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:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-12
INTERCEPT, INC.
(Name Of Registrant As Specified In Its Charter)
JANA PARTNERS LLC
JANA MASTER FUND, LTD.
(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:
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JANA PARTNERS LLC
201 Post Street
San Francisco, CA 94108
May 28, 2004
Dear InterCept, Inc. Shareholder:
We are a shareholder of InterCept just like you, and like the
shareholder of any public company, no matter how big or small the investment, we
believe in three things:
- GETTING A FAIR RETURN ON YOUR INVESTMENT -
- GOOD CORPORATE GOVERNANCE -
- SHAREHOLDER DEMOCRACY -
ON THE BASIS OF THESE CORE PRINCIPLES, WE BELIEVE IT IS TIME FOR A CHANGE AT
INTERCEPT.
But we cannot do it without your support. We know you receive many
communications this time of year, but we believe you will receive few if any
more important than this. We are proposing FUNDAMENTAL CHANGES both in the board
membership and the governance of InterCept, changes which we believe will mark a
turning point in the direction of the company, AND EVERY SINGLE VOTE IS
ABSOLUTELY CRITICAL.
You will hear many things from the current management regarding our
nominees and proposals. We encourage you to give full and fair consideration to
both sides. But at the end of the day, we also ask you to consider one basic
question: WHO IS MORE LIKELY TO BE FIGHTING FOR MY INTERESTS, THE CURRENT
MANAGEMENT OR A NON-MANAGEMENT SHAREHOLDER LIKE MYSELF? Management owns shares
too of course, but they also get salaries, bonuses and options.
Like you, we profit only if InterCept profits. Like you, we receive no
salary, bonuses, or options from Intercept (our nominees if elected would
receive the same compensation as other non-management directors). Like you, our
only concern is seeing the value of InterCept's shares realize their maximum
potential.
PROPOSAL 1: ELECT JANA'S NOMINEES TO THE BOARD OF DIRECTORS
We are asking for your support in electing our two board nominees, who
will aggressively pursue the highest possible return for all shareholders. Given
what we know, including that two of the three independent directors who
evaluated a possible sale of the company earlier this year recommended that the
sale process continue, we believe that one likely way to maximize the value of
the company would be through sale to a strategic buyer. While if elected our
nominees would constitute a minority of the board, they will urge the board to
evaluate ALL PROPOSALS TO MAXIMIZE VALUE.
PROPOSAL 2: GIVE SHAREHOLDERS GREATER POWER TO REMOVE DIRECTORS
Currently, shareholders have no right to remove directors, NO MATTER
HOW POOR THE COMPANY'S PERFORMANCE, short of "cause", such as fraud or criminal
conduct. Particularly given the tremendous decline in the company's equity
value, we find this unacceptable. InterCept's stock for example closed at $39.00
per share on January 2, 2002. Two years later, on January 2, 2004, InterCept's
stock closed at $11.26, a decline of over 70%.
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PROPOSAL 3: LET SHAREHOLDERS FILL VACANCIES ON THE BOARD OF DIRECTORS
InterCept shareholders also currently have no right to fill vacancies
on the board UNDER ANY CIRCUMSTANCES. As a result, when the two independent
directors referred to above resigned as a result of the board's decision to
discontinue the sale evaluation process, the board was able to hand-pick
replacements with no shareholder input.
PROPOSAL 4: LOWER THE THRESHOLD FOR SHAREHOLDERS TO CALL SPECIAL MEETINGS
Currently only the holders of a majority of the company's shares can
call a special meeting of the company to address issues of importance to them.
EACH OF PROPOSALS 2, 3 AND 4 IS BASED ON A SIMPLE PRINCIPLE:
SHAREHOLDER DEMOCRACY. EVEN IF MANAGEMENT DISAGREES WITH US ABOUT THE RIGHT
DIRECTION FOR INTERCEPT, WE ARE SURPRISED AND DISAPPOINTED THAT THEY ARE OPPOSED
TO PROPOSALS DESIGNED SOLELY TO GIVE SHAREHOLDERS A GREATER VOICE IN THE AFFAIRS
OF THE COMPANY.
Under the current terms of InterCept's preferred stock, each of our
proposals to amend the bylaws must be consented to by the holder of the majority
of the preferred stock. We plan to seek such consent and hope that this holder
will support our efforts to increase shareholder democracy.
PLEASE SIGN, DATE AND RETURN THE GOLD PROXY CARD IN THE ENCLOSED
PERPAID ENVELOPE. IF YOU HAVE ALREADY SENT IN INTERCEPT'S WHITE PROXY CARD, YOU
HAVE EVERY RIGHT TO CHANGE YOUR VOTE BY SIGNING AND RETURNING A LATER DATED GOLD
PROXY CARD.
We face an uphill climb in this effort, including management opposition
to our proposals to empower shareholders and a high voting threshold for one of
our proposals. But with your support, we can overcome these obstacles and
deliver on the common goal of all InterCept shareholders: REALIZING THE MAXIMUM
VALUE OF YOUR INVESTMENT.
InterCept's 2004 Annual Meeting will be held on Thursday, June 24,
2004, at the Hilton Atlanta Northeast, 5993 Peachtree Industrial Boulevard,
Norcross, Georgia, 30092, beginning at 8:30 a.m. EDT.
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We look forward to working with you and thank you for your support. We
encourage you to contact our proxy solicitor, MacKenzie Partners, Inc. at (800)
322-2885, with any questions or to learn more.
Very truly yours,
/s/ Barry S. Rosenstein
---------------------------
Barry S. Rosenstein
Managing Director
JANA Partners LLC
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PROXY STATEMENT OF
JANA PARTNERS LLC
AND JANA MASTER FUND, LTD.
-------------------------
2004 ANNUAL MEETING OF SHAREHOLDERS OF
INTERCEPT, INC.
-------------------------
YOUR VOTE IS ESPECIALLY IMPORTANT AT THIS YEAR'S ANNUAL
MEETING. PLEASE SIGN, DATE AND RETURN THE GOLD CARD TODAY.
-------------------------
INTRODUCTION
JANA Partners LLC and JANA Master Fund, Ltd. (together, "JANA", "we" or
"us") are providing you with this proxy statement and the enclosed GOLD proxy
card because we are seeking your support to make fundamental changes in the
leadership and governance of InterCept, Inc. (the "Company" or "InterCept") at
the Company's 2004 Annual Meeting of Shareholders (the "Annual Meeting").
This Proxy Statement and the accompanying GOLD proxy card are first
being sent or given to the Company's shareholders on or about May 28, 2004.
JANA's goals are to maximize the value of InterCept for all of its
shareholders and to give the voice of the shareholders the prominence it
deserves in the future of the Company. Like you, we are shareholders of
InterCept and stand to profit not from salaries, bonuses, stock options or other
perks, but from only one thing: the realization of the full potential of
InterCept's value.
Our nominees, if elected to the Board of Directors of the Company (the
"Board of Directors"), would receive only the same compensation as the other
non-management directors.
We believe that the Board of Directors was wrong to abandon the sale
process it began late last year over the objections of two of the three
independent directors assigned to evaluate a sale of the Company. We also
believe the Board of Directors was wrong to replace these two independent
directors, who resigned as a result of the Board of Directors' decision, with
hand-picked replacements without any input from shareholders.
We therefore believe it is time to elect directors who will be
RELENTLESS IN EXPLORING EVERY POSSIBLE MEANS OF INCREASING SHAREHOLDER VALUE.
This includes the full exploration of a sale of the Company, as well as any
other conceivable means to maximize the value of your investment in InterCept.
We also believe it is time to amend the bylaws to GIVE SHAREHOLDERS THE VOICE
THEY DESERVE, including giving them greater power to choose directors, rather
than having them selected for them by the Board of Directors.
Therefore, we are seeking your support for our two nominees named below
in "PROPOSAL 1: ELECTION OF DIRECTORS" to serve as Class III directors on the
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Board of Directors whose terms will expire in 2007. Both of our nominees will be
dedicated solely to maximizing value for InterCept's shareholders and will fully
explore all avenues to achieve this goal. While our nominees if elected would be
a minority of the Board of Directors, they would seek to cause the other members
to pursue this same goal.
Furthermore, JANA is seeking your support for the following three
proposals to amend the Company's bylaws, each of which has the sole purpose of
increasing shareholder democracy at InterCept:
o Give shareholders greater power to remove directors.
o Let shareholders fill vacancies on the Board of Directors.
o Lower the threshold for shareholders to call special meetings.
These proposals are further described below in "PROPOSALS 2, 3 AND 4:
BYLAW AMENDMENTS".
The Board of Directors has set April 15, 2004 as the record date for
the Annual Meeting, The Company's principal executive offices are located at
3150 Holcomb Bridge Road, Suite 200, Norcross, GA 30071.
PLEASE COMPLETE, SIGN, DATE AND RETURN ONLY THE GOLD PROXY CARD AND DO
NOT RETURN ANY PROXY CARD FROM INTERCEPT. IF YOU HAVE ALREADY RETURNED
INTERCEPT'S WHITE PROXY CARD, YOU CAN CHANGE YOUR VOTE BY SIGNING AND RETURING A
LATER-DATED GOLD PROXY CARD.
IF YOU NEED HELP OR HAVE QUESTIONS ABOUT THIS PROXY STATEMENT OR THE
ENCLOSED GOLD PROXY CARD PLEASE CONTACT:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
(800) 322-2885
----------------------
THIS SOLICITATION IS BEING MADE BY JANA AND NOT ON BEHALF OF
INTERCEPT'S BOARD.
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INFORMATION ABOUT JANA
JANA Partners LLC, a Delaware limited liability company, is a private
money management firm with assets under management of approximately $1.4
billion. JANA Partners LLC beneficially owns 1,914,737 shares of the Company's
common stock (approximately 9.4% of the shares outstanding) in various accounts
under its management and control, including JANA Master Fund, Ltd., a Cayman
Islands exempted company. The principals of JANA are Barry Rosenstein and Gary
Claar. The principal business address of JANA is 201 Post Street, Suite 1000,
San Francisco, California 94108.
JANA, as a greater than 5% shareholder of the Company, is subject to
the filing requirements of the Securities Exchange Act of 1934, and is required
to file periodic reports and other information with the SEC relating to its
ownership of the Company's common stock. These reports and other information can
be inspected and copied at the public reference facility maintained by the SEC
at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Information
regarding the public reference facility may be obtained from the SEC by
telephoning 1-800-SEC-0330. JANA's and the Company's filings are also available
to the public on the SEC's Internet site, at www.sec.gov. Copies of such
materials may also be obtained by mail from the Public Reference Section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
Intercept's common stock is listed on the Nasdaq National Market. Reports and
other information regarding Intercept are available for inspection at the
National Association of Securities Dealers, Inc. at 9513 Key West Avenue,
Rockville, Maryland 20850.
IMPORTANT
JANA STRONGLY RECOMMENDS THAT YOU VOTE FOR ITS NOMINEES AND BYLAW
AMENDMENT PROPOSALS BY COMPLETING, SIGNING, DATING AND MAILING THE ENCLOSED GOLD
PROXY CARD PROMPTLY IN THE PREPAID ENVELOPE PROVIDED WHETHER OR NOT YOU INTEND
TO ATTEND THE MEETING IN PERSON.
HOLDERS OF RECORD OF INTERCEPT COMMON STOCK AS OF APRIL 15, 2004, ARE
URGED TO SUBMIT A GOLD PROXY CARD EVEN IF YOU SOLD YOUR SHARES AFTER THAT DATE.
IF YOU HAVE PURCHASED INTERCEPT COMMON STOCK AFTER APRIL 15, 2004, AND
WISH TO VOTE YOUR SHARES AT THE ANNUAL MEETING, YOU SHOULD SEEK TO OBTAIN A
PROXY FROM THE PERSON THAT SOLD YOU YOUR SHARES.
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IF YOUR INTERCEPT COMMON STOCK WAS HELD IN THE NAME OF A BROKERAGE
FIRM, BANK OR NOMINEE ON APRIL 15, 2004, PLEASE CONTACT THE PERSON RESPONSIBLE
FOR YOUR ACCOUNT AND GIVE INSTRUCTIONS FOR YOUR SHARES TO BE VOTED ON THE GOLD
PROXY CARD.
IF YOU NEED ASSISTANCE OR HAVE QUESTIONS CONCERNING THIS PROXY
STATEMENT OR THE ACCOMPANYING GOLD PROXY CARD PLEASE CONTACT:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
(800) 322-2885
----------------------
9
BACKGROUND OF AND REASONS FOR THIS SOLICITATION
This proxy contest is about one thing: maximizing value for the
shareholders of the Company. JANA's nominees to the Board of Directors will
aggressively pursue all possible means to realizing the maximum value of
InterCept's stock. Furthermore, JANA's proposals to amend the bylaws of the
Company are all designed to give greater power to the people who have the most
to gain from the realization of the Company's full value, the shareholders.
The recent activities of the Board of Directors strongly indicate that
a change in the membership of the Board of Directors will be required for the
Company to promptly and thoroughly explore the opportunity to realize the
maximum value of the Company for its shareholders. While our nominees if elected
would be a minority of the Board of Directors, they would be dedicated to
persuading the other members to join them in this effort. Additionally, JANA
believes that recent events also show that there is a serious imbalance of power
between the Board of Directors and the shareholders of InterCept which must be
addressed.
On October 30, 2003, the Company announced that its Chairman and CEO,
John W. Collins, intended to make an offer to take the Company private. The
Board of Directors formed a special independent committee of three directors
(the "Special Committee") to evaluate the possible sale of the Company. On
December 12, 2003, the Company announced that Mr. Collins, after consulting with
several parties regarding financing of a transaction, would not be making an
offer but that "several third parties initiated contact with the special
committee and expressed interest in the Company, and the special committee will
be evaluating those indications of interest."
HOWEVER, LESS THAN TWO MONTHS LATER, DESPITE HAVING RECEIVED BY THE
COMPANY'S OWN ADMISSION TEN INDICATIONS OF INTEREST IN JANUARY OF 2004 AND
DESPITE THE RECOMMENDATION OF THE SPECIAL COMMITTEE TO CONTINUE THE SALE
PROCESS, THE COMPANY'S BOARD OF DIRECTORS TERMINATED THE SALE PROCESS AND
DISSOLVED THE SPECIAL COMMITTEE. AS A RESULT OF THIS DECISION, ON FEBRUARY 13,
2004, TWO OF THE THREE INDEPENDENT DIRECTORS ON THE SPECIAL COMMITTEE, BOONE A.
KNOX (WHO WAS THEN ALSO THE VICE CHAIRMAN OF THE COMPANY) AND JON R. BURKE,
RESIGNED.
In his resignation letter, Mr. Knox stated: "The Special Committee,
after carefully considering the advice of financial advisors determined that the
Company should permit selected interested and capable strategic buyers to
conduct due diligence and negotiations to evaluate a possible sale of the
Company. The Board of Directors has determined to discontinue this process. As a
result of this decision, I hereby resign as a director, Vice Chairman and member
of various committees of the Company and its subsidiaries effective February 13,
2004 and request that this letter and the forgoing reasons for my resignation be
disclosed publicly." Mr. Burke's resignation letter was similar in its content.
WE BELIEVE THAT THIS SEQUENCE OF EVENTS POINTS TO THE NEED TO ELECT
INDIVIDUALS TO THE BOARD OF DIRECTORS WHO WILL AGGRESSIVELY PURSUE THE BEST
COURSE TO MAXIMIZE VALUE FOR SHAREHOLDERS. IF OUR NOMINEES ARE ELECTED, THEY
WILL PROPOSE THAT THE COMPANY IMMEDIATELY ENGAGE A NATIONALLY RECOGNIZED
INVESTMENT BANKING FIRM TO CONDUCT A FULL AND FAIR REVIEW OF THE BEST
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VALUE-MAXIMIZING OPTIONS FOR SHAREHOLDERS, INCLUDING A SALE OF THE COMPANY. IF
SUCH FULL AND FAIR REVIEW DETERMINES THAT A SALE IS NOT THE BEST COURSE OF
ACTION, OUR NOMINEES WILL RELENTLESSLY PURSUE ALL OTHER MEANS OF INCREASING
VALUE FOR SHAREHOLDERS. IF SUCH REVIEW DETERMINES THAT A SALE IS THE BEST COURSE
OF ACTION, WE WILL WORK TO PERSUADE THE OTHER MEMBERS OF THE BOARD OF DIRECTORS
TO FOLLOW THROUGH TO MAXIMIZE SHAREHOLDER VALUE.
On April 2, 2004, JANA notified the Company that it intended to
nominate four directors for election to the Board of Directors. Prior to
April 14th, 2004, the Company's bylaws stated that "A director elected to fill a
vacancy shall hold office only until the next election of directors by the
shareholders." Under this provision (the "pre-amendment bylaw"), the individuals
selected solely by the Board of Directors to replace the two directors who
resigned as a result of the Board of Directors' decision to end the sale process
as described above would be standing for election at the Annual Meeting, in
addition to the two Class III directors whose terms expire at the Annual
Meeting, so that a total of four director seats on the Board of Directors would
be voted upon at the Annual Meeting.
On April 14, 2004, the Company amended its bylaws to state that
directors elected by the Board of Directors to fill vacancies, such as the ones
created by the resignations referred to above, would serve for the unexpired
terms of the directors they replaced, rather than until the next shareholders'
meeting. In addition, on April 14, 2004, the Company filed an application for a
temporary restraining order and preliminary injunction in United States District
Court to prevent JANA from nominating four individuals to the Board of
Directors, claiming that the Company's own pre-amendment bylaw, which had been
in existence for almost six years and which the Company had set forth in its
public SEC filings, was invalid and accordingly that only two director seats
would be up for election at the Annual Meeting. JANA in response filed a
counterclaim requesting, among other things, that the court allow JANA to
present shareholder proposals at the Annual Meeting.
On April 29, 2004, the court both denied InterCept's request for a
temporary restraining order and preliminary injunction preventing JANA from
nominating four directors and ordered the Company to allow JANA to present
shareholder proposals at the Annual Meeting. Following the court's order JANA
announced that, consistent with the court's opinion, to avoid uncertainty at the
Annual Meeting and to facilitate an orderly election, it would nominate only two
individuals for election to the Board of Directors. On May 3, 2004, JANA
delivered to the Company the proposals described below in "PROPOSALS 2, 3 AND 4:
BYLAW AMENDMENTS", which are designed to increase shareholder democracy
at the Company and to allow the Company's shareholders to elect directors of
their own choosing rather than those hand-picked by the Board of Directors.
On May 20, 2004, the Company offered to increase the size of the Board
of Directors and give two seats on the Board of Directors to JANA's appointees
in exchange for JANA's agreement to end its proxy solicitation and related
litigation. Under the Company's offer, one of JANA's appointees would be
nominated by the Board of Directors at the Annual Meeting to serve as Class I
Director and one of JANA's appointees would be nominated by the Board of
Directors at the Annual Meeting to serve as a Class II Director. Currently, if
JANA is successful in having its nominees elected to the Board of Directors this
year, JANA would have the opportunity next year to win a majority of the seats
on the Board of Directors with shareholder support. Under the Company's proposal
however, JANA would be unable to do so until the 2006 Annual Meeting at the
earliest. Additionally, the Company's proposal did not include any of the bylaw
amendments JANA has proposed. For these reasons, JANA rejected the Company's
settlement offer formally on May 26, 2004.
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PROPOSAL 1: ELECTION OF DIRECTORS
GENERAL
The Company's articles of incorporation provide that its board of
directors shall consist of at least four and no more than 12 directors. The
Company's directors are divided into three classes, each class as nearly equal
in number as possible. The Board of Directors determines the number of directors
within these limits. The term of office of only one class of directors expires
in each year. The directors elected at the Annual Meeting will hold office for a
term of three years or until their successors are elected and qualified. The
current number of directors is six. Article 3.8 of the bylaws of the Company
allows shareholders to nominate persons for election as directors.
PROPOSAL 1: ELECTION OF JANA'S NOMINEES
At the Annual Meeting, JANA will nominate the two nominees indicated
below and JANA's representatives will vote the proxies they receive in favor of
these nominees. JANA has selected these individuals because it believes both
will aggressively pursue all opportunities to maximize the value of each
shareholder's investment in InterCept and will push the majority of the Board of
Directors to do the same.
Nominees for Election - Class III Director, Term Expiring 2007
NAME AGE PRINCIPAL OCCUPATION AND BACKGROUND
Kevin J. Lynch 35 Mr. Lynch has been a Principal of JANA Partners LLC
since 2001. Prior to joining JANA, Mr. Lynch was an
Investment Analyst at Sagaponack Partners, L.P., a
private equity fund, from 1999 to 2001. Mr. Lynch has
also held Associate positions at Cornerstone Equity
Investors, Prudential Equity Investors and Prudential
Investment Corporation. Mr. Lynch earned his Masters
in Business Administration from Columbia Business
School in 1999, his B.S. from Penn State in 1990 and
holds the Chartered Financial Analyst (CFA)
designation.
Marc Weisman 51 Mr. Weisman is a co-founder of Sagaponack
Partners, L.P., a private equity investment
partnership, where he has been a Principal since
1996. Prior to that, Mr. Weisman was a Director at
Credit Suisse First Boston (CSFB), in the
Principal Transactions Group from 1995 to 1996.
Prior to joining CSFB, Mr. Weisman served as the
Chief Financial Officer of The Adco Group from
1988 to 1995. Prior to that, Mr. Weisman worked at
Oppenheimer & Co. from 1985 to 1988, first as
Chief Financial Officer and then as the head of
Oppenheimer & Co.'s real estate investment banking
group. Before embarking on a career in finance and
investing, Mr. Weisman practiced law, including at
the law firm of Weil, Gotshal & Manges from 1979
to 1985, where he was an associate and then a
partner. Mr. Weisman earned B.A. and J.D. degrees
from Temple University in 1974 and 1977,
respectively, and received an L.L.M. in taxation
from New York University in 1980.
The principal business address of Mr. Lynch is 201 Post Street, Suite
1000, San Francisco, California 94108. The principal business address of Mr.
Weisman is 645 Fifth Avenue, Eighth Floor, New York, New York 10022.
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Both Messrs. Lynch and Weisman are investors in affilates of JANA,
which owns shares of common stock of the Company as described below in
"INFORMATION CONCERNING PERSONS WHO MAY SOLICIT PROXIES - Participant Ownership
of and Transactions in the Company's Securities". None of the organizations
listed above is a parent, subsidiary or other affiliate of the Company. The
information above concerning age, principal occupation, background and principal
business address of JANA's nominees has been furnished by the respective
nominee.
Each of JANA's nominees has agreed to be named in this Proxy Statement
and, if elected, to serve as a director of the Company. Unless otherwise
specified on the proxy card, JANA's representatives will vote any proxies it
receives in favor of the election of the persons named above. JANA 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's slate occurs for any reason (including
if the Company 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's nominees), the Company's common stock
represented by GOLD proxy cards received by JANA and not properly revoked will
be voted for the substitute candidate(s) nominated by JANA in compliance with
the rules of the SEC and any other applicable law and, if applicable, the
Company's bylaws.
You have the opportunity to withhold authority for JANA's
representatives, as proxy, to vote in favor of the election of any of JANA's
nominees as directors at the Annual Meeting by so indicating on the GOLD proxy
card. There is no assurance that any of the Company's nominees will serve if
elected with any of JANA's nominees.
JANA RECOMMENDS THAT HOLDERS OF INTERCEPT COMMON STOCK VOTE IN FAVOR OF
THE ELECTION OF JANA'S NOMINEES.
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PROPOSALS 2, 3 AND 4: BYLAW AMENDMENTS
GENERAL
The proposals set forth below are all designed to accomplish the same
goal: to give shareholders a greater voice in the running of InterCept.
Even if the current management of InterCept disagrees with us about the
direction of the Company, WE ARE SURPRISED AND DISAPPOINTED THAT THEY ARE
OPPOSED TO PROPOSALS DESIGNED SOLELY TO GIVE SHAREHOLDERS A GREATER VOICE IN THE
AFFAIRS OF THE COMPANY. We have read and are not persuaded by the Company's
rationale for opposing such proposals. Under InterCept's current bylaws,
shareholders have no right to remove directors before their term expires unless
"cause" such as fraud or criminal conduct exists and no right to fill vacancies
on the Board of Directors under any circumstances. Plus, the bylaws currently
require a majority of InterCept's shares just to cause the Company to call a
special meeting to address issues of importance to shareholders. We think this
imbalance in power is unacceptable.
The proposals set forth below will correct this imbalance and we urge
your support for each. If the current management of InterCept believes that
public companies should be run with the full participation of their
shareholders, we believe that they should support these proposals as well.
The full text of our proposals setting forth each bylaw as it is
proposed to be amended, together with such bylaw as it currently stands, is set
forth in Schedule I. The percentage of votes required for the passage of each
proposal as set forth below is based upon the requirements set forth by the
Company in its proxy statement.
PROPOSAL 2: GIVE SHAREHOLDERS GREATER POWER TO REMOVE DIRECTORS
Under Section 3.3 of the Company's current bylaws, members of the Board
of Directors may only be removed by the shareholders for cause, which is
described in the comments to the Georgia Business Corporation Code (the "Georgia
Code") as consisting of "fraud, criminal conduct, gross abuse of office
amounting to a breach of trust, or similar misconduct". Furthermore, even if
such cause exists, the Company's current bylaws require the vote of the holders
of 66 2/3% of the votes entitled to be cast at a shareholders' meeting called
for such purpose to effect removal.
We believe this prevents shareholders from removing directors even when
it is clear from the Company's performance that such change on the Board of
Directors is necessary.
However, under the Georgia Code, corporations can give shareholders the
power to remove directors "with or without cause" by vote of the holders of a
simple majority of a corporation's shares entitled to be cast at a shareholders'
meeting called for such purpose.
JANA proposes to give shareholders the right available under Georgia
law to remove directors with or without cause by vote of the holders of a simple
majority of the Company's shares entitled to be cast at a shareholders'
meeting for which notice of the removal action has been given for such removal.
14
Shareholders are therefore asked to approve Proposal 2, the full text of which
is set forth in Schedule I to this Proxy Statement.
JANA and its advisors, based upon Georgia law, disagree with the Company's
assertion that Proposal 2 would result in an invalid bylaw. The Company in its
proxy statement states that under Georgia law, a bylaw provision may not be
inconsistent with a corporation's articles of incorporation and that therefore
they believe Proposal 2 is invalid. However, Section 14-2-808(d) of the Georgia
Code states that where a company has a "staggered" board of directors, as
InterCept does, "directors may be removed only for cause, unless the articles of
incorporation OR A BYLAW ADOPTED BY THE SHAREHOLDERS provides otherwise."
(emphasis added) JANA and its advisors therefore believe that Proposal 2 is
valid under Georgia law and JANA is therefore soliciting proxies for Proposal 2.
Proposal 2 will be deemed to be approved if the holders of 66 2/3% of
the votes entitled to be cast at the Annual Meeting vote in favor of approval.
JANA RECOMMENDS THAT HOLDERS OF INTERCEPT COMMON STOCK
VOTE "FOR" PROPOSAL 2 ON THE ENCLOSED GOLD PROXY CARD
PROPOSAL 3: LET SHAREHOLDERS FILL VACANCIES ON THE BOARD OF DIRECTORS
Under Section 3.4 of the Company's current bylaws, vacancies on the
Board of Directors (such as those resulting from director resignations) may ONLY
be filled by the remaining directors.
We think this is contrary to the principles of shareholder democracy.
In fact, it was this provision of the Company's current bylaws which allowed the
Board of Directors to hand-pick successors to the two independent directors who
resigned from the Board of Directors as a result of its decision to discontinue
the sale process as described above and to place the Board of Directors'
designees beyond the review and vote of shareholders for over a year in the case
of one designee and over two years in the case of the other designee.
However, under the Georgia Code, corporations can give the power to
fill vacancies to shareholders as well, meaning that the Company's bylaws can be
amended to prevent the Board from hand-picking replacements without any
shareholder input in the future.
JANA proposes to give shareholders the rights available under Georgia
law by giving the right to fill such vacancies on the Board of Directors first
to the shareholders and then to the Board of Directors if the shareholders fail
to act at a shareholders' meeting called for such purpose, and, in the case of
vacancies caused by removal, to give this power only to the shareholders.
Shareholders are therefore asked to approve Proposal 3, the full text of which
is set forth in Schedule I to this Proxy Statement.
Proposal 3 will be deemed to be approved if the votes cast in favor of
approval exceed the votes cast opposing approval.
JANA RECOMMENDS THAT HOLDERS OF INTERCEPT COMMON STOCK
VOTE "FOR" PROPOSAL 3 ON THE ENCLOSED GOLD PROXY CARD
PROPOSAL 4: LOWER THE REQUIREMENT TO CALL SPECIAL MEETINGS
Under Section 2.3 of the Company's current bylaws, special meetings
must be called by the Company at the written request of the holders of 25% or
more of the votes entitled to be cast at such meeting, or if at any time the
15
Company has more than 100 beneficial owners of its shares, as is currently the
case, a majority of such votes. We believe this sets too high a bar for
shareholders who wish to cause the Company to call special meetings to address
issues of importance to them.
However, under the Georgia Code, corporations can lower this
requirement to allow the holders of a smaller percentage of shares to call a
special meeting.
JANA proposes to lower this requirement to 10% in all cases, as allowed
under Georgia law. Shareholders are therefore asked to approve Proposal 4, the
full text of which is set forth in Schedule I to this Proxy Statement.
Proposal 4 will be deemed to be approved if the votes cast in favor of
approval exceed the votes cast opposing approval.
JANA RECOMMENDS THAT HOLDERS OF INTERCEPT COMMON STOCK
VOTE "FOR" PROPOSAL 4 ON THE ENCLOSED GOLD PROXY CARD
SPROUT GROUP RIGHTS
Under the provisions of the Company's Series A Preferred Stock as
currently in effect, Sprout Capital IX, L.P. (the "Sprout Group"), as holders of
over 99% of the Series A Preferred Stock, although they hold only approximately
3 1/2% of the total shares of the Company on an as-converted basis, has
extensive approval rights with respect to actions taken by the Company or its
shareholders, including any amendment to the Company's bylaws. Therefore, under
the terms of the Series A Preferred Stock as currently in effect, even if the
holders of the required percentage of the Company's common stock were to approve
JANA's proposals to amend the Company's bylaws as set forth above, the Sprout
Group's consent would be required for such bylaw amendments to become effective,
and we will actively seek such consent. According to the Company's 8-K filed on
May 25, 2004, the Company has agreed with the Sprout Group to exchange the
Series A Preferred Stock for Series B Preferred Stock, which has a lower
conversion price for converting into common stock and different rights than the
Series A Preferred Stock. Under the terms of the Series B Stock as currently
contemplated, if the Board of Directors did not approve our bylaw amendments,
the Sprout Group would still have the right to block such amendments.
As we have stated, we believe our proposals to amend the bylaws are
essential to increasing shareholder democracy at InterCept. We are hopeful
therefore that the Sprout Group will consent to such amendments and intend to
seek its support.
YOUR VOTE IS ESPECIALLY IMPORTANT AT THIS YEAR'S ANNUAL MEETING. PLEASE
SIGN, DATE AND RETURN THE GOLD CARD TODAY. IF YOU HAVE ALREADY RETURNED
INTERCEPT'S WHITE PROXY CARD, YOU CAN CHANGE YOUR VOTE BY SIGNING AND
RETURING A LATER-DATED GOLD PROXY CARD.
16
IF YOU NEED HELP OR HAVE QUESTIONS ABOUT THIS PROXY STATEMENT OR THE
ENCLOSED GOLD PROXY CARD PLEASE CONTACT:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
(800) 322-2885
17
QUESTIONS AND ANSWERS REGARDING THIS PROXY STATEMENT
Q: WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD?
A: You are receiving this Proxy Statement and proxy card because you
beneficially own shares of InterCept common stock and we, JANA Partners
LLC, are seeking your support for an alternate slate of nominees for
election to the Board of Directors of InterCept and for our proposals to
amend InterCept's bylaws to increase the rights of shareholders to remove
and elect directors and to call special meetings.
Q: WHAT AM I VOTING ON?
A: You are being asked to vote on:
- the election of two individuals to the Board of Directors of
InterCept;
- proposals by JANA to amend InterCept's bylaws to:
o allow for the removal of directors with or without cause at
a shareholders' meeting by the holders of a majority of
votes entitled to be cast,
o give shareholders the right to fill vacancies on
InterCept's board of directors, and the exclusive right to
fill vacancies caused by removal, and
o lower the percentage of InterCept's shares required to
cause InterCept to call a special meeting to 10%; and
- to authorize JANA's representatives to vote upon such other
business as may properly come before the Annual Meeting including
any adjournment, postponement or rescheduling of the Annual
Meeting.
Cumulative voting is not permitted and dissenters' rights are not
applicable to the matters being voted upon.
Q: HOW DO I VOTE IN FAVOR OF JANA'S NOMINEES AND BYLAW AMENDMENT PROPOSALS?
A: When you sign the enclosed GOLD proxy card, you appoint JANA's
representatives as your representatives at the Annual Meeting. JANA's
representatives will vote your shares of InterCept common stock at
the Annual Meeting as you have instructed on the proxy card. This way,
your shares of InterCept common stock will be voted whether or not you
attend the Annual Meeting in person. Even if you plan to attend the
Annual Meeting in person, it is a good idea to complete, sign and return
18
your GOLD proxy card in advance of the meeting, just in case your plans
change. If you attend the Annual Meeting and vote in person, any proxy
card you have submitted will be revoked.
You may vote by mail or you may vote in person at the Annual Meeting. To
vote by mail, you must sign and date the enclosed GOLD proxy card and
mail it in the enclosed, prepaid and addressed envelope. If you mark your
voting instructions on the proxy card, your shares will be voted as you
instruct. If you return a signed card but do not provide voting
instructions, your shares will be voted for the two individuals named
below in "PROPOSAL 1: ELECTION OF DIRECTORS" and in favor of the
proposals described below in "PROPOSALS 2, 3 AND 4: BYLAW AMENDMENTS.
If an issue comes up for vote at the meeting that is not on the proxy
card, JANA's representatives will vote your shares of InterCept
common stock, under your proxy, in their discretion.
To vote in person at the Annual Meeting, you should attend the Annual
Meeting and fill out the written ballot that will be distributed to
InterCept's shareholders at the Annual Meeting. If you hold your
InterCept common stock through a brokerage account but do not have a
physical share certificate, you must request a legal proxy from your
stockbroker in order to vote at the meeting.
Q: WHAT IS THE RECORD DATE?
A: The record date for the Annual Meeting is April 15, 2004. Only holders of
record of InterCept common stock as of the close of business on that
date, or the holders of proxies assigned by such holders, are entitled to
vote at the Annual Meeting.
Q: HOW MANY SHARES ARE OUTSTANDING?
A: According to InterCept's proxy statement, as of the record date, there
were 20,272,148 shares of InterCept common stock outstanding, as well as
100,000 shares of Series A Preferred Stock (the "Series A Preferred
Stock") outstanding. Each share of common stock entitles the holder to
one vote on each matter presented at the Annual Meeting. Each share of
Series A Preferred Stock entitles the holder to approximately 7.158 votes
on each matter presented at the Annual Meeting. Additionally, the Company
has granted to the holders of its Series A Preferred Stock, among other
special rights, the right to block any amendment to the Company's
articles of incorporation or bylaws by requiring the consent of a
majority of the Series A Preferred Stock for such amendments. Therefore,
under the terms of the Series A Preferred Stock as currently in effect,
the bylaw amendments we are proposing must be approved by a majority of
the holders of the Series A Preferred Stock to become effective following
approval by the holders of the required percentage of the Company's
common stock.
19
Q: WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY?
A: You may revoke your proxy and change your vote at any time before the
polls close at the Annual Meeting. You may revoke your proxy by signing
and returning another proxy with a later date, voting in person at the
Annual Meeting or giving written notice of revocation to the Secretary of
InterCept.
Q: HOW ARE VOTES COUNTED?
A: A majority of the outstanding shares of InterCept's common stock and
Series A Preferred Stock (considered on an as-converted to common stock
basis) as of the record date must be present at the meeting, either in
person or by proxy, to hold the meeting and conduct business. This is
called a quorum. Shares will be counted for quorum purposes if they are
represented at the meeting for any purpose other than solely to object to
holding the meeting or transacting business at the meeting. Abstentions
and broker non-votes count as present for establishing a quorum. A
"broker non-vote" occurs with respect to a proposal when a broker is not
permitted to vote on that proposal without instruction from the
beneficial owner of the shares and no instruction is given.
You may vote either "for" or "against" each matter to be considered at
the Annual Meeting other than the election of directors.
A representative of IVS Associates, an independent inspector of
elections, will tabulate and certify the shareholder vote.
Q: HOW MANY VOTES ARE NEEDED TO ELECT DIRECTORS AND APPROVE JANA'S PROPOSALS
TO AMEND THE BYLAWS?
A: If a quorum is present, the director nominees receiving the highest
number of votes will be elected as directors. This number is called a
plurality. Each of our proposals to amend the Company's bylaws requires a
different percentage of votes for approval.
o Proposal 2 will be deemed to be approved if the holders of 66 2/3%
of the votes entitled to be cast at the Annual Meeting vote in
favor of approval.
o Proposal 3 will be deemed to be approved if the votes cast in
favor of approval exceed the votes cast opposing approval.
o Proposal 4 will be deemed to be approved if the votes cast in
favor of approval exceed the votes cast opposing approval.
Proposals 2, 3 and 4 are described below in "PROPOSALS 2, 3 AND 4:
BYLAW AMENDMENTS".
You will be receiving at least two proxy statements, and corresponding
proxy cards, for the matters to be voted on at the Annual Meeting,
including one from InterCept and this Proxy Statement from us. EACH OF
20
THESE PROXY STATEMENTS RELATES TO THE ELECTION OF DIRECTORS. HOWEVER,
THIS PROXY STATEMENT RELATES TO AN ALTERNATE SLATE OF NOMINEES PROPOSED
BY JANA AND NOT THE SLATE OF NOMINEES PROPOSED BY INTERCEPT.
Q: WHAT IF I AM NOT THE RECORD HOLDER OF MY SHARES?
A: If your shares are held in the name of a brokerage firm, bank nominee or
other institution ("custodian"), only such custodian can execute a proxy
on your behalf. You should sign, date and return the GOLD proxy card
provided by such custodian. If your shares are held in the name of a
custodian and you wish to vote in person at the Annual Meeting, you may
request a document from the custodian called a "legal proxy" and bring it
with you to the Annual Meeting.
If you need any assistance, please contact MacKenzie Partners, Inc. at
(800) 322-2885.
NO MATTER HOW YOU PLAN TO VOTE, WE STRONGLY ENCOURAGE YOU TO PARTICIPATE.
THIS YEAR'S ANNUAL MEETING WILL BE CRUCIAL IN DETERMINING THE FUTURE OF
INTERCEPT AND WE ENCOURAGE EVERY SHAREHOLDER TO CONSIDER EACH PROPOSAL
CAREFULLY.
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21
VOTING
The information contained in the following five paragraphs is based on
publicly available copies of the articles of incorporation and bylaws of the
Company, the Company's proxy statement and on other information contained in the
Company's public filings.
The Board of Directors has fixed April 15, 2004 as the record date for
the determination of the Company's shareholders that are entitled to notice of
and to vote at the Annual Meeting. According to the Company's proxy statement,
as of that date, there were 20,272,148 shares of the Company's common stock
outstanding and 100,000 shares of Series A Preferred Stock outstanding. Each
share of Series A Preferred Stock entitles the holder to approximately 7.158
votes on each matter presented at the Annual Meeting. According to the Company's
proxy statement, a list of shareholders eligible to vote will be available at
the Annual Meeting.
Additionally, the Company has granted to the holders of its Series A
Preferred Stock, among other special rights, the right to block any amendment to
the Company's articles of incorporation or bylaws by requiring the consent of a
majority of the Series A Preferred Stock for such amendments. Therefore, under
the terms of the Series A Preferred Stock as currently in effect, the bylaw
amendments we are proposing must be approved by the holders of a majority of the
Series A Preferred Stock to become effective following approval by the holders
of the required percentage of the Company's common stock.
A majority of the outstanding shares of the Company's common stock and
Series A Preferred Stock (considered on an as-converted to common stock basis)
as of the record date, also known as a quorum, must be present at the meeting,
either in person or by proxy, to hold the meeting and conduct business. Shares
will be counted for quorum purposes if they are represented at the meeting for
any purpose other than solely to object to holding the meeting or transacting
business at the meeting. Abstentions and broker non-votes count as present for
establishing a quorum. A "broker non-vote" occurs with respect to a proposal
when a broker is not permitted to vote on the proposal without instruction from
the beneficial owner of the shares and no instruction is given.
Two individuals will be elected to the Board of Directors at the Annual
Meeting as Class III Directors whose terms expire in 2007. If a quorum is
present, the director nominees receiving the highest number of votes for their
election, also known as a plurality, within each class of director will be
elected directors of that class. Proposal 2 will be deemed to be approved if the
holders of 66 2/3% of the votes entitled to be cast at the Annual Meeting vote
in favor of approval. Proposal 3 will be deemed to be approved if the votes cast
in favor of approval exceed the votes cast opposing approval. Proposal 4 will be
deemed to be approved if the votes cast in favor of approval exceed the votes
cast opposing approval. Proposals 2, 3 and 4 are described below in "PROPOSALS
2, 3 AND 4: BYLAW AMENDMENTS". Shareholders do not have cumulative voting
rights.
The Board of Directors has established an Audit Committee, a Nominating
and Governance Committee and a Compensation and Stock Option Committee.
Information regarding membership, meetings and policies and procedures of these
22
committees is contained in the proxy statement of the Company furnished to
shareholders in connection with the Annual Meeting.
If you execute and return the enclosed form of GOLD proxy card, you may
still revoke that proxy at any time before the polls close at the Annual
Meeting. You may do so by filing with the Secretary of the Company a written
notice of revocation, by executing and returning a proxy card bearing a later
date than your most recently submitted proxy card or by attending the Annual
Meeting and voting in person. Your execution of a proxy card will not affect
your right to attend the Annual Meeting and vote in person, but your attendance
at the Annual Meeting will not, by itself, revoke a proxy that you have
previously executed and delivered.
IF YOU, AS A COMPANY SHAREHOLDER, WISH TO VOTE FOR JANA'S NOMINEES AND
BYLAW AMENDMENT PROPOSALS, YOU SHOULD SUBMIT THE ENCLOSED GOLD PROXY CARD
WHETHER OR NOT YOU INTEND TO ATTEND THE MEETING IN PERSON. YOU SHOULD NOT SUBMIT
THE COMPANY'S PROXY CARD.
Unless you indicate contrary instructions on the enclosed GOLD proxy
card, all shares of the Company's common stock represented by valid GOLD proxy
cards, which have not been revoked as described above, will be voted:
o FOR the election of JANA's nominees named below in "PROPOSAL 1:
ELECTION OF DIRECTORS";
o FOR the proposals described below in "PROPOSALS 2, 3 AND 4:
BYLAW AMENDMENTS"; and
o at the discretion of the proxy holder(s) on such other business
as may properly come before the Annual Meeting, including any
decision to adjourn, postpone or reschedule the Annual Meeting.
YOUR VOTE AT THIS YEAR'S ANNUAL MEETING IS ESPECIALLY IMPORTANT.
PLEASE SIGN AND DATE THE ENCLOSED GOLD PROXY CARD
AND PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU
INTEND TO ATTEND THE MEETING IN PERSON.
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23
INFORMATION CONCERNING PERSONS WHO MAY SOLICIT PROXIES
INFORMATION CONCERNING PARTICIPANTS
Under applicable SEC regulations, JANA and each of its nominees for the
Board of Directors is deemed to be a "participant" for purposes of this Proxy
Statement. The principals of JANA, Barry Rosenstein and Gary Claar, may also be
deemed to be "participants" for purposes of this Proxy Statement. Barry
Rosenstein, 45, has been a Managing Member of JANA Partners LLC since 2001 and
prior to that was a Principal at Sagaponack Partners, L.P., a private equity
fund, from 1993 to 2001. The principal business address of Mr. Rosenstein is 201
Post Street, San Francisco, CA 94108. Gary Claar, 37, has been a Managing Member
of JANA Partners LLC since 2001 and prior to that was a Principal at Marathon
Advisors LLC, an investment fund, from 1999 to 2001. The principal business
address of Mr. Claar is 200 Park Avenue, New York, NY 10166. Both Messrs.
Rosenstein and Claar are investors in affiliates of JANA, which owns shares of
common stock of the Company as described below in "Participant Ownership of and
Transactions in the Company's Securities". The principal business address of
JANA is 201 Post Street, Suite 1000, San Francisco, California 94108. The name,
business address and principal occupation of each of JANA's nominees for the
Board of Directors is set forth above under "PROPOSAL 1: ELECTION OF DIRECTORS".
If elected, each of JANA's nominees would be considered an independent
director under NASDAQ rules applicable to service on audit committees. None of
JANA's nominees currently serves as a director of the Company.
Marc Weisman has entered into an Indemnification Agreement with JANA,
pursuant to which JANA has agreed to indemnify him from and against any losses
incurred by such nominee resulting from, relating to, or arising out of his
nomination for election as a director of the Company at the 2004 Annual Meeting,
his service as a director of the Company or any committee of the board of the
Company, if elected, and his service as an officer, employee or agent of the
Company, if so appointed. Other than as set forth herein, there are no
arrangements or understandings between JANA and any of JANA's nominees or any
other person or persons pursuant to which the nominations described herein are
to be made, other than the consent by each of JANA's nominees to be named in
this Proxy Statement and to serve as a director of the Company if elected as
such at the Annual Meeting.
JANA's nominees will not receive any compensation from JANA for their
services as directors of the Company if elected. If elected, JANA's nominees
will be entitled to such compensation from the Company as is consistent with the
Company's past practices for services of non-employee directors, which is
described in the Company's proxy statement furnished to shareholders in
connection with the Annual Meeting.
Neither JANA nor Messrs. Rosenstein or Claar stand to benefit
from a sale of the Company other than through the sale of JANA's shares at a
premium, and neither JANA nor Messrs. Rosenstein or Claar will seek any
additional compensation if such a sale were to occur. JANA will not seek to
cause InterCept to engage in a business combination transaction with JANA or its
affiliates.
Except as otherwise set forth in this Proxy Statement, none of the
participants or their associates has any arrangement or understanding with any
person (i) with respect to any future employment by the Company or its
affiliates or (ii) with respect to future transactions to which the Company or
any of its affiliates will or may be a party, or any material interest, direct
or indirect, in any transaction that has occurred since January 1, 2003 or any
24
currently proposed transaction or series of similar transactions, to which the
Company or any of its subsidiaries was or is to be a party and in which the
amount involved exceeds $60,000.
Except as otherwise set forth in this Proxy Statement, there are no
material proceedings in which any of the participants or any of their associates
is a party adverse to the Company or any of its subsidiaries, or proceedings in
which any of the participants or their associates have a material interest
adverse to the Company or any of its subsidiaries. On April 14, 2004, the
Company filed a Verified Complaint for Injunctive and Declaratory Relief, naming
JANA Partners LLC and JANA Master Fund, Ltd. as defendants. JANA removed the
lawsuit to the United States District Court for the Northern District of Georgia
(the "court"). On April 14, 2004, the Company filed an application for a
temporary restraining order and preliminary injunction to prevent JANA from
nominating four individuals to the Board of Directors. On April 26, 2004, JANA
filed an answer to the Company's complaint, a counterclaim, and a response to
the Company's application for a temporary restraining order and preliminary
injunction. In its counterclaim, which named the Company and the members of the
Board of Directors as counterclaim-defendants, JANA requested that the court
allow JANA to nominate four nominees for election to the Board of Directors at
the Annual Meeting, order the Company to turn over certain requested books and
records, allow JANA to present shareholder proposals at the Annual Meeting,
allow JANA to nominate at least two directors should JANA be unable to nominate
four, and prevent the Board of Directors from taking actions in violation of
their fiduciary duties designed to discourage JANA's efforts to participate in
InterCept's governance. On April 29, 2004, the court entered an order denying
InterCept's request for a temporary restraining order and preliminary injunction
and ordering the Company to allow JANA to submit proposals for business to be
discussed at the Annual Meeting. On May 3, 2004, JANA delivered to the Company
the proposals described in this Proxy Statement and announced that consistent
with the court's order, to avoid uncertainty at the Annual Meeting and to
facilitate an orderly election, it would nominate only two persons for election
as directors at the Annual Meeting. On May 12, 2004, the Company filed its reply
to JANA's counterclaim. JANA intends to file its amended counterclaim by June
1, 2004.
None of the participants has ever served on the Board of Directors.
Except as otherwise set forth in this Proxy Statement, none of the participants
nor any of their associates has received any cash compensation, cash bonuses,
deferred compensation, compensation pursuant to other plans, or other
compensation, from, or related to, services rendered on behalf of the Company,
or is subject to any arrangement described in Item 402 of Regulation S-K under
the Securities Act of 1933, as amended ("Regulation S-K").
Except as otherwise set forth in this Proxy Statement, none of the
relationships regarding the participants described in Item 404(b) of Regulation
S-K exists or has existed. To the knowledge of JANA Partners, there are no
relationships involving any of the participants or any of their associates that
would have required disclosure under Item 402(j) of Regulation S-K had the
participants been directors of the Company. There are no family relationships
(as defined in Section 401(d) of Regulation S-K) between any participant and any
director or officer of the Company or person nominated by the Company to become
a director or executive officer.
Except as otherwise set forth in this Proxy Statement, none of the
participants have been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) in the ten past years.
25
INFORMATION CONCERNING OTHER REPRESENTATIVES OF JANA
JANA has engaged MacKenzie Partners as its proxy solicitation agent.
JANA anticipates that certain employees of MacKenzie Partners may communicate in
person, by telephone or otherwise with institutions, brokers or other persons
that are shareholders of the Company for the purpose of assisting in the
solicitation of proxies. Although MacKenzie Partners does not admit that it or
any of its directors, officers, employees, affiliates or controlling persons is
a "participant," as defined in Schedule 14A promulgated under the Securities
Exchange Act, or that Schedule 14A requires the disclosure of certain
information concerning them, the employees of MacKenzie Partners listed below
may assist JANA in such solicitation of proxies. The business address of each
such employee is 105 Madison Avenue, New York, New York 10016, and the telephone
number of each such person is (212) 929-5500. Each person listed below is a
citizen of the United States.
NAME TITLE
Daniel H. Burch Chief Executive Officer
Lawrence Dennedy Executive Vice President
Robert C. Marese Vice President
PARTICIPANT OWNERSHIP OF AND TRANSACTIONS IN THE COMPANY'S SECURITIES
Other than as disclosed in this Proxy Statement, neither JANA nor, to
the knowledge of JANA, any of the participants: (1) owns beneficially, directly
or indirectly, or of record but not beneficially, any securities of the Company;
(2) owns beneficially, directly or indirectly, or of record but not
beneficially, any securities of any subsidiary of the Company; or (3) is, or was
since January 1, 2003, a party to any contract, arrangement or understanding
with any person with respect to any securities of the Company, including, but
not limited to, joint ventures, loan or option arrangements, puts or calls,
guarantees against loss or guarantees of profit, division of losses or profits,
or the giving or withholding of proxies. JANA's participants disclaim beneficial
ownership of any securities of the Company owned by JANA, and this Proxy
Statement shall not be deemed an admission that any participant is the
beneficial owner of such securities for any purpose.
The following table sets forth the name of each participant who
purchased or sold the Company's common stock within the previous two years, the
date of the transaction and the amount purchased or sold:
26
Shares of Common Stock
Purchased Price Per Share Date of Purchase
JANA PARTNERS LLC
218, 610 $12.3390 03/10/04
160,000 $12.7084 03/11/04
50,000 $12.4533 03/12/04
80,000 $11.9757 03/15/04
67,600 $11.4782 02/23/04
201,027 $10.7546 03/24/04
50,000 $10.8500 03/25/04
112,700 $11.6988 03/30/04
95,400 $12.0020 03/31/04
176,200 $12.2856 04/01/04
173,900 $12.4782 04/02/04
150,500 $12.4860 04/05/04
84,000 $12.8200 04/07/04
20,000 $12.9000 04/12/04
156,500 $14.7800 05/11/04
14,200 $13.7296 05/19/04
48,000 $13.5900 05/20/04
31,100 $14.4834 05/21/04
25,000 $15.0011 05/25/04
As of May 26, 2004, JANA Partners LLC beneficially owned, through various
accounts under its management and control, 1,914,737 shares of the Company's
common stock (including options and units exercisable for or convertible into
common stock), or 9.4% of the Company's outstanding common stock. The record
date for the Annual Meeting is April 15, 2004.
COST OF SOLICITATION
JANA intends to seek reimbursement for the cost of this solicitation,
including the costs of the reimbursements described below, from the Company if
any of its nominees are elected as directors or if any of the bylaw amendment
proposals are approved at the Annual Meeting. Additionally, JANA intends to seek
reimbursement for its litigation costs incurred as a result of its nomination of
directors, proposals to amend the bylaws and related matters. JANA does not
intend to seek shareholder approval for such reimbursement. While no precise
estimate of this cost can be made at the present time, JANA currently estimates
that it will spend a total of approximately $[ ] for its solicitation of
proxies, including expenditures for attorneys, solicitors and advertising,
public relations, printing, transportation and related expenses, and
approximately $[ ] in connection with litigation. As of May [ ], 2004, JANA had
incurred proxy solicitation expenses of approximately $[ ], and litigation
expenses of approximately $[ ]. In addition to soliciting proxies by mail,
proxies may be solicited in person or by telephone or telecopy or through
advertisements. Information regarding certain representatives of JANA who may
solicit or participate in the solicitation of proxies is set forth above under
the heading "INFORMATION CONCERNING PERSONS WHO MAY SOLICIT PROXIES".
27
Additionally, JANA will reimburse brokers, fiduciaries, custodians and
other nominees, as well as persons holding stock for others who have the right
to give voting instructions, for out-of-pocket expenses incurred in forwarding
this Proxy Statement and related materials to, and obtaining instructions or
authorizations relating to such materials from, beneficial owners of the
Company's common stock. JANA will pay for the cost of these solicitations, but
these individuals will receive no additional compensation for these solicitation
services.
JANA has retained the proxy solicitation firm of MacKenzie Partners,
Inc. in connection with the solicitation of proxies for the Annual Meeting.
MacKenzie will be paid a customary fee for its services, and will produce and
place all advertising copy at regular open-line rates. JANA also has agreed to
reimburse MacKenzie for its expenses, and to indemnify MacKenzie against certain
liabilities and claims, incurred in connection with its performance of services
pursuant to its engagement by JANA.
SHAREHOLDER PROPOSALS FOR 2005 ANNUAL MEETING
Information regarding the requirements for shareholders to submit
proposals to the Company for the 2005 annual meeting is contained in the
Company's proxy statement furnished to shareholders in connection with the
Annual Meeting.
ADDITIONAL INFORMATION
Certain information as to the number and percentage of outstanding
shares beneficially owned by (i) each of the Company's directors, (ii) each
named executive officer of the Company,(iii) each person known to the Company to
own more than 5% of the Company's common stock and (iv) all executive officers
and directors of the Company as a group, is contained in the Company's proxy
statement furnished to shareholders in connection with the Annual
Meeting.
Certain of the information contained in this Proxy Statement is based
on publicly available information filed by the Company with the SEC.
JANA is not aware of any other substantive matters to be considered at
the Annual Meeting. However, if any other matter should properly come before the
Annual Meeting, then JANA's representatives will vote all proxies held by them
in accordance with their best judgment and consistent with the federal proxy
rules.
QUESTIONS CONCERNING THIS PROXY STATEMENT OR THE
ACCOMPANYING GOLD PROXY CARD SHOULD BE DIRECTED TO:
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---------------------------------
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
(800) 322-2885
----------------------------------
IMPORTANT
1. Your proxy is important no matter how many shares of the Company's
common stock you own. Be sure to vote on the GOLD proxy card. JANA
urges you NOT to sign any proxy card which is sent to you by InterCept.
2. If you have already submitted a proxy card to InterCept for the 2004
Annual Meeting, you may change your vote to a vote "FOR" the election
of JANA's two nominees and approval of JANA's proposals by completing,
signing, dating and returning JANA's GOLD proxy card, which must be
dated after any proxy card you may previously have submitted to
InterCept. Only your last dated proxy card for the Annual Meeting will
count at the Annual Meeting.
3. If any of your shares are held in the name of a bank, broker or other
nominee, please contact the person responsible for your account and
direct him or her to vote on the GOLD proxy card "FOR" the election of
JANA's nominees.
4. If you hold your shares in more than one type of account or your shares
are registered differently, you may receive more than one GOLD proxy
card. We encourage you to vote each GOLD proxy card that you receive.
5. If you have any questions or need assistance in voting your shares,
please contact our proxy solicitors, MacKenzie Partners, Inc., at the
number set forth below:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
(800) 322-2885
29
SCHEDULE I
FULL TEXT OF PROPOSAL 2
BE IT HERBY RESOLVED, that Section 3.3 of the Bylaws is amended and
restated in its entirety as follows: "The entire Board of Directors or any
individual director may be removed with or without cause by the
shareholders, provided that directors elected by a particular Voting Group
may be removed with or without cause only by the shareholders in that
Voting Group. Removal action may be taken only at a shareholders' meeting
for which notice of the removal action has been given, and a director may
be removed only by the holders of at least a majority of the votes entitled
to be cast. If any removed director is a member of any committee of the
Board of Directors, he shall cease to be a member of that committee when he
ceases to be a director. A removed director's successor, if any, may be
elected at the same meeting to serve the unexpired term. The Board of
Directors may not amend or repeal or adopt any bylaw provision inconsistent
with this Section 3.3."
Current Section 3.3 of the Company's Bylaws:
"The entire Board of Directors or any individual director may be removed
with cause by the shareholders, provided that directors elected by a
particular Voting Group may be removed only by the shareholders in that
Voting Group. Removal action may be taken only at a shareholders' meeting
for which notice of the removal action has been given, and a director may
be removed only by the holders of 66 2/3% of the votes entitled to be cast.
If any removed director is a member of any committee of the Board of
Directors, he shall cease to be a member of that committee when he ceases
to be a director. A removed director's successor, if any, may be elected at
the same meeting to serve the unexpired term. Directors may not be removed
without cause.
FULL TEXT OF PROPOSAL 3
BE IT HERBY RESOLVED, that the second sentence of Section 3.4 of the Bylaws
is amended and restated in its entirety as follows: "Any vacancy occurring
on the Board of Directors, including a vacancy resulting from an increase
in the number of directors, shall be filled by the shareholders at a
30
shareholders' meeting called for such purpose, or if the shareholders fail
to act to fill the vacancy at such shareholders' meeting, by the Board of
Directors, even if the remaining directors constitute less than a quorum of
the Board of Directors; PROVIDED, HOWEVER, that if the vacant office was
held by a director elected by a particular Voting Group, only the holders
of shares of that Voting Group or, if such holders fail to act to fill the
vacancy at a shareholders' meeting called for such purpose, the remaining
directors elected by that Voting Group shall be entitled to fill the
vacancy; PROVIDED FURTHER, HOWEVER, that if the vacant office was held by a
director elected by a particular Voting Group AND there is no remaining
director elected by that Voting Group, the other remaining directors or
director (elected by another Voting Group or Groups) may fill the vacancy
if the shareholders of the vacated director's Voting Group fail to act to
fill the vacancy at a shareholders' meeting called for such purpose;
PROVIDED FURTHER, HOWEVER, that notwithstanding the foregoing, a vacancy
occurring as a result of a removal of a director with or without cause
shall be filled exclusively by the shareholders or, if applicable, holders
of shares of a particular Voting Group, at a shareholders' meeting called
for such purpose. The Board of Directors may not amend or repeal or adopt
any bylaw provision inconsistent with the previous sentence of this Section
3.4."
Current Section 3.4 of the Company's bylaws:
"A vacancy or vacancies in the Board of Directors may result from the
death, resignation, disqualification, or removal of any director, or from
an increase in the number of directors. Any vacancy occurring on the Board
of Directors, including a vacancy resulting from an increase in the number
of directors, may only be filled by the affirmative vote of the remaining
directors, even if the remaining directors constitute less than a quorum of
the Board of Directors; PROVIDED, HOWEVER, that if the vacant office was
held by a director elected by a particular Voting Group, only the holders
of shares of that Voting Group or the remaining directors elected by that
Voting Group shall be entitled to fill the vacancy; PROVIDED FURTHER,
HOWEVER, that if the vacant office was held by a director elected by a
particular Voting Group AND there is no remaining director elected by that
Voting Group, the other remaining directors or director (elected by another
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Voting Group or Groups) may fill the vacancy during an interim period
before the shareholders of the vacated director's Voting Group act to fill
the vacancy. In accordance with Section 14-2-805(d) of the Georgia Business
Corporation Code, a director elected to fill a vacancy: (i) in an existing
director position shall be elected for the unexpired term of the
predecessor in office of such director position; and (ii) in a new director
position created by reason of an increase in the number of directors shall
be elected until the next election of directors by the shareholders if such
vacancy is filled by the Board of Directors, and in each case until
election and qualification of the successor to such director."
FULL TEXT OF PROPOSAL 4
BE IT HERBY RESOLVED, that the first sentence of Section 2.3 of the Bylaws
is amended and restated in its entirety as follows: "Special meetings of
shareholders of one or more classes or series of the Corporation's shares
may be called at any time by the Board of Directors, the Chairman of the
Board, or the President, and shall be called by the Corporation upon the
written request (in compliance with applicable requirements of the Code) of
the holders of shares representing ten percent (10%) or more of the votes
entitled to be cast on each issue proposed to be considered at the special
meeting. The Board of Directors may not amend or repeal or adopt any bylaw
provision inconsistent with the previous sentence of this Section 2.3."
Current Section 2.3 of the Company's bylaws:
"Special meetings of shareholders of one or more classes or series of
the Corporation's shares may be called at any time by the Board of Directors,
the Chairman of the Board, or the President, and shall be called by the
Corporation upon the written request (in compliance with applicable requirements
of the Code) of the holders of shares representing twenty-five percent (25%) or
more of the votes entitled to be cast on each issue proposed to be considered at
the special meeting; provided, however, that at any time the Corporation has
more than 100 beneficial owners (as defined in Section 14-2-1110 of the Code) of
its shares, such written request must be made by holders of a majority of such
votes. The business that may be transacted at any special meeting of
shareholders shall be limited to that proposed in the notice of the special
meeting given in accordance with Section 2.4 (including related or incidental
matters that may be necessary or appropriate to effectuate the proposed
business)."
32
GOLD PROXY
PRELIMINARY COPY
SUBJECT TO COMPLETION
DATED MAY 26, 2004
INTERCEPT, INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 24, 2004
THIS PROXY IS SOLICITED ON BEHALF OF JANA PARTNERS LLC AND
NOT ON BEHALF OF THE BOARD OF INTERCEPT, INC.
The undersigned hereby constitutes and appoints Marc Weisman and
Kevin J. Lynch (the "Proxy Representatives"), and each or either of them,
as true and lawful agents, attorneys and proxy or proxies of the undersigned
with full power of substitution and revocation in each, to represent and vote
all of the shares of common stock and Series A Preferred Stock of InterCept,
Inc., a Georgia corporation, which the undersigned may be entitled to vote at
the Annual Meeting of Shareholders of InterCept, Inc. to be held on June 24,
2004, at the Hilton Atlanta Northeast, 5993 Peachtree Industrial Boulevard,
Norcross, Georgia, 30092, beginning at 8:30 a.m. local time, and at any
adjournments, postponements or reschedulings thereof, as shown on the voting
side of this card.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF A CHOICE IS NOT SPECIFIED,
THIS PROXY WILL BE VOTED FOR JANA PARTNERS LLC'S NOMINEES AS DIRECTORS AND FOR
JANA'S PROPOSALS, EACH AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT OF JANA
PARTNERS LLC.
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
33
GOLD PROXY
THIS PROXY IS BEING SOLICITED ON BEHALF OF JANA PARTNERS LLC AND NOT ON
BEHALF OF THE BOARD OF INTERCEPT, INC. JANA PARTNERS LLC RECOMMENDS A VOTE FOR
THE ELECTION OF ITS NOMINEES AS DIRECTORS, BY CHECKING THE FIRST BOX BELOW
MARKED "FOR ALL NOMINEES" AND "FOR" EACH OF PROPOSALS 2, 3 AND 4.
NONE OF THE FOLLOWING PROPOSALS ARE CONDITIONED UPON OR RELATED TO THE
APPROVAL OF OTHER PROPOSALS.
PLEASE MARK YOUR VOTE AS INDICATED IN THIS EXAMPLE: [X]
1. Proposal to elect Kevin J. Lynch and Marc Weisman as Class III Directors to
serve until the 2007 Annual Meeting of Shareholders
[ ] FOR ALL NOMINEES
[ ] WITHHOLD AUTHORITY FOR ALL NOMINEES
[ ] FOR ALL NOMINEES EXCEPT:
-------------------------------------------
INSTRUCTION: To withhold authority to vote for any individual nominee(s), write
that nominee's or nominees' name in the space provided above.
2. Proposal to give holders of a majority of shares power to remove directors
with or without cause.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
JANA recommends a vote "FOR" this proposal.
3. Proposal to let shareholders fill vacancies on the Board of Directors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
JANA recommends a vote "FOR" this proposal.
4. Proposal to lower the requirement to call special meetings to 10% of shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
JANA recommends a vote "FOR" this proposal.
5. In the discretion of the Proxy Representatives, the Proxy Representatives,
and each or either of them, are authorized to vote upon such other business
as may properly come before the Annual Meeting or any adjournment,
postponement or rescheduling thereof.
34
Dated ________________________, 2004
------------------------------
(Signature)
------------------------------
(Signature if held jointly)
------------------------------
(Title or Titles)
NOTE: This proxy should be signed exactly as the name or names appears
hereon. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation, please
sign full corporate name by a duly authorized officer, giving full
title as such. If the signer is a partnership, please sign in
partnership name by a duly authorized person.
35