SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D*
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
Under the Securities Exchange Act of 1934
(Amendment No. )
CNET Networks, Inc.
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(Name of Issuer)
Common Stock, par value $0.0001 per share
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(Title of Class of Securities)
12613R104
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(CUSIP Number)
Marc Weingarten, Esq.
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
(212) 756-2000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 26, 2007
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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 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. [ ]
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.
(Continued on following pages)
(Page 1 OF 16 Pages)
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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)
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 2 OF 16 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JANA PARTNERS LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
8,586,995
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NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 3,713,178
OWNED BY ----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 8,586,995
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10 SHARED DISPOSITIVE POWER
3,713,178
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
12,300,173
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.1%
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14 TYPE OF REPORTING PERSON*
IA
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 3 OF 16 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
SPARK MANAGEMENT PARTNERS, L.L.C.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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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
DELAWARE
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7 SOLE VOTING POWER
- 0 -
---------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 2,583,979
OWNED BY ---------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH - 0 -
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,583,979
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
2,583,979
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.7%
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14 TYPE OF REPORTING PERSON*
OO
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 4 OF 16 PAGES
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-------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
VELOCITY INTERACTIVE MANAGEMENT, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK 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
DELAWARE
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7 SOLE VOTING POWER
- 0 -
---------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 1,000,000
OWNED BY ---------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH - 0 -
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,000,000
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
1,000,000
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.7%
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14 TYPE OF REPORTING PERSON*
OO
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 5 OF 16 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ALEX INTERACTIVE MEDIA, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK 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
DELAWARE
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7 SOLE VOTING POWER
-0-
---------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 129,199
OWNED BY ---------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH -0-
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
129,199
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
129,199
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
less than 0.1%
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14 TYPE OF REPORTING PERSON*
OO
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 6 OF 16 PAGES
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Item 1. Security and Issuer.
This statement on Schedule 13D relates to the shares ("Shares") of
common stock, par value $0.0001 per share, of CNET Networks, Inc. (the
"Issuer"). The principal executive office of the Issuer is located at 235 Second
Street, San Francisco, CA 94105.
Item 2. Identity and Background.
(a) This statement is filed by:
(i) JANA Partners LLC, a Delaware limited liability company
("JANA"), with respect to the Shares beneficially owned by it. JANA is a private
money management firm which holds Shares in various accounts under its
management and control. The principals of JANA are Barry Rosenstein and Gary
Claar (the "JANA Principals");
(ii) Spark Management Partners, L.L.C., a Delaware limited
liability company ("Spark"), with respect to the Shares beneficially owned by
it. Spark is the general partner of Spark Capital, L.P., a venture capital fund
(the "Spark Fund"). The Spark Fund is the managing member of CT-100 Holdings,
LLC, a Delaware limited liability company ("CT-100"), which holds the Shares
beneficially owned by Spark. The principals of Spark are Todd Dagres, Santo
Politi, Dennis Miller, Paul Conway and Bijan Sabet (the "Spark Principals");
(iii) Velocity Interactive Management, LLC, a Delaware limited
liability company ("Velocity"), with respect to the Shares beneficially owned by
it. Velocity is a private money management firm. The principals of Velocity are
Jonathan Miller, David Britts, Ross Levinsohn, Keyur Patel and Roland Van der
Meer (the "Velocity Principals"); and
(iv) Alex Interactive Media, LLC, a Delaware limited liability
company ("AIM"), with respect to the Shares beneficially owned by it. AIM is a
private investment company. The principal of AIM is Paul Gardi ("Gardi");
(b) The principal business address of JANA, Spark, Velocity, and AIM
(collectively, the "Reporting Persons") and the JANA Principals, the Spark
Principals, the Velocity Principals and Gardi is:
(i) JANA and the JANA Principals: 200 Park Avenue, Suite 3300,
New York, NY 10166;
(ii) Spark and the Spark Principals: 137 Newbury Street, 8th
Floor, Boston, MA 02116;
(iii) Velocity and the Velocity Principals: 305 Lytton Avenue,
Palo Alto, CA 94301; and
(iv) AIM and Gardi: Carnegie Hall Tower, 152 West 57th Street,
Floor 26, New York, NY 10019;
(c) The principal business of each of the Reporting Persons is below:
(i) The principal business of JANA and the JANA Principals is
investing for accounts under their management.
(ii) The principal business of Spark and the Spark Principals
is the making and management of venture capital investments.
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 7 OF 16 PAGES
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(iii) The principal business of Velocity and the Velocity
Principals is investing for accounts under their management.
(iv) The principal business of AIM is leveraging its domain
expertise in digital media and related industries. Gardi is a private investor.
(d) None of the Reporting Persons, the JANA Principals, the Spark
Principals, the Velocity Principals, or Gardi has, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the Reporting Persons, the JANA Principals, the Spark
Principals, the Velocity Principals, or Gardi has, during the last five years,
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding 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) Each of the Reporting Persons is a limited liability company
organized in Delaware. Gardi is a citizen of South Africa. Except as set forth
in the next sentence, each of the JANA Principals, the Spark Principals and the
Velocity Principals is a citizen of the United States of America. Roland Van der
Meer is a citizen of the Netherlands.
Item 3. Source and Amount of Funds or Other Consideration.
The 12,300,173 Shares reported herein as being beneficially owned by
JANA were acquired at an aggregate purchase price of approximately $105,233,662.
The Shares beneficially owned by JANA were acquired with investment funds in
accounts under management. The Shares which are reported herein as being
beneficially owned by Spark are so reported based on CT-100's contractual
obligation to purchase such shares from JANA, as described in Item 6 below, but
such purchase has not yet been consummated. The amount of funds to be used to
purchase such Shares will be $20 million and the source of such funds will be
the working capital of CT-100. The Shares which are reported herein as being
beneficially owned by AIM are so reported based on its contractual obligation to
purchase such shares from JANA, as described in Item 6 below, but such purchase
has not yet been consummated. The Shares which are reported herein as being
beneficially owned by Velocity are so reported based on its option to purchase
such Shares from JANA, as described in Item 6 below, but such option has not yet
been exercised. The amount of funds to be used by AIM and Velocity (should
Velocity exercise its option) to purchase such Shares will be $1 million and up
to $10 million, respectively, and the source of such funds will be the working
capital of each such party or an affiliate of such party.
Item 4. Purpose of Transaction.
JANA originally acquired Shares after representatives of JANA met in
October, 2007 with Paul Gardi of AIM, who described what he believed to be
operating issues at the Issuer and stated his belief that addressing such issues
could result in a significant increase in the value of the Shares. Following
subsequent meetings, Gardi introduced JANA's representatives to representatives
of Spark in November, 2007 to discuss working together to propose to the Issuer
how these operating issues could be addressed. On December 3, 2007, JANA,
CT-100, AIM and Gardi entered into a letter agreement (the "Letter Agreement")
setting forth certain terms and conditions of their investment in the Issuer. In
December, 2007, representatives of Spark introduced representatives of JANA to
representatives of Velocity to discuss the same matters. On December 23, 2007,
JANA, CT-100, AIM, Gardi and Velocity entered into an amended and restated
agreement (the "Amended and Restated Agreement") which amended and restated the
terms of the Letter Agreement, in
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 8 OF 16 PAGES
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order to, among other things, add Velocity as a party. The terms of the Amended
and Restated Agreement are described in Item 6 of this Schedule 13D. CT-100 and
Gardi will acquire Shares from JANA pursuant to the terms and conditions of the
Amended and Restated Agreement. In connection with becoming a party to the
Amended and Restated Agreement, Velocity has entered into an Option Agreement
(the "Option Agreement") with JANA granting it the option to acquire Shares from
JANA. The terms of the Option Agreement are described in Item 6 of this Schedule
13D.
Representatives of JANA held several calls with representatives of the
Issuer throughout the month of October, 2007 as well as a call on November 1,
2007 with the Issuer's Chief Executive Officer, Neil Ashe. On December 6, 2007,
Santo Politi of Spark met with Jarl Mohn, the Chairman of the Board of Directors
of the Issuer (the "Board"), to inform him of the investment in the Shares by
JANA, CT-100 and Gardi and to discuss proposals for improving the operating
performance of the Issuer. Politi proposed a follow-up discussion with
additional independent directors of the Issuer. In a subsequent conversation,
Mr. Mohn informed Politi that any discussions with members of the Board would
need to be coordinated by Ashe. In further communications with Ashe, it was
communicated to Politi that a meeting with independent Board members would not
be arranged, but rather the investors could meet with Ashe who would communicate
later with the Board.
On December 28, 2007, JANA delivered a notice (the "Notice") to the
Issuer informing the Issuer of its intention (i) to propose two Class III
nominees for election to the Board at the Issuer's 2008 Annual Meeting, (ii) to
propose amendments to the Bylaws of the Issuer to (A) increase the size of the
Board from eight directors to 13 directors, (B) delete a Bylaw provision
providing that in case of any increase in the size of the Board in advance of an
annual meeting of stockholders, additional directors shall be elected by the
directors then in office, (C) delete a Bylaw provision providing that any newly
created directorships resulting from an increase in the size of the Board shall
be apportioned by the Board among the three classes of directors, and (D) add a
Bylaw provision providing that any new directorship created as a result of an
increase in the number of directors may be filled with a person elected by the
stockholders, and (iii) to propose an additional five nominees for election to
the Board to occupy the new directorships created by the adoption of the Bylaw
amendments described in clause (ii) above. The Class III nominees are Paul Gardi
and Santo Politi. The nominees for the new directorships created by the proposed
Bylaw amendments described above are Jonathan Miller, Jaynie Studenmund, Julius
Genachowski, Brian Weinstein and Giorgio Caputo.
The Notice was accompanied by a letter from JANA (the "JANA Letter") to
the Issuer in which JANA stated its view that certain provisions of the Issuer's
Bylaws are either incorrectly interpreted by the Issuer and/or are either
inapplicable or unenforceable under Delaware law. A copy of the JANA Letter is
filed as Exhibit 1 to this Schedule 13D and is incorporated herein by reference.
On January 7, 2008, JANA Master Fund, Ltd. (the "Plaintiff"), an
affiliate of JANA, filed a Verified Complaint for Declaratory and Injunctive
Relief in the Court of Chancery of the State of Delaware (the "Complaint"). The
Complaint alleges that the Issuer is improperly attempting (i) to apply Article
II, Section 3 of the Issuer's By-laws to prohibit the Plaintiff from submitting
its proposals for stockholder approval at the Issuer's 2008 annual meeting and
(ii) to apply Article III, Section 6 of the Issuer's By-laws to prohibit the
Plaintiff from submitting its director candidates for election by the
stockholders at such meeting. In the Complaint, Plaintiff seeks (i) a
declaration that the Issuer's interpretation of Article II, Section 3, and
Article III, Section 6 of the Issuer's By-laws (the "Disputed By-laws") is
invalid as a matter of law and (ii) an order preliminarily and permanently
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 9 OF 16 PAGES
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enjoining the application of the Disputed By-laws to Plaintiff's nomination of
individuals as candidates for director and to Plaintiff's proposals to be
presented for stockholder approval at the Issuer's 2008 Annual Meeting. The
Complaint also alleges that if the Disputed By-laws are interpreted in the
manner the Issuer urges, such By-laws are invalid as a matter of law because,
among other reasons, they (i) impermissibly limit the fundamental right of
stockholders of the Issuer to propose and transact business and to nominate
candidates for director election at an annual meeting, (ii) impermissibly treat
holders of the same class of stock of the Issuer differently and unequally, and
(iii) impose an unreasonable requirement on the stockholders of the Issuer that
does not further a legitimate or proper purpose. In the Complaint, Plaintiff
also seeks an order compelling the Issuer to produce certain requested stocklist
materials pursuant to 8 Del. C. ss. 220. A copy of the Complaint is filed as
Exhibit 2 to this Schedule 13D and is incorporated herein by reference.
On January 7, 2008, JANA issued a press release (the "Press Release")
announcing its intention to nominate seven people for election to the Board at
the Issuer's 2008 Annual Meeting. A copy of the Press Release is filed as
Exhibit 3 to this Schedule 13D and is incorporated herein by reference.
Except as set forth herein or as would occur upon completion of any of
the actions discussed herein, the Reporting Persons have no present plan or
proposal that would relate to or result in any of the matters set forth in
subparagraphs (a)-(j) of Item 4 of Schedule 13D. The Reporting Persons intend to
review their investments in the Issuer on a continuing basis and may engage in
further discussions with management, the Board, other stockholders of the Issuer
and other relevant parties concerning the business, operations, governance,
management, strategy and future plans of the Issuer. Depending on various
factors including, without limitation, the Issuer's financial position and
strategic direction, the outcome of any discussions referenced above, actions
taken by the Board, price levels of the Shares, other investment opportunities
available to the Reporting Persons, conditions in the securities market and
general economic and industry conditions, the Reporting Persons may in the
future take such actions with respect to their investments in the Issuer as they
deem appropriate including, without limitation, purchasing additional Shares or
selling some or all of the Shares held by the Reporting Persons, engaging in
short selling of or any hedging or similar transactions with respect to the
Shares and/or otherwise changing their intention with respect to any and all
matters referred to in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Company.
(a) The aggregate percentage of Shares reported to be beneficially
owned by the Reporting Persons is based upon 151,973,545 Shares outstanding,
which is the total number of Shares outstanding as of October 31, 2007 as
reported in the Issuer's Quarterly Report on Form 10-Q filed on November 5, 2007
for the period ended September 30, 2007.
As of the close of business on January 4, 2008; (i) JANA may be deemed
to beneficially own 12,300,173 Shares, constituting approximately 8.1% of the
Shares outstanding, (ii) Spark may be deemed to beneficially own 2,583,979
Shares, constituting approximately 1.7% of the Shares outstanding, (iii)
Velocity may be deemed to beneficially own 1,000,000 Shares, constituting
approximately 0.7% of the Shares outstanding, and (iv) AIM may be deemed to
beneficially own 129,199 Shares, constituting less than 0.1% of the Shares
outstanding. Spark and AIM beneficially own their respective Shares by virtue of
the Amended and Restated Agreement described in Item 6 below. Velocity
beneficially owns its Shares by virtue of the Option Agreement described in Item
6 below.
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 10 OF 16 PAGES
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By virtue of the Amended and Restated Agreement and the Option
Agreement, the Reporting Persons may be deemed to have formed a "group" within
the meaning of Section 13(d)(3) of the Securities Act of 1934 and may be deemed
to beneficially own 12,300,173 Shares, constituting approximately 8.1% of the
Shares outstanding. However, each of the Reporting Persons expressly disclaims
beneficial ownership of the Shares beneficially owned by the other Reporting
Persons.
(b) JANA has sole voting and dispositive powers over 8,586,995 Shares,
which powers are exercised by the JANA Principals, and (i) by virtue of the
Option Agreement, shared voting and dispositive power over 1,000,000 Shares,
which power is shared with Velocity and (ii) by virtue of the Amended and
Restated Agreement, shared voting and dispositive power over 129,199 Shares and
2,583,979 Shares, which power is shared with AIM and Spark, respectively. Spark
shares voting and dispositive powers over the 2,583,979 Shares beneficially
owned by it, but will have sole voting and dispositive powers over such Shares
when such Shares are purchased by it from JANA pursuant to the Amended and
Restated Agreement, which powers will be exercised by the Spark Principals. AIM
shares voting and dispositive powers over the 129,199 Shares beneficially owned
by it, and will continue to have shared voting and dispositive powers over such
Shares, which powers will be exercised by Gardi and shared by JANA and CT-100,
when such Shares are purchased by it through AIM's investment in the JANA SPV
referred to in Item 6 below and in CT-100. By virtue of the Option Agreement,
Velocity shares voting and dispositive power over the Shares beneficially owned
by it with JANA. Velocity will have sole voting and dispositive power over any
Shares purchased by it under the Option Agreement, as described in Item 6 below,
which power will be exercised by the Velocity Principals.
(c) Information concerning transactions in the Shares effected by the
Reporting Persons during the past sixty days is set forth in Appendix A hereto
and is incorporated herein by reference.
(d) No person (other than the Reporting Persons) is known to have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements Understandings or Relationships with
Respect to Securities of the Company
Pursuant to the Amended and Restated Agreement, AIM, as Gardi's
employer, and Gardi agreed to provide financial and operational advisory and
consulting services to JANA and CT-100 in connection with existing or potential
investments by JANA and CT-100 (and affiliated entities of both) in Shares. In
return, Gardi is entitled to receive compensation consisting of (i) a consulting
fee (the "Consulting Fee") equal to four quarterly payments of $25,000 (which
Consulting Fee shall be refunded to the extent Gardi receives any payment
directly from the Issuer or in respect of the Profit Participation (as defined
below)) and (ii) 9% of the net profits of JANA, CT-100 and affiliated entities
of both from investments in Shares (the "Profit Participation"). The Profit
Participation is payable to Gardi only if the net profits of JANA and CT-100
(and affiliated entities of both) on their investment in Shares exceed an 8%
internal rate of return. The Profit Participation will be paid to Gardi upon the
realization of such net profits, or, if Shares to which the Profit Participation
applies remain unsold on December 23, 2010, upon the request of Gardi at any
time thereafter. Consulting fees or other compensation paid to any potential
third party nominee to the Board will be deducted from the amount paid to Gardi,
subject to certain caps, in respect of the Profit Participation. Under the
Amended and Restated Agreement, CT-100 and Gardi have agreed to purchase $20
million and $1 million,
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 11 OF 16 PAGES
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respectively, of Shares from JANA. Gardi's purchase of Shares under the Amended
and Restated Agreement will be made by AIM, as contemplated by the Amended and
Restated Agreement, and it is expected that such Shares will be purchased
through a capital contribution by AIM (i) to a Delaware limited liability
company to be organized by JANA to hold Shares (the "JANA SPV") and (ii) to
CT-100. Each purchaser of Shares under the Amended and Restated Agreement
further agreed not to sell such Shares (or in the case of Velocity, any Shares
acquired under the Option Agreement) until the earliest of (i) the disposition
of all Shares owned by JANA (provided that if JANA sells less than all of the
Shares owned by it, CT-100, Gardi and Velocity, respectively, may sell a pro
rata portion of any Shares owned by them), (ii) the commencement of the Issuer's
next annual meeting of shareholders, and (iii) the date that JANA notifies any
other party that it has ceased to pursue any proposals to the Issuer regarding
the conduct of its business. In addition, the Amended and Restated Agreement
provides that all public statements, regulatory filings, contacts with
management and related activities related to the Issuer will be made and
conducted by JANA, following reasonable consultation with CT-100, AIM and,
should it acquire Shares, Velocity, and further provides that the Profit
Participation and all reasonable third party expenses related to any proxy
contest shall be shared by JANA, CT-100 and should it acquire Shares, Velocity,
pro rata to their investment in Shares. This description of the Amended and
Restated Agreement is a summary only and is qualified by reference to the
Amended and Restated Agreement, a copy of which is filed as Exhibit 4 to this
Schedule 13D and is incorporated herein by reference.
JANA and Velocity have entered into the Option Agreement, giving
Velocity the option to purchase from JANA up to 1,000,000 Shares at $10.00 per
Share for six months beginning December 21, 2007. This description of the Option
Agreement is a summary only and is qualified by reference to the Option
Agreement, a copy of which is filed as Exhibit 5 to this Schedule 13D and is
incorporated herein by reference.
Pursuant to an Agreement, dated January 4, 2008 (the "Sandell Group
Agreement"), between JANA and Sandell Asset Management Corp. ("Sandell"),
Sandell agreed not to sell any Shares purchased by funds, accounts or other
affiliated entities ("Sandell Funds") until the earliest of (i) the disposition
of all Shares owned by JANA (provided that if JANA sells less than all of the
Shares owned by it, Sandell Funds may sell a pro rata portion of any Shares
owned by them), (ii) the commencement of the Issuer's next annual meeting of
shareholders and (iii) the date that JANA notifies Sandell that it has ceased to
pursue any proposals to the Issuer regarding the conduct of its business. In
addition, the Sandell Group Agreement provides that all public statements,
regulatory filings, contacts with management and related activities related to
the Issuer will be made and conducted by JANA, following reasonable consultation
with Sandell and the parties to the Amended and Restated Agreement, and further
provides that Sandell shall reimburse the parties to the Amended and Restated
Agreement for its pro rata share of (i) the Profit Participation and (ii) all
reasonable third party expenses related to any proxy contest. This description
of the Sandell Group Agreement is a summary only and is qualified by reference
to the Sandell Group Agreement, a copy of which is filed as Exhibit 6 to this
Schedule 13D and is incorporated herein by reference. Sandell owns no Shares.
When and if it purchases Shares, it may be deemed to be a group member with the
other Reporting Persons hereunder.
Miller, Genachowski, Studenmund and Weinstein have each entered into a
Nominee Agreement with JANA and CT-100 pursuant to which each is entitled to
receive certain specified compensation in the event that he or she is elected or
appointed and serves as a director of the Issuer, and in the event he or she
serves as a nominee but is not elected or appointed. This description is a
summary only and is qualified by reference to the individual Nominee Agreements,
copies of which are filed as Exhibits 7-10 to this Schedule 13D and are
incorporated herein by reference.
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 12 OF 16 PAGES
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JANA currently has contractual agreements with three credit
counterparties: Jefferies & Company, Inc., Lehman Brothers Inc. and UBS AG, with
regard to cash-settled equity swaps (the "JANA Swaps") that reference Shares.
The JANA Swaps constitute economic exposure to approximately 12,530,048 Shares,
or 8.2% of the Shares outstanding. The JANA Swaps have reference prices ranging
from $7.29 to $8.07 and expiration dates ranging from October 2008 to December
2010. These contracts do not give JANA direct or indirect voting, investment or
dispositive control over any securities of the Issuer and do not require the
counterparties thereto to acquire, hold, vote or dispose of any securities of
the Issuer. Accordingly, JANA disclaims any beneficial ownership in securities
that may be referenced in such contracts or that may be held from time to time
by any counterparties to the contracts.
In addition to the agreements referenced above, the Reporting Persons
from time to time, may enter into and dispose of additional cash-settled equity
swap or other similar derivative transactions with one or more counterparties
that are based upon the value of the Shares, which transactions may be
significant in amount. The profit, loss and/or return on such additional
contracts may be wholly or partially dependent on the market value of the
Shares, the relative value of the Shares in comparison to one or more other
financial instruments, indexes or securities, a basket or group of securities in
which the Shares may be included, or a combination of any of the foregoing.
The Reporting Persons have entered into a Joint Filing Agreement, dated
as of January 7, 2007 (the "Joint Filing Agreement"), a copy of which is
attached hereto as Exhibit 11. The Reporting Persons have filed this statement
jointly pursuant to the Joint Filing Agreement in view of the Amended and
Restated Agreement and the Option Agreement.
Except as described herein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 hereof and between such persons and any person with respect to any
securities of the Issuer, including but not limited to transfer or voting of any
other securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, divisions of profits or loss, or the
giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Letter, dated December 26, 2007, from JANA to the Issuer.
Exhibit 2 Complaint, dated January 7, 2008.
Exhibit 3 Press Release, dated January 7, 2008.
Exhibit 4 Amended and Restated Agreement, dated December 23, 2007,
among JANA, CT-100, AIM, Gardi and Velocity.
Exhibit 5 Option Agreement, dated December 21, 2007, between Velocity and
JANA.
Exhibit 6 Sandell Group Agreement, dated January 4, 2008, between JANA and
Sandell.
Exhibit 7 Nominee Agreement with J. Miller.
Exhibit 8 Nominee Agreement with J. Genachowski.
Exhibit 9 Nominee Agreement with J. Studenmund.
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 13 OF 16 PAGES
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Exhibit 10 Nominee Agreement with B. Weinstein.
Exhibit 11 Joint Filing Agreement, dated January 7, 2008.
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 14 OF 16 PAGES
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 7, 2008
JANA PARTNERS LLC
BY: /S/BARRY ROSENSTEIN
---------------------------
Name: Barry Rosenstein
Title: Managing Partner
BY: /S/GARY CLAAR
---------------------------
Name: Gary Claar
Title: General Partner
SPARK MANAGEMENT PARTNERS, L.L.C.
BY: /S/SANTO POLITI
---------------------------
Name: Santo Politi
Title: Managing Member
VELOCITY INTERACTIVE MANAGEMENT,
LLC
BY: /S/JONATHAN MILLER
---------------------------
Name: Jonathan Miller
Title: Authorized Signatory
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 15 OF 16 PAGES
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ALEX INTERACTIVE MEDIA, LLC
BY: /S/PAUL GARDI
---------------------------
Name: Paul Gardi
Title: Managing Member
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CUSIP NO. 12613R104 SCHEDULE 13D PAGE 16 OF 16 PAGES
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APPENDIX A
TRANSACTIONS IN THE SHARES EFFECTED BY THE
REPORTING PERSONS DURING THE PAST SIXTY DAYS
(UNLESS OTHERWISE STATED, ALL TRANSACTIONS WERE EFFECTED IN
THE OPEN MARKET)
JANA
Date of Trade Shares Purchased (Sold) Price per Share
------------- ----------------------- ---------------
12/26/2007 250,000 $8.88
12/27/2007 1,000,000 $8.90
12/28/2007 1,000,000 $9.06
12/31/2007 27,760 $9.16
12/31/2007 559,587 $9.09
1/2/2008 213,000 $8.90
1/2/2008 170,183 $9.01
1/3/2008 480,640 $8.72
1/4/2008 100,000 $8.61
1/4/2008 97,800 $8.49
1/4/2008 971,203 $8.56