* Less than 1%.
(1) Assumes the sale of all the Shares offered by each of the Selling
Stockholders.
(2) These Shares are contractually ineligible for sale or transfer pursuant to
the Registration Statement or otherwise until the publication by the
Company of certain financial data that reflect the combined results of
operations of the Company and PlanetAll for a period of 30 days.
13
(3) Includes 45,000 shares subject to options exercisable within 60 days of
September 30, 1998, all of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(4) Includes 8,573 shares subject to options exercisable within 60 days of
September 30, 1998, 7,000 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(5) Includes 731 shares subject to options exercisable within 60 days of
September 30, 1998.
(6) Includes 2,656 shares subject to options exercisable within 60 days of
September 30, 1998, 2,500 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(7) Includes 3,898 shares subject to options exercisable within 60 days of
September 30, 1998, 3,000 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(8) Includes 4,342 shares subject to options exercisable within 60 days of
September 30, 1998, 3,500 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(9) Includes 1,366 shares subject to options exercisable within 60 days of
September 30, 1998, 1,250 of which are subject to repurchase by the Company
in the event of termination of services of holder, which right lapses over
time in accordance with a vesting schedule.
(10) Includes 4,557 shares subject to options exercisable within 60 days of
September 30, 1998, 4,000 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(11) Includes 5,458 shares subject to options exercisable within 60 days of
September 30, 1998, 500 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(12) Includes 142 shares subject to options exercisable within 60 days of
September 30, 1998.
(13) Includes 45,000 shares subject to options exercisable within 60 days of
September 30, 1998, all of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(14) Includes 862 shares subject to options exercisable within 60 days of
September 30, 1998, 750 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(15) Includes 5,286 shares subject to options exercisable within 60 days of
September 30, 1998, 4,000 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(16) Includes 1,507 shares subject to options exercisable within 60 days of
September 30, 1998, 1,000 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(17) Includes 78,249 Shares subject to a right of repurchase by the Company. As
a result, these Shares will not contractually be eligible for sale or
transfer pursuant to the Registration Statement or otherwise until such
Shares have vested and are released. Subject to the provision of continuous
services 2,371 of such Shares will vest per month. The vesting of such
Shares will accelerate under certain circumstances pursuant to the terms of
Mr. Gupta's Restricted Stock Purchase Agreement. Also includes 50,000
shares subject to options exercisable within 60 days of September 30, 1998,
all of which are subject to repurchase by the Company at the original
exercise price in the event of termination of services of holder, which
right lapses over time in accordance with a vesting schedule.
(18) Includes 78,249 Shares subject to a right of repurchase by the Company. As
a result, these Shares will not contractually be eligible for sale or
transfer pursuant to the Registration Statement or otherwise until such
Shares have vested and are released. Subject to the provision of continuous
services 2,371 of such
14
Shares will vest per month. The vesting of such Shares will accelerate
under certain circumstances pursuant to the terms of Mr. Harinarayan's
Restricted Stock Purchase Agreement. Also includes 50,000 shares subject to
options exercisable within 60 days of September 30, 1998, all of which are
subject to repurchase by the Company at the original exercise price in the
event of termination of services of holder, which right lapses over time in
accordance with a vesting schedule.
(19) Includes 2,081 shares subject to options exercisable within 60 days of
September 30, 1998, 1,000 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(20) Includes 78,249 Shares subject to a right of repurchase by the Company. As
a result, these Shares will not contractually be eligible for sale or
transfer pursuant to the Registration Statement or otherwise until such
Shares have vested and are released. Subject to the provision of continuous
services 2,371 of such Shares will vest per month. The vesting of such
Shares will accelerate under certain circumstances pursuant to the terms of
Mr. Mathur's Restricted Stock Purchase Agreement. Also includes 50,000
shares subject to options exercisable within 60 days of September 30, 1998,
all of which are subject to repurchase by the Company at the original
exercise price in the event of termination of services of holder, which
right lapses over time in accordance with a vesting schedule.
(21) Includes 530 shares subject to options exercisable within 60 days of
September 30, 1998.
(22) Includes 6,246 shares subject to options exercisable within 60 days of
September 30, 1998, 6,000 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(23) Includes 6,065 shares subject to options exercisable within 60 days of
September 30, 1998, 6,000 of which are subject to repurchase by the Company
at the original exercise price in the event of termination of services of
holder, which right lapses over time in accordance with a vesting schedule.
(24) Includes 78,249 Shares subject to a right of repurchase by the Company. As
a result, these Shares will not contractually be eligible for sale or
transfer pursuant to the Registration Statement or otherwise until such
Shares have vested and are released. Subject to the provision of continuous
services 2,371 of such Shares will vest per month. The vesting of such
Shares will accelerate under certain circumstances pursuant to the terms of
Mr. Rajaraman's Restricted Stock Purchase Agreement. Also includes 50,000
shares subject to options exercisable within 60 days of September 30, 1998,
all of which are subject to repurchase by the Company at the original
exercise price in the event of termination of services of holder, which
right lapses over time in accordance with a vesting schedule.
(25) Mr. Shriram currently serves as Vice President, Business Development of the
Company.
(26) Includes 22,551 Shares subject to a right of repurchase by the Company. As
a result, these Shares will not contractually be eligible for sale or
transfer pursuant to the Registration Statement or otherwise until such
Shares have vested and are released. Subject to the provision of continuous
services 2,819 of such Shares will vest per month. The vesting of such
Shares will accelerate under certain circumstances pursuant to the terms of
Mr. Shriram's Restricted Stock Purchase Agreement. Also includes 83,826
shares subject to options exercisable within 60 days of September 30, 1998,
all of which are subject to repurchase by the Company in the event of
termination of services of holder, which right lapses over time in
accordance with a vesting schedule. The repurchase price for 50,000 of such
shares is the original exercise price.
(27) Includes 143 shares subject to options exercisable within 60 days of
September 30, 1998.
(28) Includes 133 shares subject to options exercisable within 60 days of
September 30, 1998.
(29) Includes 104,370 shares deposited with an escrow agent to secure
indemnification obligations under the Telebook Merger and 58,332 shares
pledged under an employment agreement to secure future services. The shares
placed in escrow and pledged under the employment agreement are not
included as Shares pursuant to the Registration Statement. Also includes
150,000 shares subject to options exercisable within 60 days of September
30, 1998, all of which are subject to repurchase by the Company at the
original exercise price in the event of termination of services of holder,
which right lapses over time in accordance with a vesting schedule.
15
(30) Includes 51,764 shares deposited with an escrow agent to secure
indemnification obligations under the Telebook Merger and 17,500 shares
pledged under an employment agreement to secure future services. The shares
placed in escrow and pledged under the employment agreement are not
included as Shares pursuant to the Registration Statement. Also includes
100,000 shares subject to options exercisable within 60 days of September
30, 1998, all of which are subject to repurchase by the Company at the
original exercise price in the event of termination of services of holder,
which right lapses over time in accordance with a vesting schedule.
(31) Includes 2,100 shares deposited with an escrow agent to secure
indemnification obligations under the Telebook Merger. The shares placed in
escrow are not included as Shares pursuant to the Registration Statement.
Except as noted above, none of the Selling Stockholders has had any material relationship with the Company, or any of its affiliates, within the past three years.
The former stockholders of PlanetAll have agreed to indemnify and hold the Company harmless for any losses that may be suffered by the Company or its affiliates arising out of or in connection with any inaccuracy in, or misrepresentation or breach of, any representation or warranty made by PlanetAll in the PlanetAll merger and related agreements, or any failure by PlanetAll to perform its obligations under the PlanetAll merger and related agreements. Approximately 10% of the Shares that initially were issued to each of the Selling Stockholders as a result of the PlanetAll Merger have been deposited with an escrow agent to secure such indemnification obligations. The securities placed in escrow, although included as part of the Shares registered hereunder, thus contractually may not be eligible for resale during the period in which the Registration Statement remains effective.
The former stockholders of Junglee have agreed to indemnify and hold the Company harmless for any losses that may be suffered by the Company or its affiliates arising out of or in connection with any inaccuracy in, or misrepresentation or breach of, any representation or warranty made by Junglee in the Junglee merger and related agreements, or any failure by Junglee to perform its obligations under the Junglee merger and related agreements. Approximately 12% of the Shares that initially were issued to each of the Selling Stockholders as a result of the Junglee Merger have been deposited with an escrow agent to secure such indemnification obligations. The securities placed in escrow, although included as part of the Shares registered hereunder, thus contractually may not be eligible for resale during the period in which the Registration Statement remains effective.
The Selling Stockholders have represented to the Company that they acquired the Shares for their own account for investment only and not with a view toward the public sale or distribution thereof, except pursuant to sales registered under the Securities Act or exemptions therefrom. In recognition of the fact that the Selling Stockholders, even though acquiring the Shares for investment, may wish to be legally permitted to sell their Shares when they deem appropriate, the Company agreed with the Selling Stockholders to file with the Commission under the Securities Act a Registration Statement with respect to the resale of the Shares from time to time and agreed to prepare and file such amendments and supplements to the Registration Statement as may be necessary to keep the Registration Statement effective during the periods negotiated in connection with the respective mergers. With respect to the Shares issued in connection with the PlanetAll Merger, the Registration Statement shall remain effective until the earliest of (i) August 27, 1999, (ii) the date on which all Shares have been registered and sold pursuant to the Registration Statement, or (iii) the date on which the Shares issued in the PlanetAll Merger cease to meet the definition of "Registrable Securities" as defined in the merger agreement for the PlanetAll Merger. With respect to the Shares issued in connection with the Junglee Merger, the Registration Statement shall remain effective until the earliest of (i) August 12, 1999, (ii) the date on which all Shares have been registered and sold pursuant to the Registration Statement, or (iii) the date on which the Shares issued in the Junglee Merger cease to meet the definition of "Registrable Securities" as defined in the merger agreement for the Junglee Merger. With respect to the Shares issued in connection with the Telebook Merger, the Registration Statement shall remain effective generally until the distribution of such Shares has been completed. See "Plan of Distribution."
16
PLAN OF DISTRIBUTION
All the Shares offered hereby may be sold from time to time by the Selling Stockholders, or by their pledgees, donees, distributees, transferees or other successors-in-interest. The sale of the Shares by the Selling Stockholders may be effected from time to time in one or more types of transactions (which may include block transactions) in the over-the-counter market through Nasdaq, or on one or more other securities markets and exchanges, in privately negotiated transactions, through put or call options transactions relating to the Shares, through short sales of Shares, or through a combination of such methods of sale, at fixed prices that may be changed, at market prices prevailing at the time of sale, at prices relating to such prevailing market prices or at negotiated prices. The Selling Stockholders may effect the above-mentioned transactions by selling the Shares directly to purchasers, acting as principals for their own accounts, or by or through broker-dealers acting as agents for the Selling Stockholders, or to broker-dealers who may purchase Shares as principals and thereafter sell such Securities from time to time in transactions on any exchange or market on which such securities are listed or quoted, as applicable, in negotiated transactions, through a combination of such methods of sale, or otherwise. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from the Selling Stockholders and/or the purchasers of the Shares for whom such broker-dealers may act as agents or to whom they may sell as principals, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). None of the proceeds from the sale of the Shares by the Selling Stockholders will be received by the Company. In addition, any of the Shares that qualify for sale pursuant to Rule 144 promulgated under the Securities Act may be sold in transactions complying with such Rule, rather than pursuant to this Prospectus.
In connection with distributions of the Shares or otherwise, the Selling Stockholders may enter into hedging transactions with broker-dealers. In connection with such transactions, broker-dealers may engage in short sales of the Shares in the course of hedging the positions they assume with Selling Stockholders. The Selling Stockholders may also sell shares short and redeliver the Shares to close out such short positions. The Selling Stockholders may also enter into option or other transactions with broker-dealers which require the delivery to the broker-dealer of the Shares, which the broker-dealer may resell or otherwise transfer pursuant to this Prospectus. The Selling Stockholder may also loan or pledge the Shares to a broker-dealer and the broker-dealer may sell the Shares so loaned or upon a default the broker-dealer may effect sales of the pledged Shares pursuant to this Prospectus.
The Selling Stockholders and any broker-dealers who act in connection with the sale of the Shares hereunder may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, and any commissions received by them and profit on any resale of the Shares as principal may be deemed to be underwriting discounts and commissions under the Securities Act. The Company has agreed to bear all reasonable expenses (other than broker's commissions and similar charges) in connection with the registration and sale of the Shares being offered by the Selling Stockholders that initially were issued as a result of the Mergers. The Company has agreed to indemnify the Selling Stockholders and any agent, dealer or broker-dealer who acts in connection with the sale of the Shares hereunder that initially were issued as a result of the Mergers against certain liabilities, including liabilities under the Securities Act.
If one or more Selling Stockholders shall propose to sell Shares pursuant to this Prospectus, such Selling Stockholders shall deliver to the Company at least three full trading days prior to such proposed sale a written notice notifying the Company of their intent to sell (including the proposed manner and timing of all sales), and the provision of such notice to the Company shall conclusively be deemed to establish and confirm an agreement by such Selling Stockholders to sell such Shares, in whole, in part or not at all, within a period ending on the tenth trading day following the first such sale and to comply with the other contractual registration provisions. To the extent the Company has not exercised its rights to suspend (as described below), the Company shall provide written notice to each of the other Selling Stockholders regarding the availability of such ten trading day period.
The Company has the right to suspend use of this Prospectus for certain periods of time (which may or may not last for a period of weeks) under certain circumstances. The Company has agreed to use reasonable
17
efforts to ensure that the Selling Stockholders shall have an aggregate of at least ten trading days (prorated for partial fiscal quarters) under this Prospectus during each fiscal quarter during the effective period hereof.
Upon the Company being notified by a Selling Stockholder that any material arrangement has been entered into with a broker-dealer for the sale of Shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this Prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Selling Stockholder and of the participating broker-dealer(s), (ii) the number of Shares involved, (iii) the price at which such Shares were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set forth or incorporated by reference in this Prospectus, and (vi) other facts material to the transaction. In addition, upon the Company being notified by a Selling Stockholder that a donee or pledgee intends to sell more than 500 Shares, a supplement to this Prospectus will be filed. In addition, to the extent required, the number of the Shares to be sold, purchase prices, public offering prices, the names of any agents, dealers or underwriters, and any applicable commissions or discounts with respect to a particular offer will be set forth by the Company in a supplement to this Prospectus or, if appropriate, a post-effective amendment to the Registration Statement.
Offers or sales of the Shares have not been registered or qualified under the laws of any country other than the United States. To comply with certain states' securities laws, if applicable, the Shares will be offered or sold in such jurisdictions only through registered or licensed brokers or dealers.
Under applicable rules and regulations under the Exchange Act, any person engaged in a distribution of the Shares may be limited in its ability to engage in market activities with respect to such Shares. In addition and without limiting the foregoing, each Selling Stockholder will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, which provisions may limit the timing of purchases and sales of any of the Shares by the Selling Stockholders. The foregoing may affect the marketability of the Shares.
There can be no assurance that the Selling Stockholders will sell any or all of the Shares offered by them hereunder.
LEGAL MATTERS
The validity of the Shares offered hereby has been passed on for the Company by Perkins Coie LLP, Seattle, Washington.
EXPERTS
The financial statements of the Company appearing in the Company's Annual Report (Form 10-K) for the year ended December 31, 1997 and the supplemental consolidated financial statements of the Company appearing in the Company's Current Report on Form 8-K filed September 11, 1998, have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon included therein and incorporated herein by reference. Such financial statements and supplemental consolidated financial statements are incorporated herein by reference in reliance upon such reports given upon the authority of such firm as experts in accounting and auditing.
The financial statements of Junglee Corp., incorporated in this Prospectus by reference from the Company's Current Report on Form 8-K filed August 27, 1998, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
18
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SHARES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. |
