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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): September 3, 1999
USWEB CORPORATION
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
Delaware 000-23151 87-0551650
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification
Incorporation or organization) Number)
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410 TOWNSEND STREET
SAN FRANCISCO, CA 94107
(Address of principal executive offices including Zip Code)
(415) 369-6700
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 3, 1999, USWeb Corporation, a Delaware corporation (the
"Company"), completed the acquisition of substantially all of assets of the
Mitchell Madison Group. Further details are contained in the Company's press
release dated September 7, 1999, attached as an exhibit hereto and incorporated
by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
As of the date of filing of this initial report, there are no audited
financial statements available relating to Mitchell Madison Group that would
meet the rules required by this form. These audited financial statements will be
filed as an amendment to this initial report as soon as practicable.
(b) Pro Forma Financial Information.
Pro forma financial information is currently being prepared and will be
filed as an amendment to this initial report as soon as practicable.
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Exhibit Number Description
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2.1(A) Asset Purchase Agreement by and among Mitchell Madison
Group, L.L.C., USWeb Corporation and USWeb Acquisition
Corporation 137.
2.2 Amendment No. 1 to the Asset Purchase Agreement by and
among Mitchell Madison Group, L.L.C., USWeb Corporation
and USWeb Acquisition Corporation 137.
99.1 USWeb Corporation Press Release, dated September 7, 1999.
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(A) Incorporated by reference from the Company's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 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.
Date: September 16, 1999 USWEB CORPORATION
By: /S/ CAROLYN V. AVER
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Carolyn V. Aver
Executive Vice President,
Chief Financial Officer and Secretary
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EXHIBIT INDEX
Exhibit Number Description
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2.1 (A) Asset Purchase Agreement by and among Mitchell Madison
Group, L.L.C., USWeb Corporation and USWeb Acquisition
Corporation 137.
2.2 Amendment No. 1 to the Asset Purchase Agreement by and
among Mitchell Madison Group, L.L.C., USWeb Corporation
and USWeb Acquisition Corporation 137.
99.1 USWeb Corporation Press Release, dated September 7, 1999.
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(A) Incorporated by reference from the Company's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 1999.
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EXHIBIT 2.2
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AMENDMENT NO. 1 TO THE ASSET PURCHASE AGREEMENT BY AND AMONG MITCHELL MADISON
GROUP, L.L.C. , USWEB CORPORATION, AND USWEB ACQUISITION CORPORATION 137
as of September 1, 1999
This Amendment No. 1 (the "Amendment") to the Asset Purchase Agreement,
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dated July 30 1999, by and among Mitchell Madison Group, L.L.C., USWeb
Acquisition Corporation 137, and USWeb Corporation (the "Agreement") is made and
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entered into as of September 1, 1999 by and among Mitchell Madison Group L.L.C.,
a Cayman Islands limited liability company (the "Seller"), USWeb Corporation, a
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Delaware corporation ("USWeb"), and USWeb Acquisition 137, a Delaware
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corporation and wholly owned subsidiary of USWeb (the "Buyer"). Unless otherwise
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stated herein, capitalized terms not defined herein shall have the meanings set
forth in the Agreement.
RECITAL
The parties to the Agreement wish to make certain amendments to the
Agreement.
Now, therefore, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the parties agree as follows:
AGREEMENT
1.1 Three new definitions shall hereby be inserted in Article I. Such
definitions shall read as follows:
" "Cause" Defined in the Holder/Employee Agreement.
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"Holder/Employee"-- Any Holder who is becoming an employee of USWeb.
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"Holder/Employee Agreement"-- The agreements regarding compensation,
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at-will employment, arbitration, and other matters by and among
Seller, USWeb, and each Holder/Employee, to be dated as of September
3, 1999."
1.2 The portion of the first sentence of Section 2.02(a) that precedes
Section 2.02(a)(i) shall hereby read in its entirety as follows:
"(a) The aggregate purchase price (the "Purchase Price") to be paid by
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the Seller as consideration for the Transferred Assets (or to be
delivered pursuant to Section 8.05) and, in the case of the Year 1
Deferred Consideration and Year 2 Deferred Consideration (as defined
below), as employment consideration, shall be:"
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1.3 Section 2.02(a)(ii) of the Agreement shall hereby read in its entirety
as follows:
"(ii) an amount in cash equal to $10,000,000, payable on or before 90
days following the Closing Date."
1.4 Section 2.02(b)(iv) of the Agreement shall hereby read in its entirety
as follows:
"(iv) On or before 90 days following the Closing Date, an amount in
cash equal to $10,000,000."
1.5 A new Section 2.02(c) of the Agreement shall hereby be inserted to
read in its entirety as follows:
"(c) The Seller shall distribute the Purchase Price as follows:
(i) With respect to Section 2.02(b)(i) and (iv) above, Seller
shall distribute to each Holder as agreed upon by Seller and the
Holders. A copy of such proposed distribution will be provided to
USWeb prior to the Closing.
(ii) With respect to Sections 2.02(b)(ii) and (iii), Seller
shall distribute to each Holder pursuant to Section 2.03 below."
1.6 Section 2.03(a) shall hereby read in its entirety as follows:
"(a) Definitions.
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"Year 1" is October 1, 1999 to September 30, 2000, and
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"Year 2" is October 1, 2000 to September 30, 2001."
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1.7 Section 2.03(b) of the Agreement shall hereby read in its entirety as
follows:
"(b) Adjustment of Deferred Consideration. After the end of Year 1 and
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Year 2 as provided in Section 2.03(c) and (d) below, Seller, as agent,
shall, subject to applicable withholding for tax, indemnity or other
similar purposes by USWeb, distribute to each Holder/Employee
(provided the Holder/Employee has not voluntarily left the employ of
USWeb or has not been terminated by USWeb for Cause) each
Holder/Employee's share (as more fully set forth in Exhibit A of each
Holder/Employee Agreement) of Year 1 Deferred Consideration and the
Year 2 Deferred Consideration, as applicable.
Subject to the terms and conditions of the applicable Holder/Employee
Agreement, including the quarterly vesting provisions therein, if any
Holder/Employee has voluntarily left the employ of USWeb or has been
terminated by USWeb for Cause, USWeb shall retain the Year 1
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Deferred Consideration and Year 2 Deferred Consideration otherwise
distributable to such Holder/Employee on September 30, 2000 or
September 30, 2001 (as the case may be)."
1.8 Section 8.05 of the Agreement shall hereby read in its entirety as
follows:
1.9 "8.05 Transfer of Interest. As promptly as practicable following the
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execution of this Agreement and on or before the Closing, the Seller and the
Buyer shall enter into an agreement to the cause the holder of the interest in
Mitchell Madison Consulting Group, Inc. and Mitchell Madison Group (Del.) LLC to
effect the transfer to the Buyer of all of such holder's right, title and
interest in Mitchell Madison Consulting Group, Inc. and Mitchell Madison Group
(Del.) LLC. Such agreement shall be in the form and substance mutually
satisfactory to the Seller and the Buyer. A portion of the Purchase Price paid
pursuant to Sections 2.02(a)(i) and 2.02(b)(i) shall be paid by Seller (as agent
for the Buyer) to effect the foregoing agreement."
1.10 Section 9.05 of the Agreement shall hereby read in its entirety as
follows:
"9.05 [This Section intentionally deleted]"
1.11 [Section 9.07 of the Agreement shall hereby read in its entirety as
follows:
"9.07 Third Party Consents. Any and all consents, waivers and
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approvals listed in Schedule 4.26 and all waivers of any restrictions
to the business activity of the Seller enumerated in Schedule 4.26
shall have been obtained except the consent of PNC Bank, National
Association which shall be obtained after the Closing pursuant to
Section 12.09."
1.12 Section 10.05 of the Agreement shall hereby read in its entirety as
follows:
"10.05 [This Section intentionally deleted]"
1.13 Section 10.07 of the Agreement shall hereby read in its entirety as
follows:
"10.07 [This Section intentionally deleted]"
1.14 Section 10.08 of the Agreement shall hereby read in its entirety as
follows:
"10.08 [This Section intentionally deleted]"
1.15 Section 10.09 of the Agreement shall hereby read in its entirety as
follows:
"10.09 Piggyback Registration Rights Agreement. The Registration
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Rights Agreement described in Section 7.03 shall have been executed by
the Seller and USWeb."
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1.16 Section 10.10 of the Agreement shall hereby read in its entirety as
follows:
"10.10 Securities Exemption. The Original Payment shall be issued
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pursuant to a permissible private transaction under Regulation D,
Section 4(2), or other exemption under the Securities Act in the
reasonable judgment of Buyer's Counsel."
1.17 Section 11.01 of the Agreement shall hereby be amended in part to
replace "10:00 am local time on September 9, 1999" with the following:
"5:00 pm local time (or immediately following the Holder meeting to
be held on September 3, 1999) on September 3, 1999"
1.18 Section 11.03(a) of the Agreement shall hereby read in its entirety
as follows:
"11.03(a) [This Section intentionally deleted]"
1.19 Section 12.01 of the Agreement shall hereby read in its entirety as
follows:
"12.01 [This Section intentionally deleted]"
1.20 New Sections 12.09 and 12.10 shall hereby be inserted into the
Agreement to read in their entirety as follows:
"12.09 PNC National.
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(a) The Seller agrees to obtain all necessary or appropriate
consents, waivers, and approvals from PNC, National Association on or
before 30 days following the Closing Date.
12.10 S-3 Registration. Within 120 days following the Closing, USWeb
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shall upon the written request of the Seller use commercially
reasonable best efforts to effect a registration on Form S-3."
1.21 Except as amended as set forth above, the Agreement shall continue in
full force and effect.
1.22 This Amendment may be executed in counterparts, each of which shall
be enforceable against the parties actually executing such counterparts, and all
of which together shall constitute one instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by its duly authorized officer as of the date first above
written.
MITCHELL MADISON GROUP L.L.C.
By: -------------------------------
John Hogan
Chief Financial Officer
USWEB CORPORATION
By: -------------------------------
Carolyn Aver
Chief Financial Officer
USWEB ACQUISITION CORPORATION 137
By: -------------------------------
Carolyn Aver
President and Secretary
[Signature Page to Amendment No. 1 to Asset Purchase Agreement By and Among
Mitchell Madison Group, L.L.C. , USWeb Corporation, and USWeb Acquisition
Corporation 137]
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EXHIBIT 99.1
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USWeb/CKS Completes Acquisition of Mitchell Madison Group
Accelerates company's ability to help clients transform their businesses
in the new economy; client relationships expected to grow
SAN FRANCISCO--September 7, 1999--USWeb/CKS (Nasdaq: USWB) a leader in Internet
professional services, announced today that it has completed the acquisition of
the Mitchell Madison Group (MMG), a top-tier strategy consulting firm focused on
business-to-business commerce.
"We have moved at record speed to complete the acquisition of MMG," said
Robert Shaw, CEO of USWeb/CKS. "Our goal was to close the acquisition quickly
so we could maintain our focus on clients and our people. Now, as one firm, we
have unsurpassed Internet insight, depth of experience and scale that delivers
time-to-value to clients."
Effective with the closing of the acquisition, Tom Steiner has become
president and COO of USWeb/CKS and joined the board of directors. He is
responsible for field operations and practice development. Robert Shaw remains
CEO, responsible for overall company and executive leadership, corporate
strategy and development as well as business development -- with a focus on
growth, momentum and scale. Toby Corey, co-founder of USWeb/CKS, will share his
time between Intend Change and USWeb/CKS, providing strategic counsel to
USWeb/CKS and specific accounts.
"The most aggressive companies today realize that e-commerce and supply
chain optimization are not the end game. They are turning to USWeb/CKS to
completely reinvent themselves, and their markets," said Steiner. "We are
helping clients to change the rules, drive new efficiencies, build new
competitive advantages and make bold moves to fundamentally restructure their
business and the markets in which they operate. We call this transformation."
MMG was founded in 1994 by 30 alumni of McKinsey & Company and rapidly
established a premier reputation, working with some of the largest financial
institutions, telecommunications companies and technology leaders in the world.
The blue chip client relationships MMG brings to USWeb/CKS include seven of the
top ten commercial banks, seven of the top ten telecommunications companies, six
of the top ten investment banks and securities firms and five of
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the top ten leading European industrial companies. The acquisition of MMG adds
550 strategy consultants in ten locations around the world.
MMG's deep competencies complement USWeb/CKS's expertise and provide a
solid foundation for working in the digital economy, especially in business-to-
business markets. These competencies include global payment systems and e-
commerce, sourcing and supply chain transformation, electronic trading networks
and settlement systems, and risk management.
"The rationale for this acquisition was to meet our clients needs," said
Shaw. "Together we have relationships at the highest levels, the CEO, CFO, CIO,
CMO and the COO, giving us `roaming rights' in the entire executive suite and
allowing us to accelerate the way we deliver value to our clients."
"Our clients will benefit from the combined capabilities of USWeb/CKS and
MMG," added Steiner. "USWeb/CKS is the only Internet consulting firm that can
offer `best of breed' expertise and depth of talent in the disciplines of
strategy, marketing and technology. We expect client relationships to lengthen
and deepen."
Under the terms of the acquisition, USWeb/CKS will issue approximately 14.4
million shares of USWeb/CKS stock for all of the equity interests of MMG. Of
the shares to be issued, 50 percent will be issued at closing and 25 percent
will be issued on each of the first and second anniversaries, subject to
retention of MMG partners. The company has also established an incentive option
program for MMG employees.
About USWeb/CKS
USWeb/CKS (Nasdaq: USWB) seeks to transform businesses in the digital
economy and create sustainable market leadership for its clients. As a leading
Internet professional services firm, USWeb/CKS has created a new standard for
success in the digital economy--Time-to-Value. Time-to-Value means USWeb/CKS
applies its unrivaled insight, experience and scale to deliver breakthrough
results quickly. The Company is headquartered in San Francisco, California, with
more
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than 3,800 professionals in over 50 locations worldwide. Additional
information about USWeb/CKS is available at www.uswebcks.com or by calling
415/284-7070.
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Press Contact: Geoff Kerr, USWeb/CKS, 415/369-6723 or [email protected]
This press release contains "forward-looking statements" (as defined under
securities law) regarding the anticipated benefits of USWeb/CKS's acquisition of
MMG, expansion of client relationships, access to executives, and the potential
benefits to be derived. The companies' actual results, including integrating of
the two entities, maintaining customer relationships, retaining employees,
expanding client relationships, growing the overall business, realizing
anticipated synergies, or reaching any expected revenue or earnings objectives,
may differ materially and adversely from those discussed in this press release.
Factors that may cause such a difference include, without limitation, risks
associated with acquisitions, such as difficulties in integrating operations,
loss of customer accounts, inability to retain employees, decline in growth
rate, challenges or costs involved in combining technologies or services,
merger-related costs, adverse fluctuations in stock prices, litigation, and
diversion of management attention from other business concerns. The combined
entities may not be able to realize the intended benefits of the acquisition.
For additional information about factors that could affect the business of
USWeb/CKS, see the documents filed with the United States Securities and
Exchange Commission, including USWeb/CKS' report on Form 10-Q for the quarter
ended June 30, 1999.
USWeb/CKS and the USWeb/CKS logo are registered trademarks of USWeb
Corporation.
