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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported):
December 11, 2000
INTERWORLD CORPORATION
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(Exact Name of Registration business as Specified in Its Charter)
Delaware 000-26925 13-3818716
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(State or other Jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
395 Hudson Street, 6th Floor,
New York, NY 10014-3669
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(Address, including zip code, of Principal Executive Offices)
(212) 301-2500
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(Registrant's telephone number including area code)
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Item 5. Other Events.
On December 4, 2000, the Compensation Committee of the Board of Directors of
InterWorld Corporation ("InterWorld"), pursuant to authority granted to it under
the InterWorld Corporation 2000 Equity Incentive Plan, approved an stock option
repricing program under which all current employees and directors who held
outstanding options to purchase InterWorld common stock at prices above the
December 4, 2000 market closing price of $1.00 will have the opportunity to
change the exercise price on a "value-for-value repricing" basis to the market
closing price of December 4, 2000. Under the value-for-value repricing,
employees must exchange their original options to receive a certain number of
repriced options. The ratio of repriced options to original options shall be
calculated using a proportional scale, whereby the greater the difference in
price between the repriced and original options, the fewer repriced options one
will receive. InterWorld expects to replace approximately 4,200,000 outstanding
options with approximately 3,200,000 repriced options. The repriced stock
options will be on the same terms as the original options, except that the
exercise price of the repriced options will be $1.00.
In view of the intensely competitive environment for obtaining and retaining
qualified employees in the technology sector and the benefits to shareholders
from having highly motivated employees, the repricing is being implemented in
order to retain and motivate valued employees. The repricing reflects a
determination that the continued services to InterWorld of the participants in
the option repricing program, constitutes appropriate consideration for the
option repricing program.
In March 2000, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 44 "Accounting for Certain Transactions involving Stock
Compensation and Interpretation of APB No. 25". Among other issues, this
interpretation clarifies the accounting consequence of various modifications to
the terms of a previously fixed stock option or award. If the exercise price of
an option award is reduced, the award shall be accounted for as variable from
the date of the modification to the date the award is exercised, forfeited or
expires unexercised. The interpretation requires a charge to operations for the
difference between the quoted market value of InterWorld's common stock at the
end of each reporting period and the option price of unexercised, outstanding
stock options. The interpretation is effective July 1, 2000 but covers events
that occur after December 15, 1998. Thus, compensation expense may be recorded
in the future as a result of this repricing.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunder duly authorized.
INTERWORLD CORPORATION
Date: December 11, 2000 By: /s/ Michael Donahue
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Name: Michael Donahue
Title: Chairman, President and Chief
Executive Officer
