-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KO44v/i7PSihzGJsQ+FMSgreyXQUzzQWa6fBA7Xa1JxZBjdjE7bhm6Hyha7nBqko SeQu9xXMn8+AGJP+ANDPvg== 0000902664-08-000019.txt : 20080107 0000902664-08-000019.hdr.sgml : 20080107 20080107091504 ACCESSION NUMBER: 0000902664-08-000019 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20080107 DATE AS OF CHANGE: 20080107 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CNET NETWORKS INC CENTRAL INDEX KEY: 0001015577 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 133696170 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-46767 FILM NUMBER: 08513826 BUSINESS ADDRESS: STREET 1: 235 SECOND STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 4153442000 MAIL ADDRESS: STREET 1: 235 SECOND STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 FORMER COMPANY: FORMER CONFORMED NAME: CNET INC /DE DATE OF NAME CHANGE: 19970506 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: JANA PARTNERS LLC CENTRAL INDEX KEY: 0001159159 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: JANA PARTNERS LLC STREET 2: 200 PARK AVENUE, SUITE 3300 CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2126927645 MAIL ADDRESS: STREET 1: 200 PARK AVENUE, SUITE 3300 CITY: NEW YORK STATE: NY ZIP: 10166 SC 13D 1 p07-1802sc13d.txt JANA PARTNERS - CNET NETWORKS, INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- SCHEDULE 13D* (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Under the Securities Exchange Act of 1934 (Amendment No. ) CNET Networks, Inc. ------------------------------------------------------------------------------ (Name of Issuer) Common Stock, par value $0.0001 per share ------------------------------------------------------------------------------ (Title of Class of Securities) 12613R104 ------------------------------------------------------------------------------ (CUSIP Number) Marc Weingarten, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 26, 2007 ------------------------------------------------------------------------------ (Date of Event which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 OF 16 Pages) - -------------------------- The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes) - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 2 OF 16 PAGES - ------------------------------- ----------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) JANA PARTNERS LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 8,586,995 ------------------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 3,713,178 OWNED BY ---------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 8,586,995 ---------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,713,178 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 12,300,173 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IA - -------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 3 OF 16 PAGES - ------------------------------- ----------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SPARK MANAGEMENT PARTNERS, L.L.C. - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER - 0 - --------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 2,583,979 OWNED BY --------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH - 0 - --------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,583,979 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 2,583,979 - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.7% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 4 OF 16 PAGES - ------------------------------- ----------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) VELOCITY INTERACTIVE MANAGEMENT, LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER - 0 - --------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 1,000,000 OWNED BY --------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH - 0 - --------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 1,000,000 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,000,000 - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 5 OF 16 PAGES - ------------------------------- ----------------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) ALEX INTERACTIVE MEDIA, LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER -0- --------------------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 129,199 OWNED BY --------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH -0- --------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 129,199 - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 129,199 - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) less than 0.1% - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ------------------------------------------------------------------------------- * SEE INSTRUCTIONS BEFORE FILLING OUT! - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 6 OF 16 PAGES - ------------------------------- ----------------------- Item 1. Security and Issuer. This statement on Schedule 13D relates to the shares ("Shares") of common stock, par value $0.0001 per share, of CNET Networks, Inc. (the "Issuer"). The principal executive office of the Issuer is located at 235 Second Street, San Francisco, CA 94105. Item 2. Identity and Background. (a) This statement is filed by: (i) JANA Partners LLC, a Delaware limited liability company ("JANA"), with respect to the Shares beneficially owned by it. JANA is a private money management firm which holds Shares in various accounts under its management and control. The principals of JANA are Barry Rosenstein and Gary Claar (the "JANA Principals"); (ii) Spark Management Partners, L.L.C., a Delaware limited liability company ("Spark"), with respect to the Shares beneficially owned by it. Spark is the general partner of Spark Capital, L.P., a venture capital fund (the "Spark Fund"). The Spark Fund is the managing member of CT-100 Holdings, LLC, a Delaware limited liability company ("CT-100"), which holds the Shares beneficially owned by Spark. The principals of Spark are Todd Dagres, Santo Politi, Dennis Miller, Paul Conway and Bijan Sabet (the "Spark Principals"); (iii) Velocity Interactive Management, LLC, a Delaware limited liability company ("Velocity"), with respect to the Shares beneficially owned by it. Velocity is a private money management firm. The principals of Velocity are Jonathan Miller, David Britts, Ross Levinsohn, Keyur Patel and Roland Van der Meer (the "Velocity Principals"); and (iv) Alex Interactive Media, LLC, a Delaware limited liability company ("AIM"), with respect to the Shares beneficially owned by it. AIM is a private investment company. The principal of AIM is Paul Gardi ("Gardi"); (b) The principal business address of JANA, Spark, Velocity, and AIM (collectively, the "Reporting Persons") and the JANA Principals, the Spark Principals, the Velocity Principals and Gardi is: (i) JANA and the JANA Principals: 200 Park Avenue, Suite 3300, New York, NY 10166; (ii) Spark and the Spark Principals: 137 Newbury Street, 8th Floor, Boston, MA 02116; (iii) Velocity and the Velocity Principals: 305 Lytton Avenue, Palo Alto, CA 94301; and (iv) AIM and Gardi: Carnegie Hall Tower, 152 West 57th Street, Floor 26, New York, NY 10019; (c) The principal business of each of the Reporting Persons is below: (i) The principal business of JANA and the JANA Principals is investing for accounts under their management. (ii) The principal business of Spark and the Spark Principals is the making and management of venture capital investments. - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 7 OF 16 PAGES - ------------------------------- ----------------------- (iii) The principal business of Velocity and the Velocity Principals is investing for accounts under their management. (iv) The principal business of AIM is leveraging its domain expertise in digital media and related industries. Gardi is a private investor. (d) None of the Reporting Persons, the JANA Principals, the Spark Principals, the Velocity Principals, or Gardi has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons, the JANA Principals, the Spark Principals, the Velocity Principals, or Gardi has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Each of the Reporting Persons is a limited liability company organized in Delaware. Gardi is a citizen of South Africa. Except as set forth in the next sentence, each of the JANA Principals, the Spark Principals and the Velocity Principals is a citizen of the United States of America. Roland Van der Meer is a citizen of the Netherlands. Item 3. Source and Amount of Funds or Other Consideration. The 12,300,173 Shares reported herein as being beneficially owned by JANA were acquired at an aggregate purchase price of approximately $105,233,662. The Shares beneficially owned by JANA were acquired with investment funds in accounts under management. The Shares which are reported herein as being beneficially owned by Spark are so reported based on CT-100's contractual obligation to purchase such shares from JANA, as described in Item 6 below, but such purchase has not yet been consummated. The amount of funds to be used to purchase such Shares will be $20 million and the source of such funds will be the working capital of CT-100. The Shares which are reported herein as being beneficially owned by AIM are so reported based on its contractual obligation to purchase such shares from JANA, as described in Item 6 below, but such purchase has not yet been consummated. The Shares which are reported herein as being beneficially owned by Velocity are so reported based on its option to purchase such Shares from JANA, as described in Item 6 below, but such option has not yet been exercised. The amount of funds to be used by AIM and Velocity (should Velocity exercise its option) to purchase such Shares will be $1 million and up to $10 million, respectively, and the source of such funds will be the working capital of each such party or an affiliate of such party. Item 4. Purpose of Transaction. JANA originally acquired Shares after representatives of JANA met in October, 2007 with Paul Gardi of AIM, who described what he believed to be operating issues at the Issuer and stated his belief that addressing such issues could result in a significant increase in the value of the Shares. Following subsequent meetings, Gardi introduced JANA's representatives to representatives of Spark in November, 2007 to discuss working together to propose to the Issuer how these operating issues could be addressed. On December 3, 2007, JANA, CT-100, AIM and Gardi entered into a letter agreement (the "Letter Agreement") setting forth certain terms and conditions of their investment in the Issuer. In December, 2007, representatives of Spark introduced representatives of JANA to representatives of Velocity to discuss the same matters. On December 23, 2007, JANA, CT-100, AIM, Gardi and Velocity entered into an amended and restated agreement (the "Amended and Restated Agreement") which amended and restated the terms of the Letter Agreement, in - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 8 OF 16 PAGES - ------------------------------- ----------------------- order to, among other things, add Velocity as a party. The terms of the Amended and Restated Agreement are described in Item 6 of this Schedule 13D. CT-100 and Gardi will acquire Shares from JANA pursuant to the terms and conditions of the Amended and Restated Agreement. In connection with becoming a party to the Amended and Restated Agreement, Velocity has entered into an Option Agreement (the "Option Agreement") with JANA granting it the option to acquire Shares from JANA. The terms of the Option Agreement are described in Item 6 of this Schedule 13D. Representatives of JANA held several calls with representatives of the Issuer throughout the month of October, 2007 as well as a call on November 1, 2007 with the Issuer's Chief Executive Officer, Neil Ashe. On December 6, 2007, Santo Politi of Spark met with Jarl Mohn, the Chairman of the Board of Directors of the Issuer (the "Board"), to inform him of the investment in the Shares by JANA, CT-100 and Gardi and to discuss proposals for improving the operating performance of the Issuer. Politi proposed a follow-up discussion with additional independent directors of the Issuer. In a subsequent conversation, Mr. Mohn informed Politi that any discussions with members of the Board would need to be coordinated by Ashe. In further communications with Ashe, it was communicated to Politi that a meeting with independent Board members would not be arranged, but rather the investors could meet with Ashe who would communicate later with the Board. On December 28, 2007, JANA delivered a notice (the "Notice") to the Issuer informing the Issuer of its intention (i) to propose two Class III nominees for election to the Board at the Issuer's 2008 Annual Meeting, (ii) to propose amendments to the Bylaws of the Issuer to (A) increase the size of the Board from eight directors to 13 directors, (B) delete a Bylaw provision providing that in case of any increase in the size of the Board in advance of an annual meeting of stockholders, additional directors shall be elected by the directors then in office, (C) delete a Bylaw provision providing that any newly created directorships resulting from an increase in the size of the Board shall be apportioned by the Board among the three classes of directors, and (D) add a Bylaw provision providing that any new directorship created as a result of an increase in the number of directors may be filled with a person elected by the stockholders, and (iii) to propose an additional five nominees for election to the Board to occupy the new directorships created by the adoption of the Bylaw amendments described in clause (ii) above. The Class III nominees are Paul Gardi and Santo Politi. The nominees for the new directorships created by the proposed Bylaw amendments described above are Jonathan Miller, Jaynie Studenmund, Julius Genachowski, Brian Weinstein and Giorgio Caputo. The Notice was accompanied by a letter from JANA (the "JANA Letter") to the Issuer in which JANA stated its view that certain provisions of the Issuer's Bylaws are either incorrectly interpreted by the Issuer and/or are either inapplicable or unenforceable under Delaware law. A copy of the JANA Letter is filed as Exhibit 1 to this Schedule 13D and is incorporated herein by reference. On January 7, 2008, JANA Master Fund, Ltd. (the "Plaintiff"), an affiliate of JANA, filed a Verified Complaint for Declaratory and Injunctive Relief in the Court of Chancery of the State of Delaware (the "Complaint"). The Complaint alleges that the Issuer is improperly attempting (i) to apply Article II, Section 3 of the Issuer's By-laws to prohibit the Plaintiff from submitting its proposals for stockholder approval at the Issuer's 2008 annual meeting and (ii) to apply Article III, Section 6 of the Issuer's By-laws to prohibit the Plaintiff from submitting its director candidates for election by the stockholders at such meeting. In the Complaint, Plaintiff seeks (i) a declaration that the Issuer's interpretation of Article II, Section 3, and Article III, Section 6 of the Issuer's By-laws (the "Disputed By-laws") is invalid as a matter of law and (ii) an order preliminarily and permanently - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 9 OF 16 PAGES - ------------------------------- ----------------------- enjoining the application of the Disputed By-laws to Plaintiff's nomination of individuals as candidates for director and to Plaintiff's proposals to be presented for stockholder approval at the Issuer's 2008 Annual Meeting. The Complaint also alleges that if the Disputed By-laws are interpreted in the manner the Issuer urges, such By-laws are invalid as a matter of law because, among other reasons, they (i) impermissibly limit the fundamental right of stockholders of the Issuer to propose and transact business and to nominate candidates for director election at an annual meeting, (ii) impermissibly treat holders of the same class of stock of the Issuer differently and unequally, and (iii) impose an unreasonable requirement on the stockholders of the Issuer that does not further a legitimate or proper purpose. In the Complaint, Plaintiff also seeks an order compelling the Issuer to produce certain requested stocklist materials pursuant to 8 Del. C. ss. 220. A copy of the Complaint is filed as Exhibit 2 to this Schedule 13D and is incorporated herein by reference. On January 7, 2008, JANA issued a press release (the "Press Release") announcing its intention to nominate seven people for election to the Board at the Issuer's 2008 Annual Meeting. A copy of the Press Release is filed as Exhibit 3 to this Schedule 13D and is incorporated herein by reference. Except as set forth herein or as would occur upon completion of any of the actions discussed herein, the Reporting Persons have no present plan or proposal that would relate to or result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D. The Reporting Persons intend to review their investments in the Issuer on a continuing basis and may engage in further discussions with management, the Board, other stockholders of the Issuer and other relevant parties concerning the business, operations, governance, management, strategy and future plans of the Issuer. Depending on various factors including, without limitation, the Issuer's financial position and strategic direction, the outcome of any discussions referenced above, actions taken by the Board, price levels of the Shares, other investment opportunities available to the Reporting Persons, conditions in the securities market and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investments in the Issuer as they deem appropriate including, without limitation, purchasing additional Shares or selling some or all of the Shares held by the Reporting Persons, engaging in short selling of or any hedging or similar transactions with respect to the Shares and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D. Item 5. Interest in Securities of the Company. (a) The aggregate percentage of Shares reported to be beneficially owned by the Reporting Persons is based upon 151,973,545 Shares outstanding, which is the total number of Shares outstanding as of October 31, 2007 as reported in the Issuer's Quarterly Report on Form 10-Q filed on November 5, 2007 for the period ended September 30, 2007. As of the close of business on January 4, 2008; (i) JANA may be deemed to beneficially own 12,300,173 Shares, constituting approximately 8.1% of the Shares outstanding, (ii) Spark may be deemed to beneficially own 2,583,979 Shares, constituting approximately 1.7% of the Shares outstanding, (iii) Velocity may be deemed to beneficially own 1,000,000 Shares, constituting approximately 0.7% of the Shares outstanding, and (iv) AIM may be deemed to beneficially own 129,199 Shares, constituting less than 0.1% of the Shares outstanding. Spark and AIM beneficially own their respective Shares by virtue of the Amended and Restated Agreement described in Item 6 below. Velocity beneficially owns its Shares by virtue of the Option Agreement described in Item 6 below. - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 10 OF 16 PAGES - ------------------------------- ----------------------- By virtue of the Amended and Restated Agreement and the Option Agreement, the Reporting Persons may be deemed to have formed a "group" within the meaning of Section 13(d)(3) of the Securities Act of 1934 and may be deemed to beneficially own 12,300,173 Shares, constituting approximately 8.1% of the Shares outstanding. However, each of the Reporting Persons expressly disclaims beneficial ownership of the Shares beneficially owned by the other Reporting Persons. (b) JANA has sole voting and dispositive powers over 8,586,995 Shares, which powers are exercised by the JANA Principals, and (i) by virtue of the Option Agreement, shared voting and dispositive power over 1,000,000 Shares, which power is shared with Velocity and (ii) by virtue of the Amended and Restated Agreement, shared voting and dispositive power over 129,199 Shares and 2,583,979 Shares, which power is shared with AIM and Spark, respectively. Spark shares voting and dispositive powers over the 2,583,979 Shares beneficially owned by it, but will have sole voting and dispositive powers over such Shares when such Shares are purchased by it from JANA pursuant to the Amended and Restated Agreement, which powers will be exercised by the Spark Principals. AIM shares voting and dispositive powers over the 129,199 Shares beneficially owned by it, and will continue to have shared voting and dispositive powers over such Shares, which powers will be exercised by Gardi and shared by JANA and CT-100, when such Shares are purchased by it through AIM's investment in the JANA SPV referred to in Item 6 below and in CT-100. By virtue of the Option Agreement, Velocity shares voting and dispositive power over the Shares beneficially owned by it with JANA. Velocity will have sole voting and dispositive power over any Shares purchased by it under the Option Agreement, as described in Item 6 below, which power will be exercised by the Velocity Principals. (c) Information concerning transactions in the Shares effected by the Reporting Persons during the past sixty days is set forth in Appendix A hereto and is incorporated herein by reference. (d) No person (other than the Reporting Persons) is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares. (e) Not applicable. Item 6. Contracts, Arrangements Understandings or Relationships with Respect to Securities of the Company Pursuant to the Amended and Restated Agreement, AIM, as Gardi's employer, and Gardi agreed to provide financial and operational advisory and consulting services to JANA and CT-100 in connection with existing or potential investments by JANA and CT-100 (and affiliated entities of both) in Shares. In return, Gardi is entitled to receive compensation consisting of (i) a consulting fee (the "Consulting Fee") equal to four quarterly payments of $25,000 (which Consulting Fee shall be refunded to the extent Gardi receives any payment directly from the Issuer or in respect of the Profit Participation (as defined below)) and (ii) 9% of the net profits of JANA, CT-100 and affiliated entities of both from investments in Shares (the "Profit Participation"). The Profit Participation is payable to Gardi only if the net profits of JANA and CT-100 (and affiliated entities of both) on their investment in Shares exceed an 8% internal rate of return. The Profit Participation will be paid to Gardi upon the realization of such net profits, or, if Shares to which the Profit Participation applies remain unsold on December 23, 2010, upon the request of Gardi at any time thereafter. Consulting fees or other compensation paid to any potential third party nominee to the Board will be deducted from the amount paid to Gardi, subject to certain caps, in respect of the Profit Participation. Under the Amended and Restated Agreement, CT-100 and Gardi have agreed to purchase $20 million and $1 million, - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 11 OF 16 PAGES - ------------------------------- ----------------------- respectively, of Shares from JANA. Gardi's purchase of Shares under the Amended and Restated Agreement will be made by AIM, as contemplated by the Amended and Restated Agreement, and it is expected that such Shares will be purchased through a capital contribution by AIM (i) to a Delaware limited liability company to be organized by JANA to hold Shares (the "JANA SPV") and (ii) to CT-100. Each purchaser of Shares under the Amended and Restated Agreement further agreed not to sell such Shares (or in the case of Velocity, any Shares acquired under the Option Agreement) until the earliest of (i) the disposition of all Shares owned by JANA (provided that if JANA sells less than all of the Shares owned by it, CT-100, Gardi and Velocity, respectively, may sell a pro rata portion of any Shares owned by them), (ii) the commencement of the Issuer's next annual meeting of shareholders, and (iii) the date that JANA notifies any other party that it has ceased to pursue any proposals to the Issuer regarding the conduct of its business. In addition, the Amended and Restated Agreement provides that all public statements, regulatory filings, contacts with management and related activities related to the Issuer will be made and conducted by JANA, following reasonable consultation with CT-100, AIM and, should it acquire Shares, Velocity, and further provides that the Profit Participation and all reasonable third party expenses related to any proxy contest shall be shared by JANA, CT-100 and should it acquire Shares, Velocity, pro rata to their investment in Shares. This description of the Amended and Restated Agreement is a summary only and is qualified by reference to the Amended and Restated Agreement, a copy of which is filed as Exhibit 4 to this Schedule 13D and is incorporated herein by reference. JANA and Velocity have entered into the Option Agreement, giving Velocity the option to purchase from JANA up to 1,000,000 Shares at $10.00 per Share for six months beginning December 21, 2007. This description of the Option Agreement is a summary only and is qualified by reference to the Option Agreement, a copy of which is filed as Exhibit 5 to this Schedule 13D and is incorporated herein by reference. Pursuant to an Agreement, dated January 4, 2008 (the "Sandell Group Agreement"), between JANA and Sandell Asset Management Corp. ("Sandell"), Sandell agreed not to sell any Shares purchased by funds, accounts or other affiliated entities ("Sandell Funds") until the earliest of (i) the disposition of all Shares owned by JANA (provided that if JANA sells less than all of the Shares owned by it, Sandell Funds may sell a pro rata portion of any Shares owned by them), (ii) the commencement of the Issuer's next annual meeting of shareholders and (iii) the date that JANA notifies Sandell that it has ceased to pursue any proposals to the Issuer regarding the conduct of its business. In addition, the Sandell Group Agreement provides that all public statements, regulatory filings, contacts with management and related activities related to the Issuer will be made and conducted by JANA, following reasonable consultation with Sandell and the parties to the Amended and Restated Agreement, and further provides that Sandell shall reimburse the parties to the Amended and Restated Agreement for its pro rata share of (i) the Profit Participation and (ii) all reasonable third party expenses related to any proxy contest. This description of the Sandell Group Agreement is a summary only and is qualified by reference to the Sandell Group Agreement, a copy of which is filed as Exhibit 6 to this Schedule 13D and is incorporated herein by reference. Sandell owns no Shares. When and if it purchases Shares, it may be deemed to be a group member with the other Reporting Persons hereunder. Miller, Genachowski, Studenmund and Weinstein have each entered into a Nominee Agreement with JANA and CT-100 pursuant to which each is entitled to receive certain specified compensation in the event that he or she is elected or appointed and serves as a director of the Issuer, and in the event he or she serves as a nominee but is not elected or appointed. This description is a summary only and is qualified by reference to the individual Nominee Agreements, copies of which are filed as Exhibits 7-10 to this Schedule 13D and are incorporated herein by reference. - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 12 OF 16 PAGES - ------------------------------- ----------------------- JANA currently has contractual agreements with three credit counterparties: Jefferies & Company, Inc., Lehman Brothers Inc. and UBS AG, with regard to cash-settled equity swaps (the "JANA Swaps") that reference Shares. The JANA Swaps constitute economic exposure to approximately 12,530,048 Shares, or 8.2% of the Shares outstanding. The JANA Swaps have reference prices ranging from $7.29 to $8.07 and expiration dates ranging from October 2008 to December 2010. These contracts do not give JANA direct or indirect voting, investment or dispositive control over any securities of the Issuer and do not require the counterparties thereto to acquire, hold, vote or dispose of any securities of the Issuer. Accordingly, JANA disclaims any beneficial ownership in securities that may be referenced in such contracts or that may be held from time to time by any counterparties to the contracts. In addition to the agreements referenced above, the Reporting Persons from time to time, may enter into and dispose of additional cash-settled equity swap or other similar derivative transactions with one or more counterparties that are based upon the value of the Shares, which transactions may be significant in amount. The profit, loss and/or return on such additional contracts may be wholly or partially dependent on the market value of the Shares, the relative value of the Shares in comparison to one or more other financial instruments, indexes or securities, a basket or group of securities in which the Shares may be included, or a combination of any of the foregoing. The Reporting Persons have entered into a Joint Filing Agreement, dated as of January 7, 2007 (the "Joint Filing Agreement"), a copy of which is attached hereto as Exhibit 11. The Reporting Persons have filed this statement jointly pursuant to the Joint Filing Agreement in view of the Amended and Restated Agreement and the Option Agreement. Except as described herein, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any other securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits. Exhibit 1 Letter, dated December 26, 2007, from JANA to the Issuer. Exhibit 2 Complaint, dated January 7, 2008. Exhibit 3 Press Release, dated January 7, 2008. Exhibit 4 Amended and Restated Agreement, dated December 23, 2007, among JANA, CT-100, AIM, Gardi and Velocity. Exhibit 5 Option Agreement, dated December 21, 2007, between Velocity and JANA. Exhibit 6 Sandell Group Agreement, dated January 4, 2008, between JANA and Sandell. Exhibit 7 Nominee Agreement with J. Miller. Exhibit 8 Nominee Agreement with J. Genachowski. Exhibit 9 Nominee Agreement with J. Studenmund. - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 13 OF 16 PAGES - ------------------------------- ----------------------- Exhibit 10 Nominee Agreement with B. Weinstein. Exhibit 11 Joint Filing Agreement, dated January 7, 2008. - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 14 OF 16 PAGES - ------------------------------- ----------------------- SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: January 7, 2008 JANA PARTNERS LLC BY: /S/BARRY ROSENSTEIN --------------------------- Name: Barry Rosenstein Title: Managing Partner BY: /S/GARY CLAAR --------------------------- Name: Gary Claar Title: General Partner SPARK MANAGEMENT PARTNERS, L.L.C. BY: /S/SANTO POLITI --------------------------- Name: Santo Politi Title: Managing Member VELOCITY INTERACTIVE MANAGEMENT, LLC BY: /S/JONATHAN MILLER --------------------------- Name: Jonathan Miller Title: Authorized Signatory - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 15 OF 16 PAGES - ------------------------------- ----------------------- ALEX INTERACTIVE MEDIA, LLC BY: /S/PAUL GARDI --------------------------- Name: Paul Gardi Title: Managing Member - ------------------------------- ----------------------- CUSIP NO. 12613R104 SCHEDULE 13D PAGE 16 OF 16 PAGES - ------------------------------- ----------------------- APPENDIX A TRANSACTIONS IN THE SHARES EFFECTED BY THE REPORTING PERSONS DURING THE PAST SIXTY DAYS (UNLESS OTHERWISE STATED, ALL TRANSACTIONS WERE EFFECTED IN THE OPEN MARKET) JANA Date of Trade Shares Purchased (Sold) Price per Share - ------------- ----------------------- --------------- 12/26/2007 250,000 $8.88 12/27/2007 1,000,000 $8.90 12/28/2007 1,000,000 $9.06 12/31/2007 27,760 $9.16 12/31/2007 559,587 $9.09 1/2/2008 213,000 $8.90 1/2/2008 170,183 $9.01 1/3/2008 480,640 $8.72 1/4/2008 100,000 $8.61 1/4/2008 97,800 $8.49 1/4/2008 971,203 $8.56 EX-99 2 p07-1802exh_1.txt EXHIBIT 1 JANA MASTER FUND, LTD. c/o JANA Partners LLC 200 Park Avenue Suite 3300 New York, New York 10166 December 26, 2007 By Certified Mail and Hand Delivery Andrew Sherman Corporate Secretary CNET Networks, Inc. 235 Second Street San Francisco, CA 94105 RE: 2008 Annual Meeting of Stockholders of CNET Networks, Inc. Dear Mr. Sherman: This letter and accompanying notice (the "NOTICE") hereby provides you and CNET Networks, Inc. (the "COMPANY") advance notice that JANA Master Fund, Ltd. (the "PROPONENT") intends (i) to nominate candidates for election to the Board of Directors (the "BOARD") of the Company and (ii) to propose certain matters for stockholder approval at the 2008 Annual Meeting of the stockholders of the Company (the "ANNUAL MEETING"). The director nominees and stockholder proposals that the Proponent intends to present to the stockholders at the Annual Meeting are identified in the accompanying Notice. As of the date of this letter, the Proponent is the record owner of 1,000 shares of Common Stock of the Company (the "COMMON STOCK") and is the beneficial owner of 7,680,000 shares of Common Stock (which includes the aforementioned shares owned of record by the Proponent). Please be advised that, although the Proponent has provided you this letter and the Notice, the Proponent believes that it is not required to provide the Company advance notice of its nominees for election as directors. With regard to the nomination of candidates for director election: o Section 6 of Article III of the Bylaws of the Company (the "BYLAWS") is the only provision in the Company's governing documents relating to the nomination of candidates for director election. The Company's proxy statement for its 2007 annual meeting implies that, under such section, only the Governance and Nominating Committee of the Board (the "NOMINATING COMMITTEE") may submit nominees for director election and that stockholders may not present nominees for consideration by the Nominating Committee unless (among other conditions) the stockholder has beneficially owned $1,000 of securities entitled to vote at the Annual Meeting for at least one year. The Proponent has not beneficially owned $1,000 of such securities for one year and therefore would not satisfy the requirements of Section 6 of Article III. The Proponent requests that the Company acknowledge that, contrary to the position in its 2007 proxy statement, Section 6 of Article III of the Bylaws means only that (i) a stockholder must follow the requirements of such section if it wishes to present director candidates for consideration by the Nominating Committee or the Board, and that (ii) Section 6 does not address instances where a stockholder wishes to nominate director candidates in its capacity as, and in accordance with its rights as, a stockholder (without Nominating Committee or Board approval). If the Company's interpretation of Section 6 of Article III is clarified in this manner, then such section will not apply to the Proponent's nominees for director election because the Proponent does not wish to submit its director candidates for nomination by the Board or the Nominating Committee. o If the Company interprets Section 6 of Article III to mean that a stockholder may only present director candidates for election if such candidates are nominated by either the Board or the Nominating Committee, and therefore stockholders cannot separately nominate candidates for director election without Board or Nominating Committee approval, such section is invalid as a matter of Delaware law because, among other potential reasons, it (i) impermissibly restricts the fundamental right of stockholders to nominate and elect Company directors and (ii) imposes an unreasonable requirement on the Company stockholders that does not further a legitimate or proper purpose. o If the Company interprets Section 6 of Article III to mean that a stockholder cannot nominate candidates for director election unless such stockholder beneficially owns $1,000 of securities entitled to vote at the Annual Meeting for at least one year, the Proponent believes that such section is invalid as a matter of Delaware law because, among other potential reasons, the one-year, $1,000 beneficial ownership requirement (i) impermissibly restricts the fundamental right of stockholders to nominate and elect Company directors, (ii) impermissibly treats holders of the same class of stock differently and unequally and (iii) imposes an unreasonable requirement on the Company stockholders that does not further a legitimate or proper purpose. For the foregoing reasons, the Proponent believes that there can be no valid restriction on its right to present its nominees for director election at the Annual Meeting, and therefore the Proponent reserves the right to substitute its candidates for director election with other candidates at any time prior to the Annual Meeting. Be further advised that the Proponent believes that it is not required to provide the Company advance notice of the proposals it wishes to present for stockholder approval at the Annual Meeting. With respect to the submission of stockholder proposals: o Section 3 of Article II of the Bylaws is the only provision in the Company's governing documents that purports to relate to the presentation of stockholder proposals at the Annual Meeting. The Company's proxy statement for its 2007 annual meeting implies that the Proponent cannot present its proposals at the Annual Meeting unless it complies with the requirements of Section 3 of Article II of the Bylaws, which (among other things) requires a stockholder to beneficially own $1,000 of securities entitled to vote at the Annual Meeting for at least one year in order to be eligible to present proposals for stockholder action. If Section 3 of Article II of the Bylaws were to apply to the Proponent, the Proponent would not satisfy the requirements of such section because it has not beneficially owned $1,000 of such securities for the required one-year period. The Proponent requests that the Company acknowledge that, contrary to the Company's position in its 2007 proxy statement, Section 3 of Article II applies only to a proposal that a stockholder wishes to require the Company to include in its proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended. If the Company's interpretation of Section 3 of Article II is clarified in this manner, then the Proponent need not comply with the requirements of Section 3 of Article II because the Proponent is not seeking to include any of its proposals in the Company's proxy materials pursuant to Rule 14a-8. o If the Company interprets Section 3 of Article II of the Bylaws as applying to the Proponent's proposals, such section is invalid as a matter of Delaware law because it purports to require that a stockholder beneficially own $1,000 of securities entitled to vote at the Annual Meeting for a one-year period in order to be eligible to present proposals for stockholder action and such ownership requirement (i) impermissibly limits the fundamental right of stockholders to propose and transact business at an annual meeting, (ii) impermissibly treats holders of the same class of stock differently and unequally and (iii) imposes an unreasonable requirement on the Company stockholders that does not further a legitimate or proper purpose. For the foregoing reasons, the Proponent believes that there can be no valid restriction on its right to present proposals for stockholder action at the Annual Meeting, and therefore the Proponent reserves the right to modify or supplement its proposals at any time prior to the transaction of business at the Annual Meeting. The Proponent requests written notification from the Company of the following by no later than January 1, 2008: o Confirmation that the size of the Board is currently fixed at a total of 8 directorships, and that there are currently no vacancies on the Board. o Confirmation that, given the current size of the Board, there are 2 directorships subject to election at the Annual Meeting, and that such two directorships are currently occupied by Peter Currie and Betsey Nelson. o Confirmation that the Bylaws have not been amended since September 12, 2007. o Confirmation that, under the Bylaws, (i) the Proponent need not provide written notice to the Company of its director nominees in advance of the Annual Meeting in order for the Proponent (as a stockholder), or its duly authorized proxy, to present such nominees for election by the stockholders at the Annual Meeting, and (ii) the Proponent need not beneficially own $1,000 of the securities entitled to vote at the Annual Meeting for at least one year in order to present its nominees for director election at the Annual Meeting. o Confirmation that, under the Bylaws, (i) the Proponent need not provide written notice to the Company of any stockholder proposals in advance of the Annual Meeting in order for the Proponent (as a stockholder), or its duly authorized proxy, to present such proposals for stockholder action at the Annual Meeting, and (ii) the Proponent need not beneficially own $1,000 of the securities entitled to vote at the Annual Meeting for at least one year in order to present any proposals for stockholder action at the Annual Meeting. o If the Company asserts that advance notice of either director nominees or stockholder proposals is required, either confirmation that the enclosed notice complies with any such advance notice requirement or identification of any alleged defects in the enclosed notice. Please be advised that the Proponent reserves the right (i) to challenge the validity of any provision of the Bylaws, (ii) to challenge or cure any asserted defect in the enclosed notice, in the event the Company asserts that such notice is required to be submitted in advance of the Annual Meeting and (iii) to challenge the reasonableness of imposing on the Proponent the one-year, $1,000 beneficial ownership requirements and the other advance notice requirements of Section 3 of Article II and Section 6 of Article III of the Bylaws, in the event the Company attempts to apply such requirements to the Proponent. Your response to this letter, and any other correspondence to the Proponent, should be sent to the following person: Charles Penner General Counsel JANA Partners LLC 200 Park Avenue, Suite 3300 New York, New York 10166 Phone: (212) 692-7645 Fax: (212) 692-7695 Email: CHARLIE@JANAPARTNERS.COM [SIGNATURE PAGE FOLLOWS] JANA MASTER FUND, LTD. By: JANA Partners LLC, its Investment Manager By: /s/Marc Lehmann ____________________________________ Marc Lehmann Partner JANA Partners LLC Enclosure cc: Charles Penner (telephone: (212) 692-7645) Marc Weingarten (telephone: (212) 756-2280) EX-99 3 p07-1802exh_2.txt EXHIBIT 2 IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE JANA MASTER FUND, LTD., ) a Cayman Islands exempted company, ) ) Plaintiff, ) ) Civil Action No. v. ) ________ ) CNET NETWORKS, INC., ) a Delaware corporation, ) ) Defendant. ) ) VERIFIED COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF Plaintiff, JANA Master Fund, Ltd., a Cayman Islands exempted company ("JANA"), by and through its undersigned attorneys, Morris, Nichols, Arsht & Tunnell LLP, pleads as and for its Verified Complaint for Declaratory and Injunctive Relief against Defendant, CNET Networks, Inc. ("CNET" or the "Company"), as follows: NATURE OF THE ACTION 1. This action is brought to redress the wrongful application by CNET and its board of directors of two discriminatory advance notice by-laws that purport to strip certain stockholders of their ability to make stockholder proposals at the Company's 2008 Annual Meeting or to nominate candidates for election to the Company's board of directors at that meeting and to compel the production of certain stocklist materials pursuant to Section 220 of the Delaware General Corporation Law ("Section 220"). CNET's interpretation of the advance notice by-laws is unreasonable in that it purports to require stockholders to beneficially own at least $1,000 of securities of the Company entitled to vote at an annual meeting of the Company (i.e., $1,000 of common stock of the Company) for at least one year before they are permitted to "recommend" nominees for election as director or to propose amendments to the Company's by-laws or to make other shareholder proposals at such meeting. Although JANA will have beneficially owned more than $1,000 of such securities for at least eight months by the time of the 2008 Annual Meeting if it is held on or after the one-year anniversary of the Company's June 2007 Annual Meeting, JANA will not have owned such securities for the required one-year period by such time. Nothing in the Delaware General Corporation Law permits by-laws that discriminate against stockholders in this manner. 2. CNET's interpretation of the advance notice by-laws also purports to give the Company's board of directors complete control over the director nomination and stockholder proposal process and, therefore, serves to delay, if not prevent, stockholders from nominating an insurgent slate of director candidates or from amending the by-laws to facilitate a change of control. 3. CNET's interpretation of the advance notice by-laws is completely at odds with fundamental and well-recognized principles of Delaware law -- most pertinently that a sitting board of directors has no power whatsoever to control who may and may not be nominated for election to the board or to prevent certain stockholders from proposing by-law amendments. CNET's interpretation of the advance notice by-laws is invalid on its face and as applied to JANA. 4. CNET's interpretation of the advance notice by-laws is a self-interested attempt at entrenchment by the current CNET board of directors. The Company's SEC filings concede that the discriminatory advance notice by-laws pertaining to stockholder proposals and director nominations have the effect of delaying or preventing proxy contests and changes in -2- control that could be in the stockholders' best interests and result in a higher stock price than the current market price for the Company's stock. THE PARTIES 5. Plaintiff JANA is an investment fund that is currently the record holder of 1,000 shares of CNET common stock and the beneficial owner of more than 11,000,000 shares of CNET common stock (which includes the aforementioned shares held of record). 6. Defendant CNET, a Delaware corporation, is an interactive media company that builds brands in technology, entertainment, business, food and parenting. The Company's brands include CNET, GameSpot, MP3.com, ZDNet, TechRepublic, Webshots, CHOW and Urban Baby. Founded in 1992, CNET does business in the United States, Asia and Europe. According to comScore Media Metrix, CNET was the ninth largest Internet network in the world based on total unique users in December 2006. FACTUAL BACKGROUND 7. By letter dated December 26, 2007, JANA gave notice to the Company of its intention to nominate persons for elections as directors and to present certain proposals for stockholder action, including proposed amendments to the CNET by-laws (the "Notice," attached hereto as Exhibit A). A receipt from the U.S. Postal Service indicates that CNET received this letter on December 28, 2007. The Notice informed the Company that JANA intended to, among other things, (i) nominate two persons for election as Class III directors at the 2008 Annual Meeting, (ii) propose that the by-laws be amended to cause an increase in the size of the board from eight to thirteen directors, and (iii) nominate an additional five persons to fill the positions created by the increase in the size of the board in the event that the by-laws are amended to increase the size of the board. -3- 8. JANA's letter also advised the Company that JANA is not seeking to include any of its proposals to amend the by-laws in the Company's proxy materials pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, and therefore should not be required to comply with Section 3 of Article II of the by-laws, and is not seeking to have its nominees considered for inclusion on management's slate and therefore should not be required to comply with Section 6 of Article III of the by-laws. JANA's letter further advised the Company that, in the event the Company contends that such by-law sections apply to JANA's proposals or nominees for director, JANA believes that the advance notice requirements of such sections are invalid as a matter of Delaware law because, among other potential reasons, the minimum stock holding requirement and minimum stock ownership requirement set forth therein (i) impermissibly limit the fundamental right of stockholders to propose and transact business and to nominate candidates for director election at an annual meeting, (ii) impermissibly treat holders of the same class of stock differently and unequally, and (iii) impose an unreasonable requirement on the Company stockholders that does not further a legitimate or proper purpose. 9. Also on December 26, 2007, JANA caused to be delivered to CNET a letter demanding inspection of certain stocklist materials of the Company pursuant to Section 220 (the "Demand," attached hereto as Exhibit B). The purpose for the Demand is to "enable [JANA] to communicate with the Company's other stockholders on matters relating to their interests as stockholders and to solicit proxies for a slate of directors and other corporate business at the Annual Meeting." 10. On January 3, 2008, CNET sent a letter to JANA refusing to provide the requested stocklist materials (the "Demand Refusal," attached hereto as Exhibit C). In the Demand Refusal, CNET claims that JANA has not stated a proper purpose because the Notice -4- "fails to comply with the provisions of the Company's bylaws which require a stockholder seeking to nominate candidates for director election or seeking to transact other corporate business at an annual meeting to beneficially own $1,000 of the Company's common stock for at least one year." 11. Although not required to provide advance notice of its nominations of directors or its proposals, JANA nevertheless provided notice before the advance notice date set by the Company in its prior proxy materials. 12. CNET's interpretation of its by-law to prevent JANA's nomination of directors and proposals to amend the by-laws is invalid as a matter of Delaware law. 13. Article II, Section 3, of the by-laws provides: NOTICE OF ANNUAL MEETING. Written or printed notice of the annual meeting, stating the place, day and hour thereof, shall be given to each stockholder entitled to vote thereat, in the manner stated in Article VII, Section 1, at such address as appears on the books of the Corporation or to any electronic mail address provided to the Corporation by a stockholder, not less than ten days nor more than sixty days before the date of the meeting. ANY STOCKHOLDER OF THE CORPORATION THAT HAS BEEN THE BENEFICIAL OWNER OF AT LEAST $1,000 OF SECURITIES ENTITLED TO VOTE AT AN ANNUAL MEETING FOR AT LEAST ONE YEAR MAY SEEK TO TRANSACT OTHER CORPORATE BUSINESS AT THE ANNUAL MEETING, PROVIDED THAT SUCH BUSINESS IS SET FORTH IN A WRITTEN NOTICE AND MAILED BY CERTIFIED MAIL TO THE SECRETARY OF THE CORPORATION AND RECEIVED NO LATER THAN 120 CALENDAR DAYS IN ADVANCE OF THE DATE OF THE CORPORATION'S PROXY STATEMENT RELEASED TO SECURITY-HOLDERS IN CONNECTION WITH THE PREVIOUS YEAR'S ANNUAL MEETING OF SECURITY HOLDERS (or, if no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than 30 calendar days from the date contemplated at the time of the previous year's proxy statement, a reasonable time before the solicitation is made). Notwithstanding the foregoing, such notice must also comply with any applicable federal securities laws establishing the circumstances under which the Corporation is required to include the proposal in its proxy statement or form of proxy. (Emphasis added.) -5- 14. CNET interprets this provision to mean that a stockholder cannot submit any proposals for consideration at an annual meeting unless that stockholder has been a beneficial owner of at least $1,000 worth of stock for at least one year and provides written notice of such proposals in advance of the annual meeting. CNET's interpretation of Article II, Section 3, of the by-laws is invalid as a matter of Delaware law. 15. Article III, Section 6, of the By-laws provides: NOMINATIONS FOR DIRECTORS. Nominations for election to the Board of Directors of the Corporation at a meeting of the stockholders may be made by the Board of Directors, or on behalf of the Board of Directors by a Nominating Committee appointed by the Board of Directors. ANY STOCKHOLDER OF THE CORPORATION THAT HAS BEEN THE BENEFICIAL OWNER OF AT LEAST $1,000 OF SECURITIES ENTITLED TO VOTE AT SUCH MEETING FOR AT LEAST ONE YEAR MAY SUBMIT A DIRECTOR NOMINATION TO THE BOARD OF DIRECTORS OR, IF DESIGNATED BY THE BOARD OF DIRECTORS, A NOMINATING COMMITTEE. SUCH NOMINATION MUST BE SET FORTH IN A WRITTEN RECOMMENDATION AND MAILED BY CERTIFIED MAIL TO THE SECRETARY OF THE CORPORATION AND RECEIVED NO LATER THAN (A) WITH RESPECT TO AN ANNUAL MEETING, 120 CALENDAR DAYS IN ADVANCE OF THE DATE OF THE CORPORATION'S PROXY STATEMENT RELEASED TO SECURITY-HOLDERS IN CONNECTION WITH THE PREVIOUS YEAR'S ANNUAL MEETING OF SECURITY HOLDERS (or, if no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than 30 calendar days from the date contemplated at the time of the previous year's proxy statement, a reasonable time before the solicitation is made) or (b) with respect to a special meeting, a reasonable time before the solicitation is made. Any such submission by a stockholder must set forth as to each proposed nominee who is not an incumbent director (i) the number of shares of stock of the Corporation which are beneficially owned by the nominating stockholder, (ii) a statement of the nominee's qualifications, (iii) a consent signed by the nominee evidencing a willingness to serve as a director, if elected and (iv) a commitment by the nominee to meet personally with the Nominating Committee or the Board of Directors. (Emphasis added.) 16. CNET interprets this provision to mean that a stockholder cannot nominate candidates for election to the board of directors unless it has been the beneficial owner of at least $1,000 worth of stock for at least one year and has provided -6- written notice of such nominations in advance of the annual meeting. CNET' s interpretation of Article III, Section 6, of the by-laws is invalid as a matter of Delaware law. COUNT I INVALIDITY OF DISCRIMINATORY ADVANCE NOTICE BY-LAWS 17. Plaintiff repeats and realleges paragraphs 1-16 of the Verified Complaint as if fully set forth herein. 18. CNET's interpretation of the advance notice by-laws requires that any stockholder wishing to nominate a candidate or candidates for director or to make a stockholder proposal must have been a beneficial owner of a minimum amount of Company stock for at least one year. 19. CNET's interpretation of Article II, Section 3, and Article III, Section 6, is discriminatory and unreasonable PER SE and its application should be enjoined permanently. 20. CNET's interpretation of the provisions of Article II, Section 3, and Article III, Section 6, is unreasonable and serves only to stifle any dissatisfied stockholders from challenging incumbent directors. 21. CNET's interpretation of Article II, Section 3, and Article III, Section 6, is invalid on its face, and is currently causing Plaintiff irreparable harm. 22. Plaintiff has no adequate remedy at law. COUNT II INVALIDITY OF ARTICLE III, SECTION 6, OF THE BY-LAWS 23. Plaintiff repeats and realleges paragraphs 1-22 of the Verified Complaint as if fully set forth herein. -7- 24. CNET's interpretation of Article III, Section 6, makes the incumbent directors gatekeepers of who (if anyone) will be permitted to challenge them. Delaware law does not recognize such a role for directors. 25. CNET's interpretation of Article III, Section 6, improperly purports to remove from stockholders the power to nominate candidates for director and to transform that inherent power of stockholders into a power to "recommend" nominees. 26. The purported deprivation of the right to nominate impermissibly interferes with stockholder voting rights and constitutes current and irreparable harm to Plaintiff. 27. Plaintiff has no adequate remedy at law. COUNT III SECTION 220 DEMAND FOR STOCKLIST MATERIALS 28. Plaintiff repeats and realleges paragraphs 1-27 of the Verified Complaint as if fully set forth herein. 29. On December 26, 2007, the Plaintiff made a demand pursuant to Section 220 to inspect certain stocklist materials of the Company. 30. The purpose stated in the Demand is a proper purpose under Delaware law. 31. CNET has refused to provide the demanded inspection in violation of Delaware law. 32. Plaintiff is, therefore, entitled to an Order compelling the inspection and copying of all of the stocklist materials requested in the Demand. 33. Plaintiff has no adequate remedy at law. WHEREFORE, Plaintiff demands that the Court enter its Orders, Judgments and Decrees: -8- a. Declaring and decreeing that CNET's interpretation of Article II, Section 3, and Article III, Section 6, of the by-laws is invalid as a matter of law; b. Preliminarily and permanently enjoining the application of Article II, Section 3, and Article III, Section 6, of the by-laws to Plaintiff's nomination of individuals as candidates for director or to Plaintiff's proposals to be presented for stockholder approval at the 2008 Annual Meeting, including the proposals to amend the by-laws; c. Summarily directing the Company, its officers, directors, agents and employees to permit Plaintiff to inspect and to make copies of all the stocklist materials sought in the Demand; d. Awarding Plaintiff its costs and expenses incurred in bringing and prosecuting this action, including its attorneys' fees based on, INTER ALIA, the corporate benefit conferred by this litigation, together with pre and post judgment interest; and e. Awarding such other and further relief as may be just and equitable in the circumstances. MORRIS, NICHOLS, ARSHT & TUNNELL LLP /s/Kevin M. Coen ------------------------------------ Martin P. Tully (#465) David J. Teklits (#3221) Kevin M. Coen (#4775) 1201 North Market Street Wilmington, Delaware 19801 (302) 658-9200 ATTORNEYS FOR PLAINTIFF OF COUNSEL: -9- Marc Weingarten Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 January 7, 2008 -10- VERIFICATION STATE OF New York ) ------------- )SS. COUNTY OF New York ) ------------- The undersigned holds the position indicated below the undersigned's name with JANA PARTNERS LLC, which is the investment manager of JANA MASTER FUND, LTD., and the undersigned hereby states that the undersigned has read the foregoing Verified Complaint for Declaratory and Injunctive Relief and affirms that the factual allegations contained therein are true and correct to the best of the undersigned's knowledge, information and belief. /s/ Scott Ostfeld --------------------------------------- Name: Scott Ostfeld Title: Managing Director for JANA PARTNERS LLC for JANA MASTER FUND, LTD. SWORN TO AND SUBSCRIBED before me this 4th day of January , 2008. ---- -------------- /s/ Kate A. Mangano - -------------------------------------- Notary Public (Affix Stamp or Seal) -11- EX-99 4 p07-1802exh_3.txt EXHIBIT 3 PRESS RELEASE JANA PARTNERS PROPOSES NEW BOARD MEMBERS FOR CNET NETWORKS Board Nominees Will Seek to Address Underperformance by Building on CNET's Strengths Sandell Agrees to Support JANA Partners' Efforts NEW YORK, JANUARY 7, 2008 -- JANA Partners LLC ("JANA") announced today that an affiliate has notified CNET Networks, Inc. (Nasdaq: CNET) that it will nominate seven people for election to CNET's Board of Directors at the next annual shareholders meeting. JANA has collaborated with Paul Gardi of Alex Interactive Media and with venture capital firm Spark Capital to select a slate of directors it believes has the industry expertise and proven talent needed to revitalize CNET, which JANA believes has significantly lagged peers in value creation and performance. JANA and its partners currently beneficially own approximately 8% of CNET's voting stock and JANA has an additional approximately 8% non-voting economic interest in CNET. Sandell Asset Management Corp., which has agreed to support JANA's effort, has a separate approximately 5% non-voting economic interest. JANA Managing Partner Barry Rosenstein said, "This effort is about taking an underperforming company and increasing shareholder value by building on its top-notch editorial talent and premier internet assets. Together with Paul Gardi and Spark Capital, we have assembled a group of nominees we believe has the technical skills and business experience to reverse CNET's ongoing underperformance and start delivering value for shareholders." Tom Sandell, CEO of Sandell Asset Management said, "We are pleased to support JANA in this effort to improve the performance and ultimately the valuation of CNET to the benefit of all shareholders. The depth and experience of the team that JANA has assembled is impressive and well matched for the challenge of turning around the poor performance at CNET." Despite owning leading web properties including technology, food and gaming review franchises, CNET has failed in recent years to create shareholder value. In 2007, CNET shares rose less than 1% versus gains of approximately 15% for CNET's stated benchmark, the Interactive Week Internet Index, and 10% for the Nasdaq Index. For the three years through 2007, CNET shares fell approximately 19% versus gains of approximately 32% for the Interactive Week Internet Index and 22% for the Nasdaq Index. JANA's board nominees intend to create a stronger, more profitable company through: [ ] MAXIMIZING CORE STRENGTHS: Despite the unparalleled quality of its editorial content and staff, JANA believes CNET has not been able to leverage these assets to increase shareholder value. JANA's nominees if elected will use their combined experience in seeking to substantially grow CNET's core business. [ ] DRIVING TRAFFIC AND INCREASING REVENUES: JANA's nominees if elected will seek to broaden the reach of CNET's properties by implementing intent-driven media strategies that better connect consumers with relevant content, which in turn will enhance revenue realization through optimized ad serving. [ ] FOCUSING ON ROI AND KEY METRICS: JANA's nominees if elected will bring a disciplined, return on investment-oriented approach to CNET's Board of Directors, which JANA believes has pursued growth through expensive non-strategic acquisitions and investments but has not delivered significant organic growth in CNET's core business. The following two individuals will be nominated to replace the two directors who will stand for re-election at the 2008 annual meeting of shareholders: [ ] PAUL GARDI - Managing Member, Alex Interactive Media. Former CEO of IAC Advertising Solutions; former EVP, GM for Ask Jeeves, Inc., where he led Operations and Strategic Planning; former President and COO of Teoma Technologies, Inc. He has been instrumental in evaluating CNET's operations and developing recommendations for improving performance and creating value should JANA's nominees be elected. [ ] SANTO POLITI - Founder and General Partner of Spark Capital. Former Partner at Charles River Ventures; former President of New Media for Blockbuster Entertainment Inc.; co-founder of BT Venture Partners; various engineering and management positions with Matsushita Electric Industrial, Panasonic Broadcast and Television Systems Company, and Weston Instruments, a subsidiary of Schlumberger Industries. In addition, JANA will propose to stockholders that they expand the current CNET board from eight to 13 directors and fill the resulting vacancies with the following five JANA nominees: [ ] JON MILLER - Founding partner, Velocity Interactive Group. Former Chairman and CEO of AOL; former CEO and President of USA Information and Services (which became IAC/InterActiveCorp and Expedia); former Managing Director of Viacom's Nickelodeon International. [ ] JAYNIE STUDENMUND - Former COO of Overture Services Inc./Yahoo! and former President and COO of Paymybills.com. Current board member of Orbitz World Wide, eHarmony, Western Asset and Countrywide Bank. Former board member of aQuantive, Inc. [ ] JULIUS GENACHOWSKI - Managing Director of Rock Creek Ventures and co-founder of LaunchBox Digital. Former Chief of Business Operations and other senior executive positions at IAC/InterActiveCorp. Current board member of Website Pros, The Motley Fool and Marc Ecko Enterprises. Former board member of Expedia, Hotels.com and Ticketmaster. [ ] BRIAN WEINSTEIN - Senior executive, Business Development Group at Creative Artists Agency focusing on strategic acquisitions and digital strategy. Mr. Weinstein has helped oversee the incubation of multiple venture-financed Internet companies. Mr. Weinstein helps lead Creative Artists Agency's new media advisory practice assisting corporate clients on traditional media and content strategies. Founder and Chairman, The Opportunity Network. [ ] GIORGIO CAPUTO - Managing Director, JANA Partners, focusing on small cap and technology investments. Former Mergers & Acquisitions Associate with Credit Suisse First Boston and Equity Derivatives Quantitative Analyst for Lehman Brothers. Separately, an affiliate of JANA today filed a complaint for declaratory and injunctive relief in the Delaware Court of Chancery. The complaint requests, among other things, that the court enjoin CNET from rejecting JANA's director nominations and proposals on the basis of certain provisions of CNET's bylaws which, according to CNET, require stockholders to have held CNET stock for one year in order to propose business or nominate directors. JANA and its Delaware counsel believe such provisions, if interpreted in this manner, would be impermissibly discriminatory and invalid under Delaware law. BACKGROUND JANA PARTNERS LLC is a multi-billion dollar investment management firm founded in 2001 by Barry Rosenstein. ALEX INTERACTIVE MEDIA, LLC ("AIM") is a private company focused on leveraging its domain expertise in digital media and related industries. AIM Managing Member Paul Gardi has committed to personally investing $1 million in CNET equity. SPARK CAPITAL is a venture capital fund focused on building businesses that transform the distribution, management and monetization of media and content, with experience in identifying and actively building market-leading companies in sectors including infrastructure (Qtera, RiverDelta, Aether Systems, Broadbus and BigBand), networks (College Sports Television, TVONE and XCOM) and services (Akamai and the Platform). Spark Capital has over $600 million under management, and is based in Boston, Massachusetts. Spark has committed to investing $20 million in CNET equity. VELOCITY INTERACTIVE GROUP, LLC is an investment firm that focuses on digital media and communications. Velocity Interactive Group has offices in Palo Alto, Los Angeles and New York. Velocity has an option to invest $10 million in CNET equity. SANDELL ASSET MANAGEMENT CORP. is a multi-billion dollar global investment management firm, founded by Thomas E. Sandell, that focuses on global corporate events and restructurings throughout North America, Continental Europe, the United Kingdom, Latin America and the Asia-Pacific theatres. Sandell frequently will take an "active involvement" in facilitating financial or organization improvements accruing to the benefit of investors. CONTACTS: Sard Verbinnen & Co George Sard/Jonathan Gasthalter (212) 687-8080 Paul Kranhold/Andrew Cole (415) 618-8750 JANA Partners LLC Charles Penner (212) 692-7696 ALL STOCKHOLDERS OF CNET ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY THE INVESTORS AND NOMINEES NAMED ABOVE (THE "POTENTIAL PARTICIPANTS") FROM THE STOCKHOLDERS OF CNET FOR USE AT THE 2008 ANNUAL MEETING OF STOCKHOLDERS OF CNET WHEN AND IF THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. WHEN AND IF COMPLETED, THE DEFINITIVE PROXY STATEMENT AND FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF CNET AND WILL, ALONG WITH OTHER RELEVANT DOCUMENTS, BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE POTENTIAL PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. INFORMATION RELATING TO THE POTENTIAL PARTICIPANTS IS CONTAINED IN EXHIBIT 2 TO THE SCHEDULE 14A FILED BY THE POTENTIAL PARTICIPANTS WITH THE SEC ON JANUARY 7, 2008. *** EX-99 5 p07-1802exh_4.txt EXHIBIT 4 CONFIDENTIAL AGREEMENT This amended and restated agreement (this "Agreement") dated December 23, 2007 among JANA Partners LLC, a Delaware limited liability company ("JANA", "we" or "us") on behalf of funds and accounts under its management and control, CT-100 Holdings, LLC, ("CT-100") an entity formed and controlled by Spark Capital, L.P. and its affiliates ("Spark"), Alex Interactive Media, LLC ("AIM"), Paul Gardi ("Gardi") and Velocity Interactive Management, LLC ("Velocity") relating to investments in and activities related to CNET Networks, Inc. ("CNET") amends and restates the letter agreement, dated December 3, 2007, among certain of such parties. AIM ADVISORY AND CONSULTING SERVICES; FEES: AIM's employee Gardi will provide financial and operational advisory and consulting services and such services as may be otherwise agreed (all such services being referred to herein as the "Services") to JANA and CT-100 under the terms and conditions described herein. For purposes of this agreement, the term "AIM" shall include Gardi, and accordingly, the representations and covenants contained herein which are made by and are binding on AIM shall also be deemed made by and shall be personally binding on Gardi. All references to payments, refunds and other consideration or expenses contained herein shall not be interpreted as creating financial rights or obligations with respect to both AIM and Gardi but shall create only collective rights or obligations. AIM will provide the Services to JANA and CT-100 in connection with existing or potential investments made by funds, accounts or other affiliated entities managed by JANA or its affiliates (each a "JANA Fund" and collectively the "JANA Funds") and CT-100 (CT-100 and any existing or potential investments made by funds, accounts or other affiliated entities managed by Spark or its affiliates collectively referred to herein as each a "CT-100 Fund" and collectively the "CT-100 Funds") in the securities of CNET. AIM agrees that the Services (and any related services relating to CNET) shall be exclusive to JANA and CT-100 until the earlier of termination of Services (as provided for below), provided that AIM will be free to enter into or continue other consulting arrangements provided that any such arrangements do not prevent or materially detract from AIM's provision of the Services to JANA and CT-100. AIM and Gardi each represent that as of the date of this agreement neither AIM nor Gardi, respectively, are a party to any contract or agreement which will or may restrict in any way AIM's or Gardi's, respectively, ability to fully perform the Services as set forth in this agreement. As a fee for the Services (the "Consulting Fee"), AIM shall receive four quarterly payments of $25,000, with the first installment being paid promptly after execution of this agreement and thereafter promptly after the end of each ninety (90) day period following the date of this agreement until four such payments have been made (for total maximum payments of $100,000), provided that any quarterly payment shall be refundable in full if this agreement is terminated by AIM within forty-five (45) days after such payment 1 and shall be subject to reduction as described below. The obligation of such quarterly payments shall be borne pro rata by JANA and CT-100 based on the proportionate value of the Designated Investments (as defined below) held by each of them. The previous three paragraphs shall survive until the earlier of (i) notice from JANA to AIM that it is terminating the Services (which notice shall provide whether or not such termination is for Cause) and (ii) such time as no JANA Fund or CT-100 shall hold any investment in CNET. "Cause" shall mean AIM's fraud, willful misconduct, material breach of AIM's obligations hereunder or material violation by AIM of applicable laws, Gardi's refusal to serve as a nominee for the board of directors of CNET or as a member of the board of directors of CNET (unless JANA or CT-100, as applicable, is in material breach of this agreement which breach shall not have been cured within five (5) days notice from AIM to the applicable party), provided that any such breach if capable of being cured shall not have been cured within five (5) days notice from JANA or CT-100, as applicable, to AIM. CT-100 may request that JANA terminate the provision of the Services for Cause as provided for in this paragraph, which request shall not be unreasonably denied. JANA shall consult with CT-100 prior to terminating the Services pursuant to clause (i) of this paragraph. The Consulting Fee shall be refunded and shall be promptly repaid by AIM pro-rata to JANA and CT-100 (based on the ratio JANA and CT-100 paid such amounts) to the extent of: (i) CNET Proceeds (as defined below) and (ii) the Profit Participation (as defined below), provided that the total amount of such repayments shall not exceed the total of all payments made to AIM pursuant to the third paragraph of this section, and provided further that any such refunded amounts will not be included in the calculation of any Drawdown Amount (as defined below). Notwithstanding the foregoing, in lieu of refunding CT-100's share of such payments, CT-100 may provide for a reduction in the Profit Participation paid by it to AIM equal to the amount of such payments to be refunded under this paragraph. "CNET Proceeds" shall mean any after-tax proceeds (using an assumed combined federal and state tax rate of 40%) received by AIM as compensation for service on the board of directors of CNET including directors' fees and the value of any vested and exercisable option grants, restricted stock unit grants or stock grants which for purposes hereof shall have the same value accorded to them as in the annual proxy filed by CNET disclosing such grants, provided that such repayment shall not be due until such proxy has been made publicly available. The obligations of this paragraph shall survive any termination of this agreement. DESIGNATED INVESTMENTS: For investments in CNET ("Designated Investments") made by any JANA Fund during the term of this agreement: (i) Gardi shall no later than January 30, 2008 co-invest (subject to the provisions below) at least $1 million with personal funds in equity 2 securities of CNET or options on or other derivatives of such securities (based upon the cash cost of acquisition including trading commissions) through the purchase of such securities from a JANA Fund or JANA Funds to be designated by JANA. Gardi agrees to hold such investment (excluding the exercise of options to promptly purchase longer-dated options) until the earlier of (i) the disposition of all or a portion of the consolidated Designated Investment by the applicable JANA Fund or JANA Funds, other than pursuant to the Option Agreement, as defined below, (provided that if the applicable JANA Fund or JANA Funds dispose of less than all of such Designated Investment, other than pursuant to the Option Agreement, AIM may sell a pro rata portion), (ii) the commencement of CNET's next annual meeting of shareholders and (iii) the date that JANA notifies any other party or publicly announces that it has ceased to pursue or continue the making of any proposals to CNET regarding the conduct of its business or related matters or the conduct of any proxy contest involving CNET, in each case following the commencement of such efforts if so commenced, provided that Gardi may continue to hold such investment beyond such period. Gardi may make such investment through AIM or another entity. (ii) CT-100 shall no later than January 30, 2008 co-invest (subject to the provisions below) $20 million in stock of CNET (based upon the cash cost of acquisition of CNET securities including trading commissions) through the purchase of such stock from a JANA Fund or JANA Funds to be designated by JANA. CT-100 agrees to hold such investment until the earlier of (i) the disposition of all or a portion of the consolidated Designated Investment by the applicable JANA Fund or JANA Funds, other than pursuant to the Option Agreement, as defined below, (provided that if the applicable JANA Fund or JANA Funds dispose of less than all of such Designated Investment, other than pursuant to the Option Agreement, CT-100 may sell a pro rata portion), (ii) the commencement of CNET's next annual meeting of shareholders and (iii) the date that JANA notifies any other party or publicly announces that it has ceased to pursue or continue the making of any proposals to CNET regarding the conduct of its business or related matters or the conduct of any proxy contest involving CNET, in each case following the commencement of such efforts if so commenced, provided that CT-100 may continue to hold such investment beyond such period. Co-investments covered by the preceding paragraphs ("Co-investments") will be made in coordination with JANA, who will conduct the trading in such investments, with any open market purchases (but excluding the purchases by AIM and CT-100 referred to in (i) and (ii), respectively, above) and sales to be distributed pro rata between any JANA Fund, CT-100 and AIM (or any entity in which AIM's investments may be held). JANA will ensure that the average cost paid by AIM and CT-100 with respect to the purchases referred to in (i) and (ii), respectively, above is equal to the average of (i) JANA's average cost 3 as of December 3, 2007 and (ii) the average closing price of CNET's common stock for the ten trading days prior to December 3, 2007, provided that should JANA's average cost become lower during the term of this agreement as a result of additional purchases by any JANA Fund, JANA shall refund the difference between such lower average cost and such amount to CT-100 and Gardi pro rata. On any day on which sales or other disposition of CNET securities are made by any JANA Fund, JANA shall use commercially reasonable efforts to notify CT-100 and AIM of such sales in advance and shall allocate such sales between such JANA Funds, CT-100 and AIM pro rata unless CT-100 or AIM, as applicable, request otherwise following such notice. With respect to any such co-investments, CT-100 and AIM will each consult with JANA and provide necessary information so that we may comply with any applicable disclosure or other obligations which may result from such investment, and JANA shall prepare and complete any required disclosures including all regulatory filings related thereto. CT-100 and AIM each agree that CT-100 and AIM, respectively, will not invest in any security or option or derivative related to such security following such consultation if JANA so requests, provided that such request is reasonably based upon applicable regulatory considerations, disclosures or restrictions. With respect to any Designated Investment made by any JANA Fund and any CT-100 Fund prior to termination of the Services and/or termination of this agreement or within (i) one (1) year of termination of the Services by JANA (as provided for above under "AIM Advisory And Consulting Services; Fees") other than for Cause or termination of this agreement as provided for under "Term", if such termination of the Services or this agreement occurs prior to the first anniversary of this agreement or (ii) six (6) months of termination of the Services by JANA (as provided for above under "AIM Advisory And Consulting Services; Fees") other than for Cause or termination of this agreement as provided for under "Term", if such termination of the Services or this agreement occurs following the first anniversary of this agreement and prior to the third anniversary of this agreement, upon the realization of any cash proceeds (or receipt of non-cash consideration including the value of any securities received in exchange for such Designated Investment) by any JANA Fund or CT-100 Fund, as applicable, (excluding (i) the exercise of options to promptly purchase longer-dated options or any other closing out of a derivative position followed by the prompt creation of another investment position and (ii) shares sold pursuant to the Option Agreement, as defined below) the value of which net of third party out of pocket expenses to the extent exclusively related to the Designated Investment or investment by CT-100 Fund, as applicable, exceeds an 8% internal rate of return on such JANA Fund's or CT-100 Fund's, as applicable, total investment (the "Hurdle"), AIM shall receive 100% of such proceeds until AIM has received cumulative distributions (the "Catch-up Distributions") equal to 9% of the sum of (i) the Hurdle and (ii) the Catch-up Distributions, after which AIM will receive 9% of any remaining distributions of net profits (net of third party out of pocket expenses) with the remainder of such distributions going to the applicable JANA Fund or JANA Funds or CT-100 or CT-100 Funds, as applicable (the "Profit Participation"); 4 provided, however, that if at any time after the third anniversary of this agreement to the extent any such JANA Fund or CT-100 Funds, as applicable, shall not have disposed of such Designated Investment or investment by CT-100 Fund, at AIM's request each will be deemed for purposes of this paragraph to have disposed of an amount designated by AIM in such request (provided that such designation shall be for a pro rata amount for each JANA Fund and CT-100 Funds based on their respective holdings) and AIM will be paid promptly in cash in accordance with this paragraph, provided that AIM may make no more than three (3) such requests. Any consulting fee or other compensation which is paid to any potential third party board nominee who is not an employee of any party (or their affiliates) to this agreement (or any party who becomes a party to this or a substantially similar agreement with AIM to provide the Services) shall reduce the Profit Participation by an amount equal to such compensation. The obligations of this paragraph shall survive termination of the Services and/or this agreement unless the termination of Services is made by JANA for Cause or is made by AIM. Upon each of the first and second anniversary of this agreement, provided that the JANA Funds and CT-100 Funds shall continue to hold in the aggregate at least fifty (50) percent of the consolidated Designated Investment (calculated by reference to the date on which such JANA Funds and CT-100 Funds held in the aggregate the greatest number of CNET shares during the first year of this agreement), AIM shall be entitled to request prompt payment (divided pro-rata between the JANA Funds and CT-100 Funds based on the proportionate value of the Designated Investments held by them) of an amount in cash (each, a "Drawdown Amount"), if positive, equal to (i) $100,000 minus (ii) the sum of all fees or other compensation owed to AIM for the calendar year corresponding to such request pursuant to any other consulting, advisory or similar agreement or arrangement (excluding this agreement and excluding amounts paid to you by Spark) and the estimated cash compensation received or to be received by AIM during such calendar year for service on the board of directors of CNET, provided, however, that no such payment shall be made unless the amount of the Profit Participation, if it were to be paid on the date of any such request and excluding any Profit Participation payments previously made, but as otherwise calculated in accordance with the paragraph above, would equal or exceed such requested amount. All Drawdown Amounts will be deducted from the Profit Participation. A certified statement setting forth the information set forth in clause (ii) of the first sentence of this paragraph shall be provided by AIM to us at the time any request for funds pursuant to this paragraph is made. For purposes of such statement, any estimates regarding fees or other compensation to be received by AIM shall be reasonably agreed between the parties. VELOCITY INVESTMENT Concurrent with the execution of this Agreement, Velocity and JANA shall enter into the option agreement attached as Exhibit A hereto (the "Option Agreement"). Velocity agrees to hold the shares acquired pursuant to the Option Agreement, if any, as well as any CNET shares acquired during the term of this Agreement, until the earlier of (i) the disposition of all or a portion 5 of the consolidated Designated Investment by the applicable JANA Fund or JANA Funds (provided that if the applicable JANA Fund or JANA Funds dispose of less than all of such Designated Investment, Velocity may sell a pro rata portion), (ii) the commencement of CNET's next annual meeting of shareholders (expected to occur by the end of June, 2008) and (iii) the date that JANA notifies any other party or publicly announces that it has ceased to pursue or continue the making of any proposals to CNET regarding the conduct of its business or related matters or the conduct of any proxy contest involving CNET, in each case following the commencement of such efforts if so commenced, provided that Velocity may continue to hold such investment beyond such period. With respect to any such investments, Velocity will consult with JANA and provide necessary information so that we may comply with any applicable disclosure or other obligations which may result from such investment, and JANA shall prepare and complete any required disclosures including all regulatory filings related thereto. Velocity agrees that it will not invest in any security or option or derivative related to such security following such consultation if JANA so requests, provided that such request is reasonably based upon applicable regulatory considerations, disclosures or restrictions. COMMUNICATIONS: All public statements, regulatory filings or communications, contacts with management and related activity including selection of potential nominees for the board of directors of CNET and the conduct of any proxy contest with respect to CNET will be made and conducted by JANA following reasonable consultation with CT-100, AIM and Velocity, provided that this provision shall terminate automatically with respect to Gardi, Velocity and any employee of Spark should Gardi, Velocity or such employee, as applicable, be elected or appointed to the Board of Directors of CNET. JANA will seek CT-100's, AIM's and Velocity's input with respect to all such matters and will use all reasonable efforts to select individuals acceptable to all parties. Notwithstanding anything herein to the contrary, the consultation and input provisions of this paragraph shall only be applicable to Velocity should it exercise its right to purchase CNET shares pursuant to the Option Agreement or purchases an equivalent number of CNET shares in the open market. AIM EXPENSES: It is contemplated that AIM's ordinary travel, overhead and other expenses incurred in connection with the Services will be covered by AIM. Any pre-approved extraordinary expenses, including for pre-approved travel outside of New York City, and other pre-approved expenses will be reimbursed by JANA, CT-100 and Velocity pro rata based on the proportionate value of the Designated Investments held by each during the term of this Agreement (calculated using the greatest number of shares held by each party during the term of this Agreement). Notwithstanding anything herein to the contrary, Velocity shall only be responsible for its pro rata share of such expenses in the event Velocity purchases CNET stock either in the open market or pursuant to the Option Agreement. OTHER EXPENSES: Except as otherwise provided herein, each party shall be responsible for paying all of its own costs and expenses incurred in connection with the transactions 6 contemplated by this agreement. Notwithstanding the foregoing, the Profit Participation and all reasonable out-of-pocket third party expenses related to any proxy contest with respect to CNET (including, without limitation, filing fees, proxy advisory and printing expenses) and any related litigation shall be shared by the JANA Funds, CT-100 and Velocity pro rata based on the proportionate value of the Designated Investments held by each during the term of this Agreement (calculated using the greatest number of shares held by each party during the term of this Agreement), and each party shall promptly upon request reimburse a party who pays such expenses directly for its pro rata share of such expenses. Notwithstanding anything herein to the contrary, Velocity shall only be responsible for its pro rata share of such expenses in the event Velocity purchases CNET stock either in the open market or pursuant to the Option Agreement. INDEMNIFICATION: JANA and CT-100 agree to indemnify AIM, including AIM's members, principals or officers, including Gardi (each of the foregoing, an "Indemnitee"), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by AIM in connection with any action, suit, arbitration or proceeding, whether civil, criminal, administrative or investigative, in which any Indemnitee becomes involved, as a party or otherwise, or in which any Indemnitee may be threatened, either during the term of this agreement or thereafter, relating to or arising out of the activities undertaken hereunder, relating to CNET, relating to the Services, or otherwise relating to or arising out of this agreement, including by serving as a member of the Board of Directors, or any committee thereof, of any company PROVIDED, HOWEVER that such indemnification will not apply to any such expenses or liabilities (i) to the extent paid, or acknowledged to be payable, directly to or on behalf of AIM, by either such company or by an insurance carrier under a policy of officers' and directors' liability insurance or (ii) incurred as a result of AIM's intentional misconduct. In the event JANA or CT-100 is obligated hereunder to pay the expenses of any proceeding against AIM, JANA or CT-100, as applicable, shall be entitled to assume the defense of such proceeding, with counsel approved by AIM, which approval shall not be unreasonably withheld or delayed, upon the delivery to AIM by JANA or CT-100, as applicable, of written notice of its election so to do. The obligations of this paragraph will survive termination of this agreement and will be borne pro-rata based on the proportionate value of the Designated Investments held by the JANA Funds or CT-100. CONFIDENTIALITY: Except as required by law, AIM agrees not to disclose, either during the term of this agreement or at any time thereafter, to any third person, any non-public information obtained by AIM in the performance of AIM's duties hereunder. NOTICES: Notices to AIM shall be delivered to Alex Interactive Media, LLC, Carnegie Hall Tower, 152 West 57th Street, Floor 26, New York, NY 10019, with a copy to Paul@alexinteractivemedia.com. Notices to JANA shall be delivered to JANA Partners LLC, 200 Park Avenue, Suite 3300, New York, New York 10166, Attn: General Counsel. Notices to CT-100 shall be delivered c/o Spark Capital, 137 Newbury Street, 8th Floor, Boston, MA 02116. Notices to Velocity shall be 7 delivered to Velocity Interactive Management, LLC, 305 Lytton Avenue, Palo Alto, CA 94301. MISCELLANEOUS: AIM will be deemed for all purposes to be an independent contractor and acknowledge that this agreement is not an employment contract nor does it create a relationship of employer and employee between JANA or CT-100 and AIM. Consequently, the fees paid hereunder shall not be deemed to be wages, and therefore, shall not be subject to any withholdings or deductions. Neither JANA, CT-100 nor Velocity shall be responsible for payment of any federal, state and local income tax withholding, social security taxes, workers' compensation coverage and unemployment insurance, liability insurance, health or disability insurance, retirement benefits or other welfare or pension benefits. This agreement may be amended only by an agreement in writing signed by the parties. The agreement contains the entire agreement between the parties with respect to the subject matter of this agreement and supersedes all prior agreements and understandings, oral or written, between the parties with respect to the subject matter of this agreement. The provisions of this section will survive termination of this agreement. This agreement may be executed in counterparts, each of which shall constitute an original. The parties each hereby irrevocably consent to the jurisdiction of the courts of the State of New York for all purposes in connection with any action or proceeding which arises out of or relates to this agreement and agree that any action instituted under this agreement shall be brought only in the state courts of the State of New York. This agreement shall be governed by and its provisions construed in accordance with the laws of the State of New York, as applied to contracts between New York residents entered into and to be performed entirely within New York. Nothing in this agreement shall be construed as creating a joint venture, partnership or agency relationship or taxable entity between or among the parties hereto. LIMITATION ON LIABILITY: Neither JANA, CT-100 nor Velocity shall be entitled to seek monetary damages under this agreement from Gardi or AIM (nor any affiliate, shareholder, officer, director, trustee or employee of AIM) in the aggregate in excess of $1 million, other than for fraud or willful misconduct. This limitation of liability is in addition to, and not in limitation of, any limitation on liability provided by law or by this agreement or any other agreement, contract or instrument. FURTHER ASSURANCES: Each party shall, and shall cause their respective affiliates to, at the reasonable request of another party, cooperate with such party by furnishing additional information, executing and delivering additional documents and instruments and undertaking such additional actions as may be reasonably requested by 8 such other parties or its counsel to consummate the transactions contemplated by this agreement, including executing any documents required to be filed by the parties hereto pursuant to any applicable securities laws. TERM: Except as otherwise provided herein with respect to particular provisions, this agreement shall survive until the earlier of (i) the disposition of all or a portion of the consolidated Designated Investment by the applicable JANA Fund or JANA Funds, (ii) three months following CNET's next annual meeting of shareholders and (iii) the date that JANA notifies any other party or publicly announces that it has ceased to pursue or continue the making of any proposals to CNET regarding the conduct of its business or related matters or the conduct of any proxy contest involving CNET, in each case following the commencement of such efforts if so commenced. [SIGNATURE PAGE FOLLOWS] 9 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officer of each party hereto as of the date first above written. JANA PARTNERS LLC By: /s/ Benjamin Hoyer ------------------------ Name: Benjamin Hoyer Title: Partner CT-100 HOLDINGS, LLC By: Spark Capital, L.P., its Managing Member By: Spark Management Partners, LLC, its General Partner By: /s/Santo Politi ------------------------ Name: Santo Politi Title: Managing Member ALEX INTERACTIVE MEDIA, LLC By: /s/Paul Gardi ------------------------ Paul Gardi, Managing Member PAUL GARDI By: /s/Paul Gardi ------------------------ Paul Gardi VELOCITY INTERACTIVE MANAGEMENT, LLC By: /s/Jon Miller ------------------------ Jon Miller, Authorized Signatory 10 EXHIBIT A [Miller Option Agreement] EX-99 6 p07-1802exh_5.txt EXHIBIT 5 This STOCK OPTION AGREEMENT, dated as of December 21, 2007, is made and entered into by and between Velocity Interactive Management, LLC on behalf of itself and its affiliates and designees (the "Purchaser"), and JANA PARTNERS LLC, on behalf of funds and accounts managed by it and its affiliates (the "SELLER"). Capitalized terms not otherwise defined herein have the meanings set forth in Article IV. WHEREAS, the Purchaser desires to acquire from the Seller an option to acquire shares (the "SHARES") of the common stock, par value $0.0001 per share, of CNET Networks, Inc. ("CNET"), on the terms and subject to the conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I GRANT OF OPTION, SALES OF SHARES AND CLOSING 1.01 GRANT OF OPTION. The Seller hereby grants to the Purchaser the right and option to purchase 1,000,000 Shares at a strike price of $10.00 per Share (the "OPTION"). The Purchasers may exercise the Option, in whole or in part, from time to time, from the date hereof through the date which is six (6) months after the date hereof, by delivery of one or more notices (each an "EXERCISE NOTICE") to the Seller by fax to Charles Penner at fax number (212) 692-7695, at or prior to 3:00 p.m. New York City time on the date of exercise, to be accompanied by a phone call to the Seller as follows: Charles Penner at (212) 692-7696 or Jennifer Fanjiang at (212) 692-7696, indicating that such notice has been sent. Each Exercise Notice shall contain instructions (i) specifying the number of Shares to be purchased by each individual Purchaser and (ii) identifying the account(s) to which such Shares are to be delivered. Notwithstanding anything herein to the contrary, the Option shall not be exercisable, or if it has already been exercised the Shares received pursuant to such exercise shall be returned to Seller in exchange for the consideration received, in the event that Jon Miller ("Miller") (i) does not become a member of a slate of nominees of JANA Master Fund, Ltd., (the "NOMINATING PARTY") to stand for election as a director of CNET, other than as a result of the Nominating Party's decision not to so elect, or (ii) does not serve as a director of CNET if so elected or appointed, in each case as set forth in and in accordance with the terms of the nominee agreement between Miller and JANA dated as of the date hereof, or (iii) shall not have entered into such agreement. 1.02 PURCHASE AND SALE. The Seller agrees to and shall sell to the Purchasers, and the Purchasers agree to purchase from the Seller, those Shares subject to each such Exercise Notice at the closing for such Shares as contemplated in Section 1.04 below, on the terms set forth in this Agreement. 1.03 PURCHASE PRICE. The applicable purchase price of $10.00 per Share is payable in immediately available United States funds at the closing for such Shares in the manner provided in SECTION 1.04. 1.04 CLOSING. The Shares to be sold in any particular closing will be delivered by the Seller via DTC-book entry transfers from the Seller to the account of the Purchaser designated in the applicable notice, against delivery of the applicable purchase price, in transactions to be closed not later than the close of trading on the fifth Nasdaq trading day following the date of delivery of the applicable Exercise Notice. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER The Seller hereby represents and warrants to the Purchasers, as of the date hereof and as of the date of each closing, as follows: 2.01 EXISTENCE OF THE SELLER. The Seller is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization or incorporation. The Seller has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby, including without limitation to sell and transfer (pursuant to this Agreement) the Shares. 2.02 AUTHORITY. This Agreement has been duly and validly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms. 2.03 SHARES. The Shares are owned beneficially by the Seller free and clear of all Liens, and at each closing the Seller will transfer to the Purchasers good and valid title to the Shares purchased thereby, free and clear of all Liens. 2.04 NO CONFLICTS. The execution and delivery by the Seller of this Agreement does not, and the performance by the Seller of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not: (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the organizational documents of the Seller or of the funds and accounts under its management; or (b) conflict with or result in a violation or breach of any term or provision of any Contract, Law or Order applicable to the Seller, the funds and accounts under its management or any of the respective Assets and Properties. 2.05 BROKERS. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out on behalf of the Seller directly with the Purchasers without the intervention of any person on behalf of the Seller in such manner as to give rise to any valid claim by any person against the Purchasers for a finder's fee, brokerage commission or similar payment. 2.06 HOLDINGS. At all times after the execution of this Agreement up to an including the date that is six (6) months from the date hereof, the Seller shall continue to hold beneficial ownership of the Shares subject to the Option and one or more custodians for the Seller shall hold record ownership thereof and the Seller shall not loan or sell, or permit the loan or sale of, such Shares. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS The Purchaser hereby represents and warrants to the Seller as follows: 3.01 ORGANIZATION OF THE PURCHASERS. The Purchaser is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization or incorporation. The Purchaser has full authority to execute and deliver this Agreement and to perform its obligations hereunder and to - 2 - consummate the transactions contemplated hereby, including, without limitation, to buy (pursuant to this Agreement) the Shares. 3.02 AUTHORITY. This Agreement has been duly and validly executed and delivered by the Purchaser and constitutes a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms. 3.03 NO CONFLICTS. The execution and delivery by the Purchaser of this Agreement do not, and the performance by the Purchaser of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not: (a) conflict with or result in a violation or breach of any of the terms, conditions or provisions of its organizational documents; or (b) conflict with or result in a violation or breach of any term or provision of any Contract, Law or Order applicable to the Purchaser or any of its Assets and Properties. 3.04 BROKERS. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by the Purchaser directly with the Seller without the intervention of any Person on behalf of the Purchaser in such manner as to give rise to any valid claim by any Person against the Seller for a finder's fee, brokerage commission or similar payment. ARTICLE IV DEFINITIONS 4.01 DEFINITIONS. (a) DEFINED TERMS. As used in this Agreement, the following defined terms have the meanings indicated below: "AGREEMENT" means this Stock Option Agreement, as the same shall be amended from time to time. "ASSETS AND PROPERTIES" of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person. "CONTRACT" means any agreement, lease, license, evidence of indebtedness, mortgage, indenture, security agreement or other contract. "EXERCISE NOTICE" has the meaning ascribed to it in Section 1.01 of this Agreement. "SELLER" has the meaning ascribed to it in the forepart of this Agreement. "LAWS" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States or any state, county, city or other political subdivision or of any governmental or regulatory authority. - 3 - "LIENS" means any mortgage, pledge, assessment, security interest, lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or any conditional sale Contract, title retention Contract or other Contract to give any of the foregoing. "OPTION" has the meaning ascribed to it in Section 1.01 of this Agreement. "PERSON" means any natural person, corporation, limited liability company, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or governmental or regulatory authority. "PURCHASER" has the meaning ascribed to it in the forepart of this Agreement. "SELLER" has the meaning ascribed to it in the forepart of this Agreement. "SHARES" has the meaning ascribed to it in the forepart of this Agreement. ARTICLE V MISCELLANEOUS 5.01 ENTIRE AGREEMENT. This Agreement and the Amended and Restated Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof. 5.02 EXPENSES. Each party will pay its own costs and expenses incurred in connection with the negotiation, execution and closing of this Agreement and the transactions contemplated hereby. 5.03 WAIVER. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law or otherwise afforded, will be cumulative and not alternative. 5.04 AMENDMENT. This Agreement may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto. 5.05 NO THIRD PARTY BENEFICIARY. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person. 5.06 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto without the prior written consent of the other party hereto and any attempt to do so will be void, except for assignments and transfers by operation of Law. Subject to the preceding sentence, this Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and their respective successors and assigns. 5.07 HEADINGS. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. - 4 - 5.08 INVALID PROVISIONS. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, and (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. 5.09 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the Laws of the State of New York applicable to a Contract executed and performed in such State, without giving effect to the conflicts of laws principles thereof. 5.10 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 5.11 AUTHORITY OF AGENT. The Seller hereby represents and warrants to the Purchasers that the Seller has full authority to execute and deliver this Agreement on behalf of the funds and accounts under its management and that the Purchasers may deal with and take instructions from, and rely in dealing with and taking instruction from, the Seller, in all respects with respect to this Agreement and any matter arising in connection therewith. IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officer of each party hereto as of the date first above written. Purchaser: VELOCITY INTERACTIVE MANAGEMENT, LLC By:/s/Rodi Guidero --------------------------------- Name: Rodi Guidero Title: Authorized Signatory Seller: JANA PARTNERS LLC By:/s/Benjamin Hoyer --------------------------------- Name: Benjamin Hoyer Title: Partner - 5 - EX-99 7 p07-1802exh_6.txt EXHIBIT 6 CONFIDENTIAL AGREEMENT Agreement (this "Agreement") dated January 4, 2008 between JANA Partners LLC, a Delaware limited liability company ("JANA", "we" or "us") on behalf of funds and accounts under its management and control and Sandell Asset Management Corp., a Delaware corporation ("Sandell"), relating to investments in and activities related to CNET Networks, Inc. ("CNET"). DESIGNATED INVESTMENTS: For investments in CNET ("Designated Investments") made by funds, accounts or other affiliated entities managed by Sandell or its affiliates (each a "Sandell Fund" and collectively the "Sandell Funds") during the term of this agreement Sandell agrees to hold such investment (excluding the exercise of options to promptly purchase longer-dated options or any other closing out of a derivative position followed by the prompt creation of another investment position) until the earlier of (i) the disposition of all or a portion of the consolidated Designated Investment by funds, accounts or other affiliated entities managed by JANA or its affiliates (each a "JANA Fund" and collectively the "JANA Funds"), other than pursuant to the Option Agreement (the "Option Agreement") between JANA and Velocity Interactive Management ("Velocity") dated December 23, 2007 (provided that if the applicable JANA Fund or JANA Funds dispose of less than all of such Designated Investment, other than pursuant to the Option Agreement, the Sandell Funds may sell pro rata together with the parties to the Amended and Restated Agreement, as defined below, and JANA will provide Sandell with reasonable advance notice so that they may do so), (ii) the commencement of CNET's next annual meeting of shareholders and (iii) the date that JANA notifies any Sandell or publicly announces that it has ceased to pursue or continue the making of any proposals to CNET regarding the conduct of its business or related matters or the conduct of any proxy contest involving CNET, in each case following the commencement of such efforts if so commenced, provided that Sandell may continue to hold such investment beyond such period. With respect to any such investments, Sandell will consult with JANA and provide necessary information so that we may comply with any applicable disclosure or other obligations which may result from such investment. JANA shall prepare and complete any required disclosures including all regulatory filings related thereto or may request that Sandell prepare and complete such disclosures separately. Sandell agrees that no Sandell Fund will invest in any security or option or derivative related to such security following such consultation if JANA so requests, provided that such request is reasonably based upon applicable regulatory considerations, disclosures or restrictions. COMMUNICATIONS: All public statements, regulatory filings or communications, contacts with management and related activity including the conduct of any proxy contest with respect to CNET will be made and conducted by JANA following reasonable consultation with Sandell and the parties to the Amended and Restated Agreement, as defined below, other than JANA. JANA will seek Sandell's input with respect to all such matters. Notwithstanding anything 1 herein to the contrary, the consultation and input provisions of this paragraph shall only be applicable to Sandell should it purchase CNET shares. EXPENSES: Except as otherwise provided herein, each party shall be responsible for paying all of its own costs and expenses incurred in connection with the transactions contemplated by this agreement. Notwithstanding the foregoing, Sandell shall reimburse the parties to the Amended and Restated Agreement dated December 23, 2007 among JANA, CT-100 Holdings, LLC, ("CT-100") an entity formed and controlled by Spark Capital, L.P. and its affiliates ("Spark"), Alex Interactive Media, LLC ("AIM"), Paul Gardi ("Gardi") and Velocity Interactive Management, LLC ("Velocity") (the "Amended and Restated Agreement"), for (i) the portion of the Profit Participation (as defined in the Amended and Restated Agreement) paid by certain parties under the Amended and Restated Agreement which is equal to (x) the percentage of CNET stock or other derivative securities held by the Sandell Funds out of the total amount held by the Sandell Funds and the parties to the Amended and Restated Agreement (calculated using the greatest number of shares or derivative securities held by Sandell and each party during the term of the Amended and Restated Agreement, as applicable) multiplied by (y) the Profit Participation and (ii) the portion of all reasonable out-of-pocket third party expenses related to any proxy contest with respect to CNET (including, without limitation, filing fees, proxy advisory and printing expenses) and any related litigation paid by certain parties under the Amended and Restated Agreement (the "Proxy Expenses") which is equal to (x) the percentage of CNET stock or other derivative securities held by the Sandell Funds out of the total amount held by the Sandell Funds and the parties to the Amended and Restated Agreement (calculated using the greatest number of shares or derivative securities held by Sandell and each party during the term of the Amended and Restated Agreement, as applicable) multiplied by (y) the Proxy Expenses. NOTICES: Notices to JANA shall be delivered to JANA Partners LLC, 200 Park Avenue, Suite 3300, New York, New York 10166, Attn: General Counsel. Notices to Sandell will be delivered to Sandell Asset Management Corp., 40 West 57th Street, New York, NY 10019, Attn: General Counsel. MISCELLANEOUS: This agreement may be amended only by an agreement in writing signed by the parties. The agreement contains the entire agreement between the parties with respect to the subject matter of this agreement and supersedes all prior agreements and understandings, oral or written, between the parties with respect to the subject matter of this agreement. The provisions of this section will survive termination of this agreement. This agreement may be executed in counterparts, each of which shall constitute an original. The parties each hereby irrevocably consent to the jurisdiction of the courts of the State of New York for all purposes in connection with any action or proceeding which arises out of or relates to this agreement and agree that any action instituted under this agreement shall be brought only in the state courts of the State of New York. This agreement shall be governed by and its 2 provisions construed in accordance with the laws of the State of New York, as applied to contracts between New York residents entered into and to be performed entirely within New York. Nothing in this agreement shall be construed as creating a joint venture, partnership or agency relationship or taxable entity between or among the parties hereto. FURTHER ASSURANCES: Each party shall, and shall cause their respective affiliates to, at the reasonable request of another party, cooperate with such party by furnishing additional information, executing and delivering additional documents and instruments and undertaking such additional actions as may be reasonably requested by such other parties or its counsel to consummate the transactions contemplated by this agreement, including executing any documents required to be filed by the parties hereto pursuant to any applicable securities laws. TERM: Except as otherwise provided herein with respect to particular provisions, this agreement shall survive until the earlier of (i) the disposition of all or a portion of the consolidated Designated Investment by the applicable JANA Fund or JANA Funds, (ii) three months following CNET's next annual meeting of shareholders and (iii) the date that JANA notifies any other party or publicly announces that it has ceased to pursue or continue the making of any proposals to CNET regarding the conduct of its business or related matters or the conduct of any proxy contest involving CNET, in each case following the commencement of such efforts if so commenced. [SIGNATURE PAGE FOLLOWS] 3 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officer of each party hereto as of the date first above written. JANA PARTNERS LLC By: /s/ Barry Rosenstein --------------------- Name: Barry Rosenstein Title: Managing Partner SANDELL ASSET MANAGEMENT CORP. By: /s/ Thomas Sandell ------------------- Name: Thomas Sandell Title: Chief Executive Officer 4 EX-99 8 p07-1802exh_7.txt EXHIBIT 7 JANA PARTNERS LLC 200 Park Avenue, Suite 3300 New York, New York 10166 December 23, 2007 Jon Miller Dear Jon: This will confirm our understanding as follows: You agree that you are willing, should we so elect, to become a member of a slate of nominees (the "SLATE") of JANA Master Fund, Ltd., a Cayman Islands exempted company (the "NOMINATING PARTY"), to stand for election as a director of CNET Networks, Inc. ("CNET") in connection with a proxy solicitation (the "PROXY SOLICITATION") to be conducted by the Nominating Party and certain other parties in respect of the 2008 annual meeting of stockholders of CNET expected to be held in June 2008 (including any adjournment or postponement thereof or any special meeting held in lieu thereof, the "ANNUAL MEETING") or appointment or election by other means. You further agree to serve as a director of CNET if so elected or appointed. The undersigned agrees to pay the costs of the Proxy Solicitation. The undersigned also agrees to pay you, on the terms and subject to the conditions set out in Annex A hereto, (i) in the event that you serve on the Slate and are appointed or elected and serve as a director of CNET for the remainder of the term to which you are appointed or elected, the Profit Participation Amount (as defined in Annex A), provided that if you serve only a partial term you shall receive a pro rata portion of the Profit Participation based on the number of months constituting such term which are served, or (ii) in the event that you serve on the Slate until the Annual Meeting (or the earlier abandonment of the Proxy Solicitation) but are not appointed or elected as a director of CNET, $50,000; provided, however, that no such payments shall be made in any event should the option granted to Velocity Interactive Management, LLC ("Velocity") pursuant to the Stock Option Agreement between JANA Partners LLC and Velocity have been exercised, in whole or in part, prior to its expiration and provided, further that any such payments which have already been made will be refunded promptly should such option be exercised following such payments. You understand and agree that such compensation may not be paid to you, or that you may be required to refund such compensation, in the event that this Agreement is terminated by the undersigned for Cause, as more fully set out in Annex A. You understand that it may be difficult, if not impossible, to replace a nominee who, such as yourself, has agreed to serve on the Slate and, if elected, as a director of CNET if such nominee later changes his mind and determines not to serve on the Slate or, if elected, as a director of CNET. Accordingly, the undersigned is relying upon your agreement to serve on the Slate and, if elected, as a director of CNET. In that regard, you are being supplied with a questionnaire (a "QUESTIONNAIRE") in which you will provide the undersigned with information 1 necessary for it to make appropriate disclosure to CNET and to use in creating the proxy materials to be sent to stockholders of CNET and filed with the Securities and Exchange Commission in connection with the Proxy Solicitation. You agree that (i) you will promptly complete and sign the Questionnaire and return it to the person indicated therein, and (ii) your responses in the Questionnaire will be true, complete and correct in all respects. In addition, you agree that, concurrently with your execution of this letter, you will execute and return to the person indicated in the Questionnaire the attached instrument confirming that you consent to being nominated for election as a director of CNET and, if elected, consent to serving as a director of CNET. Upon being notified that we have chosen you, we may forward your consent and completed Questionnaire (or summaries thereof) to CNET, and we may at any time, in our discretion, disclose such information, as well as the existence and contents of this letter. The undersigned agrees that, so long as you actually serve on the Slate, the undersigned will defend, indemnify and hold you harmless from and against any and all losses, claims, damages, penalties, judgments, awards, settlements, liabilities, costs, expenses and disbursements (including, without limitation, reasonable attorneys' fees, costs, expenses and disbursements) incurred by you in the event that you become a party, or are threatened to be made a party, to any civil, criminal, administrative or arbitrative action, suit or proceeding, and any appeal thereof, (i) relating to your role as a nominee for director of CNET on the Slate, or (ii) otherwise arising from or in connection with or relating to the Proxy Solicitation. Your right of indemnification hereunder shall continue after the Annual Meeting has taken place but only for events that occurred prior to the Annual Meeting and subsequent to the date hereof. Anything to the contrary herein notwithstanding, the undersigned is not indemnifying you for any action taken by you or on your behalf that occurs prior to the date hereof or subsequent to the conclusion of the Proxy Solicitation or such earlier time as you are no longer a nominee on the Slate or for any actions taken by you as a director of CNET, if you are elected. Nothing herein shall be construed to provide you with indemnification (i) if you are found to have engaged in a violation of any provision of state or federal law in connection with the Proxy Solicitation unless you demonstrate that your action was taken in good faith and in a manner you reasonably believed to be in or not opposed to the best interests of electing the Slate; (ii) if you acted in a manner that constitutes gross negligence or willful misconduct; or (iii) if you provided false or misleading information, or omitted material information, in the Questionnaire or otherwise in connection with the Proxy Solicitation. You shall promptly notify the undersigned in writing in the event of any third-party claims actually made against you or known by you to be threatened if you intend to seek indemnification hereunder in respect of such claims. In addition, upon your delivery of notice with respect to any such claim, the undersigned shall promptly assume control of the defense of such claim with counsel chosen by the undersigned. The undersigned shall not be responsible for any settlement of any claim against you covered by this indemnity without its prior written consent. However, the undersigned may not enter into any settlement of any such claim without your consent unless such settlement includes (i) no admission of liability or guilt by you, and (ii) a release of you from any and all liability in respect of such claim. If you are required to enforce the obligations of the undersigned in this letter in a court of competent jurisdiction, or to recover damages for breach of this letter, the undersigned will pay on your behalf, in advance, any and all expenses (including, without limitation, reasonable attorneys' fees, costs, expenses and disbursements) 2 actually and reasonably incurred by you in such action, regardless of whether you are ultimately determined to be entitled to such indemnification or advancement of expenses. Each of us recognizes that should you be elected to the Board of Directors of CNET all of your activities and decisions as a director will be governed by applicable law and subject to your fiduciary duties, as applicable, to CNET and to the stockholders of CNET and, as a result, that there is, and can be, no agreement between you and the undersigned that governs the decisions which you will make as a director of CNET. 3 This letter sets forth the entire agreement between the undersigned and you as to the subject matter contained herein, and cannot be amended, modified or terminated except by a writing executed by the undersigned and you. This letter shall be governed by the laws of the State of New York, without giving effect to principles of conflicts of law. Should the foregoing agree with your understanding, please so indicate in the space provided below, whereupon this letter will become a binding agreement between us. Very truly yours, JANA PARTNERS LLC By: /s/Benjamin Hoyer ---------------------------------------------- Name: Benjamin Hoyer Title: Partner CT-100 HOLDINGS, LLC By: Spark Capital, L.P., its Managing Member By: Spark Management Partners, LLC, its General Partner By: /s/Santo Politi ---------------------------------------------- Name: Santo Politi Title: Managing Member Agreed to and accepted as of the date first written above: /s/Jon Miller - --------------------------- Name: Jon Miller 4 ANNEX A The "Profit Participation Amount" shall equal one-half of one percent (0.5%) of the net profits (net of expenses including advisory and consulting fees including profit participations) from investments in CNET made prior to June 1, 2008 (a "QUALIFYING CNET INVESTMENT") of (A) funds, accounts or other affiliated entities managed by JANA Partners LLC ("JANA") or its affiliates (each a "JANA FUND" and collectively the "JANA FUNDS") and (B) CT-100 Holdings, LLC or funds, accounts or other affiliated entities managed by Spark Capital, LP or its affiliates (each, a "CT-100 FUND" and collectively the "CT-100 Funds"). You will receive all or any portion of the Profit Participation Amount upon the realization of any cash proceeds (or receipt of non-cash consideration including the value of any securities received in exchange for such investment in CNET) by any JANA Fund or CT-100 Fund (excluding the exercise of options to promptly purchase longer-dated options or any other closing out of a derivative position followed by the prompt creation of another investment position); provided, however, that if upon or after the third anniversary of this Agreement any JANA Fund or CT-100 Fund, as applicable, shall not have disposed of any Qualifying CNET Investment, at your request each will be deemed for purposes of this agreement to have disposed of such Qualifying CNET Investment on the date of your request on or after such third anniversary and you will be paid any remaining Profit Participation Amount attributable to such remaining Qualifying CNET Investment due to you promptly in cash. You understand and agree that the compensation described in this Agreement may not be paid to you, and you further agree to refund any compensation already paid to you, in the event that this Agreement is terminated by JANA for Cause. "Cause" shall mean (i) fraud or willful misconduct by you, (ii) a material violation by you of applicable laws, or (iii) your refusal to serve as a nominee for the Board of Directors of CNET or as a member of the Board of Directors of CNET. 5 EX-99 9 p07-1802exh_8.txt EXHIBIT 8 JANA PARTNERS LLC 200 Park Avenue, Suite 3300 New York, New York 10166 December 25, 2007 Julius Genachowski Dear Julius: This will confirm our understanding as follows: You agree that you are willing, should we so elect, to become a member of a slate of nominees (the "SLATE") of JANA Master Fund, Ltd., a Cayman Islands exempted company (the "NOMINATING PARTY"), to stand for election as a director of CNET Networks, Inc. ("CNET") in connection with a proxy solicitation (the "PROXY SOLICITATION") to be conducted by the Nominating Party and certain other parties in respect of the 2008 annual meeting of stockholders of CNET expected to be held in June 2008 (including any adjournment or postponement thereof or any special meeting held in lieu thereof, the "ANNUAL MEETING") or appointment or election by other means. You further agree to serve as a director of CNET if so elected or appointed. The undersigned agrees to pay the costs of the Proxy Solicitation. The undersigned also agrees to pay you, on the terms and subject to the conditions set out in Annex A hereto, (i) in the event that you serve on the Slate and are appointed or elected and serve as a director of CNET for the remainder of the term to which you are appointed or elected, the Profit Participation Amount (as defined in Annex A), provided that if you serve only a partial term you shall receive a pro rata portion of the Profit Participation based on the number of months constituting such term which are served, or (ii) in the event that you serve on the Slate until the Annual Meeting (or the earlier abandonment of the Proxy Solicitation) but are not appointed or elected as a director of CNET, $50,000. You understand and agree that such compensation may not be paid to you, or that you may be required to refund such compensation, in the event that this Agreement is terminated by the undersigned for Cause, as more fully set out in Annex A. You understand that it may be difficult, if not impossible, to replace a nominee who, such as yourself, has agreed to serve on the Slate and, if elected, as a director of CNET if such nominee later changes his mind and determines not to serve on the Slate or, if elected, as a director of CNET. Accordingly, the undersigned is relying upon your agreement to serve on the Slate and, if elected, as a director of CNET. In that regard, you are being supplied with a questionnaire (a "QUESTIONNAIRE") in which you will provide the undersigned with information necessary for it to make appropriate disclosure to CNET and to use in creating the proxy materials to be sent to stockholders of CNET and filed with the Securities and Exchange Commission in connection with the Proxy Solicitation. You agree that (i) you will promptly complete and sign the Questionnaire and return it to the person indicated therein, and (ii) your responses in the Questionnaire will be true, complete and correct in all respects. In addition, you 1 agree that, concurrently with your execution of this letter, you will execute and return to the person indicated in the Questionnaire the attached instrument confirming that you consent to being nominated for election as a director of CNET and, if elected, consent to serving as a director of CNET. Upon being notified that we have chosen you, we may forward your consent and completed Questionnaire (or summaries thereof) to CNET, and we may at any time, in our discretion, disclose such information, as well as the existence and contents of this letter. The undersigned agrees that, so long as you actually serve on the Slate, the undersigned will defend, indemnify and hold you harmless from and against any and all losses, claims, damages, penalties, judgments, awards, settlements, liabilities, costs, expenses and disbursements (including, without limitation, reasonable attorneys' fees, costs, expenses and disbursements) incurred by you in the event that you become a party, or are threatened to be made a party, to any civil, criminal, administrative or arbitrative action, suit or proceeding, and any appeal thereof, (i) relating to your role as a nominee for director of CNET on the Slate, or (ii) otherwise arising from or in connection with or relating to the Proxy Solicitation. Your right of indemnification hereunder shall continue after the Annual Meeting has taken place but only for events that occurred prior to the Annual Meeting and subsequent to the date hereof. Anything to the contrary herein notwithstanding, the undersigned is not indemnifying you for any action taken by you or on your behalf that occurs prior to the date hereof or subsequent to the conclusion of the Proxy Solicitation or such earlier time as you are no longer a nominee on the Slate or for any actions taken by you as a director of CNET, if you are elected. Nothing herein shall be construed to provide you with indemnification (i) if you are found to have engaged in a violation of any provision of state or federal law in connection with the Proxy Solicitation unless you demonstrate that your action was taken in good faith and in a manner you reasonably believed to be in or not opposed to the best interests of electing the Slate; (ii) if you acted in a manner that constitutes gross negligence or willful misconduct; or (iii) if you provided false or misleading information, or omitted material information, in the Questionnaire or otherwise in connection with the Proxy Solicitation. You shall promptly notify the undersigned in writing in the event of any third-party claims actually made against you or known by you to be threatened if you intend to seek indemnification hereunder in respect of such claims. In addition, upon your delivery of notice with respect to any such claim, the undersigned shall promptly assume control of the defense of such claim with counsel chosen by the undersigned. The undersigned shall not be responsible for any settlement of any claim against you covered by this indemnity without its prior written consent. However, the undersigned may not enter into any settlement of any such claim without your consent unless such settlement includes (i) no admission of liability or guilt by you, and (ii) a release of you from any and all liability in respect of such claim. If you are required to enforce the obligations of the undersigned in this letter in a court of competent jurisdiction, or to recover damages for breach of this letter, the undersigned will pay on your behalf, in advance, any and all expenses (including, without limitation, reasonable attorneys' fees, costs, expenses and disbursements) actually and reasonably incurred by you in such action, regardless of whether you are ultimately determined to be entitled to such indemnification or advancement of expenses. Each of us recognizes that should you be elected to the Board of Directors of CNET all of your activities and decisions as a director will be governed by applicable law and subject to your fiduciary duties, as applicable, to CNET and to the stockholders of CNET and, as 2 a result, that there is, and can be, no agreement between you and the undersigned that governs the decisions which you will make as a director of CNET. 3 This letter sets forth the entire agreement between the undersigned and you as to the subject matter contained herein, and cannot be amended, modified or terminated except by a writing executed by the undersigned and you. This letter shall be governed by the laws of the State of New York, without giving effect to principles of conflicts of law. Should the foregoing agree with your understanding, please so indicate in the space provided below, whereupon this letter will become a binding agreement between us. Very truly yours, JANA PARTNERS LLC By: /s/Benjamin Hoyer ---------------------------------------------- Name: Benjamin Hoyer Title: Partner CT-100 HOLDINGS, LLC By: Spark Capital, L.P., its Managing Member By: Spark Management Partners, LLC, its General Partner By: /s/Santo Politi ---------------------------------------------- Name: Santo Politi Title: Managing Member Agreed to and accepted as of the date first written above: /s/ Julius Genachowski - --------------------------- Name: Julius Genachowski 4 ANNEX A The "Profit Participation Amount" shall equal 30 basis points (0.3%) of the net profits (net of expenses including advisory and consulting fees including profit participations) from investments in CNET made prior to June 1, 2008 (a "QUALIFYING CNET INVESTMENT") of (A) funds, accounts or other affiliated entities managed by JANA Partners LLC ("JANA") or its affiliates (each a "JANA FUND" and collectively the "JANA FUNDS") and (B) CT-100 Holdings, LLC or funds, accounts or other affiliated entities managed by Spark Capital, LP or its affiliates (each, a "CT-100 FUND" and collectively the "CT-100 Funds"). You will receive all or any portion of the Profit Participation Amount upon the realization of any cash proceeds (or receipt of non-cash consideration including the value of any securities received in exchange for such investment in CNET) by any JANA Fund or CT-100 Fund (excluding the exercise of options to promptly purchase longer-dated options or any other closing out of a derivative position followed by the prompt creation of another investment position); provided, however, that if upon or after the third anniversary of this Agreement any JANA Fund or CT-100 Fund, as applicable, shall not have disposed of any Qualifying CNET Investment, at your request each will be deemed for purposes of this agreement to have disposed of such Qualifying CNET Investment on the date of your request on or after such third anniversary and you will be paid any remaining Profit Participation Amount attributable to such remaining Qualifying CNET Investment due to you promptly in cash. You understand and agree that the compensation described in this Agreement may not be paid to you, and you further agree to refund any compensation already paid to you, in the event that this Agreement is terminated by JANA for Cause. "Cause" shall mean (i) fraud or willful misconduct by you, (ii) a material violation by you of applicable laws, or (iii) your refusal to serve as a nominee for the Board of Directors of CNET or as a member of the Board of Directors of CNET. 5 EX-99 10 p07-1802exh_9.txt EXHIBIT 9 JANA PARTNERS LLC 200 Park Avenue, Suite 3300 New York, New York 10166 December 23, 2007 Jaynie Studenmund Dear Jaynie: This will confirm our understanding as follows: You agree that you are willing, should we so elect, to become a member of a slate of nominees (the "SLATE") of JANA Master Fund, Ltd., a Cayman Islands exempted company (the "NOMINATING PARTY"), to stand for election as a director of CNET Networks, Inc. ("CNET") in connection with a proxy solicitation (the "PROXY SOLICITATION") to be conducted by the Nominating Party and certain other parties in respect of the 2008 annual meeting of stockholders of CNET expected to be held in June 2008 (including any adjournment or postponement thereof or any special meeting held in lieu thereof, the "ANNUAL MEETING") or appointment or election by other means. You further agree to serve as a director of CNET if so elected or appointed. The undersigned agrees to pay the costs of the Proxy Solicitation. The undersigned also agrees to pay you, on the terms and subject to the conditions set out in Annex A hereto, (i) in the event that you serve on the Slate and are appointed or elected and serve as a director of CNET for the remainder of the term to which you are appointed or elected, the Profit Participation Amount (as defined in Annex A), provided that if you serve only a partial term you shall receive a pro rata portion of the Profit Participation based on the number of months constituting such term which are served, or (ii) in the event that you serve on the Slate until the Annual Meeting (or the earlier abandonment of the Proxy Solicitation) but are not appointed or elected as a director of CNET, $50,000. You understand and agree that such compensation may not be paid to you, or that you may be required to refund such compensation, in the event that this Agreement is terminated by the undersigned for Cause, as more fully set out in Annex A. You understand that it may be difficult, if not impossible, to replace a nominee who, such as yourself, has agreed to serve on the Slate and, if elected, as a director of CNET if such nominee later changes his mind and determines not to serve on the Slate or, if elected, as a director of CNET. Accordingly, the undersigned is relying upon your agreement to serve on the Slate and, if elected, as a director of CNET. In that regard, you are being supplied with a questionnaire (a "QUESTIONNAIRE") in which you will provide the undersigned with information necessary for it to make appropriate disclosure to CNET and to use in creating the proxy materials to be sent to stockholders of CNET and filed with the Securities and Exchange Commission in connection with the Proxy Solicitation. You agree that (i) you will promptly complete and sign the Questionnaire and return it to the person indicated therein, and (ii) your responses in the Questionnaire will be true, complete and correct in all respects. In addition, you 1 agree that, concurrently with your execution of this letter, you will execute and return to the person indicated in the Questionnaire the attached instrument confirming that you consent to being nominated for election as a director of CNET and, if elected, consent to serving as a director of CNET. Upon being notified that we have chosen you, we may forward your consent and completed Questionnaire (or summaries thereof) to CNET, and we may at any time, in our discretion, disclose such information, as well as the existence and contents of this letter. The undersigned agrees that, so long as you actually serve on the Slate, the undersigned will defend, indemnify and hold you harmless from and against any and all losses, claims, damages, penalties, judgments, awards, settlements, liabilities, costs, expenses and disbursements (including, without limitation, reasonable attorneys' fees, costs, expenses and disbursements) incurred by you in the event that you become a party, or are threatened to be made a party, to any civil, criminal, administrative or arbitrative action, suit or proceeding, and any appeal thereof, (i) relating to your role as a nominee for director of CNET on the Slate, or (ii) otherwise arising from or in connection with or relating to the Proxy Solicitation. Your right of indemnification hereunder shall continue after the Annual Meeting has taken place but only for events that occurred prior to the Annual Meeting and subsequent to the date hereof. Anything to the contrary herein notwithstanding, the undersigned is not indemnifying you for any action taken by you or on your behalf that occurs prior to the date hereof or subsequent to the conclusion of the Proxy Solicitation or such earlier time as you are no longer a nominee on the Slate or for any actions taken by you as a director of CNET, if you are elected. Nothing herein shall be construed to provide you with indemnification (i) if you are found to have engaged in a violation of any provision of state or federal law in connection with the Proxy Solicitation unless you demonstrate that your action was taken in good faith and in a manner you reasonably believed to be in or not opposed to the best interests of electing the Slate; (ii) if you acted in a manner that constitutes gross negligence or willful misconduct; or (iii) if you provided false or misleading information, or omitted material information, in the Questionnaire or otherwise in connection with the Proxy Solicitation. You shall promptly notify the undersigned in writing in the event of any third-party claims actually made against you or known by you to be threatened if you intend to seek indemnification hereunder in respect of such claims. In addition, upon your delivery of notice with respect to any such claim, the undersigned shall promptly assume control of the defense of such claim with counsel chosen by the undersigned. The undersigned shall not be responsible for any settlement of any claim against you covered by this indemnity without its prior written consent. However, the undersigned may not enter into any settlement of any such claim without your consent unless such settlement includes (i) no admission of liability or guilt by you, and (ii) a release of you from any and all liability in respect of such claim. If you are required to enforce the obligations of the undersigned in this letter in a court of competent jurisdiction, or to recover damages for breach of this letter, the undersigned will pay on your behalf, in advance, any and all expenses (including, without limitation, reasonable attorneys' fees, costs, expenses and disbursements) actually and reasonably incurred by you in such action, regardless of whether you are ultimately determined to be entitled to such indemnification or advancement of expenses. Each of us recognizes that should you be elected to the Board of Directors of CNET all of your activities and decisions as a director will be governed by applicable law and subject to your fiduciary duties, as applicable, to CNET and to the stockholders of CNET and, as 2 a result, that there is, and can be, no agreement between you and the undersigned that governs the decisions which you will make as a director of CNET. 3 This letter sets forth the entire agreement between the undersigned and you as to the subject matter contained herein, and cannot be amended, modified or terminated except by a writing executed by the undersigned and you. This letter shall be governed by the laws of the State of New York, without giving effect to principles of conflicts of law. Should the foregoing agree with your understanding, please so indicate in the space provided below, whereupon this letter will become a binding agreement between us. Very truly yours, JANA PARTNERS LLC By: /s/Benjamin Hoyer -------------------------------------------- Name: Benjamin Hoyer Title: Partner CT-100 HOLDINGS, LLC By: Spark Capital, L.P., its Managing Member By: Spark Management Partners, LLC, its General Partner By: /s/Santo Politi -------------------------------------------- Name: Santo Politi Title: Managing Member Agreed to and accepted as of the date first written above: /s/Jaynie Studenmund - --------------------------- Name: Jaynie Studenmund 4 ANNEX A The "Profit Participation Amount" shall equal 30 basis points (0.3%) of the net profits (net of expenses including advisory and consulting fees including profit participations) from investments in CNET made prior to June 1, 2008 (a "QUALIFYING CNET INVESTMENT") of (A) funds, accounts or other affiliated entities managed by JANA Partners LLC ("JANA") or its affiliates (each a "JANA FUND" and collectively the "JANA FUNDS") and (B) CT-100 Holdings, LLC or funds, accounts or other affiliated entities managed by Spark Capital, LP or its affiliates (each, a "CT-100 FUND" and collectively the "CT-100 Funds"). You will receive all or any portion of the Profit Participation Amount upon the realization of any cash proceeds (or receipt of non-cash consideration including the value of any securities received in exchange for such investment in CNET) by any JANA Fund or CT-100 Fund (excluding the exercise of options to promptly purchase longer-dated options or any other closing out of a derivative position followed by the prompt creation of another investment position); provided, however, that if upon or after the third anniversary of this Agreement any JANA Fund or CT-100 Fund, as applicable, shall not have disposed of any Qualifying CNET Investment, at your request each will be deemed for purposes of this agreement to have disposed of such Qualifying CNET Investment on the date of your request on or after such third anniversary and you will be paid any remaining Profit Participation Amount attributable to such remaining Qualifying CNET Investment due to you promptly in cash. You understand and agree that the compensation described in this Agreement may not be paid to you, and you further agree to refund any compensation already paid to you, in the event that this Agreement is terminated by JANA for Cause. "Cause" shall mean (i) fraud or willful misconduct by you, (ii) a material violation by you of applicable laws, or (iii) your refusal to serve as a nominee for the Board of Directors of CNET or as a member of the Board of Directors of CNET. 5 EX-99 11 p07-1802exh_10.txt EXHIBIT 10 JANA PARTNERS LLC 200 Park Avenue, Suite 3300 New York, New York 10166 As of December 21, 2007 Brian Weinstein Dear Brian: This will confirm our understanding as follows: You agree that you are willing, should we so elect, to become a member of a slate of nominees (the "SLATE") of JANA Master Fund, Ltd., a Cayman Islands exempted company (the "NOMINATING PARTY"), to stand for election as a director of CNET Networks, Inc. ("CNET") in connection with a proxy solicitation (the "PROXY SOLICITATION") to be conducted by the Nominating Party and certain other parties in respect of the 2008 annual meeting of stockholders of CNET expected to be held in June 2008 (including any adjournment or postponement thereof or any special meeting held in lieu thereof, the "ANNUAL MEETING") or appointment or election by other means. You further agree to serve as a director of CNET if so elected or appointed. The undersigned agrees to pay the costs of the Proxy Solicitation. The undersigned also agrees to pay you, on the terms and subject to the conditions set out in Annex A hereto, (i) in the event that you serve on the Slate and are appointed or elected and serve as a director of CNET for the remainder of the term to which you are appointed or elected, the Profit Participation Amount (as defined in Annex A), provided that if you serve only a partial term you shall receive a pro rata portion of the Profit Participation based on the number of months constituting such term which are served, or (ii) in the event that you serve on the Slate until the Annual Meeting (or the earlier abandonment of the Proxy Solicitation) but are not appointed or elected as a director of CNET, $50,000. You understand and agree that such compensation may not be paid to you, or that you may be required to refund such compensation, in the event that this Agreement is terminated by the undersigned for Cause, as more fully set out in Annex A. You understand that it may be difficult, if not impossible, to replace a nominee who, such as yourself, has agreed to serve on the Slate and, if elected, as a director of CNET if such nominee later changes his mind and determines not to serve on the Slate or, if elected, as a director of CNET. Accordingly, the undersigned is relying upon your agreement to serve on the Slate and, if elected, as a director of CNET. In that regard, you are being supplied with a questionnaire (a "QUESTIONNAIRE") in which you will provide the undersigned with information necessary for it to make appropriate disclosure to CNET and to use in creating the proxy materials to be sent to stockholders of CNET and filed with the Securities and Exchange Commission in connection with the Proxy Solicitation. You agree that (i) you will promptly complete and sign the Questionnaire and return it to the person indicated therein, and (ii) your 1 responses in the Questionnaire will be true, complete and correct in all respects. In addition, you agree that, concurrently with your execution of this letter, you will execute and return to the person indicated in the Questionnaire the attached instrument confirming that you consent to being nominated for election as a director of CNET and, if elected, consent to serving as a director of CNET. Upon being notified that we have chosen you, we may forward your consent and completed Questionnaire (or summaries thereof) to CNET, and we may at any time, in our discretion, disclose such information, as well as the existence and contents of this letter. The undersigned agrees that, so long as you actually serve on the Slate, the undersigned will defend, indemnify and hold you harmless from and against any and all losses, claims, damages, penalties, judgments, awards, settlements, liabilities, costs, expenses and disbursements (including, without limitation, reasonable attorneys' fees, costs, expenses and disbursements) incurred by you in the event that you become a party, or are threatened to be made a party, to any civil, criminal, administrative or arbitrative action, suit or proceeding, and any appeal thereof, (i) relating to your role as a nominee for director of CNET on the Slate, or (ii) otherwise arising from or in connection with or relating to the Proxy Solicitation. Your right of indemnification hereunder shall continue after the Annual Meeting has taken place but only for events that occurred prior to the Annual Meeting and subsequent to the date hereof. Anything to the contrary herein notwithstanding, the undersigned is not indemnifying you for any action taken by you or on your behalf that occurs prior to the date hereof or subsequent to the conclusion of the Proxy Solicitation or such earlier time as you are no longer a nominee on the Slate or for any actions taken by you as a director of CNET, if you are elected. Nothing herein shall be construed to provide you with indemnification (i) if you are found to have engaged in a violation of any provision of state or federal law in connection with the Proxy Solicitation unless you demonstrate that your action was taken in good faith and in a manner you reasonably believed to be in or not opposed to the best interests of electing the Slate; (ii) if you acted in a manner that constitutes gross negligence or willful misconduct; or (iii) if you provided false or misleading information, or omitted material information, in the Questionnaire or otherwise in connection with the Proxy Solicitation. You shall promptly notify the undersigned in writing in the event of any third-party claims actually made against you or known by you to be threatened if you intend to seek indemnification hereunder in respect of such claims. In addition, upon your delivery of notice with respect to any such claim, the undersigned shall promptly assume control of the defense of such claim with counsel chosen by the undersigned. The undersigned shall not be responsible for any settlement of any claim against you covered by this indemnity without its prior written consent. However, the undersigned may not enter into any settlement of any such claim without your consent unless such settlement includes (i) no admission of liability or guilt by you, and (ii) a release of you from any and all liability in respect of such claim. If you are required to enforce the obligations of the undersigned in this letter in a court of competent jurisdiction, or to recover damages for breach of this letter, the undersigned will pay on your behalf, in advance, any and all expenses (including, without limitation, reasonable attorneys' fees, costs, expenses and disbursements) actually and reasonably incurred by you in such action, regardless of whether you are ultimately determined to be entitled to such indemnification or advancement of expenses. Each of us recognizes that should you be elected to the Board of Directors of CNET all of your activities and decisions as a director will be governed by applicable law and 2 subject to your fiduciary duties, as applicable, to CNET and to the stockholders of CNET and, as a result, that there is, and can be, no agreement between you and the undersigned that governs the decisions which you will make as a director of CNET. 3 This letter sets forth the entire agreement between the undersigned and you as to the subject matter contained herein, and cannot be amended, modified or terminated except by a writing executed by the undersigned and you. This letter shall be governed by the laws of the State of New York, without giving effect to principles of conflicts of law. Should the foregoing agree with your understanding, please so indicate in the space provided below, whereupon this letter will become a binding agreement between us. Very truly yours, JANA PARTNERS LLC By:/s/Benjamin Hoyer ------------------------------------------- Name: Benjamin Hoyer Title: Partner CT-100 HOLDINGS, LLC By: Spark Capital, L.P., its Managing Member By: Spark Management Partners, LLC, its General Partner By: /s/Santo Politi --------------------------------------------- Name: Santo Politi Title: Managing Member Agreed to and accepted as of the date first written above: /s/Brian Weinstein - --------------------------- Name: Brian Weinstein 4 ANNEX A The "Profit Participation Amount" shall equal 10 basis points (0.1%) of the net profits (net of expenses including advisory and consulting fees including profit participations) from investments in CNET made prior to June 1, 2008 (a "QUALIFYING CNET INVESTMENT") of (A) funds, accounts or other affiliated entities managed by JANA Partners LLC ("JANA") or its affiliates (each a "JANA FUND" and collectively the "JANA FUNDS") and (B) CT-100 Holdings, LLC or funds, accounts or other affiliated entities managed by Spark Capital, LP or its affiliates (each, a "CT-100 FUND" and collectively the "CT-100 Funds"). You will receive all or any portion of the Profit Participation Amount upon the realization of any cash proceeds (or receipt of non-cash consideration including the value of any securities received in exchange for such investment in CNET) by any JANA Fund or CT-100 Fund (excluding the exercise of options to promptly purchase longer-dated options or any other closing out of a derivative position followed by the prompt creation of another investment position); provided, however, that if upon or after the third anniversary of this Agreement any JANA Fund or CT-100 Fund, as applicable, shall not have disposed of any Qualifying CNET Investment, at your request each will be deemed for purposes of this agreement to have disposed of such Qualifying CNET Investment on the date of your request on or after such third anniversary and you will be paid any remaining Profit Participation Amount attributable to such remaining Qualifying CNET Investment due to you promptly in cash. You understand and agree that the compensation described in this Agreement may not be paid to you, and you further agree to refund any compensation already paid to you, in the event that this Agreement is terminated by JANA for Cause. "Cause" shall mean (i) fraud or willful misconduct by you, (ii) a material violation by you of applicable laws, or (iii) your refusal to serve as a nominee for the Board of Directors of CNET or as a member of the Board of Directors of CNET. 5 EX-99 12 p07-1802exh_11.txt EXHIBIT 11 EXHIBIT 11 JOINT FILING AGREEMENT PURSUANT TO RULE 13d-1(k) The undersigned acknowledge and agree that the foregoing statement on Schedule 13D is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13D may be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained herein and therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that he or it knows or has reason to believe that such information is inaccurate. Dated: January 7, 2008 JANA PARTNERS LLC BY: /S/BARRY ROSENSTEIN --------------------------- Name: Barry Rosenstein Title: Managing Partner BY: /S/GARY CLAAR --------------------------- Name: Gary Claar Title: General Partner SPARK MANAGEMENT PARTNERS, L.L.C. BY: /S/SANTO POLITI --------------------------- Name: Santo Politi Title: Managing Member VELOCITY INTERACTIVE MANAGEMENT, LLC BY: /S/JONATHAN MILLER --------------------------- Name: Jonathan Miller Title: Authorized Signatory ALEX INTERACTIVE MEDIA, LLC BY: /S/PAUL GARDI --------------------------- Name: Paul Gardi Title: Managing Member -----END PRIVACY-ENHANCED MESSAGE-----