<PAGE> 1
As filed with the Securities and Exchange Commission on November 13, 1997
Registration No. 33-70052-B
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
POST-EFFECTIVE AMENDMENT NO. 1
ON
FORM S-3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
GUNTHER INTERNATIONAL, LTD.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
51-0223195
(I.R.S. Employer
Identification Number)
ONE WINNENDEN ROAD
NORWICH, CONNECTICUT 06360
(860) 823-1427
(Address, including zip code, and
telephone number, including area code, of
registrant's principal executive offices)
FREDERICK W. KOLLING III
VICE PRESIDENT, CHIEF FINANCIAL OFFICER
AND TREASURER
GUNTHER INTERNATIONAL, LTD.
ONE WINNENDEN ROAD
NORWICH, CONNECTICUT 06360
(860) 823-1427
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
----------------
COPIES OF ALL COMMUNICATIONS SHOULD BE SENT TO:
RICHARD S. SMITH, JR., ESQ.
MURTHA, CULLINA, RICHTER AND PINNEY
CITYPLACE I -- 185 ASYLUM STREET
HARTFORD, CONNECTICUT 06103-0197
(860) 240-6000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effectiveness of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
<PAGE> 2
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, other than securities offered only in connection with dividend or interest
reinvestment plans, 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 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. [ ]
----------------
THE REGISTRANT HEREBY AMENDS THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION
STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THIS POST-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(c) OF THE
SECURITIES ACT OF 1933, MAY DETERMINE.
<PAGE> 3
PROSPECTUS 118,626 UNITS
GUNTHER INTERNATIONAL, LTD.
1,387,252 SHARES OF COMMON STOCK
This Prospectus relates to the issuance and sale (the "Offering") of up to
(i) 1,150,000 shares of the common stock, par value $.001 ("Common Stock"), of
Gunther International, Ltd., a Delaware corporation (the "Company"), reserved
for issuance upon the exercise of callable Common Stock Purchase Warrants
("Public Warrants") issued by the Company in connection with its initial public
offering consummated on December 20, 1993 together with the exercise of the
over-allotment option consummated in January 1994 (the "Initial Public
Offering"), (ii) 118,626 units of securities (the "Units") reserved for issuance
upon the exercise of the Unit Purchase Warrants (the "Underwriters' Warrants")
issued to JWCharles Securities, Inc. and Corporate Securities Group, Inc., the
underwriters of the Initial Public Offering (the "Underwriters"), (iii) 118,626
shares of Common Stock reserved for issuance upon the exercise of the
Underwriters' Warrants, and (iv) 118,626 shares of Common Stock reserved for
issuance upon exercise of the warrants underlying the Units (the "Underwriters'
Common Stock Purchase Warrants," or collectively with the Public Warrants, the
"Warrants"). All of the shares of Common Stock that may be issued and sold by
the Company as contemplated by this Prospectus are hereinafter referred to as
the "Shares."
The Shares are being offered for issuance and sale upon the terms and
conditions set forth in the Warrants and the Underwriters' Warrants. Each Public
Warrant entitles the registered holder to purchase from the Company one share of
Common Stock at an exercise price of $6.00. The Public Warrants were to expire
on December 20, 1997, however, the expiration date has been extended to December
20, 1998. The Company may call the Public Warrants upon not less than 30 days
prior written notice at a price of $.05 per Warrant, but the Company will not do
so unless the closing bid price of the Common Stock for 20 trading days within
any 30 consecutive trading day period ending not more than 10 days prior to the
notice of call equals or exceeds $8.25 per share. Any holder who does not
exercise his Public Warrants prior to their expiration or call will forfeit the
right to purchase the underlying shares of Common Stock. See "Risk Factors -
Callable Warrants" and "Description of Securities - Warrants." Each
Underwriters' Warrant entitles the registered holder to purchase from the
Company one Unit, which consists of one share of Common Stock and one
Underwriters' Common Stock Purchase Warrant. The Underwriters' Common Stock
Purchase Warrants are non-callable, but are similar to the Public Warrants in
all other respects. The Underwriters' Warrants are exercisable through December
20, 1998 at an exercise price of $6.32 per Unit, subject to adjustment pursuant
to certain anti-dilution provisions contained in the Underwriters' Warrants. The
Company's Common Stock is traded on the NASDAQ SmallCap Market under the symbol
"SORT." The Company's Warrants are quoted on the OTC Bulletin Board under the
symbol "SORTW." The last sale price per share of Common Stock as reported by
NASDAQ on November 7, 1997 was $7-3/8. The last sale price per Warrant as
reported by the OTC Bulletin Board on November 7, 1997 was $1-9/16. THE COMMON
STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS," 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
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public Discount Company (1)
<S> <C> <C> <C>
Public Warrants:
Per Share ............ $ 6.00 $ 0.00 $ 6.00
Total ................ $ 6,900,000 $ 0.00 $ 6,900,000
Underwriters' Warrants:
Per Unit ............. $ 6.32 $ 0.00 $ 6.32
Per Share(2) ......... $ 6.00 $ 0.00 $ 6.00
Total ................ $ 1,461,472 $ 0.00 $ 1,461,472
</TABLE>
(1) Before deducting expenses of the offering estimated to be $91,438.94.
(2) Per non-callable Underwriters' Common Stock Purchase Warrant
The date of this Prospectus is November ___, 1997.
<PAGE> 4
No person is authorized in connection with any offering made hereby to
give any information or to make any representation not contained in this
Prospectus, and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy by any
person in any jurisdiction in which it is unlawful to make such an offer or
solicitation to such person. Neither the delivery of this Prospectus nor any
sale made hereunder shall under any circumstance create any implication that the
information contained herein is correct as of any date subsequent to the date
hereof.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements, information statements
and other information filed by the Company with the Commission can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Regional Offices of the Commission at Room 1400, 75 Park Place, New York,
New York 10007 and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60061. Copies of such material also can be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549 at
prescribed rates.
The Company has filed with the Commission a Registration Statement under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
are omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the securities offered
hereby, reference is hereby made to the Registration Statement and the documents
filed as exhibits thereto. Statements contained in this Prospectus concerning
the provisions of any documents are necessarily incomplete, and each such
statement is qualified in its entirety by reference to the copies of such
documents filed with the Commission.
The Company's Common Stock is traded on the NASDAQ SmallCap Market under
the symbol "SORT." The Company's Warrants are quoted on the OTC Bulletin Board
under the symbol "SORTW."
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference and made a
part hereof:
(1) The Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1997;
(2) The Company's Quarterly Report on Form 10-QSB, as amended by Form
10-QSB/A dated November 7, 1997, for the fiscal quarter ended June
30, 1997;
and
(3) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, dated December 1,
1993.
<PAGE> 5
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
modifies or replaces such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock shall be deemed to be
incorporated by reference into the Prospectus and to be part hereof.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the foregoing documents
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference to the foregoing
documents). Written or telephone requests should be directed to: Gunther
International, Ltd., One Winnenden Road, Norwich, Connecticut 06360, Attn:
Corporate Secretary (Telephone: (860) 823-1427).
THE COMPANY
The Company designs, develops, assembles, markets and services highspeed
systems that automatically assemble printed documents, fold, staple or bind the
documents and insert completed documents into appropriate envelopes for mailing
or other distribution. The Company's systems are modular, incorporating
equipment designed by the Company, or designed by other manufacturers but
adapted by the Company and are driven by personal computers using software
developed by, and proprietary to, the Company. Each Company product has been
created in response to the electronic publishing revolution of the past decade,
which has enabled businesses to create large quantities of documents through the
use of non-impact laser printers on-site, at "in house" printing centers.
The Company was incorporated in the State of Delaware on March 22, 1978.
The Company's executive offices are located at One Winnenden Road, Norwich,
Connecticut 06360, and its telephone number is (860) 823-1427.
RISK FACTORS
An investment in the shares of Common Stock and Warrants underlying the
Units offered hereby involves a high degree of risk. Prospective investors,
prior to making an investment decision, should consider carefully, in addition
to the other information contained in this Prospectus (including the financial
statements and notes thereto), the following factors.
NET LOSSES FROM OPERATIONS; NEGATIVE WORKING CAPITAL
The Company sustained a net loss of $879,555 during the year ended March
31, 1996, and generated a net profit of $258,889 during the year ended March 31,
1997. For the Company's fiscal quarter ended June 30, 1997, the Company
sustained a net loss of $227,580. The Company's ability to sustain profitable
operations will depend on its ability to significantly expand its sales of
products and control its expenses. At June 30, 1997, current liabilities
exceeded current assets by $700,109, including approximately $740,481 of
customer deposits which are reduced as customer orders are filled.
DELAY IN PAYMENT OF TRADE CREDITORS.
In order to manage its working capital resources, the Company has in the
past and is currently paying many of its trade creditors and service providers
at rates slower than provided in their respective invoices or agreements.
Failure to pay these trade creditors in a timely fashion has in the past
adversely affected and in the future could adversely affect, the Company's
relationships with these trade creditors or result in a default under its
agreements with such trade creditors.
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<PAGE> 6
VOTING CONTROL BY HOLDERS OF SERIES B COMMON STOCK; VOTING AGREEMENT
Until December 20, 1998, the holders of Series B Common Stock, voting
separately as a class, will be entitled to elect that number of directors equal
to one more than one-half the total number of directors comprising the full
Board of Directors. All of the outstanding shares of Series B Common Stock are
issued to Park Investment Partners, Inc. ("Park"), the sole stockholders of
which are Harold S. Geneen and Gerald H. Newman. In addition, as of August 26,
1997, Park is the beneficial owner of approximately 33.9% of the issued and
outstanding shares of Common Stock, and the holders of an additional 174,167
shares (approximately 4.2% of the issued and outstanding shares of Common Stock)
are required by agreement with Park to vote for its nominees until June 1, 1998.
Such agreement also requires the holders of such shares to offer them to the
Company and, to the extent not purchased by the Company, to Park before selling
them to a third party. As a result of its ownership of Series B Common Stock and
Common Stock, Park will be able to elect a majority of the directors comprising
of the full Board and exert significant influence over the outcome of all other
matters requiring a stockholder vote, including the election of the entire Board
of Directors, without the concurrence of any of the purchasers of securities in
this transaction. The Series B Common Stock and other arrangements will allow
Park to deter hostile takeovers and prevent changes in the control or management
of the Company that it does not approve.
OTHER COMMITMENTS
Under the terms of an agreement the Company entered into in connection
with its restructuring, its original stockholders, including William H. Gunther
III, an employee and the former President and Chief Executive Officer of the
Company, William H. Gunther, Jr., a former director, and Joseph E. Lamborghini,
an employee of the Company, are entitled to receive from the Company certain
royalty payments. The amount of the payments are to equal (i) one percent of the
Company's sales as shown on the Company's annual audited financial statements
covering the period during which the right to royalty payments arises ("Company
Sales"), and (ii) an additional one-half percent of Company Sales, so long as
the payment of such additional amount does not reduce the Company's after-tax
profits below 9% of Company Sales for the period for which the payment is to be
made, subject, in certain events, to set-off for claims against such
stockholders. The Company's obligation to pay royalties terminates upon the
payment of royalties aggregating $12,000,000. Payments of royalties to the
original stockholders are based on Company revenues and are not related to or
contingent upon the Company attaining profitability or positive cash flow. As a
result, such payments will adversely affect operating results and divert cash
resources from use in the Company's business, possibly at times when the
Company's liquidity and access to funding may be limited.
DEVELOPMENT AGREEMENT
The Company has agreed to pay royalties equal to a percentage of the
Company's systems sales to Connecticut Innovations, Inc., a specially chartered
Connecticut corporation ("CII"), in consideration of a grant from CII to develop
two products, the F-300 Fast Feeder and the ADP Check/Statement. Pursuant to
this development agreement (the "Development Agreement"), the Company is
required to pay CII a royalty equal to .67% (sixty-seven hundredths of a
percent) of all systems sales of the Company up to an aggregate maximum of
$775,000, of which $150,000 has already been credited, and provides for certain
minimum annual royalty payments, payable quarterly, as follows:
<TABLE>
<CAPTION>
Calendar Year Total Minimum Payments for the Year
------------- -----------------------------------
<S> <C>
1998 $100,000
1999 100,000
2000 125,000
2001 125,000
2002 175,000
-------
$625,000
========
</TABLE>
-3-
<PAGE> 7
If, during any quarter, the royalty computation does not exceed the
minimum payment derived from the foregoing table, the minimum payment shall be
made instead of the actual computed royalty amount. CII continues to have a
security interest in all of the Company's patents, trademarks and other assets
as collateral for the payment of the royalty obligations, but has agreed to
subordinate its security interest (except for its security interest in patents
and trademarks) in the event that the Company enters into a financing
arrangement with an institutional lender. Total royalty expense for the year
ended March 31, 1995 was $130,528. The Company recorded a net benefit of $89,816
for the year ended March 31, 1996, due to the forgiveness of prior royalties
owed under a prior agreement. The Company recorded $37,500 as royalty expense
for the year ended March 31, 1997.
DEPENDENCE ON SUPPLIERS, CONTRACT MANUFACTURERS AND SERVICE
The Company does not manufacture all of the hardware components of its
finishing systems and is dependent upon third parties to manufacture some
components on a purchase order basis. The Company does not have written
long-term arrangements with such contract manufacturers. Although the Company
believes that several suppliers are available to manufacture such products, the
termination of the Company's relationship with one or more of such contract
manufacturers may result in a temporary interruption in the manufacture and
assembly of the Company's systems.
The Company also provides maintenance services to its customers, and
during the fiscal year ended March 31, 1997, revenues from the provision of such
services accounted for approximately 40% of the Company's revenues. The Company
has used an independent company, DataCard Corporation ("DataCard"), to provide
its maintenance obligations since 1987, except in cases where the customer
specifies that maintenance must be performed by Company employees or the
customer performs its own maintenance. In September 1992, the Company issued a
note in the principal amount of $426,502 (of which $319,876 was outstanding at
March 31, 1997) to DataCard as payment for services previously performed under
its contract with the Company. Principal is payable in quarterly installments of
$35,541, and will continue until June 1998. As of June 30, 1997, the Company
owed DataCard approximately $319,876 for services rendered. If DataCard were
unable to satisfactorily perform its obligations or if its relationship with the
Company were otherwise terminated, it could adversely affect the Company's
relationship with its customers and the Company's results of operations and
financial condition.
DEVELOPING MARKET FOR THE COMPANY'S PRODUCTS
The market for finishing systems, which first developed in the mid-1980's,
is in the development stage, and market acceptance of and demand for these
systems is subject to a high level of uncertainty. The Company's ultimate
success will depend upon the rate at and the extent to which large corporations,
banking and financial institutions, and governmental entities choose to automate
and personalize their electronic publishing efforts or to replace existing
equipment. While the Company has met with some success in marketing its systems
to the insurance industry, governmental entities, health maintenance
organizations and mutual funds, there can be no assurance that the Company will
be successful in selling its systems to other
-4-
<PAGE> 8
businesses which may not have the same stringent requirements for the high
levels of accuracy, confidentiality or personalization that the Company's
systems are capable of providing.
COMPETITION
The Company's principal competitors are Pitney-Bowes and Bell & Howell,
each of which has substantially greater resources, financial and otherwise, than
the Company. The Company believes that it competes effectively in sales to its
existing customer base because of, among other things, the flexibility of its
systems resulting from the application of its proprietary technology. However,
there can be no assurance that the Company will have the resources to continue
to compete effectively, market its systems to a greater customer base or be able
to respond to technological changes.
DEPENDENCE ON PROPRIETARY TECHNOLOGY
The Company's ability to compete effectively will depend, in part, on its
ability to continue to develop its proprietary technology. The Company relies
principally upon protective codes embedded in its software to protect its
proprietary technology. The Company also relies on non-disclosure agreements
with its employees, customers, consultants and strategic partners. There can be
no assurance that such measures are adequate to protect the Company's
proprietary technology. The Company's business could be adversely affected by
increased competition in the event that any patent granted to it is adjudicated
to be invalid or is inadequate in scope to protect the Company's operations, or
if any of the Company's other arrangements related to technology are breached or
violated. Although the Company believes that its products and technology do not
infringe the proprietary rights of others, there can be no assurance that third
parties will not assert infringement claims in the future or that such claims
will not be successful.
UNCERTAINTY OF ADEQUATE CAPITAL FUNDING
On June 4, 1996, the Company entered into a new line of credit arrangement
with a bank which was used to refinance the Company's pre-existing line of
credit. The new arrangement provides for two revolving loans totaling
$2,250,000. The available borrowing under Facility A is in the amount of
$1,750,000, and is fully cash-collateralized by assets provided by Mr. Harold S.
Geneen, a stockholder and director of the Company. The arrangement was modified
on March 21, 1997 to increase the line of credit available under Facility B to
$500,000. Neither Mr. Geneen nor any other stockholder has made any commitment
or is otherwise required to provide financing to the Company or to guarantee
borrowings from other sources. There can be no assurance that the Company will
be able to obtain financing from other sources if it is required, or that
affiliates of the Company will provide financing or guarantees if financing from
independent sources is not otherwise available.
PLEDGED ASSETS
All of the Company's accounts receivable are pledged as collateral to
secure outstanding bank loans to the Company. In the event of a default by the
Company on its loan obligations, the bank could declare such indebtedness to be
immediately due and payable and could foreclose on the Company's pledged assets,
which could have a material adverse effect on the operations of the Company.
Moreover, to the extent that the Company's assets serve as collateral to secure
outstanding indebtedness, such assets will not be available to secure future
indebtedness, which may adversely affect the Company's future borrowing ability.
In connection with the Development Agreement with CII, and as partial
consideration for loans made in connection therewith, the Company has assigned
all of its existing and future patents, trademarks and other assets to CII as
security for the Company's performance. The Company retains the exclusive right
to make, have made, use and sell the inventions to which the patents apply.
-5-
<PAGE> 9
KEY PERSONNEL
The Company's success is dependent to a great extent upon the performance
of management. The loss of the services of key management personnel could, under
certain circumstances, have a material adverse effect on the Company.
PREFERRED STOCK AUTHORIZED FOR ISSUANCE
The Company has available for issuance 500,000 shares of preferred stock.
The Board of Directors is authorized, without stockholder approval, to issue
such preferred stock in one or more series and to fix the voting powers and the
designations, preferences and relative, participating, optional or other rights
and restrictions thereof. Accordingly, the Company may issue a series of
preferred stock in the future that will have preference over the Common Stock
with respect to the payment of dividends, or upon the Company's liquidation,
dissolution or winding up, have voting or conversion rights that could adversely
affect the voting power and ownership percentage of the holders of Common Stock.
The issuance of shares of preferred stock, or the issuance of rights to purchase
such shares, could have the effect of delaying, deferring or preventing a change
of control of the Company.
DIVIDEND POLICY
The Company has never declared or paid a cash dividend on its Common
Stock, and management expects that the Company's future earnings, if any, will
be retained for expansion or development of the Company's business.
STATE BLUE SKY REGISTRATION REQUIRED TO EXERCISE WARRANTS
Holders of the Warrants have the right to exercise the Warrants only if
the underlying shares of Common Stock are qualified, registered or exempt for
sale under applicable securities laws of the states in which the various holders
of the Warrants reside. The Company cannot issue shares of Common Stock to
holders of the Warrants in states where such shares are not qualified,
registered or exempt. The Company has undertaken, however, to qualify or
register such shares (or to secure an exemption for their issuance) in those
states where the Offering was originally registered under the state securities
laws.
CALLABLE WARRANTS
The Public Warrants are subject to repurchase by the Company in certain
circumstances. The Company's exercise of this right would force a holder of
Public Warrants to exercise the Public Warrants and pay the exercise price at a
time when it may be disadvantageous for the holder to do so, to sell the Public
Warrants at the then-current market price when the holder might otherwise wish
to hold the Public Warrants for possible additional appreciation, or to accept
the repurchase price, which is likely to be substantially less than the market
value of the Public Warrants in the event of a repurchase call. Holders who do
not exercise their Public Warrants prior to a repurchase will forfeit their
right to purchase the shares of Common Stock underlying the Public Warrants.
-6-
<PAGE> 10
MAINTENANCE CRITERIA FOR NASDAQ SECURITIES; DISCLOSURE RELATING TO LOW-PRICE
STOCKS.
The National Association of Securities Dealers, Inc. ("NASD"), which
administers NASDAQ, requires that, in order to continue to be included on the
NASDAQ SmallCap Market, a company must maintain $2 million in total assets, a
$200,000 market value of the public float and $1 million in total capital and
surplus. In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share; provided, however, that if a company falls
below such minimum bid price, it will remain eligible for continued inclusion in
NASDAQ if the market value of the public float is at least $1 million and the
company has $2 million in capital and surplus. The failure to meet these
maintenance criteria in the future may result in the discontinuance of the
inclusion of the Company's Common Stock on the NASDAQ SmallCap Market. In such
event, trading, if any, in the Common Stock may then continue to be conducted in
the non-NASDAQ over-the-counter market in what are commonly referred to as the
"pink sheets." As a result of trading in the non-NASDAQ over-the-counter market,
an investor may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Common Stock. In addition, sale of the
Company's securities would be subject to a rule promulgated by the Commission
that would impose various sales practice requirements on broker-dealers who sell
securities governed by the rule to persons other than established customers and
accredited investors, if the Company fails to meet certain criteria set forth in
such rule. For these types of transactions, the broker-dealer must make a
special suitability determination for the purchase and have received the
purchaser's written consent to the transactions prior to sale. Consequently, the
rule may have an adverse effect on the ability of broker-dealers to sell the
Common Stock, which may affect the ability of purchasers in this Offering to
sell the Common Stock in the secondary market.
The Commission has adopted regulations which define a "penny stock" to be
any equity security that has a market price (as defined) of less than $5.00 per
share, subject to certain exceptions including for securities authorized for
quotation on the NASDAQ SmallCap Market. For any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to any transaction
in a penny stock, of a disclosure schedule prepared by the Commission relating
to the penny stock market. Disclosure also has to be made about commissions
payable to both the broker-dealer and the registered representative, and about
current quotations for the securities. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
The Company's shares of Common Stock offered hereby are not currently
deemed to be "penny stock," on the basis that the Company's securities are
listed on the NASDAQ SmallCap Market. However, no assurance can be given that
the Company's Common Stock will continue to be listed on the NASDAQ SmallCap
Market. If the Company's Common Stock should in the future be delisted from
NASDAQ and if it should fall within the Commission's definition of a "penny
stock," the trading market for the Common Stock could be materially adversely
affected.
EXERCISE OF UNDERWRITERS' WARRANTS
In connection with the Initial Public Offering, the Company sold the
Underwriters' Warrants to the Underwriters for nominal consideration. The
Underwriters' Warrants are presently exercisable, and shall be until December
20, 1998, at a purchase price of $6.32 per Unit (126% of the original public
offering price of the Units), subject to adjustment. The Underwriters' Warrants
may have certain dilutive effects because the holders thereof will be given the
opportunity to profit from a rise in the market price of the underlying shares
with a resulting dilution in the interest of the Company's other stockholders.
The terms on which the Company could obtain additional capital during the life
of the Underwriters' Warrants may be adversely affected because the holders of
the Underwriters' Warrants might be expected to exercise them at a time when the
Company would otherwise be able to obtain comparable additional capital in a new
offering of securities at a price per share greater than the exercise price of
the Underwriters' Warrants.
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<PAGE> 11
POSSIBLE VOLATILITY OF SECURITIES PRICES
There can be no assurance that a regular trading market will develop (or
be sustained, if developed) for any or all of the securities at any point in the
future, or that purchasers will be able to resell their securities or otherwise
liquidate their investment without considerable delay, if at all. There can be
no assurance that the market price of the Company's securities will not be
volatile as a result of a number of factors, including the Company's financial
results or various matters affecting the stock market generally.
USE OF PROCEEDS
The proceeds to the Company from the Offering, assuming exercise of
all of the Underwriters' Warrants, Public Warrants and Common Stock Purchase
Warrants, is estimated to be approximately $8,361,472. The Company intends to
use the proceeds of this offering for general corporate purposes. The
Company may be required to seek additional financing at some point in the
future. There can be no assurance that such additional financing will be
available, or if available, that it can be obtained on terms which management
deems reasonable.
DIVIDEND POLICY
The Company has never declared or paid a cash dividend on its Common
Stock, and management expects that the Company's future earnings, if any, will
be retained for expansion or development of the Company's business.
DESCRIPTION OF SECURITIES
GENERAL
The Company is authorized to issue 16,000,000 shares of Common Stock,
$.001 par value per share; 500 shares of Series B Common Stock, $.001 par value
per share ("Series B Common Stock"); 500 shares of Class B Senior Preferred
Stock, $.001 par value per share (the "Class B Preferred Stock") and 500,000
shares of Preferred Stock, $.001 par value per share. As of the date hereof,
there are issued and outstanding 4,283,269 shares of Common Stock and 500 shares
of the Series B Common Stock. All of the shares of the Series B Common Stock are
owned by Park.
The following summary is qualified in its entirety by reference to the
Company's Restated Certificate of Incorporation (the "Certificate of
Incorporation") and the Company's By-Laws (the "By-Laws"), copies of each having
previously been filed with the Commission.
COMMON STOCK
Each holder of Common Stock is entitled to cast one vote, either in person
or by proxy, for each share owned of record on all matters submitted to a vote
of stockholders, including the election of directors. Until December 20, 1998,
the holders of Common Stock, voting separately as a class, will be entitled to
elect that number of directors equal to one less than one half of the total
number of directors comprising the Board of Directors (subject to the rights, if
any, of holders of shares of Preferred Stock that the Company may issue, from
time to time, to elect separately a class of directors, which will reduce the
number of directors to be elected by holders of Common Stock). The holders of
shares do not possess cumulative voting rights, which means that the holders of
more than 50% of the outstanding shares voting for the election of the class of
-8-
<PAGE> 12
directors to be elected by the Common Stock can elect all of such directors,
and, in such event, the holders of the remaining shares will be unable to elect
any of the Company's directors.
Holders of outstanding shares of Common Stock are entitled to share
ratably in such dividends as may be declared by the Board of Directors out of
funds legally available therefor. Upon the liquidation, dissolution or winding
up of the Company, each outstanding share of Common Stock will be entitled to
share equally in the assets of the Company legally available for distribution to
stockholders after the payment of all debts and other liabilities, subject to
any superior rights of the holders of any outstanding shares of Preferred Stock.
See "Dividend Policy."
Holders of the shares of Common Stock have no preemptive rights. There are
no conversion or subscription rights, and shares are not subject to redemption.
All of the outstanding shares of Common Stock are, and the shares included in
the Units and underlying the Warrants included in the Units will be, when issued
and paid for in accordance with the terms thereof, duly issued, fully paid and
nonassessable.
SERIES B COMMON STOCK
Until December 20, 1998, the holders of Series B Common Stock, voting
separately as a class, are entitled to elect that number of directors equal to
one more than one-half the total number of directors comprising the Board. All
of the shares of Series B Common Stock are owned by Park, the sole stockholders
of which are Harold S. Geneen and Gerald H. Newman. The shares of Series B
Common Stock vote together with the Common Stock on all other matters and are
entitled to one vote per share, except to any matters proposed for stockholder
approval to amend, modify or terminate the voting rights of Series B Common
Stock or to create any other class or series of Capital Stock with preferential,
senior or superior voting rights, all of which will require approval of a
majority of the outstanding Series B Common Stock voting separately as a class.
Holders of Series B Common Stock will not be entitled to receive any
dividends. Upon the liquidation, dissolution or winding up of the Company, each
outstanding share of Series B Common Stock will be entitled to receive the
amount of $.001 per share from the assets legally available for distribution to
stockholders after the payment of all debts and other liabilities, subject to
any superior rights of any outstanding shares of Preferred Stock, on an equal
basis with the shares of Common Stock. Holders of Series B Common Stock will not
have any preemptive rights. Each outstanding share of Series B Common Stock will
be converted into one share of Common Stock on January 1, 1999, or prior to
January 1, 1999, (i) at the option of the holder, (ii) in the event of the
transfer of the shares other than to Mr. Geneen or Mr. Newman or (iii) in the
event more than 50% of the outstanding voting securities of Park no longer is
owned by Mr. Geneen and Newman, or either of them, or a partnership, trust or
corporation of which they are the sole partners, beneficiaries or stockholders.
PREFERRED STOCK
The Preferred Stock may be issued, from time to time, in one or more
series, and the Board of Directors, without further approval of the
stockholders, is authorized to amend the Certificate of Incorporation to fix the
dividend rights and terms, conversion rights, voting rights, redemption rights
and terms, liquidation preferences, sinking funds and any other rights,
preferences, privileges and restrictions applicable to each such series of
Preferred Stock. The Board of Directors, without obtaining stockholder approval,
may issue shares of the Preferred Stock with voting or conversion rights that
could adversely affect the voting power of the holders of Common Stock. The
issuance of shares of Preferred Stock could be utilized, under certain
circumstances, in an attempt to prevent an acquisition of the Company. The
Company has no present intention to issue any shares of Preferred Stock.
-9-
<PAGE> 13
WARRANTS
The Public Warrants were issued in registered form pursuant to an
agreement, dated December 20, 1993, (the "Warrant Agreement"), between the
Company and American Stock Transfer & Trust Company, as Warrant Agent (the
"Warrant Agent"). The Warrant Agreement was amended as of October 31, 1997 to
extend the expiration date of the Public Warrants from December 20, 1997 to
December 20, 1998. The following discussion of certain terms and provisions of
the Warrants is qualified in its entirety by reference to the Warrant Agreement.
A form of the certificate representing the Warrants and a form of the Warrant
Agreement have been filed as exhibits to the Registration Statement of which
this Prospectus forms a part.
Each of the Warrants entitles the registered holder to purchase one share
of Common Stock. The Warrants are exercisable at a price of $6.00 (120% of the
public offering price per share of Common Stock included in the Units, with no
value being attributable to the Warrants) subject to certain adjustments. The
Warrants are entitled to the benefit of adjustments in their exercise prices and
in the number of shares of Common Stock or other securities deliverable upon the
exercise thereof in the event of a stock dividend, stock split,
reclassification, reorganization, consolidation, or merger.
The Warrants are presently exercisable and shall remain exercisable until
December 20, 1998. After the expiration date, Warrant holders shall have no
further rights. Warrants may be exercised by surrendering the certificate
evidencing such Warrant, with the form of election to purchase on the reverse
side of such certificate properly completed and executed, together with payment
of the exercise price and any transfer tax, to the Warrant Agent. If less than
all of the Warrants evidenced by a warrant certificate are exercised, a new
certificate will be issued for the remaining number of Warrants. Payment of the
exercise price may be made by cash, bank draft, or official bank or certified
check equal to the exercise price.
Warrant holders do not have any voting or any other rights as stockholders
of the Company. The Company has the right to call the Public Warrants for
repurchase, at a price of $.05 per Public Warrant, by written notice to the
registered holders thereof, mailed 30 days prior to the repurchase date.
However, the Company will not exercise this right unless the closing bid price
for the Common Stock for 20 trading days during a 30 consecutive trading day
period ending not more than 10 days prior to the date that the notice of
repurchase is given, equals or exceeds $8.25. Any such repurchase shall be for
all outstanding Public Warrants. If the Company exercises its right to call
Public Warrants for repurchase, such Public Warrants may still be exercised
until the close of business on the day immediately preceding the date fixed for
repurchase. If any Public Warrant called for repurchase is not exercised by such
time, it will cease to be exercisable and the holder thereof will be entitled
only to the repurchase price. Notice of repurchase will be mailed to all holders
of Public Warrants of record at least thirty (30) days, but not more than sixty
(60) days, before the repurchase date.
In order for the holder to exercise a Warrant, there must be an effective
registration statement, with a current prospectus, on file with the Commission
covering the shares of Common Stock underlying the Warrant, and the issuance of
such shares to the holder must be registered, qualified, or exempt under the
laws of the state in which the holder resides. If required, the Company will
file a new registration statement with the Commission with respect to the
securities underlying the Warrants prior to the exercise of such Warrants and
will deliver a prospectus with respect to such securities to all holders thereof
as required by Section 10(a)(3) of the Act. See "Risk Factors-Necessity to
Maintain Current Prospectus" and "State Blue Sky Registration Required to
Exercise the Warrants."
TRANSFER AGENT AND WARRANT AGENT
The transfer agent for the Common Stock and the Warrant Agent for the
Warrants is American Stock Transfer & Trust Company, 40 Wall Street, New York,
New York 10005.
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<PAGE> 14
PLAN OF DISTRIBUTION
The 1,387,252 shares of Common Stock being offered hereby will be issued
by or on behalf of the Company directly to, or pursuant to appropriate
instructions from, the registered holders of the Warrants and the Underwriters'
Warrants upon the exercise of their corresponding rights.
Each Warrant entitles the registered holder to purchase from the Company
one share of Common Stock at an exercise price of $6.00. The Public Warrants are
exercisable through December 20, 1998. The Underwriters' Warrants entitle them
to purchase from the Company 118,626 Units at an exercise price of $6.32 per
unit (126% of the public offering price), subject to adjustment. The
Underwriters' Warrants are exercisable through December 20, 1998.
The transfer agent for the Common Stock and the Warrant Agent for the
Warrants is American Stock Transfer & Trust Company, 40 Wall Street, New York,
New York 10005. The Warrants may be exercised by surrendering the certificate
evidencing such Warrant, with the form of election to purchase on the reverse
side of such certificate properly completed and executed, together with payment
of the exercise price and any transfer tax, to the Warrant Agent. If less than
all of the Warrants evidenced by a warrant certificate are exercised, a new
certificate will be issued for the remaining number of Warrants. Payment of the
exercise price may be made by cash, bank draft, or official bank or certified
check equal to the exercise price.
The Underwriters' Warrants may be exercised in whole or in part upon
surrender, in person or by mail, to the Company at its principal executive
offices (currently located at One Winnenden Road, Norwich, Connecticut 06360) of
(i) a completed Exercise Agreement, the form of which is attached as Exhibit I
to the Form of Underwriters' Warrant, filed hereto, (ii) the certificate or
certificates evidencing the Underwriters' Warrants to be exercised with the form
of election to purchase on the reverse thereof duly filled in and signed, and
upon payment of the exercise price for the Units to be issued upon the exercise
of the Underwriters' Warrant(s) evidenced by such certificate(s) and (iii) a
certified check or other certified funds payable to the Company in an amount
equal to the product of $6.32 multiplied by the number of Units being purchased
upon such exercise.
On December 20, 1993, the Company and the Underwriters entered into an
underwriting agreement (the "Underwriting Agreement"), certain provisions of
which are still in effect as of the date hereof, which provides that the Company
will indemnify and hold harmless each Underwriter and each person who controls
any Underwriter within the meaning of the Securities Act, from and against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Securities Act, the Exchange Act, or
other federal or state statutory law or regulation, insofar as such losses arise
out of or are based upon (i) any untrue statement or alleged untrue statement
made by the Company in the Underwriting Agreement, (ii) any untrue statement or
alleged untrue statement of a material fact contained in this registration
statement and prospectus, or (iii) the omission or alleged omission to state in
this registration statement and prospectus a material fact required to be stated
herein or necessary to make the statements made herein not misleading. The
Company agrees to reimburse such indemnified parties for legal or other expenses
reasonably incurred in connection with investigating or defending against any
loss, claim, damage, liability or action. Pursuant to the Underwriting
Agreement, the Company is not liable to the extent that any loss is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made herein was based on information provided to the Company by the indemnified
parties, nor is the Company liable for losses if a copy of this prospectus was
not delivered to the person bringing action against the indemnified party prior
to the written confirmation of the sale of the security to such person.
-11-
<PAGE> 15
UNLESS EXTENDED BY THE COMPANY AT ITS DISCRETION, THE WARRANTS WILL EXPIRE
ON DECEMBER 20, 1998. IN THE EVENT A HOLDER OF WARRANTS FAILS TO EXERCISE THE
WARRANTS PRIOR TO THEIR EXPIRATION, THE WARRANTS WILL EXPIRE AND THE HOLDER
THEREOF WILL HAVE NO FURTHER RIGHTS WITH RESPECT TO THE WARRANTS.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Company's Annual Report on Form 10-KSB for the year ended March 31, 1997
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
-12-
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the offering, other than
underwriting discounts and commissions, all of which will be borne by the
Company are as follows:
<TABLE>
<CAPTION>
Expenses
--------
<S> <C>
SEC Registration Fee ................... $ 5,018.90(1)
NASD Filing Fee ........................ 3,420.04(1)
Transfer Agent and Registrant Fees ..... 2,500.00(1)
Printing and Engraving ................. 15,000.00(2)
Legal Fees and Expenses ................ 15,000.00(2)
Accounting Fees ........................ 8,000.00(2)
Blue Sky Qualification Fees and Expenses 40,000.00(1)
Miscellaneous .......................... 2,500.00(2)
Total ............................ $ 91,438.94
=============
</TABLE>
(1) Previously paid
(2) Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Restated Certificate of Incorporation of the Company provides that the
Company shall indemnify to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware (the "Delaware Law") any person
whom it may indemnify thereunder. Additionally, The Certificate of Incorporation
of the Company provides for the limitation to the extent permitted by the
Delaware Law of personal liability of directors to the Company and its
stockholders for monetary damages for breach of fiduciary duty as directors of
the Company.
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.
II - 1
<PAGE> 17
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed or incorporated by reference into this
registration statement:
1 Form of Underwriting Agreement.*
4(a) Form of Warrant Agreement.*
4(b) First Amendment Agreement
4(c) Form of Underwriters' Warrants.*
4(d) Form of Common Stock Certificate.*
4(e) Form of Warrant.*
4(f) Restated Certificate of Incorporation of the Company previously
filed as Exhibit 3(i)(a).*
4(g) Certificate of Amendment of Restated Certificate of Incorporation of
the Company previously filed as Exhibit 3(i)(b).*
4(h) Form of Certificate of Amendment of Restated Certificate of
Incorporation previously filed as Exhibit 3(i)(c).*
4(i) By-Laws of the Company, as amended, previously filed as Exhibit
3(ii).*
5 Opinion of Reid & Priest.*
23(a) Consent of Arthur Andersen LLP
23(b) Consent of Reid & Priest included as Exhibit "5".*
24 Power of Attorney.
* Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) 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 the 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 the
Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that clause (i) and (ii) do not apply if the Registration
Statement is on Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by clause (i) and (ii) is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15 of
the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
II - 2
<PAGE> 18
(2) 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 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.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes 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
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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 Act
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 its 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 Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registration pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
II - 3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Town of Norwich, State of Connecticut on this 13th day
of November, 1997.
GUNTHER INTERNATIONAL, INC.
(Registrant)
By: /s/ Frederick W. Kolling III
____________________________
Frederick W. Kolling III
Vice President, Chief Financial Officer,
Treasurer and Secretary
(On behalf of the Registrant and as
Principal Financial and Accounting Officer)
Pursuant to the Requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 13th day of November, 1997.
SIGNATURE TITLE
__________________________________ Vice President, Chief Financial Officer
Frederick W. Kolling III (Principal Financial and Accounting Officer),
Treasurer, Secretary and Director
/s/ Guy W. Fiske* Director
__________________________________
Guy W. Fiske*
/s/ Harold S. Geneen* Director
__________________________________
Harold S. Geneen
/s/ J. Kenneth Hickman* Director
__________________________________
J. Kenneth Hickman
/s/ Alan W. Morton* Vice President, Chief Operating Officer
__________________________________ and Director
Alan W. Morton
/s/ Gerald H. Newman* Director
__________________________________
Gerald H. Newman
/s/ James H. Whitney* Chief Executive Officer (Principal
__________________________________ Executive Officer), President
James H. Whitney and Director
*By
/s/ Frederick W. Kolling III
__________________________________
Frederick W. Kolling III
Attorney-in-Fact
II - 4
<PAGE> 1
Exhibit 4(b)
FIRST AMENDMENT AGREEMENT
This FIRST AMENDMENT AGREEMENT ("First Amendment"), dated as of October
31, 1997, between GUNTHER INTERNATIONAL, LTD., a Delaware corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, as warrant and transfer
agent (the "Warrant Agent"), to the Warrant Agreement, dated as of December 20,
1993, between the Company and the Warrant Agent (the "Warrant Agreement").
WITNESSETH:
WHEREAS, the Company and the Warrant Agent entered into the Warrant
Agreement, pursuant to which, among other things, the Warrant Agent agreed to
act on behalf of the Company in connection with the issuance, registration,
transfer, exchange and exercise of certain Warrants that are scheduled to expire
at the close of business December 20, 1997; and
WHEREAS, the Company and the Warrant Agent desire to amend the Warrant
Agreement so as to extend the expiration date of the Warrants to the close of
business on December 20, 1998.
NOW THEREFORE, in consideration of the premises and the mutual agreement
herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Warrant Agreement Definitions. All capitalized terms used in this
First Amendment but not defined herein shall have the meanings given to them in
the Warrant Agreement. In the event of a conflict between the definitions
contained in this First Amendment and those contained in the Warrant Agreement,
the definitions contained herein shall prevail.
ARTICLE II
AMENDMENTS TO WARRANT AGREEMENT
2.1 Amendment to Section 6. Effective as of the date hereof, Section 6 of
the Warrant Agreement shall be, and it hereby is, amended and restated in its
entirety as follows:
Section 6. Exercise of Warrants. Subject to the provisions of this
Agreement, each registered holder of Warrants shall have the right which
may be exercised during a four-year period commencing December 20, 1994
and ending at the close of business on December 20, 1998 to purchase from
<PAGE> 2
the Company (and the Company shall issue and sell to such registered
holder of Warrants) the number of fully paid and non-assessable Common
Shares specified in such Warrants, upon surrender to the Company at the
office of the Warrant Agent of such Warrants, with the form of election to
purchase duly filled in and signed, and upon payment to the order of the
Company of the Warrant exercise price, determined in accordance with
Sections 11 and 12 herein, for the number of shares in respect of which
such Warrants are then exercised. Payment of such Warrant Price shall be
made in cash or by certified check or bank draft or postal or express
money order payable, in United States dollars, to the order of the
Company. No adjustment shall be made for any dividends on any Common
Shares issuable upon exercise of a Warrant. The Warrants shall expire at
the close of business December 20, 1998.
Subject to Sections 7 and 8, upon such surrender of Warrants, and payment
of the Warrant Price as aforesaid, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
registered holder of such Warrants and in such name or names as such
registered holder may designate, a certificate or certificates for the
largest number of whole Common Shares so purchased upon the exercise of
such Warrants. The Company shall not be required to issue any fraction of
a share of Common Stock. Such certificate or certificates shall be deemed
to have been issued and any person so designated to be named therein shall
be deemed to have become a holder of record of such shares as of the date
of the surrender of such Warrants and payment of the Warrant Price as
aforesaid provided, however, that if, at the date of surrender of such
warrants and payment of such warrant price, the transfer books for the
Common Shares or other class of stock purchasable upon the exercise of
such Warrants shall be closed, the certificates for the shares in respect
of which such Warrants are then exercised shall be issuable as of the date
on which such books shall be opened and until such date the Company shall
be under no duty to deliver any certificate for such shares; provided,
further, however, that the transfer books aforesaid, unless otherwise
required by law or by applicable rule of any national securities exchange,
shall not be closed at any one time for a period longer than 20 days. The
rights of purchase represented by the Warrants shall be exercisable, at
the election of the registered holders thereof, either as an entirety or
from time to time for part only of the shares specified therein and, in
the event that any Warrant is exercised in respect of less than all of the
shares specified therein at any time prior to the date of expiration of
the Warrant, a new Warrant or Warrants will be issued to such registered
holder for the remaining number of shares specified in the Warrant so
surrendered, and the Warrant Agent is hereby
2
<PAGE> 3
irrevocably authorized to countersign and to deliver the required new
Warrants pursuant to the provisions of this Section during the warrant
exercise period, and the Company, whenever requested by the Warrant Agent,
will supply the Warrant Agent with Warrants duly executed on behalf of the
Company for such purpose.
ARTICLE III
MISCELLANEOUS
3.1 Ratification. The terms and provisions set forth in this First
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Warrant Agreement, except as expressly modified and superseded by
this First Amendment, the terms and provisions set forth in the Warrant
Agreement are hereby ratified and confirmed and shall continue in full force and
effect.
3.2 Notices. All notices, demands and other communications provided for or
permitted hereunder shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed as follows:
(a) if to the Company:
Gunther International, Ltd.
5 Wisconsin Avenue
Norwich Industrial Park
Norwich, Connecticut 06360
Attn: James W. Whitney, President
with a copy to:
Murtha, Cullina, Richter and Pinney
CityPlace I
185 Asylum Street, 29th Floor
Hartford, Connecticut 06103-3469
Attn: Richard S. Smith, Jr.
(b) if to the Warrant Agent
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
3.2 Successors and Assigns. This First Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties hereto. Neither the Company nor the Warrant Agent may assign any of its
rights under this First Amendment without prior written consent of the other.
3
<PAGE> 4
3.3 Counterparts. This First Amendment may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
3.4 Headings. The headings in this First Agreement are for convenience or
reference only and shall not limit or otherwise affect the meaning thereof.
3.5 Governing Law. THE WARRANT AGREEMENT AND THIS FIRST AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.
3.6 Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be executed and delivered by their respective officers hereunto duly authorized
as of the date first above written.
GUNTHER INTERNATIONAL, LTD.
By: /s/ James W. Whitney
--------------------------
James W. Whitney, President
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ Carolyn B. O'Neil
----------------------------
Name: Carolyn B. O'Neil
Title: Vice President
4
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Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated June 18, 1997 on
the financial statements of Gunther International, Ltd. included in the
Company's Annual Report on Form 10-KSB for the year ended March 31, 1997 and to
all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
November 6, 1997
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EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned does hereby
appoint and constitute James H. Whitney and Frederick W. Kolling III and each of
them as his agent and attorney-in-fact to execute in his name, place and stead
(whether on behalf of the undersigned individually or as an officer or director
of Gunther International, Ltd. or otherwise) Post-Effective Amendment No. 1 on
Form S-3 to the Corporation's Registration Statement on Form SB-2 (Registration
No. 33-70052-B) relating to public offering and sale of up to 1,387,252 shares
of the Common Stock, par value $.001 per share, of the Corporation pursuant to
the exercise of the Corporation's outstanding Public Warrants, Underwriters'
Warrants and Underwriters' Common Stock Purchase Warrants (as defined in such
Post-Effective Amendment No. 1) and any and all further amendments thereto and
to file such Post-Effective Amendment No. 1 on Form S-3 and any such further
amendments thereto with the Securities and Exchange Commission. Each of the said
attorneys shall have the power to act hereunder with or without the others.
IN WITNESS WHEREOF, the undersigned have executed this instrument this 9th
day of October, 1997.
/s/ Guy W. Fiske /s/ Harold S. Green
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Guy W. Fiske Harold S. Green
/s/ Kenneth Hickman /s/ Frederick W. Kolling III
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J. Kenneth Hickman Frederick W. Kolling III
/s/ Alan W. Morton /s/ Gerald H. Newman
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Alan W. Morton Gerald H. Newman
/s/ James H. Whitney
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James H. Whitney
