<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
INTERVISUAL BOOKS, INC.
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
460918105
(CUSIP Number)
Steven D. Ades
Intervisual Books, Inc.
2716 Ocean Park Blvd., Suite 2020
Santa Monica, California 90405
(310) 396-8708
(Name, address and telephone number of person
authorized to receive notices and communications)
May 14, 1999
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g) check the following box
[ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of this schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
- -----------------
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
CUSIP No. 460918 10 5 Schedule 13D Page 2 of 5 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Mr. Steven D. Ades and Laurie Levit, individually and as trustees
of the Steven Ades and Laurie Levit Revocable Family Trust
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF, OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
614,940
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
614,940
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
614,940
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
N/A
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.4%, based on 5,885,115 shares of common stock outstanding as calculated
based on the number of shares reported by the Issuer as issued and
outstanding as of March 31, 1999, plus the shares issued by Issuer in
connection with the Issuer's acquisition of Fast Forward Marketing, Inc.
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE> 3
CUSIP No. 460918 10 5 Schedule 13D Page 3 of 5
- --------------------------------------------------------------------------------
Item 1. Security and Issuer
This Schedule 13D relates to the common stock, no par value (the
"Common Stock"), of Intervisual Books, Inc. (the "Issuer"). The
Issuer's principal executive offices are located at 2716 Ocean
Park Boulevard, Suite 2020, Santa Monica, California 90405.
Item 2. Identity and Background
This Schedule 13D is being filed by Steven D. Ades and Laurie
Levit (the "Reporting Persons"), individually and as Trustees of
the Steven Ades and Laurie Levit Revocable Family Trust (the
"Ades/Levit Family Trust").
(a) The principal business office of the Reporting Persons is
2716 Ocean Park Boulevard, Suite 2020, Santa Monica,
California 90405.
(b) The principal occupation of Mr. Ades is an executive
officer of the Issuer. Mr. Ades will also become a
director of the Issuer. The principal occupation of Ms.
Levit is student.
(c) Neither Steven D. Ades nor Laurie Levit has during the
last five years been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a
result of which proceeding was or is subject to a
judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding
any violation with respect to such laws.
(d) Steven D. Ades and Laurie Levit are citizens of the United
States of America.
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Persons acquired 594,940 shares of Common Stock in
1999 as a result of the merger of Fast Forward Marketing, Inc., a
California corporation ("Fast Forward") with and into a
wholly-owned subsidiary of the Issuer (the "Merger"). The
consideration for the 594,940 shares of Common Stock acquired as
a result of the Merger was the shares of Fast Forward held by the
Ades/Levit Family Trust. The Reporting Persons also acquired
20,000 shares of Common Stock in open market purchases using the
Reporting Persons' personal funds.
Item 4. Purpose of Transaction.
The Reporting Persons acquired the Common Stock reported herein
for investment purposes based on the belief that such stock
represents an attractive investment opportunity. The Reporting
Persons may make additional purchases of Common Stock or may
engage in dispositions of all or a portion of the Common Stock
presently owned or hereafter acquired by them, either in the open
market or in private transactions, depending on their evaluation
of the Issuer's business, prospects and financial condition, the
market for the Common Stock, other investment opportunities,
general economic conditions, money and stock market conditions
and other future developments and factors that the Reporting
Persons deem material to their investment decisions.
<PAGE> 4
CUSIP No. 460918 10 5 Schedule 13D Page 4 of 5
- --------------------------------------------------------------------------------
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Persons beneficially own 614,940
shares of Common Stock or approximately 10.1% of the Issuer's
outstanding Common Stock (based on the number of shares
outstanding as of March 31, 1999, plus the shares issued by the
Issuer in connection with the Merger).
(b) The Reporting Persons each have the power to vote and
direct the disposition of the shares reported herein.
(c) Under the terms of the Merger, 594,940 shares of the
Issuer's Common Stock shall be issued to the Ades/Levit Family
Trust. As reported in Item 6 below, in connection with the terms
of the Merger, the Issuer granted to Mr. Ades options to purchase
140,000 shares of the Issuer's Common Stock. During the last
sixty days, the Reporting Persons acquired the following shares
of Issuer's Common Stock in open market purchases at the prices
per share listed below:
<TABLE>
<CAPTION>
DATE SHARES PURCHASED PRICE PER SHARE
------- ---------------- ---------------
<S> <C> <C> <C>
4/14/99 5,000 $1.25
5/10/99 1,000 $1.00
5/12/99 9,000 $1.03
</TABLE>
(d) Except as stated in this Item 5, to the best knowledge
of the Reporting Persons, no other person has the right to
receive or the power to direct the receipt of dividends from the
shares of Common Stock beneficially owned by the Reporting
Persons.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
In connection with the Merger, the Issuer granted Mr. Ades
options to purchase 140,000 shares of Common Stock at an exercise
price of $1.25 per share. These options vest in three annual
increments. A copy of the option agreement for this grant of
stock options is attached as an exhibit to this Schedule 13D and
is hereby incorporated herein by this reference.
In connection with the Merger, Reporting Persons entered into a
Restricted Stock Agreement with the Issuer and certain other
parties (the "Restricted Stock Agreement"). Except for a sale or
merger of the Issuer or the occurrence of certain other events,
the Restricted Stock Agreement limits the ability of the
Ades/Levit Family Trust to transfer more than 59,494 shares of
Common Stock in any twelve-month period. A copy of the Restricted
Stock Agreement is attached as an exhibit to this Schedule 13D
and is hereby incorporated herein by this reference.
Also in connection with the Merger, The Hunt Family Trust entered
into an Amended and Restated Voting Agreement (the "Voting
Agreement") with Steven D. Ades, Steven D. Ades and Laurie Levit,
Trustees of the Ades/Levit Family Trust. According to the Voting
Agreement, The Hunt Family Trust agreed to vote its shares at the
annual meeting of shareholders of the Issuer such that Steven
Ades and a "qualified person" (as defined in the Voting
Agreement) would be elected to the Issuer's Board of Directors.
In the Voting Agreement, Steven Ades and the Ades/Levit Family
Trust agreed to vote their shares of the Issuer's Common Stock in
favor of those persons recommended or nominated for election for
<PAGE> 5
CUSIP No. 460918 10 5 Schedule 13D Page 5 of 5
- --------------------------------------------------------------------------------
director by the Issuer's Board of Directors. In the event of
cumulative voting for the election of directors, Steven Ades and
the Ades/Levit Family Trust agreed, to the extent requested by
The Hunt Family Trust, either to distribute their votes equally
between Steven Ades and the "qualified person" selected in
accordance with the Voting Agreement or equally among each
nominee for director supported by the Issuer's Board of
Directors. As long as Steven Ades is a director, employee or
consultant of the Issuer, Steven Ades and the Ades/Levit Family
Trust agreed not to vote for or otherwise support in any manner
any nominees for the Issuer's Board of Directors other than those
nominees selected by the Issuer's Board of Directors. The Voting
Agreement terminates upon the occurrence of certain events. A
copy of the Voting Agreement is attached hereto as an exhibit and
is hereby incorporated herein by this reference.
The Reporting Persons disclaim beneficial ownership of any
securities held by Waldo H. Hunt, Patricia E. Hunt and the Hunt
Family Trust.
Item 7. Material to be Filed as Exhibits.
99.1 Stock Option Agreement dated as of May 11, 1999, between
Intervisual Books, Inc. and Steven D. Ades.
99.2 Restricted Stock Agreement dated as of May 13, 1999 by and
among Intervisual Books, Inc., Steven D. Ades and Laurie
Levit, as Co-Trustees of the Steven Ades and Laurie Levit
Revocable Family Trust, Rhonda Sapirstein, Barbara Abella,
Steven Selsky and Steven Wallace.
99.3 Amended and Restated Voting Agreement dated as of May
19, 1999 by and among Steven D. Ades, Steven D. Ades and
Laurie Levit, as Co-Trustees of the Steven Ades and Laurie
Levit Revocable Family Trust and Walter and Patricia Hunt,
as Co-Trustees of The Hunt Family Trust.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 24, 1999 By: /s/ STEVEN D. ADES
--------------------------------
Steven D. Ades, Individually and
as Trustee of the Steven Ades
and Laurie Levit Family Trust
UTD April 18, 1991
By: /s/ LAURIE LEVIT
--------------------------------
Laurie Levit, Individually and
as Trustee of the Steven Ades
and Laurie Levit Family Trust
UTD April 18, 1991
<PAGE> 1
EXHIBIT 99.1
Execution Copy
INTERVISUAL BOOKS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT (the "Agreement") between INTERVISUAL BOOKS, INC., a
California corporation (the "Company"), and STEVEN ADES ("Employee") is entered
into as of the 11TH day of May, 1999.
RECITALS
A. Pursuant to an Employment Agreement bearing even date herewith
between the Company and Employee (the "Employment Agreement"), the Company has
agreed to grant to Employee this option to purchase shares of the Company's
common stock.
B. As a condition precedent to the effectiveness of this Agreement,
Employee must commence full time employment with the Company pursuant to the
terms of the Employment Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
I. GRANT. The Company hereby grants to Employee the right to
purchase up to 140,000 shares of common stock of the Company at a price of $1.25
per share (which price equals the fair market value of the Company's common
stock as of the date of the grant), on the terms and conditions set forth
herein. This option is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code, as amended, and is not made
pursuant to any Company stock option plan. Employee agrees that Employee and any
other person who may be entitled hereunder to exercise this option shall be
bound by all terms and conditions of this Agreement.
This Agreement and the grant of the option herein shall not be
effective unless and until Employee commences full time employment with the
Company pursuant to the terms of the Employment Agreement. If Employee does not
commence full time employment with the Company pursuant to the terms of the
Employment Agreement, this Agreement and the option granted herein shall be null
and void, and the parties hereto shall be deemed to have no rights or
obligations under this Agreement whatsoever.
<PAGE> 2
II. EXERCISABILITY. The option granted herein shall become
exercisable at the following times and in the following amounts:
The option shall become exercisable in cumulative increments of
46,667 shares on each of May 11, 2000, and May 11, 2001 and
46,666 shares on May 11, 2002. The option granted hereunder
shall lapse and expire on the seventh (7th) anniversary of the
date hereof.
If Employee does not purchase the full number of shares he is
entitled to purchase in any one year, the right to purchase such shares carries
over to the subsequent years during the term of this option.
Notwithstanding the foregoing, this option shall automatically
become fully exercisable upon a "Change in Control of the Company," as such term
is defined below.
For purposes of this Agreement, a "Change in Control of the
Company" shall be deemed to have occurred if:
a. the shareholders of the Company approve a definitive agreement
to sell, transfer, or otherwise dispose of all or substantially all of the
Company's assets and properties; or
b. any "person" (as such term is used in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934), other than the Company or any "person" who
as of the date this Agreement is a director or officer of the Company (including
any trust of such director or officer), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities;
provided, however, that the following shall not constitute a "Change in Control"
of the Company:
(1) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of a conversion or exchange
privilege in respect of outstanding convertible or exchangeable
securities);
(2) any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or
(3) upon the death of any person who as of the date of this
Agreement is a director or officer of the Company, the transfer (A)
by testamentary disposition or the laws of intestate succession to
the estate or the legal beneficiaries or heirs of such person, or
(B) by the provisions of any trust to the beneficiaries thereof of
the securities of the Company beneficially owned by such director or
officer of the Company; or
2
<PAGE> 3
c. the shareholders of the Company approve the dissolution or
liquidation of the Company or a definitive agreement to merge or consolidate the
Company with or into another entity in which the Company is not the continuing
or surviving corporation or pursuant to which any shares of the Company's stock
would be converted into cash, securities or other property of another entity,
other than a merger of the Company in which holders of the Company's common
stock immediately prior to the merger have the same proportionate ownership of
common stock (or equivalent securities) of the surviving entity immediately
after the merger as immediately before.
III. Exercise. This option may be exercised on the terms and
conditions contained herein by giving ten (10) days' prior written notice of
exercise to the Company, specifying the number of shares to be purchased and the
price to be paid therefor and by delivering a check in the amount of the
purchase price payable to the Company. The purchase price may also be paid, in
whole or in part, by delivery to the Company of outstanding shares of the
Company's common stock previously held by the Employee valued at "Fair Market
Value".
For the purposes of this Agreement, "Fair Market Value" as of a
certain date (the "Determination Date") means: (a) the closing price of a share
of the Company's common stock on the principal exchange on which shares of the
Company's common stock are then trading, if any, on the Determination Date, or,
if shares were not traded on the Determination Date, then on the nearest
preceding trading day during which a sale occurred; or (b) if such stock is not
traded on an exchange but is quoted on NASDAQ or a successor quotation system,
(i) the last sales price (if the stock is then listed as a National Market Issue
under The Nasdaq National Market System) or (ii) the mean between the closing
representative bid and asked prices (in all other cases) for the stock on the
Determination Date as reported by NASDAQ or such successor quotation system; or
(c) if such stock is not publicly traded on an exchange and not quoted on NASDAQ
or a successor quotation system, the mean between the closing bid and asked
prices for the stock, on the Determination Date, as determined in good faith by
the Board; or (d) if the Company's stock is not publicly traded, the fair market
value established in good faith by the Board.
3
<PAGE> 4
IV. TERMINATION OF EMPLOYMENT.
(a) TERMINATION BY EMPLOYEE. If Employee's employment is terminated
by Employee, Employee shall have ninety (90) days following the "Date of
Termination" (as defined in Section 6(f) of the Employment Agreement) to
exercise this option, but only to the extent that this option was exercisable on
such Date of Termination.
(b) TERMINATION FOR CAUSE. If Employee's employment is terminated
by the Company for "Cause" (as defined in Section 6(a) of the Employment
Agreement), neither Employee nor his estate shall be entitled to exercise this
option after the Date of Termination.
(c) DEATH OR INCAPACITY. If Employee's employment is terminated for
death or "Incapacity" (as defined in Section 6(c) of the Employment Agreement),
Employee or Employee's estate, as the case may be, shall have the right for six
(6) months following the Date of Termination to exercise this option, but only
to the extent that this option was exercisable on such Date of Termination.
(d) OTHER. If Employee's employment is terminated for any reason
other than as set forth in Sections 4(a), (b) and (c) above, this option shall
automatically become fully exercisable on the Date of Termination, and Employee
shall have ninety (90) days following such Date of Termination to exercise this
option.
V. TRANSFERABILITY. This option except transfer to the "Ades Family
Trust" shall be transferable only by will or by the law of descent and
distribution to the estate (or other personal representative) of Employee and
shall be exercisable during Employee's lifetime only by him. Except as otherwise
provided herein, any attempt at alienation, assignment, pledge, hypothecation,
transfer, sale, attachment, execution or similar process, whether voluntary or
involuntary, with respect to all or any part of this option or any right under
this Agreement, shall be null and void and, at the Company's option, shall cause
Employee's rights under this Agreement to terminate.
VI. WITHHOLDING REQUIREMENTS. In the event the Company determines that
it is required to withhold state or Federal income taxes as a result of the
exercise of this option, Employee shall be required, as a condition to the
exercise hereof, to make arrangements satisfactory to the Company to enable it
to satisfy such withholding requirements.
4
<PAGE> 5
VII. RIGHTS AS A STOCKHOLDER. Employee, or any permitted transferee of
Employee, shall have no rights as a stockholder with respect to any shares
covered by this option until the date of the issuance of a stock certificate for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions or
other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 8 of this Agreement. This
Agreement shall not confer upon Employee any right of continued employment by
the Company or interfere in any way in the Company's right to terminate
Employee.
VIII. RECAPITALIZATION. Subject to any required action by stockholders,
the number of shares of Common Stock covered by this option and the exercise
price thereof shall be proportionately adjusted for any increase or decrease in
the number of issued shares of common stock resulting from a subdivision or
consolidation of such shares or the payment of a stock dividend (but only of
common stock) or any other increase or decrease in the number of issued shares
of common stock effected without receipt of consideration by the Company.
Subject to any required action by stockholders, if the Company is the surviving
corporation in any merger or consolidation, this option shall pertain and apply
to the securities to which a holder of the number of shares of common stock
subject to the option would have been entitled.
The foregoing adjustments shall be made by the Company's Board
of Directors, whose determination shall be conclusive and binding on the Company
and Employee.
Except as expressly provided in this Section 8, Employee shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class, or by reason of any
dissolution, liquidation, merger, consolidation or spin-off of assets or stock
of another corporation, and any issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares subject to this option or the exercise price thereof.
This option shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.
5
<PAGE> 6
IX. SECURITIES ACT AND OTHER REGULATORY REQUIREMENTS. This option is not
exercisable, in whole or in part, and the Company is not obligated to sell any
shares of the Company's common stock subject to this option, if such exercise or
sale, in the opinion of counsel for the Company, would violate the Securities
Act of 1933 (or any other federal or state statutes having similar requirements)
as it may be in effect at that time.
Further, the Board of Directors of the Company may require as a
condition of issuance of any shares under this option that Employee furnish a
written representation that he is acquiring the shares for investment and not
with a view to distribution to the public. The certificate evidencing any shares
issued pursuant to this option shall bear such restrictive legends as required
by federal or state law.
Further, the Board of Directors of the Company may decide, in its
sole discretion, that the listing or qualification of the shares of stock
subject to the option under any securities exchange requirements or under any
applicable law is necessary or desirable. If such a decision is made, this
option shall not be exercisable in whole or in part unless and until such
listing, qualification, consent or approval shall have been effected or obtained
free of any conditions that are not acceptable to the Board of Directors of the
Company.
X. EFFECT OF EXERCISE. Upon the exercise of all or any part of this
option, the number of shares of common stock subject to the option under this
Agreement shall be reduced by the number of shares with respect to which such
exercise is made.
XI. RIGHT OF FIRST REFUSAL. If Employee desires to transfer (except for
a transfer to the "Ades Family Trust") any shares of common stock which he has
acquired pursuant to the exercise of the option granted herein ("Shares"),
Employee shall deliver to the Company written notice of his intention to
transfer such Shares (the "Notice") together with either a copy of a signed and
binding offer by the proposed transferee (a "Negotiated Sale") or a statement
that such Shares are to be sold into the public market at Fair Market Value at
the time of sale (a "Market Sale"). The Notice for a Negotiated Sale shall state
the name and address of the proposed transferee, the number of Shares to be
transferred, the price per Share, and the other terms of such transfer. The
Notice for a Market Sale shall state the expected date of the proposed sale and
the number of Shares to be sold. For fifteen (15) days following delivery of the
Notice, the Company shall have the option to purchase all (but not less than
all) of the Shares
6
<PAGE> 7
proposed to be sold by Employee at the price and terms stated in the Notice. In
the event of a Market Sale, such purchase price shall be the Fair Market Value
of the Shares on the day the Company exercises its option but not less than Fair
Market Value of the Shares on the first applicable day after receipt of writen
notice of the Employee's intention to transfer such Shares. The "applicable day"
is defined as the first day after dilvery of notice to the Company that the
Employee could have sold the Shares on the open market.Such option shall be
exercisable by delivery of written notice to Employee within such fifthteen (15)
day period. Any Shares not purchased by the Company may, for a period of sixty
(60) days commencing on the expiration of the Company's option to purchase such
Shares, be sold to the proposed transferee at the price and upon the terms
specified in the Notice. Shares which are not transferred by Employee within
such sixty (60) day period shall again become subject to the notice and option
provisions of this Section 11. The certificate evidencing any Shares issued
pursuant to this option shall bear a restrictive legend stating that such Shares
are subject to the right of first refusal set forth in this Section 11.
XII. NOTICES. Any notice or other communication required or permitted
hereunder or by law shall be validly given or made only if in writing and
delivered in person to an officer or duly authorized representative of the other
party, or deposited in the United States mail, duly certified or registered,
return receipt requested, postage prepaid, and addressed to the party to whom
intended. If sent to the Company, it shall be addressed in care of the
President, 2850 Ocean Park Boulevard, Suite 225, Santa Monica, California 90405,
and if sent to Employee, it shall be addressed to Employee's address on file
with the Company on the date of such notice. If sent by mail, notice shall be
deemed given two days after deposit of such notice in the mail and in accordance
with this section. Any party may from time to time, by written notice to the
other, designate a different address for notice which shall be substituted for
that specified above.
XIII. CHOICE OF LAW; COUNTERPARTS. This Agreement, and all rights and
obligations hereunder, shall be governed by the laws of the State of California
without the regard to conflict of law principles. This Agreement may be executed
in one or more counterparts, each of which when so executed and delivered shall
be deemed an original, but all such counterparts together shall constitute but
one and the same instrument.
7
<PAGE> 8
XIV. SUCCESSOR. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs,
beneficiaries, executors and administrators.
XV. PARAGRAPH HEADINGS; EMPLOYMENT. Paragraph headings are for
convenience only and are not part of the context. This Agreement shall not
obligate the Company or any affiliate to employ Employee for any period of time
nor does this Agreement constitute a contract or agreement for employment.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
written above.
INTERVISUAL BOOKS, INC.
By: /s/ WALDO H. HUNT
-------------------------------
Name: Waldo H. Hunt
Title: Chairman of the Board
EMPLOYEE:
/s/ STEVEN ADES
---------------------------------
Steven Ades
8
<PAGE> 1
EXHIBIT 99.2
RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this "Agreement") is made and entered
into as of May 13, 1999, by and among INTERVISUAL BOOKS, INC. (the "Company"),
and Steven D. Ades and Laurie Levit, as Co-Trustees of the Steven Ades and
Laurie Levit Revocable Family Trust UTD April 18, 1991 ("Trust"), Rhonda
Sapirstein, an individual ("Sapirstein"), Barbara Abella, an individual
("Abella"), Steven Selsky, an individual ("Selsky") and Steven Wallace, an
individual ("Wallace"; Sapirstein, Abella, Trust, Selsky and Wallace sometimes
hereinafter are referred to collectively as "Shareholders" and individually as
"Shareholder").
RECITALS
A. In connection with the merger of Fast Forward Marketing, Inc. ("FFM")
with and into a subsidiary of the Company pursuant to the Agreement and Plan of
Merger dated March 29, 1999 (the "Merger Agreement") among Company, Steven D.
Ades, FFM, FFM Acquisition Corp. and Trust, Company shall, among other things,
issue to the Shareholders an aggregate of 670,000 shares (the "Original Shares")
of the Company's common stock, no par value per share. All capitalized terms
used but not defined herein shall have the meaning ascribed to such terms in the
Merger Agreement.
B. A portion of the Original Shares are being issued to Selsky, Wallace,
Sapirstein and Abella pursuant to Section 1.12 of the Merger Agreement and the
remainder are being issued to the Trust as a result of the Merger. After such
issuances, the Original Shares will be held as follows:
Trust 594,940 shares (the "Trust Shares")
Sapirstein 4,662 shares (the "Sapirstein Shares")
Abella 4,662 shares (the "Abella Shares")
Selsky 51,749 shares (the "Selsky Shares")
Wallace 13,987 shares (the "Wallace Shares")
The definitions of Trust Shares, Sapirstein Shares, Abella Shares, Selsky Shares
and Wallace Shares shall include any common stock of Company received by the
applicable Shareholder as stock dividends, in connection with stock splits or
recombinations or otherwise due solely to such Shareholder's ownership of the
Trust Shares, Sapirstein Shares, Abella Shares, Selsky Shares and Wallace
Shares, respectively. The Trust Shares, Sapirstein Shares, Abella Shares, Selsky
Shares and Wallace Shares shall collectively be referred to as the "Shares".
C. As a condition to the closing of the transactions contemplated by the
Merger Agreement, Shareholders have agreed to execute and deliver this
Agreement.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein, the parties hereto agree as follows:
1. General Restrictions on Transfer.
A. During the term of this Agreement, no Shareholder will directly
or indirectly sell, pledge, mortgage, give, transfer, create a security interest
or lien, place in a trust, assign or in any other way encumber or dispose of (in
each case, a "Transfer") any Shares or any interest in such Shares or the stock
certificate or certificates representing any Shares, except in accordance with
the terms and conditions of Section 1(C) below and applicable federal and state
securities laws.
B. Any Transfer of any interest in the Shares purported to have been
effected by any Shareholder shall require the prior written consent of the
Company which the Company shall withhold, and shall not register upon its
records, unless such Transfer is made in accordance with the terms and
provisions of this Agreement and applicable federal and state securities laws.
Any such Transfer which is not made in accordance with the terms and conditions
of this Agreement shall be void and shall not be binding upon the Company.
C. Subject to applicable federal and state securities laws, the
following Transfers may be made without any violation of this Agreement and
without any consent of the Company:
(i) In any subsequent twelve-month period beginning on the date
hereof and on each year anniversary of the date hereof, the Shareholders will
each be permitted to transfer up to ten percent (10%) of the shares they receive
such that the Trust may Transfer up to 59,494 shares of Trust Shares, Sapirstein
may Transfer up to 466 shares of the Sapirstein Shares, Abella may Transfer up
to 466 shares of the Abella Shares, Selsky may Transfer up to 5,174 shares of
the Selsky Shares and Wallace may Transfer up to 1,398 shares of the Wallace
Shares during each twelve-month period;
(ii) Each Shareholder may Transfer his or her respective Shares
to a trust for the benefit of himself or herself or his or her immediate family,
provided the trustee of such trust acknowledges in a written agreement
satisfactory to the Company that such Shares are subject to this Agreement;
(iii) If any Shareholder becomes disabled or mentally unable to
deal with his or her affairs and a guardian is appointed for such Shareholder, a
Transfer of title to the guardian shall not violate this Agreement as long as
the guardian acknowledges that the Shares are held subject to this Agreement;
(iv) Transfers to the Company; and
(v) Transfers to a third party or parties upon the occurrence of
a Liquidity Event (defined below).
D. Notwithstanding anything contained herein to the contrary, the
respective general restrictions on transfer contained in this Section 1 shall
terminate with regard to each of Sapirstein, Abella, Selsky and Wallace upon
their respective termination of employment from the Company or its subsidiaries.
The termination of employment of one of the above individuals shall not
terminate the general restrictions applicable to the other individuals and the
Trust.
-2-
<PAGE> 3
2. Liquidity Event.
"Liquidity Event" shall mean (a) the affirmative vote of the
shareholders holding a majority of the Company's common stock to effect (i) a
merger or consolidation by the Company with or into any other entity, or (ii) a
sale, lease or other disposition of all or substantially all of the Company's
assets and properties in a single transaction or in a series of related
transactions to an unaffiliated third party purchaser or (iii) a voluntary or
involuntary liquidation, dissolution or winding up of the Company, or (b) the
occurrence of a Change of Control (as hereinafter defined). A "Change of
Control" shall occur when any "person" (as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended), other than the
Company or any "person" who as of the date of this Agreement is a director or
officer of the Company (including any trust of such director or officer), is or
becomes the "beneficial owner" of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities; provided, however, that the following shall not
constitute a "Change of Control":
(a) any acquisition directly from the Company;
(b) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company; or
(c) upon the death of any person who as of the date of this
Agreement is a director or officer of the Company, the transfer (a) by
testamentary disposition or the laws of intestate succession to the estate or
the legal beneficiaries or heirs of such person, or (b) by the provisions of any
trust to the beneficiaries thereof of the securities of the Company beneficially
owned by such director or officer of the Company.
3. Transfers by Court Order or Operation of Law.
Any person who becomes the owner of, or acquires a right to hold any
interest in, any Shares by reason of a judgment against any Shareholder,
including a judgment of divorce or other marital dissolution, shall obtain no
rights to vote any Shares of the stock and shall obtain only an economic
interest in any amounts to be distributed from the Company with respect to the
Shares. The Company shall not recognize any Transfer to such person and shall
have the right, upon written notice to the person acquiring such an interest, to
acquire the Shares at their fair market value.
4. Stock Certificate Legends.
A copy of this Agreement shall be filed with the Secretary of the
Company and kept with the corporate records of the Company. Every certificate
representing Shares owned by Shareholders or issued in exchange for any such
certificate shall, until the expiration of this Agreement, bear upon its face
the following legend in addition to any legend otherwise required by law:
THE SALE OR TRANSFER OF SHARES EVIDENCED BY THIS
CERTIFICATE IS SUBJECT TO CERTAIN RIGHTS AND RESTRICTIONS
CONTAINED IN A RESTRICTED STOCK AGREEMENT DATED AS OF
MAY 13, 1999, AS IT MAY BE AMENDED FROM TIME TO TIME. A COPY
OF THIS AGREEMENT IS ON FILE AT THE OFFICE OF THE COMPANY.
-3-
<PAGE> 4
5. Investment Representations.
Each Shareholder hereby represents that he or she is acquiring his
or her respective Shares for his or her own account, not as a nominee or agent,
for investment and not with a view to, or for resale in connection with any
distribution or public offering thereof within the meaning of the Securities Act
of 1933 (the "Securities Act"). Each Shareholder understands that the Shares
have not been registered under the Securities Act by reason of a specific
exemption therefrom and, notwithstanding any provision contained in this
Agreement, may not be transferred or resold except pursuant to an exemption for
the registration and prospectus delivery requirements of the Securities Act.
Each Shareholder has been furnished with such materials and has been given
access to such information relating to Company as requested and has been
afforded the opportunity to ask questions regarding Company as such Shareholder
has found necessary to make an informed investment decision. Each Shareholder
has the knowledge and experience in financial and business matters and
investments in general that such Shareholder is capable of evaluating the merits
and risks of the transactions contemplated by this Agreement.
6. Termination of Restrictions.
All restrictions in this Agreement shall terminate on the earlier of
(a) May 13, 2002 and (b) the closing of a Liquidity Event.
7. Amendment and Modification.
This Agreement may be amended, modified or supplemented only by a
written agreement of all the parties to this Agreement.
8. Further Assurances.
Every party to this Agreement shall do and perform or cause to be
done and performed all additional or further acts and things and shall execute
and deliver all such other agreements, certificates, instruments or documents as
any other party to this Agreement may reasonably request to carry out this
intent and accomplish the purposes of this Agreement.
9. Incentive Compensation Plan.
Each of Sapirstein, Abella, Selsky and Wallace hereby agree and
acknowledge that the obligations of FFM under the Incentive Compensation Plan
and the Participation Agreements entered into with such persons pursuant
thereto, as modified, shall be satisfied in full in accordance with the
provisions of Section 1.12 of the Merger Agreement. Such persons further
acknowledge that the Company is obligated to withhold certain taxes from the
compensation delivered to such persons and agrees that the Company shall
withhold such taxes.
-4-
<PAGE> 5
10. Legal Representation.
Each Shareholder acknowledges that he or she is aware that the
legal, financial and related matters contained in this Agreement are complex and
that such person is free to seek independent professional guidance or counsel
with respect to this Agreement. Each Shareholder has either sought such guidance
or counsel or determined after reviewing this Agreement carefully that such
person waives such right. Each Shareholder acknowledges that he or she is not
relying upon any representation or advice from the Company (or any attorney for
the Company) about this Agreement, its contents or effect.
11. Governing Law.
This Agreement and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of the
State of California, United States of America.
12. Invalidity of a Single Provision.
The unenforceability or invalidity of any provision of this
Agreement shall not affect the validity or enforceability of the remainder of
this Agreement, nor shall the unenforceability under the laws of any particular
jurisdiction of a provision affect its enforceability under the laws of other
provisions.
13. Notices.
All notices and other communications under this Agreement shall be
in writing and unless otherwise provided herein shall be delivered personally or
by facsimile, or mailed by registered or certified mail with a return receipt
request to the parties at the addresses set forth below their signatures to this
Agreement. Notices to the Company shall be sent to the Company at its address on
the signature pages of this Agreement with a copy to Paul, Hastings, Janofsky &
Walker LLP, 17th Floor, 695 Town Center Drive, Costa Mesa, California
92626-1924, Attention: Stephen D. Cooke.
14. Headings and Execution in Counterparts.
The headings and captions contained in this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any provision of this Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute a single agreement.
[SIGNATURES ON FOLLOWING PAGE]
-5-
<PAGE> 6
[SIGNATURE PAGE - RESTRICTED STOCK AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Restricted Stock
Agreement to be executed as of the date first written above
"Company"
INTERVISUAL BOOKS, INC.
a California corporation
By: /s/ Waldo H. Hunt
-----------------------------------------
Name: Waldo H. Hunt
Title:Chairman and Chief Executive Officer
"Trust"
/s/ STEVEN D. ADES
---------------------------------------------------
Steven D. Ades, as Co-Trustee of the Steven Ades
and Laurie Levit Revocable Family Trust UTD
April 18, 1991
/s/ LAURIE LEVIT
---------------------------------------------------
Laurie Levit, as Co-Trustee of the Steven Ades and
Laurie Levit Revocable Family Trust UTD
April 18, 1991
"Sapirstein"
/s/ RHONDA SAPIRSTEIN
---------------------------------------------------
Rhonda Sapirstein
"Abella"
/s/ BARBARA ABELLA
---------------------------------------------------
Barbara Abella
"Selsky"
/s/ STEVEN SELSKY
---------------------------------------------------
Steven Selsky
"Wallace"
/s/ STEVEN WALLACE
---------------------------------------------------
Steven Wallace
-6-
<PAGE> 7
CONSENTS OF SPOUSES
Omitted
-7-
<PAGE> 1
EXHIBIT 99.3
AMENDED AND RESTATED VOTING AGREEMENT
THIS AMENDED AND RESTATED VOTING AGREEMENT (this "Agreement") is
entered into as of May 19, 1999, by and between Steven D. Ades ("Steven Ades"),
Steven D. Ades and Laurie Levit, Trustees of the Steven Ades and Laurie Levit
Revocable Family Trust UTD April 18, 1991 (the "Trust"; Steven Ades and the
Trust hereinafter sometimes are referred to collectively as "Ades") and Waldo H.
Hunt, Trustee of the Hunt Family Trust UTA May 30, 1980 ("Shareholder").
RECITALS
A. The parties hereto previously entered into a Voting Agreement
dated as of May 13, 1999 (the "Original Agreement") setting forth certain
obligations regarding the voting of their respective shares.
B. In order to clarify certain obligations of the parties relating
to the election of certain directors to the Board of Intervisual Books, Inc.
(the "Company"), the parties hereto desire to amend and restate the Original
Agreement as set forth in this Agreement. The parties acknowledge that each of
the parties has received good and valuable consideration for the purposes of
entering into this Agreement and that this Agreement shall be binding and
enforceable upon each of them.
AGREEMENT
1. Voting of Shares by Shareholder. Subject to Ades voting Ades'
shares of Company common stock in accordance with paragraph 2 below and the
other agreements contained in paragraph 2 below, Shareholder agrees that at the
annual meeting of shareholders of the Company immediately following the
Effective Time of the Merger and at each successive annual meeting thereafter,
provided that Steven Ades is employed by Company at such time, Shareholder shall
cause a sufficient number of outstanding shares of Company's common stock that
are owned by Shareholder as of the record date fixed for such meeting to be
voted in such a manner as to elect Steven Ades and a "qualified person" to the
Company's Board of Directors. For purposes of this paragraph, a "qualified
person" shall mean an individual initially designated by Steven Ades and who (i)
posses the skills and business acumen reasonably necessary to be an outside
independent director of a public company, (ii) is mutually acceptable to Steven
Ades and the Company's Board of Directors and which such nominee shall not be
Steven Ades, Steven Selsky, Steven Wallace, a family member of Steven Ades,
Steven Selsky or Steven Wallace or otherwise related to Steven Ades, Selsky or
Wallace, and (iii) has not been involved in any legal proceedings requiring
disclosure under Item 401(f) of Regulation S-K or Instruction 4 of Item 103 of
Regulation S-K. Prior to selection as a "qualified person," each such nominee
shall agree in writing to resign from the Company's Board of Directors if so
requested mutually by Steven Ades and the other members of the Company's Board
of Directors.
2. Voting of Shares by Ades. Ades agrees that at the annual meeting
of shareholders of the Company immediately following the Effective Time of the
Merger, and at each successive annual meeting thereafter, provided that Steven
Ades is employed by Company at such time, Ades shall vote all outstanding shares
of Company's common stock that are owned by Ades as of the
<PAGE> 2
record date fixed for such meeting in favor of those persons recommended or
nominated for election by the Company's Board of Directors. In the event
cumulative voting for the election of directors occurs, Ades shall, as so
requested by Shareholder, either distribute all of Ades' votes equally between
Ades and the qualified person selected in accordance with paragraph 1 above or
equally among each nominee for director supported by the Company's Board of
Directors. As long as Steven Ades is a director, employee or consultant of the
Company, Ades agrees not to vote for or otherwise support in any manner any
nominees for the Company's Board of Directors other than those nominees selected
by the Company's Board of Directors.
3. Further Assurances. Shareholder and Ades shall perform such
further acts and execute such further documents and instruments as reasonably
may be required to carry out and give effect to the provisions of this
Agreement.
4. Amendment and Modification. This Agreement may be amended,
modified or supplemented only by a written agreement of all the parties to this
Agreement.
5. Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by and construed in accordance with the
laws of the State of California.
6. Invalidity of a Single Provision. The unenforceability or
invalidity of any provision of this Agreement shall not affect the validity or
enforceability of the remainder of this Agreement, nor shall the
unenforceability of a provision under the laws of any particular jurisdiction
affect its enforceability under the laws of other jurisdictions.
7. Headings and Execution in Counterparts. The headings and captions
contained in this Agreement are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall constitute a single
agreement.
8. Termination. The parties hereto agree that this Agreement shall
terminate upon the earlier of: (a) Steven Ades' cessation of employment from the
Company, (b) the closing a "liquidity event" as defined in Section 2 of that
Restricted Stock Agreement dated as of May 13, 1999 by and among the parties
hereto, the Company, Barbara Abella, Rhonda Sapirstein, Steven Selsky and Steven
Wallace, excluding a sale of all or substantially all of the assets of the
Company or liquidation, dissolution or winding up of the Company, (c) Ades'
beneficial ownership (calculated according to Rule 13d-3) of voting securities
of the Company falls below five percent (5%) of the Company's issued and
outstanding securities, or (d) Ades' beneficial ownership of voting securities
(excluding unexercised options) of the Company increases to the number that Ades
would be entitled to elect two directors to the Company's Board of Directors.
9. Amendment and Restatement. The parties hereto agree that the
Original Agreement is superseded and replaced in its entirety by this Agreement
and Original Agreement shall no longer have any force or effect.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
Shareholder:
/s/ Waldo H. Hunt
----------------------------------------
Waldo H. Hunt, Trustee of the Hunt
Family Trust UTA May 30, 1980
/s/ Steven D. Ades
----------------------------------------
Steven D. Ades
/s/ Steven D. Ades
----------------------------------------
Steven D. Ades, as Trustee of the Steven
Ades and Laurie Levit Revocable Family
Trust UTD April 18, 1991
/s/ Laurie Levit
----------------------------------------
Laurie Levit, as Trustee of the Steven
Ades and Laurie Levit Revocable Family
Trust UTD April 18, 1991
-3-
