<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-37603
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
SUBJECT TO COMPLETION, DATED OCTOBER 24, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 24, 1997
$200,000,000
KNIGHT-RIDDER, INC.
$100,000,000 % NOTES DUE NOVEMBER , 2007
$100,000,000 % DEBENTURES DUE NOVEMBER , 2027
------------------------
Interest on the Notes and Debentures is payable on November and May of
each year, commencing May , 1998. The Notes and Debentures are redeemable, in
whole or in part, at any time at the option of the Company at redemption prices
equal to the greater of (i) 100% of the principal amount of such Notes and/or
Debentures or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (not including the portion of any
such payments of interest accrued as of the date of redemption) discounted to
the date of redemption on a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Adjusted Treasury Rate (as defined herein), plus
in each case accrued interest thereon to the date of redemption. The Notes and
Debentures will not be subject to any sinking fund. The Notes and Debentures
will each be represented by one or more Global Notes registered in the name of
the nominee of DTC. Beneficial interests in the Global Notes will be shown on,
and transfers thereof will be effected only through, records maintained by DTC
and its Participants. Except as described herein, Notes and Debentures in
definitive form will not be issued. The Notes and Debentures will be issued only
in denominations of $1,000 and integral multiples thereof. See "Description of
Notes and Debentures".
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC
OFFERING UNDERWRITING PROCEEDS TO
PRICE(1) DISCOUNT(2) COMPANY(1)(3)
-------------- ------------ -------------
<S> <C> <C> <C>
Per Note......................................... % % %
Total............................................ $ $ $
Per Debenture.................................... % % %
Total............................................ $ $ $
</TABLE>
- ---------------
(1) Plus accrued interest, if any, from November , 1997.
(2) The Company has agreed to indemnify Goldman, Sachs & Co. against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deduction of expenses payable by the Company estimated at $300,000.
------------------------
The Notes and Debentures offered hereby are offered by Goldman, Sachs &
Co., as specified herein, subject to receipt and acceptance by them and subject
to their right to reject any order in whole or in part. It is expected that the
Notes and Debentures will be ready for delivery in book-entry form only through
the facilities of DTC in New York, New York, on or about November , 1997,
against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
------------------------
The date of this Prospectus Supplement is October , 1997.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING, INCLUDING GOLDMAN, SACHS &
CO., MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE NOTES AND DEBENTURES, INCLUDING OVER-ALLOTMENT, STABILIZING AND
SHORT-COVERING TRANSACTIONS IN SUCH SECURITIES, AND THE IMPOSITION OF A PENALTY
BID, IN CONNECTION WITH THE OFFERING. SUCH ACTIVITIES MAY BE DISCONTINUED AT ANY
TIME. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
FORWARD LOOKING STATEMENTS
Certain statements made in or incorporated by reference into this
Prospectus Supplement and Prospectus relating to plans, conditions, objectives,
and economic performance go beyond historical information and may provide an
indication of future financial condition or results of operations. To that
extent, they are forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and each
of them is therefore subject to risks, uncertainties, and assumptions that could
cause actual results to differ from those in the forward-looking statements.
Should one or more of these risks or uncertainties materialize, or should the
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated or projected.
THE COMPANY
The Company is an information, advertising and communications company
primarily engaged in newspaper publishing in the United States. The Company is
also involved in newsprint manufacturing through two partnerships. In addition,
although the Company also provides archival information services, the Company
has entered into an agreement to sell this business thereby enabling the Company
to focus on its core newspaper business. See "Recent Developments".
The Company publishes 36 daily newspapers, including the San Jose Mercury
News, The Miami Herald, The Philadelphia Inquirer and Philadelphia Daily News,
the Detroit Free Press, the Kansas City Star and the Ft. Worth Star-Telegram,
and has daily newspaper printing plants in 36 cities located in 17 states. News,
advertising and other information from the Company reach more than 9.8 million
readers daily and 13.4 million readers on Sunday, and the Company's internet
services receive more than 400,000 page views per day. Its newspapers are
dedicated to serving their respective communities with high quality and
independent journalism. The Company has won 64 Pulitzer prizes, including 20 in
the past ten years.
RECENT DEVELOPMENTS
The Company has changed its focus over the last two years to concentrate on
its core newspaper business. Since October 1995, the Company has purchased
several newspapers and moved to sell substantially all of its non-newspaper
holdings and several non-strategic newspapers in non-core markets. The Company
is using the sale proceeds from such asset sales to pay down debt and repurchase
Common Stock.
- In October 1995, the Company purchased a group of daily newspapers now
known as Contra Costa Newspapers, Inc. ("Contra Costa") in the East Bay
area of Northern California near the headquarters of the Company's San
Jose newspaper for approximately $360 million.
- In April 1995, the Company sold the Journal of Commerce for approximately
$115 million.
- In July 1996, the Company sold Knight-Ridder Financial, Inc. for
approximately $275 million.
- In January 1997, the Company sold its interest in all but one of its
cable systems to Tele-Communications, Inc., the joint owner of these
systems, for approximately $370 million.
S-2
<PAGE> 3
- In May 1997, the Company acquired four newspapers located in Belleville,
Illinois, Kansas City, Missouri, Wilkes-Barre, Pennsylvania and Fort
Worth/Arlington, Texas from The Walt Disney Company ("Disney") for
1,754,930 shares of the Company's Series B Preferred Stock, which are
convertible into 17,549,300 shares of its Common Stock. In addition, at
the time of the acquisition, the acquired newspapers had approximately
$990 million of bank debt which was subsequently guaranteed by the
Company.
- On June 20, 1997, the Company announced its plans to sell five of its
smaller newspapers that operate in highly competitive markets: The
Press-Telegram based in Long Beach, California, The Post-Tribune based in
Gary, Indiana and a package of three other papers made up of The News
based in Boca Raton, Florida, The Union-Recorder based in Milledgeville,
Georgia, and The Newberry Observer based in Newberry, South Carolina. In
October 1997, the Company entered into an agreement to sell The
Post-Tribune to Hollinger International, Inc. The Company hopes to
complete the sale of all of these newspaper properties by early 1998.
- In August 1997, the Company and The E.W. Scripps Company ("Scripps")
exchanged the Company's Daily Camera in Boulder, Colorado for two Scripps
newspapers in California, The Monterey County Herald and the
Telegram-Tribune in San Luis Obispo, increasing the Company's presence in
central and northern California.
- The Company has entered into an agreement dated October 1, 1997 to sell
Knight-Ridder Information, Inc. ("KRII"), the archival information
services subsidiary of its Business Information Services ("BIS") Division
and largest non-newspaper asset, to M.A.I.D. plc ("M.A.I.D."), a
London-based supplier of business information to business professionals
worldwide, for approximately $420 million. Consummation of this sale is
subject to the satisfaction of certain conditions including approval by
the stockholders of M.A.I.D., the admission by the London Stock Exchange
of M.A.I.D. shares to be issued in connection with the transaction and
the receipt by M.A.I.D. of funds under its debt and equity financing
arrangements to pay the purchase price. It is anticipated that this
transaction will be consummated in November 1997.
The Company has improved performance in its newspaper division, as
evidenced by an increase of operating margins from 12.5% in 1995 to 16.0% in
1996.
THIRD QUARTER FINANCIAL PERFORMANCE
In the third quarter of 1997, the Company reported earnings of $.69 per
share, including a $.23 per share gain on the newspaper swap with Scripps.
Excluding that gain, the Company earned $.46 per share, up 12.2% from the $.41
earnings per share reported on continuing operations in the third quarter of
1996. For the first nine months of 1997, earnings per share, also excluding
one-time gains, were $1.58, up from $1.06 for the first nine months of 1996.
S-3
<PAGE> 4
The Company's net income from continuing operations for the third quarter
of 1997 was $74.0 million, an increase of $34.3 million, or 86.4%, from the same
period in 1996. Excluding the gain on the Scripps swap, net income from
continuing operations for the third quarter of 1997 increased $9.8 million or
24.7%. During the third quarter of 1997, total operating revenue rose 29.8% to
$755.4 million and operating income rose $34.4 million or 46.1% as a result of
strong advertising revenue and lower newsprint costs.
On a pro forma basis, giving effect to the acquisition of the four Disney
newspapers and the Scripps exchange as if they had occured on January 1, 1996,
the Company's operating revenue for the third quarter of 1997 increased 6.7%
over the third quarter of 1996 and operating profit was up $13.2 million or
14.0% over the same period in 1996.
STOCK REPURCHASE PROGRAM
The Company has continued its stock repurchase program during 1997. The
Company has repurchased approximately 9.3 million shares of its Common Stock
through the nine months ended September 28, 1997 and plans to continue its
repurchase program through the first quarter of 1998. During 1997 and through
the first quarter of 1998 the Company expects to repurchase at least 15 million
shares of its Common Stock.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Notes and Debentures
will be used to reduce commercial paper borrowings and for general corporate
purposes. The commercial paper bears interest at rates ranging from 5.70% to
5.62% with maturities to January 14, 1998.
S-4
<PAGE> 5
CAPITALIZATION
The following table sets forth the capitalization of the Company as at June
29, 1997 and as adjusted to give effect to the sale of the Notes and the
Debentures offered hereby and the initial application of the net proceeds
therefrom. See "Use of Proceeds".
<TABLE>
<CAPTION>
JUNE 29, 1997
--------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
LONG-TERM DEBT AND OTHER LONG-TERM OBLIGATIONS:
Commercial paper................................................ $ 379,280 $ 179,580
6.3% Senior Notes maturing December 2005........................ 100,000 100,000
% Senior Notes due November 2007.............................. -- 100,000
9.875% Debentures due April 2009................................ 200,000 200,000
% Senior Debentures due November 2027......................... -- 100,000
Notes payable to banks due September 1999(1).................... 990,000 990,000
Other long-term obligations at 8.5%, net of current portion..... 160,000 160,000
---------- ----------
Total long-term debt and other long-term obligations.... $1,829,280 $ 1,829,580
========== ==========
SHAREHOLDERS' EQUITY
Series A Preferred Stock ($1 par value, 1,500,000 shares
authorized, none issued)..................................... -- --
Series B Preferred Stock ($1 par value, 2,000,000 shares
authorized, 1,754,930 issued)................................ 1,755 1,755
Common Stock ($.02 1/12 par value, 250,000,000 shares
authorized; 88,007,596 issued)(2)............................ 1,833 1,833
Additional capital.............................................. 942,800 942,800
Retained earnings............................................... 813,780 813,780
Unrealized gain on investments.................................. 3,510 3,510
---------- ----------
Total shareholders' equity.............................. 1,763,678 1,763,678
---------- ----------
Total capitalization............................... $3,592,958 $ 3,593,258
========== ==========
</TABLE>
- ---------------
(1) Bears interest at the London Interbank Offered Rate plus 27.5 basis points
which at June 29, 1997 was 5.96%.
(2) Excludes approximately (i) 9,636,041 shares of Common Stock reserved for
issuance under the Company's stock option and stock purchase plans, of which
5,976,383 shares were subject to outstanding options at June 29, 1997 and
(ii) 17,549,300 shares of Common Stock issuable upon conversion of the
Series B Preferred Stock.
S-5
<PAGE> 6
SELECTED FINANCIAL INFORMATION
The following selected financial information has been derived from the
Company's Annual Report on Form 10-K for the fiscal year ended December 29,
1996, and its Quarterly Report on Form 10-Q for the six months ended June 29,
1997, each of which is available as described under the heading "Incorporation
of Certain Documents by Reference" in the Prospectus attached to this Prospectus
Supplement and is qualified in its entirety by and should be read in conjunction
with the consolidated financial statements, related information, and other
financial information set forth therein. The financial data for the six months
ended June 30, 1996 and the six months ended June 29, 1997 are derived from
financial statements which include all adjustments, consisting of normal
recurring accruals, which the Company considers necessary for a fair
presentation of its financial position and results of operations for these
periods. Operating results for the six months ended June 29, 1997 are not
necessarily indicative of results that may be expected for the entire year
ending December 28, 1997.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
-------------------------------------------------------------- -----------------------
DEC. 27, DEC. 26, DEC. 25, DEC. 31, DEC. 29, JUNE 30, JUNE 29,
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Operating Revenue
Advertising.................. $1,444,144 $1,481,631 $1,583,373 $1,672,970 $1,793,424 $ 873,292 $1,000,614
Circulation.................. 460,014 474,420 484,581 495,315 501,826 252,691 266,471
Other........................ 39,932 56,772 80,530 97,053 97,839 48,878 57,208
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Operating Revenue........ $1,944,090 $2,012,823 $2,148,484 $2,265,338 $2,393,089 $1,174,861 $1,324,293
========== ========== ========== ========== ========== ========== ==========
Total Operating Income......... $ 256,442 $ 261,452 $ 309,390 $ 229,659 $ 334,652 $ 128,611 $ 235,814
========== ========== ========== ========== ========== ========== ==========
Income from Continuing
Operations................... $ 135,456 $ 136,755 $ 159,883 $ 110,710 $ 186,276 $ 64,604 $ 236,768
Net gain on sale of
discontinued BIS
operations(1)(3)............. 53,765 86,255
Income/(Loss) from discontinued
BIS operations(1)............ 10,630 11,334 11,017 2,907 (4,658) 1,266 (738)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative effect
of changes in accounting
principles................... 146,086 148,089 170,900 167,382 267,873 65,870 236,030
Cumulative effect of changes in
accounting principles........ (105,200) (7,320)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Income(3).................. $ 40,886 $ 148,089 $ 170,900 $ 160,062 $ 267,873 $ 65,870 $ 236,030
========== ========== ========== ========== ========== ========== ==========
</TABLE>
- ---------------
Continued.
S-6
<PAGE> 7
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SIX MONTHS ENDED
-------------------------------------------------------------- -----------------------
DEC. 27, DEC. 26, DEC. 25, DEC. 31, DEC. 29, JUNE 30, JUNE 29,
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARES(4)
Income from continuing
operations................. $ 1.22 $ 1.24 $ 1.47 $ 1.10 $ 1.91 $ 0.65 $ 2.42
Net gain on sale of
discontinued BIS
operations(1)(3)........... 0.54 0.89
Income/(Loss) from
discontinued BIS
operations(1).............. 0.10 0.10 0.10 0.03 (0.05) 0.01 (0.01)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative
effect of changes in
accounting principles...... 1.32 1.34 1.57 1.67 2.75 0.66 2.41
Cumulative effect of changes
in accounting
principles(2).............. (0.95) (0.07)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Income(3).................. $ 0.37 $ 1.34 $ 1.57 $ 1.60 $ 2.75 $ 0.66 $ 2.41
========== ========== ========== ========== ========== ========== ==========
Ratio of Earnings to Fixed
Charges(5)................... 3.8 4.4 5.2 3.2 4.0 2.9 10.7
BALANCE SHEET DATA (AT PERIOD
END):
Working Capital.............. $ 55,669 $ (5,180) $ 2,163 $ 65,280 $ 21,157 $ 72,861 $ 51,584
Total Assets................. 2,431,307 2,399,067 2,414,520 2,966,998 2,863,791 3,004,514 4,744,290
Total Debt(6)................ 560,245 451,075 411,504 1,013,850 821,335 1,054,056 1,829,280
Shareholders' Equity(6)(7)... $1,181,812 $1,243,169 $1,224,654 $1,110,970 $1,131,508 $1,095,810 $1,763,678
</TABLE>
- ---------------
(1) On October 1, 1997, the Company entered into an agreement to sell KRII, the
archival information services subsidiary of the Company's BIS Division, to
M.A.I.D., a London-based supplier of business information to business
professionals worldwide, for approximately $420 million. On April 4, 1997
when the Company announced its intention to divest KRII, the announcement
resulted in BIS Division (except Technimetrics Inc., the operations of which
are not material) being reclassified as a discontinued operation. See
"Recent Developments".
(2) For 1992, the cumulative effect of changes in accounting principles
represents adjustments from the implementation of FAS 109 -- Accounting for
Income Taxes and FAS 106 -- Accounting for Postretirement Benefits Other
Than Pensions. For 1995, the cumulative effect of changes in accounting
principles represents adjustments from the implementation of FAS
116 -- Accounting for Contributions Received and Contributions Made.
(3) Net income in 1995 includes the gain from the sale of the Journal of
Commerce. Net income in 1996 includes gains from the sale of Knight-Ridder
Financial, Inc. and from the sale of the Company's holdings in Netscape
Communications Corporation net of adjustments in the carrying value of
certain other investments. Net income for the six months ended June 29, 1997
includes the gain from the sale of most of the Company's cable investments.
(4) All share information has been restated to reflect the two-for-one stock
split in the form of a 100% stock dividend declared in July 1996.
(5) The ratio of earnings to fixed charges is computed by dividing earnings (as
adjusted to remove fixed charges and undistributed equity income from
unconsolidated subsidiaries) by fixed charges for the period. Fixed charges
include interest on debt (before capitalized interest), the interest
component of rental expense, the proportionate share of interest expense on
guaranteed debt of certain equity method investees and on debt of 50%-owned
companies.
(6) The Company incurred indebtedness to finance its $360 million purchase of
Contra Costa in October 1995 and to finance repurchases of its Common Stock.
Repurchases in market transactions approximated (i) 1.5 million shares at a
cost of approximately $40.7 million in
S-7
<PAGE> 8
1993, (ii) 5.0 million shares at a cost of approximately $137.0 million in
1994, (iii) 11.5 million shares at a cost of approximately $319.4 million in
1995, (iv) 6.2 million shares at a cost of approximately $221.8 million in
1996 (2.1 million shares of which were repurchased at a cost of
approximately $74.4 million during the six months ended June 30, 1996) and
(v) 6.5 million shares at a cost of approximately $264 million for the six
months ended June 29, 1997.
(7) The decline in shareholders' equity in 1994 and 1995 resulted from the
repurchases of Common Stock by the Company referred to in note (6) above.
S-8
<PAGE> 9
DESCRIPTION OF NOTES AND DEBENTURES
The % Notes due November , 2007 (the "Notes") and % Debentures due
November , 2027 (the "Debentures") are each a series of Debt Securities (as
described in the accompanying Prospectus to which this Prospectus Supplement
relates as "Offered Debt Securities"). The following description of the
particular terms of the Notes and Debentures offered hereby supplements and, to
the extent inconsistent therewith, replaces the description of the general terms
and provisions of the Debt Securities set forth in the accompanying Prospectus,
to which reference is hereby made. Capitalized terms used herein and not defined
herein shall have the meanings given to them in the accompanying Prospectus or
in the Indenture referred to herein.
GENERAL
The Notes and Debentures will be issued under an indenture, dated as of
November , 1997 (the "Indenture"), between the Company and The Chase Manhattan
Bank, as trustee (the "Trustee"), and will each be limited to $100,000,000
aggregate principal amount. The Notes will mature on November , 2007. The
Debentures will mature on November , 2027. The Notes and Debentures will be
issued only in registered form in denominations of $1,000 and integral multiples
thereof.
The Notes and Debentures will not be subject to any sinking fund.
The Notes and Debentures will bear interest at the respective rates set
forth on the cover page of this Prospectus Supplement from November , 1997, or
the most recent interest payment date to which interest has been paid or
provided for, payable semi-annually on November and May of each year,
commencing May , 1998, to persons in whose names the Notes and Debentures are
registered at the close of business on the next preceding October or April ,
respectively, as applicable.
So long as the Notes and Debentures are each represented by a global
certificate, the interest payable on the Notes and Debentures will be paid to
Cede & Co., the nominee of DTC, as Depository (the "Depository"), or its
registered assigns as the registered owner of the global certificate, by wire
transfer of immediately available funds on each of the applicable interest
payment dates, not later than 2:30 p.m. Eastern Standard Time. If either the
Notes or Debentures are no longer represented by a global certificate, payment
of interest may, at the option of the Company, be made by check mailed to the
address of the person entitled thereto. No service charge will be made for any
transfer or exchange of Notes and Debentures but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
OPTIONAL REDEMPTION
The Notes and Debentures are redeemable, in whole or in part, at any time
at the option of the Company at redemption prices equal to the greater of (i)
100% of the principal amount of such Notes and/or Debentures or (ii) as
determined by a Reference Treasury Dealer (as defined herein), the sum of the
present values of the remaining scheduled payments of principal and interest
thereon (not including the portion of any such payments of interest accrued as
of the date of redemption) discounted to the date of redemption on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate, plus in each case accrued interest thereon to the date
of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.15%.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes and Debentures to be redeemed that would be
utilized, at the time of selection and in accordance
S-9
<PAGE> 10
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such Notes and
Debentures.
"Comparable Treasury Price" means, with respect to any redemption date, (A)
the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such Treasury
Reference Dealer at 5:00 p.m. (New York City time) on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means Goldman, Sachs & Co. and their respective
successors, provided, however, that if the foregoing shall cease to be a primary
U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the Notes and Debentures to
be redeemed.
Unless the Company defaults in payment of the redemption price, on and
after the redemption date interest will cease to accrue on the Notes and
Debentures or portions thereof called for redemption.
BOOK-ENTRY SYSTEM
Upon issuance, the Notes and Debentures will each be represented by one or
more global certificates (a "Global Note"). Each such Global Note will be
deposited with, or on behalf of, the Depository and registered in the name of
Cede & Co., the nominee of the Depository.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company organized under the Banking Law of the State of
New York, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depository was created to hold securities of its participating organizations
("Participants") and to facilitate the clearance and settlement of securities
transactions, such as transfers and pledges, among its Participants through
electronic book-entry changes in accounts of the Participants, thereby
eliminating the need for physical movement of securities certificates. The
Depository's Participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depository. The Depository is for example
owned by the New York Stock Exchange, Inc., the American Stock Exchange, Inc.
and the National Association of Securities Dealers, Inc. Access to the
Depository's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly. The rules
applicable to the Depository and its Participants are on file with the
Securities and Exchange Commission.
Ownership of beneficial interests in the Notes and Debentures will be
limited to Participants or persons that may hold interests through Participants.
The Depository has advised the Company that upon the issuance of the Global Note
representing the Notes or Debentures, the Depository will credit, on its
book-entry registration and transfer system, the Participants' accounts with the
respective principal amounts of the Notes and/or Debentures, as the case may be,
beneficially owned by such Participants. Ownership of beneficial interests in
such Global Note will be shown on, and the transfer of such ownership interests
will be effected only through, records maintained by the
S-10
<PAGE> 11
Depository (with respect to interests of Participants) and on the records of
Participants (with respect to interests of persons holding through
Participants). The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability of certain persons to own, transfer
or pledge beneficial interests in the Global Note.
So long as the Depository, or its nominee, is the registered owner of a
Global Note, the Depository or its nominee, as the case may be, will be
considered the sole owner or Holder of the Notes and/or Debentures, as the case
may be, represented by such Global Note for all purposes under the Indenture.
Except as provided herein, owners of beneficial interests in a Global Note will
not be entitled to have the Notes and/or Debentures, as the case may be,
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery of the Notes and Debentures in
definitive form and will not be considered the owners or Holders thereof under
the Indenture. Accordingly, each person owning a beneficial interest in a Global
Note must rely on the procedures of the Depository and, if such person is not a
Participant, on the procedures of the Participant through which such person owns
its interest, to exercise any rights of a Holder under the Indenture. The
Company understands that under existing industry practices, in the event that
the Company requests any action of Holders or that an owner of a beneficial
interest in such a Global Note desires to give or take any action which a Holder
is entitled to give or take under the Indenture, the Depository would authorize
the Participants holding the relevant beneficial interests to give or take such
action, and such Participants would authorize beneficial owners owning through
such Participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Payment of principal of, and premium, if any, and interest on, the Notes
and/or Debentures, as the case may be, registered in the name of the Depository
or its nominee will be made to the Depository or its nominee, as the case may
be, as the Holder of the Global Note representing such Notes and/or Debentures,
as the case may be. None of the Company, the Trustee or any other agent of the
Company or agent of the Trustee will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests or for supervising or reviewing any records relating to such
beneficial ownership interests. The Company expects that the Depository, upon
receipt of any payment of principal, premium, if any, or interest in respect of
a Global Note, will credit the accounts of the Participants with payment in
amounts proportionate to their respective beneficial interests in such Global
Note as shown on the records of the Depository. The Company also expects that
payments by Participants to owners of beneficial interests in a Global Note will
be governed by standing customer instructions and customary practices, as is now
the case with securities held for the accounts of customers in bearer form or
registered in "street name", and will be the responsibility of such
Participants.
Unless and until it is exchanged in whole or in part for certificated Notes
and/or Debentures, as the case may be, in definitive form, each Global Note may
not be transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor depository or a nominee of such successor depository.
If (x) the Depository is at any time unwilling or unable to continue as
Depository or the Depository ceases to be a clearing agency registered under the
Exchange Act, (y) an Event of Default has occurred and is continuing with
respect to the Notes and/or Debentures, as the case may be, or (z) there shall
exist such circumstances, if any, in addition to or in lieu of the foregoing as
have been specified for this purpose as contemplated by the Indenture, the
Global Notes will be transferable or exchangeable for Notes and/or Debentures,
as the case may be, in definitive form of like tenor and of an equal aggregate
principal amount, in denominations of $1,000 and integral multiples thereof.
Such definitive Notes and/or Debentures, as the case may be, shall be registered
in such name or names as the Depository shall instruct the Trustee. It is
expected that such
S-11
<PAGE> 12
instructions may be based upon directions received by the Depository from
Participants with respect to ownership of beneficial interests in such Global
Notes.
DEFEASANCE AND COVENANT DEFEASANCE
The provisions of Article Thirteen of the Indenture relating to defeasance
and covenant defeasance, which are described in the accompanying Prospectus,
shall apply to the Notes and Debentures.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Pricing Agreement, the Company has agreed to sell to Goldman, Sachs &
Co. ("Goldman Sachs"), and Goldman Sachs have agreed to purchase, the entire
principal amount of the Notes and Debentures.
Under the terms and conditions of the Underwriting Agreement, Goldman Sachs
is committed to take and pay for all of the Notes and Debentures, if any are
taken.
Goldman Sachs proposes to offer the Notes and Debentures in part directly
to the public at the respective initial public offering prices set forth on the
cover page of this Prospectus Supplement and in part to certain securities
dealers at such price less a concession of % of the principal amount of the
Notes and % of the principal amount of the Debentures. Goldman Sachs may
allow, and such dealers may reallow, a concession not to exceed % of the
principal amount of the Notes and % of the principal amount of the Debentures
to certain brokers and dealers. After the Notes and Debentures are released for
sale to the public, the offering price and other selling terms may from time to
time be varied by Goldman Sachs.
The Notes and Debentures are new issues of securities with no established
trading market. The Company has been advised by Goldman Sachs that Goldman Sachs
intends to make markets in the Notes and Debentures, but is not obligated to do
so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the Notes and
Debentures.
In connection with the offering, Goldman Sachs may purchase and sell the
Notes and Debentures in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover short
positions created by Goldman Sachs in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the purpose of preventing
or retarding a decline in the market price of the Notes and Debentures and short
positions created by Goldman Sachs involve the sale by Goldman Sachs of a
greater number of Notes and Debentures than they are required to purchase from
the Company in the offering. Goldman Sachs also may impose a penalty bid,
whereby selling concessions allowed to broker-dealers in respect of the Notes
and Debentures sold in the offering may be reclaimed by Goldman Sachs if such
Notes and Debentures are repurchased by Goldman Sachs in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the Notes and Debentures, which may be higher than the price
that might otherwise prevail in the open market; and these activities, if
commenced, may be discontinued at any time. These transactions may be effected
in the over-the-counter market or otherwise.
Settlement for the Notes and Debentures will be made in immediately
available funds and all secondary trading in the Notes and Debentures will
settle in immediately available funds.
The Company has agreed to indemnify Goldman Sachs against certain
liabilities, including liabilities under the Securities Act of 1933.
S-12
<PAGE> 13
KNIGHT-RIDDER, INC.
DEBT SECURITIES
------------------------
Knight-Ridder, Inc. (the "Company" or "Knight-Ridder") may, from time to
time, offer up to $500,000,000 aggregate principal amount (or the equivalent
thereof in one or more currencies, including composite currencies, or currency
units, if other than U.S. dollars) of its debt securities consisting of
debentures, notes and/or other unsecured evidences of indebtedness (the "Debt
Securities") as separate series, in amounts, at prices and on terms to be
determined at the time of sale and to be set forth in supplements to this
Prospectus (each a "Prospectus Supplement"). The Debt Securities may be sold to
underwriters, to or through dealers, acting as principals for their own account
or acting as agents, or directly to other purchasers. These underwriters,
dealers and agents may include Goldman, Sachs & Co. ("Goldman Sachs") or may be
a group of underwriters represented by firms including Goldman Sachs. See "Plan
of Distribution".
The terms of the Debt Securities, including where applicable the specific
designation, aggregate principal amount, currency or currencies of denomination
and payment, maturity, rate (which may be fixed or variable) and time of payment
of interest, if any, purchase price, any terms for redemption at the option of
the Company or the holder, any terms for conversion into or exchange for other
securities, and any terms for sinking fund payments, and the names of any
underwriters or agents, the principal amounts, if any, to be purchased by
underwriters, the compensation, if any, of such underwriters or agents and any
other terms in connection with the offering and sale of the Debt Securities in
respect of which this Prospectus is being delivered, will be set forth in a
Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
GOLDMAN, SACHS & CO.
The date of this Prospectus is October 24, 1997.
<PAGE> 14
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices located at 7 World Trade Center, Suite 1300, New York, New York 10048,
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can also be obtained by mail from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. In addition, the Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy statements and other
information regarding registrants that file electronically with the Commission.
Such reports, proxy statements and other information can also be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005. The Company's common stock, par value $.02 1/12 per share (the "Common
Stock") is listed on such Exchange.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-7553) are incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 29, 1996.
2. The Company's Current Report on Form 8-K dated January 10, 1997,
relating to the sale of the Company's cable interests.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 30, 1997.
4. The Company's Current Report on Form 8-K dated May 9, 1997, in the
form filed on May 22, 1997, relating to the acquisition of ABC Media, Inc.,
now known as Cypress Media, Inc. ("Cypress"), excluding financial
statements.
5. The Company's Current Report on Form 8-K/A#1 dated May 9, 1997, in
the form filed on July 22, 1997, relating to the acquisition of Cypress,
including financial statements.
6. The Company's Quarterly Report on Form 10-Q for the six months
ended June 29, 1997.
7. The Company's Current Report on Form 8-K dated October 8, 1997,
relating to the reclassification of the Company's financial statements due
to the discontinuation of the Company's Business Information Services
("BIS") Division.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the respective date of filing of such documents. Any statement
contained herein or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed
2
<PAGE> 15
to be incorporated by reference herein or in the accompanying Prospectus
Supplement modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, on the request of any such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference therein). Requests for such
copies should be directed to the Corporate Secretary of Knight-Ridder, Inc., One
Herald Plaza, Miami, Florida 33132 (telephone no. 305-376-3800) or to the
Company, c/o Registration Department, Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004, Attention: Donald T. Hansen (telephone no. 212-902-6686).
THE COMPANY
The Company is an information, advertising and communications company
primarily engaged in newspaper publishing in the United States. The Company is
also involved in newsprint manufacturing through two partnerships. In addition,
although the Company also provides archival information services, management is
currently in the process of divesting this business to focus on the Company's
core newspaper business.
On October 1, 1997, the Company entered into an agreement to sell
Knight-Ridder Information, Inc., the archival information services subsidiary of
its BIS Division, to M.A.I.D. plc ("M.A.I.D."), a London-based supplier of
business information to business professionals worldwide, for approximately $420
million. This transaction is subject to certain conditions including approval by
the stockholders of M.A.I.D., the admission by the London Stock Exchange of
M.A.I.D. shares to be issued in connection with the transaction and the
completion of M.A.I.D.'s financing arrangements.
The Company publishes 36 daily newspapers, including the San Jose Mercury
News, The Miami Herald, The Philadelphia Inquirer and Philadelphia Daily News,
the Detroit Free Press, the Kansas City Star and the Ft. Worth Star-Telegram,
and has daily newspaper printing plants in 36 cities located in 17 states. News,
advertising and information from the Company reach more than 9.8 million readers
daily and 13.4 million readers on Sunday, and the Company's internet services
receive more than 400,000 page views per day. Its newspapers are dedicated to
serving their respective communities with high quality and independent
journalism. The Company has won 64 Pulitzer prizes, including 20 in the past ten
years.
The Company is in the process of selling five of its newspapers. These
newspapers are: The (Long Beach, California) Press-Telegram, The (Gary, Indiana)
Post-Tribune, The (Boca Raton, Florida) News, The (Milledgeville, Georgia)
Union-Recorder and The Newberry (South Carolina) Observer.
The principal executive offices of the Company are located at One Herald
Plaza, Miami, Florida 33132 (telephone no. 305-376-3800). Unless the context
otherwise requires, the terms "Knight-Ridder" and the "Company" refer to
Knight-Ridder, Inc. and its consolidated subsidiaries.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds from the sale of Debt Securities offered hereby will be used for
general corporate purposes, including refinancing of indebtedness, working
capital increases, capital expenditures, share repurchases and possible future
acquisitions.
3
<PAGE> 16
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement
(the "Offered Debt Securities") and the extent, if any, to which such general
terms and provisions may not apply to the Offered Debt Securities will be
described in the Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities are to be issued under an indenture to be entered into
by the Company and The Chase Manhattan Bank, as Trustee (the "Trustee"). The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular provisions or defined terms of the Indenture
are referred to, such provisions or defined terms are incorporated herein by
reference.
GENERAL
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder. The Indenture provides that Debt Securities may be issued
from time to time in one or more series. The Debt Securities will be unsecured
obligations of the Company.
The Prospectus Supplement relating to the particular Offered Debt
Securities will describe the following terms of the Offered Debt Securities: (1)
the title of the Offered Debt Securities; (2) any limit on the aggregate
principal amount of the Offered Debt Securities; (3) the date or dates on which
the Offered Debt Securities will mature; (4) the Person to whom any interest on
the Offered Debt Securities will be payable, if other than the Person in whose
name such Offered Debt Securities (or one or more Predecessor Securities) are
registered on any Regular Record Date; (5) the rate or rates at which the
Offered Debt Securities will bear interest, if any, whether such rate or rates
will be fixed or variable, and the date or dates from which such interest will
accrue; (6) the dates on which such interest will be payable and the Regular
Record Dates for such Interest Payment Dates; (7) the place or places where
principal of (and premium, if any) and interest, if any, on, the Offered Debt
Securities will be payable; (8) any mandatory or optional sinking fund or
analogous provisions or right of Holders to elect repurchase; (9) the date, if
any, after which and the price or prices at which the Offered Debt Securities
may be redeemed at the option of the Company or repurchased at the option of the
Holders; (10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the Offered Debt Securities will be
issuable; (11) the currency or currencies, including composite currencies, or
currency units, in which payment of the principal of (or premium, if any) or
interest, if any, on, any of the Offered Debt Securities will be payable if
other than U.S. dollars; (12) if the amount of payments of principal of (or
premium, if any) or interest, if any, on, the Offered Debt Securities may be
determined with reference to an index or pursuant to a formula, the manner in
which such amounts will be determined; (13) if the principal of (or premium, if
any) or interest, if any, on, any of the Offered Debt Securities of the series
is to be payable, at the election of the Company or a Holder thereof, in one or
more currencies, including composite currencies, or currency units other than
that or those in which such Offered Debt Securities are stated to be payable,
the currency or currencies, including composite currencies, or currency units in
which payment of the principal of (or premium, if any) or interest, if any, on,
such Offered Debt Securities of such series as to which such election is made
will be payable, the periods within which and the terms and conditions upon
which such election is to be made and the amount so payable (or the manner in
which such amount shall be determined); (14) the portion of the principal amount
of the Offered Debt Securities, if other than the entire principal amount
thereof, payable upon acceleration of maturity thereof; (15) whether all or any
part of the Offered Debt Securities will be issued in the form of a permanent
Global Security or Securities, as described under "-- Permanent Global
Securities", and, if so, the depositary for, and other terms relating to, such
permanent Global Security or Securities; (16) any Event or Events of Default
applicable with respect to the Offered Debt Securities in addition to or
different from those provided in the Indenture; (17) any other
4
<PAGE> 17
covenant or warranty included for the benefit of the Offered Debt Securities in
addition to (and not inconsistent with) those included in the Indenture for the
benefit of Debt Securities of all series, or any other covenant or warranty
included for the benefit of the Offered Debt Securities in lieu of any covenant
or warranty included in the Indenture for the benefit of Debt Securities of all
series, or any combination of such covenants, warranties or provisions; (18) any
restriction or condition on the transferability of the Offered Debt Securities;
(19) if not determinable prior to the date the Offered Debt Securities mature,
the amount which shall be deemed to be the principal amount of such Offered Debt
Securities as of maturity for all purposes and the method of determining such
amount; (20) if applicable, that such Offered Debt Securities, in whole or any
specified part, are defeasible pursuant to the provisions of the Indenture
described under "-- Defeasance and Covenant Defeasance"; (21) any authenticating
or paying agents, registrars, conversion agents or any other agents with respect
to the Offered Debt Securities; (22) the terms, if any, on which the Offered
Debt Securities may be converted into or exchanged for stock or other securities
of the Company or other entities, any specific terms relating to the adjustment
thereof and the period during which such Offered Debt Securities may be so
converted or exchanged; and (23) any other specific terms or provisions of the
Offered Debt Securities not inconsistent with the Indenture. Unless otherwise
indicated in the applicable Prospectus Supplement, principal of (and premium, if
any) and interest, if any, on, the Offered Debt Securities will be payable, and
transfers of the Offered Debt Securities will be registrable, at the office or
agency of the Company in New York, New York, which on the date hereof is the
Corporate Trust Office of the Trustee located at 450 West 33rd Street, New York,
New York 10001; provided, that at the option of the Company payment of interest
may be made by check mailed to the address of the person entitled thereto as it
appears in the Security Register. (Sections 301, 305 and 1002)
Unless otherwise indicated in the applicable Prospectus Supplement, the
Offered Debt Securities will be issued only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. (Section 302) No
service charge will be made for any registration of transfer or exchange of
Offered Debt Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
(Section 305)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below their
stated principal amount. Special Federal income tax and other considerations
applicable thereto will be described in the Prospectus Supplement relating
thereto.
If the Debt Securities are denominated, in whole or in part, in any
currency other than U.S. dollars, if the principal of (and premium, if any) and
interest, if any, on, the Debt Securities are, at the election of the Company or
a Holder thereof, to be payable in a currency or currencies, or currency units,
other than that in which such Debt Securities are to be payable, or if any index
is used to determine the amount of payments of principal of (or premium, if any)
or interest, if any, on, any series of the Debt Securities, special Federal
income tax, accounting and other considerations applicable thereto will be
described in the Prospectus Supplement relating thereto.
The Indenture does not contain any provisions that would provide protection
to Holders of the Debt Securities against a sudden and dramatic decline in
credit quality of the Company resulting from any takeover, recapitalization or
similar restructuring or from other highly leveraged transactions.
PERMANENT GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of one or more
permanent Global Securities that will be deposited with the Depositary or its
nominee. In such a case, one or more Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of Outstanding Debt Securities of the series to be represented
by
5
<PAGE> 18
such Global Security or Securities. The Prospectus Supplement relating to such
series of Debt Securities will describe the circumstances, if any, under which
beneficial owners of interests in any such permanent Global Security or
Securities may exchange such interests for Debt Securities of such series of
like tenor and principal amount in any authorized form and denomination. Unless
and until it is exchanged, in whole or in part, for Debt Securities in
definitive registered form, a permanent Global Security may not be registered
for transfer or exchange except in the circumstances described in the applicable
Prospectus Supplement. (Sections 204 and 305)
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a permanent Global
Security and a description of the Depositary will be contained in the applicable
Prospectus Supplement.
RESTRICTIVE COVENANTS
Restriction upon Mortgages. The Indenture provides that the Company will
not, nor will it permit any Subsidiary (as defined below) to, issue, assume or
guarantee any debt for money borrowed (herein referred to as "Debt") if such
Debt is secured by a Mortgage upon any Principal Property (as defined below) or
on any shares of stock or indebtedness of any Restricted Subsidiary (as defined
below) (whether such Principal Property, shares of stock or indebtedness is now
owned or hereafter acquired) without in any such case effectively providing that
the Debt Securities of any series Outstanding which are entitled to the benefits
of such provision of the Indenture (together with, if the Company shall so
determine, any other indebtedness of or guaranteed by the Company or such
Restricted Subsidiary entitled thereto, subject to applicable priority of
payment) shall be secured equally and ratably with or prior to such Debt, except
that the foregoing restriction shall not apply to: (i) Mortgages on property,
shares of stock or indebtedness of or guaranteed by any corporation existing at
the time such corporation becomes a Restricted Subsidiary; (ii) Mortgages on
property existing at the time of acquisition thereof, or Mortgages on property
which secure the payment of the purchase price of such property, or Mortgages on
property which secure Debt incurred or guaranteed for the purpose of financing
the purchase price of such property or the construction of such property
(including improvements to existing property), which Debt is incurred or
guaranteed within 180 days after such acquisition or completion of such
construction or commencement of full operation of such property; (iii) Mortgages
securing Debt owing by any Restricted Subsidiary to the Company or to a
Restricted Subsidiary; (iv) Mortgages on property of a corporation existing at
the time such corporation is merged into or consolidated with the Company or a
Restricted Subsidiary or at the time of a purchase, lease or other acquisition
of the properties of a corporation or other person as an entirety or
substantially as an entirety by the Company or a Restricted Subsidiary; (v)
Mortgages on property of the Company or a Restricted Subsidiary in favor of the
United States of America or any State thereof or any department, agency,
instrumentality or political subdivision thereof, or in favor of any other
country, or any political subdivision thereof, to secure certain payments
pursuant to any contract or statute or to secure any indebtedness incurred or
guaranteed for the purpose of financing all or any part of the purchase price or
the cost of construction of the property subject to such Mortgages (including,
but not limited to, Mortgages incurred in connection with pollution control,
industrial revenue or similar financings); (vi) any extension, renewal or
replacement (or successive extensions, renewals or replacements), in whole or in
part, of any Mortgage referred to in the foregoing clauses (i) to (v),
inclusive; (vii) certain statutory liens or other similar liens arising in the
ordinary course of business of the Company or a Restricted Subsidiary, or
certain liens arising out of governmental contracts; (viii) certain pledges,
deposits or liens made or arising under worker's compensation or similar
legislation, self-insurance arrangements or in certain other circumstances; (ix)
certain liens in connection with legal proceedings, including certain liens
arising out of judgments or awards; (x) liens for certain taxes or assessments,
landlord's liens, leases made, or existing on property acquired, in the ordinary
course of business and liens and charges incidental to the conduct of the
business, or the ownership of the property and assets, of the Company or a
Restricted Subsidiary, which were not incurred in connection with the borrowing
of money and which do not, in the opinion
6
<PAGE> 19
of the Company, materially impair the use of such property in the operation of
the business of the Company or such Restricted Subsidiary or the value of such
property for the purposes thereof; and (xi) Mortgages on any property created,
assumed or otherwise brought into existence in contemplation of the sale or
other disposition of the underlying property, whether directly or indirectly, by
way of share disposition or otherwise; provided, that the Company must have
disposed of such property within 180 days after the creation of such Mortgages
and that any Debt secured by such Mortgages shall be without recourse to the
Company or any Subsidiary. Notwithstanding the above, the Company and one or
more Subsidiaries may, without securing the Debt Securities, issue, assume or
guarantee secured Debt which would otherwise be subject to the foregoing
restrictions; provided, that after giving effect thereto the aggregate amount of
such Debt then outstanding (not including secured Debt permitted under the
foregoing exceptions) at such time does not exceed 15% of the shareholders'
equity of the Company and its Subsidiaries as of the end of the latest fiscal
year. (Section 1007)
Restriction upon Sale and Leaseback Transactions. Sale and leaseback
transactions (except such transactions involving leases for less than three
years, leases between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries or leases of a Principal Property entered into within
120 days after the latest of the acquisition, completion of construction or
commencement of full operation of such Principal Property) by the Company or any
Restricted Subsidiary of any Principal Property shall be prohibited unless: (i)
the Company or such Restricted Subsidiary would be entitled to issue, assume or
guarantee Debt secured by the property involved at least equal in amount to the
Attributable Debt (as defined below) in respect of such transaction without
equally and ratably securing the Debt Securities of any series Outstanding which
are entitled to the benefits of such provision of the Indenture; provided, that
such Attributable Debt shall thereupon be deemed to be Debt subject to the
provisions of the preceding paragraph, or (ii) an amount in cash equal to such
Attributable Debt is applied to the retirement of funded Debt of the Company or
a Restricted Subsidiary which Debt is not subordinated to the Debt Securities of
any series Outstanding. (Section 1008)
Certain Definitions. "Subsidiary" means any corporation of which more than
50% of the outstanding voting stock is owned by the Company or by the Company
and one or more other Subsidiaries or by one or more other Subsidiaries.
"Principal Property" means all land, buildings, machinery and equipment, and
leasehold interests and improvements in respect of the foregoing, which would be
reflected on a consolidated balance sheet of the Company and its Subsidiaries
prepared in accordance with United States generally accepted accounting
principles, excluding all such tangible property located outside the United
States of America and excluding any such property which, in the opinion of the
Board of Directors set forth in a Board Resolution, is not material to the
Company and its Subsidiaries consolidated. "Restricted Subsidiary" means any
Subsidiary other than: (i) a Subsidiary substantially all of the physical
properties of which are located, or substantially all the operations of which
are conducted, outside the United States of America, or (ii) a Subsidiary which
does not own or hold any Principal Property. "Attributable Debt" means the
present value (discounted at an appropriate interest rate) of the obligation of
a lessee for net rental payments during the remaining term of any lease.
(Section 101)
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that, unless the provisions of Article Thirteen are
made inapplicable to the Debt Securities of any series pursuant to Section 301
of the Indenture, the Company may elect either (i) to defease and be discharged
from any and all obligations with respect to such Debt Securities (except for
the obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to
maintain an office or agency in respect of the Debt Securities and to hold
moneys for payment in trust) ("defeasance") or (ii) to be released from its
obligations with respect to such Debt Securities under Sections 1007 and 1008 of
the Indenture (being the obligations described under "Restriction upon
Mortgages"
7
<PAGE> 20
and "Restriction upon Sale and Leaseback Transactions", respectively) and any
other covenants applicable to such Debt Securities which are subject to covenant
defeasance and any omission to comply with such obligations shall not constitute
an Event of Default with respect to Debt Securities of such series ("covenant
defeasance"), upon the irrevocable deposit with the Trustee (or other qualifying
trustee), in trust for such purpose, of money and/or U.S. Government Obligations
which through the payment of principal and interest in accordance with their
terms will provide money in an amount sufficient to pay at maturity (or upon
redemption, as the case may be) the principal of (and premium, if any) and
interest, if any, on, such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor. Such a trust
may only be established if, among other things, the Company has delivered to the
Trustee an Opinion of Counsel (as specified in the Indenture) to the effect that
the Holders of such Debt Securities will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
or covenant defeasance had not occurred. Such opinion, in the case of defeasance
under clause (i) above, must refer to and be based upon a ruling of the Internal
Revenue Service issued to the Company or published as a revenue ruling or on a
change in applicable Federal income tax law occurring after the date of the
Indenture. (Article Thirteen)
In the event the Company effects covenant defeasance with respect to Debt
Securities of any series and the Debt Securities of such series are declared due
and payable because of the occurrence of any Event of Default other than the
Event of Default described in clause (iv) under "-- Events of Default" with
respect to Sections 1007 and 1008 of the Indenture and any other covenants
applicable to such Debt Securities which are subject to covenant defeasance, the
amount of money and/or U.S. Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Debt Securities of such series at
the time of their Stated Maturity but may not be sufficient to pay amounts due
on the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, the Company shall remain liable for such
payments.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance with respect to the
Debt Securities of a particular series.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
Debt Securities of any series: (i) failure to pay any interest on any Debt
Security of that series when due, continued for 30 days; (ii) failure to pay
principal of or premium, if any, on, any Debt Security of that series when due;
(iii) failure to deposit any sinking fund payment, when due, in respect of any
Debt Security of that series; (iv) failure to perform, or breach of, any other
covenant of the Company in the Indenture (other than a covenant included in the
Indenture solely for the benefit of series of Debt Securities other than that
series), continued for 90 days after written notice as provided in the
Indenture; (v) certain events of bankruptcy, insolvency or reorganization; and
(vi) any other Event of Default provided with respect to Debt Securities of that
series. (Section 501) If an Event of Default (other than an Event of Default
specified in clause (v) or (vi) above) with respect to Debt Securities of any
series at the time Outstanding occurs and is continuing, either the Trustee or
the Holders of at least 50% in principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
the Debt Securities of that series to be due and payable immediately. If an
Event of Default specified in clause (v) or (vi) above with respect to Debt
Securities of any series at the time Outstanding occurs, the principal amount
(or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Debt Securities of that series shall
automatically, and without declaration or other action on the part of the
Trustee or any Holder, become immediately due and payable. At any time after a
8
<PAGE> 21
declaration of acceleration with respect to Debt Securities of any series has
been made, but before a judgment or decree based on acceleration has been
obtained, the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series may, under certain circumstances, rescind and annul
such acceleration. (Section 502)
The Indenture provides that the Trustee will be under no obligation,
subject to the duty of the Trustee during default to act with the required
standard of care, to exercise any of the rights or powers vested in it under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable indemnity. (Section 603) Subject to
such provisions for indemnification of the Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of any series will have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, with respect to the Debt Securities of that series; provided, that
such direction shall not be in conflict with any rule of law or the Indenture.
(Section 512)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1009)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby: (i) change the Stated Maturity of
the principal of, or any installment of principal of, or interest, if any, on,
any Debt Security, (ii) reduce the principal amount of, or the premium (if any)
or interest, if any, on, any Debt Security, (iii) reduce the amount of principal
of an Original Issue Discount Security payable upon acceleration of the Maturity
thereof, (iv) change the place or currency of payment of principal of (or
premium, if any) or interest, if any, on, any Debt Security, (v) impair the
right to institute suit for the enforcement of any payment on or with respect to
any Debt Security or (vi) reduce the percentage in principal amount of
Outstanding Debt Securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults. (Section 902)
The Holders of at least a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with any term, provision or condition set forth in
certain covenants provided for the benefit of such Holders. (Section 1010) The
Holders of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive any past default under the Indenture with
respect to that series, except a default in the payment of the principal of (or
premium, if any) or interest, if any, on, any Debt Security of that series or in
respect of a provision which under the Indenture cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of that
series affected. (Section 513)
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The Company, without the consent of any Holders of Outstanding Debt
Securities, may consolidate with or merge into, or transfer or lease its assets
substantially as an entirety to, any corporation or may acquire or lease the
assets of any person; provided, that the corporation formed by such
consolidation or into which the Company is merged or which acquires or leases
the assets of the Company substantially as an entirety is organized under the
laws of any United States jurisdiction and expressly assumes the Company's
obligations with respect to the Debt Securities
9
<PAGE> 22
and under the Indenture, that after giving effect to the transaction no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing, and that certain
other conditions are met. (Section 801)
CONCERNING THE TRUSTEE
The Company maintains deposit accounts and banking and borrowing relations
with the Trustee, including the Company's revolving credit agreements, under
which the Trustee is both a lending bank and the agent for the other lending
banks. As of September 30, 1997, the Company had no outstanding borrowings under
such revolving credit agreements. The Trustee is the issuing and paying agent
for the Company's commercial paper borrowings and serves as registrar and
transfer agent for the Company's Common Stock.
The Trustee is also trustee of the 6.30% Senior Notes due 2005, the 8 1/2%
Amortizing Notes due 2001 and the 9 7/8% Debenture due 2009 (collectively, the
"Other Indenture Securities"), issued pursuant to an Indenture, dated as of
February 15, 1986, as supplemented by the First Supplemental Indenture, dated as
of April 15, 1989, each between the Company and the Trustee (as successor to
Manufacturers Hanover Trust Company). Pursuant to the Trust Indenture Act of
1939, as amended, should a default occur with respect to either the Debt
Securities or the Other Indenture Securities, the Trustee would be required to
resign as Trustee with respect to the Debt Securities or the Other Indenture
Securities within 90 days of such default unless such default were cured, duly
waived or otherwise eliminated.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters and also
may sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include one or more of Goldman Sachs, or a group of
underwriters represented by firms including Goldman Sachs. Goldman Sachs may
also act as agent.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Company also may, from
time to time, authorize dealers, acting as the Company's agents, to solicit
offers to purchase the Offered Debt Securities upon the terms and conditions set
forth in any Prospectus Supplement.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents, in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts and
commissions under the Act. Any such underwriter or agent will be identified, and
any such compensation received from the Company will be described, in a
Prospectus Supplement relating to the Offered Debt Securities.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents which participate in the distribution of Debt Securities may
be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Act.
The Debt Securities are a new issue of securities with no established
trading market. In the event that Debt Securities of a series offered hereunder
are not listed on a national securities exchange, certain broker-dealers may
make a market in the Debt Securities, but will not be obligated
10
<PAGE> 23
to do so and may discontinue any market making at any time without notice. No
assurance can be given that any broker-dealer will make a market in the Debt
Securities of any series or as to the liquidity of the trading market for the
Debt Securities.
Goldman Sachs performs various investment banking services for the Company
and the Company sells its commercial paper to or through Goldman Sachs. John L.
Weinberg, Senior Chairman and former Senior Partner of Goldman Sachs, is a
director of the Company and serves as Chairman of the Compensation Committee of
the Company's Board of Directors. Certain of the other underwriters and their
associates may be customers of, engage in transactions with and perform services
for the Company in the ordinary course of business.
VALIDITY OF DEBT SECURITIES
Unless otherwise indicated in the Prospectus Supplement relating to Offered
Debt Securities, the validity of the Offered Debt Securities will be passed upon
for the Company by Cristina L. Mendoza, Esq., Vice President and General Counsel
of the Company, and for the underwriters or agents, as the case may be, by
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004. Sullivan &
Cromwell will rely as to all matters of Florida law upon the opinion of Cristina
L. Mendoza, Esq.
EXPERTS
The consolidated financial statements of Knight-Ridder, Inc. and
subsidiaries, appearing in or incorporated by reference in Knight-Ridder, Inc.'s
Annual Report (Form 10-K) have been audited by Ernst & Young LLP, independent
certified public accountants, as set forth in their report included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
11
<PAGE> 24
======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS PROSPECTUS NOR THE
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Forward Looking Statements........... S-2
The Company.......................... S-2
Recent Developments.................. S-2
Use of Proceeds...................... S-4
Capitalization....................... S-5
Selected Financial Information....... S-6
Description of Notes and Debentures.. S-9
Underwriting......................... S-12
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 3
Use of Proceeds...................... 3
Description of Debt Securities....... 4
Plan of Distribution................. 10
Validity of Debt Securities.......... 11
Experts.............................. 11
</TABLE>
======================================================
======================================================
$200,000,000
KNIGHT-RIDDER, INC.
$100,000,000
% NOTES DUE NOVEMBER , 2007
$100,000,000
% DEBENTURES DUE NOVEMBER , 2027
------------------
[KNIGHT-RIDDER LOGO]
------------------
GOLDMAN, SACHS & CO.
======================================================
