<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
INFOSEEK CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
INFOSEEK CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE> 2
INFOSEEK CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 29, 1997
------------------------
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of Shareholders of
Infoseek Corporation, a California corporation (the "Company"), will be held on
Thursday, May 29, 1997 at 10:00 a.m., local time, at the Company's principal
executive offices located at 2620 Augustine Drive, Santa Clara, California
95054, for the following purposes:
1. To elect seven (7) directors to serve for the ensuing year and until
their successors are duly elected and qualified;
2. To ratify and approve the amendment to the Company's 1996 Stock
Option/Stock Issuance Plan to increase the number of shares available
for grant thereunder by 1,600,000 to a total of 7,225,000;
3. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending December 31, 1997; and
4. To transact such other business as may properly come before the meeting
or at any and all continuation(s) or adjournment(s) thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on April 1, 1997 are
entitled to receive notice of, to attend and to vote at the meeting and any
adjournment thereof.
All shareholders are cordially invited to attend the meeting in person. Any
shareholder attending the meeting may vote in person even if such shareholder
returned a proxy.
FOR THE BOARD OF DIRECTORS
ROBERT E.L. JOHNSON III,
Chief Executive Officer and Director
Santa Clara, California
May 7, 1997
IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES.
<PAGE> 3
INFOSEEK CORPORATION
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
------------------------
The enclosed Proxy is solicited on behalf of the Board of Directors of
Infoseek Corporation (the "Company") for use at the Company's 1997 Annual
Meeting of Shareholders (the "Annual Meeting") to be held Thursday, May 29,
1997, at 10:00 a.m., local time, or at any and all continuation(s) or
adjournment(s) thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting will
be held at the principal executive offices of the Company, located at 2620
Augustine Drive, Santa Clara, California 95054. The Company's telephone number
at that location is (408) 567-2700.
These proxy solicitation materials were mailed on or about May 7, 1997 to
all shareholders entitled to vote at the Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
PURPOSES OF THE ANNUAL MEETING
The purposes of the Annual Meeting are (i) to elect seven (7) directors to
serve for the ensuing year and until their successors are duly elected and
qualified; (ii) to ratify and approve the amendment to the Company's 1996 Stock
Option/Stock Issuance Plan to increase the number of shares available for grant
thereunder by 1,600,000 to a total of 7,225,000; (iii) to ratify the appointment
of Ernst & Young LLP as independent auditors of the Company for the fiscal year
ending December 31, 1997; and (iv) to transact such other business as may
properly come before the meeting or at any and all continuation(s) or
adjournment(s) thereof.
RECORD DATE AND SHARES OUTSTANDING
Shareholders of record at the close of business on April 1, 1997 (the
"Record Date") are entitled to notice of, and to vote at the Annual Meeting. At
the Record Date, 26,007,760 shares of the Company's Common Stock were issued and
outstanding. For information regarding security ownership by management and 5%
shareholders, see "Other Information -- Security Ownership of Certain Beneficial
Owners and Management." The closing price of the Company's Common Stock on the
Nasdaq National Market on the Record Date was $6.75 per share.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person. Attending the
Annual Meeting in and of itself will not constitute a revocation of proxy.
VOTING AND SOLICITATION
Every shareholder voting in the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of votes to which the
shareholder's shares are entitled, or distribute such shareholder's votes on the
same principle among as many candidates as the shareholder may select, provided
that votes cannot be cast for more than seven (7) candidates. However, no
shareholders shall be entitled to cumulate votes unless the candidate's name has
been placed in nomination prior to the voting and the shareholder, or any other
shareholder, has given notice at the Annual Meeting prior to the voting of the
intention to cumulate the shareholder's votes. On all other matters, each share
has one (1) vote.
Shares of Common Stock represented by properly executed proxies will,
unless such proxies have been previously revoked, be voted in accordance with
the instructions indicated thereon. In the absence of specific instructions to
the contrary, properly executed proxies will be voted: (i) FOR the election of
each of the
1
<PAGE> 4
Company's nominees as a director; (ii) FOR ratification and approval of the
amendment to the Company's 1996 Stock Option/Stock Issuance Plan; and (iii) FOR
ratification of the appointment of Ernst & Young LLP as independent auditors for
the fiscal year ending December 31, 1997. No business other than that set forth
in the accompanying Notice of Annual Meeting of Shareholders is expected to come
before the Annual Meeting. Should any other matter requiring a vote of
shareholders properly arise, the persons named in the enclosed form of proxy
will vote such proxy as the Board of Directors may recommend.
The cost of this solicitation will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation material to such beneficial
owners. Proxies may also be solicited by certain of the Company's directors,
officers and regular employees, without additional compensation, personally or
by telephone, telegram or letter.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the shares of Common Stock outstanding on the Record Date.
Shares that are voted "FOR" or "AGAINST" a matter are treated as being present
at the Annual Meeting for purposes of establishing a quorum and are also treated
as shares "represented and voting" at the Annual Meeting (the "Votes Cast") with
respect to such matter.
While there is no definitive statutory or case law authority in California
as to the proper treatment of abstentions or broker non-votes, the Company
believes that both abstentions and broker non-votes should be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. The Company further believes that neither abstentions nor broker
non-votes should be counted as shares "represented and voting" with respect to a
particular matter for purposes of determining the total number of Votes Cast
with respect to such matter. In the absence of controlling precedent to the
contrary, the Company intends to treat abstentions and broker non-votes in this
manner. Accordingly, abstentions and broker non-votes will not affect the
determination as to whether the requisite majority of Votes Cast has been
obtained with respect to a particular matter.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the Company's 1998 Annual Meeting of Shareholders must
be received by the Company no later than January 1, 1998 in order to be included
in the proxy statement and form of proxy relating to that meeting.
FISCAL YEAR END
The Company's fiscal year ends on December 31. Fiscal 1996 ended December
31, 1996 and is referred to herein as the "Last Fiscal Year."
PROPOSAL NO. 1
ELECTION OF DIRECTORS
DIRECTORS
A board of seven (7) directors is to be elected at the Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them for the Company's seven (7) nominees named below, all of whom are presently
directors of the Company. In the event that any nominee of the Company is unable
or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner in accordance with cumulative voting
as will ensure the election of as many of the nominees listed below as possible.
In such event, the specific nominees for whom such votes will be cumulated will
be determined by the proxy holders. The term of office of each person elected as
a director will continue until the next Annual Meeting of Shareholders or until
his successor has been duly elected and qualified or until his
2
<PAGE> 5
earlier death, resignation or removal. It is not expected that any nominee will
be unable or will decline to serve as a director.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH
OF THE NOMINEES LISTED BELOW.
NOMINEES FOR DIRECTOR
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEES AGE POSITION WITH THE COMPANY SINCE
- ------------------------------ --- ------------------------------------------------- --------
<S> <C> <C> <C>
Steven T. Kirsch.............. 40 Chairman of the Board of Directors 1993
Robert E.L. Johnson III....... 39 Chief Executive Officer and Director 1995
Leonard J. LeBlanc............ 56 Chief Operating Officer, Chief Financial Officer, 1997
Executive Vice President, Assistant Secretary
and Director
Oliver D. Curme(2)............ 43 Director 1995
H. DuBose Montgomery(2)....... 48 Director 1994
Matthew J. Stover(1).......... 42 Director 1996
John E. Zeisler(1)............ 44 Director 1995
</TABLE>
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Steven T. Kirsch, a founder of the Company, has been a director of the
Company since August 1993 and Chairman of the Board of Directors since December
1995. From September 1993 to November 1995, Mr. Kirsch also served as President
and Chief Executive Officer of the Company. From January 1990 to December 1993,
Mr. Kirsch served as Vice President, New Product Development of Frame Technology
Corporation, a software engineering company which he co-founded. Mr. Kirsch
holds a B.S. degree in electrical engineering and an M.S. degree in computer
science from the Massachusetts Institute of Technology.
Robert E.L. Johnson III joined the Company in November 1995 as Chief
Executive Officer, and has served as a director of the Company since November
1995. From November 1989 to November 1995, Mr. Johnson served in various
capacities at Time Inc., a media company, including Senior Vice President,
Corporate Development and President of Time Inc. Asia. Mr. Johnson holds a
B.S.E. degree in basic engineering from Princeton University.
Leonard J. LeBlanc joined the Company in March 1996 as Executive Vice
President and Chief Financial Officer, was appointed Assistant Secretary in
April 1996 and was appointed Chief Operating Officer and a director in April
1997. From September 1993 to December 1994, Mr. LeBlanc served as Senior Vice
President and Chief Financial Officer of GTECH Corporation, a computer systems
company. From January 1990 to December 1992, Mr. LeBlanc was the Executive Vice
President and Chief Financial Officer of Cadence Design Systems, Inc., a
software company. Mr. LeBlanc holds B.S. and M.S. degrees in chemistry from
College of the Holy Cross and an M.S. degree in finance from George Washington
University.
Oliver D. Curme has served as a director of the Company since May 1995.
Since January 1988, Mr. Curme has been a General Partner of certain venture
capital funds associated with Battery Ventures III, L.P., a venture capital
firm. Mr. Curme also serves as a director of HNC Software Inc., Aurum Software,
Inc. and several privately-held technology companies. Mr. Curme holds a B.S.
degree in biochemistry from Brown University and an M.B.A. degree from Harvard
Business School.
H. DuBose Montgomery has served as a director of the Company since June
1994. Since 1976, Mr. Montgomery has been a General Partner at Menlo Ventures, a
group of venture capital funds, in Menlo Park, California. Mr. Montgomery also
serves as a director of EndoVascular Technologies, Micro Therapeu-
3
<PAGE> 6
tics, Inc., and a number of privately held companies. Mr. Montgomery holds a
B.S. degree in management science and B.S. and M.S. degrees in electrical
engineering and computer science from the Massachusetts Institute of Technology
and an M.B.A. degree from Harvard Business School.
Matthew J. Stover has served as a director of the Company since March 1996.
Since January 1994, Mr. Stover has served as President and Chief Executive
Officer of NYNEX Information Resources Company, a Delaware corporation and
international marketing information services provider, and Chairman of the Board
of NYNEX Information Technologies Company and NYNEX Industrial Media Company,
both wholly-owned subsidiaries of NYNEX Information Resources Company. Prior to
that, Mr. Stover served as President and Chief Executive Officer of AGS
Computers, Inc. from December 1992 to December 1993, Vice President, Public
Affairs and Corporate Communications of NYNEX Corporation from May 1990 to
December 1992 and Vice President, Communications for American Express Company
from 1987 to 1990. Mr. Stover holds a B.A. degree in English language and
literature from Yale University and a certificate from the Executive Program of
the University of Virginia, Colgate Darden Graduate School of Business
Administration.
John E. Zeisler has served as a director of the Company since May 1995.
Since October 1996, Mr. Zeisler has served as a General Partner of InterWest
Partners, a venture capital firm. From August 1995 to September 1996, he served
as Senior Vice President, Marketing of NETCOM, an internet company. From 1992 to
1995, he served as President and Chief Executive Officer of Pensoft Corporation,
a software company. From 1987 to 1992, Mr. Zeisler was a co-founder and Vice
President, Marketing of Claris Corporation, a software company. Mr. Zeisler
holds a B.S. degree in communications from Boston University.
REQUIRED VOTE
The seven (7) nominees receiving the highest number of affirmative votes of
the shares present or represented and entitled to be voted for them shall be
elected as directors. Votes withheld from any director are counted for purposes
of determining the presence or absence of a quorum for the transaction of
business, but have no other legal effect in the election of directors under
California law.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of nine (9) meetings
during the Last Fiscal Year. No incumbent director attended less than 75% of the
aggregate of all meetings of the Board of Directors and any committees of the
Board on which he served, if any, during his tenure as a director. The Board of
Directors has an Audit Committee and a Compensation Committee, but does not have
a nominating committee or a committee performing the functions of a nominating
committee.
The Audit Committee of the Board of Directors currently consists of Mr.
Stover and Mr. Zeisler. During the Last Fiscal Year, the Audit Committee held
two (2) meetings. The Audit Committee reviews, acts on and reports to the Board
of Directors with respect to various auditing and accounting matters, including
the selection of the Company's independent auditors, the scope of the annual
audits, fees to be paid to the auditors, the performance of the Company's
auditors and the accounting practices and internal controls of the Company.
The Compensation Committee of the Board of Directors currently consists of
Mr. Curme and Mr. Montgomery. During the Last Fiscal Year, the Compensation
Committee held zero (0) meetings. The Compensation Committee establishes
salaries, incentives and other forms of compensation for officers and other
employees of the Company and administers the incentive compensation and benefit
plans of the Company.
DIRECTOR COMPENSATION
The Company's directors are reimbursed for their out-of-pocket travel
expenses associated with their attendance, but do not otherwise receive cash
compensation for services provided as a director. The Company
4
<PAGE> 7
also does not pay compensation for committee participation or special
assignments of the Board of Directors. There are no family relationships among
any of the directors and executive officers of the Company.
Under the Automatic Option Grant Program of the Company's 1996 Stock
Option/Stock Issuance Plan, eligible nonemployee Board members receive a series
of option grants over their period of Board service. However, a non-employee
Board member who is affiliated, whether as a partner, principal, officer or
employee, with any entity that owns 2% or more of the shares of any class of the
Company's outstanding stock will not be eligible to receive any automatic option
grants under such program during his or her period of Board service. Each
eligible individual who first becomes a non-employee Board member receives a
7,500 share option grant on the date such individual joins the Board, provided
such individual has not been in the prior employ of the Company. In addition, on
the date of each Annual Shareholders Meeting, each eligible non-employee Board
member who is to continue to serve as a non-employee Board member will
automatically be granted an option to purchase 3,750 shares of Common Stock
provided such individual has served on the Board for at least six months. There
will be no limit on the number of such 3,750 share option grants any one
eligible non-employee Board member may receive over his or her period of
continued Board service.
PROPOSAL NO. 2
RATIFICATION AND APPROVAL OF AMENDMENT
TO 1996 STOCK OPTION/STOCK ISSUANCE PLAN
GENERAL
The Company's 1996 Stock Option/Stock Issuance Plan (the "1996 Plan") is
intended to serve as the successor equity incentive program to the Company's
Stock Option Plan (the "Predecessor Plan"). The 1996 Plan was adopted by the
Board of Directors on April 10, 1996 and approved by shareholders on May 15,
1996. 5,625,000 shares of Common Stock have been authorized for issuance under
the 1996 Plan. This share reserve is comprised of (i) the shares which remained
available for issuance under the Predecessor Plan, including the shares subject
to outstanding options thereunder and the shares otherwise available for future
grant, plus (ii) an additional increase of approximately 187,500 shares. As of
April 1, 1997, options to purchase approximately 5,024,752 shares were
outstanding under the 1996 Plan and an aggregate of 239,382 shares were
available for future grant thereunder.
PROPOSAL
In February 1997, the Board of Directors approved an amendment to the 1996
Plan to increase the number of shares reserved for issuance thereunder by an
additional 1,600,000 shares, for an aggregate of 7,225,000 shares issued or
reserved for issuance thereunder. At the Annual Meeting, the shareholders are
being requested to approve this amendment. The amendment to increase the number
of shares reserved under the 1996 Plan is proposed in order to give the Board of
Directors flexibility to grant stock options. The Company believes that grants
of stock options motivate high levels of performance and provide an effective
means of recognizing employee contributions to the success of the Company. At
present, most newly hired full-time employees are granted options. The Company
believes that this policy is of great value in recruiting and retaining highly
qualified technical and other key personnel who are in great demand. The Board
of Directors believes that the ability to grant options will be important to the
future success of the Company by allowing it to remain competitive in attracting
and retaining such key personnel.
DESCRIPTION OF THE 1996 STOCK OPTION/STOCK ISSUANCE PLAN
Purpose
The purpose of the 1996 Plan is to attract and retain the best available
personnel for positions of substantial responsibility by providing eligible
persons with the opportunity to acquire a proprietary interest, or other wise
increase their proprietary interest, in the Company, as a means to promote the
success of the Company's business.
5
<PAGE> 8
Plan Components
The 1996 Plan is divided into three separate components: (i) the
Discretionary Option Grant Program under which eligible individuals in the
Company's employ or service may, at the discretion of the Plan Administrator, be
granted options to purchase shares of Common Stock at an exercise price not less
than 85% of their fair market value on the grant date, (ii) the Stock Issuance
Program under which such individuals may, in the Plan Administrator's
discretion, be issued shares of Common Stock directly, through the purchase of
such shares at a price not less than 85% of their fair market value at the time
of issuance or as a bonus tied to the performance of services, and (iii) the
Automatic Option Grant Program under which option grants will automatically be
made at periodic intervals to eligible non-employee Board members to purchase
shares of Common Stock at an exercise price equal to 100% of their fair market
value on the grant date.
Administration
The 1996 Plan is administered by the Board of Directors of the Company or
by one or more committees of the Board of Directors. All grants under the
Discretionary Option Grant Program and the Stock Issuance Program are currently
being administered by the Board of Directors. All questions of interpretation of
the 1996 Plan are determined by the Board of Directors Plan Administrator, and
such determinations are final and binding upon all participants. The Plan
Administrator will have complete discretion to determine which eligible
individuals are to receive option grants or stock issuances, the time or times
when such option grants or stock issuances are to be made, the number of shares
subject to each such grant or issuance, the status of any granted option as
either an incentive stock option or a nonstatutory stock option under the
federal tax laws, the vesting schedule to be in effect for the option grant or
stock issuance and the maximum term for which any granted option is to remain
outstanding. In no event, however, may any one participant in the 1996 Plan
receive option grants or direct stock issuances for more than 500,000 shares per
calendar year.
Eligibility
The Discretionary Option Grant Program and the Stock Issuance Program of
the 1996 Plan permit participation by employees, non-employee Board members,
consultants and other independent advisors of the Company or its majority-owned
subsidiaries. Incentive Stock Options may be granted only to employees,
including officers. Nonstatutory Stock Options may be granted to employees,
consultants or other independent advisors of the Company.
The Automatic Option Grant Program of the 1996 Plan permits participation
by non-employee Board members, other than those Board members who are
affiliated, whether as a partner, principal, officer or employee, with any
entity that owns 2% or more of the shares of any class of the Company's
outstanding stock.
Stock Option and Stock Grant Terms
The terms of stock options granted and stock issued under the 1996 Plan may
be determined by the Plan Administrator, except that stock options granted
pursuant to the Automatic Option Grant Program shall be governed by the
self-executing terms of such program. Each stock option or stock grant is
evidenced by a stock option or stock issuance agreement, as the case may be,
between the Company and the person to whom such option is granted or such stock
is issued, as the case may be, and is normally subject to the following
additional terms and conditions:
(a) Vesting Provisions: The Plan Administrator determines the vesting
terms of the options granted or stock issued under the 1996 Plan. Stock
grants pursuant to the Stock Issuance Program may be fully and immediately
vested upon issuance or may vest in one or more installments over the
participant's period of service or upon the attainment of specified
performance objective. Options granted under the Discretionary Option Grant
Program generally vest and become exercisable as to 25% of the shares one
year from the date of grant and the balance in monthly increments over the
subsequent three years of service. Each automatic option granted pursuant
to the Automatic Option Grant Program will be immediately exercisable;
however, any unvested shares so purchased will be subject to repurchase
should the optionee cease service as a Board member prior to vesting in
those shares. Each automatic option
6
<PAGE> 9
grant will vest in four successive equal annual installments over the
optionee's period of Board service, with the first installment to vest upon
the Board member's completion of one year of Board service from the date of
grant. The Plan Administrator may at any time or from time to time
accelerate the vesting of any outstanding option or stock grant. An option
is exercised by giving written notice of exercise to the Company,
specifying the number of full shares of Common Stock to be purchased, and
tendering payment to the Company of the purchase price. The purchase price
of the shares purchased upon exercise of any option or upon the issuance of
stock, as the case may be, shall be paid in consideration of such form as
is determined by the Plan Administrator, and such form of consideration may
vary for each stock option or stock grant.
(b) Exercise or Purchase Price: The exercise prices of option grants
under the 1996 Plan are determined by the Plan Administrator. In the case
of an incentive stock option granted to an employee or of stock option
granted pursuant to the Automatic Option Grant Program, the exercise price
must not be less than 100% of the fair market value of the Common Stock on
the date the option is granted, with the exception that in the case of an
option granted to a shareholder who, immediately prior to such grant, owns
stock representing more than 10% of the voting power or value of all
classes of stock of the Company, the exercise price must not be less than
110% of such fair market value. In the case of a nonstatutory option
granted to any other eligible person or of stock granted pursuant to the
Stock Issuance Program, the per share exercise price or purchase price, as
the case may be, shall be no less than 85% of fair market value per share
on the date of grant or issuance.
(c) Termination of Employment or Service: If the participant's status
as an employee, non-employee director, consultant or other independent
advisor terminates for any reason other than death or disability, options
under the 1996 Plan may be exercised within such period of time after such
termination as the Plan Administrator may determine, but only to the extent
the options were exercisable on the date of termination, and in the case of
options granted pursuant to the Automatic Option Grant Program within a
period of not less than six (6) months from the date of termination of the
optionee's Board service. If any optionee's employment or service be
terminated for misconduct, then all outstanding options held by the
optionee shall terminate immediately and cease to be outstanding. Upon the
termination of any participant in the Stock Issuance Plan, all unvested
shares of stock issued shall be immediately surrendered for cancellation.
(d) Death or Permanent Disability: If an optionee should die or become
permanently disabled while employed by the Company, options may be
exercised by the optionee or the personal representative of the optionee's
estate, as the case may be, within such period of time after such death or
permanent disability as the Plan Administrator may determine, but only to
the extent such options were exercisable on such date and in no event later
than the expiration of the term of such options. The terms of the Automatic
Option Grant Program provide that if the optionee's cessation of Board
service occurs by reason of death or permanent disability, then the
optionee or the personal representative of the optionee's estate, as the
case may be, shall have twelve (12) months or six (6) months, respectively,
during which to exercise the option, but only to the extent such options
were exercisable on such date and in no event later than the expiration of
the term of such options.
(e) Termination of Options: Options granted under the 1996 Plan expire
seven (7) years from the date of grant or such shorter term as may be
provided in the notice of grant. No option may be exercised by any person
after such expiration.
(f) Nontransferability of Options: An option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner, other
than by will the laws of descent or distribution or pursuant to a qualified
domestic relations order, and may be exercised only by the optionee during
his lifetime or, in the event of death, by a person who acquires the right
to exercise the option by bequest or inheritance or by reason of the death
of the optionee.
(g) Other Provisions: The stock option agreement or stock issuance
agreement, as the case may be, may contain such other terms, provisions and
conditions not inconsistent with the 1996 Plan as may be determined by the
Plan Administrator.
7
<PAGE> 10
Adjustments Upon Changes in Capitalization or Changes in Control
In the event any change is made in the Company's capitalization which
results from a stock split, stock dividend, recapitalization, combination of
shares or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration, appropriate adjustments shall be made
with respect to shares and options available under the 1996 Plan.
In the event that the Company is acquired by merger or asset sale, each
outstanding option under the Discretionary Option Grant Program, which is not to
be assumed or replaced by the successor corporation, will automatically
accelerate in full, and all unvested shares under the Stock Issuance Program
will immediately vest, except to the extent the Company's repurchase rights with
respect to those shares are to be assigned to the successor corporation. The
Plan Administrator will have the authority under the Discretionary Option Grant
Program and the Stock Issuance Program to grant options and to structure
repurchase rights so that the shares subject to those options or repurchase
rights will automatically vest in the event the individual's service is
terminated, whether involuntarily or through a resignation for good reason,
within 12 months following (i) a merger or asset sale in which those options are
assumed or those repurchase rights are assigned or (ii) a change in control of
the Company effected by a successful tender offer for more than 50% of the
outstanding voting stock or by proxy contest for the election of Board members.
Options currently outstanding under the Predecessor Plan will terminate upon an
acquisition of the Company by merger or asset sale, unless those options are
assumed or replaced by the acquiring entity. Outstanding options under the
Predecessor Plan that are assumed or replaced in the acquisition will not
accelerate upon the subsequent termination of the optionee's employment, except
in the case of certain executive officers of the Company under certain
circumstances.
The Plan Administrator will also have discretion to issue limited stock
appreciation rights under the Discretionary Option Grant Program which will
provide the holders with the right, upon the successful completion of a hostile
tender offer for more than 50% of the Company's outstanding voting securities,
to surrender their outstanding options for a cash distribution from the Company
in an amount per surrendered option share equal to the excess of (i) the highest
reported price per share paid in effecting the takeover (ii) the option exercise
price payable per share. No stock appreciation rights are outstanding under the
Predecessor Plan.
Amendment and Termination
The Board of Directors may at any time or from time to time amend, alter,
suspend or terminate the 1996 Plan without the approval of the shareholders;
provided, however, that (i) the Automatic Option Grant Program cannot be amended
more frequently than once every six months, and (ii) shareholder approval is
required to the extent necessary to comply with Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, or applicable provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), or any successor rule or
provision or any other applicable law or regulation. Such shareholder approval,
if required, shall be obtained in such a manner and to such a degree as is
required by applicable law, rule or regulation. No action by the Board of
Directors or shareholders may unilaterally alter or impair any rights previously
granted under the 1996 Plan without the written consent of the optionee. The
1996 Plan will terminate by its terms on April 9, 2006, unless sooner terminated
by the Board of Directors.
CERTAIN TAX INFORMATION
Options granted under the 1996 Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or "nonstatutory stock
options."
If an option granted under the 1996 Plan is an incentive stock option, the
optionee will recognize no income upon grant of the incentive stock option and
incur no tax liability due to the exercise unless the optionee is subject to the
alternative minimum tax. Upon the sale or exchange of the shares at least two
(2) years after grant of the option and one (1) year after receipt of the shares
by the optionee, any gain or loss will be treated as long-term capital gain or
loss. If these holding periods are not satisfied, the optionee will recognize
ordinary income equal to the difference between the exercise price and the lower
of the fair market
8
<PAGE> 11
value of the stock at the date of the option exercise or the sale price of the
stock. A different rule for measuring ordinary income upon such a premature
disposition may apply if the optionee is also an officer, director or 10%
shareholder of the Company. The Company will be entitled to a deduction in the
same amount as the ordinary income recognized by the optionee. Any gain or loss
recognized on such a premature disposition of the shares in excess of the amount
treated as ordinary income will be characterized as long-term, or short-term
capital gain or loss, depending on the holding period.
All other options which do not qualify as incentive stock options are
referred to as nonstatutory stock options. An optionee will not recognize any
taxable income at the time he is granted a nonstatutory option. However, upon
its exercise, the optionee will recognize ordinary income for tax purposes
measured by the excess of the then fair market value of the shares over the
option price. In certain circumstances, where the shares are subject to a
substantial risk of forfeiture when acquired or where the optionee is an
officer, director or 10% shareholder of the Company, the date of taxation may be
deferred if the optionee files an election with the Internal Revenue Service
under Section 83(b) of the Code. The income recognized by an optionee who is
also an employee of the Company will be subject to tax withholding by the
Company by payment in cash or out of the current earnings paid to the optionee.
Upon resale of such shares by the optionee, any difference between the sales
price and the exercise price, to the extent not recognized as ordinary income as
provided above, will be treated as capital gain or loss.
The Company will be entitled to a tax deduction in the amount and at the
time that the optionee recognizes ordinary income with respect to shares
acquired upon exercise of a nonstatutory stock option.
The foregoing is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the 1996 Plan, does not purport to be complete, and does not
discuss the income tax laws of any municipality, state or foreign country in
which an optionee may reside.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the Common Stock
present or represented at the meeting is required to approve the foregoing
amendment to the 1996 Stock Option/Stock Issuance Plan.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE AMENDMENT TO
THE 1996 STOCK OPTION/STOCK ISSUANCE PLAN.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP, independent
auditors, to audit the consolidated financial statements of the Company for the
fiscal year ending December 31, 1997 and seeks ratification of such appointment.
In the event of a negative vote on such ratification, the Board of Directors
will reconsider its appointment.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they desire to
do so and are expected to be available to respond to appropriate questions.
REQUIRED VOTE
The affirmative votes of a majority of the Votes Cast is required to ratify
the appointment of Ernst & Young LLP as the Company's independent auditors for
the fiscal year ending December 31, 1997.
9
<PAGE> 12
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPOINTMENT
OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1997.
OTHER INFORMATION
EXECUTIVE OFFICERS
In addition to Mr. Kirsch, Mr. Johnson and Mr. LeBlanc, the following
persons were executive officers of the Company as of April 30, 1997:
<TABLE>
<CAPTION>
NAME AGE POSITION
-------------------- --- ----------------------------------------------
<S> <C> <C>
Andrew E. Newton 54 Vice President, General Counsel and Secretary
John S. Nauman 49 Vice President, Engineering
Peter D. Rip 43 Vice President and General Manager, Infoseek
Network
</TABLE>
Andrew E. Newton, a founder of the Company, has served as Vice President
and General Counsel since January 1994 and Secretary since March 1994. From
February 1990 to November 1993, Mr. Newton was Vice President and General
Counsel of Frame Technology Corporation, a software engineering company. Mr.
Newton holds an A.B. degree in English from Dartmouth College and a J.D. degree
from Columbia University School of Law.
John S. Nauman joined the Company in February 1996 as Vice President,
Engineering. From November 1993 to February 1996, Mr. Nauman served as Vice
President, Engineering and then Vice President, Development at NetFRAME Systems,
a hardware and software engineering company. From November 1989 to October 1993,
Mr. Nauman was Senior Director of Networking and Communication Development and
then Business Unit Manager, Integrated Technologies of Apple Computer Inc. Mr.
Nauman holds a B.S. degree in mathematics from the University of Oklahoma, an
M.B.A. degree from Santa Clara University and an M.S. degree in electrical
engineering from Stanford University.
Peter D. Rip joined the Company in March 1996 as Vice President, Corporate
Development, and held such position with the Company until September 1996, at
which time he became Vice President and General Manager, Infoseek Network. From
June 1993 until March 1996, Mr. Rip was a principal of Harp Capital, a venture
capital firm. From January 1992 until June 1993, Mr. Rip was the Chief Executive
Officer of Boss Logic, Inc., a client/server software company. From January 1990
until June 1991, Mr. Rip served as the Vice President of Marketing, Silicon
Design Division of Mentor Graphics Corporation, an engineering software company.
Mr. Rip holds a B.A. degree from Brandeis University and a Ph.D. in marketing
from the Stanford University Graduate School of Business.
10
<PAGE> 13
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent
(10%) of a registered class of the Company's equity securities, to file certain
reports regarding ownership of, and transactions in, the Company's securities
with the Securities and Exchange Commission and with The Nasdaq Stock Market,
Inc. Such officers, directors, and 10% shareholders are also required to furnish
the Company with copies of all Section 16(a) forms that they file.
Based solely on its review of copies of Forms 3 and 4 and amendments
thereto furnished to the Company pursuant to Rule 16a-3(e) and Forms 5 and
amendments thereto furnished to the Company with respect to the Last Fiscal
Year, and any written representations referred to in Item 405(b)(2)(i) of
Regulation S-K stating that no Forms 5 were required, the Company believes that,
during the Last Fiscal Year, all Section 16(a) filing requirements applicable to
the Company's officers and directors were complied with.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of April 1, 1997 by (i) each person
who is known by the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each of the Company's directors, (iii) the Company's Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Company whose aggregate cash compensation exceeded $100,000
during the Last Fiscal Year (the "Named Executive Officers"), and (iv) all
directors and executive officers as a group. A total of 26,007,760 shares of the
Company's Common Stock was issued and outstanding as of April 1, 1997.
11
<PAGE> 14
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)
DIRECTORS, NAMED EXECUTIVE OFFICERS AND 5% --------------------------
SHAREHOLDERS NUMBER PERCENT
----------------------------------------------------- ----------- -------
<S> <C> <C>
Steven T. Kirsch(2).................................. 5,924,999 22.78%
Menlo Ventures VI, L.P.(3)........................... 4,815,094 18.51%
Building 4, Suite 100
3000 Sand Hill Road
Menlo Park, CA 94025
Battery Ventures III, L.P............................ 2,499,999 9.61%
20 William Street
Wellesley, MA 02181
NYNEX Information Technologies Company............... 1,125,000 4.33%
35 Village Road
Middleton, MA 01946
Robert E.L. Johnson III(4)........................... 811,243 3.08%
Leonard J. LeBlanc(5)................................ 106,749 *
Andrew E. Newton..................................... 604,040 2.32%
John E. Zeisler(6)................................... 33,279 *
Oliver D. Curme(7)................................... 2,499,999 9.61%
H. DuBose Montgomery(8).............................. 4,815,094 18.51%
Matthew J. Stover(9)................................. 1,125,000 4.33%
James N. Desrosier(10)............................... 109,874 *
Karl A. Spangenberg(11).............................. 140,717 *
All directors and executive officers as a group (12
persons)(12)....................................... 16,368,869 61.17%
</TABLE>
- ---------------
* Less than 1%.
12
<PAGE> 15
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
the aggregate number of shares of Common Stock subject to options held by
that person that are currently exercisable or exercisable within 60 days of
April 1, 1997 are deemed outstanding. Shares issuable pursuant to such
options are deemed outstanding for computing the percentage of the person
holding such options but are not deemed outstanding for computing the
percentage of any other person. To the Company's knowledge, except as set
forth in the footnotes to this table and subject to applicable community
property laws, each party named in the table has sole voting and investment
power with respect to the shares set forth opposite such party's name.
Except as otherwise indicated, the address of each of the parties in this
table is as follows: c/o Infoseek Corporation, 2620 Augustine Drive, Suite
250, Santa Clara, California 95054.
(2) Includes 37,500 shares held by the Kirsch Family Trust and 5,887,499 shares
held in the name of trusts for the benefit of Mr. Kirsch and family members
of Mr. Kirsch.
(3) Includes 71,160 shares owned by Menlo Entrepreneurs Fund VI, L.P. and
4,743,934 shares owned by Menlo Ventures VI, L.P.
(4) Includes an aggregate of 209,436 held by Mr. Johnson in custody for his
children, and includes an aggregate of 165,562 shares held in two
individual retirement accounts for the benefit of Mr. Johnson. Also
includes 364,995 shares issuable pursuant to stock options that may be
exercised within 60 days after April 1, 1997.
(5) Includes 68,749 shares issuable pursuant to stock options that may be
exercised within 60 days after April 1, 1997 and 13,281 shares subject to a
right of repurchase by the Company which lapses at the rate of 391 shares
per month or on June 30, 1998 subject to satisfaction of certain
performance objectives.
(6) Includes 20,780 shares issuable pursuant to stock options that may be
exercised within 60 days after April 1, 1997.
(7) Represents 2,499,999 shares beneficially owned by Battery Ventures III,
L.P. Mr. Curme, a director of the Company is a general partner of Battery
Partners, III, L.P., the general partner of Battery Ventures III, L.P., and
he disclaims beneficial ownership of these shares except to the extent of
his pecuniary interest therein.
(8) Includes 71,160 shares owned by Menlo Entrepreneurs Fund VI, L.P. and
4,743,934 shares owned by Menlo Ventures VI, L.P. Mr. Montgomery, a
director of the Company, is a general partner of Menlo Ventures Management
VI, L.P., which is the general partner of each of the foregoing venture
funds. Mr. Montgomery disclaims beneficial ownership of these shares except
to the extent of his pecuniary interest therein.
(9) Represents 1,125,000 shares beneficially owned by NYNEX Information
Technologies Company. Mr. Stover, a director of the Company is the Chairman
of the Board of Directors of NYNEX Information Technologies Company, an
indirect wholly-owned subsidiary of NYNEX Corporation and he disclaims
beneficial ownership of these shares.
(10) Includes 109,374 shares issuable pursuant to stock options that may be
exercised within 60 days after April 1, 1997.
(11) Includes 140,624 shares issuable pursuant to stock options that may be
exercised within 60 days after April 1, 1997.
(12) Includes 751,397 shares issuable pursuant to outstanding stock options that
may be exercised within 60 days after April 1, 1997, including those stock
options identified in notes (4), (5), (6), (10) and (11).
13
<PAGE> 16
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth certain information
concerning compensation of the Company's Named Executive Officers during the
fiscal years ended December 31, 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS(1) OPTIONS COMPENSATION
- ---------------------------------------------------- -------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Robert E.L. Johnson III(2)............... 1996 $200,000 $101,000 -- --
Chief Executive Officer................ 1995 12,179 -- 1,200,000 --
1994 -- -- -- --
Leonard J. LeBlanc(3).................... 1996 $135,288 $ 51,000 262,500 --
Chief Operating Officer, 1995 -- -- -- --
Chief Financial Officer, 1994 -- -- -- --
Executive Vice President, and
Assistant Secretary
Andrew E. Newton......................... 1996 $140,000 $ 80,000 -- --
Vice President, General Counsel and 1995 128,333 40,000 -- --
Secretary 1994 99,634 -- -- --
James N. Desrosier(4).................... 1996 $142,500 $ 53,333 375,000 --
Vice President, Chief Marketing Officer 1995 -- -- -- --
1994 -- -- -- --
Karl A. Spangenberg(5)................... 1996 $125,000 $ 84,500 -- --
Vice President, Worldwide Advertising 1995 15,417 -- 375,000 --
1994 -- -- -- --
</TABLE>
- ---------------
(1) Represents discretionary bonus payments determined by the Company's Board of
Directors.
(2) In December 1995, Mr. Johnson became the President and Chief Executive
Officer of the Company.
(3) In March 1996, Mr. LeBlanc became the Executive Vice President and Chief
Financial Officer of the Company at an annual base salary of $175,000.
(4) In March 1996, Mr. Desrosier became the Vice President, Chief Marketing
Officer of the Company at an annual base salary of $180,000. Mr. Desrosier
has resigned from the Company and is included in this table solely pursuant
to Item 402(a)(3)(ii) of Regulation S-K.
(5) In December 1995, Mr. Spangenberg became the Vice President, Worldwide
Advertising of the Company at an annual base salary of $125,000. Mr.
Spangenberg has resigned from the Company and is included in this table
solely pursuant to Item 402(a)(3)(ii) of Regulation S-K.
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning stock option grants
made to each of the Named Executive Officers during the Last Fiscal Year. No
stock appreciation rights were granted to these individuals during such year.
INDIVIDUAL GRANTS(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF
UNDERLYING GRANTED TO STOCK PRICE
OPTIONS EMPLOYEES IN APPRECIATION FOR
GRANTED FISCAL EXERCISE PRICE EXPIRATION OPTION TERM(4)
NAME (#)(1) YEAR(2) ($/SH)(3) DATE 5%($) 10%($)
- --------------------- ------------- ------------- -------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Leonard J. LeBlanc... 262,500 9.33% $ 4.00 03/27/03 $427,455 $996,153
James N.
Desrosier(5)....... 375,000 13.15% $ 1.34 03/06/03 $203,499 $474,240
</TABLE>
- ---------------
14
<PAGE> 17
(1) These options were granted under the Company's 1996 Stock Option/Stock
Issuance Plan. The grants date for these options are as follows: Mr.
LeBlanc: March 28, 1996; Mr. Desrosier: March 6, 1996. Each option has a
maximum term of 7 years measured from the grant date, subject to earlier
termination upon the optionee's cessation of service with the Company.
(2) The Company granted options to purchase 2,850,699 shares of Common Stock
during the Last Fiscal Year.
(3) The exercise price may be paid in cash or in shares of the Company's Common
Stock valued at fair market value on the exercise date. The Company may also
finance the option exercise by loaning the optionee sufficient funds to pay
the exercise price for the purchased shares, together with any federal and
state income tax liability incurred by the optionee in connection with such
exercise.
(4) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by rules of the Securities and Exchange Commission. There is no
assurance that the actual stock price appreciation over the 7-year option
terms will be at the assumed 5% and 10% levels or at any other defined
level. Unless the market price of the Common Stock appreciates over the
option term, no value will be realized from the option grants made to the
executive officers.
(5) See "Executive Compensation -- Summary Compensation Table," footnote 4.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table sets forth information concerning option exercises and
option holdings during the Last Fiscal Year with respect to each of the Named
Executive Officers. No stock appreciation rights were exercised during such year
or were outstanding at the end of such year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-
SHARES OPTIONS AT FISCAL YEAR THE-MONEY OPTIONS AT FISCAL
ACQUIRED END(#) YEAR END($)(1)
UPON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert E.L. Johnson III... -- -- 340,000 800,000 $ 2,285,010 $ 6,855,030
Leonard J. LeBlanc........ -- -- 18,750 243,750 $ 70,313 $ 914,063
Andrew E. Newton.......... -- -- -- -- $ -0- $ -0-
James N. Desrosier(2)..... -- -- 37,500 337,500 $ 240,375 $ 2,163,375
Karl A. Spangenberg(3).... -- -- 93,750 281,250 $ 714,066 $ 2,142,197
</TABLE>
- ---------------
(1) The value of an "in-the-money" stock option represents the difference
between the aggregate estimated fair market value of the underlying
securities, based on the closing price of $7.75 per share of the Company's
Common Stock on the Nasdaq National Market on December 31, 1996, and the
aggregate exercise price of the subject stock option.
(2) See "Executive Compensation -- Summary Compensation Table," footnote 4.
(3) See "Executive Compensation -- Summary Compensation Table," footnote 5.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors was formed
in April 1996 and is currently comprised of Mr. Curme and Mr. Montgomery. None
of these individuals was at any time during the Last Fiscal Year, or at any
other time, an officer or employee of the Company. No member of the Compensation
Committee of the Company serves as a member of the Board of Directors or
compensation committee of any entity that has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
Committee.
CERTAIN TRANSACTIONS
In March 1996, the Company and NYNEX entered into a one year agreement
which provided that from May 1996 until May 1997 the Company prominently display
the BigYellow logo, representing NYNEX's
15
<PAGE> 18
interactive shopping directory, as the exclusive comprehensive shopping
directory within Infoseek Service. NYNEX agreed to pay to the Company up to an
aggregate of $4.6 million in monthly payments, which amount could be decreased
proportionately if the number of impressions of the BigYellow logo fell below a
specified number. NYNEX may extend the term of this original agreement for
additional one year periods, with the fee to be determined based upon Infoseek's
then current advertising rate structure. In addition, NYNEX has the right to
cancel or renegotiate the agreement based upon certain relative traffic volumes
on the BigYellow and Infoseek Service sites. In February 1997 the Company and
NYNEX amended this agreement to extend its terms through June 1998 in exchange
for an additional $1.4 million, for a total of $6.0 million in monthly payments
($2.5 million of which was previously paid under the terms of the original
agreement). Pursuant to the amended contract, the companies have eliminated
certain exclusivity and reimbursement provisions but otherwise have retained
substantially the same terms and conditions as the original agreement. There can
be no assurance, however, that the NYNEX arrangement will prove to be mutually
beneficial, that it will be continued after its amended term or that the Company
will be able to produce the levels of traffic required to maintain the contract
under its present terms or at all.
The Company entered into four Stock Purchase Agreements on January 24, 1996
with Robert E.L. Johnson III, an executive officer of the Company, whereby Mr.
Johnson purchased a total of 374,998 shares of the Company's Common Stock at
$0.80 per share held in the names of individual retirement accounts for the
benefit of Mr. Johnson and as custodian for his minor children. On January 30,
1996 the Company entered into an Employee Stock Purchase Agreement with Mr.
Johnson pursuant to which he purchased 75,000 shares of Common Stock at $0.80
per share. Payment for the shares purchased on January 30, 1996 was made with a
Promissory Note.
The Company entered into a Stock Purchase Agreement on March 28, 1996 with
Leonard J. LeBlanc, an executive officer of the Company, for the purchase of
37,500 shares of the Company's Common Stock at $4.00 per share. Payment for the
shares so purchased was made with a Promissory Note.
The Company entered into a Stock Purchase Agreement on March 9, 1996 with
John S. Nauman, an executive officer of the Company, for the purchase of 150,000
shares of the Company's Common Stock at $1.33 per share. Payment for the shares
so purchased was made with a Promissory Note.
The Company entered into the Internet Search Service Access Agreement
between the Company and NETCOM dated October 13, 1995, as amended on March 20,
1996. John E. Zeisler is a director of the Company and at such time, was also an
officer of NETCOM.
The Company entered into a License and Software Distribution Agreement with
HNC on April 25, 1996 and a Software License Agreement with HNC on May 8, 1996.
Oliver D. Curme is a director of both the Company and HNC Software Inc. In
addition, Battery Ventures, L.P., of which Mr. Curme is a General Partner of a
General Partner, is a 10% shareholder of HNC.
The Company has granted options to certain of its directors and executive
officers. See "Management -- Option Grants in Last Fiscal Year" and "Principal
Shareholders."
The Company has entered into indemnification agreements with its executive
officers, directors and certain significant employees. The Company's
indemnification agreements will require the Company, among other things, to
indemnify such persons against certain liabilities that may arise by reason of
their status or service as directors, executive officers or significant
employees and to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified.
At the present time, there is no pending litigation or proceeding involving
a director, officer, employee or other agent of the Company in which
indemnification would be required or permitted. The Company is not aware of any
threatened litigation or proceeding which may result in a claim for such
indemnification.
The Company believes that all of the transactions set forth above were made
on terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. Any future transactions, including loans, between
the Company and any of its officers, directors, affiliates and principal
shareholders will be on terms no less favorable to the Company than can be
obtained from unaffiliated third parties. Any such transactions will be subject
to approval of a majority of the Board of Directors, including a majority of the
independent, disinterested directors.
16
<PAGE> 19
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors establishes the
general compensation policies of the Company as well as the compensation plans
and specific compensation levels for executive officers. It also administers the
Company's employee stock benefit plan for executive officers. The Compensation
Committee is currently composed of independent, non-employee directors who,
except as disclosed under "Executive Compensation -- Compensation Committee
Interlocks and Insider Participation," have no interlocking relationships as
defined by the Securities and Exchange Commission.
The Compensation Committee believes that the compensation of the executive
officers, including that of the Chief Executive Officer (collectively the
"Executive Officers"), should be influenced by the Company's performance. The
Committee establishes the salaries of all of the Executive Officers by
considering (i) the Company's financial performance for the past year, (ii) the
achievement of certain objectives related to the particular Executive Officer's
area of responsibility, (iii) the salaries of executive officers in similar
positions of comparably-sized companies and (iv) the relationship between
revenue and executive officer compensation. The Committee believes that the
Company's executive officer salaries in the Last Fiscal Year were comparable in
the industry for similarly-sized businesses.
In addition to salary, the Committee, from time to time, grants options to
Executive Officers. The Committee thus views option grants as an important
component of its long-term, performance-based compensation philosophy. Since the
value of an option bears a direct relationship to the Company's stock price, the
Committee believes that options motivate Executive Officers to manage the
Company in a manner which will also benefit shareholders. As such, options are
granted at the current market price. One of the principal factors considered in
granting options to an Executive Officer is the Executive Officer's ability to
influence the Company's long-term growth and profitability.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Oliver D. Curme
H. DuBose Montgomery
17
<PAGE> 20
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total shareholder
return, calculated on a dividend reinvested basis, from the effective date of
the initial public offering of the Company's Common Stock (June 11, 1996)
through the fiscal 1996 year end (December 31, 1996) for the Company, the Nasdaq
Stock Market - U.S. Index (the "Nasdaq Index") and the Hambrecht & Quist
Internet Index (the "Internet Index"). The graph assumes that $100 was invested
in the Company's Common Stock, the Nasdaq Index and the Internet Index on June
11, 1996. Note that historic stock price performance is not necessarily
indicative of future stock price performance.
COMPARISON OF CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) SEEK NASDAQ INTERNET
<S> <C> <C> <C>
6/11/96 100.00 100.00 100.00
6/30/96 71.43 96.28 91.53
9/30/96 65.18 99.69 85.10
12/31/96 55.36 104.90 78.40
</TABLE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors may recommend.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to execute and
return the accompanying proxy in the envelope which has been enclosed, at your
earliest convenience.
FOR THE BOARD OF DIRECTORS
Robert E.L. Johnson III,
Chief Executive Officer and Director
Dated: May 7, 1997
18
<PAGE> 21
INFOSEEK CORPORATION
PROXY FOR 1997 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of INFOSEEK CORPORATION, a California
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated May 7, 1997, and hereby appoints
Robert E.L. Johnson III and Andrew E. Newton, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution and resubstitution,
on behalf and in the name of the undersigned, to represent the undersigned at
the 1997 Annual Meeting of Shareholders of INFOSEEK CORPORATION to be held on
Thursday, May 29, 1997, at 10:00 a.m., local time, at the principal executive
offices of the Company at 2620 Augustine Drive, Santa Clara, California 95054,
and at any postponement(s) or adjournment(s) thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote, if then and there
personally present, on the matters set forth on the reverse side.
Both of such attorneys or substitutes as shall be present and shall act
at said meeting or any postponement(s) or adjournment(s) thereof (or if only
one shall be present and acting, then that one) shall have and may exercise all
of the powers of said attorneys-in-fact hereunder.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE> 22
<TABLE>
<S> <C> <C>
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE
AMENDMENT TO THE 1996 STOCK OPTION/STOCK ISSUANCE PLAN, FOR THE PLEASE MARK
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT [ X ] VOTES AS IN
AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, THIS EXAMPLE
1997, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING.
</TABLE>
1. ELECTION OF DIRECTORS:
NOMINEES: STEVEN T. KIRSCH; ROBERT E.L. JOHNSON III; LEONARD J. LEBLANC;
OLIVER D. CURME; H. DUBOSE MONTGOMERY; MATTHEW J. STOVER; JOHN E. ZEISLER
[ ] FOR [ ] WITHHOLD AUTHORITY
[ ] _________________________________
For all nominees except as noted above
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S 1996 STOCK OPTION/STOCK
ISSUANCE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR GRANT
THEREUNDER BY 1,600,000 SHARES TO A TOTAL OF 7,225,000 SHARES:
[ ] FOR [ ] WITHHELD [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997:
[ ] FOR [ ] WITHHELD [ ] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
matter or matters which may properly come before the meeting or any
postponement(s) or adjournment(s) thereof.
Signature: ______________________________________ Date: ________________
Signature: ______________________________________ Date: ________________
THIS PROXY SHOULD BE MARKED, DATED AND SIGNED BY THE SHAREHOLDER(S) EXACTLY AS
HIS OR HER NAME APPEARS HEREON, AND RETURNED PROMPTLY IN THE ENCLOSED ENVELOPE.
PERSONS SIGNING IN A FIDUCIARY CAPACITY SHOULD SO INDICATE. IF A CORPORATION,
PLEASE SIGN IN FULL CORPORATE NAME BY AUTHORIZED OFFICER. IF A PARTNERSHIP,
PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON. IF SHARES ARE HELD BY
JOINT TENANTS OR AS COMMUNITY PROPERTY, BOTH SHOULD SIGN.
