<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
[X] Definitive Proxy Statement RULE 14C-5(d)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Graphic Industries, Inc.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Graphic Industries, Inc.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF GRAPHIC INDUSTRIES, INC. APPEARS HERE]
GRAPHIC INDUSTRIES, INC.
Dear Graphic Industries, Inc. Shareholder:
You are cordially invited to attend the 1995 Annual Meeting of Shareholders
to be held at the Swissotel, 3391 Peachtree Road, Atlanta, Georgia, on Tuesday,
May 23, 1995, at 10:00 a.m., local time.
The principal business of the meeting will be to elect directors for the
ensuing year, to consider a proposal to approve the adoption of the Graphic
Industries, Inc. Associate Stock Purchase Plan and to consider a proposal to
approve the adoption of the Graphic Industries, Inc. 1995 Stock Option Plan.
During the meeting, we will also review the results of the year ended January
31, 1995 and report on the outlook for fiscal 1996.
We would appreciate your completing, signing, dating and returning to the
Company the enclosed proxy card in the envelope provided at your earliest
convenience. If you decide to attend the meeting, you may, of course, revoke
your proxy and personally cast your votes.
Sincerely,
/s/ Mark C. Pope III
Mark C. Pope III
Chairman
April 21, 1995
<PAGE>
GRAPHIC INDUSTRIES, INC.
2155 MONROE DRIVE, N.E.
ATLANTA, GEORGIA 30324
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
MAY 23, 1995
The 1995 Annual Meeting of Shareholders of Graphic Industries, Inc. will be
held at 10:00 a.m., local time, on Tuesday, May 23, 1995, at Swissotel Atlanta,
3391 Peachtree Road, Atlanta, Georgia.
The meeting is called for the following purposes:
1. To elect directors for the ensuing year;
2. To consider and act upon a proposal to approve the adoption of the
Graphic Industries, Inc. Associate Stock Purchase Plan;
3. To consider and act upon a proposal to approve the adoption of the
Graphic Industries, Inc. 1995 Stock Option Plan; and
4. To vote on such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed April 6, 1995, as the record date for the
determination of shareholders entitled to notice of and to vote at the meeting.
YOU ARE REQUESTED TO SIGN, DATE, COMPLETE AND RETURN THE ENCLOSED PROXY SO
THAT YOUR SHARES WILL BE REPRESENTED, WHETHER OR NOT YOU PLAN TO BE PRESENT AT
THE MEETING.
By Order of the Board of Directors
/s/ Donald P. Hunnicutt
Donald P. Hunnicutt
Secretary
Atlanta, Georgia
April 21, 1995
<PAGE>
GRAPHIC INDUSTRIES, INC.
2155 Monroe Drive, N.E.
Atlanta, Georgia 30324
PROXY STATEMENT
This statement is furnished in connection with the solicitation by the
Board of Directors of Graphic Industries, Inc. (the "Company" or "Graphic
Industries") of proxies to be voted at the 1995 Annual Meeting of Shareholders
(the "Annual Meeting") of the Company to be held on Tuesday, May 23, 1995, and
at any and all adjournments of the Annual Meeting. This Proxy Statement and the
enclosed proxy card will be first mailed on or about April 21, 1995, to the
shareholders of record of the Company (the "Shareholders") on April 6, 1995 (the
"Record Date").
Any proxy given pursuant to this solicitation and received in time for the
Annual Meeting will be voted with respect to all shares represented by it and
will be voted in accordance with the instructions, if any, given in the proxy.
If instructions are not given in the proxy, it will be voted in favor of the
proposals to elect the nominees named herein to the Board of Directors, to
approve the adoption of the Graphic Industries, Inc. Associate Stock Purchase
Plan (the "Stock Purchase Plan") and to approve the adoption of the Graphic
Industries, Inc. 1995 Stock Option Plan (the "1995 Plan").
Shareholders who execute proxies may revoke them at any time before they
are voted by filing with the Secretary of the Company either an instrument
revoking the proxy or a duly executed proxy bearing a later date. Proxies also
may be revoked by any Shareholder present at the Annual Meeting who expresses a
desire to vote his or her shares in person. The holders of a majority of the
shares of the Common Stock of the Company (the "Common Stock") must be present
in person or represented by proxy to constitute a quorum and act upon the
election of the three directors to be elected by that class and the holders of a
majority of the shares of the Class B Common Stock (the "Class B Stock") must be
present in person or represented by proxy to constitute a quorum and act upon
the election of the seven directors to be elected by that class. The holders of
a majority of the votes that may be cast by the holders of the Common Stock and
the Class B Stock (voting together as a single class) must be present in person
or represented by proxy to constitute a quorum and act upon the proposed Stock
Purchase Plan and the 1995 Plan. Abstentions and broker non-votes will be
counted for purposes of obtaining a quorum on all matters presented at the
Annual Meeting. Failure of the necessary quorums to be represented at the Annual
Meeting will necessitate adjournment and will subject the Company to additional
expense.
A plurality of the votes cast by the holders of Common Stock entitled to
vote is required to elect three of the nominees to the Board and the plurality
of the votes cast by the holders of Class B Stock entitled to vote is required
to elect the other seven nominees to the Board. Because the Company intends to
take advantage of federal securities regulations applicable to plans approved by
its shareholders, Rule 16b-3(b)(1) promulgated under the Securities Exchange Act
of 1934 requires the affirmative vote of a majority of the votes represented at
the Annual Meeting and entitled to be cast by the holders of the Common Stock
and Class B Stock of the Company, voting as a single class, to approve the Stock
Purchase Plan and the 1995 Plan. Accordingly, abstentions will have no effect on
the election of directors, but will have the effect of negative votes with
respect to the approval of the Stock Purchase Plan and the 1995 Plan. In
contrast, broker "non-votes" resulting from a broker's inability to vote a
client's share on non-discretionary matters (such as the Stock Purchase Plan and
the 1995 Plan) will have no effect on the approval of such matters.
There were 6,156,988 shares of Common Stock and 4,519,117 shares of Class B
Stock outstanding as of the Record Date and therefore entitled to notice and to
vote at the Annual Meeting. Each share of Common Stock is entitled to one vote
and each share of Class B Stock is entitled to ten votes on each proposal to be
presented at the Annual Meeting; however, with respect to the election of
directors, only the Common Stock will vote with respect to three of the nominees
and only the Class B Stock will vote with respect to the other seven nominees.
1
<PAGE>
Mark C. Pope III ("Mr. Pope"), Chairman of the Board and Chief Executive
Officer of the Company, intends to vote his Class B Stock (which represents
99.1% of the Class B Stock outstanding as of the Record Date) in favor of the
seven nominees to be voted on by the holders of Class B Stock and in favor of
the proposals to approve the Stock Purchase Plan and the 1995 Plan.
YOUR BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES
The Board of Directors of the Company presently consists of ten members.
The current terms of all existing directors expire upon the election and
qualification of the directors to be elected at the Annual Meeting. The persons
named as proxies intend to vote the proxies for the election as directors of the
persons named below, each of whom is currently a director, unless the
shareholders direct otherwise in their proxies. In the event any of the persons
named below refuses or is unable to serve as a director (which is not now
anticipated), the persons named as proxies reserve full discretion to vote for
such other person or persons as may be nominated.
Three of the nominees (Messrs. Andrews, Kirtland and Strayhorn) will be
voted upon only by the holders of Common Stock. The remaining nominees (Messrs.
Pope, Pope IV, Wood, J. Pope, C. Pope, Herring and Hatcher) will be voted upon
only by the holders of Class B Stock.
The following table sets forth the number of shares and percentage of the
outstanding shares of Common Stock beneficially owned by (i) each director
nominee, (ii) each executive officer named in the Executive Compensation tables
set forth on pages 9 through 11 (the "Named Executive Officers"), (iii) each
person known by management of the Company to own beneficially more than 5% of
any class of the Company's voting securities and (iv) all directors and
executive officers as a group, as of the Record Date. An asterisk indicates
ownership of less than 1% of the class of Common Stock.
OWNERSHIP OF SHARES
<TABLE>
<CAPTION>
COMMON STOCK
---------------------------------------------------------
SOLE SHARED
VOTING OR VOTING OR ATTRIBUTED
NAME OF INVESTMENT INVESTMENT BENEFICIAL PERCENT
BENEFICIAL OWNER POWER POWER OWNERSHIP OF CLASS(1)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mark C. Pope III 944,217(2) 0(3) 15,200(4) 15.6(2)(3)(4)
Mark C. Pope IV 98,765 0 0 1.6
William A. Wood, Jr. 9,100 0 0 *
John R. Pope 53,950 0(3) 0 *
Clifford M. Kirtland, Jr. 8,125(5) 0 0 *
Ralph N. Strayhorn, Jr. 6,830 0 1,860(6) *
Warren E. Andrews 12,000 22,500(7) 0 *
Carter D. Pope 200,000 0 0 3.2
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
---------------------------------------------------------
SOLE SHARED
VOTING OR VOTING OR ATTRIBUTED
NAME OF INVESTMENT INVESTMENT BENEFICIAL PERCENT
BENEFICIAL OWNER POWER POWER OWNERSHIP OF CLASS(1)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alvan A. Herring, Jr. 31,166 0 0 *
James A. Hatcher 0 0(3) 108,950(8) 1.8(3)
David S. Fraser 1,000 0 0 *
Jim R. Tidwell 1,000 0 0 *
All directors and
executive officers as a
group (14 persons) 1,377,041(2) 22,500(3) 126,010 24.8(9)
</TABLE>
(1) Calculated by taking into account all shares as to which the indicated
person or group has sole or shared voting or investment power or attributed
beneficial ownership, but without regard to the shares of Common Stock
issuable upon conversion of either (i) shares of Class B Stock held by that
person or group or (ii) any of the Company's Convertible Debentures, and
without regard to the disclaimers of beneficial ownership referred to in
Notes (3), (4), (5), and (8) of this table.
(2) Does not include 4,478,092 shares of Class B Stock (99.1% of the Class B
Stock outstanding as of the Record Date) held by Mr. Pope, each of which is
convertible at the option of the holder into one share of Common Stock. If
these shares of Class B Stock were included, Mr. Pope's Percent of Class of
Common Stock would be 51.0%.
(3) Does not include an aggregate of 18,461 shares of Common Stock issuable
upon conversion of $300,000 face value of the Company's Convertible
Debentures held by the Betty Williams Marital Trust. Mr. Pope, Mr. J. Pope
and Mr. Hatcher's spouse are the co-trustees of the trust. Mr. Pope, Mr. J.
Pope and Mr. Hatcher disclaim beneficial ownership of the shares held by
the Betty Williams Marital Trust.
(4) Mr. Pope disclaims beneficial ownership of the indicated shares, which are
beneficially owned, controlled and held of record by his spouse.
(5) Does not include an aggregate of 3,692 shares of Common Stock issuable upon
conversion of $60,000 face value of the Company's Convertible Debentures.
If these shares were included, Mr. Kirtland's Percent of Class of Common
Stock still would be less than one percent.
(6) Mr. Strayhorn disclaims beneficial ownership of the indicated shares, which
are beneficially owned, controlled and held of record by his spouse.
(7) Jointly owned with Mr. Andrews' spouse, with whom he shares voting and
investment power.
(8) The indicated shares are beneficially owned, controlled and held of record
by Mr. Hatcher's spouse.
(9) If the shares of Common Stock issuable upon conversion of the Class B Stock
referenced in Note (2) and the shares of Common Stock issuable upon
conversion of the Convertible Debentures referenced in Note (3) and Note
(5) to this table were included, the group's Percent of Class of Common
Stock would be 56.5%.
3
<PAGE>
The following table sets forth for each director nominee (based upon information
supplied by him) his name, age, positions with the Company, principal occupation
and business experience for the past five years and prior service as a director
of the Company.
(1) NOMINEES TO BE CONSIDERED BY THE HOLDERS OF THE CLASS B STOCK
<TABLE>
<CAPTION>
POSITION WITH COMPANY,
PRINCIPAL OCCUPATION,
BUSINESS EXPERIENCE, DIRECTOR
NAME OTHER DIRECTORSHIPS AGE SINCE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Mark C. Pope III (1) Chairman of the Board and 70 1970
Chief Executive Officer of
Graphic Industries since
1970; President of Graphic
Industries, 1970-1989
Mark C. Pope IV (1) President of Graphic 44 1978
Industries since 1989;
Vice President of Graphic
Industries, 1984-1989;
Assistant Secretary of
Graphic Industries, 1979-
1989; President of
Williams Printing Company,
1982-1987 (2)
William A. Wood, Jr. Vice President of Graphic 75 1978
Industries since 1986;
President of The Stein
Printing Company, Inc.,
1978-1986 (2)
John R. Pope (1) President of Williams Printing 50 1970
Company since 1990; Executive
Vice-President of Williams
Printing Company, 1989-1990;
Vice President-Sales of Williams
Printing Company, 1969-1989 (2)
Carter D. Pope (1) President of Atlanta Blue 39 1988
Print Company since 1989;
Executive Vice President of
Atlanta Blue Print Company,
1987-1989; Vice President
of Atlanta Blue Print
Company, 1986-1987; Salesman,
The Stein Printing Company,
1982-1986 (2)
Alvan A. Herring, Jr. Vice President of Graphic 51 1990
Industries since 1990;
President of Foote & Davies,
1989-1990 (commercial
printers); Senior Vice
President of Foote & Davies,
1982-1989
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH COMPANY,
PRINCIPAL OCCUPATION,
BUSINESS EXPERIENCE, DIRECTOR
NAME OTHER DIRECTORSHIPS AGE SINCE
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
James A. Hatcher(1) Vice President and 43 1992
General Counsel of Cox Cable
Communications, Inc., since
1992; Secretary and General
Counsel of Cox Enterprises,
Inc., 1988-1992; Secretary
of various subsidiaries of
Cox Enterprises, Inc.
1988-1992.
(2) NOMINEES TO BE CONSIDERED BY THE HOLDERS OF THE COMMON STOCK
Clifford M. Kirtland, Jr. Private Investor; Chairman 71 1984
of the Board of Cox
Communications, Inc., 1981-
1983; Oxford Industries, Inc.
(apparel manufacturer),
Shaw Industries, Inc.
(carpet manufacturer),
Adesa Corp.
(automobile auctioneers),
The Salomon Bros. Fund, Inc.
(investment company),
The Salomon Brothers Investors
Fund (investment company), The
Salomon Brothers Capital Fund
(investment company), and The Law
Companies Group, Inc. (professional
consulting and environmental engineers,
materials and testing laboratory)
Ralph N. Strayhorn, Jr. Of counsel to Petree Stockton 72 1984
(formerly Petree Stockton &
Robinson) since 1988; General
Counsel and Secretary of The
Wachovia Corporation and
Wachovia Bank and Trust
Company, N.A., 1978-1988
Warren E. Andrews Chairman of the Board of 74 1984
W. E. Andrews Co., Inc.,
1952-1989 (acquired by
Graphic Industries in
1984) (2)
</TABLE>
(1) Mark C. Pope IV, John R. Pope and Carter D. Pope are sons and Mr. Hatcher
is the son-in-law of Mark C. Pope III.
(2) Atlanta Blue Print Company, Williams Printing Company, The Stein Printing
Company, Inc. and W. E. Andrews Co., Inc. are wholly-owned subsidiaries of
the Company.
5
<PAGE>
Members of the Board of Directors of the Company who are not officers of
the Company or any of its subsidiaries receive annual directors' fees of $5,000,
plus $350 for each meeting of the Board or the Audit Committee attended and
reimbursement for travel expenses. Directors who are officers of the Company or
any of its subsidiaries receive $150 for each Board meeting attended and are
reimbursed for travel expenses. For meetings held during fiscal 1995, non-
officer directors received total fees as follows: Messrs. Strayhorn and
Kirtland, as members of the Board of Directors and the Audit Committee, received
total fees of $7,100 each, Messrs. Andrews and Hatcher received total fees of
$6,400. Mr. Pope, Mr. Pope IV, Mr. Wood, Mr. J. Pope, Mr. C. Pope and Mr.
Herring, directors who are also officers, received total fees of $600 each.
CERTAIN TRANSACTIONS
Certain of the Company's executive officers and directors have participated
in transactions between the Company and entities in which they have a material
interest. See "Compensation Committee Interlocks and Insider Participation" for
a description of these transactions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Pope and Mr. Pope IV are executive officers of the Company and also
serve on its Executive Committee, which determines executive officers' salary
and bonuses.
Mr. Andrews serves on the Stock Option Committee, which awards compensation
in the form of stock options to executive officers and other employees of the
Company.
In January 1995, Mr. Pope purchased land from the Company for $750,000 in
cash, which represents the higher of two MAI appraisals obtained. In connection
with this transaction, the Company realized a gain of approximately $450,000.
The purchase was approved by the Board of Directors of the Company, which
determined that the purchase price did not exceed the fair market value of the
property.
MEETINGS AND COMMITTEES
During fiscal 1995, the Board of Directors met four times and did not have
a nominating or compensation committee. The Executive Committee of the Board of
Directors, which consists of Mr. Pope and Mr. Pope IV, determines salary and
bonus compensation for the Company's executive officers. The Executive Committee
met 12 times during fiscal 1995. The Stock Option Committee, which consists of
Messrs. Pope and Andrews, determined stock option awards for all executive
officers (excluding Mr. Pope) and other key associates of the Company. The Stock
Option Committee met 4 times during fiscal 1995. The Audit Committee met two
times during fiscal 1995 and consisted of Messrs. Kirtland, Strayhorn and Pope
IV. The Audit Committee is responsible for reviewing and making recommendations
regarding the Company's employment of independent auditors, the annual audit of
the Company's financial statements and the Company's internal accounting
practices and policies. Each director of the Company attended at least 75% of
the meetings of the Board of Directors and the committees of which he was a
member.
6
<PAGE>
EXECUTIVE COMPENSATION
The Company has no standing compensation committee; however, the Executive
Committee of the Board of Directors determines salary and bonus compensation for
all executive officers of the Company and the Stock Option Committee determines
stock option awards for all executive officers (excluding Mark C. Pope III) and
other key associates of the Company. The Executive Committee is composed of Mark
C. Pope III, Chairman of the Board and CEO, and Mark C. Pope IV, President. The
Stock Option Committee is composed of Mr. Pope III and Warren E. Andrews, a
director of the Company.
COMPENSATION REPORT OF THE EXECUTIVE AND STOCK OPTION COMMITTEES OF THE BOARD
OF DIRECTORS OF GRAPHIC INDUSTRIES, INC.
The Company seeks to attract and retain key executives who will assist the
Company in meeting its annual and long-term sales and profit goals, thereby
serving the interest of the Company's Shareholders. The elements of the
Company's executive compensation are annual cash compensation (salary and
bonuses) and stock options. The Executive Committee believes that the demands
and expectations of clients and the Company warrant better than median levels of
compensation. The Company's compensation practices are designed to achieve the
following goals:
1. Provide salaries that are competitive with those paid to executives in
similar positions at private and public companies in each of the Company's
key market areas.
2. Create a link between the executive's compensation and the Company's
performance through stock options and bonus opportunities.
3. Align the financial interest of the executives with that of the
shareholders by means of stock options and bonus opportunities in order to
increase shareholder value.
The cash compensation of executive officers (including the CEO and
President) is reviewed annually and adjustments are considered in view of the
Executive Committee's assessment of 1) the Company's sales, profit and stock
price performance; 2) the executive officers' individual leadership and
experience; and 3) compensation levels of executives in similar positions at
private and public companies in each of the Company's key market areas. Stock
options are granted from time to time to provide incentives to executives to
work toward financial objectives that support total shareholder returns in the
form of market price appreciation and dividends. The Company's Named Executive
Officers received options in fiscal 1995 to provide such an incentive.
The Company provides medical and other similar benefits to its executive
officers on the same basis as made available to other employees of the Company.
Mr. Pope and Mr. Andrews cannot receive any stock options under the
Company's 1988 Incentive Stock Option Plan, 1991 Stock Option Plan or the
proposed 1995 Stock Option Plan because Mr. Pope and Mr. Andrews serve on the
committee administering the Company's Stock Option Plans and must remain
"disinterested" under applicable securities laws and rules.
Submitted by the members of the Executive Committee and the Stock Option
Committee of The Board of Directors of Graphic Industries, Inc.
MARK C. POPE III MARK C. POPE IV WARREN E. ANDREWS
7
<PAGE>
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock with the
cumulative total return of the S&P 500 Stock Index and the cumulative total
return for a peer group for the period of five years commencing on January 31,
1990 and ending on January 31, 1995.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG GRAPHIC INDUSTRIES, INC. THE S&P 500 INDEX AND A PEER GROUP**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement period GRAPHIC S&P PEER
(Fiscal Year Covered) INDUSTRIES, INC. 500 GROUP
- --------------------- ---------------- ------- -------
<S> <C> <C> <C>
Measurement PT -
1/90 $ 100.00 $ 100.00 $ 100.00
1/91 $ 68.00 $ 108.00 $ 93.00
1/92 $ 72.00 $ 133.00 $ 101.00
1/93 $ 100.00 $ 147.00 $ 109.00
1/94 $ 103.00 $ 166.00 $ 129.00
1/95 $ 128.00 $ 167.00 $ 127.00
</TABLE>
* Assumes $100 invested on January 31, 1990 in Graphic Industries, Inc. S&P 500
Stock Index and a Peer Group constructed by the Company. Total return assumes
reinvestment of dividends.
** The Graphic Industries Peer Group is comprised of nine publicly-held printing
companies with operations in the commercial printing industry similar to
those of the Company. The companies in the peer group are: Cadmus
Communications Corp., Courier Corp., Devon Group, Inc., R.R. Donnelley & Sons
Co., Lawson Mardon Group, Mickelberry Corporation, Moore Corporation Limited,
Quebecor, Inc. and Waverly, Inc.
8
<PAGE>
EXECUTIVE COMPENSATION TABLES
The following tables set forth certain information required by the
Securities and Exchange Commission relating to various forms of compensation of
executive officers of the Company with respect to the periods presented.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------
AWARDS PAYOUTS
------------------------------------------------------------------------
OTHER ANNUAL RESTRICTED LONG-TERM ALL OTHER
COMPENSATION STOCK OPTIONS/ INCENTIVE PLAN COMPENSATION
FISCAL SALARY BONUS (1994 AND 1995) AWARDS SARS PAYOUTS (1994 AND 1995)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#)(1) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mark C. Pope III 1995 $348,000 0 0 0 0 0 $3,000(2)
Chairman & CEO 1994 $319,000 0 0 0 0 0 4,497(2)
1993 $319,000 0 0 0 0 4,364(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Mark C. Pope IV 1995 $298,100 0 0 0 10,000 0 $2,775(2)
President 1994 $240,000 0 0 0 15,000 0 3,280(2)
1993 $205,000 0 0 0 0 0 2,183(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Alvan A. Herring, Jr. 1995 $225,500 0 0 0 7,500 0 $3,000(2)
Vice President 1994 $213,800 0 0 0 0 0 4,269(2)
1993 $198,000 0 0 10,000 0 3,527(2)
- ------------------------------------------------------------------------------------------------------------------------------------
Jim R. Tidwell 1995 $145,000 0 0 0 0 0 $2,810(2)
Vice President 1994 (3) - - - - - -
1993 (3) - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
David S. Fraser 1995 $101,596 0 0 0 13,000 0 0
CFO & Treasurer 1994 (3) - - - - - -
1993 (3) - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Options granted in fiscal 1993, fiscal 1994 and fiscal 1995 were granted
pursuant to the Graphic Industries, Inc. 1991 Stock Option Plan.
(2) These amounts represent the Company's matching contributions to the named
executives' 401(k) accounts, under the Company's Profit Sharing Plan,
during the indicated years.
(3) The indicated person was not an executive officer of the Company between
1993 and 1995.
9
<PAGE>
FISCAL 1995 OPTION GRANTS
This table presents information regarding fiscal 1995 option grants to the
named executive officers. The Company has no outstanding stock appreciation
rights and granted no stock appreciation rights during fiscal 1995.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1995
- ------------------------------------------------------------------------------------------------------
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term
- ------------------------------------------------------------------------------------------------------
% of Total Options
Options Granted to Exercise or
Granted Employees in Base Price Expiration 5% 10%
Name (#) Fiscal Year(3) ($/Sh) Date ($) ($)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Pope III - - - - - -
- ------------------------------------------------------------------------------------------------------
Mr. Pope IV 5,000(1) 2.6% 9.00 1/31/96 6,200 8,650
5,000(1) 2.6% 9.00 1/31/97 8,750 14,000
- ------------------------------------------------------------------------------------------------------
Mr. Herring 3,750(1) 2.0% 9.00 1/31/96 4,650 6,487
3,750(1) 2.0% 9.00 1/31/97 6,563 10,500
- ------------------------------------------------------------------------------------------------------
Mr. Tidwell 2,500(1) - 9.00 1/31/96 3,100 4,325
2,500(1) - 9.00 1/31/97 4,375 7,000
- ------------------------------------------------------------------------------------------------------
Mr. Fraser 2,666(2) 1.4% 8.75 1/31/96 3,972 5,279
2,666(2) 1.4% 8.75 1/31/97 5,332 8,131
2,667(2) 1.4% 8.75 1/31/98 6,774 11,281
2,500(1) 1.3% 9.00 1/31/96 3,100 4,325
2,500(1) 1.3% 9.00 1/31/97 4,375 7,000
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) These stock options were granted on May 24, 1994 at an exercise price equal
to the then current fair market value of the Common Stock pursuant to the
Graphic Industries, Inc. 1991 Stock Option Plan and vest in one-half annual
installments beginning on January 1, 1996. Upon a merger, consolidation or
other reorganization of the Company involving the exchange, conversion,
adjustment or other modification of outstanding options, optionees will be
entitled to receive shares of stock, other securities or other property to
which terms of the agreement of merger, consolidation or other
reorganization would entitle the optionee to receive had he been a holder
of record of the shares of Common Stock as to which he could exercise the
option.
(2) These stock options were granted on May 25, 1994 at an exercise price equal
to the then current fair market value of the Common Stock pursuant to the
Graphic Industries, Inc. 1991 Stock Option Plan and vest in one third
annual installments beginning on January 1, 1996. Upon a merger,
consolidation or other reorganization of the Company involving the
exchange, conversion, adjustment or other modification of outstanding
options, optionees will be entitled to receive shares of stock, other
securities or other property to which terms of the agreement of merger,
consolidation or other reorganization would entitle the optionee to receive
had he been a holder of record of the shares of Common Stock as to which he
could exercise the option.
(3) Based on options to purchase 191,800 shares granted in fiscal 1995.
10
<PAGE>
INDIVIDUAL OPTION EXERCISES IN FISCAL 1995 AND VALUES AT JANUARY 31, 1995
This table presents information regarding fiscal 1995 option exercises and
the value of unexercised options held at January 31, 1995.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
FISCAL YEAR-END OPTION VALUE
- -------------------------------------------------------------------------------------
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END AT FY-END
(#) ($)(2)
SHARES
ACQUIRED
ON EXERCISE VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($)(1) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mr. Pope III 0 0 0/0 0/0
- -------------------------------------------------------------------------------------
Mr. Pope IV 0 0 0/17,500 0/$21,525
- -------------------------------------------------------------------------------------
Mr. Herring 3,333 $12,899 0/10,834 0/$18,528
- -------------------------------------------------------------------------------------
Mr. Tidwell 3,333 $12,899 0/8,334 0/$16,653
- -------------------------------------------------------------------------------------
Mr. Fraser 0 0 0/13,000 0/$11,750
- -------------------------------------------------------------------------------------
</TABLE>
(1) Represents the difference between the market price of the shares on the
date of exercise and the exercise price.
(2) Represents the value of unexercised, in-the-money options at January 31,
1995, based upon the $9.75 closing price of the Common Stock on that date.
Amounts have been rounded to the nearest dollar.
11
<PAGE>
PROPOSAL 2 - PROPOSAL TO APPROVE THE ADOPTION OF THE AMENDMENT AND
RESTATEMENT OF THE COMPANY'S ASSOCIATE STOCK PURCHASE PLAN
INTRODUCTION
Effective February 1, 1995, the Board of Directors adopted the amendment
and restatement of the Graphic Industries, Inc. Employee Stock Purchase Plan and
renamed that Plan the Graphic Industries, Inc. Associate Stock Purchase Plan
(the "Stock Purchase Plan"). The Stock Purchase Plan is set forth in Appendix A
to this proxy statement and the following summary is qualified in its entirety
by reference to Appendix A.
The purpose of the Stock Purchase Plan is to enable eligible associates of
the Company to purchase Company Common Stock on advantageous terms and thereby
allow such associates to share in the success of the Company and to encourage
them to remain in the service of the Company. Accordingly, the Board of
Directors has approved and recommends a vote in favor of the Stock Purchase
Plan.
DESCRIPTION OF THE STOCK PURCHASE PLAN
Under the terms of the Stock Purchase Plan, eligible associates of the
Company may be granted rights to purchase shares of Company Common Stock, $.10
par value. The maximum number of shares of Common Stock reserved for issuance
under the Stock Purchase Plan is established by the action of the Board of
Directors. Currently 500,000 shares of Common Stock are reserved for issuance
under the Stock Purchase Plan. This number of shares may be adjusted as a result
of events such as stock dividends, stock splits, recapitalization, merger or
otherwise.
The Stock Purchase Plan will be administered by a committee of the Board of
Directors which must consist of not fewer than two directors. No person may
become a member of the committee if he has been granted or awarded equity
securities pursuant to the Stock Purchase Plan or any other plan of the Company
or any of its subsidiaries for at least one year prior to his service on the
committee, if such grant or award would cause that person to be not
"disinterested" for purposes of Rule 16b-3 as promulgated pursuant to the
Securities Exchange Act of 1934. Presently, it is expected that Mr. Mark C.
Pope, III and Mr. Mark C. Pope, IV will constitute the committee.
The Board of Directors may amend or terminate the Stock Purchase Plan at
any time. However, the Board of Directors may condition any amendment on the
approval of the shareholders of the Company if such approval is necessary or
advisable with respect to tax, securities or other applicable laws to which the
Company, the Stock Purchase Plan or the eligible associates are subject.
Any associate of the Company who is age 18 or over and who is employed by
the Company or by any of its wholly-owned subsidiary corporations for the
purposes of the Federal Insurance Contributions Act is eligible to elect to
purchase Common Stock through the Stock Purchase Plan. As of April 20, 1995,
approximately 2,960 associates were eligible to participate in the Stock
Purchase Plan.
To participate in the Stock Purchase Plan, each eligible associate must
execute and deliver to the committee an agreement specifying the amount the
associate wishes to contribute to the Stock Purchase Plan for the purchase of
shares of Common Stock (an "Enrollment Agreement"). An Enrollment Agreement is
effective as soon as reasonably practicable after the date the agreement is
delivered to the brokerage firm retained to purchase Common Stock for the
benefit of eligible associates (the "Broker"). An Enrollment Agreement continues
in force until it is revoked by the Company as provided in the Stock Purchase
Plan or revoked or modified by the eligible associate by written notice
delivered to the committee of the Stock Purchase Plan. All revocations or
modifications by an eligible associate become effective as of the January 1,
April 1, July 1, or October 1 beginning after the date the revocation or
modification is received by the committee.
Each eligible associate who signs an Enrollment Agreement thereby
authorizes the Company to withhold from payroll checks, during each pay period
during which the Enrollment Agreement is in
12
<PAGE>
effect, the amount designated on the agreement for the purchase of Common Stock.
The amount designated may not be less than $10 per pay period and no more than
$200 per week. Each eligible associate who does not have an Enrollment Agreement
in effect for January 1995 and who executes an agreement effective in February
or March of 1995, and each eligible associate who has an Enrollment Agreement in
effect for January 1995 and executes an Enrollment Agreement effective in
February or March 1995 to increase contributions by at least $5 per week, will
receive a Company contribution pursuant to the Stock Purchase Plan for $100 for
the purchase of Common Stock pursuant to the Stock Purchase Plan. Each month the
Company will transfer amounts withheld from payroll checks in the preceding
month (and with respect to February and March 1995 only, Company contributions)
to the Broker who will use these transferred amounts to purchase from the
Company whole and fractional shares of Common Stock for the participant's
benefit. The amount of stock purchased will be determined by dividing the
associate contributions withheld from payroll checks in the preceding month
(plus any Company contributions made as described above) by 90% of the closing
purchase price per share of Common Stock as determined on the exchange on which
the Common Stock is traded on the most recent trading date preceding the
purchase. The Company will pay all fees and commissions owed the Broker
resulting from the purchase of shares of stock through the Stock Purchase Plan.
In addition, each eligible associate who has an Enrollment Agreement in
effect may purchase up to $10,000 per year of Common Stock directly from the
Company by completing the required form. The Company will issue directly to each
eligible associate as many whole shares of Common Stock as may be purchased with
the amount elected on the applicable form and paid to the Company. Any cash
remaining will be refunded to the associate. The Company will sell the shares
directly to participants at the same purchase price as shares which are bought
through payroll withholding for the month in which the associate pays for the
shares, but without the 10% discount. As of April 17, 1995, the closing purchase
price per share of Common Stock was $9.75.
A participant who retires, dies or terminates employment will be deemed to
have withdrawn from the Stock Purchase Plan as of the date of retirement, death
or termination of employment. The Enrollment Agreement shall be deemed revoked,
all future contributions to the Stock Purchase Plan on his behalf and any
withholdings from his payroll checks shall cease and all such withholdings,
contributions and any cash dividends paid on Common Stock held for the benefit
of the associate which have not been used to purchase Common Stock and all cash
dividends declared and not paid prior to death or termination will be paid to
the terminated associate or the personal representative of the deceased
associate within a reasonable period of time.
FEDERAL TAX TREATMENT
A participant in the Stock Purchase Plan will recognize compensation,
taxable as ordinary income, on the amount that is deducted from his or her
paycheck, the amount contributed by the Company to the Stock Purchase Plan on
his or her behalf, the dollar amount of the 10% discount on the purchases made
by the Broker for the participant and fees or commissions paid to the Broker on
the participant's behalf. Those amounts will also be subject to payroll taxes,
such as FICA, which will be deducted from the participant's paycheck. The
Company will be entitled to a deduction for an amount equal to the amount
recognized by the participant as taxable income (compensation).
A subsequent taxable disposition of the shares of Common Stock held as a
capital asset will result in capital gain or loss measured by the difference
between the amount realized when the stock is sold and the allocated "adjusted
basis" of the stock which is sold. In general, the "adjusted basis" of a
particular block of stock will be equal to the amount of compensation
recognized, and treated as taxable income, with respect to that particular block
of stock. The total amount of compensation recognized with respect to a
particular block of stock will be allocated on a pro rata basis to each share of
stock in that particular block. The gain or loss will be treated as a long-term
capital gain or loss if the shares of stock are held for more than one year.
Stock and/or cash dividends may be paid with respect to Common Stock. In
general, stock dividends which are distributed on a pro rata basis to all
shareholders are not recognized as taxable
13
<PAGE>
income by the shareholders. If a nontaxable stock dividend is received, the
basis of the stock with respect to which the stock dividend was made must be
allocated between the stock previously held and the additional stock received as
a dividend.
If a cash dividend is paid, the participant will recognize taxable income
even though the cash dividend paid to his or her account with the Broker is
automatically invested in additional stock. The basis of the stock purchased
will be equal to its cost.
The preceding summary should not be construed as legal, tax or investment
advice. Each participant should consult his or her own counsel, accountant or
business advisor as to the legal, tax (federal and state) and related
consequences of purchase of stock under the Stock Purchase Plan and subsequent
sale of the Company stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
PROPOSAL 3 -- PROPOSAL TO APPROVE THE ADOPTION OF
THE GRAPHIC INDUSTRIES, INC. 1995 STOCK OPTION PLAN
INTRODUCTION
Effective March 31, 1995, the Board of Directors adopted, subject to the
approval of the shareholders, the Graphic Industries, Inc. 1995 Stock Option
Plan (the "1995 Plan"). The 1995 Plan will terminate on March 31, 2005, unless
it is discontinued by the Board of Directors at an earlier date. The 1995 Plan
is set forth in its entirety as Appendix B to this proxy statement and the
following summary is qualified in its entirety by reference to Appendix B.
The purpose of the 1995 Plan is to secure and retain the services of
officers, key associates and directors of the Company, thereby promoting the
interests of the Company and its shareholders by giving such officers, key
associates and directors of the Company and its subsidiaries an opportunity to
invest in the future success of the Company.
DESCRIPTION OF THE 1995 PLAN
The 1995 Plan permits the granting of either incentive or nonqualified
stock options representing the right to purchase up to an aggregate of 1,000,000
shares of the Company's Common Stock, $.10 par value, with no more than 250,000
of those shares issuable pursuant to options granted to members of the Board of
Directors. To the extent required under Section 162(m) of the Internal Revenue
Code and its regulations for compensation to be treated as qualified
performance-based compensation, the maximum number of shares with respect to
which options may be granted during any one-year period to any individual may
not exceed 100,000. As of April 21, 1995, approximately 175 associates were
eligible to participate in the 1995 Plan.
If ratified and approved by the shareholders, the 1995 Plan will be deemed
to have been effective as of March 31, 1995, and options may be granted
thereunder from such time through March 31, 2005. The 1995 Plan will be
administered by a committee of the Board of Directors which must consist of not
fewer than two directors. No person may become a member of the committee if he
has been granted or awarded equity securities pursuant to the 1995 Plan or any
other plan of the Company or any of its subsidiaries for at least one year prior
to his service on the committee, if such grant or award would cause that person
to be not "disinterested" for purposes of Rule 16b-3 as promulgated pursuant to
the Securities Exchange Act of 1934. The committee determines which key
associates, directors and officers of the Company and its subsidiaries will be
eligible to receive options and determines the terms and provisions of the stock
option agreements made under the 1995 Plan (the "Agreements").
14
<PAGE>
Presently, it is expected that Mr. Mark C. Pope, III and Mr. Warren E. Andrews
will constitute the committee, following shareholder approval of the 1995 Plan.
The 1995 Plan provides for the Company to indemnify committee members under
certain circumstances.
The Committee adjusts the number of shares reserved for issuance and any
outstanding options, both as to the number of option shares and the option
price, for any increase or decrease in the number of outstanding shares
resulting from stock splits, stock dividends, subdivisions or combinations of
shares, reclassifications, mergers or consolidations or other similar events.
The committee will not adjust outstanding options for cash dividends or the
issuance to optionees of rights to subscribe for additional stock or securities
of the Company.
The Board of Directors may, insofar as permitted by law, amend or terminate
the 1995 Plan without shareholder approval; provided, however, that the Board of
Directors may condition any amendment on the approval of the shareholders of the
Company if such approval is necessary or advisable with respect to tax,
securities or other applicable laws to which the Company, the 1995 Plan,
optionees or eligible associates are subject.
The purchase price for Common Stock to be issued upon the exercise of stock
options must be paid as set forth in the Agreements, which may provide for
payment to be made in cash, by delivery to the Company of shares that have been
owned by the holder for at least six months prior to the date of exercise, by
receipt of the exercise price in cash from a broker, dealer, or other
"creditor", or in any other form or manner that is acceptable to the committee.
Stock options are not transferable by an optionee other than by will or the laws
of descent and distribution. The term during which options may be exercised will
be determined in each case by the committee, provided that the term of incentive
stock options must expire no later than 10 years (five years with respect to
incentive stock options held by 10% owners) from the date of grant.
Incentive stock options under the 1995 Plan must be granted at an exercise
price not less than 100% of the fair market value of the shares on the date the
option is granted (110% as to any 10% owner). Incentive stock options may not be
granted to the extent the aggregate fair market value, determined at the time
the committee grants the option, of stock with respect to which stock options
intended to meet the requirements of Section 422 of the Internal Revenue Code
are exercisable for the first time by an optionee during any calendar year under
all plans of the Company and its subsidiaries exceeds $100,000.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion outlines generally the federal income tax
consequences of participation in the 1995 Plan. Individual circumstances may
vary these results. The federal income tax law and regulations are frequently
amended, and each participant should rely on his or her own tax counsel for
advice regarding federal income tax treatment under the 1995 Plan.
A participant will not recognize income upon the grant of a nonqualified
stock option. At the time the participant exercises a nonqualified option or
portion thereof, he or she will recognize compensation taxable as ordinary
income in an amount equal to the excess of the fair market value of the stock on
the date the option is exercised over the price paid for the stock, and the
Company will then be entitled to a corresponding deduction. However, if the
recipient is subject to Section 16(b) of the Exchange Act, the date on which the
fair market value of the shares transferred is determined will be the earlier of
the last day of the six-month period beginning on the date the "property" is
"purchased" or the first day on which a sale of the "property purchased" will
not subject the recipient to suit under Section 16(b) of the Exchange Act.
Alternatively, if such a recipient makes a timely election under Section 83(b)
of the Internal Revenue Code, such fair market value will be determined on the
date the shares are transferred pursuant to the exercise without regard to the
effect of Section 16(b) of the Exchange Act. The recipient will recognize
ordinary income in the year in which the fair market value of the shares
transferred is determined. The Company generally will be entitled to a federal
income tax
15
<PAGE>
deduction equal to the amount of ordinary income recognized by the recipient
when such ordinary income is recognized by the recipient, provided the Company
satisfies applicable federal income tax withholding requirements.
Depending on the period the shares of Common Stock are held after exercise,
the sale or other taxable disposition of shares acquired through the exercise of
a non-qualified option generally will result in a short- or long-term capital
gain or loss equal to the difference between the amount realized on such
disposition and the fair market value of such shares when the non-qualified
option was exercised.
A participant who exercises an incentive stock option will not be taxed at
the time he or she exercises his or her option or a portion thereof. Instead, he
or she will be taxed at the time he or she sells the stock purchased pursuant to
the option. To receive the treatment applicable to incentive stock options, the
optionee must be an associate on the date of grant and must remain an associate
until three months before the date of exercise of the option. If the optionee
does not sell the stock prior to two years from the date of grant of the option
and one year from the date the stock is transferred to him or her, the gain will
be capital gain and the Company will not get a corresponding deduction.
If shares of stock transferred pursuant to the exercise of an incentive
stock option are disposed of at a gain within two years from the date the option
is granted or within one year from the date the option is exercised, the
optionee generally will recognize ordinary income equal to the lesser of (1) the
gain recognized (i.e., the excess of the amount realized on the disposition over
the exercise price) or (2) the excess of the fair market value of the shares
transferred upon exercise over the exercise price for such shares. If the
Optionee is subject to Section 16(b) of the Exchange Act, special rules may
apply to determine the amount of ordinary income recognized on the disposition.
The balance, if any, of the Optionee's gain over the amount treated as ordinary
income on disposition generally will be treated as long- or short-term capital
gain depending upon whether the holding period applicable to long-term capital
assets is satisfied. The Company normally would be entitled to a federal income
tax deduction equal to any ordinary income recognized by the optionee, provided
the Company satisfies applicable federal income tax withholding requirements.
If the optionee sells the stock for less than the amount he or she paid for
the stock prior to the one or two year periods indicated above, no amount will
be taxed as ordinary income and the loss will be taxed as a capital loss.
Exercise of an incentive stock option may subject a participant to, or
increase a participant's liability for, the alternative minimum tax.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.
16
<PAGE>
AUDITORS
The firm of Ernst & Young has served as the Company's independent public
accountants since 1983 and the Board of Directors intends to reappoint this firm
for fiscal 1996. A representative of this firm is expected to attend the Meeting
to respond to questions from Shareholders and to make a statement if he so
desires.
SHAREHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Any Shareholder of the Company wishing to submit a proposal for action at
the Company's annual meeting of shareholders in 1995 and desiring the proposal
to be considered for inclusion in the Company's proxy materials relating thereto
must provide a written copy of the proposal to the management of the Company at
its principal executive offices not later than January 21, 1996. A shareholder
desiring to submit proposals must be the record or beneficial owner of at least
one percent or $1,000 in market value of the Company's shares, must have held
the shares for at least one year and continue to hold the shares through the
date of the meeting, and must otherwise comply with the rules of the Securities
and Exchange Commission relating to shareholder proposals.
ANNUAL REPORT
The Company's 1995 Annual Report to Shareholders is being mailed to the
Company Shareholders with this proxy statement. The Annual Report is not part of
the proxy soliciting material.
GENERAL
The Board of Directors does not know of any other matters to be presented
at the Meeting for action by Shareholders. However, if any other matters
requiring a vote of the Shareholders arise at the Meeting or any adjournment
thereof, it is intended that votes will be cast pursuant to the proxies with
respect to such matters in accordance with the best judgment of the persons
acting under the proxies.
The Company will pay the cost of soliciting proxies in the accompanying
form. In addition to solicitation by use of the mail, certain officers and
regular employees of the Company may solicit the return of proxies by telephone,
telegram, or personal interview. The Company may request brokerage houses and
custodians, nominees and fiduciaries to forward soliciting materials to their
principals, the beneficial owners of common stock of the Company, and will
reimburse them for their reasonable out-of-pocket expenses.
A list of Shareholders entitled to be present and vote at the Meeting will
be available during the Meeting for inspection by Shareholders who are present.
You are requested to mark, date, sign, and return the enclosed proxy
promptly so that your shares will be represented at the Meeting, whether or not
you plan to be present at the Meeting. An envelope has been provided for that
purpose. No postage is required if mailed in the United States.
Atlanta, Georgia
April 21, 1995
17
<PAGE>
APPENDIX A
GRAPHIC INDUSTRIES, INC.
ASSOCIATE STOCK PURCHASE PLAN
THIS INDENTURE, made on the 31st day of January, 1995, by GRAPHIC
INDUSTRIES, INC., a corporation organized and existing under the laws of the
State of Georgia (hereinafter called the "Corporation");
W I T N E S S E T H :
WHEREAS, the Corporation maintains the Graphic Industries, Inc. Associate
Stock Purchase Plan under an indenture dated September 22, 1987 (the "Old
Plan");
WHEREAS, the Corporation desires to amend the Old Plan to increase the
amount of stock of the Corporation which an associate can purchase under the
Plan and to make the other changes set forth herein;
NOW, THEREFORE, effective February 1, 1995, the Corporation does hereby
amend and restate and rename the Old Plan as the Graphic Industries, Inc.
Associate Stock Purchase Plan (the "Plan") so that it shall read in its entirety
as follows:
A-1
<PAGE>
GRAPHIC INDUSTRIES, INC.
ASSOCIATE STOCK PURCHASE PLAN
TABLE OF CONTENTS
Page No.
SECTION 1 DEFINITIONS ........................................... 1
SECTION 2 TERM .................................................. 1
SECTION 3 ELIGIBILITY AND ENROLLMENT ............................ 1
SECTION 4 ASSOCIATE CONTRIBUTIONS ............................... 2
SECTION 5 CORPORATION CONTRIBUTIONS ............................. 2
SECTION 6 PURCHASE OF STOCK ..................................... 2
SECTION 7. STOCK CERTIFICATES AND DIVIDENDS ...................... 3
SECTION 8. DEATH OR TERMINATION OF EMPLOYMENT .................... 3
SECTION 9. ADMINISTRATIVE COMMITTEE .............................. 4
SECTION 10. GENERAL MATTERS ....................................... 5
A-2
<PAGE>
SECTION 1.
DEFINITIONS
1.1 "Administrative Committee" means the committee appointed by the Board
of Directors to administer the Plan.
1.2 "Board of Directors" means the Board of Directors of the Corporation.
1.3 "Broker" means the brokerage firm retained to purchase stock for the
benefit of Associates.
1.4 "Calendar Quarter" means each three-month period beginning on January
1, April 1, July 1 and October 1 of each calendar year.
1.5 "Corporation" means Graphic Industries, Inc.
1.6 "Associate" means any person, age 18 or over, who is employed by the
Corporation or by any of its wholly-owned subsidiary corporations for the
purposes of the Federal Insurance Contributions Act.
1.7 "Enrollment Agreement" means the form to be executed by an Associate
who wishes to enroll in the Plan.
1.8 "Stock" means shares of the Common Stock, $.10 par value per share, of
Graphic Industries, Inc., or securities issued in substitution or exchange
therefor or upon modification or reclassification thereof, and specifically does
not mean shares of the Class B Common Stock, $.10 par value per share, of the
Company.
SECTION 2.
TERM
This Plan shall begin on the date hereof and shall continue indefinitely
until terminated by the Board of Directors.
SECTION 3.
ELIGIBILITY AND ENROLLMENT
3.1 A person must be an Associate in order to participate in the Plan.
3.2 Each Associate who wishes to participate in the Plan must execute and
deliver to the Administrative Committee an Enrollment Agreement, in the form
prescribed by the Administrative Committee, which shall specify the amount that
the Associate wishes to contribute to the Plan for the purchase of shares of
Stock. An Enrollment Agreement shall be effective as soon as reasonably
practicable after the date the Enrollment Agreement is delivered to the Broker.
3.3 An Enrollment Agreement shall continue in force during each succeeding
Calendar Quarter, unless sooner revoked by the Corporation as provided in the
Plan, or revoked or modified by the Associate by written notice of revocation or
modification which shall be delivered to the Administrative Committee. All
revocations or modifications by an Associate shall become effective as of the
next succeeding Calendar Quarter beginning after the date of receipt of the
revocation or modification by the Administrative Committee.
SECTION 4.
ASSOCIATE CONTRIBUTIONS
4.1 Each Associate who signs an Enrollment Agreement shall thereby have
authorized the Corporation to withhold from his payroll checks during each pay
period during which the Enrollment Agreement is in effect the amount designated
on the executed Enrollment Agreement for the purchase of Stock pursuant to Plan
Section 6.1. The amount designated shall not be less than $10 per pay period and
not more than $200 per week.
A-3
<PAGE>
4.2 During the period in which an Enrollment Agreement is in effect, each
Associate may, by completing a form provided by the Corporation, pay up to
$10,000 per calendar year to the Corporation for the purchase of Stock pursuant
to Plan Section 6.2.
4.3 No interest shall be earned on any amount withheld from an Associate's
payroll check or on any amount paid by an Associate to the Corporation.
SECTION 5.
CORPORATION CONTRIBUTIONS
For (a) each Associate who does not have an Enrollment Agreement in effect
for January 1995 and executes an Enrollment Agreement effective in February or
March 1995, and (b) each Associate who has an Enrollment Agreement in effect for
January 1995 and executes an Enrollment Agreement effective in February or March
1995 to increase his contributions by at least $5 per week, the Corporation
shall contribute to the Plan $100 for the purchase of Stock pursuant to Plan
Section 6.1.
SECTION 6.
PURCHASE OF STOCK
6.1 Each month, the Corporation shall transfer to the Broker the amount,
net of payroll tax and other deductions, of Associate contributions withheld
from payroll checks in the preceding month pursuant to Plan Section 4.1 (and
with respect to February and March 1995 only, contributions by the Corporation
pursuant to Plan Section 5), and the Broker shall purchase from the Corporation
as many whole and fractional shares of Stock for the benefit of the Associate as
may be purchased with such funds and from cash dividends paid on the Stock then
held by the Broker pursuant to this Plan. The purchase price for each share of
Stock shall be 90% of the closing purchase price per share of Stock as
determined on the exchange on which Stock is traded on the most recent trading
date preceding the purchase. Any shares of Stock purchased shall as soon as
administratively feasible following the purchase be allocated to an account
maintained by the Broker in the name of each Associate. The Corporation shall
pay the fees or commissions of the Broker resulting from the purchase of shares
of Stock through the Plan.
6.2 The Corporation will issue directly to the Associate as many whole
shares of Stock as may be purchased as Associate's payment pursuant to Plan
Section 4.2 and refund any cash remaining to the Associate. The purchase price
for each share of Stock shall be 100% of the closing purchase price per share of
Stock as determined on the exchange on which Stock is traded on the most recent
trading date preceding the date the Broker makes the first purchase pursuant to
Plan Section 6.1 in the month following the month the Corporation receives
payment from the Associate pursuant to Plan Section 4.2.
SECTION 7.
STOCK CERTIFICATES AND DIVIDENDS
The Broker shall hold the Stock purchased pursuant to Plan Section 6.1 for
the benefit of an Associate. The Associate at any time may give notification to
the Broker to sell or transfer any or all shares of Stock allocated to him.
Stock dividends paid on Stock held for the benefit of an Associate shall be paid
to the Associate. Cash dividends paid on Stock held by the Broker on behalf of
each Associate shall be paid to the Broker for the benefit of the Associate and
shall be used by the Broker to purchase additional shares of Stock for that
Associate.
A-4
<PAGE>
SECTION 8.
DEATH OR TERMINATION OF EMPLOYMENT
In the event of the death of an Associate or the termination of his
employment for any other reason during a Calendar Quarter, any effective
Enrollment Agreement shall be revoked, all future contributions of the
Corporation or the Associate to the Plan on his behalf and any withholdings from
his payroll checks shall cease, and all such withholdings, Associate
contributions, and any cash dividends paid on Stock held by the Broker for the
benefit of that Associate which have not been used to purchase Stock, and all
cash dividends declared but not paid prior to death or termination shall, within
a reasonable period of time, be paid to the terminated Associate or the personal
representative of the estate of a deceased Associate.
SECTION 9.
ADMINISTRATIVE COMMITTEE
9.1 The Board of Directors shall appoint at least two of its members to
the Administrative Committee (the "Administrative Committee") that will
administer this Plan on behalf of the Corporation. Except as may otherwise be
permitted in Rule 16b-3 ("Rule 16b-3") of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") no person shall be appointed as a member of the
Administrative Committee who is, or within one year prior to his becoming a
member of the Administrative Committee was, granted or awarded equity securities
pursuant to this Plan or any other plan of the Corporation or an affiliate,
except that participation in a formula plan or participation which does not
disqualify a director from being disinterested as provided in Rule 16b-3 shall
not disqualify a person from becoming a member of the Administrative Committee.
Each member of the Administrative Committee shall serve at the discretion
of the Board of Directors, which may fill any vacancy, however caused, in the
Administrative Committee. The Administrative Committee shall select one of its
members as a chairman and shall hold meetings at the times and in the places as
it may deem advisable. All actions the Administrative Committee takes shall be
made by majority decision. Any action evidenced by a written instrument signed
by all of the members of the Administrative Committee shall be as fully
effective as if the Administrative Committee had taken the action by majority
vote at a meeting duly called and held.
In addition to any other rights of indemnification that they may have as
directors of the Corporation or as members of the Administrative Committee, the
directors of the Corporation and members of the Administrative Committee shall
be indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of action taken
or failure to act under or in connection with the Plan, and against all amounts
paid by them in settlement thereof or paid by them in satisfaction of a judgment
in any action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in the action, suit or proceeding that the Administrative
Committee member is liable for gross negligence or misconduct in the performance
of his duties; provided that within 60 days after institution of any action,
suit or proceeding, a Administrative Committee member shall in writing offer the
Corporation the opportunity, at its own expense, to handle and defend the same.
9.2 The Administrative Committee shall cause the Broker to keep accurate
records relating to each Associate, and shall cause the Plan to furnish
quarterly reports, and at any other times as the Administrative Committee shall
deem appropriate, to each Associate participating in the Plan, as to the amount
withheld from his payroll checks, the amount of contributions made by the
Corporation on his behalf, the amount paid as cash dividends and the number of
shares of Stock paid as stock dividends on Stock held by the Broker on his
behalf, the number of shares of Stock purchased by the Broker on his behalf, and
the purchase price of the shares of Stock purchased by the Broker on his behalf
for the period since the last report.
A-5
<PAGE>
SECTION 10.
GENERAL MATTERS
10.1 The maximum number of shares of Stock reserved for issuance under the
Plan shall be established by action of the Board of Directors. The
Administrative Committee shall adjust this number for any increase or decrease
in the number of outstanding shares resulting from a stock split or a payment of
a stock dividend on the shares, a subdivision or combination of the shares, a
reclassification of the shares, or a merger or consolidation.
10.2 Any notices, payments, distributions of shares of Stock or other
property required or permitted to be given or made by the Administrative
Committee to any Associate under the provisions of this Plan shall be deemed to
have been properly made or given if mailed to the Associate at his last address
of record as shown on the Corporation's records. Each Associate shall promptly
notify the Administrative Committee in writing of any change in his address.
10.3 The Plan may be amended or terminated at any time by the Board of
Directors; provided, however, that the Board of Directors may condition any
amendment on the approval of the shareholders of the Corporation if such
approval is necessary or advisable with respect to tax, securities or other
applicable laws to which the Corporation, this Plan, or Associates are subject.
In the event the Plan is terminated, all Enrollment Agreements shall be
revoked, all future contributions of the Corporation or the Associate under the
Plan and any withholdings from payroll checks shall cease, and all such
withholdings, Associate contributions and any cash dividends paid on Stock held
by the Broker for the benefit of that Associate which have not been used to
purchase Stock, and all cash dividends declared but not paid shall, within a
reasonable period of time, be paid to the Associates.
10.4 No provision in the Plan shall confer upon any Associate any right to
continue employment or to interfere in any way with the right of the Corporation
or any subsidiary to terminate his employment.
10.5 Neither the Corporation nor the Administrative Committee shall have
any responsibility or liability, other than liabilities arising out of state or
federal securities laws, for anything done or left undone, by itself or by the
Broker, including without limiting the generality of the foregoing, any action
taken with respect to the price, time, quantity or other conditions and
circumstances of the purchase of shares of Stock under the terms of the Plan.
10.6 Copies of the annual report of the Corporation shall be available to
Associates upon request at the Corporation's office.
10.7 The headings contained in this Plan are included only for convenience
of reference and do not define, limit, explain or modify this Plan or its
meaning and are in no way to be construed as part of this Plan.
10.8 The terms of this Plan and any claims or other transactions arising
therefrom shall be governed by and construed in accordance with the laws of the
State of Georgia and any applicable federal law.
IN WITNESS WHEREOF, the Corporation has, through its duly authorized
officers, executed this Plan on the date first above written.
GRAPHIC INDUSTRIES, INC.
BY: Mark C. Pope III
----------------------------
TITLE: Chairman and CEO
-------------------------
ATTEST:
By: Donald P. Hunnicutt
--------------------------------
Title: Corporate Secretary
-----------------------------
[CORPORATE SEAL]
A-6
<PAGE>
APPENDIX B
GRAPHIC INDUSTRIES, INC.
1995 STOCK OPTION PLAN
THIS INDENTURE made on the 31st of March, 1995, by GRAPHIC INDUSTRIES,
INC., a corporation organized and doing business under the laws of the State of
Georgia (the "Company");
1. PURPOSE.
--------
The Company is adopting the Graphic Industries, Inc. 1995 Stock Option Plan
(the "Plan") to secure and retain the services of officers, key associates, and
directors of the Company and its subsidiaries by giving them an opportunity to
invest in the future success of the Company. The Board of Directors of the
Company (the "Board of Directors") believes the Plan will promote personal
interest in the welfare of the Company by and provide incentive to the
individuals who are primarily responsible both for the regular operations of and
for shaping and carrying out the long term plans of the Company, thus
facilitating the continued growth and financial success of the Company.
2. ADMINISTRATION.
---------------
The Board of Directors shall appoint at least two of its members to a
committee (the "Committee") that will administer the Plan on behalf of the
Company. Except as may otherwise be provided in Rule 16b-3 of the Securities
Exchange Act of 1934, no person shall be appointed as a member of the Committee
who is, or within one year prior to his becoming a member of the Committee was,
granted or awarded equity securities pursuant to the Plan or any other plan of
the Company or an affiliate, if such grant or award would cause that person not
to be "disinterested" for purposes of Rule 16b-3 as promulgated pursuant to the
Securities Exchange Act of 1934.
Each member of the Committee shall serve at the pleasure of the Board of
Directors, which may fill any vacancy, however caused, in the Committee. The
Committee shall select one of its members as a chairman and shall hold meetings
at the times and in the places as it shall deem advisable. All actions the
Committee takes shall be made by majority decision. Any action evidenced by a
written instrument signed by all of the members of the Committee shall be as
fully effective as if the Committee had taken the action by majority vote at a
meeting duly called and held.
Subject to the express provisions of the Plan, the Committee shall have
complete authority, in its discretion, to determine:
(a) the officers, key associates, and directors of the Company and
its subsidiaries to whom, the times when, and the prices at which it shall grant
options;
(b) the type of options to be granted, i.e., either incentive stock
options as defined in Section 422 of the Internal Revenue Code of 1986 (the
"Code") (the "Incentive Stock Options") or non-qualified stock options (the
"Non-Qualified Stock Options") (collectively, the "Options");
(c) the total number of Options to grant to an optionee;
(d) the time and duration of the period of exercise of each Option;
and
(e) the number of shares of common stock of the Company subject to
each Option.
The Committee shall also have complete and conclusive authority to (1)
interpret the Plan, (2) prescribe, amend, and rescind rules and regulations
relating to it, (3) determine the terms and provisions of the stock option
awards the Company makes with optionees (the "Awards"), the terms of which need
not be identical, and (4) make all other determinations necessary or advisable
for the administration of
B-1
<PAGE>
the Plan. With respect to each Option granted hereunder, the Agreement
evidencing the grant shall specifically state whether the Option is an Incentive
Stock Option or a Non-Qualified Stock Option. In addition to any other rights of
indemnification that they may have as directors of the Company or as members of
the Committee, the directors of the Company and members of the Committee shall
be indemnified by the Company against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of action taken
or failure to act under or in connection with the Plan or any Option granted
thereunder, and against all amounts paid by them in settlement thereof (provided
the settlement is approved by independent legal counsel selected by the Company)
or paid by them in satisfaction of a judgment in any action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in the action,
suit or proceeding that the Committee member is liable for negligence or
misconduct in the performance of his duties; provided that within sixty (60)
days after institution of any action, suit or proceeding, a Committee member
shall in writing offer the Company the opportunity, at its own expense, to
handle and defend the same.
3. ELIGIBILITY.
------------
The Committee shall grant Options only to officers, key associates, and
directors of the Company or its subsidiaries; provided, however, that an
Incentive Stock Option may only be granted if such individual is an associate of
the Company or a subsidiary. Subject to the limits set forth in this Plan, the
Committee at any time may grant additional Options to officers, key associates
or directors to whom the Committee had previously granted Options, so that an
optionee may hold more than one Option at the same time.
4. STOCK SUBJECT TO OPTIONS.
-------------------------
The Company has authorized and reserved for issuance upon the exercise of
Options pursuant to the Plan an aggregate of one million (1,000,000) shares of
$.10 par value common stock of the Company having one vote per share (the
"Shares"). In addition, the Company shall not issue more than one million
(1,000,000) of the Shares pursuant to Options it grants to members of the Board
of Directors. If any Option is cancelled, expires or terminates without the
respective optionee exercising it in full, the Committee may grant Options with
respect to those unpurchased Shares to that same optionee or to another
individual or individuals. To the extent required under Section 162(m) of the
Internal Revenue Code and the regulations thereunder for compensation to be
treated as qualified performance-base compensation, the maximum number of Shares
with respect to which Options may be granted during any one year period to any
individual shall not exceed one hundred thousand (100,000).
The Committee shall adjust the total number of Shares and any outstanding
Options, both as to the number of Shares and the option price, for any increase
or decrease in the number of outstanding Shares resulting from a stock split or
a payment of a stock dividend on the Shares, a subdivision or combination of the
Shares, a reclassification of the Shares in accordance with the provisions of
the next paragraph, a merger or consolidation of the Shares or any other like
changes in the Shares or in their value. The Committee shall not issue
fractional shares as a result of any of these changes, and shall eliminate from
the outstanding Options any fractional shares that result from a change. The
Committee shall not adjust outstanding Options for cash dividends or the
issuance to optionees of rights to subscribe for additional stock or securities
of the Company.
After any merger of one or more corporations into the Company, any merger
of the Company into another corporation, any consolidation of the Company and
one or more other corporations, or any other corporate reorganization to which
the Company is a party that involves any exchange, conversion, adjustment or
other modification of the outstanding Options, each optionee shall receive at no
additional cost upon the exercise of his Option, subject to any required action
by stockholders and in lieu of the number of Shares as to which he would
otherwise exercise the Option, the number and class of shares of stock or other
securities or any other property to which the terms of the agreement of merger,
consolidation, or other reorganization would entitle the optionee to receive,
if, at the time of the merger, consolidation, or other reorganization, the
optionee had been a holder of record of the number of
B-2
<PAGE>
Shares as to which he could exercise the Option. Comparable rights shall accrue
to each optionee in the event of successive mergers, consolidations or other
reorganizations.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Committee in its sole discretion. Any
adjustment may provide for the elimination of any fractional Share which might
otherwise become subject to an Option.
The grant of an Option by the Committee shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes in its capital or business structure, or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets.
5. TERMS AND CONDITIONS OF ALL OPTIONS.
------------------------------------
Each Option granted pursuant to the Plan shall be authorized by the
Committee and shall be evidenced by an Award in the form and containing the
terms and conditions as the Committee from time to time may determine, provided
that each Award shall:
(a) state the number of Shares to which it pertains;
(b) state the option price;
(c) state the terms and conditions for payment;
(d) state the term of the Option, and the period or periods during
the term of the Option in which the optionee may exercise the Option or portions
thereof; and
(e) provide that the Option is not transferable by the optionee other
than as (1) the will of the optionee, or (2) the applicable laws of descent and
distribution permit, and is exercisable during the optionee's lifetime only by
the optionee.
The Committee may include in any Option it grants a condition that the
optionee shall agree to remain an associate of and/or to render services to the
Company or any of its subsidiaries for a specified period of time following the
date it grants the Option. This condition shall not impose on the Company or any
subsidiary any obligation to employ the optionee or retain the optionee as a
director for any period of time.
6. ADDITIONAL TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS.
-----------------------------------------------------------
In addition to the terms and conditions set forth in Section 5 of this
Plan, each Agreement evidencing the grant of an Incentive Stock Option shall:
(a) provide for an option price that shall not be less than 100% of
the fair market value, as determined in good faith by the Committee, of the
Shares on the date of granting the Option, provided that:
(1) if the Shares are actively traded on any national securities
exchange or reported by NASDAQ on a basis which reports closing sales prices,
fair market value shall be the closing sales price per share of the Shares for
the business day immediately preceding the date the option is granted;
(2) if the Shares are otherwise traded over the counter, fair
market value shall be the arithmetic mean of the bid and asked prices for the
Shares, as reported by NASDAQ, for the business day immediately preceding the
date of the grant of the option;
(3) if the Shares are not traded, fair market value shall be
determined by the Committee which shall, in making such determination, consider,
where applicable, among other factors: the existence and extent of a private
market for the Shares and a public market for the Company's securities of the
same class, if any; the price at which the Shares were acquired, if applicable,
by the Company; the estimated period of time, if any, during which the Shares
will be freely marketable; the estimated amount of floating supply of Shares
available; changes in the financial condition and prospects of the Company; the
existence of merger proposals or tender offers affecting the Company; and any
other factors affecting fair market value; provided, however, that fair market
value shall be deter-
B-3
<PAGE>
mined without regard to any restriction other than a restriction which, by its
terms, will never lapse;
(4) if the optionee owns (subject to applicable ownership
attribution rules of Section 425(d) of the Code, and the regulations promulgated
thereunder by the Department of Treasury) stock possessing more than 10% of the
total combined voting power of all Shares or of shares of any parent or
subsidiary of the Company at the time the Option is granted, the option price
shall not be less than 110% of the fair market value of the pertinent number of
Shares of the Company on the date of the grant of the Option; and
(5) subject to the foregoing, the Committee, in determining the
fair market value, shall have full authority and discretion and be fully
protected in doing so;
(b) provide that the Option is not exercisable after the expiration
of ten (10) years or less from the date the Option is granted, except that, if
the optionee owns (subject to applicable ownership attribution rules of Section
425(d) of the Code and the regulations promulgated thereunder by the Department
of the Treasury) more than 10% of the total combined voting power of all Shares
or of shares of any parent or subsidiary at the time the Option is granted, the
Option is not exercisable after the expiration of five (5) years or less from
the date the Option is granted.
7. LIMITATION ON INCENTIVE STOCK OPTION AMOUNTS.
---------------------------------------------
An Incentive Stock Option may not be granted to the extent the aggregate
fair market value, determined at the time the Committee grants the Option, of
stock with respect to which stock options intended to meet the requirements of
Code Section 422 are exercisable for the first time by an optionee during any
calendar year under all plans of the Company and any parent or subsidiary
exceeds $100,000.
8. COMPLIANCE WITH CODE FOR INCENTIVE STOCK OPTIONS.
-------------------------------------------------
All Incentive Stock Options are intended to comply with Code Section 422,
and all provisions of the Plan and all Incentive Stock Options granted hereunder
shall be construed in such manner as to effectuate that intent.
9. TERM OF PLAN.
-------------
The effective date of the Plan shall be the earlier of the date on which
the stockholders of the Company or the Board of Directors approve the Plan. The
Plan shall terminate ten (10) years after that date. The Committee may grant
Options pursuant to the Plan at any time on or between that effective date and
that termination date.
10. EXERCISE OF OPTION BY OPTIONEE.
-------------------------------
The optionee shall pay the Company the purchase price of the Shares as set
forth in the Award, which may provide that payment will be made (a) in cash, (b)
by delivery to the Company of Shares that have been owned by the holder for at
least six (6) months prior to the date of exercise, such Shares being credited
at their fair market value, as determined by the Committee in its sole
discretion, or (c) by receipt of the exercise price in cash from a broker,
dealer, or other "creditor" as defined in Regulation T issued by the Board of
Governors of the Federal Reserve System following delivery by the optionee to
the Committee of instructions in a form acceptable to the Committee regarding
delivery to such broker, dealer, or other creditor of that number of Shares with
respect to which the Option is exercised, or (d) any other form or manner as is
acceptable to the Committee. Each Award may provide terms of payment that are
different from the terms of other Awards.
Until the optionee receives stock certificates from the Company that
reflect the Shares accruing to the optionee upon the exercise of the Option, the
optionee shall have no rights as a stockholder with respect to the Shares the
Option covers. The Company shall make no adjustment to the Shares for any
dividends or distributions or other rights for which the record date is prior to
the date of that stock certificate, except as the Plan otherwise provides.
B-4
<PAGE>
11. WITHHOLDING TAXES.
------------------
Whenever the Company proposes or is required to issue Shares to an optionee
who is or was an associate of the Company or a subsidiary, or his legatee or
legal representative under the Plan, the Company shall have the right to require
the recipient to remit in cash to the Company an amount sufficient to satisfy
any federal, state, and local withholding tax requirements prior to the delivery
of any certificate or certificates for such Shares.
12. ASSIGNABILITY.
--------------
Except as Section 5(e) of the Plan permits, no Option or any of the rights
and privileges thereof accruing to an optionee shall be transferred, assigned,
pledged or hypothecated in any way whether by operation of law or otherwise, and
no Option, right or privilege shall be subject to execution, attachment or
similar process.
13. THE RIGHT OF THE COMPANY TO TERMINATE EMPLOYMENT.
-------------------------------------------------
No provision in the Plan or any Option shall confer upon any optionee any
right to continue in the employment of the Company or any subsidiary of the
Company or to continue performing services for or to interfere in any way with
the right of the Company or any subsidiary of the Company to terminate his
employment or discontinue his directorship at any time for any reason.
14. AMENDMENT AND TERMINATION.
--------------------------
The Board of Directors at any time may amend or terminate the Plan without
stockholder approval; provided, however, that the Board of Directors may
condition any amendment on the approval of the shareholders of the Company if
such approval is necessary or advisable with respect to tax, securities (which
require such approval for a material increase of the number of Shares subject to
Options, and for material modifications to the eligibility requirements of the
Plan, among others) or other applicable laws to which the Company, the Plan,
optionees or eligible associates are subject. No amendment or termination of the
Plan shall affect the rights of an optionee with regard to his Options without
his consent.
15. CHOICE OF LAW.
--------------
The laws of the State of Georgia shall govern the Plan.
16. APPROVAL OF STOCKHOLDERS.
-------------------------
The Company shall submit the Plan to its stockholders for approval within
twelve (12) months of the adoption of the Plan by the Board of Directors;
failure to receive their approval shall render all outstanding Options
immediately void and of no effect.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed in the
form and as of the date set forth above.
GRAPHIC INDUSTRIES, INC.
Attest:
By: Donald P. Hunnicutt By: Mark C. Pope III
---------------------------- --------------------------
Title: Corporate Secretary Title: Chairman and CEO
------------------------- -----------------------
[CORPORATE SEAL]
B-5
<PAGE>
GRAPHIC INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated April 21, 1995, and does hereby
appoint Mark C. Pope III and Mark C. Pope IV, and either of them, with full
power of substitution, as proxy or proxies of the undersigned to represent the
undersigned and to vote all shares of Graphic Industries, Inc. Class B Common
Stock which the undersigned would be entitled to vote if personally present at
the Annual Meeting of Shareholders of Graphic Industries, Inc., to be held at
Swissotel Atlanta, 3391 Peachtree Road, Atlanta, Georgia, at 10:00 a.m., local
time, on May 23, 1995, and any adjournment(s) thereof:
1. ELECTION OF DIRECTORS:
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY to vote for
all nominees listed below.
(except as marked to the contrary below)
M. Pope III; M. Pope IV; W. Wood; J. Pope; C. Pope; A. Herring; and J. Hatcher.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE BELOW.)
- --------------------------------------------------------------------------------
2. Proposal to adopt the Graphic Industries, Inc. Associate Stock Purchase Plan:
[_] FOR [_] AGAINST [_] ABSTAIN
3. Proposal to adopt the Graphic Industries, Inc. 1995 Stock Option Plan:
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, the Proxies are authorized to vote on such other
business as may properly come before the meeting or any adjournment thereof.
This Proxy may be revoked at any time prior to the voting thereof.
PLEASE SIGN ON OTHER SIDE.
<PAGE>
__________________________________ SHARES CLASS B COMMON
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
DIRECTORS GIVEN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, IT WILL
BE VOTED IN FAVOR OF PROPOSALS 1, 2 AND 3.
SIGNATURE(S)__________________________________
______________________________________________
DATE:___________________________________, 1995
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR
HEREON, AND WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
GIVE YOUR FULL TITLE AS SUCH. IF THE STOCK IS
HELD IN THE NAME OF MORE THAN ONE PERSON, ALL
HOLDERS SHOULD SIGN. IF THE SIGNATORY IS A
CORPORATION, SIGN THE FULL CORPORATE NAME BY A
DULY AUTHORIZED OFFICER. IF A PARTNERSHIP,
SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
PLEASE COMPLETE, DATE, SIGN AND RETURN
THIS PROXY PROMPTLY
<PAGE>
GRAPHIC INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement, each dated April 21, 1995, and does hereby
appoint Mark C. Pope III and Mark C. Pope IV, and either of them, with full
power of substitution, as proxy or proxies of the undersigned to represent the
undersigned and to vote all shares of Graphic Industries, Inc. Common Stock
which the undersigned would be entitled to vote if personally present at the
Annual Meeting of Shareholders of Graphic Industries, Inc., to be held at
Swissotel Atlanta, 3391 Peachtree Road, Atlanta, Georgia, at 10:00 a.m., local
time, on May 23, 1995, and any adjournment(s) thereof:
1. ELECTION OF DIRECTORS:
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY to vote for
all nominees listed below.
(except as marked to the contrary below)
C. Kirtland; R. Strayhorn; and W. Andrews.
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME IN THE SPACE BELOW.)
- --------------------------------------------------------------------------------
2. Proposal to adopt the Graphic Industries, Inc. Associate Stock Purchase Plan:
[_] FOR [_] AGAINST [_] ABSTAIN
3. Proposal to adopt the Graphic Industries, Inc. 1995 Stock Option Plan:
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, the Proxies are authorized to vote on such other
business as may properly come before the meeting or any adjournment thereof.
This Proxy may be revoked at any time prior to the voting thereof.
PLEASE SIGN ON OTHER SIDE.
<PAGE>
___________________________________ SHARES COMMON STOCK
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
DIRECTORS GIVEN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, IT WILL
BE VOTED IN FAVOR OF PROPOSALS 1, 2 AND 3.
(SIGNATURE(S)_________________________________
______________________________________________
DATE:___________________________________, 1995
PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR
HEREON, AND WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN,
GIVE YOUR FULL TITLE AS SUCH. IF THE STOCK IS
HELD IN THE NAME OF MORE THAN ONE PERSON, ALL
HOLDERS SHOULD SIGN. IF THE SIGNATORY IS A
CORPORATION, SIGN THE FULL CORPORATE NAME BY A
DULY AUTHORIZED OFFICER. IF A PARTNERSHIP,
SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
PLEASE COMPLETE, DATE, SIGN AND RETURN
THIS PROXY PROMPTLY
