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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 2000
REGISTRATION STATEMENT NO. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PLATO LEARNING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-3660532
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
10801 NESBITT AVENUE SOUTH
BLOOMINGTON, MINNESOTA 55437
(952) 832-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JOHN MURRAY
PRESIDENT, CHIEF OPERATING OFFICER AND ACTING CHIEF FINANCIAL OFFICER
PLATO LEARNING, INC.
10801 NESBITT AVENUE SOUTH
BLOOMINGTON, MINNESOTA 55437
(952) 832-1000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
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COPIES TO:
LELAND E. HUTCHINSON
WINSTON & STRAWN
35 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601
TELEPHONE NO. (312) 558-5600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement is declared effective.
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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 effective 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. [ ]
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 this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED PROPOSED MAXIMUM
OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
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COMMON STOCK 850,000 SHARES $13.4375 $11,421,875 $3,015.38
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(1) Calculated in accordance with Rule 457(c) as of August 21, 2000.
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Information contained in this preliminary prospectus is subject to completion or
amendment.
SUBJECT TO COMPLETION, DATED AUGUST 23, 2000
850,000 SHARES COMMON STOCK
[PLATO LEARNING, INC. LOGO]
PLATO LEARNING, INC.
All of the shares of common stock offered for sale under this
prospectus are being sold by selling stockholders. The selling stockholders are
selling up to 850,000 shares of common stock, par value $.01 per share of PLATO
Learning, Inc., a Delaware corporation. See "Selling Stockholders and Plan of
Distribution."
Pursuant to the Common Stock Investment Agreement dated as of July 17,
2000 among PLATO and the selling stockholders, 356,125 shares of common stock
were issued to such selling stockholders. In addition to those shares, the
selling stockholders may also sell pursuant to this prospectus the additional
common stock that they will receive upon (i) the exercise by the selling
stockholders of the Initial Warrants issued by PLATO to such selling
stockholders in connection with the Common Stock Investment Agreement, (ii) the
exercise of the Adjustment Warrants issued by PLATO to the selling stockholders
in connection with the Common Stock Investment Agreement and (iii) the
occurrence of trigger events described in the Registration Rights Agreement
dated as of July 17, 2000 among PLATO and the selling stockholders.
The holders may sell all or a portion of the common stock covered by
this prospectus after the exercise of the Initial Warrants and Adjustment
Warrants after the trigger events described in the Registration Rights Agreement
occur through underwriters or dealers, through brokers or other agents, or
directly to one or more purchasers, at market prices prevailing at the time of
sale or at prices otherwise negotiated. See "Selling Stockholders and Plan of
Distribution."
Our common stock is quoted on the Nasdaq National Market under the
symbol "TUTR." On August 21, 2000, the last reported sale price for the common
stock, as reported on the Nasdaq National Market, was $13.25 per share.
Investing in our common stock involves certain risks. See "Risk
Factors" on page 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is August 23, 2000.
You should rely only on the information contained in this document or to which
we referred you. We have not authorized anyone to provide you with information
that is different. This document may only be used where it is legal to sell
these securities. The information contained in this document may only be
accurate on the date of this document.
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TABLE OF CONTENTS
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AVAILABLE INFORMATION.............................................................................................1
INFORMATION INCORPORATED BY REFERENCE.............................................................................1
PROSPECTUS SUMMARY................................................................................................2
General ................................................................................................2
Strategy ................................................................................................2
THE OFFERING......................................................................................................3
FORWARD-LOOKING STATEMENTS........................................................................................3
RISK FACTORS......................................................................................................5
Variability in Annual Results Make It Uncertain as to Whether
We Can Sustain Profitability............................................................................5
Potential Fluctuations in Quarterly Results Affect Revenues
and Profitability for Such Quarterly Periods............................................................5
Future Success Will Depend on Our Ability to Adapt to Technological
Changes and Meet Evolving Industry Standards............................................................5
The Failure to Successfully Integrate CyberEd Could Harm Our
Business and Operating Results..........................................................................6
Financing Risk.............................................................................................6
Reliance on Government Funding Could Have a Negative Effect on Revenues....................................6
There is no Assurance that Key Management Personnel Will Remain With Us....................................6
Change in Personnel of Customers Could Harm Our Business and Operating Results.............................7
Competition Could Adversely Affect Our Performance.........................................................7
Fluctuations in Demand Could Adversely Affect Our Profitability............................................7
Misuse or Misappropriation of our Proprietary Rights Could
Adversely Affect Our Performance........................................................................7
USE OF PROCEEDS...................................................................................................8
DESCRIPTION OF CAPITAL STOCK......................................................................................8
Common Stock...............................................................................................8
1997 Debentures............................................................................................8
1997 Warrants..............................................................................................9
1999 Warrants..............................................................................................9
2000 Initial Warrants.....................................................................................10
2000 Adjustment Warrants..................................................................................10
2000 Broker Warrants......................................................................................11
Delay Shares..............................................................................................11
Mandated Acceleration Shares..............................................................................11
Registration Rights.......................................................................................12
Certain Charter Provisions................................................................................12
Transfer Agent............................................................................................14
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION....................................................................14
PLAN OF DISTRIBUTION.............................................................................................15
EXPENSES.........................................................................................................17
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TABLE OF CONTENTS
(Continued)
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LEGAL MATTERS....................................................................................................17
EXPERTS..........................................................................................................17
INFORMATION NOT REQUIRED IN PROSPECTUS...........................................................................17
Item 14. Other Expenses of Issuance and Distribution....................................................17
Item 15. Indemnification of Directors and Officers......................................................18
Item 16. Exhibits and Financial Statement Schedules.....................................................18
Item 17 Undertakings...................................................................................18
SIGNATURES.......................................................................................................21
POWER OF ATTORNEY................................................................................................21
EXHIBIT INDEX.....................................................................................................1
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AVAILABLE INFORMATION
PLATO files annual, quarterly, and current reports and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information on file at the Commission's public
reference room in Washington, D.C. You can request copies of those documents,
upon payment of a duplicating fee, by writing to the commission.
PLATO has filed a registration statement on Form S-3 with the
Commission with respect to the common stock offered by this prospectus. This
prospectus, which constitutes part of the registration statement, does not
contain all of the information included in the registration statement. You
should refer to the exhibits attached to the registration statement and its
exhibits. The references to any contract or other document are not necessarily
complete and you should refer to the exhibits attached to the registration
statement for copies of the actual contract or document.
You may review a copy of the registration statement at the
Commission's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices in New York, New York and
Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for further
information on the operation of public reference rooms. PLATO's Commission
filings and registration statements can also be reviewed by accessing the
Commission's Internet site at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus, and
information that we file later with the Commission will automatically update and
supersede the information in this prospectus. We incorporate by reference the
documents listed below and any future filing we make with the Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
the selling stockholders sell all of the shares offered by this prospectus:
- Annual Report on Form 10-K for the fiscal year ended
October 31, 1999 (file no. 333-72523);
- Quarterly Report on Form 10-Q for the quarter ended
January 31, 2000 (file no. 333-72523);
- Quarterly Report on Form 10-Q for the quarter ended
April 30, 2000 (file no. 333-72523);
- Report on Form 8-K filed January 28, 2000 (file no.
333-72523);
- Report on Form 8-K filed April 24, 2000 (file no.
333-72523);
- Report on Form 8-K filed August 3, 2000 (file no.
333-72523); and
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- Report on Form 8-K filed August 3, 2000 (file no.
333-72523).
You may request a copy of these filings at no cost by writing
or telephoning us at the following address: PLATO Learning, Inc., 10801 Nesbitt
Avenue South, Bloomington, Minnesota 55437, Attention: Treasurer, Telephone:
(952) 832-1000.
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in
this prospectus. This summary is not complete and does not contain all the
information that you should consider before investing in the common stock. You
should carefully read the entire prospectus, including the documents
incorporated by reference into it. PLATO's operations are comprised of the PLATO
business and the business of our wholly-owned operating subsidiaries, CyberEd,
Inc. and PLATO, Inc., which has two wholly-owned subsidiaries, PLATO Learning
(Canada) Inc. in Canada, and PLATO Learning (UK) Ltd., in the United Kingdom.
GENERAL.
PLATO is a leading developer and marketer of
microcomputer-based, interactive, self-paced instructional systems used in a
wide variety of adult settings. Offering more than 2,000 hours of comprehensive
academic and applied skills courseware designed for adolescents and adults,
PLATO's PLATO(R) Learning Systems are marketed to middle schools and high
schools, colleges, job training programs, correctional institutions, military
education programs, and corporations. PLATO(R) Learning Systems is delivered via
networks, CD-ROM, the Internet and private intranets.
PLATO was incorporated in June 1989 as Edu Corp., in October
1992 we changed our name to TRO Learning, Inc. and in April 2000 we changed our
name to PLATO Learning, Inc. PLATO's wholly-owned operating subsidiaries are
PLATO, Inc. and CyberEd, Inc. PLATO, Inc. has two wholly-owned subsidiaries, one
in Canada, PLATO Learning (Canada) Inc., and one in the United Kingdom, PLATO
Learning (UK) Ltd.
PLATO's principal business offices are located at 10801
Nesbitt Avenue South, Bloomington, Minnesota 55437; Telephone: (952) 832-1000.
STRATEGY.
PLATO's strategy is to address the needs of adolescent and
adult learners by providing a broad range of interactive, multimedia, self-paced
educational and training courseware delivered on personal computers. The
critical elements of our business strategy are as follows:
- Target growing market niches that serve adolescent and
adult learners rather than pre-school and elementary
school-aged children.
- Work closely with clients to design a program of
instruction which meets their specific educational and
training needs by providing comprehensive,
solution-oriented courseware, and services to our
clients.
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- Emphasize sales of solution-oriented education and
training courseware and services which generate high
profit margins and greater opportunities for growth.
- Utilize the design and structural advantages inherent
in its proprietary software development systems to
design and produce new courseware and services.
- Focus on developing the broadest delivery system for
its instructional management system and courseware
library, including the use of Internet and Intranet
delivery.
THE OFFERING
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The Offering.................................................. 356,125 shares of common stock offered hereby
have been issued to the selling stockholders. The
balance of the common stock offered hereby will
be issued to the selling stockholders upon (i)
the exercise of the Initial Warrants, (ii) the
exercise of the Adjustment Warrants and (iii) the
occurrence of certain trigger events pursuant to
the Registration Rights Agreement.
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Aggregate Amount of common stock
Offered by the selling stockholders........................ 850,000 shares
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Number of shares of common stock outstanding as of
July 17, 2000
1............................................................. 7,654,076
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Nasdaq Symbol................................................. TUTR
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FORWARD-LOOKING STATEMENTS
Certain statements incorporated by reference or made in this
prospectus are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. The statements are subject to the safe
harbor provisions of the Reform Act. Such forward-looking statements include our
statements about:
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(1) Does not include (i) shares of common stock, issuable pursuant to
outstanding employee and director options, (ii) 54,132 and 126,732 and
63,092 shares of common stock issuable pursuant to warrants dated March
27, 1997, January 13, 1999, and July 16, 1999, respectively, (iii) shares
of common stock issuable pursuant to the 1997 Subordinated Convertible
Debentures, or (iv) shares of common stock issuable pursuant to the
Company's stock purchase plan.
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- the competitiveness of the computer-based education and
training industry;
- the ability to keep up with changing trends in the
industry;
- our strategies; and
- other statements that are not historical facts.
When used in this prospectus, the words "anticipate",
"believe", "estimate", and similar expressions are generally intended to
identify forward-looking statements. Because such forward-looking statements
involve risks and uncertainties, there are important factors that could cause
actual results to differ materially from those expressed or implied by such
forward-looking statements, including:
- Declines in annual financial results;
- Unpredictability of government appropriations;
- Ability to keep up with changing trends in the
industry;
- Changes in economic and business conditions (including
in the computer-based education and training industry);
- Changes in business strategies; and
- Other factors discussed in "Risk Factors".
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RISK FACTORS
You should carefully consider the following factors and other
information in this prospectus before deciding to invest in shares of common
stock.
VARIABILITY IN ANNUAL RESULTS MAKE IT UNCERTAIN AS TO WHETHER WE CAN SUSTAIN
PROFITABILITY.
For the fiscal year ended October 31, 1999, we reported net
income of $15,031,000, an increase from the net income of $3,068,000 we incurred
for the fiscal year ended October 31, 1998, such increase was partially due to a
nonrecurring tax benefit in fiscal year 1999 of $10 million caused by the
reversal of the valuation allowance placed on the Company's deferred tax asset,
related to its net operating loss carryforwards in the United States. This
reversal was based on updated expectations about future years' taxable income to
reflect continuing improvements in operating results influenced by the Company's
continued revenue growth and other indications that certain concerns that had
previously limited management's expectation about future taxable income no
longer were applicable. In fiscal 1997, we sustained a net loss of
($20,217,000). In fiscal 1996, and 1995, our net income was $982,000, and
$3,752,000, respectively. After PLATO sustained net losses for the fiscal year
1997, we restructured the organization and implemented cost control measures for
fiscal 1998 and thereafter; however, there can be no assurance that we can
sustain profitability. Future revenues and profits, if any, will depend upon
various factors, including continued market acceptance of our products and
services. Potential investors should consider the risks, expenses and
difficulties frequently encountered in connection with the operation and
development of a new and expanding business including, but not limited to,
delays in the expansion and addition of sales and distribution channels, the
ability to attract qualified employees and innovation in the design and
development of new products and product enhancements.
POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS AFFECT REVENUES AND PROFITABILITY
FOR SUCH QUARTERLY PERIODS.
PLATO's revenues and profitability may vary significantly
among quarterly periods. In addition, our revenues and profitability may
fluctuate as a result of many factors, including the size, timing and product
mix of orders, increased competition, loss of significant customers, losses on
uncollected accounts receivables, announcements of new products by PLATO or any
of our competitors, delays in shipment of existing or new products, and capital
spending patterns of PLATO's customers. Many of our education and training sales
are to customers who purchase systems and license courseware on a single
procurement basis. Accordingly, new customers must be found or new or additional
products must be sold to existing customers in order to maintain and expand
PLATO's education and training revenue stream.
FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO ADAPT TO TECHNOLOGICAL CHANGES AND
MEET EVOLVING INDUSTRY STANDARDS.
The computer-based educational and training industry is
characterized by technological change, frequent product introductions, and
evolving industry standards. Although
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we believe we compete favorably in the markets in which we participate, our
future success will depend, to a significant extent, on our ability to enhance
our existing products, develop and introduce new products, satisfy an expanded
range of customer needs and achieve market acceptance. There can be no assurance
that we will have sufficient resources to make the necessary investments or that
we will be able to develop and implement the technological advances required to
maintain our competitive position. We are not aware of any emerging standards or
new products which could render our existing products obsolete. However, there
can be no assurance that PLATO's products will not be rendered obsolete or that
we will be able to develop and market new products.
THE FAILURE TO SUCCESSFULLY INTEGRATE CYBERED COULD HARM OUR BUSINESS AND
OPERATING RESULTS.
In July 2000, we acquired CyberEd, Inc. If we are unable to
successfully integrate CyberEd, it could harm our business and operating
results. Integrating CyberEd may strain our resources and require significant
management time. Further, the value of CyberEd will depend on whether we can
successfully transition management from pre-acquisition management to PLATO
management. If PLATO were unsuccessful in the operations of CyberEd, it could
harm our business and operating results.
FINANCING RISK.
In fiscal year 1998, PLATO from time to time did not meet
certain financial ratios specified in our credit facility agreement. On each
such occasion, the lender waived the default upon the payment of a fee by PLATO.
There can be no assurance that we will not breach our obligations under the
credit facility in the future. In such event, we might be required to pay
additional fees to the lender or may be required to refinance our obligations.
There can be no assurance that refinancing would be available to PLATO in such
circumstances on acceptable terms.
RELIANCE ON GOVERNMENT FUNDING COULD HAVE A NEGATIVE EFFECT ON REVENUES.
A substantial portion of our total revenues are derived from
customers substantially dependent on government funding, such as public school
systems, community-based organizations and correctional facilities. The
government appropriations process is often slow, unpredictable and subject to
factors outside our control and several proposals are currently being made to
reduce government spending. Curtailments or substantial reductions in government
funded or sponsored programs and termination or renegotiation of
government-funded contracts could have a material adverse impact on, or result
in the delay or termination of, PLATO's revenues associated with these programs
and contracts.
THERE IS NO ASSURANCE THAT KEY MANAGEMENT PERSONNEL WILL REMAIN WITH US.
PLATO's future success depends in large part on the continued service
of our key technical, marketing, sales and management personnel and on our
ability to continue to attract, motivate and retain highly qualified employees.
Our key employees may terminate their employment with us at any time. There is
competition within the industry for such employees and the process of locating
key technical and management personnel with suitable skills and
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attributes to execute PLATO's strategy is often lengthy. Accordingly, the loss
of the services of key personnel could have a material adverse effect on PLATO.
CHANGE IN PERSONNEL OF CUSTOMERS COULD HARM OUR BUSINESS AND OPERATING RESULTS.
From time to time we have experienced deterioration in our
customer relations following the change in personnel of our customers. Change in
personnel of our customers has from time to time lead to loss of anticipated
contracts and to an increase in marketing efforts to re-establish solid
relationships with such customers. Thus, changes in personnel of our customers
could harm our business.
COMPETITION COULD ADVERSELY AFFECT OUR PERFORMANCE.
The computer-based education and training industry is
competitive and demand for particular software and courseware products, systems
hardware, and services may be affected adversely by the increasing number of
competitive products from which a prospective customer may choose. We compete
primarily against other organizations offering educational and training software
and services. PLATO's competitors include several large companies with
substantially greater financial, technical and marketing resources than those of
PLATO, including divisions within Pearson PLC and Mc-Graw Hill McMillan, as well
as a number of smaller companies. Existing competitors may broaden their product
lines and potential competitors, may enter the market and/or increase their
focus on computer-based education and training, resulting in greater competition
for PLATO. These changes or potential changes in the market could have a
material adverse effect on our operating results.
FLUCTUATIONS IN DEMAND COULD ADVERsELY AFFECT OUR PROFITABILITY.
Certain of our customers and potential customers are in
industries, such as education, that experience cyclical variations in funding or
profitability, which may affect such customers' willingness or ability to
purchase products and services offered by PLATO. These fluctuations in demand
could have a material adverse effect on our future profitability.
MISUSE OR MISAPPROPRIATION OF OUR PROPRIETARY RIGHTS COULD ADVERSELY AFFECT OUR
PERFORMANCE.
We regard our courseware and software as proprietary and rely primarily
on a combination of statutory and common law copyright, trademark and trade
secret laws, customer licensing agreements, employee and third-party
nondisclosure agreements and other methods to protect our proprietary rights.
PLATO owns the Federal registration of the PLATO(R) trademark. In addition, in
1989 Control Data Corporation assigned to PLATO Federally registered copyrights
in the PLATO(R) courseware. PLATO has not recorded the assignment of these
copyrights because we believe that the additional statutory rights resulting
from recordation are not necessary for the protection of our rights therein.
PLATO has copyrights in all PLATO(R) courseware produced since 1989, and has
registered its most important coursework with the U.S. Copyright Office. We have
not applied for trademark registration at the state level, but have instead
relied on our Federal registrations and state common law rights to protect our
proprietary information. We acquired CyberEd, Inc. as a subsidiary in July,
2000. CyberEd owns all copyrights in its computer programs and is registering
these copyrights with the U.S. Copyright
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Office. CyberEd also owns the federal registration of the Cyber Ed(R) trademark.
We do not include in our products any mechanisms to prevent or inhibit
unauthorized copying, but we generally require the execution of a license
agreement which restricts copying and use of the courseware and software. We
have no knowledge of the unauthorized copying of our products. However, if such
copying or misuse were to occur to any substantial degree, PLATO could be
materially adversely affected.
USE OF PROCEEDS
We will receive no proceeds from the sale by the selling
stockholders of the shares of common stock.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of PLATO consists of 25,000,000
shares of common stock, $.01 par value per share, and 5,000,000 shares of
preferred stock, par value $.01 per share, of which 7,654,076 shares of common
stock (exclusive of treasury shares) were issued and outstanding on July 17,
2000. As of July 17, 2000, PLATO has no shares of preferred stock issued and
outstanding.
COMMON STOCK.
Subject to the rights of holders of any outstanding preferred
stock, the holders of outstanding shares of common stock are entitled to share
ratably in dividends declared out of assets legally available therefor at such
time and in such amounts as our board of directors may from time to time
lawfully determine. PLATO's ability to pay dividends is restricted by PLATO's
credit facility agreement.
Each common stock holder is entitled to one vote for each
share held by him. Common stockholders are not entitled to cumulate votes for
the election of directors. The common stock is not entitled to conversion or
preemptive rights and is not subject to redemption or assessment. The common
stock presently outstanding is, and the common stock issued upon conversion of
the 1997 Debentures will be fully paid and nonassessable.
1997 DEBENTURES.
In March 1997, we issued $3,050,000 of 10% subordinated
convertible debentures with a scheduled maturity date in March 2004. Pursuant to
the 1997 Debentures, we filed a registration statement on Form S-3 dated January
21, 1998, covering the resales by the selling securityholders of the common
stock upon conversion of the 1997 Debentures and shall use our best efforts to
cause such registration statement to remain effective for such period as may be
necessary for the holders of such common stock to dispose of such common stock;
provided, however, that we shall not be required to maintain effectiveness of
such registration statement at such time as the holders of the common stock are
able to sell the common stock underlying the 1997 Debentures under Rule 144(k)
under the Securities Act or any successor thereto, which allows unrestricted
resales by nonaffiliates of PLATO after a holding period of two years. At the
option of each holder of the 1997 Debentures, the 1997 Debentures are
convertible into PLATO's common stock at an original conversion price of $9.60
per share,
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which has been adjusted to $9.01 per share and which is subject to
further adjustments. The conversion price of the common stock into which the
1997 Debentures are convertible is subject to adjustment if we (i) subdivide or
combine our outstanding shares of common stock or declare a dividend payable in
common stock of PLATO; (ii) reorganize or reclassify our capital stock,
consolidate or merge with another corporation or sell all or substantially all
of our assets to another corporation; (iii) distribute to all holders of our
common stock any assets or debt securities or any rights or warrants to purchase
debt securities, assets or other securities; or (iv) issue or sell shares of our
common stock at less than the conversion price, or issue any options or warrants
or other rights to purchase PLATO's common stock at a price per share less than
the conversion price or issue securities convertible into PLATO's common stock
at a price per share less than the conversion price. PLATO may redeem the 1997
Debentures at 101% of principal, plus interest, subject to certain terms and
conditions. In addition, the 1997 Debentures are subject to mandatory redemption
at 25% of principal annually beginning in 2001.
1997 WARRANTS.
In connection with PLATO's offering of the 1997 Debentures, in
March 1997, we issued warrants to investors (the "Investor Warrants") to
purchase 31,743 shares of the our common stock at an original exercise price of
$9.60 per share, which has been adjusted to $9.01 per share and which is subject
to further adjustments. The exercise price is subject to adjustment if we issue
or sell shares of our common stock at less than the exercise price, or issue any
options or warrants or other rights to purchase our common stock at a price per
share less than the exercise price or issue securities convertible into our
common stock at a price per share less than the exercise price. The Investor
Warrants expire in 2002. PLATO also issued warrants to the placement agents for
the 1997 Debentures (the "Placement Agent Warrants") to purchase 19,062 shares
of our common stock at an original exercise price of $9.60 per share, which has
been adjusted to $9.01 per share and which is subject to further adjustment. The
Placement Agent Warrants expire in 2007 and the exercise price for the Placement
Agent Warrants is subject to the same adjustments as are applicable to the
exercise price for the Investor Warrants.
1999 WARRANTS.
Concurrently with the issuance of the Series C Convertible
Preferred Stock on January 13, 1999, we issued Warrants to purchase 125,000
shares of PLATO's common stock at an original exercise price of $9.51 per share,
which has been adjusted to $9.38 per share and which is subject to further
adjustments. Additionally, on July 16, 1999, the Company issued Warrants to
purchase 63,092 shares of PLATO's common stock at an exercise price of $8.72.
These Warrants expire in 2004. The exercise price of the Warrants are subject to
adjustment from time to time if PLATO shall (i) pay a stock dividend (except
scheduled dividends paid on outstanding preferred stock as of the date hereof
which contain a stated dividend rate) or otherwise make a distribution or
distributions on shares of its common stock or on any other class of capital
stock payable in shares of common stocks, (ii) subdivide outstanding shares of
common stock into a larger number of shares, or (iii) combine outstanding shares
of common stock into a smaller number of shares.
Pursuant to a Registration Rights Agreement entered into by
PLATO and the holders of the Convertible Preferred Stock, we filed a
registration statement on Form S-3 dated
-9-
<PAGE> 14
February 17, 1999, covering the resales by the selling holders of the common
stock upon conversion of the Convertible Preferred Stock and upon exercise of
the 1999 Warrants issued concurrently with the Convertible Preferred Stock and
shall use our best efforts to cause such registration statement to remain
effective for such period as may be necessary for the holders of the common
stock to dispose of such common stock. However, we shall not be required to
maintain effectiveness of the registration statement after the earlier of (i)
when the selling stockholders are able to sell the common stock underlying the
Convertible Preferred Stock and the 1999 Warrants under Rule 144(K) under the
Securities Act or any successors thereto or (ii) three years. We are required to
provide the selling stockholders with a current prospectus upon request for such
selling stockholders to use in the resale of the common stock.
2000 INITIAL WARRANTS.
On July 17, 2000, PLATO issued Initial Warrants to purchase
53,419 shares of PLATO's common stock at an exercise price of $16.72 per share.
These Initial Warrants expire in July 2003. The exercise price of the Initial
Warrants is subject to adjustment from time to time if PLATO shall (i) subdivide
outstanding shares of common stock into a larger number of shares, (ii) combine
outstanding shares of common stock into a lesser number of shares, (iii) pay a
stock dividend or otherwise make a distribution or distributions on shares of
its common stock payable in common stock or other securities or rights
convertible into common stock, (iv) make a distribution to holders of its common
stock any shares of its capital stock, any evidence of indebtedness or any of
its assets (other than common stock), or (v) issue or sell any common stock or
securities which are convertible into or exchangeable for its common stock or
any convertible securities, or any warrants or rights to subscribe for or to
purchase or any options for the purchase of its common stock or any such
convertible securities at an effective consideration or exercise price per share
which is less than the exercise price of the Initial Warrants. In no event may
the exercise price be adjusted to a number smaller than the par value per share
of the common stock.
2000 ADJUSTMENT WARRANTS.
On July 17, 2000, PLATO issued Adjustment Warrants for the automatic
issuance (if at all) of shares of PLATO's common stock at an exercise price of
$.01 per share. These Adjustment Warrants expire in July 2003. Pursuant to the
Adjustment Warrants, the total number of shares of common stock issued to the
selling stockholders under the Common Stock Investment Agreement shall be
adjusted (if at all) over seven 30 day periods and the initial period shall
begin on the 120th day after the closing date which was July 17, 2000. During
each adjustment period, a portion of the total number of shares issued to the
selling stockholders shall be adjusted if the adjustment share purchase price is
greater than the average of the five lowest closing bid prices occurring during
the fifteen final trading days during such adjustment period. The adjustment
periods may be suspended at the option of the selling stockholders if this
registration statement is not effective. The exercise price of the Adjustment
Warrants is subject to the same adjustments and limitations as are applicable to
the exercise price for the Initial Warrants.
-10-
<PAGE> 15
2000 BROKER WARRANTS.
On July 17, 2000, PLATO issued Warrants to purchase 17,806
shares of PLATO's common stock at an exercise price of $16.72 per share. These
Warrants expire in July 2003. The exercise price of the Warrants is subject to
adjustment from time to time if PLATO shall (i) subdivide outstanding shares of
common stock into a larger number of shares, (ii) combine outstanding shares of
common stock into a lesser number of shares, (iii) pay a stock dividend or
otherwise make a distribution or distributions on shares of its common stock
payable in common stock or other securities or rights convertible into common
stock, (iv) make a distribution to holders of its common stock any shares of its
capital stock, any evidence of indebtedness or any of its assets (other than
common stock), or (v) issue or sell any common stock or securities which are
convertible into or exchangeable for its common stock or any convertible
securities, or any warrants or rights to subscribe for or to purchase or any
options for the purchase of its common stock or any such convertible securities
at an effective consideration or exercise price per share which is less than the
exercise price. In no event may the exercise price be adjusted to a number
smaller than the par value per share of the common stock.
DELAY SHARES.
Pursuant to a Registration Rights Agreement between PLATO and
the selling stockholders, we agreed to issue Delay Shares to the selling
stockholders upon the occurrence of certain triggering events after the
aggregate amount of penalty payments payable in cash for such triggering events
exceeds $250,000. The triggering events include:
(i) the failure of this registration statement to be declared
effective on or prior to the 90th day following July 17, 2000,
provided that if the Securities and Exchange Commission
reviews and comments on this registration statement requiring
changes hereto, then this registration statement must be
declared effective on or prior to the 120th day following July
17, 2000;
(ii) the failure of the shares of common stock being registered
under this registration statement to be listed for trading on
NASDAQ or the suspension of such shares from trading on
NASDAQ, in either case, during the period from the 90th day
following July 17, 2000 until the third (3rd) anniversary of
July 17, 2000;
(iii) the suspension of or issuance of a stop order with respect to
this registration statement for more than (a) five consecutive
days or (b) an aggregate of ten days in any calendar year; and
(iv) the failure by PLATO to have a sufficient number of authorized
shares of its common stock to issue to the selling
stockholders upon exercise of the Initial Warrants or
Adjustment Warrants or as required by the Common Stock
Investment Agreement.
MANDATED ACCELERATION SHARES.
Upon the occurrence of certain triggering events, the selling
stockholders may compel PLATO to issue Mandated Acceleration Shares to the
selling stockholders pursuant to
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<PAGE> 16
the Registration Rights Agreement and Adjustment Warrants. The triggering events
include the following:
(i) the failure to deliver adjustment shares of common stock under
the Adjustment Warrants;
(ii) the failure of this registration statement to be declared
effective on or prior to the 180th day after July 17, 2000;
(iii) the failure of PLATO shares of common stock to be listed for
trading on an approved market or suspended from trading and
remain unlisted or suspended for three consecutive days;
(iv) the suspension of or issuance of a stop order with respect to
this registration statement for an additional five consecutive
days any time following a suspension of this registration
statement for more than (a) five consecutive days or (b) an
aggregate of ten days in any calendar year;
(v) five days after the commencement of the failure by PLATO to
have a sufficient number of authorized shares of its common
stock to issue to the selling stockholders upon exercise of
the Initial Warrants or Adjustment Warrants or as required by
the Common Stock Investment Agreement.
REGISTRATION RIGHTS.
Pursuant to a Registration Rights Agreement between PLATO and
the selling stockholders, we agreed to file a registration statement of which
this prospectus constitutes a part, covering the resales by the selling
stockholders of (i) the 356,125 shares of common stock issued to the selling
stockholders on July 17, 2000, (ii) the common stock issuable upon exercise of
the Initial Warrants, (iii) the common stock issuable upon exercise of the
Adjustment Warrants, (iv) the common stock issuable as Delay Shares and (v) the
common stock issuable as Mandated Acceleration Shares. We are also required to
provide the selling stockholders with a current prospectus upon request for such
selling stockholders to use in the resale of the common stock. We agreed to use
our best efforts to cause the registration statement to remain effective for
such period as may be necessary for the selling stockholders of the common stock
to dispose of such common stock. However, we shall not be required to maintain
effectiveness of the registration statement after the earlier of (i) the third
anniversary of July 17, 2000 or (ii) when the selling stockholders are able to
sell the common stock under Rule 144(K) under the Securities Act.
CERTAIN CHARTER PROVISIONS.
The Certificate of Incorporation of PLATO provides that, to
the fullest extent permitted by the Delaware General Corporation Law, a director
of PLATO shall not be liable to us or our stockholders for monetary damages for
breach of fiduciary duty as a director. In addition, our By-laws provide for the
indemnification of officers and directors to the fullest extent permitted by
Delaware law. In furtherance thereof, the Board of Directors is expressly
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<PAGE> 17
authorized to amend PLATO's By-laws to give full effect to any changes in
applicable law, notwithstanding possible self-interest of the directors in the
action being taken.
PLATO's Certificate of Incorporation and By-laws contain
certain provisions that are intended to enhance the likelihood of continuity and
stability in the composition of our Board of Directors and which may have the
effect of delaying, deferring or preventing a future takeover or change in
control of PLATO unless such takeover or change in control is approved by our
Board of Directors. Such provisions may also render the removal of the current
Board of Directors and management more difficult.
The Certificate of Incorporation establishes an advance notice
procedure with regard to the nomination, other than by or at the direction of
the Board of Directors, of candidates for election as directors and with regard
to certain matters to be brought before a PLATO annual meeting of stockholders.
In general, notice must be received by PLATO not less than 60 days prior to the
meeting and must contain certain specified information concerning the person to
be nominated or the matter to be brought before the meeting and concerning the
stockholder submitting the proposal.
Pursuant to the Certificate of Incorporation, PLATO's Board of
Directors is divided into three classes serving staggered three-year terms.
Directors can be removed from office only for cause. Vacancies on the Board of
Directors may only be filled by the remaining directors and not by the
stockholders, except that in the case of newly created directorships, if the
remaining directors fail to fill any such vacancy, the stockholders may do so at
the next annual or special meeting called for that purpose.
The preferred stock may be issued from time to time in one or
more series and with such designations and preferences for each series as shall
be stated in the resolutions providing for the designation and issue of each
such series adopted by PLATO's Board of Directors. The Board of Directors is
authorized in PLATO's Certificate of Incorporation to determine the voting,
dividend, redemption and liquidation preferences and limitations pertaining to
such series. PLATO has no shares of preferred stock issued and outstanding.
Under Section 203 of the Delaware General Corporation Law (the
"Delaware anti-takeover law"), certain "business combinations" between a
Delaware corporation, whose stock generally is publicly traded or held of record
by more than 2,000 stockholders, and an "interested stockholder" are prohibited
for a three-year period following the date that such stockholder became an
interested stockholder, unless (i) the corporation has elected in its
certificate of incorporation not to be governed by the Delaware anti-takeover
law (PLATO has not made such an election), (ii) the business combination was
approved by the board of directors of the corporation before the other party to
the business combination became an interested stockholder, (iii) upon
consummation of the transaction that made it an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the commencement of the transaction (excluding voting stock owned
by directors who are also officers or held in employee benefit plans in which
the employees do not have a confidential right to tender or vote stock held by
the plan), or (iv) the business combination was approved by the board of
directors of the corporation and ratified by 66% of the voting stock which the
interested stockholder did not own. The three-year prohibition also does not
apply to certain
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<PAGE> 18
business combinations proposed by an interested stockholder following the
announcement or notification of certain extraordinary transactions involving the
corporation and a person who had not been an interested stockholder during the
previous three years or who became an interested stockholder with the approval
of a majority of the corporation's directors. The term "business combination" is
defined generally to include mergers or consolidations between a Delaware
corporation and an "interested stockholder," transactions with an "interested
stockholder" involving the assets or stock of the corporation or its
majority-owned subsidiaries and transactions which increase an interested
stockholder's percentage ownership of stock. The term "interested stockholder"
is defined generally as those stockholders who become beneficial owners of 15%
or more of a Delaware corporation's voting stock after it becomes subject to the
Delaware antitakeover law.
TRANSFER AGENT.
The Transfer Agent and Registrar for PLATO's common stock is
Wells Fargo Bank Minnesota, N.A.
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
Selling Stockholders
<TABLE>
<CAPTION>
------------------------------------- ----------------------------- ---------------------- --------------------------
Number of Shares of
Common Stock Number of Shares
Beneficially Owned Number of Shares of Common Stock
Prior to the Offering of Beneficially Owned
Name and Address of --------------------- Common Stock Following the
Selling Stockholders # of Shares % of Class Offered Hereby Offering(5)
--------------------- ----------- ---------- -------------- --------
------------------------------------- -------------- -------------- ---------------------- --------------------------
<S> <C> <C> <C> <C>
Elliott Associates, L.P. 204,773(1) 2.7% 425,001(2) 0
------------------------------------- -------------- -------------- ---------------------- --------------------------
Westgate International, L.P. 204,771(3) 2.7% 424,999(4) 0
------------------------------------- -------------- -------------- ---------------------- --------------------------
</TABLE>
(1) The number of shares of common stock listed as beneficially
owned by Elliott represents (i) 178,063 shares which were issued to Elliott on
July 17, 2000 and (ii) the number of shares of common stock issuable to Elliott
upon the exercise of the Initial Warrant issued to Elliott for 26, 710 shares of
common stock. Because the number of shares of common stock issuable upon
exercise of the Initial Warrant is dependent in part upon the market price of
the common stock prior to exercise, the actual number of shares of common stock
that will be issued in respect of such exercise and consequently the number of
shares of common stock that will be beneficially owned by Elliott will fluctuate
daily and cannot be determined at this time.
(2) Represents (i) 178,063 shares which were issued to Elliott on
July 17, 2000, (ii) the number of shares of common stock issuable to Elliott
upon the exercise of the Initial Warrant issued to Elliott for 26,710 shares of
common stock, and (iii) an estimate of the number of shares of common stock
issuable to Elliott upon the exercise of the Adjustment Warrant issued to
Elliott or upon the occurrence of events which trigger the Delay Shares and
Mandated Acceleration Shares. Because the number of shares of common stock
issuable upon exercise of the Initial
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<PAGE> 19
Warrant and Adjustment Warrant is dependent in part upon the market price of the
common stock prior to exercise, the actual number of shares of common stock that
will be issued in respect of such exercises and consequently the number of
shares of common stock that will be offered for sale under this registration
statement, cannot be determined at this time. Furthermore, because the number of
shares of common stock issuable as Delay Shares and Mandated Acceleration Shares
is dependent in part upon the occurrence of trigger events prior to issuance,
the actual number of shares of common stock that will be issued as Delay Shares
and Mandated Acceleration Shares and consequently the number of shares of common
stock that will be offered for sale under this registration statement, cannot be
determined at this time.
(3) The number of shares of common stock listed as beneficially
owned by Westgate represents (i) 178,062 shares which were issued to Westgate on
July 17, 2000 and (ii) the number of shares of common stock issuable to Westgate
upon the exercise of the Initial Warrant issued to Westgate for 26,709 shares of
common stock. Because the number of shares of common stock issuable upon
exercise of the Initial Warrant is dependent in part upon the market price of
the common stock prior to exercise, the actual number of shares of common stock
that will be issued in respect of such exercise and consequently the number of
shares of common stock that will be beneficially owned by Westgate will
fluctuate daily and cannot be determined at this time.
(4) Represents (i) 178,062 shares which were issued to Westgate on
July 17, 2000, (ii) the number of shares of common stock issuable to Westgate
upon the exercise of the Initial Warrant issued to Westgate for 26,709 shares of
common stock, and (iii) an estimate of the number of shares of common stock
issuable to Westgate upon the exercise of the Adjustment Warrant issued to
Westgate or upon the occurrence of events which trigger the Delay Shares and
Mandated Acceleration Shares. Because the number of shares of common stock
issuable upon exercise of the Initial Warrant and Adjustment Warrant is
dependent in part upon the market price of the common stock prior to exercise,
the actual number of shares of common stock that will be issued in respect of
such exercises and consequently the number of shares of common stock that will
be offered for sale under this registration statement, cannot be determined at
this time. Furthermore, because registration statement, cannot be determined at
this time. Furthermore, because the number of shares of common stock issuable as
Delay Shares and Mandated Acceleration Shares is dependent in part upon the
occurrence of trigger events prior to issuance, the actual number of shares of
common stock that will be issued as Delay Shares and Mandated Acceleration
Shares and consequently the number of shares of common stock that will be
offered for sale under this registration statement, cannot be determined at this
time.
(5) Assumes sale of all shares of common stock offered hereby.
Pursuant to the terms of the Registration Rights Agreement,
PLATO has agreed to indemnify the selling stockholders against all losses and
liabilities caused by an untrue statement of material fact contained in this
prospectus or the registration statement of which this prospectus constitutes a
part or any omission to state a material fact required to be stated therein.
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledgees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions.
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<PAGE> 20
These sales may be at fixed or negotiated prices. The selling stockholders may
use any one or more of the following methods when selling shares:
- ordinary brokerage transactions and transactions in
which the broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to
sell the shares as agent but may position and resell a
portion of the block as principal to facilitate the
transaction;
- purchases by a broker-dealer as principal and resale by
the broker-dealer for its account;
- exchange;
- privately negotiated transactions;
- short sales;
- broker-dealers may agree with the selling stockholders
to sell a specified number of such shares at a
stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales
against the box, puts and calls and other transactions in securities of PLATO or
derivatives of PLATO's securities and may sell or deliver shares in connection
with these trades. The selling stockholders may pledge their shares to their
brokers under the margin provisions of customer agreements. If a selling
stockholder defaults on a margin loan, the broker may, from time to time, offer
and sell the pledged shares.
Broker-dealers engaged by the selling stockholders may arrange
for other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser or shares, from the purchaser) in amounts to be
negotiated.
The selling stockholders and any broker-dealers or agents that
are involved in selling the shares may be deemed to be, but do not acknowledge
being, "underwriters" within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act.
Neither PLATO nor the selling stockholder can presently estimate the amount of
such
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<PAGE> 21
commission or discount. PLATO knows of no existing arrangements between the
selling stockholders and any broker-dealers or agents.
PLATO is required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to the
selling stockholders. PLATO has agreed to indemnify the selling stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
EXPENSES
PLATO has agreed to pay the expenses incurred in connection
with the preparation and filing of this prospectus and the related registration
statement, except for commissions of brokers or dealers and any transfer fees
incurred in connection with the sales of the common stock by the selling
stockholders, which will be paid by the selling stockholders. We have also
agreed to pay the fees and expenses incurred in connection with the registration
or qualification of the common stock for sale under state securities laws.
LEGAL MATTERS
Winston & Strawn, Chicago, Illinois has rendered an opinion
(filed as an exhibit to the Registration Statement) with respect to the validity
of the common stock.
EXPERTS
The financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K of PLATO Learning, Inc. for the
year ended October 31, 1999 have been so incorporated in reliance on the report
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable
by PLATO in connection with the sale of the securities being registered hereby.
All of the amounts shown are estimated, except the SEC registration fee and the
Nasdaq National Market filing fee.
<TABLE>
-------------------------------------------------------------------------------------- -----------------
<S> <C>
Securities and Exchange Commission Registration Fee.................................. $ 3,015.38
-------------------------------------------------------------------------------------- -----------------
Printing expenses.................................................................... $500
-------------------------------------------------------------------------------------- -----------------
Legal fees and expenses.............................................................. $10,000
-------------------------------------------------------------------------------------- -----------------
Accounting fees and expenses......................................................... $7,000
-------------------------------------------------------------------------------------- -----------------
</TABLE>
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<PAGE> 22
<TABLE>
-------------------------------------------------------------------------------------- -----------------
<S> <C>
Blue Sky fees and expenses........................................................... $0
-------------------------------------------------------------------------------------- -----------------
Miscellaneous expenses............................................................... $5,000
-------------------------------------------------------------------------------------- -----------------
Total................................................................................ $ 25,515.38
==============
-------------------------------------------------------------------------------------- -----------------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of
Delaware permits indemnification of directors, officers, employees and agents of
corporations under certain conditions and subject to certain limitations.
Article V of PLATO's By-Laws provides for indemnification of any director,
officer, or legal representatives of PLATO, or any person serving in the same
capacity in any other enterprise at our request, under certain circumstances.
Article Five of PLATO's Amended and Restated By-Laws indemnifies the directors
and officers of PLATO to the fullest extent permissible under Delaware law.
PLATO's directors and officers are insured, at the expense of
the Registrant, against certain liabilities which might arise out of their
employment and which might not be subject to indemnification under the By-Laws.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed herewith or incorporated
herein by reference.
EXHIBIT DESCRIPTION OF EXHIBITS
NUMBER
4.1 Common Stock Investment Agreement
4.2 Registration Rights Agreement
4.3 Initial Warrant Issued to Elliott Associates, L.P.
4.4 Initial Warrant Issued to Westgate International, L.P.
4.5 Adjustment Warrant Issued to Elliott Associates, L.P.
4.6 Adjustment Warrant Issued to Westgate International, L.P.
5.1 Opinion of Winston & Strawn as to legality
23.1 Consent of Winston & Strawn (included in Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney (included on signature page)
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933 (the "Securities Act");
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<PAGE> 23
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this 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 this 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 percent change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
this registration statement or any material change to
such information in this registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by PLATO pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in
this registration statement.
(2) For the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d)
of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to
and meeting requirements of Rule 13a-3 or Rule 14c-3 under the Exchange
Act; and, where interim financial information required to be presented
by Article 3 of Regulation S-X are not set forth in the prospectus, to
deliver or cause to be delivered to each person to whom the prospectus
is sent or given, the latest quarterly report that is
- 19 -
<PAGE> 24
specifically incorporated by reference in the prospectus to provide
such interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in Item 15 (other
than the provisions relating to insurance), or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing this registration statement on Form S-3 and
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bloomington, State of
Minnesota, on August 23, 2000.
PLATO LEARNING, INC.
By: /s/ William R. Roach
-------------------------
Name: William R. Roach
Title: Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes
and appoints William R. Roach and John Murray, and each of them, with full power
of substitution and full power to act without the other, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for such person and in such person's name, place and stead, and to execute in
the name on behalf of each person, individually and in each capacity stated
below, and to sign and file any and all amendments to this registration
statement with the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933,
this registration Statement has been signed by the following persons in the
capacities indicated on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William R. Roach Chief Executive Officer and August 23, 2000
-------------------- Chairman of the Board
William R. Roach
/s/ John Murray President, Chief Operating Officer, August 23, 2000
--------------- Acting Chief Financial Officer and Director
John Murray
/s/ Mary Jo Murphy Vice President, Corporate Controller August 23, 2000
------------------ and Chief Accounting Officer
Mary Jo Murphy
/s/ John L. Krakauer Director August 23, 2000
--------------------
John L. Krakauer
/s/ Vernon B. Lewis, Jr. Director August 23, 2000
------------------------
Vernon B. Lewis, Jr.
/s/ Jack R. Borsting Director August 23, 2000
--------------------
Jack R. Borsting
/s/ Hurdis M. Griffith
---------------------- Director August 23, 2000
Hurdis M. Griffith
/s/ Arthur W. Stellar Director August 23, 2000
---------------------
Arthur W. Stellar
/s/ Dennis J. Reimer Director August 23, 2000
--------------------
Dennis J. Reimer
</TABLE>
-21-
<PAGE> 26
EXHIBIT INDEX
The following documents are filed herewith or incorporated herein by reference.
Exhibit
Number Description of Exhibits
4.1 Common Stock Investment Agreement
4.2 Registration Rights Agreement
4.3 Initial Warrant Issued to Elliott Associates, L.P.
4.4 Initial Warrant Issued to Westgate International, L.P.
4.5 Adjustment Warrant Issued to Elliott Associates, L.P.
4.6 Adjustment Warrant Issued to Westgate International, L.P.
5.1 Opinion of Winston & Strawn as to legality
23.1 Consent of Winston & Strawn (included in Exhibit 5.1)
23.2 Consent of Pricewaterhouse Coopers LLP
24 Power of Attorney (included on signature page)
