SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Salem Corporation
________________________________________________________________
(Name of Issuer)
Common Stock, $0.50 par value
________________________________________________________________
(Title of Class of Securities)
79409910
________________________________________________________________
(CUSIP Number)
Richard H. Rowe
1233 - 20th Street, N.W., Washington, D.C. 20036 (202) 416-6820
________________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 26, 1995
________________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1
(b)(3) or (4), check the following box.
Check the following box if a fee is being paid with the
statement. (A fee is not required only if the reporting person:
(1) has a previous statement on file reporting beneficial
ownership of more than five percent of the class of securities
described in item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosure provided in a
prior cover page. The information required on the remainder of
this cover page shall not be deemed to be "filed" for the purpose
of Section 18 of the Securities Exchange Act but shall be subject
to all other provisions of the Act (however, see the Notes).
Page 1 of 15 Pages
CUSIP No. 79409910 13D Page 2 of 15 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
George H. Heyman, Jr., as Voting Trustee
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
(b)
3 SEC USE ONLY
4 SOURCE OF FUND*
NA
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7 SOLE VOTING POWER
917,633
8 SHARED VOTING POWER
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON: 917,633
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 49.2%
14 TYPE OF REPORTING PERSON*
IN
This Amendment amends Items 4 and 5
Item 1. Security and Issuer
Common Stock, $0.50 par value
("Common Stock")
Salem Corporation
(the "Company")
Box 2222
Pittsburgh, PA 15230
Item 2. Identity and Background
(a) George H. Heyman, Jr., as Voting Trustee
(b) 625 Madison Avenue
New York, New York 10022
(c) Advisory Director
Lehman Brothers
625 Madison Avenue
New York, New York 10022
(d)(e) Mr. Heyman has not been the subject
of any of the types of legal
proceedings specified in Items 2(d)
and (e).
Item 3. Source and Amount of Funds or Other Consideration
See Response to Item 4.
Item 4. Purpose of Transaction
Under the Final Judgment of the court
(the "Court"), dated December 29, 1993 (the
"Final Judgment"), as to Defendants Victor
Posner and Steven Posner in Securities and
Exchange Commission v. Drexel Burnham
Lambert, Inc., et al., 88 Civ. 6209 (MP)
(S.D.N.Y.), Mr. Heyman was appointed as
trustee ("Trustee") under a voting trust
(the "Trust") for all voting securities
owned, directly or indirectly, by Victor
Posner and Steven Posner in any company they
control (as that term is defined in 17 C.F.R.
S 240.12b-2), either individually or jointly
with others, that has a class of equity
securities registered pursuant to Section 12
of the Securities Exchange Act of 1934 (a
"Reporting Company"). The Declaration of
Trust (the "Declaration") for that voting
trust was incorporated by reference in and
its term were made a part of, the Trust Order
(the "Trust Order") issued in that civil
action on March 2, 1994. On March 28, 1994
stock certificates for 690,462 shares of
Common Stock were delivered to the custodian
for the Trustee (the "Custodian") on behalf
of Victor Posner. Prior to April 6, 1994,
the Custodian was advised by a representative
of Mr. Posner that certificates for 224,266
additional shares of Common Stock were to be
delivered to the Custodian on behalf of
Mr. Posner and the Custodian was advised
further that replacements for lost
certificates for 2900 additional shares of
Common Stock would be delivered to the
Custodian on behalf of Mr. Posner. As of
June 24, 1994, Voting Trust Certificates had
been issued for 914,733 shares of Common
Stock deposited in the Voting Trust.
Subsequently, the replacement certificates
for the 2900 shares of common stock were
received by the Custodian. (The foregoing
shares of Common Stock are referred to herein
as the "Shares"). Based on information
reported in the Company's Proxy Statement for
its 1995 Annual Meeting of Shareholder, the
Trustee believes that the Shares represent
49.2% of the outstanding 1,864,882 shares of
Common Stock as of March 31, 1995.
The Trustee was advised that the record date
for determining the holders of Common Stock
entitled to vote at the annual meeting of the
Company scheduled to be held on April 26,
1994, had been set for March 29, 1994, and
that none of the Shares were registered in
the name of Custodian as of that record date.
Accordingly, by letter dated April 4, 1994,
the Trustee requested that Mr. Posner furnish
the Custodian with proxies for the Shares.
On April 11, 1994, counsel to the Company
advised that only the Trustee would be
permitted to vote the Shares. By letter
dated April 15, 1994, the Trustee instructed
the Salem Corporation inspectors of election
to vote the Shares as required under the
Trust Order.
The Trustee caused the Shares to be voted in
accordance with the proportionate voting
provisions of the Declaration, described
below, at the Annual Meeting of the
shareholders of Salem held on May 2, 1995.
Under paragraph 5 of the Declaration, except
as otherwise provided therein, in respect of
any proposal other than the election of
directors submitted by a Reporting Company
whose securities are subject to the Trust to
the holders of such securities or submitted
by a third party for their vote, written
consent in lieu of a meeting of shareholders
("Consent") or authorization, the Trustee
shall instruct the Custodian to vote the
securities or give or withhold Consents or
authorization in proportion to the votes,
Consents or authorizations of the other
holders of such securities who cast votes for
or against the proposal or give or withhold
Consents or authorizations for such proposal.
For example, if 51% of the votes cast by the
other holders of Common Stock are for the
proposal and 49% are against, the Custodian
shall be instructed to vote 51% of the Shares
for the proposal and 49% of the Shares
against the proposal. However, the Trustee,
in his sole discretion, upon consideration of
the purposes of the Final Judgment, as
reflected in the Opinion and Findings (in
part) in 88 Civ. 6209 (MP), dated December 1,
1993, and the Supplemental Findings of Fact
and Conclusions of Law in that case, of the
same date, and the Trust Order (collectively,
the "Orders"), on 10 days advance written
notice ("Notice") to the Court, the
Securities Exchange Commission and the
holders of voting trust certificates, unless
otherwise ordered by the Court, may, but is
in no manner obligated to, depart from the
proportionate voting provisions of paragraph
5 in any manner he deems necessary to act in
accordance with those purposes.
By letter dated June 26, 1995 the Trustee
advised the Court and counsel to the
Securities and Exchange Commission and to
Victor Posner that, based upon the Trustee's
consideration of both the letter and spirit
of the Orders, should a proposal for a cash
merger be submitted to the shareholders of
Salem for their approval, the Trustee, as
permitted by the Trust Order, with
appropriate notice to the Court and the
parties, in the circumstances described in
the letter, probably would depart from the
proportionate voting provisions of the
Declaration. The Trustee also suggested a
meeting withthe Court and the parties to
discuss the foregoing. A copy of the letter
is attached to the Schedule as an Exhibit
(b).
Election of directors. Subject to the above,
in the election of directors where cumulative
voting is not provided for, the Trustee shall
instruct the Custodian to vote or furnish
Consents with respect to, the securities in
the same proportion for each nominee as the
other holders of the securities present in
person or by proxy at the meeting and
entitled to vote on the election of directors
vote or give Consents for the election of
directors.
Cumulative Voting. Where cumulative voting
is permitted in the election of the
directors, the Trustee, subject to the above,
shall instruct the Custodian, to the greatest
extent possible, to vote the securities or
provide Consents in proportion to the votes
cast or Consents provided for those nominees
equal in number to the number of vacancies on
the board of directors to be filled by the
election who would have been elected had the
Custodian not voted the securities.
In the election of directors, holders of
Common Stock have cumulative voting rights.
The provisions of paragraph 5 apply
regardless of whether any matter submitted to
holders of securities is contested and,
subject to further order of the Court,
regardless of whether persons other than
holders of voting trust certificates are
identified to the Trustee as purportedly
sharing beneficial ownership or having an
economic interest in any securities held in
the Trust. Securities shall be voted by the
Custodian in a manner that assures securities
are present at the meeting for quorum
purposes and that proportionate voting of
such securities is effective and the
Custodian shall provide any Consents or
authorizations with respect to such
securities in a manner and form that assures
the proportionality of such Consent or
authorization in accordance with the
provision of paragraph 5.
Subject to the above, the Trustee or the
Custodian, as the case may be, may vote
securities or execute written Consents or
authorizations with respect to such
securities by any means authorized by
applicable law or the governing instruments
of the issuer of the securities, including
voting in person by its designated agent or
by proxy to any other person or persons or to
his or their substitute or substitutes,
provided that no such person or substitute
may be an affiliate or associate of a holder
of voting trust certificates, the issuer of
the securities or any person submitting a
proposal for the vote, Consent or
authorization of the holders of such
securities, and provided further that any
such person may only vote or provide a
Consent or authorization in accordance with
specific instructions given by Trustee.
The Trustee's actions with respect to the
Shares are governed by the Declaration and,
except as indicated herein, the Trustee has
no plans or proposals that would result in
any of the events enumerated in paragraphs
(a) through (j) of Item 4.
Under the Declaration, Victor Posner remains
entitled to dividends and distributions on
the Shares, provided that any dividends or
distributions of voting securities of the
Company would be subject to the Trust and
would be voted by the Trustee in accordance
with the provisions of paragraph 5 of the
Declaration.
Under paragraph 7 of the Declaration, Victor
Posner may transfer the voting trust
certificates representing the Shares and he
may dispose of, pledge or transfer the Shares
in accordance with the terms of paragraph 8
of the Declaration. The terms of paragraph 8
prohibit sales, transfers or pledges of
Shares to affiliates (as those terms are
defined in 17 C.F.R. S 240.12b-2) or
associates (as that term is defined in 17
C.F.R. S 240.12b-2) of Victor Posner or to
any person that has an agreement,
arrangement, or understanding with Victor
Posner with respect to acquiring, holding,
voting or disposing of such Shares. Shares
disposed of or transfered in accordance with
paragraph 8 will no longer be subject to the
Trust.
The Trust will terminate as to the Shares
upon the Company no longer being a Reporting
Company or, as to Victor Posner and the
Shares, upon his death.
Item 5. Interest in Securities of the Issuer
See response to Item 4.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of
the Issuer
See response to Item 4.
Item 7. Material to Be Filed as Exhibits
(a) Declaration of Voting Trust, pursuant to
Trust Order dated March 2, 1994, entered
by the United States District Court,
Southern District of New York in
Securities Exchange Commission v. Drexel
Burnham Lambert Inc., et al., 88 Civ.
6209 (MP)
(b) Letter of Trustee regarding
Proportionate Voting Provisions of
Paragraph 5 of the Declaration of Trust
Signature
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this Statement, as amended, is true, complete and correct.
Date: June 26, 1995
Signature: [George H. Heyman, Jr.]
Name/Title: George H. Heyman, Jr.,
as Voting Trustee<PAGE>
UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK
___________________________________
)
SECURITIES AND EXCHANGE COMMISSION )
)
Plaintiff, )
)
v. ) 88 Civ. 6209 (MP)
) LETTER OF TRUSTEE
DREXEL BURNHAM LAMBERT INC., et al.) REGARDING VOTING
) PROVISIONS OF PARAGRAPH 5
Defendants. ) OF THE DECLARATION OF
TRUST
___________________________________)
To the Clerk of Court:
Please docket and file the attached letter and its
enclosure.
Dated:
_________________________________
Richard H. Rowe
Counsel to the Voting Trustee
PROSKAUER ROSE GOETZ & MENDELSOHN
Suite 800
1233 Twentieth Street, N.W.
Washington, D.C. 20036-2396
(202) 416-6820
cc: Barry R. Goldsmith, Esq.
Chief Litigation Counsel
SECURITIES AND EXCHANGE
COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
Jay P. Lefkowitz, Esq.
KIRKLAND & ELLIS
655 Fifteenth Street, N.W.
Washington, D.C. 20005
(202) 879-5914
Attorney for Defendant
Victor Posner
June 26, 1995
BY HAND DELIVERY
The Honorable Milton Pollack
Senior United States District Judge
United States District Court
for the Southern District
of New York
Room 2102
United States Court House
Foley Square
New York, New York 10007-2398
Re: SEC v. Posner
88 Civ. 6209 (MP)
Dear Judge Pollack:
As you are aware, the first proviso to paragraph 5 of
the Declaration Trust under the Trust Order dated March 2, 1994,
permits me, as Voting Trustee, in my sole discretion, upon
consideration of the purposes of the Final Judgment, as reflected
in the Opinion and Findings (in part), dated December 1, 1993,
the Supplemental Findings of Fact and Conclusions of Law of the
same date and the Trust Order, (collectively, the "Orders") to
depart from the proportionate voting provisions of paragraph 5 on
10 days (the "Notice Period") advance written notice to the
Court, the Securities and Exchange Commission ("SEC") and the
holders of voting trust certificates for the Trust Securities at
issue, unless otherwise ordered by the Court.
This letter is to advise you and the parties that, if
an agreement and plan of merger is submitted to the shareholders
of Salem Corporation ("Salem") for their approval, I, in all
likelihood, will submit such a notice. Of course, I cannot make
a final determination of my position until I and my counsel have
had an opportunity to review and consider a specific proposed
transaction and the position of the holder of the Voting Trust
Certificates as to a proposed merger.
There are 917,628 shares (the "Trust Shares") of the
Common Stock, $0.50 ("Common Stock") of Salem held in the Voting
Trust. Victor Posner holds the Voting Trust Certificates for the
Trust Shares.
I understand that the applicable Pennsylvania law
requires the affirmative vote of a majority of the votes cast by
shareholders entitled to vote to approve a merger. Based on
Salem's Proxy Statement soliciting proxies for its 1995 annual
meeting, the Trust Shares represent 49.2% of the outstanding
Common Stock.
Under paragraph VIII of the Final Judgment, Victor
Posner retains rights to sell, pledge or transfer his shares of
Salem Common Stock, but not the right to vote those shares, which
are subject to the Voting Trust. See also, SEC v. Drexel Burnham
Lambert, Inc., 837 F. Supp. 587, 616 (S.D.N.Y. 1993). Those
rights are provided for in the Declaration of Trust under the
Trust Order. See Declaration of Trust, paragraphs 6 (dividends
and stock splits), 7 (Transfer of Voting Trust Certificates) and
8 (Disposition of Trust Securities).
Thus, under the Orders, Mr. Posner is entitled to the
economic benefits of ownership of the Shares. The Court has
stated that "[b]ecause the Posners own controlling interests in
the public companies of which they are officers and directors, an
order barring them from serving in those capacities will not
necessarily prevent them from using such companies as vehicles
for future violations. Placing the shares they own in such
companies in a voting trust will divest them of control, and
thereby give added assurance of compliance, without depriving
them of the economic value of their shares." 837 F. Supp. at
615.
Counsel for Salem, counsel for the ad hoc committee of
the Board of Directors of Salem (the "Independent Committee"),
appointed to establish a fair process with respect to the
evaluation of any offer to acquire the Company received from
third parties, and counsel for the SEC all have expressed a
strong desire to be advised as to my position on voting the Trust
Shares should a merger proposal be submitted to the shareholders
of Salem for their approval. Obviously, my position also would
be of interest to persons desiring to submit merger proposals to
Salem and could affect the manner in which they do so and perhaps
the terms of any proposal.
Counsel to the Independent Committee have provided my
counsel with a form of an agreement and plan of merger containing
general terms (the "Form Agreement") that has been furnished to
prospective purchasers and that, presumably, the Independent
Committee would be prepared to recommend to the Salem Board of
Directors. The Form Agreement does not relate to any specific
proposal.
While, as I have indicated, I am not in a position to
make a final determination and I have neither the authority nor
the desire to become involved in negotiating the terms of any
transaction, I am prepared to give an indication of how I
probably would vote the Trust Shares on a merger proposal,
subject to being otherwise directed by the Court.
In the Form Agreement furnished to me, the merger is
structured as a "cash" merger preceded by a tender offer. The
economic impact on Mr. Posner and the other Salem shareholders of
such a cash merger would be difficult to distinguish from that of
a straight cash tender offer, conditioned on a tender of over 51%
of the outstanding shares. In such circumstances, Mr. Posner
could instruct me, as Voting Trustee, to tender the Trust Shares,
as that would be a permissible "sale", and assure the success of
the tender offer as a practical matter, regardless of the
positions of the majority of the other shareholders.
Conversely, Mr. Posner could determine to instruct me
not to tender his shares. In that case, I would have no
authority to tender them. As a practical matter, this would
defeat the tender offer.
I do not believe, that the Court intended that the
proportionate voting provisions of the Trust Order should operate
to deprive Mr. Posner of the economic benefit of being able to
make such determinations, merely due to a difference in the legal
form of the transaction.
Accordingly, assuming that Mr. Posner does not have any
interest in the acquiring person, or any other interest in the
merger, other than as a shareholder, of which I am made aware, I
probably would ascertain Mr. Posner's position as to the merger
and vote the Trust Shares in accordance with this position,
unless instructed otherwise by the Court.
Should Mr. Posner be in favor of the merger, voting the
Shares in favor of the merger probably would assure its success
and, as a practical matter, will also further the purpose of the
Orders by eliminating Mr. Posner's interest in and any possible
influence over, Salem as a public company.
While a vote of the Shares against the merger would
result in depriving the shareholders of Salem other than Mr.
Posner of an opportunity to receive the Merger consideration, the
purpose of the Voting Trust under the Orders is to provide added
assurance of compliance by Mr. Posner with the Orders and not to
deprive him of the economic value of his shares. Were it not for
the Trust Order, Mr. Posner, as a shareholder, with no other
interest in the transaction, generally could vote his shares as
he sees his economic interest as a large shareholder, regardless
of the wishes of the other shareholders of Salem.
In indicating my probable course in exercising my
discretion under paragraph 5 of the Declaration of Trust, I have
considered only the purposes of the Orders, the standard imposed
under that paragraph, the other provisions of the Declaration of
Trust and the advice of my counsel with respect thereto. I do
not intend to make any determination as to whether the terms of
any merger are fair, in any sense, to Mr. Posner or any other
Salem shareholder, nor, I am advised, am I required to make any
such determination. That is a determination for them to make.
I am providing copies of this letter to counsel for the
Securities and Exchange Commission and Mr. Posner. As I
understand from my counsel, counsel for the Securities and
Exchange Commission has a different view of the provisions of the
Trust Order than the views expressed in this letter, I believe it
may be appropriate for me and my Counsel to meet with you and
counsel to the parties to discuss this matter. I am available
this week at your convenience. There is some urgency in
resolving this matter, as I understand Salem has requested
proposals be submitted to it by interested parties by noon on
June 30, 1995.
I have on the date hereof filed via EDGAR with the
Securities Exchange Commission and mailed to Salem Corporation
and the American Stock Exchange an amendment to my Statement on
Schedule 13D with respect to the Shares to disclose the substance
of this letter. A hard copy of that amendment is enclosed for
your information.
Respectfully submitted,
George H. Heyman, Jr.
Voting Trustee under the
Trust Order, dated
March 2, 1994
Enclosure: (Amendment No. 1 to Schedule 13D filed with the
Securities and Exchange Commission)
