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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 11, 1999
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Lycos, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
0-27830 04-3277338
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(Commission File Number) (IRS Employer Identification No.)
400-2 Totten Pond Road, Waltham, Massachusetts 02451
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(Address of principal executive offices) (Zip Code)
(781) 370-2700
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(Registrant's Telephone Number)
None
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On May 11, 1999, Lycos, Inc. ("Lycos"), USA Networks, Inc.
("USAi") and Ticketmaster Online-CitySearch, Inc. ("TMCS") agreed to
terminate all agreements relating to the proposed combination of Lycos with
TMCS and certain assets of USAi, including the options granted by Lycos to
each of USAi and TMCS. The termination agreement requires Lycos to pay USAi
and TMCS an aggregate of $35 million under certain circumstances if prior
to July 15, 1999, Lycos enters into an agreement with respect to, or
becomes subject to, certain acquisition proposals. In addition, subject to
certain exceptions, USAi and TMCS each has agreed that until July 15, 1999,
it will not acquire Lycos stock or make any proposals to acquire Lycos.
Attached hereto and incorporated herein by reference in their
entirety as Exhibits 2.1 and 99.1, respectively, are copies of (1) the
Termination Agreement and (2) a joint press release of Lycos, USAi and TMCS
dated May 12, 1999.
Item 7(c). Exhibits.
2.1 Termination Agreement dated as of May 11, 1999, among USA
Networks, Inc., Ticketmaster Online-CitySearch, Inc., Lycos,
Inc., USA Interactive, Inc., Lemma, Inc. and Tycho, Inc.
99.1 Joint press release of USA Networks, Inc., Lycos, Inc. and
Ticketmaster Online-CitySearch, Inc. dated May 12, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LYCOS, INC.
Date: May 14, 1999 By: /s/ Robert J. Davis
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Name: Robert J. Davis
Title: President and Chief
Executive Officer
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EXHIBIT INDEX
Exhibit Description
2.1 Termination Agreement dated as of May 11, 1999, among USA
Networks, Inc., Ticketmaster Online-CitySearch, Inc., Lycos,
Inc., USA Interactive, Inc., Lemma, Inc. and Tycho, Inc.
99.1 Joint press release of USA Networks, Inc., Lycos, Inc. and
Ticketmaster Online-CitySearch, Inc. dated May 12, 1999.
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Exhibit 2.1
TERMINATION AGREEMENT
TERMINATION AGREEMENT, dated as of May 11, 1999 (this
"Agreement") among USA Networks, Inc., a Delaware corporation ("USAi"),
Ticketmaster Online-CitySearch, Inc., a Delaware corporation ("TMCS"),
Lycos, Inc., a Delaware corporation ("Lycos"), USA Interactive Inc., a
Delaware corporation ("Newco"), Lemma, Inc., a Delaware corporation ("L
Merger Sub"), and Tycho, Inc., a Delaware corporation ("T Merger Sub").
WHEREAS, USAi, TMCS, Lycos, Newco, L Merger Sub and T Merger Sub
have entered into an Agreement and Plan of Reorganization, dated as of
February 8, 1999 (the "Merger Agreement"), and USAi, USANi LLC, a Delaware
limited liability company ("LLC"), and Newco have entered into a
Contribution Agreement, dated as of February 8, 1999 (the "Contribution
Agreement");
WHEREAS, in connection with the execution of the Merger Agreement
and the Contribution Agreement, USAi and TMCS each entered into a stock
option agreement with Lycos, dated February 8, 1999 (together, the "Stock
Option Agreements" and together with the Merger Agreement and the
Contribution Agreement, the "Transaction Agreements").
WHEREAS, the parties hereto mutually desire to terminate the
Transaction Agreements on the terms set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth in this Agreement, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Termination. Lycos, TMCS and Newco mutually consent to
terminate the Merger Agreement pursuant to Section 11.1(a) of the Merger
Agreement, which termination also constitutes automatic termination of the
Contribution Agreement pursuant to Section 8.1 thereof. The parties
acknowledge and agree that the termination of the Merger Agreement as
provided in the preceding sentence shall cause an "Exercise Termination
Event" to occur under Section 2(b)(ii) of each Stock Option Agreement, with
the effect that the Stock Option Agreements immediately shall terminate and
be of no further force and effect.
2. Effect of Termination. Notwithstanding anything to the
contrary contained in the Transaction Agreements, except with respect to
Sections 9.2(b) and 12.2 of the Merger Agreement, which provisions shall
survive the termination of the Transaction Agreements, none of the parties
hereto nor their respective subsidiaries, officers, directors, employees,
agents or representatives shall have any liability or obligation under the
Transaction Agreements.
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3. Payment of Certain Fees. (a) If a Triggering Event described
in paragraph (i) of Section 3(c) below occurs on or prior to July 15, 1999,
then within 2 business days of the occurrence of such Triggering Event,
Lycos will pay (x) to USAi the sum of $25.5 million in cash and (y) to TMCS
the sum of $9.5 million in cash.
(b) If (i) a Triggering Event described in paragraphs (ii) or
(iii) of Section 3(c) below occurs on or prior to July 15, 1999, and
(ii) Lycos shall have entered into an agreement to engage in an
Acquisition Transaction with any person other than USAi, TMCS or any
of their respective Subsidiaries (as defined below) on or prior to
January 15, 2000, then within 2 business days of the occurrence of the
event described in clause (ii) of this Section 3(b), Lycos will pay
(x) to USAi the sum of $25.5 million in cash and (y) to TMCS the sum
of $9.5 million in cash.
(c) A "Triggering Event" shall mean any of the following events
or transactions occurring on or after the date hereof:
(i) Lycos shall have entered into an agreement to engage in
an Acquisition Transaction (as defined below) with any person (the
term "person" for purposes of this Agreement having the meaning
assigned thereto in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations thereunder) other than USAi, TMCS or any of their
respective Subsidiaries or the Board of Directors of Lycos shall have
recommended that the stockholders of Lycos approve or accept any
Acquisition Transaction. For purposes of this Agreement, an
"Acquisition Transaction" shall mean (w) a merger or consolidation, or
any similar transaction, involving Lycos, unless immediately following
such merger, consolidation or similar transaction the securities of
Lycos outstanding immediately prior thereto continue to represent
(either by remaining outstanding or converting into securities of the
surviving entity or any entity controlling the surviving entity) at
least 60% of the voting power and common equity of Lycos, the
surviving entity or any entity controlling the surviving entity, in
each case, on a fully diluted basis, and, following such transaction,
individuals who constituted the Board of Directors of Lycos prior to
such transaction will constitute at least a majority of the Board of
Directors of Lycos, the surviving entity or any entity controlling the
surviving entity, (x) a purchase, lease, contribution or other
acquisition, transfer or assumption of all or more than 30% of the
assets of Lycos, in any transaction or series of related transactions,
by joint venture, partnership, contribution of assets or otherwise
unless, following such transaction, Lycos will control the joint
venture,
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partnership or other entity formed in connection with such
transaction, (y) a purchase or other acquisition (including by way of
merger, consolidation, share exchange or otherwise) of beneficial
ownership (the term "beneficial ownership" for purposes of this
Agreement having the meaning assigned thereto in Section 13(d) of the
Exchange Act, and the rules and regulations thereunder, but without
regard to the passage of time) of securities representing 20% or more
of the voting power of Lycos in any transaction or series of related
transactions unless such Acquisition Transaction referred to in this
clause (y) consists solely of an acquisition of a person and/or assets
by Lycos in which Lycos issues securities of Lycos and following such
Acquisition Transaction, Lycos will control such assets and/or a
majority of the voting power of such person, as applicable, and such
person (including any affiliates of such person and any group in which
such person is a participant) will not, directly or indirectly,
control Lycos (it being agreed that a widely-dispersed public offering
of securities by Lycos or a private placement of Lycos securities to a
financial institution that is qualified to file a Schedule 13G under
the Exchange Act shall not give rise to an Acquisition Transaction
under this clause (y)), or (z) any substantially similar transaction;
provided, however, that in no event shall the transactions
contemplated by the merger agreement entered into on October 5, 1998,
and amended and restated on November 23, 1998, by Lycos and Wired
Ventures Inc. or any merger, consolidation, purchase or similar
transaction involving only Lycos and one or more of its wholly owned
Subsidiaries or involving only any two or more of such wholly owned
Subsidiaries, be deemed to be an Acquisition Transaction. For purposes
of this Agreement, "Subsidiary" shall mean with respect to any party,
any corporation, partnership, limited liability company, or other
organization, whether incorporated or unincorporated, which is
consolidated with such party for financial reporting purposes;
(ii) Lycos shall have authorized, recommended or publicly
announced its intention to authorize, recommend or propose, to engage
in an Acquisition Transaction with any specific person other than
USAi, TMCS or any of their respective Subsidiaries or shall have
announced its intention to authorize or engage in, any negotiations
regarding an Acquisition Transaction with any specific person other
than USAi, TMCS or any of their respective Subsidiaries, or any
authorization or recommendation described in this paragraph (ii), or
any proposal by Lycos to engage in an Acquisition Transaction with any
specific person other than USAi, TMCS or any of their respective
Subsidiaries, becomes the subject of public disclosure; or
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(iii) Any person other than USAi, TMCS or any of their
respective Subsidiaries shall have made a bona fide proposal to Lycos
or its stockholders that is or becomes the subject of public
disclosure to engage in an Acquisition Transaction. None of USAi, TMCS
or any of their respective Subsidiaries will encourage any person to
make a proposal that is referred to in this clause (iii).
(d) Notwithstanding anything to the contrary in this Agreement,
the aggregate amount of fees to be paid by Lycos pursuant to this
Section 3 shall not exceed $35 million.
4. Standstill. On or prior to July 15, 1999, none of USAi, TMCS
or any of their respective Subsidiaries will, directly or indirectly,
acquire or offer to acquire any shares of Lycos's common stock, par value
$.01 per share (the "Common Stock"), or propose to the Board of Directors
of Lycos, or publicly announce any proposal relating to, a merger or
consolidation or similar transaction involving Lycos; provided, however,
that the provisions of this Section 4 shall terminate in the event a
Triggering Event described in clause (iii) of Section 3(c) above occurs.
5. Releases. Each of USAi (on its behalf and on behalf of Newco,
L Merger Sub and T Merger Sub), TMCS and Lycos, hereby releases and
discharges the others (and such other's directors, officers,
representatives, employees, attorneys, advisors, agents, parents,
subsidiaries, affiliated persons and entities, predecessors, successors and
assigns and all persons acting in concert with any such party) (the
"Released Persons") from all manner of claims, actions, causes of action or
suits, at law or in equity, known or unknown, which each now has or
hereafter can, shall, or may have by reason of any matter, cause or thing
whatsoever relating to or arising out of the Transaction Agreements,
excepting only any claim, action, cause of action or suit arising (a) by
virtue of an undertaking or promise contained in this Termination Agreement
or (b) by virtue of transactions or dealings undertaken in the ordinary
course of business and not arising out of, in connection with or in any way
related to the Transaction Agreements. Nothing in this Section 3 shall in
any way constitute an agreement by any party hereto to indemnify any other
party hereto against any third party claim or, except as specifically set
forth herein, waive, release, limit or restrict any claim which any party
may have against any person or entity not a party to this Termination
Agreement.
6. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other parties.
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7. Entire Agreement. This Termination Agreement and the
Confidentiality Agreement constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
8. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware (without giving effect
to choice of law principles thereof).
9. Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
10. Notices. All notices and other communications hereunder shall
be in writing, shall be delivered by hand, telecopy, facsimile or next-day
courier service and shall be deemed given when delivered. All notices
hereunder shall be delivered as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
(a) if to USAi, Newco, L Merger Sub or T Merger Sub, to
USA Networks, Inc.
152 West 57th Street
New York, New York 10019
Fax: (212) 314-7329
Attention: General Counsel
with a copy to
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Fax: (212) 403-2000
Attention: Pamela S. Seymon
Andrew J. Nussbaum
(b) if to TMCS to
Ticketmaster Online-CitySearch, Inc.
790 East Colorado Boulevard
Suite 200
Pasadena, California 91101
Fax: (626) 405-9929
Attention: General Counsel
with a copy to
Gibson, Dunn & Crutcher LLP
333 S. Grand Avenue
Los Angeles, California 90071
Fax: (213) 229-7520
Attention: Andrew E. Bogen
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(c) if to Lycos to
Lycos, Inc.
400-2 Totten Pond Road
Waltham, Massachusetts 02154
Fax: (781) 370-2600
Attention: General Counsel
with copies to
Testa, Hurwitz & Thibeault, LLP
High Street Tower
125 High Street
Boston, Massachusetts 02110
Fax: (617) 248-7100
Attention: Mark H. Burnett
Kenneth J. Gordon
and
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Fax: (212) 474-3700
Attention: Robert A. Kindler
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of
the date first written above.
USA NETWORKS, INC.
by: /s/ Thomas J. Kuhn
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Name: Thomas J. Kuhn
Title: Senior Vice President,
General Counsel & Secretary
TICKETMASTER ONLINE-CITYSEARCH,
INC.
By: /s/ Charles R. Conn, III
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Name: Charles R. Conn, III
Title: Chief Executive Officer
LYCOS, INC.
By:/s/ Robert J . Davis
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Name: Robert J. Davis
Title: President and Chief
Executive Officer
USA INTERACTIVE INC.
by:/s/ Dara Khosrowshahi
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Name: Dara Khosrowshahi
Title: Vice President and Treasurer
LEMMA, INC.
By: /s/ Dara Khosrowshahi
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Name: Dara Khosrowshahi
Title: President
TYCHO, INC.
By: /s/ Dara Khosrowshahi
----------------------------
Name: Dara Khosrowshahi
Title: President
<PAGE>
Exhibit 99.1
USA NETWORKS, INC., LYCOS AND TICKETMASTER
ONLINE-CITYSEARCH TERMINATE MERGER AGREEMENT
NEW YORK, N.Y., WALTHAM, Mass. and PASADENA, Calif. May 12, 1999 -
Lycos, Inc. (NASDAQ: LCOS), USA Networks, Inc. (NASDAQ: USAI) and
Ticketmaster Online-CitySearch, Inc. (NASDAQ: TMCS) today jointly announced
that they have agreed by mutual consent to terminate their merger
agreement. Under the agreement signed on February 9, 1999, Lycos would have
been combined with certain USAi assets and Ticketmaster-Online CitySearch,
Inc. The option agreement between USA Networks and Lycos that was part of
the merger agreement has also been terminated. The termination agreement
requires Lycos to pay USAi and TMCS an aggregate of $35 million under
certain circumstances if prior to July 15, 1999 Lycos enters into an
agreement with respect to, or becomes subject to, certain acquisition
proposals. In addition, subject to certain exceptions, USAi and TMCS each
has agreed that until July 15, 1999, it will not acquire Lycos stock or
make any proposals to acquire Lycos.
Simultaneously with the termination of the agreement, USAi, TMCS and
Lycos today announced an agreement whereby TMCS and Lycos are entering into
a distribution and commerce relationship. As part of that continuing
relationship, CitySearch will provide local content for Lycos' national
network, Ticketmaster Online content will be featured on Lycos sites and
ticket purchase links will be directed to the Ticketmaster
Online-CitySearch site. The companies will explore options to engage in a
cooperative program to develop a local commerce platform for the more than
15,000 businesses hosted by CitySearch and its partners. Additionally, the
agreement provides for USAi and Lycos to exchange cross-promotional
opportunities involving the Lycos sites and USAi's media assets.
About USA Networks, Inc.
USA Networks, Inc. is a diversified media and electronic commerce
company with assets that include the following: USA Network; SCI FI
Channel; Studios USA, which consists of first-run production and
distribution, TV movies and miniseries and network production and
development; USA Broadcasting; Home Shopping Network; Ticketmaster and USA
Networks Interactive, which includes Internet Shopping Network, whose
primary service is First Auction, and Hotel Reservation Network. The
company also owns a controlling interest in Ticketmaster Online-CitySearch,
Inc., a leading provider of local content and live ticketing in the world.
About Lycos
Founded in 1995, Lycos, Inc. is a leading Web media company and owner
of the Lycos Network, the most visited hub on the Internet reaching 51.8
percent of Web users. The Lycos Network is a unified set of Web sites that
attracts a
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diverse audience by offering a variety of services, including leading Web
navigation resources, homepage building and other Web community services
and a comprehensive shopping center. The Lycos Network is composed of
premium sites: Lycos.com, Tripod, WhoWhere, Angelfire, MailCity, HotBot,
HotWired, Wired News, Webmonkey, Suck.com and MyTime.com. Lycos.com
(http://www.lycos.com), "Your Personal Internet Guide," is dedicated to
helping each individual user locate, retrieve and manage information
tailored to his or her personal interests. Headquartered near Boston in
Waltham, Mass., Lycos, Inc. is a global Internet leader with a major
presence throughout the U.S., Europe and Asia.
About Ticketmaster Online-CitySearch, Inc.
Ticketmaster Online-CitySearch (NASDAQ: TMCS) is an award-winning
provider of locally-developed online information and transaction services
relevant to people's everyday lives. CitySearch ( www.citysearch.com)
develops city guides that provide rich local information on arts and
entertainment, recreation, shopping and community, and integrate
transactions to help people get things done. Ticketmaster Online
(www.ticketmaster.com) provides online ticketing through an exclusive
agreement with Ticketmaster Corporation, the leading provider and
distributor of event tickets, selling annually approximately 75 million
tickets, representing gross receipts in excess of 2.5 billion dollars, for
more than 250,000 events and 3,750 clients. CityAuction
(www.cityauction.com) is a person-to-person online auction site that
provides a time-saving way to buy and sell items in local and global
marketplaces. These services provide a local portal that allows people to
perform everyday activities online, from planning an evening out, to buying
tickets, to local shopping. Ticketmaster Online-CitySearch is headquartered
in Pasadena, California.
# # #
(C)1999 Lycos, Inc. - Lycos(R) is a registered trademark of Carnegie Mellon
University. All other product or service marks mentioned herein are those
of Lycos or their respective owners. All rights reserved.
Contacts:
Adrienne Becker
USA Networks, Inc.
212-314-7254
Michele Perry
Lycos, Inc.
781-370-2678
Nancy Lyon
Ticketmaster Online-CitySearch
626-660-2530
