<PAGE>
As filed with the Securities and Exchange Commission on September 29, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Xceed Inc.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C> <C>
Delaware 7373 13-3006788
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
233 Broadway, New York, New York 10279
(212) 553-3112
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Howard Tullman, Chief Executive Officer
Xceed Inc.
233 Broadway, New York, New York 10279
(212) 553-3112
(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, L.L.P.
1333 New Hampshire Avenue, N.W.
Washington, D.C. 20036
(202) 887-4000
Approximate date of commencement of proposed sale to the public: From time to
time after the 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
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.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Amount to be Offering Aggregate Amount of
Registered (1) Price Per Share (2) Offering Price Registration Fee
Title of Shares to be Registered
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per
Share ............................. 32,108,787 $1.82815 $58,699,679 $15,497
</TABLE>
(1) This Registration Statement also covers an indeterminate number of
additional shares of common stock that may be issued to the selling
shareholders, with respect to the shares of common stock registered hereby,
in the event of a stock dividend, stock split, recapitalization or other
similar change in the common stock.
(2) The proposed maximum offering price per share is estimated for purposes of
this filing pursuant to Rule 457(c) based upon the average of the high and
low selling prices on September 28, 2000.
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 the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED __, 2000
PROSPECTUS
[LOGO]
32,108,787 Shares of Common Stock
This prospectus relates to up to 32,108,787 shares of common stock of Xceed
Inc. which may be offered from time to time by certain existing shareholders of
Xceed. Xceed will not receive any of the proceeds from the sale of the common
stock. Xceed will bear the costs relating to the registration of the common
stock which are estimated to be approximately $32,497.
The common stock is being registered in connection with Xceed's issuance to
Peconic Fund, Ltd., Leonardo, L.P. and HFTP Investment, L.L.C. of an aggregate
of 30,000 shares of its Series A Cumulative Convertible Preferred Stock, par
value $0.05 per share issued on January 13, 2000.
Xceed agreed to register for resale all shares of common stock of Xceed
issuable to the above entities on conversion of the shares of Series A
Cumulative Preferred Stock issued to each of them. This prospectus also covers
such additional shares of common stock as may be issuable to the selling
shareholders in the event of a stock dividend, stock split, recapitalization or
other similar change in the common stock.
The selling shareholders may sell the shares from time to time at fixed
prices, market prices, prices computed with formulas based on market prices or
at negotiated prices and may engage a broker or dealer to sell the shares. For
additional information on the selling shareholders' possible methods of sale,
you should refer to the section of this prospectus entitled "Plan of
Distribution" on page 5.
Our common stock is traded on the Nasdaq National Market under the symbol
"XCED". On September 28, 2000, the last reported sale price for our common
stock on the Nasdaq National Market was $1.8125 per share.
Any investment in the shares of common stock included herein involves risk.
See "Risk Factors" beginning on page 4 to read about certain risks you should
consider before buying shares of our common stock.
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
Information contained herein is subject to completion or amendment. A
registration relating to these securities has been filed with the Securities and
Exchange Commission. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the solicitation of an offer
to buy, nor shall there be any sale of these securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to the
registration or qualification under laws of any such jurisdiction.
The date of this prospectus is __, 2000
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Xceed Inc. .................................................................................... 1
Risk Factors ................................................................................... 3
Forward-Looking Statements ..................................................................... 3
Selling Shareholders ........................................................................... 4
Plan of Distribution ........................................................................... 4
Use of Proceeds ................................................................................ 5
Our Business ................................................................................... 6
Legal Matters .................................................................................. 15
Experts ........................................................................................ 16
Where You Can Find More Information ............................................................ 16
</TABLE>
<PAGE>
XCEED INC.
Our Business
We are Interactive Architects who provide Internet professional services that
seek to transform the way companies conduct eBusiness. Through our multi-
disciplined methodology, we offer a full range of services that allow us to
deliver end-to-end solutions enabling companies to capitalize on the reach and
efficiency of the Internet. Our key competencies include:
. strategic consulting--creating specialized business plans and models to
enable our clients to operate and improve their eBusinesses;
. creative design--developing robust visual and interactive web site content
and graphics;
. technology integration--combining third-party products with our customized
technology applications and components to create a specialized, technical
infrastructure for our clients;
. business transformation--implementing and integrating new eBusiness models
and technology with our clients' existing operations;
. research and analysis--conducted through our Xceed Intelligence group that
covers 13 industries; and
. marketing and branding--promoting our clients' eBusinesses, services and
brands to their existing and target customers and industry segment.
Our multi-disciplined methodology enables us to provide our clients with
solutions to:
. strengthen relationships with customers and business partners in both
business-to-business and business-to-consumer environments;
. create new revenue and distribution opportunities; and
. reduce costs and improve operating efficiencies, productivity and internal
communications.
Our strategic, technical and creative personnel collaborate to address the
full range of end-to-end solutions required to meet the increasingly large and
complex needs of an expanding, sophisticated client base. The industry in which
we operate is time-to-market sensitive, and we believe that we provide faster
project delivery than many of our competitors due to our ability to use
previously developed technology applications for multiple client engagements.
Our proven methodology provides a framework to assess and execute each stage of
a client engagement. By delivering our services in a seamless and integrated
fashion, we guide our clients from concept to launch and deployment of their
eBusinesses.
Our Market Opportunity
The emergence and acceptance of the Internet as a new global medium has
fundamentally changed the way that consumers and businesses communicate, obtain
information, purchase goods and services and transact business. eBusiness, which
is business that combines the reach and efficiency of the Internet with both
emerging and existing technologies, is significant for many companies,
regardless of industry or location. International Data Corporation, an
independent market research firm, expects dramatic growth in total eBusiness
transaction volume, projecting an increase from $111.4 billion last year to $1.3
trillion in 2003, representing a compound annual growth rate of 85%. With the
expanding creative and technical demands of supporting eBusiness, companies are
increasingly outsourcing their eBusiness functions to capitalize on the
competencies of Internet professional services companies. According to
International Data Corporation, this trend will help increase the demand for
Internet professional services from $12.9 billion last year to $78.5 billion in
2003, representing a compound annual growth rate of 57%.
Recent Developments
<PAGE>
We were founded in 1979 and primarily manufactured and marketed first aid burn
products and provided business travel services to corporations until 1998.
During recent years, we decided to pursue a number of strategic acquisitions
designed to shift our corporate focus to the provision of Internet professional
services. As part of this decision, we changed our name from Water-Jel
Technologies, Inc. to Xceed Inc. in March 1998.
Since August 1998, we have acquired 12 companies engaged in operations such as
Internet consulting, interactive marketing and e-commerce development
strategies, custom software design, systems administration and strategic
consulting for mergers and acquisitions, process management and large systems
implementation. These acquisitions have allowed us to expand our existing
Internet professional services operations, as well as develop a more expansive
geographic presence. Through these acquisitions, personnel with expertise in
systems solutions, consulting, eBusiness and e-commerce joined our company. We
have grown from 237 employees as of August 31, 1999 to 623 employees as of
August 31, 2000.
Until recently, we operated two divisions that were not aligned with our
current corporate focus. These two divisions were Water-Jel Technologies, our
first aid burn product division, and Journeycorp, our business travel division.
We sold Water-Jel in January 2000 and Journeycorp in July 2000. We are currently
exploring various strategic alternatives with respect to our performance
enhancement business, including the possible sale of all or part of this
business.
Our Offices
Our principal executive offices are located at 233 Broadway, New York, New
York 10279. Our telephone number at that location is (212) 553-3112. We also
have offices in Atlanta, Chicago, Colorado Springs, Dallas, Los Angeles,
Phoenix, San Francisco, Amsterdam and London. Our Internet address is
www.xceed.com. The information contained on our web site is not incorporated by
reference in this prospectus and shall not be considered a part of this
prospectus.
<PAGE>
RISK FACTORS
A purchase of our common stock involves risk. Please see our annual report on
Form 10-K/A for the fiscal year ended August 31, 1999 for a discussion of risks
that could harm our business, financial condition, operating results and stock
price. You should carefully consider these factors and the other information in
this prospectus in evaluating us and deciding whether to purchase our common
stock.
FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus that are not historical facts are
"forward-looking statements," as defined in Section 27A of the Securities Act
and Section 21E of the Securities Exchange Act of 1934, which can be identified
by the use of forward-looking terminology such as "estimates," "projects,"
"anticipates," "expects," "intends," "believes," or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. Examples of these forward-looking
statements include, but are not limited to:
. our plans to expand our existing operations through acquisitions and the
hiring of additional personnel;
. expectations of anticipated benefits of our acquisitions;
. estimates of future operating results;
. expectations of generating a significant portion of our revenues from a
limited number of large clients;
. plans to further develop and commercialize value-added services;
. expectations regarding our relationships with clients and other third
parties;
. expectations of pricing for our services in the future;
. our ability to successfully launch a branding campaign;
. our anticipated capital expenditures;
. other statements contained in this prospectus regarding matters that are
not historical facts; and
. our plans with respect to strategic alternatives regarding our performance
enhancement business.
These statements are only estimates or predictions and cannot be relied upon.
We can give you no assurance that future results will be achieved. Actual events
or results may differ materially as a result of risks facing us or actual
results differing from the assumptions underlying such statements. These risks
and assumptions could cause actual results to vary materially from the future
results indicated, expressed or implied in the forward-looking statements
included in this prospectus.
All forward-looking statements made in this prospectus that are attributable
to us or persons acting on our behalf are expressly qualified in their entirety
by the factors listed above in the section captioned "Risk Factors" and other
cautionary statements included in this prospectus. We disclaim any obligation to
update information contained in any forward-looking statement.
<PAGE>
SELLING SHAREHOLDERS
The shares of common stock covered by this prospectus, assuming conversion of
the Series A Cumulative Convertible Preferred Stock by the current holders
thereof, will be held by three selling shareholders upon such conversion.
Under the Certificate of Designations, Preferences and Rights of Series A
Cumulative Convertible Preferred Stock for the Series A Cumulative Convertible
Preferred Stock, no selling shareholder may convert shares of Series A
Cumulative Convertible Preferred Stock to the extent such conversion would cause
such selling shareholder's beneficial ownership of our common stock (other than
deemed beneficially owned through ownership of unconverted shares of the Series
A Cumulative Convertible Preferred Stock and exercise of the related warrants)
to exceed 4.99% of the outstanding shares of our common stock.
Any selling shareholder listed below may or may not choose to sell all of the
shares of common stock owned by it.
<TABLE>
<CAPTION>
Securities Securities Which Securities
Owned Before May be Sold in the To Be Owned
Name of Shareholder Offering Offering After Offering(/1/)
<S> <C> <C> <C>
Leonardo, L.P. 814,471 10,702,929 0
Peconic Fund, Ltd. 664,470 10,702,929 0
HFTP Investment, L.L.C. 964,471 10,702,929 0
</TABLE>
(1) Assumes all shares of common stock underlying the Series A Cumulative
Convertible Preferred Stock and related warrants will be sold by the selling
stockholders.
PLAN OF DISTRIBUTION
We have filed a registration statement relating to the shares of common stock
being offered hereunder in connection with the Registration Rights Agreement,
dated January 13, 2000, by and among Xceed, Leonardo, L.P., Peconic Fund, Ltd.
and HFTP Investment, L.L.C. and the Agreement, dated April 4, 2000, by and among
Xceed, Leonardo, L.P. Peconic Fund, Ltd. and HFTP Investment, L.L.C.
The selling shareholders (and their respective pledgees, transferees, donees
or other successors in interest) may offer and sell the shares of common stock
covered by this prospectus from time to time as follows:
. in the open market
. on the NASDAQ National Market;
. in privately negotiated transactions;
. in an underwritten offering; or
. a combination of such methods or any other legally available means.
Such sales may be made at varying prices determined by reference to, among
other things:
. market value prevailing at the time of the sale;
. prices related to the then-prevailing market price; or
. negotiated prices.
Negotiated transactions may include:
. purchases by a broker-dealer as principal and resale by such broker-dealer
for its account pursuant to this prospectus;
. ordinary brokerage transactions and transactions in which a broker solicits
purchasers; or
. block trades in which a broker-dealer so engaged will attempt to sell the
shares as agent but may take a position and resell a portion of the block
as principal to facilitate the transaction.
<PAGE>
In connection with distributions of our common stock, any selling shareholder
may:
. enter into hedging transactions with broker-dealers and the broker-dealers
may engage in short sales of our common stock in the course of hedging the
positions they assume with the selling shareholders;
. sell our common stock short and deliver the common stock to close out such
short positions;
. enter into option or other transactions with broker-dealers that involve
the delivery of our common stock to the broker-dealers, which may then
resell or otherwise transfer such common stock; and
. loan or pledge our common stock to a broker-dealer which may then sell
our common stock so loaned or upon a default may sell or otherwise transfer
the pledged common stock.
Broker dealers may receive commissions or discounts from the selling
shareholders in amounts to be negotiated immediately prior to the sale. The
selling shareholders and any broker executing selling orders on behalf of the
selling shareholders may be deemed to be an "underwriter" within the meaning of
the Securities Act. Commissions received by any such broker may be deemed to be
underwriting commissions under the Securities Act.
USE OF PROCEEDS
The shares of common stock covered by this prospectus will be offered for the
account of the selling shareholders. Accordingly, we will not receive any
proceeds from the sale of the shares of common stock. The principal reason for
this offering is to enable the selling shareholders to resell the common stock
they acquire on the conversion of the Series A Cumulative Convertible Preferred
Stock and the exercise of the warrants.
<PAGE>
OUR BUSINESS
Overview
We are Interactive Architects who provide Internet professional services that
seek to transform the way companies conduct eBusiness. Using a proven, multi-
disciplined methodology, we offer a full range of services that allow us to
deliver end-to-end solutions enabling companies to capitalize on the reach and
efficiency of the Internet. Our key competencies include:
. strategic consulting--creating specialized business plans and models to
enable our clients to operate and improve their eBusinesses;
. creative design--developing robust visual and interactive web site content
and graphics;
. technology integration--combining third-party products with our customized
technology applications and components to create a specialized, technical
infrastructure for our clients;
. business transformation--implementing and integrating new eBusiness models
and technology with our clients' existing operations;
. research and analysis--conducted through our Xceed Intelligence group that
covers 13 industries; and
. marketing and branding--promoting our clients' eBusinesses, services and
brands to their existing and target customers and industry segment.
Our Internet professional services clients are a combination of multinational
corporations, mid-to-large-sized companies and startups operating in various
industries, such as computers and technology, entertainment, financial services,
healthcare and pharmaceuticals, retail and telecommunications. These clients
include CBS, Casual Corner, Compaq, HBO, Motorola, Nestle, Pitney Bowes and
Warner Bros. Online. We provide our clients with solutions to:
. strengthen relationships with customers and business partners in both
business-to-business and business-to-consumer environments;
. create new revenue and distribution opportunities; and
. reduce costs and improve operating efficiencies, productivity and internal
communications.
Our strategic, technical and creative personnel collaborate to address the
full range of end-to-end solutions required to meet the increasingly large and
complex needs of an expanding, sophisticated client base. The industry in which
we operate is time-to-market sensitive, and we believe that we provide faster
project delivery than many of our competitors due to our ability to use
previously developed technology applications for multiple client engagements.
Our proven methodology provides a framework to assess and execute each stage of
a client engagement. By delivering our services in a seamless and integrated
fashion, we guide our clients from concept to launch and deployment of their
eBusinesses.
Industry Background
Emergence and growth of the Internet
The emergence and acceptance of the Internet as a new global medium has
fundamentally changed the way that consumers and businesses communicate, obtain
information, purchase goods and services and transact business. According to
International Data Corporation, an independent market research firm, the number
of worldwide Internet users will increase from 196 million at the end of last
year to 502 million by the end of 2003, representing a compound annual growth
rate of 27%. International Data Corporation also estimates that Internet
content, measured by the number of web pages worldwide, will increase from 1.7
billion pages in 1999 to 13.1 billion pages in 2003, representing a compound
annual growth rate of 67%.
<PAGE>
Initially, companies used the Internet as a means of advertising or promoting
their businesses. Typically they published web sites with read only, brochure-
like information intended to enhance internal and external communications.
Companies either used their own internal design and information technology
resources or hired online advertising agencies and web design firms to develop
and deploy their initial web sites. Businesses quickly recognized the Internet's
potential to enhance their ability to attract and serve clients and viewed the
Internet as a medium to differentiate themselves and gain a competitive
advantage.
The next stage in the adoption of the Internet as a business medium typically
involved the construction of systems that enabled limited types of transactions
to be conducted over the Internet or that focused on improvements in procurement
and distribution. At this stage, companies came to view the Internet primarily
as another channel to their core business. In order to build these sorts of
eBusiness systems, companies were required to shift their focus from simple web
design to the integration of client/server applications with those systems.
Because internal marketing and information technology, or IT departments, often
lacked the resources or capabilities to build these systems, firms increasingly
began to hire traditional IT services firms focused on the integration of
client/server systems and traditional marketing services firms to complement the
services of web design firms.
Growth of eBusiness
Today, many companies recognize that the Internet offers even greater
potential for enhancing or defending their competitive positions. These
companies understand that the Internet is redefining the key determinants of
business success and the way business is conducted. In our view, this
understanding has led to the emergence of eBusiness, which is business that
combines the reach and efficiency of the Internet with both emerging and
existing technologies.
The emergence of eBusiness is significant for companies across many
industries. International Data Corporation expects significant growth in total
eBusiness transaction volume, projecting an increase from $111.4 billion last
year to $1.3 trillion in 2003, representing a compound annual growth rate of
85%. In many industries, physical or capital assets are becoming less important
as barriers to entry. The Internet is reducing the effect of geographic
barriers, providing access to the best prices worldwide and challenging the way
many businesses have historically competed. Competition can come from new,
unexpected sources in addition to traditional ones. The ability to differentiate
products or services and to price advantageously is greatly enhanced as the
consumer is given more information, choice and power. In light of all of these
factors, many new and established companies are expanding or creating their
businesses to integrate eBusiness capabilities.
Market for Internet professional services
The development and implementation of Internet-based solutions require the
successful integration of strategic consulting, creative design, application
development and systems engineering skills. Historically, expertise in these
areas either has not existed within an organization or has been located in
disparate functional areas. Accordingly, many businesses have chosen to
outsource a significant portion of the development, design, implementation and
maintenance of their intranets, extranets, web sites and e-commerce applications
to independent service providers who can capitalize on their accumulated
strategic, creative and technical expertise. Such outsourcing needs have
generated worldwide demand for Internet professional services, which
International Data Corporation estimates will grow from $12.9 billion last year
to $78.5 billion in 2003, representing a compound annual growth rate of 57%.
Companies are increasingly looking for firms that can supply end-to-end
strategic consulting, creative design, application development, systems
engineering skills and other value-added services. Many traditional service
providers lack the requisite expertise to implement comprehensive Internet-based
solutions. Many IT services firms lack the creative and marketing skills
required to build audiences and deliver unique and compelling content as well as
Internet expertise and implementation capabilities. Advertising and marketing
communications firms typically cannot provide the extensive technical skills and
systems integration expertise required to deliver the increasingly complex
solutions demanded by clients. Many strategic consulting firms do not offer
Internet expertise, marketing perspective and implementation capabilities to
deliver comprehensive solutions. A number of Internet professional services
firms have emerged to address these needs. We believe that we are one of the few
firms that have the depth, management and infrastructure necessary to deliver
the end-to-end solutions required to meet the increasingly larger and more
complex projects and needs of an expanding, and sophisticated client base.
<PAGE>
We believe that the rapidly increasing demand for Internet solutions has
created significant market opportunities for us, as we are able to address the
full range of end-to-end solutions.
The Xceed Solution
We help our clients use the Internet to develop and enhance their eBusinesses
and interact effectively, both internally with employees and externally with
vendors, suppliers and customers. To enhance our clients' core businesses,
operations and communications, we:
. Follow a proven methodology. Our multi-disciplined branded methodology is
designed to carefully plan and implement successful and innovative
eBusinesses for our clients. Our methodology clarifies client expectations,
helps our clients achieve faster project delivery, reduces project delivery
risks and is cost effective.
. Provide an integrated services offering. Our integrated and collaborative
team delivers end-to-end strategic consulting, creative design, technology
integration, business transformation, research and analysis and marketing
and branding in a seamless package. Our research and analysis department,
Xceed Intelligence, provides industry-specific knowledge that helps our
clients obtain competitive advantages. We are able to build our clients'
eBusinesses "Front to Back and Inside Out." We first help our clients
integrate Internet strategies with their core business objectives through
use of our end-to-end strategic consulting, creative design, marketing and
technology capabilities (Front). We then integrate web-based applications
with the client's existing systems, using existing and emerging technologies
(Back). Finally, we apply e-commerce solutions and consulting, using our
industry and marketing expertise, to enhance existing business processes and
identify new business processes and opportunities created by the Internet
(Inside Out). We believe that by providing our clients with a full range of
professional services, we are able to meet their eBusiness needs on an
ongoing basis.
. Develop strong client relationships. We believe that building strong,
long-term relationships with our clients is an essential element of our
business. We work closely with our clients to understand, predict and
address their evolving business needs. Our strong, long-term relationships
allow us to more accurately meet our clients' objectives and expectations.
In many instances, we have been engaged by a client to work on multiple
projects. In addition, we often assist our clients in locating and
contracting with vendors and suppliers, identifying partners for strategic
alliances and joint ventures and identifying potential investors.
. Provide faster project delivery. Our client engagements are becoming
larger and more complex and need to be completed in shorter timeframes. We
have developed a library of industry-specific technology applications that
reduce time to market for deliverables. We believe this library gives us a
competitive advantage and lowers maintenance requirements and implementation
risk. Our applications library continues to grow as projects are completed,
and many of our technology applications can be used for more than one client
or for more than one engagement. In addition, our employees have developed a
broad base of knowledge and best practices through numerous service
engagements and from prior experience. We capture this broad range of
knowledge and best practices throughout our organization and disseminate the
information through training, orientation and a firm-wide database and
intranet. We leverage intellectual capital to systemize and accurately
predict project completion.
. Deliver robust and scalable technology. Our engineers provide application
development and systems integration services by employing proven and
emerging Internet technologies. We have relationships with leading software
and hardware vendors that often provide us with early access to their
training, product support and technology. These relationships help us add
value to our clients' businesses and operations. We are able to combine
third-party products with custom technology applications and components that
we have designed and developed, which allow us to create a specialized,
technical infrastructure for a client's particular needs. This technical
infrastructure is scalable and can be modified at a later date to adapt to a
change in the way the client conducts its business.
Strategy
<PAGE>
Our objective is to enhance our position as an Interactive Architect for
Fortune 1000, Global 2000 and other companies seeking to build eBusinesses. In
order to achieve this goal, we are pursuing the following strategies:
. Continue to build brand awareness and attract new clients. We plan to
continue to build our brand and identity, grow our sales efforts and expand
our skill set to acquire new clients seeking comprehensive Internet
professional solutions. We believe that brand and identity, together with
our full range of end-to-end service offerings and a proven, multi-
disciplinary methodology will be important factors for our future success.
We have been able to generate business based on word-of-mouth and our
reputation, and in order to further develop our brand and identity, we
believe that we will need to launch a branding campaign, which will be
funded through a portion of the proceeds of this offering.
. Develop additional business through our relationships with existing clients.
We seek to gain a comprehensive understanding of our clients and their
businesses and work closely with their senior managements to understand,
predict and address their strategic business needs. We often seek to
leverage our client relationships to expand the scope and length of current
projects and to enter into additional projects. We believe that our
reputation for providing innovative and sophisticated services allows us to
deepen relationships with existing clients, which has led to in an increase
in referrals for engagements with new clients. We also plan to develop more
applications and systems, such as pricing modules, that will allow us to
have greater contact with our clients once a specific project has been
completed.
. Attract, train, retain and motivate experienced professionals and maintain
creative leadership. Our growth and our ability to provide strategic
Internet professional services are based in large part on our abilities to
attract, train, retain and motivate experienced professionals and maintain
creative leadership. We actively expand our existing expertise by recruiting
senior professionals from major consulting firms, creative design firms and
information technology services firms as well as from other companies that
provide Internet professional services. We maintain an informal, team-driven
and results-oriented culture and provide incentives for our employees
through a competitive compensation plan, equity ownership and our stock
option plans. We provide training for our employees which is designed to
address the rapidly changing technological environment in which our
employees are engaged.
. Expand through strategic acquisitions. We believe that building a critical
mass of strategic, technical and creative talent and establishing a
multinational presence through both acquisitions and internal growth will
provide us with a substantial competitive advantage. We have grown rapidly
both organically and through the completion of 12 acquisitions since August
1998. We will continue to pursue strategic acquisitions to acquire expertise
in new core competencies and technologies, gain access to additional
talented professionals and enter into new geographic markets. We plan to
pursue strategic acquisitions of companies that can be assimilated into our
existing operations. To complement our existing operations in Atlanta,
Chicago, Colorado Springs, Dallas, Los Angeles, New York, Phoenix, San
Francisco, Amsterdam and London, we also plan to execute a global growth
strategy, initially focusing on Europe and Asia. We believe that reasonable
geographic proximity will enhance our prospects for servicing existing
customers and attracting future significant customers.
. Provide services in a broad range of industries. We believe that our broad
base of knowledge and expertise is scalable across a wide range of
industries. We are currently focusing on expanding our provision of services
to new industry segments as a result of acquisitions and additional hiring
of personnel. Our Xceed Intelligence research and analysis division, which
currently covers 13 industries, also provides us with a strong knowledge
base in a variety of market segments. We expect Xceed Intelligence to expand
its coverage to additional industries in the future to expand our Internet
professional services.
Engagement Methodology
Our branded engagement methodology is designed to carefully plan and implement
successful and innovative eBusinesses for our clients and is enhanced by our
depth of experience and expertise in strategic consulting, technology, creative
design and marketing. We believe our acquisition of methodfive in February 2000
has enhanced our branded engagement methodology, which consists of the following
steps:
<PAGE>
. Business requirements assessment. Typically, we begin an engagement by
gathering information, performing research and analysis and gaining a
comprehensive understanding of the project scope. This forms the foundation
for a series of client workshops, which are led by our strategic services
team. The workshops are customized to the client's needs and desired
outcomes and allow us to create a blueprint and program from which our
multidisciplinary teams can establish a successful Internet-related
initiative. Our clients are actively involved in this initial step. Upon
completion of the business requirements assessment process, we provide the
client with a strategic and tactical plan for its eBusiness.
. Specifications. Using the information gathered during the business
requirements assessment process and the blueprint and program created during
the client workshops, we develop detailed functional and technical
specifications that are designed to meet the client's business vision. By
creating specifications, we seek to ensure that all of the details related
to the creation of a web site are accounted for prior to beginning work on
the project. Our combination of technical and creative talent reduces the
overall risk associated with large-scale development efforts.
. Creative development and branding. Using state-of-the-art technologies and
ideas, our creative team extends or establishes the client's brand online,
while developing a user experience that meets the client's business
requirements and expectations. Through an interactive and collaborative
effort, we work with the client to refine a complete image while developing
plans to execute public relations, advertising and marketing needs.
. Functional prototype. Before full scale development takes place, we
produce a prototype that combines user specifications and an agreed-upon
image. The prototype allows the client to test the systems that we have
developed to ensure that all of its requirements and expectations have been
met.
. Application development and system integration. We develop, integrate and
test all of the necessary components, including third-party hardware,
software and custom applications for the final launch of the online effort.
During this stage, our developers and technologists seek to ensure that the
client's business requirements and expectations are fully aligned with the
technological infrastructure we have created.
Once the initial project has been completed, our methodology can be
periodically reapplied to maintain and refine the client's eBusiness.
We believe that our methodology clarifies client expectations, helps our
clients achieve faster time to market, reduces the risks associated with the
application and integration of emerging technologies, provides consistent
procedures for all engagement phases, provides a higher degree of project
organization, is cost effective and lowers implementation and technology
obsolescence risks.
Services
We provide a full range of Internet professional services that help our
clients capitalize on the reach and efficiency of the Internet. We believe we
offer our clients a single source for the services required to identify, design,
develop and deploy eBusiness solutions that complement or expand conventional
business processes, including:
. Strategic consulting. We work with our clients to develop and implement
eBusiness strategy and effect change management.
-- eBusiness strategy. We offer strategic advice designed by our business
and technical experts with industry-specific knowledge. We align client
strategic plans with the capabilities of the Internet and the dynamics of
the markets and industries in which they compete. We also help our
clients turn strategy into action, viewing strategy as the design of the
entire business system and an integrated set of actions to continuously
redefine competitive advantage.
-- Change management. We advise clients with respect to major business and
cultural changes by assessing current skills and resource requirements,
implementing organizational changes and associated measurement systems
and creating employee communications plans. Our change management
practice
<PAGE>
helps align our clients' organizational structures and processes with
their Internet strategies.
. Creative design. We have extensive experience in developing visual and
interactive content and creating electronic brand campaigns that enhance and
extend our clients' relationships with their customers. Our creative design
professionals assess and analyze our clients' existing brands, identify
opportunities and provide user-focused solutions that help our clients build
sustainable, long-term relationships with their customers. To keep up with
the increasing complexity of the creative solutions required, we have
developed expertise in editorial creation, content management, information
architecture, user-interface and rich-media technologies.
. Technology. Our technical professionals perform system integration and
systems administration services for our clients using industry software
products developed by vendors such as Broadvision, Open Market and Vignette,
as well as our proprietary applications. Using our extensive in-depth
knowledge of the Internet and emerging technologies, we translate strategic,
creative and business requirements into sophisticated and functional
technology platforms. Recognizing that technical infrastructure is the
foundation for clients' Internet solutions, we develop infrastructures
designed to be reliable, robust, secure and scalable. Our principal
technology services include the design, architecture and development of e-
commerce platforms, customer relationship management systems, sales
automation systems, electronic markets and exchanges, Internet and intranet
portals, as well as the implementation of enterprise middleware and the
integration of Internet solutions with legacy systems.
. Marketing and branding. Our marketing and branding team creates an
integrated plan for attracting audiences and building customer bases for the
eBusinesses we create. Our competencies in this area include brand creation
and positioning, corporate identity and product branding, advertising, media
placement, direct marketing and consumer and trade promotions.
. Intranet/extranet. Our intranet/extranet practice provides clients with
both enterprise-wide and functional/workgroup services and component
solutions. We help our clients improve their overall business practices by
developing intranets and extranets that can be used to increase sales,
improve communications and create or enhance business identities. Our
solutions in this area have included the creation of new distribution
channels, the repositioning of online brands and the integration of a
client's operations by opening and expanding lines of communication among
the client's employees, customers, distributors and vendors. The practice is
centered on our Enterprise Work Portal, which is a service that enables
companies to transform their first generation intranets into value-added
business tools.
. Research and analysis. We believe that deep, industry-specific knowledge
will separate Internet solutions providers in their attempts to build
successful eBusinesses. Our research and analysis group, Xceed Intelligence,
provides clients with customized, cutting-edge industry-specific research in
13 industries, such as apparel, finance, sports and entertainment. Our five
analysts, who have a collective 27 years of industry experience, produce
analyses which enhance our overall ability to provide clients with a clear
vision and strategy across multiple market segments. In addition to custom
research, Xceed Intelligence leverages its proven methodologies and data
pool to produce industry-wide "Intelligence Reports" which are sold to the
industry at large. Xceed Intelligence also produces a "Vertical View" e-mail
newsletter. Xceed Intelligence's analysts have been cited by numerous
publications, including Reuters, Bloomberg, The Associated Press, The Wall
Street Journal Interactive, Yahoo! Internet Life, Computer Shopper,
Billboard, Women's Wear Daily and Street & Smith's Sports Business Journal.
Client Case Studies
The following case studies are representative of the services we offer our
clients:
Warner Bros. Online (www.whatisthematrix.com)
"The Matrix," a science fiction/action movie starring Keanu Reeves and
Laurence Fishburne, was one of the top box office hits in the United States in
1999. Our multi-functional team worked closely with the film's development team
to create an interactive web site that featured cutting-edge design and comic
artwork and original
<PAGE>
content that related to major themes in the movie and presented a consistent
message with the film's other marketing programs. The site also incorporated
special hidden content, encouraging users to "hack" into the site, much as the
film's characters hack into The Matrix in the film. E-mail exchanges between
users helped them find the hidden content and were used to foster ongoing
relationships with fans.
The Matrix web site won a number of awards and accolades, including being
named Macromedia's site of the day and received top ratings from Entertainment
Weekly, MovieLink and the popular movie gossip site Ain't It Cool News.
Today, nearly a year after the film's debut, the web site continues to draw
substantial fan traffic. In addition to maintaining the web site, we continue to
implement modifications allowing the site to be utilized as a promotional
vehicle for the ongoing rollout of Matrix-related products.
Pitney Bowes
Pitney Bowes, a leading provider of informed mail management services to a
global clientele, sought to build a world-class intranet to enhance productivity
and communications and to promote shared accountability and operational self-
reliance among its employees.
Our mission was to provide a single point of entry for Pitney Bowes employees
to access relevant information, resources, tools and automatic transactions in
order to decrease processing time, eliminate errors and lower personnel costs.
We developed a total solution encompassing strategic planning, legacy database
integration, third party content acquisition and management and an internal
communications strategy designed to encourage employee participation and
satisfaction.
Specific work we have undertaken for Pitney Bowes includes:
. process analysis and re-design of their intranet;
. identification of best-of-class technologies;
. web architecture/interface design;
. legacy integration;
. third-party product integration;
. communications services; and
. change management strategy.
Using intranet technology, we have helped Pitney Bowes transform internal
communications and helped them meet the challenges of servicing their clients.
Our Performance Enhancement Business
Our performance enhancement business offers clients a full-service approach to
the establishment of custom designed performance enhancement programs. This
full-service approach involves identifying a client's business objectives and
budget parameters, and analyzing the demographics of participants to design an
effective program with an appropriate mix of awards. Through Maestro, our
trademarked Internet and intranet software, our performance enhancement business
professionals communicate the business objectives and contest rules to
participants and provide participants with rankings and feedback throughout the
duration of the program. Maestro enables us to monitor and evaluate the
performance of program participants, generate status reports for clients and
distribute awards to participants.
Our performance enhancement business professionals provide services to
numerous corporate customers in
<PAGE>
various industries such as pharmaceuticals, telecommunications, office
equipment, insurance and electronics. Our performance enhancement business
markets its services through direct contacts by its sales representatives with
corporate sales, marketing and human resource executives. Our performance
enhancement business has 48 employees with offices in Atlanta, Los Angeles and
New York.
We are currently exploring various strategic alternatives with respect to our
performance enhancement business, including the sale of all or part of this
business, as this business is not aligned with our current corporate focus.
Clients
We have provided Internet professional services for a variety of clients in
many industries. Because of the strategic and competitively sensitive nature of
the engagements we perform for many of our clients, we have agreed to keep some
clients' identities confidential. The following is a partial list of clients
that we believe is representative of our overall client base:
<TABLE>
<CAPTION>
Performance enhancement business Internet professional services
-------------------------------- -------------------------------
<S> <C>
. Candle . CBS
. Knoll Pharmaceutical . Cable and Wireless
. MCI . Chamberbiz
. Pfizer . HBO
. Ricoh . Nestle
</TABLE>
For the fiscal year ended August 31, 1999, our five largest clients accounted
for approximately 41% of our revenues, with Pfizer, Inc. accounting for
approximately 26% of our revenues.
Sales and Marketing
Our sales and marketing efforts are dedicated to strengthening our brand name
and enhancing our reputation as a leading provider of Internet professional
services. Our sales professionals operate through a coordinated and structured
process to evaluate and respond to large numbers of prospective clients and
opportunities, target qualified prospects and secure new engagements and joint
ventures. We target our sales efforts to multinational corporations, mid-to-
large-sized companies and startups and plan to target Fortune 1000, Global 2000
and other companies in the future.
Our sales efforts are supplemented by marketing and communications activities
that we pursue to further build our brand name and recognition in the
marketplace. We have public relations, investor relations and marketing groups
that also publish industry research and weekly and bi-weekly newsletters,
primarily through our Xceed Intelligence group. We seek to enhance the
visibility of our brand by attending and speaking at industry conferences and
business events, sponsoring trade shows and holding seminars which are designed
to promote our services and offerings.
Competition
Competition in the Internet professional services market is intense, and the
market is fragmented and evolving rapidly. We believe that competition will
become more focused as Internet professional services companies will grow
dramatically through organic and acquired growth.
Our current competitors include the following:
. sytems integrators that primarily engage in fixed time/fixed price
contracts, such as Sapient and Viant;
. large systems integrators, such as Andersen Consulting and the consulting
arms of the Big Five accounting firms;
<PAGE>
. web consulting firms and online agencies, such as Proxicom and Razorfish;
. advertising and new media companies, such as True North Communications and
Omnicom;
. the professional services groups of computer equipment companies, such as
IBM and Compaq;
. outsourcing firms, such as Computer Sciences Corporation and Electronic Data
Systems;
. general management consulting firms, such as Bain & Company and Booz Allen &
Hamilton; and
. internal IT departments of current and potential clients.
Because relatively low barriers to entry characterize our market, we also
expect other companies to enter our market. We believe that the principal
competitive factors in our industry are:
. the speed of development and implementation of eBusiness systems;
. the quality of services and deliverables;
. technical, strategic and industry expertise;
. project management capabilities;
. reputation and experience of professionals delivering the service;
. the effectiveness of sales and marketing efforts;
. brand recognition;
. size of firm; and
. value of the services provided compared to the price of such services.
Our performance enhancement business competes with numerous companies that
provide incentive or performance enhancement services. These companies include
Maritz, Inc., Carlson Marketing Group and BI Performance Services.
Intellectual Property Rights
We rely upon a combination of trade secrets, nondisclosure and other
contractual arrangements, and copyright and trademark laws, to protect our
proprietary rights. We enter into confidentiality agreements with our employees,
generally require that our consultants and clients enter into such agreements,
and limit access to and distribution of our proprietary information.
Our business involves the development of technology solutions for specific
client engagements. Ownership of these solutions is the subject of negotiation
and is frequently assigned to the client, although we may retain a license for
certain uses. Some clients have prohibited us from marketing the solutions
developed for them for specified periods of time or to specified third parties
and there can be no assurance that clients will not demand similar or other
restrictions in the future. Issues relating to the ownership of and rights to
use solutions can be complicated and there can be no assurance that disputes
will not arise that affect our ability to resell or reuse such solutions.
<PAGE>
Employees, Recruiting and Training
At August 31, 2000, we had 623 full time employees. We believe that we
maintain high employee retention rates as compared to the industry average by
paying competitive salaries, granting stock options and providing other
benefits.
We dedicate significant resources to our recruiting efforts. We believe a
strong human resources and recruiting division is necessary to expand our
current employee base and retain our high employee retention rates.
Our internal recruiting efforts primarily focus on supplying quality personnel
to each of our business units. In addition to the efforts of our in-house
recruiting group, we seek to meet our hiring needs through:
. referrals from our existing employees;
. technical and executive search firms;
. use of ITS, an online information tracking system which acts as a resume
repository and search engine and also is used to distribute and track job
requisitions;
. online resume databases such as Monster.com and ComputerJobs.com; and
. attendance at job fairs targeted to the specific talent we are seeking.
We provide a one-week intensive training program for our new employees which
is designed to educate them on our business strategy, the methodologies and
technical competencies that are required for successful project delivery and our
corporate culture. We also have formal, mandatory training for all of our
employees in their core competencies on an annual and semi-annual basis. Our
training programs utilize a comprehensive curriculum of courses that focus on
such areas as project analysis, project management, programming languages and
development skill sets. We strongly believe that comprehensive training is
necessary to ensure that all aspects of the project cycle are performed by our
employees in a uniform and consistent manner and that best practices are
effectively utilized.
Our employees are not represented by any union and, except for senior
management and certain other employees, are retained on an at-will basis. We
believe we have a good relationship with our employees.
Properties
We lease a variety of offices and facilities for our operations. Our principal
executive offices are currently located in the former Woolworth building at 233
Broadway, New York, New York 10279, where we maintain approximately 105,000
square feet under a lease that expires in 2010, with an option to renew for an
additional five years. We lease a total of approximately 200,000 square feet for
our 31 offices in Atlanta, Chicago, Colorado Springs, Dallas, Los Angeles, New
York, Phoenix, San Francisco, Amsterdam and London.
We believe that our properties are adequate for our current needs and that
additional space will be available as needed.
Legal Proceedings
We are involved in various lawsuits and claims incidental to our business. In
the opinion of management, the ultimate liabilities, if any, resulting from
these lawsuits and claims, will not materially affect our financial position or
results of operations.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed upon
for us by Akin, Gump, Strauss, Hauer & Feld, L.L.P.
<PAGE>
EXPERTS
The consolidated financial statements for the year ended August 31, 1999,
incorporated in this prospectus by reference from the company's annual report on
Form 10-K/A for the year ended August 31, 1999, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report (which report
expresses an unqualified opinion and includes an explanatory paragraph referring
to a restatement of the 1999 financial statements), which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
Our consolidated financial statements for the fiscal years ended August 31,
1998 and 1997, incorporated in this prospectus by reference to our annual report
on Form 10-K/A for the fiscal year ended August 31, 1999, have been audited by
Holtz Rubenstein & Co., LLP, independent auditors, as stated in their report,
which is incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3, of which this prospectus is a part, under the Securities
Act with respect to the shares of common stock offered hereby. This prospectus
does not contain all of the information included in the registration statement.
Statements contained in this prospectus concerning the provisions of any
document are not necessarily complete. You should refer to the copy of these
documents filed as an exhibit to the registration statement or otherwise filed
by us with the SEC for a more complete understanding of the matter involved.
Each statement concerning these documents is qualified in its entirety by such
reference.
We are also subject to the informational requirements of the Securities
Exchange Act of 1934. In accordance with the Exchange Act, we file reports,
proxy statements and other information with the SEC. The registration statement,
including the attached exhibits and schedules, may be inspected and copied at
the public reference facilities maintained by the SEC, Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission located at Seven World Trade Center, New York, New
York 10048, and 500 West Madison Street, Chicago, Illinois 60661. Please call
the SEC at 1-800-SEC-0330 for further information about the public reference
rooms. The SEC maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC. Copies of the registration statement and the reports, proxy and
information statements and other information that we file with the SEC may be
obtained from the SEC's Internet address at http://www.sec.gov.
The SEC allows us to "incorporate by reference" into the prospectus the
information we have filed with them. The information incorporated by reference
is an important part of this prospectus and the information that we file
subsequently with the SEC will automatically update this prospectus. The
information incorporated by reference is considered to be part of this
prospectus. We incorporate by reference the documents listed below and any
filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, after the initial filing of this
registration statement that contains this prospectus and prior to the time that
we sell all the securities offered by this prospectus:
. Our Annual Report on Form 10-K for the year ended August 31, 1999, filed
with the SEC on November 29, 1999, as amended by our report on Form 10-K/A,
filed with the SEC on April 11, 2000;
. Our Quarterly Report on Form 10-Q for the quarter ended November 30, 1999,
filed with the SEC on January 14, 2000, as amended by our report on Form
10-Q/A filed with the SEC on April 11, 2000;
. Our Quarterly Report on Form 10-Q for the quarter ended February 29, 2000,
filed with the SEC on April 14, 2000;
. Our Quarterly Report on Form 10-Q for the quarter ended May 31, 2000, filed
with the SEC on July 13, 2000;
<PAGE>
. Our Current Report on Form 8-K, filed with the SEC on January 20, 2000;
. Our Current Report on Form 8-K, filed with the SEC on January 28, 2000;
. Our Current Report on Form 8-K filed with the SEC on February 16, 2000, as
amended by our Current Report on Form 8-K/A, filed with the SEC on April 11,
2000;
. Our Current Report on Form 8-K filed with the SEC on April 5, 2000; and
. Our Current Report on Form 8-K filed with the SEC on August 10, 2000.
You may request a copy of these documents, which will be provided to you at no
cost, by contacting: Xceed Inc., 233 Broadway, New York, New York, 10279,
Attention: Investor Relations, (212) 553-2427.
<PAGE>
<TABLE>
<S> <C>
--------------------------------------------- ---------------------------------------------
You should rely only on the information
contained or incorporation by reference in
this prospectus. We have not authorized
anyone to provide you with different or
additional information. This prospectus is
not an offer to sell nor is it seeking an
offer to buy shares of our common stock in 32,108,787 Shares
any jurisdiction where the offer or sale is
not permitted. The information contained [XCEED LOGO]
or incorporated by reference in this
prospectus is correct as of the date of Common Stock
this prospectus, regardless of the time of
the delivery of this prospectus or any sale --------------
of our common stock. PROSPECTUS
_________________ --------------
TABLE OF CONTENTS
_________________
Page
----
Xceed Inc.................................... 1
Risk Factors................................. 3
Forward-Looking Statements................... 3
Selling Shareholders......................... 4
Plan of Distribution......................... 4
Use of Proceeds............................. 5
Our Business................................. 6
Legal Matters................................ 15
Experts...................................... 16
Where You Can Find More Information.......... 16
. , 2000
--------------------------------------------- ---------------------------------------------
</TABLE>
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution
We estimate that expenses in connection with the offering described in this
Registration Statement, other than underwriting discounts and commissions, will
be as follows:
Item Amount
------ --------
Registration fee ............................... $15,497
NASDAQ National Market listing fee ............. $ 0
Attorneys' fees and expenses ................... $ 7,000
Accountants' fees and expenses ................. $ 5,000
Printing and engraving ......................... $ 5,000
Registrar's fees and expenses .................. $ 0
Miscellaneous .................................. $ 0
-------
Total ....................................... $32,497
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits indemnification of
directors, officers, employees and agents of corporations for liabilities
arising under the Securities Act of 1933.
Our certificate of incorporation and bylaws provide for indemnification of the
registrant's directors and officers to the fullest extent permitted by Section
145 of the Delaware General Corporation Law.
Statutory Provisions
Section 102(b)(7) of the Delaware General Corporation Law enables a
corporation in its certificate of incorporation to eliminate or limit the
personal liability of members of its board of directors to the corporation or
its stockholders for monetary damages for violations of a director's fiduciary
duty of care. The provision would have no effect on the availability of
equitable remedies, such as an injunction or rescission, for breach of fiduciary
duty. In addition, no provision may eliminate or limit the liability of a
director for breaching his duty of loyalty, failing to act in good faith,
engaging in intentional misconduct or knowingly violating a law, paying an
unlawful dividend or approving an illegal stock repurchase, or obtaining an
improper personal benefit.
Section 145 of the Delaware General Corporation Law empowers a corporation to
indemnify any persons who was or is a party to or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with the
action, suit or proceeding 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, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. No indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the extent
that 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
indemnity for expenses which the court shall deem proper. Additionally, a
corporation is required to indemnify its directors and officers against expenses
to the extent that the directors or officers have been successful on the merits
or otherwise in any action, suit or proceeding or in defense of any claim, issue
or matter.
An indemnification can be made by the corporation only upon a determination
that indemnification is proper in the circumstances because the party seeking
indemnification has met the applicable standard of conduct as set forth in the
Delaware General Corporation Law. The indemnification provided by the Delaware
General Corporation Law shall not be deemed exclusive of any other rights to
which those seeking indemnification may be entitled under any
<PAGE>
bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
A corporation also has the power to purchase and maintain insurance on behalf of
any person, whether or not the corporation would have the power to indemnify him
against such liability. The indemnification provided by the Delaware General
Corporation Law 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 the heirs, executors and administrators
of the person.
Our Charter Provisions
Our certificate of incorporation limits the director's liability for monetary
damages to our company and its stockholders for breaches of fiduciary duty
except under the circumstances outlined in Section 102(b)(7) of the Delaware
General Corporation Law as described above under "Statutory Provisions."
To the extent indemnification for liabilities arising under the Securities Act
may be permitted for directors, officers or persons controlling us, we have been
advised that, in the opinion of the Securities and Exchange Commission,
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
Item 16. Exhibits and Financial Statement Schedules
Exhibit
----------
Number
----------
4(a) Form of Common Stock Purchase Warrant issued by Xceed Inc. to each
of Peconic Fund, Inc., Leonardo, L.P. and HFTP Investment, L.L.C. on
January 13, 2000 (1)
4(b) Form of Common Stock Purchase Warrant issued by Xceed Inc. to each
of Peconic Fund, Inc., Leonardo, L.P. and HFTP Investment, L.L.C. on
April 4, 2000 (2)
5(a) Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
10(a) Subscription Agreement dated January 13, 2000 by and among Xceed
Inc., Peconic Fund, Inc., Leonardo, L.P. and HFTP Investment, L.L.C.
(1)
10(b) Registration Rights Agreement dated January 13, 2000 by and among
Xceed Inc., Peconic Fund, Inc., Leonardo, L.P. and HFTP Investment,
L.L.C. (1)
10(c) Agreement dated April 4, 2000 by and among Xceed Inc., Peconic Fund,
Inc., Leonardo, L.P. and HFTP Investment, L.L.C. (2)
23(a) Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in
Exhibit 5(a))
23(b) Consent of Deloitte & Touche LLP
23(c) Consent of Holtz Rubenstein & Co., LLP
24(a) Power of Attorney (included on signature page of this Form S-3)
----------------
(1) Incorporated by reference from our Current Report on Form 8-K, dated January
17, 2000 and filed with the Commission on January 20, 2000.
<PAGE>
(2) Incorporated by reference from our Current Report on Form 8-K dated April 4,
2000 and filed with the Commission on April 5, 2000.
Item 17. Undertakings
We hereby undertake:
(a)(1) To file, during any period in which we offer or sell securities, a post-
effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement;
(iii) Include any additional or changed material information on the plan of
distribution.
(2) For determining liability under the Securities Act, treat each post-
effective amendment as a new registration statement of the securities offered,
and the offering of the securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(b) To supplement the prospectus, for purposes of determining any liability
under the Securities Act, each filing of our 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 the initial bona fide offering.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons to the
foregoing provisions, or otherwise, we have been advised that in the 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 us of
expenses incurred or paid by a director, officer or controlling person of Xceed
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, we will, unless in the opinion of our 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.
<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-3 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in New York,
New York on September 28, 2000.
XCEED INC.
By: /s/ Howard A. Tullman
------------------------------------------
Name: Howard A. Tullman
Title: Chief Executive Officer
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
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
---------------------------------------- ---------------------------------- -----------------------
<S> <C> <C>
/s/ Scott A. Mednick Co-Chairman September 28, 2000
---------------------------------
Scott A. Mednick
/s/ Howard A. Tullman
--------------------------------- Chief Executive Officer September 28, 2000
Howard A. Tullman (principal executive officer)
/s/ Werner G. Haase
--------------------------------- President and Co-Chairman September 28, 2000
Werner G. Haase
/s/ John A. Bermingham
--------------------------------- Director September 28, 2000
John A. Bermingham
/s/ Norman Docteroff
--------------------------------- Director September 28, 2000
Norman Docteroff
/s/ Terry A. Anderson
--------------------------------- Director September 28, 2000
Terry A. Anderson
/s/ Edward Bennett
--------------------------------- Director September 28, 2000
Edward Bennett
_________________________________ Director
Raymond Marcy
/s/ John P. Gandolfo
--------------------------------- Senior Vice President and Chief September 28, 2000
John P. Gandolfo Financial Officer (principal
financial and accounting
officer)
</TABLE>
