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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 26, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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F.Y.I. INCORPORATED
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 7389 75-2560895
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification Number)
organization)
</TABLE>
3232 MCKINNEY AVENUE, SUITE 900
DALLAS, TEXAS 75204
(214) 953-7555
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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ED H. BOWMAN, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
F.Y.I. INCORPORATED
3232 MCKINNEY AVENUE, SUITE 900
DALLAS, TEXAS 75204
(214) 953-7555
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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Copy to:
<TABLE>
<C> <C>
MARGOT T. LEBENBERG, ESQ. CHRISTOPHER T. JENSEN, ESQ.
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL MORGAN, LEWIS & BOCKIUS LLP
F.Y.I. INCORPORATED 101 PARK AVENUE
3232 MCKINNEY AVENUE, SUITE 900 NEW YORK, NEW YORK 10178
DALLAS, TEXAS 75204 (212) 309-6000
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
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If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value........ 2,500,000 $21.00(1) $52,500,000(1) $15,909(2)
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act of 1933, as amended, and based on
the closing price of the Common Stock reported on the Nasdaq National Market
on March 25, 1997.
(2) Pursuant to Rule 429 under the Securities Act of 1933, as amended, 918,701
shares and the filing fee of $5,465 paid with respect to those shares are
being carried forward from Registration Statement No. 333-1084 to this
Registration Statement. Therefore, a registration fee of $10,444 is being
paid in connection with the filing of this Registration Statement.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 26, 1997
2,500,000 SHARES
F.Y.I. INCORPORATED
COMMON STOCK
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This Prospectus covers 2,500,000 shares (the "Shares") of common stock, $.01
par value (the "Common Stock"), which may be offered and issued by F.Y.I.
Incorporated (the "Company" or "F.Y.I.") from time to time, in connection with
the merger with or acquisition by the Company of other businesses or assets, and
which may be reserved for issuance pursuant to, or offered and issued upon
exercise or conversion of, warrants, options, convertible notes or other similar
instruments issued by the Company from time to time in connection with any such
merger or acquisition.
It is expected that the terms of acquisitions involving the issuance of
securities covered by this Prospectus will be determined by direct negotiations
with the owners or controlling persons of the businesses or assets to be merged
with or acquired by the Company, and that the shares of Common Stock issued will
be valued at prices reasonably related to market prices current either at the
time the terms of a merger or acquisition are agreed upon or at or about the
time of delivery of shares. No underwriting discounts or commissions will be
paid, although finder's fees may be paid from time to time with respect to
specific mergers or acquisitions. Any person receiving any such fees may be
deemed to be an underwriter within the meaning of the Securities Act of 1933, as
amended (the "Securities Act").
This Prospectus, as appropriately amended or supplemented, may be used from
time to time by persons who have received any of the Shares in acquisitions made
by the Company of other businesses or properties, or their transferees, and who
wish to offer and sell such Shares (such persons are herein referred to,
individually, as a "Selling Stockholder" and, collectively, as "Selling
Stockholders") in transactions in which they and any broker-dealer through whom
such Shares are sold may be deemed to be underwriters within the meaning of the
Securities Act. The Company will receive none of the proceeds from any such
sales. There presently are no arrangements or understandings, formal or
informal, pertaining to the distribution of the Shares. Upon the Company being
notified by a Selling Stockholder that any material arrangement has been entered
into with a broker-dealer from the sale of Shares bought through a block trade,
special offering, exchange distribution or secondary distribution, a
supplemented Prospectus will be filed, pursuant to Rule 424(b) under the
Securities Act, setting forth (i) the name of each Selling Stockholder and the
participating broker-dealer(s), (ii) the number of Shares involved, (iii) the
price at which the Shares were sold, (iv) the commissions paid or the discounts
allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information set
forth in this Prospectus and (vi) other facts material to the transaction.
Selling Stockholders may sell the Shares being offered hereby from time to
time in transactions (which may involve crosses and block transactions) on the
Nasdaq National Market, in negotiated transactions or otherwise, at market
prices prevailing at the time of the sale or at negotiated prices. Selling
Stockholders may sell some or all of such Shares in transactions involving
broker-dealers, who may act solely as agent and/or may acquire Shares as
principal. Broker-dealers participating in such transactions as agent may
receive commissions from Selling Stockholders (and, if they act as agent for the
purchaser of any such Shares, from such purchaser), such commissions computed in
appropriate cases in accordance with the applicable rules of the Nasdaq National
Market, which commissions may be at negotiated rates where permissible under
such rules. Participating broker-dealers may agree with Selling Stockholders to
sell a specified number of Shares at a stipulated price per share and, to the
extent any such broker-dealer is unable to do so acting as an agent for a
Selling Stockholder, to purchase as principal any unsold Shares at the price
required to fulfill the broker-dealer's commitment to such Selling Stockholder.
In addition or alternatively, Shares may be sold by Selling Stockholders and/or
by or through other broker-dealers in special offerings, exchange distributions
or secondary distributions pursuant to and in compliance with the governing
rules of the Nasdaq National Market. Broker-dealers who acquire Shares as
principal may thereafter resell such Shares from time to time in transactions
(which may involve crosses and block transactions and which may involve sales to
or through other broker-dealers, including transactions of the nature described
in the preceding two sentences) on the Nasdaq National Market, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such resales may pay to or receive
commissions from the purchase of such Shares. Any commissions paid or
concessions allowed to any broker-dealer, and, if any broker-dealer purchases
such Shares as principal, any profits received on the resale of such Shares, may
be deemed to be underwriting discounts and commissions under the Securities Act.
The Company may agree to indemnify each Selling Stockholder as an
underwriter under the Securities Act against certain liabilities, including
liabilities arising under the Securities Act. Each Selling Stockholder may
indemnify any broker-dealer that participates in transactions involving sales of
the Shares against certain liabilities, including liabilities arising under the
Securities Act.
The Company has previously issued 1,081,299 shares of Common Stock pursuant
to its Registration Statement on Form S-1 (Registration Statement No. 333-1084).
Of such issued shares, 36,670 shares of Common Stock are held by a wholly-owned
subsidiary of the Company. 918,701 shares are being carried forward to the
Company's Registration Statement on Form S-4 of which this Prospectus is a part.
The Common Stock is included for quotation on the Nasdaq National Market. On
March 25, 1997, the closing price of the Common Stock on the Nasdaq National
Market was $21.00 per share as published in The Wall Street Journal on March 26,
1997.
Printing and certain legal, filing and similar expenses of any offering made
hereunder will be paid by the Company. Selling Stockholders will bear all other
expenses of any offering made by them pursuant to this Prospectus, including
brokerage fees and underwriting discounts or commissions. The Company is a
Delaware corporation and all references herein to the Company refer to the
Company and its subsidiaries.
THE COMMON STOCK OFFERED HEREBY INVOKES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 5 HEREOF.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 1997
<PAGE> 3
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
THE COMPANY BY CONTACTING INVESTOR RELATIONS, 3232 MCKINNEY AVENUE, SUITE 900,
DALLAS, TEXAS 75204 (TELEPHONE NUMBER (214) 953-7555). IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD ALLOW AT LEAST FIVE (5) BUSINESS
DAYS FOR DELIVERY.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza Building,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and its regional
offices located at 7 World Trade Center, 13th Floor, New York, New York 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such materials can be obtained from the Commission at
Judiciary Plaza, 450 Fifth Street, N.W. Washington, D.C. 20549, at prescribed
rates. The Commission maintains an Internet Web site that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the Commission. The address of that site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-4 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and such Common Stock, reference is made
to such Registration Statement and exhibits. A copy of the Registration
Statement on file with the Commission may be obtained from the Commission's
principal office in Washington, D.C. upon payment of the fees prescribed by the
Commission and through the Commission's Internet Web site.
The Company's Common Stock is listed on the Nasdaq National Market. Proxy
statements and other information concerning the Company can also be inspected at
the offices of the Nasdaq National Market, 1735 K Street, Washington D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents of the Company (Commission File No. 0-27444) filed
with the Commission are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 filed with the Commission on March 11, 1997; and
(b) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
December 22, 1995.
In addition, all reports and other documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
subsequent to the date of effectiveness of the Registration Statement of which
this Prospectus is a part and prior to the termination of the offering made
hereby shall be deemed to be incorporated or deemed to be incorporated by
reference into this Prospectus. Any statement contained herein or incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of such
person, a copy of any and all of the information that has been or may be
incorporated by reference in this Prospectus (not including exhibits to the
information that is
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incorporated by reference unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Written
requests for such copies should be directed to F.Y.I. Incorporated, 3232
McKinney Avenue, Suite 900, Dallas, Texas 75204, Attention: Investor Relations.
Telephone requests may be directed to the Secretary at (214) 953-7555.
THE COMPANY
F.Y.I. Incorporated was founded in September 1994 to create a national,
single source provider of document management services to three primary client
segments: healthcare institutions, professional services firms and financial
institutions. The Company's primary strategy is to consolidate the highly
fragmented document management services industry through acquisitions. In
January 1996, F.Y.I. acquired, simultaneously with the closing of its initial
public offering (the "IPO"), seven document management services businesses (the
"Founding Companies"). Since the IPO and through December 31, 1996, the Company
acquired 18 additional companies (the "Subsequent Acquisitions"). Since December
31, 1996, the Company has acquired three additional companies, for a total of 28
acquisitions since the Company's inception. In December 1996, the Company
completed a public offering of 2,783,000 shares of Common Stock (including
420,000 shares of Common Stock sold by selling stockholders) (the "December
Offering"). The proceeds from the December Offering were used to repay the
outstanding balance on its line of credit, to pay a portion of consideration for
acquisitions and to retire indebtedness assumed in acquisitions. The remaining
proceeds are to be used for general corporate purposes, which are expected to
include additional acquisitions. As a result of the Subsequent Acquisitions
combined with internal growth, the Company's revenue has increased from $47.6
million for the year ended December 31, 1995 to $75.7 million for the year ended
December 31, 1996 ($102.9 million on a pro forma basis, assuming all significant
acquisitions were completed on January 1, 1996). The Company intends to continue
to aggressively pursue strategic acquisitions in existing and new markets,
cross-sell its full range of services to its current customer base and expand
the marketing of its services to new customers.
An estimated four trillion documents are generated annually in the United
States. The Company's three targeted client segments generate large volumes of
documents and require specialized processing, distribution, storage and
retrieval of these documents and the information they contain. The Company
believes that these client segments will continue to increase their outsourcing
of document management services in order to maintain their focus on core
operating competencies and revenue generating activities, reduce fixed costs,
including labor and equipment costs, and gain access to new technologies without
incurring the expense and risk of near-term obsolescence of such technologies.
While the document management requirements of each target client segment
require relatively unique and specialized services, the Company offers document
management services that are transferable across client segments, such as: (i)
document and data conversion services, including microfilm and microfiche
services and electronic imaging services; (ii) records management services,
namely active storage and maintenance of documents and files and archival
storage of inactive documents; and (iii) database management and related
services, including data entry, direct mail and fulfillment services. In
addition, in order to accommodate the document management needs of targeted
client segments, the Company also offers industry specific services, such as:
(i) medical records release services, namely processing requests for patients'
medical records from physicians, insurers, attorneys, healthcare institutions
and individuals; and (ii) litigation support services. The Company also derives
revenue from the sale of certain micrographic and business imaging products.
The Company believes that there are significant opportunities to
consolidate the capabilities and resources of a number of existing document
management services businesses with the intent of providing customers with a
single source document management solution. Accordingly, the Company is pursuing
a "fill-in-the-grid" strategy aimed at providing comprehensive document
management services based on the demands of the given geographical market. The
Company has implemented an aggressive, three-tiered acquisition program
consisting of "beachhead acquisitions" to enter additional targeted markets,
"service expansion acquisitions" to acquire additional service capabilities
within such markets and "tuck-in" acquisi-
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tions to gain market share. The Company believes that it will continue to be an
attractive acquiror of other document management services companies due to its
strategy of retaining selected owners and management of acquired companies, its
access to growth capital and its ability to offer sellers cash for their
business as well as an ongoing equity stake in the Company.
The Company believes that the consolidation of document management services
businesses will provide it with a significant competitive advantage over
existing smaller competitors. As the Company gains critical mass in certain
geographic markets, it expects to be able to capitalize on its existing client
relationships, technical expertise, additional operating efficiencies, enhanced
marketing initiatives and national account programs to vertically integrate by
expanding the services offered to each of its client segments and horizontally
integrate by offering certain transferable services to a larger overall customer
base.
The Company is a Delaware corporation. Its executive offices are located at
3232 McKinney Avenue, Suite 900, Dallas, Texas 75204, and its telephone number
is (214) 953-7555.
RECENT DEVELOPMENTS
Acquisition Activity. Since the closing of the December Offering, the
Company has acquired the following document management services businesses (the
"Recent Acquisitions"): (i) Deliverex of Seattle, a medical records storage
business expanding the Company's presence in the State of Washington; (ii)
Researchers Litigation Support, L.L.C., a litigation support business based in
Arizona, which provides services to law firms in California, Arizona,
Washington, Georgia and New York; (iii) The Rust Consulting Group, Inc., also a
litigation support business with offices in Virginia, Texas and Minnesota; (iv)
Acadian Consultants, Inc., a medical records release business in Louisiana; (v)
Computer Central Corporation, a data entry business with facilities in Missouri
and Ohio; and (vi) Deliverex of San Francisco, a medical records storage
business expanding the Company's presence in the Pacific Northwest. The
aggregate consideration for the Recent Acquisitions consisted of approximately
$6.6 million in cash and 224,564 shares of Common Stock.
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RISK FACTORS
Prospective purchasers of the Common Stock offered hereby should consider
carefully the specific factors set forth below as well as the other information
set forth in this Prospectus in evaluating an investment in the Company.
LIMITED OPERATING HISTORY; RISKS OF INTEGRATION; ABILITY TO MANAGE GROWTH
F.Y.I. was founded in September 1994 and conducted no operations prior to
the consummation of the IPO. F.Y.I. acquired the Founding Companies
simultaneously with the closing of the IPO and has acquired 21 additional
companies since that time (together with the Founding Companies, the "Operating
Companies"). Prior to their acquisition, these companies operated as separate
independent entities. Currently, the Company has a decentralized financial
reporting system and relies on the existing reporting systems of the Operating
Companies. The success of the Company will depend, in part, on the Company's
ability to integrate the operations of the Operating Companies, including
centralizing certain functions to achieve cost savings and developing programs
and processes that will promote cooperation and the sharing of opportunities and
resources. F.Y.I.'s management group has been assembled recently and had no
previous experience in the document management services industry. There can be
no assurance that the management group will effectively be able to oversee the
combined entity and implement the Company's operating or growth strategies.
Further, to the extent that the Company is able to implement fully its
acquisition strategy, the resulting growth of the Company will place significant
demands on management and on the Company's internal systems and controls. There
can be no assurance that the recently assembled management group will
effectively be able to direct the Company through a period of significant
growth. In addition, no assurance can be given that the Company's current
systems will be adequate for its future needs or that the Company will be
successful in implementing new systems.
A number of the Operating Companies offer different services, utilize
different capabilities and technologies and target different geographic markets
and client segments. While the Company believes that there are substantial
opportunities in integrating these businesses, these differences increase the
risk inherent in successfully completing such integration. Further, there can be
no assurance that the Company's strategy to establish a single source provider
for document management services will be successful, or that the Company's
target client segments will accept the Company as a provider of such services.
In addition, there can be no assurance that the operating results of the Company
will match or exceed the combined individual operating results achieved by the
Operating Companies prior to their acquisition.
ACQUISITION STRATEGY
The Company's primary growth strategy is the acquisition of additional
document management services businesses that will complement its existing
businesses. There can be no assurance that the Company will be able to identify
or reach mutually agreeable terms with acquisition candidates and their owners,
or that the Company will be able to profitably manage additional businesses or
successfully integrate such additional businesses into the Company without
substantial costs, delays or other problems. Acquisitions may involve a number
of special risks including: (i) adverse short-term effects on the Company's
reported operating results; (ii) diversion of management's attention; (iii)
dependence on retention, hiring and training of key personnel; (iv) risks
associated with unanticipated problems or legal liabilities; and (v)
amortization of acquired intangible assets. Some or all of these risks could
have a material adverse effect on the Company's operations and financial
performance. In addition, to the extent that consolidation becomes more
prevalent in the industry, the prices for attractive acquisition candidates may
be bid up to higher levels. In any event, there can be no assurance that
businesses acquired in the future will achieve sales and profitability that
justify the investment therein.
The Company is regularly in discussions with additional acquisition
candidates and may from time to time enter into letters of intent with respect
to the acquisition of such businesses. No assurance can be given, however, that
the Company will acquire any additional businesses.
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NEED FOR ADDITIONAL FINANCING TO CONTINUE ACQUISITION STRATEGY
The Company currently intends to finance future acquisitions by using cash
and its Common Stock for all or a portion of the consideration to be paid. This
Prospectus and a prior shelf registration statement filed by the Company with
the Commission relate to the offering of shares of Common Stock to be used as
consideration for acquisitions by the Company, of which approximately 918,701
shares remained available under such prior shelf registration statement as of
March 25, 1997. In the event that the Company's Common Stock does not maintain
sufficient value, or potential acquisition candidates are unwilling to accept
the Company's Common Stock as consideration for the sale of their businesses,
the Company may be required to utilize more of its cash resources, if available,
in order to continue its acquisition program. If the Company does not have
sufficient cash resources, its growth could be limited unless it is able to
obtain capital through additional debt or equity financings. In December 1996,
the Company completed the December Offering. The proceeds from the December
Offering were used to repay the outstanding balance under the Credit Agreement,
as amended (the "Line of Credit"), among the Company and its subsidiaries,
Banque Paribas, as agent, and the lenders named therein, and for general
corporate purposes, which have included and are expected to include additional
acquisitions. Under the Line of Credit, the Company and its subsidiaries
initially could borrow, on a revolving credit basis, loans in an aggregate
outstanding principal amount of $5.0 million for working capital and general
corporate purposes and term loans in an aggregate principal amount of $30.0
million for acquisitions, subject to certain restrictions in the Line of Credit.
As of March 7, 1997, the availability under the Line of Credit was $5.0 million
for working capital and $8.8 million for acquisitions. There can be no
assurance, however, that funds available under the Line of Credit will be
sufficient for the Company's needs.
EFFECT OF POTENTIAL FLUCTUATIONS IN OPERATING RESULTS ON PRICE OF COMMON STOCK;
VOLATILITY OF STOCK PRICE
Results for any quarter are not necessarily indicative of the results that
the Company may achieve for any subsequent quarter or a full fiscal year.
Quarterly results may vary materially as a result of the timing and structure of
acquisitions, the timing and magnitude of costs related to such acquisitions,
the gain or loss of material client relationships and variations in the prices
charged by the Company for the services it provides. In addition, since a
significant portion of the Company's revenue is generated on a
project-by-project basis, the timing or completion of material projects could
result in fluctuations in the Company's results of operations for particular
quarterly periods. Such fluctuations in operating results may adversely affect
the market price of the Company's Common Stock. The market price for the
Company's shares may also fluctuate in response to material announcements by the
Company or significant clients or competitors of the Company, changes in the
economic or other conditions impacting the Company's targeted client segments or
changes in general economic conditions. Further, the securities markets have
experienced significant price and volume fluctuations from time to time that
have often been unrelated or disproportionate to the operating performance of
particular companies. These broad fluctuations may adversely affect the market
price of the Common Stock.
DEPENDENCE ON CERTAIN CLIENT SEGMENTS AND TECHNOLOGY
The Company derives its revenue primarily from its three targeted client
segments: healthcare institutions, professional services firms and financial
institutions. Fundamental changes in the business practices of any of these
client segments, whether due to regulatory, technological or other developments,
could cause a material reduction in demand by such clients for the services
offered by the Company. Any such reduction in demand would have a material
adverse effect on the results of operations of the Company. The document
management services industry is characterized by technological change, evolving
customer needs and emerging technical standards. Although the Company believes
that it will be able to continue to offer services based on the newest
technologies, there can be no assurance that the Company will be able to obtain
the rights to use any such technologies, that it will be able to effectively
implement such technologies on a cost-effective or timely basis or that such
technologies will not render obsolete the Company's role as a third party
provider of document management services.
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COMPETITION
The document management services businesses in which the Company competes
and expects to compete are highly competitive. A significant source of
competition is the in-house document handling capability of the Company's
targeted client base. There can be no assurance that these businesses will
outsource more of their document management needs or that such businesses will
not bring in-house services that they currently outsource. In addition, certain
of the Company's competitors are larger businesses and have greater financial
resources than the Company. Certain of these competitors operate in broader
geographic areas than the Company, and others may choose to enter the Company's
areas of operation in the future. In addition, the Company intends to enter new
geographic areas through internal growth and acquisitions and expects to
encounter significant competition from established competitors in each of such
new areas. As a result of this highly competitive environment, the Company may
lose customers or have difficulty in acquiring new customers and new companies,
and its results of operations may be adversely affected.
RELIANCE ON KEY PERSONNEL
The Company's operations are dependent on the continued efforts of its
executive officers and on senior management of the Operating Companies.
Furthermore, the Company will likely depend on the senior management of
businesses acquired in the future. If any of these people is unable or unwilling
to continue in his or her present role, or if the Company is unable to attract
and retain other skilled employees, the Company's business could be adversely
affected. The Company does not currently have key person life insurance covering
any of its executive officers or other members of senior management.
POTENTIAL LIABILITY FOR BREACH OF CONFIDENTIALITY
A substantial portion of the Company's business involves the handling of
documents containing confidential and other sensitive information. Although the
Company has established procedures intended to prevent any unauthorized
disclosure of confidential information and, in some cases, has contractually
limited its potential liability for unauthorized disclosure of such information,
there can be no assurance that unauthorized disclosures will not result in
material liability to the Company.
INCREASE IN MINIMUM WAGE
As of October 1, 1996, the federal minimum wage increased to $4.75 an hour.
The second phase of the increase will be implemented on September 1, 1997,
bringing the federal minimum wage to $5.15 an hour. In addition, California and
other states have increased or may increase their minimum wage above the federal
minimum. A significant number of the Company's employees earn slightly above the
minimum wage and, therefore, the Company may have to increase salaries to remain
competitive. Accordingly, the Company's results of operations may be adversely
affected.
CONTROL BY MANAGEMENT
As of March 7, 1997, the directors and executive officers of the Company
beneficially owned approximately 19.0% of the outstanding shares of Common Stock
and exercise substantial control over the Company's affairs. These stockholders
acting together would likely be able to elect a sufficient number of directors
to control the Board of Directors and to approve or disapprove any matter
submitted to a vote of stockholders.
POTENTIAL EFFECT OF SHARES ELIGIBLE FOR FUTURE SALE ON PRICE OF COMMON STOCK
The market price of the Common Stock of the Company could be adversely
affected by the sale of substantial amounts of Common Stock of the Company in
the public market. As of March 7, 1997, there were 8,779,434 shares of Common
Stock outstanding. The 2,783,000 shares sold by the Company and certain selling
stockholders in the December Offering, and the 2,185,000 shares sold in the IPO,
are freely tradable without restriction unless acquired by affiliates of the
Company. Of such 8,779,434 shares, 2,664,615 shares, together with 165,000
shares of Common Stock currently issuable upon exercise of outstanding warrants,
have
7
<PAGE> 9
not been registered under the Securities Act, which means that they may be
resold publicly only upon registration under the Securities Act or in compliance
with an exemption from the registration requirements of the Securities Act,
including the exemption provided by Rule 144 under the Securities Act. Holders
of all of such unregistered shares, however, have certain registration rights
with respect to such shares.
In addition, the former owners of the Founding Companies and the initial
stockholders of the Company have agreed with the Company that they will not sell
any of their shares for a period of two years after January 26, 1996 (other than
certain sales registered under the Securities Act and a limited ability to
pledge such shares as collateral or contribute up to 10% to a family charitable
trust).
The Company issued 1,081,299 shares of Common Stock as partial
consideration for acquisitions completed since the IPO. Such 1,081,299 shares
were registered under the Company's prior shelf registration statement and are
freely tradable (except for 36,670 shares held by a wholly-owned subsidiary of
the Company) unless acquired by parties to the acquisition or affiliates of such
parties, other than the issuer, in which case they may be sold pursuant to Rule
145 under the Securities Act. In addition, these shares are subject to
contractual restrictions on resale which generally expire two years from the
date of issuance.
The Company has an aggressive acquisition program under which it recently
completed, and expects to continue to consummate, acquisitions that meet the
requirements of the pooling-of-interests method of accounting. Under the
pooling-of-interests method of accounting, the affiliates of the acquired
companies, which are generally all of the stockholders of the companies acquired
by the Company, must be free to sell or otherwise transfer shares of the Common
Stock received in the acquisition, subject to their compliance with federal
securities laws, as soon as the Company releases results of operations that
reflect the combined operations of the Company and the acquired company for a
minimum of 30 days. If a significant number of shares of Common Stock are issued
in acquisitions that are consummated in close proximity to each other, such
shares will become freely tradable at the same time. If a large number of shares
are sold by stockholders in the market as soon as their shares became freely
transferable, the price of the Common Stock could be adversely affected.
The Company has reserved for issuance under the Company's 1995 Stock Option
Plan, as amended (the "Plan"), an aggregate of 650,000 shares of Common Stock,
or 15% of the aggregate number of shares of the Common Stock outstanding,
whichever is greater. The Company has registered the shares issuable upon
exercise of options granted under the Plan, and such shares will be eligible for
resale in the public market. As of March 7, 1997, the Company had options to
purchase 682,590 shares of Common Stock outstanding under the Plan.
EFFECT OF CERTAIN CHARTER PROVISIONS
The Board of Directors of the Company is empowered to issue preferred stock
without stockholder action. The existence of this "blank-check" preferred could
render more difficult or discourage an attempt to obtain control of the Company
by means of a tender offer, merger, proxy contest or otherwise. See "Description
of Capital Stock."
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements such as the
Company's or management's intentions, hopes, beliefs, expectations, strategies,
predictions, or any other variation thereof or comparable phraseology of the
Company's future activities or other future events or conditions within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act
which are intended to be covered by the safe harbors created thereby. Investors
are cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the sufficiency of the Company's working capital
and the ability of the Company to realize benefits from consolidating certain
general and administrative functions, to continue its aggressive acquisition
program, to retain management, to implement its focused business strategy to
expand its document management services geographically, to attract customers
from other businesses, to increase revenue by cross-selling services and to
successfully defend itself in ongoing and future litigation. Although the
Company believes that the assumptions underlying the forward-looking statements
contained herein are
8
<PAGE> 10
reasonable, any of the assumptions could be inaccurate, and, therefore, there
can be no assurance that the forward-looking statements included in this
Prospectus will prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company's authorized capital stock consists of 26,000,000 shares of
Common Stock, par value $.01 per share, and 1,000,000 shares of preferred stock,
par value $.01 per share (the "Preferred Stock"). As of March 7, 1997, the
Company had outstanding 8,779,434 shares of Common Stock and no shares of
Preferred Stock and had 60 record holders of Common Stock.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share on all
matters voted upon by stockholders, including the election of directors.
Subject to the rights of any then outstanding shares of Preferred Stock,
the holders of the Common Stock are entitled to such dividends as may be
declared in the discretion of the Board of Directors out of funds legally
available therefore. Holders of Common Stock are entitled to share ratably in
the net assets of the Company upon liquidation after payment or provision for
all liabilities and any preferential liquidation rights of any Preferred Stock
then outstanding. The holders of Common Stock have no preemptive rights to
purchase shares of stock of the Company. Shares of Common Stock are not subject
to any redemption provisions and are not convertible into any other securities
of the Company. All outstanding shares of Common Stock are, and the shares of
Common Stock to be issued hereby will be upon payment therefor, fully paid and
non-assessable.
The Common Stock is traded on the Nasdaq National Market under the symbol
"FYII."
PREFERRED STOCK
The Preferred Stock may be issued from time to time by the Board of
Directors as shares of one or more classes or series. Subject to the provisions
of the Company's Certificate of Incorporation and limitations prescribed by law,
the Board of Directors is expressly authorized to adopt resolutions to issue the
shares, to fix the number of shares and to change the number of shares
constituting any series, and to provide for or change the voting powers,
designations, preferences and relative, participating, optional or other special
rights, qualifications, limitations or restrictions thereof, including dividend
rights (including whether dividends are cumulative), dividend rates, terms of
redemption (including sinking fund provisions), redemption prices, conversion
rights and liquidation preferences of the shares constituting any class or
series of the Preferred Stock, in each case without any further action or vote
by the stockholders. The Company has no current plans to issue any shares of
Preferred Stock of any class or series.
One of the effects of undesignated Preferred Stock may be to enable the
Board of Directors to render more difficult or to discourage an attempt to
obtain control of the Company by means of a tender offer, proxy contest, merger
or otherwise, and thereby to protect the continuity of the Company's management.
The issuance of shares of the Preferred Stock pursuant to the Board of
Directors' authority described above may adversely affect the rights of the
holders of Common Stock. For example, Preferred Stock issued by the Company may
rank prior to the Common Stock as to dividend rights, liquidation preference or
both, may have full or limited voting rights and may be convertible into shares
of Common Stock. Accordingly, the issuance of shares of Preferred Stock may
discourage bids for the Common Stock or may otherwise adversely affect the
market price of the Common Stock.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is American Stock
Transfer and Trust Company.
9
<PAGE> 11
PLAN OF DISTRIBUTION AND SELLING STOCKHOLDERS
THE COMPANY
The Company will issue the Shares from time to time in connection with
acquisition by the Company of other businesses, assets or securities. It is
expected that the terms of the acquisitions involving the issuance of the Shares
covered by this Prospectus will be determined by direct negotiations with the
owners or controlling persons of the businesses, assets or securities to be
merged with or acquired by the Company. No underwriting discounts or commissions
will be paid, although finder's fees may be paid from time to time with respect
to specific mergers or acquisitions. Any person receiving such fees may be
deemed to be an underwriter within the meaning of the Securities Act.
SELLING STOCKHOLDERS
Information relating to the Selling Stockholders will be provided by
Prospectus Supplement.
The Selling Stockholders or permitted transferees may from time to time
sell the Shares offered by them hereunder in transactions in which they and any
broker-dealer through whom such Shares are sold may be deemed to be underwriters
within the meaning of the Securities Act. The Company will receive none of the
proceeds from any such sales. There presently are no arrangements or
understandings, formal or informal, pertaining to the distribution of the Shares
described herein. Upon the Company being notified by a Selling Stockholder that
any material arrangement has been entered into with a broker-dealer from the
sale of Shares bought through a block trade, special offering, exchange
distribution or secondary distribution, a supplemented Prospectus will be filed,
pursuant to Rule 424(b) under the Securities Act, setting forth (i) the name of
each Selling Stockholder and the participating broker-dealer(s), (ii) the number
of Shares involved, (iii) the price at which the Shares were sold, (iv) the
commissions paid or the discounts 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 in this Prospectus and (vi) other facts material
to the transaction.
Selling Stockholders may sell the Shares being offered hereby from time to
time in transactions (which may involve crosses and block transactions) on the
Nasdaq National Market, in negotiated transactions or otherwise, at market
prices prevailing at the time of the sale or at negotiated prices. Selling
Stockholders may sell some or all of such Shares in transactions involving
broker-dealers, who may act solely as agent and/or may acquire Shares as
principal. Broker-dealers participating in such transactions as agent may
receive commissions from Selling Stockholders (and, if they act as agent for the
purchaser of such Shares, from such purchaser), such commissions computed in
appropriate cases in accordance with the applicable rules of the Nasdaq National
Market, which commissions may be at negotiated rates where permissible under
such rules. Participating broker-dealers may agree with Selling Stockholders to
sell a specified number of Shares at a stipulated price per share and, to the
extent such broker-dealer is unable to do so acting as an agent for Selling
Stockholders, to purchase as principal any unsold Shares at the price required
to fulfill the broker-dealer's commitment to Selling Stockholders. In addition
or alternatively, Shares may be sold by Selling Stockholders and/or by or
through other broker-dealers in special offerings, exchange distributions or
secondary distributions pursuant to and in compliance with the governing rules
of the Nasdaq National Market. Broker-dealers who acquire Shares as principal
may thereafter resell such Shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to or through
other broker-dealers, including transactions of the nature described in the
preceding two sentences) on the Nasdaq National Market, in negotiated
transactions or otherwise, at market prices prevailing at the time of sale or at
negotiated prices, and in connection with such resales may pay to or receive
commissions from the purchase of such Shares. Any commissions paid or
concessions allowed to any broker-dealer, and, if any broker-dealer purchases
such Shares as principal, any profits received on the resale of such Shares, may
be deemed to be underwriting discounts and commissions under the Securities Act.
The Company may agree to indemnify each Selling Stockholder as an
underwriter under the Securities Act against certain liabilities, including
liabilities arising under the Securities Act. Each Selling Stockholder
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<PAGE> 12
may indemnify any broker-dealer that participates in transactions involving
sales of the Shares against certain liabilities, including liabilities arising
under the Securities Act.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered by this
Prospectus has been passed upon for the Company by Morgan, Lewis & Bockius LLP,
New York, New York.
EXPERTS
The audited consolidated financial statements for the years ended December
31, 1995 and 1996 incorporated by reference in this Prospectus and elsewhere in
this Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report. The audited
financial statements of Imagent Corporation and Related Company; Melanson and
Associates, Inc. and Related Company; C. & T. Management Services, Inc. and
Related Company; Leonard Archives, Inc.; Deliverex, Incorporated and Subsidiary
and Related Company and Permanent Records, Inc. for the three years ended
December 31, 1995, or the applicable fiscal year-ends incorporated by reference
in this Prospectus and elsewhere in the Registration Statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports. The audited Combined Financial Statements of the Founding Companies for
the one month ended January 31, 1996 and the three years ended December 31, 1995
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report. In this report, Arthur Andersen LLP
states that with respect to Recordex Services, Inc., as of and for the two years
in the period ended December 31, 1994, its opinion is based on the report of
other independent public accountants, namely Elko, Fischer, McCabe & Rudman,
Ltd. The audited financial statements for Recordex Services, Inc. for the year
ended December 31, 1995 incorporated by reference in this Prospectus and
elsewhere in the Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report. The audited
financial statements for Recordex Services, Inc. for the two years ended
December 31, 1994 incorporated by reference in this Prospectus and elsewhere in
the Registration Statement have been audited by Elko, Fischer, McCabe & Rudman,
Ltd., independent public accountants, as indicated in their report with respect
thereto. The financial statements are incorporated by reference herein in
reliance upon the authority of said firms as experts in giving said reports.
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<PAGE> 13
No dealer, representative or any other person has been authorized to give
any information or to make any representations other than those 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. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create any implication that the information contained herein is
correct as of any date subsequent to the date hereof. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
offered hereby by anyone in any jurisdiction in which such offer or solicitation
is not authorized or in which the person making such offer or solicitation is
not qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation.
---------------------
TABLE OF CONTENTS
---------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................................... 2
Incorporation of Certain Information by Reference........... 2
The Company................................................. 3
Recent Developments......................................... 4
Risk Factors................................................ 5
Description of Capital Stock................................ 9
Plan of Distribution and Selling Stockholders............... 10
Legal Matters............................................... 11
Experts..................................................... 11
</TABLE>
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's By-Laws provide that the Company shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify all persons whom it may
indemnify pursuant thereto.
Section 145 of the General Corporation Law of the State of Delaware permits
a corporation, under specified circumstances, to indemnify its directors,
officers, employees or agents against expenses (including attorney's fees),
judgments, fines and amounts paid in settlements actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties by reason of the fact that they were or are directors, officers,
employees or agents of the corporation, if such directors, officers, employees
or agents acted in good faith and in a manner they reasonably believed to be in
or not apposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reason to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made only for expenses actually and
reasonably incurred by directors, officers, employees or agents in connection
with the defense or settlement of an action or suit, and only with respect to a
matter as to which they shall have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made if such person shall
have been adjudged liable to the corporation, unless and only to the extent that
the court in which the action or suit was brought shall determine upon
application that the defendant directors, officers, employees or agents are
fairly and reasonably entitled to indemnity for such expenses despite such
adjudication of liability.
Article Six of the Company's Certificate of Incorporation provides that the
Company's directors will not be personally liable to the Company or its
stockholders for monetary damages resulting from breaches of their fiduciary
duty as directors except (a) for any breach of the duty of loyalty to the
Company or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the General Corporation Law of the State of Delaware, which makes
directors liable for unlawful dividends or unlawful stock repurchases or
redemptions or (d) for transactions from which directors derive improper
personal benefit.
In accordance with Delaware law, the Company has entered into
indemnification agreements with its directors pursuant to which it has agreed to
pay certain expenses, including attorneys' fees, judgments, fines and amounts
paid in settlement incurred by such directors in connection with certain
actions, suits or proceedings. These agreements require directors to repay the
amount of any expenses advanced if it shall be determined that they shall not
have been entitled to indemnification.
The Company maintains liability insurance for the benefit of its directors
and officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.1 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Deliverex,
Incorporated, ASK Record Management, Inc., Deliverex
Acquisition Corp., and the Stockholders named therein
(Incorporated by reference to Exhibit 2.1 to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-98608) effective January 12,
1996)
</TABLE>
II-1
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
.2 -- Agreement and Plan of Reorganization, dated as of October
2 25, 1995, by and among F.Y.I. Incorporated, C. & T.
Management Services, Inc., Qualidata, Inc., DPAS
Acquisition Corp., and the Stockholders named therein
(Incorporated by reference to Exhibit 2.2 to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-98608) effective January 12,
1996)
2.3 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Melanson &
Associates, Inc., Bay Area Micrographics, Researchers
Acquisition Corp., and the Stockholders named therein
(Incorporated by reference to Exhibit 2.3 to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-98608) effective January 12,
1996)
2.4 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Paragon
Management Group, Inc., Recordex Acquisition Corp.,
Recordex Services, Inc. and the Stockholders named
therein (Incorporated by reference to Exhibit 2.4 to
Amendment No. 1 to the Registrant's Registration
Statement on Form S-1 (Registration No. 33-98608)
effective January 12, 1996)
2.5 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Permanent
Records Inc., Permanent Records Acquisition Corp., and
the Stockholders named therein (Incorporated by reference
to Exhibit 2.5 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-98608) effective January 12, 1996)
2.6 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Leonard
Archives Inc., Leonard Acquisition Corp. and the
Stockholders named therein (Incorporated by reference to
Exhibit 2.6 to Amendment No. 1 to the Registrant's
Registration Statement on form S-1 (Registration No.
33-98608) effective January 12, 1996)
2.7 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among Imagent Corporation, Imagent
Acquisition Corp. and the Stockholders named therein
(Incorporated by reference to Exhibit 2.7 to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-98608) effective January 12,
1996)
2.8 -- Agreement and Plan of Reorganization dated as of October
25, 1995, by and among Mobile Information Services
Corporation, Inc., Imagent Acquisition Corp. and the
Stockholders named therein (Incorporated by reference to
Exhibit 2.8 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-98608) effective January 12, 1996)
2.9 -- First Amendment to Agreement and Plan of Reorganization,
dated as of October 25, 1995, by and among F.Y.I.
Incorporated, Leonard Archives Inc., Leonard Acquisition
Corp. and the Stockholders named therein (Incorporated by
reference to Exhibit 2.9 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-1
(Registration No. 33-98608) effective January 12, 1996)
2.10 -- First Amendment to Agreement and Plan of Reorganization,
dated as of November 14, 1995, by and among F.Y.I.
Incorporated, C. & T. Management Services, Inc.,
Qualidata, Inc., DPAS Acquisition Corp., and the
Stockholders named therein (Incorporated by reference to
Exhibit 2.10 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-98608) effective January 12, 1996)
</TABLE>
II-2
<PAGE> 16
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
.11 -- Agreement and Plan of Reorganization, dated as of May 31,
2 1996, by and among F.Y.I. Incorporated, B&B
(Baltimore-Washington) Acquisition Corp., B&B Information
and Image Management, Inc. and Charles J. Bauer, Jr.
(Incorporated by reference to Exhibit 10.17 to
Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-1 (Registration No.
333-1084) effective July 11, 1996)
2.12 -- Agreement and Plan of Reorganization, dated as of May 31,
1996, by and among F.Y.I. Incorporated, Premier
Acquisition Corp., Premier Document Management, Inc., PDM
Services, Inc., Brian E. Whiteside, Christopher S. Moore,
Lynnette C. Pomerville and Gary T. Sievert (Incorporated
by reference to Exhibit 10.18 to Post-Effective Amendment
No. 2 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-1084) effective July 11, 1996)
2.13 -- Asset Purchase Agreement, dated as of June 28, 1996, by
and among F.Y.I. Incorporated, Robert A. Cook Acquisition
Corp., Robert A. Cook and Staff, Inc. and RAC Services,
Inc., Robert A. Cook and Robert A. Cook and Anna M. Cook,
as Co-Trustees of the Cook 1993 Living Trust
(Incorporated by reference to Exhibit 10.19 to
Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-1 (Registration No.
333-1084) effective July 11, 1996)
2.14 -- Agreement and Plan of Reorganization, dated as of August
30, 1996, by and among F.Y.I. Incorporated, California
Medical Record Service Acquisition Corp., C.M.R.S.
Incorporated and Alan Simon (Incorporated by reference to
Exhibit 2.14 to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-1
(Registration No. 333-1084) effective September 11, 1996)
2.15 -- Agreement and Plan of Reorganization, dated as of August
30, 1996, by and among F.Y.I. Incorporated, Texas Medical
Record Service Acquisition Corp., Texas Medical Record
Service, Inc., California Medical Record Service
Acquisition Corp. and Karen Jill Simon (Incorporated by
reference to Exhibit 2.15 to Post-Effective Amendment No.
3 to the Registrant's Registration Statement on Form S-1
(Registration No. 333-1084) effective September 11, 1996)
2.16 -- Agreement and Plan of Reorganization, dated as of August
30, 1996, by and among F.Y.I. Incorporated, Minnesota
Medical Record Service Acquisition Corp., Minnesota
Medical Record Service, Inc. and Alan Simon (Incorporated
by reference to Exhibit 2.16 to Post-Effective Amendment
No. 3 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-1084) effective September 11,
1996)
2.17 -- Agreement and Plan of Reorganization, dated as of August
30, 1996, by and among F.Y.I. Incorporated, ZIA
Acquisition Corp., ZIA Information Analysis Group and the
shareholders named therein (Incorporated by reference to
Exhibit 2.17 to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-1
(Registration No. 333-1084) effective September 11, 1996)
4 -- Form of certificate evidencing ownership of Common Stock
of F.Y.I. Incorporated (Incorporated by reference to
Exhibit 4.2 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-98608) effective January 12, 1996)
5 -- Opinion of Morgan, Lewis & Bockius LLP
</TABLE>
II-3
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
-- List of Subsidiaries of F.Y.I. Incorporated (Incorporated
21 by reference to Exhibit 21 to the Registrant's Annual
Report on Form 10-K filed on March 11, 1997).
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Elko, Fischer, McCabe & Rudman, Ltd.
23.3 -- Consent of Morgan, Lewis & Bockius LLP (contained in
Exhibit 5)
24 -- Power of Attorney (included with the signature page
hereof)
</TABLE>
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which any offers or sales are being
made, a post-effective amendment to the registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any other material change to such information in the registration
statement.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities being offered
therein and the offering of such securities at the time may 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 which are being registered which remain unsold at the
termination of the offering.
(4) That for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(5) To deliver or cause to be delivered with the Prospectus, to each
person to whom the Prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the Prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and where interim
financial information required to be presented by Article 3 of Regulation
S-X is not set forth in the Prospectus, to deliver, or caused to be
delivered to each person to whom the Prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
II-4
<PAGE> 18
(6) As follows: that prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that
such reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by persons who may
be deemed underwriters, in addition to the information called for by the
other items of the applicable form.
(7) That every prospectus (i) that is filed pursuant to paragraph (6)
immediately preceding or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as part of an amendment to
the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(8) To respond to requests for information that is incorporated by
reference into the Prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one (1) business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed subsequent to
the effective date of the registration statement through the date of
responding to the request.
(9) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved there,
that was not the subject of and included in the registration statement when
it became effective.
(10) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed by
the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company 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
Company 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-5
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dallas, Texas, on March
26, 1997.
Date: March 26, 1997
F.Y.I. INCORPORATED
By: /s/ ED H. BOWMAN, JR.
----------------------------------
Ed H. Bowman, Jr.
President and Chief Executive
Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints Ed H. Bowman, Jr.
and Margot T. Lebenberg, and both of them, either of whom may act without the
joinder of the other, as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any other
registration statement for the same offering filed pursuant to Rule 462 under
the Securities Act of 1933, and to file the same, with all exhibits thereto and
all other documents in connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing appropriate or necessary to be done, as fully and
for all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date or dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY IN WHICH SIGNED DATE
--------- ------------------------ ----
<C> <S> <C>
/s/ ED H. BOWMAN, JR. Director, President and Chief March 26, 1997
- ----------------------------------------------------- Executive Officer (Principal
Ed H. Bowman, Jr. Executive Officer)
/s/ DAVID LOWENSTEIN Director, Executive Vice President March 26, 1997
- ----------------------------------------------------- and Chief Financial Officer
David Lowenstein (Principal Financial Officer)
/s/ TIMOTHY J. BARKER Vice President and Chief March 26, 1997
- ----------------------------------------------------- Accounting Officer (Principal
Timothy J. Barker Accounting Officer)
/s/ THOMAS C. WALKER Director March 26, 1997
- -----------------------------------------------------
Thomas C. Walker
/s/ DONALD F. MOOREHEAD, JR. Director March 26, 1997
- -----------------------------------------------------
Donald F. Moorehead, Jr.
/s/ GREGORY R. MELANSON Director March 26, 1997
- -----------------------------------------------------
Gregory R. Melanson
</TABLE>
II-6
<PAGE> 20
<TABLE>
<CAPTION>
SIGNATURE CAPACITY IN WHICH SIGNED DATE
--------- ------------------------ ----
<C> <S> <C>
/s/ G. MICHAEL BELLENGHI Director March 26, 1997
- -----------------------------------------------------
G. Michael Bellenghi
/s/ JERRY F. LEONARD, JR. Director March 26, 1997
- -----------------------------------------------------
Jerry F. Leonard, Jr.
/s/ JONATHAN B. SHAW Director March 26, 1997
- -----------------------------------------------------
Jonathan B. Shaw
/s/ MICHAEL J. BRADLEY Director March 26, 1997
- -----------------------------------------------------
Michael J. Bradley
/s/ HON. EDWARD M. ROWELL Director March 26, 1997
- -----------------------------------------------------
Hon. Edward M. Rowell
</TABLE>
II-7
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.1 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Deliverex,
Incorporated, ASK Record Management, Inc., Deliverex
Acquisition Corp., and the Stockholders named therein
(Incorporated by reference to Exhibit 2.1 to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-98608) effective January 12,
1996)
2.2 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, C. & T.
Management Services, Inc., Qualidata, Inc., DPAS
Acquisition Corp., and the Stockholders named therein
(Incorporated by reference to Exhibit 2.2 to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-98608) effective January 12,
1996)
2.3 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Melanson &
Associates, Inc., Bay Area Micrographics, Researchers
Acquisition Corp., and the Stockholders named therein
(Incorporated by reference to Exhibit 2.3 to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-98608) effective January 12,
1996)
2.4 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Paragon
Management Group, Inc., Recordex Acquisition Corp.,
Recordex Services, Inc. and the Stockholders named
therein (Incorporated by reference to Exhibit 2.4 to
Amendment No. 1 to the Registrant's Registration
Statement on Form S-1 (Registration No. 33-98608)
effective January 12, 1996)
2.5 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Permanent
Records Inc., Permanent Records Acquisition Corp., and
the Stockholders named therein (Incorporated by reference
to Exhibit 2.5 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-98608) effective January 12, 1996)
2.6 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among F.Y.I. Incorporated, Leonard
Archives Inc., Leonard Acquisition Corp. and the
Stockholders named therein (Incorporated by reference to
Exhibit 2.6 to Amendment No. 1 to the Registrant's
Registration Statement on form S-1 (Registration No.
33-98608) effective January 12, 1996)
2.7 -- Agreement and Plan of Reorganization, dated as of October
25, 1995, by and among Imagent Corporation, Imagent
Acquisition Corp. and the Stockholders named therein
(Incorporated by reference to Exhibit 2.7 to Amendment
No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 33-98608) effective January 12,
1996)
2.8 -- Agreement and Plan of Reorganization dated as of October
25, 1995, by and among Mobile Information Services
Corporation, Inc., Imagent Acquisition Corp. and the
Stockholders named therein (Incorporated by reference to
Exhibit 2.8 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-98608) effective January 12, 1996)
2.9 -- First Amendment to Agreement and Plan of Reorganization,
dated as of October 25, 1995, by and among F.Y.I.
Incorporated, Leonard Archives Inc., Leonard Acquisition
Corp. and the Stockholders named therein (Incorporated by
reference to Exhibit 2.9 to Amendment No. 1 to the
Registrant's Registration Statement on Form S-1
(Registration No. 33-98608) effective January 12, 1996)
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
.10 -- First Amendment to Agreement and Plan of Reorganization,
2 dated as of November 14, 1995, by and among F.Y.I.
Incorporated, C. & T. Management Services, Inc.,
Qualidata, Inc., DPAS Acquisition Corp., and the
Stockholders named therein (Incorporated by reference to
Exhibit 2.10 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-98608) effective January 12, 1996)
2.11 -- Agreement and Plan of Reorganization, dated as of May 31,
1996, by and among F.Y.I. Incorporated, B&B
(Baltimore-Washington) Acquisition Corp., B&B Information
and Image Management, Inc. and Charles J. Bauer, Jr.
(Incorporated by reference to Exhibit 10.17 to
Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-1 (Registration No.
333-1084) effective July 11, 1996)
2.12 -- Agreement and Plan of Reorganization, dated as of May 31,
1996, by and among F.Y.I. Incorporated, Premier
Acquisition Corp., Premier Document Management, Inc., PDM
Services, Inc., Brian E. Whiteside, Christopher S. Moore,
Lynnette C. Pomerville and Gary T. Sievert (Incorporated
by reference to Exhibit 10.18 to Post-Effective Amendment
No. 2 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-1084) effective July 11, 1996)
2.13 -- Asset Purchase Agreement, dated as of June 28, 1996, by
and among F.Y.I. Incorporated, Robert A. Cook Acquisition
Corp., Robert A. Cook and Staff, Inc. and RAC Services,
Inc., Robert A. Cook and Robert A. Cook and Anna M. Cook,
as Co-Trustees of the Cook 1993 Living Trust
(Incorporated by reference to Exhibit 10.19 to
Post-Effective Amendment No. 2 to the Registrant's
Registration Statement on Form S-1 (Registration No.
333-1084) effective July 11, 1996)
2.14 -- Agreement and Plan of Reorganization, dated as of August
30, 1996, by and among F.Y.I. Incorporated, California
Medical Record Service Acquisition Corp., C.M.R.S.
Incorporated and Alan Simon (Incorporated by reference to
Exhibit 2.14 to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-1
(Registration No. 333-1084) effective September 11, 1996)
2.15 -- Agreement and Plan of Reorganization, dated as of August
30, 1996, by and among F.Y.I. Incorporated, Texas Medical
Record Service Acquisition Corp., Texas Medical Record
Service, Inc., California Medical Record Service
Acquisition Corp. and Karen Jill Simon (Incorporated by
reference to Exhibit 2.15 to Post-Effective Amendment No.
3 to the Registrant's Registration Statement on Form S-1
(Registration No. 333-1084) effective September 11, 1996)
2.16 -- Agreement and Plan of Reorganization, dated as of August
30, 1996, by and among F.Y.I. Incorporated, Minnesota
Medical Record Service Acquisition Corp., Minnesota
Medical Record Service, Inc. and Alan Simon (Incorporated
by reference to Exhibit 2.16 to Post-Effective Amendment
No. 3 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-1084) effective September 11,
1996)
2.17 -- Agreement and Plan of Reorganization, dated as of August
30, 1996, by and among F.Y.I. Incorporated, ZIA
Acquisition Corp., ZIA Information Analysis Group and the
shareholders named therein (Incorporated by reference to
Exhibit 2.17 to Post-Effective Amendment No. 3 to the
Registrant's Registration Statement on Form S-1
(Registration No. 333-1084) effective September 11, 1996)
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
-- Form of certificate evidencing ownership of Common Stock
4 of F.Y.I. Incorporated (Incorporated by reference to
Exhibit 4.2 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-1 (Registration No.
33-98608) effective January 12, 1996)
5 -- Opinion of Morgan, Lewis & Bockius LLP
21 -- List of Subsidiaries of F.Y.I. Incorporated (Incorporated
by reference to Exhibit 21 to the Registrant's Annual
Report on Form 10-K filed on March 11, 1997).
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Elko, Fischer, McCabe & Rudman, Ltd.
23.3 -- Consent of Morgan, Lewis & Bockius LLP (contained in
Exhibit 5)
24 -- Power of Attorney (included with the signature page
hereof)
</TABLE>
<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF MORGAN, LEWIS & BOCKIUS LLP]
March 26, 1997
F.Y.I. Incorporated
3232 McKinney Avenue
Suite 900
Dallas, Texas 75204
Re: Issuance of Shares Pursuant to
Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as counsel to F.Y.I. Incorporated, a Delaware corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended, of a Registration Statement on Form S-4 (the "Registration Statement")
relating to the public offering by the Company of an aggregate of 2,500,000
shares (the "Shares") of the Company's Common Stock, $.01 par value per share.
In so acting, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of the Amended and Restated
Certificate of Incorporation of the Company and the By-Laws of the Company. We
have assumed that (i) the Registration Statement, and any amendments thereto,
will have become effective, (ii) the Shares will have been duly authorized and
reserved for issuance and certificates evidencing the same will have been duly
executed and delivered, against receipt of the consideration approved by the
Board of Directors of the Company or a committee thereof which will be no less
than the par value thereof, and (iii) the Shares will be issued in compliance
with applicable federal and state securities laws.
Based on the foregoing, we are of the following opinion:
1. The Company is a corporation duly incorporated and validly
existing under the laws of the State of Delaware.
2. The Shares, when issued, will be duly authorized, validly
issued, fully paid and non-assessable.
<PAGE> 2
F.Y.I. Incorporated
March 26, 1997
Page 2
We are expressing the opinions above as members of the Bar of the State
of New York and express no opinion as to any law other than the General
Corporation Law of the State of Delaware.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of our name under the caption "Legal Matters" in the
Registration Statement.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
Registration Statement.
ARTHUR ANDERSEN LLP
Dallas, Texas
March 24, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
Registration Statement.
ELKO FISCHER, McCABE & RUDMAN, Ltd.
Media, Pennsylvania
March 24, 1997
