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Filing by Intel Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Excalibur Technologies Corporation
Commission File No.: 0-9747
On May 9, Excalibur Technologies Corporation sent the following letter to its
stockholders.
[EXCALIBUR LOGO] [INTEL LOGO]
May 9, 2000
Dear Excalibur Shareholder,
We are pleased to follow up on our May 1 announcement that Excalibur
Technologies Corporation will merge with Intel Corporation's Interactive Media
Services division to form a new, publicly traded company. We want to share with
you our vision and excitement about this new enterprise, the background behind
our agreement and our current thinking regarding plans for the new company.
Our mission will be to position the new company as a leading supplier of
interactive media services to the Internet economy. Our strategy is to provide
business-to-business solutions that enable content owners new and exciting ways
to allow end-users to interact with their valuable content.
The new company plans to build on our current businesses by being among the
first to offer a media services solution that enables content owners, such as
entertainment companies and sports leagues, to distribute their content securely
over the Internet. We believe we will have an advantage in the ability to
consolidate and rapidly bring to market a solution that benefits from several
years of separate, but complementary efforts by Intel and Excalibur to develop
technologies and businesses capable of exploiting the opportunity for
Internet-based interactive media. For Excalibur's part, these efforts focused on
content management - the encoding, indexing, searching, retrieving and
publishing of multimedia - and resulted in products able to organize and search
all kinds of content. Intel's efforts focused on content protection and content
enrichment through video and data integration and resulted in products and
services that provide the infrastructure required to deliver branded content
over the Internet. These remarkably complementary technologies and capabilities
represent many years and a significant dollar investment in research and
development. As a unified offering, we expect to provide a solution customers
need to encode,
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protect, organize and deliver branded, high-value content on the Internet using
new business models such as subscription and pay-per-view.
According to Kagan and Associates, the market segment for secure transmissions
of video and data over the Internet is expected to reach $16 billion by the year
2004. In addition, according to IDC by 2003 44% of Internet users will be using
streaming media capability monthly, up from 19% today. At Intel we brought
together three existing business units having an emphasis in this area to create
the Interactive Media Services division whose continued focus is on winning
contracts with innovative companies. Several of our current customers are signed
up for multi-year transactions and we are working at transferring these accounts
and contracts to the new company. If successful, these contracts will provide a
material contribution to the combined company's revenues. The Interactive Media
Services division is made up of three business units:
- The Internet Security Services unit provides software products and
services that enable an end-to-end solution for secure digital
content distribution and playback. Its product is sold into vertical
segments such as music, documents and streaming video. Current
customers include Preview Systems and SoftLock.com.
- The Enhanced Video Services unit provides services for the creation,
management and delivery of enhanced video content over the Internet
and digital broadcast channels. These services enable content owners
to create interactive content, protect it, and deliver it to end
users on a variety of devices. Current customers include Choice
Seat, Quokka Sports and Avid Sports.
- The Entertainment Content Services unit takes on the role of systems
integrator to provide consumer oriented offerings for customers
operating in the entertainment industry. Using core competencies of
program management, human factors engineering and software
engineering, this unit defines and implements end-to-end solutions.
Current customers are in the areas of music, sports and lifestyles
and include Supertracks and Avid Sports.
Intel will contribute to the new company a number of key assets and capabilities
including:
- - Extensive media/entertainment industry relationships
- - Broad set of technical capabilities: video and data, security, content
protection
- - Ten patents and patent applications in the area of content security
- - Source code components
- - Licenses to more than 45 additional source code components and other Intel
patents and patent applications
- - Technical employee resources in key areas: primarily in software and
engineering
- - Significant customers in focus market segments
- - Experienced management team
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The new company will offer employment to the 60 or more engineers and other
professionals who currently comprise Intel's Interactive Media Services
division. Finally, Ron Whittier, an Intel Senior Vice President, has agreed to
take the helm as Chairman of the Board and CEO of the new company. At the
closing of the transaction, Intel will hold a 60% ownership stake in this
enterprise and have two representatives on the Board of Directors. Pat Condo
will become President and COO of the new company.
We will continue to serve Excalibur's customer base and believe that the
combination will make available new products and services that will be
advantageous to current customers. We expect to work with our new customers in a
flexible business model ranging from licensing products and purchasing services
to revenue sharing and equity arrangements.
Of course, we have a lot of work to do. The transaction is subject to regulatory
review, customary closing conditions and approval by you. Excalibur plans to
file a proxy statement/prospectus and other relevant documents concerning the
merger with the Securities and Exchange Commission (the "Commission"). WE URGE
INVESTORS AND STOCKHOLDERS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS TO BE FILED WITH THE COMMISSION BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and stockholders will be able to obtain free
copies of these documents at the Commission's website at www.sec.gov.
In conclusion, we believe the combined company will have the people, technology,
resources, customers, associations, and the vision to win a leading position in
interactive media services. We are excited about this opportunity and are
pleased that Intel and Excalibur will be joining forces. We hope you share our
excitement.
Warm regards,
Donald R. Keough Patrick C. Condo
Chairman of the Board President and Chief Executive Officer
Excalibur Technologies Corporation Excalibur Technologies Corporation
/s/ GERHARD H. PARKER /s/ RONALD J. WHITTIER
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Gerhard H. Parker Ronald J. Whittier
Executive Vice President Senior Vice President
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General Manager, New Business Group General Manager, Content Services
Intel Corporation Intel Corporation
INVESTORS AND STOCKHOLDERS SHOULD READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY
BEFORE MAKING A DECISION CONCERNING THE MERGER.
Intel, Excalibur and their respective officers and directors may be deemed to be
participants in the solicitation of proxies from Excalibur stockholders with
respect to the transactions contemplated by the merger agreement. Information
concerning the participants in the solicitation will be set forth in the proxy
statement/prospectus when it is filed with the Commission.
This document contains forward-looking statements, which are based upon current
expectations or beliefs, as well as a number of assumptions about future events.
The reader is cautioned not to put undue reliance on these forward-looking
statements, as these statements are subject to numerous factors and
uncertainties, including without limitation, business and economic conditions,
continued success in technological advances, costs related to the proposed
merger, the inability to obtain governmental approval of the proposed merger,
substantial delay in the expected closing of the merger and the risk that the
Interactive Media Services division of Intel and Excalibur's businesses will not
be integrated successfully, any of which may cause actual results to differ
materially from those described in these statements. In addition to the factors
discussed above, other factors that could cause actual results to differ
materially are discussed in Intel's and Excalibur's most recent Form 10-Q and
Form 10-K filings with the Commission.
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