<PAGE>
As filed with the Securities and Exchange Commission on September 2, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
MEDQUIST INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-2531298
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Five Greentree Centre, Suite 311, Marlton, NJ 08053
(609) 596-8877
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
----------------------------------
John M. Suender
Senior Vice President, General Counsel and Secretary
MedQuist Inc.
Five Greentree Centre, Suite 311
Marlton, NJ 08053
(609) 596-8877
(Name, address, including zip code, and telephone number,
including area code of agent for service)
-------------------------------------
With copy to:
James D. Epstein, Esq.
Pepper Hamilton LLP
3000 Two Logan Square
Philadelphia, PA 19103
(215) 981-4000
----------------------------
Approximate date of commencement of proposed sale to the pubic: At such
time or times after the effective date of this Registration Statement as the
selling shareholders shall determine.
----------------------------------
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 registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box, and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of Shares Amount to be aggregate price aggregate offering Amount of
to be registered registered per share(1) price (1) registration fee
- -------------------------------------------------------------------------------------------------------------------------
Common Stock, no par value......... 29,196 shares (2) $35.00 $1,021,860 $284
=========================================================================================================================
</TABLE>
(1) Calculated in accordance with Rule 457(c) based on the average of the high
and low sale prices of the common stock as reported on the Nasdaq
National Market on August 30, 1999.
(2) This Registration Statement covers shares owned by certain selling
shareholders which shares may be offered from time to time by the selling
shareholders.
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, as amended or until
this Registration Statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion, dated September 2, 1999
29,196 Shares
MedQuist Inc.
Common Stock
-----------------
Mr. E. David Bradford and Mr. Timothy A. Nicholls, shareholders of
MedQuist Inc., are offering or selling 29,196 shares of our common stock under
this prospectus. MedQuist will not receive any proceeds from the sale of our
common stock by Messrs. Bradford and Nicholls.
The selling shareholders obtained their shares of our common stock in
connection with a merger of Medical Transcription Technologies, Inc. with a
wholly-owned subsidiary of MedQuist.
The selling shareholders may offer their shares of our common stock
through public or private transactions on or off the United States exchanges, at
prevailing market prices, or at privately negotiated prices.
Our common stock is quoted on the Nasdaq National Market under the
symbol "MEDQ". On September 1, 1999, the last reported sale price for our common
stock on the Nasdaq National Market was $36.69 per share.
See "Risk Factors" beginning on page 2 to read about certain factors
you should consider before buying shares of our common stock.
We urge you to read carefully this prospectus which will describe the
specific terms of the offering before you make your investment decision.
---------------------
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the adequacy
or accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
--------------------
Prospectus dated ______ 1999.
<PAGE>
TABLE OF CONTENTS
Page
Forward-looking Statements................................................. i
The Company................................................................ 1
Risk Factors............................................................... 2
Use of Proceeds............................................................ 6
Selling Shareholders....................................................... 7
Plan of Distribution....................................................... 8
Legal Matters..............................................................10
Experts ..................................................................10
Where You Can Find Additional Information..................................11
FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus contains forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. These statements express or are based on
expectations about future events and generally include forward-looking language
such as "will likely result," "may," "are expected to," "is anticipated,"
"believes," "estimated," "projected," "intends to" or other similar words. Our
actual results are likely to differ, and could differ materially, from the
results expressed in, or implied by, these forward-looking statements. There are
many factors that could cause these forward-looking statements to be incorrect,
including but not limited to the risks described above under "Risk Factors".
When considering these forward-looking statements, you should keep in mind these
risk factors and the other cautionary statements in this prospectus, and should
recognize that those forward-looking statements speak only as of the date made.
MedQuist does not undertake any obligation to update any forward-looking
statement included in this prospectus.
-i-
<PAGE>
THE COMPANY
MedQuist is the leading national provider of medical transcription
services, a key component in the provision of healthcare services. Transcription
is the process by which dictation is converted into an electronic medical
report. The timely production of accurate reports is necessary for patient care
and for healthcare providers to receive reimbursement. Through our
transcriptionists, proprietary software, sophisticated digital dictation
equipment and ability to interface with healthcare providers' computer systems,
we provide customized solutions to shorten our customers' billing cycles and
reduce their overhead and other administrative costs.
MedQuist was incorporated in New Jersey in 1984 and reorganized in 1987
as a group of out-patient healthcare businesses affiliated with a non-profit
healthcare provider. In May 1994, we acquired our first medical transcription
business, Transcriptions, Ltd. By the end of 1995, we had divested all of our
non-medical transcription businesses, and through August 31, 1999, we had
acquired The MRC Group, Inc. and 21 other medical transcription companies. Our
executive offices are located at Five Greentree Centre, Suite 311, Marlton, New
Jersey 08053 and our telephone number is (609) 596-8877.
-1-
<PAGE>
RISK FACTORS
An investment in our common stock involves many risks including market,
liquidity, credit, operational, legal and regulatory risks. These risks may be
substantial and are inherent in MedQuist's business. You should consider
carefully the following information about these risks, together with the other
information in this prospectus, before buying shares of our common stock.
If any of the following risks actually occurs, our business and
prospects could be materially adversely affected, the trading price of our
common stock could decline, and you might lose all or part of your investment.
Our success depends upon our ability to recruit and retain qualified
transcriptionists
Our success depends, in part, upon our ability to attract and retain
qualified transcriptionists who can provide accurate transcription quickly. It
can be difficult to recruit and retain qualified transcriptionists. Competition
for skilled transcriptionists is intense. In addition, transcriptionist is a
skilled position where experience is valuable and we require that our
transcriptionists have substantial experience or receive substantial training
before being hired.
Our growth strategy includes acquisitions
As part of our growth strategy, we have made, and plan to continue to
make, acquisitions of other companies. A portion of our recent growth in revenue
is a result of acquisitions of other medical transcription companies. The number
of large acquisition candidates is decreasing. As a result, our acquisition
activities may not be as significant in the future and our growth rate could
decline.
In addition, if we are successful in pursuing acquisitions, we may need
to borrow money or incur other liabilities to finance our acquisition activity.
This could limit our financial flexibility. We also may be required to issue
additional shares of stock which could result in dilution to our shareholders.
We depend on our senior management team
Our senior management team is crucial to our success. David A. Cohen,
our chief executive officer, and John A. Donohoe, our chief operating officer,
have 56 years of combined experience in the medical transcription industry.
New services or products using new technologies could adversely affect the
demand for our services
The introduction of competing services or products incorporating new
technologies, such as voice recognition capabilities or other alternative means
of data entry, could adversely affect the demand for our services. To maintain
our leadership position, we must improve our services to keep pace with
technological developments and changes in the marketplace.
-2-
<PAGE>
We depend on a single line of business
We anticipate that we will continue to derive substantially all of our
revenue from providing medical transcription services. A reduction in demand or
an increase in competition in the market for our transcription services could
have a material adverse effect on our business, financial condition and results
of operations.
Our growth strategy includes the expansion of our customer base
Our core customer base has been the medical records departments of
hospitals. We plan to continue the recent expansion of our client base to
include additional outpatient clinics, physician practice groups and direct
patient care departments within hospitals. The success of our ongoing expansion
is important to our future because we expect an increase in the provision of
healthcare services at sites other than hospitals.
If we are not able to maintain our current rate of growth in revenue and
earnings, the market price of our common stock could decline
Our revenue and profits have grown in recent periods as a result of
both internal growth and acquisitions. The rate of growth in revenue and profits
may decline as a result of a variety of factors, including:
o our ability to hire and retain transcriptionists;
o size and timing of acquisitions;
o integration of acquired businesses into our operations;
o changes in demand for our services; and
o competitive conditions in the industry.
It is possible that our future operating results may be below the
expectations of stock market analysts and investors. Any shortfall could cause a
decline in the price of our common stock.
In addition, a decline in the price of our common stock could make it
more difficult or expensive for us to acquire companies by issuing common stock.
The market price of our common stock may be volatile
The market price of our common stock has been volatile in the past and
may be volatile in the future. Our common stock price may be affected by many
factors, including the following:
o fluctuations in our operating results;
o acquisitions;
o technological innovations or new product or service
introductions by us or our competitors;
o government regulations;
o healthcare legislation and reforms; and
o general market and economic conditions.
The stock market in recent years has experienced substantial price and
volume fluctuations. This has been accompanied by extreme volatility in the
stock prices of healthcare service companies that often has been unrelated to
the operating performance of these companies. Similar market activity could
adversely affect the market price of our common stock in the future.
-3-
<PAGE>
We compete with many others in the market for medical transcription services
We compete with approximately 1,500 medical transcription service
companies in the United States. These companies offer services that are similar
to ours and compete with us for both clients and qualified transcriptionists. We
also compete with the in-house transcription staffs of our current and potential
clients. Increased competition may result in lower prices for our services,
higher payroll costs, reduced operating margins and the inability to increase
our market share.
Although many of our competitors are local or regional companies,
several competitors are large national companies, including Transcend Services,
Inc. and Rodeer Systems, Inc. In addition, we anticipate increasing competition
from other large companies that were not traditionally in the medical
transcription business, such as IDX Systems Corporation. Current and potential
competitors may have financial, technical and marketing resources that are
greater than ours. As a result, competitors may be able to respond more quickly
to evolving technological developments or changing customer needs or devote
greater resources to the development, promotion or sale of their services than
we can.
In addition, competition may increase due to consolidation of
transcription companies. Current and potential competitors may establish
cooperative relationships with third parties to increase their ability to
attract our current and prospective clients.
A change in law or a challenge to our classification of our at-home
transcriptionists may result in additional employment costs, taxes or penalties
We have transcriptionists treated as employees for state tax, benefits,
unemployment, federal income tax and social security tax purposes. We also have
other at-home transcriptionists who are treated as independent contractors for
state tax, benefits and unemployment purposes and as statutory employees for
federal income tax and social security tax purposes. If there is a change in law
or a successful challenge to our position regarding treatment of at-home
transcriptionists as independent contractors, we may have to pay or incur
additional employment costs, taxes and penalties. It is also difficult to
supervise and monitor an at-home work force. Failure of at-home employees to
follow our policies and procedures, such as with respect to wage and hour and
other government regulations, could subject us to liability.
Competitors and software providers may claim that we are infringing on their
proprietary rights
Defending these claims, even if they have no merit, can be
time-consuming and expensive. In addition, in the event of infringement claims,
we may be required to enter into royalty or licensing agreements or cease the
claimed infringing activities.
We may be subject to liability if we fail to comply with confidentiality
requirements
We are subject to many laws, regulations and contractual provisions
that require us to keep the medical information that we transcribe confidential.
We may be subject to liability if we fail to comply with confidentiality
requirements.
-4-
<PAGE>
Our customers and suppliers may not be Year 2000 compliant
We rely heavily on the computer systems of our customers, suppliers and
other organizations such as telephone companies in operating our business. If
these systems are not Year 2000 compliant, our business, operating results and
financial position could be materially and adversely affected.
A significant number of shares eligible for future sale could lower the market
price for our common stock
Sales of large numbers of shares of our common stock after the
offering, or even the potential of those sales, likely would lower the market
price of our common stock. After giving effect to this offering, we will have
35,901,577 shares of common stock outstanding, substantially all of which will
be freely tradeable. In addition 3,169,409 shares which may be issued upon the
exercise of outstanding options may be sold at various times after the offering.
Anti-takeover provisions may make it more difficult for a third party to acquire
control of us and could reduce the amount that shareholders would receive if we
are sold
Anti-takeover provisions contained in New Jersey law and in our
charter, bylaws and contracts could make it more difficult for a third party to
acquire control of MedQuist, even if that change in control would be beneficial
to shareholders. These provisions could reduce the amount that shareholders
would receive if we are sold. These anti-takeover provisions include the
following:
o New Jersey law prohibits us from entering into certain
business combination transactions with any shareholder that
owns 10% or more of our outstanding voting securities, except
under limited circumstances.
o Our charter gives our board of directors the authority to
issue shares of preferred stock without shareholder approval.
Any preferred stock could have rights, preferences and
privileges that could adversely affect the voting power and
the other rights of the holders of our common stock.
o Our charter provides for staggered terms for the members of
the board of directors, with each board member serving a three
year term.
o We have entered into severance arrangements with most of our
senior management which provide for significant payments upon
a change in control.
o All outstanding options to purchase our stock would become
exercisable immediately upon a change in control.
-5-
<PAGE>
USE OF PROCEEDS
All net proceeds from the sale of shares of our common stock covered by
this prospectus will go to Messrs. Bradford and Nicholls who offer and sell
their shares. We will not receive any proceeds from the sale of our common stock
by Messrs. Bradford and Nicholls.
-6-
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of our common stock as of the date of this prospectus adjusted to
reflect the sale of shares offered hereby for each selling shareholder.
The selling shareholders have furnished to us the information set forth
below and this information is accurate to the best of our knowledge.
<TABLE>
<CAPTION>
Shares of Common Shares of Common
Stock Beneficially Stock Beneficially
Owned Before the Owned After the
Selling Shareholder Offering (1) Shares to be Sold Offering
- ------------------- ------------------------ ----------------- --------------------
<S> <C> <C> <C>
E. David Bradford 14,598 14,598 -0-
Timothy A. Nicholls 19,598 14,598 5,000
</TABLE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and includes voting or investment power with
respect to the shares beneficially owned. Shares of common stock subject to
options or warrants currently exercisable within 60 days after the date of this
prospectus are deemed outstanding for computing the percentage ownership of the
person holding such options or warrants but are not deemed outstanding for
computing the percentage ownership of any other person.
-7-
<PAGE>
PLAN OF DISTRIBUTION
Mr. Bradford and Mr. Nicholls may offer their shares of our common
stock at various times in one or more of the following transactions:
o on the Nasdaq National Market;
o in the over-the-counter market;
o in negotiated transactions;
o in connection with short sales of our common stock;
o by engaging in transactions using options to buy or sell
shares of our common stock;
o in a combination of any of the above transactions.
Mr. Bradford and Mr. Nicholls may sell their shares at market prices
prevailing at the time of sale, at prices related to those prevailing market
prices or at negotiated prices.
Mr. Bradford and Mr. Nicholls may use broker-dealers to sell their
shares. If this happens, broker-dealers will receive either discounts or
commissions from Mr. Bradford or Mr. Nicholls, or they will receive commissions
from purchasers of shares for whom they acted as agents.
Because Mr. Bradford and Mr. Nicholls may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, Mr.
Bradford and Mr. Nicholls will be subject to the prospectus delivery
requirements of the Securities Act. MedQuist has informed Mr. Bradford and Mr.
Nicholls that the anti-manipulative provisions of Regulation M promulgated under
the Exchange Act may apply to their sales in the market.
Upon MedQuist being notified by Mr. Bradford and Mr. Nicholls that any
material arrangement has been entered into with a broker-dealer for the sale of
shares of our common stock through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker-dealer, a
supplement to this prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act disclosing:
o the name of each selling shareholder and of the participating
broker-dealer(s);
o the number of shares involved;
o the price at which those shares were sold;
o the commissions paid or discounts or concessions allowed to
those broker-dealer(s), where applicable;
o that those broker-dealer(s) did not conduct any investigation
to verify the information set out or incorporated by
reference in this prospectus; and
-8-
<PAGE>
o other facts material to the transaction.
In addition, upon MedQuist being notified by Mr. Bradford and Mr.
Nicholls that a donee or pledgee intends to sell more than 500 shares, a
supplement to this prospectus will be filed.
-9-
<PAGE>
LEGAL MATTERS
John M. Suender, MedQuist's Senior Vice President and General Counsel,
has given his opinion that the shares offered by Mr. E. David Bradford and Mr.
Timothy A. Nicholls are legally issued, fully paid and non-assessable. As of the
date of this prospectus, Mr. Suender beneficially owns 55,579 shares of
MedQuist's common stock.
EXPERTS
The audited consolidated financial statements of MedQuist Inc. and
subsidiaries incorporated by reference in this prospectus and elsewhere in this
registration statement of which this prospectus is a part, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference in this
prospectus in reliance upon the authority of said firm as experts in giving said
report.
-10-
<PAGE>
WHERE YOU CAN FIND ADDITIONAL INFORMATION
MedQuist Inc. files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements and other information MedQuist files with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C., 20549.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. MedQuist's SEC filings are also available on
the SEC's Internet site (http://www.sec.gov).
MedQuist has filed a registration statement on Form S-3 to register the
shares of MedQuist common stock offered under this prospectus. This prospectus
is a part of the registration statement on Form S-3 and constitutes a prospectus
of MedQuist. As allowed by SEC rules, this prospectus does not contain all the
information you can find in the registration statement on Form S-3 or the
exhibits to the registration statement on Form S-3.
The SEC also allows MedQuist to "incorporate by reference" the
information it files with the SEC, which means MedQuist can disclose information
to you by referring you to another document filed separately with the SEC.
Information incorporated by reference is deemed to be part of this prospectus.
Later information filed by MedQuist with the SEC updates and supersedes this
prospectus.
This prospectus incorporates important business and financial
information about MedQuist that is not included in or delivered with this
prospectus. Copies of any of that information are available without charge to
any person to whom this prospectus is delivered, upon written or oral request.
Written requests for those documents should be directed to the Corporate
Secretary, MedQuist Inc., Five Greentree Centre, Suite 311, Marlton, New Jersey,
08053, and telephone requests may be directed to the Corporate Secretary at
(609) 596-8877.
The following documents previously filed by MedQuist with the SEC are
incorporated herein by this reference:
<TABLE>
<CAPTION>
SEC Filing Period (or Date Filed)
<S> <C>
Quarterly Report on Form 10-Q Quarter ended June 30, 1999
Current Report on Form 8-K June 4, 1999
Current Report on Form 8-K April 29, 1999
Current Report on Form 8-K April 19, 1999
Quarterly Report on Form 10-Q Quarter ended March 31, 1999
Current Report on Form 8-K March 25, 1999
Current Report on Form 8-K March 1, 1999
Annual Report on Form 10-K, as amended (including those portions of Year ended December 31, 1998
MedQuist's proxy statement for its 1999 annual meeting of shareholders
incorporated by reference in the Annual Report on Form 10-K)
Registration Statement on Form 8-A filed pursuant to Section 12(g) of the March 11, 1992
Exchange Act
</TABLE>
All documents filed by MedQuist pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this prospectus and prior
to the termination of the offering will be deemed to be incorporated by
reference in this prospectus and to be a part of this prospectus from the date
that document is filed.
-11-
<PAGE>
================================================================================
No dealer, salesperson or other person is authorized to give any information or
to represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. This prospectus is an offer to sell
only the shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
--------------------------------------------
29,196 Shares
MedQuist Inc.
Common Stock
--------------------------------------------
================================================================================
<PAGE>
PART II
Information not Required in the Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The following table shows the estimated expenses of the issuance and
distribution of the securities offered.
SEC Registration Fee $ 284
Legal fees and expenses 5,000
Accounting fees and expenses 2,000
Printing and Miscellaneous 1,000
--------
TOTAL $ 8,284
========
Item 15. Indemnification of Directors and Officers.
Section 14A:3-5 of the Business Corporation Act of the State of New
Jersey ("NJBCA") permits each New Jersey business corporation to indemnify its
directors, officers, employees and agents against expenses and liability for
each such person's acts taken in his or her capacity as a director, officer,
employee or agent of the corporation if such actions were taken in good faith
and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any criminal
proceeding, if he or she had no reasonable cause to believe his or her conduct
was unlawful. Article 10 of the Company's Bylaws provides that the Company, to
the full extent permitted by Section 14A:3-5 of the NJBCA, shall indemnify all
past and present directors or officers of the Company and may indemnify all past
or present employees or other agents of the Company. To the extent that a
director, officer, employee or agent of the Company has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
such Article 10, or in defense of any claim, issue, or matter therein, he or she
shall be indemnified by the Company against expenses in connection therewith.
Such expenses shall be paid by the Company in advance of the final disposition
of the action, suit or proceeding as authorized by the Company's Board of
Directors upon receipt of an undertaking to repay the advance if it is
ultimately determined that such person is not entitled to indemnification.
The Company has a policy insuring it and its directors and officers
against certain liabilities, including liabilities under the Securities Act.
Reference is made to Item 17 of this Registration Statement for
additional information regarding indemnification of directors and officers.
Item 16. Exhibits.
4.1 Specimen Stock Certificate (Incorporated by reference to Exhibit 4.1 of
the Company's Registration Statement on Form S-1 (No. 333-3050) filed
with the Commission on April 1, 1996).
5.1 Opinion of John M. Suender, Senior Vice President and General Counsel
(Included on page II-5).
23.1 Consent of Arthur Andersen LLP (Included on page II- 6).
23.4 Consent of John M. Suender, Senior Vice President and General Counsel
(Included in Exhibit 5.1).
24.1 Powers of Attorney (Included on page II- 3).
II-1
<PAGE>
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, post-effective amendment to this registration statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those clauses is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Marlton, State of New Jersey, on September 2, 1999.
MEDQUIST INC.
By: /s/ David A. Cohen
--------------------------------------------
David A. Cohen
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints David A. Cohen and John R. Emery, and
each or any of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and other registration
statements and amendments thereto relating to the Offering contemplated by this
Registration Statement (including registration statements under Rule 462
promulgated under the Securities Act of 1933, as amended), and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their, his substitutes or substitute, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on September 2,
1999 in the capacities indicated:
Signatures Title
/s/ David A. Cohen Chairman and Chief Executive Officer (principal
- --------------------------- executive officer)
David A. Cohen
/s/ John R. Emery Senior Vice President, Treasurer and Chief
- --------------------------- Financial Officer (principal financial officer
John R. Emery and principal accounting officer)
/s/ John A. Donohoe, Jr. President, Chief Operating Officer and Director
- ---------------------------
John A. Donohoe, Jr.
II-3
<PAGE>
/s/ James R. Emshoff Director
- ------------------------------
James R. Emshoff
/s/ William T. Carson Director
- ------------------------------
William T. Carson
/s/ Richard J. Censits Director
- ------------------------------
Richard J. Censits
- ------------------------------ Director
John T. Casey
/s/ A. Fred Ruttenberg Director
- ------------------------------
A. Fred Ruttenberg
/s/ John H. Underwood Director
- ------------------------------
John H. Underwood
/s/ Terrence J. Mulligan Director
- ------------------------------
Terrence J. Mulligan
/s/ R. Timothy Stack Director
- ------------------------------
R. Timothy Stack
/s/ Edward L. Samek Director
- ------------------------------
Edward L. Samek
/s/ Bruce K. Anderson Director
- ------------------------------
Bruce K. Anderson
/s/ Richard H. Stowe Director
- ------------------------------
Richard H. Stowe
II-4
<PAGE>
EXHIBIT 5.1
September 2, 1999
MedQuist Inc.
Five Greentree Centre
Suite 311
Marlton, New Jersey 08053
RE: Registration Statement on Form S-3
Gentlemen:
Reference is made to the Registration Statement on Form S-3 of MedQuist
Inc., a New Jersey Corporation (the "Company"), to which this opinion is
attached as an exhibit (the "Registration Statement"). The Registration
Statement relates to the offering and sale by certain selling shareholders of up
to an aggregate of 29,196 shares of common stock, no par value (the "Shares"),
of the Company which are currently outstanding. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Registration
Statement.
In this connection, I have examined the Registration Statement,
including the exhibits thereto, the originals or copies, certified or otherwise
identified to my satisfaction, of the Articles of Incorporation and the By-Laws
of the Company as amended to date, and such other documents and corporate
records relating to the Company as I have deemed appropriate for the purpose of
rendering the opinion expressed herein. The opinion expressed herein is based
exclusively on the applicable provisions of the New Jersey Business Corporation
Act.
On the basis of the foregoing, I am of the opinion that the Shares have
been legally issued and are fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the caption Legal
Matters in the prospectus which is part of the Registration Statement.
Very truly yours,
John M. Suender
Senior Vice President, General Counsel
and Secretary
II-5
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
February 1, 1999, included in MedQuist Inc.'s Form 10-KA filed on March 26,
1999, for the years ended December 31, 1996, 1997 and 1998 and to all references
to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Philadelphia, PA
September 1, 1999
II-6
