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As filed with the Securities and Exchange Commission on July 29, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
______________________
COREL CORPORATION
(Exact name of the Registrant as specified in its charter)
Canada Not Applicable
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) no.)
1600 Carling Avenue
Ottawa
Ontario, Canada K1Z 8R7
(613) 728-8200
(Address and telephone number of the Registrant's principal executive offices)
______________________
MICHAEL C.J. COWPLAND
CHIEF EXECUTIVE OFFICER
COREL CORPORATION
1600 CARLING AVENUE
OTTAWA, ONTARIO, CANADA K1Z 8R7
(613) 728-8200
(Name, address and telephone number of the Registrant's agent for service)
______________________
Copies to:
KEVIN KELSO
FENWICK & WEST LLP
TWO PALO ALTO SQUARE, SUITE 800
PALO ALTO, CALIFORNIA 94306
(650) 494-0600
______________________
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Each Class of shares of common stock Amounts to be Offering Price per Aggregate Offering Amount of
to be Registered Registered(1) Share(1) Price(1) Registration Fee
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<S> <C> <C> <C> <C>
common stock no par value 1,000,000 $4.59 $4,590,000 $1,276
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</TABLE>
(1) Estimated solely for the purpose of calculating the amount of registration
fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the high and low prices of the common stock on the
Nasdaq Stock Market on July 28, 1999.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant files a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
<PAGE>
Subject to completion, dated July 29, 1999
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PROSPECTUS
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Corel Corporation
1,000,000 shares of common stock
------------------------------------------
Corel's common stock currently trades on The Nasdaq Stock Market and The Toronto
Stock Exchange.
Last reported sale price on The Nasdaq Stock Market on July 28, 1999: $4.47 per
share.
Trading Symbol: CORL
--------------------------------------------
The Offering
The selling stockholders named on page 5 of this prospectus are selling all
of the shares of common stock offered in this prospectus. Corel will not
receive any of the proceeds from the sale of these shares. These shares
are being offered on a continuous basis under Rule 415 of the Securities
Act of 1933 and will be sold from time to time as described under "Plan of
Distribution."
Corel will pay approximately $22,000 in registration expenses. Corel will
not be required to pay any discounts, commissions or selling expenses in
connection with this registration. The selling stockholders, and broker-
dealers who may participate in sale of the shares covered by this
prospectus, may use this prospectus. The shares covered by this prospectus
may, if qualified, also be sold pursuant to Rule 144 of the Securities Act
or any other applicable exemption.
--------------------------------------------
This investment involves a high degree of risk. Please carefully consider
the "Risk Factors" beginning on page 2 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the
contrary is a criminal offense.
The date of this prospectus is _____, 1999
********************************************************************************
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.
********************************************************************************
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In connection with this offering, no person is authorized to give any
information or to make any representations not contained in this prospectus. If
such information is given or representations made, you may not rely on such
information or representations as having been authorized by us. This prospectus
is neither an offer to sell nor a solicitation of an offer to buy any securities
other than those registered hereby, nor is it an offer to sell or a solicitation
of an offer to buy securities where such an offer or solicitation would be
unlawful. You may not imply from the delivery of this prospectus, nor from any
sale made under this prospectus, that our affairs are unchanged since the date
of this prospectus or that the information contained in this prospectus is
correct as of any time after the date of this prospectus.
-----------------------------------------
TABLE OF CONTENTS
-----------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Risk Factors.....................2 Where You Can Find More Information............8
Use of Proceeds..................5 Documents Incorporated by Reference............8
Selling Stockholders.............5 Legal Matters..................................9
Dilution.........................6 Experts........................................9
Plan of Distribution.............6
</TABLE>
Unless the context otherwise requires, the terms "we," "our," "us" and
"Corel" refer to Corel Corporation and its wholly owned subsidiaries, Corel
Corporation Limited, Corel International Corp., Corel, Inc. and Corel
Corporation (U.S.A.).
COREL
We were incorporated as Corel Systems Corporation under the Canada Business
Corporations Act by Articles of Incorporation dated May 29, 1985. Corel's
principal executive offices are located at 1600 Carling Avenue, Ottawa, Ontario,
Canada K1Z 8R7 and its telephone number is (613)-728-8200. Our corporate name
was changed to Corel Corporation in May 1992. Corel develops, manufactures,
licenses, sells and supports a wide range of software products including
graphics, business productivity, consumer and video applications. Corel products
are available for users of most PCs, including International Business Machines
Corporation ("IBM(R)") and IBM-compatible PCs, Apple Computer Inc.'s ("Apple")
Macintosh(R) ("Mac"), UNIX-based and Linux-based systems. Corel's business
strategy emphasizes the development of a broad line of PC software application
products for business and personal use, marketed through multiple channels of
distribution.
RISK FACTORS
Please carefully consider the specific factors set forth below as well as the
other information contained in, or incorporated by reference into, this
prospectus before purchasing shares of our common stock. This prospectus
contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include,
but are not limited to, those discussed below.
Our success depends on the success of a few product lines.
The success of our two most prominent product lines are critical to the success
of our business. The two product lines are CorelDRAW and Corel WordPerfect
Suite. Through the first six months of our 1999 fiscal year, these product
lines accounted for 95% of our revenue. The inability to complete timely
enhancements to our products and to effectively market our products could have a
material adverse affect on our business, results of operations and financial
conditions.
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We may not be profitable in the face of rapidly changing technology.
Rapid technological developments, evolving consumer demands and frequent new
product introductions and enhancements characterize the market for business
applications and graphics software. These market characteristics are exacerbated
by the emerging nature of the market and the fact that our competitors hold a
significant portion of the market share in the business applications market. Our
future success will be dependent upon the timely completion and introduction of
new or enhanced products incorporating such emerging technologies at competitive
price and performance levels. The pace of change is accelerated due to the
Internet, corporate intranets and the acceptance of new operating systems such
as Linux. In addition, the widespread adoption of developing systems and
applications for such emerging technologies could require significant resources
and could adversely affect our results of operations and financial conditions.
Our success depends on key personnel.
Our future success is substantially dependent on our executive officers and key
technical and marketing personnel. Our future success depends on our continuing
ability to retain and attract highly qualified technical and managerial
personnel. As of May 31, 1999, we had 1,456 full-time employees and we
anticipate that the number of employees will increase significantly during the
next 12 months. Wages for managerial and technical employees are increasing and
are expected to continue to increase in the foreseeable future due to the
competitive nature of the current employment market, particularly in Canada. We
may be unable to retain key technical and managerial personnel or attract and
retain additional highly qualified technical and managerial personnel in the
future. We have experienced difficulty from time to time attracting the
personnel necessary to support the growth of our business, and we may experience
similar difficulty in the future. Inability to attract and retain the technical
and managerial personnel necessary to support the growth of our business could
have an adverse affect on our business.
We experience fluctuations in our operating results.
We have experienced, and expect to continue to experience, significant
fluctuations in operating results due to a variety of factors.
Factors that may cause fluctuations in operating results in the future
include, but are not limited to,
. market acceptance of our products or those of our competitors;
. the timing of introductions of new products and new versions of
existing products;
. expenses relating to the development and promotion of such new products
and new version introductions;
. product returns and reserves; changes in pricing policies by us or our
competitors;
. projected and actual changes in platforms and technologies;
. the accuracy of forecasts of, and fluctuations in, consumer demand;
. the rate of growth of the consumer software market;
. fluctuations in foreign exchange rates;
. the timing of orders or order cancellation from major customers;
. changes or disruptions in the consumer software distribution channels;
. the successful acquisition and integration of new businesses, products
and technologies;
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. the timing of any write-offs in connection with such acquisitions; and
. economic conditions, both generally and within our industry.
We may also be required to pay fees in advance or to guarantee royalties,
which may be substantial, or to obtain software licenses from third parties. As
a result of these and other factors, our operating results in any given period
are inherently difficult to predict. Any significant shortfall in revenues and
earnings from the levels expected by securities analysts and stockholders could
result in a substantial decline in the trading price of our common stock.
Competition within distribution channels may adversely affect our business.
We compete with other software vendors for access to distribution channels,
retail shelf space and the attention of customers at the retail level and in
corporate accounts. Other competitors with greater market share and
significantly greater financial resources may command the attention of the
retail accounts, the corporate market and original equipment manufacturers. In
order to compete for distribution channel space we must offer compelling reasons
to distribute our products. We attempt to achieve this through offering a
superior product at a reasonable price that offers compatibility with
competitive products. We must also use innovative marketing ideas in order to
compel the distributor to carry our products. Inability to maintain distribution
channel space could have a material adverse affect on our business, results of
operations and financial condition.
We depend on a limited number of distributors and retailers for a substantial
amount of revenues.
The distribution of our products is carried out primarily through distributors,
certain of which are material to our competitive position. The distribution
channels through which software products for desktop computers are sold have
been characterized by rapid change, including consolidations and financial
difficulties of certain distributors and retailers, the emergence of new
retailers such as general mass merchandisers and superstores, and the desire of
large customers such as retail chains and corporate users to purchase directly
from software developers. The loss of, or a significant reduction in sales
volumes attributable to any of our principal distributors or the insolvency or
business failure of any such distributor could have a material adverse effect on
our business and results of operations and financial condition.
Our marketplace is intensely competitive and rapidly changing and we may not be
able to compete successfully in the future.
Our industry is highly competitive and subject to rapid technological change.
Many of our current and potential competitors have larger technical staffs, more
established and larger marketing and sales organizations, and significantly
greater financial resources. The rapid pace of technological change constantly
creates new opportunities for existing and new competitors and can quickly
render existing technologies less valuable. As the market for our products
continues to develop, additional competitors may enter the market and
competition may intensify. Inability to compete in the following factors could
have a material adverse affect on our business; product performance, product
features, ease of use, reliability, hardware and competitor compatibility, brand
name recognition, product reputation, pricing, levels of advertising,
availability and quality of customer support, and timeliness of product
upgrades.
Our dependence on third party developers could have a material adverse affect on
our business.
We compete with other software companies in our efforts to acquire software
technology developed by third parties. As we continue to introduce new products
that incorporate new technologies, we may be required to license additional
technology from others. We cannot assure you that this third party technology
license will continue to be commercially available to us on reasonable terms, if
at all. Additionally, we cannot assure you that third parties from which we
license our technology will be able to defend their proprietary rights
successfully against claims of infringement. Any failure to obtain any of these
technology licenses could result in delays and reductions in the introduction of
new features and functions. With limited technical resources available and the
need for timely
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product enhancements, the use of third party developers is critical to our
product release schedules. Inability to secure third party developers could have
a material adverse affect on our business.
We face risks associated with our international operations.
A part of our strategy is to increase our presence in international markets. We
may experience difficulty in managing international operations as a result of
competition, local laws and regulations, distance and language and cultural
differences. There are also certain risks inherent in doing business
internationally including:
. cultural and business practice differences;
. fluctuations in currency exchange rates;
. political;
. legal and economic stability;
. seasonal reductions in business activity in certain other parts of the
world; and
. potentially adverse tax consequences.
We may not be profitable in the face of constant pricing pressures.
Pricing pressures continually intensify in our market and we believe that price
competition, with its attendant reduced profit margins, may become a more
significant factor in the future. Corporate licensing, discount pricing for
large volume distributors and retailers, product bundling promotions,
competitive upgrade programs and end-user-mail-in rebates are forms of price
competition that are prevalent today. The inability to effectively market our
products and obtain the optimum price points could have a material adverse
affect on our business.
Our common stock price is highly volatile and is subject to wide fluctuations.
The market price of our common stock is highly volatile and could be
subject to wide fluctuations in response to factors such as actual or
anticipated variations in our operating results, announcements of technological
innovations, new products or services introduced by us or our competitors,
changes in financial estimates by securities analysts, conditions and trends in
the software market, general market conditions and other factors.
Year 2000 issues could affect our business.
There are three major risks for the Company from Year 2000 issues. Year
2000 compliance problems with Corel's products could have a material adverse
effect on sales and operations. Significant Year 2000 compliance problems with
internal systems could seriously affect the Company's ability to carry out its
operations. Corel also depends heavily on third parties for raw materials,
transportation utilities, and other key services. Interruption of supplier
operations due to Year 2000 issues could seriously disrupt the Company's
operations. In addition, if Corel's current or future customers do not achieve
Year 2000 compliance or if they divert expenditures previously reserved for
business software to address their year 2000 compliance problems, Corel's
business, results of operations, or financial condition could be materially
adversely affected.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by the
selling stockholders.
SELLING STOCKHOLDERS
We are registering the shares of common stock pursuant to the Agreement for
Purchase and Sale of Assets dated April 16, 1999 by and among IA Users Club,
Inc., Jeff Bianco, Corel Corporation and Corel Corporation Limited (the
"Agreement").
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IA Users Club, Inc., of which Jeff Bianco is the sole shareholder, is a provider
of digital graphics to software publishers and hardware manufacturers. On April
16, 1999, pursuant to the Agreement, Corel Corporation and Corel Corporation
Limited acquired the digital graphics content of IA Users Club, Inc., along with
other intangible assets. As part of the purchase price, Corel issued 1,000,000
Common Shares to IA Users Club, Inc., who at closing, directed Corel to deliver
such shares to Jeff Bianco, Michael Walker, the sole owners of equity interests
in IA Users Club, Inc., and Corum Group, which assisted IA Users Club, Inc., in
connection with the transaction (collectively, the "selling stockholders") in
the amounts set out below. Such direction was made to accommodate certain of IA
Users Club, Inc.'s internal arrangements related to the purchase price. If the
average closing sales price per share of the Common Shares as traded on The
Nasdaq Stock Market - National Market for the seven trading days preceding
September 30, 1999 is less than US$6.30 then Corel is obligated to pay the
selling shareholders, before October 30, 1999, in US dollars, the difference
between the average trading price and US$6.30 multiplied by the number of
original Common Shares held by the selling shareholders on September 30, 1999.
The selling stockholders may from time to time offer and sell any or all of
their shares pursuant to this prospectus. Because the selling stockholders are
not obligated to sell shares of common stock, and because selling stockholders
may also acquire publicly traded shares of our common stock, we cannot estimate
how many shares of common stock each selling stockholder will beneficially own
after this offering.
Shares of Common Stock Beneficially Owned (1)
Prior to the Offering and Being Offered
---------------------------------------
Name Number Percent
---- ------ -------
Jeff Bianco 930,000 1.5%
Corum Group 40,000 *(2)
Michael Walker 30,000 *(2)
-------
1,000,000
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Unless otherwise indicated below, the persons
and entities named in the table have sole voting and sole investment power with
respect to all shares beneficially owned, subject to community property laws
where applicable.
(2) Less than one percent
DILUTION
The dilutive effect of the shares have already been calculated in the results
of operations and earnings per share figure recorded in our quarterly report on
Form 10-Q for the fiscal quarter ended May 31, 1999.
PLAN OF DISTRIBUTION
We have filed a Registration Statement of which this prospectus forms a
part pursuant to registration rights we granted to the selling stockholders
pursuant to the Agreement.
To Corel's knowledge, no selling stockholder has entered into any
agreement, arrangement or understanding with any particular broker or market
maker with respect to the shares of common stock offered hereby, nor does Corel
know the identity of the brokers or market makers that will participate in the
sale of the shares. As used in this prospectus, the term "selling stockholders"
includes donees and pledgees selling shares received from a named selling
stockholder after the date of this prospectus.
Who May Sell; How Much; Applicable Restrictions. The selling stockholders
may from time to time offer the shares of common stock through brokers, dealers
or agents who may receive compensation in the form of discounts, concessions or
commissions from the selling stockholders and/or the purchasers of the shares of
common stock for whom they may act as agent. In effecting sales, broker-dealers
that are engaged by the selling stockholders may arrange for other broker-
dealers to participate. The selling stockholders and any such brokers, dealers
or agents who participate in the distribution of the shares of common stock may
be deemed to be "underwriters," and any profits on the sale of the shares of
common stock by them and any discounts, commissions or concessions received by
any such brokers, dealers or agents might be deemed to be underwriting discounts
and commissions under the Securities Act. To the extent the selling
stockholders may be deemed to be underwriters, the selling stockholders may be
subject to certain statutory liabilities of, including but not limited to,
Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange
Act. To our knowledge, there are currently no plans, arrangements or
understandings between any selling stockholders and any broker, dealer, agent or
underwriter regarding the sale of the shares of common stock by the selling
stockholders.
Manner of Sales and Applicable Restrictions. The selling stockholders will
act independently of Corel in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made over The Nasdaq
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Stock Market or otherwise, at then prevailing market prices, at prices related
to prevailing market prices or at negotiated prices. The shares of common stock
may be sold according to one or more of the following methods:
(a) a block trade in which the broker or dealer so engaged will attempt to
sell the shares of common stock as agent but may position and resell a
portion of the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
(c) an over-the-counter distribution in accordance with the Nasdaq rules;
(d) ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
(e) privately negotiated transactions.
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of our common stock,
including the entry of stabilizing bids or syndicate covering transactions or
the imposition of penalty bids. The selling stockholders and any other person
participating in such distribution will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder including, without
limitation, Regulation M (which regulation may limit the timing of purchases and
sales of any of the shares of common stock by the selling stockholders and any
other such person). The anti-manipulation rules under the Exchange Act may
apply to sales of shares of common stock in the market and to the activities of
the selling stockholders and their affiliates. Furthermore, Regulation M of the
Exchange Act may restrict the ability of any person engaged in the distribution
of the shares of common stock to engage in market-making activities with respect
to the particular shares of common stock being distributed for a period of up to
five business days prior to the commencement of such distribution. All of the
foregoing may affect the marketability of the shares of common stock and the
ability of any person or entity to engage in market-making activities with
respect to the shares of common stock.
Rules 101 and 102 of Regulation M under the Exchange Act, among other
things, generally prohibit certain participants in a distribution from bidding
for or purchasing for an account in which the participant has a beneficial
interest, any of the securities that are the subject of the distribution. Rule
104 of Regulation M governs bids and purchases made to stabilize the price of a
security in connection with a distribution of the security.
Hedging and Other Certain Transactions with Broker-Dealers. In connection
with distributions of the shares of common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in short sales of
the shares of common stock registered hereunder in the course of hedging the
positions they assume with selling stockholders. The selling stockholders may
also sell shares of common stock short and redeliver the shares of common stock
to close out such short positions. The selling stockholders may also enter into
option or other transactions with broker-dealers which require the delivery to
the broker-dealer of the shares of common stock registered hereunder, which the
broker-dealer may resell or otherwise transfer pursuant to this prospectus.
Selling stockholders may also loan or pledge the shares of common stock
registered hereunder to a broker-dealer and the broker-dealer may sell the
shares of common stock so loaned or, upon a default, the broker-dealer may
effect sales of the pledged shares of common stock pursuant to this prospectus.
Expenses Associated With Registration. We have agreed to pay the expenses of
registering the shares of common stock under the Securities Act, including
registration and filing fees, printing expenses, administrative expenses and
certain legal and accounting fees. Each of the selling stockholders will bear
its pro rata share of all discounts, commissions or other amounts payable to
underwriters, dealers or agents as well as fees and disbursements for legal
counsel retained by any such selling stockholder.
Indemnification. Under the terms of the Agreement, we have agreed to
indemnify each of the parties to the agreements and certain other persons
against certain liabilities in connection with the offering of the shares of
common stock, including liabilities arising under the Securities Act.
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Prospectus Updates; Suspension of this Offering. At any time a particular
offer of the shares of common stock is made, a revised prospectus or prospectus
supplement, if required, will be distributed. Such prospectus supplement or
post-effective amendment will be filed with the SEC to reflect the disclosure of
required additional information with respect to the distribution of the shares
of common stock. Under the terms of the Agreement, upon the occurrence of any
event known to our executive officers as a result of which this prospectus is
known by our executive officers to include an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing, the parties have each agreed not to trade shares of
common stock from the time the selling stockholder receives notice from Corel of
such an event until such party receives a prospectus supplement or amendment.
Upon the occurrence of such an event, a prospectus supplement or post-effective
amendment, if required, will be distributed to the parties.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934 and, in accordance therewith, we file reports and other information
with the Securities and Exchange Commission. Reports, registration statements,
proxy and information statements, and other information that we have filed can
be inspected and copied at the public reference facilities maintained by the SEC
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the
regional offices of the SEC located at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite 1300,
New York, New York 10048. You may obtain copies of such material from the
Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549 at rates prescribed by the SEC. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains a World Wide Web site that contains reports, proxy and
information statements, and other information that is filed electronically with
the SEC. This Web site can be accessed at http://www.sec.gov. Our common stock
is listed on The Nasdaq Stock Market and reports, proxy statements and other
information concerning Corel may be inspected at the offices of The National
Association of Securities Dealers, Inc., 9513 Key West Avenue, Rockville,
Maryland 20850.
We have filed with the SEC a registration statement on Form S-3 (together
with all amendments and exhibits thereto, the "Registration Statement") under
the Securities Act with respect to the common stock offered hereby. This
prospectus does not contain all of the information set forth in the Registration
Statement and its exhibits and schedules, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. For further information
with respect to us and our common stock, please refer to the Registration
Statement and its exhibits and schedules. Statements contained in this
prospectus as to the contents of any contract or other document are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or document filed as an exhibit to the Registration Statement.
Each such statement is qualified in all respects by such reference. Copies of
the Registration Statement, including exhibits thereto, may be inspected without
charge at the SEC's principal office in Washington, D.C., and you may obtain
copies from this office upon payment of the fees prescribed by the SEC.
We will furnish without charge to each person, including any beneficial
owner, to whom a copy of this prospectus is delivered, upon such person's
written or oral request, a copy of any and all of the information that has been
incorporated by reference into this prospectus (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference
herein as well). Requests for such copies should be directed to John Hladkowicz
at (613)-728-8200 ext. 4500, or by mail at 1600 Carling Avenue, Ottawa, Ontario,
Canada, K1Z 8R7.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents that we have filed with the SEC are incorporated by
reference into this prospectus:
(a) the Registration Statement and the exhibits and schedules filed
therewith;
(b) our annual report on Form 10-K for the fiscal year ended November 30,
1998;
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(c) all other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since November 30, 1998, including: (1) our quarterly
report on Form 10-Q for the fiscal quarter ended February 28, 1999;
(2) our quarterly report on Form 10-Q for the fiscal quarter ended May
31, 1999; and (3) Form 8-K filed in February 1999 relating to the
adoption of our shareholder rights plan on February 11, 1999.
(d) all other information that we file with the SEC 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 this offering.
Any statement incorporated herein shall be deemed to be modified or
superseded for the purposes of this prospectus and the Registration Statement to
the extent that a statement contained herein or in any other subsequently filed
document that is or is 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 and the Registration Statement.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered hereby will
be passed upon for us by Eric Smith, our general counsel. Mr. Smith
beneficially owns options to acquire 17,911 shares all of which are vested.
EXPERTS
The Consolidated Financial Statements of the Company included or incorporated
by reference in this Prospectus and elsewhere in this Registration Statement to
the extent and for the periods indicated in their reports have been audited by
PricewaterhouseCoopers LLP for 1998 and KPMG LLP for 1996 to 1997, both are
independent chartered accountants, and are included or incorporated herein in
reliance upon the authority of the said firms as experts in giving said reports.
9
<PAGE>
================================================================================
COREL CORPORATION
1,000,000 Shares of Common Stock
____________________
PROSPECTUS
____________________
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Registrant in connection with this
offering are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee $ 1,276
Accounting fees and expenses 10,000
Legal fees and expenses 10,000
Miscellaneous 724
-------
Total $22,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 124(1) of the Canada Business Corporations Act provides that except in
respect of an action by or on behalf of the corporation or body corporate to
procure a judgment in its favour, a corporation may indemnify a director or
officer of the corporation, a former director or officer of the corporation or a
person who acts or acted at the corporation's request as a director or officer
of a body corporate of which the corporation is or was a shareholder or
creditor, and his heirs and legal representatives, against all costs, charges
and expenses, including an amount paid to settle an action or satisfy a
judgment, reasonably incurred by him in respect or any civil, criminal or
administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of such corporation or body
corporate, if (a) he acted honestly and in good faith with a view to the best
interests of the corporation; and (b) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, he
had reasonable grounds for believing that his conduct was lawful.
Section 7.02 of COREL's By-law No. 6, provides as follows:
Section 7.02 Indemnity - Subject to the limitations contained in the
Act, the Corporation shall indemnify a director or officer, a former
director or officer, or a person who acts or acted at the Corporation's
request as a director or officer of a body corporate of which the
Corporation is or was a shareholder or creditor, and his heirs and legal
representatives, against all costs, charges and expenses, including an
amount paid to settle an action or satisfy a judgment, reasonable
incurred by him in respect or any civil, criminal or administrative
action or proceeding to which he is made a party by reason of being or
having been a director or officer of such Corporation or body corporate,
if (a) he acted honestly and in good faith with a view to the best
interests of the Corporation; and (b) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary
penalty, he had reasonable grounds for believing that his conduct was
lawful.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference herein:
5.1 -- Opinion of Counsel regarding the legality of common stock.
23.1 -- Independent Auditors' Consent.
23.2 -- Consent of Counsel (included in Exhibit 5.1).
24.1 -- Power of Attorney (see page II-3).
- ----------------------
ITEM 17. UNDERTAKINGS.
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 provisions described under Item 15 above, 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-1
<PAGE>
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933 (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 in the Registration Statement; and (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 (i) and
(ii) do not apply if the information required to be included in a post-effective
amendment thereby is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
(the "Exchange Act") that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all for 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 Ottawa, Province of Ontario, Canada, on the 28th day of July, 1999.
COREL CORPORATION
By: /s/ Michael C.J. Cowpland
------------------------------
Michael C.J. Cowpland
Chairman, President, Chief Executive Officer
and Director
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS that each individual whose signature appears below
constitutes and appoints Michael C.J. Cowpland and Michael P. O'Reilly, and each
of them, his attorneys-in-fact, and agents, each with the power of substitution,
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 to sign any registration statement for the same offering covered
by this Registration Statement that is to be effective upon filing pursuant to
Rule 462(b) promulgated under the Securities Act of 1933, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all
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 his or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael C.J. Cowpland Chairman, President, Chief Executive July 28, 1999
- ------------------------
Michael C.J. Cowpland Officer and Director
/s/ Lyle B. Blair Director July 27, 1999
- ------------------------
Lyle B. Blair
/s/ William G. Davis Director July 26, 1999
- ------------------------
William G. Davis
/s/ Hunter S. Grant Director July 26, 1999
- ------------------------
Hunter S. Grant
________________________ Director
Jean-Louis Malouin
________________________ Director
Barbara McDougall
/s/ Michael P. O'Reilly Executive Vice President Finance; Chief July 28, 1999
- ------------------------
Michael P. O'Reilly Financial Officer and Treasurer
(principal financial and accounting
officer)
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Exhibit Title
- ---- -------------
5.1 Opinion of Counsel regarding the legality of common stock
23.1 Independent Auditors' Consent
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (see page II-3)
<PAGE>
EXHIBIT 5.1
OPINION OF COUNSEL REGARDING LEGALITY OF COMMON STOCK
July 28, 1999
Corel Corporation
1600 Carling Avenue
Ottawa, Ontario
Canada K1Z8R7
Gentlemen/Ladies:
At your request, I have examined the Registration Statement on Form S-3
(the "Registration Statement") to be filed by Corel Corporation ("you" or the
"Company") with the Securities and Exchange Commission (the "Commission") on or
about July 28, 1999 in connection with the registration under the Securities Act
of 1933, as amended, of an aggregate of 1,000,000 common shares (the "Stock"),
issued pursuant to the agreement described in the Registration Statement and
held by the persons named in the Registration Statement as selling stockholders
(the "Selling Stockholders").
In rendering this opinion, I have made such investigations of law and
have examined such matters of fact as I have deemed necessary or appropriate
for the purpose of rendering the opinions provided herein, including without
limitation the following:
(1) the Registration Statement, together with the Exhibits filed as
a part thereof;
(2) the Prospectus prepared in connection with the Registration
Statement;
(3) minutes of meetings and actions by written consent of the Board
of Directors; and
(4) the agreement referenced in the Registration Statement under the
caption "Selling Stockholders."
In my examination of documents for purposes of this opinion, I have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted
to me as originals, the conformity to originals and completeness of all
documents submitted to me as copies, the legal capacity of all natural persons
executing the same, the lack of any undisclosed terminations, modifications,
waivers or amendments to any documents reviewed by me and the due authorization,
execution and delivery of all documents where due authorization, execution and
delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, I have relied upon my
examination of the documents referred to above and have assumed the current
accuracy and completeness
<PAGE>
of the information obtained from public officials and records. I have made no
independent investigation or other attempt to verify the accuracy of any of such
information or to determine the existence or non-existence of any other factual
matters; however, I am not aware of any facts that would cause me to believe
that the opinion expressed herein is not accurate.
Based upon the foregoing, it is my opinion that the outstanding shares
of Stock to be sold by the Selling Stockholders pursuant to the Registration
Statement are legally issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to me, if any, in the
Registration Statement, the Prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and I assume no obligation to
update this opinion should circumstances change after the date hereof. This
opinion is intended solely for your use as an exhibit to the Registration
Statement for the purpose of the above sale of the Stock and is not to be relied
upon for any other purpose.
Very truly yours,
By: /s/ ERIC J. SMITH
-----------------------
Eric J. Smith
Corporate Counsel & Secretary
for Corel Corporation
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 8, 1999 relating to the
financial statements which appear in Corel Corporation's Annual Report on Form
10-K for the year ended November 30, 1998. We also consent to the reference to
us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Chartered Accountants
Ottawa, Canada
July 29, 1999
We consent to incorporation by reference in the Registration Statement on
Form S-3 of Corel Corporation of our report dated January 16, 1998, except as to
Note 12, which is at February 23, 1998, relating to the consolidated balance
sheet of Corel Corporation as of November 30, 1997 and the related consolidated
statements of operations, retained earnings (deficit) and changes in financial
position for each of the years in the two-year period ended November 30, 1997,
which report appears in the November 30, 1998 annual report on Form 10-K of
Corel Corporation.
/s/ KPMG LLP
Chartered Accountants
Ottawa, Canada
July 29, 1999
