As filed with the Securities and Exchange Commission on July 2, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT 0F 1933
INNODATA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3475943
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
THREE UNIVERSITY PLAZA, HACKENSACK, NEW JERSEY 07601
(Address of principal executive offices)
1998 STOCK OPTION PLAN
(Full Title of Plan)
MARTIN KAYE, EXECUTIVE VICE PRESIDENT
95 ROCKWELL PLACE, BROOKLYN, NEW YORK 11217
(Name and address of agent for service)
(718) 522-0222
(Telephone number, including area code, of agent for service)
Copies of all Communications to: Oscar D. Folger, Esq.
521 Fifth Avenue
New York, New York 10175
(212) 697-6464
CALCULATION OF REGISTRATION FEE
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TITLE OF PROPOSED PROPOSED
SECURITIES AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED (1) PER SHARE (2) OFFERING PRICE (2) FEE
- ----------------------------- -------------- -------------- ------------------ ------------
Common Stock, $.01 par value 300,000 shares $11.66 $3,498,000 $972.45
</TABLE>
(1) The Registration Statement also includes an undeterminable number of
additional shares that may become issuable pursuant to anti-dilution provisions
of the Plan.
(2) Estimated for purposes of computing the registration fee pursuant to
Rule 457(c) based upon the average of the high and low prices of the Common
Stock as reported by Nasdaq on June 28, 1999.
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PROSPECTUS
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INNODATA CORPORATION
____________________
300,000 Shares of Common Stock
____________________
This Prospectus relates to 300,000 shares of Common Stock, $.01 par value,
(the "Shares") are issuable pursuant to the 1998 Stock Option Plan (the "Plan")
of Innodata Corporation (the "Company"). Any shares which are offered will be
offered for the respective accounts of the Selling Shareholders. This Prospectus
does not relate to the sale or issuance by the Company of any securities. The
Company will not receive any proceeds from the sale of the Shares by the Selling
Shareholders. The Company will receive proceeds at the respective exercise
prices upon exercise of the options.
The Company has been advised by the Selling Shareholders that there are no
underwriting arrangements with respect to the sale of the Shares, that the
Shares will be sold from time to time in brokerage transactions at then
prevailing prices and in private transactions at negotiated prices, and that
usual and customary brokerage fees will be paid by the Selling Shareholders in
connection therewith.
Our Common Stock is traded on the Nasdaq SmallCap Market under the symbol
INOD. On June 28, 1999 the closing price for the Company's Common Stock as
reported by Nasdaq was $12.00 per share.
____________________
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS
____________________
YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY BEFORE YOU MAKE YOUR INVESTMENT
DECISION. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM
THAT CONTAINED IN THIS PROSPECTUS. THE SELLING SECURITY HOLDERS ARE OFFERING TO
SELL, AND SEEKING OFFERS TO BUY, SHARES OF TRACK DATA CORPORATION COMMON STOCK
ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION
CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS,
REGARDLESS OF THE TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE
SHARES.
____________________
THE SEC AND STATE REGULATORY AUTHORITIES HAVE NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE PRICE TO PUBLIC, UNDERWRITING DISCOUNTS AND COMMISSIONS AND PROCEEDS TO
SELLING SHAREHOLDERS ARE NOT DETERMINABLE AT THIS TIME.
THE DATE OF THIS PROSPECTUS IS JULY 2, 1999
<PAGE>
THE COMPANY
INNODATA CORPORATION (the "Company") was incorporated in Delaware in June
1988, maintains its executive offices in Hackensack, New Jersey and employs a
work force in other locations in the U.S. and approximately 3,000 persons in the
Philippines, India and Sri Lanka. The Company is a leading provider of Internet
and on-line publishing services, providing all the necessary steps for product
development and data capture and conversion to enable its customers to publish
vast amounts of information both on-line and via the Internet. Innodata's
customers represent an array of major secondary electronic publishers of legal,
scientific, educational, and medical information, as well as document-intensive
companies repurposing their proprietary information into electronic resources
that can be referenced via web-centric applications.
The Company also provides imaging and scanning conversion services
assisting companies in CAD and imaging applications. It supports the latest in
state-of-the-art equipment from high-end document scanners to large format and
film scanners. Capabilities include the scanning and indexing of all different
types of business documents, technical manuals, engineering drawings, 35mm
aperture cards and microfilm.
The executive offices of the Company are located at Three University Plaza,
Hackensack, New Jersey 07601. Its telephone number is 201-488-1200. Its
operations in the Philippines are conducted at 2900 Faraday Street in Manila,
and at Fuente Osmena, Cebu City, in Cebu. The Company's facilities in Manila
are accessible by calling its New Jersey offices, 201-488-1200, Ext. 5551.
<PAGE>
RISK FACTORS
An investment in the offered shares involves a high degree of risk. Prospective
investors should understand that they may lose their investment and should
consider carefully the following risk factors in making their investment
decision. This prospectus contains and incorporates by reference forward-looking
statements which are intended to fall within the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Examples include the
discussion under "Business" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Form 10-K for the year
ended December 31, 1998. These statements are based on current expectations that
involve a number of uncertainties including those set forth in the following
risk factors. Actual results could differ materially from those results
projected in these forward-looking statements.
We Rely on Operations Conducted Primarily in Foreign Countries.
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Most of our operations take place in the Philippines, India and Sri Lanka.
The majority of our fixed assets are at these locations. We are subject to
risks associated with foreign operations in general, including political or
economic instability or disruptions, foreign regulatory approval requirements,
embargoes, transportation delays and trade restrictions, all of which could
materially adversely affect our operations and financial condition, or could
have a significant adverse impact on our ability to perform and deliver services
on a competitive and timely basis.
While the political situation currently appears to be stable, our
operations may be adversely affected by political instability in the foreign
locations in which we operate. Political instability could also change the
current satisfactory legal environment for us through the imposition of
restrictions on foreign ownership, repatriation of funds, adverse labor laws,
and the like.
We Are Subject to Risks of Power Failures and Natural Disasters in Foreign
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Countries.
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Frequent power outages occur in the Philippines and India which have lasted
for as long as eight hours per day. Our facilities are equipped with standby
generators to produce electric power during such power failures but the general
impact of such power failures outside our offices may still be very disruptive
to our overall operations. There can be no assurance that municipal power
production capacity will not remain adequate, or deteriorate further, with the
result that our operations could be adversely affected. The Philippines is
subject to relatively frequent earthquakes, volcanic eruptions, floods and other
natural disasters, which may disrupt our operations.
We Are Subject to Risks of Currency Fluctuation and Inflation.
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We fund our foreign operations through the transfer of dollars from the
United States. We generally remit funds to our foreign operations only as
needed and do not maintain any significant amount of funds or monetary assets in
those countries. Inflation without corresponding devaluation of foreign
currencies against the dollar, or any other increase in value of foreign
currency relative to the dollar, may have a material adverse effect on our
operations and financial condition.
We May Be Adversely Affected If We Or Our Vendors Are Not Year 2000 Compliant.
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We rely on certain hardware, software and operating systems (collectively,
"Systems") for production, financial reporting and general administration. We
have been evaluating these Systems to identify potential Year 2000 compliance
problems and have been planning appropriate remedial efforts and testing, where
required. In addition, we have been evaluating our external interfaces with
customers and service suppliers to coordinate Year 2000 compliance. Achieving
Year 2000 compliance is dependent upon many factors, some of which are not
completely within our control. Should either one or more of our critical
Systems components or one or more of our critical vendors, including those
vendors providing services in foreign countries in which we operate, fail to
achieve Year 2000 compliance, our business and results of operations could be
adversely affected.
We Rely On Certain Customers For A Large Portion of Our Business.
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During the first quarter of 1999 and 1998, one customer that is comprised
of twelve affiliated companies, accounted for 11% and 21% of the Company's
Internet and on-line data conversion and content management services revenues,
respectively. One other customer accounted for 25% of such revenues in 1999.
During 1998, 1997 and 1996, one customer that is comprised of twelve affiliated
companies, accounted for 21%, 16% and 28% of our Internet and on-line publishing
services revenues, respectively. One other customer accounted for 13%, 10% and
10% of such revenues in 1998, 1997 and 1996, respectively. No other customer
accounted for 10% or more of such revenues.
During the first quarter of 1999 four customers accounted for 27%, 17%, 15%
and 10% of our document imaging service revenues, respectively. During the same
period in 1998, five other customers accounted for 25%, 19%, 12%, 11% and 10% of
such revenues. During 1998, 1997 and 1996 one customer accounted for 53%,
11% and 12% of our imaging and scanning conversion service revenues,
respectively. The Company has no present arrangements with this customer for
1999. Another customer accounted for 10% and 12% of such revenues in 1997 and
1996. No other customer accounted for 10% or more of such revenues.
If any of such customers were to discontinue employing the Company's
services, there could be an adverse affect on the Company's business.
We Have Substantial Competition.
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Internet and On-Line Data Conversion and Content Management Services
Our ability to compete favorably is, in significant part, dependent upon
our ability to control costs, react swiftly and appropriately to short and
long-term trends, harness technology and competitively price our services. Firms
compete based on quality, speed, accuracy, and "customer intimacy," as well as
on the relative ability to accomplish massive and complex data conversions
economically. Major competitors include: for document and information
outsourcing, F.Y.I. Inc. and Lason Inc.; for data conversion services, Saztec
Philippines, Inc., Access Innovations, Inc., APEX Data Services, Inc. and Jouve
S.A.; for SGML/XML and related consulting services, Database Publishing Systems
Ltd. and KPMG Consulting. We may also be considered in competition with
customers' and potential customers' in-house personnel who may attempt to
duplicate our services.
Document Imaging Services
Our scanning conversion services division competes with numerous companies
that may have substantially greater financial, technical, and other resources
than us. Firms compete based on price, geographic location, quality, and speed
of turn-around, as well as on the size of project and the complexity and level
of work that they can perform on an economic basis. Major national competitors
include Lason Inc. and IKON Office Solutions Inc. We may also be considered in
competition with customers' and potential customers' in-house personnel who may
attempt to duplicate our services.
We Have Broad Discretion in Use of Proceeds.
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Management has designated the proceeds from the exercise of options to be
used for general corporate and working capital purposes. We have not made any
specific allocations as to the use of any such proceeds. As a result of the
foregoing, any return on investment to investors will be substantially dependent
upon the discretion and judgment of our management with respect to the
application of the net proceeds of the offering.
Sale of Shares Eligible for Future Sale Could Adversely Affect Our Stock Price.
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394,730 shares of our presently outstanding Common Stock may be deemed
"restricted securities," and may not be sold except in compliance with Rule 144
under the Securities Act. Rule 144 generally provides that a person holding
restricted securities for a period of one year may publicly sell in brokerage
transactions an amount equal to 1% of the Company's outstanding Common Stock
every three months or, if greater, a percentage of the shares publicly traded
during a designated period. All of such shares are currently eligible for sale
under Rule 144.
Our Right To Issue Preferred Stock Could Make A Third-Party Acquisition Of Us
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Difficult.
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Certain provisions of the Delaware General Corporation Law may delay,
discourage or prevent a change in control. These provisions may discourage bids
for our Common Stock at a premium over the market price and may adversely affect
the market price and the voting and other rights of the holders of our common
stock. In addition, our governing documents authorize the issuance of up to one
million shares of preferred stock without stockholder approval, with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of our Common Stock. In the event
of issuance, the preferred stock could be utilized, under certain circumstances,
as a method of discouraging, delaying or preventing a change in control of the
Company. Although we have no present intention to issue any shares of preferred
stock, there can be no assurance that we will not do so in the future.
Depending on the designations, rights and preferences of a particular issuance
of preferred stock, such issuance could adversely affect the market value of the
Company's Common Stock.
We Have Certain Requirements For Continued Listing of Our Common Stock or
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Nasdaq; Penny Stock Rules.
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While the Common Stock is presently listed on the Nasdaq SmallCap Market,
there can be no assurance that we will continue to meet the maintenance criteria
for continued listing of our securities on Nasdaq. These continued listing
criteria include, among other things, $2,000,000 in net tangible assets, a
public float of 500,000 shares with a market value equal to $1,000,000 held by
at least 300 stockholders, two market makers and a minimum bid price of $1.00
per share of common stock. There can be no assurance that we will continue to
satisfy these criteria. If we are became unable to meet the continued listing
criteria of the Nasdaq SmallCap Market and became delisted therefrom, trading,
if any, in our Common Stock would thereafter have to be conducted in the
so-called "pink sheets" or, if then available, the Nasdaq "Electronic Bulletin
Board". As a result, an investor would find it more difficult to dispose of,
and to obtain accurate quotations as to the value of the Common Stock.
In addition, if the Company fails to maintain a Nasdaq SmallCap Market
listing for its securities, and no other exclusion from the definition of a
"penny stock" under the Exchange Act is available, then any broker engaging in a
transaction in our securities would be required to provide any customer with a
risk disclosure document, disclosure of market quotations, if any, disclosure of
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market values of the Company's securities
held in the customer's accounts. The bid and offer quotation and compensation
information must be provided prior to effecting the transaction and must be
contained on the customer's confirmation. If brokers become subject to the
"penny stock" rules when engaging in transactions in the Company's securities,
they would become less willing to engage in such transactions, thereby making it
more difficult for purchasers in this offering to dispose of their shares.
Our Directors' Liability For Their Actions is Limited and We May Indemnify Them
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If They Are Sued.
- -----------------
Our governing documents limit the liability of our directors for breach of
their fiduciary duty of care. The effect is to eliminate liability of directors
for monetary damages arising out of negligent or grossly negligent conduct.
Stockholder actions against a director of our Company for monetary damages can
only be maintained upon a showing of a breach of the individual director's duty
of loyalty to the Company, a failure to act in good faith, intentional
misconduct, a knowing violation of the law, an improper personal benefit, or an
illegal dividend or stock purchase, and not for such director's negligence or
gross negligence in satisfying his duty of care. These documents also provide
for indemnification as permitted by Delaware law. However, insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling our Company pursuant to
the foregoing provisions, we have been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
It Is Unlikely That We Will Pay Dividends.
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We have not paid any cash dividends since our inception and do not
anticipate paying any cash dividends in the foreseeable future. There can be no
assurance that our operations will result in sufficient earnings to enable us to
pay dividends. It is anticipated that earnings, if any, will be used to finance
our growth.
USE OF PROCEEDS
Management has designated the proceeds from options to be issued and, if
exercised, to be used for general corporate and working capital purposes and
they may be expended at the discretion of the Company's management. We have not
made any specific allocations as to the use of any such proceeds.
We may, when and if the opportunity arises, acquire other businesses which
are in some manner related to our business. If such an opportunity arises, we
may use a portion of these funds for that purpose. We have no specific
arrangements with respect to any such acquisition at the present time and are
not presently involved in any negotiations with respect to any such acquisition.
There can be no assurance that any acquisition will be made.
Prior to expenditure, the net proceeds will be invested in short-term,
interest bearing securities or money market funds. We do not require that any
specific minimum investment criteria be used in selecting such short-term
investments, but will select such investments as it deems appropriate, taking
into consideration such factors as liquidity, return on and safety of
investments.
MATERIAL DEVELOPMENTS
Since the Company's most recent filing of its Quarterly Report on Form
10-QSB for the quarter ended March 31, 1999, no material developments have
occurred.
<PAGE>
SELLING SHAREHOLDERS
The securities covered by the Plan and Options not granted pursuant to any
Plan are being offered on behalf of a number of employees, officers, directors
and consultants of the Company. The list below sets forth the current officers
and directors on whose behalf securities are being offered hereby. Unless
otherwise indicated, the addresses for all of the Selling Shareholders is 95
Rockwell Place, Brooklyn, New York 11217.
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SECURITIES SECURITIES
OWNED SECURITIES OWNED
BEFORE TO BE AFTER
NAME AND ADDRESS OFFERING (1) SOLD (1) OFFERING (4)
Barry Hertz (2) 217,548 -0- 217,548
Todd Solomon 179,982 -0- 179,982
Jack Abuhoff 9,000 -0- 9,000
Martin Kaye 3,333 -0- 3,333
Stephen Agress 1,000 -0- 1,000
E. Bruce Fredrikson
Syracuse University
School of Management
Syracuse, NY 13244 3,333 -0- 3,333
Dr. Albert Drillick (3) 4,153 -0- 4,153
Morton Mackof (3) 4,153 -0- 4,153
Stan Stern (3) 1,578 -0- 1,578
</TABLE>
(1) No options have been granted to date under the 1998 Stock Option Plan.
Does not include presently exercisable options to purchase the Company's Common
Stock pursuant to other Stock Option Plans, or other exercisable options held.
(2) Includes 214,748 shares owned by Track Data Corporation, of which Mr.
Hertz is the majority stockholder and 2,800 shares held in a pension plan for
the benefit of Mr. Hertz.
(3) Consists of shares held in the Track Data Phantom Unit Trust to be
released upon termination of association with the Company or Track Data
Corporation, or earlier with approval of the Track Data Board of Directors.
(4) The percentage of securities owned after offering, assuming no sales
other than by the respective individuals, is 14.6% and 12.1% for Messrs. Hertz
and Solomon, respectively.
<PAGE>
PLAN OF DISTRIBUTION
The shares are being offered for the respective accounts of the Selling
Shareholders. The Company will not receive any proceeds from the sale of any
Shares by the Selling Shareholders. The Company will receive proceeds from the
exercise prices of any options which are exercised by the Selling Shareholders.
The sale of Shares by the Selling Shareholders may be effected from time to
time in brokerage transactions, in negotiated transactions, through the writing
of options on the Shares, or through a combination of such methods of sale, at
fixed prices, which may be charged at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Shareholders may effect such transactions by selling the
Shares to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders and/or the purchasers of the Shares for which such
broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer may be in excess of
customary compensation).
The Selling Shareholders and any broker-dealers who act in connection with
the sale of the shareholders hereunder may be deemed to be "underwriters" within
the meaning of section 2(11) of the Securities Act, and any commissions received
by them and profit on any sale of the Shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-KSB for the years ended
December 31, 1998 and 1997 have been audited by Grant Thornton LLP, independent
certified public accountants, and as to the year ended December 31, 1996 by
Margolin, Winer & Evens LLP, as stated in their reports, which are incorporated
herein by reference, and have been so incorporated in reliance upon the reports
of such firms given upon their authority as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the validity of the securities
offered by this Prospectus will be passed on for the Company by Oscar D. Folger,
Esq., New York, New York. Mr. Folger's wife owns 29,813 shares of the Common
Stock of the Company, and Mr. Folger's pension plan, of which he is a trustee
and principal beneficiary, owns 11,347 shares of Common Stock.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents are incorporated in this Prospectus and made a part
hereof by reference:
1. The Company's report on Form 10-KSB for the year ended December 31, 1998,
filed with the Commission pursuant to Section 13 of the Securities Exchange Act
of 1934.
2. The Company's report on Form 10-QSB for the year ended March 31, 1999,
filed with the Commission pursuant to Section 13 of the Securities Exchange Act
of 1934.
3. The section entitled "Description of Common Stock" contained in
Post-Effective Amendment No. 1 to the Company's Registration Statement No.
33-62012 on Form SB-2 filed with the Commission, under the Securities Act of
1933, and effective as of June 21, 1994.
In addition, all reports, proxy statements and other documents of the
Company hereafter filed with the Commission pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, prior to the termination of
the offering of the securities covered by this Prospectus or the filing of a
post-effective amendment which indicates that all securities have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated in this Prospectus and made a part hereof by reference from the
date of filing each such document. Any statement contained in an earlier
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.
LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS
Our Certificate of Incorporation includes a provision that eliminates or
limits the personal financial liability of the Company's directors, except in
situations where there has been a breach of the director's duty of loyalty to
the Company or our stockholders, acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, liability under
Section 174 of the Delaware General Corporation Law relative to unlawful payment
of dividends, stock purchases or redemptions, or any transaction from which the
director derived an improper personal benefit. In addition, under our
Certificate of Incorporation and By-Laws as well as under separate agreements,
we are required to indemnify our officers and directors to the fullest extent
permitted by law.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, we have been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
documents with the SEC. You may read and copy any document we file at the SEC's
public reference room at Judiciary Plaza Building, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. You should call 1-800-SEC-0330 for more
information on the public reference room. The SEC maintains an Internet site at
http://www.sec.gov where certain information regarding issuers, including
Innodata Corporation, may be found. This prospectus is part of a registration
statement that we filed with the SEC, registration No. 333-________. The
registration statement contains more information than this prospectus regarding
the Company and its common stock, including certain exhibits and schedules. You
can get a copy of the registration statement from the SEC at the address listed
above or from its Internet site.
<PAGE>
INNODATA CORPORATION
300,000 SHARES OF COMMON STOCK
--------------------
PROSPECTUS
--------------------
July 2, 1999
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY
SECURITIES IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. 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.
<PAGE>
II-6
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
--------------------------------------------
See "Incorporation of Certain Information by Reference."
ITEM 4. Description of Securities.
----------------------------
Not Applicable.
ITEM 5. Interests of Named Experts and Counsel.
--------------------------------------------
See "Legal Matters."
ITEM 6. Indemnification of Directors and Officers.
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The Company has entered into agreements with each director in which the
Company agrees to indemnify each director and officer to the maximum extent
permitted by law.
The Company's Certificate of Incorporation provides that all directors,
officers, employees and agents of the Registrant shall be entitled to be
indemnified by the Company to the fullest extent permitted by law. The
Certificate of Incorporation also provides as follows:
A director, or former director, shall not be liable to the corporation or
to any of its stockholders for monetary damages for breach of fiduciary duty as
a director, provided that this provision shall not eliminate or limit the
liability of a director: (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders; (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) under Section 174 of the General Corporation Law of the State of Delaware,
pertaining to the liability of directors for unlawful payment of dividends or
unlawful stock purchase or redemption; or (iv) for any transaction from which
the director derived an improper personal benefit.
Section 145 of the Delaware General Corporation Law concerning
indemnification of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and
agents; insurance.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
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. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which 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 reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such persons shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer, to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, (the "Securities Act") may be permitted to directors,
officers, and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company 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 Company of expenses incurred or paid by a director, officer
or controlling person of the Company 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 Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to the 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.
ITEM 7. Exemption from Registration Claimed. Not Applicable.
---------------------------------------
ITEM 8. Exhibits.
---------
(5) Opinion of Oscar D. Folger as to legality
(24) (a) Consent of Oscar D. Folger (included in Exhibit 5)
(24) (b) Consent of Grant Thornton LLP
(24) (c) Consent of Margolin, Winer & Evens LLP
(28) Form of 1998 Stock Option Plan (1)
(1) Incorporated by reference to the Company's Proxy Statement for its
Annual Meeting of Stockholders on November 5, 1998.
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 of this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii) To include any additional or changed material information on the
plan of distribution.
Provided, however, that paragraphs (A)(i) and (ii) do not apply if the
registration statement is on Form S-3, or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference 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.
D. The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of
Registrant's annual report pursuant to Section 13(a) or 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 Securities Exchange Act of
1934) that is 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.
E. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registant pursuant to any charter provisions, by-laws, contract,
arrangements, statute 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 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 with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by a controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<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-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, State of New York on the 29th day of June
1999.
INNODATA CORPORATION
By /s/
-------------
Barry Hertz
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date stated.
Signature Title Date
- ----------------------- ---------------------------------- -------------
/s/ Chairman of the Board June 29, 1999
- -----------------------
Barry Hertz
/s/ Vice Chairman of the Board June 29, 1999
- -----------------------
Todd Solomon
/s/ President, Chief Executive June 29, 1999
- ----------------------- Officer and Director
Jack Abuhoff
/s/ Executive Vice President (Principal June 29, 1999
- ----------------------- Financial Officer) and Director
Martin Kaye
/s/ Director June 29, 1999
- -----------------------
Dr. Albert Drillick
/s/ Director June 29, 1999
- -----------------------
Dr. E. Bruce Fredrikson
/s/ Director June 29, 1999
- -----------------------
Morton Mackof
/s/ Director June 29, 1999
- -----------------------
Stanley Stern
EXHIBIT 24(a)
LAWYERS OPINION AND CONSENT
We have acted as counsel to Innodata Corporation, a Delaware corporation (the
"Company") in connection with the registration by the Company of 300,000 shares
of its common stock, $.01 par value (the "Shares") which are issuable under the
Company's 1998 Stock Option Plan (the "Plan"). All of the Shares are the
subject of a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Act"). As counsel to the Company we have examined and
relied upon the original or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records and other instruments as we
have deemed necessary in order to render the following opinion.
Based upon the foregoing, we are of the opinion that the Shares to be issued by
the Company pursuant to the Plan and Options are duly authorized and, when
issued and paid for in accordance with the Plan as described in the Registration
Statement, will be validly issued, fully paid and nonassessable.
We are aware that we are referred to under the caption "Legal Matters" in the
Reoffer Prospectus included in the Registration Statement and we hereby consent
to such reference to us and to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving such consent, however, we do not hereby imply
or admit that we are within the category of persons whose consent is required
under Section 7 of the Act or under the General Rules and Regulations of the
Securities and Exchange Commission adopted thereunder.
Oscar D. Folger
Law Offices of Oscar D. Folger
New York, New York
June 29, 1999
EXHIBIT 24(b)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 25, 1999 accompanying the consolidated
financial statements of Innodata Corporation and subsidiaries appearing in the
1998 Annual Report of the Company to its shareholders included in the Annual
Report on Form 10-K for the year ended December 31, 1998 which is incorporated
by reference in this Registration Statement. We consent to the incorporation by
reference in the Registration Statement of the aforementioned report and to the
use of our name as it appears under the caption "Experts."
GRANT THORNTON LLP
New York, New York
June 25, 1999
EXHIBIT 24(c)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement
of Innodata Corporation on Form S-8 of our report dated March 14, 1997,
appearing in the Annual Report on Form 10-KSB of Innodata Corporation for the
year ended December 31, 1998 and to the reference to our firm under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
MARGOLIN, WINER & EVENS LLP
Garden City, New York
June 25, 1999
