View:
As filed with the Securities and Exchange Commission on October 28, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GRAY COMMUNICATIONS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-0285030
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Copy to:
4370 Peachtree Road, NE James C. Ryan Henry O. Smith III, Esq.
Atlanta, Georgia 30319 4370 Peachtree Road, NE Proskauer Rose, LLP
(404) 504-9828 Atlanta, Georgia 30319 1585 Broadway
(404) 504-9828 New York, New York 10036
(212) 969-3000
(Address, including zip (Name, adress, including
code, and telephone zip code, and telephone
number, including area number, including area
code, of registrant's code, of agent for service)
principal executive
offices)
___________________________________
Approximate sale of commencement of proposed sale to the public:
from time to time after this registratiion statement becomes effective,
___________________________________
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, other than securities offered only in connection with dividend
or interest reinvestment plans, please 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(d) 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
- --------------------------------------------------------------------------------
Title of each class Amount to be Proposed Proposed maximum Amount of
of securities to be registered maximum aggregateoffering registration
registered offering price(1) fee(2)
price
per unit(1)
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Class B Common Stock, 2,262,608 $14.375 $32,524,990 $9,041.94
- --------------------------------------------------------------------------------
(1) Estimated solely for purposes of calculation of the registration fee.
(2) Calculated pursuant to Rule 457(c).
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The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall thereafter become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
- --------------------------------------------------------------------------------
PROSPECTUS
GRAY COMMUNICATIONS SYSTEMS, INC.
2,262,608 SHARES OF CLASS B COMMON STOCK
The selling shareholders described in this prospectus may offer and
sell from time to time up to 2,262,608 shares of class B common stock of Gray
Communications Systems, Inc. Gray will not receive any proceeds from the sale of
these shares of common stock.
The selling shareholders may offer and sell the common stock pursuant
to this prospectus from time to time on The New York Stock Exchange or such
other national securities exchange or automated interdealer quotation system on
which shares of class B common stock are then listed, through negotiated
transactions or otherwise at market prices prevailing at the time of the sale or
at negotiated prices.
Gray will pay the expenses of registering the shares of class B common
stock offered by this prospectus, and the selling shareholders will bear the
expenses of selling the shares, including commissions, concessions, or discounts
to broker dealers, and fees and expenses of counsel or other advisors to the
selling shareholders.
The class B common stock is listed and traded on The New York Stock
Exchange under the symbol "GCS.B." On October 25, 1999, the closing price of the
class B common stock on the NYSE was $14.50 per share.
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Investing in the class B common stock involves certain
risks. See "Risk Factors" beginning on page 2.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
October 27, 1999
THE COMPANY
Gray operates 13 network-affiliated television stations in 11
medium-size markets in the South and Midwest. Ten of Gray's stations are
affiliated with the CBS Television Network and three are affiliated with the NBC
Television Network. Gray also owns and operates four daily newspapers (one in
Albany, Georgia, two in suburban Atlanta, Georgia and one in Goshen, Indiana); a
weekly advising shopper in southwest Georgia; a communications and paging
business in the Southeast and one of the largest fleets of satellite uplink
trucks in the Southeast.
On October 1, 1999, Gray acquired KWTX, a CBS affiliate located in
Waco, Texas; KBTX, a CBS affiliated satellite station of KWTX located in Bryan,
Texas; and KXII, a CBS affiliate located in Sherman, Texas.
RISK FACTORS
In addition to the other information contained or incorporated by
reference in this prospectus, potential purchasers of the class B common stock
should consider the following risk factors.
Gray's Leverage May Adversely Affect its Cash Flow and its Ability to
Obtain Financing and React to Changes in its Industries. Gray has substantial
indebtedness and Gray may incur substantial indebtedness in the future,
including acquisition-related indebtedness. The degree to which Gray will be
leveraged may have important consequences to holders of Gray stock, including
the following:
o Gray's ability to obtain financing in the future for working
capital, capital expenditures and general corporate purposes may
be impaired;
o a substantial portion of Gray's cash flow must be dedicated to
the payment of principal and interest on its indebtedness and to
the payment of dividends on its preferred stock; and
o high degree of leverage may limit Gray's ability to react to
changes in the broadcast television, publishing and paging
industries, making it more vulnerable to economic downturns and
limiting its ability to withstand competitive pressures.
Implementation of Digital Television Service May Adversely Affect
Gray's Television Operations. The Federal Communications Commission has adopted
rules and regulations, which require television stations to implement digital
television service (including high definition) in the United States. Conversion
to digital television service may reduce the geographic reach of Gray's
television stations or result in increased interference with, in either case, a
corresponding loss of population coverage. In addition, implementation of
digital television service will impose significant additional costs on Gray's
television stations, primarily due to the capital costs associated with the
construction of digital television facilities and increased operating costs both
during and after the transition period. Gray's television stations are required
to begin broadcasting on their digital channels in addition to their analog
broadcasts in 2002.
Gray's Business May Be Affected by Adverse Regional and Local Business
Conditions and Cyclical and Seasonal Fluctuations. Gray's television and
newspaper businesses are affected by prevailing economic conditions. Since Gray
relies on sales of advertising at its television stations and in its
publications for substantially all of its revenues, Gray's operating results are
sensitive to general economic conditions and regional conditions in each of the
local markets served by its television stations and publications.
Gray's results usually are subject to seasonal fluctuations, which
result in fourth quarter broadcast operating income being greater usually than
first, second and third quarter broadcast operating income. This seasonality is
primarily attributable to increased expenditures by advertisers in anticipation
of holiday
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season spending and an increase in viewership during this period. In addition,
revenues from political advertising tend to be higher in even numbered years.
Gray's Business Depends in Large Part on the Success of Its Network
Affiliations. All of Gray's television stations are affiliated with national
networks. The television viewership levels for each of Gray's stations are
dependent upon programming provided by the network with which each station is
affiliated. Gray currently operates 10 CBS affiliated stations and three NBC
affiliated stations. The concentration of CBS affiliates makes Gray sensitive to
adverse changes in its business relationship with, and the general success of,
CBS.
Expiration of Network Affiliation Agreements. The network affiliation
agreements for all of Gray's stations expire over the next several years. Gray
may not be able to enter into new affiliation agreements that provide Gray with
as much compensation from the networks as the present agreements.
Governmental Regulation Could Restrict, Suspend or Terminate Gray's
Ability to Operate a Television Station. The operation of television stations is
subject to regulation by the FCC, which has the power to suspend, or refuse to
renew, television stations' licenses. The failure of the FCC to renew Gray's
licenses would have a material adverse effect upon Gray and therefore would
materially adversely affect an investment in Gray.
Gray's Businesses Are Very Competitive. The businesses engaged in by
Gray are highly competitive. Competitors include companies with considerably
greater financial, technical and marketing resources.
Technological innovation and the resulting proliferation of programming
alternatives, such as the Internet, cable television, wireless cable, in home
satellite-to-home distribution services, pay-per-view and home video and
entertainment systems have fractionalized television viewing audiences and have
subjected free over-the-air television broadcast stations to new types of
competition.
Gray's Inability to Integrate Successfully Acquisitions Would Adversely
Affect Gray. Gray has made a number of recent acquisitions and in the future may
make additional acquisitions. In order to integrate successfully these
acquisitions into its business, Gray will need to coordinate the management and
administrative functions, and sales, marketing and development efforts of each
company. Combining companies presents a number of challenges, including
integrating the management of companies who may have different approaches to
sales and service, and the integration of a number of geographically separated
facilities. In addition, integrating acquisitions requires substantial
management time and attention and may distract management from Gray's day-to-day
business. If Gray cannot successfully integrate its acquisitions, Gray's
business and the results of operations of the combined businesses could be
adversely affected.
Gray's Success will Depend on Senior Management. The success of Gray
depends to a significant extent on the efforts of Gray's senior management. As a
result, if any of these individuals were to leave Gray, Gray could face
substantial difficulty in hiring qualified successors and could experience a
loss in productivity while any such successors gain the necessary experience.
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USE OF PROCEEDS
The selling shareholders will receive all of the net proceeds from any
sale of shares of class B common stock offered by this prospectus. Gray will not
receive any proceeds from any sale of such shares.
SELLING SHAREHOLDERS
This prospectus relates to periodic offers and sales of up to 2,262,608
shares of class B common stock by the selling shareholders described below and
their respective pledgees, donees and other successors in interest
(collectively, the "selling shareholders"). All of the selling shareholders were
affiliates of the entities owning television stations KWTX, KBTX and KXII, which
were acquired by Gray on October 1, 1999. None of the selling shareholders is an
affiliate of Gray, except that Ray M. Deaver is Gray's Regional Vice President -
Texas and Ellen B. Deaver is Mr. Deaver's wife. The following table sets forth
certain information with respect to the selling shareholders and their
beneficial ownership of shares of class B common stock as of the date of this
prospectus. Gray has obtained this information from the selling shareholders.
Except for Ray M. Deaver and Ellen B. Deaver, as described above, none of the
selling shareholders holds any position, office or has had any other material
relationship with Gray, or any of its predecessors or affiliates, during the
past three years.
Percentage of
Outstanding
Shares Class B
Beneficially Common Shares
Owned Stock Owned Offered by
Prior to the Prior to the this
Selling Shreholder Offering Offering Prospectus
- ------------------ ------------- ----------- ------------
Diana C. Braswell 90,378 1.1 90,378
W. W. Callan, Jr. 90,378 1.1 90,378
Callan/Braswell 1992
Family Limited
Partnership 116,199 1.4 116,199
Ray M. Deaver 220,853 2.6 220,853
Ellen B. Deaver 220,853 2.6 220,853
Donald L. Howell 306,993 3.6 306,993
Ross Sams, Jr. 42,430 * 42,430
First Stock Company,
Norwest Trust
Texas N.A. Waco 205,908 2.4 205,908
Thomas Stribling 189,913 2.2 189,913
The LBJ Holding Company 645,531 7.5 645,531
Margaret V. Gillam 60,796 * 60,796
Norwest Bank Texas,
South Central,
Executor and Trustee, 36,188 * 36,188
Estate of
Peggy L. Lawrence
Norwest Bank Texas,
South Central, Trustee, 36,188 * 36,188
John M. Lawrence III
Revocable Trust
- ------------------
(*) Less than 1%
If all of the shares of class B common stock offered by this prospectus
are sold, the selling shareholders will thereafter own no shares of class B
common stock.
PLAN OF DISTRIBUTION
The selling shareholders may offer and sell the shares included in this
prospectus from time to time in one or more transactions, at prices related to
prevailing market prices at the time of the sale or at
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negotiated prices. The methods by which these shares may be sold include: (a)
sales in open market or block transactions on The New York Stock Exchange, or
such other national securities exchange or automated interdealer quotation
system on which shares of class B common stock are then listed or quoted; (b)
sales in the over-the-counter market; (c) privately negotiated transactions; (d)
put or call options transactions relating to the shares, (e) short sales of
shares, (f) hedging transactions, (g) distributions to beneficiaries, partners,
members or shareholders of the selling shareholders; or (h) a combination of
such methods of sale. These transactions may or may not involve brokers or
dealers. The selling shareholders have advised Gray that they have not entered
into any agreements, understandings or arrangements with any broker-dealers
regarding the sale of their securities, nor is there a coordinating broker
acting in connection with the proposed sale of shares by the selling
shareholders. In addition, any of the shares covered by this prospectus which
qualify for sale under Rule 145 under the Securities Act of 1933 may be sold
under Rule 145 rather than pursuant to this prospectus.
The selling shareholders may effect such transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling shareholders or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). In effecting sales,
such broker-dealers may arrange for other broker-dealers to participate.
The selling shareholders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with these
transactions, broker-dealers or other financial institutions may engage in short
sales of securities of Gray in the course of hedging the positions they assume
with the selling shareholders. The selling shareholders may also enter into
options or other transactions with broker-dealers or other financial
institutions with respect to the class B common stock offered by this
prospectus, which securities the broker-dealers or other financial institutions
may resell pursuant to this prospectus (as supplemented or amended to reflect
the transaction.)
The selling shareholders and any broker-dealer who acts in connection
with the sale of shares hereunder may be deemed to be "underwriters," within the
meaning of Section 2(11) of the Securities Act of 1933, and any compensation
received by them and any profit on any resale of shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act of 1933.
Because selling shareholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, the selling
shareholders will be subject to the prospectus delivery requirements of the
Securities Act of 1933, which may include delivery through the facilities of The
New York Stock Exchange pursuant to Rule 153 under the Securities Act of 1933.
In certain jurisdictions the securities offered hereby may not be
offered or sold unless they have been registered or qualified for sale in such
jurisdictions or an exemption from registration or qualification is available
and is complied with.
Gray has agreed to pay all expenses in connection with the registration
of the shares being offered hereby. The selling shareholders are responsible for
paying broker's commissions, discounts and commissions and any other selling
expenses, as well as fees and expenses of selling shareholders' counsel.
The selling shareholders have severally agreed to indemnify Gray, its
directors and officers and any person who controls Gray against certain
liabilities and expenses arising out of or based upon the information set forth
in this prospectus and the registration statement of which this prospectus is a
part, if such liability arises out of information furnished in writing to Gray
specifically for use in connection with the preparation of this registration
statement, prospectus, amendment or supplement.
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Upon Gray's notification by a selling shareholder that any material
arrangement has been entered into with an underwriter or a broker-dealer for the
sale of shares through a special offering, block trade, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act of 1933, disclosing (a) the name of each such selling shareholder
and of the participating broker-dealer(s), (b) the number of shares involved,
(c) the price at which such shares were sold, (d) the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable, (e)
that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus and (f)
other facts material to the transaction.
EXPERTS
The consolidated financial statements of Gray appearing in Gray's
Annual Report (Form 10-K) for the year ended December 31, 1998 have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.
The financial statements of each of KWTX and Brazos (from which Gray
purchased two television stations on October 1, 1999) at December 31, 1997 and
1998, and for each of the three years in the period ended December 31, 1998
incorporated by reference in this prospectus have been audited by Pattillo,
Brown & Hill LLP, independent auditors, as set forth in their reports
incorporated by reference, and are so incorporated by reference in reliance upon
such reports given on the authority of such firm as experts in accounting and
auditing.
The financial statements of KXII (from which Gray purchased a
television station on October 1, 1999) at December 31, 1997 and 1998, and for
each of the three years in the period ended December 31, 1998 incorporated by
reference in this prospectus have been audited by Jaynes, Reitmeier, Boyd &
Therrell PC, independent auditors, as set forth in their reports incorporated by
reference in this prospectus, and are incorporated by reference in reliance upon
such reports given on the authority of such firm as experts in accounting and
auditing.
LEGAL MATTERS
The legality of the shares of class B common stock offered pursuant to
this prospectus has been passed upon for Gray by Heyman & Sizemore, Atlanta,
Georgia.
WHERE TO FIND ADDITIONAL INFORMATION
Gray files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission under the
Securities Exchange Act of 1934. Shareholders may read and copy this information
at the following locations of the Securities and Exchange Commission:
Securities and Exchange Securities and Exchange Securities and Exchange
Commission Commission Commission
Judiciary Plaza, Room 1024 Seven World Trade Center, Citicorp Center
450 Fifth Street, N.W. Suite 1300 500 West Madison Street,
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661
Shareholders can also obtain copies of this information by mail from
the Public Reference Section of the Securities and Exchange Commission, 450
Fifth Street, N.W., Room 10024, Washington D.C. 20549, at prescribed rates.
6
The Securities and Exchange Commission also maintains an Internet world
wide web site that contains reports, proxy statements and other information
about issuers, like Gray, who file electronically with the Securities and
Exchange Commission. The address of that site is http://www.sec.gov.
Gray has filed with the Securities and Exchange Commission a
registration statement on Form S-3 of which this prospectus is a part. That
registration statement, including the attached exhibits and schedules, contains
additional relevant information about Gray, and the Gray common stock. The rules
and regulations of the Securities and Exchange Commission allow Gray to omit
certain information included in the registration statement from this prospectus.
Shareholders can obtain any of the documents incorporated by reference
in this document from Gray without charge, excluding any exhibits to those
documents unless the exhibit is specifically incorporated by reference as an
exhibit to this prospectus. Documents incorporated by reference in this
prospectus can be obtained by requesting them in writing or by telephone from
Gray at the following address:
Gray Communications Systems, Inc.
126 North Washington St.
P.O. Box 48
Albany, Georgia 31702-0048
(912) 888-9378
Attention: Investor Relations
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows Gray to "incorporate by
reference" information into this prospectus. This means that Gray can disclose
important information by referring to another document filed separately with the
Securities and Exchange Commission. The information incorporated by reference is
considered to be part of this prospectus, except for any information that is
superseded by information that is included directly in this document.
This prospectus incorporates by reference the documents listed below
that Gray has previously filed with the Securities and Exchange Commission and
that are not included in or delivered with this document. They contain important
information about Gray and its financial condition.
Filings
Annual Report on Form 10-K for the year ended December 31, 1998
Quarterly Report on Form 10-Q for the quarter ended March 31, 1999
Quarterly Report on Form 10-Q for the quarter Ended June 30, 1999
Current report on Form 8-K dated October 15, 1999
The description of Gray's class A common stock and class B common stock
set forth in Gray's Form 8-A filed with the Securities and Exchange
Commission
Gray incorporates by reference additional documents that it may file
with the Securities and Exchange Commission between the date of this prospectus
and the date of the Gray shareholders meeting. These documents include periodic
reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K, as well as proxy statements.
Gray has not authorized anyone to give any information or make any
representation about Gray that is different from, or in addition to, that
contained in this prospectus or in any of the materials that Gray has
incorporated by reference into this document. Therefore, if anyone does provide
information of this sort, it should not relied on. If a person is in a
jurisdiction where offers to exchange or sell, or solicitations of offers to
exchange or purchase, the securities offered by this
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document or the solicitation of proxies is unlawful, or if it is unlawful to
direct these types of activities, then the offer presented in this document does
not extend to that person. The information contained in this document speaks
only as of the date of this document, unless the information specifically
indicates that another date applies.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These statements relate to
future events or the future financial performance of Gray. In some cases,
forward-looking statements can be identified by terminology such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms and other
comparable terminology. These statements only reflect management's expectations
and estimates. Actual events or results may differ materially. In evaluating
these statements, prospective purchasers in this offering should specifically
consider various factors, including the risks outlined under "Risk Factors."
These factors may cause Gray's actual results to differ materially from any
forward-looking statements. Gray is not undertaking any obligations to update
any forward-looking statements contained in this prospectus to reflect any
future events or developments.
8
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, other than underwriting discounts and
commissions, in connection with the offering of the common stock, are as
follows:
Registration Fee-- Securities and Exchange Commission $ 9,041
Printing and Engraving Expenses 10,000
Legal Fees and Expenses 15,000
Accounting Fees and Expenses 5,000
Miscellaneous 5,000
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Total 44,041
------------
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Item 20. Indemnification of Directors and Officers .
Sections 14-2-851 and 14-2-857 of the Georgia Business Corporation Code
(the "GBCC") permit, in general, a Georgia corporation to indemnify any person
made, or threatened to be made, a party to an action or proceeding by reason of
the fact that he or she is or was a director, officer, employee or agent of the
corporation, against any judgment, fines, amounts paid in settlement and
expenses, including attorney's fees actually and reasonably incurred as a result
of such action or proceeding, or any appeal therein, if such person acted in
good faith and in a manner he or she reasonably believed to be in or, not
opposed to the best interests of the corporation and, in criminal actions or
proceedings, in addition had no reasonable cause to believe that his or her
conduct was unlawful, provided a corporation may not indemnify a person in any
action brought by or in the right of the corporation. Sections 14-2-853 and
14-2-857 of the GBCC permit the corporation to pay in advance of a final
disposition of such action or proceeding the expenses incurred in defending such
action or proceeding upon receipt, in the case of a director or officer, of a
written affirmation of his or her good faith belief that he or she has met the
standard of conduct required by section 14-2-851 and of an undertaking by or on
behalf of the director or officer to repay such amount as, and to the extent,
required by statute.
The certificate of incorporation of Gray Communications Systems, Inc.
provides that Gray shall indemnify, to the fullest extent permitted by the GBCC,
all directors from and against any and all of the expenses, liabilities or other
matters referred to in, or covered by, the GBCC; provided, however, that to the
extent required by the GBCC, Gray shall not eliminate or limit the liability of
a director (1) for any appropriation, in violation of his duties, of any
business opportunity of Gray; (2) for acts of omissions which involve
intentional misconduct or a knowing violation of law; (3) for types of liability
set forth in Section 14-2-832 of the GBCC; or (4) for any transaction from which
the director derived an improper personal benefit.
II-1
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits
The following exhibits are filed herewith or incorporated herein by
reference.
Exhibit
Number Description
------ -----------
5.1 Opinion of Heyman & Sizemore as to the Gray class B common stock being
registered hereby.
23.1 Consent of Heyman & Sizemore (contained in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, independent auditors, with respect to
the financial statements and schedule of Gray Communications Systems,
Inc.
23.3 Consent of Pattillo, Brown & Hill LLP, independent auditors, with
respect to certain financial statements of KWTX Broadcasting
Company.
23.4 Consent of Pattillo, Brown & Hill LLP, independent auditors, with
respect to certain financial statements of Brazos Broadcasting
Company.
23.5 Consent of Jaynes, Reitmeier, Boyd & Therrell PC, independent
auditors, with respect to certain financial statements of KXII
Broadcasting Company.
24.1 Power of Attorney (included in signature page of Registration
Statement).
(b) Financial Statement Schedules
Schedule II - "Valuation and Qualifying Accounts," is included herein.
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and therefor have been omitted.
(c) Reports, Opinions and Appraisals
None.
Item 22. Undertakings
(a) The undersigned Registrant hereby undertake:
(1) ______ To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set
II-2
forth in the "Calculation of Registration Fee" table in the
effective Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement.
provided, however, that paragraphs (i) and (ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Registrant pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) ______ That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) ______ To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) ______ The undersigned Registrant hereby undertake that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) ______ Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that such a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on the 25th day of
October, 1999.
GRAY COMMUNICATIONS SYSTEMS, INC
By: /s/ J. Mack Robinson
------------------------------
J. Mack Robinson
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert S. Prather, Jr. and James C. Ryan,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ J. Mack Robinson President and Chief Executive October 25, 1999
- --------------------------- Officer; Director (principal
J. Mack Robinson executive officer)
/s/ James C. Ryan Vice President - Chief Financial October 25, 1999
- --------------------------- Officer (principal financial and
James C. Ryan accounting officer)
/s/ Robert S. Prather, Jr. Director and Executive October 25, 1999
- --------------------------- Vice President
Robert S. Prather, Jr. - Acquisitions
/s/ William E. Mayher, III Chairman of the October 20, 1999
- --------------------------- Board of Directors
William E. Mayher, III
/s/ Richard L. Bogner Director October 21, 1999
- ---------------------------
Richard L. Boger
/s/ Hilton M. Howell, Jr. Director October 25, 1999
- ---------------------------
Hilton M. Howell, Jr.
/s/ Zell Miller Director October 25, 1999
- ---------------------------
Zell Miller
II-4
/s/ Howell W. Newton Director October 25, 1999
- ---------------------------
Howell W. Newton
/s/ Hugh Norton Director October 20, 1999
- ---------------------------
Hugh Norton
/s/ Harriett J. Robinson Director October 25, 1999
- ---------------------------
Harriett J. Robinson
II-5
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
5.1 Opinion of Heyman & Sizemore as to the Gray class B common stock
being registered hereby.
23.1 Consent of Heyman & Sizemore (contained in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, independent auditors, with respect
to the financial statements and schedule of Gray Communications
Systems, Inc.
23.3 Consent of Pattillo, Brown & Hill LLP, independent auditors, with
respect to certain financial statements of KWTX Broadcasting
Company.
23.4 Consent of Pattillo, Brown & Hill LLP, independent auditors, with
respect to certain financial statements of Brazos Broadcasting
Company.
23.5 Consent of Jaynes, Reitmeier, Boyd & Therrell PC, independent
auditors, with respect to certain financial statements of KXII
Broadcasting Company.
24.1 Power of Attorney (included in signature page of Registration
Statement).
Exhibit 5.1
[Letterhead of Heyman & Sizemore]
Neal H. Ray
October 21, 1999
Gray Communications Systems, Inc.
126 North Washington Street
Albany, Georgia 31701
Ladies and Gentleman:
We are acting as your counsel in connection with the Registration
Statement on Form S-3 with exhibits thereto (the "Registration Statement") filed
by Gray Communications Systems, Inc., a Georgia corporation (the "Company"),
under the Securities Act of 1933, as amended (the "Securities Act"), relating to
the registration under the Securities Act of shares (the "Shares") of Class B
Common Stock, no par value, of the Company issued in connection with certain
acquisitions by the Company on October 1, 1999 pursuant to the provisions of an
Agreement and Plan of Merger dated as of April 13, 19999 by and among the
Company, Gray Communications of Texas, Inc. and KWTX Broadcasting Company and an
Agreement and Plan of Merger dated as of April 13, 1999 by and among the
Company, Gray Communications of Texas, Inc. and Brazos Broadcasting Company (the
"Merger Agreements").
As such counsel, we have participated in the preparation of the
Registration Statement, the Merger Agreements and certain corporate proceedings.
We have examined and relied upon originals or copies, certified or otherwise
authenticated to our satisfaction, of certain public officials and
representatives of the Company and have made such investigations of law, and
have discussed with representatives of the Company and such other persons such
questions of fact, as we have deemed proper and necessary as a basis for
rendering this opinion.
Based upon, and subject to, the foregoing, we are of the opinion that
the Shares are duly authorized, legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to this firm in the Prospectus and
Registration Statement in the section entitled "Legal Matters". In giving such
consent, we do not admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act, or the rules and regulations of
the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
HEYMAN & SIZEMORE
/s/ Neal H. Ray
Neal H. Ray
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3), and related Prospectus of Gray Communications
Systems, Inc. for the registration of 2,262,608 shares of its class B common
stock and to the incorporation by reference therein of our report dated January
26, 1999, with respect to the consolidated financial statements and schedule of
Gray Communications Systems, Inc. included in its Annual Report (Form 10-K) for
the year ended December 31, 1998, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Atlanta, Georgia
October 25, 1999
EXHIBIT 23.3
[Pattillo, Brown & Hill, L.L.P. Letterhead]
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption "Experts" and
to the use of our report dated March 24, 1999 with respect to the financial
statements of KWTX Broadcasting Co. included in the Registration Statement (Form
S-3), and related Prospectus of Gray Communications Systems, Inc. for the
registration of 2,262,608 shares of its class B common stock.
/s/ Patillo, Brown & Hill, L.L.P.
Waco, Texas
October 21, 1999
EXHIBIT 23.4
[Pattillo, Brown & Hill, L.L.P. Letterhead]
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to our firm under the caption "Experts" and
to the use of our report dated March 24, 1999 with respect to the financial
statements of Brazos Broadcasting Company included in the Registration Statement
(Form S-3), and related Prospectus of Gray Communications Systems, Inc. for the
registration of 2,262,608 shares of its class B common stock.
/s/ Patillo, Brown & Hill, L.L.P.
Waco, Texas
October 21, 1999
EXHIBIT 23.5
[Letterhead of Jaynes, Reitmeier, Boyd & Therrell, P.C.]
CONSENT OF INDEPENDENT ACCOUNTANTS
KXII Broadcasters, Inc.
KXII Television, Ltd.
We consent to the reference to our firm under the caption "Experts" and to the
use of our report with respect to the combined financial statements of KXII
Broadcasters, Inc. and KXII Television, Ltd. dated April 9, 1999, except with
respect to Notes 10 and 11, which are as of April 19, 1999 included in the
Registration Statement (Form S-3), and related Prospectus of Gray Communications
Systems, Inc. for the registration of 2,262,608 shares of its class B common
stock.
/s/ Jaynes, Reitmeier, Boyd & Therrell, P.C.
Waco, Texas
October 21, 1999