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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ________)*
Michael and Anita Kaplan, jointly
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
34545P 10 5
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(CUSIP Number)
Michael and Anita Kaplan, jointly, P.O. Box 10091, Clearwater, Florida 34617
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 22, 1996
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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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
*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).
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SCHEDULE 13D
CUSIP No. 34545P 10 5
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael and Anita Kaplan, jointly
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / / (b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
/ /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Florida
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7 SOLE VOTING POWER
NUMBER OF 1,001,152
SHARES ----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH ----------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,001,152
WITH ----------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,001,152
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.7%
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14 TYPE OF REPORTING PERSON
IN
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2 of 6 Pages
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Item 1. Security and Issuer
This statement relates to the Common Stock, $.01 par value, of The
ForeFront Group, Inc., 1330 Post Oak Boulevard, Suite 1300, Houston, Texas
77056.
Item 2. Identity and Background
(A) Michael and Anita Kaplan, jointly
(B) 18820 U.S. Highway 19 North #215, Clearwater, Florida 34624
(C) Michael Kaplan is the President of ForeFront Direct, Inc., and Anita
Kaplan is the Office Manager of ForeFront Direct, Inc. ForeFront Direct,
Inc. is a wholly owned subsidiary of the Issuer. ForeFront Direct, Inc.
is located at 18820 U.S. Highway 19 North #215, Clearwater, Florida 34624.
(D) During the past five years, neither of Michael or Anita Kaplan have been
convicted in a criminal proceeding, excluding traffic violations or
similar misdemeanors.
(E) During the past five years, neither of Michael or Anita Kaplan has been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction or has been subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(F) Michael and Anita Kaplan are citizens of the State of Florida in the
United States of America.
Item 3. Source and Amount of Funds and Other Consideration
The securities were acquired through an acquisition by the Issuer of
AllMicro, Inc., of which Michael and Anita Kaplan, jointly, were sole
shareholders.
Item 4. Purpose of Transaction
Michael and Anita Kaplan, jointly acquired a total of 1,056,152 shares of
Common Stock of the Issuer through a merger of AllMicro, Inc. of which they
were the sole shareholders and AllMicro Acquisition Corporation, a wholly owned
subsidiary of the Issuer. Pursuant to such merger, the Issuer acquired all of
the shares of AllMicro, Inc. and Michael and Anita Kaplan acquired the
1,056,152 shares of the Issuer. The transaction was accounted for as a
"pooling of interests".
Item 5. Interest in Securities of the Issuer.
(A) Michael and Anita Kaplan, currently beneficially own 1,001,152 shares
(15.7%) of the Common Stock of the Issuer.
(B) Michael and Anita Kaplan, jointly have sole power to vote or to direct the
vote and sole power to dispose or to direct the disposition of all the
shares identified pursuant to Item 5(a).
(C) On October 9, 1996, Michael and Anita Kaplan, jointly sold 55,000 shares
of Common Stock of the Issuer at a price of $10.75 per share. The sale
was made on the open market by Goldman, Sachs & Company.
(D) Not applicable.
(E) Not applicable.
3 of 6 Pages
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Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities or the Issuer.
Of the 1,001,152 shares currently owned by Michael and Anita Kaplan,
jointly, 105,615 shares are being held in escrow pursuant to the terms set
forth in the Escrow Agreement attached hereto as Exhibit 99.1.
Item 7. Material to be Filed as Exhibits.
99.1 Escrow Agreement, dated as of July 19, 1996, by and among The
ForeFront Group, Inc., AllMicro Acquisition Corporation,
AllMicro, Inc., Texas Commerce Bank, National Association, and
Michael and Anita Kaplan.
4 of 6 Pages
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: October 11, 1996
Signature: /s/ Michael Kaplan
Title: Michael Kaplan
Signature: /s/ Anita Kaplan
Title: Anita Kaplan
Attention: Intentional misstatements or omissions of fact constitute Federal
criminal violations (see 18 U.S.C. 1001).
5 of 6 Pages
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EXHIBIT INDEX
Exhibit
Number Document Description
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99.1 Escrow Agreement, dated as of July 19, 1996, by and among The
ForeFront Group, Inc., AllMicro Acquisition Corporation,
AllMicro, Inc., Texas Commerce Bank, National Association, and
Michael and Anita Kaplan.
6 of 6 Pages
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EXHIBIT 99.1
ESCROW AGREEMENT
This Escrow Agreement is made and entered into as of this 19th day
of July, 1996, by and among Texas Commerce Bank, National Association
(the "Escrow Agent"), The ForeFront Group, Inc., a Delaware corporation
("ForeFront"), AllMicro Acquisition Corporation, a Florida corporation
("Acquisition Sub"), AllMicro, Inc., a Florida corporation ("AllMicro" or
the "Surviving Corporation"), and Michael Kaplan and Anita Kaplan
(individually, a "Shareholder" and, collectively, the "Shareholders").
W I T N E S S E T H:
WHEREAS, ForeFront, Acquisition Sub, AllMicro and the Shareholders
have entered into an Agreement and Plan of Reorganization, dated as of
July 19, 1996 (collectively, with all amendments, schedules, exhibits
and certificates referred to therein, the "Reorganization Agreement"),
which provides for the merger of Acquisition Sub with and into AllMicro
(the "Merger"); and
WHEREAS, the Reorganization Agreement provides that on the
effective date of the Merger, certain shares of ForeFront common stock,
par value $.01 per share (the "ForeFront Common Stock") to be issued in
the Merger and otherwise distributable to the Shareholders pursuant
thereto will be deposited in escrow with the Escrow Agent pursuant to
this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and
covenants contained in the Reorganization Agreement and herein, the
parties agree as follows:
ARTICLE I
Escrow and Escrow Shares
1.1 Escrow. Subject to Section 2.1, the Escrow Agent shall
initially hold in escrow ForeFront Common Stock certificates in the
names of the Shareholders. Such stock certificates shall represent, in
the aggregate, 105,615 shares, of ForeFront Common Stock issued in
connection with the Merger to the Shareholders allocated on a pro rata
basis among the shares of ForeFront Common Stock issued to each
Shareholder in connection with the Merger (collectively, the "Escrow
Shares"). Concurrently with their delivery of the Escrow Shares to the
Escrow Agent, the Shareholders shall execute a stock power with respect
to each of the certificates, which stock powers shall be delivered to
the Escrow Agent and attached to the certificates representing the
Escrow Shares. The Escrow Shares shall be held and distributed by the
Escrow Agent in accordance with the terms and conditions of this
Agreement. The number of Escrow Shares beneficially owned by each
Shareholder is set forth in Exhibit A attached hereto.
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ARTICLE II
Application of Escrow Shares
2.1 Distribution of Escrow Shares. The Escrow Shares shall serve
as collateral for the indemnity obligations of the Shareholders under
the Reorganization Agreement. Any claim by ForeFront for
indemnification against the Shareholders shall be conducted in
accordance with the terms of this Section 2.1 If ForeFront shall have
any claim against the Shareholders (excluding claims resulting from the
assertion of liability by third parties), it shall promptly give written
notice thereof to the Escrow Agent and the Shareholders, including in
such notice a brief description of the facts upon which such claims are
based and the amount thereof. If the Shareholders object to the
allowance of any such claims, they shall give written notice to
ForeFront and the Escrow Agent within twenty days following receipt of
ForeFront's notice of claim, advising it and the Escrow Agent that they
do not consent to the delivery of any of the Escrow Shares out of escrow
for application to such claims. If no such notice is timely provided by
the Shareholders to ForeFront and the Escrow Agent, the Escrow Agent
shall, within five business days after the expiration of the prior
notice period, deliver out of escrow the lesser of: (a) the number of
the Escrow Shares (in whole shares) that have an aggregate market value
as notified of in writing by ForeFront and the Shareholders most nearly
equal to the amount of the claim or claims thus to be satisfied, or (b)
all of the Escrow Shares. If the Shareholders advise ForeFront and the
Escrow Agent within the foregoing twenty day period that they object to
such application of the Escrow Shares after a claim has been made, the
Escrow Agent shall hold the Escrow Shares in escrow until the rights of
the Shareholders and ForeFront with respect thereto have been agreed
upon in accordance with the terms of this Agreement. If any
distribution pursuant to this Section 2.1 involves fewer than all of the
Escrow Shares, it shall be allocated pro rata against the Escrow Shares
therein based on the Escrow Shares beneficially owned by each
Shareholder (unless the claim made is based disproportionately on a
representation made individually by a Shareholder in which case the
distribution shall be appropriately adjusted).
In the event any of ForeFront, Surviving Corporation, or any of
their officers, directors, employees, agents, affiliates,
representatives, successors and assigns is an "indemnified party" with
respect to a third party claim and a settlement or judgment is reached
with respect to such claim, such indemnified party shall promptly give
written notice thereof to the Shareholders and the Escrow Agent. If the
Shareholders object to the allowance of any such claims, they shall give
written notice to such indemnified party and the Escrow Agent within ten
days following receipt of such notice of claim, advising such
indemnified party that they do not consent to the delivery of any of the
Escrow Shares out of escrow to such indemnified party for application to
such claims. If no such notice is timely provided by the Shareholders
to such indemnified party and the Escrow Agent, the Escrow Agent shall,
within five business days after the expiration of the prior notice
period, deliver out of escrow the lesser of: (a) the number of the
Escrow Shares (in whole shares) that have an aggregate market value
(determined as provided above) most nearly equal to the amount of the
claim or claims thus to be satisfied, or (b) all of the Escrow Shares.
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If the Shareholders advise such indemnified party and the Escrow
Agent within the foregoing ten day period that they object to such
application of the Escrow Shares, the Escrow Agent shall hold the Escrow
Shares in escrow until the rights of the Shareholders and such
indemnified party with respect thereto have been agreed upon between the
Shareholders and such indemnified party or until such rights are finally
determined in accordance with this Escrow Agreement. If any
distribution referred to in this Section 2.1 involves fewer than all of
the Escrow Shares, it shall be allocated pro rata against the Escrow
Shares therein based on the Escrow Shares beneficially owned by each
Shareholder (unless the claim made is based disproportionately on a
representation made individually by a Shareholder, in which case the
distribution shall be appropriately adjusted).
Upon the issuance of ForeFront's 1996 audited financial statements
which include the results of the operations of AllMicro and ForeFront
has received a signed opinion from its independent auditors certifying
such financial statements, the Escrow Agent shall upon written notice
from ForeFront and the Shareholders distribute to the Shareholders (pro
rata based on the number of shares of ForeFront Common Stock issued to
the Shareholders in connection with the Merger) all of the Escrow Shares
originally deposited in the escrow pursuant to Article 1 hereof, less
any Escrow Shares previously delivered to ForeFront pursuant to this
Section 2.1 and less the number of Escrow Shares (in whole shares)
having an aggregate market value (as notified in writing by ForeFront
and the Shareholders) most nearly equal to the amount of any pending
claims asserted by ForeFront with the value of such pending claims
determined in good faith by the Board of Directors of ForeFront, after
taking into account such factors as the Board of Directors shall deem
appropriate, provided that if the Shareholders do not agree with the
Board of Directors' determination of the amount of any such pending
claims, the amount of any such pending claim shall be finally determined
in accordance with Section 2.3 of this Agreement.
The Escrow Shares not so distributed pursuant to this Section 2.1
shall be retained in escrow by the Escrow Agent until all such pending
claims are resolved; provided, that upon the disposition of any such
claims prior to the disposition of all such claims, the Escrow Agent
shall deliver to the Shareholders such number of Escrow Shares (in whole
shares) as is most nearly equal to the excess of the aggregate market
value of the remaining Escrow Shares (determined as provided above) over
the amount of the remaining aggregate claims as determined above.
2.2 Ownership of Escrow Shares; Voting Rights. The Shareholders
shall have all indicia of ownership of the Escrow Shares while they are
held in escrow, including, without limitation, the right to vote the
Escrow Shares and receive distributions thereon and the obligations to
pay all taxes, assessments, and charges with respect thereto, but
excluding the right to sell, transfer, pledge, hypothecate or otherwise
dispose of any Escrow Shares; provided, that any distribution of stock
of ForeFront on or with respect to the Escrow Shares and any other
shares or securities into which such Escrow Shares may be changed or for
which they may be exchanged pursuant to corporate action of ForeFront
affecting holders of ForeFront Common Stock generally shall be delivered
to and held by the Escrow Agent in escrow and shall be subject to the
provisions of this Agreement.
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2.3 Arbitration. Any controversy involving a claim by ForeFront
on the Escrow Shares shall be finally settled by arbitration in Palo
Alto, California in accordance with the then-current Commercial
Arbitration Rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. Such arbitration shall be conducted by
three arbitrators chosen by mutual agreement of the Shareholders and
ForeFront. Failing such agreement, the arbitration shall be conducted
in accordance with the foregoing rules. There shall be limited
discovery prior to the arbitration hearing, subject to the discretion of
the arbitrators, as follows: (a) exchange of witness lists and copies
of documentary evidence and documents related to or arising out of the
issues to be arbitrated, (b) depositions of all party witnesses, and
(c) such other depositions as may be allowed by the arbitrators upon a
showing of good cause. Each party shall pay its own costs and expenses
(including counsel fees) of any such arbitration.
ARTICLE III
Escrow Agent
3.1 Duties and Obligations. The duties and obligations of the
Escrow Agent are purely ministerial and limited to those specifically
set forth in this Agreement, as each may from time to time be amended.
The Escrow Agent shall only be liable for, any loss, liability, cost or
expense (including reasonable attorneys' fees and expenses ) resulting
from any breach of the express terms of this Agreement or the Escrow
Agent's own gross negligence, willful misconduct or lack of good faith.
3.2 Risk of Loss. The Escrow Agent acknowledges and agrees that
the Escrow Agent bears the exclusive risk of loss, theft or damage with
respect to the Escrow Shares in its possession.
3.3 Escrow Agent's Compensation, Expenses and Indemnification.
ForeFront shall pay to the Escrow Agent compensation in respect of the
Escrow Agent's duties and obligations under this Agreement. Upon the
execution of this Agreement and the delivery of the Escrow Shares to the
Escrow Agent, the Escrow Agent shall be entitled to a one-time escrow
fee of $3,500.
3.4 Resignation. The Escrow Agent may resign at any time by
giving not less than sixty days written notice thereof to each of
ForeFront and the Shareholders.
3.5 Successor Escrow Agent. Upon receipt of the Escrow Agent's
notice of resignation, ForeFront and the Shareholders may appoint a
successor escrow agent. Upon the acceptance of the appointment as
escrow agent hereunder by a successor escrow agent and the transfer to
such successor escrow agent of the Escrow Shares, the resignation of the
Escrow Agent shall become effective and the Escrow Agent shall be
discharged from any future duties and obligations under this Agreement.
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3.6 Conflicting Demands. If on or before the close of escrow the
Escrow Agent receives or becomes aware of any conflicting demands or
claims with respect to the Escrow Shares or the rights of any of the
parties hereto to such Escrow Shares, the Escrow Agent shall have the
right to discontinue any or all future acts on the Escrow Agent' part
until such conflict is resolved to the Escrow Agent's satisfaction; to
commence or defend any action or proceedings for the determination of
such conflict; or to file a suit in interpleader and obtain an order
from a court of competent jurisdiction requiring all parties involved to
interplead and litigate in such court their rights among themselves and
with the Escrow Agent. In the event any of the above-described events
occur, each of ForeFront, on the one hand, and the Shareholders, on the
other hand, agree to pay one half of all costs, damages, judgments and
expenses, including reasonable attorneys fees, suffered or incurred by
the Escrow Agent in connection with, or arising out of, such conflicting
demands or claims, including, without limitation, a suit in interpleader
brought by the Escrow Agent.
3.7 Indemnity. The Shareholders and ForeFront hereby agree to
jointly and severally indemnify the Escrow Agent for, and to hold it
harmless against any loss, liability or expense arising out of or in
connection with this Agreement and carrying out its duties hereunder,
including the costs and expenses of defending itself against any claim
of liability, except in those cases where the Escrow Agent has been
guilty of gross negligence or willful misconduct. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Escrow
Agent be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if
the Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.
ARTICLE IV
Miscellaneous
4.1 Notices. Any notice or other communication required or
permitted to be given to the parties hereto shall be deemed to have been
given if personally delivered (including personal delivery by
facsimile), or two days after mailing by certified or registered mail,
return receipt requested, first class postage prepaid, addressed as
follows (or at such other address as the addressed party may have
substituted by notice pursuant to this Section 4.1):
(a) If to ForeFront or Acquisition Sub:
The ForeFront Group, Inc.
1330 Post Oak Blvd, Suite 1300
Houston, Texas 77056
Attention: Jeffrey R. Harder
Facsimile: (713) 961-1101
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(b) If to the Shareholders:
Michael and Anita Kaplan
18820 U.S. Highway 19 North, Suite 215
Clearwater, Florida 34624
(c) If to the Escrow Agent:
Texas Commerce Bank, N.A.
600 Travis Street, Suite 1150
Houston, Texas 77002
Attention: Corporate Trust, Escrow Section
Fax: (713) 216-5476
4.2 Termination. This Agreement shall terminate upon the mutual
written express agreement of ForeFront and the Shareholders. In any
event, this Agreement terminates when all of the Escrow Shares have been
distributed according to its terms.
4.3 Interpretation. The validity, construction, interpretation
and enforcement of this Agreement shall be determined and governed by
the laws of the State of Texas. The invalidity or unenforceability of
any provision of this Agreement or the invalidity or unenforceability of
any provision as applied to a particular occurrence or circumstance
shall not affect the validity or enforceability of any of the other
provisions of this Agreement or the applicability of such provision, as
the case may be.
4.4 Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original and all of which
shall constitute one agreement.
4.5 Transfer of Interests. None of the Shareholders shall sell,
transfer, pledge, hypothecate or otherwise dispose of any Escrow Shares,
or any interest therein prior to the distribution of such Escrow Shares
in accordance with Section 2.1 above.
4.6 Taxes. For purposes of federal and state income taxation, the
Escrow Shares shall be treated as owned by the Shareholders and this
Agreement shall be interpreted in a manner to effect the Shareholders'
ownership of the Escrow Shares for such tax purposes.
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IN WITNESS WHEREOF, the parties have signed this Agreement on the
day and year first above written.
Texas Commerce Bank, National Association
as Escrow Agent
By: /s/ Jo Ann Gulliver
Name: Jo Ann Gulliver
Title: Vice President and Trust Officer
The ForeFront Group, Inc.,
a Delaware corporation
By: /s/ Ernest D. Rapp
Name: Ernest D. Rapp
Title: Chief Financial Officer
AllMicro Acquisition Corporation,
a Florida corporation
By: /s/ Ernest D. Rapp
Name: Ernest D. Rapp
Title: Treasurer
AllMicro, Inc.,
a Florida corporation
By: /s/ Michael Kaplan
Name: Michael Kaplan
Title: President
The Shareholders:
/s/ Michael Kaplan
Name: Michael Kaplan
/s/ Anita Kaplan
Name: Anita Kaplan
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EXHIBIT A
ESCROW SHARES OWNED BY SHAREHOLDERS
Michael and Anita Kaplan, as tenants by entirety 105,615
shares
