AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 12, 2002
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NETEGRITY, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE
(State or other jurisdiction of
incorporation or organization)
04-2911320
(I.R.S. Employer
Identification No.)
52 SECOND AVENUE
WALTHAM, MA 02451
(781) 890-1700
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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BARRY BYCOFF
CHIEF EXECUTIVE OFFICER
NETEGRITY, INC.
52 SECOND AVENUE
WALTHAM, MA 02451
(781) 890-1700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
JOHN A. BURGESS, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
TELEPHONE: (617) 526-6000
TELECOPY: (617) 526-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] 333-
---------------.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] 333-
---------------.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
TITLE OF SHARES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE
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Common Stock, $.01 par value per share....... 2,499,968 $13.62 $34,049,564 $3,133
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act and based upon the average of the
high and low prices on the Nasdaq National Market on February 8, 2002.
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
SHALL DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS MAY NOT SELL THESE SECURITIES
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND THE SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS ARE NOT
SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED FEBRUARY 12, 2002
PROSPECTUS
NETEGRITY, INC.
2,499,968 SHARES OF COMMON STOCK
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This prospectus relates to resales of shares of common stock that we
previously issued to the former shareholders of DataChannel, Inc. in connection
with our acquisition of that company.
We will not receive any proceeds from the sale of the shares.
The selling stockholders identified in this prospectus, or their pledgees,
donees, transferees or other successors-in-interest, may offer the shares from
time to time through public or private transactions at prevailing market prices,
at prices related to prevailing market prices or at privately negotiated prices.
Our common stock is traded on the Nasdaq National Market under the symbol
"NETE." On February 8, 2002, the closing sale price of the common stock on
Nasdaq was $13.59 per share. You are urged to obtain current market quotations
for the common stock.
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INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 2.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is , 2002.
TABLE OF CONTENTS
PAGE
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Prospectus Summary.......................................... 1
Netegrity, Inc.............................................. 1
The Offering................................................ 1
Recent Developments......................................... 1
Risk Factors................................................ 2
Special Note Regarding Forward-Looking Information.......... 7
Use Of Proceeds............................................. 8
Selling Stockholders........................................ 8
Plan of Distribution........................................ 11
Legal Matters............................................... 12
Experts..................................................... 12
Where You Can Find More Information......................... 12
Incorporation Of Certain Documents By Reference............. 13
Netegrity, Inc.'s executive offices are located at 52 Second Avenue,
Waltham, Massachusetts 02451, our telephone number is (781) 890-1700 and our
Internet address is www.netegrity.com. The information on our Internet website
is not incorporated by reference in this prospectus. Unless the context
otherwise requires references in this prospectus to "Netegrity," "we," "us," and
"our" refer to Netegrity, Inc. and its subsidiaries.
"Netegrity" and "SiteMinder" are our registered trademarks.
We have not authorized anyone to provide you with information different
from that contained or incorporated by reference in this prospectus. The selling
stockholders are offering to sell, and seeking offers to buy, shares of our
common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of common stock.
i
PROSPECTUS SUMMARY
This summary highlights important features of this offering and the
information included or incorporated by reference in this prospectus. This
summary does not contain all of the information that you should consider before
investing in our common stock. You should read the entire prospectus carefully,
especially the risks of investing in our common stock discussed under "Risk
Factors."
NETEGRITY, INC.
We are a leading provider of solutions for securely managing e-business
relationships. Our solutions are used to secure, deliver and present documents,
data, and applications through business-to-business, business-to-consumer, and
Intranet portals. Our SiteMinder and Interaction Server products are part of the
software infrastructure that is used to build and manage interactive e-business
web sites. We call this infrastructure the Secure Relationship Management
Platform. SiteMinder products manage the complex process of identifying users
and assigning those users entitlements to multiple e-business applications.
These assigned entitlements determine what information a user can see and what
transactions a user can perform on the web site. SiteMinder products enable our
customers to centrally control access to e-business portals requiring secure
log-in, while distributing the administrative responsibilities to the most
appropriate parties. With Interaction Server technology, customers can create
personalized portals which quickly extend essential information and applications
to employees, partners, and customers. Interaction Server portals use SiteMinder
security functions to provide access control, single sign-on, and entitlement
management capabilities. Interaction Server technology also includes portlets,
or software components, providing connection between Interaction Server portals
and standard enterprise applications such as enterprise resource planning and
customer relationship management. Both SiteMinder and Interaction Server
products are designed to be scalable and reliable, to integrate with our
customers' existing systems and to accommodate emerging Internet technology. We
also offer a wide range of consulting and support services that enable our
customers to successfully implement our products into their organizations.
THE OFFERING
Common Stock offered by
selling stockholders.......... 2,499,968 shares
Use of proceeds............... We will not receive any proceeds from the sale
of shares in this offering
Nasdaq National Market
symbol........................ NETE
RECENT DEVELOPMENTS
On January 30, 2002, we announced the following financial results for the
fourth quarter and year ended December 31, 2001:
Revenues were $19.1 million for the fourth quarter of 2001, a 14% increase
over revenues of $16.7 million for the third quarter of 2001. Non cash software
amortization charges were $153,000 and non-recurring acquired in-process
research and development charges were $3.0 million. Including the after-tax
effect of these charges, the reported net loss for the fourth quarter of 2001
was $(2.4) million or ($0.08) per diluted share.
Revenues for the year ended December 31, 2001 were $86.6 million, a 60%
increase over revenues of $54.0 million for the year ended December 31, 2000.
The inclusion of non-cash software amortization and non-recurring acquired
in-process research and development charges related to the acquisition of
DataChannel resulted in net income of $1.6 million or $0.05 per diluted share
for the year ended December 31, 2001 as compared to net income of $2.7 million
or $0.08 per diluted share for the year ended December 31, 2000.
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RISK FACTORS
Investing in our common stock involves a degree of risk. You should
carefully consider the risks and uncertainties described below before purchasing
our common stock. The risks and uncertainties described below are not the only
risks facing our company. Additional risks and uncertainties not currently known
or that we currently believe to be immaterial may also impair our business
operations. If any of the following risks actually occur, our business,
financial condition or results of operations would likely suffer. In that case,
the trading price of our common stock could fall, and you may lose all or part
of your investment.
WE HAVE INCURRED SUBSTANTIAL LOSSES AND MAY NOT BE PROFITABLE IN THE
FUTURE.
In recent years, we have incurred substantial losses. We cannot predict if
we will achieve profitability for any substantial period of time. Failure to
maintain levels of profitability as expected by investors may adversely affect
the market price of our common stock. In the year ended December 31, 2001, we
had net income of $1.6 million. As a result of historical operating losses, at
December 31, 2001, we had an accumulated deficit of approximately $20.4 million.
DISAPPOINTING QUARTERLY RESULTS COULD CAUSE THE MARKET PRICE OF OUR COMMON
STOCK TO FALL SUBSTANTIALLY.
Our quarterly revenues and operating results are difficult to predict and
may fluctuate significantly from quarter to quarter. If our quarterly revenues
or operating results fall below the expectations of investors, the price of our
common stock could fall substantially.
Our quarterly revenues may fluctuate for several reasons, including the
following:
- customers choosing to delay their purchase commitments or purchase in
smaller than expected quantities due to a general slowdown in the
economy;
- market acceptance of our Interaction Server, SiteMinder and related
products;
- our success in obtaining follow-on sales to existing customers;
- the long sales and deployment cycle of our products;
- our ability to hire and retain personnel, particularly in development,
services and sales and marketing;
- the release of new versions of SiteMinder or other products; and
- the development of our direct and indirect sales channels.
In addition, because our revenues from services are largely correlated with
our software revenues, a decline in software revenues could also cause a decline
in our services revenues in the same quarter or in subsequent quarters. Other
factors, many of which are outside our control, could also cause variations in
our quarterly revenues and operating results.
Most of our expenses, such as employee compensation and rent, are
relatively fixed. Moreover, our expense levels are based, in part, on our
expectations regarding future revenue increases. We expect to continue to invest
in all areas, particularly in research and development and sales and marketing,
in order to execute our business plan. As a result, any shortfall in revenues in
relation to our expectations could cause significant changes in our operating
results from quarter to quarter and could result in future losses.
OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO MARKET OUR PRODUCTS AND
RELATED SERVICES SUCCESSFULLY.
We currently derive a substantial majority of our total revenues from the
sale of SiteMinder licenses and related products and services. Commercial
deployments of SiteMinder products have grown to include not only
business-to-business and e-business applications, but large intranet and
multi-million user business-to consumer deployments, as well. Broad market
acceptance of our products will depend on the development of the market for
access control and identity management, including usage of our products for
software business-to-consumer applications, and customer demand for the specific
functionality of our products. Market acceptance for our products, and customer
demand for the services they provide, may not develop.
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Our ability to develop the market for our products depends in part on our
ability to provide support service on a 24 hour per day/7 days per week basis.
Any damage or disruptions to our service centers, including the recently opened
service center in Malaysia, whether as a result of terrorism or some other
cause, could seriously impact our ability to provide the necessary service to
our customers and fulfill our service contracts.
There are currently very few commercial deployments of our Interaction
Server. Broad market acceptance of Interaction Server and related services will
depend on continued development of the enterprise portal market, and consequent
customer demand for the specific functionality of Interaction Server. If we fail
in marketing our products and services, for whatever reason, our business will
be harmed.
OUR SUCCESS IS DEPENDENT ON OUR ABILITY TO ENHANCE OUR PRODUCT LINES AND
DEVELOP NEW PRODUCTS.
We believe our success is dependent, in large part, on our ability to
enhance and broaden our product lines to meet the evolving needs of both the
business-to-business intranet and business-to-consumer market. We may be unable
to respond effectively to technological changes or new industry standards or
developments. In the past, we have been forced to delay introduction of several
new product versions. In the future, we could be adversely affected if we incur
significant delays or are unsuccessful in enhancing our product lines or
developing new products, or if any of our enhancements or new products do not
gain market acceptance.
OUR PERFORMANCE DEPENDS ON OUR ABILITY TO OBTAIN FOLLOW-ON SALES.
Customers typically place small initial orders for a Netegrity product
installation to allow them to evaluate its performance. Our strategy is to
pursue more significant follow-on sales after these initial installations. Our
financial performance depends on successful initial deployments of our products
that, in turn, lead to follow-on sales. If the initial deployments of our
products are not successful, we may be unable to obtain follow-on sales.
WE FACE SIGNIFICANT COMPETITION FROM OTHER TECHNOLOGY COMPANIES AND WE MAY
NOT BE ABLE TO COMPETE EFFECTIVELY.
The market for access control, identity management and portal products and
services is highly competitive. We expect the level of competition to increase
as a result of the anticipated growth of e-business. Our primary competitors
include IBM, RSA/Securant, Entrust, Open Network Technology, Plumtree,
Epicentric, BEA, Oblix and many early-stage companies. In addition, a number of
other security and software companies have indicated that they offer products
which may compete with ours. We also face competition from web development
professional services organizations. We expect that additional competitors will
emerge in the future. Current and potential competitors have established, or may
in the future establish, cooperative relationships with third parties to
increase the availability of their products to the marketplace. It is possible
that new competitors or alliances may emerge and rapidly acquire significant
market share. Potential competitors may have significantly greater financial,
marketing, technical and other competitive resources than we have. If, in the
future, a competitor chooses to bundle a competing secure user management
product with other e-commerce applications, the demand for our products might be
substantially reduced. Because of these factors, many of which are out of our
control, we may be unable to maintain or enhance our competitive position
against current and future competitors.
REGULATIONS OR CONSUMER CONCERNS REGARDING THE USE OF "COOKIES" ON THE
INTERNET COULD REDUCE THE EFFECTIVENESS OF OUR SITEMINDER PRODUCTS.
Our SiteMinder products use cookies to support their single sign-on
functionality. A cookie is information keyed to a specific user that is stored
on the hard drive of the user's computer, typically without the user's
knowledge. Cookies are generally removable by the user, and can be refused by
the user at the point at which the information would be stored on the user's
hard drive. A number of governmental bodies and commentators in the United
States and abroad have urged passage of laws limiting or abolishing the use of
cookies. The passage of laws limiting or abolishing the use of cookies, or the
widespread deletion or refusal of cookies by web site users, could reduce or
eliminate the effectiveness of SiteMinder's single sign-on functionality and
could reduce market demand for our SiteMinder products.
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WE MAY BE UNABLE TO HIRE AND RETAIN SKILLED PERSONNEL.
Qualified personnel are in great demand throughout the software industry.
Our success depends, in large part, upon our ability to attract, train, motivate
and retain highly skilled employees, particularly software engineers,
professional services personnel, sales and marketing personnel and other senior
personnel. Our failure to attract and retain the highly trained technical
personnel that are integral to our product development, professional services
and direct sales teams may limit the rate at which we can generate sales and
develop new products or product enhancements. This could have a material adverse
effect on our business, operating results and financial condition.
OUR SUCCESS DEPENDS ON OUR ABILITY TO DEVELOP OUR DIRECT SALES AND INDIRECT
DISTRIBUTION CHANNELS.
To increase our revenues, we must develop our direct sales channel and
increase the number of our indirect channel partners. There is intense
competition for sales personnel in our business, and we cannot be sure that we
will be successful in attracting, integrating, motivating and retaining sales
personnel. In addition, we must increase the number of strategic partnerships
and other third-party relationships with system integrators, vendors of
Internet-related systems and application software and resellers. Our existing,
or future, channel partners may choose to devote greater resources to marketing
and supporting the products of other companies or conflicts may develop among
our sales force and channel partners. If we fail to develop these relationships
or these relationships do not result in successful partnerships, our revenue
could suffer.
WE RELY ON THIRD PARTY TECHNOLOGY TO ENHANCE OUR PRODUCTS.
We incorporate into our products software licensed from third-party
software developers that enhance and enable the functionality of our product.
Third-party software may not continue to be available on commercially reasonable
terms or with acceptable levels of support, or at all. Failure to maintain those
license arrangements or defects and errors in those third-party products could
delay or impair our ability to develop and sell our products.
OUR FAILURE TO EXPAND OUR PROFESSIONAL SERVICES RESOURCES COULD LIMIT OUR
ABILITY TO INCREASE OUR PRODUCT SALES.
Our professional services organization and our system integrators provide
critical support to our customers' installation and deployment of our products.
If we fail to expand our professional services resources and/or adequately
develop our system integrator relationships, our ability to increase products
sales may be limited. In addition, if we cannot adequately support product
installations, our customers' use of our products may fail, which could harm our
reputation and hurt our business.
OUR LENGTHY SALES CYCLE MAKES IT DIFFICULT TO PREDICT OUR QUARTERLY
OPERATING RESULTS.
We have a long sales cycle because we generally need to educate potential
customers regarding the use and benefits of our products. The length of our
sales cycle varies depending on the size and type of customer contemplating a
purchase and whether we have conducted business with a potential customer in the
past. In addition, these potential customers frequently need to obtain approvals
from multiple decision makers prior to making purchase decisions. Our long sales
cycle, which can range from several weeks to several months or more, makes it
difficult to predict the quarter in which sales will occur. Delays in sales
could cause significant variability in our revenues and operating results for
any particular period.
OUR FAILURE TO MANAGE OUR RAPID GROWTH EFFECTIVELY COULD HURT OUR BUSINESS.
Our failure to manage our rapid growth effectively could have a material
adverse effect on the quality of our products, our ability to retain key
personnel and our business, operating results and financial condition. We have
been experiencing a period of rapid growth that has been placing a significant
strain on all of our resources. From December 31, 2000 to December 31, 2001, we
increased the number of our employees from 292 to 486. We may experience similar
growth in the future. To manage recent and future growth effectively we must
maintain and enhance our financial and accounting systems and controls,
integrate new personnel and manage expanded operations.
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IF WE LOSE THE SERVICES OF BARRY BYCOFF OR ANY OTHER MEMBER OF OUR
MANAGEMENT TEAM, OUR BUSINESS COULD SUFFER.
Our future success depends, to a significant degree, on the skill,
experience and efforts of Barry Bycoff, our chief executive officer, and the
rest of our management team. The loss of any member of our management team or
the inability of our officers and key employees to work effectively as a team
could have a material adverse effect on our business, operating results and
financial condition.
AS WE CONTINUE TO EXPAND OUR INTERNATIONAL OPERATIONS, WE WILL FACE
CONTINUED RISKS TO OUR SUCCESS.
We intend to continue to expand our international operations in the future.
This expansion will require additional resources and management attention, and
will subject us to increased regulatory, economic and political risks. We have
limited experience in international markets and we cannot be sure that our
continued expansion into global markets will be successful. In addition, we will
face increased risks in conducting business internationally. These risks could
reduce demand for our products and services, increase the prices at which we can
sell our products and services, or otherwise have an adverse effect on our
operating results. Among the risks we believe are most likely to affect us are:
- longer decision making cycles;
- longer payment cycles and problems in collecting accounts receivable;
- adverse changes in trade and tax regulations, including restrictions on
the import and export of sensitive technologies, such as encryption
technologies, that we use or may wish to use in our software products;
- the absence or significant lack of legal protection for intellectual
property rights;
- difficulties in managing an organization spread over several countries,
including complications arising from cultural, language and time
differences that may lengthen sales and implementation cycles;
- currency risks, including fluctuations in exchange rates;
- political and economic instability;
- increased use of contractors on a global basis for both professional
services and development work, as business requirements dictate, which
may result in increased cost of services and/or less control; and
- disruptions caused by terrorist activities in various regions around the
world.
OUR SUCCESS DEPENDS ON OUR ABILITY TO PROTECT OUR PROPRIETARY RIGHTS.
Our success depends to a significant degree upon the protection of our
software and other proprietary technology. The unauthorized reproduction or
other misappropriation of our proprietary technology could enable third parties
to benefit from our technology without paying us for it. This could have a
material adverse effect on our business, operating results and financial
condition. We depend upon a combination of patent, trademark, trade secret and
copyright laws, license agreements and non-disclosure and other contractual
provisions to protect proprietary and distribution rights in our products. In
addition, we attempt to protect our proprietary information and the proprietary
information of our vendors and partners through confidentiality and/or license
agreements with our employees and others. Although we have taken steps to
protect our proprietary technology, they may be inadequate. Existing trade
secret, copyright and trademark laws offer only limited protection. Moreover,
the laws of other countries in which we market our products may afford little or
no effective protection of our intellectual property. If we resort to legal
proceedings to enforce our intellectual property rights, the proceedings could
be burdensome and expensive, even if we were to prevail.
CLAIMS BY OTHER COMPANIES THAT WE INFRINGE THEIR PROPRIETARY TECHNOLOGY
COULD HURT OUR FINANCIAL CONDITION.
If we discover that any of our products violated third party proprietary
rights, there can be no assurance that we would be able to reengineer our
product or to obtain a license on commercially reasonable terms to continue
offering the product without substantial reengineering. We do not conduct
comprehensive patent searches to determine whether the technology used in our
products infringes patents held by third parties. In
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addition, product development is inherently uncertain in a rapidly evolving
technology environment in which there may be numerous patent applications
pending for similar technologies, many of which are confidential when filed. Any
claim of infringement, even if invalid, could cause us to incur substantial
costs defending against the claim and could distract our management from our
business. Furthermore, a party making such a claim could secure a judgment that
requires us to pay substantial damages. A judgment could also include an
injunction or other court order that could prevent us from selling our products.
Any of these events could have a material adverse effect on our business,
operating results and financial condition.
OUR BUSINESS COULD BE ADVERSELY AFFECTED IF OUR PRODUCTS CONTAIN ERRORS.
Software products as complex as ours may contain undetected errors or
"bugs" that result in product failures. The occurrence of errors could result in
loss of, or delay in, revenues, loss of market share, failure to achieve market
acceptance, diversion of development resources, injury to our reputation, or
damage to our efforts to build brand awareness, any of which could have a
material adverse effect on our business, operating results and financial
condition.
WE COULD INCUR SUBSTANTIAL COSTS RESULTING FROM PRODUCT LIABILITY CLAIMS
RELATING TO OUR CUSTOMERS' USE OF OUR PRODUCTS.
Many of the e-commerce applications supported by our products are critical
to the operations of our customers' businesses. Any failure in a customer's web
site or application caused or allegedly caused by our products could result in a
claim for substantial damages against us, regardless of our responsibility for
the failure. Although we maintain general liability insurance, including
coverage for errors and omissions, we cannot be sure that our existing coverage
will continue to be available on reasonable terms or will be available in
amounts sufficient to cover one or more large claims, or that the insurer will
not disclaim coverage as to any future claim.
OUR ACQUISITION OF OTHER COMPANIES MAY INCREASE THE RISKS WE FACE.
On December 14, 2001, we acquired DataChannel, Inc., a privately held
Washington corporation. In the future, we may pursue other acquisitions to
obtain complementary products, services and technologies. DataChannel and any
such other acquisition may not produce the revenues, earnings or business
synergies that we anticipated, and an acquired product, service or technology
might not perform as we expected. In pursuing any acquisition, our management
could spend a significant amount of time and effort in identifying and
completing the acquisition. If we complete an acquisition, we would probably
have to devote a significant amount of management resources to integrate the
acquired business with our existing business. To pay for an acquisition, we
might use our stock or cash. Alternatively, we might borrow money from a bank or
other lender. If we use our stock, our stockholders would experience dilution of
their ownership interests. If we use cash or debt financing, our financial
liquidity will be reduced.
THE MARKET PRICE OF OUR COMMON STOCK HAS BEEN AND MAY CONTINUE TO BE
VOLATILE.
Our stock price, like that of other technology companies, has been
extremely volatile. The announcement of new products, services, technological
innovations or distribution partners by us or our competitors, quarterly
variations in our operating results, changes in revenues or earnings estimates
by securities analysts and speculation in the press or investment community are
among the factors affecting our stock price.
The stock market in general, and the market prices for Internet-related
companies in particular, have experienced extreme volatility that often has been
unrelated to the operating performance of these companies. These broad market
and industry fluctuations may adversely affect the market price of our common
stock, regardless of our operating performance. Recently, when the market price
of a stock has been volatile, holders of that stock have often instituted
securities class action litigation against the company that issued the stock. If
any of our stockholders brought a lawsuit against us, we could incur substantial
costs defending the lawsuit. The lawsuit could also divert the time and
attention of our management.
The events of September 11, 2001 and their aftermath have also caused
significant volatility in the stock markets. The continued threat of terrorism
in the United States and abroad, the resulting military action and
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heightened security measures undertaken in response to that threat can be
expected to cause continued volatility in securities markets.
WE MAY LOSE MONEY ON FIXED-PRICE CONSULTING CONTRACTS.
In the future, an increased portion of our services revenues may be derived
from fixed-price contracts. We work with complex technologies in compressed time
frames and it can be difficult to judge the time and resources necessary to
complete a project. If we miscalculate the resources or time we need to complete
work under fixed-price contracts, our operating results could be materially
harmed.
CERTAIN PROVISIONS OF OUR CHARTER AND OF DELAWARE LAW MAKE A TAKEOVER OF
OUR COMPANY MORE DIFFICULT.
Our corporate documents and Delaware law contain provisions that might
enable our management to resist a takeover of our company. These provisions
might discourage, delay or prevent a change in the control of Netegrity or a
change in our management. These provisions could also discourage proxy contests
and make it more difficult for you and other stockholders to elect directors and
take other corporate actions. The existence of these provisions could limit the
price that investors might be willing to pay in the future for shares of our
common stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This prospectus includes and incorporates forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included or incorporated in this prospectus
regarding our strategy, future operations, financial position, future revenues,
projected costs, prospects, plans and objectives of management are
forward-looking statements. The words "anticipates," "believes," "estimates,"
"expects," "intends," "may," "plans," "projects," "will," "would" and similar
expressions are intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words. We cannot
guarantee that we actually will achieve the plans, intentions or expectations
disclosed in our forward-looking statements and you should not place undue
reliance on our forward-looking statements. Actual results or events could
differ materially from the plans, intentions and expectations disclosed in the
forward-looking statements we make. We have included important factors in the
cautionary statements included or incorporated in this prospectus, particularly
under the heading "Risk Factors", that we believe could cause actual results or
events to differ materially from the forward-looking statements that we make.
Our forward-looking statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments we may make.
We do not assume any obligation to update any forward-looking statements except
as otherwise required by law.
7
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the selling
stockholders.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by the selling stockholders for brokerage,
accounting, tax or legal services or any other expenses incurred by the selling
stockholders in disposing of the shares. We will bear all other costs, fees and
expenses incurred in effecting the registration of the shares covered by this
prospectus, including, without limitation, all registration and filing fees,
Nasdaq listing fees and fees and expenses of our counsel and our accountants.
SELLING STOCKHOLDERS
We issued the shares of common stock covered by this prospectus in a
private placement in connection with our acquisition of DataChannel in December
2001. The following table sets forth, to our knowledge, certain information
about the selling stockholders as of February 8, 2002.
Beneficial ownership is determined in accordance with the rules of the SEC,
and includes voting or investment power with respect to shares. Unless otherwise
indicated below, to our knowledge, all persons named in the table have sole
voting and investment power with respect to their shares of common stock, except
to the extent authority is shared by spouses under applicable law. The inclusion
of any shares in this table does not constitute an admission of beneficial
ownership for the person named below.
SHARES OF SHARES OF
COMMON STOCK COMMON STOCK TO
BENEFICIALLY BE BENEFICIALLY
OWNED PRIOR NUMBER OF OWNED AFTER
TO OFFERING(1) SHARES OF OFFERING(1)(2)
-------------------- COMMON STOCK -------------------
NAME OF SELLING STOCKHOLDER NUMBER PERCENTAGE BEING OFFERED NUMBER PERCENTAGE
--------------------------- ------- ---------- ------------- ------ ----------
2180 Associates Fund V, L.P. ........... 3,415 * 3,415 0 0
2180 Associates Fund VII, L.P. ......... 2,796 * 2,796 0 0
Alden S. Miller......................... 728 * 728 0 0
AT&T Corp. ............................. 166,617 * 166,617 0 0
Bear Stearns Securities Corporation
f/b/o David Pollock IRA No.
72290322.............................. 11,696 * 11,696 0 0
Brobeck Phleger & Harrison LLP ......... 5,414 * 5,414 0 0
Brookside Capital Partners Fund,
L.P. ................................. 83,308 * 83,308 0 0
Carla Corkern(3)........................ 2,348 * 2,348 0 0
Cisco Systems, Inc...................... 160,369 * 160,369 0 0
Daniel Lynch(4)......................... 18,785 * 18,785 0 0
David D. Pool(3)(4)(5).................. 171,114 * 171,114 0 0
David Huryn(3).......................... 46 * 46 0 0
DB Capital Investors, L.P.(6)........... 166,617 * 166,617 0 0
Deloitte Consulting LLC ................ 41,654 * 41,654 0 0
Encompass............................... 108,293 * 108,293 0 0
Gary Gigot.............................. 22,222 * 22,222 0 0
George Kondrach(3)...................... 2,348 * 2,348 0 0
Henry David Kenyon...................... 11,931 * 11,931 0 0
International Business Machines
Corporation........................... 83,308 * 83,308 0 0
James E. Lyle........................... 87 * 87 0 0
Jeanette Krull.......................... 4 * 4 0 0
Jeff Bell............................... 1,224 * 1,224 0 0
Jeff Lavinder........................... 9 * 9 0 0
John Dieckman........................... 50 * 50 0 0
8
SHARES OF SHARES OF
COMMON STOCK COMMON STOCK TO
BENEFICIALLY BE BENEFICIALLY
OWNED PRIOR NUMBER OF OWNED AFTER
TO OFFERING(1) SHARES OF OFFERING(1)(2)
-------------------- COMMON STOCK -------------------
NAME OF SELLING STOCKHOLDER NUMBER PERCENTAGE BEING OFFERED NUMBER PERCENTAGE
--------------------------- ------- ---------- ------------- ------ ----------
John Dimmer............................. 219,084 * 219,084 0 0
John Tigue.............................. 187 * 187 0 0
Karthikeyan Balasubramanian............. 58 * 58 0 0
Lazarus Family Investments.............. 22,222 * 22,222 0 0
Mary Frances Smith(3)................... 42 * 42 0 0
Masataka Okuda.......................... 6,248 * 6,248 0 0
Morgan Enterprises(7)................... 7,262 * 7,262 0 0
Pool Enterprises LLC ................... 25,715 * 25,715 0 0
Raj Mehra............................... 416 * 416 0 0
Randall Gordon.......................... 204 * 204 0 0
Robert K. & Lucie J. Fjeldstad 1997
Revoc. Trust(8)....................... 61,305 * 61,305 0 0
Selena Bauer............................ 11 * 11 0 0
Sunny Lauritzen......................... 87 * 87 0 0
Suzan Martignetti....................... 728 * 728 0 0
TCI Club................................ 5,848 * 5,848 0 0
Therese Mrozek.......................... 832 * 832 0 0
Tim P. Gelinas.......................... 8,330 * 8,330 0 0
Trans Cosmos USA, Inc. ................. 108,293 * 108,293 0 0
UMB Bank Custodian For Van Wagoner
Funds................................. 429,961 1.3% 429,961 0 0
U.S. Venture Partners V, L.P............ 109,790 * 109,790 0 0
U.S. Venture Partners VII, L.P.......... 134,259 * 134,259 0 0
USVP V Entrepreneur Partners, L.P....... 2,683 * 2,683 0 0
USVP V International, L.P............... 6,099 * 6,099 0 0
USVP Entrepreneur Partners VII-A,
L.P................................... 1,398 * 1,398 0 0
USVP Entrepreneur Partners VII-B,
L.P. ................................. 1,398 * 1,398 0 0
Van Wagoner Capital Partners, L.P. ..... 4,178 * 4,178 0 0
Van Wagoner Crossover Fund, L.P. ....... 190,676 * 190,676 0 0
Weiss, Peck & Greer, LLC. .............. 41,237 * 41,237 0 0
William Noland.......................... 999 * 999 0 0
XMLFund LLC ............................ 39,771 * 39,771 0 0
Yasuki Matsumoto........................ 6,248 * 6,248 0 0
Zahid Patel............................. 16 * 16 0 0
---------------
* Less than one percent.
(1) Of the total shares of common stock listed as owned by the selling
stockholders, a total of 250,001 shares are held in an escrow account to
secure indemnification obligations of the former stockholders of DataChannel
to us. It is expected that these shares (less any shares that may be
distributed from the escrow account to us in satisfaction of indemnification
claims) will be released from escrow and distributed to the selling
stockholders on December 14, 2002. The number of shares indicated as owned
9
by each selling stockholder includes those shares (representing
approximately 10% of the number of shares listed as beneficially owned by
each selling stockholder) which such selling stockholder is entitled to
receive upon distribution of these shares from the escrow account.
(2) We do not know when or in what amounts a selling stockholder may offer
shares for sale. The selling stockholders might not sell any or all of the
shares offered by this prospectus. Because the selling stockholders may
offer all or some of the shares pursuant to this offering, and because there
are currently no agreements, arrangements or understandings with respect to
the sale of any of the shares, we cannot estimate the number of the shares
that will be held by the selling stockholders after completion of the
offering. However, for purposes of this table, we have assumed that, after
completion of the offering, none of the shares covered by this prospectus
will be held by the selling stockholders.
(3) Employees or former employees of Netegrity and/or DataChannel.
(4) Former directors of DataChannel.
(5) Excludes 39,771 shares of Netegrity common stock owned by XML Fund, LLC, a
Washington limited liability company of which David Pool is the manager and
of which he owns a majority of the equity interests.
(6) DB Capital Investors, L.P. is an indirect wholly owned subsidiary of
Deutsche Bank AG. The address for DB Capital Investors, L.P. is 31 West 52nd
Street, 26(th) Floor, New York, NY 10019.
(7) Morgan Enterprises is a Washington partnership consisting of Michael D.
Dwyer, Thomas E. Grohman, Jim D. Johnston and Michael E. Morgan, each of
whom is a partner at the law firm of Lane Powell Spears Lubersky, LLP. Prior
to our acquisition of DataChannel, Lane Powell Spears Lubersky acted as
legal counsel to DataChannel.
(8) Lucie J. Fjeldstad was formerly President, Chief Executive Officer and a
director of DataChannel.
None of the selling stockholders has held any position or office with, or
has otherwise had a material relationship with, us or any of our subsidiaries
within the past three years, except that the selling stockholders indicated have
been employed by us and/or DataChannel or were members of the DataChannel board
of directors. In connection with our acquisition of DataChannel, we entered into
employment offer letters with Lucie Fjeldstad, formerly President and Chief
Executive Officer of DataChannel, and James Beach, formerly Chief Financial
Officer of DataChannel, under which each agreed to perform certain services for
us through June 14, 2002.
10
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to
time by the selling stockholders. The term "selling stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. The selling
stockholders will act independently of us in making decisions with respect to
the timing, manner and size of each sale. Such sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and under
terms then prevailing or at prices related to the then current market price or
in negotiated transactions. The selling stockholders may sell their shares by
one or more of, or a combination of, the following methods:
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
- block trades in which the broker-dealer so engaged will attempt to sell
the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
- an over-the-counter distribution in accordance with the rules of the
Nasdaq National Market;
- in privately negotiated transactions; and
- in options transactions.
In addition, any shares that qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this prospectus.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In connection with
distributions of the shares or otherwise, the selling stockholders may enter
into hedging transactions with broker-dealers or other financial institutions.
In connection with such transactions, broker-dealers or other financial
institutions may engage in short sales of the common stock in the course of
hedging the positions they assume with selling stockholders. To the extent
permitted by law, the selling stockholders may also sell the common stock short
and redeliver the shares to close out such short positions. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction). The selling stockholders may also pledge shares to a broker-dealer
or other financial institution, and, upon a default, such broker-dealer or other
financial institution, may effect sales of the pledged shares pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling stockholders
and any broker-dealers who execute sales for the selling stockholders may be
deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. Any profits realized by the selling stockholders and
the compensation of any broker-dealer may be deemed to be underwriting discounts
and commissions.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders for the
11
purpose of satisfying the prospectus delivery requirements of the Securities
Act. The selling stockholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
At the time a particular offer of shares is made, if required, a prospectus
supplement will be distributed that will set forth the number of shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.
We have agreed with the selling stockholders to keep the registration
statement of which this prospectus constitutes a part effective until the
earlier of (i) such time as all of the shares covered by this prospectus have
been disposed of pursuant to and in accordance with the Registration Statement
or (ii) December 14, 2002.
LEGAL MATTERS
The validity of the shares offered by this prospectus has been passed upon
by Hale and Dorr LLP.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K of Netegrity, Inc. for the year ended December
31, 2000, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The consolidated financial statements of DataChannel at December 31, 2000,
and for the year then ended, included in Netegrity, Inc.'s Current Report on
Form 8-K/A filed on February 12, 2002 with the Securities and Exchange
Commission, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon (which contains an explanatory paragraph
describing conditions that raise substantial doubt about DataChannel's ability
to continue as a going concern as described in Note 1 to the consolidated
financial statements) included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.
The financial statements of DataChannel, Inc. and subsidiary as of and for
the year ended December 31, 1999 incorporated by reference in this prospectus
and elsewhere in the registration statement have been audited by Arthur
Andersen, LLP, independent public accountants, as indicated in their report with
respect thereto, and are included herein on reliance upon the authority of said
firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other documents with the SEC. You may
read and copy any document we file at the SEC's public reference room at
Judiciary Plaza Building, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549. You should call 1-800-SEC-0330 for more information on the public
reference room. Our SEC filings are also available to you on the SEC's Internet
site at http://www.sec.gov.
This prospectus is part of a registration statement that we filed with the
SEC. The registration statement contains more information than this prospectus
regarding us and our common stock, including certain exhibits and schedules. You
can obtain a copy of the registration statement from the SEC at the address
listed above or from the SEC's Internet site.
12
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC requires us to "incorporate" into this prospectus information that
we file with the SEC in other documents. This means that we can disclose
important information to you by referring to other documents that contain that
information. The information incorporated by reference is considered to be part
of this prospectus. Information contained in this prospectus and information
that we file with the SEC in the future and incorporate by reference in this
prospectus automatically updates and supersedes previously filed information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the sale of all the shares covered by
this prospectus.
(1) Our Annual Report on Form 10-K for the year ended December 31, 2000;
(2) Our Current Report on Form 8-K filed on March 16, 2001;
(3) Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
(4) Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2001;
(5) Our Quarterly Report on Form 10-Q for the quarter ended September 30,
2001, as amended by a Quarterly Report on Form 10-Q/A filed on December
4, 2001;
(6) Our Current Report on Form 8-K filed on October 29, 2001;
(7) Our Current Report on Form 8-K filed on December 24, 2001, as amended
by a Current Report on Form 8-K/A filed on February 12, 2002;
(8) All of our filings pursuant to the Exchange Act after the date of
filing the initial registration statement and prior to effectiveness of
the registration statement; and
(9) The description of our common stock contained in our Registration
Statement on Form 8-A filed on December 6, 1988, as amended by a Form
8-A/A filed on December 13, 1988, and as updated by a Current Report on
Form 8-K filed on February 12, 2002.
You may request a copy of these documents, which will be provided to you at
no cost, by writing or telephoning us using the following contact information:
Netegrity, Inc.
52 Second Avenue
Waltham, MA 02451
Attention: Barry N. Bycoff
Telephone: (781) 890-1700
13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by Netegrity, Inc. (except any underwriting
discounts and commissions and expenses incurred by the selling stockholders for
brokerage, accounting, tax or legal services or any other expenses incurred by
the selling stockholders in disposing of the shares). All amounts shown are
estimates except the Securities and Exchange Commission registration fee.
Filing Fee -- Securities and Exchange Commission............ $ 3,133
Legal fees and expenses..................................... $30,000
Accounting fees and expenses................................ $10,000
Miscellaneous expenses...................................... $ 5,000
-------
Total Expenses.................................... $48,133
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law allows a corporation to
eliminate the personal liability of directors of a corporation to the
corporation or its stockholders for monetary damages for a breach of fiduciary
duty as a director, except where the director breached his duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or knowingly
violated a law, authorized the payment of a dividend or approved a stock
repurchase in violation of Delaware corporate law or obtained an improper
personal benefit. Netegrity, Inc. ("Netegrity") has included such a provision in
its Restated Certificate of Incorporation.
Section 145 of the General Corporation Law of Delaware provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he or she is or is threatened
to be made a party by reason of such position, if such person shall have acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, in any criminal
proceeding, if such person had no reasonable cause to believe his conduct was
unlawful; provided that, in the case of actions brought by or in the right of
the corporation, no indemnification shall be made with respect to any matter as
to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the adjudicating court determines that such
indemnification is proper under the circumstances.
Article Eighth of the Restated Certificate of Incorporation of Netegrity
provides that if the General Corporation Law of the State of Delaware is amended
in the future to expand the indemnification permitted to directors, Netegrity
must indemnify those persons to the fullest extent permitted by such law.
Article Eighth further provides that any repeal or modification of Article
Eighth may not increase the personal liability of any director of Netegrity for
any act or occurrence taking place prior to that time.
Article Eighth of the Restated Certificate of Incorporation of Netegrity,
Inc. further provides that a director or officer of Netegrity will be
indemnified by Netegrity to the fullest extent authorized by the General
Corporation Law of the State of Delaware against all expense, liability and loss
reasonably incurred or suffered by him or her (the "indemnitee") in connection
with any action, suit or proceeding in which he or she is made a party or is
threatened to be made a party by reason of the fact that he or she is or was a
director, officer or employee of Netegrity, whether the basis of such proceeding
is alleged action in an official capacity or in any other capacity while serving
as a director, officer, employee or agent. With respect to proceedings to
enforce rights to indemnification, Netegrity will indemnify indemnitees in
connection with a proceeding initiated by him or her only if the proceeding was
authorized by the Board of Directors of Netegrity. The right to indemnification
conferred is a contract right and includes the right to be paid by Netegrity the
expenses incurred in defending any such proceeding in advance of its final
disposition.
II-1
Article V of the Amended and Restated By-Laws of Netegrity provides with
respect to third party action that Netegrity will indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director,
officer, employee or agent of Netegrity, against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding.
Article V further provides with respect to derivative actions that Netegrity
will indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of Netegrity to procure a judgment in its favor by reason of the fact that he or
she is or was a director, officer, employee or agent of Netegrity against
expenses actually and reasonably incurred by him or her in connection with the
defense or settlement of such action or suit.
Article V of the Amended and Restated By-Laws of Netegrity further provides
that Netegrity will advance all expenses incurred by the indemnitee in
connection with the investigation, defense, settlement or appeal of any
proceeding to which the indemnitee is a party or is threatened to be made a
party by reason of the fact that the indemnitee is or was an agent of Netegrity
within 30 days of a written request by the indemnitee. The indemnitee must repay
such amounts if it is ultimately determined that he or she is not entitled to be
indemnified.
Article V of the Amended and Restated By-Laws of Netegrity, Inc. is not
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors or otherwise. The indemnification continues after a person has ceased
to be a director, officer, employee or agent. Netegrity may also indemnify any
person who is or was a director, officer, employee or agent of a corporation
absorbed in a consolidation or merger with Netegrity in the same manner as it
may indemnify any person who is or was a director, officer, employee or agent of
Netegrity.
Article V of the Amended and Restated By-Laws of Netegrity further provides
that Netegrity, Inc. may, to the full extent provided by law, indemnify any
person for any act or omission of such person against all loss, cost, damage and
expense if such person is determined to have acted in good faith and in a manner
he or she reasonably believed to be in, or not opposed to, the best interest of
Netegrity.
Netegrity has purchased directors' and officers' liability insurance which
would indemnify its directors and officers against damages arising out of
certain kinds of claims which might be made against them based on their
negligent acts or omissions while acting in their capacity as such.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Restated Certificate of Incorporation, as amended, of the
Registrant.
3.2 Amended and Restated By-laws, as amended, of the Registrant.
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Ernst & Young LLP, Independent Auditors
23.3 Consent of Arthur Andersen, LLP.
23.4 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed
herewith.
24.1 Power of Attorney (See page II-4 of this Registration
Statement).
II-2
ITEM 17. UNDERTAKINGS.
Item 512(a) of Regulation S-K. The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Item 512(b) of Regulation S-K. The undersigned Registrant hereby
undertakes that, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Item 512(h) of Regulation S-K. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the indemnification provisions
described herein, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Waltham, Commonwealth of Massachusetts, on February
11, 2002.
NETEGRITY, INC.
By: /s/ BARRY N. BYCOFF
------------------------------------
Barry N. Bycoff
President and Chief Executive
Officer
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of Netegrity, Inc., hereby
severally constitute and appoint Barry N. Bycoff and M. Colette Cooke, and each
of them singly, our true and lawful attorneys with full power to any of them,
and to each of them singly, to sign for us and in our names in the capacities
indicated below the Registration Statement on Form S-3 filed herewith and any
and all pre-effective and post-effective amendments to said Registration
Statement and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable Netegrity, Inc. to comply with
the provisions of the Securities Act of 1933, as amended, and all requirements
of the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ BARRY N. BYCOFF President, Chief Executive February 11, 2002
------------------------------------------------ Officer and Director (Principal
Barry N. Bycoff Executive Officer)
/s/ REGINA SOMMER Chief Financial Officer and February 11, 2002
------------------------------------------------ Treasurer (Principal Financial
Regina Sommer Officer and Principal Accounting
Officer)
/s/ PAUL F. DENINGER Director February 11, 2002
------------------------------------------------
Paul F. Deninger
/s/ ERIC R. GILER Director February 11, 2002
------------------------------------------------
Eric R. Giler
/s/ LAWRENCE D. LENIHAN Director February 11, 2002
------------------------------------------------
Lawrence D. Lenihan
II-4
SIGNATURE TITLE DATE
--------- ----- ----
Director February , 2002
------------------------------------------------
Ralph B. Wagner
/s/ MICHAEL L. MARK Director February 11, 2002
------------------------------------------------
Michael L. Mark
II-5
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Restated Certificate of Incorporation, as amended, of the
Registrant.
3.2 Amended and Restated By-laws, as amended, of the Registrant.
5.1 Opinion of Hale and Dorr LLP.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Ernst & Young LLP, Independent Auditors
23.3 Consent of Arthur Andersen, LLP.
23.4 Consent of Hale and Dorr LLP, included in Exhibit 5.1 filed
herewith.
24.1 Power of Attorney (See page II-4 of this Registration
Statement).