<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/X/ Definitive Proxy Statement
CNET, INC.
----------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
BOARD OF DIRECTORS OF CNET, INC.
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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:
------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
</TABLE>
- --------------------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
CNET, INC.
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1997
---------------------
As a stockholder of CNET, Inc. (the "Company"), you are hereby given notice
of and invited to attend in person or by proxy the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at the Hyatt
Fisherman's Wharf, 55 North Point Street, San Francisco, California 94133, on
Thursday, May 22, 1997, at 9:00 a.m., local time, for the following purposes:
1. To elect three Class I Directors for a three-year term;
2. To approve the adoption of the CNET, Inc. 1997 Stock Option Plan;
3. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors for fiscal year 1997; and
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment(s) thereof.
The Board of Directors has fixed the close of business on April 10, 1997 as
the record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting and any adjournment(s)
thereof. Only stockholders of record at the close of business on the Record Date
are entitled to notice of and to vote at the Annual Meeting. The transfer books
of the Company will not be closed.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, MANAGEMENT DESIRES TO HAVE THE
MAXIMUM REPRESENTATION AT THE ANNUAL MEETING AND RESPECTFULLY REQUESTS THAT YOU
DATE, EXECUTE AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE ENCLOSED STAMPED
ENVELOPE FOR WHICH NO ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. A proxy may be revoked by a stockholder any time prior to its use as
specified in the enclosed proxy statement.
By Order of the Board of Directors
SHELBY W. BONNIE,
EXECUTIVE VICE PRESIDENT, CHIEF
OPERATING OFFICER, CHIEF FINANCIAL
OFFICER AND SECRETARY
San Francisco, California
April 23, 1997
YOUR VOTE IS IMPORTANT.
PLEASE EXECUTE AND RETURN PROMPTLY THE
ENCLOSED PROXY CARD IN THE POSTAGE PAID ENVELOPE PROVIDED HEREIN.
<PAGE>
CNET, INC.
150 Chestnut
San Francisco, California 94111
------------------------
PROXY STATEMENT
------------------
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 22, 1997
---------------------
TO OUR STOCKHOLDERS:
This Proxy Statement is furnished to stockholders of CNET, Inc. ("CNET" or
the "Company") for use at the Annual Meeting of Stockholders to be held at the
Hyatt Fisherman's Wharf, 55 North Point Street, San Francisco, California 94133,
on Thursday, May 22, 1997, at 9:00 a.m., local time, or at any adjournment or
adjournments thereof (the "Annual Meeting"). The enclosed proxy is being
solicited by the Board of Directors of the Company and is subject to revocation
at any time prior to the voting of the proxy. Unless a different choice is
indicated, all duly executed proxies received by the Company will be voted in
accordance with the instructions set forth on the back side of the proxy card.
The record of stockholders entitled to vote at the Annual Meeting was taken at
the close of business on April 10, 1997 (the "Record Date"). This Proxy
Statement and the enclosed proxy card are being sent or given to stockholders on
or about April 23, 1997.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
The accompanying proxy card is designed to permit each stockholder of record
at the close of business on the Record Date to vote with respect to the election
of directors, the approval of the 1997 CNET, Inc. Stock Option Plan (the "1997
Plan"), the ratification of the Company's independent auditors, and on any other
proposal properly brought before the Annual Meeting. The proxy card provides
space for a stockholder to (a) vote in favor of or to withhold voting for each
nominee for the Board of Directors, (b) vote for or against any proposal to be
considered at the Annual Meeting, or (c) abstain from voting on any proposal
other than election of directors if the stockholder chooses to do so. The
election of directors will be decided by a plurality of the votes cast at the
Annual Meeting by the holders of the Common Stock. For options granted under the
1997 Plan to qualify as incentive stock options, the 1997 Plan must be approved
by a majority of the shares of Common Stock issued and outstanding as of the
Record Date. In all other matters, the affirmative vote of a majority of the
votes present or represented by proxy and entitled to be cast at the Annual
Meeting by the holders of the Common Stock is required to take stockholder
action.
The presence at the Annual Meeting, in person or by proxy, of the holders of
a majority of the votes entitled to be cast by all holders of the Common Stock
will constitute a quorum for the transaction of business at the Annual Meeting.
If a quorum is not present, in person or by proxy, the Annual Meeting may be
adjourned from time to time until a quorum is obtained. Shares as to which
authority to vote has been withheld with respect to any matter brought to a vote
before the stockholders will not be counted as a vote in favor of such matter.
Abstentions and broker nonvotes will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business. With respect to
all matters other than the election of directors, an abstention will have the
same effect as a vote against any specified proposal. A broker nonvote will have
no effect on the outcome of any vote of the stockholders, except that a broker
nonvote will have the same effect as a vote against the 1997 Plan with respect
to the approval of the grant of incentive stock options under the 1997 Plan.
Stockholders are urged to sign the accompanying proxy card and return it
promptly.
When a signed proxy card is returned with choices specified with respect to
voting matters, the shares represented will be voted by the proxies designated
on the proxy card in accordance with the stockholder's instructions. The proxies
for the stockholders are Halsey M. Minor and Shelby W. Bonnie. A stockholder
wishing to
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<PAGE>
name another person as his or her proxy may do so by crossing out the names of
the designated proxies and inserting the name(s) of such other person(s) to act
as his or her proxy(ies). In that case, it will be necessary for the stockholder
to sign the proxy card and deliver it to the person named as his or her proxy
and for the person so named to be present and vote at the Annual Meeting. Proxy
cards so marked should not be mailed to the Company.
If a signed proxy card is returned and the stockholder has made no
specifications with respect to voting matters, the shares will be voted (a) for
the election of the three nominees for Class I Director, (b) for the adoption of
the 1997 Plan, (c) for the ratification of KPMG Peat Marwick LLP as the
Company's independent auditors for fiscal 1997, and (d) at the discretion of the
proxies, on any other matter that may properly come before the Annual Meeting or
any adjournment(s) of the Annual Meeting. Valid proxies will be voted at the
Annual Meeting and at any adjournment(s) of the Annual Meeting in the manner
specified.
Any stockholder giving a proxy has the unconditional right to revoke it at
any time before it is voted by any act inconsistent with the proxy, including
notifying the Secretary of the Company in writing, executing a subsequent proxy
or personally appearing at the Annual Meeting and casting a contrary vote.
However, no revocation will be effective unless notice of such revocation has
been received by the Company at or prior to the Annual Meeting.
The total issued and outstanding shares of common stock, $.0001 par value
per share (the "Common Stock"), as of April 10, 1997 consisted of 13,322,048
shares.
MATTERS TO BE BROUGHT BEFORE THE MEETING
PROPOSAL ONE--ELECTION OF CLASS I DIRECTORS
Three persons, Shelby W. Bonnie, Douglas Hamilton and Eric Robison, each of
whom is currently a Class I Director, are proposed to be re-elected as Class I
Directors at the Annual Meeting. If elected, each director will hold office
until the annual meeting of stockholders in the year 2000 or until his successor
is duly elected and qualified. The election of directors will be decided by a
plurality of the votes entitled to be cast at the meeting by the holders of the
Common Stock. All nominees have consented to serve if elected, but, if any
nominee becomes unable to serve, the persons named as proxies may exercise their
discretion to vote for a substitute nominee. Management has no reason to believe
that any of the nominees will be unable to serve.
Other nominations for election to the Board of Directors may be made by the
Board of Directors, a nominating committee appointed by the Board of Directors
or by any stockholder that has been the beneficial owner of at least $1,000 of
Common Stock for at least one year. Nominations made by stockholders for next
year's annual meeting must be made by written notice, certified mail,
return-receipt requested and received by the Secretary of the Company by
December 24, 1997. For information regarding each of the nominees for Class I
Director, see "Management".
THE BOARD OF DIRECTORS URGES STOCKHOLDERS TO VOTE "FOR"
EACH OF THE NOMINEES FOR DIRECTOR SET FORTH ABOVE
PROPOSAL TWO--APPROVAL OF THE CNET, INC. 1997 STOCK OPTION PLAN
Effective as of April 16, 1997, the Board of Directors adopted the CNET,
Inc. 1997 Stock Option Plan (the "1997 Plan"). A summary of the material
features of the 1997 Plan follows. This summary does not purport to be complete
and is qualified in its entirety by reference to the full text of the 1997 Plan,
a copy of which is attached as EXHIBIT A and is incorporated herein by
reference.
GENERAL. The purpose of the 1997 Plan is to attract and retain the best
available personnel for positions of substantial responsibility and to provide
incentives to such personnel to promote the success of the business of the
Company. The 1997 Plan provides for grants of stock options ("Options") to
certain directors and to officers, employees and consultants of the Company and
its subsidiaries. The 1997 Plan will be administered by the Compensation
Committee of the Board of Directors or by the Board of Directors as a whole.
As of March 31, 1997, the Company had options outstanding under its 1994
Stock Option Plan (the "1994 Plan") to purchase a total of 1,529,598 shares, and
an additional 503,499 shares were available for future grants
3
<PAGE>
under the 1994 Plan. The Board is recommending adoption of the 1997 Plan in
order to ensure that sufficient shares are available in the future to reward and
motivate existing employees and to attract new employees. In light of the rapid
growth experienced by the Company, the Board believes that it may be advisable
to employ one or more new senior level managers during 1997 and that it would be
necessary to offer significant equity compensation to attract the most qualified
candidates for any such position.
SHARES ISSUABLE THROUGH THE 1997 PLAN. A total of 1,000,000 shares of
Common Stock are authorized and reserved for issuance upon the exercise of
Options granted under the 1997 Plan. Proportionate adjustments will be made to
the number of shares of Common Stock subject to the 1997 Plan in the event of
any recapitalization, stock dividend, stock split, combination of shares or
other change in the Common Stock. The Board of Directors or the Compensation
Committee may also provide additional anti-dilution protection to a participant
under the terms of such participant's Option agreement. Shares of Common Stock
subject to Options that are canceled, terminated or forfeited will again be
available for issuance under the 1997 Plan.
ADMINISTRATION OF THE 1997 PLAN. The Board of Directors or the Compensation
Committee will administer the 1997 Plan and will have authority to select the
participants that will be granted Options, based on its own determinations and
the recommendations of management with respect to the contributions of each
participant to the success of the Company. No single participant may receive
options to purchase more than the total number of shares authorized for issuance
under the 1997 Plan. The Board of Directors or the Compensation Committee will
also have authority to terminate the plan or accelerate vesting of Options, to
determine the nature, extent, timing, exercise price, vesting and duration of
Options, to prescribe all other terms and conditions consistent with the 1997
Plan, to interpret the 1997 Plan, to establish any rules or regulations relating
to the 1997 Plan that it determines to be appropriate, and to make any other
determination that it believes necessary or advisable for the proper
administration of the 1997 Plan.
GRANT OF OPTIONS. The Board of Directors or the Compensation Committee may
grant nonqualified stock options or incentive stock options to purchase shares
of Common Stock; provided that, if the Compensation Committee does not consist
entirely of non-employee directors, then grants of Options to officers,
directors, and 10% shareholders must be approved by the Board of Directors as a
whole. The grant of Options will be evidenced by option agreements containing
such terms and provisions as are determined and approved by the Board of
Directors or the Compensation Committee, including, but not limited to, the term
of the Option, vesting of the Option, and the exercise price of the Option. The
Option exercise price may be paid in cash, or, at the Company's option, in
shares of Common Stock.
OPTION EXPIRATION AND TERMINATION. Subject to the expiration and
termination provisions of individual option agreements, qualified incentive
stock Options expire ten years after the date of grant or, if held by a ten
percent stockholder, such Options expire five years after the date of grant. The
expiration and termination periods of nonqualified stock options will be
determined by the Board of Directors or the Compensation Committee and set forth
in the individual Option agreements.
Subject to the expiration and termination provisions of individual option
agreements, if a participant dies or becomes disabled, all vested Options may be
exercised at any time within one year (or the remaining term of the Option, if
less). If a participant ceases to be a Company employee for any other reason, he
or she must exercise any vested Options within ninety days (or the remaining
term of the Option, if less).
AMENDMENTS TO THE 1997 PLAN. The Board of Directors may amend or
discontinue the 1997 Plan at any time, subject to certain restrictions set forth
in the 1997 Plan. For example, the Board of Directors could amend the 1997 Plan
to increase the number of shares reserved for issuance thereunder. Except in
limited circumstances, no amendment or discontinuance may adversely affect any
previously granted Option award without the consent of the recipient thereof.
FEDERAL INCOME TAX CONSEQUENCES. The following general description of
federal income tax consequences is based upon current statutes, regulations and
interpretations and does not purport to be complete. Reference should be made to
the applicable provisions of the Internal Revenue Code of 1986, as amended (the
"Code"). There also
4
<PAGE>
may be state, local and foreign income tax consequences applicable to
transactions involving Options. In addition, the following description does not
address specific tax consequences applicable to an individual participant who
receives an incentive Option and does not address special rules that may be
applicable to directors and officers.
Under existing federal income tax provisions, a participant who receives
stock options will not normally realize any income, nor will the Company
normally receive any deduction for federal income tax purposes, upon the grant
of an Option.
When a non-qualified stock option granted pursuant to the 1997 Plan is
exercised, the employee generally will realize ordinary income (compensation)
measured by the difference between the aggregate purchase price of the Common
Stock as to which the option is exercised and the aggregate fair market value of
the Common Stock on the exercise date, and the Company generally will be
entitled to a deduction in the year the Option is exercised equal to the amount
the employee is required to treat as ordinary income. Any taxable income
recognized in connection with a non-qualified stock option exercised by an
optionee who is also an employee of the Company will be subject to tax
withholding by the Company. The basis for determining gain or loss upon a
subsequent disposition of Common Stock acquired upon the exercise of a
non-qualified stock option will be the purchase price paid to the Company for
the Common Stock increased by an amount included in the optionee's taxable
income resulting from the exercise of such option. The holding period for
determining whether gain or loss on such subsequent disposition is short-term or
long-term generally begins on the date on which the optionee acquires the Common
Stock.
An employee generally will not recognize any income upon the exercise of an
incentive stock option, but the exercise may, depending on particular factors
relating to the employee, subject the employee to the alternative minimum tax.
An employee will recognize capital gain or loss in the amount of the difference
between the exercise price and the sale price on the sale or exchange of stock
acquired pursuant to the exercise of an incentive stock option, provided that
the employee does not dispose of such stock within two years from the date of
grant and one year from the date of exercise of the incentive stock option (the
"Required Holding Periods"). An employee disposing of such shares before the
expiration of the Required Holding Periods will recognize ordinary income equal
to the lesser of (i) the difference between the option price and the fair market
value of the stock on the date of exercise, or (ii) the total amount of gain
realized. The remaining gain or loss is generally treated as short term or long
term gain or loss depending on how long the shares are held. The Company will
not be entitled to a federal income tax deduction in connection with the
exercise of an incentive stock option, except where the employee disposes of the
shares of Common Stock received upon exercise before the expiration of the
Required Holding Periods.
STOCKHOLDER APPROVAL. The affirmative vote of the holders of a majority of
the total votes cast with respect to the 1997 Plan proposal is required to
approve the 1997 Plan. For Options granted under the 1997 Plan to qualify as
incentive stock options, the 1997 Plan must be approved by the affirmative votes
of the holders of a majority of the shares of Common Stock issued and
outstanding as of the Record Date. If the 1997 Plan is approved by a vote that
does not constitute a majority of the shares of Common Stock issued and
outstanding, then any Option granted under the 1997 Plan will be a nonqualified
Option. In considering whether to vote for approval of the 1997 Plan,
stockholders should be aware that each of the directors, nominees for director
and executive officers will be eligible for Option grants under the 1997 Plan.
The Board of Directors believes that the 1997 Plan is in the best interest of
the Company and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
APPROVAL OF THE CNET, INC. 1997 STOCK OPTION PLAN
PROPOSAL THREE--RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS.
KPMG Peat Marwick LLP, independent certified public accountants, served as
independent auditors for the Company for the fiscal year ended December 31, 1996
and has reported on the Company's financial statements. The Board of Directors,
upon the recommendation of the Audit Committee, has selected KPMG Peat Marwick
LLP as the Company's independent auditors for fiscal year 1997 and recommends
that the stockholders ratify this selection. The Board of Directors has been
advised that KPMG Peat Marwick LLP has no relationship with the Company or its
subsidiaries.
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<PAGE>
A representative of KPMG Peat Marwick LLP is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if he desires to do
so and is expected to be available to respond to appropriate questions.
Stockholder ratification is not required for the selection of KPMG Peat
Marwick LLP as the Company's independent auditors for fiscal year 1997 because
the Board of Directors has responsibility for selection of the Company's
independent auditors. The selection is being submitted for ratification with a
view toward soliciting the opinion of stockholders, which opinion will be taken
into consideration in future deliberations.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF KPMG PEAT MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and notes thereto set forth certain information with
respect to the beneficial ownership of the Company's Common Stock as of April
10, 1997 by (a) the Company's chief executive officer ("CEO") and the Company's
four most highly compensated executive officers (other than the CEO) who were
serving as executive officers as of December 31, 1996 (the "Named Executive
Officers"), (b) each director of the Company, (c) each person known by the
Company to be the beneficial owner of more than 5% of the Company's Common
Stock, and (d) all executive officers and directors of the Company as a group.
Except as otherwise indicated, each of the stockholders named below has sole
voting and investment power with respect to the shares of Common Stock
beneficially owned, subject to community property laws where applicable:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) SHARES
- ------------------------------------------------------------- ------------------ -------------
<S> <C> <C>
Halsey M. Minor ............................................. 2,719,600(2) 20.4%
150 Chestnut Street
San Francisco, CA 94111
Shelby W. Bonnie ............................................ 3,172,085(3) 23.8%
150 Chestnut Street
San Francisco, CA 94111
Kevin Wendle ................................................ 908,100(4) 6.7%
150 Chestnut Street
San Francisco, CA 94111
Lon E. Otremba .............................................. 91,639(5) *
150 Chestnut Street
San Francisco, CA 94111
Jonathan Rosenberg .......................................... 14,376(6) *
1375 Plainfield Avenue
Watchung, NJ 07060
John C. "Bud" Colligan ...................................... 20,000(6) *
300 Townsend, Suite 310W
San Francisco, CA 94103
Mitchell Kertzman ........................................... 20,000(6) *
6475 Christie Avenue
Emeryville, CA 94608
Douglas Hamilton ............................................ 346,606(7) 2.6%
1230 Avenue of the Americas
New York, NY 10020-1513
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) SHARES
- ------------------------------------------------------------- ------------------ -------------
<S> <C> <C>
Eric Robison ................................................ 2,817,727(8) 20.9%
110 110th Avenue, Suite 350
Bellevue, WA 98004
William Savoy ............................................... 2,817,727(8) 20.9%
110 110th Avenue, Suite 350
Bellevue, WA 98004
Vulcan Ventures Incorporated ................................ 2,797,727(9) 20.8%
110 110th Avenue, Suite 350
Bellevue, WA 98004
All executive officers and directors as a group (10
persons) .................................................. 10,130,133 72.0%
</TABLE>
- ------------------------
* Less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Percentages are based on the total
number of shares outstanding at April 10, 1997, plus the total number of
outstanding options or warrants held by each person that are exercisable
within 60 days of such date. Shares issuable upon exercise of outstanding
options and warrants, however, are not deemed outstanding for purposes of
computing the percentage ownership of any other person. Except as indicated
in the footnotes to this table and pursuant to applicable community property
laws, each stockholder named in the table has sole voting and investment
power with respect to the shares set forth opposite such stockholder's name.
(2) Includes 20,112 shares owned by members of Mr. Minor's immediate family and
120,000 shares held by a trust for the benefit of Mr. Minor's descendants,
as to which he disclaims beneficial ownership.
(3) Includes 223,139 shares held by Mr. Bonnie's parents and brother and a trust
for the benefit of his brother, as to which Mr. Bonnie disclaims beneficial
ownership, 8,735 shares held by a trust for Mr. Bonnie's benefit, 66,069
shares held by a partnership controlled by Mr. Bonnie, and 14,700 shares
issuable upon exercise of a warrant held by such partnership.
(4) Includes 222,384 shares subject to options granted under the 1994 Plan that
are exercisable within 60 days and 23,292 shares held by a trust for Mr.
Wendle's benefit.
(5) Includes 84,004 shares subject to options granted under the 1994 Plan that
are exercisable within 60 days.
(6) Consists of shares subject to options granted under the 1994 Plan that are
exercisable within 60 days.
(7) Includes 119,906 shares held by USA Networks and 206,700 shares subject to a
warrant held by USA Networks that became exercisable on July 1, 1996, as to
which Mr. Hamilton, an officer of USA Networks, disclaims beneficial
ownership. Also includes 20,000 shares subject to options granted under the
1994 Plan, which have been transferred by Mr. Hamilton to USA Networks.
(8) Includes 2,797,727 shares held by Vulcan or issuable upon exercise of
warrants held by Vulcan, as to which such director, who serves as an office
of Vulcan, disclaims beneficial ownership. See Note (9) below. Also includes
20,000 shares subject to options granted under the 1994 Plan that are
exercisable within 60 days.
(9) Includes 110,250 shares issuable upon exercise of warrants held by Vulcan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended (the "Exchange Act"),
requires the Company's executive officers and directors and persons who own more
than ten percent of a registered class of the Company's equity securities
(collectively, the "Reporting Persons") to file reports of ownership and changes
in ownership with the Securities and Exchange Commission and to furnish the
Company with copies of these reports. The Company believes that all filings
required to be made by the Reporting Persons during the fiscal year ended
December 31, 1996 were made on a timely basis.
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<PAGE>
MANAGEMENT
The following table sets forth the names, ages and positions of the Named
Executive Officers and directors of the Company as of April 1, 1997. Their
respective backgrounds are described following the table:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DIRECTOR
NAME AGE OR EMPLOYMENT SINCE
- ----------------------------- --- ------------------------------------------------------------------- -----------
<S> <C> <C> <C>
Halsey M. Minor(3)........... 32 Chairman of the Board, President, and Chief Executive Officer 1992
Shelby W. Bonnie(1).......... 32 Executive Vice President, Chief Operating Officer, Chief Financial 1993
Officer, Secretary, and Director
Kevin Wendle(2).............. 38 Executive Producer of TV.COM, Executive Consultant, and Director 1994
Lon E. Otremba............... 40 Executive Vice President of Network Sales --
Jonathan Rosenberg........... 45 Executive Vice President of Technology --
John C. "Bud" Colligan(2).... 42 Director 1996
Douglas Hamilton(1).......... 57 Director 1996
Mitchell Kertzman(3)......... 48 Director 1996
Eric Robison(1).............. 37 Director 1994
William Savoy(2)............. 32 Director 1994
</TABLE>
- ------------------------
(1) Nominee for Class I Director
(2) Class II Director
(3) Class III Director
HALSEY M. MINOR founded CNET in December 1992 and has served as Chairman of
the Board, President and Chief Executive Officer since that time. From October
1991 until founding CNET, Mr. Minor was employed by Russell Reynolds Associates,
Inc., an executive search firm, where he worked directly for Russell Reynolds,
Jr., the founder, Chairman and Chief Executive Officer. From July 1989 to June
1990, Mr. Minor was the Chief Executive Officer of Global Publishing
Corporation, a producer of computer-based multimedia business training
applications distributed over computer networks. Prior to founding Global
Publishing Corporation, Mr. Minor spent two years working as an investment
banker for Merrill Lynch Capital Markets in New York.
SHELBY W. BONNIE has served as Executive Vice President, Chief Operating
Officer, Chief Financial Officer and a director of the Company since July 1993.
From 1990 until joining the Company in 1993, Mr. Bonnie was a Managing Director
of Tiger Management Corporation, a New York based investment managing firm. From
1992 to 1993, Mr. Bonnie also served as a General Partner of Lynx Capital, where
he was responsible for oversight of a $90 million private equity fund. From 1986
to 1988, Mr. Bonnie worked as a financial analyst in the mergers and
acquisitions department at Morgan Stanley & Co. Inc.
KEVIN WENDLE, an Emmy-award winning television producer, joined the Company
in December 1993 as Executive Vice President and President of the Company's
television division, and he became Executive Producer of the Company's Internet
division in 1995. Mr. Wendle has served as a director of the Company since
December 1993. From March 1991 to December 1993, Mr. Wendle operated his own
independent production company, Kevin Wendle Productions, Inc. From November
1989 to March 1991, Mr. Wendle was the Chief Operating Officer of Quincy Jones
Entertainment Company, a joint venture between Quincy Jones and Time Warner.
Prior to joining Quincy Jones Entertainment Company, Mr. Wendle was one of the
six founding members of the team that launched the Fox Broadcasting Company.
Effective March 1, 1997, Mr. Wendle resigned as an officer of the Company, and
he has
8
<PAGE>
resigned as an employee of the Company effective May 1, 1997. Mr. Wendle will
continue to serve as an Executive Producer of the Company's TV.COM television
services and will perform other advisory and consulting services for the Company
until November 30, 1997.
LON E. OTREMBA joined CNET in August 1994 as Executive Vice President of
Network Sales. From 1991 to August 1994, Mr. Otremba worked at Ziff-Davis
Publishing Company as Associate Publisher of PC Magazine. From 1987 to 1991, Mr.
Otremba worked at CMP Publications, where he was responsible for publishing VAR
Business. Before joining CMP, Mr. Otremba worked in a variety of sales and
management capacities at Lebhar Friedman Publishing and as a product manager for
Procter & Gamble.
JONATHAN ROSENBERG has served as the Executive Vice President of Technology
for CNET since joining the Company in February 1995. Prior to joining CNET, Mr.
Rosenberg worked as project manager for Bellcore's Multimedia and Information
Access division, where he was involved in a range of projects, including
low-bandwidth multimedia, multimedia e-mail, electronic magazines, video
dialtone and server research. Prior to joining Bellcore, Mr. Rosenberg was
associate director of Carnegie Mellon University's Information Technology
Center, where he led a team that designed and implemented the networking and
computer infrastructure for the university, which is still in use today. Mr.
Rosenberg received a Ph.D in computer science from Carnegie Mellon University in
1983, where he was a Hertz Fellow from 1981 to 1983.
JOHN C. "BUD" COLLIGAN became a director of the Company in May 1966. From
December 1992 to November 1996, Mr. Colligan was Chief Executive Officer of
Macromedia, Inc., a multimedia software company. Mr. Colligan is currently
Chairman of the Board of Macromedia, Inc. From 1988 to 1992, Mr. Colligan was
Chief Executive Officer of Authorware, Inc., which merged with
Macromind.Paracamp in March 1992 to form Macromedia. From May 1983 to December
1988, Mr. Colligan was employed by Apple Computer, Inc. in a variety of
positions, most recently as Director of Marketing and Sales for Higher
Education. Mr. Colligan is a director of Macromedia, Inc. and S3 Corporation.
DOUGLAS HAMILTON became a director of the Company in 1996. Since January
1994, Mr. Hamilton has served as Chief Financial Officer and Senior Vice
President of Administration of USA Networks, and from April 1986 to January
1994, Mr. Hamilton served as Vice President of Finance and Administration of USA
Networks. For the eighteen years prior to joining USA Networks, Mr. Hamilton was
employed by W.R. Grace & Co., where he worked in a variety of positions,
including, most recently, Vice President of Finance and Administration for GHL
Management, Inc.
MITCHELL E. KERTZMAN became a director of the Company in May 1996. Since
July 1996, Mr. Kertzman has served as President and Chief Executive Officer of
Sybase, Inc., a leading provider of enterprise database software which Mr.
Kertzman joined in February 1995 as Executive Vice President. Prior to joining
Sybase, Inc., Mr. Kertzman served as Chief Executive Officer and a director of
Powersoft Corporation, a leading provider of application development tools since
its organization in 1974. Powersoft Corporation was acquired by Sybase, Inc. in
February 1995. Mr. Kertzman is a director of Sybase, Inc. and Shiva Corporation.
ERIC ROBISON became a director of the Company in December 1994. Since
January 1994, Mr. Robison has served as Business Development Associate of Vulcan
Ventures Inc. ("Vulcan"), a venture capital firm owned by Paul Allen, a
co-founder of Microsoft Corporation. Prior to joining Vulcan, Mr. Robison was
co-founder and Vice President of The Stanton Robison Group, Inc., a business
development, marketing and advertising consultant firm. Mr. Robison also served
in key marketing management positions with SGS, Inc., Ashton-Tate, Inc. and
Denny's Inc. Mr. Robison serves on the Board of Directors of Egghead Corporation
and ARI Network Services, Inc.
WILLIAM SAVOY became a director of the Company in December 1994. Since 1990,
Mr. Savoy has served as Vice President of Vulcan. Since 1990, Mr. Savoy has also
served as President of Vulcan Northwest Inc., a company wholly-owned by Mr.
Allen. Mr. Savoy serves on the Board of Directors of Harbinger Corporation,
Telescan, Inc., Ticket Master, Inc. and U.S. Satellite Broadcasting.
9
<PAGE>
MEETING ATTENDANCE AND COMMITTEES OF THE BOARD
The business of the Company is managed under the direction of the Board of
Directors. The Board meets during the Company's fiscal year to review
significant developments affecting the Company and to act on matters requiring
Board approval. The Board of Directors held three formal meetings and acted by
unanimous written consent six times during the fiscal year ended December 31,
1996. Mr. Wendle and Mr. Hamilton attended two of the three formal Board
meetings held during 1996, and the other directors attended all of the meetings
held subsequent to their election to the Board.
The Board of Directors has established an Audit Committee and a Compensation
Committee to devote attention to specific subjects and to assist the Board in
the discharge of its responsibilities. The functions of these committees and
their current members are described below.
AUDIT COMMITTEE. During the fiscal year, the Audit Committee was comprised
of John C. "Bud" Colligan, Douglas Hamilton and Eric Robison. The Audit
Committee reviews, acts on and reports to the Board of Directors with respect to
various auditing and accounting matters, including the selection of the
Company's independent accountants, the scope of the annual audits, fees to be
paid to the independent accountants and the accounting practices of the Company.
The Audit Committee held its first formal meeting in January 1997.
COMPENSATION COMMITTEE. During the fiscal year, the Compensation Committee
was comprised of Mitchell Kertzman and William Savoy. The Compensation Committee
advises the Board of Directors and consults with management concerning salaries,
incentives and other forms of compensation for the officers and other employees
of the Company and administers to the Company's existing Stock Option Plan and
Employee Stock Purchase Plan. The Compensation Committee did not hold any formal
meetings during 1996 but acted by unanimous consent 11 times.
The Board of Directors does not have a standing nominating committee or any
other committee performing a similar function. The function customarily
attributable to a nominating committee is performed by the Board of Directors as
a whole.
10
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth information with respect to the compensation
paid by the Company to the Named Executive Officers during fiscal 1996 and 1995:
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -------------
-------------------------------------- SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS(#) COMPENSATION
- ----------------------------------- --------- ---------- --------- --------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Halsey M. Minor ................... 1996 $ 175,000 -- -- -- --
Chairman of the Board, President 1995 $ 175,000 -- -- -- --
and Chief Executive Officer
Shelby W. Bonnie .................. 1996 $ 160,000 -- -- -- --
Executive Vice President, Chief 1995 $ 160,000 -- -- -- --
Operating Officer, Chief
Financial Officer and Secretary
Kevin Wendle(2) ................... 1996 $ 350,000 -- -- 8,100 --
Executive Producer of TV.COM 1995 $ 212,500 -- -- -- --
Lon E. Otremba .................... 1996 $ 199,000 -- -- 10,000 --
Executive Vice President of 1995 $ 172,000 -- -- -- --
Network Sales
Jonathan Rosenberg ................ 1996 $ 142,500 -- -- 27,500 --
Executive Vice President of 1995 $ 111,000(3) -- -- 45,000 --
Technology
</TABLE>
- ------------------------
(1) In each case, the aggregate value of perquisites and other personal benefits
does not exceed the lesser of $50,000 or 10% of the total annual salary and
bonus reported for the Named Executive Officer.
(2) Pursuant to a letter agreement with the Company dated February 20, 1997, Mr.
Wendle resigned as Executive Vice President, President of the Company's
television division, and Executive Producer of the Company's Internet
division effective March 1, 1997, and Mr. Wendle has resigned as an employee
of the Company effective May 1, 1997. See "--Employment Agreements."
(3) Mr. Rosenberg joined the Company in February 1995.
During 1996, options to purchase an aggregate of 864,200 shares of Common
Stock at fair market value as of the date of grant were granted under the
Company's existing 1994 Stock Option Plan. The following table provides
information regarding stock options granted during 1996 to the Named Executive
Officers.
11
<PAGE>
OPTION GRANTS DURING 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS DURING PRICE EXPIRATION
NAME GRANTED(#) 1996 ($/SHARE) DATE
- ------------------------------------------------------------ ----------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Halsey M. Minor............................................. -- -- -- --
Shelby W. Bonnie............................................ -- -- -- --
Kevin Wendle................................................ 8,100 0.9% $ 14.00 6/05/06
Lon E. Otremba.............................................. 10,000 1.2% $ 12.25 8/16/06
Jonathan Rosenberg.......................................... 7,500 0.9% $ 8.59 4/01/06
20,000 2.3% $ 12.25 8/16/06
</TABLE>
The following table sets forth information regarding the exercise of stock
options by the Named Executive Officers during 1996 and year-end option values:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT YEAR-END OPTIONS AT YEAR-END
ACQUIRED ON VALUE ------------------------- --------------------------
NAME EXERCISE(*) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- ---------------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Halsey M. Minor........... -- -- -- -- -- --
Shelby W. Bonnie.......... -- -- -- -- -- --
Kevin Wendle.............. 685,716(1) $ 4,311,073(2) 160,173 61,671 $ 4,360,144 $1,582,981
Lon E. Otremba............ -- -- 45,000 55,000 $ 1,220,850 $1,388,350
Jonathan Rosenberg........ -- -- 11,250 61,250 $ 299,138 $1,385,488
</TABLE>
- ------------------------
(1) Mr. Wendle exercised options to purchase 136,500 shares of Common Stock and
366,144 shares of Series B Preferred Stock, which were automatically
converted into 549,216 shares of Common Stock at the closing of the
Company's initial public offering.
(2) Reflects an estimate of the fair market value in April 1996, prior to the
Company's initial public offering.
DIRECTOR COMPENSATION
The Company does not pay cash compensation to its directors, but does
reimburse directors for expenses incurred in attending board and committee
meetings. Under the Company's 1994 Plan, each non-employee director received an
automatic grant of nonqualified stock options on June 5, 1996 to purchase 20,000
shares of Common Stock at an exercise price of $14.00 per share. Non-employee
directors elected to the Board in the future will automatically receive, upon
such election, nonqualified stock options to purchase 20,000 shares of Common
Stock at an exercise price equal to the fair market value of the Common Stock on
the date of grant. In addition, each non-employee director serving on June 30 of
each subsequent year (beginning on June 30, 1997) will automatically receive
nonqualified stock options to purchase 5,000 shares of Common Stock. All of the
options granted pursuant to these provisions will be immediately exercisable on
the date of grant, but the Common Stock issued upon exercise will be subject to
repurchase by the Company at original cost. This repurchase right will lapse,
and the optionee's rights with respect with respect to each grant will vest, in
a series of 48 equal monthly installments following the date of grant, for so
long as the optionee remains a director of the Company. In addition, vesting
will automatically accelerate upon any sale of the Company through a merger,
recapitalization, reorganization, asset
12
<PAGE>
sale, tender offer or similar event. The 1997 Plan contains identical terms and
provisions with respect to automatic grants of nonqualified stock options to
non-employee directors; provided that, to the extent a non-employee director
receives option grants under the 1994 Plan, such director will not receive a
duplicate option grant under the 1997 Plan.
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with Mr. Minor and Mr. Bonnie
in October 1994, pursuant to which Mr. Minor agreed to serve as Chief Executive
Officer of the Company and Mr. Bonnie agreed to serve as Chief Operating Officer
and Chief Financial Officer. The employment agreements provide that Mr. Minor
and Mr. Bonnie will receive annual base salaries of $175,000 and $160,000,
respectively, as well as bonuses in the discretion of the Board of Directors.
Each agreement has an initial term of three years (until October 19, 1997),
unless employment is terminated earlier for cause.
Pursuant to a letter agreement dated February 20, 1997 between Mr. Wendle
and the Company, Mr. Wendle resigned as an officer of the Company effective
March 1, 1997, and Mr. Wendle has resigned as an employee of the Company
effective May 1, 1997. Mr. Wendle will continue to serve as an Executive
Producer of the Company's TV.COM television services and will perform other
advisory and consulting services for the Company until November 30, 1997. Under
this agreement, Mr. Wendle received full compensation under his preexisting
employment agreement through February 28, 1997; from March 1, 1997 until
November 30, 1997, Mr. Wendle will receive a monthly salary of $500; and he will
be entitled to receive 25% of any Net Proceeds (as defined in his employment
agreement) earned by the Company through February 28, 2001 from the Company's
television series TV.COM.
The Company entered into an employment agreement with Mr. Otremba in August
1994, which was amended and extended in April 1996. The term of the agreement
expires on August 21, 1997 unless Mr. Otremba's employment is terminated earlier
for cause. The agreement provides for an annual base salary of $200,000 through
August 21, 1996 and $215,000 for the year ended August 21, 1997.
The Company entered into an employment agreement with Mr. Rosenberg in
February 1995, which was amended and extended in September 1995. The term of the
agreement expires on February 20, 1999 unless Mr. Rosenberg's employment is
terminated earlier for cause. The agreement provides for an annual base salary
of $136,500 through February 21, 1997, increasing to $143,300 for the year ended
February 20, 1998 and $149,000 for the year ended February 20, 1999. As of April
1, 1996, the Company increased Mr. Rosenberg's annual base salary to $145,000,
and as of January 6, 1997, the Company increased Mr. Rosenberg's annual base
salary to $165,000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1995, Vulcan loaned $3.0 million to the Company pursuant to a 9%
promissory note that matured in November 1995. In connection with this loan, the
Company issued Vulcan a five year warrant that entitles Vulcan to purchase
55,125 shares of Common Stock at an exercise price of $2.41 per share.
In November 1995 and January 1996, the Company sold an aggregate of 586,896
shares of Series D Convertible Preferred Stock in a private placement for an
aggregate price of $7.6 million ($8.59 per share on a common equivalent basis).
Mr. Bonnie purchased 12,842 shares in this private placement, and members of his
immediate family and certain trusts for the benefit of Mr. Bonnie and members of
his immediate family purchased an additional 34,938 shares. Vulcan purchased
242,108 shares in this private placement through cancellation of a $3.0 million
promissory note issued in May 1995 (together with accrued interest in the amount
of $118,351). On July 2, 1996 (the date of the Company's initial public
offering), each outstanding share of Series D Convertible Preferred Stock was
converted automatically into 1.5 shares of Common Stock.
In January 1996, a partnership controlled by Mr. Bonnie loaned $800,000 to
the Company pursuant to an 8% promissory note scheduled to mature in August
1996. In consideration for this loan, the Company issued the partnership a five
year warrant that entitles the partnership to purchase 14,700 shares of Common
Stock at an exercise price of $8.59 per share.
13
<PAGE>
In February 1996, Vulcan loaned an additional $3.0 million to the Company
pursuant to an 8% promissory note scheduled to mature in August 1996. In
consideration for this loan, the Company issued Vulcan a five year warrant that
entitles Vulcan to purchase 55,125 shares of Common Stock at an exercise price
of $8.59 per share.
In April 1996, the Company sold an aggregate of 453,169 shares of Series E
Convertible Preferred Stock in a private placement for an aggregate price of
$8.4 million ($12.33 per share on a common equivalent basis). Mr. Bonnie
purchased 10,000 shares in this private placement, and the partnership that Mr.
Bonnie controls purchased 44,046 shares through cancellation of an $800,000
promissory note issued in January 1996 (together with accrued interest in the
amount of $14,851). Vulcan purchased 164,501 shares in this private placement
through cancellation of a $3.0 million promissory note issued in February 1996
(together with accrued interest in the amount of $43,268). On July 2, 1996, each
outstanding share of Series E Convertible Preferred Stock was converted
automatically into 1.5 shares of Common Stock.
The Company believes that all of the transactions described above were on
terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. All of the Company's securities referenced above
were sold at prices equal to the fair market value of such securities, as
determined by the Board of Directors, on the date of issuance.
In April 1996, Mr. Wendle exercised certain options, which were granted to
him under the Company's existing Stock Option Plan, to purchase 366,144 shares
of the Company's Series B Convertible Preferred Stock for an aggregate exercise
price of $366,144 ($.067 per share on a common equivalent basis) and 136,500
shares of Common Stock for an aggregate exercise price of $328,510 ($2.41 per
share). Of the aggregate exercise price of $694,654, $100,000 was paid in cash
and the remaining $594,654 was paid with a promissory note executed by Mr.
Wendle, bearing interest at 8% per annum and maturing on April 30, 1997.
Although the Company has no present intention to do so, it may in the future
enter into other transactions and agreements incident to its business with its
directors, officers, principal stockholders and other affiliates. The Company
intends for all such transactions and agreements to be on terms no less
favorable to the Company than those obtainable from unaffiliated third parties
on an arm's-length basis. In addition, the approval of a majority of the
company's disinterested directors will be required for any such transactions or
agreements.
STOCKHOLDER PROPOSALS
A proper proposal submitted by a stockholder in accordance with applicable
rules and regulations for presentation at the Company's next annual meeting that
is received at the Company's principal executive office by December 24, 1997
will be included in the Company's proxy statement and form of proxy for that
meeting.
PERSONS MAKING THE SOLICITATION
The enclosed proxy is solicited on behalf of the Board of Directors of the
Company. The cost of soliciting proxies in the accompanying form will be paid by
the Company. Officers of the Company may solicit proxies by mail, telephone or
telegraph. Upon request, the Company will reimburse brokers, dealers, banks and
trustees, or their nominees, for reasonable expenses incurred by them in
forwarding proxy material to beneficial owners of shares of the Common Stock.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP, independent certified public accountants, has been
selected by the Board of Directors as the Company's independent auditor for the
current year. A representative of KPMG Peat Marwick LLP is expected to be
present at the Annual Meeting, will have an opportunity to make a statement if
he or she desires to do so and is expected to be available to respond to
appropriate questions.
14
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for action
at the meeting other than the matters set forth herein. Should any other matter
requiring a vote of stockholders arise, the proxies in the enclosed form confer
upon the person or persons entitled to vote the shares represented by such
proxies discretionary authority to vote the same in accordance with their best
judgment in the interest of the Company.
FINANCIAL STATEMENTS
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO EACH PERSON TO WHOM A COPY OF
THIS PROXY STATEMENT IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON AND BY FIRST CLASS MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE BUSINESS
DAY OF RECEIPT OF SUCH REQUEST, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB. REQUESTS SHOULD BE DIRECTED TO INVESTOR RELATIONS, CNET, INC., 150
CHESTNUT, SAN FRANCISCO, CALIFORNIA 94111; TELEPHONE NUMBER: (415) 395-7800; FAX
NUMBER: (415) 395-9205.
BY ORDER OF THE BOARD OF DIRECTORS,
SHELBY W. BONNIE,
EXECUTIVE VICE PRESIDENT, CHIEF
OPERATING OFFICER, CHIEF FINANCIAL
OFFICER, AND SECRETARY
April 23, 1997
15
<PAGE>
EXHIBIT A
CNET, INC.
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. This Plan shall be known as the CNET, Inc. 1997
Stock Option Plan. The purpose of the Plan is to attract and retain the best
available personnel for positions of substantial responsibility and to provide
incentives to such personnel to promote the success of the business of CNET,
Inc. and its subsidiaries.
Certain options granted under this Plan are intended to qualify as
"incentive stock options" pursuant to Section 422 of the Internal Revenue Code
of 1986, as amended from time to time, while certain other options granted under
the Plan will constitute nonqualified options.
2. DEFINITIONS. As used herein, the following definitions shall apply:
"BOARD" means the Board of Directors of the Corporation.
"COMMON STOCK" means the Common Stock, $.0001 par value per share, of the
Corporation. Except as otherwise provided herein, all Common Stock issued
pursuant to the Plan shall have the same rights as all other issued and
outstanding shares of Common Stock, including, but not limited to, voting
rights, the right to dividends, if declared and paid, and the right to pro rata
distributions of the Corporation's assets in the event of liquidation.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITTEE" means the committee described in SECTION 18 that administers the
Plan or, if no such committee has been appointed, the full Board.
"CONSULTANT" means any consultant or advisor who renders bona fide services
to the Corporation or one of its Subsidiaries, which services are not in
connection with the offer or sale of securities in a capital-raising
transaction.
"CORPORATION" means CNET, Inc., a Delaware corporation.
"DATE OF GRANT" means the date on which an Option is granted pursuant to
this Plan or, if the Board or the Committee so determines, the date specified by
the Board or the Committee as the date the award is to be effective.
"EMPLOYEE" means any officer or other employee of the Corporation or one of
its Subsidiaries (including any director who is also an officer or employee of
the Corporation or one of its Subsidiaries).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXERCISE PRICE" means the option price for a share of Common Stock subject
to an Option.
"FAIR MARKET VALUE" means the closing sale price (or average of the quoted
closing bid and asked prices if there is no closing sale price reported) of the
Common Stock on the trading day immediately prior to the date specified as
reported by the principal national exchange or trading system on which the
Common Stock is then listed or traded. If there is no reported price information
for the Common Stock, the Fair Market Value will be determined by the Board or
the Committee, in its sole discretion. In making such determination, the Board
or the Committee may, but shall not be obligated to, commission and rely upon an
independent appraisal of the Common Stock.
"INSIDER" means any officer, director, or 10% stockholder of the
Corporation.
"NON-EMPLOYEE DIRECTOR" means an individual who is a "non-employee director"
as defined in Rule 16b-3 under the Exchange Act.
"NONQUALIFIED OPTION" means any Option that is not a Qualified Option.
"OPTION" means a stock option granted pursuant to SECTION 6 of this Plan.
"OPTIONEE" means any Employee, Consultant or director who receives an
Option.
1
<PAGE>
"OUTSIDE DIRECTOR" means an individual who is an "outside director" within
the meaning of Treasury Regulation 1.162-27(e)(3).
"PLAN" means this CNET, Inc. 1997 Stock Option Plan, as amended from time to
time.
"QUALIFIED OPTION" means any Option that is intended to qualify as an
"incentive stock option" within the meaning of Section 422 of the Code.
"RULE 16B-3" means Rule 16b-3 of the rules and regulations under the
Exchange Act, as Rule 16b-3 may be amended from time to time, and any successor
provisions to Rule 16b-3 under the Exchange Act.
"SUBSIDIARY" means any now existing or hereinafter organized or acquired
company of which at least fifty percent (50%) of the issued and outstanding
voting stock is owned or controlled directly or indirectly by the Corporation or
through one or more Subsidiaries of the Corporation.
3. TERM OF PLAN. The Plan has been adopted by the Board effective as of
April 16, 1997. To permit the granting of Qualified Options under the Code, and
to qualify awards of Options hereunder as "performance based" under Section
162(m) of the Code, the Plan will be submitted for approval by the stockholders
of the Corporation by the affirmative votes of the holders of a majority of the
shares of Common Stock then issued and outstanding, for approval no later than
the next annual meeting of stockholders. If the Plan is not so approved by the
stockholders of the Corporation, then any Options previously granted under the
Plan will be Nonqualified Options, regardless of whether the option agreements
relating thereto purport to grant Qualified Options. The Plan shall continue in
effect until terminated pursuant to SECTION 18.
4. SHARES SUBJECT TO THE PLAN. Except as otherwise provided in SECTION 17
hereof, the aggregate number of shares of Common Stock issuable upon the
exercise of Options granted pursuant to this Plan shall be 1,000,000 shares.
Such shares may either be authorized but unissued shares or treasury shares. The
Corporation shall, during the term of this Plan, reserve and keep available a
number of shares of Common Stock sufficient to satisfy the requirements of the
Plan. If an Option should expire or become unexercisable for any reason without
having been exercised in full, then the shares that were subject thereto shall,
unless the Plan has terminated, be available for the grant of additional Options
under this Plan, subject to the limitations set forth above.
5. ELIGIBILITY. Qualified Options may be granted under SECTION 6 of the
Plan to such Employees of the Corporation or its Subsidiaries as may be
determined by the Board or the Committee. Nonqualified Options may be granted
under SECTION 6 of the Plan to such Employees, Consultants and directors of the
Corporation or its Subsidiaries as may be determined by the Board or the
Committee. Subject to the limitations and qualifications set forth in this Plan,
the Board or the Committee shall also determine the number of Options to be
granted, the number of shares subject to each Option grant, the exercise price
or prices of each Option, the vesting and exercise period of each Option,
whether an Option may be exercised as to less than all of the Common Stock
subject thereto, and such other terms and conditions of each Option, if any, as
are consistent with the provisions of this Plan. In connection with the granting
of Qualified Options, the aggregate Fair Market Value (determined at the Date of
Grant of a Qualified Option) of the shares with respect to which Qualified
Options are exercisable for the first time by an Optionee during any calendar
year (under all such plans of the Optionee's employer corporation and its parent
and subsidiary corporations as defined in Section 424(e) and (f) of the Code, or
a corporation or a parent or subsidiary corporation of such corporation issuing
or assuming an Option in a transaction to which Section 424(a) of the Code
applies (collectively, such corporations described in this sentence are
hereinafter referred to as "Related Corporations")) shall not exceed $100,000 or
such other amount as from time to time provided in Section 422(d) of the Code or
any successor provision.
6. GRANT OF OPTIONS. Except as provided in SECTION 18, the Board or the
Committee shall determine the number of shares of Common Stock to be offered
from time to time pursuant to Options granted hereunder and shall grant Options
under the Plan. The grant of Options shall be evidenced by Option agreements
containing such terms and provisions as are approved by the Board or the
Committee and executed on behalf of the Corporation by an
2
<PAGE>
appropriate officer. In connection with the granting of any Options under the
Plan, the aggregate number of shares of Common Stock issuable upon exercise of
Options granted to any single Optionee shall not exceed 1,000,000 shares.
7. TIME OF GRANT OF OPTIONS. The Date of Grant of an Option under the Plan
shall be the date on which the Board or the Committee awards the Option or, if
the Board or the Committee so determines, the date specified by the Board or the
Committee as the date the award is to be effective. Notice of the grant shall be
given to each Optionee promptly after the date of such grant.
8. PRICE. The Exercise Price for each share of Common Stock subject to an
Option granted pursuant to SECTION 6 of the Plan shall be determined by the
Board or the Committee at the Date of Grant; provided, however, that (a) the
Exercise Price for any Option shall not be less than 100% of the Fair Market
Value of the Common Stock at the Date of Grant, and (b) if the Optionee owns on
the Date of Grant more than 10 percent of the total combined voting power of all
classes of stock of the Corporation or its parent or any of its subsidiaries, as
more fully described in Section 422(b)(6) of the Code or any successor provision
(such stockholder is referred to herein as a "10-PERCENT STOCKHOLDER"), the
Exercise Price for any Qualified Option granted to such Optionee shall not be
less than 110% of the Fair Market Value of the Common Stock at the Date of
Grant.
9. VESTING. Subject to SECTION 11 of this Plan, each Option shall vest or
be subject to forfeiture in accordance with the provisions set forth in the
applicable Option agreement. The Board or the Committee may, but shall not be
required to, permit acceleration of vesting or termination of forfeiture
provisions upon any sale of the Corporation or similar transaction. An Option
agreement may contain such additional provisions with respect to vesting as the
Board or the Committee may specify.
10. EXERCISE. An Optionee may pay the Exercise Price of the shares of
Common Stock as to which an Option is being exercised by the delivery of cash,
check or, at the Corporation's option, by the delivery of shares of Common Stock
having a Fair Market Value on the exercise date equal to the Exercise Price.
If the shares to be purchased are covered by an effective registration
statement under the Securities Act of 1933, as amended, any Option granted under
the Plan may be exercised by a broker-dealer acting on behalf of an Optionee if
(a) the broker-dealer has received from the Optionee or the Corporation a
fully-and duly-endorsed agreement evidencing such Option, together with
instructions signed by the Optionee requesting the Corporation to deliver the
shares of Common Stock subject to such Option to the broker-dealer on behalf of
the Optionee and specifying the account into which such shares should be
deposited, (b) adequate provision has been made with respect to the payment of
any withholding taxes due upon such exercise, and (c) the broker-dealer and the
Optionee have otherwise complied with Section 220.3(e)(4) of Regulation T, 12
CFR Part 220, or any successor provision.
11. WHEN QUALIFIED OPTIONS MAY BE EXERCISED. No Qualified Option shall be
exercisable at any time after the expiration of ten (10) years from the Date of
Grant; PROVIDED, HOWEVER, that if the Optionee with respect to a Qualified
Option is a 10-Percent Stockholder on the Date of Grant of such Qualified
Option, then such Option shall not be exercisable after the expiration of five
(5) years from its Date of Grant. In addition, if an Optionee of a Qualified
Option ceases to be an employee of the Corporation or any related corporation
for any reason, such Optionee's vested Qualified Options shall not be
exercisable after (a) 90 days following the date such Optionee ceases to be an
employee of the Corporation or any related corporation, if such cessation of
service is not due to the death or permanent and total disability (within the
meaning of Section 22(e)(3) of the Code) of the Optionee, or (b) twelve months
following the date such Optionee ceases to be an employee of the Corporation or
any related corporation, if such cessation of service is due to the death or
permanent and total disability (as defined above) of the Optionee. Upon the
death of an Optionee, any vested Qualified Option exercisable on the date of
death may be exercised by the Optionee's estate or by a person who acquires the
right to exercise such Qualified Option by bequest or inheritance or by reason
of the death of the Optionee, provided that such exercise occurs within both the
remaining option term of the Qualified Option and twelve months after the date
of the Optionee's death. This SECTION 11 only provides the outer limits of
allowable exercise dates with respect to Qualified Options; the Board or the
Committee may determine that the exercise period for a Qualified Option shall
have a shorter duration than as specified above.
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12. OPTION FINANCING. Upon the exercise of any Option granted under the
Plan, the Corporation may, but shall not be required to, make financing
available to the Optionee for the purchase of shares of Common Stock pursuant to
such Option on such terms as the Board or the Committee may specify.
13. WITHHOLDING OF TAXES. The Board or the Committee shall make such
provisions and take such steps as it may deem necessary or appropriate for the
withholding of any taxes that the Corporation is required by any law or
regulation of any governmental authority to withhold in connection with any
Option including, but not limited to, withholding the issuance of all or any
portion of the shares of Common Stock subject to such Option until the Optionee
reimburses the Corporation for the amount it is required to withhold with
respect to such taxes, canceling any portion of such issuance in an amount
sufficient to reimburse the Corporation for the amount it is required to
withhold or taking any other action reasonably required to satisfy the
Corporation's withholding obligation.
14. CONDITIONS UPON ISSUANCE OF SHARES. The Corporation shall not be
obligated to sell or issue any shares upon the exercise of any Option granted
under the Plan unless the issuance and delivery of shares complies with all
provisions of applicable federal and state securities laws and the requirements
of any national exchange or trading system on which the Common Stock is then
listed or traded.
As a condition to the exercise of an Option, the Corporation may require the
person exercising the Option or receiving the grant to make such representations
and warranties as may be necessary to assure the availability of an exemption
from the registration requirements of applicable federal and state securities
laws.
The Corporation shall not be liable for refusing to sell or issue any shares
covered by any Option if the Corporation cannot obtain authority from the
appropriate regulatory bodies deemed by the Corporation to be necessary to sell
or issue such shares in compliance with all applicable federal and state
securities laws and the requirements of any national exchange or trading system
on which the Common Stock is then listed or traded. In addition, the Corporation
shall have no obligation to any Optionee, express or implied, to list, register
or otherwise qualify the shares of Common Stock covered by any Option.
No Optionee will be, or will be deemed to be, a holder of any Common Stock
subject to an Option unless and until such Optionee has exercised his or her
Option and paid the purchase price for the subject shares of Common Stock. Each
Qualified Option under this Plan shall be transferable only by will or the laws
of descent and distribution and shall be exercisable during the Optionee's
lifetime only by such Optionee. Each Nonqualified Option under this Plan shall
be transferable only by will, the laws of descent and distribution, pursuant to
a domestic relations order issued by a court of competent jurisdiction, or to a
trust established by the Optionee for estate planning purposes.
15. RESTRICTIONS ON SHARES. Shares of Common Stock issued pursuant to the
Plan may be subject to restrictions on transfer under applicable federal and
state securities laws. The Board may impose such additional restrictions on the
ownership and transfer of shares of Common Stock issued pursuant to the Plan as
it deems desirable; any such restrictions shall be set forth in any Option
agreement entered into hereunder.
16. MODIFICATION OF OPTIONS. Except as provided in SECTION 18 of this
Plan, at any time and from time to time, the Board or the Committee may execute
an instrument providing for modification, extension or renewal of any
outstanding Option, provided that no such modification, extension or renewal
shall impair the Option without the consent of the holder of the Option.
Notwithstanding the foregoing, in the event of such a modification,
substitution, extension or renewal of a Qualified Option, the Board or the
Committee may increase the exercise price of such Option if necessary to retain
the qualified status of such Option.
17. EFFECT OF CHANGE IN STOCK SUBJECT TO THE PLAN. In the event that each
of the outstanding shares of Common Stock (other than shares held by dissenting
stockholders) shall be changed into or exchanged for a different number or kind
of shares of stock of the Corporation or of another corporation (whether by
reason of merger, consolidation, recapitalization, reclassification, split-up,
combination of shares or otherwise), or in the event a stock split or stock
dividend occurs, then there shall be substituted for each share of Common Stock
then subject to Options or available for Options the number and kind of shares
of stock into which each outstanding share of Common Stock (other than shares
held by dissenting stockholders) shall be so changed or exchanged, or
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the number of shares of Common Stock as is equitably required in the event of a
stock split or stock dividend, together with an appropriate adjustment of the
Exercise Price. The Board may, but shall not be required to, provide additional
anti-dilution protection to an Optionee under the terms of the individual's
Option agreement.
18. ADMINISTRATION.
(a) The Plan shall be administered by the Board or by a committee of the
Board comprised solely of two or more Outside Directors appointed by the Board
(the "COMMITTEE"). Options may be granted under SECTION 6, only (i) by the Board
as a whole, or (ii) by majority agreement of the members of the Committee;
provided that, if the Committee does not consist entirely of Non-Employee
Directors, then Options may be granted to Insiders under SECTION 6 only by the
Board as a whole. Option agreements, in the forms as approved by the Board or
the Committee, and containing such terms and conditions consistent with the
provisions of this Plan as are determined by the Board or the Committee, may be
executed on behalf of the Corporation by the Chairman of the Board, the
President or any Vice President of the Corporation. The Board or the Committee
shall have complete authority to construe, interpret and administer the
provisions of this Plan and the provisions of the Option agreements granted
hereunder; to prescribe, amend and rescind rules and regulations pertaining to
this Plan; to suspend or discontinue this Plan; and to make all other
determinations necessary or deemed advisable in the administration of the Plan.
The determinations, interpretations and constructions made by the Board or the
Committee shall be final and conclusive. No member of the Board or the Committee
shall be liable for any action taken, or failed to be taken, made in good faith
relating to the Plan or any award thereunder, and the members of the Board or
the Committee shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage or expense (including
attorneys' fees) arising therefrom to the fullest extent permitted by law.
(b) Although the Board or the Committee may suspend or discontinue the Plan
at any time, all Qualified Options must be granted within ten (10) years from
the effective date of the Plan or the date the Plan is approved by the
stockholders of the Corporation, whichever is earlier.
(c) Each Outside Director will be eligible to receive automatic grants of
Options as follows:
(i) Each Outside Director will automatically be granted Nonqualified
Options to purchase 20,000 shares of Common Stock (the "INITIAL GRANT") on
the date such Outside Director is first elected to the Board.
(ii) On June 30 of each year, each Outside Director then serving on the
Board will automatically be granted Nonqualified Options to purchase 5,000
shares of Common Stock (each, an "ANNUAL GRANT"). The number of shares
subject to Initial Grants and Annual Grants will be adjusted in accordance
with SECTION 17.
(iii) The purchase price for Common Stock subject to Initial Grants and
Annual Grants will be 100% of the Fair Market Value of the Common Stock on
the Date of Grant.
(iv) All Options granted under this Section 18(c) will be evidenced by
Option agreements substantially in the form of EXHIBIT A hereto.
(v) All Options granted under this Section 18(c) will be exercisable on
and after the Date of Grant until the earlier of (A) ten years after the
Date of Grant, or (B) 90 days after the date such Outside Director is no
longer a director of the Corporation or an officer or employee of the
Corporation or a Related Corporation; provided that Common Stock issuable
upon exercise of such Options will be subject to a repurchase option in
favor of the Corporation, as set forth in the applicable Option agreement,
until such shares vest, which will occur in equal monthly installments
during the 48 months following the Date of Grant.
(vi) This Section 18(c) may not be amended more than once every six
months, other than to comport with changes in the Code or in the Employee
Retirement Income Security Act of 1974, as amended, or changes in the rules
promulgated thereunder, or other applicable law, unless, at the time of
amendment, such limitation on amendments is not necessary in order for the
Plan to comply with the requirements of Rule 16b-3 or the Corporation is not
then subject to the provisions of Section 16 of the Exchange Act.
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(vii) Notwithstanding the foregoing, to the extent an Outside Director
receives an automatic grant of Nonqualified Options under SECTION 18(C) of
the Corporation's 1994 Stock Option Plan, as amended, such director is not
eligible to receive a duplicate grant of Nonqualified Options under this
SECTION 18(C).
(d) Subject to any applicable requirements of Rule 16b-3 or of any national
exchange or trading system on which the Common Stock is then listed or traded,
the Board may amend any provision of this Plan in any respect in its discretion.
19. CONTINUED EMPLOYMENT NOT PRESUMED. Nothing in this Plan or any
document describing it nor the grant of any Option shall give any Optionee the
right to continue in the employment of the Corporation or affect the right of
the Corporation to terminate the employment of any such person with or without
cause.
20. LIABILITY OF THE CORPORATION. Neither the Corporation, its directors,
officers or employees or the Committee, nor any Subsidiary which is in existence
or hereafter comes into existence, shall be liable to any Optionee or other
person if it is determined for any reason by the Internal Revenue Service or any
court having jurisdiction that any Qualified Option granted hereunder does not
qualify for tax treatment as an incentive stock option under Section 422 of the
Code.
21. GOVERNING LAW. THE PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF STATE OF DELAWARE AND THE UNITED STATES, AS
APPLICABLE, WITHOUT REFERENCE TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
22. SEVERABILITY OF PROVISIONS. If any provision of this Plan is
determined to be invalid, illegal or unenforceable, such invalidity, illegality
or unenforceability shall not affect the remaining provisions of the Plan, but
such invalid, illegal or unenforceable provision shall be fully severable, and
the Plan shall be construed and enforced as if such provision had never been
inserted herein.
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CNET, INC.
STOCK OPTION AGREEMENT
Optionee:
Effective Date of Grant:
Number of Shares Subject to Option:
Exercise Price per Share:
WHEREAS, pursuant to the CNET, Inc. 1997 Stock Option Plan (the "Plan"), the
Optionee identified above is eligible to receive an automatic grant of an option
to purchase shares of the Company's common stock, par value $.0001 per share
(the "Common Stock");
NOW, THEREFORE, in consideration of the Optionee's service as a director of
the Company and the mutual agreements and covenants contained in this Stock
Option Agreement (the "Agreement"), the Company hereby grants to Optionee a
non-qualified stock option (the "Option") to purchase the number of shares of
Common Stock set forth above, at the per share exercise price set forth above,
on the terms and conditions and subject to the restrictions set forth in this
Agreement and in the Plan.
1. GENERAL PROVISIONS
Subject to the other terms and provisions hereof, this Option is exercisable
in full, as to all of the shares of Common Stock subject hereto, immediately
upon grant and will remain exercisable until the earlier of (a) ten years after
the Effective Date of Grant, or (b) 90 days after the date the Optionee is no
longer a director of the Company or an officer or employee of the Company or a
Related Corporation. The Company may suspend for a reasonable period or periods
the time during which this Option may be exercised if, in the opinion of the
Company, such suspension is required to enable the Company to remain in
compliance with regulatory requirements relating to the issuance of shares of
Common Stock.
The Option is subject to the provisions of the Plan, which is incorporated
in its entirety into this Agreement by this reference. A copy of the Plan has
been provided to the Optionee by the Company, and the Optionee hereby
acknowledges receipt of the Plan. Additional copies of the Plan are available
from the Company upon request. All defined terms contained herein have the
meanings provided in the Plan, except to the extent otherwise provided herein.
2. EXERCISE OF OPTION
The Option may be exercised only by written notice (the "Exercise Notice")
by the Optionee to the Company at its principal executive office. The Exercise
Notice will be deemed given when deposited in the U. S. mails, postage prepaid,
addressed to the Company at its principal executive office, or when delivered in
person to an officer of the Company at that office. The date of exercise of the
Option (the "Exercise Date") will be the date of the postmark if the notice is
mailed or the date received if the notice is delivered other than by mail. The
Exercise Notice will state the number of shares in respect of which the Option
is being exercised and, if the shares for which the Option is being exercised
are to be evidenced by more than one stock certificate, the denominations in
which the stock certificates are to be issued. The Exercise Notice will be
signed by the Optionee and will include the complete address and social security
number of the Optionee.
The Exercise Notice must be accompanied by payment of the aggregate Exercise
Price of the shares purchased by cash or check payable to the order of the
Company or by delivery of shares of Common Stock owned by the Optionee, in form
satisfactory to the Company, tendered in full or partial payment of the Exercise
Price. If shares of Common Stock are used to pay part or all of the Exercise
Price, the value of such shares will be the Fair Market Value of the Common
Stock on the Exercise Date.
The certificates for shares of Common Stock as to which the Option has been
exercised will be registered in the name of the Optionee and will be delivered
to the Optionee at the address specified in the Exercise Notice. In
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exercising the Option, the Optionee will make payment or other arrangements (for
example, by requesting that the Company withhold shares of Common Stock
otherwise issuable upon such exercise) satisfactory to the Company for
withholding federal and state taxes, if applicable, with respect to the shares
acquired upon exercise of the Option. In the event the person exercising the
Option is a transferee of the Optionee, the Exercise Notice will be accompanied
by appropriate proof of the right of such transferee to exercise the Option.
Subject to the limitations expressed herein, the Option may be exercised
with respect to all or a part of the shares of Common Stock subject to it;
provided, however, that no single partial exercise of the Option will result in
the issuance of less than one-fourth (1/4) of the shares initially subject to
the option.
Neither the Optionee nor any person claiming under or through the Optionee
will be or have any rights or privileges of a stockholder of the Company in
respect of any of the shares issuable upon exercise of the Option, unless and
until certificates representing such shares have been issued (as evidenced by
the appropriate entry on the books of the Company).
3. REPURCHASE OPTION
(a) VESTING. The shares of Common Stock issued or issuable upon exercise
of the Option (the "Option Shares") will vest in 48 equal monthly installments,
beginning on the first day of the first month beginning after the Effective Date
of Grant, but only for so long as the Optionee remains a director of the
Company; provided that all remaining unvested Option Shares will vest
immediately upon a Sale of the Company. For such purposes, a "Sale of the
Company" means a merger, consolidation, recapitalization, reorganization or
sale, lease or transfer of all or substantially all of the Company's assets, or
the completion of a tender offer for a majority of the Company's outstanding
Common Stock, if the stockholders of the Company immediately before such
transaction (or one or more persons or entities controlled by such stockholders)
beneficially own, immediately after or as a result of such transaction, equity
securities of the surviving or acquiring entity (or such entity's parent),
possessing less than 51% of the voting power and equity interest in the
surviving or acquiring entity (or its parent).
(b) RESTRICTIONS ON TRANSFER. The Optionee may not sell, pledge or
otherwise transfer unvested Option Shares, without the prior written consent of
the Company, and the Company will retain all certificates evidencing unvested
Option Shares on behalf of the Optionee.
(c) REPURCHASE OPTION. If the Optionee ceases to be a director of the
Company prior to the time at which all Option Shares are vested (unless the
Optionee is removed as a director in connection with a Sale of the Company), the
Company will have the option to repurchase any unvested Option Shares at a price
equal to the exercise price paid to acquire such Option Shares (the "Repurchase
Option"). The Company may exercise the Repurchase Option, in whole or in party,
by giving written notice (the "Repurchase Notice") to the Optionee within 90
days following the date on which the Optionee ceases to be a director of the
Company, which notice will indicate the number of Option Shares to be
repurchased. If the Company elects to exercise the Repurchase Option, the
closing of the purchase and sale will occur on the 60th day following delivery
of the Repurchase Notice (or such earlier date as may be agreed between the
Company and the Optionee). At such closing, the Company will deliver the
consideration payable to the order of the Optionee, in the form of a company
check, against delivery by the Optionee of certificates evidencing the Option
Shares being so purchased, free and clear of all liens, claims and encumbrances
and endorsed in good form for transfer.
4. GOVERNING LAW
The parties agree that this Agreement will be governed by and construed in
accordance with the substantive laws (but not the conflict of law principles) of
the State of Delaware.
5. ENTIRE AGREEMENT
Except for the Plan, this Agreement constitutes the entire agreement between
the parties pertaining to the subject matter contained herein and supersedes all
prior and contemporaneous agreements, representations and understandings of the
parties. No supplement, modification or amendment of this Agreement will be
binding unless
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executed in writing by the party to be charged therewith. No waiver of any of
the provisions of this Agreement will be deemed to constitute a waiver of any
other provision, whether or not similar, nor will any waiver constitute a
continuing waiver.
6. DUPLICATE ORIGINALS
Duplicate originals of this document will be executed by both the Company
and the Optionee, each of which will retain one duplicate original.
CNET, INC.
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
ACCEPTED:
- -----------------------------------
Name:
- -----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
Telecopy:
--------------------------------
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CNET, INC.
BOARD OF DIRECTORS PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS AT
9:00 A.M., THURSDAY, MAY 22, 1997
HYATT FISHERMAN'S WHARF, 55 NORTH POINT STREET, SAN FRANCISCO, CALIFORNIA 94133
The undersigned stockholder of CNET, Inc. (the "Company") hereby appoints
Halsey M. Minor and Shelby W. Bonnie, or either of them, as proxies, each
with full powers of substitution, to vote the shares of the undersigned at
the above-stated Annual Meeting and at any adjournment(s) thereof:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED
IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE. IF A CHOICE
IS NOT INDICATED WITH RESPECT TO ITEMS (1), (2) AND (3), THIS PROXY WILL BE
VOTED "FOR" SUCH ITEMS. THE PROXIES WILL USE THEIR DISCRETION WITH RESPECT TO
ANY MATTER REFERRED TO IN ITEM (4). THIS PROXY IS REVOCABLE AT ANY TIME
BEFORE IT IS EXERCISED.
Receipt herewith of the Company's Annual Report and Notice of Meeting and
Proxy Statement, dated April 23, 1997, is hereby acknowledged.
PLEASE SIGN, DATE AND MAIL TODAY.
<PAGE>
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY / /
FOR all nominees WITHHOLD
listed below AUTHORITY
(except as provided to to vote for all nominees
the contrary below) listed below
(1) Election of Class I
Directors: / / / /
Shelby W. Bonnie,
Douglas Hamilton and
Eric Robison
(INSTRUCTION: To withhold authority
to vote for any individual nominee(s),
write that nominee's name on the space
provided below):
_____________________________________________
FOR AGAINST ABSTAIN
(2) Approval of CNET, Inc. 1997 New
Stock Option Plan: / / / / / /
FOR AGAINST ABSTAIN
(3) Ratification of KPMG Peat Marwick
LLP, independent certified public / / / / / /
accountants, to serve as the Company's
independent auditors for the fiscal
year ending December 31, 1997:
(4) On any other business that may properly
come before the meeting; hereby revoking
any proxy or proxies heretofore given by
the undersigned.
Dated:__________________________________, 1997.
(Joint owners must EACH sign. Please sign EXACTLY as your name(s) appear(s) on
this card. When signing as attorney, trustee, executor,_______________________
administrator, guardian or corporate officer, please give your FULL title.)
_______________________________________________
(Signature of Stockholder(s))
