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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(A)AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(A)
(AMENDMENT NO. ______)
Under the Securities Exchange Act of 1934
CMGI, Inc.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
125750109
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(CUSIP Number)
General Counsel
Compaq Computer Corporation
20555 State Highway 249
Houston, TX 77070
(281) 370-0670
-----------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
Louis A. Goodman, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108
(617) 573-4800
August 18, 1999
-----------------------------------------
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ].
CUSIP 125750109
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Digital Equipment Corporation
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (x)
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS
OO
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
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(7) SOLE VOTING POWER
NUMBER OF -0-
SHARES ----------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 18,994,975
REPORTING ----------------------------------------
PERSON (9) SOLE DISPOSITIVE POWER
WITH -0-
----------------------------------------
(10) SHARED DISPOSITIVE POWER
18,994,975
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-18,994,975-
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
-Approximately 16.4%-
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(14) TYPE OF REPORTING PERSON
CO
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CUSIP 125750109
---------------------------------------------------------------------
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Compaq Computer Corporation
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) (x)
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS
OO
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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(7) SOLE VOTING POWER
NUMBER OF -0-
SHARES ---------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 18,994,975
REPORTING ---------------------------------------
PERSON (9) SOLE DISPOSITIVE POWER
WITH -0-
---------------------------------------
(10) SHARED DISPOSITIVE POWER
18,994,975
---------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-18,994,975-
---------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
-Approximately 16.4%-
---------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON
CO
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ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this statement relates is the
common stock, $0.01 par value per share (the "Common Stock"), of CMGI, Inc., a
Delaware corporation ("CMGI"). The principal executive offices of CMGI are
located at 100 Brickstone Square, Andover, Massachusetts 01810.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c)
This statement is being jointly filed by the following persons
(collectively, the "Reporting Persons") pursuant to Rule 13d-1(k) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"):
(1) Digital Equipment Corporation, ("Digital") a Massachusetts
corporation and a wholly-owned subsidiary of Compaq Computer Corporation,
a Delaware corporation ("Compaq") as beneficial owner of 18,994,975 shares
of common stock, par value $0.01, of CMGI. Digital has a principal place of
business at 20555 State Highway 249, MS 110701, Houston, Texas 77070 and
its principal business is implementing and supporting networked business
solutions in multivendor environments based on high performance platforms
and global service and support.
To the best of Digital's knowledge as of the date hereof, the name,
business address, present principal occupation or employment, name, and
principal business and address of any corporation or other organization
in which such employment is conducted of each executive officer and
director of Digital is set forth in Schedule I hereto. The information
contained in Schedule I is incorporated herein by reference.
2) Compaq as beneficial owner of 18,994,975 shares of common stock,
par value $0.01, of CMGI. Compaq has a principal place of business at 20555
State Highway 249, MS 110701, Houston, Texas 77070 and its principal
business is the development and marketing of hardware, software, solutions
and services, including industry-leading enterprise computing solutions,
fault-tolerant business-critical solutions, enterprise and network storage
solutions, commercial desktop and portable products and consumer PCs.
To the best of Compaq's knowledge as of the date hereof, the name,
business address, present principal occupation or employment, name, and
principal business and address of any corporation or other organization in
which such employment is conducted of each executive officer and director
of Compaq is set forth in Schedule I hereto. The information contained in
Schedule I is incorporated herein by reference.
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(d) To the knowledge of the Reporting Persons, except for the two-month
suspended sentence and fine of approximately $10,000 (US) given by the Tribunal
Correctionnel de Draguignan, Draguignan, France, on November 18, 1996, to Thomas
Perkins, a Compaq director, in connection with the Tribunal's charge of
involuntary manslaughter, as a result of a boating accident during the course of
a sailing regatta, neither the Reporting Persons, nor any other executive
officers or directors have been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) during the last five years. This
suspended sentence was also given to the other parties involved in the
accident including the race organizer. No parties were found innocent.
(e) The Reporting Persons have not, nor, to the knowledge of the
Reporting Persons, have any of their executive officers or directors been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction during the last five years as a result of which any such person was
or is subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
(f) The executive officers and directors of Digital and Compaq are all
citizens of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On August 18, 1999, Compaq, CMGI, Digital, AltaVista Company,
a wholly owned subsidiary of Digital ("AltaVista") and Zoom Newco Inc., a wholly
owned subsidiary of CMGI ("Newco") consummated the transactions contemplated by
the Purchase and Contribution Agreement signed by the above named parties as of
June 29, 1999 and Amendment No.1 to the Purchase and Contribution Agreement,
signed by the above named parties as of August 18, 1999. Digital obtained the
shares of Common Stock of CMGI, which are covered by this report, pursuant to a
transaction in which CMGI acquired a majority stake in the AltaVista Business,
as defined in the Purchase and Contribution Agreement. The Purchase and
Contribution Agreement is Exhibit A hereto and is incorporated herein by
reference. Amendment No. 1 to Purchase and Contribution Agreement is Exhibit B
hereto and is incorporated herein by reference.
Pursuant to the Purchase and Contribution Agreement: (1) Compaq and
Digital transferred to CMGI all of the outstanding capital stock of
Shopping.com, a California corporation, and 51.6% of the outstanding capital
stock of Zip2 Corp., a California corporation ("Zip2") (collectively, the
"Digital Assets"), in exchange for promissory notes of CMGI in the aggregate
principal amount of $220 million; (2) CMGI contributed the Digital Assets,
18,994,975 shares of CMGI Common Stock and 18,090.45 shares of CMGI Series D
Preferred Stock to Newco, and Newco issued 81,495,016 shares of Newco Common
Stock to CMGI; (3) pursuant to an Assignment Agreement, by and among Compaq,
Digital and Newco and an International Assignment Agreement, by and among
Compaq, Digital and Kesempa Limited, both dated August 18, 1999, (collectively,
the "Assignment Agreements") Compaq and Digital contributed certain assets and
liabilities (including the remaining outstanding shares of Zip2) constituting
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the AltaVista division of Digital to Newco and sold certain assets and
liabilities to Newco's indirect subsidiary Kesempa Limited, an Irish single
member private company, in exchange for 18,994,975 shares of CMGI Common Stock,
18,090.45 shares of CMGI Series D Preferred Stock and 18,504,884 shares of Newco
Common Stock, (4) AltaVista merged with and into Newco and the separate
corporate existence of AltaVista ceased to exist; and (5) Newco changed its
corporate name to AltaVista Company ("AV").
ITEM 4. PURPOSE OF TRANSACTION.
Compaq's and Digital's purpose for the transaction was to sell the majority
of their interest in the AltaVista division and to participate in
Internet-related businesses in part through minority ownership positions in CMGI
and AV, and to engage in joint marketing and other activities with CMGI.
(a) If CMGI shareholders approve the conversion of the CMGI Series D
Preferred Stock in CMGI Common Stock, Digital, may exercise its right to convert
shares of CMGI Series D Preferred Stock into 1,809,045 shares of CMGI Common
Stock.
(b) Pursuant to Section 5.4 of the Purchase and Contribution
Agreement, Compaq has the right to designate one member of the Board of
Directors of CMGI.
Except as discussed herein, the Reporting Persons have no current
plans or proposals which relate to or would result in any of the following:
(c) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the issuer or any of its
subsidiaries;
(d) a sale or transfer of a material amount of assets of the issuer or
of any of its subsidiaries;
(e) any material change in the present capitalization or dividend
policy of the issuer;
(f) any other material change in the issuer's business or corporate
structure, including but not limited to, if the issuer is a registered
closed-end investment company, any plans or proposals to make any changes
in its investment policy for which a vote is required by Section 13 of the
Investment Company Act of 1940;
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(g) changes in the issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the issuer by any person;
(h) causing a class of securities of the issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in
an inter-dealer quotation system of a registered national securities
association;
(i) a class of equity securities of the issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange
Act; or
(j) any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) & (b) As of the date hereof, Digital is the record holder of
18,994,975 shares of Common Stock of the CMGI. This number represents 16.4% of
the outstanding common stock of CMGI. This percentage is based on the number of
shares of CMGI Common Stock reported by CMGI in its proxy statement filed with
the Commission on September 16, 1999. That number includes the 18,994,975
shares of CMGI Common Stock issued to Digital and referred to in this report.
Compaq is the sole shareholder of Digital and, as such, beneficially owns those
18,994,975 shares of CMGI Common Stock. Due to the relationship between Compaq
and Digital, Digital and Compaq share voting power and dispositive power with
respect to these shares.
(c) Except as described herein, neither Digital nor Compaq has
not effected any transactions in the Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
The responses to Items 3 and Item 4 of this Schedule 13D and the
Exhibits to this Schedule 13D are incorporated herein by reference.
In connection with the execution and delivery of the Purchase
and Contribution Agreement, Compaq and certain holders of CMGI Common Stock
entered into a Voting Agreement whereby such holders of CMGI Common Stock agree
to appear for the purpose of obtaining a quorum at any annual or special meeting
of stockholders of CMGI and to vote, or cause the record holder to vote, all the
shares of CMGI Common Stock owned by such holders in favor of the conversion of
the CMGI Series D Preferred Stock into CMGI Common Stock and to vote against any
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action, proposal or agreement that could reasonably be expected to prejudice
that conversion. The Voting Agreement is Exhibit D hereto and is incorporated
herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A: Joint Filing Agreement dated as of October 12, 1999
between the Reporting Persons.
Exhibit B: Purchase and Contribution Agreement, dated as of June 29,
1999, by and among CMGI, Inc. Compaq Computer Corporation,
Digital Equipment Corporation, AltaVista Company and Zoom
Newco.
Exhibit C: Amendment No. 1 to Purchase and Contribution Agreement,
dated as of August 18, 1999, by and among CMGI, Inc.,
Compaq Computer Corporation, Digital Equipment
Corporation, AltaVista Company and Zoom Newco Inc.
Exhibit D: Certificate of Designations, Preferences and Rights of
Series D Preferred Stock of CMGI, Inc.
Exhibit E: Voting Agreement, dated as of June 29, 1999, by and
between Compaq Computer Corporation and certain
stockholders
- ---------------------
1 Incorporated herein by reference to Exhibit 10.22 of the Form 8-K filed by
Compaq Computer Corporation with the Commission on August 13, 1999.
2 Incorporated herein by reference to Exhibit 2.2 of the Form 8-K filed by
CMGI, Inc. with the Commission on September 2, 1999.
3 Incorporated herein by reference to Exhibit 4.1 of the Form 8-K filed by
CMGI, Inc. with the Commission on September 2, 1999.
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SIGNATURES
After reasonable inquiry and to the best knowledge and belief of each of
the undersigned, each such person certifies that the information set forth in
this statement is true, complete and correct.
DIGITAL EQUIPMENT CORPORATION
Date: October 18, 1999 By: /s/Linda S. Auwers
-------------------------------
Name: Linda S. Auwers
Title: Vice President, Assistant
Secretary/Assistant Clerk
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SCHEDULE I
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DIRECTORS AND EXECUTIVE OFFICERS
OF DIGITAL EQUIPMENT CORPORATION
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
the Reporting Person. With the exception of Enrico Pesatori and Edward McCown
Straw, the business address of each director and executive officer is Digital
Equipment Corporation, Digital Equipment Corporation, 20555 State Highway 249,
Houston, TX 77070. Each such person is a U.S. citizen.
Edward McCown Straw Director, President of Digital and
Senior Vice President of Compaq, Supply
Chain Management. His business address
and the address of Compaq is 20555
State Highway 249, Houston, TX 77070.
Enrico Pesatori Director of Digital, Senior Vice
President of Compaq, Group General
Manager, Enterprise Solutions &
Services Group. His business address
and the address of Compaq is 20555 State
Highway 249, Houston,TX 77070.
Ben Kent Wells Director, Vice President and Treasurer of
Digital
William R. Johnson Vice President of Digital
Russel Wong Vice President of Digital
Irving Rothman Vice President of Digital
Michael Winkler Vice President of Digital
Linda S. Auwers Vice President, Assistant
Secretary/Assistant Clerk of Digital
Kimberly P. Bradbury Assistant Secretary/Assistant Clerk of
Digital
Louis B. Fontana, Jr. Assistant Secretary/Assistant Clerk of
Digital
Tom Grilk Assistant Secretary/Assistant Clerk of
Digital
Irene Kosturakis Assistant Secretary/Assistant Clerk of
Digital
Richard Lange Assistant Secretary/Assistant Clerk of
Digital
Ronald L. Smith Assistant Secretary/Assistant Clerk of
Digital
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DIRECTORS AND EXECUTIVE OFFICERS
OF COMPAQ COMPUTER CORPORATION
The following table sets forth the name, business address and present
principal occupation or employment of each director and executive officer of
the Reporting Person. Each such person is a U.S. citizen.
Michael D. Capellas Director of Compaq, President & Chief Executive
Officer. His business address is 20555 State
Highway 249, Houston, TX 77070
Benjamin M. Rosen Chairman of the Board, Compaq Computer Corporation.
His business address is 20555 State Highway 249,
Houston, TX 77070
Lawrence T. Babbio, Jr. Director of Compaq, Chief Operating Officer of Bell
Atlantic Corporation. Bell Atlantic Corporation
is a provider of advanced wireline voice and data
services, wireless services and publisher of
directory information. His business address and the
address of Bell Atlantic Corporation is 1095 Avenue
of America Room 912, New York, NY 10036
Frank P. Doyle Director of Compaq. His business address is 20555
State Highway 249, Houston, TX 77070
Robert T. Enloe, III Director of Compaq, managing partner of Balquita
Partners, Ltd, a real estate and securities
investment partnership. His business address,
and the address of Balquita Partnership, Ltd is
312 Maple Avenue, Suite 2000, Dallas Texas 75201
George H. Heilmeier Director of Compaq, Chairman Emeritus of Telcordia
Technologies, a research and engineering
consortium owned by Bell operating companies. His
business address and the address of Telcordia
is Morris Corporate Center, 445 South Street,
Morristown, New Jersey 07960 6438
Peter N. Larson Director of Compaq, Chairman and Chief Executive
Officer of Brunswick Corporation, a multinational
Company serving outdoor and indoor active
recreation markets. His business address and
the address of Brunswick Corporation is 1 N.
Field Court, Lake Forest, Ill 60045.
Kenneth L. Lay Director of Compaq, Chairman of the Board and Chief
Executive Officer of Enron Corp., a diversified
energy company. His business address and the
address of Enron Corp. is 1400 Smith Street,
50th Floor, Houston, Texas 77002
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Thomas J. Perkins Director of Compaq, general partner of Kleiner
Perkins Caufield & Byers since 1972, a private
investment partnership. His business address and
the address of Kleiner Perkins Caufield & Byers is
4 Emarcadero Center, Suite 1880, San Francisco,
CA 94111
Kenneth Roman Director of Compaq. His business address is 20555
State Highway 249, Houston, TX 77070.
Lucille S. Salhany Director of Compaq, President and Chief Executive
Officer of J.H. Media Limited. Her business address
And the address of J.H. Media Limited is 34
Strawberry Hill Street, Dover, MA 02030.
Judith L. Craven Director of Compaq. Her business address is 20555
State Highway 249, Houston, TX 77070.
Linda S. Auwers Vice President, Associate General Counsel and
Secretary of Compaq. Her business address and the
Address of Compaq is 20555 State Highway 249,
Houston, TX 77070.
Peter Blackmore Senior Vice President of Compaq, Group General
Manager, Sales & Marketing. His business address
and the address of Compaq is 20555 State Highway
249, Houston, TX 77070.
Michael D. Capellas President & Chief Executive Officer of Compaq.
His business address and the address of Compaq is
20555 State Highway 249, Houston, TX 77070.
Michael J. Larson Senior Vice President of Compaq, Group General
Manager, Consumer Group. His business address and
the address of Compaq is 20555 State Highway 249,
Houston, TX 77070.
Robert V. Napier Senior Vice President of Compaq, Information
Management & Chief Information Officer. His
business address and the address of Compaq is
20555 State Highway 249, Houston, TX 77070.
Enrico Pesatori Senior Vice President of Compaq, Group General
Manager, Enterprise Solutions & Services Group.
His business address and the address of Compaq is
20555 State Highway 249, Houston, TX 77070.
Thomas C. Siekman Senior Vice President & General Counsel of Compaq.
His business address and the address of Compaq is
20555 State Highway 249, Houston, TX 77070.
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Edward M. Straw Senior Vice President of Compaq, Supply Chain
Management. His business address and the address
of Compaq is 20555 State Highway 249, Houston,
TX 77070.
William D. Strecker Senior Vice President of Compaq, Technology &
Corporate Development. His business address and
the address of Compaq is 20555 State Highway 249,
Houston, TX 77070.
Ben K. Wells Vice President & Corporate Treasurer and Acting
Chief Financial Officer of Compaq. His business
address and the address of Compaq is 20555 State
Highway 249, Houston, TX 77070.
Michael J. Winkler Senior Vice President of Compaq, Group General
Manager, Commercial Personal Computing Group.
His business address and the address of Compaq is
20555 State Highway 249, Houston, TX 77070.
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EXHIBIT A
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Joint Filing Agreement
------------------------
In accordance with Rule 13d-1(k) of the Securities Exchange Act of 1934, as
amended, each of the parties hereto agrees with the other party that the
statement of Schedule 13D pertaining to certain securities of CMGI, Inc. to
which this agreement is an exhibit is filed by and on behalf of each such party
and that any amendment thereto will be filed on behalf of each such party.
COMPAQ COMPUTER CORPORATION
Date: October 18, 1999 By: /s/ Linda S. Auwers
----------------------
Name: Linda S. Auwers
Title: Vice President, Associate General
Counsel and Secretary
DIGITAL EQUIPMENT CORPORATION
Date: October 18, 1999 By: /s/ Linda S. Auwers
----------------------
Name: Linda S. Auwers
Title: Vice President, Assistant
Secretary/Assistant Clerk
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EXHIBIT E
---------
VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated June 29, 1999, by and
between Compaq Computer Corporation, a Delaware corporation ("Compaq") and each
of the parties identified on Annex I hereto (individually a "Stockholder" and
collectively the "Stockholders").
WHEREAS, the Stockholders are, as of the date hereof, the record and
beneficial owners of the shares of common stock, $.01 par value (the "Common
Stock") of CMGI, Inc., a Delaware corporation (the "Company"), set forth on
Annex I hereto;
WHEREAS, Zoom Newco Inc., a Delaware corporation and a wholly owned
subsidiary of CMGI ("Newco"), and Digital Equipment Corporation, a Massachusetts
corporation and a wholly owned subsidiary of Compaq ("Digital") have entered
into a Purchase and Contribution Agreement (the "Purchase Agreement") whereby
Digital will convey assets to Newco in exchange for shares of Common Stock and
Series D Preferred Stock (the "Preferred Security") of the Company and other
valuable consideration;
WHEREAS, the Preferred Security shall be convertible into shares of
Common Stock of the Company (the "Conversion") upon the affirmative vote of a
majority of votes cast of the stockholders of the Company; and
WHEREAS, as a condition to the willingness of Compaq and in order to
induce Compaq to enter into the Purchase Agreement, the Stockholders have agreed
to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Voting of Shares. Each Stockholder hereby agrees to (a)
appear, or cause the holder of record on any applicable record date (the "Record
Holder") to appear for the purpose of obtaining a quorum at any annual or
special meeting of stockholders of the Company and at any adjournment thereof at
which matters relating to the Conversion are considered, (b) vote, or cause the
Record Holder to vote, in person or by proxy all of the shares of the Company
Common Stock owned by Stockholder, or with respect to which such Stockholder has
or shares voting power or control, and all of the shares of Company Common Stock
which shall, or with respect to which voting power or control shall, hereafter
be acquired by such Stockholder (collectively, the "Shares") in favor of the
Conversion, and (c) vote, or cause the Record Holder to vote, in person or by
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proxy, at any meeting of stockholders, such Stockholder's Shares against any
action, proposal or agreement that could reasonably be expected to prejudice the
Conversion.
SECTION 2. Representations and Warranties of the Stockholders. The
Stockholders jointly and severally hereby represent and warrant to Compaq as
follows:
(a) Each Stockholder is the record and beneficial owner of the
shares of Common Stock (the number of which may be adjusted from time to time
pursuant to Section 4 hereof) set forth opposite his name on Annex I to this
Agreement.
(b) Each Stockholder has the legal capacity to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
(c) This Agreement has been validly executed and delivered by
each Stockholder and constitutes the legal, valid and binding obligation of such
Stockholder, enforceable against each Stockholder in accordance with its terms.
(d) Neither the execution and delivery of this Agreement nor the
consummation by each Stockholder of the transactions contemplated hereby will
violate any other agreement to which the Stockholder is a party.
(e) Each Stockholder hereby covenants and agrees that, except as
contemplated by this Agreement, the Stockholder (a) has not entered, and shall
not enter at any time while this Agreement remains in effect, into any voting
agreement inconsistent with this Agreement, and (b) has not granted, and shall
not grant at any time while this Agreement remains in effect, a proxy or power
of attorney, in either case which is inconsistent with this Agreement.
(f) The Shares and the certificates representing the Shares
owned by each Stockholder are now and at all times during the term hereof will
be held by the Stockholder, or by a nominee or custodian for the benefit of the
Stockholder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances or proxies arising
hereunder.
SECTION 3 Transfer of the Shares. Prior to the termination of
this Agreement, except as otherwise provided herein, (a) the Stockholder shall
not: (i) transfer (which term shall include, without limitation, for the
purposes of this Agreement, any sale, gift, pledge or other disposition), or
consent to any transfer of, any or all of the Shares or options to purchase
Common Stock ("Options"); (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of or encumbrance on any
16
of the Shares or Options or any interest therein; (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to the
Shares or Options; (iv) deposit the Shares into a voting trust or enter into a
voting agreement or arrangement with respect to the Shares or Options; or (v)
take any other action that would in any way restrict, limit or interfere with
the performance of such Stockholder's obligations hereunder or the transactions
contemplated hereby, and (b) the Stockholder, hereby agree and consent to the
entry of stock transfer instructions by the Company against the transfer of any
Shares consistent with the terms of Section 2(a).
SECTION 4 Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the acquisition
of additional shares of Common Stock or other securities or rights of the
Company by the Stockholder, the number of Shares shall be adjusted
appropriately, and this Agreement and the obligations hereunder shall attach to
any additional shares of Common Stock, Options or other securities or rights of
the Company issued to or acquired by the Stockholder.
SECTION 5 Termination. This Agreement, and all rights and
obligations of the parties hereunder, shall terminate immediately upon the
earlier of (a) the conversion of the Preferred Security into shares of Common
Stock of the Company, or (b) two months after the initial meeting of
stockholders referred to in Section 1; provided, however, that Section 7 shall
survive any termination of this Agreement.
17
SECTION 6 Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses; provided,
however, that if any legal action is instituted to enforce or interpret the
terms of this Agreement, the prevailing party in such action shall be entitled,
in addition to any other relief to which the party is entitled, to reimbursement
of its actual attorneys fees.
SECTION 7 Support for the Transaction. David S. Wetherell hereby
agrees that he will publicly and actively support the Conversion and will
publicly and actively oppose any action or proposed action that could materially
prejudice, hinder or delay the completion of the Conversion.
SECTION 8 Miscellaneous.
(a) The parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with its specified terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to specific performance of
the terms and provisions hereof in addition to any other remedy to which they
are entitled at law or in equity.
(b) All notices and other communications hereunder shall be in
writing and shall be deemed given upon (i) transmitter's confirmation of a
receipt of a facsimile transmission, (ii) confirmed delivery by a standard
overnight carrier or when delivered by hand or (iii) the expiration of five
business days after the day when mailed in the United States by certified or
registered mail, postage prepaid, addressed at the following addresses (or at
such other address for a party as shall be specified by like notice):
(A) if to the Stockholders, to:
David S. Wetherell
100 Brickstone Square
First Floor
Andover, Massachusetts 01810
Telephone: (978) 684-3600
Facsimile: (978) 684-3814
(B) if to Compaq, to:
Compaq Computer Corporation
20555 State Highway 249
Houston, Texas 77070
Attention: General Counsel
Telephone: (281) 370-0670
Facsimile: (281) 927-8835
18
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall be considered
one and the same agreement.
(e) This Agreement (including any other documents and
instruments referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and understandings, whether written and oral, among the
parties hereto with respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without giving effect to the
principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by, the parties and their
respective successors and assigns, and the provisions of this Agreement are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
(h) If any term, provision, covenant or restriction herein is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
(i) Each of the parties hereto acknowledges and agrees that in
the event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (i) will waive, in
any action for specific performance, the defense of adequacy of a remedy at law,
and (ii) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in writing and
signed by such party.
19
END OF AGREEMENT EXCEPT FOR SIGNATURE PAGES
20
IN WITNESS WHEREOF, Compaq and the Stockholders have caused this Agreement
to be duly executed under seal and delivered as of the date first written
above.
COMPAQ COMPUTER CORPORATION
By: /s/ Harold F. Enright, Jr.
--------------------------------
Name: Harold F. Enright, Jr.
Title: Vice President
DAVID S. WETHERELL
/s/ David S. Wetherell
--------------------------------
Name: David S. Wetherell
DAVID S. WETHERELL CHARITABLE TRUST
By: /s/ David S. Wetherell
--------------------------------
Name: David S. Wetherell
Title: Trustee
NORTH ANDOVER, LLC
By: KITTREDGE, LLC, its Managing Member
By: /s/ David S. Wetherell
--------------------------------
Name: David S. Wetherell
Title: Managing Member
21
ANNEX I
Ownership of Common Stock
Beneficial Owner Shares of Common Stock
David S. Wetherell 6,741,232
David S. Wetherell
Charitable Trust 23,372
North Andover, LLC 8,466,336
22