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Filed by The TriZetto Group, Inc.
pursuant to Rule 425 under the
Securities Act of 1933 and deemed
filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: The TriZetto Group, Inc.
Commission File No.: 0-27501
The TriZetto Group, Inc. distributed this questions and answers
memorandum to its employees on or about March 29, 2000.
Q&AS
GENERAL
WHY ARE TRIZETTO AND IMS HEALTH MERGING?
The combination of TriZetto, a leader in providing Internet-enabled application
services and healthcare business portals, and IMS HEALTH, the leading provider
of information solutions to the pharmaceutical and healthcare industries,
creates the global leader in e-healthcare. We become the first company to
address the broadest possible market opportunities across the universe of
healthcare administrative pharmaceutical and medical information.
WHAT ARE THE ADVANTAGES OF THIS COMBINATION?
The merger recognizes the transforming nature of the Internet on the
healthcare industry. It unites the expertise of TriZetto in Internet-based
healthcare information technology and IMS HEALTH in global pharmaceutical
information. The merger accelerates both organizations' strategies to use
technology to link healthcare stakeholders in a virtual community -- providers,
payors, pharmaceutical companies and others. HealthWebSM, our
business-to-business healthcare Internet portal, will offer secure information
exchange and worldwide e-commerce transactions. The result: an instant Internet
infrastructure for a global company whose mission is to advance world health.
WHAT DIFFERENCES CAN TRIZETTO EXPECT?
This merger transforms TriZetto - overnight - into a global
corporation. It also broadens our customer focus from providers, payors and
benefits administrators to include the pharmaceutical industry. The merger
provides immediate opportunities to Web-enable and begin hosting virtually all
of IMS HEALTH's products, resulting in an expanded portfolio of ASP
applications. Through its market research and sales management divisions, IMS
HEALTH owns the vast majority of the world's global pharmaceutical data. This,
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combination with TriZetto's well-established business-to-business (B2B)
offerings, creates the first worldwide B2B e-healthcare information company.
WHAT ARE THE DETAILS OF THE TRANSACTION?
The merged company will be listed as The TriZetto Group, Inc. Each
company name will continue to be reflected in two publicly traded stocks.
Selected assets from IMS HEALTH - including Erisco, IMS HEALTH's provider of
technology solutions supporting managed care organizations, plus certain IMS
HEALTH technology assets -- will become part of TriZetto and traded on NASDAQ
under the TZIX symbol. The core IMS HEALTH business will continue to be traded
as a tracking stock (see definition of "tracking stock" on page 3) on the New
York Stock Exchange under the symbol RX. The goal is to unlock for investors the
high-growth Internet portal and applications services business from the more
stable, predictable pharmaceutical market research and sales management
business.
WHAT HAPPENS NOW?
We expect the merger to close in the third quarter. In the meantime,
integration teams made up of employees and headed by department heads from both
companies will begin work immediately to determine the structure of the new
organization and to develop new Web-enabled products and services later this
year. The teams will be formed quickly to begin work on specific integration
tasks, and regular updates will be provided via e-mail and employee
publications.
CAN WE EXPECT ADDITIONAL ALLIANCES ONCE THE MERGER IS COMPLETED?
We will actively investigate and pursue relationships - be they
acquisitions, alliances or partnerships that will advance our vision of
delivering unmatched healthcare content and connectivity worldwide.
WHO WILL LEAD THE NEW COMPANY?
Executive management will include Bob Weissman as chairman; Jeff
Margolis as vice chairman and president; and Vickie Fash as CEO. The board of
the new company will be composed of nine directors: Weissman, Margolis, Fash
plus 6 independent directors. As additional senior team appointments are made,
they will be communicated.
EMPLOYEES
WILL THERE BE LAYOFFS AS A RESULT OF THIS ANNOUNCEMENT?
The new company has exciting plans for growth in the global
marketplace, which translates into new and interesting career opportunities. As
with all mergers, however, management will need to take an objective look at the
new organization's structure and determine whether there are duplicitous
positions, where synergies exist and where reorganization is required. It will
probably require about six months to work through the process completely.
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WILL THERE BE A REORGANIZATION WITHIN THE NEW COMPANY?
The merger will result in a combined organization, management and
reporting structure. Naturally, this will mean some changes from current
structures, which the integration teams will address. Employees will be kept
informed of the new organization structure as it is developed.
WILL THERE BE ANY CHANGES IN BENEFITS OR COMPENSATION FOR EMPLOYEES?
Until the merger transaction is completed in the third quarter of 2000,
benefits and compensation plans will remain the same. While both companies'
current total compensation packages are comprehensive, we will design new,
integrated compensation and benefits plans for the new company. We will continue
to reward for performance.
Details will be communicated as these plans are completed.
WHERE WILL THE HEADQUARTERS BE LOCATED? WILL OUR LOCAL ORGANIZATIONS REMAIN AT
THEIR CURRENT LOCATIONS?
The headquarters will be located in the Newport Beach area of Southern
California. However, the vast majority of employees will continue to work at
their existing office locations.
WHAT OPPORTUNITIES WILL BE AVAILABLE IN THE NEW ORGANIZATION?
Dramatic growth is planned through product development and
acquisitions, creating new and interesting job opportunities. Any open positions
available in the new company will be posted and employees from all units will
have the opportunity to apply.
I HOLD TRIZETTO STOCK OPTIONS. WHAT HAPPENS TO THESE OPTIONS ONCE THE MERGER IS
COMPLETED?
As a TriZetto employee, your TriZetto options will not be impacted by
the merger. The number of options granted, the exercise price and vesting
schedule all will remain the same as originally detailed in your stock option
agreement. Additionally, all current stock option holders will receive options
to purchase "tracker stock" which you can read about later in this memo.
WHAT HAPPENS TO MY TRIZETTO STOCK WHEN THE MERGER IS COMPLETED?
Your TriZetto stock will not be impacted by the merger since we are the
acquirer in this situation. The number of TriZetto shares you own will not
change. IMS HEALTH employees, on the other hand, will have their IMS shares
converted to TriZetto shares. The ratio by which IMS shares convert to TriZetto
shares will be determined at the completion of the merger, currently scheduled
for June 30, 2000.
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I UNDERSTAND THAT A "TRACKING STOCK" WILL BE ISSUED AS PART OF THE TRANSACTION.
WHAT IS A TRACKING STOCK?
A tracking stock is a class of stock of the parent company that is
linked to the performance of a particular business. Tracking stocks unlock the
market value of a new business, much as a spin-off would, while letting the
parent company retain control of the business. In our particular situation, the
parent company (TriZetto) will issue stock for the core IMS HEALTH business to
be traded as a tracking stock under the symbol RX on the New York Stock
Exchange.
HOW MANY SHARES OF TRACKING STOCK WILL I RECEIVE, AND WHEN?
The number of tracking stock shares you receive will be determined at
the time the stock is issued, soon after the merger is completed. The number of
shares will be based on the number of shares you hold in TriZetto as of the
"record date" of the transaction.
I WOULD IMAGINE THAT THE CULTURES OF THE TWO COMPANIES ARE QUITE DIFFERENT. HOW
WILL THIS AFFECT THE WORKING RELATIONSHIPS?
Both TriZetto and IMS HEALTH have achieved success because of their
most important assets - their people. Both companies' employees are
healthcare-industry knowledgeable and keenly focused on customer service. While
each company does have some unique cultural characteristics, our intent is to
build on the strengths of both organizations' cultures - creating a responsive,
forward-looking, dynamic and innovative environment for all of our employees.
NEW ASP PRODUCTS
What IMS HEALTH products will be incorporated into our current ASP
offerings? Initially, the IMS products that will be Web-enabled and offered on a
hosted basis include:
o ERISCO: A comprehensive managed-care-operations system.
Currently, more than 125 payor organizations, serving 70
million people, use Erisco solutions.
o PROSPECTOR: Improves pharmaceutical sales and marketing
efficiency and effectiveness through better doctor targeting.
o MEDINET: A comprehensive source of disease and treatment
information at a national and regional level providing details
about the patient-physician encounter, such as condition,
diagnosis, treatment prescribed, patient demographics, etc.
o PROMONET: Comprehensive sales promotional data at the national
and regional levels, enabling strategic data modeling for the
pharmaceutical industry.
o FASTVIEW: Delivers rapid response from doctors for key
pharmaceutical market-research questions.
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o LAUNCHNET: Provides rapid feedback to enable adjustment of
promotional campaign activities during drug launches.
HOW WILL THE MERGER IMPACT THE HEALTHWEB PORTAL?
The combined entity is all about improving the connectivity of
healthcare information and transactions to advance world health. As HealthWeb is
introduced worldwide, it will be localized and country-specific, with
appropriate language, content, alliances and connectivity. For pharmaceutical
companies, it will facilitate direct-to-consumer marketing programs, and offer
access to a host of information products and health management services. These
include market research, sales management, promotional effectiveness, drug
compliance, disease management and outcomes measurement. Driving inefficiencies
out of the healthcare system, our portal will help make healthcare more
efficient, accessible and affordable. I-squared is IMS HEALTH's Internet portal
for the pharmaceutical industry. It will be integrated within the HealthWeb
portal, where it will be expanded and enhanced. The integration team will
address how this will be achieved in the coming months.
CUSTOMERS
HOW WILL CUSTOMER COMMUNICATIONS BE HANDLED?
Immediately, a mailing will be distributed to all customers announcing
this exciting news. Releases will be posted on the Web sites of both companies
as well as on a new site: www.imstri.com. In addition, we will be asking each
account team to contact its customers to inform them of the announcement. More
detailed information on the communications messages and how they should be
relayed will be provided to the appropriate teams in a separate package.
HOW DO WE ADDRESS QUESTIONS WE RECEIVE FROM THE PRESS OR OTHER OUTSIDE PARTIES?
Any questions you receive from the media or outside sources other than
customers should be directed immediately to Jodi Amendola with CPR
Communications, TriZetto's public relations firm. Jodi can be reached at (480)
657-9966.
Customer calls should directed to Paul Hoffman, director of client services, at
(303) 495-7020.
TriZetto: Harvey Garte
IMS HEALTH: Jack Walsh
This memorandum may contain forward-looking information (statements
that are not historical facts and relate to future performance) that involves
risks and uncertainties. The forward-looking statements are made pursuant to the
Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements may include statements about future net
revenues, profits, and financial results, the market for TriZetto's services,
future service offerings, client and partner relationships, and TriZetto's
operational capabilities. Actual results may differ materially from those stated
in any forward-looking statements based on a number of factors, including the
effectiveness of TriZetto's implementation of its business plan, the market's
acceptance of TriZetto's services, risks associated with management of growth,
reliance on third parties to supply key components of TriZetto's services,
attraction and retention of employees, variability of quarterly operating
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results, including the effects of the client purchasing patterns due to Year
2000 issues, competitive factors, risks associated with acquisitions, changes in
demand for third party products or solutions, which form the basis of TriZetto's
service offerings, and risks associated with rapidly changing technology, as
well as the risks identified in TriZetto's SEC filings, including information
under the heading of risk factors in its Form S-1 filed in October 1999.
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ADDITIONAL INFORMATION AND WHERE TO FIND IT
IMS Health Incorporated ("IMS") and The TriZetto Group, Inc. ("TriZetto") plan
to file a Registration Statement on Form S-4 and other relevant documents with
the Securities and Exchange Commission (the "SEC")in connection with the Merger,
and IMS and TriZetto expect to mail a Joint Proxy Statement/Prospectus to
stockholders of IMS and TriZetto containing information about the Merger.
Investors and security holders are urged to read the Registration Statement, the
Joint Proxy Statement/Prospectus, and other documents filed with the SEC
carefully when they are available. The Registration Statement, Joint Proxy
Statement/Prospectus, and other filings will contain important information about
IMS, TriZetto, the Merger, the persons soliciting proxies relating to the
Merger, their interests in the Merger, and related matters. Investors and
security holders will be able to obtain free copies of these documents through
the website maintained by the SEC at http://www.sec.gov. Investors will be able
to obtain copies of the documents free of charge from IMS by directing a request
through the Investor Information portion of IMS's website at
http://www.imshealth.com or by mail to IMS Health Incorporated, 200 Nyala Farms,
Westport, CT 06880, attention: Investor Relations, telephone: 203-222-4250.
Documents filed by TriZetto will be available free of charge from TriZetto by
directing a request through the Investor Information portion of TriZetto's
website at http://www.trizetto.com or by directing a request by mail to The
TriZetto Group, Inc., 567 San Nicolas Drive, Newport Beach, CA 92660, attention:
Investor Relations, telephone: (949) 219-2200. In addition to the Registration
Statement and the Joint Proxy Statement/Prospectus, IMS and TriZetto file
annual, quarterly and special reports, proxy statements and other information
with the SEC. You may read and copy any reports, statements or other information
filed by IMS or TriZetto at the SEC public reference rooms at 450 Fifth Street,
N.W., Washington, D.C. 20549 or at any of the SEC's other public reference rooms
in New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. IMS's and
TriZetto's filings with the SEC are also available to the public from commercial
document-retrieval services and at the Web site maintained by the SEC at
http://www.sec.gov.
INVESTORS SHOULD READ THE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY
WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.
TriZetto, its directors, executive officers and certain other members
of management and employees may be soliciting proxies from TriZetto stockholders
in favor of approval and adoption of the merger agreement. Information
concerning the participants in the solicitation will be set forth in the Joint
Proxy Statement/Prospectus when it is filed with the SEC.
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