SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 12, 1999
USA Networks, Inc.
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(Exact name of Registrant as specified in Charter)
Delaware 0-20570 59-2712887
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
152 West 57th Street, New York, New York 10019
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 314-7300
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ITEM 5. OTHER EVENTS
On February 8, 1999, USA Networks, Inc. ("USAi"), USANi LLC,
Lycos, Inc. ("Lycos"), Ticketmaster Online-CitySearch, Inc. ("TMCS"), USA
Interactive Inc. ("Newco") and two wholly owned subsidiaries of Newco entered
into agreements relating to the combination of Lycos, TMCS and certain of USAi's
assets in an entity to be controlled by USAi. On May 12, 1999, the parties
jointly announced that they had agreed by mutual consent to terminate these
agreements. The Termination Agreement requires Lycos to pay $25.5 million to
USAi and $9.5 million to TMCS if prior to July 15, 1999 Lycos enters into an
agreement with respect to, or, under certain circumstances, becomes subject to,
certain acquisition proposals. In addition, subject to certain exceptions, USAi
and TMCS each has agreed that until July 15, 1999 it will not acquire Lycos
stock or make any proposals to acquire Lycos.
Attached hereto and incorporated herein by reference in their
entirety as Exhibits 2.1 and 99.1, respectively, are copies of the Termination
Agreement and a joint press release of USAi, Lycos and TMCS.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
Exhibit No. Description
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2.1 Termination Agreement, dated as of May 11, 1999, among USA
Networks, Inc., Ticketmaster Online-CitySearch, Inc., Lycos,
Inc., USA Interactive Inc., Lemma, Inc. and Tycho, Inc.
99.1 Joint press release, dated May 12, 1999, of USA Networks, Inc.,
Lycos, Inc. and Ticketmaster Online-CitySearch, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
USA NETWORKS, INC.
Date: May 17, 1999 By: /s/ Thomas J. Kuhn
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Thomas J. Kuhn
Senior Vice President
and General Counsel
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EXHIBIT INDEX
Exhibit No. Description Page No.
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2.1 Termination Agreement, dated as of May 11, 1999,
among USA Networks, Inc., Ticketmaster Online-CitySearch,
Inc., Lycos, Inc., USA Interactive Inc., Lemma, Inc. and
Tycho, Inc.
99.1 Joint press release, dated May 12, 1999, of USA Networks,
Inc., Lycos, Inc. and Ticketmaster Online-CitySearch, Inc.
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EXHIBIT 2.1
TERMINATION AGREEMENT
TERMINATION AGREEMENT, dated as of May 11, 1999 (this
"Agreement") among USA Networks, Inc., a Delaware corporation ("USAi"),
Ticketmaster Online-CitySearch, Inc., a Delaware corporation ("TMCS"), Lycos,
Inc., a Delaware corporation ("Lycos"), USA Interactive Inc., a Delaware
corporation ("Newco"), Lemma, Inc., a Delaware corporation ("L Merger Sub"), and
Tycho, Inc., a Delaware corporation ("T Merger Sub").
WHEREAS, USAi, TMCS, Lycos, Newco, L Merger Sub and T Merger
Sub have entered into an Agreement and Plan of Reorganization, dated as of
February 8, 1999 (the "Merger Agreement"), and USAi, USANi LLC, a Delaware
limited liability company ("LLC"), and Newco have entered into a Contribution
Agreement, dated as of February 8, 1999 (the "Contribution Agreement");
WHEREAS, in connection with the execution of the Merger
Agreement and the Contribution Agreement, USAi and TMCS each entered into a
stock option agreement with Lycos, dated February 8, 1999 (together, the "Stock
Option Agreements" and together with the Merger Agreement and the Contribution
Agreement, the "Transaction Agreements").
WHEREAS, the parties hereto mutually desire to terminate the
Transaction Agreements on the terms set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
covenants and agreements set forth in this Agreement, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Termination. Lycos, TMCS and Newco mutually consent to
terminate the Merger Agreement pursuant to Section 11.1(a) of the Merger
Agreement, which termination also constitutes automatic termination of the
Contribution Agreement pursuant to Section 8.1 thereof. The parties acknowledge
and agree that the termination of the Merger Agreement as provided in the
preceding sentence shall cause an "Exercise Termination Event" to occur under
Section 2(b)(ii) of each Stock Option Agreement, with the effect that the Stock
Option Agreements immediately shall terminate and be of no further force and
effect.
2. Effect of Termination. Notwithstanding anything to the
contrary contained in the Transaction Agreements, except with respect to
Sections 9.2(b) and 12.2 of the Merger Agreement, which provisions shall survive
the termination of the Transaction Agreements, none of the parties hereto nor
their respective subsidiaries, officers, directors,
employees, agents or representatives shall have any liability or obligation
under the Transaction Agreements.
3. Payment of Certain Fees. (a) If a Triggering Event
described in paragraph (i) of Section 3(c) below occurs on or prior to July 15,
1999, then within 2 business days of the occurrence of such Triggering Event,
Lycos will pay (x) to USAi the sum of $25.5 million in cash and (y) to TMCS the
sum of $9.5 million in cash.
(b) If (i) a Triggering Event described in paragraphs (ii) or
(iii) of Section 3(c) below occurs on or prior to July 15, 1999, and
(ii) Lycos shall have entered into an agreement to engage in an
Acquisition Transaction with any person other than USAi, TMCS or any of
their respective Subsidiaries (as defined below) on or prior to January
15, 2000, then within 2 business days of the occurrence of the event
described in clause (ii) of this Section 3(b), Lycos will pay (x) to
USAi the sum of $25.5 million in cash and (y) to TMCS the sum of $9.5
million in cash.
(c) A "Triggering Event" shall mean any of the following
events or transactions occurring on or after the date hereof:
(i) Lycos shall have entered into an agreement to
engage in an Acquisition Transaction (as defined below) with any person
(the term "person" for purposes of this Agreement having the meaning
assigned thereto in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations thereunder) other than USAi, TMCS or any of their
respective Subsidiaries or the Board of Directors of Lycos shall have
recommended that the stockholders of Lycos approve or accept any
Acquisition Transaction. For purposes of this Agreement, an
"Acquisition Transaction" shall mean (w) a merger or consolidation, or
any similar transaction, involving Lycos, unless immediately following
such merger, consolidation or similar transaction the securities of
Lycos outstanding immediately prior thereto continue to represent
(either by remaining outstanding or converting into securities of the
surviving entity or any entity controlling the surviving entity) at
least 60% of the voting power and common equity of Lycos, the surviving
entity or any entity controlling the surviving entity, in each case, on
a fully diluted basis, and, following such transaction, individuals who
constituted the Board of Directors of Lycos prior to such transaction
will constitute at least a majority of the Board of Directors of Lycos,
the surviving entity or any entity controlling the surviving entity,
(x) a purchase, lease, contribution or other acquisition, transfer or
assumption of all or more than 30% of the assets of Lycos, in any
transaction or series of related transactions, by joint venture,
partnership, contribution of assets or otherwise unless, following such
transaction, Lycos will control the joint venture, partnership or other
entity formed in connection with such transaction, (y) a purchase or
other acquisition (including by way of merger, consolidation, share
exchange or oth-
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erwise) of beneficial ownership (the term "beneficial ownership" for
purposes of this Agreement having the meaning assigned thereto in
Section 13(d) of the Exchange Act, and the rules and regulations
thereunder, but without regard to the passage of time) of securities
representing 20% or more of the voting power of Lycos in any
transaction or series of related transactions unless such Acquisition
Transaction referred to in this clause (y) consists solely of an
acquisition of a person and/or assets by Lycos in which Lycos issues
securities of Lycos and following such Acquisition Transaction, Lycos
will control such assets and/or a majority of the voting power of such
person, as applicable, and such person (including any affiliates of
such person and any group in which such person is a participant) will
not, directly or indirectly, control Lycos (it being agreed that a
widely-dispersed public offering of securities by Lycos or a private
placement of Lycos securities to a financial institution that is
qualified to file a Schedule 13G under the Exchange Act shall not give
rise to an Acquisition Transaction under this clause (y)), or (z) any
substantially similar transaction; provided, however, that in no event
shall the transactions contemplated by the merger agreement entered
into on October 5, 1998, and amended and restated on November 23, 1998,
by Lycos and Wired Ventures Inc. or any merger, consolidation, purchase
or similar transaction involving only Lycos and one or more of its
wholly owned Subsidiaries or involving only any two or more of such
wholly owned Subsidiaries, be deemed to be an Acquisition Transaction.
For purposes of this Agreement, "Subsidiary" shall mean with respect to
any party, any corporation, partnership, limited liability company, or
other organization, whether incorporated or unincorporated, which is
consolidated with such party for financial reporting purposes;
(ii) Lycos shall have authorized, recommended or
publicly announced its intention to authorize, recommend or propose, to
engage in an Acquisition Transaction with any specific person other
than USAi, TMCS or any of their respective Subsidiaries or shall have
announced its intention to authorize or engage in, any negotiations
regarding an Acquisition Transaction with any specific person other
than USAi, TMCS or any of their respective Subsidiaries, or any
authorization or recommendation described in this paragraph (ii), or
any proposal by Lycos to engage in an Acquisition Transaction with any
specific person other than USAi, TMCS or any of their respective
Subsidiaries, becomes the subject of public disclosure; or
(iii) Any person other than USAi, TMCS or any of
their respective Subsidiaries shall have made a bona fide proposal to
Lycos or its stockholders that is or becomes the subject of public
disclosure to engage in an Acquisition Transaction. None of USAi, TMCS
or any of their respective Subsidiaries will encourage any person to
make a proposal that is referred to in this clause (iii).
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(d) Notwithstanding anything to the contrary in this
Agreement, the aggregate amount of fees to be paid by Lycos pursuant to
this Section 3 shall not exceed $35 million.
4. Standstill. On or prior to July 15, 1999, none of USAi,
TMCS or any of their respective Subsidiaries will, directly or indirectly,
acquire or offer to acquire any shares of Lycos's common stock, par value $.01
per share (the "Common Stock"), or propose to the Board of Directors of Lycos,
or publicly announce any proposal relating to, a merger or consolidation or
similar transaction involving Lycos; provided, however, that the provisions of
this Section 4 shall terminate in the event a Triggering Event described in
clause (iii) of Section 3(c) above occurs.
5. Releases. Each of USAi (on its behalf and on behalf of
Newco, L Merger Sub and T Merger Sub), TMCS and Lycos, hereby releases and
discharges the others (and such other's directors, officers, representatives,
employees, attorneys, advisors, agents, parents, subsidiaries, affiliated
persons and entities, predecessors, successors and assigns and all persons
acting in concert with any such party) (the "Released Persons") from all manner
of claims, actions, causes of action or suits, at law or in equity, known or
unknown, which each now has or hereafter can, shall, or may have by reason of
any matter, cause or thing whatsoever relating to or arising out of the
Transaction Agreements, excepting only any claim, action, cause of action or
suit arising (a) by virtue of an undertaking or promise contained in this
Termination Agreement or (b) by virtue of transactions or dealings undertaken in
the ordinary course of business and not arising out of, in connection with or in
any way related to the Transaction Agreements. Nothing in this Section 3 shall
in any way constitute an agreement by any party hereto to indemnify any other
party hereto against any third party claim or, except as specifically set forth
herein, waive, release, limit or restrict any claim which any party may have
against any person or entity not a party to this Termination Agreement.
6. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
7. Entire Agreement. This Termination Agreement and the
Confidentiality Agreement constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
8. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware (without giving
effect to choice of law principles thereof).
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9. Successors and Assigns. This Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
10. Notices. All notices and other communications hereunder
shall be in writing, shall be delivered by hand, telecopy, facsimile or next-day
courier service and shall be deemed given when delivered. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice:
(a) if to USAi, Newco, L Merger Sub or T Merger Sub, to
USA Networks, Inc.
152 West 57th Street
New York, New York 10019
Fax: (212) 314-7329
Attention: General Counsel
with a copy to
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Fax: (212) 403-2000
Attention: Pamela S. Seymon
Andrew J. Nussbaum
(b) if to TMCS to
Ticketmaster Online-CitySearch, Inc.
790 East Colorado Boulevard
Suite 200
Pasadena, California 91101
Fax: (626) 405-9929
Attention: General Counsel
with a copy to
Gibson, Dunn & Crutcher LLP
333 S. Grand Avenue
Los Angeles, California 90071
Fax: (213) 229-7520
Attention: Andrew E. Bogen
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(c) if to Lycos to
Lycos, Inc.
400-2 Totten Pond Road
Waltham, Massachusetts 02154
Fax: (781) 370-2600
Attention: General Counsel
with copies to
Testa, Hurwitz & Thibeult, LLP
High Street Tower
125 High Street
Boston, Massachusetts 02110
Fax: (617) 248-7100
Attention: Mark H. Burnett
Kenneth J. Gordon
and
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Fax: (212) 474-3700
Attention: Robert A. Kindler
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.
USA NETWORKS, INC.
By: /s/ Thomas J. Kuhn
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Name: Thomas J. Kuhn
Title: Senior Vice President and
General Counsel
TICKETMASTER ONLINE-CITYSEARCH, INC.
By: /s/ Charles R. Conn, III
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Name: Charles R. Conn, III
Title: Chief Executive Officer
LYCOS, INC.
By: /s/ Robert J. Davis
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Name: Robert J. Davis
Title: President and Chief Executive
Officer
USA INTERACTIVE INC.
By: /s/ Dara Khosrowshahi
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Name: Dara Khosrowshahi
Title: Vice President and Treasurer
L MERGER SUB
By: /s/ Dara Khosrowshahi
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Name: Dara Khosrowshahi
Title: President
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T MERGER SUB
By: /s/ Dara Khosrowshahi
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Name: Dara Khosrowshahi
Title: President
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EXHIBIT 99.1
[USA NETWORKS, INC. LOGO]
FOR IMMEDIATE RELEASE
USA NETWORKS, INC., LYCOS AND TICKETMASTER ONLINE-
CITYSEARCH TERMINATE MERGER AGREEMENT
NEW YORK, N.Y., WALTHAM, MA. AND PASADENA, CA. -- MAY 12, 1999 -- USA
Networks, Inc. (NASDAQ: USAI), Lycos, Inc. (NASDAQ: LCOS), and Ticketmaster
Online-CitySearch, Inc. (NASDAQ: TMCS) today jointly announced that they have
agreed by mutual consent to terminate their merger agreement. Under the
agreement signed on February 9, 1999, Lycos would have been combined with
certain USAi assets and Ticketmaster-Online CitySearch, Inc. The option
agreement between USA Networks and Lycos that was part of the merger agreement
has also been terminated. The termination agreement requires Lycos to pay USAi
and TMCS an aggregate of $35 million under certain circumstances if prior to
July 15, 1999 Lycos enters into an agreement with respect to, or becomes subject
to, certain acquisition proposals.
In addition, subject to certain exceptions, USAi and TMCS each has
agreed that until July 15, 1999, it will not acquire Lycos stock or make any
proposals to acquire Lycos.
Simultaneously with the termination of the agreement, USAi, TMCS and
Lycos today announced an agreement whereby USAi, TMCS and Lycos are entering
into a distribution and commerce relationship. As part of that continuing
relationship, CitySearch will provide local content on Lycos' national network,
Ticketmaster Online content will be featured on Lycos sites
MEDIA RELEASE
152 WEST 57TH STREET 42ND FLOOR NEW YORK, NEW YORK 10019 212-314-7300
FAX 212 314-7309
and ticket purchase links will be directed to the Ticketmaster Online-CitySearch
site. The companies will explore options to engage in a cooperative program to
develop a local commerce platform for the more than 15,000 businesses hosted by
CitySearch and its partners. Additionally, the agreement provides for USAi and
Lycos to exchange cross-promotional opportunities involving the Lycos sites and
USAi's media assets.
ABOUT USA NETWORKS, INC.
USA Networks, Inc. is a diversified media and electronic commerce company with
assets that include the following: USA Network; SCI FI Channel; Studios USA,
which consists of first-run production and distribution, TV movies and
miniseries and network production and development; USA Broadcasting; Home
Shopping Network; Ticketmaster and USA Networks Interactive, which includes
Internet Shopping Network, whose primary service is First Auction, and Hotel
Reservation Network. The company also owns a controlling interest in
Ticketmaster Online-CitySearch, Inc., a leading provider of local content and
live ticketing in the world.
ABOUT LYCOS
Founded in 1995, Lycos, Inc. is a leading Web media company and owner of the
Lycos Network, the most visited hub on the Internet reaching 51.8 percent of Web
users. The Lycos Network is a unified set of Web sites that attracts a diverse
audience by offering a variety of services, including leading Web navigation
resources, homepage building and other Web community services and a
comprehensive shopping center. The Lycos Network is composed of premium sites:
Lycos.com, Tripod, WhoWhere, Angelfire, MailCity, HotBot, HotWired, Wired News,
Webmonkey, Suck.com and MyTime.com. Lycos.com (http://www.lycos.com), "Your
Personal Internet Guide," is dedicated to helping each individual user locate,
retrieve and manage information tailored to his or her personal interests.
Headquartered near Boston in Waltham, Mass., Lycos, Inc. is a global Internet
leader with a major presence throughout the U.S., Europe and Asia.
ABOUT TICKETMASTER ONLINE-CITYSEARCH, INC.
Ticketmaster Online-CitySearch (NASDAQ: TMCS) is an award-winning provider of
locally-developed online information and transaction services relevant to
people's everyday lives. CitySearch (www.citysearch.com) develops city guides
that provide rich local information on arts and entertainment, recreation,
shopping and community, and integrate transactions to help people get things
done. Ticketmaster Online (www.ticketmaster.com) provides online ticketing
through an exclusive agreement with Ticketmaster Corporation, the leading
provider and distributor of event tickets, selling annually approximately 75
million tickets, representing gross receipts in excess of 2.5 billion dollars,
for more than 250,000 events and 3,750 clients. CityAuction
(www.cityauction.com) is a person-to-person online auction site that provides a
time-saving way to buy and sell items in local and global marketplaces. These
services provide a local portal that allows people to perform everyday
activities online, from planning an evening
out, to buying tickets, to local shopping. Ticketmaster Online-CitySearch is
headquartered in Pasadena, California.
# # #
(C)1999 Lycos, Inc. Lycos(R) is a registered trademark of Carnegie Mellon
University. All other product or service marks mentioned herein are those of
Lycos or their respective owners. All rights reserved.