-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GrYC5Imz9MniKnsXXVaSuoug+0U75bMOFNm1g0rWdcgn2AKg6ua08TDgFiWlzfZl eeGn8LNAA9RR/VKhVcCCnQ== 0000950135-01-501102.txt : 20010511 0000950135-01-501102.hdr.sgml : 20010511 ACCESSION NUMBER: 0000950135-01-501102 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20010510 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EPRISE CORP CENTRAL INDEX KEY: 0001098937 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 043179480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: SEC FILE NUMBER: 005-60455 FILM NUMBER: 1627761 BUSINESS ADDRESS: STREET 1: 1671 WORCESTER ROAD STREET 2: FOURTH FLOOR CITY: FRAMINGHAM STATE: MA ZIP: 01701 BUSINESS PHONE: 5088720200 MAIL ADDRESS: STREET 1: 1671 WORCESTER ROAD CITY: FRAMINGHAM STATE: MA ZIP: 01701 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: EPRISE CORP CENTRAL INDEX KEY: 0001098937 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 043179480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: 1671 WORCESTER ROAD STREET 2: FOURTH FLOOR CITY: FRAMINGHAM STATE: MA ZIP: 01701 BUSINESS PHONE: 5088720200 MAIL ADDRESS: STREET 1: 1671 WORCESTER ROAD CITY: FRAMINGHAM STATE: MA ZIP: 01701 SC TO-I 1 b39429ecscto-i.txt EPRISE CORPORATION 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE TO TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 EPRISE CORPORATION (Name Of Subject Company (Issuer) And Filing Person (Offeror)) OPTIONS TO PURCHASE COMMON STOCK, PAR VALUE $0.001 PER SHARE (Title Of Class Of Securities) n/a* (Cusip Number Of Class Of Securities) Joseph A. Forgione President And Chief Executive Officer Eprise Corporation 200 Crossing Boulevard Framingham, Massachusetts 01702 (508) 661-5200 (Name, Address And Telephone Number Of Person Authorized To Receive Notices And Communications On Behalf Of Filing Person) COPIES TO: Dennis W. Townley Hill & Barlow One International Place Boston, MA 02110 (617) 428-3000 CALCULATION OF FILING FEE
TRANSACTION VALUATION+ AMOUNT OF FILING FEE ---------------------- -------------------- $2,031,349 $406
+ Calculated solely for purposes of determining the filing fee. This amount assumes that options to purchase 2,056,660 shares of common stock of Eprise Corporation having an aggregate value of $2,031,349 as of May 10, 2001 will be exchanged and/or cancelled pursuant to this offer. The aggregate 2 value of such options was calculated based on the Black-Scholes option pricing model. The amount of the filing fee, calculated in accordance with Rule 0-11(b) of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the value of the transaction. [ ] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Not Applicable. Form Or Registration No.: Not Applicable. Filing Party: Not Applicable. Date Filed: Not Applicable. [ ] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [ ] third party tender offer subject to Rule 14d-1. [X] issuer tender offer subject to Rule 13e-4. [ ] going-private transaction subject to Rule 13e-3. [ ] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: [ ] * There is no trading market or CUSIP Number for the options. The CUSIP Number for the underlying common stock is 294352 10 9. * * * * * 2 3 ITEM 1. SUMMARY TERM SHEET. The information set forth under "Summary Term Sheet" in the Offer to Exchange all Outstanding Options for New Options dated May 10, 2001 ("Offer to Exchange"), a copy of which is attached hereto as Exhibit (a)(1), is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. (a) The name of the issuer is Eprise Corporation, a Delaware corporation ("Eprise" or the "Company"). The address of its principal executive offices is 200 Crossing Boulevard, Framingham, Massachusetts 01702. The telephone number at that address is (508) 661-5200. (b) This Tender Offer Statement on Schedule TO relates to an offer by the Company to exchange most of the options outstanding under the Company's Amended and Restated 1997 Stock Option Plan (the "Plan") to purchase approximately 2,056,660 shares of the Company's Common Stock, par value $0.001 per share ("Option Shares"), for new options that will be granted under the Plan (the "New Options"), upon the terms and subject to the conditions set forth under "The Offer" in the Offer to Exchange. If you are not an employee of Eprise or one of its subsidiaries, or if you received your first option grant under the Plan on or after January 1, 2001, you will not be eligible to accept the Offer. The information set forth under "The Offer" in the Offer to Exchange is incorporated herein by reference. (c) The information set forth in the Offer to Exchange under Section 8 ("Price range of shares underlying the options") is incorporated herein by reference. ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON. (a) The filing person is the issuer. The information set forth under Item 2(a) above is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a) The information set forth in the Offer to Exchange under "Summary Term Sheet," Section 2 ("Number of options; expiration date"), Section 4 ("Procedures for tendering options"), Section 5 ("Withdrawal rights and change of election"), Section 6 ("Acceptance of options for exchange and issuance of new options"), Section 7 ("Conditions of the offer"), Section 9 ("Source and amount of consideration; terms of new options"), Section 12 ("Status of options acquired by us in the offer; accounting consequences of the offer"), Section 13 ("Legal matters; regulatory approvals"), Section 14 ("Material U.S. federal income tax consequences"), and Section 15 ("Extension of offer; termination; amendment") are incorporated herein by reference. (b) The information set forth in the Offer to Exchange under Section 11 ("Interests of directors and officers; transactions and arrangements concerning the options") is incorporated herein by reference. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND ARRANGEMENTS. Not applicable. ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. 4 (a) The information set forth in the Offer to Exchange under Section 3 ("Purpose of the offer") is incorporated herein by reference. (b) The information set forth in the Offer to Exchange under Section 12 ("Status of options acquired by us in the offer; accounting consequences of the offer") is incorporated herein by reference. (c) The information set forth in the Offer to Exchange under Section 3 ("Purpose of the offer") is incorporated herein by reference. ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) The information set forth in the Offer to Exchange under Section 9 ("Source and amount of consideration; terms of new options") and Section 16 ("Fees and expenses") is incorporated herein by reference. (b) Not applicable. (d) Not applicable. ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. (a) Not applicable. (b) The information set forth in the Offer to Exchange under Section 11 ("Interests of directors and officers; transactions and arrangements concerning the options") is incorporated herein by reference. ITEM 9. PERSON/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED. (a) Not applicable. ITEM 10. FINANCIAL STATEMENTS. (a) The information set forth on pages F-1 through F-15 of Eprise's Annual Report on Form 10-K for its fiscal year ended December 31, 2000 is incorporated herein by reference. The information set forth in Section 18 ("Miscellaneous") of the Offer to Exchange, regarding the locations at which our Annual Report on Form 10-K can be inspected and copies obtained, is incorporated herein by reference. (b) Not applicable. ITEM 11. ADDITIONAL INFORMATION. (a) The information set forth in the Offer to Exchange under Section 13 ("Legal matters; regulatory approvals") is incorporated herein by reference. (b) Not applicable. ITEM 12. EXHIBITS. (a)(1) Offer to Exchange all Outstanding Options for New Options dated May 10, 2001. (2) Election Form. 2 5 (3) Memorandum from President to All Employees dated May 10, 2001. (4) Notice to Change Election from Accept to Reject. (5) Form of Promise to Grant Stock Option(s). (b) Not applicable. (d)(1) Eprise Corporation Amended and Restated 1997 Stock Option Plan filed as Exhibit 10.5 to the Company's Registration Statement on Form S-1 declared effective on March 23, 2000 and incorporated herein by reference. (2) Eprise Corporation 1997 Stock Plan Prospectus. (g) Not applicable. (h) Not applicable. ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. (a) Not applicable. 3 6 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule TO is true, complete and correct. EPRISE CORPORATION By:/s/ Joseph A. Forgione ------------------------------------------ Joseph A. Forgione President and Chief Executive Officer Date: May 10, 2001 4 7 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------ ----------- (a)(1) Offer to Exchange all Outstanding Options for New Options dated May 10, 2001. (a)(2) Election Form. (a)(3) Memorandum from President to All Employees dated May 10, 2001. (a)(4) Notice to Change Election from Accept to Reject. (a)(5) Form of Promise to Grant Stock Option(s). (d)(1) Eprise Corporation Amended and Restated 1997 Stock Option Plan filed as Exhibit 10.5 to the Company's Registration Statement on Form S-1 declared effective on March 23, 2000 and incorporated herein by reference. (d)(2) Eprise Corporation 1997 Stock Plan Prospectus.
5 EX-99.(A)(1) 2 b39429ecex99-a1.txt OFFER TO EXCHANGE ALL OUTSTANDING OPTIONS FOR NEW 1 EXHIBIT (a)(1) OFFER TO EXCHANGE ALL OUTSTANDING OPTIONS FOR NEW OPTIONS (THE "OFFER TO EXCHANGE") THIS SUPPLEMENT CONSTITUTES PART OF THE SECTION 10(a) PROSPECTUS RELATING TO THE EPRISE CORPORATION 1997 STOCK OPTION PLAN May 10, 2001 2 EPRISE CORPORATION OFFER TO EXCHANGE ALL OUTSTANDING OPTIONS FOR NEW OPTIONS (THE "OFFER TO EXCHANGE") THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN DAYLIGHT TIME, ON JUNE 8, 2001 UNLESS THE OFFER IS EXTENDED. Eprise Corporation ("Eprise") is offering eligible employees the opportunity to exchange all outstanding options to purchase shares of Eprise common stock for new options which we will grant under the Eprise Corporation Amended and Restated 1997 Stock Option Plan (the "Stock Plan"). We are making the offer upon the terms and conditions described in this Offer to Exchange (the "Offer to Exchange"), the related memorandum from Joe Forgione dated May 10, 2001, the Election Form and the Notice to Change Election from Accept to Reject (which together, as they may be amended from time to time, constitute the "offer" or "program"). The number of shares subject to the new options to be granted to each eligible employee will be equal to the number of shares subject to the options tendered by the eligible employee and accepted for exchange. Subject to the terms and conditions of this offer, we will grant the new options on or about the first business day which is at least six months and one day after the date we cancel the options accepted for exchange. You may tender options for all, some or none of the outstanding, unexercised shares subject to an individual option grant. All tendered options accepted by us through the offer will be cancelled as promptly as practicable after 5:00 PM Eastern Daylight Time on the date the offer ends. The offer is currently scheduled to expire on June 8, 2001 (the "Expiration Date") and we expect to cancel options on June 11, 2001, or as soon as possible thereafter (the "Cancellation Date"). IF YOU TENDER ANY OPTIONS FOR EXCHANGE, YOU ALSO WILL BE REQUIRED TO TENDER ALL OPTIONS GRANTED TO YOU DURING THE SIX MONTH PERIOD PRIOR TO COMMENCEMENT OF THE OFFER. This means that if you participate in the offer, you will be required to tender all options granted to you since November 10, 2000. The offer is not conditioned on a minimum number of options being tendered. Participation in the offer is completely voluntary. The offer is subject to conditions that we describe in section 7 of this Offer to Exchange. You may participate in the offer if you are an otherwise eligible employee of Eprise Corporation or one of our subsidiaries, and you first received an option grant under the Stock Plan before January 1, 2001. Directors of Eprise, including directors who are also employees, and employees who first received option grants under the Stock Plan on or after January 1, 2001 are not eligible to participate. In order to receive a new option pursuant to this offer, you must remain an employee as of the date on which the new options are granted, which will be at least six months and one day after the Cancellation Date. If you tender options for exchange as described in the offer, and we accept your tendered options, then, subject to the terms of this offer, we will grant you new options under the Stock Plan. The exercise price per share of the new options will be 100% of the fair market value on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the last business day before the date of grant. Each new option will be exercisable for the same number of shares as remained outstanding under the tendered options. 3 Each new option granted will vest in accordance with the vesting schedule of the cancelled options, as follows: - - any shares that were fully vested on the date that the offer expires will be fully vested, - - all unvested options on the date the offer expires that would have been fully vested on the date the new options are granted (at least six months and one day from the date this offer expires) will be fully vested, and - - all remaining unvested options will have a vesting schedule that is equivalent to what would have been in place had the cancelled option remained in effect. For example: - An employee cancels an option that is 5/16th (one year plus one quarter) vested at the time of cancellation. - The new grant occurs 6 months and one day (two quarters) after cancellation. - The replacement option will be 7/16th vested at the time of grant. Although the Compensation Committee of our Board of Directors has approved the offer, neither we nor our Board of Directors makes any recommendation as to whether you should tender or not tender your options for exchange. You must make your own decision whether or not to tender your options. Shares of Eprise common stock are traded on the Nasdaq National Market under the symbol "EPRS." On May 7, 2001, the closing price of our common stock reported on the Nasdaq National Market was $1.00 per share. WE RECOMMEND THAT YOU EVALUATE CURRENT AND HISTORICAL MARKET QUOTES FOR OUR COMMON STOCK, AMONG OTHER FACTORS, BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. THIS OFFER TO EXCHANGE HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE SEC) OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS OFFER TO EXCHANGE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. You should direct questions about the offer or requests for assistance or for additional copies of this Offer to Exchange, the memorandum from Joe Forgione dated May 10, 2001, the Election Form and the Notice to Change Election From Accept to Reject to Milt Alpern at Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702 (telephone: (508) 661-5200). IMPORTANT If you wish to tender your options for exchange, you must complete and sign the Election Form in accordance with its instructions, and fax or hand deliver it and any other required documents to Milt Alpern at fax number (508) 661-5401, no later than 5:00 p.m. on June 8, 2001. We are not making the offer to, and we will not accept any tender of options from or on behalf of, option holders in any jurisdiction in which the offer or the acceptance of any tender of options would not ii 4 be in compliance with the laws of that jurisdiction. However, we may, at our discretion, take any actions necessary for us to make the offer to option holders in any of these jurisdictions. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR NOT TENDER YOUR OPTIONS THROUGH THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT AND IN THE RELATED MEMORANDUM FROM JOE FORGIONE DATED MAY 10, 2001, ELECTION FORM AND NOTICE TO CHANGE ELECTION FROM ACCEPT TO REJECT. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US. iii 5 TABLE OF CONTENTS
PAGE Summary Term Sheet.................................................................................. 1 Certain Risks of Participating in the Offer ........................................................ 7 Introduction ....................................................................................... 8 The Offer .......................................................................................... 11 1. Eligibility.................................................................................... 11 2. Number of options; expiration date ............................................................ 11 3. Purpose of the offer........................................................................... 12 4. Procedures for tendering options .............................................................. 13 5. Withdrawal Rights and Change of Election ...................................................... 14 6. Acceptance of options for exchange and issuance of new options................................. 15 7. Conditions of the offer........................................................................ 16 8. Price range of shares underlying the options................................................... 17 9. Source and amount of consideration; terms of new options....................................... 17 10. Information concerning Eprise.................................................................. 21 11. Interests of directors and officers; transactions and arrangements concerning the options..................................................................... 21 12. Status of options acquired by us in the offer; accounting consequences of the offer............ 22 13. Legal matters; regulatory approvals............................................................ 22 14. Material U.S. Federal Income Tax Consequences.................................................. 23 15. Extension of offer; termination; amendment..................................................... 25 16. Fees and expenses.............................................................................. 26 17. Additional information......................................................................... 26 18. Miscellaneous.................................................................................. 27 Schedule A Information Concerning the Directors and Executive Officers of Eprise Corporation...................................................................... A-1
6 SUMMARY TERM SHEET - - The commencement date of the offer is May 10, 2001. - - The offer allows employees to cancel existing stock options, whether vested or unvested, and receive an equivalent number of "at-the-money" stock options six months and one day after cancellation of the existing stock options. - - The offer is being made only to employees who were participants in the Company's stock option plan before January 1, 2001. The offer is not available to employees who received Eprise options for the first time on or after January 1, 2001. - - All employees (subject to the preceding sentence), including officers, can participate in the offer. Directors, including officers who are directors, cannot participate. - - The number of options granted to the employee following the six month and one day period will be the same number as the number of options cancelled (subject to any intervening stock splits, etc.). - - The exercise price of the new options will be the market price of our common stock on the new grant date, as measured by the closing price of our stock on the last business day before the new grant date. - - Employees can elect to cancel all, some or none of their existing options. - - However, if an employee elects to cancel any options, then, in addition, all options granted in the six month period immediately prior to the commencement date of the offer must also be cancelled. - - Eligible employees will have until June 8, 2001 (twenty (20) business days from the commencement date of the offer) to decide if they wish to participate. We plan to cancel properly tendered options on June 11, 2001. The six month and one day period begins following the cancellation date. - - The option exchange resets the employee's holding period for income tax purposes. - - The timing of the offer is designed so that the Company will not have to incur any stock compensation expense as a result of the option exchange. - - During the six month and one day period, no other option grants may be made to the employees who are participating in the offer (such grants would disallow the "compensation expense-free" aspect of the offer to the Company). - - The Company cannot provide "stock price protection" to participating employees during the six month and one day period. Participating employees must bear the risk of market movements in the stock price during the period. - - Participating employees must remain employed during the six month and one day period in order to receive a new grant. - - The vesting schedule for the new option grants will be calculated so that employees have the same number of vested options following the six month and one day period as they would have had under the cancelled options. - - If the Company is acquired prior to the new grant date, the acquiror must honor our commitment to grant you new options. However, you may forfeit any accelerated vesting due to a change in control as provided under your existing option grant. In addition, your new option would be subject to the terms and conditions of the acquiror's stock option plan. 1 7 The following are answers to some of the questions that you may have about the offer. We urge you to read carefully the remainder of this Offer to Exchange, the accompanying memorandum from Joe Forgione dated May 10, 2001, the Election Form and the Notice to Change Election From Accept to Reject because the information in this summary is not complete, and additional important information is contained in the remainder of this Offer to Exchange, the accompanying memorandum from Joe Forgione dated May 10, 2001, the Election Form and the Notice to Change Election From Accept to Reject. We have included page references to the remainder of this Offer to Exchange where you can find a more complete description of the topics in this summary. WHAT SECURITIES ARE WE OFFERING TO EXCHANGE? We are offering to exchange all outstanding, unexercised options to purchase shares of common stock of Eprise held by eligible employees for new options we will grant under the Stock Plan. (Page 11) WHO IS ELIGIBLE TO PARTICIPATE? Employees are eligible to participate if (1) they are employees of Eprise Corporation ("Eprise") or one of Eprise's subsidiaries as of the date the offer commences and the date on which the tendered options are cancelled and (2) they first received an option grant under the Stock Plan before January 1, 2001. Members of the Board of Directors, including employee directors, are not eligible to participate. In order to receive a new option, you must remain an employee as of the date the new options are granted, which will be at least six months and one day after the cancellation date for the tendered options. If Eprise does not extend the offer, the new options will be granted on or about December 12, 2001. (Page 11) ARE EMPLOYEES OUTSIDE THE UNITED STATES ELIGIBLE TO PARTICIPATE? Yes, employees outside the United States are eligible to participate. However, we urge all employees to consult with their own tax advisors about the tax consequences of participating in the offer before deciding whether to participate. (Page 11) WHY ARE WE MAKING THE OFFER? We believe that granting stock options motivates high levels of performance and provides an effective way to recognize employee contributions to the success of our company. The offer provides an opportunity for us to offer eligible employees a valuable incentive to stay with our company. Some of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current market price of our shares. We believe these options are unlikely to be exercised in the foreseeable future. By making this offer to exchange outstanding options for new options that will have an exercise price equal to the market value of the shares on the new grant date, we intend to provide our eligible employees with the benefit of owning options that over time may have a greater potential to increase in value, which creates better performance incentives for eligible employees and thereby maximizes stockholder value. (Page 12) WHAT ARE THE CONDITIONS TO THE OFFER? The offer is not conditioned on a minimum number of options being tendered. Participation in the offer is completely voluntary. The conditions are described in Section 7 of this Offer to Exchange. (Page 16) 2 8 ARE THERE ANY ELIGIBILITY REQUIREMENTS THAT YOU MUST SATISFY AFTER THE EXPIRATION DATE OF THE OFFER TO RECEIVE THE NEW OPTIONS? To receive a grant of new options through the offer and under the terms of the Stock Plan, you must be employed by Eprise or one of its subsidiaries as of the date the new options are granted. As discussed below, subject to the terms of this offer, we will grant the new options on or about the first business day which is at least six months and one day after the date we cancel the options accepted for exchange. If, for any reason, you do not remain an employee of Eprise or one of its subsidiaries through the date we grant the new options, you will not receive any new options or other consideration in exchange for your tendered options that have been accepted for exchange. (Page 11) HOW MANY NEW OPTIONS WILL YOU RECEIVE IN EXCHANGE FOR YOUR TENDERED OPTIONS? If you meet the eligibility requirements and subject to the terms of this offer, we will grant you new options to purchase the number of shares equal to the number of option shares you tender. New options will be granted under our Stock Plan, unless prevented by law or applicable regulations. All new options will be subject to a new option agreement between you and us. You must execute the new option agreement before receiving new options. (Page 11) WHEN WILL YOU RECEIVE YOUR NEW OPTIONS? We will grant the new options on or about the first business day which is at least six months and one day after the date we cancel the options accepted for exchange. Our Board of Directors will select the actual grant date for the new options. If we cancel tendered options on June 11, 2001, which is the scheduled date for the cancellation of the options (the next business day following the expiration date of the offer), the new options will not be granted until December 12, 2001, at the earliest. You must be an employee on the date we grant the new options in order to be eligible to receive them. (Page 15) WHY WON'T YOU RECEIVE YOUR NEW OPTIONS IMMEDIATELY AFTER THE EXPIRATION DATE OF THE OFFER? If we were to grant the new options on any date which is earlier than six months and one day after the date we cancel the options accepted for exchange, we would be subject to onerous accounting charges. We would be required for financial reporting purposes to treat the new options as variable awards. This means that we would be required to record the non-cash accounting impact of decreases and increases in the company's share price as a compensation expense for the new options issued under this offer. We would have to continue this variable accounting for these new options until they were exercised, forfeited or terminated. The higher the market value of our shares, the greater the compensation expense we would have to record. By deferring the grant of the new options for at least six months and one day, we believe we will not have to treat the new options as variable awards. IF YOU TENDER OPTIONS IN THE OFFER, WILL YOU BE ELIGIBLE TO RECEIVE OTHER OPTION GRANTS BEFORE YOU RECEIVE YOUR NEW OPTIONS? No. If we accept options you tender in the offer, you may not receive any other option grants before you receive your new options. Because of accounting rules that could apply to these interim option grants as a result of the offer, we will defer until the new option grant date the grant of any additional options for which you may otherwise be eligible before the new option grant date to avoid incurring compensation expense against our earnings. If we decide to grant you any additional options before the 3 9 grant date for the new options, we may issue a Promise to Grant Stock Option(s) to you on the date when such grant would no longer subject us to these onerous accounting charges as a result of the exchange offer. However, if you are no longer employed at Eprise or one of its subsidiaries on the date of grant of the new options, you will not receive new options even if a Promise to Grant Stock Option(s) has been issued to you. (Page 15) WILL YOU BE REQUIRED TO GIVE UP ALL YOUR RIGHTS TO THE CANCELLED OPTIONS? Yes. Once we have accepted options tendered by you, your options will be cancelled and you will no longer have any rights under those options. (Page 15) WHAT WILL THE EXERCISE PRICE OF THE NEW OPTIONS BE? The exercise price per share of the new options will be 100% of the fair market value on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the last business day before the date of grant. Accordingly, we cannot predict the exercise price of the new options. Because we will not grant new options until on or about the first business day that is at least six months and one day after the date we cancel the options accepted for exchange, the new options may have a higher exercise price than some or all of your current options. We recommend that you evaluate current and historical market quotes for our shares, among other factors, before deciding whether or not to tender your options. (Page 19) WHEN WILL THE NEW OPTIONS VEST? The vesting of the newly issued options will be in accordance with the vesting schedule of the cancelled options. You will receive credit for vesting accrued prior to the cancellation of the tendered options and will receive credit for the period between the cancellation of the tendered options and the grant of the new options. Each new option granted will vest as follows: - any shares that were fully vested on the date that the offer expires will be fully vested, - all unvested options on the date the offer expires that would have been fully vested on the date the new options are granted (at least six months and one day from the date the tendered options are cancelled) will be fully vested, and - all remaining unvested options will have a vesting schedule that is equivalent to what would have been in place had the cancelled option remained in effect. WHAT IF WE ENTER INTO A MERGER OR OTHER SIMILAR TRANSACTION? It is possible that, prior to the grant of new options, we might effect or enter into an agreement such as a merger or other similar transaction. The Promise to Grant Stock Option(s) which we will give you is a binding commitment, and any successor to our company will be required to honor that commitment. However, if your new options were to be granted under the acquiring company's stock option plan, these options would be subject to the terms and conditions of the acquiring company's stock plan 4 10 and related form of agreement. In addition, you may forfeit your right to acceleration of vesting upon a change in control if the transaction were to occur before your new options were granted. You should be aware that these types of transactions could have a substantial impact on our share price or the share price of the acquiring company, including potentially substantial appreciation in price. Depending on the structure of this type of transaction, tendering option holders might be deprived of any further price appreciation in the shares associated with the new options. For example, if our shares were acquired in a cash merger shortly after the new grant date, the fair market value of our shares, and hence the price at which we grant the new options, would likely be a price at or near the cash price being paid for the shares in the transaction, yielding limited or no financial benefit to a recipient of the new options for that transaction. In addition, in the event of an acquisition of our company for stock prior to the new grant date, tendering option holders would receive options to purchase shares of a different issuer. ARE THERE CIRCUMSTANCES WHERE YOU WOULD NOT BE GRANTED NEW OPTIONS? Yes. Even if we accept your tendered options, we will not grant new options to you if we are prohibited by applicable law or regulations from doing so. We will use reasonable efforts to avoid the prohibition, but if it is applicable on and after the first business day that is at least six months and one day after we cancel the options accepted for exchange, you will not be granted a new option. (Page 23) Also, if you are no longer an employee on the date we grant new options, you will not receive any new options. (Page 11) IF YOU CHOOSE TO TENDER AN OPTION WHICH IS ELIGIBLE FOR EXCHANGE, DO YOU HAVE TO TENDER ALL THE SHARES IN THAT OPTION? No. We will accept partial tenders of options, as well as the remaining portion of an option which you have partially exercised. Accordingly, you may tender one or more of your option grants in their entirety, or any portion of one or more grants, or none of your grants. Your Election Form must specify the number of shares you are tendering under each option, and you will be granted a "balancing" option for the untendered portion of any partially tendered option. Also, if you decide to tender any of your options, then you must tender all of your options that were granted to you during the six month period prior to the commencement of the offer. For example, if you received an option grant in January 2000 and a grant in February 2001 and you want to tender your January 2000 option grant, you would also be required to tender all options under your February 2001 option grant. (Page 11) WHAT HAPPENS TO OPTIONS THAT YOU CHOOSE NOT TO TENDER OR THAT ARE NOT ACCEPTED FOR EXCHANGE? Nothing. Options that you choose not to tender for exchange or that we do not accept for exchange remain outstanding until they expire by their terms. WILL YOU HAVE TO PAY TAXES IF YOU EXCHANGE YOUR OPTIONS IN THE OFFER? If you exchange your current options for new options, you should not be required under current law to recognize income for U.S. federal income tax purposes at the time of the exchange. Further, at the grant date of the new options, you will not be required under current law to recognize income for U.S. federal income tax purposes. For employees residing both in and outside of the United States, we 5 11 recommend that you consult with your own tax advisor to determine the tax and social insurance consequences of the offer under the laws of the country in which you live and work. (Page 23) IF YOUR CURRENT OPTIONS ARE INCENTIVE STOCK OPTIONS, WILL YOUR NEW OPTIONS BE INCENTIVE STOCK OPTIONS? If your current options are incentive stock options, your new options will be granted as incentive stock options to the maximum extent they qualify as incentive stock options under the tax laws on the date of the grant. For options to qualify as incentive stock options under the current tax laws, the value of shares subject to options that first become exercisable by the option holder in any calendar year cannot exceed $100,000, as determined using the option exercise price. The excess value is deemed to be a non-qualified stock option, which is an option that is not qualified to be an incentive stock option under the current tax laws. (Page 15) WHEN WILL YOUR NEW OPTIONS EXPIRE? Your new options will expire ten years from the date of grant, or earlier if your employment with Eprise terminates. (Page 18) WHEN DOES THE OFFER EXPIRE? CAN THE OFFER BE EXTENDED, AND IF SO, HOW WILL YOU BE NOTIFIED IF IT IS EXTENDED? The offer expires on June 8, 2001, at 5:00 p.m., Eastern Daylight Time, unless it is extended by us. We may, in our discretion, extend the offer at any time, but we cannot assure you that the offer will be extended or, if extended, for how long. If the offer is extended, we will make a public announcement of the extension no later than 8:00 a.m., Eastern Daylight Time, on the next business day following the previously scheduled expiration of the offer period. (Page 11) HOW DO YOU TENDER YOUR OPTIONS? If you decide to tender your options, you must deliver, before 5:00 p.m., Eastern Daylight Time, on June 8, 2001 (or such later date and time as we may extend the expiration of the offer), a properly completed and executed Election Form and any other documents required by the Election Form via facsimile (fax number (508) 661-5401) or hand delivery to Milt Alpern, Chief Financial Officer of Eprise. This is a one-time offer, and we will strictly enforce the tender offer period. We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept and cancel all properly tendered options promptly after the expiration of the offer. (Page 13) DURING WHAT PERIOD OF TIME MAY YOU WITHDRAW PREVIOUSLY TENDERED OPTIONS? You may withdraw your tendered options at any time before the offer expires at 5:00 p.m., Eastern Daylight Time, on June 8, 2001. If we extend the offer beyond that time, you may withdraw your tendered options at any time until the extended expiration of the offer. In addition, although we currently intend to cancel validly tendered options promptly after the expiration of this offer, if we have not accepted and cancelled your tendered options by July 9, 2001, you may withdraw your tendered options at any time after July 9, 2001. To withdraw tendered options, you must deliver to us via facsimile (fax number (508) 661-5401) or hand delivery to Milt Alpern a signed Notice to Change Election From Accept to Reject, with the required information while you still have the right to withdraw the tendered 6 12 options. Once you have withdrawn options, you may re-tender options only by again following the delivery procedures described above. (Page 14) CAN YOU CHANGE YOUR ELECTION REGARDING PARTICULAR TENDERED OPTIONS? Yes, you may change your election regarding particular tendered options at any time before the offer expires at 5:00 p.m., Eastern Daylight Time, on June 8, 2001. If we extend the offer beyond that time, you may change your election regarding particular tendered options at any time until the extended expiration of the offer. In order to change your election, you must deliver to us via facsimile (fax number (508) 661-5401) or hand delivery to Milt Alpern a new Election Form, which includes the information regarding your new election, and is clearly dated after your original Election Form. (Page 14) WHAT DO WE AND THE BOARD OF DIRECTORS THINK OF THE OFFER? Although the Compensation Committee of our Board of Directors has approved the offer, neither we nor our Board of Directors makes any recommendation as to whether you should tender or not tender your options. You must make your own decision whether or not to tender options. For questions regarding tax implications or other investment-related questions, you should talk to your own legal counsel, accountant and/or financial advisor. WHOM CAN YOU TALK TO IF YOU HAVE QUESTIONS ABOUT THE OFFER? For additional information or assistance, you should contact: Milt Alpern Chief Financial Officer Eprise Corporation 200 Crossing Boulevard Framingham, MA 01702 (508) 661-5200 CERTAIN RISKS OF PARTICIPATING IN THE OFFER Participation in the offer involves a number of potential risks, including those described below. This list briefly highlights some of the risks and is necessarily incomplete. Eligible participants should carefully consider these and other risks and are encouraged to speak with an investment and tax advisor as necessary before deciding whether and to what extent to participate in the offer. In addition, we strongly urge you to read the rest of this Offer to Exchange, along with the memorandum from Joe Forgione dated May 10, 2001, the Election Form and the Notice to Change Election from Accept to Reject before deciding whether and to what extent to participate in the exchange offer. The list of risks does not include certain risks that may apply to employees who live and work outside of the United States; again, we urge you to consult with an investment and tax advisor as necessary before deciding whether to participate in this exchange offer. 7 13 ECONOMIC RISKS PARTICIPATION IN THE OFFER WILL MAKE YOU INELIGIBLE TO RECEIVE ANY OPTION GRANTS UNTIL DECEMBER 12, 2001 AT THE EARLIEST. Employees are generally eligible to receive option grants at any time that the Board of Directors or Compensation Committee chooses to make them. However, if you participate in the offer, you will not be eligible to receive any option grants until December 12, 2001 at the earliest. IF THE STOCK PRICE INCREASES AFTER THE DATE YOUR TENDERED OPTIONS ARE CANCELLED, YOUR CANCELLED OPTIONS MIGHT HAVE BEEN WORTH MORE THAN THE REPLACEMENT OPTIONS THAT YOU HAVE RECEIVED IN EXCHANGE FOR THEM. For example, if you cancel options with a $3.00 exercise price per share, and Eprise's stock price appreciates to $4.00 before the replacement grants are made, your replacement option will have a higher exercise price than the cancelled option. IF YOUR EMPLOYMENT TERMINATES PRIOR TO THE GRANT OF THE REPLACEMENT OPTION, YOU WILL RECEIVE NEITHER A REPLACEMENT OPTION NOR THE RETURN OF YOUR CANCELLED OPTION. Once your option is cancelled, it is gone for good. Accordingly, if your employment terminates for any reason prior to the grant of the replacement option, you will have the benefit of neither the cancelled option nor the replacement option. THE COMPANY INVESTIGATES STRATEGIC OPPORTUNITIES FROM TIME TO TIME WHICH, IF CONCLUDED, COULD AFFECT THE PRICING AND/OR TERMS OF YOUR NEW OPTIONS. The Company engages in discussions from time to time regarding potential strategic opportunities, including financings, strategic partnering relationships, and acquisitions. If any of these transactions were to occur before the new options are granted, your new options could be granted at a higher exercise price, and could be subject to terms and conditions required by an investing or acquiring party. Also, you could forfeit any acceleration of vesting to which you would otherwise be entitled under your existing options. TAX-RELATED RISKS FOR U.S. RESIDENTS YOUR REPLACEMENT OPTION MAY BE A NONQUALIFIED STOCK OPTION, WHEREAS YOUR CANCELLED OPTION MAY HAVE BEEN AN INCENTIVE STOCK OPTION. If your cancelled option was an incentive stock option, your new option will be an incentive stock option, but only to the extent it qualifies as such under the Internal Revenue Code of 1986, as amended. For options to qualify as incentive stock options, the value of shares subject to options that first become exercisable by the option holder in any calendar year cannot exceed $100,000, as determined using the option exercise price. It is possible that by participating in this exchange, due to the accelerated vesting schedule and/or the new exercise price, your options will exceed this limit and will be treated as nonqualified stock options. In general, nonqualified stock options are less favorable to you from a tax perspective. For more detailed information, please read the rest of the Offer to Exchange, and see the tax disclosure set forth in the prospectus for the Eprise Corporation 1997 Stock Plan. 8 14 YOUR REPLACEMENT INCENTIVE STOCK OPTIONS WILL BE SUBJECT TO A NEW HOLDING PERIOD FOR CERTAIN FAVORABLE TAX TREATMENT. Holders of incentive stock options receive certain favorable tax treatment under the Internal Revenue Code. First, you will not incur ordinary income tax when you exercise an incentive stock option (although you may be subject to alternative minimum tax). Second, any profit you realize when you sell shares acquired upon the exercise of an incentive stock option will be taxed at the capital gains rate. However, in order to qualify for this treatment, you may not sell your option shares earlier than one year after the date of exercise and two years after the date of grant. If you participate in the offer, you will be cancelling your existing options and receiving a new grant. Therefore, you will lose the benefit of any holding period under the old options and you will begin a new holding period under the new options. If you want to receive the tax benefits accorded to incentive stock options, you will not be able to sell your option shares before December 2003. Please see Section 14, "Material U.S. Federal Income Tax Consequences," below for a more detailed description of the tax treatment of incentive stock options. You should consult with your tax advisor for further information about this risk. BUSINESS RELATED RISKS For a description of risks related to Eprise's business, please see Section 18 of this Offer to Exchange. 9 15 INTRODUCTION Eprise Corporation ("Eprise") is offering to exchange all outstanding options to purchase shares of Eprise common stock held by eligible employees for new options we will grant under the Eprise Corporation Amended and Restated 1997 Stock Option Plan (the "Stock Plan"). An "eligible employee" refers to employees of Eprise and certain of its subsidiaries who are employees both as of the date the offer commences and as of the date the tendered options are cancelled. Members of our Board of Directors, including employee directors, are not eligible to participate in the exchange offer. We are making the offer upon the terms and the conditions described in this Offer to Exchange and in the related memorandum from Joe Forgione dated May 10, 2001, the Election Form and the Notice to Change Election from Accept to Reject (which together, as they may be amended from time to time, constitute the "offer"). The number of shares subject to the new options to be granted to each eligible employee will be equal to the number of shares subject to the options tendered by the eligible employee and accepted for exchange. Subject to the terms and conditions of this offer, we will grant the new options on or about the first business day which is at least six months and one day after the date we cancel the options accepted for exchange. The grant date for the new options will be December 12, 2001, at the earliest, unless the offer is extended, in which case the grant date of the new options will be similarly extended. You may tender options for all, some or none of the unexercised shares subject to an individual option grant. All tendered options accepted by us through the offer will be cancelled on the day following the date the offer expires or as soon as possible thereafter (the "Cancellation Date"). If you tender any options for exchange, you will be required to also tender all options granted to you during the six month period immediately prior to the offer period. This means that if you participate in the offer, you will be required to tender all options granted to you since November 10, 2000. The offer is not conditioned on a minimum number of options being tendered. The offer is subject to conditions that we describe in section 7 of this Offer to Exchange. If you tender options for exchange as described in the offer and we accept your tendered options, then, subject to the terms of this offer, we will grant you new options under our Stock Plan. The exercise price per share of the new options will be 100% of the fair market value on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the last business day before the date of grant. Each new option will be exercisable for the same number of shares as remained outstanding under the tendered options. The new options will vest in accordance with the vesting schedule of the cancelled options. Each new option granted will vest as follows: - any shares that were fully vested on the date that the offer expires will be fully vested, - all unvested options on the date the offer expires that would have been fully vested on the date the new options are granted (at least six months and one day from the Cancellation Date) will be fully vested, and - all remaining unvested options will have a vesting schedule that is equivalent to what would have been in place had the cancelled option remained in effect. 10 16 As of April 30, 2001, options to purchase 2,718,249 shares of Eprise common stock were issued and outstanding, of which options to purchase approximately 2,056,660 shares, constituting approximately 75.7%, were held by eligible employees. THE OFFER 1. Eligibility. Employees are "eligible employees" if they (i) are employees of Eprise Corporation ("Eprise") or one of Eprise's subsidiaries as of the date the offer commences and the date on which the tendered options are cancelled and (ii) received their first option grant under the Stock Plan before January 1, 2001. However, members of the Board of Directors, including employee directors, are not eligible to participate in the offer. The directors of Eprise are listed in Schedule A to this Offer to Exchange. In order to receive a new option, you must remain an employee as of the date the new options are granted, which will be at least six months and one day after the Cancellation Date. If Eprise does not extend the offer, the new options will be granted on or shortly after December 12, 2001. 2. Number of options; expiration date. Subject to the terms and conditions of the offer, we will exchange all outstanding, unexercised options held by eligible employees that are properly tendered and not validly withdrawn in accordance with Section 5 before the "expiration date," as defined below, in return for new options. We will accept partial tenders of options for any portion of the shares subject to an individual option grant. Therefore, you may tender options for all, some or none of the shares subject to each of your eligible options. If you tender only part of an option, we will issue you a "balancing" option for the untendered shares. In addition, if you tender any option grant or portion thereof for exchange, you will be required to also tender all options granted to you during the six month period prior to the date the offer commenced. This means that if you participate in the offer, you will be required to tender all options granted to you since November 10, 2000. If your options are properly tendered and accepted for exchange, the options will be cancelled and, subject to the terms of this offer, you will be entitled to receive one or more new options to purchase the number of shares of common stock equal to the number of option shares tendered by you and accepted for exchange, subject to adjustments for any stock splits, stock dividends and similar events. All new options will be subject to the terms of our Stock Plan, and to a new option agreement between you and us. If, for any reason, you do not remain an employee of Eprise or its subsidiaries through the date we grant the new options, you will not receive any new options or other consideration in exchange for your tendered options that have been accepted for exchange. This means that if you quit, with or without a good reason, or die or we terminate your employment, with or without cause, prior to the date we grant the new options, you will not receive anything for the options that you tendered and we cancelled. The term "expiration date" means 5:00 p.m., Eastern Daylight Time, on June 8, 2001, unless and until we, in our discretion, have extended the period of time during which the offer will remain open, in which event the term "expiration date" refers to the latest time and date at which the offer, as so extended, expires. See Section 15 of this Offer to Exchange for a description of our rights to extend, delay, terminate and amend the offer. If we decide to take any of the following actions, we will publish notice or otherwise inform you in writing of such action: 11 17 - increase or decrease the amount of consideration offered for the options, - decrease the number of options eligible to be tendered in the offer, or - increase the number of options eligible to be tendered in the offer by an amount that exceeds 2% of the shares issuable upon exercise of the options that are subject to the offer immediately prior to the increase. If the offer is scheduled to expire at any time earlier than the tenth (10th) business day from, and including, the date that notice of the increase or decrease is first published, sent or given in the manner specified in Section 15 of this Offer to Exchange, we will extend the offer so that the offer is open at least ten (10) business days following the publication, sending or giving of notice. We will also notify you of any other material change in the information contained in this Offer to Exchange. For purposes of the offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, Eastern Daylight Time. 3. Purpose of the offer. We issued the options outstanding to provide our eligible employees with additional incentive, to promote the success of our business, and to encourage our eligible employees to continue their employment with us. One of the keys to our continued growth and success is the retention of our most valuable asset, our employees. The offer provides an opportunity for us to offer our eligible employees a valuable incentive to stay with Eprise. Some of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current market price of our shares. We believe these options are unlikely to be exercised in the foreseeable future. By making this offer to exchange outstanding options for new options that will have an exercise price equal to the market value of the shares on the grant date, we intend to provide our eligible employees with the benefit of owning options that over time may have a greater potential to increase in value, create better performance incentives for employees and thereby maximize stockholder value. However, because we will not grant new options until at least six months and one day after the date we cancel the options accepted for exchange, the new options may have a higher exercise price than some or all of our current outstanding options. From time to time we engage in strategic transactions with business partners, customers and other third parties. We may engage in transactions in the future with these or other companies which could significantly change our structure, ownership, organization or management or the make-up of our Board of Directors, and which could significantly affect the price of our shares. If we engage in such a transaction or transactions before the date we grant the new options, our shares could increase (or decrease) in value, and the exercise price of the new options could be higher (or lower) than the exercise price of options you elect to have cancelled as part of this offer. As outlined in Section 9, the exercise price of any new options granted to you in return for your tendered options will be the fair market value of the underlying shares on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the last business day before the date of grant. You will be at risk of any such increase in our share price before the grant date of the new options for these or any other reasons. 12 18 Neither we nor our Board of Directors makes any recommendation as to whether you should tender or not tender your options, nor have we authorized any person to make any such recommendation. You are urged to evaluate carefully all of the information in this Offer to Exchange and to consult your own investment and tax advisors. You must make your own decision whether or not to tender your options for exchange. 4. Procedures for tendering options. Proper Tender of Options. To validly tender your options through the offer, you must, in accordance with the terms of the Election Form, properly complete, execute and deliver the Election Form to us via facsimile (fax number (508) 661-5401) or hand delivery to Milt Alpern, along with any other required documents. Milt Alpern must receive all of the required documents before the expiration date. The expiration date is 5:00 PM Eastern Daylight Time on June 8, 2001. THE DELIVERY OF ALL DOCUMENTS, INCLUDING ELECTION FORMS AND ANY NOTICES TO CHANGE ELECTION FROM ACCEPT TO REJECT AND ANY OTHER REQUIRED DOCUMENTS, IS AT YOUR RISK. Determination of Validity; Rejection of Options; Waiver of Defects; No Obligation to Give Notice of Defects. We will determine, in our discretion, all questions as to the form of documents and the validity, form, eligibility, including time of receipt, and acceptance of any tender of options. Our determination of these matters will be final and binding on all parties. We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we will accept properly and timely tendered options that are not validly withdrawn. We also reserve the right to waive any of the conditions of the offer or any defect or irregularity in any tender of any particular options or for any particular option holder. No tender of options will be deemed to have been properly made until all defects or irregularities have been cured by the tendering option holder or waived by us. Neither we nor any other person is obligated to give notice of any defects or irregularities in tenders, nor will anyone incur any liability for failure to give any notice. This is a one-time offer, and we will strictly enforce the offer period, subject only to an extension which we may grant in our sole discretion. Our Acceptance Constitutes an Agreement. Your tender of options pursuant to the procedures described above constitutes your acceptance of the terms and conditions of the offer. OUR ACCEPTANCE FOR EXCHANGE OF YOUR OPTIONS TENDERED BY YOU THROUGH THE OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN US AND YOU UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept promptly after the expiration of the offer all properly tendered options that have not been validly withdrawn. 13 19 5. Withdrawal Rights and Change of Election. You may only withdraw your tendered options or change your election in accordance with the provisions of this Section. You may withdraw your tendered options at any time before 5:00 p.m., Eastern Daylight Time, on June 8, 2001. If we extend the offer beyond that time, you may withdraw your tendered options at any time until the extended expiration of the offer. In addition, if we have not accepted your tendered options for exchange by 5:00 p.m., Eastern Daylight Time, on July 9, 2001, you may withdraw your tendered options at any time thereafter. To validly withdraw tendered options, you must deliver to Milt Alpern via facsimile (fax number (508) 661-5401) or hand delivery, in accordance with the procedures listed in Section 4 above, a signed and dated Notice to Change Election From Accept to Reject, with the required information, while you still have the right to withdraw the tendered options. To validly change your election regarding the tender of particular options, you must deliver a new Election Form to Milt Alpern via facsimile (fax number (508) 661-5401) or hand delivery, in accordance with the procedures listed in Section 4 above. If you deliver a new Election Form that is properly signed and dated, it will replace any previously submitted Election Form, which will be disregarded. The new Election Form must be signed and dated and must specify: - the name of the option holder who tendered the options, - the original number of shares for which each tendered option was exercisable, - the grant date of each option to be tendered, - the exercise price under each option to be tendered, - the total number of shares exercised under each option; and - the total number of shares being tendered for cancellation under each option. Except as described in the following sentence, the Notice to Change Election From Accept to Reject and any new or amended Election Form must be executed by the option holder who tendered the options to be withdrawn exactly as the option holder's name appears on the option agreement or agreements evidencing such options. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or another person acting in a fiduciary or representative capacity, the signer's full title and proper evidence of the authority of such person to act in that capacity must be indicated on the notice of withdrawal. If you wish to withdraw a Notice to Change Election From Accept to Reject, you must properly re-tender the withdrawn options before the expiration date by following the procedures described in Section 4. Otherwise, any options you withdraw will thereafter be deemed not properly tendered for purposes of the offer and will remain outstanding. Neither we nor any other person is obligated to give notice of any defects or irregularities in any Notice to Change Election From Accept to Reject or any new or amended Election Form, nor will anyone incur any liability for failure to give any notice. We will determine, in our discretion, all questions as to 14 20 the form and validity, including time of receipt, of Notices to Change Election From Accept to Reject and new or amended Election Forms. Our determination of these matters will be final and binding. 6. Acceptance of options for exchange and issuance of new options. Upon the terms and conditions of the offer and as promptly as practicable following the expiration date, we will accept for exchange and cancel options properly tendered and not validly withdrawn before the expiration date. Once the options are cancelled, you will no longer have any rights with respect to those options. Subject to the terms and conditions of this offer, if your options are properly tendered and accepted for exchange, these options will be cancelled as of the date of our acceptance, which we anticipate to be June 11, 2001, and you will be granted new options on or about the first business day that is at least six months and one day after the date we cancel the options accepted for exchange. If the options you tendered were incentive stock options, your new options will also be incentive stock options, to the extent they qualify as incentive stock options under the Internal Revenue Code of 1986, as amended. All other newly granted options will be nonqualified stock options. Thus, subject to the terms and conditions of this offer, if your options are properly tendered by June 8, 2001, the scheduled expiration date of the offer, and accepted for exchange and cancelled on June 11, 2001 you will be granted new options on or about December 12, 2001. If we accept and cancel options properly tendered for exchange after June 11, 2001, the period in which the new options will be granted will be similarly delayed. As promptly as practicable after we accept and cancel options tendered for exchange, we will issue to you a Promise to Grant Stock Option(s), by which we will commit to grant stock options to you on a date no earlier than December 12, 2001 covering the same number of shares as the options cancelled pursuant to this offer, provided that you remain an eligible employee on the date on which the grant is to be made. If we accept options you tender in the offer, we will defer any grant to you of additional options for which you may be eligible before the new option grant date until after the new option grant date, so that you will be granted no new options for any reason until at least six months and one day after any of your tendered options have been cancelled. We will defer the grant to you of any additional options in order to avoid incurring compensation expense against our earnings as a result of accounting rules that could apply to these interim option grants as a result of the offer. We may issue to you a Promise to Grant Stock Option(s), which is a binding commitment to grant you an option or options on a date no earlier than December 12, 2001, at the then-current market price, provided that you remain an eligible employee on the date on which the grant is to be made. Your new options will entitle you to purchase the number of shares which is equal to the number of shares subject to the options you tender, as adjusted for any stock splits, stock dividends and similar events. If, for any reason, you are not an employee of Eprise or its subsidiaries through the date we grant the new options, you will not receive any new options or other consideration in exchange for your tendered options which have been cancelled pursuant to this offer. We will accept partial tenders of your eligible option grants, including the remaining portion of an option which you have partially exercised. Accordingly, you may tender one or more of your option grants, or any portion of one or more of your option grants, but only to the extent such grant has not previously been exercised. If you tender only a portion of an option, we will issue a "balancing" option for the untendered shares. In addition, if you tender any option grant or portion thereof for exchange, you will be required to also tender all options granted to you during the six month period prior to commencement of the offer period. This means that if you participate in the offer, you will be required to tender all options granted to you since November 10, 2000. 15 21 Within twenty-four (24) to forty-eight (48) hours of the receipt of your Election Form or your Notice to Change Election From Accept to Reject, Eprise will e-mail the option holder a Confirmation of Receipt (provided you give us a valid e-mail address at the time of submitting your Election Form). However, this is not by itself an acceptance of the options for exchange. For purposes of the offer, we will be deemed to have accepted options for exchange that are validly tendered and not properly withdrawn as of the time when we give oral or written notice to Milt Alpern, or to the option holders, of our acceptance for exchange of such options, which notice may be made by press release or otherwise. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept promptly after the expiration of the offer all properly tendered options that are not validly withdrawn. 7. Conditions of the offer. Notwithstanding any other provision of the offer, we will not be required to accept any options tendered for exchange, and we may terminate or amend the offer, or postpone our acceptance and cancellation of any options tendered for exchange, in each case, subject to Rule 13e-4(f)(5) under the Securities Exchange Act, if at any time on or after May 10, 2001, and prior to the expiration date, any of the following events has occurred, or has been determined by us to have occurred, and, in our reasonable judgment in any case and regardless of the circumstances giving rise to the event, including any action or omission to act by us, the occurrence of such event or events makes it inadvisable for us to proceed with the offer or with such acceptance and cancellation of options tendered for exchange: - there shall have been threatened or instituted or be pending any action or proceeding by any governmental, regulatory or administrative agency or authority that directly or indirectly challenges the making of the offer, the acquisition of some or all of the tendered options pursuant to the offer, or the issuance of new options, or otherwise relates in any manner to the offer, or that, in our reasonable judgment, could materially and adversely affect our business, condition, income, operations or prospects or materially impair the contemplated benefits of the offer to Eprise; - there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be eligible to the offer or Eprise, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might directly or indirectly: (1)make the acceptance for exchange of, or issuance of new options for, some or all of the tendered options illegal or otherwise restrict or prohibit consummation of the offer or that otherwise relates in any manner to the offer; (2) delay or restrict our ability, or render us unable, to accept for exchange, or issue new options for, some or all of the tendered options; (3) materially impair the contemplated benefits of the offer to Eprise; or (4) materially and adversely affect Eprise's business, condition, income, operations or prospects or materially impair the contemplated benefits of the offer to Eprise; - there shall have occurred any change, development, clarification or position taken in generally accepted accounting standards that could or would require us to record compensation expense against our earnings in connection with the offer for financial reporting purposes; 16 22 - a tender or exchange offer for some or all of our shares, or a merger or acquisition proposal for Eprise, shall have been proposed, announced or made by another person or entity or shall have been publicly disclosed; or - any change or changes shall have occurred in Eprise's business, condition, assets, income, operations, prospects or stock ownership that, in our reasonable judgment, is or may be material to Eprise or may materially impair the contemplated benefits of the offer to Eprise. The conditions to the offer are for Eprise's benefit. We may assert them in our discretion regardless of the circumstances giving rise to them before the expiration date. We may waive them, in whole or in part, at any time and from time to time prior to the expiration date, in our discretion, whether or not we waive any other condition to the offer. Our failure at any time to exercise any of these rights will not be deemed a waiver of any such rights. The waiver of any of these rights with respect to particular facts and circumstances will not be deemed a waiver with respect to any other facts and circumstances. Any determination we make concerning the events described in this Section 7 will be final and binding upon all persons. 8. Price range of shares underlying the options. The shares underlying your options are currently traded on the Nasdaq National Market under the symbol "EPRS". The following table shows, for the periods indicated, the high and low sales prices per share of our common stock as reported by the Nasdaq National Market, as adjusted for stock dividends and stock splits.
HIGH LOW FISCAL YEAR 2001 Quarter ended March 31, 2001 $ 2.47 $ 0.66 FISCAL YEAR 2000 Quarter ended December 31, 2000 8.25 1.50 Quarter ended September 30, 2000 20.13 7.88 Quarter ended June 30, 2000 18.94 8.72 Quarter ended March 24 through March 31, 2000 25.38 15.75
As of May 7, 2001, the last reported sale price during regular trading hours of our common stock, as reported by the Nasdaq National Market, was $1.00 per share. WE RECOMMEND THAT YOU EVALUATE CURRENT AND HISTORICAL MARKET QUOTES FOR OUR COMMON STOCK, AMONG OTHER FACTORS, BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. 9. Source and amount of consideration; terms of new options. Consideration. We will issue new options to purchase shares of common stock under our Stock Plan in exchange for the outstanding options properly tendered and accepted for exchange by us, which options will be cancelled. The number of shares subject to the new options to be granted to each option holder will be 17 23 equal to the number of shares subject to the options tendered by the option holder and accepted for exchange and cancelled by us, as adjusted for any stock splits, reverse stock splits, stock dividends and similar events. If we receive and accept tenders of all outstanding options from eligible employees, subject to the terms and conditions of this offer we will grant new options to purchase a total of up to approximately 2,056,660 shares of common stock. The shares issuable upon exercise of these new options would equal approximately 8.7% of the total shares of our common stock outstanding as of April 30, 2001. Terms of New Options. The new options will be granted under our Stock Plan. A new option agreement will be entered into between Eprise and each option holder who has tendered options in the offer for every new option granted. The terms and conditions of the new options may vary from the terms and conditions of the options tendered for exchange, but generally this will not substantially and adversely affect the rights of option holders. Because we will not grant new options until at least six months and one day after the date we cancel the options accepted for exchange, the new options may have a higher exercise price than some or all of the options, including as a result of a significant corporate event. The following description summarizes the material terms of our Stock Plan and the options to be granted under the Stock Plan. Stock Plan. The maximum number of shares available for issuance through the exercise of options granted under our Stock Plan is 5,777,165, plus an automatic increase to be added on January 1, 2002 equal to the lesser of 1,372,549 shares or 5% of the outstanding shares on December 31, 2001. Our Stock Plan permits the granting of options intended to qualify as incentive stock options under the Internal Revenue Code and options that do not qualify as incentive stock options, referred to as nonqualified stock options. Administration. The Stock Plan is administered by the Compensation Committee of our Board of Directors (the "Administrator"). Subject to the other provisions of the Plans, the Administrator has the power to determine the terms and conditions of the options granted, including the exercise price, the number of shares subject to the option and the exercisability of the options. Term. Options generally have a term of ten (10) years. Incentive Stock Options granted to an employee who, at the time the incentive stock option is granted, owns stock representing more than 10% of the voting rights of all classes of stock of Eprise or an affiliate company have a term of no more than five (5) years. Termination. Except as your option agreement otherwise provides, your options will terminate following the termination of your employment, unless the options are exercised, to the extent that they were exercisable immediately before such termination, within three (3) months following your termination. In the event that the termination of your employment is by reason of permanent or total disability or death, you, or your executors, administrators, legatees or distributees of your estate, may exercise any option held by you at the date of your employment termination, to the extent that it was exercisable immediately before such termination, within twelve (12) months following such termination. 18 24 If you have exercised any so-called "reverse-vested" options to purchase restricted shares of our common stock, your shares will cease to vest on the termination date and we will have the right to repurchase any of your unvested shares, at their original exercise price, during the 90 days following such termination. The termination of your option under the circumstances specified in this section will result in the termination of your interests in our Stock Plan. In addition, your option may terminate, together with our stock option plans and all other outstanding options issued to other employees, following the occurrence of certain corporate events, as described below. Exercise Price. The Administrator determines the exercise price at the time the option is granted. For all eligible employees, the exercise price per share of the new options will be 100% of the fair market value on the date of grant, as determined by the closing price reported by the Nasdaq National Market on the last business day before the date of grant. However, the exercise price may not be less than 110% of the closing price per share reported by the Nasdaq National Market on the last business day before the date of grant for options intended to qualify as incentive stock options granted to an employee who, at the time the incentive stock option is granted, owns stock representing more than 10% of the voting rights of all classes of stock of Eprise or an affiliate company. Vesting and Exercise. Each stock option agreement specifies the term of the option and the date when the option becomes exercisable. The terms of vesting are determined by the Administrator. Options granted by us generally vest at a rate of 25% of the shares subject to the option after twelve months, and then either 1/4th of the total shares subject to the option vest each year thereafter, or 1/16th of the total shares subject to the option vest each quarter thereafter, as applicable, provided the employee remains continuously employed by Eprise. The new options granted through the offer will vest as follows: - any shares that were fully vested on the date that the offer expires will be fully vested, - all unvested options on the date the offer expires that would have been fully vested on the date the new options are granted (at least six months and one day from the date this offer expires) will be fully vested, and - all remaining unvested options will have a vesting schedule that is equivalent to what would have been in place had the cancelled option remained in effect. Payment of Exercise Price. You may exercise your options, in whole or in part, by delivery of a written notice to us together with a share subscription or purchase form which is accompanied by payment in full of the eligible exercise price. The permissible methods of payment of the option exercise price are determined by the Administrator and generally include the following: - cash, 19 25 - check, - promissory note, - certain other shares of our common stock, - delivery of a properly executed notice together with such other documentation as the Board of Directors and the broker, if applicable, shall require to effect exercise of the option and delivery to us of the sale or loan proceeds required to pay the exercise price, or - a combination of the foregoing methods. Adjustments Upon Certain Events. If there is a change in our capitalization, such as a stock split, reverse stock split, stock dividend or other similar event, and the change results in an increase or decrease in the number of issued shares without receipt of consideration by us, an appropriate adjustment will be made to the price of each option and the number of shares subject to each option. If, following the new grant date, there is a sale of all or substantially all of our assets, or we merge with another corporation, vesting of your options will accelerate by 12 months, and your options will be assumed or replaced with new options of the successor corporation. If the successor corporation does not assume or substitute your options, you will either (i) be required to exercise any vested portion within a specified period of time, after which all unexercised options shall terminate, or (ii) receive a cash payment in exchange for termination of your options equal to the excess of the fair market value of the underlying shares (to the extent vested) over the exercise price of such options. (These terms will not necessarily apply if a sale or merger occurs before the new options are granted.) If there is a liquidation or dissolution of Eprise, your outstanding options will terminate immediately prior to the consummation of the liquidation or dissolution. The Administrator may, at the discretion of the Board of Directors, provide for the acceleration of the exercisability of any option. Transferability of Options. New options, whether incentive stock options or non-qualified stock options, may not be transferred, other than by will or the laws of descent and distribution. In the event of your death, options may be exercised by a person who acquires the right to exercise the option by bequest or inheritance. Termination of Employment. If, for any reason, you are not an employee of Eprise from the date you tender options through the date we grant the new options, you will not receive any new options or any other consideration in exchange for your tendered options that have been accepted for exchange. This means that if you quit, with or without good reason, or die, or we terminate your employment, with or without cause, before the date we grant the new options, you will not receive anything for the options that you tendered and which we cancelled. 20 26 Registration of Option Shares. A total of 6,251,318 shares of common stock issuable upon exercise of options under our Stock Plan have been registered under the Securities Act on a registration statement on Form S-8 filed with the SEC. All the shares issuable upon exercise of all new options to be granted before the offer will be registered under the Securities Act. Unless you are one of our affiliates, you will be able to sell your option shares free of any transfer restrictions under applicable U.S. securities laws. U.S. Federal Income Tax Consequences. You should refer to Section 14 of this Offer to Exchange for a discussion of the U.S. federal income tax consequences of the new options and the options tendered for exchange, as well as the consequences of accepting or rejecting the new options under this offer to exchange. If you are an employee based outside of the United States, you should consult with your own tax advisor to determine the tax and social insurance consequences of this transaction under the laws of the country in which you live and work. Our statements in this Offer to Exchange concerning our Stock Plan and the new options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of our Stock Plan and the forms of option agreement under the Stock Plan. Please contact us at Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702 (telephone: (508) 661-5200), to receive a copy of our Stock Plan and the forms of option agreement thereunder. We will promptly furnish you copies of these documents at our expense. 10. Information concerning Eprise. Our principal executive offices are located at 200 Crossing Boulevard, Framingham, MA 01702, and our telephone number is (508) 661-5200. We provide software products and services that enable businesses to create and publish effective Web content quickly and easily. Our core product, Eprise Participant Server, enables a business organization to distribute this Web content management function among the appropriate individuals within the enterprise who are charged with particular aspects of the Web business. Eprise Participant Server allows businesses to carefully manage changes to Web content through rules contained in the software which govern Web content access and approval rights. Eprise Participant Server enables an enterprise to have Web site content which is dynamic, up to the minute and responsive to the needs of customers, business partners, employees and others who visit the enterprise's Web site. The financial information included in our annual report on Form 10-K for the fiscal year ended December 31, 2000 is incorporated herein by reference. See "Additional Information" beginning on page 26 for instructions on how you can obtain copies of our SEC filings, including filings that contain our financial statements. 11. Interests of directors and officers; transactions and arrangements concerning the options. A list of our directors and executive officers is attached to this Offer to Exchange as Schedule A. As of April 30, 2001, our executive officers and non-employee directors (sixteen (16) persons) as a group beneficially owned options outstanding under our Stock Plan to purchase a total of 1,141,945 shares, which represented approximately 42.0% of the shares subject to all options outstanding as of that date. Options to purchase our shares owned by directors, including employee directors, are not eligible to be tendered in the offer. Options to purchase a total of 455,096 of our shares, or 16.7% of all options 21 27 outstanding, are held by eligible non-director officers and may be tendered in the offer upon the terms and conditions set forth herein. In the sixty (60) days prior to and including May 10, 2001, Eprise and its executive officers and directors completed the following transactions in Eprise options and shares: Eprise: - Repurchased a total of 1,219,348 shares of Eprise common stock in the open market, at an average purchase price of $0.91 per share, pursuant to a previously-announced stock repurchase program. - Repurchased a total of 227,646 shares of its common stock from former employees, at an average purchase price of $0.52 per share, pursuant to the terms of our Stock Plan and the options granted thereunder. - Granted a total of 481,413 options to purchase shares of common stock to employees and consultants, at an exercise price of $1.07 per share. Grants to new employees and consultants are not eligible for tender in the offer. Grants to existing employees must be cancelled if the employee wishes to tender any previously-granted options in the offer. Officers/Directors: - Joseph Noonan, our Senior Vice President of Worldwide Sales and Services, was granted an option to purchase 125,000 shares of our common stock at an exercise price of $1.07 per share. This option is not eligible for tender in the offer. - Kathy Kessel, our Vice President of Marketing, was granted an option to purchase 120,000 shares of our common stock at an exercise price of $1.07 per share. This option is not eligible for tender in the offer. Except as otherwise described above, there have been no transactions in options to purchase our shares or in our shares which were effected during the 60 days prior to May 10, 2001 by Eprise or, to our knowledge, by any executive officer, director or affiliate of Eprise. 12. Status of options acquired by us in the offer; accounting consequences of the offer. Options we acquire through the offer will be cancelled and the shares subject to those options will be returned to the pool of shares available for grants of new options under the Stock Plan. To the extent these shares are not fully reserved for issuance upon exercise of the new options to be granted in connection with the offer, the shares will be available for future awards to employees and other eligible plan participants without further stockholder action, except as required by applicable law or the rules of the Nasdaq National Market or any other securities quotation system or any stock exchange on which our shares are then quoted or listed. We believe that we will not incur any compensation expense solely as a result of the transactions contemplated by the offer because: - we will not grant any new options until a business day that is at least six months and one day after the date that we accept and cancel options tendered for exchange, and 22 28 - the exercise price of all new options will equal the market value of the shares of common stock on the date we grant the new options. 13. Legal matters; regulatory approvals. We are not aware of any license or regulatory permit that appears to be material to our business that might be adversely affected by our exchange of options and issuance of new options as contemplated by the offer, or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of our options as contemplated herein. Should any such approval or other action be required, we presently contemplate that we will seek such approval or take such other action. We cannot assure you that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions, or that the failure to obtain any such approval or other action might not result in adverse consequences to our business. Our obligation under the offer to accept tendered options for exchange and to issue new options for tendered options is subject to the conditions described in Section 7. If we are prohibited by applicable laws or regulations from granting new options immediately after the day that is 6 months and 1 day from the date that we cancel the options accepted for exchange, when we currently expect to grant the new options, we will not grant any new options. We are unaware of any such prohibition at this time, and we will use reasonable efforts to effect the grant, but if the grant is prohibited throughout the period we will not grant any new options and you will not get any other consideration for the options you tendered. 14. Material U.S. Federal Income Tax Consequences. The following is a general summary of the material U.S. federal income tax consequences of the exchange of options pursuant to the offer. This discussion is based on the Internal Revenue Code, its legislative history, Treasury Regulations thereunder and administrative and judicial interpretations thereof as of the date of the offer, all of which are subject to change, possibly on a retroactive basis. This summary does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, nor is it intended to be applicable in all respects to all categories of option holders. Option holders who exchange outstanding options for new options should not be required to recognize income for federal income tax purposes at the time of the exchange. We believe that the exchange will be treated as a non-taxable exchange. WE ADVISE ALL OPTION HOLDERS CONSIDERING EXCHANGING THEIR OPTIONS TO MEET WITH THEIR OWN TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER. Incentive Stock Options. Under current law, an option holder will not realize taxable income upon the grant of an incentive stock option under our Stock Plan. In addition, an option holder generally will not realize taxable income upon the exercise of an incentive stock option. However, an option holder's alternative minimum taxable income will be increased by the amount that the aggregate fair market value of the shares underlying the option, which is generally determined as of the date of exercise, exceeds the aggregate exercise price of the option. Except in the case of an option holder's death or disability, if an option is exercised more than three months after the option holder's termination of employment, the option ceases to be treated as an incentive stock option and is subject to taxation under the rules that apply to non-qualified stock options. 23 29 If an option holder sells the option shares acquired upon exercise of an incentive stock option, the tax consequences of the disposition depend upon whether the disposition is qualifying or disqualifying. The disposition of the option shares is qualifying if it is made: - at least two years after the date the incentive stock option was granted, and - at least one year after the date the incentive stock option was exercised. The two-year and one-year periods described above are referred to as "holding periods." If the disposition of the option shares is qualifying, any excess of the sale price of the option shares, over the exercise price of the option will be treated as long-term capital gain taxable to the option holder at the time of the sale. Any such capital gain will be taxed at the long-term capital gain rate in effect at the time of sale. If the disposition is not qualifying, which we refer to as a "disqualifying disposition," the excess of the fair market value of the option shares on the date the option was exercised, over the exercise price will be taxable income to the option holder at the time of the disposition. Of that income, the amount up to the excess of the fair market value of the shares at the time the option was exercised over the exercise price will be ordinary income for income tax purposes and the balance, if any, will be long-term or short-term capital gain, depending upon whether or not the shares were sold more than one year after the option was exercised. Unless an option holder engages in a disqualifying disposition, we will not be entitled to a deduction with respect to an incentive stock option. If an option holder engages in a disqualifying disposition, we will be entitled to a deduction equal to the amount of compensation income taxable to the option holder. If you tender incentive stock options and those options are accepted for exchange, the new options will be granted as incentive stock options to the maximum extent they qualify. However, you will begin a new holding period for purposes of determining whether any disposition of the underlying shares is a qualifying disposition as described above. For options to qualify as incentive stock options, the value of shares subject to options that first become exercisable in any calendar year cannot exceed $100,000, as determined using the option exercise price. The excess value is deemed to be a non-qualified stock option. You should note that if the new options have a higher exercise price than some or all of your current options, or if a significant number of options are vested on the date of grant (to equal your current vesting schedule), the new options may exceed the limit for incentive stock options. We do not believe that our offer to you will change any of the terms of your eligible incentive stock options if you do not accept the offer. If you choose not to accept this offer, it is possible that the IRS would decide that your right to exchange your incentive stock options under this offer is a "modification" of your incentive stock options, even if you do not exchange the options. A successful assertion by the IRS that the options are modified could extend the options' holding period to qualify for favorable tax treatment and cause a portion of your incentive stock options to be treated as non-qualified stock options. Non-Qualified Stock Options. Under current law, an option holder will not realize taxable income upon the grant of an option which is not qualified as an incentive stock option, also referred to as a nonqualified stock option. 24 30 However, when an option holder exercises the option, the difference between the exercise price of the option and the fair market value of the shares subject to the option on the date of exercise will be compensation income taxable to the option holder. We will be entitled to a deduction equal to the amount of compensation income taxable to the option holder if we comply with eligible reporting requirements. WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER. 15. Extension of offer; termination; amendment. We expressly reserve the right, in our discretion, at any time and from time to time, and regardless of whether or not any event listed in Section 7 has occurred or is deemed by us to have occurred, to extend the period of time during which the offer is open and thereby delay the acceptance for exchange of any options by giving oral or written notice of such extension to the option holders or making a public announcement thereof. We also expressly reserve the right, in our reasonable judgment, prior to the expiration date to terminate or amend the offer and to postpone our acceptance and cancellation of any options tendered for exchange upon the occurrence of any of the events listed in Section 7, by giving oral or written notice of such termination or postponement to you or by making a public announcement thereof. Our reservation of the right to delay our acceptance and cancellation of options tendered for exchange is limited by Rule 13e-4(f)(5) promulgated under the Securities Exchange Act, which requires that we must pay the consideration offered or return the options tendered promptly after termination or withdrawal of a tender offer. Subject to compliance with applicable law, we further reserve the right, in our discretion, and regardless of whether any event listed in Section 7 has occurred or is deemed by us to have occurred, to amend the offer in any respect, including, without limitation, by decreasing or increasing the consideration offered in the offer to option holders or by decreasing or increasing the number of options being sought in the offer. Amendments to the offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, the amendment must be issued no later than 8:00 a.m., Eastern Daylight Time, on the next business day after the last previously scheduled or announced expiration date. Any public announcement made through the offer will be disseminated promptly to option holders in a manner reasonably designated to inform option holders of the change. Without limiting the manner in which we may choose to make a public announcement, except as required by applicable law, we have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a press release to the Dow Jones News Service. If we materially change the terms of the offer or the information concerning the offer, or if we waive a material condition of the offer, we will extend the offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Securities Exchange Act. These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in percentage of securities sought, will depend on the facts and circumstances, including the relative materiality of such terms or information. 25 31 If we decide to take any of the following actions, we will publish notice or otherwise inform you in writing of these actions: - we increase or decrease the amount of consideration offered for the options, - we decrease the number of options eligible to be tendered in the offer, or we increase the number of options eligible to be tendered in the offer by an amount that exceeds 2% of the shares issuable upon exercise of the options that are subject to the offer immediately prior to the increase. If the offer is scheduled to expire at any time earlier than the tenth (10th) business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified in this Section 15, we will extend the offer so that the offer is open at least ten (10) business days following the publication, sending or giving of notice. For purposes of the offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, Eastern Daylight Time. 16. Fees and expenses. We will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of options pursuant to this Offer to Exchange. 17. Additional information. This Offer to Exchange is part of a Tender Offer Statement on Schedule TO that we have filed with the SEC. This Offer to Exchange does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend that you review the Schedule TO, including its exhibits, and the following materials which we have filed with the SEC before making a decision on whether to tender your options: 1. Eprise's annual report on Form 10-K for our fiscal year ended December 31, 2000, filed with the SEC on March 30, 2001; and 2. the description of our shares contained in our Registration Statement on Form 8-A, filed with the SEC on February 3, 2000 (file number 000-29319). These filings, our other annual, quarterly and current reports, our proxy statements and our other SEC filings may be examined, and copies may be obtained, at the following SEC public reference rooms: 450 Fifth Street, N.W. World Trade Center 500 West Madison Street Room 1024 Suite 1300 Suite 1400 Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661
You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public on the SEC's Internet site at http://www.sec.gov. 26 32 Our common stock is quoted on the Nasdaq National Market under the symbol "EPRS" and our SEC filings can be read at the following Nasdaq address: Nasdaq Operations 1735 K Street, N.W. Washington, D.C. 20006 Each person to whom a copy of this Offer to Exchange is delivered may obtain a copy of any or all of the documents to which we have referred you, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents) at no cost, by writing to us at Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702, or telephoning us at (508) 661-5200. As you read the foregoing documents, you may find some inconsistencies in information from one document to another. If you find inconsistencies between the documents, or between a document and this Offer to Exchange, you should rely on the statements made in the most recent document. The information contained in this Offer to Exchange about Eprise should be read together with the information contained in the documents to which we have referred you. 18. Miscellaneous. This Offer to Exchange and our SEC reports referred to above include "forward-looking statements." When used in this Offer to Exchange, the words "anticipate," "believe," "estimate," "expect," "intend" and "plan" as they relate to Eprise or our management are intended to identify these forward-looking statements. All statements by us regarding our expected future financial position and operating results, our business strategy, our financing plans and expected capital requirements, forecasted trends relating to our services or the markets in which we operate and similar matters are forward-looking statements. The documents we filed with the SEC, including our annual report on Form 10-K filed on March 30, 2001, discuss some of the risks that could cause our actual results to differ from those contained or implied in the forward-looking statements. These risks include, but are not limited to: - our history of losses, which we expect to continue in the future; - our limited operating history; - uncertainty in the overall economy, and in the Internet business sector in particular, which could harm our revenues; - fluctuations in our quarterly operating results, which may affect our stock price; - the possibility that our product may never achieve broad market awareness or acceptance; - dependence of our quarterly results on a small number of relatively large sales; - our need to expand our direct sales and service organizations, as well as our relationships with industry partners, to continue growing our business; - the need to hire and retain skilled personnel in a tight labor market, where the loss of any key personnel, or any inability to attract and retain additional personnel, could affect our ability to successfully grow our business; 27 33 - the highly competitive nature of our market sector, where competition could harm our ability to sell products and services and could reduce our market share; - our need to develop new products or improve our existing products to meet or adapt to the changing needs and standards of our industry, without which sales of our products may decline; - the long sales cycle for our products, which requires expenditure of resources that may not result in sales, and makes it difficult to plan expenses and forecast results; - our need to remain compatible with major commercial operating platforms, without which we may lose sales and revenues; - potential defects or errors in our products, which could lead to a loss of revenue or product liability claims; - our limited ability to protect our intellectual property rights, which could be infringed by third parties without our consent and cause damage our business; - the possibility that use of the Internet may not grow as we anticipate and our revenues may be harmed; - volatility in our stock price based on our operating results and stock market fluctuations; and - our ability to manage our growth. We are not aware of any jurisdiction where the making of the offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the offer is not in compliance with any valid applicable law, we will make a good faith effort to comply with such law. If, after such good faith effort, we cannot comply with such law, the offer will not be made to, nor will tenders be accepted from or on behalf of, the option holders residing in such jurisdiction. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR NOT TENDER YOUR OPTIONS THROUGH THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION IN THIS DOCUMENT OR DOCUMENTS TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT, THE MEMORANDUM FROM JOE FORGIONE DATED MAY 10, 2001, THE ELECTION FORM AND THE NOTICE TO CHANGE ELECTION FROM ACCEPT TO REJECT. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US. May 10, 2001 EPRISE CORPORATION 28 34 SCHEDULE A INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF EPRISE CORPORATION The directors and executive officers of Eprise Corporation and their positions and offices as of April 30, 2001, are set forth in the following table:
NAME POSITION AND OFFICES HELD - ---- ------------------------- Joseph A. Forgione President, Chief Executive Officer and Director Milton A. Alpern Senior Vice President, Finance and Administration and Chief Financial Officer Joseph F. Noonan Senior Vice President, Worldwide Sales and Services Hank Barnes Vice President, Strategy David Drummond Vice President, Professional Services Tim Feldman Vice President, Business Development Kathy Kessel Vice President, Marketing Jonathan B. Radoff Chief Technology Officer Robert Strong Vice President, Customer Engineering Andreas Widmer Vice President, International Sales Edson D. de Castro Chairman of the Board Deb Besemer Director Robert C. Fleming Director Alain J. Hanover Director Nick Papantonis Director Joseph J. Tischler Director
The address of each director and executive officer is: c/o Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702. A-1 EX-99.(A)(2) 3 b39429ecex99-a2.txt ELECTION FORM 1 EXHIBIT (a)(2) EPRISE CORPORATION OFFER TO EXCHANGE OPTIONS ELECTION FORM I have received, have read and understand the Offer to Exchange, the memorandum from Joe Forgione, each dated May 10, 2001, the Election Form and Notice to Change Election From Accept to Reject (together, as they may be amended from time to time, constituting the "Offer"), offering to eligible employees the opportunity to exchange outstanding stock options ("Old Options") for options exercisable at the fair market value on or about December 12, 2001, issued under Eprise Corporation's Amended and Restated 1997 Stock Option Plan. This Offer expires at 5:00 P.M. Eastern Daylight Time on June 8, 2001. I understand that if I elect to cancel my Old Options in exchange for the promise to issue a new option (the "New Option"), the number of shares will remain the same and the original vesting schedule for the Old Options will be applied to the New Option. I understand that for each option or partial option I cancel, I lose my right to all outstanding unexercised shares so cancelled. I have read the Offer and understand the possible loss of my cancelled stock options if employment is terminated for whatever reason before December 12, 2001. I UNDERSTAND THAT THERE IS A POSSIBILITY THAT THE EXERCISE PRICE OF THE NEW OPTIONS COULD BE HIGHER THAN THE EXERCISE PRICE OF THE OLD OPTIONS RESULTING IN A LOSS OF SOME STOCK OPTION BENEFIT. I ALSO UNDERSTAND THAT IF I ELECT TO CANCEL ANY OPTIONS, ALL OPTIONS GRANTED IN THE SIX MONTHS PRIOR TO CANCELLATION, I.E., SINCE NOVEMBER 10, 2000, WILL ALSO BE CANCELLED AND REPLACED WITH NEW OPTIONS. I AGREE TO ALL TERMS OF THE OFFER. Subject to the above understandings, I would like to participate in the Offer as indicated below. I HAVE READ AND FOLLOWED THE INSTRUCTIONS ATTACHED TO THIS FORM. Please check the box and note the grant date, original grant number, and number of options being tendered for each stock option grant with respect to which you agree to have such grant and all stock option grants since November 10, 2000 cancelled and replaced pursuant to the terms of this Election Form. You may change the terms of your election to tender options for exchange by submitting a new Election Form or a Notice to Change Election From Accept to Reject prior to the expiration date of 5:00PM Eastern Daylight Time, June 8, 2001. [ ] Yes, I wish to tender for exchange each of the options specified below (and on any additional sheets which I have attached to this form), along with all options granted since November 10, 2000:
NUMBER NUMBER NUMBER OF SHARES EXERCISE OF SHARES OF SHARES TENDERED/ GRANT DATE GRANTED PRICE EXERCISED TO BE CANCELLED - ---------- ------- ----- --------- ----------------------- - ---------- --------- -------- --------- ----------------------- - ---------- --------- -------- --------- -----------------------
2 [ ] I have attached an additional sheet listing my name and any additional grants I wish to cancel. I understand that all of the tendered options will be irrevocably cancelled on June 11, 2001. - -------------------------------------- ------------------------------- EMPLOYEE SIGNATURE SOCIAL SECURITY NUMBER/ NATIONAL INSURANCE/ NATIONAL ID/TAX FILE NUMBER - -------------------------------------- ------------------------------- EMPLOYEE NAME (PLEASE PRINT) DATE AND TIME - -------------------------------------- E-MAIL ADDRESS RETURN TO MILT ALPERN NO LATER THAN 5:00 PM EDT ON JUNE 8, 2001 VIA FACSIMILE AT (508) 661-5401 OR HAND DELIVERY EPRISE WILL SEND AN E-MAIL CONFIRMATION WITHIN 48 HOURS OF RECEIPT 2 3 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Delivery of Election Form. A properly completed and executed original of this Election Form (or a facsimile of it), and any other documents required by this Election Form, must be received by Milt Alpern either via hand delivery or via the facsimile number listed on the front cover of this Election Form (fax number (508) 661-5401) on or before 5PM Eastern Daylight Time on June 8, 2001 (the "Expiration Date"). THE METHOD BY WHICH YOU DELIVER ANY REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE COMPANY. YOU MAY HAND DELIVER YOUR ELECTION FORM TO MILT ALPERN AT EPRISE CORPORATION (THE "COMPANY"), OR YOU MAY FAX IT TO HIM AT THE NUMBER LISTED ON THE FRONT COVER OF THIS ELECTION FORM. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. Tenders of options made through the Offer may be withdrawn at any time before the Expiration Date. If the Offer is extended by the Company beyond that time, you may withdraw your tendered options at any time until the extended expiration of the Offer. In addition, although the Company currently intends to accept your validly tendered options promptly after the expiration of the Offer, if the Company fails to accept your tendered options before 5:00 p.m., Eastern Daylight Time, on July 9, 2001, you may withdraw your tendered options at any time after July 9, 2001. To withdraw tendered options you must deliver a signed and dated Notice to Change Election From Accept to Reject, or a facsimile of the Notice to Change Election From Accept to Reject, with the required information to the Company while you still have the right to withdraw the tendered options. Withdrawals may not be rescinded and any Eligible Options withdrawn will thereafter be deemed not properly tendered for purposes of the Offer unless the withdrawn options are properly re-tendered before the Expiration Date by delivery of a new Election Form following the procedures described in these Instructions. Tenders of options made through the offer may be changed at any time before the Expiration Date. If the Offer is extended by the Company beyond that time, you may change your election regarding particular tendered options at any time until the extended expiration of the Offer. To change your election regarding particular tendered options while continuing to elect to participate in the Offer, you must deliver a signed and dated new Election Form, with the required information, following the procedures described in these Instructions. Upon the receipt of such a new, properly signed and dated Election Form, any previously submitted Election Form will be disregarded and will be considered replaced in full by the new Election Form. The Company will not accept any alternative, conditional or contingent tenders. All tendering option holders, by signing this Election Form (or a facsimile of it), waive any right to receive any notice of the acceptance of their tender, except as provided for in the Offer to Exchange. 2. Inadequate Space. If the space provided in this Election Form is inadequate, the information requested by the table on this Election Form regarding the options to be tendered should be provided on a separate schedule attached to this Election Form. Print your name on this schedule and sign it. The schedule should be delivered with the Election Form, and will thereby be considered part of this Election Form. 3 4 3. Tenders. If you intend to tender options through the Offer, you must complete the table on this Election Form by providing the following information for each option that you intend to tender: - number of shares originally subject to option, - grant date, - exercise price, - the total number of shares exercised under the option; and - the total number of shares being tendered under the option. You may tender all, none or some of the unexercised shares subject to the options you decide to tender. If you make a partial tender of any option, we will issue you an option for the untendered amount (subject to the same terms as the original grant) as promptly as practicable following the Expiration Date. Also, if you intend to tender any of the options that were granted to you, then you must tender all Eligible Options that were granted to you during the six month period prior to the Commencement Date. 4. Signatures on This Election Form. If this Election Form is signed by the holder of the Eligible Options, the signature must correspond with the name as written on the face of the option agreement or agreements to which the options are subject without alteration, enlargement or any change whatsoever. If this Election Form is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person should so indicate when signing, and proper evidence satisfactory to the Company of the authority of that person so to act must be submitted with this Election Form. 5. Other Information on This Election Form. In addition to signing this Election Form, you must print your name and indicate the date and time at which you signed. You must also include a current e-mail address and your identification number, such as your social security number, tax identification number or national identification number, as appropriate. 6. Requests for Assistance or Additional Copies. Any questions or requests for assistance, as well as requests for additional copies of the Offer to Exchange or this Election Form may be directed to Milt Alpern, Chief Financial Officer, at Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702, telephone number 508-661-5200. Copies will be furnished promptly at the Company's expense. 7. Irregularities. All questions as to the number of option shares subject to options to be accepted for exchange, and the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of options will be determined by the Company in its discretion. The Company's determinations shall be final 4 5 and binding on all parties. The Company reserves the right to reject any or all tenders of options the Company determines not to be in proper form or the acceptance of which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular options, and the Company's interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No tender of options will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Company shall determine. Neither the Company nor any other person is or will be obligated to give notice of any defects or irregularities in tenders, and no person will incur any liability for failure to give any such notice. IMPORTANT: THE ELECTION FORM (OR A FACSIMILE COPY OF IT) TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE COMPANY, ON OR BEFORE 5:00 P.M. ON THE EXPIRATION DATE. 8. Additional Documents to Read. You should be sure to read the Offer to Exchange, all documents referenced therein, and the memorandum from Joe Forgione dated May 10, 2001 before deciding to participate in the Offer. 9. Important Tax Information. You should refer to Section 14 of the Offer to Exchange, which contains important U.S. federal income tax information. If you live or work outside the United States, you should consult with your tax advisor regarding the tax consequences of the Offer which may apply to you. 10. Miscellaneous. A. Data Privacy. By accepting the Offer, you hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by and among, as applicable, Eprise Corporation and/or any affiliate for the exclusive purpose of implementing, administering and managing your participation in the Offer. You understand that Eprise Corporation and/or any affiliate may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the stock option plan and this Offer ("Data"). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Offer, that these recipients may be located in your country, or elsewhere, and that the recipient's country may have different data privacy laws and protections than in your country. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the stock option plans and this Offer. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the stock option plans and this Offer. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or withdraw the consents herein by contacting in writing your local human resources representative. You understand that withdrawal of consent may affect your ability to participate in this Offer and exercise or realize benefits from the stock option plans. 5 6 B. Acknowledgment and Waiver. By accepting this Offer, you acknowledge that: (i) your acceptance of the Offer is voluntary; (ii) your acceptance of the Offer shall not create a right to further employment with your employer and shall not interfere with the ability of your employer to terminate your employment relationship at any time with or without cause; and (iii) the Offer, the Old Options and the New Options are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. 6 EX-99.(A)(3) 4 b39429ecex99-a3.txt MEMORANDUM FROM PRESIDENT TO ALL EMPLOYEES 1 EXHIBIT (a)(3) FROM: Joe Forgione SUBJECT: OFFER TO EXCHANGE OPTIONS DATE: May 10, 2001 IMPORTANT NEWS -- PLEASE READ IMMEDIATELY AND TAKE ACTION BEFORE JUNE 8, 2001. The Compensation Committee of the Board of Directors has adopted resolutions offering to all eligible employees who hold stock options the opportunity to exchange their outstanding stock options for options exercisable at the fair market value of our stock on or about December 12, 2001. We are making the offer upon the terms and conditions described in the Offer to Exchange, this memorandum, the Election Form and the Notice to Change Election From Accept to Reject. Please read these documents carefully before you make any decisions regarding the offer. This offer expires at 5:00 PM Eastern Daylight Time on June 8, 2001. If you elect to participate in this exchange, the existing unexercised stock option(s) you elect to tender (the "Old Option") will be cancelled and a promise to grant a new option (the "New Option") will be issued. The New Option will be for the same number of shares (split-adjusted) as your Old Option(s). The New Option will be granted under the terms of our 1997 Stock Option Plan. This offer may be accepted or rejected as to each grant or none of your grants. There must be strict adherence to the following rules: ELIGIBILITY 1. All current employees of Eprise or any of our subsidiaries are eligible to participate in the exchange, except for (i) any employees who received their first Eprise option grant on or after January 1, 2001; and (ii) any employees who are also directors of the Company (myself and Jon Radoff). THE NEW OPTION 1. All grants cancelled pursuant to this program are eligible to be exchanged for a New Option. 2. The New Option will be priced at the fair market value of our stock on the day we grant the option (expected to be on or about December 12, 2001), which is defined as the closing price of our stock on Nasdaq on the last business day before the date of grant. THERE IS A POSSIBILITY THAT THE EXERCISE PRICE OF THE NEW OPTION COULD BE HIGHER THAN THE EXERCISE PRICE OF THE OLD OPTION, RESULTING IN A LOSS OF SOME STOCK OPTION BENEFIT. 3. The New Option will be vested in accordance with the vesting schedule of the Old Option. 4. If your employment with the Company terminates voluntarily OR involuntarily prior to December 12, 2001, you will not receive a New Option. 5. All other rules of the Stock Plan will be applied. 2 ELIGIBLE GRANTS AND OPTION CANCELLATION RULES 1. All option grants issued to eligible employees are eligible for exchange for a New Option, assuming your election is received by 5:00 PM Eastern Daylight Time on June 8, 2001 or, if we have extended the offer, by the new expiration of the offer. 2. Any of your outstanding, unexercised options may be cancelled. If you elect to cancel an Old Option, it may be cancelled in whole or in part. 3. If you decide to cancel a grant, all grants issued since November 10, 2000 (within the six months prior to commencement of the offer) must also be cancelled. All cancelled grants will be replaced with a promise to issue a New Option at least six months and one day after the date the Old Options are cancelled (a "Promise to Grant Stock Option(s)"). We expect to grant the New Option on or about December 12, 2001, unless we have to change the date because the offer had been extended. 4. Individuals canceling a grant pursuant to this program will not be eligible for additional grants until after December 12, 2001. In lieu thereof, the Company may issue additional Promises To Grant Stock Option(s). 5. Once your Old Options are cancelled, you will not be able to exercise your Old Options, even if you terminate employment and do not receive a New Option. 6. All New Options will be the same type of options as your Old Options, to the extent allowed by law. 7. All rights to cancelled grants will be irrevocably forfeited. THIS OFFER IS NOT A GUARANTY OF EMPLOYMENT FOR ANY PERIOD. YOUR EMPLOYMENT WITH THE COMPANY REMAINS "AT WILL" EMPLOYMENT AND MAY BE TERMINATED AT ANY TIME BY EITHER YOU OR THE COMPANY, WITH OR WITHOUT CAUSE OR NOTICE. All eligible option holders must complete an Eprise Corporation Offer to Exchange Options Election Form ("Election Form") and hand deliver or fax a signed copy to Milt Alpern at (508) 661-5401 by June 8, 2001, no later than 5:00 p.m. Eastern Daylight Time. You are required to make your election to "accept" the exchange agreement and identify the option grant(s) being cancelled if you wish to participate. Eprise will e-mail a confirmation of receipt within 48 hours of receiving your Election Form. IF YOUR ELECTION IS RECEIVED AFTER 5:00 PM EASTERN DAYLIGHT TIME ON JUNE 8, 2001, IT WILL NOT BE ACCEPTED AND YOU WILL BE CONSIDERED TO HAVE DECLINED TO ACCEPT THE EXCHANGE OFFER. You will receive shortly a more detailed document, entitled "Offer to Exchange," explaining the program in greater detail. In the meantime, below are the answers to some Frequently Asked Questions ("FAQs") regarding the offer, which you should read. FREQUENTLY ASKED QUESTIONS The following are answers to some of the questions that you may have about this offer. I urge you to read carefully the Offer to Exchange, the Election Form and the Notice to Change Election from 2 3 Accept to Reject because the information in this memorandum is not complete, and additional important information is contained in the Offer to Exchange, the Election Form and the Notice to Change Election from Accept to Reject. GENERAL QUESTIONS ABOUT THE PROGRAM 1. WHAT SECURITIES ARE WE OFFERING TO EXCHANGE? We are offering to exchange all outstanding and unexercised Eprise stock options held by eligible employees for new options under the Eprise 1997 stock option plan. 2. WHY ARE WE MAKING THE OFFER TO EXCHANGE? We implemented the offer to exchange because a considerable number of employees have stock options, whether or not they are currently exercisable, that are priced significantly above our current and recent trading prices. We believe these options are unlikely to be exercised in the foreseeable future. This program is voluntary and will allow employees to choose whether to keep their current stock options at their current exercise price, or to cancel those options in exchange for a new option for the same number of shares to be granted on a date at least six months and one day from the date we cancel the tendered options (the "replacement grant date"). We expect the replacement grant date to be December 12, 2001. We hope that this program will ameliorate the current underwater options issue, but this cannot be guaranteed considering the ever-present risks associated with a volatile and unpredictable stock market. By making this offer to exchange outstanding options for new options that will have an exercise price equal to the market value of our common stock on the replacement grant date, we intend to provide our employees with the benefit of owning options that over time may have a greater potential to increase in value, creating better performance incentives for employees and thereby maximizing stockholder value. 3. WHO IS ELIGIBLE? With the exception of (i) any member of Eprise's Board of Directors, including myself and Jon Radoff, and (ii) any employee who first received an option grant on or after January 1, 2001, any current employee of Eprise or its subsidiaries with a stock option at any price is eligible. You must be an employee as of May 10, 2001, the date this offer commences, and remain an employee as of the date the options are cancelled in order to participate in this offer. In order to receive a new grant, you must remain an eligible employee as of the replacement grant date. Participation in the exchange offer is strictly voluntary. 4. WILL EMPLOYEES OUTSIDE THE UNITED STATES BE ELIGIBLE TO PARTICIPATE? Except as noted above, all employees with stock options are eligible. 5. HOW DOES THE EXCHANGE WORK? The offer to exchange will require an employee to make a voluntary, irrevocable election to cancel outstanding stock options by 5:00 P.M. Eastern Daylight Time on June 8, 2001 (unless we extend the offer), in exchange for a one-for-one grant of a new option to be issued on the replacement grant date, which we expect to be on or about December 12, 2001, and priced at Eprise's closing market price on the last business day before the replacement grant date. The new options will retain the original vesting schedule of the cancelled options and will be subject to the terms and conditions of the Eprise Corporation 1997 Stock Option Plan. To participate, employees must cancel any and all Eprise options 3 4 granted since November 10, 2000; but may choose to cancel some, all, or none of their options granted prior to November 10, 2000. 6. WHAT DO I NEED TO DO TO PARTICIPATE IN THE OFFER TO EXCHANGE? To participate, you must complete the Election Form, sign and date it, and ensure that Milt Alpern, our Chief Financial Officer, receives it no later than 5:00 P.M. Eastern Time on June 8, 2001. You can return your form either by fax at (508) 661-5401 to Milt Alpern, or you may hand deliver it to Milt at Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702 USA. 7. IS THIS A REPRICING? This is not a stock option repricing in the traditional sense. Under a traditional stock option repricing, an employee's current options would be immediately repriced and Eprise would have a variable accounting charge against earnings. 8. WHY CAN'T EPRISE JUST REPRICE MY OPTIONS, AS I HAVE SEEN DONE AT OTHER COMPANIES? In 1998, the Financial Accounting Standards Board adopted unfavorable accounting charge consequences for companies that reprice options. If we were to simply reprice options, the company's potential for profitability in the future would be in serious jeopardy, as we would be required to take a charge against earnings on any future appreciation of the repriced options. 9. WHY CAN'T I JUST BE GRANTED ADDITIONAL OPTIONS? Because of the large number of underwater options currently outstanding at Eprise, a total grant of additional options would have a negative impact on Eprise's outstanding shares and earnings per share. Additionally, Eprise has a limited pool of options that it is allowed to grant, without stockholder approval, and therefore our current reserves must be conserved for new hires and ongoing grants. 10. WOULDN'T IT BE EASIER TO JUST QUIT EPRISE AND THEN GET REHIRED? This is not an alternative for us because this would be treated the same as a repricing if the rehire and resulting re-grant are within six months of the option cancellation date. Again, such a repricing would cause Eprise to incur a variable accounting charge against earnings. In addition, by leaving Eprise and being rehired later, an employee would not necessarily receive credit for prior service for vesting purposes. 11. IF I PARTICIPATE, WHAT WILL HAPPEN TO MY CURRENT OPTIONS? Options designated to be exchanged under this program will be cancelled on or about June 11, 2001. 12. WHAT IS THE DEADLINE TO ELECT TO EXCHANGE AND HOW DO I ELECT TO EXCHANGE? The deadline to participate in this program is 5:00 P.M. Eastern Daylight Time on June 8, 2001, unless we extend the offer. This means that Milt Alpern must have your form in his hands before that time. We have no plans to extend the offer, but if it is extended, you will be notified. We reserve the right to reject any or all options elected for exchange that we determine are not in appropriate form or that we 4 5 determine are unlawful to accept. Otherwise, we will accept properly and timely elected options that are not validly withdrawn, subject to our rights to extend, terminate and amend the offer. 13. WHAT WILL HAPPEN IF I DO NOT TURN IN MY FORM BY THE DEADLINE? If you do not turn in your Election Form by the deadline, then you will not participate in the option exchange, and all stock options currently held by you will remain intact at their original price and subject to their original terms. 14. DURING WHAT PERIOD OF TIME MAY I WITHDRAW PREVIOUSLY ELECTED OPTIONS? You may withdraw the options you have elected for exchange at any time before 5:00 P.M., Eastern Daylight Time, on June 8, 2001. To withdraw options elected for exchange, you must submit a Notice to Change Election from Accept to Reject to Milt Alpern by 5:00 P.M. Eastern Daylight Time on June 8, 2001. Once you have withdrawn your election to exchange options, you may re-elect to exchange options only by again following the delivery procedures described in the Instructions to the Election Form. If we extend this offer, you may withdraw your previously elected options until the new expiration of the offer. 15. MAY I CHANGE MY MIND ABOUT WHICH OPTIONS I WANT TO TENDER FOR EXCHANGE? Yes, you may change your election at any time before the offer expires. In order to change your election, you must properly fill out, sign and date a new Election Form and deliver it to Milt Alpern by hand delivery or by fax to (508) 661-5401 by 5:00 P.M. Eastern Daylight Time on June 8, 2001. Once you have done this, your previous Election Form will be disregarded. If we extend this offer, you may change your election until the new expiration of the offer. 16. AM I ELIGIBLE TO RECEIVE FUTURE GRANTS IF I PARTICIPATE IN THIS EXCHANGE? Because of the accounting limitations, participants in this program are ineligible to receive any additional stock option grants until after the replacement grant date. 17. WILL I HAVE TO PAY TAXES AS A CONSEQUENCE OF MY PARTICIPATION IN THIS EXCHANGE? Neither the cancellation of your options nor your receipt of a replacement option should give rise to a taxable event for you, but we recommend that you consult with your own tax advisor to determine if there are any tax consequences to tendering options for exchange that will apply to you, particularly if you reside outside the United States. If you exchange your current options for new options, you will not be required under current law to recognize income for U.S. federal income tax purposes at the time of the exchange. We believe that the exchange will be treated as a non-taxable exchange in the United States. Further, at the date of grant of the new options, you will not be required under current law to recognize income for U.S. federal income tax purposes. The grant of options is not recognized as taxable income in the United States. For employees residing both in and outside of the United States, we recommend that you consult with your own tax advisor to determine the tax and social insurance consequences of electing to exchange options pursuant to the offer. All employees are strongly urged to read the Offer to Exchange for an additional discussion of the potential tax consequences. 5 6 18. HOW SHOULD I DECIDE WHETHER OR NOT TO PARTICIPATE? We understand that this will be a challenging decision for all employees. The program does carry considerable risk, and there are no guarantees of our future stock performance. Therefore, the decision to participate must be each individual employee's personal decision. 19. WHAT DO MANAGEMENT AND OUR BOARD OF DIRECTORS THINK OF THE OFFER? Although the Compensation Committee of our board of directors has approved this offer, neither we nor our board of directors make any recommendation as to whether you should elect to exchange or refrain from exchanging your options. Our board of directors, including myself and Jon Radoff, are not eligible to participate in the offer. 20. WHAT IF I LEAVE EPRISE BETWEEN THE DATE MY OPTIONS ARE CANCELLED AND THE DATE THE NEW OPTIONS ARE GRANTED? You will have forfeited the options tendered and accepted for exchange and you will receive no new options. Once the offer to exchange expires (at 5:00 P.M. Eastern Daylight Time on June 8, 2001, unless the offer is extended), your election to tender your options is not revocable. Therefore, if you leave Eprise or one of its subsidiaries voluntarily, involuntarily, or for any other reason, before your new option is granted, you will not have a right to any stock options that were previously cancelled, and you will not have a right to the new option that would have been issued on the replacement grant date. THEREFORE, IF YOU DO NOT REMAIN AN ELIGIBLE EMPLOYEE ON THE REPLACEMENT GRANT DATE, YOU WILL NOT RECEIVE ANY NEW OPTIONS IN EXCHANGE FOR YOUR OPTIONS THAT HAVE BEEN ACCEPTED FOR EXCHANGE. YOU ALSO WILL NOT RECEIVE ANY OTHER CONSIDERATION FOR THE OPTIONS ELECTED TO BE EXCHANGED IF YOU DO NOT REMAIN AN ELIGIBLE EMPLOYEE ON THE REPLACEMENT GRANT DATE (EXPECTED TO BE ON OR ABOUT DECEMBER 12, 2001). SPECIFIC QUESTIONS ABOUT THE CANCELLED OPTIONS 21. WHICH OPTIONS CAN BE CANCELLED? If you are eligible and elect to participate in this offer, you may opt to cancel one or more options, or any part of those options, granted under our 1997 stock option plan. If you elect to cancel any options, you are required to cancel all options granted to you on or after November 10, 2000. 22. CAN I CHOOSE WHICH OPTIONS I WANT TO CANCEL, IF I HAVE MULTIPLE OPTIONS? You may choose to cancel one or more options, or any part of those options. It is up to you to pick which options, if any, you would like to tender for exchange. However, if you wish to participate in this program, you are required to cancel all options granted to you on or after November 10, 2000. 23. CAN I CANCEL THE REMAINING PORTION OF AN OPTION THAT I HAVE ALREADY PARTIALLY EXERCISED? Yes, any remaining outstanding, unexercised portion of an option can be cancelled. The new option will be on a one-for-one basis but only in replacement of the portion of the option cancelled. 6 7 24. CAN I SELECT WHICH PORTION OF AN OPTION TO CANCEL? Yes, we will accept partially tendered options for cancellation and exchange. You must specify the number of shares you are tendering for cancellation under each option listed on your Election Form, and you will receive a "balancing" grant for the untendered amount as promptly as practicable following the expiration of the offer period. 25. IF I CHOOSE TO PARTICIPATE, WHAT WILL HAPPEN TO MY OPTIONS THAT WILL BE CANCELLED? If you elect to participate in this program, then on June 11, 2001, or as soon as we can after that, we will cancel all of your outstanding options that were granted since November 10, 2000, plus any others that you elected to cancel. You will not have a right to be granted any further options from us until the replacement grant date, when your new options will be issued. SPECIFIC QUESTIONS ABOUT THE REPLACEMENT OPTIONS 26. WHAT WILL BE MY NEW OPTION SHARE AMOUNT? Employees who participate in this program will receive a new replacement stock option on the replacement grant date exercisable for the number of shares cancelled under the old stock option(s) (subject to adjustment for stock splits, combinations, etc.). Each new option will be granted under the Eprise Corporation 1997 Stock Option Plan pursuant to a new option agreement between you and us. 27. WHAT WILL BE THE VESTING SCHEDULE OF MY REPLACEMENT OPTIONS? The vesting schedule for all replacement options granted in this program will be exactly the same as the vesting schedule for the cancelled options. Therefore, no employee will lose or gain vesting in the replacement option. (Note, however, that you may forfeit any acceleration of vesting on a change in control if a change in control occurs before your New Option is granted.) 28. WHAT WILL MY NEW OPTION EXERCISE PRICE BE? The exercise price for the new options to be granted on the replacement grant date (expected to be on or about December 12, 2001) will be the fair market value of our stock on the date of grant, which is defined as the last reported sales price of our common stock on the Nasdaq National Market on the last business day before the date of grant. BECAUSE WE WILL NOT GRANT NEW OPTIONS UNTIL AT LEAST SIX MONTHS AND ONE DAY AFTER THE DATE WE CANCEL THE OPTIONS ACCEPTED FOR EXCHANGE, THE NEW OPTIONS MAY HAVE A HIGHER EXERCISE PRICE THAN SOME OR ALL OF YOUR CURRENT OPTIONS. WE RECOMMEND THAT YOU OBTAIN CURRENT AND HISTORICAL MARKET QUOTATIONS FOR OUR COMMON STOCK, AMONG OTHER FACTORS YOU CONSIDER, BEFORE DECIDING WHETHER TO ELECT TO EXCHANGE YOUR OPTIONS. 29. WHAT WILL MY NEW OPTION TYPE BE, INCENTIVE STOCK OPTION OR NONQUALIFIED STOCK OPTION? Generally, you will receive the same option type you currently have. If you are a United States employee and your cancelled stock options were incentive stock options, your new option will be an incentive stock option to the extent it qualifies as such under the Internal Revenue Code of 1986, as amended. If your cancelled options were nonqualified stock options, your new option will be a 7 8 nonqualified stock option. Please read the Offer to Exchange for additional information regarding the tax treatment of your options. In addition, we recommend that you consult your own tax advisor to determine the tax consequences of electing to exchange options pursuant to this offer. 30. WHEN WILL I RECEIVE MY REPLACEMENT OPTIONS? We will grant the new options on the replacement grant date, which will be at least six months and one day after the date the Old Options are cancelled. If we cancel options elected for exchange on June 11, 2001, the first business day after the scheduled expiration date of the offer, the replacement grant date of the new options will be December 12, 2001. 31. WHY WON'T I RECEIVE MY NEW OPTIONS IMMEDIATELY AFTER THE EXPIRATION DATE OF THE OFFER? If we were to grant the new options on any date which is earlier than six months and one day after the date we cancel the options accepted for exchange, we would be required for financial reporting purposes to record a compensation expense against our earnings. By deferring the grant of the new options for six months and one day, we believe we will not have to record such a compensation expense. 32. WHEN WILL I RECEIVE MY NEW OPTION AGREEMENT? Your new option agreement will be sent to you as promptly as practicable after the replacement grant date. 33. WHAT WILL BE THE TERMS AND CONDITIONS OF MY REPLACEMENT OPTIONS? Your new options will be subject to the terms and conditions of the Eprise Corporation 1997 Stock Option Plan. The terms and conditions of this plan are described in the Offer to Exchange. As noted above, the vesting schedule for the new option will be exactly the same as the cancelled option. The terms and conditions of these plans are described in the Offer to Exchange. 34. CAN I HAVE SOME EXAMPLES OF HOW AN OFFER TO EXCHANGE MIGHT WORK? Example 1 Assumptions: Your Hire Date: July 2, 2000 Your Original Stock Option: 1,000 shares Your Original Stock Option Price: $18.00 Your Original Vesting Schedule: 250 shares vest July 2, 2001, then annually thereafter until fully vested in July 2004 or until termination of employment. Hypothetical Stock Price on New Option Grant Date, December 12, 2001: $4.00 Using the above assumptions for the sake of illustrating the offer to exchange, we would cancel your original stock option on June 11, 2001. On the replacement grant date, which would be on or about 8 9 December 12, 2001, we would grant you a new option for 1,000 shares, and in this example using the purely hypothetical stock price of $4.00, your new exercise price would be $4.00. The vesting schedule for this new option will be the same as for the prior option, and therefore will be vested as to 250 shares on December 12, 2001, and will continue to vest 25% on each July 2 through 2004. Example 2 Assumptions: Your Hire Date: October 2, 2000 Your Original Stock Option: 1,000 shares Your Original Stock Option Price: $3.188 Your Original Vesting Schedule: 250 shares vest October 2, 2001, then quarterly thereafter until fully vested in October 2004 or until termination of employment. Hypothetical Stock Price on New Options Grant Date, December 12, 2001: $4.00 Using the above assumptions for the sake of illustrating the offer to exchange, we would cancel your original stock option on June 11, 2001. On the replacement grant date, we would grant you a new option for 1,000 shares, and in this example using the purely hypothetical stock price of $4.00, your new exercise price would be $4.00. (Please note that this is higher than your original stock option price). The vesting schedule for this new option will be the same as for the prior option, and therefore will have vested 250 shares by December 12, 2001, and will continue to vest quarterly, beginning on January 2, 2002, through October 2, 2004. 36. WHAT HAPPENS IF EPRISE IS ACQUIRED BEFORE THE REPLACEMENT OPTIONS ARE GRANTED? If we are acquired or involved in a similar transaction involving a purchase of all of our stock before the replacement options are granted, the surviving corporation would inherit our obligation to grant replacement options. However, the replacement options would be options to purchase shares of the surviving corporation, and the exercise price would be equal to the market price of the surviving company's stock on the date of grant. For example, if we were acquired by means of a merger, the number of shares would be equal to the number of our shares that you would have received, multiplied by the exchange ratio that was used in the merger. In this case, your options would be subject to the terms and conditions of the acquiring company's stock option plan. Also, you may forfeit any acceleration of vesting upon a change in control of the Company to which you were entitled under your Old Option(s). 37. AFTER THE GRANT OF THE NEW OPTIONS, WHAT HAPPENS IF MY OPTIONS AGAIN END UP UNDERWATER? We are conducting this offer only at this time, considering the unusual stock market conditions that have affected many companies throughout the market, and particularly in our business sector. This is therefore considered a one-time offer and is not expected to be offered again in the future. Since your stock options are valid for ten years from the date of initial grant, subject to continued employment, the price of our common stock will likely be subject to continued fluctuation over the long term. WE CAN 9 10 PROVIDE NO ASSURANCE AS TO THE PRICE OF OUR COMMON STOCK AT ANY TIME IN THE FUTURE. 38. WHAT DO I NEED TO DO TO PARTICIPATE IN THE OFFER TO EXCHANGE PROGRAM? To participate, you must properly complete the Election Form, sign and date it, and ensure that Milt Alpern receives it no later than 5:00 P.M. Eastern Daylight Time on Monday, June 8, 2001 or, if we extend the offer, no later than the new expiration of the offer. You can return your form either by fax to (508) 661-5401, or hand deliver it to Milt Alpern, Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702 USA. If you need an additional copy of the Election Form, you may contact Milt Alpern at (508) 661-5200. The company will provide additional copies at no expense to you. 10 EX-99.(A)(4) 5 b39429ecex99-a4.txt NOTICE TO CHANGE ELECTION FROM ACCEPT TO REJECT 1 EXHIBIT (a)(4) EPRISE CORPORATION OFFER TO EXCHANGE OPTIONS NOTICE TO CHANGE ELECTION FROM ACCEPT TO REJECT I previously received a copy of the Offer to Exchange, the memorandum from Joe Forgione, dated May 10, 2001 and an Election Form. I signed and returned the Election Form, in which I elected to accept Eprise Corporation's ("Eprise") offer to exchange (the "Offer") some of or all of my options. I now wish to change that election and reject Eprise's Offer to exchange my options. I understand that by signing this Notice and delivering it to Milt Alpern by 5:00 PM Eastern Daylight Time on June 8, 2001, I will be able to withdraw my acceptance of the Offer and reject the Offer to exchange options instead. I have read and understand all the terms and conditions of the Offer to exchange options. I have read and understand the instructions attached to this Notice. I understand that in order to reject the Offer, I must sign, date and deliver this Notice via facsimile (fax number (508) 661-5401) or hand delivery to Milt Alpern by 5:00 PM Eastern Daylight Time on June 8, 2001. I understand that by rejecting the Offer to exchange options, I will not receive any New Options pursuant to the Offer and I will keep the Old Options that I have. My Old Options will continue to be governed by the Eprise Corporation 1997 Stock Option Plan and by the existing option agreements between Eprise and me. I understand that I may change this election, and once again accept the Offer to exchange options, by submitting a new Election Form to Milt Alpern via facsimile (fax number (508) 661-5401) prior to 5:00 PM Eastern Daylight Time on June 8, 2001. [ ] Yes, I wish to withdraw my previously tendered options in full and I do not accept the Offer to exchange any options. I have signed this Notice and printed my name exactly as it appears on the Election Form. - ----------------------------------- -------------------------------- EMPLOYEE SIGNATURE DATE AND TIME - ----------------------------------- -------------------------------- EMPLOYEE NAME (PLEASE PRINT) E-MAIL ADDRESS - ----------------------------------- SOCIAL SECURITY NUMBER/NATIONAL INSURANCE/NATIONAL ID/ TAX FILE NUMBER RETURN TO MILT ALPERN NO LATER THAN 5:00 PM EDT ON JUNE 8, 2001 VIA FACSIMILE AT (508) 661-5401 EPRISE WILL SEND AN E-MAIL CONFIRMATION WITHIN 48 HOURS OF RECEIPT 2 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Delivery of Notice to Change Election From Accept to Reject. A properly completed and executed original of this Notice to Change Election From Accept to Reject (or a facsimile of it), and any other documents required by this Notice to Change Election From Accept to Reject, must be received by Milt Alpern either via hand delivery or via the facsimile number listed on the front cover of this Notice to Change Election From Accept to Reject (fax number (508) 661-5401) on or before 5:00 PM Eastern Daylight Time on June 8, 2001 (the "Expiration Date"). THE METHOD BY WHICH YOU DELIVER ANY REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE COMPANY. YOU MAY HAND DELIVER YOUR NOTICE TO CHANGE ELECTION FROM ACCEPT TO REJECT TO MILT ALPERN AT EPRISE CORPORATION (THE "COMPANY"), OR YOU MAY FAX IT TO HER AT THE NUMBER LISTED ON THE FRONT COVER OF THIS NOTICE TO CHANGE ELECTION FROM ACCEPT TO REJECT. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. Although by submitting a Notice to Change Election From Accept to Reject you have withdrawn all of your tendered options from the Offer, you may change your mind and re-accept the Offer until the expiration of the Offer. Tenders of options made through the Offer may be made at any time before the Expiration Date. If the Offer is extended by the Company beyond that time, you may tender your options at any time until the extended expiration of the Offer. To change your mind and elect to participate in the Offer, you must deliver a new signed and dated Election Form, or a facsimile of the Election Form, with the required information to the Company, while you still have the right to participate in the Offer. Your options will not be properly tendered for purposes of the Offer unless the withdrawn options are properly re-tendered before the Expiration Date by delivery of the new Election Form following the procedures described in the Instructions to the Election Form. IF YOU DO NOT WISH TO WITHDRAW ALL YOUR TENDERED OPTIONS FROM THE OFFER, YOU SHOULD NOT FILL OUT THIS NOTICE TO CHANGE ELECTION FROM ACCEPT TO REJECT. IF YOU WISH TO CHANGE YOUR ELECTION WITH RESPECT ONLY TO PARTICULAR OPTIONS, YOU SHOULD SUBMIT A NEW ELECTION FORM INSTEAD. To change your election regarding particular tendered options while continuing to elect to participate in the Offer, you must deliver a signed and dated new Election Form, with the required information, following the procedures described in the Instructions to the Election Form before the Expiration Date or, if the Offer is extended, before the extended expiration of the Offer. Upon the receipt of such a new, properly signed and dated Election Form, any previously submitted Election Form or Notice to Change Election From Accept to Reject will be disregarded and will be considered replaced in full by the new Election Form. By signing this Notice to Change Election From Accept to Reject (or a facsimile of it), you waive any right to receive any notice of the withdrawal of the tender of your options, except as provided for in the Offer to Exchange. 2 3 2. Signatures on This Notice to Change Election from Accept to Reject. If this Notice to Change Election From Accept to Reject is signed by the holder of the Eligible Options, the signature must correspond with the name as written on the face of the option agreement or agreements to which the options are subject without alteration, enlargement or any change whatsoever. If this Notice to Change Election From Accept to Reject is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, that person should so indicate when signing, and proper evidence satisfactory to the Company of the authority of that person so to act must be submitted with this Notice to Change Election From Accept to Reject. 3. Other Information on This Notice to Change Election from Accept to Reject. In addition to signing this Notice to Change Election From Accept to Reject, you must print your name and indicate the date and time at which you signed. You must also include a current e-mail address and your identification number, such as your social security number, tax identification number or national identification number, as appropriate. 4. Requests for Assistance or Additional Copies. Any questions or requests for assistance, as well as requests for additional copies of the Offer to Exchange or this Notice to Change Election From Accept to Reject may be directed to Milt Alpern, Chief Financial Officer, at Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702, telephone number 1-508-661-5200. Copies will be furnished promptly at the Company's expense. 5. Irregularities. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of this withdrawal from the Offer will be determined by the Company in its discretion. The Company's determinations shall be final and binding on all parties. The Company reserves the right to reject any or all Notices to Change Election From Accept to Reject that the Company determines not to be in proper form or the acceptance of which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the right to waive any of the conditions of the Offer and any defect or irregularity in the Notice to Change Election From Accept to Reject, and the Company's interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No Notice to Change Election From Accept to Reject will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with Notices to Change Election From Accept to Reject must be cured within the time as the Company shall determine. Neither the Company nor any other person is or will be obligated to give notice of any defects or irregularities in Notices to Change Election From Accept to Reject, and no person will incur any liability for failure to give any such notice. IMPORTANT: THE NOTICE TO CHANGE ELECTION FROM ACCEPT TO REJECT (OR A FACSIMILE COPY OF IT) TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE COMPANY, ON OR BEFORE THE EXPIRATION DATE. 6. Additional Documents to Read. You should be sure to read the Offer to Exchange, all documents referenced therein, and the memorandum from Joe Forgione dated May 10, 2001 before deciding whether to participate in the Offer. 3 4 7. Important Tax Information. You should refer to Section 14 of the Offer to Exchange, which contains important U.S. federal income tax information. If you live or work outside the United States, you should consult your tax advisor regarding tax consequences which may apply to you before deciding whether to participate in the Offer. 4 EX-99.(A)(5) 6 b39429ecex99-a5.txt FORM OF PROMISE TO GRANT STOCK OPTION(S) 1 EXHIBIT (a)(5) FORM OF PROMISE TO GRANT STOCK OPTION(S) In exchange for your agreement to cancel certain stock options ("Old Option(s)") you received from Eprise Corporation ("Eprise"), Eprise hereby promises to grant you a stock option or options covering shares of Eprise's common stock, on or about December 12, 2001 (the "New Option(s)"). You understand that the exercise price of each new option will be the closing price of Eprise's common stock as listed on the Nasdaq National Market on the last business day before the date of the replacement grant. Each New Option will vest according to the same vesting schedule as the Old Option it replaces, subject to your continued employment with Eprise on a full-time basis or on your being on a bona fide leave of absence as described below. Each New Option will otherwise be subject to the standard terms and conditions under Eprise's Amended and Restated 1997 Stock Option Plan (the "Plan") and applicable form of stock option agreement. However, if Eprise is acquired prior to the date on which your New Options are to be granted, you may receive options to purchase shares of the acquiring company's stock, and the number of options you receive would be based on the terms of the acquisition. In addition, those options would be subject to the terms of the acquiring company's stock option plan and related form of agreement. In order to receive the New Option(s), you must be employed by Eprise in a full-time capacity or be on a bona fide leave of absence that was approved by Eprise in writing (if the terms of the leave provide for continued service crediting or when continued service crediting is required by law), as of December 12, 2001 (or such later date as the replacement options are granted). This promise to grant does not constitute a guarantee of employment with Eprise for any period. Your employment with Eprise remains "at-will" and can be terminated by either you or Eprise at any time, with or without cause or notice. If you voluntarily terminate your employment with Eprise or if Eprise terminates your employment for any reason before December 12, 2001, you will lose all rights you have to receive any New Options. This Promise is subject to the terms and conditions of the Offer to Exchange dated May 10, 2001 the memorandum from Joe Forgione, President of Eprise, dated May 10, 2001, and the Election Form previously completed and submitted by you to Eprise, each of which is incorporated herein by reference. The documents described herein reflect the entire agreement between you and Eprise with respect to this transaction. This Promise may only be amended by means of a writing signed by you and a duly authorized officer of Eprise. EPRISE CORPORATION By:________________________________ Date: June 11, 2001 EX-99.(D)(2) 7 b39429ecex99-d2.txt EPRISE CORPORATION 1997 STOCK PLAN PROSPECTUS 1 Exhibit (d)(2) EPRISE CORPORATION AMENDED AND RESTATED 1997 STOCK OPTION PLAN THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ---------------------------------------- This prospectus may not be used for reoffers or resales of securities acquired pursuant to the Registration Statement on Form S-8 registering the securities offered by this document by "affiliates" of Eprise Corporation, as "affiliates" is defined in Rule 405 under the Securities Act of 1933. Directors and certain officers may be deemed to be affiliates of the company. This prospectus also may not be used for reoffers or resales of shares of common stock acquired upon exercises of stock options prior to the date of this prospectus. Such persons may resell or reoffer such securities only by means of a separate registration statement or pursuant to an exemption from registration, such as Rule 144 promulgated by the Securities and Exchange Commission under the Securities Act of 1933 or Rule 701 under the Securities Act of 1933, if applicable. ----------------------------------------- The date of this document is December 18, 2000. 2 GENERAL INFORMATION Eprise Corporation is a Delaware corporation having its principal executive offices at 200 Crossing Boulevard, Framingham, MA 01702. Its telephone number is (508) 661-5200. Additional information about the Plan and its administrators may be obtained at the offices of the Company and at the telephone number listed above. The Eprise Corporation Amended and Restated 1997 Stock Option Plan was adopted by the board of directors of the Company on August 20, 1997, subject to approval by the shareholders. The Plan was ratified and approved by the shareholders of a majority of the Company's outstanding voting stock on November 26, 1997. The Plan will terminate on January 5, 2010. The summary of the Plan which follows does not purport to be complete and is qualified in its entirety by reference to the formal text of the Plan which is attached to this prospectus. Individual participants should also refer to their stock option grant agreement under the Plan, which has been signed by the Company and by each participant, for information as to the number of shares which he or she is eligible to receive, the option exercise price and any vesting restrictions or other conditions or qualifications placed on each stock option. SUMMARY OF THE PLAN Purpose of the Plan The purpose the Plan is to advance the Company's interests by strengthening the Company's ability to attract, retain and motivate key employees, consultants and other individual contributors of or to the Company by providing them with an opportunity to purchase Company stock. The Company intends to accomplish this goal by granting incentive stock options that are available to employees of the Company and non-statutory stock options or nonqualified options that are available to employees, consultants and non-employee directors on the board of directors. Throughout this prospectus, both incentive options and nonqualified options will be collectively referred to as "options." Eligibility Options may be granted to any of the Company's key employees, consultants, or other individual contributors, including members of the board of directors. The Company reserves the right to determine who receives option grants and only Eprise employees will be eligible for grants of incentive options. Administration; Shares Reserved Under the Plan The Plan is administered by the compensation committee of the board of directors, composed of board members Joseph A. Forgione, Alain J. Hanover, and Robert C. Fleming. The Plan may be administered by different committees with respect to different groups of participants. Any "performance-based compensation" options and any option 2 3 grants to executive officers of the Company will be administered by a sub-committee of the compensation committee comprising two or more outside directors of the Company's board. Outside directors are directors who have no other affiliation with the Company (i.e., they are not employees or executive officers of the Company). The compensation committee has the authority, subject to the provisions of the Plan, to determine the persons to whom options will be granted, to construe the Plan and the related options and agreements, to prescribe, amend and rescind rules and regulations relating to the Plan, to grant options pursuant to the Plan, to determine option terms and provisions and related agreements, and to make all other determinations that the committee considers necessary for the efficient administration of the Plan. There are 4,144,281 shares of the Company's common stock available for issuance under the Plan. Options granted under the Plan that expire or are terminated, forfeited or repurchased will again become available for purposes of the Plan. In addition, shares subject to options under the Company's 1994 Stock Option Plan that expire or are terminated, forfeited or repurchased will become available for grants under this Plan. Moreover, on January 1, 2001 and January 1, 2002, the number of shares available for issuance under the Plan will be automatically increased by an amount equal to the lesser of (a) 5% of the total number of shares of common stock of the Company that are issued and outstanding or held in treasury as of the close of business on December 31 of the preceding year, or (b) 1,372,549 shares. Terms and Conditions of Options The Company must provide each option recipient with a stock option grant agreement. The terms and conditions pertaining to options that must be specified in each stock option grant agreement include the following. Price. Each stock option grant agreement must specify the price at which shares of common stock may be purchased upon exercise of options granted under the Plan, as determined by the compensation committee at the time the options are granted. Number of Shares. Each stock option grant agreement must specify the number of shares granted to each option recipient. No person may be granted more than 588,235 shares per Plan year (January 5- January 4). Exercise of Options. Options may be exercisable in full or in part and in the intervals or installments that the committee determines at the time of the grant. All options granted under the Plan will cease to be exercisable ten (10) years after the date of the grant or five (5) years after the date of grant in the case of incentive options granted to shareholders who own 10% or more of the Company's stock. Most options granted under the Plan are "reverse vest" options, exercisable immediately with the stock underlying the option subject to repurchase by the Company 3 4 according to the vesting schedule applicable to such options. See "Repurchase of Shares by the Company" below. Each participant exercising options must deliver written notice of exercise to the person at the Company designated to accept such notices. Each request must specify the number of options being exercised and must be accompanied by payment or irrevocable instructions to a broker to promptly deliver full payment to the Company. Participants must receive permission from the committee to use a broker for exercises of incentive stock options at the time of the grant. Payment. Payment must be made in full at the time a participant exercises options or promptly after a participant forwards irrevocable instructions to his or her broker (if the participant is permitted to make payment in this manner). Participants may pay in cash; by check; if permitted by the committee, by delivery and assignment (or, under certain circumstances, by deemed delivery) to the Company of shares of Company common stock that have a fair market value equal to the exercise price (in the case of incentive options, such permission must be granted at the time of the option grant); if permitted by the committee as stated in the stock option grant agreement, by recourse promissory note due and payable not more than five (5) years after the date the option is exercised; or by a combination of any of these methods. The committee may require payment of the option price in cash if it determines that an alternative method of payment is not in the best interest of the Company. Withholding Taxes; Delivery of Shares. The Company will not issue shares of stock until the participant has satisfied all applicable federal, state and local income and employment tax withholding obligations. Participants may opt to satisfy tax obligations (i) by a written check to the Company or (ii) if the committee in its sole discretion approves in any specific or general case, through the surrender (by actual or deemed delivery) of shares of common stock which the participant already owns with a fair market value equal to the amount required to be withheld and which, except to the extent otherwise permitted by the committee in any instance, have been owned by the participant for at least six months prior to the date of delivery or deemed delivery of such shares (or such other period as may be required to avoid a charge to the Company's earnings) or were not acquired, directly or indirectly, from the Company, or (iii) through the surrender of shares of common stock to which the participant is otherwise entitled under the Plan, subject to the discretion of the committee to require payment in cash if it determines that payment by other methods is not in the best interests of the Company. Unless other arrangements are made, the Company will deduct any federal, state or local taxes required by law to be withheld with respect to any shares issued upon exercise of options. Non-Transferability. Except as the board may otherwise specify in a non-qualified option grant, only participants may exercise options during their lifetime and participants may not transfer options other than by will or the laws of descent or distribution. Generally, participants may transfer unvested shares acquired by exercise of options to 4 5 certain relatives, but the shares will remain subject to the Company's right to repurchase as long as they remain unvested. See "Repurchase of Shares by the Company" below. Termination of Options. Unless otherwise provided in the applicable stock option grant agreement in the discretion of the compensation committee, options will terminate and may only be exercised in accordance with the following provisions if a participant ceases to render continuous service to the Company: (a) typically, if a participant ceases to render service for any reason other than death or disability, that participant may, at any time within a period of three (3) months after the date of such cessation of service, exercise the option to the extent that the option was exercisable on the date of such cessation; (b) if a participant ceases to render service because of disability, that participant may, at any time within a period of one (1) year after the date of such cessation of service, exercise the option to the extent that the option was exercisable on the date of such cessation; and (c) if a participant ceases to render service because of death, the option, to the extent that the participant was entitled to exercise it on the date of his or her death, may be exercised within one (1) year after his or her death by the person(s) designated by will or to whom the options will pass through the laws of descent or distribution. An option may only be exercised before the date of its expiration and only by the terms stated in the stock option grant agreement. Notwithstanding the preceding sentence, the committee has full power and authority to extend the period of time for which a nonqualified option (but not an incentive option) remains exercisable following termination of a participant's service provided that in no event shall the option be exercisable later than the date of expiration of the term of the option as set forth in the stock option grant agreement. If a participant's employment is terminated for "misconduct" (as defined in the plan), any options that are exercisable in installments will terminate on the date of the termination of employment with respect to any shares that became exercisable during the period commencing on the date six months prior to the date when such misconduct is determined by the board to have commenced or occurred and options that are fully exercisable upon grant, subject to the Company's right to repurchase unvested option shares, will terminate on the date of the termination of employment. Moreover, the Company has the right, but not the obligation, to repurchase any option shares that the participant purchased within six months prior to the date on which the misconduct is determined to have occurred. Automatic Exercise. Generally, unless provided otherwise in the applicable stock option grant agreement, each option granted on or after the effective date of the Plan will 5 6 be exercised in full on the last day the option is exercisable if such option would have a before-tax net value of at least $200,000 to the holder upon exercise on such date. Such a deemed exercise will be subject to payment in full of the exercise price (and all applicable withholding taxes) by any of the methods permitted pursuant to the stock option grant agreement, but subject to the discretion of the committee to require payment in cash if it determines that payment by other methods is not in the best interests of the Company. Repurchase of Shares by the Company. Some of the options granted under the Plan are so-called reverse vest options. These options are exercisable immediately, but all unvested shares are subject to the Company's right (but not obligation) to repurchase. The right to repurchase generally lapses in equal annual installments over a four year period from the date of option grant (according to the applicable vesting schedule). Each share acquired upon exercise of an option that is unvested at the time that the participant's service to the Company ceases for whatever reason, with or without cause, will be subject to repurchase by the Company at the repurchase price stated in the applicable stock option grant agreement, generally the exercise price of the applicable option. Transferability of Unvested Shares. Participants may not transfer unvested shares except upon the death of a participant by will or the laws of intestate succession; to the Company in pledge as security for any purchase-money indebtedness; or to certain family members. Rights as Shareholder. As an option holder under the Plan, a participant has no rights as a shareholder of the Company until his or her options are exercised (in part or in full) and a stock certificate is issued in his or her name for the exercised shares. Confidentiality Agreements. As a condition of receiving an option grant, participants must first sign the Company's standard form of agreement, if any, relating to nondisclosure of confidential information, assignment of inventions and related matters. Restrictions on Incentive Options Plan participants may not be granted incentive options in excess of $100,000 in value. If an incentive option exceeding the $100,000 limitation is granted, the portion of the option that is exercisable for shares in excess of the $100,000 limitation will be treated as a nonqualified option. In the event that the participant is eligible to participate in any other stock incentive plans of the Company, the annual limitation will apply to the aggregate number of option grants under all plans. Any holder of 10% or more of the Company's stock (as determined under relevant provisions of the Internal Revenue Code) granted an incentive option under the Plan is also subject to the following provisions in his or her stock option grant agreement: (i) The exercise price per share will not be less than 110% of the fair market value of each share on the date of grant; and 6 7 (ii) The option will terminate within five (5) years of the date of grant. Suspension of Rights Prior to a Dissolution, Reorganization Upon the dissolution, liquidation, merger, consolidation or reorganization of the Company in which the Company will not be the surviving entity, or the sale or exchange of substantially all of the Company's common stock or all or substantially all of the assets of the Company, the board or the compensation committee may decide to terminate each outstanding option as of the date of such an event. If the board or the committee so decides, each option will terminate as of the effective date of the event, but the board or the committee will suspend the exercise of all outstanding options a reasonable time prior to the event, giving each person affected at least fourteen days written notice of the date of suspension. In such context the board may, but need not, determine to accelerate the vesting of certain or all options. Whether or not acceleration of vesting is provided, each affected person may then purchase in whole or in part the shares available to her or him as of the date of the triggering event. If the event triggering the termination is not consummated, the suspension will be lifted and all options will continue in full force and effect, subject to the terms of the applicable stock option grant agreements. Change in Control The Plan defines a "change in control" as the (i) acquisition by an individual, entity or group of 35% or more of the Company's outstanding shares of common stock or the combined voting power of the voting securities entitled to vote in the election of the directors, (ii) a greater than one-third change in the composition of the Company's board of directors over a period of 24 months (if such change was not approved by a majority of the existing directors), (iii) a merger or consolidation of the Company with or into another business entity unless, following such merger or consolidation, more than 60% of the outstanding voting securities of the surviving entity are owned by shareholders of the Company, (iv) a dissolution of the Company or (v) a sale of all or substantially all of the Company's assets. A change in control does not occur upon the mere reincorporation of the Company in another state. Unless otherwise expressly provided in the applicable stock option grant agreement, upon a change in control, the Company's board or the board of directors of any entity assuming the obligations of the Company may (i) make appropriate provision for the continuation of options by substituting new options or securities on an equitable basis for the options granted under the current Plan, (ii) provide, upon written notice to the participants, that all options must be exercised, to the extent then exercisable or to be exercisable as a result of the change in control, within a specific period of time before the change of control, after which the options will terminate, or (iii) terminate all options in exchange for a cash payment equal to the excess of the fair market value of the shares issuable upon exercise of such options (to the extent then exercisable or to be exercisable as a result of the change in control) over the exercise price. 7 8 Upon a change in control, the Company's successor will assume the Company's repurchase and other rights under the Plan. Upon a change in control, any options granted pursuant to the Plan that are exercisable in installments will accelerate so that the option installment that would otherwise become exercisable on the next regularly scheduled vesting date will become immediately exercisable upon the change in control. In this event, any election by the board or any assumption of options will reflect this accelerated vesting. Similarly, with respect to reverse vest options, the underlying shares of which are subject to repurchase by the Company, such repurchase schedule will accelerate accordingly. The board may, in its discretion, provide acceleration or other rights in addition to those provided above. Amendment and Termination of the Plan The board of directors may at any time amend or terminate the Plan. Such amendment or termination, however, may not affect previously granted options nor may the board, without approval of the affected participant, make any change in an option already granted that would adversely affect the rights of any participant. Amendments will require shareholder approval to the extent necessary to comply with Rule 16b-3 under the Securities Exchange Act of 1934 or Section 422 of the Internal Revenue Code of 1986, as amended. Federal Income Tax Considerations Introduction. At the compensation committee's discretion, options may be made exercisable immediately after grant, but the shares issuable upon exercise of such options are then subject to repurchase by the Company for so long as they remain unvested (a so-called reverse-vest option). See "Repurchase of Shares by the Company" above. Alternatively, options may be issued that become exercisable only through continued service by the optionee for the Company for a length of time prescribed by the compensation committee (a so-called forward-vest option). As described below, there may be significant differences in the federal income tax results of forward-vest options compared to reverse-vest options. There are also significant differences in the federal income tax treatment of incentive options compared to non-qualified options. Treatment of Incentive Options. Incentive options granted under the Plan are "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and the terms of the Plan and the options granted under the Plan will be construed accordingly. Special Tax Benefits of Incentive Options. Persons receiving incentive option grants under the Plan will not recognize compensation income for ordinary federal income tax purposes either on the date the incentive option is granted or on the date the incentive 8 9 option is exercised. Except as described below, Plan participants must recognize income as capital gain for federal income tax purposes on the date they sell the shares acquired upon the exercise of incentive options in an amount equal to the excess, if any, of the amount received from the sale of the shares over the amount paid for the shares. As of the date of this prospectus, the maximum rate of federal income tax on compensation income is 39.6% and the maximum tax rate on this type of capital gain income is 20%. Effect of a Disqualifying Disposition of Incentive Option Stock. The tax benefits of exercising an incentive option will end if the participant disposes of his or her incentive option shares either (a) less than two years after the initial grant of the option or (b) less than one year after exercise of the option. Upon making such a "disqualifying disposition," the participant will be subject to tax on compensation income in an amount equal to the excess (if any) of the LESSER OF the fair market value of the shares (i) on the date of the incentive option exercise or (ii) on the date of the disqualifying disposition over the option exercise price of the shares. If a participant is still employed by the Company when he or she makes a disqualifying disposition of incentive option shares, the Company must withhold all applicable income and other withholding taxes due on the resulting compensation income from other compensation payable to the participant and must report the compensation income to the applicable taxing authorities. If the participant realizes any gain from a disqualifying disposition of incentive option shares in excess of the amount that is treated as compensation income (taxed at ordinary rates), the excess is taxed as capital gain income. (It will be taxed at the special long-term rate of 20% ONLY if the disqualifying disposition takes place more than one year after the exercise of the option.) Certain types of transfers are not treated as disqualifying dispositions of incentive option stock. For example, exceptions apply to transfers due to the participant's death or divorce or in a tax-free exchange upon the sale of the Company. See "Special Considerations for Reverse-Vest Incentive Options" below for further information on the effects of a disqualifying disposition of reverse-vest incentive option shares. Alternative Minimum Tax Risk from Incentive Options. Although no ordinary income taxes are due upon a participant's exercise of an incentive option, regardless of any difference between the exercise price of the option and the fair market value of the common stock (the spread) at the time of the exercise, the participant will be responsible for payment of any alternative minimum tax (AMT) due upon exercise based upon the spread. As of the date of this prospectus, the maximum rate of AMT is 28%. For purposes of the AMT only, the spread amount will be added to the option price in calculating the participant's basis in the stock and thus determining the participant's AMT gain or loss on the ultimate sale of the participant's incentive stock option shares. A credit for any net AMT paid by a participant on exercise may be available to offset at least a portion of the participant's regular income tax in subsequent years, including any tax on 9 10 the income resulting from a sale of the participant's incentive option shares. The AMT rules are very complicated, but will generally have the greatest effect on persons whose gain from exercise of incentive options in a given year is large compared to their other income (e.g., salary and bonus) for the year. Participants who exercise forward-vest incentive options must determine their AMT (if any) on the spread amount on the option exercise date. Participants who exercise reverse-vest incentive options must also determine their AMT (if any) at the time of exercise with respect to all vested shares purchased, but will have a choice (as described below) as to the time that any AMT is determined with respect to any unvested shares purchased. Special Considerations for Reverse-Vest Incentive Options. Under Section 83 of the Code, participants are only obligated to pay AMT with respect to reverse-vest incentive option shares as they vest. (This is the time at which they cease to be subject to a right of repurchase by the Company at the participant's original exercise price upon termination of the participant's employment.) However, participants who exercise reverse-vest incentive options should consider making an election (a Section 83(b) Election) to pay in the year of exercise the full amount of AMT due, if any, with respect to the reverse-vest incentive options they exercise. If a participant exercises his or her reverse-vest options shortly after grant, the AMT is likely to be small or even zero, and therefore the participant's Section 83(b) Election will cost the participant little or nothing in taxes. On the other hand, if a participant does not make a Section 83(b) Election and pay any applicable AMT up front, the participant must pay any AMT due as each installment of shares purchased under the option becomes vested. If a participant believes that the price of the Company's stock is likely to rise, then the participant should consider paying the full AMT upon exercise, when the spread is smaller. A SECTION 83(b) ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE WITHIN THIRTY DAYS AFTER THE INCENTIVE OPTION IS EXERCISED. A COPY OF THE ELECTION MUST ALSO BE SENT TO THE COMPANY. The fair market value of any participant's incentive option shares, as determined by the Company, may be subject to recalculation by the IRS. If the IRS were to recalculate the fair market value of the shares, the fact that a participant made the Section 83(b) Election would fix his or her AMT tax liability at the difference between the amount he or she paid for the shares and the amount the IRS determines was the fair market value of the shares on the date he or she purchased them (i.e., the spread at exercise, as recalculated by the IRS). If a participant does not make a Section 83(b) Election, even if he or she has in fact paid fair market value for the shares the participant's exposure to AMT will be determined by the difference between the amount he or she paid for the shares and their fair market value on the date(s) they vest (i.e., the spread at vesting). 10 11 Although the Section 83(b) Election form that the Company provides to participants upon request indicates that it is intended to be effective both for purposes of AMT and ordinary income tax, the Internal Revenue Service has stated its belief that the holder of an incentive option who receives restricted stock subject to buy-back upon exercise of the option (that is, reverse-vest option stock) cannot make a Section 83(b) Election with respect to ordinary income on the option stock. There is therefore a risk that if a participant exercises his or her reverse-vest incentive option prior to vesting and later disqualifies the vested portion as an incentive option (because he or she sells the stock purchased under the option either (a) less than two years after the initial grant of the option or (b) less than one year after the exercise of the option), the IRS will disregard the Section 83(b) Election as it relates to the participant's ordinary income on the disqualified portion and tax the participant on the difference between the exercise price of such portion and the fair market value of the participant's incentive option stock at the time that it vested. At this time, the Company can provide no assurances as to how the Internal Revenue Service or the courts will choose to treat a disqualifying disposition of a reverse-vest incentive option. Participants should be aware that a disqualification of only a portion of an option by, for example, selling the first vested installment one year after grant but not disposing of the remainder of the option shares (because these shares remain subject to the Company's repurchase right), will not disqualify the entire option. Accordingly, a participant's risk of incurring additional ordinary income tax upon making a disqualifying disposition of any reverse-vest incentive option shares will apply only to the first vested 25 percent of the shares (if the participant exercises the option by the first anniversary of the date of grant). To avoid even this risk, a participant should either be scrupulous about holding his or her first vested installment of reverse-vest incentive option stock long enough to avoid losing incentive option treatment for it or, if the participant believes that he or she may wish to sell his or her stock before the end of the statutory holding periods, the participant should consider asking the Company to modify his or her option agreement to turn the incentive option into a non-qualified option before the participant exercises it. If the option were to be turned from an incentive option into a non-qualified option and the participant were to make a Section 83(b) Election, he or she would then be responsible for paying ordinary income tax at the time of exercise of the option based on the spread amount at the time of exercise with respect to the shares that the participant purchases. Tax Effects of Incentive Options on the Company. Although the Company is not ordinarily entitled to a federal income tax deduction upon the grant or exercise of incentive options under the Plan or upon the sale of shares acquired, the Company is entitled to take a deduction in the Company's tax year in which any disqualifying disposition occurs. The deduction is equal to the compensation income realized by the person making such disposition. 11 12 Participants Should Consult Their Own Tax Advisors. The Company will not recommend any particular course of action to participants and urges participants who wish advice on making a Section 83(b) Election, paying AMT or disqualifying their reverse-vest incentive options to consult their own tax advisors. Treatment of Non-Qualified Options. Nonqualified options granted under the Plan are not intended to be "incentive stock options" within the meaning of Section 422 of the Code, and the terms of the Plan and the options granted under the Plan will be construed accordingly. Under current law, participants do not recognize income upon the grant of non-qualified options under the Plan. Whether income must be recognized upon exercise of a non-qualified option depends on whether the option is a reverse-vest option or a forward-vest option, and in the case of reverse-vest options, it also depends on whether (and to the extent that) the shares issued upon exercise are vested. If the option is a forward-vest option or if reverse-vest option shares are vested when the option is exercised, then the participant is required to recognize compensation that is taxable as ordinary income in an amount equal to the excess of the fair market value of the vested shares on the exercise date over the option exercise price of those shares. The Company is entitled to a corresponding deduction. To the extent that shares issued upon exercise of a reverse-vest non-qualified option are not then vested, the participant will not recognize income upon exercise, but must recognize compensation income when the shares vest, in an amount equal to the excess (if any) of the fair market value of the shares on the vesting date over the option exercise price of the vested shares. The Company's tax deduction will also be postponed until the participant recognizes the compensation income, and then will be equal in amount to the compensation recognized. However, upon exercise of a non-qualified option that results in the issuance of unvested shares, a participant may elect to be taxed immediately as if the shares were vested -- that is, the participant will recognize taxable compensation income in an amount equal to the excess of the fair market value of the shares on the exercise date over the option exercise price of such shares, and the Company will get a corresponding tax deduction. SUCH AN ELECTION MUST BE MADE WITHIN THIRTY DAYS AFTER THE SHARES ARE ISSUED UPON EXERCISE OF THE NON-QUALIFIED OPTION BY FILING A FORM (A SO-CALLED SECTION 83(b) ELECTION) WITH THE INTERNAL REVENUE SERVICE, AND BY SENDING A COPY OF THE ELECTION TO THE COMPANY. If a participant makes a timely Section 83(b) Election, then any subsequent gain or loss upon disposition of the non-qualified option shares will be a capital gain or loss, measured by the difference (if any) between the price received by the participant upon disposition of the shares and the value of the shares on the option exercise date (which is the participant's federal tax basis in the shares). However, if a Section 83(b) Election is 12 13 made with respect to unvested non-qualified option shares and the shares are later forfeited (that is, repurchased by the Company at the option exercise price) because the participant does not satisfy the vesting service conditions for the shares specified in his or her non-qualified option grant, the participant will not receive a refund of any tax paid as a result of making this Section 83(b) Election and will not be able to claim any capital loss with respect to any taxable compensation income recognized as a result of making the election. The Company must withhold all applicable income and other withholding taxes due on the compensation income resulting from exercise of non-qualified options by employees and must report any compensation income to the applicable taxing authorities. The Plan therefore provides that in addition to paying the option exercise price for all shares purchased pursuant to a non-qualified option, each employee exercising a non-qualified option must remit to the Company all applicable withholding taxes due with respect to the compensation income realized on the purchased shares, at the time such income is recognized. Thus, if an employee receives vested shares upon exercise of a non-qualified option or makes a Section 83(b) Election with respect to any unvested shares received, the employee must remit the applicable withholding taxes to the Company at the time of exercising the option or making the Section 83(b) Election. If the employee receives unvested shares upon exercise of a non-qualified option and makes no timely Section 83(b) Election, then the employee must remit the applicable withholding taxes to the Company as the unvested shares become vested. The Plan further provides that, to the extent possible, each employee participant is to satisfy such withholding obligations by delivering to the Company, or by having the Company withhold, vested and unrestricted shares in the Company's common stock. Each non-employee participant who exercises a non-qualified option will be responsible for filing and paying his or her own estimated tax and self-employment tax due with respect to the compensation income realized on the purchased shares, at the time such income is recognized. The Company must report the compensation income recognized by non-employee participants upon exercise of an option under the Plan or the subsequent vesting of option shares, but does not withhold any taxes with respect to such income. Once a participant recognizes any compensation income required upon exercise of a non-qualified option or upon the vesting of the non-qualified option shares, for purposes of determining gain or loss upon the later sale of the shares the participant will obtain a basis in the shares equal to the fair market value of the shares at the time the compensation income was recognized: that is, at the time the option was exercised if the shares were vested or if a Section 83(b) Election was made, or otherwise at the time the shares vested. Stated another way, the participant's basis will be equal to the sum of the option exercise price plus the amount of compensation income recognized by the participant. Thus, when the shares are later sold, the participant will realize income as capital gain or loss for federal income tax purposes equal to the difference (if any) between the amount received from the sale of the shares compared to the participant's basis in the shares. 13 14 As of the date of this prospectus, the maximum rate of federal income tax on compensation income is 39.6% and the maximum rate on capital gain income from the sale of stock held for more than one year is 20%. Income Tax Effects Of Transferring Non-Qualified Options By Gift. Options granted under the Plan ordinarily are not transferable except as the result of the participant's death. However, the compensation committee has discretion under the Plan when granting non-qualified options to permit the optionee to transfer his or her options by gift to or for the benefit of one or more family members. However, even if such a gift transfer is made, the optionee will remain liable for all applicable income and withholding taxes that result from exercise of the option by any transferees. Moreover, if a transferred non-qualified option is a reverse-vest option and the transferee receives any unvested shares upon exercise, the decision whether or not to file a Section 83(b) Election, and the responsibility for filing it, remains with the Plan participant who received and transferred the option and who will be liable for the payment of any resulting income and FICA taxes. However, any gain or loss realized upon the subsequent sale of any non-qualified option shares received upon exercise of a transferred option will be a capital gain or loss of the gift-recipient who actually exercised the option, who will have a basis equal to the option exercise price plus the amount of any income recognized by the participant (that is, the same basis that the participant would have had if he or she had not given away the option). Any such capital gain will be taxed at the maximum rate of 20% only if the person who exercised the option holds the shares for more than one year before their subsequent sale. See also "Federal Gift and Estate Tax Aspects" below. Plan Not Subject to ERISA. The Plan is not qualified under Section 401 of the Code and is not subject to the provisions of the Employee Retirement Income Security Act of 1974. Participants Should Consult Their Own Tax Advisors. The foregoing summary of the effects of federal income taxation on option holders and the Company with respect to awards under the Plan does not purport to be complete, and reference should be made to the applicable provisions of the Code and the regulations thereunder. In addition, this summary does not discuss the provisions of the income tax laws of any municipality, state or foreign country in which the option holder may reside or the Company may be subject to taxation. For precise advice as to specific transactions, participants should consult their tax advisors. Federal Gift and Estate Tax Aspects In case of a transfer of a non-qualified stock option by gift, under the Internal Revenue Service's current interpretation of the law, the transferor will have made a completed gift (or gifts) for gift tax purposes only at the time (or times) that the option (or each portion of it) becomes exercisable. The value of the option (or a portion thereof) for gift tax purposes at the time it becomes exercisable is its economic value and generally will 14 15 be some positive number even if the option is "under water" at the time it becomes a completed gift. Taxpayers who utilize the valuation methodology for options set forth in Internal Revenue Service Revenue Procedure 98-34, 1998-18 IRB 15 ("Rev. Proc. 98-34") will be deemed to have properly valued a gratuitously transferred option for gift tax purposes. Pursuant to Rev. Proc. 98-34, a generally recognized option pricing model must be used that takes into account, as of the gift valuation date, the following factors: (a) the exercise price of the option; (b) the expected life of the option; (c) the current trading price of the underlying stock; (d) the expected volatility of the underlying stock; (e) the expected dividends on the underlying stock; and (f) the risk-free interest rate over the remaining option term. Rev. Proc. 98-34 expressly permits use of the Black-Scholes option pricing model, but also permits taxpayers to select any other model that appropriately takes into account the six factors listed above. In determining each of these factors for purposes of valuing an option, Rev. Proc. 98-34 requires use of applicable information disclosed by the Company in its financial statements prepared pursuant to FAS 123. Finally, Rev. Proc. 98-34 may only be relied upon as a safe harbor for valuing a stock option if no discount is applied to the valuation produced by the option pricing model. For example, no discount may be taken due to lack of general transferability of the option or due to the termination of the option within a specified number of days following termination of the participant's employment. A gift of an option will be eligible for the $10,000 annual exemption for gifts of present interests at each time that the gift is "completed" for gift tax purposes (i.e., as it or portions of it become exercisable each year). Any income tax paid upon exercise of the option by the transferor who transferred the option will not be treated as an additional gift to the recipient family members, and therefore will not subject the transferor to any additional gift tax liability. Any additional appreciation in the economic value of the option once the transfer becomes a completed gift for gift tax purposes, and the value of the shares received upon exercise of the transferred option by the recipient family members, are not included in the transferor's taxable estate. Recipients of transferable non-qualified stock option grants are urged to contact their own professional tax advisors for advice concerning the potential tax consequences of any contemplated transfer of the non-qualified stock option. Additional Information About Underlying Common Stock The Board of Directors of Eprise Corporation adopted a Stockholder Rights Agreement dated as of December 18, 2000 (the "Rights Agreement"), between the Company and Fleet Bank N.A. c/o EquiServe, L.P. (the "Rights Agent") pursuant to which the Board of Directors of the Company authorized and declared a dividend of one Right for each share of the Company's Common Stock outstanding at the close of business 15 16 on the Record Date and authorized and directed the issuance of one Right with respect to each share of Common Stock that subsequently becomes outstanding (the "Common Shares"). Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of the Company's Series A Junior Participating Preferred Stock (the "Preferred Shares") at an initial exercise price of $21.00 per one-hundredth of a Preferred Share (the "Purchase Price"), subject to adjustment. The description and terms of the Rights are set forth in the Rights Agreement. Detachment and Transfer of Rights. Initially, the Rights will be evidenced by the stock certificates representing Common Shares then outstanding, and no separate Rights Certificates will be distributed. Until the earlier to occur of (i) 10 business days after a public announcement that a person or group of affiliated or associated persons, has become an "Acquiring Person" (as such term is defined in the Rights Agreement) or (ii) 10 business days (or such later date as the Board may determine) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer which would result in the beneficial ownership by an Acquiring Person of 15% or more of the outstanding Common Shares (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced, with respect to any of the Common Share certificates outstanding as of the Record Date, by such Common Share certificate. In general, an "Acquiring Person" is a person, the affiliates or associates of such person, or a group, which has acquired beneficial ownership of 15% or more of the outstanding Common Shares, with certain exceptions as set forth in the Rights Agreement. The Rights Agreement provides that, until the Distribution Date (or earlier redemption or expiration of the Rights), the Rights will be transferable with and only with the Common Shares. Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Share certificates issued after the Record Date upon transfer or new issuance of Common Shares will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights) the surrender or transfer of any certificates for Common Shares outstanding as of the Record Date, even without such notation or a copy of this Summary of Rights being attached thereto, will also constitute the transfer of the Rights associated with the Common Shares represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Rights Certificates") will be mailed to holders of record of the Common Shares as of the close of business on the Distribution Date and such separate Rights Certificates alone will evidence the Rights. Exercisability of Rights. The Rights are not exercisable until the Distribution Date. The Rights will expire on December 18, 2010 (the "Final Expiration Date"), unless the Final Expiration Date is extended or unless the Rights are earlier redeemed or exchanged by the Company, in each case as described below. Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. 16 17 The Purchase Price payable, and the number of Preferred Shares or other securities or property issuable or payable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution in the event the Company has (A) declared a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivided the outstanding Preferred Shares, (C) combined the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issued any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation). The number of outstanding Rights and the number of Preferred Shares issuable upon exercise of each Right are also subject to adjustment in the event of a stock split of the Common Shares or a stock dividend on the Common Shares payable in Common Shares, or subdivisions, consolidations or combinations of the Common Shares occurring, in any such case, prior to the Distribution Date. With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional Preferred Shares will be issued and in lieu thereof, an adjustment in cash will be made based on the market price of the Common Shares on the last trading day prior to the date of exercise. Trigger of Flip-In and Flip-Over Rights. In the event that any person or group of affiliated or associated persons becomes an Acquiring Person, proper provision shall be made so that each holder of a Right, other than Rights beneficially owned by the Acquiring Person or any affiliate or associate thereof (which will thereafter be void), will thereafter have the right to receive upon exercise that number of Common Shares having a market value of two times the exercise price of the Right. This right will commence on the later of (A) the expiration of the Company's redemption rights, (B) the date of public announcement that a person has become an Acquiring Person, or (C) the effective date of a registration statement relating to distribution of the rights, and shall terminate 60 days later (subject to extension if exercise of the rights is enjoined). If the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold to an Acquiring Person, its affiliates or associates, proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise of such Right at the then-current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the Right. For example, at an exercise price of $20.00 per Right, each Right not owned by an Acquiring Person (or by certain related parties), following an event described in the preceding paragraph, would entitle its holder to purchase $40.00 worth of Common Stock (or other consideration, as described in the Rights Agreement) for $20.00. Assuming that the Common Stock had a per share value of $4.00 at such time, the holder of each valid Right would be entitled to purchase 10 shares of common stock for $20.00. 17 18 Redemption and Exchange of Rights. At any time prior to the earliest of (i) the close of business on the tenth day following the first public announcement that a person has become an Acquiring Person, or (ii) the Final Expiration Date, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption Price"). In addition, in certain circumstances involving a merger, consolidation, asset sale or similar transfer of assets or earning power of the Company, the Board may redeem the Rights in whole, but not in part, at any time after the tenth day following the first public announcement that a person has become an Acquiring Person, but before the consummation of any such transaction. In general, the redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. At any time after any Person becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the outstanding Common Shares, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which will have become void), in whole or in part, at an exchange ratio of one Common Share, or, under circumstances set forth in the Rights Agreement, cash, property or other securities of the Company, per Right (with value equal to such Common Shares). Amendment of Rights. The terms of the Rights generally may be amended by the Board of Directors of the Company without the consent of the holders of the Rights, except that from and after the Distribution Date no such amendment may adversely affect the interests of the holders of the Rights (excluding the interest of any Acquiring Person). Certain Anti-Takeover Effects. The Rights have certain anti-takeover effects, and are designed to prevent a raider from using coercive tactics to deprive the Company's Board of Directors and stockholders of the opportunity to determine the Company's destiny by forcing the raider to negotiate with the Company's Board. The Rights will cause substantial dilution to a person or group that attempts to acquire the Company on terms not approved by the Company's Board of Directors. The Rights should not interfere with any merger or other business combination approved by the Board of Directors since the Rights may be amended to permit such acquisition or redeemed by the Company as described above. The Rights Agreement does not inhibit any stockholder from using the proxy mechanism to promote a change in the management or direction of the Company. While the Board of Directors is not aware of any effort to acquire control of the Company, it believes that the Rights Agreement represents a sound and reasonable means of safeguarding the investment of stockholders in the Company. Additional Information. A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K dated December 19, 2000. A copy of the Rights Agreement is available from the Company by writing to: Chief Financial Officer, Eprise Corporation, 200 Crossing 18 19 Boulevard, Framingham, MA 01702. This summary description of the Rights is not intended to be complete and is qualified in its entirety by reference to the Rights Agreement, which is incorporated herein by reference. COMPANY DOCUMENTS A participant in the Plan may obtain, without charge, upon written or oral request, a copy of each of the following documents incorporated by reference in Item 3 of Part II of the registration statement covering the securities offered by this document: (i) the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000 and June 30, 2000 (in each case without exhibits); and (ii) all reports and other documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all shares of Common Stock offered by this document have been sold or which deregisters all shares of Common Stock then remaining unsold. All of these documents are incorporated by reference into the Section 10(a) prospectus of which this document constitutes a part. Also available to participants, without charge, upon written or oral request, are copies of other documents required to be delivered to employees pursuant to Rule 428(b) of the Securities Act of 1933. Requests for any of the above documents should be directed to Milton A. Alpern, Vice President, Finance, Eprise Corporation, 200 Crossing Boulevard, Framingham, MA 01702. The Company's telephone number is (508) 661-5200. 19 -----END PRIVACY-ENHANCED MESSAGE-----