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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_]Preliminary Proxy Statement [_]Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
LYCOS, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
LYCOS, INC.
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(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (check the appropriate box):
[X]No fee required
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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LYCOS, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
AUGUST 13, 1998
To Our Stockholders:
A Special Meeting of the Stockholders of Lycos, Inc. (the "Company") will be
held on Thursday, August 13, 1998, at 8:30 A.M., at the offices of the
Company, 400-2 Totten Pond Road, Waltham, Massachusetts, for the following
purposes:
1. To consider and act upon a proposal to approve an amendment to the
Company's Restated Certificate of Incorporation to increase the number
of authorized shares of Common Stock, par value $.01 per share, from
40,000,000 shares to 100,000,000 shares.
2. To consider and act upon any other business which may properly come
before the meeting.
The Board of Directors has fixed the close of business on July 17, 1998 as
the record date for the meeting. All stockholders of record on that date are
entitled to notice of and to vote at the meeting.
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING IN PERSON.
By order of the Board of Directors
Edward M. Philip,
Chief Operating Officer,
Chief Financial Officer and
Secretary
Waltham, Massachusetts
July 24, 1998
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LYCOS, INC.
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Lycos, Inc. (the "Company") for use at
the Special Meeting of Stockholders to be held on Thursday, August 13, 1998,
at the time and place set forth in the notice of the meeting, and at any
adjournments thereof. The approximate date on which this Proxy Statement and
form of proxy are first being sent to stockholders is July 24, 1998.
If the enclosed proxy is properly executed and returned, it will be voted in
the manner directed by the stockholder. If no instructions are specified with
respect to the matter to be acted upon, proxies will be voted in favor
thereof. Any person giving the enclosed form of proxy has the power to revoke
it by voting in person at the meeting, or by giving written notice of
revocation to the Secretary of the Company at any time before the proxy is
exercised.
The holders of a majority in interest of all stock issued, outstanding, and
entitled to vote are required to be present in person or be represented by
proxy at the meeting in order to constitute a quorum for transaction of
business. The affirmative vote of the holders of at least a majority of the
shares of Common Stock voting in person or by proxy at the meeting is required
to approve the proposed amendment of the Restated Certificate of
Incorporation.
The Company will bear the cost of this solicitation. It is expected that the
solicitation will be made primarily by mail, but regular employees or
representatives of the Company (none of whom will receive any extra
compensation for their activities) may also solicit proxies by telephone,
telegraph and in person and arrange for brokerage houses and other custodians,
nominees and fiduciaries to send proxies and proxy materials to their
principals at the expense of the Company.
The Company's principal executive offices are located at 400-2 Totten Pond
Road, Waltham, Massachusetts 02451 telephone number (781) 370-2700.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on July 17, 1998, are
entitled to notice of and to vote at the meeting. On that date, the Company
had outstanding and entitled vote 19,144,033 shares of Common Stock, par value
of $.01 per share ("Common Stock"). Each outstanding share of the Company's
Common Stock entitles the record holder to one vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of June 30, 1998 (i) by each person
who is known by the Company to be the beneficial owner of more than 5% of the
Company's Common Stock, (ii) by each director of the Company, (iii) by the
Chief Executive Officer and the next four most highly compensated executive
officers of the Company (the "Named Executive Officers") who beneficially held
shares of the Company's Common Stock as of such date and (iv) by all executive
officers and directors of the Company as a group. Except as otherwise noted,
each person maintains a business address c/o Lycos, Inc., 400-2 Totten Pond
Road, Waltham, Massachusetts 02451, and has sole voting and investment power
over the shares shown as beneficially owned, except to the extent authority is
shared by spouses under applicable law. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission. In
computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of Common Stock subject to options
held by that person that are
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currently exercisable, or become exercisable within 60 days following June 30,
1998, are deemed outstanding. However, such shares are not deemed outstanding
for purposes of computing the percentage ownership of any other person. As of
June 30, 1998, there were 19,090,913 shares of Common Stock outstanding.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OWNERSHIP CLASS
-------------------- ----------
<S> <C> <C>
CMG Information Services, Inc. (1)............. 5,598,554 29.4%
100 Brickstone Square
Andover, MA 01810
FMR Corp. (2).................................. 2,002,737 10.5%
82 Devonshire Street
Boston, MA 02109
DIRECTORS
David S. Wetherell (3)......................... 7,504 *
c/o CMG Information Services, Inc.
100 Brickstone Square
Andover, MA 01810
Daniel J. Nova................................. 9,668 *
c/o Highland Capital Partners
Two International Place
Floor 22
Boston, MA 02110
John M. Connors, Jr. (4)....................... 6,666 *
c/o Hill, Holliday, Connors, Cosmopulos, Inc.
200 Clarendon Street
Boston, MA 02116
Richard H. Sabot (5)........................... 85,278 *
c/o Tripod, Inc.
160 Water Street
Williamstown, MA 01267
NAMED EXECUTIVE OFFICERS
Robert J. Davis (6)............................ 213,300 1.1%
Edward M. Philip (7)........................... 36,206 *
Jan R. Horsfall (8)............................ 21,000 *
Jeffrey J. Crown (9)........................... 2,000 *
David G. Peterson (10)......................... 8,000 *
All executive officers and directors as a group 6,019,176 31.1%
(12 persons) (11).............................
</TABLE>
________
(1) Includes 3,720,235 shares held by CMG@Ventures I, L.L.C. and 1,878,319
shares held by CMGI. Each of CMG@Ventures, Inc., the managing member of
CMG@Ventures I, L.L.C., Mr. Wetherell, Chairman of the Board, President,
Chief Executive Officer and Secretary of CMGI, an executive officer of
CMG@Ventures, Inc. and a member of CMG@Ventures I, L.L.C., also may be
deemed to be a beneficial owner of these 5,598,554 shares of Common Stock.
CMGI, the sole stockholder of CMG@Ventures, Inc., may be deemed to be the
beneficial owner of the 3,720,235 shares held by CMG@Ventures I, L.L.C.
Each of CMG@Ventures, Inc., CMGI and Mr. Wetherell disclaims beneficial
ownership except to the extent of his or its pecuniary interest. Includes
481,648 shares of Common Stock which CMG@Ventures I, L.L.C.
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has agreed to sell to the Company upon the exercise of options granted
under the Company's 1995 Stock Option Plan.
(2) According to Schedule 13G filed with the Securities and Exchange
Commission in January 1998.
(3) Includes 6,975 shares held by a trust for the benefit of Mr. Wetherell's
children. Mr. Wetherell may also be deemed to be the beneficial owner of
the 3,720,235 shares of Common Stock held by CMG@Ventures I, L.L.C. and
the 1,878,319 shares of Common Stock held by CMGI, by virtue of his
interest as a member of CMG@Ventures, his positions as an executive
officer of CMGI and CMG@Ventures, Inc., as well as his stockholder
interest in CMGI. Mr. Wetherell disclaims beneficial ownership of such
shares except to the extent of his pecuniary interest.
(4) Represents options to acquire 6,666 shares of Common Stock which are
currently exercisable or become exercisable within 60 days.
(5) Includes options to acquire 12,159 shares of Common Stock which are
currently exercisable or become exercisable within 60 days. In addition,
Mr. Sabot holds options to purchase 4,054 shares of Common Stock which
become exercisable after 60 days.
(6) Includes options to acquire 213,300 shares of Common Stock which are
currently exercisable or become exercisable within 60 days. In addition,
Mr. Davis holds options to purchase 208,200 shares of Common Stock which
become exercisable after 60 days.
(7) Includes 1,000 shares of Common Stock held by Mr. Philip and options to
acquire 35,206 shares of Common Stock which are currently exercisable or
become exercisable within 60 days. In addition, Mr. Philip holds options to
purchase 180,146 shares of Common Stock which become exercisable after 60
days.
(8) Includes options to acquire 21,000 shares of Common Stock which are
currently exercisable or become exercisable within 60 days. In addition,
Mr. Horsfall holds options to purchase 96,000 shares of Common Stock which
become exercisable after 60 days.
(9) Includes options to acquire 2,000 shares of Common Stock which are
currently exercisable or become exercisable within 60 days. In addition,
Mr. Crown holds options to purchase 80,000 shares of Common Stock which
become exercisable after 60 days.
(10) Includes options to acquire 8,000 shares of Common Stock which are
currently exercisable or become exercisable within 60 days. In addition,
Mr. Peterson holds options to purchase 96,000 shares of Common Stock
which become exercisable after 60 days.
(11) Includes 3,720,235 shares held by CMG@Ventures I, L.L.C. and 1,878,319
shares held by CMGI. Mr. Wetherell, Chairman of the Board, President,
Chief Executive Officer and Secretary of CMGI, an executive officer of
CMG@Ventures, Inc. and a member of CMG@Ventures I, L.L.C., may be deemed
to be a beneficial owner of these 5,598,554 shares of Common Stock.
Includes options to acquire 329,331 shares of Common Stock which are
currently exercisable or become exercisable within 60 days. In addition
to the shares listed, the executive officers of the Company hold options
to acquire an additional 917,733 shares of Common Stock which become
exercisable after 60 days.
3
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PROPOSED AMENDMENT TO INCREASE THE NUMBER OF SHARES
OF COMMON STOCK WHICH THE COMPANY HAS THE AUTHORITY
TO ISSUE FROM 40,000,000 SHARES TO 100,000,000 SHARES
On July 2, 1998, the Board of Directors adopted an amendment to the Restated
Certificate of Incorporation, subject to approval by the stockholders, to
increase the number of authorized shares of Common Stock from 40,000,000
shares to 100,000,000. The Board of Directors also directed that the proposed
amendment be submitted for action at the Special Meeting of Stockholders to be
held on August 13, 1998.
Increase in Number of Shares of Common Stock. The Company's Restated
Certificate of Incorporation currently authorizes the issuance of a total of
45,000,000 shares, consisting of 40,000,000 shares of Common Stock, par value
$.01 per share, and 5,000,000 shares of Preferred Stock, par value $.01 per
share. The proposed amendment will increase the total number of authorized
shares to 105,000,000, and the number of shares of Common Stock authorized to
100,000,000. The amendment will modify the first paragraph of Article FOURTH
of the Restated Certificate of Incorporation to read as follows:
FOURTH: The total number of shares of all classes of capital stock which
the Corporation shall have authority to issue is 105,000,000 shares,
consisting of 100,000,000 shares of Common Stock with a par value of $.01
per share (herein called the "Common Stock"), and 5,000,000 shares of
Preferred Stock with a par value of $.01 per share (herein called the
"Preferred Stock").
The amendment will not change the currently authorized number of shares of
Preferred Stock, which will remain set at 5,000,000. No shares of Preferred
Stock have been issued.
The additional shares of Common Stock for which authorization is sought
would be identical to the shares of Common Stock now authorized. Adoption of
the proposed amendment and the issuance of Common Stock would not affect the
rights of holders of currently outstanding Common Stock, except for effects
incidental to increasing the number of shares of Common Stock outstanding.
Holders of Common Stock do not have preemptive rights to subscribe to
additional securities that may be issued by the Company, which means that
current stockholders do not have a prior right to purchase any new issue of
capital stock of the Company in order to maintain their proportionate
ownership thereof. If the proposed amendment is adopted, it will become
effective upon the filing of the proposed amendment with the Delaware
Secretary of State.
Appraisal Rights in Respect of the Proposed Amendment. Under the applicable
provisions of the Delaware General Corporation Law, the Company's stockholders
have no appraisal rights with respect to the proposed amendment.
Recommendation of the Board of Directors. On July 2, 1998, the Board of
Directors authorized a two-for-one split of the Company's Common Stock,
subject to receipt of stockholder approval of an amendment to the Company's
Restated Certificate of Incorporation to increase the number of the Company's
authorized Common Stock. An increase in the authorized Common Stock is
necessary to permit the split to occur since the Company does not have a
sufficient number of authorized but unissued shares to carry out the split.
The Board of Directors believes that the adoption of the proposed amendment to
the Restated Certificate of Incorporation is advantageous to the Company and
its stockholders. It would provide sufficient authorized shares of Common
Stock to effect the two-for-one stock split. It would also provide additional
authorized shares of Common Stock that could be used from time to time,
without further action or authorization by the stockholders (except as may be
required by law or the rules of the Nasdaq Stock Market or other stock
exchange on which the Company's securities may then be listed) and for other
corporate purposes which the Board may deem desirable, including, without
limitation, stock splits, stock dividends or other distributions, financings,
acquisitions, stock grants, stock options and employee benefit plans. In the
event stockholder approval of this proposal is obtained, after giving effect
to the proposed two-for-one stock split, the Company would have a total of
61,711,934 authorized but unissued shares of Common Stock remaining available
pursuant to its Restated Certificate of Incorporation, of which 7,623,144
shares would be reserved for issuance under the Company's stock option plans
and employee
4
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stock purchase plan. These additional authorized shares of Common Stock will
restore the Company's flexibility to issue Common Stock to a level the Board
of Directors believes advisable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSED AMENDMENT.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
The Company's next Annual Meeting will be held in December 1998. An eligible
stockholder who desires to have a qualified proposal considered for inclusion
in the proxy statement for that meeting must have given notice to the
Secretary of the terms and content of the proposal no later than September 16,
1998.
OTHER MATTERS
Management knows of no other matters which may properly be and are likely to
be brought before the meeting, other than the matter discussed herein.
However, if any other matters properly come before the meeting, the persons
named in the enclosed proxy will vote in accordance with their best judgment.
VOTING PROXIES
The Board of Directors recommends an affirmative vote on the proposal
specified. Proxies will be voted as specified. If signed proxies are returned
without specifying an affirmative or negative vote on any proposal, the shares
represented by such proxies will be voted in favor of the Board of Directors'
recommendation.
By order of the Board of Directors,
Edward M. Philip,
Chief Operating Officer,
Chief Financial Officer and
Secretary
July 24, 1998
5
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LYCIS-PS-SM98
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PROXY
LYCOS, INC.
SPECIAL MEETING OF STOCKHOLDERS
August 13, 1998
The undersigned hereby appoints Robert J. Davis and Edward M. Philip, and each
of them, with full power and substitution, proxies to represent the undersigned
at the Special Meeting of Stockholders of Lycos, Inc. to be held on August 13,
1998, at 8:30 a.m., at 400-2 Totten Pond Road, Waltham, Massachusetts, and at
any adjournment or adjournments thereof, to vote in the name and place of the
undersigned, with all powers which the undersigned would possess if personally
present, all the shares of Lycos, Inc. standing in the name of the undersigned
upon such business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE BOARD
RECOMMENDS AN AFFIRMATIVE VOTE ON THE PROPOSAL SPECIFIED. SHARES WILL BE VOTED
AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED WILL BE VOTED
FOR THE PROPOSAL AS SET FORTH IN THE PROXY STATEMENT.
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PLEASE VOTE, DATE, AND SIGN ON REVERSE SIDE
AND RETURN PROMPTLY IN ENCLOSED ENVELOPE
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Please sign exactly as your name(s) appear(s) on the Proxy. When shares are held
by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE COMMENTS?
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[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
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LYCOS, INC.
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RECORD DATE SHARES:
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Please be sure to sign and date this Proxy. Date
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- ---- Stockholder sign here ------------------- Co-owner sign here --------------
FOR AGAINST ABSTAIN
1. To consider and act upon a proposal to approve [_] [_] [_]
an amendment to the Company's Restated
Certificate of Incorporation to increase the
number of authorized shares of Common Stock,
par value $.01 per share, from 40,000,000
shares to 100,000,000 shares.
2. In their discretion, the proxies are authorized to vote upon such business as
may properly come before the meeting.
Mark box at right if you plan to attend the meeting. [_]
Mark box at right if comments or address change have been noted on [_]
the reverse side of this card.
DETACH CARD DETACH CARD
LYCOS, INC.
Dear Lycos Stockholder:
Enclosed please find your proxy materials for the Special Meeting of
Stockholders, to be held on Thursday, August 13, 1998, at 8:30 A.M., at the
offices of the Company, 400-2 Totten Pond Road, Waltham, Massachusetts.
Please sign, date and return your proxy card in the enclosed envelope as soon as
possible.
Your vote counts! Thank you in advance for your prompt consideration of these
matters.
Lycos, Inc.
