UNITED MAGAZINE CO, SC 13D, 1996-08-09

UNITED MAGAZINE CO
SC 13D, 1996-08-09
REAL ESTATE

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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 13D

under the Securities Exchange Act of 1934

UNITED MAGAZINE COMPANY
(Name of Issuer)

Common Stock, no par value
(Title and Class of Securities)

17499303-0
(Cusip Number)

Ruth Hunter Smith, Esq.
5131 Post Road
Dublin, Ohio 43017
(614) 792-0777
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

With copies to:

Robert K. Rupp, Esq.
Baker & Hostetler
65 East State Street, Suite 2100
Columbus, Ohio 43215
(614) 228-1541

July 30, 1996
(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: [ ]

Check the following box if a fee is being paid with this Schedule: [X]

<PAGE> 2

CUSIP No. 17499303-0

<TABLE>
<S> <C> <C>
(1) Names of Reporting Persons. S.S.
or I.R.S. Identification Nos. of
Above Persons Ohio Periodical Distributors, Inc. 31-0733891
- --------------------------------------------------------------------------------------------------------------------------
(2) Check the Appropriate Box if a (a) x
Member of a Group (see
instructions)
-------------------------------------------------------------
(b)
- --------------------------------------------------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------------------------------------------------
(4) Source of Funds (see instructions) 00 (other)
- --------------------------------------------------------------------------------------------------------------------------
(5) Check if Disclosure of Legal
Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- --------------------------------------------------------------------------------------------------------------------------
(6) Citizenship or Place of Organization Ohio
- --------------------------------------------------------------------------------------------------------------------------
Number of Shares (7) Sole Voting
Beneficially Owned Power 5,000,000
by Each Reporting
Person With
--------------------------------------------------------------------------------------------
(8) Shared Vot-
ing Power
--------------------------------------------------------------------------------------------
(9) Sole Disposi-
tive Power 5,000,000
--------------------------------------------------------------------------------------------
(10) Shared
Dispositive
Power
- --------------------------------------------------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially
Owned by Each Reporting Person 5,000,000
- --------------------------------------------------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in
Row (11) Excludes Certain Shares
(see instructions)
- --------------------------------------------------------------------------------------------------------------------------
(13) Percent of Class Represented by
Amount in Row (11) 18.76%
- --------------------------------------------------------------------------------------------------------------------------
(14) Type of Reporting Person (see
instructions) CO
</TABLE>

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<PAGE> 3
Item 1. Security and Issuer.
--------------------

The class of equity securities to which this statement relates is the
common shares, without par value, of United Magazine Company, an Ohio
corporation (the "Company"). The principal executive offices of the Company are
located at 5131 Post Road, Dublin, Ohio 43017.

Item 2. Identity and Background.
------------------------

The members of the group are:

(a) Ronald E. Scherer ("Scherer")

(b) 5131 Post Road
Dublin, Ohio 43017

(d) During the last five years, Mr. Scherer has not been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors).

(e) During the last five years, Mr. Scherer has not been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which proceeding Mr.
Scherer was or is 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) U.S. citizen.

- ------------------------------------------------------------------------------

(a) R. David Thomas ("Thomas")

(b) One Bay Colony
Ft. Lauderdale, FL 33308

(c) Senior Chairman of the Board and Founder
Wendy's International, Inc.
restaurant operator and franchisor
Box 256
Dublin, Ohio 43017

(d) During the last five years, Mr. Thomas has not been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors).

(e) During the last five years, Mr. Thomas has not been a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which proceeding Mr.
Thomas was or is 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) U.S. citizen.

- ------------------------------------------------------------------------------

- 4 -

<PAGE> 4

(a) Ohio Periodical Distributors, Inc. ("OPD")

(b) State of organization: Ohio

(d) During the last five years, OPD has not been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).

(e) During the last five years, OPD has not been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which proceeding OPD was
or is 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.

- ------------------------------------------------------------------------------

The executive officers and directors of OPD are Ronald E. Scherer,
David B. Thompson, Eugene J. Alfonsi and Ruth Hunter Smith. The following is
information relating to Mr. Thompson, Mr. Alfonsi and Ms. Smith:

(a) David B. Thompson

(b) 5131 Post Road
Dublin, Ohio 43017

(d) During the last five years, Mr. Thompson has not been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).

(e) During the last five years, Mr. Thompson has not been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which proceeding Mr.
Thompson was or is 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) U.S. citizen.

- ------------------------------------------------------------------------------

- 5 -

<PAGE> 5

(a) Eugene J. Alfonsi

(b) 5131 Post Road
Dublin, Ohio 43017

(d) During the last five years, Mr. Alfonsi has not been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors).

(e) During the last five years, Mr. Alfonsi has not been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which proceeding Mr.
Alfonsi was or is 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) U.S. citizen.

- ------------------------------------------------------------------------------

(a) Ruth Hunter Smith

(b) 5131 Post Road
Dublin, Ohio 43017

(d) During the last five years, Ms. Smith has not been convicted
in a criminal proceeding (excluding traffic violations or
similar misdemeanors).

(e) During the last five years, Ms. Smith has not been a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which proceeding Ms.
Smith was or is 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) U.S. citizen.

- ------------------------------------------------------------------------------

- 6 -

<PAGE> 6

The persons controlling OPD are the Linda S. Haynor Trust and the
Ronald E. Scherer Trust.

(a) The Linda S. Haynor Trust

(b) State of organization: Ohio

(d) During the last five years, the Linda S. Haynor Trust has not
been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).

(e) During the last five years, the Linda S. Haynor Trust has not
been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of
which proceeding the Linda S. Haynor Trust was or is 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.

- ------------------------------------------------------------------------------

(a) The Ronald E. Scherer Trust

(b) State of organization: Ohio

(d) During the last five years, the Ronald E. Scherer Trust has
not been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).

(e) During the last five years, the Ronald E. Scherer Trust has
not been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of
which proceeding the Ronald E. Scherer Trust was or is 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.

Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------

This Schedule 13D is being filed to report the possible formation of a
group for voting purposes. None of the members of the group has acquired any
additional securities of the Company, so no funds or other consideration were
paid in connection with the transaction subject to this Schedule.

Item 4. Purpose of the Transaction.
---------------------------

Pursuant to an Option Agreement dated March 1, 1996 (the "Michiana
Option Agreement"), between the Company and Thaddeus A. Majerek, individually
and on behalf of the shareholders of Michiana News Services, Inc. (collectively,
the "Michiana Shareholders"), the Company was granted an option to acquire
Michiana News Services, Inc. ("Michiana") generally pursuant to the terms set
forth in the Michiana Option Agreement. Pursuant to the Michiana Option
Agreement, the Company has entered into negotiations with Michiana and the

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<PAGE> 7

Michiana Shareholders. Effective July 30, 1996, the Company entered into a Stock
Transfer and Exchange Agreement with the shareholders of Michiana pursuant to
which the Michiana Shareholders are to transfer all of the outstanding shares of
capital stock in Michiana to the Company in exchange for common shares, without
par value, of the Company and Senior and Subordinated Debentures of the Company.
The Stock Transfer and Exchange Agreement is subject to a number of conditions,
including approval by the shareholders of the Company and consummation of the
transactions with Stoll and the Scherer Affiliates described below. DUE TO THESE
CONDITIONS, THERE CAN BE NO ASSURANCE THAT THE TRANSACTION WITH MICHIANA WILL BE
COMPLETED.

Pursuant to an Option Agreement dated March 1, 1996 (the "Stoll Option
Agreement"), between the Company and The Stoll Companies, the Company was
granted an option to acquire The Stoll Companies ("Stoll") generally pursuant
to the terms set forth in The Stoll Option Agreement. Pursuant to the Stoll
Option Agreement, the Company entered into negotiations with Stoll and its
shareholders (the "Stoll Shareholders"). Effective July 31, 1996, the Company
entered into a Stock Transfer and Exchange Agreement with the principal
shareholders of Stoll. Pursuant to the Agreement, the Stoll Shareholders are
to transfer all of the outstanding shares of capital stock in Stoll to the
Company in exchange for common shares, without par value, of the Company and
Senior and Subordinated Debentures of the Company. The agreement needs to be
signed by the remaining Stoll Shareholders and is subject to a number of other
conditions, including approval by the shareholders of the Company and
consummation of the transactions with Michiana described above and with the
Scherer Affiliates described below. DUE TO THESE CONDITIONS, THERE CAN BE NO
ASSURANCE THAT THE TRANSACTION WITH STOLL WILL BE COMPLETED.

Pursuant to an Option Agreement dated March 1, 1996 (the "Option
Agreement"), between the Company and Linda (Scherer) Talbott individually and on
behalf of the shareholders of Ohio Periodical Distributors, Inc. ("OPD"),
Northern News Company, and its subsidiary, MacGregor News Agency, Inc.
(collectively, "Northern"), the Company was granted an option to acquire, at the
option of the seller, all or substantially all of the wholesale periodical
distribution assets and assume all or substantially all of the wholesale
periodical distribution liabilities of OPD and Northern, generally pursuant to
the terms set forth in the Option Agreement. OPD, MacGregor, Northern, and the
Scherer Companies, are companies affiliated with Ronald E. Scherer, senior
chairman of the Company (collectively, the "Scherer Affiliates"). The Company
has entered into negotiations with the Scherer Affiliates and their shareholders
(the "Scherer Shareholders"). The Company is continuing to negotiate with the
Scherer Affiliates and has not yet entered into definitive agreements with them.
The Company has filed with the Federal Trade Commission under the Hart Scott
Rodino Antitrust Improvements Act of 1976 for approval of the acquisition of
OPD, and that application is still pending. As a result of the transactions
described in this paragraph, Ronald E. Scherer would acquire additional common
shares of the Company. However, when combined with the transactions to be
entered into with Stoll and Michiana, his percentage interest in the Company is
expected to decrease. THERE CAN

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<PAGE> 8

BE NO ASSURANCE THAT TRANSACTIONS WITH OPD OR WITH ANY OF THE SCHERER AFFILIATES
WILL BE COMPLETED.

The agreements with Stoll and Michiana provide that at the closing of
the transactions, a shareholder voting agreement will be entered into pursuant
to which two Scherer Company representatives, two Stoll Company representatives
and one Michiana representative would be elected to the Company's board of
directors until such time as the Debentures have been paid. It is anticipated
that the board of directors will be increased from five to seven members at the
Company's annual shareholders meeting and that two Stoll representatives will be
nominated for election to the existing board.

Each of the foregoing transactions will require the approval of
shareholders of the Company exercising voting power over a majority or more of
the outstanding common shares of the Company. Additionally, the Company does not
currently have a sufficient number of common shares authorized to enable it to
complete the share issuances necessary to complete all of the foregoing
described transactions. The board of directors of the Company has authorized a
reverse stock split (the exact exchange ratio still to be determined) of the
Company's outstanding common shares, subject to shareholder approval, which will
provide sufficient authorized shares to complete the proposed transactions. In
order to provide more assurance of the completion of the proposed transactions,
each of the members of the group filing this Schedule 13D have agreed in writing
(i) to vote their outstanding common shares of the Company in favor of the
proposed transactions and in favor of the proposed reverse stock split, and (ii)
not to sell or otherwise transfer or dispose of any common shares of the Company
until the annual meeting of shareholders of the Company to be held prior to
December 31, 1996. Such persons have the right to exercise voting power over
shares constituting, in the aggregate, 50.46% of the outstanding common shares
of the Company. See Item 5.

R. David Thomas, KDR Limited, an Ohio limited liability company
("KDR") of which R. David Thomas is a member, OPD and the Company have entered
into discussions regarding the assumption by the Company of the obligations of
OPD under a promissory note dated July 31, 1992 from OPD to R. David Thomas in
the principal amount of $5,000,000 with interest at the rate of 11.75% per annum
(the "Note"). The unpaid principal balance of the Note is $5,000,000, and the
Note is currently due on demand. The Note has been assigned to KDR which is the
current holder. The Note is secured by a pledge from OPD of 5,000,000 common
shares of the Company owned by OPD. As proposed, KDR will exchange the Note for
a new note from Unimag. Although the Company and KDR have not reached a final
agreement on the new note, it is contemplated that the interest rate would be
lower, the new note would become due at a future date, and the new note would be
subordinated to certain other debt of the Company. In consideration for KDR's
agreement to the new note, the Company would make a partial payment of the
principal of the Note (a payment of $500,000 is currently proposed) and issue to
KDR warrants to purchase additional common shares of the Company. The terms of
these warrants have not been decided. Additionally, the Company has discussed
with Mr. Thomas, in connection with the exchange of the notes, nominating a
representative of Mr. Thomas for election to the Company's board of directors.
The Company has also discussed with R. David Thomas a proposal for Mr. Thomas to
purchase from the Company an additional $500,000 of common shares of the Company
for a purchase price of $1.50 per share. THERE CAN BE NO ASSURANCE THAT ANY OF
THE TRANSACTIONS DESCRIBED IN THIS PARAGRAPH WILL OCCUR OR THAT THE
TRANSACTIONS, IF CONSUMMATED, WILL BE ON THE TERMS DESCRIBED IN THIS PARAGRAPH.

Other than as described or referred to above, none of the persons
filing this Schedule 13D has any present plans or proposals which relate to or
would result in: (a) the acquisition by any person of additional securities of
the Company or the disposition of securities of the Company; (b) an
extraordinary corporate transaction, such as a merger, reorganization or

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<PAGE> 9

liquidation, involving the Company or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present board of directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure; (g)
changes in the Company's Articles of Incorporation or Code of Regulations or
other actions which may impede the acquisition or control of the Company by any
person; (h)causing the shares to cease to be authorized to be quoted in an
interdealer quotation system or a registered national securities association;
(i) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) any action similar to any of those enumerated above. Each of the parties
filing this Schedule 13D reserves the right to formulate plans or proposals, and
to take such action, in the future with respect to any or all of the matters
referred to in this Item and any other matters as any of them may determine.

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<PAGE> 10

Item 5. Interest in Securities of the Issuer.
-------------------------------------

(a)

<TABLE>
<CAPTION>
Common Shares Percent of
Name Beneficially Owned Class
---- ------------------ -----
<S> <C> <C>
Ronald E. Scherer 5,456,000 20.46%

Ohio Periodical
Distributors, Inc. 5,000,000 18.76%

R. David Thomas 3,000,000 11.25%

RAP Diversified, Inc.(1) 589,000 2.21%

<FN>
------------------

(1) The shares of RAP Diversified, Inc. ("RAP"), a
Delaware corporation are owned by David B. Thompson,
Trustee for the benefit of the children of Ronald E.
Scherer. RAP and Mr. Scherer constitute a group
within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, although Mr. Scherer
disclaims beneficial ownership of the shares owned by
RAP.

(b) The nature of the beneficial ownership for all shares listed
above is sole voting and investment power.

(c) No transactions in the Company's common shares were effected
by the persons filing this Schedule 13D during the last 60
days.

</TABLE>

Item 6. Contracts, Arrangements, Understanding or Relationships with Respect
--------------------------------------------------------------------
to Securities of the Issuer.
----------------------------

Except for the Stock Transfer and Exchange Agreements described in Item
4, the Asset Transfer and Exchange Agreement described in Item 4, the option
agreements described in Item 4 and the written agreement of the members of the
group filing this Schedule 13D described in Item 4, there are no other
contracts, arrangements, understandings or relationships among the persons
named in Item 2 or between such persons and others with respect to the
securities of the Company.

Item 7. Material to be Filed as Exhibits.
---------------------------------

1. Letter agreements of Ronald E. Scherer and Ohio Periodical
Distributors, Inc. dated as of July 29, 1996, and letter agreement of
R. David Thomas dated July 30, 1996.

- 11 -

<PAGE> 11

Signatures
----------

After reasonable inquiry and to the best of their knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.

Dated: August 8, 1996

/s/ R. DAVID THOMAS /s/ RONALD E. SCHERER
- ------------------------------------ ------------------------------------
R. David Thomas Ronald E. Scherer

OHIO PERIODICAL DISTRIBUTORS, INC.

By /s/ RONALD E. SCHERER
---------------------------------

Ronald E. Scherer, President
- 12 -

<PAGE> 1
EXHIBIT 1

RONALD E. SCHERER
SENIOR CHAIRMAN

United Magazine Company
5131 Post Road
Dublin, Ohio 43017

Dear Sirs:

The undersigned has reviewed the terms of the proposed transactions in
which United Magazine Company, an Ohio corporation ("Unimag") will acquire
assets of Ohio Periodical Distributors, Inc., The Scherer Companies, and
Northern News Company and will acquire the capital stock of The Stoll Companies
and Michiana News Service, Inc. (collectively, the "Acquisitions"). The
undersigned believes the Acquisitions will be in the best interests of Unimag
and its shareholders. Accordingly, the undersigned states that:

(a) at a meeting of Unimag's shareholders, to be held on or before
December 31, 1996, at which proposals to approve the Acquisitions and certain
amendments to Unimag's articles of incorporation to effect a reverse stock
split, the undersigned will vote all of the common shares of Unimag which the
undersigned has the power or is entitled to vote (personally, as a fiduciary or
otherwise) in favor of such proposals; and

(b) the undersigned will not, prior to such meeting to be held on or
before December 31, 1996, sell or otherwise transfer or dispose of any of the
shares of Unimag owned by the undersigned.

This document shall not constitute a proxy, or a consent or approval
under section 1701.54, Ohio Revised Code, or an authorization of anyone to act
on behalf of the undersigned.

Very truly yours,

/s/ Ronald E. Scherer

Ronald E. Scherer, an Individual

/s/ Ronald E. Scherer
---------------------------------
Ronald E. Scherer, Chairman
Dated: 7/29/96 Ohio Periodical Distributors, Inc.
--------------------

<PAGE> 2

R. DAVID THOMAS

July 30, 1996

United Magazine Company
5131 Post Road
Dublin, Ohio 43017

Dear Sirs:

The undersigned has reviewed the terms of the proposed transactions in
which United Magazine Company, an Ohio corporation ("Unimag") will acquire
assets of Ohio Periodical Distributors, Inc., The Scherer Companies and
Northern News Company and will acquire the capital stock of The Stoll Companies
and Michiana News Service, Inc. (collectively, the "Acquisitions"). The
undersigned believes the Acquisitions will be in the best interests of Unimag
and its shareholders. Accordingly, the undersigned states that:

(b) the undersigned will not, prior to such meeting to be held on or
before December 31, 1996, sell or otherwise transfer or dispose of any of the
shares of Unimag owned by the undersigned.

This document shall not constitute a proxy or a consent or approval
under section 1701.54, Ohio Revised Code, or an authorization of anyone to act
on behalf of the undersigned.

Very truly yours,

/s/ R. David Thomas

R. David Thomas