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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934 (Amendment No. ________)*
USWeb Corporation
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(Name of Issuer)
Common Stock, $.001 par value
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(Title of Class of Securities)
917327 10 8
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(CUSIP Number)
Carlton H. Baab
Executive Vice President and
Chief Financial Officer
CKS Group, Inc.
10441 Bandley Drive
Cupertino, CA 95014
(408) 366-5100
with a copy to:
Rod J. Howard, Esq.
Gray Cary Ware & Freidenrich LLP
400 Hamilton Avenue
Palo Alto, CA 94301
(650) 833-2496
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
September 1, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of (S)(S) 240.13d-1(e), 240.13d-1(f) or 240.13, check the
following box [_] .
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See (S) 240.13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 2 OF 12 PAGES
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1 |NAME OF REPORTING PERSON
|S. S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
|
|CKS Group, Inc. IRS Identification No. 77-0385435
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2 |CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
| (a)[_]
| (b)[_]
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3 |SEC USE ONLY
|
|
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4 |SOURCE OF FUNDS*
|
|WC, BK, OO
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5 |CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
|ITEMS 2(d) or 2(e)
|
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6 |CITIZENSHIP OR PLACE OF ORGANIZATION
|
|Delaware
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NUMBER OF SHARES | 7 |SOLE VOTING POWER
BENEFICIALLY | |
| | 8,993,658 (1) (2)
|--------|-----------------------------------------------
OWNED BY | 8 |SHARED VOTING POWER
BY EACH | |
REPORTING | | 12,576,708 (2) (3)
|--------|-----------------------------------------------
PERSON | 9 |SOLE DISPOSITIVE POWER
WITH | |
| | 8,993,658 (1) (2)
|--------|-----------------------------------------------
| 10 |SHARED DISPOSITIVE POWER
| |
| |0
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11 |AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
|
| 21,570,366 (1) (2) (3)
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12 |CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|(See Instructions)
|[_]
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13 |PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| 39.3% (2) (4)
|
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14 |TYPE OF REPORTING PERSON (See Instructions)
|
|CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 3 OF 12 PAGES
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(1) Of the shares of common stock, par value $.001 per share ("Common Stock"),
of USWeb Corporation (the "Issuer") covered by this report, as of September
1, 1998, approximately 8,993,658 are purchasable by CKS Group, Inc. ("CKS
Group") upon exercise of an option (the "Option") granted to CKS Group
pursuant to the USWeb Stock Option Agreement dated as of September 1, 1998
between the Issuer and CKS Group (the "Stock Option Agreement") and
described in Item 4 of this Schedule 13D. The number of shares indicated
represents 19.9% of the total outstanding shares of Common Stock as of
September 1, 1998, excluding shares issuable upon exercise of the Option.
The exact number of shares of Common Stock purchasable by CKS Group upon
exercise of the Option is equal to 19.9% of the total number of shares of
Common Stock outstanding upon exercise of the Option (the "Option Shares").
The Option only may be exercised upon the occurrence of certain events,
none of which has occurred as of the date hereof. Prior to the exercise of
the Option, CKS Group is not entitled to any rights as a stockholder of the
Issuer as to the Option Shares, and CKS Group expressly disclaims
beneficial ownership of the Option Shares. Prior to acquiring any of the
Option Shares pursuant to the terms of the Option, CKS Group is required to
execute and deliver to Issuer a proxy authorizing Issuer to vote and
execute written consents with respect to all Option Shares held by CKS
Group for and against all matters submitted to a vote of stockholders in
the same proportion as all other shares of Common Stock.
(2) Based on beneficial ownership and capitalization information provided by
USWeb to CKS Group.
(3) As an inducement to CKS Group to enter into the Agreement and Plan of
Reorganization (the "Merger Agreement") dated as of September 1, 1998 by
and among Issuer, CKS Group and USWeb Acquisition Corporation 134 ("Sub"),
SOFTVEN No. 2 Investment Enterprise Partnership and Crosspoint Venture
Partners (stockholders of USWeb), and each director and executive officer
of the Issuer as listed on Schedule A hereto entered into USWeb Voting
Agreements (the "Voting Agreements") with CKS Group pursuant to which such
directors, officers and significant stockholders irrevocably appointed the
directors of CKS Group as their lawful attorneys and proxies for certain
matters relating to the Merger (as defined in the Merger Agreement). Such
proxy gives the directors of CKS Group the limited right to vote all shares
of Common Stock held by the parties to the Voting Agreements in favor of
(i) amendment of Issuer's Certificate of Incorporation to increase its
authorized shares to allow for issuance of Common Stock by virtue of the
Merger, (ii) the issuance of shares of Common Stock by virtue of the
Merger, and (iii) amendment to Issuer's Certificate of Incorporation to
change USWeb's corporate name to Reinvent Communications, Inc. The number
of shares indicated includes an aggregate of approximately 700,000 shares
issued or issuable upon exercise of immediately exercisable stock options
(of which approximately 626,665 shares will be subject to a right of
repurchase in favor of USWeb as of the date 60 days after September 1,
1998 and 12,077 shares issuable upon exercise of warrants) by the
parties to the Voting Agreements. The names of the parties to the Voting
Agreements and the number of shares beneficially owned by each of them is
set forth in Schedule A hereto which is incorporated herein by reference.
Inasmuch as CKS Group's voting rights under the Voting Agreements are
limited solely to certain matters related to the Merger, and CKS Group has
no economic interest in or affirmative dispositive power over the shares of
Common Stock covered thereby, CKS Group expressly disclaims beneficial
ownership of the shares of Common Stock covered by the Voting Agreements.
(4) The percentage reflects the total number of shares of Common Stock that
would be outstanding as of Septmeber 1, 1998 giving effect to (i) the
issuance by the Issuer of 8,993,658 shares of Common Stock upon exercise of
the Option (ii) approximately 700,000 shares of Common Stock issued or
issuable upon exercise of immediately exercisable stock options (of which
approximately 626,665 shares will be subject to a right of repurchase in
favor of USWeb as of the date 60 days after September 1, 1998) by the
parties to the Voting Agreements and (iii) 12,077 shares issuable upon
exercise of warrants by the parties to the Voting Agreements.
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 4 OF 12 PAGES
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Item 1. Security and Issuer.
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This Schedule 13D relates to Common Stock of USWeb Corporation ("Issuer"), a
Delaware corporation. The principal executive offices of the Issuer are located
at 2880 Lakeside Drive, Suite 300, Santa Clara, CA 95054.
Item 2. Identity and Background.
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This Schedule 13D is filed by CKS Group, a Delaware corporation. CKS Group is
an international integrated marketing services and technology company.
During the last five years, CKS Group has not been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) and has not
been a party to a civil proceeding or a judicial or administrative body of
competent jurisdiction resulting in a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws, or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
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The exercise price per Option Share (as defined in Note 1 above) is equal to the
lower of (i) the closing price of Common Stock on the last trading day before
September 1, 1998 or (ii) the average closing price of Common Stock on the five
(5) trading days immediately prior to the first public announcement or
disclosure of a USWeb Alternative Proposal (as defined in Item 4 below). It
presently is anticipated that any purchases of Option Shares by CKS Group would
be made with funds generated by a combination of available working capital, bank
or other borrowings and/or the sale, in whole or in part, of Option Shares
pursuant to a net exercise provision in the Stock Option Agreement (as defined
in Note 1 above). Reference is hereby made to the Stock Option Agreement, which
is included as Exhibit 1 to this Schedule 13D, for the full text of its terms,
including the conditions upon which it may be exercised. The Stock Option
Agreement is incorporated herein by reference in its entirety. If the Merger (as
described in Item 4) is consummated pursuant to the Merger Agreement prior to
the exercise of the Option (as defined in Note 1 above), the Option will
terminate. No monetary consideration was paid by CKS Group to the Issuer for the
Option.
Item 4. Purpose of Transaction.
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MERGER AGREEMENT
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The Option was granted to CKS Group, and the Voting Agreements were entered
into, in connection with the execution of the Merger Agreement. Upon
consummation of the Merger pursuant to the Merger Agreement, which is subject to
the approval of the stockholders of CKS Group and the Issuer, expiration or
early termination of applicable waiting periods, and the satisfaction or waiver
of various other terms and conditions, Sub will be merged with and into CKS
Group. CKS Group will survive the Merger and become a wholly-owned subsidiary
of Issuer. At the effective time of the Merger (the "Effective Time") each
share of the CKS Group Common Stock then outstanding will be converted into the
right to receive 1.5 shares ("Exchange Ratio") of Common Stock (and a
proportionate cash payment in lieu of any fractional shares), and all
outstanding options or rights to acquire CKS Group Common Stock will be assumed
and converted into options to acquire shares of Common Stock as adjusted to
reflect the Exchange Ratio. The Merger Agreement provides that the Board of
Directors of Issuer will take all actions within its power to cause the Board of
Directors of Issuer, effective no later than one day following the Effective
Time of the Merger (as defined in the Merger Agreement), to include Mark D.
Kvamme and Thomas K. Suiter, who served on the Board of Directors of CKS Group
immediately prior to the Effective Time. If either Mr. Kvamme or Mr. Suiter
declines or is unable to serve on the Board of Directors of USWeb, then CKS
Group shall designate another person to serve on the Board of Directors
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 5 OF 12 PAGES
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of USWeb, which person must be reasonably acceptable to USWeb. In addition,
following the Merger, certain executive officers of the CKS Group will become
executive officers and key management employees of Issuer.
The foregoing summary of the Merger Agreement is qualified in its entirety by
reference to the copy of the Merger Agreement included as Exhibit 1 to this
Schedule 13D and incorporated herein in its entirety by reference.
STOCK OPTION AGREEMENT
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Subject to certain limitations, the Option is exercisable, in whole or in part,
at any time or from time to time after the occurrence of an event (an "Exercise
Event"). An Exercise Event will be deemed to have occurred and the Option will
become exercisable only under the following circumstances:
(1) from and after the commencement of a tender or exchange offer for twenty-
five percent (25%) or more of any class of Issuer outstanding capital stock;
(2) from and after the failure to obtain the required vote of USWeb
stockholders contemplated by the Merger Agreement upon a vote taken at a meeting
of USWeb stockholders duly convened therefor (or any adjournment thereof) if at
the time of such failure a USWeb Alternative Proposal shall have been publicly
announced or otherwise publicly disclosed;
(3) upon termination of the Merger Agreement by CKS Group if (i) the Board of
Directors or any committee thereof of the Issuer shall have withdrawn or
modified in a manner adverse to CKS Group its recommendation of approval of the
issuance of shares of Common Stock pursuant to the Merger, (ii) Issuer failed to
include in the Proxy Statement (as defined in the Merger Agreement) the
recommendation of the Board of Directors of Issuer in favor of approval of the
issuance of shares of Common stock pursuant to the Merger, (iii) in connection
with a Rule 14d-9 disclosure, the Board of Directors of Issuer took an action
other than a rejection of the Rule 14d-9 proposal, (iv) the Board of Directors
of Issuer or any committee thereof recommended any USWeb Alternative Proposal,
or (v) the Board of Directors of Issuer or any committee thereof resolved to do
any of the foregoing;
(4) upon termination of the Merger Agreement by Issuer (i) prior to approval of
the Merger by the USWeb stockholders, or (ii) in the case of a USWeb Superior
Proposal (as defined below) other than a USWeb Superior Proposal involving the
filing of a Registration Statement on Form S-4, following the earlier of (x)
three (3) days following the date of the Registration Statement (as defined in
the Merger Agreement) is declared effective pursuant to the Securities Act of
1933, as amended (the "Securities Act") by the Securities and Exchange
Commission (the "SEC"), or (y) sixty (60) days following September 1, 1998, if
the Board of Directors of Issuer recommends a USWeb Superior Proposal to the
stockholders of Issuer.
A "USWeb Alternative Proposal" means any inquiry, proposal or offer from any
person or "group" (as defined under Section 13(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the rules and regulations
thereunder) relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of Issuer or any of its subsidiaries (other than
the purchase of Issuer's products or services in the ordinary course of
business) or more than a 15% interest in the total outstanding voting securities
of Issuer or any of its subsidiaries or any tender offer or exchange offer that
if consummated would result in any person or "group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) beneficially
owning 15% or more of the total outstanding voting securities of Issuer or any
of its subsidiaries or any merger, consolidation, business combination, sale of
substantially all the assets, recapitalization, liquidation, dissolution or
similar transaction involving Issuer or any of its subsidiaries, other than (i)
the transactions contemplated by the Merger Agreement and (ii) any acquisition
by Issuer, provided that the business to be acquired, without taking any other
acquisition into account, would not constitute a "significant subsidiary" of
Issuer pursuant to the conditions specified in Rule 1-02(w) of SEC Regulation S-
X, substituting 20 percent for 10 percent
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 6 OF 12 PAGES
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each place it appears therein, and the aggregate number of shares of Common
Stock issued in connection with all acquisitions after the date of the Merger
Agreement and prior to the Effective Time do not exceed 5,000,000. A "USWeb
Superior Proposal" means any bona fide proposal made by a third party to
acquire, directly or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for consideration consisting of
cash and/or securities, more than 50% of the voting power of Common Stock or all
or substantially all of the assets of Issuer and otherwise on terms which the
Board of Directors of Issuer determines in its good faith judgment (after
consultation with a financial advisor of nationally recognized reputation) to be
more favorable to Issuer's stockholders than the Merger and for which financing,
to the extent required, is then committed or which, in the good faith judgment
of the Board of Directors of Issuer, is capable of being obtained by such third
party.
With certain exceptions, the Option terminates upon the occurrence of the
earlier of the following: (i) the Effective Time, (ii) sixty (60) days
following the termination of the Merger Agreement if an Exercise Event shall
have occurred on or prior to the date of such termination, (iii) the termination
of the Merger Agreement under circumstances which do not constitute an Exercise
Event, (iv) termination of the Merger Agreement by mutual consent duly
authorized by the Boards of Directors of Issuer and CKS Group, and (v)
termination of the Merger Agreement if a Governmental Entity (as defined in the
Merger Agreement) shall have issued an Order (as defined in the Merger
Agreement) having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, which Order is final and nonappealable; provided,
however, that with respect to the preceding clause (ii) to this sentence, the
Option exercise period is automatically extended for up to ten (10) business
days if exercise of the Option is prohibited or restrained for certain legal
reasons. The Option may not be exercised if CKS Group is in material breach of
covenants or agreements in the Merger Agreement.
At any time when the Option is exercisable and an event specified in Section
7.1(g) of the Merger Agreement shall have occurred and the USWeb Termination Fee
(as defined in the Merger Agreement) has become payable, CKS Group has the right
to "put" any or all Option Shares purchased under the Option back to the Issuer.
After any exercise of the Option by CKS Group, the Issuer would have certain
"first refusal" rights with respect to the Option Shares acquired by CKS Group.
Under these "first refusal" rights, the Issuer has the right to repurchase all
(but not less than all) Option Shares acquired by CKS Group.
The aggregate net proceeds receivable by CKS Group from sales of Option Shares
(after subtracting the exercise price paid for such Option Shares) and the
aggregate amount receivable by CKS Group under the termination fee provisions of
the Merger Agreement is capped at a total of $18 million; provided, however,
that the maximum amount receivable by CKS Group pursuant to the "put" provisions
of the Stock Option Agreement is capped at an aggregate of $12 million, plus the
exercise price paid for such shares acquired pursuant to the Stock Option
Agreement, minus any termination fees paid USWeb to CKS Group pursuant to the
Merger Agreement.
The Stock Option Agreement gives CKS Group certain rights to have the Option
Shares registered under the Securities Act for sale in a public offering. The
registration rights take effect after the termination of the Merger Agreement
and are subject to conditions and limitations.
The foregoing summary of the Stock Option Agreement is qualified in its entirety
by reference to the copy of the Stock Option Agreement included as Exhibit 2 to
this Schedule 13D and incorporated herein in its entirety by reference.
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 7 OF 12 PAGES
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VOTING AND HOLDER AGREEMENTS
- ----------------------------
As an inducement to CKS Group to enter into the Merger Agreement by and among
Issuer, CKS Group and Sub, SOFTVEN No. 2 Investment Enterprise Partnership and
Crosspoint Venture Partners (stockholders of Issuer), and each director and
executive officer of the Issuer entered into USWeb Voting Agreements (the
"Voting Agreements") with CKS Group pursuant to which such directors, officers
and significant stockholders have irrevocably appointed the directors of CKS
Group as their lawful attorneys and proxies for certain matters relating to the
Merger (as defined in the Merger Agreement). Such proxy gives CKS Group the
limited right to vote all shares of Common Stock held by the parties to the
Voting Agreements in favor of (i) adoption and approval of the Merger Agreement
and approval of the Merger, (ii) amendment of Issuer's Certificate of
Incorporation to increase its authorized shares to allow for issuance of Common
Stock by virtue of the Merger, (iii) the issuance of shares of Common Stock by
virtue of the Merger, and (iv) amendment to Issuer's Certificate of
Incorporation to change USWeb's corporate name to Reinvent Communications, Inc.
The number of shares indicated includes an aggregate of approximately 700,000
shares issued or issuable upon exercise of immediately exercisable stock options
(of which 626,665 shares will be subject to a right of repurchase in favor of
USWeb as of the date 60 days after September 1, 1998 and 12,077 shares issuable
upon exercise of warrants) by the parties to the Voting Agreements. The names of
the parties to the Voting Agreements and the number of shares beneficially owned
by each of them is set forth in Schedule A hereto which is incorporated herein
by reference. The Voting Agreements terminate upon the earlier to occur of the
Effective Time of the Merger and the termination of the Merger Agreement.
Inasmuch as CKS Group's voting rights under the Voting Agreements are limited
solely to certain matters related to the Merger, and CKS Group has no economic
interest in or affirmative dispositive power over the shares of Common Stock
covered thereby, CKS Group expressly disclaims beneficial ownership of the
shares of Common Stock. The foregoing summary of the Voting Agreements is
qualified in its entirety by reference to the copy of the form of Voting
Agreement included as Exhibit 4 to this Schedule 13D and incorporated herein in
its entirety by reference.
As a further inducement to CKS Group to enter into the Merger Agreement, SOFTVEN
No. 2 Investment Enterprise Partnership and Crosspoint Venture Partners
(stockholders of Issuer) and each director and executive officer of the Issuer
named on Schedule A entered into agreements (the "USWeb Holding Agreements"),
pursuant to which such directors, officers and significant stockholders have
agreed to certain restrictions on their ability to sell their shares of Common
Stock, except to the extent permitted by accounting rules relating to pooling of
interests. Inasmuch as CKS Group's voting rights under the Voting Agreements are
limited solely to certain matters related to the Merger, and CKS Group has no
economic interest in or affirmative dispositive power over the shares of Common
Stock covered by the Voting Agreements or the USWeb Holding Agreements, CKS
Group expressly disclaims beneficial ownership of such shares of Common Stock.
The foregoing summary of the USWeb Holding Agreements is qualified in its
entirety by reference to the copy of the form of USWeb Holding Agreement
included as Exhibit 6 to this Schedule 13D and incorporated herein in its
entirety by reference.
RELATED AGREEMENTS
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As an inducement to the Issuer to enter into the Merger Agreement, Issuer and
CKS Group also have entered into the CKS Group Option, which entitles the Issuer
to purchase a number of shares of CKS Group Common Stock equal to up to 19.9% of
the total number of shares of CKS Group Common Stock outstanding on the date of
exercise of the CKS Group Option. Based on the number of shares of CKS Group
Common Stock outstanding as of September 1, 1998, the CKS Group Option would be
exercisable for up to approximately 3,074,681 shares of CKS Group Common Stock.
The CKS Group Option is exercisable following the announcement of an alternative
business combination proposal involving CKS Group and certain further triggering
events. Pursuant to the terms of the CKS Group Option, the exercise price per
share of CKS Group Common Stock is payable in cash and is equal to the lower of
(i) the Exchange Ratio times the closing price of Common Stock on the last
trading day before the date of the CKS Group Option or (ii) the average closing
price of CKS Group Common Stock on the five (5) trading days immediately prior
to the first public announcement or disclosure of a CKS
<PAGE>
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 8 OF 12 PAGES
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Alternative Proposal. Except with respect to the exercise price, the other
rights of the Issuer under the CKS Group Option are substantially parallel to
those of CKS Group under the Stock Option Agreement. The foregoing summary of
the CKS Group Option is qualified in its entirety by reference to the copy of
the CKS Group Option included as Exhibit 3 to this Schedule 13D and incorporated
herein in its entirety by reference.
As a further inducement to the Issuer to enter into the Merger Agreement, the
Interpublic Group of Companies, Inc. (a stockholder of CKS Group) and each
director and certain of executive officer of CKS Group entered into: (i) voting
agreements (the "CKS Group Voting Agreements"), the terms of which are
substantially parallel to the Voting Agreements entered into by the officers,
directors and significant stockholders of the Issuer; and (ii) holding
agreements (the "CKS Group Holding Agreements") restricting their ability to
sell or otherwise dispose of shares of Common Stock received in the Merger or
shares of CKS Common Stock except to the extent permitted by Rule 145 under the
Securities Act and except as permitted by accounting rules relating to pooling
of interests. The foregoing summaries of the CKS Group Voting Agreements and
CKS Group Holding Agreements are qualified in their entirety by reference to the
copies of the forms of CKS Group Voting Agreement and CKS Group Holding
Agreements included as Exhibits 5 and 7, respectively, and incorporated herein
in their entirety by reference.
Other than as described above, CKS Group currently has no plans or proposals
which relate to, or may result in, any of the matters listed in Items 4(a) - (j)
of Schedule 13D (although CKS Group reserves the right to develop such plans).
Item 5. Interest in Securities of the Issuer.
- ------ ------------------------------------
As a result of the Option and the Voting Agreements, CKS Group may be deemed to
"beneficially own" (as such term is defined in (S) 240.13d-3) 21,570,336
shares of the Common Stock, which would represent approximately 39.3% of the
shares of Common Stock outstanding after the exercise in full of the Option and
all stock options held by parties to the Voting Agreements (based on the number
of shares of Common Stock outstanding on September 1, 1998). Upon exercise of
the Option in accordance with its terms, CKS Group would have no voting power
and only limited dispositive power over shares acquired upon such exercise.
8,993,658 of the shares of Common Stock described herein are subject to the
Option, which is not currently exercisable. 12,576,708 of the shares of Common
Stock described herein (including approximately 700,000 shares of Common Stock
issued or issuable upon exercise of immediately exercisable stock options (of
which 626,665 shares will be subject to a right of repurchase in favor of USWeb
as of the date 60 days after September 1, 1998 and 12,077 shares issuable
upon exercise of warrants) are subject to the Voting Agreements, which grant CKS
Group only limited voting rights and no dispositive power over such shares.
Nothing herein shall be deemed to be an admission by CKS Group as to the
beneficial ownership of any shares of Common Stock, and CKS Group disclaims
beneficial ownership of all shares of Common Stock of the Issuer issuable upon
exercise of the Option and subject to the Voting Agreements.
Item 6. Contracts, Arrangements, Understandings or Relationships
- ------ --------------------------------------------------------
with Respect to Securities of the Issuer.
----------------------------------------
Other than the Merger Agreement, Stock Option Agreement, Voting Agreements and
USWeb Holder Agreements, to the best of the knowledge of CKS Group, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among CKS Group and any person with respect to any securities of Issuer.
<PAGE>
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 9 OF 12 PAGES
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Item 7. Material to be filed as Exhibits.
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EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.* Agreement and Plan of Reorganization dated as of September 1,
1998 by and among USWeb Corporation, USWeb Acquisition
Corporation 134 and CKS Group, Inc.
2.* USWeb Corporation Stock Option Agreement, dated as of September 1,
1998.
3.* CKS Group, Inc. Stock Option Agreement, dated September 1, 1998.
4.* Form of USWeb Voting Agreement, dated as of September 1, 1998.
5.* Form of CKS Voting Agreement, dated as of September 1, 1998.
6. Form of USWeb Holder Agreement, dated as of September 1, 1998.
7. Form of CKS Group, Inc. Holder Agreement, dated as of September 1,
1998.
____________
*Incorporated by reference to Current Report on Form 8-K filed by CKS Group on
September 11, 1998.
<PAGE>
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 10 OF 12 PAGES
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: September 11, 1998 By: /s/ CARLTON H. BAAB
_____________________________
Carlton H. Baab
Executive Vice President and
Chief Financial Officer
<PAGE>
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CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 11 OF 12 PAGES
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SCHEDULE A
----------
NAME AND ADDRESS
- ------------------------------------------ AMOUNT OF SHARES
BENEFICIALLY OWNED(1)
-------------------------
SOFTVEN No. 2 Investment Enterprise 5,458,324
Partnership
24 - Nihonbashi - Hakozakicho
Chuo-Ku
Tokyo, 103 Japan
Crosspoint Ventures Partners 1,543,719
18552 MacArthur Blvd., Suite 400
Irvine, CA 92612
Joseph Firmage 816,866
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Tobin Corey 610,772
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Carolyn V. Aver 330,000
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Sheldon Laube 562,449
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Jeffrey Ballowe 44,167
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
James E. Daley 35,000
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
<PAGE>
- ----------------------- ----------------------
CUSIP NO. 917327 10 8 | SCHEDULE 13D | PAGE 12 OF 12 PAGES
- ----------------------- ----------------------
James Heffernan 396,609
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Robert A. Hoff 1,543,719 (2)
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Joseph A. Marengi 30,000
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Gary Rieschel 5,458,324 (3)
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Barry Rubenstein 2,723,802
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
Klaus Schwab 25,000
c/o USWeb Corporation
2880 Lakeside Drive, Suite 300
Santa Clara, CA 95054
- -------------------
(1) Includes shares issued or issuable upon exercise of immediately exercisable
stock options of which a portion of such shares is subject to a right of
repurchase in favor of USWeb.
(2) Includes 1,543,719 shares beneficially owned by Crosspoint Venture
Partners. Mr. Hoff is a general partner of Crosspoint Venture Partners.
(3) Includes 5,458,324 shares beneficially owned by Softven No. 2 Investment
Enterprise Partnership. Mr. Rieschel is Executive Managing Director of
SOFTBANK Holdings, an affiliate of SOFTVEN No. 2 Investment Enterprise
Partnership.
<PAGE>
EXHIBIT 6
USWEB CORPORATION HOLDER AGREEMENT
THIS USWEB CORPORATION HOLDER AGREEMENT ("Agreement") dated as of August
---------
31, 1998, is entered into among USWeb Corporation, a Delaware corporation
("USWeb"), the undersigned Holder ("Holder") of USWeb and CKS Group, Inc., a
- ------- ------
Delaware corporation ("CKS").
USWeb and CKS have entered into an Agreement and Plan of Reorganization
("Merger Agreement") dated August 31, 1998 pursuant to which a subsidiary of
- ------------------
USWeb will merge with and into CKS ("Merger"), and CKS will become a subsidiary
------
of USWeb (capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Merger Agreement).
Pursuant to the Merger, at the Effective Time the outstanding shares of
CKS Common Stock, including any shares owned by Holder, will be converted into
the right to receive shares of Common Stock of USWeb.
It is intended that the Merger will constitute a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and that it will be a condition to effectiveness of the Merger
----
that legal counsel for each of CKS and USWeb will have delivered written
opinions to such effect.
The execution and delivery of this Agreement by Holder is a material
inducement to CKS to enter into the Merger Agreement.
Holder has been advised that Holder may be deemed to be an "Holder" of
USWeb, as the term "Holder" is used (i) for purposes of paragraphs (c) and (d)
of Rule 145 of the Rules and Regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") and (ii) in the
Commission's Accounting Series Releases 130 and 135, as amended, although
nothing contained herein shall be construed as an admission by Holder that
Holder is in fact an Holder of USWeb.
NOW, THEREFORE, intending to be legally bound, the parties hereby agree
as follows:
1. Acknowledgments by Holder. Holder acknowledges and understands that
---------------
the representations, warranties and covenants by Holder set forth herein will be
relied upon by CKS, USWeb, and their respective Holders and counsel, and that
substantial losses and damages may be incurred by these persons if Holder's
representations, warranties or covenants are breached. Holder has carefully read
this Agreement and the Merger Agreement and has had the opportunity to discuss
the requirements of this Agreement with his or her professional advisors, who
are qualified to advise him or her with regard to such matters.
<PAGE>
2. Covenants Related to Pooling of Interests. During the period
-----------------------------------------
prescribed by Staff Accounting Bulletin No. 65, Holder will not sell, exchange,
transfer, pledge, distribute, make any gift or otherwise dispose of or grant any
option, establish any "short" or put-equivalent position with respect to or
enter into any similar transaction (through derivatives or otherwise) intended
to reduce or having the effect, directly or indirectly, of reducing Holder's
risk relative to any shares of USWeb Common Stock or CKS Common Stock
beneficially owned presently or subsequently acquired. USWeb may, at its
discretion, place a stop transfer notice consistent with the foregoing with its
transfer agent with respect to the certificates. Notwithstanding the foregoing,
Holder is entitled to sell or dispose of shares so long as such sale or
disposition is in accordance with the "de minimis" test set forth in Commission
Staff Accounting Bulletin No. 76; provided, that Holder has first obtained
--------
USWeb's prior written approval of such sale or disposition (not to be
unreasonably withheld).
3. Beneficial Ownership of Stock. Except for USWeb Common Stock and
-----------------------------
CKS Common Stock and warrants and options to purchase USWeb or CKS Common Stock
set forth below the signatures below, Holder does not beneficially own any
shares of USWeb or CKS Common Stock or any other equity securities of USWeb or
CKS or any options, warrants or other rights to acquire any equity securities of
USWeb or CKS.
4. Miscellaneous.
-------------
(a) For the convenience of the parties hereto, this Agreement may
be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same document.
(b) This Agreement shall be enforceable by, and shall inure to the
benefit of and be binding upon, the parties hereto and their respective
successors and assigns. As used herein, the term "successors and assigns" shall
mean, where the context so permits, heirs, executors, administrators, trustees
and successor trustees, and personal and other representatives.
(c) This Agreement shall be governed by and construed, interpreted
and enforced in accordance with the internal laws of the State of Delaware.
(d) If a court of competent jurisdiction determines that any
provision of this Agreement is not enforceable or enforceable only if limited in
time or scope, this Agreement shall continue in full force and effect with such
provision stricken or so limited.
(e) Counsel to the parties to the Agreement shall be entitled to
rely upon this Agreement as appropriate.
(f) This Agreement shall not be modified or amended, or any right
hereunder waived or any obligation excused, except by a written agreement signed
by both parties.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth on the first page of this Agreement.
CKS GROUP, INC. USWEB CORPORATION
By:_______________________ By:_________________________________
Title:____________________ Title:______________________________
HOLDER
By:_________________________________
Name of Holder:_____________________
Name of Signatory (if different from
name of Holder):____________________
Title of Signatory
(if applicable):____________________
CKS shares beneficially owned: USWeb shares beneficially owned:
None None
***USWEB CORPORATION HOLDER AGREEMENT***
-3-
<PAGE>
EXHIBIT 7
CKS GROUP, INC. HOLDER AGREEMENT
THIS CKS GROUP, INC. HOLDER AGREEMENT ("Agreement") dated as of
September 1, 1998, among USWeb Corporation, a Delaware corporation ("USWeb"),
the undersigned stockholder ("Holder") of CKS Group, Inc., a Delaware
corporation ("CKS") and CKS.
RECITALS
USWeb and CKS have entered into an Agreement and Plan of Reorganization
("Merger Agreement") dated September 1, 1998 pursuant to which a subsidiary of
USWeb will merge with and into CKS ("Merger"), and CKS will become a subsidiary
of USWeb (capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Merger Agreement).
Pursuant to the Merger, at the Effective Time outstanding shares of CKS
Common Stock, including any shares owned by Holder, will be converted into the
right to receive shares of Common Stock of USWeb.
It is intended that the Merger will constitute a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code of 1986 as amended
(the "Code"), and that it will be a condition to effectiveness of the Merger
that legal counsel for each of CKS and USWeb will have delivered written
opinions to such effect.
Holder has been advised that Holder may be deemed to be an "affiliate"
of CKS, as the term "affiliate" is used (i) for purposes of paragraphs (c) and
(d) of Rule 145 of the Rules and Regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") and (ii) in the
Commission's Accounting Series Releases 130 and 135, as amended, although
nothing contained herein shall be construed as an admission by Holder that
Holder is in fact an affiliate of CKS.
NOW, THEREFORE, intending to be legally bound, the parties hereby agree
as follows:
1. Acknowledgments by Holder. Holder acknowledges and understands
-------------------------
that the covenants by Holder set forth herein will be relied upon by USWeb, CKS,
and their respective accountants and counsel.
2. Compliance with Rule 145 and the Securities Act.
-----------------------------------------------
(a) Holder has been advised that (i) the issuance of shares of
USWeb Common Stock in connection with the Merger is expected to be effected
pursuant to a Registration Statement on Form S-4 to be filed to register the
shares of USWeb Common Stock under the Securities Act of
<PAGE>
1933, as amended (the "Securities Act"), and as such will not be deemed
"restricted securities" within the meaning of Rule 144 promulgated under the
Securities Act, and resale of such shares will not be subject to any
restrictions other than as set forth in Rule 145 under the Securities Act (which
will not apply if such shares are otherwise transferred pursuant to an effective
registration statement under the Securities Act or an appropriate exemption from
registration), and (ii) Holder may be deemed to be an affiliate of CKS. Holder
accordingly agrees not to sell, transfer or otherwise dispose of any USWeb
Common Stock issued to Holder in the Merger unless (i) such sale, transfer or
other disposition is made in conformity with the requirements of Rule 145(d)
promulgated under the Securities Act, or (ii) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Securities Act or an appropriate exemption from registration, or (iii) Holder
delivers to USWeb a written opinion of counsel, reasonably acceptable to USWeb
in form and substance, that such sale, transfer or other disposition is
otherwise exempt from registration under the Securities Act.
(b) USWeb will give stop transfer instructions to its transfer
agent with respect to any USWeb Common Stock received by Holder pursuant to the
Merger and there will be placed on the certificates representing such Common
Stock, or any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 APPLIES AND MAY ONLY BE
TRANSFERRED IN CONFORMITY WITH RULE 145(d) OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR IN ACCORDANCE WITH A WRITTEN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER IN FORM AND
SUBSTANCE, THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED."
The legend set forth above shall be removed (by delivery of a substitute
certificate without such legend) and USWeb shall so instruct its transfer agent,
if Holder delivers to USWeb (i) satisfactory written evidence that the shares
have been sold in compliance with Rule 145 (in which case, the substitute
certificate will be issued in the name of the transferee), or (ii) an opinion of
counsel, in form and substance reasonably satisfactory to USWeb, to the effect
that public sale of the shares by the holder thereof is no longer subject to
Rule 145.
3. Covenants Related to Pooling of Interests. During the period
-----------------------------------------
prescribed by Staff Bulletin No. 65, Holder will not sell, exchange, transfer,
pledge, distribute, make any gift or otherwise dispose of or grant any option,
establish any "short" or put-equivalent position with respect to or enter into
any similar transaction (through derivatives or otherwise) intended to reduce or
having the effect, directly or indirectly, of reducing Holder's risk relative to
any shares of CKS Common Stock, or shares of USWeb Common Stock beneficially
owned presently or subsequently
-2-
<PAGE>
acquired. USWeb may, at its discretion, cause a restrictive legend relating to
the foregoing effect to be placed on USWeb Common Stock certificates issued to
Holder in the Merger and place a stop transfer notice consistent with the
foregoing with its transfer agent with respect to the certificates.
USWeb agrees to use its commercially reasonable best efforts to publish,
in accordance with ASR 135 and other applicable accounting rules, as promptly as
practicable following the Merger, consolidated financial results covering at
least 30 days of post-Merger combined operations of USWeb and CKS.
Notwithstanding anything to the contrary in this Agreement, Holder may
sell or dispose of up to 10% of its shares of CKS Common Stock held as of
September 1, 1998; provided that the aggregate amount of shares of CKS Common
Stock sold or disposed of by all affiliates of CKS from the date of this
Agreement through the date the combined company first publishes earnings results
for a period including at least 30 days of combined operations does not exceed a
number of shares equal to one percent (1%) of (i) the outstanding shares of CKS
Common Stock as of September 1, 1998 plus (ii) the number of shares subject to
outstanding warrants and options (calculated on the "treasury method") as of
that date, such shares to be allocated 125,000 to The Interpublic Group of
Companies, Inc. and the remainder to all other affiliates of CKS. Shares sold by
Holder pursuant to the immediately preceding sentence shall be excluded from the
voting obligations under the CKS Voting Agreement dated as of September 1, 1998
between USWeb Corporation and Holder and shall be excluded from the Irrevocable
Proxy delivered by Holder to USWeb Corporation pursuant to such voting
agreement. Upon the Effective Time, the registration rights granted to The
Interpublic Group of Companies, Inc. in the Shareholder Rights Agreement dated
January 27, 1995 shall terminate automatically and without further action by the
parties hereto and thereto.
With respect to shares of USWeb Common Stock received by Holder pursuant
to the Merger, if Holder is unable to sell such shares pursuant to SEC Rule 145
in any calendar quarter, the Holder shall be entitled to registration rights on
a pari passu basis with the rights of Holders under the USWeb Corporation
Amended and Restated Investor Rights Agreement dated November 7, 1998, a copy of
which is attached hereto. Such registration rights shall expire two years
subsequent to the Effective Time of the Merger.
4. Beneficial Ownership of Stock. Except for USWeb Common Stock and
-----------------------------
CKS Common Stock and warrants and options to purchase USWeb or CKS Common Stock
set forth below the signatures below, Holder does not beneficially own any
shares of USWeb or CKS Common Stock or any other equity securities of USWeb or
CKS or any options, warrants or other rights to acquire any equity securities of
USWeb or CKS.
5. Miscellaneous.
-------------
(a) For the convenience of the parties hereto, this Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same document.
-3-
<PAGE>
(b) This Agreement shall be enforceable by, and shall inure to
the benefit of and be binding upon, the parties hereto and their respective
successors and assigns. As used herein, the term "successors and assigns" shall
mean, where the context so permits, heirs, executors, administrators, trustees
and successor trustees, and personal and other representatives.
(c) This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the internal laws of the State of
Delaware.
(d) If a court of competent jurisdiction determines that any
provision of this Agreement is not enforceable or enforceable only if limited in
time or scope, this Agreement shall continue in full force and effect with such
provision stricken or so limited.
(e) Counsel to the parties to the Agreement shall be entitled to
rely upon this Agreement as appropriate.
(f) This Agreement shall not be modified or amended, or any
right hereunder waived or any obligation excused, except by a written agreement
signed by both parties.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth on the first page of this Agreement.
CKS GROUP, INC. USWEB CORPORATION
By:________________________ By:________________________
Title:_____________________ Title:_____________________
HOLDER
By:________________________________
Name of Holder:____________________
Name of Signatory (if different
from name of Holder):______________
Title of Signatory
(if applicable):___________________
CKS shares beneficially owned: USWeb shares beneficially owned:
________ shares of Common Stock ___________ shares of Common Stock
CKS shares subject to outstanding: USWeb shares subject to outstanding
options:
options: ________ shares of Common _______________ shares of Common Stock
Stock
***CKS GROUP, INC. HOLDER AGREEMENT***
