<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------------
CENTRAL PARKING CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TENNESSEE 62-1052916
(State or other jurisdiction (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
2401 21ST AVENUE SOUTH, SUITE 200
NASHVILLE, TENNESSEE 37212
(615) 297-4255
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
MONROE J. CARELL, JR.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
CENTRAL PARKING CORPORATION
2401 21ST AVENUE SOUTH, SUITE 200
NASHVILLE, TENNESSEE 37212
(615) 297-4255
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPIES TO:
<TABLE>
<S> <C>
MARK MANNER J. GENTRY BARDEN
HARWELL HOWARD HYNE GABBERT & MANNER, P.C. BASS, BERRY & SIMS PLC
FIRST AMERICAN CENTER FIRST AMERICAN CENTER
NASHVILLE, TENNESSEE 37238 NASHVILLE, TENNESSEE 37238
(615) 256-0500 (615) 742-6200
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being 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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
TITLE OF EACH CLASS AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share... 4,510,000 shares $27.50 $124,025,000 $37,584
========================================================================================================================
</TABLE>
(1) Includes an aggregate of 410,000 shares to cover over-allotments, if any,
pursuant to an over-allotment option granted to the Underwriters by the
Company.
(2) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee, based on the average of the high and low
sale prices reported on the New York Stock Exchange on March 20, 1997.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 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 24, 1997
PROSPECTUS
4,100,000 SHARES
CENTRAL PARKING CORPORATION LOGO
COMMON STOCK
Of the 4,100,000 shares of Common Stock offered hereby, 3,300,000 shares
are being sold by Central Parking Corporation (the "Company") and up to 800,000
shares are being sold by certain shareholders of the Company (the "Selling
Shareholders"). See "Principal and Selling Shareholders." The Company will not
receive any of the proceeds from the sale of shares of Common Stock by the
Selling Shareholders. The Company's Common Stock is traded on the New York Stock
Exchange (the "NYSE") under the symbol "PK." On March 19, 1997, the last
reported sale price of the Common Stock was $28.00 per share. See "Price Range
of Common Stock and Dividend Policy."
SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.
---------------------
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.
<TABLE>
<CAPTION>
=========================================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) SHAREHOLDERS(2)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share............ $ $ $ $
- ------------------------------------------------------------------------------------------------------------------
Total(3)............. $ $ $ $
==================================================================================================================
</TABLE>
(1) The Company and the Selling Shareholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting estimated expenses of $563,415 payable by the Company and
$136,585 payable by the Selling Shareholders.
(3) The Company has granted the Underwriters an over-allotment option,
exercisable for 30 days from the date of this Prospectus, to purchase up to
410,000 additional shares of Common Stock on the same terms and conditions
as set forth above. If all such shares are purchased by the Underwriters,
the total Price to Public will be $ , the total Underwriting Discount
will be $ , and the total Proceeds to Company will be $ . See
"Underwriting."
---------------------
The shares of Common Stock are offered subject to receipt and acceptance by
the several Underwriters, to prior sale, and to the Underwriters' right to
reject any order in whole or in part and to withdraw, cancel, or modify the
offer without notice. It is expected that certificates for the shares of Common
Stock will be available for delivery on or about , 1997.
---------------------
J.C. Bradford & Co. and Underwriters
, 1997
<PAGE> 3
[CENTRAL PARKING CORPORATION MAP OF LOCATIONS]
FOR UNITED KINGDOM PURCHASERS: This Prospectus has not been registered in
the United Kingdom and, accordingly, the shares of Common Stock offered hereby
may not be and are not being offered or sold in the United Kingdom other than to
persons whose ordinary activities involve them in acquiring, holding, managing,
or disposing of investments, whether as principal or agent (except in
circumstances that do not constitute an offer to the public within the meaning
of the Public Offers of Securities Regulations 1995 or the Financial Services
Act 1986), and this Prospectus may only be issued or passed on to any person in
the United Kingdom if that person is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or a person to whom this Prospectus may otherwise lawfully be passed on.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK
INCLUDING STABILIZATION AND SHORT-COVERING TRANSACTIONS. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING."
2
<PAGE> 4
Picture of The Crescent -- Dallas, Texas Picture of Busch Stadium Garages --
Parking managed since 1985 St. Louis, Missouri
Purchased December 1996
(Previously managed since 1984)
Picture of One Market -- San Francisco, California
Parking managed since 1995
Picture of Interstate Tower -- Charlotte, North Carolina
Parking managed since 1990
<PAGE> 5
Picture of Kuala Lumpur, Malaysia
Parking to be managed Spring 1997
Picture of Broadgate -- London, England
Leased and operated parking since 1991
Picture of Heathrow International Airport -- London, England
Leased and operated parking at various terminals since 1991
<PAGE> 6
Picture of CocoWalk -- Miami, Florida
Parking managed since 1990
Picture of Fleet Center -- Boston, Massachusetts
Parking managed since 1995
Picture of Turner Stadium -- Atlanta, Georgia
Parking to be managed Spring 1997
Picture of Madison Square Garden -- New York, New York
Parking managed since 1992
<PAGE> 7
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial data appearing elsewhere or incorporated by reference
in this Prospectus. Unless the context otherwise indicates, (i) all references
to the "Company" include Central Parking Corporation and its subsidiaries, (ii)
the information contained in this Prospectus assumes no exercise of the
Underwriters' over-allotment option, and (iii) the information contained in this
Prospectus has been adjusted to reflect a three-for-two split of the Common
Stock effected in the form of a stock dividend on March 19, 1996. All references
to the facilities operated by the Company as of January 31, 1997 include the
facilities acquired in the Acquisitions (as defined below). See "-- Recent
Developments." The Company's fiscal year ends September 30. References to fiscal
years by date refer to the fiscal year ending September 30 of that year.
THE COMPANY
Central Parking Corporation (the "Company") is a leading provider of
parking services operating, as of January 31, 1997, 1,524 parking facilities
containing approximately 647,000 spaces in 34 states, the District of Columbia,
Puerto Rico, the United Kingdom, Germany, Canada, Mexico, and Malaysia. The
Company also provides parking consulting services in Spain and has a business
development office in Amsterdam. Since September 30, 1992, the Company has
increased the number of facilities it operates by approximately 675 facilities.
The Company's leadership position in the parking industry is a result of
applying professional management strategies to a fragmented industry managed
largely by small local operators; developing relationships with key real estate
managers and developers, including sports arena operators; understanding the
needs of the parking public; applying technology to parking services; and
retaining employees through formal training programs and performance-based
compensation.
The Company provides parking management services at multi-level parking
facilities and surface lots. It also provides parking consulting, shuttle,
valet, parking meter enforcement, and billing and collection services. The
Company operates parking facilities under three general types of arrangements:
management contracts, leases, and fee ownership. As of January 31, 1997, the
Company operated 828 parking facilities under management contracts and 638
parking facilities under leases, and owned, either independently or through
joint ventures, 58 parking facilities.
The International Parking Institute (the "IPI") estimates that there are
35,000 parking facilities in the United States generating approximately $26.0
billion of annual revenues, which is divided evenly between commercial and
governmental operators. The commercial parking services business is very
fragmented, consisting of a few national companies and approximately 1,000
small, privately-held local and regional operators. The Company believes that it
has the opportunity to consolidate this fragmented, localized industry by using
its competitive advantages with regard to scale, financial strength, technology,
controls, and professionalism, all of which are becoming increasingly important
in the parking services business. For the same reasons, the Company believes
that it is well-positioned to be selected by municipal and other governmental
entities to operate their parking facilities and provide parking-related
services as such entities move toward outsourcing and privatization.
The Company distinguishes itself from its competitors by combining a
reputation for professional integrity and quality management with operating
strategies designed to increase the revenues of parking operations for its
clients. The Company's clients include some of the nation's largest owners and
developers of mixed-use projects, major office building complexes, sports
stadiums, and hotels, as well as several municipalities. Parking facilities
operated by the Company include, among others, certain terminals operated by BAA
Heathrow International Airport (London), the Prudential Center (Boston),
Rockefeller Center (New York), One Penn Plaza (New York), Ericsson Stadium
(Charlotte), Busch Stadium (St. Louis), Reunion Arena (Dallas), Coors Field
(Denver), Oriole Park at Camden Yards (Baltimore), Cinergy Field (Cincinnati),
Turner Stadium (Atlanta), and various parking facilities owned by the Hyatt and
Westin hotel chains, the Rouse Company, Faison Associates, May Department
Stores, Equity Office Properties, and Crescent Real Estate.
3
<PAGE> 8
The Company's growth strategy is to increase revenues and profitability by
(i) increasing its market share through take-aways of competitors' contracts,
winning new management and lease contracts, purchasing properties, and nurturing
relationships with large real estate developers and asset managers; (ii)
continuing to pursue strategic acquisitions of other parking service companies;
and (iii) expanding its international activity, principally through joint
venture arrangements and consulting engagements. In addition, the Company
intends to achieve operating efficiencies through economies of scale by
leveraging its corporate infrastructure and its established presence in local
markets. Management also believes that privatization of parking and parking
related services will provide significant opportunities in the future.
Central Parking Corporation's principal executive offices are located at
2401 21st Avenue South, Suite 200, Nashville, Tennessee 37212, and its telephone
number at that address is (615) 297-4255.
RECENT DEVELOPMENTS
Acquisition of Square Industries, Inc.
On January 18, 1997, the Company completed a tender offer (the "Square
Acquisition") for Square Industries, Inc. ("Square"), a publicly held company.
As of December 31, 1996, Square operated 117 parking facilities containing
approximately 61,000 spaces in New York, New Jersey, Pennsylvania, Maryland,
Massachusetts, Delaware, Indiana, Georgia, and Canada, including Rockefeller
Center and One Penn Plaza in New York City. The total consideration for the
Square Acquisition was approximately $53.0 million in cash, plus the assumption
of approximately $23.2 million of Square indebtedness. The Company funded the
tender offer with borrowings under its credit facility (the "Credit Facility").
The Company believes the strategic and financial benefits of the Square
Acquisition include the opportunity to realize significant cost savings and
economies of scale through the elimination of duplicative corporate overhead and
management functions, information sharing, and increased market share,
particularly in the New York and Philadelphia markets where, as a result of the
acquisition, the size of the Company's operations has more than doubled. The
Square Acquisition expands the Company's geographic presence into new markets
including Indianapolis, Ottawa, and Toronto. Furthermore, the Company believes
the Square Acquisition has improved the Company's mix of leased and owned
facilities and has added several capable and experienced management personnel to
complement the Company's existing staff.
Purchase of Busch Stadium Properties
On December 31, 1996, the Company acquired all of the ownership units in
Civic Parking, LLC ("Civic") (the "Civic Acquisition" and, collectively with the
Square Acquisition, the "Acquisitions"). Civic owns four parking facilities
adjacent to or near Busch Stadium in St. Louis, Missouri, containing
approximately 7,500 parking spaces. Prior to the Civic Acquisition, the Company
operated all four parking facilities pursuant to management agreements.
Management believes that acquiring control of these facilities provides the
opportunity for greater revenue growth and increased cost savings. The Company
funded the purchase through a combination of working capital and approximately
$67.2 million of borrowings under the Credit Facility.
The Company has entered into a non-binding letter of intent to sell a 50%
interest in Civic to a third party real estate fund (the "Fund") for cash at the
Company's cost. There can be no assurance that the sale of the 50% interest to
the Fund will be completed or, if completed, that it will be on the terms
currently contemplated. If such sale is completed, the Company and the Fund will
operate the facilities as a joint venture.
4
<PAGE> 9
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company...................... 3,300,000 shares
Common Stock offered by the Selling Shareholders......... 800,000 shares
Common Stock to be outstanding after the Offering........ 20,795,772 shares(1)
Use of proceeds by the Company........................... To repay a portion of the indebtedness
outstanding under the Credit Facility.
See "Use of Proceeds."
NYSE symbol.............................................. PK
</TABLE>
- ---------------
(1) Does not include 343,250 shares of Common Stock issuable upon the exercise
of stock options granted under the Company's stock option plans.
5
<PAGE> 10
SUMMARY HISTORICAL AND PRO FORMA AS ADJUSTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA AND OTHER DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, DECEMBER 31,
------------------------------------------------------ ---------------------
PRO FORMA PRO FORMA
AS ADJUSTED AS ADJUSTED
1994 1995 1996 1996(1) 1995 1996 1996(1)
-------- -------- -------- ----------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Total revenues.................................. $112,168 $126,155 $143,316 $221,582 $33,251 $41,423 $ 62,684
Total costs and expenses........................ 100,960 112,553 126,384 192,874 29,116 36,294 54,917
Operating earnings.............................. 11,208 13,602 16,932 28,708 4,135 5,129 7,767
Interest expense................................ 39 -- -- 3,278 -- 7 797
Net gains on sales of property and equipment.... 2,214 81 1,192 1,192 41 3 3
Earnings before income taxes.................... 14,143 15,507 21,068 29,791 4,929 6,000 7,213
Net earnings.................................... 8,964 9,944 13,836 18,630 3,228 3,899 4,508
PER SHARE DATA:
Net earnings per common share(2)................ $ 0.58 $ 0.65 $ 0.79 $ 0.90 $ 0.19 $ 0.22 $ 0.22
Weighted average common shares(2)............... 15,372 15,372 17,491 20,791 17,216 17,620 20,920
Dividends per common share(2)................... -- -- $ 0.08 $ 0.08 $ 0.02 $ 0.02 $ 0.02
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
AS OF SEPTEMBER 30, --------------------------
----------------------------- PRO FORMA
1994 1995 1996 ACTUAL AS ADJUSTED(1)
------- ------- ------- -------- --------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................... $12,026 $10,218 $28,605 $ 5,850 $ 8,116
Working capital......................................... 1,987 2,676 19,707 (2,816) (15,341)
Total assets............................................ 60,029 70,440 107,212 178,800 278,552
Long-term debt, less current portion.................... -- -- -- 67,200 51,700
Shareholders' equity.................................... 31,861 41,360 76,793 80,403 168,003
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
----------------------------------------- -------------------------------
PRO FORMA PRO FORMA
AS ADJUSTED AS ADJUSTED
1994 1995 1996 1996(1) 1995 1996 1996(1)
------- ------- ------- ----------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Depreciation and amortization (in
thousands)(3)......................... $ 2,594 $ 2,882 $ 3,420 $4,609 $ 784 $ 942 $ 1,136
Number of managed facilities............ 626 715 770 NA 736 780 820
Number of leased facilities............. 436 485 552 NA 498 574 638
Number of owned facilities.............. 26 31 37 NA 33 46 58
------- ------- ------- ------- ------- --------
Total number of facilities...... 1,088 1,231 1,359 NA 1,267 1,400 1,516
Total number of parking spaces.......... 441,000 475,000 546,000 NA 490,000 581,000 641,000
</TABLE>
- ---------------
(1) The pro forma as adjusted consolidated financial information reflects (i)
the Acquisitions, and (ii) the sale of 3,300,000 shares of Common Stock
offered by the Company hereby at an assumed public offering price of $28.00
per share and the application of the estimated net proceeds received
therefrom to reduce indebtedness related to the Acquisitions (see "Use of
Proceeds") as if such transaction had been consummated on October 1, 1995
for purposes of the pro forma as adjusted consolidated statement of earnings
data and on December 31, 1996 for the pro forma as adjusted consolidated
balance sheet data. See "Unaudited Pro Forma Consolidated Financial
Information."
(2) Reflects the recapitalization of the Company on September 29, 1995 and a
three-for-two stock split effective March 19, 1996.
(3) Depreciation and amortization is for the period then ended.
6
<PAGE> 11
RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should carefully consider the following risk factors in
evaluating an investment in the Common Stock offered hereby.
DEPENDENCE ON MANAGEMENT CONTRACTS AND LEASES
The principal sources of the Company's revenues are management contracts
and leases relating to parking facilities owned by unaffiliated property owners.
For fiscal 1994, 1995, and 1996 revenues from management contracts accounted for
26.1%, 25.2%, and 23.8%, respectively, and revenues from leased facilities
accounted for 69.8%, 70.5%, and 71.8%, respectively, of the Company's total
revenues. For the three month periods ended December 31, 1995 and 1996, revenues
from management contracts accounted for 24.3% and 22.5%, respectively, and
revenues from leased facilities accounted for 71.8% and 73.2%, respectively, of
the Company's total revenues. Management contracts, in general, are for terms of
one to three years, but are cancelable by the property owner on short notice.
Leases generally are for three to ten year terms. There can be no assurance that
the Company will be able to maintain or renew its management contracts and
leases on favorable terms. The loss, or renewal on less favorable terms, of a
substantial number of management contracts or leases could have a material
adverse effect on the Company's financial condition and results of operations.
Under its management contracts, the Company provides ancillary services such as
insurance, accounting, equipment leasing, and consulting. A material reduction
in the profit margins associated with these ancillary services provided under
its management contracts, caused by, among other things, increases in costs or
claims associated with, or reductions in the number of clients purchasing,
insurance provided by the Company could have a material adverse effect on the
Company's financial condition and results of operations. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business -- Litigation and Insurance."
DEPENDENCE ON PROPERTY PERFORMANCE
The Company's revenues and profitability are dependent on the performance
of the parking facilities it owns, leases, and manages. The Company's revenues
from leased and owned parking facilities consist of parking fees collected by
such facilities. For fiscal 1994, 1995, and 1996, revenues from leased and owned
facilities accounted for 73.9%, 74.8%, and 76.2%, respectively, of the Company's
revenues. For the three month periods ended December 31, 1995 and 1996, revenues
from leased and owned facilities accounted for 75.7% and 77.5%, respectively, of
the Company's revenues. The Company's leases generally require the Company to
make a fixed monthly lease payment regardless of the parking fees collected.
Some management contracts provide for payment to the Company based on a
percentage of gross revenues generated by the parking facility. Accordingly,
performance of the Company's parking facilities depends, in part, on the
Company's ability to negotiate favorable contract terms, the Company's ability
to control operating expenses, financial conditions prevailing generally and in
areas where parking facilities are located, the nature and extent of competitive
parking facilities in the area, and the real estate market generally. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
VARIATIONS IN QUARTERLY OPERATING RESULTS
The Company has experienced fluctuations in its quarterly revenues and
profitability. These fluctuations are caused by a variety of factors including
the timing of gains on sales of owned facilities; preopening costs; the effect
of weather on travel and transportation patterns; and local and national
economic conditions. There can be no assurance that fluctuations in revenues and
net earnings will not cause the market price of the Common Stock to fluctuate
substantially. Results for any particular quarter may not be indicative of
future results or results for the full fiscal year. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Quarterly
Results."
7
<PAGE> 12
INTEGRATION OF SQUARE ACQUISITION
The Company completed the Square Acquisition in January 1997. The Square
Acquisition increased the number of persons employed by the Company, the number
of facilities operated by the Company, and the geographic markets serviced by
the Company. The Company believes that it can successfully integrate and manage
the operations of Square, as well as achieve certain economies of scale. There
can be no assurance, however, that the Square Acquisition will be integrated
successfully into the Company's operations, that any cost savings or operating
synergies will be realized, or that Square will achieve levels of profitability
that justify the Company's investment therein. As with any acquisition
contemplated by the Company, the Square Acquisition may result in adverse
short-term effects on the Company's reported operating results, divert
management's attention, introduce difficulties in retaining, hiring and training
key personnel, and introduce risks associated with unanticipated problems or
legal liabilities, some or all of which could have a material adverse effect on
the Company's financial condition and results of operations. See
"Business -- Acquisitions."
ABILITY TO MANAGE GROWTH
The Company intends to continue to expand its business by adding management
contracts and leases and by acquiring additional parking facilities and
operators. The Company's growth will be affected by the results of operations of
added parking facilities which will depend upon contract terms, government
licenses and approvals, and local competitive environments. The nature of
licenses and approvals, and the timing and likelihood of obtaining them, vary
widely from state to state and country to country. The Company's growth will
also be directly affected by the Company's ability to obtain suitable financing
and on the competitive environment for acquisitions. Some of the acquired
operations may be located in geographic markets in which the Company has little
or no presence. Successful integration and management of additional facilities
will depend on a number of factors, many of which are beyond the Company's
control. The Company's growth plans will also place significant demands on the
Company's management and operating personnel and will require the Company to
improve its operational, financial, and management information systems. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources," and "Business -- Growth
Strategy," and "-- Operating Strategy."
CONTROL BY MR. CARELL AND FAMILY
Upon completion of the Offering, Monroe J. Carell, Jr., Chairman and Chief
Executive Officer of the Company, trusts established for the benefit of his
family, and foundations controlled by Mr. Carell and his family, will
beneficially own an aggregate of approximately 57% of the outstanding shares of
Common Stock (56% if the Underwriters' over-allotment option is exercised in
full). Accordingly, such persons will have majority control of the Company and
the ability to elect all members of the Board of Directors; to effect or prevent
a merger or a sale of assets; to adopt, amend, or repeal the Company's Amended
and Restated Charter and Bylaws; and to take certain other actions requiring the
vote or consent of the Company's shareholders. See "Principal and Selling
Shareholders."
VOLATILITY OF MARKET PRICE
From time to time, there may be significant volatility in the market price
of the Common Stock. The Company believes that the current market price of the
Common Stock reflects expectations that the Company will be able to continue to
operate its facilities profitably and to add management contracts and leases and
acquire new facilities at a significant rate and operate them profitably. If the
Company is unable to operate its facilities profitably or add new facilities at
a pace that reflects the expectations of the market, investors could sell shares
of the Common Stock at or after the time that it becomes apparent that the
expectations may not be realized, resulting in a decrease in the market price of
the Common Stock. In addition to quarterly operating results of the Company,
changes in earnings estimates by analysts, general conditions in the economy,
the financial markets, or the parking industry, or other developments affecting
the Company could cause the market price of the Common Stock to fluctuate
substantially. In recent years the stock market has experienced extreme price
and volume fluctuations. This volatility has had a significant effect on the
market prices of securities issued by many companies for reasons unrelated to
their operating performance.
8
<PAGE> 13
COMPETITION
The parking industry is highly competitive. The Company's competitors range
from small single-lot operators to large regional and national multi-facility
operators, and include municipal and other governmental entities. Some of the
Company's present and potential competitors have or may obtain greater financial
and marketing resources than those of the Company. Furthermore, the Company
competes for qualified management personnel with other parking facility
operators, with property management companies, and with property owners. There
can be no assurance that the Company will not encounter increased competition in
the future, due to, among other things, increased construction of parking
facilities, which could limit its ability to attract customers, expand its
business, or maintain profitable pricing levels, and which could have a material
adverse effect on the Company's financial condition or results of operations.
See "Business -- Competition."
FOREIGN CURRENCY EXCHANGE RATES
The Company operates in the United Kingdom, Germany, Mexico, Malaysia,
Canada, and Spain, maintains a business development office in the Netherlands,
and intends to expand its business in these and other international locations.
The Company receives revenues and incurs expenses in various foreign currencies
in connection with its foreign operations and, as a result, the Company is
subject to currency exchange rate fluctuations. The Company intends to continue
to invest in foreign leased or owned parking facilities, either independently or
through joint ventures, where appropriate, and may become increasingly exposed
to foreign currency fluctuations. Presently, the Company has limited exposure to
foreign currency risk and anticipates implementing a hedge program if such risk
materially increases. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
DEPENDENCE ON KEY MANAGEMENT
The success of the Company is highly dependent on the continued services of
the Company's management team. The loss of services of one or more members of
the Company's senior management team could have a material adverse effect on the
Company's financial condition and results of operations. Although the Company
has entered into employment agreements with, and historically has been
successful in retaining the services of, its senior management, there can be no
assurance that the Company will be able to retain such personnel in the future.
The Company is a beneficiary of certain life insurance policies on certain key
executives ranging from $100,000 to approximately $1.1 million.
ENVIRONMENTAL AND OTHER REGULATION
Under various federal, state, and local environmental laws, ordinances, and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under, or in such property. Such laws typically impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
presence of such hazardous or toxic substances. In connection with the ownership
or operation of parking facilities, the Company may be potentially liable for
such costs. Although the Company is currently not aware of any material
environmental claims pending or threatened against it or any of its owned or
operated parking facilities, there can be no assurance that a material
environmental claim will not be asserted against the Company or against its
owned or operated parking facilities. The costs of defending against claims of
liability, or of remediating a contaminated property, could have a material
adverse effect on the Company's financial condition or results of operations.
Various other governmental regulations affect the Company's operation of
parking facilities, both directly and indirectly, including air quality laws,
licensing laws, and the Americans with Disabilities Act of 1990 (the "ADA").
Under the ADA, all public accommodations, including parking facilities, are
required to meet certain federal requirements related to access and use by
disabled persons. Although management believes that the parking facilities it
owns and operates are in substantial compliance with these requirements, a
determination that the Company or the facility owner is not in compliance with
the ADA could result in the imposition of fines or damage awards against the
Company.
9
<PAGE> 14
BENEFITS OF OFFERING TO MR. CARELL AND FAMILY
The consummation of the Offering will cause substantial benefits to accrue
to Mr. Carell and certain members of his family. Of the 4,100,000 shares being
offered hereby, 800,000 shares are being offered by the Selling Shareholders,
which will result in the Selling Shareholders receiving estimated net proceeds
from the Offering, after deduction of the underwriting discount and estimated
offering expenses payable by the Selling Shareholders, of approximately $21.3
million. The remaining shares held by the Selling Shareholders will have a
market value of approximately $328.5 million. See "Principal and Selling
Shareholders."
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), which are intended to be covered by the safe
harbors created thereby. Those statements include, but may not be limited to,
the discussions of the Company's expectations concerning its future
profitability, the discussion of the Company's strategic relationships, and the
Company's operating and growth strategy, including possible strategic
acquisitions. Investors are cautioned that all forward-looking statements
involve risks and uncertainties including, without limitation, the factors set
forth under the caption "Risk Factors" in this Prospectus. Although the Company
believes that the assumptions underlying the forward-looking statements
contained herein are 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.
10
<PAGE> 15
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 3,300,000 shares of
Common Stock offered by the Company hereby are estimated to be approximately
$87.6 million (approximately $98.6 million if the Underwriters' over-allotment
option is exercised in full) after deduction of the underwriting discount and
estimated offering expenses payable by the Company. The Company will not receive
any proceeds from the sale of Common Stock by the Selling Shareholders.
The Company intends to use the net proceeds to reduce the $135.0 million of
outstanding indebtedness under the Credit Facility as of March 6, 1997, which
indebtedness was used to fund the Acquisitions, including the retirement of
certain Square indebtedness assumed by the Company. The Credit Facility is
unsecured and matures January 31, 2000; however, the Company may request an
extension of the term until January 31, 2001. The Company is obligated to reduce
the aggregate amount outstanding under the Credit Facility to $120 million by
April 30, 1997. Amounts outstanding under the Credit Facility bear interest at
one of two rates, at the Company's option: either (i) the greater of the bank's
prime rate or the federal funds rate plus 0.50%, or (ii) a rate equal to LIBOR
plus a margin ranging from 0.25% to 1.50%. As of March 6, 1997, the interest
rate on the Credit Facility was 6.96%. Following the Offering and the
application of the net proceeds as set forth herein, the Company anticipates
that approximately $72.6 million will be available for borrowing under the
Credit Facility. The Company believes that the net proceeds from the Offering,
together with cash flows from operations and borrowings under the Credit
Facility, will be sufficient to finance the Company's operations for the
foreseeable future.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Company's Common Stock is listed on the NYSE under the symbol "PK." The
following table sets forth, for the periods indicated, the high and low sales
prices for the Common Stock as reported by the NYSE.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL 1996
First Quarter (since the Company's initial public offering
on October 10, 1995)...................................... $19.67 $12.00
Second Quarter.............................................. 27.25 18.00
Third Quarter............................................... 34.13 23.75
Fourth Quarter.............................................. 33.25 23.63
FISCAL 1997
First Quarter............................................... $36.88 $31.63
Second Quarter (through March 19, 1997)..................... 34.13 26.63
</TABLE>
On March 19, 1997, the last reported sale price of the Common Stock on the
NYSE was $28.00 per share. At March 3, 1997, there were approximately 6,400
holders of the Common Stock, based on the number of record holders and the
number of individual participants represented by security position listings.
On February 28, 1997, the Company declared a quarterly cash dividend of
$0.0225 per share, payable April 11, 1997 to shareholders of record on March 31,
1997. The Company had previously declared a dividend of $0.02 per share
following the end of each quarter since its initial public offering in October
1995. The Board of Directors intends to declare a cash dividend each quarter
depending on the Company's profitability and capital necessary to finance
operations and expansion. The Company reserves the right, however, to retain all
or a substantial portion of its earnings to finance the operation and expansion
of the Company's business. As a result, the future payment of dividends will
depend upon, among other things, the Company's profitability, capital
requirements, financial condition, growth, business opportunities, and other
factors that the Board of Directors may deem relevant, including restrictions in
any then-existing credit agreement. The Credit Facility contains certain
restrictions on the Company's ability to pay dividends; however, the Company
does not believe these restrictions limit its ability to pay currently
anticipated cash dividends.
11
<PAGE> 16
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
December 31, 1996 (i) on an actual basis, (ii) on a pro forma basis as if the
Square Acquisition had occurred on such date, and (iii) on a pro forma as
adjusted basis to reflect the Square Acquisition as if it had occurred on such
date and the issuance and sale of the 3,300,000 shares of Common Stock offered
by the Company hereby, at an assumed public offering price of $28.00 per share,
and the application of the estimated net proceeds therefrom to reduce
indebtedness related to the Acquisitions as described under "Use of Proceeds."
This table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the "Unaudited
Pro Forma Consolidated Financial Information" included elsewhere in this
prospectus, and the Consolidated Financial Statements and Notes thereto
incorporated herein by reference.
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Long-term debt.............................................. $ 67,200 $139,300 $ 51,700
-------- -------- --------
Shareholders' equity:
Preferred Stock, $0.01 par value, 1,000,000 shares
authorized, no shares outstanding...................... -- -- --
Common Stock, $0.01 par value, 50,000,000 shares
authorized; 17,490,100(1) issued and outstanding,
actual and pro forma; 20,790,100(1) shares issued and
outstanding, pro forma as adjusted..................... 175 175 208
Additional paid-in capital................................ 31,913 31,913 119,480
Foreign currency translation adjustment................... (64) (64) (64)
Retained earnings......................................... 48,999 48,999 48,999
Deferred compensation on restricted stock, net............ (620) (620) (620)
-------- -------- --------
Total shareholders' equity................................ 80,403 80,403 168,003
-------- -------- --------
Total capitalization.............................. $147,603 $219,703 $219,703
======== ======== ========
</TABLE>
- ---------------
(1) Does not include 343,250 shares of Common Stock issuable upon the exercise
of stock options granted under the Company's stock option plans at December
31, 1996.
12
<PAGE> 17
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial information of the
Company is based on (a) the historical consolidated financial statements of the
Company, (b) the historical statements of direct revenues and expenses of Civic
Center Corporation ("Civic Center"), (c) the historical financial statements of
Civic, and (d) the historical consolidated financial statements of Square.
The historical consolidated balance sheet of the Company as of December 31,
1996 presents the consolidated financial position of the Company on such date,
and reflects the Civic Acquisition on December 31, 1996 using the purchase
method of accounting, based on a preliminary allocation of the purchase price.
The unaudited pro forma consolidated balance sheet as of December 31, 1996
assumes that the Square Acquisition had occurred on December 31, 1996.
The historical statement of earnings for the year ended September 30, 1996
reflects (a) the historical results of operations of the Company for its fiscal
year then ended, (b) the historical direct revenues and expenses of the parking
garages of Civic Center, which were managed by the Company and later acquired by
the Company from Civic, for the period from January 1, 1996 to March 20, 1996,
(c) the historical results of operations of Civic for the period from March 21,
1996 to December 31, 1996, Civic's fiscal year end, and (d) the historical
results of operations of Square for its fiscal year ended December 31, 1996. The
historical statement of earnings for the quarter ended December 31, 1996
reflects the historical results of operations of the Company for the first
quarter of its fiscal year 1997 and the historical results of operations of
Civic and Square for their respective quarters ended December 31, 1996. The
unaudited pro forma consolidated statement of earnings was prepared assuming
that the Acquisitions were consummated on October 1, 1995.
The unaudited pro forma consolidated financial information has been
prepared based on the historical financial statements of the Company and the
acquired entities, reclassified as necessary to conform with the presentation
used in the consolidated financial statements of the Company, and gives effect
to (a) the Acquisitions under the purchase method of accounting, based on
preliminary allocations of the respective purchase prices, (b) the financing of
the Acquisitions, (c) certain estimated operational and financial combination
benefits which are a direct result of the Square Acquisition, and (d) the
assumptions and adjustments which are deemed appropriate by management of the
Company and which are described in the accompanying notes to the pro forma
consolidated financial information.
The pro forma as adjusted consolidated financial information reflects (i)
the Acquisitions, and (ii) the sale of 3,300,000 shares of Common Stock offered
by the Company hereby at an assumed public offering price of $28.00 per share
and the application of the estimated net proceeds received therefrom to reduce
indebtedness related to the Acquisitions (see "Use of Proceeds") as if such
transactions had been consummated on October 1, 1995 for purposes of the pro
forma as adjusted consolidated statements of earnings data and on December 31,
1996 for the pro forma as adjusted consolidated balance sheet data.
This pro forma and pro forma as adjusted consolidated financial information
may not be indicative of the results that would have occurred if the
Acquisitions had been in effect on the dates indicated or which may be obtained
in the future. Such pro forma and pro forma as adjusted consolidated financial
information should be read in conjunction with such historical financial
statements and notes thereto, which are incorporated by reference herein. See
"Information Incorporated by Reference."
13
<PAGE> 18
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
YEAR ENDED SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
CIVIC CIVIC
COMPANY SQUARE PRO FORMA 1/1-3/20/96 3/21-12/31/96
HISTORICAL HISTORICAL ADJUSTMENTS CONSOLIDATED HISTORICAL HISTORICAL
---------- ---------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Parking......................... $109,272 $67,869 -- $177,141 $1,980 $8,866
Management contract............. 34,044 -- -- 34,044 -- --
-------- ------- ------ -------- ------ ------
Total revenues................ 143,316 67,869 -- 211,185 1,980 8,866
Costs and expenses:
Cost of parking................. 99,196 56,882 (92)(C) 155,986 626 3,884
Cost of management contracts.... 9,769 -- -- 9,769 -- --
Amortization of intangibles..... -- -- 1,208(B) 1,208 -- --
Acquisition costs............... -- 2,864 (2,864)(F) -- -- --
General and administrative...... 17,419 8,781 (4,356)(H) 21,457 -- 307
-- (387)(G)
-------- ------- ------ -------- ------ ------
Total costs and expenses...... 126,384 68,527 (6,491) 188,420 626 4,191
-------- ------- ------ -------- ------ ------
Operating earnings (loss)....... 16,932 (658) 6,491 22,765 1,354 4,675
Other income (expenses):
Interest income................. 2,303 -- -- 2,303 -- 7
Interest expense................ -- (1,296) (3,359)(E) (4,655) -- (3,250)
Net gains on sales of property
and equipment................. 1,192 -- -- 1,192 -- --
Equity in partnership and joint
venture earnings.............. 641 -- -- 641 -- --
Write-off of assets............. -- (964) 612(G) (352) -- --
Reimbursement of previously
incurred fixed costs.......... -- 1,049 -- 1,049 -- --
Gain from litigation
settlement.................... -- 651 -- 651 -- --
-------- ------- ------ -------- ------ ------
Earnings (loss) before
income taxes............ 21,068 (1,218) 3,744 23,594 1,354 1,432
Income tax expense................ 7,232 470 1,227(I) 8,929 -- --
-------- ------- ------ -------- ------ ------
Net earnings (loss)............. $ 13,836 $(1,688) $2,517 $ 14,665 $1,354 $1,432
======== ======= ====== ======== ====== ======
Net earnings per share............ $ 0.79 $ 0.84
======== ========
Weighted average shares and share
equivalents..................... 17,491 17,491
<CAPTION>
PRO FORMA
PRO FORMA OFFERING AS ADJUSTED
ADJUSTMENTS CONSOLIDATED ADJUSTMENTS CONSOLIDATED
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Parking......................... $ 188(K) $187,855 -- $187,855
(320)(J)
Management contract............. (317)(A) 33,727 -- 33,727
------- -------- ------ --------
Total revenues................ (449) 221,582 -- 221,582
Costs and expenses:
Cost of parking................. 73(C) 160,118 -- 160,118
(317)(A)
(134)(J)
Cost of management contracts.... -- 9,769 -- 9,769
Amortization of intangibles..... -- 1,208 -- 1,208
Acquisition costs............... -- -- -- --
General and administrative...... 15(K) 21,779 21,779
------- -------- ------ --------
Total costs and expenses...... (363) 192,874 -- 192,874
------- -------- ------ --------
Operating earnings (loss)....... (86) 28,708 -- 28,708
Other income (expenses):
Interest income................. (1,130)(D) 1,180 -- 1,180
Interest expense................ (1,286)(E) (9,191) $5,913 (3,278)
Net gains on sales of property
and equipment................. -- 1,192 -- 1,192
Equity in partnership and joint
venture earnings.............. -- 641 -- 641
Write-off of assets............. -- (352) -- (352)
Reimbursement of previously
incurred fixed costs.......... -- 1,049 -- 1,049
Gain from litigation
settlement.................... -- 651 -- 651
------- -------- ------ --------
Earnings (loss) before
income taxes............ (2,502) 23,878 5,913 29,791
Income tax expense................ 103(I) 9,032 2,129 11,161
------- -------- ------ --------
Net earnings (loss)............. $(2,605) $ 14,846 $3,784 $ 18,630
======= ======== ====== ========
Net earnings per share............ $ 0.85 $ 0.90
======== ========
Weighted average shares and share
equivalents..................... 17,491 20,791
</TABLE>
See accompanying notes to pro forma consolidated financial information.
14
<PAGE> 19
CENTRAL PARKING CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS
THREE MONTHS ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
COMPANY SQUARE PRO FORMA CIVIC PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS CONSOLIDATED HISTORICAL ADJUSTMENTS CONSOLIDATED
---------- ---------- ----------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Parking.............. $32,085 $18,921 $ -- $51,006 $ 2,448 $ (55)(J) $53,399
Management
contract........... 9,338 -- -- 9,338 -- (53)(A) 9,285
------- ------- ------- ------- ------- ----- -------
Total
revenues..... 41,423 18,921 -- 60,344 2,448 (108) 62,684
Costs and expenses:
Cost of parking...... 29,085 15,990 (23)(C) 45,052 1,313 (85)(C) 46,194
(53)(A)
(33)(J)
Cost of management
contracts.......... 2,501 -- -- 2,501 -- -- 2,501
Amortization of
intangibles........ -- -- 302(B) 302 -- -- 302
Acquisition Costs.... -- 2,864 (2,864)(F) -- -- -- --
General and
administrative..... 4,708 2,300 (1,164)(H) 5,747 173 -- 5,920
(97)(G)
------- ------- ------- ------- ------- ----- -------
Total costs and
expenses..... 36,294 21,154 (3,846) 53,602 1,486 (171) 54,917
------- ------- ------- ------- ------- ----- -------
Operating earnings
(loss)............. 5,129 (2,233) 3,846 6,742 962 63 7,767
Other income
(expenses):
Interest income...... 625 -- -- 625 2 (285)(D) 342
Interest expense..... (7) 232 (1,357)(E) (1,132) (1,008) (135)(E) (2,275)
Net gains on sales of
property and
equipment.......... 3 -- -- 3 -- -- 3
Equity in partnership
and joint venture
earnings........... 250 -- -- 250 -- -- 250
Write-off of
Assets............. -- (964) 612(G) (352) -- -- (352)
------- ------- ------- ------- ------- ----- -------
Earnings (loss)
before income
taxes........ 6,000 (2,965) 3,101 6,136 (44) (357) 5,735
Income tax expense..... 2,101 38 179(I) 2,318 -- (145)(I) 2,173
------- ------- ------- ------- ------- ----- -------
Net earnings
(loss)....... $ 3,899 $(3,003) $ 2,922 $ 3,818 $ (44) $(212) $ 3,562
======= ======= ======= ======= ======= ===== =======
Net earnings per
share................ $ 0.22 $ 0.22 $ 0.20
======= ======= =======
Weighted average shares
and share
equivalents.......... 17,620 17,620 17,620
<CAPTION>
PRO FORMA
OFFERING AS ADJUSTED
ADJUSTMENTS CONSOLIDATED
----------- ------------
<S> <C> <C>
Revenues:
Parking.............. -- $53,399
Management
contract........... -- 9,285
------ -------
Total
revenues..... -- 62,684
Costs and expenses:
Cost of parking...... -- 46,194
Cost of management
contracts.......... -- 2,501
Amortization of
intangibles........ -- 302
Acquisition Costs.... -- --
General and
administrative..... -- 5,920
------ -------
Total costs and
expenses..... -- 54,917
------ -------
Operating earnings
(loss)............. -- 7,767
Other income
(expenses):
Interest income...... 342
Interest expense..... $1,478 (797)
Net gains on sales of
property and
equipment.......... -- 3
Equity in partnership
and joint venture
earnings........... -- 250
Write-off of
Assets............. -- (352)
------ -------
Earnings (loss)
before income
taxes........ 1,478 7,213
Income tax expense..... 532 2,705
------ -------
Net earnings
(loss)....... $ 946 $ 4,508
====== =======
Net earnings per
share................ $ 0.22
=======
Weighted average shares
and share
equivalents.......... 20,920
</TABLE>
See accompanying notes to pro forma consolidated financial information.
15
<PAGE> 20
CENTRAL PARKING CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
EFFECTS OF
SQUARE
ACQUISITION
HISTORICAL AND PRO FORMA
------------------ RELATED PRO FORMA OFFERING AS ADJUSTED
COMPANY SQUARE FINANCING CONSOLIDATED ADJUSTMENTS CONSOLIDATED
-------- ------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................ $ 5,850 $ 2,266 $ -- $ 8,116 -- $ 8,116
Management accounts receivable........... 8,594 -- -- 8,594 -- 8,594
Accounts and current portion of notes
receivable -- other.................... 3,356 1,586 -- 4,942 -- 4,942
Prepaid expenses......................... 6,203 2,619 -- 8,822 -- 8,822
Other current assets..................... -- 446 -- 446 -- 446
Deferred income taxes.................... 8 419 -- 427 -- 427
Refundable income taxes.................. -- 48 -- 48 -- 48
-------- ------- ------- -------- -------- --------
Total current assets.............. 24,011 7,384 -- 31,395 -- 31,395
Investments, at amortized cost............. 4,551 -- -- 4,551 -- 4,551
Notes receivable, less current portion..... 8,027 -- -- 8,027 -- 8,027
Property, equipment, and leasehold
improvements, net........................ 131,073 30,098 30,847 192,018 -- 192,018
Contract rights, net....................... 5,601 -- -- 5,601 -- 5,601
Goodwill, net.............................. -- -- 27,724 27,724 -- 27,724
Investment in limited partnerships......... 1,240 -- -- 1,240 -- 1,240
Investment in general partnerships......... 1,772 -- -- 1,772 -- 1,772
Non-current deferred taxes................. -- 2,464 (2,464) -- -- --
Other assets............................... 2,525 5,148 500 6,224 -- 6,224
(1,949)
-------- ------- ------- -------- -------- --------
$178,800 $45,094 $54,658 $278,552 -- $278,552
======== ======= ======= ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt........ $ -- $ 3,762 $ -- $ 3,762 -- $ 3,762
Accounts payable......................... 11,318 1,170 1,559 14,047 -- 14,047
Accrued expenses......................... 6,023 9,676 1,343 17,042 -- 17,042
Accrued local rent tax................... -- 2,026 -- 2,026 -- 2,026
Management accounts payable.............. 6,387 -- -- 6,387 -- 6,387
Income taxes payable..................... 3,099 -- -- 3,099 -- 3,099
Other current liabilities................ -- 373 -- 373 -- 373
-------- ------- ------- -------- -------- --------
Total current liabilities......... 26,827 17,007 2,902 46,736 -- 46,736
Long-term debt............................. 67,200 19,419 52,681 139,300 $(87,600) 51,700
Other liabilities.......................... 2,984 3,959 -- 6,943 -- 6,943
Deferred income taxes...................... 1,386 -- 3,784 5,170 -- 5,170
-------- ------- ------- -------- -------- --------
Total liabilities................. 98,397 40,385 59,367 198,149 (87,600) 110,549
Shareholders' equity:
Common Stock............................. 175 13 (13) 175 33 208
Additional paid-in capital............... 31,913 3,408 (3,408) 31,913 87,567 119,480
Foreign currency translation
adjustment............................. (64) (212) 212 (64) -- (64)
Retained earnings........................ 48,999 1,736 (1,736) 48,999 -- 48,999
Deferred compensation on restricted
stock, net............................. (620) -- -- (620) -- (620)
Treasury stock at cost................... -- (236) 236 -- --
-------- ------- ------- -------- -------- --------
Total shareholders' equity........ 80,403 4,709 (4,709) 80,403 87,600 168,003
-------- ------- ------- -------- -------- --------
$178,800 $45,094 $54,658 $278,552 $ -- $278,552
======== ======= ======= ======== ======== ========
</TABLE>
See accompanying notes to pro forma consolidated financial information
16
<PAGE> 21
CENTRAL PARKING CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
The accompanying pro forma consolidated financial information presents the
pro forma consolidated financial condition of the Company as of December 31,
1996 and the pro forma consolidated results of operations for the three months
ended December 31, 1996 and the fiscal year ended September 30, 1996.
On December 31, 1996, the Company acquired for cash 100% of the ownership
units in Civic. On January 18, 1997, the Company completed the acquisition of
Square, through a cash tender offer for all the outstanding shares of common
stock of Square. The Company's historical consolidated balance sheet reflects
the acquired net assets and effects of financing of Civic, and the accompanying
pro forma consolidated balance sheet includes the acquired assets and
liabilities and effects of the related financing, as if Square had been acquired
on December 31, 1996. The accompanying pro forma consolidated statements of
earnings reflect the pro forma results of operations of the Company, as
adjusted, as if Civic and Square had been acquired on October 1, 1995.
PRO FORMA CONSOLIDATED BALANCE SHEET
The adjustments in the pro forma consolidated balance sheet are to reflect
(i) the preliminary allocation of the purchase price of Square based upon
estimates of fair value of the assets and liabilities acquired, (ii) the effects
of related borrowings, $1.6 million of transaction costs, and $1.3 million
estimated severance costs, (iii) the recording of intangible assets acquired
(goodwill of $27.7 million and non-compete agreements of $500,000), (iv) the
elimination of deferred expenses, and (v) the related tax effects. The effect of
the Company's acquisition of Civic is reflected in the Company's historical
information, based upon preliminary purchase price allocations, as the
acquisition was completed December 31, 1996. Final purchase price allocations
are not expected to be materially different from the preliminary allocations.
PRO FORMA CONSOLIDATED STATEMENTS OF EARNINGS
The adjustments reflected in the pro forma consolidated statements of
earnings are as follows:
Three months ended December 31, 1996
(A) To eliminate management contract revenue and expense related to
the prior management agreement between Civic and the Company.
(B) To record amortization of the intangible assets. The goodwill and
non-compete are being amortized over periods of 25 and 5 years,
respectively.
(C) To reflect the net change in depreciation resulting from the fair
value adjustments and changes in estimated asset lives.
(D) To reflect a decrease in income earned on cash investments used
for purposes of the acquisition of Civic.
(E) To reflect interest on acquisition related borrowings. Interest is
calculated at an annual rate of 6.75%.
(F) To eliminate the effect of acquisition costs reflected in Square's
historical results of operations and directly related to Square's sale to
the Company.
(G) To eliminate the effect of Square's (i) scheduled amortization of
deferred expenses and financing costs, and (ii) the write-off of $612,000
deferred financing costs directly related to the acquisition.
(H) To record the effect of estimated cost savings relating to general
and administrative expenses, including excess personnel, to be eliminated
prospectively in connection with the Square acquisition.
17
<PAGE> 22
CENTRAL PARKING CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION -- (CONTINUED)
(I) To record estimated federal and state income taxes at a combined
rate of 36%.
(J) To eliminate the revenues and expenses related to a bus lot not
acquired, but included in the historical financial statements of Civic for
the period from March 21, 1996 through December 31, 1996.
Year ended September 30, 1996
(A) To eliminate management contract revenue and expense related to
the prior management agreement between Civic and the Company.
(B) To record amortization of the intangible assets. The goodwill and
non-compete are being amortized over periods of 25 and 5 years,
respectively.
(C) To reflect the net change in depreciation resulting from the fair
value adjustments and changes in estimated asset lives.
(D) To reflect a decrease in income earned on cash investments used
for purposes of the acquisition of Civic.
(E) To reflect interest on acquisition related borrowings. Interest is
calculated at an annual rate of 6.75%.
(F) To eliminate the effect of acquisition costs reflected in Square's
historical results of operations and directly related to Square's sale to
the Company.
(G) To eliminate the effect of Square's (i) scheduled amortization of
deferred expenses and financing costs, and (ii) the write-off of $612,000
deferred financing costs directly related to the acquisition.
(H) To record the effect of estimated cost savings relating to general
and administrative expenses, including excess personnel, to be eliminated
prospectively in connection with the Square Acquisition.
(I) To record estimated federal and state income taxes at a combined
rate of 36%.
(J) To eliminate the revenues and expenses related to a bus lot not
acquired, but included in the historical financial statements of Civic for
the period March 21, 1996 through December 31, 1996.
(K) To record commercial rental income and certain property expenses
excluded from the Civic Center historical statement of direct revenues and
expenses for the period January 1 through March 20, 1996.
PRO FORMA AS ADJUSTED CONSOLIDATED FINANCIAL INFORMATION
The pro forma as adjusted consolidated financial information was prepared
assuming (i) the Acquisitions, and (ii) the sale of 3,300,000 shares of Common
Stock offered by the Company hereby at an assumed public offering price of
$28.00 per share and the application of the estimated net proceeds received
therefrom to reduce indebtedness related to the Acquisitions (see "Use of
Proceeds" included elsewhere in this prospectus), were consummated on October 1,
1995 for purposes of the pro forma as adjusted consolidated statements of
earnings amounts and on December 31, 1996 for the pro forma as adjusted
consolidated balance sheet amounts.
18
<PAGE> 23
SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION
Set forth below is selected historical and unaudited pro forma consolidated
financial data of the Company for each of the periods indicated. The historical
statement of earnings data, per share data, balance sheet data, and other data
as of and for the years ended September 30, 1994, 1995, and 1996 were derived
from the audited consolidated financial statements of the Company. The
historical statement of earnings data, per share data, and other data for the
three month periods ended December 31, 1995 and 1996, and the balance sheet data
as of December 31, 1996 were derived from the unaudited consolidated financial
statements of the Company. The historical results of operations for the three
months ended December 31, 1996 are not necessarily indicative of the actual
results that may be experienced for fiscal 1997. The selected unaudited pro
forma financial information is not necessarily representative of what the
Company's results of operations or financial position would have been had the
Acquisitions in fact occurred on the respective dates set forth in the
footnotes, and is not intended to project the Company's results of operations or
financial position for any future period or date. The information set forth
below should be read in conjunction with the Company's historical Consolidated
Financial Statements the Notes thereto incorporated by reference herein, and the
"Unaudited Pro Forma Consolidated Financial Information" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED SEPTEMBER 30, ENDED DECEMBER 31,
------------------------------------------------------ ------------------------------------------
PRO FORMA PRO FORMA
PRO AS PRO AS
FORMA ADJUSTED FORMA ADJUSTED
1994 1995 1996 1996(1) 1996(1)(2) 1995 1996 1996(1) 1996(1)(2)
------- -------- -------- -------- ----------- ------- ------- -------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
DATA:
Revenues:
Parking............... $82,890 $ 94,383 $109,272 $187,855 $187,855 $25,163 $32,085 $53,399 $53,399
Management contract... 29,278 31,772 34,044 33,727 33,727 8,088 9,338 9,285 9,285
------- -------- -------- -------- -------- ------- ------- ------- -------
Total
revenues...... 112,168 126,155 143,316 221,582 221,582 33,251 41,423 62,684 62,684
Costs and expenses:
Cost of parking....... 76,952 87,192 99,196 160,118 160,118 22,513 29,085 46,194 46,194
Cost of management
contracts........... 9,812 9,650 9,769 9,769 9,769 2,524 2,501 2,501 2,501
General and
administrative...... 14,196 15,711 17,419 22,987 22,987 4,079 4,708 6,222 6,222
------- -------- -------- -------- -------- ------- ------- ------- -------
Total costs and
expenses...... 100,960 112,553 126,384 192,874 192,874 29,116 36,294 54,917 54,917
------- -------- -------- -------- -------- ------- ------- ------- -------
Operating earnings...... 11,208 13,602 16,932 28,708 28,708 4,135 5,129 7,767 7,767
------- -------- -------- -------- -------- ------- ------- ------- -------
Interest expense........ 39 -- -- 9,191 3,278 -- 7 2,275 797
Other income (net)...... 760 1,824 2,944 3,169 3,169 753 875 240 240
Net gains on sales of
property and
equipment............. 2,214 81 1,192 1,192 1,192 41 3 3 3
Earnings before income
taxes................. 14,143 15,507 21,068 23,878 29,791 4,929 6,000 5,735 7,213
Income taxes............ 5,179 5,563 7,232 9,032 11,161 1,701 2,101 2,173 2,705
------- -------- -------- -------- -------- ------- ------- ------- -------
Net earnings............ 8,964 9,944 13,836 14,846 18,630 3,228 3,899 3,562 4,508
======= ======== ======== ======== ======== ======= ======= ======= =======
PER SHARE DATA:
Net earnings per
common share(3)..... $ 0.58 $ 0.65 $ 0.79 $ 0.85 $ 0.90 $ 0.19 $ 0.22 $ 0.20 $ 0.22
======= ======== ======== ======== ======== ======= ======= ======= =======
Weighted average
shares common
shares(3)........... 15,372 15,372 17,491 17,491 20,791 17,216 17,620 17,620 20,920
Dividends per common
share(3)............ -- -- $ 0.08 $ 0.08 $ 0.08 $ 0.02 $ 0.02 $ 0.02 $ 0.02
------- -------- -------- -------- -------- ------- ------- ------- -------
</TABLE>
19
<PAGE> 24
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
---------------------------- ---------------------------------------
PRO PRO FORMA
1994 1995 1996 ACTUAL FORMA(4) AS ADJUSTED(2)(4)
------- ------- -------- -------- -------- -----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents...... $12,026 $10,218 $ 28,605 $ 5,850 $ 8,116 $ 8,116
Working capital................ 1,987 2,676 19,707 (2,816) (15,341) (15,341)
Total assets................... 60,029 70,440 107,212 178,800 278,552 278,552
Long-term debt, less current
portion...................... -- -- -- 67,200 139,300 51,700
Shareholders' equity........... 31,861 41,360 76,793 80,403 80,403 168,003
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, DECEMBER 31,
------------------------------------ -----------------------
PRO FORMA PRO FORMA
1994 1995 1996 1996(1) 1995 1996 1996(1)
------ ------ ------ --------- ---- ---- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER DATA:
Depreciation and amortization....... $2,594 $2,882 $3,420 $4,609 $784 $942 $1,136
</TABLE>
- ---------------
(1) Gives effect to the Acquisitions, including the incurrence of related
indebtedness, as if they had occurred on October 31, 1995. See "Unaudited
Pro Forma Consolidated Financial Information."
(2) Adjusted to reflect the sale of the 3,300,000 shares of Common Stock offered
by the Company hereby at an assumed public offering price of $28.00 per
share and the application of the estimated net proceeds received therefrom
to reduce indebtedness related to the Acquisitions as described under "Use
of Proceeds" and "Unaudited Pro Forma Consolidated Financial Information."
(3) Reflects the recapitalization of the Company on September 29, 1995 and a
three-for-two stock split effective March 19, 1996. See Note 9(a) and 9(c)
to Consolidated Financial Statements for fiscal year 1996 incorporated by
reference herein.
(4) Gives effect to the Square Acquisition, including the incurrence of related
indebtedness, as if it had occurred on December 31, 1996. See "Unaudited Pro
Forma Consolidated Financial Information."
20
<PAGE> 25
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the results of operations should be read in
conjunction with the Company's Consolidated Financial Statements and Notes
thereto, which are incorporated by reference herein.
OVERVIEW
The Company operates facilities under three types of arrangements: leases,
fee ownership, and management contracts.
Parking revenues consist of the Company's revenues from leased and owned
facilities. Cost of parking relates to both leased and owned facilities and
includes rent, payroll and related benefits, depreciation (if applicable),
maintenance, insurance, and general operating expenses.
Parking revenues from leased facilities were $78.3 million, $89.0 million,
and $102.9 million for fiscal 1994, 1995, and 1996, respectively. For the three
months ended December 31, 1995 and 1996, parking revenues from leased facilities
were $23.9 million and $30.3 million, respectively. Leases generally provide for
a contractually established payment to the facility owner which is either a
fixed annual amount, a percentage of gross revenues, or a combination thereof.
As a result, the Company's revenues and profits in its lease arrangements are
dependent upon the performance of the facility. Leased facilities require a
longer commitment and a larger capital investment by the Company than managed
facilities but generally provide a longer-term source of revenue and a greater
opportunity for revenue and earnings growth. Under its leases, the Company is
typically responsible for all facets of the parking operations, except for
structural, mechanical, electrical maintenance or repairs, or property taxes.
Lease arrangements are typically for terms of three to ten years, with renewal
options.
Parking revenues from owned facilities were $4.6 million, $5.4 million, and
$6.3 million for fiscal 1994, 1995, and 1996, respectively. For the three months
ended December 31, 1995 and 1996, parking revenues from owned facilities were
$1.3 million and $1.8 million, respectively. Ownership of parking facilities,
either independently or through joint ventures, typically requires a larger
capital investment than managed or leased facilities, but provides maximum
control over the operation of the parking facility and the greatest profit
potential of the three types of operating arrangements. As the owner, all
changes in facility revenue and expenses flow directly to the Company.
Additionally, the Company has the potential to realize appreciation in the value
of the underlying real estate if the property is sold. The Company assumes
complete responsibility for all aspects of each owned property, including all
structural, mechanical, and electrical maintenance, repairs, and property taxes.
Joint venture operations are accounted for under the equity method and are
reflected through equity in partnership and joint venture earnings.
Management contract revenues were $29.3 million, $31.8 million, and $34.0
million for fiscal 1994, 1995, and 1996, respectively. For the three months
ended December 31, 1995 and 1996, management contract revenues were $8.1 million
and $9.3 million, respectively. Management contract revenues consist of
management fees (both fixed and percentage of revenues) and fees for ancillary
services such as insurance, accounting, equipment leasing, and consulting. The
cost of such management contracts includes insurance premiums and claims and
other indirect overhead. The Company's responsibilities under a management
contract include hiring, training, and staffing parking personnel and providing
collections, accounting, recordkeeping, insurance, and facility marketing
services. In general, the Company is not responsible under its management
contracts for structural, mechanical or electrical maintenance or repairs, for
providing security or guard services, or for paying property taxes. The typical
management contract is for a term of one to three years and generally is
renewable for successive one-year terms. The Company's renewal rates in each of
the last five fiscal years were in excess of 92%. The Company's management
contract clients have the option of obtaining liability insurance independently
or purchasing insurance from the Company under the management contract. Because
of its size and claims experience, the Company can purchase such insurance at
significant discounts to comparable market rates and, management believes, at
lower rates than the Company's clients can generally obtain on their own.
Accordingly, the Company generates profits on the insurance provided under its
management contracts. See "Business -- Litigation and Insurance."
21
<PAGE> 26
A summary of the facilities operated by the Company as of January 31, 1997
is as follows:
<TABLE>
<CAPTION>
PERCENT
MANAGED LEASED OWNED TOTAL OF TOTAL
------- ------ ----- ----- --------
<S> <C> <C> <C> <C> <C>
Total U.S. and Puerto Rico...................... 797 548 58 1,403 92.1%
--- --- --- ----- -----
United Kingdom.................................. 12 77 -- 89 5.8
Mexico.......................................... 16 7 -- 23 1.5
Germany......................................... -- 5 -- 5 0.3
Canada.......................................... 3 1 -- 4 0.3
--- --- --- ----- -----
Total foreign(1)...................... 31 90 -- 121 7.9
--- --- --- ----- -----
Total facilities...................... 828 638 58 1,524 100.0%
=== === === ===== =====
</TABLE>
- ---------------
(1) The parking facility in Kuala Lumpur, Malaysia, for which the Company has a
management contract, is not yet in operation and is not included in the
summary of facilities table.
The table below sets forth certain information regarding the Company's
managed, leased and owned facilities in the periods indicated.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------
1994 1995 1996
------ ------ ------
<S> <C> <C> <C>
Managed facilities:(1)
Beginning of period....................................... 557 626 715
Added during period....................................... 84 120 114
Deleted during period..................................... 15 31 59(2)(3)
----- ----- -----
End of period............................................. 626 715 770
----- ----- -----
Renewal rate.............................................. 97.3% 95.0% 92.4%
Leased facilities:(1)
Beginning of period....................................... 367 436 485
Added during period....................................... 80 65 94(3)
Deleted during period..................................... 11 16 27
----- ----- -----
End of period............................................. 436 485 552
Owned facilities:(1)(4)
Beginning of period....................................... 24 26 31
Purchased during period................................... 4 5 6(2)
Sold during period........................................ 2 -- --
----- ----- -----
End of period............................................. 26 31 37
----- ----- -----
Total facilities (end of period).................. 1,088 1,231 1,359
===== ===== =====
Percentage growth in number of facilities:
Managed................................................... 12.4% 14.2% 7.7%
Leased.................................................... 18.8 11.2 13.8
Owned..................................................... 8.3 19.2 19.4
----- ----- -----
Total facilities.................................. 14.8% 13.1% 10.4%
</TABLE>
- ---------------
(1) Includes 33 managed, 13 leased and 3 owned facilities operated under joint
venture agreements.
(2) Includes the Company's purchase of four facilities that it previously
managed.
(3) Includes the Company's lease of one facility that it previously managed.
(4) Includes the Company's corporate headquarters in Nashville, Tennessee.
The Company's renewal rate for management contracts has exceeded 92% in
each of the last five years. In 1995 and 1996, the decline in the percentage of
management contract renewals resulted in part from the Company's decision not to
renew unfavorable management contracts.
22
<PAGE> 27
Net gains derived from sales of property and equipment were $2.2 million,
$81,000, and $1.2 million for fiscal years 1994, 1995, and 1996, respectively.
The Company realized no significant net gains from sales of property and
equipment in the first three months of fiscal 1996 or 1997.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, information
derived from the Company's consolidated financial statements expressed (except
as indicated) as a percentage of total revenues.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
--------------------- -------------
1994 1995 1996 1995 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Parking revenues........................................... 73.9% 74.8% 76.2% 75.7% 77.5%
Management contract revenues............................... 26.1 25.2 23.8 24.3 22.5
----- ----- ----- ----- -----
Total revenues................................... 100.0 100.0 100.0 100.0 100.0
Cost of parking as a percentage of parking revenues........ 92.8 92.4 90.8 89.5 90.6
Cost of management contracts as a percentage of management
contract revenues........................................ 33.5 30.4 28.7 31.2 26.8
General and administrative expenses........................ 12.7 12.5 12.2 12.3 11.4
Operating earnings......................................... 10.0 10.8 11.8 12.4 12.4
Interest income, net....................................... 0.6 1.2 1.6 1.8 1.5
Net gains on sales of property and equipment............... 2.0 -- 0.8 0.1 --
Other...................................................... -- 0.3 0.5 0.5 0.6
----- ----- ----- ----- -----
Earnings before income taxes............................... 12.6 12.3 14.7 14.8 14.5
Income taxes............................................... 4.6 4.4 5.0 5.1 5.1
----- ----- ----- ----- -----
Net earnings............................................... 8.0% 7.9% 9.7% 9.7% 9.4%
===== ===== ===== ===== =====
</TABLE>
Three Months Ended December 31, 1996 Compared to Three Months Ended December
31, 1995
Total revenues increased to $41.4 million for the first quarter of fiscal
1997 from $33.3 million for the first quarter of fiscal 1996, an increase of
$8.2 million, or 24.6%. The increase was primarily attributable to an increase
in the total number of facilities to 1,400 from 1,267, an increase of 133
facilities, or 10.5%.
Parking revenues for the first quarter of fiscal 1997 increased to $32.1
million from $25.2 million in the first quarter of fiscal 1996, an increase of
$6.9 million, or 27.5%. The increase resulted primarily from a net increase in
the number of leased and owned facilities, as well as a combination of rate
increases and higher utilization of parking spaces at existing leased and owned
facilities.
Revenues from foreign operations in the first quarter of fiscal 1997
increased to $3.9 million from $2.9 million in the same period in fiscal 1996.
The increase in foreign revenues was a result of the addition of three leased
facilities.
Management contract revenues for the first quarter of fiscal 1997 increased
to $9.3 million from $8.1 million in the first quarter of fiscal 1996, an
increase of $1.3 million, or 15.5%. The increase resulted from a net increase in
the number of management contracts to 780 from 736, an increase of 6.0%. The
increase in management contract revenues of 15.5% versus the 6.0% increase in
the number of facilities is attributable to a combination of adding facilities
with higher parking volumes and eliminating lower volume facilities from the
Company's management contract mix.
Cost of parking in the first quarter of fiscal 1997 increased to $29.1
million from $22.5 million in the first quarter of fiscal 1996, an increase of
$6.6 million, or 29.2%. This increase was primarily attributable to a $4.3
million increase in rent payments and $1.5 million increase in payroll expense.
The rent and payroll expense increases were attributed primarily to the increase
in the number of leased and owned facilities to 620 from 531. The increase in
cost of parking as a percentage of parking revenue to 90.6% in the first fiscal
quarter of
23
<PAGE> 28
1997 from 89.5% for the same period in 1996 was attributable primarily to
start-up costs associated with several new locations.
Cost of management contracts in the first quarter of fiscal 1997 and 1996
remained the same at $2.5 million. Cost of management contracts as a percentage
of management contract revenues decreased to 26.8% in the first quarter of
fiscal 1997 from 31.2% in the first quarter of fiscal 1996. The increase in
management contract revenues in the first quarter of fiscal 1997 did not result
in any increase in costs of management contracts.
General and administrative expenses increased to $4.7 million for the first
quarter of fiscal 1997 from $4.1 million in the first quarter of fiscal 1996, an
increase of $629,000 or 15.4%. The increase was primarily attributable to
greater incentive compensation resulting from higher profits and to start-up
costs associated with the opening of new facilities and joint ventures. General
and administrative expenses, as a percentage of revenues, were 11.4% for the
first quarter of fiscal 1997 compared to 12.3% for the first quarter of fiscal
1996, a decrease of 0.9%. The decrease was attributable to spreading fixed
expenses over a larger revenue base and the implementation of bonus limits on
certain key executives.
Operating earnings increased to $5.1 million for the first quarter of
fiscal 1997 from $4.1 million for the first quarter of fiscal 1996, an increase
of $1.0 million, or 24.0%. As a percentage of total revenues, operating earnings
remained unchanged at 12.4% in the first fiscal quarter of 1997 and 1996.
Interest income increased to $625,000 for the first quarter of fiscal 1997
from $589,000 in the first quarter of fiscal 1996, an increase of $36,000, or
6.1%. The increase in interest income was the result of higher investment
balances outstanding during the quarter.
Equity in partnership and joint venture earnings in the first quarter of
fiscal 1997 increased to $250,000 from $164,000 in the first quarter of fiscal
1996, an increase of $86,000. The increase resulted primarily from improvements
in joint venture earnings of the Mexican joint venture, which had net earnings
of $89,000 in fiscal 1997 compared to $4,000 in fiscal 1996.
Income taxes increased to $2.1 million for the first quarter of fiscal 1997
from $1.7 million in the first quarter of fiscal 1996, an increase of $400,000
or 23.5%. The tax rate for the first quarter of fiscal 1997 was 35.0% compared
to 34.5% for the first quarter of fiscal 1996. The increase in the tax rate is
attributable primarily to lower interest income on tax exempt investments in
1996. This higher tax rate is expected to continue for the remainder of fiscal
1997.
Year Ended September 30, 1996 Compared to Year Ended September 30, 1995
Total revenues increased to $143.3 million for fiscal 1996 from $126.2 for
fiscal 1997, an increase of 13.6%. The increase was primarily attributable to
the increase in the total number of facilities to 1,359 at September 30, 1996
from 1,231 at September 30, 1995, an increase of 128 facilities, or 10.4%.
Parking revenues in fiscal 1996 increased to $109.3 million from $94.4
million in fiscal 1995, an increase of $14.9 million, or 15.8%. This increase
resulted primarily from the net addition of 73 leased and owned facilities as
well as from a combination of rate increases and higher utilization of parking
spaces at existing facilities.
Management contract revenues in fiscal 1996 increased to $34.0 million from
$31.8 million in fiscal 1995, an increase of $2.2 million, or 7.2%. This
increase resulted from a net increase in the number of management contracts to
770 from 715, a net increase of 7.7%.
Revenues from foreign operations in fiscal 1996 decreased to $13.2 million
from $16.1 million in 1995. The decrease in revenues from foreign operations
resulted primarily from the termination of a lease in the United Kingdom.
Cost of parking in fiscal 1996 increased to $99.2 million from $87.2
million in fiscal 1995, an increase of $12.0 million, or 13.8%. Rent expense
increased $7.1 million, principally as a result of the new facilities and
additional percentage rent on existing facilities. Of the remaining $4.9 million
increase in cost of parking,
24
<PAGE> 29
additional payroll expense accounted for $3.8 million. The payroll expense
increase was attributable to a combination of new facilities and increases in
existing payroll. Cost of parking as a percentage of parking revenues decreased
to 90.8% in fiscal 1996 from 92.4% in fiscal 1995. This decrease of 1.6% was
attributable predominantly to the spreading of a number of fixed costs,
primarily rent and property costs, over a larger revenue base.
Cost of management contracts in fiscal 1996 increased to $9.8 million from
$9.7 million in fiscal 1995, an increase of $100,000, or 1.2%. This increase was
attributable to an increase in the number of managed facilities and higher costs
incurred at existing facilities associated with increased revenues. Cost of
management contracts as a percentage of management contract revenues decreased
to 28.7% in fiscal 1996 from 30.4% in fiscal 1995. The decrease in the
percentage of management contract cost as a percentage of management contract
revenue was the result of increased management fees. The decrease in renewal
rate for management contracts to 92.4% in 1996 from 95.0% in 1995 was primarily
attributable to the discontinuance by the Company of less profitable management
contracts.
General and administrative expenses in fiscal 1996 increased to $17.4
million from $15.7 million in fiscal 1995, an increase of $1.7 million, or
10.9%. This increase was primarily a result of an increase in payroll expense of
$1.2 million associated with the opening of additional managed, leased, and
owned facilities and additional incentive compensation payments as a result of
increased profits. General and administrative expenses as a percentage of
revenues were 12.2% for fiscal 1996 compared to 12.5% for fiscal 1995. The
decrease was attributable to spreading fixed expenses over a larger revenue
base.
Operating earnings in fiscal 1996 increased to $16.9 million from $13.6
million in fiscal 1995, an increase of $3.3 million, or 24.5%. The increase was
a result of a combination of increases in total revenues of 13.6%, improvement
in combined parking and management contract margins, and a decrease in general
and administrative expenses as a percentage of total revenues to 12.2% for
fiscal 1996 compared to 12.5% for fiscal 1995.
Interest income in fiscal 1996 increased to $2.3 million from $1.5 million
in fiscal 1995. This $800,000 increase was primarily attributable to higher
investment balances resulting from the Company's initial public offering and an
increase in net cash flow generated from operations.
Equity in partnership and joint venture earnings for fiscal 1996 increased
to $641,000 from $362,000 in fiscal 1995. The increase of $279,000 resulted
primarily from improvements in joint venture earnings as a result of the
Company's Mexican joint venture having net earnings of $152,000 in fiscal 1996
versus a loss in fiscal 1995 of $145,000.
The Company's effective income tax rate was 34.3% for fiscal 1996 compared
to 35.9% for fiscal 1995. The rate decrease was attributable to an increase in
tax exempt interest income and an overall reduction in the effective state
income tax rates, offset by the elimination of targeted jobs tax credits in
fiscal 1996.
Year Ended September 30, 1995 Compared to Year Ended September 30, 1994
Total revenues in fiscal 1995 increased to $126.2 million from $112.2
million in fiscal 1994, an increase of $14.0 million, or 12.5%. The increase was
primarily attributable to the increase in the total number of facilities to
1,231 at September 30, 1995 from 1,088 at September 30, 1994, an increase of
143, or 13.1%.
Parking revenues in fiscal 1995 increased to $94.4 million from $82.9
million in fiscal 1994, an increase of $11.5 million, or 13.9%. This increase
resulted primarily from the net addition of 54 leased and owned facilities as
well as from a combination of rate increases and higher utilization of parking
spaces at existing facilities.
Management contract revenues in fiscal 1995 increased to $31.8 million from
$29.3 million in fiscal 1994, an increase of $2.5 million, or 8.5%. This
increase resulted from a net increase in the number of management contracts to
715 from 626, a net increase of 14.2%.
Revenues from foreign operations increased in 1995 to $16.1 million from
$15.3 million in 1994.
Cost of parking in fiscal 1995 increased to $87.2 million from $77.0
million in fiscal 1994, an increase of $10.2 million, or 13.3%. Rent expense
increased $6.4 million, principally as a result of the new facilities and
25
<PAGE> 30
additional rent on existing facilities. In addition, all other costs of parking
expenses increased as a result of the net increase in the number of new
facilities, except for payroll expense which decreased by $448,000. Cost of
parking as a percentage of parking revenues decreased to 92.4% in fiscal 1995
from 92.8% in fiscal 1994. This slight decrease was attributable predominantly
to the spreading of a number of fixed costs, primarily payroll and property
costs, over a larger revenue base.
Cost of management contracts in fiscal 1995 decreased to $9.7 million from
$9.8 million in fiscal 1994, a decrease of $162,000, or 1.7%. This decrease was
attributable to a decrease in insurance expense offset by a net increase in the
number of managed facilities and higher costs incurred at existing facilities
associated with increased revenues. Cost of management contracts as a percentage
of management contract revenues decreased to 30.4% in fiscal 1995 from 33.5% in
fiscal 1994.
General and administrative expenses in fiscal 1995 increased to $15.7
million from $14.2 million in fiscal 1994, an increase of $1.5 million, or
10.7%. This increase was primarily a result of an increase in payroll expense of
$715,000 associated with the opening of additional managed, leased, and owned
facilities and additional incentive compensation payments as a result of
increased profits. General and administrative expenses as a percentage of
revenues were 12.5% for fiscal 1995 compared to 12.7% for fiscal 1994. The
decrease was attributable to spreading fixed expenses over a larger revenue
base.
Operating earnings in fiscal 1995 increased to $13.6 million from $11.2
million in fiscal 1994, an increase of $2.4 million, or 21.4%. The increase is a
result of a combination of increases in total revenues of 12.5%, improvement in
combined parking and management contract margins, and a decrease in general and
administrative expenses as a percentage of total revenues to 12.5% for fiscal
1995 compared to 12.7% for fiscal 1994.
Interest income in fiscal 1995 increased to $1.5 million from $730,000 in
fiscal 1994. This increase of $732,000 was attributable to an average increase
in investment dollars and an increase in average interest rates.
Equity in partnership and joint venture earnings for fiscal 1995 increased
to $362,000 from $30,000 in fiscal 1994. The increase resulted primarily from
improvements in joint venture earnings from increased parking volume in the
operations of Commerce Street Joint Venture and a reduction in the interest
expense of the joint venture through a refunding of the joint venture's
industrial revenue bonds.
The Company's effective income tax rate was 35.9% for fiscal 1995 compared
to 36.6% for fiscal 1994. This decrease was attributable to an overall reduction
in the effective state income tax rate net of reduced targeted jobs tax credits.
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QUARTERLY RESULTS
The Company has experienced fluctuations in its quarterly revenues and
profitability. These fluctuations are caused by a variety of factors, including
the timing of gains on sales of owned facilities; preopening costs; the effect
of weather on travel and transportation patterns; and local and national
economic conditions. The following table sets forth certain quarterly statement
of earnings data for each of the Company's last nine fiscal quarters and the
percentage of total revenues represented by the line items presented (except in
the case of per share amounts). The quarterly statement of earnings data set
forth below was derived from unaudited financial statements of the Company and
includes all adjustments, consisting only of normal recurring adjustments, which
the Company considers necessary for a fair presentation thereof.
<TABLE>
<CAPTION>
FISCAL
FISCAL 1995 FISCAL 1996 1997
------------------------------------- ------------------------------------- -------
FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total revenues............ $29,868 $31,156 $32,382 $32,749 $33,251 $35,680 $37,504 $36,881 $41,423
Operating earnings........ 3,780 3,141 3,497 3,184 4,135 3,595 4,870 4,332 5,129
Earnings before income
taxes................... 4,128 3,530 4,157 3,692 4,929 5,332 5,668 5,139 6,000
Net earnings.............. $ 2,641 $ 2,260 $ 2,661 $ 2,382 $ 3,228 $ 3,465 $ 3,707 $ 3,436 $ 3,899
Net earnings per common
share................... $ 0.17 $ 0.15 $ 0.17 $ 0.15 $ 0.19 $ 0.20 $ 0.21 $ 0.20 $ 0.22
AS A PERCENTAGE OF TOTAL
REVENUES:
Operating earnings........ 12.7% 10.1% 10.8% 9.7% 12.4% 10.1% 13.0% 11.7% 12.4%
Earnings before income
taxes................... 13.8 11.3 12.8 11.3 14.8 14.9 15.1 13.9 14.5
Net earnings.............. 8.8 7.3 8.2 7.3 9.7 9.7 9.9 9.3 9.4
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
During fiscal 1994, 1995, and 1996, the Company generated cash flows from
operating activities of $12.9 million, $11.5 million, and $18.5 million,
respectively. The decrease of $1.4 million in cash flows from operating
activities from fiscal 1994 to 1995 was the result of a net decrease in the
components of working capital partially offset by an increase in net earnings.
The increase of $7.0 million in cash flows from operating activities from fiscal
1995 to 1996 was the result of an increase in net earnings and a net increase in
the components of working capital. During the three months ended December 31,
1995, and 1996, the Company generated cash flows from operating activities of
$4.5 million and $4.0 million, respectively. The decrease in cash flows from
operating activities was the result of a net increase in the components of
working capital offset primarily by increased earnings. The Company generated
proceeds from sales of property and equipment during fiscal 1994, 1995, and 1996
of $2.8 million, $95,000, and $1.5 million, respectively. The Company did not
realize any significant gains on sales of equipment or property for the first
three months of fiscal 1996 or 1997.
Prior to 1990, the Company's business consisted primarily of management
contracts, which typically require little or no capital expenditures by the
Company. Since 1990, the Company has focused on increasing its mix of leased and
owned facilities as a part of its growth strategy, and accordingly requires more
capital to expand its business. Generally, leased facilities require equipment
purchases of $50,000 to $1.0 million per facility, depending upon the size of
the facility and the specific equipment requirements. Investments in fee
properties generally can range from $500,000 to $10.0 million per facility. The
Company intends to opportunistically pursue fee ownership independently or
through joint ventures, both in the United States and abroad. As a result, the
Company may become increasingly exposed to foreign currency fluctuations.
Presently, the Company has limited exposure to foreign currency risk and
anticipates implementing a hedge program if such risk materially increases. The
Company has not created such a program to date.
The Company purchased properties during the three months ended December 31,
1995 and 1996 in the amounts of $14.6 million and $92.2 million, respectively.
Included in the $92.2 million in property purchased for the three months ended
December 31, 1996 is the Civic Acquisition, which was funded on December 31,
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<PAGE> 32
1996. The funds required by the Company to consummate the Square Acquisition and
the Civic Acquisition totaled approximately $168.4 million, including fees and
expenses and retirement of approximately $23.2 million of existing Square debt.
The Company financed such transactions from current working capital and the
Credit Facility. Additionally, the Company purchased properties during the
fiscal years ended 1994, 1995, and 1996, net of property swaps, in the amounts
of $1.8 million, $511,000, and $14.6 million, respectively.
The Credit Facility provides for borrowings of up to $150 million, is
unsecured, and expires January 31, 2000; however, the Company may request an
extension of the term until January 31, 2001. Revolving loans under the Credit
Facility bear interest at one of two rates, at the Company's option: either (i)
the greater of the bank's prime rate or the federal funds rate plus 0.5% or (ii)
LIBOR plus a margin ranging from 0.25% to 1.50% depending on the occurrence of
certain dates or events, achievement of certain financial ratios, and the
Company's senior unsecured debt rating. As of March 6, 1997, the outstanding
balance under the Credit Facility was $135.0 million with an average borrowing
cost of 6.96%. The Company must permanently reduce the amount available for
borrowing under the Credit Facility to $120 million by April 30, 1997, and to
$85 million by September 30, 1997, or earlier upon the occurrence of certain
events, including the consummation of this Offering; however, the Lenders may,
at their option, extend the September 30 date to December 31, 1997 and again to
March 31, 1998. The Company anticipates that the borrowings under the Credit
Facility will be repaid out of cash flow, a refinancing, and the proceeds of
this Offering. The Credit Facility contains customary representations,
warranties and covenants of the Company and its subsidiaries, including
financial covenants relating to maintenance of financial ratios and restrictions
on additional indebtedness.
Depending on the timing and magnitude of the Company's future investments
(either in the form of lease or purchase of parking properties, joint ventures,
or acquisitions), the working capital necessary to satisfy current obligations
is anticipated to be generated from cash flows from operations and the Credit
Facility. If the Company identifies investment opportunities requiring cash in
excess of the Company's cash flows and the existing credit facility, the Company
may seek additional sources of capital, including the sale or issuance of Common
Stock.
The Company has entered into a non-binding letter of intent to sell a 50%
interest in Civic to the Fund for cash at the Company's cost. There can be no
assurance that the sale of the 50% interest to the Fund will be completed or, if
completed, that it will be on the terms currently contemplated. If such sale is
completed, the Company and the Fund will operate the facilities as a joint
venture and the Company will receive approximately $45.5 million in cash. Any
amounts received by the Company will be applied to reduce amounts outstanding
under the Credit Facility.
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<PAGE> 33
BUSINESS
GENERAL
The Company, founded in 1968, is a leading provider of parking services
operating, as of January 31, 1997, 1,524 parking facilities containing
approximately 647,000 spaces in 34 states, the District of Columbia, Puerto
Rico, the United Kingdom, Germany, Canada, Mexico, and Malaysia. The Company
also provides parking consulting services in Spain and has a business
development office in Amsterdam. Since September 30, 1992, the Company has
increased the number of facilities it operates by approximately 675 facilities.
The Company's leadership position in the parking industry is a result of
applying professional management strategies to a fragmented industry managed
largely by small local operators; developing relationships with real estate
managers and developers, including sports arena operators; understanding the
needs of the parking public; applying technology to parking services; and
retaining employees through formal training programs and performance-based
compensation.
The Company provides parking management services at multi-level parking
facilities and surface lots. It also provides parking consulting, shuttle,
valet, parking meter enforcement, and billing and collection services. The
Company distinguishes itself from its competitors by combining a reputation for
professional integrity and quality management with operating strategies designed
to increase the revenues of parking operations for its clients. The Company's
clients include some of the nation's largest owners and developers of mixed-use
projects, major office building complexes, sports stadiums, and hotels, as well
as several municipalities. Parking facilities operated by the Company include,
among others, certain terminals operated by BAA Heathrow International Airport
(London), the Prudential Center (Boston), Rockefeller Center (New York), One
Penn Plaza (New York), Ericsson Stadium (Charlotte), Busch Stadium (St. Louis),
Reunion Arena (Dallas), Coors Field (Denver), Oriole Park at Camden Yards
(Baltimore), Cinergy Field (Cincinnati), Turner Stadium (Atlanta) and various
parking facilities owned by the Hyatt and Westin hotel chains, the Rouse
Company, Faison Associates, May Department Stores, Equity Office Properties, and
Crescent Real Estate. None of these clients accounted for more than 5% of the
Company's total revenues in the past fiscal year.
INDUSTRY
The IPI estimates that there are 35,000 parking facilities in the United
States generating approximately $26.0 billion of annual revenues, which is
divided evenly between commercial and governmental operators. The commercial
parking services business is very fragmented, consisting of a few national
companies and approximately 1,000 small, privately-held local and regional
operators. The Company believes that it has the opportunity to consolidate this
fragmented, localized industry by using its competitive advantages with regard
to scale, financial strength, technology, controls, and professionalism, all of
which are becoming increasingly important in the parking services business. For
the same reasons, the Company believes that it is well-positioned to be selected
by municipal and other governmental entities to operate their parking facilities
and provide parking-related services as such entities move toward outsourcing
and privatization.
Expansion of the number of parking facilities results from new
construction. During the 1980's, the high level of construction activity in the
United States resulted in a significant increase in the number of parking
facilities. Since that time, as construction activity has slowed, growth of
certain parking service companies, including the Company, has been a result of
take-aways from other parking companies. New construction and market share gains
are essential to growth for parking service companies because of the limitations
on growth in revenues of existing operations. Although some growth in revenues
from existing operations is possible through redesign, increased operational
efficiency, or increased facility use and prices, such growth is ultimately
limited by the size of a facility and market conditions.
Management believes that most commercial real estate developers and
property owners view services such as parking as potential profit centers rather
than cost centers. These parties outsource parking operations to parking
management companies in an effort to maximize profits and cash flow. Parking
management
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<PAGE> 34
companies can increase profits, benefitting both the owners and themselves by
using managerial skills and experience, operating systems, and operating
controls unique to the parking industry.
Privatization of government parking operations and facilities provides new
opportunities for the parking industry. Industry estimates suggest that as much
as 50% of the revenues generated by the United States parking industry is
generated by facilities operated by municipalities and other government
entities. Cities and municipal authorities are beginning to retain private firms
to operate facilities and provide parking-related services in an effort to
reduce operating budgets and increase efficiency. Privatization in the United
Kingdom has already provided significant expansion opportunities for private
parking companies. In the United States, several cities have awarded or are
considering awarding on-street parking enforcement and parking meter service
contracts to for-profit parking companies such as the Company. For example, the
Company has recently been awarded contracts for collection of parking meter
revenues in Miami Beach, Florida and parking meter enforcement in Charlotte,
North Carolina.
GROWTH STRATEGY
The Company plans to continue to add facilities to its operations by
focusing its marketing efforts on increasing market share at the local level,
targeting real estate asset managers and developers with a national presence,
pursuing strategic acquisitions of other parking service operators, and
expanding its international operations. Set forth below are the key elements of
the Company's growth strategy.
Increase Market Share. The Company continually seeks to establish and
increase market share in new and existing markets through take-aways of
competitors' contracts, obtaining new management and lease contracts, joint
venture arrangements, and purchases of parking facilities. Through emphasizing
marketing at the local level and establishing relationships with large-scale
national asset managers and developers, the Company expects to continue to
expand its base of operations and gain market share. Management believes that
the Company's relative size, financial strength and systems, and automation
capabilities give it a competitive advantage in winning new business and make it
an attractive partner for joint venture and other opportunities. In addition,
the Company believes that its performance-based compensation system, which is
designed to reward managers for increasing the profitability of their respective
areas of responsibility, has been a key contributor to the Company's growth.
Acquire Other Parking Operators. The Company intends to capitalize on the
highly fragmented nature of the parking management industry by acquiring other
independent operators. Many of the Company's competitors are capital constrained
or do not have the systems or economies of scale to compete effectively. The
Company's acquisition strategy is to focus on opportunities that enable the
Company to become a leading provider in selected markets, generate significant
economies of scale and cost savings, and increase cash flow. Cost savings
typically result from the elimination of duplicative management functions as
well as from efficiencies resulting from implementing the Company's systems and
professional management techniques. The Company has recently hired a Senior Vice
President of Acquisitions who devotes his time exclusively to acquisitions and
development.
Expand International Operations. Management believes that there are
significant international growth opportunities, particularly for
well-capitalized companies that are interested in making significant investments
in parking equipment and construction, either independently or with foreign
partners. The Company typically enters foreign markets either through consulting
projects or by forming joint ventures with established local entities, both of
which allow the Company to enter foreign markets with reduced operating and
investment risk. Since 1991, the Company has established operations in the
United Kingdom, Germany, Mexico, Malaysia, and Canada. The Company also provides
consulting services in Spain and has a business development office in Amsterdam.
The Company believes there are significant expansion opportunities in these
countries as well as other countries.
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<PAGE> 35
OPERATING STRATEGY
The Company's primary objective is to increase the revenues and
profitability of its parking facilities through a variety of operating
strategies including the following:
Maintain Strict Cost Management and Cash Control. In order to provide
competitively priced services, the Company must contain costs. Managers are
trained to analyze staffing and cost control issues, and each facility is
carefully tracked on a monthly basis to determine whether financial results
are within budgeted ranges. Because of the substantial performance-based
component of their compensation, managers are continuously motivated to
contain the costs of their operations. Strict cash control is also critical
to the Company and its clients. The Company's cash control procedures are
based on a ticketing system supervised by high level managers and include
on-site spot checks, multiple daily cash deposits, local audit functions,
managerial oversight and review, and internal audit procedures. It is
Company policy that all tickets and gate counts are reconciled daily
against cash collected. Management believes its cash control procedures are
effective in minimizing the loss of revenues at parking facilities.
Emphasize Sales and Marketing Efforts. The Company's management is
actively involved in developing and maintaining business relationships and
in exploring opportunities for growth. A cornerstone of the Company's
culture is its incentive compensation system which rewards managers who are
able to develop new business. The Company's marketing efforts are designed
to expand its operations by developing and maintaining relationships with
major real estate developers and asset managers, business and government
leaders and other clients. The Company encourages its managers to pursue
new opportunities at the local level while simultaneously selectively
targeting key clients and projects at a national level.
Leverage Established Market Presence and Corporate
Infrastructure. The Company has an established presence in multiple
markets, representing platforms from which it can build. Because of the
relatively fixed nature of corporate overhead and the resources that can be
shared in specific markets, the Company has the opportunity to expand its
profit margins as it grows its presence in established markets. The Company
has consistently reduced general and administrative expenses as a
percentage of total revenues. General and administrative expenses as a
percentage of total revenues were 12.7%, 12.5%, and 12.2% in fiscal 1994,
1995, and 1996, respectively. The Company anticipates this trend will
continue as general and administrative costs are spread over a larger
revenue base. Leveraging its individual markets and its corporate
infrastructure are important elements of the Company's strategy.
Empower Local Managers; Provide Corporate Support. The Company has
achieved what management believes is a successful balance between
centralized and decentralized management. Because its business is
dependent, to some extent, on personal relationships, the Company provides
its managers with a significant degree of autonomy in order to encourage
prompt and effective responses to local market demands. In conjunction with
this local operational authority, the Company provides, through its
corporate office, services that typically are not readily available to
independent operators such as management support, marketing and business
expertise, training, and financial and information systems. The Company
retains centralized control, however, over those functions necessary to
monitor service quality and cash control integrity and to maximize
operational efficiency. Services performed at the corporate level include
billing, quality improvement oversight, financial and accounting functions,
policy and procedure development, systems design, and corporate
acquisitions and development.
Utilize Performance-Based Compensation. The Company's
performance-based compensation system rewards managers at the general
manager level and above for the profitability of their respective areas of
responsibility. Each person participating in the incentive program
generally receives a substantial portion of his or her compensation from
this performance-based compensation system. Incentive compensation payments
typically range from 20% to 80% of total compensation.
Maintain Well-Defined, Professional Management Organization. In order
to ensure professionalism and consistency in the Company's operations, to
provide a career path opportunity for its managers, and to achieve a
balance between autonomy and accountability, the Company has established a
highly
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<PAGE> 36
structured management organization. Organized in six levels, the Company
has a total of 400 managers and hires approximately 50 per year. The
Company recruits primarily college graduates or people with previous
parking services or hospitality industry experience, and requires that they
complete a formal training program. Management believes that the Company's
management training program is a significant factor in the Company's
success. New managers in the Company's management trainee program are
assigned to a particular facility where they are supervised as they manage
one to five employees. The management trainee program lasts approximately
one year and teaches a wide variety of skills, including organizational
skills, basic management techniques, and basic accounting. Upon successful
completion of the program, management trainees are promoted to facility
manager in charge of a particular parking facility. As facility managers,
they report up through a hierarchical structure of managers. As managers
develop and gain experience, they have the opportunity to assume expanded
responsibility, to be promoted to higher management levels and to increase
the performance-based component of their compensation. This well-defined
structure provides a career path that is an attractive opportunity for
prospective new hires. In addition, the well-planned training and
advancement program has enabled the Company to instill a high level of
professionalism in its employees. A final important benefit of the
Company's organizational structure is that it has allowed the Company to
balance localized autonomy with accountability and centralized support and
control.
Automate Facilities. The Company's application of sophisticated
technology to its operations represents a competitive advantage over
smaller operators which have more limited resources. The Company has
implemented computerized card tracking and accounting systems in certain of
its facilities and is experimenting with a variety of automated settlement
systems. The Company expects that these technology initiatives will enhance
revenue by increasing the efficiency and accuracy of payment collections,
reduce labor costs, and minimize lost revenue at parking facilities.
Enhance Management Information Systems. In the last five years, the
Company has re-engineered and replaced its accounting and operations
software. Central to this effort has been the development of
industry-specific software models, such as the Parker Accounts Receivable
System, a proprietary software system used to generate a range of reports
related to receivables and to audit access control systems for the
Company's parking facilities. The Company's distributed systems, which
include payroll, revenue collection, and monthly line-item budgeting, allow
local management access to data pertinent to their operations, while
allowing corporate review of all data. The Company also provides accounting
services through a division that maintains separate financial statements
for large or complex facilities. The Company's management believes
continued improvement in its management information system services will
increase the Company's competitive advantage over smaller and less
automated competitors.
Strategically Expand Service Offerings. The Company provides services
that are complementary to parking facility management, with a particular
emphasis on consulting. Other ancillary services include parking meter
enforcement, on-street parking services, car pooling coordination, shuttle
van operation, and transportation management. Recent new ancillary services
include contracts for collection of parking meter revenues in Miami Beach,
Florida and for parking meter installation and enforcement in Charlotte,
North Carolina. These ancillary services do not constitute a significant
portion of the Company's revenues, but management believes that the
provision of ancillary services can be important in obtaining new business
and preparing the Company for future changes in the parking industry. For
example, the Company's operations in the United Kingdom grew out of a
single consulting arrangement.
Focus on Retention of Patrons. In order for the Company to succeed,
its parking patrons must have a positive experience at Company facilities.
Accordingly, the Company stresses the importance of having well-lighted,
clean facilities, and cordial employees. Each facility manager has primary
responsibility for the environment at the facility, and is evaluated on his
or her ability to retain parking patrons. The Company also monitors
customer satisfaction through customer surveys and "mystery parker"
programs.
Maintain Disciplined Facility Site Selection Analysis. In existing
markets, the facility site selection process begins with identification of
a possible facility site and the analysis of projected revenues and costs
at the site by general managers and regional managers. The managers then
conduct an examination
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<PAGE> 37
of a facility's potential demand based on traffic patterns and counts, area
demographics, and potential competitors. Pro forma financial statements are
then developed and a Company representative will meet with the property
owner to discuss the terms and structure of the agreement.
ACQUISITIONS
The Company's acquisition strategy focuses primarily upon acquisitions that
will enable the Company to become a leading provider in selected current
markets. The Company believes that it can recognize economies of scale by making
acquisitions in markets where the Company already has a significant presence,
which allow the Company to reduce the overhead cost of the acquired company by
consolidating its management with that of the Company. In addition, the Company
seeks acquisitions in attractive new markets. Management believes acquisitions
are an effective means of entering new markets, thereby quickly obtaining both
operating presence and management personnel. The Company also believes it can
improve acquired operations by applying its sophisticated operating systems and
professional management techniques.
Acquisition of Contract Rights. In August 1992, the Company purchased for
$8 million the contract rights to operate 103 parking facilities which were
owned, leased, or managed by Meyers Parking based in New York City. Of these 103
facilities, 39 are leased or owned facilities and 64 are operated under
management contracts. The purchase of these contract rights gave the Company
entry into new markets in New York City, Boston, and San Francisco. In addition,
the contracts included facilities which overlapped in several markets where the
Company had existing operations.
Acquisition of Square Industries, Inc. On January 18, 1997, the Company
completed the Square Acquisition. As of December 31, 1996, Square operated 117
parking facilities containing approximately 61,000 spaces in New York, New
Jersey, Pennsylvania, Maryland, Massachusetts, Delaware, Indiana, Georgia, and
Canada, including Rockefeller Center and One Penn Plaza in New York City. The
total consideration for the Square Acquisition was approximately $53.0 million,
plus the assumption of approximately $23.2 million of Square indebtedness. The
Company funded the Square Acquisition with borrowings under the Credit Facility.
The Company believes the strategic and financial benefits of the Square
Acquisition include the opportunity to realize significant cost savings and
economies of sale through the elimination of duplicative corporate overhead and
management functions, information sharing and increased market share,
particularly in the New York and Philadelphia markets where, as a result of the
acquisition, the size of the Company's operations have more than doubled. The
Square Acquisition also expanded the Company's geographic presence into new
markets, including Indianapolis, Ottawa, and Toronto. Furthermore, the Company
believes the Square Acquisition has improved the Company's mix of leased and
owned facilities and has added several capable and experienced management
personnel to complement the Company's existing staff.
Purchase of Busch Stadium Properties. On December 31, 1996, the Company
acquired Civic, which owns four parking facilities adjacent to or near Busch
Stadium in St. Louis, Missouri, containing approximately 7,500 parking spaces.
Prior to the Civic Acquisition, the Company operated all four parking facilities
pursuant to management agreements. Management believes that acquiring control of
these facilities provides the opportunity for greater revenue growth and
increased cost control. The Company funded the $91.0 million purchase price
through working capital and approximately $67.2 million of borrowings under the
Credit Facility. The Company has entered into a non-binding letter of intent to
sell a 50% interest in Civic to the Fund for cash at the Company's cost. There
can be no assurance that the sale of the 50% interest to the Fund will be
completed or, if completed, that it will be on the terms currently contemplated.
If such sale is completed, the Company and the Fund will operate the facilities
as a joint venture.
SALES AND MARKETING
The Company's sales and marketing efforts are designed to expand its
operations by developing and maintaining relationships with major real estate
developers and asset managers, business and government leaders, and other
clients. The Company encourages its managers to pursue new opportunities at the
local level while simultaneously selectively targeting key clients and projects
at a national level.
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<PAGE> 38
Local. At the local level, the Company's sales and marketing efforts are
decentralized and directed towards identifying new expansion opportunities
within a particular city or region. Managers are trained to develop the business
contacts necessary to generate new opportunities and to monitor their local
markets for take-away and outsourcing opportunities. The Company provides its
managers with a significant degree of autonomy in order to encourage prompt and
effective responses to local market demands, which is complemented by management
support and marketing training through the Company's corporate offices. In
addition, a manager's compensation is dependent, in part, upon his or her
success in developing new business. By developing business contacts locally, the
Company's managers often get the opportunity to bid on projects when asset
managers and property owners are dissatisfied with current operations and also
learn in advance of possible new projects.
National. At the national level, the Company's marketing efforts are
undertaken primarily by upper-level management, which target developers,
governmental entities, the hospitality industry, mixed-used projects, and
medical facilities. These efforts are directed at operations that generally have
national name recognition, substantial demand for parking related services, and
the potential for nationwide growth. For example, the Company's current clients
include, among other national real estate companies and hotel chains, the Rouse
Company, Faison Associates, Equity Office Properties, May Department Stores,
Crescent Real Estate, Westin Hotels, and Hyatt Hotels. Management believes that
providing high-quality, efficient services to such companies will lead to
additional opportunities as those clients continue to expand their operations.
Outsourcing by parking facility owners will continue to be a source for
additional facilities, and management believes the Company's experience and
reputation with large real estate asset managers give it a competitive advantage
in this area.
INTERNATIONAL EXPANSION
The Company's international operations began in the early 1990's with the
formation of an international division, which is now one of the fastest growing
areas of the Company. The Company typically enters foreign markets either
through consulting projects or by forming joint ventures with established local
entities. Consulting projects allow the Company to establish a presence and
evaluate the prospects for growth of a given market without investing a
significant amount of capital. Likewise, forming joint ventures with local
partners allows the Company to enter new foreign markets with reduced operating
and investment risks.
Operations in London began in 1991 with a single consulting agreement and
since then have grown to 89 facilities in the United Kingdom including two
terminals at Heathrow International Airport and parking meter enforcement and
ticketing services for three local governments that have privatized these
services. The Company began expansion into Mexico in July 1994 by forming a
joint venture with Fondo Opcion, an established Mexican developer, and now
operates 23 facilities in Mexico. The Company also operates 20 facilities in
Puerto Rico, 4 facilities in Canada and has entered into a management contract
in Kuala Lumpur, Malaysia related to the operation of a 5,400 space parking
facility servicing one of the largest development projects in the world. The
Company established a business development office in the Netherlands in 1995 to
pursue expansion into other European countries and is providing consulting
services in Spain. In 1996, the Company acquired a 50% equity interest in a
joint venture which operates five facilities in Germany. In order to manage its
international expansion, the Company has allocated responsibilities for
international operations to a Senior Vice President.
PARKING FACILITY PROPERTIES
The Company's facilities are currently organized into 12 regions, 11 in
North America, and one which is comprised of the United Kingdom and Germany.
Each region is supervised by a regional manager who reports directly to one of
the Senior Vice Presidents or to the President. Regional managers oversee four
to six general
34
<PAGE> 39
managers who each supervise the Company's operations in a particular city. The
following table summarizes certain information regarding the Company's
facilities as of January 31, 1997.
<TABLE>
<CAPTION>
TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
REGIONS CITIES FACILITIES MANAGED LEASED OWNED SPACES SPACES
- ------- ------ ---------- ------- ------ ----- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Atlanta................ Atlanta, Birmingham, Charleston (SC), 101 51 50 -- 42,765 6.6%
Charlotte, Columbia (SC), Jackson
(MS), Mobile
Dallas-Ft. Worth....... Dallas-Ft. Worth, Oklahoma City, San 124 72 42 10 48,419 7.5
Antonio, Tulsa
European............... United Kingdom -- Birmingham, London, 94 12 82 -- 32,689 5.0
Newcastle, Oxford;
Germany -- Berlin, Dresden,
Frankfurt, Hamburg, Schwerin
Florida................ Jacksonville, Miami/Ft. Lauderdale, 180 102 78 -- 69,772 10.8
Orlando, Puerto Rico, Tampa/St.
Petersburg
Houston................ Albuquerque, Austin, El Paso, 116 81 35 -- 61,636 9.5
Houston, New Orleans
Los Angeles............ Los Angeles, Orange County (CA), 75 57 18 -- 42,681 6.6
Phoenix
Mid-Atlantic........... Atlantic City, Baltimore, Norfolk, 140 92 43 5 60,759 9.4
Philadelphia, Pittsburgh, Richmond,
Washington (D.C.)
Midwest................ Charleston (WV), Cincinnati, 102 65 37 -- 63,996 9.9
Cleveland, Columbus, Milwaukee,
Ottawa (Canada), Toronto (Canada)
Nashville.............. Chattanooga, Knoxville, 221 98 101 22(1) 46,419 7.2
Lexington/Frankfort, Louisville,
Memphis, Nashville
New York............... Hartford, New York, Jersey City, 144 50 85 9 60,107 9.3
Providence, Stamford
San Francisco.......... Oakland, Salt Lake City, San 30 21 9 -- 11,601 1.8
Francisco, Seattle
St. Louis.............. Denver/Colorado Springs, Des Moines, 151 95 45 11 75,670 11.7
Indianapolis, Kansas City,
Minneapolis-St. Paul, St. Louis
Other.................. Boston, Chicago, Mexico City 46 32 13 1 30,348 4.7
----- --- --- -- ------- -----
Total................................................. 1,524 828 638 58 646,862 100.0%
===== === === == ======= =====
</TABLE>
- ---------------
(1) Includes the Company's corporate headquarters.
OPERATING ARRANGEMENTS
The Company operates parking facilities under three general types of
arrangements: management contracts, leases, and fee ownership. As of January 31,
1997, the Company operated 828 parking facilities through management contracts
and 638 parking facilities through leases, and owned 58 parking facilities,
either independently or in joint ventures with third parties. The following
table sets forth certain information regarding the number of managed, leased,
and owned facilities as of the specified dates:
<TABLE>
<CAPTION>
AT
AT SEPTEMBER 30, JANUARY 31,
--------------------- -----------
1994 1995 1996 1997
----- ----- ----- -----------
<S> <C> <C> <C> <C>
Managed facilities.................................... 626 715 770 828
Leased facilities..................................... 436 485 552 638
Owned facilities...................................... 26 31 37 58
----- ----- ----- -----
Total....................................... 1,088 1,231 1,359 1,524
===== ===== ===== =====
</TABLE>
35
<PAGE> 40
The general terms and benefits of these three types of arrangements are
described as follows:
Management Contracts. Management contract revenues consist of
management fees (both fixed and percentage of revenues) and fees for
ancillary services such as insurance, accounting, equipment leasing, and
consulting. The cost of management contracts includes insurance premiums
and claims and other indirect overhead. The Company's responsibilities
under a management contract include hiring, training, and staffing parking
personnel and providing collections, accounting, record keeping, insurance,
and facility marketing services. In general, the Company is not responsible
under its management contracts for structural, mechanical, or electrical
maintenance or repairs, for providing security or guard services, or for
paying property taxes. The typical management contract is for a term of one
to three years and generally is renewable for successive one-year terms.
The Company's renewal rates for each of the most recent five fiscal years
were in excess of 92%. With respect to insurance, the Company's clients
have the option of obtaining liability insurance on their own or purchasing
insurance from the Company under the management contract. Because of its
size and claims experience, the Company can purchase such insurance at
significant discounts to comparable market rates and, management believes,
at lower rates than the Company's clients can generally obtain on their
own. Accordingly, the Company generates profits on the insurance provided
under its management contracts. See "Business -- Litigation and Insurance."
Leases. Leases generally provide for a contractually established
payment to the facility owner which is either a fixed annual amount, a
percentage of gross revenues, or a combination thereof. As a result, the
Company's revenues and profits in its lease arrangements are dependent upon
the performance of the facility. Leased facilities generally require a
longer commitment and a larger capital investment by the Company than
managed facilities, but generally provide a longer-term source of revenue
and a greater opportunity for revenue and earnings growth. Cost of parking
includes rent, payroll and related benefits, depreciation (if applicable),
maintenance, insurance, and general operating expenses. Under its leases,
the Company is typically responsible for all facets of the parking
operations, except for structural, mechanical, or electrical maintenance or
repairs, or property taxes. Lease arrangements are typically for terms of
three to ten years, with a renewal options.
Fee Ownership. Ownership of parking facilities, either independently
or through joint ventures, typically requires a larger capital investment
than managed or leased facilities, but provides maximum control over the
operation of the parking facility and the greatest profit potential of the
three types of operating arrangements. As the owner, all changes in
facility revenue and expenses flow directly to the Company. Additionally,
the Company has the potential to realize benefits of appreciation in the
value of the underlying real estate if the property is sold. The ownership
of a parking facility brings the Company complete responsibility for all
aspects of the property, including all structural, mechanical, and
electrical maintenance and repairs.
Joint Ventures. The Company seeks joint venture partners who are
established local or regional developers pursuing financing alternatives
for development projects. Joint ventures typically involve a development
where the parking facility is a part of a larger multi-use project,
allowing the Company's joint venture partners to benefit from a capital
infusion to the project. Joint ventures offer the revenue growth potential
of ownership with a partial reduction in capital requirements. The Company
has interests in joint ventures that own or operate parking facilities
located in Nashville, Denver, Tulsa, New Orleans, Mexico City, Berlin,
Dresden, and Frankfort.
MBE Partnerships. The Company is currently a party to eleven separate
minority business enterprise partnerships. These are generally partnerships
formed by the Company and a minority businessperson to manage a facility.
The Company generally owns 60% to 70% of the partnership interests in each
partnership and typically receives management fees before partnership
distributions are made to the partners.
36
<PAGE> 41
COMPETITION
The parking industry is fragmented and highly competitive, with limited
barriers to entry. The Company faces direct competition for additional
facilities to manage, lease, or own and the facilities currently operated by the
Company face competition for employees and customers. The Company competes with
a variety of other companies to add new operations. Although there are
relatively few large, national parking companies that compete with the Company,
developers, hotel companies, and national financial services companies have the
potential to compete with parking companies. Municipalities and other
governmental entities also operate parking facilities which compete with the
Company. The Company also faces competition from local owner-operators of
facilities who are potential clients for the Company's management services.
Construction of new parking facilities near the Company's existing facilities
could adversely affect the Company's business.
Management believes that it competes for clients based on rates charged for
services; ability to generate revenues for clients; ability to anticipate and
respond to industry changes; range of services; and ability to expand
operations. The Company has a reputation as a leader in the industry and as a
provider of high quality services. The Company is one of the largest companies
in the parking industry and is not limited to a single geographic region. The
Company also has the financial strength to make capital investments as an owner
or joint venture partner that smaller or more leveraged companies do not have.
The Company's size has also allowed it to centralize administrative functions
that give the decentralized managerial operations cost-efficient support.
Moreover, the Company has obtained broad experience in managing and operating a
wide variety of facilities over the past 29 years. Additionally, the Company is
able to attract and retain quality managers through its incentive compensation
system that directly rewards successful sales and marketing efforts and places a
premium on profitable growth.
LITIGATION AND INSURANCE
The ownership of property and provision of services to the public entails
an inherent risk of liability. Although the Company is engaged in routine
litigation incidental to its business, there is no legal proceeding to which the
Company is a party which, in the opinion of management, will have a material
adverse effect upon the Company's financial condition and results of operations.
The Company attempts to disclaim its liability for personal injury and property
damage claims by printing disclaimers on its ticket stubs and by placing warning
signs in the facilities it owns or operates. The Company also carries liability
insurance that management believes meets industry standards; however, there can
be no assurance that any future legal proceedings (including any related
judgments, settlements, or costs) will not have a material adverse effect on the
Company's financial condition and results of operations.
The Company purchases comprehensive liability insurance covering parking
facilities owned, leased, and managed by the Company in the amount of $1.0
million per occurrence and $1.0 million in the aggregate per facility. In
addition, the Company purchases group insurance with respect to all Company
employees, whether such persons are employed at owned, leased, or managed
facilities. Because of the size of the operations covered, the Company purchases
these policies at prices that, management believes, represent a discount to the
prices that would be charged to parking facility owners on a stand-alone basis.
Pursuant to its management contracts, the Company charges its customers for
insurance at rates it believes approximate market rates based upon its review of
the applicable market. In each case, the Company's clients have the option of
purchasing their own liability insurance policies, provided the Company is named
as an additional insured; however, because the Company's fees for insurance are
generally competitive with market rates, the Company's clients have historically
chosen to pay the Company's insurance fees. A reduction in the number of clients
that purchase insurance through the Company, however, could have a material
adverse effect on the operating earnings of the Company. In addition, although
the Company's cost of insurance has not fluctuated significantly in recent
years, a material increase in insurance costs due to increased claims
experienced by the Company could adversely affect the profit associated with
insurance charges pursuant to management contracts and could have a material
adverse effect on the Company's financial condition and results of operations.
37
<PAGE> 42
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors and executive officers of the Company as of the date of this
Prospectus.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Monroe J. Carell, Jr....................... 65 Chairman of the Board, Chief Executive
Officer
James H. Bond.............................. 54 President, Chief Operating Officer,
Director
Stephen A. Tisdell......................... 45 Chief Financial Officer
Emanual J. Eads............................ 45 Senior Vice President
Jeff L. Wolfe.............................. 37 Senior Vice President
Alan J. Kahn............................... 37 Senior Vice President -- European
Operations
Henry J. Abbott............................ 46 Vice President -- General Counsel,
Secretary
Gregory Susick............................. 37 Senior Vice President
William R. Porter.......................... 43 Senior Vice President
Al Cornish................................. 45 Vice President -- Human Resources
Chris Callas............................... 40 Vice President -- Corporate Controller
John W. Eakin(1)(2)........................ 42 Director
Edward G. Nelson(1)........................ 65 Director
William C. O'Neil, Jr.(2).................. 62 Director
P.E. Sadler(1)............................. 62 Director
Cecil Conlee(2)............................ 60 Director
</TABLE>
- ---------------
(1) Member of Audit Committee
(2) Member of Compensation Committee
All directors hold office until the next annual meeting of shareholders or
until their successors are duly elected and qualified. Executive officers serve
at the discretion of the Board of Directors.
Monroe J. Carell, Jr. has served as Chief Executive Officer and Chairman of
the Board of Directors of the Company for over 17 years. Mr. Carell has also
served as a trustee of Vanderbilt University in Nashville, Tennessee, since 1991
and is a member of the Board of Trust of the Urban Land Institute. Mr. Carell is
also a member of the Board of Directors of Vanderbilt University Medical Center.
James H. Bond has served as President, Chief Operating Officer, and a
member of the Board of Directors of the Company since October 1990 and has been
employed by the Company since 1971 in various positions including general
manager and regional manager.
Stephen A. Tisdell has served as Chief Financial Officer of the Company
since February 1993. From May 1992 to February 1993 he was President and owner
of Tisdell Consulting, an independent financial consulting company. Mr. Tisdell
served as Executive Vice President, Treasurer, and Secretary of Maison Blanche,
Inc., a retail clothing company from June 1991 until May 1992. From February
1987 until June 1991, he served as Group Vice President -- Finance and Chief
Accounting Officer of Service Merchandise Corporation, a nationwide retail goods
company.
Emanuel J. Eads has served as a Senior Vice President of the Company since
1985 and has served in various other positions with the Company, including
general manager and regional manager, since 1974.
Jeff L. Wolfe has served as a Senior Vice President of the Company since
May 1994 and has served in various other positions with the Company, including
general manager and regional manager, since 1988.
Alan J. Kahn has served as Senior Vice President -- European Operations of
the Company since April 1996 and has served in various other positions with the
Company, including general manager and regional manager, since 1988.
Henry J. Abbott has served as Vice President -- General Counsel of the
Company since 1986 and as Secretary since 1980. Mr. Abbott has been an employee
of the Company since 1977.
38
<PAGE> 43
Gregory Susick has served as Senior Vice President of the Company since
October, 1996 and has served in various other positions with the Company,
including general manager and regional manager, since 1989.
William R. Porter has served as Senior Vice President -- Acquisitions of
the Company since November 1996. From 1991 to 1996, Mr. Porter served as
Executive Vice President -- Marketing for Ace Parking, a parking management
company.
Al Cornish has served as Vice President of Human Resources of the Company
since December 1996. From 1995 to 1996, Mr. Cornish served as Director of Human
Resources Development for Roy Rogers Restaurants, a restaurant company. From
1993 to 1994, he served as the Director of Human Resources -- Mid Atlantic
Region for Automatic Data Processing (ADP), a payroll service and processing
company. From 1988 to 1992, he served as Director of Operations for Southland
Corporation, a convenience store operation company.
Chris Callas has served as Corporate Controller of the Company since
November 1996. From 1990 to 1996, Mr. Callas served as Vice
President -- Controller of Worldspan, L.P., a travel agency automation and
airline reservation processing firm.
John W. Eakin has served as a director of the Company since August 1993.
Mr. Eakin has been President of Eakin-Smith, Inc., a real estate development and
management company, since September 1987. In April 1996, Mr. Eakin merged his
company with Highwoods Properties, Inc., an office and industrial real estate
investment trust. Mr. Eakin serves as a director of Highwoods Properties, Inc.
and serves on the advisory board of First American Bank.
Edward G. Nelson has served as a director of the Company since August 1993.
Mr. Nelson formed Nelson Capital Corp., a merchant banking firm, in 1985, and
has served as the President and Chairman of the Board of such firm since its
organization. Mr. Nelson serves as a director of each of Advocat Inc., a
long-term care facility owner and operator; Osborn Communications Company, an
owner and operator of radio and television stations; ClinTrials Research Inc., a
clinical research organization; and Berlitz International, Inc., a language
services company. Mr. Nelson also serves as a trustee of Vanderbilt University.
William C. O'Neil, Jr. has served as a director of the Company since August
1993. Mr. O'Neil has served as Chairman of the Board, President, and Chief
Executive Officer of ClinTrials Research Inc., a clinical research organization,
since September 1989. Mr. O'Neil serves as a director of each of Advocat Inc., a
long-term care facility owner and operator; ATRIX Laboratories, Inc., a drug
delivery company; Sigma Aldrich Chemical Company, a manufacturer of research
chemicals; and American Healthcorp, Inc., a specialty healthcare service
company.
P.E. Sadler has served as a director of the Company since 1996. Mr. Sadler
is the Chairman of the Board of ActaMed Corporation, a healthcare information
services company that he founded in 1992. In 1979, Mr. Sadler founded MicroBilt
Corporation and served as its Chairman and Chief Executive Officer. After
MicroBilt was acquired by First Financial Management Corporation in 1989, Mr.
Sadler remained as Chairman and Chief Executive Officer until 1991.
Cecil Conlee has served as a director of the Company since 1996. Mr. Conlee
has served as Chairman of the Board and Chief Executive Officer of CGR
Investors, a real estate investment and portfolio management services company,
since 1989. Mr. Conlee serves on the Board of Directors of Oxford Industries,
Inc., a clothing manufacturer, and Rodamco, N.V., a real estate investment
company. Mr. Conlee also serves as a trustee of Corporate Property Investors,
International Council of Shopping Centers and Vanderbilt University. Mr. Conlee
is a member and past trustee of the Urban Land Institute, a director of Central
Atlanta Progress, The Corporation for Olympic Development Atlanta, and The
Southern Center for International Studies.
FUTURE BOARD EXPANSION
In connection with the Square Acquisition, the Company has agreed to use
its best efforts to cause Lowell Harwood, the former Chairman and Chief
Executive Officer of Square, to be elected to the Company's Board of Directors.
The Company anticipates that the Company's Board will vote to increase the
number of directors by one and elect Mr. Harwood as a director.
39
<PAGE> 44
PRINCIPAL AND SELLING SHAREHOLDERS
The table below sets forth certain information regarding the beneficial
ownership of the Common Stock as of the date hereof, and as adjusted to reflect
the sale of shares offered hereby, of (i) each Selling Shareholder, (ii) each
person known to the Company to beneficially own more than 5% of the Common
Stock, (iii) each director of the Company, (iv) the Company's Chief Executive
Officer and the four other most highly compensated executive officers, and (v)
all directors and executive officers of the Company as a group. Unless otherwise
indicated, the persons listed below have sole voting and investment power over
the shares of Common Stock shown as beneficially owned by them.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THE OWNED AFTER THE
OFFERING(1) SHARES TO BE OFFERING(1)
------------------- SOLD IN THE -------------------
NUMBER PERCENT OFFERING NUMBER PERCENT
--------- ------- ------------ --------- -------
<S> <C> <C> <C> <C> <C>
Monroe J. Carell, Jr.(2)(3).................... 7,316,421 41.8% 217,334 7,099,087 34.1%
The Carell Children's Trust(4)................. 4,980,142 28.5 371,000 4,588,142 22.1
Monroe Carell, Jr. 1994 Grantor Retained
Annuity Trust(5)............................. 1,168,049 6.7 -- 1,168,049 5.6
Tennessee Botanical Gardens & Fine Arts,
Inc. -- Cheekwood............................ 33,333 * 33,333 -- --
Monroe J. Carell, Jr. Foundation(2)(6)......... 133,333 * 133,333 -- --
Kathryn Carell Brown Foundation(7)............. 30,000 * 15,000 15,000 *
Edith Carell Johnson Foundation(8)............. 30,000 * 15,000 15,000 *
Julia Carell Stadler Foundation(9)............. 30,000 * 15,000 15,000 *
James H. Bond(10).............................. 207,000 1.2 -- 207,000 1.0
Emanuel J. Eads(11)............................ 13,500 * -- 13,500 *
Jeff L. Wolfe(12).............................. 12,450 * -- 12,450 *
Alan J. Kahn(13)............................... 6,900 * -- 6,900 *
Cecil Conlee(14)............................... 10,024 * -- 10,024 *
John W. Eakin(15).............................. 13,250 * -- 13,250 *
Edward G. Nelson(16)........................... 15,500 * -- 15,500 *
William C. O'Neil, Jr.(15)..................... 17,000 * -- 17,000 *
P.E. Sadler(17)................................ 9,867 * -- 9,867 *
-------
Total................................ 800,000
=======
All directors and executive officers as a group
(16 persons)(18)............................. 7,659,361 43.8% 7,442,027 35.6%
</TABLE>
- ---------------
* Indicates less than 1%
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares as of the date of the Offering that
such person or group has the right to acquire within 60 days after such
date, or with respect to which such person otherwise has or shares voting
or investment power. For purposes of computing beneficial ownership and the
percentages of outstanding shares held by each person or group of persons
on a given date, shares which such person or group has the right to acquire
within 60 days after such date are shares for which such person has
beneficial ownership and are deemed to be outstanding for purposes of
computing the percentage for such person, but are not deemed to be
outstanding for the purpose of computing the percentage of any other
person.
(2) Address: 2401 21st Avenue South, Suite 200, Nashville, Tennessee 37212.
(3) Includes 1,256,491 shares held by two trusts with respect to which Mr.
Carell is trustee. See footnote 5. Excludes 4,980,142 shares held by The
Carell Children's Trust and 54,420 shares held by trusts benefiting Mr.
Carell's grandchildren, with respect to which Mr. Carell disclaims
beneficial ownership.
(4) The Carell Children's Trust is a trust created by Mr. Carell in 1987 for
the benefit of his children, the trustee of which is Equitable Trust
Company, 800 Nashville City Center, 511 Union, Nashville, Tennessee 37219,
an affiliate of Equitable Securities Corporation, a co-managing underwriter
in this Offering.
40
<PAGE> 45
(5) The Monroe Carell, Jr. 1994 Grantor Retained Annuity Trust is a trust
created in 1994, of which Mr. Carell is trustee and from which Mr. Carell
is entitled to an annuity until September 1999 with the remainder passing
to his children.
(6) The Monroe J. Carell, Jr. Foundation is a charitable private foundation of
which Mr. Carell is president and a director.
(7) The Kathryn Carell Brown Foundation is a private foundation established by
Mrs. Brown in 1996. Mrs. Brown serves as the Foundation's trustee. Address:
c/o Equitable Trust Company, 800 Nashville City Center, 511 Union Street,
Nashville, Tennessee 37219.
(8) The Edith Carell Johnson Foundation is a private foundation established by
Mrs. Johnson in 1996. Mrs. Johnson serves as the Foundation's trustee.
Address: c/o Equitable Trust Company, 800 Nashville City Center, 511 Union
Street, Nashville, Tennessee 37219.
(9) The Julia Carell Stadler Foundation is a private foundation established by
Mrs. Stadler in 1996. Mrs. Stadler serves as the Foundation's trustee.
Address: c/o Equitable Trust Company, 800 Nashville City Center, 511 Union
Street, Nashville, Tennessee 37219.
(10) Includes 178,500 shares of restricted stock granted in connection with Mr.
Bond's Performance Agreement, 750 shares held by his spouse, 750 shares
held by the Emily Bond Trust of which Mrs. Bond is trustee, and options to
purchase 12,000 shares of Common Stock.
(11) Includes options to purchase 9,000 shares of Common Stock.
(12) Includes options to purchase 9,000 shares of Common Stock, 1,500 shares
held by Mr. Wolfe's spouse, and 1,500 shares held by the Patricia Wolfe
Children's Trust of which Mr. Wolfe is trustee, and for which Mr. Wolfe
disclaims beneficial ownership of 750 shares.
(13) Includes options to purchase 6,000 shares of Common Stock.
(14) Includes 524 shares of restricted stock granted in lieu of director
compensation pursuant to the Company's Restricted Stock Plan and options to
purchase 9,500 shares of Common Stock.
(15) Includes options to purchase 9,500 shares of Common Stock.
(16) Includes 3,000 shares held by Mr. Nelson's spouse, of which Mr. Nelson
disclaims beneficial ownership, and options to purchase 9,500 shares of
Common Stock.
(17) Includes 367 shares of Restricted Stock granted in lieu of director
compensation pursuant to the Company's Restricted Stock Plan and options to
purchase 9,500 shares of Common Stock granted pursuant to the Director
Stock Option Plan.
(18) Includes options to purchase 107,500 shares of the Company's Common Stock.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock currently consists of 50,000,000
shares of Common Stock, $.01 par value per share, and 1,000,000 shares of serial
Preferred Stock, par value $.01 per share (the "Preferred Stock"). As of March
6, 1997, there were (i) 17,494,372 shares of Common Stock issued and
outstanding, including 180,057 shares subject to restricted stock agreements,
(ii) 344,650 shares of Common Stock reserved for issuance upon exercise of
outstanding options, and (iii) no shares of Preferred Stock outstanding.
COMMON STOCK
Each holder of Common Stock is entitled to one vote per share on all
matters to be voted on by the shareholders. The Charter does not provide for
cumulative voting and, accordingly, the holders of a majority of the outstanding
shares have the power to elect all directors and to control the resolution of
all issues put to a vote of the shareholders. There are no preemptive or other
subscription rights, conversion rights, or redemption or sinking fund provisions
with respect to shares of the Common Stock. All shares of the Common Stock
outstanding upon consummation of the Offering will be validly issued, fully
paid, and nonassessable. The shares of Common Stock have the following rights,
subject, in each case, to the rights of the holders of any outstanding Preferred
Stock: (i) to receive dividends, if any, as may be declared and paid from time
to time by the Board of Directors, in its discretion, from funds legally
available therefore; and (ii) upon liquidation, dissolution, or winding up of
the Company, to receive pro rata all assets remaining available for
distribution.
41
<PAGE> 46
PREFERRED STOCK
The Company's Board of Directors may authorize, without further action by
the Company's shareholders, the issuance of up to 1,000,000 shares of Preferred
Stock in one or more series, and may fix by resolution, to the extent permitted
by the Tennessee Business Corporation Act, the terms and rights of each such
series, including the voting powers, full or limited, if any, of the shares of
such series and the designations, preferences, and relative, participating,
optional, or other special rights, and qualifications, limitations, or
restrictions thereof. The issuance of Preferred Stock by action of the Board of
Directors could adversely affect the voting power, dividend rights and other
rights of holders of the Common Stock. Issuance of a series of Preferred Stock
could also, depending on the terms of such series, either impede or facilitate
the completion of a merger, tender offer, or other takeover attempt. Although
the Board of Directors is required to make a determination as to the best
interests of the shareholders of the Company when issuing Preferred Stock, the
Board of Directors could act in a manner that would discourage an acquisition
attempt or other transaction that some, or a majority, of the shareholders might
believe to be in the best interests of the Company or in which shareholders
might receive a premium for their stock over the then prevailing market price.
42
<PAGE> 47
UNDERWRITING
Pursuant to the Underwriting Agreement, and subject to the terms and
conditions thereof, the Underwriters named below, acting through J.C. Bradford &
Co., William Blair & Company, L.L.C., and Equitable Securities Corporation, as
representatives of the several Underwriters (the "Representatives"), have
agreed, severally, to purchase from the Company and the Selling Shareholders the
number of shares of Common Stock set forth below opposite their respective
names:
<TABLE>
<CAPTION>
NUMBER
NAME OF UNDERWRITER OF SHARES
- ------------------- ---------
<S> <C>
J.C. Bradford & Co..........................................
William Blair & Company, L.L.C..............................
Equitable Securities Corporation............................
-------
Total.............................................
=======
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions therein set forth, to purchase all shares of Common Stock
offered hereby if any of such shares are purchased.
The Company and the Selling Shareholders have been advised by the
Representatives that the Underwriters propose initially to offer the shares of
Common Stock to the public at the public offering price set forth on the cover
page of this Prospectus and to certain dealers at such price less a concession
not in excess of $ per share. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of $ per share to
certain other dealers. After the Offering, the public offering price and such
concessions may be changed. The Representatives have informed the Company that
the Underwriters do not intend to confirm sales to accounts over which they
exercise discretionary authority.
The offering of the shares of Common Stock is made for delivery when, as,
and if accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation, or modification of the offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the shares.
The Company has granted to the Underwriters an option, exercisable not
later than 30 days after the date of the effectiveness of the Offering, to
purchase up to 410,000 shares of Common Stock to cover over-allotments, if any.
To the extent the Underwriters exercise this option, each of the Underwriters
will have a firm commitment to purchase approximately the same percentage
thereof that the number of shares of Common Stock to be purchased by it shown
the table above bears to the total number of shares in such table, and the
Company will be obligated, pursuant to the option, to sell such shares to the
Underwriters. The Underwriters may exercise such option only to cover
over-allotments made in connection with the sale of the shares of Common Stock
offered hereby. If purchased, the Underwriters will sell these additional shares
on the same terms as those on which the shares are being offered.
Subject to applicable limitations, the Underwriters, in connection with the
Offering, may place bids for or make purchases of the Common Stock in the open
market or otherwise, for long or short account, or cover short positions
incurred, to stabilize, maintain, or otherwise affect the price of the Common
Stock, which might be higher than the price that otherwise might prevail in the
open market. There can be no assurance that the price of the Common Stock will
be stabilized, or that stabilizing, if commenced, will not be discontinued at
any time. Subject to applicable limitations, the Underwriters may also place
bids or make purchases on behalf of the underwriting syndicate to reduce a short
position created in connection with the Offering.
The Company, its executive officers and directors, and the Selling
Shareholders have agreed that they will not, without the prior written consent
of J.C. Bradford & Co., issue, sell, transfer, assign, or otherwise dispose of
any of the Common Stock or options, warrants, or rights to acquire Common Stock
owned by them prior to the expiration of 180 days from the date of this
Prospectus.
The Underwriting Agreement provides that the Company and the Selling
Shareholders will indemnify the Underwriters and controlling persons, if any,
against certain liabilities, including liabilities under the
43
<PAGE> 48
Securities Act, or will contribute to payments that the Underwriters or any such
controlling persons may be required to make in respect thereof.
J.C. Bradford & Co. has, from time to time, provided investment banking and
financial advisory services for the Company, including in connection with the
Square Acquisition.
EXPERTS
The consolidated financial statements of Central Parking Corporation and
Subsidiaries as of September 30, 1996 and 1995, and for each of the years in the
three-year period ended September 30, 1996, and the statements of direct
revenues and expenses of Civic Center Corporation (a managed facility of Central
Parking System of St. Louis, Inc.) for the period from January 1, 1996 through
March 20, 1996 and for the year ended December 31, 1995, have been incorporated
by reference herein and in the registration statement in reliance upon the
reports of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The audited financial statements of Square Industries, Inc. and its
subsidiaries as of December 31, 1996 and 1995 and for the 10 month period ended
December 31, 1994 and the years ended December 31, 1995 and 1996 have been
incorporated by reference herein and in the registration statement in reliance
upon the report of Deloitte & Touche LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The audited financial statements of Civic Parking, LLC for the period from
March 21, 1996 through December 31, 1996 have been incorporated by reference
herein and in the registration statement in reliance on the report of Joseph
Decosimo and Company, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Harwell Howard Hyne Gabbert & Manner, P.C., Nashville,
Tennessee. Certain legal matters related to the Offering will be passed upon for
the Underwriters by Bass, Berry & Sims PLC, Nashville, Tennessee.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act,
with respect to the Common Stock offered hereby. This Prospectus constitutes a
part of the Registration Statement and does not contain all of the information
set forth in the Registration Statement and the exhibits and schedules thereto,
certain portions of which have been omitted in accordance with the rules and
regulations of the Commission. Statements contained in the Prospectus as to any
contracts, agreements, or other documents filed as an exhibit to, or
incorporated by reference in, the Registration Statement are qualified in all
respects to the copy of such contract, agreement, or other document filed as an
exhibit or incorporated by reference in the Registration Statement. For further
information with respect to the Company and the Common Stock offered hereby,
reference is hereby made to the Registration Statement, including the exhibits
and schedules thereto.
The Company is subject to the informational requirements of the Exchange
Act, and, in accordance therewith, files reports, proxy statements, and other
information with the Commission. Copies of the Registration Statement (with
exhibits), as well as such reports, proxy statements, and other information
filed by the Company with the Commission may be inspected and copied at the
public reference facilities maintained by the Commission located at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: Chicago Regional Office, Citicorp
Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661; and New
York Regional Office, Seven World Trade Center, Suite 1300, New York, New York
10048. Copies of such material may be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
44
<PAGE> 49
prescribed rates. The Commission also maintains a web site (http://www.sec.gov)
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the Commission. The Common Stock
is listed on the NYSE and reports, proxy material, and other information
concerning the Company may be inspected at the offices of the NYSE, Operations,
20 Broad Street, New York, New York 10005.
INFORMATION INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated and made a part of this Prospectus
by reference, except as superseded or modified herein:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996;
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1996;
(3) The Company's Current Report on Form 8-K dated December 31, 1996,
as amended by the Current Reports on Form 8-K/A, dated January 16, 1997,
March 17, 1997 and March 21, 1997 relating to the Civic Acquisition;
(4) The Company's Current Report on Form 8-K dated January 17, 1997,
as amended by the Current Reports on Form 8-K/A, dated March 18, 1997 and
March 21, 1997, relating to the Square Acquisition; and
(5) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed on September 15, 1995.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the Offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such 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, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
which have been or may be incorporated by reference herein, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference therein). Requests for such copies should be directed to the Company's
principal executive offices, Attention: Investor Relations Department, Central
Parking Corporation, 2401 21st Avenue South, Suite 200, Nashville, Tennessee
37212, telephone number 615-297-4255.
45
<PAGE> 50
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING SHAREHOLDERS OR ANY OF THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY THE SHARES OF COMMON STOCK 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 ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Use of Proceeds....................... 11
Price Range of Common Stock and
Dividend Policy..................... 11
Capitalization........................ 12
Unaudited Pro Forma Consolidated
Financial Information............... 13
Selected Historical and Pro Forma
Financial Information............... 19
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 21
Business.............................. 29
Management............................ 38
Principal and Selling Shareholders.... 40
Description of Capital Stock.......... 41
Underwriting.......................... 43
Experts............................... 44
Legal Matters......................... 44
Available Information................. 44
Information Incorporated by
Reference........................... 45
</TABLE>
======================================================
======================================================
4,100,000 SHARES
[CENTRAL PARKING CORPORATION LOGO]
COMMON STOCK
------------------------
PROSPECTUS
--------------------
J.C. BRADFORD & CO.
MARCH , 1997
======================================================
<PAGE> 51
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated costs and expenses (all of
which will be shared by the Company and the Selling Shareholders in proportion
to the proceeds received by the Company and each Selling Shareholder) in
connection with the Offering described in the Registration Statement.
<TABLE>
<S> <C>
Commission Registration Fee................................. $ 37,584
New York Stock Exchange Listing Fee......................... 10,500
NASD Fee.................................................... 10,203
Blue Sky Fees and Expenses*................................. 5,000
Printing and Engraving Expenses*............................ 150,000
Legal Fees and Expenses*.................................... 225,000
Auditors' Fees and Expenses*................................ 200,000
Miscellaneous*.............................................. 61,713
--------
Total*............................................ $700,000
========
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) The Tennessee Business Corporation Act (the "TBCA") provides that a
corporation may indemnify any of its directors against liability incurred in
connection with a proceeding if (i) the director acted in good faith, (ii) in
the case of conduct in his or her official capacity with the corporation, the
director reasonably believed such conduct was in the corporation's best
interest, (iii) in all other cases, the director reasonably believed that his or
her conduct was not opposed to the best interest of the corporation, and (iv) in
connection with any criminal proceeding, the director had no reasonable cause to
believe that his or her conduct was unlawful. In actions brought by or in the
right of the corporation, however, the TBCA provides that no indemnification may
be made if the director was adjudged to be liable to the corporation. In cases
where the director is wholly successful, on the merits or otherwise, in the
defense of any proceeding instigated because of his or her status as a director
of a corporation, the TBCA mandates that the corporation indemnify the director
against reasonable expenses incurred in the proceeding. The TBCA also provides
that in connection with any proceeding charging improper benefit to a director,
no indemnification may be made if such director is adjudged liable on the basis
that personal benefit was improperly received. Notwithstanding the foregoing,
the TBCA provides that a court of competent jurisdiction, upon application, may
order that a director be indemnified for reasonable expense if, in consideration
of all relevant circumstances, the court determines that such individual is
fairly and reasonably entitled to indemnification, whether or not the standard
of conduct set forth above was met.
(b) Article Eleven of the Amended and Restated Charter of the Registrant
sets forth the extent to which officers or directors of the Registrant may be
insured or indemnified against any liabilities which they may incur. The general
effect of such provision is that any person made a party to any action, suit or
proceeding by reason of the fact that he or she is or was a director or officer
of the Registrant will be indemnified by the Registrant against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding, to the fullest extent permitted under the laws of the State
of Tennessee. In addition, such provision provides that, in the Registrant's
sole discretion, the Registrant may indemnify employees or agents against such
expenses, judgments, fines, and amounts paid in settlement.
II-1
<PAGE> 52
(c) The Company maintains a policy of directors' and officers' insurance
that would in certain instances provide the funds necessary for the Registrant
to meet its obligations under its Amended and Restated Charter.
(d) Reference is also made to Section 8 of the Underwriting Agreement filed
as Exhibit 1 hereto, which provides for indemnification by the Underwriters of
the Company and certain officers, directors, and controlling persons against
certain liabilities.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------- -----------------------
<C> <C> <S>
1 -- Form of Underwriting Agreement
2.1 -- Agreement and Plan of Merger, dated December 6, 1996, by and
among Central Parking Corporation, Central Parking
System -- Empire State, Inc., and Square Industries, Inc.
(incorporated by reference to Exhibit (c)(1) to the
Company's Tender Offer Statement on Schedule 14D-1 filed
December 13, 1996)
2.2 -- Agreement for Sale and Purchase of Membership Interests,
dated November 22, 1996, by and among Central Parking System
Realty, Inc. Central Parking System Realty of Missouri,
Inc., Gateway Grove, Inc., and SLC Holdings, L.L.C.
(incorporated by reference to Exhibit 2.2 to the Company's
Current Report on Form 8-K filed January 14, 1997)
4.1 -- Amended and Restated Charter of the Registrant, as amended,
restated to incorporate the Amendment adopted February 28,
1997 solely for the purposes of electronic filing.
4.2 -- Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 3.2 to the Company's Registration
Statement No. 33-95640 on Form S-1)
4.3 -- Form of Common Stock Certificates (incorporated by reference
to Exhibit 4.1 to the Company's Registration Statement No.
33-95640 on Form S-1)
5 -- Opinion of Harwell Howard Hyne Gabbert & Manner, P.C.
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of Deloitte & Touche LLP
23.3 -- Consent of Joseph Decosimo and Company, LLP
23.4 -- Consent of Harwell Howard Hyne Gabbert & Manner, P.C.
(included in Exhibit 5)
24 -- Power of Attorney (included on page II-4)
99 -- Consent of Lowell Harwood
</TABLE>
(b) Financial Statement Schedules
The schedules for which provision is made in the applicable accounting
regulations of the Commission are not required under the related instructions or
are inapplicable and, therefore, have been omitted.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. 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 foregoing provisions, or
otherwise, that 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 against the Registrant by such
director, officer, or
II-2
<PAGE> 53
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
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
2. For purposes of determining any liability under the Securities Act,
that 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.
3. For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
4. For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus 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.
II-3
<PAGE> 54
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Nashville, State of Tennessee, on March 21, 1997.
CENTRAL PARKING CORPORATION
By: /s/ MONROE J. CARELL, JR.
------------------------------------
Monroe J. Carell, Jr.
Chairman
POWER OF ATTORNEY
Each person whose signature to the Registration Statement appears below
hereby appoints Monroe J. Carell, Jr. and Stephen A. Tisdell, and each of them,
one of whom may act without the joinder of the other, as his attorney-in-fact to
execute in the name and on behalf of any such persons, individually and in the
capacity stated below, and to file all amendments and post-effective amendments
to this Registration Statement, which amendment or amendments may make such
changes and additions in this Registration Statement as such attorney-in-fact
may deem necessary or appropriate and to execute and file any registration
statement relating to the same offering as this Registration Statement that is
to be effective upon filing pursuant to Rule 462(b) under the Securities Act.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ MONROE J. CARELL, JR. Chief Executive Officer March 21, 1997
- ----------------------------------------------------- (Principal Executive
Monroe J. Carell, Jr. Officer), Chairman of
the Board
/s/ JAMES H. BOND President and Chief March 21, 1997
- ----------------------------------------------------- Operating Officer,
James H. Bond Director
/s/ STEPHEN A. TISDELL Chief Financial Officer March 21, 1997
- ----------------------------------------------------- (Principal Financial
Stephen A. Tisdell and Accounting
Officer)
/s/ JOHN W. EAKIN Director March 21, 1997
- -----------------------------------------------------
John W. Eakin
/s/ EDWARD G. NELSON Director March 21, 1997
- -----------------------------------------------------
Edward G. Nelson
/s/ WILLIAM C. O'NEIL, JR. Director March 21, 1997
- -----------------------------------------------------
William C. O'Neil, Jr.
/s/ P.E. SADLER Director March 21, 1997
- -----------------------------------------------------
P.E. Sadler
/s/ CECIL CONLEE Director March 21, 1997
- -----------------------------------------------------
Cecil Conlee
</TABLE>
II-4
<PAGE> 55
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION OF EXHIBITS NUMBER
- ---------- ----------------------- ------
<C> <C> <S> <C>
1 -- Form of Underwriting Agreement
2.1 -- Agreement and Plan of Merger, dated December 6, 1996, by and
among Central Parking Corporation, Central Parking
System -- Empire State, Inc., and Square Industries, Inc.
(incorporated by reference to Exhibit (c) (1) to the
Company's Tender Offer Statement on Schedule 14D-1 filed
December 13, 1996)
2.2 -- Agreement for Sale and Purchase of Membership Interests,
dated November 22, 1996, by and among Central Parking System
Realty, Inc. Central Parking System Realty of Missouri,
Inc., Gateway Grove, Inc., and SLC Holdings, L.L.C.
(incorporated by reference to Exhibit 2.2 to the Company's
Current Report on Form 8-K filed January 14, 1997)
4.1 -- Amended and Restated Charter of the Registrant, as amended,
restated to incorporate the Amendment adopted February 28,
1997 solely for the purposes of electronic filing.
4.2 -- Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 3.2 of the Company's Registration
Statement No. 33-95640 on Form S-1)
4.3 -- Form of Common Stock Certificates (incorporated by reference
to Exhibit 4.1 to the Company's Registration Statement No.
33-95640 on Form S-1)
5 -- Opinion of Harwell Howard Hyne Gabbert & Manner, P.C.
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of Deloitte & Touche LLP
23.3 -- Consent of Joseph Decosimo and Company, LLC
23.4 -- Consent of Harwell Howard Hyne Gabbert & Manner, P.C.
(included in Exhibit 5)
24 -- Power of Attorney (included on page II-4)
99 -- Consent of Lowell Harwood
</TABLE>
<PAGE> 1
EXHIBIT 1
CENTRAL PARKING CORPORATION
4,510,000 SHARES
OF
COMMON STOCK
UNDERWRITING AGREEMENT
April ____, 1997
J.C. BRADFORD & CO., LLC
WILLIAM BLAIR & COMPANY, LLC
EQUITABLE SECURITIES CORPORATION
As Representatives of the Several Underwriters
c/o J.C. Bradford & Co.
J.C. Bradford Financial Center
330 Commerce Street
Nashville, Tennessee 37201
Ladies and Gentlemen:
Central Parking Corporation, a Tennessee corporation (the "Company"),
and certain shareholders of the Company identified on Schedule I hereto (the
"Selling Shareholders") propose to sell to the several underwriters named in
Schedule II hereto (the "Underwriters"), for whom you are acting as the
representatives (the "Representatives"), 3,300,000 and 800,000 shares,
respectively, 4,100,000 of common stock, par value $.01 per share ("Common
Stock"), of the Company. The 4,100,000 shares of Common Stock are referred to
herein as the "Firm Shares." The Company proposes to grant to the Underwriters
an option to purchase up to 410,000 additional shares of Common Stock (the
"Option Shares"), as provided for in Section 3 of this Agreement, for the
purpose of covering over-allotments. The Underwriters, severally and not
jointly, are willing to purchase the Firm Shares set forth opposite their
respective names on Schedule II hereto and their pro rata share of the Option
Shares in the event the Representatives elect to exercise the over- allotment
option in whole or in part. The Firm Shares and the Option Shares purchasable
pursuant to this Agreement are collectively referred to herein as the "Shares."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
<PAGE> 2
(a) The Company meets the requirements for use of, and
has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), a registration statement on Form S-3 (Registration
No. 333-__________), including the related preliminary prospectus
relating to the Shares, and has filed one or more amendments thereto.
Copies of such registration statement and any amendments, including
any post-effective amendments, and all forms of the related
prospectuses contained therein and any supplements thereto, have been
delivered to you. Such registration statement, including the
prospectus, Part II, the information incorporated by reference, all
financial schedules and exhibits thereto, and all information deemed
to be a part of such Registration Statement pursuant to Rule 430A and
Rule 434 under the Securities Act, as amended at the time when it
shall become effective, together with any registration statement filed
by the Company pursuant to Rule 462(b) of the Securities Act, is
herein referred to as the "Registration Statement," and the prospectus
included as part of the Registration Statement on file with the
Commission that discloses all the information that was omitted from
the prospectus on the effective date pursuant to Rule 430A or Rule 434
of the Rules and Regulations (as defined below) and in the form filed
pursuant to Rule 424(b) under the Securities Act is herein referred to
as the "Final Prospectus." The prospectus included as part of the
Registration Statement on the date when the Registration Statement
became effective is referred to herein as the "Effective Prospectus."
Any prospectus included in the Registration Statement and in any
amendment thereto prior to the effective date of the Registration
Statement is referred to herein as a "Preliminary Prospectus." For
purposes of this Agreement, "Rules and Regulations" mean the rules and
regulations promulgated by the Commission under either the Securities
Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as applicable.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, complied with the
requirements of the Securities Act and the Rules and Regulations, and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing does
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and in the first, third, and fourth
paragraphs under the caption "Underwriting" in the Final Prospectus).
When the Registration Statement becomes effective and at all times
subsequent thereto up to and including the First Closing Date (as
hereinafter defined), (i) the Registration Statement, the Effective
Prospectus, and the Final Prospectus, and any amendments or
supplements thereto will contain all statements which are required to
be stated therein in accordance with the Securities Act, the Exchange
Act, and the Rules and Regulations and will comply with the
requirements of the Securities Act, the Exchange Act and the Rules and
Regulations, and (ii) neither the Registration Statement, the
Effective Prospectus, nor the Final Prospectus nor any amendment or
supplement thereto will include
2
<PAGE> 3
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not
misleading; except that the foregoing does not apply to statements or
omissions made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically
for use therein (it being understood that the only information so
provided is the information included in the last paragraph on the
cover page and in the first, third, and fourth paragraphs under the
caption "Underwriting" in the Final Prospectus).
(c) The documents that are incorporated by reference in
any Preliminary, Effective and Final Prospectus or from which
information is so incorporated by reference, when they become
effective or were filed with the Commission, as the case may be,
complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations, and any documents so filed prior to the termination of
this offering and incorporated by reference subsequent to the
effective date of the Registration Statement shall, when they are
filed with the Commission, conform in all material respects with the
requirements of the Securities Act and the Exchange Act, as
applicable, and the Rules and Regulations.
(d) The Company and each subsidiary of the Company (as
used herein, the term "subsidiary" includes Square Industries, Inc.
and any other corporation, joint venture, or partnership in which the
Company or any subsidiary of the Company has 50% or greater ownership
interest) is duly organized and validly existing and in good standing
under the laws of its jurisdiction of incorporation, with full power
and authority (corporate and other, as the case may be) to own its
properties and conduct its business as now conducted and is duly
qualified or authorized to do business and is in good standing in all
jurisdictions wherein the nature of its business or the character of
property owned or leased may require it to be qualified or authorized
to do business, except for jurisdictions in which the failure to so
qualify would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole. The Company and its subsidiaries
hold all licenses, consents, and approvals, and have satisfied all
eligibility and other similar requirements imposed by federal and
state regulatory bodies, administrative agencies, or other
governmental bodies, agencies, or officials, in each case as material
to the conduct of the business in which it is engaged as described in
the Effective Prospectus and the Final Prospectus.
(e) The capitalization of the Company as of December 31,
1996 is as set forth under the caption "Capitalization" in the
Effective Prospectus and the Final Prospectus, and the Company's
capital stock conforms to the description thereof contained or
incorporated by reference in the Effective Prospectus and the Final
Prospectus. All the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. None of the issued shares of capital stock of the
Company have been issued in violation of any preemptive or similar
rights. The Shares have been duly and validly authorized and, upon
issuance and delivery and payment therefor in the manner
3
<PAGE> 4
herein described, will be validly issued, fully paid, and
nonassessable. Upon the effective date of the offering of the Shares,
there will be no preemptive rights or other rights to subscribe for or
to purchase, or any restriction upon the transfer of, any shares of
Common Stock pursuant to the Company's Amended and Restated Charter,
bylaws, or other governing documents or any agreement or other
instrument to which the Company is a party or by which it may be
bound, except as described in the Effective Prospectus and the Final
Prospectus, and except for restrictions on transfer imposed under
applicable securities laws. Neither the filing of the Registration
Statement nor the offer or sale of the Shares as contemplated by this
Agreement gives rise to any rights for or relating to the registration
of any shares of Common Stock or any other securities of the Company.
The Underwriters will receive good and marketable title to the Shares
to be issued and delivered hereunder by the Company, free and clear of
all liens, encumbrances, claims, security interests, restrictions,
shareholders' agreements and voting trusts whatsoever.
(f) As of the date hereof, except as set forth on Exhibit
1(f) hereto, all of the outstanding shares of capital stock or equity
interests of the Company's subsidiaries are owned by the Company
directly or indirectly through another subsidiary, free and clear of
all liens, claims, encumbrances, security interests, restrictions,
shareholder agreements, voting trusts or other claims of third
parties. There are no preemptive rights or other rights to subscribe
for or purchase, or any restriction upon the transfer of any shares of
capital stock of the Company's subsidiaries pursuant to any
subsidiary's charter, bylaws, or other governing documents or any
agreement or other instruments to which such subsidiary is a party.
(g) All offers and sales of the Company's securities
prior to the date hereof were at all relevant times duly registered or
the subject of an available exemption from the registration
requirements of the Securities Act and the applicable state securities
or Blue Sky laws.
(h) The Company has full legal right, power, and
authority to enter into this Agreement and to sell and deliver the
Shares to the Underwriters as provided herein, and this Agreement has
been duly authorized, executed, and delivered by the Company and
constitutes a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms. No consent,
approval, authorization, or order of any court or governmental agency
or body or third party is required for the performance of this
Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except such as have been obtained
and such as may be required by the National Association of Securities
Dealers, Inc. ("NASD") or under the Securities Act, or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters. The issue and sale of
the Shares by the Company, the Company's performance of this
Agreement, and the consummation of the transactions contemplated
hereby will not result in a breach or violation of, or conflict with,
any of the terms and provisions of, or constitute a default by the
Company under, any indenture,
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<PAGE> 5
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or to which any of their properties is subject, the Amended and
Restated Charter or bylaws of the Company, or any statute or any
judgment, decree, order, rule, or regulation of any court or
governmental agency or body applicable to the Company or any of its
subsidiaries or any of their properties. The Company is not in
violation of its Amended and Restated Charter or bylaws or any law,
administrative rule, or regulation or arbitrator's or administrative
or court decree, judgment or order or in violation or default (there
being no existing state of facts which with notice or lapse of time or
both would constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, deed of trust, mortgage, loan agreement, note,
lease, agreement or other instrument or permit to which it is a party
or by which it or any of its properties is or may be bound, other than
violations and defaults which could not reasonably be expected to have
a material adverse effect on the business condition (financial or
otherwise), prospects, net worth, or results of operations of the
Company and its subsidiaries, taken as a whole.
(i) The consolidated financial statements and the related
notes of the Company included or incorporated by reference in the
Registration Statement, the Effective Prospectus and the Final
Prospectus present fairly the financial position, results of
operations, and changes in financial position and cash flow of the
Company at the dates and for the periods to which they relate and have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
indicated. The unaudited pro forma financial statements included or
incorporated by reference in the Registration Statement, the Effective
Prospectus, and the Final Prospectus comply in all material respects
with the applicable accounting requirements of Article 11 of
Regulation S-X promulgated by the Commission, and the pro forma
adjustments have been applied properly to the historical financial
statements. The other financial and statistical data included or
incorporated by reference in the Effective Prospectus and the Final
Prospectus fairly presents the information set forth therein on the
basis stated in the Effective Prospectus and the Final Prospectus.
KPMG Peat Marwick LLP, whose report appears in the Effective
Prospectus and the Final Prospectus, are independent accountants as
required by the Securities Act and the Rules and Regulations.
(j) Subsequent to September 30, 1996, neither the Company
nor any of its subsidiaries has sustained any material loss or
interference with its or their business or properties from fire,
flood, hurricane, earthquake, accident, or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, which is not disclosed in the
Effective Prospectus and the Final Prospectus; and subsequent to the
respective dates as of which information is given in the Registration
Statement, the Effective Prospectus and the Final Prospectus, (i)
neither the Company nor any of its subsidiaries has incurred any
material liabilities or obligations, direct or contingent, or entered
into any material transactions not in the ordinary course of business,
and (ii) there has not been any change in the capital stock,
partnership interests, joint venture interests,
5
<PAGE> 6
long-term debt, obligations under capital leases or short-term
borrowings of the Company, other than in the ordinary course of
business, or any issuance of options, warrants or rights to purchase
the capital stock of the Company, or any adverse change, or any
development involving a prospective adverse change, in the general
affairs, management, business, prospects, financial position, net
worth, or results of operations of the Company, except in each case
as described in or contemplated by the Effective Prospectus and the
Final Prospectus.
(k) There is not pending, or to the knowledge of the
Company threatened, any action, suit, proceeding, inquiry, or
investigation, to which the Company or any of its subsidiaries or any
of the Company's officers or directors is a party, or to which the
property of the Company or any of its subsidiaries is subject, before
or brought by any court or governmental agency or body, wherein an
unfavorable decision, ruling, or finding could prevent or materially
hinder the consummation of this Agreement or could have a material
adverse effect on the business condition (financial or otherwise),
prospects, net worth, or results of operations of the Company and its
subsidiaries, taken as a whole.
(l) There are no contracts or other documents required by
the Securities Act or by the Rules and Regulations to be described in
the Registration Statement, the Effective Prospectus or the Final
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described, incorporated by reference, or filed as
required.
(m) Except as described in the Effective Prospectus and
the Final Prospectus, the Company and its subsidiaries have good and
marketable title to all real and material personal property owned by
them, free and clear of all liens, charges, encumbrances, or defects
except those reflected in the financial statements hereinabove
described. The real and personal property and buildings referred to
in the Effective Prospectus and the Final Prospectus which are leased
from others by the Company or its subsidiaries are held under valid,
subsisting and enforceable leases. The Company and its subsidiaries
own or lease all such properties as are necessary to their operations
as now conducted.
(n) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(o) The Company and each of its subsidiaries have filed
all federal, state, and local income, excise, and franchise tax
returns required to be filed through the date hereof and have paid all
taxes shown as due therefrom; and there is no tax deficiency that has
been,
6
<PAGE> 7
nor does the Company or any of its subsidiaries have knowledge
of any tax deficiency which is likely to be asserted against the
Company or any of its subsidiaries, which if determined adversely
could materially and adversely affect the earnings, assets, affairs,
business prospects, or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole.
(p) The Company and each of its subsidiaries operate
their businesses in conformity in all material respects with all
applicable statutes, common laws, ordinances, decrees, orders, rules,
and regulations of governmental bodies. The Company and each of its
subsidiaries have all material licenses, approvals, or consents to
operate their businesses in all locations in which such businesses are
currently being operated, and neither the Company nor any of its
subsidiaries is aware of any existing or imminent matter that may
materially adversely impact any of their operations or business
prospects other than as specifically disclosed in the Effective
Prospectus and the Final Prospectus. No director, officer, or to the
Company's knowledge, agent or employee of the Company or any of its
subsidiaries, any other person associated with or acting for or on
behalf of the Company or any of its subsidiaries, has directly or
indirectly made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment to any person, private
or public, regardless of form, whether in money, property, or services
(x) to obtain favorable treatment in securing business, (y) to pay for
favorable treatment for business obtained, or (z) to obtain special
concessions or for special concessions already obtained for or in
respect of the Company.
(q) Neither the Company nor any of its subsidiaries has
failed to file with the applicable regulatory authorities any
statement, report, information, or form required by any applicable
law, regulation, or order where the failure to file the same would
have a material adverse effect on the Company and its subsidiaries,
taken as a whole, or on their respective abilities to conduct business
in any state; all such filings or submissions were in material
compliance with applicable laws when filed and no deficiencies have
been asserted by any regulatory commission, agency or authority with
respect to such filings or submissions. Neither the Company nor any
of its subsidiaries has failed to maintain in full force and effect
any material license or permit necessary or proper for the conduct of
their respective businesses, or received any notification that any
revocation or limitation thereof is threatened or pending, and, except
as disclosed in the Effective Prospectus and the Final Prospectus,
there is not pending any change under any law, regulation, license or
permit which could materially adversely affect any of their respective
businesses, operations, properties or business prospects. Neither the
Company nor any of its subsidiaries has received any notice of
violation of or been threatened with a charge of violating and are
not, to the best of their knowledge, under investigation with respect
to a possible violation of any provision of any law, regulation, or
order.
(r) No labor dispute exists with the Company's or any of
its subsidiaries' employees or is imminent which could materially
adversely affect the Company. Neither the
7
<PAGE> 8
Company nor any of its subsidiaries is aware of any existing or
imminent labor disturbance by any of their employees which could be
expected to materially adversely affect the condition (financial or
otherwise), results of operations, properties, affairs, management,
business affairs, or business prospects of the Company and its
subsidiaries, taken as a whole.
(s) The Company owns or possesses, or can acquire on
reasonable terms, the patents, licenses, copyrights, trademarks,
service marks and trade names presently employed by it in connection
with the businesses now operated by it, and neither the Company nor
any of its subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, alone or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs, or business prospects of the Company and
its subsidiaries, taken as a whole.
(t) Neither the Company nor any of the directors,
officers, or to the Company's knowledge, employees or agents of the
Company, have taken and will not take, directly or indirectly, any
action designed to cause or result in, or which has constituted or
which might be expected to constitute, stabilization or manipulation
of the price of the Common Stock.
(u) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
hazardous substances by the Company or any of its subsidiaries (or, to
the knowledge of the Company, any of its or their predecessors in
interest) at, upon or from any of the property now or previously owned
or leased by the Company or any of its subsidiaries in violation of
any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which could reasonably be expected to require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or
remedial action which could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions, a material adverse effect on the business, condition
(financial or otherwise), prospects, properties, net worth or results
of operations of the Company and its subsidiaries, taken as a whole;
there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property
or of any hazardous substances due to or caused by the Company or any
of its subsidiaries or with respect to which the Company or any of its
subsidiaries had knowledge, except for any such spill, discharge,
leak, emission, injection, escapes, dumpings or releases which would
not be reasonably likely to have, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes,
dumpings or releases, a material adverse effect on the business,
condition (financial or otherwise), prospects, properties, net worth
or results of operations of the Company and its subsidiaries, taken as
a whole; and the term "hazardous substances" shall have the meaning
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
8
<PAGE> 9
(v) The Company and its subsidiaries are insured by
insurers of recognized financial responsibility against such
losses and risks and in such amounts as management believes is
appropriate to the business of the Company and its subsidiaries; all
such policies of insurance insuring the Company and its subsidiaries
or their respective businesses, assets, employees, officers and
directors are in full force and effect; the Company and its
subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the
Company or any of its subsidiaries under any such policy or instrument
as to which any insurance company is denying liability or defending
under a reservation of rights clause.
(w) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(x) The Shares have been listed for trading on The New
York Stock Exchange, upon official notice of issuance.
2. Representations and Warranties of the Selling Shareholders.
Each of the Selling Shareholders, severally and not jointly, represents and
warrants to each Underwriter and agrees as follows that:
(a) Such Selling Shareholder at the First Closing Date or
at the Option Closing Date (as such closing dates are defined herein),
as the case may be, will have valid and marketable title to the Shares
set forth in
Schedule I to be sold by such Selling Shareholder, free and
clear of any liens, encumbrances, equities, and claims (other than as
imposed by the Securities Act or this Agreement), and full right,
power, and authority to effect the sale and delivery of such Shares;
and upon the delivery of and payment for the Shares to be sold by such
Selling Shareholder pursuant to this Agreement, valid and marketable
title thereto, free and clear of any liens, encumbrances, equities,
and claims, will be transferred to the Underwriters.
(b) Such Selling Shareholder has duly executed and
delivered the Custody Agreement and Power of Attorney in the form
previously delivered to the Representatives, appointing Monroe J.
Carell, Jr. as each Selling Shareholder's attorney-in-fact (the
"Attorney-in-Fact") and appointing the Company as custodian (the
"Custodian"). The Attorney-in-Fact is authorized to execute, deliver,
and perform this Agreement on behalf of such Selling Shareholder, to
deliver the Shares to be sold by such Selling Shareholder hereunder,
to accept payment therefor, and otherwise to act on behalf of such
Selling Shareholder in connection with this Agreement. Certificates,
in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank, representing
the Shares to be sold by such Selling Shareholder hereunder have been
deposited with the Custodian pursuant to the Custody Agreement for the
purpose of delivery
9
<PAGE> 10
pursuant to this Agreement. Such Selling Shareholder agrees
that the shares of Common Stock represented by the certificates on
deposit with the Custodian are subject to the interest of the
Underwriters hereunder, that the arrangements made for such custody
and the appointment of the Attorney-in-Fact are to that extent
irrevocable, and that the obligations of such Selling Shareholder
hereunder shall not be terminated except as provided in this Agreement
and the Custody Agreement. If such Selling Shareholder should die or
become incapacitated or if any other event should occur, before the
delivery of the Shares of such Selling Shareholder hereunder, the
certificates for such Shares deposited with the Custodian shall be
delivered by the Custodian in accordance with the terms and conditions
of this Agreement as if such death, incapacity, or other event had not
occurred, regardless whether the Custodian or the Attorney- in-Fact
shall have received notice thereof.
(c) Such Selling Shareholder, acting through his duly
authorized Attorney-in-Fact, has duly executed and delivered this
Agreement and the Custody Agreement and Power of Attorney; this
Agreement constitutes a legal, valid, and binding obligation of such
Selling Shareholder, all authorizations and consents necessary for the
execution and delivery of this Agreement and the Custody Agreement and
Power of Attorney on behalf of such Selling Shareholder and for the
sale and delivery of the Shares to be sold by such Selling Shareholder
hereunder have been given, except as may be required by the Securities
Act or state securities laws; and such Selling Shareholder has the
legal capacity and full right, power, and authority to execute this
Agreement and the Custody Agreement and Power of Attorney.
(d) The performance of this Agreement and the Custody
Agreement and Power of Attorney and the consummation of the
transactions contemplated hereby and thereby by such Selling
Shareholder will not result in a breach or violation of, or conflict
with, any of the terms of provisions of, or constitute a default by
such Selling Shareholder under, any indenture, mortgage, deed of
trust, trust (constructive or other), loan agreement, lease,
franchise, license, or other agreement or instrument to which such
Selling Shareholder or any of his or its properties is bound, or any
statute, judgment, decree, order, rule, or regulation of any court or
governmental agency or body applicable to such Selling Shareholder or
any of his or its properties.
(e) Such Selling Shareholder has not distributed nor,
other than as permitted by the Securities Act and the Rules and
Regulations, will distribute any prospectus or other offering material
in connection with the offer and sale of the Shares other than any
Preliminary Prospectus filed with the Commission or the Final
Prospectus or other material permitted by the Securities Act.
(f) For a period of 180 days from the effective date of
the Registration Statement, such Selling Shareholder will not,
directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of any shares of Common Stock, other
than to the
10
<PAGE> 11
Underwriters pursuant to this Agreement, without the prior
written consent of the Representatives.
(g) To the knowledge of such Selling Shareholder, the
representations and warranties of the Company contained in Section 1
of this Agreement are true and correct; such Selling Shareholder has
reviewed and is familiar with the Registration Statement as originally
filed with the Commission and the Preliminary Prospectus contained
therein. The Preliminary Prospectus does not include an untrue
statement of a material fact regarding each Selling Shareholder or
omit to state a material fact regarding each Selling Shareholder
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; such Selling
Shareholder is not prompted to sell the Shares to be sold by such
Selling Shareholder's knowledge of any material non-public information
concerning the Company or any of its subsidiaries.
(h) At the time the Registration Statement becomes
effective (i) such parts of the Registration Statement and any
amendments and supplements thereto as specifically refer to such
Selling Shareholder will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) such
parts of the Effective Prospectus and Final Prospectus as specifically
refer to such Selling Shareholder will not include an untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(i) No approval, consent, order, authorization,
designation, declaration, or filing by or with any regulatory body,
administrative or other governmental body is necessary in connection
with the execution and delivery of this Agreement by such Selling
Shareholder, and the consummation by him of the transactions herein
contemplated (other than as required by the Securities Act, state
securities laws and the NASD).
(j) Any certificates signed by or on behalf of such
Selling Shareholder as such and delivered to the Representatives or to
counsel for the Representatives shall be deemed a representation and
warranty by such Selling Shareholder to each Underwriter as to the
matters covered thereby.
(k) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 with respect to the transactions
herein contemplated, such Selling Shareholder agrees to deliver to you
prior to or at the First Closing Date (as hereinafter defined) a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
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<PAGE> 12
(l) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or which might
constitute or be expected to constitute, stabilization or manipulation
of the price of the Common Stock.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company and the Selling
Shareholders agree, as provided in the introductory paragraph, to sell
to each of the Underwriters, and each of the Underwriters, severally
and not jointly, agrees to purchase at a purchase price of
$___________ per share, the number of Firm Shares set forth opposite
such Underwriter's name in Schedule II hereto, plus such additional
number of Firm Shares which such Underwriter may become obligated to
purchase pursuant to Section 9 hereof. Each of the Underwriters
agrees that the "Price to Public" set forth on the cover page of the
Final Prospectus will be $___________ per share.
(b) The Company also grants to the Underwriters an option
to purchase, solely for the purpose of covering over-allotments in the
sale of Firm Shares, all or any portion of the Option Shares at the
purchase price per share set forth above. The option granted hereby
may be exercised as to all or any part of the Option Shares at any
time (but only once) within 30 days after the date the Registration
Statement becomes effective. The Underwriters shall not be under any
obligation to purchase any Option Shares prior to the exercise of such
option. The option granted hereby may be exercised by the
Underwriters by the Representatives giving written notice to the
Company setting forth the number of Option Shares to be purchased and
the date and time for delivery of and payment for such Option Shares
and stating that the Option Shares referred to therein are to be used
for the purpose of covering over-allotments in connection with the
distribution and sale of the Firm Shares. If such notice is given
prior to the First Closing Date (as defined herein), the date set
forth therein for such delivery and payment shall not be earlier than
two full business days thereafter or the First Closing Date, whichever
occurs later. If such notice is given on or after the First Closing
Date, the date set forth therein for such delivery and payment shall
not be earlier than three full business days thereafter. In either
event, the date so set forth shall not be more than 15 full business
days after the date of such notice. The date and time set forth in
such notice is herein called the "Option Closing Date." Upon exercise
of the option, the Company shall become obligated to sell to the
Underwriters, and, subject to the terms and conditions herein set
forth, the Underwriters shall become obligated to purchase, for the
account of each Underwriter, from the Company, severally and not
jointly, the number of Option Shares specified in such notice. Option
Shares shall be purchased for the accounts of the Underwriters in
proportion to the number of Firm Shares set forth opposite such
Underwriter's name in respective purchase obligations of each
Underwriter shall be adjusted so that no Underwriter shall be
obligated to purchase fractional Option Shares.
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<PAGE> 13
(c) Certificates in definitive form for the Firm Shares
which each Underwriter has agreed to purchase hereunder shall be
delivered by or on behalf of the Company and the Selling Shareholders
to the Underwriters for the account of such Underwriter against
payment by such Underwriter or on its behalf of the purchase
price therefor by certified, official bank or New York Clearing House
funds check payable in next day funds to the order of the Company and
the custodian for the Selling Shareholders at the offices of J.C.
Bradford & Co. ("Bradford"), 330 Commerce Street, Nashville, Tennessee
37201, or at such other place as may be agreed upon by Bradford and
the Company, at 10:00 A.M., Nashville time, on the third full business
day after this Agreement becomes effective, or at such other time not
later than the seventh full business day thereafter as the
Representatives and the Company may determine, such time of delivery
against payment being herein referred to as the "First Closing Date."
The First Closing Date and the Option Closing Date are herein
individually referred to as the "Closing Date" and collectively
referred to as the "Closing Dates." Certificates in definitive form
for the Option Shares which each Underwriter shall have agreed to
purchase hereunder shall be similarly delivered by or on behalf of the
Company and the custodian for the Selling Shareholders on the Option
Closing Date. The certificates in definitive form for the Shares to
be delivered will be in good delivery form and in such denominations
and registered in such names as Bradford may request not less than 48
hours prior to the First Closing Date or the Option Closing Date, as
the case may be. Such certificates will be made available for
checking and packaging at a location in New York, New York as may be
designated by the Representatives, at least 24 hours prior to the
First Closing Date or the Option Closing Date, as the case may be. It
is understood that the Representatives may (but shall not be obligated
to) make payment on behalf of any Underwriter or Underwriters for the
Shares to be purchased by such Underwriter or Underwriters. No such
payment shall relieve such Underwriter or Underwriters from any of its
or their obligations hereunder.
4. Offering by the Underwriters. After the Registration
Statement becomes effective, the several Underwriters propose to offer for sale
to the public the Firm Shares and any Option Shares that may be sold at the
price and upon the terms set forth in the Final Prospectus.
5. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company shall comply with the provisions of and
make all requisite filings with the Commission pursuant to Rules 424,
430A, and 434 of the Rules and Regulations and to notify you promptly
(in writing, if requested) of all such filings. The Company shall
notify you promptly of any request by the Commission for any amendment
of or supplement to the Registration Statement, the Effective
Prospectus, or the Final Prospectus or for additional information; the
Company shall prepare and file with the Commission, promptly upon your
request, any amendments of or supplements to the Registration
Statement, the Effective Prospectus, or the Final Prospectus which, in
your opinion, based on the advice of your legal counsel, may be
necessary or advisable in
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<PAGE> 14
connection with the distribution of the Shares; and the Company
shall not file any amendment of or supplement to the Registration
Statement, the Effective Prospectus or the Final Prospectus which is
not approved by you after reasonable notice thereof. The Company
shall advise you promptly of the issuance by the Commission or any
jurisdiction or other regulatory body of any stop order or other order
suspending the effectiveness of the Registration Statement, suspending
or preventing the use of any Preliminary Prospectus, the Effective
Prospectus, or the Final Prospectus or suspending the qualification of
the Shares for offering or sale in any jurisdiction, or of the
institution of any proceedings for any such purpose; and the Company
shall use its best efforts to prevent the issuance of any stop order
or other such order and, should a stop order or other such order be
issued, to obtain as soon as possible the lifting thereof.
(b) The Company will take or cause to be taken, in
cooperation with the Representatives and counsel to the Underwriters,
all necessary action and furnish to whomever you direct such
information as may be reasonably required in qualifying the Shares for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters may designate and will continue such
qualifications in effect for as long as may be reasonably necessary to
complete the distribution of the Shares. The foregoing
notwithstanding, the Company shall not be required to qualify as a
foreign corporation or to take any action which would subject it to
general service of process in any jurisdiction where it is not
presently qualified or where it would be subject to taxation as a
foreign corporation.
(c) Within the time during which a Final Prospectus
relating to the Shares is required to be delivered under the
Securities Act, the Company shall comply with all requirements imposed
upon it by the Securities Act, as now and hereafter amended, and by
the Rules and Regulations, as from time to time in force, so far as is
necessary to permit the continuance of sales of or dealings in the
Shares as contemplated by the provisions hereof and the Final
Prospectus. If during such period any event occurs as a result of
which the Final Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances then existing, not misleading, or if during such
period it is necessary to amend the Registration Statement or
supplement the Final Prospectus to comply with the Securities Act, the
Company shall promptly notify you and shall amend the Registration
Statement or supplement the Final Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such
compliance.
(d) The Company will furnish without charge to the
Representatives and make available to the Underwriters copies of the
Registration Statement (four of which shall be signed and shall be
accompanied by all exhibits, including any that are incorporated by
reference, which have not previously been furnished), each Preliminary
Prospectus, the Effective Prospectus and the Final Prospectus, and all
amendments and supplements thereto, including any prospectus or
supplement prepared after the effective date of the Registration
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<PAGE> 15
Statement, in each case as soon as available and in such quantities as
the Underwriters may reasonably request.
(e) The Company will (i) deliver to you at such office or
offices as you may designate as many copies of the Preliminary
Prospectus and Final Prospectus as you may reasonably request, and
(ii) for a period of not more than nine months after the Registration
Statement becomes effective, send to the Underwriters as many
additional copies of the Final Prospectus and any supplement thereto
as you may reasonably request.
(f) The Company shall make generally available to its
security holders, in the manner contemplated by Rule 158(b) under the
Securities Act, as promptly as practicable and in any event no later
than 45 days after the end of its fiscal quarter in which the first
anniversary of the effective date of the Registration Statement
occurs, an earnings statement satisfying the provisions of Section
11(a) of the Securities Act covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement.
(g) The Company will apply the net proceeds from the sale
of the Shares as set forth under the caption "Use of Proceeds" in the
Final Prospectus.
(h) During a period of five years from the effective date
of the Registration Statement, the Company will furnish to the
Representatives copies of all reports and other communications
(financial or other) furnished by the Company to its shareholders and,
as soon as available, copies of any reports or financial statements
furnished or filed by the Company to or with the Commission or any
national securities exchange on which any class of securities of the
Company may be listed.
(i) The Company will, from time to time, after the
effective date of the Registration Statement file with the Commission
such reports as are required by the Securities Act, the Exchange Act,
and the Rules and Regulations, and shall also file with state
securities commissions in states where the Shares have been sold by
you (as you shall have advised us in writing) such reports as are
required to be filed by the securities acts and the regulations of
those states.
(j) Except pursuant to this Agreement or with the prior
written consent of the Representatives, for a period of 180 days from
the effective date of the Registration Statement, the Company will
not, and the Company has provided agreements executed by each of its
executive officers and directors and all other beneficial owners of
the Company's outstanding Common Stock providing that for a period of
180 days from the effective date of the Registration Statement, such
person or entity will not, directly or indirectly, offer for sale,
sell, grant any options (other than pursuant to existing employee
benefit plans and agreements, other existing compensation agreements,
and existing stock options), rights or warrants with respect to any
shares of Common Stock, securities convertible into Common
15
<PAGE> 16
Stock or any other capital stock of the Company, or otherwise dispose
of any shares of Common Stock or such other securities or capital
stock.
(k) The Company will not take, directly or indirectly,
any action designed to cause or result in, or which might constitute
or be expected to constitute, stabilization or manipulation of the
price of the Common Stock.
6. Expenses. The Company and each of the Selling Shareholders
agree with the Underwriters that (a) whether or not the transactions
contemplated by this Agreement are consummated or this Agreement becomes
effective or is terminated, the Company and the Selling Shareholders will pay
all fees and expenses incident to the performance of the obligations of the
Company and the Selling Shareholders hereunder, including, but not limited to,
(i) the Commission's registration fee, (ii) the expenses of printing (or
reproduction) and distributing the Registration Statement (including the
financial statements therein and all amendments and exhibits thereto), each
Preliminary Prospectus, the Effective Prospectus, the Final Prospectus, any
amendments or supplements thereto, and this Agreement and other underwriting
documents, including Underwriters' Questionnaires, Underwriters' Powers of
Attorney, Blue Sky Memoranda and Agreements Among Underwriters, (iii) fees and
expenses of accountants and counsel for the Company and the Selling
Shareholders, (iv) expenses of registration or qualification of the Shares
under state Blue Sky and securities laws, including the fees and disbursements
of counsel to the Underwriters in connection therewith, (v) filing fees paid or
incurred by the Underwriters and related fees and expenses of counsel to the
Underwriters in connection with filings with the NASD, (vi) expenses of
including the Shares for listing on The New York Stock Exchange, (vii) all
travel, lodging and reasonable living expenses incurred by the Company in
connection with marketing, dealer and other meetings attended by the Company
and the Underwriters in marketing the Shares, (viii) the costs and charges of
the Company's transfer agent and registrar and the cost of preparing the
certificates for the Shares, and (ix) all other costs and expenses incident to
the performance of their obligations hereunder not otherwise provided for in
this Section; and (b) all out-of-pocket expenses, including counsel fees,
disbursements and expenses, incurred by the Underwriters in connection with
investigating, preparing to market and marketing the Shares and proposing to
purchase and purchasing the Shares under this Agreement, will be borne and paid
by the Company and the Selling Shareholders if the sale of the Shares provided
for herein is not consummated for any reason. The provisions of this Section
shall not affect any agreement that the Company and the Selling Shareholders
may have for the sharing of such costs and expenses; provided, however, the
Underwriters may deem the Company to be the primary obligor with respect to all
costs, fees, and expenses to be paid hereunder by the Company and the Selling
Shareholders. Neither the Company nor the Selling Shareholders shall in any
event be liable to any of the Underwriters for the loss of anticipated profits
from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters to purchase and pay for the Firm Shares and
Option Shares, shall be subject, in their reasonable discretion, to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders herein as of the date hereof and as of the Closing Date as if made
on and as of
16
<PAGE> 17
the Closing Date, to the accuracy of the statements of the Company's officers
made pursuant to the provisions hereof, to the performance by the Company and
the Selling Shareholders of all of their covenants and agreements hereunder,
and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective not later than 5:30
P.M., Washington, D.C. time, on the day following the date of this
Agreement, or such later time and date as shall have been consented to
by the Representatives and all filings required by Rules 424, 430A,
and 434 of the Rules and Regulations shall have been made; no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have
been instituted or threatened or, to the knowledge of the Company or
the Underwriters, shall be contemplated by the Commission; any request
of the Commission for additional information (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall
have been complied with to your satisfaction; and the NASD, upon
review of the terms of the public offering of the Shares, shall not
have objected to such offering, such terms or the Underwriters'
participation in the same.
(b) No Underwriter shall have advised the Company that
the Registration Statement, Preliminary Prospectus, the Effective
Prospectus, or the Final Prospectus, or any amendment or any
supplement thereto, contains an untrue statement of fact which, in
your judgment, is material, or omits to state a fact which, in your
judgment, is material and is required to be stated therein or
necessary to make the statements therein not misleading and the
Company shall not have cured such untrue statement of fact or stated a
statement of fact required to be stated therein.
(c) The Representatives shall have received an opinion,
dated the Closing Date, from:
(i) Harwell Howard Hyne Gabbert & Manner, P.C.,
counsel for the Company and the Selling Shareholders, to the effect
that:
(A) The Company has been duly organized and
is validly existing in good standing as a corporation under
the laws of the State of Tennessee, with corporate power and
authority to own its properties and conduct its business as
now conducted.
(B) Each of the Company's subsidiaries that
are "significant" as such term is defined in Regulation S-X
promulgated by the Commission has been duly organized and is
validly existing under the laws of its jurisdiction of
incorporation or organization, as applicable, with the
corporate or partnership power and authority to own its
properties and conduct its business as now conducted. The
issued and outstanding shares of capital stock of the
Company's corporate subsidiaries have been duly and validly
authorized and issued, are fully paid and nonassessable, and
are
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<PAGE> 18
owned beneficially and of record by the Company in the amounts
set forth on Exhibit 1(f) hereto free and clear of liens,
claims, encumbrances, security interests, voting trusts
or other defects of title whatsoever. All interests in
partnership subsidiaries of the Company are owned beneficially
and of record in the percentages set forth on Exhibit 1(f)
hereto and, to such counsel's knowledge, are owned free and
clear of liens, claims, encumbrances, security interests, or
other defects of title whatsoever.
(C) As of the dates specified therein, the
Company had authorized and issued capital stock as set forth
under the caption "Capitalization" in the Final Prospectus.
All of the outstanding shares of the capital stock of the
Company have been duly authorized and are validly issued,
fully paid and nonassessable, and the Shares have been
duly authorized, and upon issuance thereof and payment
therefor as provided herein, will be validly issued, fully
paid and nonassessable; none of the issued shares have been
issued in violation of or subject to any preemptive rights
provided for by law or by the Company's Amended and Restated
Charter. There are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the
transfer of, the Shares pursuant to the Company's Amended and
Restated Charter, bylaws or other governing documents or, to
such counsel's knowledge, any agreement or other instrument to
which the Company is a party or by which it may be bound
except as described in the Effective Prospectus and Final
Prospectus and except for restrictions on transfer imposed
under applicable securities laws. To such counsel's
knowledge, neither the filing of the Registration Statement
nor the offer or sale of the Shares as contemplated by this
Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or any other
securities of the Company. The Underwriters will receive good
and marketable title to the Shares to be issued and delivered
by the Company pursuant to this Agreement, free and clear of
all liens, encumbrances, claims, security interests,
restrictions, shareholders agreements and voting trusts
whatsoever. The capital stock of the Company and the Shares
conform to the description thereof contained in the Final
Prospectus.
(D) No consent, approval, authorization, or
order of any court or governmental agency or body or, to such
counsel's knowledge, any third party is required for the
performance of this Agreement by the Company or the
consummation by the Company of the transactions contemplated
hereby, except such as have been obtained under the Securities
Act and such as may be required by the NASD and under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the several Underwriters.
The performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby will not conflict with or result in a breach or
violation by the Company of any of the terms or provisions of,
or constitute a default by the Company under, any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument known to such counsel to which the
Company is a party or to which the Company or its properties
is subject and which is material to
18
<PAGE> 19
the Company, the Amended and Restated Charter or bylaws
of the Company, any statute, or any judgment, decree, order,
rule or regulation known to such counsel of any court or
governmental agency or body applicable to the Company or its
properties.
(E) The Company has full legal right, power
and authority to enter into this Agreement and to issue, sell
and deliver the Shares to be sold by it to the Underwriters as
provided herein, and this Agreement has been duly authorized,
executed, and delivered by the Company and constitutes the
valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms,
except as enforceability may be limited by general equitable
principles, bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, fraudulent conveyance or
other laws affecting creditors' rights generally, and except
as rights to indemnify may be limited by federal or state
securities laws or the public policy underlying such laws.
(F) The Registration Statement and all
post-effective amendments thereto have become effective under
the Securities Act, and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are threatened, pending,
or contemplated by the Commission. All filings required by
Rules 424, 430A, and 434 of the Rules and Regulations have
been made; the Registration Statement, the Effective
Prospectus, and the Final Prospectus, and any amendments or
supplements thereto, and the documents incorporated by
reference therein (except for the financial statements and
schedules included or incorporated by reference therein as to
which such counsel need express no opinion), as of their
respective effective or issue dates, complied as to form in
all material respects with the requirements of the Securities
Act and the Rules and Regulations; the descriptions in the
Registration Statement, the Effective Prospectus and the Final
Prospectus of statutes, regulations, legal and governmental
proceedings, and contracts and other documents are accurate in
all material respects and present fairly the information
required to be stated; and there are no pending or (to the
best knowledge of such counsel) threatened legal or
governmental proceedings, statutes or regulations required to
be described in the Final Prospectus which are not described
as required nor of any contracts or documents known to such
counsel of a character required to be described in the
Registration Statement or the Final Prospectus or to be filed
as exhibits to the Registration Statement which are not
described and filed as required.
19
<PAGE> 20
(G) The Company is not, and will not be
as a result of the consummation of the transactions
contemplated by this Agreement, an "investment company" within
the meaning of the Investment Company Act of 1940.
(H) This Agreement and the Custody
Agreement and Power of Attorney have been duly executed
and delivered by or on behalf of each of the Selling
Shareholders and constitute valid and binding agreements of
such Selling Shareholders in accordance with their terms,
except as enforceability may be limited by applicable
equitable principles or by bankruptcy, insolvency, moratorium,
reorganization or similar laws from time to time in effect
affecting the enforcement of creditors' rights, and except as
rights to indemnify may be limited by federal or state
securities laws or the public policy underlying such laws.
(I) The sale of the Shares to be sold by
each Selling Shareholder hereunder and the compliance
by such Selling Shareholder with all of the provisions of
this Agreement, the Custody Agreement and the Power of
Attorney and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a
breach or violation of any terms or provisions of, or
constitute a default under any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
known to such counsel to which such Selling Shareholder is a
party or by which such Selling Shareholder is bound or to
which any of the property or assets of such Selling
Shareholder is subject, or any statute, order, rule or
regulation of any court or governmental agency or body known
to such counsel to be applicable to such Selling Shareholder
or the property of such Selling Shareholder.
(J) No consent, approval, authorization or
order of any court or governmental agency or body is required
for the consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by each
Selling Shareholder hereunder, except which have been duly
obtained and in full force and effect, such as have been
obtained under the Securities Act and such as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of such Shares by the Underwriters,
as to which such counsel need express no opinion.
(K) Each of the Selling Shareholders has
the full right, power and authority to sell, transfer
and deliver such Shares pursuant to this Agreement. By
delivery of a certificate or certificates therefor, the
Selling Shareholders will transfer to the Underwriters valid
and marketable title to such shares, free and clear of any
pledge, lien, security interest, charge, claim, equity, or
encumbrance of any kind.
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<PAGE> 21
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company,
representatives of the Underwriters and their counsel at which the contents of
the Registration Statement, the Effective Prospectus and the Final Prospectus
and related matters were discussed and, although such counsel is not passing on
and does not assume any responsibility for the accuracy, completeness or
fairness contained in the Registration Statement, the Effective Prospectus or
the Final Prospectus, that nothing has come to the attention of such counsel
which leads them to believe that the Registration Statement, the Effective
Prospectus and the Final Prospectus or any amendment or supplement thereto, or
any document incorporated by reference therein, contains an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (except that such
counsel need express no view as to financial statements, schedules and other
financial information included therein). In rendering such opinion, counsel
may rely as to matters of fact, to the extent counsel deems proper, on
certificates of responsible officers of the Company and public officials.
(ii) Henry J. Abbott, Vice President, General
Counsel and Secretary of the Company, to the effect that:
(A) The Company is duly qualified to do business as
a foreign corporation in good standing in all jurisdictions
where the failure to so qualify would have a material adverse
effect upon the Company and its subsidiaries, taken as a
whole. The Company holds all licenses, certificates, permits,
franchises and authorizations from governmental authorities
that are material to the conduct of its business in all
locations in which such business is currently being conducted.
(B) Each of the Company's subsidiaries is
duly qualified to do business in all jurisdictions where the
failure to so qualify would have a material adverse effect
upon the Company and its subsidiaries, taken as a whole. Each
subsidiary holds all licenses, certificates, permits,
franchises and authorizations from governmental authorities
that are material to the conduct of its business in all
locations in which such business is currently conducted.
(C) Except as described in the Final
Prospectus, there is not pending, or to the best knowledge of
such counsel threatened, any action, suit, proceeding, inquiry
or investigation, to which the Company is a party, or to which
the property of the Company is subject, before or brought by
any court or governmental agency or body, which, if determined
adversely to the Company, could result in any material adverse
change in the business, financial position, net worth or
results of operations, or could materially adversely affect
the properties or assets, of the Company.
21
<PAGE> 22
(D) To the best knowledge of such counsel, no
default exists, and no event has occurred which with notice or
after the lapse of time to cure or both, would constitute a
default, in the due performance and observance of any term,
covenant or condition of any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument
to which the Company is a party or to which it or its
properties is subject and which is material to the Company, or
of the Amended and Restated Charter or bylaws of the Company.
(E) To the best knowledge of such counsel,
the Company is not in violation of any law, ordinance,
administrative or governmental rule or regulation applicable
to the Company and material to the Company or any decree of
any court or governmental agency or body having jurisdiction
over the Company.
(F) All offers and sales of the Company's
securities prior to the date hereof were at all relevant times
duly registered or exempt from the registration requirements
of the Securities Act and were duly registered or the subject
of an exemption from the registration requirements of
applicable state securities or Blue Sky laws.
(d) The Underwriters shall have received an opinion or
opinions, dated the Closing Date, of Bass, Berry & Sims, counsel for
the Underwriters, with respect to the Registration
Statement and the Final Prospectus, and such other related matters as
the Underwriters may require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(e) The Representatives shall have received from KPMG
Peat Marwick LLP, a letter dated the date hereof and, at the Closing
Date, a second letter dated the Closing Date, in form and substance
satisfactory to the Representatives, stating that they are independent
public accountants with respect to the Company within the meaning of
the Securities Act and the applicable Rules and Regulations, and to
the effect that:
(i) In their opinion, the financial
statements audited by them and incorporated by reference in
the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the published Rules and Regulations and are
presented in accordance with generally accepted accounting
principles;
(ii) Based upon a review in accordance with
standards established by the American Institute of Certified
Public Accountants (including those described in Statement on
Auditing Standards No. 71) of the Company's interim financial
statements for the fiscal quarters ended December 31, 1996 and
1995 that are incorporated by reference in the Registration
Statement, nothing has come to their
22
<PAGE> 23
attention that causes them to believe that the unaudited
interim financial statements of the Company do not comply as
to form in all material respects with the applicable
accounting requirements of the Securities Act and the Rules
and Regulations, or are not presented in accordance with
generally accepted accounting principles on a basis
substantially consistent with that of the audited financial
statements incorporated by reference in the Registration
Statement;
(iii) The selected financial information
included in the Effective Prospectus and the Final Prospectus
under the captions "PROSPECTUS SUMMARY" and "SELECTED
CONSOLIDATED FINANCIAL AND OTHER DATA" for each of the fiscal
years ended September 30, 1994, 1995, and 1996 agrees with
the corresponding amounts in the audited consolidated
financial statements of the Company incorporated by reference
in the Registration Statement or previously reported on by
them;
(iv) On the basis of a reading of the latest
available interim consolidated financial statements
(unaudited) of the Company, a reading of the minute books of
the Company, inquiries of officials of the Company responsible
for financial and accounting matters and other specified
procedures, all of which have been agreed to by the
Representatives, nothing came to their attention that caused
them to believe that:
(A) any unaudited financial statement
data included or incorporated by reference in
the Effective Prospectus and Final Prospectus does
not agree with the corresponding items in the
unaudited financial statements from which such data
was derived and such unaudited data was not
determined on a basis substantially consistent with
the basis for the corresponding amounts in the
audited financial statements incorporated by
reference in the Effective Prospectus and the Final
Prospectus;
(B) At a specified date not more than
five days prior to the date of delivery of such
respective letter, there was any change in the
capital stock, decline in shareholders' equity or
increase in long-term debt and capital lease
obligations of the Company, in each case as compared
with amounts shown in the latest consolidated balance
sheet incorporated by reference in the Final
Prospectus, except in each case for changes,
decreases, or increases which the Final Prospectus
discloses have occurred or may occur or which are
described in such letters; and
(C) For the period from the closing
date of the latest consolidated statements of
earnings incorporated by reference in the Effective
Prospectus and the Final Prospectus to a specified
date not more than five days prior to the date of
delivery of such respective letter, there were any
23
<PAGE> 24
decreases in total revenues or net earnings in each
case as compared with the corresponding period of the
preceding year, except in each case for decreases
which the Final Prospectus discloses have occurred or
may occur or which are described in such letter.
(v) They have reviewed the unaudited pro
forma financial statements included or incorporated by
reference in the Effective Prospectus and Final Prospectus and
nothing has come to their attention that causes them to
believe that such unaudited pro forma financial statements do
not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of
Registration S-X or that any pro forma adjustments have not
been properly applied to the historical amounts.
(vi) They have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages, and financial information specified by
you which are derived from the general accounting records of
the Company, which appear in the Effective Prospectus and the
Final Prospectus, and have compared and agreed such amounts,
percentages, and financial information with the accounting
records of the Company or to analyses and schedules prepared
by the Company from its detailed accounting records.
In the event that the letters to be delivered referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that the Underwriters shall have determined,
after discussions with officers of the Company responsible for financial and
accounting matters and with KPMG Peat Marwick LLP, that such changes, decreases
or increases as are set forth in such letters do not reflecta material adverse
change in the shareholders' equity or long-term debt of the Company as compared
with the amounts shown in the latest consolidated balance sheets of the Company
included in the Final Prospectus, or a material adverse change in total net
revenues or net earnings of the Company, in each case as compared with the
corresponding period of the prior year.
(f) There shall have been furnished to the Representatives a
certificate, dated the Closing Date and addressed to you, signed by the Chief
Executive Officer and by the Chief Financial Officer of the Company to the
effect that:
(i) the representations and warranties of the
Company in Section 1 of this Agreement are true and correct,
as if made at and as of the Closing Date, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the
effectiveness of the Registration Statement has been issued,
and no proceedings for that purpose have been initiated or are
pending, or to their knowledge, threatened under the
Securities Act;
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<PAGE> 25
(iii) they have carefully examined the
Registration Statement, the Effective Prospectus and the Final
Prospectus, and any amendments or supplements thereto, and
such documents do not include any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading; and
(iv) since the effective date of the
Registration Statement, there has occurred no event (other
than with respect to the information contained under the
caption "Underwriting") required to be set forth in an
amendment or supplement to the Registration Statement, the
Effective Prospectus or the Final Prospectus which has not
been so set forth.
(g) The representations and warranties of each Selling
Shareholder in Section 2 of this Agreement shall be true and correct
as of the Closing Date and such Selling Shareholders shall deliver to
the Representatives a certificate to that effect, dated the Closing
Date, signed by such Selling Shareholder or his or its duly appointed
attorney-in-fact.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Final
Prospectus, and except as stated therein, the Company has not
sustained any material loss or interference with its business or
properties from fire, flood, hurricane, earthquake, accident or other
calamity, whether or not covered by insurance, or from any labor
dispute or any court or governmental action, order or decree, or
become a party to or the subject of any litigation which is material
to the Company, nor shall there have been any material adverse change,
or any development involving a prospective material adverse change, in
the business, properties, key personnel, capitalization, net worth,
results of operations or condition (financial or other) of the
Company, which loss, interference, litigation or change, in your
judgment shall render it unadvisable to commence or continue the
offering of the Shares at the offering price to the public set forth
on the cover page of the Prospectus or to proceed with the delivery of
the Shares.
(i) The Shares have been approved for listing on The New
York Stock Exchange, upon official notice of issuance.
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if they
are reasonably satisfactory to the Representatives and their counsel. The
Company shall furnish to the Representatives such conformed copies of such
opinions, certificates, letters and documents in such quantities as the
Representatives shall reasonably request.
The respective obligations of the Underwriters to purchase and pay for
the Option Shares shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Shares,
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<PAGE> 26
except that all references to the "Closing Date" shall be deemed to refer to
the Option Closing Date, if it shall be a date other than the Closing Date.
8. Indemnification and Contribution.
(a) The Company and each of the Selling Shareholders,
severally and not jointly, agree to indemnify and hold harmless each
Underwriter, and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based in whole or in
part upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or Final Prospectus, or any
amendment or supplement thereto, or in any Blue Sky application or
other written information furnished by the Company filed in any state
or other jurisdiction in order to qualify any or all of the Shares
under the securities laws thereof (a "Blue Sky Application") or arise
out of or are based upon the omission or alleged omission to state in
the Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus or any amendment or supplement thereto
or any Blue Sky Application a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter and each such controlling person
for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company and the Selling Shareholders will not be liable in any such
case to the extent that any such loss, claim, damage, or liability
arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, the Preliminary Prospectus, the Effective Prospectus or
Final Prospectus or such amendment or such supplement or any Blue Sky
Application in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically
for use therein (it being understood that the only information so
provided by the Underwriters is the information included in the last
paragraph on the cover page and in the first, third and fourth
paragraphs under the caption "Underwriting" in any Preliminary
Prospectus and the Final Prospectus and the Effective Prospectus).
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless each of the Selling Shareholders and the
Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act against any losses,
claims, damages or liabilities to which the Selling Shareholders or
Company or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the
26
<PAGE> 27
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement
thereto, or any Blue Sky Application, or arise out of or are based
upon the omission or the alleged omission to state in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus or
Final Prospectus or any amendment or supplement thereto or any Blue
Sky Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter specifically for use therein (it being
understood that the only information so provided is the information
included in the last paragraph on the cover page and in the first,
third and fourth paragraphs under the caption "Underwriting" in any
Preliminary Prospectus and in the Effective Prospectus and the Final
Prospectus);
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action,
including governmental proceedings, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party
under this Section 8 notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 8. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; and after notice from the indemnifying party
to such indemnified party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation
except that the indemnified party shall have the right to employ
separate counsel if, in its reasonable judgment, it is advisable for
the indemnified party and any other Underwriter to be represented by
separate counsel, and in that event the fees and expenses of separate
counsel shall be paid by the indemnifying party.
Neither the Company nor any of the Selling Shareholders will,
without prior written consent of each Representative, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding (or related cause of
action or portion thereof) in respect of which indemnification may be
sought hereunder (whether or not such Underwriter is a party to such
claim, action, suit or proceeding), unless such settlement, compromise
or consent includes an unconditional release of such Underwriter from
all liability arising out of such claim, action, suit or proceeding
(or related cause of action or portion thereof).
27
<PAGE> 28
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement
provided for in the preceding part of this Section 8 is for any reason
held to be unavailable to the Underwriters, the Company, or the
Selling Shareholders or is insufficient to hold harmless an
indemnified party, then the Company and the Selling Shareholders shall
contribute to the damages paid by the Underwriters, and the
Underwriters shall contribute to the damages paid by the Company and
the Selling Shareholders provided, however, that 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. In
determining the amount of contribution to which the respective parties
are entitled, there shall be considered the relative benefits received
by each party from the offering of the Shares (taking into account the
portion of the proceeds of the offering realized by each), the
parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity
to correct and prevent any statement or omission, and any other
equitable considerations appropriate under the circumstances. The
Company, the Selling Shareholders and the Underwriters agree that it
would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose). No
Underwriter or person controlling such Underwriter shall be obligated
to make contribution hereunder which in the aggregate exceeds the
underwriting discount applicable to the Shares purchased by such
Underwriter under this Agreement, less the aggregate amount of any
damages which such Underwriter and its controlling persons have
otherwise been required to pay in respect of the same or any similar
claim. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and
not joint. For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the
Securities Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if
any, who controls the Company within the meaning of Section 15 of the
Securities Act, shall have the same rights to contribution as the
Company.
9. Default of Underwriters. If any Underwriter defaults in its
obligation to purchase Shares hereunder and if the total number of Shares which
such defaulting Underwriter agreed but failed to purchase is ten percent or
less of the total number of Shares to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each
non-defaulting Underwriter in Schedule II hereto bears to the total number of
Shares set forth opposite the names of all the non- defaulting Underwriters),
the Shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter so defaults and the total number of Shares
with respect to which such default or defaults occur is more than ten percent
of the total number of Shares to be sold hereunder, and arrangements
satisfactory to the other Underwriters and the Company for the purchase of such
Shares by other persons (who may include the non-defaulting Underwriters) are
not made within 36 hours after such default, this Agreement, insofar as it
relates to the sale of the Shares, will terminate without liability on the part
of the non-defaulting Underwriters or the Company except for (i) the
28
<PAGE> 29
provisions of Section 8 hereof, and (ii) the expenses to be paid or reimbursed
by the Company pursuant to Section 6. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. Default by the Selling Shareholders. If the Selling
Shareholders shall fail to sell and deliver the number of Firm Shares or Option
Shares, as the case may be, that the Selling Shareholders are obligated to
sell, the Representatives may, at their option, by notice to the Company,
either (a) require the Company to sell and deliver such number of shares of
Common Stock as to which the Selling Shareholders have defaulted, or (b) elect
to purchase the Firm Shares and the Option Shares that the Company and the
non-defaulting Selling Shareholders have agreed to sell pursuant to this
Agreement. In the event of a default under this Section that does not result
in the termination of this Agreement, either the Representatives or the Company
shall have the right to postpone the First Closing Date or Option Closing Date
for a period not exceeding seven days in order to effect any required changes
in the Registration Statement or Prospectus or in any other documents or
arrangements. No action taken pursuant to this Section shall relieve the
Company or the Selling Shareholder so defaulting from liability, if any, in
respect of such default.
11. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Selling
Shareholders and the Company, its officers and the Underwriters set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, any Underwriter or any controlling person, and (ii) delivery of and
payment for the Shares. The respective agreements, covenants, indemnities
and other statements set forth in Section 6 and Section 8 hereof shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement.
12. Effective Date. This Agreement shall become effective at
whichever of the following times shall first occur: (i) at 11:30 A.M.,
Washington, D.C. time, on the next full business day following the date on
which the Registration Statement becomes effective or (ii) at such time after
the Registration Statement has become effective as the Representatives shall
release the Firm Shares for sale to the public; provided, however, that the
provisions of Sections 6, 8, 10 and 11 hereof shall at all times be effective.
For purposes of this Section 12, the Firm Shares shall be deemed to have been
so released upon the release by the Representatives for publication, at any
time after the Registration Statement has become effective, of any newspaper
advertisement relating to the Firm Shares or upon the release by the
Representatives of telegrams offering the Firm Shares for sale to securities
dealers, whichever may occur first.
29
<PAGE> 30
13. Termination.
(a) The Company's obligations under this Agreement may be
terminated by the Company by notice to the Representatives at any time
before it becomes effective in accordance with Section 12 hereof.
(b) This Agreement may be terminated by the
Representatives by notice to the Company (i) at any time before it
becomes effective in accordance with Section 12 hereof; (ii) in the
event that at or prior to the First Closing Date the Company or any
Selling Shareholder shall have failed, refused, or been unable to
perform any agreement on the part of the Company or such Selling
Shareholder to be performed hereunder or any other condition to the
obligations of the Underwriters hereunder is not fulfilled; (iii) if
at or prior to the Closing Date trading in securities on the New York
Stock Exchange, the American Stock Exchange, or the over- the-counter
market shall have been suspended or materially limited or minimum or
maximum prices shall have been established on either of such Exchanges
or such market, or a banking moratorium shall have been declared by
Federal or state authorities; (iv) if at or prior to the Closing Date
trading in securities of the Company shall have been suspended; or (v)
if there shall have been such a material change in general economic,
political or financial conditions or if the effect of international
conditions on the financial markets in the United States shall be such
as, in your reasonable judgment, makes it inadvisable to commence or
continue the offering of the Shares at the offering price to the
public set forth on the cover page of the Prospectus or to proceed
with the delivery of the Shares.
(c) Termination of this Agreement pursuant to this
Section 13 shall be without liability of any party to any other party
other than as provided in Sections 6 and 8 hereof.
14. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be mailed or delivered or
telegraphed and confirmed in writing to the Representatives in care of J.C.
Bradford & Co., J.C. Bradford Financial Center, 330 Commerce Street, Nashville,
Tennessee 37201, Attention: Robert S. Doolittle, or if sent to the Company or
the Selling Shareholders shall be mailed, delivered or telegraphed and
confirmed in writing to the Company at 2401 21st Avenue South, Suite 200,
Nashville, Tennessee 37212, Attention: Monroe J. Carell, Jr.
15. Miscellaneous. This Agreement shall inure to the benefit of
and be binding upon the several Underwriters, the Company, the Selling
Shareholders and their respective successors and legal representatives. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Company,
the Selling Shareholders and the several Underwriters and for the benefit of no
other person except that (i) the representations and warranties of the Company
and the Selling Shareholders contained in this Agreement shall also be for the
benefit of
30
<PAGE> 31
any person or persons who control any Underwriter within the meaning of Section
15 of the Securities Act, and (ii) the indemnities by the Underwriters shall
also be for the benefit of the directors of the Company, officers of the
Company who have signed the Registration Statement and any person or persons
who control the Company within the meaning of Section 15 of the Securities Act.
No purchaser of Shares from any Underwriter will be deemed a successor because
of such purchase. The validity and interpretation of this Agreement shall be
governed by the laws of the State of Tennessee. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. You hereby
represent and warrant to the Company and the Selling Shareholders that you have
authority to act hereunder on behalf of the several Underwriters, and any
action hereunder taken by you will be binding upon all the Underwriters.
31
<PAGE> 32
If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between the Company, each of the Selling Shareholders and each of the several
Underwriters.
Very truly yours,
CENTRAL PARKING CORPORATION
By:
---------------------------------------
Title:
---------------------------------
SELLING SHAREHOLDERS
By:
---------------------------------------
Attorney-in-Fact for each of the Selling
Shareholders listed in Schedule I hereto
Confirmed and accepted as of the
date first above written.
J.C. BRADFORD & CO., LLC
WILLIAM BLAIR & COMPANY, LLC
EQUITABLE SECURITIES CORPORATION
For themselves and as Representatives
of the several Underwriters
J.C. BRADFORD & CO., LLC
By:
----------------------------------
Title:
----------------------------
WILLIAM BLAIR & COMPANY, LLC
By:
----------------------------------
Title:
----------------------------
EQUITABLE SECURITIES CORPORATION
By:
----------------------------------
Title:
----------------------------
32
<PAGE> 33
SCHEDULE I
SELLING SHAREHOLDERS
<TABLE>
<CAPTION>
Number of Firm
Name Shares to be Sold
- ------------------------------------------------------------------------------ -------------------------------------
<S> <C>
Monroe J. Carell, Jr.
The Carell Children's Trust
Monroe Carell, Jr. 1994 Grantor Retained Annuity Trust
Monroe Carell, Jr. Foundation
Kathryn Carell Brown Foundation
Edith Carell Johnson Foundation
Julia Carell Stadler Foundation
Tennessee Botanical Gardens & Fine Arts, Inc.
-------------------------------------
TOTAL 800,000
=====================================
</TABLE>
33
<PAGE> 34
SCHEDULE II
UNDERWRITERS
<TABLE>
<CAPTION>
Number of Firm
Underwriter Shares to Be Purchased
- ---------------------------------------------------------------------- -----------------------------
<S> <C>
J.C. Bradford & Co., LLC . . . . . . . . . . . . . . . . . . . . . .
William Blair & Company, LLC . . . . . . . . . . . . . . . . . . . .
Equitable Securities Corporation . . . . . . . . . . . . . . . . . .
-----------------------------
4,100,000
=============================
</TABLE>
34
<PAGE> 1
EXHIBIT 4.1
AMENDED AND RESTATED
CHARTER
OF
CENTRAL PARKING CORPORATION
Central Parking Corporation, a Tennessee corporation, whose charter was
originally filed with the Tennessee Secretary of State on October 10, 1978 and
subsequently recorded in the office of the Davidson County Register of Deeds on
October 16, 1978, at Book 5351 Pages 298-301, and amended October 30, 1987,
hereby amends and restates its charter pursuant to action duly adopted by its
Board of Directors and its stockholders on August 10, 1995, as amended on
February 28, 1997.
I.
The name of the Corporation (hereinafter called the "Corporation") is
Central Parking Corporation.
II.
The Corporation's duration is perpetual.
III.
The address, including street, number, city, and county, of the
registered office of the Corporation in the State of Tennessee is: 2401 21st
Avenue South, Suite 200, Nashville, Davidson County, Tennessee 37212; and the
name of the registered agent of the Corporation in the State of Tennessee at
such address is Monroe J. Carell, Jr.
IV.
The name and address of the incorporator of the corporation is Monroe
J. Carell, Jr., 2401 21st Avenue South, Suite 200, Nashville, Tennessee 37212.
V.
The address and county of the principal office of the corporation shall
be 2401 21st Avenue South, Suite 200, Nashville, Davidson County, Tennessee
37212.
VI.
The Corporation is for profit.
<PAGE> 2
VII.
The nature of the business or purposes of the Corporation is to engage
in any lawful act or activity for which corporations may be organized under the
Tennessee Business Corporation Act.
VIII.
1. The maximum number of shares of stock which the Corporation shall
have the authority to issue is fifty million (50,000,000) shares of Common
Stock, having a par value of $0.01 per share, which shares shall not be subject
to any preemptive rights, and one million (1,000,000) shares of preferred stock
having a par value of $0.01 per share.
2. Pursuant to the Tennessee Business Corporation Act, a statement of
the designations, powers, preferences and rights, and the qualifications and
restrictions thereof, in respect of each class of capital stock is as follows:
A. PREFERRED STOCK
The Board of Directors is hereby expressly authorized at any time, and
from time to time, to provide for the issuance of shares of preferred stock in
one or more series, with such voting powers, full or limited, or no voting
powers, and with such designations, preferences and relative, participating,
optional or other rights, and qualifications or restrictions thereof, as shall
be stated and expressed in the resolution or resolutions providing for the issue
thereof adopted by a majority of the Board of Directors then in office and the
certificate of designations filed under the Tennessee Business Corporation Act
setting forth such resolution or resolutions, including (without limiting the
generality thereof) the following as to each such series:
(i) the designation of such series;
(ii) the dividends, if any, payable with respect to such series,
the rates or basis for determining such dividends, any
conditions and dates upon which such dividends shall be
payable, the preferences, if any, of such dividends over, or
the relation of such dividends to, the dividends payable on
the Common Stock or any other series of preferred stock,
whether such dividends shall be noncumulative or cumulative,
and, if cumulative, the date or dates from which such
dividends shall be cumulative;
(iii) whether shares of such series shall be redeemable at the
option of the Board of Directors or the holder, or both, upon
the happening of a specified event
2
<PAGE> 3
and, if redeemable, whether for cash, property or rights,
including securities of the Corporation, the time, prices or
rates and any adjustment and other terms and conditions of
such redemption;
(iv) the terms and amount of any sinking, retirement or purchase
fund provided for the purchase or redemption of shares of such
series;
(v) whether shares of such series shall be convertible into or
exchangeable for shares of Common Stock or any other series of
preferred stock, at the option of the Corporation or of the
holder, or both, or upon the happening of a specified event
and, if provision be made for such conversion or exchange, the
terms, prices, rates, adjustments and any other terms and
conditions thereof;
(vi) the extent, if any, to which the holders of shares of such
series shall be entitled to vote with respect to the election
of directors or otherwise, including, without limitation, the
extent, if any, to which such holders shall be entitled,
voting as a series or as a part of a class, to elect one or
more directors upon the happening of a specified event or
otherwise;
(vii) the restrictions, if any, on the issue or reissue of shares of
such series or any other series;
(viii) the extent, if any, to which the holders of shares of such
series shall be entitled to preemptive rights; and
(ix) the rights of the holders of shares of such series upon the
liquidation of the Corporation or any distribution of its
assets.
B. COMMON STOCK
(i) Dividends and Distributions. No payment of dividends or
distributions shall be made to the holders of shares of Common
Stock unless and until the holders of shares of preferred
stock receive any preferential amounts to which they are
entitled under this ARTICLE VIII or in the resolution or
resolutions providing for the issue of shares of preferred
stock. Subject to the limitation set forth in the preceding
sentence of this Paragraph (i) and except as otherwise
provided by this Charter or in the resolution or resolutions
providing for the issue of shares of preferred stock, the
holders of shares of Common Stock shall be entitled to receive
such dividends and
3
<PAGE> 4
distributions as may be declared upon such shares of Common
Stock, from time to time by a resolution or resolutions
adopted by the Board of Directors.
(ii) Voting Rights. All holders of Common Stock shall be entitled
to notice of any stockholders' meeting. Subject to the
provisions of any applicable law and except as otherwise
provided in this Charter or by the resolution or resolutions
providing for the issue of shares of preferred stock, all
voting rights shall be vested solely in the Common Stock. The
holders of shares of Common Stock shall be entitled to vote
upon the election of directors and upon any other matter
submitted to the stockholders for a vote. Each share of Common
Stock issued and outstanding shall be entitled to one
noncumulative vote.
(iii) Liquidation, Dissolution or Winding Up. Except as otherwise
provided in this Charter and subject to the rights of holders,
if any, of preferred stock to receive preferential liquidation
distributions to which they are entitled under this ARTICLE
VIII or under the resolution or resolutions providing for the
issue of shares of preferred stock, in the event of any
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, after payment or provision
for payment of the debts and liabilities of the Corporation,
all assets of the Corporation shall be shared pro rata among
the holders of the Common Stock.
3. Except as otherwise provided in this Charter or by applicable law,
the Corporation's capital stock, regardless of class, may be issued for such
consideration and for such corporate purposes as the Board of Directors may from
time to time determine by a resolution or resolutions adopted by a majority of
the Board of Directors then in office.
4. This Article VIII effects a cancellation of all existing classes and
series of stock other than voting common stock. Certificates representing shares
of such cancelled classes or series shall hereafter be deemed to represent the
number of shares of common stock into which such cancelled shares are converted
pursuant to the Plan of Recapitalization of the Corporation adopted by the
Corporation's stockholders on September 29, 1995.
IX.
No stockholder shall have any preemptive rights to subscribe for or
purchase any shares or other securities issued by the Corporation.
4
<PAGE> 5
X.
1. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors.
2. The Board of Directors shall consist of not less than three nor more
than fifteen (15) persons, the exact numbers to be fixed from time to time by
the Board of Directors pursuant to a resolution adopted by a majority of
directors then in office; provided, however, that such maximum number may be
increased from time to time to reflect the rights of holders of preferred stock
to elect directors in accordance with the terms of this Charter or of the
resolution or resolutions adopted by a majority of the Board of Directors then
in office providing for the issue of shares of preferred stock.
3. One or more directors or the entire Board of Directors of the
Corporation may be removed at any time for cause by the affirmative vote of the
holders of a majority of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (considered
for this purpose as one class).
4. Whenever the Corporation shall be authorized to issue only one class
of stock, each outstanding share shall entitle the holder thereof to notice of,
and the right to vote at, any meeting of stockholders. Whenever the Corporation
shall be authorized to issue more than one class of stock, no outstanding share
of any class of stock which is denied voting power under the provisions of this
Charter shall entitle the holder thereof to the right to vote at any meeting of
stockholders except as otherwise provided by applicable law; provided, that no
share of any such class which is otherwise denied voting power shall entitle the
holder thereof to vote upon the increase or decrease in the number of authorized
shares of said class.
XI.
To the fullest extent permitted by the Tennessee Business Corporation
Act as the same may be amended from time to time, a director, officer or
incorporator of the corporation shall not be liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty in such capacity.
If the Tennessee Business Corporation Act is amended, after approval by the
stockholders of this provision, to authorize corporate action further
eliminating or limiting the personal liability of a director, officer or
incorporator then the liability of a director, officer or incorporator of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Tennessee Business Corporation Act, as so amended from time to time. Any
repeal or modification of this Section XI by the stockholders of the Corporation
shall not adversely affect any right or protection of a
5
<PAGE> 6
director, officer or incorporator of the corporation existing at the time of
such repeal or modification or with respect to events occurring prior to such
time.
Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative and whether formal or informal
(hereafter a "proceeding"), by reason of the fact that he or she is or was a
director, officer or incorporator of the Corporation or is or was serving at the
request of the Corporation as a director, officer or incorporator of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (hereinafter an
"Indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer or incorporator or in any other
capacity while serving as a director, officer or incorporator, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Tennessee Business Corporation Act, as the same may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than such law
permitted the Corporation to provide prior to such amendment), against all
expense, liability and loss (including but not limited to counsel fees,
judgments, fines, ERISA, excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such Indemnitee in connection
therewith and such indemnification shall continue as to an Indemnitee who has
ceased to be a director, officer or incorporator and shall inure to the benefit
of the Indemnitee's heirs, executors and administrators. The right to
indemnification conferred in this Section XI shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in any
such proceeding in advance of its final disposition (hereinafter an "advancement
of expenses"); provided, however, that an advancement of expenses incurred by an
Indemnitee shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such Indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such Indemnitee is not entitled
to be indemnified for such expenses under this Section XI or otherwise, the
Indemnitee furnishes the Corporation with a written affirmation of his or her
good faith belief that he or she has met the standards for indemnification under
the Tennessee Business Corporation Act, and a determination is made that the
facts then known to those making the determination would not preclude
indemnification.
The Corporation may indemnify and advance expenses to an officer,
employee or agent who is not a director to the same extent as to a director by
specific action of the Corporation's Board of Directors or by contract.
The rights to indemnification and to the advancement of expenses
conferred in this Section XI shall not be exclusive of any other right that any
person may have or hereafter
6
<PAGE> 7
acquire under any statute, this Charter, Bylaw, agreement, vote of stockholders
or disinterested directors or otherwise.
The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Tennessee Business Corporation Act.
XII.
1. From time to time any of the provisions of this Amended and Restated
Charter may be amended, altered or repealed in accordance with the laws of the
State of Tennessee at the time in force.
2. The Corporation's Bylaws may be amended, added to or repealed by an
affirmative vote of at least a majority of either (i) the shares of the
Corporation's capital stock entitled to vote thereon, or (ii) the Board of
Directors.
XIII.
Any action required or permitted to be taken by the holders of the
issued and outstanding capital stock of the Corporation may be effected at an
annual or special meeting of stockholders duly called and held in accordance
with law and this Charter, or by the consent in writing of such stockholders;
provided, however, that any holder of shares of preferred stock may exercise the
special voting rights, if any, of such shares to elect directors upon the
occurrence of certain events specified in this Charter or in the resolution or
resolutions adopted by a majority of the Board of Directors then in office
providing for the issuance of such shares of preferred stock, in any manner now
or hereafter permitted by this Charter or applicable law.
Dated: March 21, 1997
CENTRAL PARKING CORPORATION
By: ______________________________
Monroe J. Carell, Jr.,
Chairman and Chief Executive Officer
7
<PAGE> 1
EXHIBIT 5
March 21, 1997
Central Parking Corporation
2401 21st Avenue South, Suite 200
Nashville, Tennessee 37212
Ladies and Gentlemen:
We have acted as legal counsel to Central Parking Corporation, (the
"Company") in connection with the preparation of a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended ("Registration
Statement"), relating to up to 4,510,000 shares of the Company's common stock,
par value $.01 per share (the "Shares"), to be sold by the Company and certain
shareholders of the Company (the "Selling Shareholders").
We have examined and are familiar with the Charter and the By-Laws of
the Company, and the various corporate records and proceedings relating to the
organization of the Company and the filing of the Registration Statement. We
have also examined such other documents and proceedings as we have considered
necessary for the purpose of this opinion.
Based on the foregoing it is our opinion that the Shares to be sold by
the Selling Shareholders are validly issued, fully paid and non assessable, and
the shares to be sold by the Company, will, when issued and delivered in the
manner and on the terms described in the Registration Statement, be legally
issued, fully paid, and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and with such state securities administrators as may
require such opinion of counsel for the registration of the Shares, and the
reference to this firm under the heading "Legal Matters" in the Prospectus.
Very truly yours,
Harwell Howard Hyne Gabbert & Manner, P.C.
<PAGE> 1
Exhibit 23.1
INDEPENDENT ACCOUNTANTS' CONSENT
Board of Directors
Central Parking Corporation:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Nashville, Tennessee
March 21, 1997
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Central Parking Corporation ("Central"), on Form S-3 of our report on the
financial statements of Square Industries, Inc. and Subsidiaries, dated March
11, 1997, appearing in Central's Current Report on Form 8-K/A dated March 18,
1997, in the Prospectus, which is part of this Registration Statement, and to
the reference to us under the heading "Experts" in such Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
PARSIPPANY, NEW JERSEY
MARCH 20, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in a Registration Statement
of Central Parking Corporation on Form S-3 of our report dated January 31, 1997
on the financial statements of Civic Parking, L.L.C. as of December 31, 1996,
and for the period from March 21, 1996 through December 31, 1996, which is
included in the amended filing of Central Parking Corporation on Form 8-K/A.
/s/ Joseph Decosimo and Company, LLP
JOSEPH DECOSIMO AND COMPANY, LLP
Chattanooga, Tennessee
March 20, 1997
<PAGE> 1
Exhibit 99
CONSENT OF LOWELL HARWOOD
The undersigned, Lowell Harwood, hereby consents to being named as a
person about to become a director of Central Parking Corporation (the
"Company") in the Company's registration statement on Form S-3.
/s/ Lowell Harwood
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Lowell Harwood
