From the prospectus:
sec.gov
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has not been a public market for WebTrends' common stock. Future sales of substantial amounts of the common stock in the public market, or even the prospect of such sales, could adversely affect the prevailing market prices of the common stock or WebTrends' future ability toraise capital through an offering of equity securities.
Upon the closing of this offering, and assuming no exercise of outstanding stock options subsequent to December 31, 1998, WebTrends will have 11,218,964 shares of common stock outstanding. The 3,500,000 shares sold in this offering will be freely tradable without restriction or limitation under the Securities Act, except for any such shares purchased by "affiliates" of WebTrends, as such term is defined under Rule 144 of the Securities Act, which will be subject to the resale limitations of Rule 144. The remaining 7,718,964 shares of WebTrends common stock issued and outstanding are "restricted securities" within the meaning of Rule 144 and were issued and sold by WebTrends in private transactions. Such restricted securities may be publicly sold only if registered under the Securities Act or sold in accordance with an applicable exemption from registration, such as Rule 144. WebTrends and the holders of all such remaining shares will agree that, without the prior written consent of Dain Rauscher Wessels, a division of Dain Rauscher Incorporated, they will not, directly or indirectly, issue, sell, offer or agree to sell, grant any option for the sale of, pledge, make any short sale, or otherwise dispose of shares of common stock, for a period of 180 days after the date of this prospectus. Upon expiration of the lock-up agreements, all of these restricted securities will be eligible for immediate resale in the public market subject to the limitationsof Rule 144.
In general, under Rule 144, a person, or persons whose shares are aggregated, who has beneficially owned restricted securities for at least one year, would be entitled to sell, within any three-month period, that number of shares that does not exceed the greater of
(a) 1% of the then-outstanding shares of common stock, which is approximately 112,000 shares upon the closing of this offering, and
(b) the average weekly trading volume in the common stock during the four calendar weeks immediately preceding the date on which a notice of sale is filed with the Securities and Exchange Commission,
provided that the manner of sale and notice requirements and requirements as to the availability of current public information about WebTrends are satisfied.
In addition, in order to sell shares of common stock that are not restricted securities, affiliates of WebTrends must comply with all restrictions and requirements of Rule 144 other than the one-year holding period requirement. As defined in Rule 144, an "affiliate" of an issuer is a person who directly or indirectly through the use of one or more intermediaries controls, or is controlled by, or is under common control with, such issuer. Under Rule 144(k), a holder of "restricted securities" who is not deemed an affiliate of the issuer and who has beneficially owned shares for at least two years would be entitled to sell shares under Rule 144(k) without regard to the limitations described above.
WebTrends intends to file a registration statement under the Securities Act following the date of this prospectus to register the future issuance of up to 3,341,562 shares of common stock under the 1997 option plan, the 1998 option plan and the 1999 employee stock purchase plan. The registration statement will become effective immediately upon filing. After the registration statement is effective, subject to the vesting of stock options, Rule 144 volume limitations applicable to affiliates, and expiration of lock-up agreements with the underwriters, the shares of common stock to be issued pursuant to the 1999 employee stock purchase plan or upon exercise of outstanding options granted pursuant to the 1997 option plan and 1998 option plan will be available for immediate resale in the open market. As of December 31, 1998, no options were outstanding under the 1998 option plan and no shares had been issued under the 1999 employee stock purchase plan. |
