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.
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(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
July 15, 1999
To Our Stockholders:
A Special Meeting of the Stockholders of Lycos, Inc. (the
"Company") will be held on July 15, 1999, at 10:00 A.M., at the Summerfield
Suites Hotel, 54 Fourth Avenue, 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, as
amended, to increase the number of authorized shares of
Common Stock, par value $.01 per share, from 100,000,000
shares to 300,000,000 shares.
2. To consider and act upon any other business that may
properly come before the meeting.
The Board of Directors has fixed the close of business on June
11, 1999, 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
June 17, 1999
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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 the Stockholders to be held on
July 15, 1999, 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 June 17, 1999.
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 who executes and returns 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 the Company's Common
Stock, par value $0.01 per share (the "Common 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 the transaction
of business. The affirmative vote of the holders of at least a majority of
the shares of Common Stock entitled to vote at the meeting is required to
approve the proposed amendment of the Restated Certificate of
Incorporation, as amended (the "Charter"), described below.
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 June
11,1999, are entitled to notice of and to vote at the meeting. On that
date, the Company had outstanding and entitled to vote 43,630,880 shares of
Common Stock. Each outstanding share of Common Stock entitles the record
holder to one vote. No shares of Preferred Stock are outstanding.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of June 1, 1999, (i) by each
person who is known by the Company to be the beneficial owner of more than
5% of the 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 who beneficially held shares of 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
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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 1, 1999, are deemed outstanding. However, such shares
are not deemed outstanding for purposes of computing the percentage
ownership of any other person. As of June 1, 1999, there were 43,613,990
shares of Common Stock outstanding.
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AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OWNERSHIP CLASS
CMGI, Inc. (1)................... 8,000,567 18.34%
100 Brickstone Square
First Floor
Andover, MA 01810
FMR Corp. (2).................... 3,025,520 6.94%
82 Devonshire Street
Boston, MA 02109
DIRECTORS
Daniel J. Nova (3)............... 26,003 *
c/o Highland Capital Partners
Two International Place
Floor 22Boston, MA 02110
John M. Connors, Jr. (4)......... 26,917 *
c/o Hill, Holliday, Connors,
Cosmopulos, Inc.
200 Clarendon Street
Boston, MA 02116
Richard H. Sabot (5)............. 128,259 *
c/o Tripod, Inc.
160 Water Street
Williamstown, MA 01267
NAMED EXECUTIVE OFFICERS
Robert J. Davis (6).............. 489,475 1.12%
Edward M. Philip (7)............. 28,610 *
Jan R. Horsfall (8).............. 70,000 *
Jeffrey J. Crown (9)............. 24,305 *
David G. Peterson (10)........... 16,000 *
All executive officers and
directors as a group
(12 persons) (11)................ 877,241 1.98%
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* Less than 1.00%.
(1) CMGI holds 1,938,638 shares directly and may be attributed with the
ownership of 2,476,722 shares held by CMG@Ventures I, LLC, 1,073,629
shares held by CMG@Ventures Securities Corp. and 2,511,578 shares held
by CMG@Ventures Capital Corporation. CMGI, Inc. is the sole
stockholder of CMG@Ventures, Inc., which is the Managing Member of
CMG@Ventures I, LLC. CMGI, Inc. is also the sole stockholder of
CMG@Ventures Capital Corporation, which is the sole stockholder of
CMG@Ventures Securities Corp. Each of CMGI, Inc. and CMG@Ventures,
Inc. disclaims beneficial ownership of all shares not held directly by
it except to the extent of its proportionate pecuniary interest
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therein. In addition, 735,304 shares of Common Stock held by CMGI are
subject to options issued under the Company's employee stock option
plan.
(2) As disclosed to the Company by Fidelity Management & Research Co., a
wholly owned subsidiary of FMR Corp.
(3) Includes 19,336 shares of Common Stock held by Mr. Nova and options to
acquire 6,667 shares of Common Stock that are currently exercisable or
become exercisable within 60 days. In addition, Mr. Nova holds options
to purchase 13,333 shares of Common Stock that become exercisable
after 60 days.
(4) Includes 250 shares of Common Stock held by Mr. Connors and options to
acquire 26,667 shares of Common Stock that are currently exercisable
or become exercisable within 60 days. In addition, Mr. Connors holds
options to purchase 13,333 shares of Common Stock that become
exercisable after 60 days.
(5) Includes 39,879 shares of Common Stock held by Mr. Sabot, 82,186
shares of Common Stock held indirectly in a revocable trust, 2,140
shares of Common Stock held indirectly in an irrevocable trust and
options to acquire 4,054 shares of Common Stock that are currently
exercisable or become exercisable within 60 days. In addition, Mr.
Sabot holds options to purchase 146,000 shares of Common Stock that
become exercisable after 60 days.
(6) Includes 2,875 shares of Common Stock held by Mr. Davis and options to
acquire 486,600 shares of Common Stock that are currently exercisable
or become exercisable within 60 days. In addition, Mr. Davis holds
options to purchase 366,400 shares of Common Stock that become
exercisable after 60 days.
(7) Includes 3,857 shares of Common Stock held by Mr. Philip and options
to acquire 24,753 shares of Common Stock that are currently
exercisable or become exercisable within 60 days. In addition, Mr.
Philip holds options to purchase 435,951 shares of Common Stock that
become exercisable after 60 days.
(8) Includes options to acquire 70,000 shares of Common Stock that are
currently exercisable or become exercisable within 60 days. In
addition, Mr. Horsfall holds options to purchase 178,000 shares of
Common Stock that become exercisable after 60 days.
(9) Includes 305 shares of Common Stock held by Mr. Crown and options to
acquire 24,000 shares of Common Stock that are currently exercisable
or become exercisable within 60 days. In addition, Mr. Crown holds
options to purchase 150,000 shares of Common Stock that become
exercisable after 60 days.
(10) Includes options to acquire 16,000 shares of Common Stock that are
currently exercisable or become exercisable within 60 days. In
addition, Mr. Peterson holds options to purchase 198,000 shares of
Common Stock that become exercisable after 60 days.
(11) Includes options to acquire 724,741 shares of Common Stock that are
currently exercisable or become exercisable within 60 days. In
addition to the shares listed, all executive officers and directors
hold options to acquire an additional 2,071,017 shares of Common Stock
that will become exercisable after 60 days.
PROPOSED AMENDMENT TO INCREASE THE NUMBER OF SHARES
OF COMMON STOCK THAT THE COMPANY HAS THE AUTHORITY
TO ISSUE FROM 100,000,000 SHARES TO 300,000,000 SHARES
On May 18, 1999, the Board of Directors adopted an amendment to
the Charter, subject to approval by the stockholders, to increase the
number of
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authorized shares of Common Stock from 100,000,000 shares to 300,000,000
(the "Amendment"). The Board of Directors also directed that the Amendment
be submitted to the stockholders for approval at the Special Meeting of
Stockholders to be held on July 15, 1999. In the event stockholder approval
of the Amendment is obtained, the Company will then effect a two-for-one
stock split (in the form of a stock dividend) to be paid on July 26, 1999,
to stockholders of record on July 16, 1999 (the "Stock Split").
Increase in Number of Shares of Common Stock. The Charter
currently authorizes the issuance of a total of 105,000,000 shares of
capital stock, consisting of 100,000,000 shares of Common Stock, par value
$.01 per share, and 5,000,000 shares of Preferred Stock, par value $.01 per
share. The Amendment will increase the total number of authorized shares to
305,000,000, and the number of authorized shares of Common Stock to
300,000,000. The Amendment will amend the first paragraph of Article FOURTH
of the Charter to read in its entirety as follows:
FOURTH: The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is
305,000,000 shares, consisting of 300,000,000 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 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, which
means that current stockholders do not have a prior right to purchase any
new issue of Common Stock in order to maintain their proportionate
ownership thereof. If the Amendment is adopted, it will become effective
upon the filing of the Amendment with the Delaware Secretary of State.
Appraisal Rights in Respect of the Amendment. Under the
applicable provisions of the Delaware General Corporation Law, the
Company's stockholders have no appraisal rights with respect to the
Amendment.
The Stock Split. On May 18, 1999, the Board of Directors
authorized the Stock Spilt, subject to receipt of stockholder approval of
the Amendment. In connection with the Stock Split, each stockholder will
receive one additional share of Common Stock for each share of Common Stock
held by it on the related record date. In addition, the number of shares of
Common Stock reserved for issuance or subject to outstanding options
granted under the Company's employee stock option plans and employee stock
purchase plans would increase by 100% (and the exercise price per share
would decrease by 50%). Stockholders are not being asked to vote on the
Stock Split, but the Stock Split will not occur unless the authorized
number of shares of Common Stock is increased as set forth in the
Amendment. Without this increase in authorized shares, the Company will not
have enough authorized shares of Common Stock to effect the Stock Split.
Purpose of the Amendment. The Board of Directors believes that
the adoption of the Amendment is advantageous to the Company. The Amendment
would provide sufficient authorized Common Stock of the Company to effect
the Stock Split, which the Company believes will lower the per share market
price of the Common Stock and increase its trading activity. In addition,
it would provide additional authorized shares of Common Stock that may be
used from time to time for other corporate purposes that the Board of
Directors may deem desirable, including,
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without limitation, additional 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 Stock Split and assuming it was
effected on June 11, 1999, the Company would have a total of 212,738,240
authorized but unissued shares of Common Stock remaining available pursuant
to the Charter, of which 9,347,544 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 Company has no current plans with respect
to the additional authorized but unissued shares of Common Stock that will
result from the Amendment other than in connection with the Stock Split.
Possible Effects of the Amendment. If the stockholders approve
the Amendment, the Company will have additional authorized but unissued
shares of Common Stock that may be issued without further action or
authorization of the stockholders (except as 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). The issuance of additional shares of Common
Stock would have a dilutive effect on earnings per share. In addition, the
issuance of additional shares of Common Stock could have a dilutive effect
on the voting power of the current stockholders because they do not have
preemptive rights. Finally, the Amendment could, under certain
circumstances, have an anti-takeover effect, because it would enable the
Board of Directors to issue shares of Common Stock to persons who are
opposed to a takeover bid. This could deter transactions that may result in
a change of control of the Company, including transactions in which
stockholders may receive a premium for their shares over the current market
prices. The Board of Directors, however, has presented the Amendment for
the purposes described above under "Purpose of the Amendment" and not with
the intent that it be utilized as a type of anti-takeover device.
Required Vote; Recommendation of the Board of Directors.
Affirmative votes of the holders of at least a majority of the shares of
Common Stock entitled to vote at the meeting are required to approve the
Amendment. Abstentions and broker non-votes will have the same effect as
votes against the Amendment. Upon the execution and return of the enclosed
form of proxy, the shares represented thereby will be voted in accordance
with the terms of the proxy, unless the proxy is revoked. If no directions
are indicated in such proxy, the shares represented thereby will be voted
"FOR" the approval of the Amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT.
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DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
The Company's next Annual Meeting will be held in December 1999.
An eligible stockholder who desires to have a qualified proposal considered
for inclusion in the proxy statement for that meeting must give notice to
the Secretary of the Company of the terms and content of the proposal no
later than September 24, 1999.
OTHER MATTERS
Management knows of no other matters that may properly be and are
likely to be brought before the meeting, other than the matter discussed
herein. If any other matters properly come before the meeting, however, 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
June 17, 1999
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PROXY
LYCOS, INC.
SPECIAL MEETING OF THE STOCKHOLDERS
July 15, 1999
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 the Stockholders of
Lycos, Inc. to be held on July 15, 1999, at 10:00 A.M., at the Summerfield
Suites Hotel, 54 Fourth Avenue, Waltham, Massachusetts, and at any
adjournment or adjournments thereof, to vote in the name and place of the
undersigned, with all powers that 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.
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 ---------------
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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 100,000,000 shares to
300,000,000 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
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LYCOS, INC.
Dear Lycos Stockholder:
Enclosed please find your proxy materials for the Special Meeting of the
Stockholders, to be held on July 15, 1999, at 10:00 A.M., at the
Summerfield Suites Hotel, 54 Fourth Avenue, 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.
