SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT is entered into as
of this 27th day of February, 1995 by and between LEE ENTERPRISES,
INCORPORATED, a Delaware corporation ("Lee"), and JOURNAL LIMITED
PARTNERSHIP, a Nebraska limited partnership ("JLP"), for itself and as
agent and authorized representative for all partners of JLP (hereinafter
sometimes referred to as the "JLP Partners").
W I T N E S S E T H:
WHEREAS, Lee, J-S Acquisition Corp., a Nebraska corporation
("JSAC"), Journal-Star Printing Co., a Nebraska corporation ("Journal-
Star") and JLP have entered into a Plan and Agreement of Reorganization
(the "Agreement") dated as of February 27, 1995 providing for the merger
(the "Merger") of Journal-Star into JSAC, which is a wholly-owned
subsidiary of Lee; and
WHEREAS, JLP propose to enter into certain agreements with Lee
pursuant to this Shareholders' Agreement.
NOW, THEREFORE, Lee and JLP hereby agree as follows:
1. JLP agrees (i) not to dispose of any of shares of Journal-
Star prior to the Effective Date of the Merger, and (ii) subject to the
approval by a requisite vote of the JLP Partners, to vote all of its
shares of Journal-Star in favor of the Merger.
2. JLP agrees to join with Lee in taking all action necessary
to cause Journal-Star, its officers and its Board of Directors to complete
the Merger, subject to any rights which JLP or Journal-Star may have under
Article Nine of the Agreement to terminate the Merger.
3. (a) JLP understands that Lee, in transferring shares of Lee
Common Stock to JLP pursuant to the Agreement, is relying upon the
exemption contained in Section 4(2) of the Securities Act of 1933, as
amended (the "Act"). JLP acknowledges, represents, warrants and agrees
that the shares of Lee Common Stock to be delivered to it pursuant to the
Agreement have not been registered under the Act and are or will be
acquired by JLP for investment for its own account and not with a view to,
or for resale in connection with, the distribution or other disposition
thereof, and that JLP will not directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of the Lee Common Stock or any
portion thereof (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of any such stock) except in compliance with the
Act and the rules and regulations promulgated thereunder. Notwithstanding
the foregoing, Lee acknowledges that under the JLP Agreement of Limited
Partnership, a partner may require JLP to distribute to it, in kind,
assets of JLP (including Lee Common Stock) after the Merger. Lee agrees
to register the transfer of any shares of Lee Common Stock in connection
with such distribution subject to receipt from such JLP Partner of a
counterpart of this Shareholders' Agreement executed by such JLP Partner
(wherein it agrees to be bound by all the provisions of this Agreement)
and the opinion of counsel called for in subdivision 3(c)(ii) below.
(b) JLP acknowledges that Lee has made available to it, prior
to the execution of the Agreement, the same kind of information that would
be required to be set forth in the form of a registration statement under
the Act and any additional information necessary to verify the accuracy of
such information, including without limitation, the following:
(i) 10-K Report for the year ended September 30,
1994;
(ii) 10-Q Report for the quarter ended
December 31, 1994;
(iii) Proxy Statement dated
December 28, 1994; and
(iv) Annual Report to Shareholders
for the year 1994.
(c) JLP further understands that future sales or transfers of
Lee Common Stock will be restricted as a result of such unregistered
status, and that all certificates representing such shares will bear a
legend with respect thereto. Accordingly, all certificates representing
shares of Lee Common Stock to be delivered on the Closing Date and any
certificates subsequently issued in substitution therefor, shall bear a
legend in form and substance satisfactory to Lee's counsel to the effect
that the shares represented thereby have not been registered under the Act
and may not be transferred, sold, pledged, hypothecated or otherwise
disposed of unless:
(i) registered under the Act; or
(ii) in the opinion of counsel satisfactory to Lee,
registration thereof is not required.
(d) JLP acknowledges that the Lee Common Stock received
by it pursuant to the Merger must be held indefinitely unless it is
subsequently registered under the Act or an exemption from such
registration is available. JLP further acknowledges that Lee is under no
obligation to register the Lee Common Stock in a public offering except to
the extent provided in paragraph 4 hereof.
(e) JLP further acknowledges that it and the JLP
Partners have been advised of the meaning of Rule 144 (the "Rule") of the
Securities and Exchange Commission (the "Commission") promulgated under
the Act which permits limited resale of "restricted securities" as defined
by such Rule (such as the Lee Common Stock to be delivered pursuant to the
Agreement) subject to the satisfaction of certain conditions, including,
among other things: the availability of certain current public information
about Lee, the resale occurring not less than two years after the purchase
and payment for the security to be sold, the sale being effected in
accordance with a "broker's transaction" within the meaning of Section
4(4) of the Act and the number of shares being sold during any three-month
period not exceeding specified limitations.
(f) Lee hereby undertakes to use its best efforts to
file such reports with the Commission pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 or otherwise to satisfy the current
public information requirement of the Rule. JLP and the JLP Partners
acknowledge that although the Rule as adopted may not be the exclusive
means provided for the public sale of the Lee Common Stock other than in
an offering registered under the Act, the staff of the Commission has
expressed its opinion that persons proposing to sell "restricted
securities" other than in a registered offering and other than pursuant to
the Rule will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales and that
such persons and the brokers and other persons who participate in the
transaction do so at their own risk.
(g) JLP agrees that it shall transmit to Lee, not less
than five business days prior to transmission to the Commission, (i) a
copy of the "Notice of Proposed Sale of Securities Pursuant to Rule 144"
and any other material required to be filed with the Commission by
subparagraph (h) of the Rule, (ii) an opinion of counsel satisfactory to
Lee to the effect that the proposed sale is one which will be made under
the Rule, (iii) a statement from JLP's broker evidencing compliance by JLP
with Rule 144 and the "broker's transaction" exemption in Section 4(4) of
the Securities Exchange Act of 1934, and (iv) a copy of any questionnaire
or other document delivered by JLP to such broker with respect to such
sale.
4. (a) In the event that Lee during the 24-month period
following the Effective Date files a registration statement under the Act
on Forms S-1 or S-3, or any later substituted equivalent of such Forms,
relating to an offer of its securities, Lee shall give JLP written notice
of the proposed filing at least 30 days in advance thereof and if, within
10 days after the giving of such notice, Lee has received written notice
from JLP that it wishes to include shares of Lee Common Stock in such
registration statement for sale thereunder, and the inclusion thereof is
acceptable to the principal underwriter of the shares proposed to be
offered, then Lee will cause such shares to be included in such
registration statement. JLP and the JLP Partners acknowledge that they
have been informed that Lee may in the future grant similar so-called
"piggy-back" rights to parties to subsequent mergers and that in
determining whether to include in a registration statement referred to in
this subparagraph shares desired to be offered by JLP, the principal
underwriter may take into account shares desired to be offered by other
parties to such mergers and, in its sole discretion, limit the number of
shares offered to be sold by JLP. Lee agrees to use its best efforts to
effect any secondary offering in a manner which equalizes any outstanding
registration commitments to third parties, including JLP.
(b) In addition to the registration rights provided for
in subparagraph 4(a) above, after receipt of a written request by JLP or
holders of more than 50% of the Lee Common Stock received by JLP in the
Merger delivered at any time after the Merger, Lee shall, one time and
one time only, use its best efforts to prepare, file and have effective
within ninety (90) days a registration statement under the Act with
respect to the shares of Lee Common Stock received by JLP. Such
registration statement shall provide for the sale of the shares covered
thereby from time to time on the New York Stock Exchange (the "NYSE"), or
otherwise, at prices current at the time of sale and on terms then
obtainable. Lee shall not have performed its foregoing obligation to
register unless all the shares of Lee Common Stock requested to be
registered hereunder are registered and included in such offering. Lee
shall have the right to approve any underwriter or underwriters of such
shares, which approval shall not be unreasonably withheld. The
registration rights granted herein shall be personal to JLP and may not be
transferred by JLP except as provided herein.
(c) The obligations of Lee under this paragraph 4 shall
be subject to the following additional terms and conditions:
(i) Lee shall be obligated to register shares of the
Lee Common Stock and list the same on the NYSE
except to the extent that counsel for Lee is
then of the opinion that registration or listing
of said shares is not required under the
provisions of the Act other than the Rule;
(ii) Lee shall not be required to include any shares
of the Lee Common Stock owned by JLP in any
registration statement filed by Lee covering any
of its securities which are not proposed to be
offered and sold thereunder as soon as
practicable upon the effectiveness thereof;
(iii) Lee shall keep the registration statement
effective from its effective date for as long
as JLP shall own the Lee Common Stock covered
thereby ; and
(iv) JLP, when making said request and desiring to
sell shares of Lee Common Stock, shall promptly
supply Lee with all information which Lee
requests for inclusion in the registration
statement.
(d) Lee shall pay the fees of its counsel and auditors
in connection with the expenses of registration of shares of Lee Common
Stock under this paragraph 4, together with the Commission's costs of
registration, NYSE listing and printing. JLP shall pay all other fees and
expenses, including without limitation all fees, costs and expenses of
counsel for JLP; and the underwriting discounts and commissions
attributable to the Lee Common Stock sold by JLP. JLP shall also pay its
proportionate share of the fees, expenses, underwriting discounts and
commissions applicable to its shares included under a registration
statement under subparagraph 4(a) hereof.
(e) Lee shall indemnify and hold harmless JLP and any
underwriter (as defined in the Act) for JLP and each person, if any, who
controls JLP or underwriter within the meaning of the Act against any
losses, claims, damages or liabilities, joint or several, to which any of
such persons may be subject, under the Act or otherwise, and to reimburse
any of such persons for any legal or other expenses incurred in connection
with investigating or defending against any losses, claims, damages or
liabilities, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement of a material
fact contained in any registration statement under which such shares of
Lee Common Stock were registered under the Act pursuant to this paragraph
4, any prospectus contained therein, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities arise out of or are based upon
information furnished to Lee in writing by JLP or by any underwriter for
JLP expressly for use therein.
(f) JLP shall indemnify and hold harmless Lee, each of
its directors, each of its officers who have signed any registration
statement, and each person, if any, who controls Lee within the meaning of
the Act, against any losses, claims, damages or liabilities, joint or
several, to which Lee or any such director, officer or controlling person
may become subject under the Act or otherwise, and to reimburse any such
persons for any legal or other expenses incurred in connection with
investigating or defending against any such losses, claims, damages or
liabilities, insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or alleged untrue statement of a material
fact contained in any registration statement under which any of the shares
of Lee Common Stock were, pursuant to this paragraph 4, registered under
the Act, any prospectus contained therein, or any amendment or supplement
thereto, or arise out of, or are based upon, any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; in each case to
the extent, but only to the extent, that such untrue statement, or alleged
untrue statement, or omission, or alleged omission, was so made in
reliance upon and in conformity with, written information furnished by JLP
or any underwriter acting for JLP specifically for use in the preparation
of such registration statement or prospectus contained therein or
amendment or supplement thereto.
(g) Lee shall not be liable for failure to procure the
effectiveness of a registration statement if it exerts its best efforts to
have such registration statement become effective.
5. Terms not specifically defined herein shall have the
meaning, if any, ascribed in the Agreement.
6. All necessary notices, demands and requests required or
permitted to be given under the provisions of this Shareholders' Agreement
shall be deemed duly given if mailed by Registered or Certified Mail,
postage prepaid, addressed as follows:
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
If to JLP or JLP Partners:
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.
7. This Shareholders' 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 Shareholders' Agreement without the prior written
consent of the other party.
8. The parties shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Shareholders' Agreement.
9. This Shareholders' Agreement shall be construed and
enforced in accordance with the laws of the State of Nebraska.
10. This Shareholders' 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. This Shareholders' Agreement is the only agreement
between the parties hereto with respect to the subject matter hereof and
contains all of the terms and conditions agreed upon with respect thereto,
and supersedes the agreement of Lee and JLP dated February 6, 1995.
IN WITNESS WHEREOF, the undersigned have executed this
Shareholders' Agreement on the date first above written.
LEE ENTERPRISES, INCORPORATED
By /s/ C.D. Waterman III
C. D. Waterman III, Secretary
JOURNAL LIMITED PARTNERSHIP
By Journal Corporation
By /s/ Mark L. Seacrest
Mark L. Seacrest, President