AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 1996
REGISTRATION NO. 33-.......
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CONSOLIDATED GRAPHICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
TEXAS 2752 76-0190827
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
2210 W. DALLAS STREET
HOUSTON, TEXAS 77019
(713) 529-4200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOE R. DAVIS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CONSOLIDATED GRAPHICS, INC.
2210 W. DALLAS STREET
HOUSTON, TEXAS 77019
(713) 529-4200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPY TO:
CHARLES SZALKOWSKI
BAKER & BOTTS, L.L.P.
ONE SHELL PLAZA
910 LOUISIANA
HOUSTON, TEXAS 77002
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are to be 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 (the "Securities Act"), 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 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. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share....................... 424,658 $24.50 $10,404,121 $3,587.65
===========================================================================================================================
</TABLE>
(1) Calculated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and based upon the average of the high and low sales
prices of the Common Stock as reported by the Nasdaq National Market on June
12, 1996.
----------------------------
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>
PROSPECTUS
424,658 SHARES
CONSOLIDATED GRAPHICS, INC.
COMMON STOCK
------------------------
This Prospectus has been prepared for use in connection with the proposed
sale by the holders thereof (the "Selling Shareholders") of an aggregate of
424,658 shares (the "Shares") of common stock, par value of $.01 per share
(the "Common Stock"), of Consolidated Graphics, Inc., a Texas corporation (the
"Company"). The Shares may be sold from time to time by or for the account of
the Selling Shareholders in the over-the-counter market, on the Nasdaq National
Market or otherwise at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices or at fixed
prices, directly or through agents designated from time to time, or through
dealers or underwriters to be designated or in negotiated transactions. The
Shares may be sold by any one or more of the following methods: (a) a block
trade (which may involve crosses) in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) exchange distributions and/or secondary
distributions in accordance with the rules of the Nasdaq National Market; (d)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; (e) through the writing of options on Shares (whether such options
are listed on an options exchange or otherwise); or (f) privately negotiated
transactions. To the extent required by applicable law, the specific Shares to
be sold and the names of the Selling Shareholders will be set forth in an
accompanying Prospectus Supplement. See "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the symbol
"COGI." On June 12, 1996, the last reported sale price for the Common Stock on
the Nasdaq National Market was $24.00 per share.
The Company will receive no portion of the proceeds of the sale of the
Shares offered hereby and will bear certain of the expenses incident to their
registration. See "Plan of Distribution" and "Selling Shareholders."
The Shares have not been registered for sale under the securities laws of
any state or jurisdiction as of the date of this Prospectus. Brokers or dealers
effecting transactions in the Shares should confirm the registration thereof
under the securities laws of the states in which such transactions occur, or the
existence of any exemption from registration.
------------------------
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH UNDER
THE CAPTION "RISK FACTORS," BEGINNING 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.
------------------------
THE DATE OF THIS PROSPECTUS IS JUNE , 1996.
<PAGE>
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, proxy statements and other information with the
Securities Exchange Commission (the "Commission"), which can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549 and at
the regional offices of the Commission at Citicorp Center, 13th Floor, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661 and at Seven World Trade
Center, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 at prescribed rates. Such reports, proxy
statements and other information concerning the Company also may be inspected at
the offices of the Nasdaq National Market, 1735 K Street, N.W., Washington, D.C.
20006.
The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act with respect to the shares
of Common Stock offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. For further information with respect to
the Company and such Common Stock, reference is made to such Registration
Statement and to the exhibits and schedules thereto. Statements contained in
this Prospectus as to the contents of any contract or any other document
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. A copy of the Registration Statement may be obtained at the
public reference facilities maintained by the Commission as provided in the
preceding paragraph.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act (File No. 0-24068), are incorporated in
this Prospectus by reference and shall be deemed to be a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1995;
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended June 30, 1995, September 30, 1995 and December 31, 1995; and
(c) The Company's Form 8-K dated January 9, 1996, the Company's Form
8-K dated February 15, 1996, as amended by the Company's Form 8-K/A dated
February 15, 1996, and the Company's Form 8-K dated May 23, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made hereby shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of the
filing of such documents. Any statement contained in this Prospectus, in a
supplement to this Prospectus or 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
or in any subsequently filed supplement to this Prospectus or in any document
that also is or is deemed to be 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 hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated in
this Prospectus by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference in such documents). Written
or telephone requests for such copies should be directed to the Company at its
principal executive offices located at 2210 W. Dallas Street, Houston, Texas
77019, Attention: Secretary (telephone number: (713) 529-4200).
2
RISK FACTORS
IN ADDITION TO OTHER INFORMATION IN THIS PROSPECTUS, PROSPECTIVE INVESTORS
SHOULD CONSIDER CAREFULLY THE FOLLOWING INFORMATION BEFORE INVESTING IN THE
COMMON STOCK OFFERED HEREBY.
NATURE OF PRINTING BUSINESS
The Company's quarterly operating results have fluctuated as a result of a
number of factors, including overall trends in the economy, acquisitions of new
businesses and customer buying patterns. The Company competes in the general
commercial and financial printing sectors, which are characterized by individual
orders from customers for specific printing projects rather than long-term
contracts, with continued engagement for successive jobs dependent upon the
customers' satisfaction with the services provided. As such, the Company is
unable to predict, for more than a few months in advance, the number, size and
profitability of printing jobs in a given period. Consequently, the timing of
projects in any quarter could have a significant impact on financial results in
that quarter. Quarterly results in the future may be influenced by these or
other factors and, accordingly, there may be significant variations in the
Company's quarterly operating results.
IMPLEMENTATION OF ACQUISITION STRATEGY
A significant element of the Company's growth strategy is to expand by
acquiring printing companies located in major metropolitan areas. There can be
no assurance that the Company will be able to identify and acquire such
companies, nor that it will be able to finance significant acquisitions in the
future. Further, any acquisition may initially have an adverse effect upon the
Company's operating results while the acquired businesses are adopting the
Company's management practices. In addition, there can be no assurance that the
Company will be able to establish, maintain or increase profitability of an
entity once it has been acquired.
COMPETITION
The printing industry is extremely competitive and fragmented. The Company
competes with numerous large and small printing companies, some of which have
greater financial resources than the Company. The Company competes on the basis
of ongoing customer service, quality of finished products and price.
DEPENDENCE UPON KEY PERSONNEL
The Company believes that its continued success will depend to a
significant extent upon its senior management, particularly Joe R. Davis, the
Company's founder, President and Chief Executive Officer. The loss of the
services of Mr. Davis or other key personnel could have a material adverse
effect on the Company's business and prospects. The Company's continued success
also depends upon its ability to attract and retain qualified employees. The
Company maintains insurance policies of $8.0 million on Mr. Davis.
CONTROL
Based upon the latest information available to the Company, Joe R. Davis
and J.P. Morgan & Co. Incorporated ("Morgan") beneficially own approximately
22.74% and 10.49%, respectively, of the outstanding Common Stock. As a result,
Mr. Davis and Morgan, acting in concert, could have the ability to substantially
influence the election of the Company's Board of Directors and other matters
requiring shareholder approval.
GEOGRAPHIC CONCENTRATION AND ECONOMIC CONDITIONS
A substantial portion of the Company's operations and the majority of its
customers are located in Texas and Colorado. The Company and its profitability
may be susceptible to the effects of unfavorable or adverse local economic
factors and conditions affecting these geographic regions.
3
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
The Company is subject to the environmental laws and regulations of the
United States and the states of Arizona, California, Colorado, Oklahoma, Texas,
and Washington concerning emissions into the air, discharges into waterways and
the generation, handling and disposal of waste materials. While the Company
believes it is currently in substantial compliance with these laws and
regulations, there can be no assurance that future changes in such laws and
regulations will not have a material effect on the Company's operations.
DIVIDEND POLICY
The Company currently intends to retain all future earnings to finance the
continuing development of its business and does not anticipate paying cash
dividends on the Common Stock in the foreseeable future.
ISSUANCE OF ADDITIONAL SHARES
As of May 31, 1996, the Company had 337,050 shares of Common Stock reserved
for issuance upon the exercise of certain outstanding stock purchase options.
There are 30,450 additional shares reserved for issuance under an existing stock
incentive plan for which options or stock awards have not been granted or
issued, and, subject to shareholder approval, the Board of Directors has
authorized the reservation of 600,000 additional shares of Common Stock for
issuance under the plan. Pursuant to its acquisition of Emerald City Graphics
Inc. ("Emerald City") on February 15, 1996 (the "Emerald City Acquisition"),
the Company is contingently obligated at certain times and under certain
circumstances, depending on the performance and operating results of Emerald
City for three consecutive one-year periods beginning January 1, 1996, to issue,
for all periods in the aggregate, up to a total of 75,000 shares of Common Stock
to the Selling Shareholders, in equal amounts unless they agree otherwise, and
pursuant to its acquisition of Precision Litho, Inc. ("Precision") on February
23, 1996, the Company is contingently obligated, at certain times and under
certain circumstances, depending on the performance and operating results of
Precision for three consecutive one-year periods beginning April 1, 1996, to
issue, for all periods in the aggregate, up to a total of 20,000 shares of
Common Stock to Dennis L. Rampe.
Sales of approximately 1,600,000 shares of Common Stock held by affiliates
of the Company may be subject to the volume limitations of Rule 144 ("Rule
144") under the Securities Act of 1933, as amended (the "Securities Act").
Rule 144 permits an affiliate to sell, within any three-month period, a number
of shares not exceeding the greater of 1% of the then outstanding shares of the
Company's Common Stock or the average weekly trading volume during the four
weeks preceding the date of filing of notice of the proposed sale with the
Securities and Exchange Commission pursuant to Rule 144.
The Board of Directors, without further action by the shareholders, is
authorized to issue up to five million shares of the Company's Preferred Stock,
par value $1.00 per share (the "Preferred Stock"), in one or more series and
to fix and determine as to any series all the relative rights and preferences of
shares in such series, including, without limitation, preferences, limitations
or relative rights with respect to redemption rights, conversion rights, if any,
voting rights, if any, dividend rights and preferences on liquidation. The
dividend, liquidation and voting rights of any such Preferred Stock issued could
be superior to the rights of the holders of Common Stock.
The issuance of additional shares of Preferred Stock, or the issuance of
rights to purchase such shares, could be used to discourage an unsolicited
acquisition proposal that some, or a majority, of the shareholders might believe
to be in the best interests of the Company or in which shareholders might
receive a premium for their stock over the then market price of such stock. In
addition, under certain circumstances, the issuance of Preferred Stock could
adversely affect the voting power of the holders of the Common Stock.
Future sales of significant numbers of shares of Common Stock in the public
market could adversely affect the prevailing market price of the Common Stock
and also could impair the Company's ability to raise capital through subsequent
offerings of securities.
4
THE COMPANY
The Company's principal executive offices are located at 2210 W. Dallas
Street, Houston, Texas 77019, and its telephone number is (713) 529-4200.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Common Stock offered by the Selling Shareholders.
RECENT DEVELOPMENTS
On May 7, 1996, the Company announced financial results for the fourth
quarter and year ended March 31, 1996. Sales for fiscal 1996 increased 49% to
$85,133,000 compared with $57,166,000 for fiscal 1995. Net income, before a
one-time restructuring charge of $975,000, or $.18 per share, increased to
$4,960,000, or $.90 per share. Including the charge, net income for fiscal 1996
was $3,985,000, or $.72 per share, compared with $4,482,000, or $.90 per share,
for fiscal 1995. For the fourth quarter, sales increased 30% to $24,092,000 from
$18,518,000 in the year-earlier period. Net income was $1,180,000, or $.21 per
share, compared with $1,415,000, or $.26 per share, in the year-earlier period.
On February 15, the Company acquired Emerald City Graphics in Kent,
Washington. On February 23, 1996, the Company acquired Precision Litho, Inc. in
Vista, California. On March 28, 1996, the Company acquired Tulsa Litho Company
in Tulsa, Oklahoma. On April 2, 1996, the Company announced the signing of a
letter of intent to acquire Bridgetown Printing Co. in Portland, Oregon. On May
6, 1996, the Company announced the signing of a letter of intent to acquire
Eagle Press in Sacramento, California. On May 23, 1996, the Company announced
the signing of a letter of intent to acquire Garner Printing of Des Moines,
Iowa. The Company expects to complete these acquisitions no later than July,
1996. The foregoing may contain forward looking information. Readers are
cautioned that such information involves risks and uncertainties, including the
possibility that events may occur which preclude completion of the Company's
pending acquisitions.
SELLING SHAREHOLDERS
This Prospectus covers offers from time to time by the Selling Shareholders
of the Shares owned by the Selling Shareholders. Set forth below are (i) the
names of the Selling Shareholders and (ii) the number of shares of Common Stock
held as of the date of this Prospectus by the Selling Shareholders, which number
is also the number of Shares which may be offered by each Selling Shareholder
pursuant to this Prospectus. Each person named below has sole voting and
investment power with respect to the Shares indicated. Any or all of the Shares
listed below may be offered for sale by the Selling Shareholders from time to
time.
PERCENTAGE OF
NUMBER OF COMMON STOCK
SHARES OF OUTSTANDING AT
COMMON STOCK MAY 31, 1996
HELD AND HELD PRIOR
OFFERED PURSUANT TO ANY SALES MADE
TO THIS PURSUANT TO THIS
PROSPECTUS PROSPECTUS
---------------- -----------------
James R. Cook........................... 216,576 3.65%
Herbert J. Blackinton................... 208,082 3.51%
Because the Company does not know how many Shares may be sold by the
Selling Shareholders pursuant to this Prospectus, no estimate can be given as to
the number of the Shares that will be held by the Selling Shareholders upon
termination of this offering.
The Company issued 424,658 of the Shares to Messrs. Cook and Blackinton in
connection with the Emerald City Acquisition. Pursuant to the Acquisition,
Emerald City became a wholly owned subsidiary of the Company and the Company
entered into employment agreements with Mr. Cook and Mr. Blackinton.
5
Under these agreements, the Company is contingently obligated at certain times
and under certain circumstances, depending on the performance and operating
results of Emerald City for three consecutive one-year periods beginning January
1, 1996, to issue, for all periods in the aggregate, up to a total of 75,000
shares of Common Stock to the Selling Shareholders, in equal amounts unless they
agree otherwise. Such Selling Shareholders were the only shareholders of Emerald
City at the time of the Merger.
For the three years prior to the Emerald City Acquisition, Mr. Cook was the
Chief Executive Officer and a 51% shareholder of Emerald City and Mr. Blackinton
was the President and a 49% shareholder of Emerald City. Messrs. Cook and
Blackinton currently serve as Chief Operating Officer and President,
respectively, of Emerald City.
REGISTRATION RIGHTS
Pursuant to the Registration Rights Agreement dated as of February 15, 1996
(the "Registration Rights Agreement"), between the Company and the Selling
Shareholders, the Company has agreed to use reasonable diligence to keep a shelf
registration statement (the "Shelf Registration Statement") with respect to
the Shares continuously effective until the earliest of (i) February 1, 1998 and
(ii) such time as all of the Shares hereunder registered have been sold or
withdrawn by the Selling Shareholders. The Shelf Registration Statement is
intended to permit the Shares to be sold from time to time by the Selling
Shareholders. The Registration Rights Agreement permits the Selling Shareholders
to offer the Shares in underwritten public offerings in certain circumstances.
The Registration Statement of which this Prospectus is a part has been filed by
the Company with the Commission in order to meet the Company's obligations under
the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the Selling Shareholders
have agreed to temporarily suspend use of the Shelf Registration Statement to
sell Shares upon notice of the occurrence of an event requiring the preparation
of a supplement or amendment to this Prospectus so that, as thereafter delivered
to the purchasers of the Shares, this Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated in this Prospectus or necessary to make the statements in this Prospectus
not misleading. The Company has agreed to promptly file with the Commission and
make available to each Selling Shareholder any such supplement or amendment. The
February 1, 1998 date referred to above is extended by the number of days
included in each period, if any, during which use of the Registration Statement
to sell Shares is suspended.
This summary of certain provisions of the Registration Rights Agreement
applicable to the Shares does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of the
Registration Rights Agreement.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by or for the account of the
Selling Shareholders pursuant to this Prospectus or pursuant to Rule 144 under
the Securities Act. Sales of Shares pursuant to this Prospectus may be effected
in the over-the-counter market, on the Nasdaq National Market or otherwise at
prices and on terms then prevailing or at prices related to the then current
market price (in each case as determined by the relevant Selling Shareholder),
directly or through agents designated from time to time, or through dealers or
underwriters to be designated or in negotiated transactions. The Shares may be
sold by any one or more of the following methods: (a) a block trade (which may
involve crosses) in which the broker or dealer so engaged will attempt to sell
the securities as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) exchange distributions and/or secondary distributions in
accordance with the rules of the Nasdaq National Market; (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; (e)
through the writing of options on Shares (whether such options are listed on an
options exchange or otherwise); or (f) privately negotiated transactions. To the
extent required by applicable law, the specific Shares to be sold and the names
of the
6
Selling Shareholders will be set forth in an accompanying Prospectus Supplement.
Each Selling Shareholder may effect such transactions by selling Shares directly
to other purchasers, through agents or through broker-dealers, and any such
agents or broker-dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from such Selling Shareholder, from
purchasers of Shares for whom they act as agents, or from both sources (and are
not expected to be in excess of customary commissions). The Selling Shareholders
and any broker-dealers that participate in the distribution of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales, and any commissions, and any profit on the resale of
Shares, received by the Selling Shareholders and any such broker-dealers may be
deemed to be underwriting discounts and commissions.
The Company will bear all costs and expenses incurred by it in connection
with the offering and sale of Shares pursuant to this Prospectus, but will not
be responsible for any commissions, underwriting discounts or similar amounts
payable in respect of any such sale. Notwithstanding the foregoing, the Company,
on the one hand, and each Selling Shareholder, on the other hand, have agreed to
indemnify each other from certain liabilities relating to the offering made
hereby, including liabilities under the Securities Act.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock of which 5,931,360 shares were issued and outstanding as of May 31,
1996, and 5,000,000 shares of Preferred Stock, par value $1.00 per share,
issuable in series, no shares of which were issued and outstanding as of the
date of this Prospectus.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share in the election
of directors and on all other matters on which shareholders are entitled or
permitted to vote. Such holders are not entitled to vote cumulatively for the
election of directors. Holders of Common Stock have no redemption, conversion,
preemptive or other subscription rights. In the event of the liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share ratably in all of the assets of the Company remaining, if any, after
satisfaction of the debts and liabilities of the Company and the preferential
rights of the holders of the Preferred Stock, if any, then outstanding. The
outstanding shares of Common Stock are validly issued, fully paid and
nonassessable.
Holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors of the Company out of funds legally available
therefor only after payment of, or provision for, full dividends (on a
cumulative basis, if applicable) on all outstanding shares of any series of
Preferred Stock and after the Company has made provision for any sinking or
purchase funds for any series of Preferred Stock. The Company has not paid any
cash dividends on the Common Stock since its incorporation and does not
anticipate paying cash dividends in the foreseeable future.
PREFERRED STOCK
The Preferred Stock is issuable by the Board of Directors in one or more
series, with the number of shares of each series and the rights, preferences and
limitations of each series to be determined by the Board of Directors are: the
annual rate of dividends; the redemption price, if any; the terms of a sinking
or purchase fund, if any; the amount payable in the event of any voluntary
liquidation, dissolution or winding up of the affairs of the Company; conversion
rights, if any; and voting powers, if any. All series of Preferred Stock rank
equally and are identical in all respects except as may otherwise be provided in
the Statement or Statements of Resolution establishing such series. The Board of
Directors of the Company, without obtaining stockholder approval, may issue
shares of the Preferred Stock with voting rights or conversion rights which
could affect the voting power of the holders of Common Stock. The issuance of
any shares of Preferred Stock could be utilized, under certain circumstances, in
an attempt to prevent the acquisition of the Company. There are no shares of
Preferred Stock outstanding as of the date of this Prospectus, and the Company
has no present intention to issue any shares of Preferred Stock.
7
CERTAIN ANTI-TAKEOVER PROVISIONS
Certain provisions of the Certificate of Incorporation and By-laws
summarized in the following paragraph may have the effect of discouraging,
delaying or preventing an acquisition proposal that a shareholder might consider
favorable, including a proposal that might result in the payment of a premium
over the market price for the shares held by shareholders.
The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock and 5,000,000 shares of Preferred Stock, all of which shares of
Preferred Stock are undesignated as of the date of this Prospectus. The
authorized but unissued (and in the case of Preferred Stock, undesignated) stock
may be given voting rights and privileges and issued by the Board of Directors
in one or more transactions. Such rights and privileges, when exercised, may
make it more difficult for a shareholder or any group of shareholders to obtain
control of the Company.
LEGAL OPINION
The validity of the issuance of the shares of the Common Stock offered
hereby will be passed upon for the Company by Baker & Botts, L.L.P., Houston,
Texas.
EXPERTS
The financial statements incorporated by reference in this Prospectus to
the extent and for the periods indicated in their reports have been audited by
Arthur Andersen LLP, independent public accountants, and are incorporated herein
by reference in reliance upon the authority of said firm as experts in
accounting and auditing.
8
<PAGE>
NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING SHAREHOLDER OR
UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME AND ANY SALE MADE
HEREUNDER DOES NOT IMPLY THAT THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
PAGE
----
Available Information.......................... 2
Incorporation of Certain Documents by
Reference.................................... 2
Risk Factors................................... 3
The Company.................................... 5
Use of Proceeds................................ 5
Selling Shareholders........................... 5
Registration Rights............................ 6
Plan of Distribution........................... 6
Description of Capital Stock................... 7
Legal Opinion.................................. 8
Experts........................................ 8
424,658 SHARES
CONSOLIDATED
GRAPHICS, INC.
COMMON STOCK
------------------------
PROSPECTUS
------------------------
JUNE ..., 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Company in connection with this
offering are as follows:
Securities and Exchange Commission
registration fee..................... $ 3,588
Accounting fees and expenses......... 1,000
Legal fees and expenses, including
Blue Sky........................... 15,000
Miscellaneous........................ 1,000
---------
Total........................... $ 20,588
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify any director or officer who was, is or is threatened
to be made a named defendant or respondent in a proceeding because he is or was
a director or officer, provided that the director or officer (i) conducted
himself in good faith, (ii) reasonably believed (a) in the case of conduct in
his official capacity, that his conduct was in the corporation's best interests,
and (b) in all other cases, that his conduct was at least not opposed to the
corporation's best interests and (iii) in the case of any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. Subject to certain
exceptions, a director or officer may not be indemnified if the person is found
liable to the corporation or if the person is found liable on the basis that he
improperly received a personal benefit. Under Texas law, reasonable expenses
incurred by a director or officer may be paid or reimbursed by the corporation
in advance of a final disposition of the proceeding after the corporation
receives a written affirmation by the director or officer of his good faith
belief that he has met the standard of conduct necessary for indemnification and
a written undertaking by or on behalf of the director or officer to repay to the
amount if it is ultimately determined that the director or officer is not
entitled to indemnification by the corporation. Texas law requires a corporation
to indemnify an officer or director against reasonable expenses incurred in
connection with the proceeding in which he is named defendant or respondent
because he is or was a director or officer if he is wholly successful in defense
of the proceeding.
Texas law also permits a corporation to purchase and maintain insurance or
another arrangement on behalf of any person who is or was a director or officer
against any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person, whether or not the
corporation would have the power to indemnify him against that liability under
Article 2.01-1.
The Company's By-Laws provide for the indemnification of its officers and
directors, and the advancement to them of expenses in connection with
proceedings and claims, to the fullest extent permitted under the Texas Business
Corporation Act. Such indemnification may be made even though directors and
officers would not otherwise be entitled to indemnification under other
provisions of the By-Laws. The Company has entered into indemnification
agreements with its directors and certain of its officers that contractually
provide for indemnification and expense advancement. Both the By-Laws and the
agreements include related provisions meant to facilitate the indemnitees'
receipt of such benefits. These provisions cover, among other things: (i)
specification of the method of determining entitlement to indemnification and
the selection of independent counsel that will in some cases make such
determination, (ii) specification of certain time periods by which certain
payments or determinations must be made and actions must be taken and (iii) the
establishment of certain presumptions in favor of an indemnitee. The benefits of
certain of these provisions are available to an indemnitee only if there has
been a change in control (as defined). In addition, the Company may, in the
future, purchase directors and officers liability insurance policies for its
directors and officers.
II-1
The above discussion of Article 2.02-1 of the Texas Business Corporation
Act and of the Company's Second Amended and Restated Bylaws is not intended to
be exhaustive and is respectively qualified in its entirety by such statute and
the Second Amended and Restated Bylaws.
Reference is made to the form of the Registration Rights Agreement, filed
as Exhibit 10.1 hereto, which contains provisions for indemnification of the
Company, its directors officers, and any controlling persons by the Selling
Shareholders against certain liabilities for certain information furnished by
the Selling Shareholders.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated herein by
reference:
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ------------------------ ------------------------------------------------------------------------------------------
<S> <C> <C>
*3.1 -- Restated Articles of Incorporation of the Company filed with the Secretary of State of the
State of Texas on July 27, 1994 (Consolidated Graphics, Inc. Form 10-Q (June 30, 1994) SEC
File No. 0-24068, Exhibit 4(a)).
*3.2 -- By-Laws of the Company (Consolidated Graphics, Inc. Form 10-K (May 31, 1995) SEC File No.
0-24068, Exhibit 3.2).
*4 -- Specimen Common Stock Certificate (Consolidated Graphics, Inc., Form S-1 (June 7, 1994)
Reg. No. 33-77468, Exhibit 4.1).
5 -- Opinion of Baker & Botts, L.L.P. regarding the legality of the securities being offered.
10.1 -- Registration Rights Agreement by and among the Company, James R. Cook and Herbert J.
Blackinton, dated as of February 15, 1996.
23.1 -- Consent of Baker & Botts, L.L.P. (set forth in Exhibit 5).
23.2 -- Consent of Arthur Andersen LLP.
24 -- Powers of Attorney.
</TABLE>
- ------------
* Incorporated by reference.
ITEM 17. UNDERTAKINGS
(a) 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;
(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; (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 paragraph (a)(1)(i) and
(a)(1)(ii) 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 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, 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
II-2
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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described in Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities 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 policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
PURSUANT TO 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 HOUSTON, THE STATE OF TEXAS, ON JUNE 17, 1996.
CONSOLIDATED GRAPHICS, INC.
By: /s/ JOE R. DAVIS
PRESIDENT, CHIEF EXECUTIVE OFFICER
AND
CHAIRMAN OF THE BOARD OF DIRECTORS
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REPORT HAS
BEEN SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ -------------------------------------- ---------------
<S> <C> <C>
JOE R. DAVIS President, Chief Executive June 17, 1996
JOE R. DAVIS Officer and Director
(Principal Executive Officer)
G. CHRISTOPHER COLVILLE Vice President -- Mergers and June 17, 1996
G. CHRISTOPHER COLVILLE Acquisitions and Chief
Financial and Accounting Officer
LARRY J. ALEXANDER* Director
LARRY J. ALEXANDER
BRADY F. CARRUTH* Director
BRADY F. CARRUTH
CLARENCE C. COMER* Director
CLARENCE C. COMER
GARY L. FORBES* Director
GARY L. FORBES
W. D. HAWKINS* Director
W. D. HAWKINS
JAMES H. LIMMER* Director
JAMES H. LIMMER
THOMAS E. SMITH* Director
THOMAS E. SMITH
HUGH N. WEST* Director
HUGH N. WEST
*By: /s/ JOE R. DAVIS June , 1996
JOE R. DAVIS
ATTORNEY-IN-FACT
</TABLE>
II-4
June 14, 1996
Consolidated Graphics, Inc.
2210 West Dallas Street
Houston, Texas 77019
Gentlemen:
As set forth in the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by Consolidated Graphics, Inc., a Texas
corporation (the "Company"), with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Securities Act"), relating to
424,658 shares (the "Shares") of the Company's common stock, par value $0.01 per
share, certain legal matters in connection with the Shares are being passed upon
for the Company by us. We understand that the Shares are to be offered pursuant
to the terms of the plan of distribution as described in the Registration
Statement. At your request, this opinion of counsel is being furnished to you
for filing as Exhibit 5 to the Registration Statement.
In our capacity as your counsel in the connection referred to
above, we have examined the Company's Restated Articles of Incorporation and
Second Amended and Restated By-Laws, each as amended to date, and have examined
the originals, or copies certified or otherwise identified, of corporate records
of the Company, statutes and other instruments and documents as a basis for the
opinions hereinafter expressed.
On the basis of the foregoing, and subject to the assumptions,
limitations and qualifications hereinafter set forth, we are of the opinion
that:
1. The Company is a corporation validly existing in good standing
under the laws of the State of Texas; and
2. The Shares have been duly authorized and are validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to us under "Legal Opinion"
in the prospectus forming a part of
Consolidated Graphics, Inc. -2- June 14, 1996
the Registration Statement. By giving such consent, we do not admit that we are
experts within the meaning of Section 11 of the Securities Act.
Very truly yours,
/s/ BAKER & BOTTS, L.L.P.
Baker & Botts, L.L.P.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as
of February 15, 1996, by and among Consolidated Graphics, Inc., a Texas
corporation (the "Company"), James R. Cook and Herbert J. Blackinton
(individually a "Holder" and collectively the "Holders");
WITNESSETH:
WHEREAS, it is a condition to the consummation of the
transactions contemplated by that certain Stock Purchase Agreement dated as of
February 15, 1996 (the "Stock Purchase Agreement"), among the Company, the
Holders and Emerald City Graphics, Inc., that this Agreement be executed and
delivered by the Company and the Holders;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Holders agree
as follows:
Section 1. DEFINITIONS. As used in this Agreement, the following terms
have the meanings indicated below:
"AGENT" shall mean any Person acting for or on behalf of a
Holder of Registrable Securities with respect to the holding or sale of such
Registrable Securities.
"AGREEMENT" shall mean this Registration Rights Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday, or legal holiday for banks in the State of Texas.
"COMMISSION" shall mean the Securities and Exchange
Commission.
"COMMON STOCK" shall mean the Company's common stock, par
value $.10 per share, or any successor class of the Company's common stock.
"COMPANY" shall mean Consolidated Graphics, Inc.
"DEMAND REGISTRATION" shall mean the registration, upon demand
by either or both of the Holders, with the Commission of the offer and sale of
Registrable Securities under and in accordance with the provisions of the
Securities Act.
"EMPLOYMENT AGREEMENTS" shall mean the
Employment/Noncompetition Agreements entered into between the Company and each
Holder dated as of February __, 1996.
"EXCESS DEMAND REGISTRATION" shall mean the registration upon
demand of the Excess Requested Shares with the Commission of the offer and sale
of the Excess Requested Shares under and in accordance with the provisions of
the Securities Act.
"EXCESS REQUESTED SHARES" shall mean Registrable Securities
that were requested to be included in the Demand Registration, but were not so
included pursuant to the terms of this Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"HOLDER" shall mean James R. Cook or Herbert J. Blackinton and
any of the Persons listed on Exhibit "A" hereto who are or become the registered
owners of Registrable Securities, as indicated on the records of the transfer
agent of the Company.
"INSPECTORS" shall mean any Holder of Registrable Securities,
any underwriter participating in any disposition of Registrable Securities
pursuant to a Demand Registration, and any attorney, accountant or other agent
retained by such Holder or underwriter.
"LIABILITIES" shall mean all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation).
"NEW COMMON STOCK" shall mean the shares of Common Stock to be
acquired by the Holders pursuant to the Stock Purchase Agreement or the
Employment Agreements, together with any Related Securities.
"PERSON" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or a political subdivision, agency or instrumentality
thereof or other entity or organization of any kind.
"PIGGYBACK REGISTRATION" shall mean the registration of
Registrable Securities pursuant to a registration statement filed by the Company
under the Securities Act as set forth in Section 2 of this Agreement.
"RECORDS" shall mean all financial and other records,
pertinent corporate documents and properties of the Company.
"REGISTRABLE SECURITIES" shall mean the New Common Stock and
the Related Securities, until such time as the New Common Stock and the Related
Securities have been (i) distributed to the public pursuant to a registration
statement covering such securities that has been declared effective under the
Securities Act, (ii) distributed to the public in accordance with the provisions
of Rule 144 (or any similar provision then in force) under the Securities Act or
(iii) repurchased by the Company.
-2-
"REGISTRATION EXPENSES" shall mean all expenses incident to
the Company's performance of or compliance with the Demand Registration pursuant
to this Agreement, including without limitation all Commission and securitites
exchange or National Association of Securities Dealers, Inc. registration and
filing fees, fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), rating agency fees, printing
expenses, messenger and delivery expenses, internal expenses (not including
salaries and expenses of its officers and employees performing legal or
accounting duties), the fees and expenses incurred in connection with the
listing of the Registrable Securities to be registered on each securities
exchange on which similar securities issued by the Company are then listed and
fees and disbursements of counsel for the Company and its independent certified
public accountants (including the expenses of any special audit or interim
review or "cold comfort" letters required by or incident to such performance),
the fees and expenses of any special experts retained by the Company in
connection with such registration (including any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities) and any
out-of-pocket expenses of the Holders of Registrable Securities.
"RELATED SECURITIES" shall mean any securities issued in
exchange for, as a dividend on or in replacement of, or otherwise issued in
respect of (including securities issued in a stock dividend, split or
recombination or pursuant to the exercise of preemptive rights), the New Common
Stock.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"STOCK PURCHASE AGREEMENT" shall mean that certain Stock
Purchase Agreement dated as of February __, 1996 among the Company and the
Holders.
Section 2. PIGGY-BACK REGISTRATION. (a) If the Company
proposes to file a registration statement under the Securities Act with respect
to an offering by the Company for its own account or for the account of any
other Person of any class of equity security, including any security convertible
into or exchangeable for any equity security (other than a registration
statement on Forms S-4 or S-8 (or their successor forms) or filed in connection
with an exchange offer or an offering of securities solely to the Company's
existing stockholders), then the Company shall in each case give written notice
of such proposed filing to the Holders of Registrable Securities at least twenty
days before the anticipated filing date, and such notice shall offer such
Holders the opportunity to register such number of Registrable Securities as
each such Holder may request. The Company shall use reasonable diligence to
cause the managing underwriter or underwriters of a proposed underwritten
offering to permit the Holders of Registrable Securities requested to be
included in the registration for such offering to include such securities in
such offering on the same terms and conditions as any similar securities of the
Company included therein. Notwithstanding the foregoing, if the managing
underwriter or underwriters of such offering delivers a written opinion to the
Holders of Registrable Securities that the total amount of securities which they
or the Company and any other Persons intend to include in such offering is
sufficiently large to materially and adversely affect the success of such
offering, then the amount of Registrable Securities to be offered for the
accounts of Holders of
-3-
Registrable Securities shall be reduced to the extent necessary, in the opinion
of such managing underwriter, to reduce the total amount of securities to be
included in such offering to the amount recommended by such managing
underwriter.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Company shall not be required to include Registrable Securities
in any registration statement if the proposed registration is (i) a registration
of a stock option or other employee incentive compensation plan or of securities
issued or issuable pursuant to any such plan, (ii) a registration of securities
issued or issuable pursuant to a stockholder reinvestment plan or other similar
plan, (iii) a registration of securities issued in exchange for any securities
or any assets of, or in connection with a merger or consolidation with, an
unaffiliated company, or (iv) a registration of securities pursuant to a
"rights" or other similar plan designed to protect the Company's stockholders
from a coercive or other attempt to take control of the Company.
(c) The Company may withdraw any registration statement and abandon any
proposed offering initiated by the Company without the consent of any Holder of
Registrable Securities, notwithstanding the request of any such Holder to
participate therein in accordance with this provision, if the Company
determines, in good faith in its sole discretion, that such action is in the
best interests of the Company and its stockholders (for this purpose, the
interest of the Holders shall not be considered).
Section 3. DEMAND REGISTRATION RIGHTS. (a) Subject to the
conditions stated herein, at any time after April 1, 1996, and on or before
October 1, 1997, a Holder may make a written request to the Company for
registration with the Commission of the offer and sale of the Registrable
Securities held by the Holders under and in accordance with the provisions of
the Securities Act. Following receipt of such request, the Company shall, no
later than ten (10) Business Days after receipt of such request, notify the
Holders that it will file, at the expense of the Holders of the Registrable
Securities, a registration statement covering the Registrable Securities for
sale by the Holders; PROVIDED, that the Company may, if necessary, delay the
filing of any registration statement relating to the Demand Registration for
such reasonable period of time, not to exceed 90 days, as is necessary to
prepare the financial statements of the Company for the fiscal period most
recently ended prior to such written request. If a Holder of Registrable
Securities shall, within ten (10) days after receipt of such notice, withdraw
such Holder's Registrable Securities from the Demand Registration, and such
Demand Registration shall not become effective under the Securities Act, such
Holder withdrawing such Registrable Securities from such Demand Registration
shall not have any further rights under this Section 3.
(b) All requests made pursuant to this Section 3 will specify the
amount of Registrable Securities to be registered and will also specify the
intended methods of disposition thereof.
(c) The Holders (as a group) of Registrable Securities shall as a group
be entitled to one Demand Registration. Such Demand Registration must become
effective under the Securities Act to count as having occurred with respect to
such Registrable Securities. The Registration Expenses of the Demand
Registration, whether or not it becomes effective, shall be paid as set forth in
Section 11 below.
-4-
(d) If the Demand Registration is an underwritten offering, the Holders
of a majority of the Registrable Securities to be included in such demand
registration will select a managing underwriter or underwriters to administer
the offering. Such managing underwriter or underwriters shall be acceptable to
the Company, and such acceptance will not be unreasonably withheld or delayed.
Section 4. COMPANY REGISTRATION. Notwithstanding the
provisions of Section 3, the Company shall not be obligated to effect a
registration requested pursuant to Section 3 if (i) within 30 days after
receiving the notice provided by any Holder under Section 3, the Company
notifies all Holders of the Registrable Securities of its intention to file a
registration statement for an underwritten public offering of Common Stock for
the sole account of the Company and within 90 days after providing such notice,
the Company files a registration statement for such offering. In such case, the
Holders shall have all the rights provided herein as if no such demand
registration had been requested, with the latest date by which a request for
registration must be made delayed to a date 180 days after the effective date of
such registration statement filed for an offering for the account of the Company
that resulted in the application of this Section 4. If at any time the Company
fails to pursue diligently any such registration statement or offering, the
provisions of the preceding sentence shall not apply, and the Company shall be
obligated to satisfy its obligations under Section 3 promptly following notice
to do so from a Holder. With respect to such Company registration, the Company
shall have the sole authority to select or terminate the employment of
underwriters and to make all decisions in connection with the filing,
effectiveness and consummation of the proposed offering, subject to the express
provisions hereof.
Section 5. LIMITATIONS ON OBLIGATIONS OF COMPANY. The
obligations of the Company under Section 3 are subject to each of the following
limitations, conditions and qualifications:
(a) The Company shall be entitled to postpone for a reasonable
period of time (not exceeding 60 days) the filing (but not the
preparation) of any registration statement otherwise required to be
prepared and filed by it pursuant hereto if, at the time the Company
receives a request for such registration, the Company is in possession
of material non-public information that would be required to be
disclosed in a registration statement, but that has not been and will
otherwise not be disclosed to the public, and the Company deems
disclosure not to be in the best interests of the Company and its
stockholders (for this purpose, the interest of the Holders shall not
be considered). The Company shall be entitled to postpone the filing of
such a registration statement for additional 60-day periods (not to
exceed in any event an aggregate of 120 days) if it delivers to the
Holders of the Registrable Securities an opinion of counsel to the
effect that there is a reasonable likelihood that the filing of a
registration statement would result in the disclosure of material
non-public information that would be required to be disclosed in a
registration statement, the disclosure of which at such time appears
not to be in the best interests of the Company and its stockholders
(for this purpose, the interest of the Holders shall not be
considered).
-5-
(b) The Company shall be entitled to postpone for a reasonable
period of time (not exceeding 90 days) the distribution of preliminary
or final prospectuses under any registration statement required to be
prepared and filed by it pursuant hereto, if at the time such
distribution would otherwise be made, the Company is engaged in an
issuer tender offer within the meaning of Section 13(e) of the Exchange
Act for securities of the same class (within the meaning of the
Exchange Act) as the Registrable Securities that are proposed to be
registered, unless the Holders of the Registrable Securities proposed
to be registered can obtain a no-action letter from the staff of the
Commission to the effect that the staff would not recommend enforcement
action to the Commission if offers or sales were made pursuant to a
prospectus under such circumstances.
(c) The Company shall be entitled to postpone for a reasonable
period of time (not exceeding 90 days) the effectiveness (but not the
filing or preparation) of any registration statement otherwise required
to be prepared and filed by it pursuant hereto if, within ten (10)
Business Days after it receives a request for a registration pursuant
hereto, the Company's investment banking firm determines (and the
Company so notifies the Holders of the Registrable Securities) that in
its judgment, such registration and offering would materially interfere
with any financing, acquisition, corporate reorganization or other
material transaction involving the Company that before such request was
made the Board of Directors of the Company had agreed by resolution to
pursue.
(d) If pursuant to a request for a Demand Registration the
Company delivers to the Holders of Registrable Securities proposed to
be registered, an opinion of counsel to the effect that sales of such
Registrable Securities thereunder might cause the Company to lose a
material amount of net operating losses or other tax carryforwards, the
Company may postpone the filing of the registration statement otherwise
required to be filed by it pursuant hereto, but only to the extent
required to protect such carryforwards, and only if it is first
determined that such protection cannot be effected by reducing the
number of securities being registered. In the event that the number of
securities being registered is reduced pursuant to this Section 5(d),
the Holders of the Excess Requested Shares shall be treated as if there
had been no Demand Registration and shall be entitled to the benefit of
Section 3 with respect to the Excess Requested Shares as if the Demand
Registration had not been requested; PROVIDED, that any Excess Demand
Registration shall not be required to become effective within 180 days
of the effective date of the Demand Registration or any Piggyback
Registration hereunder. With respect to such an Excess Demand
Registration relating to Excess Requested Shares subsequently
initiated, only Excess Requested Shares shall be deemed Registrable
Securities with respect thereto, and no Holder shall have any
independent demand registration rights with respect to shares for which
such Holder failed to request inclusion pursuant to Section 3 in the
Demand Registration that became effective.
Section 6. RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF
REGISTRABLE SECURITIES. To the extent not inconsistent with applicable law,
including insurance codes, each Holder of Registrable Securities that is
included in a registration statement which registers Registrable
-6-
Securities pursuant to this Agreement agrees not to effect any public sale or
distribution of the issue being registered (or any securities of the Company
convertible into or exchangeable or exercisable for securities of the same type
as the issue being registered) during the 14 days prior to, and during the
90-day period beginning on, the effective date of a registration statement filed
by the Company (except as part of such registration), but only if and to the
extent requested in writing (with reasonable prior notice) by the managing
underwriter or underwriters in the case of an underwritten public offering by
the Company of securities of the same type as the Registrable Securities;
PROVIDED, that the period of time for which the Company is required to keep such
registration statement which includes Registrable Securities continuously
effective shall be increased by a period equal to such requested holdback
period.
Section 7. RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The
Company agrees not to effect any public sale or distribution of any securities
similar to those being registered, or any securities convertible into or
exchangeable or exercisable for such securities, during the 14 days prior to,
and during the 90-day period beginning on, the effective date of any
registration statement in which the Holders of Registrable Securities are
participating (except pursuant to such registration statement).
Section 8. COOPERATION BY HOLDERS. The offering of Registrable
Securities by any Holder shall comply in all respects with the applicable terms,
provisions and requirements set forth in this Agreement, and such Holder shall
timely provide the Company with all information and materials required to be
included in a registration statement that (a) relate to the offering, (b) are in
possession of such Holder and (c) relate to such Holder, and to take all such
action as may be reasonably required in order not to delay the registration and
offering of the securities by the Company. The Company shall have no obligation
to include in such registration statement shares of a Holder who has failed to
furnish such information which, in the written opinion of counsel to the
Company, is required in order for the registration statement to be in compliance
with the Securities Act. If a Holder of Registrable Securities which is the
subject the Demand Registration or an Excess Demand Registration shall fail to
furnish such information and such Demand Registration or Excess Demand
Registration shall not become effective under the Securities Act, such Holder
shall not have a right to request inclusion of such Holder's Registrable
Securities in a future demand registration with respect to Registrable
Securities.
Section 9. REGISTRATION PROCEEDINGS. Whenever any Registrable
Securities are to be registered pursuant to Sections 2 or 3 of this Agreement,
the Company will use reasonable diligence to effect the registration of such
Registrable Securities in accordance with the intended method of disposition
thereof as quickly as practicable. In connection with any Piggyback
Registration, Demand Registration or Excess Demand Registration, the Company
will act as expeditiously as possible to:
(a) prepare and file with the Commission a registration
statement which includes the Registrable Securities and use reasonable
diligence to cause such registration statement to become effective;
PROVIDED, that before filing a registration statement or prospectus or
any amendments or supplements thereto, including documents incorporated
by reference after the initial filing of the registration statement,
the Company will furnish
-7-
to the Holders of the Registrable Securities covered by such
registration statement and the underwriters, if any, draft copies of
all such documents proposed to be filed at least five (5) Business Days
prior thereto, which documents will be subject to the reasonable review
of such Holders and underwriters, and the Company will not file any
registration statement or amendment thereto or any prospectus or any
supplement thereto (including such documents incorporated by reference)
to which Holders of a majority of the Registrable Securities covered by
such registration statement or the underwriters with respect to such
Registrable Securities, if any, shall reasonably object, and will
notify each Holder of the Registrable Securities of any stop order
issued or threatened by the Commission in connection therewith and take
all reasonable actions required to prevent the entry of such stop order
or to remove it if entered;
(b) prepare and file with the Commission such amendments and
post-effective amendments to the registration statement as may be
necessary to keep the registration statement effective for a period of
180 days if the registration is pursuant to Section 2 or until February
1, 1998 if the registration is pursuant to Section 3 (or such later
date that results by adding the number of days by which the
effectiveness of the registration statement is delayed as a result of
any postponement permitted under Section 5(a)-(c)) or such shorter
period which will terminate when all Registrable Securities covered by
such registration statement have been sold or withdrawn, but not before
the expiration of the 90-day period referred to in Section 3(3) of the
Securities Act and Rule 174 thereunder, if applicable; cause the
prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all securities
covered by such registration statement during the applicable period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement or supplement to the
prospectus; the Company shall not be deemed to have complied with its
obligations hereunder to keep a registration statement effective during
the applicable period if it voluntarily takes any action that would
result in selling Holders of the Registrable Securities being prevented
from selling such Registrable Securities during that period unless such
action is required under applicable law;
(c) furnish to any Holder of Registrable Securities included
in such registration statement and the underwriter or underwriters, if
any, without charge, such number of conformed copies of the
registration statement and any post-effective amendment thereto and
such number of copies of the prospectus (including each preliminary
prospectus) and any amendments or supplements thereto, and any
documents incorporated by reference therein, as such Holder or
underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities being sold by such Holder (it
being understood that the Company consents to the use of the prospectus
and any amendment or supplement thereto, provided by the Company to
each Holder of Registrable Securities covered by the registration
statement and the underwriter or underwriters, if any, in connection
with the offering and sale of the Registrable Securities covered by the
prospectus or any amendment or supplement thereto); PROVIDED, that
before filing a
-8-
registration statement or prospectus or any amendments or supplements
thereto, the Company will furnish to one counsel selected by the
Holders of a majority of the Registrable Securities covered by such
registration statement copies of all documents proposed to be filed
which documents will be subject to the review of such counsel;
(d) notify each Holder of Registrable Securities included in
such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, when the
Company becomes aware of the happening of any event as a result of
which the prospectus included in such registration statement (as then
in effect) contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein (in the
case of the prospectus or any preliminary prospectus, in light of the
circumstances under which they were made) not misleading and, as
promptly as practicable thereafter, prepare and file with the
Commission and furnish a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(e) use reasonable diligence to cause all Registrable
Securities included in such registration statement to be listed, by the
date of the first sale of Registrable Securities pursuant to such
registration statement, on each securities exchange (including, for
this purpose, NASDAQ) on which the Common Stock of the Company is then
listed or proposed to be listed, if any;
(f) make generally available to its security holders an
earnings statement satisfying the provisions of Section 11(a) of the
Securities Act no later than 45 days after the end of the 12-month
period beginning with the first day of the Company's first fiscal
quarter commencing after the effective date of the registration
statement, which earnings statement shall cover said 12-month period,
which requirement will be deemed to be satisfied if the Company timely
files complete and accurate information on Forms 10-Q, 10-K, and 8-K
under the Exchange Act and otherwise complies with Rule 158 under the
Securities Act as soon as feasible;
(g) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of the registration statement at
the earliest possible moment;
(h) if reasonably requested by the managing underwriter or
underwriters or any Holder of Registrable Securities covered by the
registration statement, promptly incorporate in a prospectus supplement
or post-effective amendment such information as the managing
underwriter or underwriters or such Holder requests to be included
therein, including without limitation, with respect to the number of
Registrable Securities being sold by such Holder to such underwriter or
underwriters, the purchase price being paid therefor by such
underwriter or underwriters and any other terms of the underwritten
-9-
offering of such Registrable Securities, and promptly make all required
filings of such prospectus supplement or post-effective amendment;
(i) as promptly as practicable after filing with the
Commission of any document which is incorporated by reference into a
registration statement, deliver a copy of such document to each Holder
of Registrable Securities covered by such registration statement;
(j) on or before the date on which the registration statement
is declared effective, use reasonable diligence to register or qualify,
and cooperate with the Holders of Registrable Securities included in
such registration statement, the underwriter or underwriters, if any,
and their counsel, in connection with the registration or qualification
of the Registrable Securities covered by the registration statement for
offer and sale under the securities or blue sky laws of each state and
other jurisdiction of the United States as any such Holder or
underwriter reasonably requests in writing, to use reasonable diligence
to keep each such registration or qualification effective, including
through new filings, or amendments or renewals, during the period such
registration statement is required to be kept effective and to do any
and all other acts or things necessary or advisable to enable the
disposition in all such jurisdictions of the Registrable Securities
covered by the applicable registration statement; PROVIDED that the
Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action
which would subject it to general service of process in any such
jurisdiction where it is not then so subject;
(k) cooperate with the Holders of Registrable Securities
covered by the registration statement and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery
of certificates (not bearing any restrictive legends) representing
securities to be sold under the registration statement, and enable such
securities to be in such denominations and registered in such names as
the managing underwriter or underwriters, if any, or such Holders may
request, subject to the underwriters' obligation to return any
certificates representing securities not sold;
(l) use reasonable diligence to cause the Registrable
Securities covered by the registration statement to be registered with
or approved by such other governmental agencies or authorities within
the United States as may be necessary to enable the seller or sellers
thereof or the underwriter or underwriters, if any, to consummate the
disposition of such securities;
(m) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
reasonable actions as the Holders of a majority of the Registrable
Securities being sold or the underwriters retained by Holders
participating in an underwritten public offering, if any, reasonably
request in order to expedite or facilitate the disposition of such
Registrable Securities;
-10-
(n) make available for inspection by the Inspectors such
Records as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's officers,
directors, and employees to supply all Records reasonably requested by
any such Inspector in connection with such registration statement;
PROVIDED, that with respect to any Records that are confidential, the
Inspectors shall execute such confidentiality agreements as the Company
may reasonably request in order to maintain the confidentiality of
confidential Records; and
(o) use reasonable diligence in connection with any
underwritten offering to obtain a "cold comfort" letter from the
Company's independent public accountants in customary form and covering
such matters of the type customarily covered by cold comfort letters as
the managing underwriter or underwriters may reasonably request.
Each Holder, upon receipt of any notice from the Company of the happening of any
event of the kind described in subsection (d) of this Section 9, will forthwith
discontinue disposition of the Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
subsection (d) of this Section 9 or until it is advised in writing by the
Company that the use of the prospectus may be resumed, and has received copies
of any additional or supplemental filings which are incorporated by reference in
the prospectus, and, if so directed by the Company, such Holder will, or will
request the managing underwriter or underwriters, if any, to, deliver to the
Company (at the Company's expense) all copies in their possession or control,
other than permanent file copies then in such Holder's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company shall give any such notice, the time periods
mentioned in subsection (b) of this Section 9 shall be extended by the number of
days during the period from and including the date of the giving of such notice
to and including the date when each seller of Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by subsection (d) of this Section 9 hereof or
the notice that they may resume use of the prospectus.
Section 10. REFERENCE TO HOLDER IN REGISTRATION STATEMENT. If
such registration statement refers to any Holder by name or otherwise as the
holder of any securities of the Company, then such Holder shall have the right
to require (a) the insertion therein of language, in form and substance
satisfactory to such Holder, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation of such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (b) if such reference to such Holder
by name or otherwise is not required by the Securities Act or any similar
federal statute then in force, the deletion of the reference to such Holder.
Section 11. DEMAND AND PIGGYBACK REGISTRATION EXPENSES. All
Registration Expenses incident to the Company's performance of or compliance
with the Demand Registration, Excess Demand Registration or Piggyback
Registration pursuant to this Agreement, except underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities and
-11-
any out-of-pocket expenses of the Holders of the Registrable Securities, will be
borne by the Company.
Section 12. INDEMNIFICATION BY THE COMPANY. The Company agrees
to indemnify and hold harmless each Holder of Registrable Securities, its
officers, directors, and each Person who controls such Holder (within the
meaning of the Securities Act), and any Agent (as hereinafter defined), or
investment advisor thereof against all Liabilities arising out of or based upon
any untrue or alleged untrue statement of material fact contained in any
registration statement, any amendment or supplement thereto, any prospectus or
preliminary prospectus, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as any such Liabilities arise out of or
are based upon any untrue statement or omission based upon information with
respect to such indemnified Person furnished in writing to the Company by such
indemnified Person expressly for use therein. In connection with an underwritten
offering, the Company will indemnify the underwriters thereof, their officers
and directors and each Person who controls such underwriters (within the meaning
of the Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities or to such other extent
as the Company and such underwriters may agree.
Section 13. INDEMNIFICATION BY HOLDERS OF REGISTRABLE
SECURITIES. In connection with any registration statement in which a Holder of
Registrable Securities is participating, each such Holder will furnish to the
Company in writing such information with respect to the name and address of such
Holder and the amount of Registrable Securities held by such Holder and such
other information as the Company shall reasonably request for use in connection
with any such registration statement or prospectus, and agrees to indemnify, to
the extent permitted by law, the Company, its directors and officers, and each
Person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities, and expenses resulting from
any untrue statement of a material fact or any omission of a material fact
required to be stated in the registration statement or prospectus or any
amendment thereof or supplement thereto or necessary to make the statements
therein not misleading, to the extent, but only to the extent, that such untrue
statement or omission is based upon any information with respect to such Holder
so furnished in writing by such Holder specifically for inclusion in any
prospectus or registration statement.
Section 14. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder agrees to give prompt written notice to
the indemnifying party after the receipt by such Person of any written notice of
the commencement of any action, suit, proceeding or investigation or threat
thereof made in writing for which such Person may claim indemnification or
contribution pursuant to this Agreement and, unless in the written opinion of
counsel for such indemnified party a conflict of interest may exist between such
indemnified party and the indemnifying party with respect to such claim, permit
the indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to such indemnified party. Whether or not such defense
is assumed by the indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent. No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include
-12-
as an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. If the indemnifying party is not entitled to, or elects not to,
assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim, unless in the
opinion of counsel for any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the fees and expenses of such additional counsel or counsels.
Section 15. CONTRIBUTION. If the indemnification provided for
in Sections 12 and 13 from the indemnifying party is unavailable to an
indemnified party hereunder in respect of any losses, claims, damages,
liabilities, or expenses referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities, or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses, claims, damages,
liabilities, or expenses, as well as any other relative equitable
considerations. The relative fault of such indemnifying party and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities, and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 14, any legal or other fees or
expenses reasonably incurred by such party in connection with any investigation
or proceeding. The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 15 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. The obligations of the
Company pursuant to Sections 12, 13, 14 and 15 shall be further subject to such
additional express agreements of the Company as may be required to facilitate an
underwritten offering, provided that no such agreement shall in any way limit
the rights of the Holders of Registrable Securities under this Agreement, or
create additional obligations of such Holders not set forth herein, except as
otherwise expressly agreed in writing by any such Holders.
Section 16. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No
Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
securities on the terms of and on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements (which shall be the Company in the case of an offering of
securities by the Company), and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
-13-
Section 17. RULE 144. The Company covenants that it will file
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the Commission thereunder (or, if
the Company is not required to file such reports, it will, upon the request of
any Holder of Registrable Securities, make publicly available other
nonconfidential information so long as necessary to permit sales under Rule 144
under the Securities Act), and it will take such other action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any Holder of Registrable Securities, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
Section 18. RECAPITALIZATIONS, EXCHANGES, ETC. The provisions
of this Agreement shall apply, to the full extent set forth herein, with respect
to the Registrable Securities, to any and all shares of equity capital of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets, or otherwise) which may be issued in respect of,
in exchange for, or in substitution of the Registrable Securities, in each case
as the amounts of such securities outstanding are appropriately adjusted for any
equity dividends, splits, reverse splits, combinations, recapitalizations, and
the like occurring after the date of this Agreement.
Section 19. OPINIONS. When any legal opinion is required to be
delivered hereunder, such opinion may contain such qualifications as may be
customary or otherwise appropriate for legal opinions in similar circumstances.
Section 20. NOTICES. For purposes of this Agreement, notices
and all other communications provided for herein shall be in writing and shall
be deemed to have been duly given when personally delivered or when mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
IF TO COMPANY, TO:
Consolidated Graphics, Inc.
2210 West Dallas Street
Houston, Texas 77019
Attention: Joe R. Davis, Chairman and
Chief Executive Officer
-14-
WITH A COPY TO:
R. Clyde Parker, Jr.
Keck, Mahin & Cate
First City Tower
1001 Fannin Street
Houston, Texas 77002
IF TO THE HOLDERS, TO:
James R. Cook
14116 233rd Pl. S.E.
Issaquah, WA 98027
Herbert J. Blackinton
909 S. 226th Pl.
DesMoines, WA 98198
IF TO ANY PERSON OTHER THAN THE HOLDERS:
to the address of such Person on the records of the transfer agent of
the Company as of the date prior to the date of any notice by the
Company
or to such other address as any party may furnish to the others in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt, and that failure to copy legal counsel shall not
invalidate notices otherwise properly given.
Section 21. APPLICABLE LAW. This contract is entered into
under, and shall be governed for all purposes by, the laws of the State of
Texas.
Section 22. AMENDMENT AND WAIVER. This Agreement may be
amended, and the provisions hereof may be waived, only by a written instrument
signed by (a) the Holders of a majority of the Registrable Securities and (b)
the Company. No failure by either party hereto at any time to give notice of any
breach by the other party of, or to require compliance with, any condition or
provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
Section 23. REMEDY FOR BREACH OF CONTRACT. The parties agree
that if there is any breach or asserted breach of the terms, covenants, or
conditions of this Agreement, the remedy of the parties hereto shall be at law
and in equity and injunctive relief shall lie for the enforcement of or relief
from any provisions of this Agreement. If any remedy or relief is sought and
obtained by any party against one of the other parties pursuant to this Section
23, the other party shall, in addition to the remedy of relief so obtained, be
liable to the party seeking such remedy or relief for the reasonable expenses
incurred by such party in successfully obtaining such remedy or relief,
including the reasonable fees and expenses of such party's counsel.
-15-
Section 24. SEVERABILITY. It is a desire and intent of the
parties that the terms, provisions, covenants, and remedies contained in this
Agreement shall be enforceable to the fullest extent permitted by law. If any
such term, provision, covenant, or remedy of this Agreement or the application
thereof to any Person or circumstances shall, to any extent, be construed to be
invalid or unenforceable, in whole or in part, then such term, provision,
covenant, or remedy shall be construed in a manner so as to permit its
enforceability under the applicable law to the fullest extent permitted by law.
In any case, the remaining provisions of this Agreement, or the application
thereof to any Person or circumstances other than those to which they have been
held invalid or unenforceable, shall remain in full force and effect.
Section 25. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original, but
all of which together will constitute one and the same Agreement.
Section 26. HEADINGS. The section and paragraph headings have
been inserted for purposes of convenience and shall not be used for interpretive
purposes.
Section 27. BINDING EFFECT. Unless otherwise provided herein,
the provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors, and permitted assigns, and is not intended to confer upon any other
Person any right or remedies hereunder; PROVIDED, HOWEVER, that a transferee of
a Holder, other than as contemplated in (i), (ii) or (iii) of the definitions of
Registrable Securities in Section 1, shall be deemed to be a Holder for purposes
of obtaining the benefits or enforcing the rights of a Holder.
Section 28. ENTIRE AGREEMENT. This Agreement, together with
the other agreements referenced herein, constitutes the entire agreement and
supersedes all prior agreements, understandings, both written and oral, among
the parties with respect to the subject matter hereof.
Section 29. INFORMATION. So long as each Holder owns
Registrable Securities, such Holder agrees to deliver to the Company, upon
request, such information about such Holder and such Holder's holdings of
Registrable Securities as the Company may reasonably request as is necessary to
permit the Company to prepare and file its annual report on Form 10-K and its
proxy statements under the Exchange Act.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
By:/s/JOE R. DAVIS,
Joe R. Davis, Chairman and
Chief Executive Officer
S-1
/s/JAMES R. COOK
James R. Cook
S-3
/S/HERBERT J. BLACKINTON
Herbert J. Blackinton
S-4
EXHIBIT 23.2
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 May 15, 1995, on
the consolidated financial statements of Consolidated Graphics, Inc. and
subsidiaries included in Consolidated Graphics, Inc.'s Form 10-K for the year
ended March 31, 1995, and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
June 13, 1996
POWER OF ATTORNEY
WHEREAS, CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company"), intends, pursuant to the Registration Rights Agreement by and among
the Company, James R. Cook and Herbert J. Blackinton respecting 424,658 shares
of Common Stock of the Company ("Shares"), to file with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of
1933, as amended (the "Act"), a Registration Statement on Form S-3 respecting
the Shares, as prescribed by the Commission pursuant to the Act and the rules
and regulations of the Commission promulgated thereunder, with any and all
exhibits and other documents relating to said Registration Statement;
NOW, THEREFORE, the undersigned in his capacity as a director
or officer, or both, as the case may be, of the Company, does hereby appoint JOE
R. DAVIS and G. CHRISTOPHER COLVILLE and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director or officer, or both, as the case
may be, of the Company, said Registration Statement, any and all amendments to
said Registration Statement and all instruments as said attorneys or any of them
shall deem necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 13 day of June, 1996.
/s/BRADY F. CARRUTH
Brady F. Carruth
-1-
<PAGE>
POWER OF ATTORNEY
WHEREAS, CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company"), intends, pursuant to the Registration Rights Agreement by and among
the Company, James R. Cook and Herbert J. Blackinton respecting 424,658 shares
of Common Stock of the Company ("Shares"), to file with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of
1933, as amended (the "Act"), a Registration Statement on Form S-3 respecting
the Shares, as prescribed by the Commission pursuant to the Act and the rules
and regulations of the Commission promulgated thereunder, with any and all
exhibits and other documents relating to said Registration Statement;
NOW, THEREFORE, the undersigned in his capacity as a director
or officer, or both, as the case may be, of the Company, does hereby appoint JOE
R. DAVIS and G. CHRISTOPHER COLVILLE and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director or officer, or both, as the case
may be, of the Company, said Registration Statement, any and all amendments to
said Registration Statement and all instruments as said attorneys or any of them
shall deem necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 12 day of June, 1996.
/s/ CLARENCE C. COMER
Clarence C. Comer
-1-
<PAGE>
POWER OF ATTORNEY
WHEREAS, CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company"), intends, pursuant to the Registration Rights Agreement by and among
the Company, James R. Cook and Herbert J. Blackinton respecting 424,658 shares
of Common Stock of the Company ("Shares"), to file with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of
1933, as amended (the "Act"), a Registration Statement on Form S-3 respecting
the Shares, as prescribed by the Commission pursuant to the Act and the rules
and regulations of the Commission promulgated thereunder, with any and all
exhibits and other documents relating to said Registration Statement;
NOW, THEREFORE, the undersigned in his capacity as a director
or officer, or both, as the case may be, of the Company, does hereby appoint JOE
R. DAVIS and G. CHRISTOPHER COLVILLE and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director or officer, or both, as the case
may be, of the Company, said Registration Statement, any and all amendments to
said Registration Statement and all instruments as said attorneys or any of them
shall deem necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 13 day of June, 1996.
/s/GARY L. FORBES
Gary L. Forbes
-1-
<PAGE>
POWER OF ATTORNEY
WHEREAS, CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company"), intends, pursuant to the Registration Rights Agreement by and among
the Company, James R. Cook and Herbert J. Blackinton respecting 424,658 shares
of Common Stock of the Company ("Shares"), to file with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of
1933, as amended (the "Act"), a Registration Statement on Form S-3 respecting
the Shares, as prescribed by the Commission pursuant to the Act and the rules
and regulations of the Commission promulgated thereunder, with any and all
exhibits and other documents relating to said Registration Statement;
NOW, THEREFORE, the undersigned in his capacity as a director
or officer, or both, as the case may be, of the Company, does hereby appoint JOE
R. DAVIS and G. CHRISTOPHER COLVILLE and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director or officer, or both, as the case
may be, of the Company, said Registration Statement, any and all amendments to
said Registration Statement and all instruments as said attorneys or any of them
shall deem necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 13 day of June, 1996.
/s/HUGH N. WEST
Hugh N. West
-1-
PAGE>
POWER OF ATTORNEY
WHEREAS, CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company"), intends, pursuant to the Registration Rights Agreement by and among
the Company, James R. Cook and Herbert J. Blackinton respecting 424,658 shares
of Common Stock of the Company ("Shares"), to file with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of
1933, as amended (the "Act"), a Registration Statement on Form S-3 respecting
the Shares, as prescribed by the Commission pursuant to the Act and the rules
and regulations of the Commission promulgated thereunder, with any and all
exhibits and other documents relating to said Registration Statement;
NOW, THEREFORE, the undersigned in his capacity as a director
or officer, or both, as the case may be, of the Company, does hereby appoint JOE
R. DAVIS and G. CHRISTOPHER COLVILLE and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director or officer, or both, as the case
may be, of the Company, said Registration Statement, any and all amendments to
said Registration Statement and all instruments as said attorneys or any of them
shall deem necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 12 day of June, 1996.
/s/JAMES H. LIMMER
James H. Limmer
-1-
<PAGE>
POWER OF ATTORNEY
WHEREAS, CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company"), intends, pursuant to the Registration Rights Agreement by and among
the Company, James R. Cook and Herbert J. Blackinton respecting 424,658 shares
of Common Stock of the Company ("Shares"), to file with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of
1933, as amended (the "Act"), a Registration Statement on Form S-3 respecting
the Shares, as prescribed by the Commission pursuant to the Act and the rules
and regulations of the Commission promulgated thereunder, with any and all
exhibits and other documents relating to said Registration Statement;
NOW, THEREFORE, the undersigned in his capacity as a director
or officer, or both, as the case may be, of the Company, does hereby appoint JOE
R. DAVIS and G. CHRISTOPHER COLVILLE and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director or officer, or both, as the case
may be, of the Company, said Registration Statement, any and all amendments to
said Registration Statement and all instruments as said attorneys or any of them
shall deem necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 13 day of June, 1996.
/s/LARRY J. ALEXANDER
Larry J. Alexander
-1-
<PAGE>
POWER OF ATTORNEY
WHEREAS, CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company"), intends, pursuant to the Registration Rights Agreement by and among
the Company, James R. Cook and Herbert J. Blackinton respecting 424,658 shares
of Common Stock of the Company ("Shares"), to file with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of
1933, as amended (the "Act"), a Registration Statement on Form S-3 respecting
the Shares, as prescribed by the Commission pursuant to the Act and the rules
and regulations of the Commission promulgated thereunder, with any and all
exhibits and other documents relating to said Registration Statement;
NOW, THEREFORE, the undersigned in his capacity as a director
or officer, or both, as the case may be, of the Company, does hereby appoint JOE
R. DAVIS and G. CHRISTOPHER COLVILLE and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director or officer, or both, as the case
may be, of the Company, said Registration Statement, any and all amendments to
said Registration Statement and all instruments as said attorneys or any of them
shall deem necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 13 day of June, 1996.
/s/THOMAS E. SMITH
Thomas E. Smith
-1-
<PAGE>
POWER OF ATTORNEY
WHEREAS, CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
"Company"), intends, pursuant to the Registration Rights Agreement by and among
the Company, James R. Cook and Herbert J. Blackinton respecting 424,658 shares
of Common Stock of the Company ("Shares"), to file with the Securities and
Exchange Commission (the "Commission") under the Securities Exchange Act of
1933, as amended (the "Act"), a Registration Statement on Form S-3 respecting
the Shares, as prescribed by the Commission pursuant to the Act and the rules
and regulations of the Commission promulgated thereunder, with any and all
exhibits and other documents relating to said Registration Statement;
NOW, THEREFORE, the undersigned in his capacity as a director
or officer, or both, as the case may be, of the Company, does hereby appoint JOE
R. DAVIS and G. CHRISTOPHER COLVILLE and each of them severally, his true and
lawful attorney or attorneys with power to act with or without the other, and
with full power of substitution and resubstitution, to execute in his name,
place and stead in his capacity as a director or officer, or both, as the case
may be, of the Company, said Registration Statement, any and all amendments to
said Registration Statement and all instruments as said attorneys or any of them
shall deem necessary or incidental in connection therewith and to file the same
with the Commission. Each of said attorneys shall have full power and authority
to do and perform in the name and on behalf of the undersigned in any and all
capacities every act whatsoever necessary or desirable as the undersigned might
or could do in person, the undersigned hereby ratifying and approving the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this
instrument on this 13 day of June, 1996.
/s/W. D. HAWKINS
W. D. Hawkins
-1-
<PAGE>
