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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (date of earliest event reported): February 9, 1998
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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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
In connection with the transactions described in Item 2, a shareholder
voting agreement was entered into by the former shareholders of The Stoll
Companies (Richard Stoll, Sr., individually and as trustee, Richard Stoll, Jr.,
Margaret M. Stoll, Francis Stoll, Virginia Hiteshew, Stephanie Hamilton, Nancy
Stoll Lyman, John O. Stoll, III, Mary Olerich, James F. Stoll, William W. Stoll
and Suzanne M. Voss), by the former shareholders of Michiana News Service, Inc.
(Thaddeus S. Majerek, individually and as trustee, Thaddeus A. Majerek,
individually and as trustee, Michael J. Majerek, individually and as trustee,
Jeffrey A. Majerek, Anita M. Majerek, Thomas E. Majerek, Jeanine E. Gilbert,
Deborah A. Toman and David W. Majerek), Northern News Company, Wholesalers
Leasing Corp., Ronald E. Scherer, Linda Talbott, two Scherer family trusts, and
Ted Rysz. Although the Company continues to be controlled by Ronald E. Scherer,
chairman of the board, the Shareholder Voting Agreement has the effect of making
the parties thereto members of a control group.
The Shareholder Voting Agreement provides that during the term of the
Agreement each party to the Agreement will vote his or her Common Shares in
favor of election to the Company's board of directors of: (a) two Scherer
Company representatives, (b) two Stoll Company representatives, (c) two Klein
Company representatives, and (d) one Michiana representative. Ronald E. Scherer
is to designate the Scherer Company representatives to be elected by the group,
Richard Stoll, Sr. and Richard Stoll, Jr. are to designate the Stoll Company
representatives to be elected by the group, George R. Klein is to designate the
Klein Company representatives to be elected by the group, and Thaddeus S.
Majerek is to designate the Michiana Representative to be elected by the group.
With the consummation of the transactions described below this Shareholder
Voting Agreement is now effective and constitutes the formation of a group for
voting purposes. The Shareholder Voting Agreement is to terminate on the earlier
to occur of: (i) such time as all of the Debentures issued under the Debenture
Agreement in connection with the transactions described below, along with all
accrued interest thereon, have been paid in full, or (ii) at such time as the
Executive Committee consisting of Ronald E. Scherer, Richard Stoll, Sr., Richard
Stoll, Jr., Thaddeus S. Majerek and George R. Klein unanimously agrees to
terminate the Shareholder Voting Agreement.
The consideration used by the persons entering into the Shareholder
Voting Agreement consisted of the transfer of their businesses to the Company in
the various acquisitions described in Item 2, as follows:
(a) The common shares, without par value ("Common Shares") of the
Company reported as beneficially owned by Thaddeus S. Majerek,
individually and as trustee, Thaddeus A. Majerek, individually
and as trustee, Michael J. Majerek, individually and as
trustee, were acquired (i) in consideration for the transfer
of the stock of Michiana News Service, Inc. by all of its
shareholders in exchange for Common Shares of the Company and
Senior and Subordinated Debentures of the Company in the
Michiana transaction described in Item 2, and (ii) as payment
of 67% of accrued interest due through December 31, 1997,
under the Senior and Subordinated Debentures of the Company.
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(b) The Common Shares of the Company reported as beneficially
owned by Richard Stoll, Sr., individually and as trustee,
Richard Stoll, Jr., Margaret M. Stoll, Francis Stoll, Virginia
Hiteshew, Stephanie Hamilton, Nancy Stoll Lyman, John O.
Stoll, III, Mary Olerich, James F. Stoll, William W. Stoll and
Suzanne M. Voss were acquired (i) in consideration for the
transfer by them of all of the stock of The Stoll Companies in
exchange for Common Shares of the Company and Senior and
Subordinated Debentures of the Company in the Stoll
transaction described in Item 2, and (ii) as payment of 67% of
accrued interest due through December 31, 1997, under the
Senior and Subordinated Debentures of the Company.
(c) The Common Shares of the Company reported as beneficially
owned by Northern News Company were acquired (i) in
consideration for the transfer by it to the Company of all of
its assets and liabilities related to the wholesale
distribution of periodicals in exchange for Common Shares of
the Company and Senior and Subordinated Debentures of the
Company in the Northern transaction described as part of the
Scherer Affiliate transactions in Item 2, and (ii) as payment
of 67% of accrued interest due through December 31, 1997,
under the Senior and Subordinated Debentures of the Company.
(d) The Common Shares of the Company reported as beneficially
owned by Wholesalers Leasing Corp. were acquired (i) in
consideration for the transfer by it to the Company of all of
its assets and liabilities related to the wholesale
distribution of periodicals in exchange for Common Shares of
the Company and Senior and Subordinated Debentures of the
Company in the Wholesaler's transaction described as part of
the Scherer Affiliate transactions in Item 2, and (ii) as
payment of 67% of accrued interest due through December 31,
1997, under the Senior and Subordinated Debentures of the
Company.
(e) Of the Common Shares of the Company reported as beneficially
owned by Ronald E. Scherer, 500,000 shares were previously
beneficially owned by him due to his shared voting power of
Common Shares of the Company owned by Ohio Periodical
Distributors, Inc. ("OPD"). In the OPD transaction described
in Item 2, OPD merged into the Company, the 500,000 Common
Shares owned by it became treasury stock of the Company and
the OPD shareholders received 1,019,077 Common Shares and
Senior and Subordinated Debentures of the Company. 99% of the
OPD stock was owned by two Scherer family trusts, over which
Mr. Scherer shares voting power. As a result, 99% of the
Common Shares, or 1,008,886 Common Shares now owned by the
trusts, are beneficially owned by Mr. Scherer. Additionally,
Mr. Scherer shares voting power over the Common Shares of the
Company acquired by Northern News Company and Wholesalers
Leasing Corp., as described in Item 2. Additionally, as a
shareholder of Scherer Companies, Mr. Scherer received 21,433
Common Shares in the Scherer Companies transaction described
in Item 2, in which all of the stock of Scherer Companies was
transferred to the Company in exchange for
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Common Shares of the Company and Senior and Subordinated
Debentures of the Company. Finally, Mr. Scherer, the Scherer
family trusts, Northern, and Wholesalers received Common
Shares as payment of 67% of accrued interest due to them
through December 31, 1997, under the Senior and Subordinated
Debentures of the Company issued to them in connection with
certain of the acquisitions described in Item 2.
(f) Of the Common Shares of the Company reported as beneficially
owned by Linda Talbott, 500,000 shares were previously
beneficially owned by her due to her shared voting power of
common shares of the Company owned by Ohio Periodical
Distributors, Inc. ("OPD"). In the OPD transaction described
in Item 2, OPD merged into the Company, the 500,000 Common
Shares owned by it became treasury stock of the Company and
the OPD shareholders received 1,019,077 Common Shares and
Senior and Subordinated Debentures of the Company. 99% of the
OPD stock was owned by two Scherer family trusts, over which
Ms. Talbott shares voting power. As a result, 99% of the
Common Shares, or 1,008,886 Common Shares now owned by the
trusts, are beneficially owned by Ms. Talbott. Additionally,
Ms. Talbott shares voting power over the Common Shares of the
Company acquired by Northern News Company and Wholesalers
Leasing Corp., as described in Item 2. Additionally, as a
shareholder of Scherer Companies, Ms. Talbott received 21,433
Common Shares in the Scherer Companies transaction described
in Item 2, in which all of the stock of Scherer Companies was
transferred to the Company in exchange for Common Shares of
the Company and Senior and Subordinated Debentures of the
Company. Finally, Ms. Talbott, the Scherer family trusts,
Northern, and Wholesalers received Common Shares as payment of
67% of accrued interest due to them through December 31, 1997,
under the Senior and Subordinated Debentures of the Company
issued to them in connection with certain of the transactions
described in Item 2.
(g) The Common Shares of the Company reported as beneficially
owned by Ted Rysz were acquired, as a shareholder of OPD,
Scherer Companies, and Read-mor (i) in the OPD, Scherer
Companies, and Read-mor transactions described in Item 2, and
(ii) as payment of 67% of accrued interest due to him through
December 31, 1997, under the Senior and Subordinated
Debentures of the Company issued to him in connection with the
OPD, Scherer Companies, and Read-mor transactions.
(h) Both the Ronald E. Scherer Trust and the Linda Haynor Talbott
(collectively, the "Trusts") are governed under the same
instrument and have the same trustee. Therefore, the same
trustee shares voting power over the Common Shares
beneficially owned by each Trust and each Trust is deemed to
be the beneficial owner of the Common Shares beneficially
owned by the other Trust. Of the Common Shares of the Company
reported as beneficially owned by the Trusts, 500,000 Common
Shares were previously beneficially owned due to the Trusts
shared voting power of Common Shares of the Company owned by
Ohio
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Periodical Distributors, Inc. ("OPD"). In connection with the
merger of OPD into the Company, the 500,000 Common Shares
owned by it became treasury stock of the Company and the OPD
shareholders received 1,019,077 Common Shares and Senior and
Subordinated Debentures of the Company. 99% of the OPD stock
was owned by Trusts. 99% of the Common Shares, or 1,088,886
Common Shares now are beneficially owned by the Trusts.
Additionally, the Trusts share voting power over the Common
Shares of the Company acquired by Northern News Company
("Northern") and Wholesalers Leasing Corp. ("Wholesalers"), in
connection with the Company's acquisition of the wholesale
periodical assets of these two companies. Finally, the Trusts,
Northern, and Wholesalers received Common Shares of the
Company as payment of 67% of accrued interest due to them
through December 31, 1997, under the Senior and Subordinated
Debentures of the Company issued to them in connection with
certain of the acquisitions described in Item 2.
The Shareholder Voting Agreement will terminate upon payment of the
debentures issued in connection with the acquisitions described in Item 2. This
will have the effect of changing the control of the Company by eliminating the
ability of this particular group, as a group, to elect members to the board of
directors.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On February 9, 1998, United Magazine Company (the "Company") acquired
all of the outstanding stock of The Stoll Companies in exchange for common
shares, without par value, of the Company and senior and subordinated debentures
of the Company, as described in the Company's definitive proxy statement for its
1997 annual meeting of shareholders, which was filed with the Securities and
Exchange Commission on August 11, 1997 and which is incorporated herein by
reference.
On February 9, 1998, the Company acquired all of the outstanding stock
of Michiana News Service, Inc. in exchange for common shares, without par value,
of the Company and senior and subordinated debentures of the Company, as
described in the Company's definitive proxy statement for its 1997 annual
meeting of shareholders, which was filed with the Securities and Exchange
Commission on August 11, 1997 and which is incorporated herein by reference.
On February 9, 1998, Ohio Periodical Distributors, Inc., an Ohio
corporation ("OPD"), merged with and into the Company and in connection
therewith the shareholders of OPD received common shares, without par value, of
the Company and senior and subordinated debentures of the Company, as described
in the Company's definitive proxy statement for its 1997 annual meeting of
shareholders, which was filed with the Securities and Exchange Commission on
August 11, 1997 and which is incorporated herein by reference.
On February 9, 1998, the Company acquired the assets and assumed the
liabilities of Northern News Company ("Northern") which relate to the wholesale
distribution of periodicals
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(including the capital stock of MacGregor News Company, Inc. owned by Northern),
in exchange for common shares, without par value, of the Company and senior and
subordinated debentures of the Company, as described in the Company's definitive
proxy statement for its 1997 annual meeting of shareholders, which was filed
with the Securities and Exchange Commission on August 11, 1997 and which is
incorporated herein by reference.
On February 9, 1998, the Company acquired all of the outstanding stock
of Scherer Companies in exchange for common shares, without par value, of the
Company and senior and subordinated debentures of the Company, as described in
the Company's definitive proxy statement for its 1997 annual meeting of
shareholders, which was filed with the Securities and Exchange Commission on
August 11, 1997 and which is incorporated herein by reference.
On February 9, 1998, the Company acquired the assets and assumed the
liabilities of Wholesalers Leasing Corp. which relate to the wholesale
distribution of periodicals in exchange for common shares, without par value, of
the Company and senior and subordinated debentures of the Company, as described
in the Company's definitive proxy statement for its 1997 annual meeting of
shareholders, which was filed with the Securities and Exchange Commission on
August 11, 1997 and which is incorporated herein by reference.
On February 9, 1998, the Company acquired all of the outstanding stock
of The Geo. R. Klein News Co., Central News Co., and Newspaper Sales, Inc. in
exchange for common shares, without par value, of the Company and senior and
subordinated debentures of the Company, as described in the Company's definitive
proxy statement for its 1997 annual meeting of shareholders, which was filed
with the Securities and Exchange Commission on August 11, 1997 and which is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
At this time it is impracticable to provide all of the required
financial statements. The additional required financial statements will be filed
as an amendment to this Form 8-K as soon as practicable, but in no event, later
than 60 days after the date this Form 8-K is due.
The Company previously has filed combined financial statements and pro
forma financial information for all of the acquisitions since the fourth fiscal
quarter of 1996. The Company is in the process of completing the combined 10-KSB
for fiscal 1997 and the combined 10-Q for the first fiscal quarter of 1998.
The following exhibits are included herein:
28. Definitive Proxy Statement of United Magazine Company for the 1997
Annual Meeting of Shareholders.
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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: February 25, 1998 By: /s/ Thomas L. Gerlacher
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Name: Thomas L. Gerlacher
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Title: Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No. Exhibit Description Page No.
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28 Definitive Proxy Statement of United Magazine Incorporated by reference to
Company for its 1997 Annual Shareholders the definitive form of the
Meeting. proxy statement filed with
the SEC on August 11, 1997
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