Preliminary Proxy Statement Subject to Completion — Dated May        , 2004

TROVER SOLUTIONS, INC.

, 2004

Dear Fellow Stockholders:

I am pleased to report that on February 19, 2004, Trover entered into a merger agreement with TSI Holding Co., Inc., and TSI Acquisition Co., Inc. The merger agreement provides for Trover to be purchased and taken private through a merger transaction in which all of your shares of Trover common stock will be converted into the right to receive $7.00 per share in cash, without interest on that amount. Both TSI Acquisition Co., Inc. and TSI Holding Co., Inc. are affiliates of Tailwind Capital Partners LLC, which manages Thomas Weisel Capital Partners, L.P., a private equity fund.

After careful consideration, the board of directors of Trover, based in part upon the unanimous recommendation of a special committee comprised of independent members of the board of directors of Trover, unanimously determined that the merger agreement and the proposed merger are fair to, and in the best interests of, Trover stockholders. Your board of directors recommends that you vote “FOR” adoption of the merger agreement.

The proposed merger is more fully described in the accompanying proxy statement. We are asking you to adopt the merger agreement and thereby approve the merger at a special meeting for such purpose to be held on                , 2004 at 10:00 a.m., Eastern Standard Time, at Watterson Tower, 12^th Floor, 1930 Bishop Lane, Louisville, Kentucky 40218.

If you do not wish to accept the merger consideration provided in the merger, you have the right to exercise appraisal rights under Delaware law and obtain the “fair value” of your shares of common stock of Trover, provided that you do not vote in favor of adopting the merger agreement and you otherwise comply with the conditions established under applicable Delaware law, which are explained in the accompanying proxy statement.

Your vote is very important! We cannot complete the proposed transaction unless the holders of a majority of the outstanding shares of Trover common stock affirmatively vote to adopt the merger agreement. Failing to return your proxy card or to vote in person at the special meeting will have the same effect as a vote “AGAINST” the adoption of the merger agreement.

To adopt the merger agreement and thereby approve the merger you should cast a “FOR” vote by following the instructions contained in the enclosed proxy card. If you properly sign and return your proxy card with no voting instructions, you will be deemed to have voted “FOR” the adoption of the merger agreement. Returning the proxy card does not deprive you of your right to attend the special meeting and vote your shares in person.

Please read the entire accompanying proxy statement carefully, including the appendices. In particular, before voting, you should carefully consider the discussion in the section of the proxy statement entitled “Special Factors.” As explained in the proxy statement, our board members and executive officers will have

interests in the proposed transaction that are different from or in addition to the interests of stockholders generally.

June                , 2004
Louisville, Kentucky

This proxy statement is dated June        , 2004 and is first being mailed to stockholders of Trover on or about June        , 2004.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved this transaction, passed upon the merits or fairness of this transaction, or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

TROVER SOLUTIONS, INC.

NOTICE OF

To the Stockholders of Trover Solutions, Inc.:

Notice is hereby given that a special meeting of the stockholders of Trover Solutions, Inc. will be held on                , 2004 at 10:00 a.m., Eastern Standard Time, at Watterson Tower, 12th Floor, 1930 Bishop Lane, Louisville, Kentucky 40218 to consider and vote upon:

The proposals are described in detail in the accompanying proxy statement and the appendices thereto.

Please read the entire accompanying proxy statement carefully, including the appendices. In particular, before voting, you should carefully consider the discussion in the section of the proxy statement entitled “Special Factors.”

The board of directors of Trover has fixed the close of business on                        , 2004 as the record date for determining the stockholders entitled to notice of and to vote at the special meeting and any adjournments or postponements thereof. Only holders of record of shares of Trover common stock at the close of business on the record date are entitled to notice of, and to vote at, the special meeting or any adjournments or postponements thereof.

After careful consideration, the board of directors of Trover, based in part upon the unanimous recommendation of a special committee comprised of independent members of the board of directors of Trover, unanimously determined that the merger agreement and proposed merger are fair to, and in the best

interests of, Trover stockholders. Your board of directors recommends that you vote “FOR” the adoption of the merger agreement.

Your vote is very important, regardless of the number of shares of Trover common stock you own. Please vote your shares as soon as possible to ensure that your shares are represented at the special meeting. To vote your shares, you must complete and return the enclosed proxy card. If you hold your shares in your own name, you also may cast your vote in person at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct them on how to vote your shares. If you do not instruct your broker or bank on how to vote, it will have the same effect as voting “AGAINST” the adoption of the merger agreement and the approval of the merger.

Louisville, Kentucky
June        , 2004

If you do not wish to accept the merger consideration provided for in the merger agreement, you have the right to exercise appraisal rights under Section 262 of the Delaware General Corporation Law and obtain the “fair value” of your shares of common stock of Trover, provided that you comply with the conditions established under applicable Delaware law. For a discussion regarding your appraisal rights, see the section titled “The Special Meeting—Appraisal Rights” in the accompanying proxy statement and Appendix C to the proxy statement, which sets forth the text of that statute.

TABLE OF CONTENTS

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TABLE OF CONTENTS
(continued)

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SUMMARY

This summary briefly describes the information in this proxy statement that we believe to be material, but it may not contain all of the information that is important to you. To understand the proposed merger transaction and other matters relevant to the special meeting, you should carefully read this entire document as well as the additional documents to which it refers, including the merger agreement, which is attached to this proxy statement as Appendix A, our Annual Report on Form 10-K for the year ended December 31, 2003 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2004. We have included references to pages in this document to assist you in locating more complete discussions of the topics presented in this summary. To learn how to obtain additional information beyond what is provided in this document, see “Where Stockholders Can Find More Information” on page    .

For purposes of this proxy statement:

Special Meeting — See page        

The special meeting of our stockholders at which you will be asked to vote on the merger agreement is to be held at 10:00 a.m. Eastern Standard Time on                , 2004, at Watterson Tower, 12^th Floor, 1930 Bishop Lane, Louisville, Kentucky 40218. You are entitled to vote at the special meeting if you owned shares of our common stock at the close of business on                , 2004, which is the record date for the special meeting. You will have one vote for each share of our common stock that you owned at the close of business on the record date. If your shares are held in street name by a broker, you will need to provide your broker with instructions on how to vote your shares. On the record date, there were                            shares of our common stock outstanding and entitled to vote at the special meeting.

Purpose of the Special Meeting — See page        

The special meeting has been called in order for you to consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of February 19, 2004, and referred to throughout this document as the merger agreement, by and among Parent, Acquisition Corp. and Trover. The merger agreement provides that if our stockholders adopt the merger agreement and certain other conditions are satisfied, Acquisition Corp. will be merged with and into Trover, and Trover will be the surviving corporation. Upon completion of the merger, Trover will be wholly owned by Parent.

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Stockholder Approval Required — See page        

The merger will be completed only if the merger agreement is adopted by the affirmative vote of a majority of the outstanding shares of our common stock. Abstentions and broker non-votes will have the same effect as a vote against adoption of the merger agreement.

The Participants — See page        

Trover. We were incorporated in Delaware on June 30, 1988. We provide subrogation and certain other claims recovery and cost containment services, on an outsourcing basis, to the private healthcare payor industry and the property and casualty insurance industry.

Acquisition Corp. Acquisition Corp. is a Delaware corporation that was recently formed by Tailwind for the sole purpose of completing the merger. Acquisition Corp. is wholly owned by Parent and has not engaged in any business except in anticipation of the merger.

Parent. Parent is a Delaware corporation that was recently formed by Tailwind for the sole purpose of acquiring Trover. Parent has not engaged in any business except in anticipation of the merger. The stockholders of Parent following the merger will be Thomas Weisel Capital Partners, L.P., its co-investors and the Management Investors.

Thomas Weisel Capital Partners, L.P. and Its Affiliated Co-investors. Thomas Weisel Capital Partners is a Delaware limited partnership with backing from leading institutional investors and a current portfolio of over 30 companies primarily focused in the growth sectors of the economy, including healthcare, technology and business services, and media and communications. The general partner of Thomas Weisel Capital Partners is Tailwind. The following affiliated entities will co-invest with Thomas Weisel Capital Partners in Trover by acquiring stock of Parent: TWP CEO Founders’ Circle (QP), L.P., TWP CEO Founders’ Circle (AI), L.P., Thomas Weisel Partners Group LLC and Thomas Weisel Capital Partners Employee Fund, L.P.

Tailwind, Thomas Weisel Capital Management LLC and Thomas Weisel Partners Group LLC. Tailwind, a Delaware limited liability company, is the general partner of Thomas Weisel Capital Partners and in this capacity it is responsible for identifying, negotiating, structuring, acquiring, holding and disposing of the investments of, and otherwise managing, Thomas Weisel Capital Partners. The day-to-day business of Tailwind is managed by individuals who serve as its managing partners, with oversight by Thomas Weisel Capital Management LLC, a Delaware limited liability company, as managing member of Tailwind. Thomas Weisel Partners Group LLC, a Delaware limited liability company, is the managing member of Thomas Weisel Capital Management LLC and is a holding company that (directly and indirectly through subsidiaries or affiliated companies or both) is a privately held investment banking firm. The business and affairs of Thomas Weisel Partners Group LLC are managed by its executive committee.

Management Investors. The Management Investors are the members of our senior management who will own shares of Parent common stock and options to acquire Parent common stock if the merger is consummated. The Management Investors are Patrick B. McGinnis (our Chairman of the Board and Chief Executive Officer), Robert G. Bader, Jr. (our Executive Vice President—Healthcare Sales, Marketing & Corporate Client Solutions), Mark J. Bates (our Executive Vice President––Healthcare Recoveries Division, Overpayments), Robert L. Jefferson (our Senior Vice President—TransPaC Solutions), Debra M. Murphy (our Executive Vice President—Healthcare Recoveries Division, Subrogation) and Douglas R. Sharps (our Executive Vice President—Finance & Administration, Chief Financial Officer and Secretary).

Background of the Merger — See page        

The process that resulted in the proposed merger began when Patrick B. McGinnis, who is our chief executive officer and also serves as the chairman of our board of directors, recommended that the board consider a transaction in which Mr. McGinnis and other members of our executive management would pursue a buy-out transaction in which all of Trover’s outstanding shares of common stock would be purchased by an employee stock ownership plan (“ESOP”). In June 2003, Trover’s board of directors formed a special committee of independent directors to

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review the strategic issues facing us and alternatives that might be available to enhance stockholder value. The special committee retained Houlihan Lokey Howard & Zukin Financial Advisors, Inc. (“Houlihan Lokey”) as financial advisor and directed Houlihan Lokey to solicit proposals from parties who might be interested in acquiring us. Houlihan Lokey contacted 84 parties, 39 of whom entered into confidentiality agreements and were provided information regarding us and 18 of whom submitted indications of interest. The special committee selected the Tailwind proposal from among those indications of interest. After significant negotiations, the special committee and Tailwind reached the agreements reflected in the merger agreement. “Special Factors––Background of the Merger” and “Special Factors—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger.”

Mr. McGinnis will benefit from the proposed transaction in several respects, including by the extension of the scheduled repayment date of a personal loan. At April 30, 2004, the unpaid balance of that loan (including accrued unpaid interest) was $1,009,435. Mr. McGinnis and other members of our management team also will co-invest with Tailwind in the company that will own Trover following the merger, and will be entitled to participate in a newly established stock option plan. See “Interests of Trover’s Directors and Executive Officers,” below.

Recommendation of the Special Committee — See page        

The special committee has unanimously determined that the terms of the merger as contemplated by the merger agreement are fair to, and in the best interests of, the Trover stockholders. Consequently, the special committee recommended that the Trover board of directors adopt the merger agreement and submit the merger agreement to the Trover stockholders. The members of the special committee are Jill L. Force (Chair), William C. Ballard, John H. Newman, Lauren N. Patch and Chris B. Van Arsdel. The special committee consists solely of independent directors who are not officers or employees of or consultants to Trover or the Tailwind Entities.

Each member of the special committee was paid $10,000 for serving on the special committee. Ms. Force was paid an additional $30,000 for serving as chair of the special committee. Each member also is entitled to receive $1,000 for each special committee meeting attended, which we anticipate will result in additional payments of approximately $20,000 per member. In the merger, the vesting of each special committee member’s “in-the-money” stock options will be accelerated. This accelerated vesting will cover an aggregate of 26,657 shares. At the same time, the special committee members’ “out-of-the-money” options (covering an aggregate of 117,000 shares) will be cancelled without consideration.

Recommendation of the Board of Directors — See page        

The board of directors of Trover, based in part on the unanimous recommendation of the special committee, has unanimously determined that the merger agreement and the proposed merger are fair to, and in the best interests of, Trover’s stockholders and recommends that you vote “FOR” the adoption of the merger agreement. In deciding to recommend that our stockholders vote to adopt the merger agreement, our board of directors considered a number of factors, including the following:

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Opinion of Financial Advisor — See page        

One of the factors considered by our board of directors and the special committee in deciding to approve the terms of the merger agreement and the merger was the opinion of Houlihan Lokey, the financial advisor retained by the special committee. Houlihan Lokey delivered a written opinion to the Trover board of directors that, as of the date of its opinion, and based upon and subject to the matters described in the opinion, the price per share to be received by the holders of Trover common stock in the proposed merger pursuant to the merger agreement was fair to such holders from a financial point of view. A copy of that opinion is attached as Appendix B to this proxy statement. We have agreed to pay Houlihan Lokey a fee of $1,180,000 for its services and to reimburse certain of its expenses incurred in connection with its engagement. A substantial portion of that fee ($1,030,000) is contingent on completion of the merger. The balance has been paid.

You should carefully review the description that appears later in this proxy statement (at pages    through    ) of the various analyses performed by Houlihan Lokey in connection with rendering its opinion. As more fully explained there, the multiples of revenue, earnings, EBIT and EBITDA implied by the terms of the merger are lower than the corresponding mean and median multiples of all the selected companies and all the selected transactions included in Houlihan Lokey’s presentation to the special committee. Houlihan Lokey concluded that its analyses were appropriate because, among other things,

In addition, Houlihan Lokey advised the special committee that although they believed the group of selected companies was the most appropriate for this purpose, each of the selected companies was different from Trover in significant ways.

Purpose and Effects of the Merger — See page        

For Trover, the purpose of the merger is to allow Trover’s stockholders to receive cash for their shares at a price that represents a substantial premium over the market prices at which the common stock traded before Trover announced

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the formation of the special committee and in a transaction that allows all stockholders to obtain this price notwithstanding the low historical trading volume of the Trover common stock.

Although the $7.00 per share payable in the merger represents a premium to the prices at which the common stock traded before the announcement of the appointment of the special committee, since that time the common stock has traded at prices closer to, and occasionally above, $7.00 per share. The $7.00 per share price payable in the merger represents no premium to the last reported sales price of our common stock on the last trading day preceding the announcement of the merger agreement and is 3.8% less than the highest reported closing sale price at which our stock traded between August 1, 2003 and February 20, 2004 (which was $7.28). The following table sets forth the premium (or discount) (expressed in percentage terms) of the $7.00 per share merger consideration over the last reported sales prices of our common stock on the dates indicated.

For the Tailwind Entities, the purpose of the merger is to acquire a controlling interest in Trover. At the date of this proxy statement, the Tailwind Entities did not hold, nor have they ever held in the past, any shares of Trover common stock.

Upon consummation of the merger, all shares of Trover common stock, other than shares held by stockholders who perfect their appraisal rights under Delaware law, shares held by Parent and Acquisition Corp. and shares held by Trover or its subsidiaries as treasury stock, automatically will be converted into the right to receive $7.00 in cash, without interest on that amount. Only stockholders who do not elect to seek appraisal rights (or who fail properly to seek such appraisal rights) under Delaware law will be entitled to receive the merger consideration. Following completion of the merger, Trover, as the surviving corporation in the merger, will cease to be a public company and instead will be privately held, shares of Trover common stock will no longer be traded on the Nasdaq National Market and there will be no other public market for those shares.

Treatment of Stock Options in the Merger — See page        

Except as described below, upon consummation of the merger, all outstanding and unexercised options to purchase shares of Trover common stock, whether or not then vested, will be cancelled and each holder of an option will be entitled to receive a cash payment in an amount equal to the product of (i) the number of shares of Trover common stock subject to the option and (ii) the excess, if any, of $7.00 over the exercise price per share of the option. Options with an exercise price equal to or greater than $7.00 per share will be cancelled at the effective time of the merger without any payment or other consideration to the holder.

Interests of Trover’s Directors and Executive Officers — See page        

In the merger, the members of our management and board of directors will be entitled to receive the same $7.00 per share payment for their shares of Trover common stock as our other stockholders. Their Trover stock options will be treated in the same way as those of all other option holders, except that the merger agreement provides that some

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of our employees may agree with Parent that those employees will “roll over” their existing “in-the-money” Trover stock options (i.e., options with an exercise price below $7.00 per share) following the completion of the merger, and we have been advised that the Management Investors expect to make this roll-over election in respect of options to acquire approximately 675,000 shares. All of the Management Investors’ “out-of-the-money” options, (i.e., options with an exercise price equal to or greater than $7.00 per share), covering approximately 871,000 shares, will be cancelled without consideration in the merger in the same way as all other option holders’ out-of-the-money options. We also have been advised that the Management Investors, pursuant to an invitation by Tailwind, expect to co-invest an aggregate of approximately $1.1 million with the Tailwind Entities by purchasing common stock of Parent at the time the merger is completed. The prices per share of Parent stock payable by the Management Investors under these co-investment arrangements will be the same prices per share paid by the Tailwind Entities and other co-investors for their shares of Parent. The prices to be paid by the Management Investors and Tailwind Entities under these co-investment arrangements will represent a significantly lower equity valuation than the equity valuation implicit in the $7.00 per share merger consideration, because a substantial part of the total capitalization of Trover following the merger will be comprised of debt rather than equity. Certain of our executive officers and other management-level employees also will be eligible to receive additional options to acquire Parent common stock following the merger. Up to 20% of Parent’s equity capitalization immediately following the merger will be available for issuance under Parent’s new stock option plan.

Mr. McGinnis has entered into a definitive agreement regarding his continued employment with Trover following the merger on terms substantially similar to those in his current employment agreement with Trover. The provisions in Mr. McGinnis’ new employment agreement regarding his compensation are the same as in his existing employment agreement with Trover. Mr. McGinnis’ existing employment agreement has an initial term of three years beginning January 1, 2003, while the initial term of the new employment agreement will begin at the effective time of the merger and end on December 31, 2005. Mr. McGinnis has borrowed money from Trover that he is required to repay with interest. The loan is repayable in full on January 1, 2005. At April 30, 2004, the unpaid balance of that loan (including accrued unpaid interest) was $1,009,435. Parent has agreed that, when the merger is completed, Trover will extend the maturity of the loan to January 1, 2009 (which Trover would be legally prohibited from doing if it remained a public company). Tailwind has told us that it expects that Trover’s current management will be retained after the merger. Pursuant to severance agreements with Trover, Messrs. Bader, Bates, Jefferson and Sharps and Ms. Murphy will be entitled to change-of-control payments if within the two-year period following the merger their employment is terminated or they voluntarily terminate their employment for “good reason” (i.e., essentially, significant adverse changes in working conditions). At present, we have no reason to believe that any of these change-of-control payment obligations will be triggered. If, hypothetically, they were all triggered after the merger and during 2004, the aggregate maximum amount of those payments (not including the value of non-cash benefits) would be $1,563,834.

Because of these arrangements, some members of Trover’s management team have interests in respect of the merger that are different from the interests of Trover stockholders generally.

At the record date, the Management Investors owned shares representing in the aggregate less than 2.5% of the outstanding stock of Trover. We have been informed that the Management Investors intend to vote in favor of the merger.

Merger Financing — See page        

Tailwind estimates that approximately $65.9 million will be required by Parent in order to pay the merger consideration that will be due to Trover’s stockholders and option holders under the merger agreement and to pay the related fees and expenses of Parent and Acquisition Corp. Tailwind expects this amount to be funded through a combination of equity contributions by Thomas Weisel Capital Partners, its co-investors and the Management Investors, new credit facilities to be provided by an institutional lender and Trover’s available cash reserves following the completion of the merger. Tailwind has received a financing commitment from CapitalSource Finance LLC for $27.5 million of senior secured credit facilities, and it intends to apply borrowings of approximately $25.0 million under these facilities to the merger-related funding requirements. The obligations of Parent and Acquisition Corp. to complete the merger are not subject to a financing condition, and Thomas Weisel Capital Partners has agreed to provide sufficient funds to consummate the merger, whether or not new credit facilities are obtained, subject to the conditions set forth in the merger agreement.

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Conditions to the Completion of the Merger — See page        

The merger is subject to the satisfaction of a number of conditions, including the adoption of the merger agreement by the holders of a majority of the outstanding shares of our common stock and that between December 31, 2002 and the effective time of the merger, except for matters already disclosed to Parent, no change, event, circumstance or development will have occurred, that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on Trover.

Limitation on Considering Other Offers — See page        

We have agreed in the merger agreement not to participate in any discussions or negotiations regarding an alternative transaction, provide any information with respect to a potential alternative transaction or solicit, initiate or encourage the submission of any proposal by a third party for an alternative transaction while the merger is pending and that during the same period our board of directors may not approve or recommend an alternative transaction, in each case except in the limited circumstances specified in the merger agreement. This provision limited our ability to investigate a written preliminary indication of interest that we received after we had entered into the merger agreement and that indicated, subject to due diligence and certain other conditions, a possible range of $7.25-$7.50 per share. We replied by letter to the indication of interest, explaining the limitations imposed under the merger agreement. Subsequently, we filed preliminary proxy materials with the SEC that contained financial and other information that had not previously been available to the party that sent the indication of interest. Since then, we have not been contacted by that party. See “Special Factors—Background of the Merger.”

Termination of the Merger Agreement — See page        

Trover and Parent may agree to terminate the merger agreement at any time before the merger. In addition, the merger agreement may be terminated by either Trover or Parent for a number of other reasons. Under certain circumstances, following a termination of the merger agreement, Trover would be required to reimburse Parent for its out-of-pocket expenses in an amount not to exceed $2.0 million and also may be required to pay termination and break-up fees of up to an additional $2.0 million.

U.S. Federal Income Tax Consequences — See page        

Generally, you will recognize gain or loss for U.S. federal income tax purposes on your exchange of your shares of Trover common stock for cash in the merger. You should consult your own tax advisor for a full understanding of the tax consequences of the merger to you.

Appraisal Rights — See page        

Under Delaware law, in connection with the merger you have the right to seek an appraisal by a Delaware court of the fair value of your shares of Trover common stock, but only if you comply with all requirements set forth under Delaware law as described on pages         through         of this proxy statement and in Appendix C to this proxy statement. Depending on the determination of the court, the appraised fair value of your shares of Trover common stock, which will be paid to you following the merger if you seek an appraisal, may be more than, less than or the same as the $7.00 per share otherwise payable in the merger.

Recent Trading Prices of Trover Common Stock — See page        

The closing sale price per share of our common stock on the Nasdaq National Market on February 19, 2004, the last full trading day before Trover publicly announced it had entered into the merger agreement, was $7.00. On that day, the high and low sales prices per share of Trover common stock as reported on the Nasdaq National Market were $7.06 and $7.00 per share, respectively. The average closing sale price per share of Trover common stock was $7.02 during the one-week period preceding that announcement. On June        , 2004, the closing price per share of Trover common stock as reported on the Nasdaq National Market was $                .

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The closing sale price per share of our common stock on July 31, 2003, the last full trading day before we publicly announced the appointment of the special committee, was $5.80.

Stockholders should obtain a current market quotation for Trover common stock before making any decision with respect to the merger.

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QUESTIONS AND ANSWERS ABOUT
VOTING PROCEDURES AND RELATED MATTERS

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THE PARTICIPANTS

Parties to the Merger Agreement

Trover. Trover Solutions, Inc., a Delaware corporation, is an independent provider of outsourcing of subrogation recovery services and other recovery and cost containment services to the private healthcare payor industry and to the property and casualty insurance industry. Our primary business is medical claims recovery, and our primary product is subrogation recovery, which generally entails the identification, investigation and recovery of accident-related medical benefits incurred by our clients on behalf of their insureds, but for which other persons or entities have primary responsibility. Our other medical claims recovery services include the auditing of the bills of medical providers, the recovery of overpayments attributable to duplicate payments, failures to coordinate benefits and similar errors in payment and the auditing of physician evaluation and management claims for consistency with medical records. We offer our healthcare recovery services on a nationwide basis to health maintenance organizations, indemnity health insurers, self-funded employee health plans, companies that provide claims administration services to self-funded plans, Blue Cross and Blue Shield organizations and provider organized health plans. We also sell our proprietary recovery software in a browser-based application service provider form. The principal office address of Trover is 1600 Watterson Tower, Louisville, Kentucky 40218 and its telephone number is (502) 454-1340.

Our revenues and net income for the year ended December 31, 2003 were $65.7 million and $5.8 million, respectively, and our earnings for that period were $.66 per share on a fully diluted basis. Our revenues and net income for the fiscal quarter ended March 31, 2004 were $15.9 million and $1.5 million, respectively, and our earnings for that period were $.17 per share on a fully diluted basis. Of our total revenues for 2003 and the fiscal quarter ended March 31 2004, approximately $64.7 million and $15.6 million, respectively, were attributable to our healthcare recovery services segment and $1.0 million and $0.3 million, respectively, were attributable to our property and casualty recovery services segment (which we operate in a business unit called “TransPaC Solutions”). We had only negligible external revenues attributable to our software segment (which we operate in a business unit called “Troveris”). Our software and property and casualty recovery services activities are relatively new additions to our business. Our working capital (current assets less current liabilities) and stockholders’ equity at December 31, 2003 were approximately $13.0 million and $48.6 million, respectively; at March 31, 2004 these amounts were $14.5 million and $50.2 million, respectively.

Additional information concerning Trover’s business, operations, and financial condition is included elsewhere in this proxy statement, including at “Trover Selected Historical Financial Data” on page    . Information about Trover is also set forth in Trover’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and Quarterly Report Form 10-Q for the quarter ended March 31, 2004, each of which is incorporated by reference into this proxy statement. A copy of that Annual Report on Form 10-K and Quarterly Report on Form 10-Q is being mailed to each stockholder of record with this proxy statement. In addition, see “Where Stockholders Can Find More Information” on page    . Additional information with respect to Trover’s executive officers and directors is set forth in Appendix D.

Acquisition Corp. Acquisition Corp. is a Delaware corporation that was recently formed by Tailwind for the sole purpose of completing the merger with Trover. Acquisition Corp. is wholly owned by Parent and has not engaged in any business except in anticipation of the merger. The principal office address of Acquisition Corp. is c/o Tailwind Capital Partners LLC, 390 Park Avenue, 17^th Floor, New York, New York 10022 and its telephone number is (212) 271-3700. Additional information with respect to Acquisition Corp. and its executive officers and directors is set forth in Appendix D.

Parent. Parent is a Delaware corporation that was formed recently by Tailwind for the sole purpose of acquiring Trover. Parent has not engaged in any business except in anticipation of the merger. The stockholders of Parent following the merger will be Thomas Weisel Capital Partners, its co-investors and the Management Investors. The principal office address for Parent is c/o Tailwind Capital Partners LLC, 390 Park Avenue, 17^th Floor, New York, New York 10022 and its telephone number is (212) 271-3700. Additional information with respect to Parent and its executive officers and directors is set forth in Appendix D.

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Management Investors. The Management Investors are the members of our senior management who expect to purchase shares of Parent common stock and to hold options to acquire Parent common stock if the merger is consummated. The Management Investors are: Patrick B. McGinnis (our Chairman of the Board and Chief Executive Officer), Robert G. Bader, Jr. (our Executive Vice President—Healthcare Sales, Marketing & Corporate Client Solutions), Mark J. Bates (our Executive Vice President––Healthcare Recoveries Division, Overpayments), Robert L. Jefferson (our Senior Vice President—TransPaC Solutions), Debra M. Murphy (our Executive Vice President—Healthcare Recoveries Division, Subrogation) and Douglas R. Sharps (our Executive Vice President—Finance & Administration, Chief Financial Officer and Secretary). The principal office address of each of the Management Investors is 1600 Watterson Tower, Louisville, Kentucky 40218, and their telephone number is (502) 454-1340.

Thomas Weisel Capital Partners and Its Affiliated Co-investors. Thomas Weisel Capital Partners, L.P., a Delaware limited partnership, is a private investment fund with backing from leading institutional investors and a current portfolio of over 30 companies primarily focused in the growth sectors of the economy, including healthcare, technology and business services, and media and communications. The general partner of Thomas Weisel Capital Partners is Tailwind. The following affiliated entities are co-investors with Thomas Weisel Capital Partners: TWP CEO Founders’ Circle (QP), L.P., TWP CEO Founders’ Circle (AI), L.P., Thomas Weisel Partners Group LLC and Thomas Weisel Capital Partners Employee Fund, L.P. The principal office address of Thomas Weisel Capital Partners and each of its affiliated co-investors, except Thomas Weisel Partners Group LLC, is c/o Tailwind Capital Partners LLC, 390 Park Avenue, 17^th Floor, New York, New York 10022 and its telephone number is (212) 271-3700. The principal office address of Thomas Weisel Partners Group LLC is One Montgomery Street, Suite 3700, San Francisco, California 94104 and its telephone number is (415) 364-2500. Additional information with respect to Thomas Weisel Capital Partners and its affiliated co-investors is set forth in Appendix D.

Tailwind, Thomas Weisel Capital Management LLC and Thomas Weisel Partners Group LLC. Tailwind, a Delaware limited liability company, is the general partner of Thomas Weisel Capital Partners and in this capacity it is responsible for identifying, negotiating, structuring, acquiring, holding and disposing of the investments of, and otherwise managing, Thomas Weisel Capital Partners. The day-to-day business of Tailwind is managed by individuals who serve as its managing partners, with oversight by Thomas Weisel Capital Management LLC, a Delaware limited liability company, as managing member of Tailwind. Thomas Weisel Partners Group LLC, a Delaware limited liability company, is the managing member of Thomas Weisel Capital Management LLC and is a holding company that (directly and indirectly through subsidiaries or affiliated companies or both) is a privately held investment banking firm. The business and affairs of Thomas Weisel Partners Group LLC are managed by its executive committee. The principal office address of Tailwind and Thomas Weisel Capital Management LLC is 390 Park Avenue, 17^th Floor, New York, New York 10022 and their telephone number is (212) 271-3700. Additional information with respect to Tailwind, Thomas Weisel Capital Management LLC, Thomas Weisel Partners Group LLC, the managing partners of Tailwind, the board of managers of Thomas Weisel Capital Management LLC and the executive committee of Thomas Weisel Partners Group LLC is set forth in Appendix D.

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SPECIAL FACTORS

Background of the Merger

In the opinion of our board of directors, Trover’s public market valuation was constrained for at least the two years preceding our announcement of the appointment of the special committee on August 1, 2003 due to a number of factors including, but not limited to, Trover’s:

A similar set of considerations was reviewed by our board of directors in the summer of 1999. At that time, several members of our management team, including Mr. McGinnis, advised the board of directors that they wished to work with a private equity firm to develop a proposal to acquire Trover in a leveraged buy-out. The board of directors formed a special committee, which comprised all the independent directors serving at that time, to consider this proposal and to broadly explore possible ways of maximizing stockholder value. The committee engaged Donaldson, Lufkin & Jenrette Securities Corporation (“DLJ”), an investment banking firm, to advise it. At the request of the committee, DLJ reviewed possible strategic alternatives to maximize stockholder value. Among the alternatives reviewed were increasing financial flexibility, pursuing acquisitions or strategic combinations and consideration of a management-led “going private” transaction or leveraged recapitalization. After discussing the advantages and disadvantages of the strategic alternatives suggested by DLJ, the committee authorized DLJ to solicit potential buyers or merger partners for Trover. DLJ’s solicitation produced no offers that the committee considered worthy of pursuing and accordingly, in the spring of 2000, DLJ’s engagement was terminated and the board disbanded the committee.

After the conclusion of that process, we continued to conduct business generally in the ordinary course. Beginning in 2000, we sought to expand our business operations into areas that were new for us but nonetheless are related to our historic core business of healthcare recovery services. In particular, we began offering recovery services to the property and casualty insurance industry (through TransPaC Solutions), and we subsequently began marketing proprietary browser-based recovery software in an application service provider delivery model (through Troveris). We initiated this expansion with a view to leveraging our core competencies into areas that our management believes have significant growth potential. Our expansion also was defensive in part, in that we were seeking new growth opportunities in order to offset the projected limited growth (and possible decline) of our healthcare recovery services business. From 2002 to 2003, our revenues from the healthcare recovery services business declined by approximately $4.1 million, or approximately 6%.

On March 12, 1999, our board of directors authorized a $10.0 million stock repurchase plan. On May 10, 2002, the board authorized stock repurchases of an additional $10.0 million. Our board authorized the stock repurchases because (i) the company was generating positive cash flow not needed for reinvestment in the business and (ii) the low prices at which Trover’s stock was trading made it an attractive investment. Between the initiation of the stock repurchase plan and March 14, 2003, we repurchased 3,269,630 shares of our common stock for an aggregate

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purchase price of $14.5 million, an average purchase price of $4.43 per share. We suspended the stock repurchase program and did not repurchase any shares after March 14, 2003.

In April 2003, our management informed our board of directors that in late 2002 management had begun a preliminary evaluation of the feasibility of a leveraged buy-out of Trover by an ESOP and that management had retained legal and financial advisors to assist in that preliminary evaluation.

On June 17, 2003, Mr. McGinnis delivered to the other members of the board of directors a written non-binding indication of interest in pursuing a leveraged acquisition of Trover by an ESOP on terms that would result in a per share cash payment of $7.05 to Trover’s stockholders.

At a meeting of our board of directors held on June 20, 2003, Mr. McGinnis made a presentation based on the preliminary analysis that had been performed regarding the feasibility of a leveraged buy-out by an ESOP. He reviewed several reasons why management had begun to investigate a going-private transaction and why management continued to believe it might be desirable for Trover, including the following:

Mr. McGinnis then led a presentation, in which he was joined by a representative of the financial advisory firm that had been retained by management, regarding the tax and other attributes of a possible leveraged buy-out by an ESOP. According to Mr. McGinnis, the tax benefits associated with a leveraged ESOP structure would enable Trover to incur and service a higher amount of debt, which he believed could be applied to payment of a higher purchase price, than would be possible in a conventional leveraged buyout. Mr. McGinnis told the board that he and the other members of executive management were seeking the board’s approval to pursue a leveraged buy-out by an ESOP of the type described in his presentation.

In connection with his presentation, Mr. McGinnis provided the board with copies of materials that had been prepared by the financial consulting firm, which addressed the feasibility of an ESOP transaction. The materials included a valuation analysis, which suggested valuations for Trover based on a discounted cash flow analysis and on comparisons with “guideline” companies. The consultant’s discounted cash flow analysis suggested a low valuation of $4.29 per share, a median valuation of $6.69 per share and a high valuation of $8.01 per share. The guideline company analysis, which used CCC Information Services Group, Inc., Corvel Corp., Crawford & Co., HMS Holdings Corp., Insurance Management Solutions Group, Inc., Maximus, Inc. and PRG-Schultz International, Inc. as comparable publicly traded companies, suggested a per share value of $7.43. Neither the special committee nor the board relied on these valuations, and the entire feasibility study was not considered when the special committee and the board evaluated the fairness of the Tailwind proposal some seven months later because the feasibility study was based on materially outdated information, contained assumptions about, among other things, the availability of financing that had turned out to be incorrect and analyzed a transaction that differed substantially from the transaction proposed by Tailwind.

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Following Mr. McGinnis’ presentation, the board determined that it would be appropriate to appoint a special committee of independent directors that would be responsible for evaluating the ESOP proposal and any other transaction the special committee might decide to pursue, and voted to appoint a special committee comprised of all of the independent members of the board: William C. Ballard, Jill L. Force, John H. Newman, Lauren N. Patch, and Chris B. Van Arsdel. The board vested the special committee with the authority to review the strategic alternatives available to Trover, to take any and all actions it might deem appropriate with respect to the ESOP proposal and any proposal that might be made by any third party, including the authority to solicit alternative proposals and to negotiate the terms of any transactions it might choose to pursue, and to engage legal and financial advisors. No limitations were placed on the authority of the special committee in the areas within its mandate. The board also approved the payment of a fee of $10,000 to each member of the special committee, with an additional $5,000 for Ms. Force as chair, and a fee of $1,000 per meeting attended, for their service on the special committee (the compensation to Ms. Force was increased in December 2003 by an additional $25,000 to reflect the amount of time she had committed to the process described below). The fees payable to the special committee members are not contingent on completion of the merger.

Following the appointment of the special committee, Mr. McGinnis asked it to authorize management to further develop the ESOP buy-out proposal described in his presentation and to authorize funding by Trover of the expenses previously incurred and to be incurred in developing the proposal. The special committee told Mr. McGinnis it would respond after its financial advisor had the opportunity to analyze management’s proposal and its viability.

The special committee engaged Clifford Chance US LLP (“Clifford Chance”) to act as its legal counsel and, after interviewing and receiving presentations on their experience and expertise from financial advisors, subsequently engaged Houlihan Lokey to act as its financial advisor.

On July 14, 2003, the special committee held a meeting also attended by its legal and financial advisors. Houlihan Lokey advised the special committee that based on a preliminary analysis, while the ESOP buy-out proposed by management would require significant additional work before it could be consummated, the proposal in principle appeared capable of being implemented. Houlihan Lokey further advised, however, that management’s assertions to the effect that a higher value for Trover’s stockholders could be realized through an ESOP transaction than through any other transaction, would not necessarily prove to be correct. This was particularly so because management contemplated that substantially all of the funds needed to effect the ESOP buy-out would be borrowed, and there was a limit on the amount that any financial institution would be willing to lend for this purpose. It was likely that private equity firms and others would be willing to make substantial equity investments that, together with borrowings, could allow them to pay more than the proposed ESOP. After considering this advice, the special committee decided to authorize management to continue its exploration of a leveraged buy-out by an ESOP and to authorize funding of the expenses of that process, but the committee imposed a cap on the amount of expenses to be incurred and directed that by August 23, 2003, management should be prepared to produce a fully-developed definitive proposal with firm financing arrangements in place. The special committee briefly discussed other possible approaches to maximizing shareholder value, including a leveraged recapitalization or special dividend, but concluded that these approaches were not attractive. A leveraged recapitalization, for example, involving a significant stock repurchase, would make Trover’s public float and, probably, its trading volume, even lower than they already were, thereby rendering Trover’s remaining shares even less attractive as an investment. Similar considerations had prevailed in 1999 when the committee reviewed those possible alternatives. The special committee then directed Houlihan Lokey to begin a process of soliciting alternative proposals from other potentially interested parties, beginning with the preparation of an information memorandum.

On August 1, 2003, Trover issued a press release announcing that the special committee had been formed and was evaluating various strategic alternatives, including a possible sale of Trover. Following the public announcement, Houlihan Lokey held discussions with 84 parties it had identified as potential acquirers or that had contacted the special committee or Houlihan Lokey on their own initiative. After discussions with Houlihan Lokey, 39 parties entered into confidentiality agreements and were provided copies of the information memorandum.

On August 8, 2003, the special committee met to receive a briefing from Houlihan Lokey on the status of discussions with potential acquirers. Houlihan Lokey reported significant levels of interest and that it expected to receive preliminary indications of interest on September 3, 2003.

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On September 8, 2003, the special committee met to discuss the eighteen indications of interest that had been received by Houlihan Lokey. One of the indications of interest related to the leveraged ESOP transaction proposed by management. While this significant level of preliminary interest was encouraging, the special committee nonetheless was concerned that because Trover’s business is complex and subject to significant uncertainties, it was likely that a number of the parties that had provided indications of interest would withdraw from the process after they received access to detailed due diligence. Accordingly, the special committee selected an unusually large number of potential acquirors—eleven—to participate in the next round of the process. This group of eleven included the trustee for the proposed ESOP. In light of the size of this group, the special committee directed its advisors to organize an electronic data room, which could be simultaneously accessed by multiple parties, to allow the selected parties to review information about Trover as quickly and efficiently as possible.

Beginning September 24, 2003, the selected potential acquirers were provided access to the electronic data room and Houlihan Lokey conducted a series of informational sessions with each of these parties. During this same period, members of our management also met with and made informational presentations to the same selected potential acquirors.

On October 2, 2003, the special committee met to discuss and comment on the draft merger agreement prepared by its counsel and to receive an update from Houlihan Lokey regarding the discussions with prospective acquirors. On October 6, 2003, the draft merger agreement approved by the special committee was distributed to the selected prospective acquirors together with bid instructions directing the interested parties to deliver written bids, including the proposed price per share; a summary of the proposed financing and the status of that financing; a list of any material governmental, third party or internal consents required and the likelihood of satisfying that requirement; a summary of any additional information that would be required by that party and a revised draft of the merger agreement that the party would be prepared to enter into subject only to the conditions identified in the bid letter. The interested parties were requested to deliver their bids by October 17, 2003.

On October 17, 2003, Houlihan Lokey reported that of the eleven potential acquirors that had been invited to perform detailed due diligence and then submit a definitive acquisition proposal, only three had in fact submitted proposals. The three who had done so included Tailwind and the trustee for the proposed ESOP transaction. Houlihan Lokey advised the special committee that the other eight parties from the group of eleven each had declined to submit a proposal, citing a variety of reasons mostly relating to their negative perceptions of the business environment in which Trover operates and its effect on Trover’s business prospects. On October 23, 2003, a fourth party that was not among the group of eleven selected prospective acquirors (and therefore had not previously received access to the electronic data room) sent Houlihan Lokey a preliminary indication of interest in acquiring Trover.

On October 27, 2003, the special committee met with its legal and financial advisors to discuss the three acquisition proposals and indications of interest that had been received. The special committee compared the proposals on a number of bases, including the amount of consideration offered, whether the potential acquirer had access to or was likely to be able to arrange sufficient financing, the proposed contract terms, the costs and risks to Trover of proceeding with the proposed acquirer and the likelihood of signing a definitive agreement and consummating a transaction. The special committee rejected one proposal because it was the least attractive financially and because the party making the proposal seemed to have done only limited work and had declined to provide the contract mark-up requested of it (which led the special committee to conclude that the likelihood of consummating a transaction with that party was low). The special committee also decided not to pursue the proposed leveraged ESOP proposal because the special committee was advised by Houlihan Lokey that it was unlikely that sufficient debt financing could be arranged to support the per share price proposed in the bid, and because that price was substantially lower than the price proposed in the third bid received. The management team had explored the availability of debt financing with several prospective funding sources and had been unable to obtain definitive proposals for loans in the amounts that would be required, although it was prepared to continue to seek funding. The third bid, submitted by Tailwind, included the highest price from among the three proposals received, at $9.03 per share. In addition, Houlihan Lokey advised the special committee that Tailwind was a credible acquiror with a credible financing plan, although Tailwind’s funding sources would need to complete their due diligence on Trover. Therefore, the special committee decided to proceed to negotiate with Tailwind. The special committee discussed with its counsel the mark-up of the draft merger agreement that had been provided by Tailwind with its acquisition proposal. Following those discussions, the special committee directed its advisors to send Tailwind a revised draft

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merger agreement. In addition, the special committee called Mr. McGinnis to inform him that the special committee was not pursuing the ESOP bid. The special committee directed Mr. McGinnis to cooperate with the other bidders. The special committee decided that, particularly since Tailwind’s offer needed further work and potentially was subject to change, it would not negotiate on an exclusive basis with Tailwind, and directed its advisors to grant data room access to the party that had provided the indication of interest on October 23, 2003.

Between October 28 and November 10, 2003, Tailwind conducted onsite visits to our Louisville headquarters and held numerous meetings with Trover’s management team. Tailwind was afforded the opportunity to speak with several of Trover’s customers and to review additional diligence items that it had requested. During the course of these meetings, Mr. Karp and Mr. Raker of Tailwind met with Mr. McGinnis to review Trover’s management and employee base, to solicit Mr. McGinnis’ suggestions for continuing compensation programs after the merger transaction and to initiate discussions regarding the management team’s interest in continuing with Trover after the consummation of the merger. During the course of these discussions, Tailwind raised the prospect that certain management level employees could be offered the option to co-invest with Tailwind in the merger or to exchange their Trover stock options for Parent stock options, on terms that would be mutually agreed.

On October 29, 2003, Tailwind’s counsel, Kelley Drye & Warren LLP (“Kelley Drye”), met with Clifford Chance at Clifford Chance’s offices in New York to discuss the revised draft merger agreement. Clifford Chance expressed the special committee’s concerns about certainty of the proposed transaction being consummated while Kelley Drye emphasized its client’s concern about Trover’s ability under the form of agreement proposed by the special committee to terminate the transaction and pursue an alternative one. Subsequently, on November 3, Tailwind sent the special committee and its counsel a revised draft merger agreement.

On November 4, 2003, Kelley Drye and Clifford Chance held a conference call to discuss the representations and warranties to be given by Trover, Trover’s rights with respect to alternative proposals, and the termination provisions of the draft merger agreement.

On November 5, 2003, Trover issued a press release regarding its financial results for the period ended September 30, 2003. The release reported declines in earnings per share, revenues and net income from the corresponding three and nine-month periods one year earlier. We also announced a reduction from the guidance previously provided in August as to our probable earnings per share for the full 2003 fiscal year. In announcing our revised earnings outlook, we cited lower than expected revenues and the expenses associated with the exploration of strategic alternatives conducted by the special committee. Our announcement indicated that, even if this increase in expenses were excluded from the calculation, we expected our earnings per share to be at the bottom of the range we had forecasted in August.

On November 5, 2003, the special committee met with Clifford Chance and Houlihan Lokey. Houlihan Lokey distributed a preliminary summary fairness analysis. The material contained in Houlihan Lokey’s November 5, 2003 preliminary draft presentation was substantially similar to the material contained in the presentation provided to the special committee on February 9, 2004, which is described below under the caption “Opinion of Houlihan Lokey Howard & Zukin Financial Advisors, Inc.” The principal differences between the November 5, 2003 presentation and the February 9, 2004 presentation are as follows: (i) the earlier presentation described Tailwind’s price proposal at that time, which was $9.03 per share, while the later presentation described Tailwind’s reduced offer of $7.00 per share; (ii) the November 5 presentation reflected an implied valuation range per share of $6.83 to $8.01, as compared to the range of $6.36 to $6.97 reflected in the February 9 presentation; (iii) the later presentation was updated to reflect material developments since November 5, 2003, all financial information regarding Trover and the other companies referred to in the material was updated and the later presentation also summarized Houlihan Lokey’s explanation as to why various prospective acquirors had expressed pessimism about our business prospects and outlook; (iv) the later presentation material contained an explanation of the basis on which Houlihan Lokey selected the various multiples used in its analyses and (v) the November 5, 2003 materials included the names of the 18 prospective bidders who had provided indications of interest and the principal terms of those indications, and indicated which of those 18 parties had conducted detailed due diligence. Houlihan Lokey then discussed the information contained in the preliminary summary fairness analysis with the special committee. After hearing Houlihan Lokey’s presentation, the special committee discussed the valuation analyses and the prior negotiations regarding the proposed price.

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At the November 5 meeting, the special committee also reviewed the impact of a series of significant recent adverse developments in our business. These adverse developments included, among others, Trover’s most recent earnings announcement and an increasingly hostile climate for subrogation recovery because of legal developments in the jurisdiction of the Ninth Circuit Court of Appeals, which includes California and some other states in the western United States, regarding ERISA, the federal law which governs the healthcare coverage offered by most private employers.

The special committee recognized that those adverse developments might be obstacles to any sale of Trover. The special committee then re-examined the considerations that it considered relevant to the question of whether to seek to sell Trover, including (i) the lack of liquidity of the shares of Trover common stock due to the absence of an active trading market in the common stock and the lack of analyst coverage, (ii) the value to Trover stockholders of an opportunity to realize a substantial premium to the price at which the stock had been trading before the announcement of the appointment of the special committee (although after that announcement Trover’s shares traded at prices closer to, and occasionally above, $7.00 per share and the price payable in the merger does not represent a premium to the last reported sales price of our common stock on the day before the announcement of the transaction) on disposition of an otherwise relatively illiquid investment as compared to the loss of the opportunity to participate in any future growth potential of Trover, (iii) the persistent low trading price of shares of Trover common stock over the three-year period preceding the appointment of the special committee and (iv) the substantial ongoing expenses incurred by Trover as a public reporting company with obligations to file periodic reports with the Securities and Exchange Commission and to comply with recently enacted corporate governance and internal controls requirements. After that review, the special committee decided that even though the recent bad news would make it difficult to obtain an attractive price for Trover, nonetheless the process of seeking a buyer should continue because Trover’s prospects as a stand-alone public company remained relatively unattractive. After consultation with counsel, the special committee gave direction as to how to respond to Tailwind’s latest proposals for revisions to the draft merger agreement. Houlihan Lokey updated the special committee on the status of the auction process and advised that it was unlikely that the party that delivered the indication of interest on October 23 would make a definitive proposal, as that party had become convinced that it would not be able to evaluate Trover and arrange financing in time to allow the special committee to evaluate the party’s definitive proposal before the special committee was likely to have moved forward with other potential acquirors.

On November 7, 2003, the special committee’s comments on the draft merger agreement were provided to Tailwind’s counsel. Also, Tailwind began discussing employment arrangements with our management team and the terms on which members of management could participate in the ownership of Trover after the consummation of an acquisition. Throughout this period, Tailwind was holding discussions with prospective lenders about providing funding for its proposed purchase of Trover.

On November 25, 2003, Ms. Force held a conference call with Mr. Raker and Eric J. Haley of Tailwind, in which they were joined by representatives from Clifford Chance, Houlihan Lokey and Kelley Drye, to discuss the significant unresolved issues in the draft merger agreement. The conversation mainly focused on the representations and warranties to be given by Trover and the termination provisions of the draft merger agreement. Ms. Force emphasized that certainty of completion would be very important to the special committee. The parties also discussed the circumstances under which a break-up fee would be paid to Tailwind and/or its expenses would be reimbursed, and the amount of any such fee or expense reimbursement.

On November 26, 2003, Mr. McGinnis held a conference call with Mr. Karp and Mr. Raker of Tailwind to discuss the terms of management’s continuing employment after the merger and the compensation programs that would replace Trover’s equity-based compensation programs generally applicable to all employees. On December 3, 2003, Mr. Karp and Mr. Raker met with Mr. McGinnis at Tailwind’s office in New York City to engage in detailed discussions regarding employee compensation proposals and to hold more detailed discussions regarding the terms under which Mr. McGinnis would enter into an employment agreement with Parent. During the course of these discussions, Mr. McGinnis expressed his interest in having broad equity participation in Parent for the officers and employees of Trover.

By letter dated December 8, 2003, Uniprise (a division of UnitedHealth Group), a major client that previously had terminated a substantial portion of its subrogation contracts with us, notified us of the termination of most of its remaining subrogation contracts with us. The termination was effective February 1, 2004. We will, however,

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continue to make recoveries from, and earn fees on, recovery files previously referred to us by Uniprise, a process that we estimate will take 5 to 6 years to complete. We expect that the fees we will earn from this “run-off” business will decline significantly each year until the process is completed. Although we do not expect that this latest Uniprise termination will adversely affect our operating results for 2004, we anticipate that, together with other recent client terminations, it will materially impair our future financial results unless the terminated business is replaced by new business. More explanation is provided in our Annual Report on Form 10-K for the year ended December 31, 2003, at page 38.

On December 10, 2003, Houlihan Lokey received two unsolicited preliminary indications of interest from parties with whom it had not previously held substantive discussions. The following day, the special committee met to discuss these preliminary indications of interest as well as the status of the negotiations with Tailwind.

On December 12, 2003, management informed the special committee that it had completed its budgeting process for fiscal year 2004. The budget forecasted revenue for 2004 of $61.8 million, as compared to the $66.1 million in 2004 revenue projected in the August 2003 information memorandum that had been distributed to Tailwind and other prospective acquirors. Management also informed the special committee that a major health insurer, which management had identified to Tailwind as a potentially substantial source of new business, had declined to act at that time on a proposal we had made at its request to provide subrogation and coordination of benefit recovery services.

On December 26, 2003, the special committee met with its financial and legal advisors to discuss how to proceed with the Tailwind proposal and the two new parties that had provided preliminary indications of interest on December 10. Houlihan Lokey reported that Tailwind was having great difficulty in arranging financing for its proposed acquisition. Tailwind had approached a significant number of lending institutions, and all but one had declined to provide financing for the acquisition. The sole remaining funding source was willing to lend only in an amount significantly lower than originally had been expected, and on more expensive terms. Tailwind had asked Houlihan Lokey to advise the special committee that, in light of recent negative developments in our business, and the effect of those developments on the availability of debt financing, Tailwind was significantly reducing its proposed purchase price, to $6.75 per share. The special committee was very troubled by this development. The special committee, with the assistance of its financial advisor, analyzed the newly reduced proposed purchase price in light of our potential future financial performance and the value that might produce for our stockholders. The special committee recognized that management’s latest projections forecast significant improvement in our operating results in 2005 and 2006, and that if those forecasted results were achieved, the stockholders might realize significant value. At the same time, however, the special committee recognized there was significant uncertainty as to whether these forecasted improvements in financial performance would be achieved. The special committee decided that the business risks faced by Trover continued to make a sale of Trover appropriate, provided the sale could be achieved on acceptable terms. The special committee further decided to take steps to confirm that there were not other potential, credible acquirors who might be willing to pay more for Trover than Tailwind now proposed to pay, and to press for an improvement in Tailwind’s offer. To that end, the special committee directed Houlihan Lokey to re-contact parties that previously had expressed interest in acquiring Trover, to encourage them to make new proposals that might be better than Tailwind’s reduced offer. The special committee further directed Houlihan Lokey to arrange for the two parties who had contacted Houlihan Lokey on December 10 to conduct expedited due diligence, in order to determine their level of interest and specifically whether they might pay more than Tailwind now proposed. The special committee also directed Houlihan Lokey to tell Tailwind that its new proposal of $6.75 per share was unacceptable and to press Tailwind to improve its proposal. Finally, the special committee considered whether to ask management to re-visit its leveraged ESOP proposal, but decided not to do so after being advised by Houlihan Lokey that it was highly unlikely that, particularly given its previous inability to produce any credible financing proposals, the ESOP would be more successful than Tailwind (a sophisticated private equity firm with extensive contacts in the debt financing markets) in arranging debt financing for a buy-out, and since Tailwind’s proposal was supported by a significant contribution of equity capital that the ESOP would not be able to match, it was not realistically possible that a leveraged ESOP buy-out of the type originally proposed by management could produce a better price than even the reduced Tailwind offer price.

On January 8, 2004, representatives of Tailwind and Kelley Drye advised Mr. McGinnis that allowing broad employee participation as co-investors with Tailwind or allowing all employees to participate in the stock option exchange program, as Mr. McGinnis had suggested in his December 3, 2003 meeting, would require a registered

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offering under federal securities laws, and the time required to complete a registered offering would result in an unacceptable delay in completing the merger. However, they advised Mr. McGinnis that offering a limited number of management level employees the opportunity to co-invest and to exchange their Trover “in-the-money” stock options for equivalent Parent stock options would be acceptable. Subsequently, Mr. McGinnis presented to Tailwind his recommendation of those managers who should be offered the opportunity to co-invest with Tailwind and to exchange their Trover stock options for Parent stock options.

On January 12, 2004, Kelley Drye sent Clifford Chance a revised draft merger agreement. On the same day, Tailwind advised Houlihan Lokey that it was willing to offer $7.00 per share, but no more. The last reported sale price of our common stock on that day, as reported by the Nasdaq National Market, was $7.00.

On January 16, 2004, the special committee met with its advisors to discuss the status of the Tailwind negotiations. Tailwind’s most recent draft of the merger agreement had introduced for the first time the concept that Tailwind’s obligation to complete the merger would be conditioned on certain aspects of Tailwind’s debt financing commitment being satisfied and continued to insist that satisfactory employment arrangements remain in place with Mr. McGinnis. Tailwind also continued to insist on provisions that potentially could allow Tailwind to refuse to complete the merger based on breaches of representations and warranties the special committee did not consider to be material. Tailwind also continued to take an aggressive stance on the “deal protection” aspects of the merger agreement, including the amount of the termination fee and expense reimbursement and the circumstances under which they would be paid. On January 17, Clifford Chance sent Tailwind a revised draft merger agreement reflecting the special committee’s positions on these items. The special committee continued to insist on eliminating or reducing various conditions that would allow Tailwind to refuse to complete the merger and to reject a break-fee and expense reimbursement of the size requested by Tailwind and objected to many of the circumstances under which Tailwind requested that payments be made.

On January 28, 2004, Ms. Jill Force and Mr. John Newman from the special committee, and Messrs. Karp, Raker and Haley of Tailwind, together with representatives from Clifford Chance, Houlihan Lokey and Kelley Drye, held a meeting at the offices of Tailwind in New York to discuss outstanding issues in the draft merger agreement. The parties negotiated for the entire day. Tailwind agreed to drop several of its requested conditions to its obligations relating to, among other things, financing and employment arrangements, and agreed to modify its proposals regarding expense reimbursement and termination fees. On January 30, Tailwind circulated a revised draft merger agreement in response to the conversations held on January 28.

Also on January 28, 2004, Tailwind delivered to Mr. McGinnis a draft employment agreement. Between January 31 and February 11, 2004, the employment agreement terms were negotiated, including a commitment to extend the maturity date on Mr. McGinnis’ promissory note from January 1, 2005 to January 1, 2009, a commitment to adopt a stock option plan on terms agreed with Mr. McGinnis (as described under “Special Factors—Interests of Trover’s Directors and Executive Officers—Stock Option Plan”), and a commitment to maintain contribution levels to the employee long term savings, or 401(k), plan. The employment agreement and commitment letters were signed on February 19, 2004, at the time the merger agreement was signed.

On February 4, 2004, we announced our operating results for the year ended December 31, 2003. The net income and revenues we reported for 2003 were 15% lower and 5% lower, respectively, than our net income and revenues for 2002, although our stockholders’ equity and working capital (current assets less current liabilities) at December 31, 2003 were 12% higher and 48% higher, respectively, than at December 31, 2002. Although our total revenues, operating income, net income and earnings per share in 2003 were lower than in 2002, they were higher than the corresponding amounts in 2001 and 2000.

On February 9, 2004, the special committee met again with representatives of Clifford Chance and Houlihan Lokey to consider the Tailwind proposal. Several drafts of the merger agreement had been exchanged since the January 28 meeting and the contract issues were substantially resolved. Counsel provided a detailed presentation regarding the terms of the proposed merger agreement and the related documents and the few remaining open issues. Houlihan Lokey then reviewed with the special committee its financial analyses with respect to the proposed merger consideration based on a written presentation it had previously provided to the special committee. The written presentation included among other things a review of the process that had been pursued to solicit and negotiate acquisition proposals and the valuation methodologies described under “Special Factors—Opinion of Houlihan

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Lokey Howard & Zukin Financial Advisors, Inc.” Houlihan Lokey advised the special committee that nothing had come to its attention that would prevent it from rendering its opinion to the effect that (based upon and subject to customary matters that would be set forth in its written opinion) the consideration to be received by holders of Trover common stock pursuant to the merger agreement would be fair to such holders from a financial point of view. The special committee was told by Houlihan Lokey that the two parties who had expressed interest in acquiring Trover on December 10 had performed some due diligence but, despite being pressed by Houlihan Lokey, had declined to make specific proposals. None of the parties that previously had expressed interest had been willing when recently contacted by Houlihan Lokey to re-submit an acquisition proposal.

On February 11, 2004, Tailwind sent the special committee a revised draft merger agreement. There were only a few points of disagreement between the parties, including the date on which the merger agreement could be terminated and whether and to what extent Tailwind could sue Trover if Trover willfully or intentionally breached the merger agreement. Ms. Force agreed to discuss those points with Mr. Karp based on the input she received from the members of the special committee. Over the next several days, Ms. Force and Mr. Karp discussed the remaining points of disagreement between the parties.

On February 13, 2004, the special committee held a meeting to review the remaining open items in the merger agreement and to give Clifford Chance direction on how to resolve those points. Clifford Chance discussed the issues with Kelley Drye over the next few days. On February 17, Ms. Force, Mr. Raker, Houlihan Lokey, Clifford Chance and Kelley Drye held a conference call on which the remaining contract issues were resolved.

On February 19, 2004, the special committee met with representatives of Clifford Chance and Houlihan Lokey. It received an update on the resolution of the open items in the merger agreement, and expressed itself satisfied. Houlihan Lokey orally presented its opinion that as of that date, and subject to and based upon the matters to be set forth in its written opinion, which were described to the special committee in the meeting, the consideration to be received by holders of Trover common stock pursuant to the merger agreement was fair to such holders from a financial point of view. That opinion subsequently was confirmed in writing. The full text of the written opinion of Houlihan Lokey, dated February 19, 2004, which sets forth the assumptions made, matters considered and the limits on the review undertaken by Houlihan Lokey, is attached as Appendix B to this proxy statement. The full board of directors, comprising the members of the special committee and Mr. McGinnis, then held a special meeting in which it was joined by the special committee’s advisors. The special committee reported on the chronology of events and the processes and procedures it had followed since its formation. Counsel then made a detailed presentation to the board of directors regarding the terms of the merger agreement, including a summary of the representations, warranties, covenants, conditions, termination events and termination consequences, as well as the structure of the proposed transaction. Houlihan Lokey summarized its presentation to the special committee and confirmed its opinion that as of that date, and subject to and based upon the matters to be set forth in its written opinion, which were described to the board in the meeting, the consideration to be received by holders of Trover common stock pursuant to the merger agreement was fair to such holders from a financial point of view. The special committee then unanimously recommended to the board of directors that the board of directors adopt the merger agreement and summarized its reasons for recommendation. Following the recommendation, the board of directors unanimously approved the merger agreement, declared it advisable and recommended adoption of the merger agreement by the stockholders of Trover. The merger agreement was executed late in the afternoon of February 19, 2004, and was publicly announced on February 20, 2004, before the opening of trading of Trover’s common stock on the Nasdaq National Market.

On March 5, 2004, a private equity sponsor that had submitted an indication of interest in September 2003, which was then determined by the special committee to be less attractive than the other indications of interest received at that time, delivered a letter to Ms. Force reiterating its interest in acquiring Trover. The letter indicated that the party was willing to pay between $7.25 and $7.50 per share in cash for all outstanding shares of Trover common stock, based solely on publicly available information and the information provided to it in August and September 2003, and to pay the fees and reasonably documented expenses associated with the termination of the merger agreement. The party stated in its letter that it was willing to sign a merger agreement on the same terms as the merger agreement with Parent and Acquisition Corp., and that it believed it would be in a position to execute final agreements within two weeks after being given access to Trover’s management, books and records and facilities. The letter also said that the party would require debt financing and further due diligence review of Trover, but the party expressed confidence that it could arrange the necessary financing.

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On March 8, 2004, the special committee and its advisors met to discuss the proposal contained in the letter. Clifford Chance advised the special committee that under the merger agreement it could not engage in discussions or negotiations with the party or provide information to the party in respect of its proposal unless our board of directors has concluded that the proposal reasonably may be expected to lead to a “Superior Proposal” (as defined in the merger agreement). After further discussion, on March 10, 2004, the special committee concluded that it had insufficient information on which to base a conclusion that the proposal reflected in the letter may be expected to lead to a Superior Proposal, and Ms. Force sent the party a letter to that effect. In considering this indication of interest, the special committee focussed in particular on the fact that it was based on out-of-date information concerning Trover. One day after sending the letter, on March 11, 2004, Trover filed preliminary proxy materials with the SEC that contained updated information and described the deterioration in Trover’s business that had occurred since the party that sent the March 5, 2004 letter had last received information. Since that time, there has been no further contact with that party.

Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger

Recommendation of the Special Committee

The special committee of the board of directors has unanimously determined that the terms of the merger and the merger agreement are fair to, and in the best interests of, the stockholders of Trover. The special committee unanimously recommended to the board of directors that the merger agreement be adopted. The special committee considered a number of factors, as more fully described below under “Special Factors—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger—Factors Considered by the Special Committee,” in making its recommendation.

Recommendation of Trover’s Board of Directors

The board of directors, acting in part upon the recommendation of the special committee, unanimously determined that the merger agreement is advisable and that the terms of the merger and the merger agreement are fair to, and in the best interests of, Trover’s stockholders. The board of directors, based in part on the unanimous recommendation of the special committee, recommends that Trover’s stockholders vote “FOR” the adoption of the merger agreement.

Factors Considered by the Special Committee

In recommending adoption and approval of the merger agreement and the merger to the board of directors, the special committee considered a number of factors that it believed supported its recommendation that the transaction is substantively fair to Trover’s unaffiliated stockholders, including but not limited to the following:

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In recommending adoption of the merger agreement to the board of directors, the special committee considered a number of factors that it believed supported its determination of the procedural fairness of the process under which the merger agreement was negotiated and the procedural fairness of the transaction itself, including, but not limited to, the following:

The special committee also considered a variety of risks and other potentially negative factors in respect of the merger but determined that these factors were outweighed by the benefits of the factors supporting the merger. These negative factors included, but were not limited to, the following:

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In addition, Houlihan Lokey advised the special committee that although they believed the group of selected companies used in their fairness analyses was the most appropriate for this purpose, each of the selected companies was different from Trover in significant ways.

After considering these factors, the special committee concluded that the positive factors relating to the merger outweighed the negative factors. Because of the variety of factors considered, the special committee did not find it practicable to quantify the significance of or otherwise assign relative weights to the specific factors considered in reaching its determination, and it did not do so. The determination of the special committee was made after considering all of the factors together.

By reason of the special committee’s deliberations described above, the transaction was approved by a majority of our directors who are not employees of Trover.

The foregoing discussion is not intended to be exhaustive but is believed to include all material factors considered by the special committee.

Factors Considered by Trover’s Board of Directors

Trover’s board of directors consists of six directors, five of whom serve on the special committee. The sixth director, Mr. McGinnis, did not serve on the special committee because he was initially a proponent of the ESOP buy-out proposal that was presented to Trover’s board in June 2003 and he subsequently entered into a series of agreements with Parent and Tailwind regarding his participation in the buy-out provided for in the merger agreement. At a meeting of the board of directors held on February 19, 2004, the special committee, with its legal and financial advisors present, reported on the course of its negotiations with Tailwind, its review of the merger agreement and the factors it took into account in reaching its determination that the terms of the merger agreement, including merger consideration of $7.00 per share, are fair to and in the best interests of Trover and its stockholders. In view of the wide variety of factors considered in its evaluation of the merger, the board of directors did not find it practicable to quantify or otherwise assign relative weights to, and did not make specific assessments of, the specific factors considered in reaching its determination. Rather, the board of directors based its position on the totality of the information presented and considered, including Houlihan Lokey’s oral opinion, subsequently confirmed by its written opinion, dated February 19, 2004, that, based on and subject to the considerations, limitations, assumptions and qualifications set forth in the opinion, as of February 19, 2004, the $7.00 per share cash consideration that was to be received by Trover’s stockholders pursuant to the merger agreement was fair, from a financial point of view, to the holders of Trover’s common stock.

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The board of directors concluded that the merger, the merger agreement and the related transactions are substantively and procedurally fair to, and in the best interests of, the unaffiliated stockholders of Trover and adopted the conclusion and analyses of the special committee described above.

In reaching its conclusions, the board of directors considered it significant that:

After consideration of all the material factors, as described above, and based in part on the unanimous recommendation of the special committee, the board of directors recommends that the stockholders of Trover vote “FOR” the adoption of the merger agreement.

Position of the Tailwind Entities and the Management Investors as to the Fairness of the Merger

Under the rules of the Securities and Exchange Commission governing “going private” transactions, the Management Investors and the Tailwind Entities may be deemed affiliates of one another and of Trover and therefore required to express their beliefs as to the fairness of the merger to our unaffiliated stockholders. Each of the Management Investors and each of the Tailwind Entities believes that the merger is fair to the unaffiliated stockholders on the basis of the factors described below.

Position of the Management Investors as to the Fairness of the Merger

Although the Management Investors may have interests in the merger that are different from the interests of our unaffiliated stockholders, the Management Investors believe that the terms of the merger agreement and the proposed merger are substantively and procedurally fair to our unaffiliated stockholders, based on the facts and information available to the Management Investors.

The Management Investors did not receive any opinion, report or appraisal from an outside party that is materially related to the merger, except that Mr. McGinnis, in his capacity as a member of our board of directors, participated in the deliberations of our board described under “Special Factors—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger—Factors considered by Trover’s Board of Directors” and, for the reasons described in that section, joined the other members of our board of directors’ concluding that the merger is fair to our stockholders. Although the Management Investors did not participate in the deliberations of the special committee, the Management Investors have considered the same factors examined by the special committee described under “Special Factors—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger” and have adopted the conclusion, and the analysis underlying the conclusion, of the special committee’s determination of substantive and procedural fairness based upon (i) each Management Investor’s view as to the reasonableness of that analysis and (ii) the unanimous approval of the terms of the merger by a special committee consisting solely of directors who are not employees of Trover or affiliated with the Tailwind Entities,

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and by the board of directors. The Management Investors have formed this belief with respect to the substantive and procedural fairness of the merger even though no representatives, other than the special committee and its advisors, were retained to act solely on behalf of our unaffiliated stockholders. The Management Investors also believe that their participation in the stockholder vote on the merger will not cause the merger to be unfair to our unaffiliated public stockholders because of the measures taken by the special committee and our board of directors to ensure the procedural fairness of the merger transaction and because the Management Investors own a relatively small percentage of the shares of our common stock eligible to be voted on as the proposal to adopt the merger agreement (less than 2.5% as of the record date for determining stockholders eligible to vote on the merger agreement). The Management Investors did not consider purchase prices paid for our common stock in previous purchases by the Tailwind Entities because no such purchases were made during the previous two years. The Management Investors did not consider the purchase prices paid for our common stock by them or on their behalf during the past two years, even though some of those purchases were at prices above $7.00 per share, because those purchases were effected automatically through Trover’s 401(k) plan without any input on the purchase decision on the part of any of the Management Investors.

The Management Investors believe that the foregoing analyses and factors provide a reasonable basis upon which to form their respective beliefs that the merger is fair to our unaffiliated stockholders. This belief should not, however, be construed as a recommendation to our stockholders to adopt the merger agreement. The Management Investors do not make any recommendation as to how you should vote your shares. The Management Investors have not undertaken any formal evaluation of the fairness of the merger to our unaffiliated stockholders, nor have they assigned specific relative weights to the factors considered by them. The Management Investors are not experts in the valuation of businesses or in the fairness of merger transactions.

Position of the Tailwind Entities as to the Fairness of the Merger

The Tailwind Entities believe the merger is fair to our unaffiliated stockholders. None of the Tailwind Entities nor any of their affiliates has undertaken any formal evaluation of the fairness of the merger to our unaffiliated stockholders and none of them has received any opinion, report or appraisal from an outside party that is materially related to the merger. None of the Tailwind Entities participated in the deliberations of the special committee or the board of directors and none of them received advice from the special committee’s financial or legal advisors as to the fairness of the merger to our unaffiliated stockholders. Consequently, the Tailwind Entities are not in a position to expressly adopt the conclusions of the special committee with respect to the fairness of the merger to our unaffiliated stockholders. Nonetheless, based upon the Tailwind Entities’ knowledge and analysis of available information regarding us, as well as discussions with members of our senior management regarding the factors considered by, and findings of, the special committee and the board of directors discussed under “Special Factors—Recommendation of the Special Committee and the Board of Directors; Fairness of the Merger,” the Tailwind Entities believe that the merger is fair to our unaffiliated stockholders.

Because of the variety of factors considered, the Tailwind Entities did not find it practicable to make specific assessments of, quantify or otherwise assign relative weights to, the specific factors considered in reaching their determination of the substantive and procedural fairness of the merger to our unaffiliated stockholders. The determination of the Tailwind Entities that the merger is fair was made after consideration of all factors they determined to be relevant. In evaluating the substantive fairness of the merger, these factors include:

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The Tailwind Entities believe that the merger is procedurally fair to our unaffiliated stockholders primarily because of the measures taken by the our board of directors and the special committee to ensure the procedural fairness of the transaction. In particular, the Tailwind Entities observed the following:

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In evaluating the fairness of the merger to our unaffiliated stockholders, the Tailwind Entities did not consider net book value because they believe that net book value, which is an accounting concept, does not reflect, or have any meaningful impact on, the market trading prices for our common stock. The Tailwind Entities note, however, that the merger consideration of $7.00 per share is higher than our net book value per share at December 31, 2003 and March 31, 2004. The Tailwind Entities did not consider liquidation value in determining the fairness of the merger to our unaffiliated stockholders because Trover will continue to operate its businesses following completion of the merger and because of the Tailwind Entities’ belief that liquidation sales generally result in proceeds substantially less than sales of a going concern. The Tailwind Entities did not establish a pre-merger going concern value for our common stock as a public company to determine the fairness of the merger consideration to our unaffiliated stockholders. The Tailwind Entities did not consider our going concern value in determining the fairness of the merger because, following the merger, Trover will have a significantly different capital structure, which will result in different opportunities and risks for the business as a highly-leveraged private company. In evaluating the fairness of the merger to our unaffiliated shareholders, the Tailwind Entities did not rely on the detailed analyses provided by Houlihan Lokey to Trover’s board of directors, because they were not provided those analyses until after the merger agreement was signed and by that time there was no reason for the Tailwind Entities to devote attention to them. Also, while the Tailwind Entities reviewed the financial projections prepared by our management and described below in the next section of this proxy statement under “Forward Looking Information; Certain Projections,” and noted that these projections predict significant growth in our revenues, earnings and cash flow in 2005 and 2006, the Tailwind Entities did not attach much significance to these projections because of the uncertain economic and market conditions affecting us, our customers and our industry as a whole, as described above, and because a substantial amount of the growth is projected to come from new business lines that contributed only $1.0 million of our total 2003 revenues of $65.7 million.

The Tailwind Entities have formed this belief with respect to substantive and procedural fairness even though no representatives, other than the special committee and its advisors, were retained to act solely on behalf of our unaffiliated stockholders. The Tailwind Entities own no shares of Trover stock and therefore will not be entitled to vote on the merger. They believe that the participation of the Management Stockholders in the stockholder vote on the merger will not cause the merger to be unfair to our unaffiliated public stockholders because of the measures taken by the special committee and our board of directors to ensure the procedural fairness of the merger transaction and because the Management Investors own a relatively small percentage of the shares of our common stock eligible to be voted on the proposal to adopt the merger agreement (less than 2.5% as of the record date). The Tailwind Entities did not consider purchase prices paid for our common stock in previous purchases by the Tailwind Entities because no such purchases were made during the previous two years. The Tailwind Entities did not consider the purchase prices paid for Trover common stock by or on behalf of the Management Investors during the past two years, even though some of those purchases were at prices above $7.00 per share, because those purchases were effected automatically through Trover’s 401(k) plan without any input on the purchase decision on the part of any of the Management Investors.

None of the Tailwind Entities considered, as part of its fairness determination, whether or not the amounts of the special committee’s fees were reasonable. However, the Tailwind Entities concluded that the compensation to be received by the members of the special committee for their services would not adversely affect the procedural fairness of the transaction because the fees payable to them are not contingent on any particular outcome and because, by approving the transaction, the members of the special committee would be depriving themselves of the future benefits they otherwise would receive as continuing directors of a public company.

The Tailwind Entities believe that these analyses and factors provide a reasonable basis for their respective beliefs that the merger is fair to our unaffiliated stockholders. This belief should not, however, be construed as a recommendation to our stockholders to adopt the merger agreement. The Tailwind Entities do not make any recommendation as to how you should vote your shares.

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The Tailwind Entities have not made any provision in connection with the merger to grant our stockholders access to Trover’s corporate records, or to obtain counsel or appraisal services at their expense.

Forward Looking Information; Certain Projections

In connection with the process of soliciting indications of interest to acquire Trover, the special committee directed management to prepare projections of Trover’s financial performance for the three years ending December 31, 2006. Houlihan Lokey incorporated these projections in an information memorandum dated August 2003 which it prepared for distribution to persons expressing an interest in acquiring Trover. These initial projections were subsequently updated several times. The final update conformed the projections to our three-year business plan, which our management prepares annually as part of our ongoing business operations. Our board of directors approved our current business plan on December 12, 2003 (the “2004 Business Plan”), and it was then provided to Tailwind. No further business projections have been approved by our board since that date. The projections included in the 2004 Business Plan differ materially from the projections contained in the information memorandum distributed to prospective acquirors by Houlihan Lokey in August 2003. The principal differences between the August 2003 projections and the 2004 Business Plan projections are in the area of revenue growth from our three business units (healthcare recovery services, TransPaC and Troveris), and the impact of those altered revenue growth rates on net income. As summarized in the following table, the 2004 Business Plan projections contemplate significantly lower 2004, 2005 and 2006 revenues from healthcare recovery services, moderately lower revenues in each year from Troveris, and TransPaC revenues that are moderately higher in 2004 and substantially higher in 2005 and 2006. These revisions caused the 2004 Business Plan projections to show lower 2004 total revenues and net income for Trover as a whole, but higher total revenues and net income for 2005 and 2006, in each case as compared to the August 2003 projections.

Summary Comparison of August 2003 and 2004 Business Plan Projections

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The 2004 Business Plan was not prepared for the purpose of public disclosure but rather for use in business planning and management. The summary of the 2004 Business Plan that is presented below is being provided for the limited purpose of providing our stockholders with access to the financial projections that were considered by the special committee in reviewing the merger proposal and by Houlihan Lokey in rendering its opinion that, as of the date of its opinion, and subject to and based upon the matters set forth in its opinion, the consideration to be received by holders of Trover common stock pursuant to the merger agreement was fair to such holders from a financial point of view. The prospective financial information contained in the 2004 Business Plan was not prepared with a view toward compliance with the published guidelines of the Securities and Exchange Commission or the guidelines established by the American Institute of Certified Public Accountants for the preparation and presentation of prospective financial information. Neither PricewaterhouseCoopers, LLP (“PwC”), the Company’s independent auditors, nor any other third party has performed any procedures with regard to the 2004 Business Plan, and neither PwC nor any other third party has opined concerning or assumed responsibility for the 2004 Business Plan.

The projections contained in the 2004 Business Plan are or involve forward-looking statements and are based on a variety of assumptions regarding, among other matters, Trover’s ability to achieve strategic and financial goals, objectives and targets over the applicable periods. One such significant assumption of the 2004 Business Plan, for example, is the expectation of an annually increasing contribution to profitability by the Property and Casualty Recovery Services segment (sold under the brand TransPaC Solutions) and the Software segment (sold under the brand Troveris). The 2004 Business Plan projects that for the year 2006, 36.4% of total operating income will come from TransPaC Solutions and Troveris. Other material risks linked to the assumptions of the 2004 Business Plan include:

The 2004 Business Plan assumes a provision of $125,000 in respect of costs to be incurred by the special committee but does not reflect additional costs that will be incurred if we consummate the merger. Also, the 2004 Business Plan does reflect the cost savings that would be expected after we ceased to be a public company. Although management estimates these savings to be approximately $1.0 million annually, not all of that amount can be captured until 2006. The largest items of potential savings are the premiums for directors and officers liability insurance, audit fees, and legal fees and expenses.

Trover Solutions, Inc.
2004 Business Plan
Summary Financial Projections
Years Ended December 31, 2004, 2005 and 2006
(in thousands)

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Trover Solutions, Inc.
2004 Business Plan
Summary Financial Projections
Years Ended December 31, 2004, 2005 and 2006
(in thousands)

In light of the uncertainties inherent in projections of any kind, the inclusion of these projections in this proxy statement should not be regarded as a representation by Trover, the board of directors of Trover, the special committee, or any of their advisors, agents or representatives that these projections will prove to be correct. Many important factors, in addition to those discussed elsewhere in this proxy statement, could cause Trover’s financial results to differ materially from those expressed or implied by the forward-looking statements contained in the 2004 Business Plan, and our actual financial results for the periods presented inevitably will vary (and may vary substantially) from the projections presented above. Our actual financial performance for the periods presented could be substantially better or substantially worse than is reflected in the projections.

Opinion of Houlihan Lokey Howard & Zukin Financial Advisors, Inc.

On February 19, 2004, Houlihan Lokey rendered its opinion orally to the special committee and to our board of directors, and subsequently confirmed its opinion in writing to our board of directors, that as of such date, and based upon and subject to the matters set forth in its opinion, the consideration to be received by the holders of Trover

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common stock pursuant to the merger agreement was fair to such holders from a financial point of view. For purposes of the Houlihan Lokey opinion, the consideration to be received by the holders of Trover common stock pursuant to the merger agreement was defined as the $7.00 per share in cash that Parent will pay for the shares pursuant to the merger agreement. No instructions were given to Houlihan Lokey by the special committee regarding the preparation of its report. No limitations were imposed by the special committee on Houlihan Lokey in preparing its report. The merger consideration of $7.00 per share resulted from the process of negotiation between Tailwind and the special committee and not from a recommendation by Houlihan Lokey.

The full text of Houlihan Lokey’s opinion, dated February 19, 2004 is attached as Appendix B to this proxy statement and is incorporated in its entirety herein by reference. Stockholders should read such opinion in its entirety for a discussion of the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Houlihan Lokey in rendering its opinion. The following is a summary of the Houlihan Lokey opinion and the methodology that Houlihan Lokey used to render its opinion.

In arriving at its opinion, Houlihan Lokey:

In arriving at its opinion, Houlihan Lokey relied upon and assumed, without independent verification, that the financial forecasts and projections provided to it were reasonably prepared and reflected the best currently available estimates of the future financial results and condition of Trover and the good-faith judgment of our senior management, and that there had been no material change in the assets, financial condition, business or prospects of Trover since the date of the most recent financial statements made available to it. Houlihan Lokey expressed no opinion with respect to such forecasts and projections or the assumptions on which they were based.

Further, Houlihan Lokey did not independently verify the accuracy and completeness of the information supplied to it with respect to Trover and did not assume any responsibility with respect to such information. Houlihan Lokey neither reviewed our books and records nor made any physical inspection or independent appraisal of any of our properties or assets. In addition, Houlihan Lokey assumed that the merger would be consummated on the terms set forth in the merger agreement, without waiver or modification of any material terms. Houlihan Lokey’s opinion is necessarily based on business, economic, market and other conditions as they existed as of the date of the opinion. Subsequent events that could affect the conclusions set forth in the opinion include adverse changes to the business,

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financial conditions, results of operations of Trover and timely consummation of the merger. Although Houlihan Lokey continues to be retained as the financial advisor to our board of directors, Houlihan Lokey has not undertaken to update, revise or reaffirm its opinion.

Houlihan Lokey’s advisory services and opinion were provided for the use and benefit of Trover’s board of directors in connection with its consideration of the merger. Houlihan Lokey’s opinion does not constitute a recommendation to any stockholder of Trover as to how any such stockholder should vote on the merger. Moreover, Houlihan Lokey’s opinion does not address the relative merits of the merger or any other transactions or business strategies discussed as alternatives to the merger or the decision of our board of directors to proceed with the merger.

Houlihan Lokey’s opinion addresses only the fairness from a financial point of view to the holders of the common stock of Trover of the consideration to be received by such holders pursuant to the merger agreement, and does not express any views on any other terms of the merger agreement or Trover’s decision to effect the merger.

In connection with rendering its opinion, Houlihan Lokey performed certain financial, comparative and other analyses as summarized below. Houlihan Lokey noted that no company or transaction used in its analyses as a comparison is identical or substantially similar to Trover or to the contemplated merger. In arriving at its opinion, Houlihan Lokey did not ascribe a specific value to Trover, but rather made its determination as to the fairness to the holders of Trover common stock of the consideration to be received by such holders pursuant to the merger agreement from a financial point of view on the basis of certain financial and comparative analyses. An evaluation of the results of those analyses is not entirely mathematical. The preparation of an opinion such as this involves various determinations as to the most appropriate and relevant methods of financial and comparative analysis and the application of those methods to the particular circumstances. Therefore, such an opinion is not readily susceptible to partial analysis or summary description. Furthermore, in arriving at its opinion, Houlihan Lokey did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Houlihan Lokey believes that its analyses must be considered as a whole and that considering any portion of such analyses and factors, without considering all analyses and factors as a whole, could create a misleading or incomplete view of the process underlying its opinion. In its analyses, Houlihan Lokey made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Houlihan Lokey. None of Trover, Houlihan Lokey or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses were not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those set forth therein. In addition, analyses relating to the value of businesses do not purport to be appraisals or to reflect the prices at which businesses actually may be sold.

Houlihan Lokey’s opinion and financial analyses were only one of many factors considered by the board of directors in it evaluation of the proposed merger and should not be viewed as determinative of the views of the Trover board of directors or Trover’s management with respect to the merger or the merger consideration.

A copy of Houlihan Lokey’s written presentation to the special committee of Trover’s board of directors is an Exhibit to the Schedule 13E-3 filed in connection with the merger and is qualified in its entirety by reference to this Exhibit. See “Where Stockholders Can Find More Information.”

The following is a summary of the material financial analyses performed by Houlihan Lokey in connection with providing its opinion to the board of directors of Trover. Certain of the summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses performed by Houlihan Lokey, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Accordingly, the analyses listed in the tables and described below must be considered as a whole. Considering any portion of such analyses or factors, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying the Houlihan Lokey opinion.

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Stock Trading History

Houlihan Lokey analyzed the prices at which Trover’s common stock traded during the one-year period from February 18, 2003 through February 18, 2004, and for the three-year period from February 18, 2001 through February 18, 2004. Houlihan Lokey noted that Trover’s common stock traded at a price at or below $7.00 for the one-year period 77.6% of the time, and for the three-year period 97.1% of the time.

Houlihan Lokey also noted that the merger consideration of $7.00 per share represented a 20.7% premium above the last reported sale price of Trover common stock on the Nasdaq National Market on July 31, 2003, the day before our announcement that our board of directors had appointed the special committee to explore strategic alternatives. Following the announcement of the appointment of the special committee, the stock had traded at prices closer to, and occasionally above, $7.00 per share and the price payable in the merger did not represent a premium to the last reported sales price on the day before the announcement of the transaction, but this recent trading activity appeared to be the result of takeover speculation and therefore of limited relevance to a fairness analysis.

Market Multiple Methodology

In order to assess how the public market values shares of publicly traded companies similar to Trover, Houlihan Lokey employed a market multiple methodology, which involved reviewing for each of a selected group of similar companies, various multiples of historical and projected measures of revenues, earnings and cash flows. The multiples were calculated with respect to a group of nine publicly-traded companies which were selected by Houlihan Lokey on the basis of operational and economic similarities to the principal business operations of Trover. The companies selected by Houlihan Lokey were: Affiliated Computer Services, Inc.; Computer Sciences Corporation; Crawford & Company; Electronic Data Systems Corporation; HMS Holdings Corporation; MAXIMUS, Inc.; NCO Group, Inc.; PRG-Shultz International, Inc. and RTW, Inc. Multiples were calculated for these public companies based upon the last reported sales prices of the respective companies’ shares of common stock on February 18, 2004. A comparative risk analysis among Trover and the selected public companies formed the basis for the selection of risk adjusted multiples for Trover. The risk analysis incorporated both quantitative and qualitative risk factors for Trover and the selected public companies. This risk-based adjustment resulted in the selection of lower multiples for Trover than the mean and median multiples for the selected similar companies.

Using publicly available information and information for Trover provided by our management, Houlihan Lokey calculated and analyzed (i) the ratio (commonly referred to as price earnings, or P/E ratio) of each selected similar company’s stock prices to its latest twelve months (“LTM”) earnings per share and the projected earnings for its next fiscal year (“NFY”) and (ii) the ratio of each company’s enterprise value to certain historical and projected performance measures, including LTM and NFY revenue, LTM and NFY earnings before interest, taxes, depreciation and amortization (“EBITDA”) and LTM and NFY earnings before interest and taxes (“EBIT”). The enterprise value of each company was derived by adding its short and long-term debt to the sum of the market value of its fully-diluted common equity, the aggregate liquidation preference of any outstanding preferred stock, the book value of any minority interest and the value of any material debt-equivalent liabilities and subtracting any cash or cash equivalents.

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As the foregoing table reflects, the revenue, EBITDA, EBIT and P/E multiples implied by the proposed merger transaction are lower than all the corresponding mean and median multiples, and all but three of the low multiples, for the selected companies covered by this analysis. Application of the market multiple methodology using the risk-adjusted valuation multiples noted above resulted in an indicated enterprise value range for Trover of $46.8 to $53.5 million, as compared to the $56.2 million enterprise value implied by the terms of the merger.

The principal factors taken into account by Houlihan Lokey in reaching its conclusion that it was appropriate to apply lower multiples in its valuation of Trover than the corresponding multiples reflected in the trading prices of the selected public companies related to our recent and projected future growth rates, including the following considerations:

     • Trover’s recent growth rates were significantly lower than those of the selected companies. For example, from 1999 though the most recent twelve-month period proceeding Houlihan Lokey’s analysis, Trover’s EBITDA increased by 5.2%, while the EBITDA of the selected companies increased by an average of 20.6%.

     • Projections prepared by Trover’s management and reflected in Trover’s 2004 business plan reflect forecasted declines of 6.0% in revenues and 1.7% in net income from the comparable amounts in 2003, while the consensus forecasts of securities analysts in respect of the selected companies are for median year-over-year increases in revenues and net income from 2003 to 2004 of 11.2% and 14.3%, respectively.

     • Trover’s healthcare subrogation, provider bill audit and overpayments services, which have been its core offerings to date, have been adversely affected by customer defections and price competition, and so are unlikely to grow significantly for the foreseeable future (a similar conclusion is reflected in Trover’s 2004 business plan, which projects that revenues for this business unit will decline by 9.7% from 2003 to 2004 before growing by 3.0% and 5.7% in 2005 and 2006).

     • The growth in earnings and cash flow projected by Trover’s management in the 2004 business plan to begin in 2005 is almost entirely attributable to its TransPaC business unit, which is projected by management to account for almost 29% of total operating income in 2006 but in 2003 accounted for just $1.0 million out of our total revenues of $65.7 million.

Since it is generally accepted that the earnings and cash flow multiples reflected in a public company’s stock price are closely correlated to market expectations regarding future growth rates and the perceived level of risk that the company will fail to achieve projected future growth rates, Houlihan Lokey concluded that the factors enumerated above (recent slow or negative growth, projected to continue through 2004, with future growth prospects tied

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significantly to unproven new business segments), which generally were not applicable to the selected companies used in the analysis, made it appropriate to use lower multiples than the multiples implicit in the recent share prices of the selected companies.

Houlihan Lokey also identified additional factors that differentiated Trover from the selected companies and that also made use of lower multiples appropriate, including:

Selected Transaction Methodology

Houlihan Lokey identified five change-of-control transactions it deemed similar in certain respects to the merger, as follows:

Like the market multiple methodology, the selected transaction methodology used by Houlihan Lokey involved consideration of multiples of revenues, EBITDA and EBIT.

Houlihan Lokey considered the enterprise values implied by the terms of the five selected transactions as multiples of revenue, EBITDA and EBIT, calculated in each case for the 12 months preceding the transaction date. Houlihan Lokey compared these results to the comparable multiples implied by the terms of the merger.

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As the foregoing table reflects, the revenue, EBITDA and EBIT multiples implied by the proposed merger transaction are lower than all the corresponding mean and median multiples for the selected transactions covered by this analysis. Application of the selected transaction methodology using the range of multiples indicated in the second to last line of the table above resulted in an indicated enterprise value range for Trover of $51.5 to $57.3 million, as compared to the $56.2 million enterprise value implied by the terms of the merger.

The factors taken into account by Houlihan Lokey in reaching a determination to apply lower multiples than the mean and median multiples implied by the selected transaction were substantially similar to those described above that were applied in the analysis of the trading prices of selected public companies.

Discounted Cash Flow Methodology

Houlihan Lokey performed a discounted cash flow analysis in respect of the financial projections prepared by our management for 2004 through 2006. For the purpose of its analysis, Houlihan Lokey noted that from fiscal year 2004 to fiscal year 2006, EBITDA is projected by our management to increase from $13.6 million to $21.6 million, reflecting a 59% increase in two years, and noted further that such projections are heavily dependent on significant increases in new or unproven business lines and on adding a meaningful number of lives to Trover’s existing core business.

Houlihan Lokey discounted to present value the projected stream of unlevered net cash flows (earnings before interest and after taxes) for the fiscal years 2004 through 2006 as adjusted for: (1) certain projected non-cash items (such as depreciation and amortization); (2) capital expenditures; and (3) investments in working capital. To estimate the residual value of Trover at the end of the forecast period, or terminal value, Houlihan Lokey applied a range of 2.5% to 3.5% perpetuity (terminal) growth rates to projected fiscal 2007 free cash flow. In performing its analysis, Houlihan Lokey employed after-tax discount rates of 18.5% to 19.5% (which are substantially higher than the discount rates of the selected similar companies considered in the market multiple analysis and therefore resulted in a lower valuation for Trover), which reflect its estimate of Trover’s weighted average cost of capital, taking into account its evaluation of the risks inherent in an investment in Trover.

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The analysis produced an indicated enterprise value range of $51.5 to $58.1 million, as compared to the $56.2 million enterprise value implied by the terms of the merger.

Miscellaneous

Houlihan Lokey is a nationally recognized investment banking firm that is continually engaged in providing financial advisory services in connection with mergers and acquisitions, leveraged buyouts, business valuations for a variety of regulatory and planning purposes, recapitalizations, financial restructuring and private placements of debt and equity securities. Houlihan Lokey has no prior relationship with Trover or its affiliates. We have agreed to pay Houlihan Lokey a fee of $1,180,000 for its services and to reimburse certain of its expenses incurred in connection with its engagement. A substantial portion of that fee ($1,030,000) is contingent on completion of the merger. The balance has been paid. In addition, Trover has agreed to indemnify Houlihan Lokey and related persons for certain liabilities that may arise out of its engagement by Trover. Houlihan Lokey and its affiliate were retained by the special committee to perform advisory and other services in connection with the special committee’s consideration of the various strategic alternative available to Trover. The special committee selected Houlihan Lokey based on its experience, expertise and reputation.

In the course of trading activities of Houlihan Lokey affiliates, Houlihan Lokey may from time to time have long or short positions in and buy or sell debt or equity securities or options on the securities of Trover and other companies that are or may be the subject of the engagement of Houlihan Lokey in connection with the merger. Houlihan Lokey did not have any such position in the securities of Trover or such other companies as of the date of its engagement by Trover in connection with the merger.

Purpose and Structure of the Merger

Trover

For Trover, the purpose of the merger is to allow Trover’s stockholders to receive cash for their shares at a price that represents a substantial premium over the market prices at which the common stock traded before Trover announced the formation of the special committee (although after that announcement our stock traded at prices closer to, and occasionally above, $7.00 and the price payable in the merger did not represent a premium to the last reported sales price on the day before the announcement of the transaction) and in a transaction that allows all stockholders to obtain this price notwithstanding the limited public float and low trading volume of the Trover common stock. We determined to undertake the merger at this time based on the conclusions and reasons of the special committee and our board of directors described above under “Special Factors—Recommendation of the Special Committee and of the Board of Directors; Fairness of the Merger.” The transaction has been structured as a merger of Acquisition Corp. into Trover in order to preserve Trover’s identity, goodwill and existing contractual arrangements with third parties.

The Tailwind Entities

The purpose for the Tailwind Entities of engaging in the merger is to enable Thomas Weisel Capital Partners and its affiliated co-investors to make an investment in, and to obtain a controlling interest in, Trover in an orderly fashion. The Tailwind Entities believe that Trover will benefit financially and operationally by eliminating the costs and regulatory burdens imposed on Trover as a public company by the Securities and Exchange Commission and the Nasdaq National Market. The Tailwind Entities believe that Trover will have greater operating flexibility to focus on its long-term value by emphasizing growth and operating cash flow without the constraint of the short-term, quarter-to-quarter performance often emphasized by the public markets. The Tailwind Entities’ assessment of the risks and benefits of the merger is based upon publicly available information regarding Trover, Tailwind’s due diligence investigation of Trover and Tailwind’s business and investment experience. Although the Tailwind Entities believe that there will be significant opportunities associated with their investment in Trover, there are also substantial risks that these opportunities may not be fully realized. Because Tailwind contemplates that existing management, including the Management Investors, will continue to operate Trover’s business following the merger, it is important to the Tailwind Entities that the Management Investors and certain of our other management-level employees have an ownership interest in Parent following completion of the merger. The Tailwind Entities structured the transaction with the intent that (a) the Management Investors would have the option to invest the

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proceeds from the sale of their Trover shares in Parent and (b) the Management Investors and certain other management-level employees would be offered the option of exchanging all or a portion of their in-the-money Trover options to acquire Parent common stock. The Tailwind Entities undertook the transaction at this time after being approached by Houlihan Lokey on behalf of the special committee as described under “Special Factors—Background of the Merger.”

Management Investors

The Management Investors expect to acquire shares of common stock of Parent (which will be the sole stockholder of Trover upon completion of the merger) in order to retain an equity interest in Trover. The Management Investors believe that as a private company, Trover will have greater operating flexibility to focus on enhancing value by emphasizing growth and operating cash flow without the constraint of the public market’s emphasis on quarterly earnings and without the costs of being a publicly traded company.

While the Management Investors believe that there will be significant opportunities associated with their continued equity ownership interest through Parent, there are also substantial risks that these opportunities may not be realized, which could cause a loss of some or all of their investment. These risks include, among others:

Each of these risks is tempered by the fact that a portion of the Management Investors’ investment in Trover will be cashed out as a result of the merger, although the Management Investors may elect to reinvest all of their proceeds from their investment in Trover in Parent, and thus retain an interest in Trover.

Effects of the Merger

Upon consummation of the merger, Trover will be wholly owned by Parent. The current stockholders of Trover will cease to have ownership interests in Trover or rights as Trover stockholders. The stockholders of Trover will be entitled to receive $7.00 in cash for each share of Trover common stock that they own. As a result of the merger, each share of Acquisition Corp. common stock outstanding immediately prior to the effective time of the merger will be converted into one share of common stock of Trover as the surviving corporation.

As a privately held corporation following the merger, there will be no public market for Trover common stock. After the merger, shares of Trover common stock will cease to be quoted on the Nasdaq National Market, and the registration of Trover’s common stock under the Exchange Act will be terminated. This termination will make most provisions of the Exchange Act, including the requirement to file periodic reports, the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy or information statement in connection with stockholders’ meetings and the new corporate governance requirements under the Sarbanes-Oxley Act of 2002 no longer applicable to Trover.

At the effective time of the merger:

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It is expected that, upon consummation of the merger, the operations of Trover will be conducted substantially as they currently are being conducted, except that Trover will not be subject to the periodic reporting and other obligations and constraints, and the related direct and indirect costs and personnel requirements, associated with being a public company. Tailwind has advised Trover that it does not have any present plans or proposals that relate to or would result in an extraordinary corporate transaction following completion of the merger involving Trover’s corporate structure, business or management, such as a merger, reorganization, liquidation, relocation of any operations or sale or transfer of a material amount of assets. We expect, however, that following the merger, Trover’s management and new controlling stockholder will continuously evaluate Trover’s business and operations and may develop new plans and proposals that they consider appropriate to maximize the value of Trover.

A benefit of the merger to the Tailwind Entities, the Management Investors and members of management who acquire an equity interest in Parent after the merger is that our future earnings and growth will be solely for their benefit and not for the benefit of our current stockholders. The detriments to the Tailwind Entities and the Management Investors and members of management who acquire an equity interest in Parent after the merger are the lack of liquidity for Parent’s common stock following the merger, the payment of approximately $63.4 million to fund the merger, the payment by them of approximately $2.5 million in estimated fees and expenses related to the merger and the payment by us of approximately $3.5 million in estimated fees and expenses related to the merger.

As described elsewhere in this proxy statement under “Interests of Trover’s Directors and Executive Officers,” the Management Investors will receive benefits in connection with the merger to which they would not otherwise have been entitled. These incremental benefits include a four-year extension of the maturity of a loan with an outstanding balance at April 30, 2004 of $1,009,435 that presently is repayable by Mr. McGinnis to Trover on January 1, 2005 and that Trover would not be legally permitted to extend if it remained a public company, and the opportunities that are being offered to the Management Investors to “roll-over” their in-the-money Trover stock options on a tax-deferred basis and to co-invest in Parent.

The benefit of the merger to our stockholders is the right to receive $7.00 per share for their shares of common stock. The detriments are that our stockholders will cease to participate in our future earnings and growth, if any, and that the receipt of the payment for their shares will be a taxable transaction for Federal income tax purposes. See “Material U.S. Federal Income Tax Consequences.”

Changes to Occur in the Merger in Transaction Participants’ Interests in Trover’s Net Book Value and Net Earnings.

At the date of this proxy statement, the Tailwind Entities hold no shares of Trover common stock and no other equity interest in Trover and accordingly their aggregate ownership interest in Trover’s net book value and net earnings is zero. Upon completion of the merger, the Tailwind Entities together will own the entire equity interest in Trover except only for the equity interests to be acquired by the Management Investors and other co-investors.

Upon completion of the merger, our unaffiliated stockholders will no longer hold any equity interest in Trover and therefore will no longer own any interest in its net book value or net earnings.

The following table sets forth for each Management Investor, (i) the Management Investor’s interest in the stockholders’ equity (net book value) of Trover at December 31, 2003, calculated to give pro forma effect to the exercise of all stock options (vested and unvested) that were outstanding on April 30, 2004 and that have an exercise price of less than $7.00 per share; (ii) the Management Investor’s interest in the net income of Trover for the year ended December 31, 2003, calculated on the basis of shares owned and outstanding at March 31, 2004; (iii) the percentage interest expected to be held by the Management Investor in the equity (and accordingly in the book value and net income) of Parent (which will be the sole stockholder of Trover), without giving effect to option ownership, immediately following the merger.

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Pro Forma Changes in Management Investors’ Interests in the Merger
(amounts in thousands)

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Financing of the Merger

Parent has represented in the merger agreement that it has access to sufficient funds to consummate the merger and make the requisite payments to Trover’s stockholders and option holders and has committed to provide those funds subject to the terms of the merger agreement. We estimate that approximately $66.0 million will be required to pay the merger consideration that will be due to our stockholders and option holders under the merger agreement and to pay the related fees and expenses of Parent and Acquisition Corp. Tailwind has advised us that it expects this amount to be funded through a combination of equity contributions by Thomas Weisel Capital Partners, its co-investors and the Management Investors, new credit facilities to be provided by an institutional lender and Trover’s available cash reserves. Tailwind has received a financing commitment from CapitalSource Finance LLC for $27.5 million of senior secured credit facilities, and it intends to apply approximately $25 million under those facilities to the merger funding requirements. The obligations of Parent and Acquisition Corp. to complete the merger are not subject to a financing condition, and Thomas Weisel Capital Partners has agreed to provide sufficient funds to consummate the merger, whether or not the new credit facilities are obtained, subject to the conditions set forth in the merger agreement. We have been advised by Tailwind that it has not sought to arrange an alternative source of debt financing and that if for any reason the credit facilities described below were not available to Tailwind, it would seek an alternative financing source or use its own capital to replace the funds it plans to borrow under those facilities.

The estimated sources and uses of funds in connection with the merger and related transactions are as follows (assuming the merger is completed on June 30, 2004):

Sources and Uses of Funds
($ in millions (all figures are approximate))

The foregoing table was prepared based on the assumption that none of our employees who are offered the right to exchange their “in-the-money” Trover stock options for options to acquire Parent common stock will exercise that

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right, since this assumption maximizes the amount of cash financing that the Tailwind Entities will have to obtain to complete the merger. However, we expect that “in-the-money” options to acquire approximately 850,000 shares of our common stock will be exchanged for Parent stock options in connection with the merger and Parent will not have to pay the cash value of these options as part of the merger consideration. We estimate the cash value of these “roll over” stock options to be approximately $3.0 million and, accordingly, we expect that the cash merger consideration will be reduced by approximately $3.0 million and the amount of the equity contributions made by the Tailwind Entities in Parent will be reduced by a corresponding amount.

Equity Contributions

In connection with the merger, Thomas Weisel Capital Partners and its co-investors intend to contribute approximately $35.5 million in cash to Parent in exchange for Parent common stock, as follows: (i) Thomas Weisel Capital Partners and its affiliated co-investors, $32.1 million collectively, (ii) Edward J. McKinley, Rodman Moorhead and CS Equity LLC (an affiliate of CapitalSource Finance), $2.3 million collectively, and (iii) the Management Investors, $1.1 million collectively. In addition to the shares of Parent common stock described in the previous sentence, the Management Investors and certain of our other management level employees will exchange all or a portion of their in-the-money options to acquire our common stock for options to acquire Parent common stock, and they will receive additional options to acquire Parent common stock following the merger.

Credit Facilities

CapitalSource has issued a loan commitment whereby CapitalSource has committed to make loans to Trover consisting of a $5.0 million revolving credit facility, a $14.0 million Term A loan facility and a $8.5 million Term B loan facility, upon the terms and conditions set forth in the commitment letter.

The revolving credit facility and the Term A facility will initially bear interest at a rate per annum equal to the greater of (a) the prime rate as in effect from time to time plus 4.0% or (b) 8.0%. The Term B facility will initially bear interest at a rate per annum equal to the greater of (i) the prime rate as in effect from time to time plus 6.0% or (ii) 10.0%. The credit facility will be secured by liens on substantially all of Trover’s assets and on the Trover common stock owned by Parent.

The revolving credit facility and the Term B facility will mature on the fifth anniversary of the closing date of the merger. The Term A facility will mature on the fourth anniversary of the closing date of the merger. The Term A facility and the Term B facility will amortize in scheduled monthly installments commencing October 1, 2004. The revolving credit facility, the Term A facility and the Term B facility will be subject to mandatory prepayments under agreed circumstances. Amounts repaid on the revolving credit facility prior to maturity may be reborrowed. Amounts repaid on the Term A facility and the Term B facility may not be reborrowed.

The Term A facility and the Term B facility will be used to finance the merger and to pay fees and expenses associated with the merger. Up to $2.5 million of the revolving credit facility may be used to finance the merger and to pay fees and expenses associated with the merger, and the remainder will be used to finance the working capital and general corporate needs of Trover.

Funding of these credit facilities will be subject to the following material conditions:

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Tailwind does not currently have any plan or arrangement to refinance or repay these senior credit facilities prior to their maturity dates.

Risks that the Merger Will Not Be Completed

Completion of the merger is subject to a number of significant risks, including, but not limited to, the risk that before the closing provided for in the merger agreement:

As a result of various risks to the completion of the merger, there can be no assurance that the merger will be completed even if the requisite approval of Trover’s stockholders is obtained. It is expected that, if our stockholders do not adopt the merger agreement or if the merger is not completed for any other reason, Trover, under the

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direction of the board of directors, will continue to operate its businesses as a public company. If the merger is not completed, depending on the reasons the merger was not completed Trover may be required to reimburse certain expenses of Parent and, possibly, to make additional payments to Parent and Acquisition Corp. Trover and Parent may each be held liable to the other for willful or intentional breaches of the merger agreement, but the liability of each for any such breach may not exceed $10.0 million as to Trover and $5.0 million as to Parent. See “Estimated Fees and Expenses of the Merger.”

Interests of Trover’s Directors and Executive Officers

The Special Committee

The special committee consists solely of independent directors who are not (and have not been in the past) officers or employees of or consultants to Trover or the Tailwind Entities. Each member of the special committee is entitled to be reimbursed for all expenses incurred in connection with their service on the committee, and each member other than Jill L. Force has been or will be paid, in consideration of their service on the special committee, an initial fee of $10,000 plus $1,000 for each meeting attended. Ms. Force, who serves as chair of the special committee, has been paid an aggregate of $40,000 plus $1,000 per meeting for her service in that position. We anticipate that each member of the special committee will receive approximately $20,000 in per meeting fees. The fees payable to the special committee members are not contingent on completion of the merger.

None of the members of the special committee will have a continuing role, as a director or otherwise, with Trover following the merger.

Each of the members of the special committee holds shares of Trover common stock and options to acquire shares of Trover common stock. Details of those holdings, and of the amount each special committee member will receive for those holdings on completion of the merger, are provided below under “Merger Consideration to be Received by Directors and Executive Officers of Trover.” Options held by special committee members that are not otherwise fully exercisable will be treated as fully vested in the merger, in the same way as all other outstanding stock options.

Mr. McGinnis

Effective January 1, 2003, Trover entered into an employment agreement (the “2003 employment agreement”) with Mr. McGinnis, replacing his prior employment agreement with Trover originally entered into by Mr. McGinnis in May 1997. Pursuant to the 2003 employment agreement, Mr. McGinnis serves as our Chairman and Chief Executive Officer. The 2003 employment agreement has an initial term of three years and renews automatically for subsequent two-year periods, unless a notice of termination is delivered by either party at least sixty days prior to the end of the initial term or the end of a renewal term.

Under the terms of the 2003 employment agreement, Mr. McGinnis was entitled to a minimum base salary for calendar 2003 of $325,000, subject to annual percentage increases for inflation equivalent to those increases given in the normal course of business to our employees on substantially a company-wide basis. In addition, the 2003 employment agreement entitles Mr. McGinnis to participate in our Management Group Incentive Compensation Plan, to receive such awards of stock options as determined by our Compensation and Nominating Committee and to receive such fringe benefits as we may provide from time to time to our executive employees, including group health insurance, life insurance, and disability insurance. Further, Mr. McGinnis received a bonus of $200,000 in conjunction with signing the 2003 employment agreement. The bonus is subject to reimbursement by Mr. McGinnis to Trover if Mr. McGinnis terminates his employment with Trover during the initial three-year term of his employment as follows: (i) if such termination occurs on or after January 1, 2004 but prior to January 1, 2005, Mr. McGinnis is required to reimburse $133,334 to Trover; and (ii) if such termination occurs on or after January 1, 2005 but prior to January 1, 2006, Mr. McGinnis is required to reimburse $66,667 to Trover.

We may terminate the 2003 employment agreement and all of our obligations thereunder if Mr. McGinnis (i) materially breaches any term of the agreement and fails to cure such breach within ten days after written notice of such breach from the Board (no cure period is permitted for breaches of certain confidentiality and noncompete provisions contained in the employment agreement in favor of Trover), (ii) commits any other act in bad faith

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materially detrimental to the business or reputation of Trover, or (iii) engages in illegal activities or is convicted of any felony involving fraud, deceit, or moral turpitude. Trover’s obligations under the 2003 employment agreement to pay salary, provide for the continued vesting of stock option awards, and provide for health insurance benefits continue for the greater of the remainder of the renewal term or two years if we terminate the agreement for any reason other than (i)-(iii) above, or if Mr. McGinnis terminates the agreement for one of the following reasons (i) Trover materially breaches any term of the employment agreement and fails to cure such breach within ten days after written notice of such breach from Mr. McGinnis, (ii) Trover assigns Mr. McGinnis duties, or significantly reduces his assigned duties, in a manner inconsistent with his position with Trover (without his consent), (iii) Trover requires Mr. McGinnis’s relocation outside of the metropolitan Louisville, Kentucky area (without his consent), (iv) Trover fails to obtain the assumption of the 2003 employment agreement by any successors to Trover, (v) Mr. McGinnis dies or becomes mentally or physically incapacitated or disabled so as to be materially unable to perform his duties under his employment agreement or (vi) a Change in Control Event (as defined in the 2003 employment agreement) occurs, and Mr. McGinnis’s employment is terminated by Mr. McGinnis within 120 days thereafter (in this latter event, Mr. McGinnis may also be entitled to receive a certain Gross-Up Payment (as defined in the 2003 employment agreement)). The employment agreement contains certain confidentiality and noncompete provisions in favor of Trover.

Mr. McGinnis has borrowed money from Trover that he is required to repay with interest. The loan is repayable in full on January 1, 2005. At April 30, 2004, the unpaid balance of the loan (including accrued unpaid interest) was $1,009,435. Pursuant to a Deferred Compensation Agreement between Trover and Mr. McGinnis, 50% of each amount otherwise payable to Mr. McGinnis under Trover’s Management Group Incentive Compensation Plan is to be deferred until the loan is paid in full. Trover has full right of off-set against any deferred compensation under the Deferred Compensation Agreement should Mr. McGinnis default under the loan. At the election of Mr. McGinnis, the payment of the deferred compensation, upon payment of the loan, may be extended for a period of not more than ten years. At April 30, 2004, the amount of deferred compensation was $182,012, with accrued interest of $23,649.

Mr. McGinnis has entered into a new employment agreement with Parent, providing for his continued service following completion of the merger as chief executive officer of Trover, on substantially the same terms as his existing employment agreement. As a result of this agreement, the merger will not constitute a “Change in Control Event” under the 2003 employment agreement. The new agreement will become effective by its terms only at the effective time of the merger. In connection with Mr. McGinnis entering into the new employment agreement, Parent has agreed to extend the maturity of the loan described above by four years, to January 1, 2009. If Trover were to remain a public company, it would be legally prohibited from extending the maturity of Mr. McGinnis’ loan in this way. The provisions in the new employment agreement regarding Mr. McGinnis’ compensation are the same as in his existing 2003 employment agreement with Trover. Mr. McGinnis’ 2003 employment agreement has an initial term of three years beginning on January 1, 2003, and the initial term of the new employment agreement will begin at the effective time of the merger and end on December 31, 2005.

Severance Arrangements of Our Other Executives

In February 2002, Trover entered into severance agreements (the “Severance Agreements”) with each of Robert G. Bader, Robert L. Jefferson, Debra M. Murphy and Douglas R. Sharps. In March 2003, Trover entered into a Severance Agreement with Mark J. Bates. Each Severance Agreement provides that if the executive officer is terminated by Trover without “Cause” (as defined in the Severance Agreement), Trover will continue to pay that executive officer his or her base salary in effect on the date of termination for a period of one year following the day on which the termination occurs (“Severance Pay”) and for a period of one year from the date of termination, will pay, or reimburse such executive officer for, the Trover-paid portion of medical premiums under Trover’s group health plan that would have applied to such executive officer had he or she not been terminated, provided that the executive officer makes a timely election of such continuation coverage under COBRA. Severance Pay would be paid and delivered to the executive officer on the same basis as the executive officer’s regular base salary was paid and delivered prior to termination, would be reduced to the extent the executive officer receives compensation from an employer other than Trover during the one year period following termination, and would not include any amounts of incentive compensation. Each Severance Agreement also provides that if the executive officer is terminated or voluntarily terminates employment for “Good Reason” (as defined in the Severance Agreement) within two years following a “Change in Control” (as defined in the Severance Agreement and which includes a transaction such as the merger), Trover will make a “Change in Control Payment” to the executive offer, provided the executive officer

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is employed by Trover on the date of the Change in Control and was a member of Trover’s “Management Group” (as defined by the Board) prior to the execution of any definitive agreement between Trover and any entity to be combined with Trover in connection with a Change in Control. The amount of the Change in Control Payment would be equal to one year of salary and one year of benefits continuation if the executive officer were a member of the Management Group for three years or less on the date of the Change in Control, and equal to two years of salary and two years of benefits continuation if the executive officer were a member of the Management Group for more than three years on the date of the Change in Control. In both cases, the Change in Control Payment would be paid as salary continuation in accordance with the payment provisions relating to Severance Pay. No Severance Pay is payable to an executive officer if that officer then also is entitled to a Change in Control Payment. Pursuant to the provisions described above, consummation of the merger will not itself trigger any right to receive a Change in Control Payment. Furthermore, at present we have no reason to believe that any Change in Control Payment obligation will be triggered following the merger. If, hypothetically, all the Change in Control payments were triggered shortly after the merger, the maximum aggregate amount that would be payable (based on compensation through December 31, 2003) would be $1,563,834.

Management Investors

Tailwind has invited the Management Investors to co-invest in Parent, and the Management Investors expect to invest in Parent common stock in connection with the closing of the merger. Parent has not fixed a price per share for its common stock, but this investment by the Management Investors is expected to represent approximately 3% of the Parent common stock outstanding immediately after the merger. Tailwind has advised us that the price per share for the Parent common stock to be acquired by the Management Investors will be the same price per share paid by the Tailwind Entities and each of the other co-investors for their shares of Parent common stock. The following table sets forth the expected respective dollar value of the contribution of, and the percentage ownership of Parent to be received by, each Management Investor.

Parent and its affiliates also have informed Mr. McGinnis that they expect to maintain a 401(k) plan for employees, and expect to maintain the level of Trover’s matching contributions. To the extent the 401(k) plan invests in the stock of Parent, it will acquire shares first from any employee who has acquired stock through the exercise of “roll-over” management stock options after the effective time.

Thomas Weisel Capital Partners, the Management Investors and the other co-investors intend to enter into a stockholders agreement to provide certain rights with respect to their respective equity interests in Parent, the expected terms of which are described below under “Special Factors—Interests of Trover’s Directors and Executive Officers—Rights Pursuant to Stockholders Agreement.”

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Stock Option Plan

In addition to common stock of Parent acquired by the Management Investors described above under “Special Factors—Interests of Trover’s Directors and Executive Officers—Management Investors” and stock options they may receive in exchange for their Trover stock options as described under “Special Factors—Interests of Trover’s Directors and Executive Officers—Merger Consideration to be Received by Directors and Executive Officers of Trover,” certain of our executive officers and other management level employees will receive additional options to acquire common stock of Parent following the merger pursuant to a stock option plan to be adopted by Parent. The number of shares of Parent common stock subject to issue pursuant to the stock option plan will be equal to 20% of Parent’s equity capitalization immediately after the effective time, calculated on a fully-diluted basis as if all of the “roll over” management stock options had been exercised and all of the options under the stock option plan had been granted and exercised. The number of options to be granted to each executive officer and management level employee has not been established, but it is expected that fewer than all of the authorized options will be granted immediately after the merger.

One-half of the options issuable under the stock option plan are expected to have an exercise price equal to the price per share being paid by the Tailwind Entities and their co-investors for their equity interests in Parent and the remaining options will have an exercise price equal to twice the price per share being paid by the Tailwind Entities and their co-investors for their equity interests in Parent. It is expected that the stock option plan will provide that any options forfeited by employees will be eligible for re-grant at a later date, that the options will have a five-year vesting schedule and that there will be change of control provisions for vesting. The options will expire ten years from the date of grant but may be terminated earlier in the event of a termination of employment.

Rights Pursuant to Stockholders Agreement

Tailwind has advised us that no person or entity will be granted any stock options to acquire shares of Parent or be permitted to co-invest in Parent unless such person or entity enters into a stockholders agreement with Thomas Weisel Capital Partners, Parent and the other stockholders and option holders of Parent. The terms of the stockholders agreement have not been agreed upon by the parties, but Tailwind expects the stockholders agreement will contain provisions:

Management of the Surviving Corporation

Tailwind has advised us that it expects that following the merger, Trover’s existing management team will remain in place. The merger agreement provides that the officers of Acquisition Corp. will be the initial officers of Trover as the surviving corporation until their respective successors are duly elected or appointed and qualified. Following the merger, Patrick B. McGinnis will be the chief executive officer of the surviving corporation. In addition, Douglas M. Karp, Lawrence B. Sorrel and Geoffrey S. Raker will be directors of Trover, with Mr. Karp serving as chairman.

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Merger Consideration to Be Received by Directors and Executive Officers of Trover

Except as described below, the shares of Trover common stock and options to acquire Trover common stock held by the directors and executive officers of Trover will be treated in the same way as all other shares and options. Their shares will be converted into the right to receive $7.00 per share in cash, without interest on that amount, and their options will be cancelled and they will be entitled to receive a cash payment in respect of each such option equal to (i) the number of shares of Trover common stock issuable upon exercise of the option multiplied by (ii) the amount by which the exercise price of the option is less than the merger consideration per share of $7.00. At the effective time of the merger, each option held by a Trover executive officer or by a Trover employee listed on a supplementary schedule to be provided by Parent prior to the effective time of the merger that then remains outstanding and that was originally was granted under one of Trover’s benefit plans, whether or not then vested or exercisable, shall be exchanged for an option to acquire shares of Parent common stock on terms comparable to the terms of such employee’s option immediately prior to the effective time of the merger. The following table reflects, based on their holdings of shares and options on April 30, 2004, the consideration that will be payable to the persons named below in respect of their shares of Trover common stock and stock options:

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Indemnification and Insurance

Trover’s restated certificate of incorporation contains a provision that eliminates the personal liability of Trover’s directors to Trover or its stockholders for monetary damages for breaches of their fiduciary duty (subject to certain exceptions, such as breaches of the duty of loyalty to Trover or its stockholders), and provides that Trover’s officers, directors, employees and agents shall be entitled to be indemnified by Trover to the full extent permitted by law. Trover’s bylaws include provisions for indemnification of Trover’s officers, directors, employees and agents in non-derivative suits if the applicable person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

Each member of the special committee has indemnification rights pursuant to an indemnification agreement between that person and Trover. Pursuant to the indemnification agreements, Trover has agreed to indemnify and advance expenses to the members of the special committee to the fullest extent permitted by applicable law with respect to any proceeding including, without limitation, any proceeding which relates to acts or omissions occurring or allegedly occurring at any time prior to the dates of the respective indemnification agreements.

Under the agreements, the members of the special committee will be entitled to indemnification if, by reason of their status as directors or special committee members, they are, or are threatened to be made, a party to any threatened, pending or completed proceeding or a proceeding brought by or in the right of Trover to procure a judgment in its favor or they are made a witness in any proceeding. They are entitled to be indemnified against expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the director or on the director’s behalf in connection with the proceeding or any other issue or matter therein, if the director acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of Trover, and with respect to any criminal proceeding had no reasonable cause to believe, and did not believe, that his or her conduct was unlawful. No indemnification is required to be made, however, in respect of any claim, issue or matter in such proceeding as to which a director shall have been adjudged to be liable to Trover if applicable law prohibits such indemnification, unless the applicable court decides otherwise.

The merger agreement provides that all rights to indemnification existing as of the date of the merger agreement in favor of the directors or officers of Trover with respect to their activities as such at or prior to the effective time of the merger, as provided in Trover’s certificate of incorporation or bylaws or any written agreement between any such person and Trover in effect on the date of the merger agreement shall survive the merger and shall continue in

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full force and effect until 180 days after the expiration of the longest applicable statute of limitations. In addition, to the extent not provided by an existing right of indemnification or other agreement or policy, following the completion of the merger, Trover as the surviving corporation is required to indemnify all persons to the fullest extent permitted by applicable law with respect to all actual or alleged acts or omissions prior to the effective time of the merger occurring in connection with or arising out of such individuals’ service as officers or directors of Trover or any of its subsidiaries or as trustees, fiduciaries or administrators of any plan for the benefit of employees. In addition, Trover as the surviving corporation is required to either (i) maintain directors’ and officers’ liability insurance policies in effect for not less than six years after the effective time of the merger for the benefit of those persons who are currently covered by such policies of Trover, or any of its subsidiaries, in amounts and on terms no less favorable than the amounts and terms of such current insurance coverage or (ii) provide tail coverage for such persons which provides coverage for a period of six years for acts or omissions prior to the effective time of the merger in amounts and on terms substantially similar to the current insurance coverage.

THE SPECIAL MEETING

Time and Place; Mailing

We are furnishing this proxy statement, together with the accompanying notice of special meeting and form of proxy, to the stockholders of Trover as part of the solicitation of proxies by Trover’s board of directors for use at the special meeting of stockholders to be held at Watterson Tower, 12th Floor, 1930 Bishop Lane, Louisville, Kentucky 40218 on    ,    , 2004, beginning at 10:00 a.m. Eastern Standard Time, or at any adjournments or postponements thereof.

We intend to first mail this proxy statement and the accompanying form of proxy on or about June    , 2004 to all stockholders entitled to notice of and to vote at the special meeting, together with a copy of our Annual Report on Form 10-K for the year ended December 31, 2003.

Matters to be Considered at the Special Meeting

At the special meeting, the stockholders will be asked to consider and vote upon a proposal to adopt the merger agreement. If the requisite votes in favor of the proposal are obtained and certain other conditions are satisfied or, where permissible, waived, Acquisition Corp. will be merged with and into Trover with Trover being the surviving corporation. At the effective time of the merger, each share of common stock of Trover that is outstanding immediately prior to the effective time will be converted into the right to receive $7.00 in cash, without interest, except for:

At the special meeting, the stockholders will also be asked to vote on a proposal to approve the adjournment of the special meeting, if necessary to solicit additional proxies, in the event that there are not sufficient votes at the time of the special meeting to adopt the merger agreement.

Record Date; Voting Information

Only holders of record of our common stock, par value $.001 per share, as of the close of business on    , 2004 (the “Record Date”) will be entitled to notice of and to vote at the special meeting. As of the close of business on the Record Date        , shares of Trover common stock were outstanding and eligible to be voted. A list of our stockholders of record will be available for inspection by any stockholder, for any purpose germane to the special meeting, at our principal executive offices during regular business hours for the ten days preceding the special meeting and also will be available for inspection at the special meeting. Each holder of record of Trover common stock on the record date will be entitled to one vote for each share held.

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The affirmative vote of holders of a majority of the outstanding shares of Trover common stock entitled to vote at the special meeting is the only vote required to adopt the merger agreement. The merger agreement does not require the separate approval of a majority of the shares held by stockholders not affiliated with Parent. Subject to the requirements of Delaware law, all votes will be tabulated by the inspector of elections appointed for the special meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. “Broker non-votes” are shares as to which a broker indicates on a proxy card that it does not have discretionary voting authority and has not received voting instructions from the beneficial owner on a particular matter. Brokers who hold shares in “street name” for clients typically have the discretionary authority to vote on “routine” proposals when they have not received instructions from beneficial owners. Absent specific instructions from the beneficial owner of the shares, however, brokers are not allowed to vote those shares on non-routine matters. The adoption of the merger agreement is a non-routine matter on which shares held in street name may not be voted without specific instructions from the applicable beneficial owners, and accordingly if a beneficial owner does not give directions as to how the beneficial owner’s shares are to be voted, those shares will be treated on any proxy card submitted by the owner’s broker in respect of those shares as broker non-votes. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present at the special meeting but will have the same effect as a vote against adoption of the merger agreement. If you want the merger agreement to be adopted and you hold any of your shares in street name, it is very important that you direct your broker to vote your shares “FOR” the adoption of the merger agreement, and that you give those instructions early enough that they can be followed.

As of the Record Date, the executive officers and directors of Trover owned an aggregate of    shares of Trover common stock, representing approximately    % of the total number of shares entitled to vote at the special meeting. Those executive officers and directors have informed us that they intend to vote their shares of Trover common stock in favor of the adoption of the merger agreement.

Except for broker non-votes, any proxy that is returned signed and dated without any other instructions, and any proxy that is returned signed and dated and expressly voted “FOR” adoption of the merger agreement without further instructions, will be treated as a grant of discretionary authority to the persons named in the proxy to vote in favor of any motion to adjourn or postpone the special meeting to another time and/or place, in order to allow time to solicit additional proxies or for any other reason. Our board of directors does not know of any matters to be presented for a vote at the special meeting other than the matters discussed in this proxy statement; however, if a new matter is presented and our board of directors does not receive notice of the new matter a reasonable time before the special meeting, the discretionary voting authority described above also will extend to the new matter and accordingly, the persons named in the proxy will be entitled to vote the shares covered by the proxy in respect of the new matter in any way those persons deem appropriate.

Quorum

The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Trover’s common stock entitled to vote at the special meeting is necessary to constitute a quorum for the transaction of business at the special meeting. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum exists.

Proxies; Revocation

Any person giving a proxy pursuant to this solicitation has the power to revoke it at any time before it is voted. It may be revoked by filing with Trover’s Secretary, Douglas R. Sharps, at Trover’s executive offices located at 1600 Watterson Tower, Louisville, Kentucky 40218, a written notice of revocation or a duly executed proxy bearing a later date, or it may be revoked by attending the special meeting and voting in person. A stockholder’s attendance at the special meeting will not, by itself, revoke a proxy previously given by that stockholder. If a stockholder’s shares are held of record by a broker, bank or other nominee and the stockholder wishes to vote at the special meeting, the stockholder must obtain a proxy from the record holder.

Please do not send in stock certificates at this time. If the merger is completed, Trover will distribute instructions regarding the procedures for exchanging your stock certificates for the $7.00 per share cash payment to which stockholders will be entitled.

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Expenses of Proxy Solicitation

Each of Trover and Parent is responsible for its own fees and expenses incurred in connection with the solicitation of proxies in connection with the merger, except that Trover and Parent have agreed to share equally the fees and expenses (other than attorneys’ fees and expenses) associated with the filing, printing and mailing of the proxy solicitation materials of which this proxy statement forms a part. Trover has engaged the services of Georgeson Shareholder Communications Inc. (“Georgeson”), to solicit proxies and to assist in the distribution of proxy materials for the special meeting. Georgeson also has agreed to provide consulting and analytic services to Trover and to provide solicitation services with regard to banks, brokers, institutional investors and individual stockholders. Trover has agreed to pay Georgeson a fee of $7,500 plus reasonable out-of-pocket expenses and to indemnify Georgeson against certain liabilities and expenses, including liabilities under the federal securities laws. We will request banks, brokerage firms, fiduciaries and other custodians and nominees to forward our proxy solicitation materials to the beneficial owners of the Trover common stock they hold of record. We will reimburse these record holders for customary clerical and mailing costs incurred by them in forwarding these materials to their customers. Proxies also may be solicited by telephone, telegram, electronic mail or in person by directors, officers or other regular employees of Trover. Other than the fees payable to the independent directors comprising the special committee for their service on the special committee, no additional compensation will be paid to directors, officers or other regular employees for these solicitations.

Adjournment and Postponement

We are seeking discretionary authority to vote, in the discretion of the proxy holders, on any proposals to postpone or adjourn the special meeting. In particular, discretionary authority is expected to be exercised if the purpose of the postponement or adjournment is to provide additional time to solicit votes to approve and adopt the merger agreement and the merger. Any adjournment of the special meeting may be made without notice, other than by an announcement made at the special meeting, by approval of the holders of a majority of the outstanding shares of Trover common stock present in person or represented by proxy at the special meeting, whether or not a quorum exists.

No proxies voted against approval of any of the proposals will be voted in favor of adjournment for the purpose of soliciting additional proxies.

If we postpone the special meeting, we will issue a press release to announce the postponement, as well as the new date, time and location of the postponed special meeting.

Appraisal Rights

Stockholders who do not vote in favor of adoption of the merger agreement, and who otherwise fully comply with the applicable statutory procedures of the Delaware General Corporation Law summarized elsewhere in this proxy statement and in Appendix C, will be entitled to seek appraisal of the value of their shares of Trover common stock in accordance with Section 262 of the Delaware General Corporation Law. See “Appraisal Rights” beginning on page    .

ESTIMATED FEES AND EXPENSES OF THE MERGER

Whether or not the merger is completed, in general, all fees and expenses incurred in connection with the merger will be paid by the party incurring those fees and expenses other than the fees and expenses associated with the filing, printing and mailing of this proxy statement, which will be shared equally. Under the circumstances described in “The Merger Agreement—Break-up Fees; Expense Reimbursement,” Trover will pay Parent up to an aggregate maximum amount of $4.0 million as a termination fee and break-up fee and reimbursement of the out-of-pocket expenses of Parent incurred in connection with the merger.

Fees and expenses previously incurred and to be incurred by Trover in connection with the merger are estimated at this time to be as follows:

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These expenses will not reduce the merger consideration to be received by Trover stockholders. Whether or not the merger is completed and except as otherwise provided in the merger agreement, all fees and expenses in connection with the merger will be paid by the party incurring those fees and expenses. See “The Merger Agreement—Break-up Fees; Expense Reimbursement.”

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

The following discussion is a summary of material U.S. federal income tax consequences of the merger. This summary does not purport to be comprehensive; it does not describe all potentially relevant tax considerations. The discussion in respect of tax consequences for stockholders applies only to stockholders who do not exercise statutory appraisal rights and who hold shares of Trover common stock as capital assets. The discussion may not be fully applicable to stockholders who are subject to special tax treatment under the Internal Revenue Code of 1986, as amended (the “Code”), such as financial institutions or tax-exempt organizations. This discussion also does not address the U.S. federal income tax consequences to any stockholder that is, for U.S. federal income tax purposes, a non-resident alien individual, a foreign corporation, a foreign partnership or a foreign estate or trust.

The material U.S. federal income tax consequences set forth below are based on the Code, Treasury regulations promulgated under the Code, administrative pronouncements and judicial decisions, all in effect as of the date of this proxy statement and all subject to change, possibly with retroactive effect. Because individual circumstances may differ, you are urged to consult your own tax advisor to determine the extent to which the rules discussed below apply to you and to determine the particular tax effects of the merger on your situation, including the application and effect of state, local and foreign tax laws.

Tax Consequences for Unaffiliated Stockholders

The receipt by a stockholder of cash for Trover common stock pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. In general, a stockholder will recognize gain or loss for U.S. federal income tax purposes equal to the difference between the cash received by the stockholder pursuant to the merger and the stockholder’s adjusted tax basis in the shares of Trover common stock surrendered in the merger. That gain or loss will be capital gain or loss and will be long-term capital gain or loss if, on the effective date of the merger, the shares of Trover common stock were held for more than one year. There are limitations on the deductibility of capital losses.

Tax Consequences for Management Investors

In general, a Management Investor who exchanges vested Trover common stock for cash pursuant to the merger will recognize capital gain or loss in the same way as an unaffiliated stockholder, as described above. If options of a Management Investor are converted into cash pursuant to the merger, the Management Investor generally will recognize ordinary income equal to the amount of cash received, and the cash payment otherwise due will be subject to tax withholding. If a Management Investor elects to exchange any of his Trover stock options for options to acquire stock of Parent, that exchange is intended to be tax-free (i.e., to not result in immediate realization of taxable

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income) for the Management Investor. When the Parent stock options obtained in the exchange are exercised or disposed of, the Management Investor may realize taxable income.

Tax Consequences for Other Participants

None of Trover, Parent, Acquisition Corp. or the Tailwind Entities will recognize gain or loss for U.S. federal income tax purposes as a result of the consummation of the merger.

Backup Withholding

Payments in connection with the merger may be subject to “backup withholding” at a 28% rate. Backup withholding generally will apply if a stockholder fails to furnish such stockholder’s social security number or other taxpayer identification number and to certify that such number is correct. Each stockholder should complete and sign the Form W-9 that will be included as part of the letter of transmittal sent to the stockholders in order to avoid backup withholding, unless an exemption from backup withholding applies and is established in a manner satisfactory to us. Backup withholding is not an additional tax but merely an advance payment, which may be refunded to the extent it results in an overpayment of tax. Certain persons generally are exempt from backup withholding, including corporations and financial institutions. Certain penalties apply for failure to furnish correct information and for failure to include the reportable payments in income.

Trover urges you to consult your tax advisor to determine your particular U.S. federal, state, local or foreign income or other tax consequences of the merger.

CERTAIN REGULATORY MATTERS

Trover and Parent do not believe that any governmental filings are required with respect to the merger other than (i) the filing of the certificate of merger with the Secretary of State of the State of Delaware, (ii) filings with the Securities and Exchange Commission and the Nasdaq National Market and (iii) a filing with the Department of Justice and the Federal Trade Commission pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. On March 8, 2004, Trover and Tailwind each filed a Notification and Report Form with the Antitrust Division of the United States Department of Justice and the United States Federal Trade Commission. On March 16, 2004, Trover and Tailwind were advised by the Department of Justice and the Federal Trade Commission that the waiting periods under the Hart-Scott-Rodino Act had been terminated.

The Department of Justice and the Federal Trade Commission, state antitrust authorities or a private person or entity could seek to enjoin the merger under the antitrust laws at any time before its completion or to compel rescission or divestiture at any time subsequent to the merger.

APPRAISAL RIGHTS

Under Delaware law, if you do not wish to accept the merger consideration of $7.00 per share in cash as provided in the merger agreement, you have the right to dissent from the merger and instead to be paid in cash the fair value of your shares as determined in an appraisal proceeding conducted by the Delaware Court of Chancery. In order to exercise appraisal rights you must strictly comply with the provisions of Section 262 of the Delaware General Corporation Law. A copy of Section 262 is attached as Appendix C.

Section 262 requires that stockholders be notified not less than 20 days before the special meeting that appraisal rights will be available. A copy of Section 262 must be included with such notice. This proxy statement constitutes our notice to you, as required by Section 202, of the availability of appraisal rights in connection with the merger.

If you elect to demand appraisal of your shares, you must satisfy all of the following conditions:

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The written demand for appraisal must be in addition to and separate from any proxy or vote. Neither voting against (in person or by proxy), abstaining from voting or failing to vote on the proposed merger agreement will constitute a written demand for appraisal within the meaning of Section 262.

If you fail to comply with all of these conditions and the merger is completed, you will be entitled to receive the merger consideration for any shares of Trover common stock you hold as of the effective time as provided for in the merger agreement but you will have no appraisal rights for your shares of Trover common stock.

All demands for appraisal should be delivered to the Secretary, Trover Solutions, Inc., 1600 Watterson Tower, Louisville, Kentucky 40218 before the vote on the merger agreement is taken at the special meeting, and should be executed by, or on behalf of, the record holder of the shares of Trover common stock. The demand must reasonably inform us of the identity of the stockholder and the intention of the stockholder to demand appraisal of his or her shares.

To be effective, a demand for appraisal by a holder of Trover common stock must be made by or in the name of the registered holder of the stock, fully and correctly, as the stockholder’s name appears on his or her stock certificate(s) and cannot be made by the beneficial owner if he or she does not also hold the shares of record. If you do not hold your shares in your own name and you wish to exercise appraisal rights you must have the registered owner submit the required demand in respect of those shares.

If shares are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made in that capacity. If the shares are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including one or two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a broker, who holds shares as a nominee for others, may exercise his or her right of appraisal with respect to the shares held for one or more beneficial owners, while not exercising this right for other beneficial owners. In such a case, the written demand should state the number of shares as to which appraisal is sought. Where no number of shares is expressly mentioned, the demand will be presumed to cover all shares held in the name of such record owner.

If you hold your shares of common stock in a brokerage account or in other nominee form and you wish to exercise appraisal rights, you should consult with your broker or such other nominee to determine the appropriate procedures for the making of a demand for appraisal by such nominee.

Within ten days after the effective time of the merger, Trover must give written notice that the merger has become effective to each stockholder who has properly filed a written demand for appraisal and who did not vote in favor of the merger agreement. Within 120 days after the effective time of the merger, either Trover or any stockholder who has complied with the requirements of Section 262 may file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. A dissenting stockholder may request from Trover during this 120-day period a statement setting forth the aggregate number of shares not voted in favor of the merger and with respect to which demands for appraisal have been received and the

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aggregate number of holders of such shares. We do not expect that Trover will file such a petition if there are dissenting stockholders, and Trover has no obligation to do so. Accordingly, your failure to timely file a petition could nullify your demand for appraisal.

Under the merger agreement, Trover has agreed to give Parent notice of any demands for appraisal received by Trover and to provide Parent the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal under the Delaware General Corporation Law. Trover has agreed that it will not, without the prior written consent of Parent, make any payment with respect to any demands for appraisal, or settle or offer to settle any such demands.

At any time within 60 days after the effective time of the merger, any stockholder who has demanded an appraisal has the right to withdraw the demand and to accept the merger consideration of $7.00 per share for his or her shares of Trover common stock. If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to Trover, Trover then will be obligated within 20 days after receiving service of a copy of the petition to provide the Chancery Court with a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and who have not reached an agreement with Trover as to the value of their shares. After notice to dissenting stockholders, the Chancery Court is empowered to conduct a hearing upon the petition, to determine those stockholders who have complied with Section 262 and who have become entitled to the appraisal rights provided thereby. The Chancery Court may require the stockholders who demanded an appraisal of their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and, if any stockholder fails to comply with those directions, the Chancery Court may dismiss the proceedings as to that stockholder.

After determination of the stockholders entitled to appraisal of their shares of common stock, the Chancery Court will appraise the shares, determining their fair value exclusive of any element of value arising from the accomplishment or expectation of the merger, together with a fair rate of interest, if any. When the value is determined, the Chancery Court will direct the payment of such value, with interest thereon accrued during the pendency of the proceeding if the Chancery Court so determines, to the stockholders entitled to receive the same, upon surrender by such holders of the certificates representing such shares.

In determining fair value, the Chancery Court is required to take into account all relevant factors. The fair value of the shares as determined under Section 262 could be more, the same or less than the $7.00 per share you would receive under the merger agreement if you did not seek appraisal of your shares. Investment bankers opinions are not opinions as to fair value under Section 262.

Costs of the appraisal proceeding may be imposed upon Trover and the stockholders participating in the appraisal proceeding by the Chancery Court, as the court deems equitable in the circumstances. Upon the application of a stockholder, the Chancery Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal.

Any stockholder who demands appraisal rights will not, after the effective time, be entitled to vote the shares subject to such demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares, other than with respect to payment as of a record date prior to the effective time; however, if no petition for appraisal is filed within 120 days after the effective time, or if the stockholder delivers a written withdrawal of his or her demand for appraisal and an acceptance of the merger within 60 days after the effective time, then the right of the stockholder to appraisal will cease and the stockholder will be entitled to receive the $7.00 per share merger consideration for shares of his or her Trover common stock in accordance with the merger agreement. Any withdrawal of a demand for appraisal made more than 60 days after the effective date of the merger may only be made with the written approval of Trover as the surviving corporation.

If a petition for appraisal is timely filed, the Delaware Court of Chancery will determine which stockholders are entitled to appraisal rights and may require the stockholders demanding appraisal who hold certificated shares to submit their stock certificates to the court for notation of the pendency of the appraisal proceedings, and if the stockholder fails to comply with the court’s direction, the court may dismiss the proceeding against the stockholder. The Delaware Court of Chancery will thereafter determine the fair value of the shares of Trover common stock held

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by dissenting stockholders, exclusive of any element of value arising from the accomplishment or expectation of the merger, but together with a fair rate of interest, if any, to be paid on the amount determined to be fair value. In determining the fair value, the Delaware Court of Chancery will take into account all relevant factors. The Delaware Supreme Court has stated that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered in the appraisal proceedings. In addition, Delaware courts have decided that the statutory appraisal remedy, in cases of unfair dealing, may or may not be a dissenter’s exclusive remedy. The Delaware Court of Chancery may determine the fair value to be more than, less than or equal to the consideration that the dissenting stockholder would otherwise be entitled to receive under the merger agreement. If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the appraisal proceeding will be determined by the Delaware Court of Chancery and taxed against the parties as the Delaware Court of Chancery determines to be equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal.

In view of the complexity of Section 262, any stockholder wishing to exercise appraisal rights is urged to consult legal counsel before attempting to exercise appraisal rights. Failure to comply strictly with all of the procedures set forth in Section 262 of the Delaware General Corporation Law may result in the loss of a stockholder’s statutory appraisal rights.

The foregoing is intended as a brief summary of the material provisions of the Delaware statutory procedures required to dissent from the merger and perfect a stockholder’s appraisal rights. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to the full text of Section 262. If you wish to consider exercising your appraisal rights you should carefully review the text of Section 262 contained in Appendix C because failure to timely and properly comply with the requirements of Section 262 will result in the loss of your dissenters’ rights under Delaware law.

THE MERGER AGREEMENT

The following is a description of the material terms of the merger agreement. A complete copy of the merger agreement appears as Appendix A to this proxy statement and is incorporated into this proxy statement by reference. You are urged to read the entire merger agreement carefully.

The Merger

The merger agreement provides that, subject to the conditions summarized below, Acquisition Corp. will merge with and into Trover. Upon consummation of the merger, Acquisition Corp. will cease to exist and Trover will continue as the surviving corporation.

Effective Time of Merger

The merger will become effective upon the filing of a certificate of merger with the Secretary of State of the State of Delaware in accordance with the Delaware law or at such later time as is specified in the certificate of merger. This time is referred to as the “effective time.” Trover and Acquisition Corp. have agreed to file the certificate of merger simultaneously with or as soon as practicable after the closing, which is to be held no later than five business days following satisfaction or waiver of the conditions to closing of the merger set forth in the merger agreement, or such other time as the parties may agree in writing.

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Certificate of Incorporation, Bylaws, Directors and Officers

When the merger is completed:

Conversion of Securities

At the effective time of the merger, by virtue of the merger and without any action on the part of any holder of capital stock of Parent, Acquisition Corp. or Trover:

Treatment of Stock Options and Restricted Stock

As of the effective time, except as described in the next sentence, each option to acquire shares of Trover common stock that then remains outstanding and originally was granted under any stock option or compensation plan or arrangement of Trover, whether or not then vested or exercisable, automatically will be converted into an obligation of the surviving corporation to pay, and a right of the holder of the option to receive an amount in cash (subject to any applicable withholding taxes) equal to (x) the excess, if any, of $7.00 over the applicable exercise price of the option multiplied by (y) the number of shares of Trover common stock covered by the option. At the effective time of the merger, each option held by an employee of Trover listed on a supplementary schedule to be provided by Parent at least five business days prior to the effective time of the merger that then remains outstanding and originally was granted under one of Trover’s benefit plans, whether or not then vested or exercisable, and with respect to which the employee has agreed with Parent to a “roll-over” exchange, will be exchanged for an option to acquire shares of Parent common stock on terms comparable to the terms of the employee’s option immediately prior to the effective time.

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As of the effective time of the merger, each restricted share of Trover common stock that remains outstanding will be converted into the right to receive $7.00 in cash, regardless of any vesting or other restrictions that otherwise may apply.

Payment

At the effective time of the merger, Acquisition Corp. will be required to deposit with a bank designated by Acquisition Corp. (and reasonably acceptable to Trover) as the paying agent, sufficient funds to pay the aggregate merger consideration due to the holders of Trover common stock and options under the merger agreement. Promptly after the effective time of the merger, Trover, as the surviving corporation, will be required to cause the paying agent to mail to each record holder of shares of Trover common stock immediately prior to the effective time a letter of transmittal and instructions to effect the surrender of their certificate(s) in exchange for payment of the merger consideration.

Trover Special Meeting

Trover has agreed to duly call, give notice of and convene as promptly as reasonably practicable a special meeting of its stockholders for the purpose of voting upon the adoption of the merger agreement. Trover has agreed that the proxy statement to be sent to stockholders in connection with the special meeting (i.e., this proxy statement) will contain the recommendation of Trover’s board of directors that Trover’s stockholders vote to adopt the merger agreement. Trover’s directors may, however, withdraw, modify or change their recommendation if such action is required by their fiduciary obligations as board members under applicable law.

Representations and Warranties

Representations and Warranties of Trover. The merger agreement contains various customary representations and warranties (which will not survive completion of the merger) made by Trover to Parent and Acquisition Corp., subject to identified exceptions, qualifications and limitations. These representations and warranties include, among other things:

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Representations and Warranties of Parent and Acquisition Corp. The merger agreement contains various customary representations and warranties (which will not survive completion of the merger) made by Parent and Acquisition Corp. to Trover, subject to identified exceptions, qualifications and limitations. These representations and warranties include, among other things:

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Conduct of Our Business Pending the Merger

The merger agreement imposes various restrictions on our conduct and operations until the merger is completed. We have agreed that, prior to the effective time, Trover and each of our subsidiaries will:

We also have agreed, subject to identified exceptions, that Trover will not and will not permit any of its subsidiaries to do, among other things, any of the following without the prior written consent of Parent:

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Covenant Regarding No Solicitation; Covenant to Recommend

The merger agreement prevents us from soliciting, negotiating or otherwise engaging in discussions with, or furnishing information to, a third party regarding (i) a merger, consolidation or other business combination transaction, (ii) the issuance of 20% or more of our securities as consideration for the assets or securities of another person, (iii) a tender offer or exchange offer for 20% or more of our outstanding equity securities or (iv) a sale, lease or other disposition of 20% or more of our securities or 20% of the assets of Trover and our subsidiaries, taken as a whole, except that we may negotiate or engage in discussions with or furnish information to a third party if we receive an unsolicited bona fide proposal from that third party and:

We are required promptly (and in any event within 48 hours), to inform Parent if we receive any acquisition proposal from a third party and thereafter to keep Parent informed of the status of any discussions with such third party and provide Parent with copies of certain written communications with such third party.

As described elsewhere in this proxy statement, our board has recommended that our stockholders vote to adopt the merger agreement. The merger agreement provides, however, that if after consultation with outside legal counsel and our financial advisor our board determines that such action is necessary for our directors to comply with their fiduciary duties to our stockholders under applicable law, our board can modify or withdraw its recommendation of the merger with Parent, subject to paying the break-up fee and expense reimbursement described below under the heading “The Merger Agreement—Break-up Fees; Expense Reimbursement” beginning on page     .

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Indemnification and Insurance

The merger agreement provides that all rights to indemnification and advancement of expenses existing as of the date of the merger agreement in favor of the current and former directors and officers of Trover, including under Delaware law, pursuant to Trover’s governing documents and in written agreements, shall survive the merger and shall continue in full force and effect for a period of not less than 180 days after the expiration of the longest applicable statute of limitations.

In the merger agreement Parent has agreed to indemnify, and cause the surviving corporation to indemnify, to the fullest extent permitted under applicable law, all persons with respect to actual or alleged acts or omissions prior to the effective time of the merger occurring in connection with such individuals’ service as officers or directors of Trover or as trustees, fiduciaries or administrators of any plan for the benefit of employees. If any such person is or becomes involved in any investigation arising out of any actual or alleged acts or omissions, including any matter related to the transactions contemplated by the merger agreement, occurring on or prior to the effective time of the merger, Parent is required to pay (or cause the surviving corporation to pay), as incurred, the reasonable fees and expenses of counsel selected by that person, including the cost of any investigation, preparation and settlement, provided that Parent is entitled to require an undertaking from the person to repay such amount to Parent if a court determines that neither Parent nor the surviving corporation is legally permitted to indemnify the person under applicable law. Parent also is required to pay all reasonable fees and expenses, including fees and expenses of counsel, that may be incurred by any indemnified person in enforcing the indemnity and other obligations provided for in the merger agreement.

For not less than six years after the closing of the merger, Trover, as the surviving corporation, is required to maintain directors’ and officers’ liability insurance covering the indemnified parties who are currently covered by Trover’s insurance policy on terms not less favorable than those in effect on the date of the merger agreement in terms of coverage and amounts; provided, however, that the surviving corporation shall not be required to pay an annual premium for such coverage in excess of 200% of the premium paid by Trover for such insurance as of the date of the merger agreement. We anticipate this requirement will be satisfied through the purchase of a six-year “tail” insurance policy at the time we complete the merger.

Employee Matters

Parent has agreed to provide, and to cause Trover, as the surviving corporation, to honor each benefit plan and to provide, for a period of not less than one year following the effective time of the merger, employee benefits (including severance benefits) to individuals who continue employment with Trover after the effective time of the merger that are no less favorable, in the aggregate, than the employee benefits provided to such individuals immediately prior to the effective time of the merger. Parent has agreed to provide, and to cause Trover, as the surviving corporation, to provide credit for years of service before the effective time of the merger (to the same extent each employee was entitled to credit before the effective time of the merger) under the comparable employee benefit plans providing benefits after the effective time of the merger and credit for any co-payments and deductibles paid prior to the effective time of the merger and to waive all pre-existing conditions, exclusions and waiting periods. These provisions do not provide any guarantee of continued employment.

Other Covenants

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Conditions to the Merger

We will complete the merger only if the conditions specified in the merger agreement are either satisfied or waived. Some of the conditions are mutual, meaning that if the condition is not satisfied, neither party would be obligated to close the merger. Most of the conditions are in favor of only one of the parties, meaning that if the condition is not satisfied that party could waive the condition and the other party would remain obligated to close.

Mutual Conditions

The obligations of Trover, Parent and Acquisition Corp. to complete the merger are subject to the satisfaction or waiver at or prior to the effective time of each of the following:

Conditions to Parent and Acquisition Corp.’s Obligations

The obligations of Parent and Acquisition Corp. to complete the merger are subject to the satisfaction, or waiver by Parent, on or prior to the effective time of the following conditions:

Conditions to Trover’s Obligations

The obligation of Trover to effect the merger is subject to the satisfaction, or waiver by Trover, on or prior to the effective time, of the following conditions:

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Termination of the Merger Agreement

The merger agreement may be terminated before the effective time of the merger, whether before or after the stockholders of Trover have adopted the merger agreement and approved the merger:

Break-up Fees; Expense Reimbursement

Trover will be required to make payments to Parent if the merger agreement is terminated in certain circumstances. Those payments may include the reimbursement of expenses actually incurred by Parent and its financing sources (in an amount not to exceed $2.0 million), due shortly after termination, a termination fee of $1.0 million due upon termination and a fee of up to $2.0 million if and when we complete a transaction with another party. The payment

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amounts and situations under which they are required are set forth in the chart below. In no event can the aggregate of these payments exceed $4.0 million.

Payments Possibly Required After a Termination of the Merger Agreement