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. 9)
Engage, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
292827102
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(CUSIP Number)
Peter L. Gray, Executive Vice President and General Counsel, CMGI, Inc.,
100 Brickstone Square, Andover, Massachusetts, 01810 978-684-3600
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
September 9, 2002
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(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 which 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 [_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following pages)
(Page 1 of 7 Pages)
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CUSIP No. 292827102 13D Page 2 of 7 Pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
CMGI, Inc.
04-2921333
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See Instructions)
WC; OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
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7 SOLE VOTING POWER
NUMBER OF 4,773,550
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 4,773,550
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,773,550
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
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14 TYPE OF REPORTING PERSON (See Instructions)
CO
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CUSIP No. 292827102 13D Page 3 of 7 Pages
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Neither the filing of this Schedule 13D nor any of its contents shall be
deemed to constitute an admission by CMGI, Inc., a Delaware corporation
("CMGI"), that it is the beneficial owner of any of the Common Stock referred to
herein for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or for any other purpose, and such beneficial
ownership is expressly disclaimed.
Item 1. Security and Issuer.
This statement on Schedule 13D relates to the Common Stock, $0.01 par
value per share (the "Common Stock"), of Engage, Inc., a Delaware corporation
("Engage" or "Issuer"). The principal executive offices of Engage are located at
100 Brickstone Square, Andover, MA 01810.
Item 2. Identity and Background.
The name of the corporation filing this statement is CMGI, Inc. CMGI is a
Delaware corporation. CMGI's principal business is developing and operating
Internet companies. The address of the principal executive offices of CMGI is
100 Brickstone Square, Andover, MA 01810. To the best knowledge of CMGI, set
forth on Schedule A, which is incorporated herein by reference, is the
. name, residence or business address
. present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which
such employment is conducted
. shares of Engage Common Stock beneficially owned, and
. citizenship
of each of CMGI's directors and executive officers, as of the date of filing
this statement. Neither CMGI nor, to the best of CMGI's knowledge, any person
named on Schedule A, attached hereto, is required to disclose legal proceedings
pursuant to Items 2(d) or 2(e).
Item 3. Source and Amount of Funds or Other Consideration.
On September 9, 2002, CMGI, Inc. ("CMGI") divested all of its equity
and debt ownership interests in Engage, Inc. ("Engage"). Under the terms of the
Transaction Agreement, dated as of September 9, 2002, by and among CMGI, CMGI
(UK) Limited and Engage (the "Transaction Agreement"), CMGI transferred to
Engage approximately 148 million shares of common stock of Engage held by CMGI
and cancelled approximately $60 million of debt, including all convertible debt,
owed to CMGI by Engage (the "Transaction"). In consideration of the equity
transfer and debt cancellation, Engage, among other things, (i) paid to CMGI
$2.5 million in cash, (ii) agreed to pay to CMGI up to an additional $6.0
million, comprised of a senior secured promissory note due in September 2006 and
earnout payments commencing in fiscal year 2004, and (iii) issued to CMGI a
warrant (the "Warrant") to purchase up to 9.9% of the issued and outstanding
shares of Engage Common Stock, at an exercise price of $.048 per share.
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CUSIP No. 292827102 13D Page 4 of 7 Pages
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The Warrant is exercisable at any time and from time to time on or before
the earlier of (i) the moment immediately prior to the consummation of a Company
Sale (as defined) or (ii) September 9, 2009. The Warrant shall be exercisable,
in accordance with its terms, for the number of shares of Common Stock of Engage
equal to the product of 9.9% multiplied by the Number of Outstanding Shares of
Common Stock (as defined below). For purposes of the Warrant, the "Number of
Outstanding Shares of Common Stock" shall mean (i) the number of issued and
outstanding shares of Common Stock of Engage plus (ii) the number of shares of
Common Stock of Engage issuable upon the exercise or conversion of any
outstanding securities or other rights which are exercisable for or convertible
into Common Stock of Engage (other than shares issuable (a) upon exercise of
this Warrant or (b) to employees or directors of Engage) as of the earlier of:
(A) the date of the first exercise of the Warrant, or (B) the moment immediately
prior to the consummation of a Company Sale. The holder may exercise the Warrant
in whole or in part by paying the aggregate price in cash or by canceling a
portion of the Warrant equal in value to the aggregate exercise price.
In connection with the Transaction, the Investor Rights Agreement, dated as
of July 23, 1999, by and between CMGI and Engage, as amended, was amended and
restated to provide certain registration rights to CMGI with respect to the
shares of Common Stock of Engage issuable upon exercise of the Warrant.
Also in connection with the Transaction, all obligations of CMGI under the
Agreement and Plan of Merger and Contribution (the "Flycast/AdSmart Agreement"),
dated as of January 19, 2000, by and among Engage, CMGI, AdSmart Corporation,
Flycast Communications Corporation and FCET Corp., were terminated, including
the requirement that CMGI return certain shares of Engage Common Stock to Engage
on a quarterly basis if certain conditions pursuant to the Flycast/AdSmart
Agreement are not met.
The Transaction Agreement and the press release announcing the Transaction
are filed as exhibits herewith and are incorporated by reference herein.
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CUSIP No. 292827102 13D Page 5 of 7 Pages
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Item 4. Purpose of the Transaction.
See the description of the Transaction set forth in Item 3 above, which
description is incorporated by reference herein.
Item 5. Interest in Securities of the Issuer.
(a)-(b) CMGI beneficially owns 4,773,550 shares of Engage, representing
9.9% of Engage's outstanding common stock as of September 9, 2002, consisting of
shares of Engage Common Stock issuable upon exercise of the Warrant within 60
days after September 9, 2002. In accordance with the terms of the Warrant, the
number of shares of Engage Common Stock issuable upon exercise of the Warrant
will fluctuate with changes in the Number of Outstanding Shares of Common Stock
until the earlier of (A) the date of the first exercise of the Warrant or (B)
the moment immediately prior to the consummation of a Company Sale. CMGI has
sole power to vote or direct the vote and dispose or direct the disposition as
to all such shares. See also Schedule A attached hereto.
(c) See the description of the Transaction set forth in Item 3 above, which
description is incorporated by reference herein.
(d)-(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Other than the Transaction Agreement, the Stock Purchase Agreement, dated
as of June 19, 2000, by and among CMGI, Engage and CPQ Holdings, Inc., and the
Amended and Restated Investor Rights Agreement, dated as of September 9, 2002,
by and between CMGI and Engage, to the best knowledge of CMGI, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons or entities listed in Item 2 and between such persons or
entities and any person or entity with respect to any securities of Engage,
including but not limited to transfer of voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies.
Item 7. Material to be Filed as Exhibits.
EXHIBIT DESCRIPTION
1. Transaction Agreement, dated as of September 9, 2002, by and among
CMGI, Inc., CMGI (UK) Limited and Engage, Inc. is incorporated herein
by reference to Exhibit 10.1 to the Current Report on Form 8-K dated
September 9, 2002 of CMGI (File No. 000-23262).
2. Press Release, dated September 9, 2002 is incorporated herein by
reference to Exhibit 99.1 to the Current Report on Form 8-K dated
September 9, 2002 of CMGI (File No. 000-23262).
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CUSIP No. 292827102 13D Page 6 of 7 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
hereby certify that the information set forth in this statement is true,
complete and correct.
DATED: September 17, 2002
CMGI, INC.
By: /s/ Thomas Oberdorf
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Thomas Oberdorf
Title: Chief Financial Officer and Treasurer
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CUSIP No. 292827102 13D Page 7 of 7 Pages
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Schedule A
SHARES OF ENGAGE COMMON STOCK
NAME BUSINESS ADDRESS BENEFICIALLY OWNED*
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EXECUTIVE OFFICERS OF CMGI
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David S. Wetherell 100 Brickstone Square 46,000
Chairman of the Board and Secretary Andover, MA 01810
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George A. McMillan 100 Brickstone Square 0
President and Chief Executive Andover, MA 01810
Officer
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Thomas Oberdorf 100 Brickstone Square 0
Chief Financial Officer and Treasurer Andover, MA 01810
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Peter L. Gray 100 Brickstone Square 0
Executive Vice President Andover, MA 01810
and General Counsel
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James Barnett 1070 Arastradero Road 0
Chief Executive Officer Palo Alto, CA 94304
AltaVista Company
(a subsidiary of CMGI)
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Christian Feuer 8550 West Bryn Mawr Avenue 0
President and Chief Executive Officer Suite 200
uBid, Inc. Chicago, IL 60631
(a subsidiary of CMGI)
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DIRECTORS OF CMGI
(PRESENT PRINCIPAL OCCUPATION)
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David S. Wetherell See above See above
See above
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Anthony J. Bay c/o CMGI, Inc. 8,000
Private venture capital 100 Brickstone Square
investor and advisor Andover, MA 01810
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Virginia G. Bonker Blue Rock Capital 0
General Partner, Blue Rock 5700 Kennett Pike
Capital, L.P. Wilmington, DE 19807
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Jonathan Kraft The Kraft Group 0
President and Chief Operating Officer 1 Boston Place, 34/th/ Floor
The Kraft Group Boston, MA 02108
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Peter McDonald c/o CMGI, Inc. 0
Retired 100 Brickstone Square
Andover, MA 01810
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George A. McMillan See above See above
See above
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* Unless otherwise indicated, each person exercises sole voting and dispositive
power over shares of Engage Common Stock beneficially owned by such person.
Citizenship of each of the above named persons: USA, except for Mr. Feuer, who
is a citizen of Germany.