<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
THE ARISTOTLE CORPORATION
(Name of Registrant as Specified In Its Charter)
____________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE>
[COMPANY (ARISTOTLE) LOGO APPEARS HERE]
October 21, 1996
Dear Stockholder,
You are cordially invited to attend the 1996 Annual Meeting of Stockholders
of The Aristotle Corporation to be held at 2:00 p.m. on Thursday, November 21,
1996 at the New Haven Lawn Club, 193 Whitney Avenue, New Haven, Connecticut.
At the Annual Meeting, two persons will be elected to the Board of
Directors. In addition, the Company will ask the Stockholders to approve the
Company's plan to continue to pay the annual retainer that it pays to its non-
employee Directors in Common Stock and to ratify the appointment of Arthur
Andersen LLP as the Company's independent public accountants. The Board of
Directors recommends the approval of each of these proposals. Such other
business will be transacted as may properly come before the Annual Meeting.
It is very important that your shares of Common Stock be represented at the
Annual Meeting. Whether or not you plan to attend the Annual Meeting, please
complete the accompanying form of proxy and return such form of proxy in the
enclosed postage prepaid envelope. If you attend the Annual Meeting, you may
revoke the proxy given on such form and vote in person if you wish, even if you
have previously returned your form of proxy.
I look forward to seeing you at the meeting.
Sincerely,
/s/ Paul McDonald
Paul McDonald
Chief Financial Officer
and Secretary
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY PROMPTLY.
<PAGE>
[COMPANY (ARISTOTLE) LOGO APPEARS HERE]
NOTICE OF 1996 ANNUAL MEETING OF STOCKHOLDERS
---------------------------------------------
TO BE HELD ON NOVEMBER 21, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders
(the "Annual Meeting") of The Aristotle Corporation (the "Company") will be held
at 2:00 p.m. on Thursday, November 21, 1996 at the New Haven Lawn Club, 193
Whitney Avenue, New Haven, Connecticut. The purpose of the Annual Meeting is:
(1) To elect two directors for three-year terms and until
their successors are duly elected and qualified;
(2) To approve the Company's plan to continue to pay the
annual retainer that it pays to its non-employee
Directors in Common Stock of the Company;
(3) To ratify the appointment by the Board of Directors of
Arthur Andersen LLP as independent public accountants of
the Company for the fiscal year ending June 30, 1997;
and
(4) To consider and take action upon any other matters that
may properly come before the Annual Meeting or any
adjournment or postponement thereof.
It is not anticipated that any other matter will be brought before the
1996 Annual Meeting. If, however, other matters are presented, proxies will be
voted in accordance with the best judgment of the proxy holders.
The Board of Directors has fixed the close of business on October 7,
1996 as the record date for the determination of stockholders entitled to notice
of, and to vote at, the Annual Meeting or any adjournment or postponement
thereof.
By Order of the Board of Directors,
/s/ Paul McDonald
Paul McDonald
Chief Financial Officer
and Secretary
October 21, 1996
<PAGE>
THE ARISTOTLE CORPORATION
78 Olive Street
New Haven, Connecticut 06511
(203) 867-4090
----------------------
PROXY STATEMENT
----------------------
1996 Annual Meeting of Stockholders to be held on
November 21, 1996
_____________________________
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board of Directors") of The Aristotle
Corporation (the "Company"), a Delaware corporation, of proxies, in the
accompanying form, to be used at the 1996 Annual Meeting of Stockholders to be
held at the New Haven Lawn Club, 193 Whitney Avenue, New Haven, Connecticut on
November 21, 1996 at 2:00 p.m., and at any adjournments or postponements thereof
(the "Annual Meeting" or the "Meeting").
Where the Stockholder specifies a choice on the proxy as to how his or
her shares are to be voted on a particular matter, the shares will be voted
accordingly. If no choice is specified, the shares will be voted FOR the
election of the two nominees for director named herein, FOR the Company's plan
to pay the annual retainer that it pays to its non-employee Directors in its
common stock, par value $.01 per share ("Common Stock"), and FOR the
ratification of the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending June 30, 1997
(collectively, the "Proposals"). Shares represented by valid proxies in the
form enclosed, received in time for use at the Meeting and not revoked at or
prior to the Meeting, will be voted at the Meeting.
A Stockholder may revoke his or her proxy at any time prior to its
use: (i) by delivering to the Secretary of the Company at or before the Annual
Meeting a signed notice of revocation or a later dated signed proxy; or (ii) by
attending the Annual Meeting, notifying the Secretary, and voting in person.
Attendance at the Annual Meeting will not in itself constitute the revocation of
a proxy.
The presence at the Annual Meeting, in person or by proxy, of the
holders of one-third of the Company's issued and outstanding Common Stock on the
Record Date is necessary to constitute a quorum. All Stockholders who deliver
properly executed and dated proxies to the Company prior to the date of the
Annual Meeting will be deemed present at the Annual Meeting regardless of
whether such proxies are marked to direct the proxy holders to vote for or
against, or to abstain from voting on, the Proposals, or are not marked to
indicate any voting direction. The approval of Proposal 1 requires the
affirmative vote of a plurality of the votes cast at the Annual Meeting. The
approval of Proposals 2 and 3 requires the affirmative vote of a majority of the
votes cast at the Annual Meeting. With respect to the tabulation of votes on
any matter, abstentions are treated as votes against a proposal, while broker
non-votes have no effect on the vote.
<PAGE>
The Board of Directors has fixed the close of business on October 7,
1996 as the record date (the "Record Date") for the determination of holders of
outstanding shares of Common Stock entitled to notice of and to vote at the
Annual Meeting. As of the Record Date, there were 1,104,011 shares of Common
Stock outstanding and entitled to vote at the Annual Meeting. Each holder of
record of Common Stock on the Record Date is entitled to cast one vote per share
of Common Stock, in person or by proxy, on the Proposals. In addition, as of
the Record Date, an aggregate of 249,664 shares of Preferred Stock of the
Company (the "Preferred Stock") were outstanding. The Preferred Stock is
divided into Series A, B, C and D and is entitled to cast one vote per share and
to vote with the Common Stock as one class on all matters other than the
election of directors and the appointment of accountants. The Common Stock and
the Preferred Stock constitute the only outstanding capital stock of the
Company.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by the Company. In
addition, the Company will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock of the Company for their expenses
in forwarding proxy material to such beneficial owners. Solicitation of proxies
by mail may be supplemented by telephone, telegram, telex and personal
solicitation by the directors, officers or employees of the Company. No
additional compensation will be paid for such solicitation.
This Proxy Statement and the accompanying proxy are being mailed on or
about October 21, 1996 to all Stockholders entitled to notice of and to vote at
the Meeting.
The Annual Report to Stockholders for the fiscal year ended June 30,
1996 is being mailed to the Stockholders with this Proxy Statement, but does not
constitute a part hereof.
-2-
<PAGE>
ELECTION OF DIRECTORS
(Proposal 1)
The Amended Bylaws of the Company provide that the number of directors
shall not be less than eight nor more than 15, as fixed by the Board of
Directors. The Amended and Restated Certificate of Incorporation and the Amended
Bylaws of the Company provide that the directors are divided into three classes,
as equal in number as possible, with terms expiring in successive years.
Directors are elected for terms of three years and until their successors are
elected and qualified. At the Annual Meeting, three directors will be elected
for three-year terms.
As of the date of the last annual meeting, there were ten (10)
directorships. Two directors, Mary Jane Burt and Marcus R. McCraven, will
resign from the Board of Directors on November 21, 1996 prior to the Annual
Meeting. Mr. McCraven has reached the mandatory retirement age for directors.
Ms. Burt is leaving to spend more time on her increased business
responsibilities. Effective November 21, 1996, the Board has reduced the number
of directorships from ten (10) to eight (8).
Pursuant to a Capital Contribution Agreement (the "Capital
Contribution Agreement") dated November 19, 1993 between the Company, Aristotle
Sub, Inc. ("ASI"), The Strouse, Adler Company ("Strouse") and the former
shareholders of Strouse, in which the Company acquired indirect ownership of
Strouse (the "Acquisition"), the Company agreed to appoint Alfred A. Kniberg and
John C. Warfel to the Board of Directors.
Information as to Nominees and Continuing Directors
It is the intention of the persons named in the proxy to vote the
shares represented by each properly executed proxy for the election as director
of all of the persons named below as nominees, unless contrary instructions are
given on the proxy. The Board of Directors believes that all of the nominees
will stand for election and will serve if elected. However, if any of the
persons nominated by the Board of Directors fail to stand for election or
becomes unable to accept election, the proxies will be voted for the election of
such other person or persons as a majority of the Board of Directors may
recommend.
The following table sets forth the names of the Board of Directors'
two nominees for election as directors. Also shown is certain other information,
some of which has been obtained from the Company's records and some of which has
been supplied by the nominees and continuing directors, with respect to each
nominee's or director's principal occupation or employment during the past five
years, his or her age at October 21, 1996, the periods during which he or she
has served as a director of the Company and the positions currently held with
the Company.
<TABLE>
<CAPTION>
Director of the Positions Held with
Nominees Age Company Since the Company
-------- --- --------------- -------------------
<S> <C> <C> <C>
Barry R. Banducci 60 1993 Director
Daniel J. Miglio 56 1990 Director
</TABLE>
Barry R. Banducci has been self-employed as an investor/consultant since
February 1994, having retired from The Equion Corporation, a manufacturer of
automotive/industrial-related products, in
-3-
<PAGE>
January 1994. Mr. Banducci served as the President, the Chief Executive Officer
and a director of The Equion Corporation prior to his retirement in 1994. Mr.
Banducci serves as the Chairman of the Board of Directors of TransPro, Inc., a
publicly-held manufacturer of automotive-related products.
Daniel J. Miglio is the Chairman and Chief Executive Officer of Southern
New England Telecommunications Corporation ("SNET"), a publicly-held
telecommunications company. He has been employed by SNET since 1962 and has
previously served as its President and the Senior Vice President of Finance and
Planning. Mr. Miglio is the Chairman and Chief Executive Officer of Southern New
England Telephone Company, a subsidiary of SNET. Mr. Miglio also serves as a
director of SNET.
<TABLE>
<CAPTION>
Director of the Positions Held with
Continuing Directors Age Company Since the Company
- -------------------- --- --------------- -------------------
<S> <C> <C> <C>
Directors with terms
expiring in 1997:
Robert L. Fiscus 59 1991 Director
Betsy Henley-Cohn 44 1993 Director
John C. Warfel 44 1994 Director
Directors with terms
expiring in 1998:
John J. Crawford 51 1989 Director, President,
Chief Executive
Officer and Chairman
of the Board
Alfred A. Kniberg 53 1994 Director and
President and
Chief Operating
Officer of Strouse
Sharon M. Oster 48 1992 Director
</TABLE>
John J. Crawford has been President and Chief Executive Officer of the
Company since April 2, 1990 and Chairman of the Board since April 1993. Since
July 1994, Mr. Crawford has served the Company in a part-time capacity. Mr.
Crawford is also the Chief Executive Officer of the Regional Water Authority, a
utility located in New Haven, Connecticut. Mr. Crawford is also a member of the
Board of Directors of Webster Financial Corporation, a savings and loan holding
company.
Robert L. Fiscus is President and Chief Financial Officer of The United
Illuminating Company, a publicly-held electric utility company, where he
previously served as Executive Vice President and Chief Financial Officer. Mr.
Fiscus has been employed by The United Illuminating Company since 1972. Mr.
Fiscus is also a member of the Board of Directors of The United Illuminating
Company.
Betsy Henley-Cohn is Chairperson of Birmingham Utilities, Inc., a water
utility in Ansonia, Connecticut, and Joseph Cohn & Son, Inc., in New Haven,
Connecticut. Ms. Henley-Cohn has been employed by Birmingham Utilities, Inc.
since 1993 and by Joseph Cohn & Son, Inc. since 1978. She also serves as a
director of The United Illuminating Company.
Alfred A. Kniberg has been the President and Chief Operating Officer of
Strouse since 1989. Prior to joining Strouse, Mr. Kniberg spent 23 years with
Playtex Apparel, Inc. ("Playtex"), serving in various senior sales and marketing
positions. Immediately prior to joining Strouse, Mr. Kniberg held
-4-
<PAGE>
positions as Vice President/General Manager of Playtex International Division
and for U.S. Private Label. In addition to appointing Mr. Kniberg as a director
pursuant to the Capital Contribution Agreement, pursuant to the terms of an
Employment Agreement between Mr. Kniberg and the Company, the Company has agreed
to nominate Mr. Kniberg to the Board of Directors through the term of his
Employment Agreement, currently expiring on December 31, 1998.
Sharon M. Oster has been a Professor of Economics at the School of
Organization and Management, Yale University since 1982. Ms. Oster is a director
of two publicly-held companies, Health Care REIT, a real estate investment
company, and TransPro, Inc., a manufacturer of automotive/industrial-related
products.
John C. Warfel has been the Senior Vice President, Administration and
Finance of Starter Corporation, a leading sports apparel manufacturer since
March 1995. He has been employed by Starter Corporation since 1988 and has
previously served as its Chief Financial Officer.
Board of Directors' Committees and Nominations by Stockholders
To select nominees for election as directors, the Board of Directors of
the Company has appointed a Nominating Committee, which has made its nominations
for the Annual Meeting. The Nominating Committee met once (1) during the year
ended June 30, 1996. The members of this committee were Ms. Henley-Cohn and
Messrs. Crawford and Kniberg. The Company's Amended Bylaws provide that to be
eligible for nomination as a director of the Company, a person must be a
resident of the State of Connecticut or have been previously a resident for at
least three years. The Amended Bylaws further provide that nominations of
persons for election to the Board of Directors may be made by the Board of
Directors, or by any stockholder entitled to vote for the election of directors
at the meeting who provides timely notice in writing to the Secretary of the
Company and who complies with the requirement to set forth certain information
specified in Article III, Section 13 of the Amended Bylaws concerning each
person the stockholder proposes to nominate for election and the nominating
stockholder. To be timely, notice must be delivered to, or mailed to and
received at, the principal executive offices of the Company not less than 30
days nor more than 90 days prior to the date of the meeting, provided that at
least 45 days' notice or prior public disclosure of the date of the meeting is
given or made to stockholders. Public disclosure of the date of the Annual
Meeting was made by issuance of a press release on October 7, 1996. No
stockholder nominations for directors have been submitted in connection with the
Annual Meeting.
The Board of Directors has appointed a standing Audit Committee, which
during the year ended June 30, 1996 conducted three (3) meetings. The members of
the Audit Committee were Mr. Fiscus, Mr. Warfel, Ms. Burt and Ms. Oster. The
duties of the Audit Committee include reviewing the financial statements of the
Company and the scope of the independent annual audit and internal audits. It
also reviews the independent accountants' letter to management concerning the
effectiveness of the Company's internal financial and accounting controls, and
reviews and recommends to the Board of Directors the firm to be engaged as the
Company's independent accountants. The Audit Committee may also examine and
consider such other matters relating to the financial affairs and operations of
the Company as it determines to be appropriate.
The Board of Directors of the Company also has appointed a Human
Resources and Stock Option Committee comprised of three directors, which during
the year ended June 30, 1996 conducted one (1) meeting. The Human Resources and
Stock Option Committee reviews the salary structure and policies of the Company,
administers the Company's stock option plan, selects the eligible persons to
whom stock
-5-
<PAGE>
options or stock appreciation rights will be granted, and prescribes the terms
and provisions of each such option or right. The members of the Human Resources
and Option Committee during the year ended June 30, 1996 were Messrs. McCraven
and Miglio and Ms. Burt.
During the year ended June 30, 1996, the Board of Directors of the
Company held seven (7) meetings. During fiscal 1996, no director attended fewer
than 75% of the total number of meetings of the Board of Directors and
committees of which he or she was a member.
Compensation of Directors
During each fiscal year, directors of the Company, other than officers,
each receive a retainer of $6,000, payable in Common Stock. The Common Stock is
payable in six month intervals and is valued based on its average market value
during the ten days preceding the payment date. In addition to the retainer,
the Chairman and the members of board committees receive $350 or $300,
respectively, for each committee meeting attended. During the year ended June
30, 1996, the Company did not pay the retainer. Accordingly, the Company has
accrued a $6,000 retainer for each non-employee director, or an aggregate of
$48,000.
EXECUTIVE OFFICERS
The following table sets forth, as of October 21, 1996, the names of the
Company's current executive officers who are not directors, their ages, and all
positions held with the Company. All executive officers serve at the discretion
of the Board of Directors, subject to Employment Agreements that the Company has
entered into with each of the executive officers. See "Executive Compensation -
Employment Agreements."
<TABLE>
<CAPTION>
Name Age Position With Company
---- --- ---------------------
<S> <C> <C>
Joyce I. Baran 49 Vice President of Merchandising and
Design - Strouse
Paul M. McDonald 43 Chief Financial Officer and Secretary -
the Company; Chief Financial Officer
and Secretary - Strouse
Barry Topf 58 Vice President of Manufacturing -
Strouse
</TABLE>
The principal occupations of the executive officers for the last five years are
set forth below.
Joyce I. Baran has served as Vice President of Merchandising and
Design of Strouse since 1990. Prior to joining Strouse, Ms. Baran was the
Director of Design and Merchandising for Ithaca Industries, Inc., an intimate
apparel manufacturer, and prior to that spent 20 years with Warnaco, Inc., an
apparel manufacturer, in design and other product-related positions.
-6-
<PAGE>
Paul M. McDonald has been the Chief Financial Officer of the Company
since November 1994. Mr. McDonald has been the Secretary of the Company since
April 1994. In addition, Mr. McDonald has been the Chief Financial Officer and a
Director of Strouse since 1989 and the Secretary of Strouse since September
1995. Prior to joining Strouse, Mr. McDonald was the Controller for Playtex's
European operations.
Barry Topf has been the Vice President of Manufacturing of Strouse
since October 1996. From April 1994 to October 1996, Mr. Topf was a consultant
and worked on operating and planning projects related to manufacturing for
various companies, including Nantucket ("Guess") Industries and Natori. From
September 1991 to April 1994, Mr. Topf was the Senior Vice President of
Operations of Warners, a division of Warnaco, Inc.
EXECUTIVE COMPENSATION
The following table sets forth certain information for the periods
indicated regarding cash and other compensation paid to, earned by, or awarded
to the Company's Chief Executive Officer and certain other executive officers of
the Company (collectively, the "Named Officers") whose salary and bonus exceeded
$100,000 during the fiscal year ended June 30, 1996.
Summary Compensation Table/1/
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
----------------------- ------------
Options All Other
Name and Principal Position Year/2/ Salary $/3/ Bonus $/4/ Awarded/5/ # Compensation $/6/
- ------------------------------------------------------ ------- ----------- ---------- ------------ -----------------
<S> <C> <C> <C> <C> <C>
John J. Crawford 1996 $60,000/7/ $ 0 0 $ 0
President, Chief Executive Officer and Chairman of 1995 60,000/7/ 0 20,000 0
the Board - the Company 1994 143,600 0 0 8,217
Alfred A. Kniberg 1996 162,816 0 0 2,077
President and Chief Operating Officer - Strouse 1995 162,816 5,634 2,545 1,810
1994 152,325 32,609 0 1,872
Joyce Baran 1996 131,900 0 0 1,660
Vice President Merchandising and Design - Strouse 1995 127,952 4,219 1,905 1,775
1994 116,503 24,117 0 1,119
Paul McDonald 1996 108,947 0 0 1,520
Chief Financial Officer and Secretary - the Company; 1995 108,947 3,770 1,703 1,284
Chief Financial Officer and Secretary - Strouse 1994 103,265 21,809 0 1,090
David S. Howell 1996 20,360 0 0 102,176
Former Chairman and Chief Executive Officer - Strouse 1995 122,160 4,228 1,909 1,810
1994 106,659 24,465 0 1,070
Graeme M. Caulfield/8/ 1996 108,947 0 0 1,243
Former Vice President Manufacturing Operations - Strouse 1995 108,947 3,770 1,703 1,514
1994 103,295 21,809 0 1,038
- ----------------------------
</TABLE>
/1/ The Capital Contribution Agreement provides that Messrs. Kniberg, McDonald,
Howell and Caulfield and Ms. Baran, as former stockholders of Strouse
(together with others, the "Former Strouse Stockholders"), are entitled to
additional consideration, the amount of which is based upon the future net
income before interest, dividends and income taxes of Strouse ("EBIT") for
the twelve-month periods ended August 31, 1994, August 31, 1995 and August
31, 1996. The Summary Compensation Table does not include such additional
consideration paid in the fiscal year ended June 30, 1994 to the Former
Strouse Stockholders as former stockholders of Strouse. No such additional
consideration was paid to the Former Strouse Stockholders for the twelve-
month period ended August 31, 1995 or will be paid for the twelve-month
period ended August 31, 1996 because Strouse did not achieve the EBIT
targets for such twelve-month periods.
-7-
<PAGE>
/2/ Compensation paid to Messrs. Kniberg, McDonald, Howell and Caulfield and
Ms. Baran for the fiscal year ended June 30, 1994 includes compensation
paid by the Company and by Strouse prior to its acquisition by the Company.
/3/ Pursuant to the terms of the Employment Agreements, if the EBIT of Strouse
was greater than $1,950,000 for the twelve-month period ended August 31,
1996, Messrs. Kniberg, McDonald and Caulfield and Ms. Baran could have
received a 6% increase in their annual salaries, effective June 1, 1996.
However, Strouse did not achieve the $1,950,000 EBIT target and such 6%
increase in annual salaries will not be paid. See "Executive Compensation -
Employment Agreements."
/4/ Pursuant to the terms of the Employment Agreements, if EBIT of greater than
$2,022,000 for the twelve-month period ended August 31, 1996 was achieved,
the Named Officers, excluding Mr. Crawford, could have received bonuses for
the period from September 1, 1995 through June 30, 1996. However, Strouse
did not achieve the $2,022,000 EBIT target and such bonuses will not be
paid. Amounts of bonuses for the fiscal year ended June 30, 1995 for
Messrs. Kniberg, McDonald, Howell and Caulfield and for Ms. Baran reflect
bonuses earned for the months of July and August 1994. See "Executive
Compensation - Employment Agreements."
/5/ Options awarded to Mr. Crawford are options to purchase Common Stock.
Options awarded to all other Named Officers are options (the "ASI Options")
to purchase common stock of ASI (the "ASI Common Stock"). Contemporaneously
with the award of any ASI Option, the Named Officers are issued an
identical number of warrants by the Company that enable the Named Officers,
after the exercise of the ASI Options, to convert each share of ASI Common
Stock into one share of Common Stock after April 12, 1996 for no additional
consideration. ASI Options are awarded in each fiscal year pursuant to the
terms of the Employment Agreements. See "Executive Compensation -
Employment Agreements."
/6/ Other compensation for Mr. Crawford in fiscal 1994 is term life insurance
premiums paid on Mr. Crawford's behalf. Other compensation for Mr. Howell
in fiscal 1996 includes $376 to be paid as a matching contribution pursuant
to the Strouse Cash or Deferral Profit Sharing Plan (the "Plan") and
$101,800 paid as a severance payment pursuant to the Employment Agreement
between the Company and Mr. Howell as a result of Mr. Howell resigning from
his positions as an officer and director of the Company and Strouse,
effective August 31, 1995. Other compensation for the Named Officers,
excluding Mr. Crawford for all fiscal years and Mr. Howell in fiscal 1996,
is comprised of the following: in fiscal 1996, $650, $120, $120 and $285
paid for term life insurance premiums and an estimated $1,427, $1,400,
$1,123 and $1,375 to be paid as a matching contribution pursuant to the
Plan for Messrs. Kniberg, McDonald and Caulfield and Ms. Baran,
respectively; in fiscal 1995, $650, $120, $375, $117 and $271 paid for term
life insurance premiums and $1,605, $1,164, $1,435, $1,397 and $1,504 paid
as a matching contribution pursuant to the Plan for Messrs. Kniberg,
McDonald, Howell and Caulfield and Ms. Baran, respectively; and in fiscal
1994, $601, $109, $229, $70 and $228 paid for term life insurance premiums
and $1,271, $981, $841, $968 and $891 paid as a matching contribution
pursuant to the Plan for Messrs. Kniberg, McDonald, Howell and Caulfield
and Ms. Baran, respectively.
/7/ In fiscal 1996, salary includes $20,000 in treasury shares of Common Stock
to be issued to Mr. Crawford. In fiscal 1995, salary includes 4,405
treasury shares of Common Stock issued to Mr. Crawford as salary. The fair
market value of the 4,405 shares on the date of grant was $20,000.
/ 8/ Mr. Caulfield resigned from his position as an officer of Strouse,
effective October 11, 1996.
Option Grants in Last Fiscal Year
There were no stock options granted to the Named Officers during the
Company's last fiscal year.
-8-
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table sets forth certain information regarding unexercised
stock options held as of June 30, 1996 by the Named Officers. No stock options
were exercised by the Named Officers during the past fiscal year.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End/1/ (#) at FY-End/2/ ($)
----------- ------------- ----------- -------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
John J. Crawford... 22,500 10,000 0 0
Alfred A. Kniberg.. 2,545 0 0 0
Joyce Baran........ 1,905 0 0 0
Paul McDonald...... 1,703 0 0 0
David S. Howell.... 1,909 0 0 0
Graeme Caulfield... 1,703 0 0 0
- -----------------------
</TABLE>
/1/ Options awarded to Mr. Crawford are options to purchase Common Stock.
Options awarded to all other Named Officers are ASI Options to purchase ASI
Common Stock. Contemporaneously with the award of any ASI Option, the Named
Officers are issued an identical number of warrants by the Company that
enable the Named Officers, after the exercise of the ASI Options, to
convert each share of ASI Common Stock into one share of Common Stock after
April 12, 1996 for no additional consideration. ASI Options are awarded in
each fiscal year pursuant to the terms of the Employment Agreements. See
"Executive Compensation - Employment Agreements."
/2/ All of the options held by the Named Officers have exercise prices that are
greater than the fair market value of the Common Stock as of June 28, 1996,
which was $3.00 per share. Such options are not "in-the-money" and their
value is, therefore, zero. Since the ASI Common Stock is convertible into
Common Stock for no additional consideration, the closing bid price per
share of the Common Stock on June 28, 1996 has been used as the market
price of the ASI Common Stock on June 30, 1996.
Employment Agreements
In connection with the Acquisition, the Company entered into Employment
Agreements (the "Employment Agreements") in April 1994 with Messrs. Kniberg and
McDonald and Ms. Baran. Pursuant to the Employment Agreements such officers
currently receive base salaries of $162,816, $108,947 and $131,900,
respectively. The Employment Agreements are for five (5) year terms ending in
1999. In addition to providing for base annual salaries, such agreements provide
for (a) 6% annual increases if certain levels of future net income before
interest, dividends and income taxes of Strouse ("EBIT") are achieved; and (b)
an annual cash bonus and stock option to purchase Common Stock of ASI (the "ASI
Common Stock") if certain other levels of EBIT are achieved. The minimum level
of EBIT, as defined for such purpose in the Employment Agreements, required in
order for such employees to receive the 6% annual increases under the Employment
Agreements is $1,950,000 for the twelve-months ended August 31, 1996, and is an
amount to be determined by the Board of Directors for the twelve-months ended
August 31, 1997 and 1998. The minimum level of EBIT, as defined for such purpose
in the Employment Agreements, required in order for such employees to receive a
cash bonus and stock option under the Employment Agreements is an amount to be
determined by a majority of such employees and a majority of the members of the
Board of Directors with respect to the twelve months ended August 31, 1996 and
subsequent years. The minimum level of EBIT of Strouse for the twelve months
ended
-9-
<PAGE>
August 31, 1996 has been set by the employees and the Board of Directors at
$1,998,250. The annual bonus increases proportionately from 20% of salary for
achieving the minimum level of EBIT to 100% of salary for achieving EBIT of more
than double the minimum level of EBIT. The annual stock option increases
proportionately from 10,000 shares of ASI Common Stock for achieving the minimum
level of EBIT to 20,000 shares for achieving EBIT of more than double the
minimum level of EBIT. The stock options will be exercisable at the market price
on the date that they are granted. The number of stock options granted to each
employee will be based on the amount of his or her salary in relation to the
amounts of the salaries of the other employees who are parties to such
Employment Agreements. Strouse did not achieve either of the EBIT targets for
the twelve-months ended August 31, 1996. The Employment Agreements also provide
that if an employee's employment is terminated without cause, then the Company
will pay the employee a severance payment equal to one year's salary and bonus,
payable in twelve (12) monthly installments.
CERTAIN TRANSACTIONS
New England Resources Limited Partnership, an entity affiliated with David
Howell and Ann-Marie Howell, stockholders owning more than 5% of the Preferred
Stock, leases to Strouse its principal facility located in New Haven,
Connecticut. The rent paid by Strouse under such lease for the fiscal year ended
June 30, 1996 was approximately $432,000 and the average rent under the lease
was $3.75 per square foot. The rent paid by Strouse under such lease for the
fiscal year ended June 30, 1995 was $449,509.
In connection with the Acquisition, Messrs. Kniberg and McDonald
(collectively, the "Borrowers") borrowed $298,358 and $184,660 (collectively,
the "Loans"), respectively, from the Company. The Borrowers used the Loans to
exercise options to purchase Strouse stock. The current outstanding principal
balances of the Loans are $149,179 and $92,330, respectively and the largest
amounts outstanding during fiscal 1996 were $149,179 and $92,330, respectively.
The Borrowers pledged to the Company an aggregate of 24,151 shares of preferred
stock of ASI (the "ASI Preferred Stock") to secure the repayment of the Loans.
Interest accrues on the Loans at a rate of 8.9% per annum, and is payable
quarterly. One-half of the principal balance of the Loans is payable on April
11, 1997 and one-half is payable on April 11, 1998. Payment of the principal
amount of the Loans may be delayed if the Company has not registered certain
shares of its Common Stock under applicable federal and state securities laws
upon the request of the Borrowers.
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<PAGE>
STOCK OWNED BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of October 7, 1996, certain information
regarding beneficial ownership of the Common Stock and the Preferred Stock by:
(i) each person who is known to the Company to own beneficially more than 5% of
the outstanding shares of either the Common Stock or the Preferred Stock; (ii)
each director of the Company; (iii) each executive officer of the Company who is
a Named Officer; and (iv) all executive officers and directors of the Company as
a group. Unless otherwise indicated, all persons listed below have sole voting
and investment power with respect to their shares and the address for each such
person is The Aristotle Corporation, 78 Olive Street, New Haven, Connecticut. In
preparing the following table, the Company has relied on information furnished
by such persons. Based upon a review of all reports furnished to the Company
that were required to be filed pursuant to Section 16 of the Securities and
Exchange Act of 1934, each of the Company's twelve (12) executive officers and
directors, other than Mr. Kniberg, did not timely file one Form 4 each to report
two acquisitions of Common Stock. In addition, Ms. Henley-Cohn did not timely
file one Form 4 to report two dispositions of Common Stock and Ms. Oster did not
timely file one Form 4 to report one acquisition of Common Stock.
<TABLE>
<CAPTION>
Number of Shares
of Capital Stock Percent of Class and
Beneficially Owned/ 1/ Voting Power/ 2/
------------------------ ----------------------------
5% Stockholders, Directors Common Preferred Common Preferred Voting
and Executive Officers Stock Stock Stock Stock Power
--------------------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
5% Stockholders:
Howell Resource Partners/ 3/........................ 0 102,237 * % 40.95% 7.55%
David S. Howell..................................... 1,570/4/ 102,237/5/ * 40.95 7.67
Ann-Marie Howell.................................... 1,570/6/ 102,237/5/ * 40.95 7.67
Alfred A. Kniberg................................... 0 75,374 * 30.19 5.57
Graeme M. Caulfield/ 7/............................. 0 19,234 * 7.70 1.42
Paul McDonald....................................... 0 19,532/8/ * 7.82 1.44
Richard Sheldon/ 9/................................. 0 15,744 * 6.31 1.16
Directors (excluding Mr. Kniberg):
John J. Crawford.................................... 62,123/10/ 0 5.33 * 4.39
Barry R. Banducci................................... 4,223/11/ 0 * * *
Mary Jane Burt...................................... 5,123/12/ 0 * * *
Robert L. Fiscus.................................... 5,523/13/ 0 * * *
Betsy Henley-Cohn................................... 26,563/14/ 0 2.40 * 1.96
Marcus R. McCraven.................................. 3,861/15/ 0 * * *
Daniel J. Miglio.................................... 5,323/16/ 0 * * *
Sharon M. Oster..................................... 6,143/17/ 0 * * *
John C. Warfel...................................... 2,616/18/ 0 * * *
Named Officers (excluding Messrs. Crawford,
Kniberg, McDonald, Howell and Caulfield):
Joyce Baran......................................... 0 4,797 * 1.92 *
------------- ----------- ------- ------- ------
All Executive Officers and Directors as a group/19/
(13 persons)........................................ 116,498 99,703 10.18 39.93 15.51
============= ============ ======== ======= ======
- --------------
</TABLE>
* Less than 1%
/1/ The table does not include warrants (the "Warrants") issued by the Company
to Howell Resource Partners ("HRP"), Alfred A. Kniberg, Graeme M. Caulfield,
Paul McDonald, Richard Sheldon, and Joyce Baran as former stockholders of
Strouse in connection with the Acquistion. The Warrants permit the holders
thereof to exchange the ASI Common Stock and ASI Preferred Stock held by
them for an aggregate of 339,082 shares of Common Stock at various times
between April 1996 and April 2001. The table also does not include the
$6,000 retainer that is payable in Common Stock to each of the eight (8)
non-employee directors for fiscal 1996. If the retainer was paid on October
7, 1996, each non-employee director would have received 1,600 shares of
Common Stock, or .12% of the total voting power of the Company's capital
stock.
-11-
<PAGE>
/2/ Percentages are calculated by including as part of the total number of
issued and outstanding shares of Common Stock those stock options which are
currently exercisable by the individual whose share ownership percentage is
being calculated, in accordance with the applicable securities regulations.
/3/ HRP is a general partnership whose general partners are David S. Howell and
Ann-Marie Howell. HRP is the direct beneficial owner of such 102,237
shares. The address of HRP and Mr. and Mrs. Howell is 151 River Road,
Essex, Connecticut
/4/ Includes 1,000 shares held by Mr. Howell jointly with his wife, Ann-Marie
Howell; 500 shares held by Mr. Howell's mother, Alice L. Howell; and 70
shares held by Mr. Howell's step-son, Eric M. Hines. Mr. Howell disclaims
beneficial ownership of the 570 shares held by his mother and step-son.
/5/ Mr. Howell and Mrs. Howell are the general partners of HRP (discussed in
footnote 3 above), and have the power to vote the 102,237 shares. Mr.
Howell and Mrs. Howell therefore share voting and dispositive power with
respect to the 102,237 shares and are indirect beneficial owners of such
shares.
/6/ Includes 1,000 shares held by Mrs. Howell jointly with her husband, David
S. Howell; 500 shares held by Mrs. Howell's mother-in-law, Alice L. Howell;
and 70 shares held by Mrs. Howell's son, Eric M. Hines. Mrs. Howell
disclaims beneficial ownership of the 570 shares held by her mother-in-law
and son.
/7/ The address of Mr. Caulfield is 12 Potterhill Drive, Guilford,
Connecticut.
/8/ Includes 16,659 shares held by Mr. McDonald directly and 2,873 shares held
by Janney Montgomery Scott, Inc. under a custodial agreement for Mr.
McDonald's benefit. Mr. McDonald disclaims beneficial ownership of the
2,873 shares held by Janney Montgomery Scott, Inc.
/9/ The address of Mr. Sheldon is 38 Hungerford Street, Hartford, Connecticut.
/10/ Includes 19,993 shares held by Mr. Crawford directly; 5,000 shares held in
trust for which Mr. Crawford serves as custodian with power to vote the
shares; 4,580 shares held in his wife's name; 50 shares held in the name of
his daughter; and stock options, which are currently exercisable, to
purchase 32,500 shares.
/11/ Includes 3,265 shares held by Mr. Banducci directly; and stock options,
which are currently exercisable, to purchase 958 shares.
/12/ Includes 3,686 shares held by Ms. Burt directly; and stock options, which
are currently exercisable, to purchase 1,437 shares.
/13/ Includes 4,086 shares held by Mr. Fiscus directly; and stock options,
which are currently exercisable, to purchase 1,437 shares.
/14/ Includes 3,265 shares held by Ms. Henley-Cohn directly; 14,340 shares held
in trusts in which Mrs. Henley-Cohn has the power to vote the shares; 8,000
shares held equally by Ms. Henley-Cohn's son and daughter, 5,000 of which
are disclosed in footnote 10 above as part of Mr. Crawford's shares held in
trust for which Mr. Crawford serves as custodian with power to vote the
shares; and stock options, which are currently exercisable, to purchase 958
shares.
/15/ Includes 3,850 shares held by Mr. McCraven directly; and 11 shares held in
Mr. McCraven's wife's name.
/16/ Includes 3,886 shares held by Mr. Miglio directly; and stock options, which
are currently exercisable, to purchase 1,437 shares.
/17/ Includes 4,706 shares held by Ms. Oster directly; and stock options, which
are currently exercisable, to purchase 1,437 shares.
/18/ Includes 2,137 shares held by Mr. Warfel directly; and stock options,
which are currently exercisable, to purchase 479 shares.
/19/ In addition to the foregoing capital stock of the Company, HRP, Messrs.
Kniberg, Caulfield, McDonald and Sheldon and Ms. Baran own 24,446, 18,832,
7,312, 7,397, 4,590 and 3,302 shares of ASI Common Stock, respectively
(assuming that all of the ASI Options held by such individuals are
exercised). HRP and Mr. Kniberg own 2.1% and 1.6%, respectively, of the ASI
Common Stock. None of the other stockholders owns more than 1% of the ASI
Common Stock. HRP, Messrs. Kniberg, Caulfield, McDonald and Sheldon and Ms.
Baran also own 92,784, 68,405, 16,834, 17,096, 13,780 and 4,199 shares of
ASI Preferred Stock, respectively, representing 41.3%, 30.5%, 7.5%, 7.6%,
6.1%, and 1.9%, respectively, of the issued and outstanding ASI Preferred
Stock. Pursuant to the Warrants described in footnote 1, the ASI Common
Stock and the ASI Preferred Stock may be exchanged for Common Stock at
various times between April 1996 and April 2001. Assuming that all of the
ASI Preferred Stock and the ASI Common Stock were converted to Common
Stock, as of October 7, 1996 (even though all of such ASI stock is not
currently convertible), HRP, Mr. Howell, Mrs. Howell, Mr. Kniberg, Mr.
Caulfield, Mr. McDonald, Mr. Sheldon and Ms. Baran would own 8.24%, 8.35%,
8.35%, 7.38%, 2.00%, 2.03%, 1.54%, and .60% of the total voting power of
the Company's capital stock.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A PLURALITY OF THE VOTES CAST AT THE
ANNUAL MEETING IS REQUIRED TO ELECT THE NOMINEES FOR DIRECTOR. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF
THE NOMINEES FOR DIRECTOR.
-12-
<PAGE>
THE COMPANY'S PLAN TO PAY THE DIRECTOR'S
ANNUAL RETAINER IN COMMON STOCK
(Proposal 2)
Directors of the Company, other than officers, each receive a retainer
of $6,000 each fiscal year for their service on the Board of Directors. The
Common Stock is payable in six month intervals and is valued based on its
average market value during the ten days preceding the payment date. Since
November 1992, the Company has paid this retainer with treasury stock in order
to conserve the Company's cash funds. The Company's program pursuant to which it
pays the annual retainer to its non-employee directors with Common Stock is
referred to herein as the "Director Compensation Program." The Company intends
to continue this Director Compensation Program and, once it has used all of its
currently held treasury stock, to purchase shares of Common Stock in the open
market in order to pay the retainer.
The Company is seeking Stockholder approval of the Director Compensation
Program because the Company may, at a future date, apply to list the Common
Stock on the Nasdaq National Market. The Common Stock is currently listed on the
Nasdaq SmallCap Market. The Nasdaq Stock Market rules that relate to National
Market companies require that stockholders approve plans pursuant to which
officers or directors may be issued more than the lesser of: (i) one percent
(1%) of the issuer's outstanding common stock; (ii) one percent (1%) of the
issuer's outstanding voting power; or (iii) 25,000 shares. Although the Company
believes that this rule might not apply to the Director Compensation Program if
the Company were a National Market company, it is seeking Stockholder approval
of the Director Compensation Program in order to simplify any future application
for listing of the Common Stock on the Nasdaq National Market. There can be no
assurance that the Company will apply for the listing of the Common Stock on the
Nasdaq National Market, and if it does so apply, that its application would be
accepted.
In the event that approval of the Director Compensation Program is not
obtained at the Annual Meeting, the Company will reconsider the Director
Compensation Program.
Unless otherwise indicated, properly executed proxies will be voted in
favor of the Director Compensation Program.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE VOTES CAST AT
THE ANNUAL MEETING IS REQUIRED TO APPROVE THE DIRECTOR COMPENSATION PROGRAM. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE DIRECTOR COMPENSATION PROGRAM.
-13-
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(Proposal 3)
On September 26, 1996, the Board of Directors re-appointed Arthur
Andersen LLP ("Arthur Andersen") to serve as independent accountants for the
Company for the fiscal year ending June 30, 1997. The Board proposes that the
Stockholders ratify this appointment, although such ratification is not required
under Delaware law or the Company's Amended and Restated Certificate of
Incorporation or Amended Bylaws. Arthur Andersen audited the Company's financial
statements for the fiscal year ended June 30, 1996. The Company expects that
representatives of Arthur Andersen will be present at the Annual Meeting, with
the opportunity to make a statement if they so desire, and will be available to
respond to appropriate questions.
In the event that ratification of the appointment of Arthur Andersen as
the independent public accountants for the Company is not obtained at the Annual
Meeting, the Board of Directors will reconsider its appointment.
Unless otherwise indicated, properly executed proxies will be voted in
favor of ratifying the appointment of Arthur Andersen, independent certified
public accountants, to audit the books and accounts of the Company for the
fiscal year ending June 30, 1997.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE VOTES CAST AT
THE ANNUAL MEETING IS REQUIRED TO RATIFY THE APPOINTMENT OF THE ACCOUNTANTS. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN AS INDEPENDENT ACCOUNTANTS.
Richard A. Eisner & Company LLP ("Eisner & Company") served as
independent accountants for the six-month period ending June 30, 1993 and for
the fiscal year ending June 30, 1994. Since Arthur Andersen was Strouse's
accountants prior to the Acquisition, the Board of Directors, at the
recommendation of the Audit Committee, appointed Arthur Andersen as the
Company's accountants for the fiscal year ended June 30, 1995.
Eisner & Company expressed opinions on the financial statements of the
Company in its reports for the six-month period ending June 30, 1993 and the
fiscal year ended June 30, 1994 (the "Eisner & Company Reports"). However, the
Eisner & Company Reports contained disclosures relating to the continued
uncertainty arising from a certain class action litigation against the Company
and expressed substantial doubt about whether the Company could continue as a
going-concern as a result of actions, if any, which could be asserted arising
from the activities of the Company's former subsidiary, First Constitution Bank.
During fiscal 1996, the Company settled these matters. As of June 30, 1993, the
Company changed its fiscal year end from December 31 to June 30.
There were no disagreements with Eisner & Company during the six-month
period ending June 30, 1993 or the fiscal year ended June 30, 1994 as to any
matters of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Eisner & Company, would have caused it to make a reference to
the subject matter of the disagreements in connection with its reporting.
-14-
<PAGE>
Prior to Arthur Andersen's appointment in 1994, the Company discussed
with Arthur Andersen the current financial condition of, and related issues with
respect to, the Company. In addition, management of the Company discussed with
Arthur Andersen the nature of the audit opinion that it was contemplated that
Eisner & Company would render for the fiscal year ended June 30, 1994. Arthur
Andersen advised the Company that, based on the facts known to Arthur Andersen
at that time, Arthur Andersen believed it would be able to render an opinion for
the fiscal year ended June 30, 1994. However, Arthur Andersen advised the
Company that since Arthur Andersen had not performed an audit for the fiscal
year ended June 30, 1994, Arthur Andersen was unable to confirm to the Company
what form of opinion would have been rendered by Arthur Andersen with respect to
such fiscal year. There were no pre-conditions to the appointment of Arthur
Andersen. The Company authorized Eisner & Company to respond fully to the
inquiries of Arthur Andersen concerning the foregoing.
DEADLINE FOR SUBMISSION OF STOCKHOLDER
PROPOSALS TO BE PRESENTED AT 1997
ANNUAL MEETING OF STOCKHOLDERS
Any proposal intended to be presented by any stockholder for action at
the 1997 Annual Meeting of stockholders of the Company must be received by the
Secretary of the Company at 78 Olive Street, New Haven, Connecticut 06511, not
later than July 24, 1997, in order for the proposal to be considered for
inclusion in the proxy statement and proxy relating to the 1997 Annual Meeting.
In addition, the Company's Amended Bylaws require that notice of stockholder
proposals and nominations for director be delivered to the Secretary of the
Company not less than thirty (30) days nor more than ninety (90) days prior to
the date of an annual meeting, unless notice or public disclosure of the date of
the meeting occurs less than forty-five (45) days prior to the date of such
meeting, in which event stockholders may deliver such notice not later than the
fifteenth (15th) day following the day on which notice of the date of the
meeting was mailed or public disclosure thereof was made. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement and proxy relating to the 1997 Annual Meeting any stockholder proposal
that does not meet all of the requirements for inclusion established by the
Securities and Exchange Commission in effect at the time such proposal is
received.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any other matters to be presented for action by the
shareholders at the Annual Meeting. If, however, any other matters not now known
are properly brought before the meeting, the persons named in the accompanying
proxy will vote such proxy in their discretion.
By Order of the Board of Directors
/s/ Paul McDonald
Paul McDonald
Chief Financial Officer
and Secretary
October 21, 1996
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<PAGE>
Appendix 1
----------
PROXY
-----
THE ARISTOTLE CORPORATION
78 Olive Street
New Haven, Connecticut 06511
Proxy Solicited by the Board of Directors for the Annual Meeting of Stockholders
November 21, 1996
John J. Crawford and Alfred A. Kniberg, or any of them individually
and each of them with the power of substitution, are hereby appointed Proxies of
the undersigned to vote all stock of The Aristotle Corporation owned on the
record date by the undersigned at the Annual Meeting of Stockholders to be held
at the New Haven Lawn Club, 193 Whitney Avenue, New Haven, Connecticut, at 2:00
p.m., on November 21, 1996, or any adjournments or postponements thereof, upon
such business as may properly come before the meeting, including the items on
the reverse side of this form as set forth in the Notice of 1996 Annual Meeting
and the Proxy Statement.
Nominees for Election as Directors: Barry R. Banducci and Daniel J.
Miglio.
(Shares cannot be voted unless this proxy form is signed and returned,
or other specific arrangements are made to have the shares represented at the
meeting.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
The Company's Directors recommend a vote FOR the proposals numbered 1,
2 and 3. This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS NUMBERED 1, 2 AND 3 AND IN THE DISCRETION OF
THE PROXIES AS TO OTHER MATTERS.
1. Election of Directors (see reverse)
[_] FOR [_] WITHHELD
[_]___________________________________________________________________
For all nominees except as noted above
2. Approve the Company's plan to pay the annual retainer that it pays to
its directors in Common Stock of the Company.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Ratify Appointment of Accountants
[_] FOR [_] AGAINST [_] ABSTAIN
Please mark, sign, date and return this proxy promptly in the enclosed
postage prepaid envelope.
MARK HERE FOR ADDRESS MARK HERE IF YOU PLAN
CHANGE AND NOTE AT LEFT [_] TO ATTEND THE MEETING [_]
Please sign your name below. When shares are held by joint tenants, both
should sign. When signing as attorney, executor, administrator, trustee or
guardian, please give the full title or capacity. If a corporation, please sign
in corporate name by an authorized officer and give title. If a partnership,
please sign in partnership name by an authorized person.
Signature: ______________________________ Date _______________________
Signature: ______________________________ Date _______________________
