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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------------
Date of Report (Date of earliest event reported): July 26, 1996
UNITED MAGAZINE COMPANY
(Exact Name of Registrant as Specified in Charter)
Ohio 0-2675 31-0681050
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5131 Post Road 43017
Dublin, Ohio (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (614) 792-0777
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The Form 8-K of United Magazine Company dated July 26, 1996, as amended, is
being further amended to file as exhibits to such Form 8-K the documents listed
in Item 7 below.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The following exhibits are included herein:
1. Agreement Purchase and Sale of Business Assets dated as of October 21, 1996,
between Toman Distribution Services, Inc. and United Magazine Company.
2. Stock Transfer Agreement effective as of July 29, 1996, between Northern News
Company and Arthur C. Foster, Sr.
3. Shareholder Voting Agreement among United Magazine Company, Ronald E.
Scherer, Linda Scherer Talbott, Ohio Periodical Distributors, Inc.,
Wholesalers Leasing Corp., Northern News Company, Read-mor Book Stores, Inc.,
The Scherer Companies, the shareholders of The Stoll Companies, and the
shareholders of Michiana News Service, Inc. dated as of October 9, 1996.
4. Statement of the Parties signed on behalf of The Stoll Companies, Michiana
News Service, Inc., The Scherer Companies, Geo. R. Klein News Company,
Central News Company, and Newspaper Sales, Inc., all dated January 1997.
5. Employment Agreement dated as of October 24, 1996, between Richard Stoll, Jr.
and United Magazine Company.
6. Employment Agreement dated as of October 21, 1996, between Thaddeus A.
Majerek and United Magazine Company.
7. Form of Management Agreement to be entered into between United Magazine
Company, and Klein Management Co.
8. First Amendment to Amended and Restated Stock Transfer and Exchange Agreement
effective as of August 1, 1996, among United Magazine Company, Ohio
Periodical Distributors, Inc., and all of the shareholders of Ohio Periodical
Distributors, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
UNITED MAGAZINE COMPANY
(Registrant)
Date: July 31, 1997 By: /s/ Thomas L. Gerlacher
------------------------------------
Name: Thomas L. Gerlacher
-----------------------------------
Title: Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Exhibit Description Page No.
- ----------- ------------------- --------
2(r) Agreement Purchase and Sale of Business
Assets dated as of October 21, 1996, between
Toman Distribution Services, Inc. and United
Magazine Company.
2(s) Stock Transfer Agreement effective as of July
29, 1996, between Northern News Company and
Arthur C. Foster, Sr.
2(t) Shareholder Voting Agreement among United
Magazine Company, Ronald E. Scherer, Linda
Scherer Talbott, Ohio Periodical
Distributors, Inc., Wholesalers Leasing
Corp., Northern News Company, Read-mor Book
Stores, Inc., The Scherer Companies, the
shareholders of The Stoll Companies, and the
shareholders of Michiana News Service, Inc.
dated as of October 9, 1996.
2(u) Statement of the Parties signed on behalf of
The Stoll Companies, Michiana News Service,
Inc., The Scherer Companies, Geo. R. Klein
News Company, Central News Company, and
Newspaper Sales, Inc., all dated January
1997.
2(v) Employment Agreement dated as of October 24,
1996, between Richard Stoll, Jr. and United
Magazine Company.
2(w) Employment Agreement dated as of October 21,
1996, between Thaddeus A. Majerek and United
Magazine Company.
2(x) Form of Management Agreement to be entered
into between United Magazine Company, and
Klein Management Co.
2(y) First Amendment to Amended and Restated Stock
Transfer and Exchange Agreement effective as
of August 1, 1996, among United Magazine
Company, Ohio Periodical Distributors, Inc.,
and all of the shareholders of Ohio
Periodical Distributors, Inc.
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Exhibit 2(r)
AGREEMENT
PURCHASE AND SALE OF BUSINESS ASSETS
This Purchase Agreement is made on October 21, 1996, between:
Seller: Toman Distribution Services, Inc.
2232 South 11th Street
Niles, MI 49120
and
Purchaser: United Magazine Company
5131 Post Road
Dublin, OH 43017
(collectively referred to as the "parties")
RECITALS
This Purchase Agreement is made with reference to the following facts and
circumstances:
A. Seller owns and desires to sell a certain trucking business and certain
assets used in connection with the business ("Business"), with principal
offices situated at 2232 South 11th Street, Niles, MI ("Location") operated
under the name of Toman Distribution Services, Inc., at the Location,
consisting of the assets described in Exhibit A.
B. Purchaser desires to purchase Seller's interest in the business as a going
concern.
C. The parties have agreed to set forth their agreement in writing.
The parties agree as follows:
AGREEMENT
1. AGREEMENT TO PURCHASE AND SELL
1.1 SALE. Seller agrees to sell and Purchaser agrees to purchase the entire
interest of Seller in the following:
A. The customer contracts, accounts receivable, 6 trailers and other assets
owned by Seller, as set forth in Exhibit A.
B. Customer lists and all files, and records of or pertaining to Seller's
business used by Seller in connection with the business (except those
items, if any, required to be retained by law).
C. Good will of the business as a going concern, all telephone numbers and
yellow page advertisements, and the right to the use of the name: Toman
Distribution Services (to preclude Seller from engaging in business under
that name); for this purpose, Seller shall cease using that name at the
closing.
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1.2 RESERVED.
2. PURCHASE PRICE. The purchase price for the assets shall be One Dollar
($1.00), together with the assumption of the contracts and liabilities set
forth in Exhibit B, which liabilities Purchaser assumes and agree to pay in
accordance with the terms thereof and shall indemnify and hold Seller
harmless with respect to such contracts and indebtedness.
3. TERMS OF PAYMENT. The purchase price shall be paid in full at closing.
4. ADJUSTMENTS
At the closing, the following shall be adjusted or apportioned:
4.1 TAXES ON PERSONALTY. Purchaser shall pay all taxes and assessments that may
be levied on any assets being purchased and sold, which become due after
the date of the closing, and, further, Seller shall pay for taxes that may
be due prior to and including the date of the closing; furthermore, there
shall be no reimbursement for any prorated portion of any tax year on the
personalty between Purchaser and Seller.
4.2 MISCELLANEOUS BUSINESS TAXES. All social security, sales, use,
unemployment, withholding, and single business taxes for all years up to
and including the last completed tax year and all quarters for the current
tax year immediately preceding the date of the closing shall be paid in
full by Seller.
4.3 MISCELLANEOUS. Adjustments shall be made at the closing for any of the
following, if applicable: Payroll and any other prepaid items, and any
unpaid taxes. The net amount of any of the adjustments shall either be an
increase or decrease in the obligations to be assumed at the closing.
5. BULK TRANSFERS ACT COMPLIANCE
5.1 AGREEMENT OF PAYMENT. If:
A. Any indebtedness or liability of Seller (not assumed by Purchaser)
pertaining to the personal property conveyed pursuant to this Agreement
(property) becomes a lien upon the property, and
B. Seller has a legal obligation to pay for such indebtedness;
Seller, on written notice given by Purchaser to Seller, shall pay for the
same and/or obtain the release of any lien on the property within six
months or before the seizure of the property, if earlier.
5.2 WAIVER. Purchaser has agreed to waive compliance (before the closing) with
any applicable provisions of Article VI of the Uniform Commercial Code, as
adopted within the state of Michigan, regarding bulk sales (Bulk Transfers
Act), based on the representations of Seller set forth within this
Agreement. BY THIS WAIVER, NEITHER PARTY ACKNOWLEDGES THE APPLICABILITY OF
THE BULK TRANSFERS ACT TO THIS TRANSACTION AND NEITHER PARTY CONFERS ON ANY
THIRD PARTY ANY RIGHT TO ASSERT THE PROVISIONS OF THE BULK TRANSFERS ACT IF
NOT OTHERWISE INAPPLICABLE TO THIS TRANSACTION.
6. REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SELLER
Seller represents, covenants, and warrants the following to be true:
6.1 ORGANIZATION AND STANDING OF SELLER. Seller (sometimes referred to in this
Agreement as "Company") is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Michigan.
6.2 CONDUCT OF BUSINESS OF COMPANY. The business shall remain open for business
and shall be
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conducted by Company in a normal and regular manner until and including the
date of the closing.
6.3 CONDITION OF ASSETS OF COMPANY. The following representations are made with
respect to Company assets being purchased and sold:
A. The assets shall be in the same condition, ordinary use excepted, as of
the date of the closing;
B. The assets are presently operating and have been regularly maintained
and will be in the same working condition as of the date of the
closing;
C. There are no known defects, hidden or otherwise, that have not been
disclosed to Purchaser; and
D. There are no outstanding citations issued by any governmental agency
(including OSHA) having jurisdiction over the operation of Company's
assets and business.
6.4 NO VIOLATION OR BREACH OF COMPANY. The performance of this Agreement will
not be in violation of any laws, statutes, local ordinances, state or
federal regulations, court or administrative order, or ruling, nor is the
performance of this Agreement in violation of any loan document's
conditions or restrictions in effect for financing, whether secured or
unsecured.
6.5 RELIANCE. The foregoing representations and warranties are made with the
knowledge and expectation that Purchaser is placing complete reliance on
them.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents, covenants, and warrants the following to be true:
7.1 STATUS OF PURCHASER. Purchaser is an Ohio corporation, duly incorporated
and validly existing in good standing under the laws of the state of Ohio.
7.2 AUTHORITY. Purchaser has the power and authority to enter into and perform
Purchaser's obligation under this Agreement.
7.3 ASSETS. Purchaser acknowledges that Purchaser has had an opportunity to
inspect and is familiar with the assets of Company and agrees to accept
same "AS IS," subject to the representations of Seller, including any
representations regarding the condition of the assets.
7.4 RELIANCE. The foregoing representations and warranties are made by
Purchaser with the knowledge and expectation that Seller is placing
complete reliance on them.
8. ACCESS AND INFORMATION
8.1 RELEASE OF INFORMATION. Seller shall cause Company to provide to Purchaser
and to Purchaser's agents full access, during normal business hours,
throughout the period before the closing, to all of Company's properties,
books, contracts, commitments, and records and shall furnish to Purchaser
during that period all the information concerning Company's affairs that
Purchaser may reasonably request.
8.2 CONFIDENTIALITY. Purchaser acknowledges that, pursuant to the right to
inspect Company's books, records, and other documents and material,
Purchaser may become privy to confidential information of Company, and that
communication of such confidential information to third parties (whether or
not such communicated information is authorized by Purchaser) could injure
Company's business in the event that this transaction is not completed.
Purchaser agrees to take reasonable steps to ensure that such information
about Company, obtained by Purchaser, shall remain confidential and shall
not be
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disclosed or revealed to outside sources, and further agrees not to
solicit any customers of Company disclosed from such confidential
information. As used in this Agreement, CONFIDENTIAL INFORMATION
includes information ordinarily known only to Company personnel, an
information such as customer lists, supplier lists, trade secrets,
channels of distribution, pricing policy and records, inventory records,
and other information normally understood to be confidential or
designated as such by Company.
9. CONDUCT OF BUSINESS PENDING CLOSING. Seller also covenants that
from the effective date to the date of the closing Company's business
will be conducted only in the ordinary course of business and no
contract or commitment will be entered into by or on behalf of Company
extending beyond the closing, except normal commitments made in the
ordinary course of business.
10. BROKER
Each party represents and warrants that all negotiations
related to this Agreement have been carried on by the parties without the
intervention of any broker, and each party shall indemnify and hold the other
party harmless against and in respect to any claim for any brokerage or other
commissions related to this Agreement.
11. NOTICES
All notices, requests, demands, and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered or mailed, first-class postage prepaid, to Seller, at Seller's
address given in this Agreement, or to Purchaser, at Purchaser's address given
in this Agreement, or to any other address that Purchaser or Seller shall
designate in writing.
12. EXECUTION OF DOCUMENTS
Purchaser and Seller mutually agree that each shall take all steps
reasonably necessary to facilitate the purchase and sale contemplated in this
Agreement and to execute any other documents reasonably necessary to carry out
and put into effect the terms of this Agreement.
13. FIRE OR OTHER CASUALTY/RISK OF LOSS
13.1 ASSUMPTION OF RISK. Seller assumes all risks of destruction, loss,
or damage due to any casualty, including any liability arising out of
ownership of the subject matter of this Agreement, up to the time of the
closing, excluding any of the foregoing caused by Purchaser's
negligence.
13.2 RIGHT TO TERMINATE AGREEMENT. If the subject matter of this
Agreement is materially damaged at any time before the actual time of
the closing, and the damages cannot reasonably be repaired on payment of
the sums available by insurance settlement or from any sums to be paid
by Purchaser to Seller at the closing, Purchaser, at Purchaser's option,
shall have the right to terminate this Agreement and, upon giving notice
of such election, Purchaser shall immediately receive a refund of any
deposit in full termination of the rights under this Agreement. This
paragraph shall not apply if damages are caused by Purchaser's
negligence.
14. LIEN SEARCH. Seller shall provide Purchaser with a financing
statement search, certified to a date later than the date of this
Agreement.
14.1 OBJECTION. If objection to title is made based on a written
opinion of Purchaser's attorney that the title is not in the condition
as required for performance under this Agreement, Seller shall have 10
days from the date Seller is notified in writing of the particular
defects
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claimed, either (1) to remedy the title or arrange to remedy the title
at the closing, or (2) on written demand made by Purchaser to refund any
deposit in full termination of this Agreement if unable to remedy the
title. Purchaser may elect to complete the purchase and sale and reserve
any right to recover any damages arising out of the defect in title.
15. INDEMNIFICATION
Except as set forth in this Agreement, Seller shall indemnify and
hold Purchaser harmless at all times against and in respect to:
A. All Company's liabilities, including tax liabilities, of
any nature, whether accrued, absolute, contingent, or otherwise,
whether known or unknown, and whether expressed in or omitted
from financial statements of Company existing as of the date
of the closing;
B. All liabilities of or claims against Company arising out of the
conduct of Company before the closing date;
C. Any damage or deficiency resulting from any misrepresentation,
breach of covenant, or nonfulfillment of any agreement on the
part of Seller; and
D. All actions, suits, proceedings, demands, assessments, or
judgements, including costs and expenses incident to any of the
foregoing, pertaining to Company before the closing date.
16. DEFAULT
16.1 DEFAULT BY PURCHASER. If Purchaser defaults, and the default is not cured
within a reasonable period, Seller may elect any remedy allowed by law.
16.2 DEFAULT BY SELLER. If Seller defaults, and the default is not cured
within a reasonable period, Purchaser may, by written notice, elect to
enforce the terms of this Agreement, or elect any other remedy allowed
by law.
17. CLOSING
17.1 EFFECTIVE DATE. The effective date of the closing shall be ,1996
("Closing Date"); however, the parties may complete the execution of
documents on any date no later than , 1996.
17.2 DOCUMENTS. At the closing and any time after it, the parties shall
execute all documents necessary to put into effect the terms of this
Agreement.
18. MISCELLANEOUS
18.1 AMENDMENT. This Agreement shall not be amended, altered, or terminated
except by a writing executed by each party.
18.2 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the state of Michigan.
18.3 HEADINGS. The paragraph headings used in this Agreement are included
solely for convenience.
18.4 ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties; further, this Agreement shall supersede
and/or replace any oral or written Agreement(s) relating to this subject
matter entered into by the parties before the date of this Agreement.
18.5 WAIVER. The waiver by any party of any breach or breaches of any
provision of this Agreement shall not operate as or be construed to be a
waiver of any subsequent breach of any provision of this Agreement.
18.6 BINDING EFFECT. This Agreement, inclusive of its terms and provisions,
shall survive the
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closing and shall be binding on and inure to the benefit of, and be
enforceable by, the respective heirs, legal representatives, successors,
and assigns of the parties. Purchaser and Seller have executed this
Agreement on the following dates:
Seller:
Dated: Oct. 21, 1996 Toman Distribution Services, Inc.
By: /s/ Steven M. Toman
----------------------------------
Steven M. Toman, President
Purchaser:
Dated: Oct. 21, 1996 United Magazine Company
By: /s/ Ronald E. Scherer
-----------------------------------
Ronald E. Scherer, Chairman
090396
6
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EXHIBIT A
<TABLE>
<CAPTION>
ASSETS PURCHASED: VALUE 6/30/96
<S> <C>
ICC Certificate $10
1995 Utility Trailer (appraisal to be obtained)
1993 Utility Trailer (appraisal to be obtained)
1986 Utility Trailer (appraisal to be obtained)
1986 Utility Trailer (appraisal to be obtained)
1984 Great Dane Trailer (appraisal to be obtained)
Truck Power Washer 2,000
Answering Machine 100
Fax Machine 100
Office Furniture 1,000
Personal Computer 1,500
Printer 200
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TOTAL ASSETS PURCHASED $
======
</TABLE>
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EXHIBIT B
LIABILITIES ASSUMED (TO BE ADJUSTED TO EQUAL ASSETS):
<TABLE>
<S> <C>
1st Source Bank Note $41,872
Orix Credit Note 6,858
Orix Credit Note 10,117
FMB Note 19,255
Accrued Expenses
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TOTAL LIABILITIES ASSUMED $
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NET OF TRANSACTION -0-
=======
</TABLE>
Also included in the transaction is the assumption of the Ford Credit lease for
the six Kenworth tractors and other contracts to which Toman Distribution is a
party, including Steven Toman employment agreement and Upjohn transportation
contract.
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Exhibit 2(s)
STOCK TRANSFER AGREEMENT
------------------------
This Stock Transfer Agreement (this "Agreement") is made and entered into
as of Oct. 9, 1996, to be effective as of July 29, 1996, between Northern News
Company, a Michigan corporation ("Northern") and Arthur C. Foster, Sr.
("Foster").
BACKGROUND INFORMATION
A. Pursuant to a certain Stock Purchase Agreement, dated January 10, 1996
(the "Purchase Agreement"), Northern agreed to purchase 79% of all of the issued
and outstanding capital stock of MacGregor News Agency, Inc., a Michigan
corporation ("MacGregor") from its then existing shareholders (the "Sellers"),
and Foster agreed to purchase the remaining 21% of the capital stock of
MacGregor from the Sellers.
B. The purchase of all of the issued and outstanding capital stock of
MacGregor (the "MacGregor Stock") has been completed, and all of the issued and
outstanding MacGregor Stock currently is owned 79% by Northern and 21% by
Foster.
C. Northern and United Magazine Company, an Ohio corporation ("Unimag")
have now entered into a certain Asset Transfer and Exchange Agreement, dated
August 30, 1996, to be effective as of July 29, 1996 (the "Unimag Agreement"),
pursuant to which Northern has agreed to transfer, convey and contribute certain
of Northern's business operations and assets (including Northern's MacGregor
Stock) to Unimag and to cause Foster to transfer and convey to Unimag Foster's
MacGregor Stock.
STATEMENT OF AGREEMENT
----------------------
The parties to this Agreement (each a "Party", and collectively, the
"Parties") hereby acknowledge the accuracy of the above Background Information
and, in consideration of the representations, warranties, covenants and
agreements set forth in this Agreement, the Parties agree as follows:
1. DEPOSIT OF MACGREGOR STOCK. On or before September ___, 1996, whenever
directed by Northern, Foster shall deliver to Baker & Hostetler (as the Escrow
Agent designated by the parties to the Unimag Agreement) all certificates
evidencing all of the MacGregor Stock owned by Foster, endorsed for transfer to
Unimag. At or prior to such deposit by Foster, Northern also shall have
deposited with the Escrow Agent all certificates evidencing all of the MacGregor
Stock owned by Northern, endorsed for transfer to Unimag.
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2. TRANSFER TO UNIMAG. At the closing of the conveyances (the "Exchange")
under the Unimag Agreement, Northern is hereby authorized and directed to cause
the Escrow Agent to deliver to Unimag the certificates for all of the MacGregor
Stock owned by Foster at the same time as the Escrow Agent delivers to Unimag
the certificates for all of the MacGregor Stock owned by Northern. Upon the
completion of such closing of the Exchange (the "Closing"), the transfers to
Unimag of the MacGregor Stock owned by both Northern and Foster shall constitute
transfers to Unimag of all of the right, title and interest of each Party in and
to such MacGregor Stock, free and clear of all claims, liens and encumbrances
except for the amounts remaining due from Northern and Foster to the Sellers,
including interest accrued thereon (collectively, the "Purchase Money
Obligations"), and Northern shall cause Unimag to assume and agree to pay said
Purchase Money Obligations.
3. CLOSING. Upon completion of the Closing and the transfers to Unimag of
all of the MacGregor Stock in accordance with Section 2, this Agreement shall
constitute and operate automatically as an agreement on the part of Northern to
indemnify and save harmless Foster with respect to any and all liability (a) to
the Sellers, Northern or any other person with respect to the Purchase Money
Obligations; and (b) to Unimag or any other person with respect to claims, if
any, subsequently made by Unimag or any other person in connection with the
MacGregor Stock conveyed to Unimag by Foster (except for any claims by Northern
arising out of any breach by Foster of the representations and warranties set
forth in this Agreement). In addition, within ten days after completion of the
Closing, Northern shall pay to Foster cash in the amount of $10.00.
4. FAILURE TO CLOSE. If the Closing fails to occur for any reason, Northern
shall cause the Escrow Agent to deliver to Foster the certificates for all of
the MacGregor Stock owned by Foster at the same time as Northern directs the
Escrow Agent to return to Northern the certificates for all of the MacGregor
Stock owned by Northern. Upon any such return of the MacGregor Stock to the
Parties, this Agreement shall terminate and shall have no continuing force or
effect.
5. REPRESENTATIONS AND WARRANTIES. In order to induce the execution,
delivery and performance of this Agreement, Northern hereby represents and
warrants to Foster (with respect to the statements by Northern contained in this
Section 5), and Foster hereby represents and warrants to Northern (with respect
to the statements of Foster contained in this Section 5), that all of said
statements are true, correct and complete:
(a) BY NORTHERN. Northern has all requisite corporate power and authority
to enter into and perform its obligations under this Agreement and to consummate
the transactions contemplated by this Agreement. This Agreement
<PAGE> 3
and the transactions contemplated by this Agreement have been duly and validly
authorized by all necessary corporate action on the part of Northern. This
Agreement has been duly executed and delivered by Northern and constitutes the
legal, valid, and binding obligation of Northern, enforceable against Northern
in accordance with its terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, or other similar laws from time to time
in effect which may affect the enforcement of creditors' rights in general; and
(ii) general principles of equity.
(b) BY FOSTER. All of the MacGregor Stock owned by Foster is owned by him
free and clear of all claims, liens and encumbrances, except for the Purchase
Money Obligations. Foster has the full and unrestricted right, power and
capacity to enter into this Agreement without the consent or approval of any
other person. This Agreement has been duly executed and delivered by Foster and
constitutes the legal, valid, and binding obligation of Foster, enforceable
against him in accordance with its terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, or other similar laws from
time to time in effect which may affect the enforcement of creditors' rights in
general; and (ii) general principles of equity.
6. SURVIVAL. The provisions of Sections 2, 3 and 5 of this Agreement shall
survive the Closing and the transfer of the MacGregor Stock to Unimag.
In Witness Whereof, the Parties have executed this Agreement, intending to
be legally bound, as of the day and year first above written.
NORTHERN NEWS COMPANY
/s/ David B. Thompson
----------------------------------------
By: David B. Thompson
Its: Treasurer
/s/ Arthur C. Foster, Sr.
----------------------------------------
Arthur C. Foster, Sr.
<PAGE> 1
Exhibit 2(t)
SHAREHOLDER VOTING AGREEMENT
This Agreement is made as of this 9th day of Oct, 1996, among United
Magazine Company, an Ohio corporation (the "Company"), Ronald E. Scherer, Linda
Scherer Talbott, Ohio Periodical Distributors, Inc., Wholesalers Leasing Corp.,
Northern News Company, Readmor Bookstores, Inc., The Scherer Companies, the
shareholders of The Stoll Companies whose names appear at the end of this
Agreement, and the shareholders of Michiana News Service, Inc., whose names
appear at the end of this Agreement, hereinafter referred to as "Shareholders".
BACKGROUND INFORMATION
A. Effective July 29, 1996, August 1, 1996 and August 2, 1996, the Company
entered into transactions with Northern News Company ("Northern"), Ohio
Periodical Distributors, Inc. ("OPD"), and Wholesalers Leasing Corp. ("WLC")
pursuant to which each of Northern, OPD and WLC shall transfer certain of its
assets and liabilities to the Company in exchange for common shares of the
Company and senior and subordinated debentures of the Company, and effective
August 2, 1996 and August 3, 1996, the Company entered into transactions with
The Scherer Companies and its shareholders ("Scherer") and Read-mor Book Stores,
Inc. and its shareholders ("Read-mor"), pursuant to which the shareholders of
Scherer and Read-mor shall contribute all of the shares of stock of Scherer and
Read-mor to the Company in exchange for common shares of the Company and senior
and subordinated debentures of the Company.
B. Effective July 30, 1996, the Company entered into a transaction with the
shareholders of Michiana News Service, Inc. ("Michiana"), pursuant to which the
shareholders of Michiana shall contribute all of the shares of stock of Michiana
owned by them to the Company in exchange for common shares of the Company and
senior and subordinated debentures of the Company.
C. Effective July 31, 1996, the Company entered into a transaction with the
shareholders of The Stoll Companies ("Stoll"), pursuant to which the
shareholders of Stoll shall contribute all of the shares of stock of Stoll owned
by them to the Company in exchange for common shares of the Company and senior
and subordinated debentures of the Company.
D. The senior and subordinated debentures issued to the Shareholders were
issued pursuant to the terms of a Debentures Agreement, dated as of
<PAGE> 2
Oct. 9, 1996, which provides that the Shareholders will enter into a voting
agreement, on the terms set forth herein, providing for certain voting
arrangements among the Shareholders.
E. Each of the Shareholders is the owner of common shares, without par
value, of the Company ("Shares") set forth at the end of this Agreement.
STATEMENT OF AGREEMENT
----------------------
The parties hereto acknowledge the accuracy of the above background
information and hereby agree as follows:
1. VOTING IN ELECTIONS OF DIRECTORS. During the term of this Agreement, as
provided in Section 3, at each election or appointment of directors of the
Company, the Shareholders shall vote all of the Shares owned by him or her, or
Shares which he or she is entitled to vote, in favor of the election to the
Company's board of directors of: (A) two persons designated by the Shareholders
who were formerly Stoll shareholders (the "Stoll Representatives"); (B) one
person designated by the Shareholders who were formerly Michiana shareholders
(the "Michiana Shareholders"); and (C) two persons designated by the
Shareholders who were formerly holders of shares of stock in The Scherer
Companies (the "Scherer Representatives"). Ronald E. Scherer shall designate the
Scherer Representatives; Richard Stoll, Sr. and Richard Stoll, Jr. shall
designate the Stoll Representatives, and Thaddeus S. Majerek shall designate the
Michiana Representative. The Stoll Representatives, Michiana Representative and
the Scherer Representatives shall first be elected to the board of directors at
the annual shareholders meeting of the Company held in 1996 (currently
anticipated in October or November of 1996). Shareholders shall be informed who
the designees are at least seven days in advance of any meeting at which
directors are to be elected. In the event that the Company enters into an
agreement for the acquisition, merger or consolidation of the Company or any of
its subsidiaries with the George R. Klein News Co., and if required by the terms
of such acquisition agreement, then during the term of this Agreement, as
provided in Section 3, at each election or appointment of directors of the
Company, the Shareholders shall also vote all of the Shares owned by him or her,
or Shares which he or she is entitled to vote, in favor of the election to the
Company's board of directors of one person designated by the shareholders who
were formerly shareholders of George R. Klein News Co. (the "Klein
Representative"). George R. Klein shall designate the Klein Representative.
2. VOTING ON OTHER MATTERS. During the term of this Agreement, the
Shareholders shall be entitled to vote in such manner as they deem appropriate
on all matters coming before the shareholders of the Company for a vote or on
which shareholders of the Company are entitled to vote, with the exception of
the matters
<PAGE> 3
as set forth in Section 1, above, and matters which the Company is prohibited
from implementing without the consent of the Executive Committee pursuant to the
Debenture Agreement.
3. TERM AND TERMINATION. This Agreement is executed in connection with the
Debenture Agreement. This Agreement shall continue and be irrevocable until the
earlier to occur of: (a) such time as all of the debentures issued under the
Debenture Agreement, along with all accrued interest thereon, have been paid in
full, or (b) at such time as the Executive Committee appointed under the
Debenture Agreement unanimously agrees to terminate this Agreement.
4. AMENDMENT. This Agreement may be amended by the unanimous written
agreement of the Shareholders.
5. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall in no way impair or affect the remaining provisions hereof,
which shall be deemed to remain in full force and effect.
6. BINDING EFFECT; COUNTERPARTS. This Agreement shall bind and benefit the
heirs, executors, administrators, assigns and successors of the Shareholders and
may be simultaneously executed in any number of counterparts, each of which,
when so executed, shall be deemed to be an original and such counterparts
together shall constitute one instrument.
7. GOVERNING LAW. The validity, construction and interpretation of this
Agreement shall be governed by Ohio law, excluding conflict of law principles.
8. ADVICE OF COUNSEL. Each party agrees and represents that he or she has
been represented by legal counsel with regard to the execution of this
Agreement.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes any and all prior or contemporaneous
discussions, negotiations, agreements or understandings between the parties.
There are no representations, oral or written, which have not been incorporated
herein.
10. CAPTIONS. The captions of the various sections of this Agreement are
not part of the contest of this Agreement, but are only guides to assist in
locating those sections, and shall be ignored in construing this Agreement.
11. SPECIFIC PERFORMANCE. The parties acknowledge that the Shares are
unique and that in the event of any breach or attempted breach of this
Agreement, the parties remedies at law would be inadequate. In the event of such
breach or attempted breach of this Agreement, each other party to this Agreement
shall be
<PAGE> 4
entitled to specific performance of this Agreement in addition to any other
remedy at law or equity that may then be available.
12. GENDERS AND NUMBERS. When permitted by the context, each pronoun used
in this Agreement includes the same pronoun in other genders or numbers, and
each noun used in this Agreement includes the same noun in other numbers.
The parties have executed this Agreement as of the date first set forth
above.
/s/ Ronald E. Scherer /s/ Thaddeus S. Majerek
- ------------------------------------ ------------------------------------
Ronald E. Scherer Thaddeus S. Majerek
Number of Shares:__________ Number of Shares: 2,906,253
/s/ Linda Scherer Talbott /s/ Thaddeus A. Majerek
- ------------------------------------ ------------------------------------
Linda Scherer Talbott Thaddeus A. Majerek, individually
Number of Shares:__________ and as Co-trustee under an
Irrevocable Family Trust Agreement
with Thaddeus S. Majerek, dated
1/11/86
Number of Shares: 2,792,281
/s/ Ronald E. Scherer /s/ Linda Scherer Talbott
- ------------------------------------ ------------------------------------
Ronald E. Scherer, Chairman Linda Scherer Talbott, President
Ohio Periodical Distributors, Inc. Wholesalers Leasing Corp.
Number of Shares:__________ Number of Shares:__________
/s/ Ronald E. Scherer /s/ Michael J. Majerek
- ------------------------------------ ------------------------------------
Ronald E. Scherer, Chairman Michael J. Majerek, individually and
Northern News Company as Co-trustee under an Irrevocable
Number of Shares:___________ Family Trust Agreement with Thaddeus
S. Majerek, dated 1/22/86
Number of Shares: 2,792,281
/s/ Richard Stoll, Sr. /s/ Margaret Stoll
- ------------------------------------ ------------------------------------
Richard Stoll, Sr. Margaret Stoll
Number of Shares:__________ Number of Shares:__________
/s/ Richard Stoll, Jr. /s/ Francis Stoll
- ------------------------------------ ------------------------------------
Richard Stoll, Jr. Francis Stoll
Number of Shares:__________ Number of Shares:__________
(Signatures continued on next page.)
<PAGE> 5
/s/ Virginia Hiteshew /s/ Stephanie Hamilton
- ------------------------------------ ------------------------------------
Virginia Hiteshew Stephanie Hamilton
Number of Shares:__________ Number of Shares:___________
/s/ Nancy Lyman /s/ John Stoll
- ------------------------------------ ------------------------------------
Nancy Lyman John Stoll
Number of Shares:__________ Number of Shares:__________
/s/ Mary Olerich /s/ James Stoll
- ------------------------------------ ------------------------------------
Mary Olerich James Stoll
Number of Shares:__________ Number of Shares:__________
/s/ William Stoll /s/ Susan Voss
- ------------------------------------ ------------------------------------
William Stoll Susan Voss
Number of Shares:__________ Number of Shares:__________
/s/ Eugene J. Alfonsi /s/ Ronald E. Scherer, Sr.
- ------------------------------------ ------------------------------------
Eugene J. Alfonsi, President Ronald E. Scherer, Sr., Chairman
Read-mor Book Stores, Inc. The Scherer Companies
Number of Shares:__________ Number of Shares:__________
/s/ Jeffrey A. Majerek /s/ Anita M. Majerek
- ------------------------------------ ------------------------------------
Jeffrey A. Majerek Anita M. Majerek
Number of Shares: -0- Number of Shares: -0-
/s/ Thomas E. Majerek /s/ Jeanine E. Gilbert
- ------------------------------------ ------------------------------------
Thomas E. Majerek Jeanine E. Gilbert
Number of Shares: -0- Number of Shares: -0-
/s/ Deborah A. Toman /s/ David W. Majerek
- ------------------------------------ ------------------------------------
Deborah A. Toman David W. Majerek
Number of Shares: -0- Number of Shares: -0-
<PAGE> 1
Exhibit 2(u)
STATEMENT OF THE PARTIES
Pursuant to Article 7 of the Stock Transfer and Exchange Agreement, dated
August 30, 1996, to be effective as of August 2, 1996, by and among United
Magazine Company, an Ohio corporation, ("UNIMAG"), The Scherer Companies, a
Delaware corporation, ("Scherer"), and all of Scherer's Shareholders,
("Scherer's Shareholders"), (the "Agreement"), the following information is
provided to the Securities and Exchange Commission to clarify the intent and
understanding of UNIMAG and Scherer regarding the transactions:
1. Subject to the indemnification provisions of Article 8 of the Agreement,
the risks and rewards of ownership of Scherer were relinquished to UNIMAG,
effective July 1, 1996. It is the intent of the parties that all net income or
loss from July 1, 1996 accrue to UNIMAG.
2. The effective date for valuation of Scherer as the Acquired Company was
June 30, 1996, with interest accruing on the debentures to the benefit of
Scherer's Shareholders from July 1, and all risk of change of the values of the
related assets and liabilities from June 30, 1996 being the sole responsibility
of UNIMAG.
3. Since May 3, 1988, Scherer (part of Scherer Affiliates) has managed all
operations of UNIMAG for the benefit of UNIMAG's shareholders.
4. The purpose of the Merger Board was to give the acquired party a measure
of input and participation in the implementation of significant operational
changes resulting from the acquisition.
5. A purpose of the Escrow Closing was simply to collect signed closing
documents of all the parties in advance of the Annual Shareholder's Meeting to
expedite final closing of the exchange after the Annual Shareholder's Meeting.
United Magazine Company Scherer Affiliates
/s/ Ronald E. Scherer /s/ Ronald E. Scherer
- ------------------------------------ ------------------------------------
By: Ronald E. Scherer By: Ronald E. Scherer
Its: Chairman Its: Chairman
<PAGE> 2
STATEMENT OF THE PARTIES
Pursuant to Article 7 of the Stock Transfer and Exchange Agreement, dated
July 29, 1996, by and among United Magazine Company ("UNIMAG") and Michiana News
Service, Inc. ("Michiana"), the following information is provided to the
Securities and Exchange Commission to clarify the intent and understanding of
Michiana and UNIMAG regarding the transactions:
1. Subject to the indemnification provisions of Article 8 of the Exchange
Agreement, the risks and rewards of ownership of Michiana were relinquished to
UNIMAG, effective July 1, 1996. It is the intent of the parties that all net
income or loss from July 1, 1996 accrue to UNIMAG.
2. The effective date for valuation of Michiana as the Acquired Company was
June 30, 1996, with interest accruing on the debentures to the benefit of
Michiana's Shareholders from July 1, and all risk of change of the values of the
related assets and liabilities from June 30, 1996 being the sole responsibility
of UNIMAG.
3. On July 1, 1996, UNIMAG was managing all operations and assuming related
risks for the benefit of UNIMAG's shareholders.
4. The purpose of the Merger Board was to give the acquired party a measure
of input and participation in the implementation of significant operational
changes resulting from the acquisition.
5. A purpose of the Escrow Closing was simply to collect signed closing
documents of all the parties in advance of the Annual Shareholders Meeting to
expedite final closing of the exchange after the Annual Shareholder's Meeting.
United Magazine Company Michiana News Service, Inc.
/s/ Ronald E. Scherer /s/ Thaddeus A. Majerek
- ------------------------------------ ------------------------------------
By: Ronald E. Scherer By: Thaddeus A. Majerek
Its: Chairman Its: President
<PAGE> 3
STATEMENT OF THE PARTIES
Pursuant to Article 7 of the Stock Transfer and Exchange Agreement, dated
July 31, 1996, by and among United Magazine Company ("UNIMAG") and The Stoll
Companies ("Stoll"), the following information is provided to the Securities and
Exchange Commission to clarify the intent and understanding of Stoll and UNIMAG
regarding the transactions:
1. Subject to the indemnification provisions of Article 8 of the Exchange
Agreement, the risks and rewards of ownership of Stoll were relinquished to
UNIMAG, effective July 1, 1996. It is the intent of the parties that all net
income or loss from July 1, 1996 accrue to UNIMAG.
2. The effective date for valuation of Stoll as the Acquired Company was
June 30, 1996, with interest accruing on the debentures to the benefit of the
Stoll Shareholders from July 1, 1996, and all risk of change of the values of
the related assets and liabilities from June 30, 1996 being the sole
responsibility of UNIMAG.
3. On July 3, 1996, UNIMAG was managing all operations and assuming related
risks for the benefit of UNIMAG's shareholders.
4. The purpose of the Merger Board was to give the acquired party a measure
of input and participation in the implementation of significant operational
changes resulting from the acquisition.
5. A purpose of the Escrow Closing was simply to collect signed closing
documents of all the parties in advance of the Annual Shareholders Meeting to
expedite final closing of the exchange after the Annual Shareholder's Meeting.
United Magazine Company The Stoll Companies
/s/ Ronald E. Scherer /s/ Richard H. Stoll, Jr.
- ------------------------------------ ------------------------------------
By: Ronald E. Scherer By: Richard H. Stoll, Jr.
Its: Chairman Its: President
<PAGE> 4
STATEMENT OF THE PARTIES
Pursuant to Article 7 of the Stock Transfer and Exchange Agreement, dated
September 14, 1996, by and among United Magazine Company ("UNIMAG") and The
George R. Klein News Co., Central News Co. and Newspaper Sales, Inc. ("Klein"),
the following information is provided to the Securities and Exchange Commission
to clarify the intent and understanding of Klein and UNIMAG regarding the
transactions:
1. Subject to the indemnification provisions of Article 8 of the Exchange
Agreement, the risks and rewards of ownership of Klein were relinquished to
UNIMAG, effective August 24, 1996. It is the intent of the parties that all net
income or loss from August 24, 1996 accrue to UNIMAG.
2. The effective date for valuation of Klein as the Acquired Company was
August 23, 1996, with interest accruing on the debentures to the benefit of the
Klein Shareholders from August 24, 1996, and all risk of change of the values of
the related assets and liabilities from August 23, 1996 being the sole
responsibility of UNIMAG.
3. On August 24, 1996, UNIMAG was managing all operations and assuming
related risks for the benefit of UNIMAG's shareholders.
4. The purpose of the Merger Board was to give the acquired party a measure
of input and participation in the implementation of significant operational
changes resulting from the acquisition.
5. A purpose of the Escrow Closing was simply to collect signed closing
documents of all the parties in advance of the Annual Shareholders Meeting to
expedite final closing of the exchange after the Annual Shareholder's Meeting.
United Magazine Company The George R. Klein News Co.
/s/ Ronald E. Scherer /s/ George R. Klein
- ------------------------------------ ------------------------------------
By: Ronald E. Scherer By: George R. Klein
Its: Chairman Its: President
Central News Co. Newspaper Sales, Inc.
/s/ George R. Klein /s/ George R. Klein
- ------------------------------------ ------------------------------------
By: George R. Klein By: George R. Klein
Its: President Its: President
<PAGE> 1
Exhibit 2(v)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into this 24 day of
Oct., 1996, by and between Richard Stoll, Jr., residing at Toledo, Ohio
("Employee"), and United Magazine Company, an Ohio corporation.
BACKGROUND INFORMATION
A. United Magazine Company is engaged, directly and through its
subsidiaries, in the business of the wholesale distribution of books, magazines
and other periodicals (the "Business"). United Magazine Company and its
subsidiaries are hereinafter referred to collectively as the "Company."
B. Employee desires to enter into the employment of the Company to serve in
a management capacity and to perform such duties as they may be assigned to him
from time to time by the Board of Directors of the Company (the "Board").
C. The Company desires to employ Employee to serve in a management capacity
and to perform such appropriate duties as may be assigned to him from time to
time by the Board in accordance with the terms and provisions set forth herein.
PROVISION
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and provisions set forth herein, it is agreed as follows:
1. EMPLOYMENT CAPACITY AND DUTIES. During the term of this Agreement,
Employee shall serve the Company in a management capacity, and shall be
responsible for performing such appropriate duties as the Board may from time to
time assign to him. Initially, Employee shall serve as President of The Stoll
Division of the Company, or such other position within the Company as may be
equivalent to division president, and his duties shall be consistent with those
duties and responsibilities customarily assigned to such position. Throughout
the term of this Agreement any substantially additional or different duties or
responsibilities assigned to Employee shall be those normally associated with
growth and promotion of an executive within the Company. Employee shall devote
his full time, skill, labor and attention to the affairs and business of the
Company. Employee shall not actively engage in or devote any of his time and
attention to any business other than the Company's, except as a passive,
non-participating investor in such businesses, provided however, that Employee
may maintain his current positions with those various companies not in
competition, directly or indirectly, with the wholesale periodical distribution
business of the Company.
<PAGE> 2
In assigning duties to Employee under this Agreement, the Company shall not
require Employee to move his primary residence from the Toledo area, although it
is anticipated that a significant amount of travel will be required of Employee.
2. COMPENSATION. During the term of this Agreement and while employed by
the Company, Employee's compensation shall be as follows:
(a) BASE SALARY. Subject to the terms and conditions contained herein,
Employee shall receive an annual base compensation, which shall be payable
on a weekly basis, in the following amounts ("Base Salary"):
First Year: $160,000.00
Second Year: The same base salary as the prior year plus the Company's
standard cost of living increase.
Third Year: The same base salary as the immediately prior year plus
the Company's standard cost of living increase.
(b) BONUS. Employee shall receive gross bonus in the amount of
$25,000.00 provided that all of the Company's Michigan operations are
successfully consolidated within budget by December 31, 1996. This bonus
shall be payable within twelve months (12) from the date of Escrow Closing
as defined in the Stock Transfer and Exchange Agreement, dated August 1,
1996, between the Company and The Stoll Companies and its shareholders. At
the end of the second year of this Agreement, Employee shall receive a
gross annual bonus of $25,000.00 if all Michigan and Indiana operations of
the Company have performed within budget during the immediately preceding
year, such amount to be payable within 45 days after the close of the
twelve month period. At the end of the third year of this Agreement,
Employee shall receive a gross annual bonus of $25,000.00 after a mutually
agreed upon Company goal has been achieved. The goal shall be determined by
the Company thirty days prior to the commencement of the third year of the
term.
3. OTHER BENEFITS.
(a) Employee shall be entitled to such rights, benefits and
privileges, including group medical and life insurance, pension or other
fringe benefits or compensation programs, as the Company may from time to
time adopt for management employees generally. Notwithstanding the
foregoing, the minimum benefit package provided to Employee shall be that
described in Exhibit A attached hereto.
(b) Employee shall be entitled to the exclusive use of an automobile
equivalent to that previously provided to Employee by his former company.
2
<PAGE> 3
(c) Employee shall be entitled to a vacation of four (4) weeks
annually. During such periods, his compensation shall be paid in full.
(d) The Company shall provide an Executive Life Insurance policy.
(e) The Company will provide a 401(k) plan with Company match of
Employee's contributions or in accordance with the Company's policy if its
current 401(k) plan changes.
4. EXPENSES. The Company shall pay or reimburse Employee for all
disbursements or expenses reasonably incurred by him during the term of this
Agreement in connection with the performance of his duties under this Agreement.
Such reimbursement shall be made upon the presentation of expense vouchers or
reports in accordance with the standard procedures of the Company with respect
to expense items.
5. WORKING FACILITIES. The Company shall provide Employee with such
facilities, supplies, and services as are reasonably suitable to the position
within the Company and which Employee and the Company reasonably agree are
necessary for Employee to perform his duties hereunder.
6. TERM. This Agreement shall commence on the effective date of this
Agreement and shall continue for a period of three (3) years, unless earlier
terminated as provided herein.
7. TERMINATION OF EMPLOYMENT FOR CAUSE. This Agreement and Employee's
employment hereunder may be terminated by the Company, effective immediately
upon notice to Employee (or at such later date as may be specified in the notice
of termination), upon the occurrence of any of the following, as determined by a
vote of a majority of the Board:
(a) Sickness or injury of Employee which results in Employee being
unable to perform substantially all of his duties hereunder for a period of
six (6) consecutive months;
(b) Employee engages in, undertakes or is a party to or involved in,
any one of the following acts or events:
(i) Any act of fraud or material conflict of interest or
self-dealing involving the Company; or
(ii) Any felony or any offense involving moral turpitude or any
criminal offense involving the Company; or
3
<PAGE> 4
(iii) A violation or breach of any of Employee's covenants under
Section 9 of this Agreement; or
(c) Employee engages in misconduct or neglect of duty or in any
willful action which materially and adversely affects the business, affairs
or goodwill of the Company; or
(d) Repeated failure to follow reasonable written policies, procedures
or practices established by the Company, and failure to conform Employee's
actions to such policies, procedures or practices within thirty (30) days
after notice from the Company.
In addition, Employee's employment hereunder shall terminate automatically
upon the death of Employee, or the incompetency of Employee, as determined by a
court of competent jurisdiction.
In the event of termination of Employee's employment pursuant to this
Section 7, Employee shall be entitled to all compensation, benefits and expense
reimbursements payable through the date of termination, and to no further
compensation. If Employee disagrees with a determination by the Board with
respect to the existence of conditions supporting the Company's termination of
this Agreement pursuant to this Section 7, Employee may, within thirty (30) days
of his receipt of notice of termination from the Company, file a demand for
arbitration with respect to the issue of whether such conditions existed in the
City of Columbus, Ohio, in accordance with the rules then prevailing of the
American Arbitration Association, by a panel of three (3) arbitrators, and
judgment upon the award rendered by the arbitrators may be entered in a court of
competent jurisdiction.
8 . TERMINATION OF EMPLOYMENT WITHOUT CAUSE. In the event the Company
terminates Employee's employment during the term of this Agreement other than as
permitted by Section 7 hereof, Employee shall be entitled to continuation of
salary and benefits under this Agreement for the remainder of the term of this
Agreement and shall be entitled to no other recovery or damages related to such
termination whether under contract, tort or otherwise.
9. COVENANTS OF EMPLOYEE.
(a) REASONS FOR COVENANTS. Employee, during the term of his
employment, will have access to and will become familiar with, various
trade secrets, confidential and proprietary information, data, plans and
know-how of the Company, heretofore known only to the Company, its
employees, agents and contractors. These trade secrets and confidential and
proprietary information, including, without limitation, information
relating to the Company's operations or the financial condition or results
of its operations, its marketing or business
4
<PAGE> 5
strategies and plans, the names, addresses, case histories or plans of any
of its customers or prospective customers, its operating procedures or
plans, its advertising methods or plans, the names, addresses, training,
background or other information regarding any person who is or was an
employee of the Company, and other compilations of information which are
owned by the Company and which are regularly used in the operation of the
business of the Company ("Confidential Information"), are and will be the
result of large amounts of time, effort and expense of the Company in
developing such information and in recruiting and training such employees
and are essential to the success of the Company. Confidential Information
shall be maintained by Employee on a confidential basis, and Employee shall
not interfere with the employment relationships between the Company and its
employees, agents, customers, suppliers and other contractors by inducing
any of those employees, agents, customers, suppliers or other contractors
to terminate their employment or other relationships with the Company.
(b) COVENANT OF NON-DISCLOSURE. With respect to any Confidential
Information received by Employee, until such time, if any, as such
Confidential Information becomes generally known to the public (other than
as a result of disclosure by Employee), Employee shall:
(i) Not use such Confidential Information for his own purposes
other than in connection with his regular activities for or on behalf
of the Company, and shall refrain from using, disclosing,
disseminating or publishing to or with any person, firm, company or
entity, or making available to any others for any use other than for
or on behalf of the Company, such Confidential Information, directly
or indirectly, during his employment or after termination thereof; and
(ii) Restrict disclosure of such Confidential Information only to
others as may reasonably be necessary in the conduct of the Company's
business; and
(iii) Advise all such persons of the strict obligations of
confidentiality hereunder; and
(iv) Take such steps to protect the confidentiality of
Confidential Information as are necessary to keep it confidential.
Provided, however, that Employee shall not be precluded from
utilizing or disclosing any information regarding the Company which
(i) is generally available to the public; (ii) is lawfully obtained by
the Employee from a source other than the Company; (iii) is required
to be disclosed by or in any judicial or administrative process,
proceeding or investigation or
5
<PAGE> 6
by applicable law; or (iv) is generally known in the industry in which
the Company conducts its business.
(c) COVENANT OF NON-SOLICITATION. Employee shall not, directly or
indirectly, at any time during his employment with the Company and for a
period of two (2) years after termination of such employment:
(i) Solicit or attempt to solicit any employee, customer, agent,
supplier or contractor of the Company to leave the employment of the
Company or terminate its relationship with the Company; or
(ii) Assist or attempt to assist any person, firm or Company in
any way to solicit any employee, customer, agent, supplier or
contractor of the Company to leave the employment of the Company or
terminate its relationship with the Company.
(d) TERMINATION OF EMPLOYMENT. At such time as the employment
relationship between Employee and the Company has terminated, Employee
shall:
(i) Promptly return to the Company, or at the Company's option,
destroy, all Confidential Information, including all copies of
documents, notes or materials made by Employee or at his direction,
and promptly return to the Company all company property, including
keys and automobiles; and
(ii) Certify in writing to the Company that he has so complied;
and
(iii) Not use Confidential Information or transact business in a
manner in any way based upon or utilizing Confidential Information.
(e) COVENANT NOT TO COMPETE. Commencing on the effective date of this
Agreement and continuing for a period of five (5) years (or until such
earlier date, if any, as the Company terminates Employee's employment other
than in accordance with Section 7 hereof), Employee shall not, individually
or in concert with any other person or entity, or through a company,
partnership or other entity, own, manage, operate, control, be employed by,
work on behalf of, invest in, assist (financially or otherwise), provide
advisory, consulting or other services for, participate in or be interested
or connected in any manner, with the ownership, management, operation,
promotion or control of, any person, company, partnership, proprietorship
or other business which is engaged, directly or indirectly, in a business
which:
(i) is the same as or similar to the Business or any part
thereof; or
6
<PAGE> 7
(ii) is the same as or similar to any business conducted by the
Company during or as of the date of termination of Employee's
employment; or
(iii) sells or provides a Conflicting Product (as hereinafter
defined) in competition with the Company;
and conducts business in any state of the United States of America or in
any foreign country where the Company, at any time during or as of the date
of termination of Employee's employment hereunder, has conducted, currently
conducts, or reasonably expects to conduct its business or any part
thereof.
As used herein, "Conflicting Product" means any product, product line
or service which is similar to any product, product line or service that is
being marketed or sold by the Company at any time during or as of the date
of termination of Employee's employment, or with respect to which the
Company has acquired and disclosed to Employee Confidential Information
which the Company intends to use in the marketing or sale of a product or
service.
Employee shall provide, upon request of the Company at any time, such
information as may reasonably be required by the Company to determine his
compliance with the covenants contained in this Section 9(e). Employee may
at any time advise the Company of the facts surrounding any proposed
acquisition or involvement in any business enterprise and request the
Company's written approval that, based solely upon such facts, such
acquisition or involvement does not violate the covenants contained in this
Section 9(e). Such approval shall not be unreasonably withheld.
(f) SCOPE OF COVENANTS. In the event that any provision of the
covenants contained in this Section 9 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of it being extended
over too great a period of time, too large a geographic area, or too great
a range of activities, it should be interpreted to extend only over the
maximum period of time, geographic area, or range of activities as to which
it may be enforceable.
(g) SPECIFIC PERFORMANCE. A breach by Employee of any of the covenants
contained in this Section 9 may cause irreparable damage to the Company,
the extent of which may be difficult to ascertain, and the award of damages
may not be adequate relief. Consequently, the Company may institute an
action to compel the specific performance of these covenants and Employee
consents to the award of such remedy, which remedy shall be cumulative, not
exclusive, and shall be in addition to any other remedy.
(h) SURVIVAL OF COVENANTS. The covenants contained in this Section 9
shall survive termination of this Agreement.
7
<PAGE> 8
10. MISCELLANEOUS.
(a) Except as otherwise expressly provided herein, this Agreement
shall not be changed, modified, terminated, canceled or amended except by a
writing signed by each party to this Agreement.
(b) This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof, and merges and
supersedes all prior discussions, agreements and undertakings of every kind
and nature between them with respect to the subject matter hereof.
(c) The descriptive headings of the Sections and Paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
(d) The parties hereto acknowledge and agree that the consideration
for the covenants of Employee stated herein is the entering into of this
Agreement and the performance of the parties' respective obligations.
(e) This Agreement is based upon the personal services of Employee,
and the rights and obligations of Employee shall not be assignable. Nothing
in this Agreement shall prohibit or impair Company's right to assign all or
any part of Company's rights, duties or obligations under this Agreement
pursuant to any merger, consolidation, reorganization, sale of stock, sale
of assets, change of name or similar arrangement involving the Company, and
Employee hereby consents to any such assignment which shall be effective
upon the mailing of written notice thereof to Employee.
(f) To be effective, all notices, requests and demands to or upon the
respective parties hereto shall be in writing or by facsimile transmission
or telex (unless otherwise expressly provided herein), and shall be deemed,
unless otherwise expressly provided herein, to have been duly given or
made, in the case of written notice, upon hand delivery or upon three (3)
business days after deposit in the United States mail, registered or
certified, return receipt requested, postage prepaid, and in the case of
facsimile notice, upon telephone confirmation of transmission, and in the
case of telex notice, when sent, answerback received, addressed as follows
or to such other address as the respective parties hereto may designate in
writing to the other parties pursuant to this provision:
Employee:
------------------------------
------------------------------
------------------------------
8
<PAGE> 9
With a copy to:
------------------------------
------------------------------
------------------------------
The Company: United Magazine Company
5131 Post Road
Dublin, Ohio
Attn: Chairman
Facsimile No: (614) 792-2029
With a copy to: Baker & Hostetler
65 East State Street
Columbus, Ohio 43215
Attn: Robert M. Kincaid, Esq.
Facsimile No: (614) 462-2616
(g) This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute but one (1) and the same
instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
(h) This Agreement and the rights and obligations of the parties under
this Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Ohio, excluding conflict of law
principles. Any and all actions regarding this Agreement or the
transactions contemplated hereby brought by the Company may, and all such
actions brought by Employee shall, be forumed and venued in Franklin
County, Ohio. Employee hereby consents to the jurisdiction of the courts of
the State of Ohio, in Franklin County, Ohio, and the United States District
Court for the Southern District of Ohio, and their respective appellate
courts, for purposes of enforcement of this Agreement, and waives any
contention that any such court is an improper venue for such enforcement.
(i) Any claim of Employee relating to this Agreement, his employment
hereunder, or termination of his employment, shall be determined by binding
arbitration in the City of Columbus, Ohio, in accordance with the rules
then prevailing of the American Arbitration Association, by a panel of
three (3) arbitrators, and judgment upon the award rendered by the
arbitrators may be entered in a court of competent jurisdiction.
(j) The invalidity of any provision or provisions of this Agreement
shall not affect the other provisions, and this Agreement shall be
construed in all respects as if any invalid provisions were omitted.
9
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
UNITED MAGAZINE COMPANY,
an Ohio corporation
/s/ Ruth Hunter Smith /s/ Ronald E. Scherer
- ------------------------------------ ----------------------------------------
Witness By: Ronald E. Scherer
Its: Chairman
/s/ David B. Thompson
- ------------------------------------
Witness EMPLOYEE
/s/ Greg H. Smith /s/ Richard Stoll, Jr.
- ------------------------------------ ----------------------------------------
Witness Richard Stoll, Jr.
/s/ Kenneth C. Baker
- ------------------------------------
Witness
10
<PAGE> 1
Exhibit 2(w)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into this 21st day of
Oct., 1996, by and between Thaddeus A. Majerek, residing at ________________,
Ohio ("Employee"), and United Magazine Company, an Ohio corporation.
BACKGROUND INFORMATION
A. United Magazine Company is engaged, directly and through its
subsidiaries, in the business of the wholesale distribution of books, magazines
and other periodicals (the "Business"). United Magazine Company and its
subsidiaries are hereinafter referred to collectively as the "Company."
B. Employee desires to enter into the employment of the Company to serve in
a management capacity and to perform such duties as they may be assigned to him
from time to time by the Board of Directors of the Company (the "Board").
C. The Company desires to employ Employee to serve in a management capacity
and to perform such appropriate duties as may be assigned to him from time to
time by the Board in accordance with the terms and provisions set forth herein.
PROVISION
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and provisions set forth herein, it is agreed as follows:
1. EMPLOYMENT CAPACITY AND DUTIES. During the term of this Agreement,
Employee shall serve the Company in a management capacity, and shall be
responsible for performing such appropriate duties as the Board may from time to
time assign to him. Initially, Employee shall serve as a senior executive of the
Company, or such other position within the Company as may be equivalent to same,
and his duties shall be consistent with those duties and responsibilities
customarily assigned to such position. Throughout the term of this Agreement any
substantially additional or different duties or responsibilities assigned to
Employee shall be those normally associated with growth and promotion of an
executive within the Company. Employee shall devote his full time, skill, labor
and attention to the affairs and business of the Company. Employee shall not
actively engage in or devote any of his time and attention to any business other
than the Company's, except as a passive, non-participating investor in such
businesses, provided however, that Employee may maintain his current positions
<PAGE> 2
with those various companies not in competition, directly or indirectly, with
the wholesale periodical distribution business of the Company.
In assigning duties to Employee under this Agreement, the Company shall not
require Employee to move his primary residence from the Niles, Michigan area,
although it is anticipated that a significant amount of travel will be required
of Employee.
2. COMPENSATION. During the term of this Agreement and while employed by
the Company, Employee's compensation shall be as follows:
(a) BASE SALARY. Subject to the terms and conditions contained herein,
Employee shall receive an annual base compensation, which shall be payable
on a weekly basis, in the following amounts ("Base Salary"):
First Year: $160,000.00
Second Year: The same base salary as the prior year plus the Company's
standard cost of living increase.
Third Year: The same base salary as the immediately prior year plus
the Company's standard cost of living increase.
(b) BONUS. At the end of each year of the term of this Agreement,
Employee's performance shall be reviewed by the Board, and Employee shall
receive a gross bonus in an amount to be determined by the Board based upon
Employee's performance and the overall performance of the Company.
3. OTHER BENEFITS.
(a) Employee shall be entitled to such rights, benefits and
privileges, including group medical and life insurance, pension or other
fringe benefits or compensation programs, as the Company may from time to
time adopt for management employees generally.
(b) Employee shall be entitled to the exclusive use of an automobile
equivalent to that previously provided to Employee by his former company.
(c) Employee shall be entitled to a vacation of four (4) weeks
annually. During such periods, his compensation shall be paid in full.
(d) The Company will provide a 401(k) plan in accordance with the
Company's standard policy.
2
<PAGE> 3
4. EXPENSES. The Company shall pay or reimburse Employee for all
disbursements or expenses reasonably incurred by him during the term of this
Agreement in connection with the performance of his duties under this Agreement.
Such reimbursement shall be made upon the presentation of expense vouchers or
reports in accordance with the standard procedures of the Company with respect
to expense items.
5. WORKING FACILITIES. The Company shall provide Employee with such
facilities, supplies, and services as are reasonably suitable to the position
within the Company and which Employee and the Company reasonably agree are
necessary for Employee to perform his duties hereunder.
6. TERM. This Agreement shall commence on the effective date of this
Agreement and shall continue for a period of three (3) years, unless earlier
terminated as provided herein.
7. TERMINATION OF EMPLOYMENT FOR CAUSE. This Agreement and Employee's
employment hereunder may be terminated by the Company, effective immediately
upon notice to Employee (or at such later date as may be specified in the notice
of termination), upon the occurrence of any of the following, as determined by a
vote of a majority of the Board:
(a) Sickness or injury of Employee which results in Employee being
unable to perform substantially all of his duties hereunder for a period of
six (6) consecutive months;
(b) Employee engages in, undertakes or is a party to or involved in,
any one of the following acts or events:
(i) Any act of fraud or material conflict of interest or
self-dealing involving the Company; or
(ii) Any felony or any offense involving moral turpitude or any
criminal offense involving the Company; or
(iii) A material violation or breach of any of Employee's
covenants under Section 9 of this Agreement; or
(c) Employee engages in misconduct or neglect of duty or in any
willful action which materially and adversely affects the business, affairs
or goodwill of the Company; or
(d) Repeated failure to follow reasonable written policies, procedures
or practices established by the Company, and failure to
3
<PAGE> 4
conform Employee's actions to such policies, procedures or practices within
thirty (30) days after notice from the Company.
In addition, Employee's employment hereunder shall terminate automatically
upon the death of Employee, or the incompetency of Employee, as determined by a
court of competent jurisdiction.
In the event of termination of Employee's employment pursuant to this
Section 7, Employee shall be entitled to all compensation, benefits and expense
reimbursements payable through the date of termination, and to no further
compensation. If Employee disagrees with a determination by the Board with
respect to the existence of conditions supporting the Company's termination of
this Agreement pursuant to this Section 7, Employee may, within thirty (30) days
of his receipt of notice of termination from the Company, file a demand for
arbitration with respect to the issue of whether such conditions existed in the
City of Columbus, Ohio, in accordance with the rules then prevailing of the
American Arbitration Association, by a panel of three (3) arbitrators, and
judgment upon the award rendered by the arbitrators may be entered in a court of
competent jurisdiction.
8 . TERMINATION OF EMPLOYMENT WITHOUT CAUSE. In the event the Company
terminates Employee's employment during the term of this Agreement other than as
permitted by Section 7 hereof, Employee shall be entitled to continuation of
salary and benefits under this Agreement for the remainder of the term of this
Agreement and shall be entitled to no other recovery or damages related to such
termination whether under contract, tort or otherwise.
9. COVENANTS OF EMPLOYEE.
(a) REASONS FOR COVENANTS. Employee, during the term of his
employment, will have access to and will become familiar with, various
trade secrets, confidential and proprietary information, data, plans and
know-how of the Company, heretofore known only to the Company, its
employees, agents and contractors. These trade secrets and confidential and
proprietary information, including, without limitation, information
relating to the Company's operations or the financial condition or results
of its operations, its marketing or business strategies and plans, the
names, addresses, case histories or plans of any of its customers or
prospective customers, its operating procedures or plans, its advertising
methods or plans, the names, addresses, training, background or other
information regarding any person who is or was an employee of the Company,
and other compilations of information which are owned by the Company and
which are regularly used in the operation of the business of the Company
("Confidential Information"), are and will be the result of large amounts
of time, effort and expense of the Company in developing
4
<PAGE> 5
such information and in recruiting and training such employees and are
essential to the success of the Company. Confidential Information shall be
maintained by Employee on a confidential basis, and Employee shall not
interfere with the employment relationships between the Company and its
employees, agents, customers, suppliers and other contractors by inducing
any of those employees, agents, customers, suppliers or other contractors
to terminate their employment or other relationships with the Company.
(b) COVENANT OF NON-DISCLOSURE. With respect to any Confidential
Information received by Employee, until such time, if any, as such
Confidential Information becomes generally known to the public (other than
as a result of disclosure by Employee), Employee shall:
(i) Not use such Confidential Information for his own purposes
other than in connection with his regular activities for or on behalf
of the Company, and shall refrain from using, disclosing,
disseminating or publishing to or with any person, firm, company or
entity, or making available to any others for any use other than for
or on behalf of the Company, such Confidential Information, directly
or indirectly, during his employment or after termination thereof; and
(ii) Restrict disclosure of such Confidential Information only to
others as may reasonably be necessary in the conduct of the Company's
business; and
(iii) Advise all such persons of the strict obligations of
confidentiality hereunder; and
(iv) Take such steps to protect the confidentiality of
Confidential Information as are necessary to keep it confidential.
Provided, however, that Employee shall not be precluded from
utilizing or disclosing any information regarding the Company which
(i) is generally available to the public; (ii) is lawfully obtained by
the Employee from a source other than the Company; (iii) is required
to be disclosed by or in any judicial or administrative process,
proceeding or investigation or by applicable law; or (iv) is generally
known in the industry in which the Company conducts its business.
(c) COVENANT OF NON-SOLICITATION. Employee shall not, directly or
indirectly, at any time during his employment with the Company and for a
period of two (2) years after termination of such employment:
5
<PAGE> 6
(i) Solicit or attempt to solicit any employee, customer, agent,
supplier or contractor of the Company to leave the employment of the
Company or terminate its relationship with the Company; or
(ii) Assist or attempt to assist any person, firm or Company in
any way to solicit any employee, customer, agent, supplier or
contractor of the Company to leave the employment of the Company or
terminate its relationship with the Company.
(d) TERMINATION OF EMPLOYMENT. At such time as the employment
relationship between Employee and the Company has terminated, Employee
shall:
(i) Promptly return to the Company, or at the Company's option,
destroy, all Confidential Information, including all copies of
documents, notes or materials made by Employee or at his direction,
and promptly return to the Company all company property, including
keys and automobiles; and
(ii) Certify in writing to the Company that he has so complied;
and
(iii) Not use Confidential Information or transact business in a
manner in any way based upon or utilizing Confidential Information.
(e) COVENANT NOT TO COMPETE. Commencing on the effective date of this
Agreement and continuing for a period of five (5) years (or until such
earlier date, if any, as the Company terminates Employee's employment other
than in accordance with Section 7 hereof), Employee shall not, individually
or in concert with any other person or entity, or through a company,
partnership or other entity, own, manage, operate, control, be employed by,
work on behalf of, invest in, assist (financially or otherwise), provide
advisory, consulting or other services for, participate in or be interested
or connected in any manner, with the ownership, management, operation,
promotion or control of, any person, company, partnership, proprietorship
or other business which is engaged, directly or indirectly, in a business
which:
(i) is the same as or similar to the Business or any part
thereof; or
6
<PAGE> 7
(ii) is the same as or similar to any business conducted by the
Company during or as of the date of termination of Employee's
employment; or
(iii) sells or provides a Conflicting Product (as hereinafter
defined) in competition with the Company;
and conducts business in any state of the United States of America or in
any foreign country where the Company, at any time during or as of the date
of termination of Employee's employment hereunder, currently conducts, or
reasonably expects to conduct, its business or any part thereof.
As used herein, "Conflicting Product" means any product, product line
or service which is similar to any product, product line or service that is
being marketed or sold by the Company at any time during or as of the date
of termination of Employee's employment, or with respect to which the
Company has acquired and disclosed to Employee Confidential Information
which the Company intends to use in the marketing or sale of a product or
service.
Employee shall provide, upon request of the Company at any time, such
information as may reasonably be required by the Company to determine his
compliance with the covenants contained in this Section 9(e). Employee may
at any time advise the Company of the facts surrounding any proposed
acquisition or involvement in any business enterprise and request the
Company's written approval that, based solely upon such facts, such
acquisition or involvement does not violate the covenants contained in this
Section 9(e). Such approval shall not be unreasonably withheld.
(f) SCOPE OF COVENANTS. In the event that any provision of the
covenants contained in this Section 9 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of it being extended
over too great a period of time, too large a geographic area, or too great
a range of activities, it should be interpreted to extend only over the
maximum period of time, geographic area, or range of activities as to which
it may be enforceable.
(g) SPECIFIC PERFORMANCE. A breach by Employee of any of the covenants
contained in this Section 9 may cause irreparable damage to the Company,
the extent of which may be difficult to ascertain, and the award of damages
may not be adequate relief. Consequently, the Company may institute an
action to compel the specific performance of these covenants and Employee
consents to the award of such remedy,
7
<PAGE> 8
which remedy shall be cumulative, not exclusive, and shall be in addition
to any other remedy.
(h) SURVIVAL OF COVENANTS. The covenants contained in this Section 9
shall survive termination of this Agreement.
10. MISCELLANEOUS.
(a) Except as otherwise expressly provided herein, this Agreement
shall not be changed, modified, terminated, canceled or amended except by a
writing signed by each party to this Agreement.
(b) This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter hereof, and merges and
supersedes all prior discussions, agreements and undertakings of every kind
and nature between them with respect to the subject matter hereof.
(c) The descriptive headings of the Sections and Paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
(d) The parties hereto acknowledge and agree that the consideration
for the covenants of Employee stated herein is the entering into of this
Agreement and the performance of the parties' respective obligations.
(e) This Agreement is based upon the personal services of Employee,
and the rights and obligations of Employee shall not be assignable. Nothing
in this Agreement shall prohibit or impair Company's right to assign all or
any part of Company's rights, duties or obligations under this Agreement
pursuant to any merger, consolidation, reorganization, sale of stock, sale
of assets, change of name or similar arrangement involving the Company, and
Employee hereby consents to any such assignment which shall be effective
upon the mailing of written notice thereof to Employee.
(f) To be effective, all notices, requests and demands to or upon the
respective parties hereto shall be in writing or by facsimile transmission
or telex (unless otherwise expressly provided herein), and shall be deemed,
unless otherwise expressly provided herein, to have been duly given or
made, in the case of written notice, upon hand delivery or upon three (3)
business days after deposit in the United States mail, registered or
certified, return receipt requested, postage prepaid, and in the case of
facsimile notice, upon telephone confirmation of transmission,
8
<PAGE> 9
and in the case of telex notice, when sent, answerback received, addressed
as follows or to such other address as the respective parties hereto may
designate in writing to the other parties pursuant to this provision:
Employee:
------------------------------
------------------------------
------------------------------
With a copy to:
------------------------------
------------------------------
------------------------------
The Company: United Magazine Company
5131 Post Road
Dublin, Ohio
Attn: Chairman
Facsimile No: (614) 792-2029
With a copy to: Baker & Hostetler
65 East State Street
Columbus, Ohio 43215
Attn: Robert M. Kincaid, Esq.
Facsimile No: (614) 462-2616
(g) This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute but one (1) and the same
instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
(h) This Agreement and the rights and obligations of the parties under
this Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Ohio, excluding conflict of law
principles. Any and all actions regarding this Agreement or the
transactions contemplated hereby brought by the Company may, and all such
actions brought by Employee shall, be forumed and venued in Franklin
County, Ohio. Employee hereby consents to the jurisdiction of the courts of
the State of Ohio, in Franklin County, Ohio, and the United States District
Court for the Southern District of Ohio, and their respective appellate
courts, for purposes of enforcement of this Agreement, and waives any
contention that any such court is an improper venue for such enforcement.
9
<PAGE> 10
(i) Any claim of Employee or the Company relating to this Agreement,
employment hereunder, or termination of employment, shall be determined by
binding arbitration in the City of Columbus, Ohio, in accordance with the
rules then prevailing of the American Arbitration Association, by a panel
of three (3) arbitrators, and judgment upon the award rendered by the
arbitrators may be entered in a court of competent jurisdiction.
(j) The invalidity of any provision or provisions of this Agreement
shall not affect the other provisions, and this Agreement shall be
construed in all respects as if any invalid provisions were omitted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
UNITED MAGAZINE COMPANY,
an Ohio corporation
/s/ Ruth Hunter Smith /s/ Ronald E. Scherer
- ------------------------------------ ----------------------------------------
Witness By: Ronald E. Scherer
Its: Chairman
/s/ Pamela S. Bobson
- ------------------------------------
Witness EMPLOYEE
- ------------------------------------ ----------------------------------------
Witness Thaddeus A. Majerek
- ------------------------------------
Witness
10
<PAGE> 1
Exhibit 2(x)
MANAGEMENT AGREEMENT
This is an Agreement entered into as of the ______ day of ______, 1997,
between United Magazine Company, an Ohio corporation (referred to below as the
"Company") and Klein Management Co., an Ohio corporation (referred to below as
the "Manager").
In consideration of the mutual promises set forth below, the parties agree
as follows:
1. During the term of the Agreement, Manager shall provide for its senior
executive, George R. Klein (hereinafter "Klein") who has extensive experience in
the magazine distribution industry, to devote such time, on dates mutually
agreeable to Company and Manager, to consultation with representatives of
Company on the operations and development and marketing plans for Company's
various operating entities, all of which are engaged in the wholesale
periodicals distribution industry throughout the midwestern United States.
As requested by Company, Manager agrees to make the services of Klein
available to Company for an average of eighty (80) hours per month during the
term of this Agreement.
2. In full payment of all services rendered by Manager under this
Agreement, Company shall:
a. Pay Manager a monthly fee of thirteen thousand two hundred fifty
and no/100 dollars ($13,250.00), payable on the first day of each month, in
advance.
b. Reimburse Manager, within fifteen (15) days after receipt of
statement, for all actual and reasonable out-of-pocket expenses incurred by
Manager for the benefit of Company's business. Manager shall submit monthly
statements of
<PAGE> 2
authorized expenses, which shall be supported to the extent reasonably required
by Company.
3. Manager agrees to regard and treat as secret and confidential all
business records, plans, concepts, designs, drawings and specifications which
may be disclosed to Manager by Company. All such material shall at all times
remain the property of Company. Except for fulfilling the purposes of this
Agreement, Manager agrees not to reproduce, copy or publish, or permit
reproduction, copying or publication, of such material, and will not use or
permit the use of any such material for any other purpose without Company's
prior written consent.
The foregoing restrictions of non-disclosure and non-use shall not apply to
any information which:
a. is or shall have been in Manager's possession prior to disclosure
of same to Manager by Company;
b. has been or may be acquired by Manager from others who have no
commitment of confidence or non-use to Company with respect to same; or
c. is, or through no fault of Manager becomes, a part of the public
domain by publication or otherwise.
4. Company shall have all right, title and interest in and to all drawings,
designs, data, ideas and inventions prepared, developed or conceived by Manager
while performing services for Company under this Agreement, which drawings,
designs, data, ideas and inventions relate to the development of Company's
business and investments, whether developed or conceived jointly with employees
of Company or other Managers or solely by Manager's own efforts.
5. This Agreement shall be effective for a term of three (3) years,
commencing ____________, 1997. This Agreement may be terminated by Company
2
<PAGE> 3
at any time for "good cause" shown. "Good cause" shall be deemed to be Manager's
gross malfeasance, which shall be cause for immediate termination of this
Agreement. Manager may terminate this Agreement at any time upon providing
thirty (30) days' prior written notice to Company. Termination of the Agreement
shall not relieve either party of its obligations under Paragraph 3 and the
first paragraph of Paragraph 4, above. In the event of termination by Company,
Company shall pay Manager, not later than the intended date of termination, any
amount by which a pro rata portion of the minimum monthly fee (computed to the
date of termination) exceeds the total amount paid to Manager by Company
[exclusive of amounts paid pursuant to Paragraph 2(b) during the month in
question].
6. While this Agreement is in effect, Manager will not consult with other
persons (including corporations, firms and individuals) who might be
reasonably considered competitors of Company with respect to the subject matter
of this Agreement.
7. All notices under this Agreement shall be in writing and shall be deemed
to have been sufficiently given if sent by registered mail, postage prepaid, as
follows:
To Company: United Magazine Company
5131 Post Road
Dublin, Ohio 43017
Attn: Chairman
To Manager: Klein Management Co.
------------------------------------
------------------------------------
Attn: George R. Klein
8. Company covenants and represents to Manager that the individuals
executing this Agreement on its behalf have been duly authorized to do so, and
evidence of such authority will be provided to Manager upon request.
3
<PAGE> 4
9. Neither this Agreement nor any rights or duties arising pursuant to it
may be assigned by either side without the prior written consent of the other.
In the event of such an assignment, this Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.
10. This Agreement constitutes the entire understanding of the parties with
respect to the subject matter of the Agreement, and it may be amended only by
means of a written instrument signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
United Magazine Company,
an Ohio corporation
- ------------------------------------ ----------------------------------------
Witness By: Ronald E. Scherer
Its: President
- ------------------------------------
Witness Klein Management Co.,
an Ohio corporation
- ------------------------------------ ----------------------------------------
Witness By: George R. Klein
Its: President
- ------------------------------------
Witness
4
<PAGE> 1
Exhibit 2(y)
FIRST AMENDMENT
TO
AMENDED AND RESTATED
STOCK TRANSFER AND EXCHANGE AGREEMENT
This first amendment (this "Amendment") is made and entered into
______________, 1997, to be effective as of August 1, 1996, among United
Magazine Company, an Ohio corporation ("Unimag"), Ohio Periodical Distributors,
Inc., an Ohio corporation ("OPD"), and all of OPD's shareholders (individually,
an "OPD Shareholder" and collectively, the "OPD Shareholders").
BACKGROUND INFORMATION
----------------------
A. Effective August 1, 1996, Unimag and OPD entered into an Asset Transfer
and Exchange Agreement (the "Original Agreement") which provided for, among
other things, Unimag's acquisition of substantially all of the assets and
business operations of OPD which comprise, are used in, and relate to, OPD's
wholesale magazine, book newspaper and sundries distribution and related
business (the "Wholesale Periodical Business").
B. Unimag, OPD, and the OPD Shareholders modified and amended the Original
Agreement by entering into an Amended and Restated Stock Transfer and Exchange
Agreement among all of them (the "Exchange Agreement"), in order to provide for
Unimag's acquisition of the Wholesale Periodical Business through an exchange,
pursuant to which OPD's common shares, voting, without par value, (each an "OPD
Share" and collectively, the "OPD Shares"), outstanding at the Escrow Closing
(defined in Section 1.2 of the Exchange Agreement) shall bE exchanged for (1)
Unimag's common shares, without par value ("Unimag Shares"), and (2) senior and
subordinated debentures of Unimag. The terms and provisions of the Exchange
Agreement are hereby incorporated herein by reference and, unless otherwise
specifically defined in this Amendment, all capitalized terms used in this
Amendment shall have the same meaning as such terms are defined in the Exchange
Agreement.
C. Unimag, OPD, and the OPD Shareholders now desire to modify and amend the
Exchange Agreement in order to provide for Unimag's acquisition of the Wholesale
Periodical Business through a merger of OPD with and into Unimag, with Unimag
being the surviving entity of the merger (the "Merger"). This Amendment, along
with the Exchange Agreement, is intended to constitute an agreement of merger
under O.R.C. Section 1701.78.
- 1 -
<PAGE> 2
STATEMENT OF AGREEMENT
The parties to this Amendment (each a "Party," and collectively, the
"Parties") hereby acknowledge the accuracy of the above Background Information
and, in consideration of the covenants and agreements set forth in this
Amendment, the Parties agree as follows:
Section 1. If any inconsistencies exist between the provisions of this
Amendment and the provisions of the Exchange Agreement, then the provisions of
this Amendment shall control and supersede the inconsistent provisions of the
Exchange Agreement. Unless otherwise specifically indicated, all references to
sections are to sections of the Exchange Agreement.
Section 2. The Exchange Agreement is amended by deleting the current
Sections 1.2 and 1.3 in their entirety and inserting the following in their
place:
Section 1.2 THE MERGER. Upon the terms and subject to the conditions
described in this Agreement, and in accordance with the provisions of Ohio
Revised Code Chapter 1701 (the "Ohio Statute"), OPD shall be merged with
and into Unimag. The Merger shall be consummated by filing with the Ohio
Secretary of State a Certificate of Merger in a form to be prepared by
Unimag and approved by OPD (the "Certificate of Merger"). Following the
Merger, the separate corporate existence of OPD shall cease and Unimag
shall continue as the surviving corporation and shall continue its
existence under the Ohio Statute. Unimag, in its capacity as the surviving
corporation of the Merger, is sometimes referred to in this Agreement as
the "Surviving Corporation."
Section 1.3 ESCROW CLOSING; CLOSING; EFFECTIVE TIME. The escrow
closing of the Merger and the other transactions contemplated by this
Agreement (the "Escrow Closing") shall be held at the offices of Baker &
Hostetler, 65 East State Street, Columbus, Ohio 43215, commencing at 10:00
a.m. Columbus, Ohio time on such date (the "Escrow Closing Date") as may be
reasonably designated by Unimag; provided that the Escrow Closing shall be
held not later than August 31, 1997. As provided in Section 6.5, after the
Escrow Closing the only conditions to the release of this Agreement and the
other documents executed in connection with the transactions contemplated
by this Agreement (the "Additional Documents") from the Document Escrow
Agreement (defined in Section 6.4) shall be the approval of the Merger by
the shareholders of Unimag and the escrow closing of certain other
acquisitions. Within ten days after such approvals (the "Closing Date"),
the Parties will cause the Agreement and the Additional Documents to be
delivered to the appropriate Party in accordance with the terms and
conditions of the Document Escrow Agreement and the Parties will close the
Merger (the "Closing"). In no event shall the Closing be held later than
September 30, 1997. Promptly following the Closing, OPD and Unimag shall
cause the Certificate of Merger to be filed with the Ohio Secretary of
State and the Merger shall become effective when the Certificate of Merger
has been so filed (the "Effective Time").
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<PAGE> 3
Section 1.4 ARTICLES OF INCORPORATION; CODE OF REGULATIONS. The
articles of incorporation of the Surviving Corporation existing at the
Effective Time shall be the articles of incorporation of the Surviving
Corporation after the Merger, until amended in accordance with the Ohio
Statute. The code of regulations of the Surviving Corporation existing at
the Effective Time shall be the code of regulations of the Surviving
Corporation after the Merger, until amended in accordance with the Ohio
Statute.
Section 1.5 DIRECTORS AND OFFICERS. The directors and officers of the
Surviving Corporation shall continue to hold such offices after the Merger
and shall serve pursuant to the code of regulations of the Surviving
Corporation.
Section 1.6 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in Section 1701.78 of the Ohio Statute.
Section 1.7 TAX EFFECT OF THE MERGER. The Parties intend that the
Merger constitute a "reorganization" with in the meaning of Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended, and that the
adoption of this amendment constitutes the adoption of a plan of
reorganization for purposes thereof.
Section 3. The Exchange Agreement is amended by deleting the current
opening sentence of Section 2.1 and all of Section 2.1(a) in their entirety and
inserting the following in their place:
Section 2.1 CONVERSION OF CAPITAL STOCK. At the Effective Time and by
virtue of the Merger:
(a) OUTSTANDING OPD SHARES. Each OPD Share which is issued and
outstanding immediately prior to the Effective Time shall be converted
into the right to receive, subject to the provisions of Section 2.2,
and subject to the adjustments provided for in Sections 2.1(b) and
3.3, (i) 20,381.55 Unimag Shares (an aggregate of 10,190,774 Unimag
Shares for all OPD Shares converted), and (ii) $14,961.64 principal
amount of Unimag Debentures (an aggregate of $7,480,820 principal
amount of Unimag debentures for all OPD Shares converted) (the "Unimag
Debentures"). The Unimag Debentures shall be issued pursuant to the
terms of the Debenture Agreement attached hereto as Exhibit A. An
aggregate of $6,415,419 principal amount of the Unimag Debentures
($12,830.98 per OPD Share converted) will be Senior Debentures (as
defined in the Debenture Agreement), and the balance of the Unimag
Debentures will be Subordinated Debentures (as defined in the
Debenture Agreement).
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<PAGE> 4
Section 4. The Exchange Agreement is amended by deleting the current last
paragraph of Section 2.1(b) in its entirety.
Section 5. The Exchange Agreement is amended by adding the following new
subsection Section 2.1(d) after existing subsection Section 2.1(c):
(d) UNIMAG SHARES HELD BY OPD. OPD currently owns 5,000,000 shares of
Unimag Stock. At the Closing, OPD shall surrender to Unimag the
certificates evidencing such 5,000,000 Unimag Shares and such certificates
will be canceled.
Section 6. The Exchange Agreement is amended by adding the following new
section Section 2.3 after the existing section Section 2.2:
Section 2.3 EXCHANGE OF KDR NOTE. The promissory note dated July, 1992
between OPD, as debtor, and KDR Limited, an Ohio limited liability company
("KDR"), as creditor, with a principal amount of $5,000,000 (the "KDR
Note"), together with accrued interest thereon, if any, will not be assumed
by Unimag in the Merger. At the Effective Time, the KDR Note, together with
accrued interest thereon, if any, will be exchanged for (a) cash in the
amount of $500,000 plus any accrued interest, and (b)Unimag Subordinated
Debentures in the aggregate principal amount of $4,500,000.
Section 7. The Parties acknowledge that the percentages in the first
paragraph of Section 2.1(b) of the Exchange Agreement (67.142% with regard to
Unimag Shares and 32.858% with regard to Unimag Debentures) were calculated
based upon initial percentages of 51% and 49%, respectively, and then making an
adjustment based upon the 5,000,000 Unimag Shares currently owned by OPD. These
5,000,000 Unimag Shares (valued at $1.50 per share for a total value of
$7,500,000) were deducted from the total valuation of $22,766,980 in determining
the aggregate amount of Unimag Debentures to be issued to the OPD Shareholders
in connection with the Merger ($22,766,980 - $7,500,000) x 49% = $7,480,820) and
this $7,480,820 amount is approximately 32.858% of $22,766,980. The difference
between these two amounts ($15,286,160) represents the portion of the total
valuation used to determine the aggregate number of Unimag Shares (15,286,160 /
$1.5 = 10,190,774) to be issued to the OPD Shareholders in connection with the
Merger and this $15,286,160 amount is approximately 67.142% of $22,766,980.
Section 8. The Exchange Agreement is amended such that in Section 2.2, the
Unimag Shares to be issued to each OPD Shareholder in connection with the Merger
shall not be issued by Unimag at the Closing, but shall be issued by Unimag
immediately after the Effective Time.
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<PAGE> 5
Section 9. The Exchange Agreement is amended such that all references in
the Exchange Agreement to the "Exchange" shall be deemed to be references to the
"Merger."
UNITED MAGAZINE COMPANY
By
--------------------------------------
David B. Thompson, Treasurer
OHIO PERIODICAL DISTRIBUTORS, INC.
By
--------------------------------------
Ronald E. Scherer, President
OPD SHAREHOLDERS:
----------------------------------------
Bank One Trust Company, NA, Trustee
under the Roger L. Scherer Agreement of
Trust FBO Ronald E. Scherer dated June
14, 1979
------------------------------------
Bank One Trust Company, NA, Trustee
under the Roger L. Scherer Agreement of
Trust FBO Linda Hayner Talbott dated
June 14, 1979
----------------------------------------
TED RYSZ
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