<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-
1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. 2)
Waverly, Inc.
(Name of Issuer)
Common Stock, par value $2.00 per share
(Title of Class and Securities)
943614107
(CUSIP Number)
William M. Passano, Jr.
c/o Waverly, Inc.
351 West Camden Street
Baltimore, Maryland 21201
(410) 528-4000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 10, 1998
(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 [ ].
(Continued on following pages)
(Page 1 of 14 Pages)
<PAGE> 2
SCHEDULE 13D
CUSIP No. 943614107
_________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William M. Passano, Jr.
_________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) (x)
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
_________________________________________________________________
(4) SOURCE OF FUNDS
N/A
_________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
_________________________________________________________________
(7) SOLE VOTING POWER
NUMBER OF 218,255 (1)
SHARES ___________________________________
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 4,546,284 (2)
EACH ___________________________________
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 218,255 (1)
WITH ___________________________________
(10) SHARED DISPOSITIVE POWER
3,255,973 (3)
_________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,814,612 (1),(2),(3),(4)
_________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
52.8%
_________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_________________________________________________________________
<PAGE> 3
NOTES TO PRECEDING PAGE
-----------------------
(1) Includes options to purchase 85,000 shares, par value $2.00 per share
(the "Shares"), of Waverly, Inc. (the "Company") granted under the
Company's stock option plans.
(2) Includes 23,462 Shares held by the Ida K. Passano Trust, of which
William M. Passano, Jr. is a trustee. William M. Passano, Jr.
disclaims beneficial ownership of such Shares. Includes 3,227,822
Shares held in a Life Estate under the will of Edward B. Passano (the
"Life Estate") which are subject to the Passano Voting Trust, of
which William M. Passano, Jr. is a trustee. William M. Passano, Jr.
disclaims beneficial ownership of Shares held by the Life Estate.
Includes 800,000 Shares subject to a voting trust agreement with
Michael Urban (the "Urban Voting Trust Agreement"), of which William
M. Passano, Jr. is a co-trustee. See the Schedule 13D, filed on or
about April 30, 1990, for additional information concerning the Urban
Voting Trust Agreement. William M. Passano, Jr. disclaims beneficial
ownership of such Shares. Includes 495,000 Shares subject to voting
trust agreements with members of the Spahr family, of each of which
William M. Passano, Jr. is a trustee. William M. Passano, Jr.
disclaims beneficial ownership of such Shares.
(3) Includes 23,462 Shares held by the Ida K. Passano Trust; 3,227,822
Shares held in the Life Estate; and 4,689 Shares held in the
Company's 401K Plan for the account of William M. Passano, Jr.
William M. Passano, Jr. disclaims beneficial ownership of all such
Shares.
(4) Includes 45,384 Shares held by William M. Passano, Jr.'s spouse, as
to which William M. Passano, Jr. disclaims beneficial ownership.
<PAGE> 4
SCHEDULE 13D
CUSIP No. 943614107
_________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael Urban
_________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) (x)
(b) ( )
_________________________________________________________________
(3) SEC USE ONLY
_________________________________________________________________
(4) SOURCE OF FUNDS
N/A
_________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
_________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
_________________________________________________________________
(7) SOLE VOTING POWER
NUMBER OF 2,500 (1)
SHARES ___________________________________
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 800,000
EACH ___________________________________
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 2,500 (1)
WITH ___________________________________
(10) SHARED DISPOSITIVE POWER
800,000
_________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
802,500 (1)
_________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
_________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
8.9%
_________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_________________________________________________________________
<PAGE> 5
NOTES TO PRECEDING PAGE
-----------------------
(1) Includes options to purchase 2,500 Shares granted under the Company's
stock option plans.
<PAGE> 6
This statement constitutes Amendment No. 2 to the Schedule 13D filed
by William M. Passano, Jr. and Michael Urban (together, the "Filing Parties")
on or about April 30, 1990. The Schedule 13D, as originally filed, is
hereinafter referred to as the "Schedule 13D." All capitalized terms used
herein and otherwise undefined shall have the meanings ascribed in the Schedule
13D. This Amendment is being filed to reflect the agreements and transactions
described in Items 4 and 6 concerning voting trust agreements between
William M. Passano, Jr. and certain stockholders of Waverly, Inc., a Maryland
corporation (the "Company"), and agreements and transactions by and among the
Company, Wolters Kluwer U.S. Corporation, a Delaware corporation ("Wolters
Kluwer"), MP Acquisition Corp., a Maryland corporation and an indirect wholly
owned subsidiary of Wolters Kluwer ("Newco"), the Filing Parties and certain
other stockholders of the Company as described below.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 of the Schedule 13D is hereby amended and supplemented as follows:
The Filing Parties are:
(a) William M. Passano, Jr.
(b) 351 West Camden Street
Baltimore, MD 21201
(c) Chairman of the Board of Directors of the Company
(d) None
(e) None
(f) United States
(a) Michael Urban
(b) c/o Waverly, Inc.
351 West Camden Street
Baltimore, MD 21201
(c) President and CEO
Urban & Schwarzenberg Verlag fur Medizin
GmbH, a subsidiary of the Company
Landwehrstr. 61
80336 Munchen
(d) None
(e) None
(f) Federal Republic of Germany
<PAGE> 7
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Item 3 of the Schedule 13D is hereby amended and supplemented as follows
Spahr Voting Trusts. No funds were expended by William M. Passano, Jr. for
the acquisition of shared voting power of the 495,000 Shares subject to the
Spahr Voting Trust Agreements described in Item 6. Such Shares were
transferred by the Company to the members of the Spahr family as partial
consideration for a merger of Lea & Febiger, L.P., a Delaware limited
partnership, of which the members of the Spahr family were limited partners,
with and into the Company.
Exercise of Stock Options by William M. Passano, Jr.. As described in
Item 5(c) of this Amendment, William M. Passano, Jr. exercised options to
purchase 26,000 Shares on January 30, 1998, at an exercise price of $7.875 per
Share. The Company loaned William M. Passano, Jr. the amount of the exercise
price for the 26,000 Shares, $204,750.00 (the "Loan"). Pursuant to the Loan,
the Company is holding the Shares as collateral and William M. Passano, Jr. has
agreed to pay interest on the Loan principal at an annual interest rate equal
to the actual borrowing rate charged by First National Bank of Maryland to the
Company during the period the Loan is outstanding. William M. Passano, Jr.
must repay the Loan and accrued interest no later than the time that the Shares
are sold and the Loan is callable by the Company at such time as William M.
Passano, Jr. is freely able to dispose of the Shares subject to the options.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Schedule 13D is hereby amended and supplemented as follows:
The primary purpose of the Spahr Voting Trust Agreements (as defined
herein) is to enable the descendants of Edward B. Passano and members of the
Spahr family to operate collectively in exercising their rights as holders of
all the Shares subject to such agreements.
The primary purpose of the Agreement and Plan of Merger and Stock Option
and Tender Agreement described in Item 6 is to effectuate and facilitate the
sale of the entire equity interest in the Company to Wolters Kluwer.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Schedule 13D is hereby amended and supplemented as follows:
(a) The aggregate number of Shares that may be deemed to be collectively
beneficially owned by the Filing Parties is 4,817,112, which includes options
to purchase 85,000 Shares awarded to William M. Passano, Jr. and options to
purchase 2,500 Shares awarded to Michael Urban under the Company's stock option
plans. Such Shares, including Shares underlying such options, constitute 52.8%
of the Shares outstanding. The Filing Parties disclaim that they are acting as
a "group" with collective voting power except in respect of the 800,000 Shares
which are subject to the Urban Voting Trust Agreement described in the Schedule
13D. The aggregate number of Shares that may be deemed to be beneficially
owned by each of the Filing Parties individually is as follows:
<PAGE> 8
Name Number of Shares Percentage of Class
- ---- ---------------- -------------------
William M. Passano, Jr. 4,814,612 (1) 52.8%
Michael Urban 802,500 (2) 8.9%
(1) Includes options to purchase 85,000 Shares granted under the
Company's stock option plans.
(2) Includes options to purchase 2,500 Shares granted under the Company's
stock option plans.
(b) Sole Voting and Dispositive Power. William M. Passano, Jr. has sole
voting and sole dispositive power with respect to 218,255 Shares, which
includes options to purchase 85,000 Shares and Michael Urban has sole voting
and dispositive power with respect to 2,500 Shares, which may be acquired by
Michael Urban through options to purchase awarded under the Company's stock
option plans. Michael Urban has sole dispositive power with respect to the
800,000 Shares subject to the Urban Voting Trust Agreement.
Shared Voting Power. Pursuant to the Urban Voting Trust Agreement
described in the Schedule 13D, the Filing Parties share voting power with
respect to 800,000 Shares. William M. Passano, Jr. disclaims beneficial
ownership of such Shares. See Item 2 of this Amendment 2 for information
required by Item 5(b). William M. Passano, Jr. shares voting power with Edward
M. Passano, Sr. and Susan P. Macfarlane with respect to 3,227,822 Shares held
by the Life Estate subject to the Passano Voting Trust Agreement and may be
deemed to share voting power with respect to 495,000 Shares subject to voting
trust agreements with members of the Spahr family as more fully described in
Item 6. William M. Passano, Jr. shares voting power with Susan P. Macfarlane
as co-trustees with respect to 23,462 Shares held in the Ida K. Passano Trust.
William M. Passano, Jr. disclaims beneficial ownership of all such Shares.
Information required by Item 5(b) for Edward M. Passano, Sr. and Susan P.
Macfarlane is as follows:
(a) Edward M. Passano, Sr. (a) Susan P. Macfarlane
(b) 351 West Camden Street (b) 400 Overhill Road
Baltimore, MD 21201 Baltimore, MD 21210
(c) Retired, former Chairman (c) Homemaker; wife of Samuel G.
of the Company's Executive Macfarlane, consultant and
Committee of the Board of former Vice President and
Directors Treasurer of the Company
(d) None (d) None
(e) None (e) None
(f) United States (f) United States
Under certain circumstances described in Item 6, William M. Passano, Jr.
may be deemed to share voting power with Robert Spahr with respect to 155,000
<PAGE> 9
Shares subject to the Spahr Voting Trusts and with John F. Spahr, Jr. with
respect to 155,000 Shares subject to the Spahr Voting Trusts. William M.
Passano, Jr. disclaims beneficial ownership of such Shares. Information
required by Item 5(b) for John F. Spahr, Jr. and Robert Spahr is as follows:
(a) John F. Spahr, Jr. (a) Robert Spahr
(b) 1885 E. Limber Pine Road (b) 136 Grubb Road
Jackson, WY 83001 Malvern, PA 19355
(c) President, Teton Data Systems (c) Self-employed in
Jackson, WY 83001 real estate investing
(d) None (d) None
(e) None (e) None
(f) United States (f) United States
Shared Dispositive Power. William M. Passano, Jr. and Susan P.
Macfarlane share dispositive power as co-trustees with respect to 23,462 Shares
held in the Ida K. Passano Trust. William M. Passano, Jr. disclaims beneficial
ownership of such Shares. William M. Passano, Jr., Edward M. Passano, Sr. and
Susan P. Macfarlane share dispositive power with respect to 3,227,822 Shares
held by the Life Estate subject to the Passano Voting Trust Agreement and
disclaim beneficial ownership of such Shares. William M. Passano, Jr. may be
deemed to share dispositive power with respect to 4,689 Shares held in the
Company's 401K plan for his account. William M. Passano, Jr. disclaims
beneficial ownership of such Shares.
(c) On January 30, 1998, William M. Passano, Jr. exercised options to
purchase 26,000 Shares granted under the Company's Incentive Plan at an
exercise price of $7.875 per Share. Pursuant to the Incentive Plan, the
options were scheduled to expire on February 1, 1998, unless exercised before
such date.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Item 6 of the Schedule 13D is hereby amended and supplemented as follows:
The Offer. The Company, Wolters Kluwer and Newco have entered into an
Agreement and Plan of Merger, dated as of February 10, 1998 (the "Merger
Agreement"), pursuant to which, among other things, Newco has commenced a cash
tender offer for all outstanding Shares (the "Offer") at $39.00 per Share. The
obligation of Newco to purchase Shares tendered in the Offer is conditioned
upon, among other things, two-thirds of the outstanding Shares being tendered
<PAGE> 10
in the Offer and applicable waiting periods under United States and relevant
foreign antitrust laws having expired or terminated. Wolters Kluwer has
agreed to extend the Offer for up to six months, in periods of ten business
days for each such extension, if any of the conditions to the Offer have not
been satisfied or waived at the expiration of the Offer.
The Merger. The Merger Agreement provides, among other things that
subject to certain conditions set forth therein, Newco will be merged (the
"Merger") with and into the Company, with the Company as the surviving
corporation (the "Surviving Corporation") and a wholly owned subsidiary of
Wolters Kluwer. In the Merger, each issued and outstanding Share (other than
treasury Shares, Shares owned by Wolters Kluwer, Newco or any wholly owned
subsidiaries of Wolters Kluwer or the Company) will be converted into the right
to receive $39.00 in cash (or any higher price paid per Share pursuant to the
Offer). Each issued and outstanding share of Newco Common Stock will be
converted into and become one fully paid and non-assessable share of common
stock of the Surviving Corporation.
The Merger Agreement further provides that prior to the effective time of
the Merger, the Company shall pay to the holder of each outstanding stock
option, whether or not then exercisable, an amount in respect thereof equal to
the product of (A) the excess, if any, of the Offer Price over the per Share
exercise price of such option and (B) the number of Shares subject to such
option. In the Merger Agreement, the Company, Wolters Kluwer and Newco have
made customary representations and warranties and additional covenants in order
to effectuate the Merger.
Stock Option Agreement. In connection with the Merger Agreement, certain
stockholders of the Company, including the Filing Parties, (collectively, the
"Stockholders") have entered into a Stock Option and Tender Agreement with
Wolters Kluwer and Newco dated as of February 10, 1998 (the "Stock Option
Agreement"). Pursuant to the Stock Option Agreement, the Stockholders have
agreed to tender their Shares in the Offer and have granted Wolters Kluwer an
option (a "Stock Option") to purchase 5,338,680 Shares (representing
approximately 53.3% of the Shares outstanding) owned by the Stockholders at a
purchase price equal to the Offer Price (or any higher price paid per Share
pursuant to the Offer). The Stock Option becomes exercisable in the event that
the Offer is terminated by Wolters Kluwer under certain circumstances set forth
in the Stock Option Agreement or the Offer expires without the purchase of
Shares thereunder under certain circumstances set forth in the Stock Option
Agreement. The Stock Option is exercisable for six months and one day after it
becomes exercisable (the "Exercise Period").
Pursuant to the Stock Option Agreement, the Stockholders have agreed
to vote all their Shares (i) in favor of the Merger, the Merger Agreement and
the transactions contemplated thereby, (ii) against any action or agreement
that would result in a material breach of a covenant, representation or
warranty or other obligation of the Company under the Merger Agreement and
(iii) against any action or agreement that would materially impede, interfere
with or attempt to discourage the Offer or the Merger. The Stockholders have
agreed to take additional actions with respect to voting of Shares as more
fully described in the Stock Option Agreement if the Merger Agreement is
terminated by the Company because the Board of Directors of the Company has
<PAGE> 11
recommended another acquisition proposal for the Company or the Company has
withdrawn its recommendation of the offer, the Merger Agreement or the Merger.
Pursuant to the Stock Option Agreement, certain Stockholders have agreed that,
in the event that certain Stockholders do not vote as described above, such
Stockholders shall be deemed to have granted Wolters Kluwer a proxy to vote
his, her or its Shares. The proxies terminate if the Offer expires or
terminates without any Shares being purchased thereunder in violation of the
Offer or the Merger Agreement or if Wolters Kluwer or Newco is in violation of
the Stock Option Agreement. Except for the Stock Option, the Stock Option
Agreement terminates on the date on which the Merger Agreement terminates in
accordance with its terms.
Spahr Voting Trust Agreements. Pursuant to four voting trust agreements
(the "Spahr Voting Trust Agreements") executed in March 1991, the 495,000
Shares owned collectively by Mr. Robert Spahr, Mr. John F. Spahr, Jr., Trustees
under the will of John F. Spahr, Sr. and the Christian C. Febiger Spahr, Jr.
Revocable Trust have been placed in voting trusts (the "Spahr Voting Trusts").
William M. Passano, Jr. is a co-trustee of each of the Spahr Voting Trusts
which are scheduled to expire on January 9, 2001. The Shares in each of the
Spahr Voting Trusts must be voted in the same way as the Shares subject to the
Passano Voting Trust described in the Schedule 13D, unless the Shares subject
to the Passano Voting Trust are deadlocked and cannot be voted at all. In the
event of a deadlock, Mr. Robert Spahr and Mr. John F. Spahr, Jr. will each have
the sole right to vote 155,000 Shares of the 495,000 Shares subject to the
Spahr Voting Trusts. William M. Passano, Jr. will have the sole right to vote
the 100,000 Shares owned by the Christian C. Febiger Spahr, Jr. Revocable Trust
and the 85,000 shares owned by the Trustees under the will of John F. Spahr,
Sr., for Dorothy Spahr. The Spahr Voting Trust Agreements are identical to one
another with the exception of the parties thereto and the date of execution.
The descriptions of the Merger Agreement, the Stock Option Agreement and
the Spahr Voting Trust Agreements contained herein do not purport to be
complete, and are qualified in their entirety by reference to such agreements,
which are filed as exhibits to this statement. The terms and conditions of the
Offer are set forth in Newco's Offer to Purchase dated February 18, 1998, and
the related Letter of Transmittal, which have been filed with the Securities
and Exchange Commission (the "Commission") as exhibits to Newco's Tender Offer
Statement on Schedule 14D-1 and to which reference is hereby made for
additional information concerning the Offer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(a) Loan Agreement to Purchase Stock Options, dated January 19, 1998,
between the Company and William M. Passano, Jr.
(b) Agreement and Plan of Merger, dated as of February 10, 1998, by and
among Wolters Kluwer, Newco and the Company (incorporated by
reference to Exhibit 1 of the Schedule 14D-9 filed with the
Commission by the Company on February 18, 1998).
(c) Stock Option and Tender Agreement, dated as of February 10, 1998, by
and among Wolters Kluwer, Newco and certain Stockholders of the
<PAGE> 12
Company (incorporated by reference to Exhibit 4 of the Schedule 14D-9
filed with the Commission by the Company on February 18, 1998).
(d) Voting Trust Agreement between John F. Spahr, Jr. as Subscriber and
John F. Spahr, Jr. and William M. Passano, Jr. as Trustees, dated
March 6, 1991 and Schedule I to Exhibit (d).
<PAGE> 13
SIGNATURE
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.
Date: March 3,1998
/s/ Michael Urban
------------------------------
Dr. Michael Urban
Date: March 3,1998
/s/ William M. Passano, Jr.
------------------------------
William M. Passano, Jr.
Date: March 3,1998
/s/ Michael Urban
------------------------------
Dr. Michael Urban
/s/ William M. Passano, Jr.
------------------------------
William M. Passano, Jr.
Voting Trustees under the
Urban Voting Trust Agreement
dated April 20, 1990
<PAGE> 14
EXHIBIT INDEX
-------------
Exhibit Description
- ------- -----------
(a) Loan Agreement to Purchase Stock Options, dated
January 19, 1998, between the Company and William M.
Passano, Jr.
(b) Agreement and Plan of Merger, dated as of February 10, 1998, by
and among Wolters Kluwer, Newco and the Company (incorporated by
reference to Exhibit 1 of the Schedule 14D-9 filed with the
Commission by the Company on February 18, 1998).
(c) Stock Option and Tender Agreement, dated as of February 10,
1998, by and among Wolters Kluwer, Newco and certain
Stockholders of the Company (incorporated by reference to
Exhibit 4 of the Schedule 14D-9 filed with the Commission by the
Company on February 18, 1998).
(d) Voting Trust Agreement between John F. Spahr, Jr. as Subscriber
and John F. Spahr, Jr. and William M. Passano, Jr. as Trustees,
dated March 6, 1991 and Schedule I to Exhibit (d).
<PAGE> 1
Exhibit (a)
-----------
Loan Agreement
to Purchase Stock Options
This is an agreement between Waverly, Inc. ("Company")
and William M. Passano, Jr. ("Stock Option Holder") dated
January 19, 1998.
The Stock Option Holder wishes to exercise 26,000 option
shares as evidenced by the attached Election Form signed
by the Stock Option Holder.
The Company agrees to advance the exercise price to the
Employee in the amount of $204,750.00 (26,000 shares x
$7.875 per share) referred to as "Loan".
The Stock Option Holder agrees to the following terms and
conditions of the Loan.
1. The Company will hold the shares as collateral
against the Loan.
2. The Stock Option Holder will pay interest on the
Loan principal at an annual interest rate equal to
the actual borrowing rate charged by First National
Bank of Maryland to Waverly, Inc. during the period
the Loan is outstanding.
3. The Stock Option Holder will repay the Loan and
accrued interest no later than the time that such
shares are sold. In any event, the Loan will be
callable at such time as the Stock Option Holder is
freely able to dispose of such shares. Dividends
distributed during the loan period would be credited
to the Company and offset against interest due on
the Loan.
Signed: /s/ E. Philip Hanlon Date: 1/19/98
---------------------------
Waverly, Inc.
Signed: /s/ William M. Passano, Jr. Date: 1/19/98
---------------------------
Stock Option Holder
<PAGE> 1
Exhibit (d)
-----------
VOTING TRUST AGREEMENT
This Agreement is made this 6th day of March,
1991 between John F. Spahr, Jr. (the "Subscriber") and
John F. Spahr, Jr. and William M. Passano, Jr. as
Trustees (the "Trustees").
WHEREAS, the Subscriber and Waverly, Inc. (the
"Corporation") have entered into a Plan and Agreement of
Merger dated January 10, 1991 (the "Merger Agreement")
pursuant to which Lea & Febiger, L.P., a Delaware limited
partnership of which the Subscriber is a limited partner,
will be merged with and into the Corporation; and
WHEREAS, the Merger Agreement provides that, in
partial consideration for Subscriber's entering into the
Merger Agreement, the Corporation shall transfer to an
escrow agent (the "Escrow Agent") a total of Seventy-
Seven Thousand Five Hundred (77,500) shares (the "Waverly
Shares") of the Corporation's Common Stock, par value
$2.00 per share, at the Closing (as defined in the Merger
Agreement) to be held for the account of the Subscriber
on the terms and conditions set forth in the Merger
Agreement and an Escrow Agreement attached thereto as
Exhibit 2(a)(ii) and executed at the Closing (the "Escrow
Agreement") and which is attached as Exhibit A hereto;
and
WHEREAS, the Subscriber and the Trustees
acknowledge that the Trust corpus is subject to the
provisions of the Escrow Agreement, including the
indemnification provisions incorporated by reference
therein; and
WHEREAS, the Subscriber deems it advantageous
to the Corporation, to himself and to the other
stockholders of the Corporation that the Subscriber enter
into this voting trust agreement with respect to the
Waverly Shares:
NOW, THEREFORE, in consideration of the
foregoing premises and the mutual agreements and
covenants contained herein, and subject to the mutual
terms and provisions hereof, the parties hereto covenant
and agree as follows:
1. Upon the terms and conditions herein
stated and subject to the terms and conditions of the
Escrow Agreement, the Subscriber hereby agrees to the
transfer of all of his ownership rights to the Waverly
Shares to the Trustees for the sole purpose of vesting in
term and their successors (as elected hereunder) the
right to vote such shares and further agrees that, upon
<PAGE> 2
any release from escrow of the Waverly Shares or any of
them, the certificates representing the Waverly Shares or
any portion thereof so released shall be deposited with
the Trustees or their authorized agent. The parties
hereto agree to inform the Escrow Agent and the
Corporation of such transfer, and to cooperate in all
respects in order to effect such transfer. The Waverly
Shares and any shares of the Corporation's stock
hereafter issued or delivered to the Escrow Agent as
stock dividends or otherwise (which shall henceforth also
be included in the definition of "Waverly Shares"), shall
be vested in the Trustees and registered in their names
on the books of the Corporation. Only the Trustees may
vote the stock so transferred to them until and including
the earlier to occur of the following, on the occurrence
of which earlier event this Agreement will expire
(hereinafter called the "Expiration Date"): (a) the
execution of a subsequent voting trust agreement of nine
years and 364 days duration in substantially the form of
this agreement or Exhibit A, except that the parties
hereto shall have no obligation to execute such an
agreement if, after January 10, 1993, the Family Voting
Trust Agreement (as defined below) is still in effect,
(b) January 9, 2001, (c) the termination of the Family
Voting Trust Agreement without the subsequent execution
of a successor family voting trust agreement, or any
reduction in the number of Corporation shares subject to
the Family Voting Trust Agreement or any such successor
family voting trust agreement to a number of shares fewer
than the number of shares as are then subject to this
Agreement, or (d) the failure of the shares subject to
the Family Voting Trust Agreement or any such successor
family voting trust agreement to be voted to elect, as a
director of the Corporation, John F. Spahr, Jr., or, in
the event his employment relationship with the
Corporation ceases for any reason whatsoever, either
Christian C.F. Spahr, Jr. or Robert N. Spahr, subject to
their availability and willingness to serve and their
then being employed by the Corporation.
2. Upon the execution and delivery of this
Agreement by the parties hereunto and the assignment by
the Subscriber of his rights and duties under the Escrow
Agreement to the Trustees pursuant to the terms of the
Escrow Agreement, and in connection with subsequent
distributions, such as stock dividends or otherwise, to
the Trustees, as registered holder of the Waverly Shares
(subject to the terms of the Escrow Agreement), the
Trustees will deliver or cause to be delivered to
Subscriber and/or to his designee a voting trust
certificate or certificates, in such form as the Trustees
may approve and adopt, for the number of Waverly Shares
represented by the stock certificate or certificates held
by the Escrow Agent in the Trustees' name on Subscriber's
behalf. Each voting trust certificate shall be signed,
countersigned and registered as the Trustees may direct,
<PAGE> 3
and shall be transferable only on the books of the
Trustees; and until such transfer the Trustees may treat
the registered holder as the owner thereof for all
purposes. Each voting trust certificate shall bear any
legend the Trustees reasonably conclude is appropriate to
reflect restrictions under applicable securities laws.
3. The Trustees exclusively shall possess and
be entitled to exercise, during the term of this
Agreement, all of the rights and powers of absolute
ownership in respect of all stock of the Corporation held
by the Escrow Agent for their account, subject only to
the legended restrictions on the Waverly Shares and the
Escrow Agreement, including the right (a) to vote the
Waverly Shares, (b) to take part in or consent to any
corporate or stockholders' action of any kind and for any
purpose, ordinary or extraordinary (including the right
to vote for election of directors and for or against any
resolution or proposed action requiring the vote or
consent of the Corporation's stockholders), (c) subject
to paragraph 5 below, and to the terms of the Escrow
Agreement, to receive dividends or other distributions on
said stock, and (d) to enter and prosecute any action or
proceeding at law or in equity against or on behalf of
the Corporation or any other person, firm or corporation
which any stockholder might enter or prosecute by virtue
of his ownership of the stock in the Corporation.
Anything in this Agreement to the contrary
notwithstanding, the Trustees shall vote the Waverly
Shares in the same manner as shares (the "Family Shares")
subject to the Voting Trust Agreement dated July 31, 1989
among Edward M. Passano, Sr., as subscriber, and William
M. Passano, Jr., Susan P. Macfarlane and Edward M.
Passano, Sr. as Voting Trustees or the Voting Trust
Agreement contemplated in the Agreement dated February 2,
1981 among William M. Passano, Jr., Susan P. Macfarlane
and E. Magruder Passano, Jr. (collectively, the "Family
Voting Trust Agreement") are voted. If, on any matter
submitted to the stockholders for a vote, the Family
Shares are not voted pursuant to the Family Voting Trust
Agreement, then the Trustees shall vote the Waverly
Shares as instructed by the Subscriber.
4. Anything in this Agreement to the contrary
notwithstanding, during the term of the Escrow Agreement
or thereafter, the Subscriber or his personal
representative, successor or permitted assign shall be
entitled to the release of such of the Withdrawable
Collateral (as that term is defined in Section 8 of the
Escrow Agreement), as might be available pursuant to the
terms of the Escrow Agreement or as would have been
available had the Escrow Agreement still been in effect.
Trustees agree that upon presentation to them of voting
trust certificates applicable to any such Withdrawable
Collateral by the Subscriber and a certificate (the
<PAGE> 4
"Withdrawal Certificate") executed by said Subscriber or his
personal representative, successor or assign as to the
number of shares to be withdrawn, setting forth the basis
for such determination in reasonable detail, Trustees
shall: (a) use their best efforts to obtain the release
of the Waverly Shares indicated by the Withdrawal
Certificate in accordance with the terms of the Escrow
Agreement, if still in effect, and (b) the Trustees shall
promptly deliver such Withdrawable Collateral as is or
comes into their possession to the Subscriber in exchange
for the voting trust certificates delivered to them by
the Subscriber, which certificates the Trustees shall
immediately cancel, and the Trustees shall thereupon
issue a new voting trust certificate to the Subscriber
which reflects the reduction in the amount of the Waverly
Shares still subject hereto. Except as set forth in this
Paragraph 4 or in Paragraph 9 below, the Waverly Shares
shall not be withdrawn from this Agreement or transferred
to any person prior to the expiration of this Agreement
without the prior written consent of the Subscriber (or
his successor(s), personal representatives or assigns)
and both Trustees.
5. Subject to the terms of the Escrow
Agreement, the registered holders of the voting trust
certificate or certificates shall be entitled to receive
directly from the Trustees any cash dividends or any
other assets that do not entitle their holder, directly
or indirectly, to vote on any decision affecting the
Corporation, in either case collected by or distributed
to the Trustees with respect to the Waverly Shares and
also to receive additional voting trust certificates for
any additional shares issued to the Trustees in respect
of said stock by means of stock splits, stock dividends,
or the like, or purchase warrants, exchanges of shares or
certificates evidencing ownership of any other
distribution made to all shareholders of the
Corporation's common stock (including any other assets
that entitle their holders, directly or indirectly, to
vote on any decision affecting the Corporation), and such
additional shares and distributions shall be held by the
Trustees pursuant to this Agreement.
6. On the Expiration Date of this Agreement
or any successor agreement substantially in the form of
this Agreement or Exhibit A, whichever date is later, the
Trustees shall distribute the stock and any other
securities or assets or rights to such stock, securities
or other assets then held by them to the registered
holders of the voting trust certificates, in exchange for
and in accordance with the voting trust certificates duly
endorsed to the Trustees by such registered holders. Any
stock, securities, or other assets distributable to the
holder of each voting trust certificate which is not so
surrendered within thirty days after notice has been
mailed to him shall be deposited for his account by the
<PAGE> 5
Trustees with an agent selected by them, and the Trustees
shall thereupon be relieved of and discharged from all
further obligation and liability hereunder.
7. Upon the death or disability of William M.
Passano, Jr., or upon his ceasing to serve as Chairman of
the Corporation, his successor or any subsequent
successors as Chief Executive Officer of the Corporation
shall serve as Co-Trustee in his place and stead. The
Subscriber may designate a successor to serve as Co-
Trustee upon his death or disability. Such designation
shall be made by an instrument signed by the Subscriber
and delivered to William M. Passano, Jr. or any successor
or subsequent successors of William M. Passano. Jr. as
Co-Trustee. If the Subscriber fails to designate a
successor Co-Trustee in the manner provided above,
William M. Passano, Jr. or any successor or subsequent
successors of William M. Passano, Jr. as Co-Trustee shall
act as the sole Trustee. The Trustees may act in all
matters in person or by proxy. A Trustee shall not be
prohibited from voting with the Family Shares hereunder
solely because such a vote may result in the election of
the Trustee as a director, officer or agent of the
Corporation.
8. This Agreement shall be binding upon the
Subscriber and his heirs, personal representatives and
assigns.
9. The parties agree that the Waverly Shares
and the property in respect of such Shares which is
retained in escrow pursuant to the Escrow Agreement (the
"Collateral") are subject to indemnification obligations
set forth in the Merger Agreement and incorporated into
the Escrow Agreement. In accordance with the obligations
set forth in the Escrow Agreement, some or all of the
Collateral may be released from escrow and transferred to
the Corporation in satisfaction of the indemnification
obligations of the Subscriber to the Corporation. In
such event, the procedures for notice and release from
escrow contained in the Escrow Agreement shall control,
and any Waverly Shares included in the Collateral
released from escrow shall also be deemed withdrawn from
the voting trust established hereunder (the "Voting
Trust") and any voting certificates relating to such
Waverly Shares held by Subscriber or their personal
representatives, successors or permitted assigns shall
thereupon be cancelled and be of no further effect. The
Voting Trust shall remain in full force and effect as to
any Collateral not transferred in connection with such
indemnification. Upon notification by the Corporation,
the Escrow Agent or any Subscriber of the release of any
Collateral pursuant to the indemnification obligation of
the Subscriber, the Trustees shall cancel the outstanding
voting rights certificates and issue new certificates in
the amount of the Waverly Shares remaining in the Voting
<PAGE> 6
Trust. In the event that voting trust certificates are
held by more than one party, the voting trust
certificates held by the Subscriber will be cancelled
first; if the Subscriber no longer holds any such
certificates, the voting trust certificates to be
cancelled shall be cancelled pro rata among the
registered holders thereof.
10. This Agreement may be executed in several
parts of like tenor, each of which, when executed, shall
be deemed to be an original, and such parts shall
together constitute one and the same instrument.
11. This Agreement is executed in the State of
Maryland, and the laws of Maryland and the federal law of
the United States shall govern its interpretation and
effect.
IN WITNESS WHEREOF, the parties hereto have
respectively executed this Agreement as a document under
seal as of the day and year first above written.
WITNESS:
/s/ Melanie L. Cann /s/ John F. Spahr, Jr.
-------------------------- ------------------------------
John F. Spahr, Jr.
Subscriber
/s/ H.J. van der Vaart /s/ William M. Passano, Jr.
-------------------------- -------------------------------
William M. Passano, Jr.
Trustee
/s/ Melanie L. Cann /s/ John F. Spahr, Jr.
-------------------------- -------------------------------
John F. Spahr, Jr.
Trustee
<PAGE> 7
EXHIBIT (d)
SCHEDULE I
The following voting trust agreements are
identical to the Voting Trust Agreement set forth in
Exhibit (d) except for the dates of execution and the
parties to each such agreement:
1. Voting Trust Agreement, between John F. Spahr
as Subscriber and John F. Spahr and William M.
Passano, Jr. as Trustees, dated March 6, 1991.
2. Voting Trust Agreement, between Robert N. Spahr
as Subscriber and Robert N. Spahr and William
M. Passano, Jr. as Trustees, dated March 15,
1991.
3. Voting Trust Agreement, between Christian C.F. Spahr,
Jr. as Subscriber and Christian C.F. Spahr, Jr.
and William M. Passano, Jr. as Trustees, dated
March 15, 1991.
