AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 24, 1996
Registration No. 333-......
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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)
TEXAS 2210 W. DALLAS STREET 76-0190827
(State or other jurisdiction of HOUSTON, TEXAS 77019 (I.R.S. Employer
Incorporation or organization) (713) 529-4200 Identification Number)
(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:
R. CLYDE PARKER, JR.
WINSTEAD SECHREST & MINICK P.C.
910 TRAVIS STREET, SUITE 1700
HOUSTON, TEXAS 77002
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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. |_|
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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(1) PER SHARE (2) OFFERING PRICE (2) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share....... 176,280 $49.625 $8,747,895 $2,650.88
===========================================================================================================
</TABLE>
(1) Including shares to be issued pursuant to a 2-for-1 split of the Common
Stock to be distributed in the form of a stock dividend on January 10,
1997 to shareholders of record at the close of business on December 31,
1996.
(2) 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 December 20, 1996.
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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.
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<PAGE>
PROSPECTUS
176,280 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 176,280 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 December 20, 1996, the last reported sale price for the
Common Stock on the Nasdaq National Market was $49.00 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."
-------------------
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 DECEMBER 24, 1996.
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational 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 and 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, Suite 1300, 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.
The Company has filed with the Commission a registration statement (the
"Registration Statement") on Form S-3 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, 1996 as amended by the Company's Form 10-K/A, filed July
11, 1996 amending certain financial statements and supplementary data.
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996.
(c) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996.
(d) The Company's Form 8-K, filed July 10, 1996 in connection
with the press release issued on July 10, 1996 regarding the completion
of the acquisition of Garner Printing.
(e) The Company's Form 8-K, filed July 18, 1996 in connection
with the acquisition of Garner Printing on July 3, 1996.
(f) The Company's Form 8-K, filed July 24, 1996 in connection
with the acquisition of Eagle Press of Sacramento, California on July
12, 1996, the press release issued on July 18, 1996 regarding the
completion of the acquisition of Eagle Press, the press release issued
on July 24, 1996 regarding the announcement of the Company's first
quarter results, and a press purchase incentive agreement entered into
between the Company and Komori America Corporation.
(g) The Company's Form 8-K/A, filed August 13, 1996 containing
pro forma financial statements of the Company and the financial
statements of Garner Printing.
(h) The Company's Form 8-K/A, filed August 14, 1996 containing
pro forma financial statements of the Company and the financial
statements of Eagle Press.
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<PAGE>
(i) The Company's Form 8-K, filed September 13, 1996 in
connection with the press release issued on September 6, 1996 regarding
the letter of intent to acquire Mobility, Inc. ("Mobility") of Richmond,
Virginia.
(j) The Company's Form 8-K, filed October 31, 1996 in connection
with the press release issued on October 30, 1996 regarding the
announcement of the Company's second quarter results.
(k) The Company's Form 8-K, filed November 4, 1996 in connection
with the press release issued on November 4, 1996 regarding the
completion of the acquisition of Mobility.
(l) The Company's Form 8-K, filed November 6, 1996 in connection
with the press release issued on November 6, 1996 regarding the letter
of intent to acquire Direct Color of Long Beach, California and Theo
Davis Sons near Raleigh-Durham, North Carolina.
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).
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3
<PAGE>
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. While there
are numerous such companies in the United States, there can be no assurance that
the Company will be able to identify and acquire suitable companies on terms
acceptable to the Company, 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
16.25% and 11.03%, 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.
GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS
The Company is subject to the environmental laws and regulations of the
United States and the states in which its subsidiaries have operations
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
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<PAGE>
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.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of approximately 1,236,114 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
Commission pursuant to Rule 144. In addition to such shares, 218,863 shares
are eligible for sale pursuant hereto or to the Company's registration statement
filed on Form S-3 with the Commission on June 17, 1996.
As of November 30, 1996, the Company had reserved 874,100 shares of
Common Stock for issuance upon the exercise of stock purchase options or stock
awards. Of these shares of Common Stock, 388,650 shares are reserved for options
or stock awards which have not yet been granted or issued. 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 former shareholders of Emerald
City, 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.
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 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.
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5
<PAGE>
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 October 31, 1996, the Company acquired the assets and business of
Mobility, Inc. and certain affiliates in Richmond, Virginia. On November 6,
1996, the Company announced the signing of a letter of intent to acquire Melin
Enterprises, Inc., d/b/a Direct Color, in Long Beach, California and a letter of
intent to acquire Theo Davis Sons, Inc. serving the Raleigh-Durham, North
Carolina area. The Company expects to complete these acquisitions in December
1996 or January 1997. 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.
On December 18, 1996, the Company announced a 2-for-1 split of its
Common Stock. The stock split will be in the form of a stock dividend and will
be distributed on January 10, 1997 to shareholders of record at the close of
business on December 31, 1996. Shareholders will receive one share of Common
Stock for each share of Common Stock held on the record date.
SELLING SHAREHOLDERS
This Prospectus covers offers and sales 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 COMMON
STOCK OUTSTANDING
NUMBER OF SHARES OF AT NOVEMBER 30, 1996
COMMON STOCK HELD HELD PRIOR TO ANY SALES
AND OFFERED PURSUANT MADE PURSUANT TO
TO THIS PROSPECTUS THIS PROSPECTUS
Robert Garner 35,256 *
B.C. (Bernie) Nevins 35,256 *
Gerald Ross 35,256 *
Thomas Kruger 35,256 *
John Duro 35,256 *
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* less than 1%
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 the 176,280 Shares to Messrs. Garner, Nevins, Ross,
Kruger and Duro in connection with the acquisition of Garner Publishing Co.
("GPC"). Pursuant to the acquisition, GPC became a wholly owned subsidiary of
the Company and the Company entered into employment agreements with Messrs.
Garner, Ross, Kruger and Duro.
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<PAGE>
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 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 Shareholders, 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 6,154,840 shares were issued and outstanding as of
November 30, 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.
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<PAGE>
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.
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 Winstead Sechrest & Minick P.C.,
Houston, Texas.
EXPERTS
The financial statements incorporated by reference in this Prospectus
and elsewhere in the Registration Statement as indicated in their reports with
respect thereto, 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.
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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.
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TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION..................................................... 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE.................................................... 2
RISK FACTORS.............................................................. 4
THE COMPANY............................................................... 6
USE OF PROCEEDS........................................................... 6
RECENT DEVELOPMENTS....................................................... 6
SELLING SHAREHOLDERS...................................................... 6
PLAN OF DISTRIBUTION...................................................... 7
DESCRIPTION OF CAPITAL STOCK.............................................. 7
LEGAL OPINION............................................................. 8
EXPERTS .................................................................. 8
176,280 SHARES
Consolidated
Graphics, Inc.
COMMON STOCK
----------
PROSPECTUS
----------
DECEMBER 24, 1996
9
<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...........................................$ 2,650.88
Accounting fees and expenses................................. 1,000.00
Legal fees and expenses, including Blue Sky.................. 12,000.00
Miscellaneous................................................ 1,000.00
Total....................................................... $16,650.88
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
corporation 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 Second Amended and Restated By-Laws, as amended (the
"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.
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The above discussion of Article 2.02-1 of the Texas Business Corporation
Act and of the Company's Bylaws is not intended to be exhaustive and is
respectively qualified in its entirety by such statute and the 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:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
*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 Winstead Sechrest & Minick P.C. regarding the legality
of the securities being offered.
10.1 - Registration Rights Agreement by and among the Company, Robert
Garner, B.C. (Bernie) Nevins, Gerald Ross, Thomas Kruger and
John W. Duro, dated as of July 3, 1996.
23.1 - Consent of Winstead Sechrest & Minick P.C. (set forth in Exhibit
5).
23.2 - Consent of Arthur Andersen LLP.
*24 - Powers of Attorney (Consolidated Graphics, Inc. Form S-8
(December 20, 1996) Reg. No. 333-19435, Exhibit 24).
*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.
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(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 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.
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 December 23, 1996.
CONSOLIDATED GRAPHICS, INC.
By: /s/ JOE R. DAVIS
Joe R. Davis
President, Chief Executive
Officer and Chairman of the
Board of Directors
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<PAGE>
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.
SIGNATURE TITLE DATE
/s/ JOE R. DAVIS President, Chief Executive December 23, 1996
(Joe R. Davis) Officer and Director (Principal
Executive Officer)
/s/ G. CHRISTOPHER COLVILLE Vice President - Mergers and December 23, 1996
(G. Christopher Colville) Acquisitions and Chief Financial
and Accounting Officer
/s/ LARRY J. ALEXANDER Director December 23, 1996
(Larry J. Alexander)
/s/ BRADY F. CARRUTH Director December 23, 1996
(Brady F. Carruth)
/s/ CLARENCE C. COMER Director December 23, 1996
(Clarence C. Comer)
/s/ GARY L. FORBES Director December 23, 1996
(Gary L. Forbes)
Director December 23, 1996
(W. D. Hawkins)
Director December 23, 1996
(James H. Limmer)
/s/ THOMAS E. SMITH Director December 23, 1996
(Thomas E. Smith)
/s/ HUGH N. WEST Director December 23, 1996
(Hugh N. West)
* By: /s/ G. CHRISTOPHER COLVILLE
(G. Christopher Colville, Attorney-in-Fact)
II-4
EXHIBIT 5
[Winstead Letterhead]
December 23, 1996
Consolidated Graphics, Inc.
2210 W. Dallas Street
Houston, Texas 77019
Gentlemen:
This opinion is given in connection with the filing by Consolidated
Graphics, Inc. (the "Company") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, of a Registration Statement on
Form S-3 with respect to an aggregate of 176,280 shares of the common stock,
$.01 par value, of the Company (the "Common Stock"). All of such shares (the
"Shares") are being sold by selling stockholders.
We have acted as counsel for the Company in connection with the filing of
the Registration Statement. In so acting, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate
records, agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers and representatives of
the Company, and have made such inquiries of such officers and representatives
as we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. As to all
questions of fact material to this opinion that have not been independently
established, we have relied upon certificates or comparable documents of
officers and representatives of the Company.
Based on the foregoing, and subject to the qualifications stated herein, we
are of the opinion that the Shares being registered pursuant to the Registration
Statement are validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement. We further consent to the reference to our firm under the caption
"Legal Matters" in the prospectus which is a part of the Registration
Statement.
This opinion is rendered solely for your benefit in connection with the
transactions described above. Except as set forth above, this opinion may not be
used or relied upon by any other person and may not be disclosed, quoted, filed
with a governmental agency or otherwise referred to without our prior written
consent.
Very truly yours,
/s/ WINSTEAD SECHREST & MINICK
WINSTEAD SECHREST & MINICK
EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of July 3,
1996, by and among Consolidated Graphics, Inc., a Texas corporation (the
"Company"), Robert Garner, B.C. (Bernie) Nevins, Gerald Ross, Thomas Kruger and
John W. Duro (individually a "Holder" and collectively the "Holders");
W I T N E S S E T H :
WHEREAS, it is a condition to the consummation of the transactions
contemplated by that certain Agreement and Plan of Reorganization dated as of
July 1, 1996 (the "Reorganization Agreement"), among the Company, Garner
Acquisition Co., an Iowa corporation, Garner Publishing Company, an Iowa
corporation, and the Holders 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.
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.
<PAGE>
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 Robert Garner, B.C. (Bernie) Nevins, Gerald Ross, Thomas
Kruger or John W. Duro.
HOLDERS shall mean Robert Garner, B.C. (Bernie) Nevins, Gerald Ross,
Thomas Kruger and John W. Duro, collectively.
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 Reorganization Agreement, 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 (a) distributed to the public pursuant to a registration statement
covering such securities that has been declared effective under the Securities
Act, (b) distributed to the public in accordance with the provisions of Rule 144
(or any similar provision then in force) under the Securities Act or (c)
repurchased by the Company.
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
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<PAGE>
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.
REORGANIZATION AGREEMENT shall mean that certain Agreement and Plan of
Reorganization dated as of July 1, 1996 among the Company, Garner Acquisition
Co., Garner Publishing Company and the Holders.
SECURITIES ACT shall mean the Securities Act of 1933, as amended.
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 each of 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 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.
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<PAGE>
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 (a) a registration of a
stock option or other employee incentive compensation plan or of securities
issued or issuable pursuant to any such plan, (b) a registration of securities
issued or issuable pursuant to a stockholder reinvestment plan or other similar
plan, (c) 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 (d) 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 September 30, 1996, and on or before October 1, 1997,
a majority of the Holders acting together 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 a registration statement covering the
Registrable Securities for sale by the Holders; PROVIDED, HOWEVER, 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, such Holder withdrawing such Registrable Securities from such
Demand Registration shall not have any further rights under this Section 3,
without regard to whether the Demand Registration becomes effective under the
Securities Act.
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.
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
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<PAGE>
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 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).
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
5
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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. If the number of securities being registered is
reduced pursuant to this subsection 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, HOWEVER, 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 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 before, 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
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<PAGE>
Registrable Securities; PROVIDED, HOWEVER, 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 before, 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, HOWEVER, 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 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
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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 October 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 subsections a through c of Section 5) 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,
HOWEVER, THAT before filing a 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
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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
forty-five days after the end of the twelve-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
twelve-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 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
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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;
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, HOWEVER, 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
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<PAGE>
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 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.
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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, damages 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 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
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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 any 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, HOWEVER, 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.
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
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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,
Chief Executive Officer
WITH A COPY TO:
R. Clyde Parker, Jr.
Winstead Sechrest & Minick, P.C.
910 Travis Street, Suite 1700
Houston, Texas 77002
IF TO THE HOLDERS, TO EACH:
c/o Garner Publishing Company
1697 N.E. 53rd Avenue
Des Moines, Iowa 50313
WITH A COPY TO:
Lyle Simpson
Dreher, Simpson & Jensen, P.C.
1200 Hub Tower
699 Walnut Street
Des Moines, Iowa 50309
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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 Agreement and all rights and obligations
hereunder, including matters of construction, validity and performance, shall be
governed by the laws of the State of Texas, without giving effect to the
principles of conflicts of laws thereof.
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.
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 of reference only and shall not be used for
interpretive purposes.
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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 (a), (b) or (c) 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
By: ___________________________________
Joe R. Davis, Chief Executive Officer
___________________________________
Robert Garner
___________________________________
B.C. (Bernie) Nevins
___________________________________
Gerald Ross
___________________________________
Thomas Kruger
___________________________________
John W. Duro
17
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3, to be
filed with the Securities and Exchange Commission on or around December 23,
1996, of our report dated June 30, 1996, included in the Consolidated Graphics,
Inc. Annual Report on Form 10-K for the year ended March 31, 1996, and to all
references to out Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
December 23, 1996
