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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
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THE SOURCE INFORMATION MANAGEMENT COMPANY
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(Name of Issuer)
COMMON STOCK, $0.01 par value
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(Title of Class of Securities)
836151209
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(CUSIP Number)
S. Leslie Flegel
The Source Information Management Company
11644 Lilburn Park Road
St. Louis, Missouri 63146
(314) 995-9040
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(Name, address and telephone number of person
authorized to receive notices and communications)
With a copy to:
John L. Gillis, Jr., Esq.
Armstrong Teasdale LLP
One Metropolitan Square, Suite 2600
St. Louis, Missouri 63102
January 7, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
/ /.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 9 Pages
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13D
CUSIP No. 836151209 Page 2 of 9 Pages
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1 Name of Reporting Persons/
I.R.S. Identification Nos. of Above Person (Entities Only)
S. Leslie Flegel SSN: ###-##-####
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2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X]
(b) [ ]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
Not applicable
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5 Check if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e) [ ]
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6 Citizenship or Place of Organization
USA
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7 Sole Voting Power
Number of
0
Shares -----------------------------------------------------------------
8 Shared Voting Power
Beneficially
7,615,844
Owned by Each -----------------------------------------------------------------
9 Sole Dispositive Power
Reporting
1,312,773
Person -----------------------------------------------------------------
10 Shared Dispositive Power
With
0
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
7,615,844
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12 Check if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) [ ]
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13 Percent of Class Represented by Amount in Row (11)
65.0%
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14 Type of Reporting Person (See Instructions)
IN
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13D
CUSIP No. 836151209 Page 3 of 9 Pages
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1 Name of Reporting Persons/I.R.S. Identification Nos. of Above Persons
(Entities Only)
William H. Lee, Jr. SSN: ###-##-####
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2 Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [X]
(b) [ ]
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3 SEC Use Only
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4 Source of Funds (See Instructions)
Not applicable
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5 Check if Disclosure of Legal Proceedings is Required Pursuant
to Item 2(d) or 2(e) [ ]
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6 Citizenship or Place of Organization
USA
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7 Sole Voting Power
0
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8 Shared Voting Power
Number of 4,523,688
Shares -----------------------------------------------------------------
Beneficially 9 Sole Dispositive Power
Owned by
Each 909,145
Reporting -----------------------------------------------------------------
Person With 10 Shared Dispositive Power
0
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
4,523,688
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12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
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13 Percent of Class Represented by Amount in Row (11)
38.9%
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14 Type of Reporting Person (See Instructions)
IN
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CUSIP No. 836151209 13D Page 4 of 9 Pages
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ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to shares of common stock, $.01 par value per share
(the "Common Stock"), of The Source Information Management Company, a Missouri
corporation (the "Issuer"). The address of the principal executive office of the
Issuer is 11644 Lilburn Park Road, St. Louis, Missouri 63146.
ITEM 2. IDENTITY AND BACKGROUND
S. Leslie Flegel, an individual and US citizen ("Flegel"), is filing this
Schedule 13D on behalf of himself and William H. Lee, Jr., ("Lee") subject to
the Joint Filing Agreement referred to in the next sentence. As required by Rule
13d-1(k)(1), Exhibit 1 to this Schedule 13D contains the Joint Filing Agreement
entered into by each of the persons filing this Joint Disclosure Statement on
Schedule 13D.
Flegel is the Chairman and CEO of the Issuer. Flegel's business address, and the
address of his employer, is 11644 Lilburn Park Road, St. Louis, Missouri 63146.
Lee is the Chief Operating Officer and Vice Chairman of the Issuer. Lee's
business address, and the address of his employer, is 711 Gallimore Dairy Road,
High Point, North Carolina 27265.
During the past five years, neither Flegel nor Lee has been (i) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, United States federal or state securities
laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On January 7, 1999, certain shareholders of the Issuer (the "Conversion
Shareholders") entered into a Conversion Voting Agreement with Jonathan J.
Ledecky ("Ledecky"), James R. Gillis ("Gillis") and Monte Weiner ("Weiner")
(Ledecky, Gillis and Weiner collectively, the "U.S. Marketing Shareholders")
(the "Conversion Voting Agreement"), whereby the Conversion Shareholders granted
Flegel and Lee proxies to vote their shares of Common Stock at the next duly
called special shareholders meeting of the Issuer in favor of the conversion of
the Class A Convertible Preferred Stock, par value $.01 per share, of the Issuer
(the "Preferred Stock") held by the U.S. Marketing Shareholders into Common
Stock. The Conversion Shareholders are named in the Conversion Voting Agreement
and include Flegel and Lee. No cash or other consideration was paid by Flegel or
Lee in respect of the Conversion Voting Agreement. The Conversion Voting
Agreement will terminate upon the earlier of the approval of the conversion of
the Preferred Stock by the holders of a majority of the outstanding shares of
Common Stock (disregarding any shares of Common Stock held by the U.S. Marketing
Shareholders) or the conversion of the Preferred Stock into demand notes
pursuant to the terms of the Certificate of Designation of the Preferred Stock.
ITEM 4. PURPOSE OF TRANSACTION
The information set forth in Item 3 is incorporated herein by reference.
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CUSIP No. 836151209 13D Page 5 of 9 Pages
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On January 7, 1999, the Issuer, Source-U.S. Marketing Services, Inc., a
subsidiary of the Issuer ("Sub"), U.S. Marketing Services, Inc. ("U.S.
Marketing"), and U.S. Marketing Shareholders entered into an Agreement and Plan
of Merger (the "Merger Agreement"), whereby U.S. Marketing was merged with and
into Sub. Pursuant to the Merger Agreement, each share of U.S. Marketing was
converted into a right to receive .3626 shares of Common Stock and .2772 shares
of Preferred Stock. As a result of the merger, the separate existence of U.S.
Marketing ceased to exist and Sub was the surviving corporation. Also as a
result of the merger, Ledecky, Gillis and Weiner received 1,779,383, 73,668, and
73,668 shares of Common Stock, respectively, and 1,360,617, 56,332 and 56,322
shares of Preferred Stock, respectively.
Pursuant to the Certificate of Designation of the Preferred Stock, each share of
Preferred Stock will automatically convert into an equal number of shares of
Common Stock upon receipt of the approval of the holders of a majority of the
outstanding shares of Common Stock (disregarding any shares of Common Stock held
by the U.S. Marketing Shareholders) of the conversion; if shareholder approval
is not received on or before June 30, 1999, the shares of Preferred Stock will
be convertible, at the option of the holders, into demand debt of the Issuer
aggregating $11,388,462.
In connection with the Merger Agreement, Flegel and Ledecky entered into a
voting agreement ("Voting Agreement") whereby Ledecky agreed to vote 1,779,383
shares of Common Stock held by him and 1,360,617 shares of Common Stock issuable
upon conversion of the 1,360,000 shares Preferred Stock held by him in the same
manner as Flegel on matters pertaining to the election of directors of the
Issuer; the ratification of the Issuer's auditors; composition of senior
management; financings; stock bonus, option or incentive plans or programs for
employees and consultants of the Issuer and amendments thereto; the amendment of
the Articles of Incorporation of the Issuer to increase the authorized capital
of the Issuer; and similar matters pertaining to the day-to-day operations of
the Issuer. The Voting Agreement specifically excludes matters pertaining to
fundamental changes in the Issuer, including, but not limited to, mergers,
acquisitions requiring shareholder approval, tender offers, sales of all or
substantially all of the assets of the Issuer, changes in control of the Issuer,
and the issuance of capital stock of the Issuer requiring shareholder approval.
Ledecky granted Flegel a proxy to vote his shares in accordance with the terms
of the Voting Agreement. The Voting Agreement will terminate upon the earlier of
(a) the second anniversary of the Voting Agreement, (b) Ledecky beneficially
owning less than ten percent of the issued and outstanding capital stock of the
Issuer, or (c) the removal or resignation of Flegel from either of his positions
as Chief Executive Officer and as Chairman of the Board of Directors of the
Issuer.
In connection with the Merger Agreement, the Issuer and the U.S. Marketing
Shareholders entered into a Registration Rights Agreement dated as of January 7,
1999 (the "Registration Rights Agreement") whereby the U.S. Marketing
Shareholders agree not to transfer their shares of Common Stock (including any
shares of Common Stock issuable upon conversion of the Preferred Stock) for a
period of one year from the date of the Registration Rights Agreement without
the consent of the Issuer, except under certain circumstances, and the U.S.
Marketing Shareholders have the right to require the registration of their
shares of Common Stock (including any shares of Common Stock issuable upon
conversion of the Preferred Stock) under the Securities Act of 1933, as amended,
for resale under certain circumstances.
Except as described herein, neither Flegel nor Lee has any present plans or
proposals which relate to or would result in (i) the acquisition by any person
of additional securities of the Issuer, or the disposition of securities of the
Issuer; (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(iii) a sale or transfer of a material amount of
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CUSIP No. 836151209 13D Page 6 of 9 Pages
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assets of the Issuer or its subsidiaries; (iv) any change in the present Board
of Directors or management of the Issuer, including any plans or proposals to
change the number of term of the directors or to fill any vacancies on the
Board; (v) any material change in the present capitalization or dividend policy
of the Issuer; (vi) any other material change in the Issuer's business or
corporate structure; (vii) changes in the Issuer's charter, by-laws or other
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person; (viii) causing a class of
securities of the Issuer to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association; (ix) a class of equity securities of
the Issuer to become eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934; or (x) any action
similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Flegel may be deemed to be the beneficial owner of 7,615,844 shares of Common
Stock or approximately 65.0% of the shares of Common Stock outstanding,
including 1,312,773 shares of Common Stock held of record by Flegel, 4,523,688
shares of Common Stock held of record by the Conversion Shareholders (other than
himself) for which proxies were given to Flegel, and 1,779,383 shares of Common
Stock held of record by Ledecky for which a proxy was given to Flegel. Flegel
has the sole power to dispose of the shares of Common Stock owned of record by
him. Flegel has the shared power to vote the shares of Common Stock owned of
record by him.
Lee may be deemed to be the beneficial owner of 4,523,688 shares of Common Stock
or approximately 38.9% of the shares of Common Stock outstanding, including
909,145 shares of Common Stock held of record by Lee and 3,614,543 shares of
Common Stock held of record by the Conversion Shareholders (other than himself)
for which proxies were given to Lee. Lee has the sole power to dispose of shares
of Common Stock owned of record by him. Lee has the shared power to vote the
shares of Common Stock owned of record by him.
Neither Flegel nor Lee has effected any transaction in the Common Stock (other
than in connection with the transactions described herein) in the past 60 days.
Neither Flegel nor Lee knows of any person who has the right to receive or the
power to direct the receipt of dividends on the Common Stock owned beneficially
by him, her or it.
The percentage of shares of Common Stock outstanding reported as beneficially
owned by each person herein on the date hereof is based upon the 11,724,604
shares of Common Stock outstanding as of January 7, 1999.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
The information set forth in Item 4 above is incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 - Joint Filing Agreement, by and between
S. Leslie Flegel and William H. Lee, Jr.
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CUSIP No. 836151209 13D Page 7 of 9 Pages
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Exhibit 2 - Conversion Voting Agreement, dated as of January 7,
1999, by and among the persons listed on Exhibit B
thereto, Jonathan J. Ledecky, James R. Gillis and Monte
Weiner (incorporated by reference to Exhibit 3 to
Statement on Schedule 13D filed by S. Leslie Flegel on
January 20, 1999).
Exhibit 3 - Agreement and Plan of Merger, dated as of January 7,
1999, by and among The Source Information Management
Company, Source-U.S. Marketing Services, Inc., U.S.
Marketing Services, Inc., Jonathan J. Ledecky, James R.
Gillis and Monte Weiner (incorporated by reference to
Exhibit 2 to Statement on Schedule 13D filed by S.
Leslie Flegel on January 20, 1999).
Exhibit 4 - Certificate of Designation of Class A Convertible
Preferred Stock of The Source Information Management
Company (incorporated by reference to Exhibit 4 to
Statement on Schedule 13D filed by S. Leslie Flegel on
January 20, 1999).
Exhibit 5 - Voting Agreement, dated as of January 7, 1999, by and
between S. Leslie Flegel and Jonathan J. Ledecky
(incorporated by reference to Exhibit 1 to Statement on
Schedule 13D filed by S. Leslie Flegel on January 20,
1999).
Exhibit 6 - Registration Rights Agreement, dated as of January 7,
1999, by and among The Source Information Management
Company, Jonathan J. Ledecky, James R. Gillis and Monte
Weiner (incorporated by reference to Exhibit 5 to
Statement on Schedule 13D filed by S. Leslie Flegel on
January 20, 1999).
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CUSIP No. 836151209 13D Page 8 of 9 Pages
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this Statement is true,
complete and correct.
January 19, 1999 By: /s/ S. Leslie Flegel
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S. Leslie Flegel
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CUSIP No. 836151209 13D Page 9 of 9 Pages
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this Statement is true,
complete and correct.
January 19, 1999 By: /s/ William H. Lee, Jr.
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William H. Lee, Jr.
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EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, each of the persons named below agrees to the joint filing of
a Statement on Schedule 13D (including amendments thereto) with respect to the
common stock, $.01 par value per share, of The Source Information Management
Company, a Missouri corporation, and further agrees that this Joint Filing
Agreement be included as a exhibit to such filings; provided that, as
contemplated by Section 13d-1(f)(ii), no person shall be responsible for the
completeness or accuracy of the information concerning the other persons making
the filing, unless such person knows or has reason to believe that such
information is inaccurate. This Joint Filing Agreement may be executed in any
number of counterparts, all of which together shall constitute one and the same
instrument.
/s/ S. Leslie Flegel /s/ William H. Lee, Jr.
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S. Leslie Flegel William H. Lee, Jr.
