<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 28, 2000
REGISTRATION NO. 333-
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
DOUBLECLICK INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
-------------------
<TABLE>
<S> <C> <C>
DELAWARE 7319 13-3870996
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
450 WEST 33RD STREET
NEW YORK, NEW YORK 10001
(212) 683-0001
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------
KEVIN P. RYAN
CHIEF EXECUTIVE OFFICER
DOUBLECLICK INC.
450 WEST 33RD STREET
NEW YORK, NEW YORK 10001
(212) 683-0001
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
-------------------
COPIES TO:
<TABLE>
<S> <C>
SCOTT L. KAUFMAN, ESQ. J. PAGE DAVIDSON, ESQ.
MATTHEW F. HERMAN, ESQ. BASS, BERRY & SIMS PLC
BROBECK, PHLEGER & HARRISON LLP 315 DEADERICK STREET, SUITE 2700
1633 BROADWAY NASHVILLE, TENNESSEE 37238-0002
NEW YORK, NEW YORK 10019 TELEPHONE: (615) 742-6200
TELEPHONE: (212) 581-1600 FACSIMILE: (615) 742-2753
FACSIMILE: (212) 586-7878
</TABLE>
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At the
effective time of the merger of @plan.inc ('@plan') with and into a wholly owned
subsidiary of the Registrant, which shall occur as soon as practicable after the
effective date of this Registration Statement and the satisfaction or waiver of
all conditions to the closing of such merger.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
PROPOSED
AMOUNT MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE(2) REGISTRATION FEE(2)
----------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.001 per share...... 5,667,684 N/A $72,474,685 $19,134
</TABLE>
(1) Represents shares of common stock of the Registrant to be issued in
connection with the merger in exchange for shares of the capital stock of
@plan and upon exercise of @plan warrants and in-the-money options which are
being assumed by the Registrant, assuming the Registrant elected to pay 80%
of the merger consideration in shares of its common stock valued at an
assumed price of $14.8125, the closing price of the Registrant's common
stock on the Nasdaq National Market on November 27, 2000.
(2) Pursuant to Rule 457(f), the proposed maximum aggregate offering price and
the amount of the registration fee have been computed based upon the market
value of the securities to be canceled in the merger, consisting of
approximately 13,117,590 shares of @plan common stock at an average of
the high and low prices for such common stock as reported on the Nasdaq
National Market on November 20, 2000, which was $7.125 per share, less $1.60
per share in cash consideration to be paid by DoubleClick in the merger.
-------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
________________________________________________________________________________
<PAGE>
[@PLAN LOGO]
@PLAN.INC
THREE LANDMARK SQUARE, SUITE 400
STAMFORD, CONNECTICUT 06901
, 2000
Dear Shareholder:
I am writing to you today about our proposed merger with DoubleClick Inc.
This merger will allow DoubleClick to bring research and objective planning
solutions to the online marketing community, while allowing @plan.inc to expand
and improve its product line.
In the merger, each share of @plan common stock will be converted into $8.00
in value, consisting of either a combination of between $1.60 and $4.00 in cash
and the remainder in DoubleClick common stock, or $8.00 in cash. Under the
amended and restated merger agreement, DoubleClick will elect the exact form of
merger consideration on the business day prior to the closing, which will be
publicly announced through a press release. DoubleClick common stock payable in
the merger will be valued at its average closing price for the ten trading days
ending on the business day prior to the closing date.
The merger is intended to qualify as a tax-free reorganization unless
DoubleClick elects to pay the merger consideration entirely in cash.
In the event that DoubleClick elects to pay the merger consideration in a
combination of cash and DoubleClick common stock, DoubleClick may issue up to
approximately 5.7 million shares in the merger.
DoubleClick common stock is traded on the Nasdaq National Market under the
trading symbol 'DCLK,' and closed at $ per share on , 2000. The
merger is described more fully in this proxy statement/prospectus.
The Board of Directors of @plan has called a special shareholders' meeting of
@plan shareholders to be held on , , 2001 at a.m., local time,
at , , , for the purpose of considering the transaction. At the
special shareholders' meeting, you will be asked to consider and vote upon a
proposal to approve the amended and restated merger agreement.
Approval of the proposal requires the affirmative vote, in person or by
proxy, of a majority of the shares of @plan's common stock. To approve the
amended and restated merger agreement, you MUST vote 'FOR' the proposal by
following the instructions stated on the enclosed proxy card. If you do not vote
at all, your non-vote will, in effect, count as a vote against the amended and
restated merger agreement and the merger.
The close of business on , 2000 is the record date for the
determination of the shareholders entitled to notice of and to vote at the
special shareholders' meeting, or any adjournment or postponement. Accordingly,
only shareholders of record on that date are entitled to notice of, and to vote
at, the special shareholders' meeting and any adjournments or postponements. A
list of these shareholders will be available at the time and place of the
special shareholders' meeting and at @plan's offices, Three Landmark Square,
Suite 400, Stamford, Connecticut 06901, beginning two business days after notice
of the special meeting has been given.
All shareholders are invited to attend the special shareholders' meeting in
person. Whether or not you plan to attend, in order that your shares may be
represented at the special shareholders' meeting, please complete, sign and date
the enclosed proxy and return it in the enclosed envelope as soon as possible,
but no later than , 2001. If you attend the special shareholders'
meeting in person, you may, if you wish, vote personally on all matters brought
before the special shareholders' meeting even if you have previously returned
your proxy.
This proxy statement/prospectus provides detailed information about
DoubleClick, @plan and the merger. Please give all of this information your
careful attention. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE DISCUSSION
IN THE SECTION ENTITLED 'RISK FACTORS' BEGINNING ON PAGE 11 OF THIS PROXY
STATEMENT/PROSPECTUS.
The Board of Directors believes that the merger is in the best interests of
@plan and its shareholders and has therefore unanimously adopted the amended and
restated merger agreement and recommends that all shareholders vote FOR approval
of the amended and restated merger agreement.
Sincerely,
MARK K. WRIGHT
Chairman
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THIS TRANSACTION OR THE SECURITIES OF
DOUBLECLICK INC. TO BE ISSUED IN THE MERGER, OR DETERMINED IF THIS PROXY
STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
This proxy statement/prospectus is dated [ ] [ ], 2000, and is
first being mailed to @plan shareholders on or about [ ] [ ], 2000.
<PAGE>
REFERENCE TO ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and
financial information about DoubleClick from documents DoubleClick has filed
with the Securities and Exchange Commission that are not included in or
delivered with this proxy statement/prospectus. If you call or write,
DoubleClick will send you copies of these documents, excluding exhibits, without
charge. You may contact DoubleClick at:
DoubleClick Inc.
Investor Relations
450 West 33rd Street
New York, New York 10001
(212) 683-0001
If you call or write @plan, although it is not incorporating any documents
by reference, it will send you copies of the documents which it has filed with
the Securities and Exchange Commission, excluding exhibits, without charge. You
may contact @plan at:
@plan.inc
Investor Relations
Three Landmark Square, Suite 400
Stamford, Connecticut 06901
(203) 961-0340
If you would like to request documents, please do so by [ ], 2001
in order to receive them before the special shareholders' meeting.
In addition, please see 'Where You Can Find More Information' on page 89.
<PAGE>
[@PLAN LOGO]
@PLAN.INC
THREE LANDMARK SQUARE, SUITE 400
STAMFORD, CONNECTICUT 06901
(203) 961-0340
--------------------------
NOTICE OF SPECIAL SHAREHOLDERS' MEETING
TO BE HELD AT A.M. ON , 2001
--------------------------
To the Shareholders of @plan.inc:
Notice is Hereby Given that a special meeting of shareholders of @plan.inc
will be held at , , , at a.m., local time on
, 2001 for the following purposes:
1. The Merger. To consider and vote upon a proposal to approve the
Amended and Restated Agreement and Plan of Merger and Reorganization among
DoubleClick Inc., Atlas Merger Sub, Inc., Atlas Acquisition Corp. and @plan,
which will approve the merger under which @plan will become a wholly owned
subsidiary of DoubleClick;
2. Authority to Adjourn. To grant the @plan board of directors
discretionary authority to adjourn the special shareholders' meeting to
solicit additional votes for approval of the amended and restated merger
agreement; and
3. Other Business. To transact such other business as may properly come
before the special meeting or any adjournment or postponement.
Only shareholders of record at the close of business on , 2000
are entitled to receive notice of and to vote at the special meeting or any
adjournment or postponement thereof. Holders of shares of @plan's common stock
held of record at the close of business on the record date are entitled to one
vote per share on each matter considered and voted on at the special
shareholders' meeting. The affirmative vote of the holders of a majority of the
outstanding shares of common stock entitled to vote at the special shareholders'
meeting is required to approve the amended and restated merger agreement. A list
of shareholders as of the record date will be open for examination during the
special shareholders' meeting and at @plan's offices, Three Landmark Square,
Suite 400, Stamford, Connecticut 06901, beginning two business days after notice
of the special shareholders' meeting has been given.
THE BOARD OF DIRECTORS OF @PLAN RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
AMENDED AND RESTATED MERGER AGREEMENT.
Your vote is important regardless of the number of shares you own. To ensure
that your shares are represented at the special shareholders' meeting, we urge
you to complete, date and sign the enclosed proxy and mail it promptly in the
postage-paid envelope provided whether or not you plan to attend the special
shareholders' meeting in person. You may revoke your proxy in the manner
described in this proxy statement/prospectus at any time before it has been
voted at the special shareholders' meeting. You may vote in person at the
special shareholders' meeting even if you have returned a proxy.
By Order of The Board of Directors,
MARK K. WRIGHT
Chairman
Stamford, Connecticut
, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
QUESTIONS AND ANSWERS ABOUT THE MERGER...................... iii
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS................... 1
RISK FACTORS................................................ 11
RISKS RELATED TO THE MERGER............................... 11
RISKS RELATED TO DOUBLECLICK.............................. 15
RISKS RELATED TO @PLAN.................................... 28
RISKS RELATED TO NETCREATIONS............................. 33
FORWARD-LOOKING STATEMENTS IN THIS PROXY
STATEMENT/PROSPECTUS...................................... 33
THE SPECIAL SHAREHOLDERS' MEETING........................... 34
General................................................. 34
Date, Time and Place.................................... 34
Matters to be Considered at the Special Shareholders'
Meeting................................................ 34
Record Date............................................. 34
Voting of Proxies....................................... 34
Vote Required........................................... 35
Quorum; Abstentions and Broker Non-Votes................ 35
Solicitation of Proxies and Expenses.................... 35
THE MERGER.................................................. 36
Background of the Merger................................ 36
DoubleClick's Reasons for the Merger.................... 40
@plan's Reasons for the Merger; Recommendation of
@plan's Board of Directors............................. 41
Opinion of @plan's Financial Advisor.................... 43
Interests of Certain Persons in the Merger.............. 49
Applicable Waiting Periods and Regulatory Approvals..... 49
Federal Income Tax Considerations....................... 50
Accounting Treatment.................................... 52
No Dissenters' Rights................................... 52
Delisting and Deregistration of @plan's Common Stock
Following the Merger................................... 52
Listing of DoubleClick Common Stock to be Issued in the
Merger................................................. 53
Restrictions on Sale of Shares by Affiliates............ 53
Operations Following the Merger......................... 53
THE AMENDED AND RESTATED MERGER AGREEMENT AND RELATED
AGREEMENTS................................................ 54
The Merger.............................................. 54
Effective Time.......................................... 54
Directors and Officers of @plan After the Merger........ 54
Conversion of @plan Shares in the Merger................ 54
No Fractional Shares.................................... 55
@plan Stock Option and Stock Incentive Plans and
Warrants............................................... 55
The Exchange Agent...................................... 55
Exchange of @plan Stock Certificates for cash or cash
and DoubleClick Stock Certificates..................... 55
Distributions with Respect to Unexchanged Shares........ 56
Representations and Warranties.......................... 56
@plan's Conduct of Business Before Completion of the
Merger................................................. 57
No Solicitation of Transactions......................... 58
Director and Officer Indemnification and Insurance...... 59
Benefit Plans and Arrangements.......................... 60
Conditions to the Merger................................ 60
Termination of the Amended and Restated Merger
Agreement.............................................. 61
Payment of Fees and Expenses............................ 62
Extension, Waiver and Amendment of the Amended and
Restated Merger Agreement.............................. 64
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Related Agreements...................................... 64
BUSINESS OF @PLAN........................................... 67
SECURITY OWNERSHIP OF @PLAN MANAGEMENT AND CERTAIN
BENEFICIAL OWNERS......................................... 73
SELECTED FINANCIAL DATA OF @PLAN............................ 75
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF @PLAN........................ 76
COMPARISON OF STOCKHOLDERS' RIGHTS.......................... 85
Required Vote for Authorization of Special Actions...... 85
Number of Directors; Removal of Directors............... 85
Limitation of Liability; Indemnification................ 86
Annual Meeting of Stockholders; Special Meetings of
Stockholders........................................... 87
Stockholder Inspection Rights and Stockholder Lists..... 87
Stockholder Action Without a Meeting.................... 88
Stockholder Proposals................................... 88
EXPERTS..................................................... 89
LEGAL MATTERS............................................... 89
WHERE YOU CAN FIND MORE INFORMATION......................... 89
SHAREHOLDER PROPOSALS....................................... 90
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 90
INDEX TO FINANCIAL STATEMENTS OF @PLAN.INC.................. F-1
LIST OF APPENDICES
A -- Amended and Restated Agreement and Plan of Merger and
Reorganization............................................ A-1
B -- Form of @plan Shareholder Agreement.................... B-1
C -- Form of @plan Shareholder Letter....................... C-1
D -- Opinion of Veronis, Suhler & Associates LLC, financial
advisor to @plan.......................................... D-1
</TABLE>
ii
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: WHAT WILL @PLAN SHAREHOLDERS RECEIVE IN THE MERGER?
A: At DoubleClick's election, @plan shareholders will receive either:
$8.00 in value, consisting of either a combination of between $1.60
and $4.00 in cash and the remainder in DoubleClick common stock, or
$8.00 in cash.
DoubleClick common stock payable in the merger will be valued at its average
closing price for the ten trading days ending on the business day prior to the
closing date. DoubleClick will announce its election as to the form of merger
consideration by 5:30 p.m. (New York City time) on the business day prior to the
closing.
In the event that DoubleClick elects to pay the merger consideration in a
combination of cash and DoubleClick common stock, the merger is intended to
qualify as a tax-free reorganization under the federal tax code. In order to so
qualify, the total consideration received by @plan shareholders may not include
more than 50% cash. In the event that the average of the high and low sales
price of DoubleClick common stock on the closing date is less than the ten-day
average described above, @plan shareholders would receive total consideration
(valuing DoubleClick common stock at the mean of the high and low sales price on
the closing date) consisting of more than 50% cash, and as a result, the cash
that @plan shareholders would receive would be decreased and the amount of
DoubleClick common stock would be increased in order to result in a mixture of
50% cash / 50% stock to retain the tax-free nature of the merger.
In the event that DoubleClick elects to pay the merger consideration entirely in
cash, the merger will not qualify as a tax-free reorganization under the federal
tax code.
The provisions in the amended and restated merger agreement regarding the
elections to be made by DoubleClick and the adjustment of cash and DoubleClick
common stock to be received by @plan shareholders are complicated. We urge @plan
shareholders to read carefully the amended and restated merger agreement
included as Appendix A to this proxy statement/prospectus.
Q: WHAT HAPPENED TO THE DOUBLECLICK-@PLAN MERGER ANNOUNCED ON SEPTEMBER 25,
2000?
A: The original merger agreement between @plan and DoubleClick, announced on
September 25, 2000, contained a complicated 'collar' mechanism that provided for
termination rights in favor of @plan, as well as a structure that prohibited the
payment of more than 20% cash to qualify as a tax-free reorganization.
DoubleClick and @plan determined to enter into the amended and restated merger
agreement to eliminate the uncertainty relating to the termination rights under
the original merger agreement, and to provide for additional flexibility in the
amount of cash and DoubleClick common stock payable in the merger. Neither party
paid any fees or other amounts to the other in connection with amending and
restating the merger agreement.
Q: IF DOUBLECLICK WILL NOT ANNOUNCE THE EXACT FORM OF MERGER CONSIDERATION UNTIL
5:30 P.M. (NEW YORK CITY TIME) ON THE DAY PRIOR TO THE CLOSING, HOW WILL I KNOW
WHAT I WILL RECEIVE IN THE MERGER IF I MAIL IN MY PROXY CARD BEFORE THE
ANNOUNCEMENT?
A: Although you will not know the exact form of merger consideration if you cast
your vote by mailing the enclosed proxy, under all circumstances, you will
receive $8.00 in value, determined as discussed above. A vote in favor of
approval of the amended and restated merger agreement is a vote in favor
of either form of merger consideration.
Q: DOUBLECLICK HAS ALSO ANNOUNCED THAT IT IS ACQUIRING NETCREATIONS, INC. HOW
WILL THAT AFFECT ITS PROPOSED TRANSACTION WITH @PLAN?
A: On October 2, 2000, DoubleClick entered into an agreement to acquire
NetCreations, Inc., a provider of Opt-In'r' e-mail marketing services,
specializing in e-mail address list management, brokerage and delivery.
Consummation of the NetCreations merger is NOT a condition to the consummation
of DoubleClick's merger with @plan. The proposed merger with NetCreations is NOT
expected to affect the consummation of the proposed transaction with @plan.
iii
<PAGE>
Q: WHEN DO YOU EXPECT TO COMPLETE THE MERGER?
A: We are working to complete the merger in the first quarter of 2001. Because
the merger is subject to satisfaction of a number of conditions, we cannot
predict the exact timing.
Q: HOW DO I VOTE?
A: After you have carefully read this proxy statement/prospectus, mail your
signed proxy card in the enclosed return envelope as soon as possible so that
your shares may be represented at the special shareholders' meeting. You may
also attend the meeting in person instead of submitting a proxy. If your shares
are held in 'street name' by your broker, your broker will vote your shares only
if you provide instructions on how to vote. You should follow the directions
provided by your broker regarding how to instruct your broker to vote your
shares.
Q: SHOULD @PLAN SHAREHOLDERS SEND IN THEIR STOCK CERTIFICATES NOW?
A: No. After we complete the merger, DoubleClick will send instructions to @plan
shareholders explaining how to exchange their @plan stock certificates for cash
or cash and DoubleClick stock certificates (depending on the election made by
DoubleClick).
Q: CAN I CHANGE MY VOTE AFTER MAILING MY PROXY?
A: Yes. You may change your vote by delivering a signed notice of revocation or
a later-dated, signed proxy card to the corporate secretary of @plan before the
special shareholders' meeting, or by attending the special shareholders' meeting
and voting in person.
Q: WHOM CAN I CALL WITH QUESTIONS?
A: If you are an @plan shareholder with questions about the merger, please call
@plan Investor Relations at (203) 961-0340.
iv
<PAGE>
SUMMARY OF THE PROXY STATEMENT/PROSPECTUS
The following summary highlights selected information from this proxy
statement/prospectus and may not contain all of the information that is
important to you. You should carefully read this entire proxy
statement/prospectus, including the appendices, and the other documents we refer
to for a more complete understanding of the merger. In addition, we incorporate
by reference important business and financial information about DoubleClick into
this proxy statement/prospectus. You may obtain the information incorporated by
reference into this proxy statement/prospectus without charge by following the
instructions in the section entitled 'Where You Can Find More Information' on
page 89.
THE COMPANIES
DOUBLECLICK INC.
450 West 33rd Street
New York, New York 10001
(212) 683-0001
DoubleClick is a leading provider of technology-driven marketing and
advertising solutions to thousands of advertisers, advertising agencies, Web
publishers and e-commerce merchants worldwide. DoubleClick provides a broad
range of media, technology and data products and services. DoubleClick's
products and services for Web publishers are designed to optimize revenues from
the sale of Internet advertising. For its advertising, advertising agency and
e-commerce merchant customers, DoubleClick products and services are designed to
enhance the effectiveness of their ad campaigns and offers on the Internet,
through other interactive media and by direct mail. DoubleClick's patented DART
technology is the platform for many of its solutions and enables its customers
to use pre-selected criteria to deliver the right ad to the right person at the
right time. The DART technology is also a sophisticated tracking and reporting
tool that DoubleClick's customers rely on to measure ad performance and provide
dynamic ad space inventory management. DoubleClick currently serves ads for over
2,800 clients, and in September 2000 delivered over 61.0 billion advertisements
to targeted Internet users. DoubleClick's revenues are derived from three
principal lines of business: DoubleClick Media, DoubleClick TechSolutions and
DoubleClick Data Services.
@PLAN.INC
Three Landmark Square, Suite 400
Stamford, Connecticut 06901
(203) 961-0340
@plan is a leading provider of target market research planning systems that
are used to help optimize Internet advertising and merchandising strategies.
@plan's systems are specifically designed for Internet advertisers, advertising
agencies, Web publishers, online retailers and consumer brand marketers. These
systems help enable @plan's clients to harness effectively the power of the
Internet as an advertising, marketing and retailing medium. @plan's internally
developed systems, which its clients access through its Web sites, combine its
databases of consumer lifestyle, product preference and demographic data with
powerful technology that enables its clients to perform queries and searches to
plan campaigns and strategies. @plan's syndicated Internet consumer research
data is collected by The Gallup Organization on an exclusive basis.
THE MERGER (SEE PAGE 36)
DoubleClick and @plan have entered into an amended and restated merger
agreement that provides for the merger of @plan with and into a wholly owned
subsidiary of DoubleClick. As a result, @plan will become a wholly owned
subsidiary of DoubleClick. In the merger, each share of @plan common stock will
be exchanged for the right to receive $8.00 in value, consisting of either a
combination of between $1.60 and $4.00 in cash and the remainder in DoubleClick
common stock, or $8.00 in cash. Under the amended and restated merger agreement,
DoubleClick will elect the exact form of merger consideration on the business
day prior to the closing. DoubleClick common stock
1
<PAGE>
payable in the merger will be valued at its average closing price for the ten
trading days ending on the business day prior to the closing date. In addition,
in the event that DoubleClick elects to pay the merger consideration in a
combination of cash and DoubleClick common stock, the merger is intended to
qualify as a tax-free reorganization. The merger consideration payable to @plan
shareholders is subject to adjustment in limited circumstances as set forth in
the amended and restated merger agreement and discussed above in 'Questions and
Answers About the Merger.' We urge you to read the amended and restated merger
agreement, which is included as Appendix A, carefully and in its entirety.
RECOMMENDATION OF @PLAN'S BOARD OF DIRECTORS (SEE PAGE 41)
The @plan board of directors has adopted the amended and restated merger
agreement and determined that the terms and conditions of the merger are fair
to, and in the best interests of, @plan and its shareholders. The @plan board of
directors unanimously recommends that @plan shareholders vote FOR approval of
the amended and restated merger agreement.
OPINION OF @PLAN'S FINANCIAL ADVISOR (SEE PAGE 43)
In deciding to adopt the amended and restated merger agreement, @plan's
board of directors considered the opinion of its financial advisor, Veronis,
Suhler & Associates LLC.
On November 17, 2000, Veronis, Suhler delivered its oral opinion to the
board of directors of @plan, which was subsequently confirmed in writing, that,
as of such date, the consideration to be received by the @plan shareholders in
the merger was fair to the holders of @plan common stock from a financial point
of view. The full text of Veronis, Suhler's written opinion dated November 17,
2000 is attached to this proxy statement/prospectus as Appendix D. We encourage
you to read this opinion carefully in its entirety for a description of the
procedures followed, assumptions made, matters considered and limitations on the
review undertaken.
VOTE REQUIRED (SEE PAGE 35)
The affirmative vote of the holders of a majority of the outstanding shares
of @plan common stock is required to approve the amended and restated merger
agreement. @plan shareholders are entitled to cast one vote per share of @plan
common stock owned at the close of business on [ ,] 2000. Pursuant to
shareholder agreements in the form attached as Appendix B (and shareholder
letters in the form attached as Appendix C), @plan shareholders have agreed to
vote approximately 48.6% of @plan's common stock outstanding as of November 27,
2000 for approval of the amended and restated merger agreement. As of
[ ,] 2000, directors and executive officers of @plan and their
affiliates beneficially owned an aggregate of [ ] shares of @plan common
stock (exclusive of any shares issuable upon the exercise of options or
warrants) or approximately [ %] of the shares of @plan common stock outstanding
on such date. As of November 27, 2000, directors and executive officers of
DoubleClick did not own any shares of @plan common stock.
THE SPECIAL SHAREHOLDERS' MEETING (SEE PAGE 34)
@plan's special shareholders' meeting will be held at on .
@plan shareholders may vote at this special shareholders' meeting if they owned
shares of @plan common stock at the close of business on . In order for
us to complete the merger, the affirmative vote of a majority of the outstanding
shares of @plan common stock must vote to adopt the amended and restated merger
agreement.
INTERESTS OF CERTAIN PERSONS IN THE MERGER (SEE PAGE 49)
When considering the recommendation of the @plan board of directors, you
should be aware that some directors and officers of @plan have interests in the
merger that are different from, or in addition to, yours. In particular,
unvested options held by officers and a director will automatically vest in
connection with the merger, and, as part of the merger, DoubleClick has entered
into employment,
2
<PAGE>
consulting and severance agreements with officers of @plan (including one who is
a director) that will only become effective if the merger is completed.
FEDERAL INCOME TAX CONSIDERATIONS (SEE PAGE 50)
In the event that DoubleClick elects to pay the merger consideration in a
combination of cash and DoubleClick common stock, the merger has been structured
so as to qualify as a tax-free reorganization for United States federal income
tax purposes. If the merger qualifies as a tax-free reorganization, an @plan
shareholder will recognize gain but not loss for United States federal income
tax purposes in the merger, equal to the lesser of the gain realized by such
shareholder in the merger or the amount of cash received by such shareholder in
the merger. If DoubleClick makes the election to pay a portion of the merger
consideration in DoubleClick common stock, it is a condition to completion of
the merger that @plan receive a legal opinion from its outside counsel that the
merger constitutes a reorganization within the meaning of the Internal Revenue
Code.
In the event that DoubleClick elects to pay the merger consideration
entirely in cash, the merger will be a taxable transaction for United States
federal income tax purposes and may also be taxable under applicable state,
local and other tax laws. For federal income tax purposes, each @plan
shareholder will recognize gain or loss with respect to each @plan share they
exchange in the merger in an amount equal to the difference between $8.00 and
the @plan shareholder's adjusted tax basis in the @plan common stock exchanged
in the merger.
RESTRICTIONS ON SALE OF SHARES BY AFFILIATES (SEE PAGE 53)
All shares of DoubleClick common stock that @plan shareholders receive in
connection with the merger will be freely transferable unless the holder is
considered an 'affiliate' of either DoubleClick or @plan for purposes of the
Securities Act of 1933. Shares of DoubleClick common stock held by these
affiliates may be sold only under a registration statement or exemption under
the Securities Act.
CONDITIONS TO THE MERGER (SEE PAGE 60)
The respective obligations of the parties to complete the merger are subject
to the prior satisfaction or waiver of conditions specified in the amended and
restated merger agreement. If either of us waives any conditions, we will
consider the facts and circumstances at that time and determine whether
completion of the merger requires a resolicitation of proxies from @plan
shareholders.
TERMINATION OF THE AMENDED AND RESTATED MERGER AGREEMENT (SEE PAGE 61)
The amended and restated merger agreement may be terminated under
circumstances that are described in 'The Amended and Restated Merger Agreement
and Related Agreements -- Termination of the Amended and Restated Merger
Agreement.'
TERMINATION FEE AND EXPENSES (SEE PAGE 62)
@plan has agreed to pay DoubleClick a termination fee of $4.0 million and
up to $1.0 million of DoubleClick's expenses in cash if the amended and restated
merger agreement terminates under circumstances that are described under 'The
Amended and Restated Merger Agreement and Related Agreements -- Payment of Fees
and Expenses.' DoubleClick has agreed to pay up to $250,000 of @plan's expenses
in cash if the amended and restated merger agreement is terminated under
circumstances that are described under 'The Amended and Restated Merger
Agreement and Related Agreements -- Payment of Fees and Expenses.'
RESTRICTIONS ON ALTERNATE TRANSACTIONS (SEE PAGE 58)
The amended and restated merger agreement prohibits @plan from soliciting or
participating in discussions with third parties about transactions alternative
to the merger, except as discussed in 'The Amended and Restated Merger Agreement
and Related Agreements -- No Solicitation of Transactions.'
3
<PAGE>
APPLICABLE WAITING PERIODS AND REGULATORY APPROVALS (SEE PAGE 49)
The merger is subject to United States antitrust laws. We have made the
required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
with the Department of Justice and the Federal Trade Commission. On November 8,
2000, the federal government granted early termination of the applicable waiting
period. The Department of Justice and the Federal Trade Commission, as well as a
state antitrust authority or a private person, may challenge the merger at any
time before or after it is completed. Neither @plan nor DoubleClick is aware of
any other material governmental or regulatory approval required for completion
of the merger, other than compliance with applicable corporate laws of Delaware
and Tennessee.
ACCOUNTING TREATMENT (SEE PAGE 52)
DoubleClick will account for the merger under the purchase method of
accounting, which means that DoubleClick will allocate the purchase price to the
fair value of net tangible and identifiable intangible assets acquired, and any
excess of the cost over that amount will be recorded as goodwill and will be
amortized over its estimated useful life, in accordance with generally accepted
accounting principles.
NO DISSENTERS' RIGHTS (SEE PAGE 52)
Under Tennessee law, shareholders of @plan are not entitled to dissenters'
rights in the merger.
TRADEMARKS
This document contains trademarks of DoubleClick and @plan and may contain
trademarks of others.
RECENT DEVELOPMENT
ACQUISITION OF NETCREATIONS
On October 2, 2000, DoubleClick entered into an agreement to acquire
NetCreations, Inc. in a stock-for-stock merger. The following sets forth
pertinent information relating to the proposed transaction.
Business of NetCreations. NetCreations, Inc., a leader in 100% Opt-In'r'
e-mail marketing services, specializes in e-mail address list management,
brokerage and delivery. Through its PostMasterDirect.com service, NetCreations
has conducted marketing campaigns on behalf of over 2,000 direct marketing
clients to targeted consumers in its database of over 15 million 100% Opt-In'r'
e-mail addresses. These addresses belong to Internet users who have requested
promotional information related to specific topics of interest (opt-in) and
confirmed their request (double opt-in). NetCreations manages opt-in e-mail
lists for more than 380 third-party Web sites such as CNET, Uproar, About.com,
Network Solutions, internet.com, CBS Sportsline, CDROM Guide and LuckySurf.com.
NetCreations protects the privacy of consumers on the Internet by not disclosing
e-mail addresses or any other personally identifiable information to direct
marketers.
Terms of the NetCreations merger. Under the terms of the merger agreement
with NetCreations, DoubleClick will issue 0.41 of a share of DoubleClick common
stock for each outstanding share of NetCreations common stock. In addition, all
outstanding options to acquire shares of NetCreations common stock will be
assumed by DoubleClick and converted at the same exchange ratio into options to
purchase DoubleClick common stock. In the acquisition, DoubleClick will exchange
approximately 6.4 million shares of DoubleClick common stock for all the issued
and outstanding capital stock of NetCreations. Following the merger,
NetCreations will become a wholly-owned subsidiary of DoubleClick. DoubleClick
and NetCreations expect the merger to qualify as a tax-free reorganization.
DoubleClick will account for the NetCreations merger under the purchase method
of accounting. The merger is subject to a number of conditions, including
approval by NetCreations stockholders.
4
<PAGE>
Effect of NetCreations merger upon @plan shareholders. The primary effects
of DoubleClick's merger with NetCreations on @plan shareholders if they receive
shares of DoubleClick common stock in the merger, will be dilution to their
share ownership of DoubleClick and the costs of integrating NetCreations into
DoubleClick on a prospective basis. The proposed acquisition of NetCreations
will result in dilution to DoubleClick stockholders, including @plan
shareholders who become DoubleClick stockholders as a result of the merger.
Immediately after the acquisition of @plan, assuming that DoubleClick has
elected to pay 80% of the merger consideration in shares of DoubleClick common
stock using an assumed value of $14.87 per share (the average closing price
for the ten trading days ending November 27, 2000), and assuming the
NetCreations merger has not yet been completed, and further assuming the
exercise of all outstanding DoubleClick and @plan options, @plan shareholders
would own approximately 4.1% of DoubleClick. After the acquisition of @plan,
assuming that DoubleClick has elected to pay 80% of the merger consideration
in shares of DoubleClick common stock using an assumed value of $14.87 per
share (the average closing price for the ten trading days ending
November 27, 2000), and assuming the NetCreations merger has been completed,
and further assuming the exercise of all vested outstanding DoubleClick,
NetCreations and @plan options, @plan shareholders will own approximately 3.9%
of DoubleClick. DoubleClick expects that the combined company's operating
expenses will increase following the NetCreations acquisition as a result of the
integration of NetCreations into DoubleClick. In addition, DoubleClick plans to
significantly increase its operating expenses so that it can continue its
international expansion, upgrade and enhance its DART technology and expand
its product and service offerings, market and support its solutions and increase
its sales and marketing operations. If these expenses are not more than
offset by increased revenues over time, there may be an adverse impact on
DoubleClick's financial results.
5
<PAGE>
DOUBLECLICK SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following selected historical consolidated financial information should
be read in conjunction with DoubleClick's consolidated financial statements and
related notes and DoubleClick's 'Management's Discussion and Analysis of
Financial Condition and Results of Operations,' which we incorporate by
reference in this proxy statement/prospectus. The consolidated statement of
operations information for each of the three years ended December 31, 1999, and
the consolidated balance sheet data as of December 31, 1998 and 1999, are
derived from the consolidated financial statements of DoubleClick which have
been audited by PricewaterhouseCoopers LLP, independent accountants, and are
incorporated by reference in this proxy statement/prospectus. The consolidated
statement of operations information for the years ended December 31, 1995 and
1996, and the consolidated balance sheet data as of December 31, 1995, 1996 and
1997 are derived from the consolidated financial statements of DoubleClick which
have been audited by PricewaterhouseCoopers LLP, and are not incorporated by
reference in this proxy statement/prospectus. The selected financial data for
the nine month periods ended September 30, 1999 and 2000 and as of
September 30, 2000 have been derived from DoubleClick's unaudited financial
statements, are incorporated by reference in this proxy statement/prospectus,
and in the opinion of DoubleClick's management, include all adjustments
(consisting only of normal recurring adjustments) which are necessary to present
fairly the results of operations and financial position of DoubleClick for those
periods in accordance with generally accepted accounting principles. Historical
results are not necessarily indicative of the results to be expected in the
future.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------- -------------------
1995 1996 1997 1998 1999 1999 2000
---- ---- ---- ---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues................ $ 9,331 $25,985 $67,926 $138,724 $258,294 $164,604 $373,312
Income (loss) from
operations............ 2,983 (1,419) (3,828) (14,970) (58,715) (14,746) (91,724)
Income (loss) before
income taxes.......... 2,781 (1,565) (3,432) (10,973) (47,234) (6,191) (50,198)
Net income (loss)....... $ 2,231 $(3,954) $(7,741) $(18,039) $(55,821) $(13,675) $(51,230)
------- ------- ------- -------- -------- -------- --------
------- ------- ------- -------- -------- -------- --------
Basic and diluted net
income (loss) per
share................. $ 0.11 $ (0.07) $ (0.16) $ (0.21) $ (0.51) $ (0.13) $ (0.43)
------- ------- ------- -------- -------- -------- --------
------- ------- ------- -------- -------- -------- --------
Weighted average shares
used in basic net
income (loss) per
share calculation..... 19,630 56,516 49,048 86,248 109,756 109,034 120,517
------- ------- ------- -------- -------- -------- --------
------- ------- ------- -------- -------- -------- --------
Weighted average shares
used in diluted net
income (loss) per
share calculation..... 19,716 56,516 49,048 86,248 109,756 109,034 120,517
------- ------- ------- -------- -------- -------- --------
------- ------- ------- -------- -------- -------- --------
<CAPTION>
DECEMBER 31,
------------------------------------------------- SEPTEMBER 30,
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Working capital......... $ 2,355 $ 4,959 $25,861 $184,408 $309,833 $ 566,451
Total assets............ 5,536 19,749 53,641 260,361 729,407 1,409,784
Convertible subordinated
notes and other....... -- 711 742 2,067 255,348 262,116
Total stockholders'
equity................ 1,178 7,256 31,428 206,771 361,662 931,968
</TABLE>
6
<PAGE>
@PLAN SELECTED HISTORICAL FINANCIAL DATA
The selected statement of operations data presented below for each of the
years in the three-year period ended December 31, 1999, and the selected balance
sheet data as of December 31, 1998 and 1999, are derived from @plan's financial
statements that have been audited by Arthur Andersen, LLP, @plan's independent
public accountants, and are included elsewhere in this proxy
statement/prospectus. The selected statement of operations data presented below
for the period of @plan's inception on May 29, 1996 to December 31, 1996, and
the selected balance sheet data as of December 31, 1996 and 1997, are derived
from @plan's financial statements that have been audited by Arthur Andersen,
LLP, and are not included in this proxy statement/prospectus. The selected
statement of operations data for the nine months ended September 30, 1999 and
2000, and the selected balance sheet data as of September 30, 2000 are derived
from @plan's unaudited financial statements included elsewhere in this proxy
statement/prospectus. These unaudited financial statements have been prepared on
the same basis as @plan's audited financial statements and, in @plan's opinion,
include all material adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the unaudited financial information.
You should read the following selected financial information in conjunction with
@plan's financial statements and the notes to those statements and 'Management's
Discussion and Analysis of Financial Condition and Results of Operations of
@plan' located elsewhere in this proxy statement/prospectus.
<TABLE>
<CAPTION>
PERIOD FROM
MAY 29, 1996 NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, --------------------------------------- -------------------------
1996 1997 1998 1999 1999 2000
---- ---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................ $ -- $ 422,401 $ 3,108,356 $ 7,355,773 $ 4,970,959 $ 9,758,614
Costs and expenses:
Product costs..................... 487,239 1,744,366 2,360,042 4,657,281 2,810,575 7,602,961
Selling and marketing............. -- 819,043 1,713,080 3,219,439 2,137,425 4,517,158
General and administrative........ 190,766 753,299 1,057,280 2,110,922 1,379,091 2,460,614
Non-cash compensation expense..... -- -- 27,418 505,098 505,098 --
--------- ----------- ----------- ----------- ----------- -----------
Total costs and expenses......... 678,005 3,316,708 5,157,820 10,492,740 6,832,189 14,580,733
--------- ----------- ----------- ----------- ----------- -----------
Loss from operations................ (678,005) (2,894,307) (2,049,464) (3,136,967) (1,861,230) (4,822,119)
Interest income..................... 17,367 80,368 191,804 1,116,453 658,048 1,489,543
--------- ----------- ----------- ----------- ----------- -----------
Net loss before income taxes........ (660,638) (2,813,939) (1,857,660) (2,020,514) (1,203,182) (3,332,576)
Income tax provision................ -- -- 13,219 64,300 54,300 52,464
--------- ----------- ----------- ----------- ----------- -----------
Net loss............................ $(660,638) $(2,813,939) $(1,870,879) $(2,084,814) $(1,257,482) $(3,385,040)
--------- ----------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- ----------- -----------
Basic and diluted loss per share.... $ (0.73) $ (3.13) $ (2.07) $ (0.48) $ (0.44) $ (0.30)
--------- ----------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- ----------- -----------
Weighted average shares
outstanding....................... 900,000 900,000 901,993 7,146,699 5,808,580 11,257,770
--------- ----------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
DECEMBER 31,
---------------------------------------------------- SEPTEMBER 30,
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents......................... $1,608,370 $ 832,338 $ 3,682,576 $34,817,991 $31,371,373
Working capital................................... 1,511,997 726,217 3,716,071 33,559,911 30,667,493
Total assets...................................... 1,625,616 1,559,175 6,026,481 39,122,353 36,720,290
Mandatory redeemable convertible preferred
stock........................................... 2,189,097 4,443,811 9,582,802 -- --
Shareholders' equity (deficit).................... (660,637) (3,474,576) (5,310,037) 34,832,651 31,757,298
</TABLE>
7
<PAGE>
COMPARATIVE PER SHARE DATA
The following tables reflect (a) the historical net loss and book value per
share of DoubleClick common stock and the historical net loss and book value per
share of @plan common stock in comparison with the unaudited pro forma net loss
and book values per share after giving effect to the proposed merger of
DoubleClick with @plan and (b) the equivalent historical net loss and book
values per share attributable to 0.43 of a share of DoubleClick common stock
that will be received for each share of @plan common stock in the merger,
assuming DoubleClick has elected to pay 80% of the merger consideration in
shares of DoubleClick common stock using an assumed value of $14.87 per share
(the average closing price for the ten trading days ending November 27, 2000).
Pro forma financial statements giving effect to the proposed merger
of DoubleClick and @plan have not been included in this proxy
statement/prospectus because such information is not materially different from
DoubleClick's historical results. The increase in the pro forma net loss as
compared to DoubleClick's historical net loss is primarily the result of the
amortization of goodwill arising from this merger.
The information in the following tables should be read in conjunction with
the historical consolidated financial statements and related notes of
DoubleClick which are incorporated by reference in this proxy
statement/prospectus and the historical financial statements and related notes
of @plan which are included elsewhere in this proxy statement/prospectus.
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1999 2000
---- ----
<S> <C> <C>
DOUBLECLICK HISTORICAL PER COMMON SHARE DATA:
Net loss per common share -- basic and diluted.......... $(0.51) $(0.43)
Book value per share.................................... 3.22 $ 7.59
@PLAN HISTORICAL PER COMMON SHARE DATA:
Net loss per common share -- basic and diluted.......... $(0.48) $(0.30)
Book value per share.................................... $ 3.11 $ 2.80
DOUBLECLICK AND @PLAN PRO FORMA COMBINED PER COMMON SHARE
Net loss per DoubleClick share -- basic and diluted..... $(0.73) $(0.59)
Net loss per equivalent @plan share -- basic and
diluted............................................... $(0.31) $(0.25)
Book value per DoubleClick share........................ $ 3.87 $ 7.99
Book value per equivalent @plan share................... $ 1.66 $ 3.44
</TABLE>
8
<PAGE>
MARKET PRICE INFORMATION
DOUBLECLICK MARKET PRICE DATA
DoubleClick common stock has traded on the Nasdaq National Market under the
symbol 'DCLK' since February 20, 1998. The following table sets forth the range
of high and low sales prices reported on the Nasdaq National Market for
DoubleClick common stock for the periods indicated, adjusted to reflect (1) a
two-for-one stock split effected in the form of a dividend which became
effective on April 5, 1999 and (2) a two-for-one stock split effected in the
form of a dividend which became effective on January 11, 2000.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
FISCAL 1998
First Quarter (from February 20, 1998)................. $ 9.25 $ 6.91
Second Quarter......................................... 12.44 7.72
Third Quarter.......................................... 19.28 4.55
Fourth Quarter......................................... 14.50 3.38
FISCAL 1999
First Quarter.......................................... $ 50.00 $11.00
Second Quarter......................................... 88.00 33.75
Third Quarter.......................................... 62.63 30.25
Fourth Quarter......................................... 127.72 54.88
FISCAL 2000
First Quarter.......................................... $135.25 $74.00
Second Quarter......................................... 93.88 32.88
Third Quarter.......................................... 45.52 27.56
Fourth Quarter (through [ ] [ ], 2000).......... [ ] [ ]
</TABLE>
@PLAN MARKET PRICE DATA
@plan's common stock has traded on the Nasdaq National Market under the
symbol 'APLN' since May 21, 1999. The following table sets forth the range of
high and low sales prices reported on the Nasdaq National Market for @plan
common stock for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
FISCAL 1999
Second Quarter (from May 21, 1999)...................... $18.50 $10.50
Third Quarter........................................... 22.25 9.13
Fourth Quarter.......................................... 17.50 8.50
FISCAL 2000
First Quarter........................................... $15.00 $ 7.88
Second Quarter.......................................... 9.38 4.25
Third Quarter........................................... 8.88 4.00
Fourth Quarter (through [ ] [ ], 2000)........... [ ] [ ]
</TABLE>
RECENT CLOSING PRICES
As of November 17, 2000, the last trading day before announcement of the
amended terms of the merger, the actual closing prices per share of DoubleClick
common stock and @plan common stock on the Nasdaq National Market were $15.19
and $5.31, respectively. As of September 22, 2000, the last trading day before
announcement of the original terms of the merger, the actual closing prices per
share of DoubleClick common stock and @plan common stock on the Nasdaq National
Market were $37.50 and $7.25, respectively. On [ ] [ ], 2000, the
closing prices per share of DoubleClick common stock and @plan common stock on
the Nasdaq National Market were $ and $ , respectively.
9
<PAGE>
Because the market price of DoubleClick common stock is subject to
fluctuation, the market value of the shares of DoubleClick common stock that
holders of @plan common stock will receive in the merger may increase or
decrease prior to and following the merger. WE URGE @PLAN SHAREHOLDERS TO OBTAIN
CURRENT MARKET QUOTATIONS FOR DOUBLECLICK COMMON STOCK AND @PLAN COMMON STOCK.
WE CANNOT GIVE YOU ANY ASSURANCE AS TO THE FUTURE PRICES OR MARKETS FOR
DOUBLECLICK COMMON STOCK OR @PLAN COMMON STOCK.
DIVIDEND POLICY
Neither DoubleClick nor @plan has ever paid cash dividends on its stock, and
both anticipate that they will continue to retain any earnings for the
foreseeable future for use in the operation of their respective businesses.
10
<PAGE>
RISK FACTORS
By voting in favor of the amended and restated merger agreement, @plan
shareholders may be choosing to invest in DoubleClick common stock. An
investment in DoubleClick common stock involves a high degree of risk. In
addition to the other information contained in or incorporated by reference into
this proxy statement/prospectus, you should carefully consider the following
risk factors in deciding whether to vote for the merger. If any of the following
risks actually occurs, the business and prospects of @plan or DoubleClick may be
seriously harmed. In such case, the trading price of DoubleClick common stock
could decline, and you may lose all or part of your investment.
RISKS RELATED TO THE MERGER
IF DOUBLECLICK ELECTS TO PAY A PORTION OF THE MERGER CONSIDERATION IN
DOUBLECLICK COMMON STOCK, @PLAN SHAREHOLDERS WILL BE EXPOSED TO MARKET RISK ON
THE SHARES OF DOUBLECLICK COMMON STOCK THEY RECEIVE IN THE MERGER.
Upon the merger's completion, each share of @plan common stock will be
exchanged for $8.00 in value, consisting of either a combination of between
$1.60 and $4.00 in cash and the remainder in DoubleClick common stock, or $8.00
in cash. On the business day prior to the closing, DoubleClick will announce the
exact form of merger consideration. DoubleClick common stock payable in the
merger will be valued at its average closing price for the ten trading days
ending one business day prior to the closing date. Accordingly, the specific
market value of any DoubleClick common stock received by @plan shareholders on
the closing date may be less than the ten-day average used to calculate the
stock portion of the merger consideration, resulting in @plan shareholders
receiving less than $8.00 in value. Shares of DoubleClick common stock may also
decline in value after the closing date. Further, neither @plan nor DoubleClick
may terminate the amended and restated merger agreement or 'walk away' from the
merger solely because of changes in the market price of DoubleClick common
stock. The share price of DoubleClick common stock is by nature subject to the
general price fluctuations in the market for publicly traded equity securities
and has historically experienced significant volatility. DoubleClick and @plan
urge you to obtain recent market quotations for DoubleClick common stock and
@plan common stock. DoubleClick cannot predict or give any assurances as to the
market price of DoubleClick common stock at any time before or after the
completion of the merger.
BECAUSE DOUBLECLICK IS NOT REQUIRED TO DETERMINE THE SPECIFIC FORM OF MERGER
CONSIDERATION UNTIL THE BUSINESS DAY PRIOR TO THE CLOSING, ONLY @PLAN
SHAREHOLDERS WHO VOTE IN PERSON AT THE SPECIAL SHAREHOLDERS' MEETING WILL KNOW
THE SPECIFIC COMPOSITION OF THE MERGER CONSIDERATION PRIOR TO CASTING THEIR
VOTES.
It is currently anticipated that the @plan special shareholders' meeting
will be held on the morning of the closing date. Under the amended and restated
merger agreement, DoubleClick will announce its election as to the specific form
of merger consideration by 5:30 p.m. (New York City time) on the business day
before the closing date. Consequently, other than @plan shareholders that vote
in person at the special shareholders' meeting, when @plan shareholders submit
their proxies, they will not know the exact form of the consideration payable in
the merger. @plan shareholders are encouraged to consider the various
combinations of cash and stock (or all cash) that they may receive in the merger
prior to submitting their proxy.
IN THE EVENT THAT DOUBLECLICK ELECTS TO PAY THE MERGER CONSIDERATION ENTIRELY IN
CASH, THE MERGER WILL BE A TAXABLE TRANSACTION TO @PLAN SHAREHOLDERS.
In the event that DoubleClick elects to pay the merger consideration
entirely in cash, the merger will be a taxable transaction for federal income
tax purposes and may also be taxable under applicable state, local and other tax
laws. For federal tax purposes, each @plan shareholder will recognize gain or
loss with respect to each @plan share they exchange in the merger in an amount
equal to the difference between $8.00 and the @plan shareholder's adjusted tax
basis in the @plan common stock exchanged in the merger.
11
<PAGE>
IN THE EVENT THAT DOUBLECLICK ELECTS TO PAY THE MERGER CONSIDERATION IN A
COMBINATION OF CASH AND DOUBLECLICK COMMON STOCK, THE MERGER IS INTENDED TO
QUALIFY AS A TAX-FREE REORGANIZATION UNDER THE FEDERAL TAX CODE.
In order to qualify as a tax-free reorganization, the total consideration
received by @plan shareholders may not include more than 50% cash. In the event
that the average of the high and low sales price of DoubleClick common stock on
the closing date is less than the ten-day average described above, and as a
result, @plan shareholders would receive total consideration (valuing
DoubleClick common stock at the mean of the high and low sales price on the
closing date) of more than 50% cash. DoubleClick and @plan have agreed that in
these circumstances, the cash that @plan shareholders would receive would be
decreased and the amount of DoubleClick common stock would be increased in order
to result in a mixture of 50% cash / 50% stock to retain the tax-free nature of
the merger.
DOUBLECLICK AND @PLAN MAY NOT ACHIEVE THE BENEFITS THEY EXPECT FROM THE MERGER.
DoubleClick and @plan entered into the amended and restated merger agreement
with the expectation that the merger will result in significant benefits.
Achieving the benefits of the merger depends on the timely, efficient and
successful execution of a number of post-merger events. Key events include:
integrating the operations and personnel of the two companies;
offering the existing products and services of each company to the other
company's customers; and
developing new products and services that utilize the assets of both
companies.
They will need to overcome significant issues, however, to realize any
benefits or synergies from the merger. The successful execution of these
post-merger events will involve considerable risk and may not be successful.
Operations and personnel. DoubleClick is a provider of comprehensive global
Internet advertising solutions. @plan provides online tools for optimizing
Internet advertising and merchandising strategies through its target market
research planning systems. DoubleClick's principal offices are located in New
York, New York, while @plan's principal offices are located in Stamford,
Connecticut. Currently, there are no plans to relocate either of these principal
offices. Although DoubleClick currently plans to operate @plan as a separate
business unit in order for the merger to be successful, @plan's operations and
personnel must be successfully integrated with DoubleClick's operations and
personnel. DoubleClick's failure to complete the integration successfully could
result in the loss of key personnel and customers.
Products and services. Each company initially intends to offer its
respective products and services to the customers of the other company. There
can be no assurance that either company's customers will have any interest in
the other company's products and services. The failure of such cross-marketing
efforts would diminish the synergies expected to be realized by the merger.
In addition, after the merger DoubleClick intends to develop new products
and services that combine the assets of both the DoubleClick and @plan
businesses. To date, the companies have not thoroughly investigated the
technological, market-driven or other obstacles in developing and marketing
these new products and services in a timely and efficient way. There can be no
assurance that DoubleClick will be able to overcome these obstacles in
developing new products and services, or that there will be a market for the new
products or services developed by DoubleClick after the merger.
In general, DoubleClick and @plan cannot offer any assurances that they can
successfully integrate or realize the anticipated benefits of the merger. Their
failure to do so could have a material adverse effect on the combined company's
business, financial condition and operating results or could result in the loss
of key personnel. In addition, the attention and effort devoted to the
integration of the two companies will significantly divert management's
attention from other important issues, and could seriously harm the combined
company.
For purposes of the discussion throughout this proxy statement/prospectus, a
'material adverse effect' means any change in, or effect on, the business of
DoubleClick or @plan that is, or is reasonably
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likely to be, materially adverse to the business, assets, liabilities, financial
condition or results of operations of DoubleClick or @plan, as the case may be,
with certain exceptions as described in the amended and restated merger
agreement.
THE MERGER COULD ADVERSELY AFFECT COMBINED FINANCIAL RESULTS.
If the benefits of the merger do not exceed the costs associated with the
merger, including any dilution to DoubleClick's stockholders resulting from the
issuance of shares in connection with the merger, DoubleClick's financial
results, including earnings per share, could be adversely affected.
THE MARKET PRICE OF DOUBLECLICK COMMON STOCK MAY DECLINE AS A RESULT OF THE
MERGER.
The market price of DoubleClick common stock may decline as a result of the
merger if:
the integration of DoubleClick and @plan is unsuccessful;
DoubleClick does not achieve the perceived benefits of the merger as
rapidly as, or to the extent anticipated by, financial or industry
analysts; or
the effect of the merger on DoubleClick's financial results is not
consistent with the expectations of financial or industry analysts.
DOUBLECLICK MUST MANAGE THE INTEGRATION OF ACQUIRED COMPANIES SUCCESSFULLY IN
ORDER TO ACHIEVE DESIRED RESULTS.
As a part of its business strategy, DoubleClick expects to enter into a
number of business combinations and acquisitions, including the recently
proposed acquisition of NetCreations. Acquisition transactions are accompanied
by a number of risks, including:
the difficulty of assimilating the operations and personnel of the acquired
companies;
the potential disruption of the ongoing businesses and distraction of
management of DoubleClick and the acquired companies;
the difficulty of incorporating acquired technology and rights into
DoubleClick's products and services;
unanticipated expenses related to technology integration;
difficulties in maintaining uniform standards, controls, procedures and
policies;
the impairment of relationships with employees and customers as a result of
any integration of new management personnel; and
potential unknown liabilities associated with acquired businesses.
The combined company may not succeed in addressing these risks or any other
problems encountered in connection with the merger or such other business
combinations and acquisitions.
@PLAN'S OFFICERS AND DIRECTORS HAVE CONFLICTS OF INTEREST THAT MAY INFLUENCE
THEM TO SUPPORT OR APPROVE THE AMENDED AND RESTATED MERGER AGREEMENT.
The directors and officers of @plan participate in arrangements and have
continuing indemnification against liabilities that provide them with interests
in the merger that are different from, or in addition to, those of the @plan
shareholders, including the following:
The officers and directors of @plan own stock options to purchase an
aggregate of 1,623,500 shares of @plan common stock. If the merger is
completed, such options that are unvested will automatically become vested
and exercisable;
Two @plan executive officers have entered into employment agreements with
DoubleClick. One officer has entered into a consulting agreement with
DoubleClick and one officer has entered into a severance agreement with
DoubleClick, each of which entitles each officer to the
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severance arrangements currently in place with @plan and becomes effective
when the merger is completed; and
DoubleClick has agreed to indemnify and to cause the surviving corporation
in the merger to indemnify each present and former @plan officer and
director against liabilities arising out of such person's services as an
officer or director. In addition, DoubleClick will cause Atlas Acquisition
Corp., as the surviving corporation, to maintain officers' and directors'
liability insurance to cover any such liabilities for the next three years.
For the above reasons, the directors and officers of @plan could be more
likely to vote to approve the amended and restated merger agreement than if they
did not hold these interests. @plan shareholders should consider whether these
interests may have influenced these directors and officers to support or
recommend the merger.
FAILURE TO COMPLETE THE MERGER COULD NEGATIVELY IMPACT @PLAN'S STOCK PRICE AND
FUTURE BUSINESS AND OPERATIONS.
If the merger is not completed for any reason, @plan may be subject to a
number of material risks, including the following:
@plan may be required to pay DoubleClick a termination fee of $4.0 million,
plus reimburse up to $1.0 million of DoubleClick's expenses;
the price of @plan common stock may decline to the extent that the current
market price of @plan common stock reflects a market assumption that the
merger will be completed; and
costs related to the merger, such as legal, accounting and financial
advisor fees, must be paid even if the merger is not completed.
In addition, @plan customers and information sources may, in response to the
announcement of the merger, delay or defer decisions concerning @plan. Any delay
or deferral in those decisions by @plan customers or suppliers could have a
material adverse effect on @plan, regardless of whether the merger is ultimately
completed. Similarly, current and prospective @plan employees may experience
uncertainty about their future roles with DoubleClick until DoubleClick's
strategies with regard to @plan are announced or executed. This may adversely
affect @plan's ability to attract and retain key management, sales, marketing
and technical personnel.
Further, if the merger is terminated and @plan's board of directors
determines to seek another merger or business combination, there can be no
assurance that it will be able to find a partner willing to pay an equivalent or
more attractive price than the price to be paid in the merger. In addition,
while the amended and restated merger agreement is in effect, subject to
compliance with applicable securities laws and fulfillment of its fiduciary
duties, @plan is prohibited from soliciting, initiating, encouraging or entering
into extraordinary transactions, such as a merger, sale of assets or other
business combination, with any party other than DoubleClick.
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RISKS RELATED TO DOUBLECLICK
In addition to the risks relating to the merger discussed above, DoubleClick
is subject to its own specific risks relating to its business model, strategy,
and the legal, regulatory and business environment, including those set forth
below.
RISKS RELATING TO DOUBLECLICK AND ITS BUSINESS
DOUBLECLICK'S LIMITED OPERATING HISTORY MAKES EVALUATING ITS BUSINESS DIFFICULT.
DoubleClick was incorporated in January 1996 and has a limited operating
history. An investor in DoubleClick's common stock must consider the risks and
difficulties frequently encountered by early stage companies in new and rapidly
evolving industries, including the Internet advertising industry. DoubleClick's
risks include:
ability to sustain historical revenue growth rates;
relying on the DoubleClick networks;
managing its expanding operations;
competition;
attracting, retaining and motivating qualified personnel;
maintaining its current, and developing new, strategic relationships with
Web publishers;
ability to anticipate and adapt to the changing Internet industry; and
attracting and retaining a large number of advertisers from a variety of
industries.
DoubleClick also depends on the growing use of the Internet for advertising,
commerce and communication, and on general economic conditions. DoubleClick
cannot assure you that its business strategy will be successful or that it will
successfully address these risks.
DOUBLECLICK HAS A HISTORY OF LOSSES AND ANTICIPATES CONTINUED LOSSES.
DoubleClick incurred net losses of $4.0 million for the year ended December
31, 1996, $7.7 million for the year ended December 31, 1997, $18.0 million for
the year ended December 31, 1998, and $55.8 million for the year ended December
31, 1999. For the nine months ended September 30, 2000, DoubleClick incurred a
net loss of $51.2 million and, as of September 30, 2000, its accumulated deficit
was $161.1 million. DoubleClick has not achieved profitability and expects to
continue to incur operating losses in the future. DoubleClick expects to
continue to incur significant operating and capital expenditures and, as a
result, it will need to generate significant revenue to achieve and maintain
profitability. Although its revenue has grown in recent quarters, DoubleClick
cannot assure you that it will achieve sufficient revenue to achieve or sustain
profitability. Even if it does achieve profitability, DoubleClick cannot assure
you that it can sustain or increase profitability on a quarterly or annual basis
in the future. If revenue grows slower than DoubleClick anticipates, or if
operating expenses exceed its expectations or cannot be adjusted accordingly,
DoubleClick's business, results of operations and financial condition will be
materially and adversely affected.
DOUBLECLICK DERIVES A SUBSTANTIAL PORTION OF ITS REVENUE FROM WEB SITES OF A
LIMITED NUMBER OF WEB PUBLISHERS AND THE LOSS OF THESE WEB PUBLISHERS AS
CUSTOMERS COULD HARM ITS BUSINESS.
DoubleClick derives a substantial portion of its DoubleClick Media revenue
from ad impressions it delivers on the Web sites of a limited number of Web
publishers. For the nine months ended September 30, 2000, approximately 19% of
DoubleClick's revenue resulted from ads delivered on the Web sites of the top
five Web publishers on its DoubleClick networks. DoubleClick's business, results
of operations and financial condition could be materially and adversely affected
by the loss of one or more of the Web publishers that account for a significant
portion of the revenue from its DoubleClick networks or any significant
reduction in traffic on these Web publisher's Web sites.
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The loss of these Web publishers could also cause advertisers or other Web
publishers to leave DoubleClick's networks, which could materially and adversely
affect its business, results of operations and financial condition. Typically
DoubleClick enters into short-term contracts with Web publishers for inclusion
of their Web sites in DoubleClick's networks. Since these contracts are
short-term, DoubleClick will have to negotiate new contracts or renewals in the
future, which may have terms that are not as favorable to it as the terms of the
existing contracts. DoubleClick's business, results of operations and financial
condition could be materially and adversely affected by such new contracts or
renewals.
DOUBLECLICK RELIES ON ITS RELATIONSHIP WITH ALTAVISTA AND CHANGES IN THIS
RELATIONSHIP COULD HARM ITS BUSINESS.
DoubleClick's revenues have, in the past, significantly relied on revenues
generated from advertisements delivered on or through the AltaVista Web site. On
August 7, 2000, DoubleClick announced the restructuring of its Advertising
Services Agreement with AltaVista. CMGI, Inc. currently owns approximately 82%
of AltaVista. CMGI also owns several Internet advertising and marketing
companies either directly or indirectly through its majority owned subsidiary
Engage. These companies, including AdForce, AdKnowledge, Flycast Communications,
Adsmart and Engage, compete with DoubleClick's Internet advertising solutions.
Under the restructured agreement, AltaVista has extended its agreement to use
DoubleClick's DART for Publishers ad serving solution through 2004. In addition,
AltaVista will accelerate taking lead advertising sales responsibility for its
worldwide network of Web sites in the United Kingdom, France, Germany, Italy,
Sweden, and the Netherlands by January 1, 2001. The majority of advertising
served on AltaVista will use DART through 2002. In 2003, at least half of all of
AltaVista's ads will be served through DART. AltaVista will assume majority
responsibility for ad serving thereafter. In addition, DoubleClick's DART for
Advertisers solution will run the majority of AltaVista's online advertising
campaigns through 2004. The unexpected loss of AltaVista as a customer or any
significant reduction in traffic on or through the AltaVista Web site could
materially and adversely affect DoubleClick's business, results of operations
and financial condition.
DOUBLECLICK'S BUSINESS MAY BE MATERIALLY ADVERSELY AFFECTED BY LAWSUITS RELATED
TO PRIVACY AND DOUBLECLICK'S BUSINESS PRACTICES.
DoubleClick is a defendant in several pending class action lawsuits
alleging, among other things, that DoubleClick unlawfully obtains and uses
Internet users' personal information. DoubleClick is also the subject of a
Federal Trade Commission inquiry concerning its collection and maintenance of
information concerning Internet users, and inquiries involving the attorneys
general of several states relating to its collection, maintenance and sharing of
information concerning, and its disclosure of those practices to, Internet
users. DoubleClick may receive additional regulatory inquiries and intends to
cooperate fully. Class action litigation and regulatory inquiries of these types
are often expensive and time-consuming and their outcome is uncertain.
DoubleClick cannot quantify the amount of monetary or human resources that
it will be required to use to defend itself in these proceedings. DoubleClick
may need to spend significant amounts on its legal defense, senior management
may be required to divert their attention from other portions of its business,
new product launches may be deferred or canceled as a result of these
proceedings, and DoubleClick may be required to make changes to its present and
planned products or services, any of which could materially and adversely affect
its business, financial condition and results of operations. If, as a result of
any of these proceedings, a judgment is rendered or a decree is entered against
DoubleClick, it may materially and adversely affect its business, financial
condition and results of operations.
DOUBLECLICK DERIVES A SUBSTANTIAL PORTION OF ITS REVENUE FROM ADVERTISEMENTS IT
DELIVERS TO WEB SITES ON DOUBLECLICK NETWORKS, AND A DECREASE IN TRAFFIC LEVELS
COULD HARM ITS BUSINESS.
DoubleClick derives a large portion of its revenue from advertisements it
delivers to Web sites on its DoubleClick networks. DoubleClick expects that its
DoubleClick networks will continue to account
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for a substantial portion of its revenue for the foreseeable future.
DoubleClick's networks consist of Web sites of Web publishers with which it has
short-term contracts. DoubleClick cannot assure you that these Web publishers
will remain associated with DoubleClick's networks, that any DoubleClick network
Web site will maintain consistent or increasing levels of traffic over time, or
that DoubleClick will be able to replace in a timely or effective manner any
existing DoubleClick network Web site with other Web sites with comparable
traffic patterns and user demographics. DoubleClick's failure to successfully
market its DoubleClick networks, the loss of one or more of the Web publishers
that account for a significant portion of its revenue from its DoubleClick
networks, or the failure of the Web sites on its DoubleClick networks to
maintain consistent or increasing levels of traffic would materially and
adversely affect DoubleClick's business, results of operations and financial
condition.
DOUBLECLICK'S ADVERTISING CUSTOMERS AND THE COMPANIES WITH WHICH IT HAS
STRATEGIC BUSINESS RELATIONSHIPS MAY EXPERIENCE ADVERSE BUSINESS CONDITIONS THAT
COULD ADVERSELY AFFECT ITS BUSINESS.
As a result of unfavorable conditions in the public equity markets, some of
DoubleClick's customers may have difficulty raising sufficient capital to
support their long-term operations. As a result, these customers may reduce
their spending on Internet advertising, which could materially and adversely
affect DoubleClick's business, financial condition and results of operations. In
addition, from time to time, DoubleClick has entered into strategic business
relationships with other companies, the nature of which varies, but generally in
the context of customer relationships. These companies may experience adverse
business conditions that may render them unable to meet DoubleClick's
expectations for the strategic business relationship or to fulfill their
contractual obligations to DoubleClick. Such an event could have a material
adverse impact on DoubleClick's business, financial condition and results of
operations.
DOUBLECLICK'S QUARTERLY OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT
FLUCTUATIONS AND YOU SHOULD NOT RELY ON THEM AS AN INDICATION OF FUTURE
OPERATING PERFORMANCE.
DoubleClick's revenue and results of operations may fluctuate significantly
in the future as a result of a variety of factors, many of which are beyond
DoubleClick's control. These factors include:
advertiser, Web publisher and direct marketer demand for DoubleClick's
solutions;
Internet user traffic levels;
changes in fees paid by advertisers;
changes in service fees payable by DoubleClick to Web publishers in its
networks;
the introduction of new Internet advertising services by DoubleClick or its
competitors;
variations in the levels of capital or operating expenditures and other
costs relating to the expansion of DoubleClick's operations; and
general economic conditions.
For the foreseeable future, DoubleClick's revenue from DoubleClick
TechSolutions and DoubleClick Media will also remain dependent on advertising
activity on DoubleClick's networks. This future revenue is difficult to
forecast. In addition, DoubleClick plans to significantly increase its operating
expenses so that it can continue its international expansion, upgrade and
enhance its DART technology and expand its product and service offerings, market
and support its solutions and increase its sales and marketing operations.
DoubleClick may be unable to adjust spending quickly enough to offset any
unexpected revenue shortfall. If DoubleClick has a shortfall in revenue in
relation to its expenses, or if its expenses exceed increased revenue, then
DoubleClick's business, results of operations and financial condition could be
materially and adversely affected. These results would likely affect the market
price of DoubleClick's common stock in a manner which may be unrelated to its
long term operating performance.
As a result, DoubleClick believes that period-to-period comparisons of its
results of operations may not be meaningful. You should not rely on past periods
as indicators of future performance.
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RAPID GROWTH IN DOUBLECLICK'S BUSINESS COULD STRAIN ITS MANAGERIAL, OPERATIONAL,
FINANCIAL AND INFORMATION SYSTEM RESOURCES.
In recent years, DoubleClick has experienced significant growth, both
internally and through acquisitions, that has placed considerable demands on its
managerial, operational and financial resources. To continue to successfully
implement DoubleClick's business plan in its rapidly evolving industry requires
an effective planning and management process. DoubleClick continues to increase
the scope of its operations both domestically and internationally, and it has
grown its workforce substantially. The anticipated future growth in the scope of
its operations will continue to place a significant strain on its management
systems and resources. DoubleClick expects that it will need to continue to
improve its financial and managerial controls and reporting systems and
procedures, and will need to continue to expand, train and manage its workforce.
DoubleClick cannot assure you that if it continues to grow, management will be
effective in attracting and retaining additional qualified personnel, expanding
its physical facilities, integrating acquired businesses or otherwise managing
growth. As of September 30, 1999, DoubleClick had a total of 1,162 employees
and, as of September 30, 2000, it had a total of 2,104 employees. DoubleClick
also cannot assure you that its information systems, procedures or controls will
be adequate to support its operations or that its management will be able to
achieve the rapid execution necessary to successfully offer its services and
implement its business plan. DoubleClick's future performance may also depend on
its effective integration of acquired businesses. Even if successful, this
integration may take a significant period of time and expense, and may place a
significant strain on DoubleClick's resources. DoubleClick's inability to
effectively manage its growth could materially and adversely affect its
business, financial condition and results of operations.
DOUBLECLICK'S BUSINESS MAY SUFFER IF IT IS UNABLE TO SUCCESSFULLY IMPLEMENT ITS
BUSINESS MODEL.
A significant part of DoubleClick's business model is to generate revenue by
providing interactive marketing solutions to advertisers, ad agencies and Web
publishers. The profit potential for this business model is unproven. To be
successful, both Internet advertising and DoubleClick's solutions will need to
achieve broad acceptance by advertisers, ad agencies and Web publishers.
DoubleClick's ability to generate significant revenue from advertisers will
depend, in part, on its ability to contract with Web publishers that have Web
sites with adequate available ad space inventory. Further, these Web sites must
generate sufficient user traffic with demographic characteristics attractive to
DoubleClick's advertisers. The intense competition among Internet advertising
sellers has led to the creation of a number of pricing alternatives for Internet
advertising. These alternatives make it difficult for DoubleClick to project
future levels of advertising revenue and applicable gross margin that can be
sustained by DoubleClick or the Internet advertising industry in general.
Intensive marketing and sales efforts may be necessary to educate
prospective advertisers regarding the uses and benefits of, and to generate
demand for, DoubleClick's products and services, including its new products and
services such as the Sonar Network, Abacus Online Alliance and the DARTmail
Services. Enterprises may be reluctant or slow to adopt a new approach that may
replace, limit or compete with their existing direct marketing systems. In
addition, since online direct marketing is emerging as a new and distinct
business apart from online advertising, potential adopters of online direct
marketing services will increasingly demand functionality tailored to their
specific requirements. DoubleClick may be unable to meet the demands of these
clients.
Acceptance of DoubleClick's new solutions will depend on the continued
emergence of Internet commerce, communication and advertising, and demand for
its solutions. DoubleClick cannot assure you that demand for its new solutions
will emerge or become sustainable.
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DISRUPTION OF DOUBLECLICK'S SERVICES DUE TO UNANTICIPATED PROBLEMS OR FAILURES
COULD HARM ITS BUSINESS.
DoubleClick's DART technology resides on a computer system located in
DoubleClick's New York City offices and in its data centers in New Jersey and
California and in Europe, Asia and Latin America. This system's continuing and
uninterrupted performance is critical to DoubleClick's success. Customers may
become dissatisfied by any system failure that interrupts DoubleClick's ability
to provide its services to them, including failures affecting DoubleClick's
ability to deliver advertisements without significant delay to the viewer.
Sustained or repeated system failures would reduce the attractiveness of
DoubleClick's solutions to advertisers, ad agencies and Web publishers and
result in contract terminations, fee rebates and makegoods, thereby reducing
revenue. Slower response time or system failures may also result from straining
the capacity of DoubleClick's deployed software or hardware due to an increase
in the volume of advertising delivered through its servers. To the extent that
DoubleClick does not effectively address any capacity constraints or system
failures, DoubleClick's business, results of operations and financial condition
could be materially and adversely affected.
DoubleClick's operations are dependent on its ability to protect its
computer systems against damage from fire, power loss, water damage,
telecommunications failures, vandalism and other malicious acts, and similar
unexpected adverse events. In addition, interruptions in DoubleClick's solutions
could result from the failure of its telecommunications providers to provide the
necessary data communications capacity in the time frame it requires. Despite
precautions DoubleClick has taken, unanticipated problems affecting its systems
have from time to time in the past caused, and in the future could cause,
interruptions in the delivery of DoubleClick's solutions. DoubleClick's
business, results of operations and financial condition could be materially and
adversely affected by any damage or failure that interrupts or delays its
operations.
COMPETITION IN INTERNET ADVERTISING AND RELATED PRODUCTS AND SERVICES IS INTENSE
AND LIKELY TO INCREASE IN THE FUTURE, AND DOUBLECLICK MAY NOT BE ABLE TO COMPETE
SUCCESSFULLY.
The business of Internet advertising and related products and services is
intensely competitive. DoubleClick expects competition to continue to increase
because this business has no substantial barriers to entry. Competition may also
increase as a result of industry consolidation. DoubleClick believes that its
ability to compete depends upon many factors both within and beyond its control,
including the following:
the timing and acceptance of new solutions and enhancements to existing
solutions developed either by DoubleClick or its competitors;
customer service and support efforts;
sales and marketing efforts; and
the ease of use, performance, price and reliability of solutions developed
either by DoubleClick or its competitors.
DoubleClick competes for Internet advertising revenue with large Web
publishers and Web portals, such as America Online, Excite@Home, Microsoft,
GO.com and Yahoo!. Further, its DoubleClick networks compete with a variety of
Internet advertising networks, including 24/7 Media. In marketing its
DoubleClick networks and DART Service to Web publishers, DoubleClick also
competes with providers of ad servers and related services. CMGI also now owns
several Internet advertising and marketing companies either directly or
indirectly through its majority owned subsidiary Engage. These companies,
including AdForce, AdKnowledge, Flycast Communications, Adsmart and Engage,
compete with DoubleClick's Internet advertising solutions. DoubleClick also
encounters competition from a number of other sources, including content
aggregation companies, companies engaged in advertising sales networks,
advertising agencies, and other companies that facilitate Internet advertising.
Many of DoubleClick's existing competitors, as well as a number of potential
new competitors, have longer operating histories, greater name recognition,
larger customer bases and significantly greater financial, technical and
marketing resources than DoubleClick. These factors may allow them to respond
more quickly than DoubleClick can to new or emerging technologies and changes in
customer
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requirements. It may also allow them to devote greater resources than
DoubleClick can to the development, promotion and sale of their products and
services. These competitors may also engage in more extensive research and
development, undertake more far-reaching marketing campaigns, adopt more
aggressive pricing policies and make more attractive offers to existing and
potential employees, strategic partners, advertisers and Web publishers.
DoubleClick cannot assure you that its competitors will not develop products or
services that are equal or superior to its solutions or that achieve greater
acceptance than its solutions. In addition, current and potential competitors
have established or may establish cooperative relationships among themselves or
with third parties to increase the ability of their products or services to
address the needs of DoubleClick's prospective advertising, ad agency and Web
publisher customers. As a result, it is possible that new competitors may emerge
and rapidly acquire significant market share. Increased competition is likely to
result in price reductions, reduced gross margins and loss of market share.
DoubleClick cannot assure you that it will be able to compete successfully or
that competitive pressures will not materially and adversely affect its
business, results of operations or financial condition.
DOUBLECLICK MAY NOT COMPETE SUCCESSFULLY WITH TRADITIONAL ADVERTISING MEDIA FOR
ADVERTISING DOLLARS.
Companies doing business on the Internet, including DoubleClick, must also
compete with television, radio, cable and print (traditional advertising media)
for a share of advertisers' total advertising budgets. Advertisers may be
reluctant to devote a significant portion of their advertising budget to
Internet advertising if they perceive the Internet to be a limited or
ineffective advertising medium.
DOUBLECLICK'S REVENUE IS SUBJECT TO SEASONAL AND CYCLICAL FLUCTUATIONS.
DoubleClick believes that its business is subject to seasonal fluctuations.
Advertisers generally place fewer advertisements during the first and third
calendar quarters of each year, which directly affects DoubleClick's DoubleClick
Media and DoubleClick TechSolutions businesses, and the direct marketing
industry generally mails substantially more marketing materials in the third
calendar quarter, which directly affects DoubleClick's DoubleClick Data Services
business. Further, Internet user traffic typically drops during the summer
months, which reduces the amount of advertising to sell and deliver.
Expenditures by advertisers and direct marketers tend to vary in cycles that
reflect overall economic conditions as well as budgeting and buying patterns.
DoubleClick's revenue could be materially reduced by a decline in the economic
prospects of advertisers and direct marketers or in the economy in general,
which could alter current or prospective advertisers' and direct marketers'
spending priorities or budget cycles or extend DoubleClick's sales cycle.
Due to the risks discussed in this section, you should not rely on
quarter-to-quarter comparisons of DoubleClick's results of operations as an
indication of future performance. It is possible that in some future periods
DoubleClick's results of operations may be below the expectations of public
market analysts and investors. In this event, the price of DoubleClick's common
stock may fall.
DOUBLECLICK MAY NOT BE ABLE SUCCESSFULLY TO MAKE ACQUISITIONS OF OR INVESTMENTS
IN OTHER COMPANIES.
DoubleClick may acquire or make investments in other complementary
businesses, products, services or technologies. From time to time DoubleClick
has had discussions with other companies regarding its acquiring, or investing
in, their businesses, products, services or technologies. DoubleClick cannot
assure you that it will be able to identify other suitable acquisition or
investment candidates. Even if DoubleClick does identify suitable candidates,
DoubleClick cannot assure you that it will be able to make other acquisitions or
investments on commercially acceptable terms. If DoubleClick buys a company,
DoubleClick could have difficulty in integrating that company's personnel and
operations. In addition, the key personnel of the acquired company may decide
not to work for DoubleClick. If DoubleClick acquires different types of
businesses, it could have difficulty in integrating the acquired products,
services or technologies into its operations. These difficulties could disrupt
its ongoing
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business, distract its management and employees, increase its expenses and
adversely affect its results of operations due to accounting requirements such
as amortization of goodwill. Furthermore, DoubleClick may incur debt or issue
equity securities to pay for any future acquisitions. The issuance of equity
securities could be dilutive to DoubleClick's existing stockholders.
DOUBLECLICK IS DEPENDENT ON KEY PERSONNEL AND ON EMPLOYEE RETENTION AND
RECRUITING FOR ITS FUTURE SUCCESS.
DoubleClick's future success depends to a significant extent on the
continued service of its key technical, sales and senior management personnel.
DoubleClick does not have employment agreements with most of these executives.
The loss of the services of one or more of DoubleClick's key employees would
likely materially and adversely affect its business, results of operations and
financial condition. DoubleClick's future success also depends on its continuing
to attract, retain and motivate highly skilled employees. Competition for
employees in its industry is intense. DoubleClick may be unable to retain its
key employees or attract, assimilate or retain other highly qualified employees
in the future. DoubleClick has from time to time in the past experienced, and it
expects to continue to experience in the future, difficulty in hiring and
retaining highly skilled employees with appropriate qualifications.
IF DOUBLECLICK FAILS TO ADEQUATELY PROTECT ITS INTELLECTUAL PROPERTY OR FACES A
CLAIM OF INTELLECTUAL PROPERTY INFRINGEMENT BY A THIRD PARTY, IT COULD LOSE ITS
INTELLECTUAL PROPERTY RIGHTS OR BE LIABLE FOR DAMAGES.
DoubleClick's success and ability to effectively compete are substantially
dependent on the protection of its internally developed technologies and its
trademarks, which it protects through a combination of patent, copyright, trade
secret, unfair competition and trademark law as well as contractual agreements.
In September 1999, the U.S. Patent Office issued to DoubleClick a patent that
covers the DART technology. DoubleClick has also filed patent applications for
some of its other technology.
DoubleClick also has rights in the trademarks that it uses to market its
solutions. These trademarks include DOUBLECLICK, DART and ABACUS. DoubleClick
has applied to register its trademarks in the United States and internationally.
DoubleClick has received registrations for the marks DOUBLECLICK, DART and
ABACUS, among others. DoubleClick cannot assure you that any of its current or
future patent applications or trademark applications will be approved. Even if
they are approved, these patents or trademarks may be successfully challenged by
others or invalidated. If DoubleClick's trademark registrations are not approved
because third parties own these trademarks, DoubleClick's use of these
trademarks will be restricted unless it enters into arrangements with these
parties which may be unavailable on commercially reasonable terms, if at all. In
addition, DoubleClick has licensed, and may license in the future, DoubleClick's
trademarks, trade dress and similar proprietary rights to third parties. While
it endeavors to ensure that the quality of its brands are maintained by its
licensees, its licensees may take actions that could materially and adversely
affect the value of its proprietary rights and reputation.
In order to secure and protect its proprietary rights, DoubleClick generally
enters into confidentiality, proprietary rights and license agreements, as
appropriate, with its employees, consultants and business partners, and
generally controls access to and distribution of its technologies, documentation
and other proprietary information. Despite these efforts, DoubleClick cannot be
certain that the steps it takes to prevent unauthorized use of its proprietary
rights are sufficient to prevent misappropriation of its solutions or
technologies, particularly in foreign countries where laws or law enforcement
practices may not protect its proprietary rights as fully as in the United
States. In addition, DoubleClick cannot assure you that the courts will
adequately enforce contractual arrangements which it has entered into to protect
its proprietary technologies.
DoubleClick cannot assure you that any of its proprietary rights will be
viable or of value in the future since the validity, enforceability and scope of
protection of certain proprietary rights in Internet-related industries are
uncertain and still evolving. Furthermore, third parties may assert infringement
claims against it. From time to time DoubleClick has been, and it expects to
continue to be, subject to
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claims in the ordinary course of its business, including claims of alleged
infringement of the trademarks and other intellectual property rights of third
parties by it or the Web publishers with Web sites in its DoubleClick networks.
Such claims and any resultant litigation, should it occur, could subject
DoubleClick to significant liability for damages, and it could be restricted
from using its ad delivery technology or other intellectual property. Any claims
or litigation from third parties may also result in limitations on its ability
to use the intellectual property, including its ad delivery technology, which
are the subject of such claims or litigation unless it enters into arrangements
with the third parties responsible for such claims or litigation which may be
unavailable on commercially reasonable terms, if at all. In addition, even if
DoubleClick prevails, such litigation could be time-consuming and expensive to
defend, and could result in the diversion of DoubleClick's time and attention,
any of which could materially and adversely affect its business, results of
operations and financial condition.
DoubleClick has filed a patent infringement suit against each of Sabela
Media, Inc. and L90, Inc. in order to enforce its patent that covers the DART
technology. 24/7 Media has acquired Sabela Media. In May 2000, 24/7 Media filed
a patent infringement litigation suit against DoubleClick which alleged that
DoubleClick infringes, and is inducing and contributing to the infringement of a
patent owned by 24/7 Media. 24/7 Media sought damages in an unspecified amount,
an injunction against infringement of the patent, and its attorneys fees and
costs. In October 2000, DoubleClick, 24/7 Media and Sabela Media settled the
patent litigation 24/7 Media initiated against DoubleClick and the patent
litigation previously initiated against Sabela Media by DoubleClick.
Consequently, both of these lawsuits will be dismissed with prejudice. As part
of the settlement, 24/7 Media and DoubleClick granted each other certain rights
in certain of their respective patents. Under the settlement agreement, no other
terms of the settlement are permitted to be disclosed. Separately, L90 and
DoubleClick have entered into definitive agreements to settle the patent
infringement lawsuit, including L90's related counterclaims, pending in federal
district court in Manhattan. Under the definitive documents, the parties agreed
to dismiss the pending lawsuit with prejudice, and agreed to grant each other
certain rights in certain of their respective patents. No other terms of the
settlement were disclosed.
DOUBLECLICK'S RIGHT TO KEEP AND USE INFORMATION COLLECTED IN ITS DATABASES MAY
BE CHALLENGED IN THE FUTURE, WHICH COULD ADVERSELY AFFECT DOUBLECLICK'S BUSINESS
AND RESULTS OF OPERATIONS.
DoubleClick collects and compiles information in databases for the product
offerings of all its businesses. Individuals have claimed, and may claim in the
future, that DoubleClick's collection of this information is illegal. Although
DoubleClick believes that it has the right to use and compile the information in
these databases, it cannot assure you that its ability to do so will remain
lawful, that any trade secret, copyright or other intellectual property
protection will be available for its databases, or that statutory protection
that is or becomes available for databases will enhance its rights. In addition,
others may claim rights to the information in DoubleClick's databases. Further,
pursuant to its contracts with Web publishers using its solutions, DoubleClick
is obligated to keep certain information regarding each Web publisher
confidential and, therefore, may be restricted from further using that
information in its businesses.
DOUBLECLICK MUST ADAPT TO TECHNOLOGY TRENDS AND EVOLVING INDUSTRY STANDARDS OR
IT WILL NOT BE COMPETITIVE.
The Internet and Internet advertising businesses are characterized by
rapidly changing technologies, evolving industry standards, frequent new product
and service introductions, and changing customer demands. DoubleClick's future
success will depend on its ability to adapt to rapidly changing technologies and
to enhance existing solutions and develop and introduce a variety of new
solutions and services to address its customers' changing demands. DoubleClick
may experience difficulties that could delay or prevent the successful design,
development, introduction or marketing of its solutions and services. In
addition, DoubleClick's new solutions or enhancements must meet the requirements
of its current and prospective customers and must achieve significant
acceptance. Material delays in introducing new solutions and enhancements may
cause customers to forego purchases of DoubleClick's solutions and purchase
those of its competitors. DoubleClick's failure to successfully design, develop,
test and introduce new services, or the failure of its recently introduced
services to achieve acceptance,
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could prevent DoubleClick from maintaining existing client relationships,
gaining new clients or expanding its business and could materially and adversely
affect its business, financial condition and results of operations.
DOUBLECLICK'S BUSINESS COULD BE ADVERSELY AFFECTED IF IT FAILS SUCCESSFULLY TO
EXPAND ITS INTERNATIONAL OPERATIONS AND SALES AND MARKETING EFFORTS.
DoubleClick has operations in a number of countries. It intends to continue
to expand its international operations and international sales and marketing
efforts. To date, DoubleClick has limited experience in developing localized
versions of its solutions and in marketing, selling and distributing its
solutions internationally. DoubleClick has established its DoubleClick networks
in Argentina, Australia, Brazil, Canada, France, Germany, Benelux (Belgium, the
Netherlands and Luxembourg), Scandinavia (Sweden, Norway, Finland, and Denmark),
Spain, the United Kingdom and Italy. In Asia (Taiwan, Singapore, Hong Kong and
China), and under separate agreements in Japan and Korea, DoubleClick is working
with its business partners to conduct operations, establish local networks,
aggregate Web publishers and coordinate sales and marketing efforts. Its success
in these markets is directly dependent on the success of its business partners
and their dedication of sufficient resources to DoubleClick's relationship.
DoubleClick's international operations are subject to other inherent risks,
including:
the impact of recessions in economies outside the United States;
changes in regulatory requirements;
more restrictive privacy regulation;
reduced protection for intellectual property rights in some countries;
potentially adverse tax consequences;
difficulties and costs of staffing and managing foreign operations;
political and economic instability;
fluctuations in currency exchange rates; and
seasonal fluctuations in Internet usage.
These risks may materially and adversely affect DoubleClick's business,
results of operations or financial condition.
DOUBLECLICK HAS INCURRED SIGNIFICANT DEBT OBLIGATIONS WHICH COULD HARM ITS
BUSINESS.
DoubleClick incurred $250 million of indebtedness in March 1999 from the
sale of its 4.75% Convertible Subordinated Notes due 2006. DoubleClick's ratio
of long-term debt to total equity was approximately 28.1% as of September 30,
2000. As a result of the sale of the notes, DoubleClick has substantially
increased its principal and interest obligations. The degree to which
DoubleClick is leveraged could materially and adversely affect its ability to
obtain additional financing and could make it more vulnerable to industry
downturns and competitive pressures. DoubleClick's ability to meet its debt
service obligations will depend on its future performance, which will be subject
to financial, business, and other factors affecting its operations, many of
which are beyond its control.
IF DOUBLECLICK DOES NOT SUCCESSFULLY INTEGRATE ABACUS AND NETGRAVITY OR THE
MERGERS' BENEFITS DO NOT MEET THE EXPECTATIONS OF FINANCIAL OR INDUSTRY
ANALYSTS, THE MARKET PRICE FOR DOUBLECLICK'S COMMON STOCK MAY DECLINE.
Last year, DoubleClick consummated mergers with Abacus and NetGravity with
the expectations that these mergers would result in significant benefits. Prior
to these acquisitions, DoubleClick had virtually no experience in Abacus'
business and little direct experience with NetGravity's primary business model.
Furthermore, Abacus' principal offices are located in Broomfield, Colorado while
DoubleClick's principal offices are located in New York, New York; managing the
business in a coordinated fashion, therefore, has required additional management
resources. DoubleClick will need
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to continue to overcome these significant issues in order to realize any
benefits or synergies from the mergers. DoubleClick's successful execution of
these events involves considerable risk and may not be successful. The market
price of DoubleClick common stock may be negatively impacted, and it may lose
key personnel and customers as a result of its mergers if:
DoubleClick does not successfully integrate operations and personnel of the
businesses;
DoubleClick does not achieve the perceived benefits of the mergers as
rapidly or to the extent anticipated by financial or industry analysts; or
the effect of the mergers on DoubleClick's financial results is not
consistent with the expectations of financial or industry analysts.
IF DOUBLECLICK FAILS TO SUCCESSFULLY CROSS-MARKET THE PRODUCTS OF DOUBLECLICK
MEDIA, DOUBLECLICK TECHSOLUTIONS AND DOUBLECLICK DATA SERVICES OR TO DEVELOP NEW
PRODUCTS, DOUBLECLICK MAY NOT INCREASE OR MAINTAIN ITS CUSTOMER BASE OR ITS
REVENUE.
DoubleClick offers the respective products and services historically offered
by DoubleClick, Abacus and NetGravity to its collective customers. DoubleClick
cannot assure you that any company's customers will have any interest in the
other companies' products and services. The failure of DoubleClick's
cross-marketing efforts may diminish the benefits it realizes from these
mergers. In addition, DoubleClick intends to develop new products and services
that combine the knowledge and resources of DoubleClick Media, DoubleClick
TechSolutions and DoubleClick Data Services. DoubleClick cannot assure you that
these products or services will be developed or, if developed, will be
successful or that it can successfully integrate or realize the anticipated
benefits of these mergers. As a result, DoubleClick may not be able to increase
or maintain its customer base. It cannot assure you that the transactions or
other data in Abacus' database will be predictive or useful in other sales
channels, including Internet advertising. DoubleClick cannot assure you that it
will be able to overcome the obstacles in developing new products and services,
or that there will be a demand for the new products or services developed by it
after the mergers. An inability to overcome such obstacles or a failure of such
demand to develop could materially and adversely affect DoubleClick's business,
financial condition and results of operations or could result in loss of key
personnel. In addition, the attention and effort devoted to the integration of
the acquired companies will significantly divert management's attention from
other important issues, and could seriously harm its business, financial
condition and results of operations.
EFFECTS OF ANTI-TAKEOVER PROVISIONS COULD INHIBIT THE ACQUISITION OF
DOUBLECLICK.
Some of the provisions of DoubleClick's certificate of incorporation, its
bylaws and Delaware law could, together or separately:
discourage potential acquisition proposals;
delay or prevent a change in control;
impede the ability of DoubleClick stockholders to change the composition of
DoubleClick's board of directors in any one year; and
limit the price that investors might be willing to pay in the future for
shares of DoubleClick common stock.
DOUBLECLICK'S STOCK PRICE MAY EXPERIENCE EXTREME PRICE AND VOLUME FLUCTUATIONS.
The market price of DoubleClick's common stock has fluctuated in the past
and is likely to continue to be highly volatile and could be subject to wide
fluctuations. In addition, the stock market has experienced extreme price and
volume fluctuations. The market prices of the securities of Internet-related
companies have been especially volatile. Investors may be unable to resell their
shares of DoubleClick common stock at or above the purchase price.
IF DOUBLECLICK'S STOCK PRICE IS VOLATILE, DOUBLECLICK MAY BECOME SUBJECT TO
SECURITIES LITIGATION WHICH IS EXPENSIVE AND COULD RESULT IN A DIVERSION OF
RESOURCES.
In the past, following periods of volatility in the market price of a
particular company's securities, securities class action litigation has often
been brought against that company. Many companies in
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DoubleClick's industry have been subject to this type of litigation in the past.
DoubleClick may also become involved in this type of litigation. Litigation is
often expensive and diverts management's attention and resources, which could
materially and adversely affect DoubleClick's business, financial condition and
results of operations.
FUTURE SALES OF DOUBLECLICK COMMON STOCK MAY AFFECT THE MARKET PRICE OF ITS
COMMON STOCK.
As of September 30, 2000, DoubleClick had 122,866,435 shares of common stock
outstanding, excluding 22,690,836 shares subject to options outstanding as of
such date under its stock option plans that are exercisable at prices ranging
from $0.03 to $184.35 per share. Additionally, certain holders of DoubleClick's
common stock have registration rights with respect to their shares. DoubleClick
intends to file one or more registration statements in compliance with these
registration rights. DoubleClick cannot predict the effect, if any, that future
sales of common stock or the availability of shares of common stock for future
sale, will have on the market price of its common stock prevailing from time to
time. Sales of substantial amounts of common stock (including shares included in
such registration statements, issued upon the exercise of stock options or
issued upon the conversion of DoubleClick's convertible subordinated notes), or
the perception that such sales could occur, may materially and adversely affect
prevailing market prices for its common stock.
RISKS RELATED TO DOUBLECLICK'S INDUSTRY
DOUBLECLICK'S BUSINESS MAY BE ADVERSELY AFFECTED IF DEMAND FOR INTERNET
ADVERTISING FAILS TO GROW AS PREDICTED OR DIMINISHES.
DoubleClick's future success is highly dependent on an increase in the use
of the Internet as an advertising medium. The Internet advertising industry is
new and rapidly evolving, and it cannot yet be compared with traditional
advertising media to gauge its effectiveness. As a result, demand and acceptance
for Internet advertising solutions is uncertain. Most of DoubleClick's current
or potential advertising customers have little or no experience using the
Internet for advertising purposes and they have allocated only a limited portion
of their advertising budgets to Internet advertising. The adoption of Internet
advertising, particularly by those entities that have historically relied upon
traditional media for advertising, requires the acceptance of a new way of
conducting business, exchanging information and advertising products and
services. These customers may find Internet advertising to be less effective for
promoting their products and services relative to traditional advertising media.
In addition, most of DoubleClick's current and potential Web publisher customers
have little experience in generating revenue from the sale of advertising space
on their Web sites. DoubleClick cannot assure you that current or potential
advertising customers will continue to allocate a portion of their advertising
budget to Internet advertising or that the demand for Internet advertising will
continue to develop to sufficiently support Internet advertising as a
significant advertising medium. If the demand for Internet advertising develops
more slowly than DoubleClick expects, then DoubleClick's business, results of
operations and financial condition could be materially and adversely affected.
There are currently no standards for the measurement of the effectiveness of
Internet advertising, and standard measurements may need to be developed to
support and promote Internet advertising as a significant advertising medium.
DoubleClick's advertising customers may challenge or refuse to accept its or
third-party measurements of advertisement delivery results, and its customers
may not accept any errors in such measurements. In addition, the accuracy of
database information used to target advertisements is essential to the
effectiveness of Internet advertising that may be developed in the future. The
information in DoubleClick's database, like any database, may contain
inaccuracies which its customers may not accept.
A significant portion of DoubleClick's revenue is derived from the delivery
of advertisements placed on Web sites which are designed to contain the features
and measuring capabilities requested by advertisers. If advertisers determine
that those ads are ineffective or unattractive as an advertising medium or if
DoubleClick is unable to deliver the features or measuring capabilities
requested by advertisers, the long-term growth of its online advertising
business could be limited and its revenue
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levels could decline. Also, there are 'filter' software programs that limit or
prevent advertising from being delivered to a user's computer. The commercial
viability of Internet advertising, and DoubleClick's business, results of
operations and financial condition, would be materially and adversely affected
by Web users' widespread adoption of this software.
CHANGES IN GOVERNMENT REGULATION COULD DECREASE DOUBLECLICK'S REVENUE AND
INCREASE ITS COSTS.
Laws and regulations directly applicable to Internet communications,
commerce and advertising are becoming more prevalent, and new laws and
regulations are under consideration by the United States Congress and state
legislatures. Any legislation enacted or restrictions arising from current or
future government investigations or policy could dampen the growth in use of the
Internet generally and decrease the acceptance of the Internet as a
communications, commercial and advertising medium. State governments or
governments of foreign countries might attempt to regulate DoubleClick's
transmissions or levy sales or other taxes relating to DoubleClick's activities.
The European Union has enacted its own privacy regulations that may result in
limits on the collection and use of certain user information by DoubleClick. The
laws governing the Internet, however, remain largely unsettled, even in areas
where there has been some legislative action. It may take years to determine
whether and how existing laws such as those governing intellectual property,
privacy, libel and taxation apply to the Internet and Internet advertising. In
addition, the growth and development of Internet commerce may prompt calls for
more stringent consumer protection laws, both in the United States and abroad,
that may impose additional burdens on companies conducting business over the
Internet. DoubleClick's business, results of operations and financial condition
could be materially and adversely affected by the adoption or modification of
laws or regulations relating to the Internet.
CHANGES IN LAWS RELATING TO DATA COLLECTION AND USE PRACTICES AND THE PRIVACY OF
INTERNET USERS AND OTHER INDIVIDUALS COULD HARM DOUBLECLICK'S BUSINESS.
The U.S. federal and various state governments have recently proposed
limitations on the collection and use of information regarding Internet users.
In October 1998, the European Union adopted a directive that may limit
DoubleClick's collection and use of information regarding Internet users in
Europe. At this stage, DoubleClick's DART technology targets advertising to
users through the use of 'cookies' and other non-personally-identifying
information, with the exception of advertising delivered to Web sites in Germany
where DoubleClick does not currently set cookies. DoubleClick is developing new
capabilities that would permit its DART technology to target users using
anonymous online preference marketing techniques. The effectiveness of
DoubleClick's DART technology could be limited by any regulation limiting the
collection or use of information regarding Internet users. Since many of the
proposed laws or regulations are just being developed, DoubleClick cannot yet
determine the impact these regulations may have on its business.
In addition, growing public concern about privacy and the collection,
distribution and use of information about individuals has led to self-regulation
of these practices by the Internet advertising and direct marketing industry and
to increased federal and state regulation. The Network Advertising Initiative,
or NAI, of which DoubleClick is a member along with other Internet advertising
companies, has developed self-regulatory principles for online preference
marketing. These principles were recently endorsed by the Federal Trade
Commission and the Clinton Administration, and are in the process of being
adopted by the NAI companies. The Direct Marketing Association, or DMA, the
leading trade association of direct marketers, has adopted guidelines regarding
the fair use of this information which it recommends participants, such as
DoubleClick, through DoubleClick Data Services, in the direct marketing industry
follow. DoubleClick is also subject to various federal and state regulations
concerning the collection, distribution and use of information regarding
individuals. These laws include the Federal Drivers Privacy Protection Act of
1994 and state laws which limit or preclude the use of voter registration and
driver license information, as well as laws which govern the collection and
release of consumer credit information. Although DoubleClick's compliance with
the DMA's guidelines and applicable federal and state laws and regulations has
not had a material adverse effect on it, DoubleClick cannot assure you that the
DMA will not adopt additional, more burdensome guidelines or that additional,
more burdensome federal or state laws or regulations, including antitrust and
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consumer privacy laws, will not be enacted or applied to it or its clients,
which could materially and adversely affect the business, financial condition
and results of operations of DoubleClick Data Services.
CHANGING REQUIREMENTS FOR FAIR INFORMATION COLLECTION PRACTICES AND HEIGHTENED
SCRUTINY OF DOUBLECLICK'S PRODUCTS OR SERVICES COULD REQUIRE OR CAUSE CHANGES IN
THE WAY IT CONDUCTS OR PLANS TO CONDUCT ITS BUSINESS.
There has been public debate about how fair information collection practices
should be formulated for the online and offline collection, distribution and use
of information about a consumer. Some of the discussion has focused on the fair
information collection practices that should apply when information about an
individual that is collected in the offline environment is associated with
information that is collected over the Internet about that individual. Following
DoubleClick's announcement of the Abacus merger, DoubleClick has seen a
heightened public discussion and speculation about the information collection
practices that will be employed in the industry generally, and specifically by
it.
DoubleClick is working with industry groups, such as the NAI and the Online
Privacy Alliance, to establish such standards with the U.S. government.
Nonetheless, DoubleClick cannot assure you that it will be successful in
establishing industry standards acceptable to the U.S. government or the various
state governments, or that the standards it establishes will not require
material changes to its business plans. DoubleClick also cannot assure you that
its business plans, or any U.S. industry standards that are established, will
either be acceptable to any non-U.S. government or conform to foreign legal and
business practices. As a consequence of governmental legislation or regulation
or enforcement efforts or evolving standards of fair information collection
practices, DoubleClick may be required to make changes to its products or
services in ways that could diminish the effectiveness of the product or service
or its attractiveness to potential customers. In addition, given the heightened
public discussion about consumer online privacy, DoubleClick cannot assure you
that its products and business practices will gain market acceptance, even if
they do conform to industry standards. Separately, computer users may also use
software designed to filter or prevent the delivery of advertising to their
computers. DoubleClick cannot assure you that the number of computer users who
employ filtering software will not increase. In the case that one or more of
these scenarios occur, DoubleClick's business, financial condition and results
of operations could be materially and adversely affected.
DOUBLECLICK'S BUSINESS MAY SUFFER IF THE WEB INFRASTRUCTURE IS UNABLE TO
EFFECTIVELY SUPPORT THE GROWTH IN DEMAND PLACED ON IT.
DoubleClick's success will depend, in large part, upon the maintenance of
the Web infrastructure, such as a reliable network backbone with the necessary
speed, data capacity and security, and timely development of enabling products
such as high speed modems, for providing reliable Web access and services and
improved content. DoubleClick cannot assure you that the Web infrastructure will
continue to effectively support the demands placed on it as the Web continues to
experience increased numbers of users, frequency of use or increased bandwidth
requirements of users. Even if the necessary infrastructure or technologies are
developed, DoubleClick may have to spend considerable amounts to adapt its
solutions accordingly. Furthermore, the Web has experienced a variety of outages
and other delays due to damage to portions of its infrastructure. These outages
and delays could impact the Web sites of Web publishers using DoubleClick's
solutions and the level of user traffic on Web sites on its DoubleClick
networks.
DOUBLECLICK DATA SERVICES IS DEPENDENT ON THE SUCCESS OF THE DIRECT MARKETING
INDUSTRY FOR ITS FUTURE SUCCESS.
The future success of DoubleClick Data Services is dependent in large part
on the continued demand for its services from the direct marketing industry,
including the catalog industry, as well as the continued willingness of catalog
operators to contribute their data to DoubleClick. Most of its Data Services
clients are large consumer merchandise catalogs operators in the United States.
A significant downturn in the direct marketing industry generally, including the
catalog industry, or withdrawal by a substantial number of catalog operators
from the Abacus Alliance, would have a material adverse effect
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on DoubleClick's business, financial condition and results of operations. Many
industry experts predict that electronic commerce, including the purchase of
merchandise and the exchange of information via the Internet or other media,
will increase significantly in the future. To the extent this increase occurs,
companies which now rely on catalogs or other direct marketing avenues to market
their products may reallocate resources toward these new direct marketing
channels and away from catalog-related marketing or other direct marketing
avenues, which could adversely affect demand for DoubleClick's Data Services. In
addition, the effectiveness of direct mail as a marketing tool may decrease as a
result of consumer saturation and increased consumer resistance to direct mail
in general.
INCREASES IN POSTAL RATES AND PAPER PRICES COULD HARM DOUBLECLICK DATA SERVICES.
The direct marketing activities of DoubleClick's Abacus Alliance clients are
adversely affected by postal rate increases, especially increases that are
imposed without sufficient advance notice to allow adjustments to be made to
marketing budgets. Higher postal rates may result in fewer mailings of direct
marketing materials, with a corresponding decline in the need for some of the
direct marketing services offered by DoubleClick. Increased postal rates can
also lead to pressure from DoubleClick's clients to reduce its prices for its
services in order to offset any postal rate increase. Higher paper prices may
also cause catalog companies to conduct fewer or smaller mailings which could
cause a corresponding decline in the need for DoubleClick's services.
DoubleClick's clients may aggressively seek price reductions for its services to
offset any increased materials cost. Any of these occurrences could materially
and adversely affect the business, financial condition and results of operations
of DoubleClick's Abacus business.
RISKS RELATED TO @PLAN
In addition to the risks relating to the merger and DoubleClick discussed
above, @plan is subject to its own specific risks relating to its business
model, strategy and the legal, regulatory and business environment, including
those set forth below.
RISKS RELATING TO @PLAN AND ITS BUSINESS
BECAUSE @PLAN HAS A LIMITED OPERATING HISTORY, IT IS DIFFICULT TO EVALUATE ITS
BUSINESS AND PROSPECTS.
@plan was incorporated in May 1996 and has a limited operating history. As a
result, it faces many risks and difficulties frequently encountered by early
stage companies in new and rapidly evolving markets, including the Internet
advertising and electronic commerce markets. These risks include its ability to:
sustain revenue growth rates;
manage its expanding operations;
compete with companies that have longer operating histories, greater name
recognition and greater financial resources; and
expand its current client base.
@plan also depends on the growing use of the Internet for advertising,
commerce and communication, and on general economic conditions. @plan cannot
assure you that its business strategy will be successful or that it will
successfully address these risks.
@PLAN HAS A HISTORY OF LOSSES AND ANTICIPATES CONTINUED LOSSES.
To date, @plan has not made a profit. @plan incurred net losses of
approximately $661,000 during its inception period from May 29, 1996 through
December 31, 1996, $2.8 million in 1997, $1.9 million in 1998, $2.1 million in
1999, $1.3 million for the nine months ended September 30, 1999, and $3.4
million for the nine months ended September 30, 2000. As of September 30, 2000,
its accumulated deficit was $12.1 million. @plan expects to continue incurring
significant operating and net losses through at least 2000 and, as a result,
will need to generate significant revenues to achieve and maintain
profitability. Although its revenues have grown in recent quarters, @plan cannot
assure you that it will achieve
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sufficient revenues for profitability. Even if it does achieve profitability,
@plan cannot assure you that it can sustain or increase profitability on a
quarterly or annual basis in the future. Its results of operations and financial
condition will be harmed if revenues grow more slowly than it anticipates, or if
operating expenses exceed its expectations and cannot be adjusted accordingly.
@PLAN DEPENDS ON SUBSCRIPTION RENEWALS BY ITS CLIENTS AND A DECREASE IN ITS
CURRENT RATE OF RENEWAL COULD CAUSE A DECLINE IN ITS REVENUE.
@plan derives all of its revenues from subscriptions to its systems. Because
it has a limited operating history, @plan's subscription renewal rate is based
on a limited number of contracts and it is not sure that it will continue to
experience its current rate of subscription renewal. If its renewal rate
declines, its results of operations and financial condition could be harmed.
@plan's subscription renewal rates may decline as a result of a consolidation in
its client base, the emergence of direct competition or if a significant number
of its clients cease operations.
@PLAN'S BUSINESS WILL BE HARMED IF ITS RELATIONSHIP WITH THE GALLUP ORGANIZATION
IS TERMINATED.
The methodology for the collection of data, the generation of a sample
population to be surveyed and the collection of data from that sample population
for @plan's Web user database, its U.S. population database and its
merchandising vertical system are controlled and conducted by Gallup. @plan
cannot be sure that Gallup will continue to provide it services in a manner that
allows it to execute its business strategy. If @plan's agreements with Gallup
terminate for any reason, @plan will need to find another firm to perform its
research data collection services. This could harm its business by delaying its
ability to update its database and introduce new products.
IF GALLUP EXPERIENCES PROBLEMS WITH THE TIMELY COLLECTION, PROCESSING, STORING
OR DELIVERY OF ACCURATE DATA, @PLAN MAY LOSE CREDIBILITY WITH ITS CLIENTS.
The data that comprises @plan's exclusively owned databases is collected and
statistically processed by Gallup and delivered to @plan on a quarterly basis.
Gallup could experience problems with, or make errors in, collecting,
processing, storing or delivering the data. In addition, Gallup could experience
problems with computer systems that process and store the data. These problems
could result in inaccuracies or in delays in delivery or loss of the data from
Gallup. These inaccuracies, delays or losses could cause @plan to lose
credibility with its clients or breach some client contracts which could cause
it to lose clients and could harm its business.
@PLAN HAS EXPERIENCED SIGNIFICANT GROWTH IN ITS BUSINESS IN RECENT PERIODS AND
ANY INABILITY TO MANAGE THIS GROWTH AND ANY FUTURE GROWTH COULD HARM ITS
BUSINESS.
@plan's business has grown and it expects continued growth as it adds new
products and hires new employees. This growth has placed, and its anticipated
future growth in operations will continue to place, a strain on @plan's
management systems and resources. @plan cannot assure you that its management
team will be able to efficiently or successfully manage its growth. In addition,
@plan will need to hire additional financial and operations personnel. @plan
expects that it will need to continue to improve its financial and managerial
controls and reporting systems and procedures, and it will need to continue to
expand, train and manage its workforce.
IF @PLAN IS UNABLE TO ATTRACT AND RETAIN SALES AND CLIENT SERVICE PERSONNEL OR
UNABLE TO ADEQUATELY TRAIN ITS SALES PERSONNEL IN A TIMELY MANNER, ITS BUSINESS
AND FUTURE REVENUE GROWTH WOULD BE HARMED.
@plan's business would be harmed if it is unable to attract, retain and
motivate highly qualified, experienced sales and client service personnel. @plan
needs to hire additional sales and client service personnel to achieve its
growth objectives. Competition for these individuals is intense. Even if @plan
is able to hire additional sales personnel, it typically takes months of
training before they are fully productive. @plan may be unable to attract, train
and retain an adequate number of individuals to meet its sales and client
service objectives.
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@PLAN'S BUSINESS AND FUTURE REVENUE GROWTH MAY SUFFER IF IT IS NOT SUCCESSFUL AT
DEVELOPING AND INTRODUCING NEW PRODUCTS.
@plan's future growth depends in part on its ability to offer new products
and services on a timely and cost-effective basis. @plan's business may suffer
if it fails to develop and introduce new products or if its new products are not
accepted by the market or are accepted at a slower rate than it anticipates. In
December 1998, @plan introduced the @plan Kepler E-Business System for online
retailers and consumer brand marketers. In March 2000, @plan launched its first
highly targeted vertical system focusing on the automotive, travel and
merchandising e-commerce sector. In addition, @plan plans on launching
additional vertical systems covering additional vertical e-commerce sectors.
There are many costs and risks associated with developing and introducing these
and other new products, including:
significant market research data collection and software development costs;
need for additional sales, client service and other personnel;
diversion of management attention and resources; and
the lack of acceptance of new products in the marketplace.
@plan cannot assure you that it will be successful in developing and
introducing new products.
@PLAN'S FUTURE REVENUES MAY BE UNPREDICTABLE AND ITS QUARTERLY RESULTS ARE
EXPECTED TO FLUCTUATE.
@plan's operating results have varied on a quarterly basis and may fluctuate
significantly in the future as a result of a variety of factors, many of which
are outside @plan's control. Due to these fluctuations, it is likely that in
some future quarters @plan's operating results will fall below the expectations
of securities analysts and investors, which could cause the price of its common
stock to drop. Factors that may affect @plan's quarterly operating results
include:
market acceptance of the Web as an advertising medium;
the development of the electronic commerce market;
market acceptance of its products;
the amount and timing of operating costs and capital expenditures relating
to the expansion of its business, including those related to its
development of highly targeted vertical market research and planning
systems;
variations in product or client mix, as pricing may vary based on the
volume and type of subscriptions being sold to a client;
its ability to expand its client base and retain current clients;
new competitors;
general economic conditions as well as economic conditions specific to the
Internet;
its ability to attract, train and retain qualified sales and other
personnel;
technical difficulties or service interruptions; and
the magnitude and timing of strategic pricing changes, marketing decisions
or acquisitions.
@plan's limited operating history and the emerging nature of its business
make prediction of future revenues difficult. @plan's expense levels are based,
in part, on its expectations with regard to future revenues, and to a large
extent its expenses are fixed, particularly in the short term. @plan cannot
assure you that it will be able to predict its future revenues accurately and it
may be unable to adjust spending in a timely manner to compensate for any
unexpected revenue shortfall. Accordingly, any significant shortfall in its
expectations could cause significant declines in its quarterly operating
results.
Due to all the foregoing factors, @plan's quarterly revenues and operating
results are difficult to forecast. @plan believes that its quarterly revenues,
expenses and operating results could vary significantly in the future, and that
period-to-period comparisons should not be relied upon as indicators of future
performance.
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@PLAN MAY EXPERIENCE CLIENT DISSATISFACTION OR BE EXPOSED TO LIABILITY FOR
SUPPLYING INACCURATE INFORMATION TO ITS CLIENTS.
@plan's data may contain inaccuracies as a result of data collection or
software errors, among other reasons. Its clients may become dissatisfied with
its systems, or @plan may face liability if it supplies inaccurate information.
Any client dissatisfaction with its data would hinder its ability to attract new
clients and retain existing clients. If @plan faces liability for supplying
inaccurate data, its business may suffer.
@PLAN'S REPUTATION AND THE ATTRACTIVENESS OF ITS SYSTEMS COULD BE IMPAIRED BY A
FAILURE OF ITS COMPUTING SYSTEMS OR A FAILURE OF THE COMPUTING SYSTEMS OF ITS
INTERNET SERVICE PROVIDER.
The performance of @plan's server and networking hardware and software
infrastructure is critical to its business, reputation and ability to attract
and retain clients. Any system failure that causes an interruption in service or
a decrease in responsiveness of its processing or data storage capabilities
could impair its reputation and the attractiveness of its products. @plan
entered into an agreement with UUNet for its Internet connectivity. Any
interruption in the service that UUNet provides, or any failure of UUNet to
handle higher volumes of Internet users, would harm @plan's business.
Despite precautions taken by @plan and its Internet service provider, the
occurrence of natural disasters or other unanticipated problems at its or their
facilities could result in interruption in the availability of @plan's systems
or significant damage to its equipment. Even though @plan has implemented
network security measures, its servers are vulnerable to computer viruses,
break-ins and similar disruptions from unauthorized tampering. The occurrence of
any of these events could result in interruptions, delays, the loss or
corruption of its data or cessations in the availability of its systems, which
could harm its business and reputation.
@PLAN'S SYSTEM CAPACITY CONSTRAINTS COULD RESULT IN CLIENT DISSATISFACTION OR A
LOSS OF CLIENTS.
@plan has in the past experienced system capacity constraints. An increase
in the number of @plan's clients, the addition of new products or spikes in
client demand, either unexpected or in connection with new data releases, could
strain the capacity of its computer systems in the future, which could lead to
slower response time or system failures. @plan's business could be harmed by
system failures or slowdowns that reduce the speed and responsiveness of its
data processing and diminish the experience for its clients. @plan faces risks
related to its ability to scale up to its expected client levels while
maintaining superior performance. @plan may need to purchase additional servers
to maintain adequate data processing speeds.
@PLAN FACES COMPETITION FROM MORE ESTABLISHED PROVIDERS OF INTERNET MARKET
RESEARCH TOOLS THAT COULD CAUSE A LOSS OF CLIENTS OR CAUSE IT TO REDUCE THE
PRICES IT CAN CHARGE TO ITS CLIENTS.
@plan's business, namely providing market research tools for Internet
advertisers, advertising agencies, Web publishers, online retailers and consumer
brand marketers, is new and rapidly evolving. Competition for clients is intense
and is expected to increase in the future as existing competitors develop new
solutions, potential competitors emerge and the industry consolidates. @plan
cannot assure you that it will be able to compete successfully or that
competitive pressures will not harm its business. @plan believes that its
ability to compete depends upon many factors both within and beyond its control,
including the following:
the timing and acceptance of new products and enhancements to existing
products developed either by @plan or its competitors;
its client service and support efforts;
its sales and marketing efforts; and
the ease of use, performance, price and reliability of products developed
either by @plan or its competitors.
Most of @plan's competitors have longer operating histories, greater name
recognition, larger client bases and significantly greater financial, technical
and marketing resources than it does. This may allow
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them to respond more quickly than @plan can to new or emerging technologies and
changes in client requirements. It may also allow them to devote greater
resources than @plan can to the development, promotion and sale of their
products and services. These competitors may also engage in more extensive
research and development, undertake more far-reaching marketing campaigns, adopt
more aggressive pricing policies and make more attractive offers to existing and
potential employees, strategic partners, advertisers and Web publishers. @plan
cannot assure you that its current and potential competitors will not develop
products or services that are of equal or superior quality to its products or
services or that achieve greater acceptance or that may be offered at lower
prices. In addition, current and potential competitors have established or may
establish cooperative relationships among themselves or with third parties to
increase the ability of their products or services to address the needs of
@plan's prospective customers. It is possible that new competitors may emerge
and rapidly acquire significant market share. Increased competition is likely to
result in price reductions, reduced gross margins and loss of market share, all
of which will harm @plan's business.
ANY FAILURE BY @PLAN TO PROTECT ITS INTELLECTUAL PROPERTY COULD HARM ITS
BUSINESS AND COMPETITIVE POSITION.
@plan's success and its competitive position are dependent on its internally
developed methods, technologies and trademarks which it generally protects
through a combination of copyright, trademark and trade secrecy laws,
confidentiality agreements with third parties and license agreements with
consultants, vendors and customers. Despite these protections, a third party
could, without authorization, copy or otherwise take information from its
database. @plan's agreements with employees, consultants and others who
participate in development activities could be breached. @plan may not have
adequate remedies for any breach, and its trade secrets may otherwise become
known or independently developed by competitors. @plan has filed applications
for several trademarks in the United States, one of which has been approved.
@plan cannot assure you that any of its other trademark applications will be
approved. Even if these applications are approved, the trademarks may be
successfully challenged by others or invalidated.
RISKS RELATED TO @PLAN'S INDUSTRY
@PLAN WILL LOSE CLIENTS OR FAIL TO ATTRACT NEW CLIENTS IF THE INTERNET DOES NOT
CONTINUE TO DEVELOP AS AN ADVERTISING MEDIUM.
@plan's future success depends on an increase in the use of the Internet as
an advertising medium. @plan would lose clients or fail to attract new clients
if the market for Internet advertising fails to develop or develops more slowly
than expected. The Internet advertising business is new and rapidly evolving,
and it cannot yet be compared with traditional advertising media to gauge its
effectiveness and value to advertisers. As a result, demand and market
acceptance for @plan's systems is uncertain. Many of its current or potential
clients have little or no experience using the Internet for advertising
purposes, and they have allocated only a limited portion of their advertising
budgets to Internet advertising. The adoption of Internet advertising,
particularly by those entities that have historically relied upon traditional
media for advertising, requires accepting a new way of conducting business,
exchanging information and advertising products and services. Clients may find
that Internet advertising is less effective for promoting their products and
services relative to traditional advertising media. In addition, most of @plan's
current and potential Web publisher clients have little or no experience in
generating revenues from the sale of advertising space on their Web sites.
THE INTERNET MARKET RESEARCH INDUSTRY IS NEW AND CHANGING QUICKLY AND @PLAN'S
SYSTEMS MAY NOT BE ACCEPTED BY ITS EXISTING AND FUTURE CLIENTS.
To date, no industry consensus has emerged as to what information tools will
be essential to buying and selling Internet advertising as well as to the
development of electronic commerce. @plan's existing and future clients may
challenge or refuse to accept the market research information that its systems
provide. @plan's clients may not be satisfied with its methodology for data
collection or may feel that its databases do not represent Internet users.
@plan's clients might turn to other current or future providers of market
research systems.
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THE FAILURE OF INDUSTRY INITIATIVES TO SUPPORT @PLAN'S METHODOLOGIES OR THEIR
ENDORSEMENT OF OTHER METHODOLOGIES MAY RESULT IN A DECLINE IN SALES OF
SUBSCRIPTIONS FOR @PLAN'S SYSTEMS.
Key industry organizations, including the Internet Advertising Bureau, the
Media Ratings Council, the Advertising Research Foundation and FAST Forward,
have begun initiatives focusing on standards for Internet market research and
audience measurement. To the extent that some or all of these trade groups do
not support @plan's methodologies or endorse other methodologies, @plan's
business and financial condition could be harmed.
TECHNOLOGICAL CHANGE MAY RENDER @PLAN'S SYSTEMS OBSOLETE.
The Internet, Internet advertising and electronic commerce businesses are
characterized by rapidly changing technologies, evolving industry standards,
frequent new product and service introductions, and changing client demands.
@plan's systems may be rendered obsolete by these developments. @plan's future
success depends on its ability to adapt to rapidly changing technologies, to
enhance its existing products and to develop and introduce a variety of new
products to address its clients' changing needs. @plan may experience
difficulties that could delay or prevent the successful design, development,
introduction or marketing of its products. In addition, its new products or
enhancements must meet the requirements of its current and prospective clients
and must achieve significant market acceptance. Delays in introducing new
products and enhancements may cause clients to forego purchases of its products
and purchase those of its competitors.
RISKS RELATED TO NETCREATIONS
In addition to the risks discussed above, if DoubleClick completes its
merger with NetCreations, holders of DoubleClick common stock will also be
subject to the specific risks relating to NetCreations, including risks relating
to its business model, strategy and the legal, regulatory and business
environment. For a detailed discussion of these risks, please see the risk
factors included in NetCreations' reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, which risk factors are
incorporated by reference into this proxy statement/prospectus.
FORWARD-LOOKING STATEMENTS IN THIS PROXY STATEMENT/PROSPECTUS
This proxy statement/prospectus and the documents incorporated by reference
into this proxy statement/prospectus contain forward-looking statements within
the 'safe harbor' provisions of the Private Securities Litigation Reform Act of
1995 with respect to DoubleClick's and @plan's financial conditions, results of
operations and businesses and the expected impact of the merger on DoubleClick
and @plan. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,'
'believes,' 'seeks,' 'estimates,' and similar expressions indicate
forward-looking statements. These forward-looking statements are not guarantees
of future performance and are subject to risks and uncertainties that could
cause actual results to differ materially from the results contemplated by the
forward-looking statements. In evaluating the merger, you should carefully
consider the discussion of risks and uncertainties in the immediately preceding
section entitled 'Risk Factors,' those set forth under 'The Merger -- Background
of the Merger,' 'The Merger -- @plan's Reasons for the Merger; Recommendation of
@plan's Board of Directors' and 'The Merger -- Opinion of @plan's Financial
Advisor,' and in the information incorporated by reference into this proxy
statement/prospectus and included elsewhere in this proxy statement/prospectus.
Accordingly, you should not place undue reliance on forward-looking
statements, which speak only as of the date of this proxy statement/prospectus,
or, in the case of documents incorporated by reference, the date of those
documents.
All subsequent written and oral forward-looking statements attributable to
DoubleClick or @plan or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements contained or referred
to in this section. Neither DoubleClick nor @plan assumes any obligation to
update any such forward-looking statements to reflect events or circumstances
after the date of this proxy statement/prospectus.
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THE SPECIAL SHAREHOLDERS' MEETING
GENERAL
We are furnishing this proxy statement/prospectus to holders of @plan common
stock in connection with the solicitation of proxies by @plan's board of
directors for use at @plan's special shareholders' meeting to be held on
[ ] [ ], 2001, and any adjournment or postponement of that meeting.
This proxy statement/prospectus is first being mailed to @plan shareholders
on or about [ ] [ ,] 2000. This proxy statement/prospectus is also
being furnished to @plan's shareholders as a prospectus in connection with the
possible issuance by DoubleClick of shares of DoubleClick common stock as
contemplated by the amended and restated merger agreement.
DATE, TIME AND PLACE
@plan's special shareholders' meeting will be held on [ ] [ ], 2001
at .m., local time, at .
MATTERS TO BE CONSIDERED AT THE SPECIAL SHAREHOLDERS' MEETING
At the @plan special shareholders' meeting and any adjournment or
postponement of the special shareholders' meeting, @plan shareholders will be
asked:
to consider and vote upon the approval of the amended and restated merger
agreement;
to grant @plan's board of directors discretionary authority to adjourn the
special shareholders' meeting to solicit additional votes for approval of
the amended and restated merger agreement; and
to transact such other business as may properly come before the special
shareholders' meeting.
RECORD DATE
@plan's board of directors has fixed the close of business on [ ]
[ ], 2000, as the record date for determination of @plan's shareholders
entitled to notice of and to vote at the special shareholders' meeting.
VOTING OF PROXIES
@plan requests that its shareholders complete, date and sign the
accompanying proxy and promptly return it in the accompanying envelope or
otherwise mail it to @plan. Brokers holding shares in 'street name' may vote the
shares only if the shareholder provides instructions on how to vote. Brokers
will provide instructions to beneficial owners on how to direct the broker to
vote the shares. All properly executed proxies that @plan receives prior to the
vote at the special shareholders' meeting, and that are not revoked, will be
voted in accordance with the instructions indicated on the proxies or, if no
direction is indicated, to approve the amended and restated merger agreement.
@plan's board of directors does not currently intend to bring any other business
before the special shareholders' meeting and @plan's board of directors is not
aware of any other matters to be brought before the special shareholders'
meeting. If other business properly comes before the special shareholders'
meeting, the proxies will be voted in accordance with the judgment of the
proxyholders.
A shareholder may revoke his or her proxy at any time prior to its use:
by delivering to the Secretary of @plan a signed notice of revocation or a
later-dated, signed proxy; or
by attending the special shareholders' meeting and voting in person.
Attendance at the special shareholders' meeting does not in itself
constitute the revocation of a proxy.
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VOTE REQUIRED
As of the close of business on [ ] [ ], 2000, there were [ ]
shares of @plan common stock outstanding and entitled to vote. The holders of a
majority of the outstanding shares of @plan common stock outstanding as of the
close of business on [ ] [ ], 2000 must approve the amended and
restated merger agreement. @plan shareholders have one vote per share of @plan
common stock owned on the record date.
As of [ ,] 2000, directors and executive officers of @plan and their
affiliates beneficially owned an aggregate of [ ] shares of @plan common
stock (exclusive of any shares issuable upon the exercise of options or
warrants) or approximately [ %] of the shares of @plan common stock outstanding
on such date. Pursuant to shareholder agreements in the form attached as
Appendix B (and shareholder letters in the form attached as Appendix C), @plan
shareholders have agreed to vote 5,509,100 shares of @plan common stock (or
approximately 48.6% of @plan's common stock outstanding as of November 27,
2000) for approval of the merger agreement. As of November 27, 2000, directors
and executive officers of DoubleClick did not own any shares of @plan common
stock. See 'The Merger -- Interests of Certain Persons in the Merger.'
QUORUM; ABSTENTIONS AND BROKER NON-VOTES
The required quorum for the transaction of business at the @plan special
shareholders' meeting is a majority of the shares of @plan common stock issued
and outstanding on the record date. Abstentions and broker non-votes each will
be included in determining the number of shares present at the meeting for the
purpose of determining the presence of a quorum. Because approval of the amended
and restated merger agreement requires the affirmative vote of a majority of the
outstanding shares of @plan common stock entitled to vote, abstentions and
broker non-votes will have the same effect as votes against approval of the
amended and restated merger agreement. In addition, the failure of an @plan
shareholder to return a proxy or otherwise vote will have the effect of a vote
against approval of the amended and restated merger agreement. Brokers holding
shares for beneficial owners cannot vote on the actions proposed in this proxy
statement/prospectus without the owners' specific instructions. Accordingly,
@plan shareholders are urged to return the enclosed proxy card marked to
indicate their vote.
SOLICITATION OF PROXIES AND EXPENSES
In addition to solicitation by mail, the directors, officers and employees
of @plan may solicit proxies from @plan's shareholders by telephone, facsimile
or in person. No additional compensation will be paid to directors, officers or
employees of @plan for any solicitations. Brokerage houses, nominees,
fiduciaries and other custodians will be requested to forward soliciting
materials to beneficial owners and will be reimbursed for their reasonable
expenses incurred in sending proxy materials to beneficial owners. The expenses
of soliciting proxies, including expenses related to the printing and mailing of
this proxy statement/prospectus, are being shared equally by DoubleClick and
@plan.
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THE MERGER
This section of the proxy statement/prospectus describes material aspects of
the proposed merger. While we believe that the description covers the material
terms of the merger and the related transactions, this summary may not contain
all of the information that is important to you. @plan shareholders should read
the entire amended and restated merger agreement and the other documents we
refer to carefully and in their entirety for a more complete understanding of
the merger.
BACKGROUND OF THE MERGER
In the fourth quarter of 1999, the board of directors of @plan began
discussing the effects of the lack of institutional interest in companies with a
market capitalization similar to @plan's, the lack of significant trading volume
in @plan's common stock, the limited number of investment banking firms that
provided research reports on @plan and the inability of significant shareholders
to sell all or a portion of their @plan holdings without having a negative
impact on @plan's trading values. The @plan board of directors believed that
each of these factors had a significant impact on the market price of @plan's
common stock. During the first half of 2000, the @plan board of directors
continued to discuss these factors and began to consider various strategic
alternatives to increase shareholder value. On June 15, 2000, @plan issued a
press release announcing that it had retained Veronis, Suhler as its investment
banker and financial advisor to advise the @plan board of directors regarding
possible strategic alternatives for @plan, including a possible sale of all or
part of @plan, to maximize shareholder value. The @plan board of directors
authorized Veronis, Suhler to solicit indications of interest from potential
strategic acquirers. Veronis, Suhler contacted 42 potential interested parties.
On June 23, 2000, Jennifer Haggerty, Director of Corporate Development at
DoubleClick, contacted Veronis, Suhler via e-mail, expressing interest in @plan
and requesting the Confidential Memorandum regarding @plan's business. Based on
preliminary indications of interest, Veronis, Suhler sent confidentiality
agreements to 14 potential acquirers, including DoubleClick.
On July 19, 2000, following review of the materials received from Veronis,
Suhler and following discussions with other members of senior management at
DoubleClick, Ms. Haggerty and Hal Greenberg, a Managing Director of Veronis,
Suhler, executed a confidentiality agreement regarding @plan. Veronis, Suhler
received signed confidentiality agreements from an additional 11 companies, and
sent materials to these 12 parties, including DoubleClick.
From June 29, 2000 to August 15, 2000, Mark Wright, @plan's Chairman and
Chief Executive Officer, held initial meetings with representatives of seven
potential bidders to provide them with more information about @plan's business.
Following these initial meetings, Veronis, Suhler requested preliminary
indications of interest from each of the interested parties with respect to each
purchaser's valuation of @plan, proposed structure of a transaction and source
of financing.
On August 3, 2000, Greg Ellis, DoubleClick's Vice President and General
Manager of Research, Ms. Haggerty and other representatives of DoubleClick met
with Mr. Wright and Nancy Lazaros, @plan's Senior Vice President, Chief
Financial Officer and Secretary, to discuss the operations and business
strategies of their respective companies and to make a preliminary assessment as
to the benefits of a business combination between DoubleClick and @plan.
On August 10, 2000, DoubleClick submitted a non-binding indication of
interest to Veronis, Suhler to acquire @plan. In addition to DoubleClick's
non-binding indication of interest, @plan received preliminary indications of
interest from three other interested parties. These four interested parties and
three others requested further due diligence with respect to @plan, and @plan
and its representatives established times for each of the interested parties and
their representatives to conduct a more intensive due diligence investigation.
On August 16, 2000, Ms. Haggerty discussed DoubleClick's non-binding
indication of interest with Mr. Greenberg. It was determined between the parties
that this non-binding indication of interest was sufficient to enable
DoubleClick to proceed with additional due diligence on @plan.
On August 17, 2000, Ms. Haggerty and Steven Cohn, an analyst in the
Corporate Development Group of DoubleClick, performed data room due diligence on
@plan at the offices of Veronis, Suhler.
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On August 18, 2000, Ms. Haggerty and Mr. Cohn had a telephone conversation
with Ms. Lazaros and Mr. Greenberg regarding financial and accounting due
diligence issues.
Following numerous meetings between the seven parties and @plan, including
meetings with @plan's senior management, three of the seven parties indicated to
Veronis, Suhler that they were not interested in pursuing a business combination
with @plan.
On August 22, 2000, Veronis, Suhler sent letters to the remaining interested
parties requesting that such parties submit a final written offer for the
acquisition of @plan by September 8, 2000.
On August 24, 2000, Mr. Cohn and other representatives of DoubleClick
visited @plan's corporate headquarters in Stamford, Connecticut. They met with
@plan management and discussed specific information regarding @plan's business.
On August 28, 2000, Mr. Ellis and other representatives of DoubleClick
visited @plan's headquarters. They met with @plan's management and continued the
discussion regarding @plan's business.
On August 31, 2000, Mr. Wright, Susan Russo, Executive Vice President of
@plan, Ms. Lazaros and representatives of Veronis, Suhler visited DoubleClick's
headquarters in New York City to meet with Kevin O'Connor, Chairman of the Board
of DoubleClick, Kevin Ryan, Chief Executive Officer of DoubleClick, Jeffrey
Epstein, Executive Vice President of DoubleClick, Wenda Millard, Executive Vice
President, General Manager/Network of DoubleClick, and Messrs. Ellis and Cohn,
to further discuss the benefits of a business combination. Also on August 31,
2000, Messrs. Epstein and Cohn, discussed with Mr. Greenberg of Veronis, Suhler
the structure of the bidding process.
On September 6, 2000, Mr. Ryan, Mr. Epstein, Ms. Haggerty and Mr. Cohn
presented the acquisition of @plan to the DoubleClick board of directors. At
this meeting, the DoubleClick board of directors authorized management to submit
a second non-binding indication of interest to acquire all of the outstanding
equity of @plan.
On September 7, 2000, representatives of DoubleClick and Brobeck, Phleger &
Harrison LLP, DoubleClick's legal counsel, conducted due diligence at @plan's
headquarters.
On September 8, 2000, DoubleClick submitted its second non-binding
indication of interest to Veronis, Suhler to acquire @plan.
By September 12, 2000, @plan had received responses from three of the four
parties contacted, including from DoubleClick. The non-binding indication of
interest from DoubleClick proposed merger consideration of $8.50 per share of
@plan common stock, of which up to 25% could be paid in cash at the election of
@plan's shareholders and the balance of which would be paid in DoubleClick
common stock. The other proposals were for a value less than that offered by
DoubleClick.
On September 13, 2000, the board of directors of @plan met to discuss the
proposals received by Veronis, Suhler. After discussions with @plan's financial
and legal advisors, the board of directors of @plan authorized Veronis, Suhler
to continue discussing the terms of the proposals with all the bidders in an
effort to increase the value to be received by @plan's shareholders. Also on
September 13, 2000, Ms. Haggerty reviewed the status of DoubleClick's second
non-binding indication of interest with Mr. Greenberg.
On September 14, 2000, Ms. Haggerty discussed with Mr. Greenberg the key
management issues relating to a potential transaction with @plan. Subsequently,
Ms. Haggerty received a letter from Mr. Greenberg providing detail on those key
management issues.
On September 15, 2000, DoubleClick and @plan entered into a mutual
confidentiality agreement. Later that day, Mr. Ryan, Stephen Collins, Chief
Financial Officer of DoubleClick, Elizabeth Wang, General Counsel of
DoubleClick, Mr. Ellis, Ms. Haggerty, Mr. Cohn and a representative from
Brobeck, Phleger & Harrison met with the board of directors of @plan and a
representative from Bass, Berry & Sims PLC, @plan's legal counsel, to discuss
DoubleClick's business and the strategic fit of DoubleClick and @plan. At this
meeting, the parties discussed, among other things, the purchase price for the
proposed transaction. @plan's board of directors indicated that it would support
a deal valued at $10 per share. After further negotiations, DoubleClick
increased its offer from $8.50 per share to $9.25 per share, with 20% payable in
cash and 80% payable in DoubleClick common stock, subject to satisfactory
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resolution of discussions with @plan's management concerning employment with
DoubleClick following the merger. DoubleClick also requested that @plan agree to
negotiate with DoubleClick on an exclusive basis. After DoubleClick's
presentation, the board of directors of @plan met and discussed DoubleClick's
revised proposal. The board of directors of @plan agreed to accept the $9.25 per
share price subject to satisfactory negotiation of the terms and conditions of
the merger agreement. In addition, @plan agreed to negotiate a business
combination with DoubleClick exclusively until 9:30 a.m., September 25, 2000,
unless DoubleClick terminated negotiations earlier.
Between September 15 and September 24, 2000, representatives of DoubleClick
and @plan continued their business, legal and financial due diligence
inspections and held numerous discussions with each other, and their respective
financial and legal advisors regarding various business, financial, operational
(including privacy issues) and technical issues involved in combining the
companies.
On September 19, 2000, Brobeck, Phleger & Harrison delivered an initial
draft of the original merger agreement to @plan. DoubleClick requested a collar
mechanism to limit the number of shares that DoubleClick could be required to
issue to @plan shareholders with respect to the stock portion of the merger
consideration. Representatives of @plan and representatives of DoubleClick
negotiated the terms of the original merger agreement, including price
protection with respect to the stock portion of the merger consideration, from
September 19, 2000 until September 24, 2000. Throughout this period, Mr. Wright
and @plan's legal and financial advisors informed members of the board of
directors of @plan of the status of these negotiations and consulted with them
on issues raised in these negotiations.
On September 22, 2000, Messrs. Ryan, Epstein, Ellis and Cohn and Mmes.
Haggerty and Wang discussed the proposed transaction at a meeting of
DoubleClick's board of directors. DoubleClick's board of directors engaged in a
full discussion of the terms of the proposed merger, including the strategic
benefits of the combination, financial and legal analyses, the terms and
conditions of the proposed original merger agreement and the analyses and
opinion of DoubleClick's management. Following the discussion, the DoubleClick
board of directors approved the terms of the original merger, including the
issuance of DoubleClick common stock in the original merger, and authorized
management to continue to negotiate the final terms of the original merger
agreement and related agreements, including any necessary amendments thereto on
terms, taken as a whole, that are no less favorable to DoubleClick.
DoubleClick indicated to @plan that it wanted to condition the closing of
the merger on the effectiveness of agreements with certain members of @plan's
senior management with respect to their affiliation with @plan following the
merger. In order to eliminate this as a condition to closing, the @plan board of
directors authorized Messrs. Wright and Spangenberg and Mmes. Russo and Lazaros
to engage in negotiations with DoubleClick with respect to these agreements, and
on September 24, 2000, each of them entered into agreements with DoubleClick, to
become effective upon consummation of the merger.
On September 24, 2000, the board of directors of @plan met to consider the
original merger agreement and transactions contemplated thereby. Members of
@plan senior management and representatives of Bass, Berry & Sims and Veronis,
Suhler made presentations to the board of directors of @plan and discussed their
views of various aspects of the merger proposed by the original merger
agreement. At the meeting, Veronis, Suhler presented its financial analysis of
the proposed transactions and delivered its opinion, which opinion has been
superceded and withdrawn in its entirety, to the board of directors of @plan to
the effect that as of such date the merger consideration provided for in the
original merger agreement was fair from a financial point of view to @plan.
After a full discussion, the board of directors of @plan, by the unanimous
vote of all directors, resolved that the merger contemplated by the original
merger agreement was fair to, and in the best interests of, @plan and its
shareholders, adopted the original merger agreement and resolved to recommend
that the shareholders of @plan vote to approve the original merger agreement.
The original merger agreement and related transaction documents were signed
by the parties on the evening of September 24, 2000. DoubleClick and @plan
jointly announced the original merger on the morning of September 25, 2000.
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<PAGE>
Following the announcement of the original merger, DoubleClick, @plan and
their respective advisors commenced preparation of the proxy
statement/prospectus. During this time period, technology stocks in general
suffered a broad decline, including stocks of companies whose revenues
are dependent on Internet advertising. During this period, the price of
DoubleClick common stock declined from $37.50 on September 22, 2000 to below
$23.87, the level at which, under the original merger agreement and assuming
that the price stayed below that level for purposes of valuing DoubleClick
common stock under the original merger agreement, DoubleClick could invoke the
collar mechanism and limit the amount of shares it would issue, thereby
triggering @plan's right to terminate the merger.
On October 25, 2000, Mr. Epstein, Mmes. Wang and Haggerty, together with
representatives of Brobeck, Phleger & Harrison, spoke via teleconference with
Messrs. Wright and Greenberg, and representatives of Bass, Berry & Sims. On that
call, Mr. Wright informed DoubleClick that, if DoubleClick invoked the collar
mechanism and the price of DoubleClick common stock was unchanged from current
levels, it would be likely that @plan would elect to terminate the original
merger agreement and the original merger. DoubleClick, @plan and their
respective advisors agreed that under the circumstances they would be willing to
consider a mutually acceptable alternative merger structure.
On October 31, 2000, the board of directors of @plan met to discuss what
actions had been taken since the October 25, 2000 teleconference and their
various options for proceeding. After discussion with @plan's financial and
legal advisors, the board of directors of @plan directed Mr. Greenberg to
contact representatives of DoubleClick and request that they present a revised
proposal by November 1, 2000. The board of directors of @plan also authorized
Mr. Greenberg to propose an offer of $8.50 in cash per share of @plan common
stock.
On October 31, 2000, Ms. Haggerty sent a letter to @plan describing terms of
an alternative transaction pursuant to which @plan shareholders would receive
per share merger consideration of 0.40 of a share of DoubleClick common stock
(valued in accordance with the original merger agreement), with minimum per
share consideration of $6.80 and maximum per share consideration of $8.00.
DoubleClick would have the right to elect to pay the consideration either in all
cash or in a combination of cash and shares of DoubleClick common stock, which
combination would be determined by DoubleClick. Under the proposed terms, in the
event that DoubleClick paid the merger consideration in a combination of
DoubleClick common stock and cash, the merger would be intended to qualify as a
tax-free reorganization.
On November 1, 2000, Mr. Greenberg, on behalf of @plan, sent a letter to
DoubleClick proposing an all cash transaction at $8.50 per share of @plan
common stock.
On November 2, 2000, Mr. Greenberg spoke with Ms. Haggerty and Mr. Epstein
and explained that @plan did not desire to proceed with an alternate transaction
in which the merger consideration fluctuated in a price range solely dependent
on the price of DoubleClick common stock, as outlined in Ms. Haggerty's letter
of October 31, 2000. DoubleClick then proposed an alternative transaction
pursuant to which @plan shareholders would receive merger consideration of $7.40
per share of @plan common stock with between 20% and 50% of the merger
consideration to be paid in cash and the remainder in shares of DoubleClick
common stock, or 100% to be paid in cash, at DoubleClick's election.
On November 6, 2000, the board of directors of @plan met to discuss the
offer of $7.40 per share of @plan common stock with between 20% and 50% of the
merger consideration to be paid in cash and the remainder in shares of
DoubleClick common stock, or 100% to be paid in cash, at DoubleClick's election.
After discussion with @plan's financial and legal advisors, the board of
directors of @plan authorized Mr. Greenberg to propose to DoubleClick a
transaction at $8.00 per share of @plan common stock with between 20% and 50% of
the merger consideration to be paid in cash and the remainder in shares of
DoubleClick common stock, or 100% to be paid in cash, at DoubleClick's election.
On November 8, 2000, Brobeck, Phleger & Harrison delivered an initial draft
of the amended and restated merger agreement and the shareholder letters to
@plan. Representatives of @plan and representatives of DoubleClick negotiated
the terms of the amended and restated merger agreement during the period from
November 8, 2000 through November 16, 2000, including the mechanism to value the
DoubleClick common stock payable in the merger and the time at which DoubleClick
would
39
<PAGE>
make the elections as to the specific composition of the merger consideration
contemplated by the amended and restated merger agreement.
On November 15, 2000, the board of directors of @plan met to consider
various terms of the proposed transaction. Mr. Wright provided the board with an
update of the amended and restated merger agreement negotiations. The board
authorized Mr. Greenberg to propose that the DoubleClick common stock be valued
using a 10-day trading average ending on the business day prior to the closing
date.
On November 17, 2000, the board of directors of @plan met to consider the
amended and restated merger agreement and the transactions contemplated thereby.
Members of @plan senior management and representatives of Bass, Berry & Sims and
Veronis, Suhler made presentations to the board of directors of @plan and
discussed their views and analyses of various aspects of the merger proposed in
the amended and restated merger agreement. Veronis, Suhler delivered its oral
opinion, subsequently confirmed in writing, to the board of directors of @plan
to the effect that as of such date the merger consideration to be received by
the @plan shareholders pursuant to the amended and restated merger agreement is
fair from a financial point of view to such holders. See ' -- Opinion of @plan's
Financial Advisor.' The board of directors of @plan reviewed drafts of the
amended and restated merger agreement and related agreements, and posed
questions to @plan's senior management and representatives of Veronis, Suhler
and Bass, Berry & Sims as to the terms of the transaction. The board of
directors of @plan further reviewed and considered, among other things, the
matters described under ' -- @plan's Reasons for the Merger; Recommendation of
@plan's Board of Directors.' After a full discussion, the board of directors of
@plan, by the unanimous vote of all directors, resolved that the merger
contemplated by the amended and restated merger agreement is fair to and in the
best interest of @plan and its shareholders, adopted the amended and restated
merger agreement and resolved to recommend that the shareholders of @plan vote
to approve the amended and restated merger agreement.
The amended and restated merger agreement and related transaction documents
were signed by the parties during the late afternoon of November 17, 2000, after
which DoubleClick and @plan jointly announced the amended and restated merger
agreement.
DOUBLECLICK'S REASONS FOR THE MERGER
DoubleClick's board of directors unanimously concluded that the merger was
fair to, and in the best interest of, DoubleClick and its stockholders.
The decision of the board of directors was based on several potential
benefits of the merger that it believes will contribute to DoubleClick's
success. These potential benefits include:
strategic benefits of @plan as a platform acquisition to build the
DoubleClick research business;
U.S. percentage of revenue in the global research market;
the potential for international expansion;
the value of the @plan brand;
the quality and loyalty of the @plan customer base;
unmet needs of the @plan (existing and potential) customer base;
competition;
the talent of @plan employees; and
the ability of DoubleClick to enhance @plan's products and services with
added features.
The DoubleClick board of directors reviewed a number of factors in
evaluating the merger, including, but not limited to, the following:
information concerning DoubleClick's and @plan's respective businesses,
prospects, strategic business plans, financial performance and condition,
results of operations, technology positions, research methodology,
management and competitive positions;
the due diligence investigation conducted by DoubleClick's management and
legal advisors;
40
<PAGE>
DoubleClick management's view of the positive results of combining the
operations and businesses of DoubleClick and @plan;
the current financial market conditions and historical stock market prices,
volatility and trading information;
the impact of the merger on DoubleClick's customers and employees; and
the expectation that the merger will be accounted for as a purchase.
During the course of its deliberations concerning the merger, the
DoubleClick board of directors also identified and considered a variety of
potentially negative factors that could materialize as a result of the merger,
including the following:
the risk that the potential benefits sought in the merger might not be
fully realized;
the possibility that the merger might not be completed;
risks related to retaining key @plan employees;
the effect of the public announcement of the merger on @plan's business,
including its employees and customers; and
the risks associated with obtaining the necessary approvals required to
complete the merger.
The DoubleClick board of directors concluded that these factors were
outweighed by the potential benefits to be gained by the merger. In view of the
wide variety of factors, both positive and negative, considered by the
DoubleClick board of directors, the DoubleClick directors did not find it
practical to, and did not, quantify or otherwise assign relative weights to the
specific factors discussed above.
DoubleClick's decision to enter into the amended and restated merger
agreement was based on a number of factors, including the fact that the overall
merger consideration payable by DoubleClick decreased by $1.25 per @plan share
assuming DoubleClick did not invoke the collar mechanic pursuant to the original
merger agreement, the elimination of one of @plan's termination rights and the
fact that DoubleClick could pay the merger consideration in a combination of
cash and DoubleClick common stock or all cash, at its election. DoubleClick did
not find it practical to, and did not, quantify or otherwise assign relative
weights to the specific factors considered in entering into the amended and
restated merger agreement.
@PLAN'S REASONS FOR THE MERGER; RECOMMENDATION OF @PLAN'S BOARD OF DIRECTORS
In reaching its determination that the amended and restated merger agreement
and the merger are fair to, and in the best interests of, @plan's shareholders,
and in recommending to the shareholders that they vote to approve the amended
and restated merger agreement, @plan's board of directors consulted with its
financial and legal advisors and considered the following factors:
The board's review of possible alternatives to the merger with DoubleClick,
including potential business combinations and strategic alliances with
other companies. Based on a variety of factors, including presentations by
Veronis, Suhler as to various valuation matters and the factors relating to
@plan's alternatives, the @plan board of directors concluded that none of
the alternatives considered was reasonably likely to provide greater value
to @plan shareholders than the merger with DoubleClick;
The fact that the merger consideration represents a premium over the
average closing prices per share of @plan common stock for the one, five
and ten trading days ending on November 16, 2000, the last trading day
before announcement of the signing of the amended and restated merger
agreement, and on September 22, 2000, the last trading day before the
announcement of the signing of the original merger agreement;
The fact that DoubleClick's market capitalization and the trading volume of
its common stock would provide @plan's shareholders with the liquidity
necessary to dispose of their DoubleClick common stock to be received in
the merger, if desired;
The fact that @plan issued a press release announcing that it had hired a
financial advisor and was considering various strategic alternatives; the
fact that Veronis, Suhler, on behalf of @plan,
41
<PAGE>
contacted a substantial number of potential bidders in a process designed
to elicit third-party proposals to acquire @plan; and the fact that the
participants in this process were afforded ample opportunity to submit
proposals to @plan;
The @plan board's belief that the merger consideration was fair relative to
its own assessment of @plan's current and expected future financial
condition, earnings, business opportunities, strategies and competitive
position;
The @plan board's belief that DoubleClick would provide the best strategic
fit for @plan, allowing @plan to expand and improve its product line and
providing DoubleClick with a foundation to build an independent research
division;
The fact that 50-80% of the merger consideration may be payable in
DoubleClick common stock, which would provide @plan shareholders the
potential for long-term appreciation in DoubleClick common stock, while at
the same time providing some immediate liquidity through the cash portion
of the merger consideration;
The financial presentation made by Veronis, Suhler, including its opinion
dated November 17, 2000, that as of that date, the consideration to be
received by @plan's shareholders in the merger was fair from a financial
point of view. See ' -- Opinion of @plan's Financial Advisor';
The reduction in stock trading prices of small-cap companies generally, and
@plan in particular, and the volatility in @plan's industry and the market
generally;
The negotiations subsequent to the execution of the original merger
agreement between representatives of @plan and DoubleClick, including the
fact that the negotiations resulted in an increase in the per share merger
consideration from 0.40 of a share of DoubleClick common stock (with
minimum per share consideration of $6.80 and maximum per share
consideration of $8.00) to $8.00;
The terms and conditions of the amended and restated merger agreement,
including provisions designed to ensure that the board of directors could
fulfill its fiduciary duties if presented with an acquisition proposal that
is more favorable to @plan's shareholders than the merger. In particular,
the @plan board of directors considered that the amended and restated
merger agreement: (i) permits the @plan board of directors, if required to
fulfill its fiduciary duties, to provide information to and engage in
negotiations with third parties who have made an unsolicited proposal to
acquire @plan, to modify or withdraw its recommendation of the merger and
to terminate the amended and restated merger agreement in order to pursue a
more favorable transaction and (ii) contains a termination fee and expense
reimbursement obligations that the @plan board of directors does not
believe will discourage competing third-party offers to acquire @plan;
The experience and success DoubleClick has had in structuring and
completing transactions similar to the merger and DoubleClick's financial
ability to complete the merger; and
In the event that DoubleClick elects to pay the merger consideration in a
combination of cash and DoubleClick common stock, the tax-free nature of
the transaction to @plan's shareholders with respect to the receipt of
DoubleClick common stock and the fact that the cash portion of the merger
consideration will generally receive capital gains tax treatment.
The @plan board believed that each of the above factors generally supported
its determination and recommendation. The @plan board did, however, consider the
following potentially negative factors in its deliberations concerning the
merger:
The fact that @plan's common shares closed at a trading price above $8.00
per share on 82 trading days in 2000 and 155 trading days in 1999,
including a high closing price of $20.875 per share on July 14, 1999;
The risk that the benefits sought to be achieved in the merger will not be
realized;
The fact that in the event that DoubleClick elects to pay the merger
consideration entirely in cash, the merger will be a taxable transaction to
@plan shareholders;
42
<PAGE>
The volatility of the price of DoubleClick common stock in the past and the
likelihood that it would continue, both before and after the completion of
the merger, to be volatile;
The risk that the merger might not be consummated;
The inherent challenges to combining the business of @plan with DoubleClick
and the attendant risk that management resources may be diverted from other
strategic opportunities and operational matters for the period of time
required to consummate the merger; and
The other risks connected with the merger and with the business of
DoubleClick described in 'Risk Factors'.
The preceding discussion is not intended to be exhaustive, but includes all
the material factors considered by the @plan board in making its determination.
In view of the variety of factors considered in connection with its evaluation
of the amended and restated merger agreement and the proposed merger, the @plan
board did not quantify or otherwise attempt to assign relative weights to the
specific factors it considered. In addition, individual members of the @plan
board may have given different weight to different factors and therefore may
have viewed some of the factors more positively or negatively than others.
Following the meeting of the @plan board of directors on November 17, 2000,
the @plan board unanimously adopted the amended and restated merger agreement
and approved the merger. Accordingly, the @plan board unanimously recommends
that @plan shareholders vote 'FOR' the approval of the amended and restated
merger agreement.
OPINION OF @PLAN'S FINANCIAL ADVISOR
Under an engagement letter dated May 17, 2000, @plan engaged Veronis, Suhler
to render an opinion as to the fairness of the merger consideration, from a
financial point of view, to holders of shares of @plan common stock.
On November 17, 2000 at a meeting of the @plan board of directors held to
evaluate the terms of the merger contemplated by the proposed amended and
restated merger agreement, Veronis, Suhler delivered to the @plan board its oral
opinion, subsequently confirmed in writing, that, as of November 17, 2000, and
based on the assumptions made, the matters considered and the limitations on the
review undertaken described in the opinion, the merger consideration was fair
from a financial point of view to holders of shares of @plan common stock. No
limitations were imposed by DoubleClick or the @plan board on Veronis, Suhler
with respect to the investigations made or procedures followed by it in
furnishing its opinion. The merger consideration was determined through
negotiations between the managements of @plan and DoubleClick. Although Veronis,
Suhler did assist the management of @plan in those negotiations, it was not
asked by, and did not recommend to @plan that any specific merger consideration
constituted the appropriate merger consideration for the merger. Veronis, Suhler
also assisted @plan's management in the negotiations leading to an agreement on
principal structural terms of the merger.
The full text of the Veronis, Suhler opinion, which sets forth, among other
things, assumptions made, matters considered and limitations on the review
undertaken, is attached as Appendix D and is incorporated into this proxy
statement/prospectus by reference. Veronis, Suhler prepared its opinion for the
benefit and use of the @plan board of directors in its consideration of the
merger; the opinion does not constitute a recommendation to @plan shareholders
as to how they should vote or take any other action with respect to the merger.
Veronis, Suhler has consented to the use of its opinion in this proxy
statement/prospectus. We urge @plan shareholders to read the opinion in its
entirety.
THE VERONIS, SUHLER OPINION DATED NOVEMBER 17, 2000 SUPERCEDES IN ITS
ENTIRETY ITS PRIOR OPINION DATED SEPTEMBER 24, 2000 RENDERED IN RESPECT OF THE
MERGER UNDER THE TERMS CONTEMPLATED BY THE ORIGINAL MERGER AGREEMENT. SUCH PRIOR
OPINION HAS BEEN WITHDRAWN AND MAY NOT BE USED OR RELIED UPON BY ANY PERSON FOR
ANY PURPOSE.
The Veronis, Suhler opinion does not address:
the relative merits of the merger and the other business strategies that
the @plan board of directors has considered or may be considering; or
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<PAGE>
the underlying business decision of the @plan board of directors to proceed
with the merger.
The summary of the Veronis, Suhler opinion set forth in this proxy
statement/prospectus is qualified in its entirety by reference to the full text
of the opinion.
In preparing their opinion, Veronis, Suhler, among other things:
reviewed publicly available financial statements and other business and
financial information of @plan and DoubleClick;
reviewed internal financial statements and other financial and operating
data about @plan prepared by the management of @plan;
reviewed financial forecasts and other forward-looking financial
information relating to @plan and DoubleClick prepared by the management of
@plan and by external research analysts for DoubleClick;
held discussions with the managements of @plan and DoubleClick concerning
the businesses, past and current operations, financial condition and future
prospects of @plan and DoubleClick, independently and combined, cost
savings and other synergies that are expected to result from the merger,
and @plan and DoubleClick management's views of the strategic rationale for
the merger;
reviewed the financial terms and conditions in the amended and restated
merger agreement;
reviewed the stock price and trading history of @plan and DoubleClick;
compared the financial performance of @plan and DoubleClick and the prices
and trading activity of @plan common stock and DoubleClick common stock
with that of other publicly traded companies comparable with @plan and
DoubleClick;
compared the financial terms of the merger with the financial terms, to the
extent publicly available, of other transactions it deemed relevant;
prepared a discounted cash flow analysis of @plan;
participated in discussions and negotiations among representatives of @plan
and DoubleClick and their financial and legal advisors; and
made other studies and inquiries, and reviewed other data, as it deemed
relevant.
In its review and analysis, and in arriving at its opinion, Veronis, Suhler
assumed and relied upon the accuracy and completeness of all of the financial
and other information provided to it (including information furnished to it
orally or otherwise discussed with it by management of @plan and DoubleClick) or
publicly available and neither attempted to verify, nor assumed responsibility
for verifying, any of this information.
With respect to the financial forecasts and projections (and the underlying
assumptions and bases, including synergies related to the merger) for @plan that
Veronis, Suhler reviewed, upon the advice of the management of @plan, Veronis,
Suhler assumed that these forecasts and projections:
had been reasonably prepared in good faith on the basis of reasonable
assumptions;
reflected the best available estimates and judgments as to the future
financial condition and performance of @plan; and
will be realized in the amounts and in the time periods estimated.
In addition, Veronis, Suhler assumed that:
the merger will be consummated upon the terms set forth in the amended and
restated merger agreement without material alteration, including, among
other things, that the merger will be accounted for as a purchase in
accordance with U.S. generally accepted accounting principles consistently
applied;
in the event that DoubleClick elects to pay the merger consideration in a
combination of cash and DoubleClick common stock, the merger will be
treated as a reorganization under Section 368(a) of the Internal Revenue
Code of 1986, as amended; and
44
<PAGE>
the historical financial statements of @plan and DoubleClick reviewed by it
had been prepared and fairly presented in accordance with U.S. generally
accepted accounting principles consistently applied.
Veronis, Suhler relied as to all legal matters relevant to rendering its
opinion on the advice of its counsel.
Although developments following the date of the Veronis, Suhler opinion may
affect the opinion, Veronis, Suhler assumed no obligation to update, revise or
reaffirm its opinion. The Veronis, Suhler opinion is necessarily based upon
market, economic and other conditions as in effect on, and information made
available to Veronis, Suhler as of, the date of the Veronis, Suhler opinion. It
should be understood that subsequent developments may affect the conclusion
expressed in the Veronis, Suhler opinion and that Veronis, Suhler disclaims any
undertaking or obligation to advise any person of any change in any matter
affecting the opinion which may come or be brought to its attention after the
date of the opinion. The Veronis, Suhler opinion is limited to the fairness,
from a financial point of view and as of the date thereof, of the merger
consideration to shareholders of @plan (other than DoubleClick or any of its
affiliates). Veronis, Suhler does not express any opinion as to:
the value of any employee agreement or other arrangement entered into in
connection with the merger;
any tax or other consequences that might result from the merger; or
what the value of DoubleClick common stock will be when issued to @plan's
shareholders in the merger or the price at which the shares of DoubleClick
common stock that are issued in the merger may be traded in the future.
The following is a summary of the material financial analyses performed by
Veronis, Suhler in connection with rendering its opinion. The summary of the
financial analyses is not a complete description of all of the analyses
performed by Veronis, Suhler. Some of the information in this section is
presented in a tabular form. IN ORDER TO BETTER UNDERSTAND THE FINANCIAL
ANALYSES PERFORMED BY VERONIS, SUHLER, THESE TABLES MUST BE READ TOGETHER WITH
THE TEXT OF EACH SUMMARY. THE VERONIS, SUHLER OPINION IS BASED UPON THE TOTALITY
OF THE VARIOUS ANALYSES WHICH IT PERFORMED, AND VERONIS, SUHLER DID NOT ASSIGN
ANY RELATIVE IMPORTANCE TO ANY PARTICULAR FINANCIAL ANALYSIS.
PREMIUM ANALYSIS
Veronis, Suhler calculated the implied premium being paid in the merger
based on the ratio of the $8.00 per share in value offered by DoubleClick to the
market price of @plan's common stock during selected periods ending on
November 17, 2000. Veronis, Suhler then compared this premium with premiums paid
in comparable transactions as well as in transactions throughout all industries.
The results are shown below:
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<PAGE>
ADVERTISING AND MARKET RESEARCH TRANSACTIONS
<TABLE>
<CAPTION>
1 DAY 5 DAY 30 DAY
ACQUIRER TARGET PREMIUM PREMIUM PREMIUM
-------- ------ ------- ------- -------
<S> <C> <C> <C> <C>
Media Metrix, Inc. Jupiter Communications, Inc. 16.2% 11.9% 16.8%
DoubleClick Inc. NetGravity, Inc. - 4.3% - 1.4% 26.3%
DoubleClick Inc. Abacus Direct Corporation 25.1% 23.3% 20.8%
DoubleClick Inc. NetCreations, Inc. 6.8% 16.0% - 21.7%
Mean* 16.0% 17.1% 21.3%
Median* 16.2% 16.0% 20.8%
----------------------------
*Excludes negative premiums
</TABLE>
ALL INDUSTRIES (TRANSACTIONS BETWEEN $100 MILLION AND $499.9 MILLION)
<TABLE>
<CAPTION>
5 DAY TRANSACTIONS
PREMIUM* IN SAMPLE
--------- ---------
<S> <C> <C> <C>
January-September 2000 40.9% 134
1999 33.2% 255
1998 28.4% 184
----------------------------
*Excludes negative premiums
</TABLE>
<TABLE>
<CAPTION>
1 DAY 5 DAY 30 DAY
PREMIUM PREMIUM PREMIUM
------- ------- -------
<S> <C> <C> <C>
Average closing share price of @plan $5.31 $5.46 $5.54
Implied merger premium for @plan 50.6% 46.5% 44.3%
--------------------------------------------------------------------------------------
Sources: Mergerstat, Lexis-Nexis and Bloomberg
</TABLE>
The analysis of these premium calculations indicate that @plan's one,
five and 30-day premiums are above advertising and market research selected
comparable transaction premiums and within the defined premium range for all
industry transactions between $100.0 million and $499.9 million. Veronis, Suhler
noted in its analysis of the implied premium being paid in the merger that the
one, five and 30-day premiums all were based on the market prices of @plan's
common stock following the announcement of the original merger agreement on
September 25, 2000, the terms of which likely affected the market prices for
@plan common stock during those periods.
COMPARABLE COMPANIES ANALYSIS
Using publicly available information, Veronis, Suhler analyzed, among other
things, the equity value and trading multiples of selected publicly traded
companies that have similar business and operating profiles to @plan, including:
<TABLE>
<S> <C>
Jupiter Media Metrix, Inc. DoubleClick Inc.
NetRatings, Inc. WebTrends Corporation
Engage, Inc.
</TABLE>
Multiples compared by Veronis, Suhler included enterprise value (equity
value plus debt, less cash) to estimated revenues for calendar year 2000. All
multiples were based on closing stock prices as of November 17, 2000. Such
analysis indicated a range of revenue multiples from 1.3x to 21.8x with a mean
of 9.1x and a trim mean of 7.5x. The trim mean is calculated by removing the
highest and lowest values and then computing the average of the remaining
values.
It is important to highlight that the enterprise value of @plan is small in
comparison to the public comparables chosen for the purposes of this analysis.
All of the comparables in this analysis possess enterprise values significantly
higher than @plan, with Engage and DoubleClick maintaining much higher
enterprise values. Historically, there is a positive correlation between larger
enterprise values and higher revenue multiples.
Applying the range of revenue multiples to the projected revenue of @plan
results in a composite valuation based on public market data.
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<PAGE>
The range of fair values for 100% of @plan implied by public market
comparables is approximately $6.00 per share to $10.00 per share.
SELECTED TRANSACTION ANALYSIS
Veronis, Suhler analyzed the implied transaction value multiples paid or
proposed to be paid in selected acquisition transactions in the online
advertising and market research industries. The selected transactions all took
place approximately within the past year prior to the proposed transaction and
have transaction values of $550 million or less. In analyzing these selected
transactions, Veronis, Suhler compared the equity value in the transactions as a
multiple of revenue for the preceding twelve months (LTM). The following table
presents the selected transactions analyzed by Veronis, Suhler:
COMPARABLE TRANSACTIONS
<TABLE>
<CAPTION>
DATE ACQUIRER TARGET
---- -------- ------
<S> <C> <C>
10/02/00 DoubleClick NetCreations, Inc.
06/27/00 Media Metrix Jupiter Communications
03/23/00 IPSOS Angus Reid
03/14/00 Taylor Nelson Sofres plc Competitive Media Reporting
12/22/99 GFK AG Custom Research Inc.
12/22/99 WPP Group Intelliquest Information
11/09/99 Cordiant Communications Healthworld Corp.
11/09/99 Interpublic Group of Companies Brands Hatch Leisure Plc.
10/08/99 Media Metrix Inc AdRelevance
10/01/99 Omnicom Group MARC Inc.
07/13/99 DoubleClick NetGravity, Inc.
</TABLE>
The analysis of these selected transactions indicated that aggregate
consideration as a multiple of LTM revenues ranged from a low of 0.9x to a high
of 36.0x with a mean of 6.0x and a trim mean of 3.3x. Based on transactions
from the past calendar year, with values of $550 million and below, Veronis,
Suhler has determined the appropriate multiple range of 2.0x to 6.0x. Using
this range as a basis, the range of share price values for 100% of @plan,
employing @plan's trailing revenue figure of $10.4 million and comparable
transaction multiples, is approximately $2.00 per share to $5.00 per share.
No company, business or transaction compared in the comparable companies
analysis or selected transaction analysis is identical to the proposed
transaction between @plan and DoubleClick. Accordingly, an analysis of the
results of the foregoing is not entirely mathematical; rather it involves
complex considerations and judgments concerning differences in financial and
operating characteristics and other factors that could affect the acquisition,
public trading and other values of the comparable companies, selected
transactions or the business segment, company or transactions to which they are
being compared.
DISCOUNTED CASH FLOW ANALYSIS
Veronis, Suhler performed a discounted cash flow analysis of the cash flows
of @plan for calendar years 2001 through 2004 using projections produced by
@plan's management. Veronis, Suhler first discounted the projected, free cash
flows through December 31, 2004 using discount rates ranging from 28.3% to
31.3%. The discount rate range is based upon a weighted average cost of capital
calculation of 30.3%. @plan's free cash flows were calculated as the after-tax
operating earnings of @plan adjusted to add back non-cash expenses and deduct
uses of cash not reflected in the income statement. The range of discount rates
used reflect Veronis, Suhler's judgment as to the approximate weighted average
cost of capital for @plan. Veronis, Suhler then added to the present value of
the cash flows the terminal value of @plan at December 31, 2004, discounted back
at the same discount rate to represent a present value. The terminal value was
computed by multiplying the projected revenue for @plan in calendar year 2004 by
terminal multiples ranging from 2.5x to 4.5x. The range of terminal multiples
selected reflect Veronis,
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Suhler's judgment as to an appropriate range of multiples at the end of the
reference period, based upon its review of trading multiples for comparable
companies.
By taking into account sensitivities through changes in the revenue multiple
applied to cash flow for determining the terminal value by increments of 0.5x
revenue on either side of the base case, the range of fair values implied by
this would be approximately $98.0 million to $127.3 million. This range implies
a share price of between $7.00 per share and $10.00 per share.
OTHER FACTORS AND COMPARATIVE ANALYSES
In rendering its opinion, Veronis, Suhler considered other factors and
conducted other comparative analyses, including, among other things, a review of
the history of trading prices and volume for DoubleClick common stock and @plan
common stock for the period from September 24, 1999 to November 17, 2000.
While the foregoing summary describes the analyses and factors that Veronis,
Suhler deemed material in its presentation to the @plan board of directors, it
is not a comprehensive description of all analyses and factors considered by
Veronis, Suhler. The preparation of a fairness opinion is a complex process that
involves various determinations as to the most appropriate and relevant methods
of financial analysis and the application of these methods to the particular
circumstances and, therefore, this opinion is not readily susceptible to summary
description. Veronis, Suhler believes that its analyses must be considered as a
whole and that selecting portions of its analyses and of the factors considered
by it, without considering all analyses and factors, would create an incomplete
view of the evaluation process underlying the Veronis, Suhler opinion. Several
analytical methodologies were employed and no one method of analysis should be
regarded as critical to the overall conclusion reached by Veronis, Suhler. Each
analytical technique has inherent strengths and weaknesses, and the nature of
the available information may further affect the value of particular techniques.
The conclusions reached by Veronis, Suhler are based on all analyses and factors
taken as a whole and also on application of Veronis, Suhler's own experience and
judgment. These conclusions may involve significant elements of subjective
judgment and qualitative analysis. Veronis, Suhler therefore has given no
opinion as to the value or merit standing alone of any one or more parts of the
analysis it performed. In performing its analyses, Veronis, Suhler considered
general economic, market and financial conditions and other matters, many of
which are beyond the control of @plan and DoubleClick. The analyses performed by
Veronis, Suhler are not necessarily indicative of actual values or future
results, which may be significantly more or less favorable than those suggested
by these analyses. Accordingly, analyses relating to the value of a business do
not purport to be appraisals or to reflect the prices at which the business
actually may be purchased. Furthermore, no opinion is being expressed as to the
prices at which shares of DoubleClick common stock or @plan common stock may be
traded at any future time.
The engagement letter between Veronis, Suhler and @plan provides that, for
its services, Veronis, Suhler is entitled to receive a transaction fee equal to
3.75% of the first $10.0 million of aggregate transaction value and 1.0% of each
incremental $1.0 million of aggregate transaction value payable upon completion
of the merger. @plan has also agreed to reimburse Veronis, Suhler for its
out-of-pocket expenses, including legal fees, and to indemnify and hold harmless
Veronis, Suhler and its affiliates and any director, employee or agent of
Veronis, Suhler or any of its affiliates, or any person controlling Veronis,
Suhler or its affiliates for losses, claims, damages, expenses and liabilities
relating to or arising out of services provided by Veronis, Suhler as financial
advisor to @plan. The terms of the fee arrangement with Veronis, Suhler, which
@plan and Veronis, Suhler believe are customary in transactions of this nature,
were negotiated at arm's length between @plan and Veronis, Suhler, and the @plan
board was aware of these fee arrangements, including the fact that a significant
portion of the fees payable to Veronis, Suhler is contingent upon completion of
the merger.
Veronis, Suhler was retained based on Veronis, Suhler's experience as a
financial advisor in connection with mergers and acquisitions and in securities
valuations generally, as well as Veronis, Suhler's familiarity with @plan.
Veronis, Suhler is an internationally recognized investment banking firm. As
part of its investment banking business, Veronis, Suhler is frequently engaged
in the valuation of businesses and their
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securities in connection with mergers and acquisitions, negotiated
underwritings, secondary distributions of securities, private placements and
other purposes.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendation of the @plan board, @plan shareholders
should be aware that certain officers and directors of @plan have interests in
the merger that differ from, or are in addition to, those of @plan shareholders
generally. The @plan board was aware of these potential conflicts and considered
them.
As of , 2000, options to purchase a total of shares of @plan
common stock, at exercise prices ranging from $ to $ per share were
held by an aggregate of @plan directors and officers. Assuming the merger
occurs on [ , 2001], options held by these directors and officers to
purchase shares of @plan common stock, at exercise prices ranging from
$ to $ per share, will automatically vest in connection with the
merger.
Upon completion of the merger, the vesting under stock options held by
certain of the officers and a director of @plan listed below will accelerate as
follows:
<TABLE>
<CAPTION>
NAME OPTIONS ACCELERATED
---- -------------------
<S> <C>
Mark K. Wright............................. 43,333
Karl A. Spangenberg........................ 40,000
Susan C. Russo............................. 36,667
Nancy A. Lazaros........................... 36,667
</TABLE>
DoubleClick has entered into employment agreements with Nancy Lazaros,
@plan's Senior Vice President, Chief Financial Officer and Secretary, and Susan
Russo, @plan's Executive Vice President. In addition, Mark K. Wright, @plan's
Chairman and Chief Executive Officer, has entered into a consulting agreement
with DoubleClick and Karl A. Spangenberg, @plan's President and Chief Operating
Officer, has entered into a severance agreement with DoubleClick and @plan. None
of these agreements will become effective until the consummation of the merger.
Neither the consulting agreement with Mr. Wright nor the severance agreement
with Mr. Spangenberg affect the severance arrangements each currently has with
@plan pursuant to which, Mr. Wright will receive $540,000 at the closing and Mr.
Spangenberg will receive $467,500 at the closing (or within a reasonable period
of time after the closing). Further, the employment agreements with Mmes.
Lazaros and Russo provide for severance payments of up to $249,750 and $297,000,
respectively. See 'The Amended and Restated Merger Agreement and Related
Agreements -- Related Agreements.'
Because the number of shares of DoubleClick common stock outstanding is
larger than the number of shares of @plan common stock outstanding, affiliates
of @plan, including its officers and directors, may be allowed to sell or
transfer a greater number of shares in a single transaction than would be
possible prior to the merger pursuant to the volume restrictions of Rule 144 of
the Securities Act.
The amended and restated merger agreement provides that, from and after the
effective time, DoubleClick will, and DoubleClick will cause @plan to, indemnify
each person who is or was a director or officer of @plan or any of its
subsidiaries, at or at any time prior to, the effective time of the merger
against losses incurred as a result of actions or omissions (or alleged actions
or omissions) occurring on or prior to the effective time of the merger. In
addition, the amended and restated merger agreement provides that for a period
of three years after the effective time, DoubleClick will maintain directors'
and officers' liability insurance covering persons who are covered by @plan's
directors' and officers' insurance policy, and will not modify Atlas Acquisition
Corp.'s current Certificate of Incorporation, bylaws and contractual
arrangements with respect to indemnification of directors, officers, employees
or agents of @plan for a period of six years after the effective time. See 'The
Amended and Restated Merger Agreement and Related Agreements -- Director and
Officer Indemnification and Insurance.'
APPLICABLE WAITING PERIODS AND REGULATORY APPROVALS
The merger is subject to U.S. antitrust laws. We have made the required
filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with the
Department of Justice and the Federal
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Trade Commission. On November 8, 2000, the federal government granted early
termination of the applicable waiting period. The Department of Justice and the
Federal Trade Commission, as well as a state antitrust authority or private
person, may challenge the merger at any time before or after it is completed.
Neither @plan nor DoubleClick is aware of any other material governmental or
regulatory approval required for completion of the merger, other than compliance
with applicable corporate laws of Delaware and Tennessee.
FEDERAL INCOME TAX CONSIDERATIONS
IF DOUBLECLICK ELECTS TO PAY THE MERGER CONSIDERATION ENTIRELY IN CASH.
In the event that DoubleClick elects to pay the merger consideration
entirely in cash, the exchange by the @plan shareholders of their @plan common
stock for cash will be a taxable exchange for federal income tax purposes. As
such, each @plan shareholder will recognize gain or loss measured by the
difference between such shareholder's adjusted tax basis in each share of @plan
stock exchanged and the cash received therefor. Assuming that the @plan
shareholder held the @plan stock as a capital asset, the gain or loss recognized
by the @plan shareholder will be capital gain or loss. If the @plan shareholder
held the @plan stock for more than one year, any capital gain or loss recognized
will be a long-term gain or loss.
IF DOUBLECLICK ELECTS TO PAY THE MERGER CONSIDERATION IN A COMBINATION OF CASH
AND DOUBLECLICK COMMON STOCK.
The following discussion describes the material federal income tax
considerations relevant to the exchange of shares of @plan common stock for
DoubleClick common stock that are generally applicable to holders of @plan
common stock in the event that DoubleClick elects to pay the merger
consideration in a combination of cash and DoubleClick common stock pursuant to
the amended and restated merger agreement. This discussion is based on currently
existing provisions of the Internal Revenue Code, existing and proposed United
States Treasury Regulations thereunder and current administrative rulings and
court decisions, all of which are subject to change. Any such change, which may
or may not be retroactive, could alter the tax consequences to @plan
shareholders as described herein.
@plan shareholders should be aware that this discussion does not deal with
all federal income tax considerations that may be relevant to particular @plan
shareholders in light of their particular circumstances, such as shareholders
who:
are financial institutions, dealers in securities, tax-exempt
organizations, or insurance companies;
are subject to the alternative minimum tax provisions of the Internal
Revenue Code;
are foreign persons;
do not hold their @plan common stock as capital assets;
acquired their shares in connection with stock option or stock purchase
plans or in other compensatory transactions; or
acquired their shares as part of an integrated investment such as a hedge,
straddle or other risk reduction transaction.
In addition, the following discussion does not address the tax consequences
of the merger under foreign, state or local tax laws, the tax consequences of
transactions effectuated prior or subsequent to, or concurrently with, the
merger (whether or not any such transactions are undertaken in connection with
the merger), including any transaction in which shares of @plan common stock are
acquired or shares of DoubleClick common stock are disposed of, or the tax
consequences of the assumption by DoubleClick of @plan stock options or warrants
or the tax consequences of the receipt of rights to acquire DoubleClick common
stock. ACCORDINGLY, @PLAN SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGER, INCLUDING
THE APPLICABLE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.
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In the event DoubleClick elects to pay the merger consideration in a
combination of cash and DoubleClick common stock, it will be a condition to the
obligation of @plan to consummate the merger that the law firm of Bass, Berry &
Sims PLC deliver to @plan an opinion to the effect that the merger will
constitute a reorganization under Section 368(a) of the Internal Revenue Code.
This opinion will be rendered on the basis of facts, representations and
assumptions set forth or referred to in the opinion. In rendering this opinion,
Bass, Berry & Sims PLC will require and rely upon factual representations
contained in certificates of officers of @plan and DoubleClick. This opinion
will neither bind the IRS or the courts, nor preclude the IRS or a court from
adopting a contrary position. No ruling has been, or will be, sought from the
IRS as to the United States federal income tax consequences of the merger. This
condition shall be deemed satisfied if @plan is unable to obtain such an opinion
and DoubleClick's counsel delivers an opinion to @plan to the same effect. This
condition will not be waived without a resolicitation of consent by the
shareholders of @plan.
In addition, the tax opinion will assume and will be conditioned upon the
following:
the truth and accuracy of the statements, covenants, representations and
warranties contained in the amended and restated merger agreement, in the
tax representations received from DoubleClick, Atlas Acquisition Corp., and
@plan and in all other instruments and documents related to the formation
and operation of DoubleClick, Atlas Acquisition Corp., and @plan examined
by and relied upon by Bass, Berry & Sims PLC in connection with their
opinion;
that original documents submitted to counsel are authentic, documents
submitted to counsel as copies conform to the original documents, and that
those documents have been or will be by the effective time duly and validly
executed and delivered;
that all covenants contained in the amended and restated merger agreement
and the tax representations received from DoubleClick, Atlas Acquisition
Corp., and @plan are performed without waiver or breach of any material
provision;
that the merger will be effected under applicable state law; and
that any representation or statement made 'to the best of knowledge' or
similarly qualified is correct without being qualified.
Assuming the merger qualifies as a reorganization under Section 368(a) of
the Internal Revenue Code, Bass, Berry & Sims PLC is of the opinion that the
merger will result in the following federal income tax consequences to @plan
shareholders:
A holder of @plan common stock will recognize gain but not loss equal to
the lesser of:
the excess, if any, of the amount realized (i.e., the fair market value
of the DoubleClick common stock plus the amount of cash received) over
the holder's tax basis in the @plan common stock; or
the amount of cash received (excluding cash received in lieu of
fractional shares of DoubleClick common stock) in the merger.
A holder of @plan stock who receives cash in lieu of a fractional share of
DoubleClick common stock will be treated as having received the fractional
share in the merger and having it redeemed by DoubleClick. A shareholder
who holds his or her @plan common stock as a capital asset at the time of
the merger generally will recognize capital gain or loss from the sale in
an amount equal to the difference between the amount of cash received and
the holder's tax basis allocable to the fractional share;
The aggregate tax basis of the DoubleClick common stock received in the
merger by an @plan shareholder will be the same as the aggregate tax basis
of the @plan common stock surrendered in exchange for that DoubleClick
common stock, reduced by the cash received (other than cash received in
lieu of a fractional share) and by any tax basis allocable to any
fractional share interest for which cash is received and increased by the
amount of realized gain (other than gain realized with respect to any
fractional share);
The holding period of the DoubleClick common stock received in the merger
by an @plan shareholder will include the period during which the
shareholder held the @plan common stock
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surrendered in exchange for that DoubleClick common stock, so long as the
@plan common stock is held as a capital asset by that stockholder at the
time of the merger; and
None of DoubleClick, Atlas Acquisition Corp. or @plan will recognize gain
or loss solely as a result of the merger.
Any gain recognized by an @plan shareholder will generally constitute
capital gain if that stockholder held his or her @plan common stock as a capital
asset at the time the merger becomes effective, and any capital gain will be a
long-term capital gain if the holding period for those shares was greater than
one year at the time the merger becomes effective. In the case of an individual,
any long-term capital gain will be subject to a maximum federal income tax rate
of 20%.
A successful IRS challenge to the reorganization status of the merger would
result in @plan shareholders recognizing taxable gain or loss with respect to
each share of @plan common stock surrendered equal to the difference between
each shareholder's basis in such share and the fair market value, as of the
effective time of the merger, of the DoubleClick common stock and cash received
in exchange therefor. In such event, a shareholder's aggregate basis in the
DoubleClick common stock so received would equal its fair market value as of the
date of completion of the merger, and the shareholder's holding period for such
stock would begin the day after the merger.
There are other tax-related issues that you should be aware of such as:
Reporting Requirements. Each @plan shareholder that receives DoubleClick
common stock in the merger will be required to file a statement with his or
her federal income tax return providing his or her basis in the @plan stock
surrendered and the fair market value of the DoubleClick common stock and
any cash received in the merger, and to retain permanent records of these
facts relating to the merger.
Backup Withholding. Unless an exemption applies under applicable law and
regulations, the exchange agent is required to withhold, and will withhold,
31% of any cash payments to an @plan shareholder in the merger unless the
shareholder provides the appropriate form as described below. Each @plan
shareholder should complete and sign the Substitute Form W-9 included as
part of the letter of transmittal to be sent to each @plan shareholder, so
as to provide the information, including the shareholder's taxpayer
identification number, and certification necessary to avoid backup
withholding, unless an applicable exemption exists and is proved in a
manner satisfactory to DoubleClick and the exchange agent.
ACCOUNTING TREATMENT
DoubleClick will account for the merger under the purchase method of
accounting, which means that DoubleClick will allocate the purchase price to the
fair value of net tangible assets acquired and to intangible assets, which
includes goodwill. Based on a preliminary allocation of the purchase price,
DoubleClick expects to allocate approximately 28.6% of the purchase price to
the fair value of net tangible assets acquired and approximately 71.4% to the
fair value of intangible assets, including goodwill to be amortized by
DoubleClick over their estimated useful lives in accordance with generally
accepted accounting principles. The ultimate allocation of the purchase price
will depend on the results of the fair value appraisals.
NO DISSENTERS' RIGHTS
Shareholders of @plan are not entitled to exercise dissenters' or appraisal
rights as a result of the merger or to demand cash payment for their shares
under Tennessee law.
DELISTING AND DEREGISTRATION OF @PLAN'S COMMON STOCK FOLLOWING THE MERGER
If the merger is completed, @plan's common stock will be delisted from the
Nasdaq National Market and will be deregistered under the Securities Exchange
Act of 1934.
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LISTING OF DOUBLECLICK COMMON STOCK TO BE ISSUED IN THE MERGER
The approval for quotation on the Nasdaq National Market of the shares of
DoubleClick common stock to be issued in the merger and the shares of
DoubleClick common stock to be reserved for issuance in connection with the
assumption of outstanding @plan stock options and warrants is a condition to the
consummation of the merger.
RESTRICTIONS ON SALE OF SHARES BY AFFILIATES
The shares of DoubleClick common stock to be issued in connection with the
merger will be registered under the Securities Act and will be freely
transferable under the Securities Act, except for shares of DoubleClick common
stock issued to any person who is deemed to be an affiliate of DoubleClick or
@plan under the Securities Act. Persons who may be deemed to be affiliates
include individuals or entities that control, are controlled by or are under
common control of DoubleClick or @plan, as the case may be, and may include some
of the officers, directors or principal stockholders of DoubleClick or @plan.
Affiliates may not sell their shares of DoubleClick common stock acquired in
connection with the merger except pursuant to:
an effective registration statement under the Securities Act covering the
resale of those shares;
an exemption under paragraph (d) of Rule 145 under the Securities Act; or
another applicable exemption under the Securities Act.
DoubleClick's registration statement on Form S-4, of which this proxy
statement/prospectus forms a part, does not cover the resale of shares of
DoubleClick common stock to be received by affiliates in the merger.
OPERATIONS FOLLOWING THE MERGER
Following the merger, @plan will operate as a separate business unit of
DoubleClick. Upon completion of the merger, the members of the board of
directors of the surviving corporation will be Kevin Ryan, Stephen Collins and
Greg Ellis. The shareholders of @plan will become stockholders of DoubleClick,
and their rights as stockholders will be governed by DoubleClick's Amended and
Restated Certificate of Incorporation, DoubleClick's Amended and Restated Bylaws
and the laws of the State of Delaware.
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THE AMENDED AND RESTATED MERGER AGREEMENT
AND RELATED AGREEMENTS
The following is a brief summary of the material provisions of the amended
and restated merger agreement, a copy of which is attached as Appendix A to this
proxy statement/prospectus and incorporated herein by reference. We urge you to
read the amended and restated merger agreement in its entirety for a more
complete description of the merger. In the event of any discrepancy between the
terms of the amended and restated merger agreement or other agreements and the
following summary, the amended and restated merger agreement and other
agreements will control.
THE MERGER
@plan will merge with and into Atlas Acquisition Corp., a wholly-owned
subsidiary of DoubleClick, following:
the approval of the amended and restated merger agreement by the @plan
shareholders; and
the satisfaction or waiver of the other conditions to the merger.
Atlas Acquisition Corp. will be the surviving corporation and will continue
as a wholly-owned subsidiary of DoubleClick following the merger.
EFFECTIVE TIME
At the time of the closing of the merger, the parties will cause the merger
to become effective by filing the articles of merger with the Tennessee
Secretary of State and the certificate of merger with the Delaware Secretary of
State. DoubleClick and @plan are working toward completing the merger as soon as
possible and expect to complete the merger during the first quarter of 2001.
DIRECTORS AND OFFICERS OF @PLAN AFTER THE MERGER
The directors and officers of Atlas Acquisition Corp. will be the directors
and officers, respectively, of the surviving corporation at the effective time.
CONVERSION OF @PLAN SHARES IN THE MERGER
At the effective time, each outstanding share of @plan common stock will
automatically be converted into the right to receive, at DoubleClick's election,
either (i) (A) a fraction of a share of DoubleClick common stock, the numerator
of which is, at DoubleClick's election, an amount between $4.00 and $6.40, and
the denominator of which is equal to the average of the last reported sales
prices for a share of DoubleClick common stock on the Nasdaq National Market for
the ten trading days ending on the business day preceding the special
shareholders' meeting, or the closing, if the special shareholders' meeting does
not occur on the closing date and (B) $8.00 minus the value of the DoubleClick
common stock received (the numerator in the preceding clause (A)), or
(ii) $8.00 in cash. A decrease in the value of DoubleClick common stock from the
ten-day average to the closing date will result in a decrease in the dollar
value of the merger consideration received by @plan shareholders.
The elections to be made by DoubleClick must be made in writing to @plan by
5:30 p.m. (New York City time) on the business day preceding the special
shareholders' meeting, or the closing, if the special shareholders' meeting does
not occur on the closing date.
Adjustment to cash and stock payable to achieve tax-free status. The
Internal Revenue Code requires that for the merger to qualify as a tax-free
reorganization, the consideration, valued on the closing date, may not include
more than 50% cash. However, in the event that DoubleClick elects to pay the
merger consideration in a combination of cash and DoubleClick common stock and
the mean between the high and low sales price of DoubleClick common stock on the
closing date is lower than the ten day trading average used to determine the
number of shares issuable in the merger, for tax purposes, the cash
consideration may, in certain circumstances, exceed the 50% level. Accordingly,
we agreed in the amended and restated merger agreement that if this occurs,
@plan shareholders will
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receive less cash and more shares of DoubleClick common stock (valued at the
closing date), so as to allow the merger to qualify as a tax-free
reorganization.
Other Adjustments. The amount of cash payable and the number of shares of
DoubleClick common stock issuable in the merger will be proportionately adjusted
as appropriate for any stock split, stock dividend or similar event with respect
to @plan common stock or DoubleClick common stock effected between the date of
this proxy statement/prospectus and the completion of the merger.
NO FRACTIONAL SHARES
No fractional shares of DoubleClick common stock will be issued in
connection with the merger. Instead you will receive an amount of cash, in lieu
of a fraction of a share of DoubleClick common stock, equal to the product of
such fraction multiplied by the ten-day average closing price of DoubleClick
common stock referred to above.
@PLAN STOCK OPTION AND STOCK INCENTIVE PLANS AND WARRANTS
At the effective time of the merger, each outstanding option to purchase
shares of @plan common stock issued under @plan's stock option plans and each
outstanding warrant to purchase shares of @plan common stock will be assumed by
DoubleClick. Each @plan stock option or warrant assumed by DoubleClick will
continue to have the same terms, and be subject to the same conditions, that
were applicable to the option or warrant immediately prior to the effective
time, except that:
each @plan stock option or warrant will be exercisable for shares of
DoubleClick common stock, and the number of shares of DoubleClick common
stock issuable upon exercise of any given option or warrant will be
determined by multiplying:
(A) the number of shares of @plan common stock underlying such option or
warrant, rounded down to the nearest whole number, by
(B) the amount which is $8.00, divided by the ten-day average closing
price of DoubleClick common stock referred to above; and
the per share exercise price of any given option or warrant will be
determined by dividing:
(A) the exercise price of the option or warrant immediately prior to the
effective time by
(B) the amount which is $8.00 divided by the ten-day average closing
price of DoubleClick common stock referred to above, rounded up, if
necessary, to the nearest whole cent.
Adjustments with respect to any options that are 'incentive stock options'
(as defined in the Internal Revenue Code) will be effected in a manner
consistent with the requirements of that code.
@plan has agreed to cause the holders of @plan warrants to terminate all
registration rights with respect to @plan warrants and the securities underlying
such warrants, and to waive all rights to receive consideration other than
shares of DoubleClick common stock in connection with the exercise of @plan
warrants.
THE EXCHANGE AGENT
As of the effective time, DoubleClick is required to deposit with a bank or
trust company certificates representing the shares of DoubleClick common stock,
if any, to be exchanged for shares of @plan common stock and cash to be
exchanged for shares of @plan common stock and to pay for fractional shares of
@plan common stock.
EXCHANGE OF @PLAN STOCK CERTIFICATES FOR CASH OR CASH AND DOUBLECLICK STOCK
CERTIFICATES
Promptly after the effective time, the exchange agent will mail to @plan
shareholders a letter of transmittal and instructions for surrendering @plan
stock certificates in exchange for cash or cash and DoubleClick stock
certificates, depending on the election made by DoubleClick (and cash in lieu of
fractional shares).
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@PLAN SHAREHOLDERS SHOULD NOT SUBMIT STOCK CERTIFICATES FOR EXCHANGE UNTIL
RECEIPT OF THE LETTER OF TRANSMITTAL AND INSTRUCTIONS REFERRED TO ABOVE.
DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES
@plan shareholders are not entitled to receive any dividends or other
distributions on DoubleClick common stock with a record date after the merger is
completed until surrender of @plan stock certificates.
REPRESENTATIONS AND WARRANTIES
DoubleClick and @plan each made a number of representations and warranties
in the amended and restated merger agreement.
@plan made representations about the following topics:
@plan's organization, qualification to do business and good standing, and
absence of subsidiaries;
@plan's charter and bylaws;
@plan's capitalization;
@plan's corporate power to enter into and its authorization of the amended
and restated merger agreement and the transactions contemplated by the
amended and restated merger agreement;
the non-violation of charter or bylaws of @plan, laws or agreements as a
result of the amended and restated merger agreement;
required approvals of governmental authorities relating to the amended and
restated merger agreement;
possession of and compliance with permits required to conduct @plan's
business, and compliance with laws applicable to @plan;
@plan's filings and reports with the Securities and Exchange Commission;
@plan's financial statements;
absence of material adverse effect and other changes in @plan's business
since December 31, 1999;
@plan's employee benefit plans and matters relating to @plan's employees;
the treatment of the merger as a tax-free reorganization in the event that
DoubleClick elects to pay the merger consideration in a combination of cash
and DoubleClick common stock;
@plan's material contracts and obligations;
litigation involving @plan;
environmental laws that apply to @plan;
intellectual property used or owned by @plan;
@plan's taxes;
@plan's insurance;
@plan's properties;
@plan's affiliates;
the opinion of @plan's financial advisor;
@plan's brokers' and finders' fees in connection with the merger;
the absence of certain business practices;
restrictions on @plan's business;
@plan's privacy policy; and
the inapplicability of state anti-takeover statutes to the merger.
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DoubleClick and Atlas Acquisition Corp. made representations about the
following topics:
DoubleClick's and Atlas Acquisition Corp.'s organization, qualification to
do business and good standing;
DoubleClick's and Atlas Acquisition Corp.'s certificate of incorporation
and bylaws;
DoubleClick's capitalization;
appropriate authorization of the issuance of DoubleClick common stock in
the merger;
DoubleClick's and Atlas Acquisition Corp.'s corporate power to enter into
and their authorization of the amended and restated merger agreement and
the transactions contemplated by the amended and restated merger agreement;
non-violation of certificate of incorporation or bylaws of DoubleClick or
Atlas Acquisition Corp., laws or agreements as a result of the amended and
restated merger agreement;
DoubleClick's filings and reports with the Securities and Exchange
Commission;
DoubleClick's financial statements;
the treatment of the merger as a tax-free reorganization in the event that
DoubleClick elects to pay the merger consideration in a combination of cash
and DoubleClick common stock;
the absence of brokers' or finders' fees in connection with the merger on
behalf of DoubleClick; and
absence of material adverse effect and other changes in DoubleClick's
business since December 31, 1999.
The representations and warranties in the amended and restated merger
agreement are complicated and not easily summarized. We urge you to read
carefully the provisions in the amended and restated merger agreement captioned
'Representations and Warranties of Company' and 'Representations and Warranties
of Parent and Merger Sub.'
@PLAN'S CONDUCT OF BUSINESS BEFORE COMPLETION OF THE MERGER
@plan has agreed that, until the completion of the merger, or unless
DoubleClick consents in writing, @plan will conduct its businesses in the
ordinary course of business consistent with past practice and will use
reasonable efforts:
to keep available the services of its present officers, significant
employees and consultants; and
to preserve its relationships with corporate partners, customers, suppliers
and other persons with which it has significant business dealings in order
to preserve substantially intact its business organization.
@plan has also agreed that, until the completion of the merger, or unless
DoubleClick consents in writing, @plan will conduct its business in compliance
with the specific restrictions set forth in the amended and restated merger
agreement, including not permitting:
the modification of @plan's charter or bylaws;
the issuance, sale, pledge or encumbrance of @plan's material property or
assets or shares of @plan capital stock or securities convertible into
@plan capital stock, except for limited issuances of securities in
connection with grants and exercises of stock options;
the acquisition of any interest in any entities outside of the ordinary
course of business;
the incurrence of any indebtedness or issuance of any debt securities;
the amendment or premature termination of any material contract;
the making or authorization of any capital expenditures other than in the
ordinary course of business and in an amount that is less than $25,000;
the declaration or payment of dividends or other distributions on its
capital stock;
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any split, combination, purchase or reclassification of any of its capital
stock, except in certain instances;
the modification or acceleration of any stock options or authorization of
cash payments in exchange for stock options;
the amendment of the terms of, repurchase or redemption of any of its
securities, except in certain instances;
the increase of compensation payable to directors, officers, consultants or
employees;
the granting of any severance arrangements or entering into of any
agreement providing benefits upon a change of control that would be
triggered by the merger with any person who is not currently entitled to
such benefits from the merger;
the adoption, entering into or amendment in a material respect of any plan,
agreement, policy or arrangement for the benefit of any director, officer
or employee, except to the extent required by law or the terms of a
collective bargaining agreement;
the payment, discharge or satisfaction of any claims, liabilities or
obligations, other than in the ordinary course of business or as excepted
in @plan's filings with the Securities and Exchange Commission or in
schedules to the amended and restated merger agreement;
the making of any changes with respect to @plan's accounting policies or
methods, except as required by generally accepted accounting principles or
by any governmental entity;
the making of any tax election or settlement or compromise of any tax
liability; or
the agreement in writing or otherwise to do any of the above or to take any
action which would make @plan's representations and warranties untrue or
prevent @plan from performing its covenants under the amended and restated
merger agreement or result in any of the conditions to the merger not being
satisfied.
The agreements related to the conduct of @plan's business contained in the
amended and restated merger agreement are complicated and not easily summarized.
We urge you to carefully read the provision of the amended and restated merger
agreement captioned 'Conduct of Business Pending the Closing.'
Each of @plan and DoubleClick has also agreed:
to notify the other promptly of certain events and changes, including
changes that could reasonably be expected to have a material adverse effect
on either party, or to affect its ability to perform its obligations
pursuant to the amended and restated merger agreement; and
to provide access at reasonable times to its offices, employees and books
to the other party and to furnish such information as the other party may
reasonably request.
NO SOLICITATION OF TRANSACTIONS
Until the amended and restated merger agreement is terminated, @plan will
not, directly or indirectly, except as may be required by the securities laws
or, if presented with a company superior proposal, by the fiduciary duties of
@plan's board of directors:
solicit, initiate or encourage any inquiries or the making of any proposal
or offer that constitutes or could lead to a company competing transaction;
enter into or maintain or continue discussions or negotiate with any person
in furtherance of such inquiries or obtain a company competing transaction;
or
agree to or endorse any company competing transaction, or authorize or
permit any of its representatives to take any such action.
Further, @plan is required to notify DoubleClick promptly if any proposal,
offer or inquiry regarding a company competing transaction is made, including
the identity of the person making the proposal, offer or inquiry, and the terms
of the company competing transaction. Prior to furnishing any information or
entering into any discussions or negotiations with any person making a proposal,
@plan
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will provide to DoubleClick written notice to the effect that @plan is
furnishing information to, or entering into discussions or negotiations, and
@plan will keep DoubleClick promptly informed of the status of the terms and
conditions of any discussions or negotiations. Prior to accepting a company
competing proposal, @plan will provide DoubleClick with 24 hours' written notice
of its intention.
@plan has agreed to immediately cease and cause to be terminated all
existing discussions or negotiations with any parties with respect to a company
competing transaction.
A 'company competing transaction' is defined in the amended and restated
merger agreement as any of the following involving @plan (other than the
merger):
any merger, consolidation, share exchange, business combination or other
similar transaction;
any sale, lease, exchange, transfer or other disposition of 20% or more of
the assets of @plan in a single transaction or series of transactions;
any tender offer or exchange offer for 20% or more of the outstanding
voting securities of @plan or the filing of a registration statement in
connection therewith;
any person having acquired beneficial ownership or the right to acquire
beneficial ownership of, or any group having been formed which beneficially
owns, or has the right to acquire beneficial ownership of, 20% or more of
the outstanding voting securities of @plan;
any solicitation in opposition to the approval of the amended and restated
merger agreement by the shareholders of @plan; or
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
A 'company superior proposal' is defined in the amended and restated merger
agreement as a company competing transaction with respect to which:
@plan's board of directors shall have concluded in good faith, based in
part on the advice of independent outside counsel, that failure to take
action would be a breach of @plan's board of directors' fiduciary duties;
if any cash consideration is involved, shall not be subject to any
financing contingency, and with respect to which @plan's board of directors
shall have determined (based in part on the advice of @plan's independent
financial advisors) in the proper exercise of its fiduciary duties that the
acquiring party is capable of consummating such company competing
transaction on the terms proposed; and
@plan's board of directors shall have determined (based in part on the
advice of @plan's independent financial advisors) in the proper exercise of
its fiduciary duties that such company competing transaction provides
greater value to @plan's shareholders than the merger (and @plan's
independent financial advisors opine in writing that such company competing
transaction is superior from a financial point of view).
The agreements related to @plan's non-solicitation of transactions contained
in the amended and restated merger agreement are complicated and not easily
summarized. We urge you to carefully read the provisions of the amended and
restated merger agreement captioned 'No Solicitation of Transactions.'
DIRECTOR AND OFFICER INDEMNIFICATION AND INSURANCE
The amended and restated merger agreement provides that:
the provisions with respect to immunities and indemnification that are set
forth in Atlas Acquisition Corp.'s certificate of incorporation, bylaws and
contractual arrangements in effect on the date of the amended and restated
merger agreement, with certain exceptions, will survive the merger and not
be amended, repealed or otherwise modified for a period of six years from
the effective time of the merger in any manner that would affect adversely
the rights thereunder of individuals who at or at any time prior to the
effective time of the merger were directors, officers, employees or agents
of @plan;
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in the event that @plan or the surviving corporation in the merger or any
of their respective successors or assigns consolidates with or merges into
any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger, or transfers a material amount
of its properties and assets to any person in a single transaction or a
series of transactions, then, and in each such case, DoubleClick will
either guaranty the indemnification obligations described here or will make
or cause to be made proper provision so that the successors and assigns of
@plan or the surviving corporation, as the case may be, assume the
indemnification obligations described here for the benefit of the
indemnified parties and have substantially equal financial ability as @plan
(immediately prior to the effective time of the merger contemplated here)
to satisfy the obligations of the parties pursuant to the amended and
restated merger agreement as a condition to any such future merger,
consolidation or transfer becoming effective; and
for three years after the effective time of the merger, DoubleClick will
maintain in effect the directors' and officers' liability insurance
policies maintained by @plan. DoubleClick is not required to pay premiums
in excess of 150% of the annual premium currently paid by @plan for such
coverage, which annual premium is $227,000. If the premium for such
coverage exceeds this amount, DoubleClick will purchase a policy with the
greatest coverage available for such amount.
BENEFIT PLANS AND ARRANGEMENTS
After the effective time of the merger, DoubleClick will cause the surviving
corporation to honor and satisfy all obligations and liabilities with respect to
@plan's benefit plans. However, the surviving corporation will not be required
to continue any particular @plan benefit plan after the effective time, and any
@plan benefit plan may be amended or terminated in accordance with its terms and
applicable law. If requested by DoubleClick prior to the effective time, @plan
will take all actions necessary and appropriate to terminate any @plan benefit
plan that is a 401(k) plan, effective immediately preceding the closing date and
no further contributions will be made to any 401(k) plan.
CONDITIONS TO THE MERGER
DoubleClick's and @plan's respective obligations to complete the merger and
the related transactions are subject to the satisfaction or waiver, if permitted
by law, of each of the following conditions:
the registration statement (of which this proxy statement/prospectus is a
part) relating to the issuance of shares of DoubleClick common stock as
contemplated by the amended and restated merger agreement must have been
declared effective by the Securities and Exchange Commission;
the amended and restated merger agreement must have been duly approved by
the requisite vote of @plan shareholders in accordance with the Tennessee
Business Corporation Act;
no order, statute, rule, regulation, executive order, stay, decree,
judgment or injunction shall have been enacted, entered, promulgated or
enforced by any court or governmental entity which prohibits or prevents
the consummation of the merger;
any waiting period (and any extension thereof) applicable to the
consummation of the merger under U.S. antitrust laws must have expired or
been terminated; and
all consents, approvals and authorizations legally required to be obtained
to consummate the merger must have been obtained from all governmental
entities.
@plan's obligations to consummate the merger, or to permit the consummation
of the merger are subject to the satisfaction or waiver, if permitted by law, of
each of the following additional conditions:
each of the representations and warranties of DoubleClick and Atlas
Acquisition Corp. contained in the amended and restated merger agreement
must be true, complete and correct in all material respects (other than
representations and warranties subject to 'materiality' or 'material
adverse effect' qualifiers, which must be true, complete and correct in all
respects) both when made and on and as of the effective time of the merger;
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DoubleClick and Atlas Acquisition Corp. must have performed or complied in
all material respects with all obligations required by the amended and
restated merger agreement;
@plan shall have received a certificate signed by the chief executive
officer and chief financial officer of DoubleClick to the effect that the
two conditions above have been satisfied;
if DoubleClick elects to pay the merger consideration in a combination of
cash and DoubleClick common stock, @plan must have received the opinion of
its counsel, Bass, Berry & Sims PLC, to the effect that the merger will
constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, provided that if @plan is unable to obtain such an
opinion, this condition shall be deemed satisfied if DoubleClick's legal
counsel delivers an opinion to @plan to the same effect;
the shares of DoubleClick common stock to be issued in the merger must have
been authorized for listing on the Nasdaq National Market; and
DoubleClick shall have provided @plan with timely written elections as to
whether DoubleClick will pay the merger consideration in a combination of
cash and DoubleClick common stock, or entirely in cash; and in the event of
the former, the exact amounts of cash and DoubleClick common stock to be
paid.
DoubleClick's obligations to consummate the merger are subject to the
satisfaction or waiver of the following additional conditions:
each of the representations and warranties of @plan contained in the
amended and restated merger agreement must be true, complete and correct in
all material respects (other than representations and warranties subject to
'materiality' or 'material adverse effect' qualifiers, which shall be true,
complete and correct in all respects), both when made and on and as of the
effective time of the merger;
@plan must have performed or complied in all material respects with all
obligations required by the amended and restated merger agreement;
none of Mark Wright, Susan Russo, Nancy Lazaros or Karl Spangenberg shall
have terminated or modified their respective agreements as entered into
with DoubleClick on September 24, 2000;
@plan must have received from certain persons, a valid and effective
assignment, in a form reasonably acceptable to DoubleClick, of all
intellectual property rights in all work created by such persons on behalf
of @plan; and
the indemnification agreements between @plan and each of its directors must
have each been amended as provided by the amended and restated merger
agreement.
TERMINATION OF THE AMENDED AND RESTATED MERGER AGREEMENT
The amended and restated merger agreement may be terminated and the merger
may be abandoned at any time before the completion of the merger,
notwithstanding the approval of the amended and restated merger agreement by
@plan's shareholders, as summarized below:
by mutual written consent of the boards of directors of each of @plan and
DoubleClick;
by either @plan or DoubleClick, if, without the fault of the terminating
party, the merger has not been consummated before March 23, 2001;
by either @plan or DoubleClick, if any governmental order, writ, injunction
or decree preventing the consummation of the merger has been entered by any
court of competent jurisdiction and has become final and nonappealable; or
by @plan or DoubleClick, if the amended and restated merger agreement and
the merger fail to receive the requisite votes for approval at the @plan
shareholders' meeting.
Furthermore, the amended and restated merger agreement may be terminated by
DoubleClick if any of the following occur:
the board of directors of @plan withdraws, modifies or changes its
recommendation of the amended and restated merger agreement or the merger
in a manner adverse to DoubleClick;
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the board of directors of @plan recommends a company competing transaction
to the shareholders of @plan;
@plan fails to comply in all material respects with provisions in the
amended and restated merger agreement dealing with non-solicitation of
transactions and the @plan shareholders' meeting;
a party to a shareholder agreement described below (other than DoubleClick)
takes any action prohibited thereby;
a company competing transaction is announced and the board of directors of
@plan:
fails to recommend against acceptance of such company competing
transaction by its shareholders (including by taking no position, or
indicating its inability to take a position, with respect to the
acceptance of a company competing transaction involving a tender offer
or exchange offer by its shareholders) within five business days of
delivery of a written request from DoubleClick for such action,
fails to reconfirm its approval and recommendation of the amended and
restated merger agreement and the transactions contemplated thereby
within five business days of the first announcement or other public
knowledge of such proposal for a company competing transaction, or
determines that such company competing transaction is a company
superior proposal and does not reconfirm its approval and
recommendation of the amended and restated merger agreement and does
not recommend against acceptance of such company superior proposal by
its shareholders, or resolves to do any of the foregoing; or
receipt by @plan of a written notice from DoubleClick of a breach of any
representation, warranty, covenant or agreement on the part of @plan set
forth in the amended and restated merger agreement, or if any
representation or warranty of @plan becomes untrue, incomplete or
incorrect, in either case such that the conditions to the obligation of
DoubleClick to close set forth in the amended and restated merger agreement
would not be satisfied, unless such breach is cured by @plan in ten
business days.
Furthermore, the amended and restated merger agreement may be terminated by
@plan if any of the following occur:
receipt by DoubleClick of a written notice from @plan of a breach of any
representation, warranty, covenant or agreement on the part of DoubleClick
set forth in the amended and restated merger agreement, or if any
representation or warranty of DoubleClick becomes untrue, incomplete or
incorrect, in either case such that the conditions to the obligation of
@plan to close set forth in the amended and restated merger agreement would
not be satisfied, unless such breach is cured by DoubleClick in ten
business days; or
if @plan determines to recommend or enter into a company competing
transaction that is a company superior proposal that was not solicited by
@plan in violation of the amended and restated merger agreement; however,
@plan will not be permitted to terminate the amended and restated merger
agreement for this reason if such company superior proposal is attributable
to a violation by @plan of its obligations under provisions of the amended
and restated merger agreement dealing with non-solicitation of
transactions, and such termination by @plan will not be effective until
after the payment of the termination fee, as provided in the amended and
restated merger agreement.
PAYMENT OF FEES AND EXPENSES
Except as described below, all expenses incurred in connection with the
amended and restated merger agreement and the merger will be paid by the party
incurring such expenses, whether or not the merger is consummated, except that
DoubleClick and @plan each will pay one-half of all expenses incurred in
connection with printing, filing and mailing the registration statement, of
which this proxy statement/prospectus is a part, and all Securities and Exchange
Commission and other regulatory filing fees incurred in connection with such
documents and any fees required to be paid under U.S. antitrust laws.
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@plan will pay DoubleClick an amount equal to DoubleClick's expenses up to
$1.0 million and an additional amount equal to $4.0 million, in the event that:
DoubleClick terminates the amended and restated merger agreement due to a
failure by @plan to perform or comply in all material respects with its
covenants or agreements contained in the amended and restated merger
agreement; or
At or prior to the time of termination (pursuant to the following events),
either there was a proposed or publicly announced company competing
transaction, or within twelve months after such termination @plan enters
into a definitive agreement with respect to any company competing
transaction or any company competing transaction involving @plan is
consummated, and the amended and restated merger agreement is terminated in
any of the following ways:
DoubleClick terminates the amended and restated merger agreement
following the occurrence of any of the following events:
the board of directors of @plan withdraws, modifies or changes its
recommendation of the amended and restated merger agreement or the
merger in a manner adverse to DoubleClick;
the board of directors of @plan recommends a company competing
transaction to the shareholders of @plan;
@plan fails to comply in all material respects with certain
provisions in the amended and restated merger agreement dealing with
non-solicitation of transactions and the @plan shareholders'
meeting;
a party to a shareholder agreement described below (other than
DoubleClick) takes any action prohibited thereby;
a company competing transaction is announced and the board of
directors of @plan:
fails to recommend against acceptance of such company competing
transaction by its shareholders (including by taking no
position, or indicating its inability to take a position, with
respect to the acceptance of a company competing transaction
involving a tender offer or exchange offer by its shareholders)
within five business days of delivery of a written request from
DoubleClick for such action,
fails to reconfirm its approval and recommendation of the
amended and restated merger agreement and the transactions
contemplated thereby within five business days of the first
announcement or other public knowledge of such proposal for a
company competing transaction, or
determines that such company competing transaction is a company
superior proposal and does not reconfirm its approval and
recommendation of the amended and restated merger agreement and
does not recommend against acceptance of such company superior
proposal by its shareholders, or resolves to do any of the
foregoing;
@plan terminates the amended and restated merger agreement following
its determination to recommend or enter into a company competing
transaction that is a company superior proposal that was not solicited
by @plan in violation of the amended and restated merger agreement;
however, @plan will not be permitted to terminate the amended and
restated merger agreement for this reason if such company superior
proposal is attributable to a violation by @plan of its obligations
under provisions of the amended and restated merger agreement dealing
with non-solicitation of transactions, and such termination by @plan
will not be effective until after the payment of the termination fee,
as provided in the amended and restated merger agreement;
either @plan or DoubleClick terminates the amended and restated merger
agreement, without the fault of the terminating party, because the
merger has not been consummated before March 23, 2001; or
DoubleClick terminates the amended and restated merger agreement
because the merger agreement and the merger fail to receive the
requisite votes for approval at the special shareholders' meeting.
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In the event @plan terminates the amended and restated merger agreement due
to a breach by DoubleClick following which, under the terms of the amended and
restated merger agreement, @plan has the right to terminate the amended and
restated merger agreement, and DoubleClick fails to cure such breach within ten
business days of notice by @plan of such breach, then DoubleClick will promptly
reimburse @plan for @plan's expenses up to $250,000.
EXTENSION, WAIVER AND AMENDMENT OF THE AMENDED AND RESTATED MERGER AGREEMENT
At any time prior to the completion of the merger, either DoubleClick or
@plan may extend the time for or waive compliance with the performance of any
obligation or other act of the other party, waive any inaccuracy in the
representations and warranties contained in the amended and restated merger
agreement or in any document delivered pursuant to the amended and restated
merger agreement and waive compliance by the other party with any of the
agreements or conditions contained in the amended and restated merger agreement.
The amended and restated merger agreement may be amended by DoubleClick and
@plan at any time prior to the completion of the merger. However, after the
approval of the amended and restated merger agreement by @plan's shareholders,
no amendment may be made that changes the amount or type of consideration into
which @plan common stock will be converted pursuant to the amended and restated
merger agreement.
RELATED AGREEMENTS
SHAREHOLDER AGREEMENTS
In connection with the execution of the original merger agreement on
September 24, 2000, Mark K. Wright, Roger J. Thomson, Gary R. Haynes, Blue Chip
Capital Fund II Limited Partnership, Miami Valley Ventures Fund, L.P., Richland
Ventures, L.P., Richland Ventures II, L.P. and Massey Burch Venture Fund I,
L.P., as shareholders of @plan, have entered into shareholder agreements, and
irrevocable proxies with DoubleClick. In connection with the execution of the
amended and restated merger agreement, each of these @plan shareholders entered
into shareholder letters pursuant to which each reaffirmed all of its
obligations under the shareholder agreements, and each granted DoubleClick
irrevocable proxies that superceded the original proxies. The shareholder
agreements, as affirmed by the shareholder letters, and irrevocable proxies
provide that these shareholders will vote the shares of @plan common stock
specified in the shareholder agreements, representing, in the aggregate, 48.6%
of @plan's outstanding common stock as of November 27, 2000, at every meeting of
the shareholders of @plan at which the amended and restated merger agreement or
the merger are considered or voted upon, and at every adjournment and on every
action or approval by written resolution of the shareholders of @plan with
respect to the amended and restated merger agreement or the merger, in favor of
approval of the amended and restated merger agreement (provided the amended and
restated merger agreement shall not have been amended in a manner materially
adverse to the interests of such shareholder) and of the merger. In addition,
each such shareholder agreed not to initiate or solicit, directly or indirectly,
any proposal, plan or offer to acquire all or any material part of the business
or properties or capital stock of @plan, or to initiate, directly or indirectly,
any contact with any person in an effort to or with a view towards soliciting
any such transaction; or to furnish information concerning @plan's business,
properties or assets to any person or group (other than DoubleClick, or any
associate, agent or representative of DoubleClick) under any circumstances that
could reasonably be expected to relate to such a transaction; or to negotiate or
enter into discussions or an agreement, directly or indirectly, with any entity
or group with respect to any such potential transaction. The @plan shareholders
who are parties to the shareholder agreements and irrevocable proxies retained
the right to vote their shares of @plan common stock on all matters other than
those identified in the shareholder agreements. None of the shareholders who are
parties to the shareholder agreements with DoubleClick was paid additional
consideration in connection with such shareholder agreements. These agreements
terminate upon the earlier to occur of the termination of the amended and
restated merger agreement or the effective time of the merger.
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EMPLOYMENT, CONSULTING AND NON-COMPETE AGREEMENTS
On September 24, 2000, DoubleClick entered into a consulting agreement with
Mark K. Wright, @plan's Chairman and Chief Executive Officer; and employment
agreements with Susan Russo, @plan's Executive Vice President, and Nancy
Lazaros, @plan's Senior Vice President, Chief Financial Officer and Secretary.
DoubleClick and @plan entered into a severance agreement with Karl Spangenberg,
@plan's President and Chief Operating Officer. These agreements will become
effective upon the consummation of the merger.
Under the terms of his consulting agreement, Mr. Wright agreed to consult
with DoubleClick for a minimum of fifteen business days within six weeks
following the closing of the merger, and thereafter on a per-diem basis for each
additional day DoubleClick requests during the year following the closing of the
merger. This agreement does not affect the terms of Mr. Wright's existing
severance arrangements with @plan, pursuant to which, at the closing of the
merger, Mr. Wright is entitled to $540,000. DoubleClick agreed to pay such
severance amounts to Mr. Wright on the closing of the merger. Mr. Wright's
agreement contains customary non-disclosure provisions and customary
non-competition and non-solicitation provisions, which bind Mr. Wright for
eighteen months following the closing of the merger and are described in more
detail below.
Under the terms of the employment agreements, Ms. Russo and Ms. Lazaros each
agreed to be employed by DoubleClick on an at-will basis. Ms. Russo will be
employed in the position of Vice President, Research for DoubleClick and, within
@plan, Executive Vice President and Chief Operating Officer, with an annual
salary of $170,000. If Ms. Russo's employment is terminated by DoubleClick
without cause or by Ms. Russo for good reason prior to twelve months after the
closing of the merger, Ms. Russo will be entitled to receive $297,000; if such
termination were to occur after twelve months but prior to twenty-four months
after the closing of the merger, Ms. Russo will be entitled to receive $148,500.
Ms. Lazaros will be employed in the position of Vice President for DoubleClick
and, within @plan, Executive Vice President, with an annual salary of $140,000.
If Ms. Lazaros' employment is terminated by DoubleClick without cause or by Ms.
Lazaros for good reason prior to twelve months after the closing date of the
merger, Ms. Lazaros will be entitled to receive $249,750; if such termination
were to occur after twelve months but prior to twenty-four months after the
closing date of the merger, Ms. Lazaros will be entitled to receive $124,875.
Cause as used in these employment agreements, means termination based on:
the employee's breach of any material provision contained in the employment
agreement;
misconduct, defined as misappropriating DoubleClick funds or property,
obtaining any personal profit from any transaction in which the employee
has an interest that is adverse to DoubleClick or any material breach of
the duty of loyalty and fidelity to DoubleClick, or any other act or
omission by the employee which substantially impairs DoubleClick's ability
to conduct its ordinary business in its usual manner;
willful neglect or refusal to perform the material duties assigned to the
employee under or pursuant to the terms of the employment agreement;
conviction of, or plea of guilty or nolo contendere to, a felony or other
crime involving moral turpitude or that concerns the business in which
DoubleClick is engaged;
acts of dishonesty or moral turpitude by the employee that DoubleClick
reasonably believes are materially detrimental to DoubleClick, or any other
act or omission which subjects DoubleClick or any of its affiliates to
substantial public disrespect, scandal, or ridicule, or that causes
DoubleClick to be in violation of governmental regulations that subjects
DoubleClick either to sanctions by governmental authority or to civil
liability to its employees or third parties (provided that the employee's
declaration of bankruptcy shall not be grounds for termination for cause
under such provision); or
disclosure or use of DoubleClick's confidential information, other than as
specifically authorized and required (or as the employee reasonably
believes to be authorized and required) in the performance of the
employee's duties.
Good reason as used in the employment agreements means resignation by the
employee within thirty days after the occurrence of any of the following events:
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any reduction in the employee's base salary as specified in the employment
agreement;
a requirement by DoubleClick that the employee relocate to an office more
than a sixty (60) mile radius from the employee's office at the time of the
execution of the employment agreement, with respect to Ms. Russo, and more
than a thirty (30) mile radius (excluding New York City) from the
employee's office at the time of the execution of the employment agreement,
with respect to Ms. Lazaros;
a change in the employee's job title; or
DoubleClick's breach of any material provision contained in the employment
agreement.
The consulting agreement and employment agreements also contain customary
non-competition and non-solicitation provisions which provide that Mr. Wright,
Ms. Russo and Ms. Lazaros will not:
(a) Engage in any activity in any market in which DoubleClick, or its
affiliates or subsidiaries, conducts business the principal function of
which activity is the management and delivery of on-line advertisements by
third parties, on-line media data and planning systems, e-commerce data and
planning systems, or on-line advertising auction systems in the United
States or Canada; (b) permit such individual's name to be used in
connection with a business which is competitive or substantially similar to
DoubleClick's business; or (c) acquire any debt, equity, or other ownership
interest in any person or entity engaged in DoubleClick's business, except
that such individual may own, in the aggregate, not more than one percent
(1%) of the outstanding shares of any publicly held corporation which is
competitive with DoubleClick which has shares listed for trading on a
securities exchange registered with the Securities and Exchange Commission
or through the automatic quotation system of a registered securities
association. In the case of Mr. Wright, such restrictions shall apply for a
period of eighteen months from the closing of the merger. In the case of
Ms. Russo, such restrictions shall apply during the period of her
employment and for a period of eighteen months thereafter. In the case of
Ms. Lazaros, such restrictions shall apply during the period of her
employment and for a period of one year thereafter;
Request or otherwise attempt to induce or influence, directly or
indirectly, any customer of DoubleClick, its affiliates, or other persons
sharing a business relationship with DoubleClick to cancel, limit, or
postpone their business with DoubleClick, or otherwise take action which
might be to the material disadvantage of DoubleClick. In the case of Mr.
Wright, such restrictions shall apply for a period of eighteen months from
the closing of the merger. In the case of Ms. Russo, such restrictions
shall apply during the period of her employment and for a period of
eighteen months thereafter. In the case of Ms. Lazaros, such restrictions
shall apply during the period of her employment and for a period of two
years thereafter; or
Solicit for employment, directly or indirectly, or induce or actively
attempt to influence any employee, agent, officer, director, contractor,
consultant, or other business associate of DoubleClick to terminate his or
her employment or discontinue such person's consultant, contractor, or
other business association with DoubleClick. In the case of Mr. Wright,
such restrictions shall apply for a period of two years from the closing of
the merger. In the case of Ms. Russo, such restrictions shall apply during
the period of her employment and for a period of eighteen months
thereafter. In the case of Ms. Lazaros, such restrictions shall apply
during the period of her employment and for a period of two years
thereafter.
Concurrently with the execution of the original merger agreement on
September 24, 2000, DoubleClick and @plan entered into a severance agreement
with Mr. Spangenberg. Pursuant to the terms of this agreement, Mr. Spangenberg's
employment with @plan will terminate upon the closing of the merger, and Mr.
Spangenberg will receive payments under his existing severance arrangements with
@plan, pursuant to which, at the closing of the merger, Mr. Spangenberg is
entitled to $467,500. DoubleClick agreed to pay such severance amounts to Mr.
Spangenberg upon the closing of the merger (or within a reasonable period of
time after the closing). Mr. Spangenberg's agreement contains customary
non-competition and non-solicitation provisions, which are active for one year
following his termination.
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BUSINESS OF @PLAN
@plan is a leading online business to business exchange for optimizing
Internet advertising and merchandising strategies through its target market
research planning systems. @plan's systems are specifically designed for
Internet advertisers, advertising agencies, Web publishers, online retailers and
consumer brand marketers. These systems enable its clients to effectively
harness the power of the Internet as an advertising, marketing and retailing
medium. @plan's internally developed systems, which its clients access through
its Web site, combine its databases of consumer lifestyle, product preference
and demographic data with powerful technology that enables its clients to
perform queries and searches to plan campaigns and strategies. @plan's
syndicated Internet consumer research data is collected by The Gallup
Organization on an exclusive basis. @plan believes that its systems facilitate
the purchase and sale of advertising on the Internet and are becoming an
important information tool in enabling the increase in consumer electronic
commerce.
@plan was incorporated in Tennessee in May 1996. @plan introduced the @plan
Gutenberg Advertising System in June 1997, the @plan Kepler E-Business System in
December 1998 and the @plan Darwin E-Retail System in March 2000. As of
September 30, 2000, @plan had contracts representing a total of over 500
Internet advertisers, advertising agency offices, Web sites, online retailers
and consumer brand marketers. @plan currently has subscription contracts for its
systems with all of the top 20 Web publishers as measured by advertising
revenues, 70%of the top 20 U.S. advertising agencies primarily focused on the
Web as measured by billings and 80% of the top 20 'traditional' U.S. advertising
agencies as measured by billings.
@PLAN STRATEGY
@plan's objective is to be the leading provider of target market research
planning systems for online market participants including Internet advertisers,
advertising agencies, Web publishers, online retailers and consumer brand
marketers. The following are the key elements of its strategy:
Develop New Products. @plan believes that its future success depends on
its ability to develop new systems and products. @plan has developed and
launched highly targeted vertical market research planning systems
including, Darwin E-Retail System, which was launched in March 2000 and
focuses on the merchandising, automotive and travel industries. @plan's
strategy includes the continued development and introduction of additional
vertical market research systems and new products.
Increase Market Penetration of the @plan Kepler E-Business System. @plan
intends to increase the market penetration of the @plan Kepler E-Business
System by continuing to target its sales and marketing efforts toward online
retailers and consumer brand marketers. @plan introduced the @plan Kepler
E-Business System in December 1998 and as of September 30, 2000, @plan had
entered into contracts with 49 online retailers and consumer brand
marketers. @plan intends to establish the @plan Kepler E-Business System as
the recognized leader in its industry to capitalize on the projected growth
of electronic commerce.
Enhance and Expand the @plan Gutenberg Advertising System. @plan intends
to expand its sales and marketing efforts of the @plan Gutenberg Advertising
System. Further, it intends to leverage its proprietary information and
technology to further enhance the @plan Gutenberg Advertising System and
facilitate the development of additional features. @plan believes that its
proprietary information and software interface and the experience and
knowledge gained through the delivery of its systems provides it with a
significant competitive advantage.
Develop Additional Revenue Sources. @plan intends to leverage its
database of information, its technology, its expertise and its existing
client base to develop new sources of revenue. As the Internet continues to
grow and evolve, @plan believes the demand for more detailed Internet market
research tools will increase. @plan intends to meet this demand by
continually developing new information products that are of interest to its
clients. In addition, @plan intends to leverage its relationships with
existing clients by expanding existing contracts to include additional
client offices and Web properties.
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Expand Sales Efforts. @plan believes that a strong sales organization is
essential to effectively sell its systems. Its current sales team consists
of highly qualified, experienced individuals who sell its sophisticated
systems. To increase its market penetration, particularly in the growing
electronic commerce segment, @plan intends to continue to expand its sales
efforts by continuing to expand its sales team.
Continue to Focus on Client Service. @plan emphasizes high quality
service for its clients and takes a proactive approach to ensure that its
clients are satisfied. @plan believes client satisfaction is the key to
ensuring high rates of contract renewal, and, accordingly, it maintains a
dedicated client service team that provides service, training and client
support. @plan compensates its client service managers in part based on
targeted levels of renewal rates. In addition, as its client base increases
@plan intends to continue to build its client service team to offer a high
level of service, training and support.
Leverage Its Market Research to Identify Key Trends. @plan believes that
a significant source of value to its clients is its ability to track trends
in the online marketplace. @plan continually updates its data collection
process to capture relevant information to define these trends. @plan
intends to continue to use and refine these tracking techniques to provide
the information that its clients need and to identify appropriate areas of
expansion for its products.
@PLAN SYSTEMS
@plan provides four target market research planning systems: the @plan
Gutenberg Advertising System for advertisers, advertising agencies and Web
publishers; the @plan Kepler E-Business System for online retailers and consumer
brand marketers; the @plan Darwin E-Retail System for e-retailers in the
merchandising, automotive and travel industries; and the Emerson Site
Performance System for advertising supported Web sites. These systems are
accessed through @plan's Web site by entering a password combination that allows
its clients access to its sophisticated software interfaces through which they
can query various datasets in @plan's exclusively owned and controlled
databases. The datasets and databases that new clients can access generally
depend on the system to which they subscribe as set forth below:
@PLAN GUTENBERG ADVERTISING SYSTEM
Advertiser-supported Web site specific profiling data
Web site advertising rate card, site description and contact information
data, which @plan calls its Basic Resource for Evaluating Websites or
B.R.E.W. database
Web adult consumer lifestyle and product preference data
@PLAN KEPLER BUSINESS SYSTEM
Electronic commerce/retailing Web site specific profiling data
Adult U.S. population lifestyle and product preference database
Web adult consumer lifestyle and product preference data
Advertiser-supported Web site specific profiling data
@PLAN DARWIN E-RETAIL SYSTEM
Site shopping/purchase data
Site shopping/purchase evaluation data
Demographic and product preference data
@PLAN EMERSON SITE PERFORMANCE SYSTEM
Advertiser-supported Web site specific consumer evaluation data
Web site specific brand perception data
Web site evaluation ranking data
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@PLAN GUTENBERG ADVERTISING SYSTEM
The @plan Gutenberg Advertising System is a comprehensive advertising
decision support and planning system providing lifestyle, product preference and
demographic profile information across a large number of advertiser-supported
Web sites.
Internet advertisers and advertising agencies can query the system on an
interactive basis to better understand the role the Internet should play in
attaining specific advertising objectives. Clients can conduct queries on
various client defined targets, such as Web audiences, advertiser-supported Web
sites, or particular products or services. By combining the results of those
queries with current rate card information from @plan's B.R.E.W. database,
clients can develop comprehensive and sophisticated media plans and marketing
campaigns for reaching a specific target audience in the most efficient and
cost-effective manner.
Web publishers utilize the system to develop specific strategies for
optimizing their sales efforts toward those advertisers who would be most
interested in reaching the audience that the publisher's Web site can deliver.
The system provides the support for these optimization strategies and sales
efforts in the form of highly detailed, third-party neutral and comparable
lifestyle, product preference, shopping behavior and demographic profiling data
across a large number of advertiser supported Web sites. Web publishers can also
use the system to assess the strengths and weaknesses of their competitors as
well as to help differentiate the competitive position of their sites.
@PLAN KEPLER E-BUSINESS SYSTEM
The @plan Kepler E-Business System is a comprehensive consumer Internet
market research and planning system providing lifestyle, product preference,
shopping behavior and demographic profiling data across a large number of
advertiser-supported Web sites and consumer electronic commerce retail sites and
categories. Online retailers and consumer brand marketers utilize the system to
understand and track their relative strengths and weaknesses in order to assess
their strategy in both traditional and online markets. The system provides
support for these assessments in the form of highly detailed and comparable
information across a large number of consumer electronic commerce retail Web
sites. Online retailers can also use this information to develop more effective
and cost-efficient customer acquisition and retention strategies. The system
also provides access to a database reflecting select lifestyle, product
preference and demographic profiling data for the total U.S. adult population.
Online retailers and consumer brand marketers utilize the system to access this
data to track differences in retailing trends between traditional and online
markets to better understand how the online market differs from the traditional
market in their particular retail category. Online retailers and consumer brand
marketers can also utilize the system to combine this profile information with
content site information to arrive at statistical estimates of the market
penetration for various products and services sold on the Internet.
@PLAN DARWIN E-RETAIL SYSTEM
The Darwin E-Retail System is a comprehensive strategic planning system that
provides essential market intelligence necessary to develop retailing strategies
and tactics for the automotive, travel and general merchandising sectors of
online retailing. Darwin is a dynamic planning tool that allows a user to
benchmark and track their progress relative to other retailers. Retailers will
be able to understand in great detail their customer composition and how
customers assess their performance in relationship to other retailers.
@PLAN EMERSON SITE PERFORMANCE SYSTEM
The Emerson Site Performance System is a Web site performance market
research tracking tool that can help Web sites craft an enduring business
strategy designed to keep and grow a Web site's viewer base. The Emerson system
allows its users to understand the key components of their Web sites' brand
personality by target audience and compare these key brand metrics to their
competitors'. Using the Emerson system, Web sites will be able to determine how
their users evaluate and rank their performance in relationship to their
competitors, as well as perform Web site-to-Web site indexing to evaluate and
benchmark their competitive position.
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@PLAN'S CLIENTS
The following is a representative list within each category of the over 500
clients that @plan currently has under contract:
<TABLE>
<CAPTION>
ADVERTISING AGENCIES ONLINE RETAILERS
-------------------- AND CONSUMER
INTERACTIVE TRADITIONAL WEB PUBLISHERS BRAND MARKETERS
----------- ----------- -------------- ---------------
<S> <C> <C> <C>
avenue a BBDO About.com Buy.com
Digitas Euro RSCG DSW Partners CBS MarketWatch CDNOW
iXL Grey Interactive Discovery Channel eBay.com
i-traffic Saatchi & Saatchi Online Ford.com
Magnet Interactive Starcom IP (Leo Burnett) Excite@Home PaineWebber Incorporated
Modem Media TBWA/Chiat Day E*TRADE Wine.com
answerthink Initiative Media Time Inc. New Media
Women.com
</TABLE>
DATA COLLECTION AND RESULTING DATABASES
The methodology @plan uses for collecting data, the generation of a sample
population to be surveyed and the collection of data from that sample population
for all of @plan's databases is controlled and conducted by Gallup, which uses a
random scientific sample telephone dialing process to generate an initial pool
of potential survey participants. Data is collected from the participants first
on the phone and, for the Web user database, by means of an extensive
interactive online survey software program. The survey software employs a
'decision tree' methodology that automatically poses specific questions based on
a respondent's prior pattern of replies. The online survey software can collect
a wide variety of data while maintaining the interest of the respondent because
it automatically adjusts to the specific behavior and interests of the
respondent. For a subset of non-Web users, consumer lifestyle, product
preference and demographic data is collected by means of an extensive phone
interview. This data is used to create @plan's U.S. population database. The
data collected is then incorporated into a number of distinct datasets. These
datasets include a U.S. consumer lifestyle and product preference dataset, an
electronic commerce/retailing website profile dataset, an advertiser-supported
Web site profiling dataset and a Web consumer lifestyle and product preference
dataset.
@plan employs stringent controls to ensure the integrity of its consumer
market research data. Before any data point can be considered for reporting, it
must first pass rigorous statistical tests.
SALES AND MARKETING OF @PLAN SYSTEMS
@plan sells its systems through a sales team located in Stamford,
Connecticut and San Francisco, California. Its current sales team consists of
highly qualified, experienced individuals who are able to effectively sell its
sophisticated systems. @plan intends to expand its sales team by adding
additional experienced individuals. @plan's sales team has a number of selling
protocols and systems in place to maximize prospecting and closing of
subscription contracts. @plan's systems are generally sold on an annual
subscription basis. As of September 30, 2000, approximately 93% of @plan's
contracts provided for automatic one year renewals unless the client provides
written notice of termination prior to the anniversary date of the contract.
@plan takes a highly selective approach to its marketing. To help build
brand awareness with its prospective customers, @plan largely relies on
one-to-one live product demonstrations of its systems. In addition, @plan seeks
speaking engagements at very select events where current and prospective clients
are concentrated. @plan also produces marketing materials, including media kits
and presentations, in support of sales to prospective customers.
@PLAN'S CLIENT SERVICE TEAM
@plan believes that its ability to establish and maintain long-term client
relationships and high contract renewal rates in part depends upon the strength
of its client service operations and team. @plan's client service team consists
of client service managers located in Stamford, Connecticut and San Francisco,
California. @plan motivates its client service managers to provide the highest
quality service
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by basing a portion of their compensation on both the renewal rates of the
clients they support and the overall client renewal rate. In addition to
providing training and client support, this group works proactively with @plan's
clients to help them maximize the value they derive from its systems. Each
client service manager supports and is responsible for approximately 30 to 35
contracts. The assignments vary in relation to specific client needs but are
generally defined geographically to enhance opportunities for personal contact.
The client service managers are responsible for training their clients in how to
use the system and the research information that @plan's systems provide,
resolving any problems their clients have with the systems, and providing
strategic insight and technical support. The client service managers also obtain
feedback from their clients to assist @plan in anticipating client needs and
developing new systems. @plan monitors its clients' use of the systems on a
continual basis to gauge client satisfaction. @plan intends to continue to build
its client service team as its client base increases to offer a high level of
client service, training and support.
COMPETITION FOR @PLAN'S INTERNET CLIENTS
The business of market research tools for Internet advertisers, advertising
agencies, Web publishers, online retailers and consumer brand marketers is
highly competitive and rapidly evolving, and @plan expects competition in this
business to intensify in the future. While @plan does not believe any of its
competitors currently offer Internet target market research systems that provide
the same search, query and planning capabilities as @plan's systems, it faces
competition from a number of companies who provide services to a similar base of
clients and who could develop systems that more directly compete with its
systems. In some cases @plan's services are complementary to services provided
by other companies and in some cases, particularly with respect to Web 'ratings'
companies, @plan's services are considered to be a substitute.
@plan's competitors include:
Web 'ratings' companies, including Jupiter Media Metrix and Nielsen Media
Research/NetRatings, that rely on using a sample group of respondents where
software is installed on a respondent's computer and passively monitors Web
behavior;
'auditing' companies, including I/PRO, that audit viewers in terms of page
views, site impressions and navigation on a subject Web site;
advertisement targeting providers, including 24/7 Media, that place
advertisements on networks of Web sites and collect data on viewer
response;
advertisement performance measurement companies, including MatchLogic;
Web advertising management services, including AdKnowledge;
online research and consulting providers, including Forrester Research; and
syndicated market research providers in traditional publishing, including
MRI and Simmons.
Most of these companies have greater financial, technical, product
development, marketing and other resources than @plan has. These companies may
be better known and have longer operating histories than @plan. @plan believes
that its ability to compete depends on many factors both within and beyond its
control, including the following:
the timing and acceptance of new solutions and enhancements to existing
solutions developed by @plan or its competitors;
customer service and support efforts;
sales and marketing efforts; and
the ease of use, performance, price and reliability of solutions developed
by @plan or its competitors.
PROTECTION OF @PLAN'S PROPRIETARY RIGHTS
Proprietary rights are important to @plan's success and its competitive
position. To protect its proprietary rights, @plan relies on copyright,
trademark, and trade secret laws, confidentiality
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agreements with third parties, and license agreements with consultants, vendors
and customers. Despite such protection, a third party could, without
authorization, copy or otherwise appropriate information from @plan's database.
@plan's agreements with employees, consultants and others who participate in
development activities could be breached. @plan may not have adequate remedies
for any breach, and its trade secrets may otherwise become known or
independently developed by competitors. In addition, the laws of some foreign
countries do not protect its proprietary rights to the same extent as do the
laws of the United States, and effective copyright, trademark and trade secret
protection may not be available in those jurisdictions.
@plan has applied for registration of several trademarks in the United
States. Only one of these applications, for @plan; has been approved to date,
and there can be no assurance that the other applications will be approved in
the future. Even if these applications are approved, the trademarks may be
successfully challenged by others or invalidated. If the applications are not
approved because third parties own the trademarks, the use of the trademarks
will be restricted unless @plan enters into arrangements with the third parties
which may be unavailable on commercially reasonable terms.
There have been substantial amounts of litigation in the computer and online
industries regarding intellectual property assets. Third parties may claim
infringement by @plan with respect to current and future products, trademarks,
or other proprietary rights, or @plan may counterclaim against these parties.
Any such claims or counterclaims could be time-consuming, result in costly
litigation, divert management's attention, cause product release delays, require
@plan to redesign its products or require @plan to enter into royalty or
licensing agreements, any of which could harm its business, financial condition
and operating results. Such royalty and licensing agreements, if required, may
not be available on terms acceptable to @plan, if at all.
EMPLOYEES
As of September 30, 2000, @plan had 43 employees. @plan also contracts with
independent contractors to develop its internally developed software systems and
to support its information services personnel. @plan is not subject to any
collective bargaining agreements, and it believes its relationship with its
employees is good.
PROPERTIES
@plan's principal executive offices are located in Stamford, Connecticut.
@plan's lease for approximately 8,600 square feet at this location expires in
February 2001; however, @plan is negotiating an amendment to the lease with the
landlord to increase the square footage that it rents. @plan also leases
approximately 2,400 square feet space for its sales and client service efforts
in San Francisco, California. This lease expires in June 2002.
NO LEGAL PROCEEDINGS
@plan is not a party to any material legal proceedings.
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SECURITY OWNERSHIP OF @PLAN MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
As of November 27, 2000, there were 11,332,770 shares of @plan common stock
outstanding. The following table sets forth, as of November 27, 2000 unless
otherwise noted, the beneficial ownership of each current director, each of the
executive officers of @plan, the executive officers and directors as a group,
and each @plan shareholder known to @plan's management to own beneficially more
than 5% of the outstanding @plan common stock. In addition, as a result of
entering into the shareholder agreements and the shareholder letters with @plan
shareholders, the forms of which are attached as Appendix B and Appendix C,
respectively, to this proxy statement/prospectus, DoubleClick may be deemed to
be the beneficial owner of 5,509,100 shares of @plan common stock. DoubleClick
disclaims beneficial ownership of such shares. Unless otherwise indicated, @plan
believes that the beneficial owner set forth in the table has sole voting and
investment power with respect to the number of shares set forth opposite such
@plan shareholder's name.
<TABLE>
<CAPTION>
WARRANTS
AND OPTIONS
SHARES ACQUIRABLE
BENEFICIALLY WITHIN PERCENT OF
NAME OF BENEFICIAL OWNER: OWNED(1) 60 DAYS(9) CLASS
------------------------- -------- ---------- -----
<S> <C> <C> <C>
W. Patrick Ortale, III................................... 3,887,785(2) 103,185 34.2%
Entities associated with Richland Ventures............... 3,855,185(3) 75,185 34.0
Massey Burch Venture Fund I, L.P......................... 2,353,350(4) 73,350 20.7
Donald M. Johnston....................................... 2,353,350(4) 73,350 20.7
Entities associated with Blue Chip Venture Company....... 917,901(5) 17,901 8.1
John H. Wyant............................................ 945,901(6) 45,901 8.3
FMR Corp................................................. 628,900(7) -- 5.5
Mark K. Wright........................................... 918,075 413,175 7.8
Karl A. Spangenberg...................................... 438,720 430,170 3.7
Susan C. Russo........................................... 441,659 416,909 3.8
Nancy A. Lazaros......................................... 112,917 112,917 1.0
Gary R. Haynes........................................... 710,012(8) 58,012 6.2
Roger J. Thomson......................................... 154,670 30,470 1.4
--------- ----
Directors and executive officers as a group
(9 persons)............................................ 9,963,089 76.5
</TABLE>
---------
(1) Pursuant to the rules of the Securities and Exchange Commission, shares of
common stock subject to options and warrants that are exercisable within 60
days of November 27, 2000 are deemed outstanding for the purpose of
computing the holder's beneficial ownership (and the beneficial ownership of
all executive officers and directors as a group, to the extent applicable).
(2) Represents 1,980,000 shares that are held by Richland Ventures, L.P. and
1,800,000 shares that are held by Richland Ventures II, L.P., and warrants
for the purchase of 75,185 shares of common stock held by these two
entities. Mr. Ortale is a general partner of Richland Partners, L.P. and
Richland Partners II, L.P., their respective general partners. Mr. Ortale
disclaims beneficial ownership of the shares and warrants held by these
entities except to the extent of his pecuniary interest therein. Includes
4,600 shares held by the John Ryan Tyrell Trust, of which Mr. Ortale is
trustee.
(3) Represents 1,980,000 shares that are held by Richland Ventures, L.P. and
1,800,000 shares that are held by Richland Ventures II, L.P. The address of
the shareholder is 200 31st Avenue North, Suite 200, Nashville, Tennessee
37203-1205.
(4) All of these shares and warrants and options for the purchase of shares are
held by Massey Burch Venture Fund I, L.P. Mr. Johnston is a general partner
of MB Partners I, L.P., its general partner. Mr. Johnston disclaims
beneficial ownership of the shares and warrants and options for the purchase
of shares held by Massey Burch Venture Fund I, L.P. except to the extent of
his pecuniary interest therein. The address of the shareholder is One Burton
Hills Boulevard, Nashville, Tennessee 37215.
(footnotes continued on next page)
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(footnotes continued from previous page)
(5) Represents 765,000 shares that are held by Blue Chip Capital Fund II Limited
Partnership and 135,000 shares that are held by Miami Valley Venture Fund,
L.P. The address of the shareholders is 1100 Chiquita Center, 250 East 5th
Street, Cincinnati, Ohio 45202.
(6) Represents 765,000 shares that are held by Blue Chip Capital Fund II Limited
Partnership, 135,000 shares that are held by Miami Valley Venture Fund, L.P.
and warrants for the purchase of 17,901 shares of common stock held by these
entities. Mr. Wyant is a manager of their general partner and special
limited partner, respectively. Mr. Wyant disclaims beneficial ownership of
the shares and warrants held by these entities except to the extent of his
pecuniary interest therein.
(7) Held as of February 28, 2000, pursuant to a letter from FMR dated February
29, 2000. FMR has sole dispositive power over all of the shares and sole
voting power over none of the shares. The address of the shareholder is 82
Devonshire Street, Boston, Massachusetts 02109.
(8) Includes 90,000 shares held by the Gary R. Haynes 1994 Charitable Remainder
Unitrust, of which Mr. Haynes is trustee. Includes 9,000 shares held by
Joanne Haynes, Mr. Haynes' wife.
(9) Does not include the following options which are not exercisable within
60 days and become immediately vested and exercisable upon the merger with
DoubleClick: Mr. Wright - 37,917; Mr. Spangenberg - 35,000; Ms.
Russo - 32,083; Ms. Lazaros - 32,083.
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SELECTED FINANCIAL DATA OF @PLAN
The selected statement of operations data presented below for each of the
years in the three-year period ended December 31, 1999, and the selected balance
sheet data as of December 31, 1998 and 1999, are derived from @plan's financial
statements that have been audited by Arthur Andersen, LLP, @plan's independent
public accountants, and are included elsewhere in this proxy
statement/prospectus. The selected statement of operations data presented below
for the period of @plan's inception on May 29, 1996 to December 31, 1996, and
the selected balance sheet data as of December 31, 1996 and 1997, are derived
from @plan's financial statements that have been audited by Arthur Andersen,
LLP, and are not included in this proxy statement/prospectus. The selected
statement of operations data for the nine months ended September 30, 1999 and
2000, and the selected balance sheet data as of September 30, 2000 are derived
from @plan's unaudited financial statements included elsewhere in this proxy
statement/prospectus. These unaudited financial statements have been prepared on
the same basis as @plan's audited financial statements and, in @plan's opinion,
include all material adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the unaudited financial information.
You should read the following selected financial information in conjunction with
@plan's financial statements and the notes to those statements and 'Management's
Discussion and Analysis of Financial Condition and Results of Operations of
@plan' located elsewhere in this proxy statement/prospectus.
<TABLE>
<CAPTION>
PERIOD FROM
MAY 29, 1996 NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, --------------------------------------- -------------------------
1996 1997 1998 1999 1999 2000
---- ---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................ $ -- $ 422,401 $ 3,108,356 $ 7,355,773 $ 4,970,959 $ 9,758,614
Costs and expenses:
Product costs..................... 487,239 1,744,366 2,360,042 4,657,281 2,810,575 7,602,961
Selling and marketing............. -- 819,043 1,713,080 3,219,439 2,137,425 4,517,158
General and administrative........ 190,766 753,299 1,057,280 2,110,922 1,379,091 2,460,614
Non-cash compensation expense..... -- -- 27,418 505,098 505,098 --
--------- ----------- ----------- ----------- ----------- -----------
Total costs and expenses......... 678,005 3,316,708 5,157,820 10,492,740 6,832,189 14,580,733
--------- ----------- ----------- ----------- ----------- -----------
Loss from operations................ (678,005) (2,894,307) (2,049,464) (3,136,967) (1,861,230) (4,822,119)
Interest income..................... 17,367 80,368 191,804 1,116,453 658,048 1,489,543
--------- ----------- ----------- ----------- ----------- -----------
Net loss before income taxes........ (660,638) (2,813,939) (1,857,660) (2,020,514) (1,203,182) (3,332,576)
Income tax provision................ -- -- 13,219 64,300 54,300 52,464
--------- ----------- ----------- ----------- ----------- -----------
Net loss............................ $(660,638) $(2,813,939) $(1,870,879) $(2,084,814) $(1,257,482) $(3,385,040)
--------- ----------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- ----------- -----------
Basic and diluted loss per share.... $ (0.73) $ (3.13) $ (2.07) $ (0.48) $ (0.44) $ (0.30)
--------- ----------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- ----------- -----------
Weighted average shares
outstanding....................... 900,000 900,000 901,993 7,146,699 5,808,580 11,257,770
--------- ----------- ----------- ----------- ----------- -----------
--------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------------------- SEPTEMBER 30,
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........................ $1,608,370 $ 832,338 $ 3,682,576 $34,817,991 $31,371,373
Working capital.................................. 1,511,997 726,217 3,716,071 33,559,911 30,667,493
Total assets..................................... 1,625,616 1,559,175 6,026,481 39,122,353 36,720,290
Mandatory redeemable convertible preferred
stock.......................................... 2,189,097 4,443,811 9,582,802 -- --
Shareholders' equity (deficit)................... (660,637) (3,474,576) (5,310,037) 34,832,651 31,757,298
</TABLE>
75
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF @PLAN
You should read the following discussion in conjunction with @plan's
financial statements and the notes to those statements appearing elsewhere in
this proxy statement/prospectus.
OVERVIEW
@plan was founded in May 1996. During the period from May 1996 to December
31, 1996, its inception period, @plan had no revenues and was primarily engaged
in the development and planning of its software and survey research
infrastructures. In June 1997, @plan introduced its first product system, the
@plan Gutenberg Advertising System. Since 1997, subscribers to this system have
included Internet advertisers, advertising agencies and Web publishers and, to a
lesser extent, online retailers and consumer brand marketers. During 1997, @plan
generated revenues of approximately $422,000, and continued to build its sales
and operations staff. During 1998, its first full year of sales, @plan continued
to grow its client subscriber base and generated revenues of $3.1 million.
Despite its growth in revenues, @plan incurred operating losses for the year, as
its focus continued to be on expanding its client and user bases, product
development and the hiring of additional sales, client service and operations
personnel. During 1998, @plan opened a satellite office in San Francisco,
California to service its existing West Coast clients and to expand its client
base in this market. In December 1998, @plan introduced the @plan Kepler
E-Business System specifically designed for online retailers and consumer brand
marketers. In March 2000, @plan launched its first highly targeted vertical
market research system, the Darwin E-Retail System which focuses on the
automotive, travel and merchandising e-commerce sector.
@plan derives all of its revenues from the sale of subscriptions to its
systems. The subscription contracts are generally non-cancelable for a period of
one year and most automatically renew unless @plan receives notice of
termination from the client prior to the anniversary date. Clients typically pay
contract fees on an annual, quarterly or monthly basis which are recorded as
deferred revenue until the revenue is recognized. Revenue is recognized on a
straight line basis over the non-cancelable contract period, generally 12
months. Upon renewal, many of the subscription rates increase automatically in
accordance with contract provisions. These automatic increases are generally
higher in the first two renewal years than in subsequent renewal years where the
rate adjustment is based on increases in the Consumer Price Index, or CPI. @plan
has experienced a contract renewal rate in excess of 90% from inception through
September 30, 2000. The renewal rate is not necessarily indicative of the rate
of future retention of @plan's revenue base.
One measure of the volume of @plan's business is 'contract value' which
represents the annualized value of all contracts in effect at a given point in
time, without regard to the duration of contracts then outstanding and without
deducting revenue already recognized under these contracts. @plan's contract
value was $1.6 million at December 31, 1997, $4.6 million at December 31, 1998,
$10.4 million at December 31, 1999 and $15.4 million at September 30, 2000. As
of September 30, 2000, @plan has recognized $7.1 million of revenues of the
$15.4 million in contract value.
@plan's revenues, and as a result its operating margins, will fluctuate
depending on its product and customer mix. Annual subscriptions to the @plan
Kepler E-Business System and the @plan Darwin E-Retail System are typically
priced higher than annual subscriptions to the @plan Gutenberg Advertising
System. Moreover, annual subscription pricing and renewal pricing are often
negotiated and may vary based on the volume of subscriptions being sold to the
client. Variations in product or client mix could cause @plan's revenues and
operating results to fluctuate on a quarterly or annual basis.
Product costs consist primarily of amounts paid to The Gallup Organization
for quarterly collection of data used in @plan's market research systems. From
time to time @plan will engage Gallup on a case-by-case basis to collect
additional data. In the past, these additional engagements have caused @plan's
data collection costs to fluctuate from quarter to quarter, and it expects
quarterly data collection costs to continue to fluctuate as it plans to continue
to use Gallup for additional data collection. Product costs will also increase
during the remainder of 2000 and in future periods as @plan continues to develop
76
<PAGE>
additional highly targeted vertical market research systems. @plan's second
vertical system, the Emerson System, is scheduled for release at the beginning
of the fourth quarter of 2000.
Also included in product costs are software development costs which consist
primarily of the amortization of capitalized software development costs and, to
a lesser extent, other non-capitalized technology expenses such as Web site
maintenance. Software development costs represent direct expenses incurred to
improve or enhance @plan's systems, including increasing access speeds,
designing new user interfaces and developing new system modules. As of
September 30, 2000, @plan had approximately $461,000 in capitalized software
development costs which will be amortized and expensed as product costs over the
next one to three years. See note 2 of the notes to @plan's financial statements
for an explanation of the accounting for @plan's software development costs.
@plan has incurred significant losses since inception and as of
September 30, 2000, @plan had an accumulated deficit of $12.1 million. @plan's
net losses and accumulated deficit resulted from its lack of substantial
revenues and the significant costs incurred in the development of its systems
and in the establishment of its operations infrastructure. Additionally, @plan's
historical net losses and accumulated deficit were increased by a $1.3 million
non-cash preferred stock dividend in connection with the beneficial conversion
feature associated with warrants issued to the holders of its preferred stock
upon the consummation of its initial public offering. @plan intends to invest in
the development of new products, the enhancement of its current systems and in
the expansion of its sales force. As a result, @plan expects to incur additional
losses at least through December 31, 2000.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 2000
Revenues. Total revenues increased 96% from $5.0 million for the nine months
ended September 30, 1999 to $9.8 million for the nine months ended
September 30, 2000. The increase in revenues resulted principally from an
increase of $3.3 million in recurring revenues from the retention of existing
clients. These renewals reflect higher subscription rates than those in place
during the initial term of these contracts, in accordance with contract
provisions. Additionally, @plan experienced increased revenues of $1.5 million
from subscription sales to new clients, including revenues from its @plan Kepler
E-Business System launched in December 1998. During the quarter, @plan had
minimal revenues from its Darwin E-Retail system, as it was not launched until
March 2000.
Product Costs. Product costs consist primarily of amounts paid to Gallup for
quarterly collection of data used in @plan's market research systems and
software development costs. Product costs increased 171% from $2.8 million for
the nine months ended September 30, 1999 to $7.6 million for the nine months
ended September 30, 2000. This increase was due primarily to an increase of
$2.9 million in additional data collection costs and software development costs
associated with the introduction of @plan's Darwin E-Retail system. In addition,
@plan incurred costs of $1.3 million in connection with the Emerson System, its
second vertical target market planning system. Consistent with its strategy,
@plan is currently developing additional highly targeted vertical market
research systems. As a result, it anticipates continuing to incur increased data
collection and software costs during the remainder of 2000 and in future
periods.
Selling and Marketing. Selling and marketing costs consist primarily of the
personnel expenses associated with the sale and service of @plan's systems,
including commissions, public relations costs and marketing expenses. Selling
and marketing costs increased 111% from $2.1 million for the nine months ended
September 30, 1999 to $4.5 million for the nine months ended September 30, 2000.
This increase was due largely to the expansion of @plan's sales force and client
service team, commissions associated with increased sales, and to a lesser
extent, company branding initiatives. Selling and marketing costs will increase
as @plan continues to expand its sales force and introduce new products.
General and Administrative. General and administrative expenses consist
primarily of salaries and related costs for @plan's administrative, financial
and information technology personnel, professional fees, occupancy costs and
general office expenses. General and administrative expenses increased 78% from
$1.4 for the nine months ended September 30, 1999 as compared to $2.5 million
for the nine months ended September 30, 2000. This increase was primarily due to
the increase in personnel needed
77
<PAGE>
to support @plan's expanding operations and related costs as well as costs
related to being a public company including directors' and officers' liability
insurance. @plan anticipates hiring additional personnel and expects general and
administrative expenses will increase in future periods.
Interest income. Interest income consists of interest on @plan's cash and
cash equivalents. Interest income was approximately $658,000 for the nine months
ended September 30, 1999 as compared to $1.5 million for the nine months ended
September 30, 2000. The increase in interest income was primarily attributable
to the higher cash balances during the nine months ended September 30, 2000 as a
result of net proceeds from @plan's initial public offering of common stock in
May 1999.
Net loss. @plan's net loss increased 169% from $1.3 million for the nine
months ended September 30, 1999 to $3.4 million for the nine months ended
September 30, 2000. This increase was primarily attributable to an increase of
$4.2 million in products costs incurred during the nine months ended
September 30, 2000 in connection with the development of its vertical systems.
Loss per share. The loss per share amount for the nine months ended
September 30, 2000 was $0.30. Included in the loss per share amount for the nine
months ended September 30, 1999 of $0.44, is a $1.3 million non-cash preferred
stock dividend in connection with the beneficial conversion feature associated
with warrants issued to the holders of @plan's preferred stock upon the
consummation of its initial public offering. Excluding the effect of this
charge, the loss per share for the nine months ended September 30, 1999 was
$0.22.
YEAR ENDED DECEMBER 31, 1998 AND DECEMBER 31, 1999
Revenues. Total revenues increased 137% from $3.1 million in 1998 to
$7.4 million in 1999. The increase in revenues resulted principally from an
increase of $2.8 million in recurring revenues from the retention of existing
clients. Additionally, @plan experienced increased growth of $1.5 million in its
subscription sales to new clients, including revenues from its @plan Kepler
E-Business System launched in December 1998.
Product Costs. Product costs consist primarily of amounts paid to Gallup for
quarterly collection of data used in @plan's market research systems and
software development costs. Product costs increased 97% from $2.4 million in
1998 to $4.7 million in 1999. This increase was due primarily to an increase of
$1.7 million in additional data collection costs and an increase of
approximately $604,000 in software development costs associated primarily with
the introduction of the @plan Kepler E-Business system and the development of
@plan's first highly targeted vertical market research system focusing on the
automotive, travel and merchandising e-commerce sector system. @plan's strategy
includes the continued development and introduction of new products. As a
result, @plan anticipates incurring increased data collection and software costs
during 2000 and in future periods as it continues to develop additional
products.
Selling and Marketing. Selling and marketing costs consist primarily of
personnel expenses associated with the sale and service of @plan's systems,
including commissions, public relations costs and, to a lesser extent, marketing
expenses. Selling and marketing costs increased 88% from $1.7 million in 1998 to
$3.2 million in 1999. This increase was due largely to the expansion of @plan's
sales force and client service team and commissions associated with increased
sales. Selling and marketing costs will increase as @plan continues to expand
its sales force and introduce new products.
General and Administrative. General and administrative expenses consist
primarily of salaries and related costs for @plan's administrative, financial
and information technology personnel, professional fees, occupancy costs and
general office expenses. General and administrative expenses increased 95% from
$1.1 million in 1998 to $2.1 million in 1999. This increase was primarily due to
the increase in personnel needed to support @plan's expanding operations and
related costs and the additional costs related to being a public company,
including directors' and officers' liability insurance, investor relations
programs and professional services fees. Accordingly, general and administrative
expenses will increase in future periods.
Non-cash compensation expense. During the first quarter of 1999, @plan
issued 47,340 options to its employees. These options had an exercise price that
was $10.67 less per share than the fair market value of @plan common stock on
the date of grant. The options fully vested on the date of the initial public
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<PAGE>
offering. In accordance with the Accounting Principles Board Opinion No. 25,
'Accounting for Stock Issued to Employees,' @plan recognized compensation
expense of approximately $505,000 during 1999. See note 6 of Notes to Financial
Statements.
Interest income. Interest income consists of interest earned on cash and
cash equivalents. Interest income was approximately $192,000 in 1998 as compared
to $1.1 million in 1999. The increase in interest income was primarily
attributable to the higher cash balances during 1999 as a result of net proceeds
from the sale of @plan common stock in its initial public offering in May 1999.
YEARS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1998
Revenues. Total revenues increased to $3.1 million in 1998 from
approximately $422,000 in 1997. The growth in revenues during 1998 resulted
principally from a $2.2 million increase in subscription sales for the @plan
Gutenberg Advertising System during @plan's first full year of sales efforts, as
well as an approximate $455,000 increase in recurring revenues from the
retention of existing clients. @plan had nominal revenues from subscription
sales of the @plan Kepler E-Business System in 1998 as it was not introduced
until December 1998.
Product Costs. Product costs increased to $2.4 million in 1998 from
$1.7 million in 1997 due primarily to ongoing data collection costs associated
with the @plan Gutenberg Advertising System and additional data collection costs
associated with the December 1998 launch of the @plan Kepler E-business System.
Selling and Marketing. Selling and marketing costs increased to
$1.7 million in 1998 from approximately $819,000 in 1997. The increase was due
largely to the expansion of @plan's sales force and client service team and
commissions associated with increased sales.
General and Administrative Expenses. General and administrative expenses
were approximately $753,000 in 1997 and $1.1 million in 1998. The increase was
primarily attributable to the increase in staffing levels to manage and support
@plan's expanding operations.
Interest Income. Interest income was approximately $80,000 in 1997 and
approximately $192,000 in 1998. The increase in 1998 was primarily due to a
higher investment balance as a result of net proceeds of $5.1 million from
@plan's sale of preferred stock in 1998.
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<PAGE>
SELECTED UNAUDITED QUARTERLY OPERATING RESULTS
The following tables set forth selected unaudited statements of operations
data for the eleven quarters ended September 30, 2000, both in absolute dollars
and as a percentage of total revenues. The information for each quarter has been
prepared on substantially the same basis as the audited statements included in
other parts of this filing and, in @plan's opinion, includes all adjustments,
consisting of only normal recurring adjustments, necessary for a fair
presentation of the results of operations for these periods. You should read
this information in conjunction with @plan's financial statements and the notes
to those statements included elsewhere in this proxy statement/prospectus. The
operating results for any quarter are not necessarily indicative of the results
to be expected in the future.
<TABLE>
<CAPTION>
QUARTER ENDED
(UNAUDITED)
--------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30,
1998 1998 1998 1998 1999 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Revenues............. $ 469,168 $ 633,281 $ 899,026 $1,106,881 $1,337,122 $1,623,996
Costs and expenses:
Product costs.... 407,649 671,153 572,010 709,230 740,480 805,286
Selling and
marketing...... 294,811 420,265 483,496 514,508 539,160 699,416
General and
administrative... 181,915 189,675 345,345 340,345 402,750 418,029
Non-cash
compensation
expense........ -- -- -- 27,418 30,060 475,038
---------- ---------- ---------- ---------- ---------- ----------
Total costs
and
expenses... 884,375 1,281,093 1,400,851 1,591,501 1,712,450 2,397,769
---------- ---------- ---------- ---------- ---------- ----------
Loss from
operations......... (415,207) (647,812) (501,825) (484,620) (375,328) (773,773)
---------- ---------- ---------- ---------- ---------- ----------
Interest Income...... 52,710 45,709 47,198 46,187 36,730 185,978
---------- ---------- ---------- ---------- ---------- ----------
Net loss before
taxes.............. (362,497) (602,103) (454,627) (438,433) (338,598) (587,795)
Income tax
provision.......... 4,921 -- -- 8,298 3,300 41,000
---------- ---------- ---------- ---------- ---------- ----------
Net loss............. $ (367,418) $ (602,103) $ (454,627) $ (446,731) $ (341,898) $ (628,795)
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
PERCENTAGE OF REVENUES
---------------------------------------------------------------------
Revenues............. 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Costs and expenses:
Product costs.... 86.9 106.0 63.6 64.1 55.4 49.6
Selling and
marketing...... 62.8 66.3 53.8 46.5 40.3 43.1
General and
administrative... 38.8 30.0 38.4 30.7 30.1 25.7
Non-cash
compensation
expense........ -- -- -- 2.5 2.2 29.3
---------- ---------- ---------- ---------- ---------- ----------
Total costs
and
expenses... 188.5 202.3 155.8 143.8 128.0 147.7
---------- ---------- ---------- ---------- ---------- ----------
Loss from
operations......... (88.5) (102.3) (55.8) (43.8) (28.0) (47.7)
---------- ---------- ---------- ---------- ---------- ----------
Interest income...... 11.2 7.2 5.2 4.2 2.7 11.5
---------- ---------- ---------- ---------- ---------- ----------
Net loss before
taxes.............. (77.3) (95.1) (50.6) (39.6) (25.3) (36.2)
Income tax
provision.......... 1.0 -- -- 0.8 0.2 2.5
---------- ---------- ---------- ---------- ---------- ----------
Net loss............. (78.3)% (95.1)% (50.6)% (40.4)% (25.5)% (38.7)%
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
80
<PAGE>
<TABLE>
<CAPTION>
QUARTER ENDED
(UNAUDITED)
------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1999 1999 2000 2000 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues...................... $2,009,841 $2,384,814 $ 2,835,298 $ 3,310,712 $ 3,612,604
Costs and expenses:
Product costs............. 1,264,809 1,846,706 2,131,675 2,588,884 2,882,402
Selling and marketing..... 898,849 1,082,014 1,341,068 1,734,847 1,441,242
General and
administrative.......... 558,312 731,831 782,583 752,528 925,503
Non-cash compensation
expense................. -- -- -- -- --
---------- ---------- ----------- ----------- -----------
Total costs and
expenses............ 2,721,970 3,660,551 4,255,326 5,076,259 5,249,147
---------- ---------- ----------- ----------- -----------
Loss from operations.......... (712,129) (1,275,737) (1,420,028) (1,765,547) (1,636,543)
Interest Income............... 435,340 458,405 478,777 500,328 510,438
---------- ---------- ----------- ----------- -----------
Net loss before taxes......... (276,789) (817,332) (941,251) (1,265,219) (1,126,105)
Income tax provision.......... 10,000 10,000 18,624 27,813 6,027
---------- ---------- ----------- ----------- -----------
Net loss...................... $ (286,789) $ (827,332) $ (959,875) $(1,293,032) $(1,132,132)
---------- ---------- ----------- ----------- -----------
---------- ---------- ----------- ----------- -----------
<CAPTION>
PERCENTAGE OF REVENUES
------------------------------------------------------------------------
Revenues...................... 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Costs and expenses:
Product costs............. 63.0 77.4 75.2 78.2 79.8
Selling and marketing..... 44.7 45.4 47.3 52.4 39.9
General and
administrative.......... 27.8 30.7 27.6 22.7 25.6
Non-cash compensation
expense................. -- -- -- -- --
---------- ---------- ----------- ----------- -----------
Total costs and
expenses............ 135.5 153.5 150.1 153.3 145.3
---------- ---------- ----------- ----------- -----------
Loss from operations.......... (35.5) (53.5) (50.1) (53.3) (45.3)
---------- ---------- ----------- ----------- -----------
Interest income............... 21.7 19.2 16.9 15.1 14.1
---------- ---------- ----------- ----------- -----------
Net loss before taxes......... (13.8) (34.3) (33.2) (38.2) (31.2)
Income tax provision.......... 0.5 0.4 0.7 0.9 0.1
---------- ---------- ----------- ----------- -----------
Net loss...................... (14.3)% (34.7)% (33.9)% (39.1)% (31.3)%
---------- ---------- ----------- ----------- -----------
---------- ---------- ----------- ----------- -----------
</TABLE>
FACTORS AFFECTING QUARTERLY OPERATING RESULTS
@plan's revenues increased during each quarter of 2000, 1999 and 1998.
Quarterly revenue increased 35% from the first quarter of 1998 to the second
quarter, 42% from the second quarter to the third quarter, 23% from the third to
the fourth quarter, 21% from the fourth quarter of 1998 to the first quarter of
1999, 21% from the first to the second quarter, 24% from the second to the third
quarter, 19% from the third quarter to the fourth quarter, 19% from the fourth
quarter of 1999 to the first quarter of 2000, 17% from the first to the second
quarter of 2000 and 9% from the second to the third quarter of 2000. These
increases were due to the growth in sales of subscriptions to the @plan
Gutenberg Advertising System, the effects of subscription renewals, which began
in the third quarter of 1998 and sales of the @plan Kepler E-Business System,
which was introduced in December 1998. These renewals reflect higher
subscription rates than those in place during the initial term of these
contracts, in accordance with contract provisions.
Operating costs and expenses increased 45% from the first quarter of 1998 to
the second quarter, 9% from the second quarter to the third quarter, 14% from
the third to the fourth quarter, 8% from the fourth quarter 1998 to the first
quarter 1999, 40% from the first to the second quarter, 14% from the second to
the third quarter, increased 34% from the third quarter to the fourth, 16% from
the fourth quarter of 1999 to the first quarter of 2000, 19% from the first to
the second quarter of 2000 and 3%
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<PAGE>
from the second to the third quarter of 2000. These increases were due primarily
to additions of sales and administrative personnel to sustain @plan's growth and
new product development costs. Operating costs and expenses in the second
quarter of 1999 were impacted by product development costs associated with
@plan's U.S. population data collection, which was included with the @plan
Kepler E-Business System beginning in the fourth quarter of 1999. Loss from
operations increased during the year due to the increased costs associated with
the development of additional products.
Interest income increased as a result of @plan's higher cash balance
associated with the sale of its common stock during the second quarter 1999.
@plan's operating results have varied on a quarterly basis and are expected
to fluctuate significantly in the future as a result of a variety of factors,
many of which are outside its control. Factors that may affect @plan's quarterly
operating results include:
acceptance of the Web as an advertising medium;
the development of the electronic commerce market;
acceptance of its products and services;
the amount and timing of operating costs and capital expenditures relating
to expansion of its business, including its planned development of more
detailed market research systems;
variations in product or client mix, as pricing may vary based on the
volume and type of subscription being sold to a client;
its ability to expand its customer base and retain current clients;
new competitors;
general economic conditions as well as economic conditions specific to the
Internet;
its ability to attract and retain qualified sales and other personnel;
technical difficulties or service interruptions; and
strategic pricing changes, marketing decisions or acquisitions.
@plan's limited operating history and the emerging nature of its business
make prediction of future revenues difficult. Its expense levels are based, in
part, on its expectations with regard to future revenues, and to a large extent
such expenses are fixed, particularly in the short term. @plan cannot assure you
that it will be able to predict its future revenue accurately and it may be
unable to adjust spending in a timely manner to compensate for any unexpected
revenue shortfall. Accordingly, any significant shortfall in its expectations
could cause significant declines in its quarterly operating results.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2000, @plan had $31.4 million in cash and cash
equivalents as compared to $34.7 million as of September 30, 1999. In May 1999,
@plan consummated its initial public offering by selling 2,500,000 shares of its
common stock at a price of $14.00 per share. Net proceeds from the initial
public offering, net of underwriting discounts and offering costs, were
$31.7 million. Prior to its initial public offering, @plan had financed its
operations primarily through the private placement of preferred stock. Net
proceeds from the sales of convertible preferred stock from inception through
September 30, 2000 have totaled $9.6 million.
Net cash used in operating activities was $2.8 million in 1997, $1.8 million
in 1998, approximately $100,000 in 1999 and $3.2 million for the nine months
ended September 30, 2000. Cash used in operating activities in each period was
primarily attributable to net operating losses and increases in accounts
receivable which were partially offset by increases in deferred revenue and
accrued expenses.
Deferred revenue increased from approximately $367,000 at December 31, 1997
to $1.1 million at December 31, 1998, to $2.5 million at December 31, 1999 and
to $2.6 million at September 30, 2000. Deferred revenue represents amounts
invoiced under contract prior to @plan's rendering of services to the client.
Unbilled accounts receivable increased from approximately $91,000 at
December 31, 1997 to approximately $245,000 at December 31, 1998, decreased to
approximately $181,000 at December 31,
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1999 and increased to approximately $421,000 at September 30, 2000. Unbilled
accounts receivable represents the value of services provided prior to
invoicing.
Net cash used in investing activities was approximately $214,000 in 1997,
$533,000 in 1998, $904,000 in 1999 and $523,000 for the nine months ended
September 30, 2000. Cash used in investing activities in each period was
primarily attributable to software development costs and purchases of property
and equipment.
Net cash provided by financing activities was $2.3 million in 1997,
$5.1 million in 1998, $32.1 million in 1999 and approximately $310,000 for the
nine months ended September 30, 2000. Cash provided by financing activities in
each period was primarily attributable to the proceeds from the sale of
preferred stock, net of issuance costs and the sale of common stock through the
initial public offering, net of issuance costs.
@plan believes that its current cash and cash equivalents, which includes
the proceeds from its initial public offering, will be sufficient to meet its
working capital and capital expenditure requirements through 2001. Thereafter,
@plan may be required to raise additional funds. If additional funds are raised
through the issuance of equity securities, its shareholders may experience
significant dilution. There can be no assurance that additional funding, if
needed, will be available on attractive terms, or at all. If financing is not
available when required or is not available on acceptable terms, @plan may be
unable to develop or enhance its products or services. The failure to raise
capital when needed could harm its business, operating results and financial
condition.
COMMITMENTS AND CONTINGENCIES
@plan has no material commitments other than its leases for its corporate
headquarters and its office in San Francisco and obligations under its agreement
with Gallup. @plan's agreement with Gallup provides it with initial baseline
data and quarterly tracking data collection. The agreement has a one-year term
with nine successive one-year renewals and is cancelable by @plan upon 90-days'
written notice prior to an anniversary date. The annual renewal provides for CPI
increases to the associated fees. During the third quarter of 1999 and the first
quarter of 2000, @plan entered into additional agreements with Gallup to provide
@plan with initial baseline data and quarterly tracking data collection for its
targeted vertical market research system. These agreements extend through August
2009 and September 2006, respectively, and are cancelable by @plan upon 90-days'
written notice prior to an anniversary date. @plan's strategy includes the
development and introduction of additional vertical systems and new products. As
@plan continues to develop additional products, it anticipates incurring
increased data collection through 2000 and in future periods.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ('SAB') No. 101, 'Revenue Recognition in Financial
Statements.' SAB No. 101 expresses the views of the Securities and Exchange
Commission staff in applying generally accepted accounting principles to certain
revenue recognition issues. In June 2000, the Securities and Exchange Commission
issued SAB No. 101B to defer the effective date of the implementation of SAB
No. 101 until the fourth quarter of fiscal 2000. Management is currently
evaluating the impact of adopting this SAB, but does not believe that this SAB
will have a material impact on its financial position or its results of
operations.
In June 1998, the Financial Accounting Standard Board issued Statement of
Financial Accounting Standards ('SFAS') No. 133, 'Accounting for Derivatives and
Hedging Activities.' The Statement establishes accounting and reporting
standards for derivative instruments (including certain derivative instruments
embedded in other contracts) and for hedging activities. SFAS No. 133 is
effective for all fiscal quarters beginning after June 15, 2000 (as amended by
SFAS No. 138) and will not require retroactive restatement of prior-period
financial statements. The Company believes that the adoption of these statements
will not have a significant impact on the Company's financial results.
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<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The carrying values of financial instruments including cash and cash
equivalents, accounts receivable, accounts payable and notes payable,
approximate fair value because of the short maturity of these instruments.
@plan's results of operations, financial position, and cash flows are not
materially affected by changes in the relative values of non-U.S. currencies to
the U.S. dollar. @plan does not use derivative financial instruments to limit
its foreign currency risk exposure.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
@plan's board of directors has selected Arthur Andersen LLP to serve as
independent auditors for the current fiscal year. Arthur Andersen LLP has served
as its independent auditors since November 11, 1998. On November 11, 1998, @plan
dismissed Kraft Bros, Esstman Patton & Harrell, PLLC as its independent
accountants. Kraft Bros' reports on the financial statements for the years ended
December 31, 1996 and 1997 did not contain any adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle. The decision to change independent accountants was
approved by @plan's board of directors. During the years ended December 31, 1996
and 1997 and through November 11, 1998 there were no reportable events, as
defined in regulations of the Securities and Exchange Commission, or
disagreements with Kraft Bros on any matters of accounting principles or
practices, financial statement disclosure or auditing scope or procedure. Prior
to retaining Arthur Andersen LLP, @plan had not consulted with Arthur Andersen
LLP regarding accounting principles.
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<PAGE>
COMPARISON OF STOCKHOLDERS' RIGHTS
@plan is a Tennessee corporation subject to the provisions of the Tennessee
Business Corporation Act, or the TBCA. DoubleClick is a Delaware corporation
subject to the provisions of the Delaware General Corporation Law, or the DGCL.
In the event that DoubleClick elects to pay the merger consideration in a
combination of cash and DoubleClick common stock, shareholders of @plan, upon
consummation of the merger, will become stockholders of DoubleClick, whose
rights will then be governed by the Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws of DoubleClick, and by the DGCL.
The following is a summary of the material differences in the rights of the
shareholders of @plan and the rights of the stockholders of DoubleClick and is
qualified in its entirety by reference to the governing law and the certificate
of incorporation or charter and bylaws of DoubleClick and @plan.
REQUIRED VOTE FOR AUTHORIZATION OF SPECIAL ACTIONS
The TBCA provides that the recommendation of a corporation's board of
directors and the affirmative vote of a majority of the outstanding shares of
common stock entitled to vote would generally be required to approve a merger,
share exchange, amendment to the charter or a transaction to sell, lease,
exchange or otherwise dispose of all or substantially all of a corporation's
assets other than in the regular course of business. In accordance with the
TBCA, submission by a corporation's board of directors of these types of
actions, may be conditioned on any basis, including, without limitation,
conditions regarding a supermajority voting requirement or that no more than a
predetermined number of shares indicate that they will seek dissenters' rights
if those rights are available.
The vote of a majority of the outstanding shares of @plan common stock is
required to amend the @plan charter. The @plan bylaws may be adopted, amended or
repealed by a majority of the outstanding shares of @plan common stock entitled
to vote or by a majority vote of the board of directors. However, the @plan
charter provides that the affirmative vote of two-thirds of the shares entitled
to vote at an election of directors is required to adopt an amendment to the
charter or bylaws that alters the composition or the rights and privileges of
the board of directors or the ability of the officers or directors to call a
special shareholders' meeting.
The DGCL generally provides that the recommendation of a corporation's board
of directors and an approval of the majority of the outstanding shares of a
corporation's common stock entitled to vote is generally required to affect a
merger or consolidation, to amend a certificate of the corporation in most
instances and to sell, lease or exchange all or substantially all of the
corporation's assets. An authorization by the DoubleClick board, followed by the
affirmative vote of a majority of the outstanding shares of DoubleClick stock,
is required for an amendment to DoubleClick's Amended and Restated Certificate
of Incorporation. DoubleClick's Amended and Restated Bylaws may be adopted,
amended or repealed by a majority of the votes cast by stockholders entitled to
vote or by a majority vote of the directors.
NUMBER OF DIRECTORS; REMOVAL OF DIRECTORS
The number of directors of @plan is determined by @plan's bylaws and is
presently six persons. The board of directors of @plan is divided into three
classes, each as nearly equal in number as possible, with one class being
elected annually to a three year term. A director may be removed for any reason
with the approval of the holders of a majority of the shares entitled to vote at
an election of directors.
The number of directors of DoubleClick is determined by the bylaws and is
presently eight persons. The board of directors of DoubleClick is divided into
three classes, each as nearly equal in number as possible, with one class being
elected annually to a three year term. A director may only be removed for cause
and only by the holders of more than two-thirds of the shares entitled to vote
at an election of directors.
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LIMITATION OF LIABILITY; INDEMNIFICATION
As permitted by Tennessee law, the @plan charter contains a provision that
eliminates the personal liability of directors to the corporation or to its
shareholders for damages for breaches of fiduciary duty. However, a director may
be personally liable where his acts or omissions:
are in breach of the director's duty of loyalty to @plan or its
shareholders;
were not in good faith or involved intentional misconduct or a knowing
violation of the law; or
involved transactions from which the director received an unlawful
distribution.
The @plan charter provides that the corporation will indemnify its
directors, officers, employees or agents for any liability incurred in their
official capacity to the maximum extent permissible under Tennessee law. Under
Tennessee law, a corporation may indemnify any person made, or threatened to be
made, a party to any action or proceeding (other than a shareholder derivative
suit) because he or she is or was a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or firm. In order to
be indemnified, the director, officer, employee or agent:
must have acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interest of the
corporation; and
with respect to a criminal proceeding, must not have reasonable cause
to believe that his or her conduct was unlawful.
In the case of shareholder derivative suits under Tennessee law, the
corporation cannot indemnify an individual where there is any claim, issue or
matter in which the individual has been found liable to the corporation.
Under the TBCA, a corporation must indemnify a director or officer who
successfully defends himself or herself in a proceeding to which he or she was a
party because of his or her position as a director or officer against expenses
actually and reasonably incurred by the person. Expenses incurred by an officer
or director in defending any civil or criminal proceeding may be paid by the
corporation in advance of the final disposition of the proceeding upon:
receipt of an undertaking by or on behalf of the director or officer to
repay the amount if it shall ultimately be determined that he or she is
not entitled to be indemnified by the corporation;
a written affirmation of the director's or officer's good faith belief
that the director or officer has acted in good faith, reasonably
believes the director's or officer's conduct was in the best interest
of the corporation and had no reasonable cause to believe that the
director's or officer's conduct was unlawful; and
a determination is made that facts then known to those making the
determination would not preclude indemnification under the TBCA.
The indemnification and expense advancement provisions under Tennessee law
described above are not exclusive of other rights of indemnification and
advancement that a director or officer may be granted by a corporation in its
bylaws or by a vote of shareholders or disinterested directors or by an
agreement.
As permitted by Delaware law, DoubleClick's Amended and Restated Certificate
of Incorporation contains a provision that eliminates the personal liability of
directors to the corporation or to its shareholders for damages for breaches of
fiduciary duty, except where the director's acts or omissions:
were in breach of the director's duty of loyalty to DoubleClick or its
stockholders;
were not in good faith or involved intentional misconduct or a knowing
violation of the law;
resulted in a violation of a statute prohibiting certain dividend
payments or stock purchases or redemptions; or
involved transactions from which the director derived an improper
personal benefit.
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<PAGE>
DoubleClick's Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws provide that it will indemnify its directors, officers,
employees or agents for any liability incurred in their official capacity to the
maximum extent permissible under Delaware law. Under Delaware law, a corporation
may indemnify any person made or threatened to be made a party to any action or
proceeding (other than shareholder derivative suits) because he or she is or was
a director, officer, employee or agent of the corporation or is or was serving
at the request of the corporation, as a director, officer, employee or agent of
another corporation or firm. In order to be indemnified, the director, officer,
employee or agent
must act in good faith and in a manner he or she reasonably believed to
be in, and not opposed to, the best interest of the corporation, and
in respect to a criminal proceeding, must have no reasonable cause to
believe that his or her conduct was unlawful.
In the case of stockholder derivative suits under Delaware law, the
corporation may also indemnify if the director, officer, employee or agent acted
in good faith and in a manner the director reasonably believed to be in, and not
opposed to, the best interest of the corporation. Unless a court finds that an
individual is fairly and reasonably entitled to indemnity, the corporation
cannot indemnify an individual in stockholder derivative suits where there is
any claim, issue or matter in which the individual has been found liable to the
corporation.
Under the DGCL, a corporation must indemnify a director or officer who
successfully defends himself or herself in a proceeding to which he or she was a
party because of his or her position as a director or officer for expenses
actually or reasonably incurred by the person. Expenses incurred by an officer
or director in defending any civil or criminal proceeding may be paid by the
corporation in advance of the final disposition of the proceeding upon receipt
of an undertaking by or on behalf of the director or officer to repay the amount
if it is ultimately determined that he or she is not entitled to be indemnified
by the corporation. The indemnification and expense advancement provisions under
Delaware law described above are not exclusive of other rights of
indemnification and advancement that a director or officer may be granted by a
corporation in its bylaws or by a vote of shareholders or disinterested
directors or by an agreement.
ANNUAL MEETING OF STOCKHOLDERS; SPECIAL MEETINGS OF STOCKHOLDERS
The annual meeting of @plan shareholders must be held on a date and at a
place fixed by the @plan board of directors. A special shareholders' meeting may
be called, for any purpose, by a majority of the @plan board of directors or the
chairman of the board. The special shareholders' meeting may be held at the
place, on the date and at the time that the board determines. @plan shareholders
do not have the right to call a special shareholders' meeting.
The annual meeting of DoubleClick stockholders must be held on a date and at
a place fixed by the DoubleClick board of directors. A special stockholders'
meeting may be called at any time by DoubleClick's president and must be called
by its president or Secretary at the request of two-thirds of the board of
directors. DoubleClick stockholders do not have the right to call a special
stockholders' meeting.
STOCKHOLDER INSPECTION RIGHTS AND STOCKHOLDER LISTS
Under the TBCA, any @plan shareholder is entitled to inspect and copy the
minutes of shareholder meetings, the charter, the bylaws, annual reports and
other records of the corporation during regular business hours at the
corporation's principal office. Any inspection and copying is permitted if the
shareholder gives the corporation timely written notice of his or her demand and
if the demand is made in good faith and for a proper purpose. In addition, the
demand must describe with reasonable particularity the shareholder's purpose for
inspecting and copying these types of records and documents.
Under the DGCL, any DoubleClick stockholder is entitled to inspect and copy
books and records, including the corporation's stock ledger, and a list of the
stockholders. These inspection and copying
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rights are permitted as long as the inspection is for a proper purpose and must
be accomplished during the usual hours of business.
STOCKHOLDER ACTION WITHOUT A MEETING
Under @plan's bylaws, action required or permitted by the TBCA to be taken
at a shareholders' meeting may not be taken without a meeting.
Similarly, DoubleClick's Amended and Restated Certificate of Incorporation
provides that its stockholders may act only at duly called annual or special
meetings of stockholders, not by written consent.
STOCKHOLDER PROPOSALS
An @plan shareholder wishing to bring business before the annual
shareholders' meeting must provide timely notice to @plan's Secretary at its
principal executive offices. The notice must be received not later than 120 days
prior to the first anniversary of the date that @plan's notice of the previous
year's annual meeting was provided to the shareholders. If there was no annual
meeting the previous year, or if the annual meeting has been changed to be more
than 30 days earlier or 60 days after that anniversary, then the shareholder's
notice must be received no more than 90 days before nor later than 60 days prior
to the date of such annual meeting or no later than ten days following the day
on which the corporation first made a public announcement of the meeting date.
The @plan shareholder's written notice must include:
the name and record address of the shareholder;
the number and class of shares of stock owned beneficially or of record
by the shareholder;
a representation that the shareholder is a record or beneficial owner
of at least one percent or $1,000 in market value of @plan stock
entitled to vote at the meeting, has held the stock for at least one
year and will continue to own the stock through the date of the
meeting;
a brief discussion of the business to be discussed as well as the
reasons why it should be discussed at the annual meeting;
disclosure of any financial interest that the shareholder has in the
subject matter of the proposal; and
a representation that the shareholder intends to appear in person or by
proxy at the shareholder's meeting to present the proposal.
A DoubleClick stockholder wishing to bring business before the annual
stockholders' meeting must provide timely notice to DoubleClick's Secretary at
its principal executive offices. To be timely the notice must be received
between 120 days and 150 days prior to the first anniversary of the date of the
proxy statement for the preceding year's annual meeting. If, however, the date
of the shareholder's meeting is more than 30 days before or more than 60 days
after such an anniversary date, or if no proxy statement was delivered to the
stockholders for the previous year's annual meeting, notice must be given
between 90 and 60 days of the annual meeting or no later than ten days following
the day on which DoubleClick first made a public announcement of the meeting
date.
The stockholder's written notice must include:
the name and record address of the stockholder;
the number of shares owned beneficially or of record by the
stockholder; and
a brief description of the business to be discussed and the reasons why
it should be discussed at the annual meeting.
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<PAGE>
EXPERTS
The audited financial statements of DoubleClick incorporated by reference in
this proxy statement/prospectus, except as they relate to NetGravity, Inc. as of
December 31, 1998 and for the
years ended December 31, 1998 and 1997, have been audited by
PricewaterhouseCoopers LLP, independent accountants, and, insofar as they relate
to NetGravity, Inc. as of December 31, 1998 and for the years ended
December 31, 1998 and 1997, have been audited by KPMG LLP, independent
accountants. Such financial statements have been so incorporated in reliance on
the reports of such independent accountants given on the authority of such firms
as experts in auditing and accounting.
The audited financial statements of @plan.inc as of December 31, 1999 and
1998 and for the three years in the period ended December 31, 1999, included in
this proxy statement/prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
LEGAL MATTERS
The validity of the shares of DoubleClick common stock offered by this proxy
statement/prospectus will be passed upon for DoubleClick by Brobeck, Phleger &
Harrison LLP, New York, New York. Attorneys of Brobeck, Phleger & Harrison LLP
own an aggregate of 4,162 shares of DoubleClick common stock. Certain legal
matters with respect to federal income tax consequences in connection with the
merger will be passed upon for @plan by Bass, Berry & Sims PLC, Nashville,
Tennessee.
WHERE YOU CAN FIND MORE INFORMATION
DoubleClick and @plan file reports, proxy statements and other information
with the Securities and Exchange Commission. Please call the Securities and
Exchange Commission at 1-800-SEC-0330 for further information on the public
reference rooms. You may read and copy this information at the following
locations of the Securities and Exchange Commission:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661-2511
</TABLE>
You may also obtain copies of this information by mail from the Public
Reference Section of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. The Securities and
Exchange Commission also maintains an Internet World Wide Web site that contains
reports, proxy statements and other information about issuers, including
DoubleClick and @plan, who file electronically with the Securities and Exchange
Commission. The address of that site is http://www.sec.gov. You can also inspect
reports, proxy statements and other information about DoubleClick and @plan at
the offices of the National Association of Securities Dealers, 1735 K Street,
N.W., Washington, D.C. 20006.
DoubleClick has filed a registration statement with the Securities and
Exchange Commission to register the @plan common stock to be issued to @plan
shareholders in the merger. This proxy statement/prospectus is a part of that
registration statement and constitutes a proxy statement of @plan for use at its
special shareholders' meeting.
As allowed by the Securities and Exchange Commission's rules, this proxy
statement/prospectus does not contain all of the information relating to
DoubleClick included in the registration statement or the exhibits to the
registration statement. Some of the important business and financial information
relating to DoubleClick that may be important in deciding how to vote is not
included in this proxy statement/prospectus, but rather is 'incorporated by
reference' to documents that have been previously filed by DoubleClick with the
Securities and Exchange Commission. The information incorporated by reference is
deemed to be a part of this proxy statement/prospectus, except for any
information superseded by information contained directly in this proxy
statement/prospectus. See 'Incorporation of Certain Documents by Reference.'
DoubleClick has supplied all information contained or incorporated by
reference in this proxy statement/prospectus relating to DoubleClick and Atlas
Acquisition Corp., and @plan has supplied all
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information contained in this proxy statement/prospectus relating to @plan.
Neither DoubleClick nor @plan shall have any responsibility relating to the
accuracy or completeness of information relating to the other or information
relating to NetCreations.
Stockholders can obtain any of the documents incorporated by reference
through DoubleClick or the Securities and Exchange Commission. Documents
incorporated by reference are available from DoubleClick without charge,
excluding all exhibits. Stockholders may obtain documents incorporated by
reference in this proxy statement/prospectus by requesting them orally or in
writing to the following addresses or by telephone:
DoubleClick Inc.
Investor Relations
450 West 33rd Street
New York, NY 10001
(212) 683-0001
IF YOU WOULD LIKE TO REQUEST DOCUMENTS, PLEASE DO SO BY [ ] [ ],
2001 IN ORDER TO RECEIVE THEM BEFORE THE SPECIAL SHAREHOLDERS' MEETING.
@PLAN SHAREHOLDERS SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS TO VOTE ON THE
AMENDED AND RESTATED MERGER AGREEMENT. NEITHER DOUBLECLICK NOR @PLAN HAS
AUTHORIZED ANYONE TO PROVIDE INFORMATION THAT IS DIFFERENT FROM WHAT IS
CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS. THIS PROXY STATEMENT/PROSPECTUS IS
DATED [ ] [ ], 2000. STOCKHOLDERS SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE AS OF ANY
OTHER DATE, AND NEITHER THE MAILING OF THIS PROXY STATEMENT/PROSPECTUS TO @PLAN
SHAREHOLDERS NOR THE ISSUANCE OF DOUBLECLICK COMMON STOCK IN THE MERGER SHALL
CREATE ANY IMPLICATION TO THE CONTRARY.
SHAREHOLDER PROPOSALS
If the merger is not consummated, pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, shareholders of @plan may present proper
proposals for inclusion in @plan's proxy statement and for consideration at the
next annual meeting of @plan's shareholders by submitting their proposals to
@plan in a timely manner. In order to be so included for the next annual
meeting, shareholder proposals must be received by @plan no later than
December 23, 2000, and must comply with the requirements of Rule 14a-8. In
addition, @plan's bylaws establish an advance notice procedure with regard to
certain matters, including shareholder proposals not included in @plan's proxy
statement, to be brought before an annual meeting of shareholders. In general,
notice must be received by @plan's Secretary not less than 120 days prior to the
date @plan's proxy statement was released to shareholders in connection with the
previous year's annual meeting and must contain specified information concerning
the matters to be brought before such meeting and concerning the shareholder
proposing such matters.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows DoubleClick to 'incorporate by
reference' the information DoubleClick files with it, which means that
DoubleClick can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part of
this proxy statement/prospectus, and later information filed with the Securities
and Exchange Commission will update and supersede this information. This proxy
statement/prospectus incorporates by reference the documents set forth below
that DoubleClick has previously filed with the Securities and Exchange
Commission. The documents contain important information about DoubleClick and
its finances.
We incorporate by reference DoubleClick's:
Annual report on Form 10-K for the year ended December 31, 1999;
Quarterly reports on Form 10-Q for the periods ended March 31, 2000,
June 30, 2000 and September 30, 2000;
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Current reports on Form 8-K filed on November 10, 1999 (as amended by
the Form 8-K/A filed on January 10, 2000), December 8, 1999 (as amended
by the Form 8-K/A filed on January 10, 2000), January 13, 2000 (as
amended by the Form 8-K/A filed on March 10, 2000), January 27, 2000,
February 16, 2000, March 17, 2000, June 26, 2000, August 10, 2000,
September 27, 2000, October 4, 2000 and November 20, 2000;
Definitive Proxy Statement on Schedule 14A, filed on April 27, 2000;
and
The description of DoubleClick common stock contained in DoubleClick's
registration statement on Form 8-A (File No. 000-23709) filed on
December 1, 1998, registering the DoubleClick common stock under
Section 12(g) of the Securities Exchange Act of 1934.
In addition, all of DoubleClick's filings with the Securities and Exchange
Commission after the date of this proxy statement/prospectus under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 shall be deemed
to be incorporated by reference until the @plan special shareholders' meeting.
Any statement contained in this proxy statement/prospectus or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this proxy statement/prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this proxy statement/prospectus.
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INDEX TO FINANCIAL STATEMENTS
OF @PLAN.INC
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................... F-2
Balance Sheets as of December 31, 1998, December 31, 1999
and September 30, 2000 (unaudited)........................ F-3
Statements of Operations for the years ended December 31,
1997, 1998 and 1999 and the nine months ended
September 30, 1999 (unaudited) and September 30, 2000
(unaudited)............................................... F-4
Statements of Shareholders' Equity (Deficit) for the years
ended December 31, 1997, 1998 and 1999 and the nine months
ended September 30, 2000 (unaudited)...................... F-5
Statements of Cash Flows for the years ended December 31,
1997, 1998 and 1999 and the nine months ended
September 30, 1999 (unaudited) and September 30, 2000
(unaudited)............................................... F-6
Notes to Financial Statements............................... F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of @plan.inc:
We have audited the accompanying balance sheets of @plan.inc (a Tennessee
corporation) as of December 31, 1999 and 1998, and the related statements of
operations, shareholders' equity (deficit) and cash flows for each of the three
years in the period ended December 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of @plan.inc as of December 31,
1999 and 1998, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
/s/ ARTHUR ANDERSEN LLP
New York, New York
February 3, 2000
F-2
<PAGE>
@PLAN.INC
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- SEPTEMBER 30,
1998 1999 2000
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents............................ $ 3,682,576 $ 34,817,991 $ 31,371,373
Accounts receivable, net of allowance of $80,000,
$164,000 and $387,200, respectively:
Billed........................................... 1,440,693 2,214,834 3,116,770
Unbilled......................................... 245,310 181,432 421,146
Other............................................ -- 159,837 --
Prepaid expenses..................................... 101,208 475,519 721,196
----------- ------------ ------------
Total current assets......................... 5,469,787 37,849,613 35,630,485
Property and equipment, net.......................... 117,641 260,372 293,029
Software development costs, net...................... 375,278 551,545 460,501
Other assets......................................... 63,775 460,823 336,275
----------- ------------ ------------
Total assets................................. $ 6,026,481 $ 39,122,353 $ 36,720,290
----------- ------------ ------------
----------- ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable..................................... $ 254,223 $ 881,041 $ 1,288,357
Accrued liabilities.................................. 375,411 956,447 1,034,244
Deferred revenue..................................... 1,124,082 2,452,214 2,640,391
----------- ------------ ------------
Total current liabilities.................... 1,753,716 4,289,702 4,962,992
Mandatory redeemable convertible preferred stock:
Series A, no par value, 500,000 shares
authorized: 448,000, no and no shares issued
and outstanding, respectively.................. 431,876 -- --
Series B, no par value, 2,250,000 shares
authorized: 2,016,000, no and no shares issued
and outstanding, respectively.................. 4,011,935 -- --
Series C, no par value, 1,725,667 shares
authorized: 1,725,667, no and no shares issued
and outstanding, respectively.................. 5,138,991 -- --
----------- ------------ ------------
Total mandatory redeemable convertible
preferred stock............................ 9,582,802 -- --
Shareholders' equity (deficit):
Preferred Stock, no par value, 5,524,333 and
10,000,000 shares authorized; no shares issued
and outstanding................................ -- -- --
Common stock, no par value, 50,000,000 shares
authorized; 907,200, 11,205,700 and 11,332,770
shares issued and outstanding, respectively.... 8,001 41,730,405 42,040,092
Additional paid-in capital....................... 27,418 1,855,511 1,855,511
Accumulated deficit.............................. (5,345,456) (8,753,265) (12,138,305)
----------- ------------ ------------
Total shareholders' equity (deficit)......... (5,310,037) 34,832,651 31,757,298
----------- ------------ ------------
Total liabilities and shareholders' equity
(deficit).................................. $ 6,026,481 $ 39,122,353 $ 36,720,290
----------- ------------ ------------
----------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
@PLAN.INC
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- ----------------------------------
1997 1998 1999 1999 2000
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues.................... $ 422,401 $ 3,108,356 $ 7,355,773 $ 4,970,959 $ 9,758,614
Costs and expenses:
Product costs........... 1,744,366 2,360,042 4,657,281 2,810,575 7,602,961
Selling and marketing... 819,043 1,713,080 3,219,439 2,137,425 4,517,158
General and
administrative........ 753,299 1,057,280 2,110,922 1,379,091 2,460,614
Non-cash compensation
expense............... -- 27,418 505,098 505,098 --
----------- ----------- ----------- ----------- -----------
Total costs and
expenses.............. 3,316,708 5,157,820 10,492,740 6,832,189 14,580,733
----------- ----------- ----------- ----------- -----------
Loss from operations........ (2,894,307) (2,049,464) (3,136,967) (1,861,230) (4,822,119)
Interest income............. 80,368 191,804 1,116,453 658,048 1,489,543
----------- ----------- ----------- ----------- -----------
Net loss before income
taxes................. (2,813,939) (1,857,660) (2,020,514) (1,203,182) (3,332,576)
Income tax provision........ -- 13,219 64,300 54,300 52,464
----------- ----------- ----------- ----------- -----------
Net loss................ $(2,813,939) $(1,870,879) $(2,084,814) $(1,257,482) $(3,385,040)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Basic and diluted loss per
share..................... $ (3.13) $ (2.07) $ (0.48) $ (0.44) $ (0.30)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Weighted average shares
outstanding............... 900,000 901,993 7,146,699 5,808,580 11,257,770
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
@PLAN.INC
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------------------ PAID-IN ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY (DEFICIT)
------ ------ ------- ------- ----------------
<S> <C> <C> <C> <C> <C>
Balances, December 31, 1996.... 900,000 $ 1 $ -- $ (660,638) $ (660,637)
Net loss....................... -- -- -- (2,813,939) (2,813,939)
---------- ----------- ---------- ------------ -----------
Balances, December 31, 1997.... 900,000 1 -- (3,474,577) (3,474,576)
Exercise of stock options...... 7,200 8,000 -- -- 8,000
Non-cash compensation related
to stock options granted to
non-employees................ -- -- 27,418 -- 27,418
Net loss....................... -- -- -- (1,870,879) (1,870,879)
---------- ----------- ---------- ------------ -----------
Balances, December 31, 1998.... 907,200 8,001 27,418 (5,345,456) (5,310,037)
Issuance of Common Stock from
initial public offering,
net.......................... 2,500,000 31,667,805 -- -- 31,667,805
Exercise of stock options...... 257,100 471,797 -- -- 471,797
Conversion of preferred
stock........................ 7,541,400 9,582,802 -- -- 9,582,802
Warrants....................... -- -- 1,322,995 (1,322,995) --
Non-cash compensation related
to stock options granted to
employees.................... -- -- 505,098 -- 505,098
Net loss....................... -- -- -- (2,084,814) (2,084,814)
---------- ----------- ---------- ------------ -----------
Balances, December 31, 1999.... 11,205,700 41,730,405 1,855,511 (8,753,265) 34,832,651
Exercise of stock options...... 127,070 309,687 -- -- 309,687
Net loss....................... -- -- -- (3,385,040) (3,385,040)
---------- ----------- ---------- ------------ -----------
Balances, September 30, 2000
(unaudited).................. 11,332,770 $42,040,092 $1,855,511 $(12,138,305) $31,757,298
---------- ----------- ---------- ------------ -----------
---------- ----------- ---------- ------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
@PLAN.INC
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- -------------------------
1997 1998 1999 1999 2000
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss.......................... $(2,813,939) $(1,870,879) $(2,084,814) $(1,257,482) $(3,385,040)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization..... 48,648 218,878 585,005 420,509 581,709
Provision for doubtful accounts... -- 80,000 145,000 120,000 230,000
Non cash charges.................. -- 27,418 505,098 505,098 --
Changes in operating assets and
liabilities:
Increase in accounts
receivable.................... (445,981) (1,320,023) (1,015,100) (777,275) (1,371,650)
Increase in prepaid expenses.... (37,055) (63,370) (374,311) (523,373) (85,840)
(Increase) decrease in other
assets........................ (61,289) 360 (397,048) (434,150) 124,548
(Decrease) increase in accounts
payable....................... (14,182) 171,248 626,818 456,095 407,316
Increase in accrued
liabilities................... 140,013 235,398 581,036 276,570 77,797
Increase in deferred revenue.... 366,953 757,130 1,328,132 1,066,939 188,177
----------- ----------- ----------- ----------- -----------
Net cash used in operating
activities.................. (2,816,832) (1,763,840) (100,184) (147,069) (3,232,983)
----------- ----------- ----------- ----------- -----------
Cash flows from investing
activities:
Purchases of equipment.......... (143,419) (74,327) (241,382) (107,262) (146,524)
Software development costs...... (70,495) (458,586) (662,621) (513,987) (376,798)
----------- ----------- ----------- ----------- -----------
Net cash used in investing
activities.................. (213,914) (532,913) (904,003) (621,249) (523,322)
----------- ----------- ----------- ----------- -----------
Cash flows from financing
activities:
Proceeds from issuance of common
stock, net.................... -- 8,000 32,139,602 31,767,759 309,687
Proceeds from issuance of
preferred stock, net.......... 2,254,714 5,138,991 -- -- --
----------- ----------- ----------- ----------- -----------
Net cash provided by financing
activities.................. 2,254,714 5,146,991 32,139,602 31,767,759 309,687
----------- ----------- ----------- ----------- -----------
Net change in cash and cash
equivalents..................... (776,032) 2,850,238 31,135,415 30,999,441 (3,446,618)
Cash and cash equivalents at
beginning of period............. 1,608,370 832,338 3,682,576 3,682,576 34,817,991
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end
of period....................... $ 832,338 $ 3,682,576 $34,817,991 $34,682,017 $31,371,373
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Supplemental information:
Cash paid for income taxes.... $ -- $ 4,921 $ 64,300 $ 54,300 $ 56,638
Warrants issued to preferred
shareholders................ $ -- $ -- $ 1,322,995 $ 1,322,995 $ --
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
@PLAN.INC
NOTES TO FINANCIAL STATEMENTS
1. GENERAL
@plan.inc (the 'Company') was incorporated in the State of Tennessee in May
1996. The Company is based in Stamford, Connecticut, and is a provider of target
market research planning systems for Internet advertisers, advertising agencies,
Web publishers, online retailers and consumer brand marketers.
2. SIGNIFICANT ACCOUNTING POLICIES
UNAUDITED INTERIM FINANCIAL INFORMATION
The financial information as of September 30, 2000 and for the nine months
ended September 30, 1999 and 2000 is unaudited, but includes all adjustments,
consisting only of normal recurring adjustments that we consider necessary for a
fair presentation of our financial position at September 30, 2000, and our
operations and cash flows for the nine months ended September 30, 1999 and 2000.
Operating results for the nine months ended September 30, 2000 are not
necessarily indicative of results that may be expected for the entire year.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission (the 'SEC') issued
Staff Accounting Bulletin ('SAB') No. 101, 'Revenue Recognition in Financial
Statements.' SAB No. 101 expresses the views of the SEC staff in applying
generally accepted accounting principles to certain revenue recognition issues.
In June 2000, the SEC issued SAB No. 101B to defer the effective date of the
implementation of SAB No. 101 until the fourth quarter of fiscal 2000.
Management is currently evaluating the impact of adopting this SAB, but does not
believe that this SAB will have a material impact on its financial position or
its results of operations.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ('SFAS') No. 133, 'Accounting for Derivatives and
Hedging Activities.' The Statement establishes accounting and reporting
standards for derivative instruments (including certain derivative instruments
embedded in other contracts) and for hedging activities. SFAS No. 133 is
effective for all fiscal quarters beginning after June 15, 2000 (as amended by
SFAS No. 137) and will not require retroactive restatement of prior-period
financial statements. The Company believes that the adoption of these statements
will not have a significant impact on the Company's financial results.
REVENUE RECOGNITION
The Company provides target market research planning systems to its clients
on a renewable subscription basis. Revenue is recognized ratably over the
contract period, which is generally twelve months. Clients are billed for
services based on terms of the contracts, which may not coincide with criteria
required for revenue recognition.
On the accompanying balance sheets, deferred revenue represents amounts
invoiced prior to rendering our services while unbilled receivables represents
the value of services rendered prior to being invoiced. Substantially all of the
deferred and unbilled revenue will be earned and billed, respectively, within
twelve months of the respective period ends.
Upon signing a contract, sales representatives become eligible for a
commission. These commissions are paid at the time of the contract signing. For
financial reporting purposes, commissions are capitalized as a component of
prepaid expenses and amortized over the lives of the related contracts.
F-7
<PAGE>
@PLAN.INC
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and all investments in
highly liquid instruments purchased with original maturities of three months or
less. Funds in excess of operating cash needs are maintained in a money market
fund, which may exceed the amount insured by the Federal Deposit Insurance
Corporation.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated depreciation and
amortization. Property and equipment consists of computer equipment, software,
furniture and fixtures and leasehold improvements. Computer equipment, software,
furniture and fixtures are depreciated using the straight-line method over their
useful lives that range from 3 to 5 years. Leasehold improvements are amortized
over the term of the lease.
SOFTWARE DEVELOPMENT COSTS
The Company capitalizes direct costs relating to computer software
development upon the establishment of technological feasibility. Until the
products reach technological feasibility, all costs related to development
efforts are expensed as a component of product costs. Software development
costs, subsequent to technological feasibility and prior to general release,
have been capitalized and are reported at the lower of unamortized cost or net
realizable value. Capitalized software development costs are amortized on a
straight-line basis for periods ranging from one to three years. As of
December 31, 1998 and 1999 and September 30, 2000, software development costs
are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- SEPTEMBER 30,
1998 1999 2000
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
Software development costs....................... $ 529,081 $1,191,702 $ 1,568,500
Less: Accumulated amortization................... (153,803) (640,157) (1,107,999)
--------- ---------- -----------
$ 375,278 $ 551,545 $ 460,501
--------- ---------- -----------
--------- ---------- -----------
</TABLE>
The Company periodically reviews software development costs and property and
equipment for any potential impairments. Undiscounted cash flows, future
operating results, trends or other relevant information are considered in
assessing whether the carrying value of our assets is recoverable. At
September 30, 2000, management does not believe that any of our assets are
impaired.
INCOME TAXES
The Company recognizes deferred tax assets and liabilities for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation granted to employees by
recognizing compensation expense for the difference between the estimated fair
value of the Company's stock at the date of grant and the exercise price of the
granted stock. Stock-based grants issued to non-employees are recorded at either
the fair value of the services provided or the fair value of the stock issued,
as determined using the Black-Scholes model.
F-8
<PAGE>
@PLAN.INC
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires us to make estimates and assumptions.
These estimates and assumptions affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. These assumptions also affect the reported amounts of
revenue and expenses during the reporting periods. Actual results could differ
from those estimates and assumptions.
CONCENTRATIONS OF RISK
The Company invests the majority of its cash balances in short-term, high
quality marketable securities. Accounts receivable balances are domestic and no
single client represents a significant credit risk.
The methodology for the collection of data, the generation of a sample
population to be surveyed and the collection of data from that sample population
for the Company's Web user database, U.S. population database and merchandising
vertical system are controlled and conducted by Gallup. If the agreements with
Gallup terminate for any reason, the Company will need to find another firm to
perform its research data collection services and this could harm the business
by delaying the Company's ability to update its database and introduce new
products.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of all cash and cash equivalents, accounts receivable
and accounts payable approximate fair value due to the short-term nature of
these accounts.
STOCK-SPLITS
The accompanying financial statements give retroactive effect to a 1.8 for 1
stock-split that was approved by the Board of Directors on March 10, 1999.
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------- SEPTEMBER 30,
1998 1999 2000
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
Computer equipment and software................... $ 211,999 $ 436,315 $ 567,352
Furniture and fixtures............................ 8,613 16,261 27,154
Leasehold improvements............................ 8,073 17,491 22,086
--------- --------- ---------
228,685 470,067 616,592
Less: Accumulated depreciation.................... (111,044) (209,695) (323,563)
--------- --------- ---------
$ 117,641 $ 260,372 $ 293,029
--------- --------- ---------
--------- --------- ---------
</TABLE>
4. BASIC AND DILUTED NET LOSS PER SHARE
Basic loss per share amounts are computed by dividing the net loss by the
weighted average number of shares of common stock outstanding during the period.
Diluted loss per share is computed by dividing the net loss by the weighted
average number of shares of common stock outstanding during the period plus the
effects of any potentially dilutive securities. In the accompanying statements
of operations, diluted loss per share does not include the effects of
potentially dilutive securities for all periods presented as they would have
been anti-dilutive in years in which a loss is reported.
F-9
<PAGE>
@PLAN.INC
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
The following summarizes the securities outstanding which are excluded from
the loss per share calculation as amounts would have an anti-dilutive effect.
Preferred Stock is reflected on an 'if-converted' basis.
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
--------------------------------- ---------------------
1997 1998 1999 1999 2000
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Series A preferred stock................ 806,400 806,400 -- -- --
Series B preferred stock................ 3,628,800 3,628,800 -- -- --
Series C preferred stock................ -- 3,106,200 -- -- --
Stock options........................... 1,506,600 1,805,400 2,213,540 1,891,040 2,245,164
Warrants................................ -- -- 200,000 200,000 200,000
--------- --------- --------- --------- ---------
Total............................... 5,941,800 9,346,800 2,413,540 2,091,040 2,445,164
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
The following tables summarize the calculation of basic and dilutive
earnings per share for the years ended December 31, 1997, 1998 and 1999 and the
nine months ended September 30, 1999 and 2000:
<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
--------------------------------------- -------------------------
1997 1998 1999 1999 2000
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net loss....................... $(2,813,939) $(1,870,879) $(2,084,814) $(1,257,482) $(3,385,040)
Less: preferred stock
dividends.................... -- -- (1,322,995) (1,322,995) --
----------- ----------- ----------- ----------- -----------
Loss available to common
shareholders................. $(2,813,939) $(1,870,879) $(3,407,809) $(2,580,477) $(3,385,040)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Weighted average shares
outstanding.................. 900,000 901,993 7,146,699 5,808,580 11,257,770
Basic and dilutive loss per
common share available to
common shareholders.......... $ (3.13) $ (2.07) $ (0.48) $ (0.44) $ (0.30)
</TABLE>
5. EQUITY TRANSACTIONS
In May 1999, the Company completed an initial public offering of its common
stock. The Company sold 2,500,000 shares of common stock at an initial offering
price of $14.00 per share resulting in proceeds of $31.7 million, net of
underwriting discounts and offering expenses.
In 1996 and 1997, the Company issued a total of 448,000 shares of Series A
preferred stock and 2,016,000 shares of Series B preferred stock at a purchase
price of $1.00 and $2.00 per share, respectively. In 1998, the Company issued
1,725,667 shares of Series C preferred stock at a purchase price of $3.00 per
share. Upon the closing of the initial public offering, all outstanding shares
of Series A, B and C preferred stock were converted into 806,400 shares,
3,628,800 shares and 3,106,200 shares of common stock, respectively.
Simultaneous with the closing of the initial public offering, a director and
an officer and all of the preferred shareholders received warrants to purchase
an aggregate of 200,000 shares of common stock. Of these warrants, warrants to
purchase 25,000 shares of common stock were granted to the director and to the
officer. The preferred shareholders, including the director and officer,
received a pro rata portion of the remaining 150,000 warrants. These warrants
are exercisable for seven years.
The Company accounted for these warrants at the time of issuance as follows:
For warrants issued to the officer and director, the Company applied
the provisions of Accounting Principles Board Opinion No. 25,
'Accounting for Stock Issued to Employees,' and recorded compensation
expense for the difference between the fair value of the
F-10
<PAGE>
@PLAN.INC
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Company's common stock at the time of grant, based on the initial
public offering price, and the exercise price of the warrant. As
these amounts were equivalent on the date of grant, the Company
did not record any compensation expense for these warrants.
For warrants issued to the holders of the Company's preferred stock,
the Company recorded the value of these warrants, as determined by
using the Black-Scholes model, as a dividend to these shareholders on
the date of grant. This dividend increased the accumulated deficit but
had no effect on reported net income (loss). The value of this dividend
was $1.3 million which was determined by using the Black-Scholes model
with the following assumptions:
risk free interest rate of 5.3%,
expected dividend yield of 0%,
expected life of 5.0 years, and
expected volatility of 0%.
6. STOCK OPTION PLANS
In 1996 the Company created the 1996 Stock Option Plan. This plan, as
amended, provides for stock option grants to employees, members of the board of
directors, the Company's consultants and other persons having a business
relationship with the Company. Under this plan, the option price as determined
by the board of directors cannot be less than 100% of the fair market value of
the Company's common stock, at grant, in the case of incentive stock options,
and not less than 50% of the fair market value of the Company's common stock, at
grant, in the case of non-qualified stock options. Exceptions exist under
certain conditions. No options will be exercisable more than ten years after the
date the option is granted. Options that the Company has granted under the plan
generally vest ratably over a four year period, beginning at the date of grant.
All unvested options immediately vested upon the initial public offering of the
Company's common stock. The Company's board of directors and shareholders
authorized a total of 1,980,000 shares of common stock for issuance under this
plan. No further awards of stock will be granted under the 1996 plan.
The Company's board of directors adopted the 1999 Stock Incentive Plan in
March 1999 and it was approved by the Company's shareholders in March 1999. The
purpose of the plan is to attract, retain and reward key employees, consultants
and non-employee directors. This plan allows flexibility in the award of stock
based incentive compensation to these people. The plan authorized up to 800,000
shares of common stock for issuance under the plan plus an annual increase to be
added on each anniversary date of the adoption of this plan equal to the lesser
of 400,000 shares, two percent of the outstanding shares of the Company's common
stock on that anniversary date or a number determined by the Company's board of
directors.
In October 1999, the Company's board of directors adopted the 1999 Stock
Option Plan for New Employees. The purpose of the plan is to attract persons not
previously employed by @plan and to offer equity interest in the company as an
inducement essential to the person's accepting employment. The plan authorized
up to 400,000 shares of common stock for issuance under the plan as
non-qualified stock options.
F-11
<PAGE>
@PLAN.INC
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 1997, 1998 and 1999 and September 30, 2000, the following
options had been granted under our plans and were outstanding:
<TABLE>
<CAPTION>
SEPTEMBER 30,
1997 1998 1999 2000
----------------- ----------------- ------------------ -----------------
WEIGHTED WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
------ ----- ------ ----- ------ ----- ------ -----
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of
period....................... 343,800 $0.94 1,506,600 $1.14 1,805,400 $ 1.43 2,213,540 $4.84
Granted........................ 1,162,800 1.20 349,200 2.91 755,240 11.72 334,666 8.45
Exercised...................... -- -- (7,200) 1.11 (257,100) 1.84 (127,070) 2.44
Forfeited...................... -- -- (43,200) 1.39 (90,000) 2.00 (175,972) 10.61
--------- --------- --------- ---------
Outstanding at end of period... 1,506,600 $1.14 1,805,400 $1.43 2,213,540 $ 4.84 2,245,164 $4.99
--------- --------- --------- ---------
--------- --------- --------- ---------
Options exercisable at end of
period....................... 505,399 $0.99 874,420 $1.20 1,548,248 $ 1.76 1,669,220 $3.24
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted average fair value of
options granted during
period....................... $0.38 $0.66 $ 7.54 $5.56
</TABLE>
The following table summarizes information about stock options outstanding
at September 30, 2000:
<TABLE>
<CAPTION>
WEIGHTED-
AVERAGE
OPTIONS REMAINING OPTIONS
OUTSTANDING AT CONTRACTUAL WEIGHTED- EXERCISABLE WEIGHTED-
RANGE OF SEPTEMBER 30, LIFE AVERAGE SEPTEMBER 30, AVERAGE
EXERCISE PRICES 2000 (YEARS) EXERCISE PRICE 2000 EXERCISE PRICE
--------------- ---- ------- -------------- ---- --------------
<S> <C> <C> <C> <C> <C>
$.89 - $1.11.................. 1,099,200 6.28 $ 1.06 1,099,200 $ 1.06
$1.67......................... 222,500 7.34 1.67 222,500 1.67
$3.33......................... 49,120 8.10 3.33 49,120 3.33
$6.25 - $7.00................. 214,000 9.67 6.66 24,375 6.69
$9.50......................... 102,500 9.07 9.50 25,625 9.50
$12.00 - $12.4375............. 330,000 9.04 12.03 84,000 12.03
$13.00........................ 62,194 9.29 13.00 12,750 13.00
$14.00 - $14.94............... 165,650 8.65 14.06 151,650 14.03
--------- ---------
2,245,164 1,669,220
--------- ---------
--------- ---------
</TABLE>
During the first quarter 1999, the Company issued 47,340 options to its
employees. These options had an exercise price that was approximately $10.67
less per share than the fair market value of the Company's common stock on the
date of grant. Since these options fully vested on the date of the initial
public offering, the Company recognized compensation expense of approximately
$505,000 during 1999.
In 1998, the Company granted 36,000 stock options at an exercise price of
$3.33 to non-employees. Expense in the amount of $27,418 was recognized in
connection with these grants, which was estimated using the Black-Scholes model
and the following assumptions:
risk free interest rate of 5.3%,
expected dividend yield of 0%,
expected life of 5.0 years, and
expected volatility of 0%.
F-12
<PAGE>
@PLAN.INC
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
The fair value of all of the Company's other option grants is estimated on
the date of grant using the Black-Scholes model with the following
weighted-average assumptions used for grants in 1997, 1998 and 1999 and for the
nine month periods ended September 30, 1999 and September 30, 2000
weighted-average risk free interest rates of 6.5%, 5.3%, 6.1%, 5.5% and
6.4%, respectively,
expected dividend yields of 0%,
expected lives of 6.0 years, and
expected volatility of 0%, 0%, 66%, 66% and 66%, respectively.
The Company applied Accounting Principles Board Opinion No. 25, 'Accounting
for Stock Issued to Employees,' in accounting for stock option grants to
employees and directors. Accordingly, except for the two series of option grants
discussed above, no compensation cost has been recognized for any option grants
in the accompanying statements of operations. Had compensation costs been
recorded, the Company's net loss and basic and diluted loss per share would have
been reduced from the following as reported amounts to the following pro forma
amounts:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------- -------------------------
1997 1998 1999 1999 2000
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net loss:
As reported................ $(2,813,939) $(1,870,879) $(2,084,814) $(1,257,482) $(3,385,040)
Pro forma.................. $(2,938,567) $(2,037,361) $(2,865,641) $(1,923,890) $(4,653,789)
Basic and diluted loss per
share:
As reported................ $ (3.13) $ (2.07) $ (0.48) $ (0.44) $ (0.30)
Pro forma.................. $ (3.27) $ (2.26) $ (0.59) $ (0.56) $ (0.41)
</TABLE>
7. INCOME TAXES
The accompanying statements of operations for the years ended December 31,
1998 and 1999 include a provision for current state capital taxes of
approximately $13,200 and $64,300, respectively. No taxes were provided for the
year ended December 31, 1997, as tax was not due during the year.
A reconciliation of the tax provision at the United States statutory rate to
the actual income tax expense reported is as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------- ---------------------
1997 1998 1999 1999 2000
---- ---- ---- ---- ----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Tax benefit at the United States
statutory Rate...................... $(956,739) $(631,635) $(686,975) $409,082 $1,133,076
State taxes, net of federal tax
benefit............................. -- 8,725 42,438 31,680 52,800
Options issued to employees........... -- -- 171,733 171,733 --
Losses not benefited.................. 954,695 632,034 532,936 251,039 1,152,474
Other................................. 2,044 4,095 4,168 8,930 (19,734)
--------- --------- --------- -------- ----------
Total income tax provision........ $ -- $ 13,219 $ 64,300 $ 54,300 $ 52,464
--------- --------- --------- -------- ----------
--------- --------- --------- -------- ----------
</TABLE>
Since inception, the Company has generated losses for both book and tax
purposes. The Company has not recorded potential income tax benefits that they
may receive from their ability to apply current losses to future years in which
the Company has taxable income. Under accounting rules, these benefits can only
be recorded when it is more likely than not that these benefits will be
realized. Due to the Company's limited operating history, management currently
cannot make this assessment.
At September 30, 2000, the Company had net operating loss carryforwards for
federal and state income tax purposes totaling approximately $9.8 million, which
will expire from 2016 through 2019.
F-13
<PAGE>
@PLAN.INC
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
The Company's net deferred tax asset consisted of the following amounts of
deferred tax assets and liabilities as of December 31, 1998 and 1999 and
September 30, 2000:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- SEPTEMBER 30,
1998 1999 2000
---- ---- ----
(UNAUDITED)
<S> <C> <C> <C>
Deferred tax asset:
Net operating loss carryforwards.................... $1,949,007 $2,840,599 $ 3,928,849
Start-up costs...................................... 184,731 130,664 90,318
Reserves and other.................................. 50,668 91,341 352,960
---------- ---------- -------------
Deferred tax asset.................................. 2,184,406 3,062,604 4,372,127
Less valuation allowance for deferred tax assets.... (2,129,943) (2,756,927) (4,072,890)
---------- ---------- -------------
54,463 305,677 299,237
Deferred tax liability:
Prepaid commissions................................. (37,263) (85,277) (115,037)
Excess of depreciation for tax purposes over book... (17,200) (220,400) (184,200)
---------- ---------- -------------
Deferred tax liability.............................. (54,463) (305,677) (299,237)
---------- ---------- -------------
Net deferred tax asset.............................. $ -- $ -- $ --
---------- ---------- -------------
---------- ---------- -------------
</TABLE>
8. COMMITMENTS AND CONTINGENCIES
LEASE COMMITMENTS
The Company leases office facilities under operating leases. Future minimum
lease payments related to these agreements are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------
<S> <C>
2000....................................................... 271,611
2001....................................................... 136,270
2002....................................................... 58,157
Thereafter................................................. --
</TABLE>
Rent expense was approximately $110,000, $156,000 and $192,000 for the years
ended December 31, 1997, 1998 and 1999 respectively. Rent expense totaled
approximately $132,000 (unaudited) and $248,000 (unaudited) for the nine months
ended September 30, 1999 and September 30, 2000, respectively.
CONTRACTUAL COMMITMENTS
The Company has a Letter of Agreement with The Gallup Organization, Inc.
which was entered into on September 6, 1996. This agreement was amended on
January 5, 1998, August 20, 1998 and February 19, 1999. Under this agreement,
Gallup provides the Company with initial baseline data and quarterly tracking
survey research. The agreement has a one-year term with nine successive one-year
renewals, and is cancelable only by the Company upon 90-days' written notice
prior to an anniversary date. The annual renewal provides for CPI increases to
the associated fees. During the third quarter of 1999, the Company entered into
an additional agreement with Gallup to provide the Company with initial baseline
data and quarterly tracking data collection for the Company's highly targeted
vertical system focusing on the automotive, travel and merchandising e-commerce
sector. This agreement extends through August 2009 and is cancelable by the
Company upon 90-days' written notice prior to an anniversary.
F-14
<PAGE>
APPENDIX A
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among
DOUBLECLICK INC.,
ATLAS MERGER SUB, INC.,
ATLAS ACQUISITION CORP.
and
@PLAN.INC
Dated as of November 17, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I DEFINITIONS.............................................................. A-1
SECTION 1.01 Certain Defined Terms....................................... A-1
ARTICLE II THE MERGER.............................................................. A-4
SECTION 2.01 The Merger.................................................. A-4
SECTION 2.02 Closing..................................................... A-5
SECTION 2.03 Effective Time.............................................. A-5
SECTION 2.04 Effect of the Merger........................................ A-5
SECTION 2.05 Certificate of Incorporation; Bylaws; Directors and Officers
of Surviving Corporation.................................. A-5
ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES..................... A-5
SECTION 3.01 Conversion of Shares........................................ A-5
SECTION 3.02 Exchange of Shares.......................................... A-6
SECTION 3.03 Stock Transfer Books........................................ A-7
SECTION 3.04 No Fractional Share Certificates............................ A-7
SECTION 3.05 Options and Warrants to Purchase Company Common Stock....... A-8
SECTION 3.06 Certain Adjustments......................................... A-8
SECTION 3.07 Lost, Stolen or Destroyed Certificates...................... A-9
SECTION 3.08 Taking of Necessary Action; Further Action.................. A-9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF COMPANY............................... A-9
SECTION 4.01 Organization and Qualification; No Subsidiaries............. A-9
SECTION 4.02 Charter and Bylaws.......................................... A-9
SECTION 4.03 Capitalization.............................................. A-9
SECTION 4.04 Authority Relative to This Agreement........................ A-10
SECTION 4.05 No Conflict; Required Filings and Consents.................. A-10
SECTION 4.06 Permits; Compliance with Laws............................... A-10
SECTION 4.07 SEC Filings; Financial Statements........................... A-11
SECTION 4.08 Absence of Certain Changes or Events........................ A-11
SECTION 4.09 Employee Benefit Plans; Labor Matters....................... A-12
SECTION 4.10 Certain Tax Matters......................................... A-14
SECTION 4.11 Contracts................................................... A-14
SECTION 4.12 Litigation.................................................. A-14
SECTION 4.13 Environmental Matters....................................... A-15
SECTION 4.14 Intellectual Property....................................... A-15
SECTION 4.15 Taxes....................................................... A-17
SECTION 4.16 Insurance................................................... A-18
SECTION 4.17 Properties.................................................. A-18
SECTION 4.18 Affiliates.................................................. A-18
SECTION 4.19 Opinion of Financial Advisor................................ A-18
SECTION 4.20 Brokers..................................................... A-19
SECTION 4.21 Certain Business Practices.................................. A-19
SECTION 4.22 Business Activity Restriction............................... A-19
SECTION 4.23 Privacy..................................................... A-19
SECTION 4.24 Sections 48-103-205 and 48-103-206 of Tennessee Law Not
Applicable................................................ A-19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.................. A-19
SECTION 5.01 Organization and Qualification.............................. A-19
SECTION 5.02 Certificate of Incorporation and Bylaws..................... A-20
SECTION 5.03 Capitalization.............................................. A-20
SECTION 5.04 Authority Relative to This Agreement........................ A-20
SECTION 5.05 No Conflict; Required Filings and Consents.................. A-20
SECTION 5.06 SEC Filings; Financial Statements........................... A-21
</TABLE>
A-i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 5.07 Certain Tax Matters......................................... A-21
SECTION 5.08 Brokers..................................................... A-22
SECTION 5.09 No Parent Material Adverse Effect........................... A-22
ARTICLE VI COVENANTS............................................................... A-22
SECTION 6.01 Conduct of Business Pending the Closing..................... A-22
SECTION 6.02 Notices of Certain Events................................... A-23
SECTION 6.03 Access to Information; Confidentiality...................... A-23
SECTION 6.04 No Solicitation of Transactions............................. A-24
SECTION 6.05 Tax-Free Transaction........................................ A-25
SECTION 6.06 Control of Operations....................................... A-25
SECTION 6.07 Further Action; Consents; Filings........................... A-25
SECTION 6.08 Additional Reports.......................................... A-25
SECTION 6.09 Tax Information............................................. A-26
ARTICLE VII ADDITIONAL AGREEMENTS.................................................. A-26
SECTION 7.01 Registration Statement; Proxy Statement..................... A-26
SECTION 7.02 Company Shareholders' Meeting............................... A-27
SECTION 7.03 Affiliates.................................................. A-27
SECTION 7.04 Directors' and Officers' Insurance.......................... A-27
SECTION 7.05 No Shelf Registration....................................... A-28
SECTION 7.06 Public Announcements........................................ A-28
SECTION 7.07 NNM Listing................................................. A-28
SECTION 7.08 Company Stock Options/Registration Statements on Form S-8... A-28
SECTION 7.09 Employee Matters............................................ A-28
SECTION 7.10 Warrants.................................................... A-29
SECTION 7.11 Exemption from Liability Under Section 16(b)................ A-29
ARTICLE VIII CONDITIONS TO THE MERGER.............................................. A-29
SECTION 8.01 Conditions to the Obligations of Each Party to Consummate
the Merger................................................ A-29
SECTION 8.02 Conditions to the Obligations of Company.................... A-30
SECTION 8.03 Conditions to the Obligations of Parent..................... A-30
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER....................................... A-31
SECTION 9.01 Termination................................................. A-31
SECTION 9.02 Effect of Termination....................................... A-32
SECTION 9.03 Amendment................................................... A-32
SECTION 9.04 Waiver...................................................... A-32
SECTION 9.05 Termination Fee; Expenses................................... A-32
ARTICLE X GENERAL PROVISIONS....................................................... A-33
SECTION 10.01 Non-Survival of Representations and Warranties.............. A-33
SECTION 10.02 Notices..................................................... A-33
SECTION 10.03 Severability................................................ A-34
SECTION 10.04 Assignment; Binding Effect; Benefit......................... A-34
SECTION 10.05 Incorporation of Exhibits................................... A-34
SECTION 10.06 Governing Law............................................... A-34
SECTION 10.07 Waiver of Jury Trial........................................ A-34
SECTION 10.08 Headings; Interpretation.................................... A-34
SECTION 10.09 Counterparts................................................ A-34
SECTION 10.10 Entire Agreement; Amendment and Restatement of Original
Agreement................................................. A-34
ANNEXES
ANNEX A Shareholder Agreement
ANNEX A-1 Shareholder Letter
</TABLE>
A-ii
<PAGE>
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated
as of November 17, 2000 (as further amended, supplemented or otherwise modified
from time to time, this 'Agreement'), among DOUBLECLICK INC., a Delaware
corporation ('Parent'), @PLAN.INC, a Tennessee corporation ('Company'), ATLAS
ACQUISITION CORP., a Delaware corporation and a direct wholly owned Subsidiary
of Parent ('Merger Sub'), and ATLAS MERGER SUB, INC., a Tennessee corporation
and a direct wholly owned Subsidiary of Parent ('Original Merger Sub'):
WITNESSETH:
WHEREAS, Parent, Company and Original Merger Sub are parties to that certain
Agreement and Plan of Merger and Reorganization, dated as of September 24, 2000
(the 'Original Agreement'), which provided for a business combination by means
of the merger of Original Merger Sub with and into Company;
WHEREAS, Parent and Company have determined that it is advisable and in the
best interests of their respective companies and shareholders to amend and
restate the Original Agreement, in order to, among other things, (A) provide for
a business combination by means of the merger of Company with and into Merger
Sub, whereby the separate corporate existence of Company shall cease and Merger
Sub shall continue as the surviving corporation (the 'Merger'), and (B) fix the
value of the Merger Consideration (as defined);
WHEREAS, concurrently with the execution of the Original Agreement and as an
inducement to Parent to enter into this Agreement, certain shareholders of
Company have entered into a shareholder agreement ('Shareholder Agreement') in
the form attached hereto as Annex A and have, concurrently with the execution of
this Agreement, agreed in writing ('Shareholder Letter') in the form attached
hereto as Annex A-1, (A) to re-affirm their obligations under the Shareholder
Agreement and (B) that this Agreement does not constitute an amendment of the
Original Agreement in a manner materially adverse to their interests;
WHEREAS, for United States Federal income tax purposes, it is intended that,
in the event Parent elects to pay the Merger Consideration pursuant to
Section 3.01(a)(i), the Merger shall qualify as a tax-free reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended (together with
the rules and regulations promulgated thereunder, the 'Code'), and that this
Agreement shall be, and hereby is, adopted as a plan of reorganization for
purposes of Section 368(a) of the Code;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. Unless the context otherwise requires,
the following terms, when used in this Agreement, shall have the respective
meanings specified below (such meanings to be equally applicable to the singular
and plural forms of the terms defined):
'Affiliate' shall mean, with respect to any Person, any other Person that
controls, is controlled by or is under common control with the first Person.
'Blue Sky Laws' shall mean state securities or 'blue sky' laws.
'Business Day' shall mean any day on which the principal offices of the SEC
in Washington, D.C. are open to accept filings, or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized by law or executive order to close in the City of New York.
'Closing Date' shall mean the date that the Closing is held.
A-1
<PAGE>
'Company Common Stock' shall mean the shares of common stock, no par value
per share, of Company.
'Company Competing Transaction' shall mean any of the following involving
Company (other than the Merger):
(i) any merger, consolidation, share exchange, business combination or
other similar transaction;
(ii) any sale, lease, exchange, transfer or other disposition of 20% or
more of the assets of such party and its subsidiaries, taken as a whole, in
a single transaction or series of transactions;
(iii) any tender offer or exchange offer for 20% or more of the
outstanding voting securities of such party or the filing of a registration
statement under the Securities Act in connection therewith;
(iv) any Person having acquired beneficial ownership or the right to
acquire beneficial ownership of, or any 'group' (as such term is defined
under Section 13(d) of the Exchange Act) having been formed which
beneficially owns, or has the right to acquire beneficial ownership of, 20%
or more of the outstanding voting securities of such party;
(v) any solicitation in opposition to the approval of this Agreement by
the shareholders of such party; or
(vi) any public announcement of a proposal, plan or intention to do any
of the foregoing or any agreement to engage in any of the foregoing.
'Company Disclosure Schedule' shall mean the disclosure schedule delivered
by Company to Parent prior to the execution of this Agreement and forming a part
hereof.
'Company Material Adverse Effect' shall mean any change in or effect on the
business of Company that, individually or in the aggregate (taking into account
all other such changes or effects), is, or is reasonably likely to be,
materially adverse to the business, assets, liabilities, financial condition or
results of operations of Company, except to the extent any such change or effect
results from or is attributable to (i) changes in general economic conditions or
changes affecting the industry generally in which Company operates (provided
that such changes do not affect Company in a materially disproportionate
manner), (ii) any litigation or loss of customers, employees or revenues that
Company successfully bears the burden of proving arose from Company entering
into this Agreement or (iii) any matter described in Section 1.01 of the Company
Disclosure Schedule; provided, however, that in no event shall a decrease in the
trading price of Company Common Stock or litigation relating thereto be
considered a Company Material Adverse Effect.
'Company Shareholders' Meeting' shall mean the special meeting of Company
shareholders to consider approval of this Agreement and the Merger.
'Company Stock Plans' shall mean the Second Amended and Restated 1996 Stock
Option Plan, the 1999 Stock Incentive Plan and the 1999 Stock Option Plan for
New Employees.
'Confidentiality Agreements' shall mean the confidentiality agreements,
dated as of July 19, 2000 and September 15, 2000, between Parent and Company.
'$' shall mean United States Dollars.
'Delaware Law' shall mean the Delaware General Corporation Law.
'Encumbrances' shall mean all claims, security interests, liens, pledges,
charges, escrows, options, proxies, rights of first refusal, preemptive rights,
mortgages, hypothecations, prior assignments, title retention agreements,
indentures, security agreements or any other encumbrance of any kind.
'Environmental Law' shall mean any Law and any enforceable judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Material.
'Environmental Permit' shall mean any permit, approval, identification
number, license or other authorization required under or issued pursuant to any
applicable Environmental Law.
A-2
<PAGE>
'ERISA' shall mean the Employee Retirement Income Security Act of 1974, as
amended.
'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended,
together with the rules and regulations promulgated thereunder.
'Exchange Ratio' shall mean the fraction equal to $8.00 divided by the Final
Average Closing Price.
'Expenses' shall mean, with respect to any party hereto, all reasonable
out-of-pocket expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a party
hereto and its affiliates) incurred by such party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of its obligations pursuant to this Agreement and the consummation
of the Merger, the preparation, printing, filing and mailing of the Registration
Statement (as defined in Section 7.01) and the Proxy Statement (as defined in
Section 7.01), the solicitation of shareholder approvals, the filing of HSR Act
notice, if any, and all other matters related to the transactions contemplated
hereby and the closing of the Merger.
'Final Average Closing Price' shall mean the average closing price of Parent
Common Stock on the NNM for the ten trading days ending on the Business Day
prior to the date of (a) the Company Shareholders' Meeting, in the event that
all other conditions set forth in Article VIII hereof have been, or are capable
of being, satisfied or have been waived at such time or (b) the Closing, in all
other circumstances.
'Governmental Entity' shall mean any United States Federal, state or local
or any foreign governmental, regulatory or administrative authority, agency or
commission or any court, tribunal or arbitral body.
'Governmental Order' shall mean any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Entity.
'Hazardous Material' shall mean (i) any petroleum, petroleum products,
by-products or breakdown products, radioactive materials, friable
asbestos-containing materials or polychlorinated biphenyls or (ii) any chemical,
material or substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any applicable Environmental Law.
'HSR Act' shall mean Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, together with the rules and regulations promulgated thereunder.
'IRS' shall mean the United States Internal Revenue Service.
'Knowledge of Company' shall mean that any officer or director of Company is
actually or reasonably should have been aware of a fact or other matter.
'Knowledge of Parent' shall mean that any officer or director of Parent is
actually or reasonably should have been aware of a fact or other matter.
'Law' shall mean any Federal, state, foreign or local statute, law,
ordinance, regulation, rule, code, order, judgment, decree, other requirement or
rule of law of the United States or any other jurisdiction, and any other
similar act or law.
'Merger Consideration' shall mean consideration to be received in connection
with the Merger in accordance with Section 3.01.
'NNM' shall mean the Nasdaq National Market.
'Parent Common Stock' shall mean the shares of common stock, par value $.001
per share, of Parent.
'Parent Convertible Notes' shall mean the $250,000,000 4.75% Convertible
Notes of Parent Due 2006.
'Parent Disclosure Schedule' shall mean the disclosure schedule delivered by
Parent to Company prior to the execution of this Agreement and forming a part
hereof.
'Parent Material Adverse Effect' shall mean any change in or effect on the
business of Parent and the Parent Subsidiaries that, individually or in the
aggregate (taking into account all other such changes or effects), is, or is
reasonably likely to be, materially adverse to the business, assets,
liabilities, financial
A-3
<PAGE>
condition or results of operations of Parent and the Parent Subsidiaries, taken
as a whole, except to the extent any such change or effect results from or is
attributable to (i) changes in general economic conditions or changes affecting
the industry generally in which Parent operates (provided that such changes do
not affect Parent in a materially disproportionate manner), (ii) any litigation
or loss of customers, employees or revenues that Parent successfully bears the
burden of proving arose from Parent entering into this Agreement or (iii) any
matter described in Section 1.01 of the Parent Disclosure Schedule, provided,
however, that in no event shall a decrease in the trading price of Parent Common
Stock or litigation relating thereto be considered a Parent Material Adverse
Effect.
'Parent Stock Plans' shall mean Parent's 1996 Stock Plan, 1997 Stock
Incentive Plan, 1999 Non-Officer Stock Option/Stock Issuance Plan and Employee
Stock Purchase Plan.
'Permitted Encumbrances' shall mean (i) liens for Taxes, assessments and
other governmental charges not yet due and payable, (ii) immaterial unfiled
mechanics', workmen's, repairmen's, warehousemen's, carriers' or other like
liens arising or incurred in the ordinary course of business and
(iii) equipment leases with third parties entered into in the ordinary course of
business.
'Person' shall mean an individual, corporation, partnership, limited
partnership, limited liability partnership, limited liability company,
syndicate, person (including, without limitation, a 'person' as defined in
Section 13(d)(3) of the Exchange Act), trust, association, entity or government
or political subdivision, agency or instrumentality of a government.
'SEC' shall mean the United States Securities and Exchange Commission.
'Securities Act' shall mean the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
'Subsidiary' shall mean, with respect to any Person, any corporation,
limited liability company, partnership, joint venture or other legal entity of
which such Person (either alone or through or together with any other subsidiary
of such Person) owns, directly or indirectly, a majority of the stock or other
equity interests, the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
'Tax' shall mean (i) any and all taxes, fees, levies, duties, tariffs,
imposts and other charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any Governmental Entity or other taxing authority ('Taxing
Authority'), including, without limitation, taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross or net receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value-added or gains taxes; license, registration and documentation fees; and
customers' duties, tariffs and similar charges; (ii) any liability for the
payment of any amounts of the type described in (i) as a result of being a
member of an affiliated, combined, consolidated or unitary group for any taxable
period; and (iii) any liability for the payment of amounts of the type described
in (i) or (ii) as a result of being a transferee of, or a successor in interest
to, any Person or as a result of an express or implied obligation to indemnify
any Person.
'Tax Return' shall mean any return, statement or form (including, without
limitation, any estimated tax reports or return, withholding tax reports or
return and information report or return) required to be filed with respect to
any Taxes.
'Tennessee Law' shall mean the Tennessee Business Corporation Act.
'U.S. GAAP' shall mean United States generally accepted accounting
principles.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with Tennessee Law and Delaware Law,
at the Effective Time (as defined in Section 2.03), Company shall be merged with
and into Merger Sub. As a result of the Merger,
A-4
<PAGE>
the separate corporate existence of Company shall cease and Merger Sub shall
continue as the surviving corporation of the Merger as a wholly owned Subsidiary
of Parent (the 'Surviving Corporation').
SECTION 2.02 Closing. Unless this Agreement shall have been terminated and
the Merger herein contemplated shall have been abandoned pursuant to
Section 9.01 and subject to the satisfaction or waiver of the conditions set
forth in Article VIII, the consummation of the Merger shall take place as
promptly as practicable (and in any event within three Business Days) after
satisfaction or waiver of the conditions set forth in Article VIII, at a closing
(the 'Closing') to be held at the offices of Brobeck, Phleger & Harrison LLP,
1633 Broadway, 47th Floor, New York, New York 10019, unless another date, time
or place is agreed to by Parent and Company.
SECTION 2.03 Effective Time. At and after the time of the Closing, the
parties (other than Original Merger Sub) shall cause the Merger to be
consummated by filing (i) the Certificate of Merger (the 'DE Certificate of
Merger') with the Secretary of State of the State of Delaware, in such form as
required by, and executed in accordance with the relevant provisions of,
Delaware Law, and (ii) and the Articles of Merger (the 'TN Articles of Merger')
with the Secretary of State of the State of Tennessee, in such form as required
by, and executed in accordance with the relevant provisions of, Tennessee Law.
Subject to and in accordance with Delaware Law and Tennessee Law, the Merger
will become effective at the later of the date and time the DE Certificate of
Merger is filed with and accepted by the office of the Secretary of State of the
State of Delaware and the TN Articles of Merger are filed with and accepted by
the office of the Secretary of State of the State of Tennessee, or at such later
time or date as may be specified in the DE Certificate of Merger and the TN
Articles of Merger (the 'Effective Time'). Each of the parties will use its best
efforts to cause the Merger to be consummated as soon as practicable following
the fulfillment or waiver of the conditions specified in Article VIII hereof.
SECTION 2.04 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of Delaware Law and
Tennessee Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of Company and Merger Sub
shall vest in Merger Sub as the Surviving Corporation, and all debts,
liabilities and duties of Company and Merger Sub shall become the debts,
liabilities and duties of Merger Sub as the Surviving Corporation.
SECTION 2.05 Certificate of Incorporation; Bylaws; Directors and Officers of
Surviving Corporation. Unless otherwise agreed by Parent and Company before the
Effective Time, at the Effective Time:
(a) subject to the requirements of Section 7.04(a), the Certificate of
Incorporation and the Bylaws of Merger Sub as in effect immediately prior to
the Effective Time shall be the Certificate of Incorporation and the Bylaws
of the Surviving Corporation, until thereafter amended as provided by Law
and such Certificate of Incorporation or Bylaws; provided, however, that
Article I of the Certificate of Incorporation of the Surviving Corporation
shall be amended to read as follows: 'The name of the corporation is
@plan.inc';
(b) the officers of Merger Sub immediately prior to the Effective Time
shall serve in their respective offices of the Surviving Corporation from
and after the Effective Time, in each case until their successors are
elected or appointed and qualified or until their resignation or removal;
and
(c) the directors of Merger Sub immediately prior to the Effective Time
shall serve as the directors of the Surviving Corporation from and after the
Effective Time, in each case until their successors are elected or appointed
and qualified or until their resignation or removal.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 Conversion of Shares. At the Effective Time, by virtue of the
Merger, and without any action on the part of Parent, Merger Sub, Company or the
holders of any of the following securities:
(a) Each share of Company Common Stock issued and outstanding
immediately before the Effective Time (excluding shares of Company Common
Stock, if any, owned by any wholly owned Subsidiary of Company) and all
rights in respect thereof, shall, forthwith cease to exist and be converted
into the right to receive, at Parent's election, either
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(i) (A) a fraction of a share of Parent Common Stock, the numerator
of which is, at Parent's election, not less than $4.00 nor more than
$6.40 (the 'Stock Consideration Value'), and the denominator of which is
the Final Average Closing Price and (B) an amount of cash equal to $8.00
minus the Stock Consideration Value; or
(ii) $8.00 in cash.
The Parent elections contemplated hereby shall be made in writing to
Company by 5:30 p.m. (New York City time) on the Business Day prior to the
date of (a) the Company Shareholders' Meeting, in the event that all other
conditions set forth in Article VIII hereof have been, or are capable of
being, satisfied or have been waived at such time or (b) the Closing, in all
other circumstances. For the purposes of this Agreement, cash paid pursuant
to this Section 3.01(a) shall be referred to as 'Cash Consideration.'
(b) Each share of Company Common Stock owned by any wholly owned
Subsidiary of Company immediately prior to the Effective Time shall be
canceled and retired and no shares of stock or other securities of Parent,
the Surviving Corporation or any other corporation shall be issuable, and no
payment of other consideration shall be made, with respect thereto.
SECTION 3.02 Exchange of Shares.
(a) Exchange Agent. As of the Effective Time, Parent shall enter into an
agreement with a bank or trust company to act as exchange agent for the Merger
(the 'Exchange Agent') as may be designated by Parent, and shall be reasonably
acceptable to Company.
(b) Parent to Provide Common Stock and Cash. Promptly after the Effective
Time, Parent shall make available to the Exchange Agent for the benefit of the
holders of Company Common Stock: (i) Certificates of Parent Common Stock
('Parent Certificates') representing the number of whole shares of Parent Common
Stock issuable pursuant to Section 3.01(a) in exchange for shares of Company
Common Stock outstanding immediately prior to the Effective Time;
(ii) sufficient funds to permit payment of the Cash Consideration payable
pursuant to Section 3.01(a) in exchange for each share of Company Stock; and
(iii) sufficient funds to permit payment in lieu of fractional shares pursuant
to Section 3.04.
(c) Exchange Procedures. The Exchange Agent shall mail to each holder of
record of certificates of Company Common Stock ('Company Certificates'), whose
shares were converted into the right to receive Merger Consideration (and cash
in lieu of fractional shares pursuant to Section 3.04) promptly after the
Effective Time (and in any event no later than the later to occur of three
Business Days after the Effective Time and receipt by Parent of a complete list
from Company of the names and addresses of its holders of record): (i) a form
letter of transmittal in form and substance satisfactory to Company, such
approval not to be unreasonably withheld (which shall specify that delivery
shall be effected, and risk of loss and title to the Company Certificates shall
pass, only upon receipt of the Company Certificates by the Exchange Agent, and
shall be in such form and have such other provisions as Parent may reasonably
specify); and (ii) instructions for use in effecting the surrender of the
Company Certificates in exchange for Parent Certificates, Cash Consideration and
cash in lieu of fractional shares. Upon surrender of a Company Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly completed
and validly executed, and such other documents as may be reasonably required by
the Exchange Agent, the holder of such Company Certificate shall be entitled to
receive in exchange therefor (i) a Parent Certificate as payment of the shares
of Parent Common Stock issuable in the Merger, (ii) cash as payment of any Cash
Consideration (without any interest accrued thereon), (iii) dividends or
distributions declared or made on the Parent Common Stock after the Effective
Time and payable between the Effective Time and the time of such surrender
and/or (iv) payment of cash in lieu of fractional shares which such holder has
the right to receive pursuant to Section 3.04, and the Company Certificate so
surrendered shall forthwith be canceled. Until so surrendered, each outstanding
Company Certificate that, prior to the Effective Time, represented shares of
Company Common Stock, will be deemed from and after the Effective Time, for all
purposes other than the payment of dividends and distributions, to evidence the
ownership of the number of full shares of Parent Common Stock and amount of any
Cash Consideration into which such shares of Company Common Stock, as the case
may
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be, shall have been so converted, and the right to receive an amount in cash in
lieu of the issuance of any fractional shares in accordance with Section 3.04.
Notwithstanding any other provision of this Agreement, no interest will be paid
or will accrue on any cash payable to holders of Company Certificates pursuant
to the provisions of this Article III.
(d) Distributions With Respect to Unexchanged Shares. No dividends or other
distributions with respect to Parent Common Stock with a record date after the
Effective Time will be paid to the holder of any unsurrendered Company
Certificate with respect to the shares of Parent Common Stock represented
thereby until the holder of record of such Company Certificate shall surrender
such Company Certificate. Subject to the effect of applicable escheat or similar
laws, following surrender of any such Company Certificate, there shall be paid
to the record holder of the Parent Certificates issued in exchange therefor,
without interest, at the time of such surrender, the amount of any such
dividends or other distributions with a record date after the Effective Time
theretofore payable (but for the provisions of this Section 3.02(d)) with
respect to such shares of Parent Common Stock.
(e) Transfer of Ownership. If any Parent Certificate is to be issued in a
name, or Cash Consideration or cash in lieu of fractional shares paid to a
Person, other than that in which the Company Certificate surrendered in exchange
therefor is registered, it will be a condition of the issuance and/or payment
thereof that the Company Certificate so surrendered will be properly endorsed
and otherwise in proper form for transfer and that the Person requesting such
exchange will have paid to Parent or any agent designated by it any transfer or
other taxes required by reason of the issuance of a Parent Certificate for
shares of Parent Common Stock in any name other than that of the registered
holder of the Company Certificate surrendered, or established to the
satisfaction of Parent or any agent designated by it that such tax has been paid
or is not payable.
(f) Termination of Exchange Agent Funding. Any portion of funds or Parent
Certificates held by the Exchange Agent which have not been delivered to holders
of Company Certificates pursuant to this Article III within six months after the
Effective Time shall promptly be paid or delivered, as appropriate, to Parent,
and thereafter holders of Company Certificates who have not theretofore complied
with the exchange procedures set forth in and contemplated by this Section 3.02
shall thereafter look only to Parent (subject to abandoned property, escheat and
similar laws) only as general creditors thereof for their claim for shares of
Parent Common Stock, any Cash Consideration or cash in lieu of fractional shares
of Parent Common Stock and any dividends or distributions (with a record date
after the Effective Time) with respect to Parent Common Stock to which they are
entitled.
(g) No Liability. Notwithstanding anything to the contrary in this
Section 3.02, none of the Exchange Agent, the Surviving Corporation or any party
hereto shall be liable to any Person in respect of any shares of Parent Common
Stock or cash delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
SECTION 3.03 Stock Transfer Books. As of the Effective Time, the stock
transfer books of Company shall each be closed, and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of any such stock transfer books. In the event of a transfer of
ownership of shares of Company Common Stock that is not registered in the stock
transfer records of Company at the Effective Time, a certificate or certificates
representing the number of full shares of Parent Common Stock into which such
shares of Company Common Stock shall have been converted shall be issued to the
transferee together with a cash payment in the amount of the Cash Consideration
payable in accordance with Section 3.01(a), a cash payment in lieu of fractional
shares, if any, in accordance with Section 3.04 hereof, and a cash payment in
the amount of dividends, if any, in accordance with Section 3.02(d) hereof, if
the certificate or certificates representing such shares of Company Common
Stock, as the case may be, is or are surrendered as provided in Section 3.02(c)
hereof, accompanied by all documents required to evidence and effect such
transfer and by evidence of payment of any applicable stock transfer tax.
SECTION 3.04 No Fractional Share Certificates. No scrip or fractional share
Parent Certificate shall be issued upon the surrender for exchange of Company
Certificates, and an outstanding fractional share interest shall not entitle the
owner thereof to vote, to receive dividends or to any rights of a shareholder of
Parent or of Surviving Corporation with respect to such fractional share
interest. As promptly as practicable following the Effective Time, Parent shall
deposit with the Exchange Agent (in addition to
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funds representing any Cash Consideration payable in accordance with
Section 3.01(a)) an amount in cash sufficient for the Exchange Agent to pay each
holder of Company Common Stock an amount in cash, rounded to the nearest whole
cent, equal to the product obtained by multiplying (i) the fractional share
interest to which such holder would otherwise be entitled (after taking into
account all shares of Company Common Stock held at the Effective Time by such
holder) by (ii) the Final Average Closing Price. As soon as practicable after
the determination of the amount of cash, if any, to be paid to holders of
Company Common Stock with respect to any fractional share interests, the
Exchange Agent shall make available such amounts, net of any required
withholding taxes, to such holders of Company Common Stock subject to and in
accordance with the terms of Section 3.02 hereof.
SECTION 3.05 Options and Warrants to Purchase Company Common Stock. At the
Effective Time, the Company Stock Plans and each option granted by Company to
purchase shares of Company Common Stock pursuant to the Company Stock Plans or
otherwise listed on Schedule 3.05 of the Company Disclosure Schedule ('Company
Stock Options') which is outstanding and unexercised immediately prior to the
Effective Time, and each warrant to purchase shares of Company Common Stock
('Company Warrants') listed on Schedule 3.05 which is outstanding and
unexercised immediately prior to the Effective Time, shall be assumed by Parent
and converted into an option or warrant, as the case may be, to purchase shares
of Parent Common Stock in such number and at such exercise price as provided
below and otherwise having the same terms and conditions as in effect
immediately prior to the Effective Time (except to the extent that such terms,
conditions and restrictions may be altered in accordance with their terms as a
result of the Merger contemplated hereby and except that all references in each
such Company Stock Option or Company Warrant to Company shall be deemed to refer
to Parent):
(a) the number of shares of Parent Common Stock to be subject to the new
option or warrant, as the case may be, shall be equal to the product of
(x) the number of shares of Company Common Stock subject to the original
Company Stock Option or Company Warrant immediately prior to the Effective
Time and (y) the Exchange Ratio;
(b) the exercise price per share of Parent Common Stock under the new
option or warrant shall be equal to (x) the exercise price per share of
Company Common Stock in effect under the original Company Stock Option or
Company Warrant immediately prior to the Effective Time divided by (y) the
Exchange Ratio; and
(c) in effecting such assumption and conversion, the aggregate number of
shares of Parent Common Stock to be subject to each assumed Company Stock
Option or Company Warrant will be rounded down, if necessary, to the next
whole share and the aggregate exercise price shall be rounded up, if
necessary, to the next whole cent.
The adjustments provided herein with respect to any options that are
'incentive stock options' (as defined in Section 422 of the Code) shall be
effected in a manner consistent with the requirements of Section 424(a) of the
Code.
SECTION 3.06 Certain Adjustments.
(a) If between the date of this Agreement and the Effective Time, (i) the
outstanding shares of Parent Common Stock, or Company Common Stock shall be
changed into a different number of shares by reason of any reclassification,
recapitalization, split-up, combination or exchange of shares, or any dividend
payable in stock or other securities shall be declared thereon with a record
date within such period, or (ii) the number of shares of Company Common Stock on
a fully diluted basis is in excess of that specified in Section 4.03 or
disclosed in Schedule 4.03 of the Company Disclosure Schedule (regardless of
whether such excess is a result of an additional issuance of capital stock
except as otherwise permitted pursuant to this Agreement or a correction to such
Sections), then, in either case, the Exchange Ratio and the Merger Consideration
shall be adjusted accordingly to provide to Parent and Company the same economic
effect as contemplated by this Agreement prior to such reclassification,
recapitalization, split-up, combination, exchange, dividend or increase.
(b) Notwithstanding anything herein to the contrary, in the event that
Parent elects to pay the Merger Consideration pursuant to Section 3.01(a)(i) and
the amount of cash to be paid by Parent in the Merger would exceed the amount of
cash permissible for the Merger to qualify as a tax-free
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reorganization under Section 368(a) of the Code, including as a result of the
Final Average Closing Price being higher than the mean between the high and low
sale prices of Parent Common Stock on the Closing Date (the 'Closing Date
Average Price'), then Parent shall reduce the amount of cash to be paid to each
holder of Company Common Stock and increase the number of shares of Parent
Common Stock, valued at the Closing Date Average Price, to be issued to such
holder by such amounts as required to qualify for such tax-free treatment.
SECTION 3.07 Lost, Stolen or Destroyed Certificates. In the event any
Company Certificates shall have been lost, stolen or destroyed, the Exchange
Agent shall issue in exchange for such lost, stolen or destroyed Company
Certificates, upon the making of an affidavit of that fact by the holder
thereof, such shares of Parent Common Stock and Cash Consideration (and cash in
lieu of fractional shares) as may be required pursuant to Sections 3.01(a) and
3.06(b) (and Section 3.04); provided, however, that Parent may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Company Certificates to indemnify Parent
against any claim that may be made against Parent, the Surviving Corporation or
the Exchange Agent with respect to the Company Certificates alleged to have been
lost, stolen or destroyed.
SECTION 3.08 Taking of Necessary Action; Further Action. If, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of Company, the officers and directors of Company are
fully authorized in the name of their corporation or otherwise to take, and will
use good faith efforts to take, all such lawful and necessary action, so long as
such action is not inconsistent with this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to Parent and Merger Sub, subject to
the exceptions specifically disclosed in writing in the Company Disclosure
Schedule, all such exceptions to be referenced to a specific representation set
forth in this Article IV or otherwise be clearly applicable to representations
hereof not specifically referenced, that:
SECTION 4.01 Organization and Qualification; No Subsidiaries
(a) The Company has been duly organized and is validly existing and in good
standing (to the extent applicable) under the laws of the State of Tennessee and
has the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted. Company is
duly qualified or licensed to do business, and is in good standing (to the
extent applicable), in each jurisdiction where the character of the properties
owned, leased or operated by it or the nature of its business makes such
qualification or licensing necessary, except for such failure to be so qualified
or licensed and in good standing that could not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
(b) Company does not own an equity interest in any corporation, partnership
or joint venture arrangement or other business entity.
SECTION 4.02 Charter and Bylaws. The copies of Company's charter and bylaws
previously presented to Parent by Company are true, complete and correct copies
thereof. Such charter and bylaws are in full force and effect. Company is not in
violation of any of the provisions of its charter or bylaws.
SECTION 4.03 Capitalization. The authorized capital stock of Company
consists of 50,000,000 shares of Company Common Stock and 10,000,000 shares of
Preferred Stock, without par value, of the Company ('Company Preferred Stock').
As of the close of business on November 1, 2000, (i) 11,332,770 shares of
Company Common Stock were issued and outstanding, all of which are validly
issued, fully paid and nonassessable, (ii) no shares of Company Common Stock are
held in the treasury of Company, (iii) 3,012,906 shares of Company Common Stock
are reserved for future issuance pursuant to Company Stock Options, Company
Warrants and Company Preferred Stock, and (iv) no shares of Company Preferred
Stock are issued and outstanding. The name of each holder of a Company Stock
Option or Company Warrant, the grant or issuance date of each Company Stock
Option or
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Company Warrant, the number of shares of Company Common Stock for which each
Company Stock Option or Company Warrant is exercisable, the exercise price of
each Company Stock Option or Company Warrant and the vesting schedule of each
Company Stock Option are set forth in Schedule 4.03 of the Company Disclosure
Schedule. Except for shares of Company Common Stock issuable pursuant to Company
Stock Plans and as otherwise set forth in Schedule 4.03 of the Company
Disclosure Schedule, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which Company is a party or by
which Company is bound relating to the issued or unissued capital stock of
Company or obligating Company to issue or sell any shares of capital stock of,
or other equity interests in, Company. All shares of Company Common Stock
subject to issuance as aforesaid, upon issuance prior to the Effective Time on
the terms and conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and nonassessable.
There are no outstanding contractual obligations of Company to repurchase,
redeem or otherwise acquire any shares of Company Common Stock. There are no
material outstanding contractual obligations of Company to provide funds to, or
make any material investment (in the form of a loan, capital contribution or
otherwise) in, any entity or Person.
SECTION 4.04 Authority Relative to This Agreement. Company has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Company and the
consummation by Company of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of Company are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby (other than, with respect to
the Merger, the approval of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock entitled to vote with respect thereto
at the Company Shareholders' Meeting, and the filing and recordation of the DE
Certificate of Merger as required by Delaware Law and the TN Articles of Merger
as required by Tennessee Law). This Agreement has been duly executed and
delivered by Company and, assuming the due authorization, execution and delivery
by the other parties hereto, constitutes the legal, valid and binding obligation
of Company, enforceable against Company in accordance with its terms, except to
the extent that enforceability hereof may be limited by applicable bankruptcy,
moratorium, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by principles of equity regarding
the availability of remedies (whether in a proceeding at law or in equity).
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Company do not, and the
performance by Company of its obligations hereunder, and the consummation of the
Merger will not, (i) conflict with or violate any provision of the charter or
bylaws of Company; (ii) assuming that all filings and notifications described in
Section 4.05(b) have been made, conflict with or violate any Law applicable to
Company or by which any property or asset of Company is bound or affected; or
(iii) result in any material breach of or constitute a material default (or an
event which with the giving of notice or lapse of time or both could reasonably
be expected to become a material default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other Encumbrance on any property or asset of Company
pursuant to, any material note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation.
(b) The execution and delivery of this Agreement by Company do not, and the
performance by Company of its obligations hereunder and the consummation of the
Merger will not, require any consent, approval, authorization or permit of, or
filing by Company with or notification by Company to, any Governmental Entity,
except pursuant to applicable requirements of the Exchange Act, the Securities
Act, Blue Sky Laws, the rules and regulations of the NNM, the premerger
notification requirements of the HSR Act, and the filing and recordation of the
DE Certificate of Merger as required by Delaware Law and the TN Articles of
Merger as required by Tennessee Law.
SECTION 4.06 Permits; Compliance with Laws. Company is in possession of all
franchises, grants, authorizations, licenses, establishment registrations,
product listings, permits, approvals and orders of any Governmental Entity
necessary for Company to own, lease and operate its properties and assets or
otherwise to carry on its business in all material respects as it is now being
conducted (collectively, the
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'Company Permits'), and, as of the date of this Agreement, none of the Company
Permits has been suspended or cancelled nor is any such suspension or
cancellation pending or, to the Knowledge of Company, threatened in writing.
Company is not in conflict with, or in default or violation of, (i) any Law
applicable to Company or by which any property or asset of Company is bound or
affected or (ii) any Company Permits, which conflict, default or violation would
likely result in a Company Material Adverse Effect. Schedule 4.06 of the Company
Disclosure Schedule sets forth, as of the date of this Agreement, all actions,
proceedings, investigations or surveys pending or, to the Knowledge of Company,
threatened in writing against Company that could reasonably be expected to
result in the suspension or cancellation of any Company Permit. Since
December 31, 1997, Company has not received from any Governmental Entity any
written notification with respect to possible conflicts, defaults or violations
of Laws.
SECTION 4.07 SEC Filings; Financial Statements.
(a) Except as set forth on Schedule 4.07(a) of the Company Disclosure
Schedule, Company has timely filed all forms, reports, statements and documents
required to be filed by it (A) with the SEC and the NNM since May 21, 1999
(collectively, together with any such forms, reports, statements and documents
Company may file subsequent to the date hereof until the Closing, the 'Company
Reports') and (B) with any other Governmental Entities. Each Company Report
(i) was prepared, in all material respects, in accordance with the requirements
of the Securities Act, the Exchange Act or the rules and regulations of the NNM,
as the case may be, and (ii) did not at the time it was filed (or if amended or
superseded by a filing prior to the date hereof, then as of and on the date so
amended or superseded) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading. Each form, report, statement and document
referred to in clause (B) of this paragraph was prepared in all material
respects in accordance with the requirements of applicable Law.
(b) Each of the financial statements (including, in each case, any notes
thereto) contained in the Company Reports was prepared in accordance with U.S.
GAAP (except, in the case of unaudited financial statements, for the absence of
footnotes and subject to normal year end adjustments, which adjustments are not
material) applied on a consistent basis throughout the periods indicated (except
as may be indicated in the notes thereto) and each presented fairly, in all
material respects, the financial position of Company as at the respective dates
thereof, and its results of operations, shareholders' equity and cash flows for
the respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring
immaterial year-end adjustments).
(c) Except as and to the extent set forth or reserved against on the balance
sheet of Company as reported in the Company Reports, including the notes
thereto, Company has no liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) that would be required to be
reflected on a balance sheet or in notes thereto prepared in accordance with
U.S. GAAP, except for immaterial liabilities or obligations incurred in the
ordinary course of business consistent with past practice since December 31,
1999.
SECTION 4.08 Absence of Certain Changes or Events. Since December 31, 1999,
Company has conducted its business, in all material respects, only in the
ordinary course consistent with past practice and, since such date, there has
not been (i) any Company Material Adverse Effect, (ii) any event that could
reasonably be expected to prevent or materially delay the performance of
Company's obligations pursuant to this Agreement and the consummation of the
Merger by Company, (iii) any change by Company in its accounting methods,
principles or practices, (iv) any declaration, setting aside or payment of any
dividend or distribution in respect of the shares of Company Common Stock or any
redemption, purchase or other acquisition of any of Company's securities,
(v) except for changes in the ordinary course of business consistent with past
practice that only affect non-officer employees of Company, any increase in the
compensation or benefits or establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan, or any other increase in the
compensation payable or to become payable to any executive officers of Company,
(vi) any issuance or
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sale of any stock, notes, bonds or other securities other than pursuant to the
exercise of outstanding securities, or entering into any agreement with respect
thereto, (vii) any amendment to the Company's charter or bylaws, (viii) other
than in the ordinary course of business, any (x) purchase, sale, assignment or
transfer of any material assets, (y) mortgage, pledge or the institution of any
lien, change or other Encumbrance on any material assets or properties, tangible
or intangible, except for liens for taxes not yet delinquent or (z) waiver of
any rights of material value or cancellation or any material debts or claims,
(ix) any incurrence of any material liability (absolute or contingent), except
for current liabilities and obligations incurred in the ordinary course of
business consistent with past practice, (x) any incurrence of any damage,
destruction or similar loss, whether or not covered by insurance, materially
affecting the business or properties of Company, or (xi) any entering into any
transaction of a material nature other than in the ordinary course of business,
consistent with past practices.
SECTION 4.09 Employee Benefit Plans; Labor Matters.
(a) With respect to each employee benefit fund, plan, program, arrangement
and contract (including, without limitation, any 'employee benefit plan', as
defined in Section 3(3) of ERISA) maintained, sponsored or contributed to or
required to be contributed to by Company or other trade or business (whether or
not incorporated) treated as a single employer with Company (a 'Company ERISA
Affiliate') pursuant to Code Section 414(b), (c), (m) or (o), or with respect to
which Company or any Company ERISA Affiliate could incur liability under
Section 4069, 4212(c) or 4204 of ERISA or Section 412 of the Code (the 'Company
Benefit Plans'), Company has delivered or made available to Parent a true,
complete and correct copy of (i) such Company Benefit Plan and the most recent
summary plan description related to such Company Benefit Plan, if a summary plan
description is required therefor, (ii) each trust agreement or other funding
arrangement relating to such Company Benefit Plan, (iii) the most recent annual
report (Form 5500) filed with the IRS with respect to such Company Benefit Plan,
(iv) the most recent actuarial report or financial statement relating to such
Company Benefit Plan and (v) the most recent determination letter issued by the
IRS with respect to such Company Benefit Plan, if it is intended to be qualified
under Section 401(a) of the Code. Neither Company nor any Company ERISA
Affiliate nor, to the Knowledge of Company, any other person or entity, has any
express or implied commitment, whether legally enforceable or not, to modify,
change or terminate any Company Benefit Plan, other than with respect to a
modification, change or termination required by ERISA or the Code.
(b) Each Company Benefit Plan has been administered in all material respects
in accordance with its terms and all applicable laws, including, without
limitation, ERISA and the Code, and all contributions required to be made under
the terms of any of the Company Benefit Plans as of the date of this Agreement
have been timely made or have been reflected on the most recent balance sheet
filed or incorporated by reference in the Company Reports prior to the date of
this Agreement. With respect to the Company Benefit Plans, to the Knowledge of
the Company, no event has occurred and there exists no condition or set of
circumstances in connection with which Company or any Company ERISA Affiliate
could be subject to any material liability (other than for routine benefit
liabilities) under the terms of such Company Benefit Plans, ERISA, the Code or
any other applicable Law.
(c) Company on behalf of itself and all of the Company ERISA Affiliates
hereby represents that: (i) the Company Benefit Plan and its trust or other
funding arrangement which is intended to be qualified under Section 401(a),
401(k), 401(m), 4975(e)(1) or 501(a), as applicable, of the Code is a
standardized, prototype plan which has an opinion letter from the IRS as to its
qualified status under the Code, and, to the Knowledge of the Company, no fact
or event has occurred to adversely affect the qualified status of such Company
Benefit Plan or the exempt status of any related trust; (ii) to the Knowledge of
the Company, there has been no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to any Company
Benefit Plan; (iii) each Company Benefit Plan can be amended, terminated or
otherwise discontinued after the Effective Time in accordance with its terms,
without liability, other than (A) liability for ordinary administrative expenses
typically incurred in a termination event or (B) if the Company Benefit Plan is
a pension benefit plan subject to Part 2 of Title I of ERISA, liability for the
accrued benefits as of the date of such termination (if and to the extent
required by ERISA) to the extent that either there are sufficient assets set
aside in a trust or insurance contract to satisfy such liability or such
liability is
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reflected on the most recent balance sheet filed or incorporated by reference in
the Company Reports prior to the date of this Agreement. No suit, administrative
proceeding, action or other litigation has been brought, or, to the Knowledge of
the Company, is threatened, against or with respect to any Company Benefit Plan,
including any audit or inquiry by the Internal Revenue Service or United States
Department of Labor (other than routine benefits claims).
(d) No Company Benefit Plan is a multiemployer pension plan (as defined in
Section 3(37) of ERISA) or other pension plan subject to Title IV of ERISA and
neither the Company nor any Company ERISA Affiliate has sponsored or contributed
to or been required to contribute to a multiemployer pension plan or other
pension plan subject to Title IV of ERISA. No material liability under Title IV
of ERISA has been incurred by Company or any Company ERISA Affiliate that has
not been satisfied in full, and no condition exists that presents a material
risk to Company or any Company ERISA Affiliate of incurring or being subject
(whether primarily, jointly or secondarily) to a material liability thereunder.
None of the assets of Company or any Company ERISA Affiliate is, or may
reasonably be expected to become, the subject of any lien arising under ERISA or
Section 412(n) of the Code.
(e) With respect to each Company Benefit Plan that is subject to Title IV or
Part 3 of Title I of ERISA or Section 412 of the Code, (i) no reportable event
(within the meaning of Section 4043 of ERISA, other than an event that is not
required to be reported before or within 30 days of such event) has occurred or
is expected to occur, (ii) there was not an accumulated funding deficiency
(within the meaning of Section 302 of ERISA or Section 412 of the Code), whether
or not waived, as of the most recently ended plan year of such Company Benefit
Plan; and (iii) there is no 'unfunded benefit liability' (within the meaning of
Section 4001(a)(18) of ERISA).
(f) Company has scheduled on Schedule 4.09(f) of the Company Disclosure
Schedule and has delivered to Parent true, complete and correct copies of
(i) all employment agreements with officers and all consulting agreements of
Company providing for annual compensation in excess of $100,000, (ii) all
severance plans, agreements, programs and policies of Company with or relating
to its employees, directors or consultants, and (iii) all plans, programs,
agreements and other arrangements of Company with or relating to its employees,
directors or consultants which contain 'change of control' provisions. Except as
set forth in Schedule 4.09(f) of the Company Disclosure Schedule, which
discloses the Company's estimate of excess parachute payments based on
assumptions described therein, no payment or benefit which will be made by
Company under any Company Benefit Plan or other arrangement will constitute an
excess parachute payment under Code Section 280G(b)(1), and the consummation of
the transactions contemplated by this Agreement will not individually or in
conjunction with any other possible event (including termination of employment)
(i) entitle any current or former employee or other service provider of Company
to severance benefits or any other payment, compensation or benefit (including
forgiveness of indebtedness), except as expressly provided by this Agreement, or
(ii) accelerate the time of payment or vesting, or increase the amount of
compensation or benefit due any such employee or service provider. The form of
indemnification agreement set forth as Exhibit 10.7 to Company's Annual Report
on Form 10-K for the year ended December 31, 1999, is identical, in all material
respects to the indemnification agreements entered into between the Company and
each of its current and future directors.
(g) Company is not a party to, and does not have any obligations under or
with respect to, any collective bargaining or other labor union contract
applicable to Persons providing services to Company and no collective bargaining
agreement is being negotiated by Company or any Person or entity that may
obligate Company thereunder. As of the date of this Agreement, there is no labor
dispute, strike, union organizing activity or work stoppage pending or, to the
Knowledge of Company, threatened against Company. As of the date of this
Agreement, to the Knowledge of Company, neither Company or any of its
representatives or employees has committed any unfair labor practice in
connection with the operation of the business of Company, and there is no charge
or complaint filed against Company by or with the National Labor Relations Board
or any comparable Governmental Entity pending or threatened in writing.
Company is in compliance in all material respects with all currently
applicable Laws and regulations respecting employment, discrimination in
employment, terms and conditions of employ-
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ment, wages, hours and occupational safety and health and employment practices,
and is not engaged in any unfair labor practice, which could result in any
material liability to Company. Company has withheld all amounts required by Law
or by agreement to be withheld from the wages, salaries, and other payments to
employees; and is not liable for any arrears of wages or any Taxes or any
penalty for failure to comply with any of the foregoing. Company is not liable
for any payment to any trust or other fund or to any Governmental Entity, with
respect to unemployment compensation benefits, social security or other benefits
or obligations for employees (other than routine payments to be made in the
normal course of business and consistent with past practice). There are no
claims pending against Company under any workers' compensation plan or policy or
for long term disability. There are no controversies pending or, to the
Knowledge of Company, threatened, between Company and any past or present
employees or independent contractors, which controversies have or could
reasonably be expected to result in an action, suit, proceeding, claim,
arbitration or investigation before Governmental Entity. To the Knowledge of the
Company, no employees of Company are in violation of any term of any employment
contract, non-disclosure agreement, noncompetition agreement or any restrictive
covenant to a former employer relating to the right of any such employee to be
employed by Company because of the nature of the business conducted or presently
proposed to be conducted by Company or to the use of trade secrets or
proprietary information of others. No employees of Company have given notice to
Company, nor is Company otherwise aware, that any such employee intends to
terminate his or her employment with Company.
(h) Except as required by Law, no Company Benefit Plan, other than the
severance agreements previously provided to Parent and listed on
Schedule 4.09(h) of the Company Disclosure Schedule, provides any of the
following retiree or post-employment benefits to any Person: medical, disability
or life insurance benefits. Company and each Company ERISA Affiliate are in
material compliance with (i) the requirements of the applicable health care
continuation and notice provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985 ('COBRA') and the regulations (including proposed
regulations) thereunder and (ii) the applicable requirements of the Health
Insurance Portability and Accountability Act of 1996 and the regulations
(including the proposed regulations) thereunder.
SECTION 4.10 Certain Tax Matters. Neither Company nor any of its Affiliates
has taken or agreed to take any action (other than actions contemplated by this
Agreement, including, without limitation, the circumstances contemplated by
Section 3.01(a)(ii)) that could reasonably be expected to prevent the Merger
from constituting a 'reorganization' under Section 368(a) of the Code. Company
is not aware of any agreement or plan to which Company or any of its Affiliates
is a party or other circumstances relating to Company or any of its Affiliates
that could reasonably be expected to prevent the Merger from so qualifying as a
reorganization under Section 368(a) of the Code.
SECTION 4.11 Contracts. Section 4.11 of the Company Disclosure Schedule sets
forth a list of each contract or agreement that is material to the business,
assets, liabilities, financial condition or results of operations of Company
(each, a 'Material Contract'). Company is not in material violation of or in
default under (nor does there exist any condition which with the passage of time
or the giving of notice could reasonably be expected to cause such a material
violation of or material default under) any Material Contract. Each Material
Contract is in full force and effect and is a legal, valid and binding
obligation of Company and, to the Knowledge of Company, each of the other
parties thereto, enforceable in accordance with its terms.
SECTION 4.12 Litigation. There is no suit, claim, action, proceeding or
investigation pending or, to the Knowledge of Company, threatened in writing
against Company and, to the Knowledge of the Company, there are no existing
facts or circumstances that could reasonably be expected to result in such a
suit, claim, action, proceeding or investigation, and on or before the Closing,
there will be no suit, claim, action proceeding, pending or, to the Knowledge of
Company, threatened in writing that could reasonably be expected to have a
Company Material Adverse Effect. Company is not aware of any facts or
circumstances which could reasonably be expected to result in the denial of
insurance coverage under policies issued to Company in respect of such suits,
claims, actions, proceedings and investigations, except in any case as could not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Company is not subject to any outstanding order, writ,
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injunction or decree which could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect or materially interfere with
Company's ability to consummate the transactions contemplated herein.
SECTION 4.13 Environmental Matters. Except as could not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, (i) Company is in compliance with all applicable Environmental Laws and
all Company Permits required by Environmental Laws; (ii) all past noncompliance
of Company with Environmental Laws or Environmental Permits has been resolved
without any pending, ongoing or future obligation, cost or liability; and
(iii) Company has not released a Hazardous Material at, or transported a
Hazardous Material to or from, any real property currently or formerly owned,
leased or occupied by Company in violation of any Environmental Law.
SECTION 4.14 Intellectual Property.
(a) All patents (including, without limitation, all U.S. and foreign
patents, patent applications, patent disclosures, and any and all divisions,
continuations, continuations-in-part, reissues, re-examinations and extensions
thereof); design rights, trademarks, trade names and service marks (whether or
not registered); trade dress; Internet domain names; copyrights (whether or not
registered) and any renewal rights therefor; sui generis database rights; data;
statistical models; technology; inventions; supplier lists; trade secrets and
know-how; computer software programs or applications in both source and object
code form; databases; technical documentation of such software programs and
databases ('Technical Documentation'); registrations and applications for any of
the foregoing and all other tangible or intangible proprietary information or
materials that are or have been used in (including, without limitation, in the
development of) Company's business and/or in any product, technology or process
(i) currently being or formerly manufactured, published or marketed by Company
or (ii) previously or currently under development for possible future
manufacturing, publication, marketing or other use by Company are hereinafter
referred to as the 'Company Intellectual Property.'
(b) Section 4.14 (b) of the Company Disclosure Schedule contains a true and
complete list of Company's patents, patent applications, registered trademarks,
trademark applications, common law trademarks, trade names, registered service
marks, service mark applications, common law service marks, Internet domain
names, Internet domain name applications, copyright registrations and
applications and other filings and formal actions made or taken pursuant to
Federal, state, local and foreign laws by Company to protect its interests in
Company Intellectual Property, and includes details of all due dates for further
filings, maintenance, payments or other actions falling due in respect of
Company Intellectual Property within twelve (12) months of the Closing Date. All
of Company's patents, patent applications, registered trademarks, trademark
applications, registered service marks and service mark registrations, and
registered copyrights remain in good standing with all fees and filings due as
of the Closing Date duly made and the due dates specified in the Company
Disclosure Schedule are accurate and complete.
(c) Section 4.14(c) of the Company Disclosure Schedule contains a true and
complete list of the registrations that Company has obtained anywhere in the
World in relation to the processing of data. Company has made all such
registrations which it is required to have made and is in good standing with
respect to such registrations with all fees due as of the Effective Time duly
made.
(d) Company Intellectual Property contains only those items and rights which
are: (i) owned by Company; (ii) in the public domain; or (iii) rightfully used
by Company pursuant to a valid and enforceable license (the 'Company Licensed
Intellectual Property'), the parties, date, term and subject matter of each such
license agreement (each, a 'License Agreement') being set forth on
Section 4.14(d) of the Company Disclosure Schedule. Company has all rights in
Company Intellectual Property necessary to carry out Company's current
activities and Company's future activities to the extent such future activities
are already planned (and had all rights necessary to carry out its former
activities at the time such activities were being conducted), including without
limitation, to the extent required to carry out such activities, rights to make,
use, reproduce, modify, adopt, create derivative works based on, translate,
distribute (directly and indirectly), transmit, display and perform publicly,
license, rent and lease and, other than with respect to Company Licensed
Intellectual Property, assign and sell, Company Intellectual Property.
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(e) The reproduction, manufacturing, distribution, licensing, sublicensing,
sale or any other exercise of rights in any Company Intellectual Property,
product, work, technology or process as now used or offered or proposed for use,
licensing or sale by Company does not infringe on any patent, design right,
trademark, trade name, service mark, trade dress, Internet domain name,
copyright, database, statistical model, technology, invention, supplier list,
trade secret, know-how, computer software program or application of any person,
anywhere in the World. No claims (i) challenging the validity, effectiveness or,
other than with respect to Company Licensed Intellectual Property, ownership by
Company of any Company Intellectual Property, or (ii) to the effect that the
use, distribution, licensing, sublicensing, sale or any other exercise of rights
in any product, work, technology or process as now used or offered or proposed
for use, licensing, sublicensing or sale by Company or its agents or use by its
customers infringes or will infringe on any intellectual property or other
proprietary or personal right of any person, have been asserted or, to the
Knowledge of Company, are threatened by any person, nor are there any valid
grounds for any bona fide claim of any such kind. All of the rights within
Company Intellectual Property are enforceable and subsisting. To the Knowledge
of Company, there is no unauthorized use, infringement or misappropriation of
any Company Intellectual Property by any third party, employee or former
employee.
(f) All personnel, including employees, agents, consultants and contractors,
who have contributed to or participated in the conception and development of
Company Intellectual Property on behalf of Company, have executed nondisclosure
agreements in the form set forth in Section 4.14 (f) of the Company Disclosure
Schedule and either (i) have been a party to an enforceable 'work-for-hire'
arrangement or agreements with Company in accordance with applicable national
and state law that has accorded Company full, effective, exclusive and original
ownership of all tangible and intangible property thereby arising, or (ii) have
executed appropriate instruments of assignment in favor of Company as assignee
that have conveyed to Company effective and exclusive ownership of all tangible
and intangible property thereby arising.
(g) Company is not, nor as a result of the execution or delivery of this
Agreement, or performance of Company's obligations hereunder, will Company be,
in violation of any license, sublicense, agreement or instrument to which
Company is a party or otherwise bound, nor will execution or delivery of this
Agreement, or performance of Company's obligations hereunder, cause the
diminution, termination or forfeiture of any Company Intellectual Property.
(h) Section 4.14(h) of the Company Disclosure Schedule contains a true and
complete list of all of Company's software programs (the 'Company Software
Programs'). Except with respect to software or technology in-licensed by Company
(to which Company holds appropriate and valid licenses), Company owns full and
unencumbered right and good, valid and marketable title to such Company Software
Programs free and clear of all mortgages, pledges, liens, security interests,
conditional sales agreements, charges or Encumbrances of any kind.
(i) The source code and system documentation relating to the Company
Software Programs (i) have at all times been maintained in strict confidence,
(ii) have been disclosed by Company only to employees who have a 'need to know'
the contents thereof in connection with the performance of their duties to
Company and who have executed the nondisclosure agreements referred to in this
Section 4.14, and (iii) have not been disclosed to any third party, except those
third parties set forth in Section 4.14(i) of the Company Disclosure Schedule
who have executed non-disclosure agreements with Company.
(j) Company has taken all reasonable steps, in accordance with normal
industry practice, to preserve and maintain complete notes and records relating
to Company Intellectual Property to cause the same to be readily understood,
identified and available.
(k) The Company Software Programs (i) have been designed to ensure year 2000
compatibility, which includes, but is not limited to, date data century
recognition, and calculations that accommodate same century and multi-century
formulas and date values; (ii) operate and will operate in accordance with their
specifications prior to, during and after the calendar year 2000 AD; and
(iii) shall not end abnormally or provide invalid or incorrect results as a
result of date data, specifically including date data which represents or
references different centuries or more than one century.
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(l) Company Intellectual Property is free and clear of any and all
mortgages, pledges, liens, security interests, conditional sale agreements,
charges or Encumbrances of any kind.
(m) Except as set forth in Section 4.14(m) of the Company Disclosure
Schedule, Company does not owe any royalties or other payments to third parties
in respect of Company Intellectual Property. All royalties or other payments set
forth in Section 4.14(m) of the Company Disclosure Schedule that have accrued
prior to the Effective Time have been paid.
(n) Company uses commercially reasonable efforts to regularly scan the
Company Software Programs and the Company Intellectual Property with
'best-in-class' virus detection software. To the Knowledge of the Company,
Company Software Programs and other Company Intellectual Property contain no
'viruses.' For the purposes of this Agreement, 'virus' means any computer code
intentionally designed to disrupt, disable or harm in any manner the operation
of any software or hardware. To the Knowledge of the Company, none of the
foregoing contains any worm, bomb, backdoor, clock, timer, or other disabling
device code, design or routine which causes the software to be erased,
inoperable, or otherwise incapable of being used, either automatically or upon
command by any party.
(o) Company has implemented all reasonable steps which are known in the
information systems industry and which constitute best practices in the physical
and electronic protection of its information assets from unauthorized
disclosure, use or modification. Section 4.14(o) of the Company Disclosure
Schedule sets forth (i) each breach of security of which Company is aware,
(ii) its known or anticipated consequences, and (iii) the steps Company has
taken to remedy such breach.
(p) All information (the 'Database Information') contained in the databases
maintained by Company (the 'Databases') has been at all times (i) collected in
accordance with fair information collection practices (including but not limited
to (a) the standards promulgated by the Online Privacy Alliance; (b) the
standards promulgated by the Direct Marketing Association, and (c) all
applicable Federal, state and other laws, rules and regulations including but
not limited to those relating to the use of information collected from or about
consumers) so that, at a minimum and prior to submitting any information to
Company or its agents (including, but not limited to, The Gallup Organization,
Inc.), Internet users received notice of how the information will be used and a
choice whether to submit such information; and (ii) stored, maintained and used
in accordance with such notices and all Federal, state and local laws, rules and
regulations.
(q) Company has the sole and exclusive right to use and commercially exploit
the Database Information, free of consideration to any third party (including,
but not limited to, The Gallup Organization, Inc.) other than as set forth in
Section 4.14(q) of the Company Disclosure Schedule.
(r) The form of Company's customer agreement set forth in Section 4.14(r) of
the Company Disclosure Schedule is substantially similar to Company's contracts
in effect with its other customers.
SECTION 4.15 Taxes.
(a) Company and any consolidated, combined, unitary or aggregate group for
Tax purposes of which Company is or has been a member, have properly completed
and timely filed all Tax Returns required to be filed by them and have paid all
Taxes required to be shown as due thereon. Company has provided adequate
accruals in accordance with generally accepted accounting principles in its
latest financial statements contained in the Company Reports for any Taxes that
have not been paid, whether or not shown as being due on any Tax Returns. Other
than in the ordinary course of business, Company has no material liability for
unpaid Taxes accruing after the date of the Company's latest financial
statements included in the Company Reports.
(b) There is (i) no material claim for Taxes that is a lien against the
property of Company or is being asserted against Company other than liens for
Taxes not yet due and payable, (ii) no audit of any Tax Return of Company being
conducted by a Tax Authority; (iii) no extension of the statute of limitations
on the assessment of any Taxes granted by Company and currently in effect, and
(iv) no agreement, contract or arrangement to which Company is a party that may
result in the payment of any amount that would not be deductible by reason of
Section 280G or Section 404 of the Code.
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(c) There has been no change in ownership of Company that has caused the
utilization of any losses of such entities to be limited pursuant to
Section 382 of the Code, and any loss carryovers reflected on the latest
financial statements included in the Company Reports are properly computed and
reflected.
(d) Company has not been and will not be required to include any material
adjustment in taxable income for Tax period (or portion thereof) pursuant to
Section 481 or 263A of the Code or any comparable provision under state or
foreign Tax laws as a result of transactions, events or accounting methods
employed prior to the Merger.
(e) Company has not filed and will not file any consent to have the
provisions of Section 341(f)(2) of the Code (or comparable provisions of any
state Tax laws) apply to Company.
(f) Company is not a party to any Tax sharing or Tax allocation agreement,
nor does Company have any liability or potential liability to another party
under any such agreement.
(g) Company has not filed any disclosures under Section 6662 or comparable
provisions of state, local or foreign law to prevent the imposition of penalties
with respect to any Tax reporting position taken on any Tax Return.
(h) Company has not ever been a member of a consolidated, combined or
unitary group of which Company was not the ultimate parent corporation.
(i) Company has in its possession receipts for any Taxes paid to foreign Tax
authorities. Company has never been a 'personal holding company' within the
meaning of Section 542 of the Code or a 'United Sates real property holding
corporation' within the meaning of Section 897 of the Code.
SECTION 4.16 Insurance. Company is presently insured, and since its
inception has been insured, against such risks as companies engaged in a similar
business would, in accordance with good business practice, customarily be
insured. The policies of fire, theft, liability and other insurance maintained
with respect to the assets or businesses of Company provide, in the good faith
judgment of the Company's management, reasonably adequate coverage against loss.
Company has heretofore furnished to Parent a complete and correct list as of the
date hereof of all insurance policies maintained by Company, and has made
available to Parent complete and correct copies of all such policies, together
with all riders and amendments thereto. All such policies are in full force and
effect and all premiums due thereon have been paid to the date hereof. Company
has complied in all material respects with the terms of such policies.
SECTION 4.17 Properties. Company has good and valid title, free and clear of
all Encumbrances, except for Permitted Encumbrances, to all their material
properties and assets, whether tangible or intangible, real, personal or mixed,
reflected in the Company's financial statements contained in the Company's
Annual Report on Form 10-K for the period ended December 31, 1999 as being owned
by Company as of the date thereof, other than (i) any properties or assets that
have been sold or otherwise disposed of in the ordinary course of business since
the date of such financial statements, (ii) liens disclosed in the notes to such
financial statements and (iii) liens arising in the ordinary course of business
after the date of such financial statements. All buildings, and all fixtures,
equipment and other property and assets that are material to its business, held
under leases or sub-leases by Company are held under valid instruments
enforceable in accordance with their respective terms, subject to applicable
laws of bankruptcy, insolvency or similar laws relating to creditors' rights
generally and to general principles of equity (whether applied in a proceeding
in law or equity). Substantially all of Company's equipment in regular use has
been reasonably maintained and is in serviceable condition, reasonable wear and
tear excepted.
SECTION 4.18 Affiliates. Schedule 4.18 of the Company Disclosure Schedule
sets forth the names and addresses of each Person who is, in Company's
reasonable judgment, an affiliate (as such term is used in Rule 145 under the
Securities Act) of Company.
SECTION 4.19 Opinion of Financial Advisor. Veronis, Suhler & Associates Inc.
('Company Financial Advisor') has delivered to the board of directors of Company
its opinion to the effect that the Merger Consideration to be received by the
holders of shares of Company Common Stock is fair to such holders from a
financial point of view.
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SECTION 4.20 Brokers.
(a) No broker, finder or investment banker (other than Company Financial
Advisor) is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger based upon arrangements made by or on behalf of
Company.
(b) Attached hereto as Schedule 4.20(b) of the Company Disclosure Schedule
are true, complete and correct copies of all agreements between Company and the
Company Financial Advisor. Other than as attached hereto as Schedule 4.20(b) of
the Company Disclosure Schedule, there are no other agreements between Company
and the Company Financial Advisor.
SECTION 4.21 Certain Business Practices. Neither Company nor any directors,
officers, agents or employees of Company (in their capacities as such) has
(i) used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity or (ii) made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended.
SECTION 4.22 Business Activity Restriction. There is no non-competition or
other similar agreement, commitment, judgment, injunction, order or decree to
which Company is a party or subject to that has or could reasonably be expected
to have the effect of prohibiting or impairing the conduct of business by
Company. Company has not entered into any agreement under which Company is
restricted from selling, licensing or otherwise distributing any of its
technology or products to, or providing services to, customers or potential
customers or any class of customers, in any geographic area, during any period
of time or in any segment of the market or line of business.
SECTION 4.23 Privacy. The Company is, and has always been, in compliance
with its then-current privacy policy, including those posted on the Company's
Web site(s). The Company has conducted its business and maintained its data at
all times in accordance with (i) the standards promulgated by the Online Privacy
Alliance, (ii) the standards promulgated by the Direct Marketing Association,
and (iii) all applicable Federal, state and other laws, including, but not
limited to, those relating to the use of information collected from or about
consumers.
SECTION 4.24 Sections 48-103-205 and 48-103-206 of Tennessee Law Not
Applicable. The board of directors of Company has approved the Merger, this
Agreement, the Shareholder Agreements and the Shareholder Letters, and such
approval is sufficient to render inapplicable to the Merger, this Agreement, the
Shareholder Agreements and the Shareholder Letters and the transactions
contemplated by this Agreement and the Shareholder Agreements the provisions of
Sections 48-103-205 and 48-103-206 of Tennessee Law. No other state takeover
statute or similar statute or regulation applies or purports to apply to the
Merger, this Agreement, the Shareholder Agreements or the transactions
contemplated by this Agreement and the Shareholder Agreements.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Each of Parent and Merger Sub hereby represents and warrants to Company,
subject to the exceptions specifically disclosed in the Parent Disclosure
Schedule, all such exceptions to be referenced to a specific representation set
forth in this Article V or otherwise be clearly applicable to representations
hereof not specifically referenced, that:
SECTION 5.01 Organization and Qualification. Parent and Merger Sub have each
been duly organized and each is validly existing and in good standing (to the
extent applicable) under the laws of the State of Delaware, and has the
requisite corporate power and authority and all necessary governmental approvals
to own, lease and operate its properties and to carry on its business as it is
now being conducted. Each of Parent and Merger Sub is duly qualified or licensed
to do business, and each is in good standing (to the extent applicable), in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
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necessary, except for such failures to be so qualified or licensed and in good
standing that could not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.
SECTION 5.02 Certificate of Incorporation and Bylaws. The copies of each of
Parent's and Merger Sub's certificate of incorporation and bylaws previously
provided to Company by Parent are true, complete and correct copies thereof.
Such certificate of incorporation, and bylaws are in full force and effect.
SECTION 5.03 Capitalization.
(a) The authorized capital stock of Parent consists of 400,000,000 shares of
Parent Common Stock and 5,000,000 shares of preferred stock, par value $.001 per
share ('Parent Preferred Stock'). As of the close of business on November 1,
2000, (i) 123,534,944 shares of Parent Common Stock were issued and outstanding,
all of which are validly issued, fully paid and nonassessable, (ii) no shares of
Parent Common Stock are held in the treasury of Parent, (iii) no shares of
Parent Common Stock are held by any directly or indirectly owned subsidiary of
Parent, including Merger Sub (each a 'Parent Subsidiary'), and (iv) no shares of
Parent preferred stock are issued and outstanding. Except for the shares of
Parent Common Stock issuable pursuant to the Parent Stock Plans and shares of
Parent Common Stock issuable upon conversion of the Parent Convertible Notes,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character to which Parent is a party or by which Parent is
bound relating to the issued or unissued capital stock of Parent or any Parent
Subsidiary or obligating Parent or any Parent Subsidiary to issue or sell any
shares of capital stock of, or other equity interests in, Parent or any Parent
Subsidiary. All shares of Parent Common Stock subject to issuance as aforesaid,
upon issuance prior to the Effective Time on the terms and conditions specified
in the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. There are no outstanding
contractual obligations of Parent to repurchase, redeem or otherwise acquire any
shares of Parent Common Stock. There are no material outstanding contractual
obligations of Parent to provide funds to, or make any material investment (in
the form of a loan, capital contribution or otherwise) in, any Parent Subsidiary
or any other Person.
(b) All of the shares of Parent Common Stock to be issued (i) in connection
with the Merger, when issued in accordance with this Agreement, and (ii) upon
the conversion of any Company Stock Option or Company Warrant into an option or
warrant, as the case may be, to purchase shares of Parent Common Stock in
accordance with Section 3.05, when issued upon exercise thereof following the
Effective Time, will be validly issued, fully paid and nonassessable and will
not be subject to preemptive rights or similar contractual rights granted by
Parent.
SECTION 5.04 Authority Relative to This Agreement. Each of Parent and Merger
Sub has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by each of Parent and Merger Sub and the consummation by Parent and Merger Sub
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action, and no other corporate proceedings on the part
of Parent or Merger Sub are necessary to authorize this Agreement or to
consummate such transactions (other than the consent of Parent as sole
shareholder of Merger Sub and the filing and recordation of the DE Certificate
of Merger as required by Delaware Law and the TN Articles of Merger as required
by Tennessee Law). This Agreement has been duly executed and delivered by each
of Parent, Original Merger Sub and Merger Sub and, assuming the due
authorization, execution and delivery by Company, constitutes a legal, valid and
binding obligation of each of Parent, Original Merger Sub and Merger Sub
enforceable against Parent, Original Merger Sub and Merger Sub in accordance
with its terms, except to the extent that enforceability hereof may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by principles of
equity regarding the availability of remedies.
SECTION 5.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Merger Sub
does not, and the performance by Parent and Merger Sub of their obligations
hereunder and the consummation of the Merger will not, (i) conflict with or
violate any provision of the certificate of incorporation or bylaws of
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Parent or any equivalent organizational documents of any Parent Subsidiary,
(ii) assuming that all consents, approvals, authorizations and permits described
in Section 5.05(b) have been obtained and all filings and notifications
described in Section 5.05(b) have been made, conflict with or violate any Law
applicable to Parent or any other Parent Subsidiary or by which any property or
asset of Parent or any Parent Subsidiary is bound or affected or (iii) result in
any breach of or constitute a default (or an event which with the giving of
notice or lapse of time or both could reasonably be expected to become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
Encumbrance on any property or asset of Parent pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation.
(b) The execution and delivery of this Agreement by Parent and Merger Sub
does not, and the performance by Parent and Merger Sub of their obligations
hereunder and the consummation of the Merger will not, require any consent,
approval, authorization or permit of, or filing by Parent with or notification
by Parent to, any Governmental Entity, except pursuant to applicable
requirements of the Exchange Act, the Securities Act, Blue Sky Laws, the rules
and regulations of the NNM, the premerger notification requirements of the HSR
Act, if any, and the filing and recordation of the DE Certificate of Merger as
required by Delaware Law and the TN Articles of Merger as required by Tennessee
Law.
SECTION 5.06 SEC Filings; Financial Statements.
(a) Parent has timely filed all forms, reports, statements and documents
required to be filed by it (A) with the SEC and the NNM since February 20, 1998
(collectively, together with any such forms, reports, statements and documents
Parent may file subsequent to the date hereof until the Closing, the 'Parent
Reports') and (B) with any other Governmental Entities. Each Parent Report (i)
was prepared in accordance with the requirements of the Securities Act, the
Exchange Act or the NNM, as the case may be, and (ii) did not at the time it was
filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each form, report, statement and document referred to in
clause (B) of this paragraph was prepared in all material respects in accordance
with the requirements of applicable Law. No Parent Subsidiary is subject to the
periodic reporting requirements of the Exchange Act or required to file any
form, report or other document with the SEC, the NNM, any other stock exchange
or any other comparable Governmental Entity.
(b) Except as provided in the Parent Reports, each of the consolidated
financial statements (including, in each case, any notes thereto) contained in
the Parent Reports was prepared in accordance with U.S. GAAP (except, in the
case of unaudited financial statements, for the absence of footnotes and subject
to normal year end adjustments, which adjustments are not material) applied on a
consistent basis throughout the periods indicated (except as may be indicated in
the notes thereto) and each presented fairly the consolidated financial position
of Parent and the Parent Subsidiaries as at the respective dates thereof, and
their consolidated results of operations, shareholders' equity and cash flows
for the respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring
immaterial year-end adjustments).
(c) Except as and to the extent set forth or reserved against on the
consolidated balance sheet of Parent and the Parent Subsidiaries as reported in
the Parent Reports, none of Parent or any Parent Subsidiary has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) that would be required to be reflected on a balance sheet or in notes
thereto prepared in accordance with U.S. GAAP, except for liabilities or
obligations incurred in the ordinary course of business consistent with past
practice since December 31, 1999.
SECTION 5.07 Certain Tax Matters. Neither Parent nor, to the Knowledge of
Parent, any of its Affiliates has taken or agreed to take any action (other than
actions contemplated by this Agreement, including, without limitation, as
contemplated by Section 3.01(a)(ii)) that could reasonably be expected to
prevent the Merger from constituting a 'reorganization' under Section 368(a) of
the Code. Parent is not aware of any agreement, plan or other circumstance that
could reasonably be expected to prevent the Merger from so qualifying as a
reorganization under Section 368(a) of the Code.
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SECTION 5.08 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of Parent.
SECTION 5.09 No Parent Material Adverse Effect. Since December 31, 1999,
there has been no Parent Material Adverse Effect.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business Pending the Closing. Company agrees that,
between the date of this Agreement and the Effective Time, unless Parent shall
otherwise agree in writing, (x) the business of Company shall be conducted only
in, and Company shall not take any action except in, the ordinary course of
business consistent with past practice and (y) Company shall use its reasonable
efforts to keep available the services of such of the current officers,
significant employees and consultants of Company and to preserve the current
relationships of Company with such of the corporate partners, customers,
suppliers and other Persons with which Company has significant business
relations in order to preserve substantially intact its business organization.
Without limitation, Company shall not, between the date of this Agreement and
the Effective Time, directly or indirectly, do, or agree to do, any of the
following without the prior written consent of Parent:
(a) amend or otherwise change its charter or bylaws or equivalent
organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease, license,
guarantee or encumber, or authorize the issuance, sale, pledge, disposition,
grant, transfer, lease, license or Encumbrance of, (i) any shares of capital
stock of Company of any class, or securities convertible into or
exchangeable or exercisable for any shares of such capital stock, or any
options, warrants or other rights of any kind to acquire any shares of such
capital stock, or any other ownership interest (including, without
limitation, any phantom interest), of Company, other than the issuance of
shares of Company Common Stock pursuant to the exercise of stock options,
warrants or convertible securities therefor outstanding as of the date
hereof or expressly permitted by this Agreement and other than stock options
issued in accordance with the guidelines set forth in Section 6.01(b) of
Company Disclosure Schedule, or (ii) any material property or assets of
Company except transactions pursuant to existing contracts;
(c) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or Person or any
division thereof, other than the purchase of assets in the ordinary course
of business consistent with past practice; (ii) incur any indebtedness for
borrowed money (other than indebtedness with respect to working capital in
amounts consistent with past practice) or issue any debt securities or
assume, guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any Person for borrowed money or make
any loans or advances material to the business, assets, liabilities,
financial condition or results of operations of Company; (iii), except as
listed in Section 6.01(c) of Company Disclosure Schedule, terminate, cancel
or request any material change in, or agree to any material change in, any
Material Contract; (iv) make or authorize any capital expenditure, other
than capital expenditures in the ordinary course of business consistent with
past practice that are disclosed in writing to Parent and that are not, in
the aggregate, in excess of $25,000 for Company; or (v) enter into or amend
any contract, agreement, commitment or arrangement that, if fully performed,
would not be permitted under this Section 6.01(c);
(d) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(e) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock except
repurchases of unvested shares at cost in connection with the termination of
the employment relationship with any employee pursuant to stock option or
purchase agreements in effect on the date hereof;
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(f) amend or change the period (from that currently provided for) of
exercisability of options granted under the Company Stock Plans or authorize
cash payments in exchange for any Company Stock Options granted under any of
such plans;
(g) amend the terms of, repurchase, redeem or otherwise acquire any of
its securities, except repurchases of unvested shares at cost in connection
with the termination of the employment relationship with any employee
pursuant to stock option or purchase agreements in effect on the date
hereof;
(h) increase the compensation payable or to become payable to its
directors, officers, consultants or employees, grant any rights to
retention, severance or termination pay to, or enter into any employment,
retention or severance agreement which provides benefits upon a change in
control of Company that would be triggered by the Merger with, any director,
officer, consultant or other employee of Company who is not currently
entitled to such benefits from the Merger, establish, adopt, enter into or
amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer,
consultant or employee of Company, except to the extent required by
applicable Law or the terms of a collective bargaining agreement, or enter
into or amend any contract, agreement, commitment or arrangement between
Company and any of Company's directors, officers, consultants or employees;
(i) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction of claims, liabilities or
obligations (A) in the ordinary course of business and consistent with past
practice or (B) claims, liabilities or obligations reflected or reserved
against on the latest balance sheet included in the Company Reports or
(C) as otherwise set forth on Schedule 6.01 of the Company Disclosure
Schedule;
(j) except as required by any Governmental Entity, make any change with
respect to Company's accounting policies, principles, methods or procedures,
including, without limitation, revenue recognition policies, other than as
required by U.S. GAAP;
(k) make any Tax election or settle or compromise any Tax liability; or
(l) authorize or enter into any formal or informal agreement or
otherwise make any commitment to do any of the foregoing or to take any
action which would make any of the representations or warranties of Company
contained in this Agreement untrue or incorrect or prevent Company from
performing or cause Company not to perform its covenants hereunder or result
in any of the conditions to the Merger set forth herein not being satisfied.
SECTION 6.02 Notices of Certain Events. Each of Parent and Company shall
give prompt notice to the other of (i) any notice or other communication from
any Person alleging that the consent of such Person is or may be required in
connection with the Merger; (ii) any notice or other communication from any
Governmental Entity in connection with the Merger; (iii) any actions, suits,
claims, investigations or proceedings commenced or, to the Knowledge of Company
or the Knowledge of Parent, as the case may be, threatened in writing against,
relating to or involving or otherwise affecting Parent or Company, respectively,
which, if pending on the date hereof, would have been required to have been
disclosed in this Agreement, or that relate to the consummation of the Merger;
(iv) the occurrence of a default or event that, with the giving of notice or
lapse of time or both, will become a default under any Company Material Contract
and (v) any change that could reasonably be expected to have a Parent Material
Adverse Effect or Company Material Adverse Effect, or to delay or impede the
ability of Parent or Company, respectively, to perform their respective
obligations pursuant to this Agreement and to effect the consummation of the
Merger.
SECTION 6.03 Access to Information; Confidentiality.
(a) Except as required pursuant to any confidentiality agreement or similar
agreement or arrangement to which Parent or Company is a party or pursuant to
applicable Law or the regulations or requirements of any stock exchange or other
regulatory organization with whose rules a party hereto is required to comply,
from the date of this Agreement to the Effective Time, Parent shall and Company
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shall (i) provide to the other (and its officers, directors, employees,
accountants, consultants, legal counsel, agents and other representatives
(collectively, 'Representatives')) access at reasonable times upon prior notice
to its and its subsidiaries' officers, employees, agents, properties, offices
and other facilities and to the books and records thereof, and (ii) furnish
promptly such information concerning its and its subsidiaries' business,
properties, contracts, assets, liabilities and personnel as the other party or
its Representatives may reasonably request. No investigation conducted pursuant
to this Section 6.03 shall affect or be deemed to modify any representation or
warranty made in this Agreement.
(b) The parties hereto shall comply with, and shall cause their respective
Representatives to comply with, all of their respective obligations under the
Confidentiality Agreements with respect to the information disclosed pursuant to
this Agreement.
SECTION 6.04 No Solicitation of Transactions.
(a) Until this Agreement has been terminated as provided herein, Company
shall not, directly or indirectly, and shall cause its Representatives not to,
directly or indirectly, solicit, initiate or encourage (including by way of
furnishing nonpublic information), any inquiries or the making of any proposal
or offer (including, without limitation, any proposal or offer to its
shareholders) that constitutes, or may reasonably be expected to lead to, any
Company Competing Transaction, or enter into or maintain or continue discussions
or negotiate with any Person in furtherance of such inquiries or to obtain a
Company Competing Transaction, or agree to or endorse any Company Competing
Transaction, or authorize or permit any of Company's Representatives or
subsidiaries, or any Representative retained by Company's subsidiaries, to take
any such action; provided, however, that nothing contained in this Section 6.04
shall prohibit the board of directors of Company (i) from complying with
Rule 14d-9 or 14e-2(a) promulgated under the Exchange Act with regard to a
tender or exchange offer not made in violation of this Section 6.04 or
(ii) prior to receipt of the approval by the shareholders of Company of this
Agreement and the Merger from providing information (subject to a
confidentiality agreement at least as restrictive as the Confidentiality
Agreements) in connection with, and negotiating, another unsolicited, bona fide
written proposal regarding a Company Competing Transaction that (x) Company's
board of directors shall have concluded in good faith, based in part on the
advice of independent outside counsel, that failure to take such action would be
a breach of the Company's board of directors' fiduciary duties to Company's
shareholders under applicable law, (y) if any cash consideration is involved,
shall not be subject to any financing contingency, and with respect to which
Company's board of directors shall have determined (based in part on the advice
of Company's independent financial advisors of nationally recognized reputation)
in the proper exercise of its fiduciary duties to Company's shareholders that
the acquiring party is capable of consummating such Company Competing
Transaction on the terms proposed, and (z) Company's board of directors shall
have determined (based in part on the advice of Company's independent financial
advisors of nationally recognized reputation) in the proper exercise of its
fiduciary duties to Company's shareholders that such Company Competing
Transaction provides greater value to the shareholders of Company than the
Merger (and Company's independent financial advisors of nationally recognized
reputation opine in writing that such Company Competing Transaction is superior
from a financial point of view) (any such Company Competing Transaction
fulfilling each of the requirements of this clause (ii) of Section 6.04 being
referred to herein as a 'Company Superior Proposal'). Any violation of the
restrictions set forth in this Section 6.04 by any Representative of Company,
whether or not such Person is purporting to act on behalf of Company or
otherwise, shall be deemed to be a breach of this Section 6.04 by Company.
Company shall notify Parent promptly if any proposal or offer, or any inquiry or
contact with any Person with respect thereto, regarding a Company Competing
Transaction is made, such notice to include the identity of the Person making
such proposal, offer, inquiry or contact, and the terms of such Company
Competing Transaction and of any modifications of the terms thereof. In
connection with any such potential Company Competing Transaction, prior to
furnishing any information or entering into any discussions or negotiations with
any Person making such proposal, Company shall provide to Parent written notice
to the effect that Company is furnishing information to, or entering into
discussions or negotiations with, such Person and Company shall keep Parent
promptly informed of the status of the terms and conditions of any such
discussions or negotiations. Prior to accepting a Company Competing Proposal,
Company shall provide Parent with 24 hours' written notice of such intention.
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(b) Company immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with respect
to a Company Competing Transaction. Company shall not release any third party
from, or waive any provision of, any confidentiality or standstill agreement to
which it is a party.
SECTION 6.05 Tax-Free Transaction.
(a) From and after the date of this Agreement, each party hereto shall use
all reasonable efforts to cause the Merger to qualify, and shall not knowingly
take any actions or cause any actions (except as contemplated by this Agreement)
to be taken which could reasonably be expected to prevent the Merger from
qualifying as a 'reorganization' under Section 368(a) of the Code.
(b) In the event Parent elects to pay Merger Consideration pursuant to
Section 3.01(a)(i), each of Company and Parent shall execute and deliver to the
other a certificate, in form reasonably acceptable to Company and Parent, as the
case may be, signed by an officer of Company or Parent, as the case may be,
setting forth factual representations and covenants that will serve as a basis
for the tax opinion required under Section 8.02(c) hereof. Company shall use its
best efforts to obtain a tax opinion that would satisfy the condition to the
Closing set forth in Section 8.02(c).
SECTION 6.06 Control of Operations. Nothing contained in this Agreement
shall give Parent, directly or indirectly, the right to control or direct the
operations of Company prior to the Effective Time. Prior to the Effective Time,
Company shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
SECTION 6.07 Further Action; Consents; Filings.
(a) Upon the terms and subject to the conditions hereof, each of the parties
hereto shall use all reasonable efforts to (i) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
Merger, (ii) obtain from Governmental Entities any consents, licenses, permits,
waivers, approvals, authorizations or orders required to be obtained or made by
Parent or Company in connection with the authorization, execution and delivery
of this Agreement and the consummation of the Merger and (iii) make all
necessary filings, and thereafter make any other required or appropriate
submissions, with respect to this Agreement and the Merger required under (A)
the rules and regulations of the NNM, (B) the Securities Act, the Exchange Act
and any other applicable Federal or state securities Laws, (C) the HSR Act, if
any, and (D) any other applicable Law. The parties hereto shall cooperate and
consult with each other in connection with the making of all such filings,
including by providing copies of all such documents to the nonfiling parties and
their advisors prior to filing, and none of the parties shall file any such
document if any of the other parties shall have reasonably objected to the
filing of such document. No party shall consent to any voluntary extension of
any statutory deadline or waiting period or to any voluntary delay of the
consummation of the Merger at the behest of any Governmental Entity without the
consent and agreement of the other parties hereto, which consent shall not be
unreasonably withheld or delayed.
(b) Each of Company and Parent will give any notices to third Persons, and
use, and cause their respective subsidiaries to use, reasonable efforts to
obtain any consents from third Persons necessary, proper or advisable to
consummate the transactions contemplated by this Agreement.
SECTION 6.08 Additional Reports. Company and Parent shall each furnish to
the other copies of any reports of the type referred to in Sections 4.07 and
5.06, which it files with the SEC on or after the date hereof, and Company and
Parent, as the case may be, covenant and warrant that as of the respective dates
thereof, such reports will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Any consolidated interim financial statements included in
such reports (including any related notes and schedules) will fairly present the
financial position of Company and its consolidated subsidiaries or Parent and
its consolidated subsidiaries, as the case may be, as of the dates thereof and
the results of operations and changes in financial position or other information
included therein for the periods or as of the date then ended (subject, where
appropriate, to normal year-end adjustments), in each case in accordance with
past
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practice and U.S. GAAP (except for the absence of footnotes) consistently
applied during the periods involved (except as otherwise disclosed in the notes
thereto).
SECTION 6.09 Tax Information. Company shall provide the following
information to Parent not later than two weeks after the date of this Agreement:
(i) a complete list of the types of Tax Returns being filed by Company in each
taxing jurisdiction, (ii) a list of all closed years with respect to each such
type of Tax Return filed in each jurisdiction, (iii) a list of any deferred
intercompany gain with respect to transactions to which Company has been a party
and (iv) a list of the acquisition date, original cost, accumulated
depreciation, adjusted tax basis, and methods of depreciation for all
depreciable and amortizable assets of the Company. Company shall provide Parent
and its accountants, counsel and other representatives reasonable access, during
normal business hours during the period prior to the Effective Time, to all of
Company's Tax Returns and other records and workpapers relating to Taxes.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Registration Statement; Proxy Statement.
(a) As promptly as practicable after the execution of this Agreement, Parent
and Company shall jointly prepare and shall file with the SEC a document or
documents that will constitute (i) the registration statement on Form S-4 of
Parent (together with all amendments thereto, the 'Registration Statement'), in
connection with the registration under the Securities Act of Parent Common Stock
to be issued to Company's shareholders pursuant to the Merger and (ii) the proxy
statement with respect to the Merger relating to the Company Shareholders'
Meeting (together with any amendments thereto, the 'Proxy Statement'). Copies of
the Proxy Statement shall be provided to the NNM in accordance with its rules.
Each of the parties hereto shall use all reasonable efforts to cause the
Registration Statement to become effective as promptly as practicable after the
date hereof, and, prior to the effective date of the Registration Statement, the
parties hereto shall take all action required under any applicable Laws in
connection with the issuance of shares of Parent Common Stock pursuant to the
Merger. Parent or Company, as the case may be, shall furnish all information
concerning Parent or Company as the other party may reasonably request in
connection with such actions and the preparation of the Registration Statement
and the Proxy Statement. Each of Parent and Company shall notify the other of
the receipt of any comments from the SEC on the Registration Statement and the
Proxy Statement and of any requests by the SEC for any amendments or supplements
thereto or for additional information and shall provide to each other promptly
copies of all correspondence between Parent, Company or any of their
representatives and advisors and the SEC. As promptly as practicable after the
effective date of the Registration Statement, the Proxy Statement shall be
mailed to the shareholders of Company. Each of the parties hereto shall cause
the Proxy Statement to comply as to form and substance in all material respects
with the applicable requirements of (i) the Exchange Act, (ii) the Securities
Act and (iii) the rules and regulations of the NNM.
(b) The Proxy Statement shall include, with respect to Company and its
shareholders, (i) the approval of the Merger and the recommendation of the board
of directors of Company to Company's shareholders that they vote in favor of
approval of this Agreement and the Merger, unless a withdrawal of such approval
and recommendation is required following receipt by Company of a Company
Superior Proposal, and (ii) the opinion of Company Financial Advisor referred to
in Section 4.19.
(c) No amendment or supplement to the Proxy Statement or the Registration
Statement shall be made without the approval of Parent and Company, which
approval shall not be unreasonably withheld or delayed. Each of the parties
hereto shall advise the other parties hereto, promptly after it receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order, of
the suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or of any
request by the SEC for amendment of the Proxy Statement or the Registration
Statement or comments thereon and responses thereto or requests by the SEC for
additional information.
(d) None of the information supplied by Company for inclusion or
incorporation by reference in the Registration Statement or the Proxy Statement
shall, at the respective times filed with the SEC or
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other regulatory agency and, in addition, (A) in the case of the Proxy
Statement, at the date it or any amendments or supplements thereto are mailed to
shareholders of Company at the time of the Company Shareholders' Meeting and at
the Effective Time and (B) in the case of the Registration Statement, when it
becomes effective under the Securities Act and at the Effective Time, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event or circumstance
relating to Company or its officers or directors, should be discovered by
Company that should be set forth in an amendment or a supplement to the
Registration Statement or the Proxy Statement, Company shall promptly inform
Parent. All documents that Company is responsible for filing with the SEC in
connection with the Merger will comply as to form in all material respects with
the applicable requirements of the rules and regulations of the Securities Act
and the Exchange Act.
(e) None of the information supplied by Parent for inclusion or
incorporation by reference in the Registration Statement or the Proxy Statement
shall, at the respective times filed with the SEC or other regulatory agency
and, in addition, (A) in the case of the Proxy Statement, at the date it or any
amendments or supplements thereto are mailed to shareholders of Company at the
time of the Company Shareholders' Meeting and at the Effective Time and (B) in
the case of the Registration Statement, when it becomes effective under the
Securities Act and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If, at any time prior
to the Effective Time, any event or circumstance relating to Parent or any
Parent Subsidiary, or their respective officers or directors, should be
discovered by Parent that should be set forth in an amendment or a supplement to
the Registration Statement or the Proxy Statement, Parent shall promptly inform
Company. All documents that Parent is responsible for filing with the SEC in
connection with the Merger will comply as to form in all material respects with
the applicable requirements of the rules and regulations of the Securities Act
and the Exchange Act.
SECTION 7.02 Company Shareholders' Meeting. Company shall call and hold the
Company Shareholders' Meeting, as promptly as practicable after the date hereof
for the purpose of voting upon the approval of this Agreement and the Merger
pursuant to the Proxy Statement, and Company shall use all reasonable efforts to
hold the Company Shareholders' Meeting as soon as practicable after the date on
which the Registration Statement becomes effective (but in no event prior to the
date that is twelve trading days following the first public announcement by
Parent of Parent's financial results for the year ended December 31, 2000).
Company shall use all reasonable efforts to solicit from its shareholders
proxies in favor of the approval of this Agreement and the Merger pursuant to
the Proxy Statement and shall take all other action necessary or advisable to
secure the vote or consent of shareholders required by Tennessee Law or
applicable stock exchange requirements to obtain such approval. Each of the
parties hereto shall take all other action necessary or, in the opinion of the
other parties hereto, advisable to promptly and expeditiously secure any vote or
consent of shareholders required by applicable Law and such party's certificate
of incorporation or charter and bylaws to effect the Merger.
SECTION 7.03 Affiliates. Parent shall be entitled to place legends on the
certificates evidencing any of the Parent Common Stock to be received by (i) any
Affiliate of Company or (ii) any Person Parent reasonably identifies (by written
notice to Company) as being a Person who may be deemed an 'affiliate' within the
meaning of Rule 145 promulgated under the Securities Act, and to issue
appropriate stop transfer instructions to the transfer agent for such Parent
Common Stock.
SECTION 7.04 Directors' and Officers' Insurance.
(a) The provisions with respect to immunities and indemnification that are
set forth in Merger Sub's present certificate of incorporation, bylaws and
contractual arrangements in effect on the date hereof other than the provisions
to be modified as provided in Section 8.03(e) of the Company Disclosure
Schedule, shall survive the Merger and not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who at or at any
time prior to the Effective Time were directors, officers, employees or agents
of Company.
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(b) In the event Company or Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers a material amount of its properties
and assets to any person in a single transaction or a series of transactions,
then, and in each such case, Parent will either guaranty the indemnification
obligations referred to in this Section 7.04 or will make or cause to be made
proper provision so that the successors and assigns of Company or Surviving
Corporation, as the case may be, assume the indemnification obligations
described herein for the benefit of the indemnified parties and have
substantially equal financial ability as Company (immediately prior to the
Effective Time) to satisfy the obligations of the parties pursuant to this
Section 7.04 as a condition to such merger, consolidation or transfer becoming
effective.
(c) The provisions of this Section 7.04 are (i) intended to be for the
benefit of, and will be enforceable by, each of the indemnified parties and (ii)
in addition to, and not in substitution for, any other rights to indemnification
or contribution that any such Person may have by contract or otherwise.
(d) For a period of three years after the Effective Time, Parent shall
maintain in effect the directors' and officers' liability insurance policies
maintained by Company; provided, however, that in no event shall Parent be
required to expend in any one year in excess of 150% of the annual premium
currently paid by Company for such coverage, which annual premium Company hereby
represents is $227,000; and provided further, that if the premium for such
coverage exceeds such amount, Parent shall purchase a policy with the greatest
coverage available for such 150% of the annual premium.
SECTION 7.05 No Shelf Registration. Parent shall not be required to amend or
maintain the effectiveness of the Registration Statement for the purpose of
permitting resale of the shares of Parent Common Stock received pursuant hereto
by the Persons who may be deemed to be 'affiliates' of Company within the
meaning of Rule 145 promulgated under the Securities Act.
SECTION 7.06 Public Announcements. The press release concerning this
Agreement to be released in connection with the execution and delivery of this
Agreement shall be a joint press release and, thereafter, Parent and Company
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or the Merger and
shall not issue any such press release or make any such public statement without
the prior approval of the other, except to the extent required by applicable Law
or the requirements of the rules and regulations of the NNM, in which case the
issuing party shall use all reasonable efforts to consult with the other party
before issuing any such release or making any such public statement.
SECTION 7.07 NNM Listing. Prior to the Effective Time, Parent shall use all
reasonable efforts to have the shares of Parent Common Stock issued or issuable
in connection with the Merger and approved for quotation on the NNM.
SECTION 7.08 Company Stock Options/Registration Statements on Form S-8.
Prior to the Effective Time, Company shall take, or cause to be taken, all
action necessary and appropriate to effect the assumption of Company Stock
Options and Company Warrants as contemplated by Section 3.05, including, if
applicable, amending the Company Stock Plans and Company Stock Options and
Warrants to provide that no 'cash-out' will be made in connection with the
Merger and obtaining the consent of affected optionees and warrant holders.
Parent shall reserve for issuance the number of shares of Parent Common Stock
that will be issuable upon exercise of Company Stock Options and Warrants
assumed pursuant to Section 3.05 hereof. Within 20 Business Days after the
Effective Time, Parent shall file with the SEC one or more registration
statements on Form S-8 for the shares of Parent Common Stock issuable with
respect to Company Stock Options and will maintain the effectiveness of such
registration statements for so long as any of such options or other rights
remain outstanding.
SECTION 7.09 Employee Matters. As of the Effective Time, Parent shall cause
the Surviving Corporation to honor and satisfy all obligations and liabilities
with respect to the Company Benefit Plans. Notwithstanding the foregoing, the
Surviving Corporation shall not be required to continue any particular Company
Benefit Plan after the Effective Time, and any Company Benefit Plan may be
amended or terminated in accordance with its terms and applicable law. If
requested by Parent prior to the Effective Time, Company shall take all actions
necessary and appropriate to terminate any Company Benefit Plan that is a 401(k)
plan (each, a '401(k) Plan') effective immediately preceding the
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Closing Date and no further contributions shall be made to any 401(k) Plan, and
Company shall provide to Parent (i) executed resolutions by the board of
directors of Company, as applicable, authorizing such termination.
SECTION 7.10 Warrants. Parent shall use all reasonable efforts to cause the
securities into which the Company Warrants are exercisable (after they are
assumed by Parent) to be included in the Registration Statement. As of the
Effective Time, Company shall have caused the holders of Company Warrants (a) to
terminate all registration rights with respect to the Company Warrants and the
securities underlying such warrants and (b) to waive all rights to receive
consideration other than shares of Parent Common Stock in connection with the
exercise of the Company Warrants.
SECTION 7.11 Exemption from Liability Under Section 16(b). If Company
delivers to Parent in a timely fashion prior to the Effective Time accurate
information regarding those officers and directors of Company determined by
Parent to be subject to the reporting requirements of Section 16(a) of the
Exchange Act (the 'Company Insiders'), the number of shares of Company Common
Stock held or to be held by each such Company Insider expected to be exchanged
for Parent Common Stock in the Merger, and the number and description of the
options and warrants to purchase shares of Company Common Stock held by each
Company Insider and expected to be converted into options and warrants to
purchase Parent Common Stock in the Merger, the Board of Directors of Parent, or
a committee of non-employee directors thereof (as such term is defined for
purposes of Rule 16b-3(d) under the Exchange Act), shall reasonably promptly
thereafter, and in any event prior to the Effective Time, if required, adopt a
resolution providing that the receipt by the Company Insiders of Parent Common
Stock in exchange for shares of Company Common Stock, and of options and
warrants to purchase shares of Parent Common Stock upon conversion of options
and warrants to purchase Company Common Stock, in each case pursuant to the
transactions contemplated hereby, and to the extent such securities are listed
in the information provided by Company, are approved by such Board of Directors
or by such committee thereof, and are intended to be exempt from liability
pursuant to Section 16(b) of the Exchange Act, such that any such receipt shall
be so exempt.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 Conditions to the Obligations of Each Party to Consummate the
Merger. The obligations of the parties hereto to consummate the Merger are
subject to the satisfaction or, if permitted by applicable Law, waiver of the
following conditions:
(a) the Registration Statement shall have been declared effective by the
SEC under the Securities Act and no stop order suspending the effectiveness
of the Registration Statement shall have been issued by the SEC and no
proceeding for that purpose shall have been initiated by the SEC and not
concluded or withdrawn;
(b) this Agreement and the Merger shall have been duly approved by the
requisite vote of shareholders of Company in accordance with Tennessee Law;
(c) no order, statute, rule, regulation, executive order, stay, decree,
judgment or injunction shall have been enacted, entered, promulgated or
enforced by any court or Governmental Entity which prohibits or prevents the
consummation of the Merger which has not been vacated, dismissed or
withdrawn prior to the Effective Time. Company and Parent shall use their
reasonable best efforts to have any of the foregoing vacated, dismissed or
withdrawn by the Effective Time;
(d) any waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act or any other applicable
competition, merger control or similar Law shall have expired or been
terminated; and
(e) all consents, approvals and authorizations legally required to be
obtained to consummate the Merger shall have been obtained from all
Governmental Entities, except where the failure to obtain any such consent,
approval or authorization could not reasonably be expected to result in a
Parent Material Adverse Effect or a Company Material Adverse Effect.
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SECTION 8.02 Conditions to the Obligations of Company. The obligations of
Company to consummate the Merger, or to permit the consummation of the Merger
are subject to the satisfaction or, if permitted by applicable Law, waiver of
the following further conditions:
(a) each of the representations and warranties of Parent and Merger Sub
contained in this Agreement shall be true, complete and correct in all
material respects (other than representations and warranties subject to
'materiality' or 'material adverse effect' qualifiers, which shall be true,
complete and correct in all respects) both when made and on and as of the
Effective Time as if made at and as of the Effective Time (other than
representations and warranties which address matters only as of a certain
date which shall be so true, complete and correct as of such certain date),
and Company shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of Parent to such effect;
(b) Parent and Merger Sub shall have performed or complied in all
material respects with all covenants required by this Agreement to be
performed or complied with by them on or prior to the Effective Time and
Company shall have received certificates of the Chief Executive Officer and
Chief Financial Officer of Parent and the President of Merger Sub to that
effect;
(c) If Parent elects to pay the Merger Consideration pursuant to Section
3.01(a)(i), Company shall have obtained an opinion from Company's legal
counsel in form and substance reasonably satisfactory to it substantially to
the effect that if the Merger is consummated in accordance with the
provisions of this Agreement, under current law, for federal income tax
purposes, the Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code; provided, that if Company is unable to obtain
such an opinion from its legal counsel, this condition shall be deemed to be
satisfied if Parent's legal counsel delivers an opinion to Company to the
same effect;
(d) The shares of Parent Common Stock to be issued in the Merger shall
have been authorized for listing on the NNM, subject to notice of issuance;
and
(e) Parent has provided Company with the written elections contemplated
by Section 3.01(a).
SECTION 8.03 Conditions to the Obligations of Parent. The obligations of
Parent to consummate the Merger are subject to the satisfaction or waiver of the
following further conditions:
(a) each of the representations and warranties of Company contained in
this Agreement shall be true, complete and correct in all material respects
(other than representations and warranties subject to 'materiality' or
'material adverse effect' qualifiers, which shall be true, complete and
correct in all respects) both when made and on and as of the Effective Time
as if made at and as of the Effective Time (other than representations and
warranties which address matters only as of a certain date which shall be so
true, complete and correct as of such certain date), and Parent shall have
received a certificate of the Chief Executive Officer and Chief Financial
Officer of Company to such effect;
(b) Company shall have performed or complied in all material respects
with all covenants required by this Agreement to be performed or complied
with by it on or prior to the Effective Time and Parent shall have received
a certificate of the Chief Executive Officer and Chief Financial Officer of
Company to that effect;
(c) none of Mark Wright, Susan Russo, Nancy Lazaros or Karl Spangenberg
shall have terminated or modified their respective agreements, copies of
which are set forth in Section 8.03(c) of the Company Disclosure Schedule.
(d) Company shall have received from each of the parties set forth on
Section 8.03(d) of the Company Disclosure Schedule (each such party, an
'Assigning Party'), a valid and effective assignment, in form reasonably
acceptable to Parent, of all intellectual property rights in all work
created by such Assigning Party on behalf of Company.
(e) The indemnification agreements between Company and each director
have each been amended as set forth in Section 8.03(e) of the Company
Disclosure Schedule.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, notwithstanding any
requisite adoption and approval of this Agreement, as follows:
(a) by mutual written consent duly authorized by the boards of directors
of each of Parent and Company;
(b) by either Parent or Company, if the Effective Time shall not have
occurred on or before March 23, 2001; provided, however, that the right to
terminate this Agreement under this Section 9.01(b) shall not be available
to any party whose failure to fulfill any obligation under this Agreement
shall have caused, or resulted in, the failure of the Effective Time to
occur on or before such date;
(c) by either Parent or Company, if any Governmental Order, writ,
injunction or decree preventing the consummation of the Merger shall have
been entered by any court of competent jurisdiction and shall have become
final and nonappealable;
(d) by Parent, if (i) the board of directors of Company withdraws,
modifies or changes its recommendation of this Agreement or the Merger in a
manner adverse to Parent or its shareholders or shall have resolved to do
so, (ii) the board of directors of Company shall have recommended to the
shareholders of Company a Company Competing Transaction or shall have
resolved to do so, (iii) Company fails to comply in all material respects
with Section 6.04 or Section 7.02, (iv) a party to a Shareholder Agreement
(other than Parent) takes any action prohibited thereby, or (v) a Company
Competing Transaction shall have been announced or otherwise publicly known
and the board of directors of Company shall have (A) failed to recommend
against acceptance of such by its shareholders (including by taking no
position, or indicating its inability to take a position, with respect to
the acceptance of a Company Competing Transaction involving a tender offer
or exchange offer by its shareholders) within five Business Days of delivery
of a written request from Parent for such action, (B) failed to reconfirm
its approval and recommendation of this Agreement and the transactions
contemplated hereby within five Business Days of the first announcement or
other public knowledge of such proposal for a Company Competing Transaction
or (C) determined that such Company Competing Transaction was a Company
Superior Proposal and to take any of the actions allowed by clause (ii) of
Section 6.04(a), (and shall not have, prior to Parent's termination of this
Agreement pursuant to this Section 9.01(d)(v)(C), (x) reconfirmed its
approval and recommendation of this Agreement and (y) recommended against
acceptance of such Company Superior Proposal by its shareholders) or the
board of directors of Company resolves to take any of the actions described
in (A) -- (C) of this Section 9.01(d)(v);
(e) by Parent or Company, if this Agreement and the Merger is brought to
a vote and shall fail to receive the requisite votes for approval at the
Company Shareholders' Meeting or any adjournment or postponement thereof;
(f) by Parent, 10 Business Days after receipt by Company of a written
notice from Parent of a breach of any representation, warranty, covenant or
agreement on the part of Company set forth in this Agreement, or if any
representation or warranty of Company shall have become untrue, incomplete
or incorrect, in either case such that the conditions set forth in Section
8.03 would not be satisfied (a 'Terminating Company Breach'); provided,
however, that if such Terminating Company Breach is cured by Company within
10 Business Days, Parent may not terminate this Agreement under this Section
9.01(f);
(g) by Company, 10 Business Days after receipt by Parent of a written
notice from Company of a breach of any representation, warranty, covenant or
agreement on the part of Parent or Merger Sub set forth in this Agreement,
or if any representation or warranty of Parent or Merger Sub shall have
become untrue, incomplete or incorrect, in either case such that the
conditions set forth in Section 8.02 would not be satisfied (a 'Terminating
Parent Breach'); provided, however,
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that if such Terminating Parent Breach is cured by Parent within 10 Business
Days, Company may not terminate this Agreement under this Section 9.01(g);
or
(h) by Company, if it determines to recommend or enter into a Company
Competing Transaction that is a Company Superior Proposal that was not
solicited by Company in violation of this Agreement; provided, however, that
Company shall not be permitted to terminate this Agreement pursuant to this
Section 9.01(h) if such Company Superior Proposal is attributable to a
violation by Company of its obligations under Section 6.04; and provided
further that no termination pursuant to this Section 9.01(h) shall be
effective until after the payment of the applicable Termination Fee pursuant
to Section 9.05.
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.01 will remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
SECTION 9.02 Effect of Termination. Except as provided in Section 9.05, in
the event of termination of this Agreement pursuant to Section 9.01, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of any party hereto or any of its Affiliates or any of its
or their officers or directors, and all rights and obligations of each party
hereto shall cease; provided, however, that nothing herein shall relieve any
party hereto from liability for breach of any of its representations and
warranties or the breach of any of its covenants or agreements set forth in this
Agreement. No termination of this Agreement shall affect the obligation of the
parties contained in the Confidentiality Agreements, which shall survive
termination of this Agreement and remain in full force and effect in accordance
with their terms.
SECTION 9.03 Amendment. This Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective boards of directors at any
time prior to the Effective Time; provided, however, that, after the approval of
this Agreement by the shareholders of Company, no amendment may be made that
changes the amount or type of consideration into which Company Common Stock will
be converted pursuant to this Agreement. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
SECTION 9.04 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for or waive compliance with the performance of
any obligation or other act of any other party hereto, (b) waive any inaccuracy
in the representations and warranties contained herein or in any document
delivered pursuant hereto and (c) waive compliance by the other party with any
of the agreements or conditions contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
SECTION 9.05 Termination Fee; Expenses.
(a) Except as set forth in this Section 9.05, all Expenses incurred in
connection with this Agreement and the Merger shall be paid by the party
incurring such Expenses, whether or not the Merger is consummated, except that
Parent and Company each shall pay one-half of all Expenses incurred solely for
printing, filing and mailing the Registration Statement and the Proxy Statement
and all SEC and other regulatory filing fees incurred in connection with the
Registration Statement and the Proxy Statement and any fees required to be paid
under the HSR Act.
(b) In the event that (i) Parent shall terminate this Agreement due to a
Terminating Company Breach of any covenant or agreement contained in this
Agreement pursuant to Section 9.01(f) or (ii) Parent shall terminate this
Agreement pursuant to Section 9.01(d), Company shall terminate this Agreement
pursuant to Section 9.01(h), this Agreement is terminated pursuant to Section
9.01 (b) or Parent shall terminate this Agreement pursuant to Section 9.01(e)
and (A) at or prior to the time of such termination, either there shall have
been proposed or publicly announced a Company Competing Transaction or (B)
within twelve (12) months after such termination, Company shall enter into a
definitive agreement with respect to any Company Competing Transaction or any
Company Competing Transaction involving Company shall be consummated, then
Company shall pay to Parent (the 'Company Termination Fee') a sum equal to
Parent's Expenses up to $1,000,000 and an additional amount equal to $4,000,000.
Notwithstanding the foregoing, no fee shall be paid pursuant to this Section
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9.05(b) if Parent shall be in material breach of its obligations hereunder. Any
Company Termination Fee shall be paid in same day funds within three (3)
Business Days of the date this Agreement is terminated or the Company
Termination Fee otherwise becomes due and payable.
(c) Parent and Company agree that the agreements contained in Section
9.05(b) above are an integral part of the transaction contemplated by this
Agreement and constitute liquidated damages and not a penalty. Accordingly, if
Company fails to pay to Parent any amounts due under Section 9.05(b), Company
shall pay the cash and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit of other legal
action, taken to collect payment, together with interest on such amounts at the
prime rate of Citibank, N.A. in effect on the date such payment was required to
be made.
(d) In the event Company should terminate this Agreement due to a
Terminating Parent Breach of any covenant or agreement contained in this
Agreement pursuant to Section 9.01(g) then Parent shall promptly reimburse
Company for Company's expenses up to $250,000.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Non-Survival of Representations and Warranties. The
representations and warranties in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
9.01, as the case may be. This Section 10.01 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
SECTION 10.02 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in Person, by telecopy
or facsimile, by registered or certified mail (postage prepaid, return receipt
requested) or by a nationally recognized courier service to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.02):
(a) if to Company:
@plan.inc
Three Landmark Square, Suite 400
Stamford, CT 06901
Attention: Mark K. Wright
Fax (203) 964-0136
with a copy to:
Bass, Berry & Sims PLC
315 Deaderick Street, Suite 2700
Nashville, TN 37238
Attn: J. Page Davidson, Esq.
Fax (615) 742-2753
(b) if to Parent or Merger Sub:
DoubleClick Inc.
450 West 33rd Street
New York, NY 10001
Attention: Elizabeth Wang, General Counsel
Facsimile: (212) 287-9704
with a copy to:
Brobeck, Phleger & Harrison LLP
1633 Broadway, 47th Floor
New York, NY 10019
Attention: Scott L. Kaufman, Esq.
Facsimile: (212) 586-7878
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SECTION 10.03 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of Law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the Merger is not affected in any manner materially adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner to the fullest extent
permitted by applicable Law in order that the Merger may be consummated as
originally contemplated to the fullest extent possible.
SECTION 10.04 Assignment; Binding Effect; Benefit. Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto (whether by operation of Law or otherwise) without the
prior written consent of the other parties hereto. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Notwithstanding anything contained in this Agreement to the contrary, other than
Section 7.04, nothing in this Agreement, expressed or implied, is intended to
confer on any Person other than the parties hereto or their respective
successors and permitted assigns any rights or remedies under or by reason of
this Agreement.
SECTION 10.05 Incorporation of Exhibits. The Parent Disclosure Schedule, the
Company Disclosure Schedule and all Annexes attached hereto and referred to
herein are hereby incorporated herein and made a part of this Agreement for all
purposes as if fully set forth herein. Parent and Company acknowledge that the
Parent Disclosure Schedule and the Company Disclosure Schedule (i) are qualified
in their entirety by reference to specific provisions of this Agreement and (ii)
are not intended to constitute and shall not be construed as indicating that
such matter is required to be disclosed, nor shall such disclosure be construed
as an admission that such information is material with respect to Parent or
Company, as the case may be, except to the extent required by this Agreement and
by applicable law.
SECTION 10.06 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF DIRECTING THE APPLICATION OF ANY
LAW OTHER THAN THAT OF THE STATE OF NEW YORK.
SECTION 10.07 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
TRANSACTION OR AGREEMENT CONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY HERETO
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
SECTION 10.08 Headings; Interpretation. The descriptive headings contained
in this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement. The parties
have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
SECTION 10.09 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 10.10 Entire Agreement; Amendment and Restatement of Original
Agreement. This Agreement (including the Annexes, the Parent Disclosure Schedule
and the Company Disclosure Schedule) and the Confidentiality Agreements
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. For the avoidance of doubt, the parties hereto,
other than Merger Sub, being all of the parties to the Original Agreement,
hereby acknowledge and agree that this Agreement
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constitutes a valid amendment and restatement of the Original Agreement pursuant
to Section 9.03 thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
DOUBLECLICK INC.
By: /s/ JEFF EPSTEIN
..................................
NAME: JEFF EPSTEIN
TITLE: EXECUTIVE VICE PRESIDENT
ATLAS ACQUISITION CORP.
By: /s/ JEFF EPSTEIN
..................................
NAME: JEFF EPSTEIN
TITLE: EXECUTIVE VICE PRESIDENT
@PLAN.INC
By: /s/ MARK K. WRIGHT
..................................
NAME: MARK K. WRIGHT
TITLE: CEO
ATLAS MERGER SUB, INC.
By: /s/ JEFF EPSTEIN
..................................
NAME: JEFF EPSTEIN
TITLE: EXECUTIVE VICE PRESIDENT
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APPENDIX B
FORM OF SHAREHOLDER AGREEMENT
This SHAREHOLDER AGREEMENT (this 'Agreement') is made and entered into as of
September 24, 2000 between DOUBLECLICK INC., a Delaware corporation ('Parent'),
and the undersigned shareholder ('Shareholder') of @PLAN.INC, a Tennessee
corporation ('Company'). Capitalized terms used and not otherwise defined herein
shall have the respective meanings set forth in the Merger Agreement described
below.
RECITALS
WHEREAS, pursuant to an Agreement and Plan of Merger and Reorganization
dated as of September 24, 2000 by and among Parent, Atlas Merger Sub, Inc. a
Tennessee corporation and a wholly owned subsidiary of Parent ('Merger Sub') and
Company (such agreement as it may be amended is hereinafter referred to as the
'Merger Agreement'), Parent has agreed to acquire the outstanding securities of
Company pursuant to a statutory merger of Merger Sub with and into Company (the
'Merger') in which each outstanding share of capital stock of Company (the
'Company Capital Stock') will be converted into shares of common stock of Parent
(the 'Parent Shares') and cash as set forth in the Merger Agreement (the
'Transaction');
WHEREAS, in order to induce Parent to enter into the Merger Agreement and
consummate the Transaction, Company has agreed to use its reasonable best
efforts to cause certain of the shareholders of Company who are affiliates of
Company to execute and deliver to Parent a Shareholder Agreement upon the terms
set forth herein; and
WHEREAS, Shareholder is the registered and beneficial owner of such number
of shares of the outstanding capital stock of Company as is indicated on the
signature page of this Agreement (the 'Shares').
NOW, THEREFORE, the parties agree as follows:
1. Agreement to Retain Shares.
1.1 Transfer and Encumbrance.
(a) Shareholder is the beneficial owner of the Shares and, except as
otherwise set forth on the signature page hereto, has owned each such Share at
all times since the date such Share was originally issued by Company. No other
person or entity not a signatory to this Agreement has a beneficial interest in
or a right to acquire all or any portion of such Shares (except, with respect to
shareholders which are partnerships, partners of such shareholders). The Shares
constitute Shareholder's entire interest in the outstanding capital stock and
voting securities of Company. The Shares are, and will be at all times up until
the Expiration Date (as defined below), free and clear of any liens, claims,
options, charges or other encumbrances. Shareholder's principal residence or
place of business is accurately set forth on the signature page hereto.
(b) Shareholder agrees not to transfer (except as may be specifically
required by court order or by operation of law, in which case any such
transferee shall agree to be bound hereby), sell, exchange, pledge or otherwise
dispose of or encumber any Shares or any New Shares (as defined below), or to
make any offer or agreement relating thereto, at any time prior to the
Expiration Date. As used herein, the term 'Expiration Date' shall mean the
earlier to occur of (i) the Effective Time or (ii) termination of the Merger
Agreement in accordance with the terms thereof.
1.2 New Shares. Shareholder agrees that any shares of capital stock or
voting securities of Company that Shareholder purchases or with respect to which
Shareholder otherwise acquires beneficial ownership after the date of this
Agreement and prior to the Expiration Date ('New Shares') shall be subject to
the terms and conditions of this Agreement to the same extent as if they
constituted Shares.
2. Agreement to Vote Shares. Prior to the Expiration Date, at every meeting
of the shareholders of Company at which the Merger Agreement or the Transaction
is considered or voted upon, and at every
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<PAGE>
adjournment thereof, and on every action or approval by written resolution of
the shareholders of Company with respect to the Merger Agreement or the
Transaction, Shareholder shall vote the Shares and any New Shares in favor of
approval and adoption of the Merger Agreement (provided the Merger Agreement
shall not have been amended in a manner materially adverse to the interests of
Shareholder) and of the Transaction.
3. Irrevocable Proxy. Shareholder hereby agrees to timely deliver to Parent
a duly executed proxy in the form attached hereto as Exhibit I (the 'Proxy'),
such Proxy to cover the Shares and all New Shares in respect of which
Shareholder is entitled to vote at each meeting of the shareholders of Company
(including, without limitation, each written consent in lieu of a meeting). In
the event that Shareholder is unable to provide any such Proxy in a timely
manner, Shareholder hereby grants Parent a power of attorney to execute and
deliver such Proxy for and on behalf of Shareholder, such power of attorney,
which being coupled with an interest, shall survive any death, disability,
bankruptcy, or any other such impediment of Shareholder. Upon the execution of
this Agreement by Shareholder, Shareholder hereby revokes any and all prior
proxies or powers of attorney given by Shareholder with respect to the Shares
and agrees not to grant any subsequent proxies or powers of attorney with
respect to the Shares until after the Expiration Date.
4. Representations, Warranties and Covenants of Shareholder. Shareholder
hereby represents, warrants and covenants to Parent as follows:
(a) Shareholder has all necessary power and legal capacity to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Shareholder and constitutes the valid and binding
obligation of Shareholder, enforceable against Shareholder in accordance with
its terms, except as may be limited by (i) the effect of bankruptcy, insolvency,
conservatorship, arrangement, moratorium or other laws affecting or relating to
the rights of creditors generally, or (ii) the rules governing the availability
of specific performance, injunctive relief or other equitable remedies and
general principles of equity, regardless of whether considered in a proceeding
in equity or at law. The execution and delivery of this Agreement by Shareholder
does not, and the performance of Shareholder's obligations hereunder will not,
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any right
to terminate, amend, accelerate or cancel any right or obligation under, or
result in the creation of any lien or encumbrance on any Shares or New Shares
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which
Shareholder is a party or by which Shareholder or the Shares or New Shares are
or will be bound or affected, except for any such conflicts, violations,
breaches, defaults or other occurrences which would not prevent, delay or
otherwise affect performance by Shareholder of its obligations under this
Agreement.
(b) Until the Expiration Date, Shareholder will not (and will use
Shareholder's reasonable best efforts to cause Company, its affiliates,
officers, directors and employees and any investment banker, attorney,
accountant or other agent retained by Shareholder, Company or any of the same,
not to), except to the extent otherwise permitted under Section 6.04 of the
Merger Agreement: (i) initiate or solicit, directly or indirectly, any proposal,
plan or offer to acquire all or any material part of the business or properties
or capital stock of Company, whether by merger, purchase of assets, tender offer
or otherwise, or to liquidate Company or otherwise distribute to the
shareholders of Company all or any substantial part of the business, properties
or capital stock of Company (each, an 'Acquisition Proposal'); (ii) initiate,
directly or indirectly, any contact with any person in an effort to or with a
view towards soliciting any Acquisition Proposal; (iii) furnish information
concerning Company's business, properties or assets to any corporation,
partnership, person or other entity or group (other than Parent, or any
associate, agent or representative of Parent) under any circumstances that could
reasonably be expected to relate to an actual or potential Acquisition Proposal;
or (iv) negotiate or enter into discussions or an agreement, directly or
indirectly, with any entity or group with respect of any potential Acquisition
Proposal. In the event Shareholder shall receive or become aware of any
Acquisition Proposal subsequent to the date hereof, Shareholder shall promptly
inform Parent as to any such matter
B-2
<PAGE>
and the details thereof to the extent possible without breaching any other
agreement to which such Shareholder is a party or violating its fiduciary
duties.
(c) Shareholder understands and agrees that if Shareholder attempts to
transfer, vote or provide any other person with the authority to vote any of the
Shares other than in compliance with this Agreement, Company shall not, and
Shareholder hereby unconditionally and irrevocably instructs Company to not,
permit any such transfer on its books and records, issue a new certificate
representing any of the Shares or record such vote unless and until Shareholder
shall have complied with the terms of this Agreement.
5. Additional Documents. Shareholder hereby covenants and agrees to execute
and deliver any additional documents necessary or desirable, in the reasonable
opinion of Parent, to carry out the purpose and intent of this Agreement.
6. Consent and Waiver. Shareholder hereby gives any consents or waivers that
are reasonably required for the consummation of the Transaction under the terms
of any agreement to which Shareholder is a party or pursuant to any rights
Shareholder may have.
7. Termination. This Agreement and the Proxy delivered in connection
herewith shall terminate and shall have no further force or effect as of the
Expiration Date.
8. Confidentiality. Shareholder agrees (i) to hold any information regarding
this Agreement and the Transaction in strict confidence, and (ii) not to divulge
any such information to any third person, except to the extent any of the same
is hereafter publicly disclosed by Parent.
9. Miscellaneous.
9.1 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
9.2 Binding Effect and Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but, except as otherwise
specifically provided herein, neither this Agreement nor any of the rights,
interests or obligations of the parties hereto may be assigned by either of the
parties without the prior written consent of the other. This Agreement is
intended to bind Shareholder solely as a securityholder of Company only with
respect to the specific matters set forth herein.
9.3 Amendment and Modification. This Agreement may not be modified, amended,
altered or supplemented except by the execution and delivery of a written
agreement executed by the parties hereto.
9.4 Specific Performance; Injunctive Relief. The parties hereto acknowledge
that Parent will be irreparably harmed and that there will be no adequate remedy
at law for a violation of any of the covenants or agreements of Shareholder set
forth herein. Therefore, it is agreed that, in addition to any other remedies
that may be available to Parent upon any such violation, Parent shall have the
right to enforce such covenants and agreements by specific performance,
injunctive relief or by any other means available to Parent at law or in equity
and Shareholder hereby waives any and all defenses which could exist in its
favor in connection with such enforcement and waives any requirement for the
security or posting of any bond in connection with such enforcement.
9.5 Notices. All notices, requests, demands or other communications that are
required or may be given pursuant to the terms of this Agreement shall be in
writing and shall be deemed to have been duly given if delivered by hand or
mailed by registered or certified mail, postage prepaid, or sent by facsimile
transmission, as follows:
(a) If to Shareholder, at the address set forth below Shareholder's
signature at the end hereof.
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(b) if to Parent, to:
DoubleClick Inc.
450 West 33rd Street
New York, NY 10001
Attention: Elizabeth Wang
Facsimile No: (212) 287-9804
with a copy to:
Brobeck, Phleger & Harrison LLP
1633 Broadway
New York, New York 10019
Attention: Scott L. Kaufman, Esq.
Facsimile No: (212) 586-7878
Telephone No: (212) 581-1600
or to such other address as any party hereto may designate for itself by notice
given as herein provided.
9.6 Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the internal laws of the State of Tennessee without
giving effect to the principles of conflicts of law thereof.
9.7 Entire Agreement. This Agreement and the Proxy contain the entire
understanding of the parties in respect of the subject matter hereof, and
supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
9.8 Counterpart. This Agreement may be executed in several counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
9.9 Effect of Headings. The section headings herein are for convenience only
and shall not affect the construction or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Shareholder Agreement to be
executed as of the date first above written.
<TABLE>
<S> <C>
DOUBLECLICK INC. SHAREHOLDER
By: .....................................
Name: .....................................
Title: ...................................
............................................
(Signature)
............................................
(Signature of Spouse)
............................................
(Print Name of Shareholder)
............................................
(Print Street Address)
............................................
(Print City, State and Zip)
............................................
(Print Telephone Number)
............................................
(Social Security or Tax I.D. Number)
</TABLE>
Total Number of Shares of Company Capital Stock owned on the date hereof:
Common Stock: ....................
State of Residence: .................
SIGNATURE PAGE TO SHAREHOLDER AGREEMENT
B-4
<PAGE>
EXHIBIT I
IRREVOCABLE PROXY
TO VOTE STOCK OF
@PLAN.INC
The undersigned shareholder of @plan.inc, a Tennessee corporation
('Company'), hereby irrevocably (to the full extent permitted by the Tennessee
Business Corporation Act) appoints the members of the Board of Directors of
DoubleClick Inc., a Delaware corporation ('Parent'), and each of them, or any
other designee of Parent, as the sole and exclusive attorneys and proxies of the
undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting and related rights (to the full extent that the undersigned
is entitled to do so) with respect to all of the shares of capital stock of
Company that now are or hereafter may be beneficially owned by the undersigned,
and any and all other shares or securities of Company issued or issuable in
respect thereof on or after the date hereof (collectively, the 'Shares') in
accordance with the terms of this Irrevocable Proxy. The Shares beneficially
owned by the undersigned shareholder of Company as of the date of this
Irrevocable Proxy are listed on the final page of this Irrevocable Proxy. Upon
the undersigned's execution of this Irrevocable Proxy, any and all prior proxies
given by the undersigned with respect to any Shares are hereby revoked and the
undersigned agrees not to grant any subsequent proxies with respect to the
Shares until after the Expiration Date (as defined below).
This Irrevocable Proxy is irrevocable (to the extent provided in the
Tennessee Business Corporation Act), is coupled with an interest, and is granted
in consideration of Parent entering into that certain Agreement and Plan of
Merger and Reorganization (the 'Merger Agreement') by and among Parent and Atlas
Merger Sub, Inc., a Tennessee corporation and a wholly owned subsidiary of
Parent ('Merger Sub'), and Company which Merger Agreement provides for the
merger of Merger Sub with and into Company (the 'Merger'). As used herein, the
term 'Expiration Date' shall mean the earlier to occur of (i) such date and time
as the Merger shall become effective in accordance with the terms and provisions
of the Merger Agreement, and (ii) the date of termination of the Merger
Agreement.
The attorneys and proxies named above, and each of them are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting and other rights of the undersigned with respect to the
Shares (including, without limitation, the power to execute and deliver written
consents pursuant to the Tennessee Business Corporation Act), at every annual,
special or adjourned meeting of the shareholders of Company and in every written
consent in lieu of such meeting in favor of approval and adoption of the Merger
Agreement (provided the Merger Agreement shall not have been amended in a manner
materially adverse to the interests of the undersigned) and of the transaction
contemplated thereby.
The attorneys and proxies named above may not exercise this Irrevocable
Proxy on any other matter except as provided above. The undersigned shareholder
may vote the Shares on all other matters.
All authority herein conferred shall survive the death or incapacity of the
undersigned and any obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned.
This Irrevocable Proxy is coupled with an interest as aforesaid and is
irrevocable.
Dated: September , 2000
.....................................
(Signature of Shareholder)
.....................................
(Print Name of Shareholder)
Shares beneficially owned:
shares of Company Common Stock
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<PAGE>
APPENDIX C
FORM OF SHAREHOLDER LETTER
November 17, 2000
DoubleClick Inc.
450 West 33rd Street
New York, NY 10001
Attention: Elizabeth Wang, Esq.
Facsimile No: (212) 287-9804
Re: Shareholder Agreement by and between the undersigned and DoubleClick
Inc., dated as of September 24, 2000 (the 'Shareholder Agreement')
Dear Ms. Wang:
The undersigned shareholder entered into the Shareholder Agreement in
connection with the Agreement and Plan of Merger and Reorganization among
DoubleClick Inc. ('Parent'), Atlas Merger Sub, Inc. and @plan.inc ('Company'),
as of September 24, 2000 (the 'Original Agreement'). Terms used without
definition herein have the meaning ascribed thereto in the Shareholder
Agreement.
In connection with the execution and delivery of the Amended and Restated
Agreement and Plan of Merger and Reorganization among Parent, Atlas Acquisition
Corp., Atlas Merger Sub, Inc. and Company, dated as of the date hereof (the
'Amended Merger Agreement'), which amends and restates the Original Agreement,
the undersigned shareholder hereby:
1. Agrees that for purposes of the Shareholder Letter, the term (a) 'Merger
Agreement' shall refer to the Amended Merger Agreement, (b) 'Transaction' shall
refer to the acquisition by Parent of the outstanding securities of Company
pursuant to a statutory merger of Company with and into Atlas Acquisition Corp.
in which each outstanding share of capital stock of Company will be converted
into either a combination of shares of common stock of Parent and cash, or all
cash, as set forth in the Amended Merger Agreement, and (c) 'Proxy' shall refer
to the irrevocable proxy in the form attached hereto as Exhibit I.
2. Reaffirms all of its representations, warranties, covenants and
obligations under the Shareholder Agreement, including, without limitation, its
agreement to vote the Shares and any New Shares in favor of the approval and
adoption of the Amended Merger Agreement and of the Transaction.
3. Confirms that the entering into of the Amended Merger Agreement is not an
amendment of the Original Agreement in a manner materially adverse to its
interests.
Very truly yours,
SHAREHOLDER
..................
Name:
Title:
Agreed to and accepted as of the date first written above:
DOUBLECLICK INC.
By:
.......................
Name:
Title:
cc: Scott L. Kaufman, Esq.
Brobeck, Phleger & Harrison LLP
1633 Broadway
New York, NY 10019
Facsimile No: (212) 586-7878
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<PAGE>
EXHIBIT I
IRREVOCABLE PROXY
TO VOTE STOCK OF
@PLAN.INC
The undersigned shareholder of @plan.inc, a Tennessee corporation
('Company'), hereby irrevocably (to the full extent permitted by the Tennessee
Business Corporation Act) appoints the members of the Board of Directors of
DoubleClick Inc., a Delaware corporation ('Parent'), and each of them, or any
other designee of Parent, as the sole and exclusive attorneys and proxies of the
undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting and related rights (to the full extent that the undersigned
is entitled to do so) with respect to the shares of capital stock of Company
indicated on the signature page hereto that are beneficially owned by the
undersigned (collectively, the 'Shares') in accordance with the terms of this
Irrevocable Proxy. Upon the undersigned's execution of this Irrevocable Proxy,
any and all prior proxies given by the undersigned with respect to any Shares
are hereby revoked and the undersigned agrees not to grant any subsequent
proxies with respect to the Shares until after the Expiration Date (as defined
below).
This Irrevocable Proxy is irrevocable (to the extent provided in the
Tennessee Business Corporation Act), is coupled with an interest, and is granted
in consideration of Parent entering into that certain Amended and Restated
Agreement and Plan of Merger and Reorganization (the 'Merger Agreement'), by and
among Parent, Atlas Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ('Merger Sub'), Atlas Merger Sub, Inc., a Tennessee
corporation and a wholly owned subsidiary of Parent, and Company, which Merger
Agreement provides for the merger of Company with and into Merger Sub (the
'Merger'). As used herein, the term 'Expiration Date' shall mean the earlier to
occur of (i) such date and time as the Merger shall become effective in
accordance with the terms and provisions of the Merger Agreement, and (ii) the
date of termination of the Merger Agreement.
The attorneys and proxies named above, and each of them are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting and other rights of the undersigned with respect to the
Shares (including, without limitation, the power to execute and deliver written
consents pursuant to the Tennessee Business Corporation Act), at every annual,
special or adjourned meeting of the shareholders of Company and in every written
consent in lieu of such meeting in favor of approval and adoption of the Merger
Agreement (provided the Merger Agreement shall not have been amended in a manner
materially adverse to the interests of the undersigned) and of the transaction
contemplated thereby.
The attorneys and proxies named above may not exercise this Irrevocable
Proxy on any other matter except as provided above. The undersigned shareholder
may vote the Shares on all other matters. All authority herein conferred shall
survive the death or incapacity of the undersigned and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
This Irrevocable Proxy is coupled with an interest as aforesaid and is
irrevocable.
Dated: November 17, 2000
.....................................
(Signature of Shareholder)
.....................................
(Print Name of Shareholder)
Shares beneficially owned:
shares of Company Common Stock
C-2
<PAGE>
APPENDIX D
November 17, 2000
Board of Directors
@plan.inc.
Three Landmark Square
Stamford, CT 06901
Members of the Board:
We understand that DoubleClick Inc. ('DoubleClick'), a Delaware corporation,
and @plan.inc. ('@plan' or the 'Company'), a Tennessee corporation, are
proposing to enter into an Amended and Restated Agreement and Plan of Merger and
Reorganization, dated as of November 17, 2000 (the 'Agreement'), which amends
and restates the Agreement and Plan of Merger and Reorganization dated
September 24, 2000 and which provides for the merger of @plan with DoubleClick
(the 'Merger') and, upon the effectiveness of the Merger, the conversion of each
issued and outstanding share of @plan common stock into the right to receive,
at DoubleClick's election, either (i)(A) a fraction of a share of DoubleClick
common stock, the numerator of which is, at DoubleClick's election, an amount
between $4.00 and $6.40, and the denominator of which is equal to the average
closing price of DoubleClick common stock on NASDAQ for the ten trading days
ending on the business day prior to the date of the meeting of the Company's
stockholders to consider approval of the Merger, if all other conditions to
the Merger have been satisfied or waived, or in all other circumstances, the
date of the Closing and (B) $8.00 minus the value of the DoubleClick common
stock received (the numerator in the preceding clause (A)), or (ii) $8.00 in
cash. The terms and conditions of the Proposed Transaction are set forth in
more detail in the Agreement. The terms used in this opinion that are defined
in the Agreement have the same definitions when used herein unless otherwise
defined herein.
We have been requested by the Board of Directors of the Company to render
our opinion with respect to the fairness, from a financial point of view, to the
Company's stockholders of the consideration to be received by such stockholders
in the Proposed Transaction. We have not been requested to opine as to, and our
opinion does not in any manner address, the Company's underlying business
decision to proceed with or effect the Proposed Transaction.
In arriving at our opinion, we reviewed and analyzed: (1) the Agreement and
the specific terms of the Proposed Transaction, (2) publicly available
information concerning DoubleClick and @plan that we believe to be relevant to
our analysis, including @plan's Form 10-K for the year ended December 31, 1999
and Form 10-Q for the quarters ended March 31, 2000, June 30, 2000 and
September 30, 2000, and DoubleClick's Form 10-K for the year ended December 31,
1999 and Form 10-Q for the quarters ended March 31, 2000, June 30, 2000 and
September 30, 2000, (3) financial and operating information with respect to the
business, operations, contracts and prospects of the Company furnished to us by
the Company, (4) financial and operating information with respect to the
business, operations, and prospects of DoubleClick furnished to us by
DoubleClick, (5) a trading history of the @plan common stock from May 1999 to
the present and a comparison of that trading history with those of other
companies that we deemed relevant, (6) a trading history of the DoubleClick
common stock from February 20, 1998 to the present and a comparison of that
trading history with those of other companies that we deemed relevant, (7) a
comparison of the historical financial results and present financial condition
of the Company with those of other companies that we deemed relevant, (8) a
comparison of the historical financial results and present financial condition
of DoubleClick with those of other companies that we deemed relevant,
(9) published estimates of third party research analysts with respect to the
future financial performance of DoubleClick, (10) a comparison of the financial
terms of the Proposed Transaction with the financial terms of certain other
recent transactions that we deemed relevant, (11) the results of our efforts to
solicit indications of interest and proposals from third parties with respect to
an acquisition of the Company, and (12) recent developments relating to the
business, customers and prospects of the Company. In addition, we have had
discussions with the management of DoubleClick and @plan concerning their
respective businesses, customers, contracts, operations, assets, financial
conditions and prospects, including with respect to cost savings, operating
synergies, revenue enhancements, and other strategic benefits expected to result
from a combination of the businesses of
D-1
<PAGE>
@plan and DoubleClick, and have undertaken such other studies, analyses and
investigations as we deemed appropriate.
In arriving at our opinion, we have assumed and relied upon the accuracy and
completeness of the financial and other information used by us without assuming
any responsibility for independent verification of such information and have
further relied upon the assurances of management of the Company and DoubleClick
that they are not aware of any facts or circumstances that would make such
information inaccurate, incomplete or misleading. With respect to the financial
projections of DoubleClick, we were not provided with, and did not have access
to any financial forecasts or projections prepared by the management of
DoubleClick, and accordingly, in performing our analysis, based upon advice of
DoubleClick and with the consent of the Company, we have assumed that the
publicly available estimates of third party research analysts are a reasonable
basis upon which to evaluate the future financial performance of DoubleClick and
that DoubleClick will perform substantially in accordance with such estimates.
With respect to the financial projections of the Company, based upon advice of
the Company, we have assumed that such projections are a reasonable basis upon
which to evaluate the future performance of @plan and we have relied upon such
projections in arriving at our opinion. In arriving at our opinion, we have
conducted only a limited physical inspection of the properties and facilities of
the Company and have not made or obtained any evaluations or appraisals of the
assets or liabilities of the Company and DoubleClick. Upon advice of the Company
and its legal and accounting advisors, we have assumed that, in the event
DoubleClick elects to pay the merger consideration in a combination of cash and
DoubleClick common stock, the merger will qualify as a reorganization within the
meaning of Section 368 (a) of the Internal Revenue Code of 1986, as amended. Our
opinion necessarily is based upon market, economic, and other conditions as they
exist on, and can be evaluated as of, the date of this letter.
Based upon and subject to the foregoing, we are of the opinion as of the
date hereof that, from a financial point of view, the consideration to be
received by the stockholders of @plan in the Proposed Transaction is fair to
such stockholders.
We have acted as financial advisor to the Company in connection with the
Proposed Transaction and will receive a fee for our services which is contingent
upon the consummation of the Proposed Transaction. In addition, the Company has
agreed to indemnify us for certain liabilities that may arise out of the
rendering of this opinion.
This opinion is solely for the use and benefit of the Board of Directors of
the Company and is rendered to the Board of Directors in connection with its
consideration of the Proposed Transaction. This opinion is not intended to be
and does not constitute a recommendation to any stockholder of the Company as to
how such stockholder should vote with respect to the Proposed Transaction.
Very Truly Yours,
VERONIS SUHLER & ASSOCIATES LLC
By: /s/ HAL GREENBERG
..................................
Hal Greenberg, Managing Director
D-2
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The amended and restated certificate of incorporation of DoubleClick (the
'Registrant') provides that, except to the extent prohibited by the Delaware
General Corporation Law (the 'DGCL'), no director of the Registrant shall be
personally liable to the Registrant or its stockholders for monetary damages for
any breach of fiduciary duty as a director. Under the DGCL, the directors have a
fiduciary duty to the Registrant which is eliminated by this provision of the
amended and restated certificate of incorporation and, in appropriate
circumstances, equitable remedies such as injunctive or other forms of
nonmonetary relief will remain available. In addition, each director will
continue to be subject to liability under the DGCL for breach of the director's
duty of loyalty to the Registrant, for acts or omissions which are found by a
court of competent jurisdiction to be not in good faith or involving intentional
misconduct, for knowing violations of law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are prohibited by the DGCL. This provision
also does not affect the directors' responsibilities under any other laws, such
as the federal securities laws or state or federal environmental laws. The
Registrant has obtained liability insurance for its officers and directors.
Section 145 of the DGCL empowers a corporation to indemnify its directors
and officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers, provided that this provision
shall not eliminate or limit the liability of the director: (i) for any breach
of the director's duty of loyalty to the corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) arising under Section 174 of the DGCL, or
(iv) for any transaction from which the director derived an improper personal
benefit. The DGCL provides further that the indemnification permitted thereunder
shall not be deemed exclusive of any other rights to which the directors and
officers may be entitled under the corporation's certificate of incorporation or
bylaws, any agreement, a vote of stockholders or otherwise. The Registrant's
amended and restated certificate of incorporation eliminates the personal
liability of directors to the fullest extent permitted by the DGCL and provides
that the Registrant shall fully indemnify any person who was or is a party or is
threatened to be made a party to, any threatened, pending or completed action,
suit or proceeding (whether civil, criminal, administrative or investigative) by
reason of the fact that such person is or was a director or officer of the
Registrant, or is or was serving at the request of the Registrant as a director
or officer of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorney's
fees),judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the Registrant's certificate of incorporation. The
Registrant is not aware of any threatened litigation or proceeding that may
result in a claim for such indemnification.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
2.1 -- Amended and Restated Agreement and Plan of Merger and
Reorganization dated as of November 17, 2000, among the
Registrant, Atlas Merger Sub, Inc., @plan.inc and Atlas
Acquisition Corp. (attached as Appendix A to the proxy
statement/prospectus contained in this registration
statement).
4.1 -- Specimen certificate representing shares of Common Stock
(incorporated by reference to Exhibit 4.1 to the
Registrant's registration statement on Form S-1 (Reg. No.
333-42323)).
5.1 -- Opinion of Brobeck, Phleger & Harrison LLP regarding the
legality of the securities being issued.
8.1 -- Opinion of Bass, Berry & Sims PLC as to certain federal
income tax consequences of the merger.
23.1 -- Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1.)
23.2 -- Consent of Bass, Berry & Sims PLC (included in Exhibit
8.1).
23.3 -- Consent of PricewaterhouseCoopers LLP with respect to the
Registrant's financial statements.
23.4 -- Consent of Arthur Andersen LLP with respect to @plan's
financial statements.
23.5 -- Consent of KPMG LLP with respect to NetGravity, Inc.'s
financial statements.
24.1 -- Power of Attorney, included on the signature page of this
Registration Statement.
99.1 -- Form of @plan Proxy Card.
99.2 -- Consent of Veronis, Suhler & Associates LLC.
99.3 -- Section captioned 'Risk Factors' contained in
NetCreations, Inc. Annual Report on Form 10-K for the year
ended December 31, 1999 (Commission File No. 001-14875).
</TABLE>
(b) Financial Statement Schedules
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AT END
DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS(a) OF PERIOD
----------- --------- -------- ------------- ---------
<S> <C> <C> <C> <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Year Ended December 31, 1997................. $ -- $ -- $-- $ --
Year Ended December 31, 1998................. -- 80,000 -- 80,000
Year Ended December 31, 1999................. 80,000 145,000 61,000 164,000
VALUATION ALLOWANCE FOR DEFERRED TAX ASSETS
Year Ended December 31, 1997................. 251,098 1,068,317 -- 1,319,415
Year Ended December 31, 1998................. 1,319,415 810,528 -- 2,129,943
Year Ended December 31, 1999................. 2,129,943 652,704 -- 2,782,647
</TABLE>
---------
(a) Represents accounts written off as uncollectible.
(c) Opinion of Veronis, Suhler & Associates LLC, attached as Appendix D to
the proxy statement/prospectus which is part of this registration statement.
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which,
II-2
<PAGE>
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering price set forth in
the 'Calculation of Registration Fee' table in the effective registration
statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering;
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(5) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue;
(6) That, prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c) of the Securities Act, such reoffering prospectus
will contain the information called for by the applicable registration form
with respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form;
(7) That every prospectus (i) that is filed pursuant to paragraph (6)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to this Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof;
(8) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in
II-3
<PAGE>
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time
it was declared effective;
(9) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof;
(10) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of Form
S-4, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of this Registration Statement through the date of responding
to the request; and
(11) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in this Registration Statement when
it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in The City of New York,
State of New York, on this 28th day of November, 2000.
DOUBLECLICK INC.
By /S/ KEVIN P. RYAN
..................................
KEVIN P. RYAN
CHIEF EXECUTIVE OFFICER
AND DIRECTOR
POWER OF ATTORNEY
We, the undersigned directors and/or officers of DoubleClick Inc. (the
'Company'), hereby severally constitute and appoint Kevin P. Ryan, and Stephen
Collins, and each of them individually, with full powers of substitution and
resubstitution, our true and lawful attorneys, with full powers to them and each
of them to sign for us, in our names and in the capacities indicated below, the
Registration Statement on Form S-4 filed with the Securities and Exchange
Commission, and any and all amendments to said Registration Statement (including
post-effective amendments), and any registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, in connection with the
registration under the Securities Act of 1933, as amended, of equity securities
of the Company, and to file or cause to be filed the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys, and each of them, full power
and authority to do and perform each and purposes as each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as each of them might or could do in person, and hereby
ratifying and confirming all that said attorneys, and each of them, or their
substitute or substitutes, shall do or cause to be done by virtue of this Power
of Attorney.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ KEVIN J. O'CONNOR Chairman of the Board November 28, 2000
.........................................
KEVIN J. O'CONNOR
/s/ KEVIN P. RYAN Chief Executive Officer and Director November 28, 2000
.........................................
KEVIN P. RYAN
/s/ DWIGHT A. MERRIMAN Chief Technical Officer and Director November 28, 2000
.........................................
DWIGHT A. MERRIMAN
/s/ DAVID N. STROHM Director November 28, 2000
.........................................
DAVID N. STROHM
/s/ MARK E. NUNNELLY Director November 28, 2000
.........................................
MARK E. NUNNELLY
/s/ THOMAS S. MURPHY Director November 28, 2000
.........................................
THOMAS S. MURPHY
/s/ W. GRANT GREGORY Director November 28, 2000
.........................................
W. GRANT GREGORY
/s/ DON PEPPERS Director November 28, 2000
.........................................
DON PEPPERS
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
--- ----------- ----
<S> <C> <C>
2.1 Amended and Restated Agreement and Plan of Merger and
Reorganization dated as of November 17, 2000, by and among
the Registrant, Atlas Merger Sub, Inc., @plan.inc and Atlas
Acquisition Corp. (attached as Appendix A to the proxy
statement/prospectus contained in this registration
statement). ................................................
4.1 Specimen certificate representing shares of Common Stock
(incorporated by reference to Exhibit 4.1 to the
Registrant's registration statement on Form S-1 (Reg. No.
333-42323)). ...............................................
5.1 Opinion of Brobeck, Phleger & Harrison LLP regarding the
legality of the securities being issued. ...................
8.1 Opinion of Bass, Berry & Sims PLC as to certain federal
income tax consequences of the merger. .....................
23.1 Consent of Brobeck, Phleger & Harrison LLP (included in
Exhibit 5.1). ..............................................
23.2 Consent of Bass, Berry & Sims PLC (included in Exhibit
8.1). ......................................................
23.3 Consent of PricewaterhouseCoopers LLP with respect to the
Registrant's financial statements. .........................
23.4 Consent of Arthur Andersen LLP with respect to @plan's
financial statements. ......................................
23.5 Consent of KPMG LLP with respect to NetGravity, Inc.'s
financial statements........................................
24.1 Power of Attorney, included on the signature page of this
Registration Statement. ....................................
99.1 Form of @plan Proxy Card. ..................................
99.2 Consent of Veronis, Suhler & Associates LLC.................
99.3 Section captions 'Risks Factors' contained in NetCreations
Inc. Annual Report on Form 10-K for the year ended
December 31, 1999 (Commission File No. 001-14875)...........
</TABLE>
STATEMENT OF DIFFERENCES
------------------------
The registered trademark symbol shall be expressed as .................... 'r'
