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As filed with the Securities and Exchange Commission on February 19, 1997
Registration No. 333-19313
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SUCCESSORIES, INC.
(Exact Name of Registrant as Specified in its Charter)
------------------------
<TABLE>
<C> <C>
ILLINOIS 36-3760230
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
</TABLE>
919 SPRINGER DRIVE, LOMBARD, ILLINOIS 60148, (630) 953-8440
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
------------------------
TIMOTHY C. DILLON
SUCCESSORIES, INC.
919 SPRINGER DRIVE
LOMBARD, ILLINOIS 60148
(630) 953-8440
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
------------------------
Copy to:
GUY E. SNYDER
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 NORTH LASALLE STREET
SUITE 2600
CHICAGO, ILLINOIS 60601
(312) 609-7656
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes 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.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 19, 1997
PROSPECTUS
1,105,900 SHARES
SUCCESSORIES, INC.
COMMON STOCK
------------------------
This Prospectus relates to the offer and sale of shares (the "Shares") of
common stock, par value $0.01 per share (the "Common Stock"), of Successories,
Inc., an Illinois corporation (the "Company"). The Shares may be offered and
sold from time to time by certain selling shareholders of the Company (the
"Selling Shareholders") in transactions in the open market, in negotiated
transactions or a combination of such methods of sale, at fixed prices which may
be changed, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Selling
Shareholders may effect such transactions by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders and/or the
purchasers of the Shares for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). See "Sale of the
Shares."
Seacrest Capital Limited and Infinity Investors acquired 1,212 shares of
the Company's Series B Cumulative Convertible Preferred Stock (the "Series B
Preferred Stock") on December 17, 1996 in a private transaction exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"). As of December 31, 1996, Infinity Investors, Ltd. sold 242
shares of the Series B Preferred Stock to Fairway Capital Limited. The Preferred
Stock is convertible into a maximum of 1,105,900 Shares. See "Recent
Development," "Selling Shareholders" and "Sale of the Shares."
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by the Company. The Company has agreed to bear all
expenses (other than underwriting discounts, broker or dealer commissions, and
fees and expenses of counsel (in excess of $10,000) or other advisors to the
Selling Shareholders) in connection with the registration and sale of the Shares
being offered by the Selling Shareholders and to indemnify the Selling
Shareholders against certain liabilities, including certain liabilities under
the Securities Act.
SEE "RISK FACTORS" BEGINNING ON PAGE THREE FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF SHARES OF COMMON
STOCK OFFERED HEREBY.
The Common Stock is listed on the Nasdaq National Market. On February 18,
1997, the last reported sale price of the Common Stock of the Company on NASDAQ
was $7.125 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is February 19, 1997.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement"), of which this Prospectus forms a part, covering the Shares to be
sold pursuant to this offering.
As permitted by the rules and regulations of the Commission, this
Prospectus omits certain information, exhibits and undertakings contained in the
Registration Statement. Such additional information, exhibits and undertakings
can be inspected at and obtained from the Commission as set forth below. For
additional information regarding the Company, the Common Stock and related
matters and documents, reference is made to the Registration Statement and
exhibits thereto.
CERTAIN DOCUMENTS PREVIOUSLY FILED BY THE COMPANY WITH THE COMMISSION
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE
ACT"), ARE INCORPORATED BY REFERENCE IN THIS PROSPECTUS. SEE "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE." COPIES OF ANY DOCUMENTS INCORPORATED HEREIN BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS THEY ARE SPECIFICALLY
INCORPORATED BY REFERENCE THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO
WHOM A PROSPECTUS IS DELIVERED UPON REQUEST TO THE SECRETARY, SUCCESSORIES,
INC., 919 SPRINGER DRIVE, LOMBARD, ILLINOIS 60148, (TELEPHONE: (630) 953-8440).
The Company is subject to the informational and reporting requirements of
the Exchange Act, and accordingly files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed with the Commission, as well as the Registration Statement,
are available for inspection and copying at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549, and at certain regional offices of the Commission
located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and
Seven World Trade Center, 13th Floor, New York, New York 10007. Copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, at prescribed
rates. The reports, proxy statements and other information filed with the
Commission, as well as the Registration Statement, are available on a Web site
that the Commission maintains. The address of the Commission's Web site is
http://www.sec.gov.
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THE COMPANY
The Company is a specialty retailer and direct mail catalog company that
designs, manufactures and markets a diverse range of business and personal
motivational and self-improvement products, many of which are the Company's own
proprietary designs. Its products include distinctive lines of wall decor,
desktop art, books, audio tapes, personalized gifts and awards, apparel,
greeting cards and mugs. The Company's products are designed to promote business
themes such as teamwork, goals, quality and leadership. In-house designers
create proprietary art work and designs which can be used in connection with a
wide variety of products. Company designers also assist in customizing products
to fulfill a customer's special motivational or award product needs. The
Company's products are marketed under its Successories trade name through direct
marketing, retail sales (both franchised and Company-owned), and wholesale
distribution. The Company has a wide range of customers, including Fortune 500
companies, mid-sized and small companies, corporate management personnel and
retail customers. The Company's principal executive offices are located at 919
Springer Drive, Lombard, Illinois 60148. Its telephone number is (630) 953-8440.
RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should carefully consider the following factors in
evaluating the Company, its business and an investment in the Shares offered by
this Prospectus.
NO ASSURANCE OF CONTINUED GROWTH AND PROFITABILITY
Since its formation in 1985, the Company has experienced rapid growth and,
as part of its business strategy, the Company intends to pursue the continuation
of this growth. The Company intends to open new stores, sell additional
franchises, expand its wholesale channels of distribution and increase catalog
revenues. The Company's expansion plans will place significant demands on its
management, working capital, information systems, financial and management
controls and staff. The Company's ability to control and manage this growth
effectively is vital to the Company's long-term profitability. There can be no
assurance that this rapid growth will continue in the future, or, if it does
continue, that the Company will operate profitably.
NO ASSURANCE OF PROFITABLE EXPANSION OF RETAIL OPERATIONS
In 1991, the Company initiated a Company-owned retail store concept and by
the end of the fiscal year ended February 3, 1996, had 54 Company-owned retail
locations in addition to 43 franchised locations. As of December 31, 1996, there
were 56 Company-owned retail locations and 44 franchised locations. The Company
anticipates opening new Company-owned retail locations and franchised locations
in the year ahead. The Company expects to rely increasingly upon new geographic
markets to effect its planned expansion and may be expanding into geographic
markets in which it has no previous operating experience. There can be no
assurance that the Company will be able to open its planned new retail stores or
that it can continue to operate its retail stores profitably. The Company's
ability to expand will depend upon a number of factors, including: selection and
availability of suitable store locations; negotiation of acceptable lease terms;
the securing of required state and local permits and approvals; accuracy and
proper utilization of management information systems; timely build-out; hiring;
training and retention of skilled management and other personnel; availability
of adequate financing; general economic conditions; and other factors, many of
which are beyond the Company's control. Moreover, the opening of additional
stores in current markets could have the effect of diverting sales from the
Company's existing stores.
NO ASSURANCE OF PROFITABLE EXPANSION OF FRANCHISING OPERATIONS
As of December 31, 1996, the Company had 44 franchised retail locations.
The Company's franchise expansion plan will depend upon a number of factors:
including the ability of the Company's franchisees to obtain suitable sites for
new stores; the recruitment of new franchisees; the hiring and training of
qualified personnel; the opening of new stores in a timely manner; and the
availability of capital to franchisees. There
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can be no assurance that the Company will achieve its planned franchise
expansion or that the expansion will be profitable.
GOVERNMENT REGULATION MAY ADVERSELY AFFECT FRANCHISING EXPANSION AND
PROFITABILITY
As a franchisor, the Company is subject to various federal and state
franchise laws and regulations. Although the Company believes it is currently in
compliance in all material respects with existing federal and state laws, there
is a trend toward increased government regulation of franchising. Additional
legislation is currently pending both at the federal and state levels which
could expand pre-sale disclosure requirements, further regulate substantive
aspects of the franchise relationship and require the Company to file its
franchise offering circulars with additional government authorities. The
promulgation of new franchising laws and regulations could adversely affect the
Company.
GROWTH DEPENDENT UPON CONTINUED EFFECTIVENESS OF MANAGEMENT INFORMATION SYSTEMS
The Company's success is dependent upon, among other factors, the accuracy
and proper utilization of its management information systems. The Company's
ability to manage its inventory and accounts receivable collections, to
purchase, sell and ship its products efficiently and on a timely basis, and to
operate in a cost effective manner is dependent upon the quality and utilization
of the information generated by its management information systems. The Company
continuously evaluates the effectiveness of its retail and direct marketing
management information systems. The Company believes, however, that its
management information systems, coupled with planned enhancements are sufficient
to sustain its present operations and its anticipated growth for the foreseeable
future. If the growth of the Company surpasses the capacity of its management
information systems, the Company's operations could be negatively affected.
GROWTH DEPENDENT ON RETAINING KEY PERSONNEL
The success of the Company's business will largely depend upon the efforts
and abilities of its executive officers and certain other key employees. The
Company's Chief Executive Officer, Chief Operating Officer and Senior Vice
President/Creative Director are the only key employees subject to written
employment agreements. The Company believes that its future success is also
dependent upon its ability to continue to attract and retain qualified personnel
in all areas of its business.
CONTINUED GROWTH DEPENDENT UPON ABILITY TO PROTECT INTELLECTUAL PROPERTY AND
PROPRIETARY RIGHTS
The Company relies on copyright and trademark laws to protect its
proprietary rights in the names, distinctive configurations and original art
work and authorship of its products and services. There can be no assurance that
this protection is adequate. Moreover, the laws of certain countries in which
the Company's products are sold do not protect the Company's products and
intellectual property rights to the same extent as do the laws of the United
States.
SEASONALITY AND FLUCTUATIONS IN QUARTERLY RESULTS AFFECT OPERATING RESULTS
The Company generally experiences peak sales in the fourth quarter of its
fiscal year (November through January) due to the holiday season, and its lowest
sales levels in its second fiscal quarter (May through July). The effects of
seasonality are greater in the Company's retail operations than in its catalog
operations. Most expenses are incurred evenly throughout the year, although some
selling and administrative expenses are variable with sales. The Company's
quarterly results may also vary depending upon such factors as the opening of
new stores, new catalog mailings and the timing of new product introductions by
the Company.
COMPANY OPERATES IN A HIGHLY COMPETITIVE INDUSTRY
The industry supplying motivational, self-improvement and custom awards is
highly competitive and fragmented with limited barriers to entry. The primary
bases for competition are customer service, selection, price, quality and name
recognition. There can be no assurance that other companies with greater
resources than the Company will not enter the industry and compete directly
against the Company. In addition, in its
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franchising operations the Company competes with other franchisors for qualified
franchisees. Many competing franchisors have established business concepts and
significantly greater financial and other resources than the Company.
INCREASES IN POSTAGE AND SHIPPING EXPENSES COULD ADVERSELY AFFECT OPERATING
RESULTS
Postage and shipping are significant expenses in the operation of the
Company's mail order business. The Company ships its products to customers
generally by overnight delivery and surface services. The Company generally
invoices the costs of delivery and parcel shipments directly to customers as
separate shipping and handling charges. Any increases in shipping rates or
postal rates (paid by the Company for its catalog mailings) could have an
adverse effect on the Company's operating results. Similarly, strikes or other
service interruptions by such shippers could adversely affect the Company's
ability to market or deliver product on a timely basis.
IMPOSITION OF STATE SALES TAX COLLECTION OBLIGATION COULD INCREASE EXPENSES AND
ADVERSELY AFFECT THE COMPANY'S BUSINESS
The Company presently collects retail occupation tax, commonly referred to
as sales tax, or other similar tax only on sales of products to residents of the
states in which the Company operates retail locations. Various states have
sought to impose on direct marketers the burden of collecting state sales tax on
the sale of products shipped to that state's residents. The United States
Supreme Court has ruled that the various states, absent congressional
legislation, may not impose tax collection obligations on an out-of-state mail
order company whose only contacts with the taxing state are the distribution of
catalogs and other advertisement materials through the mail and whose subsequent
delivery of purchased goods is by U.S. mail or interstate common carriers.
Legislation has been introduced in the United States Senate in the past which,
if passed, would allow states to impose state sales tax collection obligations
on out-of-state mail order companies, such as the Company, whose sales to
residents of the taxing state exceed certain levels. The Company believes if
such legislation was passed its present sales to residents of numerous states
would be subject to sales tax. Although no legislation is currently pending
which would subject the Company to a sales tax collection obligation,
legislation similar to that proposed in the past could be introduced and if
enacted, the imposition of a sales tax collection obligation on the Company may
result in additional administrative expenses to the Company and price increases
to the customer that could adversely affect the Company, its financial condition
and results of operation.
PRINCIPAL STOCKHOLDERS HAVE SIGNIFICANT INFLUENCE ON MANAGEMENT AND OPERATIONS
The directors and officers of the Company beneficially own approximately
29% of the Company's outstanding shares of Common Stock. As a result, the
directors and officers will have significant influence on the management and
direction of the Company.
PREFERRED STOCK AND CERTAIN ANTI-TAKEOVER PROVISIONS COULD PREVENT TAKEOVER
ATTEMPTS AND ADVERSELY AFFECT STOCK PRICE
The Board of Directors has authority to establish the designations,
liquidation preferences, dividend rights, terms of redemption, conversion
rights, sinking fund terms and all other preferences and rights (including
voting rights) of any series of preferred stock of the Company ("Preferred
Stock"). The Board of Directors, without stockholder approval, can issue shares
of Preferred Stock with voting and conversion rights that could adversely affect
the voting power and other rights of holders of shares of Common Stock. Any
designation and issuance of such shares could be used to dilute the share
ownership of persons seeking to gain control of the Company and could otherwise
have the effect of delaying, deferring or preventing a change in control of the
Company. In addition, certain statutory provisions of Illinois law and the
Company's Articles of Incorporation could have an anti-takeover effect.
Accordingly, the possible impact on takeover attempts could adversely affect the
price of the Common Stock. Although the Company has no current plans to issue or
to designate any additional series of Preferred Stock, there can be no assurance
that the Company will not do so in the future.
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STOCK PRICE HAS HISTORICALLY BEEN SUBJECT TO VOLATILITY
In recent years, the stock market has experienced a high level of price and
volume volatility, and market prices for securities of many companies have
experienced wide price fluctuations not necessarily related to the operating
performance of such companies. In addition to such market risks, the price for
the Common Stock may be affected by fluctuations in the Company's quarterly
results, increased competition, higher operating expenses, general economic
conditions and other factors.
SIZE OF OFFERING COULD ADVERSELY AFFECT ABILITY OF HOLDERS TO SELL STOCK
Up to 1,105,900 shares of Common Stock may be offered and sold from time to
time pursuant to this Prospectus. Due to the large number of shares of Common
Stock offered hereby relative to the number of outstanding shares that are
currently freely tradeable (either pursuant to registration or to Rule 144) and
to the fluctuations in the trading volume of the Common Stock, if holders of a
significant number of shares of Common Stock attempt to sell their shares
concurrently, the trading price of the Common Stock and the availability of a
liquid trading market for shares of Common Stock could be negatively affected.
PAST OPERATIONAL DIFFICULTIES HAVE ADVERSELY AFFECTED THE MARKET PRICE FOR THE
COMMON STOCK
Due to the significant growth the Company experienced, many of the
Company's internal systems and controls were unable to keep pace with the
Company's growth. The weaknesses in these controls and systems inhibited timely
identification of escalating costs. Further, during the 1994 Holiday selling
season, the Company experienced construction delays in opening new stores and
operational difficulties during the implementation of a new automated order
fulfillment system. Shortly thereafter, the Company discovered that the value of
its inventory was overstated primarily as a result of an incorrect estimate of
inventory costs. As a result, the Company experienced a loss from operations for
the fiscal year ended April 30, 1995 and the trading price of the Company's
stock was adversely affected. While the Company has made and continues to make
substantial improvements to its internal operations to more effectively manage
operating expenses, there can be no assurance that further problems in these
areas or others will not adversely affect the Company's operating results or
that the Company will be able to operate profitably in the future.
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference herein contain
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Such forward-looking statements may be
deemed to include, among other things, statements relating to anticipated
financial performance, management's long-term performance goals, programs to
reduce the Company's costs and enhance asset utilization, the potential
realization of benefits from net operating loss carryforwards prior to their
expiration, the Company's generation of funds sufficient to meet its current
operating needs and to fund anticipated capital expenditures, as well as
statements relating to the Company's operational and growth strategies. Actual
results could differ materially from those addressed in forward-looking
statements contained in this Prospectus or in any document incorporated by
reference herein as a result of the factors discussed above in this "Risk
Factors" section and elsewhere in this Prospectus.
RECENT DEVELOPMENT
On December 17, 1996, the Company sold the Series B Preferred Stock to
Infinity Investors, Ltd. ("Infinity") and Seacrest Capital Limited, a non-U.S.
person ("Seacrest"), for $5,000,000 pursuant to a Regulation D Securities
Subscription Agreement (the "Subscription Agreement"). As of December 31, 1996,
Infinity sold 242 shares of Series B Preferred Stock to Fairway Capital Limited,
a non-U.S. person ("Fairway"), for a payment of $1,000,000. In connection with
such sale Fairway agreed to be bound by the terms of the Subscription Agreement
and the related documents described below, acknowledged that the Series B
Preferred Stock is unregistered and may not be offered, sold or otherwise
transferred unless in compliance with federal and state securities laws, and
represented that it was acquiring the shares of Series B Preferred Stock for its
own account, for investment and not with a view to distribution thereof.
Infinity,
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Seacrest and Fairway are referred to herein as the "Selling Shareholders". The
Series B Preferred Stock has a liquidation preference equal to $5,000 per share
plus dividends that have accrued and not been paid when due (the "Liquidation
Preference"). The Series B Preferred Stock provides for quarterly dividends at
an annual dividend rate of 4.95% on the Liquidation Preference.
Each share of Series B Preferred Stock is convertible into that number of
shares of Common Stock obtained by dividing the Liquidation Preference by the
Conversion Price (as described below) subject to the following limitations: (i)
606 shares of Series B Preferred Stock are convertible commencing February 16,
1997; (ii) 606 shares of Series B Preferred Stock are convertible commencing
March 18, 1997; (iii) all outstanding Series B Preferred Stock shall
automatically be converted into Common Stock on December 17, 1998; (iv) the
conversion right of a Selling Shareholder is limited (subject to certain
exceptions) so that in no instance shall the maximum number of shares of Common
Stock which a Selling Shareholder may receive on conversion exceed at any one
time, an amount equal to the remainder of (X) 4.99% of the then issued and
outstanding shares of Common Stock following such conversion minus (Y) the
number of shares of Common Stock of the Company then owned by the Selling
Shareholder; and (v) the Company shall not be obligated to honor any conversion
(including any automatic conversions on December 17, 1998) if after giving
effect to the issuance of the shares of Common Stock, the Company would not be
in compliance with applicable National Association of Securities Dealers
corporate governance rules (the "Conversion Limit"). Any shares of Series B
Preferred Stock which cannot be converted solely as a result of the Conversion
Limit must be redeemed by the Company for an amount equal to the number of
shares of Common Stock that would have been issued upon such conversion
multiplied by the average of the closing bid prices per share of Common Stock on
NASDAQ for the five consecutive trading days immediately preceding the date of
determination (the "Market Price"). The Conversion Price is equal to the lesser
of (X) $9.00 and (Y) the Market Price. The Conversion Price may be increased by
an amount equal to the formula:
I = (C - (1.25 X 9.00)) /2, where
I = Increase in Conversion Price
C = Market Price
Each holder of Series B Preferred Stock shall have the same voting rights
as a holder of the number of shares of Common Stock which such holder would own
if it converted its Series B Preferred Stock. However, the voting rights of a
Selling Shareholder are limited (subject to certain exceptions) such that in no
event will a Selling Shareholder be entitled to vote more than 4.99% of the then
issued and outstanding shares of Common Stock of the Company.
At any time commencing April 17, 1997, the Company may redeem the Series B
Preferred Stock for the Liquidation Preference plus all accrued but unpaid
dividends (the "Redemption Price"). In the event the Company: (i) sells all or
substantially all of its assets; or (ii) enters into a consolidation or merger
transaction (with certain exceptions) the Company must redeem the outstanding
Series B Preferred Shares for the redemption price. Finally, in the event of a
change of control, as defined in the Certificate of Designation creating the
Series B Preferred Stock, each holder of Series B Preferred Stock may elect to
have its Series B Preferred Stock redeemed for the Redemption Price.
The Series B Preferred Stock ranks on parity with the Company's Series A
Cumulative Convertible Preferred Stock and is senior to the Common Stock as to
dividends or upon liquidation.
Under the terms of a Registration Rights Agreement dated December 17, 1996,
among the Company and the initial Selling Shareholders (the "Registration Rights
Agreement") and the Subscription Agreement, the Company agreed to register the
Shares for resale by the Selling Shareholders and has agreed to indemnify the
Selling Shareholders against certain liabilities under the Securities Act. The
Registration Statement of which this Prospectus is a part was filed with the
Commission pursuant to the Registration Rights Agreement and the Subscription
Agreement.
The Subscription Agreement also grants the Selling Shareholders a right of
first refusal on certain future financings for a maximum of 180 days from
December 17, 1996.
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The foregoing is a description of the terms of the Series B Preferred Stock
and the related agreements. This description does not purport to be complete and
is subject to and qualified in its entirety by reference to the Certificate of
Designation relating to the Series B Preferred Stock, which was filed with the
Illinois Secretary of State as part of the Company's Articles of Incorporation
and the related agreements, copies of which will be made available to
prospective investors by the Company upon request.
SELLING SHAREHOLDERS
The Shares covered by this Prospectus are being offered and sold by the
Selling Shareholders.
The following table sets forth the number of Shares beneficially owned by
each of the Selling Shareholders as of February 12, 1997, the number of Shares
to be offered by each of the Selling Shareholders pursuant to this Prospectus
and the number of Shares to be beneficially owned by each of the Selling
Shareholders if all of the Shares offered hereby are sold as described herein.
The Selling Shareholders are affiliates of each other. The Selling Shareholders
have not held any positions or offices with, been employed by, or otherwise had
a material relationship with, the Company or any of its predecessors or
affiliates since December 31, 1993.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF OUTSTANDING
BENEFICIALLY OWNED SHARES BENEFICIALLY NUMBER OF SHARES
NAME OF AS OF OWNED AS OF NUMBER OF SHARES BENEFICIALLY OWNED
SELLING SHAREHOLDER FEBRUARY 12, 1997(1)(2) FEBRUARY 12, 1997(1)(2) OFFERED HEREBY(1)(2) AFTER OFFERING
------------------- ----------------------- ------------------------- -------------------- ------------------
<S> <C> <C> <C> <C>
Infinity Investors,
Ltd................... 664,270 10.4% 664,270 0
SeaCrest Capital
Limited............... 220,815 3.7% 220,815 0
Fairway Capital
Limited............... 220,815 3.7% 220,815 0
</TABLE>
- -------------------------
(1) Represents the maximum number of Shares which may be issued upon conversion
of the Series B Preferred Stock, which is 664,270 Shares for Infinity
Investors, Ltd., 220,815 Shares for Seacrest Capital Limited and 220,815
Shares for Fairway Capital Limited. See "Recent Development" for a
description of the limitations on conversion of the Series B Preferred
Stock.
(2) The maximum number of shares of Common Stock which a Selling Shareholder may
receive on conversion may not exceed at any one time an amount equal to the
remainder of (x) 4.99% of the then issued and outstanding shares of Common
Stock following such conversion minus (y) the number of shares of Common
Stock of the Company then owned by the Selling Shareholder, and the Company
shall not be obligated to honor any conversion (including any automatic
conversions on December 17, 1998) if, after giving effect to the issuance of
the shares of Common Stock, the Company would not be in compliance with
applicable National Association of Securities Dealers corporate governance
rules. See "Recent Development" for a further description of the limitations
on conversion of the Series B Preferred Stock.
Under the terms of the Registration Rights Agreement and Subscription
Agreement, the Company agreed to file a registration statement with respect to
the potential resale of the Shares and to maintain the effectiveness of such
registration statement for a period of two (2) years. All of the registration
and filing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses and reasonable fees and disbursements (not
to exceed $10,000) of one counsel for all the Selling Shareholders will be paid
by the Company; provided, however, that any underwriters' discounts and selling
commissions, fees and disbursements of counsel for the Selling Shareholders in
excess of $10,000 and fees and disbursements of other advisors to the Selling
Shareholders will be borne by the Selling Shareholders. See "Recent
Development."
SALE OF THE SHARES
Sales of the Shares may be made by the Selling Shareholders, or, subject to
applicable law, by pledgees, donees, transferees or other successors in
interest, in the over-the-counter market or otherwise at prices and at
8
<PAGE> 10
terms then prevailing or at prices related to the then current market price, or
in negotiated transactions. The Shares may be sold by one or more of the
following: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to this Prospectus; and (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers. In effecting sales, brokers or dealers
engaged by the Selling Shareholders may arrange for other brokers or dealers to
participate. Brokers or dealers will receive commissions or discounts from the
Selling Shareholders in amounts to be negotiated immediately prior to sale. Such
brokers or dealers may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales.
In offering the Shares covered hereby, the Selling Shareholders and any
broker-dealers and any other participating broker-dealers who execute sales for
the Selling Shareholders may be deemed to be "underwriters" within the meaning
of the Securities Act in connection with such sales, and any profits realized by
the Selling Shareholders and the compensation of such broker-dealer may be
deemed to be underwriting discounts and commissions. In addition, any Shares
covered by this Prospectus which qualify for sale pursuant to Rule 144 may be
sold under Rule 144 rather than pursuant to this Prospectus. None of the Shares
covered by this Prospectus presently qualifies for sale pursuant to Rule 144.
The Company has advised the Selling Shareholders that during such time as
they may be engaged in a distribution of Shares included herein they are
required to comply with Rules 10b-6 and 10b-7 under the Exchange Act (as those
Rules are described in more detail below) and, in connection therewith, that
they may not engage in any stabilization activity in connection with the Shares,
are required to furnish to each broker-dealer through which Shares included
herein may be offered copies of this Prospectus, and may not bid for or purchase
any securities of the Company or attempt to induce any person to purchase any
securities of the Company except as permitted under the Exchange Act. The
Selling Shareholders have agreed to inform the Company when the distribution of
the Shares is completed.
Rule 10b-6 under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Rule 10b-7 governs bids and purchases made in
order to stabilize the price of a security in connection with a distribution of
the security.
LEGAL MATTERS
A legal opinion to the effect that upon conversion of the Series B
Preferred Stock, the Shares will be validly issued, fully paid and nonassessable
has been rendered by Vedder, Price, Kaufman & Kammholz, Chicago, Illinois. Guy
E. Snyder, a partner of Vedder, Price, Kaufman & Kammholz, is a director of the
Company.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the transition period ended February 3, 1996,
have been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act (Commission File No. 0-22834) are incorporated
herein by this reference:
(1) The Company's Annual Report on Form 10-K for the transition period
from May 1, 1995 to February 3, 1996, as amended by the Company's Form
10-K/A for the transition period from May 1, 1995 to February 3, 1996;
9
<PAGE> 11
(2) The Company's Quarterly Reports on Form 10-Q for the quarters
ended May 4, 1996, August 3, 1996 and November 2, 1996;
(3) The Company's Current Report on Form 8-K dated October 18, 1996;
and
(4) The description of the Company's Common Stock contained in the
Company's Registration Statement filed pursuant to Section 12 of the
Exchange Act on Form 8-A, as amended.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the date
upon which this offering is terminated shall be deemed to be incorporated by
reference herein and to be part hereof from the date any such document is filed.
Any statements contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document which also incorporates by reference) modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed to constitute a part hereof except as so modified or superseded. All
information appearing in this Prospectus is qualified in its entirety by the
information and financial statements (including notes thereto) appearing in the
documents incorporated herein by reference, except to the extent set forth in
this paragraph.
------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
SHAREHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE SHARES OF COMMON STOCK IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration fee to the Securities and Exchange
Commission................................................ $ 2,304.00
NASDAQ...................................................... 17,500.00
Accounting fees and expenses................................ 1,000.00
Legal fees and expenses..................................... 10,000.00
Miscellaneous expenses...................................... 2,000.00
----------
Total.................................................. $32,804.00
==========
</TABLE>
The foregoing items, except for the SEC registration fee and the NASDAQ
listing fee, are estimated. The Company has agreed to bear all expenses (other
than underwriting discounts, broker or dealer commissions, and fees and expenses
of counsel (in excess of $10,000) or other advisors to the Selling Shareholders)
in connection with the registration and sale of the Shares being offered by the
Selling Shareholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 8.75 of the Illinois Business Corporation Act of 1953 (the
"Illinois BCA") empowers a corporation, subject to certain limitations, to
indemnify its directors and officers against expenses (including attorneys'
fees, judgments, fines and certain settlements) actually and reasonably incurred
by them in connection with any suit or proceeding to which they are a party so
long as they acted in good faith and in a manner reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to a
criminal action or proceeding, so long as they had no reasonable cause to
believe their conduct to have been unlawful. The Registrant's By-laws provide
that the Registrant shall indemnify its directors and such of its officers,
employees and agents as the Board of Directors may determine from time to time,
to the fullest extent permitted by Section 8.75 of the Illinois BCA.
The Company has entered into Indemnification Agreements with each of its
directors (the "Indemnification Agreements"). Under the Indemnification
Agreements, the Company has agreed to indemnify and hold each of the directors
of the Company harmless against any and all expenses (including attorneys' fees
and disbursements), judgments, fines, amounts paid in settlement and any other
liabilities incurred by reason of the fact that the director was or is a
director, officer, employee or agent of the Company to the fullest extent
permitted by the Illinois BCA. Under the Indemnification Agreements, the Company
will also advance to directors expenses incurred by the directors in (i)
defending any suit or other proceeding to which the director is, or is
threatened to be made, a party by reason such director's being (or having been)
a director, officer, employee or agent of the Company, and (ii) prosecuting any
suit or other proceeding to enforce such director's rights under the
Indemnification Agreement, subject to certain conditions set forth in the
Indemnification Agreements. The rights granted to Directors by the Company under
the Indemnification Agreements shall continue to be valid, binding and
enforceable both before and after a director has ceased to be a director,
officer, employee or agent of the Company.
ITEM 16. EXHIBITS
<TABLE>
<S> <C>
4.1 Specimen Common Stock Certificate(1)
4.2 Articles of Incorporation of Registrant(1)
4.3 By-laws of Registrant(1)
5.1 Opinion of Vedder, Price, Kaufman & Kammholz as to the
legality of the Securities being registered (filed herewith)
23.1 Consent of Price Waterhouse LLP (filed herewith)
</TABLE>
II-1
<PAGE> 13
<TABLE>
<C> <S>
23.2 Consent of Vedder, Price, Kaufman & Kammholz (included in
Exhibit 5.1 hereto)
24.1 Power of Attorney (see signature page to the Registration
Statement as originally filed)
99.1 Certificate of Designation creating the Company's Series A
Cumulative Convertible Preferred Stock (previously filed as
Exhibit 3.3 to the Registration Statement as originally
filed, and incorporated by reference herein)
99.2 Certificate of Designation creating the Company's Series B
Cumulative Convertible Preferred Stock (previously filed as
Exhibit 3.4 to the Registration Statement as originally
filed, and incorporated by reference herein)
99.3 Regulations D Securities Subscription Agreement among
Successories, Inc., Infinity Investors Limited and Seacrest
Capital Limited dated December 17, 1996 (previously filed as
Exhibit 10.24 to the Registration Statement as originally
filed, and incorporated by reference herein)
99.4 Registration Rights Agreement dated as of December 17, 1996,
by and among Successories, Inc., Infinity Investors Limited
and Seacrest Capital Limited (included as Exhibit D to
Exhibit 10.24 to the Registration Statement as originally
filed, and incorporated by reference herein)
99.5 Form of Subordinated Note Extensions, Stock Options and
Subordination Agreement relating to the extension of
$1,250,000 of Subordinated Notes, and options to purchase
125,000 shares of the Company's Common Stock (previously
filed as Exhibit 10.25 to the Registration Statement as
originally filed, and incorporated by reference herein)
99.6 Articles of Amendment to the Company's Articles of
Incorporation changing the Company's name to Successories,
Inc. (filed herewith)
99.7 Specimen Series A Cumulative Convertible Preferred Stock
Certificate (previously filed as Exhibit 4.2 to the
Registration Statement as originally filed, and incorporated
by reference herein)
99.8 Specimen Series B Cumulative Convertible Preferred Stock
Certificate (previously filed as Exhibit 4.3 to the
Registration Statement as originally filed, and incorporated
by reference herein)
</TABLE>
- -------------------------
(1) Previously filed with Registration Statement on Form SB-2, No. 33-76530C
filed on August 17, 1993, and incorporated herein by reference.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (l)(i) and (1)(ii) 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 the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE> 14
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 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 to the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE> 15
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 on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Lombard, State of Illinois, on
February 12, 1997.
SUCCESSORIES, INC.
By: /s/ JAMES M. BELTRAME
------------------------------------
President and Chief Operating
Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME AND CAPACITY DATE
----------------- ----
<C> <S>
/s/ ARNOLD M. ANDERSON February 12, 1997
- ------------------------------------------------------------
Arnold M. Anderson,
Chief Executive Officer,
Chairman of the Board and Director
(Principal Executive Officer)
/s/ JAMES M. BELTRAME February 12, 1997
- ------------------------------------------------------------
James M. Beltrame, President, Chief
Operating Officer and Director
/s/ SEAMAS T. COYLE* February 12, 1997
- ------------------------------------------------------------
Seamas T. Coyle, Director
/s/ TIMOTHY C. DILLON* February 12, 1997
- ------------------------------------------------------------
Timothy C. Dillon, Vice President
and Director
/s/ M. ANDREW KING February 12, 1997
- ------------------------------------------------------------
M. Andrew King, Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ C. JOSEPH LABONTE* February 12, 1997
- ------------------------------------------------------------
C. Joseph LaBonte, Director
/s/ STEVEN B. LARRICK* February 12, 1997
- ------------------------------------------------------------
Steven B. Larrick, Director
/s/ MICHAEL H. MCKEE* February 12, 1997
- ------------------------------------------------------------
Michael H. McKee, Senior Vice President,
Creative Director and Director
/s/ MERVYN C. PHILLIPS, JR.* February 12, 1997
- ------------------------------------------------------------
Mervyn C. Phillips, Jr., Director
/s/ MICHAEL SINGLETARY* February 12, 1997
- ------------------------------------------------------------
Michael Singletary, Director
</TABLE>
S-1
<PAGE> 16
<TABLE>
<CAPTION>
NAME AND CAPACITY DATE
----------------- ----
<C> <S>
/s/ GUY E. SNYDER* February 12, 1997
- ------------------------------------------------------------
Guy E. Snyder, Director
*By: /s/ JAMES M. BELTRAME February 12, 1997
- ------------------------------------------------------------
James M. Beltrame, pursuant to
Power of Attorney as originally filed
</TABLE>
S-2
<PAGE> 17
INDEX OF EXHIBITS
<TABLE>
<S> <S>
4.1 Specimen Common Stock Certificate(1)
4.2 Articles of Incorporation of Registrant(1)
4.3 By-laws of Registrant(1)
5.1 Opinion of Vedder, Price, Kaufman & Kammholz as to the
legality of the Securities being registered (filed herewith)
23.1 Consent of Price Waterhouse LLP (filed herewith)
23.2 Consent of Vedder, Price, Kaufman & Kammholz (included in
Exhibit 5.1 hereto)
24.1 Power of Attorney (see signature page to the Registration
Statement as originally filed)
99.1 Certificate of Designation creating the Company's Series A
Cumulative Convertible Preferred Stock (previously filed as
Exhibit 3.3 to the Registration Statement as originally
filed, and incorporated herein by reference)
99.2 Certificate of Designation creating the Company's Series B
Cumulative Convertible Preferred Stock (previously filed as
Exhibit 3.4 to the Registration Statement as originally
filed, and incorporated herein by reference)
99.3 Regulations D Securities Subscription Agreement among
Successories, Inc., Infinity Investors Limited and Seacrest
Capital Limited dated December 17, 1996 (previously filed as
Exhibit 10.24 to the Registration Statement as originally
filed, and incorporated herein by reference)
99.4 Registration Rights Agreement dated as of December 17, 1996,
by and among Successories, Inc., Infinity Investors Limited
and Seacrest Capital Limited (included as Exhibit D to
Exhibit 10.24 to the Registration Statement as originally
filed, and incorporated herein by reference)
99.5 Form of Subordinated Note Extensions, Stock Options and
Subordination Agreement relating to the extension of
$1,250,000 of Subordinated Notes, and options to purchase
125,000 shares of the Company's Common Stock (previously
filed as Exhibit 10.25 to the Registration Statement as
originally filed, and incorporated herein by reference)
99.6 Articles of Amendment to the Company's Articles of
Incorporation changing the Company's name to Successories,
Inc. (filed herewith)
99.7 Specimen Series A Cumulative Convertible Preferred Stock
Certificate (previously filed as Exhibit 4.2 to the
Registration Statement as originally filed, and incorporated
herein by reference)
99.8 Specimen Series B Cumulative Convertible Preferred Stock
Certificate (previously filed as Exhibit 4.3 to the
Registration Statement as originally filed, and incorporated
herein by reference)
</TABLE>
- -------------------------
(1) Previously filed with Registration Statement on Form SB-2, No. 33-76530C
filed on August 17, 1993, and incorporated herein by reference.
S-3
<PAGE> 1
Vedder, Price, Kaufman & Kammholz
222 North LaSalle Street
Chicago, Illinois 60601-1003
EXHIBIT 5.1
February 19, 1997
Successories, Inc.
919 Springer Drive
Lombard, Illinois 60148
Gentlemen:
We have acted as counsel to Successories, Inc., an Illinois
corporation (the "Company"), in connection with the filing by the Company, with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933, as amended, of a Registration Statement on Form S-3, as amended
(Registration No. 333-19313) (the "Registration Statement"), with respect to
1,105,900 shares of Common Stock, par value $0.01 per share, of the Company
(the "Shares"). In rendering this opinion, we have examined: (i) the Articles
of Incorporation, as amended, and Bylaws of the Company, as the same are
currently in effect; (ii) the Registration Statement (including Exhibits
thereto) filed with the Securities and Exchange Commission; and (iii) such
other documents as we deemed necessary to examine as a basis for the opinions
hereinafter expressed. The Shares are to be offered from time to time by the
selling shareholders named in the Registration Statement (the "Selling
Shareholders") following issuance of such Shares to them upon conversion of the
Company's Series B Cumulative Convertible Preferred Stock (the "Series B
Preferred Stock").
In examining the documents referred to above, we have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity of documents purporting to be originals and the conformity to
originals of all documents submitted to us as copies. As to questions of fact
material to our opinion, we have relied (without investigation or independent
confirmation) upon the representations contained in certificates and other
communications from public officials and officers of the Company.
We express no opinion as to the laws of any jurisdiction other than
the Illinois Business Corporation Act of 1983, as amended, and the Federal laws
of the United States of America.
<PAGE> 2
VEDDER PRICE
Based on the foregoing, and subject to the qualifications, assumptions
and limitations set forth herein, we are of the opinion that:
(i) The Company is incorporated and validly existing under the
laws of the State of Illinois.
(ii) The Shares to be sold by the Selling Shareholders in the
manner contemplated by the Registration Statement have been duly authorized
and, when issued to the Selling Shareholders upon conversion of the Series B
Preferred Stock, will be validly issued, fully paid and nonassessable.
This opinion is delivered to you solely in connection with the filing
of the Registration Statement with respect to the Shares, and this letter and
the opinions stated herein may not be relied upon for any other purpose or by
any person.
We hereby consent to the reference to our Firm under the heading
"Legal Matters" in the Prospectus contained in the Registration Statement and
to the filing of this opinion as Exhibit 5.1 to the Registration Statement.
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No. 1 to the Registration Statement on Form
S-3 of our report dated April 26, 1996 appearing on page F2 of the Celex Group,
Inc. Annual Report on Form 10-K for period ended February 3, 1996. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
Price Waterhouse LLP
Chicago, Illinois
February 17, 1997
<PAGE> 1
EXHIBIT 99.6
------------
File Number 5603-320-3 96599586
DEPT-01 RECORDING $25.00
T#2222 TRAN 3681 09/06/96 11:47:00
#2598 * IR *-96-599586
COOK COUNTY RECORDER
STATE OF ILLINOIS
OFFICE OF
THE SECRETARY OF STATE
WHEREAS, ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF
CELEX GROUP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED
IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE
BUSINESS CORPORATION ACT OF ILLINOIS, IN FORCE JULY 1, A.D. 1984.
96599586
Now Therefore, I, George H. Ryan, Secretary of State of the State of Illinois,
by virtue of the powers vested in me by law, do hereby issue this certificate
and attach hereto a copy of the Application of the aforesaid corporation.
IN TESTIMONY WHEREOF, I hereto set my hand and cause to be affixed the Great
Seal of the State of Illinois, at the City of Springfield, this 2nd day of
August A.D. 1996 and of the Independence of the United States the two hundred
and 21st.
/s/George H. Ryan
------------------
Secretary of State
[SEAL]
C-212.2
<PAGE> 2
FORM BCA-10.30 ARTICLES OF AMENDMENT
(Rev. Jan. 1995) File #D 5603-320-3
George H. Ryan
Secretary of State
Department of Business Services Submit in Duplicate
Springfield, IL 62756
Telephone (217) 782-1832 Filed THIS SPACE FOR USE BY
SECRETARY OF STATE
Aug 02 1996
Remit payment in check or money GEORGE H. RYAN
order, payable to "Secretary of SECRETARY OF STATE Date 8/2/96
State." Franchise Tax $
Filing Fee* $25.00
Penalty $
"The filing fee for articles of Approved Fau 25.00
amendment - $25.00
1. CORPORATE NAME: CELEX Group, Inc.
--------------------------------------------------------
(Note 1)
2. MANNER OF ADOPTION OF AMENDMENT:
The following amendment of the Articles of Incorporation was adopted on
July 30, 1996 in the manner indicated below. ("X" one box only)
/ / By a majority of the incorporators, provided no directors were named in
the articles of incorporation and no directors have been elected;
(Note 2)
/ / By a majority of the board of directors, in accordance with Section 10.10,
the corporation having issued no shares as of the time of adoption of this
amendment;
(Note 2)
/ / By a majority of the board of directors, in accordance with Section 10.15,
shares having been issued but shareholder action not being required for
the adoption of the amendment;
(Note 3)
/x/ By the shareholders, in accordance with Section 10.20, a resolution of the
board of directors having been duly adopted and submitted to the
shareholders. At a meeting of shareholders, not less than the minimum
number of votes required by statute and by the articles of incorporation
were voted in favor of the amendment;
(Note 4)
/ / By the shareholders, in accordance with Sections 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and submitted
to the shareholders. A consent in writing has been signed by shareholders
having not less than the minimum number of votes required by statute and by
the articles of incorporation. Shareholders who have not consented in
writing have been given notice in accordance with Section 7.10;
(Note 4 & 5)
/ / By the shareholders, in accordance with Section 10.20 and 7.10, a
resolution of the board of directors having been duly adopted and submitted
to the shareholders. A consent in writing has been signed by all the
shareholders entitled to vote on this amendment.
(Note 5)
3. TEXT OF AMENDMENT:
a. When amendment effects a name change, insert the new corporate name
below. Use Page 2 for all other amendments.
Article I: The name of the corporation is:
Successories, Inc.
-------------------------------------------------------------------------------
(NEW NAME)
All changes other than name, include on Page 2
(Over)
EXPEDITED
AUG 2 1996
SECRETARY OF STATE
<PAGE> 3
4. The manner, if not set forth in Article 3b, in which any exchange,
reclassification or cancellation of issued shares, or a reduction of the
number of authorized shares of any class below the number of issued
shares of that class, provided for or effected by this amendment, is as
follows: (if not applicable, insert "No change")
No change
5. (a) The manner, if not set forth in Article 3b, in which said amendment
effects a change in the amount of paid-in capital (Paid-in capital
replaces the terms Stated Capital and Paid-in Surplus and is equal to the
total of these accounts) is as follows: (if not applicable, insert "No
change")
No change
(b) The amount of paid-in capital (Paid-in Capital replaces the terms
Stated Capital and Paid-in Surplus and is equal to the total of these
accounts) as changed by this amendment is as follows: (If not applicable,
insert "No change")
No change
Before Amendment After Amendment
Paid-in Capital $ $
------------- -------------
(COMPLETE EITHER ITEM 6 OR 7 BELOW. ALL SIGNATURES MUST BE IN BLACK INK.)
6. The undersigned corporation has caused this statement to be signed by its
duly authorized officers, each of whom affirms, under penalties of
perjury, that the facts stated herein are true.
<TABLE>
<S> <C>
Dated July 31, CELEX Group, Inc.
---------------------------------------------,1996 -------------------------------------------
(Exact Name of Corporation at date of
execution)
attested by /s/ Timothy C. Dillon by /s/ James M. Beltrame
--------------------------------------------- -------------------------------------------
(Signature of Secretary or Assistant Secretary) (Signature of President or Vice President)
Timothy C. Dillon, Secretary James M. Beltrame, President and COO
---------------------------------------------- -------------------------------------------
(Type or Print Name and Title) (Type or Print Name and Title)
</TABLE>
7. If amendment is authorized pursuant to Section 10.10 by the
incorporators, the incorporators must sign below, and type or print name
and title.
OR
If amendment is authorized by the directors pursuant to Section 10.10 and
there are no officers, then a majority of the directors or such directors
as may be designated by the board, must sign below, and type or print
name and title.
The undersigned affirms, under the penalties of perjury, that the facts
stated herein are true.
/s/ Carol S. McMahan
Carroll, Hartigan, Farmer,
Carney, McGillen, Ltd.
30 North LaSalle
Suite 1200
Chicago, IL 60602
Dated , 19
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