SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
THE ARISTOTLE CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
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the Form or Schedule and the date of its filing.
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October 2, 2000
Dear Stockholder,
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders of The Aristotle Corporation, a Delaware corporation ("Aristotle"),
to be held at 2:00 p.m. on November 9, 2000 at the New Haven Lawn Club, 193
Whitney Avenue, New Haven, Connecticut (including any adjournment or
postponement thereof, the "Annual Meeting").
At the Annual Meeting, you will be asked (i) to elect three persons to the
Board of Directors of Aristotle and (ii) to ratify the selection of Arthur
Andersen LLP as Aristotle's independent public accountants. The Board of
Directors recommends the approval of each of these proposals. Such other
business will be transacted as may properly come before the Annual Meeting.
It is very important that your shares of Common Stock be represented at
the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please
complete the accompanying form of proxy and return such form of proxy in the
enclosed postage prepaid envelope. If you attend the Annual Meeting, you may
revoke the proxy given on such form and vote in person if you wish, even if you
have previously returned your form of proxy.
I look forward to seeing you at the meeting.
Sincerely,
/s/ Paul M. McDonald
Chief Financial Officer and
Secretary
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY PROMPTLY.
THE ARISTOTLE CORPORATION
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 9, 2000
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of the Stockholders of The
Aristotle Corporation ("Aristotle") will be held at 2:00 p.m. on Wednesday,
November 9, 2000 at the New Haven Lawn Club, 193 Whitney Avenue, New Haven,
Connecticut (including any adjournment or postponement thereof, the "Annual
Meeting"), for the following purpose:
1. To elect three directors for three-year terms and until their
successors are duly elected and qualified;
2. To ratify the appointment by the Board of Directors of Arthur
Andersen LLP as independent accountants of Aristotle for the
fiscal year ending June 30, 2001; and
3. To consider and take action upon any other matters that may
properly come before the Annual Meeting and any adjournments
or postponements thereof.
It is not anticipated that any other matter will be brought before the
Annual Meeting. If, however, other matters are presented, proxies will be voted
in accordance with the best judgment of the proxy holders.
The Board has fixed the close of business on September 25, 2000 as the
record date (the "Record Date") for the determination of the Stockholders
entitled to notice of and to vote at the Annual Meeting.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY CARD AND MAIL IT PROMPTLY USING THE ENCLOSED PRE-ADDRESSED,
POSTAGE-PAID, RETURN ENVELOPE. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN
PERSON IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD. YOUR
PROMPT ATTENTION IS APPRECIATED.
By Order of the Board of Directors,
/s/ Paul M. McDonald
Secretary
New Haven, Connecticut
Dated: October 2, 2000
THE ARISTOTLE CORPORATION
27 ELM STEET
NEW HAVEN, CONNECTICUT 06510
(203) 867-4090
PROXY STATEMENT
2000 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
NOVEMBER 9, 2000
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board of Directors") of The Aristotle Corporation
("Aristotle"), a Delaware corporation, of proxies, in the accompanying form, to
be used at the 2000 Annual Meeting of Stockholders to be held at the New Haven
Lawn Club, 193 Whitney Avenue, New Haven, Connecticut on November 9, 2000 at
2:00 p.m., and at any adjournments or postponements thereof (the "Annual
Meeting").
Where the Stockholder specifies a choice on the proxy as to how his or her
shares are to be voted on a particular matter, the shares will be voted
accordingly. If no choice is specified, the shares will be voted FOR the
election of the three nominees for director named herein and FOR the
ratification of the appointment of Arthur Andersen LLP as Aristotle's
independent public accountants for the fiscal year ending June 30, 2001
(collectively, the "Proposals"). Shares represented by valid proxies in the form
enclosed, received in time for use at the Annual Meeting and not revoked at or
prior to the Annual Meeting, will be voted at the Annual Meeting.
A Stockholder may revoke his or her proxy at any time prior to its use:
(i) by delivering to the Secretary of Aristotle at or before the Annual Meeting
a signed notice of revocation or a later dated signed proxy; or (ii) by
attending the Annual Meeting, notifying the Secretary, and voting in person.
Attendance at the Annual Meeting will not in itself constitute the revocation of
a proxy. All Stockholders who deliver properly executed and dated proxies to
Aristotle prior to the date of the Annual Meeting will be deemed present at the
Annual Meeting regardless of whether such proxies are marked to direct the proxy
holders to vote for or against, or to abstain from voting on, the Proposals, or
are not marked to indicate any voting direction. With respect to the tabulation
of votes on any matter, abstentions are treated as votes against a proposal,
while broker non-votes have no effect on the vote.
The presence at the Annual Meeting, in person or by proxy, of the holders
of one-third of the Company's aggregate issued and outstanding common stock, par
value $.01 per share ("Common Stock"), on the Record Date is necessary to
constitute a quorum. The affirmative vote of a majority of the shares present or
represented and entitled to vote at the Annual Meeting is required to approve
each proposal, other than the election of directors which requires a plurality
of the shares voted affirmatively or negatively at the Annual Meeting. Geneve
Corporation, the beneficial owner of 960,096 shares of the Common Stock, is
subject to certain voting limitations set forth in Section 5.05 of a Preferred
Stock Purchase Agreement, dated October 22, 1997, between the Company and Geneve
Corporation, as amended by a letter agreement dated February 9, 2000, and a
letter agreement dated April 28, 2000 (as amended, the "Preferred Stock Purchase
Agreement"). These voting limitations include the provision that, at any meeting
of the holders of the Company's stock, through January 1, 2003 Geneve will
exercise
its voting rights and privileges of those shares that exceed 30% of the then
outstanding voting securities for and against any proposal related to the
election of directors or the appointment of auditors in the same percentage as
all other voting securities in the Company were voted for and against such
proposal in a preliminary vote taken for this purpose at such meeting.
The Board of Directors has fixed the close of business on September 25,
2000 as the record date (the "Record Date") for the determination of holders of
outstanding shares of Common Stock entitled to notice of and to vote at the
Annual Meeting. As of the Record Date, there were 1,886,779 shares of Common
Stock outstanding and entitled to vote at the Annual Meeting. Each holder of
record of Common Stock on the Record Date is entitled to cast one vote per share
of Common Stock, in person or by proxy, on the Proposals.
The cost of soliciting proxies, including expenses in connection with
preparing and mailing this Proxy Statement, will be borne by Aristotle. In
addition, Aristotle will reimburse brokerage firms and other persons
representing beneficial owners of Common Stock of Aristotle for their expenses
in forwarding proxy material to such beneficial owners. Solicitation of proxies
by mail may be supplemented by telephone, telegram, telex and personal
solicitation by the directors or officers of Aristotle. No additional
compensation will be paid for such solicitation.
This Proxy Statement and the accompanying proxy are being mailed on or
about October 9, 2000 to all Stockholders entitled to notice of and to vote at
the Annual Meeting.
The Annual Report to Stockholders for the fiscal year ended June 30, 2000
is being mailed to the Stockholders with this Proxy Statement, but does not
constitute a part hereof.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Amended Bylaws of Aristotle (the "Amended Bylaws") provide that the
number of directors shall not be less than seven (7) nor more than fifteen (15),
as fixed by the Board of Directors. The Amended and Restated Certificate of
Incorporation and the Amended Bylaws provide that the directors be divided into
three classes, as equal in number as possible, with terms expiring in successive
years. Directors are elected by the stockholders, other than in the case of
newly created directorships, in which case a majority of the Directors then in
office appoint an individual to fill the newly created directorship. Directors
are elected for terms of three years, or, in the case of newly created
directorships, for a full term for the class of directors in which the new
directorship was created and, in any case, until their successors are elected
and qualified. At the Annual Meeting, three directors will each be elected for
three-year terms. As of the date of the last annual meeting, there were nine (9)
directorships. As of June 30, 2000, there were nine (9) directorships.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
It is the intention of the persons named in the proxy to vote the shares
represented by each properly executed proxy for the election as director of all
of the persons named below as nominees, unless contrary instructions are given
on the proxy. The Board of Directors believes that all of the nominees will
stand for election and will serve if elected. However, if any of the persons
nominated by the Board of Directors fails to stand for election or becomes
unable to accept election, the proxies will be voted for the election of such
other person or persons as a majority of the Board of Directors may recommend.
The following table sets forth the names of the Board of Director's three
nominees for election as directors. Also shown is certain other information,
some of which has been obtained from Aristotle's records and some of which has
been supplied by the nominees and continuing directors, with respect to each
nominee's or director's principal occupation or employment during the past five
years, his or her age at September 1, 2000, the periods during which he or she
has served as a director of Aristotle and the positions currently held with
Aristotle.
Director of the Positions Held with
Nominees Age Company Since the Company
-------- --- ------------- -----------
Robert Fiscus............ 63 1991 Director
Betsy Henley Cohn........ 47 1993 Director
John C. Warfel........... 48 1994 Director
Robert L. Fiscus is Vice Chairman and Chief Financial Officer of UIL
Holdings Corporation, the publicly-held holding company parent of The United
Illuminating Company, an electric utility company, and several smaller
non-utility companies. Mr. Fiscus is also Vice Chairman and Chief Financial
Officer of The United Illuminating Company, where he previously served as
President and Chief Financial Officer. Mr. Fiscus has been employed by The
United Illuminating Company since 1972 and also serves as a director of UIL
Holdings Corporation and The United Illuminating Company.
Betsy Henley-Cohn is Chairperson of Birmingham Utilities, Inc., a water
utility in Ansonia, Connecticut, and Joseph Cohn & Son, Inc., in New Haven,
Connecticut. Ms. Henley-Cohn has been employed by Birmingham Utilities, Inc.
since 1993 and by Joseph Cohn & Son, Inc. since 1978. She also serves as a
director of UIL Holdings Corporation and The United Illuminating Company and
Citizens Bank of Connecticut.
John C. Warfel has been the Vice President and Chief Financial Officer of
FYC International, Inc., a privately held manufacturer of women's apparel since
October 1999. Prior to that, Mr. Warfel was the Senior Vice President,
Administration and Finance and Chief Financial Officer of Starter Corporation, a
leading sports apparel manufacturer. He had been employed by Starter Corporation
since 1988.
Director of the Positions Held with
Continuing Directors Age Company Since the Company
-------------------- --- ------------- -----------
Directors with terms expiring in 2001:
John J. Crawford........................ 55 1989 Director, President,
Chief Executive
Officer and Chairman
of the Board
Edward Netter........................... 67 1998 Director
Sharon M. Oster......................... 52 1992 Director
Directors with terms expiring in 2002:
Steven B. Lapin......................... 54 1998 Director
Daniel J. Miglio........................ 60 1990 Director
John Lahey.............................. 54 1999 Director
John J. Crawford has been President and Chief Executive Officer of
Aristotle since April 1990 and Chairman of the Board since April 1993. Since
July 1994, Mr. Crawford has served Aristotle in a part-time capacity. Mr.
Crawford also serves as Chairman of Simulaids, Inc., Aristotle's wholly-owned
subsidiary. Mr. Crawford is also the Chief Executive Officer of the Regional
Water Authority, a utility located in New Haven, Connecticut. Mr. Crawford is
also a member of the Board of Directors of Webster Financial Corporation and
American Educational Products, Inc.
Edward Netter has been Chairman, Chief Executive Officer and a director of
Geneve Corporation, a private diversified holding company, for more than five
years. Mr. Netter is also Chairman and a director of Independence Holding
Company, a holding company engaged principally in the life and health insurance
business.
Sharon M. Oster has been a Professor of Economics at the School of
Organization and Management, Yale University since 1982. Ms. Oster is a director
of two publicly-held companies, Health Care REIT, a real estate investment
company, and TransPro, Inc., a manufacturer of automotive/industrial-related
products.
Steven B. Lapin has been President, Chief Operating Officer and a director
of Geneve Corporation, a private diversified holding company, for more than five
years. Mr. Lapin is also Vice Chairman and a director of Independence Holding
Company, a holding company engaged principally in the life and health insurance
business.
Daniel J. Miglio was formerly Chairman, President and Chief Executive
Officer of Southern New England Telecommunications Corporation ("SNET"), a
publicly-held telecommunications company. He had been employed by SNET from 1962
through 1998. Mr. Miglio also serves as a director of UIL Holdings Corporation
and The United Illuminating Company.
John Lahey is the President of Quinnipiac University, a private university
located in Hamden, Connecticut. Dr. Lahey has been the President for the past 13
years. He also serves on the Board of Trustees of Yale-New Haven Hospital and on
the Board of Directors of UIL Holdings Corporation, The United Illuminating
Company.
BOARD OF DIRECTORS' COMMITTEES AND NOMINATIONS BY STOCKHOLDERS
To select nominees for election as directors, the Board of Directors of
Aristotle met on August 31, 2000 and made its nominations for the Annual
Meeting. Aristotle's Amended Bylaws provide that to be eligible for nomination
as a director of Aristotle, a person must be a resident of the State of
Connecticut or have been previously a resident for at least three years. The
Amended Bylaws further provide that nominations of persons for election to the
Board of Directors may be made by the Board of Directors, or by any stockholder
entitled to vote for the election of directors at the meeting who provides
timely notice in writing to the Secretary of Aristotle and who complies with the
requirement to set forth certain information specified in Article III, Section
13 of the Amended Bylaws concerning each person the stockholder proposes to
nominate for election and the nominating stockholder. To be timely, notice must
be delivered to, or mailed to and received at, the principal executive offices
of Aristotle not less than 30 days nor more than 90 days prior to the date of
the meeting, provided that at least 45 days' notice or prior public disclosure
of the date of the meeting is given or made to stockholders. Public disclosure
of the date of the Annual Meeting was made by issuance of a press release on
September 27, 2000. No stockholder nominations for directors have been submitted
in connection with the Annual Meeting.
The Board of Directors has appointed a standing Audit Committee, which
during the year ended June 30, 2000, conducted three (3) meetings. The members
of the Audit Committee were Messrs. Fiscus, Warfel, Lapin and Lahey. The duties
of the Audit Committee include reviewing the financial statements of the Company
and the scope of the independent annual audit and internal audits. It also
reviews the independent accountants' letter to management concerning the
effectiveness of the Company's internal financial and accounting controls, and
reviews and recommends to the Board of Directors the firm to be engaged as the
Company's independent accountants. The Audit Committee may also examine and
consider such other matters relating to the financial affairs and operations of
the Company as it determines to be appropriate.
The Board of Directors of Aristotle also has appointed a Human Resources
and Stock Option Committee comprised of three directors, which during the fiscal
year ended June 30, 2000 conducted no meetings. The Human Resources and Stock
Option Committee reviews the salary structure and policies of Aristotle and its
subsidiaries, administers Aristotle's 1997 Employee and Director Stock Option
Plan (the "1997 Stock Option Plan"), selects the eligible persons to whom stock
options or stock appreciation rights will be granted, and prescribes the terms
and provisions of each such option or right. The members of the Human Resources
and Stock Option Committee during the fiscal year ended June 30, 2000 were Ms.
Oster and Messrs. Fiscus and Miglio.
During the fiscal year ended June 30, 2000, the Board of Directors of
Aristotle held eight (8) meetings. During fiscal 2000, none of the directors
attended less than 75% of the total number of meetings of the Board of Directors
and committees of which they were members.
COMPENSATION OF DIRECTORS
Effective January 1, 1998, directors of Aristotle, other than officers,
each receives a retainer of $7,500, payable semi-annually in 50% Common Stock
and 50% cash. The Common Stock is payable in six month intervals and is valued
based on its average market value during the ten days preceding the payment
date. In addition to the retainer, the Chairperson and the members of board
committees receive $550 or $500, respectively, for each committee meeting
attended. During the fiscal year ended June 30, 2000, Aristotle did not pay the
entire amount of the retainer. Accordingly, Aristotle has accrued an aggregate
of $144,083 for the payment of such retainers to directors.
Non-employee directors are eligible to receive grants of stock options
under the 1997 Stock Option Plan. The 1997 Stock Option Plan provides for the
automatic grant of non-qualified options to non-employee directors of the
Company. Each non-employee director, upon first being elected to the Board of
Directors, is eligible to receive an option to purchase 2,500 shares, which will
vest after completion of one year of service on the Board of Directors.
Additionally, the 1997 Stock Option Plan provides for a grant to each
non-employee director on the date of his or her reelection (provided that the
director has served as a director since his or her initial election) of an
option to purchase 1,000 shares, which vests upon completion of one year of
service on the Board of Directors. John Lahey and Daniel Miglio were granted
options to purchase 2,500 and 1,000 shares, respectively, during fiscal year
2000.
EXECUTIVE OFFICERS
The following table sets forth, as of September 1, 2000, the name of the
Company's current executive officer who is not a director, his age, and all
positions held with the Company. The executive officer serves at the discretion
of the Board of Directors, subject to an Employment Agreement that the Company
has entered into with the executive officer.
Name Age Position With the Company
---- --- -------------------------
Paul M. McDonald 47 Chief Financial Officer and Secretary
The principal occupations of the executive officer for the last five years
are set forth below.
Paul M. McDonald has been the Chief Financial Officer of Aristotle since
November 1994. Mr. McDonald has been the Secretary of Aristotle since April
1994. Mr. McDonald also serves as Vice Chairman, Treasurer and Secretary of
Simulaids, Inc., Aristotle's wholly-owned subsidiary. In addition, Mr. McDonald
served as the Chief Financial Officer and a Director of Strouse since 1989 and
as the Secretary of Strouse since September 1995.
EXECUTIVE COMPENSATION
The following table sets forth certain information for the periods
indicated regarding cash and other compensation paid to, earned by, or awarded
to the Company's Chief Executive Officer and certain other executive officers of
the Company (collectively, the "Named Officers") whose salary and bonus exceeded
$100,000 during the last three fiscal years ended June 30, 2000.
Summary Compensation Table
Annual Compensation Long Term Compensation
------------------- ----------------------
Options All Other
------- ---------
Name and Principal Position Year Salary $ Bonus $ Awarded # Compensation $
--------------------------- ---- -------- ------- --------- --------------
John J. Crawford ....................... 2000 $ 80,000(1) $ 0 0 $ 0
President, Chief Executive Officer and 1999 100,000(1) 0 20,000 0
Chairman of the Board ................ 1998 80,000(1) 0 20,000 0
Paul McDonald .......................... 2000 $149,000 $ 0 10,000 $ 3,324(3)
Chief Financial Officer and Secretary 1999 149,000 24,213(2) 20,000 2,622(3)
1998 148,529 30,000(2) 10,000 2,019(3)
- ------------
(1) In fiscal 2000, salary includes $20,000 in shares of Common Stock; in
fiscal 1999, salary includes $40,000 in shares of Common Stock; in fiscal
1998, salary includes $32,000 in shares of Common Stock.
(2) In fiscal 1999, the Company paid Mr. McDonald a $24,213 performance bonus
for meeting management objectives. In fiscal 1998, the Company paid Mr.
McDonald a bonus in recognition of certain additional services rendered to
the Company.
(3) Other compensation for Mr. McDonald is comprised of the following: in
fiscal 2000, $176 paid for term life insurance premiums and $3,148 paid as
a contribution pursuant to the SEP Plan for Mr. McDonald; in fiscal 1999,
$373 paid for term life insurance premiums and $2,249 paid as a
contribution pursuant to the SEP Plan for Mr. McDonald; in fiscal 1998,
$278 paid for term life insurance premiums and $1,741 paid as a matching
contribution pursuant to the Strouse 401K Plan for Mr. McDonald.
Option Grants in Last Fiscal Year
The following table sets forth information regarding each stock option
granted to a Named Officer during the fiscal year ended June 30, 2000.
Number of % of Total Options
Securities Awarded to Exercise
Underlying Employees in Fiscal Prices
Name Options Granted(1) Year 2000 ($/share) Expiration Date
---- ------------------ --------- --------- ---------------
Paul McDonald 5,000(2) 50% $5.000 January 13, 2010
Paul McDonald 5,000(3) 50% $5.000 January 13, 2010
- ---------
(1) All stock options were granted under the 1997 Stock Option Plan.
(2) The options granted to the named executive officer are non-qualified stock
options and may be exercised after January 13, 2001.
(3) The options granted to the named executive officer are non-qualified stock
options and may be exercised after January 13, 2002.
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table sets forth certain information regarding unexercised
stock options held as of June 30, 2000, by the Named Officers. No stock options
were exercised by the Named Officers during the fiscal year ended June 30, 2000.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at June 30, 2000 (#) at June 30, 2000 ($)(1)
---------------------------- -----------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
John J. Crawford............... 62,500 10,000 $29,500(2) $ 0(3)
Paul McDonald.................. 34,139 10,000 13,258(4) $7,500(5)
- -----------------
(1) The value of unexercised, "in-the-money" options at June 30, 2000 is the
difference between (a) the closing price of Common Stock on June 30, 2000
as reported by NASDAQ ($5.75) - the assumed fair market value - and (b)
the per share option exercise price, multiplied by the number of shares of
Common Stock underlying such options.
(2) Mr. Crawford holds exercisable options to purchase 12,500 shares of Common
Stock that have an exercise price of $10.00 per option and exercisable
options to purchase 10,000 shares of Common Stock that have an exercise
price of $5.875 per option, each of which is greater than the fair market
value of the Common Stock as of June 30, 2000 ($5.75). Such options are
not "in-the-money" and their value, therefore, is zero. The exercise price
of Mr. Crawford's remaining 40,000 exercisable options averages $5.0125.
(3) Mr. Crawford holds unexercisable options to purchase 10,000 shares of
Common Stock that have an exercise price of $5.875 per option which is
greater than the fair market value of Common Stock as of June 30, 2000
($5.75). Such options are not "in-the-money" and their value, therefore is
zero.
(4) Mr. McDonald holds exercisable options to purchase 20,000 shares of Common
Stock that have an exercise price of $5.875 per option which is greater
than the fair market value of the Common Stock as of June 30, 2000
($5.75). Such options are not "in-the-money" and their value, therefore,
is zero. The exercise price of Mr. McDonald's remaining 14,139 exercisable
options averages $4.81.
(5) Mr. McDonald holds unexercisable options to purchase 10,000 shares of
Common Stock that have an exercise price of $5.00 per option.
EMPLOYMENT AGREEMENTS
The Company entered into an Employment Agreement with Mr. McDonald on
December 1, 1998 for the term expiring November 30, 2000.
STOCK OWNED BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth, as of September 1, 2000, certain
information regarding beneficial ownership of the Common Stock by: (i) each
person who is known to Aristotle to own beneficially more than 5% of the
outstanding shares of Common Stock (ii) each director of Aristotle; (iii) each
executive officer of Aristotle who is a Named Officer; and (iv) all executive
officers and directors of Aristotle as a group. Unless otherwise indicated, all
persons listed below have sole voting and investment power with respect to their
shares and the address for each such person is The Aristotle Corporation, 27 Elm
Street, New Haven, Connecticut. In preparing the following table, Aristotle has
relied on information furnished by such persons.
Number of Shares
5% Stockholders, Directors of CommonStock Voting
and Executive Officers Beneficially Owned(1) Power(2)
---------------------- --------------------- --------
5% Stockholders:
Geneve Corporation(3) ........... 960,096 50.89%
Directors:
John J. Crawford .............. 113,329(4) 5.81%
Robert L. Fiscus .............. 13,013(5) *
Betsy Henley-Cohn ............. 29,053(6) 1.54%
John Lahey .................... 1,000(7) *
Steven B. Lapin ............... 0(8) *
Daniel J. Miglio .............. 18,813(9) *
Edward Netter ................. 0(10) *
Sharon M. Oster ............... 48,533(11) 2.57%
John C. Warfel ................ 10,106(12) *
Named Officers (excluding........
Mr. Crawford)
Paul McDonald ................. 34,139(13) 1.78%
All Executive Officers and
Directors as a group (10 persons) 267,986 13.38%
- ----------
* Less than 1%
(1) Includes as part of the total number of issued and outstanding shares of
Common Stock those stock options which are currently exercisable by the
individual whose share ownership percentage is being calculated, in
accordance with the applicable securities regulations.
(2) Percentages are calculated based on the total number of shares of Common
Stock (on a fully converted basis) outstanding. Includes as part of the
total number of issued and outstanding shares of Common Stock those stock
options which are currently exercisable by the individual whose share
ownership percentage is being calculated, in accordance with the
applicable securities regulations.
(3) Geneve Corporation's address is 96 Cummings Point Road, Stamford,
Connecticut. Director Steven B. Lapin is the President and Chief Operating
Officer of Geneve Corporation and Director Edward Netter is the Chairman
and Chief Executive Officer of Geneve Corporation.
(4) Includes 46,199 shares held by Mr. Crawford directly; 4,580 shares held in
his wife's name; 50 shares held in the name of his daughter; and stock
options, which are currently exercisable, to purchase 62,500 shares.
(5) Includes 8,676 shares held by Mr. Fiscus directly and 400 shares held
jointly with his wife; and stock options, which are currently exercisable,
to purchase 3,937 shares.
(6) Includes 8,255 shares held by Ms. Henley-Cohn directly; 11,840 shares held
in trusts in which Mrs. Henley-Cohn has the power to vote the shares;
5,500 shares held equally by Ms. Henley-Cohn's son and daughter; and stock
options, which are currently exercisable, to purchase 3,458 shares.
(7) Includes 1,000 shares held by Mr. Lahey directly.
(8) Does not include any shares owned by Geneve Corporation. Mr. Lapin is the
President and Chief Operating Officer of Geneve Corporation.
(9) Includes 14,876 shares held by Mr. Miglio directly; and stock options,
which are currently exercisable, to purchase 3,937 shares.
(10) Does not include any shares owned by Geneve Corporation. Mr. Netter is the
Chairman and Chief Executive Officer of Geneve Corporation.
(11) Includes 11,696 shares held by Ms. Oster directly and 31,900 held by Ms.
Oster's husband; and stock options, which are currently exercisable, to
purchase 4,937 shares. Ms. Oster declines control over shares owned by her
husband.
(12) Includes 7,127 shares held by Mr. Warfel directly; and stock options,
which are currently exercisable, to purchase 2,979 shares.
(13) Includes Mr. McDonald stock options, which are currently exercisable, to
purchase 34,139 shares.
CERTAIN TRANSACTIONS
On February 9, 2000, the Company entered into a letter agreement (the
"February Letter Agreement") with Geneve Corporation ("Geneve"), the holder of
the largest number of shares of Common Stock of the Company, which amended the
Preferred Stock Purchase Agreement. Pursuant to the terms of the February Letter
Agreement, Geneve elected to convert 545,940 shares of Series E, F, G and H
Preferred Stock, with an aggregate value of $2,818,090, into 583,813 shares of
Common Stock and a promissory note (the "Promissory Note") issued by the Company
in the amount of $330,000 due December 31, 2001 and bearing interest at the rate
of 8%. The Preferred Stock Purchase Agreement was modified primarily to state
that voting restrictions would lapse with respect to the election of Directors
and the appointment of auditors on December 31, 2001.
On April 28, 2000, the Company entered into a letter agreement (the "April
Letter Agreement") with Geneve which further amended the Preferred Stock
Purchase Agreement. Pursuant to the terms of the April Letter Agreement, the
Company confirmed that its Board of Directors had consented to the purchase by
Geneve of shares of the Company's Common Stock and shares of the Company's
Series F
Preferred Stock, Series G Preferred Stock, and Series H Preferred Stock
(collectively, with the shares of Common Stock, the "Common Stock Equivalents"),
provided that:
1. The number of Common Stock Equivalents owned of record and
beneficially by Geneve shall not, without the prior consent of the
Board of Directors of the Company, exceed 51% of the total issued
and outstanding shares of Common Stock Equivalents;
2. In effectuating any purchase of Common Stock Equivalents, Geneve
shall not, directly or indirectly, adversely affect the Company's
right to utilize any net operating loss carryforwards; and
3. The voting limitations set forth in Section 5.05 of the referenced
Preferred Stock Purchase Agreement, are extended from January 1,
2002, to January 1, 2003.
During April and May 2000, Geneve elected to convert 9,456 shares of
Series F, G and H Preferred Stock, with an aggregate value of $94,560, into
15,759 shares of Common Stock.
On June 16, 2000, the Company entered into another letter agreement (the
"June Letter Agreement") with Geneve pursuant to which the Company issued to
Geneve 56,100 newly issued shares of the Company's Common Stock representing
payment in full of the balance of the Promissory Note. These shares are deemed
to be Common Stock Equivalents as set forth in the April Letter Agreement. The
Company has agreed that these shares will have the same rights to registration
and be included in the Registration Rights Agreement between the Company and
Geneve dated October 27, 1997.
In addition, during the fiscal year ended June 30, 2000, Geneve acquired
the following shares of the Company:
1/13/00 2,851 Preferred Shares from Paul McDonald
6/15/00 2,806 Common Shares from Paul McDonald
6/21/00 452 Common Shares from Paul McDonald
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Aristotle's executive officers and directors, and persons who beneficially own
more than ten percent (10%) of the Common Stock, to file with the Securities and
Exchange Commission (the "SEC") and any national securities exchange on which
Aristotle's securities are registered initial reports of beneficial ownership
and reports of changes in beneficial ownership of the Common Stock or other
equity securities of Aristotle. Executive officers, directors and greater than
ten percent (10%) beneficial owners are required by SEC regulations to furnish
Aristotle with copies of all Section 16(a) forms they file. To Aristotle's
knowledge, based solely on a review of the copies of such reports furnished to
Aristotle, all Section 16(a) filing requirements applicable to its executive
officers, directors and greater than ten percent (10%) beneficial owners were
complied with for the fiscal year ended June 30, 2000.
THE AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES CAST BY THE HOLDERS OF THE
COMMON STOCK AT THE ANNUAL MEETING IS REQUIRED TO ELECT THE NOMINEES FOR
DIRECTOR. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
"FOR" THE ELECTION OF THE NOMINEES FOR DIRECTOR.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(PROPOSAL 2)
On August 31, 2000 the Board of Directors re-appointed Arthur Andersen LLP
("Arthur Andersen") to serve as independent accountants for Aristotle for the
fiscal year ending June 30, 2001. The Board proposes that the Stockholders
ratify this appointment, although such ratification is not required under
Delaware law or Aristotle's Amended and Restated Certificate of Incorporation or
Amended Bylaws. Arthur Andersen audited Aristotle's financial statements for the
fiscal year ended June 30, 2000. Aristotle expects that representatives of
Arthur Andersen will be present at the Annual Meeting, with the opportunity to
make a statement if they desire to do so, and will be available to respond to
appropriate questions.
In the event that ratification of Arthur Andersen as the independent
public accountants for Aristotle is not obtained at the Annual Meeting, the
Board of Directors will reconsider its appointment.
Unless otherwise indicated, properly executed proxies will be voted in
favor of ratifying the appointment of Arthur Andersen, independent certified
public accountants, to audit the books and accounts of Aristotle for the fiscal
year ending June 30, 2001.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST BY THE HOLDERS OF THE
COMMON STOCK AT THE ANNUAL MEETING IS REQUIRED TO RATIFY THE APPOINTMENT OF THE
ACCOUNTANTS. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS
VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN AS INDEPENDENT
ACCOUNTANTS.
DEADLINE FOR SUBMISSION OF STOCKHOLDER
PROPOSALS TO BE PRESENTED AT 2000
ANNUAL MEETING OF STOCKHOLDERS
Any proposal intended to be presented by any stockholder for action at the
2000 Annual Meeting of Stockholders of Aristotle must be received by the
Secretary of Aristotle at 27 Elm Street, New Haven, Connecticut 06510, not later
than June 3, 2001, in order for the proposal to be considered for inclusion in
the proxy statement and proxy relating to the 2001 Annual Meeting. In addition,
Aristotle's Amended Bylaws require that notice of stockholder proposals and
nominations for director be delivered to the Secretary of Aristotle not less
than thirty (30) days nor more than ninety (90) days prior to the date of an
annual meeting, unless notice or public disclosure of the date of the meeting
occurs less than forty-five (45) days prior to the date of such meeting, in
which event stockholders may deliver such notice not later than the fifteenth
(15th) day following the day on which notice of the date of the meeting was
mailed or public disclosure thereof was made. Nothing in this paragraph shall be
deemed to require Aristotle to include in its proxy statement and proxy relating
to the 2001 Annual Meeting any stockholder proposal that does not meet all of
the requirements for inclusion established by the Securities and Exchange
Commission in effect at the time such proposal is received.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of
Aristotle does not know of any other matters to be presented for action by the
shareholders at the Annual Meeting. If, however, any other matters not now known
are properly brought before the meeting, the persons named in the accompanying
proxy will vote such proxy in their discretion.
By Order of the Board of Directors
/s/ Paul M. McDonald
Chief Financial Officer and
Secretary
October 2, 2000