<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
/x/ Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee Required)
/ / Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No Fee Required)
For the fiscal year ended July 31, 1996 Commission File Number 1-6528
Wallace Computer Services, Inc.
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-2515832
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2275 Cabot Drive Lisle, Illinois 60532
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (630) 588-5000
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, $1.00 par value New York Stock Exchange
Series A Preferred Stock New York Stock Exchange
Purchase Rights
Securities registered pursuant to Section 12(g) of the Act: None
----
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. X Yes No
----- -----
State the aggregate market value of the voting stock held by nonaffiliates of
the registrant.
$1,246,972,355 (BASED ON THE OCTOBER 15, 1996, CLOSING PRICE OF THESE
SHARES ON THE NEW YORK STOCK EXCHANGE)
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
AS OF OCTOBER 15, 1996, 43,562,353 SHARES OF COMMON STOCK WERE
OUTSTANDING.
Documents incorporated by reference:
1. Annual Report to Stockholders for 1996 - Parts I, II, and IV of this
Form 10-K
2. Definitive Proxy Statement - Part III of this Form 10-K
Indicate by check mark if the disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
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TABLE OF CONTENTS
Form 10-K
Item No. Name of Item Page
- -------- ------------ ----
Part I
Item 1 Business 3
Item 2 Properties 7
Item 3 Legal Proceedings 10
Item 4 Submission of Matters to a Vote of
Security Holders 12
Part II
Item 5 Market for the Registrant's Common Equity and
Related Stockholder Matters 13
Item 6 Selected Financial Data 13
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations 13
Item 8 Financial Statements and Supplementary Data 13
Item 9 Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure 13
Part III
Item 10 Directors and Executive Officers of the
Registrant 14
Item 11 Executive Compensation 16
Item 12 Security Ownership of Certain Beneficial
Owners and Management 16
Item 13 Certain Relationships and Related
Transactions 17
Part IV
Item 14 Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 18
Signatures 30
Exhibit Index 31
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Wallace Computer Services, Inc. Fiscal 1996 10-K
Part I
ITEM 1 BUSINESS
As used in this report, the term "Company" is used to refer to the
Registrant and its wholly-owned subsidiary, Visible Computer Supply
Corporation.
(a) Development of Business
The Registrant was organized in June l963 as "Wallace Business
Forms, Inc.", a Delaware corporation and is the successor to an
Illinois corporation known as "Wallace Press, Inc." that was
merged into the Registrant in August 1963. To better reflect the
nature of the Company's business, the Registrant changed its
corporate name in November 1981 from "Wallace Business Forms,
Inc." to "Wallace Computer Services, Inc."
(b) Industry Segment
The Company is engaged predominantly in the computer services and
supply industry. Wallace sells a broad line of products and
services including business forms, commercial and promotional
graphics printing, computer labels, machine ribbons, computer
hardware and software, computer accessories, office products, and
electronic forms.
(c) Narrative Description of Business
(1) Principal Products and Services
Principal products and services supplied by the Company
include the design, manufacture and sale of both paper based
and electronic business forms, industrial and consumer
catalogs, directories and price lists, pressure sensitive
labels, packaging labels, computer and business machine
ribbons, a standard line of office products forms, and
direct mail promotional printing. The Company also markets
computer accessory supplies, office supplies, and computer
hardware and software.
The only class of similar products that contributed 10% or
more of total sales for the past three years is printed
products. The contribution of printed products to total
sales was 92% for fiscal 1996, 90% for fiscal 1995, and 90%
for fiscal 1994.
3
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ITEM 1 Continued
(2) The principal raw material used by the Company is paper
which is purchased in the open market from numerous
suppliers in a variety of weights, widths, color and sizes.
The Company believes that it has adequate sources of supply
of raw materials to meet the requirements of its business.
The Company's current inventory levels are in line with the
inventory levels necessary to satisfy customer demand that
the Company anticipates for fiscal year 1997.
(3) Although certain features of the Company's products and
manufacturing processes are covered by owned or licensed
patents, the Company does not consider patents to be
critical to its business.
The Company believes that principal factors in its success
include its engineering, manufacturing, distribution and
information services capabilities, and its salesforce.
(4) The tax forms product lines (which accounts for less than 2%
of consolidated net sales) are sold primarily in the first
six months of the Company's fiscal year.
(5) The Company continues to maintain a strong working capital
position, with a current ratio of 3.1 at July 31, 1996 (3.9
at July 31, 1995). The Company funds its operating needs
through internally generated funds. The Company has not
borrowed any money for working capital since 1974.
Business conditions require the Company to produce and store
inventories to meet its customers' requirements. Custom and
stock finished goods inventories are stored throughout the
United States in both public and company-owned warehouses.
Finished products represent 68.8% of total inventory at July
31, 1996.
Substantially all of the Company's sales are made on terms
of Net 30 days. The accounts receivable balance at July 31,
1996, increased by 16.9%, mainly attributable to the
increase in fourth quarter sales and the acquisition of FEC.
Further information on liquidity and capital resources is
contained in Management's Discussion and Analysis of
Financial Condition and Results of Operations on pages 23-24
of the Company's Annual Report to Stockholders for 1996,
which is incorporated herein by reference.
4
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ITEM 1 Continued
(6) The Company is not dependent upon any one customer or a
group of customers under common control. No single customer
or group of customers accounts for more than 10% of
consolidated net sales.
(7) Within the computer services and supply industry, the
Company sells its products through three distribution
channels: 1) a direct sales force of approximately 700
employee sales representatives, 2) direct mail catalogs sent
to the customer, and 3) the office products
wholesaler/dealer distribution network.
The predominant distribution channel is the direct sales
force. The Company hires college graduates who start at a
base salary of $20,000 plus commissions. Sales
representatives are placed in one of the Company's 160 sales
offices located throughout the United States and are
assigned a specific geographic territory. Within this
assigned territory, a sales representative is free to sell
all of the Company's products to any customer. Sales
support for the direct sales force is provided by the
Corporate Marketing department. The Company has identified
the following specific markets as large users of its product
lines: financial services, telecommunications, retail,
transportation/distribution, utilities, and healthcare.
The direct mail catalog operation accounts for less than 2%
of the Company's sales. Customers are offered products
through a general catalog, plus monthly flyers that offer
special pricing on a limited number of products. The
general catalog carries approximately 8,000 items. Most of
the paper-based products in the catalog are produced by the
Company. Products sold through the catalog are either
drop-shipped directly from the manufacturer to the customer,
or shipped from the Company's warehouses in California,
Illinois, and Pennsylvania.
The office products wholesaler/dealer distribution network
accounts for approximately 12% of the Company's sales. The
network is accessed through the use of the Company's direct
sales force, who are paid a salary plus commissions. The
wholesaler/dealer distribution network is located throughout
the United States and Canada. The product line sold through
the network consists mainly of office and paper products and
computer supplies. The Company is also doing an increasing
amount of business with the office superstores, which are
estimated to control approximately 20% to 25% of the office
products market.
5
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ITEM 1 Continued
(8) The principal markets served by the Company are business
forms, direct response printing, pressure sensitive labels,
and office/computer products.
Within the business form market, the Company is one of the
few firms in the United States that is positioned to
accommodate the needs of large, forms-intensive customers
with multiple locations. These customers typically require
a forms vendor with the following characteristics:
a. sufficient forms manufacturing capacity across several
regions of the U.S. to satisfy their needs;
b. distribution capability across several regions of the
U.S. to deliver multiple types of forms to hundreds of
locations on short notice (the consequence of a supply
disruption often being the cessation of the customer's
business); and
c. the information services capability to provide
centralized billing, reporting, forms management, and
control for such shipments.
The Company is well positioned to meet customer needs in the
above three respects. For many large, forms-intensive
customers with multiple locations, the only acceptable
vendors other than the Company are Moore Corporation Limited
and The Standard Register Company.
The Company also sells business forms to customers that are
not large, forms-intensive firms with multiple locations.
These customers typically have a choice from among many
different acceptable vendors, and the Company accordingly
faces more competition than it does in sales to large,
forms-intensive customers with multiple locations.
The direct response printing market is made up of two
components. First, the commercial printing market segment
served by the Company includes the design and manufacture of
industrial and consumer catalogs, directories and price
lists that require computer manipulation of data for
electronic type composition. The Company primarily competes
with commercial printers. This market is highly competitive
and is very large in comparison to the Company's sales in
this area, with most work being done on a job bid basis.
The second component of the direct response printing market
is promotional printing. This market segment includes the
printing of
6
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ITEM 1 Continued
high quality brochures, letters and other mailed pieces that
are then personalized via computerized imaging. These
mailings include sweepstakes, credit card offerings, and
other business solicitation mailings. These services are
part of the $31 billion direct mail industry. This market
is also very large in comparison to the Company's sales.
The pressure sensitive label market is highly competitive
with over 2,600 converters in the United States. This
market is estimated to total approximately $3.0 billion.
The Company is both a manufacturer and distributor for the
$30.0 billion office supplies market. The Company's sales
are small in relation to the total market.
(9) The Company is continuously involved in research activities
relating to development of new products and improvement of
existing products (none of which are customer sponsored).
The amounts that the Company spends on research activities
are not significant in relation to annual sales volume.
(10) Compliance with federal, state and local provisions
governing the discharge of materials into the environment
has not had and is not anticipated to have a material effect
on the Company's capital expenditures, earnings or
competitive position.
(11) The total number of persons employed by the Company was
4,131 as of July 31, 1996.
(d) Foreign Operation and Export Sales
Net sales and income derived from export sales are not
material.
ITEM 2 PROPERTIES
The Company's corporate offices are located in Lisle, Illinois, a
suburb of Chicago.
The Company believes that all of its properties are well maintained
and in good operating condition.
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ITEM 2 Continued
The following are the Company's principal properties:
Approximate
Square
Location Footage Description
- -------- ------- -----------
Gastonia, North Carolina 120,000 Business Forms Plant
- owned by Company.
Luray, Virginia 162,300 Business Forms Plant
- owned by Company.
Marlin, Texas 115,700 Business Forms Plant
- owned by Company.
Metter, Georgia 216,300 Warehouse and Distribution
Center and Manufacturing
Plant for the Business Forms
and Direct Response Printing
Group - owned by Company.
Osage, Iowa 152,500 Business Forms Plant
- owned by Company.
San Luis Obispo, 110,000 Business Forms Plant
California - owned by Company.
Hillside, Illinois 206,600 Direct Response Printing
Plant and Corporate and
Sales Offices (35,000 square
feet) attached to plant
- owned by Company.
Lebanon, Kentucky 89,200 Direct Response Printing
Plant - owned by Company.
Bellwood, Illinois 30,000 Engineering Facilities
- lease ending March, 1997.
Lisle, Illinois 105,000 Corporate Headquarters
- owned by Company
8
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ITEM 2 Continued
Approximate
Square
Location Footage Description
- -------- -------- -----------
Hillside, Illinois 24,400 Additional Corporate Offices
- owned by Company.
Brenham, Texas 128,200 Office Products and Label
Manufacturing Plant
- owned by Company.
Streetsboro, Ohio 80,000 Label Manufacturing Plant
- owned by Company.
Wilson, North Carolina 127,200 Label Manufacturing Plant
- owned by Company.
Cincinnati, Ohio 22,900 Label Manufacturing Plant
- owned by Company.
Lodi, California 138,100 Warehouse and Distribution
Center and Manufacturing
Plant for the Label, Office
Products and Direct
Response Printing Groups
- owned by Company.
St. Charles, Illinois 293,000 Warehouse and Distribution
Center and Manufacturing
Plant for the Business Forms
and Office Products Groups
- owned by Company.
St. Charles, Illinois 92,400 Distribution Center and
Manufacturing Plant for the
Direct Response Printing and
Label Groups - owned by
Company
Ontario, California 114,500 Distribution Center
- lease ending October, 2001
Osage, Iowa 104,400 Office Products Plant
- owned by Company.
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ITEM 2 Continued
Approximate
Square
Location Footage Description
- -------- -------- -----------
Covington, Tennessee 241,700 Warehouse and Distribution
Center, and Office Products
Plant - owned by Company.
Allentown, Pennsylvania 101,400 Warehouse and Distribution
Center, and Direct Response
Printing Plant - owned by
Company.
Clinton, Illinois 219,000 Direct Response Printing
Plant - owned by Company.
LaPalma, California 22,100 Direct Response Printing
Plant - lease ending in 2015
LaPalma, California 43,200 Direct Response Printing
Plant - lease ending in 2015
Manchester, Vermont 162,300 Direct Response Printing
Plant - owned by Company.
Tonawanda, New York 113,000 Direct Response Printing
Plant - owned by Company.
Elk Grove Village, Illinois 142,000 Direct Response Printing
Plant and Label Group
Office - owned by Company.
Distribution warehouses and sales offices throughout the United States are
leased.
ITEM 3 LEGAL PROCEEDINGS
On September 20, 1996, Mr. Guy Wyser-Pratte filed a complaint against
the Company in the United States District Court for the Northern
District of Illinois, Case No. 96 C 6087 (the "Wyser-Pratte
Litigation"). In that complaint, Mr. Wyser-Pratte alleges that a
preliminary version of the Company's proxy statement for the 1996
Annual Meeting of Stockholders, which was filed with the Securities
and Exchange Commission but not distributed by the Company to its
stockholders, was misleading because (i) it did not properly disclose
the issues with respect to the legality under Delaware
10
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ITEM 3 Continued
law and the Company's Certificate of Incorporation of Mr.
Wyser-Pratte's proposal to amend the Company's Bylaws to require the
Company's Board to terminate defensive actions following a cash tender
offer for all of the outstanding capital stock of the Company unless
approved by a stockholder vote (the "Tender Offer Proposal"), and (ii)
it did not indicate that the proxy statement issued by Moore
Corporation Limited ("Moore") in connection with the 1995 Annual
Meeting of Stockholders of the Company contained the following
statement: "The Moore Nominees are committed, SUBJECT TO THE
FULFILLMENT OF THE FIDUCIARY DUTIES THEY WOULD HAVE AS DIRECTORS OF
WALLACE, to giving each Wallace stockholder the opportunity to receive
not less than $60 per Share for all of their shares and to take such
steps as are necessary to permit the [Moore] Offer and [Moore's
proposed merger] to proceed." (emphasis added) Mr. Wyser-Pratte
further alleges that such preliminary version of the proxy statement
was misleading because it did not state the reasons why Messrs.
Hessler, Isenman and Rittereiser (the three Wallace directors
nominated by Moore), in fulfilling their fiduciary duties as directors
of the Company, joined with the other directors of the Company in
unanimously recommending that the stockholders of the Company vote in
favor of the Board's nominees and against Mr. Wyser-Pratte's
proposals. The complaint also seeks a declaration that the purported
Bylaw amendment reflected in Mr. Wyser-Pratte's Tender Offer Proposal
is lawful under Delaware law. On October 10, 1996, the Company filed
a motion to dismiss Mr. Wyser-Pratte's complaint in its entirety, or
in the alternative, if the request for a declaration of the legality
of the purported Bylaw amendment reflected in Mr. Wyser-Pratte's
Tender Offer Proposal is not dismissed, to certify to the Delaware
Supreme court in the issue of whether the purported Bylaw amendment
reflected in Mr. Wyser-Pratte's Tender Offer Proposal is lawful under
Delaware law. The Company's motion is currently pending before the
Court. The Company believes the Wyser-Pratte Litigaton is without
merit, and intends to vigorously defend the Wyser-Pratte Litigation.
The Company and certain of its directors have been named as defendants
in three purported class actions filed between July 31, 1995 and
August 3, 1995 on behalf of the public stockholders of the Company in
the Court of Chancery of the State of Delaware in and for New Castle
County. These actions are entitled: BERNARD KOFF V. THEODORE
DIMITRIOU, FRED CANNING, WILLIAM N. LANE, NEELE E. STEARNS, JR.,
ROBERT J. CRONIN, DARRELL R. EWERS, RICHARD F. DOYLE, WILLIAM E.
OLSEN, AND WALLACE COMPUTER SERVICES, INC.; KITTY LAPERRIERE V.
WALLACE COMPUTER SERVICES, INC., THEODORE DIMITRIOU AND ROBERT J.
CRONIN; AND ROBIN K. PITTMAN V. THEODORE DIMITRIOU, FRED F. CANNING,
WILLIAM N. LANE, III, NEELE E. STEARNS, JR., ROBERT J. CRONIN, DARRELL
R. EWERS, RICHARD F. DOYLE, WILLIAM E. OLSEN, AND WALLACE COMPUTER
SERVICES, INC. (collectively,
11
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ITEM 3 Continued
the "Stockholder Actions"). The complaints in the Stockholder Actions
contain substantially similar allegations, and allege breach of
fiduciary duty claims arising out of the proposal by FRDK to acquire
the Company. The complaints in the Stockholder Actions also seek
substantially similar relief, including declaratory and injunctive
relief barring defendants from breaching their fiduciary duties to
plaintiffs and the putative class members and taking steps to impede
any offer to acquire the Company, as well as damages in an unspecified
amount. The plaintiffs filed a second amended complaint on November
21, 1995, and stipulated that the defendants need not answer or
otherwise plead until some unspecified future date. There has been no
activity in this matter since February 8, 1996. The Company intends
to vigorously defend the Stockholders Actions if the plaintiffs seek
to revive them.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning the executive officers of the Company is contained in
Item 10 below.
12
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Part II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The total number of holders of record of the Company's common stock
was 3,318 as of October 15, 1996. Information about the market and
payment of dividends for the Company's common stock is contained in
the 1996 Annual Report to Stockholders on page 25, and is incorporated
herein by reference.
ITEM 6 SELECTED FINANCIAL DATA
Selected financial data for each of the eleven years ended July 31,
1996, is contained in the Company's Annual Report to Stockholders for
1996, on pages 18-19, and is incorporated herein by reference.
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and
Results of Operations for the three years ended July 31, 1996 is
contained in the Company's Annual Report to Stockholders for 1996, on
pages 20-25, and is incorporated herein by reference.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated balance sheets of the Company as of July 31, 1996 and
1995, the consolidated statements of income, cash flows and
stockholders' equity for the years ended July 31, 1996, 1995 and
1994, and the notes to consolidated financial statements, together
with the report of Arthur Andersen LLP thereon dated September 4,
1996, are contained in the Company's Annual Report to Stockholders for
1996, on pages 26-34, and are incorporated herein by reference.
Quarterly financial information for the years ended July 31, 1996
and 1995 is included in Management's Discussion and Analysis of
Financial Condition and Results of Operations, which is contained in
the Company's Annual Report to Stockholders for 1996 on page 25, and
is incorporated herein by reference.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
13
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Part III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning the directors of the Company is contained in
the Company's definitive Proxy Statement dated October 8, 1996, on
pages 6-7, and is incorporated herein by reference.
EXECUTIVE OFFICERS OF THE COMPANY
(a) Names, ages and positions of the executive officers:
Name Age Position
---- --- --------
Thomas G. Brooker 38 Vice President - General
Manager - Office Products
Robert J. Cronin 51 President and Chief Executive
Officer
Bruce D'Angelo 44 Vice President - Corporate Sales
Theodore Dimitriou 70 Chairman of the Board
Michael O. Duffield 44 Senior Vice President -
Operations
Michael J. Halloran 48 Vice President - Chief Financial
Officer and Assistant Secretary
Donald J. Hoffmann 58 Vice President - Engineering
and Research
Michael T. Laudizio 39 Secretary
Michael T. Leatherman 43 Senior Vice President - Chief
Information Officer
William J. Montanez 43 Assistant Treasurer
Michael M. Mulcahy 54 Vice President - General
Manager - Colorforms Group
Wayne E. Richter 40 Vice President - General
Manager - Label Group
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ITEM 10 Continued
All officers are elected at the Annual Meeting of the Board of
Directors, which is held immediately after the Annual Meeting of
Stockholders.
(b) Business Experience of the Executive Officers:
Mr. Brooker has been with the Company since 1981. He was elected
Vice President - General Manager - Office Products in 1995. Mr.
Brooker was previously Vice President - General Manager - Tops
Division from 1993 to 1995, and Vice President - Sales - Tops
Division from 1992 to 1993. Prior to that time, Mr. Brooker held
various positions in sales management, most recently as National
Sales Manager from 1991 to 1992.
Mr. Cronin has been with the Company since 1967. He was elected
President and Chief Executive Officer in 1993. Mr. Cronin was
previously elected Chief Operating Officer in 1992. Prior to
that time, Mr. Cronin held various sales management positions,
most recently Senior Vice President - Sales from 1991 to 1992.
Mr. Cronin is also a director of the Company.
Mr. D'Angelo has been with the Company since 1980. He was
elected Vice President - Corporate Sales in 1992. Mr. D'Angelo
was previously General Manager - Label Division from 1990 to
1992, and has held management positions in both sales and
operations.
Mr. Dimitriou joined the Company in 1959. He was Chief
Executive Officer of the Company from 1992 to 1993. Prior to that
time, Mr. Dimitriou was President and Chief Executive Officer of
the Company from 1975 to 1992. He is also a director of the
Company and has been its Chairman of the Board since 1979.
Mr. Duffield has been with the Company since 1974. He was
elected Senior Vice President - Operations in 1992. Mr. Duffield
has previously held various manufacturing management positions,
most recently Vice President - Operations from 1990 to 1992.
Mr. Halloran has been with the Company since 1975. He was
elected Vice President - Chief Financial Officer in 1987.
Mr. Hoffmann has been with the Company since 1969. He was
elected Vice President - Engineering and Research in 1986.
15
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ITEM 10 Continued
Mr. Laudizio has been with the company since 1989. He was
elected Secretary in 1995. Also in 1995 he was named Division
Vice President Taxes. Previously, Mr. Laudizio had been Director
of Taxation since 1989. In addition to that position, he had
been Assistant Secretary since 1994.
Mr. Leatherman has been with the Company since 1990. He was
elected Senior Vice President - Chief Information Officer in
1995. Mr. Leatherman was previously Vice President - Management
Information Services.
Mr. Montanez has been with the Company since 1992. He was
appointed Assistant Treasurer in 1996. Mr. Montanez previously
had been Director of Benefits and Risk Management since 1995 and
Risk Manager from 1992 to 1995. Prior to that time, Mr. Montanez
had been Risk Manager for Rand McNally.
Mr. Mulcahy has been with the Company since 1961. He was
appointed Vice President - Colorforms Division in 1992. Mr.
Mulcahy previously held various manufacturing management
positions, most recently Vice President - General Manager -
Manufacturing Operations from 1991 to 1992.
Mr. Richter has been with the Company since 1979. He was elected
Vice President - General Manager - Label Division in 1992. Mr.
Richter has previously been Director of Manufacturing - Business
Forms Division from 1990 to 1992 and has held several operational
management positions at various locations.
There are no family relationships between these executives.
ITEM 11 EXECUTIVE COMPENSATION
Information concerning management remuneration and transactions for
the year ended July 31, 1996 is contained in the Company's definitive
Proxy Statement dated October 8, 1996, on pages 13-22, and is
incorporated herein by reference.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning the beneficial ownership of the Company's
common stock is contained in the Company's definitive Proxy Statement
dated October 8, 1996, on pages 24-26, and is incorporated herein by
reference.
16
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ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning certain relationships and related transactions
is contained in the Company's definitive Proxy Statement dated October
8, 1996, in Schedule II on pages II-1 through II-3, and is
incorporated herein by reference.
17
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Wallace Computer Services, Inc. Fiscal 1996 10-K
Part IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial statements and schedules are included in this Form 10-K
Annual Report as indicated below. Those portions of the 1996
Annual Report to Stockholders listed below are hereby
incorporated by reference.
Page Number
Annual Report
to Stockholders
---------------
Quarterly Financial Data for the years
ended July 31, 1996 and 1995 25
Consolidated Statements of Income
for the years ended July 31, 1996,
1995, and 1994 26
Consolidated Statements of
Stockholders' Equity for the years
ended July 31, 1996, 1995, and 1994 27
Consolidated Balance Sheets as of
July 31, 1996 and 1995 28
Consolidated Statements of Cash
Flows for the years ended July 31,
1996, 1995, and 1994 29
Notes to Consolidated Financial Statements 30-33
Report of Independent Public Accountants 34
Schedule -
II Valuation and Qualifying Accounts - Page 29 of Form 10-K
Schedules Omitted
All other schedules have been omitted because they are not
applicable or not required or because the required information is
included in the financial statements or notes thereto.
18
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ITEM 14 Continued
(b) A report on Form 8-K was filed in July 1996. The exhibit filed
with the report was:
(1) A press release of the Registrant dated July 30, 1996
setting the date of the next Annual Meeting.
(c) Exhibit Index
3. ARTICLES OF INCORPORATION AND BY-LAWS
3.1A Restated Certificate of Incorporation of the Registrant
as filed with the Secretary of State of the State of
Delaware on January 7, 1987 (previously filed as part
of Exhibit 3 to the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1987, and
incorporated herein by reference to such Report)
3.1B Certificate of Amendment amending Section 1 of Article
FOURTH of the Certificate of Incorporation of the
Registrant as filed with the Secretary of State of the
State of Delaware on November 28, 1989 (previously
filed as part of Exhibit 3 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended July 31,
1987, and incorporated herein by reference to such
Report)
3.1C Certificate of Designation, Preferences and Rights of
Series A Preferred Stock of the Registrant as filed
with the Secretary of State of the State of Delaware on
March 15, 1990 (previously filed as part of Exhibit 3
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1990, and incorporated
herein by reference to such Report)
3.2 Amended and Restated By-Laws of the Registrant as
adopted on January 5, 1996 (previously filed as Exhibit
3.1 to the Registrant's Quarterly Report on Form 10-Q
dated January 31, 1996, and incorporated herein by
reference to such Report)
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ITEM 14 Continued
4. INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES *
* The Registrant has not filed as an Exhibit any instrument
defining the rights of holders of long-term debt because the
Registrant and its consolidated subsidiaries do not have any
instrument with respect to long-term debt under which the total
amount of authorized securities exceeds 10% of the total assets
of the Registrant and its subsidiaries on a consolidated basis.
The Registrant has filed an agreement with the Securities and
Exchange Commission to furnish a copy of any instrument defining
the rights of holders of long-term debt to the Commission upon
request.
10. MATERIAL CONTRACTS
10.1 Form of Rights Agreement, dated as of March 14, 1990,
between Registrant and Harris Trust and Savings Bank,
as Rights Agent, which includes as Exhibit A the
Certificate of Designation, Preferences and Rights of
Series A Preferred Stock, as Exhibit B the form of
Rights Certificate, and as Exhibit C the form of
Summary of Rights (previously filed as Exhibit 28.2 to
the Registrant's Current Report on Form 8-K dated March
14, 1990, and incorporated herein by reference to such
Report)
10.2A Fourth Amended and Restated Agreement made and entered
into as of January l, 1993 between the Registrant and
Theodore Dimitriou (previously filed as part of Exhibit
10 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended July 31, 1993, and incorporated
herein by reference to such Report)
10.2B First Amendment to Fourth Amended and Restated
Agreement made and entered into as of January l, 1993
between the Registrant and Theodore Dimitriou
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1993, and incorporated herein by
reference to such Report)
10.2C Second Amendment to Fourth Amended and Restated
Agreement made and entered into as of January 1, 1993
between the Registrant and Theodore Dimitriou
(previously filed as Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q dated October 31, 1995,
and incorporated herein by reference to such Report)
20
<PAGE>
ITEM 14 Continued
10.3 1989 Stock Option Plan of the Registrant, which amends
and restates as a single, integrated plan the 1974
Non-Qualified Stock Option Plan of the Registrant and
the 1981 Incentive Stock Option Plan of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1990, and incorporated herein by
reference to such Report)
10.4A Executive Incentive Plan of the Registrant, as restated
to reflect Amendment No. 3 thereto, adopted as of
November 9, 1994 (previously filed as part of Exhibit
10 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
10.4B Fourth Amendment, adopted as of September 6, 1995, to
the Executive Incentive Plan of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1995, and incorporated herein by
reference to such Report)
10.5A 1988 Deferred Compensation/Capital Accumulation Plan of
the Registrant (previously filed as part of Exhibit 10
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1988, and incorporated
herein by reference to such Report)
10.5B 1989 Deferred Compensation/Capital Accumulation Plan of
the Registrant (previously filed as part of Exhibit 10
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1990, and incorporated
herein by reference to such Report)
10.5C 1990 Deferred Compensation /Capital Accumulation Plan
of the Registrant (previously filed as part of Exhibit
10 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended July 31, 1990, and incorporated
herein by reference to such Report)
10.5D First Amendment to the 1990 Deferred
Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
10.5E 1991 Deferred Compensation/Capital Accumulation Plan of
the Registrant (previously filed as part of Exhibit 10
to the Registrant's
21
<PAGE>
ITEM 14 Continued
Annual Report on Form 10-K for the fiscal year ended
July 31, 1991, and incorporated herein by reference to
such Report)
10.5F First Amendment to the 1991 Deferred
Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
10.5G 1993 Deferred Compensation/Capital Accumulation Plan of
the Registrant (previously filed as part of Exhibit 10
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1993, and incorporated
herein by reference to such Report)
10.5H First Amendment to the 1993 Deferred
Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
10.5I 1994 Deferred Compensation/Capital Accumulation Plan of
the Registrant (previously filed as part of Exhibit 10
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1994, and incorporated
herein by reference to such Report)
10.5J First Amendment to the 1994 Deferred
Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
10.5K 1995 Deferred Compensation/Capital Accumulation Plan of
the Registrant (previously filed as part of Exhibit 10
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
10.5L First Amendment to the 1995 Deferred
Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
22
<PAGE>
ITEM 14 Continued
10.5M 1996 Deferred Compensation/Capital Accumulation Plan of
the Registrant (previously filed as Exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-Q dated
October 31, 1995, and incorporated herein by reference
to such Report)
10.6 Supplemental Profit-Sharing Plan of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1988, and incorporated herein by
reference to such Report)
10.7A Executive Severance Pay Plan of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1990, and incorporated herein by
reference to such Report)
10.7B First Amendment to the Executive Severance Pay Plan of
the Registrant (previously filed as part of Exhibit 10
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
10.8 Employee Annual Bonus Plan of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1994, and incorporated herein by
reference to such Report)
10.9A Employee Long-Term Performance Plan of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1994, and incorporated herein by
reference to such Report)
10.9B First Amendment of the Employee Long-Term Performance
Plan of the Registrant (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1995, and
incorporated herein by reference to such Report)
10.10 Employee Stock Option Guideline of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1994, and incorporated herein by
reference to such Report)
23
<PAGE>
ITEM 14 Continued
10.11A 1988 Deferred Compensation/Capital Accumulation Plan
for Directors of the Registrant (previously filed as
part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1988, and
incorporated herein by reference to such Report)
10.11B 1989 Deferred Compensation/Capital Accumulation Plan
for Directors of the Registrant (previously filed as
part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1990, and
incorporated herein by reference to such Report)
10.11C 1993 Deferred Compensation/Capital Accumulation Plan
for Directors of the Registrant (previously filed as
part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1993, and
incorporated herein by reference to such Report)
10.11D 1994 Deferred Compensation/Capital Accumulation Plan
for Directors of the Registrant (previously filed as
part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1994, and
incorporated herein by reference to such Report)
10.11E 1995 Deferred Compensation/Capital Accumulation Plan
for Directors of the Registrant (previously filed as
part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1995, and
incorporated herein by reference to such Report)
10.11F 1996 Deferred Compensation/Capital Accumulation Plan
for Directors of the Registrant (previously filed as
Exhibit 10.3 to the Registrant's Quarterly Report on
Form 10-Q dated October 31, 1995, and incorporated
herein by reference to such Report)
10.12 Retirement Plan for Outside Directors of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1990, and incorporated herein by
reference to such Report)
10.13 Employee Stock Purchase Plan of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-
24
<PAGE>
ITEM 14 Continued
K for the fiscal year ended July 31, 1992, and
incorporated herein by reference to such Report)
10.14A Employee Severance Pay Plan of the Registrant
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1992, and incorporated herein by
reference to such Report)
10.14B First Amendment of the Employee Severance Pay Plan of
the Registrant (previously filed as part of Exhibit 10
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated
herein by reference to such Report)
10.15A Form of Indemnification Agreement with Director between
the Registrant and each of the following: Robert J.
Cronin, Theodore Dimitriou, Richard F. Doyle, Curtis A.
Hessler, Albert W. Isenman III, William N. Lane III,
William E. Olsen, John C. Pope and Robert P.
Rittereiser (previously filed as part of Exhibit 10 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1990, and incorporated
herein by reference to such Report)
10.15B Form of Addendum to Indemnification Agreement with
Director (Member of Profit Sharing Committee) between
the Registrant and each of the following: Robert J.
Cronin and Theodore Dimitriou (previously filed as part
of Exhibit 10 to the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1990, and
incorporated herein by reference to such Report)
10.15C Form of Indemnification Agreement with Director (Member
of Profit Sharing Committee) between the Registrant and
Robert P. Rittereiser
10.16A Form of Indemnification Agreement with Officer between
the Registrant and each of the following: Thomas G.
Brooker, Robert J. Cronin, Bruce D'Angelo, Theodore
Dimitriou, Michael O. Duffield, Michael J. Halloran,
Donald J. Hoffmann, Michael T. Laudizio, Michael T.
Leatherman, William J. Montanez, Michael M. Mulcahy,
and Wayne E. Richter (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1990, and
incorporated herein by reference to such Report)
25
<PAGE>
ITEM 14 Continued
10.16B Form of Addendum to Indemnification Agreement with
Officer (Trustee of Profit Sharing and Retirement Trust
and Member of Profit Sharing Committee) between the
Registrant and each of the following: Robert J.
Cronin, Theodore Dimitriou and Michael J. Halloran
(previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1990, and incorporated herein by
reference to such Report)
10.16C Form of Addendum to Indemnification Agreement with
Officer (Member of Profit Sharing Committee) between
the Registrant and Michael O. Duffield (previously
filed as part of Exhibit 10 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended July 31,
1995, and incorporated herein by reference to such
Report)
10.17A Acquisition Agreement dated as of July 18, 1991, by and
among Wallace Computer Services, Inc., a Delaware
corporation, MGI Industries, Inc., a New Jersey
corporation, Colorforms Incorporated, a Delaware
corporation, Colorforms Image Center, Inc., an Illinois
corporation, Colorforms Mailing Services, Inc., an
Illinois corporation, Evergreen Realty, a New York
partnership, Frank A. Leo, William J. O'Brien, Robert
L. Patton, and R. Robert Verniero, including Exhibits
and General Schedules but excluding Disclosure
Schedules (previously filed as part of Exhibit 2 to the
Registrant's Current Report on Form 8-K dated August
20, 1991, and incorporated herein by reference to such
Report)
10.17B Amendment No. 1 dated as of August 7, 1991 to
Acquisition Agreement dated as of July 18, 1991 by and
among Wallace Computer Services, Inc., a Delaware
corporation, MGI Industries, Inc., a New Jersey
corporation, Colorforms Incorporated, a Delaware
corporation, Colorforms Image Center, Inc., an Illinois
corporation, Colorforms Mailing Services, Inc., an
Illinois corporation, Evergreen Realty, a New York
partnership, Frank A. Leo, William J. O'Brien, Robert
L. Patton, and R. Robert Verniero, including Exhibits
and General Schedules but excluding Disclosure
Schedules (previously filed as part of Exhibit 2 to the
Registrant's Current Report on Form 8-K dated August
20, 1991, and incorporated herein by reference to the
Report)
10.17C Supplemental Agreement No. l dated as of August 7, 1991
in connection with Acquisition Agreement dated as of
July 18, 1991,
26
<PAGE>
ITEM 14 Continued
as amended by Amendment No. l dated as of August 7,
1991, by and among Wallace Computer Services, Inc., a
Delaware corporation, MGI Industries, Inc., a New
Jersey corporation, Colorforms Incorporated, a Delaware
corporation, Colorforms Image Center, Inc., an Illinois
corporation, Colorforms Mailing Services, Inc., an
Illinois corporation, Evergreen Realty, a New York
partnership, Frank A. Leo, William J. O'Brien, Robert
L. Patton, and R. Robert Verniero (previously filed as
part of Exhibit 2 to the Registrant's Current Report on
Form 8-K dated August 20, 1991, and incorporated herein
by reference to such Report)
10.17D Supplemental Agreement No. 2 dated as of August 7,
1991, in connection with Acquisition Agreement dated as
of July 18, 1991, as amended by Amendment No. l dated
as of August 7, 1991, by and among Wallace Computer
Services, Inc., a Delaware corporation, MGI Industries,
Inc., a New Jersey corporation, Colorforms
Incorporated, a Delaware corporation, Colorforms Image
Center, Inc., an Illinois corporation, Colorforms
Mailing Services, Inc., an Illinois corporation,
Evergreen Realty, a New York partnership, Frank A. Leo,
William J. O'Brien, Robert L. Patton, and R. Robert
Verniero (previously filed as part of Exhibit 2 to the
Registrant's Current Report on Form 8-K dated August
20, 1991, and incorporated herein by reference to such
Report)
10.17E Amendment No. 2 dated as of August 31, 1993, to
Acquisition Agreement dated as of July 18, 1991, by and
among Wallace Computer Services, Inc., a Delaware
corporation (on its own behalf and as successor by
merger to MGI Industries, Inc., a New Jersey
corporation, and Colorforms Incorporated, a Delaware
corporation, Colorforms Image Center, Inc., an Illinois
corporation, and Colorforms Mailing Services, Inc., an
Illinois corporation), Evergreen Realty, a New York
partnership, Frank A. Leo, William J. O'Brien, Robert
L. Patton, and R. Robert Verniero (previously filed as
part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1993, and
incorporated herein by reference to such Report)
10.18 Agreement made and entered into as of January 1, 1995
between Registrant and Robert J. Cronin (previously
filed as Exhibit 2 to the Registrant's Current Report
on Form 8-K dated June 14, 1995, and incorporated
herein by reference to such Report)
27
<PAGE>
ITEM 14 Continued
10.19 Form of Addendum to Indemnification Agreement with
Officer for FEC Employee Stock Ownership Trust between
the Registrant and each of the following: Robert J.
Cronin, Theodore Dimitriou and Michael O. Duffield
(previously filed as Exhibit 10.1 to the Registrant's
Quarterly Report on Form 10-Q dated April 30, 1996, and
incorporated herein by reference to such Report)
13. ANNUAL REPORT TO SECURITY HOLDERS, FORM 10-Q OR QUARTERLY REPORT TO
SECURITY HOLDERS
13. Annual Report - Fiscal 1996 of the Registrant (filed as part of
this Report only to the extent portions thereof are expressly
incorporated by reference in this report)
21. SUBSIDIARIES OF REGISTRANT
21. Subsidiary of the Company
23. CONSENTS OF EXPERTS AND COUNSEL
23. Consent of Arthur Andersen LLP.
27. FINANCIAL DATA SCHEDULE
27. Financial Data Schedule
28
<PAGE>
Wallace Computer Services, Inc. and Subsidiary
Schedule II - Valuation and Qualifying Accounts
For the years ended July 31
1996 1995 1994
---------- ---------- ----------
Balance at Beginning of Year $2,671,000 $1,982,000 $1,849,000
Provision for Doubtful Accounts 560,000 1,132,000 893,000
Accounts Written Off Against Allowance 860,000 1,061,000 1,161,000
Recoveries Credited to Allowance 346,000 593,000 401,000
Other Credits (1) 498,000 25,000 ---
---------- ---------- ----------
Balance at End of Year $3,215,000 $2,671,000 $1,982,000
---------- ---------- ----------
---------- ---------- ----------
(1) Fiscal 1996 credit from acquisition of Forms Engineering Company as of
February 8, 1996. Fiscal 1995 credit from acquisition of Lampro Graphics,
Inc. as of November 1, 1994.
29
<PAGE>
Wallace Computer Services, Inc Fiscal 1996 10-K
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on October 24, 1996.
Wallace Computer Services, Inc.
/s/ Michael J. Halloran
By
-----------------------------
Michael J. Halloran
Vice President, Chief
Financial Officer and
Assistant Secretary (principal
accounting officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in capacities indicated, on October 24, 1996.
/s/ Theodore Dimitriou /s/ William N. Lane III
- -------------------------------- ------------------------------
Theodore Dimitriou William N. Lane III
Chairman of the Board Director
/s/ Robert J. Cronin /s/ William E. Olsen
- -------------------------------- ------------------------------
Robert J. Cronin William E. Olsen
Director, President and Director
Chief Executive Officer
/s/ Richard F. Doyle /s/ John C. Pope
- -------------------------------- ------------------------------
Richard F. Doyle John C. Pope
Director Director
/s/ Curtis A. Hessler /s/ Robert P. Rittereiser
- -------------------------------- ------------------------------
Curtis A. Hessler Robert P. Rittereiser
Director Director
/s/ Albert W. Isenman III
- --------------------------------
Albert W. Isenman III
Director
30
<PAGE>
Exhibit Index
Exhibit
Number Description
------ -----------
3.1A Restated Certificate of Incorporation of the Registrant as filed
with the Secretary of State of the State of Delaware on January
7, 1987 (previously filed as part of Exhibit 3 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1987, and incorporated herein by reference to such
Report)
3.1B Certificate of Amendment amending Section 1 of Article FOURTH of
the Certificate of Incorporation of the Registrant as filed with
the Secretary of State of the State of Delaware on November 28,
1989 (previously filed as part of Exhibit 3 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31,
1987, and incorporated herein by reference to such Report)
3.1C Certificate of Designation, Preferences and Rights of Series A
Preferred Stock of the Registrant as filed with the Secretary of
State of the State of Delaware on March 15, 1990 (previously
filed as part of Exhibit 3 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1990, and
incorporated herein by reference to such Report)
3.2 Amended and Restated By-Laws of the Registrant as adopted on
January 5, 1996 (previously filed as Exhibit 3.1 to the
Registrant's Quarterly Report on Form 10-Q dated January 31,
1996, and incorporated herein by reference to such Report)
10.1 Form of Rights Agreement, dated as of March 14, 1990, between
Registrant and Harris Trust and Savings Bank, as Rights Agent,
which includes as Exhibit A the Certificate of Designation,
Preferences and Rights of Series A Preferred Stock, as Exhibit B
the form of Rights Certificate, and as Exhibit C the form of
Summary of Rights (previously filed as Exhibit 28.2 to the
Registrant's Current Report on Form 8-K dated March 14, 1990, and
incorporated herein by reference to such Report)
10.2A Fourth Amended and Restated Agreement made and entered into as of
January l, 1993 between the Registrant and Theodore Dimitriou
(previously filed as part of Exhibit 10 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31,
1993, and incorporated herein by reference to such Report)
10.2B First Amendment to Fourth Amended and Restated Agreement made and
entered into as of January l, 1993 between the Registrant and
Theodore Dimitriou (previously filed as part of Exhibit 10 to the
Registrant's Annual
31
<PAGE>
Exhibit Index (continued)
Exhibit
Number Description
------ -----------
Report on Form 10-K for the fiscal year ended July 31, 1993, and
incorporated herein by reference to such Report)
10.2C Second Amendment to Fourth Amended and Restated Agreement made
and entered into as of January 1, 1993 between the Registrant and
Theodore Dimitriou (previously filed as Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q dated October 31,
1995, and incorporated herein by reference to such Report)
10.3 1989 Stock Option Plan of the Registrant, which amends and
restates as a single, integrated plan the 1974 Non-Qualified
Stock Option Plan of the Registrant and the 1981 Incentive Stock
Option Plan of the Registrant (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1990, and incorporated herein by
reference to such Report)
10.4A Executive Incentive Plan of the Registrant, as restated to
reflect Amendment No. 3 thereto, adopted as of November 9, 1994
(previously filed as part of Exhibit 10 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31,
1995, and incorporated herein by reference to such Report)
10.4B Fourth Amendment, adopted as of September 6, 1995, to the
Executive Incentive Plan of the Registrant (previously filed as
part of Exhibit 10 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended July 31, 1995, and incorporated herein
by reference to such Report)
10.5A 1988 Deferred Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1988, and incorporated herein by reference to such
Report)
10.5B 1989 Deferred Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1990, and incorporated herein by reference to such
Report)
10.5C 1990 Deferred Compensation /Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on
32
<PAGE>
Exhibit Index (continued)
Exhibit
Number Description
------ -----------
Form 10-K for the fiscal year ended July 31, 1990, and
incorporated herein by reference to such Report)
10.5D First Amendment to the 1990 Deferred Compensation/Capital
Accumulation Plan of the Registrant (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated herein by
reference to such Report)
10.5E 1991 Deferred Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1991, and incorporated herein by reference to such
Report)
10.5F First Amendment to the 1991 Deferred Compensation/Capital
Accumulation Plan of the Registrant (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated herein by
reference to such Report)
10.5G 1993 Deferred Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1993, and incorporated herein by reference to such
Report)
10.5H First Amendment to the 1993 Deferred Compensation/Capital
Accumulation Plan of the Registrant (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995 and incorporated herein by
reference to such Report)
10.5I 1994 Deferred Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1994, and incorporated herein by reference to such
Report)
10.5J First Amendment to the 1994 Deferred Compensation/Capital
Accumulation Plan of the Registrant (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated herein by
reference to such Report)
33
<PAGE>
Exhibit Index (continued)
Exhibit
Number Description
------ -----------
10.5K 1995 Deferred Compensation/Capital Accumulation Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1995, and incorporated herein by reference to such
Report)
10.5L First Amendment to the 1995 Deferred Compensation/Capital
Accumulation Plan of the Registrant (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1995, and incorporated herein by
reference to such Report)
10.5M 1996 Deferred Compensation/Capital Accumulation Plan of the
Registrant (previously filed as Exhibit 10.2 to the Registrant's
Quarterly Report on Form 10-Q dated October 31, 1995, and
incorporated herein by reference to such Report)
10.6 Supplemental Profit-Sharing Plan of the Registrant (previously
filed as part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1988, and
incorporated herein by reference to such Report)
10.7A Executive Severance Pay Plan of the Registrant (previously filed
as part of Exhibit 10 to the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1990, and incorporated
herein by reference to such Report)
10.7B First Amendment to the Executive Severance Pay Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1995, and incorporated herein by reference to such
Report)
10.8 Employee Annual Bonus Plan of the Registrant (previously filed as
part of Exhibit 10 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended July 31, 1994, and incorporated herein
by reference to such Report)
10.9A Employee Long-Term Performance Plan of the Registrant (previously
filed as part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1994, and
incorporated herein by reference to such Report)
10.9B First Amendment of the Employee Long-Term Performance Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1995, and incorporated herein by reference to such
Report)
34
<PAGE>
Exhibit Index (continued)
Exhibit
Number Description
------ -----------
10.10 Employee Stock Option Guideline of the Registrant (previously
filed as part of Exhibit 10 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1994, and
incorporated herein by reference to such Report)
10.11A 1988 Deferred Compensation/Capital Accumulation Plan for
Directors of the Registrant (previously filed as part of Exhibit
10 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1988, and incorporated herein by reference to
such Report)
10.11B 1989 Deferred Compensation/Capital Accumulation Plan for
Directors of the Registrant (previously filed as part of Exhibit
10 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1990, and incorporated herein by reference to
such Report)
10.11C 1993 Deferred Compensation/Capital Accumulation Plan for
Directors of the Registrant (previously filed as part of Exhibit
10 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1993, and incorporated herein by reference to
such Report)
10.11D 1994 Deferred Compensation/Capital Accumulation Plan for
Directors of the Registrant (previously filed as part of Exhibit
10 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1994, and incorporated herein by reference to
such Report)
10.11E 1995 Deferred Compensation/Capital Accumulation Plan for
Directors of the Registrant (previously filed as part of Exhibit
10 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1995, and incorporated herein by reference to
such Report)
10.11F 1996 Deferred Compenstation/Capital Accumulation Plan for
Directors of the Registrant (previously filed as Exhibit 10.3 to
the Registrant's Quarterly Report on Form 10-Q dated October 31,
1995, and incorporated herein by reference to such Report)
10.12 Retirement Plan for Outside Directors of the Registrant
(previously filed as part of Exhibit 10 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31,
1990, and incorporated herein by reference to such Report)
35
<PAGE>
Exhibit Index (continued)
Exhibit
Number Description
------ -----------
10.13 Employee Stock Purchase Plan of the Registrant (previously filed
as part of Exhibit 10 to the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1992, and incorporated
herein by reference to such Report)
10.14A Employee Severance Pay Plan of the Registrant (previously filed
as part of Exhibit 10 to the Registrant's Annual Report on Form
10-K for the fiscal year ended July 31, 1992, and incorporated
herein by reference to such Report)
10.14B First Amendment of the Employee Severance Pay Plan of the
Registrant (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1995, and incorporated herein by reference to such
Report)
10.15A Form of Indemnification Agreement with Director between the
Registrant and each of the following: Robert J. Cronin, Theodore
Dimitriou, Richard F. Doyle, Curtis A. Hessler, Albert W. Isenman
III, William N. Lane III, William E. Olsen, John C. Pope and
Robert P. Rittereiser (previously filed as part of Exhibit 10 to
the Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1990, and incorporated herein by reference to
such Report)
10.15B Form of Addendum to Indemnification Agreement with Director
(Member of Profit Sharing Committee) between the Registrant and
each of the following: Robert J. Cronin and Theodore Dimitriou
(previously filed as part of Exhibit 10 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31,
1990, and incorporated herein by reference to such Report)
10.15C Form of Indemnification Agreement with Director (Member of Profit
Sharing Committee) between the Registrant and Robert P.
Rittereiser
10.16A Form of Indemnification Agreement with Officer between the
Registrant and each of the following: Thomas G. Brooker, Robert
J. Cronin, Bruce D'Angelo, Theodore Dimitriou, Michael O.
Duffield, Michael J. Halloran, Donald J. Hoffmann, Michael T.
Laudizio, Michael T. Leatherman, William J. Montanez, Michael M.
Mulcahy, and Wayne E. Richter (previously filed as part of
Exhibit 10 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1990, and incorporated herein by
reference to such Report)
36
<PAGE>
Exhibit Index (continued)
Exhibit
Number Description
------ -----------
10.16B Form of Addendum to Indemnification Agreement with Officer
(Trustee of Profit Sharing and Retirement Trust and Member of
Profit Sharing Committee) between the Registrant and each of the
following: Robert J. Cronin, Theodore Dimitriou and Michael J.
Halloran (previously filed as part of Exhibit 10 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
July 31, 1990, and incorporated herein by reference to such
Report)
10.16C Form of Addendum to Indemnification Agreement with Officer
(Member of Profit Sharing Committee) between the Registrant and
Michael O. Duffield (previously filed as part of Exhibit 10 to
the Registrant's Annual Report on Form 10-K for the fiscal year
ended July 31, 1995, and incorporated herein by reference to such
Report)
10.17A Acquisition Agreement dated as of July 18, 1991, by and among
Wallace Computer Services, Inc., a Delaware corporation, MGI
Industries, Inc., a New Jersey corporation, Colorforms
Incorporated, a Delaware corporation, Colorforms Image Center,
Inc., an Illinois corporation, Colorforms Mailing Services, Inc.,
an Illinois corporation, Evergreen Realty, a New York partnership,
Frank A. Leo, William J. O'Brien, Robert L. Patton, and R. Robert
Verniero, including Exhibits and General Schedules but excluding
Disclosure Schedules (previously filed as part of Exhibit 2 to
the Registrant's Current Report on Form 8-K dated August 20, 1991,
and incorporated herein by reference to such Report)
10.17B Amendment No. 1 dated as of August 7, 1991 to Acquisition
Agreement dated as of July 18, 1991 by and among Wallace Computer
Services, Inc., a Delaware corporation, MGI Industries, Inc., a
New Jersey corporation, Colorforms Incorporated, a Delaware
corporation, Colorforms Image Center, Inc., an Illinois
corporation, Colorforms Mailing Services, Inc., an Illinois
corporation, Evergreen Realty, a New York partnership, Frank A.
Leo, William J. O'Brien, Robert L. Patton, and R. Robert
Verniero, including exhibits and General Schedules but excluding
Disclosure Schedules (previously filed as part of Exhibit 2 to
the Registrant's Current Report on Form 8-K dated August 20,
1991, and incorporated herein by reference to the Report)
10.17C Supplemental Agreement No. l dated as of August 7, 1991 in
connection with Acquisition Agreement dated as of July 18, 1991,
as amended by Amendment No. l dated as of August 7, 1991, by and
among Wallace Computer Services, Inc., a Delaware corporation,
MGI Industries, Inc., a New Jersey corporation,
37
<PAGE>
Exhibit Index (continued)
Exhibit
Number Description
------ -----------
Colorforms Incorporated, a Delaware corporation, Colorforms Image
Center, Inc., an Illinois corporation, Colorforms Mailing
Services, Inc., an Illinois corporation, Evergreen Realty, a New
York partnership, Frank A. Leo, William J. O'Brien, Robert L.
Patton, and R. Robert Verniero (previously filed as part of
Exhibit 2 to the Registrant's Current Report on Form 8-K dated
August 20, 1991, and incorporated herein by reference to such
Report)
10.17D Supplemental Agreement No. 2 dated as of August 7, 1991, in
connection with Acquisition Agreement dated as of July 18, 1991,
as amended by Amendment No. l dated as of August 7, 1991, by and
among Wallace Computer Services, Inc., a Delaware corporation,
MGI Industries, Inc., a New Jersey corporation, Colorforms
Incorporated, a Delaware corporation, Colorforms Image Center,
Inc., an Illinois corporation, Colorforms Mailing Services, Inc.,
an Illinois corporation, Evergreen Realty, a New York
partnership, Frank A. Leo, William J. O'Brien, Robert L. Patton,
and R. Robert Verniero (previously filed as part of Exhibit 2 to
the Registrant's Current Report on Form 8-K dated August 20,
1991, and incorporated herein by reference to such Report)
10.17E Amendment No. 2 dated as of August 31, 1993, to Acquisition
Agreement dated as of July 18, 1991, by and among Wallace
Computer Services, Inc., a Delaware corporation (on its own
behalf and as successor by merger to MGI Industries, Inc., a New
Jersey corporation, and Colorforms Incorporated, a Delaware
corporation, Colorforms Image Center, Inc., an Illinois
corporation, and Colorforms Mailing Services, Inc., an Illinois
corporation), Evergreen Realty, a New York partnership, Frank A.
Leo, William J. O'Brien, Robert L. Patton, and R. Robert Verniero
(previously filed as part of Exhibit 10 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended July 31,
1993, and incorporated herein by reference to such Report)
10.18 Agreement made and entered into as of January 1, 1995 between
Registrant and Robert J. Cronin (previously filed as Exhibit 2 to
the Registrant's Current Report on Form 8-K dated June 14, 1995,
and incorporated herein by reference to such Report)
10.19 Form of Addendum to Indemnification Agreement with Officer for
FEC Employee Stock Ownership Trust between Registrant and each of
the following: Robert J. Cronin, Theodore Dimitriou and Michael
O. Duffield (previously filed as Exhibit 10.1 to the Registrant's
Quarterly Report on Form
38
<PAGE>
Exhibit Index (continued)
Exhibit
Number Description
------ -----------
10-Q dated April 30, 1996, and incorporated herein by reference
to such Report)
13 Annual Report - Fiscal 1996 of the Registrant (filed as part of
this Report only to the extent portions thereof are expressly
incorporated by reference in this report)
21 Subsidiary of the Company
23 Consent of Arthur Andersen LLP
27 Financial Data Schedule
39
<PAGE>
Exhibit 10.15C
INDEMNIFICATION AGREEMENT WITH DIRECTOR
(MEMBER OF PROFIT SHARING COMMITTEE)
INDEMNIFICATION AGREEMENT made and entered into between WALLACE COMPUTER
SERVICES, INC., a Delaware Corporation (the "Company"), and
____________________________________________________ (the "Director").
W I T N E S S E T H :
WHEREAS, the Director is a valued member of the Board of Directors of the
Company; and
WHEREAS, under the provisions of the Company's Certificate of Incorporation, as
in effect on the date hereof, the Company is obligated, to the fullest extent
permitted from time to time by applicable law, to hold harmless and indemnify
each person who is or was at any time a director of the Corporation from and
against any and all expenses (including attorneys' fees), judgments, fines,
amounts paid in settlement, and other liabilities and claims of any kind, that
any such person may at any time suffer or incur or become subject to as a result
of or in connection with his or her serving or having served at any time as a
director of the Company, except that the Company does not have any affirmative
obligation under its Certificate of Incorporation as in effect on the date
hereof to indemnify any person who is or was a director with respect to
expenses, judgments, fines, amounts paid in settlement, or other liabilities or
claims of any kind based upon or attributable to (i) any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) any acts or
omissions by the director which are not in good faith or which involve
intentional misconduct or deliberate dishonesty, (iii) any improper personal
profit or benefit by the director, or (iv) any income taxes in respect of
compensation received for services as a director (collectively, the "Non-
Indemnified Liabilities"); and
WHEREAS, the Director is a member of the Profit Sharing Committee under the
Company's Profit Sharing and Retirement Plan (the "Profit Sharing Committee");
and
WHEREAS, the Company and the Director desire to confirm that the obligation of
the Company to hold harmless and indemnify the Director extends to expenses
(including attorneys' fees), judgments, fines, amounts paid in settlement, and
other liabilities and claims of any kind, that the Director may at any time
suffer or incur or become subject to as a result of or in connection with his or
her serving or having served at any time as a member of the Profit Sharing
Committee (collectively, the "Profit Sharing Committee Liabilities").
<PAGE>
WHEREAS, due to the fact that the indemnification provisions of the Company's
Certificate of Incorporation may be amended, modified or repealed, that the
Company may be unable to continue to purchase and maintain adequate liability
insurance, and that there are other substantial uncertainties associated with
the indemnification provisions of the Delaware General Corporation Law and the
Company's Certificate of Incorporation and with liability insurance, the
Director does not regard the rights to indemnification granted to him under the
provisions of the Delaware General Corporation Law and the Company's Certificate
of Incorporation and under director and officer liability insurance as adequate
to protect him against the risks associated with service as a member of the
Profit Sharing Committee, and the Director may be unwilling to continue to serve
as a member of the Profit Sharing Committee in the absence of the benefits and
assurances provided to him under this Agreement; and
WHEREAS, the Company desires that the Director continue to serve as a member of
the Profit Sharing Committee.
NOW, THEREFORE, in order to induce the Director to continue to serve as a member
of the Profit Sharing Committee and in consideration of his continued service in
such capacity, the Company hereby agrees with the Director as follows:
1. Notwithstanding any amendment, modification or repeal of the indemnification
provisions of the Company's Certificate of Incorporation after the date hereof,
the Company shall, to the fullest extent permitted from time to time by
applicable law, hold harmless and indemnify the Director from and against any
and all Profit Sharing Committee Liabilities.
2. Anything contained in this Agreement to the contrary notwithstanding, the
Company shall not have any obligation to hold harmless or indemnify the Director
pursuant to this Agreement (a) with respect to any Non-Indemnified Liability or
(b) with respect to any Profit Sharing Committee Liability to the extent the
Director is entitled to and actually receives payment or reimbursement for such
Profit Sharing Committee Liability (i) from the Company other than pursuant to
this Agreement, (ii) under any policy of insurance, or (iii) from any third
party.
3. In the event any claim should at any time be made or threatened against the
Director with respect to or in connection with (i) any Profit Sharing Committee
Liability, or (ii) otherwise in his capacity as a member of the Profit Sharing
Committee, the Company shall, to the fullest extent permitted from time to time
by applicable law, advance the Director any and all costs and expenses
(including attorneys' fees) in investigating, defending or otherwise contesting
such claim; PROVIDED, HOWEVER, that (i) the Company shall not be obligated to
make any such advance to the Director unless and until the Director gives the
Company a written undertaking to repay any and all such advances if
<PAGE>
and to the extent it is ultimately determined that the Director is not entitled
to indemnification with respect to such claim, and (ii) the Company shall not be
obligated to make any such advance to the Director in respect of any claim if,
in the good faith determination of the Board of Directors of the Company made by
a majority vote of a quorum of disinterested directors based upon the facts then
known to the Board of Directors of the Company, such claim is with respect to
Non-Indemnified Liabilities.
4. If the Director determines that a claim made or threatened against him has
given rise to, or may give rise to, a right to indemnification under paragraph 1
hereof or a right to advancement of costs and expenses under paragraph 3 hereof,
the Director shall give the Company prompt written notice of such claim;
however, the failure to give the Company prompt written notice of a claim shall
not relieve the Company from any obligation it may have to the Director with
respect to such claim, under this Agreement or otherwise.
5. If a claim should be made or threatened against the Director which has given
rise to, or may give rise to, a right to indemnification under paragraph 1
hereof or a right to advancement of costs and expenses under paragraph 3 hereof,
and provided that such claim is not made or threatened in the name or on behalf
of the Company and there is no other conflict of interest between the Company
and the Director with respect to such claim, then:
(a) The Company shall have the right to participate, at its own cost and
expense, in the investigation, defense or other contest of such claim;
and
(b) The Company shall have the right to elect to assume the defense of
such claim on behalf of the Director (if applicable, jointly with any
third party who may have an obligation to hold harmless or indemnify
the Director with respect to such claim).
If the Company should elect to assume the defense of a claim on behalf of the
Director, then (i) the Company shall give the Director prompt written notice of
such election; (ii) the Company shall be obligated to defend such claim in good
faith and in a manner consistent with the best interests of the Director; (iii)
provided that the Company defends such claim in good faith and in a manner
consistent with the best interests of the Director and no conflict of interest
develops between the Company and the Director with respect to such claim, the
Company shall not be liable for any costs or expenses (including attorneys'
fees) incurred by the Director in connection with defending or otherwise
contesting such claim after he has received written notice of such election; and
(iv) the Company shall not settle or compromise such claim on any basis or in
any manner which would impose any liability, limitation or restriction of any
kind on the Director without his express written consent.
<PAGE>
6. The Company shall perform its obligations under this Agreement upon receipt
of written demand for such performance from the Director, and, if the Company
fails to perform its obligations under this Agreement on demand, the Director
may at any time thereafter bring legal action against the Company to obtain full
and complete performance of its obligations hereunder. In any action brought to
enforce this Agreement, upon a showing by the Director that a claim has been
asserted against him with respect to or in connection with any alleged act or
omission by him as a director of the Company, or any alleged neglect or breach
of duty by him as a director of the Company, or otherwise in his capacity as a
director of the Company, there shall be a presumption that the Director is
entitled to indemnification and advancement of costs and expenses from the
Company in respect of such claim, and the Company shall have the burden of
proving that the Director is, in fact, not entitled to indemnification and not
entitled to advancement of costs and expenses from the Company in respect of
such claim. If the Director is successful, in whole or in part, in any action
brought against the Company to obtain performance of its obligations under this
Agreement, the Director shall be entitled to recover from the Company (i) his
reasonable attorneys' fees and other reasonable costs and expenses in enforcing
this Agreement, together with (ii) interest on any and all amounts recovered by
him from the Company from the date written demand for payment or reimbursement
of such amounts was first received by the Company until the date such amounts
are paid or reimbursed at the rate equal to 2% over the prime rate as announced
from time to time by The First National Bank of Chicago (or any successor to
such bank), changing as and when such announced prime rate changes.
7. Nothing contained in this Agreement is intended to limit or restrict the
right of the Director to obtain indemnification or advancement of costs and
expenses under the provisions of the Delaware General Corporation Law as in
effect from time to time, under the provisions of the Company's Certificate of
Incorporation as in effect from time to time, or otherwise, and the rights of
the Director to obtain indemnification and advancement of costs and expenses
under this Agreement are in addition to any and all other rights the Director
may have from time to time to obtain indemnification or advancement of costs and
expenses from the Company or otherwise.
8. Any notice, demand or other communication to the Company under this Agreement
may be addressed to the Company at its principal office to the attention of its
Corporate Secretary.
9. This Agreement shall be governed by and construed in accordance with the law
of Delaware.
<PAGE>
10. This Agreement shall inure to the benefit of and be enforceable by the
Director and his estate, heirs, legatees and personal representatives and shall
be binding upon and enforceable against the Company and its successors and
assigns (including, without limitation, any successor by merger or consolidation
and any transferee of all or substantially all of its assets); and this
Agreement shall survive the termination of the Director's service as a member of
the Profit Sharing Committee for any reason.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
WALLACE COMPUTER SERVICES, INC., a
Delaware corporation
----------------------------------
By:
Title: Chairman of the Board
DIRECTOR:
----------------------------------
Name:
<PAGE>
EXHIBIT 21
The Registrant owns 100% of the Stock of Visible Computer Supply Corporation, an
Illinois Corporation.
40
<PAGE>
EXHIBIT 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of our
reports, dated September 4, 1996, included (or incorporated by reference) in
this Form 10-K, into the Company's previously filed Registration Statements on
Form S-8 (File No. 2-52229, No.2-52357, No. 2-60252, No. 2-63000, No. 2-70022,
No. 2-87821, No. 33-10353, No. 33-32706 and No. 33-86496).
Arthur Andersen LLP
Chicago, Illinois
October 24, 1996
41
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<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1995
<PERIOD-END> JUL-31-1996
<CASH> 23,618
<SECURITIES> 39,025
<RECEIVABLES> 152,133
<ALLOWANCES> (3,215)
<INVENTORY> 71,332
<CURRENT-ASSETS> 304,108
<PP&E> 557,069
<DEPRECIATION> (268,197)
<TOTAL-ASSETS> 695,850
<CURRENT-LIABILITIES> 97,870
<BONDS> 30,600
0
0
<COMMON> 45,587
<OTHER-SE> 464,856
<TOTAL-LIABILITY-AND-EQUITY> 695,850
<SALES> 862,287
<TOTAL-REVENUES> 862,287
<CGS> 538,373
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<INCOME-PRETAX> 118,478
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