AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 3, 1998
Registration No. 333-65677
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
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)
----------------
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. |_|
----------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par value
$0.01 per share...... 569,241 $56.6875 $32,268,849.00 $6,664.96
===============================================================================================
</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 (i.e., $32.5625) as reported by the New York Stock
Exchange on October 9, 1998 with respect to the 374,728 shares on behalf of
which this Registration Statement was originally filed, resulting in a filing
fee of $3,599.61, and based upon the average high and low sales price of the
common stock (i.e. $56.6875) as reported on December 1, 1998 with respect to
the 194,513 shares added in this Amendment, resulting in an additional fee of
$3,065.35.
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. PROSPECTUS
<PAGE>
569,241 SHARES
CONSOLIDATED GRAPHICS, INC.
COMMON STOCK
----------------
Consolidated Graphics, Inc. has prepared this prospectus for use by
certain shareholders that hold unregistered shares of common stock of
Consolidated Graphics to allow them to sell such shares to the public without
any restrictions. The shareholders may sell the shares as described in the
section entitled "Plan of Distribution" in this prospectus. Consolidated
Graphics may be required to file a supplemental prospectus to describe a
specific sale of shares or to identify any other selling shareholders not
already discussed in this prospectus.
The common stock is traded on the New York Stock Exchange under the symbol
"CGX". On December 1, 1998, the last reported sale price for the common stock
on such Exchange was $56.50 per share.
Consolidated Graphics will not receive any proceeds from the sale of the
shares offered pursuant to this prospectus although it will pay certain expenses
incurred to register the shares. See "Plan of Distribution" and "Use of
Proceeds."
----------------
YOU SHOULD READ THIS ENTIRE PROSPECTUS AND ITS APPENDICES CAREFULLY,
ESPECIALLY THE RISK FACTORS BEGINNING ON PAGE 2, BEFORE YOU DECIDE TO INVEST IN
THE SHARES OFFERED BY THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU INFORMATION THAT DIFFERS FROM
THE INFORMATION IN THIS PROSPECTUS. IF YOU RECEIVE ANY DIFFERENT INFORMATION,
YOU SHOULD NOT RELY ON IT.
THE INFORMATION CONTAINED IN THIS PROSPECTUS SPEAKS AS OF THE DATE BELOW.
YOU SHOULD NOT IMPLY THAT SUCH INFORMATION HAS NOT CHANGED SINCE THAT DATE.
<PAGE>
----------------
The date of this prospectus is December __, 1998.
<PAGE>
RISK FACTORS
BEFORE YOU INVEST IN THE SHARES OFFERED IN THIS PROSPECTUS, YOU SHOULD BE
AWARE THAT THERE ARE VARIOUS RISKS, INCLUDING THOSE DESCRIBED BELOW. YOU SHOULD
CONSIDER CAREFULLY THESE RISK FACTORS TOGETHER WITH ALL OF THE OTHER INFORMATION
INCLUDED IN THIS PROSPECTUS BEFORE YOU DECIDE TO PURCHASE ANY OF THE SHARES.
SOME OF THE INFORMATION IN THIS PROSPECTUS MAY CONTAIN FORWARD-LOOKING
STATEMENTS. SUCH STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY SUCH AS "MAY," "WILL," "EXPECT," ANTICIPATE," "ESTIMATE," "CONTINUE"
OR OTHER SIMILAR WORDS. THESE STATEMENTS DISCUSS FUTURE EXPECTATIONS, MAKE
VARIOUS ASSUMPTIONS, CONTAIN PROJECTIONS OF RESULTS OF OPERATIONS OR OF
FINANCIAL CONDITION OR STATE OTHER "FORWARD-LOOKING" INFORMATION. WHEN
CONSIDERING SUCH FORWARD-LOOKING STATEMENTS, YOU SHOULD KEEP IN MIND THE RISK
FACTORS AND OTHER CAUTIONARY STATEMENTS IN THIS PROSPECTUS. THE RISK FACTORS
NOTED IN THIS SECTION AND OTHER FACTORS NOTED THROUGHOUT THIS PROSPECTUS COULD
CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY
FORWARD-LOOKING STATEMENT.
IMPLEMENTATION OF ACQUISITION STRATEGY
A key component of our growth strategy is accomplished by acquiring
printing companies located throughout the United States. While there are many
such companies, we may not always be able to identify and acquire companies
meeting our acquisition criteria on terms acceptable to us. Moreover, financing
to complete significant acquisitions may not always be available on satisfactory
terms in the future. Additionally, increased competition for acquisition
candidates may develop. Further, acquisitions involve a number of special risks,
including possible adverse effects on our operating results, diversion of
management's attention, failure to retain key acquired personnel and risks
associated with unanticipated events or liabilities,
<PAGE>
some or all of which could have a material adverse effect on our business, our
financial condition and the results of our operations.
INTEGRATION OF ACQUIRED BUSINESSES
Even if we are able to continue to identify and acquire suitable
businesses, we may experience difficulty in profitably managing additional
businesses or successfully integrating acquired businesses without substantial
costs, delays or other operational or financial problems. An acquisition may
also initially have an adverse effect upon our operating results while the
acquired business is adopting our management practices. Although we have so far
been generally successful in integrating our acquisitions, we may not in all
circumstances be able to establish, maintain or increase profitability of an
acquired entity.
DEPENDENCE UPON CONTINUED AVAILABILITY OF KEY PERSONNEL
We believe that our continued success will depend to a significant extent
upon our senior management, particularly Joe R. Davis, the founder, President
and Chief Executive Officer of Consolidated Graphics. The loss of the services
of Mr. Davis or other key personnel could have a material adverse effect on our
business and prospects. Our continued success also depends, in part, upon our
ability to attract and retain qualified employees.
SIGNIFICANT CONCENTRATION OF VOTING INFLUENCE
Based upon the latest information available to us, Joe R. Davis
beneficially owns approximately 10.4% and Jeffrey N. Vinik, et al. ("Vinik")
beneficially owns approximately 9.1%, of our outstanding common stock. As a
result, although Mr. Davis and Vinik have never acted together in the past, if
they acted together, they would have the ability to substantially influence the
election of persons to the Board of Directors of Consolidated Graphics and the
outcome of other matters requiring shareholder approval.
DIVIDEND POLICY - NO DIVIDENDS FOR FORESEEABLE FUTURE
We currently intend to retain all future earnings to finance the
continuing development of our business and do not anticipate paying cash
dividends on the common stock in the foreseeable future.
YEAR 2000 COMPLIANCE
<PAGE>
We have undertaken a Year 2000 compliance program to ensure that we will
be Year 2000 compliant by December 31, 1999. While we believe substantially all
of the equipment utilized in our printing operations will not be affected by the
Year 2000 issue, certain of our management information systems and associated
computer equipment are not currently Year 2000 compliant. Although we are
scheduling upgrades to our hardware and software where necessary to address this
issue and anticipate that substantially all such systems will be made Year 2000
compliant, there can be no assurance that this will be accomplished on a timely
basis. The ability of third parties with which we transact business to address
their Year 2000 issues are outside of our control. Although Year 2000 problems
with any one customer or supplier should not have a material adverse effect on
us, the disruption of a significant number of businesses could materially and
adversely affect our operations.
---------------------
<PAGE>
THE COMPANY
Consolidated Graphics, Inc.'s (hereinafter referred to as the "Company" or
"Consolidated Graphics") 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 shareholders pursuant to this prospectus.
SELLING SHAREHOLDERS
This prospectus covers offers and sales from time to time by the
shareholders set forth below (the "Selling Shareholders") of certain of the
shares owned by such shareholders. Set forth below are (i) the names of the
Selling Shareholders and (ii) the number of shares of common stock (the
"Shares") 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.
NUMBER OF SHARES OF
COMMON STOCK HELD
AND OFFERED PURSUANT
TO THIS PROSPECTUS
------------------
John T. Gowland .................... 125,074
U.A. Yates ......................... 161,051
Bruce P. McGough ................... 34,626
Thomas E. Samuels .................. 18,000
McKay Communications, Inc. ......... 119,561
A. William Harrison, Jr ............ 22,022
Marriott Winchester, Jr ............ 17,779
AHAB & Co.* ........................ 71,128
*Record title for such shares held by AHAB & Co., nominee for Tax-Managed Growth
Portfolio.
Because the Company does not know how many Shares will be sold by the
Selling Shareholders pursuant to this prospectus, no estimate can be given as to
the number of Shares that will be held by the Selling Shareholders upon
termination of this offering.
John T. Gowland and U.A. Yates acquired their Shares in connection with
the merger of Printing Corporation of America with a subsidiary of the Company.
Since the merger, John T. Gowland and U.A. Yates have been officers of a
subsidiary of the Company. Bruce P. McGough and Thomas E. Samuels acquired their
Shares in connection with the acquisition of Geyer Printing Company, Inc. by the
Company. Since the acquisition, Mr. McGough had been an officer of a subsidiary
of the Company. Following the acquisition of Geyer Printing Company, Inc., Mr.
McGough pledged certain of his Shares to Prudential Securities Incorporated.
McKay Communications, Inc. acquired its Shares in connection with the merger of
The McKay Press, Inc. with a subsidiary of the Company. A. William Harrison, Jr.
and Marriott Winchester, Jr. acquired their Shares in connection with the merger
of Graphic Technology of Maryland, Inc. with a
<PAGE>
subsidiary of the Company. Since the merger, Mr. Harrison has been an officer of
a subsidiary of the Company. Also, subsequent to the above transactions, Messrs.
Gowland and Harrison transferred certain shares to AHAB & Co and Mr. Winchester
pledged certain of his Shares to NationsBank N.A.
The fact that the Shares are held by the Selling Shareholders should not
be construed as a recommendation by them as to the investment quality of such
Shares, nor should it be construed to imply that such Selling Shareholders will
assist the Company in meeting any of its future financial obligations.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by or for the account of the
Selling Shareholders. As used herein, the term "Selling Shareholders" includes
their pledgees, donees, transferees or other successors in interest, including,
without limitation (a) Prudential Securities Incorporated, as pledgee of Bruce
P. McGough and (b) NationsBank N.A., as pledgee of Marriott Winchester, Jr.,
selling Shares received from a Selling Shareholder after the date of this
prospectus. Such sales may be effected by the Selling Shareholders from time to
time in one or more transactions on one or more exchanges (including the New
York Stock Exchange) or in the over-the-counter market or otherwise at prices
and at terms then prevailing or at prices related to the then current market
price, 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 one or more of the
following: (a) a block trade (which may involve crosses) in which the broker or
dealer so engaged will attempt to sell Shares 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) an exchange distribution in
accordance with the rules of such 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.
Each Selling Shareholder may effect the above transactions by selling
Shares directly to other purchasers, through agents or through broker-dealers,
which may act as agents or principals. In effecting sales, brokers or dealers
engaged by the Selling Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions, concessions or
discounts from Selling Shareholders in amounts to be negotiated immediately
prior to the sale. The Selling Shareholders have advised the Company that they
have not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their shares, nor is there
an underwriter or coordinating broker acting in connection with the proposed
sale of Shares by Selling Shareholders.
Because Selling Shareholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the Selling Shareholders will be
subject to the prospectus delivery requirements of the Securities Act, which may
include delivery through the facilities of the New York Stock Exchange pursuant
to Rule 153 under the Securities Act. Upon the Company being notified by a
Selling Shareholder that a material arrangement has been entered into with a
broker-dealer for the sale of Shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a broker or
dealer, a supplement to this prospectus will be filed with the Securities and
Exchange Commission ("Commission"), if required, pursuant to Rule 424(b) under
the Securities Act disclosing (i) the name of each such Selling Shareholder and
of the participating broker-dealer(s), (ii) the number of Shares involved, (iii)
the price at which such Shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus and (vi) other facts
material to the transaction. With respect to sales by donees and pledgees, a
supplement to this prospectus is not required to be filed by the Company unless
the Company is notified by the Selling Shareholder that such donee or pledgee
intends to sell more than five hundred (500) Shares.
From time to time the Selling Shareholders may engage in short sales,
short sales versus the box, puts and calls and other transactions in securities
of the Company or derivatives thereof, and may sell and deliver the Shares in
connection therewith. The Selling Shareholders may enter into hedging
transactions with broker-dealers or other
<PAGE>
financial institutions. In connection with such transactions, broker-dealers or
other financial institutions may engage in short sales of the Company's common
stock in the course of hedging the positions they assume with Selling
Shareholders. The Selling Shareholders may also enter into options or other
transactions with broker-dealers or other financial institutions which require
the delivery to such broker-dealer or other financial institution of Shares
offered hereby, which Shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect
such transaction).
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, has agreed to indemnify the Selling Shareholders and the
Selling Shareholders, on the other hand, have severally agreed to indemnify the
Company from certain liabilities relating to the offering made hereby, including
liabilities under the Securities Act. The Selling Shareholders may also agree to
indemnify any agent, dealer or broker-dealer that participates in transactions
regarding sales of the Shares against certain liabilities, including liabilities
arising under the Securities Act.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this prospectus, provided they meet the criteria and conform to the requirements
of such Rule.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 100,000,000 shares of
common stock of which 13,994,155 shares were issued and outstanding as of
September 30, 1998, and 5,000,000 shares of preferred stock, par value $1.00 per
share, issuable in series, no shares of which were issued and outstanding as of
the date of this prospectus.
COMMON STOCK
Holders of common stock are entitled to one vote per share in the election
of directors and on all other matters on which shareholders are entitled or
permitted to vote. Such holders are not entitled to vote cumulatively for the
election of directors. Holders of common stock have no redemption, conversion,
preemptive or other subscription rights. In the event of the liquidation,
dissolution or winding up of the Company, holders of common stock are entitled
to share ratably in all of the assets of the Company remaining, if any, after
satisfaction of the debts and liabilities of the Company and the preferential
rights of the holders of the preferred stock, if any, then outstanding. The
outstanding shares of common stock are validly issued, fully paid and
nonassessable.
Holders of common stock are entitled to receive dividends when and as
declared by the Board of Directors of the Company out of funds legally available
therefor only after payment of, or provision for, full dividends (on a
cumulative basis, if applicable) on all outstanding shares of any series of
preferred stock and after the Company has made provision for any sinking or
purchase funds for any series of preferred stock. The Company has not paid any
cash dividends on the common stock since its incorporation and does not
anticipate paying cash dividends in the foreseeable future.
PREFERRED STOCK
The preferred stock is issuable by the Board of Directors in one or more
series. The number of shares of each series and the rights, preferences and
limitations of each series may be determined by the Board of Directors,
including without limitation: 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
<PAGE>
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 Bylaws
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 100,000,000 shares of
common stock and 5,000,000 shares of preferred stock, all of which shares of
preferred stock are undesignated as of the date of this prospectus. The
authorized but unissued (and in the case of preferred stock, undesignated) stock
may be given voting rights and privileges and issued by the Board of Directors
in one or more transactions. Such rights and privileges, when exercised, may
make it more difficult for a shareholder or any group of shareholders to obtain
control of the Company.
SHARES ELIGIBLE FOR FUTURE SALE; RESTRICTED SECURITIES
The Company has issued a significant number of shares of common stock in
acquisition transactions or under other circumstances, including shares issuable
upon exercise of certain stock purchase options that have been or may be granted
under our existing incentive stock option plan. Certain of these shares
constitute either "restricted securities" as such term is defined in Rule 144
promulgated under the Securities Act of 1933, as amended, or are held by
"affiliates" of the Company and consequently are subject to the resale
limitations of Rule 144. 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 could also impair the Company's ability to raise capital
through subsequent offerings of securities with the Commission.
OTHER REGISTRATIONS
The Company has on file with the Commission several effective registration
statements under the Securities Act pursuant to which shares of its common stock
that were issued as restricted securities in connection with business
acquisitions may be resold. The Company also has on file an effective
registration statement covering two million shares of its common stock for use
in future acquisitions.
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.
AVAILABLE INFORMATION
<PAGE>
Consolidated Graphics files annual, quarterly and current reports, proxy
statements and other information with the Commission. You may read and copy any
reports, statements or other information that Consolidated Graphics files at the
Commission's public reference room at 450 Fifth Street N.W., Washington, D.C.
20549 or at its regional public reference rooms in New York, New York and
Chicago, Illinois. Please call the Commission at 1- 800-SEC-0330 for further
information on the operations and locations of the public reference rooms. The
public filings of Consolidated Graphics are also available to the public from
commercial document retrieval services and at the Internet World Wide Web site
maintained by the Commission at "http://www.sec.gov." Reports, proxy
statements and other information concerning Consolidated Graphics may also be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
Consolidated Graphics has filed a Registration Statement to register with
the Commission the Shares to be offered by the Selling Shareholders pursuant to
this prospectus. This prospectus is a part of the Registration Statement and
constitutes the prospectus of Consolidated Graphics with respect to those Shares
being offered by the Selling Shareholders. As allowed by the rules of the
Commission, this prospectus does not contain all of the information that can be
found in the Registration Statement or in the exhibits to the Registration
Statement. You should read the Registration Statement and its exhibits for a
complete understanding of all of the information included in the Registration
Statement.
The Commission allows Consolidated Graphics to "incorporate by reference"
information into this prospectus, which means that Consolidated Graphics can
disclose important information to you by referring you to another document filed
separately with the Commission. The information incorporated by reference
becomes part of the prospectus, except for any information superseded by
information contained directly in this prospectus. This prospectus incorporates
by reference the documents set forth below that Consolidated Graphics has
previously filed with the Commission. These documents contain important
information about Consolidated Graphics and its financial condition.
1. Annual Report on Form 10-K for the fiscal year ended March 31, 1998;
2. Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998
and September 30, 1998;
3. The description of the capital stock of Consolidated Graphics set
forth in its Form 8-A filed with the Commission on January 8, 1997;
and
4. Current Reports on Forms 8-K filed July 2, July 9, July 21, July 29,
August 5, August 17, August 26, September 2, September 21, September
28, October 13, October 23, October 28, October 30, November 4 and
November 17, 1998.
This prospectus also incorporates by reference additional documents that
Consolidated Graphics may file with the Commission after the date of this
prospectus. These include periodic reports, such as annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K.
Documents incorporated by reference may be obtained as described above and
are also available from Consolidated Graphics without charge, excluding all
exhibits unless specifically incorporated by reference as an exhibit to this
prospectus. You may obtain documents incorporated by reference in the prospectus
by requesting them in writing or by telephone from Consolidated Graphics at the
following address and telephone number: Consolidated Graphics, Inc., 5858
Westheimer, Suite 200, Houston, Texas 77057, Attention: Secretary, telephone:
(713) 787-0977.
<PAGE>
NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY SELLING SHAREHOLDER OR UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE DELIVERY
OF THIS PROSPECTUS AT ANY TIME AND ANY SALE MADE HEREUNDER DOES NOT IMPLY THAT
THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
PAGE
Risk Factors.................................................................2
The Company..................................................................4
Use of Proceeds..............................................................4
Selling Shareholders.........................................................4
Plan of Distribution.........................................................5
Description of Capital Stock.................................................6
Legal Opinion................................................................7
Experts......................................................................7
Available Information........................................................7
569,241 SHARES
Consolidated
Graphics, Inc.
COMMON STOCK
----------
PROSPECTUS
----------
DECEMBER __, 1998
<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............................................$ 6,665.00
Printing and distribution expenses............................ 3,000.00
Accounting fees and expenses.................................. 2,000.00
Legal fees and expenses, including Blue Sky................... 15,000.00
Miscellaneous................................................. 335.00
----------
Total.........................................................$27,000.00
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act provides that a
corporation may indemnify any director or officer who was, is or is threatened
to be made a named defendant or respondent in a proceeding because he is or was
a director or officer, provided that the director or officer (i) conducted
himself in good faith, (ii) reasonably believed (a) in the case of conduct in
his official capacity, that his conduct was in the corporation's best interests,
and (b) in all other cases, that his conduct was at least not opposed to the
corporation's best interests and (iii) in the case of any criminal proceeding,
had no reasonable cause to believe his conduct was unlawful. Subject to certain
exceptions, a director or officer may not be indemnified if the person is found
liable to the corporation or if the person is found liable on the basis that he
improperly received a personal benefit. Under Texas law, reasonable expenses
incurred by a director or officer may be paid or reimbursed by the corporation
in advance of a final disposition of the proceeding after the corporation
receives a written affirmation by the director or officer of his good faith
belief that he has met the standard of conduct necessary for indemnification and
a written undertaking by or on behalf of the director or officer to repay to the
corporation such expenses if it is ultimately determined that the director or
officer is not entitled to indemnification by the corporation. Texas law
requires a corporation to indemnify an officer or director against reasonable
expenses incurred in connection with a 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 2.02-1.
The Company's Restated Bylaws (the "Bylaws"), provide for the
indemnification of its officers and directors, and the advancement to them of
expenses in connection with proceedings and claims, to the fullest extent
permitted under the Texas Business Corporation Act. Such indemnification may be
made even though directors and officers would not otherwise be entitled to
indemnification under other provisions of the Bylaws. 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
Bylaws 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
<PAGE>
presumptions in favor of an indemnitee. The benefits of certain of these
provisions are available to an indemnitee only if there has been a change in
control (as defined). In addition, the Company may, in the future, purchase
directors and officers liability insurance policies for its directors and
officers.
The above discussion of Article 2.02-1 of the Texas Business Corporation
Act and of the Company's Bylaws is not intended to be exhaustive and is
respectively qualified in its entirety by such statute and the Bylaws.
Reference is made to the form of the Registration Rights Agreements, filed
as Exhibits 10.1, 10.2, 10.3 and 10.4 hereto, which contain provisions for
indemnification of the Company, its directors, officers, and any controlling
persons by the Selling Shareholders against certain liabilities for certain
information furnished by the Selling Shareholders.
ITEM 16. EXHIBITS
The following exhibits are filed herewith or incorporated herein by
reference:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
*4 - Specimen Common Stock Certificate (Consolidated Graphics,
Inc., Form 10-K (March 31, 1998) SEC. File No. 0-24068,
Exhibit 4).
5 - Opinion of Winstead Sechrest & Minick P.C. regarding the
legality of the securities being offered.
**10.1 - Registration Rights Agreement dated as of September 17, 1998
by and between Consolidated Graphics, Inc. and John T. Gowland
and U.A. Yates.
*10.2 - Registration Rights Agreement dated as of October 1, 1997 by
and between Consolidated Graphics, Inc. and Bruce P. McGough
and Thomas E. Samuels (Consolidated Graphics, Inc.,
Registration Statement on Form S-3 (as filed with the
Commission on December 22, 1997) SEC. File No. 0-24068,
Exhibit 10.1).
10.3 - Registration Rights Agreement dated as of November 4, 1998 by
and between Consolidated Graphics, Inc., A. William Harrison,
Jr., David E. Rosquist and Marriott Winchester, Jr.
10.4 - Registration Rights Agreement dated as of November 9, 1998 by
and between Consolidated Graphics, Inc. and McKay
Communications, Inc.
**23.1 - Consent of Winstead Sechrest & Minick P.C. (set forth in
Exhibit 5).
23.2 - Consent of Arthur Andersen LLP.
**24 - Power of Attorney (set forth on signature page).
* Incorporated by reference.
** Previously filed with this Registration Statement.
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
<PAGE>
Securities Act; (ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth
in the registration statement; (iii) to include any material information
with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement; provided, however, that paragraph (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant 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.
<PAGE>
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 Amendment No. 1 to
its 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 2, 1998.
CONSOLIDATED GRAPHICS, INC.
By:/s/ JOE R. DAVIS
Joe R. Davis
President, Chief Executive Officer and
Chairman of the Board of Directors
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS ON
BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C>
/s/ JOE R. DAVIS President, Chief Executive December 2, 1998
(Joe R. Davis) Officer and Director (Principal
Executive Officer)
/s/ G. CHRISTOPHER COLVILLE Executive Vice President December 2, 1998
(G. Christopher Colville) Financial and Accounting Officer
* /s/ LARRY J. ALEXANDER
(Larry J. Alexander) Director December 2, 1998
* /s/ BRADY F. CARRUTH
(Brady F. Carruth) Director December 2, 1998
* /s/ CLARENCE C. COMER
(Clarence C. Comer) Director December 2, 1998
* /s/ GARY L. FORBES
(Gary L. Forbes) Director December 2, 1998
* /s/ W. D. HAWKINS
(W. D. Hawkins) Director December 2, 1998
* /s/ JAMES H. LIMMER
(James H. Limmer) Director December 2, 1998
* /s/ THOMAS E. SMITH
(Thomas E. Smith) Director December 2, 1998
* /s/ HUGH N. WEST
(Hugh N. West) Director December 2, 1998
</TABLE>
*By:/s/ JOE R. DAVIS,
Joe R. Davis,
Attorney-in-Fact
[WINSTEAD SECHREST & MINICK LETTERHEAD]
December 2, 1998
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, as
amended, with respect to an aggregate of 569,241 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.
<PAGE>
Consolidated Graphics, Inc.
December 2, 1998
Page 2
We consent to the use of this opinion as an exhibit to the
Registration Statement. We further consent to the reference to our firm under
the caption "Legal Matters" in the prospectus which is a part of the
Registration Statement.
This opinion is rendered solely for your benefit in connection with
the transactions described above. Except as set forth above, this opinion may
not be used or relied upon by any other person and may not be disclosed, quoted,
filed with a governmental agency or otherwise referred to without our prior
written consent.
Very truly yours,
Winstead Sechrest & Minick P.C.
WINSTEAD SECHREST & MINICK P.C.
EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of November
4, 1998, by and among Consolidated Graphics, Inc., a Texas corporation (the
"Company"), A. William Harrison, Jr., David E. Rosquist and Marriott Winchester,
Jr.
W I T N E S S E T H :
WHEREAS, it is a condition to the consummation of the transactions
contemplated by that certain Agreement and Plan of Reorganization by and among
the Company, Graphtec Acquisition, Inc., a Maryland corporation ("Newco"),
Graphic Technology of Maryland, Inc., a Maryland corporation, A. William
Harrison, Jr., James A. Ritz, David E. Rosquist and Marriott Winchester, Jr.
dated of even date herewith (the "Merger Agreement") that this Agreement be
executed and delivered by the Company to the undersigned 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 a day on
which the New York Stock Exchange is not open for business.
COMMISSION shall mean the Securities and Exchange Commission.
COMMON STOCK shall mean the Company's common stock, par value $.01 per
share, or any successor class of the Company's common stock.
COMPANY shall mean Consolidated Graphics, Inc.
EFFECTIVE DATE shall mean November 4, 1998.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended.
HOLDER OR HOLDERS shall mean A. William Harrison, Jr. ("Harrison"), David
E. Rosquist ("Rosquist"), Marriott Winchester, Jr. ("Winchester") and any
Permitted Transferee who is a holder of Registrable Securities.
- 1 -
<PAGE>
INSPECTORS shall mean the Holders of Registrable Securities, any
underwriter participating in any disposition of Registrable Securities pursuant
to the Required Registration and any attorney, accountant or other agent
retained by such Holders or underwriter.
LIABILITIES shall mean all losses, claims, damages, liabilities, whether
joint or several, and expenses (including, but not limited to, reasonable costs
of investigation, expert witness, appraisal and other professional fees) and any
amounts paid in any settlement effected with the Company's consent.
NEW COMMON STOCK shall mean the shares of Common Stock of the Company to
be acquired by the Holders pursuant to the Merger Agreement.
PERMITTED TRANSFEREE shall mean any broker, dealer or affiliate thereof to
whom Harrison, Rosquist and/or Winchester transfer, prior to the date upon which
the registration statement for the Required Registration is filed, any shares of
the New Common Stock pursuant to a Hedge Transaction described in Section 16
hereof.
PERSON shall mean any individual, corporation, limited liability company,
partnership (general or limited), 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.
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 for so long as such New Common Stock and/or Related Securities are
held by the Holders until such time as the New Common Stock and the Related
Securities have been (i) sold to the public pursuant to a registration statement
covering such securities that has been declared effective under the Securities
Act, or (ii) sold to the public in accordance with the provisions of Rule 144
(or any similar provision then in force) under the Securities Act.
REGISTRATION EXPENSES shall mean all expenses incident to the Company's
performance of or compliance with the Required 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 the Company's counsel in connection with
blue sky qualifications of the Registrable Securities), rating agency fees,
printing expenses (including the printing of prospectuses), messenger and
delivery expenses, internal expenses (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, the fees and expenses
of any special experts retained by the Company in connection
- 2 -
<PAGE>
with such registration, underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities and all out-of-pocket expenses of the
Holders of Registrable Securities (including, without limitation, the fees and
disbursements of Holders' counsel) arising out of or in connection with the
Required Registration.
RELATED ACQUISITIONS shall mean the three (3) transactions contemplated by
those three (3) certain letters of intent dated July 29, 1998 between the
Company and (i) Richard Royle, et al, (ii) McKay Communications, Inc., and (iii)
John T. Gowland, et al.
RELATED SECURITIES shall mean any securities issued in exchange for (or
upon the conversion or exercise of any convertible security, warrant or stock
option), as a dividend on or in replacement of, or otherwise issued in respect
of, or in replacement for (including securities issued in a stock dividend,
split or recombination or pursuant to the exercise of preemptive rights), the
New Common Stock.
REQUIRED REGISTRATION shall mean the registration with the Commission and
all applicable state securities agencies pursuant to Section 2 hereof of the
offer and sale of the Registrable Securities under and in accordance with the
provisions of the Securities Act and as set forth in Section 2 of this
Agreement.
SECURITIES ACT shall mean the Securities Act of 1933, as amended.
Section 2. REQUIRED REGISTRATION.
a. Subject to the terms and conditions contained in this Agreement, the
Company shall file with the Commission a registration statement on Form S-3
under Rule 415 of the Securities Act covering the offer and sale of all of the
Registrable
Securities held by the Holders under and in accordance with the provisions of
the Securities Act.
b. The Company shall file a registration statement for the offer and sale
of the Registrable Securities on or before the sooner to occur of (i) thirty
(30) calendar days following the Effective Date, or (ii) five (5) calendar days
following the last closing date of the Related Acquisitions; provided, however,
that if each of the Related Acquisitions has closed and the registration
statement(s) covering the resale of the Common Stock issued in connection
therewith has been declared effective prior to the Effective Date, this clause
(ii) shall no longer be effective and the filing of the registration statement
by the Company shall occur no later than thirty (30) days following the
Effective Date.
c. If the Required Registration is an underwritten offering, the Holder(s)
of a majority of the Registrable Securities to be included in the Required
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.
- 3 -
<PAGE>
Section 3. RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE
SECURITIES. To the extent not inconsistent with applicable law, each Holder of
Registrable Securities that are included in a registration statement 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 4. COOPERATION BY HOLDERS. The offering of Registrable Securities
by any Holder shall comply in all material respects with the applicable terms,
provisions and requirements set forth in this Agreement, and such Holders shall
timely provide the Company with all information and materials required to be
included in a registration statement and that relate to the offering of the
Registrable Securities of 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 to be included in the Required
Registration shall fail to furnish such information and as a result thereof, (i)
such Holder's Registrable Securities are not included in the registration
statement at the time it becomes effective, or (ii) such Required Registration
shall not become effective under the Securities Act then, in either such event,
such Holder shall have no further rights under this Agreement to require the
registration of such Holder's Registrable Securities nor shall such Holder have
any right to request inclusion of the Holder's Registrable Securities in a
future registration with respect to the Company's Common Stock.
Section 5. REGISTRATION PROCEEDINGS. In connection with the Required
Registration, the Company will act as expeditiously as possible to:
a. prepare and file with the Commission and all applicable state
securities agencies a registration statement within the applicable period
provided in Section 2 which includes the Registrable Securities and use
commercially reasonable efforts to cause such registration statement to become
effective as soon as practicable; 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 three (3) Business Days prior thereto, which documents will be subject to
the reasonable review of the Holders and underwriters, if any, and the Company
will not file any registration statement or amendment thereto or any prospectus
or any supplement thereto (including such documents
- 4 -
<PAGE>
incorporated by reference) to which the Holders of a majority of the Registrable
Securities covered by such registration statement or the underwriters, if any,
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 and any applicable state securities
agencies 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 and any applicable state
securities agencies such amendments and post-effective amendments to the
registration statement as may be necessary to keep the registration statement
effective for such period until the initial Holder(s) of such Registrable
Securities can distribute such Registrable Securities without regard to the
volume limitations contained in Rule 144(d) under the Securities Act 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 4(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 and all applicable state securities laws
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;
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 (including exhibits) 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);
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 all
applicable state securities agencies 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
- 5 -
<PAGE>
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
e. use commercially reasonable efforts to cause all Registrable Securities
included in such registration statement to be listed, by the date of the first
sale of Registrable Securities pursuant to such registration statement, on each
securities exchange (including, for this purpose, The New York Stock Exchange)
on which the Common Stock of the Company is then listed or proposed to be
listed, if any;
f. make generally available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act no later than
45 days after the end of the 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 stop
order, or other order suspending the effectiveness of the registration statement
at the earliest possible moment;
h. if reasonably requested by the managing underwriter or underwriters or
any Holder of Registrable Securities covered by the registration statement,
promptly incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter or underwriters or such Holder requests
to be included therein, including without limitation, with respect to the number
of Registrable Securities being sold by such Holder to such underwriter or
underwriters, the purchase price being paid therefor by such underwriter or
underwriters and any other terms of the underwritten offering of such
Registrable Securities, and promptly make all required filings of such
prospectus supplement or post-effective amendment;
i. as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement,
deliver a copy of such document to each Holder of Registrable Securities covered
by such registration statement;
j. on or before the date on which the registration statement is declared
effective, use commercially reasonable efforts 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, however, that the Company
- 6 -
<PAGE>
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 to such
Holders any certificates representing securities not sold;
l. use commercially reasonable efforts 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. deliver to the Holders and their counsel and the managing underwriter
or underwriters, if any, copies of all correspondence related to the offering
between the Commission, the Company and its counsel;
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
respond to all reasonable inquiries from, and 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.
Notwithstanding the foregoing provisions of this Section 5, upon expiration of
the period described in subsection b. of this Section 5 during which the Company
is obligated to keep the registration statement effective, the Company shall
have the right to deregister any Registrable Securities which have not been sold
prior to such date. In addition, each Holder acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus
included in such registration statement until such time as an amendment to the
registration statement has been filed by the Company and declared effective by
the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. 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 5, will forthwith discontinue
disposition of the Registrable Securities until the Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by the first
sentence of this paragraph, subsection d. of this Section 5, 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
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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 the Holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. The Company will use commercially reasonable efforts to amend or
supplement as necessary its registration statement to permit the sale of the
Registrable Securities to resume as soon as practicable, but in any event not
later than 90 days after it has given the notice referred to in the preceding
sentence. If the Company shall give any such notice, the time periods mentioned
in subsection b. of this Section 5 and elsewhere herein 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 the first sentence of this
paragraph, subsection d. of this Section 5 hereof, or the notice that they may
resume use of the prospectus.
Section 6. REFERENCE TO HOLDERS 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 (i) 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 (ii) 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 7. REQUIRED REGISTRATION EXPENSES. All Registration Expenses
incident to the Company's performance of the Required Registration, pursuant to
this Agreement, except underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities and any out-of-pocket expenses (including,
without limitation, the fees and disbursements of Holders' counsel) of the
Holders of the Registrable Securities, will be borne by the Company.
Section 8. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless each Holder of Registrable Securities and each Person who
controls such Holder (within the meaning of the Securities Act), and any Agent
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 together with the documents incorporated by reference
therein, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as any such Liabilities arise out of or are based
upon any untrue statement or omission 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
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such Holder of Registrable Securities or to such other extent as the Company and
such underwriters may agree.
Section 9. 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 Liabilities 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. The
indemnification provided for in this section shall be several, and not joint,
for each Holder, and shall be limited to the net dollar amount received by each
such Holder.
Section 10. 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 (provided the failure to so notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party so long as the failure to so notify the indemnifying party
does not prejudice the indemnifying party's ability to defend any such action,
suit, investigation, proceeding or claim) 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 11. CONTRIBUTION. If the indemnification provided for in Sections
8 and 9 from the indemnifying party is unavailable or insufficient to hold
harmless to an indemnified party
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hereunder in respect of any losses, claims, damages, liabilities, or expenses
(including reasonable costs of investigation) referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities, or expenses (including reasonable
costs of investigation) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions or omissions which resulted in such losses, claims, damages,
liabilities, or expenses (including reasonable costs of investigation), 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 or omission or alleged omission to
state 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, untrue statement or omission. 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 10, 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 11 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 this 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 8, 9, 10
and 11 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 such Holders. Notwithstanding anything in this Section 12 to the
contrary, no Holder shall be required to contribute any amount in excess of the
net dollar amount received by such Holder from the sale of the Registrable
Securities.
Section 12. NO OBLIGATION FOR UNDERWRITTEN REGISTRATIONS. Notwithstanding
any statement contained herein to the contrary, or seemingly to the contrary,
the Company is under no obligation to cooperate with the Holders in connection
with any underwritten offering.
Section 13. RULE 144.
a. 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).
b. Subject to the conditions of this Section 13, the Company further
covenants that it will take such other action as any Holder of Registrable
Securities may reasonably request, all to the
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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 (i) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (ii) 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.
c. The Company covenants that at such time any Holder is permitted to sell
Registrable Securities without registration under the Securities Act within the
limitations of the exemption provided under Rule 144(k) under the Securities
Act, as such Rule may be amended from time to time, the Company shall, upon
request of any such Holder and to the extent the Company is otherwise legally
permitted to do so, remove the restrictive legend set forth on any certificate
evidencing such Holder's Registrable Securities. Any Holder shall only be
permitted to make a single request for the removal of such restrictive legend in
accordance with the foregoing provisions.
d. If at any time any Holder shall seek to transfer any Registrable
Securities other than pursuant to the registration statement filed by the
Company pursuant to Section 2 hereof while the certificates evidencing such
Registrable Securities contain a legend restricting the transfer thereof, such
Holder shall, at such Holder's cost and expense, provide an opinion of counsel
reasonably acceptable to CGX together with such other representations and
requests for transfer as may be reasonably required in connection therewith;
provided, however, that (i) the Company shall provide any opinions required of
the Company in connection with any transfer of the Registrable Securities to a
Permitted Transferee pursuant to clause (i) of Section 16 below, and (ii) if the
registration statement filed by the Company pursuant to Section 2 hereof does
not become effective within 60 days of its filing for any reason other than the
fault of a Holder, the Company shall provide, to the extent practicable,
opinions of counsel as may be reasonably required in connection with any such
transfer of the Registrable Securities.
Section 14. 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 15. 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 16. COMPANY TRADING POLICIES. Each Holder executing this Agreement
acknowledges and agrees that any transactions involving the Registrable
Securities and other Common Stock of the Company (including, without limitation,
any purchase, sale, exchange, short
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sales, options, puts and calls and other transactions involving the Common Stock
or derivatives thereof) are subject to the Company's insider trading policy (the
"Trading Policy") as of the date hereof (a copy of which is attached) while such
Holder is an officer, director or employee of Graphic Technology of Maryland,
Inc. (f/k/a Graphtec Acquisition Co.), or any affiliate thereof including,
without limitation, the Company and its subsidiaries. Notwithstanding the
foregoing, (i) the Company hereby consents to the following actions: (A) the
Holders executing this Agreement may, subject to applicable securities laws and
at any time prior to the filing of the registration statement for the Required
Registration, transfer shares of the Registrable Securities to any broker,
dealer, or affiliate thereof in connection with a hedge, private collar or other
similar transaction (a "Hedge Transaction"), and (B) the Holders executing this
Agreement may, subject to applicable securities laws and during the period
commencing on the date hereof and expiring on the date which is 30 days
following the Effective Date, enter into a Hedge Transaction with any such
broker, dealer or affiliate thereof; and (ii) the Holder shall not be required
to obtain prior clearance from the Company under Section IV of the Trading
Policy with respect to any sale of the Registrable Securities under an effective
registration statement for the Required Registration during such times as the
Holder, having not received any notice from the Company of the happening of any
event of the kind described in subsection d. of Section 5 hereof, is permitted
to use the prospectus included in such registration statement; provided,
however, that the Holder shall continue to be subject to all other terms and
provisions of the Trading Policy including, without limitation, the obligation
under Section IV thereof to provide to the Secretary of the Company a signed
statement setting forth the information and representations regarding the
proposed sale as required under such Section IV.
Section 17. 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.
5858 Westheimer, Suite 200
Houston, Texas 77057
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 HOLDER: A. William Harrison, Jr.
11201 McGee Way
Ellicott City, Maryland 21042
IF TO HOLDER: David E. Rosquist
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3603 Broadleaf Court
Glenwood, Maryland 21738
IF TO HOLDER: Marriott Winchester, Jr.
379 Broadview Lane
Annapolis, Maryland 21401
WITH A COPY TO: David H. Pankey
McGuire, Woods, Battle & Boothe, L.L.P.
The Army and Navy Club Building
1627 Eye Street, N.W.
Washington, D.C. 20006-4007
IF TO ANY PERSON OTHER THAN HOLDER:
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 18. 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 Maryland, without giving effect to the
principles of conflicts of laws thereof.
Section 19. AMENDMENT AND WAIVER. This Agreement may be amended, and the
provisions hereof may be waived, only by a written instrument signed by (i) the
Holders of a majority of the Registrable Securities and (ii) 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 20. 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 20, 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 and experts.
Section 21. 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
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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 22. 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 23. HEADINGS. The section and paragraph headings have been
inserted for purposes of convenience of reference only and shall not be used for
interpretive purposes.
Section 24. 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 except for an
assignment of a Holder's rights hereunder to a Permitted Transferee, no Holder
who is a natural person may make an INTER-VIVOS transfer or assignment and no
other Holder may make any transfer or assignment of any rights under this
Agreement.
Section 25. 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 26. INFORMATION. So long as the Holders own Registrable
Securities, the Holders agree to use commercially reasonable efforts deliver to
the Company, upon request, such information about the Holders and the Holders'
holdings of Registrable Securities as the Company may reasonably request as is
necessary to permit the Company to prepare and file its annual report on Form
10-K and its proxy statements under the Exchange Act and any filings under the
Securities Act. The Holders further agree to report to the Company any sale or
disposition of any kind relating to the Holders' Registrable Securities.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CONSOLIDATED GRAPHICS, INC.
By:/s/G. CHRISTOPHER COLVILLE
G. Christopher Colville,
Executive Vice President -
Mergers and Acquisitions
/s/A. WILLIAM HARRISON, JR.
A. William Harrison, Jr.
/s/DAVID E. ROSQUIST
David E. Rosquist
/s/MARRIOTT WINCHESTER, JR.
Marriott Winchester, Jr.
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT 10.4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of November
9, 1998, by and among Consolidated Graphics, Inc., a Texas corporation (the
"Company") and McKay Communications, Inc. (the "Holder").
W I T N E S S E T H :
WHEREAS, it is a condition to the consummation of the transactions
contemplated by that certain Agreement and Plan of Reorganization by and among
the Company, McKay Acquisition Company, a Michigan corporation ("Newco"), The
McKay Press, Inc., a Michigan corporation, and the Holder dated as of November
9, 1998 (the "Merger Agreement") that this Agreement be executed and delivered
by the Company to the Holder;
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 Holder 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 a day on
which the New York Stock Exchange is not open for business.
COMMISSION shall mean the Securities and Exchange Commission.
COMMON STOCK shall mean the Company's common stock, par value $.01 per
share, or any successor class of the Company's common stock.
COMPANY shall mean Consolidated Graphics, Inc.
EFFECTIVE DATE shall mean the date upon which the Merger becomes
effective.
EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended.
INSPECTORS shall mean the Holder, any underwriter participating in any
disposition of Registrable Securities pursuant to the Required Registration and
any attorney, accountant or other agent retained by such Holder or underwriter.
LIABILITIES shall mean all losses, claims, damages, liabilities, whether
joint or several, and expenses (including, but not limited to, reasonable costs
of investigation, expert witness, appraisal
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and other professional fees) and any amount paid in any settlement effected with
the Company's consent.
MERGER AGREEMENT shall mean that certain Agreement and Plan of
Reorganization by and among the Company, Newco, The McKay Press, Inc. and the
Holder dated as of November 9,1998.
NEW COMMON STOCK shall mean the shares of Common Stock of the Company to
be acquired by the Holder pursuant to the Merger Agreement.
PERSON shall mean any individual, corporation, limited liability company,
partnership (general or limited), 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.
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 for so long as such New Common Stock and/or Related Securities are
held by the Holder until such time as the New Common Stock and the Related
Securities have been (i) distributed to the public pursuant to a registration
statement covering such securities that has been declared effective under the
Securities Act, or (ii) sold in accordance with the provisions of Rule 144 (or
any similar provision then in force) under the Securities Act.
REGISTRATION EXPENSES shall mean all expenses incident to the Company's
performance of or compliance with the Required 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 the Company's counsel in connection with
blue sky qualifications of the Registrable Securities), rating agency fees,
printing expenses (including the printing of prospectuses), messenger and
delivery expenses, internal expenses (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, the fees and expenses
of any special experts retained by the Company in connection with such
registration, underwriting fees, discounts or commissions attributable to the
sale of Registrable Securities, and all out-of-pocket expenses of the Holder
(including, without limitation, the fees and disbursements of Holder's counsel)
arising out of or in connection with the Required Registration.
RELATED ACQUISITIONS shall mean the three (3) transactions contemplated by
those three (3) certain letters of intent dated July 29, 1998 between the
Company and (i) Richard Royle, et al, (ii) Bill Harrison, et al, and (iii) John
T. Gowland, et al.
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<PAGE>
RELATED SECURITIES shall mean any securities issued in exchange for (or
upon the conversion or exercise of any convertible security, warrant or stock
option) as a dividend on or in replacement of, or otherwise issued in respect
of, or in replacement for (including securities issued in a stock dividend,
split or recombination or pursuant to the exercise of preemptive rights), the
New Common Stock.
REQUIRED REGISTRATION shall mean the registration with the Commission and
all applicable state securities agencies pursuant to Section 2 hereof of the
offer and sale of the Registrable Securities under and in accordance with the
provisions of the Securities Act and as set forth in Section 2 of this
Agreement.
SECURITIES ACT shall mean the Securities Act of 1933, as amended.
Section 2. REQUIRED REGISTRATION.
a. Subject to the terms and conditions contained in this Agreement, the
Company shall file with the Commission a registration statement on Form S-3
under Rule 415 of the Securities Act covering the offer and sale of all of the
Registrable Securities held by the Holder under and in accordance with the
provisions of the Securities Act.
b. The Company shall file a registration statement for the offer and sale
of the Registrable Securities on or before the sooner to occur of (i) thirty
(30) calendar days following the Effective Date, or (ii) five (5) calendar days
following the last closing date of the Related Acquisitions; provided, however,
that if each of the Related Acquisitions has closed and the registration
statement(s) covering the resale of the Common Stock issued in connection
therewith has been declared effective prior to the Effective Date, this clause
(ii) shall no longer be effective and the filing of the registration statement
by the Company shall occur no later than thirty (30) days following the
Effective Date.
c. If the Required Registration is an underwritten offering, the Holder(s)
of a majority of the Registrable Securities to be included in the Required
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 3. RESTRICTIONS ON PUBLIC SALE BY HOLDER OF REGISTRABLE
SECURITIES. To the extent not inconsistent with applicable law, if the
Registrable Securities held by the Holder are included in a registration
statement pursuant to this Agreement, the Holder 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
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<PAGE>
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 4. COOPERATION BY HOLDER. The offering of Registrable Securities
by the Holder shall comply in all material respects with the applicable terms,
provisions and requirements set forth in this Agreement, and Holder shall timely
provide the Company with all information and materials required to be included
in a registration statement and that relate to the offering of the Registrable
Securities of 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 the Holder if the Holder 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 the Holder fails to furnish such information and as a result thereof,
(i) the Holder's Registrable Securities are not included in the registration
statement at the time it becomes effective, or (ii) such Required Registration
shall not become effective under the Securities Act then, in either such event,
the Holder shall have no further rights under this Agreement to require the
registration of the Holder's Registrable Securities nor shall the Holder have
any right to request inclusion of the Holder's Registrable Securities in a
future registration with respect to the Company's Common Stock.
Section 5. REGISTRATION PROCEEDINGS. In connection with the Required
Registration, the Company will act as expeditiously as possible to:
a. prepare and file with the Commission and all applicable state
securities agencies a registration statement within the applicable period
provided in Section 2 which includes the Registrable Securities and use
commercially reasonable efforts to cause such registration statement to become
effective as soon as practicable; 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 Holder and the
underwriters, if any, draft copies of all such documents proposed to be filed at
least three (3) Business Days prior thereto, which documents will be subject to
the reasonable review of the Holder and underwriters, if any, 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 the Holder or the underwriters, if any, with respect to the Holder's
Registrable Securities covered by such registration statement, shall reasonably
object, and will notify the Holder of any stop order issued or threatened by the
Commission and any applicable state securities agencies 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 and any applicable state
securities agencies such amendments and post-effective amendments to the
registration statement as may be necessary to keep the registration statement
effective for such period until the Holder can distribute such Registrable
Securities without regard to the volume limitations contained in Rule 144(d)
under the Securities Act 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
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90-day period referred to in Section 4(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 and all applicable state securities laws 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;
c. furnish to the Holder and the underwriter or underwriters, if any,
without charge, such number of conformed copies of the registration statement
and any post-effective amendment thereto (including exhibits) 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 the Holder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities being sold by the
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
the Holder with respect to the Registrable Securities covered by the
registration statement and the underwriter or underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
the prospectus or any amendment or supplement thereto); provided, however, that
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company will furnish to counsel selected by the Holder
copies of all documents proposed to be filed which documents will be subject to
the review of such counsel;
d. notify the Holder, 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 all
applicable state securities agencies and furnish a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
e. use commercially reasonable efforts to cause all Registrable Securities
included in such registration statement to be listed, by the date of the first
sale of Registrable Securities pursuant to such registration statement, on each
securities exchange (including, for this purpose, The New York Stock Exchange)
on which the Common Stock of the Company is then listed or proposed to be
listed, if any;
f. make generally available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act no later than
45 days after the end of the 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 stop
order, order suspending the effectiveness of the registration statement at the
earliest possible moment;
h. if reasonably requested by the managing underwriter or underwriters or
the 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 the Holder requests
to be included therein, including without limitation, with respect to the number
of Registrable Securities being sold by the Holder to such underwriter or
underwriters, the purchase price being paid therefor by such underwriter or
underwriters and any other terms of the underwritten offering of such
Registrable Securities, and promptly make all required filings of such
prospectus supplement or post-effective amendment;
i. as promptly as practicable after filing with the Commission of any
document which is incorporated by reference into a registration statement,
deliver a copy of such document to the Holder of Registrable Securities covered
by such registration statement;
j. on or before the date on which the registration statement is declared
effective, use commercially reasonable efforts to register or qualify, and
cooperate with the Holder 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 the 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, however, 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 Holder 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 the Holder
may request, subject to the underwriters' obligation to return to the Holder any
certificates representing securities not sold;
l. use commercially reasonable efforts to cause the Registrable Securities
covered by the registration statement to be registered with or approved by such
other governmental agencies or
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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. deliver to the Holder and its counsel and the managing underwriter or
underwriters, if any, copies of all correspondence related to the offering
between the Commission, the Company and its counsel;
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
respond to all reasonable inquiries from, and 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.
Notwithstanding the foregoing provisions of this Section 5, upon expiration of
the period described in subsection b. of this Section 5 during which the Company
is obligated to keep the registration statement effective, the Company shall
have the right to de-register any Registrable Securities which have not been
sold prior to such date. In addition, the Holder acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus
included in such registration statement until such time as an amendment to the
registration statement has been filed by the Company and declared effective by
the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. The 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 5, will forthwith discontinue
disposition of the Registrable Securities until the Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by the first
sentence of this paragraph, subsection d. of this Section 5, 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,
the 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 the Holder's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice. The Company will use commercially reasonable
efforts to amend or supplement, as necessary, its registration statement to
permit the sale of the Registrable Securities to resume ninety (90) days after
it has given the notice referred to in the preceding sentence. If the Company
shall give any such notice, the time periods mentioned in subsection b. of this
Section 5 and elsewhere herein 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 the first sentence of this paragraph,
subsection d. of this Section 5 hereof, or the notice that they may resume use
of the prospectus.
Section 6. REFERENCE TO HOLDER IN REGISTRATION STATEMENT. If such
registration statement refers to the Holder by name or otherwise as the holder
of any securities of the Company, then
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the Holder shall have the right to require (i) the insertion therein of
language, in form and substance satisfactory to the Holder, to the effect that
the holding by the Holder of such securities is not to be construed as a
recommendation of the Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that the Holder
will assist in meeting any future financial requirements of the Company, or (ii)
if such reference to the 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 the Holder.
Section 7. REQUIRED REGISTRATION EXPENSES. All Registration Expenses
incident to the Company's performance of the Required Registration, pursuant to
this Agreement, except underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities and any out-of-pocket expenses (including,
without limitation, the fees and disbursements of Holder's counsel) of the
Holder of the Registrable Securities, will be borne by the Company.
Section 8. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Holder and each Person who controls the Holder (within the
meaning of the Securities Act), and any Agent 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
together with the documents incorporated by reference therein, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as any such Liabilities arise out of or are based upon any untrue
statement or omission 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 Holder of
Registrable Securities or to such other extent as the Company and such
underwriters may agree.
Section 9. INDEMNIFICATION BY HOLDER. In connection with any registration
statement in which the Holder is participating, the Holder will furnish to the
Company in writing such information with respect to the name and address of the
Holder and the amount of Registrable Securities held by the 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 Liabilities 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 the Holder so furnished in writing by the Holder
specifically for inclusion in any prospectus or registration statement. The
indemnification provided for in this section shall be limited to the net dollar
amount received by the Holder.
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Section 10. 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 (provided the failure to so notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party so long as the failure to so notify the indemnifying party
does not prejudice the indemnifying party's ability to defend any such action,
suit, investigation, proceeding or claim) 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 11. CONTRIBUTION. If the indemnification provided for in Sections
8 and 9 from the indemnifying party is unavailable or insufficient to hold
harmless to an indemnified party hereunder in respect of any losses, claims,
damages, liabilities, or expenses (including reasonable costs of investigation)
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities, or
expenses (including reasonable costs of investigation) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified parties in connection with the actions or omissions which resulted
in such losses, claims, damages, liabilities, or expenses (including reasonable
costs of investigation), 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 or omission
or alleged omission to state 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, untrue statement or omission. 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 10, 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 11 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 this paragraph. No Person guilty of
fraudulent misrepresentation (within the
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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 8, 9, 10
and 11 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 Holder
of Registrable Securities under this Agreement, or create additional obligations
of the Holder not set forth herein, except as otherwise expressly agreed in
writing by the Holder.
Section 12. NO OBLIGATION FOR UNDERWRITTEN REGISTRATIONS. Notwithstanding
any statement contained herein to the contrary, or seemingly to the contrary,
the Company is under no obligation to cooperate with the Holder in connection
with any underwritten offering.
Section 13. RULE 144.
a. 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 the Holder of
Registrable Securities, make publicly available other nonconfidential
information so long as necessary to permit sales under Rule 144 under the
Securities Act).
b. Subject to the conditions of this Section 13, the Company further
covenants that it will take such other action as the Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable the Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144 under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the Commission. Upon
the request of the Holder, the Company will deliver to the Holder a written
statement as to whether it has complied with such requirements.
c. The Company covenants that at such time the Holder is permitted to sell
Registrable Securities without registration under the Securities Act within the
limitations of the exemption provided under Rule 144(k) under the Securities
Act, as such Rule may be amended from time to time, the Company shall, upon
request of the Holder and to the extent the Company is otherwise legally
permitted to do so, remove the restrictive legend set forth on any certificate
evidencing the Holder's Registrable Securities. The Holder shall only be
permitted to make a single request for the removal of such restrictive legend in
accordance with the foregoing provisions.
d. If at any time the Holder shall seek to transfer any Registrable
Securities other than pursuant to the registration statement filed by the
Company pursuant to Section 2 hereof while the certificates evidencing such
Registrable Securities contain a legend restricting the transfer hereof, Holder
shall, at the Holder's cost and expense, provide an opinion of counsel
reasonably acceptable to CGX together with such other representations and
requests for transfer as may be reasonably required in connection therewith;
provided, however, that if the registration statement filed by the Company
pursuant to Section 2 hereof does not become effective within sixty (60) days of
its filing for any reason other than the fault of the Holder, the Company shall
provide, to
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the extent practicable, opinions of counsel as may be reasonably required in
connection with any such transfer of the Registrable Securities.
Section 14. 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 15. 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 16. 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.
5858 Westheimer, Suite 200
Houston, Texas 77057
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 HOLDER: McKay Communications, Inc.
P. O. Box 648
217 E. Main Street
Midland, Michigan 48640-648
WITH A COPY TO: William C. Collins
Currie Kendall Polasky Meisel, PLC
P. O. Box 2765
6024 Eastman Avenue
Midland, Michigan 48641-2765
AND TO: William R. Hopkins, Jr.
11778 E. Cortez
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Scottsdale, AZ 85259
IF TO ANY PERSON OTHER THAN HOLDER:
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 17. 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 18. AMENDMENT AND WAIVER. This Agreement may be amended, and the
provisions hereof may be waived, only by a written instrument signed by the
Holder and 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 19. 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 19, 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 20. 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 21. 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.
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Section 22. HEADINGS. The section and paragraph headings have been
inserted for purposes of convenience of reference only and shall not be used for
interpretive purposes.
Section 23. 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 assigns, and is not intended to confer upon any other Person any
right or remedies hereunder; provided, however, that Holder may not make any
transfer or assignment of any rights under this Agreement without the prior
written consent of the Company.
Section 24. 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 25. INFORMATION. So long as the Holder owns Registrable
Securities, the Holder agrees to use commercially reasonable efforts to deliver
to the Company, upon request, such information about the Holder and the Holder's
holdings of Registrable Securities as the Company may reasonably request as is
necessary to permit the Company to prepare and file its annual report on Form
10-K and its proxy statements under the Exchange Act and any filings under the
Securities Act. The Holder further agrees to report to the Company any sale or
disposition of any kind relating to the Holder's Registrable Securities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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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/G. CHRISTOPHER COLVILLE
G. Christopher Colville
Executive Vice President -
Mergers and Acquisitions
McKAY COMMUNICATIONS, INC.
By:/s/WILLIAM R. HOPKINS, JR.
William R. Hopkins, Jr.
Chairman
By:/s/JOHN T. DOERING
John T. Doering
President
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in Amendment No. 1 of this Registration Statement on Form S-3
(Registration # 333-65677), of our report dated May 8, 1998, included in the
Consolidated Graphics, Inc. Annual Report on Form 10-K for the year ended March
31, 1998, and to all references to our Firm included in this Registration
Statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Houston, Texas
December 2, 1998
