LYCOS INC, PRES14A, 1998-07-06

LYCOS INC
PRES14A, 1998-07-06
ADVERTISING

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<PAGE>

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:

[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))

[_] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

LYCOS, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

LYCOS, INC.
------------------------------------------------
(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:

________________________________________________________________________

(2) Aggregate number of securities to which transaction applies:

________________________________________________________________________

(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):

________________________________________________________________________

(4) Proposed maximum aggregate value of transaction:

________________________________________________________________________

(5) Total fee paid:

________________________________________________________________________

[_] 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:

________________________________________________________________________

(2) Form, Schedule or Registration Statement No.:

________________________________________________________________________

(3) Filing Party:

________________________________________________________________________

(4) Date Filed:

________________________________________________________________________

<PAGE>

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

<PAGE>

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 [_________] 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.

<PAGE>

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
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 19,027,821 shares of Common Stock outstanding.

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OWNERSHIP CLASS
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
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
(12 persons)(11)................................... 6,019,176 31.1%
- -------------------------------------------------------------------------------------------------
</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. has agreed

<PAGE>

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.
<PAGE>

(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.
<PAGE>

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.
<PAGE>

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 61,944,358 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 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.
<PAGE>

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
<PAGE>

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.

PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN
ENCLOSED ENVELOPE

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

HAS YOUR ADDRESS CHANGED? DO YOU HAVE COMMENTS?
<PAGE>

[X] PLEASE MARK VOTES AS IN THIS EXAMPLE

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.

<TABLE>
<S> <C> <C> <C>
For Against Abstain
[ ] [ ] [ ]
</TABLE>

2. In their discretion, the proxies are authorized to vote upon such business
as may properly come before the meeting.

<TABLE>
<S> <C> <C> <C>
For Against Abstain
[ ] [ ] [ ]
</TABLE>

RECORD DATE SHARES:

I plan to attend in person [ ]

I do not plan to attend in person [ ]

Please be sure to sign and date this Proxy. Date:
----------------

Mark box at right if comments or address change
have been noted on the reverse side of this card [ ]

Shareholder sign here Co-owner sign here
------------------ ------------------

DETACH CARD