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. 5)
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)
October 4, 2001
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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 6 Pages)
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CUSIP No. 292827102 13D Page 2 of 6 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 196,628,703
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 196,628,703
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
196,628,703
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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)
80.4%
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14 TYPE OF REPORTING PERSON (See Instructions)
CO
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CUSIP No. 292827102 13D Page 3 of 6 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 "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.
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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 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.
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CMGI owns certain shares of Engage Common Stock initially issued by Engage
to CMGI pursuant to the Agreement and Plan of Merger and Contribution (the
"Merger Agreement"), dated as of January 19, 2000, by and among Engage, CMGI,
AdSmart Corporation, Flycast Communications Corporation and FCET Corp. In
accordance with the Merger Agreement, CMGI is required to return certain of
these shares to Engage on a quarterly basis, if certain conditions are not met.
On July 31, 2001, CMGI returned to Engage an aggregate of 1,708,091 shares,
representing 821,421 shares returned for the quarter ended January 31, 2001 and
886,670 shares returned for the quarter ended April 30, 2001. On December 31,
2001, CMGI returned to Engage an aggregate of 1,535,045 shares, representing
402,183 shares returned for the quarter ended July 31, 2001 and 1,132,862 shares
returned for the quarter ended October 31, 2001. On April 5, 2002, CMGI returned
to Engage an aggregate of 212,253 shares, representing shares returned for the
quarter ended January 31, 2002.
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CUSIP No. 292827102 13D Page 4 of 6 Pages
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On October 4, 2001, Engage issued to CMGI two secured convertible
promissory notes. The first of these notes ("Note 1") was issued in
consideration for a loan from CMGI to Engage in the amount of $8,000,000. Note 1
bears interest at 7.5% per annum. The principal is payable upon demand, but no
earlier than August 1, 2002, or earlier upon an event of default. Interest is
compounded and payable quarterly in arrears on October 31, January 31, April 30
and July 31 of each year until the note is paid in full. Interest payments for
the quarters ending October 31, 2001, January 31, 2002, April 30, 2002 and July
31, 2002 are deferred until, and become payable on, August 1, 2002. Unpaid
principal and interest on Note 1 is convertible, at CMGI's election, into shares
of Engage Common Stock at a conversion price initially equal to $0.25 per share.
This conversion price, however, is subject to weighted average antidilution
protection whereby the conversion price may be adjusted downward if Engage
issues Common Stock in the future at a per share price less than the then
current market price, which is defined in Note 1 as the average of the daily
closing prices of Engage's Common Stock for the five consecutive trading days
selected by Engage's Board of Directors commencing not more than 20 trading days
before, and ending not later than the date immediately preceding the date of
issuance. Excluded from the anti-dilution provisions are (i) issuances to CMGI
or any affiliate thereof or (ii) issuances by Engage to directors, employees,
consultants or advisors of Engage or grants of options or other rights to
acquire Common Stock at a price or exercise price, as the case may be, no lower
than the fair market value of the Common Stock at the time of issuance or grant,
as determined by the Board of Directors. Note 1 is collateralized by
substantially all of Engage's assets. As of February 28, 2002, Note 1 was
convertible into 32,803,750 shares of Engage Common Stock, none of which shares
had been issued.
Engage has also agreed with CMGI to structure any intercompany debt
incurred by Engage to CMGI between October 1, 2001 and July 31, 2002 under a
second secured convertible promissory note ("Note 2"). Note 2 was amended in
February 2002 and also bears interest at 7.5% per annum. The principal is
payable upon demand, but no earlier than August 1, 2002, or earlier upon an
event of default. Interest is compounded monthly and payable quarterly in
arrears on October 31, January 31, April 30 and July 31 of each year until the
note is paid in full. Interest payments for the quarters ending October 31,
2001, January 31, 2002, April 30, 2002 and July 31, 2002 are deferred until, and
become payable on, August 1, 2002. Unpaid principal and interest on Note 2 is
also convertible, at CMGI's election, into shares of Engage's Common Stock.
Under Note 2, the conversion price for the intercompany debt incurred by Engage
and the interest accrued on outstanding debt each calendar month is based on the
closing price of Engage's Common Stock on the last trading day of such calendar
month. The conversion prices for Note 2, however, are each also subject to
weighted average antidilution protection on the same terms as set forth in the
description of Note 1 above. Note 2 is also collateralized by substantially all
of Engage's assets. As of February 28, 2002, Note 2 was convertible into
15,407,152 shares of Common Stock, none of which shares had been issued.
Item 4. Purpose of the Transaction.
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(a) See the description of the transactions related to the Merger Agreement,
Note 1 and Note 2 set forth in Item 3 above, which description is incorporated
by reference herein.
Item 5. Interest in Securities of the Issuer.
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(a)-(b) CMGI beneficially owns 196,628,703 shares of Engage, representing
80.4% of Engage's outstanding common stock as of the date of filing of this
statement, and consisting of 148,417,801 shares of Engage Common Stock,
32,803,750 shares of Engage Common Stock issuable upon conversion of Note 1
within 60 days after February 28, 2002, and 15,407,152 shares of Engage Common
Stock issuable upon conversion of Note 2 within 60 days after February 28, 2002.
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.
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CUSIP No. 292827102 13D Page 5 of 6 Pages
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(c) See the description of the transactions related to the Merger
Agreement, Note 1 and Note 2 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
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to Securities of the Issuer.
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In September 2001, Engage restructured its outstanding amounts payable to
CMGI into a secured promissory note payable in the amount of $42.7 million
("Note 3") bearing interest at 7.5% per annum. Under the terms of Note 3,
principal is payable upon demand, but no earlier than August 1, 2002, or earlier
upon the occurrence of an event of default as defined in Note 3. Interest is
compounded and payable quarterly in arrears in cash on October 31, January 31,
April 30 and July 31 of each year until the note is paid in full. Interest
payments for the quarters ending October 31, 2001, January 31, 2002, April 30,
2002 and July 31, 2002 are deferred until, and become payable on, August 1,
2002. The note is collateralized by substantially all of Engage's assets.
Other than the Merger Agreement, Note 1, Note 2, Note 3, the Stock Purchase
Agreement, dated as of June 19, 2000, by and among CMGI, Engage and CPQ
Holdings, Inc., the Investor Rights Agreement, dated as of July 23, 1999 by and
between CMGI and Engage, and Amendment No. 1 to the Investor Rights Agreement
dated as of June 19, 2000, by and among 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.
--------------------------------
Not applicable.
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: April 10, 2002
CMGI, INC.
By: /s/ George A. McMillan
--------------------------
George A. McMillan
Title: Chief Executive Officer
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CUSIP No. 292827102 13D Page 6 of 6 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
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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David Andonian 100 Brickstone Square 101,084
President and Chief Operating Officer 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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Patricia Gilligan 400 Minuteman Road 0
President and Chief Executive Officer Andover, MA 01810
NaviSite, Inc.
(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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Barry K. Allen Allen Enterprises, LLC 0
President, Allen Enterprises, LLC 18500 W. Corporate Drive, Suite 170
Brookfield, WI 53045
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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, 34th 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