Note 12
Related Party Transactions
The Company entered into a two-year agreement on May 20, 1997, to employ
its new President and Chief Operating Officer. Under the terms of the agreement,
the Company agreed to reimburse the officer for legal costs in defending a
lawsuit from the officer's former employer. The case was settled and the total
cost to the Company was charged to compensation expense in 1997.
Watermark originally entered into a republishing and distribution agreement
with a UK company (the Distributor) which provided the Distributor with
exclusive distribution rights of Watermark's products in defined territories.
The Chief Executive Officer of the Distributor is the brother of Xxxxxxxxx's
then President and Chief Executive Officer. During 1995, Xxxxxxxxx elected to
purchase the portion of the Distributor's business related to selling
Watermark's products at a negotiated price of $2.5 million that is included in
merger and other costs in 1995.
