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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
VARITRONIC SYSTEMS, INC.
a Minnesota corporation
(Name of Issuer)
Common Stock, $.01 Par Value Per Share
(Title of Class of Securities)
922247-10-1
(CUSIP Number)
Donald P. DeLuca
Senior Vice President, Treasurer and Assistant Secretary
W. H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
(414) 358-6600
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
With a copy to:
Conrad G. Goodkind, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 277-5305
February 27, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [X].
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SCHEDULE 13D
CUSIP No. 922247-10-1
1. Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
W. H. Brady Co.
39-0178960
2. Check the Appropriate Box if a Member of a Group
(a) [ ] (b) [ ]
3. SEC Use Only
4. Source of funds
WC
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6. Citizenship or Place of Organization
Wisconsin
Number of Shares Beneficially Owned by Each Reporting Person With:
7. Sole Voting Power
461,585
8. Shared Voting Power
0
9. Sole Dispositive Power
461,585
10. Shared Dispositive Power
0
11. Aggregate Amount Beneficially Owned by Each Reporting Person
461,585
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
13. Percent of Class Represented by Amount in Row (11)
19.9% of Currently Issued Shares (16.6% of Shares if the Option is
exercised)
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14. Type of Reporting Person
HC
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ITEM 1. SECURITY AND ISSUER.
Name of Issuer and Address of Principal Executive Offices:
Varitronic Systems, Inc.
300 Interchange Tower
300 South Highway 169
Minneapolis, Minnesota 55426
Security to Which This Statement Relates:
Common Stock, $.01 Par Value, per Share
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f). This Schedule 13D is filed on behalf of W. H. Brady Co., a
Wisconsin corporation ("Brady"). The principal executive office of Brady is
located at 6555 West Good Hope Road, Milwaukee, Wisconsin 53223. Brady
develops, manufactures and sells a broad range of stock and customized products
employing its knowledge of surface chemistry, principally in adhesives,
coatings and graphics technologies. Brady's products include over 20,000 stock
items and a wide variety of custom items, which are used primarily to identify,
inform or instruct, including pressure-sensitive identification, labeling and
marking systems for electrical wires and pipes; self-bonding nameplates, safety
and instructional signs and specialized tapes used in audio, video and computer
applications. Brady's products are sold by a direct sales force and mail order
sales, and are used in a variety of industrial, commercial, governmental,
public utility, medical equipment, computer and consumer product markets,
including original equipment manufacturers. Brady and its subsidiaries operate
12 manufacturing facilities in the United States and six foreign countries.
Domestic and international operations are conducted through its Identification
Systems and Specialty Tapes Group, Signmark Group and Seton Group. Domestic
operations are located in Connecticut and Wisconsin. International operations
are located in Australia, Belgium, Canada, England, France, Germany, Hong Kong,
Italy, Japan, Korea, New Zealand, Singapore, Spain and Sweden.
Pursuant to General Instruction C of Schedule 13D, the names, business
addresses, principal occupations and citizenship of the executive officers and
directors of Brady are set forth in Annex A hereto and are incorporated herein
by reference.
(d) and (e). During the last five years, Brady and, to the knowledge of Brady,
Brady's executive officers and directors have not (i) been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Concurrently with entering into the Merger Agreement (defined in Item 4 below),
Brady was granted the Option for up to 19.9% of the shares of Common Stock
(defined in Item 4 below). If Brady wishes to exercise the Option, Brady will
use existing working capital to fund the exercise price of the Option.
ITEM 4. PURPOSE OF THE TRANSACTION.
Varitronic Systems, Inc. (the "Company"), Brady, Brady USA, Inc., a Wisconsin
corporation and wholly-owned subsidiary of Brady, and VSI Acquisition Co., a
Minnesota corporation and wholly-owned subsidiary of Brady USA, Inc., have
entered into an Agreement and Plan of Merger, dated February 27, 1996 (the
"Merger Agreement"), which provides for a merger of VSI Acquisition Co. and the
Company (the "Transaction") as soon as practicable after the purchase of shares
pursuant to Brady's offer to purchase all of the shares of Company common stock
(upon the terms and conditions of the offer to purchase and in the related
letter of transmittal, which together constitute the "Offer"). The
Transaction, which was approved by the Boards of Directors of the constituent
companies, is expected to close shortly after all of the conditions to the
consummation of the Transaction are met or waived.
The Merger Agreement is incorporated herein by reference to Exhibit (c)(1) to
Brady's Schedule 14D-1, as filed with the Securities and Exchange Commission
(the "SEC") on February 29, 1996. The description of the Merger Agreement set
forth herein does not purport to be complete and is qualified in its entirety
by the provisions of the Merger Agreement.
The Merger Agreement provides that, upon the terms and subject to the
conditions of the Merger Agreement, and in accordance with the Minnesota
Business Corporations Act, VSI Acquisition Co. shall be merged with and into
the Company. Following the merger, the separate corporate existence of VSI
Acquisition Co. shall cease and the Company shall continue as the surviving
corporation and shall succeed to and assume all the rights and obligations of
VSI Acquisition Co. in accordance with the Minnesota Business Corporations Act
and the Merger Agreement. The articles of incorporation of the Company shall
become the articles of incorporation of the surviving corporation, at least a
majority of the directors of the surviving corporation shall be nominees of
Brady, and the officers of the Company shall be the officers of the surviving
corporation, in each case until their successors are chosen.
Concurrently with entering into the Merger Agreement, Brady and the Company
entered into a stock option agreement granting Brady an irrevocable option to
purchase up to that number of shares of common stock of the Company which
equals 19.9% of the number of shares of common stock of the Company outstanding
on February 27, 1996 (the "Option Agreement"). Specifically, under the Option
Agreement, the Company granted Brady an irrevocable option to purchase (the
"Option") shares of common stock of the Company equal to up to 19.9% of shares
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of the Company's common stock outstanding on the date of the Option, which as
of the date hereof equals 461,580 shares (subject to adjustment for changes in
capitalization) of the Company common stock at an exercise price of $17.50 per
share. The exercise price is payable in cash. Brady may request the Company
to repurchase from Brady all or any portion of the acquired shares of the
Company common stock at $17.50 per share.
The Option is intended to increase the likelihood that the Offer and Merger
will be consummated in accordance with the terms of the Merger Agreement. The
Option may be exercised, in whole or in part, at any time. The Option will
terminate upon the earlier of (i) the effective time of the merger or (ii)
December 31, 1996. Notwithstanding the foregoing, the Option cannot be
exercised if Brady is in material breach of any of its material representations
or warranties or in material breach of its material covenants or agreements
contained in the Merger Agreement.
The Option Agreement is incorporated herein by reference to Exhibit (c)(1) of
the Schedule 14D-1. The description of the Option Agreement set forth herein
does not purport to be complete and is qualified in its entirety by the
provisions of the Option Agreement.
Prior to entering into the Option, Brady owned 5 shares of Company common
stock. Except pursuant to the terms of the Option Agreement, the Merger
Agreement, and set forth in Schedule 14D-1 (including the offer to purchase)
filed on February 29, 1996, Brady has no plans or proposals which would result
in the acquisition or disposition of the Company common stock or any other
action enumerated in Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b). Pursuant to the Option Agreement, Brady has the right to acquire
461,580 shares (subject to adjustment for changes in capitalization) of the
Company common stock, representing 19.9% of the outstanding shares of such
Common Stock on February 27, 1996, as computed in accordance with Rule
13d-3(d)(1)(i) under the Securities Exchange Act of 1934. If the Option is
exercised and Brady purchases the Company common stock, shares of common stock
acquired upon exercise will be acquired by Brady with sole voting and
dispositive power. Prior to entering into the Option, Brady owned 5 shares of
the Company.
(c). Except for the execution and delivery of the Option Agreement and the
Merger Agreement, there have been no transactions by Brady with respect to the
Company common stock during the 60 days preceding the date of this Schedule
13D.
(d). None.
(e). Not Applicable.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Other than the Merger Agreement and the Option Agreement (see descriptions of
each in Item 4 above), which are included or incorporated by reference in this
Schedule 13D, and agreements referred to or contained therein, there are no
contracts, arrangements, understandings or relationships between Brady and any
other person, or, to the knowledge of Brady, among any of Brady's executive
officers and directors or between any of Brady's executive officers and
directors and any other person, with respect to any securities of the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Brady (Commission File No. 0-12730) hereby incorporates into this Schedule the
following exhibits by reference to the filing set forth below:
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit No.
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<S> <C>
1 Offer to Purchase, dated February 29, 1996. (Exhibit
(a)(1) to Schedule 14D-1)
2 Letter of Transmittal, dated February 29, 1996.
(Exhibit (a)(2) to Schedule 14D-1)
3 Notice of Guaranteed Delivery. (Exhibit (a)(3) to
Schedule 14D-1)
4 Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees. (Exhibit (a)(4) to
Schedule 14D-1)
5 Letter to Clients from Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees. (Exhibit
(a)(5) to Schedule 14D-1)
6 Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(Exhibit (a)(6) to Schedule 14D-1)
7 Text of Press Release, dated February 27, 1996.
(Exhibit (a)(7) to Schedule 14D-1)
8 Summary Advertisement, dated February 29, 1996.
(Exhibit (a)(8) to Schedule 14D-1)
9 Agreement and Plan of Merger, dated as of February
27, 1996, among the Company, VSI Acquisition Co.,
Brady USA, Inc., and Brady and Option Agreement.
(Exhibit (c)(1) to Schedule 14D-1)
10 Schedule 14D-1 filed by Brady on February 29, 1996.
</TABLE>
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: March 6, 1996 W.H. Brady Co.
By: /s/ Thomas E. Scherer
----------------------------
Thomas E. Scherer
Vice President and Controller
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ANNEX A
INFORMATION RELATING TO
EXECUTIVE OFFICERS AND DIRECTORS
OF W. H. BRADY CO.
The following is a list of the executive officers and directors of W. H.
Brady Co. as of the date of this Schedule 13D. To the knowledge of W. H. Brady
Co., all of the following executive officers and directors are citizens of the
United States. The business address for each of the executive officers is 6555
West Good Hope Road, Milwaukee, Wisconsin 53233.
Executive Officers:
Name Brady Office
- ---- -------------
Katherine M. Hudson President, Chief Executive
Officer and Director
Donald P. DeLuca Senior Vice President,
Treasurer, Assistant
Secretary and Director
Mary T. Arnold Vice President
Richard L. Fisk Vice President
David R. Hawke Vice President
Peter J. Lettenberger Secretary and Director
David W. Schroeder Vice President
James M. Sweet Vice President
Directors:
Name Business Address
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Katherine M. Hudson W. H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
Donald P. DeLuca W. H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
William H. Brady, III Investor
c/o W.H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
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Directors:
Elizabeth B. Lurie President and Administrator
W. H. Brady Foundation
c/o W.H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
Robert C. Buchanan President and CEO
Fox Valley Corporation
c/o W.H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
Roger D. Pierce President and CEO
Valuation Research Corp.
c/o W.H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
Richard A. Bemis President
Bemis Manufacturing Company
c/o W.H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
Frank W. Harris Professor of Polymer Science
University of Akron
c/o W.H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
Gary E. Nei Chairman
B & B Publishing
c/o W.H. Brady Co.
6555 West Good Hope Road
Milwaukee, Wisconsin 53233
Peter J. Lettenberger Partner
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
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W. H. BRADY CO.
SCHEDULE 13D
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.
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<S> <C>
1 Offer to Purchase, dated February 29, 1996. (Exhibit
(a)(1) to Schedule 14D-1)*
2 Letter of Transmittal, dated February 29, 1996.
(Exhibit (a)(2) to Schedule 14D-1)*
3 Notice of Guaranteed Delivery. (Exhibit (a)(3) to
Schedule 14D-1)*
4 Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees. (Exhibit (a)(4) to
Schedule 14D-1)*
5 Letter to Clients from Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees. (Exhibit
(a)(5) to Schedule 14D-1)*
6 Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(Exhibit (a)(6) to Schedule 14D-1)*
7 Text of Press Release, dated February 27, 1996.
(Exhibit (a)(7) to Schedule 14D-1)*
8 Summary Advertisement, dated February 29, 1996.
(Exhibit (a)(8) to Schedule 14D-1)*
9 Agreement and Plan of Merger, dated as of February
27, 1996, among the Company, VSI Acquisition Co.,
BUSA, and Brady and Stock Option Agreement. (Exhibit
(c)(1) to Schedule 14D-1)*
10 Schedule 14D-1 filed by Brady on February 29, 1996.*
</TABLE>
* Previously filed with SEC.
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