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EXHIBIT 99.1
[LOGO OF U.S. TRUST COMPANY, NATIONAL ASSOCIATION]
NOTICE TO PARTICIPANTS
IN THE
FORSEON CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
Dear ESOP Participant:
The enclosed Proxy Statement/Prospectus has been prepared in connection
with the solicitation of proxies for a Special Meeting of Shareholders of
Forseon Corporation ("Forseon") to be held on June 28, 1999 to consider the
merger of Forseon with a subsidiary of Towne Services, Inc. in a transaction
described in the Proxy Statement/Prospectus ("Merger"). If the Merger is
completed, the shares of Forseon Corporation common stock ("Forseon Stock") held
by the trustee ("Trustee") of the Forseon Corporation Employee Stock Ownership
Plan ("ESOP") will be converted into shares of Towne Services, Inc. common stock
based upon a conversion ratio described in the Proxy Statement/Prospectus. The
ESOP Committee has appointed U.S. Trust Company, National Association ("U.S.
Trust") to act as special investment manager of the ESOP with respect to this
transaction.
As a Plan Participant in the ESOP, you have been provided with a voting
instruction card so that you may provide voting instructions to the Trustee with
respect to shares allocated to your account. Only the Trustee can vote the
shares of Forseon Stock held by the ESOP. However, under the terms of the Plan,
you are entitled to instruct the Trustee how to vote shares allocated to your
account, based on the number of shares in your Plan account at June 10, 1999.
VOTING INSTRUCTIONS
You may instruct the Trustee to vote for or against the Merger or to
abstain from voting on the Merger. If you instruct the Trustee how to vote, you
will be acting as a "named fiduciary" under the terms of the ESOP and the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")(1), with
respect to the voting of your shares. The Trustee will be required to follow
your instructions unless U.S. Trust advises the Trustee that to do so would be
contrary to the provisions of the ESOP or ERISA. Unallocated shares, if any,
held by the ESOP and allocated shares with respect to which timely instructions
are not received (including shares for which a voting instruction card is
returned without any boxes being checked) will be voted by the Trustee with
respect to the Merger as directed by U.S. Trust, in its independent discretion.
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(1) ERISA is the Federal law that governs the operation of employee benefit
plans, such as the ESOP.
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You should note that the voting procedures for ESOP participants differ
from those for other shareholders. You must follow the procedures described in
this letter, and those noted in the Proxy Statement/Prospectus as specifically
applicable to ESOP participants. In addition, if you own Forseon Stock directly
as a shareholder, you will receive more than one set of proxy materials. To
ensure that all of your shares (held in the ESOP and owned by you directly) are
voted, you should complete, sign and return both the proxy card and voting
instruction card in their respective envelopes.
THE MERGER TRANSACTION
The proposed Merger is described in the Proxy Statement/Prospectus. You
should read that document carefully before completing the voting instruction
card. In particular, you should note the portions of the Proxy
Statement/Prospectus that discuss the following issues: (1) following the
Merger, the ESOP will hold only shares of Towne Services, Inc., (2) there are no
immediate plans to terminate the ESOP, and (3) participants in the ESOP both
before and after the Merger will be entitled to receive distributions from the
ESOP only upon termination of employment, death or disability (see "Comparison
of Capital Stock-ESOP Matters"). In addition, 10% of the shares of Towne
Services, Inc. to be received in the Merger will be placed in an escrow as
security for payment in the event of certain liabilities (see "Other Related
Matters-Escrow Agreement").
VOTING DEADLINE
Because of the time required to tabulate voting instructions from
participants before the Special Meeting of Shareholders, U.S. Trust, as
supervisor of the pass-through voting procedure, must establish a cut-off date
for receiving your instruction cards. The cut-off date is 5:00 P.M. EASTERN TIME
ON JUNE 25, 1999. U.S. Trust cannot ensure that instruction cards received after
the cut-off date will be tabulated. Therefore, it is important that you act
promptly and return your instruction card to U.S. TRUST BEFORE 5:00 P.M. EASTERN
TIME ON JUNE 25, 1999, in the envelope provided for your convenience. In the
alternative, you may deliver your ESOP instruction card (but no other proxy
cards) by facsimile to (212) 645-8046 or by overnight mail or Federal Express to
Mr. Allen Philip Associates, Inc. 134 West 26th Street, Fifth Floor, New York,
NY 10001. If your voting instructions are not timely received, the Trustee will
vote your shares in the discretion of U.S. Trust.
CONFIDENTIALITY
YOUR VOTE IS STRICTLY CONFIDENTIAL. Under no circumstances (except in
the unlikely event of a court order) will U.S. Trust, or any of its agents,
disclose to Forseon, Towne Services, or any other party how or if you voted.
You should feel free to vote in the manner you think is best.
QUESTIONS
If you have any questions regarding the information provided to you, you
may contact U.S. Trust at (800) 535-3093, its toll-free number, between 8:30
a.m. and 4:00 p.m., Pacific Time, Monday through Friday. However, U.S. Trust
cannot recommend whether you should vote in favor of or against the Merger.
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Your ability to instruct the Trustee on how to vote your ESOP shares is an
important part of your rights as an ESOP participant. Please consider the
enclosed material carefully and then furnish your voting instructions promptly.
Please note that these materials supersede any oral or written information that
you may have received earlier regarding the Merger.
U.S. TRUST COMPANY, NATIONAL ASSOCIATION
Special Investment Manager
June 11, 1999
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[X] Please mark your choice like this and sign and date below.
FOR YOUR INFORMATION, THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" ITEM 1
1. MERGER OF FORSEON CORPORATION AND A SUBSIDIARY OF TOWNE SERVICES,
INC., as described in the Proxy Statement/Prospectus enclosed with this
instruction card
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN (Abstained shares shall not be voted by Trustee either FOR or
AGAINST the proposal)
As a Participant in the ESOP, I hereby acknowledge receipt of proxy
solicitation materials of Forseon Corporation relating to its Special Meeting of
Shareholders to be held on June 28, 1999, and I hereby instruct the Trustee to
vote my allocated shares as I have indicated above. If I sign, date and return
this card but do not specifically instruct the Trustee how to vote, the Trustee
will vote may allocated shares with respect to the Merger described in the proxy
materials as directed by U.S. Trust Company, National Association, as special
investment manager, in its independent discretion.
______________________________ _________________
SIGNATURE DATE
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THE FORSEON CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
VOTING INSTRUCTIONS TO TRUSTEE
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF FORSEON CORPORATION --
on June 28, 1999
The undersigned Participant in the Forseon Corporation Employee
Stock Ownership Plan (the "ESOP") hereby instructs the trustee under the ESOP
("Trustee") to vote his/her allocated shares of common stock of Forseon
Corporation in accordance with the instructions on the reverse side of this
form, and to represent the undersigned at the Special Meeting of Shareholders
of the Corporation to be held at 10 a.m. Pacific Time on June 28, 1999,
at Gibson, Dunn & Crutcher, LLP, 4 Park Plaza, Suite 1700, Irvine, California
92614-8557, and at any adjournments or postponements thereof.
THIS CARD MUST BE PROPERLY COMPLETED, SIGNED, DATED AND
RECEIVED BY U.S. TRUST COMPANY, NATIONAL ASSOCIATION ("U.S. TRUST") BY
5:00 P.M. EASTERN TIME ON JUNE 25, 1999. IF YOUR VOTING INSTRUCTIONS
ARE NOT TIMELY RECEIVED, THE TRUSTEE WILL VOTE YOUR SHARES WITH RESPECT
TO THE MERGER AS DIRECTED BY U.S. TRUST IN ITS INDEPENDENT JUDGMENT. IF
THIS CARD IS RECEIVED AFTER 5:00 P.M. EASTERN TIME ON JUNE 25 1999,
THE TRUSTEE CANNOT ENSURE THAT YOUR VOTING INSTRUCTIONS WILL BE FOLLOWED.
YOUR VOTING INSTRUCTIONS TO THE TRUSTEE ARE CONFIDENTIAL AS EXPLAINED IN
THE ACCOMPANYING NOTICE TO ESOP PARTICIPANTS. YOUR ALLOCATED SHARES ARE
INDICATED ON THE LABEL ABOVE.
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