<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO THE ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
Commission File Number: 0-26580
AMERICAN COIN MERCHANDISING, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1093721
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
5660 CENTRAL AVENUE, BOULDER, COLORADO 80301 (Address
of principal executive offices)
(Zip Code)
(303) 444-2559
(Registrant's telephone number)
Securities registered under Section 12(b) of the Exchange Act:
ASCENDING RATE CUMULATIVE TRUST PREFERRED SECURITIES, LIQUIDATION
AMOUNT $10 PER SECURITY
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K/A or any amendment to
this Form 10-K/A. [ ]
The aggregate market value of the registrant's voting common stock held as
of March 31, 1999 by non-affiliates of the registrant was $17,537,000.
As of March 31, 1999, issuer had 6,475,069 shares of its $0.01 par value
common stock outstanding.
<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION/
NAME AGE POSITION HELD WITH THE COMPANY
---- --- -------------------------------
<S> <C> <C>
John A. Sullivan (1) (2)................44 Director of Research and Investments, Relational Investors, LLC,
Chairman of the Board of Directors
Jerome M. Lapin.........................69 President and Chief Executive Officer
Randall J. Fagundo......................39 Senior Vice President and Chief Operating Officer, Secretary and
Director
W. John Cash............................52 Senior Vice President, Chief Financial Officer and Treasurer
Abbe M. Stutsman (1)....................46 Senior Vice President of Purchasing and Product Development and
Director
Richard D. Jones(2).....................57 President, T.R. Baron & Associates, Inc.
J. Gregory Theisen......................53 Vice President of Lorac, Inc.
Jim D. Baldwin (1)......................66 Investor
</TABLE>
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(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
John A. Sullivan has served as Chairman of the Board since April 1999 and
a director since October 1995. Mr. Sullivan has been Director of Research and
Investments since December 1998 and employed by Relational Investors, LLC, an
investment management firm, since March 1998. Mr. Sullivan was employed by
Batchelder & Partners, Inc., an investment advisory and consulting firm, from
May 1996 to February 1998. Mr. Sullivan also served as a Senior Vice President
of The Seidler Companies Incorporated ("Seidler"), the underwriter of the
Company's initial public offering, from August 1993 to April 1996. Prior to
being elected Senior Vice President at Seidler, Mr. Sullivan served as a Vice
President from October 1990 to August 1993. Mr. Sullivan also serves as a
director of the Farr Company.
Jerome M. Lapin has served as President, Chief Executive Officer and a
director since January 1994. Mr. Lapin served as chairman of the Board from July
1995 to January 1999. Prior to joining the Company, he was the Managing Director
for World Hosts Pty. Ltd., a restaurant leasing consulting business, from July
1991 to January 1994. From June 1989 to June 1990, Mr. Lapin was the President
of Sanwa Foods, Inc., a soup manufacturer and marketer ("Sanwa"), and from June
1990 to June 1991 he was a consultant for Sanwa. Mr. Lapin was a co-founder of
the International House of Pancakes, Inc. in 1958.
Randall J. Fagundo, a co-founder of the Company, has served as Senior
Vice President and Chief Operating Officer since January 1999 and Secretary
since May 1991 and as a director since August 1988. Mr. Fagundo served as Vice
President of Operations from May 1991 to January 1999. Prior to joining the
Company, he was one of the founders of Southwest Coin Company.
W. John Cash has served as Senior Vice President since January 1999 and
Chief Financial Officer since July 1995. Prior to joining the Company he was
Vice President and Chief Financial Officer of Kasler Holding Company, a
diversified construction company, from May 1991 to March 1995. From July 1984 to
April 1991, Mr. Cash served as a partner of KPMG Peat Marwick LLP.
Abbe M. Stutsman, a co-founder of the Company, has served as a Senior
Vice President since January 1999 and as a director since December 1989. Ms.
Stutsman served as a Vice President from January 1994 and as the Company's
Secretary from August 1988 until May 1991, Treasurer from January 1994 until
July 1995 and President from May 1991 until January 1994. Prior to joining the
Company, she was the Business Manager of Colorado Coin from April 1988 to August
1988.
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Richard D. Jones, a co-founder of the Company, has served as a director
since August 1988 and served as Chairman of the Board from August 1988 to July
1995 and as President of the Company from August 1988 to April 1991. Mr. Jones
has served as President of T.R. Baron & Associates, Inc., a marketing and
consulting business, since May 1975. Mr. Jones was a co-founder of Colorado Coin
in 1987.
J. Gregory Theisen, a co-founder of the Company, has served as a director
since August 1988. Mr. Theisen has served as a Vice President of Lorac, Inc., an
investment consulting company, since December 1989. Mr. Theisen served as Vice
President of the Company from August 1988 to December 1993. Prior to joining the
Company, Mr. Theisen was a co-founder of Colorado Coin and served as its
Operations Manager from January 1987 to October 1988.
Jim D. Baldwin has served as a director since October 1995. Mr. Baldwin
served as President and Chief Executive Officer of King Soopers, a
supermarket/combination store retailer, from 1979 until his retirement in
February 1990. Mr. Baldwin served as a consultant with Knight, Roth and
Associates, a consulting firm, from February 1990 to July 1994. Mr. Baldwin also
serves as a director of Grease Monkey Holding Corp.
COMPLIANCE WITH THE REPORTING REQUIREMENTS OF SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the SEC initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Officers, directors and
greater than ten percent stockholders are required by SEC regulation to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1998, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with, except for J.
Gregory Theisen who failed to file a timely Form 4 related to the purchase of
20,000 shares of common stock.
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ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Each non-employee director of the Company, other than Messrs. Jones and
Theisen, receives $2,500 for each regular or special meeting of the Board of
Directors or committee meeting that is held on a date other than the date of a
board meeting. All Directors also receive reimbursement for their reasonable
out-of-pocket expenses related to such attendance. In the fiscal year ended
December 31, 1998, the total compensation paid to non-employee directors was
$15,000.
Each non-employee director of the Company, other than Messrs. Jones and
Theisen, are eligible to receive stock option grants under the 1995 Non-Employee
Director Stock Option Plan (the "Directors' Plan"). Only non-employee directors
of the Company or an affiliate of such directors (as defined in the Code) are
eligible to receive options under the Directors' Plan. Options granted under the
Directors' Plan are intended by the Company not to qualify as incentive stock
options under the Code.
During 1998, the Company did not grant options to non-employee directors
of the Company. As of March 31, 1999, no options had been exercised under the
Directors' Plan.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following table shows for the fiscal years ended December 31, 1998,
1997 and 1996, compensation awarded or paid to, or earned by, the Company's
Chief Executive Officer and its three other most highly compensated executive
officers for the year ended December 31, 1998 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL AWARDS
COMPENSATION --------------
------------------------------ SECURITIES
SALARY BONUS UNDERLYING ALL OTHER
NAME OF PRINCIPAL POSITION YEAR ($) (1) ($) (2) OPTIONS COMPENSATION(3)
-------------------------- ---- ------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C>
Jerome M. Lapin............................1998 $ 196,250 26,211 -- $ 12,395
President and Chief Executive 1997 178,750 -- -- 10,351
Officer 1996 155,833 -- -- 6,757
Randall J. Fagundo.........................1998 134,002 16,664 -- 14,411
Senior Vice President, Chief 1997 125,547 -- -- 10,779
Operating Officer and Secretary 1996 111,837 -- -- 9,550
W. John Cash...............................1998 134,002 16,664 -- 12,791
Senior Vice President, Chief Financial 1997 125,547 -- 100,000 10,025
Officer and Treasurer 1996 112,320 -- -- 9,128
Abbe M. Stutsman...........................1998 134,002 16,664 -- 12,584
Senior Vice President of Purchasing 1997 125,837 -- -- 10,385
and Product Development 1996 111,837 -- -- 9,824
</TABLE>
- --------------------
(1) Includes amounts deferred pursuant to Section 401(k) and 125 of the
Internal Revenue Code of 1986, as amended.
(2) Represents bonuses earned in 1997 but not determinable until 1998.
(3) Includes value of Company provided automobile, health insurance premiums
paid by the Company and funds contributed by the Company as matching
contributions to the Named Executive Officers' 401(k) Plan account.
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STOCK OPTION GRANTS IN LAST FISCAL YEAR
During the fiscal year ended December 31, 1998 there were no options
granted to the Named Executive Officers.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
The following table shows for the fiscal year ended December 31, 1998
certain information regarding options exercised and held at year-end by the
Named Executive Officers:
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS AT
SHARES AT 12/31/98 12/31/98
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($)(1) UNEXERCISABLE(#) UNEXERCISABLE($)(2)
-------------- -------------- ---------------- -------------------
<S> <C> <C> <C> <C>
Jerome M. Lapin................................. -- -- -- /-- -- /--
W. John Cash.................................... -- -- 35,000/85,000 $ 20,625/6,875
Randall J. Fagundo.............................. -- -- -- /-- -- /--
Abbe M. Stutsman................................ -- -- -- /-- -- /--
</TABLE>
- ------------------------
(1) Based on the fair market value of the Common Stock as of the date of
exercise, minus the exercise price, multiplied by the number of shares
acquired.
(2) Based on the fair market value of the Common Stock as of December 31, 1998
of $5.875 per share, minus the exercise price of "in-the-money" unexercised
options, multiplied by the number of shares represented by such options.
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with Jerome M. Lapin, W.
John Cash and Abbe Stutsman (each an "Executive") as of June 1, 1996 (the
"Employment Agreements"). Mr. Lapin's Employment Agreement was terminated and
replaced with a management transition agreement as further described below. See
"-- Management Transition Agreement." The Employment Agreement with Mr. Lapin,
as updated by the Compensation Committee, provided that he would receive an
annual salary of $185,000 as of April 1, 1997, increasing to $200,000 on April
1, 1998 and to $215,000 on April 1, 1999. The Employment Agreements with Mr.
Cash and Ms. Stutsman, as updated by the Compensation Committee, provided that
they would each receive an annual salary of $129,470. Additionally, each
Executive was eligible to receive a bonus or salary increase as determined by
the Compensation Committee. Mr. Lapin also was entitled to a minimum bonus of
$60,000 and $45,000 during the years beginning April 1, 1998 and April 1, 1999,
respectively. The Employment Agreements also provided that each Executive would
be entitled to (i) participate in any employee benefits plans the Company makes
available to its other employees, (ii) four weeks vacation, and (iii) use of an
automobile provided by the Company. The Employment Agreements with Mr. Cash and
Ms. Stutsman expired on December 31, 1998. Each Employment Agreement also
provided that the Company could terminate the Executive's employment at any time
for cause and with 60 days' written notice without cause. If the Executive was
terminated without cause, the Company would have been obligated to pay the
Executive's salary for 12 months after the termination date. The Employment
Agreements provided that after a change of control of the Company, if the
Executive was terminated without cause, required to move outside the Boulder,
Colorado area or experiences a material reduction in his or her responsibilities
then the Executive would have been entitled to receive the salary set forth in
the respective Employment Agreement for the remaining term of the Agreement. The
Employment Agreements also contained confidentiality and noncompete provisions
which prohibited the Executives from soliciting employees of the Company,
engaging in business similar to the Company's or disclosing confidential
information for a period of three years after the termination of the Executive's
employment with the Company.
5
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MANAGEMENT TRANSITION AGREEMENT, VOTING AGREEMENT AND STOCK RESTRICTION
AGREEMENT
The Company entered into a management transition agreement with Jerome M.
Lapin (the "Management Transition Agreement"), which took effect upon Mr.
Lapin's resignation as Chairman of the Board of Directors of the Company in
January 1999. Under the Management Transition Agreement, Mr. Lapin has agreed to
continue to serve as Chief Executive Officer and Director through the Company's
1999 annual meeting of stockholders to be held on June 25, 1999 (the "Separation
Date") and as a Director of the Company through the Company's 2000 annual
meeting of stockholders. The Management Transition Agreement provides that Mr.
Lapin continue to receive the salary set forth in his Employment Agreement of
$200,000 per year until March 31, 1999, and of $215,000 per year beginning April
1, 1999 until the Separation Date. Mr. Lapin also is entitled to receive his
guaranteed bonus of $60,000 per year through March 31, 1999, but he will not be
entitled to any guaranteed bonus after such date. Additionally, Mr. Lapin will
not be entitled to any additional compensation for serving as a Director of the
Company through December 31, 2000. After December 31, 2000, Mr. Lapin will be
entitled to receive the same compensation paid to continuing outside Directors
as set forth above in "Compensation of Directors." The Management Transition
Agreement also provides that through the Separation Date, Mr. Lapin will be paid
for all accrued and unused vacation earned, the Company will continue to pay for
Mr. Lapin's health insurance coverage provided through the Company's group
health insurance plan, and Mr. Lapin will continue to participate in the
Company's 401(k) plan.
The Management Transition Agreement also provides for Mr. Lapin to serve
as a consultant to the Company through December 31, 2000 (the "Consulting
Period") for which he will be paid a salary equal to $215,000 per year from the
Separation Date through the remainder of the Consulting Period. During the
Consulting Period and through the end of the lease term, the Company has agreed
to continue to make all lease and insurance payments on Mr. Lapin's automobile
and to purchase such automobile and transfer title to Mr. Lapin as additional
compensation at the end of the lease term. During the Consulting Period, Mr.
Lapin has agreed to render services to the Company equal to approximately 40
hours per month.
The Management Transition Agreement may be terminated by the Company for
cause at any time at which time the Company's obligations under the agreement
will cease and Mr. Lapin will not be entitled to any further compensation or
benefits. The Management Transition Agreement contains confidentiality and
noncompete provisions which prohibit Mr. Lapin from directly or indirectly (i)
soliciting or accepting any business in the amusement vending machine business
or industry, (ii) requesting any customer of the Company to not continue
business with the Company, (iii) disclosing the names of any customers of the
Company, (iv) establishing or providing any assistance to any enterprise
competitive with any business that is conducted at any time prior to or during
the Consulting Period by the Company in the Industry and the Territory, or (v)
soliciting any employee, consultant, or independent contractor of the Company
for a period of three years after the end of the Consulting Period.
The Company also has entered into a Voting Agreement with Mr. Lapin
whereby Mr. Lapin has agreed that at any annual or special meeting of the
stockholders of the Company, the shares of Common Stock held by Mr. Lapin will
be voted by Randall J. Fagundo, Chief Operating Officer of the Company, as
Trustee, as directed by a majority of the Directors of the Company (other than
Mr. Lapin). Additionally, the Company entered into a Stock Restriction Agreement
with Mr. Lapin whereby Mr. Lapin has agreed that, until the termination date of
the Management Transition Agreement, he will not sell or otherwise transfer any
shares of common stock of the Company held by him without the prior consent of
the Company.
6
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of March 31, 1999 by: (i)
each person (or group of affiliated persons) who is known by the Company to own
beneficially more than 5% of the Common Stock, (ii) each of the Company's
directors, (iii) each of the officers named in the executive compensation table,
and (iv) all directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT
BENEFICIALLY BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED (1) OWNED (1)
---------------- ---------------
<S> <C> <C>
Merrill Lynch Asset Management Group (2)............................................ 930,600 14.37%
800 Scudders Mill Road
Plainsboro, NJ 08536
SAFECO Asset Management Company (3)................................................. 556,300 8.59
601 Union Street
Seattle, WA 98101
Richard D. and Melinda K. Jones (4)................................................. 523,623 8.09
5660 Central Avenue
Boulder, CO 80301
J. Gregory Theisen (5).............................................................. 493,623 7.62
5660 Central Avenue
Boulder, CO 80301
Jerome M. Lapin (6)................................................................. 465,932 7.20
5660 Central Avenue
Boulder, CO 80301
Frontier Capital Management Co. Inc. (7)............................................ 400,170 6.18
99 Summer Street
Boston, MA 02110
Abbe M. Stutsman (8)................................................................ 311,354 4.81
Randall J. Fagundo.................................................................. 304,091 4.70
W. John Cash (9).................................................................... 55,000 *
Jim D. Baldwin (10)................................................................. 22,800 *
John A. Sullivan (11)............................................................... 28,000 *
All directors and executive officers as a group (8 persons) (4)-(6) and (8)-(11).... 2,204,423 33.56%
</TABLE>
- ----------------------
* Less than one percent.
(1) Percentage of beneficial ownership is based on 6,475,069 shares of Common
Stock outstanding as of March 31, 1999. Beneficial ownership is
determined in accordance with the rules of Securities and Exchange
Commission and generally includes voting or investment power with respect
to securities. Shares of Common Stock subject to options or warrants
currently exercisable or exercisable within 60 days of March 31, 1999,
are deemed outstanding for computing the percentage of the person or
entity holding such securities, but not outstanding for computing the
percentage of any other person or entity. Except as indicated by
footnote, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment power
with respect to all shares of Common Stock shown as beneficially owned by
them.
(2) Merrill Lynch & Co., Inc. ("ML&Co."), Hotchkiss and Wiley SmallCap Fund,
Inc. and Merrill Lynch Asset Management Group ("AMG") have together filed
a Schedule 13G pursuant to which they report sole or shared voting and
dispositive power over 930,600 shares owned. ML&Co. is a parent holding
company. AMG is an
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operating division of ML&Co. consisting of ML&Co.'s indirectly owned
asset management subsidiaries, including Merrill Lynch Asset Management,
L.P., doing business as Merrill Lynch Asset Management ("MLAM") which is
comprised of the Merrill Lynch Capital Management Group and the divisions
of Hotchkiss and Wiley. MLAM is an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940, which acts as
investment adviser to various investment companies registered under
Section 8 of the Investment Company Act of 1940. The investment advisers
that comprise AMG exercise voting and investment power over portfolio
securities independently from other direct and indirect subsidiaries of
ML&Co. and may therefore be deemed the beneficial owner of such
securities.
(3) SAFECO Asset Management Company is a subsidiary of SAFECO Corporation and
holds 556,300 shares on behalf of its clients, including SAFECO Common
Stock Trust, which holds 391,000 shares. SAFECO Asset Management Company
disclaims beneficial ownership of all shares held by SAFECO Common Stock
Trust.
(4) Includes (i) 15,000 shares held by the Jones Family Charitable Trust
Number 1, (ii) 294,080 shares held by Mrs. Jones Revocable Living Trust,
(iii) 168,079 shares held by Richard D. Jones Revocable Living Trust, and
(iv) 46,464 shares held by T.R. Baron and Associates, Inc. Defined
Benefit Pension Plan, of which Mr. Jones is the Trustee.
(5) Includes 12,464 shares held by Colorado Coin Company Defined Benefit
Keogh Plan of which Mr. Theisen is the Trustee.
(6) Includes 460,932 shares of Common Stock held jointly with Mr. Lapin's
spouse.
(7) Frontier Capital Management Co. Inc. is a registered investment adviser
under the Investment Advisors Act of 1940 and may be deemed to be the
beneficial owner of the securities by virtue of its acting as investment
advisor to one or more institutions and individuals.
(8) Includes 50,519 shares of Common Stock held jointly with Ms. Stutsman's
spouse.
(9) Consists of options to purchase Common Stock exercisable within 60 days
of March 31, 1999 by Mr. Cash.
(10) Includes 540 shares of Common Stock held jointly with Mr. Baldwin's
spouse and options to purchase 10,500 shares of Common Stock granted
under the Directors' Plan which are exercisable within 60 days of March
31, 1999.
(11) Includes options to purchase 10,500 shares of Common Stock granted under
the Directors' Plan which are exercisable within 60 days of March 31,
1999 and a warrant held by Mr. Sullivan exercisable to purchase 17,500
shares of Common Stock.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN TRANSACTIONS
INTEREST EXPENSE AND PRINCIPAL PAYMENTS RELATED TO NOTES PAYABLE TO CONTROL
GROUP
On August 31, 1995, the Company acquired substantially all of the
inventory, property and equipment and assumed certain facilities leases and
contracts of Performance Merchandising, Inc., Inland Merchandising, Inc.,
Chicago Toy Company, Georgia Toy Company, Lehigh Valley Toy Company, and
Southwest Coin Company (the "Entities") for an aggregate purchase price of
$3,351,417. The Entities were owned in varying percentages by J. Gregory
Theisen, Abbe M. Stutsman, Richard D. Jones and Randall J. Fagundo and their
respective spouses (the "Founders").
The purchase price for the Entities was paid with cash in the amount of
$2,002,795 and three year promissory notes with an aggregate principal amount of
$1,348,622 with an interest rate on the principal amount of 8% per annum (the
"Notes"). During the fiscal year ended December 31, 1998, the Company made the
following interest and principal payments on the Notes held by the Founders:
<TABLE>
<CAPTION>
PRINCIPAL INTEREST
<S> <C> <C>
Richard D. Jones.................................................................... $ 119,314 $ 7,159
J. Gregory Theisen.................................................................. 101,058 6,063
Randall J. Fagundo.................................................................. 141,931 8,516
Abbe M. Stutsman.................................................................... 312,007 18,720
</TABLE>
OTHER
On May 1, 1998, the Company acquired the operating assets of American Coin
Company of Minneapolis, for approximately $334,000. James Kevin Theisen, brother
of J Gregory Theisen, owned 100% of American Coin Company of Minneapolis.
The Company purchases certain kiddie rides from Theisen Vending, Inc.,
which is wholly owned by Thomas N. Theisen, the brother of J. Gregory Theisen,
one of the Company's Directors. The Company purchased approximately $549,000 of
kiddie rides from Theisen Vending, Inc. in the fiscal year ended December 31,
1998.
Management believes the terms of the foregoing transactions were fair to
the Company. All future transactions with affiliates will be subject to the
approval of the Company's disinterested directors and will be on terms believed
by such directors to be no less favorable to the Company than those available
from unaffiliated third parties.
PART 1V
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) EXHIBITS
2.8+ -- Asset Purchase Agreement among the Registrant, certain
persons and Chicago Toy Company, Inc., dated August 31,
1995.
2.9+ -- Asset Purchase Agreement among the Registrant, certain
persons and Georgia Toy Company, dated August 31, 1995.
2.10+ -- Asset Purchase Agreement among the Registrant, certain
persons and Inland Merchandising, Inc., dated August 31,
1995.
2.11+ -- Asset Purchase Agreement among the Registrant, certain
persons and Lehigh Valley Toy Company, dated August 31,
1995.
2.12+ -- Asset Purchase Agreement among the Registrant, certain
persons and Performance Merchandising, Inc., dated August
31, 1995.
2.13+ -- Asset Purchase Agreement among the Registrant, certain
persons and Sugarloaf Ltd. and Sugarloaf Marketing, Inc.,
dated August 31, 1995.
3.1+ -- Certificate of Incorporation of the Registrant.
3.2+ -- Bylaws of the Registrant.
4.1+ -- Reference is made to Exhibits 3.1 and 3.2.
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4.2+ -- Specimen Stock Certificate.
4.3+++ -- Certificate of Trust of American Coin Merchandising Trust
I.
4.4+++ -- Trust Agreement of American Coin Merchandising Trust I.
4.5+++ -- Amended and Restated Trust Agreement of American Coin
Merchandising Trust I.
4.6+++ -- Form of Junior Subordinated Indenture between the
Registrant and Wilmington Trust Company, as Trustee.
4.7+++ -- Form of Guarantee Agreement with respect to Trust Preferred
Securities of American Coin Merchandising Trust I.
4.8+++ -- Form of Agreement as to Expenses and Liabilities between
the Registrant and American Coin Merchandising Trust I.
4.9+++ -- Form of Certificate Evidencing Trust Preferred Securities.
4.10+++ -- Form of Certificate Evidencing Trust Common Securities.
4.11+++ -- Form of Ascending Rate Junior Subordinated Deferrable
Interest Debenture.
10.1+ -- Form of Indemnity Agreement to be entered into between the
Registrant and its directors and executive officers.
10.2+X -- Amended and Restated Stock Option Plan of the Registrant
(the "Option Plan").
10.3+ -- Form of Incentive Stock Option under the Option Plan.
10.4+ -- Form of Nonstatutory Stock Option under the Option Plan.
10.5+X -- 1995 Non-Employee Director Stock Option Plan (the "Director
Plan").
10.6+ -- Form of Nonstatutory Stock Option under the Director Plan.
10.9+ -- Registrant's Uniform Franchise Offering Circular, dated
August 31, 1995, including forms of the Franchise
Agreement, the National Account Program Agreement, Pre-
Pack Program Agreement and the Bulk Purchasing Agreement.
10.11+ -- Amended and Restated Promissory Notes between the
Registrant and each of the parties set forth within, dated
as of August 31, 1995.
10.13+ -- Form of Representative's Warrant.
10.15+ -- Form of Noncompetition Agreement between the Registrant
and each of the parties listed on the attached schedule,
dated as of August 31, 1995.
10.16+ -- Form of Promissory Note between the Registrant and each of
the parties listed on the attached schedule, dated as of
August 31, 1995.
10.17+ -- Form of Promissory Note between the Registrant and each of
the parties listed on the attached schedule, dated as of
August 31, 1995.
10.18+ -- Form of Promissory Note between the Registrant and each of
the parties listed on the attached schedule, dated as of
August 31, 1995.
10.26++X -- Employment Agreement dated as of June 1, 1996, between the
Registrant and Jerome M. Lapin.
10.29++* -- Other Income Vendor Agreement, dated as of July 31, 1996,
between the Registrant and Wal-Mart Stores, Inc.
10.33++ -- Commercial Lease Agreement, between the Registrant and
Technical Building Company, dated as of January 28, 1997.
10.35# -- Commercial Lease Amendment Agreement, between the
Registrant and Technical Building Company, dated as of
November 20, 1997.
10.36+++ -- Reducing Revolving Loan Agreement between the Registrant
and Wells Fargo Bank, N.A., dated as of June 10, 1998.
10.37+++ -- Amendment No. 1 to the Reducing Revolving Loan Agreement
between the Registrant and Wells Fargo Bank, N.A., dated
June 30, 1998.
10.38## -- Asset Purchase and Sale Agreement, effective May 29, 1998,
between Registrant and Suncoast Toys, Inc.
10.39## -- Asset Purchase and Sale Agreement, effective May 29, 1998,
between Registrant and Oregon Coin Company.
10.40## -- Asset Purchase and Sale Agreement, effective May 29, 1998,
between Registrant and NW Toys Co.
10.41o -- Amendment No. 2 to the Reducing Revolving Loan Agreement
between the Registrant and Wells Fargo Bank, N.A., dated
September 23, 1998.
10
<PAGE> 11
10.42 -- Amendment No. 3 to the Reducing Revolving Loan Agreement
between the Registrant and Wells Fargo Bank, N.A., dated
February 26, 1999.
10.43 -- Management Transition Agreement between the Registrant and
Jerome M. Lapin, dated April 7, 1999
10.44 -- Voting Agreement between the Registrant and Jerome M.
Lapin, dated April 7, 1999
10.45 -- Stock Restriction Agreement between the Registrant and
Jerome M. Lapin, dated April 7, 1999
11.1xx -- Computation of Per Share Earnings.
23.1xx -- Consent of KPMG LLP.
27xx -- Financial Data Schedule.
+ Incorporated by reference to the Company's Registration Statement on Form
SB-2, File No. 33-95446-D.
++ Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1996.
* An order seeking confidential treatment for certain a portion of the
exhibit has been granted.
+++ Incorporated by reference to the Company's Registration Statement on
Form-3, File No. 333-60267.
# Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.
## Incorporated by reference to the Company's Current Report on Form 8-K,
dated June 2, 1998.
o Incorporated by reference to the Company's Current Report on Form 8-K,
dated October 2, 1998.
X Indicates management contract or compensatory plan, contract or
arrangement.
xx Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized.
AMERICAN COIN MERCHANDISING, INC.
By /s/ JEROME M. LAPIN
---------------------------------
Jerome M. Lapin
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JOHN A. SULLIVAN* Chairman of the Board April 29, 1999
--------------------------------------------
John A. Sullivan
/s/ JEROME M. LAPIN President, Chief Executive Officer April 29, 1999
-------------------------------------------- (Principal Executive Officer)
Jerome M. Lapin
/s/ W. JOHN CASH* Senior Vice President, Chief Financial April 29, 1999
-------------------------------------------- Officer and Treasurer (Principal
W. John Cash Financial and Accounting Officer)
/s/ RANDALL J. FAGUNDO* Senior Vice President, Chief Operating April 29, 1999
-------------------------------------------- Officer, Secretary and Director
Randall J. Fagundo
/s/ ABBE M. STUTSMAN* Senior Vice President of Product April 29, 1999
-------------------------------------------- Development and Director
Abbe M. Stutsman
/s/ J. GREGORY THEISEN* Director April 29, 1999
--------------------------------------------
J. Gregory Theisen
/s/ RICHARD D. JONES* Director April 29, 1999
--------------------------------------------
Richard D. Jones
/s/ JIM D. BALDWIN* Director April 29, 1999
--------------------------------------------
Jim D. Baldwin
* /s/ JEROME M. LAPIN April 29, 1999
-----------------------------------------
Jerome M. Lapin
Attorney-in-Fact
</TABLE>
<PAGE> 13
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.8+ -- Asset Purchase Agreement among the Registrant, certain
persons and Chicago Toy Company, Inc., dated August 31,
1995.
2.9+ -- Asset Purchase Agreement among the Registrant, certain
persons and Georgia Toy Company, dated August 31, 1995.
2.10+ -- Asset Purchase Agreement among the Registrant, certain
persons and Inland Merchandising, Inc., dated August 31,
1995.
2.11+ -- Asset Purchase Agreement among the Registrant, certain
persons and Lehigh Valley Toy Company, dated August 31,
1995.
2.12+ -- Asset Purchase Agreement among the Registrant, certain
persons and Performance Merchandising, Inc., dated August
31, 1995.
2.13+ -- Asset Purchase Agreement among the Registrant, certain
persons and Sugarloaf Ltd. and Sugarloaf Marketing, Inc.,
dated August 31, 1995.
3.1+ -- Certificate of Incorporation of the Registrant.
3.2+ -- Bylaws of the Registrant.
4.1+ -- Reference is made to Exhibits 3.1 and 3.2.
4.2+ -- Specimen Stock Certificate.
4.3+++ -- Certificate of Trust of American Coin Merchandising Trust
I.
4.4+++ -- Trust Agreement of American Coin Merchandising Trust I.
4.5+++ -- Amended and Restated Trust Agreement of American Coin
Merchandising Trust I.
4.6+++ -- Form of Junior Subordinated Indenture between the
Registrant and Wilmington Trust Company, as Trustee.
4.7+++ -- Form of Guarantee Agreement with respect to Trust Preferred
Securities of American Coin Merchandising Trust I.
4.8+++ -- Form of Agreement as to Expenses and Liabilities between
the Registrant and American Coin Merchandising Trust I.
4.9+++ -- Form of Certificate Evidencing Trust Preferred Securities.
4.10+++ -- Form of Certificate Evidencing Trust Common Securities.
4.11+++ -- Form of Ascending Rate Junior Subordinated Deferrable
Interest Debenture.
10.1+ -- Form of Indemnity Agreement to be entered into between the
Registrant and its directors and executive officers.
10.2+X -- Amended and Restated Stock Option Plan of the Registrant
(the "Option Plan").
10.3+ -- Form of Incentive Stock Option under the Option Plan.
<PAGE> 14
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10.4+ -- Form of Nonstatutory Stock Option under the Option Plan.
10.5+X -- 1995 Non-Employee Director Stock Option Plan (the "Director
Plan").
10.6+ -- Form of Nonstatutory Stock Option under the Director Plan.
10.9+ -- Registrant's Uniform Franchise Offering Circular, dated
August 31, 1995, including forms of the Franchise
Agreement, the National Account Program Agreement, Pre-
Pack Program Agreement and the Bulk Purchasing Agreement.
10.11+ -- Amended and Restated Promissory Notes between the
Registrant and each of the parties set forth within, dated
as of August 31, 1995.
10.13+ -- Form of Representative's Warrant.
10.15+ -- Form of Noncompetition Agreement between the Registrant
and each of the parties listed on the attached schedule,
dated as of August 31, 1995.
10.16+ -- Form of Promissory Note between the Registrant and each of
the parties listed on the attached schedule, dated as of
August 31, 1995.
10.17+ -- Form of Promissory Note between the Registrant and each of
the parties listed on the attached schedule, dated as of
August 31, 1995.
10.18+ -- Form of Promissory Note between the Registrant and each of
the parties listed on the attached schedule, dated as of
August 31, 1995.
10.26++X -- Employment Agreement dated as of June 1, 1996, between the
Registrant and Jerome M. Lapin.
10.29++* -- Other Income Vendor Agreement, dated as of July 31, 1996,
between the Registrant and Wal-Mart Stores, Inc.
10.33++ -- Commercial Lease Agreement, between the Registrant and
Technical Building Company, dated as of January 28, 1997.
10.35# -- Commercial Lease Amendment Agreement, between the
Registrant and Technical Building Company, dated as of
November 20, 1997.
10.36+++ -- Reducing Revolving Loan Agreement between the Registrant
and Wells Fargo Bank, N.A., dated as of June 10, 1998.
10.37+++ -- Amendment No. 1 to the Reducing Revolving Loan Agreement
between the Registrant and Wells Fargo Bank, N.A., dated
June 30, 1998.
10.38## -- Asset Purchase and Sale Agreement, effective May 29, 1998,
between Registrant and Suncoast Toys, Inc.
10.39## -- Asset Purchase and Sale Agreement, effective May 29, 1998,
between Registrant and Oregon Coin Company.
10.40## -- Asset Purchase and Sale Agreement, effective May 29, 1998,
between Registrant and NW Toys Co.
10.41o -- Amendment No. 2 to the Reducing Revolving Loan Agreement
between the Registrant and Wells Fargo Bank, N.A., dated
September 23, 1998.
<PAGE> 15
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10.42 -- Amendment No. 3 to the Reducing Revolving Loan Agreement
between the Registrant and Wells Fargo Bank, N.A., dated
February 26, 1999.
10.43 -- Management Transition Agreement between the Registrant and
Jerome M. Lapin, dated April 7, 1999
10.44 -- Voting Agreement between the Registrant and Jerome M.
Lapin, dated April 7, 1999
10.45 -- Stock Restriction Agreement between the Registrant and
Jerome M. Lapin, dated April 7, 1999
11.1xx -- Computation of Per Share Earnings.
23.1xx -- Consent of KPMG LLP.
27xx -- Financial Data Schedule.
+ Incorporated by reference to the Company's Registration Statement on Form
SB-2, File No. 33-95446-D.
++ Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1996.
* An order seeking confidential treatment for certain a portion of the
exhibit has been granted.
+++ Incorporated by reference to the Company's Registration Statement on
Form-3, File No. 333-60267.
# Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.
## Incorporated by reference to the Company's Current Report on Form 8-K,
dated June 2, 1998.
o Incorporated by reference to the Company's Current Report on Form 8-K,
dated October 2, 1998.
X Indicates management contract or compensatory plan, contract or
arrangement.
xx Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1998
<PAGE> 1
EXHIBIT 10.42
AMENDMENT NO. 3 TO REDUCING REVOLVING LOAN AGREEMENT
This Amendment No. 3 to Reducing Revolving Loan Agreement (this
"Amendment") is entered into with reference to the Reducing Revolving Loan
Agreement dated as of June 10, 1998 (as heretofore amended, the "Loan
Agreement") among American Coin Merchandising, Inc. ("Borrower"), the Lenders
party thereto, and Wells Fargo Bank, National Association, as Administrative
Agent. Capitalized terms used but not defined herein are used with the meanings
set forth for those terms in the Loan Agreement.
Borrower and the Administrative Agent, acting with the consent of
the Requisite Lenders pursuant to Section 11.2 of the Loan Agreement, agree as
follows:
1. Section 1.1. Section 1.1 of the Loan Agreement is amended by
adding the following new definitions at the appropriate alphabetical places:
"Swing Line" means the revolving line of credit
established by the Swing Line Lender in favor of Borrower
pursuant to Section 2.11.
"Swing Line Documents" means the promissory note and any
other documents executed by Borrower in favor of the Swing
Line Lender in connection with the Swing Line.
"Swing Line Lender" means Wells Fargo Bank, National
Association.
"Swing Line Loans" means loans made by the Swing Line
Lender to Borrower pursuant to Section 2.11.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal Indebtedness of
Borrower on all Swing Line Loans then outstanding.
2. Section 2.1(a). Section 2.1(a) of the Loan Agreement is amended
by striking the first sentence thereof and substituting in its place the
following:
Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the
Closing Date through the Maturity Date, each Lender
shall, pro rata according to that Lender's Pro Rata Share
of the then applicable Commitment, make Advances to
-1-
<PAGE> 2
Borrower under the Commitment in such amounts as Borrower
may request that do not result in the sum of (i) the
aggregate principal amount outstanding under the Notes
plus (ii) the Aggregate Effective Amount of all
outstanding Letters of Credit plus (iii) the Swing Line
Outstandings to exceed the Commitment.
3. Section 2.4(a). Section 2.4(a) of the Loan Agreement is amended
by striking the second sentence thereof and substituting in its place the
following:
Subject to the terms and conditions hereof, at any time
and from time to time from the Closing Date through the
Maturity Date, the Issuing Lender shall issue such Letters
of Credit under the Commitment as Borrower may request by
a Request for Letter of Credit; provided that (i) giving
effect to all such Letters of Credit, the sum of (A) the
aggregate principal amount outstanding under the Notes
plus (B) the Aggregate Effective Amount of all outstanding
Letters of Credit plus (C) the Swing Line Outstandings,
does not exceed the then applicable Commitment and (ii)
the Aggregate Effective Amount under all outstanding
Letters of Credit does not exceed $2,000,000.
4. Section 2.11. Section 2.11 of the Loan Agreement is amended to
add a new Section 2.11 as follows:
2.11 Swing Line. (a) The Swing Line Lender shall from time to time
from the Closing Date through the day prior to the Maturity Date make Swing Line
Loans to Borrower in such amounts as Borrower may request, provided that (a)
giving effect thereto, the sum of (i) the aggregate principal amount outstanding
under the Notes plus (ii) the Aggregate Effective Amount of all outstanding
Letters of Credit plus (iii) the Swing Line Outstandings does not exceed the
Commitment, (b) after giving effect to such Swing Line Loan, the Swing Line
Outstandings do not exceed $3,000,000, (c) without the consent of all of the
Lenders, no Swing Line Loan may be made during the continuation of an Event of
Default and (d) the Swing Line Lender has not given at least twenty-four (24)
hours prior notice to Borrower that availability under the Swing Line is
suspended or terminated. Borrower may borrow, repay and reborrow under this
Section. Unless notified to the contrary by the Swing Line Lender, borrowings
under the Swing Line may be made in amounts which are integral multiples of
$100,000 upon telephonic request by a Responsible Official of Borrower made to
the Administrative Agent not later than 1:00 p.m., California time, on the
Banking Day of the requested borrowing (which
-2-
<PAGE> 3
telephonic request shall be promptly confirmed in writing by telecopier).
Promptly after receipt of such a request for borrowing, the Administrative Agent
shall provide telephonic verification to the Swing Line Lender that, after
giving effect to such request, availability for Loans will exist under Section
2.1 (and such verification shall be promptly confirmed in writing by
telecopier). Unless notified to the contrary by the Swing Line Lender, each
repayment of a Swing Line Loan shall be in an amount which is an integral
multiple of $100,000. Borrower shall notify the Swing Line Lender of its
intention to make a repayment of a Swing Line Loan not later than 1:00 p.m.
California time on the date of repayment. If Borrower instructs the Swing Line
Lender to debit its demand deposit account at the Swing Line Lender in the
amount of any payment with respect to a Swing Line Loan, or the Swing Line
Lender otherwise receives repayment, after 3:00 p.m., California time, on a
Banking Day, such payment shall be deemed received on the next Banking Day. The
Swing Line Lender shall promptly notify the Administrative Agent of the Swing
Loan Outstandings each time there is a change therein.
(b) Swing Line Loans shall bear interest at a fluctuating rate per
annum equal to the Alternate Base Rate plus the Applicable Alternate Base Rate
Margin. Interest shall be payable on such dates, not more frequent than monthly,
as may be specified by the Swing Line Lender and in any event on the Maturity
Date. The Swing Line Lender shall be responsible for invoicing Borrower for such
interest. The interest payable on Swing Line Loans is solely for the account of
the Swing Line Lender (subject to clause (d) below).
(c) The Swing Line Loans shall be payable on demand made by the
Swing Line Lender and in any event on the Maturity Date.
(d) Upon the making of a Swing Line Loan, each Lender shall be
deemed to have purchased from the Swing Line Lender a participation therein in
an amount equal to that Lender's Pro Rata Share of the Commitment times the
amount of the Swing Line Loan. Upon demand made by the Swing Line Lender, each
Lender shall, according to its Pro Rata Share of the Commitment, promptly
provide to the Swing Line Lender its purchase price therefor in an amount equal
to its participation therein. The obligation of each Lender to so provide its
purchase price to the Swing Line Lender shall be absolute and unconditional
(except only demand made by the Swing Line Lender) and shall not be affected by
the occurrence of a Default or Event of Default; provided that no Lender shall
be obligated to purchase its Pro Rata Share of (i) Swing Line Loans to the
extent that the sum of (A) the aggregate principal amount of the Indebtedness
evidenced by the Notes plus (B) the Aggregate Effective Amount of all
outstanding Letters of Credit plus (C) the Swing Line Outstandings exceeds the
Commitment, (ii) Swing Line Loans to the extent that Swing Line Outstandings are
in excess of $3,000,000 and (iii) any Swing Line Loan made (absent the consent
of all of the Lenders) during the continuation of an Event of Default. Each
Lender that has provided to the Swing Line Lender the purchase price due
-3-
<PAGE> 4
for its participation in Swing Line Loans shall thereupon acquire a pro rata
participation, to the extent of such payment, in the claim of the Swing Line
Lender against Borrower for principal and interest and shall share, in
accordance with that pro rata participation, in any principal payment made by
Borrower with respect to such claim and in any interest payment made by Borrower
(but only with respect to periods subsequent to the date such Lender paid the
Swing Line Lender its purchase price) with respect to such claim.
(e) In the event that the Swing Line Outstandings are in excess of
$2,000,000 on ten (10) consecutive Banking Days, then on the next Banking Day
(unless Borrower has made other arrangements acceptable to the Swing Line Lender
to reduce the Swing Line Outstandings below $2,000,000), Borrower shall request
a Loan pursuant to Section 2.1 sufficient to reduce the Swing Line Outstandings
below $2,000,000. In addition, upon any demand for payment of the Swing Line
Outstandings by the Swing Line Lender (unless Borrower has made other
arrangements acceptable to the Swing Line Lender to reduce the Swing Line
Outstandings to $0), Borrower shall request a Loan pursuant to Section 2.1
sufficient to repay all Swing Line Outstandings (and, for this purpose, Section
2.1(d) shall not apply). In each case, the Administrative Agent shall
automatically provide the responsive Advances made by each Lender to the Swing
Line Lender (which the Swing Line Lender shall then apply to the Swing Line
Outstandings). In the event that Borrower fails to request a Loan within the
time specified by Section 2.2 on any such date, the Administrative Agent may,
but is not required to, without notice to or the consent of Borrower, cause
Alternate Base Rate Advances to be made by the Lenders under the Commitment in
amounts which are sufficient to reduce the Swing Line Outstandings as required
above. The conditions precedent set forth in Article 8 shall not apply to
Advances to be made by the Lenders pursuant to the three preceding sentences.
The proceeds of such Advances shall be paid directly to the Swing Line Lender
for application to the Swing Line Outstandings.
(f) Notwithstanding anything in Sections 2.11(a) and 2.11(e) to the
contrary, the Swingline Lender may, in its sole discretion and in lieu of the
Swingline Loan procedures set forth in Sections 2.11(a) and 2.11(e), make
available to Borrower its "Credit Sweep" program (or other program having
comparable features and procedures) pursuant to which, at the close of business
on each Banking Day, if there then would be a debit balance in the Designated
Deposit Account, the Swingline Lender will credit the Designated Deposit Account
in an amount such that, giving effect thereto, such account reflects a positive
credit balance of $1.00. Each such credit shall constitute a Swingline Loan for
all purposes of this Agreement. The Swingline Lender may, in its sole
discretion, terminate availability of such program to Borrower, effective (if no
Default or Event of Default then exists) upon thirty (30) days prior written
notice to Borrower or (if a Default or Event of Default then exists) upon notice
to Borrower. Upon such a termination, the procedures otherwise applicable to
Swingline Loans in Sections 2.11(a) and 2.11(e) shall again apply.
-4-
<PAGE> 5
5. Section 3.1(d). Section 3.1(d) of the Loan Agreement is amended
by striking clause (i) thereof and substituting in its place the following:
(i) the amount, if any, by which the sum of (A) the
principal Indebtedness evidenced by the Notes plus (B) the
Aggregate Effective Amount of all outstanding Letters of
Credit plus (C) the Swing Line Outstandings at any time
exceeds the then applicable Commitment (including the
Commitment as reduced pursuant to Section 2.5, 2.6 or 2.7)
shall be payable immediately; and
6. Section 6.18. Section 6.18 of the Loan Agreement is amended by
stricking the figures "$15,000,000" in the third line thereof and substituting
in their place the figures "$24,000,000.":
7. Section 6.19. Section 6.19 of the Loan Agreement is amended to
read in full as follows:
6.19 Operating Leases. Incur any obligation to pay
rent under an operating lease in (a) the Fiscal Year
ending December 31, 1998 if to do so would result in the
aggregate obligation of Borrower and its Subsidiaries to
pay rent under all operating leases in that Fiscal Year to
exceed $1,400,000 or (b) any Fiscal Year thereafter if to
do so would result in the aggregate obligation of Borrower
and its Subsidiaries to pay rent under all operating
leases in that Fiscal Year to exceed $2,250,000.
8. Waiver. Compliance by Borrower with Section 6.18 of the Loan
Agreement, as it existed prior to the date of this Amendment, with respect to
the Fiscal Year ended December 31, 1998 is hereby waived.
9. No Other Waiver. The waiver set forth in Paragraph 8 applies
only to the covenant and circumstances expressly described therein and shall not
be construed to apply to any other covenant or circumstance. The granting of
such waiver in such circumstances shall not imply the Administrative Agent's
willingness to waive such covenant under future similar circumstances.
10. Conditions Precedent. The effectiveness of this Amendment shall
be conditioned upon the receipt by the Administrative Agent of all of the
following, each properly executed by an authorized officer of each party thereto
and dated as of the date hereof:
-5-
<PAGE> 6
(a) Counterparts of this Amendment executed
by all parties hereto;
(b) Written consent of the Requisite Lenders
as required under Section 11.2 of the
Loan Agreement in the form of Exhibit A
to this Amendment; and
(c) the Swing Line Documents executed by
Borrower.
11. Representation and Warranty. Borrower represents and warrants
that no Default or Event of Default has occurred and remains continuing.
12. Confirmation. In all other respects, the terms of the Loan
Agreement and the other Loan Documents are hereby confirmed.
IN WITNESS WHEREOF, Borrower and the Administrative Agent have
executed this Amendment by their duly authorized representatives.
Dated: February 26, 1999
AMERICAN COIN MERCHANDISING, INC.
By: /s/ W. John Cash
-------------------------------------
W. John Cash
Chief Financial Officer
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent
By /s/ James K. Edwards
-------------------------------------
James K. Edwards
Vice President
-6-
<PAGE> 7
Exhibit A to Amendment
CONSENT OF LENDER
Reference is hereby made to that certain Reducing Revolving Loan
Agreement dated as of June 10, 1998 (as heretofore amended, the "Loan
Agreement") among American Coin Merchandising, Inc. ("Borrower"), the Lenders
party thereto and Wells Fargo Bank, National Association, as Administrative
Agent. Capitalized terms used but not defined herein are used with the meanings
set forth for those terms in the Loan Agreement.
The undersigned Lender hereby consents to the execution and
delivery of Amendment No. 3 to Reducing Revolving Loan Agreement by the
Administrative Agent on its behalf substantially in the form of the most recent
draft presented to the undersigned Lender.
Date: February 26, 1999
---------------------------------------------
[Name of Institution]
By
-------------------------------------------
---------------------------------------------
[Printed Name and Title]
-7-
<PAGE> 1
EXHIBIT 10.43
MANAGEMENT TRANSITION AGREEMENT
THIS MANAGEMENT TRANSITION AGREEMENT (this "Agreement") is made and
entered into by and between Jerome M. Lapin ("Executive") and American Coin
Merchandising, Inc. (the "Company"), as of the last date on which either party
signs this Agreement ("Effective Date").
W I T N E S S E T H
WHEREAS, Executive is currently Chief Executive Officer, Chairman of
the Board and a Director of the Company and wishes to transition into a
consulting relationship with the Company, in consideration of the promises and
covenants contained herein;
WHEREAS, the Company has accepted Executive's wishes and desires to
provide Executive with certain benefits in consideration of his service to the
Company and the promises and covenants of Executive as contained herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. RESIGNATION. Executive has tendered, and the Company has accepted,
Executive's resignation as a Member of the Executive Committee and as Chairman
of the Board of Directors effective as of January 22, 1999. Executive shall
continue to serve as Chief Executive Officer and Director through the Company's
1999 annual shareholder meeting ("Separation Date") and only as a Director
through the Company's 2000 annual shareholder meeting. The Company agrees to
nominate Executive to serve as a Director at the Company's 1999 annual
shareholder meeting.
2. SALARY, VACATION, AND FUTURE PAYMENT. The Executive shall continue
to be paid his salary of $200,000 per annum through March 31, 1999, and his
agreed salary of $215,000 per year beginning April 1, 1999. The Executive shall
continue to be paid his guaranteed bonus of $60,000 per year through March 31,
1999, but shall not be entitled to any guaranteed bonus thereafter. Within a
reasonable time following the Separation Date, the Company shall pay Executive
all accrued salary as well as all accrued and unused vacation earned prior to
the Separation Date, subject to standard payroll deductions and tax
withholdings. Executive agrees and acknowledges that the Company has no
obligation to pay Executive any bonuses for any time subsequent to the
Separation Date. Executive's sole compensation subsequent to the Separation Date
shall be as set forth in this paragraph 2 together with the consulting fees set
forth in paragraph 6(b). Executive shall not be entitled to additional
compensation relating to any service as Director through December 31, 2000. For
any services as Director after December 31, 2000, Executive shall be entitled to
the normal compensation awarded to continuing outside Directors in accordance
with the plan in effect as of such date.
3. HEALTH INSURANCE. Company agrees to continue paying for Executive's
health insurance provided through the Company's group health insurance plan
through the Separation
<PAGE> 2
Date. Thereafter, Executive shall be eligible to continue his health insurance
benefits under the federal COBRA law (or until such time as Executive becomes
eligible for health benefits through another employer, whichever occurs first)
and the Company shall reimburse the Executive for the cost of such benefits
through the end of the Consulting Period. Executive shall be provided by the
Company with a separate notice of his COBRA rights.
4. EXPENSE REIMBURSEMENT. Executive shall submit his documented expense
reimbursement statements reflecting all business expenses he incurs prior to the
Separation Date, if any, for which he seeks reimbursement. The Company shall
reimburse Executive's expenses pursuant to Company policy and regular business
practice. During the Consulting Period, the Company shall reimburse Executive
for all out-of-pocket expenses reasonably incurred by Executive, subject to the
approval of the Chief Operating Officer of the Company.
5. SECTION 401(K). Executive shall continue to receive Section 401(k)
benefits through the Separation Date. Executive's Section 401(k) benefits shall
cease thereafter. The Company shall reasonably cooperate with Executive with
respect to the transition of his Section 401(k) benefits at such time.
6. CONSULTING AGREEMENT. Executive shall serve as a consultant to the
Company under the terms specified below. The consulting relationship shall
commence on the Separation Date and continue through December 31, 2000 (the
"Consulting Period") unless terminated earlier pursuant to paragraph 7 herein.
The term of this Agreement cannot be extended except in a writing executed by
the Executive and by the Chief Operating Officer or the then-serving Chief
Executive Officer of the Company and approved by the Company's Board of
Directors.
(a) CONSULTING SERVICES. Executive agrees to provide
consulting services to the Company in any area of his expertise upon
request by the Company's Executive Committee or management team.
Executive agrees to make himself available to perform such consulting
services throughout the Consulting Period. Executive agrees that he
will render services to the Company during the Consulting Period at a
level of up to approximately 25% of full-time employment, or
approximately 40 hours per month. Any services rendered in excess of
that amount shall not entitle Executive to payment in excess of that
amount set forth in paragraph 6(b). If the Company does not give
Executive sufficient work to occupy him for the foregoing work hours,
he shall still be paid his consulting fees as set forth in paragraph
6(b), without any deduction or penalty for the shortfall in work hours.
Nothing herein is intended to impair Executive's efforts to obtain
full-time employment not in competition with the Company, as described
in paragraph 11 below.
(b) CONSULTING FEES AND BENEFITS.
(i) CONSULTING FEES. In exchange for the consulting
services described above, the Company shall pay Executive a salary
equal to $215,000 per year from the Separation Date through the
remainder of the Consulting Period. Such salary shall be payable at the
intervals regularly established for payment of
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<PAGE> 3
salaries by the Company. Executive shall not be entitled to receive any
bonuses during the Consulting Period (or for the period beginning April
1, 1999).
(ii) TAXES AND WITHHOLDING. The Company shall process
payment of Consulting Fees through the Company's normal payroll system
and subject to withholding for taxes, social security or other payroll
deductions.
(iii) ATTORNEYS' OR ACCOUNTANTS' FEES. The Company
agrees to reimburse Executive for his reasonable attorneys' and
accountants' fees directly related to negotiation of this Agreement,
within a reasonable time after presentation of itemized statements for
such services.
(iv) AUTOMOBILE LEASE. The Company shall continue to
make lease and insurance payments on Executive's motor vehicle. At the
end of the lease period, the Company shall purchase such motor vehicle
and transfer title to Executive as additional compensation. All
operating, maintenance and other expenses for such motor vehicle shall
be borne by Executive.
(v) OTHER COMPENSATION. Except as expressly provided
herein, Executive acknowledges that he will not receive (nor is he
entitled to) any additional compensation, severance or benefits after
the Separation Date.
(c) REPORTING RELATIONSHIP, OFFICE AND SUPPORT. Executive
shall report directly to the Chief Operating Officer of the Company.
Executive shall retain his current office through the Separation Date,
and thereafter Executive shall be provided with reasonable office space
and secretarial support for the performance of his consulting services
under this Agreement.
7. TERMINATION OF AGREEMENT. The Company, without liability, may
terminate Executive's consulting relationship under this Agreement for cause at
any time and without notice, and thereafter the Company's obligations hereunder
shall cease and terminate. Termination of Executive's consulting relationship
hereunder shall be deemed "for cause" if such termination is due to any act, or
failure to act, by Executive that is: (i) in bad faith and to the detriment of
the Company; (ii) a breach by Executive of any term of this Agreement, which
breach continues for a period of 10 days after Executive receives written notice
of such breach from the Company's Board of Directors; (iii) not in accordance
with his obligations under this Agreement as amounts to an intentional,
extended, or gross neglect of his respective duties to the Company; (iv) the
result of such prolonged or continued use of alcohol or narcotics as to leave
Executive unable or unwilling to fulfill his respective duties; (v) an act of
fraud or embezzlement against the Company by Executive; or (vi) results in
Executive's conviction for commission of a crime involving moral turpitude or
dishonesty. If Executive's consulting relationship is terminated for cause, all
compensation and benefits shall cease as of the date of his termination.
Executive shall not be entitled to any additional compensation or benefits
beyond what is expressly provided to him under this Agreement.
8. DEATH OR PERMANENT MENTAL DISABILITY OF EXECUTIVE. In the event of
the death or permanent mental disability of Executive (which renders him unable
to
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<PAGE> 4
satisfactorily) perform his consulting relationship with the Company), this
Agreement shall immediately terminate. The Company shall immediately pay all
accrued salary and unused vacation to Executive, Executive's surviving spouse,
or if there is no spouse surviving, to Executive's estate. Thereafter the
Company's obligations hereunder shall cease and terminate.
9. LIMITATIONS ON AUTHORITY. Executive shall have no responsibilities
or authority as a consultant of the Company other than as provided for above.
Executive hereby agrees not to represent or purport to represent the Company in
any manner whatsoever to any third party unless authorized by the Chief
Operating Officer of the Company. The parties acknowledge and agree that the
Executive will be engaged in transitional activities and discussions with the
Company's banking and financial contacts, as well as with other employees of the
Company.
10. OTHER WORK ACTIVITIES. Throughout the Consulting Period, Executive
retains the right to engage in employment, consulting, or other work
relationships in addition to his work for the Company, subject to the
limitations set forth in this Agreement.
11. NONCOMPETITION AND CONFIDENTIALITY.
(a) Executive realizes that during the Consulting Period,
Executive will produce and/or will have access to confidential
memoranda, notes, information, records, maps, research results,
business projections, business and research notebooks, data, formulae,
specifications, trade secrets, customer lists, inventions and processes
of the Company, and other information of a confidential nature
(collectively, "Confidential Information").
(b) Both during and after the Consulting Period, Executive
agrees to hold all Confidential Information in confidence and not to
disclose, and not directly or indirectly to use, copy, digest or
summarize, any Confidential Information, except to the extent necessary
to carry out Executive's responsibilities as directed or authorized by
the Company and, after termination of Executive's consulting
relationship hereunder, as specifically authorized in writing by the
Company.
(c) Executive acknowledges and agrees that he possesses or
will possess knowledge, skills and reputation in the amusement vending
machine business or industry (the "Industry") that are of material
importance to the Company, and that are special, unique and
extraordinary. Executive acknowledges that the loss of his services, to
a competitor, may cause irreparable harm to the Company. Therefore, for
a three year period following termination of his consulting
relationship with the Company (the "Restricted Period") for any reason,
with or without cause, Executive, individually and personally, shall
not do any of the following:
(i) Canvass, solicit, or accept any business in the
Industry from any present or past customer of the Company or
any related company, if such customer is located in the United
States (the "Territory").
(ii) Aid or assist any other person, entity,
partnership, association or corporation (each, a "Person") in
any effort to canvass, solicit, or accept any
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<PAGE> 5
business in the Industry from any past or present customers of
the Company or of any related company, if such customer is
located within the Territory.
(iii) Directly or indirectly request or advise any
past, present or possible future customer of the Company or
any related company to withdraw, curtail, cancel, or not
undertake business in the Industry with the Company or any
related company, if the customer is located within the
Territory;
(iv) Directly or indirectly disclose to any Person
the names of past or present customers of the Company or any
related company. The parties agree that the names of such
customers are confidential and proprietary and constitute
trade secrets of the Company within the meaning of Colorado
Revised Statutes Sections 8-2-113(2)(b) and 7-74-102(4);
(v) Disclose to any Person the names of executives of
the Company;
(vi) Directly or indirectly establish, as manager,
employee or owner of more than one percent of the outstanding
ownership interest, or participate in an enterprise
competitive with any business that is conducted at any time
prior to or during the Consulting Period by the Company or any
related company, and which business is in the Industry and in
the Territory.
(vii) Provide any product, service, financing, aid,
or assistance of any kind for any Person that is competitive
with any business that is conducted at any time prior to or
during the Consulting Period by the Company or any related
company, and which business is in the Industry and the
Territory.
(d) The rights and obligations of this Section 7 shall survive
any expiration or termination of this Agreement.
(e) Executive agrees to notify the Company, in writing, at
least 10 business days prior to engaging in any work for any business
purpose other than work for the Company. In the event that Executive
engages in any activity described in subparagraph (c) above, the
Company's obligation to pay Executive consulting fees or any other
compensation set forth above shall cease immediately.
12. NONSOLICITATION. Executive agrees that during the Restricted Period
he will not, either directly or indirectly, solicit or attempt to solicit any
employee, consultant, or independent contractor of the Company to terminate his
or her relationship with the Company in order to become an employee, consultant
or independent contractor to or for any other person or entity.
13. COMPANY AND PERSONAL PROPERTY. All records in whatever form and in
whatever medium recorded, and any and all copies thereof (including volatile
electronic or magnetic signals), relating to the Company's business that
Executive shall prepare, or use, or come into contact with in the course of his
executing his duties under this Agreement, shall be and remain the sole property
of the Company and shall not be removed from the Company's premises except as
necessary to carry out Executive's responsibilities as directed and authorized
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<PAGE> 6
by the Company; and the same shall be returned promptly to the Company at the
end of the Consulting Period or upon the Company's request. On the Separation
Date, Executive shall also return all credit cards, entry cards, identification
badges, keys, and mobile phones if any, that Executive received prior to that
time. The Executive shall be entitled to remove all of his personal property
located at the Company's offices.
14. NONDISPARAGEMENT. Executive and the Company agree that neither
party shall at any time disparage the other in any manner likely to be harmful
to the other party, its business reputation, or the personal or business
reputation of its directors, shareholders, and employees, provided that each
party shall respond accurately and fully to any question, inquiry or request for
information when required by legal process. Executive shall have the right to
review and comment upon any press releases issued by the Company that refer to
his departure from the Company or otherwise directly affect him, and the Company
agrees to consider in good faith any changes or clarifications suggested by the
Executive.
15. HOLD HARMLESS. Executive shall exonerate, indemnify and hold
harmless the Company, its officers, agents and employees from and against any
and all liability, loss, cost, damage, claims, demands, or expenses of every
kind on account of injuries (including death) to the Company or any third party,
or loss of or damage to the Company's or any third party's property arising out
of or resulting in any manner from or occurring in connection with any gross
negligence or intentional actions by the Executive in the performance of his
services hereunder. The Company shall exonerate, indemnify and hold harmless the
Executive, his successors and assigns from and against any and all liability,
loss, cost, damage, claims, demands, or expenses of every kind on account of
injuries (including death) to the Company or any third party, or loss of or
damage to the Company's or any third party's property arising out of or
resulting in any manner from or occurring in connection with any gross
negligence or intentional actions by the Company, its officers, agents and
employees hereunder.
16. RELEASE OF CLAIMS. Except as otherwise set forth in this Agreement,
Executive hereby releases, acquits and forever discharges the Company, its
officers, directors, agents, servants, employees, shareholders, attorneys,
successors, assigns and affiliates, of and from any and all claims, liabilities,
demands, causes of action, costs, expenses, attorneys' fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way related to agreements, events, acts or
conduct at any time prior to and including the date of this Agreement, including
without limitation: (a) any and all such claims and demands directly or
indirectly arising out of or in any way connected with Executive's relationship
with the Company or the termination of that relationship; (b) claims or demands
related to salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits ,expense
reimbursements, severance benefits, or any other form of compensation; (c)
claims pursuant to any federal, state or local law, statute or cause of action
including without limitation, tort law, contract law, wrongful discharge,
discrimination, fraud, defamation, emotional distress and breach of the implied
covenant of good faith and fair dealing. Except as otherwise set forth in this
Agreement, the Company hereby releases, acquits and forever discharges the
Executive, his successors and assigns, of and from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorneys' fees,
damages, indemnities and obligations of every kind and nature, in law, equity,
or otherwise, known and unknown,
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suspected and unsuspected, disclosed and undisclosed, arising out of or in any
way related to agreements, events, acts or conduct at any time prior to and
including the date of this Agreement, including without limitation: (a) any and
all such claims and demands directly or indirectly arising out of or in any way
connected with Executive's relationship with the Company or the termination of
that relationship; (b) claims or demands related to salary, bonuses,
commissions, stock, stock options, or any other ownership interests in the
Company, vacation pay, fringe benefits ,expense reimbursements, severance
benefits, or any other form of compensation; (c) claims pursuant to any federal,
state or local law, statute or cause of action including without limitation,
tort law, contract law, wrongful discharge, discrimination, fraud, defamation,
emotional distress and breach of the implied covenant of good faith and fair
dealing.
17. OWBPA NOTICE. Executive acknowledges that, among other rights, he
is waiving and releasing any rights he may have under the federal Age
Discrimination in Employment Act of 1967, as amended, that this waiver and
release is knowing and voluntary, and that the consideration given for this
waiver and release is in addition to anything of value to which he was already
entitled as an employee of the Company. Executive further acknowledges that he
has been advised, as required by the Older Workers Benefit Protection Act, that:
(a) the waiver and release granted herein does not relate to claims that may
arise after this Agreement becomes effective; (b) he has the right to consult
with any attorney prior to executing this Agreement (although he may choose
voluntarily not to do so); (c) he has 21 days from the date he receives this
Agreement in which to consider this Agreement (although he may choose
voluntarily to execute this Agreement earlier); (d) he has seven days following
the execution of this Agreement to revoke his consent to this Agreement; and (e)
this Agreement shall not be effective until the seven day revocation period has
expired.
18. CONFIDENTIAL ARBITRATION. Any disputes arising from this Agreement
shall be submitted to binding, confidential arbitration with the Judicial
Arbiter Group ("JAG") in Denver, Colorado, in accordance with the then existing
rules issued by JAG applicable to employment disputes. Any such arbitration
shall be conducted in the utmost secrecy.
19. ENTIRE AGREEMENT. This Agreement constitutes the complete, final
and exclusive embodiment of the entire agreement between Executive and the
Company with respect to the subject matter hereof. It is entered into without
reliance on any promise or presentation, written or oral, other than those
expressly contained herein. It may not be modified except in a writing signed by
Executive and a duly authorized officer of the Company. Each party has carefully
read this Agreement, has been afforded the opportunity to be advised of its
meaning and consequences by his or its respective attorneys, and signed the same
of his or its own free will.
20. SUCCESSORS AND ASSIGNS. Due to the personal nature of Executive's
duties under this Agreement, Executive shall not delegate the performance of his
duties under this Agreement. Nothing in this Agreement shall prevent the
consolidation of the Company with, or its merger into, any other corporation, or
the sale by the Company of all or substantially all of its properties or assets,
or the assignment by the Company of this Agreement and the performance of its
obligations hereunder to any affiliated company. This Agreement shall bind the
heirs, personal representatives, successors, assigns, executors, and
administrators of each party, and inure to the benefit of each party, its heirs,
successors and assigns.
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21. APPLICABLE LAW. This Agreement shall be deemed to have been entered
into and shall be construed and enforced in accordance with the laws of the
State of Colorado as applied to contracts made and to be performed entirely
within Colorado.
22. SEVERABILITY. If a court of competent jurisdiction determines that
any term or provision of this Agreement is invalid or unenforceable, in whole or
in part, then the remaining terms and provisions hereof shall be unimpaired.
Such court will have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
that most accurately represents the parties' intention with respect to the
invalid or unenforceable term or provision.
23. PARAGRAPH HEADINGS. The paragraph headings contained herein are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
24. COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original, all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly authorized and caused this
Agreement to be executed as follows:
AMERICAN COIN MERCHANDISING, INC.
/s/ Randall J. Fagundo
- -----------------------------------------
By: Randall J. Fagundo
Its: Chief Operating Officer
EXECUTIVE:
/s/ Jerome M. Lapin
- -----------------------------------------
Jerome M. Lapin, individually
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EXHIBIT 10.44
VOTING AGREEMENT
THIS AGREEMENT is made and entered into as of the 7th day of April,
1999, by and between JEROME M. LAPIN ("Lapin"), and AMERICAN COIN MERCHANDISING,
INC., a Colorado corporation (the "Company"), and the corporate secretary of the
Company ("Trustee").
1. Background. Lapin owns 465,932 shares of Common Stock in the Company
(the "Shares"). In order to facilitate continuity in the management of the
Company and to promote the long-term growth and success of the Company, the
parties desire to provide in this Agreement for Trustee to have the power and
authority to vote the Shares owned by Lapin on all corporate actions. The
parties further desire for Trustee to vote the Shares in accordance with the
recommendations of a majority of the Company's continuing Directors (the
"Continuing Directors"). The consideration for this Agreement is the mutual
promises and undertakings contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged.
2. Voting of Shares. The parties hereby agree that, at any annual or
special meeting of the shareholders of the Company during the term of this
Agreement, or pursuant to any action taken by written consent of the
shareholders of the Company during the term of this Agreement, the Shares shall
be voted by Trustee as directed by a majority of the Continuing Directors (who
are defined as the Directors then serving from among Randy Fagundo, Abbe
Stutsman, Dick Jones, Greg Theisen, and John Sullivan. In directing how the
Trustee shall vote the Shares, the Continuing Directors shall use their business
judgment as required by Delaware corporate law.
3. Proxy. Concurrent with the execution of this Agreement, Lapin shall
execute an irrevocable proxy appointing Trustee as his true and lawful attorney
in fact to vote the Shares.
4. All Other Rights Retained. The parties acknowledge that, except as
expressly provided herein, Lapin shall retain all of the rights, powers and
privileges of a shareholder of the Company with respect to the Shares, pursuant
to the Company's Articles of Incorporation, as amended, and in accordance with
applicable law.
5. Termination of Agreement. This Agreement shall terminate with
respect to any shares sold pursuant to the provisions of that certain Stock
Restriction Agreement by and between Lapin and the Company, dated as of the date
hereof, effective upon the closing of such a sale. This Agreement shall also
terminate at such time as none of the following directors (Randy Fagundo, Abbe
Stutsman, Dick Jones and Greg Theisen) are Continuing Directors. Otherwise, this
Agreement shall terminate concurrently with the termination of Lapin's
consulting relationship with the Company under the terms of that certain
Management Transition Agreement, dated as of the date hereof, between the
Company and Lapin.
6. Miscellaneous. This Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective heirs, personal
representatives, successors and assigns. This Agreement shall be governed by the
laws of the State of Colorado and shall be specifically enforceable to the
extent permitted by such laws.
<PAGE> 2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
AMERICAN COIN MERCHANDISING, INC. TRUSTEE
/s/ Randall J. Fagundo /s/ Randall J. Fagundo
--------------------------- -------------------------------
By: Randall J. Fagundo By: Randall J. Fagundo
Its: Chief Operating Officer Its: Corporate Secretary
/s/ Jerome M. Lapin
- ------------------------------------
Jerome M. Lapin, individually
<PAGE> 1
EXHIBIT 10.45
STOCK RESTRICTION AGREEMENT
THIS AGREEMENT is made as of the 7th day of April, 1999, between
AMERICAN COIN MERCHANDISING, INC., a Colorado corporation (the "Company"), and
JEROME M. LAPIN ("Shareholder").
In consideration of the mutual promises, covenants and conditions set
forth below, the parties mutually agree as follows:
1. Background. Shareholder is the owner of 465,932 shares of common
stock of the Company (the "Common Stock"). This Agreement shall govern the sale,
transfer or other disposition of all of Shareholder's shares of Common Stock,
now or hereafter acquired, including any shares received as a result of stock
dividends, stock splits or any other forms of recapitalization or otherwise
issued to Shareholder subsequent to the date of this Agreement (collectively,
the "Stock"). In order to facilitate continuity in the management of the Company
and to promote the long-term growth and success of the Company, the parties
desire to provide in this Agreement for all of the Stock to be subject to
certain restrictions provided herein.
2. Restrictions on Transfer.
(a) During the term of this Agreement, Shareholder hereby
agrees and covenants that he shall not sell, assign, transfer, pledge,
hypothecate, or otherwise dispose of, by operation of law or otherwise
(any of the foregoing, a "Transfer") any of the Stock, except after
compliance with the provisions of this paragraph. Prior to any proposed
Transfer of the Stock by Shareholder, Shareholder shall provide written
notice to the Company, including a representation that the proposed
transfer is not intended to benefit any competitor, potential
competitor, customer or vendor for the Company's existing or
contemplated businesses or an investor actively attempting to acquire
control of the Company. The Company shall have 15 days after receipt of
such written notice to notify Shareholder that the Board of Directors
of the Company has determined, in good faith and in the exercise of
their reasonable business judgment, not to consent to the proposed
transfer. In the absence of such a notice from the Company, Shareholder
may transfer the Stock subject to the remaining terms of this
Agreement. Shareholder acknowledges and agrees that the Company's
refusal to consent to a Transfer of the Stock in a directly negotiated
transaction to a competitor, potential competitor, customer or vendor
for the Company's existing or contemplated businesses, or to an
investor actively attempting to acquire control of the Company shall be
in good faith and within reasonable business judgment. The Company
acknowledges and agrees that the placement of Stock with a recognized
market maker in the Company's stock for an unsolicited market
transaction will be acceptable to the Company, provided that the
Shareholder is not proposing to Transfer five percent or more of the
Stock in one or a related series of Transfers or that the Board
reasonably determines that there is an investor actively attempting to
acquire control of the Company.
<PAGE> 2
(b) In addition to the limitation set forth in paragraph 2(a),
Shareholder shall not, during the term of this Agreement, Transfer any
of the Stock, or any interest therein, unless Shareholder shall have
procured an effective current registration statement relating to the
Stock under the Securities Act of 1933 (the "Act") or an opinion of
counsel, in form and substance satisfactory to the Company, to the
effect that registration is not required because Shareholder has
satisfied all of the requirements set forth under Rule 144 promulgated
under the Act by the Securities and Exchange Commission ("Rule 144").
Any attempted disposition of the Stock or any interest therein while it
is restricted shall be null and void and of no effect.
3. Termination. This Agreement shall terminate upon the earlier of the
mutual written agreement of the parties hereto or concurrently with the
termination of Shareholder's consulting relationship with the Company under the
terms of that certain Management Transition Agreement, dated as of the date
hereof, between the Company and Shareholder.
4. Restrictive Legends.The Company shall place legends on the
certificates evidencing the Stock bearing the following legend:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A CERTAIN
STOCK RESTRICTION AGREEMENT AND A CERTAIN VOTING AGREEMENT,
DATED AS OF _______________, 1999, BETWEEN THE CORPORATION AND
THE REGISTERED OWNER OF THIS CERTIFICATE (OR HIS PREDECESSOR
IN INTEREST), AND SUCH AGREEMENT IS AVAILABLE FOR INSPECTION
WITHOUT CHARGE AT THE PRINCIPAL OFFICE OF THE CORPORATION.
Stock transfer instructions shall be delivered by the Company to any transfer
agent for such Common Stock. At the time or times when the restrictions in
paragraph 2 of this Agreement are terminated with respect to the Stock, the
legends on the certificates evidencing such shares shall be appropriately
amended and the stop transfer instructions shall be appropriately modified.
5. Stock Certificates and Registration. During the term of this
Agreement, the Shareholder will retain possession of all stock certificates
evidencing the Stock. In the event the Company issues additional shares of Stock
in an underwritten public offering, the Company will, subject to the
determination of the underwriter in its sole discretion, permit the Shareholder
to participate in the registration and sale of his Stock on a pro rata basis and
on the same terms and conditions as any officers or directors of the Company who
are selling shareholders in such offering. The Shareholder also agrees to
execute any lock-up letters or other agreements required of officers, directors,
or other major shareholders in connection with such offering.
6. Shareholder Representations. Shareholder represents, warrants and
covenants that he understands that (a) the Stock has not been registered under
the Act and are "restricted securities" within the meaning of Rule 144, (b) the
Stock cannot be sold, transferred or otherwise disposed of unless it is
subsequently registered under the Act or an exemption from registration is then
available; and (c) he must comply with certain terms and conditions to sell,
transfer or otherwise dispose of the Stock under the exemption from registration
provided by Rule 144.
7. Waiver. Any provision contained in this Agreement may be waived,
either generally or in any particular instance, by the Board of Directors of the
Company.
8. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and Shareholder.
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9. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
assigns; provided, however, that Shareholder may not assign this Agreement or
any rights or obligations under this Agreement without the prior written consent
of the Company.
10. Governing Law. This Agreement shall be governed by the laws of the
State of Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
AMERICAN COIN MERCHANDISING, INC., a
Colorado corporation
By: /s/ Randall J. Fagundo
----------------------------------------
Its: Chief Operating Officer
SHAREHOLDER:
/s/ Jerome M. Lapin
---------------------------------------------
Jerome M. Lapin
3
