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Registration Statement No.333-__________
SECURITY AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Digex, Incorporated
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(Exact name of registrant as specified in its charter)
Delaware 59-3582217
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Digex, Incorporated
One Digex Plaza
Beltsville, Maryland 20705
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(Address, including zip code, of principal executive offices)
Digex, Incorporated Long-Term Incentive Plan
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(Full title of the plan)
Mark K. Shull
President and Chief Executive Officer
Digex, Incorporated
One Digex Plaza
Beltsville, MD 20705
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(Name and address of agent for service)
(301)847-5000
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(Telephone number, including area code, of agent for service)
Copies to:
Ralph J. Sutcliffe, Esq.
Kronish Lieb Weiner & Hellman LLP
1114 Avenue of the Americas
New York, New York 10036-7798
(212) 479-6170
CALCULATION OF REGISTRATION FEE
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Title of Amount to Proposed Proposed Amount of
securities be maximum maximum registration
to be registered offering aggregate fee
offered price per offering
share(1) price
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Class A 9,000,000 $16.00 $144,000,000 $40,032
Common Shares
Stock, par
value $.01
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(1) Estimated solely for the purpose of calculating the registration fee. Based
on the estimated maximum initial offering price of the Common Stock to the
public on August __, 1999 pursuant to the Company's registration statement No.
333-77105 on Form S-1 under the Securities Act of 1933, as amended (the
"Securities Act") in accordance with rule 457(h) under the Securities Act.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
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The following documents filed by Digex, Incorporated. ("Digex") with the
Securities and Exchange Commission (the "SEC") are incorporated by reference
herein:
(a) Amendment No. 4 to Digex's Registration Statement on Form S-1
(No. 333-77105) filed with the SEC on July 29, 1999.
(b) The description of Digex's Common Stock which is contained in Digex's
Registration Statement on Form 8-A under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "Exchange
Act").
All documents subsequently filed by Digex with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-
effective amendment which indicates that all securities registered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents.
Item 4. Interests of Named Experts and Counsel
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Ralph J. Sutcliffe, a partner of Kronish Lieb Weiner & Hellman LLP and
counsel to the registrant beneficially owns 11,490 shares of common stock, $.01
par value per share, of Intermedia Communications Inc. ("Intermedia") and a
warrant to purchase 200,000 shares of Intermedia common stock, $.01 par value
per share, at an exercise price equal to $20.75 per share. Intermedia, through
its wholly owned subsidiary Business Internet, Inc. owns all of Digex's issued
and outstanding shares of Class B common stock entitling Intermedia to control a
majority of the voting power of Digex.
Item 5. Indemnification of Directors and Officers
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Digex's Certificate of Incorporation provides that Digex shall, to the
fullest extent permitted by the Delaware General Corporation Law (the "DGCL"),
indemnify all persons whom it may indemnify pursuant thereto (i.e., directors
and officers) and shall advance expenses incurred in defending any proceeding
for which such right to indemnification is applicable, provided that, if the
DGCL so requires, the indemnitee provides Digex with an
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undertaking to repay all amounts advanced if it is determined by a final
judicial decision that such person is not entitled to indemnification pursuant
to this provision. Digex's Certificate of Incorporation also contains a
provision eliminating the personal liability of Digex's directors for monetary
damages for breach of any fiduciary duty. By virtue of this provision, under the
DGCL, a director of Digex will not be personally liable for monetary damages for
breach of his fiduciary duty as a director, except for liability for (i) any
breach of the director's duty of loyalty to Digex or its stockholders, (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) dividends or stock purchases or redemptions that
are unlawful under the DGCL, and (iv) any transaction from which a director
derives an improper personal benefit. However, this provision of Digex's
Certificate of Incorporation pertains only to breaches of duty by directors as
directors and not in any other corporate capacity such as officers, and limits
liability only for breaches of fiduciary duties under the DGCL and not for
violations of other laws, such as the federal securities laws.
Our bylaws also provide that we must indemnify our directors, officers,
employees and agents, and that we must advance expenses, as incurred, to our
directors and officers in connection with a legal proceeding to the fullest
extent permitted by Delaware law, subject to certain very limited exceptions.
We intend to enter into indemnification agreements with each of our
directors and executive officers to give them additional contractual assurances
regarding the scope of the indemnification described above and to provide
additional procedural protections. Generally, pursuant to each indemnification
agreement, Digex will indemnify a director or officer who is or was a party to
any legal action by or against the indemnitee due to his or her position as a
Digex director or officer, known as the "Indemnitee," against the expenses,
judgments, fines and amounts paid in settlement that were actually and
reasonably incurred by the Indemnitee in connection with such legal action,
provided that such Indemnitee acted in good faith and in a manner not opposed to
the best interests of Digex.
We also intend to obtain directors' and officers' insurance providing
indemnification for our directors, officers and certain employees for certain
liabilities.
As a result of the inclusion of such provision, stockholders may be unable
to recover monetary damages against directors for actions taken by them that
constitute negligence or gross negligence or that are in violation of their
fiduciary duties, although it may be possible to obtain injunctive or other
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equitable relief with respect to such actions. The inclusion of this provision
in Digex's Certificate of Incorporation may have the effect of reducing the
likelihood of derivative litigation against directors, and may discourage or
deter stockholders or management from bringing a lawsuit against directors for
breach of their duty of care, even though such an action, if successful, might
otherwise have benefitted Digex and its stockholders.
There is no pending litigation or proceeding involving any of our
directors, officers or employees regarding which indemnification is sought, nor
are we aware of any threatened litigation that may result in claims for
indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling Digex pursuant to
the foregoing provisions, we have been informed that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
Item 6. Exhibits
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4.1 Certificate of Incorporation of Digex, filed as Exhibit 3.1 to
Digex's registration statement on Form S-1 (No. 333-77105) filed with the
SEC on April 27, 1999, and incorporated herein by reference.
4.2 Form of Certificate of Amendment to Certificate of Incorporation of Digex
(to be effective upon consummation of the public offering), filed as
Exhibit 3.3 to Amendment No. 4 to Digex's registration statement on Form S-
1 (No. 333-77105) filed with the SEC on July 29, 1999, and incorporated
herein by reference.
4.3 Bylaws of Digex, filed as Exhibit 3.2 to Digex's registration statement on
Form S-1 (No. 333-7105) filed with the SEC on April 27, 1999, and
incorporated herein by reference.
5.1 Opinion of Kronish Lieb Weiner & Hellman LLP.
23.1 Consent of Kronish Lieb Weiner & Hellman LLP, included in Exhibit 5.1.
23.2 Consent of Ernst & Young LLP.
24.2 Power of Attorney, included in signature page.
Item 7. Undertakings
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The undersigned registrant hereby undertakes:
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(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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.
(iii) 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 (i) and (ii) 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 SEC by Digex
pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That for the purpose of determining any liability under the Securities
Act, each such 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 Digex's annual report pursuant to Section 13(a) or
15(d) of the 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of Digex pursuant to the foregoing provisions, or otherwise, Digex has been
advised that in the
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opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by Digex of
expenses incurred or paid by a director, officer or controlling person of Digex
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, Digex 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act, Digex has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Beltsville, State of Maryland, on
this 29th day of July, 1999.
Digex, Incorporated
/s/ Mark K. Shull
By:___________________________
Mark K. Shull
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated. Each person whose signature appears below authorizes David C.
Ruberg and Robert M. Manning, or either of them, as attorney-in-fact to sign and
file in each capacity stated below, all amendments and post-effective amendments
to this Registration Statement.
Principal Executive Officers:
<TABLE>
<S> <C> <C>
/s/ Mark K. Shull
- -------------------------------------- President and Chief Executive July 29, 1999
Mark K. Shull Officer
Principal Financial and Accounting Officers:
/s/ Bradley E. Sparks
- -------------------------------------- Chief Financial Officer July 29, 1999
Bradley E. Sparks
/s/ Jeanne Walters
- -------------------------------------- Acting Controller July 29, 1999
Jeanne Walters
/s/ David C. Ruberg
- -------------------------------------- Chairman of the Board July 29, 1999
David C. Ruberg
/s/ John C. Baker
- -------------------------------------- Director July 29, 1999
John C. Baker
/s/ Philip A. Campbell
- -------------------------------------- Director July 29, 1999
Philip A. Campbell
/s/ George F. Knapp
- -------------------------------------- Director July 29, 1999
George F. Knapp
/s/ Pierce J. Roberts, Jr.
- -------------------------------------- Director July 29, 1999
Pierce J. Roberts, Jr.
</TABLE>
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<TABLE>
<S> <C> <C>
/s/ Jack E. Reich
- -------------------------------------- Director July 29, 1999
Jack E. Reich
/s/ Richard A. Jalkut
- -------------------------------------- Director July 29, 1999
Richard A. Jalkut
</TABLE>
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Item 8. Exhibits
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4.1 Certificate of Incorporation of Digex, filed as Exhibit 3.1 to Digex's
registration statement on Form S-1 (No. 333-77105) filed with the SEC on
April 27, 1999, and incorporated herein by reference.
4.2 Form of Certificate of Amendment to Certificate of Incorporation of Digex
(to be effective upon consummation of the public offering), filed as
Exhibit 3.3 to Amendment No. 4 to Digex's registration statement on Form S-
1 (No. 333-77105) filed with the SEC on July 29, 1999, and incorporated
herein by reference.
4.3 Bylaws of Digex, filed as Exhibit 3.2 to Digex's registration statement on
Form S-1 (No. 333-7105) filed with the SEC on April 27, 1999, and
incorporated herein by reference.
5.1 Opinion of Kronish Lieb Weiner & Hellman LLP.
23.1 Consent of Kronish Lieb Weiner & Hellman LLP, included in Exhibit 5.1.
23.2 Consent of Ernst & Young LLP.
24.2 Power of Attorney, included in signature page.
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EXHIBIT 5.1
July 29, 1999
Digex, Incorporated
One Digex Plaza
Beltsville, Maryland 20705
Ladies and Gentlemen:
We have acted as counsel for Digex, Incorporated (the "Company"), a
Delaware corporation, in connection with the registration pursuant to a
Registration Statement on Form S-8 (the "Registration Statement") by the Company
under the Securities Act of 1933, as amended (the "Act"), of 9,000,000 shares of
the Company's Class A common stock, par value $.01 per share (the "Common
Shares"), to be offered for sale by the Company from time to time pursuant to
awards granted under the Company's Long-Term Incentive Plan adopted in 1999 (the
"Plan").
We have examined the Company's Restated Certificate of Incorporation,
as amended, By-laws, and minute books and such other documents and records as we
have deemed necessary and relevant as a basis for our opinions hereinafter set
forth. For the purposes of this letter, we have assumed the genuineness of all
signatures and the conformity to original documents of all instruments furnished
to us for review or examination as copies.
Based on the foregoing and having regard to such legal considerations
as we have deemed relevant, it is our opinion that:
1. The Company is a corporation duly organized under the laws of the
State of Delaware.
2. The Common Shares covered by the Registration Statement have been
validly authorized.
3. When (i) the Common Shares have been duly registered under the
Act, (ii) certificates for the Common Shares have been duly delivered, and (iii)
the Company has received the consideration to be received by it pursuant to and
upon exercise of the related awards under the Plan, the Common Shares will be
validly issued, fully paid and non-assessable by the Company, with no personal
liability attaching to ownership thereof.
We hereby consent to the inclusion of this opinion in the Registration
Statement and to the references to this firm contained therein.
Very truly yours,
/s/ Kronish Lieb Weiner & Hellman LLP
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EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITOR
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Digex, Incorporated of our reports dated April 23, 1999, with respect to
the financial statements and schedules of Digex, Incorporated included in
Amendment No. 4 to Digex, Incorporated's Registration Statement (Form S-1),
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Tampa, Florida
July 27, 1999
