PLAN AND AGREEMENT OF REORGANIZATION
By and Among
LEE ENTERPRISES, INCORPORATED
J-S ACQUISITION CORP.
JOURNAL-STAR PRINTING CO.
and
JOURNAL LIMITED PARTNERSHIP
PLAN AND AGREEMENT OF REORGANIZATION
THIS PLAN AND AGREEMENT OF REORGANIZATION (the "Agreement") by
and among LEE ENTERPRISES, INCORPORATED, a Delaware corporation ("Lee"),
J-S ACQUISITION CORP., a Nebraska corporation ("JSAC"), JOURNAL-STAR
PRINTING CO., a Nebraska corporation ("Journal-Star"), and JOURNAL LIMITED
PARTNERSHIP, a Nebraska limited partnership ("JLP"), dated as of the 27th
day of February, 1995.
W I T N E S S E T H:
WHEREAS, Lee and Journal-Star desire to adopt a plan of
reorganization resulting in a tax-free reorganization within the meaning
of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended;
and
WHEREAS, JSAC is a newly created, wholly-owned subsidiary of
Lee; and
WHEREAS, the parties hereto propose that Journal-Star be merged
into JSAC pursuant to an Agreement and Plan of Merger (the "Merger
Agreement") substantially in the form of Exhibit A attached hereto whereby
on the effective date of the merger Journal-Star will be merged into JSAC
and the holders of Journal-Star Common Stock (as defined herein) other
than Lee will become holders of Lee Common Stock (as defined herein).
NOW, THEREFORE, in order to consummate this Agreement and effect
such merger, the parties hereto agree as follows:
ARTICLE ONE
General
1.1 In consideration of the agreements herein set forth, by
the adoption of this Agreement and subject to the approval of the Merger
Agreement by the shareholder of JSAC and the shareholders of Journal-Star
(JSAC and Journal-Star being sometimes referred to herein as the
"Constituent Corporations") and subject to the conditions hereinafter set
forth, Journal-Star shall, pursuant to the Merger Agreement, be merged
with and into JSAC (which is hereinafter sometimes referred to as the
"Surviving Corporation"). The Surviving Corporation shall continue with
its name changed to "Journal-Star Printing Co." or a similar name and upon
the Effective Date (as defined in Article Eight of this Agreement) the
separate corporate existence of Journal-Star shall cease. The terms,
provisions and conditions of the merger of Journal-Star and JSAC (the
"Merger") hereby agreed upon and the mode of carrying the same into effect
shall be set forth in the Merger Agreement.
1.2 From and after the Effective Date of the Merger and
subject to the directions of the Board of Directors of the Surviving
Corporation, the business presently conducted by Journal-Star will
continue to be conducted by the Surviving Corporation as a wholly-owned
subsidiary of Lee.
1.3 The Articles of Incorporation of the Surviving Corporation
shall not hereby or otherwise be amended by reason of the effectiveness of
the Merger contemplated herein except as set forth in the Merger
Agreement.
1.4 The By-Laws of JSAC as in effect on the Effective Date
shall be and constitute the By-Laws of the Surviving Corporation until the
same shall be altered, amended or repealed or until new By-Laws are
adopted as provided by law.
ARTICLE TWO
Method of Effecting Merger
2.1 The mode of carrying the terms and conditions of the
Merger Agreement into effect and the manner and basis of converting the
shares of Journal-Star into shares of Lee shall be as follows:
(a) Each share of Journal-Star Common Stock not owned by Lee
shall become and be converted into shares of Lee Common Stock in the
manner specified in the Merger Agreement, subject to the adjustment
specified in subparagraph (c) of this Section 2.1.
(b) After the Effective Date, each holder (except Lee) of an
outstanding certificate or certificates which prior thereto represented
shares of Journal-Star Common Stock shall surrender the same duly endorsed
to Lee, and such holders shall receive upon such surrender in exchange
therefor a certificate or certificates representing the number of whole
shares of Lee Common Stock to which they are entitled under this Agreement
and the Merger Agreement.
(c) Fractional share interests in Lee Common Stock will not be
issued. Each holder of Journal-Star Common Stock certificates (except
Lee) (or, in the case of lost certificates, a substitute which is
satisfactory to Lee), shall receive the number of whole shares of Lee
Common Stock to which they are entitled under this Agreement and the
Merger Agreement (rounded to the next nearest lower or higher full share).
(d) Each share of Journal-Star Common Stock owned by Lee shall
be retired and cancelled by virtue of the Merger.
ARTICLE THREE
Representations and Warranties
3.1 Journal-Star and JLP (to the best knowledge of JLP's
general partner, after diligent inquiry) warrant, represent and covenant
to and with Lee and JSAC that except as set forth herein or in the
Disclosure Schedule attached hereto as Exhibit "C":
(a) Journal-Star is a corporation organized, validly existing
and in good standing under the laws of the state of Nebraska; has
corporate power to hold its property and carry on its business as
presently conducted; and is qualified to transact business and is in good
standing in all jurisdictions in which ownership of its properties and
operation of its business requires such qualification. Journal-Star has
the legal power and corporate authority to perform all of its obligations
under this Agreement.
(b) The authorized capital stock of Journal-Star consists of
6,000 shares of Common Stock ($100 par value) (the "Journal-Star Common
Stock"). As of the date hereof Journal-Star has issued and outstanding
6,000 shares of its Common Stock, all of which were validly issued, fully
paid and nonassessable and on the date hereof Journal-Star has no other
shares of stock or any obligation to issue any shares of stock of any
class or any other securities outstanding.
(c) Journal-Star has good and marketable title to its assets,
free of security interests, liens, encumbrances, or any rights of others
of any kind (except for taxes which have accrued but are not yet due and
payable).
(d) The audited financial statements of Journal-Star as of
September 30, 1994 prepared by McGladrey & Pullen, LLP, certified public
accountants, present fairly the financial position of Journal-Star and the
results of its operations and activities as of the date and for the period
indicated in accordance with generally accepted accounting principles
consistently applied. The foregoing financial statements referred to in
this subparagraph (d) have heretofore been delivered to Lee. The
financial statements including the notes thereto are called the "Journal-
Star Financial Statements".
(e) Since September 30, 1994 there has been no material
adverse change in the business, capitalization, financial condition or
properties of Journal-Star and no material loss, damage or destruction
affecting its properties or business; the only changes in the business,
financial condition or properties of Journal-Star since said date are
those arising from the normal and regular conduct of business.
(f) Journal-Star is not in default under any indenture, loan
agreement or lease or under any other agreements or arrangements which are
material alone or in the aggregate to which it is a party or by which it
is bound, and neither the execution of this Agreement nor the consummation
of the transactions provided for herein will result in any breach or
acceleration of maturity of or constitute a default under any such
indenture, loan agreement or lease, or under any other agreements or
arrangements which are material alone or in the aggregate. No consent of
any third party is required for Journal-Star to consummate the Merger.
(g) No broker or finder has acted for Journal-Star or JLP in
connection with this Agreement or the transactions contemplated hereby and
no broker or finder is entitled to any brokerage or finder's fee or other
commission in connection herewith.
(h) Journal-Star has filed all federal, state and local tax
returns required to be filed by it. All taxes as shown upon the returns
so filed have been paid or provided for and are not delinquent. The
federal income, franchise and all other tax liabilities of Journal-Star
for the fiscal year ended September 30, 1994 and prior fiscal years have
been paid without claim for additional taxes by any governmental
authority. There is no reasonable basis for any material deficiency with
respect to federal income or any other tax liabilities of Journal-Star for
any tax period.
(i) Journal-Star is not a party to any pending litigation nor
does it know of any threatened litigation or proceedings by or before any
governmental agency or court, or which would question the validity of this
Agreement or of the transactions contemplated hereby, or would have a
material adverse effect upon the business, properties or prospects of
Journal-Star.
(j) Consummation by Journal-Star of the transactions
contemplated by the Agreement will not result in a violation by Journal-
Star of any applicable statute, rule or regulation of any governmental
body or agency.
(k) Since January 12, 1995, there has been no declaration or
payment of any dividend nor any distribution in respect of the Journal-
Star Common Stock, nor any increase in the salaries or other compensation
payable to any of its officers, directors or employees, except normal
periodic increases granted in accordance with prior practice.
3.2 JLP represents and warrants to Lee and JSAC:
(a) JLP is a limited partnership duly organized, validly
existing and in good standing under the laws of the state of Nebraska.
(b) JLP is the legal and beneficial owner of 3,015 shares of
Journal-Star Common Stock, free and clear of all liens, encumbrances,
charges, pledges, proxies (other than the proxy given to the trustees of
the J. C. Seacrest Trust), voting agreements, stock purchase agreements,
warrants, options, calls, rights, commitments, restrictions or limitations
of any kind.
(c) JLP has the full legal right and power and all authority
required to enter into, execute and deliver this Agreement and all other
agreements or documents contemplated hereby and to perform fully JLP's
obligations hereunder. This Agreement, and all other agreements
contemplated hereby, have been duly executed and delivered by or on behalf
of JLP and are the valid and binding obligations of JLP enforceable in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). The execution
and delivery of this Agreement, the consummation of the transactions
contemplated hereby and the performance by JLP of this Agreement in
accordance with its respective terms and conditions will not: (i) require
the approval or consent of any foreign, federal, state, county, local or
other governmental or regulatory body or the approval or consent of any
person (other than the partners of JLP); or (ii) conflict with or result
in any breach or violation of any of the terms and conditions of, or
constitute a default under, any partnership agreement or partnership
certificate, as the case may be, or any statute, regulation, order
judgment or decree applicable to JLP; or (iii) result in a breach of, or
constitute a default under, accelerate any obligation under or give rise
to a right of termination of any instrument, contract or any other
agreement to which JLP is bound or subject.
(d) Prior to the Closing Date, JLP will secure all authority
and approvals necessary to vote its shares of Journal-Star Common Stock in
favor of, and will thereafter take such other actions as may be necessary
to effect approval of the Merger and otherwise to consummate the
transactions contemplated hereby and waive any rights to appraisal of its
shares of Journal-Star Common Stock under Nebraska law.
(e) Except as specifically provided in this Agreement or in
the Disclosure Schedule, JLP is not a party to any contract of employment
or any pension, retirement, deferred compensation, profit-sharing, bonus,
retainer, consulting, or incentive compensation plan or arrangement, or
any contract with or for any officer, director, or employee of JLP or any
other person, as to which Lee or JSAC, as the Surviving Corporation, will
have any obligation after the Effective Date. True and correct copies of
any agreements, plans and arrangements as to which Lee or JSAC will have
any obligation have been supplied to Lee by Journal-Star.
3.3 Lee and JSAC represent and warrant to Journal-Star and
JLP, except as set forth herein or in the Disclosure Schedule:
(a) Lee and JSAC each is a corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation; each has corporate power to own its property and to carry
on its business as now conducted; and each is qualified to transact
business as a foreign corporation and is in good standing in the
jurisdictions in which its principal is qualified to transact business as
a foreign corporation and is in good standing in the jurisdictions in
which its principal properties are located. As of the Effective Date, Lee
will have the legal power and corporate authority to perform all of its
obligations under this Agreement.
(b) Lee is authorized to issue 60,000,000 shares of Common
Stock, $2 par value (the "Lee Common Stock"), and as of December 31, 1994,
had issued and outstanding 15,721,055 shares and 6,663,220 shares of Class
B Common Stock, $2 par value (the "Lee Class B Common Stock"). There are
no outstanding warrants, options, rights or commitments of any kind under
which Lee is obligated to sell or issue any other shares of Lee Common
Stock except for options, grants or awards of Lee Common Stock and Lee
Class B Common Stock under its 1977 Employee Stock Purchase Plan, the 1982
Incentive Stock Option Plan, and the 1990 Long-Term Incentive Plan. The
Lee Common Stock, when issued pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and the issuance thereof to JLP in
accordance with the terms of this Agreement will be exempt from
registration under the Securities Act of 1933.
(c) The audited consolidated balance sheet of Lee and its
subsidiaries as of September 30, 1994 and the audited consolidated
statement of income for the year ended September 30, 1994, heretofore
delivered by Lee to Journal-Star and JLP, present fairly the financial
position of Lee and its subsidiaries, and the results of their operations,
as of the dates and for the periods indicated in conformity with generally
accepted accounting principles consistently applied.
(d) No broker or finder has acted for Lee in connection with
this Agreement or the transactions contemplated hereby and no broker or
finder is entitled to any brokerage or finder's fee from Lee.
(e) Since September 30, 1994, there has been no material
adverse change in the business, assets or condition, financial or
otherwise, of Lee.
(f) Lee is not in default under any indenture or loan
agreement, or under any other agreements or arrangements which are
material alone or in the aggregate, to which Lee is a party or by which
Lee is bound and neither the execution of this Agreement nor the
consummation of the transactions provided for herein will result in any
breach or acceleration of maturity of or constitute a default under any
such indenture or loan agreement, or under any other agreements or
arrangements which are material alone or in the aggregate.
(g) JSAC has issued and outstanding 1,000 shares of capital
stock, $1 par value, all of which shares are owned by Lee. JSAC has no
liabilities or obligations of any kind whatsoever, save and except its
obligations arising under this Agreement.
(h) Lee has, for the past 12 months, filed and will continue to
file such reports with the Securities and Exchange Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 or
otherwise to satisfy the then current public information requirements of
Rules 144 and 145 issued by the Securities and Exchange Commission under
the Securities Act of 1933. Upon the written request of JLP, Lee will
promptly furnish a written statement that it has complied with such
requirements.
(i) From February 6, 1995 to the date of this Agreement, Lee
has repurchased shares of Lee Common Stock only (i) in transactions
pursuant to and in accordance with Rule 10b-18 promulgated under the
Securities Exchange Act of 1934 or (ii) in privately negotiated
transactions outside of any Securities Exchange. Between the date of this
Agreement and the Closing Date, Lee will not repurchase Lee Common Stock
in open market transactions without the consent of JLP being first
obtained.
ARTICLE FOUR
Actions Prior to Effective Date
4.1 Journal-Star, JLP and Lee agree that, until the Effective
Date or termination of this Agreement as provided in Article Nine,
Journal-Star shall conduct its business in the ordinary course and in
accordance with past practices, and will take no action in conflict
therewith or otherwise requiring the approval of Journal-Star's board of
directors or shareholders without the vote of either or both thereof, as
its Articles of Incorporation, By-Laws, and circumstances warrant.
4.2 As soon as practicable after the date of this Agreement,
JLP on behalf of itself and Journal-Star, and Lee, will each make any
filings required under Title II of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "Hart-Scott-Rodino Act"). Each
will furnish to the other such necessary information and reasonable
assistance as the other may request in connection with its preparation of
any additional necessary filings or submissions to any governmental
agency, including, without limitation, any additional filings under the
Hart-Scott Rodino Act. Each party will keep the other parties informed of
the status of any inquiries made of such party by the Federal Trade
Commission, the Antitrust Division of the U.S. Department of Justice or
any other governmental agency or authority or members of their respective
staffs with respect to this Agreement or the transactions contemplated
hereby.
4.3 Lee and JLP each may, prior to the Effective Date, through
its own employees and representatives, make such investigations of the
properties, facilities, books, records and financial condition of the
other and Journal-Star as it deems necessary or advisable, and such other
party will cooperate fully in such investigation. Such investigation and
examination shall be done at reasonable times and under reasonable
circumstances. In the event of termination of this Agreement, each shall
keep confidential and shall in no event use in any manner any confidential
information obtained from the other concerning the properties, operations
and business of the other and shall return to the other any confidential
statements, documents or other information obtained from the other in
connection therewith and any and all copies thereof.
ARTICLE FIVE
Other Agreements of Lee and JLP
5.1 At the Closing (as defined herein), JLP shall deliver an
assignment to Journal-Star of all interests of JLP in OakCreek Partners,
L.C., a Nebraska limited liability company. The consideration for such
assignment is included in the agreed value of the Lee Common Shares.
5.2 JLP shall be entitled to receive a dividend distribution
in respect of its shares of Journal-Star Common Stock, prorated to the
Closing Date (as defined herein), as from time to time declared and
distributed by the board of directors of Journal-Star in accordance with
the provisions of the present By-laws of Journal-Star. Any difference
between the dividend distribution in respect of its shares of Journal-Star
Common Stock declared and paid on a quarterly basis and prior to the
Effective Date and sixty-five percent (65%) of the net earnings of
Journal-Star, as shown on the financial statements of Journal-Star for the
period ending on the Closing Date (which, if requested, shall be provided
promptly to JLP), shall be paid to JLP within 60 days thereafter.
5.3 On or prior to the Closing Date, Lee and JLP shall cause
Journal-Star to terminate all contractual relationships between Journal-
Star and JLP including, without limitation, the Contract for Editorial
Services dated December 23, 1950, as amended, as of the Effective Date.
As consideration for the termination by JLP of its contractual
relationships with Journal-Star, Journal-Star will pay JLP the sum of
$750,000 at the Closing. JLP shall assume and discharge, and indemnify,
defend and hold Lee and Journal-Star harmless from, any and all
liabilities of JLP associated with any such terminated contracts which
arise or exist prior to or as of the Effective Date, or as a consequence
of the termination of such contracts. Within 10 days after the date of
this Agreement, JLP shall notify Lee, by written amendment of the
Disclosure Schedule, of other contractual agreements dealing with
editorial or news services and Journal-Star shall agree to assume all
assignable contracts which are terminable on notice of 60 days or less
without penalty of greater than $5000. Journal-Star shall indemnify,
defend and hold JLP harmless from any and all liabilities associated with
any such assumed contracts which relate to matters occurring after the
Effective Date.
5.4 Promptly after the Closing, Journal-Star shall employ all
JLP employees providing services under its Contract for Editorial Services
with Journal-Star who apply for and accept positions with Journal-Star
after the Effective Date at their present salary levels and on terms and
conditions comparable to those prevailing for similarly situated and
tenured employees of Journal-Star and in accordance with Lee's established
practices and policies for its employees. Except as provided in
subparagraph 5.6, Journal-Star shall assume and make available any
qualified plan pension benefits and severance obligations to such JLP
employees accepting employment with Journal-Star on the same basis as it
does for similarly situated Journal-Star employees. Except as expressly
assumed by Journal-Star in this subparagraph and subparagraph 5.6, JLP
shall assume and discharge, and shall indemnify, defend and hold Lee, JSAC
and Journal-Star harmless, from any and all liabilities or obligations
asserted by or otherwise related to such JLP employees, of whatever kind
or nature, arising out of any agreement, arrangement or circumstances
occurring or existing prior to their acceptance of employment with
Journal-Star; provided however, that Journal-Star shall assume and
discharge any severance obligation of JLP to Craig Swanson under his
August 6, 1992 employment contract with JLP upon his acceptance of
employment with Journal-Star.
5.5 At the Closing, JLP shall deliver to Journal-Star signed
resignations of its employees, nominees or agents who are officers or
directors of Journal-Star from all positions of employment or engagement
with Journal-Star, dated as of the Effective Date.
5.6 Journal-Star and JLP will take such actions and execute
such agreements as may be reasonably requested by Lee prior to, at or
following the Effective Date to transfer to JSAC all interests of JLP in
the Retirement Security Plan for Employees of Journal-Star and the
Journal-Star Investment Savings Plan (collectively the "Plans"), subject
only to the rights of the participants in such Plans. All JLP employees
shall receive credit under the Plans to be assigned to and assumed by JSAC
for all service with JLP and any predecessor entities. Journal-Star and
Lee shall indemnify, defend and hold JLP harmless from any liability or
obligation asserted against JLP arising out of the failure by Journal-Star
to comply with the provisions of the Plans.
5.7 After the Closing, Journal-Star will administer at its
expense JLP's group health insurance program for the benefit of former JLP
employees who, at or after the Closing, are or become eligible for
continuation health coverage under section 4980B of the Internal Revenue Code of
1986, as amended.
ARTICLE SIX
Conditions Precedent to Lee and JSAC's Obligations
The obligations of the Lee and JSAC to consummate the
transactions contemplated hereby are subject to the satisfaction at or
prior to the Closing of the following:
6.1 All findings required to be made under the Hart-Scott-
Rodino Act shall have been made, and any applicable waiting period
thereunder shall have expired.
6.2 The representations, warranties and covenants of Journal-
Star and JLP to the extent stated herein shall be true and correct in all
material respects at and as of the Closing Date as though made at and as
of the Closing Date.
6.3 JLP and Journal-Star have met all conditions and performed
and complied with all agreements, obligations, covenants and conditions
required by this Agreement to be met, performed or complied with by them
prior to or at the Closing.
6.4 There shall not have been since the date hereof, any
materially adverse change in the condition of Journal-Star (financial or
otherwise), its assets, liabilities or business.
6.5 JLP shall have furnished or caused to be furnished to Lee
on the Closing Date a certificate executed by JLP stating that the
representations, warranties and covenants of JLP contained in this
Agreement are, to the extent stated herein, true and correct in all
material respects on and as of the Closing Date, and that all of the
covenants required by this Agreement to be performed by JLP on or prior to
the Closing Date have been performed.
6.6 JLP shall have furnished or caused to be furnished to Lee
on the Closing Date a certificate executed by the President and the
General Manager of Journal-Star stating that the representations,
warranties and covenants of Journal-Star contained in this Agreement are,
to the extent stated herein, true and correct in all material respects on
and as of the Closing Date, and that all of the covenants required by this
Agreement to be performed by Journal-Star on or prior to the Closing Date
have been performed.
6.7 A Shareholders' Agreement shall have been entered into by
and between Lee and JLP in the form of Exhibit B attached hereto.
ARTICLE SEVEN
Condition Precedent to JLP and Journal-Star's Obligations
The obligations of JLP and Journal-Star to consummate the
transactions contemplated hereby are subject to satisfaction at or prior
to the Closing of the following:
7.1 All findings required to be made under the Hart-Scott-
Rodino Act shall have been made, and any applicable waiting period
thereunder shall have expired.
7.2 The representations, warranties and covenants of
Lee and JSAC to the extent stated herein shall be true and correct in all
material respects at and as of the time of Closing Date as though made at
and as of the Closing Date.
7.3 Lee and JSAC shall have met all conditions and conformed
and complied with all agreements, obligations and conditions required by
this Agreement to be met, performed or complied with by them prior to or
at the Closing.
7.4 There shall not have been since the date hereof,
any materially adverse change in the condition of Journal-Star (financial
or otherwise), its assets, liabilities or business.
7.5 Lee shall have furnished or caused to be furnished to JLP
on the Closing Date a certificate executed by Lee stating that the
representations, warranties and covenants of Lee, JSAC and, to its best
knowledge but without further inquiry Journal-Star, contained in this
Agreement are, to the extent stated herein, true and correct in all
material respects on and as of the Closing Date, and that all of the
covenants required by this Agreement to be performed by Lee or JSAC on or
prior to the Closing Date have been performed.
7.6 A Shareholders' Agreement shall have been entered into by
and between Lee and JLP in the form of Exhibit B attached hereto.
7.7 This Agreement and the transactions contemplated hereby
have been approved by a requisite vote of the JLP partners.
ARTICLE EIGHT
Closing and Effective Date
The closing of the transactions contemplated hereby (the
"Closing") shall take place at 10:00 A.M., C.S.T., on March 31, 1995 (the
"Closing Date") in the offices of Journal-Star in Lincoln, Nebraska or at
such other place (and at such other date and time) as Lee and JLP may
mutually agree. The effective date of the Merger (the "Effective Date")
shall be March 31, 1995 at 12:00 Midnight, or such other date as may be
fixed in the Merger Agreement by mutual agreement of Lee and JLP. In the
event that the Closing is delayed pending termination of any waiting
period imposed or extended under the Hart-Scott-Rodino Act, the Closing
shall take place on the last business day, and the Effective Date shall be
at 12:00 Midnight on the last calendar day, of the month in which said
waiting period is terminated.
ARTICLE NINE
Termination
This Agreement may be terminated at any time prior to the
Effective Date by:
(a) The mutual consent of Lee and JLP;
(b) Lee, if the conditions in Article Six have not been met;
or
(c) JLP, if the conditions in Article Seven have not been met.
ARTICLE TEN
Survival; Indemnification; Remedies
10.1 All representations, warranties, covenants and agreements
contained in this Agreement, or in any Schedule, Exhibit, certificate,
agreement, document or written statement delivered pursuant hereto, shall
survive (and not be affected in any respect by) the Closing, any
investigation conducted by any party hereto and any information which any
party may receive; provided, however, that the representations, warranties
and covenants shall expire and terminate and be of no further force or
effect on the date two (2) years following the Closing Date, except that
any written claim for breach thereof made prior to such expiration date
and delivered to the party against which such indemnification is sought
shall survive thereafter and as to any such claim such expiration will not
affect Lee's rights of indemnification under Section 10.2 hereof or JLP's
and Journal-Star's rights of indemnification under Section 10.3 hereof.
Notwithstanding the foregoing, the representations and warranties
contained in subparagraph 3.2(b) shall survive until the expiration of the
applicable statute of limitations.
10.2 JLP and Journal-Star, jointly and severally (hereinafter
collectively an "Indemnitor") will indemnify and hold harmless Lee, in
cash or Lee Common Stock valued at the average of the average of the high
and low trading prices for a share of such stock for the 10 days prior to
its full transfer to Lee, against:
(a) All damage or deficiency, aggregating in excess of
$10,000, resulting from any misrepresentation, breach of warranty, or
nonfulfillment of any undertaking on the part of Journal-Star or JLP under
this Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished to Lee under
the Agreement;
(b) All actions, suits, proceedings, demands, assessments,
judgments, costs, and expenses, including without limitation, reasonable
attorney fees, incident to any of the foregoing; and
(c) All payments by Lee at any time after the Effective Date,
in respect of any liability, obligation, or claim to which the foregoing
indemnity by JLP relates; provided that Lee has given JLP ten business
days' notice of any such payment, and JLP shall have failed to give such
assurances as Lee may reasonably require that such liability, obligation,
or claim shall be fully discharged.
10.3 Lee (hereinafter an "Indemnitor") will indemnify and hold
harmless Journal-Star and JLP against:
(a) All damage or deficiency, aggregating in excess of
$10,000, resulting from any misrepresentation, breach of warranty, or
nonfulfillment of any undertaking on the part of Lee or JSAC under this
Agreement or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished to Journal-
Star or JLP under the Agreement;
(b) All actions, suits, proceedings, demands, assessments,
judgments, costs, and expenses, including without limitation, reasonable
attorney fees, incident to any of the foregoing; and
(c) All payments by JLP at any time after the Effective Date,
in respect of any liability, obligation, or claim to which the foregoing
indemnity by Lee relates; provided that JLP has given Lee ten business
days' notice of any such payment, and Lee shall have failed to give such
assurances as JLP may reasonably require that such liability, obligation,
or claim shall be fully discharged.
10.4 In any legal or administrative proceeding to which a
party to this Agreement is a party and entitled to indemnification under
this Article (an "Indemnified Party"), such Indemnified Party will, at its
own expense, have the right to be represented by advisory counsel and
accountants and to be kept fully informed of such action, suit, or
proceeding at all stages thereof, whether or not so represented. The
Indemnitor will make available to the Indemnified Party and its attorneys
and accountants all books and records relating to such proceedings or
litigation, and the parties hereto agree to render to each other such
assistance as they may reasonably require of each other in order to ensure
the proper and adequate defense of any such action, suit, or proceeding.
10.5 In the event any action, suit, or proceeding is brought
against an Indemnified Party with respect to which an Indemnitor may have
liability under this Agreement, the action, suit, or proceedings may be
defended (including all proceedings on appeal or for review which counsel
for the Indemnitor shall deem appropriate) by counsel for the Indemnitor
at their expense.
10.6 Any claims for indemnification under this Article shall
be reduced by the amount of any insurance proceeds recovered by the
Indemnifying Party, other than such proceeds for which the Indemnifying
Party is the ultimate self-insurer, for amounts which the Indemnitor would
otherwise be liable.
10.7 Except as provided in Sections 11.2 and 11.3 hereof, an
Indemnified Party's rights to indemnification under this Article shall be
its exclusive remedy against an Indemnitor with respect to this Agreement.
ARTICLE ELEVEN
General Provisions
11.1 All representations, warranties, covenants and agreements
made by any party hereto in this Agreement or pursuant hereto shall be
true and correct in all material respects on, at and as of the Effective
Date, as if made on the Effective Date, and shall survive the Effective
Date, notwithstanding any investigation at any time made by or on behalf
of JLP, Journal-Star or Lee. No action or omission by JLP, Journal-Star
or Lee shall constitute a waiver of any of the covenants, warranties or
representations, unless such waiver shall be executed in writing by JLP,
Journal-Star or Lee, as the case may be.
11.2 The Journal-Star Common Stock to be transferred pursuant
to the terms of this Agreement is unique and not readily available on the
open market. For that reason and others, Lee will be seriously damaged
should the Merger not be consummated through no fault of its own, but for
breach of this Agreement by JLP or Journal-Star. Accordingly, it is
mutually agreed that Lee, in addition to all other legal remedies, shall
have the right to enforce the terms of this Agreement by a decree of
specific performance.
11.3 The Lee Common Stock to be transferred pursuant to the
terms of this Agreement and the tax-free nature of the reorganization to
JLP are unique and not readily available on the open market. For that
reason and others, JLP will be seriously damaged should the Merger not be
consummated through no fault of its own, but for breach of this Agreement
by JSAC or Lee. Accordingly, it is mutually agreed that JLP, in addition
to all other legal remedies, shall have the right to enforce the terms of
this Agreement by a decree of specific performance.
11.4 All necessary notices, demands and requests required or
permitted to be given under the provisions of this Agreement shall be
deemed duly given if mailed by Registered or Certified Mail, postage
prepaid, addressed as follows:
(a) If to Lee:
Richard D. Gottlieb, President
Lee Enterprises, Incorporated
400 Putnam Building
215 North Main Street
Davenport, IA 52801
Copy:
C. D. Waterman III, Esq.
Lane & Waterman
220 North Main Street
Suite 600
Davenport, IA 52801
(b) If to JLP or Journal-Star:
Mark L. Seacrest, President
Journal Corporation
6701 Everett Street
Lincoln, NE 68506
Copy:
Stephen E. Gehring, Esq.
Cline, Williams, Wright, Johnson & Oldfather
One Pacific Place
1125 South 103rd, Suite 720
Omaha, NE 68124
or such other addresses as the parties may from time to time designate.
11.5 This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their successors and assigns provided,
however, that no party hereto shall assign its rights or obligations under
this Agreement without the prior written consent of the other parties.
11.6 The parties shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement.
11.7 This Agreement shall be construed and enforced in
accordance with the laws of the State of Nebraska.
11.8 This Agreement may be signed in any number of counterparts
with the same effect as if the signature of each such counterpart were
upon the same instrument.
11.9 The headings of the Articles of this Agreement are
inserted as a matter of convenience and for reference only, and in no way
define, limit or describe the scope of this Agreement nor the intent of
any provision hereof.
11.10 This Agreement is the only agreement between the parties
hereto and contains all of the terms and conditions agreed upon with
respect to the subject matter hereof, and supersedes the agreement of Lee
and JLP dated February 6, 1995.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives or
officers on the day and year first above written.
LEE ENTERPRISES, INCORPORATED JOURNAL-STAR PRINTING CO.
By /s/ C.D. Waterman III By /s/ Mark L. Seacrest
C.D. Waterman III, Secretary Mark L. Seacrest, President
J-S ACQUISITION CORP. JOURNAL LIMITED PARTNERSHIP
BY JOURNAL CORPORATION, ITS
GENERAL PARTNER
By /s/ C.D. Waterman III By /s/ Mark L. Seacrest
C.D. Waterman III, Secretary Mark L. Seacrest, President
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER dated this 31st
day of March, 1995 by and between J-S ACQUISITION CORP., a Nebraska
corporation ("JSAC" or "Surviving Corporation") and JOURNAL-STAR PRINTING
CO., a Nebraska corporation ("Journal-Star"), (said two corporations being
herein sometimes collectively called the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, JSAC is a corporation duly organized and existing under
the laws of the State of Nebraska, with its principal office located in
Davenport, Scott County, Iowa; and
WHEREAS, Journal-Star is a corporation duly organized and
existing under the laws of the State of Nebraska, with its principal
office located in Lincoln, Lancaster County, Nebraska; and
WHEREAS, JSAC has an authorized capitalization
consisting of 1,000 shares of Common Stock, $1 par value ("JSAC Common
Stock"), all of which shares are validly issued and outstanding at the
date hereof and owned by Lee Enterprises, Incorporated, a Delaware
corporation ("Lee"); and
WHEREAS, Journal-Star has an authorized capitalization
consisting of 6,000 shares of Common Stock, $100 par value ("Journal-Star
Common Stock"), all of which shares are validly issued and outstanding at
the date hereof, 3,015 shares being owned by Journal Limited Partnership,
a Nebraska limited partnership ("JLP") and 2,085 shares being owned by
Lee; and
WHEREAS, the respective Boards of Directors of JSAC and Journal-
Star have determined that it is advisable that Journal-Star be merged into
JSAC on the terms and conditions hereinafter set forth;
NOW, THEREFORE, JSAC and Journal-Star do hereby agree that
Journal-Star shall be, on the Effective Date of the merger (as defined in
ARTICLE VI hereof), merged into JSAC, which shall be the Surviving
Corporation, and that the terms and conditions of such merger and the mode
of carrying it into effect shall be as follows:
ARTICLE I
Upon the Effective Date of the merger, Journal-Star shall be
merged into JSAC, the separate existence of Journal-Star shall cease and
JSAC shall continue in existence, and, without other transfer, succeed to
and possess all the properties, rights, privileges, immunities, powers,
and purposes, and shall be subject to all of the debts and liabilities,
obligations, restrictions, disabilities and duties, of each of the
Constituent Corporations, all without further act or deed.
If at any time the Surviving Corporation shall consider or be
advised that any further assignments, conveyances or assurances in law are
necessary or desirable to carry out the provisions hereof, the proper
officers and directors of the Constituent Corporations as of the Effective
Date of the merger shall execute and deliver any and all proper deeds,
assignments and assurances in law, and do all things necessary or proper
to carry out the provisions hereof.
ARTICLE II
The Articles of Incorporation of the Surviving Corporation in
effect on the Effective Date of the merger shall continue in full force
and effect until altered, amended or repealed as provided therein or as
provided by law, except that on the Effective Date of the merger the
Articles of Incorporation shall be amended by amending Article I to read
in its entirety as follows:
I. The name of the corporation is Journal-Star Printing Co.
ARTICLE III
The By-laws of the Surviving Corporation in effect on the
Effective Date of the merger shall continue in full force and effect until
altered, amended or repealed as provided therein or as provided by law.
ARTICLE IV
The directors and officers of the Surviving Corporation holding
office on the Effective Date of the merger shall continue to hold office
until removed as provided by law or until the election of their respective
successors.
ARTICLE V
Upon the Effective Date of the Merger:
(a) Each share of Journal-Star Common Stock outstanding
immediately prior to the merger and all rights in respect thereof, shall
forthwith cease to exist and be cancelled. There shall be delivered in
conversion and valuation of and exchange for each such share held by JLP
that number of shares of Common Stock of Lee (the "Lee Common Stock")
representing a value of $58,250,000, to be determined by dividing the
agreed value of $58,250,000 by the average of the average of the high and
low trading prices of Lee Common Stock on the New York Stock Exchange for
each of the five consecutive trading days ending on the final trading day
of the week prior to the week in which the closing of the merger occurs
(the "Average Price"); provided that the Average Price shall not be lower
than $33.375 nor higher than $35.375. Each certificate or certificates
theretofore representing a share or shares of Journal-Star Common Stock
held by JLP shall, upon JLP's presentation of such certificate or
certificates for surrender to the Surviving Corporation or its agents, be
exchanged for a certificate or certificates representing the whole shares
of fully paid and non-assessable Lee Common Stock to which JLP shall be
entitled upon the aforesaid basis of valuation, conversion, exchange and
distribution.
(b) No scrip or fractional share certificates of Lee Common
Stock will be issued and an outstanding fractional share interest will not
entitle the owner thereof to vote, to receive dividends or to any rights
of a shareholder with respect to such fractional interest. Instead,
Journal-Star Common Stock held by JLP shall receive only full shares
(rounded to the next nearest lower or higher full share).
ARTICLE VI
The merger shall become effective upon the later of the filing
in the office of the Secretary of State of the State of Nebraska of an
executed counterpart of Articles of Merger in form attached hereto as
provided by Section 21-2073 of the Nebraska Business Corporation Act or at
11:59 P.M. Central Standard Time on March 31, 1995. The Constituent
Corporations shall do all other acts and things as shall be necessary or
desirable in order to effectuate the merger.
ARTICLE VII
To the extent permitted by applicable law, Journal-Star and
JSAC, by mutual consent of their respective duly authorized officers, may
amend, modify and supplement this Agreement and Plan of Merger in such
manner as may be agreed upon by them in writing at any time before or
after approval or adoption thereof by the shareholders of Journal-Star or
of JSAC or both.
ARTICLE VIII
This Agreement and Plan of Merger may be abandoned at any time
before or after approval or adoption thereof by the shareholders of
Journal-Star or JSAC notwithstanding favorable action on the merger by the
shareholders of either or both Constituent Corporations, but not later
than the Effective Date of the merger, only by the mutual consent of the
Boards of Directors of Journal-Star and JSAC.
ARTICLE IX
This Agreement and Plan of Merger may be executed in
counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, JSAC and Journal-Star, pursuant to the
approval and authority duly given by resolutions adopted by their
respective Boards of Directors, have each caused this Agreement and Plan
of Merger to be executed by its President and its Secretary and its
corporate seal to be affixed.
JOURNAL-STAR PRINTING CO.
By /s/ Mark L. Seacrest
Mark L. Seacrest, President
By /s/ C.D. Waterman III
C.D. Waterman III, Secretary
J-S ACQUISITION CORP.
By /s/ Ronald L. Rickman
Ronald L. Rickman, President
By /s/ C.D. Waterman III
C.D. Waterman III, Secretary
STATE OF NEBRASKA )
) SS:
COUNTY OF LANCASTER )
On this 31st day of March, 1995, before me a Notary Public in and for
said county, personally appeared Mark L. Seacrest and C.D. Waterman III,
to me personally known, who being by me duly sworn, did say that they are
the President and Secretary, respectively, of JOURNAL-STAR PRINTING CO., a
Nebraska corporation, and that the foregoing Agreement and Plan of Merger
were signed on behalf of said corporation by authority of its Board of
Directors and the said President and Secretary as such officers
acknowledged the execution of said instrument to be the voluntary act and
deed of said corporation by it and by them voluntarily executed.
/s/
Notary Public in and for said
County and State
(NOTARIAL SEAL)
STATE OF NEBRASKA )
) SS:
COUNTY OF LANCASTER )
On this 31st day of March 1995, before me a Notary Public in and for
said county, personally appeared Ronald L. Rickman and C.D. Waterman III,
to me personally known, who being by me duly sworn, did say that they are
the President and Secretary, respectively, of J-S ACQUISITION CORP., a
Nebraska corporation, and that the foregoing Agreement and Plan of Merger
were signed on behalf of said corporation by authority of its Board of
Directors and the said President and Secretary acknowledged the execution
of said instrument to be the voluntary act and deed of said corporation by
it and by them voluntarily executed.
/s/
Notary Public in and for said
County and State
(NOTARIAL SEAL)
ARTICLES OF MERGER
OF
JOURNAL-STAR PRINTING CO.
(a Nebraska corporation)
INTO
J-S ACQUISITION CORP.
(a Nebraska corporation)
Pursuant to Section 21-2073 of the Nebraska Business Corporation
Act, the undersigned domestic corporations adopt the following Articles of
Merger for the purpose of merging them into one of such corporations:
First: The names of the undersigned corporations and
the states under the laws of which they are respectively organized are:
Name of Corporation State
Journal-Star Printing Co. Nebraska
J-S Acquisition Corp. Nebraska
Second: The name of the surviving corporation is J-S
Acquisition Corp., and it is to be governed by the laws of the State of
Nebraska. Upon the filing of these Articles of Merger the name of J-S
Acquisition Corp. will be changed to Journal-Star Printing Co.
Third: The Agreement and Plan of Merger annexed
hereto as Exhibit A was approved by the shareholders of J-S Acquisition
Corp. and Journal-Star Printing Co. in the manner prescribed by the
Nebraska Business Corporation Act.
Fourth: As to each of the undersigned corporations, the
number of shares outstanding is as follows:
Number of
Shares
Name of Corporation Outstanding
J-S Acquisition Corp. 1,000
Journal-Star Printing Co. 6,000
Each corporation had only one class of shares outstanding.
Fifth: As to each of the undersigned corporations,the
total number of shares voted for and against such Agreement
and Plan of Merger, respectively, are as follows:
Number Total Total
Name of Corporation of Shares Against For
J-S Acquisition Corp. 1,000 - 0 - 1,000
Journal-Star Printing Co. 6,000 - 0 - 6,000
Dated: March 31, 1995
JOURNAL-STAR PRINTING CO.
By /s/ Mark L. Seacrest
Mark L. Seacrest, President
By /s/ C.D. Waterman III
C.D. Waterman III, Secretary
J-S ACQUISITION CORP.
By /s/ Ronald L. Rickman
Ronald L. Rickman, President
By /s/ C.D. Waterman III
C.D. Waterman III, Secretary
STATE OF NEBRASKA )
) SS:
COUNTY OF LANCASTER )
On this 31st day of March, 1995, before me, the undersigned, a
Notary Public in and for said County and said State personally appeared
Mark L. Seacrest and C.D. Waterman III, to me personally known, who, being
by me duly sworn, did say that they are the President and Secretary,
respectively, of JOURNAL-STAR PRINTING CO., a Nebraska corporation, and
that the foregoing Articles of Merger were signed on behalf of said
corporation by authority of its Board of Directors; and that the said
President and Secretary as such officers acknowledged the execution of
said instrument to be the voluntary act and deed of said corporation, by
it and by them voluntarily executed.
/s/
Notary Public in and for said
County and State
(NOTARIAL SEAL)
STATE OF NEBRASKA )
) SS:
COUNTY OF LANCASTER )
On this 31st day of March, 1995, before me, the undersigned, a
Notary Public in and for said County and said State personally appeared
Ronald L. Rickman and C.D. Waterman III, to me personally known, who,
being by me duly sworn, did say that they are the President and Secretary,
respectively, of J-S ACQUISITION CORP., a Nebraska corporation, and that
the foregoing Articles of Merger were signed on behalf of said corporation
by authority of its Board of Directors; and that the said President and
Secretary as such officers acknowledged the execution of said instrument
to be the voluntary act and deed of said corporation, by it and by them
voluntarily executed.
/s/
Notary Public in and for said
County and State
(NOTARIAL SEAL)