<PAGE>
[LOGO OF GRAPHIC INDUSTRIES, INC. APPEARS HERE]
GRAPHIC INDUSTRIES, INC.
Dear Graphic Industries, Inc. Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
to be held at the Ritz-Carlton Hotel-Buckhead, 3434 Peachtree Road, NE, Atlanta,
Georgia, on Tuesday, June 3, 1997, at 10:00 a.m., local time.
The principal business of the meeting will be to elect directors for the
ensuing year. During the meeting, we will also review the results of the year
ended January 31, 1997 and report on the outlook for fiscal 1998.
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
May 2, 1997
<PAGE>
GRAPHIC INDUSTRIES, INC.
2155 Monroe Drive, N.E.
Atlanta, Georgia 30324
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
June 3, 1997
The 1997 Annual Meeting of Shareholders of Graphic Industries, Inc. will be
held at 10:00 a.m., local time, on Tuesday, June 3, 1997, at Ritz-Carlton Hotel-
Buckhead, 3434 Peachtree Road, NE, Atlanta, Georgia.
The meeting is called for the following purposes:
1. To elect directors for the ensuing year; and
2. To vote on such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed April 17, 1997, 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
MAY 2, 1997
<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 1997 Annual Meeting of Shareholders
(the "Annual Meeting") of the Company to be held on Tuesday, June 3, 1997, 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 May 5, 1997, to the
shareholders of record of the Company (the "Shareholders") on April 17, 1997
(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.
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 six directors to be elected by that class. 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 six nominees to the Board. Accordingly, abstentions will have
no effect on the election of directors. Broker non-votes do not exist in the
context of the election of directors.
There were 7,290,507 shares of Common Stock and 4,518,817 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 six nominees.
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
six nominees to be voted on by the holders of Class B Stock.
YOUR BOARD OF DIRECTORS URGES YOU TO SIGN, DATE AND RETURN THE ENCLOSED
PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE
1
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES
The Board of Directors of the Company presently consists of nine 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, Benatar and Strayhorn) will be
voted upon only by the holders of Common Stock. The remaining nominees (Messrs.
Pope, 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.
<TABLE>
<CAPTION>
OWNERSHIP OF SHARES
<S> <C> <C> <C> <C>
Common Stock
------------------------------------------------------------
Sole Shared
Voting or Voting or Attributed
Name of Investment Investment Beneficial Percent
Beneficial Owner Power Power Ownership of Class(1)
- ------------------------------------------------------------------------------------------------
Mark C. Pope III 921,977(2) 0(3) 17,200(4) 12.9(2)(3)(4)
William A. Wood, Jr. 8,700 0 0 *
John R. Pope 52,650 0(3) 0 *
Leo Benatar 3,000 0 0 *
Ralph N. Strayhorn, Jr. 6,830 0 1,860(5) *
Warren E. Andrews 12,000 22,500(6) 0 *
Carter D. Pope 214,121 0 0 3.0
Alvan A. Herring, Jr. 43,630 0 0 *
James A. Hatcher 0 0(3) 118,150(7) 1.6(3)(7)
David S. Fraser 6,167 0 0 *
Donald S. Forshay 3,500 0 0 *
Ellis T. Alexander 500 0 0 *
FMR Corp. (Fidelity Investments) 589,000(8) 0 0 8.1
All directors and
executive officers as a
group (16 persons) 1,273,075(2) 22,500(3) 137,210 19.7(9)
</TABLE>
2
<PAGE>
(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), and (7) 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 46.0%.
(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) Mr. Strayhorn disclaims beneficial ownership of the indicated shares, which
are beneficially owned, controlled and held of record by his spouse.
(6) Jointly owned with Mr. Andrews' spouse, with whom he shares voting and
investment power.
(7) The indicated shares are beneficially owned, controlled and held of record
by Mr. Hatcher's spouse.
(8) The indicated shares are controlled by FMR Corp. ("FMR") through certain of
its affiliates and subsidiaries in their capacities as investment advisers
to various funds. Edward C. Johnson 3d and Abigail P. Johnson, together
with other members of their family and trusts for their benefit, may be
deemed to control FMR and may therefore be deemed to beneficially own the
indicated shares. Each of FMR and Edward and Abigail Johnson has the
authority to dispose of all of the indicated shares. The foregoing
information is based solely on a Report on Schedule 13G filed with the
Securities and Exchange Commission and the Company. The address of FMR and
Edward and Abigail Johnson is 82 Devonshire Street, Boston, Massachusetts
02109.
(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) to this
table were included, the group's Percent of Class of Common Stock would be
50.3%.
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 72 1970
Chief Executive Officer of
Graphic Industries since
1970; President of Graphic
Industries, 1970-1989
William A. Wood, Jr. Former Vice President of 77 1978
Graphic Industries, 1986-1996;
President of The Stein Printing
Company, Inc., 1978-1986 (2)
John R. Pope (1) President of Williams Printing 52 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 41 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 53 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 45 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
Leo Benatar Senior Partner and Associated 67 1997
Consultant of A.T. Kearney, Inc.;
Senior Vice President of Sonoco
Products Company 1993-1996;
Chairman and CEO of Engraph,
Inc. 1981-1995; Chairman of
Engraph, Inc., 1995-1996
(manufacturer of packaging and
product identification materials);
Aaron Rents, Inc. (a furniture
and appliance retailer); Interstate
Bakeries Corporation (baker
and distributor of fresh bakery
products); Mohawk Industries,
Inc. (carpet manufacturer); Paxar
Corporation (apparel systems
and identification products);
and Schuller Corporation
(manufacturer of insulation
and building products).
Ralph N. Strayhorn, Jr. Of counsel to Petree Stockton 74 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 76 1984
W. E. Andrews Co., Inc.,
1952-1989 (acquired by
Graphic Industries in
1984) (2)
</TABLE>
- ----------
(1) 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 1997, 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 is an executive officer of the Company and also serves on its
Executive Committee, which determines executive officers' salary and bonuses.
Mr. Andrews and Mr. Wood serve on the Stock Option Committee, which awards
compensation in the form of stock options to executive officers and other
employees of the Company.
MEETINGS AND COMMITTEES
During fiscal 1997, 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, Mr. C. Pope, Mr. J. Pope and Mr.
Strayhorn determines salary and bonus compensation for the Company's executive
officers. The Executive Committee met 12 times during fiscal 1997. The Stock
Option Committee, which consists of Messrs. Wood and Andrews, determined stock
option awards for all executive officers and other key associates of the
Company. The Stock Option Committee met 4 times during fiscal 1997. The Audit
Committee met two times during fiscal 1997 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 and other key associates of the
Company. The Executive Committee is composed of Mark C. Pope III, Chairman of
the Board and CEO, Mr. Carter D. Pope, Mr. John R. Pope and Mr. Ralph W.
Strayhorn, Jr. directors of the Company. The Stock Option Committee is composed
of Mr. William A. Wood, Jr. and Mr. Warren E. Andrews, directors 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) 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
1997 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. Wood and Mr. Andrews cannot receive any stock options under the
Company's 1988 Incentive Stock Option Plan, 1991 Stock Option Plan or 1995 Stock
Option Plan because Mr. Wood 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 CARTER D. POPE JOHN R. POPE
RALPH N. STRAYHORN, JR. WILLIAM A. WOOD, JR. 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 the Company's peer group for the period of five years commencing on
January 31, 1992 and ending on January 31, 1997.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG GRAPHIC INDUSTRIES, INC.,
THE S&P 500 INDEX, AND THE COMPANY'S PEER GROUP**
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Measurement period
(Fiscal Year Covered) 1/92 1/93 1/94 1/95 1/96 1/97
- --------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
GRPH $100.00 $140.00 $143.00 $178.00 $196.00 $181.00
S&P 500 $100.00 $111.00 $125.00 $125.00 $174.00 $220.00
Peer Group $100.00 $109.00 $129.00 $123.00 $148.00 $152.00
</TABLE>
* Assumes $100 invested on January 31, 1992 in Graphic Industries, Inc. the S&P
500 Stock Index and a Peer Group constructed by the Company. Total return
assumes reinvestment of dividends.
** The Company's Peer Group is comprised of fourteen publicly-held printing
companies with operations in the commercial printing industry similar to
those of the Company. The companies in the peer group are: Banta Corp., Bowne
& Co. Inc., Cadmus Communications Corp., Consolidated Graphics, Inc., Courier
Corp., Devon Group, Inc., R.R. Donnelley & Sons Co., Merrill Corp., Moore
Ltd., Quebecor, Inc.. World Color Press, Inc., Mail-Well, Inc., Valassis
Communications, Inc., Big Flower Press Holdings, Inc.
8
<PAGE>
EXECUTIVE COMPENSATION TABLES
The following tables set forth certain information required by the
Securities and Exchange Commission relating to various forms of compensation of
executive officers of the Company with respect to the periods presented.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------ ---------------------------------------
AWARDS PAYOUTS
---------------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER ANNUAL RESTRICTED LONG-TERM ALL OTHER
COMPENSATION STOCK OPTIONS/ INCENTIVE PLAN COMPENSATION
FISCAL SALARY BONUS (1995 AND AWARDS SARS PAYOUTS (1994 AND 1995)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#)(1) ($) ($)
- --------------------------- ------ ------ ----- ------------ --------- ------- -------------- -------------
Mark C. Pope III 1997 $323,900 0 0 0 25,000 0 $3,000(2)
Chairman & CEO 1996 $354,967 0 0 0 0 0 3,000(2)
1995 $348,000 0 0 0 0 0 3,000(2)
Alvan A. Herring, Jr. 1997 $271,557 0 0 0 0 0 $3,000(2)
Vice President 1996 $263,350 0 0 0 12,000 0 3,000(2)
1995 $225,500 0 0 0 7,500 0 3,000(2)
Donald S. Forshay 1997 $207,702 0 0 0 0 0 $2,943(2)
Vice President-Marketing 1996 (3) - - - - - -
1995 (3) - - - - - -
Ellis T. Alexander 1997 $194,312 0 0 0 0 0 $3,000(2)
Vice President 1996 (3) - - - - - -
1995 (3) - - - - - -
David S. Fraser 1997 $163,783 0 0 0 0 0 $3,000(2)
CFO & Treasurer 1996 $145,750 0 0 0 14,000 0 1,500(2)
1995 $101,596 0 0 0 13,000 0 0
</TABLE>
- ----------
(1) Options granted in fiscal 1995 were granted pursuant to the Graphic
Industries, Inc. 1991 Stock Option Plan. Options granted in fiscal 1996 and
fiscal 1997 were granted pursuant to the Graphic Industries, Inc. 1995
Stock Option Plan.
(2) These amounts represent the Company's matching contributions to the named
executives' 401(k) accounts, under the Company's Profit Sharing Plan,
during the indicated years.
(3) The indicated persons were not executive officers of the Company in fiscal
years 1995 and 1996.
9
<PAGE>
FISCAL 1997 OPTION GRANTS
This table presents information regarding fiscal 1997 option grants to the
named executive officers. The Company has no outstanding stock appreciation
rights and granted no stock appreciation rights during fiscal 1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1997
- --------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- -------------------------------------------------------------------------------------- -----------------------------
% OF TOTAL OPTIONS
OPTIONS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION 5% 10%
NAME (#) FISCAL YEAR(3) ($/SH) DATE ($) ($)
- ------------ ------- ------------------ ----------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Mr. Pope II 8,333(1) 10.75% 9.08 7/31/97 9,666 13,749
8,333(1) 10.75% 9.08 7/31/98 9,666 13,749
8,334(1) 10.75% 9.08 7/31/99 9,667 13,751
Mr. Herring - - - - - -
- - - - - -
- - - - - -
Mr. Forshay 3,333(2) 4.3% 8.75 7/31/97 4,966 6,599
3,333(2) 4.3% 8.75 7/31/98 4,966 6,599
3,334(2) 4.3% 8.75 7/31/99 4,968 6,601
Mr. Alexander - - - - - -
- - - - - -
- - - - - -
Mr. Frase - - - - - -
- - - - - -
- - - - - -
</TABLE>
- ----------
(1) These stock options were granted on July 24, 1997 at an exercise price
equal to the then current fair market value of the Common Stock, plus 10%,
pursuant to the Graphic Industries, Inc. 1995 Stock Option Plan. Mr. Pope's
options vest in one third annual installments beginning on July 1, 1997.
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 June 27, 1996 at an exercise price
equal to the current fair market value of the common stock pursuant to the
Graphic Industries, Inc. 1995 Stock Option Plan. Mr. Forshay's options vest
in one third annual installments beginning on July 1, 1997. 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 77,500 shares granted in fiscal 1997.
10
<PAGE>
INDIVIDUAL OPTION EXERCISES IN FISCAL 1997 AND VALUES AT JANUARY 31, 1997
This table presents information regarding fiscal 1997 option exercises and
the value of unexercised options held at January 31, 1997.
<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 0/25,000 0/$16,750
Mr. Herring 3,750 $2,813 0/12,000 0/$12,000
Mr. Forshay 0 0 0/10,000 0/$10,000
Mr. Alexander 668 $1,082 0/10,000 0/$10,000
Mr. Fraser 0 0 0/11,167 0/$11,167
</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,
1997, based upon the $9.75 closing price of the Common Stock on that date.
Amounts have been rounded to the nearest dollar.
11
<PAGE>
AUDITORS
The firm of Ernst & Young has served as the CompanyOs independent public
accountants since 1983 and the Board of Directors intends to reappoint this firm
for fiscal 1998. 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 1998 ANNUAL MEETING
Any Shareholder of the Company wishing to submit a proposal for action at
the CompanyOs annual meeting of shareholders in 1998 and desiring the proposal
to be considered for inclusion in the CompanyOs 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, 1998. 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 CompanyOs 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 CompanyOs 1997 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
May 2, 1997
12
<PAGE>
_________________________________Shares Class B 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 Proposal 1.
Signature(s)_______________________________
___________________________________________
Date:________________________________, 1997
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
- --------------------------------------------------------------------------------
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 May 2, 1997, and does hereby
appoint Mark C. Pope III and Alvan A. Herring Jr., 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
Ritz-Carlton Hotel-Buckhead, 3434 Peachtree Rd., NE, Atlanta, Georgia, at 10:00
a.m., local time, on June 3, 1997, and any adjournment(s) thereof:
1. Election of Directors:
[_] FOR all nominees listed below
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all nominees listed below.
M. Pope, III; W. Wood; J. Pope; C. Pope
A. Herring; J. Hatcher.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space below.)
----------------------------------------------------------
2. In their discretion, the Proxies are authorized to vote on such other
business as may properly come before the meeting or any adjounment thereof.
This Proxy may be revoked at any time prior to the voting thereof.
PLEASE SIGN ON THE 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 Proposal 1.
Signature(s)
--------------------------
--------------------------------------
Date: , 1997
--------------------------
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
- --------------------------------------------------------------------------------
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 May 2, 1997, and does hereby
appoint Mark C. Pope III and Alvan A. Herring Jr., 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
Ritz-Carlton Hotel-Buckhead, 3434 Peachtree Rd, NE, Atlanta, Georgia at 10:00
a.m., local time, on June 3, 1997, and any adjournment(s) thereof:
1. Election of Directors:
[_] FOR all nominees listed below
(except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all nominees listed below.
L. Benatar, 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. 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 THE OTHER SIDE.
