QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS
Q: WHAT IS XOOM.COM PROPOSING TO DO? HOW WILL I BENEFIT?
A: Xoom.com is proposing to become part of a new Internet company, NBCi.
Upon completion of the transactions, NBCi will include the businesses of:
- Xoom.com, the owner of www.xoom.com, one of the fastest-growing community-
based sites on the Internet from July 1998 to July 1999, according to
Media Metrix based on the percentage increase in reach among home and work
users,
- SNAP, the owner of www.snap.com, the fastest-growing major Internet portal
from July 1998 to July 1999, according to Media Metrix based on the
percentage increase in reach among home and work users, and
- selected Internet assets of a subsidiary of NBC, a wholly owned subsidiary
of General Electric Company. NBC was the most watched television network
among adults age 18 to 54 in the United States for the television season
that ended in May 1999, according to Nielsen Media Research.
Under its umbrella consumer brand SNAP, NBCi will integrate portal,
community and e-commerce services throughout the NBCi Web sites. Xoom.com
stockholders will have a stake in one of the first publicly traded Internet
companies combining these services in a strategic relationship with a major
broadcast television network. Xoom.com believes, based on these attributes, that
NBCi will be well positioned to capitalize on the growth opportunities available
in the Internet industry.
Q: WHAT IS SNAP.COM? WHO OWNS IT NOW?
A: SNAP, through the Snap.com Web site, develops and provides Web-based
tools that help users access, navigate and personalize the vast resources of the
Internet. SNAP is primarily owned by NBC and CNET. CNET is a publicly traded
media company that provides consumers with information online and on television
regarding computers, the Internet and digital technologies.
Q: WHAT ARE THE NBC CONTRIBUTED INTERNET ASSETS THAT WILL BE PART OF NBCI?
A: The NBC contributed Internet assets consist of NBC's businesses related
to three separate Internet properties, together with a 10% equity interest in a
fourth Internet business, namely:
- NBC.com (www.nbc.com), a Web site that provides entertainment information
and specially designed Web spin-offs of popular NBC televisions programs,
as well as chat and bulletin board services related to NBC's network
television programming.
- NBC-IN.com (www.nbc-in.com), a portal service that provides access to
local content via the Web sites of over 100 television stations owned by
or affiliated with NBC. NBC-IN fills out the offerings of the local
stations' Web sites by delivering customized content relating to real
estate, job searches, automobiles and various other topics.
- VideoSeeker (www.videoseeker.com), a Web site that offers a large and
comprehensive selection of on-demand video programming, including
entertainment news, movie trailers, television clips and interviews.
- A 10% equity interest in CNBC.com LLC, which owns the CNBC.com Web site
(www.cnbc.com). The CNBC.com Web site was launched on June 21, 1999 and
provides comprehensive financial information and analytic tools on the
Web. CNBC.com also offers personal finance commentary and data, community
features and other services designed to satisfy an individual's financial
planning needs.
Q: HOW IS NBCI GOING TO BE CREATED?
A: NBCi will be created through a series of transactions occurring on
successive days.
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On the first day, Xoom.com will be merged with a subsidiary of NBCi, and
CNET and GlobalBrain.net, Inc., an unaffiliated third party, will contribute
their ownership interests in SNAP to NBCi. The following charts illustrate the
transactions contemplated by the merger agreement:
[Diagram illustrating merger of Xenon 3 with Xoom.com]
[Diagram illustrating transfer of CNET's ownership in SNAP to NBCi]
[Diagram illustrating ownership structure after closing of merger agreement]
Immediately thereafter, on the succeeding day, Neon Media Corporation, a
newly formed entity that will own the businesses related to NBC.com and
NBC-IN.com and a 10% equity interest in CNBC.com LLC, will be merged with NBCi.
At the same time, NBC Multimedia, a subsidiary of NBC, will contribute its
ownership interests in SNAP to NBCi. NBC Multimedia will also transfer the
business related to VideoSeeker.com to NBCi in exchange for a convertible note
of NBCi. In addition, GE Investments Subsidiary, an affiliate of NBC, will
purchase a second convertible note from NBCi in exchange for the assignment to
NBCi of a $340 million note issued by NBC. Thereafter, it is intended that NBCi
will transfer the Internet assets contributed by NBC into a newly formed, wholly
owned subsidiary of NBCi. Upon the conclusion of the transactions, NBCi will be
owned principally by NBC affiliates, CNET and the former stockholders of
Xoom.com.
The following charts illustrate the transactions contemplated by the
contribution agreement:
[Diagram illustrating merger of Neon Media Corporation with NBCi]
[Diagram illustrating the transfer of NBC Multimedia's ownership interest in
SNAP and the assets of VideoSeeker.com to NBCi]
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[Diagram illustrating owndership structure after closing of all transactions]
We expect that NBCi's holding company structure will increase operating and
structural flexibility, minimize regulatory concerns and isolate risks of its
business.
Q: CAN THE TRANSACTIONS ON THE FIRST DAY HAPPEN WITHOUT THE TRANSACTIONS ON THE
SECOND DAY?
A: While the transactions on the first day could happen without the
transactions on the second day occurring, it is intended that all the
transactions will occur as part of a series of steps in the formation of NBCi.
If the transactions on the second day do not close, however, NBCi will lose its
right to use "NBC" in its name. The net effect of the transactions on the first
day will be the acquisition by Xoom.com of an equity interest in SNAP. It is a
condition to the closing of the transactions contemplated by the merger
agreement that all of the conditions set forth in the contribution agreement
have been satisfied or waived. See page 31 for a discussion of the risks if the
transactions contemplated by the contribution agreement do not occur.
Q: CAN I VOTE FOR THE ADOPTION OF THE MERGER AGREEMENT AND AGAINST XOOM.COM'S
ADOPTION OF THE CONTRIBUTION AGREEMENT?
A: Yes. If the requisite majority votes against Xoom.com's adoption of the
contribution agreement, the board of directors of Xoom.com has agreed to cause
Xoom.com to vote against adoption of the contribution agreement. If the
requisite majority votes against the adoption of the merger agreement, the
transactions contemplated by the merger agreement and the contribution agreement
will not occur. See page 45.
Q: WHAT ARE NBCI AND XENON 3?
A: NBCi and Xenon 3 are companies newly formed at the direction of Xoom.com
for the purpose of effecting the transactions. Xenon 3 is a subsidiary of NBCi
that will be merged with Xoom.com on the first day. On the second day, Neon
Media Corporation will merge into NBCi.
Q: WHAT WILL XOOM.COM STOCKHOLDERS BE ENTITLED TO AS A RESULT OF THE
TRANSACTIONS?
A: Xoom.com stockholders will be entitled to receive one share of NBCi Class
A common stock in exchange for each share of Xoom.com common stock they hold.
Upon completion of the transactions, Xoom.com's former stockholders, other than
NBC and its affiliates, are expected to own approximately 19,912,553 shares of
Class A common stock of NBCi, representing approximately 38.5% of NBCi's
outstanding common stock upon the closing of the transactions.
Q: WHAT DOES CNET RECEIVE?
A: In exchange for its ownership interests in SNAP, CNET will receive
7,147,584 shares of NBCi Class A common stock, which is expected to represent
approximately 13.8% of NBCi's outstanding common stock upon the closing of the
transactions. The shares of Class A common stock owned by CNET will not be
registered under this proxy statement/prospectus.
Q. WHAT DOES NBC RECEIVE?
A. On July 30, 1999 NBC acquired 960,028 shares of Xoom.com common stock
under a stock purchase agreement dated June 11, 1999. As a result, in connection
with the merger of Xoom.com with Xenon 3, an affiliate of NBC will receive
960,028 shares of Class A common stock that will convert into Class B common
stock in connection with the merger of Neon Media Corporation and NBCi. In
exchange for NBC Multimedia's ownership interests in SNAP and in connection with
the merger of Neon Media Corporation with NBCi, NBC Multimedia will receive
23,590,680 shares of NBCi Class B common stock in addition to the 960,028 shares
discussed above. Affiliates of NBC are expected to own approximately 47.5% of
NBCi's outstanding common stock upon the closing of the transactions. Under the
contribution
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agreement, NBC and its affiliates will also receive two convertible notes of
NBCi. Assuming no issuances of additional shares of common stock by NBCi, if
both NBCi convertible notes are converted after one year, NBC and its affiliates
could own approximately 52.8% of NBCi's outstanding common stock.
Q: WHAT'S THE DIFFERENCE BETWEEN THE CLASS A COMMON STOCK AND THE CLASS B COMMON
STOCK OF NBCI?
A: NBCi will initially have two classes of common stock: Class A common
stock and Class B common stock. The Class A common stock and the Class B common
stock are the same in all respects except for important governance rights and
the fact that only the Class A common stock will be publicly traded and that
only NBC and its affiliates may hold shares of Class B common stock. Upon the
transfer of Class B common stock to any person other than NBC or any of its
affiliates, such Class B common stock will automatically convert into Class A
common stock. See page 213 for a description of the NBCi common stock.
Q: WHAT ARE THE DIFFERENCES IN GOVERNANCE RIGHTS BETWEEN THE CLASS A COMMON
STOCK AND THE CLASS B COMMON STOCK?
A: Under NBCi's restated certificate of incorporation, the holders of the
Class B common stock initially have the right to elect six of the 13 members of
the NBCi board of directors. The holders of the Class B common stock will retain
this right so long as such holders beneficially own at least 20% of the
outstanding shares of common stock of NBCi. The holders of the Class A common
stock will have the right to elect the remaining seven members, with the
nomination of the seventh member by NBCi requiring the approval of at least
seven members of the NBCi board of directors.
If, and for so long as, NBC and its affiliates would own 35% or more of the
outstanding shares of NBCi common stock following conversion of the NBCi
convertible notes in full, the holders of the Class B common stock would have
the right to appoint seven of the 13 members of the NBCi board of directors. The
holders of the Class A common stock will have the right to appoint the remaining
six members. As long as the directors elected by the holders of the Class B
common stock do not constitute a majority of the NBCi board of directors,
several significant corporate actions by NBCi will require the approval of the
Class B Directors. As long as the holders of the Class B common stock have the
right to elect seven directors to the NBCi board of directors, several
significant corporate actions by NBCi will require the approval of the Class A
Directors. See page 216 for a description of these governance rights.
Q: WHO IS GOING TO RUN NBCI?
A: Robert C. Wright, the president and chief executive officer of NBC, will
be the chairman of the board of NBCi, and Chris Kitze, the chairman of the board
of Xoom.com, will be the chief executive officer of NBCi. The designees to the
initial board of directors of NBCi are set forth on page 124. NBCi will be
managed principally by individuals that currently manage Xoom.com and SNAP. See
page 124 for a description of the other executive officers and key employees of
NBCi.
Q: WHAT WILL HAPPEN TO XOOM.COM AFTER THE MERGER?
A: Xoom.com will become a wholly owned subsidiary of NBCi and will continue
to operate its Web site at www.xoom.com. NBCi will, however, integrate the
Xoom.com Web site with the other NBCi Internet assets under the consumer brand
SNAP, at www.snap.com, as described more fully on page 113. Users will be able
to access Xoom.com from the Snap.com Web site or from the current Xoom.com
address.
Q: WHAT WILL HAPPEN TO THE NBC.COM, NBC-IN.COM AND VIDEOSEEKER.COM WEB SITES?
A: After the closing of the transactions, the NBC.com, NBC-IN.com and
VideoSeeker.com Web sites will be integrated into the Snap.com Web site. Users
will be able to access these Web sites from the Snap.com Web site or from the
current Web site address of each Web site.
Q: WHAT AM I VOTING ON?
A: You will vote on whether to adopt the merger agreement, whether to
approve Xoom.com's adoption, as the sole stockholder of
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NBCi, of the contribution agreement and whether to approve the stock incentive
plan.
Q: DOES THE BOARD OF DIRECTORS OF XOOM.COM RECOMMEND VOTING IN FAVOR OF THE
TRANSACTIONS?
A: Yes. After careful consideration, Xoom.com's board of directors
recommends that you vote to adopt the merger agreement and vote in favor of
Xoom.com's adoption of the contribution agreement. Xoom.com's board of directors
also recommends that you vote to approve the stock incentive plan.
For a more complete description of the recommendation of the board of
directors of Xoom.com, see page 49.
Q: ARE THERE RISKS I SHOULD CONSIDER IN DECIDING WHETHER TO VOTE FOR THE
TRANSACTIONS?
A: Yes. In evaluating the transactions, you should carefully consider the
factors discussed in the section entitled "Risk Factors" on page 18.
Q: AM I ENTITLED TO DISSENTERS' OR APPRAISAL RIGHTS?
A: No. Under Delaware law, holders of Xoom.com common stock are not entitled
to dissenters' or appraisal rights in connection with the proposed transactions.
Accordingly, if you vote against the adoption of the merger agreement and
against Xoom.com's adoption of the contribution agreement, but such agreements
are nevertheless adopted, you will become a stockholder of NBCi.
Q: WHAT DO I NEED TO DO NOW?
A: Mail your signed proxy card in the enclosed return envelope as soon as
possible so that your shares may be represented at the special meeting of
Xoom.com's stockholders. If you do not include instructions on how to vote your
properly signed proxy, your shares will be voted "FOR" the adoption of the
merger agreement, "FOR" approval of Xoom.com's adoption of the contribution
agreement and "FOR" approval of the stock incentive plan.
Q: WHAT DO I DO IF I WANT TO CHANGE MY VOTE?
A: If you want to change your vote, send the secretary of Xoom.com a
later-dated, signed proxy card before the special meeting or attend the Xoom.com
meeting and vote in person. You may also revoke your proxy by sending written
notice to the secretary of Xoom.com before the special meeting.
For a more complete description of how to change your vote, see page 44.
Q: IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE MY
SHARES FOR ME?
A: Your broker will vote your shares only if you provide instructions on how
to vote by following the information provided to you by your broker. If you do
not instruct your broker on how to vote, your shares will not be voted at the
special meeting. This will have the same effect as voting against the adoption
of the merger agreement, but will not constitute a vote against Xoom.com's
adoption of the contribution agreement.
For a more complete description of voting shares held in "street name," see
page 45.
Q: SHOULD I SEND IN MY XOOM.COM STOCK CERTIFICATES NOW?
A: No. After the transactions are completed, NBCi will send you written
instructions for exchanging your Xoom.com stock certificates for NBCi stock
certificates.
Q: WHEN DO YOU EXPECT THE TRANSACTIONS TO BE COMPLETED?
A: Xoom.com is working toward completing the transactions as soon as
possible after the special meeting. Xoom.com hopes to complete the transactions
in November 1999.
For a more complete description of the conditions to the transactions, see
pages 73 and 79.
Q: WHOM SHOULD I CALL WITH QUESTIONS?
A: Please call Xoom.com Investor Relations at (415) 288-2500 or send an
e-mail to investorrelations@xoom.com with any questions about the merger. You
may also call Innisfree M&A Incorporated, the proxy solicitation firm retained
by Xoom.com, at (212) 750-5833.
You may also obtain additional information about Xoom.com from documents it
files with the Securities and Exchange Commission by following the instructions
in the section entitled "Where You Can Find More Information. |
