<PAGE>
As filed with the Securities and Exchange Commission on December 16, 1998
Registration No. 333-41845
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE ARISTOTLE CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
--------------------------------
(State or other jurisdiction of incorporation or organization)
06-1165854
------------------------
(I.R.S. Employer
Identification No.)
27 Elm Street, New Haven, Connecticut 06511
(203) 867-4090
-----------------------------------------------
(Address, including zip code,
and telephone number, including area code,
of registrant's principal executive offices)
John J. Crawford
President and Chairman of the Board
The Aristotle Corporation
27 Elm Street
New Haven, CT 06511
(203) 867-4090
---------------------------------------
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
Copy to:
Stanford N. Goldman, Jr., Esquire
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
(617) 542-6000
_____________________________
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
_____________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of each class offering aggregate Amount of
of securities to be Amount to be price per offering registration
registered registered (1) share (2) price (2) fee
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par 519,131 $5.88 $3,052,490.28 $848.59
value $.01 per share
</TABLE>
- ------------------------------------------------------------------------------
(1) Aristotle previously registered 258,681 shares of Common Stock and paid a
registration fee of $369.65 in connection with the initial filing of this
Registration Statement on December 10, 1997. Accordingly, a total of
777,812 shares of Common Stock are being registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933, based upon the
average of the high and low sale prices of the Common Stock as reported on
the Nasdaq SmallCap Stock Market on October 27, 1998.
_____________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
PROSPECTUS
THE ARISTOTLE CORPORATION
777,812 Shares of Common Stock
(Par Value $.01 Per Share)
-----------------------
The Aristotle Corporation ("Aristotle") is a holding company which, through
its wholly-owned subsidiary, Aristotle Sub, Inc. ("ASI"), owned approximately
97% of The Strouse, Adler Company ("Strouse"). Aristotle formed ASI in 1993 to
acquire Strouse (the "Strouse Acquisition"). On January 2, 1998, ASI was merged
into Aristotle (the "ASI Merger") and, accordingly, Strouse became a wholly-
owned subsidiary of Aristotle. On June 30, 1998, Aristotle consummated the sale
of substantially all of the assets and certain of the liabilities of Strouse to
Sara Lee Corporation (the "Strouse Sale"). On July 2, 1998, Strouse changed its
name to "S-A Subsidiary, Inc." Strouse formerly designed, manufactured and
marketed women's intimate apparel. Aristotle is currently seeking to acquire
one or more operating companies.
In connection with ASI's acquisition of Strouse, ASI issued ASI common
stock and ASI preferred stock to the stockholders of Strouse (the "Former
Strouse Stockholders"). As a result of the ASI Merger, (i) all shares of ASI
common stock owned by the Former Strouse Stockholders were exchanged for
Aristotle Common Stock; (ii) all options to purchase ASI common stock held by
the Former Strouse Stockholders were exchanged for options to purchase Aristotle
Common Stock; and (iii) all shares of ASI preferred stock owned by the Former
Strouse Stockholders were converted into Series F, G and H Convertible Preferred
Stock of Aristotle (the "Series F, G and H Preferred Stock").
Also, on January 2, 1998, Aristotle and Geneve Corporation ("Geneve")
consummated a transaction which provided for the purchase by Geneve of 489,131
shares of Aristotle's Series E Convertible Preferred Stock (the "Series E
Preferred Stock"). Contemporaneously with the purchase of the Series E
Preferred Stock, Geneve also purchased 30,000 shares of Aristotle Common
Stock.
The 777,812 shares of Common Stock of Aristotle offered hereby may be
offered and sold by the selling stockholders identified herein (the "Selling
Stockholders"). Such offers and sales may be made on one or more exchanges, in
the over-the-counter market, or otherwise, at prices and on terms then
prevailing, or at prices related to the then-current market price, or in
negotiated transactions, or by underwriters pursuant to an underwriting
agreement in customary form, or in a combination of any such methods of sale.
The Selling Stockholders may also sell such shares in accordance with Rule 144
under the Securities Act of 1933, as amended (the "1933 Act"). Certain of the
shares offered hereby (a) are currently owned by certain of the Selling
Stockholders; (b) may be acquired by Geneve upon the conversion of the Series E
Preferred Stock; (c) may be acquired by the Former Strouse Stockholders upon
exercise of options; or (d) may be acquired by the Former Strouse Stockholders
upon conversion of Aristotle Series F, G and H Preferred Stock. The remainder of
the shares offered hereby were issued from time to time to the Selling
Stockholders who are Directors or former Directors of Aristotle (the "Director
Selling Stockholders") in consideration for their services as members of
Aristotle's Board of Directors and, in the case of John J. Crawford,
additionally for services rendered as President and Chief Executive Officer of
Aristotle in lieu of salary.
The Selling Stockholders are identified and certain information with
respect to them is provided under the caption "Selling Stockholders". The
expenses of the registration of the securities offered hereby, including fees of
counsel for Aristotle, will be paid by Aristotle. The following expenses will be
borne by the Selling Stockholders: underwriting discounts, fees and commissions,
if any, and the fees and expenses of legal counsel, if any, for the Selling
Stockholders. The filing by Aristotle of this Prospectus in accordance with the
requirements of Form S-3 is not an admission that any person whose shares are
included herein is an "affiliate" of Aristotle.
The Selling Stockholders have advised Aristotle that they have not engaged
any person as an underwriter or selling agent for any of such shares, but they
may in the future elect to do so, and they will be responsible for paying such a
person or persons customary compensation for so acting. The Selling Stockholders
and any broker executing selling orders on behalf of any Selling Stockholders
may be deemed to be "underwriters" within the meaning of the 1933 Act, in which
event commissions received by any such broker may be deemed to be underwriting
commissions under the 1933 Act. Aristotle will not receive any of the proceeds
from the sale of the securities offered hereby. Aristotle's Common Stock is
listed on the Nasdaq SmallCap Stock Market ("Nasdaq") under the symbol ARTL. On
October 27, 1998, the closing sale price of the Common Stock, as reported on
Nasdaq, was $6.25 per share.
-----------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" ON PAGE 3 OF THIS PROSPECTUS.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------
No person is authorized in connection with any offering made hereby to give
any information or to make any representations other than as contained in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by Aristotle. This Prospectus is not
an offer to sell, or a solicitation of an offer to buy, by any person in any
jurisdiction in which it is unlawful for such person to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any sales made
hereunder shall under any circumstances create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
-----------------------
The date of this Prospectus is December 16, 1998.
<PAGE>
AVAILABLE INFORMATION
Aristotle is subject to certain informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). These reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024 of the Commission's office at 450
Fifth Street, N.W., Judiciary Plaza, Washington, DC 20549, and at its regional
offices located at 7 World Trade Center, Suite 1300, New York, NY 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies
of such reports, proxy statements and other information can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary
Plaza, Washington, DC 20549 at prescribed rates. The Commission maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of the Commission's Web site is http://www.sec.gov. Additional
updating information with respect to the securities covered herein may be
provided in the future to purchasers by means of appendices to this
Prospectus.
Aristotle has filed with the Commission in Washington, DC a registration
statement (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the 1933 Act with respect to the securities
offered or to be offered hereby. This Prospectus does not contain all of the
information included in the Registration Statement, certain items of which are
omitted in accordance with the rules and regulations of the Commission. For
further information about the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits thereto.
Aristotle will provide without charge to each person to whom this Prospectus
is delivered, on the written or oral request of such person, a copy of any
document incorporated herein by reference, excluding exhibits. Requests should
be made to The Aristotle Corporation, 27 Elm Street, New Haven, CT 06511,
telephone (203) 867-4090 and directed to the attention of Mr. Paul McDonald,
Chief Financial Officer and Secretary.
1
<PAGE>
TABLE OF CONTENTS
PAGE
RISK FACTORS............................................ 3
RECENT DEVELOPMENT...................................... 5
SELLING STOCKHOLDERS.................................... 5
PLAN OF DISTRIBUTION.................................... 6
LEGALITY OF COMMON STOCK................................ 7
EXPERTS................................................. 7
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE....... 7
2
<PAGE>
RISK FACTORS
An investment in the shares being offered by this Prospectus involves a high
degree of risk. In addition to the other information contained in this
Prospectus or incorporated herein by reference, prospective investors should
carefully consider the following risk factors before purchasing the shares
offered hereby. This Prospectus contains and incorporates by reference forward-
looking statements within the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Reference is made in particular to the discussion
set forth under "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1998 (the "Form 10-K") and the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1998 (collectively, the
"MD&A Sections"), and under "Business" in the Form 10-K, incorporated in this
Prospectus by reference. Such statements are based on current expectations that
involve a number of uncertainties including those set forth in the risk factors
below. Actual results could differ materially from those projected in the
forward-looking statements.
ACQUISITION AND MANAGEMENT OF OPERATING COMPANIES. Aristotle is currently
a holding company with no operating business. Aristotle's business strategy is
to utilize the net proceeds from the Strouse Sale and its net operating tax loss
carryforward to fund the acquisition of one or more operating companies with a
history of stable or growing earnings. However, there can be no assurance that
Aristotle has the ability to obtain financing and additional capital to fund
such business strategy on acceptable terms, if at all, or that Aristotle can, on
a timely basis, find, prudently negotiate and consummate one or more
acquisitions. Similarly, if Aristotle were to acquire operating businesses,
there can be no assurance that Aristotle can successfully manage any such
acquired companies.
Also, there can be no assurance that Aristotle can obtain financing and
additional capital to fund its business strategy in a manner that will not have
a material adverse effect on Aristotle's ability to use its accrued net
operating losses. See "RISK FACTORS - - Loss of Net Operating Loss Tax
Carryforward."
LOSS OF NET OPERATING LOSS TAX CARRYFORWARD. In September, 1996,
Aristotle filed an amended Federal income tax return for the year ending
December 31, 1992 claiming a worthless stock deduction of approximately
$54,000,000 with respect to its stock in the First Constitution Bank (the
"Bank") which previously was Aristotle's only direct subsidiary and which, on
October 2, 1992, was seized by the FDIC. As a result of such amended returns,
Aristotle has also claimed tax refunds of approximately $10,000,000 resulting
from the carryback of Aristotle's net operating loss from 1992 to prior years.
Aristotle has also filed a carryback claim related to its 1996 tax year.
Aristotle's 1992 and 1996 amended returns and carryback claims are in the
process of being reviewed by the Internal Revenue Service and there can be no
assurance that they will be allowed. In addition, there is no assurance that
Aristotle will be entitled to any net operating loss carryforward arising from,
or with respect to its interest in, the former Bank. Even if Aristotle is
entitled to any net operating loss carryforward arising from, or with respect to
its interest in, the former Bank, its ability to utilize such carryforward is
dependent upon many factors including (i) the realization of taxable income by
Aristotle and (ii) avoiding a fifty percent "ownership change" as defined in
Section 382 of the Internal Revenue Code. If there is an "ownership change",
the tax loss carryforwards available to Aristotle would be significantly reduced
or eliminated.
During the period which Aristotle has an unutilized federal net operating
loss carryforward, which may be for many years into the future, it will be
necessary for Aristotle to determine whether an ownership change has occurred
each time a new or existing stockholder becomes a 5% stockholder or an existing
5% stockholder increases its ownership interest.
POSSIBLE ADDITIONAL FINANCING REQUIREMENTS AND ACCESS TO CAPITAL FUNDING.
In connection with ASI's acquisition of Strouse in 1994, ASI issued ASI common
stock and ASI preferred stock to the stockholders of Strouse (the "Former
Strouse Stockholders"). The ASI preferred stock included the right to require
ASI to repurchase shares of ASI preferred stock if the holders did not convert
the ASI preferred stock (the "Put Right"). In connection with the ASI Merger,
all of the remaining 80,499 shares of ASI preferred stock outstanding were
converted into shares of Series F, G and H preferred stock of Aristotle (the
"Series F, G and H Preferred Stock"). Pursuant to the Series F, G and H
redemption features, 40,249 shares of Series F, G and H Preferred Stock were to
be redeemable on January 1, 1999, at $10.00 per share and the remaining 40,250
shares of Series F, G and H Preferred Stock were to be redeemable on January 1,
2000, at $10.00 per share.
However, pursuant to the terms of the Series F, G and H Preferred Stock, the
sale of substantially all of the assets of Strouse triggered an acceleration of
the right of the Former Strouse Stockholders to require Aristotle to repurchase
the Series F, G and H Preferred Stock. The Former Strouse Stockholders now have
the right to require Aristotle to repurchase the Series F, G and H Preferred
Stock on thirty (30) days written notice to Aristotle. Accordingly, the Series
F, G and H Preferred Stock has been reflected as a current obligation on
Aristotle's consolidated financial statements. Aristotle has deposited cash in a
segregated account in an amount sufficient to pay the entire repurchase price,
plus any accrued but unpaid dividends, of the Series F, G and H Preferred
Stock.
On October 22, 1997, Aristotle and Geneve Corporation ("Geneve") entered
into a Preferred Stock Purchase Agreement (the "Preferred Stock Purchase
Agreement"). Pursuant to the Preferred Stock Purchase Agreement, Geneve
purchased 489,131 shares of Aristotle's Series E Convertible Preferred Stock
(the "Series E Preferred Stock"), for an aggregate purchase price of
approximately $2,250,000, or a per share price of $4.60, representing
approximately 30% of the issued and outstanding capital stock of Aristotle. The
proceeds of the Geneve financing have been used, in part, to fund the operations
of Aristotle. Aristotle has granted to Geneve the right to require Aristotle to
repurchase shares of the Series E Preferred Stock at anytime after the earlier
of December 31, 2001 or upon the occurrence of certain acceleration events (the
"Geneve Put Right"). The Preferred Stock Purchase Agreement also provides for
the redemption of the Series E Preferred Stock at the option of Aristotle
after December 31, 2001 as well as the mandatory redemption of the Series E
Preferred Stock on December 31, 2007 (the "Geneve Redemption Right"). The
repurchase price under the Geneve Put Right and the Geneve Redemption Right is
$4.60 per share, subject to adjustment for certain recapitalization events, plus
any accrued but unpaid dividends. See "RISK FACTORS - - Influence by Existing
Stockholders."
As a result of the Strouse Sale, Aristotle has the funds required to meet
its commitments to Geneve. However, Aristotle's business strategy is to utilize
the net proceeds from the Strouse Sale to fund the acquisition of one or more
operating companies. In the event that Aristotle decides to use the proceeds of
the Strouse Sale to acquire operating companies, Aristotle may be required to
raise new equity capital or obtain additional financing, or both, in order to
meet its commitments to Geneve. Also, Aristotle may be required to raise new
equity capital or obtain additional financing, or both in order to implement its
business strategy of acquiring one or more operating companies. There can be no
assurance that Aristotle could be able to raise new equity capital or obtain
additional financing, or that Aristotle could raise new equity capital or obtain
additional financing in a manner that will not have a material adverse effect on
Aristotle's ability to use its accrued net operating losses. See "RISK
FACTORS - - Loss of Net Operating Loss Tax Carryforward." In the event that
adequate funds are not available, Aristotle's financial condition would be
materially, adversely affected.
3
<PAGE>
INFLUENCE BY EXISTING STOCKHOLDERS. Geneve and certain of its affiliates
beneficially own all of the issued and outstanding shares of the Series E
Preferred Stock, representing approximately 30% of the issued and outstanding
capital stock of Aristotle. The Series E Preferred Stock has one vote per share,
with respect to matters other than the election of directors and auditors, and
is convertible into Common Stock at a conversion price of $4.60, subject to
adjustment for certain dilutive issuances of Aristotle's capital stock. In
addition, pursuant to the terms of the Preferred Stock Purchase Agreement,
Geneve has the right to designate two nominees for election to the
4
<PAGE>
Board of Directors of Aristotle for so long as Geneve or its affiliates hold all
of the issued and outstanding shares of the Series E Preferred Stock or not less
than 30% of the issued and outstanding voting securities of Aristotle.
Accordingly, Geneve and its affiliates collectively have the ability to
determine the outcome of certain corporate actions requiring stockholder
approval, including the merger of Aristotle with or into another company, a sale
of substantially all of Aristotle's assets and amendments to Aristotle's
Certificate of Incorporation.
Pursuant to the Preferred Stock Purchase Agreement, Geneve is prohibited
from acquiring any voting securities which, when taken together with any other
voting securities then owned by Geneve or any affiliates, would exceed an amount
equal to 30% of the Company's then outstanding voting securities, unless the
Board of Directors consents to any such acquisition. The Board may withhold
consent if the Board determines that an acquisition of voting securities by
Geneve may have a material adverse effect on Aristotle's ability to use its
accrued net operating losses. See "RISK FACTORS -- Loss of Net Operating Loss
Tax Carryforward." The Preferred Stock Purchase Agreement also provides that in
no event may Geneve or its affiliates, without Board consent, acquire voting
securities which, when taken together with any voting securities then owned by
Geneve and its affiliates would exceed 40% of Aristotle's then outstanding
voting securities.
In October, 1998, the Board of Directors consented to the purchase by
Geneve of 62,000 additional shares of Common Stock. Accordingly, Geneve has
purchased some additional shares of Aristotle's Common Stock in open-market
transactions such that as of October, 1998 Geneve and its affiliates owned
approximately 32% of the outstanding voting securities of Aristotle.
REGISTRATION UNDER THE INVESTMENT COMPANY ACT OF 1940. After the Strouse
Sale, Aristotle invested the net proceeds of the sale primarily in short-term
investments while it actively continues to pursue the acquisition of one or more
operating companies. Although Aristotle is actively seeking acquisition
candidates, Aristotle currently has no specific plans for the acquisition of any
company. In the event that Aristotle is unable to acquire an operating company
within the next year, Aristotle will most likely be required to continue to
invest a substantial portion of its assets in U.S. government securities or
short-term investments in order to avoid becoming subject to the requirements of
the Investment Company Act of 1940, as amended (the "Investment Company Act").
In the alternative, if Aristotle is unable to acquire an operating company, the
Securities and Exchange Commission may determine that Aristotle is an investment
company under the Investment Company Act, which would require Aristotle to
register and become subject to the regulations under the Investment Company
Act.
ABSENCE OF DIVIDENDS. Aristotle has not, in recent years, paid dividends
with respect to its Common Stock, and it is unlikely that Aristotle will pay
any dividends with respect to its Common Stock in the foreseeable future.
ANTI-TAKEOVER PROVISIONS. Certain provisions of the Aristotle's charter
documents, such as the authorization of "blank check" preferred stock,
restrictions on certain transfers of Common Stock and election of a classified
board of directors to staggered three year terms, could have the effect of
discouraging certain attempts to acquire Aristotle or remove directors even if
some of Aristotle's stockholders deem such an attempt to be in the Aristotles's
and their best interest. Management and the affiliates of the Aristotle's may be
deemed to have effective control of Aristotle which may give management and such
affiliates the ability to influence the election of directors and other
stockholder actions.
YEAR 2000. In 1997, Aristotle began, for all of its computer systems, a
Year 2000 conversion project to address all necessary code changes, testing and
implementation. The Year 2000 conversion project has been completed. However,
there can be no assurance that the systems of other companies on which
Aristotle's systems rely will be timely converted or that any such failure to
convert by another company would not have an adverse effect on Aristotle's
systems.
Also, as noted above, Aristotle's business strategy is to utilize the net
proceeds from the Strouse Sale and its net operating tax loss carryforward to
fund the acquisition of one or more operating companies with a history of stable
or growing earnings. However, there can be no assurance that any company that
Aristotle may acquire will have implemented a Year 2000 conversion project to
address all necessary code changes or that any program which has been
implemented will be successful. Any such failure to implement a successful
conversion project may have a material, adverse effect on Aristotle.
RECENT DEVELOPMENT
On December 1, 1998, Aristotle and Paul McDonald entered into a two-year
employment agreement that provides, in part, for Mr. McDonald to serve as Vice
President and Chief Financial Officer, an annual base salary of $149,000 and
such stock options and bonuses as the Board of Directors determines in its sole
discretion. The employment agreement also provides that if Mr. McDonald's
employment is terminated without cause or he voluntary terminates his employment
after Aristotle acquires a business (as defined in the employment agreement),
Mr. McDonald will receive a one-year continuation of his base salary.
SELLING STOCKHOLDERS
The shares offered hereby are offered by (a) the Former Strouse
Stockholders; (b) Geneve; and (c) the Director Selling Stockholders.
The shares offered hereby by the Former Strouse Stockholders consist of (i)
33,424 shares of Common Stock currently owned by the Former Strouse
Shareholders; (ii) 35,208 shares of Aristotle Common Stock issuable upon
exercise of options; and (iii) 134,163 shares of Aristotle Common Stock issuable
upon the conversion of 80,499 shares of Series F, G and H Preferred Stock of
Aristotle. Aristotle has registered the shares offered hereby by the Former
Strouse Stockholders pursuant to terms of a Registration Rights Agreement dated
as of April 11, 1994, as amended.
The shares offered hereby by Geneve consist of (i) 30,000 shares of Common
Stock currently owned by Geneve; and (ii) 489,131 shares of Aristotle Common
Stock issuable upon the conversion of 489,131 shares of Series E Preferred Stock
of Aristotle. Aristotle has registered the shares offered hereby by Geneve
pursuant to terms of a registration rights agreement entered into on October 22,
1997 in connection with the Preferred Stock Purchase Agreement between Aristotle
and Geneve.
The shares offered hereby by the Director Selling Stockholders consist of
55,886 shares of Common Stock which were issued to the Director Selling
Stockholders in consideration for their services as members of Aristotle's Board
of Directors and, in the case of John J. Crawford, additionally in lieu of
salary as President and Chief Executive Officer of Aristotle.
There can be no assurance that the Selling Stockholders will sell any or all
of the shares of Common Stock offered hereunder. The following table sets forth
information with respect to the beneficial ownership of Aristotle's Common Stock
and Preferred Stock as of September 1, 1998 and as adjusted to reflect the sale
of the Common Stock offered hereby by each Selling Stockholder.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
CAPITAL STOCK NUMBER OF
BENEFICIALLY OWNED PRIOR SHARES SHARES OWNED
SELLING STOCKHOLDERS TO THE OFFERING BEING AFTER OFFERING
- -------------------- --------------- --------------
FORMER STROUSE STOCKHOLDERS COMMON/(1)/ PREFERRED/(2)/ OFFERED/(3)/ NUMBER PERCENT
----------- -------------- ------------ ------ -------
<S> <C> <C> <C> <C> <C>
Howell Resource Partners 24,446 83,333 107,779/(4)/ 0 *
Alfred A. Kniberg/(5)/ 28,832 22,695 41,527/(6)/ 10,000 *
Richard Sheldon 4,590 0 4,590/(7)/ 0 *
Paul McDonald/(8)/ 6,587 9,503 16,090/(9)/ 0 *
J.M. Scott Inc., Custodian 810 0 810/(10)/ 0 *
f/b/o Paul McDonald
Graeme M. Caulfield/(11)/ 7,312 7,693 15,005/(12)/ 0 *
C. David Goldman 1,147 4,033 5,180/(13)/ 0 *
Louis Musante 1,147 4,033 5,180/(14)/ 0 *
Joyce Baran/(15)/ 13,302 2,873 6,175/(16)/ 10,000 *
John Peterson 459 0 459/(17)/ 0 *
GENEVE CORPORATION
Chaparral International Re./(18)/ 79,000 489,131 519,131/(19)/ 49,000 2.67%
DIRECTOR SELLING STOCKHOLDERS
John J. Crawford/(20)/ 71,327/(21)/ 0 17,432 53,895 2.94%
Barry R. Banducci/(22)/ 10,344/(23)/ 0 5,228 5,116 *
Mary Jane Burt/(24)/ 7,059/(25)/ 0 3,543 3,516 *
Robert L. Fiscus/(26)/ 11,644/(27)/ 0 5,228 6,416 *
Betsy Henley-Cohn/(28)/ 26,684/(29)/ 0 5,228 21,456 1.17%
Marcus R. McCraven/(30)/ 5,797/(31)/ 0 3,543 2,254 *
Daniel J. Miglio/(32)/ 11,444/(33)/ 0 5,228 6,216 *
Sharon M. Oster/(34)/ 12,264/(35)/ 0 5,228 7,036 *
John C. Warfel/(36)/ 8,737/(37)/ 0 5,228 3,509 *
</TABLE>
_______________________
* Indicates ownership of less than 1% of the Common Stock
(1) The persons named in this table have sole voting and investment control
with respect to all shares of Common Stock shown as beneficially owned by
them, subject to the information contained in the footnotes to this table.
Includes as part of the total number of shares (a) shares of Common Stock
currently owned and (b) those stock options which are exerciseable by the
individual whose share ownership is being calculated, in accordance with
applicable securities regulations.
(2) The number of shares listed is the number of shares of Common Stock into
which the Preferred Stock may be converted based on the applicable
conversion price. The conversion price for the Series F, G and H Preferred
Stock is 1.667, and the conversion price for the Series E Preferred Stock
is 1.00.
(3) Assumes (a) the exercise of all stock options which are exerciseable by the
individual whose share ownership is being calculated, in accordance with
applicable securities regulations and (b) the conversion of all shares of
the Series E Preferred Stock and the Series F, G and H Preferred Stock into
Common Stock.
(4) Includes (i) 12,639 shares of Common Stock; (ii) 11,807 shares of Common
Stock issuable upon exercise of stock options which are exerciseable; (iii)
23,608 shares of Series F Preferred Stock which convert into 39,347 shares
of Common Stock; (iv) 3,196 shares of Series G Preferred Stock which
convert into 5,326 shares of Common Stock; and (v) 23,196 shares of Series
H Preferred Stock which convert into 38,660 shares of Common Stock.
(5) Mr. Kniberg has been a Director of Aristotle since 1994. Mr. Kniberg has
been a Director of Strouse since 1989 and has served as the President and
Chief Operating Officer of Strouse since 1989.
(6) Includes (i) 9,318 shares of Common Stock; (ii) 9,514 shares of Common
Stock issuable upon exercise of stock options which are exerciseable; and
(iii) 13,617 shares of Series H Preferred Stock which convert into 22,695
shares of Common Stock.
(7) Includes (i) 2,626 shares of Common Stock and (ii) 1,964 shares of Common
Stock issuable upon exercise of stock options which are exerciseable.
(8) Mr. McDonald has been the Chief Financial Officer and Secretary of
Aristotle since 1994. Mr. McDonald has also served as Chief Financial
Officer and a Director of Strouse since 1989, and the Secretary of Strouse
since 1995.
(9) Includes (i) 2,806 shares of Common Stock; (ii) 3,781 shares of Common
Stock issuable upon exercise of stock options which are exerciseable; (iii)
602 shares of Series G Preferred Stock which convert into 1,003 shares of
Common Stock; and (iv) 5,100 shares of Series H Preferred Stock which
convert into 8,500 shares of Common Stock.
(10) Includes (i) 452 shares of Common Stock and (ii) 358 shares of Common Stock
issuable upon exercise of stock options which are exerciseable.
(11) Mr. Caufield is the former Vice President of Manufacturing Operations for
Strouse. Mr. Caufield resigned effective October 11, 1996.
(12) Includes (i) 3,209 shares of Common Stock; (ii) 4,103 shares of Common
Stock issuable upon exercise of stock options which are exerciseable; and
(iii) 4,616 shares of Series H Preferred Stock which converts into 7,693
shares of Common Stock.
(13) Includes (i) 656 shares of Common Stock; (ii) 491 shares of Common Stock
issuable upon exercise of stock options which are exerciseable; (iii) 10
shares of Series F Preferred Stock which convert into 17 shares of Common
Stock; (iv)1,205 shares of Series G Preferred Stock which convert into
2,008 shares of Common Stock; and (v) 1,205 shares of Series H Preferred
Stock which convert into 2,008 shares of Common Stock.
(14) Includes (i) 656 shares of Common Stock; (ii) 491 shares of Common Stock
issuable upon exercise of stock options which are exerciseable; (iii) 10
shares of Series F Preferred Stock which convert into 17 shares of Common
Stock; (iv) 1,205 shares of Series G Preferred Stock which convert into
2,008 shares of Common Stock; and (v) 1,205 shares of Series H Preferred
Stock which convert into 2,008 shares of Common Stock.
(15) Ms. Baran has been a Director of Strouse since 1994. Ms. Baran has also
served as the Vice President of Merchandising and Design of Strouse since
1990.
(16) Includes (i) 799 shares of Common Stock; (ii) 2,503 shares of Common Stock
issuable upon exercise of stock options which are exerciseable; (iii) 255
shares of Series G Preferred Stock which convert into 425 shares of Common
Stock; and (iv) 1,469 shares of Series H Preferred Stock which convert into
2,448 shares of Common Stock.
(17) Includes (i) 263 shares of Common Stock and (ii) 196 shares of Common
Stock issuable upon exercise of stock options which are exerciseable.
(18) Chaparral International Re. is a subsidiary of Geneve Corporation. Steven
B. Lapin, a Director of Aristotle since January 2, 1998, is the President
and Chief Operating Officer of Geneve Corporation and Edward Netter, a
Director of Aristotle since January 2, 1998, is the Chairman and Chief
Executive Officer of Geneve Corporation.
(19) Includes (i) 30,000 shares of Common Stock and (ii) 489,131 shares of
Series E Preferred Stock which convert into 489,131 shares of Common Stock.
(20) Mr. Crawford has been President and Chief Executive Officer of Aristotle
since 1990 and chairman of the Board since 1993. Mr. Crawford has also been
Director of Strouse since 1994.
(21) Includes (i) 34,197 shares which Mr. Crawford owns directly; (ii) 4,580
shares held in his wife's name; (iii) 50 shares held in the name of his
daughter; and (iv) 32,500 shares issuable upon exercise of stock options,
which are exerciseable.
(22) Mr. Banducci has been a Director of Aristotle since 1993 and Director of
Strouse since 1994.
(23) Includes 3,458 shares issuable upon exercise of stock options, which are
exerciseable.
(24) Ms. Burt is a former Director of Aristotle and Strouse.
(25) Includes 1,437 shares issuable upon exercise of stock options, which are
exerciseable.
(26) Mr. Fiscus has been a Director of Aristotle since 1991 and a Director of
Strouse since 1994.
(27) Includes 3,937 shares issuable upon exercise of stock options, which are
exerciseable.
(28) Ms. Henly-Cohn has been a Director of Aristotle since 1993 and has been a
Director of Strouse since 1994.
(29) Includes 6,886 shares held by Ms. Henley-Cohn directly; 14,340 shares held
in trusts in which Ms. Henley-Cohn has the power to vote the shares; 2,000
shares held equally by Ms. Henley-Cohn's son and daughter; and 3,458 shares
issuable upon exercise of stock options, which are exerciseable.
(30) Mr. McCraven is a former Director of Aristotle and Strouse.
(31) Includes 5,786 shares held by Mr. McCraven directly and 11 shares held in
his wife's name.
(32) Mr. Miglio has been a Director of Aristotle since 1990 and a Director of
Strouse since 1990.
(33) Includes 3,937 shares issuable upon exercise of stock options, which are
exerciseable.
(34) Ms. Oster has been a Director of Aristotle since 1993 and has been a
Director of Strouse since 1994.
(35) Includes 3,937 shares issuable upon exercise of stock options, which are
exerciseable. Excludes 25,900 shares held by Ms. Oster's husband in his
own name, as to which Ms. Oster disclaims beneficial ownership.
(36) Mr. Warfel has been a Director of Aristotle since 1994 and has been a
Director of Strouse since 1994.
(37) Includes 2,979 shares issuable upon exercise of stock options, which are
exerciseable.
5
<PAGE>
PLAN OF DISTRIBUTION
The 777,812 shares of Common Stock of Aristotle offered hereby may be offered
and sold from time to time by the Selling Stockholders, or by pledgees, donees,
transferees or other successors in interest. Such offers and sales may be made
from time to time on one or more exchanges or in the over-the-counter market, or
otherwise,
6
<PAGE>
at prices and on terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions. The shares may be sold by one or
more of the following: (a) a block trade in which the broker or dealer so
engaged will attempt to sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker or dealer as principal and resale by such broker or dealer for its
account; (c) an exchange distribution in accordance with the rules of such
exchange; (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; (e) privately negotiated transactions; and (f) a
combination of any such methods of sale. In effecting sales, brokers or dealers
engaged by the Selling Stockholders may arrange for other brokers or dealers to
participate. Brokers or dealers may receive commissions or discounts from
Selling Stockholders or from the purchasers in amounts to be negotiated
immediately prior to the sale. The Selling Stockholders may also sell such
shares in accordance with Rule 144 under the 1933 Act.
Aristotle has agreed to use its best efforts to maintain the effectiveness of
the registration of the shares being offered hereunder by the Former Strouse
Stockholders until the earlier of the date upon which all of the shares
of Common Stock offered hereby have been sold or April 11, 2001. Aristotle has
agreed to use its best efforts to maintain the effectiveness of the registration
of the shares being offered hereunder by Geneve until the earlier of the date
upon which all shares of Common Stock offered hereby have been sold on October
22, 2004. Aristotle does not have an agreement with the Director Selling
Stockholders to maintain the effectiveness of the registration of the shares
being offered hereby by the Director Selling Stockholders for any particular
period of time.
The Selling Stockholders and any brokers participating in such sales may be
deemed to be underwriters within the meaning of the 1933 Act. There can be no
assurance that the Selling Stockholders will sell any or all of the shares of
Common Stock offered hereunder.
All proceeds from any such sales will be the property of the Selling
Stockholders who will bear the expense of underwriting discounts, fees and
commissions, if any, and their own legal fees and expenses.
LEGALITY OF COMMON STOCK
The validity of the issuance of the shares of Common Stock offered hereby is
being passed upon for Aristotle by Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., Boston, Massachusetts.
EXPERTS
The audited financial statements and schedule incorporated by reference in
the prospectus and elsewhere in this registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by Aristotle with the Commission are incorporated
herein by reference:
(a) Aristotle's Annual Report on Form 10-K for the fiscal year ended June 30,
1998, filed pursuant to Section 13 or 15(d) of the 1934 Act (File Number 0-
14689).
(b) Aristotle's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1998, filed pursuant to Section 13 or 15(d) of the 1934 Act
(File Number 0-14669).
(c) The description of the Aristotle's capital stock contained in Aristotle's
registration statement on Form 8-A under the 1934 Act (File No. 0-14669),
including amendments or reports filed for the purpose of updating such
description.
All reports and other documents subsequently filed by the Aristotle with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act,
prior to the filing of a post-effective amendment which indicates that all
securities covered by this Prospectus have been sold or which deregisters all
such securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
7
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 14. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The following expenses incurred in connection with the sale of the securities
being registered will be borne by the Registrant. Other than the registration
fee, the amounts stated are estimates.
Registration Fee $ 1,218.24
Legal Fees and Expenses 15,000.00
Accounting Fees and Expenses 10,000.00
Miscellaneous 5,000.00
---------
TOTAL $31,218.24
=========
The Selling Stockholders will bear the expense of their own legal counsel and
miscellaneous fees and expenses, if any.
Item 15. Indemnification of Officers and Directors
- ---------------------------------------------------
The General Corporation Law of the State of Delaware and the Registrant's
Amended and Restated Bylaws provide for indemnification of the Registrant's
directors and officers for liabilities and expenses that they may incur in such
capacities. In general, directors and officers are indemnified with respect to
actions taken in good faith 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, actions that the indemnitee had no reasonable
cause to believe were unlawful. Reference is made to Article IX of the
Registrant's Amended and Restated Bylaws incorporated herein by reference to
Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997 (File Number 0-14669).
The Registration Rights Agreement dated as of April 11, 1994, filed as Exhibit
4.5 hereto provides for indemnification by the Registrant of certain of the
Selling Stockholders against certain liabilities under the 1933 Act, the 1934
Act, state securities laws or otherwise, and provides for indemnification by
certain of the Selling Stockholders of the Registrant and its directors, its
officers and certain control persons against certain liabilities under the 1933
Act, the 1934 Act, state securities laws, or otherwise.
The Registration Rights Agreement dated as of October 22, 1997, filed as
Exhibit 10.6 to the Form 10-Q for the quarter ended September 30, 1997, provides
for indemnification by the Registrant of certain of the Selling Stockholders
against certain liabilities under the 1933 Act, the 1934 Act, state securities
laws or otherwise, and provides for indemnification by certain of the Selling
Stockholders of the Registrant and its directors, its officers and certain
control persons against liabilities under the 1933 Act, the 1934 Act, state
securities laws, or otherwise.
Item 16. Exhibits
- ------------------
Exhibit
Number Description
- ------- -----------
4.1 Restated Certificate of Incorporation of The Aristotle
Corporation, incorporated herein by reference to Exhibit 3.1 to
the Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997 (File Number 0-14669)
4.2 Amended and Restated Bylaws of the Registrant, incorporated
herein by reference to Exhibit 3.2 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 1997
(File Number 0-14669)
4.3 Certificate of Powers, Designations, Preferences and Relative,
Participating, Optional and other Special Rights of the Series E
Convertible Preferred Stock of the Registrant, incorporated
herein by reference to Exhibit 4.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997
(File Number 0-14669)
4.4 Certificate of Powers, Designation, Preferences and Relative,
Participating, Optional and other Special Rights of Series F,
G, and H Preferred Stock of the Registrant, incorporated herein
by reference to Exhibit 4.2 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1997 (File
Number 0-14669)
II-1
<PAGE>
4.5+ Registration Rights Agreement dated as of April 11, 1994
between the Registrant and the shareholders listed on Exhibit A
thereto
4.6 Registration Rights Agreement dated as of October 22, 1997
between The Aristotle Corporation and Geneve Corporation,
incorporated herein by reference to Exhibit 10.6 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 (File Number 0-14669)
4.7 Letter Agreement dated as of September 15, 1997 among The
Aristotle Corporation, Aristotle Sub, Inc. and certain
stockholders, incorporated herein by reference to Exhibit 10.7
Registrant's Quarterly Report on to the Form 10-Q for the quarter
ended September 30, 1997 (File Number 0-14669)
5* Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
with respect to the legality of the securities being
registered
10.1* Employment Agreement between The Aristotle Corporation and Paul
McDonald dated December 1, 1998.
23.1* Consent of Arthur Andersen LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5)
24 Power of Attorney (filed in Part II of this Registration
Statement)
___________
+ Previously filed herewith.
* Filed herewith.
Item 17. Undertakings
- ----------------------
A. Rule 415 Offering
-----------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the 1933
Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the 1934 Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the 1933 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.
II-2
<PAGE>
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
B. Filings Incorporating Subsequent Exchange Act Documents by Reference
--------------------------------------------------------------------
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the 1933 Act, each filing of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the 1934 Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the 1934 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.
C. Request for Acceleration of Effective Date or Filing of Registration
--------------------------------------------------------------------
Statement on Form S-8
---------------------
Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the 1933 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 1933 Act
and will be governed by the final adjudication of such issue.
II-3
<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-3 and has duly caused this Amendment
No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in New Haven, Connecticut on
December 15, 1998.
THE ARISTOTLE CORPORATION
By: /s/ John J. Crawford
-----------------------------
John J. Crawford
President, Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints John J. Crawford and Paul McDonald or any of them, his
attorney-in-fact, each with the power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration statement (or
any other registration statement for the same offering that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as
amended), and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as full to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them or their or his
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ John J. Crawford President, Chief December 8, 1997
----------------------------- Executive Officer,
John J. Crawford Chairman of the Board
and Director (principal
executive officer)
/s/ Paul McDonald Chief Financial Officer December 8, 1997
----------------------------- and Secretary
Paul McDonald (principal financial and
accounting officer)
/s/ Barry R. Banducci Director December 8, 1997
-----------------------------
Barry R. Banducci
/s/ Robert L. Fiscus Director December 8, 1997
-----------------------------
Robert L. Fiscus
/s/ Betsy Henley-Cohn Director December 8, 1997
-----------------------------
Betsy Henley-Cohn
/s/ Alfred A. Kniberg Director December 8, 1997
-----------------------------
Alfred A. Kniberg
II-4
<PAGE>
/s/ Daniel J. Miglio Director December 8, 1997
-----------------------------
Daniel J. Miglio
/s/ Sharon M. Oster Director December 8, 1997
-----------------------------
Sharon M. Oster
/s/ John C. Warfel Director December 8, 1997
-----------------------------
John C. Warfel
II-5
<PAGE>
THE ARISTOTLE CORPORATION
-------------------------
INDEX TO EXHIBITS FILED WITH
FORM S-3 REGISTRATION STATEMENT
Exhibit
Number Description
- ------- -----------
4.1 Restated Certificate of Incorporation of The Aristotle
Corporation, incorporated herein by reference to Exhibit 3.1 to
the Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997 (File Number 0-14669)
4.2 Amended and Restated Bylaws of the Registrant, incorporated
herein by reference to Exhibit 3.2 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 1997
(File Number 0-14669)
4.3 Certificate of Powers, Designations, Preferences and Relative,
Participating, Optional and other Special Rights of the Series E
Convertible Preferred Stock of the Registrant, incorporated
herein by reference to Exhibit 4.1 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1997
(File Number 0-14669)
4.4 Certificate of Powers, Designation, Preferences and Relative,
Participating, Optional and other Special Rights of Series F,
G, and H Preferred Stock of the Registrant, incorporated herein
by reference to Exhibit 4.2 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1997 (File
Number 0-14669)
4.5+ Registration Rights Agreement dated as of April 11, 1994
between the Registrant and the shareholders listed on Exhibit A
thereto
4.6 Registration Rights Agreement dated as of October 22, 1997
between The Aristotle Corporation and Geneve Corporation,
incorporated herein by reference to Exhibit 10.6 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 (File Number 0-14669)
4.7 Letter Agreement dated as of September 15, 1997 among
The Aristotle Corporation, Aristotle Sub, Inc. and certain
stockholders, incorporated herein by reference to Exhibit 10.7 to
the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997 (File Number 0-14669)
5* Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
with respect to the legality of the securities being
registered
10.1* Employment Agreement between The Aristotle Corporation and Paul
McDonald dated December 1, 1998.
23.1* Consent of Arthur Andersen LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(see Exhibit 5)
24 Power of Attorney (filed in Part II of this Registration
Statement)
_____________________
+ Previously filed herewith.
* Filed herewith.
II-6
<PAGE>
Exhibit 5
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
701 Pennsylvania Avenue, N.W. Telephone: 617/542-6000
Washington, D.C. 20004 Fax: 617/542-2241
Telephone: 202/434-7300 www.Mintz.com
Fax: 202/434-7400
Direct Dial Number
December 15, 1998
The Aristotle Corporation
27 Elm Street
New Haven, Connecticut 06511
Gentlemen:
We have acted as counsel to The Aristotle Corporation, a Delaware corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission of a Registration Statement on Form S-3 (the
"Registration Statement"), pursuant to which the Company is registering the
issuance under the Securities Act of 1933, as amended, of a total of 777,812
shares (the "Shares") of its common stock, $.01 par value per share (the "Common
Stock"). This opinion is being rendered in connection with the filing of the
Registration Statement. All capitalized terms used herein and not otherwise
defined shall have the respective meanings given to them in the Registration
Statement.
In connection with this opinion, we have examined the Company's Restated
Certificate of Incorporation and Amended and Restated By-Laws, all as currently
in effect; such other records of the corporate proceedings of the Company and
certificates of the Company's officers as we have deemed relevant; and the
Registration Statement and the exhibits thereto.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such copies.
Based upon the foregoing, we are of the opinion that (i) the Shares have been
duly and validly authorized by the Company and (ii) the Shares, when issued and
sold, will have been duly and validly issued, fully paid and non-assessable
shares of the Common Stock, free of preemptive rights.
Our opinion is limited to the General Corporation Laws of the State of
Delaware, and we express no opinion with respect to the laws of any other
jurisdiction. No opinion is expressed herein with respect to the qualification
of the Shares under the securities or blue sky laws of any state or any foreign
jurisdiction.
<PAGE>
We understand that you wish to file this opinion as an exhibit to the
Registration Statement, and we hereby consent thereto.
Very truly yours,
/s/ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
--------------------------------------------------------
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
<PAGE>
EXHIBIT 10.1
THE ARISTOTLE CORPORATION
27 ELM STREET
NEW HAVEN CONNECTICUT 06510
December 1, 1998
Paul McDonald
21 Pent Road
Weston, Connecticut 06883
Dear Paul:
We are pleased that you have decided to remain as the Vice President and
Chief Financial Officer of The Aristotle Corporation (the "Company") following
the sale of the assets of The Strouse, Adler Company ("Strouse, Adler"). This
letter will serve to memorialize some of the terms of your employment by the
Company.
I. Employment. You shall be employed by the Company as its Vice President
----------
and Chief Financial Officer. During your employment you will devote your
full time efforts and attention to the business and affairs of the
Company and perform such duties as may be assigned to you by the
President or the Board of Directors of the Company including, without
limitation, the identification of opportunities for the Company to
purchase the assets or stock of a business (a "New Business).
II. Term. Your employment hereunder shall continue until November 30, 2000.
----
Notwithstanding the foregoing, (a) the Company may terminate your
employment (1) without cause on not less than thirty days' notice or (2)
for good cause (as defined herein) and, (b) after the Company's or its
subsidiary's acquisition of a New Business, you may, for any reason,
terminate your employment with the Company on not less than thirty days'
notice.
III. Compensation. Your salary will be $149,000 per annum (the "Base Salary").
------------
You shall be entitled to such stock options and bonuses as the Board of
Directors in its sole discretion shall award.
IV. Benefits. You shall be entitled to the same benefits (i.e., vacation,
--------
sick time, retirement, disability, life and health insurance) as were
provided to you by Strouse, Adler.
V. Severance. In the event that your employment with the Company terminates
---------
for any reason other than good cause (as defined below) or your voluntary
termination of employment prior to the acquisition of the New Business
including, without limitation, your death, disability, the expiration of
the term of this agreement without mutual agreement to extend or renew
the agreement or any termination described in paragraphs II(a)(1) or
II(b) of this agreement, you shall be entitled to receive, as severance,
the continuation of your Base Salary for one year from the date of such
termination. For purposes of this agreement, "good cause" shall be
determined by the Board of Directors in good faith and shall mean only
the following:
<PAGE>
A. willful misconduct, in the course of your employment,
B. gross negligence, to the material detriment of the Company in
carrying out your duties as an employee, or
C. conviction of a crime or any other similar activity which will have
a materially adverse effect on the business or reputation of the
Company or you.
For purposes of this definition, all references to commissions of
acts shall be deemed to include omissions to take actions necessary
or appropriate under the circumstances.
VI. Confidential Information. During the course of your employment, you will
------------------------
have access to certain confidential information, including but not
limited to certain business plans or prospects, records, files,
memoranda, reports and the like, concerning the Company and its business
or prospective businesses, or disclosed to the Company by others under an
obligation of the Company to hold the same confidential ("Confidential
Information") You shall hold all Confidential Information as property of
the Company and hereby agree to maintain Confidential Information as
confidential. At such time as your employment by the Company is
terminated, you agree to promptly return to the Company, at its request,
all Confidential Information (and any copies, reproductions, digests,
abstracts or the like of such Confidential Information), including any
material stored on computer disks or tapes, in your possession or control
and to destroy any computer entries or storage files relating thereto.
You hereby agree that you will not, during the term of your employment
with the Company or afterwards, use the Confidential Information for
yourself or for others (other than the Company), copy such information or
disclose it to any person or entity; provided, that after the termination
-------- ----
of your employment with the Company, the foregoing restrictions shall not
apply to Confidential Information which, at the time of its disclosure by
you, is public knowledge through no action or omission by you or on your
behalf and which has not been disclosed to the public by any third party
in violation of any obligation to maintain its confidentiality.
VII. Non-Competition. For one year after the termination of your employment,
---------------
you shall not, other than on behalf of the Company or its affiliates and
except as a passive investor in less than 5% of the securities of a
publicly-held company, directly or indirectly, own, manage, operate,
control or participate in the ownership, management, operation or control
of, serve as an officer, director, partner, employee, agent, consultant,
advisor, developer or in any similar capacity with, or have any financial
interest in, or aid or assist anyone else in, the conduct of, any
business or business activity which is competitive with the New Business
in any jurisdiction in which the New Business conducts or solicits
business. After the termination of your employment the scope of the
noncompetition agreement in the immediately preceding sentence can be
varied or modified by the written agreement of the Company and you or may
be unilaterally reduced in duration, geographic scope and/or business
scope by the Company.
<PAGE>
VIII. Remedies. You recognize and agree that the Company will suffer
--------
irreparable harm as a result of a breach by you of Paragraphs VI or VII
of this contract for which money damages would be inadequate.
Accordingly, in the event of any actual or threatened breach by you of
any of such provisions, the Company shall, in addition to any other legal
remedies permitted by applicable law, be entitled to equitable remedies,
including, without limitation, specific performance, a temporary
restraining order or a permanent injunction, in any court of competent
jurisdiction to prevent or otherwise restrain a breach hereof without the
necessity of proving damages and to recover all costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred in
enforcing this contract. Such relief shall be in addition to and not in
substitution for any other remedies available to the Company. You further
acknowledge and agree that the provisions of Paragraphs VI or VII of this
contract are reasonable, both with respect to length of duration and
geographic scope and scope of restricted activities. You and the Company
mutually agree that the provisions of this agreement are severable and
separate and that the unenforceability of any specific provision shall
not affect the validity of any other provision hereof. In the event that
a court of competent jurisdiction should determine that the time or
geographic restrictions or scope of restricted activities are
unreasonable in their scope, then, and in that event, the parties hereby
authorize and empower such court to insert reasonable limitations and
enforce the restrictions in accordance therewith so as to achieve as
nearly as possible the business purpose and intent of such restrictions.
IX. Miscellaneous. This Agreement shall inure to the benefit of the Company,
-------------
its successors, assigns and designees, and is binding upon your assigns,
executors and administrators and other legal representatives. This
agreement may not be assigned by either party without the consent of the
other party. This contract shall be governed by and interpreted in
accordance with the laws of the State of Connecticut. Other than seeking
a temporary restraining order or permanent injunction to enforce your
obligations under Paragraphs VI or VII hereof any dispute in connection
with this contract or related to or arising out of your employment with
the Company shall be submitted to binding arbitration in New Haven,
Connecticut before a single arbitrator under the rules of the American
Arbitration Association.
Please acknowledge your acceptance of the foregoing in the space provided
below.
ARISTOTLE CORPORATION
/s/ John J. Crawford
--------------------
By: John Crawford
Its Chief Executive Officer, President and
Chairman of the Board
Accepted by:
/s/ Paul McDonald
- -----------------
Paul McDonald
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated September 18, 1998
included in The Aristotle Corporation's Form 10-K for the year ended June 30,
1998 and to all references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
December 16, 1998
