SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OCTOBER 18, 1999
Date of report (Date of earliest event reported)
SUCCESSORIES, INC.
(Exact Name of Registrant as Specified in its Charter)
ILLINOIS 0-22834 36-3760230
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)
2520 DIEHL ROAD
AURORA, ILLINOIS 60504
(Address of Principal Executive Office) (Zip Code)
630/820-7200
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
See attached press release issued by Successories, Inc. on October 18, 1999
(the "Press Release") regarding the election of the chairman of the Board of
Directors and certain other changes in management, as well as the completion of
a $1,525,000 private placement by the Company of preferred stock to a group of
investors. The information set forth in the Press Release is incorporated herein
by reference.
A copy of the Preferred Stock Purchase Agreement between the Company and
the purchasers is attached hereto as Exhibit 99.2.
A copy of Amendment No. 1 to the Registration Rights Agreement between the
Company and the purchasers is attached hereto as Exhibit 99.3.
The Amended and Restated Certificate of Designation of Series A and Series
B Convertible Preferred Stock, as filed with the Secretary of State of the State
of Illinois, is attached hereto as Exhibit 99.4.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
Exhibit No. Description
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99.1 Press Release dated October 18, 1999.
99.2 Preferred Stock Purchase Agreement dated as of October 18, 1999
by and among the Company and the purchasers.
99.3 Amendment No. 1 to the Registration Rights Agreement, dated as of
October 18, 1999, by and among the Company and the purchasers.
99.4 Amended and Restated Certificate of Designation of Series A and
Series B Convertible Preferred Stock.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
SUCCESSORIES, INC.
(Registrant)
Date: 11/3/99 By: /s/ Gary J. Rovansek
----------------------------- -------------------------------
Gary J. Rovansek
President, Chief Executive Officer
and Chief Operating Officer
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INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press Release dated October 18, 1999.
99.2 Preferred Stock Purchase Agreement dated as of October 18, 1999
by and among the Company and the purchasers.
99.3 Amendment No. 1 to the Registration Rights Agreement, dated as of
October 18, 1999, by and among the Company and the purchasers.
99.4 Amended and Restated Certificate of Designation of Series A and
Series B Convertible Preferred Stock.
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EXHIBIT 99.1
AT SUCCESSORIES AT EDELMAN
Steven D. Kuptsis Megan Hayden
(630) 820-7200 200 East Randolph Drive
Chicago, Illinois 60601
(312) 240-3000
FOR IMMEDIATE RELEASE
OCTOBER 18, 1999
SUCCESSORIES ELECTS JACK MILLER CHAIRMAN AND NAMES
GARY ROVANSEK CHIEF EXECUTIVE OFFICER
New Private Placement of Preferred Stock Completed;
Board of Directors Restructured
AURORA, ILLINOIS, OCTOBER 18, 1999 -- SUCCESSORIES (NASDAQ: SCES) announced
today that Jack Miller, a director of the company, has been elected chairman of
the board of directors. In addition, Gary Rovansek, president and chief
operating officer, has been given the additional title of chief executive
officer, and Mac Anderson, former chairman and chief executive officer, has been
named founder and chairman emeritus. Mr. Anderson will remain with the company
to work on creating new product initiatives and he will continue to serve on the
board of directors.
The company also announced today that it has received $1,525,000 in proceeds
from the sale of a new issue of convertible preferred stock to entities owned by
Jack and Harvey Miller and to Gary Rovansek.
In addition to these changes, the board of directors of the company has been
restructured to include four members -- Mr. Miller, Mr. Rovansek, Mr. Anderson,
and R. Scott Morrison Jr., a major shareholder in the company who joined the
board in February of this year. The board expects to add three new members in
the near future who have experience or expertise that would complement the needs
of the business given the company's strategic initiative to focus on direct
marketing and sales to franchisees.
Mr. Miller is serving as president and chief executive officer of Quill
Corporation through December of 1999, when he will retire. Quill is a direct
marketer of office products that Mr. Miller founded and grew to a company with
annual sales in excess of $630 million at the time it was sold to Staples, Inc.
in May 1998. Quill enjoys a great reputation with customers and has world class
marketing skills, particularly in the use of data-based marketing techniques
that allow Quill to target its marketing efforts in a highly effective and
efficient manner.
Mr. Rovansek joined Successories in December 1998, as president and chief
operating officer. He has over 30 years of direct marketing experience. Before
joining the company, he served as president of J. C. Whitney & Co. Inc., a
prominent direct mail company, from 1993 to 1998. Before that, for five years he
held the position of president and chief operating officer for Reliable
Corporation, a leading business-to-business direct mail company specializing in
office products.
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Successories Names New Chairman and CEO
October 18, 1999
Page 2
The convertible preferred stock pays an annual dividend of 8% and is convertible
into the company's common stock at an initial conversion price of $2.3625 per
share. The preferred stock also has certain other rights including pre-emptive
rights, voting rights, a liquidation preference and registration rights, which
are substantially identical to the existing series of preferred stock.
Under the terms of the company's bank credit agreement, the proceeds shall be
applied against the company's revolving credit loan, providing additional
working capital to fuel future growth. Also per the credit agreement, the
limitation on borrowings against eligible inventory, as defined, under the
company's revolving credit loan has been increased from 54% to 57%.
"I welcome this opportunity to serve Successories," commented Mr. Miller. "With
today's events we put the past behind us and begin realizing the company's
potential through focus on its two core channels -- direct marketing and sales
to franchisees. I believe in the future of Successories and in our management
team's ability to lead our future growth. I'm looking forward to sharing in the
upside as we move ahead."
Mr. Rovansek added, "We have delivered improved operating results so far this
year by reducing those expenses no longer necessary as part of the strategic
changes we announced last year. While we still have more work to do on the
transition, especially in the sale of company-owned retail stores and the golf
catalog, we have made tremendous progress in laying the foundation for our
future. Customer response to this year's new product initiatives has been strong
and is a positive sign of things to come."
Mr. Anderson noted, "As a major shareholder for Successories, I applaud these
changes. Jack Miller's track record speaks for itself, and there is no question
in my mind that Gary Rovansek has earned the CEO title. I'll now be doing what I
love most, and that's creating new products to help us grow."
Except for historical information in this release, the matters set forth herein
include forward-looking statements that involve certain risks and uncertainties
that could cause actual results to differ materially from those in the
forward-looking statements. Potential risks and uncertainties include such
factors as the financial strength of the economy, and the retail and catalog
industries in general, the level of consumer spending on motivational-type
products, the competitive pricing environment within the markets that
Successories distributes its products, the level of the company's success in
continuing to control costs and the company's ability to increase certain
margins through economies of scale. An additional risk and uncertainty is the
company's ability to successfully execute the previously announced strategic
changes in its business that include, but are not limited to, the conversion of
company-owned stores to franchise owner-operators, the sale of the company's
golf catalog and the development and introduction of successful new products.
Investors are also directed
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Successories Names New Chairman and CEO
October 18, 1999
Page 3
to consider other risks and uncertainties discussed in documents filed by the
company with the Securities and Exchange Commission.
Successories, Inc. designs, manufactures, and markets a diverse range of
motivational and self-improvement products, many of which are the company's own
proprietary designs, for business and for personal motivation. The company's
products are sold via the millions of catalogs it mails each year and through a
network of over 75 retail franchise and company-owned stores. Additionally, the
company's products may be purchased online via its website at
www.successories.com.
# # #
EXHIBIT 99.2
PREFERRED STOCK PURCHASE AGREEMENT
THIS PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
October 18, 1999 and is among Successories, Inc., an Illinois corporation (the
"Company"), and the purchasers listed on Schedule A attached hereto (each,
individually, a "Purchaser" and collectively, the "Purchasers").
W I T N E S S E T H:
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WHEREAS, each Purchaser desires to purchase from the Company, and the
Company desires to issue and to sell to each Purchaser, the number of shares of
Series B Convertible Preferred Stock, par value $.01 per share, of the Company
("Preferred Stock") indicated opposite such Purchaser's name on Schedule A (such
101,667 shares, collectively, the "Shares"), upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto, intending legally to be bound, hereby
agree as follows:
1. Definitions. Except as otherwise herein expressly provided herein, the
following terms and phrases shall have the meanings set forth below:
"Affiliate" means, as to any Person (a) any corporation, partnership,
limited liability company, joint venture, trust or individual who or which,
directly or indirectly through one or more intermediaries, is controlled by or
under common control with such Person, or which controls directly or indirectly
through one or more intermediaries, such Person; (b) a trust which has as its
principal beneficiaries such Person or any direct or indirect holder of such
Person, or members of the immediate family of such Person or direct or indirect
holder of such Person; and (c) any members of the immediate family of such
Person or a member of the immediate family of any direct or indirect holder of
such Person. For purposes of this definition, (i) no Person, by virtue of his,
her or its direct or indirect ownership of Shares, shall be deemed to be an
Affiliate of another Person; (ii) the terms "control", "controlled" and "common
control with" mean the ability, whether by the direct or indirect ownership of
voting securities or other equity interest, by contract or otherwise, to elect a
majority of the directors of a corporation, to select the managing partner of a
partnership, or otherwise to select a majority of those Persons exercising
governing authority over an entity; and (iii) the term "immediate family" means
spouses, siblings and lineal descendants of a Person.
"Amended Certificate" means the Amended and Restated Certificate of
Designation of the Series A and Series B Convertible Preferred Stock, in the
form attached hereto as Exhibit A, setting forth the preferences and rights of
the Preferred Stock.
"Financial Statements" means the unaudited financial statements of the
Company as of and for the fiscal quarter ended July 31, 1999, which financial
statements are included in the
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Company's Quarterly Report on Form 10-Q as filed by the Company with the
Securities and Exchange Commission.
"Intellectual Property" means (a) all inventions, improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all registered and unregistered
trademarks, service marks, trade dress, logos, tradenames, servicenames, and
corporate names, including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all trade secrets, know-how and
confidential business information, (e) all computer software, (f) all other
proprietary rights, and (g) all copies and tangible embodiments thereof.
"Person" means any individual, partnership, limited liability company,
corporation, trust or other entity.
"SEC Filings" means all reports, proxy statements and schedules
required to be filed since January 1, 1998 by the Company with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as
amended.
"Securities Act" means the Securities Act of 1933, as amended.
2. Sale and Purchase. Subject to the conditions set forth herein, each
Purchaser hereby agrees to purchase from the Company, and the Company hereby
agrees to issue and sell to each Purchaser, the number of Shares indicated on
Schedule A for a purchase price of $15.00 per Share, or an aggregate Purchase
Price from all Purchasers of $1,525,005.00 (the "Purchase Price").
3. The Closing.
(a) The closing of the purchase and sale of the Shares (the
"Closing") shall take place at the offices of Neal, Gerber & Eisenberg, Two
North LaSalle Street, Suite 2200, Chicago, Illinois 60602 simultaneously with
execution of this Agreement. The date of the Closing is sometimes hereinafter
referred to as the "Closing Date."
4. Representations and Warranties of the Company. To induce Purchasers to
enter into this Agreement, the Company represents and warrants to Purchasers as
follows:
(a) Organization; Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois. Except as set forth on Schedule 4(a), attached hereto, the Company is
duly qualified and in good standing as a foreign corporation and is licensed or
admitted to do business as a foreign corporation in each jurisdiction wherein
the character of the properties owned or held under lease by it, or the nature
of the
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business conducted by it, makes such qualification necessary,except where the
failure to so qualify would not reasonably be expected to have a material
adverse effect on (i) the Company's financial condition or results of
operations, or (ii) on the ability of the Company to consummate the transactions
contemplated by this Agreement (a "Material Adverse Effect").
(b) Authority. The Company has all requisite corporate power and
authority to execute, deliver and perform this Agreement, Amendment No. 1 to
Registration Rights Agreement in the form attached hereto as Exhibit B
("Amendment No. 1"), and all other documents contemplated herein (collectively,
the "Transaction Documents") to which the Company is a party and to issue and
sell the Shares to Purchasers. The execution, delivery and performance by the
Company of each of the Transaction Documents, and the issuance of the Shares,
have been duly authorized by all necessary corporate action on the part of the
Company.
(c) Enforceability. Each of the Transaction Documents has been duly
and validly authorized, executed and delivered by the Company and constitutes
the valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except as such enforcement may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, or (ii) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(d) Capitalization. The authorized capital stock of the Company
consists of (i) 20,000,000 shares of common stock, par value $.01 per share, of
which 6,932,160 shares are validly issued and outstanding, fully paid and
nonassessable, and (ii) 1,000,000 shares of preferred stock, of which 503,092
shares have been designated as Series A Convertible Preferred Stock, par value
$.01 per share ("Series A Preferred Stock") all of which are validly issued and
outstanding, fully paid and nonassessable. No other class or series of capital
stock of the Company is authorized, issued or outstanding. When the Amended
Certificate has been filed and is in effect under the laws of the State of
Illinois, and when certificates representing the Shares are issued and delivered
in accordance with this Agreement against receipt of the Purchase Price, the
Shares will be validly issued, fully paid and nonassessable. Except as set forth
on Schedule 4(d), attached hereto, and as described in the footnotes to the
Financial Statements, there are no options, warrants, subscriptions, calls,
preemptive or other rights, convertible securities or other agreements or
commitments obligating the Company to issue, transfer, sell, redeem, repurchase
or otherwise acquire any shares of its capital stock or securities.
(e) Consents and Approvals. Except as set forth on Schedule 4(e),
attached hereto, the execution, delivery and performance by the Company of each
Transaction Document to which the Company is a party do not require any consent,
approval, authorization or other order of, action by, filing with or
notification to any governmental authority or other Person.
(f) No Conflicts. The execution, delivery and performance by the
Company of each of the Transaction Documents to which the Company is a party
will not, with or without
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the giving of notice, the passage of time or both, conflict with, result in a
breach of, or constitute a violation or default or give any third party the
right to terminate or accelerate any obligation under, (i) the Articles of
Incorporation of the Company or the By-Laws of the Company, in each case as
amended to date; (ii) any agreement or other document or instrument to which the
Company is a party or by which it or any of its assets or properties is bound or
affected, the breach, violation or default of which would reasonably be expected
to have a Material Adverse Effect; or (iii) any federal or state law, statute,
rule, regulation, ordinance, writ, order or judgment to which the Company is
subject or by which it or any of its property is bound or affected.
(g) Financial Statements. The Financial Statements have been prepared
in accordance with generally accepted accounting principles, applied on a
consistent basis throughout the periods involved, and fairly present the
financial position, results of operations and changes in financial position of
the Company for the periods indicated. Since the date of the most recent balance
sheet contained in the Financial Statements, there has been (i) no material
change in the manner in which the books and records of the Company have been
maintained or in any accounting practice or procedure, and (ii) no event or
circumstance has occurred that would reasonably be expected to have a Material
Adverse Effect.
(h) Compliance with Laws. The Company has complied, and is in
compliance, with all laws, rules and regulations of federal, state and local
governments (and all agencies thereof), including, without limitation, laws
relating to environmental protection, hazardous waste, health and safety, and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure to so comply, except for any such noncompliance that would not
reasonably be expected to have a Material Adverse Effect.
(i) Taxes. Except as set forth on Schedule 4(i), the Company has
filed, on a timely basis, all required federal, state and local income, sales,
franchise and other tax returns or reports relating to the Company, accurately
reflecting any and all income or other taxes owing to any taxing authority.
There are no tax deficiencies (including penalties and interest) of any kind
assessable against the Company for any taxable periods ending on or before the
date hereof, except for any such deficiency that would not reasonably be
expected to have a Material Adverse Effect.
(j) Absence of Undisclosed Liabilities. Except as set forth on
Schedule 4(j), there are no liabilities, debts, claims or obligations, whether
accrued, absolute, contingent or otherwise, of the Company, except those (i)
reflected or reserved against on the balance sheet included in the Financial
Statements, which reserves have been established on a basis consistent with the
past practices of the Company and in accordance with generally accepted
accounting principles and, to the knowledge of the Company, are sufficient in
all material respects to provide for the liabilities in respect of which they
have been established, or (ii) incurred since July 31, 1999 in the ordinary
course of the business of the Company consistent with the past practice of the
Company, none of which would reasonably be expected to have a Material Adverse
Effect.
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(k) Litigation. Except as disclosed in the SEC Filings, the Company
is not (i) subject to any outstanding injunction, judgment, order, decree,
ruling or charge of any judicial or administrative body or agency, or (ii) a
party or, to the best of the Company's knowledge, is threatened to be made a
party to, any action, suit, proceeding, hearing or investigation of, in, or
before any court, arbitrator or other body or administrative agency of any
federal, state, local, or foreign jurisdiction that would reasonably be expected
to have a Material Adverse Effect.
(l) Licenses; Permits. Except as set forth on Schedule 4(l), the
Company has obtained all material licenses and permits necessary to conduct the
business of the Company, as now conducted and as currently contemplated to be
conducted, and is not in breach or default of any of such licenses and permits.
All of which licenses and permits are in full force and effect and no event has
occurred and is continuing which would allow any such license or permit to be
revoked or terminated.
(m) SEC Filings. The Company has filed with the Securities and
Exchange Commission (the "SEC"), and has delivered to Purchaser complete and
correct copies of, all SEC Filings. As of their respective dates, the SEC
filings did not contain any untrue statement of a material fact, or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(n) Intellectual Property. The Company has full ownership of, or the
legal right to use, all Intellectual Property that pertains to or is used in the
Company's business (collectively, "Company Intellectual Property") in the manner
in which it is currently used and, to the knowledge of the Company, such use
does not conflict with, misappropriate or infringe, and has not been alleged to
conflict with, misappropriate or infringe, any Intellectual Property rights or
franchises of any Person. To the knowledge of the Company, (i) none of the
Company Intellectual Property is being infringed by any Person, and (ii) the
Company Intellectual Property constitutes all of the Intellectual Property
necessary to enable the Company to lawfully carry on its business as now
conducted and as currently contemplated to be conducted, in either case except
as would not reasonably be expected to have a Material Adverse Effect.
(o) Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
(q) Full Disclosure. The representations, warranties and statements
made by the Company in this Agreement, including the Schedules and other
documents delivered pursuant hereto, do not contain any untrue statement of a
material fact, and, when taken together, do not omit to state any material fact
necessary to make such representations, warranties and statements, in light of
the circumstances under which they are made, not misleading.
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5. Representations and Warranties of Each Purchaser. To induce the
Company to enter into this Agreement, each Purchaser, severally and not jointly
and solely with respect to itself, hereby represents and warrants to the Company
as follows:
(a) Organization; Authority. If Purchaser is a partnership or a
trust, Purchaser is duly organized and validly existing under the laws of its
jurisdiction of organization and has all of the necessary partnership or trust
power and authority, as applicable, to execute, deliver and perform each
Transaction Document to which Purchaser is a party. If Purchaser is an
individual, Purchaser has full power and legal capacity to execute, deliver and
perform each of the Transaction Documents to which Purchaser is a party. If
Purchaser is a partnership or a trust, the execution, delivery and performance
by Purchaser of each Transaction Document to which Purchaser is a party have
been duly authorized by all necessary partnership or trust action, as
applicable, on the part of Purchaser. Each of the Transaction Documents to which
Purchaser is a party has been duly and validly executed and delivered by
Purchaser and constitutes the valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as such
enforcement may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, or (ii) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
(b) No Conflicts. The execution, delivery and performance by
Purchaser of the Transaction Documents to which Purchaser is a party will not,
with or without the giving of notice, the passage of time or both, conflict
with, result in a material breach of, or constitute a violation or default or
give any Person the right to terminate or accelerate any obligation under (i)
Purchaser's partnership agreement or trust agreement, as applicable (if
Purchaser is a partnership or a trust); (ii) any agreement or other document or
instrument to which Purchaser is a party or by which Purchaser or any of
Purchaser's assets or properties is bound or affected, the breach, violation or
default of which would reasonably be expected to have a material adverse effect
on Purchaser; or (iii) any federal or state law, statute, rule, regulation,
ordinance, writ, order or judgment to which Purchaser is subject or by which
Purchaser or any of Purchaser's property is bound or affected.
(c) Investment Representations.
(i) Purchaser acknowledges that neither the offer nor sale of
the Shares has been registered under the Securities Act or any state
securities laws and that each certificate representing the Shares shall
bear substantially the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION
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THEREUNDER OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT, AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE UNITED
STATES STATE SECURITIES LAWS."
(ii) Purchaser has sufficient cash and/or available credit
facilities to pay the Purchase Price in accordance with the terms of this
Agreement.
(iii) Purchaser acknowledges that:
(A) the Shares must be held indefinitely and Purchaser
must continue to bear the economic risk of the investment in the
Shares unless the offer and sale thereof is subsequently registered
under the Securities Act or an exemption from such registration is
available;
(B) the Shares cannot be sold or otherwise disposed of
unless such sale or disposition is registered under the Securities Act
and all applicable state securities laws or an exemption from such
registration is available; and
(C) Purchaser is purchasing the Shares solely for its
own account, with the intent of holding each of such securities for
investment, without the intent of participating directly or indirectly
in the distribution of any of such securities, and no other Person
will have any direct or indirect interest in the Shares acquired by
Purchaser pursuant to this Agreement.
(iv) Purchaser understands the risks involved in investments in
the Company and in the Shares and that investment in the Shares involves a
risk of loss of Purchaser's entire investment and Purchaser is able
financially to bear the risk thereof and can afford the complete loss
thereof. Purchaser represents that the experience and knowledge of
Purchaser and Purchaser's representatives in financial and business
matters, in general, and in investments such as the Shares, in particular,
is sufficient for Purchaser to be able to evaluate the merits and risks of
investment in such securities.
(v) Purchaser is an "Accredited Investor" (as defined in Rule
501 of Regulation D promulgated under Section 4(2) of the Securities Act)
and has completed and executed a suitability questionnaire, in the form of
Schedule 5(c) attached hereto, certifying its basis for such
representation.
(vi) Purchaser (A) is familiar with the operation of the
Company, (B) has received and has had adequate opportunity to inspect the
materials provided by the Company and identified on Schedule 5(a) hereto
(collectively, the "Disclosure Materials"), (C) has carefully reviewed the
Disclosure Materials and understands the information
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contained therein, and (D) has received adequate information to enable
Purchaser to make an informed decision with respect to Purchaser's
ownership of the Shares.
(vii) Purchaser and Purchaser's advisors have had a reasonable
opportunity to ask questions of and receive information and answers from
Persons acting on behalf of the Company concerning the offering of the
Shares and, as Purchaser may deem necessary, to verify the information
contained in the Disclosure Materials, and all questions have been answered
and all such information has been provided to the full satisfaction of
Purchaser.
(viii) No oral or written representations have been made, or oral
or written information furnished to Purchaser or Purchaser's advisors in
connection with the offering of the Shares, which were inconsistent with
the information stated in the Disclosure Materials.
(ix) Purchaser is not receiving the Shares as a result of any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio,
or presented at any seminar or meeting, or any solicitation of a
subscription by a Person not previously known to the Purchaser in
connection with investments in securities generally.
(x) Purchaser's overall commitment to investments that are not
readily marketable is not disproportionate to Purchaser's net worth and
Purchaser's holding of the Shares will not cause such overall commitment to
become disproportionate to Purchaser's net worth.
(xi) Purchaser is not relying on the Company with respect to
the economic considerations of Purchaser relating to this investment. In
regard to such considerations, Purchaser has relied on the advice of, or
has consulted with, only Purchaser's own advisors.
(xii) Purchaser recognizes that an investment in the Shares
involves a number of significant risks, including those set forth in the
Disclosure Materials. Purchaser recognizes no federal or state agency has
passed upon the adequacy of the information presented to Purchaser or made
any finding or determination as to the fairness of this investment.
(xiii) All information which Purchaser has heretofore furnished
and furnishes herewith in writing to the Company, including, without
limitation, the information contained on Schedule 5(c) hereto, and any
other information with respect to Purchaser's financial position and
business experience set forth herein is correct and complete as of the date
of this Agreement, and, if there should be any material change in
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such information prior to the Closing Date, Purchaser will immediately
furnish such revised or corrected information to the Company.
(xiv) Purchaser hereby agrees promptly, upon the request of the
Company, to provide such information and execute and deliver such documents
as may be reasonably necessary to comply with any and all laws and
ordinances to which the Company is subject.
(xv) The foregoing representations, warranties and agreements,
together with all other representations and warranties made or given by
Purchaser to the Company in any other written statement or document
delivered in connection with the transactions contemplated hereby, shall be
true and correct in all material respects on and as of the Closing Date.
(xvi) Purchaser understands that the Company, in issuing and
selling the Shares to Purchaser hereunder, is relying upon the
representations, warranties and covenants made by Purchaser in this
Agreement.
(d) Consents and Approvals. The execution, delivery and performance
by Purchaser of each Transaction Document to which Purchaser is a party do not
require any consent, approval, authorization or other order of, action by,
filing with or notification to any governmental authority or other Person.
(e) Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Purchaser.
6. Conditions Precedent to Closing
(a) Conditions to Purchasers' Obligations. The obligations of each
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(i) the Company shall have delivered to each Purchaser one or
more stock certificates (as may be requested by such Purchaser), duly
executed by the Company, evidencing such Purchaser's ownership of the
Shares purchased by such Purchaser;
(ii) the Company shall have delivered to Purchasers Amendment
No. 1, in the form attached as Exhibit B, duly executed by the Company and
all parties thereto (other than the Purchasers);
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<PAGE>
(iii) the Company shall have received all consents,
authorizations and approvals of governmental agencies and other Persons
necessary to consummate the transactions contemplated hereby, including the
consent and waiver of the holders of Series A Preferred Stock;
(iv) the members of the Board of Directors of the Company shall
consist of R. Scott Morrison, Jr., Jack Miller, Gary J. Rovansek and Arnold
M. Anderson, and Jack Miller shall have been elected Chairman of the Board
of Directors; and
(v) the Company's Articles of Incorporation, as amended to
include the Amended Certificate, shall be in full force and effect under
the laws of the State of Illinois as of the Closing and shall not have been
further amended or modified.
(b) Conditions to the Company's Obligations. The obligation of the
Company to consummate the transactions contemplated by this Agreement shall be
subject to the delivery by Purchasers of (i) the Purchase Price, and (ii)
Amendment No. 1, in the form attached as Exhibit B, duly executed by Purchasers.
7. Indemnification.
(a) Survival. Each of the representations and warranties contained in
this Agreement shall survive the execution and delivery of this Agreement for a
period of one year.
(b) Purchasers' Right to Indemnification. Subject to the provisions
of this Section 7 and in addition to any other rights and remedies available to
each Purchaser under applicable law, the Company hereby covenants and agrees to
indemnify each Purchaser and its respective Affiliates, employees, agents and
representatives, and all successors, permitted assigns and fiduciaries thereof
(the "Purchaser Indemnified Parties"), and to save and hold each Purchaser
Indemnified Party harmless from and against, any and all liabilities, claims,
causes of action, assessments, losses, costs, damages or expenses (whether or
not arising out of third party claims), including, without limitation, interest,
penalties, reasonable attorneys' fees and all amounts paid in investigation,
defense or settlement of any of the foregoing (collectively, "Losses") that any
Purchaser Indemnified Party may suffer, sustain or become subject to, resulting
from, arising out of or relating to:
(i) breach of any representation or warranty made by or on
behalf of the Company in any Transaction Document to which the Company is a
party; or
(ii) any nonfulfillment or breach of any covenant or agreement
to be fulfilled by the Company under any Transaction Document to which the
Company is a party.
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<PAGE>
(c) The Company's Right to Indemnification. Subject to the provisions
of this Section 7 and in addition to any other rights and remedies available to
the Company under applicable law, each Purchaser, severally and not jointly,
hereby covenants and agrees to indemnify the Company and all of the Company's
Affiliates, employees, agents and representatives, and all successors, permitted
assigns and fiduciaries thereof (the "Company Indemnified Parties"), and to save
and hold each Company Indemnified Party harmless from and against, any and all
Losses that any Company Indemnified Party may suffer, sustain or become subject
to, resulting from, arising out of or relating to:
(i) breach of any representation or warranty made by such
Purchaser in any Transaction Document to which such Purchaser is a party;
or
(ii) any nonfulfillment or breach of any covenant or agreement
to be fulfilled by such Purchaser under any Transaction Document to which
such Purchaser is a party.
(d) Nothing contained in this Section 7 shall confer any rights upon,
or inure to the benefit of, any third party other than those parties specified
in this Section 7, it being understood that such other parties, to the extent
not actually parties hereto or specified in Section 7, shall not be third party
beneficiaries of any party's obligations hereunder.
8. Miscellaneous.
(a) Covenant to Decrease Size of Board of Directors. The Company and
each party hereto agrees to use its/his best efforts, within 30 days after the
date hereof, to decrease to seven (7) the number of members that shall
constitute the entire Board of Directors of the Company.
(b) Expenses. Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
(c) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made) upon the earliest to occur of
(i) receipt, if made by personal service, (ii) two days after delivery to a
reputable overnight courier service, (iii) upon the delivering party's receipt
of a written confirmation of a transmission made by facsimile, or (iv) five days
after being mailed by registered or certified air mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 8(b)):
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<PAGE>
if to Purchasers, to the address of each Purchaser as set forth on
Schedule A hereto, with a copy to:
Neal, Gerber & Eisenberg
Two North LaSalle Street, Suite 2200
Chicago, Illinois 60602
Attention: Marshall E. Eisenberg, Esq.
Telecopy: (312) 269-1747
if to the Company:
Successories, Inc.
2520 Diehl Road
Aurora, Illinois 60504
Attention: Gary Rovansek
Telecopy: (630) 820-3003
with a copy to:
Vedder, Price, Kaufman & Kammholz
222 N. LaSalle Street
Chicago, Illinois 60601
Attention: Guy Snyder, Esq.
Telecopy: (312) 609-5005
(d) Headings. The descriptive headings contained in this Agreement
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(e) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy,
such provision shall be severed and the remaining provisions hereof shall be
enforced to the extent possible or modified in such a way as to make it
enforceable, and the invalidity, illegality or unenforceability thereof shall
not affect the validity, legality or enforceability of the remaining provisions
of this Agreement.
(f) Entire Agreement. This Agreement, including all of the Exhibits
and Schedules hereto that are incorporated herein by this reference, constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, between any party hereto with respect to the subject matter hereof.
(g) Assignment. This Agreement and the rights and duties hereunder
may not be assigned or assumed by operation of law or otherwise without the
express prior written consent
-12-
<PAGE>
of the other parties, except that the rights and obligations of either Purchaser
hereunder may be assigned to and assumed by any Affiliate of such Purchaser.
This Agreement and all the terms and provisions hereof shall be binding upon and
shall inure to the benefit of the parties hereto, and their respective heirs,
legal representatives, permitted successors and permitted assigns.
(h) Amendments and Waivers. No amendment of this Agreement shall be
valid unless the same shall be in writing and signed by all parties hereto. No
waiver by any party of any default, misrepresentation or breach hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach hereunder or affect in any way any rights
of any other party arising by virtue of any prior or subsequent such occurrence.
(i) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of Illinois, without regard
to its principals regarding conflicts of law.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Signature Page Follows]
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Preferred Stock Purchase
Agreement as of the date first above written.
THE COMPANY:
SUCCESSORIES, INC.
By: /s/ Steven D. Kuptsis
------------------------------------------
Name: Steven D. Kuptsis
Title: Senior VP & Chief Financial Officer
PURCHASERS:
HARVEY L. MILLER REVOCABLE TRUST
DATED JANUARY 21, 1983
By: /s/ Harvey L. Miller
------------------------------------------
Harvey L. Miller, not individually but
solely as trustee
JACK MILLER FAMILY LIMITED PARTNERSHIP #1
By: Jack Miller Trust Dated January 18, 1984,
its general partner
By: /s/ Jack Miller
------------------------------------------
Jack Miller, not individually but solely
as trustee of the general partner
/s/ Gary J. Rovansek
---------------------------------------------
Gary J. Rovansek
<PAGE>
SCHEDULE A
PURCHASERS
----------
- --------------------------------------------------------------------------------
No. Shares Aggregate
Name/Address of Purchaser Purchased Purchase Price
- --------------------------------------------------------------------------------
Jack Miller Family Limited Partnership #1 50,000 $750,000
c/o The Benida Group, LLC
475 Half Day Road, Suite 100
Lincolnshire, Illinois 60069
Telecopy: (847) 883-9808
- --------------------------------------------------------------------------------
Harvey L. Miller, as trustee of the Harvey 50,000 $750,000
L. Miller Trust Dated January 21, 1983
c/o The Benida Group, LLC
475 Half Day Road, Suite 100
Lincolnshire, Illinois 60069
Telecopy: (847) 883-9808
- --------------------------------------------------------------------------------
Gary J. Rovansek 1,667 $25,005
c/o Successories, Inc.
2520 Diehl Road
Aurora, Illinois 60504
Telecopy: (630) 820-3003
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 5(C)
ACCREDITED INVESTOR STANDARDS
-----------------------------
Purchaser is an Accredited Investor because Purchaser is (please check
applicable box and return to the Company ):
[ ] A natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his or her purchase exceeds
$1,000,000.
[ ] A natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same level in the current year.
[ ] A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as
amended; an insurance company as defined in Section 2(13) of the
Securities Act; an investment company registered under the Investment
Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of such Act; a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958; a plan
established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; or an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 if the
investment decision is made by a plan fiduciary, as defined in Section
3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if
a self-directed plan, with investment decisions made solely by persons
that are accredited investors.
[ ] A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
[ ] An organization described in section 501(c)(3) of the Internal Revenue
Code, a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
Shares offered, with total assets in excess of $5,000,000.
S-1
<PAGE>
[ ] A director, executive officer or general partner of the Company.
[ ] A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii)
of Regulation D promulgated under Section 4(2) of the Securities Act.
[ ] An entity in which all the equity owners are accredited investors.
IN WITNESS WHEREOF, the undersigned has executed this Schedule and
certifies that it is true and correct as of the date hereof.
[Purchaser]
By:
---------------------------------
Name:
Title:
Date as of October ___, 1999
S-2
EXHIBIT 99.3
AMENDMENT NO. 1 TO THE
REGISTRATION RIGHTS AGREEMENT
THIS AMENDMENT NO. 1 TO THE REGISTRATION RIGHTS AGREEMENT (this
"Amendment") is made as of October 18, 1999 to the Registration Rights Agreement
dated May 28, 1999 (the "Original Agreement") among Successories, Inc., an
Illinois corporation (the "Company"), and the holders of Series A Convertible
Preferred Stock of the Company (the "Series A Preferred Stock"). This Amendment
is entered into by and among the Company and all of the holders of the Series A
Preferred Stock and Series B Preferred Stock (as defined herein).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company previously granted to the holders of Series A
Preferred Stock of the Company, pursuant to the Original Agreement, certain
rights to register for sale the shares of Common Stock issuable to such holders
upon conversion of the Series A Preferred Stock or issued as dividends on or
otherwise in respect of the Series A Preferred Stock;
WHEREAS, the Company is issuing and selling 101,667 shares of Series B
Convertible Preferred Stock, par value $.01 per share, of the Company (the
"Series B Preferred Stock") and desires to grant to the purchasers thereof the
same rights to register their shares that previously has been granted to the
holders of Series A Preferred Stock pursuant to the Original Agreement; and
WHEREAS, the Company and the holders of the Series A Preferred Stock and
Series B Preferred Stock desire to amend the Original Agreement to set forth the
terms and conditions on which the Company may be obligated to register for sale
the shares of Common Stock issuable to the Stockholders (as defined herein) upon
conversion of the Series A Preferred Stock and Series B Preferred Stock or
issued as dividends on or otherwise in respect of such shares, according to the
terms thereof.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties hereto, intending legally to be bound, hereby
agree as follows:
1. Definitions. All capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Original Agreement. The following terms defined in the Original Agreement are
hereby amended, to the extent set forth below:
"Stockholders" means, collectively, the holders of the Preferred Stock
and, individually, any holder of Preferred Stock, who or which is a
signatory to this Amendment.
<PAGE>
"Preferred Stock" means the 503,092 shares of Series A Convertible
Preferred Stock, par value $.01 per share, of the Company and the 101,667
shares of Series B Convertible Preferred Stock, par value $.01 per share,
of the Company.
By virtue of these amended definitions, it is the intention of the parties
hereto that the term "Holders" as used in the Original Agreement include the
holders of Series A Preferred Stock and the holders of Series B Preferred Stock
and that the term "Registrable Securities" include all shares of Common Stock
issuable upon conversion of the Series A Preferred Stock and Series B Preferred
Stock, or issued as dividends on or otherwise in respect of such shares.
2. Right to Elect Directors. Section 15(a) of the Original Agreement is
hereby amended and restated in its entirety to read:
(a) Board Nominees. For so long as any shares of Preferred Stock
remain outstanding, the Company (i) shall use its best efforts to nominate
three (3) persons designated by the Holders of a majority of the Preferred
Stock, voting together as a single class, for election to the Board of
Directors of the Company and to the classes of director (Class I, II or
III) designated by such Holders, and (ii) shall take all actions necessary
and use all reasonable endeavors (including obtaining the consent of the
officers, directors, significant stockholders and affiliates of the
Company) to ensure the election of such three (3) persons to the Board of
Directors.
3. Voting Mechanics. Whenever the request, consent or approval of the
Holders of a majority or other specified percentage of the Preferred Stock is
required under the Original Agreement, the presence or absence of request,
consent or approval shall be determined based upon the vote of the Holders of
the Preferred Stock voting together as a single class.
4. Waiver and Consent of Series A Holders. Each party to this Amendment
who or which owns Series A Preferred Stock hereby:
(a) acknowledges receipt of written notice of the proposed issuance
and sale of 101,667 shares of Series B Preferred Stock in consideration for
an aggregate purchase price of $1,525,005.00 (the "Offering");
(b) acknowledges that, upon completion of the Offering, the Series B
Preferred Stock will have the rights and privileges set forth in the
Amended and Restated Certificate of Designation of Series A and Series B
Convertible Preferred Stock of the Company, in substantially the form
attached hereto as Exhibit A, which rights are equal or superior to the
rights and preferences of the Series A Preferred Stock;
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<PAGE>
(c) waives its or his preemptive rights, pursuant to Section 6 of the
Certificate of Designation of Series A Preferred Stock of the Company as in
effect immediately prior to the Offering (the "Current Certificate"), to
purchase shares of Series B Preferred Stock of the Company in connection
with, or otherwise to participate in, the Offering; provided, however, that
this waiver is effective only with respect to the Offering and such party
does not waive any preemptive rights it or he may have with respect to any
future offering or sale of preferred stock or other securities of the
Company;
(d) waives its or his rights, pursuant to Section 4(e) of the Current
Certificate, to require the Company to reduce the Conversion Price of the
Series A Preferred Stock to reflect the issuance and sale of the Series B
Preferred Stock in the Offering; and
(e) pursuant to Section 5(c) of the Current Certificate, consents to
and approves of the filing by the Company of the Amended and Restated
Certificate of Designation, with substantially the terms attached hereto as
Exhibit A, the creation of the Series B Preferred Stock and consummation of
the Offering.
5. Ratification of Original Agreement. Except to the extent that the
Original Agreement is modified or amended by this Amendment, the terms and
provisions of the Original Agreement are hereby ratified and confirmed for all
purposes and in all respects. The holders of the Series B Preferred Stock agree
to be bound by the terms and conditions of the Original Agreement, as amended
hereby, and are entitled to all of the rights and benefits thereof.
6. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the State of Illinois, without regard to
its principals regarding conflicts of law.
7. Counterparts. This Amendment may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
8. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy,
such provision shall be severed and the remaining provisions hereof shall be
enforced to the extent possible or modified in such a way as to make it
enforceable, and the invalidity, illegality or unenforceability thereof shall
not affect the validity, legality or enforceability of the remaining provisions
of this Agreement.
-3-
<PAGE>
9. Assignment. This Amendment and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto, and
their respective heirs, legal representatives, permitted successors and
permitted assigns. Except as expressly provided herein, no party may assign its
rights or obligations under this Amendment without the prior written consent of
the other party.
[Signature Page Follows]
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to the
Registration Rights Agreement as of the date first above written.
THE COMPANY:
-----------
SUCCESSORIES, INC.
By: /s/ Steven D. Kuptsis
------------------------------------------
Steven D. Kuptsis,
Senior VP and Chief Financial Officer
STOCKHOLDERS:
------------
HARVEY L. MILLER REVOCABLE TRUST
DATED JANUARY 21, 1983
By: /s/ Harvey L. Miller
------------------------------------------
Harvey L. Miller, not individually
but solely as trustee
JACK MILLER FAMILY LIMITED
PARTNERSHIP #1
By: Jack Miller Trust Dated January 18, 1984,
its general partner
By: /s/ Jack Miller
------------------------------------------
Jack Miller, not individually but solely
as trustee of the general partner
/s/ Gary J. Rovansek
---------------------------------------------
Gary J. Rovansek
[Signature Page to Amendment No. 1 to Registration Rights Agreement]
<PAGE>
HOWARD I. BERNSTEIN DECLARATION OF
TRUST DATED APRIL 28, 1987
By: /s/ Howard I. Bernstein
------------------------------------------
Howard I. Bernstein, trustee
/s/ Eric Achepohl
---------------------------------------------
Eric Achepohl
[Signature Page to Amendment No. 1 to Registration Rights Agreement]
EXHIBIT 99.4
AMENDED AND RESTATED CERTIFICATE OF DESIGNATION
OF SERIES A AND SERIES B CONVERTIBLE
PREFERRED STOCK OF SUCCESSORIES, INC.
WHEREAS, Successories, Inc., an Illinois corporation (the "Company"),
is authorized to issue 1,000,000 shares of Preferred Stock, par value $.01 per
share, of which 503,092 have been designated Series A Convertible Preferred
Stock (the "Series A Preferred Stock") and have the rights and privileges set
forth in the Certificate of Designation of Series A Convertible Preferred Stock
as filed with the Secretary of State of Illinois on May 26, 1999; and
WHEREAS, the Board of Directors of the Company desires to designate
101,667 of the authorized but undesignated and unissued shares of Preferred
Stock, par value $.01 per share, of the Company as Series B Convertible
Preferred Stock and, in connection therewith, to amend and restate the
Certificate of Designation of Series A Convertible Preferred Stock to set forth
the rights and privileges of the Series B Convertible Preferred Stock.
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority
conferred upon the Board of Directors of the Company, pursuant to its Articles
of Incorporation, as amended, and in accordance with the Illinois Business
Corporation Act of 1983, as amended, the Company's Board of Directors has
adopted resolutions creating a series of its Preferred Stock, par value $.01 per
share, designated as Series B Convertible Preferred Stock, with the preferences,
privileges and relative participating, optional or other special rights set
forth herein; and
BE IT FURTHER RESOLVED, that this Amended and Restated Certificate of
Designation was duly adopted by the Board of Directors of the Company and the
text of the Certificate of Designation of Series A Convertible Preferred Stock
of the Company is hereby amended and restated to read in its entirety as
follows:
1. Designation; Number. The total number of shares of Preferred Stock
which the Company has authority to issue is 1,000,000 shares of Preferred Stock,
par value $.01 per share, of which 503,092 are designated as Series A
Convertible Preferred Stock (the "Series A Preferred Stock"), and 101,667 are
designated as Series B Convertible Preferred Stock (the "Series B Preferred
Stock"). The Series A Preferred Stock and the Series B Preferred Stock shall be
referred to herein, collectively, as the Convertible Preferred Stock.
2. Dividends.
(a) Rate of Dividends. The holders of outstanding Convertible
Preferred Stock shall be entitled to receive, out of any funds legally available
therefor, cumulative dividends at the rate of eight percent (8%) of the Stated
Value (as defined herein) thereof per annum commencing on the date of issuance
of such shares. The "Stated Value" shall mean,
<PAGE>
with respect to the Series A Preferred Stock, an amount equal to $2.425 per
share and, with respect to the Series B Preferred Stock, an amount equal to
$15.00 per share. Dividends on the Convertible Preferred Stock shall be payable
in preference to payment of any dividend on Common Stock or other capital stock
of the Company. Accrued and unpaid dividends on the Convertible Preferred Stock
shall be paid (i) on April 30, July 31, October 31 and January 31 of each year,
for each three-month period then ending, to the holders of record as they appear
on the books and records of the Company 10 days preceding each payment date, and
(ii) on the date certificates representing Common Stock of the Company are
delivered or required to be delivered following any conversion of Convertible
Preferred Stock pursuant to Section 4, whether such conversion is optional or
automatic. Notwithstanding the foregoing clause (i), dividends on the Series A
Preferred Stock shall be paid commencing on July 31, 2000 and dividends on the
Series B Preferred Stock shall be paid commencing on October 31, 2000, on which
dates the Company shall pay all dividends that have accrued from the date of
issuance of the Series A Preferred Stock and the Series B Preferred Stock,
respectively, until such payment date.
(b) Payment in Common Stock. In lieu of payment in cash, at the
option of the Company or, upon written notice delivered to the Company, at the
option of the holders of a majority of the Convertible Preferred Stock then
outstanding, determined with the Series A Preferred Stock and the Series B
Preferred Stock voting as a single class (such a majority of the Series A
Preferred Stock and the Series B Preferred Stock being referred to herein as a
"Majority of the Convertible Preferred Stock"), the Company shall pay dividends
on the Convertible Preferred Stock in shares of Common Stock that have an
aggregate Fair Market Value (as defined herein) equal to the aggregate dividends
payable. "Fair Market Value" means the average of the last reported sales price
of the Common Stock on the Nasdaq Stock Market or on any national or regional
securities exchange on which the Common Stock is listed or admitted to unlisted
trading privileges, as reported for each of the 10 consecutive trading days
ending on the 10th trading date prior to any dividend payment date.
3. Liquidation Preference.
(a) Preference Over Junior Securities. In the event of any
liquidation, dissolution or winding up of the Company, either voluntary or
involuntary, the holders of Convertible Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Company in respect of the Common Stock or other capital
stock of the Company, the Stated Value thereof for each share of Convertible
Preferred Stock then held by them and, in addition, an amount equal to all
accrued but unpaid dividends on such Convertible Preferred Stock. After payment
or setting apart of payment has been made to the holders of Convertible
Preferred Stock of the full preferential amounts so payable to them, the holders
of Common Stock and other capital stock shall be entitled to receive pro rata
the remaining assets of the Company. If the assets and funds available for
distribution to the holders of the Convertible Preferred Stock are insufficient
to permit the payment to such holders of their full preferential amount, then
the entire assets and
-2-
<PAGE>
funds of the Company legally available for distribution shall be distributed
among the holders of Convertible Preferred Stock, on a pro rata basis (i.e.,
based on the number of shares of Common Stock into which each holder's shares of
Convertible Preferred Stock are then convertible relative to the total number of
shares of Common Stock into which all outstanding shares of Convertible
Preferred Stock are then convertible).
(b) Triggering Events. For purposes of this Section 3, a liquidation
of the Company shall be deemed to include, without limitation, the following
events: (i) a reorganization or merger of the Company with or into any other
corporation or entity (other than a consolidation or merger in which the Company
is the continuing entity and which does not result in any adverse change in the
rights, preferences or privileges of the Common Stock); (ii) a sale of all or
substantially all of the assets of the Company; or (iii) a change in the
majority of the Board of Directors, occurring during any 13-month period
commencing on October 19, 1999, that was not approved by a majority of the
directors serving on October 19, 1999, or by a majority of those subsequently
elected directors whose election or nomination for election was approved by a
majority of the directors then serving on the Board of Directors.
4. Conversion.
(a) Optional Conversion. Each share of Series A Preferred Stock and
Series B Preferred Stock shall be convertible, at any time at the option of the
holder thereof, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing the Stated Value of Series A Preferred
Stock and Series B Preferred Stock by the applicable Conversion Price (as
defined below) of the Series A Preferred Stock or Series B Preferred Stock,
respectively, in effect at the time of conversion. The "Conversion Price"
initially shall mean, with respect to the Series A Preferred Stock, an amount
equal to $2.425 per share and, with respect to the Series B Preferred Stock, an
amount equal to $2.3625 per share; provided that each such initial Conversion
Price shall be subject to adjustment as provided in Section 4(e). The ratio of
the Stated Value of the Series A Preferred Stock or Series B Preferred Stock
divided by the Conversion Price of the Series A Preferred Stock or Series B
Preferred Stock, respectively, in effect at any specified time is hereinafter
referred to as the "Conversion Ratio" for such series of Convertible Preferred
Stock.
(b) Automatic Conversion. Each share of Convertible Preferred Stock
automatically, without action on the part of the Company or the holder thereof,
shall be converted into shares of Common Stock, at the then effective Conversion
Ratio with respect thereto, in the event that the closing sales price of the
Common Stock equals or exceeds $10.00 per share for 30 consecutive trading days
commencing on or after October 18, 2000. Any such automatic conversion shall be
deemed to have occurred as of the close of trading on the 30th such consecutive
trading day.
(c) Mechanics of Conversion. Before any holder of Convertible
Preferred Stock shall be entitled to convert the same into full shares of Common
Stock and to receive
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certificates therefor, such holder shall surrender the certificates representing
the Convertible Preferred Stock to be converted, duly endorsed, at the office of
the Company or of any transfer agent for the Convertible Preferred Stock, and
shall give written notice to the Company that such holder elects to convert the
same; provided, however, that in the event of an automatic conversion pursuant
to Section 4(b), the outstanding shares of Convertible Preferred Stock shall be
converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to
the Company or its transfer agent; provided further that the Company shall not
be obligated to issue certificates evidencing the shares of Common Stock
issuable upon such automatic conversion unless the certificates evidencing such
shares of Convertible Preferred Stock are either delivered to the Company or its
transfer agent as provided above, or the holder notifies the Company or its
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement satisfactory to the Company to indemnify the Company from
any loss incurred by it in connection with such certificates. The Company shall,
as soon as practicable after such delivery, but in no event more than five
business days later, issue and deliver to such holder a certificate for the
number of shares of Common Stock to which the holder shall be entitled and a
check payable to the holder in the amount of any cash amounts payable as the
result of a conversion into fractional shares of Common Stock plus any accrued
but unpaid dividends on such converted shares. Such conversion shall be deemed
to have been made immediately prior to the close of business on the date of
surrender of the shares of Convertible Preferred Stock to be converted or, in
the case of automatic conversion, on the 30th consecutive trading day described
in Section 4(b), and the persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holders of such shares of Common Stock on such date.
(d) Fractional Shares. In lieu of any fractional shares to which the
holder of Convertible Preferred Stock otherwise would be entitled, the Company
shall pay cash equal to such fraction multiplied by the average of the last
reported sales price of the Common Stock on the Nasdaq Stock Market, or on any
national or regional securities exchange on which the Common Stock is listed or
admitted to unlisted trading privileges, as reported for each of the 10
consecutive trading days ending on the trading date immediately prior to the
conversion date. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of shares of
Convertible Preferred Stock of each holder at the time converting into Common
Stock and the number of shares of Common Stock issuable upon such aggregate
conversion.
(e) Adjustment of Conversion Price. The Conversion Price for the
Series A Preferred Stock and/or the Series B Preferred Stock shall be subject to
adjustment from time to time as follows:
(i) If the number of shares of Common Stock outstanding at any
time after the date hereof is increased by a stock dividend payable in
shares of Common Stock, or by a subdivision or split-up of shares of Common
Stock, then on the
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date such dividend is made or such change is effective, the Conversion
Price shall be appropriately decreased so that the number of shares of
Common Stock issuable on conversion of any shares of Convertible Preferred
Stock shall be increased in proportion to such increase in the number of
shares of Common Stock outstanding.
(ii) If the number of shares of Common Stock outstanding at any
time after the date hereof is decreased by a combination of the outstanding
shares of Common Stock, then on the effective date of such combination, the
Conversion Price shall be appropriately increased so that the number of
shares of Common Stock issuable on conversion of any shares of Convertible
Preferred Stock shall be decreased in proportion to such decrease in the
number of shares of Common Stock outstanding.
(iii) In case the Company shall declare a cash dividend upon its
Common Stock payable otherwise than out of retained earnings or shall
distribute to holders of its Common Stock shares of its capital stock
(other than Common Stock), stock or other securities of other persons,
evidences of indebtedness issued by the Company or other persons, assets
(excluding cash dividends) or options or rights (excluding options to
purchase and rights to subscribe for Common Stock or other securities of
the Company convertible into or exchangeable for Common Stock), then, in
each such case, the holders of the Convertible Preferred Stock shall,
concurrent with the distribution to holders of Common Stock, receive a like
distribution based upon the number of shares of Common Stock into which
such Convertible Preferred Stock is then convertible.
(iv) In case any capital reorganization or any reclassification
of the stock of the Company (other than as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or
merger of the Company with or into another person (other than a
consolidation or merger in which the Company is the continuing entity and
which does not result in any adverse change in the rights, preferences or
privileges of the Common Stock) is effected at any time after the date
hereof, each share of Convertible Preferred Stock shall, after such
reorganization, reclassification, consolidation, merger, sale or other
disposition, be convertible into the kind and number of shares of stock or
other securities or property of the Company or otherwise to which such
holder would have been entitled if, immediately prior to such
reorganization, reclassification, consolidation, merger, sale or other
disposition, such holder had converted such share of Convertible Preferred
Stock into Common Stock. The provisions of this clause (iv) shall similarly
apply to successive reorganizations, reclassification, consolidations,
mergers, sales or other dispositions.
(v) If the Company issues or sells (or in accordance with
Section 4(e)(vii)(A) below is deemed to have issued or sold) any shares of
Common Stock after May 28, 1999 for a consideration per share less than the
Conversion Price of the Series A Preferred Stock in effect immediately
prior to such issuance or sale (for purposes of
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<PAGE>
this Section 4(e)(v), a "Dilutive Issuance"), then the Conversion Price of
the Series A Preferred Stock in effect immediately prior to such Dilutive
Issuance forthwith shall be adjusted, to prevent dilution of the conversion
rights granted under this Section 4, to an amount equal to the quotient
obtained by dividing:
(A) an amount equal to (1) the product of the Conversion Price
of the Series A Preferred Stock immediately prior to such Dilutive
Issuance, multiplied by the total number of shares of Common Stock
outstanding immediately prior to such Dilutive Issuance, on a fully
diluted basis (e.g., including any shares deemed to have been issued
pursuant to Section 4(e)(vii)(A) plus shares of Common Stock issuable
upon conversion of the Series B Preferred Stock (before any adjustment
to the Series B Preferred Stock Conversion Price that also may be
required as a result of such Dilutive Issuance)), plus (2) the
consideration received (or deemed to be received, in accordance with
Section 4(e)(vii)(A) below) by the Company upon such issuance or sale,
by:
(B) the number of shares of Common Stock outstanding, on a
fully diluted basis (e.g., including any shares deemed to have been
issued pursuant to Section 4(e)(vii)(A) plus shares of Common Stock
issuable upon conversion of the Series B Preferred Stock (before any
adjustment to the Series B Preferred Stock Conversion Price that also
may be required as a result of such Dilutive Issuance)), immediately
after such issuance or sale.
(vi) If the Company issues or sells (or in accordance with
Section 4(e)(vii)(A) below is deemed to have issued or sold) any shares of
Common Stock after October 18, 1999 for a consideration per share less than
the Conversion Price of the Series B Preferred Stock in effect immediately
prior to such issuance or sale (for purposes of this Section 4(e)(vi), a
"Dilutive Issuance"), then the Conversion Price of the Series B Preferred
Stock in effect immediately prior to such Dilutive Issuance forthwith shall
be adjusted, to prevent dilution of the conversion rights granted under
this Section 4, to an amount equal to the quotient obtained by dividing:
(A) an amount equal to (1) the product of the Conversion Price
of the Series B Preferred Stock immediately prior to such Dilutive
Issuance, multiplied by the total number of shares of Common Stock
outstanding immediately prior to such Dilutive Issuance, on a fully
diluted basis (e.g., including any shares deemed to have been issued
pursuant to Section 4(e)(vii)(A) plus shares of Common Stock issuable
upon conversion of the Series A Preferred Stock (before any adjustment
to the Series A Preferred Stock Conversion Price that also may be
required as a result of such Dilutive Issuance)), plus (2) the
consideration received (or deemed to be received, in accordance with
Section 4(e)(vii)(A) below) by the Company upon such issuance or sale,
by:
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(B) the number of shares of Common Stock outstanding, on a
fully diluted basis (e.g., including any shares deemed to have been
issued pursuant to Section 4(e)(vii)(A) plus shares of Common Stock
issuable upon conversion of the Series A Preferred Stock (before any
adjustment to the Series A Preferred Stock Conversion Price that also
may be required as a result of such Dilutive Issuance)), immediately
after such issuance or sale.
(vii) For purposes of any adjustment of the Conversion Price
pursuant to this Section 4(e), the following provisions shall be
applicable:
(A) Convertible Securities. If the Company grants any options,
warrants, convertible securities having rights to subscribe for or to
purchase shares of Common Stock, or any other securities convertible
into or exchangeable for Common Stock (collectively, "Convertible
Securities"), then (x) the maximum number of shares of Common Stock
issuable upon the exercise or conversion of such Convertible
Securities shall be deemed to have been issued and sold by the Company
on the date such Convertible Securities are granted or issued, and (y)
the "consideration per share" for such Convertible Securities shall
equal the consideration received by the Company for any such
Convertible Securities, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise or
conversion of all such Convertible Securities. Upon the expiration of
or the termination of any right to convert or exchange any Convertible
Securities, in each case without the exercise or conversion of such
Convertible Securities, the then effective Conversion Price with
respect to the Series A Preferred Stock or Series B Preferred Stock,
as applicable (if previously adjusted for such Convertible
Securities), shall be adjusted, at the time of such expiration or
termination, to the Conversion Price that would have been in effect
had the adjustment made upon grant or issuance of the Convertible
Securities been made upon the basis of the issuance or sale of only
those shares of Common Stock actually issued upon the exercise or
conversion of such Convertible Securities.
(B) Calculation of Consideration Received. If any Common Stock
or Convertible Securities are issued or granted, or deemed to have
been issued or granted, (x) for cash, then the aggregate consideration
received by the Company therefor shall be deemed to equal the gross
amount of cash received by the Company therefor, (y) for consideration
other than cash (and other than securities), then the aggregate
consideration received by the Company therefor shall be deemed to
equal the fair value of such consideration as of the date of receipt,
as determined by the Board of Directors of the Company, in good faith,
and reported to the holders of Convertible Preferred Stock in writing,
or (z) for consideration consisting of securities, then the
consideration received by the Company therefor shall be based upon the
average of the last reported sales
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<PAGE>
price of such securities on the Nasdaq Stock Market, or on any
national or regional securities exchange on which such securities are
listed or admitted to unlisted trading privileges, as reported for
each of the 10 consecutive trading days ending on the 10th trading
date prior to the Company's receipt of the securities, or (if such
securities are not so listed or admitted) the last reported sales
price reported by the National Association of Securities Dealers, Inc.
Automated Quotations, Inc., or (if such securities are not so listed
or quoted) at such price determined by the Board of Directors of the
Company, in good faith, and reported to the holders of Convertible
Preferred Stock in writing.
(C) Integrated Transactions. In case any Convertible
Securities are issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated
transaction in which no specific consideration is allocated to such
Convertible Securities by the parties thereto, the Convertible
Securities will be deemed to have been issued without consideration.
(D) Reacquired Shares. The Common Stock deemed to be
outstanding at any given time shall not include any shares owned or
held by or for the account of the Company or any subsidiary of the
Company.
(viii) Exempt Issues. Notwithstanding any other provision
hereof, no adjustment to the Conversion Price of the Series A Preferred
Stock or the Series B Preferred Stock shall be made pursuant to this
Section 4 on account of (A) the issuance and sale of 101,667 shares of
Series B Preferred Stock on October 18, 1999; or (B) the issuance of shares
of Common Stock (1) in respect of rights granted pursuant to Successories,
Inc.'s Stock Option Plan or Employee Stock Purchase Plan, each as currently
in effect or as amended with approval of the stockholders of the Company;
(2) in respect of stock options or warrants outstanding as of October 18,
1999; (3) upon the conversion of any shares of Convertible Preferred Stock;
or (4) pursuant to the 1999 Senior Management Bonus Plan in effect for the
Company's 1999 fiscal year.
(f) Minimal Adjustments. All calculations under this Section 4 shall
be made to the nearest cent or to the nearest one hundredth (1/100) of a share,
as the case may be. No adjustment in the Conversion Price need be made if such
adjustment would result in a change in the Conversion Price of less than $0.01.
Any adjustment of less than $0.01 that is not made shall be carried forward and
shall be made at the time of and together with any subsequent adjustment which,
on a cumulative basis, amounts to an adjustment of $0.01 or more in the
Conversion Price.
(g) No Impairment. The Company will not through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance
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<PAGE>
of any of the terms to be observed or performed hereunder by the Company, but
will at all times in good faith assist in the carrying out of all the provisions
of this Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of
Convertible Preferred Stock against impairment.
(h) Certificate as to Adjustments. Upon the occurrence of each
adjustment of the Conversion Price pursuant to this Section 4, the Company shall
prepare and furnish to each holder of Series A Preferred Stock and/or the Series
B Preferred Stock, as applicable, a certificate signed by the Chief Financial
Officer of the Company setting forth such adjustment and showing in detail the
facts upon which such adjustment is based.
(i) Notices of Record Date. In the event of any taking by the Company
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property or to
receive any other right, the Company shall mail to each holder of Convertible
Preferred Stock, at least 20 days prior to such record date, a notice specifying
the date on which any such record is to be taken for the purpose of such
dividend or distribution or right and the amount and character of such dividend,
distribution or right.
(j) Notices. Any notice required by the provisions of this Section 4
to be given to any holder of Convertible Preferred Stock shall be deemed given
if deposited in the United States mail, postage prepaid, and addressed to each
holder of record at such holder's address appearing on the Company's books.
(k) Reservation of Common Stock. The Company, at all times, shall
reserve and keep available, out of its authorized and unissued capital stock and
solely for the purpose of effecting the conversion of Convertible Preferred
Stock, such number of shares of Common Stock that is sufficient to effect the
conversion of all shares of Series A Preferred Stock and Series B Preferred
Stock from time to time outstanding. If necessary to comply with this Section
4(k), the Company shall increase the authorized amount of its Common Stock in
accordance with Illinois law.
5. Voting Rights.
(a) General. Each holder of a share of Series A Preferred Stock or
Series B Preferred Stock shall be entitled to notice of any shareholders'
meeting in accordance with the bylaws of the Company and shall vote with holders
of the Common Stock upon the election of directors and upon any other matter
submitted to a vote of shareholders, except those matters required by law to be
submitted to a class vote and except as otherwise set forth herein. The holder
of each share of Convertible Preferred Stock shall be entitled to that number of
votes equal to the number of shares of Common Stock into which each such share
of Convertible Preferred Stock could be converted on the record date for the
vote or consent of shareholders.
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Fractional votes shall not, however, be permitted and any fractional voting
rights resulting from the above formula (after aggregating all shares of
Convertible Preferred Stock held by each holder) shall be disregarded.
(b) Right to Elect Director. In addition to the voting rights set
forth in Section 5(a), the holders of a Majority of the Convertible Preferred
Stock, voting separately as a single class, shall be entitled to nominate and to
elect three (3) persons to the Board of Directors of the Company and to
designate the class of director (Class I, II or III) of each such person.
(c) Protective Provisions. In addition to any other class vote that
may be required by law or as provided herein, so long as any shares of Series A
Preferred Stock or Series B Preferred Stock are outstanding, the Company shall
not, without first obtaining the affirmative vote of the holders of a Majority
of the Convertible Preferred Stock then outstanding:
(i) effect any amendment to the Articles of Incorporation of
the Company that would change the authorized number of shares of Series A
Preferred Stock or Series B Preferred Stock, or the respective rights,
preferences and privileges thereof;
(ii) create any class or series of shares of capital stock
having dividend, liquidation or other rights or preferences equal or
superior to those of either the Series A Preferred Stock or the Series B
Preferred Stock;
(iii) increase to more than seven (7) the number of members that
shall constitute the entire Board of Directors of the Company; or
(iv) enter into any line of business that is not directly
related to sales of the Company's core motivational and self-improvement
products by direct marketing, through internet/e-commerce sales and through
franchised retail stores.
6. Preemptive Rights. In the event the Company proposes to issue
additional shares of Common Stock, Convertible Securities (other than
Convertible Securities described in Section 4(e)(viii)) or other capital stock
for sale, the Company first shall offer to sell such Common Stock, Convertible
Securities or other capital stock to the holders of the Convertible Preferred
Stock, on a pro rata basis (i.e., based on the number of shares of Common Stock
into which such shares of Convertible Preferred Stock are then convertible, plus
the number of shares of Common Stock issued as dividends pursuant to Section
2(b), relative to the total number of shares of Common Stock outstanding
computed on a fully diluted basis), at a price equal to the offering price of
such additional shares of Common Stock, Convertible Securities or other capital
stock. Any such shares not subscribed for by the holders of the Convertible
Preferred Stock within 10 days after receipt from the Company of the written
offer to sell may
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be sold by the Company to any other purchaser at a price not less than the price
offered to the holders of Convertible Preferred Stock.
7. No Reissuance of Convertible Preferred Stock. No shares of Series A
Preferred Stock or Series B Preferred Stock acquired by the Company by reason of
conversion or otherwise shall be reissued, and all such shares shall be
cancelled, retired and eliminated from the shares that the Company shall be
authorized to issue.
IN WITNESS WHEREOF, Successories, Inc. has caused this Certificate of
Designation to be duly executed by its President/COO, a duly authorized officer,
on October 15, 1999.
SUCCESSORIES, INC.
By: /s/ Gary J. Rovansek
---------------------------------
Name: Gary J. Rovansek
Title: President/COO
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