20)
Discontinued operations -- $ 0.92 $ 0.99 $ 0.26 $ (0.13) $ (0.01) $ 0.27
Net income (loss) ..... $ (0.05) $ 0.64 $ 0.55 $ (0.09) $ (0.35) $ (0.30) $ 0.07
Total assets .............. $ 7,826 $ 12,520 $ 7,747 $ 10,299 $ 10,235 $ 7,498 $ 10,121
Stockholders' equity ...... 6,806 11,528 7,001 8,481 8,449 7,984 7,674
-12-
UNAUDITED COMPARATIVE PER SHARE DATA
The following table summarizes certain per share information for Fiserv
on a historical and pro forma combined basis and for AVIDYN on a historical and
equivalent pro forma basis. You should read the information below along with the
selected historical consolidated financial data for Fiserv and AVIDYN included
under "Selected Fiserv Historical Consolidated Financial Data" and "Selected
AVIDYN Historical Consolidated Financial Data." The pro forma combined per share
information is not necessarily indicative of the operating results of future
operations or the actual results that would have occurred had the transaction
been completed at the beginning of the period presented.
Nine Months Ended Year Ended
September 30, 2002 December 31, 2001
-------------------------- -------------------------
Fiserv Historical (1)
Net income per share from continuing operations:
Basic................................................ $1.03 $1.11
Diluted.............................................. $1.01 $1.09
Book value per share at period end....................... $9.23 $8.43
AVIDYN Historical (1)
Net loss per share from continuing operations
(basic and diluted).................................. $(0.05) $(0.44)
Book value per share at period end....................... $1.88 $1.93
Fiserv Pro Forma
Net income per share from continuing operations:
Basic................................................ $1.03 $1.10
Diluted.............................................. $1.01 $1.07
Book value per share at period end....................... $9.27 $8.47
AVIDYN Equivalent Pro Forma (2) Net income per share
from continuing operations:
Basic................................................ $ $
Diluted.............................................. $ $
Book value per share at period end....................... $ $
__________________
(1) Net income or loss per share amounts are calculated using weighted average shares outstanding
for the period. Book value per share amounts are calculated using outstanding shares at the
period end.
(2) The AVIDYN equivalent pro forma information is calculated by multiplying the Fiserv pro forma
per share amounts by , which is equal to the fraction of a share of Fiserv common stock that
would be issuable in the merger for each share of AVIDYN common stock under the merger
agreement formula based on the average closing price for Fiserv common stock of $ for the
twenty business days ending two business days prior to the date of this proxy statement/
prospectus and the 3,620,092 shares of AVIDYN common stock outstanding on the record date and
assuming no adjustment based upon the net assets of AVIDYN. This fraction is only an estimate
based on the foregoing assumptions. This fraction is not likely to be the actual number of
shares of Fiserv common stock AVIDYN stockholders will receive in the merger for each share of
AVIDYN common stock because the actual number of shares of Fiserv common stock issuable in the
merger will be a function of the closing sale price for Fiserv common stock for the twenty
business days ending two business days prior to the effective time of the merger and AVIDYN's
estimated net assets at the effective time of the merger. See "Risk Factors - The number of
shares of Fiserv common stock that AVIDYN stockholders will receive in the merger will
fluctuate due to the formula under the merger agreement."
-13-
MARKET PRICE INFORMATION
The following table sets forth the high and low sale prices of Fiserv
common stock, which is traded on the Nasdaq National Market under the symbol
FISV. Information has been adjusted to recognize a three-for-two stock split
effective August 2001. Fiserv has not paid any cash dividends with respect to
Fiserv common stock and does not anticipate paying any cash dividends in the
foreseeable future.
High Low
------------- --------------
2000
First Quarter ............................ $ 25.67 $ 16.21
Second Quarter ........................... 33.58 22.46
Third Quarter ............................ 42.75 28.46
Fourth Quarter ........................... 41.75 28.96
2001
First Quarter ............................ $ 38.71 $ 29.08
Second Quarter ........................... 43.09 30.13
Third Quarter ............................ 42.13 30.05
Fourth Quarter ........................... 44.61 30.30
2002
First Quarter ............................ $ 47.24 $ 39.62
Second Quarter ........................... 46.57 34.20
Third Quarter ............................ 39.90 26.50
Fourth Quarter (through , 2002)....
The following table sets forth the high and low sale prices of AVIDYN
common stock, which is traded on the Nasdaq SmallCap Market under the symbol
ADYN. AVIDYN has not paid any cash dividends with respect to AVIDYN common stock
and does not anticipate paying any cash dividends in the foreseeable future.
High Low
------------ --------------
2000
First Quarter............................ $ 8.50 $ 7.13
Second Quarter........................... 7.56 5.50
Third Quarter............................ 6.81 5.00
Fourth Quarter........................... 8.63 3.00
2001
First Quarter............................ $ 6.06 $ 2.81
Second Quarter........................... 7.25 4.75
Third Quarter............................ 7.22 3.90
Fourth Quarter........................... 4.48 2.90
2002
First Quarter............................ $ 4.02 $ 2.55
Second Quarter........................... 3.81 2.63
Third Quarter............................ 2.90 1.77
Fourth Quarter (through , 2002)...
-14-
The following table sets forth the closing prices per share of Fiserv
common stock on the Nasdaq National Market and AVIDYN common stock on the Nasdaq
SmallCap Market on November 1, 2002, the last full trading day prior to the
announcement of the merger agreement, and , 2002, the latest
practicable full trading day prior to the date of this proxy statement/
prospectus. The following table also sets forth the equivalent per share price
of AVIDYN common stock, which was determined by multiplying the applicable price
of Fiserv common stock by the fraction of a share of Fiserv common stock that
would be issuable in the merger for each share of AVIDYN common stock under the
merger agreement formula, which was 0.1034 as of November 1, 2002 and as
of , 2002. The fraction of a share of Fiserv common stock that would be
issuable in the merger was determined based on Fiserv common stock prices using
the formula calculated under the merger agreement as if the closing of the
merger had occurred on those dates and the 3,620,092 shares of AVIDYN common
stock outstanding on the record date and assumes no adjustment based upon the
net assets of AVIDYN.
Fiserv AVIDYN Estimated Equivalent
Date Common Stock Common Stock AVIDYN Per Share Price
November 1, 2002 $31.39 $2.35 $3.25
, 2002 $ $ $
The actual equivalent per share price of AVIDYN common stock that
holders of AVIDYN common stock will receive if the merger is completed may
increase or decrease from that noted in the table above. Because the formula in
the merger agreement to determine the number of shares of Fiserv common stock
AVIDYN stockholders will receive in the merger is based in part upon the closing
sale price of Fiserv common stock on the Nasdaq National Market for the twenty
business days ending two business days prior to the effective time of the
merger, AVIDYN stockholders are urged to obtain current market quotations before
making any decision on whether and how to vote shares of AVIDYN common stock at
the special meeting. In addition, AVIDYN stockholders should be aware that the
number of shares of Fiserv common stock to be received in the merger will be a
function of the amount of total assets of AVIDYN less the total liabilities of
AVIDYN, in each case, at the effective time of the merger. See "The Merger
Agreement - Consideration to be Received in the Merger" and "Risk Factors - The
number of shares of Fiserv common stock that AVIDYN stockholders will receive in
the merger will fluctuate due to the formula under the merger agreement."
The actual number of shares of Fiserv common stock issuable in the
merger will not be determined until after the close of business on the second
business day before the special meeting of AVIDYN stockholders. Fiserv and
AVIDYN expect to notify AVIDYN stockholders of the number of shares of Fiserv
common stock that will be received for shares of AVIDYN common stock pursuant to
the formula above before the date of the AVIDYN special meeting by issuing a
press release and filing it with the SEC. See "Risk Factors - The number of
shares of Fiserv common stock that AVIDYN stockholders will receive in the
merger will not be determined until shortly before the special meeting."
-15-
RISK FACTORS
You should carefully consider the following risk factors, in addition
to those discussed in the documents that AVIDYN and Fiserv have filed with the
SEC that are incorporated by reference into this proxy statement/prospectus, in
determining whether to adopt the merger agreement and approve the merger.
THE NUMBER OF SHARES OF FISERV COMMON STOCK THAT AVIDYN STOCKHOLDERS WILL
RECEIVE IN THE MERGER WILL FLUCTUATE DUE TO THE FORMULA UNDER THE MERGER
AGREEMENT.
In the merger, each share of AVIDYN common stock will be converted into
the right to receive a fraction of a share of Fiserv common stock pursuant to
the formula set forth in the merger agreement. The number of shares of Fiserv
common stock AVIDYN stockholders will receive in the merger is based in part
upon the closing sale price of Fiserv common stock on the Nasdaq National Market
for the twenty business days ending two business days prior to the effective
time of the merger. Variations in Fiserv common stock market price may result
from various factors, including changes in the business, operations or prospects
of Fiserv and general market and economic conditions. AVIDYN stockholders are
urged to obtain current market quotations before making any decision on whether
and how to vote shares of AVIDYN common stock at the special meeting. The number
of shares of Fiserv common stock issuable in the merger is also a function of
the number of shares of AVIDYN common stock outstanding and the amount of total
assets of AVIDYN less the total liabilities of AVIDYN, in each case, at the
effective time of the merger. Changes in these factors will affect the number of
shares of Fiserv common stock and the overall value of the merger consideration
payable to AVIDYN stockholders in the merger. See "The Merger Agreement -
Consideration to be Received in the Merger" for more detailed information on how
the number of shares of Fiserv common stock issuable in the merger is
determined.
THE NUMBER OF SHARES OF FISERV COMMON STOCK THAT AVIDYN STOCKHOLDERS WILL
RECEIVE IN THE MERGER WILL NOT BE DETERMINED UNTIL SHORTLY BEFORE THE SPECIAL
MEETING.
The actual number of shares of Fiserv common stock that AVIDYN
stockholders will receive in the merger will not be determined until after the
close of business on the second business day before the special meeting of
AVIDYN stockholders. Fiserv and AVIDYN expect to notify AVIDYN stockholders of
the number of shares of Fiserv common stock that will be received for shares of
AVIDYN common stock pursuant to the formula under the merger agreement before
the date of the AVIDYN special meeting by issuing a press release and filing it
with the SEC. However, AVIDYN stockholders that vote by proxy will have voted
their shares of AVIDYN common stock, subject to revocation of their proxy, prior
to knowing the number of shares of Fiserv common stock they will receive in the
merger.
TERMINATION FEES MAY DISCOURAGE OTHER COMPANIES FROM TRYING TO COMBINE WITH
AVIDYN.
The merger agreement provides for termination fees that could
discourage other companies from trying or proposing to combine with AVIDYN
before Fiserv and AVIDYN complete the merger. An alternative transaction
involving AVIDYN may be more advantageous to its stockholders than the merger.
This provision may discourage other companies from trying to or proposing to
combine with AVIDYN.
FISERV AND AVIDYN MAY ENCOUNTER DIFFICULTIES IN INTEGRATING OPERATIONS.
Fiserv and AVIDYN expect some benefits to arise from the merger,
including expansion of AVIDYN's customer base and operating efficiencies. The
extent to which these benefits arise will depend on how and when the businesses
of Fiserv and AVIDYN are integrated after the merger. In the
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past, Fiserv has successfully combined acquired operations, but there are risks
that Fiserv and AVIDYN will not successfully combine their operations in the
time anticipated or fully achieve the anticipated benefits. If the integration
of the businesses proves difficult, then management may divert their attention
from other business concerns.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this proxy statement/prospectus are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include words such as "believes," "anticipates" or
"expects," or words of similar import. Such forward-looking statements are
subject to certain risks and uncertainties which could cause actual results to
differ materially from those currently anticipated. Such risks and uncertainties
include, among others:
o the ability of Fiserv and AVIDYN to consummate the merger in a timely
manner or at all;
o failure of AVIDYN stockholders to approve the merger;
o AVIDYN's business may not be integrated successfully into Fiserv to
realize anticipated synergies and cost savings;
o the ability of Fiserv and AVIDYN to successfully manage relationships
with customers during the pendency of and following the transaction;
and
o other factors discussed above under "Risk Factors" and in the filings
of Fiserv and AVIDYN with the Securities and Exchange Commission.
Investors should consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue reliance on such
forward-looking statements.
-18-
THE SPECIAL MEETING
This proxy statement/prospectus is furnished in connection with the
solicitation of proxies by the AVIDYN board of directors for use at the special
meeting of AVIDYN stockholders to be held on , 2003 and at any adjournment
or postponement of the meeting. This proxy statement/prospectus and accompanying
form of proxy are first being mailed to AVIDYN stockholders on or about ,
2002.
TIME AND PLACE
The special meeting will be held on , 2003, at 9:30 a.m., Central
Time, at AVIDYN's corporate offices at 16980 Dallas Parkway, Suite 120, Dallas,
Texas 75248.
PURPOSE OF THE SPECIAL MEETING
At the special meeting, AVIDYN stockholders will be asked to consider
and vote upon the adoption of the merger agreement and the approval of the
merger. If AVIDYN stockholders adopt the merger agreement and approve the merger
at the special meeting, then AVIDYN and Fiserv expect to complete the merger on
the date of the special meeting.
AVIDYN knows of no other matters to be brought before the special
meeting. If any other business should properly come before the special meeting,
the persons named in the enclosed proxy will vote in their discretion.
RECOMMENDATION OF THE AVIDYN BOARD OF DIRECTORS
THE AVIDYN BOARD OF DIRECTORS UNANIMOUSLY DETERMINED THAT THE TERMS OF
THE MERGER AGREEMENT AND THE MERGER ARE ADVISABLE AND FAIR TO, AND IN THE BEST
INTERESTS OF, AVIDYN AND ITS STOCKHOLDERS AND HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE MERGER. THE AVIDYN BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS OF AVIDYN VOTE "FOR" ADOPTION OF THE MERGER
AGREEMENT AND APPROVAL OF THE MERGER.
RECORD DATE; STOCK ENTITLED TO VOTE
AVIDYN has established the close of business on , 2002 as the
record date to determine AVIDYN stockholders entitled to vote at the special
meeting. Only holders of AVIDYN common stock of record on the record date are
entitled to receive notice of and to vote at the special meeting and any
adjournments or postponements of the meeting. At the close of business on the
record date, 3,620,092 shares of AVIDYN common stock were outstanding and
entitled to vote at the special meeting, and were held by approximately
holders of record. AVIDYN common stock constitutes the only outstanding class of
AVIDYN voting securities. Each share of AVIDYN common stock is entitled to one
vote on the merger agreement and the merger. Votes may be cast at the special
meeting in person or by proxy.
QUORUM
The presence at the special meeting, either in person or by proxy, of a
majority of the shares of AVIDYN common stock outstanding on the record date is
necessary to constitute a quorum to transact business at that meeting. If a
quorum is not present, it is expected that the special meeting will be adjourned
or postponed in order to solicit additional proxies.
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Abstentions and "broker non-votes" will be counted for the purpose of
determining whether a quorum is present. Broker non-votes are shares held by
brokers or nominees on behalf of customers that are represented at the meeting
but with respect to which the broker or nominee has not been instructed how to
vote. Brokers holding shares of AVIDYN common stock in street name for customers
are prohibited from voting those customers' shares regarding the merger
agreement and the merger in the absence of specific instructions from those
customers.
VOTE REQUIRED
Adoption of the merger agreement and approval of the merger requires
the affirmative vote of the holders of a majority of the shares of AVIDYN common
stock outstanding on the record date. Failures to vote, abstentions and broker
non-votes will not be deemed to be cast either "FOR" or "AGAINST" the merger
agreement and the merger. However, because adoption of the merger agreement and
approval of the merger requires the affirmative vote of the holders of a
majority of the outstanding shares of AVIDYN common stock, failures to vote,
abstentions and broker non-votes will have the same effect as a vote "AGAINST"
the merger agreement and the merger.
SHARE OWNERSHIP OF MANAGEMENT AND OTHERS
As of the record date, AVIDYN's directors and executive officers
beneficially owned approximately 44.4 % of the outstanding shares of AVIDYN
common stock. Each AVIDYN director and executive officer has indicated his or
her present intention to vote, or cause to be voted, the AVIDYN common stock
owned by him or her "FOR" adoption of the merger agreement and approval of the
merger.
On November 2, 2002, John Ward Hunt, AVIDYN's chairman of the board, an
entity controlled by Mr. Hunt and an entity controlled by Frank M. Burke, Jr.,
an AVIDYN director, each entered into an agreement to facilitate the merger,
pursuant to which, among other things, these stockholders agreed to vote their
shares of AVIDYN common stock "FOR" adoption of the merger agreement and
approval of the merger. See "The Merger - Interests of AVIDYN Directors and
Officers in the Merger - Agreements to Facilitate Merger." A copy of the form of
agreement to facilitate the merger is attached as Annex B to this proxy
statement/prospectus and is incorporated by reference into this proxy
statement/prospectus. On the record date, these stockholders collectively
beneficially owned 44.4% of the outstanding shares of AVIDYN common stock
eligible to vote at the special meeting.
PROXIES; VOTING AND REVOCATION
Shares of AVIDYN common stock represented by properly executed proxies
received in time for the special meeting will be voted in accordance with
instructions indicated on the proxies. Except for the broker non-votes, proxies
that do not contain voting instructions will be voted "FOR" adoption of the
merger agreement and approval of the merger, and as determined by the AVIDYN
board of directors as to any other matter that may properly come before the
special meeting.
Any AVIDYN stockholder who executes and returns a proxy may revoke it
at any time prior to the voting of the proxies by giving written notice to the
Secretary of AVIDYN, by executing a later dated proxy or by attending the
special meeting and voting in person. Attendance at the special meeting will not
by itself constitute revocation of a proxy; an AVIDYN stockholder must also vote
in person at the special meeting.
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ADJOURNMENT AND POSTPONEMENT
If a quorum is not present at the time the special meeting is convened,
or if for any other reason AVIDYN believes that additional time should be
allowed for the solicitation of proxies, then AVIDYN may postpone the meeting or
may adjourn the meeting with or without a vote of stockholders. If AVIDYN
proposes to postpone or adjourn the special meeting by a vote of stockholders,
then the persons named in the enclosed form of proxy will vote all shares of
AVIDYN common stock for which they have voting authority in favor of a
postponement or adjournment. However, these persons will not vote any shares of
AVIDYN common stock for which they have been instructed to vote against the
adoption of the merger agreement and approval of the merger in favor of that
postponement or adjournment.
SOLICITATION OF PROXIES
AVIDYN will pay the cost of soliciting proxies from its stockholders.
In addition to solicitation by mail, AVIDYN directors, officers and employees
may solicit proxies by telephone, fax, the Internet, telegram or in person.
Arrangements will also be made with brokerage houses and other nominees and
fiduciaries for forwarding solicitation material to the beneficial owners of
stock held of record by those persons, and AVIDYN will reimburse those
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses.
THE MATTERS TO BE CONSIDERED AT THE AVIDYN SPECIAL MEETING ARE OF GREAT
IMPORTANCE TO AVIDYN STOCKHOLDERS. THE AVIDYN BOARD OF DIRECTORS URGES ALL
AVIDYN STOCKHOLDERS TO READ AND CAREFULLY CONSIDER THE INFORMATION PRESENTED IN
THIS DOCUMENT AND TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
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THE MERGER
This section of the proxy statement/prospectus and the next section
entitled "The Merger Agreement" describe the proposed merger. Although Fiserv
and AVIDYN believe that the description in those sections covers the material
terms of the merger agreement, the merger and the related transactions, this
summary may not contain all of the information that is important to you. You
should carefully read the entire proxy statement/prospectus and the other
documents referred to in this proxy statement/prospectus for a more complete
understanding of the merger.
BACKGROUND OF THE MERGER
Based upon the analysis and discussions of the AVIDYN board of
directors described under "The Merger - AVIDYN's Reasons for the Merger," the
board of directors determined that the best opportunity for AVIDYN to provide
value to its stockholders was to pursue a business combination with another
company. The board of directors also determined that the merger represents the
best potential business combination available to the stockholders of AVIDYN in
the foreseeable future. However, prior to making this determination, AVIDYN's
board of directors and management considered numerous potential business
strategies, business alliances and alternative transactions in an attempt to
maximize the value of AVIDYN's common stock.
During August and September 2001, Mr. Joseph A. Hensley, President of
AVIDYN and ppoONE, had several discussions with a representative of a potential
acquiror of ppoONE or its proprietary systems, which had been initiated by such
potential acquiror. At a special board meeting on September 13, 2001 called to
discuss the long-term strategy for ppoONE and ValueCHECK, the AVIDYN board of
directors discussed the possibility of a sale transaction with that acquiror.
The board of directors instructed Mr. Hensley to continue to pursue such
discussions. However, those transaction discussions were postponed and
subsequently terminated by the potential acquiror due to its internal issues.
During November 2001 and December 2001, AVIDYN's board of directors and
management continued to explore alternatives for ppoONE, including strategic
alliances, expanding its products into new markets, cost reductions and changes
in sales staff. During this time, Mr. Hensley and other representatives of
AVIDYN met with representatives of two separate companies on separate occasions
to discuss entering into a strategic alliance with either of them. After
learning more about ppoONE, both of these companies became more interested in
acquiring ppoONE than entering into a strategic alliance. One of these companies
performed initial due diligence during this time.
At a regularly scheduled board meeting on November 8, 2001, Mr. Hensley
updated the AVIDYN board of directors on the transactions that were being
proposed for AVIDYN and separately for ppoONE. After reviewing AVIDYN's
financial projections for 2002 and 2003, the board of directors instructed Mr.
Hensley to continue responding to proposals for a sale of ppoONE. The board of
directors agreed at this meeting that, absent significantly improved revenue
increases for ppoONE or an acceptable offer for AVIDYN or ppoONE, the board of
directors would meet on January 31, 2002 to discuss the future of ppoONE and
AVIDYN as a whole. After this meeting, Mr. Hensley began making inquires to
companies in the industry that might have an interest in ppoONE.
At a regularly scheduled board meeting on December 11, 2001 to approve
the 2002 budget for AVIDYN and its subsidiaries, Mr. Hensley summarized for the
AVIDYN board of directors the discussions and proposals from two potential
acquirors regarding the sale of ppoONE. The board of directors discussed the
value of ppoONE and instructed Mr. Hensley to continue his search for possible
acquisition candidates for AVIDYN as well as possible acquirors of ppoONE.
-22-
On January 31, 2002, at a special meeting of the AVIDYN board of
directors, the board of directors reviewed the long-term strategy for ppoONE.
The board of directors reviewed the declining outlook for new sales and
contracts for ppoONE during 2002 and authorized the elimination of personnel at
ppoONE to bring expenses in line with anticipated revenues. Mr. Hensley
summarized for the board of directors the discussions representatives of AVIDYN
were having with two potential acquirors of ppoONE and one potential acquiror of
AVIDYN. After this meeting, Mr. Hensley made a concerted effort to market ppoONE
for sale.
Between January 2002 and June 2002, representatives of AVIDYN,
including John Ward Hunt, AVIDYN's chairman of the board, Mr. Hensley, Randall
D. Kurtz, AVIDYN's chief financial officer, and Dwight D. Mankin, senior vice
president, sales of ppoONE and ValueCHECK, participated in discussions and
attended meetings with, and made presentations regarding AVIDYN and ppoONE to,
representatives of four additional potential acquirors of ppoONE or AVIDYN in
addition to Fiserv. Throughout this time period, the AVIDYN board of directors
was apprised by AVIDYN management as to the status of discussions with potential
acquirors and had discussions regarding the future of ppoONE and AVIDYN as a
whole. Three of the potential acquirors performed due diligence on AVIDYN. Three
of the potential acquirors made informal offers to acquire ppoONE or AVIDYN
during this time. However, in each case, AVIDYN declined the proposed
transaction because the board of directors determined that the terms, including
the price and/or structure, of the transaction was not in the best interests of
AVIDYN and its stockholders.
At a regularly scheduled board meeting on March 7, 2002, Mr. Hensley
summarized for the AVIDYN board of directors the status of discussions and
possible transactions with various entities regarding the sale of ppoONE. The
board of directors asked management to update ppoONE's projections for 2003 so
they could evaluate alternatives with respect to ppoONE.
At a regularly scheduled board meeting on May 10, 2002, the AVIDYN
board of directors and Mr. Hensley held lengthy discussions regarding the
potential acquirors of ppoONE and the status of Mr. Hensley's discussions with
each of these entities.
On May 22, 2002, AVIDYN and Trewit Inc., a wholly-owned subsidiary of
Fiserv, executed a confidentiality agreement, after which time Trewit was
provided with due diligence materials concerning AVIDYN. On June 19, 2002, an
initial meeting was held among Mr. Hunt, Mr. Hensley and James W. Cox, Trewit's
president, to discuss Fiserv's interest in acquiring or merging with AVIDYN.
Between June 2002 and early September 2002, Mr. Hensley and Mr. Cox continued to
have telephonic discussions regarding Fiserv's interest in a transaction with
AVIDYN.
During the period from July 2002 through September 2002,
representatives of AVIDYN, including Mr. Hensley, Mr. Kurtz and Mr. Mankin,
participated in discussions and attended meetings with, and made presentations
regarding AVIDYN and ppoONE to, representatives of three additional potential
acquirors of ppoONE or AVIDYN other than Fiserv. However, none of these
potential acquirors had an interest in pursuing a transaction with AVIDYN.
At a regularly scheduled board meeting on August 8, 2002, the AVIDYN
board of directors and Mr. Hensley held lengthy discussions regarding potential
purchasers of ppoONE or AVIDYN and the status of Mr. Hensley's discussions with
each of these entities. The board of directors and Mr. Hensley discussed each
opportunity and the current status of such discussions. The board of directors
also held a lengthy discussion regarding AVIDYN's business strategy and
alternatives for the future. The alternatives considered by the board of
directors included the possibility of merging with another company or going
private since the cost of being a public company was expected to increase as a
result of
-23-
new corporate governance and disclosure legislation that was being proposed and
adopted, including the Sarbanes-Oxley Act.
On September 6, 2002, Mr. Cox called Mr. Hensley to inform him that
Fiserv would like to have further discussions regarding a possible transaction.
On September 16, 2002, Mr. Hensley and Mr. Kurtz met with Mr. Cox and James
Lockhart, Trewit's executive vice president and general counsel, and explained
the possible synergies resulting from a combination of the two organizations. On
September 18, 2002, Mr. Cox sent Mr. Hensley a letter expressing an interest in
having further discussions concerning an acquisition of, or merger with, AVIDYN.
On September 25, 2002, AVIDYN held a special board meeting at which the
AVIDYN board of directors and management reviewed the letter from Trewit, during
which time the board discussed the value of AVIDYN. The board of directors
agreed to proceed with discussions with Trewit regarding a possible business
combination.
On September 9, 2002, Mr. Hensley met with a representative of another
potential acquiror regarding a possible transaction with AVIDYN. The potential
acquiror was interested in acquiring both ppoONE and ValueCHECK, but did not
desire to acquire the stock of AVIDYN. On September 26, 2002, representatives of
AVIDYN and the potential acquiror met with the outside directors of AVIDYN, and
further discussed the possibility of acquiring the assets of AVIDYN. The AVIDYN
representatives informed the potential acquiror's representative that AVIDYN's
stockholders may have less advantageous tax consequences if the assets of AVIDYN
were sold instead of its stock. In October 2002, the potential acquiror
performed due diligence regarding a possible purchase of AVIDYN's assets. On
November 1, 2002, after AVIDYN had substantially completed negotiations with
Fiserv, a representative of the potential acquiror stated that no offer would be
forthcoming at that time.
On October 3, 2002, at AVIDYN's invitation, Mr. Cox and Mr. Lockhart of
Trewit met with Mr. Hensley and the outside directors of AVIDYN to discuss the
details of a possible acquisition of, or merger with, AVIDYN, including
negotiating the price and structure of the transaction. AVIDYN's outside
directors encouraged Mr. Cox and Mr. Lockhart to submit a proposed merger
agreement for their review and consideration.
On October 14 and 15, 2002, Mr. Cox, Mr. Lockhart, Carrie Pope,
Trewit's product manager, and Chad Gross, Trewit's chief technology officer, met
with management of AVIDYN, ppoONE and ValueCHECK and performed due diligence at
AVIDYN's offices in Dallas, Texas.
On October 21, 2002, at a special meeting of the AVIDYN board of
directors, Mr. Kurtz made a presentation to the board regarding, and the board
discussed, the financial and business terms of the proposed transaction with
Fiserv. The presentation included an overview of Fiserv and its acquisition
strategy, Fiserv's business reputation, and significant financial information
concerning Fiserv. The board of directors and Stephanie L. McVay, AVIDYN's
senior vice president and general counsel, reviewed the terms of the proposed
merger agreement, including the price and structure of the transaction, the
"fiduciary out" provisions and the related termination fee, the balance sheet
adjustment and the definition of material adverse effect.
At a regularly scheduled board meeting on October 31, 2002, the AVIDYN
board of directors discussed the terms of the merger, AVIDYN management answered
questions of the board regarding the merger agreement. During the meeting,
members of the board and management discussed major open issues concerning the
merger agreement.
-24-
On November 2, 2002, at a special meeting of the AVIDYN board of
directors, the board approved the final terms of the merger agreement. AVIDYN
and Fiserv signed the merger agreement after the board meeting. Both companies
issued press releases on November 4, 2002 announcing that they had reached an
agreement.
AVIDYN'S REASONS FOR THE MERGER
The healthcare information services industry in which AVIDYN operates
is highly competitive. Many of AVIDYN's competitors have greater financial,
technical and marketing resources than AVIDYN. In response to competitive
pressures, the information services industry has experienced a significant
amount of consolidation during the last several years. Also, many companies
throughout the information services industry have experienced significant
decreases in revenues and earnings growth.
AVIDYN's board of directors and management spent considerable time
considering the changing market conditions resulting from consolidation and
economic factors in order to evaluate potential strategies for AVIDYN to expand
its market share and remain viable in an increasingly competitive market.
AVIDYN's board of directors and management considered a number of different
options and ultimately determined that, in order to remain successful, AVIDYN's
best option to improve its competitive position and provide its stockholders
with appropriate returns was to pursue a business combination with another
company. Without a business partner, the board of directors does not believe
that AVIDYN could achieve growth, given the increased competition from larger
companies in the healthcare information services industry. Due to the foregoing
business issues, AVIDYN evaluated a number of potential business combinations
and began actively marketing ppoONE for sale during the first quarter of 2002.
See "The Merger - Background of the Merger."
AVIDYN's board of directors evaluated AVIDYN's future prospects as an
independent public company and determined that the stockholders of AVIDYN would
receive greater value in the merger than AVIDYN could create by pursuing its
existing operations. The board of directors believes that combining AVIDYN's
operations with Fiserv is a necessary step in order to maintain viability in the
healthcare information services industry. The board of directors has determined
that the benefits of the merger, including increased scale, broader client base
and a larger availability of information services, could not be replicated in a
more efficient manner. The board of directors believes the benefits of the
merger will be significant with clients demanding more integration of
information services, including the greater availability of services offered by
the combined company and Fiserv's capital resources, each of which will enable
it to better retain AVIDYN's existing clients. The board of directors also
believes the broad base of Fiserv's clients will allow AVIDYN to increase the
number and variance of its services at lower marginal costs, which will increase
the attractiveness of the combined company. For the foregoing reasons, the board
of directors believes the merger will allow the combined company to more
effectively compete in the healthcare information services industry.
The board of directors also considered the increasing costs of AVIDYN
operating as an independent public company as a factor supporting the merger.
AVIDYN is a smaller company after selling its third party administrator and
preferred provider organization operating subsidiaries in the first quarter of
2001. However, AVIDYN still has the same costs of compliance as a public company
that it had prior to that time. In addition, the SEC's and Nasdaq's new
corporate governance rules would substantially increase AVIDYN's annual costs of
compliance. Given the current size of AVIDYN's revenues, the board of directors
determined that the costs of compliance exceed any benefit to AVIDYN
stockholders of remaining public. The board of directors considered a number of
alternatives to the merger, such as going private or selling AVIDYN's operating
subsidiaries and liquidating the company. However, the board of directors
determined that none of the available alternatives provided as much value to
AVIDYN stockholders as would be provided by the merger.
-25-
AVIDYN is proposing the merger to offer to its stockholders what the
board of directors believes to be the best opportunity available to maximize the
value of the AVIDYN common stock. The board of directors believes that the
consideration to be received by AVIDYN stockholders for the AVIDYN common stock
described in "The Merger Agreement - Consideration to be Received in the Merger"
is preferable to AVIDYN attempting to achieve a greater future share price as an
independent publicly-traded company.
In reaching its determination to approve the merger agreement, the
merger and the other transactions contemplated by the merger agreement, the
AVIDYN board of directors spent considerable time exploring and analyzing the
advantages and disadvantages of the merger and the alternatives available to
AVIDYN, including remaining an independent company. In making its recommendation
to the AVIDYN stockholders, the board of directors considered the following
factors that supported the board's recommendation:
o The board of directors' belief that AVIDYN is unable to compete
effectively in the increasingly competitive healthcare information
services industry without combining with a larger organization with
more resources;
o The additional capital investment in new technology and processes that
would be required for AVIDYN's operating subsidiaries to experience
customer and revenue growth in the foreseeable future and to stay
competitive in the industry as an independent company, as compared to
the return on such an investment;
o The costs of remaining public, including the increased costs of
compliance related to the recent corporate governance rules proposed
or adopted by the SEC and Nasdaq, auditing fees and directors' and
officers' insurance;
o The financial condition, cash flows and results of operations of
AVIDYN and Fiserv, on both a historical and prospective basis;
o Strong historical performance of market prices of Fiserv common stock;
o The board of directors' belief that Fiserv's competitive position in
the industry will allow the combined company to retain existing AVIDYN
clients and to increase the combined company's client base;
o The potential reduction of AVIDYN's operating costs due to economies
of scale as a combined company;
o The board of directors' determination that the consideration to be
received by the AVIDYN stockholders, and the terms and conditions of
the merger agreement, are fair to, and in the best interests of,
AVIDYN and its stockholders;
o The opportunity for AVIDYN stockholders to participate after the
merger, as holders of Fiserv common stock, in a larger, more
diversified and more competitive company in the healthcare information
services industry, including the value that may be generated through
the combination of the companies;
o The absence of any other viable proposal to engage in a business
combination at the time the board of directors met to approve the
merger agreement and the merger;
-26-
o The board of directors' belief, after reviewing with management the
contacts and discussions that had occurred with potential business
partners, that the likelihood was low of receiving a proposal for a
business combination that would be superior to Fiserv's proposal;
o The fact that John Ward Hunt, the largest stockholder of AVIDYN,
entered into an agreement with Fiserv, whereby Mr. Hunt agreed to vote
his shares of AVIDYN common stock in favor of the merger agreement and
the merger. Because Mr. Hunt is receiving the same consideration per
share as the other stockholders, and Mr. Hunt is not receiving any
other special financial benefit as a result of the merger, the board
of directors believes that his support of the merger provides evidence
that the merger is favorable for all AVIDYN stockholders; and
o The fact that the merger has been structured to qualify as a tax-free
exchange to AVIDYN's stockholders.
The board of directors also considered the following potentially
negative factors concerning the merger:
o The risk that the number and value of the shares of Fiserv common
stock to be received by AVIDYN stockholders may increase or decrease
as a result of fluctuations in the price of Fiserv common stock and
AVIDYN's total assets and liabilities prior to the effective time of
the merger;
o The inability, subject to certain conditions, of AVIDYN to provide
information to, or enter into discussions with, other potential
business combination partners who might make an unsolicited proposal
to acquire AVIDYN;
o The significant costs required to complete the merger, especially in
light of the need to obtain a stockholder vote;
o The substantial management time and effort required to effectuate the
merger and the related disruption to AVIDYN's operations; and
o The fact that some directors and executive officers of AVIDYN have
interests in the merger that are different from, or in addition to,
those of AVIDYN stockholders generally as described under "The Merger
- Interests of AVIDYN Directors and Officers in the Merger."
The board of directors did not believe that the negative factors were
sufficient, either individually or collectively, to outweigh the potential
advantages of the merger. The foregoing discussion of the information and
factors considered by the board of directors is not intended to be exhaustive,
but it includes all material factors considered by the board. The board did not
attempt to quantify or otherwise assign relative weights to the specific factors
it considered, and it did not determine that any factor was of particular
importance. A determination of various weightings would, in the view of the
board of directors, be impractical. In addition, individual members of the board
may have given different weight to different factors. Rather, the board of
directors viewed its position and recommendations as being based on the totality
of the information presented to, and considered by, the board.
-27-
RECOMMENDATION OF THE AVIDYN BOARD OF DIRECTORS
After careful consideration, the AVIDYN board of directors unanimously
determined that the terms of the merger agreement and the merger are advisable
and fair to, and in the best interests of, AVIDYN and its stockholders.
Accordingly, the AVIDYN board of directors unanimously approved the merger
agreement and the merger, and unanimously recommends that the stockholders of
AVIDYN vote "FOR" the adoption of the merger agreement and approval of the
merger.
FISERV'S REASONS FOR THE MERGER
In reaching its determination to approve the merger agreement, the
merger and the other transactions contemplated thereby, the Fiserv board of
directors considered a number of factors, including the following:
o The board of directors' belief that the acquisition of AVIDYN will
expand the customer base of Fiserv's Trewit division;
o The board of directors' belief that Fiserv's financial stability and
reputation will encourage existing AVIDYN customers to direct more
work to AVIDYN;
o The board of directors' belief that AVIDYN provides high levels of
customer service and possesses proprietary technology, each of which
distinguishes AVIDYN in its markets; and
o The board of directors' determination that the terms and conditions of
the merger agreement, including the form and amount of consideration
and the representations, warranties, covenants and conditions
contained in the agreement, are in the best interests of Fiserv and
its stockholders.
None of the foregoing factors or groups of factors had particular
prominence in the decision of Fiserv's board of directors to approve the merger
agreement, the merger and the other transactions contemplated thereby, and none
was assigned any specific or relative weight.
ACCOUNTING TREATMENT
The merger will be accounted for as a purchase for financial reporting
and accounting purposes, under accounting principles generally accepted in the
United States of America. Under the purchase method of accounting, the purchase
price paid by Fiserv for AVIDYN, including direct costs of the merger, will be
allocated to the identifiable assets and liabilities of AVIDYN based upon their
fair value as of the effective date of the merger, with the excess of the
purchase price over the fair value of net identifiable assets being allocated to
goodwill. After consummation of the merger, the financial condition and results
of operations of AVIDYN will be included, but not separately reported, in the
consolidated financial statements of Fiserv.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
THIS SUMMARY IS OF A GENERAL NATURE AND IS INCLUDED SOLELY FOR
INFORMATIONAL PURPOSES. IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED AS
BEING, LEGAL OR TAX ADVICE. NO REPRESENTATION WITH RESPECT TO THE CONSEQUENCES
TO ANY PARTICULAR AVIDYN STOCKHOLDER IS MADE. AVIDYN STOCKHOLDERS ARE URGED TO
CONSULT WITH THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE
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MERGER TO THEM IN THEIR PARTICULAR SITUATIONS, INCLUDING THE EFFECTS OF U.S.
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
The following is a summary of the material anticipated U.S. federal
income tax consequences of the merger to AVIDYN stockholders who hold AVIDYN
common stock as a capital asset, that is, generally for investment. The summary
is based on the Internal Revenue Code, Treasury regulations issued under the
Internal Revenue Code, and administrative rulings and court decisions in effect
as of the date of this proxy statement/prospectus, all of which are subject to
change at any time, possibly with retroactive effect. This summary is not a
complete description of all of the tax consequences of the merger and, in
particular, may not address U.S. federal income tax considerations applicable to
AVIDYN stockholders subject to special treatment under U.S. federal income tax
law, including, for example, foreign persons, financial institutions, dealers in
securities, traders in securities who elect to apply a mark-to-market method of
accounting, insurance companies, tax-exempt entities, holders who acquired their
shares of AVIDYN common stock pursuant to the exercise of an employee stock
option or right or otherwise as compensation, and stockholders who hold AVIDYN
common stock as part of a "hedge," "straddle," "constructive sale" or
"conversion transaction." In addition, no information is provided in this proxy
statement/prospectus with respect to the tax consequences of the merger under
applicable foreign, state or local laws.
The parties have structured the merger to qualify as a reorganization
for U.S. federal income tax purposes. Assuming that the merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
for U.S. federal income tax purposes, the following will be the material federal
income tax consequences of the merger:
o neither Fiserv nor AVIDYN will recognize any gain or loss solely as a
result of the merger;
o AVIDYN stockholders who exchange their AVIDYN common stock for Fiserv
common stock pursuant to the merger will recognize no gain or loss,
except with respect to cash received in lieu of fractional shares of
Fiserv common stock;
o the aggregate tax basis of the full shares of Fiserv common stock
received and fractional shares deemed received by AVIDYN stockholders
will equal the aggregate tax basis of the shares of AVIDYN common
stock surrendered in exchange for the Fiserv common stock; and
o the holding period of the shares of Fiserv common stock received in
the merger, including fractional shares deemed received, will include
the holding period of the AVIDYN common stock surrendered in exchange
for the Fiserv common stock.
AVIDYN stockholders who receive cash in lieu of fractional shares of
Fiserv common stock in the merger generally will recognize a gain or loss equal
to the difference between the amount of cash received and their tax basis in
shares of AVIDYN common stock that is allocable to the fractional shares. The
gain or loss generally will be a capital gain or loss. In the case of an
individual stockholder, capital gains are subject to a maximum tax rate of 20%
if the individual held his or her AVIDYN common stock for more than one year at
the effective time of the merger. The deductibility of capital losses is subject
to limitations for both individuals and corporations.
Neither Fiserv nor AVIDYN can provide any assurance that the Internal
Revenue Service will not challenge the conclusions stated above. Neither Fiserv
nor AVIDYN intends to obtain a ruling from the
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Internal Revenue Service or an opinion of tax counsel with respect to the
merger. The summary above is not binding on the Internal Revenue Service or a
court.
REGULATORY MATTERS
There are no significant federal or state regulatory requirements with
which the parties must comply and no significant federal or state regulatory
approvals that the parties must obtain in connection with the merger.
INTERESTS OF AVIDYN DIRECTORS AND OFFICERS IN THE MERGER
In considering the recommendation of the AVIDYN board of directors with
respect to the merger agreement and merger, AVIDYN stockholders should be aware
that some directors and executive officers of AVIDYN have interests in the
merger that are different from, or in addition to, those of AVIDYN stockholders
generally. The AVIDYN board of directors was aware of these differing interests
and considered them, among other matters, in recommending that AVIDYN
stockholders adopt the merger agreement and approve the merger. These interests
are described below.
Agreements to Facilitate Merger
On November 2, 2002, John Ward Hunt, AVIDYN's chairman of the board,
WLH Family Investment, Ltd., an entity controlled by Mr. Hunt, and Burke,
Mayborn Company, Ltd., an entity controlled by Frank M. Burke, Jr., an AVIDYN
director, each entered into an agreement to facilitate the merger with Fiserv. A
copy of the form of agreement to facilitate the merger is attached as Annex B to
this proxy statement/prospectus and is incorporated by reference into this proxy
statement/prospectus. In the agreement, these stockholders agreed to vote all of
the shares of AVIDYN common stock that they own or for which they have voting
power at any meeting of AVIDYN stockholders, or any adjournment of the meeting,
and in any action by written consent of AVIDYN stockholders:
o in favor of the approval of the merger agreement, the merger and the
other transactions contemplated by the merger agreement; and
o against any action that could reasonably be expected to impede, delay
or discourage the merger, facilitate an acquisition of AVIDYN by a
party other than Fiserv or result in any breach of any of AVIDYN's
representations, warranties, covenants or agreements under the merger
agreement.
On the record date, these stockholders collectively beneficially owned
1,606,807 shares of AVIDYN common stock, representing approximately 44.4% of the
outstanding shares of AVIDYN common stock eligible to vote at the special
meeting. Mr. Hunt has pledged 1,000,000 shares of his AVIDYN common stock as
collateral for loans.
Each agreement provides that it will not be deemed to restrict or limit
the stockholder's right to act in his capacity as an officer or director of
AVIDYN consistent with his fiduciary obligations in such capacity as permitted
under the merger agreement.
Each agreement also provides that, until the earlier of effective time
of the merger or the termination of the merger agreement, the stockholder agrees
not to:
o solicit, initiate, consider, encourage or accept any proposals or
offers from any person:
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o relating to the acquisition of AVIDYN's capital stock or assets;
o to enter into a business combination with AVIDYN; or
o to enter into an extraordinary business transaction relating to
AVIDYN; or
o participate in any discussions or negotiations with, or furnish
information to, or otherwise cooperate with, assist or participate in,
facilitate or encourage any effort or attempt by, any person seeking
to do any of the foregoing.
Employment Agreements
The merger agreement provides that it is a condition to the closing of
the merger for Joseph Hensley, the president of AVIDYN, to enter into an
amendment to his employment agreement with AVIDYN. The amendment provides for an
initial annual salary equal to Mr. Hensley's current salary of $190,000 and
participation in Fiserv's stock option plan and the management incentive plan of
a Fiserv subsidiary. The amendment also provides for a grant by Fiserv to Mr.
Hensley of an option to purchase 7,000 shares of Fiserv common stock at an
exercise price equal to the market price of a share of Fiserv common stock on
the date of grant. The amendment provides that the initial term of the amended
employment agreement will be one year with automatic annual renewals. However,
Mr. Hensley's employment will be at will and may be terminated by either party
giving fifteen days' written notice. If Mr. Hensley is terminated without cause,
then he will be entitled to severance equal to his annual base salary in effect
at the time of termination. Mr. Hensley's existing employment agreement contains
customary covenants prohibiting solicitation of employees and competition with
AVIDYN for two years after Mr. Hensley's termination.
The merger agreement provides that it is a condition to the closing of
the merger for John Weymer, the president and chief executive officer of
ValueCHECK, to enter into an employment agreement with ValueCHECK. The
employment agreement provides for an initial annual salary equal to Mr. Weymer's
current salary of $160,000 and participation in Fiserv's stock option plan and
the management incentive plan of a Fiserv subsidiary. The employment agreement
also provides for a grant by Fiserv to Mr. Weymer of an option to purchase 3,000
shares of Fiserv common stock at an exercise price equal to the market price of
a share of Fiserv common stock on the date of grant. The initial term of the
employment agreement will be one year with automatic annual renewals. However,
Mr. Weymer's employment will be at will and may be terminated by either party by
giving fifteen days' written notice. If Mr. Weymer is terminated without cause,
then he will be entitled to severance equal to his annual base salary in effect
at the time of termination. The employment agreement contains customary
covenants prohibiting solicitation of employees and competition with ValueCHECK
for one year after Mr. Weymer's termination.
Employee Bonuses
On October 31, 2002, the compensation committee of the AVIDYN board of
directors granted bonuses to Mr. Hensley in the amount of $40,000 and Randall D.
Kurtz, AVIDYN's chief financial officer, in the amount of $5,000. These bonuses
were based on AVIDYN's financial performance in 2002, however, they are
contingent upon and payable at the closing of the merger.
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Indemnification
Fiserv and AVIDYN have agreed in the merger agreement to provide
directors and officers of AVIDYN indemnification to the fullest extent provided
by AVIDYN's certificate of incorporation and by-laws with respect to matters
occurring prior to the effective time of the merger, including the authorization
of the merger agreement and the transactions contemplated thereby until the
six-year anniversary date of the effective time of the merger.
APPRAISAL RIGHTS
The Delaware General Corporation Law grants appraisal rights in the
merger to the holders of AVIDYN common stock. Under Section 262 of the Delaware
General Corporation Law, AVIDYN stockholders may object to the merger and demand
in writing that AVIDYN pay to them the fair value of their shares of AVIDYN
common stock. Fair value takes into account all relevant factors but excludes
any appreciation or depreciation in anticipation of the applicable merger.
Stockholders who elect to exercise appraisal rights must comply with all of the
procedures set forth in Section 262 to preserve their appraisal rights. A copy
of Section 262 of the Delaware General Corporation Law, which sets forth the
appraisal rights, is attached as Annex C to this proxy statement/prospectus.
Section 262 sets forth the required procedure a stockholder requesting
appraisal must follow. Making sure that a stockholder actually perfects his or
her appraisal rights can be complicated. The procedural rules are specific and
must be followed completely. Failure to comply with the procedure set forth in
Section 262 may cause a termination of a stockholder's appraisal rights. The
following is only a summary of a stockholder's appraisal rights and the
procedure. The following information is qualified in its entirety by the
provisions of Section 262, a copy of which is attached as Annex C to this proxy
statement/prospectus. Please review Section 262 carefully for the complete
procedure. AVIDYN will not give a stockholder any notice other than as described
in this proxy statement/prospectus and as required by the Delaware General
Corporation Law.
An AVIDYN stockholder who wishes to exercise appraisal rights must
satisfy the provisions of Section 262 of the Delaware General Corporation Law.
Section 262 requires the following:
o A Stockholder Must Make a Written Demand for Appraisal. A stockholder
must deliver a written demand for appraisal to AVIDYN before the vote
on the merger agreement is taken at the special meeting. This written
demand for appraisal must be provided to AVIDYN separately from the
stockholder's proxy. In other words, a vote against the merger
agreement and the merger will not alone constitute a valid demand for
appraisal. Additionally, this written demand must reasonably inform
AVIDYN of the stockholder's identity and of the stockholder's
intention to demand the appraisal of the stockholder's shares of
AVIDYN common stock.
o A Stockholder Must Refrain from Voting for Adoption of the Merger
Agreement. A stockholder must not vote for approval of the merger
agreement. If the stockholder votes, by proxy or in person, in favor
of the merger agreement, this will terminate the right to appraisal.
The stockholder can also terminate the right to appraisal if the
stockholder returns a signed proxy and either fails to vote against
adoption of the merger agreement and approval of the merger or fails
to note that the stockholder is abstaining from voting. Appraisal
rights will be terminated even if the stockholder previously filed a
written demand for appraisal.
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o A Stockholder Must Continuously Hold AVIDYN Shares. A stockholder must
continuously hold his or her shares of AVIDYN common stock, from the
date the stockholder makes the demand for appraisal through the
effective date of the merger. If the stockholder is the record holder
of AVIDYN common stock on the date the written demand for appraisal is
made but thereafter transfers the shares prior to the effective date
of the merger, the stockholder will lose any right to appraisal in
respect of those shares. AVIDYN stockholders should read the
paragraphs below for more details on making a demand for appraisal.
A written demand for appraisal of AVIDYN stock is effective only if it
is signed by, or for, the stockholder of record who owns such shares at the time
the demand is made. The demand must be signed as the stockholder's name appears
on his, her or its stock certificate(s). If a stockholder is the beneficial
owner of AVIDYN common stock, but not the stockholder of record, then the
beneficial owner must have the stockholder of record sign a demand for
appraisal.
A stockholder who owns AVIDYN common stock in a fiduciary capacity,
such as a trustee, guardian or custodian, must disclose the fact that the
stockholder is signing the demand for appraisal in that capacity.
A stockholder who owns AVIDYN common stock with more than one person,
such as in a joint tenancy or tenancy in common, must have all of the owners
sign, or have signed for them, the demand for appraisal. An authorized agent,
which could include one or more of the joint owners, may sign the demand for
appraisal for a stockholder of record. However, the agent must expressly
disclose the identity of the stockholder of record and the fact that the agent
is signing the demand as that stockholder's agent.
An AVIDYN stockholder who elects to exercise appraisal rights should
mail or deliver a written demand to:
AVIDYN, Inc.
16980 Dallas Parkway, Suite 120
Dallas, Texas 75248
Attention: Secretary
It is important that AVIDYN receive all written demands for appraisal
before the vote concerning the merger agreement is taken at the special meeting.
As explained above, this written demand should be signed by, or on behalf of,
the stockholder of record. The written demand for appraisal should specify the
stockholder's name and mailing address, the number of shares of stock owned, and
that the stockholder is thereby demanding appraisal of that stockholder's
shares.
If a stockholder fails to comply with any of these conditions and the
merger becomes effective, then the stockholder will only be entitled to receive
the merger consideration provided in the merger agreement.
Written Notice. Within ten days after the effective date of the merger,
AVIDYN must given written notice that the merger has become effective to each
stockholder who has fully complied with the conditions of Section 262.
Petition with the Chancery Court. Within 120 days after the effective
date of the merger, either the surviving corporation or any stockholder who has
complied with the conditions of Section 262, may file a petition in the Delaware
Court of Chancery. This petition should request that the chancery court
determine the value of the shares of stock held by all of the stockholders who
are entitled to appraisal
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rights. If a stockholder intends to exercise rights of appraisal, then the
stockholder should file such a petition in the chancery court. AVIDYN has no
intention at this time to file such a petition. Because AVIDYN has no obligation
to file such a petition, if a stockholder does not file such a petition within
120 days after the effective date of the merger, then the stockholder will lose
his or her rights of appraisal.
Withdrawal of Demand. If a stockholder decides he or she no longer
wants appraisal rights, then the stockholder may withdraw a demand for appraisal
rights at any time within 60 days after the effective date of the merger. The
stockholder may also withdraw a demand for appraisal rights after 60 days after
the effective date of the merger, but only with the written consent of AVIDYN.
If a stockholder effectively withdraws a demand for appraisal rights, then the
stockholder will receive the merger consideration provided in the merger
agreement.
Request for Appraisal Rights Statement. If a stockholder complies with
the conditions of Section 262, then the stockholder will be entitled to receive
a statement from AVIDYN. This statement will set forth the number of shares that
have demanded appraisal rights, and the number of stockholders who own those
shares. In order to receive this statement, a stockholder must send a written
request to AVIDYN within 120 days after the effective date of the merger. After
the merger, AVIDYN has 10 days after receiving a request to mail the statement
to the stockholder.
Chancery Court Procedures. If a stockholder properly files a petition
for appraisal in the chancery court and delivers a copy to AVIDYN, then AVIDYN
will have 20 days to provide the chancery court with a list of the names and
addresses of all stockholders who have demanded appraisal rights and have not
reached an agreement with AVIDYN as to the value of their shares. The chancery
court will then send notices to all of the stockholders who have demanded
appraisal rights. If the chancery court thinks it is appropriate, it has the
power to conduct a hearing to determine whether the stockholders have fully
complied with Section 262 of the Delaware General Corporation Law and whether
they are entitled to appraisal rights under that section. The chancery court may
also require a stockholder to submit his or her stock certificates to the
Registry in Chancery so that it can note on the certificates that an appraisal
proceeding is pending. If a stockholder does not follow the chancery court's
directions, then the stockholder may be dismissed from the proceeding.
Appraisal of Shares. After the chancery court determines which
stockholders are entitled to appraisal rights, the chancery court will appraise
the shares of stock. To determine the fair value of the shares the chancery
court will consider all relevant factors except for any appreciation or
depreciation due to the anticipation or accomplishment of the merger. After the
chancery court determines the fair value of the shares, it will direct AVIDYN to
pay that value to the stockholders who are entitled to appraisal rights. The
chancery court can also direct AVIDYN to pay interest on the value if the
chancery court determines that the payment of interest is appropriate. In order
to receive the fair value of shares of AVIDYN common stock, a stockholder must
then surrender his or her AVIDYN stock certificates to AVIDYN.
The chancery court could determine that the fair value of a
stockholder's shares of AVIDYN stock is more than, the same as, or less than the
merger consideration. In other words, if a stockholder demands appraisal rights,
the stockholder could receive less consideration than the stockholder would
under the merger agreement.
Costs and Expenses of Appraisal Proceeding. The costs and expenses of
the appraisal proceeding may be assessed against AVIDYN and the stockholders
participating in the appraisal proceeding, as the chancery court deems equitable
under the circumstances. A stockholder can request that the chancery
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court determine the amount of interest, if any, AVIDYN should pay on the value
of common stock owned by stockholders entitled to the payment of interest. A
stockholder may also request that the chancery court allocate the expenses of
the appraisal action incurred by any stockholder pro rata against the value of
all of the shares entitled to appraisal.
Loss of Stockholder's Rights. If a stockholder demands appraisal
rights, from and after the effective date of the merger, the stockholder will
not be entitled to:
o vote his or her shares of AVIDYN stock, for any purpose, for which the
stockholder has demanded appraisal rights;
o receive payment of dividends or any other distribution with respect to
such shares, except for dividends or distributions, if any, that are
payable to holders of record as of a record date prior to the
effective time of the merger; or
o receive the payment of the consideration provided for in the merger
agreement, unless the stockholder properly withdraws the demand for
appraisal.
If no petition for an appraisal is filed within 120 days after the
effective date of the merger, a stockholder's right to an appraisal will cease.
A stockholder may withdraw a demand for appraisal and accept the merger
consideration by delivering to AVIDYN a written withdrawal of the demand, except
that:
o any attempt to withdraw a demand for appraisal made more than 60 days
after the effective date of the merger will require the written
approval of AVIDYN; and
o an appraisal proceeding in the chancery court cannot be dismissed
unless the chancery court approves such dismissal.
If a stockholder fails to comply strictly with the procedures described
above, then the stockholder will lose his or her appraisal rights. Consequently,
a stockholder who wishes to exercise appraisal rights is strongly urged to
consult a legal advisor before attempting to exercise appraisal rights.
If a stockholder does not vote to adopt the merger agreement and
approve the merger and fails to properly demand appraisal rights, or if for some
reason a stockholder's right to appraisal is withdrawn or lost, the
stockholder's shares will, upon surrender as described above at the effective
time of the merger, be converted into the right to receive the applicable number
of shares of Fiserv common stock as described above.
FEDERAL SECURITIES LAWS CONSEQUENCES
All shares of Fiserv stock received by AVIDYN stockholders in the
merger who are not affiliates of AVIDYN prior to the merger will be freely
transferable. However, shares of Fiserv stock received by persons who are deemed
to be affiliates of AVIDYN prior to the merger may be resold by them only in
transactions permitted by the resale provisions of Rule 145 promulgated under
the Securities Act of 1933, or Rule 144 promulgated under the Securities Act in
the case of such persons who become affiliates of Fiserv, or as otherwise
permitted under the Securities Act. Persons deemed to be affiliates of AVIDYN
are those individuals or entities that control, are controlled by, or are under
common control with, AVIDYN. Affiliates generally include executive officers and
directors of AVIDYN as well as certain principal stockholders of AVIDYN. This
proxy statement/prospectus does not cover any resales of Fiserv common stock
received by affiliates of AVIDYN in the merger.
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THE MERGER AGREEMENT
This section is a summary of the material terms and provisions of the
merger agreement, a copy of which is attached as Annex A to this proxy
statement/prospectus and incorporated by reference into this proxy
statement/prospectus. The following description is not intended to be a complete
description of all the terms of the merger agreement. You should refer to the
full text of the merger agreement for details of the merger and the terms and
conditions of the merger agreement. You should carefully read the entire merger
agreement for the precise terms of the merger agreement and other information
that may be important to you.
THE MERGER
The merger agreement provides that, at the effective time of the
merger, Fiserv Merger Sub, a wholly-owned subsidiary of Fiserv, will merge with
and into AVIDYN. AVIDYN will be the surviving corporation in the merger and will
become a wholly-owned subsidiary of Fiserv.
COMPLETION OF THE MERGER
The merger will become effective at 11:59 p.m. on the day the parties
file a certificate of merger with the Secretary of State of the State of
Delaware, unless Fiserv and AVIDYN agree to specify a later time in the
certificate of merger. The parties will file the certificate of merger with the
Delaware Secretary of State as soon as practicable after all conditions to the
merger are fulfilled or waived, unless the merger agreement has been terminated.
CONSIDERATION TO BE RECEIVED IN THE MERGER
At the effective time of the merger, each share of AVIDYN common stock
then issued and outstanding (other than shares subject to properly exercised
appraisal rights or owned by AVIDYN or Fiserv or their respective subsidiaries,
if any) will be converted into the right to receive a fraction of a share of
Fiserv common stock as determined based on a formula contained in the merger
agreement, which includes an adjustment based upon the net assets of AVIDYN at
the effective time of the merger as agreed upon by the parties. Under this
formula, holders of AVIDYN common stock will receive, in exchange for each of
their outstanding shares of AVIDYN common stock, a fraction of a share of Fiserv
common stock equal to:
o $10.5 million, divided by
o the number of shares of AVIDYN common stock outstanding immediately
before the effective time of the merger, divided by
o the average closing price for Fiserv common stock for the twenty
business days ending two business days prior to the effective time of
the merger;
provided that the $10.5 million amount used in the above calculation will be
increased or decreased by the difference between (1) the total assets of AVIDYN
less the total liabilities of AVIDYN at the effective time of the merger, and
(2) $6.8 million, unless the difference is less than $25,000, in which case no
adjustment to the $10.5 million amount will be made.
At least ten calendar days prior to the date on which the parties
anticipate the effective time of the merger will occur, AVIDYN will deliver to
Fiserv what it believes to be the balance sheet of AVIDYN as of the effective
time of the merger for purposes of determining the total assets of AVIDYN less
the total
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liabilities of AVIDYN in the formula above. The parties will then proceed in
good faith to finalize, and agree upon, such balance sheet. The balance sheet of
AVIDYN as of the effective time for purposes of this calculation will include,
to the extent unpaid as of the effective time of the merger, an accrual for all
of the costs associated with the merger incurred directly by AVIDYN, provided
that the parties shall agree on a pro rata share of costs for printing and
mailing of materials to AVIDYN stockholders. The bonuses to be paid to certain
executives of AVIDYN as described under "The Merger - Interests of AVIDYN
Directors and Officers in the Merger - Employee Bonuses" will also reduce
AVIDYN's net assets by $45,000.
Based on the average closing price for Fiserv common stock of $
for the twenty business days ending two business days prior to the date of this
proxy statement/prospectus and the 3,620,092 shares of AVIDYN common stock
outstanding on the record date, you would receive shares of Fiserv common
stock for each share of your AVIDYN common stock in the merger. This estimate
assumes no adjustment based upon the net assets of AVIDYN and is intended only
to illustrate the calculation of the merger consideration. This per share number
is not likely to be the actual number of shares of Fiserv common stock AVIDYN
stockholders will receive in the merger for each share of AVIDYN common stock
because the actual number of shares of Fiserv common stock issuable in the
merger will be a function of the closing sale price for Fiserv common stock for
the twenty business days ending two business days prior to the effective time of
the merger and AVIDYN's total assets less total liabilities at the effective
time of the merger.
Fiserv and AVIDYN cannot provide any assurance as to the market price
of Fiserv common stock at any time prior to the effective time of the merger or
the amount by which total assets of AVIDYN will exceed total liabilities of
AVIDYN for purposes of the formula above. Fiserv and AVIDYN encourage AVIDYN
stockholders to obtain current stock price quotations for Fiserv common stock
from a newspaper, the Internet or their broker. See "Risk Factors - The number
of shares of Fiserv common stock that AVIDYN stockholders will receive in the
merger will fluctuate due to the formula under the merger agreement."
The actual number of shares of Fiserv common stock issuable in the
merger will not be determined until after the close of business on the second
business day before the special meeting of AVIDYN stockholders. Fiserv and
AVIDYN expect to notify AVIDYN stockholders of the number of shares of Fiserv
common stock that will be received for shares of AVIDYN common stock pursuant to
the formula above before the date of the AVIDYN special meeting by issuing a
press release and filing it with the SEC. See "Risk Factors - The number of
shares of Fiserv common stock that AVIDYN stockholders will receive in the
merger will not be determined until shortly before the special meeting."
EXCHANGE OF CERTIFICATES
Promptly after the effective time of the merger, EquiServe Trust
Company, N.A., as exchange agent, will mail to each stockholder of AVIDYN a
letter of transmittal containing instructions for the surrender of certificates
representing shares of AVIDYN common stock in exchange for certificates
representing Fiserv common stock. HOLDERS OF AVIDYN COMMON STOCK SHOULD NOT
RETURN THEIR CERTIFICATES WITH THE ENCLOSED PROXY CARD AND SHOULD NOT SEND THEIR
CERTIFICATES UNTIL THEY RECEIVE A LETTER OF TRANSMITTAL FROM THE EXCHANGE AGENT.
AVIDYN stockholders who surrender their stock certificates, together
with a properly completed letter of transmittal, will receive stock certificates
representing the shares of Fiserv common stock into which their shares of AVIDYN
common stock were converted in the merger. After the merger, each certificate
previously representing shares of AVIDYN common stock will only represent the
right to
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receive the shares of Fiserv common stock into which AVIDYN common stock have
been converted (and cash in lieu of fractional shares).
FRACTIONAL SHARES
No fractional shares of Fiserv common stock will be issued in the
merger. Instead, Fiserv will deposit with EquiServe Trust Company, N.A., the
exchange agent, any cash payable in lieu of fractional shares of Fiserv common
stock. From the deposited funds, the exchange agent will pay each holder of
shares of AVIDYN common stock otherwise entitled to receive a fractional share
of Fiserv common stock a cash payment, without interest, in an amount equal to
the fractional share of Fiserv common stock to which the holder would otherwise
be entitled multiplied by the average closing price per share for Fiserv common
stock reported on the Nasdaq National Market for the twenty business days ending
two days prior to the effective time of the merger.
REPRESENTATIONS AND WARRANTIES
In the merger agreement, Fiserv and AVIDYN have each made
representations and warranties with respect to, among other things:
o corporate matters, including organization, corporate power and good
standing;
o capitalization of the parties;
o authorization, execution, delivery and enforceability of the merger
agreement;
o absence of violations of organizational documents or other obligations
as a result of the contemplated transactions;
o government approvals of the contemplated transactions;
o accuracy of information contained in reports filed with the SEC,
financial statements and the registration statement on Form S-4 of
which this proxy statement/prospectus is a part;
o absence of a material adverse effect;
o matters relating to the tax-free status of the merger; and
o brokers' and finders' fees with respect to the merger.
In addition, AVIDYN has made representations and warranties to Fiserv
with respect to, among other things:
o absence of certain changes or events;
o title to AVIDYN's properties and the absence of liens and
encumbrances;
o intellectual property;
o owned and leased real property;
o material contracts;
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o litigation;
o labor controversies;
o use of real property;
o environmental matters;
o accounting disclosure matters;
o compliance with laws;
o restrictions on business activities;
o employee benefits;
o insurance;
o bank accounts;
o minute and stock books;
o tax matters;
o related party transactions; and
o required approvals for the merger agreement and the merger.
CONDUCT OF AVIDYN'S BUSINESS PRIOR TO THE MERGER
AVIDYN has agreed that, except as otherwise contemplated by the
agreement, AVIDYN, including its subsidiaries, will conduct its operations in
its ordinary and usual course of business. AVIDYN has also agreed to use its
commercially reasonable efforts to preserve its business organization, retain
its officers and employees and maintain existing relationships with licensors,
suppliers, distributors, customers and others with whom it does business.
NO SOLICITATION
Except as described below in this section, AVIDYN has agreed that it
will not, and will cause its subsidiaries and their officers, directors,
employees, financial advisors, counsel, representatives and agents not to:
o directly or indirectly solicit, initiate, encourage or facilitate the
making of an acquisition proposal;
o participate or engage in or encourage negotiations or discussions
with, or provide any nonpublic information to, any person relating to
an acquisition proposal, or which may reasonably be expected to lead
to an acquisition proposal; or
o agree to or endorse any acquisition proposal.
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The merger agreement provides that these restrictions will not prohibit
AVIDYN or its board of directors from taking and disclosing to AVIDYN's
stockholders a position contemplated by Rule 14e-2 under the Securities Exchange
Act of 1934 or from making any disclosure to AVIDYN's stockholders that in the
good faith judgment of AVIDYN's board of directors is required by its fiduciary
duties to its stockholders or otherwise under applicable law.
An "acquisition proposal" is an offer or proposal for:
o a transaction or series of related transactions pursuant to which
o any person who does not currently own 15% or more of the
outstanding shares of AVIDYN common stock acquires 15% or more of
the outstanding shares of AVIDYN common stock, including a tender
offer or an exchange offer which, if completed, would result in
any such person acquiring 15% or more of the outstanding shares
of AVIDYN common stock; or
o any person who currently owns more than 15% of the outstanding
shares of AVIDYN common stock acquires 50% or more of the
outstanding shares of AVIDYN common stock, including a tender
offer or an exchange offer which, if completed, would result in
any such person acquiring 50% or more of the outstanding shares
of AVIDYN common stock; or
o a merger or other business combination involving AVIDYN pursuant to
which:
o any person who does not currently own 15% or more of the
outstanding shares of AVIDYN common stock acquires securities
representing 15% or more of the aggregate voting power of all
outstanding securities of the company surviving the merger or
business combination; or
o any person who currently owns more than 15% of the outstanding
shares of AVIDYN common stock acquires securities representing
50% or more of the aggregate voting power of all outstanding
securities of the company surviving the merger or business
combination; or
o any other transaction pursuant to which any person or entity acquires
control of assets, including the outstanding equity securities of any
AVIDYN subsidiary, having a fair market value equal to 15% or more of
the fair market value of all of the assets of AVIDYN immediately prior
to such a transaction.
However, the merger agreement does not prohibit AVIDYN's board of
directors from, prior to obtaining stockholder approval of the merger,
furnishing nonpublic information to or entering into discussions or negotiations
with any person that makes an unsolicited superior proposal if:
o in the good faith judgment of AVIDYN's board of directors, the board
is required by its fiduciary duties to its stockholders or otherwise
under applicable law to provide such information or enter into such
discussions or negotiations;
o prior to first furnishing nonpublic information to or entering into
substantive discussions and negotiations with such person, AVIDYN:
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o provides prior written notice to Fiserv of its intention to so
furnish information or enter into discussions or negotiations,
and
o receives from such person a confidentiality agreement on
specified terms; and
o AVIDYN provides Fiserv with all material nonpublic information
regarding AVIDYN that is to be provided to such person that Fiserv has
not previously received and an outline of the material terms of such
acquisition proposal and keeps Fiserv informed as to any changes or
modifications to such terms.
In addition, AVIDYN has agreed that it will notify Fiserv within two
business days if it or its representatives receives an acquisition proposal or
if any discussions or negotiations are sought to be initiated or continued
concerning an acquisition proposal.
A "superior proposal" is a bona fide acquisition proposal that the
AVIDYN board of directors has in good faith determined, after consultation with
its financial advisors and outside counsel, to be more favorable to AVIDYN
stockholders than the merger.
STOCKHOLDERS' MEETING
AVIDYN has agreed to use its reasonable efforts to convene the AVIDYN
special meeting as soon as practicable, but not earlier than twenty business
days after this proxy statement/prospectus is first mailed to AVIDYN
stockholders. Under the merger agreement, AVIDYN's board of directors is
required to recommend the adoption of the merger agreement and the approval of
the merger by the stockholders at the special meeting. The board may not
withdraw, or modify in a manner adverse to Fiserv, its recommendation unless:
o AVIDYN has complied with the nonsolicitation covenants of the merger
agreement described above in all material respects; and
o such withdrawal or modification is required under applicable law in
order for the board to comply with its fiduciary duties to AVIDYN's
stockholders.
NASDAQ LISTING
Fiserv has agreed to prepare and submit to Nasdaq a listing application
for the Fiserv common stock to be issued in the merger pursuant to the merger
agreement.
OFFICERS' AND DIRECTORS' INDEMNIFICATION
See "The Merger - Interests of AVIDYN Directors and Officers in the
Merger - Indemnification" for a description of the provisions of the merger
agreement relating to Fiserv's and AVIDYN's obligations following the merger
with respect to AVIDYN directors and officers.
MISCELLANEOUS
The merger agreement contains other covenants, including those relating
to access to information, consents and authorizations, employee matters, tax
matters, the preparation and distribution of this proxy statement/prospectus,
state takeover statutes, stockholder litigation, confidentiality, further
actions by the parties, mutual notification of specified matters and public
announcements regarding the merger.
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CONDITIONS TO COMPLETION OF THE MERGER
The respective obligations of Fiserv and AVIDYN to complete the merger
are subject to the satisfaction of the following conditions:
o there will not be any order, decree or injunction that prevents or
delays the completion of merger or materially limits Fiserv's ability
to exercise full rights of ownership of AVIDYN or its assets or
business;
o the holders of a majority of the outstanding shares of AVIDYN common
stock outstanding on the record date will have voted to adopt the
merger agreement and approve the merger;
o the registration statement on Form S-4, of which this proxy
statement/prospectus forms a part, will have been declared effective
under the Securities Act of 1933 and not be subject to any stop order,
and there will not be any proceedings to suspend the effectiveness of
the registration statement and Fiserv will have received all state
securities law or blue sky authorizations necessary for the merger;
o the shares of Fiserv common stock to be delivered pursuant to the
merger will have been authorized for listing on the Nasdaq National
Market; and
o Fiserv and AVIDYN will have agreed on the balance sheet of AVIDYN as
of the effective time of the merger.
The obligations of Fiserv to complete the merger are subject to the
satisfaction or waiver of the following conditions:
o the representations and warranties of AVIDYN will be true and correct
as of the effective time of the merger, except to the extent those
representations are specifically made as of another date, except where
the failure of those representations and warranties to be true and
correct have not had, and would not be reasonably likely to have, a
material adverse effect on AVIDYN;
o AVIDYN will have performed and complied in all material respects with
all covenants under the merger agreement to be performed or complied
with by AVIDYN prior to the effective time of the merger;
o Fiserv will have received all documents relating to AVIDYN and the
transactions contemplated by the merger agreement reasonably requested
by Fiserv;
o Fiserv will have received from AVIDYN's counsel an opinion regarding
specified matters;
o there will not be any action or proceeding arising by reason of the
merger which is reasonably likely to have a material adverse effect;
o AVIDYN will have delivered to Fiserv an affidavit regarding certain
tax matters;
o AVIDYN will have obtained certain consents or waivers to the merger;
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o certain employees of AVIDYN will have executed and delivered to Fiserv
employment agreements;
o Fiserv will have received a letter from each of AVIDYN's affiliates;
and
o Fiserv will have received copies of specified supporting documents.
The obligations of AVIDYN to complete the merger are subject to the
satisfaction or wavier of the following conditions:
o the representations and warranties of Fiserv will be true and correct
as of the effective time of the merger;
o Fiserv will have performed and complied in all material respects with
all covenants under the merger agreement to be performed or complied
with by Fiserv prior to the effective time of the merger;
o AVIDYN will have received all documents relating to Fiserv and the
transactions contemplated by the merger agreement reasonably requested
by AVIDYN;
o AVIDYN will have received from Fiserv's general counsel an opinion
regarding specified matters;
o there will not be any action or proceeding arising by reason of the
merger which is reasonably likely to have a material adverse effect;
and
o AVIDYN will have received copies of specified supporting documents.
TERMINATION
The merger agreement may be terminated at any time prior to the
effective time of the merger in any of the following circumstances:
o by mutual consent of all the parties;
o by either Fiserv or AVIDYN if:
o the merger is not completed by May 2, 2003, however, this
termination right is not available to any party whose failure to
fulfill any obligation under the merger agreement or material
breach of the merger agreement resulted in the failure to
complete the merger;
o any court or governmental body has issued a final nonappealable
order, decree or ruling permanently restraining or enjoining the
merger and the merger agreement, or a proceeding that seeks such
an order is pending on or after November 2, 2003; or
o the AVIDYN stockholders have failed to approve the merger
agreement and the merger at the special meeting;
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o by Fiserv if:
o the board of directors of AVIDYN has recommended to the
stockholders or entered into an agreement regarding a superior
proposal;
o the board of directors of AVIDYN has withdrawn or modified in a
manner adverse to Fiserv its recommendation of the merger; or
o AVIDYN has materially breached any of its covenants or
obligations under the merger agreement and Fiserv has not
materially breached its obligations under the merger agreement;
and
o by AVIDYN if:
o prior to the AVIDYN stockholders approving the merger agreement
and the merger, if AVIDYN has not materially breached its
nonsolicitation covenants of the merger agreement described
above, AVIDYN's board of directors has authorized AVIDYN to enter
into a binding agreement concerning a transaction that
constitutes a superior proposal and AVIDYN notifies Fiserv that
AVIDYN intends to enter into such a binding agreement and Fiserv
does not make, within five days of receiving the notice described
above, any offer that the AVIDYN board of directors reasonably
and in good faith determines, after consultation with its legal
and financial advisors, is at least as favorable to AVIDYN's
stockholders as the superior proposal; or
o Fiserv has materially breached any of its covenants or
obligations under the merger agreement and AVIDYN has not
materially breached its obligations under the merger agreement.
EFFECT OF TERMINATION
If the merger agreement is terminated, then the merger agreement will
be void and have no effect, without any liability on the part of any party,
except that no termination of the merger agreement will relieve any party from
liability for any breach of the merger agreement and AVIDYN may have to pay
Fiserv a termination fee as described below.
TERMINATION PAYMENT; EXPENSES
AVIDYN must pay Fiserv a termination fee of $400,000 plus all fees and
expenses of Fiserv incurred in connection with the preparation of the
transactions contemplated by the merger agreement if the merger agreement is
terminated:
o by Fiserv because the board of directors of AVIDYN has recommended to
the stockholders or entered into an agreement regarding a superior
proposal;
o by Fiserv because the board of directors of AVIDYN has withdrawn or
modified in a manner adverse to Fiserv its recommendation of the
merger;
o by AVIDYN if, prior to the AVIDYN stockholders approving the merger
agreement and the merger, AVIDYN has not materially breached its
nonsolicitation covenant described above, AVIDYN's board of directors
has authorized AVIDYN to enter into a binding agreement concerning a
transaction that constitutes a superior proposal and AVIDYN
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notifies Fiserv that AVIDYN intends to enter into such a binding
agreement and Fiserv does not make, within five days of receiving the
notice described above, any offer that the AVIDYN board of directors
reasonably and in good faith determines, after consultation with its
legal and financial advisors, is at least as favorable to AVIDYN's
stockholders as the superior proposal; or
o by Fiserv because AVIDYN has materially breached any of its covenants
or obligations under the merger agreement and Fiserv has not
materially breached its obligations under the merger agreement and
within twelve months AVIDYN has entered into a transaction in
connection with an acquisition proposal.
AMENDMENT AND WAIVER
The merger agreement may not be amended except by an instrument in
writing signed by all of the parties.
At any time prior to the effective time of the merger, any party to the
merger agreement may:
o extend the time for performance of any of the obligations or other
acts of the other parties;
o waive any inaccuracies in the representations and warranties in the
merger agreement or any document delivered pursuant to the merger
agreement; or
o waive compliance with any agreement or condition contained in the
merger agreement, to the extent permitted by law.
Any such extension or waiver will only be valid if it is set forth in a
written instrument signed by the party to be bound.
INDEMNIFICATION AGREEMENT
As an inducement to Fiserv to enter the merger agreement, John Ward
Hunt, AVIDYN's chairman of the board, entered into an indemnification agreement
with Fiserv on November 2, 2002, pursuant to which Mr. Hunt agreed to indemnify
Fiserv against any liabilities, losses, damages, claims, costs and expenses,
including attorneys' and court fees, resulting from:
o the repurchase by AVIDYN of any of its capital stock prior to the date
of the indemnification agreement; and
o any breach of AVIDYN's representations in the merger agreement
regarding the absence of undisclosed liabilities.
Fiserv will not be entitled to recover indemnification for a breach of
AVIDYN's representations regarding the absence of undisclosed liabilities unless
Mr. Hunt has received written notice of the claim or of any pending or
threatened claim within six months after the effective time of the merger.
Fiserv will be entitled to recover indemnification with respect to repurchases
by AVIDYN of its capital stock until the expiration of all applicable statutes
of limitation pertaining to these claims. Fiserv may not seek indemnification
from Mr. Hunt until the aggregate amount of all Fiserv losses exceeds $300,000,
after which Mr. Hunt will be liable for all such losses, including the initial
$300,000. However, in no event will Mr. Hunt be obligated to make
indemnification payments to Fiserv in excess of $2,500,000.
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DESCRIPTION OF FISERV CAPITAL STOCK
As a result of the conversion of shares of AVIDYN common stock to
shares of Fiserv common stock at the completion of the merger, AVIDYN
stockholders will become Fiserv stockholders. Your rights as a Fiserv
stockholder will be governed by Wisconsin law and Fiserv's articles of
incorporation and by-laws. The following summarizes the material terms of
Fiserv's capital stock but does not purport to be complete, and is subject in
all respects to Wisconsin law, Fiserv's articles of incorporation and by-laws
and Fiserv's rights agreement. See "Comparison of Stockholder Rights" and "Where
You Can Find More Information."
FISERV COMMON STOCK
Fiserv is authorized to issue 300,000,000 shares of Fiserv common
stock. As of , 2002, shares of Fiserv common stock were issued
and outstanding, held by approximately holders of record.
Holders of Fiserv common stock are entitled to one vote per share on
all matters properly submitted to a vote of stockholders, subject to Section
180.1150 of the Wisconsin Business Corporation Law. See "Comparison of
Stockholder Rights - Anti-Takeover Provisions - Control Share Acquisitions."
Fiserv stockholders do not have the right to cumulate their votes in the
election of directors. For that reason, holders of a majority of the shares of
Fiserv common stock entitled to vote in any election of directors may elect all
of the directors standing for election.
Fiserv common stock does not entitle its holders to any preemptive
rights, redemption privileges, sinking fund privileges or conversion rights. In
the event of liquidation, holders of Fiserv common stock would be entitled to
receive proportionately any assets legally available for distribution to
stockholders of Fiserv with respect to shares held by them, subject to any prior
rights of any Fiserv preferred stock then outstanding. See " - Fiserv Preferred
Stock."
Fiserv stockholders are entitled to receive the dividends or
distributions that the Fiserv board of directors may declare out of funds
legally available for these payments. The payment of distributions to
stockholders is subject to any prior rights of preferred stock then outstanding.
See " - Fiserv Preferred Stock."
All of the issued and outstanding shares of Fiserv common stock are,
and upon the issuance of Fiserv common stock in connection with the merger will
be, validly issued, fully paid and non-assessable except for possible assessment
in limited circumstances required by Wisconsin law. See "Comparison of
Stockholder Rights - Assessability."
FISERV PREFERRED STOCK
Fiserv is authorized to issue 25,000,000 shares of Fiserv preferred
stock. As of the date of this document, no shares of Fiserv preferred stock were
outstanding.
The Fiserv board of directors is authorized to issue preferred stock in
one or more series and, with respect to each series, to fix:
o the voting rights, if any;
o the designations, preferences, limitations and relative rights with
respect to the rate of dividend;
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o the price, the terms and conditions of redemption;
o the amounts payable in the event of voluntary or involuntary
liquidation;
o the sinking fund provisions; and
o the conversion privileges, if any.
The Fiserv board of directors may also assign to any series of preferred stock
any other terms, conditions, restrictions, limitations, rights and privileges
that it deems appropriate in accordance with Wisconsin law.
In connection with the issuance of the rights described below, the
Fiserv board of directors has authorized a series of preferred stock designated
as series A junior participating preferred stock. Shares of series A junior
participating preferred stock purchasable upon the exercise of the rights will
not be redeemable. Each share of series A junior participating preferred stock
will be entitled to an aggregate dividend of 225 times the dividend Fiserv
declares per share of its common stock. In the event of Fiserv's liquidation,
the holders of the shares of series A junior participating preferred stock will
be entitled to a minimum aggregate payment of $1.00 per share but will be
entitled to an aggregate payment of 225 times the payment Fiserv makes per share
of its common stock. Each share of series A junior participating preferred stock
will have 225 votes, voting together with Fiserv common stock. Finally, in the
event of any merger, consolidation or other transaction in which shares of
Fiserv common stock are exchanged, each share of series A junior participating
preferred stock will be entitled to receive 225 times the amount received per
share of Fiserv common stock. These rights are protected by customary
antidilution provisions. There are no shares of series A junior participating
preferred stock currently outstanding.
The issuance of any series of Fiserv preferred stock, including the
series A junior participating preferred stock, may have an adverse effect on the
rights of holders of Fiserv common stock, and could decrease the amount of
earnings and assets available for distribution to holders of Fiserv common
stock. In addition, any issuance of Fiserv preferred stock could have the effect
of delaying, deferring or preventing a change in control.
FISERV RIGHTS PLAN
Fiserv has entered into a rights agreement pursuant to which each
outstanding share of its common stock, including the shares AVIDYN stockholders
will receive in the merger, has attached one right to purchase shares of Fiserv
series A junior participating preferred stock. Each share of common stock
subsequently issued by Fiserv prior to the expiration of the rights agreement
will likewise have attached one right. Under circumstances described below, the
rights will entitle the holder thereof to purchase additional shares of Fiserv
common stock. In this proxy statement/prospectus, unless the context otherwise
requires, all references to our common stock include the accompanying rights.
Currently, the rights are not exercisable and trade with Fiserv common
stock. If the rights become exercisable, each right, unless held by a person or
group which beneficially owns more than 15% of Fiserv outstanding common stock
in the aggregate, will initially entitle the holder to purchase 4/9 of one
one-hundredth of a share of Fiserv series A junior participating preferred stock
at a purchase price of $250, subject to adjustment. The rights will only become
exercisable if a person or group has acquired, or announced an intention to
acquire, 15% or more of Fiserv outstanding common stock in the aggregate. Under
some circumstances, including the existence of a 15% acquiring party, each
holder of a right, other than the acquiring party, will be entitled to purchase
at the right's then-current exercise price, shares of Fiserv common stock having
a market value of two times the exercise price. If another corporation
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acquires Fiserv after a party acquires 15% or more of Fiserv common stock, each
holder of a right will be entitled to receive the acquiring corporation's common
shares having a market value of two times the exercise price. The rights
generally may be redeemed at a price of $.01 until a party acquires 15% or more
of Fiserv common stock, and after that time may be exchanged for one share of
Fiserv common stock per right until a party acquires 50% or more of Fiserv
common stock. The rights initially will expire on February 23, 2008. The rights
do not have voting or dividend rights and, until they become exercisable, have
no dilutive effect on Fiserv earnings.
TRANSFER AGENT, REGISTRAR AND EXCHANGE AGENT
EquiServe Trust Company, N.A. is the transfer agent and registrar for the
Fiserv common stock. EquiServe is also the exchange agent for the merger.
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COMPARISON OF STOCKHOLDER RIGHTS
The rights of Fiserv stockholders are currently governed by the
Wisconsin Business Corporation Law, or WBCL, and Fiserv's articles of
incorporation and by-laws. The rights of AVIDYN stockholders are currently
governed by the Delaware General Corporation Law, or DGCL, and AVIDYN's
certificate of incorporation and by-laws. Upon completion of the merger, the
stockholders of AVIDYN will become stockholders of Fiserv, and the WBCL and
Fiserv's articles of incorporation and by-laws will govern the rights of former
AVIDYN stockholders.
The following description summarizes the material differences between
the rights of holders of Fiserv common stock and the rights of holders of AVIDYN
common stock. This discussion is not, and does not purport to be, complete or to
identify all differences that may, under given situations, be material to
stockholders. Stockholders should read carefully the relevant portions of the
WBCL, Fiserv's articles of incorporation and by-laws, the DGCL and AVIDYN's
certificate of incorporation and by-laws. Although the WBCL uses the term
"shareholder" to reference holders of stock of a Wisconsin corporation, for
consistency, those holders are referred to in this proxy statement/prospectus as
"stockholders."
AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
Authorized Capital The authorized capital stock of AVIDYN consists The authorized capital stock of Fiserv consists
Stock: of 8,000,000 shares of common stock and 4,000,000 of 300,000,000 shares of common stock and
shares of preferred stock. 25,000,000 shares of preferred stock.
Number of Directors: AVIDYN's by-laws provide that the board of Fiserv's by-laws provides that the board of
directors has the authority to fix the number of directors may determine the number of directors,
directors. The AVIDYN board of directors but the number of directors may not be less than
currently consists of three directors. three, nor more than nine. The Fiserv board of
directors currently consists of eight directors.
Classification of AVIDYN's certificate of incorporation and by-laws Fiserv's articles of incorporation and by-laws
Directors: provide for one class of directors, with each provide that the Fiserv board of directors is
director elected for a one-year term. divided into three classes of directors, with
each class being elected to a staggered
three-year term.
Cumulative Voting: Under the DGCL, cumulative voting is not Under the WBCL, unless otherwise provided for in
available unless provided for in a corporation's a corporation's articles of incorporation,
certificate of incorporation. AVIDYN's stockholders do not have cumulative voting
certificate of incorporation expressly prohibits rights. Fiserv's articles of incorporation do
cumulative voting. not provide for cumulative voting.
Filling Vacancies on Under the DGCL, unless otherwise provided in a Under the WBCL, unless a corporation's articles
the Board: corporation's certificate of incorporation or of incorporation provide otherwise, which
by-laws, vacancies and newly created Fiserv's articles of incorporation do not, a
directorships resulting from an increase in the vacancy occurring on the board of directors may
authorized number of directors may be filled by a be filled by stockholders or the directors
majority of the directors then in remaining in office. Fiserv's by-
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AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
office, although less than a quorum, or by the laws provide that vacancies and newly created
sole remaining director. AVIDYN's by-laws directorships may be filled by a majority of the
provide that vacancies and newly created directors then in office or a majority of the
directorships may be filled by a majority vote outstanding shares of Fiserv common stock.
of the directors then in office, though less than
a quorum, by a sole remaining director or by the
requisite vote of stockholders.
Removal of Directors: The DGCL provides that directors may be removed Under the WBCL, stockholders may generally
with or without cause by the holders of a remove a director with or without cause if the
majority of the shares entitled to vote for the number of votes cast to remove the director
election of directors, unless the certificate of exceeds the number of votes cast not to remove
incorporation provides otherwise. AVIDYN's the director unless a corporation's articles of
certificate of incorporation does not contain a incorporation or by-laws provide otherwise.
provision restricting the ability to remove Fiserv's articles of incorporation and by-laws
directors. do not contain any such provisions.
Nominations of AVIDYN's by-laws do not contain any procedures Under Fiserv's by-laws, nominations for the
Directors for regarding nominations for the board of directors. board of directors may be made by the board of
Election: directors or any stockholder who complies with
the notice procedures in the by-laws. These
procedures require that a stockholder deliver
the nomination to the chairman of the board
or the president of Fiserv not less than 14
nor more than 60 days before the meeting. However,
if less than 14 days' notice of the meeting is
given to stockholders, then the nomination must
be delivered to the chairman of the board or the
president not later than the close of business
on the fourth day following the day on which
the notice of meeting was mailed.
Anti-Takeover Section 203 of the DGCL prohibits business Sections 180.1140 to 180.1145 of the WBCL
Provisions - Business combinations between a Delaware corporation and restrict a broad range of business combinations
Combinations: an "interested stockholder" for a period of three between a Wisconsin corporation and an
years unless specified conditions are met. The "interested stockholder" for a period of three
DGCL defines a "business combination" to include years unless specified conditions are met. The
the sale of assets, merger and other related WBCL defines a "business combination" as
party transactions. An "interested stockholder" including a merger or a share exchange, sale of
is a person who owns 15% of the outstanding stock assets, issuance of stock or rights to purchase
of a corporation. During the three-year period stock and other related party transactions. An
after a person becomes an interested stockholder "interested stockholder" is a person who
in a Delaware corporation, the DGCL prohibits a beneficially owns, directly or indirectly, 10%
business combination with the interested of the outstanding voting stock of a corporation
stockholder unless: or who is an affiliate or associate of the
corporation and beneficially owned
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AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
o the board of directors approved the 10% of the voting stock within the last three
business combination or the acquisition of years. During the initial three-year period after a
the stock before the acquisition date, person becomes an interested stockholder in a
Wisconsin corporation, with some exceptions, the
o upon completion of the transaction that WBCL prohibits a business combination with the
resulted in the interested stockholder interested stockholder unless the corporation's
becoming an interested stockholder, the board of directors approved the business
interested stockholder owned at least 85% of combination or the acquisition of the stock
the voting stock of the corporation prior to the acquisition date. Following this
outstanding at the time the transaction three-year period, the WBCL also prohibits a
commenced, business combination with an interested
stockholder unless:
o following the transaction in which the
person became an interested stockholder, the o the board of directors approved the
business combination is approved by the business combination or the acquisition of
board of directors of the corporation and by the stock prior to the acquisition date,
a vote of two-thirds of the disinterested
voting stock, or o the business combination is approved by
a majority of the outstanding voting stock
o the corporation's certificate of not owned by the interested stockholder,
incorporation expressly provides that
Section 203 of the DGCL does not apply o the consideration to be received by
(AVIDYN's certificate of incorporation does stockholders meets the "fair price" and
not contain such a provision). form requirements of the statute, or
o the business combination is of a type
specifically excluded from the coverage of
the statute.
In addition, stockholders of Wisconsin corporations
have appraisal rights in business combinations that
they may not have in transactions not involving an
interested stockholder. See "--Dissenters' Rights
and Appraisal Rights."
Sections 180.1130 to 180.1134 of the WBCL govern
mergers or share exchanges between public
Wisconsin corporations and significant
stockholders, and sales of all or substantially
all of the assets of public Wisconsin corporations
to significant stockholders. These transactions
must be approved by 80% of all stockholders and
two-thirds of stockholders other than the
significant stockholder, unless the stockholders
receive a statutory fair price.
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AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
This is intended to insure that stockholders in a
second step merger, share exchange or asset sale
receive at least what stockholders received in the
first step. Section 180.1130 of the WBCL defines a
"significant stockholder" as the beneficial owner
of 10% or more of the voting power of the
outstanding voting shares, or an affiliate of the
Wisconsin corporation that beneficially owned 10%
or more of the voting power of the then
outstanding shares within the last two years.
Anti-Takeover The DGCL does not contain similar provisions. Section 180.1150 of the WBCL provides that in
Provisions - Control particular circumstances the voting power of
Share Acquisitions: shares of a public Wisconsin corporation held by
any person in excess of 20% of the voting power
is limited to 10% of the voting power these excess
shares would otherwise have. Full voting power may
be restored if a majority of the voting power of
shares represented at a meeting, including those
held by the party seeking restoration, are voted
in favor of the restoration.
Section 180.1134 of the WBCL requires approval
for some transactions in the context of a tender
offer or similar action for more than 5% of any class
of a Wisconsin corporation's stock. Stockholder
approval is required for the acquisition of more
than 5% of the corporation's stock at a price above
market value from any person who holds more than 3%
of the voting shares and has held the shares for
less than two years, unless the corporation makes an
equal offer to acquire all shares. Stockholder
approval is also required for the sale or option
of assets that amount to at least 10% of the
market value of the corporation, but this requirement
does not apply if the corporation has at least three
directors who are not officers or employees of the
corporation, or a majority of the disinterested
directors chooses to opt out of this provision.
-52-
AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
Stockholder Rights AVIDYN does not have a stockholder rights plan. As discussed in "Description of Fiserv Capital
Plan: Stock - Fiserv Rights Plan," each share of
Fiserv common stock has attached to it one
right issued pursuant to the Fiserv rights plan.
Stockholder Action Under the DGCL, unless otherwise provided in the Under the WBCL, any action that may be taken by
Without a Meeting: certificate of incorporation, any action that may stockholders at a meeting may be taken without a
be taken by stockholders at a meeting may be meeting only if a consent is signed by all of
taken without a meeting if written consents are the stockholders entitled to vote with respect
obtained from the holders of outstanding stock to the subject matter, unless the articles of
having the minimum number of votes that would be incorporation provide otherwise. Fiserv's
necessary to take the action at a meeting at articles of incorporation provide that any
which all shares entitled to vote were present action may be taken by stockholders without a
and voted. AVIDYN's certificate of incorporation meeting if a consent is signed by the holders of
does not limit this statutory provision. outstanding stock having the minimum number of
votes that would be necessary to take the action
at a meeting at which all shares entitled to
vote were present and voted.
Special Meetings of Under the DGCL, special meetings of stockholders Under the WBCL, a special meeting of
Stockholders: may be called by the board of directors or by stockholders may be called by the board of
persons authorized by the certificate of directors, by any person authorized by the
incorporation or by-laws. AVIDYN's by-laws articles of incorporation or by-laws or upon a
provide that a special meeting of stockholders written demand of the holders of 10% of the
may be called by the AVIDYN board of directors, votes entitled to be cast at the meeting.
the chairman of the board, the chief executive Fiserv's by-laws provide that a special meeting
officer or the president. of stockholders may be called by the chairman of
the board or the president or by order of the
board of directors and must be called by the
president or secretary upon written request of
stockholders holding at least 10% of the votes
entitled to be cast at the meeting.
Submission of AVIDYN's by-laws do not contain any procedures Under Fiserv's by-laws, a stockholder may bring
Stockholder Proposals: regarding stockholder proposals. before a meeting of stockholders, business with a
proper purpose, provided that the stockholder
timely delivers notice of the proposal to Fiserv.
A notice will be deemed to be timely if Fiserv's
secretary receives such notice at least 30 days prior
to the scheduled date of an annual meeting or not
later than the fifteenth business day after notice
of a special meeting is first publicized. The
notice must set forth:
o a brief description of the business to
be
-53-
AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
brought and reasons for conducting
such business;
o the name and address of the stockholder;
o a representation that the stockholder
is a holder of record of Fiserv stock
entitled to vote at the meeting; and
o any material interest of the
stockholder in such business.
Stockholder Vote The DGCL requires that a merger or consolidation Under the WBCL, a corporation may sell, lease,
Required for or a sale, lease or exchange of substantially all exchange or otherwise dispose of substantially
Significant the assets of a corporation be approved by the all of its property if the disposition is
Transactions: holders of a majority of the outstanding stock approved by a majority of all votes entitled to
entitled to vote. be cast. A merger or share exchange plan must
be approved by each voting group entitled to
vote separately on the plan by a majority of all
votes entitled to be cast on the plan by that
voting group.
Dividends: Under the DGCL, a corporation may pay dividends Under the WBCL, the board of directors of a
and repurchase stock out of surplus and any net corporation may authorize, and the corporation
profits for the fiscal year in which the dividend may pay, dividends or make other distributions
was declared or for the preceding fiscal year to its stockholders (including the repurchase of
provided that no payment may reduce capital below its shares) unless:
the amount of capital represented by all classes
of shares having a preference upon the o after the distribution the corporation
distribution of assets. would not be able to pay its debts as they
become due in the usual course of business,
or
o the corporation's total assets after
the distribution would be less than the sum
of its total liabilities plus, unless the
articles of incorporation provide
otherwise, the amount that would be needed,
if the corporation were to be dissolved at
the time of the distribution, to satisfy
the preferential rights upon dissolution of
stockholders whose preferential rights are
superior to those receiving the
distribution.
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AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
Dissenters' Rights and Under the DGCL, a stockholder of a corporation Under the WBCL, a stockholder of a corporation
Appraisal Rights: who has not voted for a merger or consolidation is generally entitled to receive payment of the
is entitled to an appraisal of the fair value of fair value of his, her or its stock if the
the stockholder's shares of stock. Under the stockholder dissents from transactions including
DGCL, appraisal rights are not available in the a proposed merger, share exchange or a sale of
case of a sale of substantially all of the assets substantially all of the assets of the
of a corporation. Appraisal rights also are not corporation. However, dissenters' rights
available for stockholders if the shares of the generally are not available to holders of
corporation are listed on a national securities shares, such as shares of Fiserv common stock,
exchange or designated as a national market that are registered on a national securities
system security on an interdealer quotation exchange or quoted on Nasdaq, unless the
system by the NASD or are held of record by more corporation's articles of incorporation provide
than 2,000 stockholders. However, a stockholder otherwise or the transaction is a business
does have appraisal rights with respect to these combination as described under " - Anti-Takeover
shares if the stockholder is required to accept Provisions - Business Combinations." A merger
in the merger or consolidation anything except that does not alter the contract rights of the
shares of stock of the corporation surviving or shares and does not change or convert the shares
resulting from the merger or consolidation, is not a business combination for this purpose.
shares of stock of any other corporation that Under the WBCL, the presence or absence of
will be either listed on a national securities dissenters' rights for a voting group affects
exchange or designated as a national market the right of that group to vote on amendments to
system security on an interdealer quotation a corporation's articles of incorporation. If a
system or that are held by more than 2,000 voting group would have dissenters' rights as a
stockholders, or cash in lieu of fractional result of the amendment, then a majority of the
shares or any combination of these items. votes entitled to be cast by that voting group
is required for adoption of the amendment.
Director and Officer The DGCL does not contain a comparable provision. Under the WBCL, in discharging his or her duties
Discretion: to the corporation and in determining what he or
she believes to be in the best interests of the
corporation, a director or officer may, in addition
to considering the effects of any action on
stockholders, consider the effects of the action
on employees, suppliers, customers, the communities
in which the corporation operates and any other
factors that the director or officer considers
pertinent.
Indemnification and Under the DGCL, a corporation may generally Under the WBCL, a corporation must indemnify its
Director Liability: indemnify its officers, directors, employees and directors and officers against liability
agents against expenses including attorneys' incurred by the director or officer in a
fees, judgments, fines and amounts paid in proceeding to which the indemnified person was a
settlement of any proceeding, other than party because he or she is a director or
proceedings by or in the right of the officer, unless liability was incurred because a
corporation, if they acted in good faith and in a director or officer breached or failed to
manner they reasonably believed to be in or not perform a duty that he or she owes to the
opposed to the best corporation and the breach
-55-
AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
interests of the corporation and, with or failure constitutes any of the following:
respect to any criminal action or proceeding,
had no reasonable cause to believe their o a willful failure to deal fairly with the
conduct was unlawful. A similar standard is corporation or its stockholders in connection
applicable in proceedings by or in the right with a matter in which the director or officer
of the corporation, except that has a material conflict of interest,
indemnification may be made only for expenses
including attorneys' fees and, if the person o a violation of criminal law, unless the
seeking indemnification has been adjudicated director or officer had reasonable cause to
liable, then only to the extent an believe that his or her conduct was lawful or
appropriate court deems the indemnification no reasonable cause to believe that his or her
for such expenses fair and reasonable. The conduct was unlawful,
DGCL provides that to the extent such persons
have been successful in the defense of any o a transaction from which the director or officer
proceeding, they must be indemnified by the derived an improper personal benefit, or
corporation against expenses actually and
reasonably incurred in connection therewith. o willful misconduct.
AVIDYN's certificate of incorporation
provides that the directors and officers of Fiserv's by-laws provide for indemnification and
AVIDYN will be indemnified to the fullest advancement of expenses to directors and officers
extent permitted by the DGCL, which right to to the fullest extent permitted by the WBCL. This
indemnification is not exclusive of any other provision is not exclusive of any other rights to
right which any person may have or acquire indemnification or the advancement of expenses to
under the AVIDYN by-laws, agreement, vote of which a director or officer may be entitled to under
stockholders or otherwise. The DGCL permits a any written agreement, resolution of directors, vote
corporation to adopt a provision in its of stockholders, by law or otherwise.
certificate of incorporation that limits the
monetary liability of the corporation's In addition, under the WBCL, a director of Fiserv
directors for a breach of the director's is not liable to the corporation, its stockholders or
fiduciary duty of care. AVIDYN's certificate any person asserting rights on behalf of the
of incorporation does not contain such a corporation or its stockholders for liabilities
provision. Under the DGCL, a corporation may arising from a breach of, or failure to perform, any
not limit a director's monetary liability duty resulting solely from his or her status as a
for: director, unless the person asserting liability
proves that the breach or failure to perform
o any breach of the director's duty of constitutes any of the circumstances under which
loyalty to the corporation or its indemnification would not be provided.
stockholders,
o an act or omission not in good faith or
involving intentional misconduct or a
knowing violation of law,
o the payment of unlawful dividends or
unlawful stock repurchases or
redemptions, or
o any transaction in which the director
received an improper personal benefit.
-56-
AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
Assessability: Shares of stock of Delaware corporations are Fiserv common stock is subject to possible
nonassessable under the DGCL. The DGCL does not assessment in some circumstances. Section
impose personal liability on holders of AVIDYN 180.0622(2)(b) of the WBCL provides that
common stock for debts owing to employees or stockholders of Wisconsin corporations are
otherwise. personally liable up to an amount equal to the
par value of shares owned by them, and
up to the consideration for which shares
without par value were issued, for debts
owing to employees of the corporation
for services performed for such
corporation, but not exceeding six
months' service in any one case. The
liability imposed by the predecessor to
this statute was interpreted in a trial
court decision to extend to the original
issue price for shares, rather than the
stated par value. Although affirmed by
the Wisconsin Supreme Court, the case
offers no precedential value due to the
fact that the decision was affirmed by
an equally divided court. Fiserv common
stock is not otherwise subject to call
or assessment.
Amendments to Charter Under the DGCL, a corporation's certificate of Under the WBCL, the board of directors may
Documents: incorporation may generally be amended only if propose amendments to a corporation's articles
approved by a majority of the outstanding stock of incorporation and can establish conditions
entitled to vote. for the amendment. The WBCL provides that
amendments to articles of incorporation,
except in some limited circumstances,
must be approved by the stockholders in
addition to approval by the board of
directors. The vote of stockholders
needed to approve an amendment depends
in part on the rights of the voting
groups entitled to vote separately on
the amendment. If a voting group would
have dissenters' rights as a result of
the amendment, then a majority of the
votes entitled to be cast by that voting
group is required for adoption of the
amendment. Otherwise, the WBCL provides
that, if a quorum exists, the amendment
will be adopted if the votes cast within
the voting group favoring the action
exceed the votes cast opposing the
action, unless the articles of
incorporation or the WBCL require a
greater number of affirmative votes.
Amendment of By-laws: The DGCL provides that the stockholders may The WBCL provides that a corporation's
adopt, amend or repeal bylaws of a stockholders or board of directors may adopt,
-57-
AVIDYN Stockholder Rights Fiserv Stockholder Rights
------------------------- -------------------------
corporation. The DGCL further provides amend or repeal the corporation's by-laws.
that the board of directors may adopt, amend However, the corporation's articles of
or repeal by-laws of a Delaware corporation incorporation may reserve that power exclusively
if such power is conferred in the certificate to the stockholders. In addition, the
of incorporation. AVIDYN's certificate of stockholders in adopting, amending or repealing
incorporation contains a provision conferring a particular by-law may provide that the board
this power on the board of directors. AVIDYN's of directors may not amend, repeal or readopt
by-laws provide that the directors or that by-law. Fiserv's by-laws provide that they
stockholders may adopt, amend or repeal any of may be altered, amended or repealed by the board
AVIDYN's by-laws at any meeting by majority vote. of directors or by a vote of holders of at
least 80% of the issued and outstanding Fiserv
stock.
-58-
LEGAL MATTERS
The validity of the issuance of the Fiserv common stock offered by this
proxy statement/ prospectus will be passed upon by Charles W. Sprague, Esq.,
Executive Vice President, General Counsel, Chief Administrative Officer and
Secretary of Fiserv. As of November 1, 2002, Mr. Sprague owned 13,024 shares of
Fiserv common stock and 134,913 vested but unexercised options to purchase
shares of Fiserv common stock.
EXPERTS
The consolidated financial statements and the related financial
statement schedules of Fiserv incorporated in this proxy statement/prospectus by
reference from Fiserv's Annual Report on Form 10-K for the year ended December
31, 2001 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of said firm given upon their
authority as experts in accounting and auditing.
The consolidated financial statements of AVIDYN incorporated in this
proxy statement/prospectus by reference from AVIDYN's Annual Report on Form 10-K
for the year ended December 31, 2001, have been so incorporated in reliance on
the report of Grant Thornton LLP, independent certified public accountants,
given on the authority of said firm as experts in auditing and accounting.
STOCKHOLDER PROPOSALS
AVIDYN will hold a 2003 annual meeting of stockholders only if the
merger is not completed before the time of such a meeting. The deadline for
submission of stockholder proposals for inclusion in AVIDYN's proxy materials
for the 2003 annual meeting of stockholders is January 1, 2003.
-59-
WHERE YOU CAN FIND MORE INFORMATION
Fiserv and AVIDYN each file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission. Fiserv has also filed a registration statement on Form S-4 to
register with the SEC the Fiserv common stock to be issued to AVIDYN
stockholders in the merger. This proxy statement/prospectus is a part of that
registration statement and constitutes a prospectus of Fiserv in addition to
being a proxy statement of AVIDYN. As allowed by SEC rules, this proxy
statement/prospectus does not contain all the information you can find in
Fiserv's registration statement or the exhibits to the registration statement.
You may read and copy the registration statement and any reports, statements or
other information that Fiserv and AVIDYN file with the SEC at the SEC's public
reference rooms at 450 Fifth Street, N.W., Washington, D.C. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference room. These
SEC filings are also available to the public on the Internet at a website
maintained by the SEC located at http://www.sec.gov.
The SEC allows Fiserv and AVIDYN to "incorporate by reference" the
information they file with the SEC, which means they can disclose important
information to you by referring to those documents. The information incorporated
by reference is an important part of this proxy statement/prospectus. The most
recent information filed with the SEC will automatically update and supersede
information contained in this proxy statement/prospectus. Fiserv and AVIDYN
incorporate by reference the following documents previously filed with the SEC
set forth below and any future filings with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the date of the
AVIDYN special meeting. These documents contain important business and financial
information about Fiserv and AVIDYN that is not included in or delivered with
this proxy statement/prospectus.
Fiserv SEC Filings (File No. 0-14948) Period
------------------------------------- ------
Annual Report on Form 10-K Year ended December 31, 2001
Quarterly Reports on Form 10-Q Quarters ended March 31, 2002,
June 30, 2002 and September 30,
2002
Current Reports on Form 8-K July 24, 2002 and September 18,
2002
Definitive Proxy Statement on
Schedule 14A for Annual Meeting of
Stockholders held on March 28, 2002
The description of Fiserv's common
stock contained in its Registration
Statement on Form 8-A dated September
3, 1986, including any amendment or
reports filed for the purpose of
updating such description.
The description of Fiserv's preferred
stock purchase rights contained in
its Registration Statement dated
February 23, 1998, including any
amendment or reports filed for the
purpose of updating such description.
-60-
AVIDYN SEC Filings (File No. 1-11922) Period
------------------------------------- ------
Annual Report on Form 10-KSB Year ended December 31, 2001
Quarterly Reports on Form 10-QSB Quarters ended March 31, 2002,
June 30, 2002 and September 30,
2002
Current Reports on Form 8-K August 7, 2002 and November 2,
2002
Definitive Proxy Statement on Schedule 14A
for Annual Meeting of Stockholders held
on May 10, 2002
Soliciting Material filed with the SEC
under Rule 14a-12 under the Securities
Exchange Act on November 4, 2002
Fiserv has supplied all information contained or incorporated by
reference in this proxy statement/prospectus relating to Fiserv and AVIDYN has
supplied all such information relating to AVIDYN.
If you are a Fiserv or AVIDYN stockholder, you may have been sent some
of the documents incorporated by reference, but you can obtain any of them
through Fiserv or AVIDYN, the SEC or the SEC's Internet web site as described
above. Documents incorporated by reference are available from Fiserv or AVIDYN
without charge, excluding all exhibits, except that if an exhibit has been
specifically incorporated by reference in this proxy statement/prospectus, the
exhibit will also be provided without charge. Stockholders may obtain documents
incorporated by reference in this proxy statement/prospectus by requesting them
in writing or by telephone from the appropriate company at the following
addresses:
Fiserv, Inc. AVIDYN, Inc.
255 Fiserv Drive 16980 Dallas Parkway, Suite 120
Brookfield, Wisconsin 53045 Dallas, Texas 75248
Telephone: (262) 879-5000 Telephone: (972) 447-6447
Attention: Charles W. Sprague, Attention: Stephanie L. McVay
Secretary Secretary
If you would like to request documents from us, please do so by ,
2002 to receive them before the AVIDYN special meeting.
You should rely only on the information contained or incorporated by
reference in this proxy statement/prospectus. Fiserv and AVIDYN have not
authorized anyone to provide you with information that is different from what is
contained in this proxy statement/prospectus. This proxy statement/prospectus is
dated , 2002. You should not assume that the information contained in
this proxy statement/prospectus is accurate as of any date other than that date.
Neither the mailing of this proxy statement/prospectus to stockholders nor the
issuance of Fiserv common stock in the merger creates any implication to the
contrary.
-61-
Annex A
================================================================================
AGREEMENT AND PLAN OF MERGER
Among
FISERV, INC.,
FISERV MERGER SUB, INC.,
And
AVIDYN, INC.
Dated as of November 2, 2002
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I MERGER.............................................................2
SECTION 1.01 The Merger...................................................2
SECTION 1.02 Certificate of Merger........................................2
SECTION 1.03 Effective Time of the Merger.................................3
ARTICLE II DIRECTORS AND OFFICERS............................................3
SECTION 2.01 Directors....................................................3
SECTION 2.02 Officers.....................................................3
ARTICLE III CONVERSION OF SHARES.............................................3
SECTION 3.01 Conversion of Shares.........................................3
SECTION 3.02 Stock Options and Warrants...................................4
SECTION 3.03 Exchange of Company Common Stock.............................4
SECTION 3.04 Exchange of Fiserv Sub Common Stock..........................6
SECTION 3.05 Dissenting Shares............................................7
SECTION 3.06 Closing......................................................7
SECTION 3.07 Tax Free Exchange...........................................7
ARTICLE IV CERTAIN EFFECTS OF THE MERGER.....................................8
SECTION 4.01 Effect of the Merger.........................................8
SECTION 4.02 Further Assurances...........................................8
ARTICLE V REPRESENTATIONS AND WARRANTIES.....................................8
SECTION 5.01 Representations and Warranties of the Company................8
SECTION 5.02 Representations and Warranties of Fiserv,
Fiserv Solutions and Fiserv Sub.............................32
ARTICLE VI ADDITIONAL COVENANTS AND AGREEMENTS..............................37
SECTION 6.01 Conduct of Business.........................................37
SECTION 6.02 Access to Information by Fiserv, Fiserv Solutions
and Fiserv Sub..............................................37
SECTION 6.03 Consents and Authorizations.................................37
SECTION 6.04 Non-Assignable Licenses, Leases and Contracts...............38
SECTION 6.05 Employee Matters............................................38
SECTION 6.06 Taxes.......................................................38
SECTION 6.07 Solicitation of Alternative Transaction.....................38
SECTION 6.08 Proxy Material; Registration Statement......................40
SECTION 6.09 Stockholders' Meetings......................................42
SECTION 6.10 State Takeover Statutes.....................................42
SECTION 6.11 Affiliates..................................................43
SECTION 6.12 Stockholder Litigation......................................43
i
Table of Contents
(continued)
Page
SECTION 6.13 Nasdaq Listing. Fiserv shall prepare and submit to
Nasdaq a listing application for the Fiserv Common Stock to be
issued in the Merger pursuant to Article III of this Agreement..........43
SECTION 6.14 Confidentiality.............................................43
SECTION 6.15 Further Actions.............................................43
SECTION 6.16 Officers' and Directors' Indemnification....................43
SECTION 6.17 Notification of Certain Matters.............................44
SECTION 6.18 Public Announcements........................................44
SECTION 6.19 Voting of Shares............................................44
ARTICLE VII CONDITIONS PRECEDENT............................................44
SECTION 7.01 Conditions to Obligations of Fiserv, Fiserv Solutions,
Fiserv Sub, and the Company.............................................44
SECTION 7.02 Conditions Precedent to the Obligations of Fiserv, Fiserv
Solutions and Fiserv Sub................................................45
SECTION 7.03 Conditions Precedent to the Obligations of the Company......47
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER.................................48
SECTION 8.01 Termination.................................................48
SECTION 8.02 Effect of Termination.......................................50
SECTION 8.03 Amendment...................................................51
SECTION 8.04 Extension; Waiver...........................................51
ARTICLE IX MISCELLANEOUS....................................................51
SECTION 9.01 Expenses, Etc...............................................51
SECTION 9.02 Execution in Counterparts...................................51
SECTION 9.03 Notices.....................................................51
SECTION 9.04 Entire Agreement............................................53
SECTION 9.05 Applicable Law..............................................53
SECTION 9.06 Binding Effect; Benefits....................................53
SECTION 9.07 Investigation; Survival of Representations and Warranties...53
SECTION 9.08 Specific Performance........................................53
SECTION 9.09 Assignability...............................................54
SECTION 9.10 Prevailing Party............................................54
SECTION 9.11 Invalid Provisions..........................................54
SECTION 9.12 Interpretation..............................................54
ii
INDEX TO EXHIBITS
Exhibit Description
------- -----------
A Certificate of Merger
B Form of FIRPTA Affidavit of the Company
C Form of Agreement to Facilitate Merger
D Form of Opinion of Counsel to the Company
E Required Consents
F Form of Indemnity Agreement
G Form of Opinion of Counsel to Fiserv and Fiserv Sub
INDEX TO SCHEDULES
Schedule Description
-------- -----------
I Disclosure Schedule
iii
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 2, 2002, among FISERV,
INC., a Wisconsin corporation ("Fiserv"), FISERV MERGER SUB, INC., a Delaware
corporation ("Fiserv Sub") and a wholly-owned subsidiary of Fiserv, and AVIDYN,
INC., a Delaware corporation (the "Company").
W I T N E S E T H :
WHEREAS, Fiserv and Fiserv Sub desire that Fiserv Sub merge with and
into the Company and, to realize the benefits thereof, the Company also desires
that Fiserv Sub merge with and into the Company, upon the terms and subject to
the conditions set forth herein and in accordance with the Business Corporation
Law of the state of Delaware ("Delaware Law"), and that the outstanding shares
of Common Stock, par value $.01 per share, of the Company ("Company Common
Stock"), excluding any such shares held in the treasury of the Company, be
converted upon such merger (the "Merger") into the right to shares of Common
Stock, $.01 par value, of Fiserv ("Fiserv Common Stock") as is provided herein
(Fiserv Sub and the Company being hereinafter sometimes referred to as the
"Constituent Corporations" and the Company, after the Merger as the surviving
entity, being hereinafter sometimes referred to as the "Surviving Corporation");
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, and in order
to set forth the terms and conditions of the Merger and the mode of carrying the
same into effect, the parties hereby agree as follows:
ARTICLE I
MERGER
SECTION 1.01 THE MERGER. At the Effective Time (as hereinafter
defined), Fiserv Sub shall be merged with and into the Company on the terms and
conditions hereinafter set forth as permitted by and in accordance with Delaware
Law. Thereupon, the separate existence of Fiserv Sub shall cease, and the
Company, as the Surviving Corporation, shall continue to exist under and be
governed by Delaware Law and its Certificate of Incorporation and By-laws as in
effect at the Effective Time shall remain unchanged until further amended in
accordance with the provisions thereof and applicable law.
SECTION 1.02 CERTIFICATE OF MERGER. As soon as practicable following
fulfillment or waiver of the conditions specified in Article VII hereof, and
provided that this Agreement has not been terminated and abandoned pursuant to
Article VIII hereof, the Company and Fiserv Sub will cause the Certificate of
Merger in substantially the form of Exhibit A attached hereto (the "Certificate
of Merger") to be executed and filed with the Secretary of State of the State of
Delaware as provided in Delaware Law. The purpose of the Surviving Corporation
shall be to engage in any and all business activities in which a corporation is
permitted to engage in accordance with Delaware Law.
A-2
SECTION 1.03 EFFECTIVE TIME OF THE MERGER. The Merger shall become
effective at 11:59 p.m. on the day of the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware or at such other date or
time thereafter as the parties may agree. The date and time of such
effectiveness is herein sometimes referred to as the "Effective Time".
ARTICLE II
DIRECTORS AND OFFICERS
SECTION 2.01 DIRECTORS. From and after the Effective Time, the members
of the Board of Directors of the Surviving Corporation shall consist of the
members of the Board of Directors of Fiserv Sub (as constituted immediately
prior to the Effective Time) until changed in accordance with its Certificate of
Incorporation and By-laws and applicable law.
SECTION 2.02 OFFICERS. From and after the Effective Time, the officers
of the Surviving Corporation shall consist of the officers of the Company (as
constituted immediately prior to the Effective Time) until changed in accordance
with its Certificate of Incorporation and By-laws and applicable law.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.01 CONVERSION OF SHARES.
(a) Upon the Effective Time, each share of Company Common
Stock issued and outstanding immediately prior to the Effective Time
(other than any shares of Company Common Stock to be canceled pursuant
to Section 3.01(b) and any Dissenting Shares (as hereinafter defined))
shall, without any further action on the part of Fiserv or Fiserv Sub,
on the one hand, or the Company or its stockholders, on the other hand,
be converted into the right to receive such number of shares of Fiserv
Common Stock as shall equal the quotient of (A) (I) the Target Value
(as hereinafter defined) divided by (II) the number of shares of
Company Common Stock outstanding immediately before the Effective Time
divided by (B) a number which is equal to the average closing price per
share for Fiserv Common Stock as reported on the National Market System
by the National Association of Securities Dealers, Inc. Automated
Quotations (as reported in The Wall Street Journal) for the twenty
business days ending two business days prior to the Effective Time
(such shares of Fiserv Common Stock together with any cash payable
pursuant to Section 3.03(f) the "Merger Consideration"). "Target Value"
means the amount of Ten Million Five Hundred Thousand and No/100
Dollars ($10,500,000.00) increased or decreased by the amount, if any,
between i) the total assets of the Company as of the Effective Time
less the total liabilities of the Company as of the Effective Time, as
determined by reference to the Effective Time Balance Sheet, and ii)
Six Million Eight Hundred Thousand Dollars ($6,800,000); provided,
however that no such adjustment shall be made if the adjustment would
result in increasing or decreasing the Target Value by less then
$25,000. "Effective Time Balance Sheet" means a balance sheet of the
Company as of the Effective Time prepared in accordance with GAAP
consistently applied in accordance with past practices, which balance
sheet shall include,
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to the extent unpaid as of the Effective Time, an accrual for all
Company Merger Costs, it being understood that the Effective Time
Balance Sheet will be prepared prior to the Effective Time and may
therefore may be based, to the extent required, on good faith estimates
by Fiserv, Trewit Inc., a wholly owned subsidiary of Fiserv ("Trewit")
and the Company. "Company Merger Costs" shall mean the aggregate of all
accounting (which shall not include regular audit fees), legal,
printing, filing, financial advisory (including finders' or investment
banking fees), costs of preparing, filing and distributing the Proxy
Statement (as hereinafter defined) and conducting the Company Special
Meeting (as hereinafter defined) and other fees and expenses of the
Company and Taxes (as hereinafter defined) of the Company, in each case
incurred or anticipated to be incurred in connection with the
transactions contemplated hereby. Such Company Merger Costs shall only
include those costs incurred by the Company directly, or to the extent
they involve the printing and mailing of materials to shareholders on
behalf of both the Company and Fiserv, a prorata share of such costs as
the Parties shall agree at Closing.
(b) All shares of Company Common Stock owned by the Company or
any direct or indirect wholly-owned subsidiary of the Company or Fiserv
or Fiserv Sub or any other subsidiary of Fiserv immediately prior to
the Effective Time shall be cancelled and extinguished without any
conversion thereof.
(c) Each share of common stock of Fiserv Sub, par value $.01
per share ("Fiserv Sub Common Stock"), issued and outstanding
immediately prior to the Effective Time shall be converted into one
share of the common stock of the Surviving Corporation, par value $.01
per share ("Surviving Corporation Common Stock").
(d) Each share of any other class of capital stock of the
Company (other than Company Common Stock) shall be canceled without
payment of any consideration therefor and without any conversion
thereof.
SECTION 3.02 Intentionally Omitted.
SECTION 3.03 EXCHANGE OF COMPANY COMMON STOCK.
(a) Promptly after the Effective Time, Fiserv shall cause
Fiserv's stock transfer agent or such other person as Fiserv may
appoint to act as exchange agent (the "Exchange Agent") to mail to each
holder of record (other than Fiserv, Fiserv Sub or any other subsidiary
of Fiserv or the Company) of a certificate or certificates that
immediately prior to the Effective Time represented outstanding shares
of Company Common Stock ("Company Certificates") (i) a form letter of
transmittal (which shall specify that delivery shall be effective, and
risk of loss and title to the Company Certificate(s) shall pass, only
upon delivery of the Company Certificate(s) to the Exchange Agent) and
(ii) instructions for such holder's use in effecting the surrender of
the Company Certificates in exchange for certificates representing
shares of Fiserv Common Stock.
(b) As soon as practicable after the Effective Time, the
Exchange Agent shall distribute to holders of shares of Company Common
Stock, upon surrender to the
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Exchange Agent of one or more Company Certificates for cancellation,
together with a duly-executed letter of transmittal, (i) one or more
Fiserv certificates representing the number of whole shares of Fiserv
Common Stock into which the shares represented by the Company
Certificate(s) shall have been converted pursuant to Section 3.01, and
(ii) a bank check in the amount of cash into which the shares
represented by the Company Certificate(s) shall have been converted
pursuant to Section 3.03(f) (relating to fractional shares), and the
Company Certificate(s) so surrendered shall be canceled. In the event
of a transfer of ownership of Company Common Stock that is not
registered in the transfer records of the Company, it shall be a
condition to the issuance of shares of Fiserv Common Stock that the
Company Certificate(s) so surrendered shall be properly endorsed or be
otherwise in proper form for transfer and that such transferee shall
(i) pay to the Exchange Agent any transfer or other taxes required, or
(ii) establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not payable.
(c) Holders of Company Common Stock will be entitled to any
dividends or other distributions pertaining to the Fiserv Common Stock
received in exchange therefor that become payable to persons who are
holders of record of Fiserv Common Stock as of a record date on the
same date as or after the Effective Time, but only after they have
surrendered their Company Certificates for exchange. Subject to the
effect, if any, of applicable law, the Exchange Agent shall receive,
hold, and remit any such dividends or other distributions to each such
record holder entitled thereto, without interest, at the time that such
Company Certificates are surrendered to the Exchange Agent for
exchange. Holders of Company Common Stock will not be entitled,
however, to dividends or other distributions that become payable before
or after the Effective Time to persons who were holders of record of
Fiserv Common Stock as of a record date that is prior to the Effective
Time.
(d) All shares of Fiserv Common Stock issued upon the
surrender for exchange of Company Common Stock in accordance with the
terms hereof (including any cash paid for fractional shares pursuant to
Section 3.03(f) hereof) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Company Common
Stock.
(e) After the Effective Time, there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Company Certificates representing such shares are presented to the
Surviving Corporation, they shall be canceled and exchanged as provided
in this Article III. As of the Effective Time, the holders of Company
Certificates representing shares of Company Common Stock shall cease to
have any rights as stockholders of the Company, except such rights, if
any, as they may have pursuant to Delaware Law. Except as provided
above, until such Company Certificates are surrendered for exchange,
each such Company Certificate shall, after the Effective Time,
represent for all purposes only the right to receive the number of
whole shares of Fiserv Common Stock into which the shares of Company
Common Stock shall have been converted pursuant to the Merger as
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provided in Section 3.01 hereof and the right to receive the cash value
of any fraction of a share of Fiserv Common Stock as provided in
Section 3.03(f) hereof.
(f) No fractional shares of Fiserv Common Stock and no
certificates or scrip therefor, or other evidence of ownership thereof,
shall be issued upon the surrender for exchange of Company
Certificates, no dividend or other distribution of Fiserv shall relate
to any fractional share, and such fractional share interests shall not
entitle the owner thereof to vote or to any rights of a stockholder of
Fiserv. All fractional shares of Fiserv Common Stock to which a holder
of Company Common Stock immediately prior to the Effective Time would
otherwise be entitled, at the Effective Time, shall be aggregated if
and to the extent multiple Company Certificates of such holder are
submitted together to the Exchange Agent. If a fractional share results
from such aggregation, then (in lieu of such fractional share) the
Exchange Agent shall pay to each holder of shares of Company Common
Stock who otherwise would be entitled to receive such fractional share
of Fiserv Common Stock an amount of cash (without interest) determined
by multiplying (i) the fractional share of Fiserv Common Stock to which
such holder would otherwise be entitled, by (ii) the amount which is
equal to the average closing price per share for Fiserv Common Stock as
reported on the National Market System by the National Association of
Securities Dealers, Inc. Automated Quotations (as reported in The Wall
Street Journal) for the twenty business days ending two business days
prior to the Effective Time. Fiserv will make available to the Exchange
Agent any cash necessary for this purpose.
(g) In the event any Company Certificate shall have been lost,
stolen, or destroyed, the Exchange Agent shall issue in exchange for
such lost, stolen, or destroyed Company Certificate, upon the making of
an affidavit of that fact by the holder thereof, such shares of Fiserv
Common Stock and cash for fractional shares, if any, as may be required
pursuant to Section 3.01 and 3.03(f); provided, however, that Fiserv
may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed Company
Certificates to deliver a bond in such sum as Fiserv may direct as
indemnity against any claim that may be made against Fiserv or the
Exchange Agent with respect to such Company Certificates alleged to
have been lost, stolen, or destroyed.
(h) Notwithstanding anything to the contrary in this Section
3.03, none of Fiserv or the Surviving Corporation shall be liable to a
holder of shares of Company Common Stock for any amount properly paid
to a public official pursuant to any applicable abandoned property,
escheat or similar law.
SECTION 3.04 EXCHANGE OF FISERV SUB COMMON STOCK. From and after the
Effective Time, each outstanding certificate previously representing shares of
Fiserv Sub Common Stock shall be deemed for all purposes to evidence ownership
of and to represent the number of shares of Surviving Corporation Common Stock
into which such shares of Fiserv Sub Common Stock shall have been converted.
Promptly after the Effective Time, the Surviving Corporation shall issue to
Fiserv a stock certificate or certificates representing such shares of Surviving
Corporation Common Stock in exchange for the certificate or certificates that
formerly represented shares of Fiserv Sub Common Stock, which shall be canceled.
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SECTION 3.05 DISSENTING SHARES.
(a) NO CONVERSION. Notwithstanding any provision of this
Agreement to the contrary, any shares of Company Common Stock held by a
stockholder who has demanded and perfected appraisal rights for such
shares in accordance with Delaware Law, including ss.262 of the
Delaware Law, and who has not effectively withdrawn or lost such
appraisal rights ("Dissenting Shares") shall not be converted into or
represent a right to receive the Merger Consideration pursuant to
Section 3.01(a) and 3.03(f), but the holder thereof shall only be
entitled to such rights as are granted by Delaware Law.
(b) WITHDRAWAL OR LOSS OF DISSENTERS' RIGHTS. Notwithstanding
the provisions of subsection (a), if any holder of shares of Company
Common Stock who is otherwise entitled to exercise appraisal rights
under Delaware Law shall effectively withdraw or lose (through failure
to perfect or otherwise) such appraisal rights, then, as of the later
of the Effective Time and the occurrence of such event, such
stockholder's shares shall automatically be converted into and
represent only the right to receive the Merger Consideration, without
interest thereon, upon surrender of the certificate representing such
shares.
(c) NOTICE, ETC. The Company shall give Fiserv and Trewit (i)
prompt notice of any written demands for the exercise of appraisal
rights in respect of any shares of Company Common Stock, withdrawals of
such demands, and any other instruments served pursuant to Delaware Law
(including instruments concerning appraisal or dissenters' rights) and
received by the Company and (ii) the opportunity to participate in all
negotiations and proceedings with respect to such demands. The Company
shall not, except with the prior written consent of Fiserv and Trewit,
voluntarily make any payment with respect to any demands for the
exercise of appraisal rights in respect of any shares of Company Common
Stock or offer to settle or settle any such demands.
SECTION 3.06 CLOSING. Evidence of the fulfillment or waiver of the
conditions set forth in Article VII hereof (the "Closing") shall be provided by
the parties hereto to each other (a) at the offices of AVIDYN, Inc. located at
16980 Dallas Parkway, Suite 120, Dallas, Texas at 10 a.m., local time, on the
business day on which the last of the conditions set forth in Article VII hereof
is fulfilled or waived or (b) at such other time and place as the parties hereto
may agree.
SECTION 3.07 TAX FREE EXCHANGE. The parties intend that the Merger
qualifies as a "reorganization" within the meaning of Sections 368(a)(1)(A) and
(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code").
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ARTICLE IV
CERTAIN EFFECTS OF THE MERGER
SECTION 4.01 EFFECT OF THE MERGER. Upon and after the Effective Time:
(a) Fiserv Sub shall merge with and into the Surviving Corporation; (b) the
separate existence of Fiserv Sub shall cease; (c) the shares of capital stock of
the Company shall be converted as provided in this Agreement; (d) the former
holders of such shares are entitled only to the rights provided in this
Agreement and under Delaware Law and (e) the Merger shall otherwise have the
effect provided under the applicable laws of the State of Delaware.
SECTION 4.02 FURTHER ASSURANCES. If at any time after the Effective
Time the Surviving Corporation shall consider or be advised that any further
deeds, assignments or assurances in law or any other acts are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation, the title to any property or right of the Constituent
Corporations acquired or to be acquired by reason of, or as a result of, the
Merger, or (b) otherwise to carry out the purposes of this Agreement, the
Constituent Corporations agree that the Surviving Corporation and its proper
officers and directors shall and will execute and deliver all such property,
deeds, assignments and assurances in law and do all acts necessary, desirable or
proper to vest, perfect or confirm title to such property or rights in the
Surviving Corporation and otherwise to carry out the purposes of this Agreement,
and that the proper officers and directors of the Constituent Corporations and
the proper officers and directors of the Surviving Corporation are fully
authorized in the name of the Constituent Corporations or otherwise to take any
and all such action.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
otherwise set forth in the Disclosure Schedule (the "Disclosure Schedule")
annexed hereto as Schedule I, the Company represents and warrants to, and agrees
with, Fiserv and Fiserv Sub as follows:
(a) ORGANIZATION AND QUALIFICATION, ETC. The Company is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware, has corporate power and authority to
own all of its properties and assets and to carry on its business as it
is now being conducted, and is duly qualified to do business and is in
good standing in each other jurisdiction as set forth in the Disclosure
Schedule where the failure to so qualify would have a Material Adverse
Effect (as hereinafter defined). The copies of the Company's
Certificate of Incorporation and By-laws, as amended to date, which
have been delivered to Fiserv and Trewit, are complete and correct, and
such instruments, as so amended, are in full force and effect at the
date hereof.
"Material Adverse Effect" for purposes of this Agreement when
used with respect to any party means any change in, or effect on, or
series of related changes in, or related effects on, the business of
such party as currently conducted by such party and its subsidiaries,
taken as a whole, that would have an adverse impact on the results of
its operations or financial or other condition of an amount in excess
of $175,000 other than
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such changes or effects generally affecting the industry of such party
and its subsidiaries or the economy of the United States.
(b) CAPITAL STOCK.
(i) The authorized capital stock of the Company
consists of 8,000,000 shares of Company Common Stock and
4,000,000 shares of preferred stock, par value $0.10 per share
(the "Preferred Stock"), of which as of the date hereof
3,620,092 shares of Company Common Stock and no shares of
Preferred Stock are validly issued and outstanding, fully paid
and nonassessable, and no shares of Company Common Stock or
Preferred Stock are held in the treasury.
(ii) There are no options, warrants, calls, rights,
commitments or agreements of any character, written or oral,
to which the Company is a party or by which it is bound
obligating the Company to issue, deliver, sell, repurchase or
redeem, or cause to be issued, delivered, sold, repurchased or
redeemed any shares of the capital stock of the Company or
obligating the Company to grant, extend, accelerate the
vesting of, change the price of, otherwise amend or enter into
any such option, warrant, call, right, commitment or
agreement. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation or other
similar rights with respect to the Company. There are no
voting trusts, proxies or other agreements or understandings
with respect to the capital stock of the Company.
(c) SUBSIDIARIES. Except as set forth in Section 5.01(c) of
the Disclosure Schedule, the Company does not own of record or
beneficially, directly or indirectly, (i) any shares of outstanding
capital stock or securities convertible into capital stock of any other
corporation or (ii) any participating interest in any general or
limited partnership, limited liability partnership, limited liability
company, joint venture or other non-corporate business enterprise.
Except as listed in Section 5.01(c) of the Disclosure Schedule, the
Company owns directly all the outstanding capital stock of the
subsidiaries listed in the Disclosure Schedule (the "Subsidiaries")
(except for directors' qualifying shares, if any), free and clear of
all encumbrances other than Permitted Exceptions (as hereinafter
defined). The capital stock of each Subsidiary is duly authorized and
validly issued and outstanding, fully paid and nonassessable. No
Subsidiary has issued or sold any shares of its capital stock or any
securities or obligations convertible into or exchangeable for, or
given any person any right to acquire from such Subsidiary, any shares
of its capital stock, and no such securities or obligations are
outstanding. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and has the corporate power and authority to own and hold
its properties and to carry on its business as currently conducted. The
copies of the articles or certificates of incorporation and by-laws
(or, where applicable, other such similar governance documents) of each
Subsidiary, as amended to date, which have been delivered to Fiserv
were complete and correct, and such instruments, as so amended, are in
full force and effect at the date hereof. For purposes of this Section
5.01, the term "Company" shall be deemed to include the Subsidiaries
except in Section
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5.01(a) through Section 5.01(g) (inclusive) and Section 5.01(y) and
except where otherwise noted.
(d) AUTHORITY RELATIVE TO AGREEMENT. The Company has the
corporate power and authority to execute and deliver this Agreement and
the FIRPTA Affidavit in the form annexed hereto as Exhibit B (the
"FIRPTA Affidavit") and to consummate the transactions contemplated on
the part of the Company hereby. The execution and delivery by the
Company of this Agreement and the FIRPTA Affidavit and the consummation
by the Company of the transactions contemplated on its part hereby have
been duly authorized by its Board of Directors. No other corporate
proceedings on the part of the Company (other than stockholder
approval) or any Subsidiary are necessary to authorize the execution
and delivery of this Agreement by the Company, or, subject to obtaining
the Company Stockholders Approval, the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by the Company and, assuming the due authorization,
execution and delivery at the Effective Time of the Agreement by Fiserv
and Fiserv Sub, is its valid and binding agreement, enforceable against
the Company in accordance with its terms, except as such enforcement is
subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting creditors'
rights generally and (ii) general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing
and other similar doctrines affecting the enforceability of agreements
generally (regardless of whether considered in a proceeding in equity
or at law). The Company's Board of Directors has approved this
Agreement and the transactions contemplated hereby and such approvals
are sufficient so that neither the restrictions on "business
combinations" set forth in Section 203(a) of Delaware Law nor the
provisions of any other "fair price," "moratorium," "control share
acquisition," or other similar anti-takeover statute or regulation nor
the provisions of any applicable anti-takeover provisions in the
Certificate of Incorporation or Bylaws of the Company will apply to
this Agreement or any of the transactions contemplated by this
Agreement. Under applicable law, the current Certificate of
Incorporation of the Company and Nasdaq rules, the affirmative vote of
the holders of a majority of the outstanding shares of Company Common
Stock is the vote required for the stockholders of the Company to
approve the Merger (the "Company Stockholder Approval").
(e) NON-CONTRAVENTION. The execution and delivery of this
Agreement and the FIRPTA Affidavit by the Company do not and the
consummation by the Company of the transactions contemplated hereby
will not (i) violate any provision of the Certificate of Incorporation
or By-laws of the Company or the Certificate of Incorporation or
By-laws of any of its Subsidiaries, as the case may be, and (ii)
violate, or result, with the giving of notice or the lapse of time or
both, in a violation of, any provision of, or result in the
acceleration of or entitle any party to accelerate (whether after the
giving of notice or lapse of time or both) any obligation under, or
result in the creation or imposition of any material lien, charge,
pledge, security interest or other encumbrance upon any of the property
of the Company or any of its Subsidiaries pursuant to any provision of
any mortgage or lien or material lease, agreement, license or
instrument or any order, arbitration award, judgment or decree to which
the Company or any of its Subsidiaries is
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a party or by which any of its assets is bound, and do not and will not
violate or conflict with any other material restriction of any kind or
character to which the Company or any of its Subsidiaries is subject or
by which any of its assets may be bound, and the same does not and will
not constitute an event permitting termination of any such mortgage or
lien or material lease, agreement, license or instrument to which the
Company or any of its Subsidiaries is a party or (iii) violate in any
material respect any law, ordinance or regulation to which the Company
or any of its Subsidiaries is subject, including the applicable
requirements of the Securities Act, the Exchange Act, state takeover or
securities laws, the rules of Nasdaq, except, in each case or cases,
for any such violation, acceleration, imposition, conflict or
termination which would not, individually or in the aggregate, result
in a Material Adverse Effect.
(f) GOVERNMENT APPROVALS. Except for (i) the filing of the
Certificate of Merger with the Secretary of State of the State of
Delaware, no consent, authorization, order or approval of, or filing or
registration with, any governmental commission, board or other
regulatory body is required for the execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby, except (x) as may be necessary as a
result of any facts or circumstances relating solely to Fiserv or
Fiserv Sub or (y) where the failure to obtain such consents,
authorizations or approvals or to make such filings or registrations
would not prevent the consummation of the transactions contemplated
hereby.
(g) COMPANY SEC REPORTS. The Company has filed with the
Securities and Exchange Commission (the "SEC"), at or prior to the time
due, and has made available to Fiserv true and complete copies of all
forms, reports, schedules, registration statements and definitive proxy
statements (together with all information incorporated therein by
reference, the "Company SEC Reports") required to be filed by it with
the SEC since January 1, 2000. As of their respective dates, the
Company SEC Reports complied as to form in all material respects with
the requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or the Securities Act of 1933, as amended (the
"Securities Act"), as the case may be, and the rules and regulations of
the SEC thereunder applicable to such Company SEC Reports. As of their
respective dates and as of the date any information from such Company
SEC Reports has been incorporated by reference, the Company SEC Reports
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(h) FINANCIAL STATEMENTS. Each of the financial statements of
the Company (including the related notes) included or incorporated by
reference in the Company SEC Reports (including any similar documents
filed after the date of this Agreement) comply as to form in all
material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Form 10-QSB of the SEC) applied on a
consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated
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financial position of the Company and its consolidated subsidiaries as
of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject to normal year-end
adjustments in the case of any unaudited interim financial statements).
Except for liabilities and obligations incurred in the ordinary course
of business consistent with past practice and which could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, since the date of the most recent audited
consolidated balance sheet included in the Company SEC Reports, neither
the Company nor any of its Subsidiaries has incurred any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by GAAP to be set forth on a consolidated balance
sheet of the Company and its consolidated subsidiaries or in the notes
thereto.
(i) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
2001, the Company has not:
(i) incurred any obligation or liability (fixed or
contingent), except normal trade or business obligations
incurred in the ordinary course of business and consistent
with past practice;
(ii) discharged or satisfied any lien, security
interest or encumbrance or paid any obligation or liability
(fixed or contingent), other than in the ordinary course of
business and consistent with past practice;
(iii) mortgaged, pledged or subjected to any lien,
security interest or other encumbrance any of its assets or
properties (other than Permitted Exceptions (as hereinafter
defined)), other than in the ordinary course of business and
consistent with past practice;
(iv) transferred, leased or otherwise disposed of any
of its assets or properties or acquired any assets or
properties, other than in any case in the ordinary course of
business and consistent with past practice;
(v) cancelled or compromised any debt or claim, other
than in the ordinary course of business and consistent with
past practice;
(vi) waived or released, under any contract, rights
of the Company having value to the Company, other than in any
case in the ordinary course of business and consistent with
past practice;
(vii) transferred or granted any rights under any
concessions, leases, licenses, agreements or Intellectual
Property (as hereinafter defined), other than in the ordinary
course of business and consistent with past practice;
(viii) other than in the ordinary course of business
and consistent with past practice, made or granted any wage or
salary increase applicable to any group or classification of
employees generally, paid any bonuses, entered into any
employment contract with any officer or employee or made any
loan to, or entered
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into any transaction of any other nature with, any officer or
employee of the Company;
(ix) entered into any transaction, contract or
commitment, except (A) those listed, or which pursuant to the
terms hereof are not required to be listed, on the Disclosure
Schedule, (B) this Agreement and the transactions contemplated
hereby, and (C) those entered into in the ordinary course of
business and consistent with past practice;
(x) declared, paid or made any provision for payment
of any dividends or other distribution in respect of shares of
Company Common Stock, or directly or indirectly, acquired,
purchased, redeemed or made any provision for acquiring,
purchasing or redeeming any shares of Company Common Stock;
(xi) suffered any casualty loss or damage (whether or
not such loss or damage shall have been covered by insurance)
which affects in any material respect its ability to conduct
its business;
(xii) amended or changed the Certificate of
Incorporation or By-laws of the Company;
(xiii) suffered any labor trouble or claim of
wrongful discharge, discrimination or other unlawful labor
practice or action;
(xiv) changed any accounting method or practice
(including any change in depreciation or amortization policies
or rates);
(xv) commenced or threatened to commence any lawsuit
or proceeding against a third party;
(xvi) received any notice of any claim of ownership
by a third party of the Company's Intellectual Property or of
infringement by the Company of any third party's Intellectual
Property rights;
(xvii) agreed to do any of the things described in
the preceding clauses (i) through (xvi) (other than
negotiations with Fiserv, Trewit, Fiserv Sub and their
representatives regarding the transactions contemplated by
this Agreement); or
(xviii) suffered any Material Adverse Effect.
"Permitted Exceptions" shall mean (i) mechanic's,
materialman's, warehouseman's and carrier's liens and purchase money
security interests arising in the ordinary course of business; (ii)
liens for Taxes and assessments not yet payable; (iii) liens for Taxes,
assessments and charges and other claims, the validity of which the
Company is contesting in good faith; (iv) zoning, entitlement, building
and other land use regulations; (v) covenants, conditions,
restrictions, easements and other similar matters of record; (vi )
liens for workers compensation, unemployment insurance and other
benefits
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incurred in the ordinary course of business; and (vi) imperfections of
title, liens, security interests, claims and other charges and
encumbrances the existence of which would not have individually or in
the aggregate a Material Adverse Effect.
(j) TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES,
ETC. The Company has good and marketable title to all of the real,
tangible, personal and mixed properties and assets owned by it and used
in its business, free and clear of any liens, charges, pledges,
security interests or other encumbrances (other than Permitted
Exceptions), except as reflected in the Company Financial Statements.
The Company's intangible properties and assets (excluding leasehold
interests and other any intangible properties and assets described in
Section 5.01(k), which section contains the Company's representations
and warranties with respect to such intangible properties and assets)
are free and clear of any liens, charges, pledges, security interests
or other encumbrances (other than Permitted Exceptions), except as
reflected in the Company Financial Statements.
(k) INTELLECTUAL PROPERTY.
(i) DEFINITIONS. For all purposes of this Agreement,
the following terms shall have the following respective
meanings:
(A) "Technology" means any or all of the
following: (I) works of authorship including computer
programs, algorithms, routines, source code and
executable code, whether embodied in software or
otherwise, documentation, designs, files, records and
data; (II) inventions (whether or not patentable),
improvements and technology; (III) proprietary and
confidential information, including technical data
and customer and supplier lists, trade secrets, show
how, know how and techniques; (IV) databases, data
compilations and collections and technical data; (V)
processes, tools, devices, methods, prototypes,
schematics, bread boards, net lists, mask works, test
methodologies and hardware development tools; and all
instantiations of the foregoing in any form and
embodied in any media.
(B) "Intellectual Property Rights" means any
or all of the following and all rights in, arising
out of, or associated therewith: (I) all United
States and foreign patents and utility models and
applications therefore and all reissues, divisions,
re-examinations, renewals, extensions, provisionals,
continuations and continuations-in-part thereof, and
equivalent or similar rights anywhere in the world in
inventions and discoveries including without
limitation invention disclosures ("Patents"); (II)
all trade secrets and other rights in the know-how
and confidential or proprietary information ("Trade
Secrets"); (III) all copyrights, copyrights
registrations and applications therefor and all other
rights corresponding thereto throughout the world
("Copyrights"); (IV) all industrial designs and any
registrations and applications therefor throughout
the world; (V)
A-14
mask works, mask work registrations and applications
therefor, and all other rights corresponding thereto
throughout the world ("Mask Works"); (VI) all rights
in World Wide Web addresses and domain names and
applications and registrations therefor, all trade
names, trade dress, logos, common law trademarks and
service marks, trademark and service mark
registrations and applications therefor and all
goodwill associated therewith throughout the world
("Trademarks"); and (VII) any similar, corresponding
or equivalent rights to any of the foregoing anywhere
in the world.
(C) "Company Intellectual Property" means
any Technology and Intellectual Property Rights
including the Company's Registered Intellectual
Property Rights (as hereinafter defined) that are
owned by, or exclusively licensed to, the Company.
(D) "Registered Intellectual Property
Rights" means all United States, international and
foreign: (I) Patents, including applications
therefor; (II) registered Trademarks, applications to
register Trademarks, including intent-to-use
applications, or other registrations or applications
related to Trademarks; (III) Copyrights registrations
and applications to register Copyrights; (IV)
registered Mask Works and applications to register
Mask Works; and (V) any other Technology that is the
subject of an application, certificate, filing,
registration or other document issued by, filed with,
or recorded by, any state, government or other public
legal authority at any time.
(E) "Governmental Entity" means any
national, federal, state, municipal or local or other
government, governmental, regulatory or
administrative authority, agency or commission or any
court, tribunal or judicial or arbitral body.
(ii) COMPANY PRODUCTS. Section 5.01(k)(ii) of the
Disclosure Schedule contains a complete and accurate list (by
name and version number) of all products, software or service
offerings of the Company (collectively, the "Company
Products") that have been sold, distributed or otherwise
disposed of in the two (2) year period preceding the date
hereof or which the Company currently intends to sell,
distribute or otherwise dispose of in the future, including
any products, Software or service offerings under development.
(iii) REGISTERED INTELLECTUAL PROPERTY RIGHTS.
Section 5.01(k)(iii) of the Disclosure Schedule lists all
Registered Intellectual Property Rights owned by, filed in the
name of or applied for by the Company as of the date of this
Agreement (the "Company Registered Intellectual Property
Rights") and lists any proceedings or actions before any
court, tribunal, including the United States Patent and
Trademark Office (the "PTO"), related to any of the Company
Intellectual Property Rights or Company Intellectual Property.
All necessary
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documents and certificates in connection with such Company
Registered Intellectual Property Rights have been filed with
the PTO or the United States Copyright Office, as the case may
be, for the purposes of maintaining the Registered
Intellectual Property Rights embodied in any Company
Intellectual Property in the United States. Except as set
forth in Section 5.01(k)(iii) of the Disclosure Schedule, as
of the Effective Time, there are no actions that must be taken
by the Company within 120 days of the Effective Time in order
to obtain, perfect, preserve, renew or maintain the Registered
Intellectual Property, including the payment of any
registration, maintenance or renewal fees or the filing of any
responses to PTO office actions, documents, applications or
certificates. The Company has not claimed any status in the
application for or registration of any Company Intellectual
Property, including "small business status", that would not be
applicable to it following the Merger .
(iv) VALID ASSIGNMENT. In each case in which the
Company has acquired any Company Intellectual Property from
any person, the Company has obtained a valid and enforceable
assignment sufficient to irrevocably transfer all rights in
such Company Intellectual Property (including the right to
seek past and future damages with respect thereto) to the
Company. To the maximum extent provided for by, and in
accordance with, applicable laws and regulations, the Company
has recorded each such assignment of a Registered Intellectual
Property Right assigned to the Company with the PTO or the
United States Copyright Office.
(v) NO INVALIDITY, ETC. The Company has no knowledge
of any facts or circumstances that would render any Company
Intellectual Property invalid or unenforceable. To the
Company's knowledge, no person is infringing or
misappropriating any Company Intellectual Property. The
Company has not received notice from any person claiming that
such operation or any act, product, technology or service
(including products, technology or services currently under
development) of the Company infringes or misappropriates any
Intellectual Property Right of any person or constitutes
unfair competition or trade practices under the laws of any
jurisdiction (nor does the Company have knowledge of any basis
therefore). The Company does not operate interactive voice
response units on behalf of clients in a service bureau
environment.
(vi) CONFIDENTIALITY. The Company has taken all steps
that reasonably are required to protect the Company's rights
in confidential information and Trade Secrets of the Company
or provided by any other person to the Company. Without
limiting the foregoing, the Company has and enforces a policy
requiring each employee, consultant and contractor to execute
proprietary information, confidentiality and assignment
agreements, and all current and former employees, consultants
and contractors of the Company have executed such an
agreement. Each of the employees of ppoONE, Inc. listed on
Section 5.01(k)(vi) of the Disclosure Schedule have signed the
form of confidentiality agreement attached to Section
5.01(k)(vi) of the Disclosure Schedule. The Company has in
place project
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management policies that require back-up procedures to be
followed, including daily storage to a back-up server and at
least weekly transmission to an off-site storage facility,
that are reasonable in the circumstances. The Company does not
permit employees, consultants or contractors to work from
sites other than Company-approved sites, and procedures are in
place to assure that the Company maintains adequate possession
and control of all Company Intellectual Property that may be
being worked on by employees, consultants or contractors
off-site.
(vii) TRANSFERABILITY. All Company Intellectual
Property will be fully transferable, alienable or licensable
by the Surviving Corporation and/or Fiserv without restriction
and without payment of any kind to any third party.
(viii) NO LIENS. Each item of Company Intellectual
Property is free and clear of any liens except for
non-exclusive licenses granted to end-user customers in the
ordinary course of business. The Company is the exclusive
owner or exclusive licensee of all Company Intellectual
Property.
(ix) NO TRANSFER OF RIGHTS. The Company has not
transferred ownership of, or granted any exclusive license of
or right to use, or authorized the retention of any exclusive
rights to use or joint ownership of, any Technology or
Intellectual Property Right that is Company Intellectual
Property, to any other person.
(x) EXCLUSIVE RIGHTS. Except as set forth in Section
5.01(k)(x) of the Disclosure Schedule, all Technology, other
than "shrink wrap" and other commercially available end user
software, used in or necessary to the conduct of the Company's
business as presently conducted or currently contemplated to
be conducted by the Company was written and created solely by
employees of the Company acting within the scope of their
employment, and no person owns or has any rights to any of the
Company Intellectual Property.
(xi) ALL NECESSARY RIGHTS. Except as set forth in
Section 5.01(k)(xi) of the Disclosure Schedule, the Company
Intellectual Property constitutes all the Technology,
Intellectual Property Rights and Company Registered
Intellectual Property Rights used in and/or necessary to the
conduct of the business of the Company as it currently is
conducted on the date of this Agreement, and as it is
currently planned or contemplated to be conducted by the
Company, including the design, development, manufacture, use,
import and sale of Company Products.
(xii) NO INFRINGEMENT. The operation of the business
of the Company as it is currently conducted, or is presently
proposed to be conducted, by the Company, including but not
limited to the design, development, use, import, branding,
advertising, promotion, marketing, manufacture and sale of
Company Products does not and will not when conducted by
Fiserv or the Surviving Corporation in substantially the same
manner following the Closing, infringe or misappropriate any
Intellectual Property Right of any person, violate any right
of
A-17
any person (including any right to privacy or publicity), or
constitute unfair competition or trade practices under the
laws of any jurisdiction.
(xiii) NO PROCEEDINGS. No Company Intellectual
Property or service of the Company is subject to any
proceeding or outstanding decree, order, judgment or
settlement agreement or stipulation that restricts in any
manner the use, transfer or licensing thereof by the Company
or may affect the validity, use or enforceability of such
Company Intellectual Property.
(xiv) IP CONTRACTS. Other than "shrink wrap" and
other commercially available end user software, having an
initial purchase price of $5,000 or less, Section 5.01(k)(xiv)
of the Disclosure Schedule lists all contracts, licenses and
agreements to which the Company is a party with respect to any
Technology or Intellectual Property Rights (the "IP
Contracts"). The Company is not in breach of nor has the
Company failed to perform under any of the IP Contracts and,
to the Company's knowledge: (A) no other party to any such IP
Contract is in breach thereof or has failed to perform
thereunder, and (B) there are no disputes regarding the scope
of or performance under such IP Contracts, including with
respect to any payments to be made or received by the Company
thereunder.
(xv) OBLIGATION TO WARRANT. Section 5.01(k)(xv) of
the Disclosure Schedule lists all IP Contracts in which the
Company has agreed to, or has assumed, any obligation or duty
to warrant, indemnify, reimburse, hold harmless, guarantee or
otherwise assume or incur any obligation or liability or
provide a right of rescission with respect to the infringement
or misappropriation by the Company or such other person of the
Intellectual Property Rights of any person other than the
Company.
(xvi) NO GRANTS, ASSIGNMENTS. Neither this Agreement
nor the transactions contemplated by this Agreement, including
the assignment of any contracts or agreements to which the
Company is a party to Fiserv, Fiserv Sub or the Surviving
Corporation, by operation of law or otherwise, will result in
(A) either Fiserv's, Fiserv Sub's or the Surviving
Corporation's granting to any person any right or license to
any Technology or Intellectual Property Right owned by, or
licensed to, any of them; (B) either Fiserv's, Fiserv Sub's or
the Surviving Corporation's being bound by, or subject to, any
non-compete or other restriction on the operation or scope of
their respective businesses; or (C) either Fiserv's, Fiserv
Sub's or the Surviving Corporation's being obligated to pay
any royalties or other amounts to any person in excess of
those payable by Fiserv, Fiserv Sub or the Surviving
Corporation, respectively.
(l) LIST OF PROPERTIES, CONTRACTS AND OTHER DATA. Section
5.01(l) of the Disclosure Schedule contains a list setting forth with
respect to the Company as of the date hereof the following:
(i) all real properties owned in fee simple by the
Company;
A-18
(ii) all leases of real or personal property to which
the Company is a party, either as lessee or lessor with a
brief description of the property to which each such lease
relates, except such leases of personal property as require
payment during their remaining life aggregating less than
$20,000;
(iii) all collective bargaining agreements, all
agreements or arrangements that contain any severance pay or
post-employment liabilities or obligations, all bonus,
deferred compensation, pension, profit sharing or retirement
plans or any other employee benefit plans or arrangements, all
employment or consulting agreements or contracts with an
employee or individual consultant or salesperson or consulting
or sales agreements or contracts, under which a firm or other
organization provides services to the Company pursuant to
which the Company is obligated to make payments in excess of
$24,000 per year and all agreements or plans, including all
stock option plans, stock appreciation rights plans or stock
purchase plans, any of the benefits of which will be increased
or the vesting of benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions
contemplated by this Agreement;
(iv) all contracts and commitments (including
mortgages, indentures and loan or credit agreements, security
agreements or other agreements or instruments relating to the
borrowing of money or extension of credit, including
guaranties; fidelity or surety bonds or completion bonds;
agreements of indemnification or guaranty; agreements,
contracts or commitments containing any covenant limiting the
freedom of the Company to engage in any line of business or to
compete with any person; agreements, contracts or commitments
relating to capital expenditures and involving future payments
in excess of $20,000; agreements, contracts or commitments
relating to the disposition or acquisition of assets or any
interest in any business enterprise outside the ordinary
course of business; agreements, contracts or commitments
containing performance or revenue standards or purchase or
revenue minimums, which, if not met, have payment,
reimbursement or forfeiture provisions; purchase orders or
contracts; construction contracts; material distribution,
joint marketing or development agreements; or any agreement,
contract or commitment pursuant to which the Company has
granted or may grant in the future to any party a source-code
license or option or other right to use or acquire
source-code) to which the Company is a party, or to which it
or any of its assets or properties are subject and which are
not specifically referred to in the preceding clauses (i),
(ii) or (iii) above; provided that there need not be listed in
the Disclosure Schedule (unless required pursuant to the
preceding clauses (i), (ii) or (iii) above) any contract or
commitment incurred in the ordinary course of business and
consistent with past practice which requires payments to or by
the Company during its remaining life aggregating less than
$50,000; and
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(v) the current annual compensation of all employees
of the Company (by position or by department) as of a recent
date (a copy of which has been submitted to Fiserv but is not
included in the Disclosure Schedule).
True and complete copies of all documents and descriptions complete in
all material respects of all oral agreements or commitments (if any)
referred to in (i) through (iv) above (other than insurance plans which
have been summarized) have been provided and made available to Fiserv
or its counsel. The Company has not been notified in writing of any
claim that any contract listed in the Disclosure Schedule for this
subsection (l) is not valid and enforceable in accordance with its
terms for the periods stated therein, or that there is under any such
contract any existing default or event of default or event which with
notice or lapse of time or both would constitute such a default, except
for any such claim which would have, individually or when taken
together with all such other claims referred to in this Section
5.01(l), a Material Adverse Effect.
Section 5.01(l) of the Disclosure Schedule sets forth a list of the
Company's top 10 clients according to revenue for the year ended
December 31, 2001, and each client with which the Company currently has
an agreement that the Company in good faith expects to be one of the
Company's top 10 clients for the year ending December 31, 2002, and a
list of all effective agreements between such client and the Company.
(m) LITIGATION. There are no actions, suits or proceedings
with respect to the business of the Company pending against the Company
of which the Company is aware at law or in equity, or before or by any
federal, state, municipal, foreign or other governmental department,
commission, board, bureau, agency or instrumentality (individually, a
"Governmental Entity"), nor, to the knowledge of the Company, has the
Company received any notice or threat of any such actions, suits or
proceedings with respect to the business of the Company except as would
not have a Material Adverse Effect. There is no investigation pending
or threatened against the Company, its properties or any of its
officers or directors by or before a Governmental Entity, except as
would not have a Material Adverse Effect. The Disclosure Schedule sets
forth, with respect to any such pending or threatened action, suit,
proceeding or investigation that the Company believes could have a
Material Adverse Effect, the forum, the parties thereto, the subject
matter thereof and the amount of damages claimed or other remedy
requested. No Governmental Entity has at any time challenged or
questioned the legal right of the Company to manufacture, offer or sell
any of its products or services in the present manner or style thereof.
(n) LABOR CONTROVERSIES. Except as would not reasonably be
expected to have in the aggregate a Material Adverse Effect:
(i) there are no controversies known to the Company
between the Company and any employees or any unresolved labor
union grievances or unfair labor practice or labor arbitration
proceedings pending or, to the knowledge of the Company,
threatened, related to the Company and, to the knowledge of
the Company, there are not and during the last two years prior
to the date hereof there
A-20
have not been any formal or informal organizing efforts by a
labor organization and/or group of Company employees and the
Company is not presently, nor has it been in the past, a party
to, or bound by, any collective bargaining agreement or union
contract with respect to employees and no collective
bargaining agreement is being negotiated by the Company;
(ii) the Company is in compliance, and has not
received notice of, nor, to the knowledge of the Company, has
there been threatened any claim that the Company has not
complied, with all laws relating to the employment of labor,
including provisions thereof relating to wages, hours,
collective bargaining, the payment of social security and
similar Taxes, equal employment opportunity, employment
discrimination and employment safety nor has the Company
received notice of or, to the knowledge of the Company, has
there been threatened any claim that it is liable for any
arrears of wages or any Taxes or penalties for failure to
comply with any of the foregoing; and the Company is not
liable for any payment to any trust or other fund governed by
or maintained by or on behalf of any governmental authority
with respect to unemployment compensation benefits, social
security or other benefits or obligations for employees (other
than routine payments to be made in the ordinary course of
business and consistent with past practice) and there are no
pending, threatened or reasonably anticipated claims or
actions against the Company under any worker's compensation
policy or long-term disability policy; and
(iii) the Company does not now, nor has it ever had
the obligation to, maintain, establish, sponsor, participate
in or contribute to any international or foreign employee
benefit plan.
(o) USE OF REAL PROPERTY. The Company has not received any
notice of violation of any applicable zoning or building regulation,
ordinance or other law, order, regulation or requirement relating to
the Company (representations and warranties with respect to
environmental matters being set forth in Section 5.01(p) hereof) or any
notice of default under any lease, contract, commitment, license or
permit, relating to the use and operation of the owned or leased real
property listed in the Disclosure Schedule, in either case which could
reasonably be expected to have in the aggregate a Material Adverse
Effect and, to the knowledge of the Company, there is no such violation
or default which would have in the aggregate a Material Adverse Effect.
The Company has not received any notice that any plant or other
building that is owned or covered by a lease set forth in the
Disclosure Schedule hereto does not substantially conform with all
applicable ordinances, codes, regulations and requirements, and the
Company has not received any notice that any law or regulation
presently in effect or condition precludes or restricts continuation of
the present use of such properties by the Company.
(p) ENVIRONMENTAL MATTERS.
(i) HAZARDOUS MATERIALS. The Company has not: (A)
operated any underground storage tanks at any property that
the Company has at any time
A-21
owned, operated, occupied or leased; or (B) illegally released
in violation of applicable law any material amount of any
substance that has been designated by any Governmental Entity
or by applicable federal, state or local law to the be
radioactive, toxic, hazardous or otherwise a danger to health
or the environment, including PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous
substances pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended,
or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended,
and the regulations promulgated pursuant to said laws, (a
"Hazardous Material"), but excluding office and janitorial
supplies properly and safely maintained. No Hazardous
Materials have been released in violation of any applicable
law, as a result of the actions of the Company, or, to the
Company's knowledge, as a result of any actions of any third
party or otherwise, in, on or under any property, including
the land and the improvements, ground water and surface water
thereof, that the Company has at any time owned, operated,
occupied or leased.
(ii) HAZARDOUS MATERIALS ACTIVITIES. The Company has
not transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous
Materials in violation of any law in effect on or before the
Effective Time, nor has the Company disposed of, transported,
sold or manufactured any product containing a Hazardous
Material (any or all of the foregoing being collectively
referred to as "Hazardous Materials Activities") in violation
of any rule, regulation, treaty or statute promulgated by any
Governmental Entity in effect prior to or as of the date
hereof to prohibit, regulate or control Hazardous Materials or
any Hazardous Material Activity.
(iii) PERMITS. The Company currently holds all
environmental approvals, permits, licenses, clearances and
consents (the "Environmental Permits") necessary for the
conduct of the Company's Hazardous Material Activities and
other businesses of the Company as such activities and
businesses are currently being conducted.
(iv) ENVIRONMENTAL LIABILITIES. No action,
proceeding, revocation proceeding, amendment procedure, writ,
injunction or claim is pending, or, to the Company's
knowledge, threatened concerning any Environmental Permit,
Hazardous Material or any Hazardous Materials Activity of the
Company. The Company is not aware of any fact or circumstance
that could involve the Company in any environmental litigation
or impose upon the Company any environmental liability.
(q) ADDITIONAL ACCOUNTING DISCLOSURE MATTERS.
(i) ACCOUNTS RECEIVABLE. The accounts receivable
reflected on the balance sheet of the Company as of December
31, 2001 and all accounts receivable arising between December
31, 2001 and the date hereof, arose from
A-22
bona fide transactions in the ordinary course of business.
Except for amounts also recorded as deferred revenue, these
transactions have been recorded in accordance with GAAP
meeting the following criteria: persuasive evidence of an
arrangement exists, delivery has occurred or services have
been rendered, the sales price is fixed or determinable and no
further deliveries or services are required to be provided in
order to entitle the Company or its assignees to collect the
accounts receivable in full. No such account has been assigned
or pledged to any other person, firm or corporation.
(ii) NO UNDISCLOSED LIABILITIES. The Company does not
have any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether
accrued, absolute, contingent, matured, unmatured or other
(whether or not required to be reflected in the Company
Financial Statements), that in the aggregate exceed $50,000,
and which (A) has not been reflected (which such term
"reflected" does not include any such liability, indebtedness,
etc. that is mentioned only in the footnotes to the Company
Financial Statements) or reserved against in the most recent
Company Financial Statements or (B) has arisen other than in
the ordinary course of the Company's business and consistent
with past practices since the date of the latest balance sheet
included in the Company Financial Statements. The Company does
not have any outstanding payables, whether reflected on the
Company Financial Statements or not, which (C) exceed $50,000
or (D) are more than 30 days past due.
(r) COMPLIANCE WITH LAW; RESTRICTIONS ON BUSINESS ACTIVITIES.
(i) NO DEFAULTS. The Company is not in default with
respect to any order of any court, governmental authority or
arbitration board or tribunal to which it is a party or, to
the knowledge of the Company, to which the Company is subject
and which applies to its business, and, to the knowledge of
the Company, the Company has not been notified that it is in
violation of any laws, ordinances, governmental rules or
regulations to which it is subject or that it has failed to
obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its assets and
properties or to the conduct of its business.
(ii) IMMIGRATION MATTERS. The Company has on file a
valid Form I-9 for each employee hired by the Company on or
after November 7, 1986 and continuously employed after
November 6, 1986 or the applicable date of hire. To the
knowledge of the Company, all employees of the Company are (A)
United States citizens, or lawful permanent residents of the
United States, (B) aliens whose right to work in the United
States is unrestricted, (C) aliens who have valid, unexpired
work authorizations issued by the Attorney General of the
United States (Immigration and Naturalization Service) or (D)
aliens who have been continually employed by the Company since
November 6, 1986 or the applicable date of hire. The Company
has not been the subject of an immigration
A-23
compliance or employment visit from, nor has the Company been
assessed any fine or penalty by, or been the subject of any
order or directive of, the United States Department of Labor
or the Attorney General of the United States (Immigration and
Naturalization Service).
(iii) RESTRICTIONS ON BUSINESS ACTIVITIES. There is
no agreement (noncompete or otherwise), commitment, judgment,
injunction, order or decree to which the Company is a party or
otherwise binding upon the Company which has or reasonably
would be expected to have the effect of prohibiting or
impairing any business practice (including the licensing of
any product) of the Company, any acquisition of property
(tangible or intangible) by the Company or the conduct of
business by the Company. Without limiting the foregoing, the
Company has not entered into any agreement under which the
Company is restricted from selling, licensing or otherwise
distributing any of its products to any class of customers, in
any geographic area, during any period of time or in any
segment of the market.
(iv) EMPLOYEES. To the knowledge of the Company, no
employee of the Company (A) is in violation of any term of any
employment contract, patent disclosure agreement,
non-competition agreement or any restrictive covenant to a
former employer relating to the right of any such employee to
be employed by the Company because of the nature of the
business conducted or presently proposed to be conducted by
the Company or to the use of trade secrets or proprietary
information of others or (B) has given notice to the Company,
nor is the Company otherwise aware that any employee intends
to terminate his or her employment with the Company.
(v) GOVERNMENTAL AUTHORIZATION. The Company possesses
all material consents, licenses, permits, grants or other
authorizations issued to the Company by a Governmental Entity
(A) pursuant to which the Company currently operates or holds
any interest in any of its properties or (B) which is required
for the operation of its business or the holding of any such
interest, other than such consents, licenses, permits, grants
or authorizations the failure to obtain which would not,
either individually or in the aggregate, have a Material
Adverse Effect ("Company Authorizations"), which Company
Authorizations are in full force and effect and constitute all
Company Authorizations required to permit the Company to
operate or conduct its business or hold any interest in its
properties or assets and each such Company Authorization is
listed on Section 5.01(r)(v) of the Disclosure Schedule.
(s) EMPLOYEE BENEFITS.
(i) EMPLOYEE PLANS. Section 5.01(s)(i) of the
Disclosure Schedule sets forth a list identifying each
"employee pension benefit plan" as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), including any "multiemployer plan", as
defined in Section 3(37) of ERISA, (the "Pension Plans") and a
list identifying each "employee welfare
A-24
benefit plan", as defined in Section 3(1) of ERISA, (the
"Welfare Plans") that, in either case, are maintained,
administered or contributed to by the Company, or which cover
any employee or former employee of the Company. Collectively,
the Pension Plans and Welfare Plans are hereinafter referred
to as the "Employee Plans". Except as otherwise identified in
Section 5.01(s)(i) of the Disclosure Schedule, (A) no Employee
Plan is maintained, administered or contributed to by any
entity other than the Company, and (B) no Employee Plan is
maintained under any trust arrangement which covers any
employee benefit arrangement which is not an Employee Plan.
(ii) DELIVERY OF COPIES OF PLANS, DOCUMENTS, ETC. The
Company has delivered or has caused to be delivered to Fiserv
and Trewit true and complete copies of (A) the Employee Plans
(including related trust agreements, custodial agreements,
insurance contracts, investment contracts and other funding
arrangements, if any, and adoption agreements, if any), (B)
any amendments to Employee Plans, (C) written interpretations
of the Employee Plans, (D) material employee communications by
the plan administrator of any Employee Plan (including, but
not limited to, summary plan descriptions and summaries of
material modifications, as defined under ERISA), (E) the three
most recent annual reports (e.g., the complete Form 5500
series) prepared in connection with each Employee Plan (if
such report was required), including all attachments
(including the audited financial statements, if any) and (F)
the three most recent actuarial valuation reports prepared in
connection with each Employee Plan (if any such report was
required).
(iii) NO CHANGE IN BENEFITS. There has been no
amendment to, written interpretation or announcement (whether
or not written) by the Company relating to, or change in
employee participation or coverage under any Employee Plan
that would increase materially the expense of maintaining such
Employee Plan above the level of expense incurred in respect
of such Employee Plan for the most recent plan year with
respect to Employee Plans. The execution of this Agreement and
the consummation of the transactions contemplated hereby do
not and will not constitute an event under any Employee Plan,
which either alone or upon the occurrence of a subsequent
event will or may result in any payment, acceleration, vesting
or increase in benefits to any employee, former employee or
director of the Company.
(iv) COMPLIANCE. Each Employee Plan has been
maintained in compliance with its terms and the requirements
prescribed by any and all statutes, orders, rules and
regulations, including but not limited to, ERISA and the Code,
which are applicable to such Employee Plan.
(v) QUALIFICATION, ETC. Each Pension Plan is
"qualified" within the meaning of Section 401(a) of the Code,
and has been qualified during the period from the date of its
adoption to the date of this Agreement, and each trust created
thereunder is tax-exempt under Section 501(a) of the Code. The
Company has
A-25
delivered or caused to be delivered to Fiserv the latest
determination letters of the Internal Revenue Service relating
to each Pension Plan. Such determination letters have not been
revoked. Furthermore, there are no pending proceedings or, to
the knowledge of the Company, threatened proceedings in which
the "qualified" status of any Pension Plan is at issue and in
which revocation of the determination letter has been
threatened. Each such Pension Plan has not been amended or
operated, since the receipt of the most recent determination
letter, in a manner that would adversely affect the
"qualified" status of the Plan. No distributions have been
made from any of the Pension Plans that would violate in any
respect the restrictions under Treasury Regulation Section
1.401(a)(4)-5(b), and none will have been made by the
Effective Time.
(vi) NO CLAIMS. There are no pending or, to the
knowledge of the Company, threatened (A) claims, suits or
other proceedings by any employees, former employees or plan
participants or the beneficiaries, spouses or representatives
of any of them, other than ordinary and usual claims for
benefits by participants or beneficiaries, or (B) suits,
investigations or other proceedings by any federal, state,
local or other governmental agency or authority, of or against
any Employee Plan, the assets held thereunder, the trustee of
any such assets or the Company relating to any of the Employee
Plans. If any of the actions described in this subsection are
initiated prior to the Effective Time, the Company shall
notify Fiserv of such action prior to the Effective Time.
(vii) NO PROHIBITED TRANSACTIONS. The Company has not
engaged (A) in any transaction or acted or failed to act in a
manner that violates the fiduciary requirements of Section 404
of ERISA, or (B) in any "prohibited transaction" within the
meaning of Section 406(a) or 406(b) of ERISA, or of Section
4975(c) of the Code, with respect to any Employee Plans, and
will not so engage, act or fail to act prior to the Effective
Time. Furthermore, to the knowledge of the Company, no other
"party in interest", as defined in Section 3(14) of ERISA, or
"disqualified person", as defined in Section 4975(e)(2) of the
Code, has engaged in any such "prohibited transaction".
(viii) NO LIABILITY. No liability has been incurred
by the Company or by a trade or business, whether or not
incorporated, which is deemed to be under common control or
affiliated with the Company within the meaning of Section 4001
of ERISA or Section 414(b), (c), (m) or (o) of the Code (an
"ERISA Affiliate") for any Tax, penalty or other liability
with respect to any Employee Plan and, to the knowledge of the
Company, such Plans do not expect to incur any such liability
prior to the Effective Time.
(ix) REQUIRED CONTRIBUTIONS. The Company has made all
required contributions under each Pension Plan on a timely
basis or, if not yet due, adequate accruals therefore have
been provided for in the financial statements. No Pension Plan
has incurred any "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or Section 412 of the Code and
no Pension
A-26
Plan has applied for or received a waiver of the maximum
funding standards imposed by Section 412 of the Code.
(x) PBGC. Except for required premium payments, no
liability to the Pension Benefit Guaranty Corporation (the
"PBGC") has been incurred by the Company with respect to any
Pension Plan that has not been satisfied in full, and no event
has occurred and there exists no condition or set of
circumstances that could result in the imposition of any such
liability. The Company has complied, or will comply, with all
requirements for premium payments, including any interest and
penalty charges for late payment, due to PBGC on or before the
Effective Time with respect to each Pension Plan for which any
premiums are required. No proceedings to terminate, pursuant
to Section 4042 of ERISA, have been instituted or, to the
knowledge of the Company, are threatened by the PBGC with
respect to any Pension Plan (or any Pension Plan maintained by
an ERISA Affiliate). There has been no termination or partial
termination, as defined in Section 411(d) of the Code and the
regulations thereunder, of any Pension Plan. No reportable
event, within the meaning of Section 4043 of ERISA, has
occurred with respect to any Pension Plan.
(xi) BENEFIT OBLIGATIONS. As of the date of this
Agreement, with respect to each Pension Plan which is covered
by Title IV of ERISA and which is not a multiemployer plan,
the current value of the accumulated benefit obligations
(based on the actuarial assumptions that would be utilized
upon termination of such Pension Plan) do not exceed the
current fair value of the assets of such Pension Plan. Except
as listed in Section 5.01(s)(xi) of the Disclosure Schedule,
there has been (A) no material adverse change in the financial
condition of any such Pension Plan, and (B) no change in
actuarial assumptions with respect to such Pension Plan as a
result of plan amendment, written interpretations,
announcements, change in applicable law or otherwise which,
individually or in the aggregate, would result in the value of
any such Pension Plan's accrued benefits exceeding the current
value of such Pension Plan's assets.
(xii) NO MULTIEMPLOYER PLAN. Neither the Company nor
any ERISA Affiliate has ever maintained, adopted or
established, contributed or been required to contribute to, or
otherwise participated or been required to participate in, nor
will they become obligated to do so through the Effective
Time, any "multiemployer plan" (as defined in Section 3(37) of
ERISA). No amount is due from, or owed by, the Company or any
ERISA Affiliate on account of a "multiemployer plan" (as
defined in Section 3(37) of ERISA) or on account of any
withdrawal therefrom.
(xiii) NO POST-RETIREMENT BENEFITS. No Employee Plan
provides benefits, including any severance or other
post-employment benefit, salary continuation, termination,
death, disability or health or medical benefits (whether or
not insured), life insurance or similar benefit with respect
to current or former employees (or their spouses or
dependents) of the Company beyond their
A-27
retirement or other termination of service other than (A)
coverage mandated by applicable law, (B) death, disability or
retirement benefits under any Pension Plan, (C) deferred
compensation benefits accrued as liabilities on the Company
Financial Statements, (D) benefits, the full cost of which is
borne by the current or former employee (or his or her
beneficiary) or (E) as expressly contemplated by this
Agreement.
(xiv) COBRA. The Company has complied with, and
satisfied, the requirements of Part 6 of Subtitle B of Title I
of ERISA and Section 4980(B) of the Code, and all regulations
thereunder ("COBRA") with respect to each Employee Plan that
is subject to the requirements of COBRA. Each Employee Plan
that is a group health plan, within the meaning of Section
9805(a) of the Code, has complied with and satisfied the
applicable requirements of Sections 9801 and 9802 of the Code.
(t) INSURANCE. The Disclosure Schedule summarizes the amount
and kinds of insurance as to which the Company has insurance policies,
contracts or fidelity bonds relating to the business or operations of
the Company. All such insurance policies, contracts and bonds are in
full force and effect. All such insurance policies, contracts and bonds
covering the assets, business, equipment, properties, operations,
employees, officers and directors of the Company contain provisions
which are reasonable and customary in the Company's industry, and there
is no claim by the Company pending under any of such policies or bonds
as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums due and payable
under all such policies, contracts and bonds have been paid and the
Company is otherwise in compliance in all material respects with the
terms of such policies, contracts and bonds (or other policies,
contracts and bonds providing substantially similar insurance
coverage). No notice of cancellation or termination of any such
insurance policies, contracts or bonds has been given to the Company by
the carrier of any such policy, contract or policy.
(u) BANK ACCOUNTS. Section 5.01(u) of the Disclosure Schedule
lists all bank, money market, savings and similar accounts and safe
deposit boxes of the Company, specifying the account numbers and the
authorized signatories of persons having access to them.
(v) MINUTE BOOKS. The minute books and stock books or share
ledgers, as the case may be, of the Company made available to Fiserv
and Trewit are the only minute books and stock books or share ledgers,
as the case may be, of the Company and contain a reasonably accurate
summary of all meetings of directors (including committees thereof) and
shareholders or actions by written consent and of all transactions in
the capital stock of the Company since the time of incorporation of the
Company.
(w) TAXES.
A-28
(i) COMPLIANCE GENERALLY. The Company (A) has duly
and timely filed or caused to be filed with the appropriate
authorities all Tax Returns of, related to or including the
Company, including its income, assets, payroll or operations,
and properly included the items related thereto in such Tax
Returns, which Tax Returns are true, correct and complete in
all material respects, and (B) has duly and timely paid or
caused to be paid to the appropriate authorities all Taxes
that are due and payable on or before the Effective Time, and
has properly accrued on its books and records in accordance
with GAAP any Tax not then due. The Company has complied with
all applicable laws, rules and regulations relating to the
reporting, payment, collection and withholding of Taxes and
has duly and timely collected or withheld and paid over to the
appropriate authorities all amounts required to be so
collected or withheld and paid over under all applicable laws.
Except as set forth in Section 5.01(w)(i) of the Disclosure
Schedule, all Taxable years or periods for the assessment of
Taxes are closed either by agreement with the applicable
Taxing authority or by operation of the normal statute of
limitations or, if not yet closed, will close by operation of
the normal statute of limitations for such Tax Returns
(without extension). Section 5.01(w)(i) of the Disclosure
Schedule sets forth a list of each jurisdiction where the
Company files a Tax Return and the type of Tax Returns filed
during the past five years. The Company has made available for
review by Fiserv and Trewit true, correct and complete copies
of all Tax Returns filed by or with respect to the Company
during the past five years and of all correspondence to or
from a Taxing authority relating thereto and with respect to
any Proceeding (as hereinafter defined).
(ii) NO ADJUSTMENTS. Except as set forth in Section
5.01(w)(ii) of the Disclosure Schedule, no Taxing authority
has asserted any adjustment that would result in an additional
Tax for which the Company is or may be liable or with respect
to which a lien may be imposed on any asset or property of the
Company which has not been fully paid or which adjustment, if
asserted, would apply to any other period. No such adjustment
is pending or, to the knowledge of the Company, being
considered and there is no basis for any such adjustment.
There is no pending audit, examination, investigation,
dispute, proceeding or claim (collectively, a "Proceeding")
relating to any Tax for which the Company is or may be liable
or which could result in a lien on any of the Company's assets
or property, and, to the knowledge of the Company, no Taxing
authority is contemplating such a Proceeding and there is no
basis for any such Proceeding.
(iii) NO OTHER ARRANGEMENTS. The Company is not a
party to any agreement, contract or arrangement for services
that would result, individually or in the aggregate, in the
payment of any amount that would not be deductible by reason
of Section 162, 280G or 404 of the Code. The Company is not a
"consenting corporation" within the meaning of Section 341(f)
of the Code. The Company does not have any "tax-exempt bond
financed property" or "tax-exempt use property" within the
meaning of Section 168(g) or (h), respectively, of the Code.
The Company has not entered into any sale-leaseback or
leveraged lease
A-29
transaction. None of the assets of the Company is required to
be treated as being owned by any other person pursuant to the
"safe harbor" leasing provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as in effect prior to the
repeal of said leasing provisions. The Company has never made
or been required to make an election under Section 338 of the
Code. The Company has never been included in a consolidated,
combined or unitary Tax Return. The Company is not and has
never been a party to any Tax sharing or Tax allocation
agreement, arrangement or understanding. No Tax authority has
ever asserted that the Company should file a Tax Return in a
jurisdiction where it does not file. The Company does not have
outstanding any power of attorney or ruling request, request
to consent to change a method of accounting, subpoena or
request for information with or by any Taxing authority in
connection with any Tax matter. There is no outstanding power
of attorney authorizing anyone to act on behalf of the Company
in connection with any Tax, Tax Return or Proceeding relating
to any Tax. The Company is not required to include any
adjustment under Section 481 of the Code (or any similar
provision of applicable law) in income for any period (or
portion of a period) beginning after the Closing Date. During
the last two years, the Company has not engaged in any
exchange with a related person (within the meaning of Code
Section 1031(f)) under which gain realized was not recognized
under Section 1031 of the Code.
(iv) TAXES DEFINED. For purposes of this Agreement,
"Taxes" means all federal, state, local and foreign taxes,
charges, fees, levies, deficiencies or other assessments of
whatever kind or nature (including all net income, gross
income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, built-in gains, license, withholding,
payroll, employment, unemployment, excise, estimated,
severance, stamp, occupation, real property, personal
property, intangible property, occupancy, recording, minimum,
environmental, windfall profits or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever),
including any liability therefor as a transferee (including
under Section 6901 of the Code), as a result of Treasury
Regulation Section 1.1502-6, or in each case, any similar
provision under applicable law, or as a result of any Tax
sharing or similar agreement, together with any interest,
penalties, additions to tax or additional amounts imposed by
any Taxing authority (domestic or foreign).
(v) TAX RETURN DEFINED. As used herein, "Tax Return"
includes any return, declaration, report, claim for refund or
credit, information return or statement, and any amendment to
any of the foregoing, including any consolidated, combined or
unitary return or other document (including any related or
supporting information or schedule), filed or required to be
filed with any federal, state, local or foreign governmental
entity or agency in connection with the determination,
assessment, collection or payment of Taxes or the
administration of any laws, regulations or administrative
requirements relating to Taxes or ERISA.
A-30
(vi) Following the transaction contemplated by this
Agreement, the Surviving Corporation will hold at least 90% of
the fair market value of the net assets, and at least 70% of
the fair market value of the gross assets, of the Company
immediately prior to the transaction. For purposes of this
representation, amounts paid by the Company to any of the
stockholders of the Company, amounts used by the Company to
pay reorganization expenses and all redemptions and
distributions made by the Company (except for regular, normal
dividends) will be included as assets of the Company
immediately prior to the transaction.
(vii) Prior to the effectiveness and at the time of
the Merger, the Company has no plan or intention to issue
additional shares of its stock that would result in Fiserv
losing control of the Surviving Corporation within the meaning
of Section 368(c) of the Code.
(viii) Prior to the effectiveness and at the time of
the Merger, the Company is engaged in a historic business or
uses a significant portion of its historic business assets in
a business, within the meaning of Treasury Regulation section
1.368-1(d), which will be owned by the Surviving Corporation
following the Merger.
(ix) At the time of the Merger, the Company will not
have outstanding any warrants, options, convertible
securities, or any other type of right pursuant to which any
person could acquire stock in the Company or in the Surviving
Corporation (a) that, if exercised, would affect Fiserv's
control of the Surviving Corporation within the meaning of
Section 368(c) of the Code, or (b) that, whether exercised or
not, would adversely affect Fiserv's ability to include the
Surviving Corporation in its consolidated, combined or unitary
tax returns for federal, state or local tax purposes.
(x) The Company is not an investment company as
defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
(xi) The Company is not under the jurisdiction of a
court in a title 11 or similar case within the meaning of
Section 368(a)(3)(A) of the Code.
(xii) Fiserv will pay or assume only those expenses
of the Company that are solely and directly related to the
Merger in accordance with the guidelines established in Rev.
Rul. 73-54, 1973-1 C.B. 187.
(x) RELATED PARTY TRANSACTIONS. Since January 1, 2000, except
as described in the Company SEC Reports: (a) no event has occurred that
would be required to be reported by the Company pursuant to Item 404 of
Regulation S-K promulgated by the SEC; and (b) there are no existing
contracts, agreements, business dealings, arrangements
A-31
or other understandings between the Company and any Related Party.
There are no assets of any Related Party that are used in or necessary
to the conduct of the business of the Company. "Related Party" means,
with respect to any party, any officer, director or beneficial owner of
more than 5% of the outstanding voting securities of such party (or any
entity of which such person is an officer, director or beneficial owner
of more than 5% of such entity's outstanding voting securities).
(y) BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by the
Company directly with Fiserv, Trewit and Fiserv Sub, without the
intervention of any other person on behalf of the Company in such
manner as to give rise to any valid claim by any other person against
the Company or Fiserv or Fiserv Sub for a finder's fee, brokerage
commission or similar payment.
(z) PROXY STATEMENT; REGISTRATION STATEMENT; OTHER
INFORMATION. The information, taken as a whole, with respect to the
Company to be included in the Proxy Statement (as defined herein) or,
to the extent provided by the Company in writing for inclusion therein,
the Registration Statement (as defined herein) will not, in the case of
the Proxy Statement or any amendments thereof or supplements thereto,
at the time of the mailing of the Proxy Statement or any amendments or
supplements thereto, and at the time of the Company Special Meeting (as
defined herein) or, in the case of the Registration Statement, at the
time it becomes effective or at the effective time of any
post-effective amendment, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that
no representation is made by the Company with respect to information
supplied in writing by Fiserv, Fiserv Sub or any "affiliate" of Fiserv
specifically for inclusion in the Proxy Statement. The Proxy Statement
(as it relates to the Company) will comply as to form in all material
respects with the provisions of the Exchange Act.
(aa) VOTING REQUIREMENTS. The Company Stockholder Approval is
the only vote of the holders of the Company's capital stock necessary
to approve and adopt this Agreement and the transactions contemplated
hereby.
(bb) REPRESENTATIONS COMPLETE. None of the representations or
warranties made by the Company (as modified by the Disclosure
Schedule), nor any statement made in the Disclosure Schedule or
certificate furnished by the Company pursuant to this Agreement, or
furnished in or in connection with documents mailed or delivered to the
Company in connection with soliciting their consent to this Agreement
and the Merger, contains any untrue statement of a material fact, or
omits to state any material fact necessary in order to the make the
statements contained herein or therein, in the light of the
circumstances under which made, not misleading, except as would not
result, individually or in the aggregate, in a Material Adverse Effect.
SECTION 5.02 REPRESENTATIONS AND WARRANTIES OF FISERV AND FISERV SUB.
Fiserv and Fiserv Sub each represent and warrant to, and agree with, the Company
as follows:
A-32
(a) ORGANIZATION AND QUALIFICATION, ETC. Each of Fiserv and
Fiserv Sub are corporations duly organized, validly existing and in
good standing under the laws of the State of Wisconsin, and the State
of Delaware, respectively, and each has corporate power and authority
to own its properties and assets and to carry on its business as it is
now being conducted. Each of Fiserv and Fiserv Sub is duly qualified to
do business and is in good standing in each jurisdiction where the
failure to be so qualified would have a Material Adverse Effect.
(b) AUTHORITY RELATIVE TO AGREEMENT. Each of Fiserv and Fiserv
Sub has the corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated on its part
hereby. The execution and delivery by Fiserv and Fiserv Sub of this
Agreement and the consummation by each of them of the transactions
contemplated on its part hereby have been duly authorized by their
respective Board of Directors and, in the case of Fiserv Sub, its sole
stockholder. No other corporate proceedings on the part of Fiserv or
Fiserv Sub are necessary to authorize the execution and delivery of
this Agreement by Fiserv or Fiserv Sub or the consummation by Fiserv or
Fiserv Sub of the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Fiserv and Fiserv Sub,
and, assuming the due authorization, execution and delivery at the
Effective Time of this Agreement by the Company, is their valid and
binding agreement, enforceable against Fiserv and Fiserv Sub, as
applicable, in accordance with its terms, except as such enforcement is
subject to the effect of (i) any applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting creditors'
rights generally and (ii) general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing
and other similar doctrines affecting the enforceability of agreements
generally (regardless of whether considered in a proceeding in equity
or at law).
(c) NON-CONTRAVENTION. The execution and delivery of this
Agreement by Fiserv and Fiserv Sub do not and the consummation by
Fiserv and Fiserv Sub of the transactions contemplated hereby will not
(i) violate any provision of the Articles or Certificate of
Incorporation or By-laws of Fiserv or Fiserv Sub, as the case may be,
or (ii) violate, or result, with the giving of notice or the lapse of
time or both, in a violation of, any provision of, or result in the
acceleration of or entitle any party to accelerate (whether after the
giving of notice or lapse of time or both) any obligation under, or
result in the creation or imposition of any material lien, charge,
pledge, security interest or other encumbrance upon any of the property
of Fiserv or Fiserv Sub pursuant to any provision of any mortgage or
lien or material lease, agreement, license or instrument or any order,
arbitration award, judgment or decree to which Fiserv or Fiserv Sub is
a party or by which any of their respective assets is bound and do not
and will not violate or conflict with any other material restriction of
any kind or character to which Fiserv or Fiserv Sub is subject or by
which any of its assets may be bound, and the same does not and will
not constitute an event permitting termination of any such mortgage or
lien or material lease, agreement, license or instrument to which
Fiserv or Fiserv Sub is a party or (iii) violate in any material
respect any law, ordinance or regulation to which Fiserv or Fiserv Sub
is subject, except, in each case or cases, for any such violation,
acceleration, creation, imposition,
A-33
conflict or termination which would not prevent the consummation of the
transactions contemplated hereby by Fiserv or Fiserv Sub.
(d) GOVERNMENT APPROVALS. Except for (i) the filing of the
Certificate of Merger with the Secretary of State of the State of
Delaware and (ii) applicable requirements of the Securities Act, the
Exchange Act, state takeover or securities laws, the rules of Nasdaq,
no consent, authorization, order or approval of, or filing or
registration with, any governmental commission, board or other
regulatory body is required for or in connection with the execution and
delivery of this Agreement by Fiserv and Fiserv Sub and the
consummation by Fiserv and Fiserv Sub of the transactions contemplated
hereby, except (x) as may be necessary as a result of any facts or
circumstances relating solely to the Company or (y) where the failure
to obtain such consents, authorizations or approvals or to make such
filings or registrations would not prevent the consummation of the
transactions contemplated hereby.
(e) FISERV SEC REPORTS. Fiserv has filed with the SEC, at or
prior to the time due, and has made available to the Company true and
complete copies of all forms, reports, schedules, registration
statements and definitive proxy statements (together with all
information incorporated therein by reference, the "Fiserv SEC
Reports") required to be filed by it with the SEC since January 1,
2000. As of their respective dates, the Fiserv SEC Reports complied as
to form in all material respects with the requirements of the Exchange
Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Fiserv SEC
Reports. As of their respective dates and as of the date any
information from such Fiserv SEC Reports has been incorporated by
reference, the Fiserv SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) FISERV FINANCIAL STATEMENTS. Each of the financial
statements of Fiserv (including the related notes) included or
incorporated by reference in the Fiserv SEC Reports (including any
similar documents filed after the date of this Agreement) comply as to
form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the
consolidated financial position of the Fiserv and its consolidated
subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended (subject to
normal year-end adjustments in the case of any unaudited interim
financial statements). Except for liabilities and obligations incurred
in the ordinary course of business consistent with past practice and
which could not reasonably be expected to have, individually or in the
aggregate, a Fiserv Material Adverse Effect (as defined herein), since
the date of the most recent audited consolidated balance sheet included
in the Fiserv SEC Reports, neither the Fiserv nor any of the Fiserv
Subsidiaries has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by
A-34
GAAP to be set forth on a consolidated balance sheet of the Fiserv and
its consolidated subsidiaries or in the notes thereto.
(g) PROXY STATEMENT; REGISTRATION STATEMENT; OTHER
INFORMATION. The information, taken as a whole, with respect to Fiserv
or its subsidiaries to be included in the Proxy Statement or the
Registration Statement will not, in the case of the Proxy Statement or
any amendments thereof or supplements thereto, at the time of the
mailing of the Proxy Statement or any amendments or supplements
thereto, and at the time of the Company Special Meeting, or, in the
case of the Registration Statement, at the time it becomes effective or
at the effective time of any post-effective amendment, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by Fiserv
or Fiserv Sub with respect to information supplied in writing by the
Company or any affiliate of the Company specifically for inclusion in
the Proxy Statement or the Registration Statement. Each of the Proxy
Statement and Registration Statement (as it relates to Fiserv and its
subsidiaries) will comply as to form in all material respects with the
provisions of the Exchange Act and the Securities Act, as applicable.
(h) CAPITALIZATION OF FISERV SUB. The authorized capital stock
of Fiserv Sub consists of 1,000 shares of common stock, $.01 par value,
of which 100 shares are validly issued and outstanding, fully paid and
nonassessable and all of which are owned by Fiserv.
(i) CAPITALIZATION OF FISERV. The authorized capital stock of
Fiserv consists of 300,000,000 shares of Fiserv Common Stock and
25,000,000 shares of Preferred Stock, no par value ("Preferred Stock"),
of which, as of the date hereof, no shares of Preferred Stock and
approximately 190,000,000 shares of Fiserv Common Stock are validly
issued and outstanding, fully paid and nonassessable. Except for
approximately 10,500,000 shares of Fiserv Common Stock reserved for
issuance as of the date hereof under the various Fiserv stock option
plans, as of the date hereof, Fiserv has no commitments to issue or
sell any of its capital stock or any securities or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire from Fiserv, any shares of its capital stock
and no securities or obligations evidencing such rights are
outstanding.
(j) TAX REPRESENTATIONS.
(i) Fiserv Sub is a newly organized corporation that
was formed solely to engage in the Merger.
(ii) Prior to the effectiveness and at the time of
the Merger, Fiserv will be in control of Fiserv Sub within the
meaning of Section 368(c) of the Code.
(iii) Prior to the effectiveness and at the time of
the Merger, Fiserv has no plan or intention to: (A) liquidate
the Surviving Corporation, (B) merge the
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Surviving Corporation with or into another corporation or (C)
sell or otherwise dispose of the stock of the Surviving
Corporation; except for transfers of stock or assets described
in Section 368(a)(2)(C) of the Code or Treasury Regulation
section 1.368-2(k)(2).
(iv) Assuming the veracity of the Company's
representations in Sections 5.01(w)(vii) and (ix), for at
least two years following the Effective Date, the Surviving
Corporation will not issue additional shares of stock that
would result in Fiserv losing control of the Surviving
Corporation within the meaning of Section 368(c) of the Code.
(v) Assuming the veracity of the Company's
representation in Section 5.01(w)(viii), following the
transaction, the Surviving Corporation will, and Fiserv will
cause the Surviving Corporation to, continue the historic
business of the Company or continue to use a significant
portion of the Company's historic business assets in a
business, within the meaning of Treasury Regulation section
1.368-1(d).
(vi) Fiserv Sub has no liabilities that will be assumed
by the Surviving Corporation in the Merger or to which assets
transferred to the Surviving Corporation in the Merger will be
subject.
(vii) Immediately prior to the effectiveness of the
Merger, Fiserv is not an investment company as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(viii) Prior to the effectiveness and at the time of
the Merger, Fiserv has no plan or intention in connection with
the Merger to directly or indirectly reacquire any of its
shares of Fiserv Common Stock issued in the transaction
(except for fractional share interests deemed issued and
redeemed). Prior to the effectiveness and at the time of the
Merger, no person related to Fiserv (within the meaning of
Treasury Regulation section 1.368-1(e)(3)) and no person
acting as an intermediary for Fiserv or such related person
has a plan or intention in connection with the Merger to
acquire any of the Fiserv Common Stock issued in the
transaction.
( k) FISERV COMMON STOCK ISSUED TO STOCKHOLDERS. The shares of
Fiserv Common Stock to be issued to the stockholders of the Company as
Merger Consideration in accordance with Section 3.01(a) hereof shall,
upon consummation of the Merger, be validly issued and outstanding,
fully paid and nonassessable shares of Fiserv Common Stock.
( l) ABSENCE OF MATERIAL ADVERSE EFFECT. Since December 31,
2001, Fiserv has not experienced any change that could have a Fiserv
Material Adverse Effect. "Fiserv Material Adverse Effect" means any
change in, or effect on, or series of related changes
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in, or related effects on, the business of Fiserv as currently
conducted by Fiserv and its subsidiaries, taken as a whole, that is
materially adverse to the results of its operations or financial or
other condition before giving effect to the transactions contemplated
by this Agreement and other than such changes or effects generally
affecting the industry of Fiserv and its subsidiaries or the economy of
the United States.
( m) BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried out by Fiserv,
Trewit and Fiserv Sub directly with the Company, without the
intervention of any person on behalf of Fiserv or Fiserv Sub in such
manner as to give rise to any valid claim by any person against the
Company or Fiserv or Fiserv Sub for a finder's fee, brokerage
commission or similar payment.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
SECTION 6.01 CONDUCT OF BUSINESS. During the period from the date
hereof to the Effective Time, except as otherwise contemplated by this
Agreement, the Company shall conduct its operations according to its ordinary
and usual course of business and the Company shall use its commercially
reasonable efforts to preserve substantially intact its business organization,
keep available the services of its officers and employees and maintain its
present relationships with licensors, suppliers, distributors, customers and
others having significant business relationships with it. The Company shall
cause representatives of the Company to confer with representatives of Fiserv,
Trewit and Fiserv Sub to keep them informed with respect to the general status
of the on-going operations of the business of the Company. For purposes of this
Article VI, the term "Company" shall be deemed to include the Subsidiaries where
relevant or appropriate.
SECTION 6.02 ACCESS TO INFORMATION BY FISERV, TREWIT AND FISERV SUB.
Fiserv, Trewit and Fiserv Sub shall prior to the Effective Time have access to
the business and properties of the Company and information concerning its
financial and legal condition as Fiserv, Trewit and Fiserv Sub deem reasonably
necessary or advisable in connection with the consummation of the transactions
contemplated hereby, provided that such access shall be during normal business
hours and shall not interfere with normal operations of the Company. The Company
agrees to permit Fiserv, Trewit and Fiserv Sub and their authorized
representatives, including Deloitte & Touche LLP, subject only to their
agreement to maintain the confidentiality of any Company information, to have or
cause them to be permitted to have, after the date hereof and until the
Effective Time, full access to the premises, books and records of the Company
during normal business hours, and the officers of the Company will furnish
Fiserv, Trewit and Fiserv Sub with such financial and operating data and other
information with respect to the business and properties of the Company as
Fiserv, Trewit and Fiserv Sub shall from time to time reasonably request.
SECTION 6.03 CONSENTS AND AUTHORIZATIONS. As soon as practicable, each
of the parties hereto will commence to take all reasonable action to obtain all
authorizations, consents, orders and approvals of all third parties and of all
federal, state and local regulatory bodies and officials which may be or become
necessary for its execution and delivery of, and the performance of its
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obligations pursuant to, this Agreement and will cooperate fully with the other
parties in promptly seeking to obtain all such authorizations, consents, orders
and approvals.
SECTION 6.04 NON-ASSIGNABLE LICENSES, LEASES AND CONTRACTS. The Company
shall use its commercially reasonable efforts to obtain and deliver to Fiserv or
Fiserv Sub, as the case may be, at or prior to the Effective Time such consents
or waivers as are required in order that any contract listed or required to be
listed on the Disclosure Schedule which would be breached or violated, or would
give any other party the right to cancel the same, as a result of the occurrence
of the Merger hereunder, shall not be so breached or violated or result in such
right of cancellation. The Company shall use its commercially reasonable efforts
to obtain and deliver to Fiserv or Fiserv Sub, as the case may be, at or prior
to the Effective Time such consents or waivers as shall be reasonably requested
by Fiserv or Fiserv Sub, as the case may be, for any contracts not required to
be listed on the Disclosure Schedule which, as a result of the occurrence of the
Merger hereunder, would be breached or violated or would give any other party
the right to cancel the same, in order that such contracts shall not be so
breached or violated or result in such right of cancellation.
SECTION 6.05 EMPLOYEE MATTERS. The employees of the Company shall
become employees of the Surviving Corporation following the Merger, such
employment to be employment at will. Thereafter, for so long as they are
employed by the Surviving Corporation, they shall be paid, depending on their
duties and responsibilities, in accordance with Fiserv's compensation policies
with respect to its employees generally. In addition, the Company's employee
benefit plans shall be terminated as soon as practicable after the Effective
Time and the employees of the Company shall be entitled to participate in the
benefit plans that Fiserv maintains for its employees, generally on the same
terms and conditions as other employees of Fiserv (except with respect to
Fiserv's sabbatical policy and quarter century retirement stock plan). For this
purpose, each "year of service" with the Company shall be treated as a "year of
service" with Fiserv (except for Fiserv's sabbatical policy and quarter century
retirement stock plan).
SECTION 6.06 TAXES. The Company will duly and timely file all Tax
Returns required to be filed on or prior to the Effective Time, duly and timely
pay all Taxes required to be paid on or prior to the Effective Time and accrue
on the Company's books and records in accordance with GAAP any Tax of or
relating to the Company, its income, assets, payroll or operations which is not
then due. Such Tax Returns shall be true, correct and complete, shall be
prepared on a basis consistent with prior Tax Returns of the Company and shall
not make, amend or terminate any election or change any accounting method,
practice or procedure without Fiserv's prior written consent. The Company shall
give Fiserv a copy of each such Tax Return for its review and comments prior to
filing. The Company shall duly and timely withhold or collect and pay over to
the proper governmental authority any Taxes required to be withheld or collected
by the Company on or before the Effective Time under all applicable laws.
SECTION 6.07 SOLICITATION OF ALTERNATIVE TRANSACTION.
(a) The Company will not, and will cause its Subsidiaries and
its and their officers, directors, employees, financial advisors,
counsel, representatives and agents
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(collectively, "Representatives") not to, (i) directly or indirectly,
solicit, initiate, encourage or otherwise facilitate the making of an
Acquisition Proposal; (ii) participate or engage in or encourage in any
way negotiations or discussions concerning, or provide any non-public
information to, any person or entity relating to an Acquisition
Proposal, or which may reasonably be expected to lead to an Acquisition
Proposal; or (iii) agree to or endorse any Acquisition Proposal;
provided, however, that nothing contained in this Section 6.07 or in
any other provision of this Agreement will prohibit the Company or the
Company's Board of Directors from taking and disclosing to the
Company's stockholders a position contemplated by Rule 14e-2
promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders that in the good faith judgment of the Company's
Board of Directors is required by its fiduciary duties to its
stockholders or otherwise under applicable law.
(b) Notwithstanding the provisions of Section 6.07(a), this
Agreement will not prohibit the Company's Board of Directors from,
prior to obtaining the Company Stockholder Approval, furnishing
nonpublic information to or entering into discussions or negotiations
with, any person or entity that makes an unsolicited Superior Proposal,
if, and only to the extent that, (i) in the good faith judgment of the
Company's Board of Directors, the Board is required by its fiduciary
duties to its stockholders or otherwise under applicable law to provide
such information or enter into such discussions or negotiations with
the party making such unsolicited Superior Proposal; (ii) prior to
first furnishing nonpublic information to, or first entering into
substantive discussions and negotiations with, such person or entity
after the date hereof, (A) provide prior written notice to Fiserv to
the effect that it intends to furnish information to, or enter into
discussions or negotiations with a person or entity making an
Acquisition Proposal, and (B) receive from such person or entity an
executed confidentiality agreement with terms no less favorable to the
Company than the Confidentiality Agreement between the Company and
Trewit dated May 22, 2002 (the "Confidentiality Agreement"); and (iii)
concurrently provide Fiserv with all material non-public information
regarding the Company that is to be provided to such person or entity
and that Fiserv has not previously received from the Company, and the
Company provides Fiserv and Trewit with an outline of the material
terms of the Superior Proposal and keeps Fiserv and Trewit informed as
to any changes or modifications to such material terms. For purposes of
this Section 6.07 and all other provisions of this Agreement,
information provided to officers of Trewit Inc. shall be deemed
provided to Fiserv.
"Acquisition Proposal" shall mean any offer or proposal for (i) a
transaction or series of related transactions pursuant to which (A) any
person or entity who does not currently own 15% or more of the
outstanding shares of Company Common Stock (a "Non-Affiliated Person")
acquires 15% or more of the outstanding shares of Company Common Stock,
including without limitation a tender offer or an exchange offer which,
if consummated, would result in any Non-Affiliated Person acquiring 15%
or more of the outstanding shares of Company Common Stock or (B) any
person or entity who currently owns more than 15% of the outstanding
shares of Company Common Stock (a "Current Affiliated Person") acquires
50% or more of the outstanding shares of Company Common Stock,
including without limitation a tender offer or an exchange offer which,
if
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consummated, would result in any Current Affiliated Person acquiring
50% or more of the outstanding shares of Company Common Stock, (ii) a
merger or other business combination involving the Company pursuant to
which any Non-Affiliated Person acquires securities representing 15% or
more, or an Current Affiliated Person acquires securities representing
50% or more, of the aggregate voting power of all outstanding
securities of the company surviving the merger or business combination,
or (iii) any other transaction pursuant to which any person or entity
acquires control of assets (including for this purpose the outstanding
equity securities of any Company Subsidiary) of the Company having a
fair market value equal to 15% or more of the fair value of all of the
assets of the Company immediately prior to such a transaction.
"Superior Proposal" shall mean a bona fide Acquisition Proposal that
the Board of Directors of the Company has in good faith determined
after consultation with its financial advisors and outside counsel, to
be more favorable to the Company's stockholders than the Merger.
(c) The Company agrees that it will notify Fiserv within two
(2) business days if it or any of its Representatives receives an
Acquisition Proposal or if any discussions or negotiations are sought
to be initiated or continued with the Company or its Representatives
concerning an Acquisition Proposal.
(d) Upon execution of this Agreement, the Company will
immediately terminate all discussions with any person or entity (other
than Fiserv and its subsidiaries) concerning any Acquisition Proposal,
and will request that such person or entities promptly return any
confidential information furnished by the Company in connection with
any Acquisition Proposal. The Company will not waive any provision of
any confidentiality, standstill or similar agreement entered into with
any person or entity regarding any Acquisition Proposal, and prior to
the Closing will enforce all such agreements in accordance with their
terms.
(e) Nothing contained in this Section 6.07 shall (i) permit
the Company to terminate this Agreement (except as specifically
provided in Article VIII hereof), or (ii) permit the Company to enter
into any agreement providing for an Acquisition Proposal (other than
the confidentiality agreement as provided, and in the circumstances and
under the conditions set forth, above) for as long as this Agreement
remains in effect.
SECTION 6.08 PROXY MATERIAL; REGISTRATION STATEMENT.
(a) As promptly as practicable after the execution of this
Agreement, the Company shall prepare and file with the SEC a proxy
statement relating to the meeting of the Company's stockholders to be
held in connection with the Merger (together with any amendments
thereof or supplements thereto, in each case in the form or forms
mailed to the Company's stockholders and Fiserv's stockholders, the
"Proxy Statement") and Fiserv shall prepare and file with the SEC a
registration statement on Form S-4 (together with all amendments
thereto, the "Registration Statement") in which the Proxy Statement
shall be included as a prospectus, in connection with the registration
under the Securities Act of
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the shares of Fiserv Common Stock to be issued pursuant to the Merger.
Each of Fiserv and the Company will use all reasonable efforts to cause
the Registration Statement to become effective as promptly as
practicable, and, prior to the effective date of the Registration
Statement, Fiserv shall take all or any action required under any
applicable federal or state securities laws in connection with the
issuance of shares of Fiserv Common Stock in the Merger. Each of Fiserv
and the Company shall furnish all information concerning it and the
holders of its capital stock as the other may reasonably request in
connection with such actions and the preparation of the Registration
Statement and Proxy Statement. As promptly as practicable after the
Registration Statement shall have become effective, the Company shall
mail the Proxy Statement to its stockholders. No amendment or
supplement to the Proxy Statement or the Registration Statement will be
made by Fiserv or the Company without the approval of the other party
(which approval shall not be unreasonably withheld or delayed). Fiserv
and the Company each will advise the other, promptly after it receives
notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the
issuance of any stop order, the suspension of the qualification of the
Fiserv Common Stock issuable in connection with the Merger for offering
or sale in any jurisdiction, or any request by the SEC for amendment of
the Proxy Statement or the Registration Statement or comments thereon
and responses thereto or requests by the SEC for additional
information.
(b) The information supplied by Fiserv for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the
time the Registration Statement is declared effective, (ii) the time
the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to the stockholders of the Company, (iii) the time of the
Company Special Meeting, and (iv) the Effective Time, contain (as to
Fiserv and its subsidiaries) any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. If at
any time prior to the Effective Time any event or circumstance relating
to Fiserv or any of its subsidiaries, or their respective officers or
directors, should be discovered by Fiserv which should be set forth in
an amendment or a supplement to the Registration Statement or Proxy
Statement, Fiserv shall promptly inform the Company. All documents that
Fiserv is responsible for filing with the SEC in connection with the
transactions contemplated herein will comply as to form and substance
in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as applicable.
(c) The information supplied by the Company for inclusion in
the Registration Statement and the Proxy Statement shall not, at (i)
the time the Registration Statement is declared effective, (ii) the
time the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to the stockholders of the Company, (iii) the
time of the Company Special Meeting, and (iv) the Effective Time,
contain (as to the Company and each of its Subsidiaries) any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. If at any time prior to the
Effective Time any event or circumstance relating to the Company or any
of its Subsidiaries, or their respective
A-41
officers or directors, should be discovered by the Company which should
be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, the Company shall promptly inform Fiserv.
All documents that the Company is responsible for filing with the SEC
in connection with the transactions contemplated herein will comply as
to form and substance in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable.
SECTION 6.09 STOCKHOLDERS' MEETINGS.
(a) The Company shall, in accordance with applicable law and
its Certificate of Incorporation and By-laws, duly call, give notice
of, convene and hold a special meeting (which, as may be duly
adjourned, the "Company Special Meeting") of its stockholders for the
purpose of approving and adopting the agreement of merger (as such term
is used in Section 251 of Delaware Law) set forth in this Agreement and
approving the Merger by the Company Stockholder Approval. The Company
agrees to use its reasonable efforts to cause the Company Special
Meeting to occur as soon as practicable after the date hereof, but not
earlier than 20 business days after the date the Proxy Statement is
first mailed to its stockholders. The Board of Directors of the Company
will, subject to Section 6.09(b), recommend the adoption and approval
by the Company's stockholders of this Agreement and the approval by the
Company's stockholders of the Merger.
(b) The Board of Directors of the Company must not withdraw,
or modify in a manner adverse to Fiserv or Fiserv Sub, its
recommendation to its stockholders referred to in subsection (a) above
unless (i) the Company has complied with the terms of Section 6.07 in
all material respects, including, without limitation, the requirement
in Section 6.07 that it notify Fiserv after its receipt of any
Acquisition Proposal and (ii) such withdrawal or modification is
required under applicable law in order for the Board of Directors of
the Company to comply with its fiduciary duties to its stockholders.
Unless this Agreement is previously terminated in accordance with
Article VIII, the Company will submit this Agreement to its
stockholders at the Company Stockholders' Meeting even if the Board of
Directors of the Company determines at any time after the date hereof
that it is no longer advisable or recommends that the Company
stockholders reject it (and not postpone or adjourn such meeting or the
vote by the Company's stockholders upon this Agreement and the Merger
to another date without Fiserv's approval).
SECTION 6.10 STATE TAKEOVER STATUTES. The Company and its Board of
Directors shall (a) take all reasonable actions necessary to ensure that no
"Fair Price", "Control Share Acquisition", "Moratorium" or other anti-takeover
statute, or similar statute or regulation, is or becomes applicable to this
Agreement or the Stockholder Agreements, the Merger or any of the other
transactions contemplated hereby or thereby and (b) if any "Fair Price",
"Control Share Acquisition", "Moratorium" or other anti-takeover statute, or
similar statute or regulation, becomes applicable to this Agreement or the
Stockholder Agreements, the Merger or any other transaction contemplated hereby
or thereby, take all action necessary to ensure that the Merger and the other
transactions contemplated hereby and thereby, may be consummated as promptly as
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practicable on the terms contemplated hereby and otherwise to minimize the
effect of such statute or regulation on the Merger and the other transactions
contemplated hereby and thereby.
SECTION 6.11 AFFILIATES. Within 10 days after the date of this
Agreement, the Company shall deliver to Fiserv a letter identifying all persons
who are "affiliates" of the Company for purposes of Rule 145 under the
Securities Act. The Company shall use reasonable efforts to cause each such
person to deliver to Fiserv at least five business days prior to the Company
Special Meeting, a written agreement covering Rule 145 matters in customary form
and reasonably acceptable to Fiserv and the Company from each such person.
SECTION 6.12 STOCKHOLDER LITIGATION. The parties shall cooperate and
consult with one another, to the fullest extent possible, in connection with any
stockholder litigation against any of them or any of their respective directors
or officers with respect to the transactions contemplated by this Agreement. In
furtherance of and without in any way limiting the foregoing, each of the
parties shall use its respective reasonable best efforts to prevail in such
litigation so as to permit the consummation of the transactions contemplated by
this Agreement in the manner contemplated by this Agreement. Notwithstanding the
foregoing, the Company shall not compromise or settle any litigation commenced
against it or its directors or officers relating to this Agreement or the
transactions contemplated hereby (including the Merger) without Fiserv's prior
written consent.
SECTION 6.13 NASDAQ LISTING. Fiserv shall prepare and submit to Nasdaq
a listing application for the Fiserv Common Stock to be issued in the Merger
pursuant to Article III of this Agreement. The Company shall cooperate with
Fiserv in such listing application.
SECTION 6.14 CONFIDENTIALITY. Fiserv and its subsidiaries on the one
hand and the Company on the other hand will comply with, and will cause their
respective representatives to comply with, in all respects, all of their
respective obligations under the Confidentiality Agreement, and in no event,
will the negotiation, entering into or termination of this Agreement be deemed
to waive or otherwise adversely affect the rights and obligations of the parties
under the Confidentiality Agreement, which rights and obligations will continue
in full force and effect in accordance with their terms.
SECTION 6.15 FURTHER ACTIONS. Subject to the terms and conditions
herein provided and without being required to waive any conditions herein
(whether absolute, discretionary, or otherwise), each of the parties hereto
agrees to use all commercially reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper, or
advisable to consummate and make effective the transactions contemplated by this
Agreement. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement will take all such
necessary action.
SECTION 6.16 OFFICERS' AND DIRECTORS' INDEMNIFICATION. Fiserv and the
Surviving Corporation will provide to the directors and officers of the Company
indemnification to the fullest extent provided by the Company's Certificate of
Incorporation and Bylaws, as in effect as of the date of this Agreement, with
respect to matters occurring prior to the Effective Time, including without
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limitation the authorization of this Agreement and the transactions contemplated
hereby until the six year anniversary date of the Effective Time (or, in case of
matters occurring prior to the Effective Time giving rise to claims that are
made prior to but which have not been resolved by the sixth anniversary of the
Effective Time, until such matters are finally resolved).
SECTION 6.17 NOTIFICATION OF CERTAIN MATTERS. The Company will give
prompt written notice to Fiserv, and Fiserv will give prompt written notice to
the Company, of (a) the occurrence, or nonoccurrence, of any event the
occurrence, or nonoccurrence, of which would be likely to cause any
representation or warranty contained herein to be untrue or inaccurate in any
material respect at or prior to the Effective Date and (b) any material failure
of the Company or Fiserv, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 6.15 will not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
SECTION 6.18 PUBLIC ANNOUNCEMENTS. Fiserv and Fiserv Sub, on the one
hand, and the Company, on the other hand, will consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, and shall not issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable law, court process or by Nasdaq rules. The parties agree
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement will be in the form previously agreed to by the
parties.
SECTION 6.19 VOTING OF SHARES. To induce Fiserv to execute this
Agreement, certain officers, directors and stockholders of the Company have
executed and delivered as of the date hereof Agreements to Facilitate Merger in
the form attached hereto as Exhibit C, pursuant to which each such person has
agreed to vote his or her shares of Company Common Stock in favor of the Merger
at the Company Special Meeting. At the request of Fiserv, after the execution of
this Agreement the Company will use all reasonable efforts to have other
officers and directors of the Company also execute Agreements to Facilitate
Merger.
SECTION 6.20 EFFECTIVE TIME BALANCE SHEET. At least ten (10) calendar
days prior to the date on which the parties hereto anticipate that the Effective
Time will fall, the Company will deliver to Fiserv and Trewit what it believes
to be the Effective Time Balance Sheet. Fiserv, Trewit and the Company will
thereafter proceed in good faith to finalize, and agree upon, such Effective
Time Balance Sheet, as soon as practicable.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01 CONDITIONS TO OBLIGATIONS OF FISERV, FISERV SUB, AND THE
COMPANY. The respective obligations of each party to consummate the Merger shall
be subject to the fulfillment at or prior to the Closing of the following
conditions:
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(a) NO INJUNCTION. None of Fiserv, Fiserv Sub, or the Company
shall be subject to any final order, decree, or injunction of a court
of competent jurisdiction within the United States that (i) prevents or
materially delays the consummation of the Merger, or (ii) would impose
any material limitation on the ability of Fiserv to effectively to
exercise full rights of ownership of the Company or the assets or
business of the Company.
(b) STOCKHOLDER APPROVAL. The approval of the stockholders of
the Company hereof shall have been obtained, in accordance with
Delaware Law and the Company's Certificate of Incorporation and Bylaws.
(c) REGISTRATION STATEMENT. The Registration Statement (as
amended or supplemented) shall have become effective under the 1933 Act
and shall not be subject to any "stop order," and no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness or
qualification thereof shall have been initiated and be continuing or
have been threatened and be unresolved. Fiserv shall also have received
all state securities law or blue sky authorizations necessary to carry
out the transactions contemplated hereby.
(d) NASDAQ LISTING. The shares of Fiserv Common Stock to be
delivered pursuant to the Merger shall have been duly listed on the
Nasdaq, subject to official notice of issuance.
(e) EFFECTIVE TIME BALANCE SHEET. Fiserv, Trewit and the
Company shall have agreed upon the Effective Time Balance Sheet.
SECTION 7.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF FISERV AND
FISERV SUB. The obligations of Fiserv and Fiserv Sub to consummate the Merger
under this Agreement are subject to the satisfaction or waiver by Fiserv and
Fiserv Sub prior to or at the Effective Time of each of the following
conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Company contained in this
Agreement, as modified by the Disclosure Schedule, which for purposes
of this Section 7.02(a) shall be read as though none of them contained
any materiality qualifications, shall be true and correct at and as of
the Effective Time as though made at and as of that time other than
such representations and warranties as are specifically made as of
another date, except where the failure of such representations and
warranties to be true and correct in all respects, individually or in
the aggregate, have not had and would not reasonably be expected to
have a Material Adverse Effect, and the Company shall have delivered to
Fiserv and Fiserv Sub a certificate to that effect.
(b) COMPLIANCE WITH COVENANTS. The Company shall have
performed and complied in all material respects with all covenants of
this Agreement to be performed or complied with by it at or prior to
the Effective Time, and the Company shall have delivered to Fiserv and
Fiserv Sub a certificate to that effect.
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(c) ALL PROCEEDINGS TO BE SATISFACTORY. Fiserv and Fiserv Sub
and their counsel shall have received certified or other copies of all
documents relating to the Company incident to the transactions
contemplated hereby as Fiserv, Fiserv Sub or said counsel may
reasonably request and such documents shall be reasonably satisfactory
in form and substance to Fiserv Fiserv Sub and said counsel.
(d) OPINION OF COUNSEL FOR THE COMPANY. Fiserv and Fiserv Sub
shall have received the favorable opinion of Hallett & Perrin, P.C.,
counsel to the Company, dated the Effective Time, substantially in the
form and to the effect set forth in Exhibit D annexed hereto.
(e) LEGAL ACTIONS OR PROCEEDINGS. No legal action or
proceeding shall have been instituted after the date hereof against the
Company or against Fiserv or Fiserv Sub, arising by reason of the
Merger pursuant to this Agreement, which is reasonably likely to have a
Material Adverse Effect.
(f) TAX MATTERS. The Company shall have delivered to Fiserv
and Fiserv Sub a FIRPTA Affidavit in the form of Exhibit B annexed
hereto with respect to the Company, signed by the Company under
penalties of perjury.
(g) CONSENTS. On or prior to the Effective Time, the Company
shall obtained the consents or waivers to the Merger set forth in
Exhibit E annexed hereto.
(h) EMPLOYMENT AGREEMENTS. Joseph A. Hensley, John D. Weymer,
Sharlie McRaney, Dwight Mankin and Eric S. Peterson shall have each
executed and delivered an employment agreement with the Company in form
and substance mutually satisfactory to Fiserv and such employee.
(i) INDEMNITY AGREEMENT. John Ward Hunt shall have executed a
delivered the Indemnity Agreement in the form attached hereto as
Exhibit F.
(j) AFFILIATES' LETTERS. Fiserv shall have received a letter
from each of the Company's "affiliates" pursuant to Section 6.11
hereof.
(k) SUPPORTING DOCUMENTS. On or prior to the Effective Time,
Fiserv, Fiserv Sub and their counsel shall have received copies of the
following supporting documents:
(i) (A) copies of the Certificate of Incorporation of
the Company and all amendments thereto, certified as of a
recent date by the Secretary of State of the State of Delaware
and (B) a certificate of said Secretary dated as of a recent
date as to the due incorporation and good standing of the
Company and listing all documents of the Company on file with
said Secretary; and
(ii) certificates of the Secretary or an Assistant
Secretary of the Company, dated the Effective Time, and
certifying substantially to the effect (A) that attached
thereto is a true and complete copy of the By-laws of the
Company as in effect on the date of such certification and at
all times since January 1, 2001;
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(B) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors and minutes of
the Company Special Meeting authorizing the execution,
delivery and performance of this Agreement and that all such
resolutions and minutes are still in full force and effect and
are all the resolutions and minutes adopted in connection with
the transactions contemplated by this Agreement; (C) that the
Certificate of Incorporation of the Company have not been
amended since the date of the last amendment referred to in
the certificate delivered pursuant to clause (i)(A) above; and
(D) as to the incumbency and specimen signature of each
officer of the Company executing this Agreement and any
certificate or instrument furnished pursuant hereto, and a
certificate by another officer of the Company as to the
incumbency and signature of the officer signing the
certificate referred to in this paragraph (ii).
All such documents shall be reasonably satisfactory in form
and substance to Fiserv, Fiserv Sub and their counsel.
SECTION 7.03 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to consummate the Merger under this Agreement are
subject to the satisfaction or waiver by the Company prior to or at the
Effective Time of each of the following conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Fiserv and Fiserv Sub contained in
this Agreement or in any closing certificate or document delivered to
the Company pursuant hereto shall be true and correct on and as of the
Effective Time as though made at and as of that date, other such
representations and warranties as are specifically made as of another
date, and Fiserv and Fiserv Sub shall each have delivered to the
Company a certificate to that effect.
(b) COMPLIANCE WITH COVENANTS. Each of Fiserv and Fiserv Sub
shall have performed and complied in all material respects with all
covenants of this Agreement to be performed or complied with by Fiserv
and/or Fiserv Sub on or prior to the Effective Time, and Fiserv and
Fiserv Sub shall each have delivered to the Company and the
Shareholders a certificate to such effect.
(c) ALL PROCEEDINGS TO BE SATISFACTORY. The Company and the
Shareholders and their counsel shall have received all such counterpart
originals or certified or other copies of all documents relating to
Fiserv and Fiserv Sub incident to the transactions contemplated hereby
as the Company and the Shareholders and said counsel may reasonably
request and such documents shall be reasonably satisfactory in form and
substance to the Company and the Shareholders and said counsel.
(d) OPINION OF COUNSEL FOR FISERV AND FISERV SUB. The Company
shall have received the favorable opinion of Charles W. Sprague,
General Counsel of Fiserv, dated the Effective Time, substantially in
the form and to the effect set forth in Exhibit G annexed hereto.
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(e) LEGAL ACTIONS OR PROCEEDINGS. No legal action or
proceeding shall have been instituted that is reasonably likely to have
a Fiserv Material Adverse Effect.
(f) SUPPORTING DOCUMENTS. On or prior to the Effective Time,
the Company shall have received copies of the following supporting
documents:
(i) (A) copies of the Articles or Certificate of
Incorporation of Fiserv and Fiserv Sub, and all amendments
thereto, certified as of a recent date by the Department of
Financial Institutions of the State of Wisconsin or the
Secretary of State of the State of Delaware, as applicable,
(B) a certificate of said Department or Secretary of State
dated as of a recent date as to the status of Fiserv and (C) a
certificate of said Secretary dated as of a recent date as to
the good standing and due incorporation of Fiserv Sub; and
(ii) a certificate of the Secretary or an Assistant
Secretary of each of Fiserv and Fiserv Sub dated the Effective
Time and certifying substantially to the effect (A) that
attached thereto is a true and complete copy of the By-laws of
the particular company as in effect on the date of such
certification and at all times since January 1, 2001 or its
date of incorporation, if more recent; (B) that attached
thereto is a true and complete copy of resolutions adopted by
the Board of Directors of the particular company authorizing
the execution, delivery and performance of this Agreement and
that all such resolutions are still in full force and effect
and are all the resolutions adopted in connection with the
transactions contemplated by this Agreement; (C) that the
Articles of or Certificate Incorporation of the particular
corporation have not been amended since the date of the last
amendment referred to in the certificate delivered pursuant to
clause (i)(1) above; and (D) as to the incumbency and specimen
signature of each officer of the particular company executing
this Agreement and a certification by another officer of such
company as to the incumbency and signature of the officer
singing the certificate referred to in this paragraph (ii).
All such documents shall be reasonably satisfactory in form
and substance to the Company and its counsel.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
SECTION 8.01 TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual consent of Fiserv and Fiserv Sub, on the one
hand, and the Company, on the other hand;
(b) by either Fiserv and Fiserv Sub, on the one hand, or the
Company on the other hand, if (i) the Effective Time shall not have
occurred on or before that is the date that is six months from the date
of this Agreement (provided that the right to terminate
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this Agreement under this Section 8.01(b) shall not be available to any
party whose failure to fulfill, or cause to be fulfilled, any
obligation under this Agreement or material breach of this Agreement
has been the cause of or resulted in the failure of the Effective Time
to occur on or before such time) or (ii) any court of competent
jurisdiction or other governmental body shall have issued an order,
decree or ruling or taken any other action (which order, decree or
ruling the parties shall use their commercially reasonable efforts to
lift or reverse) permanently restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable, provided, however, if a
proceeding shall have been initiated by a governmental entity to
restrain, enjoin or otherwise prohibit the Merger or any other
transaction contemplated by the Agreement, and such proceeding is
continuing on the date six months after the date referred to in clause
(b)(i) above, then either Fiserv and Fiserv Sub, on the one hand, or
the Company, on the other hand, may terminate this Agreement and
abandon the Merger provided that such terminating party shall have
caused any such proceeding to be dismissed as to all parties thereto;
or
(c) by either Fiserv and Fiserv Sub, on the one hand, or the
Company on the other hand, if the Company Stockholder Approval is not
received at the Company Special Meeting;
(d) by Fiserv and Fiserv Sub if either (i) the Board of
Directors of the Company has recommended to the Company stockholders,
or entered into an agreement regarding, a Superior Proposal, or (ii)
the Board of Directors of the Company has withdrawn or modified in a
manner adverse to Fiserv its recommendation of the Merger;
(e) by the Company prior to Company Stockholder Approval being
obtained if (i) it is not in material breach of its obligations under
this Agreement and has complied with, and continues to comply with, all
requirements, conditions and procedures of Section 6.07 in all material
respects, (ii) the Board of Directors of the Company has authorized,
subject to terminating this Agreement, the Company to enter into a
binding written agreement concerning a transaction that constitutes a
Superior Proposal and the Company notifies Fiserv in writing that it
intends to enter into such binding agreement, which notice must have
attached to it the most current version of such agreement ready for
execution, and (iii) Fiserv does not make, within five business days
after receipt of such notice from the Company, any offer that the Board
of Directors of the Company reasonably and in good faith determines,
after consultation with its financial and legal advisors, is at least
as favorable to the stockholders of the Company as the Superior
Proposal and during such five business-day period the Company
reasonably considers and discusses in good faith all proposals
submitted by Fiserv and, without limiting the foregoing, meets with,
and causes its financial advisors and legal advisors to meet with,
Fiserv and its advisors from time to time as reasonably requested by
Fiserv to reasonably consider and discuss in good faith Fiserv's
proposals. The Company agrees (x) that it will not enter into a binding
agreement referred to in clause (ii) above until at least the sixth
business day after Fiserv has received the notice to Fiserv required by
clause (ii) above, and (y) to notify Fiserv promptly if its intention
to enter into the binding agreement included in its notice to Fiserv
shall change at any time after giving such notice;
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(f) by Fiserv and Fiserv Sub if (i) Fiserv and Fiserv Sub are
not in material breach of their obligations under this Agreement and
(ii) there has been a material breach by the Company of any of its
covenants (including without limitation the covenants contained in
Section 6.07) or obligations under this Agreement or by an Affiliate of
the Company under such person's affiliate's letter described in Section
6.11 or by an officer, director or stockholder of the Company under
such person's Agreement to Facilitate Merger described in Section 6.19
such that the conditions in Section 7.02 will not be satisfied, and the
breach is not curable or, if curable, is not cured by the Company
within 30 calendar days after receipt by the Company of written notice
from Fiserv of such breach;
(g) by the Company if (i) the Company is not in material
breach of its obligations under this Agreement and (ii) there has been
a material breach by Fiserv and Fiserv Sub of any of their
representations, warranties, or obligations under this Agreement such
that the conditions in Section 7.03 will not be satisfied, and the
breach is not curable or, if curable, is not cured by Fiserv or Fiserv
Sub within 30 calendar days after receipt by Fiserv of written notice
from the Company of such breach.
SECTION 8.02 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.01, this Agreement shall
forthwith become void and have no effect, without any liability, on the part of
any party or its affiliates, directors, officers or shareholder, other than the
provisions of this Section 8.02.
(a) Nothing contained in this Section 8.02 shall relieve any
party from liability for any breach of this Agreement and the
Confidentiality Agreement shall survive the termination and abandonment
of this Agreement.
(b) In recognition of the time, efforts, and expenses expended
and incurred by Fiserv and its subsidiaries with respect to the Company
and the opportunity that the acquisition of the Company presents to
Fiserv, if (i) this Agreement is terminated pursuant to Section 8.01(d)
or 8.01(e) or (ii) this Agreement is terminated pursuant to Section
8.01(f) and within twelve months after such termination the Company
shall have consummated a transaction of the type described in clauses
(i) through (iii) of the definition of "Acquisition Proposal", then the
Company shall pay to Fiserv a fee in the amount of $ 400,000 plus
Fiserv Transaction Expenses (the "Fee"), payable upon the same date
that this Agreement is so terminated. The Fee, if payable, shall be
paid by wire transfer of immediately available funds to an account
designated by Fiserv for such purpose. The Company acknowledges that
the agreements contained in this Section 8.02(b) are an integral part
of the transactions contemplated by this Agreement and are not a
penalty, and that, without these agreements, Fiserv would not enter
into this Agreement. If the Company fails to pay promptly the fee due
pursuant to this Section 8.02(b), the Company shall also pay to Fiserv
Fiserv's and its subsidiaries' costs and expenses (including legal fees
and expenses) in connection with any action, including the filing of
any lawsuit or other legal action taken to collect payment. "Fiserv
Transaction Expenses" shall mean the aggregate of all fees and expenses
of Fiserv and/or its Affiliates (including, without limitation, Trewit)
incurred in connection with the
A-50
preparation of the transactions contemplated hereby, including without
limitation all accounting, legal, printing, filing, financial advisory
and internal staff costs incurred in (i) conducting the due diligence
review of the Company, (ii) negotiating and preparing this Agreement
and (iii) preparing, filing and distributing the Proxy Statement and
Registration Statement.
SECTION 8.03 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.
SECTION 8.04 EXTENSION; WAIVER. At any time prior to the Effective
Time, Fiserv and Fiserv Sub, on the one hand, or the Company on the other hand,
may (a) extend the time for the performance of any of the obligations or other
acts of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (c) to the extent permitted by
applicable laws, waive compliance by the other party with any of the agreements
or conditions contained herein. Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 EXPENSES, ETC. Whether or not the transactions
contemplated by this Agreement are consummated, none of the parties shall have
any obligation to pay any of the fees and expenses of the other parties incident
to the negotiation, preparation and execution of this Agreement, including the
fees and expenses of counsel, accountants and other experts; provided, that the
foregoing shall not limit or prohibit the Company's payment of such expenses
following completion of the Merger, if the Merger is in fact consummated.
SECTION 9.02 EXECUTION IN COUNTERPARTS. For the convenience of the
parties, this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 9.03 NOTICES. All notices and other communications which are
required or may be given pursuant to the terms of this Agreement shall be in
writing, shall be effective when received, and shall in any event be deemed to
have been received (a) when delivered, if delivered personally or by commercial
delivery service, (b) three business days after deposit with the U.S. Mail, if
mailed by registered or certified mail (return receipt requested), (c) one
business day after the business day of timely deposit with a recognized national
courier service for next day delivery (or two business days after such deposit
if timely deposited for second business day delivery), if delivered by such
means or (d) one business day after delivery by facsimile transmission with copy
by U.S. Mail, if sent via facsimile plus mail copy (with acknowledgement of
complete transmission), to the parties as follows:
If to the Company, to:
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AVIDYN, Inc.
16980 Dallas Parkway, Suite 120
Dallas, TX 75248
Telephone Number: (972) 447-6447
FAX: (972) 447-6445
Attention: Joseph A. Hensley
With a copy to:
Hallett & Perrin, P.C.
2001 Bryan Street, Suite 3900
Dallas, Texas 75201
Telephone Number: 214-953-0053
FAX: 214-922-4144
Attention: Lance M. Hardenburg
If to Fiserv, Trewit or Fiserv Sub, to:
Fiserv, Inc.
Fiserv Merger Sub, Inc.
255 Fiserv Drive
Brookfield, WI 53045
or
P.O. Box 979
Brookfield, WI 53008-0979
Telephone Number: 262-879-5000
FAX: 262-879-5245
Attention: Kenneth R. Jensen
and
Trewit Inc.
6160 Summit Drive
Suite 500
Brooklyn Center, MN 55430
FAX: 763-549-3371
Attention: James Lockhart
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With a copy to:
Charles W. Sprague
Fiserv, Inc.
255 Fiserv Drive
Brookfield, WI 53045
or
P.O. Box 979
Brookfield, WI 53008-0979
Telephone Number: 262-879-5517
FAX: 262-879-5532
or such other address or addresses as any party shall have designated by notice
in writing to the other parties.
SECTION 9.04 ENTIRE AGREEMENT. This Agreement, its Exhibits and
Schedules and the Confidentiality Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, oral and written, among the parties hereto
with respect to the subject matter hereof. No representation, warranty, promise,
inducement or statement of intention has been made by any party hereto which is
not embodied in this Agreement, and no party shall be bound by, or be liable
for, any alleged representation, warranty, promise, inducement or statement of
intention not embodied herein or therein.
SECTION 9.05 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to conflict of law provisions that would defer to the laws of another
jurisdiction. The rights and obligations of the parties hereunder shall be
governed by and determined in accordance with such laws.
SECTION 9.06 BINDING EFFECT; BENEFITS. This Agreement shall inure to
the benefit of and be binding upon the parties and their respective successors
and assigns. Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties or their respective successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 9.07 INVESTIGATION; SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The respective representations and warranties of Fiserv and Fiserv Sub and the
Company contained herein or in any certificates or other documents delivered
prior to or at the Closing shall not be deemed waived or otherwise affected by
any investigation made by any party hereto. Each and every representation and
warranty contained herein shall be deemed to be conditions to the Merger and
shall not survive the Merger. This Section 9.07 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
the Closing.
SECTION 9.08 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in
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accordance with their specific terms or were otherwise breached. Accordingly,
the parties further agree that each party will be entitled to seek an injunction
or restraining order to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other right or
remedy to which such party may be entitled under this Agreement, at law or in
equity.
SECTION 9.09 ASSIGNABILITY. Neither this Agreement nor any of the
parties' rights hereunder shall be assignable by any party without the prior
written consent of the other parties.
SECTION 9.10 PREVAILING PARTY. The prevailing party in any suit or
action brought against any other party to enforce the terms of this Agreement or
any rights or obligations hereunder shall be entitled to receive reimbursement
of its costs, expenses and attorneys' fees (internal and external) and
disbursements, including the costs and expenses of experts and internal
resources expended, actually incurred in connection with such suit or action.
SECTION 9.11 INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
rule or regulation, such provision shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision has never comprised a part hereof. The remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
SECTION 9.12 INTERPRETATION. Time is of the essence of this Agreement.
Unless otherwise qualified, references in this Agreement to "Article",
"article", "Section" or "section" are to provisions of this Agreement and a
reference thereto includes any subparts. The Table of Contents and the
descriptive headings of the articles and sections, or of or in the Exhibits and
Schedules, are inserted for convenience only and are not a part of this
Agreement. As used herein, the singular includes the plural, the plural includes
the singular, and words in one gender include the others. As used herein, the
terms "herein", "hereunder" and "hereof" refer to the whole of this Agreement,
and "include", "including" and similar terms are not words of limitation.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
FISERV, INC.
By /s/ Kenneth R. Jensen
--------------------------------
Name: Kenneth R. Jensen
Title: Senior Executive
Vice President
FISERV MERGER SUB, INC.
By /s/ James W. Cox
--------------------------------
Name: James W. Cox
Title: President
AVIDYN, INC.
By /s/ Joseph A. Hensley
--------------------------------
Name: Joseph A. Hensley
Title: President
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Annex B
FORM OF AGREEMENT TO FACILITATE MERGER
THIS AGREEMENT TO FACILITATE AGREEMENT (this "Agreement") is made and entered
into as of November 1, 2002 by and among FISERV, INC., a Wisconsin corporation
("Fiserv"), FISERV MERGER SUB, INC., a Delaware corporation ("Fiserv Sub") and a
wholly-owned subsidiary of Fiserv and [___________] (the "Stockholder").
WHEREAS, as of the date hereof, the Stockholder owns beneficially and of record
or has the power to vote, or direct the vote of, [_______] shares of common
stock, par value $0.01 per share ("Company Common Stock"), of Avidyn, Inc., a
Delaware corporation (the "Company");
WHEREAS, on the date hereof, Fiserv, Fiserv Sub, FISERV MERGER SUB, a Delaware
corporation and a wholly owned subsidiary of Fiserv Sub ("Merger Sub"), and the
Company are entering into an Agreement and Plan of Merger, dated as of even date
herewith (as the same may be amended from time to time, the "Merger Agreement";
capitalized terms used but not defined in this Agreement shall have the meanings
ascribed to them in the Merger Agreement), which provides, upon the terms and
subject to the conditions thereof, for the merger of Merger Sub with and into
the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Fiserv and Fiserv Sub to enter
into the Merger Agreement, Fiserv and Fiserv Sub have requested that the
Stockholder agree, and, in order to induce Fiserv and Fiserv Sub to enter into
the Merger Agreement, the Stockholder has agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and in order to
induce Fiserv and Fiserv Sub to execute the Merger Agreement and to proceed as
contemplated by the Merger Agreement toward the consummation of the Merger, and
for other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
1. VOTE IN FAVOR OF MERGER. During the period commencing on the date hereof
and terminating upon the earlier of the effective time of the Merger or
the termination of the Merger Agreement in accordance with its terms,
Stockholder, in his or her capacity as a stockholder of the Company or as
a representative with the authority to vote shares of Company Common
Stock, agrees to vote (or cause to be voted) all shares of Company Common
Stock presently owned by Stockholder or for which Stockholder has voting
power, and all shares of Company Common Stock with respect to which
Stockholder in the future acquires ownership or voting power, at any
meeting of the Stockholders of the Company (or any adjournment thereof),
and in any action by written consent of the Stockholders of the Company,
(i) in favor of the approval, consent, and ratification of the Merger
Agreement, the Merger and the transactions contemplated thereby, and (ii)
against any action that could reasonably be expected to impede, interfere,
delay, or discourage the Merger, facilitate an acquisition of the Company,
in any manner, by a party (other than Fiserv or a subsidiary of Fiserv),
or result in any breach of representation, warranty, covenant, or
agreement of the Company under the Merger Agreement. To the extent
inconsistent with the foregoing provisions of this Section 1, Stockholder
hereby revokes any and all previous proxies with respect to any shares of
Company Common Stock that Stockholder owns or has the right to vote.
Nothing in this Agreement shall be deemed to restrict or limit
Stockholder's right to act in his or her capacity as an officer or
director of the Company consistent with his or her fiduciary obligations
in such capacity as permitted under the Merger Agreement.
2. NO SOLICITATION. Between the date of this Agreement and the earlier of (i)
the Effective Time or (ii) the termination of the Merger Agreement in
accordance with Article VIII thereof, the
B-1
Stockholder hereby agrees neither to (a) solicit, initiate, consider,
encourage or accept any other proposals or offers from any person or
entity (A) relating to any acquisition or purchase of all or any portion
of the capital stock of the Company or assets of the Company, (B) to enter
into any business combination with the Company or (C) to enter into any
other extraordinary business transaction involving or otherwise relating
to the Company, nor (b) to participate in any discussions, conversations,
negotiations and other communications regarding, or furnish to any other
person or entity any information with respect to, or otherwise cooperate
in any way, assist or participate in, facilitate or encourage any effort
or attempt by any other person or entity to seek to do any of the
foregoing. The Stockholder immediately shall cease all existing
discussions, conversations, negotiations and other communications with any
person or entity (other than Fiserv or a subsidiary of Fiserv) conducted
heretofore with respect to any of the foregoing.
3. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder represents and
warrants to Fiserv and Fiserv Sub that Stockholder has the legal capacity
to enter into and perform all of Stockholder's obligations under this
Agreement. The execution, delivery, and performance of this Agreement by
Stockholder will not violate any other agreement to which Stockholder is a
party, including, without limitation, any voting agreement, stockholders
agreement, or voting trust. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid, and binding
agreement of Stockholder, enforceable against him or her in accordance
with its terms.
4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon any permitted
purchasers, donees, pledgees, and other transferees of Company Common
Stock legally or beneficially owned by Stockholder. During the period
commencing on the date hereof and terminating upon the earlier of the
effective time of the Merger or the termination of the Merger Agreement in
accordance with its terms, Stockholder agrees not to make any sales,
gifts, transfers, pledges, or other dispositions of Company Common Stock
without first (i) making any such transferee or pledgee fully aware of the
obligations under this Agreement and obtaining such transferee's or
pledgee's written agreement to comply with the terms hereof and (ii)
informing Fiserv and Fiserv Sub of such sale, gift, transfer, pledge, or
other disposition.
5. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement is not performed
according to the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy
at law or in equity.
6. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same document.
7. FURTHER ASSURANCES. Stockholder shall execute and deliver such additional
documents and take such further action as may be necessary or desirable to
consummate the transactions contemplated by this Agreement.
8. THIRD-PARTY BENEFICIARIES. Nothing in this Agreement, expressed or
implied, shall be construed to give any person other than the parties
hereto any legal or equitable right, remedy, or claim under or by reason
of this Agreement or any provision contained herein.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts
made and to be performed therein.
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10. JURISDICTION AND VENUE. The parties agree that any proceeding relating to
this Agreement shall be brought in a court of Delaware. Each of the
parties consents to personal jurisdiction in any such action brought in
any such Delaware court, consents to service of process by registered mail
made upon such party and such party's agent, and waives any objection to
venue in any such Delaware court or to any claim that any such Delaware
court is an inconvenient forum.
11. EFFECTIVENESS. If this Agreement is executed by Stockholder prior to the
approval of the Merger Agreement by the Company's Board of Directors, then
this Agreement shall be subject to, and shall become effective only upon,
the approval of the Merger Agreement by the Company's Board of Directors
and the execution and delivery of the Merger Agreement by the Company,
Fiserv, Fiserv Sub and Merger Sub. This Agreement shall terminate upon
termination of the Merger Agreement in accordance with its terms.
IN WITNESS WHEREOF, each of Fiserv and Fiserv Sub has caused this
Agreement to Facilitate Merger to be executed by its duly authorized officer,
and Stockholder has executed this Agreement, as of the date and year first above
written.
FISERV, INC. SHAREHOLDER
By ______________________________ ________________________________
Name:
Title:
FISERV SUB, INC.
By ______________________________
Name:
Title:
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Annex C
DELAWARE GENERAL CORPORATION LAW ss.262 - APPRAISAL RIGHTS
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares through
the effective date of the merger or consolidation, who has otherwise complied
with subsection (d) of this section and who has neither voted in favor of the
merger or consolidation nor consented thereto in writing pursuant to ss. 228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the word "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to ss. 251 (other than a merger effected pursuant to ss.
251(g) of this title), ss. 252, ss. 254, ss. 257, ss. 258, ss. 263 or ss. 264 of
this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or consolidation,
were either (i) listed on a national securities exchange or designated as a
national market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. or (ii) held of record by more
than 2,000 holders; and further provided that no appraisal rights shall be
available for any shares of stock of the constituent corporation surviving a
merger if the merger did not require for its approval the vote of the
stockholders of the surviving corporation as provided in subsection (f) of ss.
251 of this title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the shares of any
class or series of stock of a constituent corporation if the holders thereof are
required by the terms of an agreement of merger or consolidation pursuant to
ss.ss. 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such
stock anything except:
a. Shares of stock of the corporation surviving or
resulting from such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or
depository receipts in respect thereof, which shares of stock (or depository
receipts in respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities exchange
or designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or held of record
by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional
depository receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
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d. Any combination of the shares of stock, depository
receipts and cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under ss. 253 of this title is not owned
by the parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation
that appraisal rights under this section shall be available for the shares of
any class or series of its stock as a result of an amendment to its certificate
of incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal
rights are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to the
meeting, shall notify each of its stockholders who was such on the record date
for such meeting with respect to shares for which appraisal rights are available
pursuant to subsection (b) or (c) hereof that appraisal rights are available for
any or all of the shares of the constituent corporations, and shall include in
such notice a copy of this section. Each stockholder electing to demand the
appraisal of such stockholder's shares shall deliver to the corporation, before
the taking of the vote on the merger or consolidation, a written demand for
appraisal of such stockholder's shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the stockholder and that
the stockholder intends thereby to demand the appraisal of such stockholder's
shares. A proxy or vote against the merger or consolidation shall not constitute
such a demand. A stockholder electing to take such action must do so by a
separate written demand as herein provided. Within 10 days after the effective
date of such merger or consolidation, the surviving or resulting corporation
shall notify each stockholder of each constituent corporation who has complied
with this subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become effective;
or
(2) If the merger or consolidation was approved pursuant to
ss. 228 or ss. 253 of this title, then either a constituent corporation before
the effective date of the merger or consolidation or the surviving or resulting
corporation within 10 days thereafter shall notify each of the holders of any
class or series of stock of such constituent corporation who are entitled to
appraisal rights of the approval of the merger or consolidation and that
appraisal rights are available for any or all shares of such class or series of
stock of such constituent corporation, and shall include in such notice a copy
of this section. Such notice may, and, if given on or after the effective date
of the merger or consolidation, shall, also notify such stockholders of the
effective date of the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of mailing of such notice,
demand in writing from the surviving or resulting corporation the appraisal of
such holder's shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such holder's shares. If such notice
did not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation shall send a second
notice before the effective date of the merger or consolidation notifying each
of the holders of any class or series of stock of such constituent corporation
that are entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send such a
second notice to all such holders on or within 10 days after such effective
date; provided, however, that if such second notice is sent more than 20 days
following the sending of the first notice, such second notice need
C-2
only be sent to each stockholder who is entitled to appraisal rights and who has
demanded appraisal of such holder's shares in accordance with this subsection.
An affidavit of the secretary or assistant secretary or of the transfer agent of
the corporation that is required to give either notice that such notice has been
given shall, in the absence of fraud, be prima facie evidence of the facts
stated therein. For purposes of determining the stockholders entitled to receive
either notice, each constituent corporation may fix, in advance, a record date
that shall be not more than 10 days prior to the date the notice is given,
provided, that if the notice is given on or after the effective date of the
merger or consolidation, the record date shall be such effective date. If no
record date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the day on
which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw such stockholder's demand for appraisal and to accept the terms offered
upon the merger or consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10 days
after such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the
Court shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account
C-3
all relevant factors. In determining the fair rate of interest, the Court may
consider all relevant factors, including the rate of interest which the
surviving or resulting corporation would have had to pay to borrow money during
the pendency of the proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the appraisal
proceeding, the Court may, in its discretion, permit discovery or other pretrial
proceedings and may proceed to trial upon the appraisal prior to the final
determination of the stockholder entitled to an appraisal. Any stockholder whose
name appears on the list filed by the surviving or resulting corporation
pursuant to subsection (f) of this section and who has submitted such
stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that such stockholder is not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation,
no stockholder who has demanded appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of such
stockholder's demand for an appraisal and an acceptance of the merger or
consolidation, either within 60 days after the effective date of the merger or
consolidation as provided in subsection (e) of this section or thereafter with
the written approval of the corporation, then the right of such stockholder to
an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding
in the Court of Chancery shall be dismissed as to any stockholder without the
approval of the Court, and such approval may be conditioned upon such terms as
the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Pursuant to the provisions of the Wisconsin Business Corporation Law,
directors and officers of the Registrant are entitled to mandatory
indemnification from the Registrant against certain liabilities (which may
include liabilities under the Securities Act of 1933) and expenses (i) to the
extent such officers or directors are successful in the defense of a proceeding;
and (ii) in proceedings in which the director or officer is not successful in
defense thereof, unless it is determined that the director or officer breached
or failed to perform his or her duties to the Registrant and such breach or
failure constituted: (a) a willful failure to deal fairly with the Registrant or
its stockholders in connection with a matter in which the director or officer
had a material conflict of interest; (b) a violation of criminal law unless the
director or officer had a reasonable cause to believe his or her conduct was
lawful or had no reasonable cause to believe his or her conduct was unlawful;
(c) a transaction from which the director or officer derived an improper
personal profit; or (d) willful misconduct. Additionally, under the Wisconsin
Business Corporation Law, directors of the Registrant are not subject to
personal liability to the Registrant, its stockholders or any person asserting
rights on behalf thereof, for certain breaches or failures to perform any duty
resulting solely from their status as directors, except in circumstances
paralleling those outlined in (a) through (d) above.
The Registrant's by-laws provide for indemnification and advancement of
expenses of officers and directors to the fullest extent provided by the
Wisconsin Business Corporation Law.
The indemnification provided by the Wisconsin Business Corporation Law
and the Registrant's by-laws is not exclusive of any other rights to which a
director or officer of the Registrant may be entitled.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits. The exhibits listed in the accompanying Exhibit
Index are filed (except where otherwise indicated) as part of
this Registration Statement.
(b) Financial Statement Schedules. No financial statement
schedules are required to be filed.
(b) Reports, Opinions or Appraisals. Not applicable.
Item 22. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
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Statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not exceed
that which was registered) and any deviation
from the low or high end of the estimated
maximum offering range may be reflected in
the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and
price represent no more than a 20% change in
the maximum aggregate offering price set
forth in the "Calculation of Registration
Fee" table in the effective Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the registration statement.
(2) That, for the purpose 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.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) 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 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.
(c) The undersigned Registrant hereby undertakes as follows: That
prior to any public reoffering of the securities registered
hereunder through use of prospectus which is 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.
(d) The Registrant undertakes that every prospectus (i) that is
filed pursuant to paragraph (c) 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, will be filed as a 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.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
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expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or
controlling person of the Registrant 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, the Registrant 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.
(f) 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.
(g) 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Brookfield,
State of Wisconsin, on November 12, 2002.
FISERV, INC.
By: /s/ Kenneth R. Jensen
-----------------------------------------
Kenneth R. Jensen
Senior Executive Vice President, Chief
Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
* Director, President and Chief November 12, 2002
- ---------------------------- Executive Officer (Principal
Leslie M. Muma Executive Officer)
* Chairman of the Board, November 12, 2002
- ---------------------------- Chairman-Information
Donald F. Dillon Technology, Inc. and Director
* Director, Senior Executive November 12, 2002
- ---------------------------- Vice President, Chief
Kenneth R. Jensen Financial Officer and Treasurer
(Principal Financial and
Accounting Officer)
* Director November 12, 2002
- ----------------------------
Daniel P. Kearney
* Director November 12, 2002
- ----------------------------
Gerald J. Levy
* Director November 12, 2002
- ----------------------------
Glenn M. Renwick
* Director November 12, 2002
- ----------------------------
L. William Seidman
* Director November 12, 2002
- ----------------------------
Thekla R. Shackelford
*By: /s/ Kenneth R. Jensen
------------------------
Kenneth R. Jensen
Attorney-in-Fact
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EXHIBIT INDEX
Exhibit
Number Document Description
(2.1) Agreement and Plan of Merger, dated as of November 2, 2002, among
Fiserv, Inc., Fiserv Merger Sub, Inc. and AVIDYN, Inc. [Incorporated
herein by reference to Annex A to the Proxy Statement/Prospectus
contained in this Registration Statement]. The Registrant agrees to
furnish supplementally to the Securities and Exchange Commission upon
request a copy of any omitted schedule or exhibit to the
above-referenced Agreement and Plan of Merger.
(4.1) Restated Articles of Incorporation of Fiserv, Inc., as amended (filed
as Exhibit 3.1 to the Registrant's Annual Report on Form 10-K dated
February 28, 2000 and incorporated herein by reference (File No.
0-14948)).
(4.2) By-laws of Fiserv, Inc. (filed as Exhibit 3.2 to the Registrant's
Current Report on Form 8-K dated February 23, 1998 and incorporated
herein by reference (File No. 0-14948)).
(4.3) Shareholder Rights Agreement (filed as Exhibit 4 to the Registrant's
Current Report on Form 8-K dated February 23, 1998, and incorporated
herein by reference (File No. 0-14948)).
(4.4) First Amendment to the Shareholder Rights Agreement (filed as Exhibit
4.3 to the Registrant's Form S-8 dated April 7, 2000, and incorporated
herein by reference (File No. 333-34310)).
(4.5) Second Amendment to the Shareholder Rights Agreement (filed as Exhibit
4.6 to the Registrant's Form 10-K dated February 27, 2001, and
incorporated herein by reference (File No. 0-14948)). Pursuant to Item
601(b)(4)(iii) of Regulation S-K, the Registrant agrees to furnish to
the Securities and Exchange Commission, upon request, any instrument
defining the rights of holders of long-term debt that is not filed as
an exhibit to this Form 10-K.
(5.1) Opinion of Charles W. Sprague, Esq.
(21.1) List of Subsidiaries of the Registrant (filed as Exhibit 21 to the
Registrant's Annual Report on Form 10-K for the year ended December 31,
2001, and incorporated herein by reference (File No. 0-14948)).
(23.1) Consent of Deloitte & Touche LLP.
(23.2) Consent of Grant Thornton LLP.
(23.3) Consent of Charles W. Sprague, Esq. (filed as part of Exhibit (5.1)).
(24.1) Powers of Attorney.
(99.1) Form of Proxy for the AVIDYN, Inc. Special Meeting of Stockholders.
(99.2) Form of Agreement to Facilitate Merger, dated as of November 2, 2002,
among Fiserv, Inc., Fiserv Merger Sub, Inc. and each of John Ward Hunt,
WLH Family Investment, Ltd. and Burke, Mayborn Company, Ltd.
[Incorporated herein by reference to Annex B to the Proxy
Statement/Prospectus contained in this Registration Statement].
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