AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 1997
Registration No. 333-......
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CONSOLIDATED GRAPHICS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 5858 WESTHEIMER, SUITE 200 76-0190827
(State or other jurisdiction of HOUSTON, TEXAS 77057 (I.R.S. Employer
incorporation or organization) (713) 787-0977 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.
5858 WESTHEIMER, SUITE 200
HOUSTON, TEXAS 77057
(713) 787-0977
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPY TO:
R. CLYDE PARKER, JR.
WINSTEAD SECHREST & MINICK P.C.
910 TRAVIS STREET, SUITE 2400
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 REGISTERED PER SHARE (1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share............ 149,776 $49.09375 $7,353,066 $2,169
=====================================================================================================
</TABLE>
(1) Calculated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and based upon the average of the high and low
sales prices of the Common Stock as reported on The New York Stock
Exchange on December 17, 1997.
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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
149,776 SHARES
CONSOLIDATED GRAPHICS, INC.
COMMON STOCK
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This Prospectus has been prepared for use in connection with the proposed
sale by the holders thereof (the "Selling Shareholders") of an aggregate of
149,776 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 New York Stock
Exchange 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 New York Stock Exchange; (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 New York Stock Exchange under the symbol
"CGX." On December 18, 1997, the last reported sale price for the Common Stock
on The New York Stock Exchange was $47.44 per share. Reports, proxy and
information statements and other information concerning the Company can be
inspected at such Exchange.
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."
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PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH
UNDER THE CAPTION "RISK FACTORS," BEGINNING ON PAGE 5.
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.
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THE DATE OF THIS PROSPECTUS IS DECEMBER 19, 1997.
<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
Commission maintains a web site that contains reports, proxy and information
statements regarding registrants that file electronically with the Commission.
The address of this web site is (http://www.sec.gov).
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, 1997.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997.
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
(d) The Company's Form 8-K, filed April 4, 1997 in connection with the
press release regarding the completion of the acquisition of Tucker
Printers.
(e) The Company's Form 8-K, filed April 30, 1997 in connection with the
press release regarding the announcement of the Company's fourth quarter
results and the mutual termination of the letter of intent with respect to
the proposed acquisition of Litho Industries, Inc. of Raleigh Durham,
North Carolina.
(f) The Company's Form 8-K, filed May 7, 1997 in connection with the press
release regarding the announcement that it had executed a nonbinding
letter of intent to acquire The Etheridge Company of Grand Rapids,
Michigan.
(g) The Company's Form 8-K, filed June 11, 1997 in connection with the
press release regarding the announcement that it had signed a new
$100,000,000 revolving credit facility.
(h) The Company's Form 8-K, filed July 2, 1997 in connection with the
press released regarding the announcement that it had executed a
nonbinding letter of intent to acquire Georges & Shapiro Lithograph, Inc.
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(i) The Company's Form 8-K, filed July 9, 1997 in connection with the
press release regarding the announcement that it had executed a nonbinding
letter of intent to acquire Austin Printing Company of Atlanta, Georgia
and the press release regarding the announcement that it had executed a
nonbinding letter of intent to acquire The Walnut Circle Press, Inc. in
Greensboro, North Carolina.
(j) The Company's Form 8-K, filed July 23, 1997 in connection with the
press release regarding the announcement that it had executed a nonbinding
letter of intent to acquire Geyer Printing Company and the completion of
the acquisition of The Etheridge Company.
(k) The Company's Form 8-K, filed July 30, 1997 in connection with the
press release regarding the announcement of the Company's fiscal 1997
first quarter results.
(l) The Company's Form 8-K, filed August 18, 1997 in connection with the
press release regarding the completion of the acquisition of Georges &
Shapiro Lithograph, Inc.
(m) The Company's Form 8-K, filed September 9, 1997 in connection with the
press release regarding the announcement that it had executed nonbinding
letters of intent to acquire two companies, The John C. Otto Company of
Springfield, Massachusetts and Superior Colour Graphics of Kalamazoo,
Michigan.
(n) The Company's Form 8-K, filed September 15, 1997 in connection with
the press release regarding the completion of the acquisition of Austin
Printing Company.
(o) The Company's Form 8-K, filed October 3, 1997 in connection with the
press release regarding the Company's four new executive vice president
positions and the completion of the acquisition of Geyer Printing Company.
(p) The Company's Form 8-K, filed October 27, 1997 in connection with the
press release regarding the completion of the acquisition of Superior
Colour Graphics.
(q) The Company's Form 8-K, filed November 3, 1997 in connection with the
press release regarding the announcement of the Company's fiscal 1997
second quarter results and the completion of the acquisition of The John
C. Otto Company.
(r) The Company's Form 8-K, filed November 17, 1997 in connection with the
press release regarding the completion of the acquisition of The Walnut
Circle Press, Inc.
(s) The Company's Form 8-K, filed December 8, 1997 in connection with the
press release regarding the announcement that it had executed a nonbinding
letter of intent to acquire StorterChilds Printing Company of Gainesville,
Florida.
(t) The Company's Form 8-K, filed December 11, 1997 in connection with the
press release regarding the announcement that it had executed a nonbinding
letter of intent to acquire Fittje Bros. Printing Company of Colorado
Springs, Colorado.
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.
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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 5858 Westheimer, Suite 200, Houston,
Texas 77057, Attention: Secretary (telephone number: (713) 787-0977).
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<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 continue 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 life insurance policies of $8.0 million on Mr. Davis.
CONTROL
Based upon the latest information available to the Company, Joe R. Davis,
Pilgrim Baxter & Associates ("Pilgrim") and the Vinik Group ("Vinik")
beneficially own approximately 12.1%, 10.0% and 9.8%, respectively, of the
outstanding Common Stock. As a result, although Mr. Davis, Pilgrim and Vinik
have never acted in concert in the past, if they acted in concert these parties
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
There are a significant number of shares of Common Stock issued without
registration in acquisition transactions or otherwise, and shares of Common
Stock issuable upon exercise of certain stock purchase options that have been or
may be granted under the Company's existing incentive stock plan, that
constitute either "restricted securities" as such term is defined in Rule 144
promulgated under the Securities Act or are held by "affiliates" of the Company
and consequently are subject to the resale limitations of Rule 144. Of the
foregoing, 415,967 are eligible for sale pursuant hereto or to the Company's
registration statements filed with the Commission on Form S-3 on June 17, 1996
and December 24, 1996.
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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<PAGE>
THE COMPANY
The Company's principal executive offices are located at 5858 Westheimer,
Suite 200, Houston, Texas 77057, and its telephone number is (713) 787-0977.
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 November 13, 1997, the Company acquired The Walnut Circle Press of
Greensboro, North Carolina. On December 8, 1997 and December 11, 1997,
respectively, the Company announced the execution of nonbinding letters of
intent to acquire StorterChilds Printing Company of Gainesville, Florida and
Fittje Bros. Printing Company of Colorado Springs, Colorado. 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 may preclude the completion of the Company's proposed acquisition of
the above referenced companies.
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, 1997
COMMON STOCK HELD HELD PRIOR TO ANY SALES
AND OFFERED PURSUANT MADE PURSUANT TO
TO THIS PROSPECTUS THIS PROSPECTUS
Bruce P. McGough 36,151 *
Thomas E. Samuels 24,100 *
Liquid, Inc. 20,305 *
Charles T. Austin 35,891 *
Judith C. Strickland 9,935 *
Jill E. Herndon 5,796 *
Larry E. Conner 4,264 *
Dennis Rampe 13,334 *
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Total 149,776
*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 has issued the above aggregate of 149,776 Shares pursuant to
the terms of certain agreements entered into in connection with the acquisition
of various companies.
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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 New York Stock Exchange 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 New York Stock Exchange; (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
under the Securities Act.
The Selling Shareholders have advised the Company that, during such time
as such Selling Shareholders may be engaged in a distribution of Common Stock
included herein, they will each comply with Rules 10b-2, 10b-6 and 10b-7
promulgated under the Securities Exchange Act of 1934 (the "1934 Act"), as
amended, and pursuant thereto will, among other things: (i) not engage in any
stabilization activity in connection with the securities of the Company in
contravention of such rules; (ii) cause to be furnished to each broker through
whom these shares of Common Stock covered hereby may be offered or to the
offeree if an offer is not made through a broker, such copies of the Prospectus
and any amendment or supplement thereto and documents incorporated by reference
therein as may be required by such broker or offeree; and (iii) not bid for or
purchase any securities of the Company or attempt to induce any person to
purchase any of the Company's securities except as permitted under the 1934 Act.
Each of the Selling Shareholders have also agreed to inform the Company when the
distribution of the shares held by them is completed.
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 certain of the 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 20,000,00 shares of
Common Stock of which 12,704,981 shares were issued and outstanding as of
November 30, 1997, 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
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subscription rights. In the event of the liquidation, dissolution or winding up
of the Company, holders of Common Stock are entitled to share ratably in all of
the assets of the Company remaining, if any, after satisfaction of the debts and
liabilities of the Company and the preferential rights of the holders of the
Preferred Stock, if any, then outstanding. The outstanding shares of Common
Stock are validly issued, fully paid and nonassessable.
Holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors of the Company out of funds legally available
therefor only after payment of, or provision for, full dividends (on a
cumulative basis, if applicable) on all outstanding shares of any series of
Preferred Stock and after the Company has made provision for any sinking or
purchase funds for any series of Preferred Stock. The Company has not paid any
cash dividends on the Common Stock since its incorporation and does not
anticipate paying cash dividends in the foreseeable future.
PREFERRED STOCK
The Preferred Stock is issuable by the Board of Directors in one or more
series, with the number of shares of each series and the rights, preferences and
limitations of each series to be determined by the Board of Directors are: the
annual rate of dividends; the redemption price, if any; the terms of a sinking
or purchase fund, if any; the amount payable in the event of any voluntary
liquidation, dissolution or winding up of the affairs of the Company; conversion
rights, if any; and voting powers, if any. All series of Preferred Stock rank
equally and are identical in all respects except as may otherwise be provided in
the Statement or Statements of Resolution establishing such series. The Board of
Directors of the Company, without obtaining stockholder approval, may issue
shares of the Preferred Stock with voting rights or conversion rights which
could affect the voting power of the holders of Common Stock. The issuance of
any shares of Preferred Stock could be utilized, under certain circumstances, in
an attempt to prevent the acquisition of the Company. There are no shares of
Preferred Stock outstanding as of the date of this Prospectus, and the Company
has no present intention to issue any shares of Preferred Stock.
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 shares of Preferred 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 to
the extent and for the periods indicated in their reports have been audited by
Arthur Andersen LLP, independent public accountants, and are incorporated herein
by reference in reliance upon the authority of said firm as experts in
accounting and auditing.
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================================================================================
NO DEALER, SALES REPRESENTATIVE, OR ANY 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. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME AND ANY SALE MADE
HEREUNDER DOES NOT IMPLY THAT THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
----------
TABLE OF CONTENTS
PAGE
Available Information...................................................... 2
Incorporation of Certain
Documents by Reference..................................................... 2
Risk Factors............................................................... 5
The Company................................................................ 7
Use of Proceeds............................................................ 7
Recent Developments........................................................ 7
Selling Shareholders....................................................... 7
Plan of Distribution....................................................... 8
Description of Capital Stock............................................... 8
Legal Opinion.............................................................. 9
Experts.................................................................... 9
149,776 SHARES
CONSOLIDATED
GRAPHICS, INC.
COMMON STOCK
----------
PROSPECTUS
----------
DECEMBER 19, 1997
================================================================================
10
<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............................................... $2,169
Accounting fees and expenses..................................... 1,000
Legal fees and expenses.......................................... 10,000
Miscellaneous.................................................... 1,831
Total............................................................ $15,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act ("TBCA") 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. The
TBCA requires a corporation to indemnify an officer or director against
reasonable expenses incurred in connection with the proceeding in which he is
named defendant or respondent because he is or was a director or officer if he
is wholly successful in defense of the proceeding.
Texas law also permits a corporation to purchase and maintain insurance or
another arrangement on behalf of any person who is or was a director or officer
against any liability asserted against him and incurred by him in such a
capacity or arising out of his status as such a person, whether or not the
corporation would have the power to indemnify him against that liability under
Article 2.01-1.
The Company's By-Laws, 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 TBCA. 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 therein defined). In addition, the Company may, in
the future, purchase directors and officers liability insurance policies for its
directors and officers.
II-1
<PAGE>
The above discussion of Article 2.02-1 of the TBCA and of the Company's
By-laws is not intended to be exhaustive and is respectively qualified in its
entirety by such statute and the By-laws.
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 certain of the
Selling Shareholders against certain liabilities for certain information
furnished by such 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, adopted on May 31, 1995, as amended on
July 3, 1996, (Consolidated Graphics, Inc. Form 10-Q (June 30, 1997)
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, Bruce P.
McGough and Thomas E. Samuels, dated as of October 1, 1997.
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 (included herein on signature page).
- ------------
*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 paragraphs (a)(1)(i) and
(a)(1)(ii) above do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
II-2
<PAGE>
(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 19, 1997.
CONSOLIDATED GRAPHICS, INC.
By: /s/ JOE R. DAVIS
President, Chief Executive Officer and
Chairman of the Board of Directors
II-3
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Joe R. Davis, Harold Gaubert, Jr. and G.
Christopher Colville, and each one of them, his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
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 19, 1997
(Joe R. Davis) Officer and Director
(Principal Executive Officer)
/s/ HAROLD GAUBERT, JR. Executive Vice President - December 19, 1997
(Harold Gaubert, Jr.) Finance/Administration and
Chief Financial and Accounting
Officer
/s/ LARRY J. ALEXANDER December 17, 1997
(Larry J. Alexander) Director
/s/ BRADY F. CARRUTH December 19, 1997
(Brady F. Carruth) Director
/s/ CLARENCE C. COMER December 19, 1997
(Clarence C. Comer) Director
/s/ GARY L. FORBES December 19, 1997
(Gary L. Forbes) Director
/s/ W. D. HAWKINS December 17, 1997
(W. D. Hawkins) Director
/s/ JAMES H. LIMMER December 17, 1997
(James H. Limmer) Director
/s/ THOMAS E. SMITH December 19, 1997
(Thomas E. Smith) Director
/s/ HUGH N. WEST December 19, 1997
(Hugh N. West) Director
II-4
EXHIBIT 5
[LETTERHEAD WINSTEAD, SECHREST & MINICK]
December 19, 1997
Consolidated Graphics, Inc.
5858 Westheimer, Suite 200
Houston, Texas 77057
Gentlemen:
This opinion is given in connection with the filing by Consolidated
Graphics, Inc. ("CGX") 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 149,776 shares of the common stock, $.01 par value,
of CGX (the "Common Stock"). All of such shares (the "Shares") are being sold by
selling stockholders.
We have acted as counsel for CGX 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
CGX, 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, comparable documents or the
representations of officers and representatives of CGX and of the selling
stockholders.
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.
<PAGE>
Consolidated Graphics, Inc.
December 19, 1997
Page 2
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 P.C.
WINSTEAD SECHREST & MINICK P.C.
EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of October
__, 1997, by and among Consolidated Graphics, Inc., a Texas corporation (the
"Company"), Bruce P. McGough and Thomas E. Samuels (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 Stock Purchase Agreement dated as of October __,
1997 (the "Purchase Agreement"), by and among the Company, Geyer Printing
Company, Inc., a Pennsylvania 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 $0.01 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.
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.
<PAGE>
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended.
HOLDER shall mean each of Bruce P. McGough and Thomas E. Samuels.
HOLDERS shall mean Bruce P. McGough and Thomas E. Samuels, 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 Purchase 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, (c)
repurchased by the Company, or (d) distributable to the public under Rule 144(k)
(or any similar provision then in force).
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 securities exchange
or National Association of Securities Dealers, Inc. registration and filing
fees, fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), rating agency fees, printing
expenses, messenger and delivery expenses, internal expenses (not including
salaries and expenses of its officers and employees performing legal or
accounting duties), the fees and expenses incurred in connection with the
listing of the Registrable Securities to be registered on each securities
exchange on which similar securities issued by the Company are then listed and
fees and disbursements of counsel for the Company and its independent certified
public accountants (including the expenses of any special audit or
2
<PAGE>
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.
PURCHASE AGREEMENT shall mean that certain Stock Purchase Agreement dated
as of October __, 1997 by and among the Company, Geyer Printing Company, Inc., a
Pennsylvania corporation 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
and 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 and other Persons who have the
contractual right to have securities included in the offering shall, to the
extent not inconsistent with the contractual obligations of the Company existing
on the date hereof, be reduced pro rata based on the amount of securities each
has requested to be included in the offering pursuant to such contractual rights
to the extent necessary, in the opinion of such managing underwriter, to reduce
the total amount of securities to be included in such offering to the amount
recommended by such managing underwriter.
b. Notwithstanding anything to the contrary contained in this Agreement,
the Company shall not be required to include Registrable Securities in any
registration statement if the proposed registration is (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
3
<PAGE>
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 30 days following the closing of the transaction
contemplated in the Purchase Agreement (the "Closing Date"), and on or before
the date that is 300 days following the Closing Date, 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, as soon as reasonably
practicable, file a registration statement covering the Registrable Securities
for sale by the Holders. If a Holder of Registrable Securities shall 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.
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 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 and within 90 days after providing such notice,
the Company files a registration statement for such offering. In such case, the
Holders shall
4
<PAGE>
have all the rights provided herein, including, without limitation, under
Section 2, as if no such demand registration had been requested, with the latest
date by which a request for registration must be made with respect to any
Registrable Security not included in the underwritten public offering 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 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).
b. The Company shall be entitled to postpone for a reasonable period of
time the distribution of preliminary or final prospectuses under any
registration statement required to be prepared and filed by it pursuant hereto,
if at the time such distribution would otherwise be made, the Company is engaged
in an issuer tender offer within the meaning of Section 13(e) of the Exchange
Act for securities of the same class (within the meaning of the Exchange Act) as
the Registrable Securities that are proposed to be registered, unless the
Holders of the Registrable Securities proposed to be registered can obtain a
no-action letter from the staff of the Commission to the effect that the staff
would not recommend enforcement action to the Commission if offers or sales were
made pursuant to a prospectus under such circumstances.
c. The Company shall be entitled to postpone for a reasonable period of
time 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. Notwithstanding anything to the contrary set forth herein, in no event
shall the period of postponement permitted under Section 5.a., 5.b. and 5.c.
exceed sixty (60) days in the aggregate.
5
<PAGE>
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 for
distribution in an underwritten offering 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 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 are the
subject of 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:
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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 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
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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 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. cause all Registrable Securities to be listed as soon as practical
after the Closing Date on each securities exchange (including, for this purpose,
NASDAQ, if applicable) 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;
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i. as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement,
deliver a copy of such document to each Holder of Registrable Securities covered
by such registration statement;
j. on or before the date on which the registration statement is declared
effective, use reasonable diligence to register or qualify, and cooperate with
the Holders of Registrable Securities included in such registration statement,
the underwriter or underwriters, if any, and their counsel, in connection with
the registration or qualification of the Registrable Securities covered by the
registration statement for offer and sale under the securities or blue sky laws
of each state and other jurisdiction of the United States as any such Holder or
underwriter reasonably requests in writing, to use reasonable diligence to keep
each such registration or qualification effective, including through new
filings, or amendments or renewals, during the period such registration
statement is required to be kept effective and to do any and all other acts or
things necessary or advisable to enable the disposition in all such
jurisdictions of the Registrable Securities covered by the applicable
registration statement; PROVIDED that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
k. cooperate with the Holders of Registrable Securities covered by the
registration statement and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement, and enable such securities to be in such denominations and registered
in such names as the managing underwriter or underwriters, if any, or such
Holders may request, subject to the underwriters' obligation to return any
certificates representing securities not sold;
l. use reasonable diligence to cause the Registrable Securities covered by
the registration statement to be registered with or approved by such other
governmental agencies or authorities within the United States as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such securities;
m. enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other reasonable actions as the
Holders of a majority of the Registrable Securities being sold or the
underwriters retained by Holders participating in an underwritten public
offering, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
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
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o. use reasonable diligence in connection with any underwritten offering
to obtain a "cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters as the managing underwriter or underwriters may
reasonably request.
Each Holder, upon receipt of any notice from the Company of the happening of any
event of the kind described in subsection d of this Section 9, will forthwith
discontinue disposition of the Registrable Securities until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
subsection d of this Section 9 or until it is advised in writing by the Company
that the use of the prospectus may be resumed, and has received copies of any
additional or supplemental filings which are incorporated by reference in the
prospectus, and, if so directed by the Company, such Holder will, or will
request the managing underwriter or underwriters, if any, to, deliver to the
Company (at the Company's expense) all copies in their possession or control,
other than permanent file copies then in such Holder's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. If the Company shall give any such notice, the time periods
mentioned in subsection b of this Section 9 shall be extended by the number of
days during the period from and including the date of the giving of such notice
to and including the date when each seller of Registrable Securities covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by subsection d of this Section 9 hereof or
the notice that they may resume use of the prospectus.
Section 10. REFERENCE TO HOLDER IN REGISTRATION STATEMENT. If such
registration statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (a) the insertion therein of language, in form and substance
satisfactory to such Holder, to the effect that the holding by such Holder of
such securities is not to be construed as a recommendation of such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (b) if such reference to such Holder
by name or otherwise is not required by the Securities Act or any similar
federal statute then in force, the deletion of the reference to such Holder.
Section 11. DEMAND AND PIGGYBACK REGISTRATION EXPENSES. All Registration
Expenses incident to the Company's performance of or compliance with the Demand
Registration, Excess Demand Registration or Piggyback Registration pursuant to
this Agreement, except underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities and 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
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or are based upon any untrue statement or omission based upon information with
respect to such indemnified Person furnished in writing to the Company by such
indemnified Person expressly for use therein. In connection with an underwritten
offering, the Company will indemnify the underwriters thereof, their officers
and directors and each Person who controls such underwriters (within the meaning
of the Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities or to such other extent
as the Company and such underwriters may agree.
Section 13. INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. In
connection with any registration statement in which a Holder of Registrable
Securities is participating, each such Holder will furnish to the Company in
writing such information with respect to the name and address of such Holder and
the amount of Registrable Securities held by such Holder and such other
information as the Company shall reasonably request for use in connection with
any such registration statement or prospectus, and agrees to indemnify, to the
extent permitted by law, the Company, its directors and officers, and each
Person who controls the Company (within the meaning of the Securities Act)
against any losses, 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
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of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities, or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages, liabilities, or
expenses, as well as any other relative equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact, has been made by, or
relates to information supplied by, such indemnifying party or indemnified
parties, and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of 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.
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Section 18. RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply, to the full extent set forth herein, with respect to the
Registrable Securities, to any and all shares of equity capital of the Company
or any successor or assign of the Company (whether by merger, consolidation,
sale of assets, or otherwise) which may be issued in respect of, in exchange
for, or in substitution of the Registrable Securities, in each case as the
amounts of such securities outstanding are appropriately adjusted for any equity
dividends, splits, reverse splits, combinations, recapitalizations, and the like
occurring after the date of this Agreement.
Section 19. OPINIONS. When any legal opinion is required to be delivered
hereunder, such opinion may contain such qualifications as may be customary or
otherwise appropriate for legal opinions in similar circumstances.
Section 20. NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
IF TO COMPANY, TO:
Consolidated Graphics, Inc.
2210 West Dallas Street
Houston, Texas 77019
Attention: Joe R. Davis,
Chief Executive Officer
WITH A COPY TO:
R. Clyde Parker, Jr.
Winstead Sechrest & Minick P.C.
910 Travis Street, Suite 2400
Houston, Texas 77002
IF TO THE HOLDERS, TO EACH:
Geyer Printing Company, Inc.
3700 Bigelow Blvd.
Pittsburgh, Pennsylvania 15213
WITH A COPY TO:
Leo A. Keevican, Jr.
Doepken Keevican & Weiss
58th Floor, USX Tower
600 Grant Street
Pittsburgh, Pennsylvania 15213
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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, its proxy statements
under the Exchange Act and any filings under the Securities Act. Without
limiting the generality of the foregoing, each Holder agrees to provide the
Company, upon request, with information concerning the number of shares then
held by such Holder that are the subject of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
By: /s/ JOE R. DAVIS
Joe R. Davis, Chief Executive Officer
/s/ BRUCE P. MCGOUGH
Bruce P. McGough
/s/ THOMAS E. SAMUELS
Thomas E. Samuels
16
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated June 11, 1997, on the consolidated financial statements of Consolidated
Graphics, Inc. and subsidiaries as of March 31 1997 and 1996 incorporated by
reference in this registration statement and to all references to our firm
included therein.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
December 18, 1997
