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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 10, 1999
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------------------------
GLOBAL DIGITAL INFORMATION, INC.
(Exact name of registrant as specified in its charter)
UTAH
(State or other jurisdiction of incorporation or organization)
91-1793053
(IRS Employer Identification Number)
455 WARDS CORNER ROAD
LOVELAND, OHIO, 45140
(Address of principal executive offices)
NEWELL D. CRANE, B.S., M.B.A., PH.D.
GLOBAL DIGITAL INFORMATION, INC.
455 WARDS CORNER ROAD
LOVELAND, OHIO, 45140
(Name and address of agent for service)
(513) 831-6647
(Telephone number, including area code of agent for service)
CONSULTING AGREEMENT
(Full title of the Plan)
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COPY TO:
Robert L. Sonfield, Jr.
Sonfield & Sonfield
770 South Post Oak Lane, Suite 435
Houston, Texas 77056-1913
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED SHARE (1) PRICE (1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 2,000,000 $.033 $66,000 $200.00
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rue 457 under the Securities Act of 1933.
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GLOBAL DIGITAL INFORMATION, INC.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-B
<TABLE>
<CAPTION>
FORM S-8 ITEM NUMBER AND CAPTION CAPTION IN PROSPECTUS
-------------------------------- ---------------------
<S> <C>
1. Forepart of Registration Statement and Outside Front Facing Page of Registration Statement and
Cover Page of Prospectus Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of Prospectus Inside Cover Page of Prospectus and Outside
Cover Page of Prospectus
3. Summary Information, Risk Factors and Ratio of Not Applicable
Earnings to Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Not Applicable
9. Description of Securities to be Registered Consulting Agreement
10. Interest of Named Experts and Counsel Not Applicable
11. Material Changes Not Applicable
12. Incorporation of Certain Information by Reference Information Incorporated by Reference
13. Disclosure of Commission Position on Indemnification
Indemnification for Securities Act Liabilities
</TABLE>
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PROSPECTUS
GLOBAL DIGITAL INFORMATION, INC.
2,000,000 Shares of Common Stock
($.001 Par Value)
This Prospectus is part of a Registration Statement which registers an
aggregate 2,000,000 shares of common stock, $.001 par value, common stock of
Global Digital Information, Inc. (the "Company") which may be issued as set
forth herein to the following named persons:
NAME NUMBER OF SHARES
---- ----------------
Byron James International ("BJI") 2,000,000 shares
On March 2, 1999, a Consulting Agreement was entered into with BJI
pursuant to a consulting agreement (the "Consulting Agreement"). The Company has
been advised by BJI that it may sell all or a portion of its shares of common
stock from time to time through securities brokers/dealers only at current
market prices and that no commissions or compensation will be paid in connection
therewith in excess of customary brokers commissions. BJI and the brokers and
dealers through whom sales of the shares are made may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended,
(the "Securities Act"), and any profits realized by them on the sale of the
shares may be considered to be underwriting compensation.
No other person is authorized to give any information or make any
representation not contained or incorporated by reference in this Prospectus, in
connection with the offer contained in this Prospectus, and, if given or made,
such other information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the date hereof.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
================================================================================
This Prospectus does not constitute an offer to sell or the
solicitation of any offer to buy any security other than the securities covered
by this Prospectus, nor does it constitute an offer or solicitation by anyone in
any jurisdiction in which such offer or solicitation is not authorized, or in
which the person making such offer or solicitation is not qualified to do so, or
to any person to whom it is unlawful to make such offer or solicitation.
THE DATE OF THIS PROSPECTUS IS MARCH 10, 1999.
<PAGE> 4
TABLE OF CONTENTS
AVAILABLE INFORMATION.........................................................1
INFORMATION INCORPORATED BY REFERENCE.........................................1
THE COMPANY...................................................................2
CONSULTING AGREEMENT..........................................................3
Restrictions Under Securities Laws............................................3
DESCRIPTION OF CAPITAL STOCK..................................................3
Common Stock..................................................................3
Registrar and Transfer........................................................4
Dissenters'Rights.............................................................4
Preferred Stock...............................................................4
LEGAL MATTERS.................................................................4
EXPERTS.......................................................................4
STATEMENT OF INDEMNIFICATION..................................................4
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AVAILABLE INFORMATION
Global Digital Information, Inc. (the "Company") is subject to the
requirement to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, files
reports and other materials with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other materials filed by the
Company can be inspected and copied (at prescribed rates) at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of all or any part of such material may be
obtained from the Commission upon payment of fees prescribed by the Commission.
The Commission maintains a web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The address of such web site is http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), with respect to an aggregate of 2,000,000 shares of the
Company's Common Stock, which will be issued to BJI Communications, Inc. ("BJI")
as consultant of the Company pursuant to written consulting agreement. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain portions of which have been omitted as permitted by the rules
and regulations of the Commission. For further information with respect to the
Company and the shares of the Common Stock offered by this Prospectus, reference
is made to the Registration Statement, including the exhibits thereto.
Statements in this Prospectus as to any document are not necessarily complete,
and where any such document is an exhibit to the Registration Statement or is
incorporated by reference herein, each such statement is qualified in all
respects by the provisions of such exhibit or other document, to which reference
is hereby made, for a full statement of the provisions thereof. A copy of the
Registration Statement, with exhibits, may be obtained from the Commission's
office in Washington, D.C. (at the above address) upon payment of the fees
prescribed by the rules and regulations of the Commission, or examined there
without charges.
INFORMATION INCORPORATED BY REFERENCE
The Company filed an amendment to the Annual Report on Form 10-K on
September 10, 1998. The Company's Form 8-K, Item 5, Other Events, filed October
1, 1998. The Company filed an amendment to the Form 10-Q on October 16, 1998.
The Company's Quarterly Report on Form 10-Q dated November 24, 1998 for the
quarter ended September 30, 1998. The Company's Quarterly Report on Form 10-Q
dated March 5, 1999 for the quarter ended December 31, 1998. The above
referenced reports, which were previously filed with the Commission are
incorporated herein by reference.
All documents filed by the Company pursuant to Section 13, 14 or 15 (d)
of the Exchange Act after the date hereof and 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 herein and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THE COMPANY HEREBY UNDERTAKES TO FURNISH WITHOUT CHARGE TO EACH PERSON
TO WHOM THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS DESCRIBED ABOVE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS. REQUESTS SHOULD BE ADDRESSED TO MR. NEWELL D. CRANE,
B.S., M.B.A., PH.D., PRESIDENT, GLOBAL DIGITAL INFORMATION, INC., 455 WARDS
CORNER ROAD, LOVELAND, OHIO, 45140, TELEPHONE NUMBER (513) 831-6647.
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THE COMPANY
Global Digital Information, Inc. (the "Company") is a Utah Corporation.
Prior to October 31, 1997, the Company was a Washington corporation with offices
located in Bellevue and Tacoma, Washington. On October 31, 1997, the Company
merged in a reverse merger transaction into a publicly held company by the name
of US Mining Company, Inc., a Washington corporation. Upon closing this
transaction on November 15, 1997, US Mining Company, Inc. changed its name to
Global Digital Information, Inc. The Board of Directors of US Mining (now The
Company) resigned, and the shareholders elected the current Board of Directors
of the Company. The current officers of the Company were reappointed by the
Board of Directors.
The Company designs, develops, markets and supports medical document
management systems and personal productivity software which facilitates the
recording, imaging, manipulation, distribution and storage of paper-based
medical information on personal and network computers using Microsoft Windows
and Windows NT operating systems.
In September, 1997, the Company released its flagship product "CaduSys
Medical Record" at the annual Microsoft Healthcare Users Group (MS-HUG)
convention in Las Vegas. The market's immediate and enthusiastic reception of
"CaduSys" has been gratifying. "CaduSys Medical Record" ("CMR") is a state
- -of-the-art electronic patient record that seamlessly interfaces with existing
medical billing software allowing today's healthcare professional instant
multi-user access to "realtime refreshed" outcome-based patient data. The "CMR"
product is redefining the standard for open architecture, user friendly,
customizable software for electronic patient data in our portion of the $300
billion marketplace for medical information technology. "CaduSys Medical Record"
is a 32-bit, client/server clinical information software package that collects
and stores patient data during the creation of the clinical narrative. The
CaduSys product offers improved quality of care, instant access to patient
charts, reduced information costs, increased revenues, instant outcomes, instant
connectivity, flexibility and ease of use, as well as specific clinical and
medical/legal benefits. "CMR" is sold to health care organizations including,
but not limited to, single and multi-doctor practices, clinics, health care
organizations and small hospitals. The primary target markets are medium to
large medical clinics, Independent Provider Associations, Preferred Provider
Organizations and Health Maintenance Organizations. Annual client savings in
excess of one-half million dollars per installation are attainable in these
target accounts. "CaduSys Medical Record" has been endorsed by Grant Thornton
Management Advisors and, in an unrelated transaction, the company has just
contracted with HealthSouth for the installation of the "CaduSys" product. The
Company has commenced negotiations with Bowne Financial Publishers for the
global rollout of the "CMR" product.
The Company also manufacturers and markets "FILEsaver", an insightfully
designed paper-based filing system for hard copy information storage and
retrieval combined with electronic file back up (the emerging half-step into
true paperless filing). As an integral part of the "FILEsaver" marketing plan,
the Company is negotiating to enter into a strategic partnership with Smead
Manufacturing in Hastings, Minnesota, the leading US supplier of office filing
products.
Additionally, the Company has begun seminal stage research on the
creation of a second office productivity tool for medical document management.
"CaduSys Digital Office" will be a paper free electronic file system that allows
medical practitioners to record, scan, store, sort, retrieve and manage
documents and files in Microsoft "Windows" operating systems. "CaduSys Digital
Office" will offer an easy-to-use, fast and effective solution for document
input and management at the desktop, while reducing dependence on paper-based
filing.
The Company's products use peripherals and applications commonly found
on personal and network computers that transform the PC into a personal and
network paper-free office management and productivity software system for large
or small office or home office ("SOHO") medical professionals. Through the use
of multimedia databases, the Company's applications convert paper documents to
digital information for electronic filing, faxing, editing scanning, printing,
sending and retrieving of paper-based documents by electronic mail. All of the
Company's applications employ scanning and image compression engines that
convert scanned or faxed documents and images to editable text compatible with
most word processors and desktop publishers.
The Company's Common Stock trades on the OTC Bulletin Board under the
symbol GDII.
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The Company's address is one Energy Square, 455 Wards Corner Road,
Loveland, Ohio, 45140. Its telephone number is (513) 831-6647. Its fax number is
(513) 831-5633.
CONSULTING AGREEMENT
On March 2, 1999 the Company entered into a Consulting Agreement with
BJI pursuant to which the Company agreed to issue 2,000,000 shares of Common
Stock of the Company. Under the terms of the Consulting Agreement, BJI will
provide (i) advice to the Board, from time to time as it may request, on matters
relating to a merger, and (ii) prepare and deliver to the Board a valuation, a
fairness opinion, participate in negotiations pertaining to the consideration to
be offered to the holders of the Common Stock in connection with the Offer and
such other advice to the Board directly related to the financial advisory
services described above as may reasonably be requested by the Board. The term
of the Consulting Agreement began on March 2, 1999 and will end on June 15, 1999
unless sooner terminated as provided therein.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of any shares of Common Stock acquired under the Consulting
Agreement must be made in compliance with federal and state securities laws.
Officers, directors and 10% or greater stockholders of the Company, as well as
certain other persons or parties who may be deemed to be "affiliates" of the
Company under the Federal Securities Laws, should be aware that resales by
affiliates can only be made pursuant to an effective Registration Statement,
Rule 144 or any other applicable exemption. Officers, directors and 10% and
greater stockholders are also subject to the "short swing" profit rule of
Section 16(b) of the Securities Exchange Act of 1934. Section 16(b) of the
Exchange Act generally provides that if an officer, director or 10% and greater
stockholder sold any Common Stock of the Company acquired pursuant to the
exercise of a stock option, he would generally be required to pay any "profits"
resulting from the sale of the stock and receipt of the stock option. The
foregoing is not intended to be a complete statement of applicable law and BJI
should rely on its own legal counsel with respect thereto.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 20 million shares of Common Stock,
$0.001 par value, and 5 million shares of Preferred Stock. The presently
outstanding shares of Common Stock are fully paid and nonassessable.
There are no shares of Preferred Stock issued and outstanding.
COMMON STOCK
As of December 31, 1998, approximately 10,778,394 shares of Common
Stock were outstanding.
Voting Rights. Holders of shares of Common Stock are entitled to one
vote per share on all matters submitted to a vote of the shareholders. Shares of
Common Stock do not have cumulative voting rights; accordingly, the holders of a
majority of the shareholder votes eligible to vote and voting for the election
of the Board of Directors can elect all members of the Board of Directors.
Dividend Rights. Holders of record of shares of Common Stock are
entitled to receive dividends when and if declared by the Board of Directors out
of funds of the Company legally available therefor.
Liquidation Rights. Upon any liquidation, dissolution or winding up of
the Company, holders of shares of Common Stock are entitled to receive pro rata
all of the assets of the Company available for distribution to shareholders
after distributions are made to the holders of the Company's Preferred Stock.
Preemptive Rights. Holders of Common Stock do not have any preemptive
rights to subscribe for or to purchase any stock, obligations or other
securities of the Company.
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REGISTRAR AND TRANSFER AGENT
The Company's registrar and transfer agent is AST, 1825 Lawrence
Street, Suite 444, Denver, Colorado 80202 and their telephone number is (303)
234-5300.
DISSENTERS' RIGHTS
Under current Utah law, a shareholder is afforded dissenters' rights
which, if properly exercised, may require the Company to purchase his shares
dissenters' rights commonly arise in extraordinary transactions such as mergers,
consolidations, reorganizations, substantial asset sales, liquidating
distributions, and certain amendments to the Company's certificate of
incorporation.
PREFERRED STOCK
The Company is also authorized to issue 5 million shares of Preferred
Stock. The Preferred Stock or any series thereof shall have such designations,
preferences and relative, participating, optional or special rights and
qualifications, limitations or restrictions thereof as shall be expressed in the
resolution or resolutions providing for the issue of such stock adopted by the
board of directors and may be made dependent upon facts ascertainable outside
such resolution or resolutions of the board of directors, provided that the
manner in which such facts shall operate upon such designations, preferences,
rights and qualifications, limitations or restrictions of such class or series
of stock is clearly and expressly set forth in the resolution or resolutions
providing for the issuance of such stock by the board of directors.
LEGAL MATTERS
Certain legal matters in connection with the securities offered hereby
are being passed upon for the Company by Sonfield & Sonfield, Houston, Texas,
counsel to the Company.
EXPERTS
The balance sheet, statement of shareholders' equity, statement of cash
flows (for the nine months ended December 31, 1998), statement of earnings
(deficit) and retained deficit (for the three months ended December 31, 1998),
statement of cash flows (for the three months ended December 31, 1998) as of
December 31, 1998 have been incorporated by reference herein in reliance on the
report of Mr. Thomas J. Harris, independent accountant, given on the authority
of Mr. Harris as an expert in accounting and auditing.
STATEMENT OF INDEMNIFICATION
Pursuant to Sections 16-10A-901 thru 16-10A-909 of the Utah Code and
Constitution, the Company has the power to indemnify any person made a party to
any lawsuit by reason of being a director or officer of the Company, or 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
actions 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable.
4
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The documents listed in (a) through (c) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), 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 the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) Amendment to the Annual Report on Form 10-K on September
10, 1998. The Company's Form 8-K, Item 5, Other Events, filed October
1, 1998. The Company filed an amendment to the Form 10-Q on October 16,
1998. The Company's Quarterly Report on Form 10-Q dated November 24,
1998 for the quarter ended September 30, 1998. The Company's Quarterly
Report on Form 10-Q dated March 5, 1999 for the quarter ended December
31, 1998. The above referenced reports, which were previously filed
with the Commission are incorporated herein by reference.
(b) All other reports filed pursuant to Section 13 or 15(d) of
the Exchange Act since the end of the fiscal year covered by the
Registrant's Form 10-K referred to in (a) above.
Item 5: Interests of Named Experts and Counsel.
None
Item 6: Indemnification of Directors and Officers.
(a) Sections 16-10A-901 thru 16-10A-909 of the Utah Code and
Constitution provides that:
Sections 16-10A-901 THRU 16-10A-909. INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS; INSURANCE
Section 16-10A-901
(1) "Corporation" includes any domestic or foreign entity that is a
predecessor of a corporation by reason of a merger or other transaction in which
the predecessor's existence ceased upon consummation of the transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee, fiduciary, or agent of another domestic or foreign corporation or
other person or of an employee benefit plan. A director is considered to be
serving an employee benefit plan at the corporation's request if his duties to
the corporation also impose duties on, or otherwise involve services by, him to
the plan or to participants in or beneficiaries of the plan. "Director"
includes, unless the context requires otherwise, the estate or personal
representative of a director.
(3) "Expenses" include counsel fees.
(4) "Liability" means the obligation incurred with respect to a
proceeding to pay a judgment, settlement, penalty, fine (including an excise tax
assessed with respect to an employee benefit plan), or reasonable expenses.
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(5) "Officer," "employee," "fiduciary," and "agent" include any person
who, while serving the indicated relationship to the corporation, is or was
serving at the corporation's request as a director, officer, partner, trustee,
employee, fiduciary, or agent of another domestic or foreign corporation or
other person or of an employee benefit plan. An officer, employee, fiduciary, or
agent is considered to be serving an employee benefit plan at the corporation's
request if that person's duties to the corporation also impose duties on, or
otherwise involve services by, that person to the plan or participants in, or
beneficiaries of the plan. Unless the context requires otherwise, such terms
include the estates or personal representatives of such persons.
(6) (a) "Official capacity" means:
(i) when used with respect to a director, the office of
director in a corporation; and
(ii) when used with respect to a person other than a director,
as contemplated in Section 16-10a-907, the office in a corporation held
by the officer or the employment, fiduciary, or agency relationship
undertaken by him on behalf of the corporation.
(b) "Official capacity" does not include service for any other
foreign or domestic corporation, other person, or employee benefit plan.
(7) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(8) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
and whether formal or informal.
Section 16-10A-902
(1) Except as provided in Subsection (4), a corporation may indemnify
an individual made a party to a proceeding because he is or was a director,
against liability incurred in the proceeding if:
(a) his conduct was in good faith; and
(b) he reasonably believed that his conduct was in, or not
opposed to, the corporation's best interests; and
(c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(2) A director's conduct with respect to any employee benefit plan for
a purpose he reasonably believed to be in or not opposed to the interests of the
participants in and beneficiaries of the plan is conduct that satisfies the
requirement of Subsection (1)(b).
(3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.
(4) A corporation may not indemnify a director under this section: (a)
in connection with a proceeding by or in the right of the corporation in which
the director was adjudged liable to the corporation; or (b) in connection with
any other proceeding charging that the director derived an improper personal
benefit, whether or not involving action in his official capacity, in which
proceeding he was adjudged liable on the basis that he derived an improper
personal benefit.
(5) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to reasonable
expenses incurred in connection with the proceeding.
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Section 16-10A-903
Unless limited by its articles of incorporation, a corporation shall
indemnify a director who was successful, on the merits or otherwise, in the
defense of any proceeding, or in the defense of any claim, issue, or matter in
the proceeding, to which he was a party because he is or was a director of the
corporation, against reasonable expenses incurred by him in connection with the
proceeding or claim with respect to which he has been successful.
Section 16-10A-904
(1) A corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance of final
disposition of the proceeding if:
(a) the director furnishes the corporation a written
affirmation of his good faith belief that he has met the applicable
standard of conduct described in Section 16-10a-902;
(b) the director furnishes to the corporation a written
undertaking, executed personally or on his behalf, to repay the advance
if it is ultimately determined that he did not meet the standard of
conduct; and
(c) a determination is made that the facts then known to those
making the determination would not preclude indemnification under this
part.
(2) The undertaking required by Subsection (1)(b) must be an unlimited
general obligation of the director but need not be secured and may be accepted
without reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this section
shall be made in the manner specified in Section 16-10a-906.
Section 16-10A-905
Unless a corporation's articles of incorporation provide otherwise, a
director of the corporation who is or was a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another court of
competent jurisdiction. On receipt of an application, the court, after giving
any notice the court considers necessary, may order indemnification in the
following manner:
(1) if the court determines that the director is entitled to
mandatory indemnification under Section 16-10a-903, the court shall
order indemnification, in which case the court shall also order the
corporation to pay the director's reasonable expenses incurred to
obtain court-ordered indemnification; and
(2) if the court determines that the director is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the director met the applicable standard
of conduct set forth in Section 16-10a-902 or was adjudged liable as
described in Subsection 16-10a-902(4), the court may order
indemnification as the court determines to be proper, except that the
indemnification with respect to any proceeding in which liability has
been adjudged in the circumstances described in Subsection
16-10a-902(4) is limited to reasonable expenses incurred.
Section 16-10A-906
(1) A corporation may not indemnify a director under Section 16-10a-902
unless authorized and a determination has been made in the specific case that
indemnification of the director is permissible in the circumstances because the
director has met the applicable standard of conduct set forth in Section
16-10a-902. A corporation may not advance expenses to a director under Section
16-10a-904 unless authorized in the specific case after the written affirmation
and undertaking required by Subsections 16-10a-904(1)(a) and (b) are received
and the determination required by Subsection 16-10a-904(1)(c) has been made.
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(2) The determinations required by Subsection (1) shall be made:
(a) by the board of directors by a majority vote of those
present at a meeting at which a quorum is present, and only those
directors not parties to the proceeding shall be counted in satisfying
the quorum; or
(b) if a quorum cannot be obtained as contemplated in
Subsection (2)(a), by a majority vote of a committee of the board of
directors designated by the board of directors, which committee shall
consist of two or more directors not parties to the proceeding, except
that directors who are parties to the proceeding may participate in the
designation of directors for the committee;
(c) by special legal counsel:
(i) selected by the board of directors or its
committee in the manner prescribed in Subsection (a) or (b);
or
(ii) if a quorum of the board of directors cannot be
obtained under Subsection (a) and a committee cannot be
designated under Subsection (b), selected by a majority vote
of the full board of directors, in which selection directors
who are parties to the proceeding may participate; or
(d) by the shareholders, by a majority of the votes entitled
to be cast by holders of qualified shares present in person or by proxy
at a meeting.
(3) A majority of the votes entitled to be cast by the holders of all
qualified shares constitutes a quorum for purposes of action that complies with
this section. Shareholders' action that otherwise complies with this section is
not affected by the presence of holders, or the voting, of shares that are not
qualified shares.
(4) Unless authorization is required by the bylaws, authorization of
indemnification and advance of expenses shall be made in the same manner as the
determination that indemnification or advance of expenses is permissible.
However, if the determination that indemnification or advance of expenses is
permissible is made by special legal counsel, authorization of indemnification
and advance of expenses shall be made by a body entitled under Subsection (2)(c)
to select legal counsel.
Section 16-10A-907
Unless a corporation's articles of incorporation provide otherwise:
(1) an officer of the corporation is entitled to mandatory
indemnification under Section 16-10a-903, and is entitled to apply for
court-ordered indemnification under Section 16-10a-905, in each case to
the same extent as a director;
(2) the corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent of the corporation to the same
extent as to a director; and
(3) a corporation may also indemnify and advance expenses to
an officer, employee, fiduciary, or agent who is not a director to a
greater extent, if not inconsistent with public policy, and if provided
for by its articles of incorporation, bylaws, general or specific
action of its board of directors, or contract.
Section 16-10A-908
A corporation may purchase and maintain liability insurance on behalf
of a person who is or was a director, officer, employee, fiduciary, or agent of
the corporation, or who, while serving as a director, officer, employee,
fiduciary, or agent of the corporation, is or was serving at the request of the
corporation as a director, officer,
8
<PAGE> 13
partner, trustee, employee, fiduciary, or agent of another foreign or domestic
corporation or other person, or of an employee benefit plan, against liability
asserted against or incurred by him in that capacity or arising from his status
as a director, officer, employee, fiduciary, or agent, whether or not the
corporation would have power to indemnify him against the same liability under
Section 16-10a-902, 16-10a-903, or 16-10a-907. Insurance may be procured from
any insurance company designated by the board of directors, whether the
insurance company is formed under the laws of this state or any other
jurisdiction of the United States or elsewhere, including any insurance company
in which the corporation has an equity or any other interest through stock
ownership or otherwise.
Section 16-10A-909
(1) A provision treating a corporation's indemnification of, or advance
for expenses to, directors that is contained in its articles of incorporation or
bylaws, in a resolution of its shareholders or board of directors, or in a
contract (except an insurance policy) or otherwise, is valid only if and to the
extent the provision is not inconsistent with this part. If the articles of
incorporation limit indemnification or advance of expenses, indemnification and
advance of expenses are valid only to the extent not inconsistent with the
articles of incorporation.
(2) This part does not limit a corporation's power to pay or reimburse
expenses incurred by a director in connection with the director's appearance as
a witness in a proceeding at a time when the director has not been made a named
defendant or respondent to the proceeding.
(b) Section 16-7-3 of the Utah Code and Constitution provides that:
Section 16-7-3. CONTENTS OF ARTICLES OF INCORPORATION
The articles of incorporation shall specify:
(1) The name of the corporation by which it shall be known.
(2) The object of the corporation.
(3) The estimated value of the property at the time of the
making of articles of incorporation.
(4) The title of the person making such articles.
(c) Article Eight of Registrant's Articles of Incorporation provides:
No director of this corporation shall be liable to the
corporation for monetary damages for an act or omission occurring in
the director's capacity as a director, except to the extent the
statutes of the State of Utah expressly provided that the director's
liability may not be eliminated or limited. Any repeal or amendment of
this paragraph that increases the liability of a director shall be
prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the corporation existing at the
time of such repeal or amendments.
Item 8: Exhibits
The following documents are filed as Exhibits to this Registration
Statement:
4 -- Consulting Agreement with Byron James International.
5 -- Opinion of Sonfield & Sonfield as to the validity of
the shares being registered.
24.1 -- Consent of Sonfield & Sonfield (included in Exhibit 5)
24.2 -- Consent of Thomas J. Harris, Independent Accountants
9
<PAGE> 14
25 -- Power of Attorney (following signature page of
Registration Statement)
Item 9: Undertakings
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement
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.
(b) That, for the purpose of determining any liability under
the Securities Act of 1933, 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.
(c) 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.
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<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8, and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Loveland, State of Ohio, on the ____ day of
March, 1999.
GLOBAL DIGITAL INFORMATION, INC. GLOBAL DIGITAL INFORMATION, INC.
By: /s/ Newell D. Crane By: /s/ Edward M. Sachsendorfer
---------------------------------------- ------------------------------
Newell D. Crane, B.S., M.B.A., Ph.D., Edward M. Sachsendorfer, B.A.,
President and Chief Executive Officer M.B.A., C.F.P., C.P.A.,
P.F.S., Treasurer, Chief
Financial Officer and
Principal Accounting Officer
EXHIBIT 25
POWER OF ATTORNEY
Each of the undersigned hereby authorizes Newell D. Crane, B.S.,
M.B.A., Ph.D. as his attorney-in-fact to execute in the name of such person and
to file such amendments (including post-effective amendments) to this
Registration Statement as the Registrant deems appropriate and appoints such
person as attorney-in-fact to sign on his behalf individually and in each
capacity stated below and to file all amendments, exhibits, supplements,
post-effective amendments and acceleration requests to this Registration
Statement.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE CAPACITY DATE
/s/ Newell D. Crane Director March ___, 1999
- ------------------------------------
Newell D. Crane, B.S., M.B.A., Ph.D.
/s/ William Perry Director March ___, 1999
- ------------------------------------
William Perry, B.A., M.S., Ph.D.
/s/ Morris Gorelick Director March ___, 1999
- ------------------------------------
Morris Gorelick
/s/ Dave Leytze Director March ___, 1999
- ------------------------------------
Dave Leytze, B.A., M.B.A.
/s/ David Muenier Director March ___, 1999
- ------------------------------------
David Meunier
11
<PAGE> 1
EXHIBIT 4
GLOBAL DIGITAL INFORMATION, INC.
455 WARDS CORNER ROAD ~ LOVELAND, OHIO 45140 ~ 513-831-6647 ~ FAX 513-831-5633
Mr. James Pugh
Byron James International
1333 West Guadelupe Road
Suite 521
Gilbert, AZ 85233
Dear Mr. Pugh,
The purpose of this letter is to confirm Byron James International
("Advisor") the appointment by the Board of Directors of Global Digital
Information, Inc.("GDI"), for your company to act as financial advisor to
GDI in connection with a merger proposal to Masterpiece Medical, Inc. We
also confirm our understanding and agreement that the Advisor is being
retained hereunder by and solely for the benefit of the Board of GDI and
not by any third parties, including the Company's shareholders. In
connection with our engagement as the Company's advisor as related to the
merger proposal, the Advisor will provide the following services:
(a) will provide advice to the Board, from time to time as it may
request, on matters relating to the merger;
(b) if requested by the Board, Advisor will prepare and deliver to the
Board the following documents (collectively, the "Opinions"):
(i) a formal valuation (the "Valuation") of the Common Shares and,
if requested by the Board, a valuation of any non-cash
consideration to being offered or forming part of the
consideration for the Common Shares, a summary (in such form as is
reasonably satisfactory to us) and/or the full text of which may
be included in the Proxy Circular ;
(ii) an opinion (the "Fairness Opinion") as to the fairness from a
financial point of view of the Offer to the minority shareholders
of the Company, a summary (in such form as is reasonably
satisfactory to us) and/or the full text of which may be included
in the Proxy Circular ;
(iii) if requested by the Board, we will participate in
negotiations pertaining to the consideration to be offered to the
holders of the Common Shares in connection with the Offer; and
(iv) we will provide such other advice to the Board directly
related to the financial advisory services described above as may
reasonably be requested by the Board.
1. The Opinions will be prepared in accordance with the professional
judgment of the Advisor and will comply with applicable securities law
requirements. The Advisor and its counsel will discuss with the Board and
its counsel policy requirements before delivering the Opinions. Any advice
or opinions (including the Opinions) to be provided by us hereunder will be
made subject to and will be based upon such limitations, qualifications and
reservations as the Advisor, in its judgment, deems necessary or prudent in
the circumstances.
12
<PAGE> 2
2. None of the Opinions or any of our other oral or written opinions or
advice, (including the contents of any materials provided by the Advisor
and any oral or written presentation to the Board made by the Advisor) in
connection with this engagement is to be used, reproduced, published or
distributed in whole or in part to any third party without the prior
written consent of the Advisor (except as required by applicable securities
law requirements and then only after consultation with the Advisor). Such
consent will extend only to the disclosure of the specific Opinion in the
particular circular or other document described in the consent, and will
not extend to any subsequent disclosure in any other circular or amendment
to such circular. Any document prepared by or on behalf of the Board will
be in form and substance satisfactory to the Advisor and its counsel and
will be provided to the Advisor and its counsel for review for a reasonable
period prior to filing.
3. You and the Board further acknowledge that you and the Board,
respectively, will use your best efforts to ensure that all information
concerning the Company and the Offer will be provided to us, directly or
indirectly, orally or in writing, by you, the Board and your or their
respective agents and advisors in connection with the Opinions will be
accurate and complete in all material respects and will not be misleading
in any material respect.
4. In connection with the performance of financial advisory services
hereunder, Advisor and each of their directors, officers, employees and
agents (collectively, the "Personnel") will keep confidential and will use
only for the purpose of performing the services described herein all
information, whether written or oral, acquired from the Board and the
Company in connection with our work hereunder, except: (iv) information
which was available to the public prior to the engagement or which
thereafter becomes available to the public other than through a breach by
parties of obligations hereunder; (v) information which was known to
Advisor prior to the engagement; and (vi) information which Advisor is
required to disclose by law (including applicable securities law
requirements) or in connection with legal process or legal or regulatory
proceedings. Advisors obligation under this section will survive the
completion of this engagement.
5. The Company will provide to Advosor current drafts and final copies, as
soon as they become available, of all disclosure documents (including the
Proxy Circular) filed or to be filed by or on behalf of the Company with
any court, securities commission or stock exchange in connection with the
Offer. However, the Advisor will have no responsibility for the form or
content of the Proxy Circular, other than with respect to the Opinions or
summaries thereof, and the description of our services undertaken pursuant
to the terms of this engagement letter. Advisor will be entitled at any
time to withdraw, amend or supplement the Opinions in the event that
Advisor reasonably concludes that there has been a material change in the
factors upon which such Opinions are based and that, accordingly, there has
been a material change in the Fairness Opinion or the Valuation following
the dates thereof and prior to the completion of the Offer.
6. In consideration for our services hereunder, the Company will pay the
Advisor Two Million Shares (2,000,000) of GDI stock.
7. The Company agrees to indemnify and hold the Advisor and each and every
one of the Personnel (each, an "Indemnified Party" and, collectively, the
"Indemnified Parties"), to the fully extent permitted by law, harmless from
and against any and all losses, claims, actions, suits, proceedings,
damages, liabilities or expenses of whatsoever nature or kind
(collectively, "Losses"), to which an Indemnified Party may become subject
by reason of the performance of professional services rendered hereunder.
8. If Advisor is requested to perform services in addition to those
described above, the terms and conditions relating to such services will be
outlined in a separate letter agreement and the fees for such services will
be negotiated separated and in good faith and will be consistent with fees
paid for similar services.
9. The term of this agreement will be for a period beginning as of the date
of your acceptance of this Agreement and ending on June 15, 1999.
10. This Agreement will be governed by and construed in accordance with the
laws of the State of Delaware.
13
<PAGE> 3
11. The invalidity or unenforceability of any provision of this Agreement
will not affect the validity or unenforceability of any other provisions of
this Agreement.
12. The Agreement resulting from acceptance of this letter constitutes the
entire agreement between the parties with respect to the services described
herein and supersedes any prior agreements or understandings made between
the parties with respect thereto. No modification or amendment to this
Agreement will be valid or binding unless set forth in writing and duly
executed by the parties hereto.
If the foregoing correctly reflects the basis upon which the Company agrees
to retain the Advisor, please sign and return one copy of this Agreement to
us.
/s/ Newell Crane /s/ James Pugh
--------------------------------- ---------------------------------
Newell Crane, President James Pugh, Advisor
Global Digital Information, Inc. Bryon James International
14
<PAGE> 1
EXHIBIT 5
SONFIELD & SONFIELD
A PROFESSIONAL CORPORATION
<TABLE>
<S> <C> <C>
LEON SONFIELD (1865-1934) ATTORNEYS AT LAW NEW YORK
GEORGE M. SONFIELD (1899-1967) LOS ANGELES
ROBERT L. SONFIELD (1893-1972) 770 SOUTH POST OAK LANE WASHINGTON, D.C.
----------------- HOUSTON, TEXAS 77056
FRANKLIN D. ROOSEVELT, JR. (1914-1988) EMAIL:[email protected]
TELECOPIER (713) 877-1547
ROBERT L. SONFIELD, JR. -----
MANAGING DIRECTOR TELEPHONE (713) 877-8333
</TABLE>
March 9, 1999
Board of Directors
Global Digital Information, Inc.
455 Wards Corner Road
Loveland, Ohio, 45140
Dear Gentlemen:
In our capacity as counsel for Global Digital Information, Inc. (the
"Company"), we have participated in the corporate proceedings relative to the
authorization and issuance by the Company of a maximum of 2,000,000 shares of
common stock pursuant to the Consulting Agreement as set out and described in
the Company's Registration Statement on Form S-8 (File No. _______) under the
Securities Act of 1933 (the "Registration Statement"). We have also participated
in the preparation and filing of the Registration Statement.
Based upon the foregoing and upon our examination of originals (or
copies certified to our satisfaction) of such corporate records of the Company
and other documents as we have deemed necessary as a basis for the opinions
hereinafter expressed, and assuming the accuracy and completeness of all
information supplied us by the Company, having regard for the legal
considerations which we deem relevant, we are of the opinion that:
(1) The Company is a corporation duly organized and validly existing
under the laws of the State of Utah;
(2) The Company has taken all requisite corporate action and all action
required by the laws of the State of Utah with respect to the authorization,
issuance and sale of common stock to be issued pursuant to the Registration
Statement;
(3) The maximum of 2,000,000 shares of common stock, when issued and
distributed pursuant to the Registration Statement, will be validly issued,
fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the references to our firm in the Registration
Statement.
Yours very truly,
/s/ SONFIELD & SONFIELD
- ------------------------------
SONFIELD & SONFIELD
<PAGE> 1
EXHIBIT 24.2
CONSENT OF INDEPENDENT ACCOUNTANTS
I consent to the use in the Form S-8 Registration Statement and
Prospectus of Global Digital Information, Inc. ("the Company") of my report
dated February 28, 1999 accompanying the financial statements of the Company
contained in such Registration Statement, and to the use of my name and the
statements with respect to me, as appearing under the heading "Experts" in the
Prospectus.
/s/ Thomas J. Harris
- ----------------------
THOMAS J. HARRIS
Certified Public Accountant
March 9, 1999
Seattle, Washington