RCN Corporation, is one of the largest facilities-based competitive providers of bundled cable, high-speed internet and phone services delivered over its own fiber-optic local network to residential, small business and commercial customers in the most densely populated markets in the U.S. RCN provides service in the Boston, Chicago, Eastern Pennsylvania, New York, and Washington, D.C. metropolitan markets. In addition, RCN also serves commercial customers through RCN Business Services, a provider of bulk video, broadband internet access and voice services to small and medium business customers, and RCN Metro Optical Networks, the newly formed company resulting from RCN Business Solutions? acquisition of NEON Communications. RCN Metro is a fiber facilities-based provider of high-availability telecommunication services to both retail and wholesale business customers.
Why did RCN buy NEON Communications?
NEON offered RCN's commercial business a crucial scaling opportunity in the communications-intensive Northeast and Mid-Atlantic corridor. NEON was a wholesale carrier offering a comprehensive suite of high bandwidth transport services primarily to carrier and large enterprise customers from Maine to Virginia. NEON's state-of-the-art network and facilities were complementary to and/or usefully redundant with RCN's network. Further, NEON offered RCN tremendous instantaneous commercial expansion as well as future expansion potential for both residential and commercial customers. The acquisition exemplifies RCN's asset strategy and represents the next stage in the evolution of RCN's sales and service to business and enterprise customers. NEON was combined with RCN Business Solutions to form RCN Metro Optical Networks.
When did the merger between RCN and NEON close?
On November 13, 2007, RCN Corporation merged NEON Communications into its RCN Business Solutions unit to form an exciting new division to be known as RCN Metro Optical Networks. The merger was approved by NEON shareholders on November 6, 2007.
What will I receive for my NGI shares as a result of the merger?
For each issued and outstanding share of NEON common stock and preferred stock, you will receive $5.15per share in cash, without interest. The actual payment to you may be reduced by the amount of any required tax withholding.
Is the merger a taxable event?
Generally speaking, yes, as the receipt of $5.15 in cash for each share of NGI common stock and preferred stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. For U.S. federal income tax purposes, you will generally recognize gain or loss as a result of the merger measured by the difference, if any, between the amount per share merger consideration you receive and your adjusted tax basis in that share. You should read "The Merger-Material U.S. Federal Income Tax Consequences" beginning on page 39 of the Proxy Statement filed by NEON Communications Group, Inc. on October 1, 2007 with the SEC for a more complete discussion of the federal income tax consequences of the merger. Tax matters can be complicated and the tax consequences of the merger to you will depend on your particular tax situation. You should also consult your tax advisor on the tax consequences of the merger to you.
What will happen to my outstanding stock NEON options and warrants?
Under the merger agreement, any vesting remaining to be completed on any NEON stock options will be accelerated, and:
Each outstanding option will be canceled in exchange for an amount in cash determined by multiplying (i) the excess, if any, of the final per share merger consideration over the per share exercise price of the option by (ii) the number of shares of NEON common stock issuable upon exercise of the option;
Each outstanding warrant will be canceled in exchange for an amount in cash determined by multiplying (i) the excess, if any, of the final per share merger consideration over the exercise price of the warrant by (ii) the number of shares of NEON common stock issuable upon exercise of the warrant; and
The payments due to the holders of NEON stock options or warrants may be reduced by the amount of any required tax withholding.
Do I have to exchange my physical NGI stock certificate(s)?
Yes. The merger has taken place and you must surrender your physical NGI stock certificate(s) in order to receive payment for your shares.
When will the payment for my NGI shares appear in my account?
If you hold your shares in book-entry form, you should receive payment for your shares promptly after the merger. If you hold your shares in certificated form, you will need to complete a Letter of Transmittal and return your physical certificates to Mellon Investor Services in order to receive payment for NGI Holdings shares. Letters of Transmittal will be mailed to shareholders holding certificated shares promptly after the merger.
Can I bring or send my stock certificate(s) into the offices of RCN or NEON for exchange?
No. Mellon Investor Services is the Exchange Agent for the merger, and you will need to deliver your physical NGI stock certificate(s) to them. Letters of Transmittal will be mailed to shareholders holding certificated shares promptly after the merger. You will need to complete a Letter of Transmittal and return your physical certificates to Mellon Investor Services.
I have not received a Letter of Transmittal or I need new Letter of Transmittal. Whom should I contact?
Letters of Transmittal will be sent by Mellon Investor Services to each NGI shareowner that holds a physical certificate. Please allow approximately two weeks to receive your Letter of Transmittal. If you believe NEON does not have your current address, have not received a Letter of Transmittal or need an additional Letter of Transmittal, please contact the Exchange Agent at 1-800-777-3674 (outside the United States 1-201-680-6573) to request a new Letter of Transmittal. Please note that if you hold your shares in book-entry form, and do not hold physical certificates, you do not need to complete a Letter of Transmittal.
Whom shall I contact if I have additional questions about my receipt of payment?
You may call Mellon Investor Services, toll-free at 1-800-777-3674. Representatives are available 9 a.m. to 6 p.m. Eastern Standard Time Monday through Friday, except for bank holidays.
Outside the U.S., you can call 1-201-680-6573.
Or By Mail
Mellon Investor Services, LLC
Attn: Corporate Action Department
P.O. Box 358300
Pittsburgh, PA 15252-8300
Or By Overnight Courier or By Hand
Mellon Investor Services, LLC
Attn: Corporate Action Department
480 Washington Boulevard
Jersey City, NJ 07310
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