As filed with the Securities and Exchange Commission on April 24, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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ZIFF-DAVIS INC.
(Exact name of Registrant as specified in its charter)
NEW YORK 13-3987754
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
LAUREN BONFIELD
28 EAST 28TH STREET ZIFF-DAVIS INC.
NEW YORK, NEW YORK 10016 28 EAST 28TH STREET
(212) 503-3500 NEW YORK, NEW YORK 10016
(Address, including zip code, (212) 503-3500
and telephone number, including (Name, address, including zip code
area code, of Registrant's and telephone number, including
principal executive offices) area code, of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such
time or times as may be determined by the selling shareholders after this
Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT, THIS REGISTRATION STATEMENT
INCLUDES A PROSPECTUS COVERING SHARES REGISTERED PURSUANT TO REGISTRATION
STATEMENT NUMBERS 333-84555, 333-89597 AND 333-30964.
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
TITLE OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT
SHARES TO TO BE AGGREGATE PRICE AGGREGATE OFFERING OF REGISTRATION
BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE (1)(2) FEE(3)
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<S> <C> <C> <C> <C>
Ziff-Davis Inc. -- ZDNet
Common Stock, par value $0.01
per share...................... 318,441 shares $11 54/64 $3,771,535 $995.69
======================================================================================================================
<FN>
(1) Excludes shares being carried over from prior registration statements.
See Note (3) below.
(2) Estimated in accordance with Rule 457(c) under the Securities Act
solely for purposes of calculating the registration fee (based on the
average of the high and low prices per Ziff-Davis Inc.-ZDNet Common Stock
as reported on the New York Stock Exchange ("NYSE") on April 24, 2000).
(3) Pursuant to Rule 429 under the Securities Act, 1,180,173, 180,000 and
186,046 shares (less any shares already sold) are being carried forward
from registration statement numbers 333-84555, 333-89597 and 333-30964,
respectively, and are included as securities available for sale under the
prospectus filed herewith. An aggregate filing fee of $9,312.53 was
previously paid in connection with those registration statements.
</FN>
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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TEXT OF RED HERRING
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS (SUBJECT TO COMPLETION)
April [o], 2000
ZIFF-DAVIS INC.
318,441 SHARES OF ZDNET COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
Various selling stockholders named later in this prospectus may be
offering up to 318,441 shares of ZDNet common stock for sale from time to time.
Ziff-Davis will not receive any of the proceeds from these sales.
The selling stockholders have informed us that they propose to offer
these shares in several different ways, including through brokers in ordinary
brokerage transactions or to underwriters or dealers in negotiated transactions.
The selling stockholders may offer their shares at various prices, including:
o at prevailing market prices,
o at prices related to prevailing market prices or
o at negotiated prices.
ZDNet common stock trades on the New York Stock Exchange under the
symbol "ZDZ." On April [o], 2000, the closing price reported on the New York
Stock Exchange was $[o] per share.
INVESTMENT IN THE SHARES INVOLVES SIGNIFICANT RISKS. YOU SHOULD READ
THE INFORMATION UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE 4 TO LEARN
ABOUT SOME FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN THE SHARES.
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NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ADEQUATE OR ACCURATE. IT
IS ILLEGAL FOR ANYONE TO TELL YOU OTHERWISE.
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THE DATE OF THE PROSPECTUS IS APRIL [O], 2000
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TABLE OF CONTENTS
PAGE
Ziff-Davis Inc.............................................................. 3
Recent Developments......................................................... 3
Risk Factors................................................................ 5
Where You Can Find More Information......................................... 16
The Selling Stockholders.................................................... 18
Plan of Distribution........................................................ 20
Use of Proceeds............................................................. 22
Cautionary Statement Regarding Forward-Looking Statements................... 22
Validity of Common Stock.................................................... 22
Experts..................................................................... 22
ZIFF-DAVIS INC.
Ziff-Davis is a leading media and marketing company focused on computing
and Internet-related technologies. Through our ZDNet division, which we call
"ZDNet," we provide online content and other Internet-related services. Through
our ZD division, which we call "ZD," we are or have been engaged in the print
publishing, trade shows and conferences, education and television businesses.
We currently have two series of common stock, ZDNet common stock
(NYSE:ZDZ), which we call "ZDNet stock," and ZD common stock (NYSE:ZD), which we
call "ZD stock." Each of these series is what is commonly referred to as a
"tracking stock." ZDNet stock is intended to track the performance of ZDNet and
ZD common stock is intended to track the performance of ZD. In addition to the
ZD businesses referred to above, ZD has a retained interest in ZDNet which is
currently the equivalent of 60 million shares of ZDNet stock.
The mailing address of our principal executive offices is 28 East 28th
Street, New York, New York 10016. Our telephone number is (212) 503-3500.
RECENT DEVELOPMENTS
We are in the process of disposing of substantially all of our ZD
businesses and repaying all of our debt as part of a comprehensive restructuring
described in our proxy statement dated February 7, 2000 (our "Proxy Statement")
and our annual report on Form 10-K for the year ended December 31, 1999 (our
"1999 Form 10-K"). We have already completed the sale of ZD Market Intelligence,
ZD Education (excluding Smart Planet), ZD Publishing (excluding Computer Shopper
and our investment in Red Herring Communications) and our equity interest in
ZDTV. In addition, we announced on March 7, 2000 that we intend to recapitalize
and spin off our ZD Events group to the holders of ZD stock.
As part of the restructuring, we intend to eliminate our tracking stock
structure and make ZDNet a standalone independent Internet company. We will
accomplish this by merging Ziff-Davis with a newly formed subsidiary so that all
current holders of our ZD stock and ZDNet stock will hold their investments
through a single class of ordinary common stock. We will rename the surviving
company ZDNet Inc.
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The restructuring transactions referred to above and the risks related
thereto are described in more detail in our Proxy Statement and our 1999 Form
10-K, each of which we incorporate herein by reference.
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RISK FACTORS
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You should carefully consider the risk factors described below, as well as the
other information included or incorporated by reference in this prospectus,
before buying shares of ZDNet stock.
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RISK FACTORS RELATING TO THE RESTRUCTURING
THE RECAPITALIZATION AND SPIN-OFF OF ZD EVENTS MAY NOT OCCUR AS CONTEMPLATED.
We cannot assure you that we will be able to complete our planned
recapitalization and spin-off of ZD Events. If we cannot, we may not be able to
retire our remaining debt and make ZDNet a standalone independent Internet
company as planned. This may adversely affect the value of the ZDNet stock.
THE EXCHANGE RATIO MAY BE MORE OR LESS THAN OUR EXAMPLE.
Each share of ZDNet stock will convert into a fixed number of shares of
our common stock in the merger that will eliminate our tracking stock structure.
The exact exchange ratio will depend upon three factors that are not yet known
and as a result we are unable to tell you now what it will be. These three
factors are:
o the value of the remaining ZD assets in excess of the cash set aside
to cover the ZD liabilities, as determined by our board of directors,
o the market price of ZDNet stock on the date those assets are
transferred from ZD to ZDNet, and
o the number of options to acquire ZD stock or ZDNet stock that are
exercised prior to the merger.
We have included an example of how we will calculate the exchange ratio
in our Proxy Statement which is based on certain assumptions with respect to
these three factors. This example, which results in an exchange ratio of about
1.77, is included for illustrative purposes only. The actual exchange ratio may
differ significantly from this example and may even fall outside the range set
forth in the stockholder's letter that appears on the front cover of our Proxy
Statement.
THE AMOUNT WE LEAVE BEHIND TO COVER ZD LIABILITIES MAY BE DIFFERENT FROM THE
AMOUNT ACTUALLY NEEDED.
We will determine the amount that we will leave behind to cover actual
or contingent ZD liabilities based on the advice of management and our financial
and legal advisors, as contemplated under "Proposal 1--The Restructuring of Ziff
Davis--Repayment of ZD Debt and Provision for Other ZD Liabilities" in our Proxy
Statement. Since contingent liabilities are inherently uncertain, it is possible
that the amount we leave behind will turn out to be significantly more or less
than the amount actually needed to cover these liabilities. In that case,
holders of ZDNet stock would end up with significantly more or less value than
they would otherwise have, and holders of ZD stock would correspondingly end up
with significantly less or more value than they would otherwise have.
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THE RESTRUCTURING INVOLVES TRANSACTIONS THAT MIGHT CREATE CONFLICTS OF INTEREST.
The restructuring involves transactions and issues that might create
conflicts or the appearance of conflicts between the interests of the holders of
ZD stock and the holders of ZDNet stock or between Softbank (our controlling
stockholder) and other stockholders. These transactions and issues include:
o the terms of the content license arrangements between ZDNet and the
buyer of our publishing business,
o the valuation of the assets being transferred from ZD to ZDNet, and
o the valuation of any actual or potential ZD liabilities that will be
provided for.
In order to address these potential conflicts of interest, we created a special
committee of our board of directors to review these issues and make
recommendations to the full board. Our board of directors has followed the
recommendations of the special committee to date and expects to continue to do
so in the future.
THE SALE OF ZD'S BUSINESSES MAY ADVERSELY AFFECT ZDNET'S FUTURE BUSINESS.
It is possible that the sale of ZD's businesses as part of the
restructuring may adversely affect ZDNet's future business in a number of ways,
including the following:
o ZDNet will no longer be able to leverage the ZD brand and cross-market
across all of ZD's platforms.
o ZDNet has historically relied on content that it licenses from ZD
Publishing on an exclusive basis online. Under the agreement for the
sale of ZD Publishing, ZDNet has retained the rights to this content
online for only five years and those rights will remain exclusive to
ZDNet for only three years. After the three year exclusivity period
expires, the buyer of ZD Publishing will be free to use the content to
compete with ZDNet on the Internet, and after four years the buyer
will be free to license it to other online competitors.
o The buyer of ZD Publishing has acquired the "Ziff-Davis" brand name
and has received a license for the "ZD" brand name, in each case, for
use in print publishing and its future actions may adversely affect
the ZD brand.
o As a standalone company, ZDNet's costs of services may increase
significantly due to the loss of certain large volume discounts or
other special pricing arrangements it previously received as a
division of Ziff-Davis.
WE HAVE ONLY OPERATED AS A STANDALONE COMPANY SINCE MAY 1998, AND A SIGNIFICANT
PART OF OUR INFRASTRUCTURE MAY BE TRANSFERRED ALONG WITH THE BUSINESSES BEING
SOLD AS PART OF THE RESTRUCTURING.
We have only operated as a standalone company since May 1998. In
addition, a significant part of our infrastructure may be transferred along with
the businesses being sold as part of the restructuring. Our success will depend
on our continued ability to manage the company with the resources available to
us.
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ZDNET MAY BE UNABLE TO OBTAIN ADDITIONAL FINANCING ON REASONABLE TERMS.
As mentioned in a number of the risk factors described below, ZDNet
will need access to additional financing in order to be successful. Because the
company will be considerably smaller and less diversified after the
restructuring, it may be difficult for it to obtain additional financing on
reasonable terms. If this is the case, ZDNet's future financial position and
results of operations may be adversely affected.
OTHER RISK FACTORS
ZDNET HAS AN EXTREMELY LIMITED OPERATING HISTORY AND A HISTORY OF NET LOSSES AND
THERE IS NO ASSURANCE ZDNET WILL REPORT NET INCOME IN THE FUTURE.
ZDNet, which will constitute the major business of the company after the
restructuring, has an extremely limited operating history and an investor must
consider the risks, expenses and difficulties frequently encountered by such
companies, particularly in the new and rapidly evolving market for Internet
products, content and services. We cannot assure you that ZDNet will be
successful in addressing such risks. Although ZDNet has experienced revenue
growth in recent periods, we cannot assure you that ZDNet's revenue will
continue to grow or continue at its current level.
ZDNet has incurred significant net losses in the past ($21.2 million in
1997 and $7.9 million in 1998). Although ZDNet had historical net income of $1.9
million in 1999, on a pro forma basis (calculated as if the restructuring had
been completed at January 1, 1999) the company would have had a loss from
continuing operations of $10.1 million. For more information regarding these
historical and pro forma losses, see our 1999 Form 10-K and our current report
on Form 8-K/A filed on April 19, 1999 (our "Form 8-K/A") incorporated herein by
reference. We cannot assure you that we will report net income in the future.
WE CANNOT ACCURATELY PREDICT ZDNET'S FUTURE REVENUE.
As a result of the evolving nature of the Internet and ZDNet's limited
operating history, we cannot accurately forecast ZDNet's revenue. Current and
future expense levels are based principally on estimated future revenue and are
to a large extent fixed. Accordingly, ZDNet may be unable to adjust spending to
compensate for any unexpected revenue shortfall. If ZDNet's actual revenue is
less than its estimated revenue, this could have an immediate material adverse
effect on ZDNet's profits and liquidity.
ZDNET'S QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY AND ARE NOT
RELIABLE INDICATORS OF ITS FUTURE PERFORMANCE.
ZDNet's quarterly operating results may fluctuate significantly because of
a variety of factors, many of which are outside our control, including:
o overall usage levels of the Internet and of ZDNet's sites in
particular,
o demand for Internet advertising and the loss of advertisers,
o seasonal trends in Internet use and advertising,
o the amount and timing of ZDNet's capital expenditures,
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o costs relating to the expansion of ZDNet's operations and the
introduction of new sites and services,
o price competition or pricing changes in Internet advertising, and
o costs relating to technical difficulties or system downtime.
We believe Internet advertising typically slows in the first quarter of
the year. Historically, ZDNet has experienced lower advertising and lower
revenue in the first quarter of each year as compared to the fourth of the prior
year. Seasonality and cyclicality in the level of Internet advertising
expenditures generally could become more pronounced in the future as the
Internet becomes more accepted as an advertising vehicle. If a large number of
ZDNet's advertisers do not advertise in a given quarter or if advertising
revenue is deferred, ZDNet's revenue in that quarter could be substantially
reduced. This would have a material adverse effect on ZDNet's operating results
and could impair its business in future periods. Quarterly comparisons of
ZDNet's results of operations are not reliable and you should not rely on them
as an indication of ZDNet's future performance. For additional information about
the seasonality of ZDNet's revenue, see "ZDNet Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in our 1999
Form 10-K.
ZDNET'S FUTURE REVENUE IS DEPENDENT ON THE GROWTH OF INTERNET USE AND THE
ACCEPTANCE OF THE INTERNET AS AN ADVERTISING AND COMMERCE MEDIUM.
ZDNet's future revenue will depend largely on the widespread acceptance
and use of the Internet as an information source and as an advertising and
commerce vehicle. Rapid growth in Internet use is a recent trend and market
acceptance of the Internet as an advertising and commercial medium is highly
uncertain.
The Internet may not be accepted as a viable advertising and commerce
medium for distribution of information and engaging in commerce for a number of
reasons, including:
o inadequate development of the network infrastructure,
o inadequate development of enabling technologies,
o insufficient commercial support for Internet advertising,
o concerns about privacy and security among users, and
o lack of widely accepted standards for measuring the effectiveness of
advertising on the Internet.
ZDNET DEPENDS ON ADVERTISING AS A PRINCIPAL SOURCE OF ITS REVENUE.
ZDNet derived 86% of its revenue in 1998 and 93% of its revenue in 1999
from the sale of advertising on its Internet sites and we expect that
advertising revenue will continue to be the principal source of ZDNet's revenue
in the foreseeable future. Most of ZDNet's advertising contracts are either
short-term arrangements and/or can be terminated by the advertiser at any time
with little notice. We cannot assure you that ZDNet will be able to retain
current advertisers or obtain new advertising contracts.
ZDNet's ability to generate advertising revenue will depend on several
factors, including:
o the continued development of the Internet as an advertising medium,
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o the pricing of advertising on other Internet sites,
o the amount of traffic on ZDNet's network of sites,
o pricing pressure, delays and new product launches,
o ZDNet's ability to achieve, demonstrate and maintain attractive user
demographics, and
o ZDNet's ability to develop and retain a skilled advertising sales
force.
ZDNET IS INCREASINGLY DEPENDENT ON, AND RECEIVES A SIGNIFICANT PERCENTAGE OF ITS
REVENUE FROM, A LIMITED NUMBER OF ADVERTISERS.
A relatively small number of advertisers contribute a significant
percentage of ZDNet's consolidated revenue. ZDNet's top 20 advertising customers
accounted for approximately 47% of its advertising revenue in 1998 and
approximately 35% of its advertising revenue in the first nine months of 1999.
These advertising clients, and its other advertising clients, may not continue
to use ZDNet's services to the same extent, or at all, in the future. A
significant reduction in advertising by one or more of ZDNet's largest
advertisers would have a material adverse effect on ZDNet's profits and
liquidity.
ZDNET DEPENDS ON ARRANGEMENTS WITH THIRD PARTIES FOR INTERNET TRAFFIC TO ITS
SITES AND ZDNET'S FAILURE TO MAINTAIN THESE ARRANGEMENTS WITH THIRD PARTIES
COULD ADVERSELY AFFECT ITS BUSINESS.
ZDNet's ability to advertise on and maintain links from other Internet
sites is an important element to its success. Traffic originating from links
existing on other Internet sites (particularly search engines, directories and
other navigational tools managed by Internet service providers and Web browser
companies), is an important segment of the overall traffic on ZDNet's Internet
sites. ZDNet has special linking arrangements to generate additional traffic
with Yahoo!, AltaVista, Go.com, Lycos and iVillage which are either short-term
contracts and/or can be terminated with little notice. There is intense
competition for these types of linking arrangements. We cannot assure you that
these arrangements will be maintained or that advertising or links will continue
to be available on reasonable commercial terms or at all.
ZDNET DEPENDS ON LICENSED TECHNOLOGY FROM THIRD PARTIES AND ZDNET'S FAILURE TO
MAINTAIN THESE ARRANGEMENTS WITH THIRD PARTIES COULD ADVERSELY AFFECT ITS
BUSINESS.
ZDNet relies on certain technology licensed from third parties such as
Vignette's Storyserver, Thunderstone's Texis Search Engine and Netscape's Web
Server Software for use in operating and managing its Internet sites and
providing related services to users and advertisers. ZDNet's ability to generate
revenue from Internet commerce may also depend on data encryption and
authentication technologies that it may be required to license from third
parties. We cannot assure you that such technology licenses will be available at
all, that they will be available on reasonable commercial terms or that they
will operate as intended.
ZDNET'S COMPETITIVE POSITION DEPENDS ON ITS ABILITY TO ATTRACT AND RETAIN KEY
PERSONNEL.
ZDNet's failure to attract and retain qualified personnel could diminish
its competitive position. ZDNet's performance is substantially dependent on the
continued services and performance of its senior
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executive officers and other key personnel. ZDNet does not have long-term
employment agreements with any of its key personnel and maintains no "key
person" life insurance policies. ZDNet's future success also depends on its
ability to identify, attract, retain and motivate highly skilled editorial,
technical, managerial, sales, marketing and customer service personnel.
Competition for such persons is intense. We cannot assure you that ZDNet will be
able to attract or retain such personnel.
ZDNET MAY NOT BE ABLE TO ADEQUATELY RESPOND TO TECHNOLOGICAL CHANGE.
The market for Internet products and services is characterized by rapid
technological developments, frequent new product introductions and evolving
industry standards. ZDNet will be required to continually improve the
performance, features and reliability of its network infrastructure and Internet
sites, particularly in response to competition and changing customer demands. We
cannot assure you that ZDNet will be successful in responding rapidly,
cost-effectively or adequately to such developments.
ZDNET'S COMPETITION IS INTENSE AND IS EXPECTED TO INCREASE SIGNIFICANTLY.
We cannot assure you that ZDNet will be able to maintain its competitive
position. Competition among Internet content providers is intense and is
expected to increase significantly in the future. The market for Internet
content sites is rapidly evolving and barriers to entry are low, enabling
newcomers to launch competitive sites at relatively low cost. Moreover,
increased competition could result in price reductions, reduced margins or loss
of market share, any of which could have an effect on our future revenue and
profits.
We believe ZDNet competes most directly with Web sites specializing in
broad-based technology information. These include c/net, CMP, Internet.com and
IDG. ZDNet also generally competes for users and advertisers with:
o Internet portals and search sites that help users access information
rather than create original content and are not specifically focused
on technology related information, such as Excite, Infoseek, Lycos and
Yahoo!,
o general news sites, such as those provided by CNN and ABC,
o general purpose online service providers, such as America Online and
MSN,
o browser/software companies offering information services, such as
Microsoft and Netscape, and
o large general-interest sites.
In addition, ZDNet competes with traditional media content businesses such
as newspapers, magazines, radio and television. In order to compete successfully
and attract users, advertisers and strategic partners, ZDNet must continue to
provide high quality, engaging content in a timely and cost-effective manner.
TO REMAIN COMPETITIVE, ZDNET MUST CONSTANTLY EXPAND AND DEVELOP NEW CONTENT
AREAS AND SERVICES. THIS IS INHERENTLY RISKY AND EXPENSIVE.
ZDNet's future success may depend in part on its ability to continue
expanding its Internet sites to include new subject matters and services. Costs
related to developing new content areas and services are
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expensed as they are incurred while revenue related to these new content areas
and services typically builds over time. Accordingly, ZDNet's profitability from
year to year may be adversely affected by the number and timing of new launches.
In addition, we cannot assure you that any new areas or services will be
developed in a timely or cost-effective manner or that they will be successful.
ZD NET HAS LAUNCHED AN EXPENSIVE ADVERTISING CAMPAIGN THAT MAY OR MAY NOT BE
EFFECTIVE.
On December 25, 1999, ZDNet launched a 15-month, $25 million consumer
advertising campaign. This campaign is ZDNet's first major attempt at offline
consumer advertising. The campaign will initially run on network and cable
television, in mainstream and technology-focused print publications and in key
online and outdoor positions. We cannot assure you that this campaign, or any
other advertising campaign we may launch in the future, will be effective. In
addition, to remain competitive, ZDNet may need to spend significantly more
money on advertising in the future and such additional costs could adversely
affect ZDNet's profits.
WE CANNOT ASSURE YOU THAT ZDNET WILL CONTINUE TO DEVELOP THE ZDNET BRAND.
We cannot assure you that ZDNet will be able to continue to develop its
brand. ZDNet believes brand identity is important to attracting and expanding
its user base, Internet traffic and advertising and commerce relationships.
ZDNet believes the significance of brand recognition will intensify as the
number of Internet sites increases.
ANY CAPACITY CONSTRAINTS OR SYSTEM DISRUPTIONS COULD HAVE A MATERIAL ADVERSE
EFFECT ON ZDNET.
The performance and reliability of ZDNet's Internet sites and network
infrastructure are critical to its reputation and ability to attract and retain
users, advertisers, merchants and strategic partners. Any system error or
failure, or a sudden and significant increase in traffic, may result in the
unavailability of sites and significantly delay response times. Individual,
sustained or repeated occurrences could result in a loss of potential or
existing users, advertisers or strategic partners. In addition, because ZDNet's
advertising revenue is directly related to the number of advertisements it
delivers to users, system interruptions or delays would reduce the number of
impressions delivered and thereby reduce its revenue.
ZDNet's systems and operations are vulnerable to interruption or
malfunction due to certain events beyond its control, including natural
disasters, telecommunications failures and computer hacking. ZDNet also relies
on Web browsers and online service providers to provide Internet access to its
sites. We cannot assure you that ZDNet will be able to expand its network
infrastructure, either itself or through use of third-party hosting systems or
service providers, on a timely basis sufficient to meet demand. ZDNet presently
has only a limited amount of redundant facilities or systems, no formal disaster
recovery plan and no sufficient business interruption insurance to compensate
for losses that may occur. Any interruption to its systems or operations could
have a material adverse effect on ZDNet's business and its ability to retain
users, advertisers and strategic partners.
ZDNET'S NETWORKS MAY BE VULNERABLE TO SECURITY RISKS.
ZDNet's networks may be vulnerable to denial-of-service attacks,
unauthorized access, computer viruses and other security problems. A user who
circumvents security measures could misappropriate proprietary information or
cause interruptions or malfunctions in ZDNet's operations. ZDNet may be required
to expend significant resources to protect against the threat of such security
breaches or to alleviate
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problems caused by such breaches. Although ZDNet intends to continue to
implement industry-standard security measures, not all securities which are
implemented may be the latest state of the art and such measures may be
inadequate.
INCREASED GOVERNMENT REGULATION OF THE INTERNET COULD HAVE A MATERIAL ADVERSE
EFFECT ON ZDNET.
Increased government regulation, or the application of existing laws to
online activities, could inhibit Internet growth, expose ZDNet and other online
content providers to additional liabilities and increase the cost of doing
business. This could have a material adverse effect on ZDNet's profits and
liquidity. The increasing popularity and use of the Internet and other online
services may lead to the adoption of new laws and regulations in the U.S. or
elsewhere covering issues affecting ZDNet's business, such as online privacy,
copyright and trademark, sales taxes and fair business practices or which
require qualification to do business as a foreign corporation in certain
jurisdictions. For instance, the European Union's privacy regulations may limit
the collection and use of certain user information.
ZDNET RELIES ON INTELLECTUAL PROPERTY RIGHTS WHICH MAY NOT BE ADEQUATELY
PROTECTED UNDER CURRENT LAWS.
To establish and protect its trademarks, service marks and other
proprietary rights in its products and services, ZDNet relies on a combination
of:
o copyright, unfair competition, trademark, service mark and trade
secret laws, and
o confidentiality agreements with certain of its licensees and other
third parties and confidentiality agreements and policies covering its
employees.
We cannot assure you that these measures will be adequate, that ZDNet will
be able to secure registrations for all of its marks in the U.S. or
internationally or that third parties will not infringe upon or misappropriate
its proprietary rights. Any infringement or misappropriation, or litigation
relating to intellectual property rights, may divert management's attention and
ZDNet's funds to litigate such claims.
Legal standards relating to the validity, enforceability and scope of
protection of certain proprietary rights in Internet-related business are
uncertain and evolving. In particular, new domain name registration and
ownership priority procedures have recently been adopted which may make it more
difficult for ZDNet to retain or obtain desirable domain names.
ZDNET MAY INCUR LIABILITY FOR ITS INTERNET CONTENT AND USER DATA.
As a content provider, ZDNet may face potential liability for intellectual
property infringement, defamation, indecency and other claims. In addition,
ZDNet may incur liability for unauthorized duplication or distribution of
third-party content or materials or for information collected from and about its
users. We cannot assure you that third parties or users will not bring claims
against ZDNet relating to proprietary rights or use of personal information.
Although ZDNet seeks to obtain indemnification from strategic partners for any
liability resulting from licensed content or linked sites, we cannot assure you
that such indemnities will always be obtainable or adequate. ZDNet's general
liability insurance may not cover or be adequate for potential claims of this
type.
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ZDNET MAY NOT BE ABLE TO ADEQUATELY MANAGE ITS GROWTH.
ZDNet will need to effectively plan and manage its business to succeed in
the rapidly evolving Internet industry. ZDNet continues to increase the scope of
its operations and has grown its workforce substantially. As of December 31,
1998, ZDNet had a total of 316 employees and as of December 31, 1999, ZDNet had
a total of 438 employees, a growth of 52.8%. This growth has placed, and future
growth may place, a significant strain on ZDNet's resources. For example, we
expect that the variety of advertising products available on ZDNet sites will
expand, increasing demands on ZDNet's billing and collection systems and
requiring additional resources to properly determine pricing and discounting
structures. ZDNet expects that it will need to continue to improve its financial
and management controls and reporting systems and procedures, and will need to
continue to expand, train and manage its workforce.
ZDNET'S ACQUISITION AND INVESTMENT STRATEGY EXPOSES IT TO RISKS.
ZDNet currently intends to continue acquisitions of and investments in new
or complementary businesses, products, services or technologies. However, we
cannot assure you that ZDNet will be able to identify suitable acquisition or
investment candidates. Even if ZDNet does identify suitable candidates, we
cannot assure you that ZDNet will be able to make such acquisitions or
investments on reasonable commercial terms or successfully assimilate personnel,
operations, products, services or technologies into its operations. This could
disrupt ZDNet's ongoing business, distract ZDNet's management and employees,
increase ZDNet's expenses, including amortization of goodwill, and materially
and adversely affect ZDNet's profits and liquidity.
ZDNET INTENDS TO EXPAND ITS INTERNATIONAL OPERATIONS AND MAY ENCOUNTER A NUMBER
OF PROBLEMS DOING SO. THERE ARE ALSO A NUMBER OF RISKS ASSOCIATED WITH
INTERNATIONAL OPERATIONS THAT COULD ADVERSELY AFFECT ZDNET'S BUSINESS.
EXPANSION OF INTERNATIONAL OPERATIONS. One component of ZDNet's growth
strategy is to further expand into international markets. ZDNet's international
operations are at an early stage of development and have an extremely limited
operating history. In addition, the markets in which ZDNet has undertaken
international expansion have technology and online industries that are less well
developed than in the U.S.
RISKS OF INTERNATIONAL OPERATIONS. There are certain risks inherent in
doing business in international markets, such as the following:
o uncertainty of product acceptance by different cultures,
o unforeseen changes in regulatory requirements,
o difficulties in staffing and managing multinational operations,
o state-imposed restrictions on the repatriation of funds,
o currency fluctuations,
o difficulties in finding appropriate foreign licensees or joint venture
partners, and
o potentially adverse tax consequences.
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<PAGE>
There is a risk that such factors will have an adverse effect on ZDNet's
ability to successfully operate internationally and on its profits and
liquidity.
THE INCLUSION OF COMPUTER SHOPPER IN OUR CONSOLIDATED RESULTS MAY ADVERSELY
AFFECT OUR STOCK PRICE.
We plan to include our Computer Shopper business in the assets that we
will transfer to ZDNet in return for an increase in ZD's retained interest in
ZDNet. Although we expect that the value of Computer Shopper will be immaterial
in relation to the expected market capitalization of ZDNet Inc. after the
restructuring, we also expect Computer Shopper to be highly material to the
consolidated financial statements of ZDNet Inc. after the restructuring. Even
though we plan to break out our online business as a separate segment from our
Computer Shopper business for accounting purposes, it is possible that the
market will not value our stock as highly as it would in the absence of Computer
Shopper since, among other things, we expect that our consolidated revenues will
grow at a substantially lower rate (or may even decline) as a result of
including Computer Shopper in our consolidated results.
OUR HISTORICAL AND PRO FORMA FINANCIAL INFORMATION IS NOT PARTICULARLY RELEVANT
TO OUR ACTUAL RESULTS.
Our financial information included in our Proxy Statement, our 1999 Form
10-K and our Form 8-K/A does not reflect what the actual results of operations,
financial position and cash flows would have been had Ziff-Davis existed and the
restructuring been completed prior to the periods in question. In addition, the
financial information is not necessarily indicative of our future results of
operations, financial position and cash flows.
WE ARE CONTROLLED BY OUR PRINCIPAL STOCKHOLDER. THIS CREATES POTENTIAL CONFLICTS
OF INTEREST.
SOFTBANK Corp. and its non-Ziff-Davis affiliates ("Softbank") currently
own 71,620,000 shares of ZD stock and will, after the restructuring, own a
majority of our outstanding shares of common stock. As a result, Softbank will
be able to elect all the members of the board of directors. Softbank could also
control those actions requiring the approval of the holders of a majority of the
voting stock, including amendments to our charter and any business combinations.
This concentration of ownership could prevent a change in control of ZDNet that
might otherwise be beneficial to stockholders.
We have entered into certain agreements with Softbank governing ongoing
relationships. These agreements include certain licensing and management
agreements relating to ZDNet. However, the agreements with Softbank do not
preclude investments by venture capital funds managed by Softbank which invest
in, among other things, computer and Internet-related companies. These funds may
be able to co-invest with or compete with ZDNet with respect to new investments.
In addition, Softbank may also develop new funds which may compete with ZDNet
for investment opportunities. These agreements also prohibit ZDNet from
competing with SOFTBANK Corp. in Japan without the prior approval of SOFTBANK
Corp.'s board of directors and give Softbank the continuing right to license all
of ZDNet's products and services in Japan. These arrangements and undertakings
might be less favorable than arrangements negotiated at arm's length between
unrelated parties.
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WE HAVE SIGNIFICANT DEBT OBLIGATIONS AND MAY BE UNABLE TO OBTAIN ADDITIONAL
FINANCING OR BE REQUIRED TO DIVERT FUNDS TO PAY DOWN PRINCIPAL AND INTEREST ON
OUR DEBT.
At April 20, 1999, the total debt of Ziff-Davis was approximately $220
million. Although we intend to retire all of this debt out of the proceeds of
the planned recapitalization and spin off of ZD Events, we cannot assure you
that we will be successful in doing so. If we cannot, the existence of this
debt:
o may impair our ability to obtain additional financing for working
capital, capital expenditures, acquisitions or general corporate
purposes,
o may reduce the funds available to us for our operations,
o may impair our ability to incur additional debt because of financial
and other restrictive covenants, including those relating to the
incurrence of additional indebtedness, the creation of liens, the
payment of dividends and sales of assets, and
o may increase our vulnerability to adverse general economic conditions,
including increases in interest rates.
Our interim credit facility is secured, in part, by a first priority
security interest in the capital stock of ZD Inc. and ZD Events Inc.
WE ARE A DEFENDANT IN SEVERAL LAWSUITS, WHICH COULD MATERIALLY AND ADVERSELY
AFFECT OUR BUSINESS AND OPERATIONS.
In connection with the initial public offering of our common stock on
April 28, 1998, the repricing of certain stock options and a former joint
venture between Softbank and certain third parties, we have been named as a
defendant in several lawsuits. While we believe there are substantial defenses
to all of the claims, we cannot assure you that we will prevail. Defense costs
and/or settlement costs relating to these actions could be substantial, and the
defense of these actions may divert management's attention and resources. If the
plaintiffs prevail in these actions, any judgments awarded by the courts could
have a material adverse effect on our liquidity. For more information regarding
these lawsuits, see Note 18 to our consolidated financial statements included in
our 1999 Form 10-K.
-----------
Our logo and certain of our Internet sites, publications, products and
services referenced in this prospectus are our trademarks. Each trade name,
trademark or service mark of any other company appearing in this prospectus is
the property of its owner.
15
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WHERE YOU CAN FIND MORE INFORMATION
THE REGISTRATION STATEMENT
We have filed registration statements with the SEC under the Securities
Act of 1933 that register the sale of the shares of ZDNet stock offered by the
selling stockholders pursuant to this prspectus.
The registration statements that we filed with the SEC, including the
attached exhibits and schedules, contain additional relevant information about
Ziff-Davis and the ZDNet stock. The SEC allows us to omit some information
included in these registration statements from this document. You should read
the registration statements in full in order to obtain this additional
information.
FILINGS WITH THE SEC
In addition, we file reports, proxy statements and other information with
the SEC under the Securities Exchange Act of 1934 on a regular basis. You may
read and copy this information at the following locations of the SEC:
<TABLE>
<CAPTION>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. You can obtain more information on the
operation of the SEC's Public Reference Room in Washington, D.C. by calling the
SEC at 1-800-SEC-0330.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like Ziff-Davis,
who file electronically with the SEC. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information about
Ziff-Davis at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
DOCUMENTS INCORPORATED BY REFERENCE
THE SEC ALLOWS US TO "INCORPORATE BY REFERENCE" INFORMATION INTO THIS
PROSPECTUS. THIS MEANS THAT WE CAN DISCLOSE IMPORTANT INFORMATION TO YOU BY
REFERRING YOU TO ANOTHER DOCUMENT FILED SEPARATELY WITH THE SEC. This
information incorporated by reference is a part of this prospectus, unless we
provide you with different information in this prospectus.
This prospectus incorporates by reference the documents listed below that
we have previously filed with the SEC. They contain important information about
Ziff-Davis and its financial condition.
16
<PAGE>
<TABLE>
<CAPTION>
ZIFF-DAVIS COMMISSION FILINGS (FILE NO. 1-14055) PERIOD COVERED OR DATE FILED
- ------------------------------------------------ ----------------------------
<S> <C>
The description of our restructuring contained in our Proxy Filed pursuant to Section 14(a) of the Exchange Act on
Statement on Schedule 14A. February 9, 2000.
Our Annual Report on Form 10-K. Year ended December 31, 1999.
Current Reports on Form 8-K or 8-K/A. Filed April 14, 2000 and April 19, 2000.
The description of our ZDNet common stock contained in our Filed pursuant to Section 12 of the Exchange Act on March 31,
Registration Statement on Form S-1 (File No. 333-69447) filed 1999, including any amendments or reports filed for the
under the Securities Act of 1933 and incorporated in our purpose of updating such description.
Registration Statement on Form 8-A.
The description of our ZDNet common stock contained in our Filed on August 4, 1999, containing the final in prospectus
Current Report on Form 8-K. used connection with the initial public offering of the
ZDNet stock (the "IPO Prospectus").
</TABLE>
Ziff-Davis also incorporates by reference additional documents that we may
file with the SEC between the date of this prospectus and the date that the
offering of the ZDNet stock is terminated. These documents include periodic
reports, like Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, other
Current Reports on Form 8-K and proxy statements.
You can obtain any of the documents incorporated by reference in this
document from us or from the SEC through the SEC's web site at the address
above. Documents incorporated by reference are available from us without charge,
excluding any exhibits to those documents unless we specifically incorporated by
reference the exhibit in this prospectus. You can obtain these documents from us
by requesting them in writing or by telephone at the following address or
number:
Lauren Bonfield
Ziff-Davis Inc.
28 East 28th Street
New York, New York 10016
Telephone: (212) 503-3500
OTHER INFORMATION
We have not authorized anyone to give you any information about us or this
offering that is different from what we tell you in this prospectus or in any of
the materials that we have incorporated into this prospectus. If anyone gives
you any other information about us, you should not rely on it. If you are in a
jurisdiction where offers to sell, or solicitations of offers to buy, the ZDNet
shares offered by this prospectus are unlawful, or if you are a person to whom
it is unlawful to direct these types of activities, then the offer presented in
this prospectus does not extend to you. The information contained in this
prospectus speaks only as of the date of this prospectus unless the information
specifically indicates that another date applies.
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<PAGE>
THE SELLING STOCKHOLDERS
The selling stockholders named below may be offering their ZDNet shares
from time to time. These selling stockholders acquired their shares in
connection with:
o our acquisition Updates.com and SoftSeek, Inc.,
o our acquisition of Gamespot Inc.,
o our acquisition of an equity interest in Ziff-Davis Richina Media LDC
and
o our acquisition of substantially all of the assets of FerretSoft, LLC.
We list below the number of ZDNet shares that each selling stockholder
beneficially owns as of April [o], 2000 and the number of ZDNet shares that each
selling stockholder may offer from time to time through this prospectus. Because
a selling stockholders may not sell all of its ZDNet shares through this
prospectus, we do not know the number it will own after this offering.
ZDNET SHARES ZDNET SHARES
BENEFICIALLY OWNED OFFERED BY
SELLING STOCKHOLDERS ON APRIL [O], 2000 THIS PROSPECTUS
Kirk P. Colvin 107,926 57,137
10113 Granden Street NW,
Pickering, Ohio 43147
Russell Ray 53,962 28,568
1556 North Telegraph,
Pontiac, MI 48340
Jack Wade Johnson, 53,962 28,568
3260 N. Heritage Way
Las Vegas, NV 89121
Paula Hall 53,962 28,568
11 Kingsford Avenue
Chase Valley, 3202
Petermaritzburg, South Africa
Mike Kramer 53,962 28,568
2830 Freedom Trail
Reynoldsburg, OH 43068
William Templeton 80,969 42,866
1667 I Whitney Circle
Pickerington, Ohio 43147
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James Holderness 80,969 42,866
1667 East Whitney Circle
Pickerington, Ohio 43147
David Hall 25,564 13,534
147 Mulberry Lane
Leslie Avenue
Magaliesig, Fourways, 2021
Johannesburg, South Africa
Marc Caminetsky 45,113 23,883
18 Peregrine Road
Newton, MA 02459
Howard Marson 45,113 23,883
26 Colgate Road
Needham, MA 02469
Harold Lund [240,292] [180,219]
4 Creek Road
Smithtown, NY 11787
Fred Kufner [101,942] [76,457]
103 Laurel Drive
Smithtown, NY 11787
James Tyminski [240,292] [180,219]
6 Quinzer Street
Nesconset, NY 11767
Paul Fitzpatrick [396,415] [297,311]
9126 Sideroad 27
RR3
Orton, Ontario, Canada LON1N0
Rosanne Falvey [396,415] [297,311]
9126 Sideroad 27
RR3
Orton, Ontario, Canada LON1N0
Alan Thomas [198,208] [148,656]
8500 Ridgewood Avenue,
Suite No. 501
Cape Canaveral, FL 32920
Jonathan Epstein [200,000] [60,000]
430 Noreiga Street
San Francisco, CA 94122
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<PAGE>
George Vincent Broady [200,000] [60,000]
4537 20th Street
San Francisco, CA 94114
Paul C. Deemer IV [200,000] [60,000]
25 Lucerne Street #2
San Francisco, CA 94103
Richina Media and Entertainment [186,046] [186,046]
Limited
New Hua Lian Building, West
Block, Suite 8B
775 Huai Hai Zhang Road,
Shanghai 200020,
PRC
Total [2,961,112] [1,864,660]
PLAN OF DISTRIBUTION
METHODS OF DISTRIBUTION BY SELLING STOCKHOLDERS
The selling stockholders have informed us that they propose to offer their
ZDNet shares from time to time and in several different ways. For example, they
may make sales:
o on the New York Stock Exchange,
o on another stock exchange or interdealer quotation system on which
ZDNet shares are quoted or listed at the time or
o through negotiated transactions.
The selling stockholders may offer their ZDNet shares through or to
brokers, dealers, agents or underwriters, who may receive compensation in the
form of commissions, concessions or discounts from the selling stockholders or
the purchasers or both.
The selling stockholders may offer their shares at various prices,
including:
o at prevailing market prices,
o at prices related to prevailing market prices or
o at negotiated prices.
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PREPARATION OF AN ADDITIONAL PROSPECTUS
If necessary, we will prepare another prospectus to describe the method of
sale in greater detail. As of the date of this prospectus, we do not know of any
arrangements by the selling stockholders to sell their shares, nor do we know
which brokerage firms the selling stockholders may select to sell their shares.
In addition, the selling stockholders may sell their shares without the aid of a
registration statement if they follows SEC rules.
PARTIES THAT MAY BE DEEMED UNDERWRITERS
The selling stockholders and any brokers, dealers or agents that
participate in the distribution of the shares offered by this prospectus may be
considered "underwriters." If the selling stockholders are considered
underwriters, any profits on the sale of shares by them and any associated
discounts or commissions may be considered underwriting compensation. In
addition, if the selling stockholders are considered underwriters, the selling
stockholders may be subject to liability for misstatements and omissions in the
registration statement relating to this prospectus.
REGULATION OF SALES BY SELLING STOCKHOLDERS
The selling stockholders and any other persons participating in sales or
distributions of the shares offered by this prospectus will be subject to
applicable provisions of the Securities Exchange Act of 1933, which is the
federal statute regulating sales of securities. Some SEC rules and regulations,
including some limitations on activities during securities offerings and
anti-fraud provisions, may limit when the selling stockholders, or any other
persons, may sell or purchase the shares.
In some jurisdictions, the securities laws require that the shares offered
by this prospectus be offered or sold only through registered or licensed
brokers or dealers. In addition, in some jurisdictions the shares may not be
offered or sold unless they have been registered or qualified for sale in such
jurisdictions or an exemption from registration or qualification is available
and is complied with.
INDEMNIFICATION
Selling stockholders, underwriters, dealers and agents involved in the
distribution of these shares may enter into agreements that would entitle them
to indemnification by the specific selling stockholders against certain
liabilities, including liabilities under the Securities Exchange Act of 1933. We
may indemnify the selling stockholders against such liabilities.
EXPENSES
We will not receive any part of the proceeds from the sale of the shares
offered by this prospectus. We will bear all expenses we incur in registering
the shares with the SEC. The selling stockholders will pay their own expenses,
including brokerage commissions, personal legal and/or advisor fees or similar
expenses, in offering and selling their shares.
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USE OF PROCEEDS
We will not receive any proceeds from the sales of the shares offered by
this prospectus, but we will bear some of the expenses. See "Plan of
Distribution - Expenses" above for a description of the payment of expenses.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains statements that anticipate or plan for the
future. These forward-looking statements include statements about our future
business plans and strategies, financial condition and results of operations,
and other statements that are not historical. These statements may be:
o made directly in this prospectus or
o "incorporated by reference" to other documents we file with the SEC.
You can find many of these statements by looking for words like
"believes," "expects," "anticipates" and "estimates" and for similar
expressions. Because forward-looking statements involve assumptions and future
risks and uncertainties, there are factors that could cause the actual results
to differ materially from those expressed or implied. For example, the
statements appearing under "Risk Factors" herein and other cautionary statements
appearing in Management's Discussion and Analysis of Financial Condiiton and
Resutls of Operations and elsewhere in our 1999 Form 10-K describe circumstances
that could materially affect the accuracy of forward-looking statements.
If there are any subsequent written or oral forward-looking statements
made by us or any person acting onour behalf, they are qualified in total by the
cautionary statements contained or referred to in this section. We do not
undertake any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after the date of
this prospectus or to reflect the occurrence of unanticipated events.
This prospectus also includes or incorporates by reference statistical
data regarding the publishing, trade show and Internet industries. This data was
obtained from industry publications and reports which we believe to be reliable
sources. We have not independently verified such data nor sought the consent of
any organizations to refer to their reports in this prospectus or documents
incorporated by reference in this prospectus.
VALIDITY OF COMMON STOCK
The validity of the shares of ZDNet stock being offered by this prospectus
has been passed upon for Ziff-Davis by Sullivan & Cromwell.
EXPERTS
The following financial statements have been incorporated in this
prospectus in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting:
o the consolidated financial statements of Ziff-Davis Inc. and the
combined financial statements of ZDNet (a division of Ziff-Davis Inc.)
as of December 31, 1998 and 1999 and for the three years in the period
ended December 31, 1999 appearing in our 1999 Form 10-K; and
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o the consolidated financial statements of Ziff-Davis Inc. and the
combined financial statements of ZD (a division of Ziff-Davis Inc.)
and ZDNet (a division of Ziff-Davis Inc.) as of December 31, 1997 and
1998 and for the three years in the period ended December 31, 1998
appearing in our Proxy Statement.
23
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the fees and expenses payable by the
Registrant in connection with this offering, other than underwriting discounts
and commissions. All the amounts shown are estimates, except the SEC
registration fee:
Registration Statement Filing Fee.............................$ [o]
Legal Fees and Expenses....................................... [o]
Accounting Fees and Expenses.................................. [o]
Printing Costs................................................ [o]
Miscellaneous Fees and Expenses............................... [o]
--------
Total.................................................$ [o]
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with any threatened, pending or completed actions, suits or
proceedings in which such person is made a party by reason of such person being
or having been a director, officer, employee or agent of the Registrant or
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or other enterprise if the person acted in good
faith and in a manner the person reasonably believed was not opposed to the
corporation's best interests, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the person's conduct was
unlawful. The statute provides that the indemnification is not exclusive of
other rights to which those seeking indemnification may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or otherwise.
Section 6.4 of the Registrant's By-laws provides for indemnification by the
Registrant of its directors, officers and employees to the fullest extent
permitted by the Delaware General Corporation Law and permits the Registrant to
maintain insurance to protect against such expense, liability or loss, whether
or not the Delaware General Corporation Law provides indemnification. In
addition to the protection available under the Registrant's Amended and Restated
Certificate of Incorporation, By-laws and insurance policies, the Registrant has
entered into agreements with its outside directors to indemnify them to the
fullest extent permitted by law against losses arising from any claim against
them by reason of being or having been a director.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or unlawful stock purchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit. The Registrant's Certificate of Incorporation provides for such
limitation of liability.
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ITEM 16. EXHIBITS.
4.1 Specimen certificate representing Ziff-Davis Inc.'s ZDNet
Stock, par value $0.01 per share. (Incorporated by reference
to Ziff-Davis' Registration Statement on Form S-1) (File No.
333-69447)
5.1 Opinion of Sullivan & Cromwell.*
23.1 Consent of PricewaterhouseCoopers LLP.*
23.2 Consent of Sullivan & Cromwell. (Included in Exhibit 5.1.)
24.1 Powers of Attorney. (Included in the signature pages of this
Registration Statement.)
- -------------
* Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (as amended, and together with the rules and
regulations thereunder, the "Securities Act");
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 (as amended, and
together with the rules and regulations thereunder, the "Securities
Exchange Act") that are incorporated by reference in the registration
statement.
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(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of the registration statement as of the time it was declared effective.
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(7) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
may, therefore, be unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on April 24, 2000.
Ziff-Davis Inc.
By: /s/ J. Malcolm Morris
--------------------------------------
J. Malcolm Morris
General Counsel and Senior Vice President
POWERS OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints J. Malcolm Morris (General Counsel
and Senior Vice President) and Lauren B. Bonfield (Assistant Secretary), acting
individually, as his attorney-in-fact and agent, with full power of
substitution, for him in any and all capacities, to sign the registration
statement on Form S-3 of Ziff-Davis Inc., and any and all amendments thereto
under the Securities Act of 1933, including any and all pre-effective and
post-effective amendments, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, as fully as he might or could do in person, and hereby
ratifies, approves and confirms all that his said attorney-in-fact and agent, or
his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement on Form S-3 has been signed by the following persons in the capacities
and on the date indicated.
SIGNATURE TITLE
--------- -----
/s/ Eric Hippeau
- -----------------------------
Eric Hippeau Chairman, Chief Executive Officer, Director
(Principal Executive Officer)
/s/ Mark D. Moyer
- -----------------------------
Mark D. Moyer Vice President, Controller (Principal
Financial and Accounting Officer)
II-4
<PAGE>
- -----------------------------
Masayoshi Son Director
/s/ Ronald D. Fisher
- -----------------------------
Ronald D. Fisher Director
/s/ Jason E. Chudnofsky
- -----------------------------
Jason E. Chudnofsky Director
/s/ Jonathan D. Lazarus
- -----------------------------
Jonathan D. Lazarus Director
/s/ Jerry Yang
- -----------------------------
Jerry Yang Director
- -----------------------------
Daniel L. Rosensweig Director
Dated: April 24, 2000
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------- --------
<S> <C> <C>
4.1 Specimen certificate representing Ziff-Davis Incorporated by reference to Ziff Davis'
Inc.'s ZDNet Stock, par value $0.01 per share. Registration Statement on Form S-1) (File
No. 333-69447).
5.1 Opinion of Sullivan & Cromwell. Filed herewith.
23.1 Consent of PricewaterhouseCoopers LLP. Filed herewith.
23.2 Consent of Sullivan & Cromwell. Included in Exhibit 5.1.
24.1 Powers of Attorney. Included in the signature pages of this Registration
Statement
</TABLE>
II-6
EXHIBIT 5.1
April 24, 2000
Ziff-Davis Inc.,
28 East 28th Street,
New York, New York 10016.
Dear Sirs:
In connection with the registration under the Securities Act of 1933
(the "Act") of 318,441 shares (the "Securities") of Ziff-Davis Inc. - ZDNet
common stock, par value $0.01 per share, of Ziff-Davis Inc., a Delaware
corporation (the "Company"), we, as your counsel, have examined such corporate
records, certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion. Upon the
basis of such examination, we advise you that, in our opinion, the Securities
have been validly issued and are fully paid and nonassessable.
The foregoing opinion is limited to the Federal laws of the United
States and the General Corporation Law of the State of Delaware, and we are
expressing no opinion as to the effect of the laws of any other jurisdiction.
We have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by us to be
responsible, and we have assumed that the certificates for the Securities
conform to the specimen thereof examined by us and have been duly countersigned
by a transfer agent of the Securities and duly registered by a registrar of the
Securities, and that the signatures on all documents examined by us are genuine,
assumptions which we have not independently verified.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
Common Stock" in the Prospectus. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
SULLIVAN & CROMWELL
(EXHIBIT 23.1)
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Ziff-Davis Inc.
of:
(I) our report dated March 28, 2000, except for notes 1, 21 and 22 which
are as of April 13, 2000, appearing on page F-14 of Ziff-Davis Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1999
relating to the Consolidated Financial Statements of Ziff-Davis Inc. at
December 31, 1998 and 1999 and for each of the three years in the
period ended December 31, 1999;
(II) our report dated March 28, 2000, except for note 16 which is as of
April 13, 2000, appearing on page F-62 of Ziff-Davis Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1999 relating to
the Combined Financial Statements of ZDNet (a division of Ziff-Davis
Inc.) at December 31, 1998 and 1999, and for each of the three years in
the period ended December 31, 1999;
(III) our report dated February 22, 1999 appearing on page III-39 of
Ziff-Davis Inc.'s Proxy Statement dated February 7, 2000 relating to
the Consolidated Financial Statements of Ziff-Davis Inc. at December
31, 1997 and 1998, and for each of the three years in the period ended
December 31, 1998.
(IV) our report dated February 22, 1999 appearing on page IV-49 of
Ziff-Davis Inc.'s Proxy Statement dated February 7, 2000 relating to
the Combined Financial Statements of ZD (a division of Ziff-Davis Inc.)
at December 31, 1997 and 1998, and for each of the three years in the
period ended December 31, 1998;
(V) our report dated February 22, 1999 appearing on page V-41 of Ziff-Davis
Inc.'s Proxy Statement dated February 7, 2000 relating to the Combined
Financial Statements of ZDNet (a division of Ziff-Davis, Inc.) at
December 31, 1997 and 1998, and for the period from February 29, 1996
to December 31, 1996 and for the years ended December 31, 1997 and
1998.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
April 24, 2000
