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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934
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Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d) (2))
[X] Definitive Information Statement
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USDATA Corporation
(Exact Name of Registrant as Specified in Its Charter)
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and 0-11
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computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
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filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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USDATA CORPORATION
2435 N. Central Expressway
Richardson, Texas 75080
Telephone: (972) 680-9700
INFORMATION STATEMENT
DATED JULY 30, 2001
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
THE ACTIONS DESCRIBED BELOW HAVE ALREADY BEEN APPROVED BY THE WRITTEN CONSENT OF
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF OUR COMMON STOCK. A VOTE OF
THE REMAINING STOCKHOLDERS IS NOT NECESSARY.
This information statement is being mailed on or about July 31, 2001 to
holders of record as of July 19, 2001 (the "Record Date") of shares of common
stock, par value $0.01 per share ("Common Stock"), of USDATA Corporation, a
Delaware corporation (the "Company"). It is being furnished in connection with
the adoption of an amendment to the Company's Certificate of Incorporation by
the written consent of holders of a majority of the outstanding shares of Common
Stock.
On July 10, 2001, the Company's board of directors by written consent
recommended that the stockholders approve an amendment to the Company's
Certificate of Incorporation to effect a one-for-five reverse stock split (the
"Reverse Split") of the Company's issued and outstanding Common Stock (the
"Existing Common"). On July 10, 2001, the holders of a majority of the
outstanding shares of Common Stock approved the amendment by written consent.
Approval by the board of directors and by the holders of a majority of the
outstanding shares of Common Stock is adequate under Delaware law to effect the
amendment. The amendment will become effective upon the filing of the amendment
to the Company's Certificate of Incorporation with the Delaware Secretary of
State (the "Effective Date"), which may be no earlier than 20 calendar days from
the date of this information statement. Please note, however, that the amendment
will be filed at such time as is determined by the Board, in its sole
discretion, and that Delaware law permits the Board to abandon the filing of the
amendment without further action by the stockholders of the Company. The form of
the amendment is attached to this information statement as Exhibit A.
Stockholders have no right under Delaware law or the Company's Certificate of
Incorporation or bylaws to dissent from the Reverse Split.
Pursuant to the Reverse Split, each five shares of Existing Common
outstanding immediately prior to the Effective Date will be reclassified as, and
exchanged for, one share of newly issued Common Stock, par value $0.01 per share
("New Common").
The Reverse Split will not materially affect the proportionate equity
interest in the Company of any holder of Existing Common or the relative rights,
preferences, privileges or priorities of any such stockholder. In addition, all
outstanding options and warrants entitling the holders thereof to purchase
shares of the Company's common stock will enable such holders to purchase, upon
exercise of their options or warrants, one-fifth (1/5th) of the number of shares
of the Company's common stock that such holders would have been able to purchase
upon exercise of their options or warrants immediately preceding the Reverse
Split. The exercise price of such options and warrants will be equal to five
times the exercise price specified before the Reverse Split, resulting in
approximately the same aggregate price being required to be paid after the
Reverse Split as would have been required if such holder had exercised prior to
the Reverse Split. The number of shares reserved for issuance under the
Company's existing stock option plans and employee stock purchase plans will be
reduced to one-fifth (1/5th)
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of the number of shares currently included in such plans.
This information statement is being provided for your information only.
OUTSTANDING STOCK AND VOTING RIGHTS; EFFECTS OF REVERSE SPLIT
As of the Record Date, there were 14,075,055 shares of Common Stock
outstanding. Each share of Common Stock entitles its holder to one vote.
The direct result of the Reverse Split will be to decrease the number
of issued and outstanding shares of Common Stock from 14,075,055 shares of
Existing Common to approximately 2,815,011 shares of New Common. The New Common
issued pursuant to the Reverse Split will be fully paid and non-assessable. All
shares of New Common will have the same par value, voting rights and other
rights as shares of the Existing Common have. Stockholders of the Company do not
have preemptive rights to acquire additional shares of Common Stock that may be
issued.
REASONS FOR THE REVERSE STOCK SPLIT
The closing bid price for the Existing Common has been less than $1.00
for more than 30 consecutive trading days, and the Company is thus not in
compliance with the requirements for continued listing on The Nasdaq National
Market (the "National Market"). The Company has been in communication with the
staff of The Nasdaq Stock Market, Inc. ("Nasdaq") regarding this matter and has
been granted an extension of further delisting action by Nasdaq pending the
completion of the Reverse Split on or about August 20, 2001. The Company has
determined that a Reverse Split is necessary to meet and maintain the minimum
bid price of $1.00.
If the Existing Common should no longer be listed on the National
Market, it would likely be traded either on the OTC Bulletin Board or "pink
sheets," and the liquidity of the market for the Company's Common Stock would be
adversely affected. A number of companies in similar situations have effected
reverse stock splits in order to cause their share prices to exceed $1.00. This
approach has been determined to be appropriate by the board of directors and
approved by holders of a majority of the outstanding shares of Common Stock,
subject to cancellation if the board of directors should determine, prior to the
Effective Date, that the Reverse Split is no longer in the best interests of the
Company.
The Company believes that the Reverse Split is likely to positively
affect the trading price of the shares of New Common and cause the National
Market's minimum bid price requirement to be met or exceeded for a minimum of 10
consecutive trading days on or about August 20, 2001, with the result that the
Company should not receive a notification of delisting. But no assurance can be
given that either the price of the Company's Common Stock will increase or that
the staff of Nasdaq will determine that delisting of the common stock is no
longer appropriate. Specifically, there cannot be any assurance that the market
price of the New Common will rise in proportion to the reduction in the number
of outstanding shares resulting from the Reverse Split. Also, there cannot be
any assurance that in the future the Company will continue to meet the minimum
bid price requirements or other listing standards of the National Market.
It was determined that approval of the Reverse Split should be effected
by written consent of a majority of the Company's stockholders, rather than
submitting the matter to a vote of the stockholders at a meeting called for that
purpose, in order to complete the Reverse Split in a time frame which could
cause the minimum bid price requirement to be met for at least 10 consecutive
trading days on or about August 20, 2001.
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STOCK CERTIFICATES AND FRACTIONAL SHARES
The Reverse Split will occur on the Effective Date without any further
action on the part of stockholders of the Company and without regard to the date
or dates on which certificates representing shares of Existing Common are
actually surrendered by each holder thereof for certificates representing the
number of shares of the New Common that the stockholder is entitled to receive
as a consequence of the Reverse Split. After the Effective Date, the
certificates representing shares of Existing Common will be deemed to represent
one fifth of the number of shares of New Common. Certificates representing
shares of New Common will be issued in due course as old certificates are
tendered for exchange or transfer to Mellon Investor Services, 85 Challenger
Road, Ridgefield Park, New Jersey, 07660, Attention: Shareholder Relations (the
"Transfer Agent"), telephone number: 800-526-0801. No fractional shares of New
Common will be issued. If the conversion shall result in a fraction of a share,
then the Company will round up such fraction of a share and the holder shall be
entitled to receive a whole share for such fraction.
NUMBER OF HOLDERS
As of July 19, 2001, there were approximately 2,800 holders of record
of Existing Common. The Company does not anticipate that the Reverse Split will
cause the number of holders of record or beneficial owners of Common Stock to
change significantly.
NO CHANGE IN COMPANY'S STATUS OR BUSINESS
The Company does not anticipate any change in the Company's status as a
reporting company for federal securities law purposes as a result of the Reverse
Split. Our business, management (including all directors and officers) the
location of our principal executive offices, assets, liabilities and net worth
(other than as a result of the costs incident to the Reverse Split, which are
immaterial) will remain the same after the Reverse Split.
EXCHANGE OF STOCK CERTIFICATES
On or around the Effective Date, the Company will provide a transmittal
form that each stockholder of record on the Effective Date should use to
transmit certificates representing shares of Existing Common ("Old
Certificates") to the Transfer Agent for exchange or transfer. The transmittal
form contains instructions for the surrender of Old Certificates to the Transfer
Agent in exchange for certificates representing the appropriate number of whole
shares in New Common. No new certificates will be issued to a stockholder until
such stockholder has surrendered its Old Certificates together with a properly
completed and executed transmittal form to the Transfer Agent.
Upon proper completion and execution of the transmittal form and its
return to the Transfer Agent together with a stockholder's Old Certificates
and/or an affidavit of loss for any lost or destroyed certificates, as
applicable, that stockholder will receive a new certificate or certificates
representing the number of whole shares of New Common into which the shares of
Common Stock represented by the Old Certificates are being converted as a result
of the Reverse Split. Until surrendered to the Transfer Agent, Old Certificates
retained by stockholders will be deemed for all purposes, including voting and
payment of dividends, if any, to represent the number of whole shares of New
Common to which such stockholders are entitled as a result of the Reverse Split.
Stockholders should not send their Old Certificates to the Transfer Agent until
after the Effective Date. Shares of Existing Common surrendered after the
Effective Date will be replaced by certificates representing shares of New
Common as soon as practicable after such surrender. No service charge will be
payable by holders of shares of Existing Common in connection with the exchange
of shares, and the Company will pay for all expenses of the exchange and
issuance of new certificates.
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Certificates representing shares of Existing Common that contain a
restrictive legend will be exchanged for New Common with the same restrictive
legend. As applicable, the time period during which a stockholder has held the
Existing Common will be included in the time period during which such
stockholder actually holds the New Common received in exchange for such Existing
Common for the purposes of determining the term of the restrictive period
applicable to the New Common.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain material federal income tax
consequences of the Reverse Split and does not purport to be a complete
discussion of all of the possible federal income tax consequences of the Reverse
Split and is included for general information only. Further, it does not address
any state, local or foreign income or other tax consequences. For example, the
state and local tax consequences of the Reverse Split may vary significantly as
to each stockholder, depending upon the state in which he or she resides. Also,
it does not address the tax consequences to holders that are subject to special
tax rules, such as banks, insurance companies, regulated investment companies,
personal holding companies, foreign entities, nonresident alien individuals,
broker-dealers and tax-exempt entities. The Existing Common discussion is based
on the provisions of the United States federal income tax law as of the date
hereof, which is subject to change retroactively as well as prospectively. This
summary also assumes that the Existing Common were, and the New Common will be,
held as a "capital asset," as defined in the Internal Revenue Code of 1986, as
amended (the "Code") (i.e., generally, property held for investment). The tax
treatment of a stockholder may vary depending upon the particular facts and
circumstances of such stockholder. Each stockholder is urged to consult with
such stockholder's own tax advisor with respect to the tax consequences of the
Reverse Split.
No gain or loss should be recognized by a stockholder upon such
stockholder's exchange of Existing Common for New Common pursuant to the Reverse
Split. The aggregate tax basis of the New Common received in the Reverse Split
(including any fraction of a New Common deemed to have been received) will be
the same as the stockholder's aggregate tax basis in the Existing Common
exchanged therefore. The stockholder's holding period for the New Common will
include the period during which the stockholder held the Existing Common
surrendered in the Reverse Split.
The Company's view regarding the tax consequence of the Reverse Split
is not binding on the Internal Revenue Service or the courts. Accordingly, each
stockholder should consult with his or her own tax advisor with respect to all
of the potential tax consequences to him or her of the Reverse Split.
THE DISCUSSION SET FORTH ABOVE CONCERNING CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE REVERSE SPLIT IS INCLUDED HEREIN FOR GENERAL INFORMATION
ONLY. ALL STOCKHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS AS TO ANY
FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES APPLICABLE TO THEM WHICH COULD
RESULT FROM THE REVERSE SPLIT.
EFFECTIVENESS
The Company reserves the right, upon notice to stockholders, to abandon
or modify the proposed amendment and the Reverse Split at any time prior to the
filing of the amendment with the Secretary of State of the State of Delaware
upon consent of the board of directors.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our common
stock by each person (including any "group" as that term is used in Section
13(a)(3) of the Exchange Act of 1934) known to us
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to beneficially own 5% or more of our common stock, each of our directors and
nominees, each of our executive officers and each of our directors and executive
officers as a group. The calculation of the percentage of our common stock
beneficially owned as of July 19, 2001 is based on 14,075,055 shares of common
stock issued and outstanding as of that date, plus 9,537,671 shares of common
stock that may be received by the holders of the Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock (all of which include
accrued dividends) upon conversion to common stock and for which the holders of
those shares are entitled to vote with the holders of common stock as a single
class on all matters submitted to our stockholders.
In accordance with the rules promulgated by the Securities and Exchange
Commission, the ownership includes shares currently owned as well as shares that
the named person has the right to acquire beneficial ownership of within 60
days, including through the exercise of options, warrants or other rights, or
through the conversion of a security. Accordingly, more than one person may be
deemed to be beneficial owner of the same securities. Except as otherwise
indicated, each stockholder listed below has sole voting and investment power of
the shares beneficially owned by that person.
SHARES
BENEFICIALLY PERCENT OF VOTING
NAME OWNED
CLASS
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Safeguard Scientifics, Inc.
800 The Safeguard building
435 Devon Park Drive
Wayne, PA 19087
8,504,353(1) 36.0%
SCP Private Equity Partners II, L.P.
800 The Safeguard Building
435 Devon Park Drive
Wayne, PA 19087
13,549,223(2) 43.5%
Technology Leaders I L.P.
800 The Safeguard building
435 Devon Park Drive
Wayne, PA 19087
1,558,856(3) 6.6%
Technology Leaders II L.P.
800 The Safeguard building
435 Devon Park Drive
Wayne, PA 19087
1,558,856(4) 6.6%
Winston J. Churchill
0 *
Christopher J. Davis
0 *
Timothy G. Davis
44,750(5) *
James W. Dixon
38,450(6) *
Robert A. Merry
475,000(7) 2.0%
Jack L. Messman
91,225(8) *
Edward R. Nugent
63,755(9) *
Arthur R. Spector
22,595(10) *
Executive officers and directors as a group (8 persons)
735,775(11) 3.0%
* Less than 1% of outstanding shares of common stock
Each individual has the sole power to vote and to dispose of the shares (other
than shares held jointly with spouse) except as follows:
(1) Includes shares held by Safeguard Scientifics (Delaware), Inc., a
wholly-owned subsidiary of Safeguard Scientifics, Inc. All of the
shares beneficially owned by Safeguard have been pledged by
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Safeguard as collateral under its line of credit. Also includes
1,232,975 shares that may be acquired upon conversion of 50,000 shares
of Series A Preferred Stock (100% of that class) and 2,255,473 shares
that may be acquired upon conversion of 132,500 shares of Series B
Preferred Stock (50% of that class). Does not include shares
beneficially owned by each of Technology Leaders I and Technology
Leaders II, venture capital partnerships in which Safeguard has a
beneficial interest. Safeguard disclaims beneficial ownership of the
shares beneficially owned by each of Technology Leaders I and
Technology Leaders II.
(2) Includes 2,255,473 shares that may be acquired upon conversion of
132,500 shares of Series B Preferred Stock (50% of that class) and
3,793,750 shares that may be acquired upon conversion of 37,500 shares
of Series C-1 Preferred Stock (100% of that class). Also includes (a)
2,450,000 shares that may be acquired upon conversion of 24,500 shares
of Series C-2 Preferred Stock pursuant to currently exercisable
warrants to purchase 24,500 shares of Series C-2 Preferred Stock and
(b) 5,050,000 shares that may be acquired upon conversion of 50,500
shares of Series C-2 Preferred Stock pursuant to warrants to purchase
50,500 shares of Series C-2 Preferred Stock, pending approval of such
issuance by the stockholders.
(3) Consists of Technology Leaders L.P. and Technology Leaders Offshore
C.V. Technology Leaders Management L.P., the sole general partner of
Technology Leaders L.P. and the co-general partner of Technology
Leaders Offshore C.V., exercises, through its executive committee, sole
investment and voting power with respect to the shares owned by such
entities. Of the 1,558,856 shares owned by Technology Leaders I,
727,831 shares are owned by Technology Leaders L.P. and 831,025 shares
are owned by Technology Leaders Offshore C.V. Technology Leaders L.P.,
Technology Leaders Offshore C.V., Technology Leaders Management L.P.,
Technology Leaders II L.P., Technology Leaders II Offshore C.V. and
Technology Leaders II Management L.P. are members of a group for
purposes of Sections 13(d) and 13(g) of the Securities Exchange Act of
1934. Technology Leaders I disclaims beneficial ownership of the shares
beneficially owned by Technology Leaders II.
(4) Consists of Technology Leaders II L.P. and Technology Leaders II
Offshore C.V. Technology Leaders II Management L.P., the sole general
partner of Technology Leaders II L.P. and the co-general partner of
Technology Leaders II Offshore C.V., exercises, through its executive
committee, sole investment and voting power with respect to the shares
owned by such entities. Of the 1,558,856 shares owned by Technology
Leaders II, 868,749 shares are owned by Technology Leaders II L.P. and
690,107 shares are owned by Technology Leaders II Offshore C.V.
Technology Leaders L.P., Technology Leaders Offshore C.V., Technology
Leaders Management L.P., Technology Leaders II L.P., Technology Leaders
II Offshore C.V. and Technology Leaders II Management L.P. are members
of a group for purposes of Sections 13(d) and 13(g) of the Securities
Exchange Act of 1934. Technology Leaders II disclaims beneficial
ownership of the shares beneficially owned by Technology Leaders I.
(5) Includes options to purchase 43,750 shares of common stock that are
exercisable within 60 days.
(6) Includes options to purchase 22,000 shares of common stock that are
exercisable within 60 days.
(7) Includes options to purchase 475,000 shares of common stock that are
exercisable within 60 days.
(8) Includes options to purchase 22,000 shares of common stock that are
exercisable within 60 days. Also includes 6,620 shares held in trust
for Mr. Messman's daughter and 6,620 shares held in trust for Mr.
Messman's son. Mr. Messman disclaims beneficial ownership of the
securities held in trust for his children.
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(9) Includes options to purchase 60,250 shares of common stock that are
exercisable within 60 days.
(10) Includes options to purchase 22,000 shares of common stock that are
exercisable within 60 days.
(11) Includes options to purchase 645,000 shares of common stock that are
exercisable within 60 days.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, or associate of any director, or
executive officer, or any other person has any substantial interest, direct or
indirect, by security holdings or otherwise, in the proposed Reverse Split.
INCORPORATION OF INFORMATION WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION
The following documents and other materials, which have been filed by
us with the Securities and Exchange Commission, are incorporated into and
specifically made a part of this information statement by this reference:
- Our Annual Report on Form 10-K for the fiscal year ended December 31,
2000; and
- Our Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2001.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Winston J. Churchill
Winston J. Churchill
Chairman of the Board of Directors
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EXHIBIT A
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
OF USDATA CORPORATION
It is hereby certified that:
1. The name of the corporation (the "Corporation") is USDATA
Corporation.
2. Upon the filing with the Secretary of State of Delaware of
this Certificate of Amendment to Certificate of Incorporation
(the "Effective Date"), each five shares of Common Stock
issued and outstanding immediately prior to the Effective Date
(including shares held in treasury of the Corporation) shall
automatically be changed into one validly issued, fully paid
and nonassessable share of Common Stock, par value $0.01 per
share, without any action on the part of the holder thereof.
Fractional shares of stock shall not be issued by the
Corporation. If the conversion shall result in a fraction of a
share, then the Corporation will round up such fraction of a
share and the holder shall be entitled to receive a whole
share for such fraction. Such action shall not affect the
stated capital of the Corporation.
3. The amendment of the Certificate of Incorporation herein
certified has been duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of
the State of Delaware.