As filed with the Securities and Exchange Commission on May 13, 1996
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
SCAN-GRAPHICS, INC.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 95-4091769
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
700 Abbott Drive
Broomall, Pennsylvania 19008
(610) 328-1040
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
JOSEPH N. BATTISTA, JR.
Vice President-Finance, Chief Financial Officer
Scan-Graphics, Inc.
700 Abbott Drive
Broomall, Pennsylvania 19008
(610) 328-1040
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
JAY WEIL, ESQ.
Lowenthal, Landau, Fischer & Bring, P.C.
250 Park Avenue
New York, New York 10177
(212) 986-1116
Facsimile No. (212) 986-0604
Approximate Date of Proposed Sale to the Public: As soon as practicable after
this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /x/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed Proposed
Maximum Maximum
Aggregate Aggregate Amount of
Amount to be Price per Offering Registration
Title of Shares to be Registered Registered(1) Unit(2) Price(2) Fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares of Common Stock, par value $.001 11,820,763 $3.00 $35,462,289 $12,228.38
per share
==================================================================================================================================
</TABLE>
(1) Includes 10,677,763 shares reserved for issuance upon exercise of
outstanding warrants and conversion of shares of preferred stock or
convertible promissory notes held by certain of the Selling
Shareholders, which shares of Common Stock are being offered pursuant
to the Registration Statement. This Registration Statement also covers
such indeterminate number of additional shares of Common Stock as may
be issuable upon the exercise of such warrants and conversion of
preferred stock as a result of future stock dividends, stock
distributions, stock splits and similar capital readjustments.
(2) Estimated solely for purposes of calculating the registration fee.
------------------------------------
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SCAN-GRAPHICS, INC.
Cross Reference Sheet
<TABLE>
<CAPTION>
Form S-3 Item Nos. and Caption Prospectus Caption
- ------------------------------------------------------------- -------------------------------------------------
<S> <C> <C>
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus..................... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of Inside Front and Outside Back Cover
Prospectus......................................... Pages
3. Summary Information, Risk Factors, and Ratio
of Earnings to Fixed Charges....................... The Company; Risk Factors
4. Use of Proceeds.................................... Use of Proceeds
5. Determination of Offering Price.................... *
6. Dilution........................................... *
7. Selling Security-Holders........................... Selling Shareholders
8. Plan of Distribution............................... Outside Front Cover Page; Plan of
Distribution
9. Description of Securities to be Registered......... Outside Front Cover Page of Prospectus;
Incorporation of Certain Documents By
Reference
10. Interests of Named Experts and Counsel............. *
11. Material Changes................................... Recent Developments
12. Incorporation of Certain Information by Incorporation of Certain Documents By
Reference.......................................... Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities..... *
</TABLE>
- ---------------------------
* Not applicable.
<PAGE>
PROSPECTUS
Subject to Completion, dated May 13, 1996
11,820,763 Shares
SCAN-GRAPHICS, INC.
Common Stock
($.001 Par Value)
------------------------------------
The shares offered hereby (the "Shares") consist of 1,143,000
outstanding shares of common stock, $.001 par value per share (the "Common
Stock") of Scan-Graphics, Inc., a Pennsylvania corporation (the "Company"), held
by certain persons who acquired Common Stock in private placements or who
acquired Common Stock upon the exercise of warrants, 3,100,000 shares of Common
Stock issuable upon the conversion of outstanding shares of the Company's Class
A Convertible Preferred Stock Series C, par value $10.00 per share ("Series C
Stock"), 1,716,920 shares of Common Stock issuable upon the conversion of
certain outstanding convertible notes of the Company ("Convertible Notes"), and
5,860,843 shares of Common Stock issuable upon the exercise of common stock
purchase warrants ("Warrants"). The number of shares of Common Stock being
offered pursuant to this Prospectus by the Selling Shareholders, including the
number of shares issuable upon exercise of the Warrants and conversion of Series
C Stock and Convertible Notes, represents approximately 113% of the total Common
Stock outstanding as of May 1, 1996.
The Shares may be offered from time to time by the Selling
Shareholders identified herein. See "Selling Shareholders." The Selling
Shareholders offering Shares covered by this Prospectus include the Company's
Chief Executive Officer, other executive officers of the Company and its
subsidiaries and the Company's Directors. Except for the exercise price of the
Options and Warrants, the Company will not receive any part of the proceeds from
the sale of the Shares. All expenses of registration incurred in connection
herewith are being borne by the Company, but all selling and other expenses
incurred by the Selling Shareholders will be borne by the Selling Shareholders.
The Selling Shareholders have not advised the Company of any
specific plans for the distribution of the Shares covered by this Prospectus,
but it is anticipated that the Shares will be sold from time to time primarily
in transactions (which may include block transactions) on the National
Association of Securities Dealers Automated Quotation ("NASDAQ") System at the
market price then prevailing, although sales may also be made in negotiated
transactions or otherwise. The Selling Shareholders and the brokers and dealers
through whom sale of the Shares may be made may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended, and their
commission or discounts and other compensation may be regarded as underwriters'
compensation. See "Plan of Distribution."
The Company's Common Stock is traded in the over-the-counter
market and quoted on NASDAQ under the symbol "SCNG." On May 9, 1996, the closing
bid price of the Common Stock was $2-15/16.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 3.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
------------------
The date of this Prospectus is _________, 1996
1
<PAGE>
No dealer, salesman or other person has been authorized to
give any information or to make any representations, other than those contained
or incorporated by reference in this Prospectus, in connection with the offering
contained herein, and, if given or made, such information and representations
must not be relied upon as having been authorized by the Company or the Selling
Shareholders. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction. Neither the delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of the Company since the date hereof.
A registration statement on Form S-3 in respect of the Shares
offered by this Prospectus (the "Registration Statement") has been filed with
the Securities and Exchange Commission (the "Commission"), 450 Fifth Street,
N.W., Washington, D.C. 20549, under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information
contained in such Registration Statement, certain portions of which have been
omitted herefrom pursuant to the rules and regulations of the Commission.
Accordingly, additional information concerning the Company and the Shares is
included in the Registration Statement, including the exhibits thereto, which
may be inspected at the Public Reference Section of the Commission.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files reports and other information with the Commission. These
reports, proxy statements and other information may be inspected and copied at
the public reference facility maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following regional offices: Northeast Regional Office, Suite 1300, 7 World Trade
Center, New York, New York 10048, and Midwest Regional Office, Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60621-2511. Copies of such material may be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
2
<PAGE>
THE COMPANY
Scan-Graphics, Inc., a Pennsylvania corporation (the
"Company"), is a provider of Geographic Information Systems ("GIS") database
management software products and is a pioneer and leader in scanning and image
processing technology, large document scanners, backfile conversion services,
and imaging software and systems. The Company markets its products
internationally through systems integrators and distributors. The Company's
principal offices are located at 700 Abbott Drive, Broomall, Pennsylvania 19008,
and its telephone number at that address is (610) 328-1040.
RISK FACTORS
In addition to the other information in this Prospectus, the
following factors should be considered carefully by prospective investors in
evaluating the Company and its business before purchasing the Shares offered by
the Prospectus:
Effect of Offering on Market Price of Common Stock. The number
of shares of Common Stock being offered pursuant to this Prospectus by the
Selling Shareholders, including the number of shares issuable upon exercise of
the Warrants and conversion of the Series C Stock and Convertible Notes,
represents approximately 113% of the total Common Stock outstanding as of May 1,
1996. See "Selling Shareholders." Each Selling Shareholder intends to offer its
Common Stock at such time and in such manner as it deems appropriate. There are
no agreements between the Selling Shareholders and the Company with respect to
the sale of Common Stock, and the Company knows of no agreements among the
Selling Shareholders. If the Selling Shareholders were simultaneously to offer a
large amount of Common Stock in the market, the market price of Common Stock
could be adversely affected. See "Plan of Distribution."
History of Operating Losses. The Company has a history of
losses. Other than for achieving a nominal net operating profit for the fiscal
year ended December 31, 1992, the Company has incurred net operating losses in
1988 and in each year thereafter. As of December 31, 1995, the Company had
accumulated losses (deficit) of approximately $8,832,000 and a positive net
worth of approximately $2,105,000. There are no material adverse trends known to
the Company which will continue to affect the Company's operations. The Company
has taken steps to improve its results from operations and financial condition
by acquiring Sedona GeoServices, Inc. ("Sedona") in July 1995 and Tangent
Engineering, Inc. ("Tangent") in December 1995, raising capital through the
private placement of its securities, expanding sales distribution channels for
its products and introducing new products into the market. There exist
uncertainties as to product acceptance and the potential market for the
Company's new products, including those of its subsidiaries, Sedona and Tangent,
and, as a result, there can be no assurance that the Company will be able to
reverse the operating loss trend or assure future profitability.
No Assurance of Active Public Market; Possible Volatility of
Stock Price; No Dividends. Prior to the date of this Prospectus, there has been
an active public market for the Company's Common Stock, but there can be no
assurance that an active public market will be sustained. Additionally, the
market price for the Company's Common Stock has been volatile. The Company has
not paid any cash dividends on its Common Stock and does not anticipate paying
any such dividends in the foreseeable future.
Need for Additional Funding. The Company will not receive any
of the proceeds from the sale of Shares by the Selling Shareholders. In the
event that some or all of the Warrants or outstanding options to purchase Common
Stock ("Options") were to be exercised, the Company would receive the net
proceeds upon such exercises. See "Use of Proceeds." The Company believes that
cash from operations along with the net proceeds from the exercise of the
Warrants and Options if any, together with cash in excess of $2,140,000 as of
May 1, 1996, will be sufficient to enable it to conduct its operations as
currently contemplated for a period of at least two years. However, in the event
that all or a portion of an aggregate $3,100,000 principal amount of Convertible
Notes and accrued interest thereon is not converted into Common Stock at the
option of the holders thereof on or prior to March 26, 1997, the Company may be
required to raise additional funds to pay the principal and interest
3
<PAGE>
of such unconverted Convertible Notes. The Company also believes it may need to
raise substantial additional funds to support its long-term growth, in which
case the Company may seek additional funding through public or private sales of
its securities, including equity securities. There can be no assurance, however,
that such additional funds will be available when needed, or on terms acceptable
to the Company, if at all. See "History of Operating Losses."
Net Operating Loss Carryforwards. The Company believes that,
as of December 31, 1995, it had net operating loss carryforwards ("NOLs") for
federal income tax purposes aggregating approximately $8.0 million. These NOLs,
if unused, will expire between 1998 and 2010. Section 382 of the Internal
Revenue Code of 1986, as amended (the "Code") imposes an annual limitation on
the amount of taxable income that may be offset by net operating loss
carryforwards of a corporation if the losses giving rise to the net operating
loss carryforwards were incurred before an "ownership change." The use by the
Company of the NOLs to offset future taxable income will be limited by Section
382 of the Code and may be limited by other provisions of the Code. The Company
believes that this offering will not trigger an ownership change under Section
382. The Internal Revenue Service may dispute the amount of the NOLs, may
disagree with the Company's interpretation of how Section 382 applies to limit
its use of the NOLs and may contend that limitations contained in the Code,
other than those discussed above, apply to the Company's NOLs. Therefore, no
assurances can be given with respect to the existence or potential use of the
Company's NOLs.
NASDAQ Listing Requirements. For continued inclusion on the
NASDAQ System, the Company must meet certain qualification requirements. Among
these criteria are the following requirements: (1) the issue has at least two
registered and active market makers; (2) the Company has total assets of at
least $2 million; (3) the Company has capital and surplus of at least $1
million; (4) the minimum bid price per share is at least $1; (5) there are at
least 300 holders of the common stock; and (6) there are at least 100,000
publicly held shares with a market value of at least $200,000. The Company
currently meets the continued inclusion requirements of the NASDAQ System.
However, if the Company continues to suffer operating losses without additional
infusions of capital, or if NASDAQ raises its minimum listing requirements, the
Company may be subject to delisting of its Common Stock, which could have a
material adverse effect on the market price of the Common Stock.
Dependence on Key Personnel. The Company is dependent upon the
efforts, ability and experience of several key members of its management for the
successful operation and development of its business. In addition, the Company
believes that its future success will depend in large part upon its ability to
attract and retain technically qualified personnel with backgrounds in
engineering, software development, production and marketing. There can be no
assurance that the Company will be able to retain key employees. The loss of the
services of one or more key employees could have a material adverse effect on
the Company's business.
Exercise of Warrants and Options and Conversion of Series C
Stock and Convertible Notes. As of May 1, 1996, there were outstanding Warrants
to purchase 7,043,649 shares of Common Stock, of which Warrants to purchase an
aggregate of 4,561,155 shares of Common Stock were immediately exercisable. The
outstanding Warrants are exercisable at prices ranging from $.375 to $4.00 per
share. The weighted average exercise price of all outstanding Warrants as of May
1, 1996 was approximately $2.44 per share. As of such date, there were also
outstanding Options to purchase 1,096,032 shares of Common Stock, of which
Options to purchase 976,032 shares of Common Stock were immediately exercisable.
All of these Options were issued to officers, directors and employees of the
Company and are exercisable at prices ranging from approximately $.469 to $3.50
per share. The weighted average exercise price of all Options outstanding as of
was approximately $1.42 per share. As of May 1, 1996 there were outstanding
125,000 shares of Series C Stock having an aggregate liquidation preference of
approximately $1,333,000, all of which shares were subscribed for during the
period from June to September in 1995. Commencing two years after the date it
was subscribed and paid for each outstanding share of Series C Stock is
convertible into a number of shares of Common Stock at a rate based upon 50% of
the average quoted daily closing bid price of the Common Stock for a period of
20 trading days immediately preceding the giving by the holder to the Company of
a notice of conversion, but the conversion rate shall in no event be greater
than one share of Common Stock for every $.50 of liquidation preference of the
Series C Stock or less than one share of Common Stock for every $2.50 of
liquidation preference of the Series C Stock. The liquidation preference of the
Series C Stock includes accrued and unpaid dividends on such Series C Stock.
Based upon an assumed conversion rate of one share for every $.50 of liquidation
preference, the shares of Series C Stock outstanding as
4
<PAGE>
of May 1, 1996 will be convertible into an aggregate of 2,666,000 shares of
Common Stock. Assuming no dividends are paid on such shares for three years from
the date of subscription and payment therefor and assuming the same conversion
rate, an aggregate of 3,100,000 of Common Stock would be issuable in respect of
such shares. As of May 1, 1996 there were outstanding Convertible Notes in the
aggregate principal amount of $3,100,000 which were immediately convertible into
Common Stock at a rate of one share of Common Stock for an amount of principal
and accrued interest of the Convertible Note equal to the lesser of $3.00 or 65%
of the average closing bid price of a share of Common Stock during the five
trading days immediately preceding the date of such conversion. Based upon the
average closing bid price of the Common Stock for the five trading days
preceding May 1, 1996, the entire outstanding principal of the Convertible Notes
was convertible into an aggregate of 1,730,333 shares of Common Stock as of May
9, 1996. While outstanding Warrants and Options are exercisable and the Series C
Stock and Convertible Notes are convertible, the holders thereof have the
opportunity to profit from a rise in the market price of the Common Stock. The
Company may find it more difficult to raise additional equity capital while the
Warrants, Options, Series C Stock and Convertible Notes are outstanding.
Technological Obsolescence. The Company maintains continuous
research and development programs with the goal of maintaining its software and
scanner products as technically strong competitive offerings to their respective
markets. The Company has incurred research and development expenses of
approximately $582,000, $783,000 and $770,000 which amounted to 11.7%, 15.5% and
20.1% of its total revenues for the years 1995, 1994 and 1993, respectively. The
Company anticipates research and development expenses of approximately 20% of
total revenue in 1996 and approximately 15% of total revenue in 1997. Although
the Company intends to continue its on-going research and development efforts,
the Company's competitors might succeed in developing technologies and products
that are more attractive than any that are being developed and marketed by the
Company or that would otherwise render the Company's technology and products
obsolete or noncompetitive.
Competition. The GIS, scanning and image processing industries
are highly competitive. The Company competes with a number of competitors, many
of which have substantially greater financial and marketing resources than the
Company. The Company offers an advanced line of GIS software and large format
scanners and imaging software through a variety of domestic and international
distribution channels. There can be no assurance that the Company will not
encounter competition in the future which will limit the Company's ability to
maintain and increase its position in the market for its products or otherwise
adversely affect the Company's business. The Company has only recently begun to
compete in the GIS software market and there can be no assurance that the
Company will be able to successfully compete with its more established
competitors.
USE OF PROCEEDS
In the event that all of the outstanding Warrants and Options
were to be exercised, the net proceeds to the Company upon such exercises,
estimated at approximately $18,700,000, would be used for product development,
sales and marketing expenses, working capital and for general corporate
purposes. The Company will not receive any proceeds from the sale of the Shares
by the Selling Shareholders.
Prior to expenditure, the net proceeds from the exercise of
the Warrants and Options will be invested in high grade short and intermediate
term interest bearing investments.
RECENT DEVELOPMENTS
On March 27, 1996 the Company consummated the sale to certain
of the Selling Shareholders for an aggregate purchase price of $3,100,000, of an
aggregate of (a) $3,100,000 principal amount of the Company's 8% Convertible
Notes due March 26, 1997, (b) Warrants to purchase an aggregate of 1,400,005
Shares for $3.00 per Share (or, if less, the lowest price per Share at which any
conversion shall have occurred under any of the Convertible Notes) at any time
until March 26, 1999 and (c) Warrants to purchase an aggregate of 1,200,005
Shares for $4.00 per Share at any time until March 26, 1999. The net proceeds of
the sale of such securities are being used for working capital.
5
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth as of May 1, 1996, information
regarding the beneficial ownership of Common Stock held by the Selling
Shareholders who may resell the Shares pursuant to this Prospectus as of such
date, the number of Shares registered to permit sales from time to time by such
Selling Shareholders, and the total beneficial ownership of shares of Common
Stock if all such Shares so registered should be sold by the Selling
Shareholders.
<TABLE>
<CAPTION>
Total Number
of Shares to Total Number of
be Offered for Shares to be
Shares Beneficially Selling Beneficially Owned
Name of Selling Owned Prior to Shareholder's Upon Completion of
Shareholder Offering** Account** Offering (1)
- --------------------------------- --------------------------- ---------------------- ----------------------------
Number Percent
----------------------------
<S> <C> <C> <C> <C>
Andrew E. Trolio (2) 3,068,500(3) 611,000 2,457,500 11.6%
Howard L. Morgan (4) 179,308(5) 44,800 134,508 *
James C. Sargent (6) 106,308(7) 24,800 81,508 *
David S. Hirsch (8) 251,508(9) 112,000 139,508 *
Michael A. Mulshine (10) 405,068(11) 189,733 215,335 1.0%
William W. Rider & 99,200(12) 99,200 0 *
Sheryl S. Rider
*JTWROS*
David Green 99,200(12) 99,200 0 *
George Hooper 149,000(13) 124,000 25,000 *
Thomas J. Marquez 959,000(14) 744,000 215,000 1.0%
Thomas J. Marquez & 248,000(12) 248,000 0 *
Richard N. Mercurio,
Trustee, Marquez
Family
Trust
Richard N. Mercurio, 248,000(12) 248,000 0 *
Trustee Meredith Ann
Marquez, Present
Interest Trust
Paul Becker 25,800(15) 24,800 1,000 *
William J. Ritger (16) 230,800(17) 218,800 12,000 *
John L. Strauss 744,000(12) 744,000 0 *
Allan H. Thomas III (18) 110,000(19) 110,000 0 *
John Lammers (18) 110,000(19) 110,000 0 *
Daniel I. Ward (18) 110,000(19) 110,000 0 *
George Gray (20) 138,800(21) 110,000 28,800 *
Todd Rothermel (20) 125,000(21) 110,000 15,000 *
Kimberly Thomas (20) 120,000(22) 110,000 10,000 *
Lynn Bigelow (20) 120,000(22) 110,000 10,000 *
Tim Rimlinger (20) 120,000(22) 110,000 10,000 *
Doug Rubinstein (20) 120,000(22) 110,000 10,000 *
Andrew Field (20) 120,000(22) 110,000 10,000 *
Gregory B. Smith (20) 120,000(22) 110,000 10,000 *
C&F Global Enterprises, 222,500(19) 222,500 0 *
Inc. (23)
Osprey Partners (24) 567,180(25) 440,000 127,180 *
William C. Hubbard (26) 194,000(27) 174,000 20,000 *
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Total Number
of Shares to Total Number of
be Offered for Shares to be
Shares Beneficially Selling Beneficially Owned
Name of Selling Owned Prior to Shareholder's Upon Completion of
Shareholder Offering** Account** Offering (1)
- --------------------------------- --------------------------- ---------------------- ----------------------------
Number Percent
----------------------------
<S> <C> <C> <C> <C>
Sales Resources 95,000(19) 25,000 70,000 *
Consultants, Inc. (28)
Robert J. Bornhofen (29) 800,000(30) 800,000 0 *
Robert A. Garber (31) 300,000(19) 300,000 0 *
Ronald J. Nowak (32) 800,000(30) 800,000 0 *
Bryan Finkel (33) 200,000(19) 200,000 0 *
Killeba Holdings, S.A. 1,328,046(34) 1,328,046 0 *
Abraham S. Elias 46,481(35) 46,481 0 *
Mueller Trading LP 6,639(36) 6,639 0 *
Ruthy Halima 6,639(36) 6,639 0 *
Wolowitz Pension Fund 19,920(37) 19,920 0 *
Moshe Mueller 6,639(36) 6,639 0 *
Clifton Management & 6,639(36) 6,639 0 *
Trading Inc.
Samuel Shapiro 6,639(36) 6,639 0 *
OHR Somayach 33,200(38) 33,200 0 *
Tanenbaum Education
Center
Mirrer Yeshiva Central 33,200(38) 33,200 0 *
Institute
Rita Folger 66,402(39) 66,402 0 *
Seth Antine 13,280(40) 13,280 0 *
Mark Nordlicht 212,487(41) 212,487 0 *
Jules Nordlicht 332,012(42) 332,012 0 *
Chesed Avraham 132,805(43) 132,805 0 *
Mark Fisher 66,402(39) 66,402 0 *
Leonard J. Adams 66,402(39) 66,402 0 *
Wayne Saker 66,402(39) 66,402 0 *
Israel Trading Fund, Ltd. 199,207(44) 199,207 0 *
Yeshiva Beth Mikroh 66,402(39) 66,402 0 *
Dalton Trading, S.A. 531,218(45) 531,218 0 *
Reuven Dessler 66,402(39) 66,402 0 *
The NAIS Corp. 6,639(36) 6,639 0 *
American Stock Transfer 132,805(43) 132,805 0 *
& Trust Company
Laura Huberfeld/Naomi 664,023 (46) 664,023 0 *
Bodner Partnership
</TABLE>
- ---------------
* Indicates less than 1%.
** Except as otherwise noted, all shares are beneficially owned, and sole
voting and investment power is held by the person named. Includes shares
issuable upon the conversion of any shares of Series C Stock (and accrued
dividends on such shares for three years from the date of issuance) held by
the person named at an assumed conversion rate which would result in the
maximum number of shares of Common Stock being issued upon such conversion
(not including adjustments in the conversion rate made as a result of
provisions of the Series C Stock intended to protect the holder against
dilution). Includes shares issuable upon the
7
<PAGE>
conversion of the principal (and accrued interest equal to 8% of the
original principal of a Convertible Note) of any Convertible Note held by
the person named at an assumed conversion rate of one share of Common Stock
for each $1.95 of outstanding principal and accrued interest of the
Convertible Note.
(1) Assumes the issuance and sale of all shares listed in the "Total Number of
Shares to be Offered for Selling Shareholder's Account" column. Also
assumes that none of the Selling Shareholders sell securities not listed in
such column or purchase additional securities.
(2) Mr. Trolio is Chairman of the Board, Chief Executive Officer, President and
a Director of the Company.
(3) Includes 112,860 shares held by Mr. Trolio's wife, as to all of which
shares Mr. Trolio disclaims beneficial ownership; 592,500 shares issuable
upon exercise of outstanding Warrants and 300,000 shares issuable upon
exercise of outstanding Options; 220,000 shares issuable upon exercise of
outstanding Warrants in the name of Lin Lea Corporation which is a company
owned by Mr. Trolio; and 500,000 shares issuable upon conversion of the
Company's Class A Convertible Preferred Stock Series A of which 280,000
shares and 220,000 shares are in the names of Mr. Trolio and Lin Lea
Corporation, respectively; and 496,000 shares issuable upon conversion of
Series C Stock.
(4) Dr. Morgan is a Director of the Company
(5) Includes 57,222 shares issuable upon exercise of outstanding Options and
24,800 shares issuable upon conversion of Series C Stock.
(6) Mr. Sargent is a Director of the Company.
(7) Includes 71,508 shares issuable upon exercise of outstanding Options and
24,800 shares issuable upon conversion of Series C Stock.
(8) Mr. Hirsch is a Director of the Company.
(9) Includes 56,508 shares issuable upon exercise of outstanding Options,
50,000 shares issuable upon exercise of outstanding Warrants and 62,000
shares issuable upon conversion of Series C Stock.
(10) Mr. Mulshine is Secretary and a Director of the Company.
(11) Includes 17,930 shares held jointly by Mr. Mulshine and his wife;
255,333 shares issuable upon exercise of outstanding Warrants; 44,286
shares issuable upon exercise of outstanding Options; and 12,400 shares
issuable upon conversion of Series C Stock. Does not include 567,180
shares issuable upon exercise of Warrants held by Osprey Partners of
which Mr. Mulshine is a principal.
(12) All of such shares are issuable upon conversion of Series C Stock.
(13) Includes 124,000 shares issuable upon conversion of Series C Stock.
(14) Includes 744,000 shares issuable upon conversion of Series C Stock.
(15) Includes 24,800 shares issuable upon conversion of Series C Stock.
(16) Mr. Ritger is a registered security analyst and is a principal of The
Research Works, Inc., an analyst firm which prepared and distributed two
analyst reports with regard to the Company pursuant to an agreement to
provide limited analyst coverage.
(17) Includes 82,000 shares issuable upon exercise of outstanding Warrants and
148,800 shares issuable upon conversion of Series C Stock.
8
<PAGE>
(18) The Selling Shareholder was a shareholder of Sedona GeoServices, Inc. at
the time of its acquisition by the Company in July 1995.
(19) All of such shares are issuable upon exercise of outstanding Warrants.
(20) The Selling Shareholder was a shareholder of Sedona GeoServices, Inc. at
the time of its acquisition by the Company in July 1995 and became an
employee of the Company at such time.
(21) Includes 110,000 shares issuable upon exercise of outstanding Warrants and
15,000 shares issuable upon exercise of outstanding Options.
(22) Includes 110,000 shares issuable upon exercise of outstanding Warrants and
10,000 shares issuable upon exercise of outstanding Options.
(23) C&F Global Enterprises, Inc. is a business and sales development firm that
has provided certain consulting services to the Company.
(24) Osprey Partners provided consulting and investment banking services to the
Company. Michael A. Mulshine, Secretary and a Director of the Company, is a
principal of Osprey Partners.
(25) Includes 684,363 shares issuable upon exercise of outstanding Warrants.
(26) Mr. Hubbard is an Executive Vice President of Marketing & Sales of the
Company.
(27) Includes 20,000 shares issuable upon exercise of outstanding Options and
81,000 shares issuable upon exercise of outstanding Warrants.
(28) Sales Resources Consultants, Inc. provided certain sales and business
consulting services to the Company.
(29) Mr. Bornhofen is a Vice President of Tangent, a subsidiary of the Company.
(30) Includes 300,000 shares issuable upon exercise of outstanding Warrants.
(31) Mr. Garber is Vice President and Chief Operating Officer of Tangent and a
director of the Company.
(32) Mr. Nowak is a Senior Vice President of Tangent.
(33) Mr. Finkel is a management consultant that has been retained by the
Company.
(34) Includes 553,846 shares issuable upon conversion of a Convertible Note in
the principal amount of $1,000,000 and 774,200 shares issuable upon
exercise of outstanding Warrants.
(35) Includes 19,385 shares issuable upon conversion of a Convertible Note in
the principal amount of $35,000 and 27,096 shares issuable upon exercise of
outstanding Warrants.
(36) Includes 2,769 shares issuable upon conversion of a Convertible Note in the
principal amount of $5,000 and 3,870 shares issuable upon exercise of
outstanding Warrants.
(37) Includes 8,308 shares issuable upon conversion of a Convertible Note in the
principal amount of $15,000 and 11,612 shares issuable upon exercise of
outstanding Warrants.
(38) Includes 13,846 shares issuable upon conversion of a Convertible Note in
the principal amount of $25,000 and 19,354 shares issuable upon exercise of
outstanding Warrants.
9
<PAGE>
(39) Includes 27,692 shares issuable upon conversion of a Convertible Note in
the principal amount of $50,000 and 38,710 shares issuable upon exercise of
outstanding Warrants.
(40) Includes 5,538 shares issuable upon conversion of a Convertible Note in the
principal amount of $10,000 and 7,742 shares issuable upon exercise of
outstanding Warrants.
(41) Includes 88,615 shares issuable upon conversion of a Convertible Note in
the principal amount of $160,000 and 123,872 shares issuable upon exercise
of outstanding Warrants.
(42) Includes 138,462 shares issuable upon conversion of a Convertible Note in
the principal amount of $250,000 and 193,550 shares issuable upon exercise
of outstanding Warrants.
(43) Includes 55,385 shares issuable upon conversion of a Convertible Note in
the principal amount of $100,000 and 77,420 shares issuable upon exercise
of outstanding Warrants.
(44) Includes 83,077 shares issuable upon conversion of a Convertible Note in
the principal amount of $150,000 and 116,130 shares issuable upon exercise
of outstanding Warrants.
(45) Includes 221,538 shares issuable upon conversion of a Convertible Note in
the principal amount of $400,000 and 309,680 shares issuable upon exercise
of outstanding Warrants.
(46) Includes 276,923 shares issuable upon conversion of a Convertible Note in
the principal amount of $500,000 and 387,100 shares issuable upon exercise
of outstanding Warrants.
PLAN OF DISTRIBUTION
The Shares owned by or to be acquired by the Selling
Shareholders upon exercise of Options or Warrants may be sold from time to time
by the Selling Shareholders, or by pledgees, donees, transferees or other
successors in interest.
The Selling Shareholders may sell some or all of the Shares in
transactions involving broker-dealers, who may act as agent or acquire the
Shares as principal. Any broker-dealer participating in such transactions as
agent may receive commissions from the Selling Shareholders (and, if they act as
agent for the purchaser of such Shares, from such purchaser). Usual and
customary brokerage fees will be paid by the Selling Shareholders.
Broker-dealers may agree with the Selling Shareholders to sell a specified
number of Shares at a stipulated price per Share and, to the extent such a
broker-dealer is unable to do so acting as agent for the Selling Shareholders,
to purchase as principals any unsold Shares at the price required to fulfill the
respective broker-dealer's commitment to the Selling Shareholders.
Broker-dealers who acquire Shares as principals may thereafter resell such
Shares from time to time in transactions (which may involve cross and block
transactions and which may involve sales to and through other broker-dealers,
including transactions of the nature described above) in the over-the-counter
market, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices, and in connection with such resales
may pay to or receive from the purchases of such Shares commissions. The Selling
Shareholders also may sell some or all of the Shares directly to purchasers
without the assistance of any broker-dealer.
The Company is bearing all costs relating to the registration
of the Shares. Any commissions or other fees payable to broker-dealers in
connection with any sale of the Shares will be borne by the Selling Shareholders
or other party selling such Shares.
Upon the Company's being notified by the Selling Shareholders
that any material arrangement has been entered into with a broker-dealer or
underwriter for the sale of a material portion of the Shares covered by this
Prospectus, a post-effective amendment will be filed setting forth the name of
the participating broker-dealer(s) or underwriters, the number of Shares
involved, the price at which such Shares were sold by the Selling
10
<PAGE>
Shareholders, the commissions paid or discounts or concessions allowed by the
Selling Shareholders to such broker- dealer(s)or underwriters, and where
applicable, that such broker-dealer(s) or underwriters did not conduct any
investigation to verify the information set out in this Prospectus. Any future
offering via broker-dealers or underwriters of a material portion of the Shares
covered by this Prospectus would be contingent upon the effectiveness of such
post-effective amendment and clearance by the National Association of Securities
Dealers, Inc. of the proposed underwriting compensation arrangements.
LEGAL OPINION
The validity of the Shares offered hereby will be passed upon
for the Company by Dilworth, Paxson, Kalish & Kauffman LLP.
EXPERTS
The financial statements and schedule incorporated by
reference in this Prospectus have been audited by BDO Seidman, LLP, and
Ehrhardt, Keefe, Steiner & Hottman P.C. independent certified public
accountants, to the extent and for the periods set forth in their reports
incorporated herein by reference, and are incorporated herein in reliance upon
such reports given upon the authority of said firms as experts in auditing and
accounting.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the
Company with the Commission are incorporated by reference in this Prospectus.
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995.
(b) The Company's Current Report on Form 8-K, dated January
12, 1996, as amended March 11, 1996.
(c) All other reports pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the
end of the Company's fiscal year ended December 31, 1995.
(d) The description of the Company's Common Stock which is
contained in the Company's Registration Statement on Form 8-B filed under the
Exchange Act, including any amendment or reports filed for the purpose of
updating such description.
All reports and other documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such reports and documents.
Any statement contained in a document, all or a portion of
which is incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained or incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom
this Prospectus is delivered a copy of any or all of such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the documents that
this Prospectus incorporates). Written requests for copies should be directed
to Joseph N. Battista, Jr., Vice President and Chief Financial Officer,
Scan-Graphics, Inc., 700 Abbott Drive, Broomall, PA 19008.
<PAGE>
==========================================================
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TABLE OF CONTENTS
Page
Available Information.............................. 2
The Company........................................ 3
Risk Factors....................................... 3
Use of Proceeds.................................... 5
Recent Developments................................ 5
Selling Shareholders............................... 6
Plan of Distribution .............................. 10
Legal Opinion...................................... 11
Experts............................................ 11
Incorporation of Certain
Documents by Reference.......................... 11
---------------------------
==========================================================
==========================================================
11,820,763 Shares
SCAN-GRAPHICS, INC.
Common Stock
---------------------------
PROSPECTUS
---------------------------
, 1996
==========================================================
12
<PAGE>
Item 15. Indemnification of Directors and Officers.
- ----------------------------------------------------
The Pennsylvania Business Corporation Law of 1988, as amended (the
"BCL"), permits a corporation to indemnify its directors and officers against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in connection with any
pending, threatened or completed action or proceeding, and permits such
indemnification against expenses (including attorney's fees) incurred by them in
connection with any pending, threatened or completed derivative action, if the
director or officer has acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal proceeding, had no reasonable cause to believe his
or her conduct was unlawful. Pennsylvania law requires that a corporation
indemnify its directors and officers against expenses (including attorney's
fees) actually and reasonably incurred by them in connection with any action or
proceeding, including derivative actions, to the extent that such person has
been successful on the merits or otherwise in defense of the action or in
defense of any claim, issue or matter therein. Furthermore, Pennsylvania law
provides that expenses incurred in defending any action or proceeding may be
paid by the corporation in advance of the final disposition upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is ultimately determined that the director or officer is not entitled to be
indemnified by the corporation.
In Pennsylvania, the statutory provisions for indemnification and
advancement of expenses are non-exclusive with respect to any other rights, such
as contractual rights or under a by-law or vote of shareholders or disinterested
directors, to which a person seeking indemnification or advancement of expenses
may be entitled. Such contractual or other rights may, for example, under
Pennsylvania law, provide for indemnification against judgments, fines and
amounts paid in settlement incurred by the indemnified person in connection with
derivative actions. Pennsylvania law permits such derivative action
indemnification in any case except where the act or failure to act giving rise
to the claim for indemnification is determined by a court to have constituted
willful misconduct or recklessness.
The provisions of Article VII of the Company's By-laws require or
authorize indemnification of officers and directors in all situations in which
it is not expressly prohibited by law. At the present time, the limitations on
indemnification would be dictated by the BCL and related legislation, which
prohibit indemnification where the conduct is determined by a court to
constitute willful misconduct or recklessness. Subject to these statutory
limitations, the By-laws specifically authorize indemnification against both
judgments and amounts paid in settlement of derivative suits. These provisions
also authorize indemnification for negligence or gross negligence and for
punitive damages and certain liabilities incurred under the federal securities
laws. The By-laws also prohibit indemnification attributable to receipt from the
Company of a personal benefit to which the recipient is not legally entitled.
Under the indemnification provisions of the By-laws a person who has
incurred an indemnifiable expense or liability would have a right to be
indemnified, and that right would be enforceable against the Company as long as
indemnification is not prohibited by law. To the extent indemnification is
permitted only for a portion of a liability, the By-laws also require the
Company to indemnify such portion.
II-1
<PAGE>
Section 7.03 of the By-laws provides that the financial ability of a
person to be indemnified to repay an advance of indemnifiable expenses is not a
prerequisite to the making of the advance.
Section 7.06 of the By-laws provides that any dispute concerning a
person's right to indemnification or advancement of expenses thereunder will be
resolved only by arbitration by three persons, each of whom is required to have
been a director or executive officer of a corporation whose shares, during at
least one year of such service, were listed on the New York Stock Exchange or
the American Stock Exchange or were quoted on the NASDAQ system. The Company
also is obligated to pay the expenses (including attorney's fees) incurred by
any person who is successful in the arbitration. The arbitration provisions
effectively waive the Company's right to have a court determine the
unavailability of indemnification in cases involving willful misconduct or
recklessness.
Section 7.07 of the By-laws provides that in circumstances in which
indemnification is held to be unavailable, the Company must contribute to the
liabilities to which a director or officer may be subject in such proportion as
is appropriate to reflect the intent of the indemnification provisions of the
By-laws. Since the foregoing provisions purport to provide partial relief to
directors and officers in circumstances in which the law or public policy is
construed to prohibit indemnification, substantial uncertainties exist as to the
enforceability of the provisions in such circumstances.
Section 7.10 of the By-laws also contains provisions stating that the
indemnification rights thereunder are not exclusive of any other rights to which
the person may be entitled under any statute, agreement, vote of shareholders or
disinterested directors or other arrangement.
All future directors and officers of the Company automatically would
be entitled to the protections of the indemnification provisions of the By-laws
at the time they assume office.
Pennsylvania law permits a corporation to purchase and maintain
insurance on behalf of any director or officer of the corporation against any
liability asserted against the director or officer and incurred in such
capacity, whether or not the corporation would have the power to indemnify the
director or officer against such liability. The directors and officers of the
Company are not currently covered as insureds under a directors' and officers'
liability insurance policy.
Item 16. Exhibits.
Number Description
4.1 Articles of Incorporation. Incorporated by reference to
Exhibit 3.1 to the Company's Current Report on Form 8-K
dated June 15, 1992.
4.2 By-laws. Incorporated by reference to Exhibit 3.2 to the
Company's Current Report on Form 8-K, dated June 15,
1992.
II-2
<PAGE>
*5.1 Opinion of Dilworth, Paxson, Kalish & Kauffman LLP.
*23.1 Consent of BDO Seidman, LLP.
*23.3 Consent of Dilworth, Paxson, Kalish & Kauffman LLP is
included in Exhibit 5.1.
*23.2 Consent of Ehrhardt, Keefe, Steiner & Hottman P.C.
*24.1 Powers of Attorney (contained on signature page of
Registration Statement).
- ---------------------------
* Filed herewith
Item 17. Undertakings.
- -----------------------
The undersigned registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in the Registration Statement including
(but not limited to) any addition of a managing underwriter, provided,
however, that the undertakings set forth in paragraphs (i) and (ii) above
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) The undersigned registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relative to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
(3) The undersigned registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the securities being
registered hereby which remain unsold at the termination of the offering.
(4) The undersigned registrant hereby undertakes that, for the purpose
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) The undersigned registrant hereby undertakes to deliver or cause
to be delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is incorporated
by reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer, or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of is counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Broomall, Commonwealth of Pennsylvania, on May 13,
1996.
SCAN-GRAPHICS, INC.
By:/s/Andrew E. Trolio
----------------------
Andrew E. Trolio,
President, Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Andrew E. Trolio and Joseph N. Battista, Jr. and each of them, as his lawful
attorney-in-fact and agent, each with full power of substitution and
resubstitution for him and in his name, place and stead in any and all
capacities to execute in the name of each such person who is then an officer or
director of the registrant any and all amendments (including post-effective
amendments) to this registration statement and to file the same with all
exhibits thereto and other documents in connection therewith with the Securities
and Exchange Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing required or
necessary to be done in and about the premises as fully as he might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------------------------- ------------------------------------------- -------------------------
<S> <C> <C>
/s/Andrew E. Trolio President and Chief May 13, 1996
- -------------------------------------------- Executive Officer and
Andrew E. Trolio Chairman of the Board
/s/Joseph N. Battista, Jr. Vice President-Finance, May 13, 1996
- -------------------------------------------- Chief Financial Officer
Joseph N. Battista, Jr. (Principal Financial and
Accounting Officer)
/s/Michael A. Mulshine Director and Secretary May 13, 1996
- --------------------------------------------
Michael A. Mulshine
/s/Howard L. Morgan Director May 13, 1996
- --------------------------------------------
Howard L. Morgan
/s/David S. Hirsch Director May 13, 1996
- --------------------------------------------
David S. Hirsch
/s/James C. Sargent Director May 13, 1996
- --------------------------------------------
James C. Sargent
/s/Robert A. Garber Director May 13, 1996
- --------------------------------------------
Robert A. Garber
</TABLE>
