<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Commission
Only(as permitted by Rule 14a-6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SUCCESSORIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
SUCCESSORIES, INC.
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 22, 1997
To the Shareholders of Successories, Inc.
Notice is hereby given that the annual meeting of shareholders of
Successories, Inc., an Illinois corporation (the "Company"), will be held at The
Metropolitan Club, 233 S. Wacker Drive, 66th Floor, Chicago, Illinois 60606 on
Tuesday, July 22, 1997 at 9:30 A.M., Central Daylight Savings Time, for the
following purposes:
1. To elect two (2) Class II directors for the terms specified in the proxy
statement or until their successors are elected and qualified;
2. To approve amendments to the Company's Stock Option Plan;
3. To ratify the appointment of Arthur Andersen as independent accountants
for the fiscal year ending January 31, 1998; and
4. To transact such other business as may properly come before the meeting.
Shareholders of record as of the close of business on June 2, 1997 will be
entitled to vote at the annual meeting. Shares should be represented as fully as
possible, since a majority is required to constitute a quorum.
Please mark, sign, date and mail the accompanying proxy in the enclosed
self-addressed, postage paid envelope, whether or not you expect to attend the
meeting in person. You may revoke your proxy at the meeting should you be
present and desire to vote your shares in person, and you may revoke your proxy
for any reason at any time prior to the voting thereof, either by written
revocation prior to the meeting or by appearing at the meeting and voting in
person. Your cooperation is respectfully solicited.
By Order of the Board of Directors,
TIMOTHY C. DILLON
Secretary
Lombard, Illinois
June 2, 1997
<PAGE> 3
SUCCESSORIES, INC.
919 SPRINGER DRIVE
LOMBARD, ILLINOIS 60148
(630) 953-8440
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 22, 1997
INTRODUCTION
The enclosed proxy is solicited on behalf of the Board of Directors of
Successories, Inc. (the "Company") in connection with the annual meeting of
shareholders to be held on July 22, 1997 at 9:30 A.M., Central Daylight Savings
Time, and any adjournment thereof ("Annual Meeting"), at The Metropolitan Club,
233 S. Wacker Drive, 66th Floor, Chicago, Illinois 60606.
The cost of proxy solicitation will be borne by the Company. In addition to
the solicitation of proxies by the use of the mails, certain officers and other
regular employees of the Company may devote part of their time (but will not be
specifically compensated therefor) to solicitation by telegraph, telephone or in
person. Proxies may be revoked at any time prior to voting. Revocation may be
done prior to the meeting by written revocation sent to the Secretary of the
Company, Successories, Inc., 919 Springer Drive, Lombard, Illinois 60148; or it
may be done personally upon oral or written request at the Annual Meeting.
This proxy statement was first mailed or delivered to shareholders on or
about June 2, 1997.
RECORD DATE; VOTING SECURITIES OUTSTANDING
The close of business on June 2, 1997 is the record date for determining
the holders of common stock, $.01 par value ("Common Stock"), of the Company
entitled to notice of and to vote at the Annual Meeting.
As of May 27, 1997, the Company had outstanding voting securities
consisting of 5,774,843 shares of Common Stock. Presence in person or by proxy
of holders of a majority of the outstanding shares of Common Stock will
constitute a quorum at the Annual Meeting. A broker non-vote (where a broker
submits a proxy but does not have authority to vote a customer's shares on one
or more matters) is not considered entitled to vote and is not counted in
determining voting results. If a shareholder, present in person or by proxy,
abstains on any matter, that shareholder's shares are treated as present and
entitled to vote. Thus, an abstention from voting on a matter has the same legal
effect as vote "AGAINST" the matter.
SECURITY OWNERSHIP
The following table sets forth, with respect to the Company's Common Stock,
all persons known to be the beneficial owner of more than 5% of the Company's
Common Stock as of May 27, 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES
AND NATURE OF
BENEFICIAL
BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS
---------------- ---------------- ----------------
<S> <C> <C>
Arnold M. Anderson.............................. 1,091,630(2) 18.0%
State of Wisconsin Investment Board............. 427,900(3) 7.4%
</TABLE>
- ---------------
(1) Nature of beneficial ownership is direct unless otherwise indicated by
footnote. Beneficial ownership as shown in the table arises from sole voting
and investment power unless otherwise indicated by footnote.
(2) Includes 293,000 shares subject to immediately exercisable options and
warrants; 5,290 shares held by Mary Margaret Anderson (his wife); 275,000
shares held in trust by Mary Margaret Anderson as trustee, as to which Mr.
Anderson has sole voting and investment power; 2,638 shares held in trust by
1
<PAGE> 4
Mr. Anderson as trustee, as to which Mr. Anderson has sole voting and
investment power; and 1,000 shares held in the name of his son.
(3) The address of the State of Wisconsin Investment Board is Post Office Box
7842, Madison, Wisconsin 53707.
The following table sets forth, as of May 27, 1997, with respect to the
shares of Common Stock beneficially owned by: (i) each director and nominee;
(ii) the Chief Executive Officer; (iii) the other most highly compensated
executive officers; and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES AND
NATURE OF
BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
---------------- ------------ ---------
<S> <C> <C>
Arnold M. Anderson.................................. 1,091,620(2) 18.0%
James M. Beltrame................................... 166,751(3) 2.8%
Seamas T. Coyle..................................... 11,630(4) *
Timothy C. Dillon................................... 19,213(5) *
John F. Halpin...................................... 0
M. Andrew King...................................... 7,064(6) *
David Houston....................................... 86,758 1.5%
Cheryl Lawton Griffith.............................. 0
C. Joseph LaBonte................................... 58,246(7) 1.0%
Steven B. Larrick................................... 42,500(8) *
Raymond A. Mackie................................... 16,427(9) *
Michael H. McKee.................................... 61,592(10) 1.1%
Mervyn C. Phillips, Jr.............................. 88,511(11) 1.5%
Guy E. Snyder....................................... 8,900(12) *
Jill Werner......................................... 17,230(13) *
All of the directors and executive officers as a
group (15 persons)................................ 1,676,442(14) 26.4%
</TABLE>
- ---------------
* Percentage represents less than 1% of the total shares of Common Stock
outstanding as of May 27, 1997.
(1) Nature of beneficial ownership is direct unless otherwise indicated by
footnote. Beneficial ownership as shown in the table arises from sole
voting and investment power unless otherwise indicated by footnote.
(2) See note 2 above regarding nature of stock ownership.
(3) Includes 150,000 shares subject to immediately exercisable options and
warrants. Excludes 100 shares held by Rose Beltrame (his mother) as to
which Mr. Beltrame shares joint investment control but to which he
disclaims beneficial ownership.
(4) Includes 315 shares held by NBD Securities, Inc., custodian for Seamas T.
Coyle Individual Retirement Account; 315 shares held by NBD Securities,
Inc., Custodian for Kathleen Coyle (his wife) Individual Retirement
Account; and 10,500 shares subject to immediately exercisable options and
warrants.
(5) Includes 6,713 shares held by Timothy C. Dillon and Julie L. Dillon (his
wife); and 12,500 shares subject to immediately exercisable options.
(6) Includes 564 shares held by M. Andrew King and Theresa King (his wife) as
joint tenants; and 6,500 shares subject to immediately exercisable options.
(7) Includes 14,000 shares subject to immediately exercisable options and
warrants.
(8) Includes 13,000 shares held by Steven B. Larrick and Dorothy F. Larrick
(his wife) as joint tenants; 6,000 shares in aggregate held in trust for
the benefit of each of Cathy, Natalie, Elizabeth and James Larrick (his
children); and 10,500 shares subject to immediately exercisable options and
warrants.
2
<PAGE> 5
(9) Includes 12,000 shares subject to immediately exercisable options.
(10) Includes 8,844 shares held by Michael H. McKee; 25,918 shares held by
Michael McKee and Cassandra McKee (his wife) as joint tenants; 330 shares
held by Cassandra McKee; and 26,500 shares subject to immediately
exercisable options.
(11) Includes 22,500 shares held by NFSC-FMT Co., custodian for Mervyn C.
Phillips, Jr. Individual Retirement Account; 12,000 shares held by Five M's
Ltd. Money Purchase Pension Plan, of which Mr. Phillips is trustee; 35,011
shares held by Mr. Phillips as trustee of the Mervyn C. Phillips Revocable
Trust; and 9,000 shares subject to immediately exercisable options.
Excludes 5,000 shares held by Mr. Phillips as trustee under the will of
M.C. Phillips, III for the benefit of a family trust to which Mr. Phillips
has voting power but to which he disclaims beneficial ownership.
(12) Includes 600 shares held by Linda G. Snyder (his wife); and 7,500 shares
subject to immediately exercisable options and warrants.
(13) Includes 7,500 shares subject to immediately exercisable options; and 4,500
shares subject to immediately exercisable options held by Kenneth Werner
(her husband).
(14) Includes 564,000 shares subject to options and warrants exercisable within
sixty days; and 63,087 shares as to which voting and/or investment powers
are shared.
ITEM 1
ELECTION OF DIRECTORS
It is intended that the shares represented by the enclosed proxy will be
voted, unless votes are withheld in accordance with the instructions contained
in the proxy, for the election of the two (2) nominees for Class II Directors
named below. In the event that any nominee for Director should become
unavailable, which is not anticipated, the Board of Directors in its discretion
may designate substitute nominees, in which event such shares will be voted for
such substitute nominees. Provided a quorum is present, the affirmative vote by
the holders of a majority of the shares of Common Stock represented at the
Annual Meeting in person or by proxy is required for the election of each
nominee.
The number of Class II Directors is presently fixed at three members. One
Class II Director has recently resigned. The Board is presently intending to
fill the vacancy created by such resignation, but has not identified any
candidate to date. Any person appointed by the Board to fill such vacancy will
stand for election at the 1998 Annual Meeting of Shareholders, or any special
meeting of shareholders if earlier, in accordance with the Company's By-laws.
The identity of each such Director and his term is indicated below.
CLASS II
(TERM EXPIRING IN YEAR 2000)
C. Joseph LaBonte
Mervyn C. Phillips, Jr.
Directors hold office until the Annual Meeting in the fiscal year in which
their terms expire and until their respective successors have been elected and
qualified.
3
<PAGE> 6
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH OF
THE NOMINEES NAMED BELOW.
INFORMATION CONCERNING NOMINEES AND CONTINUING DIRECTORS:
<TABLE>
<CAPTION>
TERM DIRECTOR
NOMINEES FOR DIRECTOR: AGE EXPIRES SINCE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
- ---------------------- --- ------- -------- ----------------------------------------
<S> <C> <C> <C> <C>
C. Joseph LaBonte 56 2000 1994 President, Chief Executive Officer and
Director of Jenny Craig International since
April 1994. From 1990 to 1994, Mr. LaBonte
was Chairman of The Vantage Group, an
investment and financial advisory firm;
prior thereto, President, Chief Operating
Officer and a Director of Reebok
International, Ltd., a company specializing
in the designing, marketing and
distribution of footwear and related
apparel. Mr. LaBonte is also a director of
Consortium 2000 and Hampton International
Products.
Mervyn C. Phillips, Jr.(2)(3) 62 2000 1990 Principal of Primus Development Group Ltd.,
Oak Brook, Illinois, a privately held
investment company.
CONTINUING DIRECTORS:
- --------------------
Arnold M. Anderson(1) 50 1998 1990 Chairman of the Board and Director for the
Company since May 1997; prior thereto,
Chief Executive Officer, Chairman of the
Board and Director for the Company since
June 1995; prior thereto, Chief Executive
Officer, President (Primus) since October
1990; prior thereto, Chairman and President
of the predecessors to the Company's
subsidiaries.
James M. Beltrame(1) 52 1998 1995 Chief Executive Officer and President for
the Company since May 1997; prior thereto,
Chief Operating Officer and President for
the Company since June 1995, Chief
Financial Officer and Director for the
Company since March 1995; prior thereto,
Chief Financial Officer for RTO Enterprises
since 1992; prior thereto, Executive Vice
President, Chief Financial Officer and
director for Restaurant Associates since
1984.
Seamas T. Coyle(1)(2) 46 1999 1995 Partner in accounting firm of Coyle,
Fanning & Company and its predecessors
since 1980; prior thereto, a Certified
Public Accountant since 1974. Coyle,
Fanning & Company performs tax services for
the Company.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
TERM DIRECTOR
NOMINEES FOR DIRECTOR: AGE EXPIRES SINCE PRINCIPAL OCCUPATION FOR LAST FIVE YEARS
---------------------- --- ------- -------- ----------------------------------------
<S> <C> <C> <C> <C>
Timothy C. Dillon 34 1999 1995 Senior Vice President of the Company since
May 1997; prior thereto, Vice President of
the Company since April 1993; prior
thereto, President of First American
Franchise Corporation (the franchising
subsidiary of Beauty Express, Inc.); prior
thereto attorney for Francorp, Inc. (a
franchise development consulting firm)
since 1989.
Michael H. McKee 42 1998 1990 Senior Vice President, Creative Director
and Director for the Company and its
predecessor since October 1990; prior
thereto, Creative Director of Product
Development and Advertising for the
predecessors to the Company's subsidiaries.
Guy E. Snyder(1)(2) 43 1999 1995 Partner in the law firm of Vedder, Price,
Kaufman & Kammholz since 1996, a law firm
that serves as counsel to the Company;
prior thereto, a partner in the law firm of
Keck, Mahin & Cate.
Steven B. Larrick(3) 50 1999 1996 Chairman and Chief Executive Officer of
Chernin's Shoes, Inc. since 1993; prior
thereto served in various management level
positions with Chernin's Shoes, Inc. since
1973.
</TABLE>
- ---------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation and Stock Option Committee.
The Board of Directors held six meetings during the fiscal year ended
February 1, 1997. All Directors attended at least 75% of the aggregate of the
total number of meetings of the Board of Directors and the total number of
meetings held by each committee of the Board on which such Directors served. In
addition to the Executive Committee, the Board of Directors of the Company has a
standing Audit Committee and a standing Compensation and Stock Option Committee.
The Audit Committee held three meetings during the fiscal year ended
February 1, 1997. This Committee is responsible for reviewing with the Company's
financial management and its independent auditors the proposed audit program for
each fiscal year, the results of the audits and the adequacy of the Company's
systems of internal accounting control. The Committee recommends to the Board of
Directors the appointment of the independent auditors for each fiscal year.
Directors Coyle, Phillips and Snyder are members of this Committee.
The Compensation and Stock Option Committee held three meetings during the
fiscal year ended February 1, 1997. This Committee is responsible for annually
reviewing the salaries and bonuses of all executive officers and administering
the Company's Stock Option Plan. Directors Phillips and Larrick are members of
this Committee.
5
<PAGE> 8
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT
SUMMARY COMPENSATION TABLE
The Summary Compensation Table below includes, for the fiscal year ended
February 1, 1997, for the nine-month transition period ended February 3, 1996,
and for each of the fiscal years ended April 30, 1995 and 1994, individual
compensation for services to the Company and its subsidiaries of those persons
who were, at February 1, 1997: (i) the Chief Executive Officer; and (ii) the
other most highly compensated executive officers of the Company (collectively,
the "Named Officers").
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------- ------------
OTHER ANNUAL SECURITIES
SALARY BONUS COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITIONS YEAR ($) ($) ($) OPTIONS(#) COMPENSATION
---------------------------- ---- ------- ------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Arnold M. Anderson 1997 193,827 50,000 0 110,000(1) 0
Chairman of the Board 1996(2) 131,250 0 0 0 0
and Director 1995 175,000 0 0 0 0
1994 164,654 0 8,599(3) 0 0
James M. Beltrame 1997 166,827 50,000 0 150,000(4) 0
President, Chief Executive 1996(2) 110,885 0 0 70,000(5) 0
Officer and Director 1995(6) 12,981 0 0 0 0
Michael H. McKee 1997 141,827 12,500 0 12,500(7) 0
Senior Vice President, 1996(2) 93,750 0 0 0 0
Creative Director and Director 1995 100,000 0 0 0 0
1994 98,675 0 3,600(3) 0 0
Raymond A. Mackie 1997 112,288 20,000 0 20,000(7) 0
Senior Vice President of 1996(2) 75,000 0 0 0 0
Manufacturing Operations 1995(8) 5,769 0 0 0 0
M. Andrew King 1997 87,692 12,500 0 12,500(7) 0
Vice President and 1996(2) 41,827 0 0 0 0
Chief Financial Officer 1995 0 0 0 0 0
</TABLE>
- ---------------
(1) Includes options to purchase 80,000 shares of Common Stock granted February
6, 1996 pursuant to the Company's Stock Option Plan; such options vest and
become exercisable in five cumulative annual increments of 20% of the
initial grant, commencing February 6, 1997, and expire on February 6, 2006.
Includes options to purchase 20,000 shares of Common Stock granted February
6, 1996 separate and aside from the Company's Stock Option Plan; such
options are immediately exercisable, and expire on February 6, 2006.
Includes options to purchase 10,000 shares of Common Stock granted November
11, 1996 separate and aside from the Company's Stock Option Plan; such
options vest and become exercisable in five cumulative annual increments of
20% of the initial grant, commencing November 11, 1997, and expire on
November 10, 2001.
(2) Represents compensation for the nine-month transition period beginning May
1, 1995 and ending on February 3, 1996.
(3) Represents a cash car allowance.
(4) Includes options to purchase 80,000 shares of Common Stock granted February
6, 1996 pursuant to the Company's Stock Option Plan; such options vest and
become exercisable in five cumulative annual increments of 20% of the
initial grant, commencing February 6, 1997, and expire on February 6, 2006.
Includes options to purchase 20,000 shares of Common Stock granted February
6, 1996 separate and aside from the Company's Stock Option Plan; such
options are immediately exercisable, and expire on February 6, 2006.
Includes options to purchase 40,000 shares of Common Stock granted June 17,
1996 separate and aside from the Company's Stock Option Plan; such options
vest and become exercisable in five cumulative annual increments of 20% of
the initial grant, commencing June 17, 1997, and expire on June 17, 2006.
Includes options to purchase 10,000 shares of Common Stock granted November
11, 1996
6
<PAGE> 9
separate and aside from the Company's Stock Option Plan; such options vest
and become exercisable in five cumulative annual increments of 20% of the
initial grant, and expire on November 10, 2001.
(5) Represents options granted pursuant to the Company's Stock Option Plan. Such
options vest and become exercisable in five cumulative annual increments of
20% of the initial grant, commencing June 8, 1996.
(6) For the period since Mr. Beltrame became employed by the Company on March
14, 1995.
(7) Represents options granted June 17, 1996 pursuant to the Company's Stock
Option Plan; such options vest and become exercisable in five cumulative
annual increments of 20% of the initial grant, commencing June 17, 1997, and
expire on June 17, 2006.
(8) For the period since Mr. Mackie became employed by the Company on April 10,
1995.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED RATES OF STOCK
NUMBER OF PERCENT OF TOTAL PRICE APPRECIATION FOR
SECURITIES OPTIONS GRANTED EXERCISE OR OPTION TERM ($)
UNDERLYING TO EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
OPTIONS FISCAL YEAR (%) ($/SH.) DATE 5% 10%
---------- ---------------- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Arnold M. Anderson... 100,000 19.4% $7.625 02/06/06 $479,536 $1,215,196
10,000 1.9 6.875 11/10/01 18,996 41,972
James. M. Beltrame... 100,000 19.4 7.625 02/06/06 479,536 1,215,196
40,000 7.8 6.125 06/17/06 154,081 390,457
10,000 1.9 6.875 11/10/01 18,996 41,972
Michael H. McKee..... 12,500 2.4 6.125 06/17/06 48,150 122,017
Raymond A. Mackie.... 20,000 3.9 6.125 06/17/06 77,040 195,228
M. Andrew King....... 12,500 2.4 6.125 06/17/06 48,150 122,017
</TABLE>
BOARD COMPENSATION AND STOCK OPTION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Company's compensation philosophy is comprised of several elements
designed to attract and retain key personnel, reward outstanding performance and
link executive pay to long-term Company performance. These elements consist of a
base salary, annual bonus compensation relating pay to performance and long-term
incentive awards designed to align executive interests with shareholder
interests.
BASE SALARY
The base salary of Arnold M. Anderson was established pursuant to an
employment agreement dated March 1, 1996 whereby Mr. Anderson receives a minimum
base salary of $200,000 per year annually for a period of three years and the
opportunity to earn a bonus each year.
The base salary of James M. Beltrame was established pursuant to an
employment agreement dated June 1, 1996 whereby Mr. Beltrame receives a minimum
base salary of $175,000 per year annually for a period of three years and the
opportunity to earn a bonus each year.
The base salaries of the Company's other executive officers are determined
by Messrs. Anderson and Beltrame with the approval of the Compensation and Stock
Option Committee. Individual salaries are determined based on historical salary
levels within the Company or the salary level of the officer at the time he
commenced employment with the Company, and salary levels generally correspond to
the level of responsibility of each executive. Increases are generally
determined with regard to available earnings and individual performance.
7
<PAGE> 10
BONUS COMPENSATION
Annual bonuses for executive officers of the Company, excluding Messrs.
Anderson and Beltrame, are determined by the Compensation and Stock Option
Committee based on the recommendation of Messrs. Anderson and Beltrame and are
awarded on a discretionary basis by the Compensation and Stock Option Committee.
For the fiscal year ended February 1, 1997, the Compensation and Stock Option
Committee considered the following criteria in awarding bonuses to those
executives whose performance during the fiscal year impacted favorably on the
results of the Company as a whole: corporate revenues, corporate net income and
general corporate performance relative to market conditions in the Company's
industry. The Company intends to award certain discretionary bonuses for the
fiscal year ended February 1, 1997 to certain executive officers. The amount of
such awards has not yet been determined.
LONG-TERM INCENTIVE
The Company's Stock Option Plan (the "Option Plan") authorizes the
Compensation and Stock Option Committee to grant the employees of the Company
and its subsidiaries incentive or non-qualified stock options. The Compensation
and Stock Option Committee determines the prices and terms at which such options
may be granted. The purpose of the Option Plan is to encourage stock ownership
by the persons instrumental to the success of the Company, in order to give them
a greater personal interest in the Company's affairs.
On June 8, 1995, the Company granted Mr. Beltrame options to purchase an
aggregate of 70,000 shares of the Company's Common Stock at an exercise price of
$6.875 per share pursuant to the Option Plan. Pursuant to the Non-Qualified
Stock Option Agreements executed by Mr. Beltrame, the exercise of 40,000 of such
options were subject to the attainment of certain revenue and profitability
goals agreed to by Mr. Beltrame and the Board of Directors. Such revenue and
profitability goals were attained and the options expire on June 8, 2005.
On February 6, 1996 Messrs. Anderson and Beltrame were granted options to
purchase 80,000 shares of Common Stock each pursuant to the Company's Option
Plan at an exercise price of $7.625 per share; such options vest and become
exercisable in five cumulative annual increments of 20% of the initial grant,
commencing February 6, 1997, and expire on February 6, 2006. On November 11,
1996 Messrs. Anderson and Beltrame were granted options to purchase 10,000
shares of Common Stock each separate and aside from the Company's Option Plan;
such options vest and become exercisable in five cumulative annual increments of
20% of the initial grant, commencing November 11, 1997, and expire on November
10, 2001. On June 17, 1996 Mr. Beltrame was also granted options to purchase
40,000 shares of Common Stock separate and aside from the Company's Option Plan;
such options vest and become exercisable in five cumulative annual increments of
20% of the initial grant commencing June 17, 1997 and expire on June 17, 2006.
In addition, on February 6, 1996 Messrs. Anderson and Beltrame were granted
options to purchase 20,000 shares of Common Stock each at an exercise price of
$7.625 per share pursuant to Common Stock Option Agreements dated February 6,
1996 separate and aside from the Company's Option Plan; such options vested and
became exercisable on the date of the grant and expire on February 6, 2006.
On June 17, 1996, the Company granted options to purchase an aggregate of
91,500 shares to executive officers other than Mr. Beltrame at an exercise price
of $6.125 per share. Such options are exercisable in cumulative annual
increments of 20% of the original grant beginning June 17, 1997, expiring on
June 17, 2006.
Non-qualified options to purchase 4,000 shares of Common Stock are granted
automatically under the Option Plan to each person serving as a non-employee
director immediately following each Annual Meeting of Shareholders. The annual
grant of nonqualified options to non-employee directors is in lieu of cash
meeting fees paid by the Company to such directors, thereby fully tying such
directors' compensation to the performance of the Company's Common Stock.
Steven B. Larrick
Mervyn C. Phillips, Jr.
8
<PAGE> 11
PERFORMANCE GRAPH
The following graph sets forth a comparison of cumulative total returns
for: (I) the Company's Common Stock (which is traded on the Nasdaq Stock
Market(SM)); (ii) the CRSP Total Return Index for the Nasdaq Stock Market(SM);
and (iii) the CRSP Total Return Index for Nasdaq Retail Trade Stocks.
On December 1, 1993, the Company's Common Stock began trading on the Nasdaq
Stock Market(SM) under the symbol CLXG. On July 30, 1996, the Company's
Shareholders approved a change in the Company's name to Successories, Inc. On
September 16, 1996, the Company's stock began trading on the Nasdaq Stock
Market(SM) under the symbol SCES. All returns were calculated assuming dividend
reinvestment.
SUCCESSORIES, INC.
COMPARATIVE RETURNS
<TABLE>
<CAPTION>
THE NASDAQ RETAIL
MEASUREMENT PERIOD THE NASDAQ STOCK TRADE STOCKS
(FISCAL YEAR COVERED) SUCCESSORIES, INC. MARKET (U.S.) INDEX
<S> <C> <C> <C>
12/01/93 100.0 100.0 100.0
04/29/94 151.9 96.0 92.8
04/28/95 59.2 111.6 90.3
02/03/96 60.2 142.6 100.3
02/01/97 55.2 184.9 123.1
</TABLE>
Assumes $100 invested on December 1, 1993 in Successories, Inc. common
stock, the CRSP Total Return Index for the Nasdaq Stock Market(SM) and the CRSP
Total Return Index for Nasdaq Retail Trade Stocks.
COMPENSATION AND STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On April 6, 1993, the Company established a Compensation Committee of the
Board of Directors for purposes of making certain executive compensation
decisions. On May 21, 1996, the Compensation and Stock Option Committee was
combined with the Compensation Committee to form the Compensation and Stock
Option Committee. Messrs. Larrick and Phillips are members of the Compensation
and Stock Option Committee. At the request of the Compensation and Stock Option
Committee, Messrs. Anderson and Beltrame have and will confer with the Committee
to make recommendations for the salaries and bonuses of the executive officers.
9
<PAGE> 12
DIRECTOR COMPENSATION
Each non-employee director shall receive cash compensation in the amount of
$1,000 for each meeting attended. In addition, each non-employee director
receives an annual grant to acquire 4,000 shares of Company common stock at the
closing bid price on the Nasdaq Stock Market pursuant to the Company's Option
Plan. Such options vest immediately upon grant. In addition, non-employee
directors receive $500 plus travel expenses for attending each Committee
meeting.
EMPLOYMENT AGREEMENTS
In March 1996, the Company entered into an employment agreement with Arnold
M. Anderson which provides that he will receive a minimum base salary of
$200,000 per year annually for three years plus the opportunity to earn a bonus
each year. In addition, the employment agreement provides that commencing in the
fiscal year ended February 1, 1997, Mr. Anderson and the Company's Board of
Directors shall agree each fiscal year upon the specific performance standards
and criteria that will be used to determine how the bonus is actually earned and
shall agree upon the amount of the actual bonus opportunity for such fiscal
year. Pursuant to the agreed upon formula, Mr. Anderson received a bonus of
$50,000 for the fiscal year ended February 1, 1997.
In June 1996, the Company entered into an employment agreement with James
M. Beltrame which provides that he will receive a minimum base salary of
$175,000 per year annually for three years plus the opportunity to earn a bonus
each year. In addition, the employment agreement provides that commencing in the
fiscal year ended February 1, 1997, Mr. Beltrame and the Company's Board of
Directors shall agree each fiscal year upon the specific performance standards
and criteria that will be used to determine how the bonus is actually earned and
shall agree upon the amount of the actual bonus opportunity for such fiscal
year. Pursuant to the agreed upon formula, Mr. Beltrame received a bonus of
$50,000 for the fiscal year ended February 1, 1997.
In June 1996, the Company entered into an employment agreement with Michael
H. McKee, which provides that he will receive a minimum base salary of $150,000
per year annually for three years plus the opportunity to earn a bonus each
year. In addition, the employment agreement provides that commencing in the
fiscal year ended February 1, 1997, Mr. McKee and the Company's Board of
Directors shall agree each fiscal year upon the specific performance standards
and criteria that will be used to determine how the bonus is actually earned and
shall agree upon the amount of the actual bonus opportunity for such fiscal
year. Pursuant to the agreed upon formula, Mr. McKee received a bonus of $12,500
for the fiscal year ended February 1, 1997.
CERTAIN TRANSACTIONS
All transactions between the Company and its officers, directors, and
principal shareholders are required to be approved by a majority of the
independent and disinterested non-employee directors and must be on terms no
less favorable to the Company than could be obtained from unaffiliated third
parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors,
its executive officers, and any persons holding more than 10% of the Company's
Common Stock are required to report their initial ownership of the Company's
Common Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been established,
and the Company is required to disclose in this proxy statement any failure to
file by the applicable due dates during the fiscal year ended February 1, 1997.
All of these filing requirements were satisfied, except that Arnold M.
Anderson, Chairman of the Board and Director of the Company, filed one late
report covering three transactions, and Jill Werner, an officer of the Company,
filed one late report covering her initial ownership.
10
<PAGE> 13
ITEM 2
PROPOSED AMENDMENTS TO THE SUCCESSORIES, INC. STOCK OPTION PLAN
There will be presented at the Annual Meeting a proposal to amend the
Company's Stock Option Plan (the "Option Plan"). As of May 27, 1997, 84.9% of
the shares of Common Stock authorized for issuance under the Option Plan have
either been reserved for issuance thereunder or have been issued to participants
pursuant to the exercise of options.
On May 20, 1997, the Board of Directors approved further amendments to the
Option Plan, subject to shareholder approval. The amendments to the Option Plan
would (i) increase the number of shares of Common Stock that may be issued
thereunder from 1,450,000 to 1,700,000; (ii) provide for a one-time grant of
non-qualified options to purchase 10,000 shares of Common Stock to each
non-employee director serving on the Board continuously from January 1, 1996
through the date of the Annual Meeting; and (iii) amend the stock option
agreements with respect to options granted two non-employee director under the
Option Plan on December 14, 1994, to reduce the exercise price from $14.66 to
$5.75 per share. The purpose of the proposed amendments to the Option Plan is to
enable the Company to continue to provide incentives to its key employees and
non-employee directors through stock ownership. Further, in the case of the
non-employee directors, the one-time grant of options and the repricing of
outstanding options will provide additional incentive to the non-employee
directors to work to improve the performance of the Company's Common Stock.
These amendments are subject to approval by the shareholders of the Company at
the Annual Meeting.
Assuming a quorum is present, an affirmative vote by the holders of a
majority of the outstanding Common Stock present in person or represented by
proxy at the Annual Meeting and entitled to vote thereon is required to amend
the Option Plan.
The following is a summary of the Option Plan as amended to reflect the
matters to be considered at the Annual Meeting.
GENERAL
The purpose of the Option Plan is to provide a means by which key employees
and non-employee directors of the Company and its subsidiaries can acquire and
maintain stock ownership, thereby strengthening their commitment to the success
of the Company and its subsidiaries and their desire to remain employed by the
Company and its subsidiaries. The Option Plan is also intended to attract and
retain non-employee directors and key employees and to provide such directors
and key employees with additional incentive and reward opportunities designed to
encourage them to enhance the profitable growth of the Company and its
subsidiaries.
The Option Plan provides for the granting of awards of incentive stock
options ("ISOs") within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), and non-qualified stock options ("NSOs")
(Awards of ISOs and NSOs are sometimes hereinafter collectively referred to as
"Options"). The Option Plan provides for a one-time automatic grant of a
nonqualified stock option to each non-employee director (the "Automatic Grant")
and annual automatic grants of non-qualified stock options to such directors
(the "Annual Grant"). It is also proposed that each non-employee director
serving continuously on the Board from January 1, 1996 through the date of the
Annual Meeting receive a one time grant of non-qualified options to purchase
10,000 shares at an exercise price of $5.75 per share (the closing bid price of
the Common Stock on May 20, 1997, as reported by the Nasdaq National Market).
The aggregate number of shares that may be granted under the Option Plan as
proposed to be amended is 1,700,000.
THE COMMITTEE
Other than the Automatic Grant provisions, the Option Plan is administered
by a committee (the "Committee") of two or more non-employee directors of the
Company.
Subject to the terms of the Option Plan and except for Automatic and Annual
Grants, the Committee has the discretion to grant Options, to determine the
individual terms of any Option, to amend or cancel any
11
<PAGE> 14
Options (with the consent of the participant), to interpret the Option Plan and
determine all matters relating to the administration of the Option Plan and the
granting of Options.
The Automatic Grant is administered by the Board of Directors solely in
accordance with the provisions of Section 6.4 of the Option Plan.
ELIGIBILITY
Discretionary options may be granted to any employee of the Company or any
of its subsidiaries. As of February 13, 1997, approximately 300 employees were
eligible to participate in the Option Plan. Non-employee directors are eligible
to receive Automatic and Annual Grants.
INCENTIVE STOCK OPTIONS
The Option Plan permits the Committee to grant ISOs to employees of the
Company or any subsidiary of the Company and to determine the terms and
conditions of each grant including, without limitation, the number of shares
subject to each ISO and the Option exercise period. The ISO exercise price may
not be less than the fair market value of the Common Stock on the date of grant
and the exercise period may not exceed 10 years; provided, however, if the
participant is a holder of more than 10% of the Company's outstanding voting
securities, the exercise price may not be less than 110% of such fair market
value on the date of grant and the exercise period may not exceed five years.
NON-QUALIFIED STOCK OPTIONS
Non-employee directors receive an Automatic Grant of a one-time,
non-qualified stock option to purchase 5,000 shares of Stock upon first being
appointed or elected to the Board. On each date of the Annual Meeting of
Shareholders, each non-employee director of the Company whose term of office
will continue after such Annual Meeting of Shareholders shall automatically
receive an Annual Grant of an option to purchase 4,000 shares of Common Stock as
of such date. These Options have an exercise price of one hundred percent (100%)
of the last bid price of the Stock as of the date of grant or the first business
day preceding such date, if no bid price was then reported. Subject to approval
of the stockholders at the Annual Meeting, non-employee directors of the Company
serving continuously from January 1, 1996 through the date of the Annual Meeting
will receive a one-time, non-qualified stock option to purchase ten thousand
(10,000) shares of stock. These options have an exercise price equal to the last
bid price of the Common Stock on May 20, 1997.
If the directorship of a non-employee director is terminated for cause, any
unexercised portion of his Option terminates at that time. If his termination is
caused by his death, any unexercised portion of his Option automatically vests
and may be exercised, in whole or in part, at any time within one year after his
death. If his termination is caused by a disability, then any unexercised Option
may be exercised, in whole or in part, at any time within one year after such
termination; and if such Grantee should die within such one-year period, the
Option may be exercised within 180 days of such death, if such date is longer
than one year from the date of termination of directorship. If his termination
is caused by any reason other than cause, death or disability, any unexercised
Option, to the extent exercisable at the date of such termination, may be
exercised, in whole or in part, at any time within three months after such
termination; and if such Grantee should die within such three-month period, the
Option may be exercised within one year of the date of termination of
directorship. Notwithstanding the foregoing, in no event may an Option be
exercisable beyond the original 10-year term of the Option.
Discretionary Grants. The Option Plan also permits the Committee to grant
NSOs to any employee of the Company and its subsidiaries. The Committee
recommends the grant of NSOs to employees and determines the terms and
conditions of each grant, including the number of shares subject to each NSO,
the Option exercise period and the Option exercise price.
12
<PAGE> 15
PAYMENT OF EXERCISE PRICE
A participant may, at his election, pay the Option exercise price in cash
or shares of Common Stock, including shares of Common Stock which the
participant received upon the exercise of one or more Options or any combination
of both. Except in the case of an Automatic Grant and an Annual Grant, the
Committee may also permit the Option exercise price to be paid by the
participant's delivery of an election directing the Company to withhold shares
of Common Stock from the Common Stock otherwise due upon the exercise of an
Option.
VESTING; TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL
Options granted pursuant to the Automatic Grant and the one-time grant of
options to non-employee directors, subject to shareholder approval at the 1997
Annual Meeting, vest in annual increments of 50% commencing on the first
anniversary of the grant date and those granted pursuant to the Annual Grant
vest fully on the first anniversary of the date of grant. Unless the Committee
determines otherwise, generally, discretionary Options vest in annual increments
of 20% commencing on the first anniversary of the grant date. A participant may
not exercise an Option until the Option has vested.
If a participant's employment is terminated for cause, any unexercised
Option held by the participant terminates upon the termination of employment. If
a participant's employment is terminated by reason of death, any unexercised
Options held by him or her automatically vests and may be exercised, in whole or
in part, at any time within one year after death. If a participant's employment
is terminated on account of disability, any Options held by him or her may be
exercised within one year after termination of employment to the extent
exercisable at the date of such termination, or to such other extent as
determined by the Committee. If a participant's employment is terminated for any
reason other than for cause, death or disability, any unexercised Options held
by him or her may be exercised within three months (or such other period not to
exceed one year as determined by the Committee) after such termination of
employment to the extent exercisable at the date of such termination, or to such
other extent as determined by the Committee. Notwithstanding the foregoing, in
no event may an Option be exercisable beyond the original term of the Option.
After a Change in Control of the Company, all Options granted under the
Plan shall immediately be fully exercisable for a period of six months following
such Change in Control, after which time no further Options may be exercised
under the Plan.
NON-TRANSFERABILITY
Options are not transferable other than by will or the laws of descent and
distribution. During a participant's lifetime, Options held by him or her may be
exercised only by the participant.
AGREEMENT TO SERVE
Each Participant who is granted an Option agrees to remain associated with
or in the employ of the Company or any of its subsidiaries for at least one year
after the date of an Option grant. No obligation of the Company or any of its
subsidiaries as to the length of any participant's association or employment
shall be implied by the terms of the Option Plan, any grant of an Option or any
Option agreement. The Company and its subsidiaries specifically reserve any
right that existed before the effective date of any Option to terminate the
employment or association of any participant.
WITHHOLDING TAX
With respect to any payments made to a participant other than to a
non-employee director pursuant to an Automatic or Annual Grant, the Company has
the right to withhold in cash or shares of Common Stock any taxes required by
law to be withheld because of such payments.
13
<PAGE> 16
AMENDMENT; TERMINATION OF PLAN
The Board of Directors of the Company may from time to time in its
discretion amend or modify the Option Plan without the approval of the
shareholders of the Company, unless such shareholder approval is required under
the listing requirements of any securities exchange on which any of the
Company's equity securities are listed. However, the Board may not, without
shareholder approval, change the aggregate number of shares of stock which may
be sold pursuant to Options granted or change the class of employees eligible to
participate in the Option Plan or adopt any amendment affecting the price at
which Options may be granted under the Option Plan. No change will be permitted
to an Option previously granted which will impair the rights of a participant
without the participant's consent. In addition, the Board cannot amend the
provisions relating to the Automatic or Annual Grant more than once every six
months, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder.
The Option Plan shall terminate on the tenth anniversary of its effective
date or such earlier time as the Board may determine. Any termination, whether
in whole or in part, shall not affect any Option or any Option agreement then
outstanding under the Option Plan.
Notwithstanding the foregoing, subject to the approval of the stockholders
at the Annual Meeting, the exercise price with respect to options for 10,000
shares granted to two non-employee directors, on December 14, 1994, shall be
reduced to $5.75 per share.
AWARDS
Aside from the Automatic Grant and the Annual Grant of non-qualified stock
options to non-employee directors, the grant of Options are within the
discretion of the Committee.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the Federal income tax consequences of the Plan
is only a summary of the general rules applicable to Options granted thereunder.
TAX TREATMENT OF ISOS
Generally, the recipient of ISOs does not realize any taxable income either
at the time of grant or exercise, and the Company (or subsidiary that employs
the participant) is not entitled to a deduction either at the time of grant or
at the time of exercise of ISOs, provided that the participant was an employee
of the Company or of a subsidiary of the Company at all times during the period
beginning on the date of grant and ending three months prior to the date of
exercise and does not sell the shares within two years from the date of grant
and one year from the date the shares are issued to the participant upon
exercise. At the time of ultimate sale following the applicable holding periods,
the participant will realize income taxable at capital gain rates on the excess
of the sale price over the ISO exercise price. If a participant sells such
shares prior to the expiration of the applicable holding periods, the
participant will realize ordinary income at that time in an amount equal to the
lesser of (a) the excess of the fair market value of the shares on the date of
exercise over the ISO exercise price, or (b) the gain realized on the sale (if
the sale is for a loss), and the Company will be entitled to a deduction equal
to the amount of such ordinary income.
An amount with respect to an ISO may be included in a participant's
alternative minimum taxable income at the time of exercise for purposes of
determining whether the alternative minimum tax for non-corporate taxpayers will
be imposed on the participant for a given year.
TAX TREATMENT OF NSOS
Generally, the recipient of NSOs does not realize any taxable income at the
time of grant and the Company is not then entitled to a deduction. Upon exercise
of an NSO, the participant will recognize income at ordinary income tax rates.
The amount of income then recognized by a participant will be the excess of the
fair market value of the shares purchased upon exercise over the exercise price
paid for the shares. The
14
<PAGE> 17
Company will generally be entitled to take a deduction equal to this amount for
the year which ends with or includes the end of the year in which the related
amount is included in income by the participant. In order for the Company to be
able to take a deduction for this amount, however, the amount will have to be
considered "reasonable compensation" and applicable withholding requirements
will have to be met.
A participant's basis in shares acquired upon the exercise of an Option
will be the exercise price of the Option, plus any amount includable in the
participant's gross income upon the exercise of the Option. The gain or loss
realized by the participant upon a subsequent sale or exchange of the Shares
will be a capital gain or loss.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE AMENDMENTS TO THE COMPANY'S OPTION PLAN.
ITEM 3
PROPOSED RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of its Audit Committee, the Board of Directors
retained Arthur Andersen LLP ("Arthur Andersen") to examine the financial
statements of the Company for the fiscal year ended February 1, 1997 and
appointed Arthur Andersen as independent accountants for the Company to audit
its consolidated financial statements for the fiscal year ending January 31,
1998 and to perform audit-related services. The Board has directed that the
appointment of Arthur Andersen be submitted to the shareholders for approval.
If the shareholders do not ratify the selection of Arthur Andersen, the
Audit Committee and the Board of Directors will reconsider the appointment. The
Company has been advised by Arthur Andersen that it expects to have a
representative present at the Annual Meeting and that such representative will
be available to respond to appropriate questions. Such representative will also
have the opportunity to make a statement if he or she desires to do so.
Proxies will be voted for or against approval of this proposed ratification
in accordance with the specifications marked thereon, and will be voted in favor
of approval if no specification is made. Approval requires the favorable vote of
the holders of a majority of the shares of Common Stock represented at the
Annual Meeting in person or by proxy, assuming that a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE APPOINTMENT OF ARTHUR ANDERSEN AS INDEPENDENT ACCOUNTANTS.
ACCOUNTANT INFORMATION
On October 18, 1996, the Company dismissed Price Waterhouse LLP ("Price
Waterhouse") as its independent auditors. Effective October 19, 1996, the
Company engaged Arthur Andersen as its new independent accountants to audit the
Company's financial statements. The Company's Audit Committee recommended and
the Board of Directors approved, effective as of October 18, 1996, the decision
to change independent accountants.
Price Waterhouse reported on the Company's financial statements for the
fiscal year ended April 30, 1995 and the period May 1, 1995 through February 3,
1995. Arthur Andersen reported on the Company's financial statements for the
fiscal year end February 1, 1997.
The report of Price Waterhouse on the Company's financial statements for
the fiscal year ended April 30, 1995 and the period May 1, 1995 through February
3, 1996, contained no adverse opinion or disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope or accounting principles.
In connection with its audits for the fiscal year ended April 30, 1995 and
the period May 1, 1995 through February 3, 1996 and through October 18, 1996 (i)
there have been no disagreements with Price Waterhouse on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or
15
<PAGE> 18
procedure, which disagreements if not resolved to the satisfaction of Price
Waterhouse would have caused them to make reference thereto in their reports on
the financial statements for such periods; and (ii) the Company restated its
fiscal 1995 third quarter operating results due to a misstatement of inventory
values resulting primarily from higher than expected labor and overhead costs
directly related to a fulfillment system failure during the peak selling season.
As a result, certain weaknesses in the Company's internal control and management
information systems were reported on by Price Waterhouse for the fiscal year
ended April 30, 1995. As reported in the Company's Form 10-K for the fiscal year
ended April 30, 1995, the Company has strengthened its internal control
environment by hiring and promoting key employees in the Accounting and MIS
Departments in addition to enhancing policies and procedures in the inventory
management system.
During the fiscal year ended April 30, 1995, the nine month transition
period ended February 3, 1996 and through October 18, 1996, the Company has not
consulted with Arthur Andersen regarding the application of accounting
principles to any transaction or the type of audit opinion that might be
rendered on the Company's financial statements or any matter that was the
subject of a disagreement or reportable event with the former auditor (as
described in Regulation S-K Item 304(a)(1)(v)).
The Company requested that Price Waterhouse furnish it with a letter
addressed to the Commission stating whether it agreed with the above statements.
A copy of such letter, dated October 23, 1996, was furnished to the Company.
OTHER MATTERS
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be included in the Company's proxy
statement and form of proxy relating to, and to be presented at, the Annual
Meeting of Shareholders of the Company to be held in 1998 must be received by
the Company on or before February 3, 1998.
VOTING PROXIES
The enclosed proxy card confers authority to vote, in accordance with the
instructions contained in the proxy, with respect to the election of the
nominees for director specified in this Proxy Statement, the proposed amendments
to the Option Plan and the ratification of Arthur Andersen as the Company's
independent accountants. The proxy will be voted in accordance with the choices
indicated thereon. If no specifications are made, proxies will be voted "FOR ALL
NOMINEES" for director, "FOR" the amendments to the Option Plan and "FOR" the
ratification of Arthur Andersen as independent accountants.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented at
the meeting. Should any other business come before the meeting, it is the
intention of the persons named in the enclosed proxy form to vote in accordance
with their best judgment.
By Order of the Board of Directors,
Timothy C. Dillon
Secretary
Lombard, Illinois
June 2, 1997
16
<PAGE> 19
SUCCESSORIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
<TABLE>
<CAPTION>
WITHHOLD
AUTHORITY
FOR to vote
all for all FOR all nominees, except
nominees nominees nominee(s) written in space below:
<S> <C> <C> <C>
1. The election of C. Joseph LaBonte and Mervyn C. Phillips, Jr., / / / / / /
as Directors:
---------------------------------
Nominee Exceptions
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
2. The amendments to the Company's Stock Option Plan: / / / / / /
3. The proposal to ratify the appointment of Arthur Andersen LLP as / / / / / /
independent accountants for the fiscal year ending January 31, 1998:
4. As such proxies may in their discretion determine upon such other matters / / / / / /
as may properly come before the meeting:
I plan to attend the meeting. / /
</TABLE>
Dated__________________________________________, 1997
____________________________________________________
____________________________________________________
When signing the proxy, please date it and take care to
have the signature conform to the shareholder's name as
it appears on this side of the proxy. If shares are
registered in the names of two or more persons, each person
should sign. Executors, administrators, trustees and
guardians should so indicate when signing.
You are urged to mark, sign and return your proxy without delay in the
return envelope provided for that purpose, which requires no postage if mailed
in the United States.
PROXY
SUCCESSORIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 22, 1997
The undersigned shareholder of Successories, Inc. does hereby
acknowledge receipt of Notice of said Annual Meeting and accompanying Proxy
Statement and constitutes and appoints Arnold M. Anderson, James M. Beltrame
and Timothy C. Dillon, or any of them, with full power of substitution, to
vote all shares of stock of Successories, Inc. which the undersigned is
entitled to vote, as fully as the undersigned could do if personally
present, at the Annual Meeting of Shareholders of said Corporation to be
held on Tuesday, July 22, 1997 at 9:30 A.M., Central Daylight Savings Time, and
at any adjournments thereof, at The Metropolitan Club, 233 S. Wacker Drive, 66th
Floor, Chicago, Illinois 60606.
THIS PROXY STATEMENT SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS
GIVEN AND IN THE ABSENCE OF SUCH INSTRUCTIONS SHALL BE VOTED FOR ALL OF THE
DIRECTOR NOMINEES DESCRIBED IN ITEM (1) AND FOR ITEMS (2) AND (3). IF OTHER
BUSINESS IS PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE
WITH THE BEST JUDGMENT OF THE PROXIES ON THOSE MATTERS.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
