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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 2001
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14C
(RULE 14c-101)
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
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CHECK THE APPROPRIATE BOX:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14C-5(d)(2))
[ ] Definitive Information Statement
NEW ERA OF NETWORKS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Payment of Filing Fee (check the appropriate box): [ ] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies: Common
Stock, par value $0.0001 per share of New Era of Networks, Inc.
(2) Aggregate number of securities to which transaction applies: 9,059,247
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and state
how it was determined): $6.03, based on the average of the high and low
prices of New Era of Networks, Inc. common stock as reported on The
Nasdaq National Market on May 1, 2001.
(4) Proposed maximum aggregate value of transaction: $54,627,260
(5) Total fee paid: $10,926*
[ ] Fee paid previously with preliminary materials
[X] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: $62,694
(2) Form, Schedule or Registration Statement No.: Form S-4, 333-57102
(3) Filing Party: Sybase, Inc.
(4) Date Filed: March 15, 2001
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* This amount is completely offset by the $62,694 fee previously paid in
connection with the filing of the Form S-4 by Sybase, Inc. on March 15, 2001,
in connection with the first step of the transactions of which the merger that
is the subject of this information statement is a part.
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PRELIMINARY INFORMATION STATEMENT
[NEON LOGO]
NEW ERA OF NETWORKS, INC.
6550 S. GREENWOOD PLAZA BLVD.
ENGLEWOOD, CO 80111
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, JUNE 4, 2001
May 14, 2001
To the Stockholders of New Era of Networks, Inc.:
We will hold a special meeting of our stockholders on June 4, 2001 at 10:00
am, local time, at Sybase's executive offices located at 6475 Christie Avenue,
Emeryville, CA 94608.
As described in the enclosed Information Statement, at the special meeting,
you will:
1. Consider and vote upon a proposal to approve and adopt a
reorganization agreement dated as of February 20, 2001, by and among New
Era of Networks, Inc. ("NEON"), Sybase, Inc. ("Sybase") and Neel
Acquisition Corp., a wholly-owned subsidiary of Sybase, providing for,
among other things, the merger of Neel Acquisition Corp. with and into
NEON. Following the merger, NEON will continue as the surviving corporation
and will become a wholly-owned subsidiary of Sybase; and
2. Transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The NEON board of directors has approved the reorganization agreement and
the merger.
The merger will constitute the second and final step of the acquisition of
NEON by Sybase. The first step was an exchange offer commenced by Sybase through
Neel Acquisition Corp. on March 15, 2001 of 0.3878 of a share of Sybase common
stock, par value $0.001 per share, for each outstanding share of NEON common
stock, par value $0.0001 per share. The offer expired on April 11, 2001; a
subsequent offering period commenced on April 12, 2001 and ended on April 26,
2001. Neel Acquisition Corp. acquired 29,642,458 shares of NEON (representing
approximately 79.99% of the shares outstanding as of April 26, 2001).
Upon the completion of the merger, each share of NEON common stock (other
than shares owned by Sybase, NEON or any of their direct or indirect
wholly-owned subsidiaries) which has not been exchanged or accepted for exchange
in the offer will be converted into 0.3878 of a share of Sybase common stock
(and cash in lieu of any fractional shares), the same consideration as in the
exchange offer. Sybase currently anticipates that the merger will be completed
on June 4, 2001, or as promptly as practicable thereafter.
Holders of record of NEON common stock at the close of business on May 4,
2001 will be entitled to vote at the special meeting or any adjournment or
postponement. As of the record date, Sybase and its affiliates own an aggregate
of 29,642,458 shares, representing approximately 79.99% of all shares
outstanding on that date. The approval of the holders of a majority of all
outstanding shares is sufficient to approve and adopt the reorganization
agreement and the merger. Therefore, Sybase can cause the merger to occur
without the affirmative vote of any other stockholder.
Please read the attached Information Statement carefully. WE ARE NOT ASKING
YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY.
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Please do not send in your share certificates at this time. If the merger
is consummated, you will be sent a letter of transmittal for that purpose as
soon as reasonably practicable thereafter.
By Order of the NEON Board of
Directors,
/s/ GEORGE F. (Rick) ADAM
George F. (Rick) Adam, Jr.
Chairman and Chief Executive Officer
Englewood, Colorado
May 14, 2001
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PRELIMINARY INFORMATION STATEMENT
NEW ERA OF NETWORKS, INC.
ONE GREENWOOD PLAZA
6550 S. GREENWOOD PLAZA BLVD.
ENGLEWOOD, CO 80111
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INFORMATION STATEMENT
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD JUNE 4, 2001
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WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY
This Information Statement is being furnished to the holders of common
stock of New Era of Networks, Inc., a Delaware corporation ("NEON") in
connection with the special meeting of stockholders of NEON to be held on June
4, 2001 at 10:00 am, local time, at Sybase's executive offices located at 6475
Christie Avenue, Emeryville, CA 94608, for the following purposes:
1. To consider and vote upon a proposal to approve and adopt the
reorganization agreement, dated February 20, 2001, among NEON, Sybase, Inc.
("Sybase") and Neel Acquisition Corp., a wholly-owned subsidiary of Sybase,
and the merger, as described in this Information Statement; and
2. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The merger is the second step of Sybase's two-part acquisition of NEON. The
first step was an exchange offer commenced by Neel Acquisition Corp. on March
15, 2001 of 0.3878 of a share of Sybase common stock, par value $0.001 per
share, for each outstanding share of NEON common stock, par value $0.0001 per
share. The offer expired on April 11, 2001; a subsequent offering period
commenced on April 12, 2001 and ended on April 26, 2001. Neel Acquisition Corp.
acquired 29,642,458 shares (representing approximately 79.99% of the shares
outstanding as of April 26, 2001).
Holders of record of NEON common stock at the close of business on May 4,
2001 will be entitled to vote at the special meeting or any adjournment or
postponement.
Sybase can cause the merger to occur without the affirmative vote of any
other holder of shares.
Please do not send any certificates for your stock at this time. Please
read this Information Statement carefully.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Information Statement dated May 4, 2001, and intended to be first mailed to
stockholders on May 14, 2001.
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TABLE OF CONTENTS
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PAGE
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QUESTIONS AND ANSWERS ABOUT THE MERGER..... 1
RISK FACTORS............................... 5
Risks Related to the Proposed Merger..... 5
Risks Related to Sybase's Business....... 7
SELECTED HISTORICAL AND PRO FORMA FINANCIAL
DATA..................................... 12
Selected Historical Financial Data of
Sybase................................. 12
Selected Historical Financial Data of
NEON................................... 13
Selected Unaudited Pro Forma Combined
Condensed Financial Data............... 14
Comparative Per Share Data............... 14
Comparative Market Price Information..... 15
UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS..................... 16
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED FINANCIAL STATEMENTS........... 20
THE SPECIAL MEETING........................ 22
Time, Place, Date........................ 22
Purpose of the Special Meeting........... 22
Record Date; Quorum; Outstanding Shares
Entitled to Vote....................... 22
Vote Required............................ 22
Surrender of Certificates and Payment
Procedures............................. 22
Treatment of NEON Stock Options and
ESPP................................... 23
PAGE
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THE MERGER................................. 24
Background of the Offer and the Merger... 24
Sybase Reasons for the Offer and
Merger................................. 27
Recommendation and Reasons of NEON
Board.................................. 28
Opinion of NEON Financial Advisor........ 30
Purpose and Structure of the Merger;
Reasons of Sybase for the Merger....... 31
Reorganization Agreement................. 31
Delisting of NEON Shares Following the
Merger................................. 33
Regulatory Approvals..................... 33
Accounting Treatment..................... 34
INTERESTS OF CERTAIN PERSONS IN THE
MERGER................................... 34
MATERIAL FEDERAL INCOME TAX CONSEQUENCES... 36
COMPARATIVE PER SHARE MARKET PRICE AND
DIVIDEND INFORMATION..................... 39
COMPARISON OF SYBASE AND NEON STOCKHOLDER
RIGHTS................................... 40
BENEFICIAL SHARE OWNERSHIP BY PRINCIPAL
STOCKHOLDERS AND MANAGEMENT.............. 46
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE..................... 47
LEGAL MATTERS.............................. 47
EXPERTS.................................... 47
OTHER MATTERS.............................. 47
WHERE YOU CAN FIND MORE INFORMATION........ 47
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QUESTIONS AND ANSWERS ABOUT THE MERGER
The merger of Neel Acquisition Corp., a wholly-owned subsidiary of Sybase,
Inc., with and into NEON will constitute the second and final step of the
acquisition of NEON by Sybase. The first step was an exchange offer, commenced
by Sybase through its subsidiary on March 15, 2001, of 0.3878 of a share of
Sybase common stock for each outstanding share of NEON common stock. The offer
expired on April 11, 2001; a subsequent offering period commenced on April 12,
2001 and ended on April 26, 2001. Neel Acquisition Corp. acquired 29,642,458
shares representing approximately 79.99% of the shares outstanding as of April
26, 2001. The following are some questions you, as a stockholder of NEON, may
have and the answers to those questions. We urge you to carefully read the
remainder of this information statement because the information provided in
these questions and answers is not complete and additional important information
is contained in the remainder of this information statement. Stockholders are
urged to read this information statement in its entirety.
WHEN AND WHERE IS THE SPECIAL MEETING?
NEON will hold a special meeting of stockholders on June 4, 2001, at 10:00
am, local time, at 6475 Christie Avenue, Emeryville, CA 94608. See "The Special
Meeting."
IS MY VOTE REQUIRED TO APPROVE THE MERGER?
No. The affirmative vote of a majority of the votes entitled to be cast by
the holders of all outstanding shares as of the record date will be required to
approve and adopt the reorganization agreement. Sybase has agreed to vote all of
the shares it owns in favor of the approval and adoption of the reorganization
agreement. Because Sybase and its affiliates own approximately 79.99% of the
outstanding shares on the record date, approval and adoption of the
reorganization agreement is assured without the vote of any other stockholder.
You are not being asked for a proxy and you are requested not to send one. If
you wish to vote your shares, you may do so only by attending the special
meeting. See "The Special Meeting -- Vote Required."
WHO ARE THE PARTIES TO THE TRANSACTION?
SYBASE, INC.
6475 Christie Avenue
Emeryville, California 94608
Telephone: (510) 922-3500
Sybase provides the "heavy lifting infrastructure" needed to consolidate,
integrate and manage large enterprises on the Web. Sybase's products and
services include enterprise portal solutions, mobile and wireless solutions, and
solutions in such vertical markets as financial services, telecommunications,
and healthcare. Sybase was founded and incorporated in California on November
15, 1984, and re-incorporated in Delaware on July 1, 1991. Sybase's business is
organized into five principal operating divisions, two of which are wholly-
owned subsidiaries:
- ENTERPRISE SOLUTIONS (ESD) products and solutions let enterprises
integrate, move and manage very large amounts of data and applications
across diverse computing environments. ESD also provides technical
support and professional services required by businesses to develop and
maintain operational systems, including e-business infrastructures.
- IANYWHERE SOLUTIONS, INC. (IAS) products and solutions extend enterprise
systems to remote and wireless devices to enable e-business and
m-business (mobile business) anywhere, anytime. iAS is a wholly-owned
subsidiary recently created to continue the business of Sybase's former
Mobile and Embedded Computing (MEC) division.
- BUSINESS INTELLIGENCE (BID) products and solutions let businesses
consolidate and analyze large amounts of information from data warehouses
and data marts to facilitate better decision-making and gain a
competitive edge in sales and marketing, customer satisfaction, trend and
risk analysis and other critical areas.
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- INTERNET APPLICATIONS (IAD) products and solutions allow businesses to
design, build and deploy distributed and Web-based applications, and to
extend existing distributed client/server applications (generally
unsuitable for direct access on the Internet) into the new Web
environment.
- FINANCIAL FUSION, INC. (FFI) e-finance solutions and its global service
and support network enable financial institutions to integrate financial
services, channels, platforms, technologies and applications for delivery
to capital markets and retail clients.
Sybase's customers are primarily Fortune 1000 companies in North America
and their equivalents in other geographic regions. Sybase's primary markets
include financial services, insurance, telecommunications, healthcare, defense
and government agencies. No single customer accounted for more than 10% of total
revenues during 2000, 1999, or 1998.
NEEL ACQUISITION CORP.
c/o Sybase, Inc.
6475 Christie Avenue
Emeryville, CA 94608
Telephone: (510) 922-3500
Neel Acquisition Corp. is a wholly-owned subsidiary of Sybase. Neel
Acquisition Corp. was organized on February 5, 2001 for the purpose of acquiring
the NEON shares tendered in response to the offer and merging with NEON in the
merger. It has not carried on any activities other than in connection with the
reorganization agreement.
NEW ERA OF NETWORKS, INC.
6550 Greenwood Plaza Boulevard
Englewood, CO 80111
Telephone: (303) 694-3933
NEON is a leading supplier of Internet infrastructure software and
services. Specifically, NEON helps automate e-business by providing a range of
products and services which integrate Internet-facing applications with core
operational systems for goods and services providers, and which facilitate the
creation of Net markets. By enabling information sharing between systems,
businesses can automate end-to-end processes, such as fulfilling an order, at
the speed and volume required in the e-business environment. NEON products
enable e-markets by routing messages and transforming information at the needed
speed and volume. NEON's software solutions support integration of leading
Internet and core business packaged applications, application server platforms,
industry standard protocols, and proprietary systems. Additionally, NEON
provides design, development and implementation services through its
professional services organization. To date, over 3,000 customers worldwide,
spanning all major industries including financial services, healthcare,
insurance, manufacturing, and telecommunications, use NEON's products.
As a result of the first step, NEON is 79.99% owned by Sybase.
WHAT WILL I RECEIVE IN EXCHANGE FOR MY SHARES OF NEON?
Upon consummation of the merger, each share of NEON common stock (other
than shares owned by Sybase, NEON or any of their direct or indirect
wholly-owned subsidiaries which have not been exchanged or accepted for exchange
in the offer) will be converted into 0.3878 of a share of Sybase common stock
(and cash in lieu of any fractional shares), the same consideration paid in the
exchange offer. See "The Merger -- Reorganization Agreement."
IS THERE AN AGREEMENT GOVERNING THE MERGER?
Yes. Sybase, Neel Acquisition Corp. and NEON entered into a reorganization
agreement dated as of February 20, 2001. The reorganization agreement provides,
among other things, for the terms and conditions of the exchange offer and the
merger of Neel Acquisition Corp. into NEON following the exchange offer. See
"The Merger -- Purpose and Structure of the Merger; Reasons of Sybase for the
Merger".
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WHAT DOES THE NEON BOARD OF DIRECTORS THINK OF THE MERGER?
The NEON board recommends that its stockholders approve and adopt the
reorganization agreement and the merger. See "The Merger -- Recommendation and
Reasons of the NEON Board."
In reaching its decision to approve and adopt the reorganization agreement
and to recommend that NEON stockholders approve and adopt the reorganization
agreement, the NEON board considered a number of factors. See "The
Merger -- Recommendation and Reasons of the NEON Board."
DID THE NEON BOARD RECEIVE AN OPINION FROM ITS FINANCIAL ADVISOR?
In deciding to approve the offer and merger, NEON's board of directors
considered the opinion of its financial advisor, Credit Suisse First Boston
Corporation, to the effect that, as of February 20, 2001 and based upon and
subject to various considerations set forth in its opinion, the exchange ratio
was fair, from a financial point of view, to the holders of NEON common stock. A
copy of the opinion is included in NEON's Solicitation/Recommendation Statement
on Schedule 14D-9, which is incorporated herein by reference.
WHEN DO THE COMPANIES EXPECT TO COMPLETE THE MERGER?
Sybase expects to complete the merger on June 4, 2001, or as soon as
practicable thereafter. The merger shall become effective upon filing the
certificate of merger with the Secretary of the State of Delaware or such later
time as is agreed by NEON and Sybase and specified in the certificate of merger.
See "The Merger."
CAN THE REORGANIZATION AGREEMENT BE TERMINATED?
The reorganization agreement may be terminated by either Sybase or NEON
under certain circumstances. See "The Merger -- Reorganization Agreement."
IS SYBASE'S FINANCIAL CONDITION RELEVANT?
Since each share of NEON common stock issued and outstanding immediately
prior to the effective time (other than shares owned by Sybase, NEON or any of
their direct or indirect wholly-owned subsidiaries) will be converted into a
right to receive 0.3878 of a share of Sybase common stock, we advise that NEON
stockholders consider Sybase's financial condition and particularly, the section
entitled "Risk Factors" before deciding to become one of Sybase's stockholders
through the merger.
WHAT WILL HAPPEN TO NEON AFTER THE MERGER IS CONSUMMATED?
After consummation of the merger, NEON will become a wholly-owned
subsidiary of Sybase and the former holders of NEON shares will no longer
possess any direct interest in NEON. Promptly upon consummation of the merger,
NEON will terminate the registration of the shares under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition,
upon termination of the registration of the shares under the Exchange Act, the
shares will no longer be eligible for inclusion in the Nasdaq National Market
System. See "The Merger -- Delisting of NEON Shares Following the Merger."
WHAT IS THE ACCOUNTING TREATMENT FOR THE MERGER?
Sybase will account for the merger as a purchase for financial reporting
purposes.
DO ANY EXISTING OR FORMER MEMBERS OF NEON'S MANAGEMENT OR BOARD OF DIRECTORS
HAVE INTERESTS IN THE MERGER OTHER THAN AS STOCKHOLDERS OF NEON?
Yes. Certain existing and former members of NEON's management and board (as
well as employees of NEON) have interests in the merger other than as
stockholders relating to, among other things, (i) the terms of employment and
non-competition agreements and change of control severance agreements between
NEON and certain members of management, providing for cash payments and other
benefits; and (ii) the
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acceleration of unvested stock options for certain members of management. See
"Interests of Certain Persons in the Merger."
SHOULD I SEND IN MY STOCK CERTIFICATES NOW?
No. A letter of transmittal for use in surrendering share certificates will
be mailed to stockholders as soon as practicable following the effective time of
the merger. See "The Merger." Certificates representing NEON shares should not
be sent in until stockholders receive the letter of transmittal and accompanying
instructions, and then should be surrendered only in accordance with such
instructions.
WILL I HAVE TO PAY TAXES ON THE CONSIDERATION I RECEIVE FOR MY SHARES IN THE
MERGER?
The merger will qualify as the second step in a tax-free reorganization for
United States federal income tax purposes, if (1) the merger is completed under
the current terms of the reorganization agreement and (2) the merger is
completed promptly after the offer. Assuming these assumptions are true, a NEON
stockholder's receipt of Sybase common stock in the merger will be tax-free for
United States federal income tax purposes (except for taxes, if any, resulting
from the receipt of cash instead of a fraction of a Sybase common share).
The above described tax treatment of the offer and the merger to NEON
stockholders depends on, among other things, some facts that will not be known
before the completion of the merger. NEON stockholders are urged to carefully
read the discussion under "Material Federal Income Tax Consequences." That
discussion includes a summary of the tax consequences of participation in the
offer and the merger in the event the assumptions described above are not
satisfied. NEON stockholders are urged to consult their tax advisors as to the
consequences of participation in the merger.
ARE ANY REGULATORY APPROVALS REQUIRED?
The notifications required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the related rules to the Federal Trade Commission
and the Antitrust Division of the Department of Justice have been filed and
Sybase and NEON received notice of early termination on March 9, 2001. In
addition, Sybase received clearance from the Federal Cartel Office of the
Republic of Germany on April 5, 2001. See "The Merger -- Regulatory Approvals."
NEON and Sybase believe that there are no other material regulatory or
governmental approvals required in order for the merger to be consummated.
CAN I EXERCISE APPRAISAL RIGHTS?
No. At the end of the exchange offer, Sybase acquired more than a majority
of the fully-diluted shares of NEON common stock, but less than 90% of the
outstanding shares; therefore, Sybase will effect a long-form merger as
permitted under Delaware law, which requires notice to and approval of NEON
stockholders. NEON stockholders who have not exchanged their NEON shares in the
exchange offer will not have appraisal rights in connection with a long-form
merger.
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RISK FACTORS
NEON's stockholders should consider the following matters in deciding
whether to vote upon a proposal to approve and adopt the reorganization
agreement and to transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
RISKS RELATED TO THE PROPOSED MERGER
THE SYBASE COMMON STOCK TO BE RECEIVED BY NEON STOCKHOLDERS IN THE MERGER WILL
FLUCTUATE IN VALUE
The market price of the shares of Sybase common stock to be issued in the
merger in exchange for NEON common stock may change as a result of changes in
Sybase's or NEON's business, operations or prospects, market assessments of the
impact of the merger or general market conditions. Sybase's results of
operations, as well as the market price of Sybase common stock, may be affected
by factors different from those affecting NEON's results of operations and the
market price of NEON common stock. Because the market price of Sybase's common
stock fluctuates, the value of the Sybase shares to be received by NEON
stockholders in the merger will depend upon the market price of such shares at
the time they are received pursuant to the merger. There can be no assurance as
to this value. In addition, because the fraction of a Sybase share to be
exchanged for each NEON share is fixed, the amount by which the value of the
consideration actually received by you in the merger could decline.
SYBASE MAY FACE CHALLENGES IN INTEGRATING NEON'S BUSINESS WITH SYBASE AND, AS A
RESULT, MAY NOT REALIZE THE EXPECTED BENEFITS OF THE ANTICIPATED MERGER
Sybase may not be successful in integrating NEON's business with its own.
Integrating Sybase's operations and personnel with NEON's will be a complex
process. The integration may not be completed rapidly or achieve the anticipated
benefits of the merger. The successful integration of NEON's business with
Sybase's will require, among other things, integration of the two companies'
products and services, sales and marketing, information and software systems,
coordination of employee retention, hiring and training and coordination of
ongoing and future research and development efforts. The diversion of the
attention of management and any difficulties encountered in the process of
combining the companies could cause the disruption of, or a loss of momentum in,
the activities of the combined company's business. Further, the process of
combining NEON's business with Sybase could negatively affect employee morale
and Sybase's ability to retain some of its or NEON's key employees after the
merger.
In addition, Sybase intends after the merger to develop new products and
services that combine NEON's assets with Sybase. This may result in longer sales
cycles and product implementations, which may cause revenue and operating income
to fluctuate and fail to meet expectations. To date, Sybase has not completed
its investigation into the obstacles, technological, market-driven or otherwise,
to developing and marketing these new products and services in a timely and
efficient way. There can be no assurance that Sybase will be able to overcome
these obstacles, or that a market for such new Sybase products and services will
develop after the merger.
Also, Sybase could face additional risks inherent in NEON's business that
Sybase was not previously subject to, such as additional funding requirements in
the future due to the capital requirements of NEON's business.
OFFICERS AND DIRECTORS OF NEON HAVE POTENTIAL CONFLICTS OF INTEREST IN THE
TRANSACTION
NEON stockholders should be aware of potential conflicts of interest and
the benefits available to NEON directors when considering NEON's board of
directors' recommendation to approve the transaction. NEON officers and
directors have stock options, employment agreements and/or benefit plans that
provide them with interests in the transaction that are different from, or in
addition to, interests of NEON stockholders. See "Interests of Certain Persons
in the Merger."
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FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE
Sybase and NEON have made forward-looking statements in this information
statement and in documents incorporated herein by reference about Sybase, NEON
and the proposed combined company that are subject to risks and uncertainties.
Forward-looking statements include the information regarding:
synergies capital spending
efficiencies the timetable for completing the merger
cost savings allocation of intangibles
revenue enhancements integration of operations
capital productivity product integration
The sections in this document that have forward-looking statements include
"Summary Term Sheet," "Risk Factors," "The Merger -- Background of the Offer and
Merger," "The Merger -- Recommendation and Reasons of NEON Board," "The
Merger -- Opinion of NEON Financial Advisor." Forward-looking statements are
also identified by such words as "anticipates," "believes," "estimates,"
"expects," "intends" or similar expressions. In making these statements, Sybase
and NEON believe that the expectations are based on reasonable assumptions. Yet
you should understand that the following important factors (some of which are
beyond Sybase's and NEON's control), in addition to those discussed elsewhere in
this information statement and in the documents that have been incorporated by
reference, could affect the future results of Sybase and NEON, and of the
proposed combined company after completion of the merger. These factors could
also cause the results or other outcomes to differ materially from those
expressed in the forward-looking statements:
Economic and Industry Conditions
- materially adverse changes in economic or industry conditions generally
or in the markets served by the companies;
- product and labor prices, fluctuations in exchange rates and currency
values;
- capital expenditure requirements;
- volatility in the stock market;
Political/Governmental Factors
- political developments and law and regulations, such as legislative or
regulatory requirements, particularly concerning privacy and electronic
commerce;
- political stability in relevant areas of the world;
Technology Advances
- the development and use of new technology;
Operating Factors
- - changes in operating conditions and costs;
- - interest rates;
- - access to capital markets;
Transaction or Commercial Factors
- - the ability to integrate the businesses of Sybase and NEON successfully after
the merger;
- - the challenges inherent in diverting management's focus and resources from
other strategic opportunities and from operational matters during the
integration process;
- - the process of, or conditions imposed in connection with, obtaining regulatory
clearance for the merger;
Competitive Factors
- - the actions of competitors;
THE RECEIPT OF SYBASE SHARES COULD BE TAXABLE TO YOU, DEPENDING ON FACTS
SURROUNDING THE OFFER AND THE MERGER
Sybase and NEON have structured the offer and the merger to qualify as a
tax-free reorganization for federal income tax purposes. As a condition to the
consummation of the offer, Sybase and NEON obtained opinions of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, and Cooley Godward LLP,
respectively, that the offer and the merger will be treated for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, if (1) the offer and the merger are completed under the
current terms of the reorganization agreement, (2) the minimum tender condition
for
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the offer is satisfied and (3) the merger is completed promptly after the offer.
However, the ability to satisfy these factual assumptions, and therefore the
federal income tax consequences of the offer and the merger, depend in part on
facts that will not be available before the completion of the merger. There can
be no assurance that the merger will be completed, or that these factual
assumptions will be satisfied, although it is anticipated that all these
assumptions will be satisfied. If these factual assumptions are not satisfied, a
NEON stockholder's exchange of shares of NEON common stock for shares of Sybase
common stock in the offer or the merger could be a taxable transaction,
depending on surrounding facts. You are urged to carefully read the discussion
under "Material Federal Income Tax Consequences," and to consult your tax
advisor on the consequences of participation in the offer and/or the merger.
SYBASE WILL INCUR LARGE DEPRECIATION AND AMORTIZATION EXPENSES
In connection with the offer and the merger, large non-cash charges may
make Sybase's results of operations more difficult to interpret and may be
viewed unfavorably by investors and the financial community.
POTENTIALLY SIGNIFICANT INCREASES IN AMORTIZATION EXPENSE FROM PRELIMINARY
ESTIMATES REFLECTED IN THE UNAUDITED PRO FORMA FINANCIAL INFORMATION MAY OCCUR
ONCE THE PURCHASE CONSIDERATION IS FINALLY ALLOCATED TO NEON'S NET ASSETS
Pro forma results of operations reflect adjustments, which are based upon
preliminary estimates, to reflect the allocation of the purchase consideration
to the acquired assets and liabilities of NEON. The final allocation of the
purchase consideration will be determined after the completion of the merger and
will be based on appraisals and a comprehensive final evaluation of the fair
value of NEON's tangible assets, liabilities and identifiable intangible assets
at the time of the merger. Accordingly, the final determination of tangible and
intangible assets may result in amortization expense that is significantly
higher than the preliminary estimates of these amounts, which would cause
Sybase's depreciation and amortization expenses to increase.
PARTNERS OR CUSTOMERS MAY REACT UNFAVORABLY TO THE PROPOSED MERGER
Both Sybase and NEON partner with numerous other technology companies
including software and services firms to deliver Sybase and NEON products to
customers. Some of these partners may feel that the combined company poses new
competitive threats to their businesses and as a result may break their
relationships with Sybase or NEON. For example, the consummation of the offer
and the merger will give IBM the right to terminate its joint development,
marketing and reseller arrangement with NEON. In 2000, 1999 and 1998, royalty
revenue from IBM sales of NEON products accounted for 17%, 8% and 8%,
respectively, of NEON's total revenues. In addition, some of Sybase's customers
or customers of NEON may view the combined company as a competitor and,
therefore, cancel orders with Sybase or NEON.
RISKS RELATED TO SYBASE'S BUSINESS
THE MARKET FOR SYBASE'S STOCK IS HIGHLY VOLATILE
Sybase's ability to exceed, or its failure to achieve, expected operating
results for any period could significantly impact Sybase's stock price.
Inevitably, some investors will experience gains while others will experience
losses depending on the timing of their investment. The market for Sybase's
stock and for technology stocks in general is highly volatile, and the trading
price of Sybase's common stock has fluctuated widely during the past 5 years.
The stock price may continue to fluctuate in the future in response to various
factors, including its financial results, press and industry analyst reports,
market acceptance of its products and pricing policies, activities of
competitors, and other events. In addition, the stock market has from time to
time experienced extreme price and volume fluctuations that have categorically
affected the market price for high-technology companies, but which often have
been unrelated to the operating performance of these companies.
7
13
THE TIMING AND AMOUNT OF SYBASE'S REVENUES VARY SIGNIFICANTLY AND ESTIMATION OF
SYBASE'S REVENUES IS DIFFICULT
The timing and amount of Sybase's revenues are subject to a number of
factors that make it difficult to accurately estimate revenues and operating
results on a quarterly or annual basis. In Sybase's experience, license fees
revenues tend to decline between the fourth quarter of one year and the first
quarter of the next year. This has contributed to lower total revenues and
earnings in the first quarter compared to the prior fourth quarter. Sybase
currently anticipates that this seasonal pattern will continue.
Since Sybase operates with little or no backlog, quarterly revenues depend
largely on orders booked and shipped in that quarter. Historically, Sybase has
recorded 50% to 70% of Sybase's quarterly revenues in the last month of each
quarter, particularly during the final two weeks of that month. Sybase customers
include many large enterprises that make substantial investments in its products
and services. Therefore, the inability to record one or more large orders from a
customer at the very end of a quarter could materially and adversely impact
Sybase's results of operations. Sybase's operating expenses are based on
projected annual and quarterly revenue levels, and are generally incurred
ratably throughout each quarter. Since Sybase's operating expenses are
relatively fixed in the short term, failure to realize projected revenues for a
specified period could impact operating results, causing an operating loss for
that period, as occurred in the first quarter of 1998.
In North America, Sybase currently ships most of its products from its
California and Massachusetts distribution facilities. Because Sybase tends to
record a high percentage of revenues during the last two weeks of each quarter,
disruption of operations at either facility at that time (due to natural
calamity or systems failure, for example) could directly harm Sybase's ability
to record revenues for such quarter. This could, in turn, have an adverse impact
on operating results.
SYBASE'S INDUSTRY IS HIGHLY COMPETITIVE
The market for Sybase products and services is fast-paced and extremely
competitive, and is marked by dynamic customer demands, short product life
cycles, and the rapid emergence of the e-Business marketplace. Sybase has
numerous competitors, including large companies such as Oracle Corporation,
Microsoft Corporation and IBM Corporation (which recently announced its intent
to acquire the business of Informix Corporation) and smaller highly aggressive
firms. Many of these companies may have greater financial, technical, sales, and
marketing resources, and a larger installed base than Sybase. In addition,
Sybase's competitors' advertising and marketing efforts could adversely
influence customer perception of Sybase's products and services, and harm
Sybase's business prospects as a result. To remain competitive, Sybase must be
able to develop new products, enhance existing products and retain competitive
pricing policies in a timely manner. Its failure to compete successfully with
new or existing competitors could have a material adverse impact on Sybase's
business, and on the market price of Sybase's stock.
SYBASE'S ABILITY TO ENHANCE EXISTING PRODUCTS AND DEVELOP NEW PRODUCTS AND THE
COMPATIBILITY OF THESE PRODUCTS WITH THIRD PARTY SOFTWARE WILL IMPACT ITS
RESULTS OF OPERATIONS
Increasing widespread use of the Internet may significantly alter how
Sybase does business in the future. This, in turn, could affect Sybase's ability
to timely meet the demand for new or enhanced products and services at
competitive prices.
In March 2001, Sybase began shipping the latest version of Sybase
Enterprise Portal, the industry's first enterprise-class portal product designed
to enable organizations to provide personalized business interfaces to
employees, customers, partners and suppliers. In May 2000, the latest versions
of Replication Server, EnterpriseConnect and MainframeConnect, Sybase's data
movement and data access products designed to operate with the Enterprise Portal
technology, also became generally available. Sybase Enterprise Portal solutions
are intended to enable successful e-Business strategies for organizations
transacting business via the Internet. As a general matter, deployment of
enterprise portals has increased dramatically in recent years, and Sybase
believes that increasing demand for enterprise portal solutions will enhance its
revenues and profitability. However, if the market does not continue to develop
as anticipated, or if the Enterprise Portal
8
14
solutions and services do not successfully compete in the marketplace, increased
revenues and profitability may not be realized.
Sybase's future results may also be affected if its products cannot
interoperate and perform well with software products of other companies. Certain
leading applications currently are not interoperable with Sybase's products, and
others may never be. In addition, many of its principal products are designed
for use with products offered by competitors. In the future, vendors of
non-Sybase products may become less willing to provide Sybase with access to
their products, technical information, and marketing and sales support, which
could harm Sybase's business and prospects.
IF SYBASE'S DIVISIONAL SALES MODEL IS UNABLE TO COORDINATE ITS SALES EFFORTS
EFFICIENTLY, ITS BUSINESS WILL SUFFER
In January 1999, Sybase realigned its direct sales force, product teams and
professional services capabilities into four divisions. This reorganization was
intended to enhance overall revenues and profitability by providing increased
focus on each of four key markets: Enterprise Solutions, Mobile and Embedded
Computing, Internet Applications and Business Intelligence. In January 2000, the
acquisition of HFN (now Financial Fusion, Inc., a wholly-owned subsidiary)
increased Sybase's focus on the financial services market. In May 2000, Sybase
announced the launch of iAnywhere Solutions, Inc., a wholly-owned subsidiary
formed to continue the business of the MEC division in mobile and wireless
e-Business products and services. In addition, once the merger with NEON closes,
Sybase plans to create a new e-Business division that will focus on
incorporating NEON's technology with Sybase's Enterprise Portal platform, and
certain other products and services. Further changes in Sybase's divisional
sales model could have a direct effect on Sybase's results of operations. If
Sybase has misjudged demand for its products and services in its target markets,
or if Sybase's divisions and subsidiaries generally are unable to coordinate
their respective sales efforts in a focused and efficient way, this could
materially and adversely affect Sybase's business and prospects.
A SIGNIFICANT PORTION OF SYBASE'S REVENUES ARE DERIVED FROM INTERNATIONAL
OPERATIONS
Sybase derives a substantial portion of its revenues from its international
operations. In 2000, these revenues represented 39% of Sybase's total revenues.
As a global concern, Sybase faces exposure to adverse movements in foreign
currency exchange rates. These exposures may change over time as business
practices evolve and could have a material adverse impact on Sybase's financial
position and results of operations. Historically, Sybase's primary exposures
have related to non dollar-denominated sales and expenses in Europe, Asia
Pacific, and Latin America. In order to reduce the effect of foreign currency
fluctuations, Sybase utilizes foreign currency forward exchange contracts
(forward contracts) to hedge certain foreign currency transaction exposures
outstanding during the period (approximately 30 days). The gains and losses on
the forward contracts mitigate the gains and losses on Sybase's outstanding
foreign currency transactions. Sybase does not enter into forward contracts for
trading purposes. All foreign currency transactions and all outstanding forward
contracts are marked-to-market at the end of the period with unrealized gains
and losses included in interest expense and other, net. The unrealized gain
(loss) on the outstanding forward contracts as of December 31, 2000 was
immaterial to Sybase's consolidated financial statements.
Sybase's revenues from international operations could also fluctuate due to
the relative immaturity of some markets, rapid growth in other markets, and
organizational changes it has made to accommodate these conditions. For example,
in February 2001, Sybase acquired its distributor in Denmark and in September
2000, Sybase acquired certain assets and assumed certain liabilities of its
distributor in Mexico. During 1998 and 1999, Sybase closed subsidiaries in
Mexico, Thailand, Chile, Peru and Venezuela. Several significant management and
organizational changes occurred in the same period, including the resignation or
replacement of several country managers in Europe and Asia and the European
General Manager.
Other factors that could affect aspects of Sybase's international
operations include:
- Changes in political, regulatory, or economic conditions
- Changes or limitations in trade protection laws
9
15
- Changes in tax treaties or laws favorable to Sybase
- Natural disasters
INTELLECTUAL PROPERTY
Sybase's inability to obtain adequate copyright, patent or trade secret
protection for Sybase's products in certain countries may have a material
adverse impact on future operating results. Also, as the number of software
products and associated patents increase, it is possible that software
developers will become subject to more frequent infringement claims.
In the past, third parties have claimed that their patents or other
proprietary rights were violated by Sybase products. It is possible that such
claims will be asserted in the future. Regardless of whether these claims have
merit, they can be time consuming and expensive to defend or settle, and can
harm the Company's business and reputation. Sybase does not believe its products
infringe any third party patents or proprietary rights, but there is no
guarantee that Sybase can avoid claims or findings of infringement in the
future.
SYBASE'S FUTURE SUCCESS DEPENDS IN PART ON THE CONTINUED SERVICE OF KEY BOARD
MEMBERS, EXECUTIVE AND TECHNICAL PERSONNEL AND ITS ABILITY TO IDENTIFY, HIRE AND
RETAIN ADDITIONAL PERSONNEL
Sybase's inability to hire and retain qualified technical, managerial,
sales and other employees could affect its product development and sales
efforts, other aspects of its operations, and Sybase's financial results.
Competition for highly skilled personnel is intense. Sybase's financial and
stock price performance relative to the companies with whom it competes for
employees and the relatively high cost of living in the San Francisco Bay Area,
where Sybase's headquarters is located, could also impact the degree of future
employee turnover.
In recent years, Sybase has experienced a number of changes in its Board of
Directors and in the executive management team. For example, in April 2000,
Linda K. Yates became a member of the Board. In November 1999, Cecilia Claudio
also joined the Board. During 1999, Leo T. Hindery, Jeffrey T. Webber and Robert
S. Epstein resigned from the Board. John Chen became Sybase's Chairman of the
Board, Chief Executive Officer and President in 1998. In early 1999, Pieter Van
der Vorst became Sybase's Chief Financial Officer, Pamela George was named Vice
President, Corporate Marketing, and Daniel Carl became Vice President and
General Counsel. In August 2000 Marty Beard was named Vice President, Corporate
Development, and in November 2000, Richard N. LaBarbera resigned as Senior Vice
President and General Manager of ESD. In connection with the formation of FFI
and iAS, certain of Sybase officers and employees became officers and employees
of these subsidiaries. Additionally, each of FFI and iAS has its own board of
directors and senior management team. Further changes involving executives and
managers resulting from acquisitions, mergers and other events could increase
the current rate of employee turnover, particularly in consulting, engineering
and sales. Additionally, further changes in Board members could affect Sybase's
current strategic business plans.
SYBASE'S ACQUISITIONS AND STRATEGIC RELATIONSHIPS MAY ADVERSELY IMPACT ITS
FUTURE RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Sybase regularly explores possible acquisitions and other strategic
ventures to expand and enhance its business. Sybase has recently acquired or
invested in a number of companies and will likely continue to do so in the
future. In February 2001, Sybase acquired its distributor in Denmark for
approximately $3.5 million in cash. In September 2000, Sybase acquired certain
of the assets of its distributor in Mexico, and in July 2000, Sybase invested
$2.0 million for a majority interest in an entity established with a subsidiary
of Hong Kong Telecom. In January 2000, Sybase acquired Home Financial Network,
an Internet financial services company specializing in the development of
customized e-finance Web sites, which became FFI. In 1999, Sybase acquired Data
Warehouse Network, a provider of industry-specific business intelligence
applications.
Sybase may not achieve the desired benefits of its acquisitions and
investments. For example, Sybase may be unable to successfully assimilate an
acquired company's management team, business infrastructure,
10
16
company culture, or other important factors. Also, dedication of additional
resources to handle these integration tasks could temporarily divert attention
from other important business. Such acquisitions could also result in costs,
liabilities, or additional expenses that could harm Sybase's results of
operations and financial condition. With respect to Sybase's investments in
other companies, Sybase may not realize a return on its investments, or the
value of its investments may decline if the businesses in which Sybase invests
are not successful. These companies include start-ups seeking to develop
technology that has not been tested in the marketplace. Such companies typically
have no history of earnings and may lack a seasoned management team.
CALIFORNIA'S CURRENT ENERGY CRISIS COULD DISRUPT SYBASE'S OPERATIONS AND
INCREASE ITS EXPENSES
Sybase is headquartered in Emeryville, California, where it leases
administrative and product development facilities. California is in the midst of
an energy crisis that could disrupt Sybase's operations and increase its
expenses. The overall power shortage in California has increased the cost of
energy, which Sybase may not be able to pass on to its customers. In addition,
in the event of an acute power shortage, that is, when power reserves for the
State of California fall below 1.5%, California has on some occasions
implemented, and may in the future continue to implement, rolling blackouts
throughout California. Sybase currently has backup generators only for certain
limited operations, and its current insurance policies do not provide coverage
for any damages it or its customers may suffer as a result of any interruption
in the power supply. If blackouts interrupt Sybase's power supply, Sybase would
be temporarily unable to continue operations at its administrative and product
development facilities. Any such interruption in Sybase's ability to continue
operations at its facilities could affect Sybase's productivity, delay product
development, damage its reputation, harm its ability to retain existing
customers and to obtain new customers, and could result in lost revenue, any of
which could substantially harm Sybase's business and results of operations.
11
17
SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA
SELECTED HISTORICAL FINANCIAL DATA OF SYBASE
The following selected historical financial data should be read in
conjunction with Sybase's financial statements incorporated by reference in this
information statement. The statement of operations data for the years ended
December 31, 1996, 1997, 1998, 1999 and 2000 and the balance sheet data as of
December 31, 1996, 1997, 1998, 1999 and 2000 have been derived from Sybase's
audited financial statements not included in this information statement. This
financial data should be read with the consolidated financial statements for the
years ended December 31, 1998, 1999 and 2000, which are incorporated by
reference in this information statement.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1996 1997 1998 1999 2000
---------- -------- -------- -------- --------
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues:
License fees............................... $ 605,491 $471,036 $421,454 $421,645 $468,501
Services................................... $ 406,054 $432,901 $446,015 $449,988 $491,957
---------- -------- -------- -------- --------
Total revenues............................... 1,011,545 903,937 867,469 871,633 960,458
Cost and expenses:
Cost of license fees....................... 29,859 31,356 37,573 46,241 45,120
Cost of services........................... 246,273 248,625 235,574 217,053 245,837
Sales and marketing........................ 511,316 457,441 377,774 310,774 345,149
Product development and engineering........ 164,676 138,590 148,583 136,272 126,689
General and administrative................. 72,561 62,607 65,406 68,876 67,267
Amortization of goodwill and other
purchased intangibles.................... 11,843 11,720 15,205 13,920 32,730
Cost (reversals) of restructuring.......... 49,232 -- 74,167 (8,528) (791)
In process research and development........ -- -- -- -- 8,000
---------- -------- -------- -------- --------
Total costs and expenses................. 1,085,760 950,339 954,282 784,608 870,001
---------- -------- -------- -------- --------
Operating income (loss)...................... (74,215) (46,402) (86,813) 87,025 90,457
Interest income and expense, net............. 7,507 5,646 7,748 13,773 17,035
Minority interest............................ -- -- -- -- 94
---------- -------- -------- -------- --------
Income (loss) before income taxes............ (66,708) (40,756) (79,065) 100,798 107,586
Provision for income taxes................... 12,298 14,668 14,063 38,303 35,461
---------- -------- -------- -------- --------
Net Income (loss)........................ $ (79,006) $(55,424) $(93,128) $ 62,495 $ 72,125
========== ======== ======== ======== ========
Basic net income (loss) per share............ $ (1.05) $ (0.70) $ (1.15) $ 0.76 $ 0.82
---------- -------- -------- -------- --------
Shares used in computing basic net income
(loss) per share........................... 75,160 78,794 80,893 81,817 87,711
========== ======== ======== ======== ========
Diluted net income (loss) per share.......... $ (1.05) $ (0.70) $ (1.15) $ 0.74 $ 0.78
---------- -------- -------- -------- --------
Shares used in computing diluted net income
(loss) per share........................... 75,160 78,794 80,893 84,156 92,150
========== ======== ======== ======== ========
AS OF DECEMBER 31,
--------------------------------------------------------
CONSOLIDATED BALANCE SHEET DATA: 1996 1997 1998 1999 2000
-------------------------------- -------- -------- -------- -------- --------
Cash, cash equivalents and cash investments... $174,522 $246,137 $249,613 $352,899 $354,612
Working capital............................... 93,056 67,510 84,179 127,229 157,486
Total assets.................................. 751,891 781,625 696,604 737,335 915,040
Long-term obligations......................... 2,871 1,959 2,011 5,799 5,795
Stockholders' equity.......................... 396,808 371,515 301,072 336,110 490,752
Cash dividends declared per common share...... -- -- -- -- --
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SELECTED HISTORICAL FINANCIAL DATA OF NEON
The following selected historical financial data should be read in
conjunction with NEON's financial statements incorporated by reference in this
information statement. The statement of operations data for the years ended
December 31, 1996, 1997, 1998, 1999 and 2000 and the balance sheet data as of
December 31, 1996, 1997, 1998, 1999 and 2000 have been derived from NEON's
audited financial statements not included in this information statement. This
financial data should be read with the consolidated financial statements for the
years ended December 31, 1998, 1999 and 2000, which are incorporated by
reference in this information statement.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1996 1997 1998 1999 2000(2)
------- ------- ------- -------- --------
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues:
Software licenses............................ $ 3,383 $15,970 $40,976 $ 59,564 $104,664
Software maintenance......................... 24 755 4,912 16,178 21,663
Professional services........................ 3,738 5,921 19,926 50,482 62,021
------- ------- ------- -------- --------
Total revenues................................. $ 7,145 $22,646 $65,814 $126,224 $188,348
Cost of revenues............................... 3,328 5,343 14,607 40,301 55,081
Gross profit................................... 3,817 17,303 51,207 85,923 133,267
------- ------- ------- -------- --------
Operating expenses:
Sales and marketing.......................... 4,425 8,824 21,942 54,862 89,755
Research and development..................... 3,658 7,730 15,839 34,873 42,505
General and administrative................... 1,467 2,334 6,571 15,620 16,942
Loss from operations........................... (5,733) (4,251) (12,521) (71,426) (64,376)
Net loss....................................... $(5,672) $(3,507) $(8,499) $(46,312) $(60,870)
======= ======= ======= ======== ========
Net loss per common share, basic and
diluted(1)................................... $ (2.10) $ (0.32) $ (0.38) $ (1.44) $ (1.71)
======= ======= ======= ======== ========
Weighted average shares of common stock
outstanding(1)............................... 2,707 10,958 22,277 32,248 35,691
AS OF DECEMBER 31,
-------------------------------------------------
1996 1997 1998 1999 2000
------ ------- -------- -------- --------
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents, short-term and
long-term investments........................ $3,387 $22,724 $196,091 $ 94,815 $ 51,195
Working capital................................ 2,586 25,928 195,856 86,368 43,990
Total assets................................... 7,073 40,229 298,678 359,520 349,484
Long-term obligations.......................... 442 -- -- -- --
Stockholders' equity........................... 3,515 34,731 275,615 320,641 295,971
Cash dividends declared per common share....... -- -- -- -- --
- ---------------
(1) All share and per share information has been adjusted to reflect a
two-for-one stock split that was effected in the form of a 100% stock
dividend to stockholders of record as of November 23, 1998.
(2) On January 23, 2001, NEON announced in a press release, net losses for the
year and quarter ended December 31, 2000 of $57.9 million and $39.3 million,
respectively. On February 20, 2001, NEON disclosed an additional provision
for uncollectible receivables of $3.0 million was subsequently made and
reflected in the final audited results for the year ended December 31, 2000
from which this information has been derived.
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SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
The following selected unaudited pro forma combined condensed financial
data should be read in conjunction with Sybase's unaudited pro forma combined
condensed financial statements and related notes thereto included in this
information statement. The selected unaudited pro forma combined condensed
financial data gives effect to the proposed merger of Sybase and NEON and the
acquisition of Home Financial Network ("HFN") by Sybase on January 20, 2000.
The selected unaudited pro forma combined condensed statement of operations
data for the year ended December 31, 2000 gives effect to the above transactions
as if they occurred on January 1, 2000. The selected unaudited pro forma
combined condensed statement of operations data for the year ended December 31,
2000 has been derived by combining the audited historical statement of
operations of NEON and Sybase for the year ended December 31, 2000 with the
unaudited historical statement of operations for HFN for the period from January
1, 2000 to January 20, 2000.
The selected unaudited pro forma combined condensed financial data do not
include the realization of any cost savings from operating efficiencies,
synergies or other restructurings that may result from the merger.
The selected unaudited pro forma combined condensed balance sheet as of
December 31, 2000 gives effect to the proposed merger of Sybase and NEON as if
it occurred on December 31, 2000. The selected unaudited pro forma combined
condensed balance sheet data as of December 31, 2000 has been derived by
combining the audited historical consolidated balance sheets of Sybase and NEON
as of December 31, 2000.
The selected unaudited pro forma combined condensed information is
presented for illustrative purposes only and is not necessarily indicative of
the operating results or financial position that would have occurred if the
merger had been consummated as of the assumed dates, nor is it necessarily
indicative of future operating results or financial position of the combined
companies. The pro forma adjustments are based upon information and assumptions
available at March 15, 2001.
YEAR ENDED
DECEMBER 31, 2000
-----------------
(IN THOUSANDS,
EXCEPT PER SHARE
AMOUNTS)
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS DATA:
Total revenues.............................................. $1,148,806
Net income (loss)........................................... 12,547
Basic net income (loss) per share........................... 0.12
Diluted net income (loss) per share......................... 0.12
AS OF
DECEMBER 31, 2000
-----------------
(IN THOUSANDS)
PRO FORMA COMBINED CONDENSED BALANCE SHEET DATA:
Cash, cash equivalents and cash investments, including
long-term investments..................................... $ 405,807
Working capital............................................. 197,659
Total assets................................................ 1,312,172
Long-term debt and capital lease obligation, less current
portion................................................... 6,160
Total stockholders' equity.................................. 830,554
COMPARATIVE PER SHARE DATA
The following table reflects (a) the historical net income (loss) and book
value per share of Sybase common stock and the historical net income (loss) and
book value per share of NEON common stock in comparison with the unaudited pro
forma net income (loss) and book value per share after giving effect to Sybase's
proposed merger with NEON, and (b) the equivalent historical net income (loss)
and book value per share attributable to .3878 shares of Sybase common stock
which will be received for each share of NEON.
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20
The historical book value per share is computed by dividing common
stockholders' equity as of December 31, 2000, by the actual common shares
outstanding. The pro forma net income (loss) per share is computed by dividing
the pro forma net income (loss) by the pro forma weighted average number of
shares outstanding, assuming Sybase had merged with NEON at January 1, 2000. The
pro forma combined book value per share is computed by dividing total pro forma
stockholders' equity by the pro forma number of shares of common stock
outstanding at December 31, 2000, assuming the merger had occurred on that date.
The NEON equivalent pro forma combined per share amounts are calculated by
multiplying the Sybase pro forma combined per share amounts by the exchange
ratio of 0.3878.
The following information should be read in conjunction with (a) the
separate historical financial statements and related notes of Sybase, (b) the
separate historical financial statements and related notes of NEON, and (c) the
unaudited pro forma combined condensed financial information and related notes
of Sybase and the selected historical and selected unaudited pro forma financial
data included elsewhere in this information statement. The pro forma information
is presented for illustrative purposes only and is not necessarily indicative of
the operating results or financial position that would have occurred if the
merger had been consummated as of the assumed dates, nor is it necessarily
indicative of the future operating results or financial position of the combined
companies.
YEAR ENDED
DECEMBER 31,
2000
------------
Historical Sybase:
Basic net income per share................................ $ 0.82
Diluted net income per share.............................. $ 0.78
Book value per share at the end of the period............. $ 5.60
Historical NEON:
Basic and diluted net (loss) per share.................... $(1.71)
Book value per share at the end of the period............. $ 8.09
Sybase and NEON Pro Forma Combined:
Pro forma basic net income (loss) per Sybase share........ $ 0.12
Pro forma diluted net income (loss) per Sybase share...... $ 0.12
Pro forma basic net income (loss) per NEON share.......... $ 0.05
Pro forma diluted net income (loss) per NEON share........ $ 0.05
Pro forma book value per Sybase share at December 31,
2000................................................... $ 8.15
Pro forma book value per NEON share at December 31,
2000................................................... $ 3.16
COMPARATIVE MARKET PRICE INFORMATION
The following table sets forth the last sale prices per share of Sybase
common stock and NEON common stock on the Nasdaq National Market on February 20,
2001, the last trading day prior to the public announcement of the proposed
merger, and on May 3, 2001, the most recent date for which prices were
practically available prior to filing this document. The table also sets forth
the value of the shares of Sybase common stock that a NEON stockholder would
have received for one share of NEON common stock, assuming that the merger had
taken place on those dates. These numbers have been calculated by multiplying
0.3878, the exchange ratio of Sybase shares for each NEON share, by the last
sale price per share of Sybase common stock on those dates. The actual value of
the shares of Sybase common stock a stockholder will receive on the date of the
merger may be higher or lower than the prices set forth below.
LAST SALE LAST SALE VALUE OF SYBASE
PRICE OF SYBASE PRICE OF NEON COMMON STOCK
COMMON STOCK COMMON STOCK RECEIVED
--------------- ------------- ---------------
February 20, 2001................................ $24.50 $6.94 $9.50
May 3, 2001...................................... $15.52 $6.00 $6.02
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UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial statements
give effect to the merger between Sybase and NEON proposed on February 20, 2001
and the acquisition of HFN on January 20, 2000, both accounted for as purchase
business combinations.
On February 20, 2001 Sybase entered into a reorganization agreement with
NEON for consideration preliminarily valued at $361.0 million, consisting of
14.3 million shares of Sybase common stock valued at $316.6 million as of such
date and 3.1 million options to purchase Sybase common stock valued at an
estimated $32.6 million, and estimated direct acquisition costs of $11.8
million. The estimated direct acquisition costs consist primarily of investment
banker, legal and accounting fees, regulatory filing and printing costs to be
incurred by Sybase and NEON which are directly related to the merger. The actual
value of the consideration for the merger with NEON cannot yet be determined
since the merger has not yet been completed. There can be no assurance that
Sybase and NEON will not incur additional charges related to the merger or that
management will be successful in its efforts to integrate the operations of the
two companies. For the purpose of the following pro forma financial information,
the number of shares of Sybase common stock assumed to be issued in the merger
with NEON is approximately 14.3 million. This amount is based on the number of
common shares of NEON outstanding as of February 20, 2001, the date of the
reorganization agreement. Similarly, the estimated value of options to purchase
Sybase common stock to be issued in the merger with NEON is based on the
outstanding options to purchase shares of NEON common stock as of February 20,
2001. The actual number of shares of Sybase common stock and options to be
issued will be based on the actual outstanding common shares and options of NEON
as of the date of completion of the merger.
The unaudited pro forma combined condensed balance sheet combines the
audited historical condensed balance sheets of Sybase and NEON as of December
31, 2000.
The unaudited pro forma combined condensed statements of operations give
effect to the proposed merger between Sybase and NEON, and the completed
acquisition of HFN, as if it had occurred on January 1, 2000. The unaudited pro
forma combined condensed statement of operations for the year ended December 31,
2000 combines the audited historical statement of operations of Sybase and NEON
for the year ended December 31, 2000, along with the unaudited historical
statement of operations for HFN for the period January 1, 2000 to January 20,
2000.
The unaudited pro forma combined condensed financial statements include
adjustments, which are based upon preliminary estimates, to reflect the
allocation of purchase consideration to the acquired assets and liabilities of
NEON. The final allocation of the purchase consideration will be determined
after the completion of the merger and will be based on appraisals and a
comprehensive final evaluation of the fair value of NEON's tangible assets
acquired, liabilities assumed, identifiable intangible assets and goodwill at
the time of the acquisition. The final determination of tangible and intangible
assets may result in depreciation and amortization expenses that are different
from the preliminary estimates of these amounts. To the extent that a portion of
the purchase price is allocated to in-process research and development as is
anticipated, a charge will be recognized for the period in which the acquisition
occurs. Any change to depreciation and amortization expenses may be material to
Sybase's results of operations.
The unaudited pro forma combined condensed financial statements do not
include the realization of cost savings from operating efficiencies, synergies
or other restructurings that may result from the mergers.
The unaudited pro forma combined condensed information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results or financial position that would have occurred if the merger and the
acquisition had been consummated as of the assumed dates, nor is it necessarily
indicative of future operating results or financial position of the combined
companies. The pro forma adjustments are based upon information and assumptions
available at the time of the filing of this document.
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22
The pro forma information should be read in conjunction with the
accompanying notes thereto, Sybase's historical financial statements and related
notes thereto incorporated by reference in this information statement, NEON's
historical financial statements and related notes thereto incorporated by
reference in this information statement, and other information pertaining to
Sybase and NEON included or incorporated by reference in this information
statement, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Factors" of each company included
or incorporated by reference in this information statement.
17
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SYBASE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
DECEMBER 31, 2000
(IN THOUSANDS)
PRO FORMA PROFORMA
SYBASE NEON COMBINED ADJUSTMENTS COMBINED
-------- --------- ---------- ----------- ----------
Current assets
Cash and cash equivalents.............. $235,588 $ 12,521 $ 248,109 -- $ 248,109
Short-term cash investments............ 78,386 28,115 106,501 -- 106,501
-------- --------- ---------- ----------
Total cash, cash equivalents and
short-term cash investments....... 313,974 40,636 354,610 -- 354,610
Accounts receivable, net............... 213,224 41,356 254,580 -- 254,580
Deferred income taxes.................. 28,594 -- 28,594 28,594
Prepaid expenses and other current
assets.............................. 18,321 15,146 33,467 -- 33,467
-------- --------- ---------- ----------
Total current assets................ 574,113 97,138 671,251 -- 671,251
Long-term cash investments............... 40,638 10,559 51,197 -- 51,197
Restricted long-term cash and investments
in marketable securities............... -- 7,000 7,000 -- 7,000
Property, equipment and improvements,
net.................................... 59,296 25,919 85,215 -- 85,215
Deferred income taxes.................... 19,020 2,226 21,246 -- 21,246
Capitalized software, net................ 33,794 -- 33,794 -- 33,794
Goodwill and other purchased intangibles,
net.................................... 147,513 195,884 343,397 $(195,884)(2) 391,045
243,532(2)
Other assets............................. 40,666 10,758 51,424 -- 51,424
-------- --------- ---------- --------- ----------
Total Assets........................ $915,040 $ 349,484 $1,264,524 $ 47,648 $1,312,172
======== ========= ========== ========= ==========
Current liabilities
Accounts payable....................... $ 16,094 $ 9,254 $ 25,348 -- $ 25,348
Accrued compensation and related
expenses............................ 55,237 10,964 66,201 -- 66,201
Accrued income taxes................... 38,679 38,679 -- 38,679
Other accrued liabilities.............. 99,641 13,723 113,364 11,800(1) 125,164
Deferred revenue....................... 206,976 19,207 226,183 (7,983)(2) 218,200
-------- --------- ---------- --------- ----------
Total current liabilities........... 416,627 53,148 469,775 3,817 473,592
Other liabilities........................ 5,795 365 6,160 -- 6,160
Minority interest........................ 1,866 -- 1,866 -- 1,866
Stockholders' equity
Common stock........................... 91 4 95 (4)(5) 106
15(1)
Additional paid-in capital............... 582,972 432,422 1,015,394 (432,422)(5) 932,125
349,153(1)
Accumulated deficit.................... (6,940) (128,688) (135,628) 128,688(5) (6,940)
Accumulated other comprehensive loss... (22,305) (3,974) (26,279) 3,974(5) (22,305)
Deferred stock-based compensation...... -- (1,243) (1,243) 1,243(5) (9,366)
(9,366)(2)
Treasury stock......................... (63,066) (2,550) (65,616) 2,550(5) (63,066)
-------- --------- ---------- --------- ----------
Total stockholders' equity.......... 490,752 295,971 786,723 43,831 830,554
Total liabilities and stockholders'
equity............................ $915,040 $ 349,484 $1,264,524 $ 47,648 $1,312,172
======== ========= ========== ========= ==========
See accompanying notes to unaudited pro forma combined condensed financial
statements.
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SYBASE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
TOTAL
PRO FORMA PRO FORMA
SYBASE HFN(12) ADJUSTMENTS COMBINED NEON COMBINED ADJUSTMENTS COMBINED
---------- ------- ----------- -------- -------- ---------- ----------- ----------
Revenues:
License fees............... $468,501 $468,501 $104,664 $ 573,165 $ 573,165
Services................... 491,957 491,957 83,684 575,641 575,641
-------- ------- ------- -------- -------- ---------- -------- ----------
Total revenues........... 960,458 -- 960,458 188,348 1,148,806 1,148,806
Cost and expenses:
Cost of license fees....... 45,120 4 167(10) 45,291 3,261 48,552 -- 48,552
Cost of services........... 245,837 215 246,052 51,820 297,872 297,872
Product development and
engineering.............. 126,689 316 127,005 42,505 169,510 169,510
Sales and marketing........ 345,149 381 345,530 89,755 435,285 435,285
General and
administrative........... 67,267 2,109 69,376 16,942 86,318 86,318
Stock-based compensation... -- 2,342 2,342 3,122(7) 5,464
Amortization of goodwill
and other purchased
intangibles.............. 32,730 1,056(9) 33,786 36,297 70,083 (36,297)(3) 74,375
40,589(6)
Asset impairment charges... 4,954 4,954 (4,954)(3) --
In-process research and
development.............. 8,000 (8,000)(11) -- -- -- --
Cost of restructuring...... (791) (791) 4,848 4,057 4,057
-------- ------- ------- -------- -------- ---------- -------- ----------
Total costs and expenses..... 870,001 3,025 (6,777) 866,249 252,724 1,118,973 2,460 1,121,433
Operating income (loss)...... 90,457 (3,025) 6,777 94,209 (64,376) 29,833 (2,460) 27,373
Interest income.............. 17,857 17,857 4,650 22,507 22,507
Interest expense and other,
net........................ (822) (822) (353) (1,175) (1,175)
Minority interest............ 94 94 94 94
-------- ------- ------- -------- -------- ---------- -------- ----------
Income (loss) before income
taxes...................... 107,586 (3,025) 6,777 111,338 (60,079) 51,259 (2,460) 48,799
Provision for income taxes... 35,461 -- 35,461 791 36,252 --(4) 36,252
-------- ------- ------- -------- -------- ---------- -------- ----------
Net income (loss).......... $ 72,125 $(3,025) $ 6,777 $ 75,877 $(60,870) $ 15,007 $ (2,460) $ 12,547
Pro forma net income (loss)
per share -- Basic(8).... $ 0.82 $(0.04) $ 0.87 $ (1.71) $ 0.12
Pro forma net income (loss)
per share -- Diluted(8).. $ 0.78 $(0.04) $ 0.82 $ (1.71) $ 0.12
Number of shares used in
pro forma per share
calculation --
Basic(8)................. 87,711 80,893 87,711 35,691 14,291 102,002
Number of shares used in
pro forma per share
calculation --
Diluted(8)............... 92,150 80,893 92,150 35,691 15,028 107,178
See accompanying notes to unaudited pro forma combined condensed financial
statements.
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25
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
The unaudited pro forma combined condensed consolidated balance sheet has
been prepared as if the acquisition occurred on December 31, 2000, the date of
the pro forma balance sheet. The unaudited pro forma combined condensed
consolidated statements of operations for the year ended December 31, 2000 has
been prepared to reflect the acquisition of NEON by Sybase as if the acquisition
had occurred on January 1, 2000. Sybase will account for the acquisition of NEON
as a purchase business combination. The pro forma combined condensed
consolidated statement of operations for the year ended December 31, 2000
reflects the combination of the separate historical statement of operations of
NEON with the pro forma results of Sybase. The Sybase pro forma statement of
operations for the year ended December 31, 2000 combines the results of Sybase
with HFN, a company acquired by Sybase on January 20, 2000. The pro forma
combined condensed balance sheet reflects the combination of the separate
historical balance sheets of NEON and Sybase as of December 31, 2000.
The total estimated purchase cost of the acquisition has been allocated on
a preliminary basis to assets and liabilities based on management's
determination of their fair values. The excess of the purchase cost over the
fair value of the net tangible assets acquired has been preliminarily allocated
by management to goodwill and other purchased intangibles. The estimated
purchase price, the excess of the purchase cost over the fair value of the net
tangible assets and the allocation to intangible assets is subject to change
pending completion of the final analysis of the fair values of the stock options
assumed, the assets acquired and the liabilities assumed. The impact of these
changes could be material.
Pro forma adjustments for the unaudited pro forma combined condensed
balance sheet and statements of operations for the year ended December 31, 2000
are as follows:
(1) To reflect the acquisition of all of the outstanding capital stock of NEON
for a total estimated purchase cost of approximately $361.0 million. The
purchase consideration consists of the following:
(a) Issuance of approximately 14,291,000 shares of Sybase common stock with
a fair value of approximately $316.6 million. The fair value per share
of common stock issued is based on the average of the closing prices on
the two days prior to and after the acquisition agreement announcement,
February 16, February 20, February 21 and February 22, 2001,
respectively.
(b) Assumption of options to purchase approximately 3,128,000 shares of
Sybase common stock with a fair value of approximately $32.6 million.
The fair value of the options assumed was determined based on the
Black-Scholes model. Assumptions used in determining the fair value of
the options assumed under the Black-Scholes model are as follows:
- Fair market value of the underlying shares is based on the average
closing price of Sybase shares for February 16, February 20,
February 21, and February 22.
- Expected life -- .25 to 4.25 years
- Expected volatility -- .7093
- Risk-free interest rate -- 6.18%
- Expected dividend rate -- 0%
(c) Merger related costs of approximately $11.8 million consisting
primarily of fees for investment bankers, attorneys, accountants,
regulatory filings and financial printing. No pro forma adjustments
have been made to reflect costs associated with combining the
operations of the two companies, or severance benefits and costs
associated with discontinuing some redundant business activities, as
the nature and amount of these costs have not yet been determined.
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26
(2) The preliminary allocation of the purchase price over the fair value of net
tangible assets acquired, using an assumed December 31, 2000 closing date
for purposes of determining net tangible assets has been determined as
follows (in millions):
Total purchase price........................................ $361.0
Fair value of identifiable net tangible assets acquired..... $117.5
Excess of purchase price over fair value of identifiable net
tangible assets........................................... $243.5
The above represents the allocation of the purchase price over the
estimated fair value of NEON's net tangible assets at December 31, 2000.
The intrinsic value of the unvested options assumed is approximately $9.4
million. This amount has been allocated to deferred stock compensation and
will be amortized to stock compensation expense over the remaining vesting
periods of the related unvested options. The actual amount of deferred
compensation will be determined by the intrinsic value of unvested NEON
options assumed as of the date the merger is consummated and may be
materially different than the amount assumed for purposes of these pro
forma financial statements.
(3) To reflect the elimination of NEON's amortization and asset impairment
charges related to historical acquisitions and purchases of technology.
(4) No adjustment to the pro forma tax provision was necessary to estimate the
tax provision for the combined group.
(5) To reflect the elimination of NEON's historical stockholders' equity
accounts.
(6) To reflect the amortization of the goodwill and other purchased intangibles
acquired in connection with the NEON acquisition. The goodwill and other
purchased intangibles are being amortized over 6 years and is subject to
change pending completion of the evaluation currently being performed by an
independent third party. To the extent that a portion of the purchase price
is allocated to in-process research and development, as is anticipated, a
charge will be recognized for the period in which the acquisition occurs.
The impact of any change could be material.
(7) To reflect the amortization of deferred compensation related to unvested
stock options acquired. The deferred stock compensation is being amortized
over the unvested stock options' remaining vesting periods assumed to be
three years.
(8) Pro forma net income (loss) per share reflects the impact of the
adjustments above. Pro forma basic net income (loss) per share is computed
using the weighted-average number of shares of common stock outstanding
after the issuance of Sybase common stock to acquire the outstanding shares
of NEON. Pro forma diluted net income (loss) per share is computed as
described above and also gives effect to any dilutive options. Stock
options are excluded from the calculation during loss periods as their
effect is antidilutive.
(9) To reflect the amortization of goodwill and other purchased intangibles
acquired in the HFN acquisition.
(10) To reflect the amortization of developed technology acquired in the HFN
acquisition.
(11) To eliminate the one time charge relating to the write off of in-process
research and development acquired in the HFN acquisition.
(12) Pro forma reclassifications have been made to conform the NEON presentation
to the Sybase presentation.
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27
THE SPECIAL MEETING
TIME, PLACE, DATE
This information statement is being furnished to the holders of outstanding
shares of NEON in connection with the special meeting to be held on June 4,
2001, at 10:00 a.m., local time, at Sybase's executive offices located at 6475
Christie Avenue, Emeryville, CA 94608, including any adjournments or
postponements thereof.
PURPOSE OF THE SPECIAL MEETING
At the special meeting, stockholders of NEON will consider and vote upon a
proposal to approve and adopt the reorganization agreement, dated as of February
20, 2001, among NEON, Sybase and Neel Acquisition Corp., pursuant to which Neel
Acquisition Corp. will be merged with and into NEON with NEON as the surviving
corporation at and after the effective time of the merger. The reorganization
agreement is incorporated by reference to Sybase's Registration Statement on
Form S-4. Stockholders will also consider such other business as may properly
come before the meeting.
RECORD DATE; QUORUM; OUTSTANDING SHARES ENTITLED TO VOTE
The record date for the special meeting has been fixed as the close of
business on Friday, May 4, 2001. Only holders of record of shares on the record
date are entitled to vote at the special meeting. Holders of shares on the
record date are entitled to one vote on matters properly presented at the
special meeting for each share held.
On the record date, there were [ ] shares outstanding. The
outstanding shares were held of record by approximately [ ]
registered holders. The presence in person of holders of a majority of the
shares entitled to vote will constitute a quorum for the transaction of business
at the special meeting. Because the shares owned by Sybase and its affiliates
will be represented at the special meeting, a quorum will be present, even if no
other stockholders are present.
VOTE REQUIRED
Pursuant to Delaware law, the reorganization agreement must be approved and
adopted by the affirmative vote of the holders of a majority of the total number
of outstanding shares. Abstentions of shares that are present at the special
meeting and broker non-votes will each have the same effect as a vote against
approval and adoption of the reorganization agreement. Pursuant to the
reorganization agreement, Sybase and its affiliates are required to vote their
shares for approval and adoption of the reorganization agreement. As of the
record date, Sybase and its affiliates beneficially own 29,642,458 shares
(approximately 79.99% of all outstanding shares). Because the approval of the
holders of a majority of all outstanding shares is sufficient to approve and
adopt the reorganization agreement, Sybase can cause the merger to occur without
the affirmative vote of any other stockholder. You are not being asked for a
proxy and you are requested not to send one. If you wish to vote your shares,
you may do so only by attending the special meeting in person.
NEON stockholders do not have appraisal rights in connection with the
merger.
SURRENDER OF CERTIFICATES AND PAYMENT PROCEDURES
As soon as practicable after the effective time, American Stock Transfer &
Trust Company, the exchange agent, will mail to each record holder of NEON
common stock a letter of transmittal and instructions for effecting the
surrender of your NEON stock certificates. Upon surrender to the exchange agent
of a certificate representing a share of NEON common stock, together with a duly
completed and validly executed letter of transmittal and such other documents as
may reasonably be required by the exchange agent, the holder of such certificate
shall be entitled to receive in exchange therefor certificates representing the
number of whole shares of Sybase common stock into which their shares of NEON
common stock were converted pursuant to the reorganization agreement, and the
certificates so surrendered shall forthwith be canceled.
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28
No dividends or other distributions declared or made after the date of the
reorganization agreement with respect to Sybase common stock with a record date
after the effective time will be paid to the holders of any unsurrendered NEON
certificates with respect to the shares of Sybase common stock represented
thereby until the holders of record of such NEON certificates shall surrender
such certificates. NEON stockholders will receive payment in cash, without
interest, in lieu of any fractional shares of Sybase common stock which would
have been otherwise issuable to them as a result of the reorganization
agreement. Until surrendered in accordance with the foregoing instructions, each
certificate representing shares of NEON common stock will represent for all
purposes only the right to receive the whole number of shares of Sybase common
stock into which such shares were converted pursuant to the reorganization
agreement and cash in lieu of any fractional shares.
You should not send your share certificates to the exchange agent now.
Share certificates should be sent to the exchange agent only pursuant to
instructions set forth in the letter of transmittal which will be mailed to you
as soon as practicable after the effective time. In all cases, the merger
consideration will be provided only in accordance with the procedures set forth
in this information statement, the reorganization agreement and the letter of
transmittal.
Each share of NEON common stock which has not been exchanged or accepted
for exchange in the offer will be converted in the merger into the same fraction
of a share of Sybase common stock being paid in the offer.
Any questions concerning the exchange procedures and requests for letters
of transmittal may be addressed to the exchange agent at 1-877-777-0800 (toll
free).
TREATMENT OF NEON STOCK OPTIONS AND ESPP
At the effective time of the merger, each outstanding option to purchase
shares of NEON common stock under NEON's option plans, whether or not vested,
shall by virtue of the merger and without any action on the part of Sybase, NEON
or any holder of a NEON stock option, be assumed by Sybase. Each NEON stock
option so assumed by Sybase under the reorganization agreement will continue to
have, and be subject to, the same terms and conditions of such NEON stock option
immediately prior to the effective time (including, without limitation, any
repurchase rights or vesting provisions and provisions regarding the
acceleration of vesting on certain transactions, other than the transactions
contemplated by the reorganization agreement, except to the extent otherwise
provided for in any plan or agreement applicable to such NEON stock options and
disclosed to Sybase by NEON), except that
- each NEON stock option will be exercisable (or will become exercisable in
accordance with its terms) for that number of whole shares of Sybase
common stock equal to the product of the number of shares of NEON common
stock that were issuable upon exercise of such NEON stock option
immediately prior to the effective time multiplied by 0.3878, rounded
down to the nearest whole number of shares of Sybase common stock; and
- the per share exercise price for the shares of Sybase common stock
issuable upon exercise of such assumed NEON stock option will be equal to
the quotient determined by dividing the exercise price per share of NEON
common stock at which such NEON stock option was exercisable immediately
prior to the effective time by 0.3878, rounded up to the nearest whole
cent. Sybase shall comply with the terms of all such NEON stock options.
Prior to the effective time, outstanding purchase rights under NEON's
employee share purchase plan, or ESPP, shall be exercised in accordance with the
terms of the ESPP. With respect to each share of NEON common stock purchased
pursuant to the ESPP, such exercise shall by virtue of the merger, and without
any action on the part of the holder thereof, be converted into the right to
receive 0.3878 of a share of Sybase common stock without issuance of
certificates representing issued and outstanding shares of NEON common stock to
ESPP participants. NEON shall terminate the ESPP effective at or prior to the
closing.
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THE MERGER
BACKGROUND OF THE OFFER AND THE MERGER
In the fourth quarter of 2000, the Corporate Development Group at Sybase,
under the direction of Marty Beard, Sybase's Vice President, Corporate
Development, researched companies offering enterprise application integration
products and identified NEON as a potential candidate for a strategic
relationship.
In December 2000, NEON engaged Credit Suisse First Boston Corporation
("CSFB") to provide financial advisory services in connection with a possible
business combination involving NEON. In December 2000 and January 2001, CSFB and
officers of NEON contacted approximately seven parties to determine their
interest in engaging in a business combination with NEON.
On December 27, 2000, Mr. Beard placed a telephone call to George F. (Rick)
Adam, Jr., NEON's Chairman and Chief Executive Officer, inviting Mr. Adam to
participate in an initial discussion regarding a possible strategic
relationship.
On January 1, 2001, Mr. Beard and Mr. Adam had an initial discussion by
telephone. During that conversation, Mr. Beard introduced the possibility of a
business combination transaction, and Mr. Adam expressed an interest in
exploring such a transaction.
On January 3, 2001, Mr. Adam met, at Sybase's offices in Emeryville,
California, with Mr. Beard, John S. Chen, Sybase's President and Chief Executive
Officer, Raj Nathan, Sybase's General Manager, Internet Applications Division,
and Billy Ho, Sybase's Vice President of Research and Development to discuss a
possible business combination. At the meeting, Mr. Adam and Mr. Chen presented
each other with strategic overviews of their respective companies and confirmed
their mutual interest in pursuing further discussions regarding a possible
business combination.
On January 12, 2001, Mr. Chen conveyed to Mr. Adam Sybase's proposed terms
for a possible business combination involving Sybase and NEON.
On January 15, 2001, NEON's board of directors authorized NEON to continue
discussions with Sybase regarding a possible business combination.
On January 16, 2001, at the direction of Mr. Adam, CSFB contacted Mr. Chen
to express NEON's desire to continue discussions regarding a potential business
combination. At this time, Mr. Chen expressed Sybase's desire to continue
discussions as well.
On January 17, 2001 NEON and Sybase entered into a mutual nondisclosure
agreement pursuant to which they agreed to exchange confidential information
regarding their respective businesses.
On January 19, 2001, Mr. Adam, Dr. Patrick Fortune, NEON's President and
Chief Operating Officer, Stephen Webb, NEON's Chief Financial Officer, and Peter
Hoversten, NEON's Chief Technology Officer, met with Pieter Van der Vorst,
Sybase's Chief Financial Officer, Mr. Beard and Mark Wilson, Sybase's Senior
Director, Corporate Development, in San Francisco, California to review
strategic, financial, product and operational information about NEON, and to
continue discussions regarding the merits of a business combination. That night,
Mr. Adam and Mr. Chen continued discussions of a possible business combination.
On January 22, 2001, Merrill Lynch & Co. ("Merrill Lynch") was engaged to
act as Sybase's financial advisor in connection with a possible transaction with
NEON.
On January 24, 2001, Merrill Lynch began its due diligence review of NEON,
which continued through the signing of the reorganization agreement.
Representatives of Merrill Lynch met with representatives of NEON management at
NEON's offices in Englewood, Colorado to review background historical
information on NEON's strategy, products and financial and operational
performance.
On January 26, 2001, Sybase transmitted a proposed term sheet and certain
ancillary documents to NEON.
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30
On January 27, 2001, Mr. Adam notified Mr. Beard that NEON was interested
in continuing discussions with Sybase regarding a possible business combination.
On January 30 and 31, 2001, several discussions took place among
representatives of Sybase, Merrill Lynch, CSFB and NEON with respect to the
proposed financial terms of the business combination transaction.
On February 1, 2001, NEON retained Cooley Godward LLP to act as its outside
legal counsel in connection with the possible business combination transaction.
Later that evening, management of the two companies agreed to continue
discussions regarding a business combination transaction and directed their
outside legal counsel to commence negotiation of a definitive reorganization
agreement.
On February 5, 2001, representatives from Sybase, Wilson Sonsini Goodrich &
Rosati, Professional Corporation, outside legal counsel to Sybase, and Ernst &
Young LLP, independent accountants to Sybase, began their due diligence review
of NEON which continued through the signing of the reorganization agreement.
Between February 5 and February 7, 2001, Mr. Adam, Dr. Fortune, Mr. Webb,
Mr. Hoversten, Fred Horn, NEON's Executive Vice President of Operations, Leonard
Goldstein, NEON's Senior Vice President, Senior Counsel and Secretary, Leslie
Lundberg, NEON's Vice President of Human Resources, Brian Duff, NEON's
Controller, and other members of NEON management met with Mr. Van der Vorst, Mr.
Beard, Mr. Nathan, Dan Carl, Sybase's General Counsel, Pamela George, Sybase's
Vice President of Marketing, Nita White-Ivy, Sybase's Vice President of Human
Resources, and other members of Sybase management, at the offices of Cooley
Godward in San Francisco, California. During these meetings, the parties
discussed the business, financial condition and organization of the two
companies. Simultaneously, Scott Powell, NEON's Group President of Engineering,
and Mr. Ho met in Denver, Colorado, to discuss both companies' product
architecture and specifications.
On February 6, 2001, the NEON board of directors held a special telephonic
meeting to discuss the potential business combination. Members of NEON's
management and representatives of CSFB explained the background and status of
the negotiations. At this meeting, representatives of Cooley Godward reviewed
the responsibilities of the board of directors in considering the proposed
business combination transaction. The NEON board of directors discussed the
strategic rationale for a proposed business combination and authorized
management to continue negotiations with Sybase. Later that evening, Wilson
Sonsini Goodrich & Rosati delivered drafts of the reorganization agreement and
related agreements to Cooley Godward.
From February 9, 2001 through February 20, 2001, negotiations on the terms
of the reorganization agreement and related agreements continued among Sybase,
NEON and their respective legal counsel and financial advisors. These
negotiations covered all aspects of the transaction, including, among other
things, the representations and warranties made by the parties, the restrictions
on the conduct of their businesses, the conditions to completion of the offer
and the merger, the provisions regarding termination, the details of the "no
shop" clause, the amount, triggers and payment of the termination fee and the
consequences of termination, and the delivery and terms of the stockholder
agreements. During this period, executive officers of NEON who were asked to
enter into employment and non-competition agreements and agreements amending
certain change of control severance agreements negotiated the terms of these
agreements with Sybase.
On February 14, 2001, the NEON board of directors held a special telephonic
meeting during which the NEON board of directors discussed the proposed business
combination with Sybase. Mr. Adam reviewed the background of NEON's discussions
with Sybase as well as the current status of negotiations and reviewed the terms
of the proposed business combination transaction. Representatives of CSFB
reviewed the financial terms of the transaction as proposed at that time. In
addition, representatives of Cooley Godward outlined the board's fiduciary
duties and other applicable legal principles in the context of business
combination transactions and reviewed the reorganization agreement and
stockholder agreements and related matters. The NEON board of directors
discussed the strategic, business and financial merits and the timing of a
possible
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transaction with Sybase and the terms of Sybase's proposal, and directed
management to continue negotiations with Sybase.
From February 12, 2001 to February 14, 2001, Mr. Chen, Mr. Van der Vorst,
Mr. Beard and representatives of Merrill Lynch had several conversations with
the individual members of the Sybase board of directors regarding the proposed
business combination with NEON, including the strategic rationale for the
transaction and the proposed financial and other transaction terms.
On February 15, 2001, the Sybase board of directors met and reviewed the
proposed transaction terms and the results of Sybase's due diligence
investigation. Representatives of Merrill Lynch and Wilson Sonsini Goodrich &
Rosati also participated. The Sybase board of directors received a presentation
from its financial advisor, Merrill Lynch, concerning the transaction.
Representatives of Wilson Sonsini Goodrich & Rosati reviewed the proposed
principal terms of the reorganization agreement and outlined the legal
principles applicable to the Sybase board of directors' consideration and
approval of the proposed transaction. The Sybase board of directors, by
unanimous vote of the directors present and voting at the meeting, authorized
Sybase to enter into a reorganization agreement with NEON in substantially the
form proposed at the meeting consistent with the Sybase board of directors'
guidance on certain open issues, including the completion of the audit of NEON's
financial statements for the year ended December 31, 2000.
On February 19, 2001, a representative of Merrill Lynch telephoned a
representative of CSFB to discuss open issues in the negotiations, including
valuation and the potential exchange ratio. In addition, on February 19, 2001,
Mr. Chen telephoned Mr. Adam to discuss open issues in the negotiations,
including valuation and the potential exchange ratio.
On February 19, 2001, the NEON board of directors held a special telephonic
meeting to review the status of negotiations and discussions with Sybase since
the board's February 14, 2001 meeting and reviewed revised drafts of the
reorganization agreement and related agreements. Representatives of CSFB and
Cooley Godward also participated. Representatives of Cooley Godward reviewed
with the NEON board of directors the main legal principles applicable to the
proposed business combination transaction (including the board's fiduciary
duties and authority in considering the transaction). Representatives of Cooley
Godward also reviewed in detail the principal terms of the proposed
reorganization agreement and related agreements and summarized the remaining
open issues and responded to questions by the NEON board of directors. The NEON
board of directors reviewed and discussed the principal terms of the proposed
transaction, including the exchange ratio, closing conditions, termination
rights, the termination fee, the stockholder agreements and NEON's ability to
consider alternative proposals. Also at this meeting, CSFB reviewed with NEON's
board of directors the financial terms of the transaction proposed at that time
and indicated that, subject to agreement on the final exchange ratio consistent
with the financial terms as proposed at that time, it was prepared to render an
opinion to the NEON board of directors that, as of such date and based upon and
subject to various considerations, the exchange ratio in the transaction was
fair, from a financial point of view, to the holders of NEON common stock. After
further deliberation, the NEON board of directors, by the unanimous vote of all
directors present and voting at the meeting:
- determined that the reorganization agreement and the transactions
contemplated thereby, including the offer and the merger, are consistent
with and in furtherance of the long-term business strategy of NEON and
are advisable and are fair to and in the best interest of NEON and its
stockholders,
- approved and adopted the reorganization agreement and the transactions
contemplated thereby, including the offer and the merger and the
stockholder agreements and the transactions contemplated thereby,
together with such changes as were discussed at the meeting,
- resolved to recommend acceptance of the offer and approval and adoption
of the reorganization agreement by NEON's stockholders, and
- authorized Mr. Adam to execute, on behalf of NEON, the reorganization
agreement and such other documents that certain of NEON's officers find
necessary or advisable in their sole discretion, together with any
changes, deletions, additions and alterations that such officers approve
consistent with the resolutions of the NEON board of directors.
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After the close of trading on the Nasdaq National Market on February 20,
2001, Sybase and NEON agreed on the final exchange ratio of 0.3878 and entered
into the reorganization agreement. Following agreement on the final exchange
ratio, CSFB rendered to the NEON board of directors its written opinion that, as
of February 20, 2001, and based upon and subject to various considerations set
forth in its opinion, the exchange ratio in the transaction was fair, from a
financial point of view, to the holders of NEON common stock, other than Sybase
and its affiliates. CSFB was not aware of any ownership of shares of NEON common
stock by Sybase or its affiliates. A copy of CSFB's opinion was included in
NEON's Solicitation/ Recommendation Statement on Schedule 14D-9, which was
mailed to NEON stockholders on March 15, 2001. Stockholders should read CSFB's
opinion carefully in its entirety.
Also on February 20, 2001, the directors and certain officers and
stockholders of NEON entered into stockholder agreements with Sybase, pursuant
to which they agreed to tender their NEON shares in the offer and vote their
NEON shares in favor of the approval and adoption of the reorganization
agreement. In addition, the directors and certain officers and stockholders of
NEON entered into affiliate agreements with Sybase, acknowledging the
restrictions imposed by the federal securities laws, in some instances, on their
ability to sell Sybase shares following the completion of the offer or the
merger, as applicable. In addition, certain officers of NEON also signed
amendments to the change of control severance agreements to which such officers
are party to, among other things, waive certain severance and other rights that
may be triggered as a direct or indirect result of the transactions contemplated
by the reorganization agreement. Messrs. Adam, Fortune, Horn and Hoversten each
entered into employment and non-competition agreements with Sybase, effective
upon consummation of the merger, under which they agreed not to engage in
certain activities or make certain investments, and not to solicit Sybase
employees, during the period of their employment by the surviving corporation
and for eighteen months following their termination of employment with the
surviving corporation.
After the parties signed the reorganization agreement, Sybase issued a
press release announcing the transaction.
On March 15, 2001 Neel Acquisition Corp. commenced the offer, which ended
on April 11, 2001.
On April 12, 2001 Sybase, through its subsidiary, accepted 24,666,134
shares of NEON stock that were tendered during the offer. In addition, the
resignations of all members of the NEON board of directors except for Messrs.
Adam and Fortune were accepted, and effective on that date, Messrs. Chen, Van
der Vorst, Carl, Beard and Nathan were appointed by Sybase to serve on the board
of directors of NEON.
On April 12, 2001, the subsequent offering period commenced and ended on
April 26, 2001. At the end of the subsequent offering period, an aggregate of
29,642,458 shares of NEON common stock had been tendered and paid for by Sybase,
through its subsidiary.
SYBASE REASONS FOR THE OFFER AND MERGER
Improve Sybase's e-Business/Enterprise Application Integration Products
- Sybase believes the combination of Sybase and NEON furthers its strategy
of improving and expanding its product offerings in the
e-business/enterprise application integration marketplace. This
marketplace is demanding the integration of new e-business applications
with existing and older legacy applications on the web to facilitate
seamless e-business. Enterprise application integration is one of the
fastest growing areas of the information technology industry and Sybase's
acquisition of NEON would provide it with processes, integration
technology, portal servers and other elements critical for its growth in
this area.
Strengthen Sybase's Market Position
- Sybase believes the combination of Sybase and NEON will strengthen its
position in the emerging e-business marketplace. Acquisition of NEON's
technology would broaden Sybase's e-business platform, enabling it to
respond to customer demand by providing products complimentary to
Sybase's application server, replication server and messaging middleware.
Sybase believes an enhanced
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e-business platform would meet the needs of customers interested in
maximizing and integrating all business interactions, from the consumer
to suppliers and the back-office.
- Sybase believes the combination of Sybase and NEON will enable it to
strengthen its market presence by broadening the total number of products
available to customers and allowing customers to develop e-business
solutions faster.
- NEON's strength in the manufacturing, distribution, retail and utilities
vertical markets should provide an opportunity for Sybase to expand its
presence into those vertical markets.
Increase Sybase's Selling Opportunities
- Sybase believes enterprises will increasingly demand e-business
implementation and integration services from one vendor. The combined
products of Sybase and NEON will allow Sybase to meet this demand and
offer its customers additional products and capabilities, as well as
reach new customers who are seeking a broad e-business/enterprise
application integration solution.
- NEON has over 3,000 worldwide customers, mostly in the Fortune Global
2000, which Sybase believes will provide opportunities for cross-selling
of other Sybase products.
Improve Organizational Capabilities
- NEON had approximately 1,000 employees as of February 23, 2001. Many of
these employees, including 260 engineers, 280 consultants, and 85 sales
representatives, Sybase believes will strengthen Sybase's development,
professional services and sales capabilities.
- Sybase believes that the combined company's capabilities will allow it to
deliver new e-business solutions to the market faster, in months instead
of years.
RECOMMENDATION AND REASONS OF NEON BOARD
Recommendation of NEON Board
On February 19, 2001, the NEON board of directors approved the offer, the
merger, the reorganization agreement and the transactions contemplated by the
reorganization agreement and recommending that all holders of NEON shares accept
the offer and tender their NEON shares pursuant to the offer. In approving these
transactions and making these recommendations, the NEON board of directors
considered a number of factors, including:
- the complementary strategies and direction of NEON, a leading supplier of
e-business integration software and services, and Sybase, a leading
global provider of software solutions that help businesses manage and
deliver information across distributed mixed computing environments,
including the Internet;
- the combination of Sybase's e-business platform products and NEON's suite
of e-business integration products, creating a complete e-business
infrastructure solution for companies building on-line businesses;
- the opportunity for NEON to access Sybase's installed base of 40,000
customers for cross-selling opportunities, and to leverage Sybase's
distribution channels to drive sales of NEON's e-business integration
products;
- Sybase offers a more significant international presence for the
distribution of NEON products;
- the exchange ratio for the offer and the merger representing a premium of
65.2% over the closing price of the NEON common stock on the Nasdaq
National Market on February 16, 2001, the last trading day prior to the
NEON board's approval of the reorganization agreement, as well as 80.2%
and 82.5% premiums over the average of the closing prices for the ten and
30 trading days, respectively, ending on February 16, 2001;
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- the presentations of CSFB regarding the financial terms of the proposed
transaction and the opinion of CSFB that, as of February 20, 2001 and
based upon and subject to the various considerations set forth in the
CSFB opinion, the exchange ratio in the transaction was fair, from a
financial point of view, to the holders of NEON common stock, other than
Sybase and its affiliates. A copy of the opinion is included in NEON's
Solicitation/Recommendation Statement on Schedule 14D-9, which is
incorporated by reference into this information statement. NEON
stockholders should read the opinion carefully in its entirety;
- the financial and other terms of the offer, the merger and the
reorganization agreement, including the benefits of the transaction being
structured as a first-step exchange offer and second-step merger, which
provided NEON's stockholders with an opportunity to receive shares of
Sybase common stock on an accelerated basis;
- the opportunity for the holders of the NEON shares to participate in a
significantly larger and more diversified company and, as stockholders of
the combined company, to have greater liquidity in their shares and to
benefit from any future growth of the combined company;
- the strengths and weaknesses of Sybase's and NEON's businesses and the
key attributes and opportunities of the combined company in terms of,
among other things, products, sales, customers, management, and financial
and competitive position;
- the nature of the e-business software industry and the belief of NEON's
board of directors that greater size and resources are increasingly
required for companies to successfully compete in this industry;
- the increasing competition that NEON faces from both existing and
potential competitors, many of which have greater assets and resources
than NEON, which has occurred as a result of, among other reasons, the
consolidation taking place in the software industry in general;
- historical information concerning Sybase's and NEON's respective
businesses, financial performance and condition, operations, technology,
management and competitive position, including public reports concerning
results of operations filed with the SEC;
- the consideration to be received by NEON stockholders in the offer and
the merger and an analysis of the market value of the Sybase common stock
to be issued in exchange for the NEON common stock in light of comparable
transactions;
- current financial market conditions and historical market prices,
volatility and trading information with respect to Sybase common stock
and the NEON common stock;
- the belief that the terms of the reorganization agreement, including the
parties' representations, warranties and covenants, and the conditions to
the parties' respective obligations, are reasonable;
- the impact of the offer and the merger on NEON's customers and employees;
and
- reports from management, legal advisors and financial advisors as to the
results of their due diligence investigation of Sybase.
NEON's board of directors also considered the terms of the reorganization
agreement regarding NEON's rights to consider and negotiate other acquisition
proposals, as well as the possible effects of the provisions regarding
termination fees. In addition, NEON's board of directors noted that the offer
and merger are expected to be a tax-free transaction. NEON's board of directors
also considered various alternatives to the offer and the merger, including
remaining as an independent company. NEON's board of directors believed that
these factors, including the NEON board's review of the terms of the
reorganization agreement, supported the board's recommendation of the offer and
the merger when viewed together with the risks and potential benefits of the
offer and the merger. NEON's board of directors also identified and considered a
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variety of potentially negative factors in its deliberations concerning the
offer and the merger, including, but not limited to:
- the risk that the potential benefits sought in the offer and the merger
might not be fully realized;
- certain risks applicable to Sybase's business (see the section of this
information statement under the heading "Risk Factors -- Risks Related to
Sybase's Business");
- the possibility that the offer and the merger might not be completed and
the effect of public announcement of the offer and the merger on NEON's
sales and operating results, and its ability to attract and retain key
technical, marketing and management personnel;
- the risk that the terms of the transaction could be dilutive to Sybase's
earnings and that such potential dilution could negatively impact the
trading price of Sybase common stock.
- the substantial charges to be incurred in connection with the offer and
the merger, including costs of integrating the businesses and transaction
expenses arising from the offer and the merger;
- the risk that despite the efforts of the combined company, key technical,
marketing and management personnel might not remain employed by the
combined company; and
- the difficulty of managing separate operations at different geographic
locations.
NEON's board of directors believed that these risks were outweighed by the
potential benefits of the offer and the merger.
The NEON board of directors did not assign relative weights to the
foregoing factors or determine that any factor was of particular importance.
Rather, the NEON board of directors viewed its position and recommendations as
being based on the totality of the information presented to and considered by
the NEON board of directors. In addition, individual members of the NEON board
of directors may have given different weights to different factors.
The foregoing discussion of the information and factors considered by the
NEON board of directors is not intended to be exhaustive but is believed to
include the material factors considered by the NEON board of directors. In view
of the wide variety of factors, both positive and negative, considered by the
NEON board of directors, the NEON board of directors did not find it practical
to, and did not, quantify or otherwise assign relative weights to the specific
factors considered.
Shortly after Sybase's wholly-owned subsidiary purchased the shares
tendered in the initial offering period of the exchange offer, all members of
the NEON board except for Messrs. Adam and Fortune resigned. Subsequently,
Messrs. Chen, Van der Vorst, Carl, Beard and Nathan were appointed as directors
of NEON.
OPINION OF NEON FINANCIAL ADVISOR
On February 20, 2001, CSFB delivered its opinion to NEON's board of
directors that, as of that date, based upon and subject to the various
considerations set forth in the CSFB opinion, the exchange ratio in the
transaction was fair, from a financial point of view, to holders of NEON common
stock, other than Sybase and its affiliates. CSFB was not aware of any ownership
of shares of NEON common stock by Sybase or its affiliates.
We incorporate by reference the full text of the CSFB opinion dated
February 20, 2001. The full text of the written opinion of CSFB, which sets
forth the assumptions made, matters considered and limitations on the review
undertaken in connection with the opinion is attached as Schedule II to NEON's
Solicitation/ Recommendation Statement on Schedule 14D-9, which was previously
mailed to NEON stockholders. We urge NEON stockholders to read the opinion in
its entirety and the discussion in NEON's Solicitation/ Recommendation Statement
regarding the opinion.
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PURPOSE AND STRUCTURE OF THE MERGER; REASONS OF SYBASE FOR THE MERGER
The purpose of the merger is for Sybase to acquire all NEON shares not
tendered and exchanged pursuant to the offer. In the merger, each then
outstanding NEON share (other than shares owned by Sybase, NEON or any of their
direct or indirect wholly owned subsidiaries) would be converted into the right
to receive the same number of Sybase shares as was paid in the offer.
Under Delaware law, the approval of the NEON board and the affirmative vote
of a majority of the votes entitled to be cast by the holders of all the
outstanding shares as of the record date are required to approve and adopt the
reorganization agreement. The NEON board has approved and adopted the
reorganization agreement and the transactions contemplated thereby, and the only
remaining required corporate action of NEON is the approval and adoption of the
reorganization agreement by the affirmative vote of a majority of the
outstanding NEON shares. Because Sybase and its affiliates own approximately
79.99% of the outstanding shares as of the record date, the approval and
adoption of the reorganization agreement is assured without the vote of any
other stockholder.
NEON stockholders who did not exchange their NEON shares in the exchange
offer do not have appraisal rights in connection with the merger.
REORGANIZATION AGREEMENT
The following is a summary of the material provisions of the reorganization
agreement which relate to the merger. This summary does not purport to be
complete and is qualified in its entirety by reference to the reorganization
agreement, which is attached to the Registration Statement on Form S-4 of Sybase
filed on March 15, 2001 which is incorporated herein by reference. Stockholders
are urged to read the reorganization agreement in its entirety and to consider
it carefully.
Recommendation
On February 19, 2001, NEON's board of directors by unanimous vote of the
directors participating in the meeting (i) determined that each of the
reorganization agreement, the offer and the merger is fair to, and in the best
interests of, the stockholders of NEON, (ii) duly approved the reorganization
agreement and the transactions contemplated thereby, including the offer and the
merger and (iii) subject to the terms and conditions of the reorganization
agreement, resolved to recommend that the stockholders of NEON accept the offer
and tender their shares thereunder to Neel Acquisition Corp. and approve and
adopt the reorganization agreement and the merger.
Appointment of NEON Directors by Sybase
Shortly after Neel Acquisition Corp. had purchased shares in the initial
offering period of the exchange offer, which comprised approximately 75.39% of
all outstanding shares, all members of the NEON board except for Messrs. Adam
and Fortune resigned. Messrs. Chen, Van der Vorst, Carl, Beard and Nathan were
appointed by Sybase to serve on the board of directors of NEON.
The Merger
The reorganization agreement provides that Neel Acquisition Corp. will be
merged with and into NEON no later than the second business day following the
satisfaction or waiver of the conditions set forth in the reorganization
agreement unless the parties agree to another date. Under the terms of the
reorganization agreement, at the effective time of the merger, each share of
NEON common stock will be converted into the right to receive from Neel
Acquisition Corp. 0.3878 of a share of Sybase common stock for each share of
NEON common stock, the same per share consideration paid to holders of NEON
common stock who exchanged their NEON shares in the offer. Notwithstanding the
foregoing, the merger consideration will not be payable in respect of NEON
shares held by NEON, Sybase or Neel Acquisition Corp. As a result of the merger,
the separate existence of Neel Acquisition Corp. will cease and NEON will
continue as the surviving corporation and a wholly-owned subsidiary of Sybase.
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Effective Time
The merger shall become effective upon the filing of a certificate of
merger with the Secretary of the State of Delaware or such later time as is
agreed by NEON and Sybase and specified in the certificate of merger. The filing
of the certificate of merger will take place as soon as practicable on or after
the closing date of the merger.
Transfer of Shares
No transfer of shares will be made on the share transfer books of NEON
after the Effective Time. If, at or after the Effective Time, certificates of
shares of NEON common stock are presented, they will be canceled and exchanged
for the right to receive 0.3878 of a share of Sybase common stock.
Covenants
The reorganization agreement contains various customary covenants of the
parties thereto. Certain of these covenants ceased to be applicable following
the date that Sybase appointed Messrs. Chen, Van der Vorst, Carl, Beard and
Nathan to serve on the board of directors of NEON. A description of certain of
these covenants which continue to be applicable follows:
Reasonable Efforts. The reorganization agreement provides that each of
Sybase and NEON will use its reasonable efforts to take all actions necessary to
close the offer and the merger.
Employee Benefits. To the extent permitted by applicable law, Sybase has
agreed to give credit under all employee benefit plans, programs, policies and
arrangements maintained by Sybase or the surviving corporation (other than
sabbatical benefits) to each employee of NEON or its subsidiaries for all
service with NEON or its subsidiaries. In addition, Sybase has agreed to provide
employees of NEON and its subsidiaries who are retained by Sybase with the
benefits substantially comparable in the aggregate to those benefits provided to
similarly situated employees at Sybase; provided that such benefits are
available on reasonable terms, Sybase is permitted to make any changes required
by law and there shall be no duplication of benefits.
Representations and Warranties. The reorganization agreement contains a
number of customary representations and warranties relating to each of the
parties and their ability to consummate the offer and the merger. All
representations and warranties of each party expire upon the filing of the
certificate of merger with the Secretary of State of the State of Delaware.
Conditions of the Merger.
The obligations of NEON, Sybase and Neel Acquisition Corp. to consummate
the merger are subject to the satisfaction of the following conditions, any of
which may be waived in writing by Sybase and NEON:
- if required by Delaware law, NEON stockholders shall approve and adopt
the reorganization agreement by the requisite vote under Delaware law and
NEON's certificate of incorporation and bylaws;
- Neel Acquisition Corp. shall accept for exchange and exchange all shares
of NEON common stock tendered pursuant to the offer;
- no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the
merger;
- the shares of Sybase common stock to be issued in the merger shall have
been approved for listing on the Nasdaq, subject to official notice of
issuance or shall be exempt from such requirement under then applicable
laws, regulations and rules of the Nasdaq Stock Market, Inc.; and
- the registration on Form S-4 relating to the merger, including any
post-effective amendment thereto, shall become effective under the
Securities Act and not be the subject of any stop order or proceeding
seeking a stop order.
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Termination of the Reorganization Agreement.
Sybase's and NEON's boards of directors can jointly agree to terminate the
reorganization agreement at any time prior to the effective time of the merger.
Any such termination will require a vote of the directors who were acting as
directors prior to the expiration of the offer. In addition, either Sybase or
NEON can terminate the reorganization agreement if there shall be any applicable
law or regulation that makes consummation of the merger illegal or otherwise
prohibited or any judgment, injunction, or order which is final and
nonappealable prohibiting the consummation of the merger.
Fees and Expenses.
The reorganization agreement provides that NEON, Sybase, and Neel
Acquisition Corp. shall each bear all expenses incurred by it in connection with
the reorganization agreement and the transactions contemplated thereby.
Indemnification
From and after the effective time of the merger, Sybase will fulfill and
honor in all respects the obligations of NEON pursuant to the provisions of each
indemnification agreement between NEON and its directors or officers in effect
prior to the effective time of the merger and the indemnification provisions of
the NEON certificate of incorporation in effect as of the date of the
reorganization agreement (or indemnification provisions at least as favorable as
the provisions of the NEON certificate of incorporation). Furthermore, Sybase
has agreed to maintain for six years after the effective time of the Merger,
subject to certain cost limitations, a policy of directors' and officers'
liability insurance covering the directors and officers of NEON.
Amendment and Waivers.
The reorganization agreement may be amended by action taken by NEON, Sybase
and Neel Acquisition Corp. at any time prior to the closing of the merger. The
reorganization agreement provides that any amendment of the reorganization
agreement, any termination of the reorganization agreement by NEON, any
extension by NEON of the time for the performance of any of the obligations or
other acts of Sybase or Neel Acquisition Corp. under the reorganization
agreement, waiver by NEON of any rights of NEON under the reorganization
agreement or any approval of any other action by NEON which is reasonably likely
to adversely affect the interests of the NEON stockholders with respect to the
transactions provided for under the reorganization agreement, will require the
concurrence of Messrs. Adam and Fortune, who constitute a majority of the NEON
directors then in office who were not designated by Sybase.
DELISTING OF NEON SHARES FOLLOWING THE MERGER
Because the shares of NEON common stock will be canceled as a result of the
merger, the shares will be delisted from the Nasdaq National Market System. The
shares are currently registered under the Exchange Act. Registration of the
shares under the Exchange Act will be terminated and NEON will be relieved of
the obligation to comply with the public reporting requirements of the Exchange
Act, including the obligation to comply with the proxy rules under the Exchange
Act.
REGULATORY APPROVALS
The notifications required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the related rules of the Federal Trade Commission
and the Antitrust Division of the Department of Justice have been filed and
Sybase and NEON received notice of early termination on March 9, 2001. In
addition, Sybase received clearance from the Federal Cartel Office of the
Republic of Germany on April 5, 2001.
Sybase believes that there are no other material regulatory or governmental
approvals required in order for the merger to be consummated.
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ACCOUNTING TREATMENT
The merger of Sybase and NEON will be accounted for as a "purchase," as
that term is used under generally accepted accounting principles, commonly
referred to as "GAAP", for accounting and financial reporting purposes. NEON
will be treated as the acquired corporation for these purposes. NEON's assets,
liabilities and other items will be adjusted to their estimated fair value on
the closing date of the merger and combined with the historical book values of
the assets and liabilities of Sybase. Applicable income tax effects of these
adjustments will be included as a component of the combined company's deferred
tax asset or liability. The difference between the estimated fair value of the
assets, liabilities and other items (adjusted as discussed above) and the
purchase price will be recorded as an intangible asset and amortized against the
combined company's earnings over six years following completion of the merger.
For further information concerning the amount of goodwill or other intangibles
to be recorded in connection with the merger and the amortization of that
goodwill, see "Notes to Unaudited Pro Forma Combined Condensed Financial
Statements" beginning on page 20.
Sybase has prepared the unaudited pro forma financial information contained
in this information statement using the purchase accounting method to account
for the offer and the merger. See "Unaudited Pro Forma Combined Condensed
Financial Statements" on page 16.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain current or former members of NEON's management and certain members
of NEON's board of directors, including persons who were directors when the deal
was approved and recommended and who resigned on the appointment date (as well
as other employees of NEON) have certain interests in the merger that are
described below that are in addition to their interests as stockholders
generally. NEON's board of directors took these interests into account in
approving and adopting the reorganization agreement and the transactions
contemplated thereby and recommending that all holders of NEON shares accept the
offer and tender their shares pursuant to the offer.
Stock options
The reorganization agreement provides that each outstanding option to
purchase shares of NEON common stock under the NEON stock option plans will be
assumed upon consummation of the merger by Sybase and shall thereafter be
exercisable for that number of shares of Sybase common stock equal to the number
of shares of NEON common stock for which it is exercisable multiplied by the
exchange ratio rounded down to the nearest whole number of shares of Sybase
common stock. In addition, the per share exercise price of each assumed option
shall be determined by dividing the original exercise price by the exchange
ratio rounded up to the nearest whole cent.
According to the terms of the NEON 1995 Stock Option Plan, 1998
Nonstatutory Stock Option Plan and 1997 Director Option Plan, 12 months of
unvested options held by employees, directors and officers of NEON shall
accelerate in the event that the employee, director or officer is terminated
without cause or as a result of constructive termination at any time within 12
months following consummation of the offer.
In addition, George F. (Rick) Adam, Jr., Frederick T. Horn, Peter
Hoversten, Leonard Goldstein and Stephen E. Webb and Dr. Patrick J. Fortune hold
unvested options that will become exercisable in full upon consummation of the
Offer.
The following table sets forth, with respect to each of the executive
officers and non-employee directors of NEON the following information as of the
day prior to the date the offer was first mailed to NEON stockholders:
- the number of shares of NEON common stock subject to options held by such
persons that will be exercisable immediately upon the consummation of the
merger (including options that are currently exercisable as well as
options which will become exercisable in connection with the transactions
contemplated by the reorganization agreement);
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40
- the range of exercise prices of the options held by such persons;
- the weighted average exercise price of the options held by such persons;
and
- the cash value (i.e., the total stock value less the exercise price) of
all options held by such persons which are in-the-money (i.e. represent a
positive spread between the respective exercise prices of the options and
the per share of NEON common stock value of the consideration to be
received in the offer and the merger), based upon an assumed per share of
NEON common stock amount of consideration to be received by NEON
stockholders in the offer and the merger of $6.54 in Sybase common stock,
based on the last sales price of Sybase common stock on March 14, 2001 of
$16.88.
OPTIONS WEIGHTED AGGREGATE
WHICH RANGE OF AVERAGE VALUE OF
WILL BE EXERCISE PRICES EXERCISE PRICE IN-THE-MONEY
NAME EXERCISABLE(1) PER SHARE PER SHARE OPTIONS
---- -------------- --------------- -------------- ------------
George F. Adam, Jr. ................ 302,905(2) $ 5.25 - 54.45 $ 10.60 $316,357.02
Melvyn Bergstein.................... 25,889(3) 13.00 - 20.62 14.08 --
Patrick J. Fortune.................. 754,683(2) 4.78 - 49.50 24.20 410,144.52
Leonard Goldstein................... 107,023(2) 4.78 - 7.00 5.88 89,365.92
Frederick T. Horn................... 423,665(2) 3.62 - 49.50 11.91 425,765.33
Peter Hoversten..................... 201,828(2) 4.50 - 7.00 5.60 219,163.44
Franz Koepper....................... 9,791 7.00 7.00 --
Stephen E. Webb..................... 235,448(2) 4.50 - 49.50 10.07 222,180.21
Joseph Kasputys..................... 43,664(3) 19.25 - 38.88 22.36 --
Steven Lazarus...................... 57,000(3) 6.28 - 38.88 12.07 9,487.33
Mark L. Gordon...................... 57,000(3) 1.12 - 38.88 9.61 149,796
Robert I. Theis..................... 129,270 3.62 - 7.00 5.52 156,264.60
- ---------------
(1) Assumes a closing date of June 8, 2001.
(2) Includes options which will become exercisable upon consummation of the
offer.
(3) Includes options which will become exercisable if these individuals are
deemed to no longer serve as directors of NEON following the consummation of
the offer.
Employment Contracts, Termination of Employment and Change of Control
Arrangements
In connection with the negotiation of the reorganization agreement, Sybase
required that the change of control severance agreements between NEON and each
of Messrs. Adam, Horn, Hoversten, Goldstein and Webb and Dr. Fortune be amended
with new terms to be effective upon the consummation of the offer. Each of the
amended change of control severance agreements provides that all NEON options
granted to such person prior to the date of the amended agreements will vest and
all restrictions on restricted stock held by such person will lapse upon
consummation of the offer. The amended agreements of Mr. Goldstein and Mr. Webb
provide for a cash payment of $750,000 to be paid to each of them upon
consummation of the offer. The amended agreements of Mr. Horn, Mr. Hoversten and
Dr. Fortune provide cash payments of $1,092,000, $390,000 and $1,560,000,
respectively, based upon their continued employment with Sybase following the
consummation of the offer. The cash payments to Mr. Horn, Mr. Hoversten and Dr.
Fortune are payable as follows: 5/13 on the 12-month anniversary of the
consummation of the offer, 3/13 on the 18-month anniversary of the consummation
of the offer, and the remaining 5/13 on the 24-month anniversary of the
consummation of the offer. If any of Mr. Horn, Mr. Hoversten or Dr. Fortune is
terminated by Sybase without cause prior to the 24-month anniversary of the
consummation of the offer, he will receive his respective cash payment (less any
amounts previously paid) in a lump sum payment. The amended agreement of Mr.
Adam does not provide for a cash payment.
This summary of the terms of the amended change of control severance
agreements is qualified in its entirety by reference to the complete text of the
amended change of control severance agreements, which have been filed as
exhibits (e)(6) through (e)(11) to NEON's Solicitation/Recommendation Statement
on
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Schedule 14D-9 and are incorporated herein by reference. Information regarding
the prior change of control severance agreements with certain executive officers
is included in Schedule I of NEON's Solicitation/Recommendation Statement on
Schedule 14D-9.
Also, Dr. Franz Koepper is a party to a Change of Control Severance
Agreement with NEON, dated January 30, 2001, which provides that if Dr. Koepper
is terminated other than "for cause" (as defined therein) within 18 months
following the consummation of the offer, Dr. Koepper will receive a lump sum
cash payment equal to 100% of his annual compensation, accelerated vesting of
all NEON options held and, for a period of one year following the date of
termination, continued employee benefits. This summary of the terms of Dr.
Koepper's Change of Control Severance Agreement is qualified in its entirety by
reference to the complete text of the Change of Control Severance Agreement,
which has been filed as exhibit (e)(12) of NEON's Solicitation/Recommendation
Statement on Schedule 14D-9 and is incorporated herein by reference. Information
regarding Dr. Koepper's employment agreement with NEON is included in Schedule I
of NEON's Solicitation/Recommendation Statement on Schedule 14D-9.
In connection with the negotiation of the reorganization agreement, Sybase
required that Messrs. Adam, Horn and Hoversten and Dr. Fortune enter into
employment and non-competition agreements in order to help retain these officers
following the merger. These agreements, which become effective only upon the
effective date of the merger, provide for initial base salaries of $400,000 for
Mr. Adam, $400,000 for Dr. Fortune, $300,000 for Mr. Horn and $250,000 for Mr.
Hoversten. The agreements provide for annual target bonuses of up to $200,000 in
the cases of Mr. Adam and Dr. Fortune, up to $120,000 in the case of Mr. Horn,
and up to $100,000 in the case of Mr. Hoversten. The agreements provide that
upon the effective date of the merger, Messrs. Adam, Horn and Hoversten and Dr.
Fortune will be granted stock options to purchase 155,000, 125,000, 125,000 and
125,000 shares of Sybase common stock, respectively, 1/8 of which will vest on
the six-month anniversary of the merger (based upon continued employment) and
1/48 of which will vest monthly thereafter through the 48th month following the
effective date of the Merger (based upon continued employment). The agreements
for Messrs. Adam, Horn and Hoversten and Dr. Fortune provide that in the event
they are terminated "without cause," they will receive (provided the officer
executes a release in favor of Sybase) a severance payment as follows: an amount
equal to 18 months of salary and bonus in the case of Mr. Adam, an amount equal
to the senior vice president severance package then applicable to such employees
in the case of Dr. Fortune and an amount equal to the vice president severance
package then applicable to such employees in the cases of Mr. Horn and Mr.
Hoversten. Each of the agreements also provides for certain restrictive
covenants on behalf of the officers in favor of Sybase, including provisions
regarding noncompetition, nonsolicitation and nondisclosure of confidential
information.
This summary of the terms of the employment and non-competition agreements
is qualified in its entirety by reference to the complete text of the employment
agreements (and the amendments thereto), which have been filed as exhibits
(e)(13) through (e)(20) of NEON's Solicitation/Recommendation Statement on
Schedule 14D-9 and are incorporated herein by reference. Information regarding
employment agreements between NEON and certain of its executive officers is
included in Schedule I of NEON's Solicitation/Recommendation Statement on
Schedule 14D-9.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes the material United States federal
income tax consequences of the offer and the merger to holders of NEON shares
who exchange their NEON shares for Sybase shares in the merger. This discussion
is based on the Internal Revenue Code of 1986, applicable Treasury regulations,
administrative interpretations and court decisions in effect as of the date of
this prospectus, all of which may change, possibly with retroactive effect. Any
such change could alter the tax consequences described in this summary.
This discussion of material federal income tax consequences of the merger
is intended to provide only a general summary, and is not a complete analysis or
description of all potential federal income tax consequences of the merger. It
does not address all aspects of federal income taxation that may be important
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42
to a holder of NEON shares in light of that holder's particular circumstances or
to a holder subject to special rules, such as:
- a foreign entity or an individual stockholder who is not a citizen or
resident of the United States;
- a financial institution or insurance company;
- a tax-exempt organization;
- a dealer or broker in securities;
- a stockholder who is subject to the alternative minimum tax provisions of
the Code;
- a stockholder whose shares are qualified small business stock for
purposes of Section 1202 of the Code;
- a stockholder who holds NEON shares as part of a hedge, appreciated
financial position, straddle, constructive sale or conversion
transaction;
- a stockholder who acquired NEON shares pursuant to the exercise of
incentive stock options or who holds NEON shares that are subject to a
substantial risk of forfeiture; or
- a stockholder who does not hold NEON shares as capital assets.
In addition, this discussion does not address any state, local or foreign
income tax or non-income tax consequences of the merger or of any transactions
other than the merger. We urge holders of NEON shares to consult their own tax
advisors to determine the particular federal income tax or other tax
consequences to them of participation in the merger.
Although there is limited authority, the merger (being completed as the
second step pursuant to the terms of the reorganization agreement wherein the
offer was the first step) will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code if, among other
things, all of the following factual assumptions (which we refer to as the
supporting conditions) are met:
- the offer and the merger are completed under the current terms of the
reorganization agreement (which it is intended to be);
- the minimum tender condition for the offer is satisfied (which it was);
and
- the merger is completed promptly after the offer (which it is intended to
be).
At the consummation of the offer, Sybase and NEON received tax opinions
from their respective counsel to the foregoing effect. Copies of those opinions
were filed as exhibits to Sybase's Registration Statement on Form S-4, which is
incorporated by reference herein. These opinions relied upon, and the
consequences summarized below under "-- Federal Income Tax Consequences If the
Offer and Merger Qualify As a Reorganization" are based upon, representations
and covenants made by Sybase and NEON, and those contained in certificates of
officers of Sybase and NEON delivered to tax counsel prior to the consummation
of the offer, and upon certain assumptions, including the absence of changes in
facts or in law between the date of the consummation of the offer and the
effective time of the merger. If any of those representations, covenants or
assumptions is inaccurate, the tax consequences of the merger could differ
materially from those summarized below under "-- Federal Income Tax Consequences
Of the Merger If the Offer and/or Merger Qualify As a Reorganization." In
addition, the ability to satisfy the supporting conditions, and therefore the
federal income tax consequences of the merger, depend in part on facts that will
not be available before the completion of the merger. There can be no assurance
that the merger will be completed, or that the supporting conditions will be
satisfied, however, NEON believes that the necessary conditions will be
satisfied. NEON stockholders should be aware that neither the IRS nor any court
has ruled on the tax treatment of a combination of transactions identical to the
offer and the merger and no ruling has been or will be requested from the IRS in
connection with the offer and the merger. Accordingly, it is possible that the
offer and/or the merger may not qualify as a reorganization, and the tax
consequences of the merger could differ materially from those summarized below
under "-- Federal Income Tax Consequences of the Merger If the Offer
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43
and/or Merger Qualify As a Reorganization." See "-- Federal Income Tax
Consequences If the Merger Does Not Qualify As a Reorganization."
Federal Income Tax Consequences of the Merger If the Offer and/or Merger
Qualify As a Reorganization. Assuming that the offer and/or the merger qualify
as a tax-free reorganization, for federal income tax purposes:
- A holder of NEON shares will not recognize any gain or loss on its
exchange in the merger of its NEON shares for Sybase shares.
- If a holder of NEON shares receives cash instead of a fraction of a
Sybase share in the merger, the holder will be required to recognize
capital gain or loss, measured by the difference between the amount of
cash received instead of that fraction of a share and the portion of the
tax basis of that holder's NEON shares allocable to that fraction of a
share. This gain or loss will be long-term capital gain or loss if the
holder has held the NEON shares exchanged for that fraction of a Sybase
share for more than one year at the time such NEON shares are accepted in
the offer or at the effective time of the merger, as the case may be. The
deductibility of capital losses is subject to limitations for both
individuals and corporations.
- A holder of NEON shares will have a tax basis in the Sybase shares
received in the merger equal to (1) the tax basis in the NEON shares
surrendered by that holder in the merger, reduced by (2) any tax basis in
such NEON shares that is allocable to a fraction of a Sybase share for
which cash is received.
- The holding period for Sybase shares received in exchange for NEON shares
in the merger will include the holding period for NEON shares surrendered
in the merger.
- Under specified circumstances, holders of NEON shares may be entitled to
appraisal rights in connection with the merger. See "-- Purpose of the
Offer; The Merger; Appraisal Rights" below. If appraisal rights are
available and a holder of NEON shares receives cash pursuant to the
exercise of appraisal rights, such holder will recognize gain or loss,
measured by the difference between the amount realized and such holder's
tax basis in such NEON shares. Holders of NEON shares who exercise
appraisal rights are urged to consult their own tax advisors.
- NEON will not recognize gain or loss as a result of the merger.
Federal Income Tax Consequences If the Merger Does Not Qualify as a
Reorganization. The tax consequences described above are based on factual
assumptions, representations and covenants, including the satisfaction of the
supporting conditions. If any of those factual assumptions, representations or
covenants are not satisfied or observed, or in the event of a contrary ruling by
the IRS or a court, the federal income tax consequences of the offer and the
merger to holders of NEON shares could differ materially from those summarized
above under "-- Federal Income Tax Consequences of the Merger If the Offer
and/or Merger Qualify As a Reorganization." In that event, the exchange by NEON
stockholders pursuant to the merger could be a taxable transaction for federal
income tax purposes depending on the particular facts surrounding the merger,
some of which may not be known before the completion of the merger.
If the merger is taxable, each NEON stockholder participating in the merger
will recognize capital gain or loss, measured by the difference between the fair
market value of the Sybase shares (together with any cash instead of a fraction
of a Sybase common share) received by such stockholder and such stockholder's
tax basis in the NEON shares surrendered. This gain or loss will be long-term
capital gain or loss if such stockholder had held such NEON shares for more than
one year at the time such NEON shares are accepted at the effective time of the
merger.
We urge each holder of NEON shares to consult his or her own tax advisor to
determine the particular United States federal, state or local or foreign income
or other tax consequences of participation in the merger.
Federal Backup Withholding. To prevent backup federal income tax
withholding with respect to cash, if any, received pursuant to the merger, you
must either provide the exchange agent with your correct taxpayer
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44
identification number and certify whether you are subject to backup withholding
of federal income tax by completing the substitute Form W-9 included in the
letter of transmittal or establish a basis for exemption from backup
withholding. Some stockholders (including, among others, all corporations and
some foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, the stockholder must submit a Form W-8BEN, W-8ECI, W-8EXP or
W-8IMY, as appropriate, signed under penalties of perjury, attesting to that
individual's exempt status. NEON stockholders that fail to provide their
taxpayer identification numbers and the appropriate certifications or that fail
to establish an exemption as described above will be subject to backup
withholding of 31% on cash amounts received in the merger and may be subject to
a $50 penalty imposed by the IRS. If withholding is made and results in an
overpayment of taxes, a refund may be obtained. Cash amounts paid pursuant to
the merger will be reported to the extent required by the Code to NEON
stockholders and the IRS.
Each NEON stockholder that receives Sybase common shares in the merger is
required to file a statement with his, her or its federal income tax return
setting forth the stockholder's basis in the NEON shares surrendered and the
fair market value of our common shares and the proceeds from the cash in lieu of
fractional shares received in the merger and is required to retain permanent
records of these facts relating to the merger.
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION
Sybase common stock and NEON common stock are listed on the Nasdaq National
Market. Sybase anticipates that the listing of its common stock will be
transferred from the Nasdaq National Market to the New York Stock Exchange on
May 22, 2001. Sybase's ticker symbol is "SYBS" and NEON's ticker symbols is
"NEON." The following table shows, for the periods indicated, the highest and
lowest last sale prices for shares of Sybase common stock and shares of NEON
common stock on the Nasdaq National Market for the quarters indicated. Neither
Sybase nor NEON have paid any cash dividends during the periods presented.
SYBASE COMMON NEON COMMON
STOCK STOCK
---------------- ----------------
MARKET PRICE MARKET PRICE
---------------- ----------------
HIGH LOW HIGH LOW
------ ------ ------ ------
1999
Second Quarter........................................ $11.00 $ 6.48 $73.38 $34.94
Third Quarter......................................... 13.19 10.00 44.06 13.00
Fourth Quarter........................................ 18.50 10.63 59.00 20.50
2000
First Quarter......................................... $29.75 $16.50 $91.63 $39.00
Second Quarter........................................ 24.94 18.25 42.50 19.81
Third Quarter......................................... 28.50 21.13 45.38 21.00
Fourth Quarter........................................ 24.31 17.56 21.44 4.47
2001
First Quarter......................................... $25.88 $15.00 $ 7.50 $ 2.59
Second Quarter (through May 3, 2001).................. 17.07 12.94 6.65 4.84
As of May 4, 2001, NEON had shares issued and outstanding
with the shares being NEON's only class of voting securities that would be
entitled to vote for directors at a stockholder meeting if one were to be held,
each share being entitled to one vote. Of these shares, 29,642,458, or %
were held by Sybase.
On February 20, 2001, the last full trading day prior to the public
announcement of the offer and the merger, the last sale price per share of NEON
common stock was $6.94 on the Nasdaq National Market. On May 3, 2001, the most
recent practicable date prior to the filing of this information statement, the
last sale price per share of NEON common stock was $6.00.
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COMPARISON OF SYBASE AND NEON STOCKHOLDER RIGHTS
The following is a summary comparison of material differences between the
rights of a Sybase stockholder under the current Sybase certificate of
incorporation and bylaws (left column) and the rights of a NEON stockholder
under the current NEON certificate of incorporation and bylaws (right column).
Copies of these documents will be sent to holders of shares of NEON common stock
upon request. A summary by its nature is not complete. We encourage you to refer
to the relevant portions of the Sybase certificate of incorporation and bylaws
incorporated in this document by reference, the NEON certificate of
incorporation and bylaws, and the relevant provisions of Delaware law.
- -----------------------------------------------------------------------------------------------------------------
GENERAL
- -----------------------------------------------------------------------------------------------------------------
SYBASE NEON
- - The rights of Sybase stockholders are governed by - The rights of NEON stockholders are governed by
Sybase's certificate of incorporation and bylaws, NEON's certificate of incorporation and bylaws, in
in addition to Delaware law. addition to Delaware law.
- - Upon completion of the merger, the Sybase - Upon completion of the merger, NEON stockholders
certificate of incorporation and bylaws will be the will become Sybase stockholders.
same in all respects as the present documents.
- -----------------------------------------------------------------------------------------------------------------
AUTHORIZED CAPITAL
- -----------------------------------------------------------------------------------------------------------------
SYBASE NEON
- - The authorized capital stock of Sybase consists of:
- The authorized capital stock of NEON consists of:
- 200,000,000 shares of Sybase common stock, with a
par value of $0.001 per share; there were -- shares - 200,000,000 shares of NEON common stock, with a par
of common stock outstanding as of May 4, 2001. value of $0.0001 per share; there were -- shares of
common stock outstanding as of May 4, 2001.
- 8,000,000 shares of preferred stock, with a par
value of $0.001 per share, none issued or - 2,000,000 shares of preferred stock, with a par
outstanding as of May 4, 2001. value of $0.0001 per share, none issued or
outstanding as of May 4, 2001.
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- -----------------------------------------------------------------------------------------------------------------
AMENDMENT OF GOVERNING DOCUMENTS
- -----------------------------------------------------------------------------------------------------------------
CHARTER
SYBASE NEON
- - Except for the matters specified in the following - Except for the matters specified in the following
section, an authorization of the Sybase board, section, an authorization of the NEON board,
followed by the vote of a majority of the followed by the vote of a majority of the
outstanding shares of Sybase common stock is outstanding shares of NEON common stock is required
required for an amendment to the Sybase certificate for an amendment to the NEON certificate of
of incorporation. incorporation.
- - An amendment to the Sybase certificate of - An amendment to the NEON certificate of
incorporation providing for the following requires incorporation which substantially alters the
the affirmative vote of the holders of a majority certificate of incorporation in a manner adversely
or more of the outstanding shares of Series A and substantially affecting the preferred stock
Participating Preferred Stock, voting separately as requires the approval of the majority of
a class: outstanding shares of NEON preferred stock.
- - amending the certificate of incorporation in a
manner materially and adversely affecting the
powers and preferences of the Series A
Participating Preferred Stock.
- - The affirmative vote of the holders of at least
2/3 of the combined voting power of all of the
then-outstanding shares of Sybase entitled to vote
is required to alter, amend or repeal stockholder
voting rights in the election of directors and the
provision of the bylaws relating to stockholder
action by written consent without a meeting unless
such amendment is approved by a majority of
directors not affiliated with any person or entity
holding 26% or more of the voting power of Sybase's
outstanding capital stock.
- -----------------------------------------------------------------------------------------------------------------
BYLAWS
SYBASE NEON
- - The Sybase bylaws may be adopted, amended or - The NEON bylaws may be adopted, amended or repealed
repealed by: by:
- the board of directors; or - the board of directors; or
- the stockholders entitled to vote. - the stockholders entitled to vote.
- The affirmative vote of at least 2/3 of the
combined voting power of all the then-
outstanding shares of Sybase entitled to vote is
required to alter, amend or repeal stockholder
voting rights and the provision of the bylaws
relating to the stockholder action by written
consent without a meeting unless such amendment
is approved by a majority of the directors not
affiliated or associated with any person or
entity holding 26% or more of the voting power of
Sybase's outstanding capital stock.
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- --------------------------------------------------------------------------------------------------------------
DIRECTORS
- --------------------------------------------------------------------------------------------------------------
NUMBER
SYBASE NEON
- - Sybase's bylaws provide that the board of directors - The NEON bylaws provide that the board of directors
shall consist of 7 directors. shall consist of 9 members. This number may be
changed by an amendment to the certificate of
incorporation or by an amendment to the bylaws
adopted by the board of directors or by the
stockholders.
- - The current number of directors is 7. - The current number of directors is 7.
- --------------------------------------------------------------------------------------------------------------
CLASSIFICATION
SYBASE NEON
- - The board of directors is divided into three - The board of directors is divided into three classes
classes, each as nearly equal in number as possible, with overlapping three-year terms. There are two
with one class being elected annually to a Class I directors, whose terms will expire at the
three-year term. There are two Class I directors, annual meeting to be held in 2003; three Class II
whose terms will expire at the annual meeting to be directors, whose term will expire at the annual
held in 2002; two Class II directors, whose terms meeting to be held in 2002; and two Class III
will expire at the annual meeting to be held in directors, whose terms will expire at the annual
2003; and three Class III directors, whose terms meeting to be held in 2001.
will expire at the annual meeting to be held in
2001.
- --------------------------------------------------------------------------------------------------------------
NOMINATION
SYBASE NEON
- - A stockholder must make any nomination for a - A stockholder must make any nomination for a
director in writing to the secretary of Sybase at director in writing to the secretary of NEON not
least 90 days prior to the annual or special less than 90 days in advance of the annual meeting
meeting; however, in the event that less than 100 or special meeting; provided, however, that in the
days notice or prior public disclosure of the date case of a meeting called by or on behalf of the
of the meeting is given or made to stockholders, board of directors of NEON where prior notice, or
notice by the stockholder to be timely must be so public disclosure, of the meeting has not been given
received not later than the close of business on the or made at least 100 days prior to such meeting,
tenth day following the day on which such notice of notice by the stockholder to be timely must be so
the meeting was mailed or such public disclosure was received not later than the close of business on the
made. tenth day following the day on which such notice of
the date of the meeting was mailed or such public
disclosure was made.
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- -----------------------------------------------------------------------------------------------------------------
REMOVAL
SYBASE NEON
- - Sybase directors may be removed with or without - Any director or the entire board or directors may
cause, by the holders of a majority of shares then be removed, with or without cause, by the holders
entitled to vote at an election of directors. of a majority of the shares then entitled to vote
However, so long as stockholders are entitled to at an election of directors.
cumulative voting, if less than the entire board is
to be removed, no director may be removed without
cause if the votes cast against his or her removal
would be sufficient to elect him or her if then
cumulatively voted at an election of the entire
board of directors.
- -----------------------------------------------------------------------------------------------------------------
STOCKHOLDERS
- -----------------------------------------------------------------------------------------------------------------
ANNUAL MEETINGS OF STOCKHOLDERS
SYBASE NEON
- - The annual meeting of stockholders must be held on - The annual meeting of stockholders shall be held on
a date and at a place within or without Delaware as a date and at a place fixed by the NEON board of
may be designated by resolution of the board of directors. In the absence of such designation, the
directors. annual meeting of stockholders shall be held on the
third Friday in June in each year at 3:00 p.m.
However, if such day falls on a legal holiday, then
the meeting shall be held at the same time and
place on the next succeeding full business day.
SPECIAL MEETINGS OF STOCKHOLDERS
SYBASE NEON
- - Special meetings of the stockholders, for any - A special meeting of stockholders may be called at
purposes, may be called at any time by the board of any time by the board of directors, the chairman of
directors, by the chairman of the board, by the the board or the chief executive officer, or by one
president or by the chief executive officer, or by or more stockholders holding shares in the
one or more stockholders holding shares in the aggregate entitled to cast not less than 20% of the
aggregate entitled to cast not less than 10% of the votes of all shares of stock owned by stockholders
votes at that meeting. entitled to vote at that meeting.
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- -----------------------------------------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
SYBASE NEON
- - A Sybase stockholder wishing to bring business - A NEON stockholder wishing to bring business before
before the annual or special stockholders' meeting the annual stockholders' meeting must provide
must provide written notice to the corporation's written notice not less than 90 days in advance of
secretary. The notice must be received not less the annual meeting; provided, however, that in the
than 90 days prior to the meeting. case of a meeting called by or on behalf of the
board of directors of NEON where prior notice, or
public disclosure, of the meeting has not been
given or made at least 100 days prior to such
meeting, notice by the stockholder to be timely
must be so received not later than the close of
business on the tenth day following the day on
which such notice of the date of the meeting was
mailed or such public disclosure was made.
STOCKHOLDER RIGHTS PLANS
SYBASE NEON
- - Sybase entered into a Preferred Shares Rights - NEON entered into a Preferred Shares Rights
Agreement dated as of March 24, 1992 between Sybase Agreement dated as of August 5, 1998 between NEON
and The First National Bank of Boston as rights and Bank Boston, N.A. as rights agent (commonly
agent (commonly referred to as a "poison pill"). referred to as a "poison pill"). NEON has amended
this agreement so that it will not apply to the
- - Rights will separate from Sybase's common stock and offer and merger.
become exercisable following the tenth day (or such
later date as may be determined by a majority of - Rights will separate from NEON's common stock and
the directors not affiliated with the acquiring become exercisable following (a) the fifteenth day
person or group) after a person or group (a) (or such later date as may be determined by a
acquires beneficial ownership of 15% or more of majority of the board of directors) after a person
Sybase's common stock or (b) announces a tender or or group acquires beneficial ownership of 15% or
exchange offer, the consummation of which would more of NEON's common stock or (b) the fifteenth
result in ownership by a person or group of 15% or day (or such later date as may be determined by a
more of Sybase's common stock. majority of the board of directors) after a person
or group announces a tender or exchange offer, the
- - There is an exception, under certain terms, for an consummation of which would result in ownership by
acquisition by Lotus Development Corporation. a person or group of 15% or more of NEON's common
stock. However, with respect to George F. (Rick)
- - After the distribution date, each Right will Adam, Jr., the applicable percentage shall be 25%
entitle the holder, other than the acquiring person in lieu of 15% and with respect to other
or group, to purchase shares of Sybase common stock stockholders of record on the record date, the
at a 50% discount to its market price as of the applicable percentage shall be 20% in lieu of 15%.
purchase date.
- After the distribution date, each Right will
entitle the holder, other than the acquiring person
or group, to purchase shares of NEON common stock
at a 50% discount to its market price as of the
purchase date.
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STATE ANTI-TAKEOVER LAWS
Under Delaware law, a Delaware corporation generally may not engage in a
"business combination" with an "interested stockholder" for a period of three
years following the date that the stockholder became an interested stockholder.
"Business combination" includes a merger, consolidation, asset sale or other
transaction resulting in a financial benefit to the interested stockholder.
"Interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years, did own 15% or more of the
corporation's voting stock. This prohibition does not apply if
- the corporation has elected not to be governed by these restrictions;
- prior to the time that the stockholder became an interested stockholder,
the board of directors of the corporation approved either the business
combination or the transaction resulting in the stockholder's becoming an
interested stockholder;
- upon consummation of the transaction resulting in the stockholder's
becoming an interested stockholder, the stockholder owns at least 85% of
the outstanding voting stock of the corporation, excluding voting stock
owned by directors who are also officers and certain employee stock
plans; or
- at or subsequent to the time that the stockholder became an interested
stockholder, the business combination is approved by the board and
authorized at an annual or special meeting of stockholders, and not by
written consent, by the affirmative vote of at least two-thirds of the
outstanding voting stock that the interested stockholder does not own.
Neither Sybase nor NEON has elected not to be governed by these
restrictions. The NEON board of directors has taken the necessary action to make
the above restrictions on business combinations inapplicable to the offer and
the merger.
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BENEFICIAL SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of shares of NEON common stock as of April 30, 2001 for (1)
each person or entity who is known by NEON to own beneficially more than 5% of
the outstanding shares; (2) each of NEON's directors; (3) each of NEON's
executive officers; and (4) all directors and executive officers of NEON as a
group.
SHARES PERCENTAGE
BENEFICIALLY BENEFICIALLY
5% STOCKHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS(1) OWNED(2) OWNED(2)
---------------------------------------------------- ------------ ------------
Sybase, Inc. ............................................... 29,642,458 79.99%
6475 Christie Avenue
Emeryville, CA 94608
John C. Chen(3)............................................. 29,642,458 79.99
Pieter Van der Vorst(3)..................................... 29,642,458 79.99
Daniel R. Carl(3)........................................... 29,642,458 79.99
Marty Beard(3).............................................. 29,642,458 79.99
Raj Nathan(3)............................................... 29,642,458 79.99
George F. (Rick) Adam, Jr.(4)............................... 302,905 *
Patrick J. Fortune(5)....................................... 754,683 2.00
Frederick T. Horn(6)........................................ 423,665 1.13
Peter Hoversten(7).......................................... 201,828 *
Franz Koepper(8)............................................ 10,312 *
All directors and executive officers as a group (10
persons)(9)............................................... 31,335,851 80.86
- ---------------
* Less than 1%.
(1) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) or 13(g) of the Exchange Act. Unless otherwise indicated, the
address of each of the individuals or entities named above is: c/o New Era
of Networks, Inc., 6550 Greenwood Plaza Boulevard, Englewood, Colorado
80111.
(2) The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Exchange Act, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under
such rule, beneficial ownership includes any shares as to which the
individual or entity has voting power or investment power and also any
shares which the individual or entity has the right to acquire within 60
days of April 30, 2001 through the exercise of any stock option or other
right. Unless otherwise indicated in the footnotes, each person has sole
voting and investment power (or shares such powers with his or her spouse)
with respect to the shares shown as beneficially owned.
(3) Represents shares owned by Sybase, Inc., over which the named individual may
be deemed to have beneficial ownership by virtue of such individual's
executive position at Sybase. The named individual disclaims beneficial
ownership of such shares except to the extent of his pecuniary interest.
(4) Includes 302,905 shares issuable upon exercise of stock options that are
exercisable within 60 days of April 30, 2001.
(5) Includes 754,683 shares issuable upon exercise of stock options that are
exercisable within 60 days of April 30, 2001.
(6) Includes 423,665 shares issuable upon exercise of stock options that are
exercisable within 60 days of April 30, 2001.
(7) Includes 201,828 shares issuable upon exercise of stock options that are
exercisable within 60 days of April 30, 2001.
(8) Includes 10,312 shares issuable upon exercise of stock options that are
exercisable within 60 days of April 30, 2001.
(9) Includes 1,693,393 shares issuable upon exercise of stock options that are
exercisable within 60 days of April 30, 2001.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16(a)") requires NEON's
officers and directors, and persons who own more than ten percent of a
registered class of NEON's equity securities, to file reports of ownership on
Form 3 and changes in ownership on Form 4 or Form 5 with the SEC and the NASD.
Such officers, directors and ten-percent stockholders are also required by SEC
rules to furnish NEON with copies of all such forms that they file.
Based solely on a review of the copies of such forms received by NEON, or
written representations from certain reporting persons that no Forms 5 were
required for such persons, NEON believes that during 2000 all Section 16(a)
filing requirements applicable to its officers, directors and ten-percent
stockholders were complied with.
LEGAL MATTERS
Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel to
Sybase, will pass on the validity of the shares of Sybase common stock to be
issued to NEON stockholders in the merger.
EXPERTS
Ernst & Young LLP, independent auditors, have audited Sybase's consolidated
financial statements and schedule included in Sybase's Annual Report on Form
10-K for the year ended December 31, 2000, as set forth in their report, which
is incorporated by reference in this information statement. Sybase's financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
The consolidated financial statements of New Era of Networks, Inc. included
in its Annual Report on Form 10-K for the year ended December 31, 2000,
incorporated by reference in this information statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said report.
OTHER MATTERS
We do not intend to hold a 2001 annual meeting prior to the scheduled
consummation of the merger. If the merger is not consummated and we do hold a
2001 annual meeting, we will notify you of such meeting, including the date by
which stockholder proposals must be received at NEON's executive offices in
order to be considered for inclusion in the proxy materials relating to such
meeting.
We do not intend to bring any other matters before the special meeting, and
are not aware of any other matters that are expected to be brought properly
before the special meeting.
WHERE YOU CAN FIND MORE INFORMATION
Sybase and NEON file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934. You may read and copy this
information at the following locations of the SEC:
Public Reference Room North East Regional Office Midwest Regional Office
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Suite 1024 Room 1300 Suite 1400
Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois
60661-2511
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. The SEC also maintains an
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Internet worldwide website that contains reports, proxy statements and other
information about issuers, like Sybase and NEON, who file electronically with
the SEC. The address of that site is http://www.sec.gov.
The SEC allows NEON to "incorporate by reference" information into this
Information Statement, which means that NEON can disclose important information
to you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this Information
Statement, except for any information superseded by information contained
directly in this Information Statement. This information statement incorporates
by reference the documents set forth below that we have previously filed with
the SEC. These documents contain important information about NEON, Sybase and
its financial condition.
The following documents listed below that Sybase or NEON have previously
filed with the SEC are incorporated by reference:
PERIOD
------
Sybase's Registration Statement on Form
S-4........................................ Filed on March 15, 2001, as amended
Sybase's Tender Offer Statement on Schedule
TO......................................... Filed on March 15, 2001, as amended
Sybase's Annual Report on Form 10-K.......... Year ended December 31, 2000, as amended
Sybase's Quarterly Reports on Form 10-Q...... Quarters ended March 31, 2000, June 30, 2000
and September 30, 2000
The description of Sybase common stock set
forth in Sybase's registration statement on
Form 8-A, (File No. 0-19395) including any
amendment or report filed for purposes of
updating the description................... Declared effective on August 13, 1991
The description of Sybase's Preferred Share
Purchase Plan and Series A Participating
Preferred Stock set forth in Sybase's
registration statement on Form 8-A/A,
including any amendment or report filed for
purposes of updating the description....... Filed on November 14, 1996
Sybase's Current Reports on Form 8-K......... Filed on: February 3, 2000 (as amended by
Form 8-K/A filed on April 3, 2000,
June 19, 2000 and June 29, 2000)
April 27, 2000
April 4, 2001
April 13, 2001
NEON's Solicitation/Recommendation Statement
on Schedule 14D-9.......................... Filed on March 15, 2001
NEON's Annual Report on Form 10-K............ Year ended December 31, 2000
NEON's Quarterly Report on Form 10-Q......... Quarter ended September 30, 2000
The description of NEON's common stock, set
forth in NEON's registration statement on
Form 8-A, including any amendment or report
filed for purposes of updating the
description................................ Filed on August 14, 1998
NEON's Current Report on Form 8-K............ Filed on April 27, 2001 (as amended by Form
8-K/A filed on May 2, 2001) February 28, 2001
DOCUMENTS INCORPORATED BY REFERENCE ARE AVAILABLE FROM US WITHOUT CHARGE
UPON REQUEST TO OUR INFORMATION AGENT, CORPORATE INVESTOR COMMUNICATIONS, INC.,
111 COMMERCE ROAD, CARLSTADT, NEW JERSEY 07072, COLLECT AT 1-201-896-1900 OR
TOLL-FREE AT 1-866-241-2788. IN ORDER TO ENSURE TIMELY DELIVERY, ANY REQUEST
SHOULD BE SUBMITTED NO LATER THAN MAY 28, 2001. IF YOU REQUEST ANY INCORPORATED
DOCUMENTS FROM US, WE WILL MAIL THEM TO YOU BY FIRST CLASS MAIL, OR ANOTHER
EQUALLY PROMPT MEANS, WITHIN ONE BUSINESS DAY AFTER WE RECEIVE YOUR REQUEST.
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We have not authorized anyone to give any information or make any
representation about the offer and/or merger that is different from, or in
addition to, that contained in this Information Statement or in any of the
materials that we have incorporated by reference into this Information
Statement. Therefore, if anyone does give you information of this sort, you
should not rely on it. If you are in a jurisdiction where offers to exchange or
sell, or solicitations of offers to exchange or purchase, the securities offered
by this document are unlawful, or if you are a person to whom it is unlawful to
direct these types of activities, then the offer presented in this document does
not extend to you. The information contained in this document speaks only as of
the date of this document unless the information specifically indicates that
another date applies.
All documents that either Sybase or NEON file pursuant to Section 12(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 from the date of this
Information Statement and prior to the date of the special meeting shall be
deemed to be incorporated by reference into this Information Statement and to be
a part hereof from the dates of filing such documents or reports. Any statement
contained herein or in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Information Statement
to the extent that a statement contained herein modifies or supercedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Information
Statement.
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