1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
(Rule 13e-4)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
NETEGRITY, INC.
(Name of Subject Company (Issuer) and Filing Person (Offeror))
Options Granted after December 1, 1999 to Purchase Common Stock,
Par Value $0.01 Per Share
(Title of Class of Securities)
64110P107
(CUSIP Number of Class of Securities)
(Underlying Common Stock)
James E. Hayden
Chief Financial Officer, Vice President of Finance and
Administration and Treasurer
Netegrity, Inc.
52 Second Avenue
Waltham, MA 02451
(781) 890-1700
(Name, address and telephone number of person authorized to receive notices
and communications on behalf of filing person)
Copy to:
Anthony J. Medaglia, Jr., Esq.
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, MA 02110
(617) 951-6600
CALCULATION OF FILING FEE
Transaction Valuation* Amount of Filing Fee
--------------------- --------------------
$49,260,772 $9,853
* Calculated solely for purposes of determining the filing fee. This amount
assumes that options to purchase 2,824,163 shares of common stock of Netegrity,
Inc. having an aggregate value of $49,260,772 as of August 8, 2001 will be
exchanged and/or cancelled pursuant to this offer. The aggregate value of such
options was calculated based on the Black-Scholes option pricing model. The
amount of the filing fee, calculated in accordance with Rule 0-11(b) of the
Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the
value of the transaction.
[_] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid: Not applicable. Form or Registration No.: Not
applicable. Filing party: Not applicable. Date filed: Not applicable.
[_] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[_] third party tender offer subject to Rule 14d-1.
[X] issuer tender offer subject to Rule 13e-4.
[_] going-private transaction subject to Rule 13e-3.
[_] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer. [_]
2
Item 1. Summary Term Sheet.
The information set forth under "Summary Term Sheet" in the Offer to Exchange,
dated August 9, 2001 (the "Offer to Exchange"), attached hereto as Exhibit
(a)(1) is incorporated herein by reference.
Item 2. Subject Company Information.
(a) The name of the issuer is Netegrity, Inc., a Delaware corporation
(the "Company"), and the address of its principal executive offices is
52 Second Avenue, Waltham, Massachusetts 02451. Its telephone number
is (781) 890-1700. The information set forth in the Offer to Exchange
under Section 9 ("Information Concerning Netegrity") is incorporated
herein by reference.
(b) This Tender Offer Statement on Schedule TO relates to an offer by
the Company to exchange all eligible options granted after December 1,
1999 under the Netegrity, Inc. 1997 Stock Option Plan and the
Netegrity, Inc. 2000 Stock Incentive Plan (collectively the "Option
Plans") to purchase 2,824,163 shares of the Company's Common Stock,
par value $0.01 per share ("Option Shares")(the "Options") granted to
eligible employees for new options that will be granted under the 2000
Stock Incentive Plan (the "New Options"), upon the terms and subject
to the conditions described in the Offer to Exchange, and the related
cover letter and attached Summary of Terms (the "Cover Letter" and,
together with the Offer to Exchange, as they may be amended from time
to time, the "Offer"). This offer does not include the class of
options held by option holders who are not employees of Netegrity or
one of its subsidiaries on August 9, 2001 and the date the Offer
expires. If you are not an employee of Netegrity or one of its
subsidiaries on both of those dates, you will not be eligible to
accept the Offer. If you are a director or executive officer of
Netegrity, you will also not be eligible to accept the Offer. The
information set forth in the Offer to Exchange is incorporated herein
by reference. The information set forth in the Offer to Exchange under
"Summary Term Sheet," "Questions and Answers," Section 1 ("Number of
Options; Expiration Date"), Section 5 ("Acceptance of Options for
Exchange and Issuance of New Options") and Section 8 ("Source and
Amount of Consideration; Terms of New Options") is incorporated herein
by reference.
(c) The information set forth in the Offer to Exchange under Section
7 ("Price Range of Shares Underlying the Options") is incorporated
herein by reference.
Item 3. Identity and Background of Filing Person.
(a) The name of the issuer is Netegrity, Inc., a Delaware
corporation, and the address of its principal executive offices is 52
Second Avenue, Waltham, Massachusetts 02451. Its telephone number is
(781) 890-1700.
Item 4. Terms of the Transaction.
(a) The information set forth in the Offer to Exchange under "Summary
Term Sheet," "Questions and Answers," Section 1 ("Number of Options;
Expiration Date"), Section 2 ("Purpose of this Offer"), Section 3
("Procedures for Tendering Options"), Section 4 ("Withdrawal Rights
and Change of Election"), Section 5 ("Acceptance of Options for
Exchange and Issuance of New Options"), Section 6 ("Conditions of This
Offer"), Section 8 ("Source and Amount of Consideration; Terms of New
Options"), Section 11 ("Status of Options Acquired by Us in this
Offer; Accounting Consequences of this Offer"), Section 12 ("Legal
Matters; Regulatory Approvals"), Section 13 ("Material U.S. Federal
Income Tax Consequences") and Section 14 ("Extension of Offer;
Termination; Amendment") is incorporated herein by reference.
(b) Executive officers and directors will not be eligible to
participate in this exchange program. The information set forth in the
Offer to Exchange under Section 10 ("Interests of Directors and
Officers; Transactions and Arrangements Concerning the Options and Our
Common Shares") is incorporated herein by reference.
3
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
The information set forth in the Offer to Exchange under Section 10
("Interests of Directors and Officers; Transactions and Arrangements
Concerning the Options and Our Common Shares") is incorporated herein
by reference.
Item 6. Purposes of the Transaction and Plans or Proposals.
(a) The primary purpose of the Offer to Exchange is to provide
employees of Netegrity who hold options that are "out-of-the-money"
with an opportunity to exchange those options for new stock options to
be granted with an exercise price equal to the fair market value of
the Company's common stock on or about March 11, 2002 as determined in
accordance with the 2000 Stock Incentive Plan, so long as the employee
is still employed by Netegrity on the date the new grant is made. The
information set forth in the Offer to Exchange under Section 2
("Purpose of the Offer") is incorporated herein by reference.
(b) The stock options that are tendered by eligible employees and
accepted by the Company will be returned to the appropriate plan. The
information set forth in the Offer to Exchange under Section 5
("Acceptance of Options for Exchange and Issuance of New Options") and
Section 11 ("Status of Options Acquired by Us in this Offer;
Accounting Consequences of this Offer") is incorporated herein by
reference.
(c) None, except as follows: (i) the Offer will result in the
exchange of stock options on a one-for-one basis by the Netegrity
employees who participate in the program; (ii) no individual will
acquire additional shares of Netegrity stock in the exchange; and
(iii) employees who participate in the exchange and are not employed
by Netegrity on the grant date of the new options will lose the
ability to exercise their stock options that have been cancelled.
Item 7. Source and Amount of Funds or Other Consideration.
(a) The information set forth in the Offer to Exchange under Section
8 ("Source and Amount of Consideration; Terms of New Options") and
Section 15 ("Fees and Expenses") is incorporated herein by reference.
(b) The information set forth in Section 6 ("Conditions of this
Offer") is incorporated herein by reference.
(d) Not applicable.
Item 8. Interest in Securities of the Subject Company.
(a) The information set forth in the first paragraph of Section 10 of
the Offer to Exchange is incorporated herein by reference.
(b) The information set forth in the Offer to Exchange under Section
10 ("Interests of Directors and Officers; Transactions and
Arrangements Concerning the Options") is incorporated herein by
reference.
Item 9. Persons/Assets, Retained, Employed, Compensated or Used.
(a) Not applicable.
Item 10. Financial Statements.
(a) (1) The information appearing under the captions "Consolidated
Balance Sheets," "Consolidated Statements of Operations,"
"Consolidated Statements of Stockholders' Equity (Deficit),"
"Consolidated Statements of Cash Flows," "Notes to
Consolidated Financial Statements," and "Report of
PricewaterhouseCoopers LLP" in Netegrity's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000 is
incorporated herein by reference.
4
(2) The information appearing under the caption "Item 1.
Financial Statements" in Netegrity's Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30, 2001 is
incorporated herein by reference.
Copies of the Annual Report on Form 10-K for the year ended
December 31, 2000 and the Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 2001 are being distributed to all
potential participants of this Offer.
(3) Not applicable.
(4) For information regarding book value per share, see the
section titled "Selected Financial Data" under Item 9 of the
Offer to Exchange.
(b) Not applicable.
Item 11. Additional Information.
(a) The information set forth in the Offer to Exchange under Section
10 ("Interests of Directors and Officers; Transactions and
Arrangements Concerning the Options and Our Common Shares") is
incorporated herein by reference.
(b) Not applicable.
Item 12. Exhibits.
(a) (1) Offer to Exchange all Outstanding Options Which Were Granted
After December 1, 1999 for New Options.
(2) Form of Election.
(3) Cover Letter from Barry Bycoff to Netegrity Employees dated
August 9, 2001.
(4) Form of Notice to Change Election from Accept to Reject.
(5) Netegrity, Inc. Annual Report on Form 10-K for its fiscal
year ended December 31, 2000, filed with the Securities and
Exchange Commission on February 28, 2001, and incorporated
herein by reference.
(6) Netegrity, Inc. Quarterly Report on Form 10-Q for its fiscal
quarter ended June 30, 2001, filed with the Securities and
Exchange Commission and incorporated herein by reference.
(7) Power Point Presentation to Employees.
(8) Employee Value Program Frequently Asked Questions.
(b) Not applicable.
(d) (1) 1997 Stock Option Plan.
(2) 2000 Stock Incentive Plan.
(g) Not applicable.
(h) Not applicable.
5
Item 13. Information Required by Schedule 13E-3.
(a) Not applicable.
6
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this Schedule TO is true, complete and correct.
NETEGRITY, INC.
/s/ James E. Hayden
------------------------------------------
James E. Hayden
Chief Financial Officer, Vice President of
Finance and Administration and Treasurer
Date: August 9, 2001