As filed with the Securities and Exchange Commission on November 5, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SCHOOL SPECIALTY, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 39-0971239
(State of (I.R.S. Employer
Incorporation) Identification
Number)
426 West College Avenue
P.O. Box 1579
Appleton, Wisconsin 54912-1579
(Address of Principal Executive Offices) (Zip Code)
SCHOOL SPECIALTY, INC. AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN
Daniel P. Spalding, Chief Executive Officer
School Specialty, Inc.
426 West College Avenue
P.O. Box 1579
Appleton, Wisconsin 54912-1579
(Name and Address of Agent for Service)
(920) 734-2756
(Telephone Number, including area code, of Agent for Service)
Copy to:
Scott A. Moehrke
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202-3590
(414) 273-3500
CALCULATION OF REGISTRATION FEE
Title of Proposed maximum Proposed maximum Amount of
securities to Amount to offering price aggregate registration
be registered be registered per share(1) offering price(1) fee(1)
Common Stock, 571,685 N/A $8,968,308 $2,493.19
$.001 par value
(1) The registration fee was calculated pursuant to Rule
457(c) and Rule 457(h)(1) under the Securities Act of
1933, as amended (the "Securities Act"). The
registration fee is based on the average of the high and
low price of a share of School Specialty, Inc. common
stock on November 2, 1999 on the Nasdaq National Market,
as reported in the Midwest Edition of The Wall Street
Journal on November 3, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by
reference in this Registration Statement:
(a) The Registrant's Form 10-K for the year ended April 24, 1999;
(b) The Registrant's Form 10-Q for the quarter ended July 24, 1999;
(c) The Registrant's current reports on Form 8-K filed on
April 26, 1999 and July 14, 1999; and
(d) The description of the Registrant's Common Stock contained
in the Registrant's Registration Statement filed pursuant to
Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and any amendment or report
filed for the purpose of updating such description.
All documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act prior to the filing of a post-
effective amendment which indicates that all
shares offered have been sold or which deregisters
all securities then remaining unsold, shall be
deemed incorporated by reference in this
Registration Statement and to be part hereof from
the date of filing such documents.
Item 6. Indemnification of Directors and Officers.
Article Eight of the Registrant's Certificate
of Incorporation provides that the Registrant
shall indemnify its directors and officers to the
fullest extent permitted by the General
Corporation Law of the State of Delaware.
Section 145 of the General Corporation Law of
the State of Delaware permits a corporation, under
specified circumstances, to indemnify its
directors, officers, employees or agents against
expenses (including attorneys' fees), judgments,
fines and amounts paid in settlements actually and
reasonably incurred by them in connection with any
action, suit or proceeding brought by third
parties by reason of the fact that they were or
are directors, officers, employees or agents of
the corporation, if such directors, officers,
employees or agents acted in good faith and in a
manner they reasonably believed to be in or not
opposed to the best interests of the corporation
and, with respect to any criminal action or
proceeding, had no reason to believe their conduct
was unlawful. In a derivative action (i.e., one
by or in the right of the corporation),
indemnification may be made only for expenses
actually and reasonably incurred by directors,
officers, employees or agents in connection with
the defense or settlement of an action or suit,
and only with respect to a matter as to which they
shall have acted in good faith and in a manner
they reasonably believed to be in or not opposed
to the best interests of the corporation, except
that no indemnification shall be made if such
person shall have been adjudged liable to the
corporation, unless and only to the extent that
the court in which the action or suit was brought
shall determine upon application that the
defendant directors, officers, employees or agents
are fairly and reasonably entitled to indemnity
for such expenses despite such adjudication of
liability.
Article Seven of the Registrant's Certificate
of Incorporation states that directors of the
Registrant will not be liable to the Registrant or
its stockholders for monetary damages for any
breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's
duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section
174 of the General Corporation Law of the State of
Delaware, which makes directors liable for
unlawful dividends or unlawful stock repurchases
or redemptions or (iv) for any transaction from
which the director derived an improper personal
benefit.
<PAGE>
Article IV of the Registrant's Bylaws
provides that the Registrant shall indemnify its
officers and directors (and those serving at the
request of the Registrant as an officer or
director of another corporation, partnership,
joint venture, trust or other enterprise), and may
indemnify its employees and agents (and those
serving at the request of the Registrant as an
employee or agent of another corporation,
partnership, joint venture, trust or other
enterprise), against expenses (including
attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably
incurred, if such officer, director, employee or
agent acted in good faith and in a manner
reasonably believed to be in or not opposed to the
best interests of the Registrant, and with respect
to any criminal action or proceeding, had no
reasonable cause to believe his conduct was
unlawful. In a derivative action, indemnification
shall be limited to expenses (including attorneys'
fees) actually and reasonably incurred by such
officer, director, employee or agent in the
defense or settlement of such action or suit, and
no indemnification shall be made in respect of any
claim, issue or matter as to which such person
shall have been adjudged to be liable to the
Registrant unless and only to the extent that the
Delaware Court of Chancery or the court in which
such action or suit was brought shall determine
upon application that, despite the adjudication of
liability but in view of all the circumstances of
the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the
Delaware Court of Chancery or such other court
shall deem proper.
Unless the Board of Directors of the
Registrant otherwise determines in a specific
case, expenses incurred by an officer or director
in defending a civil or criminal action, suit or
proceeding shall be paid by the Registrant in
advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking
by or on behalf of the officer or director to
repay such amount if it shall ultimately be
determined that he is not entitled to be
indemnified by the Registrant.
Item 8. Exhibits.
4 School Specialty, Inc. Amended and Restated 1998 Stock
Incentive Plan.
5 Opinion of Godfrey & Kahn, S.C. regarding
legality of the Common Stock being registered.
23.1 Consent of Godfrey & Kahn, S.C., included in Exhibit 5.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ernst & Young LLP.
24 Powers of Attorney.
Item 9. Undertakings.*
The Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or
sales are being made, a post-effective amendment
to this Registration Statement 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.
(2) That, for the purpose of determining any
liability under the Securities Act, 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.
<PAGE>
(b) (4) That, for purposes of determining any
liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee
benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be
deemed to be a new registration statement relating
to the securities offered therein, and the
offering of such securities at that time shall be
deemed to be the initial bona fide offering
thereof.
(h) (5) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted
to directors, officers and controlling persons of
the Registrant pursuant to the provisions of Item
6 of this Registration Statement, or otherwise,
the Registrant has been advised that in the
opinion of the Securities and Exchange Commission
such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other
than the payment by the Registrant of expenses
incurred or paid by a director, officer or
controlling person of the Registrant in the
successful defense of any action, suit or
proceeding) is asserted by such director, officer
or controlling person in connection with the
securities being registered, the Registrant will,
unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the
question whether such indemnification by it is
against public policy as expressed in the
Securities Act and will be governed by the final
adjudication of such issue.
____________________
*Paragraphs correspond to Item 512 of Regulation S-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, as amended, the Registrant certifies that it
has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized,
in the City of Appleton, State of Wisconsin, on
September 28, 1999.
SCHOOL SPECIALTY, INC.
By: /s/ Daniel P. Spalding
-------------------------
Daniel P. Spalding
Chief Executive Officer and
Chairman of the Board
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/ Daniel P. Spalding Date: September 28, 1999
- -------------------------
Daniel P. Spalding
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
/s/ Mary M. Kabacinski Date: September 28, 1999
- --------------------------
Mary M. Kabacinski
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
Directors: David J. Vander Zanden, Jonathan J. Ledecky, Leo C. McKenna,
Rochelle Lamm Wallach and Jerome M. Pool.
By: /s/ Daniel P. Spalding Date: September 28, 1999
-----------------------------------
Daniel P. Spalding, as Attorney-in-Fact*
*Pursuant to authority granted by power of attorney,
copies of which are filed herewith as Exhibit 24.
<PAGE>
EXHIBIT INDEX
Exhibits
4 School Specialty, Inc. Amended and Restated 1998 Stock
Incentive Plan.
5 Opinion of Godfrey & Kahn, S.C. regarding
legality of the Common Stock being registered.
23.1 Consent of Godfrey & Kahn, S.C., included in Exhibit 5.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ernst & Young LLP.
24 Powers of Attorney.
Exhibit 4
AMENDED AND RESTATED
SCHOOL SPECIALTY, INC.
1998 STOCK INCENTIVE PLAN
PURPOSE SCHOOL SPECIALTY, INC., a Delaware
corporation (the "Company"), wishes to
recruit, reward, and retain employees,
consultants, independent contractors,
advisors, officers and outside
directors. To further these objectives,
the Company hereby sets forth the School
Specialty, Inc. 1998 Stock Incentive
Plan (the "Plan") to provide options
("Options") or direct grants ("Stock
Grants" and, together with the Options,
"Awards") to employees, consultants,
independent contractors, advisors,
officers and outside directors with
respect to shares of the Company's
common stock (the "Common Stock"). The
Plan was originally effective as of the
effective date (the "Effective Date") of
the Company's registration under Section
12 of the Securities Exchange Act of
1934 (the "Exchange Act") with respect
to its initial public offering ("IPO"),
and this amendment and restatement is
effective as of September 2, 1999.
PARTICIPANTS The following persons are eligible to
receive Options and Stock Grants under
the Plan: (1) current and prospective
Employees (as defined below) of the
Company and any Eligible Subsidiary (as
defined in the Eligible Subsidiary
section below), (2) consultants,
advisors and independent contractors of
the Company and any Eligible Subsidiary
and (3) officers and directors of the
Company and any Eligible Subsidiary who
are not Employees ("Eligible Officers
and Eligible Directors"). Eligible
persons become "Optionees" when the
Administrator grants them an option
under this Plan or "Recipients" when
they receive a direct grant of Common
Stock. (Optionees and Recipients are
referred to collectively as
"Participants." The term Participant
also includes, where appropriate, a
person authorized to exercise an Award
in place of the original Optionee.)
Employee means any person employed as a
common law employee of the Company or an
Eligible Subsidiary.
ADMINISTRATOR The Administrator will be the
Compensation Committee of the Board of
Directors of the Company (the
"Compensation Committee"), unless the
Board specifies another committee. The
Board may also act under the Plan as
though it were the Compensation
Committee.
The Administrator is responsible for the
general operation and administration of
the Plan and for carrying out its
provisions and has full discretion in
interpreting and administering the
provisions of the Plan. Subject to the
express provisions of the Plan, the
Administrator may exercise such powers
and authority of the Board as the
Administrator may find necessary or
appropriate to carry out its functions.
The Administrator
<PAGE>
may delegate its
functions (other than those described in
the Granting of Awards section) to
Employees of the Company.
The Administrator's powers will include,
but not be limited to, the power to
amend, waive, or extend any provision or
limitation of any Award. The
Administrator may act through meetings
of a majority of its members or by
unanimous consent.
GRANTING OF Subject to the terms of the Plan, the
AWARDS Administrator will, in its sole
discretion, determine:
the Participants who receive Awards,
the terms of such Awards,
the schedule for exercisability or
nonforfeitability (including any
requirements that the Participant
or the Company satisfy performance
criteria),
the time and conditions for
expiration of the Award, and
the form of payment due upon exercise, if any.
The Administrator's determinations under
the Plan need not be uniform and need
not consider whether possible
Participants are similarly situated.
Options granted to Employees may be
nonqualified stock options ("NQSOs") or
"incentive stock options" ("ISOs")
within the meaning of Section 422 of the
Internal Revenue Code of 1986, as
amended from time to time (the "Code"),
or the corresponding provision of any
subsequently enacted tax statute.
Options granted to consultants,
independent contractors, advisors,
Eligible Officers and Eligible
Directors, including Formula Options (as
defined below), must be NQSOs. The
Administrator will not grant ISOs unless
the stockholders either have already
approved the granting of ISOs or give
such approval within 12 months after the
grant.
The Administrator may impose such
conditions on or charge such price for
the Stock Grants as it deems
appropriate.
SUBSTITUTIONS The Administrator may also grant
Awards in substitution for options or
other equity interests held by
individuals who become Employees of the
Company or of an Eligible Subsidiary as
a result of the Company's acquiring or
merging with the individual's employer
or acquiring its assets. If necessary
to conform the Awards to the interests
for which they are substitutes, the
Administrator may grant substitute
Awards under terms
<PAGE>
and conditions that
vary from those the Plan otherwise
requires. Awards in substitution for
U.S. Office Products' options in
connection with the distribution by U.S.
Office Products of the Company's Common
Stock will retain their pre-distribution
exercise schedule and terms (including
Change of Control provisions) and
expiration date.
DIRECTOR Each Eligible Director will receive a
FORMULA formula stock option ("Formula
OPTIONS Option") with respect to 15,000 shares
of Common Stock upon the first
to occur of their initial appointment or
election to the Board (with the grant
made as of the date of such appointment
or election). Thereafter, each Eligible
Director serving on the Board will
receive a Formula Option annually with
respect to 5,000 shares of Common Stock
on a date determined by the
Administrator.
EXERCISE Unless the Administrator specifies
SCHEDULE otherwise, each Formula Option will
become exercisable as to 20% of the
covered shares on the first anniversary
of its Date of Grant (as defined in the
Date of Grant section below), an
additional 30% on the second
anniversary, and the remaining 50% on or
after the third anniversary. A Formula
Option will become exercisable in its
entirety upon the Eligible Director's
death, Disability, or attainment of age
70. Options will be forfeited to the
extent they are not then exercisable if
an Eligible Director resigns or fails to
be reelected as a director.
DATE OF GRANT The Date of Grant will be the date as of
which this Plan or the Administrator
grants an Award to a Participant, as
specified in the Plan or in the
Administrator's minutes.
EXERCISE PRICE The Exercise Price is the value of the
consideration that a Participant must
provide in exchange for one share of
Common Stock. The Administrator will
determine the Exercise Price under each
Award and may set the Exercise Price
without regard to the Exercise Price of
any other Awards granted at the same or
any other time. The Company may use the
consideration it receives from the
Participant for general corporate
purposes.
The Exercise Price per share for NQSOs
may not be less than 100% of the Fair
Market Value (as defined below) of a
share on the Date of Grant. If an
Option is intended to be an ISO, the
Exercise Price per share may not be less
than 100% of the Fair Market Value (on
the Date of Grant) of a share of Common
Stock covered by the Option; provided,
however, that if the Administrator
decides to grant an ISO to someone
covered by Sections 422(b)(6) and 424(d)
(as a more-than-10%-stockholder), the
Exercise Price of the Option must be at
least 110% of the Fair Market Value (on
the Date of Grant).
<PAGE>
The Administrator may satisfy any state
law requirements regarding adequate
consideration for Stock Grants by (i)
issuing Common Stock held as treasury
stock or (ii) charging the Recipients at
least the par value for the shares
covered by the Stock Grant. The
Administrator may designate that a
Recipient may satisfy (ii) above either
by direct payments or by the
Administrator's withholding from other
payments due to the Recipient.
FAIR MARKET Fair Market Value of a share of Common
VALUE Stock for purposes of the
Plan will be determined as follows:
If the Common Stock trades on a
national securities exchange, the
closing sale price on that date;
If the Common Stock does not trade
on any such exchange, the closing
sale price as reported by the
National Association of Securities
Dealers, Inc. Automated Quotation
System ("Nasdaq") for such date;
If no such closing sale price
information is available, the
average of the closing bid and
asked prices that Nasdaq reports
for such date; or
If there are no such closing bid
and asked prices, the average of
the closing bid and asked prices as
reported by any other commercial
service for such date.
For any date that is not a trading day,
the Fair Market Value of a share of
Common Stock for such date shall be
determined by using the closing sale
price or the average of the closing bid
and asked prices, as appropriate, for
the immediately preceding trading day.
The Fair Market Value will be deemed
equal to the IPO price for any Options
granted as of the date on which the
IPO's underwriters price the IPO or
granted on the following day before
trading opens in the Common Stock.
EXERCISABILITY The Administrator will determine the
times and conditions for exercise of or
purchase under each Award but may not
extend the period for exercise beyond
the tenth anniversary of its Date of
Grant (or five years for ISOs granted to
10% owners covered by Code Sections
422(b)(6) and 424(d)).
Awards will become exercisable at such
times and in such manner as the
Administrator determines and the Award
Agreement, if any, indicates; provided,
however, that the Administrator may, on
such terms and conditions as it
determines appropriate, accelerate the
time at which the Participant may
exercise any portion of an Award or at
which restrictions
<PAGE>
on Stock Grants
lapse. For Stock Grants, "exercise"
refers to acceptance of the Award or
lapse of restrictions, as appropriate in
context.
If the Administrator does not specify
otherwise, Options will become
exercisable and restrictions on Stock
Grants will lapse as to one-fourth of
the covered shares on each of the first
four anniversaries of the Date of Grant.
No portion of an Award that is
unexercisable at a Participant's
termination of employment will
thereafter become exercisable, unless
the Award Agreement provides otherwise,
either initially or by amendment.
CHANGE OF Upon a Change of Control (as defined
CONTROL below), all Options held by current
Employees, consultants, advisors,
independent contractors, Eligible
Officers and Eligible Directors will
become fully exercisable and all
restrictions on Stock Grants will lapse.
A Change of Control for this purpose
means the occurrence of any one or more
of the following events:
a person, entity, or group (other
than the Company, any Company
subsidiary, any Company benefit
plan, or any underwriter
temporarily holding securities for
an offering of such securities)
acquires ownership of more than 50%
of the undiluted total voting power
of the Company's then-outstanding
securities eligible to vote to
elect members of the Board
("Company Voting Securities");
consummation of a merger or
consolidation of the Company into
any other entity-unless the holders
of the Company Voting Securities
outstanding immediately before such
consummation, together with any
trustee or other fiduciary holding
securities under a Company benefit
plan, hold securities that
represent immediately after such
merger or consolidation at least
50% of the combined voting power of
the then outstanding voting
securities of either the Company or
the other surviving entity or its
parent; or
the stockholders of the Company
approve (i) a plan of complete
liquidation or dissolution of the
Company or (ii) an agreement for
the Company's sale or disposition
of all or substantially all the
Company's assets, and such
liquidation, dissolution, sale, or
disposition is consummated.
Even if other tests are met, a
Change of Control has not occurred
under any circumstance in which the
Company files for bankruptcy
protection or is reorganized
following a bankruptcy filing.
<PAGE>
The Adjustments Upon Changes in Capital
Stock provisions will also apply if the
Change of Control is a Substantial
Corporate Change (as defined in those
sections).
LIMITATION An Option granted to an Employee will be
ON ISOs an ISO only to the extent that
the aggregate Fair Market Value
(determined at the Date of Grant) of the
stock with respect to which ISOs are
exercisable for the first time by the
Optionee during any calendar year (under
the Plan and all other plans of the
Company and its subsidiary corporations,
within the meaning of Code Section
422(d)), does not exceed $100,000. This
limitation applies to Options in the
order in which such Options were
granted. If, by design or operation,
the Option exceeds this limit, the
excess will be treated as an NQSO.
METHOD OF To exercise any exercisable portion of
EXERCISE an Award, the Participant must:
Deliver a written notice of
exercise to the Assistant Secretary
of the Company designated by the
Board (or to whomever the
Administrator designates), in a
form complying with any rules the
Administrator may issue, signed by
the Participant, and specifying the
number of shares of Common Stock
underlying the portion of the Award
the Participant is exercising;
Pay the full Exercise Price, if
any, by cashier's or certified
check for the shares of Common
Stock with respect to which the
Award is being exercised, unless
the Administrator consents to
another form of payment (which
could include the use of Common
Stock); and
Deliver to the Administrator such
representations and documents as
the Administrator, in its sole
discretion, may consider necessary
or advisable.
Payment in full of the Exercise Price
need not accompany the written notice of
exercise provided the notice directs
that the stock certificates for the
shares issued upon the exercise be
delivered to a licensed broker
acceptable to the Company as the agent
for the individual exercising the Option
and at the time the stock certificates
are delivered to the broker, the broker
will tender to the Company cash or cash
equivalents acceptable to the Company
and equal to the Exercise Price.
If the Administrator agrees to allow an
Optionee to pay through tendering Common
Stock to the Company, the individual can
only tender stock they have held for at
least six months at the time of
surrender. Shares of stock offered as
payment will be valued, for purposes of
determining the extent to which the
Participant has paid the Exercise Price,
at their Fair Market Value on the date
of exercise. The Administrator may
also, in its
<PAGE>
discretion, accept
attestation of ownership of Common Stock
and issue a net number of shares upon
Option exercise.
AWARD No one may exercise an Award more than
EXPIRATION ten years after its Date of
Grant (or five years, for an ISO granted
to a more-than-10% stockholder). Unless
the Award Agreement provides otherwise,
either initially or by amendment, no one
may exercise an Award after the first to
occur of:
EMPLOYMENT The 90th day after the date of
TERMINATION termination of employment (other
than for death or Disability), where
termination of employment means the time
when the employer-employee or other
service providing relationship between
the Employee, consultant, independent
contractor, advisor or Eligible Officer
and the Company ends for any reason,
including retirement. Unless the Award
Agreement provides otherwise,
termination of employment does not
include instances in which the Company
immediately rehires an Employee as a
consultant, independent contractor or
advisor. The Administrator, in its sole
discretion, will determine all questions
of whether particular terminations or
leaves of absence are terminations of
employment;
DlSABILITY For Disability, the earlier of (i) the
first anniversary of the Participant's
termination of employment for Disability
and (ii) 30 days after the Participant
no longer has a Disability, where
"Disability" means the inability to
engage in any substantial gainful
activity by reason of any medically
determinable physical or mental
impairment that can be expected to
result in death or that has lasted or
can be expected to last for a continuous
period of not less than twelve months;
or
DEATH The date 24 months after the
Participant's death.
If exercise is permitted after
termination of employment, the Award
will nevertheless expire as of the date
that the former service provider
violates any covenant not to compete in
effect between the Company and such
person. In addition, an Optionee who
exercises an Option more than 90 days
after termination of employment with the
Company and/or an Eligible Subsidiary
will only receive ISO treatment to the
extent permitted by law, and becoming or
remaining an employee of another related
company (that is not an Eligible
Subsidiary) or an independent contractor
to the Company will not prevent loss of
ISO status because of the formal
termination of employment.
Nothing in this Plan extends the term of
an Award beyond the tenth anniversary of
its Date of Grant, nor does anything in
this Award Expiration section make an
Award exercisable that has not otherwise
become exercisable.
<PAGE>
AWARD Award Agreements will set forth the
AGREEMENT terms of each Award and will
include such terms and conditions,
consistent with the Plan, as the
Administrator may determine are
necessary or advisable. To the extent
the agreement is inconsistent with the
Plan, the Plan will govern. The Award
Agreements may contain special rules.
The Administrator may, but is not
required to, issue agreements for Stock
Grants.
STOCK SUBJECT Except as adjusted below under
TO PLAN Adjustments upon Changes in Capital Stock,
the aggregate number of shares of
Common Stock that may be issued
under the Awards (whether ISOs,
NQSOs, or Stock Grants) may not
exceed 20% percent of the total
number of shares of Common Stock
outstanding, determined immediately
after the grant of the Award;
the maximum number of shares that
may be subject to ISOs may not
exceed 600,000; and
the maximum number of shares that
may be granted under Awards for a
single individual in a calendar
year may not exceed 1,200,000.
(The individual maximum applies
only to Awards first made under
this Plan and not to Awards made in
substitution of a prior employer's
options or other incentives, except
as Code Section 162(m) otherwise
requires.)
The Common Stock will come from either
authorized but unissued shares or from
previously issued shares that the
Company reacquires, including shares it
purchases on the open market. If any
Award expires, is canceled, or
terminates for any other reason, the
shares of Common Stock available under
that Award will again be available for
the granting of new Awards (but will be
counted against that calendar year's
limit for a given individual).
No adjustment will be made for a
dividend or other right (except a stock
dividend) for which the record date
precedes the date of exercise.
The Participant will have no rights of a
stockholder with respect to the shares
of stock subject to an Award except to
the extent that the Company has issued
certificates for, or otherwise confirmed
ownership of, such shares upon the
exercise of the Award.
The Company will not issue fractional
shares pursuant to the exercise of an
Award, but the Administrator may, in its
discretion, direct the Company to make a
cash payment in lieu of fractional
shares.
<PAGE>
PERSON WHO During the Participant's lifetime, only
MAY EXERCISE the Participant or his duly
appointed guardian or personal
representative may exercise the Awards.
After his death, his personal
representative or any other person
authorized under a will or under the
laws of descent and distribution may
exercise any then exercisable portion of
an Award. If someone other than the
original recipient seeks to exercise any
portion of an Award, the Administrator
may request such proof as it may
consider necessary or appropriate of the
person's right to exercise the Award.
ADJUSTMENTS Subject to any required action by the
UPON CHANGES Company (which it shall
IN CAPITAL promptly take) or its stockholders, and
STOCK subject to the provisions of
applicable corporate law, if, after the
Date of Grant of an Award,
the outstanding shares of Common
Stock increase or decrease or
change into or are exchanged for a
different number or kind of
security because of any
recapitalization, reclassification,
stock split, reverse stock split,
combination of shares, exchange of
shares, stock dividend, or other
distribution payable in capital
stock, or
some other increase or decrease in
such Common Stock occurs without
the Company's receiving
consideration
the Administrator may make a
proportionate and appropriate adjustment
in the number of shares of Common Stock
underlying each Award, so that the
proportionate interest of the
Participant immediately following such
event will, to the extent practicable,
be the same as immediately before such
event. (This adjustment does not apply
to Common Stock that the Optionee has
already purchased nor to Stock Grants
that are already nonforfeitable, except
to the extent of similar treatment for
most stockholders.) Unless the
Administrator determines another method
would be appropriate, any such
adjustment to an Award will not change
the total price with respect to shares
of Common Stock underlying the
unexercised portion of the Award but
will include a corresponding
proportionate adjustment in the Award's
Exercise Price. The Administrator will
make a commensurate change to the
maximum number and kind of shares
provided in the Stock Subject to Plan
section.
Any issue by the Company of any class of
preferred stock, or securities
convertible into shares of common or
preferred stock of any class, will not
affect, and no adjustment by reason
thereof will be made with respect to,
the number of shares of Common Stock
subject to any Award or the Exercise
Price except as this Adjustments section
specifically provides. The grant of an
Award under the Plan will not affect in
any way the right or power of the
Company to make adjustments,
reclassifications, reorganizations or
changes of its capital or business
structure, or to merge
<PAGE>
or to consolidate, or to dissolve, liquidate,
sell, or transfer all or any part of its
business or assets.
SUBSTANTIAL Upon a Substantial Corporate Change, the
CORPORATE Plan and any unexercised
CHANGE Awards will terminate unless provision
is made in writing in connection
with such transaction for the assumption
or continuation of outstanding Awards,
or the substitution for such options or
grants of any options or grants covering
the stock or securities of a successor
employer corporation, or a parent or
subsidiary of such successor, with
appropriate adjustments as to the number
and kind of shares of stock and prices,
in which event the Awards will continue
in the manner and under the terms so
provided.
Unless the Administrator determines
otherwise, if an Award would otherwise
terminate under the preceding sentence,
Participants who are then Employees,
consultants, advisors, independent
contractors, Eligible Officers and
Eligible Directors will have the right,
at such time before the consummation of
the transaction causing such termination
as the Administrator reasonably
designates, upon such reasonable notice
as determined by the Administrator, to
exercise any unexercised portions of the
Award, whether or not they had
previously become exercisable. However,
unless the Administrator determines
otherwise, the acceleration will not
occur if it would render unavailable
"pooling of interest" accounting for any
reorganization, merger, or consolidation
of the Company.
A Substantial Corporate Change means:
the dissolution or liquidation of
the Company,
merger, consolidation, or
reorganization of the Company with
one or more corporations in which
the Company is not the surviving
corporation,
the sale of substantially all of
the assets of the Company to
another corporation, or
any transaction (including a merger
or reorganization in which the
Company survives) approved by the
Board that results in any person or
entity (other than any affiliate of
the Company as defined in Rule
144(a)(1) under the Securities Act,
any Company subsidiary, any Company
benefit plan, or any underwriter
temporarily holding securities for
an offering of such securities)
owning 100% of the combined voting
power of all classes of stock of
the Company.
<PAGE>
ELIGIBLE Eligible Subsidiary means each of the
SUBSIDIARY Company's Subsidiaries, except as
the Administrator otherwise specifies.
For ISO grants, Subsidiary means any
corporation (other than the Company) in
an unbroken chain of corporations
beginning with the Company if, at the
time an ISO is granted to a Participant
under the Plan, each corporation (other
than the last corporation in the
unbroken chain) owns stock possessing
50% or more of the total combined voting
power of all classes of stock in another
corporation in such chain. For ISO
purposes, Subsidiary also includes a
single-member limited liability company
included within the chain described in
the preceding sentence. For NQSOs, the
Administrator can use a different
definition of Subsidiary in its
discretion.
LEGAL The Company will not issue any shares of
COMPLIANCE Common Stock under an
Award until all applicable requirements
imposed by Federal and state securities
and other laws, rules, and regulations,
and by any applicable regulatory
agencies or stock exchanges, have been
fully met. To that end, the Company may
require the Participant to take any
reasonable action to comply with such
requirements before issuing such shares.
No provision in the Plan or action taken
under it authorizes any action that is
otherwise prohibited by Federal or state
laws.
The Plan is intended to conform to the
extent necessary with all provisions of
the Securities Act of 1933, as amended
(the "Securities Act"), and the
Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and all
regulations and rules the Securities and
Exchange Commission issues under those
laws. Notwithstanding anything in the
Plan to the contrary, the Administrator
must administer the Plan, and Awards may
be granted and exercised, only in a way
that conforms to such laws, rules, and
regulations. To the extent permitted by
applicable law, the Plan and any Awards
will be deemed amended to the extent
necessary to conform to such laws,
rules, and regulations.
PURCHASE FOR Unless a registration statement under
INVESTMENT the Securities Act covers the
AND OTHER shares of Common Stock a Participant
RESTRICTIONS receives upon exercise of his
Award, the Administrator may require, at
the time of such exercise or
receipt of a grant, that the Participant
agree in writing to acquire such shares
for investment and not for public resale
or distribution, unless and until the
shares subject to the Award are
registered under the Securities Act.
Unless the shares are registered under
the Securities Act, the Participant must
acknowledge:
that the shares purchased on
exercise of the Award are not so
registered,
that the Participant may not sell
or otherwise transfer the shares
unless:
<PAGE>
the shares have been
registered under the
Securities Act in connection
with the sale or transfer
thereof, or
counsel satisfactory to the
Company has issued an opinion
satisfactory to the Company
that the sale or other
transfer of such shares is
exempt from registration under
the Securities Act, and
such sale or transfer complies
with all other applicable
laws, rules, and regulations,
including all applicable
Federal and state securities
laws, rules, and regulations.
Additionally, the Common Stock, when
issued upon the exercise of an Award,
will be subject to any other transfer
restrictions, rights of first refusal,
and rights of repurchase set forth in or
incorporated by reference into other
applicable documents, including the
Company's articles or certificate of
incorporation, by-laws, or generally
applicable stockholders' agreements.
The Administrator may, in its sole
discretion, take whatever additional
actions it deems appropriate to comply
with such restrictions and applicable
laws, including placing legends on
certificates and issuing stop-transfer
orders to transfer agents and
registrars.
TAX The Participant must satisfy all
WITHHOLDING applicable Federal, state, and local
income and employment tax withholding
requirements before the Company will
deliver stock certificates upon the
exercise of an Award. The Company may
decide to satisfy the withholding
obligations through additional
withholding on salary or wages. If the
Company does not or cannot withhold from
other compensation, the Participant must
pay the Company, with a cashier's check
or certified check, the full amounts
required by withholding. Payment of
withholding obligations is due before
the Company issues shares with respect
to the Award. If the Administrator so
determines, the Participant may instead
satisfy the withholding obligations by
directing the Company to retain shares
from the Award exercise, by tendering
previously owned shares, or by attesting
to his ownership of shares (with the
distribution of net shares).
TRANSFERS, Unless the Administrator otherwise
ASSIGNMENTS, approves in advance in writing for
AND PLEDGES estate planning or other purposes, an
Award may not be assigned,
pledged, or otherwise transferred in any
way, whether by operation of law or
otherwise or through any legal or
equitable proceedings (including
bankruptcy), by the Participant to any
person, except by will or by operation
of applicable laws of descent and
distribution. If Rule 16b-3 of the
Exchange Act then applies to an Award,
the Participant may not
<PAGE>
transfer or
pledge shares of Common Stock acquired
under a Stock Grant or upon exercise of
an Option until at least six months have
elapsed from (but excluding) the Date of
Grant, unless the Administrator approves
otherwise in advance in writing. The
Administrator may, in its discretion,
expressly provide that a Participant may
transfer his Award without receiving
consideration to (i) members of his
immediate family (children,
grandchildren, or spouse); (ii) trusts
for the benefit of such family members;
or (iii) partnerships where the only
partners are such family members.
AMENDMENT OR The Board may amend, suspend, or
TERMINATION terminate the Plan at any time,
OF PLAN AND without the consent of the Participants
OPTIONS or their beneficiaries; provided
however, that no amendment will deprive
any Participant or beneficiary
of any previously declared Award.
Except as required by law or by the
Adjustments upon Changes in Capital
Stock section, the Board may not,
without the Participant's or
beneficiary's consent, modify the terms
and conditions of an Award so as to
adversely affect the Participant. No
amendment, suspension, or termination of
the Plan will, without the Participant's
or beneficiary's consent, terminate or
adversely affect any right or
obligations under any outstanding
Awards.
PRIVILEGES No Participant and no beneficiary or
OF STOCK other person claiming under or
OWNERSHIP through such Participant will have any
right, title, or interest in or to
any shares of Common Stock allocated or
reserved under the Plan or subject to
any Award except as to such shares of
Common Stock if any, already issued to
such Participant.
EFFECT ON Whether exercising or receiving an Award
OTHER PLANS causes the Participant to
accrue or receive additional benefits
under any pension or other plan is
governed solely by the terms of such
other plan.
LIMITATIONS Notwithstanding any other provisions of
ON LIABILITY the Plan, no individual
acting as an agent of the Company shall
be liable to any Participant, former
Participant, spouse, beneficiary, or any
other person for any claim, loss,
liability, or expense incurred in
connection with the Plan, nor shall such
individual be personally liable because
of any contract or other instrument he
executes in such other capacity. The
Company will indemnify and hold harmless
each agent of the Company to whom any
duty or power relating to the
administration or interpretation of the
Plan has been or will be delegated,
against any cost or expense (including
attorneys' fees) or liability (including
any sum paid in settlement of a claim
with the Administrator's approval)
arising out of any act or omission to
act concerning this Plan unless arising
out of such person's own fraud or bad
faith.
<PAGE>
NO Nothing contained in this Plan
EMPLOYMENT constitutes an employment contract
CONTRACT between the Company and the
Participants. The Plan does not give
any Participant any right to be retained in
the Company's employ, nor does it
enlarge or diminish the Company's right
to end the Participant's employment.
APPLICABLE The laws of the State of Delaware (other
LAW than its choice of law provisions)
govern this Plan and its interpretation.
DURATION Unless the Board extends the Plan's
OF PLAN term, the Administrator may not grant
Awards after June 8, 2008. The Plan
will then terminate but will continue to
govern unexercised and unexpired Awards.
Exhibit 5
November 1, 1999
School Specialty, Inc.
1000 North Bluemound Drive
Appleton, WI 54914
Ladies and Gentlemen:
We have acted as your counsel in connection with
the preparation of a Registration Statement on Form S-8
(the "Registration Statement") to be filed with the
Securities and Exchange Commission relating to the
offer and sale by you of up to 571,685 shares of common
stock, $.001 par value (the "Shares"), of School
Specialty, Inc., a Delaware corporation (the
"Company"), issuable pursuant to the Company's 1998
Stock Incentive Plan (the "Plan").
We have examined: (a) the Plan, the Plan's
prospectus and the Registration Statement, (b) the
Company's Restated Certificate of Incorporation and
Amended and Restated Bylaws, (c) certain resolutions of
the Company's Board of Directors and (d) such other
proceedings, documents and records as we have deemed
necessary to enable us to render this opinion.
Based upon the foregoing, we are of the opinion
that the Shares, upon issuance in accordance with the
Registration Statement, will be duly authorized and
validly issued, fully paid and nonassessable, subject
to Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law ("WBCL").
Section 180.0622(2)(b) of the WBCL provides that
shareholders of a corporation may be assessed up to the
par value of their shares to satisfy the obligations of
such corporation to its employees for services
rendered, but not exceeding six months service in the
case of any individual employee. Certain Wisconsin
courts have interpreted "par value" to mean the full
amount paid by the purchaser of shares upon issuance
thereof and that such statute applies not only to
shareholders of domestic corporations but also to
shareholders of foreign corporations licensed to do
business in Wisconsin.
We consent to the use of this opinion as an
exhibit to the Registration Statement. In giving this
consent, however, we do not admit that we are "experts"
within the meaning of Section 11 of the Securities Act
of 1933, as amended, or within the category of persons
whose consent is required by Section 7 of said Act.
Very truly yours,
/s/ Godfrey & Kahn, S.C.
GODFREY & KAHN, S.C.
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by
reference in this Registration Statement on Form S-8
of our report dated May 28, 1999 relating to the
consolidated financial statements and financial
statement schedule, which appears in School
Specialty, Inc.'s Annual Report on Form 10-K for the
fiscal year ended April 24, 1999.
/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Minneapolis, Minnesota
November 1, 1999.
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in
the Registration Statement (Form S-8) pertaining to
the School Specialty, Inc. Amended and Restated 1998
Stock Incentive Plan of our report dated January 30,
1998 with respect to the financial statements of
Select Service & Supply Co., Inc., included in the
Current Report (Form 8-K/A) of School Specialty, Inc.
dated February 9, 1999.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Hackensack, New Jersey
November 1, 1999.
Exhibit 24
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, with the power of substitution, the true
and lawful attorney-in-fact of the undersigned to sign
for him in his name, place and stead, in any and all
capacities, the Registration Statement on Form S-8 of
School Specialty, Inc. relating to the School
Specialty, Inc. Amended and Restated 1998 Stock
Incentive Plan, and any and all amendments (including
post-effective amendments) and/or supplements to said
Form S-8, generally to do all such things in his name
and behalf in his capacity as a director to enable
School Specialty, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming his signature as it may
be signed by said attorney-in-fact to said Form S-8 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 18th day of September, 1999.
/s/ Jonathan J. Ledecky
--------------------------
Jonathan J. Ledecky
<PAGE>
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, with the power of substitution, the true
and lawful attorney-in-fact of the undersigned to sign
for her in her name, place and stead, in any and all
capacities, the Registration Statement on Form S-8 of
School Specialty, Inc. relating to the School
Specialty, Inc. Amended and Restated 1998 Stock
Incentive Plan, and any and all amendments (including
post-effective amendments) and/or supplements to said
Form S-8, generally to do all such things in her name
and behalf in her capacity as a director to enable
School Specialty, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming her signature as it may
be signed by said attorney-in-fact to said Form S-8 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 18th day of September, 1999.
/s/ Rochelle Lamm Wallach
----------------------------
Rochelle Lamm Wallach
<PAGE>
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, with the power of substitution, the true
and lawful attorney-in-fact of the undersigned to sign
for him in his name, place and stead, in any and all
capacities, the Registration Statement on Form S-8 of
School Specialty, Inc. relating to the School
Specialty, Inc. Amended and Restated 1998 Stock
Incentive Plan, and any and all amendments (including
post-effective amendments) and/or supplements to said
Form S-8, generally to do all such things in his name
and behalf in his capacity as a director to enable
School Specialty, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming his signature as it may
be signed by said attorney-in-fact to said Form S-8 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 21st day of September, 1999.
/s/ Jerome M. Pool
----------------------
Jerome M. Pool
<PAGE>
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, with the power of substitution, the true
and lawful attorney-in-fact of the undersigned to sign
for him in his name, place and stead, in any and all
capacities, the Registration Statement on Form S-8 of
School Specialty, Inc. relating to the School
Specialty, Inc. Amended and Restated 1998 Stock
Incentive Plan, and any and all amendments (including
post-effective amendments) and/or supplements to said
Form S-8, generally to do all such things in his name
and behalf in his capacity as a director to enable
School Specialty, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming his signature as it may
be signed by said attorney-in-fact to said Form S-8 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 18th day of September, 1999.
/s/ David J. Vander Zanden
-----------------------------
David J. Vander Zanden
<PAGE>
DIRECTOR'S POWER OF ATTORNEY
The undersigned director of School Specialty,
Inc., a Delaware corporation, hereby constitutes and
designates each of Daniel P. Spalding and Mary M.
Kabacinski, with the power of substitution, the true
and lawful attorney-in-fact of the undersigned to sign
for him in his name, place and stead, in any and all
capacities, the Registration Statement on Form S-8 of
School Specialty, Inc. relating to the School
Specialty, Inc. Amended and Restated 1998 Stock
Incentive Plan, and any and all amendments (including
post-effective amendments) and/or supplements to said
Form S-8, generally to do all such things in his name
and behalf in his capacity as a director to enable
School Specialty, Inc. to comply with the provisions of
the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission,
hereby ratifying and confirming his signature as it may
be signed by said attorney-in-fact to said Form S-8 and
any and all amendments (including post-effective
amendments) and/or supplements thereto.
Dated this 18th day of September, 1999.
/s/ Leo C. McKenna
------------------------
Leo C. McKenna
