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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
UNDER
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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HOTJOBS.COM, LTD.
(Name of Subject Company)
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HOTJOBS.COM, LTD.
(Name of Person Filing Statement)
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COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
441474103
(CUSIP Number of Class of Securities)
DIMITRI J. BOYLAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
HOTJOBS.COM, LTD.
406 WEST 31ST STREET, 9TH FLOOR
NEW YORK, NEW YORK 10001
(212) 699-5300
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications On Behalf of the Person Filing Statement)
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WITH A COPY TO:
ANDREW R. BROWNSTEIN, ESQ.
MITCHELL S. PRESSER, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION.
The name of the subject company is HotJobs.com, Ltd., a Delaware corporation
(the "COMPANY" or "HOTJOBS"). The address of the principal executive offices of
the Company is 406 West 31st Street, 9th Floor, New York, New York 10001. The
telephone number of the Company at its principal executive offices is
(212) 699-5300.
The title of the class of equity securities to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (together with the
Exhibits and Annexes hereto, this "STATEMENT") relates is the Common Stock, par
value $0.01 per share, of the Company (the "COMMON STOCK"). As of January 8,
2002, there were 38,783,835 shares of Common Stock outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
The filing person is the subject company. The Company's name, business
address and business telephone number are set forth in Item 1 above.
This Statement relates to the offer by HJ Acquisition Corp. (the
"PURCHASER"), a Delaware corporation and a wholly-owned subsidiary of
Yahoo! Inc., a Delaware corporation ("YAHOO!"), to exchange for each issued and
outstanding share of Common Stock (each, a "SHARE"), (a) a fraction of a share
of Yahoo! common stock, par value $0.001, (the "YAHOO! COMMON STOCK"), equal to
the Exchange Ratio (as defined below), subject to the limitation described
below, (the "PER SHARE STOCK CONSIDERATION") upon the terms and subject to the
conditions set forth in the prospectus relating to the exchange offer, dated
January 11, 2002 (the "PROSPECTUS"), and in the related Letter of Transmittal
(the "LETTER OF TRANSMITTAL" which, together with the Prospectus, as amended or
supplemented from time to time, constitute the "OFFER") and (b) cash in an
amount equal to $10.50 minus an amount equal to the product of (x) the Exchange
Ratio multiplied by (y) the Yahoo! Market Price (as defined below), without
interest (the "PER SHARE CASH CONSIDERATION" and together with the Per Share
Stock Consideration, the "EXCHANGE OFFER CONSIDERATION"). The Offer is described
in a Tender Offer Statement on Schedule TO (as amended or supplemented from time
to time, the "SCHEDULE TO"), filed by Yahoo! and the Purchaser with the
Securities and Exchange Commission on January 11, 2002.
For purposes of the Offer and this Statement, the "Exchange Ratio" means the
result obtained by dividing $5.25 by the Yahoo! Market Price; provided that if
the number of shares of Yahoo! Common Stock otherwise issuable as part of the
Exchange Offer Consideration (assuming valid tender and no withdrawal of
39,500,000 Shares) would otherwise exceed 15,000,000, then the Exchange Ratio
will be reduced to 0.3797. For purposes of the Offer and this Statement, the
"YAHOO! MARKET PRICE" means the average of the daily volume-weighted average
prices (rounded to four decimal points) of the Yahoo! Common Stock, as reported
by Bloomberg, L.P., during each trading day in the period of ten consecutive
trading days ending on and including the second trading day immediately
preceding and excluding the date that is 20 "business days" after commencement
of the Offer or, if applicable, the latest extension of the offer expiration
date. A "business day" means any day other than a Saturday, Sunday or federal
holiday and consists of the time period from 12:01 a.m. through 12:00 midnight,
New York City time.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of December 27, 2001, among Yahoo!, the Purchaser and the Company (the
"MERGER AGREEMENT"). The Merger Agreement provides that, subject to the
satisfaction or waiver of certain conditions, as soon as practicable after the
completion of the Offer, and in accordance with the Delaware General Corporation
Law (the "DGCL"), either the Company will be merged with and into
HJ Acquisition Corp. with HJ Acquisition Corp. surviving the Merger as a
wholly-owned subsidiary of Yahoo! or HJ Acquisition Corp. will be merged with
and into the Company with the Company surviving the merger as a wholly-owned
subsidiary of Yahoo! (in either case, the "MERGER"). Under some circumstances,
Yahoo! has the right to effect this Offer and/or the Merger using another direct
or
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indirect subsidiary of Yahoo! in place of HJ Acquisition Corp. If Yahoo!
exercises this right, then appropriate references in this document to
HJ Acquisition Corp. shall be deemed to refer to this other subsidiary.
HJ Acquisition Corp. or HotJobs, as the case may be, as the surviving
corporation of the Merger is sometimes referred to in this document as the
"SURVIVING CORPORATION." At the effective time of the Merger (the "EFFECTIVE
TIME"), each issued and outstanding Share (other than Shares owned by Yahoo!,
any of its subsidiaries (including the Purchaser), the Company (as treasury
stock) or its subsidiaries, and Shares held by stockholders who properly demand
appraisal and comply with the provisions of Section 262 of the DGCL relating to
dissenters' rights of appraisal) will be converted into the right to receive the
same consideration per Share that is paid in the Offer (the "MERGER
CONSIDERATION"). The Merger Consideration and the Exchange Offer Consideration
are sometimes referred to in this Statement collectively as the "Consideration."
The Merger Agreement is summarized in the Prospectus, which is filed as
Exhibit (a)(1) to this Statement and which is being mailed to stockholders
together with this Statement.
The Prospectus states that the principal executive offices of Yahoo! and the
Purchaser are located at Yahoo! Inc., 701 First Avenue, Sunnyvale, California
94089.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Certain contracts, agreements, arrangements or understandings between the
Company or its affiliates and certain of its directors and executive officers
are, except as noted below, described in the Information Statement (the
"INFORMATION STATEMENT") pursuant to Rule 14f-1 under the Securities Exchange
Act of 1934 that is attached as Annex B to this Statement and is incorporated
herein by reference. Except as described in this Statement (including in the
Exhibits hereto and in Annex B hereto) or incorporated herein by reference, to
the knowledge of the Company, as of the date of this Statement there exists no
material agreement, arrangement or understanding or any actual or potential
conflict of interest between the Company or its affiliates and (1) the Company's
executive officers, directors or affiliates or (2) the Purchaser, Yahoo! or
their respective executive officers, directors or affiliates.
THE MERGER AGREEMENT. The summary of the Merger Agreement and the
description of the conditions of the Offer contained in the Prospectus, which is
filed as Exhibit (a)(1) to this Statement and which is being mailed to
stockholders together with this Statement, are incorporated herein by reference.
Such summary and description are qualified in their entirety by reference to the
Merger Agreement, which has been filed as Exhibit (e)(1) hereto and is
incorporated herein by reference.
THE STOCKHOLDER AGREEMENT. The summary of the Stockholder Agreement between
Yahoo! and Richard S. Johnson, dated as of December 27, 2001 (the "STOCKHOLDER
AGREEMENT"), contained in the Prospectus, which is filed as Exhibit (a)(1) to
this Statement and which is being mailed to stockholders together with this
Statement, is incorporated herein by reference. Such summary is qualified in its
entirety by reference to the Stockholder Agreement, which has been filed as
Exhibit (e)(2) hereto and is incorporated herein by reference.
EFFECTS OF THE OFFER AND THE MERGER UNDER COMPANY STOCK PLANS AND AGREEMENTS
BETWEEN THE COMPANY AND ITS EXECUTIVE OFFICERS.
INTERESTS OF CERTAIN PERSONS. Certain members of the Company's management
and the Board of Directors of the Company (the "BOARD" or the "BOARD OF
DIRECTORS") may be deemed to have interests in the transactions contemplated by
the Merger Agreement that are different from or in addition to their interests
as Company stockholders generally. The Board was aware of these interests and
considered them, among other matters, in approving the Merger Agreement and the
transactions contemplated thereby. As described below, consummation of the Offer
will constitute a change in
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control of the Company for the purposes of determining the entitlements due to
the executive officers and directors of the Company to certain severance and
other benefits.
STOCK OPTIONS. The summary of the treatment of stock options under the
Merger Agreement contained in the Prospectus, which is filed as Exhibit (a)(1)
to this Statement and which is being mailed to stockholders together with this
Statement, is incorporated herein by reference. Such summary is qualified in its
entirety by reference to the Merger Agreement, which has been filed as
Exhibit (e)(1) hereto and is incorporated herein by reference. Certain of the
option agreements evidencing stock options held by non-employee directors and
certain executive officers and employees of the Company provide for accelerated
vesting of such stock options upon a change in control of the Company or certain
terminations of employment following a change in control of the Company. The
consummation of the Offer would constitute such a change in control. Assuming
the Offer is completed on February 8, 2002, the aggregate unvested HotJobs stock
options held by the non-employee directors and executive officers with
employment agreements identified below that may become fully vested and
exercisable is 521,667.
EMPLOYMENT AGREEMENTS. Employment agreements that contain severance
provisions are in effect between HotJobs and each of Dimitri Boylan and Lowell
Robinson. The employment agreements for each of Messrs. Boylan and Robinson
provide that upon a termination of the executive's employment in connection with
a change in control, including the Merger, the executive will be entitled to
receive severance equal to one year's base salary (or if greater, his base
salary for the remainder of the term which expires on May 5, 2003) in the case
of Mr. Boylan, and two year's base salary in the case of Mr. Robinson. In
addition, upon a termination of employment entitling the individual to severance
in connection with a change in control, the HotJobs stock options held by each
of Messrs. Boylan and Robinson will accelerate and become immediately
exercisable for the remainder of their original term. The employment agreement
with each of Messrs. Boylan and Robinson provides that the executive is entitled
to receive a payment in an amount sufficient to make the executive whole for any
excise tax on excess parachute payments, under the severance agreements or
otherwise, imposed under Section 4999 of the Internal Revenue Code.
At this time, it is not known whether any of these executive officers'
employment with the surviving corporation will terminate under circumstances
entitling the executive to severance. If cash severance payments are made to
these executive officers at the completion of the Merger, assuming the Merger is
completed on February 8, 2002, the pre-tax amount of the payments is estimated
to be approximately $406,250 for Mr. Boylan and $500,000 for Mr. Robinson under
the terms of their current employment agreements. Assuming that the Offer is
completed on February 8, 2002, the aggregate number of unvested HotJobs stock
options held by each of Messrs. Boylan and Robinson that will become fully
vested and exercisable upon a qualifying termination in connection with the
Merger is 196,875 and 223,125, respectively.
EMPLOYEES. The summary of the employee arrangements under the Merger
Agreement contained in the Prospectus, which is filed as Exhibit (a)(1) to this
Statement and which is being mailed to stockholders together with this
Statement, are incorporated herein by reference. Such summary is qualified in
its entirety by reference to the Merger Agreement, which has been filed as
Exhibit (e)(1) hereto and is incorporated herein by reference.
INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. The Merger Agreement
provides that Yahoo! and the surviving corporation will indemnify the present
and former directors and officers of HotJobs to the fullest extent permitted by
law against any liabilities or expenses incurred in connection with any claim or
proceeding arising out of matters existing or occurring at or prior to the
consummation of the Merger. The Merger Agreement further provides that, for a
period of six years following the consummation of the Merger, Yahoo! will cause
the surviving corporation to maintain a policy of officers' and directors'
liability insurance for acts and omissions occurring on or prior to the
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consummation of the Merger on terms substantially no less advantageous than
HotJobs' policy in effect on December 27, 2001, provided that Yahoo! will not be
required to pay annual premiums in excess of 200% of the annual premium paid by
HotJobs to procure such insurance.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) RECOMMENDATION OF THE BOARD.
The Board, at a meeting held on December 23, 2001, by a unanimous vote of
those directors present and voting (with John G. Murray recusing himself in
light of his employment relationship with Deutsche Bank, a financial advisor to
TMP Worldwide Inc. ("TMP") and Robert H. McNabb recusing himself in light of his
employment relationship with Korn/Ferry International Futurestep, Inc.) approved
the Offer, the Merger, the Merger Agreement and the transactions contemplated
thereby, determined that the terms of the Offer and the Merger are in the best
interests of the stockholders of the Company, recommended that the stockholders
of the Company accept the Offer and tender their Shares to the Purchaser
pursuant to the Offer and determined that the Merger Agreement is advisable and
recommended that the stockholders of the Company adopt the Merger Agreement, to
the extent such adoption is required by applicable law.
(b) (i) BACKGROUND OF THE OFFER; CONTACTS WITH YAHOO!
During the past few years the Company has grown rapidly into a leading
provider of comprehensive online recruiting solutions for employers, staffing
firms and job seekers. During that time, representatives of the Company were
approached by various parties regarding strategic combinations and other
transactions and contractual relationships. Between November 2000 and
February 2001, the Company and Yahoo! engaged in discussions regarding a
commercial relationship. However, the parties were unable to reach a mutually
acceptable transaction.
In late May 2001, Richard S. Johnson, Non-Executive Chairman and former
President and Chief Executive Officer of the Company, and Dimitri J. Boylan,
Chief Operating Officer and Secretary and, at that time, acting President and
Chief Executive Officer of the Company, were approached by Andrew J. McKelvey,
Chairman and Chief Executive Officer of TMP regarding a possible acquisition of
the Company by TMP. Mr. McKelvey emphasized TMP's desire to achieve
pooling-of-interests accounting treatment, which because of a change in
Generally Accepted Accounting Principles resulted in the requirement that a deal
be announced by the end of June 2001 in order to achieve such treatment.
On June 7, 2001, the Board met and discussed the possibility that the
Company's prospects might be enhanced by exploring strategic alternatives with
regard to the Company and determined to retain investment bankers and lawyers to
assist in this effort. The Board decided to retain Lazard Freres & Co. LLC
("LAZARD") as its investment banker in connection with the exploration of
strategic alternatives. The Company also retained Wachtell, Lipton, Rosen & Katz
as its outside legal counsel with respect to its exploration of strategic
alternatives. The Board asked Lazard to conduct a dual process--to explore a
possible transaction with TMP on an expedited timetable in order, among other
things, to be able to satisfy their desire for pooling-of-interests accounting
treatment, but at the same time, to solicit interest from other potential
partners. Lazard identified a number of potential strategic partners for the
Company, and beginning June 13th, Lazard began contacting these companies,
including Yahoo!, to explore their interest in pursuing a combination with the
Company.
Throughout June 2001, Mr. Johnson, Mr. Boylan and representatives of Lazard
met with Mr. McKelvey and representatives and advisors of TMP to discuss
proposed terms, including pricing and conditions for a possible transaction
between TMP and the Company.
At a Board meeting held June 23rd, representatives from Lazard informed the
Board that while a number of companies had expressed interest in exploring a
transaction with the Company and Lazard was pursuing contacts with these
companies, none had indicated any inclination to make a preemptive
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offer. Lazard reviewed these potential purchasers and the status of their
expressions of interest with the Board. Lazard noted, among other things, that
TMP had been far more aggressive and expressed a stronger interest in a
transaction with the Company than any of the other potential parties and there
was no assurance that any of these parties would make an offer as attractive as
the transaction being negotiated with TMP.
On June 25th, TMP's outside legal counsel sent a draft merger agreement to
the Company's outside legal counsel. The Company and TMP and their respective
outside legal counsels began negotiating the agreement on June 26th, centered
primarily on issues regarding certainty of closing and assuring that the Company
would be able to consider alternative acquisition proposals from other parties
if subsequently proposed.
Negotiations between the parties and their respective advisors continued
until June 29th, when the terms of the transaction were finalized and the
Company and TMP jointly announced that TMP, Tower Acquisition Corp., a
wholly-owned subsidiary of TMP and the Company, had entered into an agreement
and plan of merger (the "TMP AGREEMENT") dated June 29, 2001, pursuant to which
TMP would acquire the outstanding Shares in a transaction whereby each Share
would be converted into the right to receive 0.2195 shares of TMP common stock,
par value $0.001, fixed. The TMP Agreement permitted the Company to consider
alternative acquisition proposals from third parties under certain
circumstances.
After signing the TMP Agreement, TMP and the Company began taking steps to
obtain the necessary approvals to complete the transaction. On August 13th, TMP
and the Company each received a Request for Additional Information and
Documentary Materials (a "SECOND REQUEST") from the FTC. In mid-November, at the
FTC's request, TMP sent the FTC a letter committing not to close the transaction
prior to January 12, 2002. Both TMP and the Company submitted their certificates
of substantial compliance with the Second Request by November 26th.
On December 12th, Terry Semel, CEO of Yahoo!, called Mr. Boylan to inform
Mr. Boylan that Yahoo! intended to make an unsolicited offer for the Company and
that Yahoo! would be issuing a related press release. Mr. Semel sent the
following letter to Mr. Boylan:
December 12, 2001
Dimitri Boylan
Chief Executive Officer
HotJobs.com Ltd.
Dear Mr. Boylan:
On behalf of Yahoo!, I am pleased to submit the enclosed offer to acquire
HotJobs. We are extremely impressed with the business you and your management
team have developed. We are particularly excited about how HotJobs complements
our businesses and our strategies for future growth by establishing deeper
relationships and delivering greater value for our consumers and business
partners in vertical markets.
We see recruitment as a valuable part of Yahoo!'s future growth
strategy--it's been one of the fastest industries to migrate online and is
poised to grow substantially over the next few years. We believe that the
combination of HotJobs and Yahoo! will create powerful new force in the
recruitment marketplace.
Yahoo! is well positioned to help HotJobs capitalize on the future
opportunities in this market and to provide an exciting platform upon which
HotJobs's management and employees can build. Yahoo!'s broad reach,
distribution, and desire to commit significant resources to this opportunity,
together with HotJobs's experienced management team, large consumer base,
diversified customer base and well-trained sales force, would create a winning
combination.
In short, the combination we propose is a logical next step for the
shareholders, customers and employees of both of our companies.
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We believe a transaction between HotJobs and Yahoo! would provide
demonstrably superior value to your shareholders compared with the transaction
with TMP. We also believe that the combination of Yahoo! and HotJobs represents
a uniquely attractive opportunity to your management team and employees. To that
end, Yahoo! proposes, to acquire all outstanding HotJobs common stock at a fixed
price of $10.50 per share of consideration consisting of equal parts cash and
stock. The proposed price represents a 23% premium over the average implied
price of the TMP transaction over the last 30 trading days, and a 6% premium
over the implied price today (based on TMP's closing price on December 12,
2001).
To effect the transaction, we would commence an exchange offer for all of
HotJobs's outstanding common stock followed by a merger at the same per share
price. Yahoo! would use its currently existing cash balances to finance the cash
portion of the consideration. We expect that the transaction could be
consummated within six to eight weeks of the execution of definitive transaction
documentation. Because the cash portion of the transaction would be financed
entirely through Yahoo!'s existing cash reserves, our offer would not be subject
to any financing contingency. We are prepared to begin discussions with you as
early as tomorrow.
Our proposal is clearly superior for your shareholders to the proposed
transaction involving TMP for the following reasons:
- Our proposal provides higher absolute value for each HotJobs share
- Our proposal provides value certainty
- Our proposal provides immediate liquidity
- Our proposal is not subject to significant regulatory risk
Additionally, paying equal parts cash and stock should permit the
transaction to be treated as a tax-free reorganization in most circumstances,
thereby providing tax-deferred treatment for the stock portion of the
consideration. As is customary, our proposal is subject to completion of a
brief, confirmatory due diligence review, the negotiation of definitive merger
documentation, and the termination of your merger agreement with TMP, in
accordance with its terms.
As you know, it is necessary to communicate our proposal in this manner
(i.e. in letter form) because of the "no shop" provisions of your merger
agreement with TMP. However, we prefer to work collaboratively with you and your
Board of Directors to complete a negotiated transaction that helps HotJobs
realize the full potential of its franchise. We believe that time is of the
essence, and are prepared to move forward expeditiously by committing all
necessary resources to promptly complete a transaction. We have engaged Goldman,
Sachs & Co. and Skadden, Arps, Slate, Meagher & Flom LLP to advise us in this
transaction. We and our advisors are ready to meet with you and your advisors to
discuss all aspects of our offer, and to answer any questions you or they may
have about our offer. Although we have already completed a thorough due
diligence review based solely on publicly available information, we would like
to commence confirmatory due diligence as soon as possible and are ready to
begin tomorrow. We are also prepared to enter into a customary and reasonable
confidentiality agreement no less favorable to HotJobs than the one between
HotJobs and TMP.
The Board of Yahoo! has unanimously approved this proposal, and has
unanimously authorized us to proceed. We aim to promptly conclude a transaction
that is enthusiastically supported by you and your Board of Directors,
shareholders and employees. We look forward to hearing from you.
Sincerely,
YAHOO! CEO
/s/ Terry Semel
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After receiving the Yahoo! letter, Mr. Boylan called Mr. McKelvey to make
him aware of the Yahoo! proposal. A copy of this letter was subsequently issued
with separate press releases by Yahoo! and the Company.
That evening, the Board of Directors held a telephonic meeting with the
participation of its outside legal advisors and investment bankers to discuss
the initial terms of the Yahoo! proposal. After discussion and hearing the
advice of its legal advisors and investment bankers, the Board concluded that
there was a reasonable likelihood that the Yahoo! proposal could constitute a
"Superior Proposal," as defined in the TMP Agreement. At that time, the Board
approved discussions and negotiations with, and the provision of information to,
Yahoo! on the basis permitted by the TMP Agreement. The Company notified TMP of
the Board's determination and provided TMP with a copy of the Yahoo! letter.
That evening, TMP issued a press release reaffirming its commitment to its
planned acquisition of the Company.
On December 13th, Yahoo! executed a confidentiality agreement with the
Company to facilitate the exchange of information between the companies. On
December 14th, representatives of Yahoo! met with representatives of the Company
to commence a legal due diligence review of the Company.
On December 15th, Skadden, Arps, Slate, Meagher & Flom LLP, Yahoo!'s outside
legal counsel, sent a draft merger agreement to the Company's outside legal
counsel. The Company and Yahoo! and their respective outside legal counsels
began negotiating the agreement on December 16th and negotiations continued
until December 23rd, centered primarily on issues regarding certainty of closing
and assuring that the Company would be able to consider alternative acquisition
proposals from other parties if subsequently proposed. The proposed agreement
also required voting agreements from certain significant stockholders of the
Company.
On December 16th and 17th, representatives of Yahoo! met with
representatives of the Company to conduct business due diligence. At these
meetings, there were discussions regarding the Company's business, financial
condition and prospects and the potential synergistic effects of a combination
between the Company and Yahoo!. The Company's management and its legal advisors
and investment bankers updated the Board regarding these meetings and the
progress of negotiations during a conference call held on December 18th.
On December 19th and December 20th, representatives of the Company again met
with representatives of Yahoo! to conduct additional due diligence. On
December 19th, the Company executed a confidentiality agreement with Yahoo! with
respect to information that Yahoo! would supply to the Company regarding Yahoo!.
After those meetings and until December 23rd, representatives of the Company
continued to discuss the terms of the proposed transaction with representatives
of Yahoo!.
Throughout this period, TMP and its advisors conducted further due diligence
with respect to the Company. The Company promptly kept TMP reasonably informed
of the status and terms of the discussions and negotiations with Yahoo! and
delivered to TMP the information delivered to Yahoo! to the extent not
previously provided to TMP.
On Sunday, December 23rd, Yahoo! submitted a definitive proposal to the
Company and its advisors with a merger agreement, disclosure memoranda and
related documents, in each case in the form finally executed by the Company and
Yahoo!. Yahoo! stated that its proposal would expire if not accepted by the
Company by noon, New York City time on Thursday, December 27th.
On the evening of Sunday, December 23rd, the Board met telephonically to
consider whether the negotiated proposed agreements with Yahoo! constituted a
"Superior Proposal," as that term was defined in the TMP Agreement. The
Company's investment bankers and legal advisors described the Yahoo! proposal.
The Company's investment bankers noted that based on the closing price of a
share of TMP's common stock on Friday, December 21st, the value of the
consideration as of December 21st
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proposed to be paid by TMP under the TMP Agreement was $9.02. The Company's
investment bankers also noted that the consideration to be paid pursuant to the
Yahoo! proposal was greater than the historical implied value of the
consideration to be paid to the stockholders of the Company pursuant to the TMP
Agreement for much of the period following the announcement of the TMP
Agreement. The investment bankers and legal advisors also discussed the
differences between the merger agreement with TMP and the Yahoo! proposal,
noting, among other things, that Yahoo! had agreed to certain provisions
(including a breakup fee of $30 million if the transaction could not be
consummated due to a failure to obtain antitrust clearance or the existence of a
court order barring closing) more favorable to the Company than comparable
provisions in the TMP Agreement. The Company's legal advisors also noted that a
transaction with Yahoo! was most likely to present significantly fewer potential
antitrust issues. After receiving advice from the Company's investment bankers
and legal advisors, including Lazard's oral opinion (which was subsequently
confirmed in a written opinion dated as of December 27th) to the effect that, as
of the date thereof, the Consideration to be received by the holders of Shares
pursuant to the proposed Offer and Merger with Yahoo! was fair from a financial
point of view to such holders, the Board unanimously, by those present at the
meeting, determined that the Yahoo! proposal was a "Superior Proposal" as
defined in the TMP Agreement and the Board determined, subject to the
seventy-two hour waiting period required by the TMP Agreement, to terminate the
TMP Agreement and to pay to TMP the $15 million termination fee and the
$2 million expense reimbursement, if TMP did not prior to such time make an
offer that the Board concluded was as favorable to the Company's stockholders as
Yahoo!'s proposal. The Board unanimously, by those present at the meeting,
subject to the foregoing, determined that the terms of the proposed Offer and
Merger were fair to and in the best interests of the Company's stockholders,
approved the Merger Agreement with Yahoo! and the transactions contemplated
thereby, including the Offer and the Merger, determined that the Merger
Agreement with Yahoo! was advisable and determined to recommend that the
Company's stockholders accept Yahoo!'s Offer and tender their Shares in the
Offer.
Pursuant to the terms of the TMP Agreement, the Company gave TMP and its
legal advisors written notice and issued a press release stating that it had
received a "Superior Proposal" and that the Company intended, subject to TMP's
right to make an offer to the Company as favorable to the Company's stockholders
as the Yahoo! proposal, to enter into a binding written agreement with respect
thereto, and delivered to TMP and its legal advisors copies of the Yahoo!
proposal, including the negotiated proposed agreements with Yahoo!.
During the morning of December 27th, TMP notified the Company and its legal
advisors that it would not be revising the TMP Agreement. TMP issued a press
release indicating that it would not modify its offer for the Company and
stating that it believed it had "already offered HotJobs full and fair value for
the company, and that it would not be in the best interests of TMP shareholders
to adjust its current offer." Later that morning, the Board met telephonically
to consider this development. The Company then terminated the TMP Agreement,
paid the $15 million break-up fee and $2 million of documented expenses to TMP
and entered into the Merger Agreement. Concurrently with the execution of the
Merger Agreement, the Stockholder Agreement was also executed by Mr. Johnson.
The Company and Yahoo! issued a joint press release announcing the execution of
these agreements.
(ii) REASONS FOR THE RECOMMENDATION OF THE BOARD OF DIRECTORS.
In reaching its recommendations described above in this Item 4, the Board
consulted with the Company's management and its investment bankers and legal
advisors, and considered a variety of factors, including the following:
- PREMIUM. The Board considered that based on the closing price of a share
of TMP's common stock on Friday, December 21st (the last trading day
before the Board evaluated the Yahoo! proposal), the value of the
consideration as of December 21st proposed to be paid by TMP
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under the TMP Agreement was $9.02. Additionally, the Board reviewed the
consideration to be paid pursuant to the Yahoo! proposal compared to the
historical implied value of the consideration to be paid to the
stockholders of the Company pursuant to the TMP Agreement since the
announcement of the TMP Agreement. The Board also considered the
historical trading prices of HotJobs, Yahoo! and TMP common stock.
- CERTAINTY OF VALUE. The Board considered that the Consideration consisted
of cash and Yahoo! Common Stock having a fixed value of $10.50. The Board
determined that this consideration provided relative certainty of value to
the Company's stockholders in the context of recent volatility in the
market price of TMP common stock.
- FEWER REGULATORY CONCERNS. The Board had monitored the progress of the
FTC's review of the proposed transaction with TMP and was aware that the
FTC was continuing to closely evaluate the potential competitive impacts
of that transaction. The Company's legal advisors also noted that a
transaction with Yahoo! was most likely to present significantly fewer
potential antitrust issues. The Board also considered Yahoo!'s commitment
to pay the Company a breakup fee of $30 million at the time of termination
if the transaction could not be consummated due to a failure to obtain
antitrust clearance or the existence of a court order barring closing.
- OPPORTUNITY TO PARTICIPATE IN THE COMBINED COMPANY. The Board considered
its knowledge of Yahoo! and the possibility that the transaction would
allow the Company to continue to pursue its goal of being the premier
online recruiting solutions provider. The Board considered the fact that
the stock to be received in the Offer and the Merger would allow HotJobs
stockholders to participate in the growth and opportunities of the
combined company.
- ALTERNATIVES. The Board considered the terms of the transactions with TMP
and determined the Yahoo! proposal to be a Superior Proposal as defined in
the TMP Agreement. The Board also considered that, under circumstances
specified in the Yahoo! Agreement, the Company could conduct negotiations
with another party and terminate the Yahoo! Agreement if a "Superior
Proposal," as defined in the Yahoo! Agreement were made.
- TIMING OF TRANSACTION. The Board noted that the industry in general was
impacted by the general economic conditions and that there were a number
of uncertainties over the long-term. In determining that the Yahoo!
proposal constituted a "Superior Proposal" as defined in the TMP
Agreement, the Board determined that the Yahoo! proposal was reasonably
capable of being completed by March 31, 2002.
- TERMS OF MERGER AGREEMENT. The Board, with the assistance of counsel,
considered the general terms of the Merger Agreement, which it found to be
favorable. In addition, the Board considered the likelihood of
satisfaction of all conditions to the consummation of the merger. The
Board, with the assistance of counsel, considered in detail several
specific provisions of the merger agreement, including the following:
- MATERIAL ADVERSE EFFECTS. The Board considered the fact that the merger
agreement does not permit Yahoo! to refuse to consummate the
transaction due to, among other things, any change in the market price
or trading volume of HotJobs common stock, effects arising from or
relating to general business or economic conditions in the United
States (including prevailing interest rate and stock market levels),
effects arising from or relating to the general state of the industry
and market sectors in which the Company operates, and any loss of
existing HotJobs customers or employees, any reduction in business by,
or revenue from, existing HotJobs customers, or any reduction in
HotJobs job seekers, in each case resulting primarily from announcement
or termination of the transaction with TMP or resulting primarily from
the announcement of the Yahoo! transaction. The Board noted the
increased certainty of consummation due to this provision.
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- NO SOLICITATION; TERMINATION FEE. The Board reviewed the provisions of
the merger agreement that limit the Company's ability to solicit other
offers and the requirement that the Company pay Yahoo! a termination
fee of $15 million (plus up to $2 million for Yahoo!'s out-of-pocket
expenses) if the Yahoo! Agreement is terminated in particular
circumstances related to a superior proposal to acquire the Company or
to certain actions by the Board. While the Board recognized that this
provision would somewhat reduce the flexibility of the Company in
connection with proposals for alternative transactions, it concluded,
together with its advisors, that this provision was reasonable under
the circumstances.
- TAX CONSEQUENCES. The Board considered the fact that the Offer and the
Merger would be taxable for U.S. federal income tax purposes to the extent
of the Per Share Cash Consideration and that, in certain circumstances,
the Offer and the Merger would be fully taxable for U.S. federal income
tax purposes, in particular as a result of the decline in the value of
Yahoo! Common Stock.
- SYNERGIES. The Board reviewed the potential strategic and other benefits
of the Merger, including the complementary nature and related expansion of
various HotJobs and Yahoo! businesses and the opportunity for operational
cost savings. The Board believes that these cost savings are a potential
benefit that HotJobs stockholders may realize as stockholders of Yahoo!,
although no assurances can be given that any particular level of synergies
will be achieved.
- OPINION OF INVESTMENT BANKER. The Board considered the opinion of Lazard,
the Company's investment banker, that, as of the date of such opinion, and
based upon and subject to the factors and assumptions set forth in the
written opinion, the Consideration is fair to holders of HotJobs common
stock from a financial point of view.
The foregoing discussion of the information and factors considered by the
Board is not exhaustive but does include the material factors considered by the
Board. The Board did not quantify or assign any relative or specific weight to
the various factors that it considered. Rather, the Board based its
recommendation on the totality of the information presented to and considered by
it. In addition, individual members of the Board may have given different
weights to different factors.
In considering the recommendation of the Board to tender shares into the
Exchange Offer, HotJobs stockholders should be aware that certain officers and
directors of HotJobs have certain interests in the proposed merger, including
severance arrangements, that are different from and in addition to the interests
of HotJobs stockholders generally. One director of HotJobs, John G. Murray,
recused himself from discussions regarding the Offer and the Merger due to the
fact that he is a Managing Director of Deutsche Banc Alex. Brown, which acted as
investment banker to TMP in connection with the transactions contemplated by the
TMP Agreement. Additionally, Robert H. McNabb, recused himself from discussions
regarding the Offer and the Merger due to the fact that he had accepted an
executive position with Korn/Ferry International Futurestep, Inc. The Board also
noted that Mr. Johnson would be executing the Stockholder Agreement (in his
capacity as a stockholder) in connection with the Merger Agreement. The Board
was aware of these interests and considered them in approving the Merger
Agreement, the Offer and the Merger.
The foregoing includes the material factors considered by the Board. In view
of its many considerations, the Board of Directors did not find it practical to,
and did not, quantify or otherwise assign relative weights to the various
individual factors considered. In addition, individual members of the Board may
have given different weights to the various factors considered. After weighing
all of these considerations, the Board determined to approve the Merger
Agreement and recommend that holders of Shares tender their Shares in the Offer.
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(iii) OPINION OF THE COMPANY'S INVESTMENT BANKER.
Under a letter agreement, dated June 11, 2001, the Company retained Lazard
to act as its investment banker. As part of this engagement, on December 23,
2001, Lazard delivered to the Board its oral opinion that, as of that date, the
Consideration to be received by the holders of the Common Stock in the Offer and
the Merger was fair from a financial point of view to such holders. Lazard
subsequently confirmed its oral opinion by delivering a written opinion dated
December 27, 2001, that, as of such date and based on and subject to the matters
described in the written opinion, the Consideration to be received by the
holders of the Common Stock in the Offer and the Merger was fair from a
financial point of view to such holders. In addition, on June 28, 2001, Lazard
had delivered to the Board its oral opinion, subsequently confirmed in a written
opinion dated June 29, 2001, that, as of such dates and based on and subject to
the matters described in the written opinion dated June 29, 2001, the exchange
ratio to be offered to the holders of the Common Stock in the proposed merger
pursuant to the TMP Agreement was fair from a financial point of view to such
holders. Subsequently, the Board requested that Lazard evaluate the fairness,
from a financial point of view, to the holders of the Common Stock of the
Consideration to be received by such holders in the Offer and the Merger.
THE FULL TEXT OF THE WRITTEN OPINION OF LAZARD DATED DECEMBER 27, 2001 IS
ATTACHED AS ANNEX A TO THIS STATEMENT AND IS INCORPORATED HEREIN BY REFERENCE.
LAZARD'S WRITTEN OPINION DESCRIBES THE PROCEDURES FOLLOWED, ASSUMPTIONS MADE,
MATTERS CONSIDERED AND QUALIFICATIONS AND LIMITATIONS ON THE REVIEW UNDERTAKEN
BY LAZARD IN CONNECTION WITH ITS OPINION. HOTJOBS STOCKHOLDERS ARE URGED TO READ
THE LAZARD OPINION IN ITS ENTIRETY. LAZARD'S WRITTEN OPINION DATED DECEMBER 27,
2001 IS DIRECTED TO THE BOARD AND ONLY ADDRESSES THE FAIRNESS OF THE
CONSIDERATION IN THE OFFER AND THE MERGER TO THE HOTJOBS STOCKHOLDERS FROM A
FINANCIAL POINT OF VIEW AS OF THE DATE OF THE OPINION. LAZARD'S WRITTEN OPINION
DATED DECEMBER 27, 2001 DOES NOT ADDRESS ANY OTHER ASPECT OF THE OFFER AND THE
MERGER AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY HOTJOBS STOCKHOLDER AS TO
WHETHER THE STOCKHOLDER SHOULD TENDER SHARES OF THE COMMON STOCK IN THE OFFER OR
VOTE WITH RESPECT TO THE MERGER. THE FOLLOWING IS ONLY A SUMMARY OF THE LAZARD
OPINION DATED DECEMBER 27, 2001 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE FULL TEXT OF THE LAZARD OPINION ATTACHED AS ANNEX A.
In connection with its written opinion dated December 27, 2001, Lazard,
among other things:
- reviewed the financial terms and conditions of the Merger Agreement;
- analyzed certain historical business and financial information relating to
the Company and Yahoo!;
- reviewed various financial forecasts and other data provided to Lazard by
the Company relating to its business and various publicly available
forecasts prepared by nationally recognized research analysts who report
on Yahoo!;
- held discussions with members of the senior managements of the Company and
Yahoo! with respect to the businesses and prospects of the Company and
Yahoo!, respectively, the strategic objectives of each, and possible
benefits which might be realized following the Merger;
- reviewed public information with respect to certain other companies in
lines of businesses Lazard believed to be generally comparable to the
businesses of the Company and Yahoo!;
- reviewed the financial terms of certain business combinations involving
companies in lines of businesses Lazard believed to be generally
comparable to those of the Company;
- reviewed the historical stock prices and trading volumes of the Common
Stock and Yahoo! Common Stock; and
- conducted such other financial studies, analyses and investigations as
Lazard deemed appropriate.
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<Page>
Lazard relied upon the accuracy and completeness of all information publicly
available or reviewed by or discussed with Lazard. Lazard did not assume any
responsibility for any independent verification of such information or any
independent valuation or appraisal of any of the assets or liabilities of the
Company or Yahoo!, or concerning the solvency or fair value of either the
Company or Yahoo!. With respect to financial forecasts provided to it by the
Company, Lazard assumed that they had been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the
management of the Company as to the future financial performance of the Company.
With the consent of the Company, Lazard also relied on publicly available
forecasts prepared by nationally recognized research analysts who report on
Yahoo!. Lazard assumed no responsibility for and expressed no view as to such
forecasts or the assumptions on which they were based.
The written opinion of Lazard was necessarily based on economic, monetary,
market and other conditions as in effect on, and the information made available
to it as of, December 27, 2001. In rendering its opinion, Lazard was not opining
as to the prices at which the Common Stock and Yahoo! Common Stock will trade
before or after the consummation of the Offer or the Merger.
In rendering its opinion, Lazard assumed that the Offer and the Merger would
be consummated on the terms described in the Merger Agreement, without any
waiver of any material terms or conditions by the Company and that obtaining the
necessary regulatory approvals for the Offer and the Merger would not have an
adverse effect on the Company or Yahoo!. In addition, Lazard's opinion did not
address the relative merits of the transactions contemplated by the Merger
Agreement as compared to any alternative business transaction that might be
available to the Company.
The following is a summary of the material financial and comparative
analyses performed by Lazard in connection with providing its oral opinion to
the Board and reviewing it with the Board at its meeting on December 23, 2001.
PUBLIC MARKET VALUATION ANALYSIS. Lazard reviewed and compared certain
actual and estimated financial, operating and market information of selected
public companies in the online recruiting industry. The companies included in
this analysis were:
- Dice, Inc.
- Kforce Inc.
- Workstream, Inc.
- jobpilot AG
Using publicly available information and published Wall Street research
reports for the selected companies and based upon closing stock prices as of
December 21, 2001, Lazard calculated multiples of enterprise value to projected
2002 earnings before interest, taxes, depreciation and amortization ("EBITDA").
Based upon these results, Lazard applied a range of multiples of enterprise
value to projected 2002 EBITDA from 12.0x to 15.0x to 2002 EBITDA projections
provided by the management of the Company to derive a range of implied
enterprise values for the Company of approximately $150 million to
$200 million. Based on approximately 38.7 million shares of the Common Stock
outstanding and assuming approximately $78.5 million net cash as of
September 30, 2001 plus proceeds from the exercise of HotJobs stock options,
this implied a range of per share values of approximately $5.50 to $6.75 for the
Common Stock.
In addition, using publicly available information and published Wall Street
research reports for the selected companies and based upon closing stock prices
as of December 21, 2001, Lazard calculated multiples of enterprise value to
projected 2002 revenues. Based upon these results, Lazard applied a range of
multiples of enterprise value to projected 2002 revenues from 0.8x to 1.2x to
2002 revenue projections provided by the management of the Company to derive a
range of implied enterprise values for the Company of approximately $75 million
to $125 million. Based on approximately 38.7 million
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<Page>
shares of the Common Stock outstanding and assuming approximately $78.5 million
net cash as of September 30, 2001 plus proceeds from the exercise of HotJobs
stock options, this implied a range of per share values of approximately $3.75
to $5.00 for the Common Stock.
PRIVATE MARKET VALUATION. Lazard reviewed and analyzed selected publicly
available financial and operating data relating to selected acquisition
transactions that Lazard considered comparable for the purpose of this analysis.
These selected comparable transactions included significant newspaper publishing
transactions from November 1997 to July 2001, selected transactions in the
online recruiting industry, and selected other transactions that Lazard
considered relevant. The selected comparable transactions in the online
recruiting industry included the following transactions, which lists the
acquiror followed by the target:
- Scout24 AG/topjobs.Net plc
- Investor group including Knight Ridder, Inc. and Tribune
Company/CareerBuilder, Inc.
- HotJobs.com, Ltd./Resumix, Inc.
- HeadHunter.NET, Inc./Career Mosaic Inc.
- Careerbuilder Inc./HeadHunter.NET, Inc.
The selected other comparable transactions that Lazard considered relevant
included the following transactions, which lists the acquiror followed by the
target:
- Investor group involving Hicks, Muse, Tate & Furst Inc. and Apax
Partners & Co. Ventures Limited/Yell (British Telecommunications plc's
yellow-pages business)
- The Great Universal Stores P.L.C./Experian Corp. (Bain Capital and Thomas
H. Lee Company)
- Management-led investor group/Hebdo Mag International Inc.
Lazard compared the transaction value of the selected comparable
transactions as a multiple of last twelve months ("LTM") revenues at the time of
the announcement of such transactions:
<Table>
<Caption>
TRANSACTION VALUE AS A MULTIPLE
OF LTM REVENUES
-------------------------------
Median of selected newspaper transactions.................. 3.2x
Median of selected online recruiting transactions.......... 3.0x
Median of other relevant transactions...................... 2.8x
Overall Median............................................. 3.0x
</Table>
Based on the LTM revenues multiples from the selected comparable
transactions, Lazard applied a range of multiples of transaction value to LTM
revenues from 3.0x to 3.5x to 2001 estimated revenues provided by the management
of the Company to derive a range of implied enterprise values for the Company of
approximately $350 million to $400 million. Based on approximately 38.7 million
shares of the Common Stock outstanding and assuming approximately $78.5 million
net cash as of September 30, 2001 plus proceeds from the exercise of HotJobs
stock options, this implied a range of per share values of approximately $10.50
to $11.50 for the Common Stock.
PREMIUMS PAID ANALYSIS. Lazard reviewed the publicly available information
concerning premiums paid in transactions involving U.S. Internet targets since
January 1, 1996 that had transaction values over $100 million as well as for
transactions involving U.S. targets across industries, excluding financial
institutions, since January 1, 1996 that had transaction values that ranged from
$200 million to
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<Page>
$1.0 billion. Using publicly available data, Lazard calculated the following
premium percentages paid in these transactions:
<Table>
<Caption>
EXCLUDING NEGATIVE
ALL TRANSACTIONS PREMIUMS
------------------------ ------------------------
PREMIUM TO CLOSING PRICE PREMIUM TO CLOSING PRICE
4 WEEKS PRIOR 4 WEEKS PRIOR
TO ANNOUNCEMENT TO ANNOUNCEMENT
------------------------ ------------------------
Median of U.S. Internet targets................... 47.6% 60.0%
Median of all U.S. targets........................ 40.6% 44.4%
</Table>
Based on the range of premiums in these transactions and the closing price
of the Common Stock on December 12, 2001, one day prior to the announcement of
the proposal by Yahoo!, Lazard derived a range of implied per share values of
approximately $9.00 to $10.00 for the Common Stock. Based on approximately
38.7 million shares of the Common Stock outstanding and assuming approximately
$78.5 million net cash as of September 30, 2001 plus proceeds from the exercise
of HotJobs stock options, this implied a range of enterprise values for the
Company of approximately $300 million to $350 million.
In addition, based on the range of premiums in these transactions and the
closing price of the Common Stock one month prior to June 29, 2001, Lazard
derived a range of implied per share values of approximately $8.50 to $9.50 for
the Common Stock. Based on approximately 38.7 million shares of the Common Stock
outstanding and assuming approximately $78.5 million net cash as of
September 30, 2001 plus proceeds from the exercise of HotJobs stock options,
this implied a range of enterprise values for the Company of approximately
$275 million to $325 million.
DISCOUNTED CASH FLOW ANALYSIS. Based upon publicly available information
and projections provided by the management of the Company and taking into
account a net operating loss balance of approximately $105 million, Lazard
estimated the net present value of the future free cash flows of the Company.
Lazard utilized discount rates ranging from 16% to 18% and perpetuity free cash
flow growth rates ranging from 3% to 5%. This range of discount rates was based
on a weighted average cost of capital analysis of comparable publicly traded
companies. Using this analysis, Lazard derived a range of implied enterprise
values for the Company of approximately $325 million to $375 million. Based on
approximately 38.7 million shares of the Common Stock outstanding and assuming
approximately $78.5 million net cash as of September 30, 2001 plus proceeds from
the exercise of HotJobs stock options, this implied a range of per share values
of approximately $9.75 to $10.75 for the Common Stock.
YAHOO! COMPARABLE COMPANIES TRADING ANALYSIS. Lazard reviewed and compared
certain actual and estimated financial, operating and market information of
selected public Internet companies. The companies included in this analysis
were:
- Terra Networks, S.A.
- AOL Time Warner, Inc.
- Ticketmaster Group, Inc.
- LookSmart Ltd.
- Ask Jeeves, Inc.
- CNET Networks, Inc.
- eBay, Inc.
- Amazon.com, Inc.
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- InfoSpace, Inc.
- Expedia, Inc.
- Priceline.com Inc.
- Travelocity.com Inc.
- DoubleClick, Inc.
- RealNetworks, Inc.
Lazard compared market multiples of enterprise value to projected 2001 and
2002 revenues as well as to projected 2001 and 2002 EBITDA for Yahoo! with those
of the selected public companies. Lazard also compared the closing stock prices
of Yahoo! and the selected public companies against their respective 2001 and
2002 estimated earnings per share ("PE") and compared their respective long-term
earnings per share growth rates as estimated by the Institutional Brokers
Estimate System ("IBES"). Lazard also reviewed and compared the stock
performance of Yahoo! with those of the selected public companies with respect
to the percentage of the highest intraday stock price for each company for the
previous 52-week period. Historical and estimated information were based on
publicly available information as well as published Wall Street research reports
and stock prices were based on the closing stock prices as of December 21, 2001.
Comparative data for this analysis is shown in the following table:
<Table>
<Caption>
ENTERPRISE VALUE/
---------------------------------------------------------
2001 REVENUES 2002 REVENUES 2001 EBITDA 2002 EBITDA
(ESTIMATED) (ESTIMATED) (ESTIMATED) (ESTIMATED)
------------- ------------- ----------- -----------
Median of public companies........ 3.32x 3.67x 52.4x 28.7x
YAHOO!............................ 12.55X 11.72X 495.4X 163.7X
</Table>
<Table>
<Caption>
PRICE/ PRICE/ IBES % OF 52
2001 EPS 2002 EPS 5-YEAR WEEK
(ESTIMATED) (ESTIMATED) GROWTH HIGH
----------- ----------- -------- --------
Median of public companies...................... 74.4x 43.0x 35.2% 58.2%
YAHOO!.......................................... 338.4X 260.3X 29.4% 39.0%
</Table>
The summary set forth above does not purport to be a complete description of
the analyses performed by Lazard, although it is a summary of the material
financial and comparative analyses performed by Lazard in arriving at its
opinion. The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Lazard
believes that its analyses must be considered as a whole and that selecting
portions of the analyses or the summary set forth above without considering all
analyses as a whole, could create an incomplete view of the evaluation process
underlying the Lazard opinion.
In its analyses, Lazard made numerous assumptions with respect to industry
performance, general business, economic, regulatory, market and financial
conditions and other matters, many of which are beyond the control of the
Company, Yahoo! or Lazard. The estimates or forecasts contained in these
analyses and the valuation ranges resulting from any particular analysis do not
necessarily indicate actual values or predict future results or values, which
may be significantly more or less favorable than those suggested by these
analyses. Lazard did not assign any specific weight to any of the analyses
described above and did not draw any specific conclusions from or with regard to
any one method of analysis. In addition, analyses relating to the value of the
businesses or securities are not appraisals and do not reflect the prices at
which the businesses or securities may actually be sold or the prices at
16
<Page>
which their securities may trade. As a result, these analyses and estimates are
inherently subject to substantial uncertainty.
No company or transaction used in any of the analyses is identical to the
Company, Yahoo! or the Offer and the Merger. Accordingly, an analysis of the
results of the foregoing necessarily involves complex considerations and
judgments concerning financial and operating characteristics of the Company and
Yahoo! and other factors that could affect the public trading values or the
announced transaction values, as the case may be, of the companies to which they
are being compared. Mathematical analysis (such as determining the average or
median) is not in itself a meaningful method of using comparable transaction
data or comparable company data.
Lazard's opinion and presentation was only one of many factors considered by
the Board in its evaluation of the Offer and the Merger and should not be viewed
as determinative of the views of the Board or the Company's management. In
addition, the terms of the Merger Agreement were determined through arm's-length
negotiations between the Company and Yahoo!, and were approved by the Board.
Lazard has consented to the inclusion of and references to its opinion in this
Statement.
Under the terms of Lazard's engagement, Lazard is entitled to receive usual
and customary fees in connection with the Offer and the Merger from the Company.
A substantial portion of such fee is contingent upon the completion of the Offer
and the Merger. The Company has agreed to reimburse Lazard for reasonable
out-of-pocket expenses, including the fees and expenses of its legal counsel,
and to indemnify Lazard and certain related parties against certain liabilities,
including liabilities under the federal securities laws, relating to or arising
out of Lazard's engagement.
Lazard is an internationally recognized investment banking firm and is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements, leveraged
buyouts, and valuations for estate, corporate and other purposes. In the
ordinary course of its business, Lazard and its affiliates may from time to time
effect transactions and hold securities, including derivative securities, of the
Company or Yahoo! for its own account and for the account of Lazard's customers.
(c) INTENT TO TENDER.
Except as described in this paragraph and for Shares that may be sold in
market transactions prior to the completion of the Offer, after reasonable
inquiry and to the best of the Company's knowledge, each executive officer,
director, affiliate and subsidiary of the Company currently intends, subject to
compliance with applicable law including Section 16(b) of the Securities and
Exchange Act of 1934, to tender all Shares held of record or beneficially owned
by such person or entity to the Purchaser in the Offer. Stock options held by
directors and executive officers as of the Effective Time will be cancelled and
converted into options to purchase shares of Yahoo! Common Stock as described in
Item 3 above.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
In connection with Lazard's services as investment banker to the Company,
the Company has previously paid Lazard a transaction fee of $600,000 prior to
the date hereof and the Company will pay Lazard an additional payment of
$3.9 million upon the consummation of the Offer and the Merger.
The Company has agreed to reimburse Lazard certain expenses incurred in
connection with rendering investment banking services, including fees and
disbursements of its legal counsel. The Company also has agreed to indemnify
Lazard and its directors, officers, agents, employees and controlling persons
for certain costs, expenses and liabilities, including certain liabilities under
the federal securities laws.
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Except as set forth above, neither the Company nor any person acting on its
behalf has or currently intends to employ, retain or compensate any person to
make solicitations or recommendations to the stockholders of the Company on its
behalf with respect to the Offer, except that such solicitations or
recommendations may be made by directors, officers or employees of the Company,
for which services no additional compensation will be paid.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
No transactions in Shares have been effected during the past 60 days by the
Company or any subsidiary of the Company or, to the knowledge of the Company, by
any executive officer, director or affiliate of the Company.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Except as set forth in this Statement, the Company is not currently
undertaking or engaged in any negotiations in response to the Offer that relate
to (1) a tender offer for or other acquisition of the Company's securities by
the Company, any subsidiary of the Company or any other person; (2) an
extraordinary transaction, such as a merger, reorganization or liquidation,
involving the Company or any subsidiary of the Company; (3) a purchase, sale or
transfer of a material amount of assets of the Company or any subsidiary of the
Company; or (4) any material change in the present dividend rate or policy, or
indebtedness or capitalization of the Company.
Except as set forth in this Statement, there are no transactions,
resolutions of the Board, agreements in principle, or signed contracts in
response to the Offer that relate to one or more of the events referred to in
the preceding paragraph.
ITEM 8. ADDITIONAL INFORMATION.
(a) DELAWARE GENERAL CORPORATION LAW.
As a Delaware corporation, the Company is subject to Section 203. In
general, Section 203 would prevent an "interested stockholder" (generally
defined as a person beneficially owning 15% or more of a corporation's voting
stock) from engaging in a "business combination" (as defined in Section 203)
with a Delaware corporation for three years following the date such person
became an interested stockholder unless: (1) before such person became an
interested stockholder, the board of directors of the corporation approved the
transaction in which the interested stockholder became an interested stockholder
or approved the business combination, (2) upon consummation of the transaction
which resulted in the interested stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced (excluding for
purposes of determining the number of shares of outstanding stock held by
directors who are also officers and by employee stock plans that do not allow
plan participants to determine confidentially whether to tender shares), or
(3) following the transaction in which such person became an interested
stockholder, the business combination is (x) approved by the board of directors
of the corporation and (y) authorized at a meeting of stockholders by the
affirmative vote of the holders of at least 66 2/3% of the outstanding voting
stock of the corporation not owned by the interested stockholder; this action
may not be taken by written consent. In accordance with the provisions of
Section 203, the Board of Directors has approved the Merger Agreement and the
transactions contemplated thereby, as described in Item 4 above and, therefore,
the restrictions of Section 203 are inapplicable to the Merger and the
transactions contemplated under the Merger Agreement.
Under the DGCL, if the Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the outstanding Shares, Purchaser will be able to
effect the Merger after consummation of the Offer without a vote of the
Company's stockholders. However, if the Purchaser does not acquire at least 90%
18
<Page>
of the Shares pursuant to the Offer or otherwise and a vote of the Company's
stockholders is required under Delaware law, a significantly longer period of
time will be required to effect the Merger.
(b) REGULATORY APPROVALS.
UNITED STATES ANTITRUST COMPLIANCE. Under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR ACT") and the rules that have
been promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"ANTITRUST DIVISION") and the FTC and certain waiting period requirements have
been satisfied. The purchase of Shares pursuant to the Offer is subject to such
requirements.
Yahoo! has advised the Company that it has filed a Notification and Report
Form with respect to the Offer and Merger with the Antitrust Division and the
FTC on January 10, 2002. As a result, the waiting period applicable to the
purchase of Shares pursuant to the Offer would be scheduled to expire at
11:59 p.m., New York City time, on February 11, 2002. However, prior to such
time, the Antitrust Division or the FTC may grant early termination or extend
the waiting period by requesting additional information or documentary material
relevant to the Offer from Yahoo! If such a request is made, the waiting period
will be extended until 11:59 p.m., New York City time, on the thirtieth calendar
day (or the first business day thereafter) after substantial compliance by
Yahoo! with such request. Thereafter, such waiting period can be extended only
by court order or by agreement of the parties.
The Antitrust Division and the FTC scrutinize the legality under the
antitrust laws of transactions such as the acquisition of Shares by Yahoo!
pursuant to the Offer and the Merger. At any time before or after the
consummation of any such transactions, the Antitrust Division or the FTC could
take such action under the antitrust laws of the United States as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of Shares pursuant to the Offer or seeking divestiture of the Shares so
acquired or divestiture of substantial assets of Yahoo! or the Company. Private
parties (including individual States of the United States) may also bring legal
actions under the antitrust laws of the United States. The Company does not, and
Yahoo! has advised the Company that it does not, believe that the consummation
of the Offer and the Merger will result in a violation of any applicable
antitrust laws. However, there can be no assurance that a challenge to the Offer
or the Merger on antitrust grounds will not be made, or if such a challenge is
made, what the result will be.
OTHER FILINGS
Neither Yahoo! nor the Company believe that any other filings related to
business combination statutes will be necessary in any other countries. But if
it is determined that any filings are required, the parties intend to make such
filings as soon as practicable.
(c) YAHOO!'S DESIGNATION OF PERSONS TO BE ELECTED TO THE BOARD OF DIRECTORS.
The Information Statement attached as Annex B hereto is being furnished in
connection with the possible designation by Yahoo!, pursuant to the terms of the
Merger Agreement, of certain persons to be elected to the Board of Directors
other than at a meeting of the Company's stockholders.
19
<Page>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibits are filed herewith:
<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION
------- ------------------------------------------------------------
(a)(1) Prospectus, dated January 11, 2002 (incorporated by
reference to the prospectus included in the Registration
Statement on Form S-4 of Yahoo! filed on January 11, 2002
(the "YAHOO! S-4")).
(a)(2) Letter to the stockholders of the Company, dated
January 11, 2002.*
(a)(3) Form of Letter of Transmittal (incorporated by reference to
Exhibit 99.2 to the Yahoo! S-4).
(a)(4) Opinion of Lazard Freres & Co. LLC, dated as of
December 27, 2001 (included as Annex A to this Statement).*
(a)(5) Joint Press Release issued by Yahoo! and the Company on
December 27, 2001 (incorporated by reference to press
release under cover of Schedule 14D-9 filed by the Company
on December 27, 2001).
(e)(1) Agreement and Plan of Merger, dated as of December 27, 2001,
among Yahoo!, HJ Acquisition Corp. and the Company
(incorporated by reference to Exhibit 2.1 to the Form 8-K
filed by the Company on December 28, 2001).
(e)(2) Stockholder Agreement, dated as of December 27, 2001,
between Yahoo! and Richard S. Johnson (incorporated by
reference to Exhibit 2 of the Schedule 13D filed by Yahoo!
on January 4, 2002).
(e)(3) Information Statement of the Company, dated January 11, 2002
(included as Annex B hereto).*
</Table>
- ------------------------
* Included with this Statement.
20
<Page>
SIGNATURE
After due 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.
<Table>
HOTJOBS.COM, LTD.
/s/ Dimitri J. Boylan
By: -----------------------------------------
Name: Dimitri J. Boylan
Title: President and Chief Executive
Officer
</Table>
Dated: January 11, 2002
21
<Page>
ANNEX A
[LETTERHEAD OF LARZARD FRERES & CO. LLC]
December 27, 2001
The Board of Directors
HotJobs.com, Ltd.
406 West 31st Street
New York, NY 10001
Dear Members of the Board:
We understand that HotJobs.com, Ltd. (the "Company"), Yahoo! Inc. (the
"Parent") and HJ Acquisition Corp., a wholly-owned subsidiary of the Parent
("Sub"), have entered into an Agreement and Plan of Merger dated as of
December 27, 2001 (the "Agreement"), pursuant to which Sub will commence an
offer (the "Offer") to exchange each of the issued and outstanding shares of
common stock of the Company, par value $0.01 per share (the "Company Common
Stock"), for (i) a fraction of a share of common stock of the Parent, par value
$0.001 per share (the "Parent Common Stock"), equal to the Exchange Ratio and
(ii) cash in an amount equal to (A) $10.50 minus (B) an amount equal to the
product of (x) the Exchange Ratio multiplied by (y) the Parent Market Price,
without interest (together, the "Consideration"). The "Exchange Ratio" is
defined in the Agreement to be equal to (a) $5.25 divided by (b) the Parent
Market Price; PROVIDED if the number of shares of Parent Common Stock otherwise
issuable as part of the Consideration (assuming valid tender and no withdrawal
of 39,500,000 shares of Company Common Stock) would otherwise exceed 15,000,000,
then the Exchange Ratio shall be reduced to a number equal to the quotient of
(i) 15,000,000 divided by (ii) 39,500,000, rounded to four decimal points (or
0.3797).
As used herein and in the Agreement, the "Parent Market Price" means the
average of the daily volume-weighted average prices, rounded to four decimal
points, of Parent Common Stock, as reported by Bloomberg, L.P., during each
trading day in the "Valuation Period" which is defined as the period of ten
(10) consecutive trading days ending on and including the second trading day
before and excluding the expiration date of the Offer as established at the
commencement of the Offer or, if applicable, the latest extension of such
expiration date, other than an extension relating to a "subsequent offering
period" pursuant to Rule 14d-11 of the Securities Exchange Act of 1934, as
amended.
The Agreement also provides that, following consummation of the Offer,
either (a) the Company will be merged with and into Sub (the "Forward Merger")
or (b) Sub or another subsidiary of the Parent will be merged with and into the
Company (the "Reverse Merger" and, together with the Forward Merger, the
"Merger"). Pursuant to the Merger, each share of Company Common Stock issued and
outstanding immediately prior to the effective time of the Merger (other than
shares of Company Common Stock held in the treasury of the Company or owned by
the Parent or Sub or as to which dissenters' rights have been properly
exercised), will be converted into the right to receive the Consideration.
You have requested our opinion as to the fairness, from a financial point of
view, to the holders of Company Common Stock (other than the Parent, Sub,
affiliates of Parent or Sub and holders who
A-1
<Page>
[LOGO]
properly exercise dissenters' rights) of the Consideration to be received by
such holders in the Offer and the Merger. In connection with this opinion, we
have:
(i) Reviewed the financial terms and conditions of the Agreement;
(ii) Analyzed certain historical business and financial information relating
to the Company and the Parent;
(iii) Reviewed various financial forecasts and other data provided to us by
the Company relating to its business and various publicly available
forecasts prepared by nationally recognized research analysts who
report on the Parent;
(iv) Held discussions with members of the senior managements of the Company
and the Parent with respect to the businesses and prospects of the
Company and the Parent, respectively, the strategic objectives of each,
and possible benefits which might be realized following the Merger;
(v) Reviewed public information with respect to certain other companies in
lines of businesses we believe to be generally comparable to the
businesses of the Company and the Parent;
(vi) Reviewed the financial terms of certain business combinations involving
companies in lines of businesses we believe to be generally comparable
to those of the Company;
(vii) Reviewed the historical stock prices and trading volumes of the Company
Common Stock and the Parent Common Stock; and
(viii) Conducted such other financial studies, analyses and investigations as
we deemed appropriate.
We have relied upon the accuracy and completeness of the foregoing
information, and have not assumed any responsibility for any independent
verification of such information or any independent valuation or appraisal of
any of the assets or liabilities of the Company or the Parent, or concerning the
solvency or fair value of either of the foregoing entities. With respect to
financial forecasts provided to us by the Company, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of management of the Company as to the future financial
performance of the Company. With the consent of the Company, we have also relied
on publicly available forecasts prepared by nationally recognized research
analysts who report on the Parent. We assume no responsibility for and express
no view as to such forecasts or the assumptions on which they are based.
Further, our opinion is necessarily based on economic, monetary, market and
other conditions as in effect on, and the information made available to us as
of, the date hereof. In rendering our opinion, we are not opining as to the
prices at which the Company Common Stock and the Parent Common Stock will trade
before or after the consummation of the Offer or the Merger.
In rendering our opinion, we have assumed that the Offer and Merger will be
consummated on the terms described in the Agreement, without any waiver of any
material terms or conditions by the Company and that obtaining the necessary
regulatory approvals for the Offer and the Merger will not have an adverse
effect on the Company or the Parent.
Our opinion does not address the relative merits of the transactions
contemplated by the Agreement as compared to any alternative business
transaction that might be available to the Company.
Lazard Freres & Co. LLC is acting as investment banker to the Company in
connection with the Offer and the Merger and will receive a fee for our
services, a substantial portion of which is contingent upon the consummation of
the Offer and the Merger. Lazard Freres & Co. LLC also acted as investment
banker to the Company in connection with the proposed transaction with TMP
Worldwide, Inc. pursuant to an Agreement and Plan of Merger dated as of
June 29, 2001 among the Company, TMP Worldwide, Inc. and TMP Tower Corp.
A-2
<Page>
[LOGO]
Our engagement and the opinion expressed herein are for the benefit of the
Company's Board of Directors and our opinion is rendered to the Company's Board
of Directors in connection with its consideration of the Offer and the Merger.
This opinion is not intended to and does not constitute a recommendation to any
holder of Company Common Stock as to whether such holder should tender such
shares of Company Common Stock in the Offer or vote with respect to the Merger.
It is understood that this letter may not be disclosed or otherwise referred to
without our prior consent, except as may otherwise be required by law or by a
court of competent jurisdiction or as provided in our engagement letter dated
June 11, 2001.
Based on and subject to the foregoing, we are of the opinion that, as of the
date hereof, the Consideration to be received by the holders of Company Common
Stock (other than the Parent, Sub, affiliates of Parent or Sub and holders who
properly exercise dissenters' rights) in the Offer and the Merger is fair to
such holders from a financial point of view.
<Table>
Very truly yours,
LAZARD FRERES & CO. LLC
By: /s/ PATRICK SAYER
-----------------------------------------
Patrick Sayer
MANAGING DIRECTOR
</Table>
A-3
<Page>
ANNEX B
HOTJOBS.COM, LTD.
406 WEST 31ST STREET
NEW YORK, NEW YORK 10001
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES EXCHANGE ACT
OF 1934 AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about January 11, 2002 as
part of the Solicitation/Recommendation Statement on Schedule 14D-9 (the
"STATEMENT") of HotJobs.com, Ltd. (the "COMPANY"). You are receiving this
Information Statement in connection with the possible election of persons
designated by Yahoo! Inc. ("YAHOO!") to a majority of seats on the Board of
Directors (the "BOARD OF DIRECTORS" or the "BOARD") of the Company. On
December 27, 2001, the Company entered into an Agreement and Plan of Merger (the
"MERGER AGREEMENT") with Yahoo! and HJ Acquisition Corp. (the "PURCHASER"), a
Delaware corporation and a wholly-owned subsidiary of Yahoo!, pursuant to which
the Purchaser has commenced a tender offer to exchange for each issued and
outstanding share of Common Stock (each, a "SHARE"), (a) a fraction of a share
of Yahoo! common stock, par value $0.001, (the "YAHOO! COMMON STOCK"), equal to
the Exchange Ratio (as defined below), subject to the limitation described
below, (the "PER SHARE STOCK CONSIDERATION") upon the terms and subject to the
conditions set forth in the prospectus relating to the exchange offer, dated
January 11, 2002 (the "PROSPECTUS"), and in the related Letter of Transmittal
(the "LETTER OF TRANSMITTAL" which, together with the Prospectus, as amended or
supplemented from time to time, constitute the "OFFER") and (b) cash in an
amount equal to $10.50 minus an amount equal to the product of (x) the Exchange
Ratio multiplied by (y) the Yahoo! Market Price (as defined below), without
interest (the "PER SHARE CASH CONSIDERATION" and together with the Per Share
Stock Consideration, the "EXCHANGE OFFER CONSIDERATION"). Copies of the
Prospectus and the Offer have been mailed to stockholders of the Company and are
filed as Exhibits (a)(1)(A) and (a)(1)(B) respectively, to the Tender Offer
Statement on Schedule TO (as amended from time to time, the "SCHEDULE TO") filed
by Yahoo! and the Purchaser with the Securities and Exchange Commission (the
"COMMISSION") on January 11, 2002. The Merger Agreement provides that, subject
to the satisfaction or waiver of certain conditions, as soon as practicable
after the completion of the Offer, and in accordance with the Delaware General
Corporation Law (the "DGCL"), either the Company will be merged with and into
HJ Acquisition Corp. with HJ Acquisition Corp. surviving the Merger as a
wholly-owned subsidiary of Yahoo! or HJ Acquisition Corp. will be merged with
and into the Company with the Company surviving the merger as a wholly-owned
subsidiary of Yahoo! (in either case, the "MERGER"). Under some circumstances,
Yahoo! has the right to effect this Offer and/or the Merger using another direct
or indirect subsidiary of Yahoo! in place of HJ Acquisition Corp. If Yahoo!
exercises this right, then appropriate references in this document to
HJ Acquisition Corp. shall be deemed to refer to this other subsidiary.
HJ Acquisition Corp., or HotJobs, as the case may be, as the surviving
corporation of the Merger is sometimes referred to in this document as the
"SURVIVING CORPORATION." At the effective time of the Merger (the "EFFECTIVE
TIME"), each issued and outstanding Share (other than Shares owned by Yahoo!,
any of its subsidiaries (including the Purchaser), the Company (as treasury
stock), and Shares held by stockholders who properly demand appraisal and comply
with the provisions of Section 262 of the DGCL relating to dissenters' rights of
appraisal) will be converted into the right to receive the same consideration
per Share that is paid pursuant in the Offer (the "MERGER CONSIDERATION"). The
Merger Consideration and the Exchange Offer Consideration are sometimes referred
to in this Statement collectively as the "Consideration."
B-1
<Page>
The Offer, the Merger, and the Merger Agreement are more fully described in
the Statement, to which this Information Statement forms Annex B, which was
filed by the Company with the Commission on January 11, 2002 and which is being
mailed to stockholders of the Company along with this Information Statement.
This Information Statement is being mailed to you in accordance with
Section 14(f) of the Securities Exchange Act of 1934 ("EXCHANGE ACT") and
Rule 14f-1 promulgated thereunder. The information set forth herein supplements
certain information set forth in the Statement. Information set forth herein
related to Yahoo!, the Purchaser or the Yahoo! Designees (as defined below) has
been provided by Yahoo!. You are urged to read this Information Statement
carefully. You are not, however, required to take any action in connection with
the matters set forth herein.
Pursuant to the Merger Agreement, the Purchaser commenced the Offer on
January 11, 2002. The Offer is currently scheduled to expire at 12:00 AM, New
York City time, on Saturday, February 8, 2002, unless the Purchaser extends it.
GENERAL
The Common Stock is the only class of equity securities of the Company
outstanding which is entitled to vote at a meeting of the stockholders of the
Company. Each share has one vote. As of the close of business on January 8,
2002, there were 38,783,835 outstanding Shares.
RIGHTS TO DESIGNATE DIRECTORS AND YAHOO! DESIGNEES
The Merger Agreement provides that, upon the purchase of and payment for
Shares by the Purchaser pursuant to the Offer, Yahoo! will be entitled to
designate such number of directors (the "YAHOO! DESIGNEES") on the Board,
rounded up to the next whole number, as is equal to the product obtained by
multiplying the total number of directors on the Board by the percentage that
the number of Shares beneficially owned by Yahoo!, Purchaser and any of their
affiliates bears to the total number of Shares then outstanding.
Additionally, the Merger Agreement provides that the Company will take all
actions necessary to cause the Yahoo! Designees to be elected to the Board,
including increasing the number of directors and seeking and accepting
resignations of incumbent directors. The Merger Agreement also provides that the
Company will, subject to applicable law and stock exchange regulations, use its
reasonable best efforts to cause Yahoo! Designees to constitute the number of
members, rounded up to the next whole number, on (1) each committee of the Board
and (2) each board of directors of each subsidiary of the Company and each
committee of such boards of directors that represents the same percentage as
such individuals represent on the Board of Directors.
Notwithstanding the foregoing, if Shares are purchased pursuant to the
Offer, the Company will cause the Board of Directors to have at least two
directors who are directors on the date of the Merger Agreement who are
independent directors for purposes of the continued listing requirements of the
Nasdaq National Market (the "INDEPENDENT DIRECTORS"), provided, however, that if
any Independent Director is unable to serve due to death or disability, the
remaining Independent Directors shall be entitled to elect or designate another
person (or persons) who serves as a director on the date hereof to fill such
vacancy, and that person (or persons) shall be deemed to be an Independent
Director for purposes of the Merger Agreement. If no Independent Director then
remains, the other directors shall designate two persons who are directors on
the date of the Merger Agreement (or, in the event there shall be less than two
directors available to fill those vacancies as a result of such persons' deaths,
disabilities or refusals to serve, the smaller number of persons who are
directors on the date hereof) to fill those vacancies and those persons shall be
deemed Independent Directors for purposes of the
B-2
<Page>
Merger Agreement. Notwithstanding anything in the Merger Agreement to the
contrary, if Yahoo!'s designees constitute a majority of the directors on the
Board of Directors after the acceptance for payment of Shares pursuant to the
Offer and prior to the Effective Time, then the affirmative vote of a majority
of the Independent Directors (or if only one exists, then the vote of that
Independent Director) shall be required to (1) amend or terminate the Merger
Agreement by the Company; (2) exercise or waive any of the Company's rights,
benefits or remedies under the Merger Agreement, if such action would adversely
affect holders of Shares other than Yahoo! or the Purchaser; (3) amend the
Certificate of Incorporation or Bylaws of the Company if such action would
adversely affect holders of Shares other than Yahoo! or the Purchaser; or
(4) take any other action of the Board of Directors under or in connection with
the Merger Agreement if such action would adversely affect holders of Shares
other than Yahoo! or the Purchaser; provided, however, that if there shall be no
Independent Directors as a result of such persons' deaths, disabilities or
refusal to serve, then such actions may be effected by majority vote of the
entire Board of Directors.
The Yahoo! Designees will be selected by Yahoo! from among the individuals
listed below. Each of the following individuals has consented to serve as a
director of the Company if appointed or elected. None of the Yahoo! Designees
currently is a director of, or holds any positions with, the Company. Yahoo! has
advised the Company that, to the best of Yahoo!'s knowledge, except as set forth
below, none of the Yahoo! Designees or any of their affiliates beneficially owns
any equity securities or rights to acquire any such securities of the Company,
nor has any such person been involved in any transaction with the Company or any
of its directors, executive officers or affiliates that is required to be
disclosed pursuant to the rules and regulations of the Commission other than
with respect to transactions between Yahoo! and the Company that have been
described in the Prospectus or the Statement.
The name, age, citizenship, present principal occupation or employment and
five-year employment history of each of the individuals who may be selected as
Yahoo! Designees are set forth below. Unless otherwise indicated, (1) the
business address of each such person is Yahoo!, 701 First Avenue, Sunnyvale,
California and (2) each such person is a citizen of the United States. Each
individual listed below is a director or executive officer of Yahoo!.
<Table>
<Caption>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AND CURRENT BUSINESS ADDRESS AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------- -------- ---------------------------------------------------
Tim Brady................................. 33 Mr. Brady has served as Senior Vice President,
Commerce and Network Services of Yahoo! since
February 2001. From November 1999 to February 2001,
Mr. Brady served as Senior Vice President, Network
Services. Prior to that, Mr. Brady served as
Yahoo!'s Vice President of Production from October
1997 to November 1999 and Yahoo!'s Director of
Production from January 1996 to October 1997. Mr.
Brady also serves as a director of The Boyd's
Collection Ltd.
Gregory C. Coleman........................ 47 Mr. Coleman has served as Executive Vice President,
North American Operations since April 2001. Prior
to joining Yahoo!, Mr. Coleman served as President
of U.S. Magazine Publishing from July 1998 to March
2001 and as Senior Vice President of Reader's
Digest Association from June 1994 to March 2001.
</Table>
B-3
<Page>
<Table>
<Caption>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AND CURRENT BUSINESS ADDRESS AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------- -------- ---------------------------------------------------
Susan Decker.............................. 39 Ms. Decker has served as Yahoo!'s Chief Financial
Officer and Senior Vice President, Finance and
Administration since June 2000. From August 1986 to
May 2000, Ms. Decker held several positions for
Donaldson, Lufkin & Jenrette, including Director of
Global Research from 1998 to 2000. Prior to 1998,
she was a Publishing & Advertising Equity
Securities Analyst for 12 years.
Timothy Koogle............................ 50 Mr. Koogle has served as a member of the board of
directors since July 1995, as Vice Chairman of the
Board of Directors from May 2001 to August 2001,
and as an advisor to Yahoo! from May 2001 to
December 2001. Mr. Koogle served as Chief Executive
Officer from July 1995 to May 2001, as President
from July 1995 to January 1999 and as Chairman from
January 1999 to May 2001.
Jeffrey Mallett, Canada................... 37 Mr. Mallett has served as a member of the board of
directors and as President and Chief Operating
Officer of Yahoo! since January 1999. Mr. Mallett
has served as Chief Operating Officer since January
1998. Prior to that, he served as Yahoo!'s Senior
Vice President, Business Operations from October
1995 to January 1998.
Farzad Nazem.............................. 40 Mr. Nazem has served as Senior Vice President,
Communications and Technical Services and Chief
Technology Officer since February 2001. From
January 1998 to February 2001, Mr. Nazem served as
Chief Technology Officer. Prior to that, he served
as Yahoo!'s Senior Vice President, Product
Development and Site Operations from March 1996 to
January 1998. From 1985 to 1996, Mr. Nazem held a
number of technical and executive management
positions at Oracle Corporation, including, most
recently, Vice President of Oracle's Media and Web
Server Division and member of the Product Division
Management Committee.
</Table>
B-4
<Page>
<Table>
<Caption>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AND CURRENT BUSINESS ADDRESS AGE AND FIVE-YEAR EMPLOYMENT HISTORY
- --------------------------------- -------- ---------------------------------------------------
Terry S. Semel............................ 57 Mr. Semel was appointed as Yahoo!'s Chairman of the
Board and Chief Executive Officer on May 1, 2001.
Since September 1999, Mr. Semel has also served as
Chairman and Chief Executive Officer of Windsor
Media, Inc. From March 1994 to September 1999, Mr.
Semel served as Chairman of the Board and Co-Chief
Executive Officer of Warner Bros. and Warner Music
Group. Mr. Semel also serves as a director of Polo
Ralph Lauren and Revlon, Inc.
Jerry Yang................................ 33 Mr. Yang, Chief Yahoo! and co-founder of Yahoo!,
has served as a member of the board of directors
and an officer of Yahoo! since March 1995. Mr. Yang
co-developed Yahoo! in 1994 while he was working
towards his Ph.D. in electrical engineering at
Stanford University. Mr. Yang also serves as a
director of Yahoo! Japan Corporation and Cisco
Systems, Inc.
</Table>
B-5
<Page>
OWNERSHIP OF COMMON STOCK BY THE
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of HotJobs common stock as of December 31, 2001, except as
otherwise indicated by (a) each director; (b) HotJobs' chief executive officer
and its other executive officer; (c) each person, or group of affiliated persons
that HotJobs knows to beneficially own 5% or more of the outstanding shares of
HotJobs common stock; and (d) all directors and executive officers as a group.
Except as otherwise noted, the address of each person listed in the table is
c/o HotJobs.com, Ltd., 406 West 31st Street, 9th Floor, New York, New York
10001.
Beneficial ownership is determined in accordance with the rules of the
Commission and includes voting or investment power with respect to securities.
In computing the number of shares beneficially owned by a person and the
percentage of ownership of that person, shares of common stock subject to
options held by that person that are currently exercisable or exercisable within
60 days of December 31, 2001 are deemed outstanding. These shares, however, are
not deemed outstanding for the purposes of computing the percentage of ownership
of any other person. To HotJobs' knowledge, except as otherwise noted, the
persons named in the table have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them, subject to
community property laws where applicable.
<Table>
<Caption>
NUMBER OF SHARES OF
COMMON STOCK PERCENT OF
NAME BENEFICIALLY OWNED OWNERSHIP
- ---- ------------------- ----------
Richard S. Johnson(1)....................................... 7,572,600 19.3%
The TCW Group, Inc.(2)...................................... 3,704,411 9.6%
Capital Research and Management Company(3).................. 2,725,000 7.0%
SMALLCAP World Fund, Inc.(4)................................ 2,350,000 6.1%
Bennett Carroccio(5)........................................ 2,258,480 5.8%
Alpine Associates, A Limited Partnership(6)................. 2,016,870 5.2%
Dimitri J. Boylan(7)........................................ 750,750 1.9%
Lowell W. Robinson(8)....................................... 156,875 *
John G. Murray(9)........................................... 108,566 *
John Hawkins(10)............................................ 79,608 *
Kevin P. Ryan(11)........................................... 77,751 *
Robert H. McNabb(12)........................................ 70,000 *
Phillip Guarascio(13)....................................... 61,945 *
All directors and executive officers
as a group (8 persons)(14)................................ 8,878,095 22.3%
</Table>
- ------------------------
* Less than 1%.
(1) Includes 560,500 shares issuable upon the exercise of outstanding options
and 500,000 shares held by the Richard S. Johnson 2001 Grantor Retained
Annuity Trust.
(2) Based solely on a review of Schedule 13G filings with the SEC. The address
of The TCW Group, Inc. is 865 South Figueroa Street, Los Angeles, CA 90017.
(3) Based solely on a review of Schedule 13G filings with the SEC. The address
of Capital Research and Management Company is 333 South Hope Street, Los
Angeles, CA 90071. Capital Research and Management Company, a registered
investment adviser, is deemed to be the beneficial owner
B-6
<Page>
of 2,350,000 shares as a result of acting as investment adviser to various
registered investment companies, including SMALLCAP World Fund, Inc. Capital
Research and Management Company disclaims beneficial ownership of these
shares.
(4) Based solely on a review of Schedule 13G filings with the SEC. The address
of SMALLCAP World Fund, Inc. is 333 South Hope Street, Los Angeles, CA
90071.
(5) Based solely on review of Schedule 13G filings with the SEC. Includes 60,000
shares issuable upon the exercise of outstanding options and 80,000 shares
owned by OTEC, of which Mr. Carroccio is the President, Chief Executive
Officer and sole stockholder. Mr. Carroccio's address is c/o OTEC, 24 West
40th Street, 12th Floor, New York, NY 10018.
(6) Based solely on a review of Schedule 13G filings with the SEC. The address
of Alpine Associates is 100 Union Avenue, Oreskill, NJ 07626. Alpine
Associates, which beneficially owns 1,750,300 shares, may be deemed to be
part of a group that also includes Alpine Partners, L.P. (beneficially owns
266,500 shares) and Palisades Partners, L.P. (beneficially owns 70,000
shares) by virtue of their having a common investment manager.
(7) Includes 106,750 shares issuable upon the exercise of outstanding options.
(8) Includes 156,875 shares issuable upon the exercise of outstanding options.
(9) Includes 13,659 shares held by Mr. Murray's IRA. Also includes 60,000 shares
issuable upon the exercise of outstanding options.
(10) Includes 1,621 shares beneficially owned by Mr. Hawkins' spouse who owned
these shares prior to the marriage, 60,000 shares issuable upon the exercise
of outstanding options and 5,971 shares held by retirement plans.
(11) Includes 53,333 shares issuable upon the exercise of outstanding options.
(12) Includes 65,000 shares issuable upon the exercise of outstanding options.
(13) Includes 60,000 shares issuable upon the exercise of outstanding options.
(14) Includes 1,122,458 shares issuable upon the exercise of outstanding
options. Also see other footnotes above.
BOARD OF DIRECTORS
The Board of Directors is divided into three classes with staggered terms.
At each annual meeting of stockholders, a class of directors will be elected for
a three-year term to succeed the directors of the same class whose terms are
then expiring. Biographical information on each director, including his age,
follows:
TERMS EXPIRING IN 2002
Philip Guarascio, 60, has served as a Director of HotJobs since
August 1999. Since May 2000, Mr. Guarascio has provided consulting services for
PGVentures LLC, a company that provides early stage funding and support to
innovative start-up companies. From July 1994 until May 2000, Mr. Guarascio was
a Vice President of General Motors Corporation where he was primarily
responsible for worldwide advertising resource management and managing
consolidated media placement efforts. From July 1992 to July 1994,
Mr. Guarascio served as General Manager of Marketing and Advertising for General
Motors' North American Operations. Mr. Guarascio joined General Motors in 1985
after 21 years with the New York advertising agency, D'Arcy, Masius, Benton &
Bowles (formerly Benton &
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Bowles, Inc.). Mr. Guarascio currently serves on the board of directors of
Arbitron Inc., a media measurement company (NYSE: ARB) and he was named
non-executive Chairman of the Board of AdSpace Networks, a digital out-of-home
media company, in November 2001. Mr. Guarascio is Chairman Emeritus of the
Advertising Council and serves on the Executive Committee of that organization.
He also serves on the boards of the Association of National Advertisers, the
Women's Sports Foundation, the Ellis Island Restoration Commission and the
American Film Institute. Mr. Guarascio also serves as a consultant to the
National Football League.
Dimitri J. Boylan, 41, has served as our President and Chief Executive
Officer since June 2001. Prior to that time, he served as our acting President
and Chief Executive Officer from March 2001 until June 2001 and as our Chief
Operating Officer since March 1998. From February 1997 until March 1998,
Mr. Boylan served as our Vice President of Sales and Marketing. Mr. Boylan has
also served as a Director since May 1999. From October 1990 until October 1997,
Mr. Boylan served as the managing director of recruiting for OTEC, Inc., a New
York-based recruiting firm focusing on IT professionals ("OTEC"). Mr. Boylan
received his bachelor's degree from the University of Pennsylvania and earned a
Masters degree from the University of Illinois.
Richard S. Johnson, 40, founded HotJobs in February 1997 and has served as
Chairman of the Board since inception. From February 1997 until February 2001,
Mr. Johnson served as our President and Chief Executive Officer. From 1988 to
1997, Mr. Johnson served as President of OTEC. Mr. Johnson co-founded OTEC in
1988 and, until March 8, 2000, was one of its directors and principal
stockholders. Mr. Johnson received his bachelor's degree from Bucknell
University. Mr. Johnson is a member of New York's New Media Association.
TERMS EXPIRING IN 2003
John G. Murray, 39, has served as a Director of HotJobs since May 1999.
Since June 1998, Mr. Murray has been a Managing Director of Deutsche Bank
Securities Inc., formerly BT Alex. Brown Incorporated, specializing in the
venture capital service sector. From January 1994 to June 1998, Mr. Murray
served as a principal of BancBoston Robertson Stephens, specializing in the
venture capital service sector. Mr. Murray received his bachelor's degree from
St. Lawrence University and his Masters of Business Administration from The
Wharton School of Finance.
Kevin P. Ryan, 38, has served as a Director of HotJobs since June 1999.
Mr. Ryan has served as Chief Executive Officer and a director of
DoubleClick Inc. (NASDAQ: DCLK) since July 2000. Mr. Ryan served as
DoubleClick's Chief Operating Officer from April 1998 until July 2000 and as
President from July 1997 until July 2000. From June 1996 to March 1998,
Mr. Ryan served as DoubleClick's Chief Financial Officer. From January 1994 to
June 1996, Mr. Ryan served as Senior Vice President of Business and Finance of
United Media, a licensing and syndication company. From April 1991 to
December 1993, Mr. Ryan served as Senior Manager, Finance for EuroDisney, and
from August 1985 to September 1989, Mr. Ryan was an investment banker for
Prudential Investment Corporation in both the United States and the United
Kingdom. Mr. Ryan received his bachelor's degree from Yale University and his
Masters of Business Administration from INSEAD.
TERMS EXPIRING IN 2004
John A. Hawkins, 41, has served as a Director of HotJobs since May 1999. In
1995, Mr. Hawkins co-founded Generation Partners L.P., a private equity fund.
From 1987 until 1995, Mr. Hawkins was a General Partner of Burr, Egan,
Deleage & Co., a $700 million venture capital firm. Mr. Hawkins specializes in
information technology investments including data communications and
telecommunications, software and the Internet. Mr. Hawkins graduated with a
bachelor's degree from Harvard College and received his Masters of Business
Administration from the Harvard Graduate
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School of Business. Mr. Hawkins currently serves on the boards of P-COM, Inc.
(NASDAQ: PCMS), PixTech (NASDAQ: PIXT), DiscoverMusic.com (formerly Enso Audio
Imaging Corporation), Driveway.com, High End Systems, Inc., OrderFusion
(formerly Dover Pacific Computing, Inc.) and Linguateq, Inc.
Robert H. McNabb, age 54, has served as a Director of HotJobs since
October 2000. Since December 2001, Mr. McNabb has served as Americas and
Asia/Pacific President of Futurestep, the middle management online recruitment
arm of Korn/Ferry International (NYSE: KFY). Prior to that time, Mr. McNabb has
been the President and Chief Executive Officer of CORESTAFF Services from
April 1998 to May 2001. He previously served as President and Chief Operating
Officer of Republic Industries' Replacement Rental Car Business from April 1997
to October 1997 and as Senior Vice President and general manager of Kelly
Services, Inc. from September 1994 to March 1997. Mr. McNabb served as President
of the central division of Talent Tree from October 1991 to June 1993 and was
self-employed from July 1993 to August 1994 and from November 1997 to
March 1998.
DIRECTOR COMPENSATION
Cash Compensation. Directors who are also our employees do not receive
additional compensation for serving as Directors. Until February 2001,
non-employee Directors did not receive a fee for attending meetings of the Board
or committee meetings, but were reimbursed for expenses incurred in connection
with performing their respective duties. Effective March 1, 2001, our
non-employee Directors are entitled to receive $3,000 per Board meeting for
in-person attendance and $1,500 per Board meeting for attendance via conference
call. In addition, our non-employee Directors are entitled to receive $1,000 per
committee meeting for in-person attendance and $500 per committee meeting for
attendance via conference call. If we achieve profitability, Directors will be
entitled to receive an annual cash retainer of $10,000.
Stock Option Grant. Under the Automatic Option Grant Program under our 1999
Stock Option/ Stock Issuance Plan, each individual who was first elected or
appointed to serve as a non-employee member of the Board after August 10, 1999
and prior to March 1, 2001 was automatically granted a non-statutory option to
purchase 20,000 shares of our common stock. Effective March 1, 2001, each
individual who is first elected or appointed to serve as a non-employee member
of the Board other than the Yahoo! Designees will automatically be granted a
non-statutory option to purchase 40,000 shares of our common stock. In addition,
on the date of each annual meeting of stockholders, each non-employee Director
who is to continue to serve as a member of the Board, whether or not that
individual is standing for re-election to the Board of Directors at that
particular annual meeting of stockholders, is automatically granted a
non-statutory option to purchase shares of our common stock, provided such
individual has served as a non-employee member of the Board for at least six
months. Prior to March 1, 2001, this option grant was for 5,000 shares of our
common stock. This grant was increased to 10,000 shares of our common stock
effective March 1, 2001.
Each automatic grant has a term of 10 years, subject to earlier termination
following the optionee's cessation of service on the Board. Each automatic
option is immediately exercisable; however, any shares purchased upon exercise
of the option will be subject to repurchase by HotJobs should the optionee's
service as a non-employee Director cease prior to the lapse of such repurchase
rights. The initial grant vests in successive equal annual installments over
four years. Each additional grant vests upon the optionee's completion of one
year of service on the Board, as measured from the grant date. However, each
outstanding option will immediately vest upon (i) certain changes in the
ownership or control of HotJobs or (ii) the death or permanent disability of the
optionee while serving on the Board.
In addition, on February 28, 2001, each member of the Managing Committee of
the Board received an option to purchase 25,000 shares of our common stock, and
the Chairman of the Managing
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Committee received an option to purchase an additional 10,000 shares of our
common stock, each with an exercise price of $5.125. All of these options vested
on June 29, 2001 upon the appointment of Mr. Boylan as President and Chief
Executive Officer.
Each of Messrs. Guarascio, Hawkins, McNabb, Murray and Ryan received an
option grant on May 23, 2001 to purchase 10,000 shares of our common stock at an
exercise price of $5.97 per share. These options vest in full on the first
anniversary of the grant date.
2001 BOARD MEETINGS
During 2001, the Board of Directors held 22 meetings. During 2001, each
Director attended at least 75% of the total number of meetings of the Board
except for Mr. McNabb who recused himself from the final six meetings of the
year in light of his employment relationship with Korn/Ferry International
Futurestep, Inc. During 2001, the Compensation Committee held three meetings,
which were attended by all of the members of the committee. The Audit Committee
held two meetings during 2001, at which all of the members of the committee were
present. The Managing Committee held 10 meetings, and each member of the
Managing Committee attended at least 75% of those meetings.
BOARD COMMITTEES
Our Board of Directors has four committees: the Audit Committee, the
Compensation Committee, the Managing Committee and the Executive Search
Committee.
The members of our Audit Committee are Messrs. Guarascio, Hawkins and Ryan
(Chairman), all of whom are independent directors. Our Audit Committee selects
the independent auditors, reviews such auditors' independent status, consults
with such auditors and with management with regard to the adequacy of our
internal accounting controls and considers any non-audit functions to be
performed by the independent auditors.
The members of our Compensation Committee are Messrs. Hawkins, Murray
(Chairman) and Ryan. The Compensation Committee is responsible for reviewing and
approving all compensation arrangements for our executive officers and for
overseeing our stock option and stock purchase plans.
Our Managing Committee was created on February 28, 2001. The members of our
Managing Committee are Messrs. Guarascio, Hawkins, McNabb (Chairman), Murray and
Ryan. Our Managing Committee reviews the development and performance of our
senior executive officers.
Our Executive Search Committee was created on February 28, 2001. The members
of our Executive Search Committee are Messrs. Johnson, McNabb and Ryan
(Chairman). Our Executive Search Committee assists in the selection of senior
executives for HotJobs.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Our Compensation Committee currently consists of Messrs. John A. Hawkins,
John G. Murray (Chairman) and Kevin P. Ryan. No interlocking relationship exists
or has existed between Messrs. Hawkins, Murray or Ryan or any other member of
our Board and any members of the board of directors or compensation committee of
any other company.
EXECUTIVE OFFICERS
In addition to Dimitri J. Boylan, who is a director, the name, age and
experience of the other executive officer of the Company is as follows.
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Lowell W. Robinson, 52, has served as our Chief Financial Officer since
May 2000. From 1997 until 1999, Mr. Robinson was Executive Vice President,
Global Business Services and Chief Financial Officer of PRT Group Inc. From 1994
until 1997, Mr. Robinson was Executive Vice President and Chief Financial
Officer at ADVO, Inc. Mr. Robinson spent eight years at Citigroup (1986-1993)
where he was Vice President and Chief Financial Officer for The Traveler's
Managed Care and Employee Benefits Operations from 1991 to 1993, the Chief
Financial Officer for Citicorp's Global Insurance and Capital Investments
Divisions from 1988 to 1991 and the Controller for Citicorp's Consumer Services
Group--International from 1986-1988. Prior to joining Citigroup, Mr. Robinson
was Director of Finance and Operations from 1983 to 1986 for Uncle Ben's Inc.,
the domestic and international rice subsidiary of Mars, Inc. From 1973 to 1983,
Mr. Robinson held senior financial positions at General Foods. Mr. Robinson
graduated with a bachelor's degree from the University of Wisconsin and received
his Masters of Business Administration from the Harvard Graduate School of
Business.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our officers, directors and
persons who own more than 10% of our common stock to file reports of ownership
on Form 3 and changes in ownership on Form 4 or 5 with the Commission and the
Nasdaq Stock Market, Inc. Such officers, directors and 10% holders are also
required by the Commission to furnish HotJobs with copies of all Section 16(a)
forms that they file.
Based solely on our review of copies of such reports received or written
representations from certain reporting persons, we believe that all
Section 16(a) filing requirements applicable to our officers, directors and 10%
stockholders were complied with during the fiscal year ended December 31, 2001.
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EXECUTIVE COMPENSATION
COMPENSATION OF NAMED EXECUTIVE OFFICERS
The following table shows information concerning the compensation paid for
services rendered in all capacities to the Company and its subsidiaries for
1999, 2000 and 2001 for Named Executive Officers. The compensation described in
this table was paid by the Company.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
ANNUAL LONG-TERM
COMPENSATION(1) COMPENSATION
------------------- -------------
NUMBER OF ALL OTHER
SALARY BONUS STOCK OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) GRANTED (#) ($)
- --------------------------- -------- -------- -------- ------------- ------------
Dimitri J. Boylan(2).......................... 2001 $315,385 $325,000 150,000 --
President and Chief Executive Officer 2000 $212,981 $150,000 500 --
1999 $141,587 $100,000 270,000 --
Richard S. Johnson(2)......................... 2001 $ 90,385 -- 50,000 $324,231
Non-Executive Chairman of the Board 2000 $236,539 $200,000 500 --
1999 $201,923 $125,000 510,000 --
Lowell W. Robinson(3)......................... 2001 $250,000 -- 50,000 --
Chief Financial Officer 2000 $153,846 $125,000 330,000 --
George J. Nassef, Jr.(4)...................... 2001 $126,923 -- 50,000 $125,000
Chief Information Officer 2000 $212,962 $125,000 500 --
1999 $ 84,135 $ 75,000 350,000 --
</Table>
- ------------------------
(1) In accordance with the rules of the Commission, other compensation in the
form of perquisites and other personal benefits has been omitted for each of
the Named Executive Officers because the aggregate amount of such
perquisites and other personal benefits constituted less than the lesser of
$50,000 or 10% of the total of annual salary and bonuses for each of such
Named Executive Officers in 2001.
(2) On March 1, 2001, Mr. Boylan was appointed our acting President and Chief
Executive Officer and on June 29, 2001, Mr. Boylan was appointed President
and Chief Executive Officer. Effective as of March 1, 2001, Mr. Johnson
ceased to be our President and Chief Executive Officer but remains as our
Non-Executive Chairman of the Board. All Other Compensation is comprised of
$324,231, which represents the severance payment to which Mr. Johnson was
entitled under his employment agreement, as well as the payment by HotJobs
of $11,282 in health and welfare benefits on behalf of Mr. Johnson and his
family.
(3) Mr. Robinson joined HotJobs in May 2000.
(4) Mr. Nassef joined HotJobs in June 1999 and his employment with the Company
ceased on June 19, 2001. The $125,000 payment represents the severance
payment to which Mr. Nassef was entitled under his employment agreement.
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GRANTS OF OPTIONS
The following table provides information related to stock options granted to
the Named Executive Officers during the fiscal year ended December 31, 2001.
OPTION GRANTS IN 2001
<Table>
<Caption>
INDIVIDUAL GRANTS(1)
----------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM(6)
OPTIONS IN PRICE EXPIRATION ---------------------
NAME GRANTED 2001(4) ($/SHARE)(5) DATE 5% 10%
- ---- ---------- ---------- ------------ ---------- --------- ---------
Dimitri J. Boylan.................... 50,000 2.4% $10.375 2/2/2011 $326,239 $826,754
100,000 4.8% $ 3.44 4/16/2011 $216,340 $548,248
Richard S. Johnson (2)............... 50,000 2.4% $10.375 2/2/2011 $326,239 $826,754
Lowell W. Robinson................... 50,000 2.4% $10.375 2/2/2011 $326,239 $826,754
George J. Nassef, Jr. (3)............ 50,000 2.4% $10.375 2/2/2011 $326,239 $826,754
</Table>
- ------------------------
(1) Each option represents the right to purchase one share of HotJobs common
stock. To the extent not already exercisable, certain of these options may
become exercisable in the event of certain mergers in which HotJobs is not
the surviving corporation, upon the sale of substantially all of HotJobs'
assets, upon the acquisition of beneficial ownership of more than 50% of
HotJobs outstanding voting securities, a sale of more than 50% of HotJobs'
outstanding stock by stockholders pursuant to a tender or exchange offer or
if HotJobs otherwise undergoes a change in control.
(2) Pursuant to Mr. Johnson's employment agreement, this option became vested
and exercisable in full for the remainder of the term upon Mr. Johnson's
resignation as the Company's President and Chief Executive Officer.
(3) Mr. Nassef forfeited this option in connection with his departure from the
Company.
(4) During 2001, HotJobs granted options to purchase an aggregate of
approximately 2,100,750 shares of common stock to its employees.
(5) All options were granted at the fair market value of the HotJobs common
stock on the date of grant.
(6) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 5% and
10% assumed annual rates of compounded stock price appreciation are mandated
by rules of the Commission and do not represent our estimate or projection
of our future common stock prices. These amounts represent certain assumed
rates of appreciation in the value of our common stock from the fair market
value on the date of grant. Actual gains, if any, on stock option exercises
are dependent on the future performance of the common stock and overall
stock market conditions. The amounts reflected in the table may not
necessarily be achieved.
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AGGREGATED OPTION EXERCISES IN 2001 AND YEAR-END OPTION VALUES
<Table>
<Caption>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISABLE IN-THE MONEY OPTIONS
OPTION AT DECEMBER 31, AT DECEMBER 31,
SHARES 2001 2001(1)
ACQUIRED ON VALUE -------------------------- ---------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISED EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------ ----------- ----------- ----------- -------------
Dimitri J. Boylan............. -- -- 88,000 212,500 $ 209,976 $695,750
Richard S. Johnson............ -- -- 560,500 -- $3,562,493 --
George J. Nassef, Jr.......... 156,250 $598,116 -- -- -- --
Lowell W. Robinson............ -- -- 130,625 249,375 $ 295,866 $452,334
</Table>
- ------------------------
(1) These values have been calculated on the basis of the market price on
December 31, 2001 of $10.39 per share, less the applicable exercise price
per share, multiplied by the number of shares underlying such options.
AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS FOR
NAMED EXECUTIVE OFFICERS
The following Named Executive Officers have an agreement with HotJobs.
Mr. Boylan's employment agreement became effective on May 6, 1999 and
expires on May 5, 2003 and will automatically renew for additional one-year
terms after that date unless HotJobs gives to Mr. Boylan written notice of its
desire not to renew the agreement at least six months prior to the expiration of
the initial or any additional term. Effective January 1, 2001, Mr. Boylan's base
salary increased to $275,000 per year and on March 1, 2001, Mr. Boylan's base
salary increased to $325,000 per year.
Mr. Johnson's employment agreement became effective on May 6, 1999 and
terminated upon his resignation as President and Chief Executive Officer.
Mr. Nassef's employment agreement became effective on June 18, 1999 and
terminated when his employment with the Company ceased on June 19, 2001.
Mr. Robinson's employment agreement became effective on May 8, 2000 and
expires on May 8, 2003 and will automatically renew for additional one-year
terms after that date unless HotJobs gives Mr. Robinson written notice of its
desire not to renew the agreement at least six months prior to the expiration of
the term. Under the terms of Mr. Robinson's employment agreement, he is paid a
base salary of $250,000 per year.
TERMINATION OF EMPLOYMENT. HotJobs may terminate the employment agreements
with each of Messrs. Boylan and Robinson with or without cause by delivering
written notice to the executive officer. Each executive officer may terminate
his employment with or without good reason by delivering written notice to
HotJobs. Upon termination of the employment of Mr. Boylan by HotJobs without
cause or by the executive for good reason, Mr. Boylan is entitled to the greater
of his annual salary for the remainder of the term of the employment agreement
or one year of salary, and all stock options granted to him become immediately
exercisable for the remainder of their original term. Upon termination of the
employment of Mr. Robinson by HotJobs without cause or by Mr. Robinson for good
reason, Mr. Robinson is entitled to one year of base salary, and the stock
option granted to him on May 8, 2001 becomes immediately exercisable for the
remainder of its original term.
NONCOMPETITION AND CONFIDENTIALITY. Each of Messrs. Boylan, Nassef and
Robinson has agreed not to compete with HotJobs, solicit our suppliers or
employees or reveal our confidential information during the term of his
employment agreement and for two years thereafter. Mr. Johnson has agreed
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that without the prior written consent of HotJobs, prior to February 23, 2003 he
will not (i) solicit our suppliers or business partners; (ii) reveal our
confidential information; or (iii) solicit our employees. Mr. Johnson has also
agreed that until the earlier of February 28, 2003 or one year following the
date on which he ceases to serve as the Chairman of the Board, he will not
compete with HotJobs without our prior written consent. This non-competition
covenant will expire sooner if, beginning as of May 1, 2002, the Company fails
to meet the minimum financial qualifications to maintain its stock's listing on
the Nasdaq Stock Market or the Company's stock is no longer listed on the Nasdaq
Stock Market. In addition, each Named Executive Officer is bound by a
proprietary inventions agreement that prohibits the Named Executive Officer
from, among other things, disseminating or using confidential information about
our business or clients in any way that would be adverse to HotJobs.
CHANGE-IN-CONTROL ARRANGEMENTS. Each of Messrs. Boylan and Robinson have
the right to terminate their employment following a change in control upon
30 days written notice, so long as the notice is provided within 90 days of the
date the executive became aware that a change in control event had occurred.
Upon termination by Mr. Boylan of his employment in connection with a change in
control, Mr. Boylan is entitled to the greater of his annual salary for the
remainder of the term of the employment agreement or one year of salary, and all
stock options granted to him become immediately exercisable for the remainder of
their original terms. Upon termination by Mr. Robinson of his employment in
connection with a change in control, Mr. Robinson is entitled to two years of
base salary, and all stock options granted to him become immediately exercisable
for the remainder of their original terms. The employment agreement with each of
Messrs. Boylan and Robinson provides that the executive is entitled to receive a
payment in an amount sufficient to make the executive whole for any excise tax
on excess parachute payments, under the severance agreements or otherwise,
imposed under Section 4999 of the Internal Revenue Code.
TRANSACTIONS WITH RELATED PARTIES
The following is a summary of significant transactions and relationships
among the Company and its directors, executive officers and significant
stockholders with respect to fiscal 2001.
AGREEMENTS WITH DOUBLECLICK
In April 1999, HotJobs entered into a Softshoe-Registered Trademark-
Standard License Agreement with DoubleClick, which was amended on December 15,
1999 in connection with a service upgrade. In addition, DoubleClick is a member
of HotJobs.com. In 2001, we billed DoubleClick approximately $128,686 for
services provided by HotJobs to DoubleClick. We also have an agreement with
DoubleClick pursuant to which we use DoubleClick's DART Service to target and
measure our advertisements on Web pages, and an agreement pursuant to which
DoubleClick places our advertising banners on the Web pages of other companies.
In connection with these agreements, we pay monthly service fees based on the
number of ad impressions delivered pursuant to each agreement. In 2001, we paid
to DoubleClick approximately $659,330 under these agreements. We believe that
these agreements were entered into on an arms-length basis. Kevin P. Ryan, one
of our Directors, is the Chief Executive Officer of DoubleClick.
AGREEMENT WITH RICHARD JOHNSON
Effective March 1, 2001, Mr. Johnson resigned his employment with HotJobs.
Under the employment agreement entered into between Mr. Johnson and HotJobs
dated May 6, 1999, Mr. Johnson received a severance payment of approximately
$325,000, all outstanding options granted to him became immediately vested and
HotJobs agreed to provide health and welfare benefits to Mr. Johnson and his
family through February 28, 2002.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board advises the Board on matters of
HotJobs' compensation philosophy and the compensation of executive officers and
other employees. The Compensation Committee is also responsible for the
administration of our stock option plans under which option grants and direct
stock issuances may be made to executive officers. The Compensation Committee
meets at least once per year to review management performance and compensation
and to recommend to the Board bonuses and option grants for current personnel.
The Compensation Committee also meets periodically to approve and ratify option
grants. The Compensation Committee has reviewed and is in accord with the
compensation paid to executive officers in 2001.
GENERAL COMPENSATION PHILOSOPHY
The fundamental philosophy of the Compensation Committee is to provide our
executive officers with competitive compensation opportunities based upon their
performance and their contribution to the development and financial success of
HotJobs. Accordingly, the compensation package for each executive officer is
comprised of at least one of three key elements: (i) base salary, (ii) an annual
incentive cash bonus and (iii) long-term incentive stock options that strengthen
the mutuality of interests between the executive officers and our stockholders.
The Compensation Committee believes that this philosophy is appropriate.
FACTORS
The principal factors considered by the Compensation Committee for each
executive officer's compensation package for fiscal year 2001 are summarized
below. The Compensation Committee may, however, in its discretion apply entirely
different factors in advising the Board with respect to executive compensation
for future years.
BASE SALARY
The suggested base salary for each executive officer is based upon the
salaries of comparable executive officers that were obtained from various
sources, including the 2000 American Compensation Association survey and
executive compensation and performance data for a select group of comparable
companies based on annual revenues and industry. The Compensation Committee
approved an increase in the base salaries of each of Messrs. Johnson and Boylan
effective January 1, 2001, and Mr. Boylan received an additional increase in
base salary effective March 1, 2001 in connection with being named Acting
President and Chief Executive Officer.
ANNUAL INCENTIVE CASH BONUS
In addition to base salaries, executive officers of HotJobs are eligible to
receive annual cash bonuses, at the discretion of the Board. Cash bonuses are
determined on the basis of (a) the overall financial performance of HotJobs and
(b) annual personal performance objectives.
LONG-TERM INCENTIVE STOCK OPTIONS
Option grants are designed to align the interests of each executive officer
with those of the stockholders and provide each individual with a significant
incentive to manage HotJobs from the perspective of an owner with an equity
stake. Each option generally becomes exercisable in installments over a
four-year period, with a quarter of the options vesting on the first anniversary
of the grant date and the balance vesting in 36 successive equal monthly
installments upon completion of each additional month of service over the
36-month period measured from the first anniversary of the grant date.
Accordingly, the option grant will provide an economic benefit to the executive
officer only if the option becomes vested, and then only if the market price of
the underlying shares appreciates.
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The number of shares subject to each option grant is set at a level intended
to create a meaningful opportunity for stock ownership based on the executive
officer's current position, the base salary associated with that position, the
size of comparable awards made to individuals in similar positions within the
industry and the individual's personal performance in recent periods. The
Compensation Committee also considers the number of unvested options held by the
executive officer in order to maintain an appropriate level of equity incentive
for that individual. However, the Compensation Committee does not adhere to any
specific guidelines as to the relative option holdings of our executive
officers. Stock options to purchase an aggregate of 300,000 shares of common
stock were granted to executive officers in 2001, of which options to purchase
an aggregate of 200,000 shares of common stock were granted to executive
officers on February 2, 2001 as part of their annual bonus in respect of their
service for the fiscal year ended December 31, 2000.
CEO COMPENSATION
The plans and policies discussed above were the basis for determining the
compensation of our former Chief Executive Officer, Mr. Richard S. Johnson and
our current Chief Executive Officer, Mr. Boylan, for their respective tenures
during fiscal year 2001. In advising the Board with respect to this
compensation, the Compensation Committee seeks to achieve two objectives:
(i) establish a level of base salary competitive with that paid by companies
within the industry which are of comparable size to HotJobs and by companies
outside of the industry with which HotJobs competes for executive talent and
(ii) make a percentage of the total compensation package contingent upon
HotJobs' performance and stock price appreciation. In accordance with these
objectives, Mr. Johnson received a base salary of $90,385 related to his tenure
as Chief Executive Officer for the period from January 1, 2001 through
February 28, 2001. In addition, a stock option to purchase 50,000 shares of
common stock was granted to Mr. Johnson on February 2, 2001 as part of his bonus
for fiscal year 2000. All unvested options held by Mr. Johnson became
exercisable in full for the remainder of their respective terms in connection
with his resignation. In addition, for service for fiscal year 2001, Mr. Boylan
received a base salary and cash bonus of $315,385 and $325,000, respectively. In
addition, a stock option to purchase 50,000 shares of common stock was granted
to Mr. Boylan on February 2, 2001 as part of his bonus for fiscal year 2000 and
a stock option to purchase 100,000 shares of common stock was granted to
Mr. Boylan on April 16, 2001 in connection with his elevation to acting
President and Chief Executive Officer.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
As a result of Section 162(m) of the Internal Revenue Code of 1986, as
amended, which was enacted into law in 1993, HotJobs will not be allowed a
federal income tax deduction for compensation paid to certain executive
officers, to the extent that compensation exceeds $1 million per officer in any
one year. This limitation will apply to all compensation paid to the covered
executive officers that is not considered to be performance based. Compensation
that does qualify as performance-based compensation will not have to be taken
into account for purposes of this limitation. The 1999 Stock Option/Stock
Issuance Plan contains certain provisions that are intended to assure that any
compensation deemed paid in connection with the exercise of stock options
granted under that plan with an exercise price equal to the market price of the
option shares on the grant date will qualify as performance-based compensation.
Non-performance based compensation paid to our executive officers for the
2001 fiscal year did not exceed the $1 million limit per officer, and the
Compensation Committee does not expect that the compensation to be paid to our
executive officers for the 2002 fiscal year will exceed the $1 million limit per
officer.
B-17
<Page>
PERFORMANCE GRAPH
Set forth below is a graph comparing the percentage change in HotJobs'
cumulative total stockholder return on its common stock from August 10, 1999
(the date public trading of our common stock commenced) to December 31, 2001 (as
measured by dividing (i) the excess of the price of our common stock at the end
of the measurement period over the price at the beginning of the measurement
period by (ii) the share price at the beginning of the measurement period) with
the cumulative total return so calculated of the Nasdaq Stock Market (U.S.)
Index, the S&P 500 Index and a self-constructed peer group index. The historical
stock price performance is not necessarily indicative of future results.
COMPARISON OF THE CUMULATIVE TOTAL RETURN, AMONG HOTJOBS, THE NASDAQ STOCK
MARKET (U.S.) INDEX, THE S&P 500 INDEX AND A PEER GROUP*
The following graph compares the performance of HotJobs' common stock with
the performance of the Nasdaq Stock Market (U.S.) Index, the S&P 500 index and a
peer group index over the period beginning August 10, 1999 through December 31,
2001. The graph assumes that $100 was invested on August 10, 1999 in HotJobs'
common stock, the Nasdaq Stock Market (U.S.) Index, the S&P 500 Index and the
peer group index, and that all dividends were reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Dollars
<Table>
<Caption>
AUG-99 1999 2000 2001
HotJobs.com, Ltd. $100.00 $546.10 $142.97 $129.88
S & P 500 $100.00 $111.18 $101.06 $89.05
NASDAQ US $100.00 $148.00 $89.05 $70.38
Peer Group $100.00 $142.47 $114.40 $105.08
</Table>
- ------------------------
* The peer group consists of the following companies: (i) Dice Inc.,
(ii) Knight-Ridder, Inc., (iii) TMP Worldwide, Inc. and (iv) Tribune
Company.
B-18
<Page>
Exhibit (a)(2)
[LOGO OF HOTJOBS.COM]
January 11, 2002
Dear Stockholder:
I am pleased to inform you that HotJobs.com, Ltd. ("HOTJOBS") has entered
into a merger agreement with Yahoo! Inc. ("YAHOO!"), pursuant to which a
wholly-owned subsidiary of Yahoo! has commenced an offer to exchange for each
outstanding share of HotJobs common stock (a) a fraction of a share of Yahoo!
common stock equal to the Exchange Ratio (as defined in the attached
Schedule 14D-9), subject to the limitations and conditions described therein,
and (b) cash in an amount equal to $10.50 minus an amount equal to the product
of (x) the Exchange Ratio multiplied by (y) the Yahoo! Market Price (as defined
in the attached Schedule 14D-9), without interest. The exchange offer is
conditioned upon, among other things, a majority of HotJobs' shares outstanding
on a Fully Diluted Basis (as defined in the attached Schedule 14D-9) being
tendered and not withdrawn and the receipt of regulatory approvals. The exchange
offer will be followed by a merger, in which each share of HotJobs' common stock
not purchased in the exchange offer will be converted into the right to receive
the same consideration paid in the exchange offer.
Your Board of Directors has approved and adopted that the merger agreement
and the transactions contemplated by it, including the Yahoo! offer and the
merger and has determined that Yahoo!'s offer and the merger are advisable and
in the best interests of HotJobs' stockholders, and recommends that HotJobs'
stockholders accept the Yahoo! offer and tender their shares of HotJobs common
stock pursuant to the offer.
In arriving at its recommendation, the Board of Directors considered a
number of factors, as described in the attached Schedule 14D-9, including the
advice of HotJobs' investment banker, Lazard Freres & Co. LLC, which has
delivered a written opinion dated as of December 27, 2001 to the effect that, as
of such date, the consideration to be received by the holders of HotJobs common
stock in the offer and the merger is fair from a financial point of view to such
holders. A copy of Lazard's written opinion, which sets forth the assumptions
made, procedures followed and matters considered by Lazard in rendering its
opinion, can be found in Annex A attached to the Schedule 14D-9. You should read
the opinion carefully and in its entirety.
Enclosed are Yahoo!'s prospectus, dated January 11, 2002, the Letter of
Transmittal and related documents. These documents set forth the terms and
conditions of the exchange offer and provide information on how to tender your
HotJobs shares to Yahoo!. The Schedule 14D-9 describes in more detail the
reasons for your Board's conclusions and contains other information relating to
the exchange offer. We urge you to consider this information carefully.
/s/ Dimitri J. Boylan
Dimitri J. Boylan
President and Chief Executive Officer