<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
UNTIED MAGAZINE COMPANY
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
================================================================================
<PAGE> 2
UNITED MAGAZINE COMPANY
------------------
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 11, 1998
To the Shareholders of UNITED MAGAZINE COMPANY:
The Annual Meeting of Shareholders of United Magazine Company (the
"Company") will be held at the Holiday Inn, 2350 Westbelt Drive, Columbus, Ohio
on Thursday, June 11, 1998, at 10:00 a.m., Daylight Savings Time, for the
following purposes:
1. To elect ten (10) directors, each to serve for a term of one
year or until their successors are duly elected and qualified.
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on May 1, 1998,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting and any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors,
/s/ Ruth Hunter Smith
Ruth Hunter Smith
Secretary
Dublin, Ohio
May 26, 1998
<PAGE> 3
UNITED MAGAZINE COMPANY
PROXY STATEMENT
1998 ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 1998
GENERAL INFORMATION
- -------------------
This Proxy Statement is furnished to the shareholders of United
Magazine Company, an Ohio Corporation (the "Company" or "UNIMAG"), with
principal executive offices located at 5131 Post Road, Dublin, Ohio 43017, in
connection with the solicitation by the Board of Directors of the Company (the
"Board of Directors") of proxies to be voted at the 1998 Annual Meeting of
Shareholders of the Company (the "Annual Meeting") to be held on Thursday, June
11, 1998, at the Holiday Inn, 2350 Westbelt Drive, Columbus, Ohio, and any
adjournment thereof. This Proxy Statement and the accompanying proxy card are
first being mailed to shareholders on or about May 27, 1998.
Shareholders of record at the close of business on May 1, 1998 are
entitled to notice of and to vote at the Annual Meeting. As of that date, there
were 7,411,314 Common Shares of the Company, without par value (the "Common
Shares"), issued and outstanding net of shares held in treasury. Each
shareholder of record on May 1, 1998 is entitled to one vote per share with
respect to all matters that may be brought before the Annual Meeting.
All shares represented by properly executed proxies received by the
Board of Directors pursuant to this solicitation will be voted in accordance
with the shareholder's directions specified on the proxy card. If no directions
have been specified by marking the appropriate squares on the accompanying proxy
card, the shares represented by such proxy will be voted in accordance with the
recommendations of the Board of Directors, which are FOR the election of Ronald
E. Scherer, David B. Thompson, Eugene J. Alfonsi, Robert H. Monnaville, Jr.,
George R. Klein, Richard H. Stoll, Sr., Thaddeus A. Majerek, Nancy Stoll Lyman,
William D. Parker and R.L. Richards as directors of the Company.
Any shareholder returning the accompanying proxy has the power to
revoke it at any time prior to its exercise by filing a written revocation with
the Secretary of the Company, Ruth Hunter Smith, 5131 Post Road, Dublin, Ohio
43017, duly executing and delivering to the Secretary of the Company a proxy
card bearing a later date, or by voting in person at the Annual Meeting.
Remainder of Page Intentionally Left Blank.
<PAGE> 4
PROPOSAL I
ELECTION OF DIRECTORS
NUMBER AND ELECTION OF DIRECTORS
The Code of Regulations of the Company provides for a Board of
Directors of thirteen (13), with each director to serve for a one-year term. Ten
(10) directors have been nominated for election to office by the current Board
of Directors. Having the number of directors at thirteen (13) and electing ten
(10) directors will have the effect of creating three (3) vacancies. Vacancies
on the Board of Directors may be filled by the directors, and it is contemplated
that additional directors who bring special expertise and experience to the
Company may be added between meetings of the shareholders.
On February 9, 1998, a shareholders voting agreement among Ronald E.
Scherer, Linda Scherer (Hayner) Talbott, Teddy Rysz, The Roger L. Scherer Trust
F/B/O Ronald E. Scherer, The Roger L. Scherer Trust F/B/O Linda Hayner (Scherer)
Talbott, Northern News Company, Wholesaler's Leasing Corp., George R. Klein,
Stephanie Hamilton, Virginia Hiteshew, Nancy Stoll Lyman, Mary Oelerich, Francis
C. Stoll, James F. Stoll, John O. Stoll, III, Margaret M. Stoll, Richard H.
Stoll, Jr., Richard H. Stoll, Sr., William Stoll, Suzanne Voss, Jeanine E.
Gilbert, Anita M. Majerek, David W. Majerek, Jeffrey A. Majerek, Michael J.
Majerek, Thaddeus A. Majerek, Thaddeus S. Majerek, Thomas E. Majerek, and
Deborah A. Toman became effective. Pursuant to the terms of that agreement, the
parties are required to vote for election to the Board of Directors of two (2)
representatives of the Scherer Affiliates, two (2) Stoll representatives, one
(1) Michiana representative and two (2) Klein representatives. The two (2)
Scherer Affiliate designees are Ronald E. Scherer and Eugene J. Alfonsi; the two
(2) Stoll designees are Richard H. Stoll, Sr. and Nancy Stoll Lyman; the
Michiana designee is Thaddeus A. Majerek; and the two (2) Klein designees are
George R. Klein and a Director to be designated by Mr. Klein after the Annual
Meeting. This shareholders agreement could constitute a change in control of the
Company to persons upon whom the parties agree.
Ohio law and the Code of Regulations of the Company provide that, if
notice in writing is given to the President, a Vice President or the Secretary
of the Company by any shareholder not less than forty-eight (48) hours before
the time fixed for the holding of the Annual Meeting, that such shareholder
desires that voting for the election of directors be cumulative, and if
announcement of the giving of such notice is made upon the convening of the
Annual Meeting by the Chairman or Secretary by or on behalf of the shareholder
giving such notice, each shareholder will have the right to cumulate his votes
equal to the number of shares he owns multiplied by the number of directors to
be elected. All of such votes may be cast for a single nominee or may be
distributed among any two (2) or more nominees as such shareholder may desire.
If cumulative voting is invoked, and unless contrary instructions are given by a
shareholder who signs a proxy, all votes represented by such proxy will be
divided evenly among the candidates nominated by the Board of Directors, except
that if such distribution of votes should for any reason not be effective to
elect all of the Board of Director's nominees, then such votes will be cast so
as to maximize the number of the Board of Director's nominees elected to the
Board of Directors.
Nominees receiving the highest number of votes will be elected to the
Board of Directors. Abstentions and broker non-votes will not be counted in
determining the votes cast in the election of Directors and will not have a
positive or negative effect on the election.
NOMINEES FOR ELECTION
It is intended that proxies that are executed, returned and not limited
to the contrary will be voted in favor of electing the following as directors to
hold office for a term expiring at the Annual Meeting of Shareholders to be held
in 1998, or until their successors are elected and
1
<PAGE> 5
qualified. The Company has no reason to believe that any of the nominees named
below will not stand for election or serve as a director. In the event any
person nominated fails to stand for election, the proxies shall be voted for the
election of such person or persons as shall be designated by the persons named
in the proxy.
- --------------------------------------------------------------------------------
Name Age Principal Occupation Director Since
- ---- --- -------------------- --------------
- --------------------------------------------------------------------------------
Ronald E. Scherer 48 Corporate Executive 1989
- --------------------------------------------------------------------------------
David B. Thompson 58 Corporate Executive 1988
- --------------------------------------------------------------------------------
Robert H. Monnaville, Jr. 53 Corporate Executive 1995
- --------------------------------------------------------------------------------
Eugene J. Alfonsi 61 Corporate Executive 1992
- --------------------------------------------------------------------------------
George R. Klein 56 Corporate Executive 1997
- --------------------------------------------------------------------------------
Thaddeus A. Majerek 48 Corporate Executive 1992
- --------------------------------------------------------------------------------
Richard H. Stoll, Sr. 65 Retired 1997
- --------------------------------------------------------------------------------
Nancy Stoll Lyman 38 Corporate Executive 1997
- --------------------------------------------------------------------------------
R.L. Richards 49 Corporate Executive 1997
- --------------------------------------------------------------------------------
William D. Parker 61 Retired 1997
- --------------------------------------------------------------------------------
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held five (5) meetings in fiscal year 1997.
Except for new directors George R. Klein, Richard H. Stoll, Sr., Nancy Stoll
Lyman, William D. Parker and R.L. Richards, each current member of the Board of
Directors attended or participated by telephone in one hundred percent (100%) of
the fiscal year 1997 meetings of the Board of Directors. The Board also took
written actions in lieu of a meeting, as provided by law in Ohio, on four (4)
occasions in fiscal year 1997.
In August, 1997, the Board of Directors created a Chairman's Committee,
comprised of Ronald E. Scherer*, George R. Klein, William E. Parker and R.L.
Richards; an Audit Committee, comprised of David B. Thompson*, George R. Klein,
Robert H. Monnaville and R.L. Richards; a Legal Committee, comprised of Robert
H. Monnaville* and Eugene J. Alfonsi; an Operating Committee, comprised of David
B. Thompson*, Eugene J. Alfonsi, Thaddeus A. Majerek and Robert H. Monnaville; a
Compensation Committee, comprised of Robert H. Monnaville*, Nancy Stoll Lyman
and William E. Parker; and a Finance Committee, comprised of David B. Thompson*,
Thaddeus A. Majerek and Richard H. Stoll, Sr. The Company does not have a
committee whose functions include nominating Directors. The Chairman's
Committee, Legal Committee, Operating Committee and Compensation Committee all
met one (1) time during the last quarter of calendar year 1997. (*Asterisks
denote Committee Chairman.)
DIRECTORS AND EXECUTIVE OFFICERS
RONALD E. SCHERER, age 48, has been a member of the Board of Directors
since 1989. Mr. Scherer was appointed President and Chief Executive Officer of
the Company in August 1989, became Chairman of the Board of Directors in
February 1992, and has acted in those capacities since his respective
appointments. Mr. Scherer has also served as Chairman of the Board of Directors
of Scherer Companies since 1982 and was appointed Senior Chairman of such Board
of Directors in 1993. Other companies under Mr. Scherer's ownership, control or
management have engaged in such businesses as real estate, manufacturing,
pharmaceutical distribution, and data processing. Mr. Scherer is an executive
officer and shareholder of the National Wholesale Drug Co., which filed a
voluntary petition under Chapter 11 in the United States Bankruptcy Court for
the Eastern District of Michigan in February 1993.
DAVID B. THOMPSON, age 58, has been a member of the Board of Directors
since 1988. He also was appointed Treasurer and Chief Financial Officer of the
Company in August 1989, but ceased serving as Chief Financial Officer in
December 1993. Additionally, Mr. Thompson, a Certified Public Accountant, was
affiliated with Scherer Companies since 1973 when he was
2
<PAGE> 6
elected as a Director and appointed Treasurer and Chief Financial Officer. In
1993, Mr. Thompson became Chairman of the Board of Directors and Chief Executive
Officer of Scherer Companies. Currently, Mr. Thompson is an officer and/or a
director of a number of companies owned, controlled or managed by Mr. Scherer.
Mr. Thompson graduated in 1963 with a BS degree in Accounting from the
University of Detroit. Mr. Thompson is an executive officer of the National
Wholesale Drug Co., which filed a voluntary petition under Chapter 11 in the
United States Bankruptcy Court for the Eastern District of Michigan in February
1993.
ROBERT H. MONNAVILLE, JR., age 53, has been a member of the Board of
Directors of the Company since March of 1995. Mr. Monnaville has served as
President of the Company since September of 1997. Mr. Monnaville was President
of Service News Company, d/b/a Yankee News Company, one of the Company's
subsidiaries, from March of 1995. From May, 1993 to March, 1995, Mr. Monnaville
served as the General Manager of Yankee News Company. From September, 1992 to
May, 1993, Mr. Monnaville served as the General Manager of National Wholesale
Drug Co., a wholesale pharmaceutical distributor, and, again, from 1990 to July,
1992, Mr. Monnaville served as General Manager of Yankee News Company.
Altogether, Mr. Monnaville has served in several executive capacities with the
Company since 1982. Mr. Monnaville is a graduate of John Carroll University and
has a law degree from Cleveland State University. Prior to joining Yankee News
Company, Mr. Monnaville engaged in the practice of law as a labor attorney for
United Technologies in Connecticut. Additionally, Mr. Monnaville serves on the
Board of Directors of Blue Cross/Blue Shield of Connecticut.
EUGENE J. ALFONSI, age 61, has been a member of the Board of Directors
since 1992. Mr. Alfonsi currently is a Vice-President of the Company. Mr.
Alfonsi was the President of the Periodical Division of Scherer Companies from
1986 to September 1993. In September 1993, Mr. Alfonsi was appointed as the
President and Chief Operating Officer of Scherer. Prior to joining Scherer
Companies in 1986, he owned and managed several wholesale periodical
distribution companies, a business in which he has been employed for most of his
adult life. Mr. Alfonsi graduated in 1963 with a B. A. degree in Economics and
Finance from Milliken University in Illinois.
GEORGE R. KLEIN, age 56, has been a member of the Board of Directors
since September of 1997. Mr. Klein has been President of the Cleveland, Ohio
Division of the Company since September of 1996. Mr. Klein was formerly Vice
Chairman of The George R. Klein News Co., Central News Co. and Newspaper Sales,
Inc. In addition, for over ten years, Mr. Klein has served as President and
Chairman of the Executive Committee for East Texas Distributing Co., a magazine
wholesaler located in Houston, Texas. Mr. Klein also has ownership interests in
other magazine wholesale companies and in other companies including companies
that provide real estate and management services to Klein. Mr. Klein is a
graduate of Colorado College in 1964 with a Bachelor of Science degree and has
an MBA from the University of Denver in 1965.
THADDEUS A. MAJEREK, age 48, has been a member of the Board of
Directors since 1992. Since 1997, Mr. Majerek has been Vice-President of
Customer Corporate Relations of the Company. From 1988 to February of 1998, Mr.
Majerek served as the President and Chief Executive Officer of Michiana News
Service, Inc. in Niles, Michigan. Mr. Majerek graduated in 1974 with a BS degree
in Business and Physical Education from Eastern Michigan University, and in 1989
with an MBA degree from the University of Notre Dame. Mr. Majerek has been
active in the magazine distribution business since 1971. He has managed magazine
distribution companies in Utah, Indiana, and Michigan.
RICHARD H. STOLL, SR., age 65, has been a member of the Board of
Directors since September of 1997. Mr. Stoll Sr. was the Chairman of the Board
of Directors and Chief Executive Officer of The Stoll Companies and was employed
by The Stoll Companies from July of 1954 to July of 1997. Mr. Stoll Sr. is a
graduate of Colgate University in 1954 with a degree in history. Mr. Stoll is
the father of Nancy Stoll Lyman.
3
<PAGE> 7
NANCY STOLL LYMAN, age 38, has been a member of the Board of Directors
since September of 1997. Ms. Lyman was a Director of The Stoll Companies. Ms.
Lyman is the Founder and Managing Consultant for the Executive Development
Group, a management and consulting firm formed in 1991. Previously Ms. Lyman was
the Manager of Management Training and Development at Merrill Lynch and an
Associate with Morgan Stanley in the Fixed Income Division. Ms. Lyman is a
Certified Public Accountant who graduated from Saint Mary's College in Notre
Dame, Indiana, with a Bachelor of Business Administration degree, and from
Boston College with an MBA. Mrs. Lyman is the daughter of Richard H. Stoll, Sr.
R.L. RICHARDS, age 49, has been a member of the Board of Directors
since September of 1997. For over ten (10) years, Mr. Richards has been a
managing director of RDT Limited, a private investment company owned by R. David
Thomas, a principal shareholder of the Company. Mr. Richards is also a member of
KDR Limited. Mr. Richards has been employed by affiliates of Mr. Thomas since
1978. Mr. Richards is a graduate of Wittenberg University with a degree in
economics and political science, and has a law degree from The Ohio State
University. Mr. Richards serves as a director of Acceptance Insurance Companies
(NYSE), and of several non-public companies including Fifth Third Bank of
Columbus, Inc. and Stanley Steemer International, Inc. Previously, Mr. Richards
served as a director for Clinton Gas Systems, Inc. (OTC) and Orange Co. (NYSE).
WILLIAM D. PARKER, age 61, has been a member of the Board of Directors
since September, 1997. Mr. Parker is retired from The Kroger Company. From
September of 1993 through January of 1997, Mr. Parker served as President of the
Kroger Columbus Marketing Area. Prior to being named president of the Columbus
area, Mr. Parker served five years as president of the Kroger Dallas and Memphis
marketing areas. Mr. Parker served in numerous other merchandising and general
operations positions during his forty-year tenure with Kroger, beginning in
1956. Mr. Parker has also served on over thirty public and private boards during
his years as president of the Columbus and Dallas areas, with a strong emphasis
on community service. Additionally, Mr. Parker has served as chairman for
several charitable events in recent years.
OTHER EXECUTIVE OFFICER
THOMAS L. GERLACHER, age 55, has served as Chief Financial Officer of
the Company since December 1993. Since July 1992, Mr. Gerlacher has also served
in other financial executive capacities at the Company's wholly owned
subsidiaries. From December 1991 to July 1992, Mr. Gerlacher was employed as
Chief Financial Officer of Team Logos Corporation. From 1987 through 1992, Mr.
Gerlacher, who is a Certified Public Accountant, was President of CFO Resource
Network Company. From 1976 through 1987, Mr. Gerlacher was employed as Vice
President of Budgeting and Planning of Chemlawn, Inc. Mr. Gerlacher graduated in
1964 with a BS degree in Accounting from the University of Notre Dame and in
1967 with an MBA degree from The Ohio State University.
Remainder of Page Intentionally Left Blank.
4
<PAGE> 8
SECURITY OWNERSHIP OF DIRECTORS, NOMINEES, OFFICERS AND PRINCIPAL SHAREHOLDERS
TABLE FOR FIVE PERCENT (5%) SHAREHOLDERS
- ----------------------------------------
Number of Shares of Percentage of
Name and Address Common Stock Common Stock
of Beneficial Owner Beneficially Owned (1) Outstanding (2)
- ------------------------------------------------------------------------------
Ronald E. Scherer 1,814,501(3)(4)(5) 24.48%
Chairman of the Board
of Directors, President
and Chief Executive Officer
5131 Post Road
Dublin, OH 43017
Linda (Hayner) Scherer Talbott 1,279,451(5) 17.26%
5131 Post Road
Dublin, OH 43017
Roger L. Scherer Trust 1,245,450(5) 16.81%
F/B/O Ronald E. Scherer,
Dated June 14, 1979
5131 Post Road
Dublin, OH 43017
Roger L. Scherer Trust 1,245,450(5) 16.81%
F/B/O Linda Hayner (Scherer)
Talbott, Dated June 14, 1979
5131 Post Road
Dublin, OH 43017
R. David Thomas 520,990(2) 7.03%
One Bay Colony
Ft. Lauderdale, FL 33308
Richard H. Stoll, Sr. 421,750(4)(7)(8) 5.69%
Director
6477 Mill Ridge Road
Maumee, OH 43537
George R. Klein 1,169,502(4) 15.78%
Director
1771 East 30th Street
Cleveland, OH 44114
Total 3,926,743 52.98%
Remainder of Page Intentionally Left Blank.
5
<PAGE> 9
TABLE FOR OFFICERS AND DIRECTORS
Number of Shares of Percentage of
Name and Address Common Stock Common Stock
of Beneficial Owner Beneficially Owned (1) Outstanding (2)
- ------------------------------------------------------------------------------
Ronald E. Scherer 1,814,501(3)(4)(5) 24.48%
Chairman of the Board
of Directors, President
and Chief Executive Officer
5131 Post Road
Dublin, OH 43017
2,264(3) .03%
David B. Thompson
Director, Treasurer
5131 Post Road
Dublin, Ohio 43017
Eugene J. Alfonsi 5,000 .07%
Director
5131 Post Road
Dublin, Ohio 43017
Thaddeus A. Majerek 279,212(4)(6) 3.77%
Director
2232 S. 11th Street
Niles, MI 49120
Robert H. Monnaville, Jr. 39,925 .54%
Director
62 Harper Avenue
Waterbury, CT 06705
Thomas L. Gerlacher 1,900 .03%
Chief Financial Officer
5131 Post Road
Dublin, Ohio 43017
Nancy Stoll Lyman 153,350(4)(7)(8) 2.07%
Director
203 N. Wabash, Suite 1504
Chicago, IL 60601
William D. Parker 0 0
Director
5131 Post Road
Dublin, Ohio 43017
Richard H. Stoll, Sr. 421,750(4)(7)(8) 5.69%
Director
6477 Mill Ridge Road
Maumee, Ohio 43537
6
<PAGE> 10
Number of Shares of Percentage of
Name and Address Common Stock Common Stock
of Beneficial Owner Beneficially Owned (1) Outstanding (2)
- ------------------------------------------------------------------------------
R.L. Richards 188,907(2) 2.55%
Director
5131 Post Road
Dublin, Ohio 43017
George R. Klein 1,169,502(4) 15.78%
Director
1771 E. 30th Street
Cleveland, Ohio 44114
All Directors and Executive
Officers as a Group 4,076,311 55.00%
(6 persons before the Annual
Meeting, 10 persons after the
Annual Meeting)
(1) Unless otherwise specified, the beneficial owners of the shares of
Common Stock have sole voting and investment power over such shares.
(2) The total number of shares of Common Stock of the Company outstanding
on the date hereof is 7,411,314 shares. Except as noted below, none of
the executive officers, directors or holders of 5% or more of the
Company's issued and outstanding Common Stock hold any options or
warrants to acquire Common Stock. R. David Thomas and R.L. Richards own
an interest in KDR, which received warrants to purchase 187,657 shares
of the Common Stock of the Company at $12.00 per share. Accordingly,
these warrants are reflected as beneficially owned by Mr. Thomas and
Mr. Richards.
(3) The table does not include 58,900 shares of Common Stock of the Company
held of record by RAP Diversified, Inc. ("RAP"), the sole shareholder
of which is David B. Thompson, Trustee for a trust of which the
children of Ronald E. Scherer are the beneficiaries. Mr. Scherer and
Mr. Thompson disclaim any beneficial ownership of such shares.
The table includes 144,476 (1.95%) shares of Common Stock of the
Company received by Northern in the Exchange Transactions and 52,488
(0.71%) shares of Common Stock of the Company received by Wholesalers
in the Exchange Transactions. Mr. Scherer has voting power over the
shares of Common Stock of the Company held by these companies by virtue
of his position as Chief Executive Officer of these Companies.
(4) All of such shares of Common Stock of the Company are subject to a
shareholders' voting agreement dated as of October 9, 1996, among
Ronald E. Scherer, certain of the Scherer Affiliates, the Stoll
Shareholders, the Michiana Shareholders and the Klein Shareholder,
pursuant to which they have agreed to act together in the election of
directors of the Company until such time as all principal and interest
on the Debentures have been paid in full. The parties to the agreement
have agreed to vote for the election to the Board of Directors of two
Scherer representatives, two Stoll representatives, one Michiana
representative and two Klein representatives.
7
<PAGE> 11
(5) 49.5% of the stock of OPD is owned by a trust established for the
benefit of Ronald E. Scherer and his family, and 49.5% of the stock of
OPD is owned by a trust established for the benefit of Linda Scherer
Talbott, the sister of Ronald E. Scherer, and her family. The table
reflects that both Ronald E. Scherer and Linda (Hayner) Scherer Talbott
beneficially own these shares because each of them shares voting power
over the shares held in such trust.
(6) Includes 279,212 (3.77%) shares of Common Stock of the Company owned by
a trust over which Thaddeus A. Majerek shares voting power as one of
the co-trustees. Does not include 290,609 (3.92%) shares of Common
Stock of the Company owned by another family trust, over which Mr.
Majerek disclaims any beneficial ownership.
(7) Does not include 1,955,418 (26.38%) shares of Common Stock of the
Company held by other members of the Stoll family, over which Nancy
Stoll Lyman disclaims any beneficial ownership.
(8) Does not include 1,687,018 (22.76%) shares of Common Stock of the
Company held by other members of the Stoll family, over which Richard
H. Stoll, Sr. disclaims any beneficial ownership.
Remainder of Page Intentionally Left Blank.
8
<PAGE> 12
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
- ----------------------
The following table sets forth the compensation of the Company's Chief
Executive Officer and the Company's four most highly compensated executive
officers, other than the Chief Executive Officer, who were serving as executive
officers at the end of the most recently completed fiscal year.
SUMMARY COMPENSATION TABLE
- --------------------------
<TABLE>
<CAPTION>
Long Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ------------------------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Securities
Annual Restricted Under- All Other
Compen- Stock lying LTIP Compen-
Name and Fiscal Salary Bonus sation Award(s) Options/ Payouts sation
Position(s) Year ($) ($) ($) ($) SAR's(#) ($) ($)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald E. Scherer, 1997 $491,000 None $235,000 None None None None
Chairman of the 1996 $50,000 None None None None None None
Board of Directors 1995 None None None None None None None
and Chief Executive
Officer(1)
David B. Thompson, 1997 $224,000 None $75,000 None None None None
Vice Chairman 1996 $37,000 None None None None None None
and Treasurer(1) 1995 None None None None None None None
Robert H. Monnaville, 1997 $164,000 None None None None None
President(2) 1996 $130,000 None None None None None None
1995 $52,000 None None None None None $58,800
Eugene J. Alfonsi, 1997 $180,000 None None None None None None
Senior Vice 1996 $32,500 None None None None None None
President(1) 1995 None None None None None None None
George R. Klein, 1997 None None None None None None $527,000
Division President(3) 1996 None None None None None None None
1995 None None None None None None None
</TABLE>
(1) Mr. Scherer, Mr. Thompson and Mr. Alfonsi, although executive officers
of the Company, were not employees of the Company prior to July of
1996. Mr. Scherer, Mr. Thompson and Mr. Alfonsi were employed by
Scherer Companies, and their services were provided to the Company
pursuant to a management agreement between Scherer Companies and the
Company. The employment contracts for Mr. Scherer, Mr. Thompson and Mr.
Alfonsi became effective in September of 1997 following the Annual
Meeting of Shareholders.
(2) During 1994 and part of 1995, Mr. Monnaville provided services to the
Company as an independent contractor, for which he received consulting
fees. He became an employee of the Company in April of 1995.
(3) In accordance with the terms of the Klein Exchange Agreement, the
Company agreed that, following the acquisition of Klein, it would enter
into employment agreements with certain
9
<PAGE> 13
employees of Klein. In addition, George R. Klein, elected as director
of the Company, is president of Klein Management Company. Effective
September of 1997, the Company entered into a management agreement with
Mr. Klein for a three-year term, pursuant to which Mr. Klein and Klein
Management Company will provide services to the Company. Klein
Management Company is to receive an annual fee of $159,000, plus the
reimbursement of employee benefits. During fiscal 1997, Klein
Management Company received a management fee of $527,000.
EMPLOYMENT AGREEMENTS
- ---------------------
The Company has entered into three year employment agreements with
Ronald E. Scherer, David B. Thompson, and Eugene J. Alfonsi, pursuant to which
they are to receive annual salaries in the following respective amounts:
$491,000, $224,000 and $195,000.
DEFERRED COMPENSATION AGREEMENT
- -------------------------------
As part of the acquisition terms with Stoll, the Company has assumed a
deferred compensation agreement with Richard Stoll, Sr., who has been elected to
the Company's board of directors. Under the agreement, Stoll will to pay Mr.
Stoll the sum of $250,000 per year for a period of five years and $100,000 per
year for a period of seven years thereafter.
COMPENSATION OF DIRECTORS
- -------------------------
The Company has a policy which provides that each outside director of
the Company will receive the sum of $3,000 for each meeting of the Board of
Directors attended by such director and $2,000 for each Committee Meeting
attended by such director; the Company also plans to provide outside directors
stock options in connection with such meetings, but has not issued any stock
options to date. The Company does pay reasonable out-of-pocket expenses incurred
in the attendance of meetings of the Board of Directors for all directors.
CONFLICTS OF INTEREST AND RELATED PARTY TRANSACTIONS
- ----------------------------------------------------
There are various conflicts of interest and related party transactions
in connection with the acquisitions and from other contractual arrangements.
CONSULTING AGREEMENT WITH FORMER DIRECTOR
- -----------------------------------------
On June 27, 1994, the Company and Yankee entered into a consulting agreement
with Charles Pastorino, a former officer of Yankee and former director of the
Company. The consulting agreement is for a term of eight years expiring in 2002.
During the first two years, the consultant was paid $4,000 per month. During
years three through five, the consultant is to be paid $5,000 per month. During
years six through eight, the consultant is to be paid $8,500 per year. The
aggregate amount paid during 1997 was $60,000.
YANKEE AGREEMENTS WITH MDI, LP
- ------------------------------
On May 24, 1993, the Company's wholly owned subsidiary, Yankee,
re-acquired the net operating assets of Yankee from MDI, LP, a limited
partnership in which Yankee and Magazine Distributors, Inc. ("MDI") were
partners. MDI held more than 5% of the outstanding shares of Common Stock of the
Company. As part of this acquisition, the Company, Yankee, OPD and Northern
entered into non-competition agreements with MDI and with Robert B. Cohen, James
S. Cohen, and Michael Cohen, the majority shareholders of MDI, pursuant to which
MDI and the Cohens agreed not to compete for a period of ten years within a
specified Yankee distribution area. During the first five years of the
agreements, MDI and the Cohens were to receive compensation equal to an
aggregate of 2% of Yankee's agency net sales, payable 1% in cash and 1% in
Common Stock of the Company valued at $1.00 per share for this purpose. During
the last five years of the agreements, MDI and the Cohens were to receive
compensation equal to
10
<PAGE> 14
1% of Yankee's agency net sales, payable in cash. The compensation was $767,000
in 1997 and $538,000 in 1996 (one-half paid in cash and one-half paid in
shares).
As part of the sale of the operating assets of Yankee, all of the prior
non-competition and consulting agreements were terminated, effective January 12,
1998.
EMPLOYMENT AGREEMENTS
- ---------------------
In connection with the acquisition transactions, the Company entered
into employment agreements with three officers and directors, Ronald E. Scherer,
David B. Thompson and Eugene J. Alfonsi, for a term of three years each. Each of
these individuals previously had served the Company as an officer and director
without compensation for the four years preceding the employment contracts.
The Stock Exchange Agreement with Scherer Companies required, as a
condition to closing, that the Company enter into employment agreements with
four individuals, one of who is Ronald E. Scherer, Jr., the son of Ronald E.
Scherer. The employment agreement is for a term of three years, and provides for
an annual salary of $60,000.
The Stock Exchange Agreement with Stoll required, as a condition to
closing, that the Company enter into employment agreements with three
individuals, one of whom was Richard Stoll, Jr., who is a significant
shareholder of the Company and who is the son of Richard Stoll, Sr. and the
brother of Nancy Stoll Lyman, both of whom have been elected to the board of
directors. Mr. Stoll's employment agreement is for a term of three years and
provides for an annual salary of $160,000, along with potential bonuses upon the
achievement of certain objectives.
The Stock Exchange Agreement with Michiana required, as a condition to
closing, that the Company enter into employment agreements with three
individuals. In accordance with the terms of the Michiana Exchange Agreement,
the Company agreed that, following the acquisition of Michiana, it would enter
into employment agreements with certain employees of Michiana, one of whom is
Thaddeus A. Majerek, a director of the Company, another of whom is David W.
Majerek, the brother of Thaddeus A. Majerek, and another of whom is Michael
Gilbert, the brother-in-law of Thaddeus A. Majerek. The employment agreements
are for three year terms; Thaddeus A. Majerek is to receive an annual salary of
$160,000, David W. Majerek is to receive an annual salary of $60,000, and
Michael Gilbert is to receive an annual salary of $100,000.
Klein is managed by Klein Management Company, which is an independent
company owned by director George R. Klein, and which was not acquired by the
Company. For the fiscal year ended December 31, 1995, Klein paid $990,000 for
management services. For the 1996 period through August 23, 1996, Klein paid
approximately $650,000 for management services. For the 1997 period through
September of 1997, Klein paid approximately $527,000 for management services. At
the closing, the Company entered into a new management agreement with the Klein
Management Company pursuant to which Klein Management Company will provide the
services of George R. Klein to the Company for a term of three years in exchange
for an annual management fee of $159,000, plus the reimbursement of employee
benefits.
COMMON OWNERSHIP AND MANAGEMENT
- -------------------------------
The acquisitions of the Scherer Affiliates involved transactions
between related parties, because substantially the same management operated the
Scherer Affiliates and the Company, and because Ronald E. Scherer, the principal
shareholder of the Company, was also, either directly or through family trusts,
the principal shareholder of each of the Scherer Affiliates. The Company took a
number of steps to help assure itself that the acquisitions involving the
Scherer Affiliates were on an arm's length basis and no more favorable to the
Scherer Affiliates than were the transactions with independent unrelated
parties: (1) the acquisition agreements were on substantially the same terms as
the acquisition agreements with Stoll, Michiana, and Klein,
11
<PAGE> 15
independent parties; (2) the Company used a standard in establishing the
purchase price which was used in connection with other acquisitions in the
periodical industry of which the Company is aware and which was also used in
connection with the Stoll, Michiana and Klein acquisitions (except that
Wholesaler's and Scherer Companies' price was based upon fair market value); (3)
the acquisition agreements provided for an independent audit of the financial
statements of the acquired companies by the Company's independent auditors and
adjustments of the purchase prices based upon the results of the audits; (4) the
acquisitions involving the Scherer Affiliates were reviewed and approved by an
independent committee appointed by the Board of Directors, consisting of
Thaddeus A. Majerek, a board member not then employed by the Company; and (5)
the Company received a fairness opinion from the Corporate Finance Department of
the First National Bank of Boston that stated, from a financial point of view,
the consideration to be paid by the Company for Michiana, Stoll, Klein, OPD,
Northern, MacGregor and Scherer Companies, was fair to the shareholders of the
Company. Additionally, Mr. Scherer abstained from all voting of the Board of
Directors with respect to the acquisitions of the Scherer Affiliates.
BENEFICIAL OWNERSHIP OF MICHIANA STOCK
- --------------------------------------
Thaddeus A. Majerek, a director of the Company, is an officer, director
and a beneficiary of a trust, which owned stock of Michiana. Accordingly, he was
not disinterested with respect to the Michiana acquisition. Although Mr. Majerek
engaged in negotiations with the Company with respect to its acquisition of
Michiana, he did not participate in the deliberations of the Board of Directors
of the Company with respect to the acquisition and abstained in all voting by
the Board of Directors of the Company related thereto. Mr. Majerek was appointed
to act as the member of an independent committee of the Board of Directors of
the Company to consider the exchange agreements with the Scherer Affiliates. He
was selected to serve in this capacity because, at the time, he was an outside
director not employed by the Company or any of its subsidiaries.
ESCROW CLOSING
- --------------
On February 9, 1998, when the closing escrow terminated, the Company
completed the acquisition of the stock of Michiana. See Item 1. In such
acquisition, Thaddeus A. Majerek, a director of the Company, received 54,133
shares of Common Stock, $332,500 principal amount of 8% Senior Debentures of the
Company due 2002, and $221,754 principal amount of 10% Subordinated Debentures
of the Company due 2004 in exchange for his shares of common stock of Michiana
exchanged in such transaction.
On February 9, 1998, when the closing escrow terminated, the Company
completed the acquisition of the stock of Stoll. In such acquisition, Nancy
Stoll Lyman, a director of the Company, received 153,350 shares of Common Stock,
$1,226,696 principal amount of 8% Senior Debentures of the Company due 2002, and
$662,135 principal amount of 10% Subordinated Debentures of the Company due 2004
in exchange for her shares of stock of Stoll exchanged in such transaction.
Additionally in such acquisition, Richard H. Stoll, Sr., a director and more
than 5% shareholder of the Company, received 421,750 shares of Common Stock,
$3,360,000 principal amount of 8% Senior Debentures of the Company due 2002, and
$1,821,053 principal amount of 10% Subordinated Debentures of the Company due
2004 in exchange for his shares of common stock of Stoll exchanged in such
transaction.
On February 9, 1998, when the closing escrow terminated, the Company
completed the merger of OPD into the Company, the acquisition of certain assets
of Northern, the acquisition of the stock of Scherer Companies and the
acquisition of certain assets of Wholesalers. See Item 1. In such transactions,
Ronald E. Scherer, Chairman of the Board and Chief Executive Officer of the
Company and more than 5% shareholder of the Company, received 23,451 shares of
Common Stock, $30,994 principal amount of 8% Senior Debentures of the Company
due 2002, and $277,886 principal amount of 10% Subordinated Debentures of the
Company due 2004 in exchange for his shares of common stock of Scherer
Companies. Mr. Scherer also indirectly controls, through his ownership interest
in Northern and Wholesalers, 196,964 shares of
12
<PAGE> 16
Common Stock, $1,730,183 principal amount of 8% Senior Debentures of the Company
due 2002, and $779,085 principal amount of 10% Subordinated Debentures of the
Company due 2004, which Northern and Wholesalers received, in the aggregate, in
exchange for assets. Additionally, two Scherer family trusts beneficially owned
by Ronald E. Scherer and Linda (Hayner) Scherer Talbott, who are also
beneficiaries, received 1,048,486 shares of Common Stock, $7,330,758 principal
amount of 8% Senior Debentures of the Company due 2002, and $75,272 principal
amount of 10% Subordinated Debentures of the Company due 2004 in the merger of
OPD into the Company.
On February 9, 1998, when the closing escrow terminated, the Company
completed the acquisition of the stock of the Klein Companies. See Item 1. In
such acquisitions, George R. Klein, a director and more than 5% shareholder of
the Company received 1,169,502 shares of Common Stock, $10,180,001 principal
amount of 8% Senior Debentures of the Company due 2002, and $5,498,282 principal
amount of the 10% Subordinated Debentures of the Company due 2004 in exchange
for his shares of common stock of the Klein Companies exchanged in such
transaction.
LEASE OF NORTHERN OFFICE AND WAREHOUSE FACILITIES
- -------------------------------------------------
Upon completion of the acquisition from Northern of the assets related
to its wholesale periodical distribution business, the Company entered into a
real estate lease with Northern, pursuant to which the Company leased for a
three-year term the approximately 17,000 square foot warehouse and distribution
facility located in Petoskey, Michigan. The lease is a triple net lease, with
the Company paying the cost of all taxes, insurance, utilities and other
expenses, and the annual rental amount is $3.00 per square foot. Because the
stock of Northern is owned by a trust of which Ronald E. Scherer is a primary
beneficiary, he could benefit from the lease arrangement. Management believes
that the terms of this lease are no less favorable to it than it could obtain
from an independent party in an arms-length transaction.
LEASE OF CORPORATE OFFICE FACILITIES
- ------------------------------------
Scherer Companies leased approximately 17,400 square feet of office
space for its principal executive offices at 5131 Post Road, Dublin, Ohio, from
NRS Equities, Inc., an entity controlled by Ronald E. Scherer. The lease is for
a term of 10 years, commencing November 1, 1995. The current rental rate is
$14.50 per square foot. Pursuant to its management agreement with the Company,
Scherer Companies subleased office and conference facilities in this building to
the Company. The Company has assumed this lease.
AMOUNT OWED BY OPD TO PRINCIPAL SHAREHOLDER
- -------------------------------------------
OPD owed $5,000,000, plus accrued interest, to KDR Limited, an Ohio
limited liability company ("KDR"), whose owners include R. David Thomas, a
principal shareholder of the Company, and R.L. Richards, a director. This debt
was evidenced by a promissory note dated July 31, 1992, from OPD to RDT Corp.,
and subsequently assigned to KDR, in the principal amount of $5,000,000 with
interest at the rate of 11.75% per annum (the "Note"). The Note was due on
demand. The Note was secured by a pledge from OPD of 5,000,000 shares of Common
Stock of the Company owned by OPD.
KDR exchanged the Note for a new note from UNIMAG. The new note became
a $4,500,000 Subordinated Debenture. In consideration for KDR's agreement to the
new note, the Company paid KDR accrued interest, made a $500,000 partial payment
of the principal of the note, and issued to KDR warrants to purchase an
additional 187,657 shares of Common Stock of the Company at $12.00 per share.
Additionally, the Company nominated R.L. Richards for election to the
Company's board of directors. Mr. Thomas purchased from the Company an
additional $500,000 of Common Stock of the Company at a purchase price of $15.00
per share.
13
<PAGE> 17
DEFERRED COMPENSATION AGREEMENT
- -------------------------------
Stoll had entered into a deferred compensation agreement with Richard
Stoll, Sr., who was elected to the Company's Board of Directors. Under the
agreement, Stoll will pay Mr. Stoll the sum of $250,000 per year for a period of
five years and $100,000 per year for a period of seven years thereafter. The
Company has assumed this agreement.
STOLL LEASE AGREEMENTS
- ----------------------
Stoll leased a 78,000 square foot facility located in Indianapolis,
Indiana from Richard Stoll, Sr., a director of the Company, for a monthly rental
of $25,000. This lease was on a month-to-month tenancy. As part of the Stoll
Exchange Agreement, the Company agreed to lease this facility from Richard
Stoll, Sr. for a period of 36 months for a monthly rental of $12,000.
A trust, which has been established for the benefit of the Stoll
family, owns several parcels of real property which are leased to Stoll. The
terms of the only significant lease are as follows: The Jackson, Michigan
facility contains 84,000 square feet and is leased for $300,000 per year. The
lease has approximately five years remaining.
TRANSACTIONS WITH HALL OF CARDS AND BOOKS, INC.
- -----------------------------------------------
Some of the principal shareholders of Michiana, including Thaddeus A.
Majerek, a director of the Company, were also shareholders of Hall of Cards and
Books, Inc. ("HOCAB"), which operates approximately 27 retail stores, including
Hallmark stores, paperback stores and newsstands. HOCAB is a principal customer
of Michiana for books and magazines. In connection with the closing of the
Michiana transaction, The Company and HOCAB entered into a five year exclusive
supply agreement pursuant to which The Company is to be the exclusive supplier
of magazines, books and other related periodical items to HOCAB, at special
prices negotiated in the agreement. These discounts are below the prices charged
other retailers, and HOCAB is expected to benefit by an aggregate of
approximately $165,000 per year from the extra discount received by it. HOCAB is
also indebted to the Company in the amount of $2,012,618 at September 27, 1997.
The note bears interest at a rate of 9%. The principal is to be repaid as UNIMAG
makes principal payment on the debentures owed to the Majerek family members.
Due to the current bank loan agreement terms, it is not anticipated that
principal payments on the debentures will begin until the year 2000. The note is
secured by a pledge of all of the stock of HOCAB and by a pledge of 2,392,926
shares of the Common Stock of the Company to be received in the Michiana
Transaction. In addition, Michiana was guaranteeing payment of all indebtedness
of a line of credit to HOCAB by 1st Source Bank. 1st Source Bank agreed to
terminate this guaranty upon the consummation of the Company's acquisition of
Michiana and the repayment of loan amounts totaling approximately $882,000 at
September 27, 1997 to 1st Source Bank. This repayment occurred in February of
1998.
LOANS FROM MAJEREKS
- -------------------
Thaddeus A. Majerek, who is a director of the Company, and his parents,
Thaddeus S. Majerek and A. Marie Majerek, had loaned various amounts to
Michiana. These loans were assumed by the Company as part of the Michiana
transaction. The loans have been transferred to HOCAB as an offset to other debt
balances.
LEASE OF MICHIANA WAREHOUSE FACILITY
- ------------------------------------
Michiana entered into a lease agreement with a trust established for A.
Marie Majerek, the spouse of Thaddeus S. Majerek, to lease a warehouse building
containing approximately 46,800 square feet of space located in Niles, Michigan.
The lease is for a term of three years,
14
<PAGE> 18
and the rent is $12,000 per month. The Company has assumed this lease as part of
the Michiana transaction.
PURCHASE OF MICHIANA REAL PROPERTY
- ----------------------------------
Michiana leased a 14,200 square foot distribution facility in Fort
Wayne, Indiana from a trust established for A. Marie Majerek. The Company
entered into a real estate purchase contract with the trust to purchase this
property at a price to be established by an independent appraisal firm
acceptable to both the seller and the Company.
GUARANTY OF KLEIN DEBT
- ----------------------
The George R. Klein News Company had guaranteed $147,000 of certain
debt incurred by Northwest News Company ("Northwest") in connection with
Northwest's acquisition of several wholesale periodical distributors. George R.
Klein, who was elected a director of the Company, is a 50% owner of Northwest
and benefits from the transaction; however, Mr. Klein will reimburse the Company
if the guarantee results in a claim against the Company.
LEASES OF FACILITIES
- --------------------
There are a number of facilities that are leased by Klein from George
R. Klein, a director and principal shareholder of the Company, or persons or
entities affiliated with him. The George R. Klein News Co. leases a 98,000
square foot warehouse and distribution facility located on 30th Street in
Cleveland, Ohio. Central News Company leased a 38,000 square foot warehouse and
distribution facility in Akron, Ohio. Newspaper Sales, Inc. leases a 10,000
square foot facility located on Paynes Avenue in Cleveland, Ohio.
All leases expired on December 31, 1996. The Company entered into a new
three year lease with Newspaper Sales, Inc., and a month-to-month lease with a
six month termination clause with The George R. Klein News Co. The new lease
rates are at a market value, which the Company considers reasonable.
Remainder of Page Intentionally Left Blank.
15
<PAGE> 19
SHAREHOLDER PROPOSALS
- ---------------------
In order for shareholder proposals to be considered at the 1999 Annual
Meeting of the Shareholders such proposals must be received by the Company by
January 27, 1999.
OTHER BUSINESS
- --------------
The board of directors does not intend to present, and has no knowledge
that others will present, any other business at the Meeting. If, however, any
other matters are properly brought before the Meeting, it is intended that the
persons named in the enclosed proxy will vote the shares represented thereby in
accordance with their best judgment.
FORM 10-K AVAILABLE
- -------------------
Copies of the Company's Annual Report on Form 10-K for the fiscal year
ended September 27, 1997, as filed with the Securities and Exchange Commission
will be sent to any shareholder of the Company without charge upon written
request to the Company mailed or delivered to 5131 Post Road, Dublin, Ohio
43017, Attention: Ruth Hunter Smith, Secretary.
COST OF SOLICITATION OF PROXIES
- -------------------------------
The cost of this solicitation will be paid by the Company. In addition
to the solicitation of proxies by mail, the Company may solicit proxies
personally or by telephone.
By Order of the Board of Directors,
/s/ Ruth Hunter Smith
Ruth Hunter Smith
Secretary
Dublin, Ohio
May 26, 1998
16
<PAGE> 20
PROXY -- UNITED MAGAZINE COMPANY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY FOR ANNUAL
MEETING JUNE 11, 1998.
THIS PROXY, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
DESIGNATED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR"
PROPOSAL 1.
I do [ ] do not [ ] plan to attend the Annual Meeting of Shareholders on
June 11, 1998.
PROPOSAL 1. ELECTION OF DIRECTORS.
[ ] FOR Election of All Nominees Listed Below (except as marked to contrary
below)
Eugene J. Alfonsi George R. Klein Nancy Stoll Lyman Thaddeus A. Majerek
Robert H. Monnaville, Jr. William D. Parker R.L. Richards
Ronald E. Scherer Richard H. Stoll, Sr. David B. Thompson
- --------------------------------------------------------------------------------
(Instruction: To withhold authority to vote for any individual nominees(s),
write the name of the nominee(s) on the line provided above)
[ ] WITHHOLD Authority to Vote for All Nominees Listed Above
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
PLEASE SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY IN THE ENCLOSED ENVELOPE.
(Continued on Other Side)
(Continued from Other Side)
The undersigned hereby appoints Daniel S. Kaiser, John E. Lewis and Pamela S.
Bobson as Proxies, each with the power to appoint his or her substitute, and
hereby authorizes each of them to represent and to vote as designated, all
Common Shares of United Magazine Company held of record by the undersigned on
May 1, 1998 at the Annual Meeting of Shareholders to be held on June 11, 1998 or
any adjournment thereof.
Dated:___________________________, 1998
---------------------------------------
(Signature)
---------------------------------------
(Signature)
Please sign exactly as name appears
above. Joint owners should sign exactly
as name appears above. Joint owners
should each sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give full
title. If a partnership or corporation,
please sign in entity's name by
authorized person.
