SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[X] Preliminary Proxy Statement [_] Confidential, For Use of the
[_] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14c-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
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>
SUCCESSORIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 21, 1999
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
Stonebridge Country Club, 2705 Stonebridge Boulevard, Aurora, Illinois 60504 on
Wednesday, July 21, 1999 at 10:00 A.M., Central Daylight Savings Time, for the
following purposes:
1. To elect: three (3) Class I directors, one (1) Class II director
and one(1) Class III director for the terms specified in the proxy
statement or until their successors are elected and qualified;
2. To ratify the appointment of Arthur Andersen LLP as independent
accountants for the fiscal year ending January 29, 2000;
3. To consider and act upon a proposal to amend the Company's Articles
of Incorporation to provide for the exculpation of the personal
liability of the Directors; and
4. To transact such other business as may properly come before the
meeting.
Shareholders of record as of the close of business June 3, 1999 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,
GREGORY J. NOWAK
Secretary
Aurora, Illinois
June 7, 1999
2
<PAGE>
SUCCESSORIES, INC.
2520 DIEHL ROAD
AURORA, ILLINOIS 60504
630-820-7200
----------------------------------------
PROXY STATEMENT
----------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 21, 1999
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 Wednesday, July 21, 1999 at 10:00 A.M., Central
Daylight Savings Time, and any adjournment thereof ("Annual Meeting"), at
Stonebridge Country Club, 2705 Stonebridge Boulevard, Aurora, Illinois 60504.
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., 2520 Diehl Road, Aurora,
Illinois 60504; or it may be done personally upon oral or written request at the
Annual Meeting.
This proxy statement will be first mailed or delivered to shareholders
on or about June 7, 1999.
RECORD DATE; VOTING SECURITIES OUTSTANDING
The close of business on June 3, 1999 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 5, 1999, the Company had outstanding voting securities
consisting of 6,922,988 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 a 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 5, 1999.
1
<PAGE>
NUMBER OF SHARES
AND NATURE OF
BENEFICIAL
BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS
- ------------------------------------ -------------------- ----------------
Arnold M. Anderson 1,010,228(2) 14.0%
Corbin & Company 1,135,300(3) 16.4
State of Wisconsin Investment Board 427,900(4) 6.2
(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 297,000 shares subject to immediately exercisable options and
warrants; 115,290 shares held by Mary Margaret Anderson (his wife); 225,000
shares held in trust by Mary Margaret Anderson as trustee, as to which Mr.
Anderson has sole voting and investment power; 1,500 shares held in trust by
Mr. Anderson as trustee, as to which Mr. Anderson has sole voting and
investment power; and 2,400 shares held in the name of his son. Mr.
Anderson's address is c/o Successories, Inc., 2520 Diehl Road, Aurora,
Illinois 60504.
(3) According to a Schedule 13G filed with the Securities and Exchange
Commission (the "SEC"), dated February 10, 1999. Corbin & Company shares
voting and dispositive power of the shares with its advisory clients. The
address of Corbin & Company is 6300 Ridglea Place, Suite 1111, Fort Worth,
Texas 76116.
(4) According to a Schedule 13G/A filed with the SEC, dated January 16, 1999.
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 5, 1999, information with
respect to the shares of Common Stock beneficially owned by: (i) each director
and nominee; (ii) the Chief Executive Officer; (iii) Mr. James M. Beltrame, who
was replaced as President, Chief Executive Officer and Director of the Company
in June 1998; (iv) the other most highly compensated executive officers; and (v)
all directors and executive officers as a group.
NUMBER OF
SHARES AND
NATURE OF
BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- -------------------------------------------- ------------ --------
Arnold M. Anderson.......................... 1,010,228(2) 14.0%
James M. Beltrame........................... 278,971(3) 3.9
Seamas T. Coyle............................. 26,230(4) *
Timothy C. Dillon........................... 22,357(5) *
John F. Halpin.............................. 12,857(6) *
Steven D. Kuptsis........................... 12,018(7) *
C. Joseph LaBonte........................... 79,246(8) 1.1
Steven B. Larrick........................... 60,700(9) *
Michael H. McKee............................ 92,592(10) 1.3
R. Scott Morrison, Jr....................... 481,294(11) 7.0
2
<PAGE>
NUMBER OF
SHARES AND
NATURE OF
BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS
- -------------------------------------------- ------------ --------
Gregory J. Nowak............................ -- *
Mervyn C. Phillips, Jr...................... 41,200(12) *
Gary J. Rovansek............................ 12,352 *
Guy E. Snyder............................... 33,967(13) *
Kenneth Taylor.............................. 197 *
All of the directors and executive
officers as a group (15 persons)......... 2,164,209(14) 28.2
- ------------------
* Percentage represents less than 1% of the total shares of Common Stock
outstanding as of May 5, 1999.
(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 238,000 shares subject to immediately exercisable options and
warrants.
(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 25,100 shares subject to immediately exercisable options and
warrants.
(5) Represents shares subject to immediately exercisable options.
(6) Includes 10,857 shares subject to immediately exercisable options.
(7) Includes 5,000 shares subject to immediately exercisable options.
(8) Includes 5,000 shares held by the C. Joseph LaBonte Retirement Trust; and
30,000 shares subject to immediately exercisable options and warrants.
(9) Includes 9,000 shares held by Dorothy F. Larrick (his wife); 6,000 shares
in aggregate held in trust for the benefit of each of Cathy, Natalie,
Elizabeth and James Larrick (his children); 2,000 shares held in an
individual retirement account; and 27,000 shares subject to immediately
exercisable options and warrants
(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 57,500 shares subject to immediately
exercisable options.
(11) Includes 341,294 shares held in trust by Mr. Morrison as trustee, as to
which Mr. Morrison has sole voting and investment power; 65,000 shares held
by Mr. Morrison as trustee for a family limited partnership; and 75,000
shares held by Norma A. Morrison (his wife). Mr. Morrison's address is c/o
Morrison Properties, 243 N.E. Fifth Avenue, Delray Beach, Florida 33483.
(12) Includes 17,000 shares held by Five M's Ltd. Money Purchase Pension
Plan, of which Mr. Phillips is trustee; 1,200 shares held by Mr. Phillips
as trustee of the Mervyn C. Phillips Revocable Trust; and 23,000 shares
subject to immediately exercisable options. Excludes 9,500 shares held by
Mr. Phillips as trustee under the will of M.C. Phillips, III for the
benefit of a family trust as to which Mr. Phillips has voting power but of
which he disclaims beneficial ownership.
(13) Includes 8,667 shares held by Guy E. Snyder; includes 300 shares held by
Linda G. Snyder (his wife); 300 shares held by National Financial Services
Corporation; custodian for Linda G. Snyder Individual Retirement Account;
300 shares held by National Financial Services Corporation, custodian for
Guy E. Snyder Individual Retirement Account; and 24,400 shares subject to
immediately exercisable options and warrants.
(14) Includes 760,214 shares subject to options and warrants exercisable within
sixty days; and 26,218 shares as to which voting and/or investment powers
are shared.
3
<PAGE>
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 nominees for Directors named
below. The numbers of Class I, II and III Directors are presently fixed at four,
three and three, respectively. 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 identity of each such Director and his term is indicated below.
CLASS I
(TERM EXPIRING IN YEAR 2002)
Seamas T. Coyle
Steven B. Larrick
Guy E. Snyder
CLASS II
(TERM EXPIRING IN YEAR 2000)
R. Scott Morrison, Jr.
CLASS III
(TERM EXPIRING IN YEAR 2001)
Gary J. Rovansek
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.
4
<PAGE>
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 PRINCIPAL OCCUPATION FOR
NOMINEES FOR DIRECTOR AGE EXPIRES SINCE LAST FIVE YEARS
- ------------------------------------- ------- ------------ ---------- -----------------------------------------
<S> <C> <C> <C> <C>
Guy E. Snyder(1)(2).................. 45 2002 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)(4).............. 52 2002 1996 Consultant since January 1999; prior
thereto, President of Power Hospital
Fitness Group from May 1998 until
January 1999; prior thereto, Chairman and
Chief Executive Officer of Chernin's
Shoes, Inc. from 1993 until December
1997; prior thereto, served in various
management level positions with
Chernin's Shoes, Inc. since 1973.
Seamas T. Coyle(1)(2)................ 47 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.
Gary J. Rovansek..................... 56 2001 1998 President and Chief Operating Officer
for the Company since November 1998;
prior thereto, President and Director of
J.C. Whitney & Co.; President of the
Horticultural Division of Foster &
Gallagher, Inc. since 1993; prior thereto,
President of Reliable Corporation since
1988.
R. Scott Morrison, Jr................ 58 2000 1999 Owner, operator and investor in various
hotel products and real estate entities
since 1988. He is a co-founder of and an
investor in the Extended Stay America
national hotel chain.
5
<PAGE>
TERM DIRECTOR PRINCIPAL OCCUPATION FOR
CONTINUING DIRECTORS AGE EXPIRES SINCE LAST FIVE YEARS
- ------------------------------------- ------- ------------ ---------- -----------------------------------------
Arnold M. Anderson(1)................ 54 2001 1990 Chairman of the Board, Director and Chief
Executive Officer since June 1998; prior
thereto, Chairman of the Board and
Director for the Company since May 1997;
prior thereto, Chief Executive Officer,
President, Chairman of the Board and
Director for the Company and its
predecessor (Primus) since October 1990;
prior thereto, Chairman and President of
the predecessors to the Company's
subsidiaries.
Michael H. McKee..................... 45 2001 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.
C. Joseph LaBonte(3)................. 59 2000 1994 Chairman of The Vantage Group, an
investment and financial advisory firm
formed in 1983; prior thereto, President,
Chief Executive Officer and Director of
Jenny Craig International from April
1994 to October 1997; 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 Hampton Products
International.
Mervyn C. Phillips, Jr.(2)(3)(4)..... 64 2000 1990 Principal of JH Chapman Group, LLC, a
privately held investment company. Mr.
Phillips is also a director of Fastlane
International.
</TABLE>
- ------------------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation and Stock Option Committee.
(4) Member of the Director Nominating Committee.
The Board of Directors held seven meetings during the fiscal year ended
January 30, 1999. 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, a standing Compensation and Stock Option Committee and
a standing Director Nominating Committee.
6
<PAGE>
The Audit Committee held two meetings during the fiscal year ended
January 30, 1999. 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 one meeting during the
fiscal year ended January 30, 1999. This Committee is responsible for annually
reviewing the salaries and bonuses of all executive officers and administering
the Company's Stock Option Plan. Directors LaBonte, Phillips and Larrick are
members of this Committee.
The Director Nominating Committee held one meeting during the fiscal
year ended January 30, 1999. This Committee is responsible for reviewing
candidates for the Board of Directors. Directors Anderson, Larrick and Phillips
are members of this Committee. The Committee will consider nominees recommended
by security holders provided such recommendations are submitted to the Committee
in writing.
COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT
SUMMARY COMPENSATION TABLE
The Summary Compensation Table below includes, for each of the fiscal
years ended January 30, 1999, January 31, 1998 and February 1, 1997, individual
compensation for services to the Company and its subsidiaries paid or awarded
to, or earned by: (i) the Chief Executive Officer of the Company at January 30,
1999; (ii) the four most highly compensated executive officers of the Company;
and (iii) James M. Beltrame, who was replaced as President, Chief Executive
Officer and Director of the Company in June 1998 (collectively, the "Named
Officers").
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
--------------------------------------------- ------------
OTHER ANNUAL SECURITIES
NAME AND PRINCIPAL SALARY BONUS COMPENSATION UNDERLYING ALL OTHER
POSITIONS YEAR $ $ $ OPTIONS(#) COMPENSATION
$
- ---------------------------- ------------ ----------- -------------- ----------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Arnold M. Anderson.......... 1999 203,846 0 0 0 730(1)
Chairman of the Board, 1998 192,308 50,000 0 0 4,600(1)
Director and Chief 1997 193,827 50,000 0 110,000(2) 0
Executive Officer
James M. Beltrame........... 1999(3) 92,308 0 0 0 2,671(4)
Former President, Chief 1998 185,096 50,000 0 50,000(5) 0
Executive Officer and 1997 166,827 50,000 0 150,000(6) 0
Director
Michael H. McKee............ 1999 150,000 10,000(7) 0 0 1,177(8)
Senior Vice President, 1998 144,231 25,000 0 50,000(9) 0
Creative Director and 1997 141,827 12,500 0 12,500(10) 0
Director
Steven D. Kuptsis........... 1999 150,000 10,000(11) 0 15,000(12) 438(8)
Senior Vice President, 1998(13) 56,539 0 0 25,000(14) 0
Chief Administrative
Officer and Chief
Financial Officer
John F. Halpin.............. 1999 130,000 10,000(11) 0 15,000(12) 1,510(8)
Senior Vice President, 1998 115,192 0 0 7,142(15) 0
Direct Marketing 1997(16) 41,135 0 0 20,000(17) 0
Division
7
<PAGE>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
--------------------------------------------- ------------
OTHER ANNUAL SECURITIES
NAME AND PRINCIPAL SALARY BONUS COMPENSATION UNDERLYING ALL OTHER
POSITIONS YEAR $ $ $ OPTIONS(#) COMPENSATION
$
- ---------------------------- ------------ ----------- -------------- ----------------- ------------- --------------
Robert P. Hayes............. 1999(18) 122,308 9,100(10) 0 40,000(19) 0
Senior Vice President,
Merchandising
</TABLE>
- ------------------
(1) Represents club membership and related fees.
(2) 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 are immediately exercisable and expire on November 10, 2001.
(3) Mr. Beltrame was replaced as President, Chief Executive Officer and
Director of the Company in June 1998.
(4) Represents club membership and related fees, and matching contributions to
the Company's 401(k) plan made by the Company for the benefit of the
executive officer.
(5) Represents options granted May 20, 1997 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 May 20, 1998 and
expiring May 20, 2007.
(6) 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 expiring 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 separate and aside from the Company's Stock Option Plan;
such options are immediately exercisable, and expire on November 10, 2001.
(7) In lieu of an increase in his base salary, Mr. McKee received a bonus.
(8) Represents matching contributions to the Company's 401(k) plan made by the
Company for the benefit of the executive officer.
(9) Represents options granted May 20, 1997 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 May 20, 1998 and
expiring May 20, 2007.
(10) 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.
(11) Sign-on bonus - For Messrs. Kuptsis and Halpin sign-on bonus relates to
fiscal years ended 1998 and 1997, respectively.
(12) Represents options granted October 1, 1998 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 October 1, 1999,
and expire on October 1, 2008.
(13) For the period since Mr. Kuptsis became employed by the Company on
September 17, 1997.
(14) Represents options granted September 17, 1997 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
September 17, 1998, and expire on September 17, 2007.
(15) Represents options granted June 2, 1997 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 2, 1998, and
expire on June 2, 2007.
8
<PAGE>
(16) For the period since Mr. Halpin became employed by the Company on
September 25, 1996.
(17) Represents options granted September 25, 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
September 25, 1997, and expire on September 25, 2006.
(18) For the period since Mr. Hayes became employed by the Company on April 9,
1998. Mr. Hayes resigned from the Company on April 29, 1999.
(19) Represents 25,000 options granted April 9, 1998 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
April 9, 1999, and expire on April 9, 2008. Also, represents 15,000 options
granted October 1, 1998 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 October 1, 1999, and expire on
October 1, 2008.
The tables below set forth certain information with respect to options held
by the Named Executive Officers.
OPTIONS GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED RATES
OF STOCK PRICE
APPRECIATION FOR
PERCENT OF TOTAL OPTION TERM
NUMBER OF OPTIONS ----------------------
SECURITIES GRANTED TO EXERCISE OF
UNDERLYING EMPLOYEES IN BASE PRICE EXPIRATION
OPTIONS FISCAL YEAR (%) ($/SH.) DATE 5% 10%
---------- ---------------- ----------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Arnold M. Anderson -- -- -- -- -- --
James M. Beltrame -- -- -- -- -- --
Michael H. McKee -- -- -- -- -- --
Steven D. Kuptsis 15,000 6.5% 2.875 10/01/08 27,121 68,730
John F. Halpin 15,000 6.5% 2.875 10/01/08 27,121 68,730
Robert P. Hayes 25,000 10.9% 6.250 04/09/08 98,265 249,022
15,000 6.5% 2.875 10/01/08 27,121 68,730
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTIONS/SAR VALUE
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS(#) OPTIONS/SARS($)
SHARES AT JANUARY 30, 1999 AT JANUARY 30, 1999(1)
ACQUIRED ON VALUE ------------------------------ ------------------------------
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Arnold M. Anderson -- -- 297,000 4,000 -- --
James H. Beltrame -- -- 238,000 70,000 -- --
Michael H. McKee -- -- 57,500 45,000 -- 1,250
Steven D. Kuptsis -- -- 5,000 45,000 -- 1,250
John F. Halpin -- -- 10,857 41,285 -- 1,250
Robert P. Hayes -- -- -- 40,000 -- --
</TABLE>
- ------------------
(1) Value is based on the difference between the exercise price and fair market
value at January 29, 1999, the last day during the fiscal year for which
market prices are available ($2.75 per share as quoted on the Nasdaq
National Market), multiplied by the number of shares underlying the option.
9
<PAGE>
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 received 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. Effective December 6, 1998, Mr.
Anderson's base salary increased to $225,000.
The base salary of Gary J. Rovansek was established pursuant to an
employment agreement dated October 29, 1998 whereby Mr. Rovansek receives a
minimum base salary of $225,000 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 Rovansek 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.
BONUS COMPENSATION
Annual bonuses for executive officers of the Company, excluding Messrs.
Anderson and Rovansek, are determined by the Compensation and Stock Option
Committee based on the recommendation of Messrs. Anderson and Rovansek and are
awarded on a discretionary basis by the Compensation and Stock Option Committee.
For the fiscal year ended January 30, 1999, 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.
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 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 September 25,
1996, Mr. Halpin was granted options to purchase 20,000 shares of Common Stock
pursuant to the Company's Option Plan at an exercise price of $5.625 per share;
such options vest and become exercisable in five cumulative annual increments of
20% of the initial grant, commencing September 25, 1997 and expire on September
25, 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 are immediately exercisable 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
10
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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.
On May 20, 1997, Messrs. Beltrame and McKee were granted options to
purchase 50,000 shares of Common Stock each pursuant to the Option Plan at an
exercise price of $5.75 per share; such options vest and become exercisable in
five cumulative annual increments of 20% of the initial grant, commencing May
20, 1998, and expire May 20, 2007. On June 2, 1997, Mr. Halpin was granted
options to purchase 7,142 shares of Common Stock pursuant to the Option Plan at
an exercise price of $5.75 per share; such options vest and become exercisable
in five cumulative annual increments of 20% of the initial grant, commencing
June 2, 1998, and expire June 2, 2007.
On April 9, 1998, Mr. Hayes was granted options to purchase 25,000
shares of Common Stock pursuant to the Option Plan at an exercise price of $6.25
per share; such options vest and become exercisable in five cumulative annual
increments of 20% of the initial grant, commencing April 9, 1999, and expire
April 9, 2008. On October 1, 1998, each of Messrs. Halpin, Hayes and Kuptsis was
granted an option to purchase 15,000 shares of Common Stock pursuant to the
Option Plan at an exercise price of $2.875 per share; such options vest and
become exercisable in five cumulative annual increments of 20% of the initial
grant, commencing October 1, 1999, and expire October 1, 2008.
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 non-qualified options to non-employee directors is in
addition to cash meeting fees paid by the Company to such directors, thereby
tying such directors' compensation to the performance of the Company's Common
Stock.
Compensation Committee
C. Joseph LaBonte
Steven B. Larrick
Mervyn C. Phillips, Jr.
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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
[graph]
04/28/95 02/03/96 02/01/97 01/31/98 01/30/99
-------- -------- -------- -------- --------
SUCCESSORIES, INC. 100.00 101.67 93.33 81.67 36.67
NASDAQ STOCK MARKET 100.00 126.39 165.66 195.47 305.85
NASDAQ RETAIL TRADE 100.00 110.83 136.32 159.07 194.48
STOCKS
Assumes $100 invested on April 28, 1995 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 Stock Option Committee was combined with the
Compensation Committee to form the Compensation and Stock Option Committee.
Messrs. LaBonte, 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 Rovansek have and will confer with the Committee and make
recommendations for the salaries and bonuses of the executive officers.
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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 on the date of the
Company's Annual Meeting of Shareholders pursuant to the Company's Option Plan.
Such options vest fully upon the first anniversary of the date of grant,
pursuant to the terms of individual option agreements. 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. Effective December 6, 1998, Mr. Anderson's base salary increased to
$225,000. 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 no bonus for
the fiscal year ended January 30, 1999.
In October 1998, the Company entered into an employment agreement with
Gary J. Rovansek which provides that he will receive a minimum base salary of
$225,000 per year annually for three years plus the opportunity to earn a bonus
each year. In addition, the employment agreement provides that within 30 days
after commencement of the Company's fiscal years, Mr. Rovansek 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. Rovansek received no bonus
for the fiscal year ended January 30, 1999.
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 lieu of an increase in Mr. McKee's base salary, he received a
$10,000 bonus in 1998. 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 no bonus for the fiscal year ended January 30, 1999.
Each employment agreement provides that unless either party, at least
one year prior to the conclusion of the term of employment, provides written
notice to the other party that it wishes not to renew the employment agreement,
then the term of employment is automatically extended for one additional year.
Each employment agreement provides that there is no limit on the number of
extensions of the term of employment. Under the terms of each agreement, if the
Company terminates the employment of the officer, other than for "just cause,"
or if the officer terminates his employment for "good reason," the Company shall
pay the officer the remainder of his base salary during the remainder of his
term of employment, or for a period of one year, whichever is greater. "Just
cause" includes (a) an act of fraud or dishonesty by the employee; (b) a felony
committed by the employee; and (c) a material breach by the employee of his
employment agreement. "Good reason" includes (a) the assignment to the employee
of duties inconsistent with his position; (b) a reduction in his minimum base
salary or benefits or breach of the Company's obligations under the employment
agreement; (c) a change in control of the Company; (d) subsequent to a change in
control, the failure by the Company to obtain from its successor the assumption
of the employment agreement; and (e) subsequent to a change in control, any
purported termination of the officer's employment not effected pursuant to the
notice provisions of the agreement.
TERMINATION AGREEMENT
In September 1997, the Company entered into a termination agreement
with Steven D. Kuptsis, which was amended in August 1998 and provides that Mr.
Kuptsis will receive a cash payment equal to three quarters (3/4) of his base
salary if his employment is terminated by the Company other than for "just
cause." Mr. Kuptsis is also entitled to
13
<PAGE>
receive such payment in the event that he terminates his employment due to "just
cause to resign" following a change in control of the Company. The term "just
cause" is defined as the termination of the employment of Mr. Kuptsis on account
of a determination by an independent arbitrator that Mr. Kuptsis: (i) committed
an act of proven dishonesty or gross negligence in the performance of his duties
or obligations thereunder; or (ii) committed a material act of misfeasance or
malfeasance, disloyalty or breach of trust with respect to the Company or its
affiliates. Under the terms of the agreement "just cause to resign" means that
Mr. Kuptsis may resign his position following a change in (i) the ownership of
the Company, (ii) the effective control of the Company, or (iii) the ownership
of a substantial portion of the assets of the Company, if he determines that
continued employment with the Company would not be in his best professional or
career interests.
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. During the fiscal year ended January 30, 1999, the Company incurred
professional fees for services provided by Vedder, Price, Kaufman & Kammholz, a
law firm of which Guy E. Snyder, who is a Director of the Company, is a partner.
The Company also paid consulting fees of $179,000 to the accounting firm of
Coyle, Fanning & Company, of which Seamas T. Coyle, who is a Director of the
Company, is a partner.
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 January 30, 1999.
All of these filing requirements were satisfied, except: Seamas T.
Coyle, Director of the Company, filed one late report covering one transaction;
Robert P. Hayes, Vice President of the Company, filed one late report covering
his initial ownership; R. Scott Morrison, Jr., Director of the Company, filed a
late report covering his initial ownership and a late report covering one
transaction; Gregory J. Nowak, Vice President, Secretary and General Counsel of
the Company, filed one late report covering his initial ownership; and Kenneth
Taylor, Vice President of the Company, filed one late report covering his
initial ownership.
ITEM 2
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 years ended February 1, 1997, January
31, 1998 and January 30, 1999 and appointed Arthur Andersen as independent
accountants for the Company to audit its consolidated financial statements for
the fiscal year ending January 29, 2000 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.
14
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS
VOTE FOR THE APPROVAL OF THE APPOINTMENT OF ARTHUR ANDERSEN
AS INDEPENDENT ACCOUNTANTS.
15
<PAGE>
ITEM 3
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION TO PROVIDE FOR EXCULPATION
OF THE PERSONAL LIABILITY OF THE COMPANY'S DIRECTORS
The Board of Directors has adopted, and is recommending to the
shareholders for their approval at the Annual Meeting, a resolution to amend the
Company's Articles of Incorporation to eliminate, to the extent allowed under
Section 2.10(b)(3) of the Act, the personal liability of the Directors of the
Company. The applicable text of the Board's resolution is as follows:
"RESOLVED, that the Articles of Incorporation be amended by, pursuant
to Section 2.10(b)(3) of the Illinois Business Corporation Act of 1983,
adding Article Six as follows:
ARTICLE SIX
A director of the corporation shall not be personally liable
to the corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii)
under Section 8.64 of the Illinois Business Corporation Act of 1983, or
(iv) for any transaction from which the director derived an improper
personal benefit. If the Illinois Business Corporation Act of 1983 is
amended after approval by the shareholders of this article to authorize
corporate action further eliminating or limiting the personal liability
of the directors, then the liability of a director of the corporation
shall be eliminated or limited to the fullest extent permitted by the
Illinois Business Corporation Act of 1983, as so amended.
Any repeal or modification of the foregoing paragraph by the
shareholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of
such repeal or modification."
This amendment will require the Company to indemnify each of the
directors of the Company to the fullest extent under Illinois law for losses or
expenses sustained by them by reason of their positions with the Company. The
Board of Directors, individual members of which will personally benefit from
adoption of the proposed amendment, strongly believes that the proposed
amendment will help the Company remain competitive in its ability to attract
qualified directors and officers and will positively affect the ability of the
Directors to make the best decisions of which they are capable.
Proxies will be voted for or against approval of this amendment to the
Articles of Incorporation of the Company 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 outstanding. If approved by the shareholders, the
amendment to the Articles of Incorporation will become effective upon filing
with the Secretary of State of the State of Illinois Articles of Amendment to
the Company's Articles of Incorporation, which filing is expected to take place
shortly after the Annual Meeting. If this proposal is not approved by the
shareholders, the Articles of Amendment will not be filed with respect to this
proposal.
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL TO AMEND
THE COMPANY'S ARTICLES OF INCORPORATION TO PROVIDE FOR
INDEMNIFICATION OF THE COMPANY'S DIRECTORS IS IN THE BEST
INTERESTS OF THE COMPANY AND RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENT
16
<PAGE>
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 2000 must be received by
the Company on or before April 28, 2000.
Additionally, if a proponent of a shareholder proposal at the Annual
Meeting of Shareholders to be held in 2000 fails to provide notice of the intent
to make such proposal by personal delivery or mail to the Secretary of the
Company on or before April 23, 2000 (or by an earlier or later date, if such
date is established by amendment to the Company's By-laws), then any proxy
solicited by management may confer discretionary authority to vote on such
proposal.
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 amendment
to the Company's Articles of Incorporation 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 amendment to
the Articles of Incorporation 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,
Gregory J. Nowak
Secretary
Aurora, Illinois
June 7, 1999
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<PAGE>
PROXY
SUCCESSORIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 21, 1999
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, Gary J. Rovansek and Gregory J.
Nowak, 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 Wednesday, July 21, 1999 at 10:00
A.M., Central Daylight Savings Time, and at any adjournments thereof, at
Stonebridge Country Club, 2705 Stonebridge Boulevard, Aurora, Illinois 60504.
1. The election of the following Directors: Class I: Seamas T. Coyle, Steven B.
Larrick and Guy E. Snyder; Class II: R. Scott Morrison, Jr.; and Class III:
Gary J. Rovansek.
|_| FOR ALL NOMINEES EXCEPT NOMINEE(S) WRITTEN IN SPACE BELOW:
- --------------------------------------------------------------------------------
|_| WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
2. The proposal to ratify the appointment of Arthur Andersen LLP as independent
accountants for the fiscal year ending January 29, 2000.
|_| FOR |_| AGAINST |_| ABSTAIN
3. The proposal to amend the Company's Articles of Incorporation to provide for
the exculpation of the personal liability of the Directors.
|_| FOR |_| AGAINST |_| ABSTAIN
4. As such proxies may in their discretion determine upon such other matters as
may properly come before the meeting.
|_| FOR |_| AGAINST |_| ABSTAIN
I plan to attend the meeting. |_|
<PAGE>
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
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.
________________________________________
Signature
________________________________________
Signature if held jointly
DATED___________________________________
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.
