<PAGE>
As filed with the Securities and Exchange Commission on December 9, 1999.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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XCEED, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3006788
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
488 MADISON AVENUE
3RD FLOOR
NEW YORK, NEW YORK 10022
(212) 419-1200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
EMPLOYEE STOCK OPTION AGREEMENT
(Full Title of Plan)
------------------------------
WERNER G. HAASE, CHIEF EXECUTIVE OFFICER
488 MADISON AVENUE
3RD FLOOR
NEW YORK, NEW YORK 10022
(212) 419-1200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
Copies to:
Victoria A. Baylin, Esq.
Akin, Gump, Strauss, Hauer & Feld, LLP
1333 New Hampshire Avenue, NW
Suite 400
Washington, DC 20036
(202) 887-4000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------- ----------------------- ---------------- --------------------- ------------------
PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
AMOUNT TO AGGREGATE AGGREGATE OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER SHARE PRICE FEE
- --------------------------------------------- ----------------------- ---------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value 1,000,000 shares $6.00(2) $6,000,000 $1,584
- --------------------------------------------- ----------------------- ---------------- --------------------- ==================
</TABLE>
(1) This registration statement covers shares of common stock of Xceed, Inc.
that may be offered or sold pursuant to the Employee Stock Option
Agreement described herein. This registration statement also relates to an
indeterminate number of shares of common stock that may be issued upon
stock splits, stock dividends or similar transactions in accordance with
Rule 416 under the Securities Act.
(2) Calculated pursuant to Rule 457(h) for the purpose of computing the
registration fee, based upon the price at which the outstanding options may
be exercised.
<PAGE>
Reoffer Prospectus
XCEED, INC.
488 Madison Avenue
New York, New York 10022
1,000,000 SHARES OF COMMON STOCK
This reoffer prospectus relates to 1,000,000 shares of our common
stock, which may be offered for resale from time to time by the shareholder of
Xceed identified in this reoffer prospectus for his own benefit. The selling
shareholder acquired the common stock pursuant to his employment agreement with
the Company. This reoffer prospectus also covers such additional shares of
common stock as may be issuable to the selling shareholder in the event of a
stock dividend, stock split, recapitalization or other similar change in the
common stock.
Xceed's common stock trades on the NASDAQ National Market System
under the symbol "XCED." On December 8, 1999, the closing price of Xceed's
common stock, as reported by the Nasdaq was $37.38 per share. It is
anticipated that the selling shareholder will offer the common stock for sale
at prevailing prices on the Nasdaq on the date of sale. We will receive no
part of the proceeds of sales made hereunder.
INVESTING IN THE COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 2.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS REOFFER PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this reoffer prospectus is December 9, 1999.
<PAGE>
XCEED, INC.
Xceed delivers Internet strategy consulting and comprehensive, high
impact e-commerce and e-business business solutions by assisting organizations
of all sizes in leveraging the Internet to boost revenues, reduce costs, deepen
relationships with customers, suppliers, employees and other key business
partners.
During the past three months, we have acquired four companies engaged
in operations such as internet development, custom software design, systems
administration, and strategic consulting in the areas of mergers and
acquisitions, process management, and large systems implementation. These
acquisitions have allowed us to expand our existing operations as well as
develop a more expansive presence nationally. Additionally, as a result of these
acquisitions, we were able to enlarge our staff and gain personnel with
expertise in the areas of systems solutions, consulting, e-business and
e-commerce.
RISK FACTORS
A PURCHASE OF OUR SHARES INVOLVES RISKS. WE LIST BELOW SOME RISKS THAT
COULD HARM OUR BUSINESS, FINANCIAL CONDITIONS, OPERATING RESULTS AND STOCK
PRICE. OTHER RISKS THAT WE CANNOT NOW FORESEE MIGHT ALSO HURT US. YOU SHOULD
CAREFULLY CONSIDER THESE FACTORS AND THE OTHER INFORMATION IN THIS REOFFER
PROSPECTUS IN EVALUATING XCEED AND DECIDING WHETHER TO PURCHASE OUR COMMON
STOCK.
VERY LIMITED OPERATING HISTORY
Because Xceed has changed its business model, there exists limited
historical data on which to base the evaluation of the Company's results.
Companies in an early stage of development frequently face extra risks as they
evolve and grow. Further, the need for Xceed to ramp up in terms of human
resources and infrastructure in order to generate critical mass as a strong
competitor will only be achieved by significant expenditures, which will, for a
period of time, run ahead of revenues. Particular challenges faced by Xceed are
(i) its evolving business model in the sector (ii) the management of internal
and acquired growth, and (iii) the Company's successful divestiture of
non-strategic assets. To successfully manage these risks, Xceed must continue to
strengthen its infrastructure, market presence and brand as well as hire and
retain competent staff. Failing to achieve any of these tasks successfully, the
company's performance may be poor and the price of its equities affected
negatively.
OPERATING LOSS
We have incurred Operating Losses and will continue to do so. For
Fiscal 1999, the first year of operating in the Internet Sector, we are showing
an operating loss of $12,506,000. Although we have achieved revenue growth, we
may not be able to sustain such growth in light of changed market and/or
economic conditions. Therefore our operating results could worsen significantly.
In addition, since we will continue to invest in acquisitions, brand identity
and infrastructure, we can expect to incur operating losses through Fiscal Year
2000. Moreover, any inability on our part to control costs could seriously
affect our future operations.
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<PAGE>
RISKS RELATED TO THE INTEGRATION OF ACQUISITIONS.
Our growth strategy envisions continued growth through acquisitions
within and outside the United States. Acquiring companies entails a series of
specific risks, namely:
o Failure to retain key personnel.
o Management's deflection from focus on basic business needs.
o Disputes with the sellers of one or more acquired companies.
o Adverse affects on operating results from increase in goodwill amortization,
stock compensation expense and increased compensation expenses.
o The assumption of potentially hidden liabilities within one of the acquired
entities.
o If cash will be used for future acquisitions, we may need to secure additional
financing and, such financing, may not be available on favorite terms or at all;
alternatively, if the Company issues stock to complete future acquisitions,
existing shareholders will experience a dilution of their ownership.
MANAGING GROWTH
Our rapid growth since entering the sector has imposed strains on our
operational, managerial, financial and other resources. The Company believes
that it will need to engage additional staff to support the growth. Therefore,
the strain placed on the Company's operational and financial systems and the
need for improvement and expansion will continue.
SIGNIFICANT ADDITIONAL CAPITAL
Xceed may need to raise significant additional capital for future
liquidity and capital requirements. The need for raising capital may depend on
factors such as timing and amount of funds required for or generated by
operations; pace of future acquisitions and unanticipated business
opportunities.
Xceed may seek to raise funds through public and/or private financing
and/or joint ventures. Such funding may only be available in part, not at all or
at terms adverse to us. Further, we may have to sell stock at prices lower than
those paid for by current shareholders leading to dilution, or we may have to
sell stocks or debt instruments with rights superior to holders of common stock.
Debt financing may result in restricted operating flexibility on part of
management. If adequate funding on acceptable terms cannot be obtained, we may
be unable to pursue our growth plans, compete vigorously or seize onto business
opportunities.
NEED TO ESTABLISH BRAND
We are relatively unknown in the Internet Sector. We believe that brand
or identity together with the fusion of Internet strategy, creative services,
technology and solid methodology will be the decisive factors for our future
success. Therefore, we will need to fund a significant and costly branding
campaign. If our branding campaign is unsuccessful, or if we incur excessive
expense, our business and operating results as well as our financial condition
will be negatively impacted.
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OUR STOCK IS VOLATILE
Our Common Stock has been and is likely to be volatile in the future.
Fluctuating quarterly operating results could translate into wide fluctuating
prices in our stock. Likewise, our stock price may also respond negatively to
the announcements of competitors or general economic or stock market conditions
unrelated to our operating performance as well as other events or factors.
OUR DEPENDENCE ON KEY CUSTOMERS
As our client engagements have become more substantial, certain key
customer relationships have started to evolve. Such key customer relationships
could represent a significant percentage of revenues generated by the Company. A
loss or reduction of such key customer revenues could result in a decline of
revenue and earnings. For Fiscal 1999, one client, Pfizer, Inc., accounted for
approximately twenty four percent (24%) of our revenues.
INTELLECTUAL PROPERTY RIGHTS
We rely upon a combination of trade secret, nondisclosure and other
contractual arrangements to protect our proprietary rights. We enter into
confidentiality agreements with our employees and generally require that our
consultants and clients enter into such agreements and we limit access to and
distribution of our proprietary information. There can be no assurance that the
steps taken by us in this regard will be adequate to deter misappropriation of
our proprietary information or that the Company will be able to detect
unauthorized use and take appropriate steps to enforce our intellectual property
rights.
RAPID TECHNOLOGICAL CHANGES
Internet service providers are challenged by rapid changes in
technology. As such it will require us to maintain our technical competence to
effectively compete with other integrated marketing service providers as well as
traditional advertising agencies. There can be no assurance that we will be
successful in providing competitive solutions to our clients. Failure to do so
could result in the loss of existing customers or the inability to attract and
retain new customers, and as a result, this could have a material adverse effect
on our business, financial condition and operating results.
PROJECT PROFIT EXPOSURES; NEED TO DEVELOP RECURRING REVENUE
A significant amount of our Internet professional services revenue is
based on project fees on a fixed fee-for-service basis. As such, we assume
greater financial risk on fixed-price type contracts than on either time- and
material- or cost-reimbursable contracts. Failure to anticipate technical
problems, estimate costs accurately or control costs during performance of a
fixed-price contract may reduce our profit or cause a loss. Short-term
engagements create less exposure than a long-term fixed-price contract. In the
event we do not accurately anticipate the progress of a number of significant
revenue-generating projects, it could have a material adverse effect on our
operating results. Additionally, engagements can cover periods from one month to
years. Our future success will depend in part on our ability to convert more
project-by-project relationships to continuing engagements characterized by
recurring revenue. There can be no assurance that such efforts will be
successful.
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DEPENDENCE ON MANAGEMENT
We are significantly dependent upon the continued availability of Scott
Mednick, our Chairman and Chief Strategic Officer, Werner Haase, our Co-Chairman
and CEO, and William Zabit, our President. Mr. Haase is under an employment
agreement with us which expires in May 2001. Both Mr. Zabit and Mr. Mednick are
under employment agreements with us until December 2002; however, Mr. Mednick's
agreement allows him to resign after July 2000. The loss or unavailability of
Mr. Mednick, Mr. Haase or Mr. Zabit to us for an extended period of time could
have a material adverse effect on our business operations and prospects. To the
extent that Mr. Mednick's, Mr. Haase's or Mr. Zabit's services would be
unavailable to us for any reason, we would be required to procure other
personnel to manage and operate us. There can be no assurance that we would be
able to locate or employ such qualified personnel on acceptable terms. At the
present time, we do not have "key man" life insurance covering any of our
principal officers.
CONTROL
Werner Haase, our Co-Chairman and CEO, and his wife Nurit Kahane, who
is a Senior Vice President, own together a total of 2,153,900 shares of our
common stock, and Mr. Zabit owns 1,048,675 shares, which together represent
approximately 17.5% of the total shares outstanding. Under Delaware law, a
simple majority of stockholders may constitute a quorum for a meeting of
stockholders and may effect any action requiring a vote of stockholders. There
are no requirements for supermajority votes on any matter, nor is there any
cumulative voting for directors. Therefore, Mr. Haase, his wife and Mr. Zabit
jointly will be in a position to substantially influence the election of
directors and the conduct of our affairs.
FUTURE SALES OF COMMON STOCK
As of the current time, there are presently 18,266,599 shares of our
common stock outstanding. Approximately 8,300,000 of the outstanding shares are
deemed to be "restricted securities" ("Restricted Securities") within the
meaning of Rule 144 promulgated under the Securities Act of 1933 (the "Act") by
virtue of the fact that they are held by our "affiliates". Of the Restricted
Securities, approximately 700,000 are currently eligible for public sale in
accordance with Rule 144. Sales made pursuant to Rule 144 could have an adverse
effect on the price of our common stock.
YEAR 2000 COMPLIANCE
We have taken remedial steps to ensure that our computer systems are
compliant with the Year 2000 ("Y2K"). In this regard, The Performance Group has
purchased for internal operations new personal computers (PCS) which have been
tested by the National Software Testing Laboratories (NSTL) and have been
certified as Y2K compliant. With respect to client support, the division has
upgraded our software at no extra cost and is compliant with Y2K. With respect
to our internal software affecting accounting systems and telecommunications, we
have purchased additional equipment in order to achieve Y2K compliance in this
area. However, it is conceivable that we may experience operational difficulties
because of undetected errors or defects in the technology we employ.
NO DIVIDENDS
We have not paid any cash dividends upon our common stock since our
inception and, by reason of our present financial status and our contemplated
financial requirements, we do not anticipate paying any
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cash dividends in the foreseeable future. It is anticipated that earnings, if
any, which may be generated from operations will be used to finance our
operations.
USE OF PROCEEDS
The purpose of this offering is to resell the common stock acquired by
the selling shareholder from the Company pursuant to his employment agreement
with the Company. The shares of common stock offered by this reoffer prospectus
are being sold for the account of the selling shareholder. Xceed will not
receive any proceeds from the sale of such common stock. The proceeds received
from the purchase of the common stock from Xceed by the selling shareholder are
being added to Xceed's general funds.
SELLING SHAREHOLDERS
The following table sets forth as of December 9, 1999:
o the name of the selling shareholder who may sell common stock
pursuant to this reoffer prospectus and his relationship with
Xceed for the past three years;
o the number of shares of common stock that the selling shareholder
beneficially owned;
o the number of shares of common stock which may be offered for the
account of the selling shareholder by this reoffer prospectus; and
o amount and percentage of shares of common stock to be owned by the
selling shareholder if such selling shareholder were to sell all
of the common stock being offered hereunder.
<TABLE>
<CAPTION>
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SELLING SHAREHOLDER AND RELATIONSHIP TO SHARES OF COMMON MAXIMUM NUMBER OF COMMON STOCK
XCEED STOCK SHARES OF COMMON BENEFICIALLY OWNED
BENEFICIALLY STOCK AFTER OFFERING
OWNED TO BE SOLD NUMBER PERCENTAGE
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<S> <C> <C> <C> <C>
Scott Mednick, Chairman and Chief 1,000,000 (1) 1,000,000 (2) 0 0
Strategic Officer
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</TABLE>
(1) Does not include options for 300,000 shares awarded to Mr. Mednick during
fiscal year 1999. Such options vest August 3, 2000 at the rate of 100,000
per year commencing on that date, except that the vesting may be
accelerated under certain circumstances: a change in control, or the
receipt by us of at least $150,000 from an underwritten public offering,
or revenues of $75 million exclusive of revenues granted from first aid
and travel agency operations.
(2) All 1,000,000 shares are issuable upon options that are currently
exercisable.
PLAN OF DISTRIBUTION
The selling shareholder has not advised Xceed of any specific plans for
the distribution of the common stock covered by this reoffer prospectus.
However, if and when the common stock is sold, it is
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anticipated that the shares will be sold from time to time primarily in
transactions on Nasdaq at the market price then prevailing, although sales
may also be made in negotiated transactions or otherwise.
The selling shareholder may effect transactions by selling to or
through broker-dealers. Such broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling shareholder and/or the
purchasers of the common stock for whom such broker-dealers may act as agent or
to whom they may sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
selling shareholder and any broker-dealers that act in connection with the sale
of the common stock hereunder might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act. In that event, any commissions
received by them and any profit on the resale of the common stock as principal
might be deemed to be underwriting discounts and commissions under the
Securities Act. The common stock covered by this reoffer prospectus also may be
sold pursuant to Rule 144 under the Securities Act rather than pursuant to this
reoffer prospectus.
All expenses, including legal fees, of registration incurred in
connection with this offering are being borne by Xceed, but all selling and
other expenses incurred by the selling shareholder will be borne by the selling
shareholder.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby has
been passed upon by Akin, Gump, Strauss, Hauer & Feld, L.L.P.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference from Xceed's Annual Report on Form 10-K for the year ended August
31, 1999, have been audited by Holtz Rubenstein & Co., LLP, independent
auditors, as set forth in their report included in those financial statements
and incorporated herein by reference. Such financial statements are incorporated
herein in reliance upon the reports of Holtz Rubenstein & Co., LLP pertaining to
such financial statements given upon the authority of such firm as experts in
accounting and auditing.
AVAILABLE INFORMATION
We file annual, quarterly and special reports and other information
with the SEC. You may read and copy any document we file at the SEC's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. The address of the SEC's office in Washington, D.C. is 450
Fifth Street, N.W., Washington, D.C. 20549.
Our SEC filings are also available to the public from the SEC's web
site at http://www.sec.gov. In addition, you may read and copy our SEC filings
and other information at the National Association of Securities Dealers, Inc.,
1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information
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filed with the SEC will update and supersede this information. We incorporate by
reference the documents listed below:
o Xceed's annual report on Form 10-K for the fiscal year ended
August 31, 1999, pursuant to Section 13 of the Securities Exchange
Act of 1934 (File No. 000-13049);
o The description of Xceed's common stock contained in the
Registration Statement on Form 8-A, filed December 14, 1984, as
incorporated from Registration Statement No. 2-90512-NY, filed
July 10, 1984, and as updated by the Registration Statement on
Form S-1 (Registration No. 33-23910) declared effective on
October 31, 1988, and by the definitive proxy statement filed
January 8, 1998 by predecessors of the Company.
o All documents Xceed will subsequently file pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this reoffer prospectus and to
be part hereof from the date of filing such documents.
Xceed hereby undertakes to provide without charge to each person to
whom a copy of this reoffer prospectus is delivered, upon written or oral
request of any such person, a copy of any and all of the information that has
been or may be incorporated by reference into this reoffer prospectus. Requests
for such copies should be directed to the Secretary, Xceed, Inc., 488 Madison
Avenue, 3rd Floor, New York, New York 10022, telephone (212) 448-1100.
8
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You should rely only on the information contained in this reoffer
prospectus. We have not authorized anyone to provide you with different
information. The selling shareholder is not making an offer of these securities
in any state where the offer is not permitted. You should not assume that the
information provided by this reoffer prospectus is accurate as of any date other
than the date on the front of this reoffer prospectus.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
Xceed, Inc.................................. 2
Risk Factors................................ 2
Use of Proceeds............................. 6
Selling Shareholders........................ 6
Plan of Distribution........................ 6
Legal Matters............................... 7
Experts..................................... 7
Available Information....................... 7
Incorporation of Certain
Information by Reference................. 7
</TABLE>
1,000,000 Shares
XCEED, INC.
Common Stock
(par value $.01 per share)
REOFFER PROSPECTUS
December 9, 1999
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9
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, including any amendments thereto, which have
been or shall be filed by Xceed, Inc. with the Securities and Exchange
Commission are incorporated herein by reference and shall be deemed to be a part
hereof from the date of filing such documents.
(a) Xceed's annual report on Form 10-K for the fiscal year ended
August 31, 1999, pursuant to Section 13 of the Securities
Exchange Act of 1934;
(b) The description of Xceed's common stock contained in the
Registration Statement on Form 8-A, filed December 14,
1984, as incorporated from Registration Statement
No. 2-90512-NY, filed July 10, 1984, and as updated by the
Registration Statement on Form S-1 (Registration No. 33-23910)
declared effective on October 31, 1988, and by the definitive
proxy statement filed January 8, 1998 by predecessors of the
Company.
All documents subsequently filed by Xceed with the Commission pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of
this registration statement, but prior to the filing of a post-effective
amendment to this registration statement that indicates that all securities
offered by this registration statement have been sold or that deregisters all
such securities then remaining unsold, shall be deemed to be incorporated by
reference into this registration statement. Each document incorporated by
reference into this registration statement shall be deemed to be a part of this
registration statement from the date of the filing of such document with the
Commission until the information contained therein is superseded or updated by
any subsequently filed document that is incorporated by reference into this
registration statement or by any document that constitutes part of the
prospectus relating to the Employee Stock Option Agreement that meets the
requirements of Section 10(a) of the Securities Act.
ITEM 4. DESCRIPTION OF SECURITIES.
Xceed's common stock is registered pursuant to Section 12 of the
Exchange Act. Therefore, the description of securities is omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
II-1
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the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnify for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides (1) that to the extent a director or
officer of a corporation has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to in subsections (a) and (b)
of Section 145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; (2) that indemnification provided for
by Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; (3) that indemnification provided for by
Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators; and (4) that the corporation is empowered to purchase and
maintain insurance on behalf of a director or officer of the corporation against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145.
As permitted by Section 102(b)(7) of the General Corporation Law of the
State of Delaware, article seventh of our certificate of incorporation, as
amended, provides that none of our directors shall be liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability: (1) for any breach of the director's duty of loyalty to
Xceed or our stockholders; (2) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law; (3) under
Section 174; or (4) for any transaction from which the director derived an
improper personal benefit. We shall, to the fullest extent permitted by Section
145, as amended from time to time, indemnify all persons whom we may indemnify
pursuant thereto.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
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ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
4.1 - Employment Agreement dated July 17, 1998 between Xceed, Inc. and Scott Mednick
(Incorporated by reference from our Registration Statement on Form S-3, Amendment
No. 5, filed with the Commission on November 19, 1998).
4.2 - Stock Option Agreement dated September 1, 1998 between Xceed, Inc. and Scott
Mednick;
5.1 - Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to the legality of the
securities being registered;
23.1 - Consent of Holtz Rubenstein & Co., LLP;
23.2 - Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in Exhibit 5.1);
24.1 - Power of Attorney (included on the signature page of this prospectus).
</TABLE>
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ITEM 9. UNDERTAKINGS
(a) 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:
(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 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 dollar 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% change
in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the
effective 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 (a)(1)(i) and (a)(1)(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 by
the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the registration statement.
(2) That, for purposes 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.
(b) The undersigned registrant hereby undertakes 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 Exchange Act that is incorporated by reference in this
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.
(c) 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
II-4
<PAGE>
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 is, therefore,
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-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Xceed
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 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 December 7, 1999.
XCEED, INC.
By: /s/Werner G. Haase
----------------------------------------
Werner G. Haase, Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Werner G. Haase and Scott Mednick, and
each of them, with full power to act without the other, such person's true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this registration statement, any and all amendments thereto
(including post-effective amendments), any subsequent registration statements
pursuant to Rule 462 of the Securities Act of 1933, and any amendments thereto
and to file the same, with exhibits and schedules thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing necessary or desirable
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C>
/s/Werner G. Haase Co-Chairman of the Board December 7, 1999
- ----------------------------- and Chief Executive
(Werner G. Haase) Officer (Principal
Executive Officer)
/s/Scott Mednick Chairman of the Board and December 7, 1999
- ----------------------------- Chief Strategic Officer
(Scott Mednick)
/s/John P. Gandolfo Vice President and December 7, 1999
- --------------------------------- Chief Financial Officer
(John P. Gandolfo) (Principal Financial and
Accounting Officer)
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C>
/s/William Zabit President and Director December 7, 1999
- -------------------
(William Zabit)
/s/Terry Anderson Director December 7, 1999
- -------------------
(Terry Anderson)
/s/John Bermingham Director December 7, 1999
- -------------------
(John Bermingham)
/s/Norman Docteroff Director December 7, 1999
- -------------------
(Norman Docteroff)
</TABLE>
II-7
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
4.1 - Employment Agreement dated July 17, 1998 between Xceed, Inc. and Scott Mednick
(Incorporated by reference from our Registration Statement on Form S-3, Amendment
No. 5, filed with the Commission on November 19, 1998).
4.2 - Stock Option Agreement dated September 1, 1998 between Xceed, Inc. and Scott
Mednick;
5.1 - Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to the legality of the
securities being registered;
23.1 - Consent of Holtz Rubenstein & Co., LLP;
23.2 - Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in Exhibit 5.1);
24.1 - Power of Attorney (included on the signature page of this prospectus).
</TABLE>
<PAGE>
EXHIBIT 4.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (this "Agreement") is entered into
effective as of September 1, 1998, by and between X-Ceed, Inc., a Delaware
corporation (the "Company"), and Scott A. Mednick ("Optionee").
In consideration of, and subject to, the covenants set forth in that
certain Employment Agreement (the "Employment Agreement") dated July 17, 1998 by
and between the Company and Optionee and the covenants set forth herein, the
parties agree as follows:
1. OPTION GRANT: NUMBER OF SHARES: PRICE. The Company hereby grants to
Optionee the right ("Option") to purchase all or any portion of 1,000,000 shares
of the Common Stock of the Company ("Stock") at a purchase price of $6.00 per
share (the "Option Price"). This Option is currently exercisable and may be
exercised in whole or in part from time to time until its expiration in
accordance with Section 2 below. It is intended that the Option will not qualify
for treatment as an "Incentive Stock Option" under Section 422 of the Internal
Revenue Code of 1986, as amended.
2. TERMS OF AGREEMENT. This Agreement shall expire ten (10) years from
the date of this Agreement.
3. THIS AGREEMENT SUBJECT TO EMPLOYMENT AGREEMENT. This Agreement is
made under and subject to the provisions of the Employment Agreement and shall
be interpreted in a manner consistent with it. To the extent that any provision
in this Agreement is inconsistent with the Employment Agreement, the provisions
of the Employment Agreement shall control.
4. EXERCISE OF THE OPTION. This Option may be exercised by Optionee (or
after Optionee's death, by the person designated in Section 5 of this Agreement)
only in accordance with the following provisions:
(a) This Option may be exercised by Optionee upon delivery
of the following to the Company at its principal
executive offices:
(i) a written notice of exercise which identifies
this Agreement, states the number of shares of
Stock then being purchased and, if such
exercise is by way of "cashless exercise," an
order to a broker to sell Stock as required
pursuant to Section 3.4.4 of the Employment
Agreement;
(ii) except upon exercise of all or any portion
of the Option by way of "cashless exercise"
as described in Section 3.4.4 of the
Employment Agreement, a check or cash in the
amount of the Option Price (or payment of
the Option Price in such other form of
lawful consideration as the Company's Board
of Directors may approve from time to time);
and
<PAGE>
(iii) except upon exercise of any portion of the
Option by way of "cashless exercise" as
described in Section 3.4.4 of the Employment
Agreement, a check or cash, if requested by
the Company either before or after the
Company's receipt of the notice of exercise,
in the amount of any taxes (other than stock
issue or transfer taxes) which the Company
is obligated to collect or withhold by
reason of the exercise of the Option.
(b) The Option shall be exercisable at any time prior to the
end of the business day on which this Agreement expires
in accordance with the terms of Section 2 above.
5. CONSULTING DUTIES. Provided that (i) any part of the Option is
currently exercisable and (ii) Optionee's obligation to consult would not cause
him to be in competition or otherwise conflict with any endeavor or other
obligation to a third party in which Optionee was then engaged, the Company
shall have the right but not the obligation to consult with Optionee pursuant to
the terms set forth in this Section 5 on matters involving strategic alliances
for the Company and the achievement of growth on the interactive sector.
Optionee shall make himself available for consultation in Los Angeles,
California, or such other place as Optionee may designate, for a period of five
(5) years commencing upon the expiration of the Employment Agreement and
terminating on the fifth anniversary of such expiration; provided, however,
Optionee's obligation to provide such consulting services shall be limited to no
more than six (6) occasions in any one (1) year and no more than one (1) hour on
each such occasion. In addition thereto and during such five-year period, the
Company shall have the right but not the obligation to retain Optionee to
evaluate possible candidates for acquisitions by the Company, provided Optionee
is compensated for such services at a rate to be mutually agreed upon by the
parties.
6. NO ASSIGNMENT; DEATH OF OPTIONEE. The rights of Optionee under this
Agreement may not be assigned or transferred except by will or by the laws of
descent and distribution. This Option shall be exercisable only by Optionee
during Optionee's lifetime. Any attempt to assign this Option in contravention
of this Agreement shall be void and shall have no effect. If Optionee should die
while any part of the Option remains unexercised, Optionee's legal
representative, Optionee's legatee, or the person who acquired the right to
exercise this Option by reason of the death of Optionee (the "Successor")
succeeds to Optionee's rights under this Agreement. After the death of Optionee,
only Optionee's Successor may exercise the Option.
7. RECAPITALIZATION, REORGANIZATION, MERGER OR CONSOLIDATION. If the
outstanding shares of Common Stock of the Company are increased, decreased or
exchanged for different securities through reorganization, merger,
consolidation, recapitalization, reclassification, stock split, stock dividend
or like capital adjustment, a proportionate adjustment shall be made in the
number, price, and kind of shares subject to the Option granted herein.
Upon the dissolution or liquidation of the Company or upon any
reorganization, merger or consolidation in which the Company does not survive or
in which the equity ownership of the Company prior to such transaction
represents less than 50% of the equity ownership of the Company
2
<PAGE>
subsequent to the transaction, this Option shall terminate; provided, however,
that the Company will give written notice thereof to Optionee at least 30 days
prior to the date of such dissolution, liquidation, reorganization, merger or
consolidation, and in such event (a) the Company shall grant the right, until
ten (10) days before the effective date of such dissolution, liquidation,
reorganization, merger or consolidation, to exercise, in whole or in part, this
Option; and (b) to the extent such Options remain unexercised as of the
effective date of such dissolution, liquidation, reorganization, merger or
consolidation, the surviving corporation shall tender to Optionee an option or
options to purchase shares of the surviving corporation, and such new option or
options shall contain such terms and provisions as shall be required to
substantially preserve the rights and benefits of this Agreement.
8. NO RIGHTS AS STOCKHOLDER. Other than as required by law, Optionee
shall have no rights as a stockholder of any shares of Stock covered by this
Agreement until the date an entry evidencing such ownership is made in the stock
transfer books of the Company.
9. NO RIGHT TO EMPLOYMENT. Except as provided in the Employment
Agreement, this Agreement shall not confer upon Optionee any right to employment
or continuance of performance of services for the Company or any subsidiary
corporation.
10. RESTRICTIVE LEGENDS. Optionee hereby acknowledges that federal
securities laws and the securities laws of the state in which Optionee resides
may require the placement of certain restrictive legends upon the Stock issued
upon exercise of the Option, and Optionee hereby consents to the placing of any
such legends upon certificates evidencing the Stock as the Company, or its
counsel, may reasonably deem necessary; provided, however, that any such legend
or legends immediately shall be removed when no longer applicable.
11. NOTICES. All notices, requests and other communications hereunder
shall be in writing and, if given by telegram, telecopy or telex, shall be
deemed to have been validly served, given or delivered when sent, if given by
personal delivery, shall be deemed to have been validly served, given or
delivered upon actual delivery and, if mailed, shall be deemed to have been
validly served, given or delivered three business days after deposit in the
United States mails, as registered or certified mail, with proper postage
prepaid and addressed to the party or parties to be notified, at the following
addresses (or such other address(es) as a party may designate for itself by like
notice):
If to the Company:
X-Ceed, Inc.
488 Madison Avenue
New York, New York 10022
If to Optionee:
Scott A. Mednick
7927 Mulholland Drive
Los Angeles, California 90046
3
<PAGE>
12. AMENDMENT AND WAIVERS. This Agreement and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.
13. GOVERNING LAW. This Agreement shall be construed under and governed
by the laws of the State of Delaware without regard to the conflict of law
provisions thereof.
14. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and both of which together shall be deemed
one Agreement.
IN WITNESS WHEREOF, the Company and Optionee have executed this
Agreement effective as of the date first set forth above.
"Company" X-CEED, INC., a Delaware corporation
By: /s/ WERNER G. HAASE
--------------------------------
Werner G. Haase
Its: Chief Financial Officer
"Optionee" /s/ SCOTT A. MEDNICK
-----------------------------------
Scott A. Mednick
4
<PAGE>
EXHIBIT 5.1
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1333 New Hampshire Avenue, N.W.
Suite 400
Washington, D.C. 20036
(202) 887-4000
Fax (202) 887-4288
Writer's Direct Dial Number (202) 887-4462
December 9, 1999
Xceed, Inc.
488 Madison Avenue
3rd Floor
New York, New York 10022
Ladies and Gentlemen:
We have acted as counsel to Xceed, Inc., a Delaware corporation (the
"Company"), in connection with the registration of 1,000,000 shares of common
stock, par value $.01 per share (the "Common Stock"), of the Company,
pursuant to the registration statement on Form S-8 (the "Registration
Statement") filed by the Company under the Securities Act of 1933, as
amended. The Registration Statement relates to the shares of Common Stock
issuable to Scott Mednick pursuant to the Employment Agreement dated July 17,
1998, between the Company and Mr. Mednick (the "Employment Agreement"), and
the related Stock Option Agreement dated September 1, 1998, between the
Company and Mr. Mednick (the "Stock Option Agreement").
In our opinion, the Common Stock to be registered under the
Registration Statement has been duly authorized for issuance by the Company, and
upon issuance and delivery in accordance with the Employment Agreement and Stock
Option Agreement, the Common Stock will be validly issued, fully paid and
non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the reference to our firm under the caption "Experts" in
the Registration Statement on Form S-8 pertaining to shares of Xceed Inc.
Common Stock issuable to and to be re-offered by Scott Mednick, and to the
incorporation by reference into such Registration Statement of our report
dated November 19, 1999 with respect to the consolidated financial statements
of Xceed Inc. included in the Annual Report on Form 10-K for the year ended
August 31, 1999.
/s/ Holtz Rubenstein & Co., LLP
HOLTZ RUBENSTEIN & co., LLP
Melville, New York
December 7, 1999
