SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|X| Soliciting Material Pursuant to Rule 14a-12
INTERCEPT, INC.
(Name Of Registrant As Specified In Its Charter)
JANA PARTNERS LLC
(Name Of Person(s) Filing Proxy Statement, If Other Than The Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
FOR IMMEDIATE RELEASE
For information contact MacKenzie Partners, Inc.:
Lawrence E. Dennedy or Robert C. Marese - (800) 322-2885
JANA PARTNERS LLC REJECTS INTERCEPT'S PROXY SETTLEMENT OFFER, SAYING IT ONLY
FURTHER ENTRENCHES THE CURRENT BOARD
JANA Also Blasts InterCept's New Preferred Stock Deal
Atlanta, Georgia - May 26th, 2004 - JANA Partners LLC ("JANA") today delivered
its rejection of the proposed proxy contest settlement offer from InterCept,
Inc. (NASDAQ - ICPT) ("InterCept"), saying the offer did nothing to improve
shareholder democracy at InterCept and was merely a trap to extend the date on
which JANA could take control of the Board of Directors from June 2005 to June
2006.
"Your offer is nothing more than a slickly designed trap to deny your
shareholders their right next year to replace your hand-picked cronies on the
Board of Directors with a majority of directors who will be solely dedicated to
doing what is best for shareholders," JANA Managing Member Barry S. Rosenstein
wrote. "Our goal is real change at InterCept and if that means coming back at
next year's annual meeting to elect a majority of directors who will fight for
shareholders, that's what we intend to do." Mr. Rosenstein added that, "Your
sham offer also completely ignores the calls we have made to give shareholders a
greater voice at InterCept."
InterCept offered on May 20, 2004 to expand the Board to 9 seats and nominate
and support two individuals appointed by JANA for election to the Board at the
2004 Annual Meeting (and leave the third new seat open for an individual from an
investor group called the Sprout Group) if JANA would end its proxy
solicitation. However, because InterCept structured its offer so that one of
JANA's appointees would be forced to stand as a Class I Director, all of whom
are up for election at the 2005 Annual Meeting, JANA would be blocked from
electing a majority of directors until the 2006 Annual Meeting.
A COPY OF THE LETTER SENT BY JANA TO INTERCEPT TODAY IS ATTACHED HERETO.
JANA has nominated two individuals, Marc Weisman and Kevin J. Lynch, for
election to InterCept's Board of Directors at the 2004 Annual Meeting. In
addition, JANA is proposing amendments to InterCept's bylaws which will let
shareholders remove directors for poor performance, prevent the board from
hand-picking directors and lower the requirement for shareholders to call
special meetings to address issues of importance to them.
Additionally, Mr. Rosenstein commented in his letter on InterCept's announcement
that it had reached agreement with an investor group called the Sprout Group to
exchange the Series A Preferred Stock held by Sprout for new Series B Preferred
Stock, saying that the exchange did nothing meaningful to alleviate the
extraordinary rights given to Sprout, but was merely a cosmetic change at the
expense of shareholders.
"The original sale of the Series A to Sprout at extraordinary, non-market terms,
giving Sprout far greater power than all of InterCept's shareholders combined
for the purchase of preferred stock convertible into only 3.5% of the Company's
shares, was already a disgrace," Mr. Rosenstein wrote. "Now you and the Board
have taken the extraordinary step of sweetening Sprout's economic deal by
lowering the conversion price to give Sprout an additional 230,000 shares upon
conversion, which if the preferred were converted today would result in a
write-off to earnings of over $4 million due to the dilution of the equity, in
exchange for an essentially cosmetic alteration of Sprout's rights. The Sprout
Group would still have the right to block bylaw amendments supported by a
majority of the shareholders, and yet you are asking shareholders, including
ourselves, to pay for the privilege of making your disgraceful entrenchment deal
look marginally better."
CERTAIN INFORMATION CONCERNING PARTICIPANTS
JANA Partners LLC manages securities portfolios with assets of approximately
$1.4 billion and currently owns 1,914,737 shares (approximately 9.4%) of the
common stock of InterCept.
The following individuals have consented to being nominated by JANA Partners LLC
for election as directors of InterCept at InterCept's 2004 Annual Meeting of
Shareholders.
o Marc Weisman, 51, has been a Principal of Sagaponack Partners, L.P.
for more than the past five years.
o Kevin J. Lynch, 35, has been a Principal of JANA Partners LLC since
2001. From 1999 to 2001, Mr. Lynch was an Investment Analyst at
Sagaponack Partners, L.P.
The Managing Directors of JANA Partners are Barry S. Rosenstein and Gary Claar.
Barry S. Rosenstein, 45, has been a Managing Member of JANA Partners LLC since
2001. From 1993 to 2001, Mr. Rosenstein was a Principal of Sagaponack Partners,
L.P., a private equity fund. Gary Claar, 37, has been a Managing Member of JANA
Partners LLC since 2001. From 1999 to 2001, Mr. Claar was a Principal of
Marathon Advisors LLC, an investment fund.
The principal business address of Mr. Rosenstein and Mr. Lynch is 201 Post
Street, Suite 1000, San Francisco, California 94108. The principal business
address of Mr. Weisman is 645 Fifth Avenue, New York, New York 10022. The
principal business address of Mr. Claar is 200 Park Avenue, New York, New York
10166.
Mr. Weisman and Mr. Lynch have each agreed, if elected, to serve as a director
of InterCept. JANA Partners does not expect that any of its nominees will be
unable to stand for election or serve as a director, but if any vacancy in JANA
Partners' slate occurs for any reason (including if InterCept makes or announces
any changes to its bylaws or takes or announces any other action that has, or if
completed would have, the effect of disqualifying any or all of JANA Partners'
nominees), JANA Partners will vote for the substitute candidate(s) nominated by
JANA Partners in compliance with the rules of the SEC and any other applicable
law and, if applicable, InterCept's bylaws.
JANA Partners LLC has filed a preliminary proxy statement and other relevant
documents with the SEC in support of the election of Messrs. Lynch and Weisman
to the InterCept board. INVESTORS ARE URGED TO READ THE PRELIMINARY PROXY
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. You will be able to obtain the documents free of
charge at the SEC's website, www.sec.gov. JANA Partners LLC and Messrs. Lynch
and Weisman may be deemed to be participants in the solicitation of proxies from
the shareholders of InterCept in connection with the annual meeting. Information
about these participants is set forth in the preliminary proxy statement filed
by JANA Partners LLC with the SEC. Investors may obtain additional information
by reading the proxy statement and definitive proxy statement when it becomes
available.
JANA MASTER FUND, LTD.
200 PARK AVENUE
SUITE 3900
NEW YORK, NEW YORK 10166
May 26, 2004
John W. Collins
Chairman/Chief Executive Officer
InterCept, Inc.
3150 Holcomb Bridge Road
Suite 200
Norcross, GA 30071
Dear Mr. Collins,
We have considered your "offer" and emphatically reject it. Consistent
with management's prior conduct, this offer is a sham designed to further
entrench management and frustrate the rights of your shareholders.
Your offer is nothing more than a slickly designed trap to deny your
shareholders their right next year to replace your hand-picked cronies on the
Board of Directors with a majority of directors who will be solely dedicated to
doing what is best for shareholders. By making one of our appointees a "Class I"
director, all of whom are up for election at the 2005 Annual Meeting, you would
be ensuring that even if we won every seat at the 2005 Annual Meeting we would
still be unable to elect a majority of directors. We are not going to willingly
subject ourselves and the rest of InterCept's shareholders to two more years of
the current board majority. Our goal is real change at InterCept and if that
means coming back at next year's annual meeting to elect a majority of directors
who will fight for shareholders, that's what we intend to do.
Your sham offer also completely ignores the calls we have made to give
shareholders a greater voice at InterCept. We want shareholders to be able to
remove directors for poor performance and to prevent the board of directors from
hand-picking replacements as it did earlier this year.
We also find your statement that your offer "maintains a board of
directors that represents the interests of all InterCept shareholders"
ridiculous. Even more ridiculous is your description of the current board. We
can think of many ways to describe a board which presides over a staggering
decline in shareholder value, terrible acquisitions and unabashed management
entrenchment, but "very independent" and "shareholder-oriented" is not among
them. The very point of this proxy contest is that we believe that the current
InterCept Board, including management's hand-picked directors, does NOT
represent the interests of all shareholders.
We are equally astonished by InterCept's recent announcement of the
planned exchange with the Sprout Group of Series A Preferred Stock with its
outrageous terms for new Series B Preferred Stock with equally outrageous terms.
The original sale of the Series A to Sprout at extraordinary, non-market terms,
giving Sprout far greater power than all of InterCept's shareholders combined
for the purchase of preferred stock convertible into only 3.5% of the Company's
shares, was already a disgrace. Now you and the Board have taken the
extraordinary step of sweetening Sprout's economic deal by lowering the
conversion price to give Sprout an additional 230,000 shares upon conversion,
which if the preferred were converted today would result in a write-off to
earnings of over $4 million due to the dilution of the equity, in exchange for
an essentially cosmetic alteration of Sprout's rights. The Sprout Group would
still have the right to block bylaw amendments supported by a majority of the
shareholders, and yet you are asking shareholders, including ourselves, to pay
for the privilege of making your disgraceful entrenchment deal look marginally
better. We also note that the Series B would grant the same right to a Board
seat to one individual at Sprout rather than an employee designated by Sprout,
which we find extraordinary. We think it is unconscionable that you and the
Board would take this extraordinary step less than a month before an Annual
Meeting which may result in a change of the composition of the Board, and we
would strongly advise that you not finalize this deal until after the Annual
Meeting to allow for the possibility that our nominees if elected could persuade
the full Board not to take this ill-advised step.
Finally, you state in your letter that we own 8.9% percent of
InterCept. You should be aware that as of today our ownership of InterCept
stands at 9.4%.
The time for talk has long passed. Should you wish to propose a serious
offer that does not further entrench the current management and actually
improves shareholder democracy, you know where to reach me.
Sincerely,
JANA Partners LLC
/s/ Barry S. Rosenstein
Barry S. Rosenstein
Managing Member
CC: THE OTHER MEMBERS OF THE BOARD OF DIRECTORS OF INTERCEPT
--------------------------------------------------------
Dr. James A. Verbrugge
Mark Hawn
John D. Schneider, Jr.
Glenn W. Sturm
Arthur G. Weiss