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As filed with the Securities and Exchange Commission on December 8, 1997.
Registration No. 333-_____________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------
MEDICAL GRAPHICS CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1316712
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
350 OAK GROVE PARKWAY
SAINT PAUL, MINNESOTA 55127
(Address of Principal Executive Offices and zip code)
------------------------------
MEDICAL GRAPHICS CORPORATION
RESTATED NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
(Full title of the Plan)
------------------------------
Copy to:
Glenn D. Taylor, President Thomas G. Lovett, IV
Medical Graphics Corporation Kristin L. Johnson
350 Oak Grove Parkway Lindquist & Vennum P.L.L.P.
Saint Paul, Minnesota 55127 4200 IDS Center
(612) 484-4874 Minneapolis, MN 55402
(Name, address and telephone (612) 371-3270
number, including area code,
of agent for service)
--------------
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- -------------------------------------------------------------------------------
Common Stock, 100,000 shares $4.1875(1) $418,750(1) $127
$.05 par value,
to be issued pursuant
to Medical Graphics Corporation
Restated Non-Employee Director Compensation Plan
- -------------------------------------------------------------------------------
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) and (h) and based upon the closing price of the
Company's Common Stock on the Nasdaq SmallCap Market on December 3, 1997.
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INCORPORATION OF CONTENTS OF REGISTRATION STATEMENT BY REFERENCE
A Registration Statement on Form S-8 (File No. 33-80596) was filed with
the Securities and Exchange Commission covering the registration of shares
authorized for issuance under the Plan. The above Registration Statements
covering 150,000 shares are currently in effect. Pursuant to General
Instruction E of Form S-8, this Registration Statement is being filed to
register an additional 100,000 shares authorized for issuance under the Plan.
This Registration Statement should also be considered a post-effective
amendment to the previously filed Registration Statements. The contents of
the previously filed Registration Statements are incorporated herein by
reference.
PART I
Pursuant to Part I of Form S-8, the information required by Items 1 and 2
of Form S-8 is not filed as a part of this Registration Statement.
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
are hereby incorporated by reference:
(a) The Annual Report of the Company on Form 10-KSB for the fiscal year
ended December 31, 1996, as amended by Amendment No. 1 on Form
10-KSB/A.
(b) The Quarterly Reports of the Company on Form 10-QSB for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997.
(c) The Definitive Proxy Statement dated May 2, 1997 for the Annual
Meeting of Shareholders held on May 22, 1997.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 prior to
the completion or termination of this offering of shares of Common Stock
shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The current description of the Company's Common Stock is as follows:
COMMON STOCK. The Company has one class of Capital Stock registered
pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Exchange
Act"), Common Stock, $.05 par value. The Company is authorized to issue up
to 9,500,000 shares of Common Stock. No share of Common Stock is entitled to
preference over any other share, and each share is equal to any other share
in all respects. Holders are entitled to one vote for each share held of
record at each meeting of shareholders. In any distribution of capital
assets, whether voluntary or involuntary, holders are entitled to receive pro
rata the assets remaining after creditors have
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been paid in full. Holders of Common Stock have no preemptive rights. The
outstanding shares are, and the Common Stock offered hereby upon payment
therefore will be, fully paid and nonassessable.
CUMULATIVE VOTING. There is no cumulative voting for the election of
directors. Accordingly, the owners of a majority of shares of Common Stock
outstanding may elect all of the directors, if they choose to do so, and the
owners of the balance of such shares will not be able to elect any directors.
DIVIDEND POLICY. The Company has adopted the policy of retaining all of
its earnings to finance the growth of its business and, accordingly, does not
anticipate payment of any dividends in the foreseeable future.
CLASS A STOCK. The Class A Stock has a liquidation preference of $3.375
per share. Each Class A share is currently convertible into one share of
Common Stock and has voting rights equal to the Common Stock into which it is
convertible. The Company has a total of 444,445 shares of Class A Stock
outstanding of 500,000 shares authorized for issuance.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation provide that a director is not
liable to the Company or its shareholders for monetary damages for a breach
of fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Company or its shareholders; (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or knowing violation of the law; (iii) under Sections 302A.559 or 80A.23 of
the Minnesota Statutes; (iv) for any transaction from which the director
derived an improper personal benefit; or (v) for any act or omission
occurring prior to the date such indemnification provision became effective.
Provisions regarding indemnification of officers and directors of the Company
are also contained in Section 45 of the Company's Bylaws.
Section 302A.521 of the Minnesota Business Corporation Act provides that
a corporation shall indemnify any person made or threatened to be made a
party to a proceeding by reason of acts or omissions performed in their
official capacity as an officer, director, employee or agent of the
corporation against judgments, penalties, fines, including without
limitation, excise taxes assessed against such person with respect to an
employee benefit plan, settlements, and reasonable expenses, including
attorneys' fees and disbursements, incurred by such person in connection with
the proceeding if, with respect to the acts or omissions of such person
complained of in the proceeding, such person (i) has not been indemnified by
another organization or employee benefit plan for the same expenses with
respect to the same acts or omissions; (ii) acted in good faith; (iii)
received no improper personal benefit and Minnesota Statutes, Section
302A.255 (regarding conflicts of interest), if applicable, has been
satisfied; (iv) in the case of a criminal proceeding, has no reasonable cause
to believe the conduct was unlawful; and (v) in the case of acts or omissions
by persons in their official capacity for the corporation, reasonably
believed that the conduct was in the best interests of the corporation, or in
the case of acts or omissions by persons in their capacity for other
organization, reasonably believed that the conduct was not opposed to the
best interests of the corporation. In addition, Section 302A.521, subd. 3, of
the Minnesota Statutes requires payment or reimbursement by the corporation,
upon written request, of reasonable expenses (including attorneys' fees)
incurred by a person in advance of the final disposition of a proceeding in
certain instances if a decision as to required indemnification is made by a
disinterested majority of the Board of Directors
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present at a meeting at which a disinterested quorum is present, or by a
designated committee of the Board, by special legal counsel, by the
shareholders or by a court.
In addition, the Company has entered into indemnification agreements with
each of its directors and officers, which agreements provide for
indemnification to the full extent permitted by Minnesota law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
All options granted pursuant to the Plan were granted to directors of the
Company and were exempt pursuant to Section 4(2) of the Securities Act of
1933, as amended.
ITEM 8. EXHIBITS. (Filed electronically herewith)
EXHIBIT
4.1 Medical Graphics Corporation Restated Non-Employee Director
Compensation Plan, as amended
5.1 Opinion of Lindquist & Vennum P.L.L.P
23.1 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1)
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Ernst & Young LLP
24.1 Power of Attorney (included on signature page)
ITEM 9. UNDERTAKINGS.
(a) The Company hereby undertakes to:
(1) File, during any period in which offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information
in the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act of 1933 if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.
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(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company'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 incorporated by reference in the Registration Statement shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers, and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer 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 small business issuer of expenses
incurred or paid by a director, officer or controlling person of the small
business issuer 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 small business issuer will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction 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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that is 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 Saint Paul, State of Minnesota, on December 4,
1997.
MEDICAL GRAPHICS CORPORATION
By \s\ Glenn D. Taylor
---------------------------------------------
Glenn D. Taylor, President and
Chief Executive Officer
POWER OF ATTORNEY
The undersigned officers and directors of Medical Graphics Corporation
hereby constitute and appoint Glenn D. Taylor and Mark W. Sheffert, or either
of them, with power to act one without the other, our true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for us and in our stead, in any and all capacities to sign
any and all amendments (including post-effective amendments) to this
Registration Statement and all documents relating thereto, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing necessary or advisable to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities indicated on December 4, 1997.
SIGNATURE
\s\ Glenn D. Taylor
- ------------------------------------------
Glenn D. Taylor, President,
Chief Executive Officer
(Principal Executive Officer) and Director
\s\ Dale H. Johnson
- ------------------------------------------
Dale H. Johnson, Chief Financial
Officer (Principal Financial
Officer)
\s\ Mark W. Sheffert
- ------------------------------------------
Mark W. Sheffert, Chairman
\s\ Anthony J. Adducci
- ------------------------------------------
Anthony J. Adducci, Director
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\s\ Gerald T. Knight
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Gerald T. Knight, Director
\s\ W. Edward McConaghay
- ------------------------------------------
W. Edward McConaghay, Director
\s\ Donald C. Wegmiller
- ------------------------------------------
Donald C. Wegmiller, Director
\s\ John C. Penn
- ------------------------------------------
John C. Penn, Director
\s\ John D. Wunsch
- ------------------------------------------
John D. Wunsch, Director
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EXHIBIT 4.1
MEDICAL GRAPHICS CORPORATION RESTATED
NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
SECTION 1. PURPOSE.
This plan shall be known as the "Medical Graphics Corporation Restated
Non-Employee Director Compensation Plan" and is hereinafter referred to as
the "Plan." The purpose of the Plan is to promote the interests of Medical
Graphics Corporation, a Minnesota corporation (the "Company"), by enhancing
its ability to attract and retain the services of experienced and
knowledgeable independent directors and by providing additional incentive for
these directors to increase their interest in the Company's long-term success
and progress.
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Compensation Committee of the Board
of Directors (the "Committee") of three or more persons appointed by the
Board of Directors of the Company. Grants of restricted stock and stock
options under the Plan and the amount and nature of the awards to be granted
shall be described in Section 6. However, all questions of interpretation of
the Plan or of any options issued under it shall be determined by the
Committee and such determination shall be final and binding upon all persons
having an interest in the Plan.
SECTION 3. PARTICIPATION IN THE PLAN.
Each director of the Company shall be eligible to participate in the Plan
unless such director is an employee of the Company or any subsidiary of the
Company.
SECTION 4. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Section 12 hereof, the stock to be subject to
options and restricted stock grants under the Plan shall be authorized but
unissued shares of the Company's common stock, par value $.05 per share (the
"Common Stock"). Subject to adjustment as provided in Section 12 hereof, the
maximum number of shares with respect to which restricted stock grants and
options may be exercised under this Plan shall be 250,000 shares. If an option
or restricted stock grant under the Plan expires, or for any reason is canceled
or terminated, any shares, that have not been purchased upon exercise of the
option prior to the expiration or termination date or in the case of restricted
stock grants are canceled, shall again be available for restricted stock and
options thereafter granted during the term of the Plan.
SECTION 5. NON-QUALIFIED STOCK OPTIONS.
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All options granted under the Plan shall be non-qualified options that do
not quality as incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS AND RESTRICTED STOCK GRANTS.
Each option granted under this Plan shall be evidenced by a written
agreement in such form as the Committee shall from time to time approve,
which agreements shall comply with and be subject to the following terms and
conditions:
(a) ONE-TIME OPTION GRANT. Beginning May 23, 1997, an option to
purchase 10,000 shares of Common Stock shall be granted automatically on
the first business day immediately following the date an eligible director
is first elected to the Board of Directors of the Company.
(b) ANNUAL RESTRICTED STOCK GRANTS. Subject to the provisions of
Section 9 hereof, 1,000 shares of restricted Common Stock shall be granted
automatically to each eligible director on the first business day
immediately following each annual meeting of the Company's shareholders
(the "Annual Restricted Stock Grant Date") held during the term of the Plan
beginning with the 1998 annual meeting of shareholders and, in addition,
each Committee Chairman shall receive an additional 1,000 shares of
restricted stock. Beginning on the Annual Restricted Stock Grant Date in
1998, the Chairman of the Board shall receive a 5,000 share restricted
stock grant. The Restriction Period (as defined in Section 9(c)) with
respect to such stock grants in this Section 6(b) shall be one year.
(c) MEETING OPTION GRANTS. Beginning with the first Board
and/or Committee meetings following the 1997 Annual Meeting of
shareholders, directors shall receive an option to purchase 1,500
shares per Board meeting attended in person up to a maximum of 9,000
shares per director per year and the Chairman of the Board shall
receive 3,000 per meeting attended in person up to a maximum of 18,000
shares per year. In addition, a director shall receive an option to
purchase 500 shares of Common Stock for each Committee meeting
attended in person up to a maximum of 1,500 shares per director per
year.
(d) DISCRETIONARY GRANTS. The Board of Directors may authorize
the cancellation of previously granted options if the holder thereof
consents to such cancellation and may issue additional options to
purchase shares of Common Stock under this Plan in such numbers as the
Board of Directors approves at a meeting or by a writing in lieu of
meeting.
(e) PERIOD OF OPTIONS. Options shall terminate upon the expiration
of 10 years from the date on which they were granted.
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(f) EXERCISE OF OPTIONS.
(I) Subject to Section 12 hereof, options granted under the Plan
shall not be exercisable for a period of one year after the date on
which they were granted, but thereafter will be exercisable in full at
any time or from time to time during the term of the option.
(ii) The exercise of any option granted here under shall only be
effective at such time as counsel to the Company shall have determined
that the issuance and delivery of Common Stock pursuant to such
exercise will not violate any federal or state securities or other
laws. An optionee desiring to exercise an option may be required by
the Company, as a condition of the effectiveness of any exercise of an
option granted hereunder, to agree in writing that all Common Stock to
be acquired pursuant to such exercise shall be held for his or her own
account without a view to any distribution thereof, that the
certificates for such shares shall bear an appropriate legend to that
effect and that such shares will not be transferred or disposed of
except in compliance with applicable federal and state securities
laws.
(iii) An optionee electing to exercise an option shall give
written notice to the Company of such election and of the number of
shares subject to such exercise. The full purchase price of such
shares shall be tendered with such notice of exercise. Payment shall
be made to the Company in cash (including check, bank draft, money
order or by delivery of previously owned shares).
(g) EFFECT OF DEATH. If the optionee shall die prior to the time the
option is fully exercised, such option may be exercised at any time within
one year after his or her death by the personal representatives or
administrators of the optionee or by any person or persons to whom the
option is transferred by will or the applicable laws of descent and
distribution, to the extent of the full number of shares the optionee was
entitled to purchase under the option on the date of death and subject to
the condition that no option shall be exercisable after the expiration of
the term of the option.
SECTION 7. OPTION EXERCISE PRICE.
The option exercise price per share for the shares covered by each option
shall be at such price established by the Board but in no event less than the
greater of the "fair market value" of a share of Common Stock as of the date on
which the option is granted, as determined pursuant to Section 10 hereof or
$3.375 per share.
SECTION 8. TIME FOR GRANTING OPTIONS.
Unless the Plan shall have been discontinued as provided in Section 14
hereof, the Plan shall terminate on May 22, 2007. No option may be granted
after such termination, but termination of the
<PAGE>
Plan shall not, without the consent of the optionee, alter or impair any
rights or obligations under any option theretofore granted.
SECTION 9. RESTRICTED STOCK.
(a) ADMINISTRATION. Shares of restricted stock may be issued either alone
or in addition to other awards granted under the Plan. The Committee shall
designate members of the Board of Directors and consultants to the Company to
whom, and the time or times at which, grants of restricted stock will be made,
the number of shares to be awarded, the time or times within which such awards
may be subject to forfeiture, and all other conditions of the awards. The
provisions of restricted stock awards need not be the same with respect to each
recipient.
(b) AWARDS AND CERTIFICATES. The prospective recipient of an award of
shares of restricted stock shall not have any rights with respect to such award,
except as specified in Section 6(b) hereof, but subject to Section 11 hereof,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the then applicable terms and conditions.
(I) Each participant shall be issued a stock certificate in respect
of shares of restricted stock awarded under the Plan. Such certificate
shall be registered in the name of the participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such award, substantially in the following form:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) of the Medical Graphics
Corporation Restated Non-Employee Director Compensation Plan
and Award Agreement entered into between the registered
owner and the Company. Copies of such Plan and any award
agreement are on file in the offices of Medical Graphics
Corporation, 350 Oak Grove Parkway, St. Paul, Minnesota
55127."
(ii) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
restricted stock award, the participant shall have delivered a stock power,
endorsed in blank, relating to the Common Stock covered by such award.
(c) RESTRICTIONS AND CONDITIONS. The shares of restricted stock awarded
pursuant to the Plan shall be subject to the following restrictions and
conditions:
(I) Subject to the provisions of this Plan and the award agreement,
if any, during a period set by the Committee commencing with the date of
such award (the "Restriction Period"), the participant shall not be
permitted to sell, transfer, pledge or assign shares of restricted stock
awarded under the Plan except as provided in Section 12 hereof, in no event
<PAGE>
shall the Restriction Period be less than one (1) year. Within these
limits, the Committee may provide for the lapse of such restrictions in
installments where deemed appropriate.
(ii) Except as provided in paragraph (c)(i) of this Section 9, the
participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a shareholder of the Company, including the right to vote
the shares and the right to receive any cash dividends. The Committee, in
its sole discretion, may permit or require the payment of cash dividends to
be deferred and, if the Committee so determines, reinvested in additional
shares of Restricted Stock (to the extent shares are available under
Section 4). Certificates for shares of unrestricted common stock shall be
delivered to the grantee promptly after, and only after, the period of
forfeiture shall have expired without forfeiture in respect of such shares
of Restricted Stock.
(iii) Subject to the provisions of the award agreement, if any,
and paragraph (c)(iv) of this Section 9, upon termination of the
directorship for any reason during the Restriction Period, all shares still
subject to restriction shall be forfeited by the participant.
(iv) In the event of special hardship circumstances of a participant
whose directorship is terminated (other than for cause), including death,
disability, or in the event of an unforeseeable emergency of a participant
still in service, the Committee may, in its sole discretion, when it finds
that a waiver would be in the best interest of the Company, waive in whole
or in part any or all remaining restrictions with respect to such
participant's shares of restricted stock.
SECTION 10. FAIR MARKET VALUE OF COMMON STOCK.
For the purposes of the Plan, the fair market value of the Common Stock on
a given date shall be the average of the closing bid and asking price of the
Common Stock as reported on the Nasdaq National Market or Nasdaq SmallCap
Market, if the Common Stock is then being quoted on the Nasdaq National Market
or Nasdaq SmallCap Market. If on the date as of which the fair market value is
being determined the Common Stock is not publicly traded, the Committee shall
make a good faith attempt to determine such fair market value and, in connection
therewith, shall take such actions and consider such factors as it deems
necessary or advisable.
SECTION 11. LIMITATION OF RIGHTS.
(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan, nor the
granting of an option or restricted stock nor any other action taken
pursuant to the Plan, shall constitute, or be evidence of, any agreement or
understanding, express or implied, that the Company will retain a director
for any period of time, or at any particular rate of compensation.
(b) NO SHAREHOLDER RIGHTS FOR OPTIONS. An optionee shall have no
rights as a shareholder with respect to the shares covered by options and
restricted stock until the date of the issuance to such optionee of a stock
certificate therefor, and no adjustment will be
<PAGE>
made for cash dividends or other rights for which the record date is prior
to the date such certificate is issued.
SECTION 12. ADJUSTMENTS TO COMMON STOCK; SALE, MERGER, LIQUIDATION.
If there shall be any change in the Common Stock through merger,
consolidation, reorganization, recapitalization, stock dividend (of whatever
amount), stock split or other change in the corporate structure, appropriate
adjustments in the Plan and outstanding options shall be made. In the event of
any such changes, adjustments shall include, where appropriate, changes in the
aggregate number of shares subject to the Plan, the number of shares subject to
outstanding options and the option exercise prices thereof in order to prevent
dilution or enlargement of option rights.
In the event of the sale by the Company of substantially all of its assets
and the consequent discontinuance of its business, or in the event of a merger,
exchange, consolidation or liquidation of the Company, the Board shall, in its
sole discretion, in connection with the Board's adoption of the plan for sale,
merger, exchange, consolidation or liquidation, provide for one or more of the
following with respect to restricted stock awards and options that are, on such
date, still subject to a restriction period: (i) the removal of the restrictions
on any or all outstanding options or restricted stock awards; (ii) the complete
termination of this Plan and forfeiture of outstanding options or restricted
stock awards prior to a date specified by the Board; and (iii) the continuance
of the Plan with respect to the restricted stock awards which were outstanding
as of the date of adoption by the Board of such plan for sale, merger, exchange,
consolidation or liquidation and provide to participants holding options and/or
restricted stock awards the right to an equivalent number of restricted shares
of stock of the corporation succeeding the Company by reason of such sale,
merger, exchange, consolidation or liquidation. The grant of an option or a
restricted stock award pursuant to the Plan shall not limit in any way the right
or power of the Company to make adjustments, reclassifications, reorganizations
or changes of its capital or business structure or to merge, exchange ro
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.
SECTION 13. EFFECTIVE DATE OF THE PLAN; EFFECTIVE DATE OF THE RESTATED PLAN.
The Restated Plan shall be effective as of May 22, 1997, the date
shareholders of the Company approved an increase in the number of shares of
Common Stock authorized under the Plan from 150,000 to 250,000.
SECTION 14. AMENDMENT OF THE PLAN.
The Board may suspend or discontinue the Plan or revise or amend it in any
respect whatsoever, provided, however, that without approval of the shareholders
of the Company, no revision or amendment shall be made that (a) absent such
shareholder approval, would cause Rule 16b-3, as promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended,
or any successor rule or regulation thereto, to become unavailable with respect
to the Plan, or (b) requires the approval of the Company's shareholders under
any rules or regulations of the National Association of Securities Dealers, Inc.
that are applicable to the Company.
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The Board shall not alter or impair any option theretofore granted under the
Plan without the consent of the holder of the option.
SECTION 15. GOVERNING LAW.
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws or the State of Minnesota and construed
accordingly.
<PAGE>
EXHIBIT 5.1
December 4, 1997
Medical Graphics Corporation
350 Oak Grove Parkway
St. Paul, MN 55127
RE: OPINION OF COUNSEL AS TO LEGALITY OF 100,000 SHARES OF COMMON STOCK TO
BE REGISTERED UNDER THE SECURITIES ACT OF 1933
Ladies and Gentlemen:
This opinion is furnished in connection with the registration under the
Securities Act of 1933 on Form S-8 of 100,000 shares of Common Stock, $.05
par value per share, of Medical Graphics Corporation (the "Company") offered
to non-employee directors pursuant to Medical Graphics Corporation Restated
Non-Employee Director Compensation Plan (the "Plan").
As general counsel for the Company, we advise you that it is our opinion,
based on our familiarity with the affairs of the Company and upon our
examination of pertinent documents, that the 100,000 shares of Common Stock to
be offered to non-employee directors by the Company under the Plan will, when
paid for and issued, be validly issued and lawfully outstanding, fully paid and
nonassessable shares of Common Stock of the Company.
The undersigned hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an Exhibit to the Registration Statement
with respect to said shares of Common Stock under the Securities Act of 1933.
Very truly yours,
LINDQUIST & VENNUM P.L.L.P.
/s/ Lindquist & Vennum P.L.L.P.
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Medical Graphics Corporation on Form S-8 relating to the Restated
Non-Employee Director Compensation Plan of our report dated April 4, 1997
(April 15, 1997 as to the third paragraph of Note 11) on the 1996 financial
statements, appearing in the Annual Report on Form 10-KSB of Medical Graphics
Corporation for the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
/s/ Deloitte & Touche LLP
Minneapolis, Minnesota
December 2, 1997
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Medical Graphics Corporation on Form S-8 pertaining to the Restated Non-Employee
Director Compensation Plan of our report dated February 16, 1996 with respect to
the consolidated financial statements of Medical Graphics Corporation included
in its Annual Report (Form 10-KSB) for the year ended December 31, 1996 filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 2, 1997
