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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
Commission file number 1-7564
DOW JONES & COMPANY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-5034940
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 LIBERTY STREET, NEW YORK, NEW YORK 10281
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 416-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock $1.00 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Class B Common Stock $1.00 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
--- ---
Indicate by a check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ( )
Aggregate market value of common stock held by non-affiliates of the
registrant at January 31, 1995 was approximately $1,689,000,000.
The number of shares outstanding of each of the registrant's classes of
common stock on January 31, 1995: 74,626,047 shares of Common Stock and
22,015,032 shares of Class B Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Definitive Proxy Statement for 1995 Annual Meeting of Stockholders dated
March 20, 1995: Part III.
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PART I.
ITEM 1. Business.
Dow Jones & Company, Inc. (the company) is a global provider of business
news and information. Its operations are divided into three industry
segments: information services, business publications and general interest
community newspapers. Financial information about industry segments and
geographic areas are incorporated by reference to Note 15 to the Financial
Statements on pages 44 and 45 of this report.
The company currently has approximately 10,300 full-time employees. The
company's principal executive offices are located at 200 Liberty Street, New
York, New York.
Information Services
- --------------------
The information services segment of Dow Jones reflects the operations of
the company's Dow Jones/Telerate group and the Business Information Services
group. The Dow Jones/Telerate group primarily serves the financial services
industry world-wide and includes Dow Jones Telerate, Dow Jones News Service,
Professional Investor Report, AP-Dow Jones News Service, Federal Filings and
the Dow Jones Asian Equities Report. The Business Information Services group
serves corporate, business and individual investor needs by delivering its
information products and services on a wide range of electronic media,
including desktop and portable personal computers, pagers, facsimile machines
and radio. This group's products include Dow Jones News/Retrieval, DowVision
and two radio networks.
Dow Jones Telerate is one of the largest suppliers of real-time market
information and related services to financial professionals with offices or
distributors in more than 85 countries. About 60% of Dow Jones Telerate's
revenues are generated by its foreign operations. Dow Jones Telerate
Holdings, Inc., formerly Telerate, Inc., which became a wholly-owned
subsidiary of Dow Jones in 1990, started in 1969 as a provider of commercial
paper quotations. The breadth and depth of Dow Jones Telerate are reflected
in the mix of services presently offered. The foundation of the service rests
on providing prices of U.S. Government securities, foreign exchange,
international government bonds, global equities, energy, mortgage-backed
securities and a variety of money market instruments. In addition, Dow Jones
Telerate provides global news coverage of the world's financial markets and an
array of services from outside information providers, ranging from informed
commentary on Federal Reserve actions to analysis of the commodities markets.
Dow Jones Telerate also provides products and software to help users
analyze its live market data. Its Trading Room Systems (TRS) provide advanced
decision-support tools. Designed to serve the needs of large trading rooms,
TRS have networking capabilities which enable customers to link trading rooms
world-wide. Running on powerful desktop workstations using software
compatible with Microsoft's Windows, TRS consolidates several information,
transaction and analytic services into a single platform at a trader's desk.
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In 1994 a single-user and multiuser version of this workstation concept
was developed. The Telerate Workstation, introduced in early 1995, provides
the full range of Dow Jones Telerate's real-time and historical market data,
decision-support products and transaction services, as well as the Dow Jones
Investor Network, a video business-news service. The Telerate Workstation has
been customized to meet the specific needs of professionals in the fixed-
income, foreign exchange, equity and energy markets.
Digital Page Feed (DPF) fills the needs of customers who prefer to
receive any or all of Dow Jones Telerate's thousands of pages of data in the
form of an electronic feed that can be incorporated into their own information
systems. DPF offers these customers highly reliable, timely and selective
information feeds combined with the flexibility required by their custom
distribution systems.
Matrix employs the power of a personal computer to allow customers to
build customized, full-color, market-specific pages using Dow Jones Telerate
data. Matrix has modules to analyze the fixed income and foreign exchange
markets and sophisticated analytical tools, including a spreadsheet from Lotus
Development Corporation that uses live Telerate data and contains built-in
formulas customized to help traders analyze financial markets.
The Treasury 500 product offers the widest coverage available of U.S.
Government securities and provides value-added analytics in addition to the
price information distributed through Dow Jones Telerate's long-standing
exclusive agreement with Cantor Fitzgerald Securities Corp. One of Treasury
500's most important features is that it provides live bids and offers from an
identified source that customers can actually trade on. It also has live two-
sided market displays of best-bid and best-offer prices. In 1994 Liberty
Brokerage Investment Corp. started supplying Treasury securities prices,
further strengthening Dow Jones Telerate's position as the leading provider of
real-time U.S. Treasury prices.
Dow Jones Telerate is the exclusive distributor of real-time foreign
exchange and money market prices from M. W. Marshall & Company and Exco
International, two of the world's foremost foreign exchange brokers.
TeleTrac is a technical analysis product favored by dealers in the
foreign exchange and fixed income markets. It is a leading technical analysis
tool in Europe and Asia. Telerate Charting, a Windows-based analytical tool,
is also available in Europe.
Dow Jones holds an equity stake in the Japanese consortium Minex Corp.
and Dow Jones Telerate serves as exclusive world-wide sales and distribution
agent outside of Japan for Minex's foreign exchange trading service.
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Telerate Equities Service (TES) product line offers quotes and news on
thousands of securities traded on stock, futures and options exchanges around
the world. TES, when combined with Dow Jones Telerate's fixed income and
foreign exchange information, gives customers comprehensive coverage of the
world's major markets and reflects the markets' growing interaction. TES
combines in one service all Dow Jones Telerate data, including information on
equities, foreign exchange and U.S. Government issues.
Dow Jones Telerate Emerging Markets Report, introduced in 1993, nearly
doubled its staff in 1994. This service provides information on the emerging
capital markets of developing countries, with particular emphasis on Latin
America, by combining Dow Jones Telerate's live market prices with news from
Dow Jones and the Associated Press, plus market commentary from Thomson
Financial Services.
Other Dow Jones Telerate products and services currently in the
marketplace include: the Telerate Access Service, a personal-computer
software package that provides a link to Telerate's core information base
through public telephone networks and includes access to Dow Jones News/
Retrieval; hand-held quotation devices that deliver current prices, rates and
other data; and data for mortgage markets.
Dow Jones News Service is the nation's preeminent supplier of business
and financial news to subscribers at brokerage firms, banks, investment
companies and other businesses. Professional Investor Report (PIR), a
companion to the News Service, focuses on daily trading activity and news of
interest to traders, arbitragers, hedge fund operators and other equity market
professionals. Capital Markets Report, which is incorporated into Dow Jones
Telerate's basic information package, is the company's newswire that covers
fixed income and financial futures markets around the world.
AP-Dow Jones, a news service joint venture with Associated Press,
provides international economic, business and financial news to subscribers in
56 countries. In addition to two broad international newswires, AP-Dow Jones
offers specialized wires dedicated to the coverage of European equities,
banking and the markets in foreign exchange and petroleum. AP-Dow Jones also
produces the European Corporate Report, a news service focusing on European
companies and stock markets, and the World Equities Report newswire which
serves domestic institutions investing in international markets. In 1994 AP-
Dow Jones increased the speed of its distribution network and enhanced its
global staff by opening news bureaus in Beijing, Lisbon, New Delhi, Oslo,
Prague and Vienna.
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Washington-based Federal Filings publishes newswires, newsletters and
investment research based on its coverage of federal regulatory agencies,
Capitol Hill and bankruptcy courts nationwide. Federal Filings' products
include Federal Filings Business News, a real-time newswire covering SEC
filings; Daily Bankruptcy Review, a compendium of large bankruptcy filings
throughout the U.S.; and 13F Advance, which analyzes the equity portfolio
changes of prominent money managers. In 1994 Federal Filings introduced Edgar
Direct which provides real-time access to the full text of SEC filings.
In 1994 the company launched the Dow Jones Asian Equities Report, which
covers 12 Asian-Pacific stock markets and news of the companies traded on
them. Headquartered in Singapore, the service draws on the staffs of AP-Dow
Jones, The Asian Wall Street Journal and Far Eastern Economic Review, as well
as its own editors and reporters.
Dow Jones News/Retrieval is recognized as one of the nation's leading
suppliers of electronic business and financial news and information to
financial professionals, private investors, corporate executives and managers,
as well as to information specialists in corporate libraries. Business
Information Services in 1994 formed an alliance with West Publishing in which
West's product Westlaw became the exclusive computer-assisted legal research
service to offer integrated access to Dow Jones News/Retrieval. Also, in 1994
the news content on the day of publication, with availability for 24 hours,
of the New York Times was added to News/Retrieval. In early 1995, on-line
availability on day of publication of the Financial Times, along with two
years of back editions, was made available. In 1995 an "electronic gateway"
was opened to Nikkei Telecom Japan News & Retrieval, offering access to news
and information about Japan and the Pacific Rim. In 1994 News/Retrieval
introduced an enhanced Dow Jones Text Library that gives added flexibility and
precision in searching the vast databases which contain more than 1,800
publications and 35 million articles.
The Business Information Services group in early 1995 introduced
Personal Journal, an electronic publication designed to deliver customized
business and market news, stock quotes, world and national news, weather and
sports 24 hours a day directly to personal computers. The Wall Street Journal
Interactive Edition, currently under development, builds on Personal Journal.
It will be a true "interactive newspaper," combining the editorial qualities
of the Journal with the immediacy and depth of the electronic medium.
DowVision, a comprehensive service that delivers all the Dow Jones
newswires, three press release services and the complete text of The Wall
Street Journal directly to desktops through corporate computer systems,
enables users in the corporate and financial marketplaces to tailor
information to their own needs.
In 1994 Business Informations Services broadened its access to consumer
markets by signing agreements to provide Dow Jones news to CompuServe, owned
by H&R Block Inc., and eWorld, Apple Computer Inc.'s new on-line service. The
company and Aegon USA Inc. formed a partnership in 1994 which plans to gather
and distribute commercial real estate data, information and analytics through
on-line services.
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Because of declining demand for telephone-based business news services,
Business Information Services discontinued DowPhone and the Voice Information
Network audio service for newspapers in early 1995. At the same time, it
continued to expand the distribution of text-based news and information on
paging and wireless electronic mail services.
Dow Jones' radio products include two radio networks -- "The Wall Street
Journal Report" on AM stations and "The Dow Jones Report" on FM stations.
Together these programs are carried on 150 stations and reach 80% of the
country.
In January 1995, ESPN Inc. acquired an 80% interest in SportsTicker, the
real-time sports news and information unit of Dow Jones. Dow Jones retains a
20% interest in the service and plans to develop opportunities with ESPN to
provide business-of-sports TV programming.
In March 1995, the company acquired majority ownership in IDD
Enterprises L.P., a financial publishing, database, software and consulting
company. IDD publishes Investment Dealers' Digest and 16 other magazines,
newsletters and directories. Its software and electronic information products
are available to investment banks and financial institutions through a variety
of services, including Dow Jones Telerate and Dow Jones/News Retrieval.
Business Publications
- ---------------------
Dow Jones' best-known publication, The Wall Street Journal, is the
country's largest daily newspaper with average circulation for 1994 of
1,808,700. The Wall Street Journal is edited in New York City at the
company's executive offices. The Journal's four regional editions are printed
at seventeen plants located across the United States. Advertisers can also
focus their messages on readers served by sixteen localized editions. In
October 1994, Southeast Journal and Florida Journal were introduced. Together
with Texas Journal, introduced in 1993, these editions provide Journal-quality
reporting on regional business trends and issues. They appear as a four-page
weekly section included in copies of The Wall Street Journal distributed in
their respective Southern markets each Wednesday. The Journal now provides
weekend-oriented coverage every Friday, including Your Money Matters Weekend
Report (an expanded personal-finance column), a sports page and a travel page.
Production of the paper employs satellite transmission of page images to
the outlying plants and other technologies designed to speed the delivery of
editorial material to the presses and to reduce the steps taken in the
printing process. The Wall Street Journal is delivered in two ways: by second
class postal service and through the company's own National Delivery Service,
Inc., a subsidiary. At the end of 1994, National Delivery Service delivered
nearly one million of the Journal's subscription copies. The system provides
delivery earlier and more reliably than the postal service. Approximately
226,000 copies of the Journal are sold each business day on newsstands.
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Barron's, The Dow Jones Business and Financial Weekly, a magazine
specializing in reporting and commentary on financial markets, was redesigned
in 1994. The new look includes a new cover, a more readable typeface and a
new pullout section, Market Week, providing readers with an easy-to-use
statistical reference guide. The magazine, which had average circulation of
278,300 in 1994, uses the same facilities employed in the production of The
Wall Street Journal. Barron's is edited in New York City and is delivered by
second class postal service and through National Delivery Service. About
126,600 copies are sold on newsstands weekly.
The Wall Street Journal Europe is headquartered in Brussels and printed
in Brussels, the Netherlands, Switzerland and England. It is available on
day-of-publication in continental Europe and the United Kingdom. The
newspaper, which began publication in 1983, had average circulation in 1994 of
59,100. The Central European Economic Review is distributed as an insert in
the Wall Street Journal Europe and also sold separately by subscription.
Formerly a quarterly, the magazine, which covers political and business
developments in the former Soviet bloc, became a monthly publication in 1995.
The Asian Wall Street Journal began publication in 1976. It is headquartered
and printed in Hong Kong and is transmitted by satellite to additional
printing sites in Singapore, Japan and Bangkok. The Asian Wall Street Journal
had average circulation of 46,500 in 1994. The Journal Europe and the Asian
Journal draw on the resources of The Wall Street Journal's world-wide news
staff. The Asian Journal provides the foundation for the company's Asian Wall
Street Journal Weekly, which is published in New York for North American
readers with interests in Asia.
The Wall Street Journal Americas was launched in 1994. The daily,
Spanish-language business news section is included in eight major Latin
American newspapers with a combined weekday circulation of 1.2 million.
Other business publications include Far Eastern Economic Review, Asia's
leading English-language newsweekly; the National Business Employment Weekly,
which contains career-related news features, job-related ads from the
Journal's regional editions and self-generated advertising; The Wall Street
Journal Classroom Edition, which is published nine times during the school
year and is used in more than 900 schools nationwide; and American
Demographics magazine, which contains feature stories analyzing statistics
from the United States Census Bureau and private data collectors.
SmartMoney, The Wall Street Journal Magazine of Personal Business, is
published jointly with Hearst Corp. SmartMoney, introduced in 1992, was named
Magazine of the Year for 1993 by Advertising Age magazine. SmartMoney
increased its advertising rate base to 550,000 copies in 1994. BIZ, the
monthly magazine introduced in 1994 by Dow Jones and American City Business
Journals, Inc., ceased publication with its January 1995 issue.
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In early 1995 the company purchased Charter Financial Publishing Corp.
of Shrewsbury, New Jersey. Charter is publisher of Investment Advisor, Realty
Stock Review and the newly launched Fee Advisor.
Also included in this business segment is The Wall Street Journal's
television group which developed European Business News (EBN) in 1994. EBN,
which began broadcasting in February 1995, provides 19-hours-a-day coverage
of European business, financial and consumer news throughout Europe. EBN is a
joint venture, 70% owned by Dow Jones and 30% owned by Flextech PLC, of
London, an affiliate of Tele-Communications Inc. The television group also
produces "The Wall Street Journal Report" a half-hour, weekly program in the
U.S. covering business, consumer and investment topics.
Dow Jones Investor Network is a video business-news service delivered to
customers' computer terminals, that includes exclusive interviews with
business leaders and coverage of major corporate announcements and events.
Community Newspapers
- --------------------
Community newspapers published at year-end 1994 by Ottaway Newspapers,
Inc., a wholly-owned subsidiary, include 20 general-interest dailies in
Arizona, California, Connecticut, Kentucky, Massachusetts, Michigan,
Minnesota, Missouri, New York, Oregon and Pennsylvania. Average circulation
of the dailies during 1994 was approximately 551,500; Sunday circulation for
13 newspapers was approximately 527,500. The principal administrative office
of Ottaway Newspapers is in Campbell Hall, New York. The primary delivery
method for the newspapers is private delivery.
Ottaway Newspapers purchased the Salem (Massachusetts) Evening News in
March 1995. The Evening News publishes 30,000 copies Monday through Saturday
afternoons in Essex County, where Ottaway has four other dailies with a total
circulation of 37,000.
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Other
- -----
Dow Jones also has investments in Handelsblatt-Dow Jones GmbH, a joint
venture with the von Holtzbrinck Group, publisher of Germany's leading
business daily, Handelsblatt; Press-Enterprise Co., a daily newspaper in
Riverside, Calif.; Groupe Expansion S.A., a French business publishing
company; Mediatex Communications Corp., publisher of Texas Monthly magazine;
Nation Publishing Group, a Bangkok, Thailand publisher of English and Thai-
language magazines and newspapers; AmericaEconomia, a Spanish-language
business magazine in South America; VWD-Vereinigte Wirtschaftsdienste GmbH, a
German news agency specializing in business and economic news and information;
Asia Business News, a business and financial television news channel
broadcasting in Asia; and newsprint mills in the United States and Canada.
The company also owns a minority interest in Hubbard Broadcasting Inc.'s U.S.
Satellite Broadcasting venture which directly broadcasts television
programming to viewers in the U.S. via 18-inch dish antennas linked to special
home receivers.
Raw Materials
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The primary raw material used by the company is newsprint. In 1994,
approximately 221,000 metric tons were consumed. Newsprint was purchased from
sixteen suppliers. F.F. Soucy, Inc. & Partners and Company, Limited, Riviere
du Loup, Quebec, Canada, and Bear Island Paper Company, Richmond, Virginia,
furnished 18% and 20.6%, respectively, of total newsprint requirements. The
company is a limited partner in both ventures and has signed long-term
contracts with both for a substantial portion of its annual newsprint
requirements. For many years the available sources of newsprint have been
adequate to supply the company's needs.
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10
Competition
- -----------
The company believes that Reuters Holdings PLC ("Reuters"), a company
headquartered in London whose shares are publicly traded in the United States
and the UK, is its most significant competitor currently providing, on a
world-wide basis, financial information display services closely comparable to
those furnished by Dow Jones Telerate, although other companies, primarily
Automated Data Processing Corporation, Knight-Ridder, Inc., Bloomberg L.P.,
Telekurs A.G., ILX Systems, Inc. and Quick Corporation of Japan are also in
the business of providing financial information displayed on video screens to
customers. The company believes that Reuters has more subscribers and video
screens than the company on a world-wide basis. The company believes that Dow
Jones Telerate is the largest provider of fixed income and foreign exchange
data in the United States.
Many business enterprises, including banks, brokerage houses and other
financial firms, operate electronic data systems which are able to move
financial and business news rapidly from one location to another, competing
with the company's other information services products. This competition will
become more intense as telecommunications systems are improved and new
techniques of data transmission are developed.
The business publications of the company remain highly competitive. In
its various news publishing activities, Dow Jones competes with a wide
spectrum of other information media. All metropolitan general newspapers and
many small city or suburban papers carry business and financial pages or
sections, including securities quotations. In addition, specialized magazines
in the economics field, as well as general news magazines, publish substantial
amounts of business material. Nearly all these publications seek to sell
advertising space and much of this effort is directly or indirectly
competitive with Dow Jones' publications. The company also competes with
television and radio for advertisers.
All of the community newspapers operating under Ottaway Newspapers, Inc.
compete with metropolitan general newspapers and most compete with other
newspapers available in their respective sales areas.
Research and Development
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Research and development expenses were $52,522,000 in 1994, $40,705,000
in 1993 and $32,320,000 in 1992.
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ITEM 2. Properties.
Dow Jones operates seventeen plants with an aggregate of approximately 1
million square feet for the printing of its domestic publications. Printing
plants are located in Palo Alto and Riverside, California; Denver, Colorado;
Orlando, Florida; LaGrange, Georgia; Naperville and Highland, Illinois; Des
Moines, Iowa; White Oak, Maryland; Chicopee Falls, Massachusetts; South
Brunswick, New Jersey; Charlotte, North Carolina; Bowling Green, Ohio; Sharon,
Pennsylvania; Dallas and Beaumont, Texas; and Federal Way, Washington. All
plants include office space. All are owned in fee except the Palo Alto,
California plant, which is located on 8.5 acres under a lease to Dow Jones for
50 years, expiring in 2015.
Other facilities owned in fee with a total of approximately 870,000
square feet house news, sales, administrative, research, computer and
operations staff. These facilities are located in Chicopee Falls,
Massachusetts and South Brunswick, New Jersey.
Dow Jones occupies two major leased facilities in New York City:
editorial and executive staff occupy 350,000 square feet, while advertising
sales staff occupy 106,000 square feet at a separate location. The company
also leases other business and editorial offices in numerous separate
locations around the world, including 50,000 square feet in two locations in
Hong Kong.
Dow Jones Telerate leases approximately 23,000 square feet in New York
City, 325,000 in Jersey City, New Jersey, 115,000 at three locations in
London, England, 70,000 at three locations in Toronto, Ontario and 30,000 at
two locations in Hong Kong. In addition, Dow Jones Telerate leases space
around the world for its operations.
Ottaway Newspapers operates in 26 locations, including a 24,000 square
foot administrative headquarters in Campbell Hall, New York. These facilities
are located in Sun City, Arizona; Santa Cruz, California; Danbury,
Connecticut; Ashland, Kentucky; Beverly, Hyannis, New Bedford, Gloucester,
Nantucket, Peabody, Fall River and Newburyport, Massachusetts; Traverse City,
Michigan; Mankato, Minnesota; Joplin, Missouri; Exeter and Hampton, New
Hampshire; Middletown, Oneonta, Plattsburgh and Port Jervis, New York;
Medford, Oregon; and Grove City, Sharon, Stroudsburg and Sunbury,
Pennsylvania. Local printing facilities, which include office space, total
approximately 1,087,000 square feet. All facilities are owned in fee.
The company believes that its current facilities are suitable and
adequate, well maintained and in good condition. Older facilities have been
modernized and expanded to meet present and anticipated needs. It is
estimated that between 65% and 75% of the capacity of the company's existing
production facilities is being utilized.
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ITEM 3. Legal Proceedings.
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
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PAGE 13
Executive Officers of the Registrant
- ------------------------------------
Each executive officer is elected annually to serve at the pleasure of
the Board of Directors.
All executive officers named below have been employed by the company
for more than five years.
Peter R. Kann, age 52, Chairman of the Board since July 1991, Chief
Executive Officer since January 1991 and Publisher of The Wall Street
Journal since January 1989, served as President from July 1989 to July 1991
and Chief Operating Officer from July 1989 to December 1990, Executive Vice
President from 1985 to 1989 and Associate Publisher of The Wall Street
Journal from 1979 to 1988.
Kenneth L. Burenga, age 50, President of the company and President of
The Wall Street Journal since July 1991 and Chief Operating Officer since
January 1991, served as Executive Vice President from January 1991 to July
1991 and Senior Vice President from 1986 thru 1990, and General Manager from
January 1989 thru December 1990, as Chief Financial and Administrative
Officer from 1986 to 1988 and Vice President/Circulation of The Wall Street
Journal from 1980 to 1986.
James H. Ottaway Jr., age 57, Senior Vice President since 1986,
President of Magazines since February 1988, President of Affiliated
Companies Group since 1986, and Chairman of Ottaway Newspapers, Inc. since
1979, served as President of the International Group from February 1988 to
January 1995, as Vice President/Community Newspapers from 1980 to 1985 and
as President of Ottaway Newspapers, Inc. from 1970 to 1985 and its Chief
Executive from 1976 to January 1989.
Peter G. Skinner, age 50, Senior Vice President since November 1989,
General Counsel and Secretary since 1985 and President, Television since
January 1995, served as Vice President from 1985 to November 1989.
Carl M. Valenti, age 56, Senior Vice President and President and
Publisher of Dow Jones Telerate since May 1990, served as Vice President of
the company and President/Information Services Group from 1987 to 1990 and
as Vice President/Information Services Group from 1980 to 1987.
Kevin J. Roche, age 60, Vice President/Finance since 1986 and Chief
Financial Officer since January 1989, served as Comptroller from 1977 to
March 1987.
Thomas G. Hetzel, age 39, Comptroller since October 1993, served as
Associate Comptroller from 1992 to 1993 and Assistant Comptroller from 1988
to 1992.
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PART II.
ITEM 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
The company's common stock is listed on the New York Stock Exchange.
The class B common stock is not traded. The approximate number of
stockholders of record as of January 31, 1995, was 10,700 for common stock
and 4,500 for class B common stock. The company paid $.84 per share in
dividends in 1994 and $.80 per share in 1993, which represented an earnings
payout of 46.8% in 1994 and 54.1% in 1993.
<TABLE>
<CAPTION>
============================================================================
Market Price 1994 Market Price 1993
Quarters ----------------- Dividends ----------------- Dividends
Ended High Low Paid 1994 High Low Paid 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
March 31 $41 7/8 $35 1/2 $.21 $33 3/4 $27 1/8 $.20
June 30 40 3/8 31 .21 32 3/4 26 3/4 .20
September 30 32 1/4 28 3/8 .21 33 3/8 27 3/4 .20
December 31 31 7/8 28 1/8 .21 39 32 1/2 .20
============================================================================
</TABLE>
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PAGE 15
ITEM 6. Selected Financial Data.
See Management's Discussion and Analysis of Financial Condition and
Results of Operations for a discussion of factors that affect the
comparability of the information reflected in this table.
<TABLE>
<CAPTION>
The following table shows selected financial data for the most recent
five years:
============================================================================
(in thousands except
per share amounts) 1994 1993 1992 1991 1990
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $2,090,977 $1,931,816 $1,817,870 $1,725,079 $1,720,084
Income before
cumulative effect
of accounting
changes $181,180 $147,547 $118,391 $72,189 $106,923
Net income $178,173 $147,547 $107,586 $72,189 $106,923
- ----------------------------------------------------------------------------
Per Share Amounts:
Income before
cumulative effect
of accounting
changes $1.83 $1.48 $1.17 $.71 $1.06
Net income $1.80 $1.48 $1.06 $.71 $1.06
Dividends $ .84 $ .80 $ .76 $.76 $ .76
- ----------------------------------------------------------------------------
Average shares
outstanding 99,002 99,773 101,150 101,011 100,826
Total assets $2,445,766 $2,349,539 $2,372,035 $2,470,584 $2,591,377
Long-term debt,
excl. current
portion $295,552 $261,073 $334,718 $447,990 $607,805
- ----------------------------------------------------------------------------
Operating income
as a percent of
revenues 17.1% 16.4% 15.4% 14.0% 13.3%
Net income as a
percent of
revenues 8.5% 7.6% 5.9% 4.2% 6.2%
Net income as a
percent of stock-
holders' equity 12.0% 9.9% 7.4% 5.0% 7.4%
============================================================================
</TABLE>
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PAGE 16
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Net income in 1994 of $178.2 million, or $1.80 per share, increased
$30.6 million, or 20.8%, from 1993 net income of $147.5 million, or $1.48
per share. Growth in 1994 earnings was largely driven by robust gains in
both revenues and operating income at the information services segment.
Earnings in 1994 included the cumulative effect of the adoption of
Statement of Financial Accounting Standards (SFAS) No. 112, "Employers'
Accounting for Postemployment Benefits," which reduced net income by $3
million, or three cents per share. Excluding the cumulative effect of this
accounting change, net income of $181.2 million would have been $33.6
million, or 22.8%, better than 1993 earnings, continuing the sharp upward
trend in earnings begun in 1992.
Earnings in 1993 were up $40 million, or 37.1%, from 1992 net income of
$107.6 million, or $1.06 per share. Net income in 1992 included the
cumulative effect of the adoption of SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," which reduced net income
$32.4 million, or $.32 per share, and SFAS No. 109, "Accounting for Income
Taxes," which increased earnings $21.6 million, or $.21 per share. Also
included in 1992 net income were after-tax charges totaling $8 million, or
eight cents per share, for the write-down of certain investments. Excluding
these nonrecurring items, net income in 1993 would have increased $21.1
million, or 16.7%, from 1992 earnings.
Net income in 1992, excluding nonrecurring items, increased $22.4
million, or 21.5%, from 1991.
A summary of the results of operations for each of the company's
principal business segments as well as financial data by geographic area is
displayed in Note 15 to the financial statements.
OPERATING INCOME
In 1994 operating income increased $41.9 million, or 13.2%, reaching a
record $358.3 million. Operating income of $316.5 million in 1993 was up
$35.8 million, or 12.7%, from 1992's operating income of $280.7 million. In
1992 operating income increased $40 million, or 16.6%. The operating margin
grew to 17.1% in 1994 from 16.4% in 1993 and 15.4% in 1992.
Foreign operations, primarily at Dow Jones Telerate, provided $142.3
million, or roughly 40%, of 1994 operating income. Income from foreign
operations was up 12.7% from $126.2 million in 1993. Domestic operating
income in 1994 increased 13% to $234.5 million. In 1993 operating income
from foreign operations grew 21%, while domestic operating income was up
7.4%.
<PAGE>
PAGE 17
Operating income at the information services segment, which includes
both the Dow Jones/Telerate and Business Information Services groups, grew
$41.5 million, or 26.4%, to $199 million in 1994. Information services
operating income comprised 55.5% of consolidated operating income, up from
49.7% in 1993. Revenues advanced $114.8 million, or 13.3%, while operating
expenses increased $73.3 million, or 10.4%. Operating income in 1994
benefited from fluctuations in foreign currency exchange rates, chiefly in
the Asia/Pacific region. Excluding this benefit, 1994 operating income would
have still increased 23.4%.
Dow Jones/Telerate operating income grew 30% in 1994; however,
operating income at the Business Information Services group was down 3.6%.
The operating margin for the information services segment reached 20.4% in
1994, up from 18.3% in 1993 and 18.6% in 1992. Expenses in 1994 continued
to include substantial investments in technical improvements, product
development and enhanced information.
In 1993 operating income for this segment grew $6.7 million, or 4.5%,
as revenues advanced $52.6 million, or 6.5%, and operating expenses
increased $45.9 million, or 7%. Operating income at this segment rose 2.1%
in 1992.
The business publications segment includes The Wall Street Journal and
its overseas editions, Barron's, other domestic and foreign publications and
global initiatives into television. This segment's operating income in 1994
decreased $2 million, or 1.4%, to $141.6 million and accounted for 39.5% of
the company's 1994 operating profit versus 45.4% in 1993.
The company's global television initiatives include European Business
News (EBN), which is 70% owned by Dow Jones and 30% owned by an affiliate of
Tele-Communications Inc. EBN launched a European business news channel in
the first quarter of 1995. Excluding television operations, business
publications operating income would have increased $6.8 million, or 4.5%, in
1994.
Business publications revenues were up $36.8 million, or 4.5%, in 1994.
Operating expenses rose $38.8 million, or 5.7%. Operating income for the
segment in 1993 increased $28.6 million, or 24.8%, to $143.7 million, after
climbing $33.6 million, or 41.3%, to $115.1 million in 1992. The operating
margin for the business publications segment was 16.4% in 1994, 17.4% in
1993 and 14.9% in 1992.
Community newspapers segment operating income for 1994 of $36.2 million
grew $3.6 million, or 11.1%. This segment contains the Ottaway Newspapers
group of 20 daily newspapers. The operating income gain was primarily due
to higher advertising revenue and continuing cost controls. Operating
income was up $0.9 million, or 2.9%, in 1993 and $4.7 million, or 17.6%, in
1992. The operating margin for the community newspapers segment improved to
14.3% in 1994 compared with 13.3% in 1993 and 13.5% in 1992.
<PAGE>
PAGE 18
REVENUES
In 1994 revenues advanced $159.2 million, or 8.2%, reaching a record
$2.1 billion. Revenues from domestic operations increased 6% to $1.5
billion in 1994, accounting for about 70% of total revenues. Revenues from
foreign components grew 14.2% to $602 million in 1994. Total revenues
increased $113.9 million, or 6.3%, to $1.9 billion in 1993.
Advertising revenue in 1994 grew $26 million, or 3.7%, to $725 million.
In 1993 advertising revenue was up $44.4 million, or 6.8%, from 1992.
Circulation revenue in 1994 improved $16.3 million, or 4.7%, growing to
$364.2 million. In 1993 circulation revenue increased $14.3 million, or
4.3%, to $347.8 million.
Information services 1994 revenue, which composed about 47% of the
company's revenue, climbed $114.8 million, or 13.3%, to $976.8 million.
Excluding a net benefit from fluctuations in foreign currency exchange
rates, information services revenue would have increased $106.2 million, or
12.3%. In 1993 information services revenue grew $52.6 million, or 6.5%, to
$862 million from $809.4 million in 1992.
Dow Jones/Telerate, which primarily serves professionals in the
financial services industry and includes Dow Jones Telerate and the
company's proprietary newswires, produced 90% of information services
revenue in 1994. Dow Jones/Telerate revenues of $877.4 million grew $98.5
million, or 12.6%. About four-fifths of this increase resulted from world-
wide volume gains attributable to growth in both the number of terminals and
enhanced and expanded services. Dow Jones/Telerate's three regions:
Americas; Europe, Middle East, Africa; and Asia/Pacific; all posted double
digit revenue growth. Americas revenue climbed 12.1%, revenue from Europe,
Middle East, Africa increased 12%, while Asia/Pacific revenue was up 15.1%.
In 1993 Americas revenue was up 5.7%, revenues from Europe, Middle East,
Africa rose 6.5% and Asia/Pacific revenue increased 5%.
The remaining 10% of information services revenue was earned by
Business Information Services, which serves corporate, individual business
consumer and private investor needs through Dow Jones News/Retrieval and
related services. Business Information Services revenue was up 19.6% in
1994 after increasing 13.1% in 1993. Volume gains at Dow Jones News/
Retrieval were the primary reason for revenue growth in 1994 and 1993.
Business publications 1994 revenues of $862 million advanced 4.5% from
1993 revenues of $825.2 million. Revenues in 1993 were up 6.7% from 1992
revenues of $773.8 million. Advertising revenue increased 3.7% in 1994,
with the Journal, its overseas editions and Barron's all posting gains.
Advertising linage in 1994 at The Wall Street Journal, the largest component
of business publications, declined 1.2% after rising 3.3% in 1993.
<PAGE>
PAGE 19
The decrease in linage at the Journal was the result of a 9.9% drop in
financial advertising in 1994, following an increase of 13.4% in 1993.
Financial linage is volatile and fluctuates with the level of new debt and
equity offerings, which in 1994 were constrained by the upswing in interest
rates. This category comprised 31.7% of total Journal advertising linage in
1994, compared with 34.8% in 1993, 31.2% in 1992 and 39% at its peak in
1987. General linage was up 3.1% in 1994, following declines of 0.9% in
1993 and 1.2% in 1992. Journal advertising rates were raised an average of
4% in 1994, 5% in 1993 and 4.5% in 1992.
Barron's national advertising pages increased 2.4% in 1994 and 6.9% in
1993, after being flat in 1992. Advertising revenue from overseas
publications, including The Asian Wall Street Journal, The Wall Street
Journal Europe and Far Eastern Economic Review, gained 23.3% in 1994.
Overseas advertising revenue advanced 7.7% in 1993.
Circulation revenue at business publications grew 5.4% in 1994. Wall
Street Journal revenue in 1994 benefited from a mid-1993 increase of 7.2% to
$149 in the Journal's annual subscription price. Effective January 1, 1995,
the price of an annual subscription was increased 10% to $164, while an
annual Barron's subscription was raised 4.7% to $135 from $129. The
newsstand price of the Journal remained at 75 cents in 1994, and it is not
scheduled to change in 1995. Barron's newsstand price was raised 20% to
$3.00 from $2.50 in June 1994. Including the Journal's European and Asian
editions, world-wide average circulation decreased to 1,914,400 in 1994,
compared with 1,941,600 in 1993 and 1,920,300 in 1992. Barron's average
circulation for 1994 was up 4.9% to 278,300, following a 5.3% gain in 1993.
Revenues at Ottaway Newspapers, Inc., Dow Jones' community newspapers
subsidiary, increased $7.6 million, or 3.1%, in 1994. Revenues were up 4.2%
in 1993 and 3.4% in 1992. Ottaway's advertising revenue in 1994 grew $6.3
million, or 3.7%, chiefly as a result of rate increases and sales gains in
preprinted inserts. Advertising revenue rose 4.1% in 1993 and 2.1% in 1992.
Advertising linage edged up 0.2% in 1994 and 0.6% in 1993; linage declined
3.9% in 1992. Circulation revenue improved $1.3 million, or 1.8%, in 1994,
after increases of 3.8% and 6.2% in 1993 and 1992, respectively. Average
circulation for Ottaway's 20 daily newspapers was essentially flat at about
551,000 from 1991-1994.
<PAGE>
PAGE 20
OPERATING EXPENSES
Operating expenses in 1994 grew $117.3 million, or 7.3%, to $1.7
billion, primarily due to increases in spending on technical development and
product enhancements, fees to outside information providers (royalties),
salaries and depreciation. In 1993 operating expenses increased $78.2
million, or 5.1%, in part due to increases in royalties, newsprint costs and
depreciation. Operating expenses in 1992 increased $52.8 million, or 3.6%,
with higher information services costs moderated by lower newsprint expense.
In 1994 the company spent $52.5 million on research and development
compared with $40.7 million and $32.3 million in 1993 and 1992,
respectively. In addition to research and development costs, significant
enhancements made to existing products resulted in a $22.7 million increase
in 1994 expenses.
Information services expenses were up $73.3 million, or 10.4%, to
$777.9 million in 1994, mainly due to continuing investments in technical
development, network upgrades and product and information enhancements.
Excluding the effect of foreign currency rate fluctuations, operating
expenses increased $69.4 million, or 9.8%. At December 31, 1994, the number
of full-time employees for information services was up 6.4% from year-end
1993.
Business publications expenses increased $38.8 million, or 5.7%, to
$720.4 million in 1994. The increase was chiefly due to higher selling and
operations costs for print publications and expansion of television
operations. In 1994 television and multimedia initiatives increased segment
expenses $9.1 million. Excluding television-related expenses, business
publications expenses increased $29.7 million, or 4.4%. Newsprint expense
was up slightly as consumption and the average cost of newsprint remained
stable relative to 1993. However, newsprint prices are expected to increase
sharply, possibly in excess of 40%, in 1995 as both the list prices of
newsprint increase and currently available discounts decline.
Business publications operating expenses for 1993 of $681.6 million
increased $22.9 million, or 3.5%, partially due to higher newsprint expense
reflecting increased consumption and a higher average price. In 1992
operating expenses of $658.7 million were essentially flat with the prior
year.
Community newspapers expenses were up $4 million, or 1.9%, in 1994.
Higher selling costs and depreciation were moderated by slightly lower
volume-related costs for printing, distribution and newsprint. Operating
expenses increased 4.4% in 1993 and 1.4% in 1992.
In 1994 purchases of newsprint containing recycled fiber reached 70% of
total purchases, up from 54% in 1993 and 39% in 1992. The company expects
purchases of newsprint containing recycled material to remain high in 1995.
<PAGE>
PAGE 21
Salaries and wages were 31% of total operating expenses in 1994 and
1993 and 30% in 1992. Salaries and wages increased 5.8% in 1994, following
increases of 6.4% in 1993 and 8.4% in 1992. At December 31, 1994, Dow Jones
employed 10,265 full-time employees, up 2.6% from 10,006 at year-end 1993.
OTHER INCOME / DEDUCTIONS
Interest expense of $16.9 million decreased $5.7 million, or 25.3%,
from 1993 due to a lower average debt level. Long-term debt outstanding
averaged $251.1 million during 1994 compared with $339.9 million in 1993 and
$385.4 million in 1992.
Equity in losses of associated companies for 1994 was $5.4 million
compared with break-even results in 1993. The company's share of earnings
from its newsprint affiliates of $1.9 million was 16.7% worse than earnings
of $2.2 million in 1993. Equity earnings from newsprint mill affiliates in
1993 improved $6.9 million from losses of $4.7 million in 1992. Results
from the newsprint mills should improve in 1995 as price increases and lower
discounts for newsprint yield higher revenues.
Equity losses in 1994 included the first full year of operations for
Asia Business News (ABN), a business and financial news television channel
broadcasting in Asia. ABN, for which Dow Jones provides news and
programming, is part of the company's global business television
initiative. Also contained in equity results for 1994 were losses for BIZ,
a monthly controlled-circulation magazine, which ceased publication with its
January 1995 issue.
The fourth quarters of 1993 and 1992 included write-downs of
investments totaling $8.2 million ($5.4 million after taxes) and $13.4
million ($8 million after taxes), respectively.
INCOME TAXES
The effective income tax rate was 46.5% in 1994 versus 48.5% in 1993
and 49.5% in 1992. The lower 1994 rate was chiefly caused by the lesser
impact of stable nondeductible goodwill amortization on higher 1994 pretax
earnings and an easing of state income taxes. Excluding goodwill
amortization, the effective income tax rate would have been 41.5% in 1994,
42.4% in 1993 and 42.1% in 1992.
In 1992 SFAS No. 109, "Accounting for Income Taxes," was adopted. The
cumulative effect of the accounting change was a benefit of $21.6 million,
or $.21 per share, to 1992 earnings.
<PAGE>
PAGE 22
INVESTMENTS
During 1994, businesses and investments acquired totaled $47.3 million.
These investments included acquiring minority stakes in United States
Satellite Broadcasting Company, Inc. (USSB), a digital satellite television
company, and VWD-Vereinigte Wirtschaftsdienste GmbH, a German news agency.
The company also increased the amount of its investments in Asia Business
News, Minex Corp., a Tokyo-based consortium offering foreign exchange
transaction services, and a newsprint mill affiliate.
In January 1995, Charter Financial Publishing Corp., of Shrewsbury, New
Jersey, was acquired. Charter Financial publishes Investment Advisor, a
controlled-circulation monthly magazine for financial advisors and Realty
Stock Review, a monthly paid-circulation newsletter on real estate.
FINANCIAL POSITION
Cash provided by operations in 1994 was $401.1 million, up $65.4
million, or 19.5%, from $335.7 million in 1993 and up 31.2% from $305.6
million in 1992. The gain in earnings and a change in working capital were
chiefly responsible for the increase. In 1994, primarily using cash
generated through operations, the company paid dividends of $83.4 million,
funded $222.4 million in capital expenditures, made investments of $47.3
million and purchased 3,782,000 shares of its common stock for $118.2
million. The year-end cash balance increased to $10.9 million in 1994 from
$5.7 million at year-end 1993.
At December 31, 1994, long-term debt, excluding current maturities, was
$295.6 million, an increase of $34.5 million, or 13.2%, from $261.1 million
at year-end 1993. The debt-to-equity ratio at December 31, 1994, was 19.9%,
compared with 17.5% at 1993's year end. Long-term debt peaked at $719
million on December 31, 1989, when the debt-to-equity ratio was 51.2%.
Commercial paper was used to retire long-term notes of $192 million which
matured in 1994.
The company expects cash provided by operations in 1995 to be
sufficient to meet its normal recurring operating commitments, fund capital
expenditures of roughly $200 million and pay dividends of about $90 million.
Capital spending in 1995 will include press equipment, which will enable Dow
Jones' domestic print publications to offer advertisers limited four-color
capability, as well as continued investments in the technical infrastructure
of print and electronic services. Depending on business opportunities and
market conditions, cash from operations may be used for strategic
acquisitions, retirement of long-term debt or treasury share purchases. At
December 31, 1994, the company had authorization to acquire an additional
1.6 million shares of its common stock.
<PAGE>
PAGE 23
The working capital ratio, excluding unearned revenue, was 1 to 1 as of
year-end 1994 and 1993. Return on equity rose to 12% in 1994 from 9.9% in
1993 and 7.4% in 1992. On January 18, 1995, Dow Jones announced that it
would raise its quarterly dividend to 23 cents per share from 21 cents per
share, an increase of 9.5%.
In January 1995, the company sold an 80% interest in SportsTicker, a
real-time sports news and information unit, to Entertainment Sports
Programming Network, Inc. (ESPN), a subsidiary of Capital Cities/ABC. Dow
Jones retains a 20% interest in the service and plans to collaborate with
ESPN to produce business-of-sports TV programming.
OUTLOOK
Consolidated earnings are expected to improve in 1995. However, the
growth in 1995 will be tempered in comparison to the high growth rates
posted in recent years. The company plans a substantial increase in
spending to develop new products and enhance existing products. Initiatives
in 1995 include expansion of world-wide television activities, four-color
printing capability for domestic publications and continued development of
advanced platforms for the storage and retrieval of text, user-friendly
front-end software for customer terminals and an interactive edition of The
Wall Street Journal.
Information services revenues in 1995 are expected to increase at a
rate consistent with the annual rates of growth achieved over the past
several years. It is expected that a significant portion of the growth will
come from Dow Jones Telerate's overseas operations. Dow Jones Telerate's
sales of digital feeds and trading room systems should continue to fuel
revenue growth.
Information services 1995 expenses will also likely increase at a rate
similar to those seen in recent years as this segment continues to invest in
expanded information, network enhancements and product improvements. Dow
Jones Telerate will move forward in integrating all of its information into
its more flexible Telerate Workstation, which was introduced in January
1995.
In 1995 business publications revenues are expected to show
improvement, primarily from rate increases. National advertising rates at
The Wall Street Journal were raised almost four percent for 1995.
Improvement in domestic Journal advertising linage is largely dependent on
the continuing strength of the overall U.S. economy and, specifically, on
the activity in financial markets. Advertising rates at the Journal's
overseas editions were raised an average of about seven percent for 1995.
Circulation revenues in 1995 for both The Wall Street Journal and Barron's
will begin to reflect the effect of subscription rate increases which went
into effect January 1, 1995.
<PAGE>
PAGE 24
Business publications expenses in 1995 will be affected by price
increases in newsprint and second class postage. On average, newsprint
prices are expected to increase about 40% in 1995 as list prices increase
and discounts given by suppliers decrease. Also, second class postage rates
were increased 12.5% effective January 1, 1995. These increases are likely
to cause business publications operating income to fall in 1995. However,
the effect of newsprint price increases on consolidated net income is
expected to be mitigated by improvements in earnings at the company's
newsprint mill affiliates. Even with the price increase, newsprint expense
is expected to comprise only about 7% of the company's total operating
expenses in 1995.
Operating income at business publications will also be held down in
1995 as the expansion of world-wide television initiatives is pursued.
European Business News launched its 19-hour a day channel in 1995's first
quarter.
Following revenue increases at the community newspapers segment of 3.1%
in 1994 and 4.2% in 1993, revenues are expected to grow at a higher level in
1995 as the segment benefits from an improved domestic economy and the
acquisition of the Salem (Massachusetts) Evening News. However, community
newspapers expenses will also be affected by increased newsprint prices.
<PAGE>
PAGE 25
<TABLE>
<CAPTION>
ITEM 8. Financial Statements and Supplementary Data
CONSOLIDATED STATEMENTS OF INCOME
Dow Jones & Company, Inc.
For the years ended December 31, 1994, 1993 and 1992
==============================================================================
(in thousands except per share amounts) 1994 1993 1992
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES:
Information services $ 976,800 $ 861,979 $ 809,387
Advertising 724,990 699,009 654,598
Circulation and other 389,187 370,828 353,885
- ------------------------------------------------------------------------------
Total revenues 2,090,977 1,931,816 1,817,870
- ------------------------------------------------------------------------------
EXPENSES:
News, operations and development 642,184 580,636 534,984
Selling, administrative and general 681,244 642,772 634,766
Newsprint 107,178 106,357 93,299
Second class postage and
carrier delivery 96,751 96,926 94,818
Depreciation and amortization 205,303 188,665 179,312
- ------------------------------------------------------------------------------
Operating expenses 1,732,660 1,615,356 1,537,179
- ------------------------------------------------------------------------------
Operating income 358,317 316,460 280,691
OTHER INCOME (DEDUCTIONS):
Investment income 4,884 5,060 6,829
Interest expense (16,858) (22,555) (30,355)
Equity in (losses) earnings of
associated companies (Note 3) (5,434) 72 (4,190)
Other, net (Note 2) (2,097) (12,797) (18,638)
- ------------------------------------------------------------------------------
Income before income taxes (Note 7) 338,812 286,240 234,337
Income taxes (Note 7) 157,632 138,693 115,946
- ------------------------------------------------------------------------------
Income before cumulative effect of
accounting changes 181,180 147,547 118,391
Cumulative effect of accounting changes
(Notes 7 & 10) (3,007) (10,805)
- ------------------------------------------------------------------------------
NET INCOME $ 178,173 $ 147,547 $ 107,586
==============================================================================
PER SHARE (Note 12):
Income before cumulative effect of
accounting changes $1.83 $1.48 $1.17
Cumulative effect of accounting changes (.03) (.11)
Net income 1.80 1.48 1.06
Cash dividends .84 .80 .76
==============================================================================
Weighted average shares outstanding 99,002 99,773 101,150
==============================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
PAGE 26
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
Dow Jones & Company, Inc.
December 31, 1994 and 1993
===============================================================================
(dollars in thousands) 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 10,888 $ 5,652
Accounts receivable -- trade, net of
allowance for doubtful accounts of
$14,870 in 1994 and $14,548 in 1993 229,687 192,855
Newsprint inventory (Note 4) 7,832 7,576
Deferred income taxes (Note 7) 18,604 15,784
Prepaid expenses 21,483 22,966
Other current assets 21,636 23,628
- -------------------------------------------------------------------------------
Total current assets 310,130 268,461
- -------------------------------------------------------------------------------
Investments in Associated Companies, at equity (Note 3) 90,231 70,653
Other Investments (Notes 2, 5 & 16) 72,835 55,009
Plant and Property, at cost:
Land 22,675 22,942
Buildings and improvements 341,309 322,899
Equipment 1,420,839 1,302,757
Construction in progress 73,946 27,155
- -------------------------------------------------------------------------------
1,858,769 1,675,753
Less, Allowance for depreciation 1,216,680 1,081,286
- -------------------------------------------------------------------------------
642,089 594,467
Excess of Cost over Net Assets of Businesses
Acquired, less accumulated amortization of
$283,712 in 1994 and $243,424 in 1993 1,304,953 1,347,757
Deferred Income Taxes (Note 7) 10,675
Other Assets 14,853 13,192
- -------------------------------------------------------------------------------
Total assets $2,445,766 $2,349,539
===============================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
PAGE 27
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
Dow Jones & Company, Inc.
December 31, 1994 and 1993
===============================================================================
(dollars in thousands) 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES:
Current Liabilities:
Accounts payable -- trade $ 89,006 $ 69,032
Accrued wages, salaries and commissions 56,331 46,883
Profit sharing and other retirement plan
contributions payable (Note 9) 35,029 35,122
Other payables 57,040 53,524
Income taxes (Note 7) 68,694 56,739
Unearned revenue 219,880 204,220
Current maturities of long-term debt (Note 5) 5,318 5,318
- -------------------------------------------------------------------------------
Total current liabilities 531,298 470,838
Long-Term Debt (Notes 5 & 16) 295,552 261,073
Deferred Compensation, principally postretirement
benefit obligation (Note 10) 133,334 118,985
Deferred Income Taxes (Note 7) 5,327
Other Liabilities 3,971 5,375
- -------------------------------------------------------------------------------
Total liabilities 964,155 861,598
- -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Common Stock, par value $1 per share; authorized
135,000,000 shares; issued 80,161,777 shares
in 1994 and 80,002,971 shares in 1993 80,162 80,003
Class B Common Stock, convertible, par value $1
per share; authorized 25,000,000 shares; issued
22,019,244 shares in 1994 and 22,178,050 shares
in 1993 22,019 22,178
- -------------------------------------------------------------------------------
102,181 102,181
Additional Paid-in Capital 134,017 135,109
Retained Earnings 1,404,346 1,309,533
Cumulative Translation Adjustment (6,219) (4,889)
- -------------------------------------------------------------------------------
1,634,325 1,541,934
Less, Treasury Stock at cost, 5,556,839 shares in
1994 and 2,396,573 shares in 1993 152,714 53,993
- -------------------------------------------------------------------------------
Total stockholders' equity 1,481,611 1,487,941
- -------------------------------------------------------------------------------
Total liabilities and stockholders' equity $2,445,766 $2,349,539
===============================================================================
</TABLE>
<PAGE>
PAGE 28
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dow Jones & Company, Inc.
For the years ended December 31, 1994, 1993 and 1992
======================================================================================
(in thousands) 1994 1993 1992
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $178,173 $147,547 $107,586
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 164,383 147,495 138,372
Amortization of excess of cost over net
assets of businesses acquired 40,920 41,170 40,940
(Gain) on sale of businesses and investments (3,097) (868) (1,121)
(Gain) loss on disposition of plant and property (1,965) (529) 2,011
Write-down of investments 3,582 8,171 13,422
Cumulative effect of accounting changes 3,007 10,805
Equity in losses (earnings) of associated
companies, net of distributions 6,762 4,690 4,423
Changes in assets and liabilities:
Accounts receivable - trade (35,604) (29,679) 371
Unearned revenue 14,376 13,451 1,554
Newsprint inventory (256) (346) 302
Other current assets 2,467 (3,834) (3,552)
Accounts payable and accrued liabilities 22,220 1,252 (2,330)
Income taxes 12,948 1,429 (2,514)
Deferred taxes (16,867) (5,724) (16,720)
Deferred compensation 9,387 8,716 10,285
Other, net 656 2,768 1,771
--------------------------------------------------------------------------------------
Net cash provided by operating activities 401,092 335,709 305,605
--------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Additions to plant and property (222,434) (159,943) (125,626)
Disposition of plant and property 18,608 7,542 11,567
Businesses and investments acquired, net of
cash received (47,327) (24,915) (10,608)
Businesses and investments sold, net of cash given 5,218 4,694 3,083
Return of capital by investees 2,527 1,859
Proceeds from guaranteed investment contract 5,318 5,318 5,318
Investees' (loans) repayments (3,632) (185) 100
--------------------------------------------------------------------------------------
Net cash used in investing activities (241,722) (165,630) (116,166)
--------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Cash dividends (83,360) (79,833) (76,912)
Increase in long-term debt 231,679 47,278 86,055
Reduction of long-term debt (197,318) (121,188) (199,746)
Proceeds from sale under stock purchase plans 17,001 22,553 10,815
Purchase of treasury stock (118,219) (48,312) (28,429)
--------------------------------------------------------------------------------------
Net cash used in financing activities (150,217) (179,502) (208,217)
--------------------------------------------------------------------------------------
</TABLE>
<PAGE>
PAGE 29
<TABLE>
<CAPTION>
<S> <C> <C> <C>
EFFECT OF EXCHANGE RATE CHANGES ON CASH (3,917) (1,341) (828)
--------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,236 (10,764) (19,606)
Cash and cash equivalents at beginning of year 5,652 16,416 36,022
--------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 10,888 $ 5,652 $ 16,416
======================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
PAGE 30
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Dow Jones & Company, Inc.
For the years ended December 31, 1994, 1993 and 1992
======================================================================================================================
Class B Additional Cumulative Treasury Stock
(in thousands Common Common Paid-in Retained Translation ------------------
except shares) Stock Stock Capital Earnings Adjustment Shares Amount Total
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1991 $79,586 $22,595 $142,908 $1,211,145 $ 2,293 (1,063,193) $ (20,626) $1,437,901
Net income - 1992 107,586 107,586
Dividends, $.76 per share (76,912) (76,912)
Translation adjustment (5,117) (5,117)
Conversion of class B common
stock into common stock 274 (274)
Capital changes of investee (26) (26)
Sales under stock purchase
plans (7,731) 444,383 19,295 11,564
Purchase of treasury stock (958,942) (28,429) (28,429)
- ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1992 79,860 22,321 135,151 1,241,819 (2,824)(1,577,752) (29,760) 1,446,567
Net income - 1993 147,547 147,547
Dividends, $.80 per share (79,833) (79,833)
Translation adjustment (2,065) (2,065)
Conversion of class B common
stock into common stock 143 (143)
Sales under stock purchase
plans (42) 849,179 24,079 24,037
Purchase of treasury stock (1,668,000) (48,312) (48,312)
- ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1993 80,003 22,178 135,109 1,309,533 (4,889)(2,396,573) (53,993) 1,487,941
Net income - 1994 178,173 178,173
Dividends, $.84 per share (83,360) (83,360)
Translation adjustment (1,330) (1,330)
Conversion of class B common
stock into common stock 159 (159)
Capital changes of investee 157 157
Sales under stock purchase
plans (Note 8) (1,249) 621,734 19,498 18,249
Purchase of treasury stock (3,782,000) (118,219) (118,219)
- ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994 $80,162 $22,019 $134,017 $1,404,346 $(6,219)(5,556,839) $(152,714) $1,481,611
======================================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
PAGE 31
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE CONSOLIDATED FINANCIAL STATEMENTS include the accounts of the company
and its majority-owned subsidiaries. The equity method of accounting is
used for companies and other investments in which the company's common stock
ownership and partnership equity is at least 20% and not more than 50% (see
Note 3). All significant intercompany transactions are eliminated in
consolidation.
UNEARNED REVENUE is recorded as earned, pro rata on a monthly basis, over
the life of subscriptions. Costs in connection with the procurement of
subscriptions are charged to expense as incurred.
DEPRECIATION is computed using straight-line or declining-balance methods
over the estimated useful lives of the respective assets or terms of the
related leases. Upon retirement or sale, the cost of disposed assets and
the related accumulated depreciation are deducted from the respective
accounts and the resulting gain or loss is included in income.
MAINTENANCE AND REPAIRS are charged to expense as incurred. Major renewals,
betterments and additions are capitalized.
RESEARCH AND DEVELOPMENT expenditures are charged to expense as incurred.
Research and development expenses were $52,522,000 in 1994, $40,705,000 in
1993 and $32,320,000 in 1992.
CASH EQUIVALENTS are highly liquid investments with a maturity of three
months or less when purchased.
NEWSPRINT INVENTORY is stated at the lower of last-in, first-out (LIFO) cost
or market (see Note 4).
DEFERRED INCOME TAXES are provided for temporary differences in bases
between financial statement and income tax assets and liabilities. In 1992,
the company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." Accordingly, deferred tax assets and
liabilities are recalculated annually at tax rates then in effect (see Note
7).
THE EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED (GOODWILL) is
amortized using the straight-line method over various periods, principally
forty years. The company evaluates annually whether there has been a
permanent impairment in the value of goodwill. Factors considered in the
evaluation include expected future cash flows from operations of businesses
acquired and the market value of comparable companies.
<PAGE>
PAGE 32
FOREIGN CURRENCY TRANSLATION of the assets and liabilities of subsidiaries
whose functional currency is not the U.S. dollar is determined at the
appropriate year-end exchange rates, while results of operations are
translated at the average rates of exchange in effect throughout the year.
The resultant translation adjustment is recorded directly to Stockholders'
Equity. Gains and losses arising from translation of financial statements
for foreign subsidiaries where the U.S. dollar is the functional currency as
well as from all foreign currency transactions are included in income.
FORWARD EXCHANGE CONTRACTS are entered into to hedge contracted revenue
streams from foreign currency exchange rate fluctuations. As such, these
nonspeculative forward exchange contracts are not recorded on the company's
balance sheets. Also, unrealized gains and losses on these forward exchange
contracts are deferred and recognized upon settlement of the related
transactions. Accordingly, cash flows resulting from forward exchange
contract settlements are classified as cash provided by operations as are
the corresponding cash flows from the revenue streams being hedged (see Note
16).
ACCOUNTING CHANGES were adopted in response to recently issued accounting
standards. Effective January 1, 1994, the company adopted Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits." The cumulative effect of this change in
accounting was a charge against earnings of $3,007,000 (see Note 10).
Effective January 1, 1992, the company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." A charge against earnings of $32,370,000 was
recorded (see Note 10). As of the same date, the company also adopted
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," by recording a benefit to earnings of $21,565,000 (see Note 7).
NOTE 2. OTHER, NET
Other, net includes gains/losses from foreign currency exchange rate
fluctuations, write-downs of investments and other miscellaneous non-
operating income and expenses.
Foreign exchange losses totaled $3,812,000 in 1994, $5,808,000 in 1993 and
$2,247,000 in 1992.
In 1993's fourth quarter, the company recorded a charge of $8.2 million
($5.4 million after taxes) to write down certain of its investments.
In the fourth quarter of 1992 a charge of $13.4 million ($8 million after
taxes) was recorded to write down certain of the company's investments. The
investments written down included the company's minority position in Groupe
Expansion, S.A., a French publisher of business magazines, as well as Groupe
Expansion-related companies, and the Chapel Hill News, a community newspaper
held by the company's Ottaway Newspapers, Inc. subsidiary.
<PAGE>
PAGE 33
NOTE 3. INVESTMENTS IN ASSOCIATED COMPANIES, AT EQUITY
The operating results of the principal associated companies accounted for by
the equity method have been included in the accompanying consolidated
financial statements on the following bases: Bear Island Paper Company,
L.P. (Bear Island Paper), 35% owned; Bear Island Timberlands Company, L.P.,
35% owned; and F.F. Soucy, Inc. & Partners and Company, Limited (Soucy), 40%
owned.
The company, as a limited partner in Bear Island Paper and Soucy, has signed
long-term contracts with both covering a substantial portion of its annual
newsprint requirements. Operating expenses of the company include the cost
of newsprint supplied by Bear Island Paper and Soucy of $41,828,000 in 1994
$39,558,000 in 1993, and $42,918,000 in 1992.
NOTE 4. NEWSPRINT INVENTORY
Newsprint inventory was determined by the last-in, first-out (LIFO) method.
If inventory had been valued by the average cost method, it would have been
approximately $6,449,000 and $4,976,000 higher in 1994 and 1993,
respectively.
NOTE 5. LONG-TERM DEBT
<TABLE>
<CAPTION>
Long-term debt at December 31 was as follows:
============================================================================
(in thousands) 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C>
Commercial paper, 5.90% to 6.23% at December 31, 1994 $263,643 $ 31,964
Notes payable, 7.7% and 8.4%, due February 1 and
December 1, 1994 191,882
Note payable, Associated Press, 7.75% 37,227 42,545
- ----------------------------------------------------------------------------
300,870 266,391
Less: current portion 5,318 5,318
- ----------------------------------------------------------------------------
Total long-term debt $295,552 $261,073
============================================================================
</TABLE>
Payments on long-term debt are due as follows: $5,318,000 in each year from
1995 through 1998, $268,962,000 in 1999 and $10,636,000 thereafter.
Interest payments were $21,989,000 in 1994, $22,459,000 in 1993 and
$31,825,000 in 1992.
<PAGE>
PAGE 34
The company can borrow up to $400 million through November 16, 1999, under a
revolving credit agreement with several banks. Borrowings may be made
either in Eurodollars with interest that approximates the applicable
Eurodollar rate or in U.S. dollars with interest that approximates the
bank's prime rate, its C/D rate or the federal funds rate. A fee of 0.08%
is payable on the commitment which the company may terminate or reduce at
any time. Prepayment of borrowings may be made without penalty. Although
there were no borrowings under the agreement as of December 31, 1994, the
company intends to maintain the commitment at least through December 31,
1995. Accordingly, commercial paper was classified as long-term.
The revolving credit agreement contains various restrictive covenants
principally relating to net worth, liabilities and cash flows. At December
31, 1994, consolidated net worth exceeded the minimum by $731 million and
total consolidated liabilities were $1.6 billion less than the maximum. The
company's cash flow, as defined in the agreement, in 1994 far exceeded that
required.
In 1994 notes of $192 million matured. This debt was refinanced by the
issuance of commercial paper, which is supported by the company's revolving
credit agreement.
The note payable to the Associated Press is owed by the company in equal
annual principal payments of $5,318,000 which commenced in 1991. The
company purchased a Guaranteed Investment Contract from an insurance company
which is supported by an irrevocable stand-by letter of credit. The
contract, which is included in Other Investments, provides for payments to
the company of interest and principal that match the payments owed the
Associated Press.
NOTE 6. CAPITAL STOCK
Common stock and class B common stock have the same dividend and liquidation
rights. Class B common stock has ten votes per share, free convertibility
into common stock on a one-for-one basis and can be transferred in class B
form only to members of the stockholder's family and certain others
affiliated with the stockholder.
<PAGE>
PAGE 35
NOTE 7. INCOME TAXES
Effective January 1, 1992, the company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under
Statement No. 109, deferred taxes are determined upon the cumulative
differences in bases between financial statement and income tax assets and
liabilities. The measurement of deferred taxes resulting from these
differences is based on currently enacted tax rates.
It was principally the recalculation of deferred taxes at the lower 34%
federal income tax rate enacted in the Tax Reform Act of 1986 that resulted
in the 1992 earnings benefit of $21.6 million, or $.21 per share, which has
been included in the cumulative effect of accounting changes. During 1993
the Omnibus Budget Reconciliation Act was enacted, which increased the
federal corporate income tax rate to 35%. The impact of remeasuring
deferred tax assets and liabilities at this higher rate was immaterial to
1993 income tax expense.
The company's combined current and noncurrent deferred taxes at December 31,
1994 and 1993, consisted of the following deferred tax assets and
liabilities:
<TABLE>
<CAPTION>
============================================================================
Deferred Tax Deferred Tax
Assets Liabilities
(in thousands) 1994 1993 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Depreciation $54,595 $65,727
Employee benefit plans, including
deferred compensation $65,375 $58,505 4,223 3,542
Sales and product allowances 3,384 3,119
Unremitted foreign earnings 8,304 7,765
Write-down of investments 5,615 5,615
All other 6,771 6,200 1,352 1,478
- ----------------------------------------------------------------------------
Total deferred taxes $89,449 $81,204 $60,170 $70,747
============================================================================
</TABLE>
The company has not established a deferred tax asset with respect to certain
foreign operating loss carryforwards which are not expected to be realized.
The components of income before income taxes and accounting changes were as
follows:
<TABLE>
<CAPTION>
============================================================================
(in thousands) 1994 1993 1992
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $187,889 $154,298 $123,809
Foreign 150,923 131,942 110,528
- ----------------------------------------------------------------------------
$338,812 $286,240 $234,337
============================================================================
</TABLE>
<PAGE>
PAGE 36
The following is a reconciliation of income tax expense to the amount
derived by multiplying income before income taxes and the cumulative effect
of accounting changes by the statutory federal income tax rate of 35% in
1994 and 1993 and 34% in 1992.
<TABLE>
<CAPTION>
============================================================================
% of % of % of
Income Income Income
Before Before Before
(in thousands) 1994 Taxes 1993 Taxes 1992 Taxes
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income before taxes
multiplied by statutory
federal income tax rate $118,584 35.0 $100,184 35.0 $ 79,675 34.0
State and foreign taxes
net of federal income
tax benefit 20,064 5.9 21,893 7.6 19,482 8.3
Amortization of excess of
cost over net assets of
businesses acquired 14,322 4.2 14,338 5.0 13,920 5.9
Other, net 4,662 1.4 2,278 0.9 2,869 1.3
- ----------------------------------------------------------------------------
$157,632 46.5 $138,693 48.5 $115,946 49.5
============================================================================
</TABLE>
<TABLE>
Income tax expense was as follows:
<CAPTION>
============================================================================
(in thousands) Federal State Foreign Total
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994:
Currently payable $124,330 $26,223 $16,441 $166,994
Deferred (7,408) 1,911 (3,865) (9,362)
- ----------------------------------------------------------------------------
Total $116,922 $28,134 $12,576 $157,632
============================================================================
1993:
Currently payable $102,588 $24,632 $15,075 $142,295
Deferred (9,357) 6,376 (621) (3,602)
- ----------------------------------------------------------------------------
Total $ 93,231 $31,008 $14,454 $138,693
============================================================================
1992:
Currently payable $ 98,792 $27,280 $ 8,810 $134,882
Deferred (16,848) (2,383) 295 (18,936)
- ----------------------------------------------------------------------------
Total $ 81,944 $24,897 $ 9,105 $115,946
============================================================================
</TABLE>
Income tax payments were $161,551,000 in 1994, $142,988,000 in 1993 and
$135,180,000 in 1992.
<PAGE>
PAGE 37
NOTE 8. STOCK PURCHASE, STOCK OPTION AND EXECUTIVE INCENTIVE PLANS
STOCK PURCHASE PLAN: Under the terms of the Dow Jones 1990 Employee Stock
Purchase Plan, eligible employees may purchase shares of the company's
common stock based on compensation through payroll deductions or lump-sum
payment. The purchase price for payroll deductions is the lower of 85% of
the fair market value of the stock on the first or last day of the purchase
period. Lump-sum purchases are made during the offering period at the lower
of 85% of the fair market value of the stock on the first day of the
purchase period or the payment date.
<TABLE>
<CAPTION>
The activity in the plan was as follows:
===========================================================================
Shares Subscribed
--------------------------
Price 1994 1993
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, January 1 143,524 140,091
Shares subscribed 232,238 213,782
Purchases $23.70 to $26.56 (220,315) (200,711)
Terminated or canceled (10,037) (9,638)
- ---------------------------------------------------------------------------
Balance, December 31 145,410 143,524
===========================================================================
</TABLE>
At December 31, 1994, there were 792,149 shares available for future
offerings.
STOCK OPTION PLAN: Under the Dow Jones 1991 Stock Option Plan, options for
shares of common stock may be granted to key employees at not less than the
fair market value of the common stock on the date of grant. Options expire
ten years from the date of grant.
EXECUTIVE INCENTIVE PLANS: The executive incentive plans provide for the
grant to key executives of stock options, performance awards, which were
suspended in 1992, and contingent stock rights. The incentive plans are
administered by the compensation committee of the Board of Directors, the
members of which may not participate in the plans.
The Dow Jones 1992 Long Term Incentive Plan provides for the grant to key
executives of stock options and contingent stock rights (collectively, "plan
awards"). Options for shares of common stock may be granted at not less
than the fair market value of the common stock on the date of grant. An
optionee may purchase shares upon exercise of an option or may surrender
exercisable options in return for an amount equal to any excess of the
market value over the option price on the day the option is surrendered.
Payment to the optionee for such stock appreciation rights may be made in
common stock, cash or a combination of both. Options expire ten years after
date of grant.
<PAGE>
PAGE 38
Contingent stock rights entitle the participant to receive future payments
in the form of common stock. The number of shares of common stock
ultimately received will depend upon the extent to which specified
performance criteria are achieved over the performance period, the
participant's individual performance and other factors, all as determined by
the compensation committee. Accordingly, the number of shares received
could be less than or equal to the number specified in the right, but not
greater than 125% of that amount.
<PAGE>
PAGE 39
<TABLE>
<CAPTION>
The activity in the stock option and executive incentive plans was as follows:
=============================================================================
Stock Option Executive Incentive
Plan Plans
------------ ----------------------
Shares Shares Contingent
Option Under Under Stock
Prices Option Option Rights
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, December 31, 1991 2,207,462 660,417
Granted $32.88 and $41.09 693,150 98,000 94,200
Granted $28.38 and $35.47 751,200 116,000 109,100
Exercised $15.42 to $32.42 (226,924) (27,864)
Terminated/canceled (66,465) (39,058) (5,900)
Surrendered upon exercise
of stock appreciation
rights at $31.00 to $33.38 (1,515) (22,870)
- -----------------------------------------------------------------------------
Balance, December 31, 1992 3,356,908 784,625 197,400
Granted $35.13 and $43.91 518,600 99,300 88,200
Exercised $22.17 to $32.88 (608,220) (51,878)
Terminated/canceled (136,059) (8,611) (4,400)
Surrendered upon exercise
of stock appreciation
rights at $30.00 to $35.88 (13,117) (11,923)
- -----------------------------------------------------------------------------
Balance, December 31, 1993 3,118,112 811,513 281,200
Granted $30.00 and $37.50 648,100 98,200 135,900
Exercised $26.00 to $ 32.88 (390,058) (14,072)
Terminated/canceled (91,680) (2,321)
Surrendered upon exercise
of stock appreciation
rights at $39.38 to $40.88 (4,980) (7,359)
- -----------------------------------------------------------------------------
Balance, December 31, 1994 3,279,494 885,961 417,100
=============================================================================
Year granted:
1985 $28.83 and $31.75 53,429 16,588
1986 $32.42 98,315 30,645
1987 $54.25 82,420 23,783
1988 $32.00 140,790 44,102
1989 $32.50 197,835 81,637
1990 $28.13 226,660 134,906
1991 $26.00 334,405 153,600
1992 $32.88 and $41.09 519,140 89,700 86,300
1992 $28.38 and $35.47 497,600 113,500 106,700
1993 $35.13 and $43.91 488,400 99,300 88,200
1994 $30.00 and $37.50 640,500 98,200 135,900
- -----------------------------------------------------------------------------
3,279,494 885,961 417,100
=============================================================================
Available for future
grants, December 31, 1994 2,558,000 682,200
=============================================================================
</TABLE>
<PAGE>
PAGE 40
Under the stock option plan, options granted in 1994 become exercisable in
1995 and all other options granted were exercisable at December 31, 1994.
Under the executive incentive plans, options granted prior to 1991 become
exercisable and performance awards and contingent stock rights become payable
four years after they are granted. Fifty percent of the options granted in
1991 and thereafter become exercisable in the year following the year of
grant; the balance of the options granted become exercisable in the second
year following the year of grant.
Compensation expense was $943,000 in 1994, $2,826,000 in 1993 and $1,850,000
in 1992, with respect to both the stock option and executive incentive plans.
NOTE 9. PROFIT SHARING AND PENSION PLANS
The company and certain subsidiaries have profit sharing retirement plans for
a majority of employees who meet specified length of service requirements.
The annual cost of the plans, which are funded currently, is based upon a
percentage of consolidated net income, as defined, or compensation but is
limited to the amount deductible for income tax purposes.
Substantially all employees of subsidiaries who are not covered by the above
plans are covered by noncontributory defined benefit pension plans. These
plans are not material in respect to charges to operations.
Total profit sharing and pension plan expenses amounted to $46,768,000,
$44,805,000 and $42,157,000 in 1994, 1993 and 1992, respectively.
<PAGE>
PAGE 41
NOTE 10. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS, AND POSTEMPLOYMENT
BENEFITS
For a majority of its employees, the company sponsors a defined benefit
postretirement medical plan which provides lifetime health care benefits to
retirees, who meet specified length of service and age requirements, and their
eligible dependents. The plan is unfunded. The company sponsors no
additional postretirement benefit plans other than its profit sharing and
pension plans (see Note 9).
As of January 1, 1992, the provisions of Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions," were adopted. As a result, after-tax earnings for 1992 were
lowered $32.4 million, or $.32 per share, which was included in the cumulative
effect of accounting changes (see Note 1).
<TABLE>
<CAPTION>
The following sets forth the plan's status reconciled with amounts reported
in the company's consolidated balance sheets at December 31.
===========================================================================
(in thousands) 1994 1993
- ---------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation (APBO):
Retirees $20,665 $16,977
Fully eligible active plan participants 14,558 13,788
Other active plan participants 53,957 52,573
- ---------------------------------------------------------------------------
Total APBO as of December 31 89,180 83,338
Unrecognized net gain (loss) 1,864 (2,052)
- ---------------------------------------------------------------------------
Accrued postretirement benefit liability at
December 31 $91,044 $81,286
===========================================================================
</TABLE>
<TABLE>
<CAPTION>
Pretax postretirement benefit expense included the following components:
===========================================================================
(in thousands) 1994 1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 5,482 $ 4,850 $4,345
Interest cost 5,944 6,168 5,320
- ---------------------------------------------------------------------------
Net periodic postretirement benefit cost $11,426 $11,018 $9,665
===========================================================================
</TABLE>
A 13% annual rate of increase in the per capita costs of covered health care
benefits was assumed for 1995, gradually decreasing to 6% by the year 2008
and remaining at that rate thereafter. Increasing the assumed health care
cost trend rates by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1994, by
$15.8 million and increase the aggregate of the service cost and interest
cost components of net periodic postretirement benefit cost for 1994 by $2.5
million. A discount rate of 8.25% was used to determine the accumulated
postretirement benefit obligation as of December 31, 1994.
<PAGE>
PAGE 42
At December 31, 1993, the company's accumulated postretirement benefit
obligation was calculated using a discount rate of 7% and a health care cost
trend rate of 12.5% for 1994 decreasing to 5.5% by the year 2008.
Effective January 1, 1994, the company adopted Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for Postemployment
Benefits." Accordingly, the company recorded an after-tax charge of
$3,007,000, or three cents per share, as the cumulative effect of accounting
change as of the date of adoption. This change in accounting had no
material effect on 1994 operating expenses.
NOTE 11. COMMITMENTS
Commitments for capital expenditures amounted to $33,974,000 at December 31,
1994.
<TABLE>
<CAPTION>
Noncancelable leases require minimum rental payments through 2011 totaling
$490,441,000. Payments required for the years 1995 through 1999 are as
follows:
============================================================================
(in thousands) 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$68,606 $65,433 $60,209 $52,330 $46,096
============================================================================
</TABLE>
These leases are principally for office space and equipment and contain
renewal and escalation clauses. Total rental expense amounted to
$90,286,000 in 1994, $83,853,000 in 1993 and $82,382,000 in 1992.
At December 31, 1994, the company had foreign currency forward exchange
contracts settling on various dates through January 1996 to sell 6.5 billion
Japanese yen (against $67,827,000). Risk arises from movements in foreign
currency exchange rates and from the possible inability of counterparties to
meet the terms of their commitments, which the company views as unlikely.
The company has the obligation to furnish financial support in the form of
capital contributions, loans and loan guarantees up to a total of $18.6
million for certain of its investees. At December 31, 1994, loan guarantees
of $11,008,000 with remaining terms of up to eight and one-half years were
in effect. The company views it as unlikely that its investees will fail to
meet the terms of their obligations.
<PAGE>
PAGE 43
NOTE 12. PER SHARE AMOUNTS
Net income per share has been computed on the basis of the weighted average
number of shares outstanding (99,002,000 shares in 1994, 99,773,000 shares
in 1993 and 101,150,000 shares in 1992). The assumed exercise of
outstanding options under the stock purchase, stock option and executive
incentive plans does not have a material dilutive effect on earnings per
share.
NOTE 13. RECLASSIFICATIONS
Certain amounts for prior years have been reclassified for comparative
purposes.
NOTE 14. SUMMARY OF QUARTERLY FINANCIAL DATA (UNAUDITED)
The summary of unaudited 1994 and 1993 quarterly financial data shown on
pages 49 and 50 of this report is incorporated herein by reference.
<PAGE>
PAGE 44
<TABLE>
<CAPTION>
NOTE 15. BUSINESS SEGMENTS
The company's operations by business segment and geographic area were as follows:
Financial Data by Business Segment
================================================================================================
Information Business Community
(in thousands) Services Publications Newspapers Corporate Consolidated
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues
1994 $ 976,800 $862,009 $252,168 $2,090,977
1993 861,979 825,246 244,591 1,931,816
1992 809,387 773,753 234,730 1,817,870
Operating income
1994 198,950 141,614 36,166 $(18,413) 358,317
1993 157,406 143,654 32,563 (17,163) 316,460
1992 150,678 115,066 31,653 (16,706) 280,691
Identifiable assets (1)
1994 1,645,380 445,791 198,985 155,610 2,445,766
1993 1,652,394 361,265 199,248 136,632 2,349,539
1992 1,682,972 342,891 198,427 147,745 2,372,035
Depreciation and
amortization expense
1994 152,579 38,488 14,236 205,303
1993 138,639 37,044 12,982 188,665
1992 127,535 38,948 12,829 179,312
Capital expenditures
1994 121,973 88,982 11,479 222,434
1993 115,659 31,561 12,723 159,943
1992 99,258 14,532 11,836 125,626
Investments in associated
companies, at equity (2)
1994 53,758
1993 43,224
1992 41,250
Equity in earnings (losses)
of associated companies (2)
1994 1,875
1993 2,252
1992 (4,680)
=================================================================================================
NOTES:
(1) Corporate assets include cash and cash equivalents, investments in associated companies,
other investments and related deferred income taxes.
(2) Business publications -- F.F. Soucy, Inc. & Partners and Company, Limited and Bear Island
Paper Company, L.P., operators of newsprint mills located in Quebec, Canada and Richmond,
Virginia, respectively, and Bear Island Timberlands Co., L.P.
</TABLE>
<PAGE>
PAGE 45
<TABLE>
<CAPTION>
Financial Data by Geographic Area
==============================================================================================
Europe
United Middle East Asia/ Other
(in thousands) States Africa Pacific Foreign Corporate Consolidated
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
1994 $1,489,014 $329,699 $225,143 $ 47,121 $2,090,977
1993 1,404,492 294,415 192,220 40,689 1,931,816
1992 1,321,190 278,835 178,398 39,447 1,817,870
Operating income
1994 234,479 61,031 78,547 2,673 $(18,413) 358,317
1993 207,435 53,343 70,471 2,374 (17,163) 316,460
1992 193,086 41,262 63,310 (261) (16,706) 280,691
Identifiable assets
1994 1,453,132 453,409 258,536 125,079 155,610 2,445,766
1993 1,379,222 459,768 251,851 122,066 136,632 2,349,539
1992 1,365,394 477,412 252,772 128,712 147,745 2,372,035
==============================================================================================
</TABLE>
<PAGE>
PAGE 46
NOTE 16. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following information presents the fair value of the company's financial
instruments which are not carried as such on the company's balance sheets.
The fair value of these financial instruments as of December 31, 1994 and
1993, was determined primarily by reference to dealer markets.
<TABLE>
<CAPTION>
============================================================================
(in thousands) Fair Value Carrying Value
- ----------------------------------------------------------------------------
<S> <C> <C>
1994
Other Investments $ 71,842 $ 72,835
Long-Term Debt 294,886 295,552
- ----------------------------------------------------------------------------
1993
Other Investments $ 65,657 $ 55,009
Long-Term Debt 268,650 261,073
============================================================================
</TABLE>
Nonspeculative forward exchange contracts, which hedge contracted revenue
streams from foreign currency exchange rate fluctuations, are not recorded
on the company's consolidated balance sheets (see Note 1). The fair value
of forward exchange contracts at December 31, 1994, was $66,367,000 against
a contracted value of $67,827,000, yielding a deferred gain of $1,460,000.
The fair value as of December 31, 1993, of forward exchange contracts then
in effect was $59,030,000 against a contracted value of $59,501,000,
representing a deferred gain of $471,000.
<PAGE>
PAGE 47
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Dow Jones & Company, Inc.:
We have audited the accompanying consolidated balance sheets of Dow Jones &
Company, Inc. and Subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and the
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Dow Jones &
Company, Inc. and Subsidiaries as of December 31, 1994 and 1993, and the
consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles.
As discussed in Notes 7 and 10 to the consolidated financial statements, the
company changed its method of accounting for income taxes and postretirement
benefits other than pensions effective January 1, 1992, and postemployment
benefits effective January 1, 1994.
COOPERS & LYBRAND L.L.P.
New York, New York
January 24, 1995
<PAGE>
PAGE 48
STATEMENT OF MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS
To the Stockholders of Dow Jones & Company, Inc.:
Management has prepared and is responsible for the consolidated financial
statements and related information in the Annual Report. The financial
statements, which include amounts based on judgment, have been prepared in
conformity with generally accepted accounting principles consistently
applied.
Management has developed, and in 1994 continued to strengthen, a system of
internal accounting and other controls for the company and its wholly owned
subsidiaries. Management believes these controls provide reasonable
assurance that assets are safeguarded from loss or unauthorized use and that
the company's financial records are a reliable basis for preparing the
financial statements. Underlying the concept of reasonable assurance is the
premise that the cost of control should not exceed the benefit derived. The
company's system of internal controls is supported by written policies, a
program of internal audits, including a periodic independent review of the
Internal Audit Department, and by a program of selecting and training
qualified staff.
Coopers & Lybrand L.L.P., independent accountants, have audited the
company's consolidated financial statements, as described in their report.
The report expresses an independent opinion of the fairness of presentation
of the financial statements and, in so doing, provides an independent
objective assessment of the manner in which management meets its
responsibility for fairness and accuracy in financial reporting.
The Board of Directors, through its audit committee consisting solely of
outside directors, is responsible for reviewing and monitoring the company's
financial reporting and accounting practices. The audit committee meets
regularly with management, internal auditors and independent accountants -
both separately and together. The internal auditors and the independent
accountants have free access to the audit committee to review the results of
their audits, the adequacy of internal accounting controls and the quality
of financial reporting.
<PAGE>
PAGE 49
<TABLE>
<CAPTION>
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Dow Jones & Company, Inc.
For the fourth quarters ended December 31, 1994 and 1993
============================================================================
(in thousands except per share amounts) 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C>
REVENUES:
Information services $260,557 $223,459
Advertising 206,145 192,581
Circulation and other 99,886 96,614
- ----------------------------------------------------------------------------
Total revenues 566,588 512,654
- ----------------------------------------------------------------------------
EXPENSES:
News, operations and development 180,449 158,861
Selling, administrative and general 171,731 155,898
Newsprint 31,063 26,767
Second class postage and carrier delivery 25,207 25,581
Depreciation and amortization 54,445 43,984
- ----------------------------------------------------------------------------
Operating expenses 462,895 411,091
- ----------------------------------------------------------------------------
Operating income 103,693 101,563
OTHER INCOME (DEDUCTIONS):
Investment income 1,391 1,319
Interest expense (4,595) (5,213)
Equity in income (losses) of associated companies 1,733 (1,147)
Other, net (Note 2) 508 (8,178)
- ----------------------------------------------------------------------------
Income before income taxes 102,730 88,344
Income taxes 44,498 41,200
- ----------------------------------------------------------------------------
NET INCOME $ 58,232 $ 47,144
============================================================================
PER SHARE:
Net income $.60 $.47
- ----------------------------------------------------------------------------
Cash dividends $.21 $.20
============================================================================
Weighted average shares outstanding 97,221 99,571
============================================================================
</TABLE>
<PAGE>
PAGE 50
<TABLE>
<CAPTION>
SUMMARY OF QUARTERLY FINANCIAL DATA
(UNAUDITED)
Dow Jones & Company, Inc.
===========================================================================
Quarters Ended
(in thousands except --------------------------------------
per share amounts) March 31 June 30 Sept. 30 Dec. 31 Year
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1994
Revenues $499,212 $524,153 $501,024 $566,588 $2,090,977
Operating income 88,750 96,273 69,601 103,693 358,317
Net income 40,175 46,020 33,746 58,232 178,173
Net income per share .40 .46 .34 .60 1.80
- ---------------------------------------------------------------------------
1993
Revenues $463,435 $487,043 $468,684 $512,654 $1,931,816
Operating income 65,350 81,624 67,923 101,563 316,460
Net income 30,946 39,807 29,650 47,144 147,547
Net income per share .31 .40 .30 .47 1.48
===========================================================================
</TABLE>
Statement of Financial Accounting Standards No. 112, "Employers' Accounting
for Postemployment Benefits," was adopted effective January 1, 1994.
Excluding the net effect of this change, net income was $43,182,000, or
$.43 per share, in the first quarter of 1994 and $181,180,000, or $1.83 per
share, for the year (see Note 1).
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III.
ITEM 10. Directors and Executive Officers of the Registrant.
The information required by this item with respect to directors of
the company is incorporated by reference to the tables, including the
footnotes thereto, appearing on pages 8 to 10 of the 1995 Proxy Statement
and to the material in footnote 5 on page 5 of the 1995 Proxy Statement.
The information required by this item with respect to compliance with
Section 16(a) of the Securities Exchange Act of 1934 is incorporated by
reference to the material on pages 21 to 22 of the 1995 Proxy Statement
under the caption "Compliance with Section 16(a) of the Exchange Act." For
the information required by this item relating to executive officers, see
Part I, page 13.
<PAGE>
PAGE 51
ITEM 11. Executive Compensation.
The information required by this item is incorporated by reference to
the tables, including the footnotes thereto, appearing under the caption
"Executive Compensation" on pages 11 to 13 of the 1995 Proxy Statement and
to the material appearing on page 10 of the 1995 Proxy Statement in the two
paragraphs immediately following footnote 5 on page 10.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by this item is incorporated by reference to
the tables, including the footnotes thereto, appearing on pages 2 to 6 of
the 1995 Proxy Statement under the captions "Security Ownership of Certain
Beneficial Owners" and "Security Ownership of Directors and Management."
ITEM 13. Certain Relationships and Related Transactions.
The information required by this item is incorporated by reference to
footnote 2 on page 9 of the 1995 Proxy Statement and to footnotes 4 and 5
on page 10 of the 1995 Proxy Statement.
<PAGE>
PAGE 52
PART IV.
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
14 (a) (1) Financial Statements:
Page
Reference
---------
Included in Part II, Item 8 of this report:
Consolidated statements of income for the years
ended December 31, 1994, 1993 and 1992 25
Consolidated balance sheets, December 31, 1994 and 1993 26-27
Consolidated statements of cash flows for the
years ended December 31, 1994, 1993 and 1992 28-29
Consolidated statements of stockholders' equity for the
years ended December 31, 1994, 1993 and 1992 30
Notes to financial statements 31-46
Report of independent accountants 47
(a) (2) Financial Statement Schedules:
Included in Part IV of this report:
Report and consent of independent accountants 57
II - Valuation and qualifying accounts and reserves 58
Other schedules have been omitted since they are either not required or
not applicable.
<PAGE>
PAGE 53
<TABLE>
<CAPTION>
(a) (3) Exhibits
Exhibit
Number Document
------- --------
<S> <C>
3.1 The Restated Certificate of Incorporation of the Company, as
amended, is hereby incorporated by reference to Exhibit 19.1 to
its Form 10-Q for the quarter ended March 31, 1988.
3.2 The Bylaws of the Company is hereby incorporated by reference to
Exhibit 19.2 to its Form 10-Q for the quarter ended September 30,
1987.
4.1 Form of promissory note for commercial paper is hereby
incorporated by reference to Exhibit 4.1 to its Form 10-Q for the
quarter ended September 30, 1985.
10.1 Deferred Compensation Contracts between the Company and various
officers and directors are hereby incorporated by reference to
Exhibit 20 to its Form 10-K for the year ended December 31, 1980.
10.2 Dow Jones 1981 Stock Option Plan, as amended, is hereby
incorporated by reference to Exhibit 20.2 to its Form 10-Q for the
quarter ended June 30, 1981.
10.3 Dow Jones 1983 Executive Incentive Plan, as amended, is hereby
incorporated by reference to Exhibit 10.3 to its Form 10-K for the
year ended December 31, 1983.
10.4 Lease, as amended, between the Company and Olympia and York
Battery Park Company, of space in The World Financial Center, New
York City, is hereby incorporated by reference to Exhibit 10.9 to
its Form 10-K for the year ended December 31, 1983.
10.5 Dow Jones 1988 Executive Incentive Plan, as amended, is hereby
incorporated by reference to Exhibit 19 to its Form 10-Q for the
quarter ended June 30, 1988.
10.6 Lease, as amended, between the Company and Waterfront Associates,
of space at Harborside Plaza Two, Jersey City, N.J. is hereby
incorporated by reference to Exhibit 10.15 to its Form 10-K for
the year ended December 31, 1989.
10.7 Dow Jones 1991 Stock Option Plan, as amended, is hereby
incorporated by reference to Exhibit 19.2 to its Form 10-Q for the
quarter ended September 30, 1991.
</TABLE>
<PAGE>
PAGE 54
<TABLE>
<CAPTION>
Exhibit
Number Document
------- --------
<S> <C>
10.8 Dow Jones 1992 Long Term Incentive Plan is hereby incorporated by
reference to Exhibit 10 to its Form 10-Q for the quarter ended
March 31, 1992.
* 10.9 Dow Jones Credit Agreement dated November 16, 1994 between the
Company and Chemical Bank.
11 Computation of Earnings Per Share.
21 List of Subsidiaries.
23 Consent of Coopers & Lybrand, independent accountants, is
contained on page 57 of this report.
* 27 Financial Data Schedule
</TABLE>
* Securities and Exchange Commission and New York Stock Exchange copies
only.
(b) No reports on Form 8-K were filed during the last quarter of the
1994 fiscal year.
<PAGE>
PAGE 55
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
DOW JONES & COMPANY, INC.
By Thomas G. Hetzel
-------------------------
Comptroller
(Chief Accounting Officer)
Dated: March 22, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Peter R. Kann
- -------------------------- Chairman of the Board March 22, 1995
Chief Executive Officer
Kenneth L. Burenga
- -------------------------- President March 22, 1995
Chief Operating Officer
Kevin J. Roche
- -------------------------- Vice President/Finance March 22, 1995
Chief Financial Officer
Carl M. Valenti
- -------------------------- Director March 22, 1995
James H. Ottaway Jr.
- -------------------------- Director March 22, 1995
Rene C. McPherson
- -------------------------- Director March 22, 1995
<PAGE>
PAGE 56
Signature Title Date
- --------- ----- ----
Martha S. Robes
- --------------------------- Director March 22, 1995
James Q. Riordan
- --------------------------- Director March 22, 1995
Bettina Bancroft
- --------------------------- Director March 22, 1995
Irvine O. Hockaday Jr.
- --------------------------- Director March 22, 1995
Richard D. Wood
- --------------------------- Director March 22, 1995
William C. Cox Jr.
- --------------------------- Director March 22, 1995
Vernon E. Jordan Jr.
- --------------------------- Director March 22, 1995
Warren H. Phillips
- --------------------------- Director March 22, 1995
Rand V. Araskog
- --------------------------- Director March 22, 1995
Carlos Salinas de Gortari
- --------------------------- Director March 22, 1995
<PAGE>
PAGE 57
INDEPENDENT ACCOUNTANTS' REPORT ON FINANCIAL STATEMENT SCHEDULES
-----------------------
To the Board of Directors and Stockholders
of Dow Jones & Company, Inc.:
Our report on the consolidated financial statements of Dow Jones & Company,
Inc. and its Subsidiaries is included on page 47 of this 1994 Form 10-K. In
connection with our audits of such financial statements, we have also
audited the related financial statement schedules listed in the index on
page 52 of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
New York, New York
January 24, 1995
CONSENT OF INDEPENDENT ACCOUNTANTS
-----------------------
We consent to the incorporation by reference in the Registration Statements
on Form S-3 (File Nos. 33-575 and 33-32110) and Form S-8 (File Nos.
2-72684, 2-95540, 33-35211, 33-45962, 33-45963, 33-49311 and 33-55079) of
Dow Jones & Company, Inc. of our report dated January 24, 1995 appearing on
page 47 of this 1994 Form 10-K. We also consent to the incorporation by
reference of our report on the financial statement schedules, which appears
above.
COOPERS & LYBRAND L.L.P.
New York, New York
March 22, 1995
<PAGE>
PAGE 58
<TABLE>
<CAPTION>
Schedule II
DOW JONES & COMPANY, INC.
and its Subsidiaries
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
for the years ended December 31, 1994, 1993 and 1992
(in thousands)
Additions
------------------------
Balance at Charged to Charged Balance
Beginning Cost and to Other at End
Description of Period Expenses Accounts(A) Deductions(B) of Period
----------- --------- --------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1994:
Reserves deducted from assets -
allowance for doubtful accounts $14,548 $ 7,169 $2,002 $ 8,849 $14,870
======= ======= ====== ======= =======
Year ended December 31, 1993:
Reserves deducted from assets -
allowance for doubtful accounts $16,443 $ 5,582 $1,520 $ 8,997 $14,548
======= ======= ====== ======= =======
Year ended December 31, 1992:
Reserves deducted from assets -
allowance for doubtful accounts $18,881 $11,112 $2,830 $16,380 $16,443
======= ======= ====== ======= =======
Notes:
(A) Recoveries of accounts previously written off and reductions of revenue.
(B) Accounts written off as uncollectible.
</TABLE>
<PAGE>
DOW JONES & COMPANY, INC.
-----------------------------------
-----------------------------------
$400,000,000
REVOLVING CREDIT AGREEMENT
-----------------------------------
-----------------------------------
Dated as of November 16, 1994
CHEMICAL BANK,
as Agent
<PAGE>
Page
----
TABLE OF CONTENTS
-----------------
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . 14
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENTS . . . . . 14
2.1 Revolving Credit Commitments. . . . . . . . . . . 14
2.2 The Bid Loans . . . . . . . . . . . . . . . . . . 16
2.3 Type of Revolving Credit Loans. . . . . . . . . . 20
2.4 Fees. . . . . . . . . . . . . . . . . . . . . . . 20
2.5 Termination or Reduction of Loan Commitments. . . 21
2.6 Repayment of Loans. . . . . . . . . . . . . . . . 21
2.7 Optional Prepayments. . . . . . . . . . . . . . . 21
2.8 Interest Rate and Payment Dates . . . . . . . . . 22
2.9 Computation of Interest and Fees. . . . . . . . . 22
2.10 Inability to Determine Interest Rate . . . . . . 23
2.11 Pro Rata Borrowings and Payments . . . . . . . . 24
2.12 Taxes. . . . . . . . . . . . . . . . . . . . . . 25
2.13 Illegality . . . . . . . . . . . . . . . . . . . 26
2.14 Requirements of Law. . . . . . . . . . . . . . . 26
2.15 Indemnity. . . . . . . . . . . . . . . . . . . . 28
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . 28
3.1 Financial Condition . . . . . . . . . . . . . . . 28
3.2 No Change . . . . . . . . . . . . . . . . . . . . 29
3.3 Corporate Existence; Compliance with Law. . . . . 29
3.4 Corporate Power; Authorization; Enforceable
Obligations. . . . . . . . . . . . . . . . . . . 29
3.5 No Legal Bar. . . . . . . . . . . . . . . . . . . 30
3.6 No Material Litigation. . . . . . . . . . . . . . 30
3.7 No Default. . . . . . . . . . . . . . . . . . . . 30
3.8 Ownership of Property; Liens. . . . . . . . . . . 30
3.9 No Burdensome Restrictions. . . . . . . . . . . . 30
3.10 Taxes. . . . . . . . . . . . . . . . . . . . . . 30
3.11 Federal Regulations. . . . . . . . . . . . . . . 31
3.12 ERISA. . . . . . . . . . . . . . . . . . . . . . 31
3.13 Investment Company Act . . . . . . . . . . . . . 31
3.14 Subsidiaries . . . . . . . . . . . . . . . . . . 31
3.15 Purpose of Loans . . . . . . . . . . . . . . . . 31
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . 32
4.1 Conditions of Initial Loans . . . . . . . . . . . 32
(a) Notes . . . . . . . . . . . . . . . . . . . 32
(b) Legal Opinion . . . . . . . . . . . . . . . 32
(c) Officers' Certificate . . . . . . . . . . . 32
(d) Assistant Secretary's Certificate . . . . . 32
(e) Compliance. . . . . . . . . . . . . . . . . 32
(f) Existing Credit Agreement . . . . . . . . . 32
(g) Additional Matters. . . . . . . . . . . . . 32
4.2 Conditions to All Loans . . . . . . . . . . . . . 33
(a) Representations and Warranties. . . . . . . 33
(b) No Default or Event of Default. . . . . . . 33
<PAGE>
2
(c) Additional Conditions to Bid Loans. . . . . 33
SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . 33
5.1 Financial Statements. . . . . . . . . . . . . . . 33
5.2 Certificates; Other Information . . . . . . . . . 34
5.3 Payment of Obligations. . . . . . . . . . . . . . 35
5.4 Conduct of Business and Maintenance of
Existence. . . . . . . . . . . . . . . . . . . . 35
5.5 Maintenance of Property; Insurance. . . . . . . . 35
5.6 Inspection of Property; Books and Records;
Discussions. . . . . . . . . . . . . . . . . . . 35
5.7 Notices . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . 37
6.1 Limitation on Liens . . . . . . . . . . . . . . . 37
6.2 Limitation on Mergers and Sales of Assets . . . . 38
6.3 Maintenance of Consolidated Net Worth. . . . . . 38
6.4 Maintenance of Ratio of Consolidated Total
Liabilities to Consolidated Net Worth. . . . . . 39
6.5 Maintenance of Ratio of Annualized Consolidated
Cash Flow. . . . . . . . . . . . . . . . . . . . 39
SECTION 7. EVENTS OF DEFAULT. . . . . . . . . . . . . . . 39
SECTION 8. THE AGENT. . . . . . . . . . . . . . . . . . . 41
8.1 Appointment . . . . . . . . . . . . . . . . . . . 41
8.2 Delegation of Duties. . . . . . . . . . . . . . . 42
8.3 Exculpatory Provisions. . . . . . . . . . . . . . 42
8.4 Reliance by Agent . . . . . . . . . . . . . . . . 42
8.5 Notice of Default . . . . . . . . . . . . . . . . 43
8.6 Non-Reliance on Agent; Other Banks and Agency
Services . . . . . . . . . . . . . . . . . . . . 43
8.7 Indemnification . . . . . . . . . . . . . . . . . 44
8.8 Agent in Its Individual Capacity. . . . . . . . . 44
8.9 Successor Agent . . . . . . . . . . . . . . . . . 44
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . 45
9.1 Amendments and Waivers. . . . . . . . . . . . . . 45
9.2 Notices . . . . . . . . . . . . . . . . . . . . . 45
9.3 No Waiver; Cumulative Remedies. . . . . . . . . . 46
9.4 Survival of Representations and Warranties. . . . 46
9.5 Payment of Expenses and Taxes . . . . . . . . . . 46
9.6 Successors and Assigns; Participations;
Purchasing Banks . . . . . . . . . . . . . . . . 47
9.7 Adjustments; Set-off. . . . . . . . . . . . . . . 51
9.8 Counterparts. . . . . . . . . . . . . . . . . . . 52
9.9 Governing Law . . . . . . . . . . . . . . . . . . 52
9.10 Submission To Jurisdiction; Waivers. . . . . . . 52
9.11 Existing Credit Agreement. . . . . . . . . . . . 53
<PAGE>
REVOLVING CREDIT AGREEMENT, dated as of November 16,
1994, among DOW JONES & COMPANY, INC., a Delaware corporation (the
"Company"), the several banks from time to time parties to this
-------
Agreement (collectively the "Banks"; individually, a "Bank ") and
----- ----
CHEMICAL BANK, a New York banking corporation, as agent for the
Banks hereunder (in such capacity, the "Agent").
-----
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
-------------
following terms have the following meanings:
"Absolute Rate Bid Loan Request": any Bid Loan Request
------------------------------
requesting the Bid Loan Banks to offer to make Bid Loans at an
absolute rate (as opposed to a rate composed of the Applicable
Index Rate plus (or minus) a margin).
"Affiliate": any Person (other than a Subsidiary) which,
---------
directly or indirectly, is in control of, is controlled by, or is
under common control with such Person. For purposes of this
definition, control of a Person shall mean the power, direct or
indirect, (i) to vote 10% or more of the securities having ordinary
voting power for the election of directors of such Person or (ii)
to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Agency Services": Chemical Bank Agency Services
---------------
Corporation.
"Aggregate Loans": at a particular time, the sum of the
---------------
then outstanding principal amount of Revolving Credit Loans and Bid
Loans.
"Agreement": this Revolving Credit Agreement, as
---------
amended, supplemented or modified from time to time.
"Alternate Base Rate": at any particular date, the
-------------------
highest of (a) the Prime Rate, (b) 1/2 of 1% above the rate set
forth for such date opposite the caption "Federal Funds
(Effective)" in the weekly statistical release designated as "H.15
(519)," or any successor publication, published by the Board of
Governors of the Federal Reserve System and (c) the Base C/D Rate
in effect on such date plus 1%. "Base CD Rate" shall mean a rate
------------
per annum equal to the following:
Three-Month Secondary CD Rate
-----------------------------
1.00 - Reserve Percentage + Assessment Rate
"Three-Month Secondary CD Rate" shall mean, for any day, the
-----------------------------
secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not
be a Business Day, the next preceding Business Day) by the Board of
Governors of the Federal Reserve System through the public
information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the
<PAGE>
2
Board of Governors of the Federal Reserve System, be published in Federal
Reserve Statistical Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day (or, if such day shall
not be a Business Day, on the next preceding Business Day) by the Agent from
three New York City negotiable certificate of deposit dealers of recognized
standing selected by it. If for any reason the Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or the rate set forth in clause (b) above
or both for any reason, including the inability or failure of the Agent to
obtain sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the
rate set forth in clause (b) shall be effective on the effective day of such
change in the such rate.
"Alternate Base Rate Loans": Revolving Credit Loans at
-------------------------
such time as they are made and/or being maintained at a rate of
interest based upon the Alternate Base Rate.
"Annualized Consolidated Cash Flow": as at the last day
---------------------------------
of any fiscal quarter of the Company the Consolidated Cash Flow for
the period of four consecutive fiscal quarters ending on such day.
"Annualized Consolidated Interest Expense": as at the
----------------------------------------
last day of any fiscal quarter of the Company the Consolidated
Interest Expense for the period of four consecutive fiscal quarters
ending on such day.
"Applicable Facility Fee Percentage": on any date the
----------------------------------
applicable percentage set forth below based upon the Ratings:
S&P/Moody's Rating Facility Fee
------------------ ------------
Category 1 .08%
AA-/AA3 or higher
Category 2 .10%
A+, A, A-/A1, A2, A3
Category 3 .15%
At or below
BBB+/Baa1
or unrated
<PAGE>
3
For purposes of the foregoing, (i) if the Ratings established or
deemed to have been established by Moody's and S&P shall fall
within different Categories, the Facility Fee shall be based on the
higher Rating, (ii) if Moody's or S&P shall not have in effect a
Rating (other than because such rating agency shall no longer be in
the business of rating corporate debt obligations), then such
rating agency will be deemed to have established a Rating in
Category 3; and (iii) if any rating established or deemed to have
been established by Moody's or S&P shall be changed (other than as
a result of a change in the rating system of Moody's or S&P) such
change shall be effective as of the date on which it is first
announced by the applicable rating agency. Each change in the
Applicable Facility Fee Percentage shall apply during the period
commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such
change. If the rating system of Moody's or S&P shall change, or if
any such rating agency shall cease to be in the business of rating
corporate debt obligations, the Company and the Banks shall
negotiate in good faith to amend the references to specific ratings
in this definition to reflect such changed rating system or the
non-availability of ratings from such rating agency.
"Applicable Index Rate": in respect of any Bid Loan
---------------------
requested pursuant to an Index Rate Bid Loan Request, the
Eurodollar Rate applicable to the Interest Period for such Bid
Loan.
"Applicable Margin" shall mean on any date, with respect
-----------------
to the Loans comprising any Eurodollar Loans, C/D Rate Loans or
Alternate Base Rate Loans, as the case may be, the applicable
spread set forth below based on the Ratings:
Applicable Margin
-----------------
Alternate Certificate
S&P/Moody's Base Rate Eurodollar of Deposit
Rating Loan Spread Loan Spread Loan Spread
- ----------- ----------- ----------- -----------
Category 1
AA-/Aa3 0% .17% .295%
or higher
Category 2
A+, A, A-/
A1, A2, A3 0% .20% .325%
Category 3
At or below
BBB+/Baa1
or unrated 0% .25% .375%
For purposes of the foregoing, (i) if the Ratings established or
deemed to have been established by Moody's and S&P shall fall
<PAGE>
4
within different Categories, the Applicable Margin shall be based
on the higher Rating, (ii) if Moody's or S&P shall not have in
effect a Rating (other than because such rating agency shall no
longer be in the business of rating corporate debt obligations),
then such rating agency will be deemed to have established a Rating
in Category 3; and (iii) if any rating established or deemed to
have been established by Moody's or S&P shall be changed (other
than as a result of a change in the rating system of Moody's or
S&P) such change shall be effective as of the date on which it is
first announced by the applicable rating agency. Each change in
the Applicable Margin shall apply during the period commencing on
the effective date of such change and ending on the date
immediately preceding the effective date of the next such change.
If the rating system of Moody's or S&P shall change, or if any such
rating agency shall cease to be in the business of rating corporate
debt obligations, the Company and the Banks shall negotiate in good
faith to amend the references to specific ratings in this
definition to reflect such changed rating system or the non-
availability of ratings from such rating agency.
"Assessment Rate": with respect to each Interest Period
---------------
for a C/D Rate Loan, the net annual assessment rate (rounded
upwards, if necessary, to the next higher 1/100 of 1%) determined
by Chemical Bank to be payable to the Federal Deposit Insurance
Corporation or any successor ("FDIC") for FDIC's insuring time
deposits made in dollars at offices of Chemical Bank in New York
City as of the day two (2) Business Days prior to the first day of
such Interest Period.
"Available Loan Commitment": as to any Bank, at a
-------------------------
particular time, an amount equal to such Bank's Commitment
Percentage multiplied by the difference between (a) the amount of
the Loan Commitments at such time and (b) the Aggregate Loans at
such time; collectively, as to all the Banks, the "Available Loan
--------------
Commitments."
- -----------
"Base Rate": with respect to each Interest Period for a
---------
C/D Rate Loan, the rate of interest determined by the Agent to be
(rounded upward to the nearest 1/100 of 1%) the average rate per
annum bid at 10:00 A.M. (New York City time) (or as soon thereafter
as practicable) on the first day of such Interest Period by a total
of three certificate of deposit dealers of recognized standing
selected by the Agent for the purchase at face value from the Agent
of its certificates of deposit in an amount comparable to the C/D
Rate Loan of the Agent to which such Interest Period applies.
"Bid Loan": each Bid Loan made pursuant to subsection
--------
2.2; the aggregate amount advanced by a Bid Loan Bank pursuant to
subsection 2.2 on each Bid Loan Date shall constitute one or more
Bid Loans, as specified by such Bid Loan Bank pursuant to
subsection 2.2(b)(vi).
"Bid Loan Assignees": as defined in subsection 9.6(c).
------------------
<PAGE>
5
"Bid Loan Assignment": any assignment by a Bid Loan Bank
-------------------
to a Bid Loan Assignee of a Bid Loan and related Individual Bid
Loan Note; any such Bid Loan Assignment to be registered in the
Register must set forth, in respect of the Bid Loan Assignee
thereunder, the full name of such Bid Loan Assignee, its address
for notices, its lending office address (in each case with
telephone, telex and facsimile transmission numbers) and payment
instructions for all payments to such Bid Loan Assignee, and must
contain an agreement by such Bid Loan Assignee to comply with the
provisions of subsection 9.6(c) and subsection 9.6(h) to the same
extent as any Bank.
"Bid Loan Banks": Banks from time to time offering Bid
--------------
Loans.
"Bid Loan Confirmation": each confirmation by the
---------------------
Company of its acceptance of Bid Loan Offers, which Bid Loan
Confirmation shall be substantially in the form of Exhibit G and
shall be delivered to the Agent in writing, by telex or by
facsimile transmission.
"Bid Loan Date": each date on which a Bid Loan is made
-------------
pursuant to subsection 2.2.
"Bid Loan Notes": the collective reference to the Grid
--------------
Bid Loan Notes and the Individual Bid Loan Note; individually, a
"Bid Loan Note."
-------------
"Bid Loan Offer": each offer by a Bid Loan Bank to make
--------------
Bid Loans pursuant to a Bid Loan Request, which Bid Loan Offer
shall contain the information specified in Exhibit F and shall be
delivered to the Agent by telephone, immediately confirmed by telex
or facsimile transmission.
"Bid Loan Request": each request by the Company for Bid
----------------
Loan Banks to submit bids to make Bid Loans, which shall contain
the information in respect of such requested Bid Loans specified in
Exhibit E and shall be delivered to the Agent in writing, by telex
or facsimile transmission, or by telephone, immediately confirmed
by telex or facsimile transmission.
"Borrowing Date": in respect of any Revolving Credit
--------------
Loan, the date on which such Revolving Credit Loan is made.
"Business Day": a day other than a Saturday, Sunday or
------------
other day on which commercial banks in New York City are authorized
or required by law to close.
"C/D Rate": with respect to any Interest Period for C/D
--------
Rate Loans, a rate per annum equal to the following:
Base Rate
------------------------- + Assessment Rate
1.00 - Reserve Percentage
<PAGE>
6
"C/D Rate Loans": Revolving Credit Loans hereunder at
--------------
such time as they are made and/or being maintained at a rate of
interest based upon the C/D Rate.
"Closing Date": the date on which the conditions in
------------
Section 4 are satisfied in full, which shall be a Business Day
which is on or before the date of the initial Loans.
"Code": the Internal Revenue Code of 1986, as amended
----
from time to time.
"Commitment Percentage": as to any Bank, the percentage
---------------------
of the aggregate Loan Commitments constituted by such Bank's Loan
Commitment, set forth opposite such Bank's name on Schedule I
hereto.
"Commitment Period": the period from and including the
-----------------
Closing Date to but not including the Termination Date or such
earlier date as the Loan Commitments shall terminate as provided
herein.
"Commitment Transfer Supplement": a Commitment Transfer
------------------------------
Supplement, substantially in the form of Exhibit K.
"Commonly Controlled Entity": an entity, whether or not
--------------------------
incorporated, which is under common control with the Company within
the meaning of Section 414(b) or (c) of the Code.
"Consolidated Cash Flow": for any period, Consolidated
----------------------
Net Income of the Company and its Subsidiaries for such period plus
the aggregate amounts deducted in determining such Consolidated Net
Income in respect of (i) Consolidated Interest Expense, (ii)
amortization expenses, (iii) depreciation expenses and (iv) income
taxes for such period, each of clauses (i), (ii), (iii) and (iv)
determined in accordance with GAAP, but after deducting in the
calculation thereof, income representing equity in the earnings of
Affiliates not received in cash or, as the case may be, after
restoring thereto deductions representing equity in the losses of
Affiliates for which neither Dow Jones nor any of its Subsidiaries
is liable.
"Consolidated Interest Expense": for any period,
-----------------------------
interest expense of the Company and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income": for any period, the
-----------------------
consolidated net income (or deficit) of the Company and its
Subsidiaries for such period (taken as a cumulative whole),
determined in accordance with GAAP.
"Consolidated Net Worth": at a particular date, all
----------------------
amounts which would be included under shareholders' equity on a
<PAGE>
7
consolidated balance sheet of the Company and its Subsidiaries at
such date, determined in accordance with GAAP.
"Consolidated Total Liabilities": at a particular date,
------------------------------
all items which would, in conformity with GAAP, be classified as
liabilities on a consolidated balance sheet of the Company and its
Subsidiaries as at such date, but in any event including without
any duplication (a) indebtedness arising under acceptance
facilities and the face amount of all letters of credit issued for
the account of the Company or any Subsidiary and all drafts drawn
thereunder, (b) all liabilities secured by any Lien on any property
owned by the Company or any Subsidiary even though the Company or
such Subsidiary has not assumed or otherwise become liable for the
payment thereof and (c) any liability of the Company or any
Subsidiary or a Commonly Controlled Entity to a Multiemployer Plan.
"Contingent Obligation": as to any Person, any
---------------------
obligation of such Person guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations ("primary
-------
obligations") of any other Person (the "primary obligor") in any
- ----------- ---------------
manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not
contingent (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term
-------- -------
Contingent Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the
Company in good faith.
"Contractual Obligation": as to any Person, any
----------------------
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
"Default": any of the events specified in Section 7,
-------
whether or not any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the
------- -
United States of America.
<PAGE>
8
"Domestic Dollar Loans": the collective reference to C/D
---------------------
Rate Loans and Alternate Base Rate Loans.
"Domestic Lending Office": initially, the office of each
-----------------------
Bank designated as such in Schedule II; thereafter, such other
office of such Bank, if any, located within the United States which
shall be making or maintaining Domestic Dollar Loans.
"ERISA": the Employee Retirement Income Security Act of
-----
1974, as amended from time to time.
"Eurodollar Lending Office": initially, the office of
-------------------------
each Bank designated as such in Schedule II; thereafter, such other
foreign or domestic office of such Bank, if any, which shall be
making or maintaining Eurodollar Loans.
"Eurodollar Loans": Revolving Credit Loans at such time
----------------
as they are made and/or being maintained at a rate of interest
based upon a Eurodollar Rate.
"Eurodollar Rate": (a) with respect to each day during
---------------
the Interest Period for each Bid Loan made pursuant to an Index Rate Bid Loan
Request, the rate per annum (the "LIBO Rate") equal
---------
to the quotient (rounded upwards to the nearest whole multiple of one sixteenth
of one percent) of (i) the rate at which the Eurodollar Lending Office of the
Bank which is the Agent is offered Dollar deposits two Working Days prior to the
beginning of such Interest Period in the interbank eurodollar market where the
foreign currency and exchange operations of such Eurodollar Lending Office are
conducted at or about 10:00 A.M., New York City time, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of Bid Loans to which such Interest Period
applies divided by (ii) a number equal to 1.00 minus the aggregate (without
duplication) of the rates (expressed as a decimal) of maximum reserve
requirements current on the date two Working Days prior to the beginning of such
Interest Period (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction with
respect thereto), as now and from time to time hereafter in effect, dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) by a member bank of
such System; and (b) with respect to each day during the Interest Period for
each Eurodollar Loan, the rate per annum equal to (i) the LIBO Rate for such
Interest Period (determined in respect of the rate at which the Eurodollar
Lending Office of the Bank which is the Agent is offered Dollar deposits two
Working Days prior to the beginning of such Interest Period in an amount
comparable to the amount of the Eurodollar Loan of the Agent to be outstanding
during such Interest Period), divided by (ii) a number equal to 1.00 minus the
aggregate (without duplication) of the rates (expressed as a decimal) of maximum
reserve requirements current
<PAGE>
9
on the date two Working Days prior to the beginning of such Interest Period
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
System or other Governmental Authority having jurisdiction with respect
thereto), as now and from time to time hereafter in effect, dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) by a member bank of
such System.
"Event of Default": any of the events specified in
----------------
Section 7, provided that any requirement for the giving of notice,
--------
the lapse of time, or both, or any other condition, event or act
has been satisfied.
"Existing Credit Agreement": the Revolving Credit
-------------------------
Agreement among the Company and the banks and other financial
institutions party thereto, with Chemical Bank acting as agent,
dated as of August 13, 1992, as amended.
"Facility Fee": as defined in subsection 2.4;
------------
collectively, the "Facility Fees."
-------------
"Financing Lease": (a) any lease of property, real or
---------------
personal, the then present value of the minimum rental commitment
under which is required to be capitalized on a consolidated balance
sheet of the Company and its Subsidiaries in accordance with GAAP,
and (b) any other such lease to the extent that the obligations
thereunder are capitalized on a balance sheet of the lessee.
"GAAP": generally accepted accounting principles in the
----
United States of America in effect from time to time.
"Governmental Authority": any nation or government, any
----------------------
state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Grid Bid Loan Note": as defined in subsection 2.2(f);
------------------
collectively, the "Grid Bid Loan Notes".
-------------------
"Indebtedness": of a Person, at a particular date, the
------------
sum (without duplication) at such date of (a) indebtedness for
borrowed money (including, without limitation, any indebtedness
provided by any note, bond, debenture or other instrument) or for
the deferred purchase price of property or services in respect of
which such Person is liable, as obligor, (b) obligations of such
Person under Financing Leases and (c) any obligations of such
Person in respect of letters of credit, acceptances, or similar
obligations issued or created for the account of such Person.
<PAGE>
10
"Index Rate Bid Loan Request": any Bid Loan Request
---------------------------
requesting the Bid Loan Banks to offer to make Bid Loans at an
interest rate equal to the Applicable Index Rate plus (or minus) a
margin.
"Individual Bid Loan Note": as defined in subsection
------------------------
2.2(g).
"Insolvency": with respect to any Multiemployer Plan,
----------
the condition that such Plan is Insolvent within the meaning of
such term as used in Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Interest Payment Date": (a) as to any Alternate Base
---------------------
Rate Loan, the last day of each March, June, September and
December, commencing on the first of such days to occur after
Alternate Base Rate Loans are made, (b) as to any Eurodollar Loan
in respect of which the Company has selected an Interest Period of
one, two or three months and any C/D Rate Loan in respect of which
the Company has selected an Interest Period of 30, 60 or 90 days,
the last day of such Interest Period and (c) as to any Eurodollar
Loan and any C/D Rate Loan in respect of which the Company has
selected a longer Interest Period than the periods described in
clause (b) above, the last day of each March, June, September and
December falling within such Interest Period and the last day of
such Interest Period.
"Interest Period": (a) with respect to any Eurodollar
---------------
Loan, the period commencing on the Borrowing Date with respect to
such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Company in its notice of borrowing
as provided in subsection 2.1(d);
(b) with respect to any Alternate Base Rate Loan, the
period commencing on the Borrowing Date with respect to such
Alternate Base Rate Loan and ending on the earliest to occur of the
last day of March, June, September or December following such
Borrowing Date;
(c) with respect to any C/D Rate Loan, the period
commencing on the Borrowing Date with respect to such C/D Rate Loan
and ending 30, 60, 90 or 180 days thereafter, as selected by the
Company in its notice of borrowing as provided in subsection
2.1(d); and
(d) with respect to any Bid Loan made pursuant to a Bid
Loan Request, the period commencing on the Bid Loan Date with
respect to such Bid Loan and ending on the date not less than 7 nor
more than 180 days thereafter, as specified by the Company in such
Bid Loan Request;
provided that the foregoing provisions are subject to the
- --------
following:
<PAGE>
11
(A) if any Interest Period pertaining to a Eurodollar Loan or a Bid
Loan made pursuant to an Index Rate Bid Loan Request would otherwise end on a
day which is not a Working Day, that Interest Period shall be extended to the
next succeeding Working Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Working Day;
(B) any Interest Period pertaining to a Eurodollar Loan that begins
on the last Working Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Working Day of a calendar month;
(C) if any Interest Period pertaining to an Alternate Base Rate Loan
or a C/D Rate Loan or a Bid Loan made pursuant to an Absolute Rate Bid Loan
Request would otherwise end on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day;
(D) any Interest Period that would otherwise extend beyond the
Termination Date shall end on such Termination Date; and
(E) the Company shall select Interest Periods so as not to require a
prepayment of any Eurodollar Loan or C/D Rate Loan during an Interest Period for
such Loan.
"Lien": any mortgage, pledge, hypothecation, assignment,
----
deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention
agreement, any Financing Lease having substantially the same
economic effect as any of the foregoing, and the filing of any
financing statement under the Uniform Commercial Code or comparable
law of any jurisdiction in respect of any of the foregoing).
"Loan" and "Loans": the collective reference to the
---- -----
Revolving Credit Loans and the Bid Loans.
"Loan Commitment": as to any Bank, its obligation to
---------------
make Loans to the Company pursuant to subsection 2.1 in the amount
referred to therein; collectively, as to all the Banks, the "Loan
----
Commitments."
- -----------
"Margin Stock": "margin stock" as such term is defined
------------
in Regulation U of the Board of Governors of the Federal Reserve
System.
"Moody's": Moody's Investors Service, Inc.
-------
<PAGE>
12
"Multiemployer Plan": a Plan which is a multiemployer
------------------
plan as defined in Section 4001(a)(3) of ERISA.
"Notes": the collective reference to the Revolving
-----
Credit Notes and Bid Loan Notes; one of the Notes, a "Note."
----
"Participants": as defined in subsection 9.6(b).
------------
"Payment Sharing Notice": a written notice from the
----------------------
Company, or any Bank, informing the Agent that an Event of Default
has occurred and is continuing and directing the Agent to allocate
payments thereafter received from the Company in accordance with
subsection 2.11(c).
"PBGC": the Pension Benefit Guaranty Corporation
----
established pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation,
------
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity
of whatever nature.
"Plan": at any particular time, any employee benefit
----
plan which is covered by ERISA and in respect of which the Company
or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate": the rate of interest publicly announced by
----------
Chemical Bank in New York, New York from time to time as its prime
rate. The Prime Rate is not intended to be the lowest rate of
interest charged by Chemical Bank in connection with extensions of
credit to debtors.
"Purchasing Banks": as defined in subsection 9.6(d).
----------------
"Ratings": the ratings of Moody's and S&P applicable to
-------
the Company's senior unsecured non-credit enhanced long-term debt
obligations.
"Refunding Borrowing": a borrowing of Revolving Credit
-------------------
Loans which, after application of the proceeds thereof, results in
no net increase in the aggregate outstanding principal amount of
Revolving Credit Loans made by any Bank.
"Register": as defined in subsection 9.6(e).
--------
"Reorganization": with respect to any Multiemployer
--------------
Plan, the condition that such Plan is in reorganization within the
meaning of such term as used in Section 4245 of ERISA.
"Reportable Event": any of the events set forth in
----------------
Section 4043(b) of ERISA or the regulations thereunder.
<PAGE>
13
"Required Banks": at any date, Banks having Loan
--------------
Commitments aggregating over one-half of the total Loan Commitments
(or, at any time the Loan Commitments have expired or terminated,
the Banks having over one-half of the total Loans then
outstanding).
"Requirement of Law": as to any Person, the Certificate
------------------
of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its
property is subject.
"Reserve Percentage": for any day, that percentage
------------------
(expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System
(or any successor), for determining the maximum reserve requirement
for a member bank of the Federal Reserve System in New York City
with deposits exceeding one billion Dollars in respect of new non-
personal time deposits in Dollars in New York City having a
maturity comparable to the relevant Interest Period for any C/D
Rate Loan and in an amount of $100,000 or more.
"Responsible Officer": the Chief Executive Officer or
-------------------
the President of the Company or, with respect to financial matters,
the Chief Financial Officer of the Company.
"Revolving Credit Loans": Loans made pursuant to
----------------------
subsection 2.1; individually a "Revolving Credit Loan."
---------------------
"Revolving Credit Note": as defined in subsection
---------------------
2.1(c); collectively, the "Revolving Credit Notes."
----------------------
"S&P": Standard & Poor's Corporation.
---
"Single Employer Plan": any Plan which is not a
--------------------
Multiemployer Plan.
"Subsidiary": as to any Person, a corporation of which
----------
shares of stock having ordinary voting power (other than stock
having such power only by reason of the happening of a contingency)
to elect a majority of the board of directors or other managers of
such corporation are at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the
Company.
"Termination Date": November 16, 1999 or such earlier
----------------
date on which the Loan Commitments are terminated.
<PAGE>
14
"Transfer Effective Date": as defined in each Commitment
-----------------------
Transfer Supplement.
"Transferees": as defined in subsection 9.6(g).
-----------
"Type": as to any Revolving Credit Loan, its nature as
----
an Alternate Base Rate Loan, Eurodollar Loan or C/D Rate Loan.
"Working Day": any day on which dealings in foreign
-----------
currencies and exchange between banks may be carried on in London,
England and in New York, New York.
1.2 Other Definitional Provisions. (a) Unless
-----------------------------
otherwise specified herein, all terms defined in this Agreement
shall have the defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Notes, and any certificate
or other document made or delivered pursuant hereto, accounting
terms relating to the Company and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection
1.1 to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of
this Agreement, and section, subsection, schedule and exhibit
references are to this Agreement unless otherwise specified.
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the
----------------------------
terms and conditions hereof, each Bank severally agrees to make
revolving credit loans (individually a "Revolving Credit Loan") to
---------------------
the Company from time to time during the Commitment Period in an
aggregate principal amount at any one time outstanding not to
exceed the amount set opposite such Bank's name in Schedule I, as
such amount may be reduced as provided herein; provided that no
--------
Revolving Credit Loan shall be made hereunder which would result in
the Aggregate Loans outstanding hereunder being in excess of the
Loan Commitments then in effect. During the Commitment Period the
Company may use the Loan Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(b) No Eurodollar Loan or C/D Rate Loan shall be made
after the day that is 30 days prior to the Termination Date.
Eurodollar Loans shall be made and maintained by each Bank at its
Eurodollar Lending Office, and Domestic Dollar Loans shall be made
and maintained by each Bank at its Domestic Lending Office.
(c) The Revolving Credit Loans made by each Bank
pursuant hereto shall be evidenced by a promissory note of the
<PAGE>
15
Company, substantially in the form of Exhibit A with appropriate
insertions as to date and principal amount (a "Revolving Credit
----------------
Note"), payable to the order of such Bank and representing the
- ----
obligation of the Company to pay the lesser of (a) the amount of
the initial Loan Commitment of such Bank and (b) the aggregate
unpaid principal amount of all Revolving Credit Loans made by such
Bank, with interest thereon as prescribed herein. Each Bank is
hereby authorized to record the date, Type and amount of each
Revolving Credit Loan made by such Bank, the maturity date thereof,
and the date and amount of each payment or prepayment of principal
thereof, and the interest rate with respect thereto, on the
schedule annexed to and constituting a part of its Revolving Credit
Note, and any such recordation shall constitute prima facie
-----------
evidence of the accuracy of the information so recorded; provided,
--------
however, that the failure to make any such recordation shall not
- -------
affect the obligations of the Company hereunder or under the
Revolving Credit Note. Each Revolving Credit Note shall (x) be
dated the Closing Date and (y) finally mature on the Termination
Date. Each Revolving Credit Loan evidenced by a Revolving Credit
Note shall bear interest on the unpaid principal amount thereof
from time to time outstanding at the applicable interest rate per
annum determined as provided in, and shall be payable on the dates
specified in, subsections 2.8 and 2.9.
(d) The Company may borrow under the Loan Commitments
during the Commitment Period on any Working Day if the borrowing is
a Eurodollar Loan or on any Business Day if the borrowing is a C/D
Rate Loan or an Alternate Base Rate Loan; provided that the Company
--------
shall give the Agent irrevocable notice (which notice must be
received by the Agent prior to 10:00 A.M., New York City time, (a)
3 Working Days prior to the requested Borrowing Date, in the case
of Eurodollar Loans, and (b) 2 Business Days prior to the requested
Borrowing Date, in the case of Domestic Dollar Loans). Each such
notice shall be given in writing, by telex or by facsimile
transmission substantially in the form of Exhibit D (with
appropriate insertions) or shall be given by telephone (specifying
the information set forth in Exhibit D) promptly confirmed by
notice given in writing, by telex or by facsimile transmission
substantially in the form of Exhibit D (with appropriate
insertions). Each borrowing pursuant to the Loan Commitments shall
be in an aggregate principal amount of (a) the lesser of, in the
case of Alternate Base Rate Loans, (i) $10,000,000 or a whole
multiple thereof, and (ii) the Available Loan Commitments and (b)
the lesser of, in the case of Eurodollar Loans or C/D Rate Loans,
(i) $10,000,000 or a whole multiple of $1,000,000 in excess
thereof, and (ii) the Available Loan Commitments. Upon receipt of
such notice from the Company the Agent shall promptly notify each
Bank thereof and, in the case of Eurodollar Loans, shall use its
best efforts to notify the Banks which of its Eurodollar Lending
Offices it will use to make such Eurodollar Loans. Each Bank will
make the amount of its share of each borrowing available to the
Agent for the account of the Company at the office of the Agent set
forth in subsection 9.2 at 11:00 A.M. (or 3:00 P.M., in the case of
Alternate Base Rate
<PAGE>
16
Loans) on the Borrowing Date requested by the Company in funds immediately
available to the Agent as the Agent may direct. The proceeds of all such Loans
will then be made available to the Company by the Agent at the office of the
Agent specified in subsection 9.2 by crediting the account of the Company on the
books of such office of the Agent with the aggregate of the amount made
available to the Agent by the Banks and in like funds as received by the Agent.
(e) If any Bank makes a Revolving Credit Loan on a day
on which the Company is to repay all or any part of any outstanding
Revolving Credit Loan from such Bank, such Bank shall apply the
proceeds of the requested Revolving Credit Loan to make such
repayment, and only an amount equal to the difference (if any)
between the amount being borrowed and the amount being repaid shall
be made available by such Bank to the Agent as provided in
paragraph (c) above, or remitted by the Company to the Agent for
the account of such Bank as provided in subsection 2.6, as the case
may be.
2.2 The Bid Loans. (a) The Banks may make Bid Loans to
-------------
the Company from time to time on any Business Day (in the case of
Bid Loans made pursuant to an Absolute Rate Bid Loan Request) or
any Working Day (in the case of Bid Loans made pursuant to an Index
Rate Bid Loan Request) during the period from the Closing Date
until the date occurring 14 days prior to the Termination Date in
the manner set forth in this subsection 2.2 and in amounts such
that the Aggregate Loans at any time outstanding shall not exceed
the aggregate amount of the Loan Commitments at such time;
provided, however, that the aggregate principal amount of the
- -------- -------
outstanding Bid Loans of a Bank may (but shall not be required to)
exceed its Loan Commitment.
(b) (i) The Company shall request Bid Loans by
delivering a Bid Loan Request to the Agent, not later than 12:00
Noon (New York City time) four Working Days prior to the proposed
Bid Loan Date (in the case of an Index Rate Bid Loan Request), and
not later than 10:00 A.M. (New York City time) one Business Day
prior to the proposed Bid Loan Date (in the case of an Absolute
Rate Bid Loan Request); provided that (i) an Index Rate Bid Loan
--------
request shall not be made until at least one Business Day has
passed since the most recent Bid Loan Date and (ii) an Absolute
Rate Bid Loan Request shall not be made until at least four
Business Days have passed since the most recent Bid Loan Date.
Each Bid Loan Request may solicit bids for Bid Loans in an
aggregate principal amount of $10,000,000 or an integral multiple
in excess of $1,000,000 thereof and for not more than three
alternative maturity dates for such Bid Loans. The maturity date
for each Bid Loan shall be not less than 7 days nor more than 180
days after the Bid Loan Date therefor (and in any event not after
the Termination Date and in any event subject to the proviso to the
definition of "Interest Period"). The Agent shall promptly notify
each Bid Loan Bank by telex or facsimile transmission of the
contents of each Bid Loan Request received by it.
<PAGE>
17
(ii) In the case of an Index Rate Bid Loan Request, upon
receipt of notice from the Agent of the contents of such Bid Loan
Request, any Bid Loan Bank that elects, in its sole discretion, to
do so, shall irrevocably offer to make one or more Bid Loans at the
Applicable Index Rate plus or minus a margin for each such Bid Loan
determined by such Bid Loan Bank in its sole discretion. Any such
irrevocable offer shall be made by delivering a Bid Loan Offer to
the Agent, before 10:30 A.M. (New York City time) three Working
Days before the proposed Bid Loan Date, setting forth the maximum
amount of Bid Loans for each maturity date, and the aggregate
maximum amount for all maturity dates, which such Bank would be
willing to make (which amounts may, subject to subsection 2.2(a),
exceed such Bid Loan Bank's Loan Commitment) and the margin above
or below the Applicable Index Rate at which such Bid Loan Bank is
willing to make each such Bid Loan; the Agent shall advise the
Company before 11:15 A.M. (New York City time) three Working Days
before the proposed Bid Loan Date, of the contents of each such Bid
Loan Offer received by it. If the Agent in its capacity as a Bid
Loan Bank shall, in its sole discretion, elect to make any such
offer, it shall advise the Company of the contents of its Bid Loan
Offer before 10:15 A.M. (New York City time) three Working Days
before the proposed Bid Loan Date.
(iii) In the case of an Absolute Rate Bid Loan Request, upon
receipt of notice from the Agent of the contents of such Bid Loan
Request, any Bid Loan Bank that elects, in its sole discretion, to
do so, shall irrevocably offer to make one or more Bid Loans at a
rate or rates of interest for each such Bid Loan determined by such
Bid Loan Bank in its sole discretion. Any such irrevocable offer
shall be made by delivering a Bid Loan Offer to the Agent, before
9:30 A.M. (New York City time) on the proposed Bid Loan Date,
setting forth the maximum amount of Bid Loans for each maturity
date, and the aggregate maximum amount for all maturity dates,
which such Bid Loan Bank would be willing to make (which amounts
may, subject to subsection 2.2(a), exceed such Bid Loan Bank's Loan
Commitment) and the rate or rates of interest at which such Bid
Loan Bank is willing to make each such Bid Loan; the Agent shall
advise the Company before 10:15 A.M. (New York City time) on the
proposed Bid Loan Date of the contents of each such Bid Loan Offer
received by it. If the Agent in its capacity as a Bid Loan Bank
shall, in its sole discretion, elect to make any such offer, it
shall advise the Company of the contents of its Bid Loan Offer
before 9:15 A.M. (New York City time) on the proposed Bid Loan
Date.
(iv) The Company shall before 11:30 A.M. (New York City
time) three Working Days before the proposed Bid Loan Date (in the
case of Bid Loans requested by an Index Rate Bid Loan Request) and
before 10:30 A.M. (New York City time) on the proposed Bid Loan
Date (in the case of Bid Loans requested by an Absolute Rate Bid
Loan Request) either, in its absolute discretion:
(A) cancel such Bid Loan Request by giving the Agent
telephone notice to that effect, or
<PAGE>
18
(B) accept one or more of the offers made by any Bid
Loan Bank or Bid Loan Banks pursuant to clause (ii) or clause (iii)
above, as the case may be, by giving telephone notice to the Agent
(immediately confirmed by delivery to the Agent of a Bid Loan
Confirmation) of the amount of Bid Loans for each relevant maturity
date to be made by each Bid Loan Bank (which amount for each such
maturity date shall be equal to or less than the maximum amount for
such maturity date specified in the Bid Loan Offer of such Bid Loan
Bank, and for all maturity dates included in such Bid Loan Offer
shall be equal to or less than the aggregate maximum amount
specified in such Bid Loan Offer for all such maturity dates) and
reject any remaining offers made by Bid Loan Banks pursuant to
clause (ii) or clause (iii) above, as the case may be; provided,
--------
however, that (x) the Company may not accept offers for Bid Loans
- -------
for any maturity date in an aggregate principal amount in excess of
the maximum principal amount requested in the related Bid Loan
Request, (y) if the Company accepts any of such offers, it must
accept offers strictly based upon pricing for such relevant
maturity date and no other criteria whatsoever and (z) if two or
more Bid Loan Banks submit offers for any maturity date at
identical pricing and the Company accepts any of such offers but
does not wish to borrow the total amount offered by such Bid Loan
Banks with such identical pricing, the Company shall accept offers
from all of such Bid Loan Banks in amounts allocated among them pro
---
rata according to the amounts offered by such Bid Loan Banks (or as
- ----
nearly pro rata as shall be practicable after giving effect to the
--- ----
requirement that any Bid Loans made by a Bid Loan Bank on a Bid
Loan Date for each relevant maturity date shall be in a principal
amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof, it being agreed that to the extent that it is
impossible to make allocations in accordance with the provisions of
this clause (B) such allocations shall be made in accordance with
the instructions of the Company).
(v) If the Company notifies the Agent that a Bid Loan
Request is cancelled pursuant to clause (iv) (A) above, the Agent
shall give prompt telephone notice thereof to the Bid Loan Banks,
and the Bid Loans requested thereby shall not be made.
(vi) If the Company accepts pursuant to clause (iv) (B)
above one or more of the offers made by any Bid Loan Bank or Bid
Loan Banks, the Agent shall promptly notify each Bid Loan Bank
which has made such an offer, of the aggregate amount of such Bid
Loans to be made on such Bid Loan Date for each maturity date and
of the acceptance or rejection of any offers to make such Bid Loans
made by such Bid Loan Bank. Each Bid Loan Bank which is to make a
Bid Loan shall, before 12:00 Noon (New York City time) on the Bid
Loan Date specified in the Bid Loan Request applicable thereto,
make available to the Agent at its office set forth in subsection
9.2 the amount of Bid Loans to be made by such Bid Loan Bank, in
immediately available funds. The Agent will make such funds
available to the Company as soon as practicable on such date at the
Agent's aforesaid address. As soon as practicable after each Bid
Loan Date, the Agent shall notify each Bank of the
<PAGE>
19
aggregate amount of Bid Loans advanced on such Bid Loan Date and the
respective maturity dates thereof.
(c) Within the limits and on the conditions set forth in
this subsection 2.2, the Company may from time to time borrow under
this subsection 2.2, repay pursuant to paragraph (d) below, and
reborrow under this subsection 2.2.
(d) The Company shall repay to the Agent for the account
of each Bid Loan Bank which has made a Bid Loan (or the Bid Loan
Assignee in respect thereof, as the case may be) on the maturity
date of each Bid Loan (such maturity date being that specified by
the Company for repayment of such Bid Loan in the related Bid Loan
Request) the then unpaid principal amount of such Bid Loan. The
Company shall not have the right to prepay any principal amount of
any Bid Loan.
(e) The Company shall pay interest on the unpaid
principal amount of each Bid Loan from the Bid Loan Date to the
stated maturity date thereof, at the rate of interest determined
pursuant to paragraph (b) above (calculated on the basis of a 360
day year for actual days elapsed), payable on the interest payment
date or dates specified by the Company for such Bid Loan in the
related Bid Loan Request as provided in the Bid Loan Note
evidencing such Bid Loan. If all or a portion of the principal
amount of any Bid Loan shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue
principal amount shall, without limiting any rights of any Bank
under this Agreement, bear interest from the date on which such
payment was due at a rate per annum which is 2% above the rate
which would otherwise be applicable pursuant to the Bid Loan Note
evidencing such Bid Loan until the scheduled maturity date with
respect thereto as set forth in the Bid Loan Note evidencing such
Bid Loan, and for each day thereafter at a rate per annum which is
2% above the Alternate Base Rate until paid in full (as well after
as before judgment).
(f) The Bid Loans made by each Bid Loan Bank shall be
evidenced initially by a promissory note of the Company,
substantially in the form of Exhibit B with appropriate insertions
(a "Grid Bid Loan Note"), payable to the order of such Bid Loan
------------------
Bank and representing the obligation of the Company to pay the
unpaid principal amount of all Bid Loans made by such Bid Loan
Bank, with interest on the unpaid principal amount from time to
time outstanding of each Bid Loan evidenced thereby as prescribed
in subsection 2.2(e). Each Bid Loan Bank is hereby authorized to
record the date and amount of each Bid Loan made by such Bank, the
maturity date thereof, the date and amount of each payment of
principal thereof and the interest rate with respect thereto on the
schedule annexed to and constituting part of its Grid Bid Loan
Note, and any such recordation shall constitute prima facie
----- -----
evidence of the accuracy of the information so recorded; provided,
--------
however, that the failure to make any such recordation shall not
- -------
affect the obligations of the Company hereunder or under any Grid
<PAGE>
20
Bid Loan Note. Each Grid Bid Loan Note shall be dated the Closing
Date and each Bid Loan evidenced thereby shall bear interest for
the period from and including the Bid Loan Date thereof on the
unpaid principal amount thereof from time to time outstanding at
the applicable rate per annum determined as provided in, and such
interest shall be payable as specified in, subsection 2.2(e).
(g) Amounts advanced by a Bid Loan Bank pursuant to this
subsection 2.2 on a Bid Loan Date which have the same maturity date
and interest rate shall be deemed to constitute one Bid Loan so
long as such amounts remain evidenced by the Grid Bid Loan Note of
such Bid Loan Bank; any such Bid Loan Bank that wishes such amounts
to constitute more than one Bid Loan and to have each such Bid Loan
evidenced by a separate promissory note payable to such Bid Loan
Bank, substantially in the form of Exhibit C with appropriate
insertions as to Bid Loan Date, principal amount and interest rate
(an "Individual Bid Loan Note"), shall notify the Bid Loan Agent
------------------------
and the Company by telex or facsimile transmission of the
respective principal amounts of the Bid Loans (which principal
amounts shall not be less than $5,000,000 for any of such Bid
Loans) to be evidenced by each such Individual Bid Loan Note. Not
later than three Business Days after receipt of such notice, the
Company shall deliver to such Bid Loan Bank an Individual Bid Loan
Note payable to the order of such Bid Loan Bank in the principal
amount of each such Bid Loan and otherwise conforming to the
requirements of this Agreement. Upon receipt of such Individual
Bid Loan Note, such Bid Loan Bank shall endorse on the Schedule
attached to its Grid Bid Loan Note the transfer of such Bid Loan
from Grid Bid Loan Note to such Individual Bid Loan Note, and any
such endorsement shall constitute prima facie evidence of the
----- -----
accuracy of the information so endorsed; provided, however, that
-------- -------
the failure to make any such endorsement shall not affect the
obligation of the Company hereunder or under any Individual Bid
Loan Note.
2.3 Type of Revolving Credit Loans. The Revolving
------------------------------
Credit Loans may be (i) Eurodollar Loans, (ii) Alternate Base Rate
Loans, (iii) C/D Rate Loans, or (iv) a combination thereof. Each
borrowing of Revolving Credit Loans shall be in an aggregate
principal amount of $10,000,000 or a whole multiple of $1,000,000
in excess thereof.
2.4 Fees. The Company agrees to pay, in immediately
----
available funds, to the Agent for the account of each Bank a
facility fee (a "Facility Fee"), from and including the date of
-------- ---
this Agreement to, but excluding, the Termination Date, payable
quarterly in arrears on the last day of each March, June, September
and December and on the Termination Date (or such earlier date on
which the Loan Commitments shall terminate as provided herein),
commencing on the first of such dates to occur after the date
hereof, at a rate per annum equal to the Applicable Facility Fee
Percentage from time to time in effect on each Bank's portion of
the daily average Loan Commitments in effect, whether
<PAGE>
21
used or unused, during the period for which payment is being made.
2.5 Termination or Reduction of Loan Commitments. The
--------------------------------------------
Company shall have the right, upon not less than 5 Business Days'
notice to the Agent, to terminate the Loan Commitments or, from
time to time, reduce pro rata the amount of the Loan Commitments,
--- ----
provided that (a) any such reduction shall be accompanied by
- --------
prepayment of the Revolving Credit Loans, together with accrued
interest on the amount so prepaid to the date of such prepayment,
to the extent, if any, that the amount of the Revolving Credit
Loans then outstanding exceeds the amount of the Loan Commitments
as then reduced, (b) any such termination of the Loan Commitments
shall be accompanied by prepayment in full of the Revolving Credit
Loans then outstanding, together with accrued interest thereon to
the date of such prepayment, and the payment of any unpaid facility
fee then accrued hereunder and (c) any termination of the Loan
Commitments while Eurodollar Loans or C/D Rate Loans are
outstanding and any reduction of the aggregate amount of the Loan
Commitments that reduces the amount of the Loan Commitments below
the principal amount of the Eurodollar Loans and C/D Rate Loans
then outstanding may be made only on the last day of the respective
Interest Periods for such Eurodollar Loans and/or C/D Rate Loans.
Any such reduction shall be in an amount of $10,000,000 or a whole
multiple thereof, and shall reduce permanently the amount of the
Loan Commitments then in effect.
2.6 Repayment of Loans. Subject to subsection 2.1(e),
------------------
the Company will pay to the Agent for the account of each Bank the
unpaid principal amount of each Revolving Credit Loan made by such
Bank, plus all interest accrued thereon, on the last day of the
Interest Period applicable thereto.
2.7 Optional Prepayments. (a) The Company may on the
--------------------
last day of the relevant Interest Period if the Loans to be prepaid
are in whole or in part Eurodollar Loans or C/D Rate Loans, or at
any time and from time to time if the Loans to be prepaid are
Alternate Base Rate Loans, prepay the Revolving Credit Loans, in
whole or in part, without premium or penalty, upon at least four
Business Days' irrevocable notice to the Agent, specifying the date
and amount of prepayment and whether the prepayment is of
Eurodollar Loans or Alternate Base Rate Loans or C/D Rate Loans or
a combination thereof, and if of a combination thereof, the amount
of prepayment allocable to each. Upon receipt of such notice the
Agent shall promptly notify each Bank thereof. If such notice is
given, the Company shall make such prepayment, and the payment
amount specified in such notice shall be due and payable on the
date specified therein. Partial prepayments shall be in an
aggregate principal amount of $10,000,000 or a whole multiple
thereof, and may only be made if, after giving effect thereto,
subsection 2.7(c) shall not have been contravened.
(b) The Company may not prepay Bid Loans.
<PAGE>
22
(c) All payments and prepayments hereunder shall be in
such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of the
Revolving Credit Loans which are Eurodollar Loans or C/D Rate Loans
having the same Interest Period shall not be less than $10,000,000.
2.8 Interest Rate and Payment Dates. (a) The
-------------------------------
Eurodollar Loans shall bear interest for each Interest Period with
respect thereto on the unpaid principal amount thereof at a rate
per annum equal to the Eurodollar Rate determined for such Interest
Period plus the Applicable Margin.
(b) Alternate Base Rate Loans shall bear interest for
the period from and including the date thereof until maturity on
the unpaid principal amount thereof at a rate per annum equal to
the Alternate Base Rate plus the Applicable Margin.
(c) The C/D Rate Loans shall bear interest for each
Interest Period with respect thereto on the unpaid principal amount
thereof at a rate per annum equal to the C/D Rate determined for
such Interest Period plus the Applicable Margin.
(d) If all or a portion of the principal amount of any
of the Revolving Credit Loans shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise) each
Eurodollar Loan and C/D Rate Loan shall be automatically converted
to an Alternate Base Rate Loan at the end of the then-current
Interest Period for such Eurodollar Loan or C/D Rate Loan, and any
such overdue principal amount and overdue interest, to the extent
permitted by law, shall bear interest at a rate per annum which is
2% per annum above the rate which would otherwise be applicable
thereto from the date of such non-payment until paid in full (as
well after as before judgment).
(e) Interest on the Loans shall be payable in arrears on
each Interest Payment Date.
2.9 Computation of Interest and Fees. (a) All interest
--------------------------------
in respect of Alternate Base Rate Loans shall be calculated on the
basis of a 360 day year for the actual days elapsed, except where
the applicable interest rate for such Loan is the Prime Rate, in
which case the rate per annum shall be computed on the basis of a
365 (or 366 as the case may be) day year for the actual days
elapsed. Facility Fees and interest in respect of Eurodollar Loans
and C/D Rate Loans shall be calculated on the basis of a 360 day
year for the actual days elapsed. The Agent shall as soon as
practicable notify the Company and the Banks of each determination
of a Eurodollar Rate and of a C/D Rate. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate,
the Applicable Margin or the Reserve Percentage shall become
effective as of the opening of business on the day on which such
change in the Alternate Base Rate is announced or such Applicable
Margin changes as provided
<PAGE>
23
herein or such change in the Reserve Percentage shall become
effective. The Agent shall as soon as practicable notify the Company
and the Banks of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and
binding on the Company and the Banks in the absence of manifest
error. The Agent shall, at the request of the Company, deliver to
the Company a statement showing the quotations used by the Agent in
determining any interest rate pursuant to subsection 2.8 (a) or
(c).
2.10 Inability to Determine Interest Rate. (a) In the
------------------------------------
event that the Agent shall have determined (which determination
shall be conclusive and binding upon the Company) that by reason of
circumstances affecting the interbank eurodollar market, adequate
and reasonable means do not exist for ascertaining the Eurodollar
Rate for any requested Interest Period with respect to proposed
Loans that the Company has requested be made as Eurodollar Loans,
the Agent shall forthwith give telex or facsimile notice of such
determination, confirmed in writing, to the Company and the Banks
at least one day prior to the requested Borrowing Date for such
Eurodollar Loans. If such notice is given any requested Eurodollar
Loans shall be made as Alternate Base Rate Loans. Until such
notice has been withdrawn by the Agent, no further Eurodollar Loans
shall be made.
(b) In the event that the Agent shall have determined
(which determination shall be conclusive and binding upon the
Company) that by reason of circumstances affecting the domestic
certificate of deposit market, adequate and reasonable means do not
exist for ascertaining the C/D Rate for any requested Interest
Period with respect to proposed Loans that the Company has
requested be made as C/D Rate Loans, the Agent shall forthwith give
telex or facsimile notice of such determination, confirmed in
writing, to the Company and the Banks at least one day prior to the
requested Borrowing Date for such C/D Rate Loans. If such notice
is given any requested C/D Rate Loans shall be made as Alternate
Base Rate Loans. Until such notice has been withdrawn by the
Agent, no further C/D Rate Loans shall be made.
(c) In the event that the Agent shall have determined
(which determination shall be conclusive and binding upon the
Company) that by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for any Interest Period with
respect to proposed Bid Loans to be made pursuant to an Index Rate
Bid Loan Request, the Agent shall forthwith give telex, telecopy or
telephone notice of such determination, confirmed in writing, to
the Company and the Banks at least two Business Days prior to the
proposed Bid Loan Date, and such Bid Loans shall not be made on
such Bid Loan Date. Until any such notice has been withdrawn
<PAGE>
24
by the Agent, no further Index Rate Bid Loan Requests shall be
submitted by the Company.
2.11 Pro Rata Borrowings and Payments. (a) Each
--------------------------------
borrowing by the Company of Revolving Credit Loans shall be made
ratably from the Banks in accordance with their Commitment
Percentages.
(b) Whenever any payment received by the Agent under
this Agreement or any Note is insufficient to pay in full all
amounts then due and payable to the Agent and the Banks under this
Agreement and the Notes, and the Agent has not received a Payment
Sharing Notice (or if the Agent has received a Payment Sharing
Notice but the Event of Default specified in such Payment Sharing
Notice has been cured or waived), such payment shall be distributed
and applied by the Agent and the Banks in the following order:
first, to the payment of fees and expenses due and payable to the
- -----
Agent, acting as Agent for the benefit of the Banks, under and in
connection with this Agreement; second, to the payment of all
------
expenses due and payable under subsection 9.5, ratably among the
Banks in accordance with the aggregate amount of such payments owed
to each such Bank; third, to the payment of fees due and payable
-----
under subsection 2.4, ratably among the Banks in accordance with
their Commitment Percentages; fourth, to the payment of interest
------
then due and payable under the Notes, ratably among the Banks in
accordance with the aggregate amount of interest owed to each such
Bank; and fifth, to the payment of the principal amount of the
-----
Notes which is then due and payable, ratably among the Banks in
accordance with the aggregate principal amount owed to each such
Bank.
(c) After the Agent has received a Payment Sharing
Notice which remains in effect, all payments received by the Agent
under this Agreement or any Note shall be distributed and applied
by the Agent and the Banks in the following order: first, to the
-----
payment of all amounts described in clauses first through third of
----- -----
the foregoing paragraph (b), in the order set forth therein; and
second, to the payment of the interest accrued on and the principal
- ------
amount of all of the Notes, regardless of whether any such amount
is then due and payable, ratably among the Banks in accordance with
the aggregate accrued interest plus the aggregate principal amount
owed to such Bank.
(d) All payments (including prepayments) to be made by
the Company on account of principal, interest and fees shall be
made without set-off or counterclaim and shall be made to the Agent
for the account of the Banks at the Agent's office specified in
subsection 9.2 in Dollars and in immediately available funds. The
Agent shall distribute such payments to the Banks entitled thereto
promptly upon receipt in like funds as received. If any payment
hereunder of fees or principal of or interest on C/D Rate Loans,
Alternate Base Rate Loans or Bid Loans made pursuant to an Absolute
Rate Bid Loan Request, becomes due and payable on a day other than
a Business Day, such payment shall be extended to the
<PAGE>
25
next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable during such extension at the rate then
applicable thereunder.
2.12 Taxes. (a) All payments made by the Company under
-----
this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deduction
or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding, in
the case of the Agent and each Bank, net income and franchise taxes
imposed on the Agent or such Bank by the jurisdiction under the
laws of which the Agent or such Bank is organized or any political
subdivision or taxing authority thereof or therein, or by any
jurisdiction in which such Bank's Domestic Lending Office or
Eurodollar Lending Office, as the case may be, is located or any
political subdivision or taxing authority thereof or therein (such
non-excluded taxes being called "Taxes"). If any Taxes are
required to be withheld from any amounts payable to the Agent or
any Bank hereunder or under the Notes, the amounts so payable to
the Agent or such Bank shall be increased to the extent necessary
to yield to the Agent or such Bank (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement and the Notes.
Whenever any Taxes are payable by the Company, as promptly as
possible thereafter, the Company shall send to the Agent for its
own account or for the account of such Bank, as the case may be, a
certified copy of an original official receipt showing payment
thereof. If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the
Company shall indemnify the Agent and the Banks for any incremental
taxes, interest or penalties that may become payable to the Agent
or any Bank as a result of any such failure.
(b) Prior to the first Interest Payment Date each Bank
that is not incorporated under the laws of the United States of
America or a state thereof agrees that it will deliver to the
Company and the Agent, (i) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, certifying in each case that
such Bank is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal
income taxes, and (ii) an Internal Revenue Service Form W-8 or W-9
or successor applicable form, as the case may be, to establish an
exemption from United States backup withholding tax. Each Bank
which delivers to the Company and the Agent a Form 1001 or 4224 and
Form W-8 or W-9 pursuant to the next preceding sentence further
undertakes to deliver to the Company and the Agent two further
copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, or other manner of certification, as
the case may be, on or before the date that any such form expires
or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by
<PAGE>
26
it to the Company, and such extensions or renewals thereof as may
reasonably be requested by the Company, certifying in the case of a
Form 1001 or 4224 that such Bank is entitled to receive payments under
this Agreement without deduction or withholding of any United States
federal income taxes, unless in any such cases an event (including
without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable or which would
prevent a Bank from duly completing and delivering any such form with
respect to it and such Bank advises the Company that it is not capable
of receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.
(c) Each Bank agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office
or Eurodollar Lending Office, as the case may be) to avoid or to
minimize any amounts which might otherwise be payable pursuant to
this subsection; provided, however, that such efforts shall not
-------- -------
cause the imposition on such Bank of any additional costs or legal
or regulatory burdens deemed by such Bank to be material.
(d) The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
2.13 Illegality. Notwithstanding any other provisions
----------
herein, if any Requirement of Law or any change therein or in the
interpretation or application thereof shall make it unlawful for
any Bank to make or maintain Eurodollar Loans as contemplated by
this Agreement, (a) the commitment of such Bank hereunder to make
Eurodollar Loans shall forthwith be cancelled and (b) such Bank's
Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Alternate Base Rate Loans on the
respective next succeeding Interest Payment Date(s) for such Loans
or within such earlier period as required by law. The Company
hereby agrees promptly to pay any Bank, upon its demand, any
additional amounts necessary to compensate such Bank for any costs
incurred by such Bank in making any conversion in accordance with
this subsection 2.13 including, but not limited to, any interest or
fees payable by such Bank to lenders of funds obtained by it in
order to make or maintain its Eurodollar Loans hereunder (such
Bank's notice of such costs, as certified to the Company through
the Agent, to be conclusive absent manifest error).
2.14 Requirements of Law. (a) In the event that any
-------------------
Requirement of Law or any change therein or in the interpretation
or application thereof or compliance by any Bank with any request
or directive (whether or not having the force of law) from any
central bank or other Governmental Authority:
<PAGE>
27
(i) does or shall subject any Bank to any tax of any
kind whatsoever with respect to this Agreement, any Note or any
Loans made by it, or change the basis of taxation of payments to
such Bank of principal, fees, interest or any other amount payable
hereunder (except for changes in the rate of tax on the overall net
income of such Bank);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for
the account of, advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of such Bank which
are not otherwise included in the determination of the Eurodollar
Rate or the C/D Rate hereunder; or
(iii) does or shall impose on such Bank any other
condition;
and the result of any of the foregoing is to increase the cost to
such Bank of making, renewing or maintaining advances or extensions
of credit or to reduce any amount receivable hereunder, in each
case, in respect of its Eurodollar Loans or C/D Rate Loans, then,
in any such case, the Company shall promptly pay such Bank, upon
its demand, any additional amounts necessary to compensate such
Bank for such additional cost or reduced amount receivable which
such Bank deems to be material as determined by such Bank with
respect to such Eurodollar Loans or C/D Rate Loans. If a Bank
becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify the Company, through the
Agent, of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by such Bank, through the Agent, to
the Company shall be conclusive in the absence of manifest error.
(b) In the event that any Bank shall have determined
that the adoption of any law, rule or regulation regarding capital
adequacy, or any change therein or in the interpretation or
application thereof or compliance by such Bank or any corporation
controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
central bank or Governmental Authority, does or shall have the
effect of reducing the rate of return on such Bank's or such
corporation's capital as a consequence of its obligations hereunder
to a level below that which such Bank or such corporation could
have achieved but for such adoption, change or compliance (taking
into consideration such Bank's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank to be
material, then from time to time, within 15 days after demand by
such Bank, the Company shall pay to such Bank such additional
amount as shall be requested by such Bank as being required to
compensate it for such reduction.
<PAGE>
28
(c) This covenant shall survive the termination of this
Agreement and payment of the outstanding Notes.
2.15 Indemnity. The Company agrees to indemnify each
---------
Bank and to hold such Bank harmless from any loss or expense which
such Bank may sustain or incur as a consequence of (a) default by
the Company in payment of the principal amount of or interest on
any Eurodollar Loans or C/D Rate Loans of such Bank, including, but
not limited to, any such loss or expense arising from interest or
fees payable by such Bank to lenders of funds obtained by it in
order to make or maintain its Eurodollar Loans or C/D Rate Loans
hereunder, (b) default by the Company in making a borrowing after
the Company has given a notice in accordance with subsection 2.1(d)
or 2.2(b)(iv)(B), including, but not limited to, any such loss or
expense arising from interest or fees payable to such Bank to
lenders of funds obtained by it to make or maintain its Eurodollar
Loans or C/D Rate Loans hereunder and (c) default by the Company in
making any prepayment after the Company has given a notice in
accordance with subsection 2.7 or (d) a prepayment, voluntary or
involuntary, of a Eurodollar Loan or a C/D Rate Loan on a day which
is not the last day of an Interest Period with respect thereto,
including, but not limited to, any such loss or expense arising
from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its Eurodollar Loans or C/D
Rate Loans hereunder. This covenant shall survive termination of
this Agreement and payment of the outstanding Notes.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Banks to enter into this
Agreement and to make the Loans herein provided for, the Company
hereby represents and warrants to the Agent and to each Bank that:
3.1 Financial Condition. The consolidated balance
-------------------
sheets of the Company and its consolidated Subsidiaries as at
December 31, 1992 and December 31, 1993 and the related
consolidated statements of income and stockholders' equity and cash
flow for the fiscal years ended on such dates, reported on by
Coopers & Lybrand, copies of which have heretofore been furnished
to each Bank, are complete and correct and present fairly the
consolidated financial condition of the Company and its
consolidated Subsidiaries as at such date, and the consolidated
results of their operations and changes in financial position for
the fiscal years then ended. The unaudited consolidated balance
sheet of the Company and its consolidated Subsidiaries as at June
30, 1994 and the related unaudited consolidated statements of
income and cash flow for the three and six month periods ended on
such date, copies of which have heretofore been furnished to each
Bank, are complete and correct and present fairly the consolidated
financial condition of the Company and its consolidated
Subsidiaries as at such date, and the consolidated results of their
operations and cash flow for the three and six month periods then
ended (subject to normal year-end audit adjustments). All
<PAGE>
29
such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved. Neither the Company nor
any of its consolidated Subsidiaries had on June 30, 1994 any material
Contingent Obligation, contingent liabilities or liability for taxes,
long-term lease or unusual forward or long-term commitment, which is
not reflected in the unaudited consolidated balance sheet as at June
30, 1994 or in the notes thereto.
3.2 No Change. Since December 31, 1993 there has been
---------
no material adverse change in the business, operations, property or
financial or other condition of the Company and its Subsidiaries
taken as a whole.
3.3 Corporate Existence; Compliance with Law. Each of
----------------------------------------
the Company and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation, (b) has the corporate power and authority and
the legal right to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or
the conduct of its business requires such qualification and where
the failure to be so qualified would have a material adverse effect
upon the business operations, property or financial or other
condition of the Company and its Subsidiaries taken as a whole and
(d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, in the
aggregate, have a material adverse effect on the business,
operations, property or financial or other condition of the Company
and its Subsidiaries taken as a whole and could not materially
adversely affect the ability of the Company to perform its
obligations under this Agreement and the Notes.
3.4 Corporate Power; Authorization; Enforceable
-------------------------------------------
Obligations. The Company has the corporate power and authority and
- -----------
the legal right to make, deliver and perform this Agreement and the
Notes and to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of
this Agreement and the Notes and to authorize the execution,
delivery and performance of this Agreement and the Notes. No
consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection
with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or the
Notes. This Agreement has been, and each Note will be, duly
executed and delivered on behalf of the Company. This Agreement
constitutes, and each Note when executed and delivered will
constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
<PAGE>
30
affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
3.5 No Legal Bar. The execution, delivery and
------------
performance of this Agreement and the Notes, the borrowings
hereunder and the use of the proceeds thereof, will not violate any
Requirement of Law or any Contractual Obligation of the Company or
of any of its Subsidiaries, and will not result in, or require, the
creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any Requirement of
Law or Contractual Obligation.
3.6 No Material Litigation. No litigation,
----------------------
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the
Company, threatened by or against the Company or any of its
Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to this Agreement or the Notes or any
of the transactions contemplated hereby, or (b) which could have a
material adverse effect on the business, operations, property or
financial or other condition of the Company and its Subsidiaries
taken as a whole.
3.7 No Default. Neither the Company nor any of its
----------
Subsidiaries is in default in any material respect under or with
respect to any Contractual Obligation which could be materially
adverse to the business, operations, property or financial or other
condition of the Company and its Subsidiaries taken as a whole or
which could materially adversely affect the ability of the Company
or any Subsidiary to perform its obligations under this Agreement
and the Notes. No Default or Event of Default has occurred and is
continuing.
3.8 Ownership of Property; Liens. Each of the Company
----------------------------
and its Subsidiaries has good record and marketable title in fee
simple to or valid leasehold interests in all its real property
which is material to the Company and its Subsidiaries, and good
title to all its other property which is material to the Company
and its Subsidiaries and none of such property is subject to any
Lien of any nature whatsoever which is prohibited by subsection 6.1
hereof.
3.9 No Burdensome Restrictions. No Contractual
--------------------------
Obligation of the Company or any of its Subsidiaries and no
Requirement of Law materially adversely affects, or insofar as the
Company may reasonably foresee may so affect, the business,
operations, property or financial or other condition of the Company
and its Subsidiaries taken as a whole.
3.10 Taxes. Each of the Company and its Subsidiaries
-----
has filed or caused to be filed all tax returns which to the
knowledge of the Company are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any
<PAGE>
31
assessment made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority (other than those the amount or
validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the Company
or its Subsidiaries, as the case may be); and no tax liens have
been filed and, to the knowledge of the Company, no claims are
being asserted with respect to any such taxes, fees or other
charges.
3.11 Federal Regulations. No part of the proceeds of
-------------------
any Loans hereunder will be used for the purpose, whether
immediate, incidental, or ultimate, of purchasing any Margin Stock
of any corporation or carrying any Margin Stock of any corporation,
or for any purpose which violates Regulation U of the Board of
Governors of the Federal Reserve System, or which would be
inconsistent with or violate, the provisions of any of the
Regulations of such Board of Governors. If requested by any Bank
or the Agent, the Company will furnish to the Agent and each Bank a
statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in said Regulation U.
3.12 ERISA. The withdrawal by the Company or any of its
-----
Subsidiaries or any Commonly Controlled Entity from all
Multiemployer Plans in which they participate would not have a
material adverse effect on the business, operations, property or
financial or other condition of the Company and its Subsidiaries
taken as a whole. The Company has not been notified that any
Multiemployer Plan to which the Company, any of its Subsidiaries or
any Commonly Controlled Entity contributes is either in
Reorganization or Insolvent. All Single Employer Plans maintained
by the Company, any of its Subsidiaries or any Commonly Controlled
Entity are in material compliance with all applicable requirements
of ERISA. The sum of the present value of all accrued benefits
vested under all Single Employer Plans maintained by the Company or
any of its Subsidiaries or any Commonly Controlled Entity (based on
assumptions used to fund such Plans) did not, as of December 31,
1993, exceed the value of the assets of such Plans allocable to
such vested benefits.
3.13 Investment Company Act. The Company is not an
----------------------
"investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940,
as amended.
3.14 Subsidiaries. All of the Subsidiaries of the
------------
Company at the date hereof are set forth on Schedule IV.
3.15 Purpose of Loans. The proceeds of the Loans shall
----------------
be used by the Company for general corporate purposes.
<PAGE>
32
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans. The obligation of each
---------------------------
Bank to make a Loan hereunder on the Closing Date is subject to the
satisfaction of the following conditions precedent:
(a) Notes. The Agent shall have received for the
-----
account of each Bank a Revolving Credit Note and a Grid Bid
Loan Note conforming to the requirements hereof and executed
by a duly authorized officer of the Company. The Agent shall
promptly forward such Notes to the appropriate Banks.
(b) Legal Opinion. The Agent shall have received, with
-------------
a counterpart for each Bank, an opinion of Peter G. Skinner,
Esq., Senior Vice President and General Counsel of the
Company, dated the Closing Date and addressed to the Agent
and the Banks, substantially in the form of Exhibit J. Such
opinion shall also cover such other matters incident to the
transactions contemplated by this Agreement as the Agent or
any Bank shall reasonably require.
(c) Officers' Certificate. The Agent shall have
---------------------
received, with a counterpart for each Bank, a Borrowing
Certificate of the Company dated the Closing Date,
substantially in the form of Exhibit H, with appropriate
insertions and attachments, satisfactory in form and
substance to the Agent and its counsel, executed by the
President or Vice President and the Secretary or Assistant
Secretary of the Company.
(d) Assistant Secretary's Certificate. The Agent shall
---------------------------------
have received, with a counterpart for each Bank, a
certificate of the Assistant Secretary of the Company dated
the Closing Date, substantially in the form of Exhibit I,
with appropriate insertions and attachments, satisfactory in
form and substance to the Agent and its counsel.
(e) Compliance. Each of the Banks shall have
----------
determined that the making of such Loan and the use of the
proceeds thereof will not violate any Regulation of the Board
of Governors of the Federal Reserve System, and each Bank
shall have received such documents and information (including
without limitation, a duly completed and signed Form U-1) as
such Banks shall require to make such determination.
(f) Existing Credit Agreement. All commitments to
-------------------------
extend credit under the Existing Credit Agreement shall have
been terminated and all amounts outstanding thereunder shall
have been paid.
(g) Additional Matters. All other documents and legal
------------------
matters in connection with the transactions contemplated by
this Agreement shall be satisfactory in form and substance to
the Agent and the Banks and their counsel.
<PAGE>
33
4.2 Conditions to All Loans. The obligation of each
-----------------------
Bank to make any Loan (including the initial Loan to be made by it
hereunder) to be made by it hereunder is subject to the
satisfaction of the following conditions precedent on the relevant
Borrowing Date:
(a) Representations and Warranties. The representations
------------------------------
and warranties made by the Company herein or which are
contained in any certificate, document or financial or other
statement furnished at any time under or in connection
herewith (except the representation and warranty set forth in
subsection 3.2 and except, in the case of a Refunding
Borrowing, the representations and warranties set forth in
subsections 3.2, 3.5, 3.6, 3.7, 3.12 and 3.14) shall be
correct on and as of the Borrowing Date as if made on and as
of such date.
(b) No Default or Event of Default. In the case of a
------------------------------
Refunding Borrowing, no Event of Default shall have occurred
and be continuing on the date of such Loan after giving
effect to the Loans to be made on such date and in the case
of any other Loan no Default or Event of Default shall have
occurred and be continuing on such date or after giving
effect to the Loan to be made on such Borrowing Date.
(c) Additional Conditions to Bid Loans. If such Loan
----------------------------------
is made pursuant to subsection 2.2, all conditions set forth
in such subsection shall have been satisfied.
Each borrowing by the Company hereunder shall constitute
a representation and warranty by the Company as of the date of such
borrowing that the conditions in clauses (a), (b) and (c) of this
subsection have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Loan
Commitments remain in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Bank or the Agent
hereunder, the Company shall and in the case of the agreements set
forth in subsections 5.3, 5.4, 5.5 and 5.6 cause each of its
Subsidiaries to:
5.1 Financial Statements. Furnish to each Bank:
--------------------
(a) as soon as available, but in any event within 90
days after the end of each fiscal year of the Company, a copy
of the consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of such year and the
related consolidated statements of income and stockholders'
equity and cash flow for such year, setting forth in each
case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification
or exception, or qualification arising out of the scope of
<PAGE>
34
the audit, by independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later
than 60 days after the end of each of the first three quarterly
periods of each fiscal year of the Company, the unaudited
consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of each such quarter and the related
unaudited consolidated statements of income and cash flow of the
Company and its consolidated Subsidiaries for such quarterly
period setting forth in each case in comparative form the figures
for the comparable quarter of the previous year in the case of
the consolidated statements of income and the end of the
immediately preceding fiscal year in the case of the consolidated
balance sheet, certified by the chief financial officer of the
Company (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all
material respects and to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods
reflected therein (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
5.2 Certificates; Other Information. Furnish to each
-------------------------------
Bank:
(a) concurrently with the delivery of the financial
statements referred to in subsection 5.1(a) above, a
certificate of the independent certified public accountants
reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a) and (b) above, a
certificate of a Responsible Officer (i) stating that, to the
best of such officer's knowledge, the Company during such period
has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this
Agreement and in the Notes to be observed, performed or satisfied
by it, and that such officer has obtained no knowledge of any
Default or Event of Default except as specified in such
certificate, and (ii) showing in detail the calculations
supporting such statement in respect of subsections 6.3, 6.4 and
6.5;
(c) within five days after the same are sent, copies of
all financial statements and reports which the Company sends
to its stockholders, and within five days after the same are
filed, copies of all financial statements and reports which
the Company may make to, or file with, the Securities and
<PAGE>
35
Exchange Commission or any successor or analogous
Governmental Authority; and
(d) promptly, such additional financial and other
information as any Bank may from time to time reasonably
request.
5.3 Payment of Obligations. Pay, discharge or otherwise
----------------------
satisfy at or before maturity or before they become delinquent, as
the case may be, all its obligations of whatever nature, except
when the amount or validity thereof is currently being contested in
good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of
the Company or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence.
------------------------------------------------
Continue to engage in business of the same general type as now
conducted by it and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise
permitted pursuant to subsection 6.2; comply with all Contractual
Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, have a
material adverse effect on the business, operations, property or
financial or other condition of the Company and its Subsidiaries
taken as a whole.
5.5 Maintenance of Property; Insurance. Keep all
----------------------------------
property useful and necessary in its business in good working order
and condition; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such
amounts and against at least such risks as are usually insured
against in the same general area by companies engaged in the same
or a similar business; and furnish to each Bank, upon written
request, full information as to the insurance carried.
5.6 Inspection of Property; Books and Records;
------------------------------------------
Discussions. Keep proper books of records and account in which
- -----------
full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions
in relation to its business and activities; and permit
representatives of any Bank to visit and inspect any of its
properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be
desired, and to discuss the business, operations, properties and
financial and other conditions of the Company and its Subsidiaries
with officers and employees of the Company and its Subsidiaries and
with its independent certified public accountants.
<PAGE>
36
5.7 Notices. Promptly give notice to the Agent and each
-------
Bank:
(a) of the occurrence of any Default or Event of
Default;
(b) of any default or event of default under any
material Contractual Obligation of the Company or any of its
Subsidiaries;
(c) of any litigation, investigation or proceeding
which may exist at any time between the Company or any of its
Subsidiaries and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case
may be, would have a material adverse effect on the business,
operations, property or financial or other condition of the
Company and its Subsidiaries taken as a whole;
(d) of any litigation or proceeding affecting the
Company or any of its Subsidiaries in which (i) the amount
involved is $30,000,000 or more and not covered by insurance
or (ii) injunctive or similar relief is sought which if
adversely determined would have a material adverse effect on
the business, operations, property or financial or other
condition of the Company and its Subsidiaries taken as a
whole;
(e) of the following events, as soon as possible and in
any event within 30 days after the Company knows or has reason to
know thereof: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan, or (ii) the
institution of proceedings or the taking or expected taking of
any other action by PBGC or the Company or any Commonly
Controlled Entity to terminate or withdraw or partially withdraw
from any Plan and, with respect to a Multiemployer Plan, the
Reorganization (as defined in Section 4241 of ERISA) or
Insolvency (as defined in Section 4245 of ERISA) of such Plan and
in addition to such notice, deliver to the Agent and each Bank
whichever of the following may be applicable: (A) a certificate
of a Responsible Officer setting forth details as to such
Reportable Event and the action that the Company or Commonly
Controlled Entity proposes to take with respect thereto, together
with a copy of any notice of such Reportable Event that may be
required to be filed with PBGC, or (B) any notice delivered by
PBGC evidencing its intent to institute such proceedings or any
notice to PBGC that such Plan is to be terminated, as the case
may be; and
(f) of a material adverse change in the business,
operations, property or financial or other condition of the
Company and its Subsidiaries taken as a whole.
<PAGE>
37
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Company
proposes to take with respect thereto. For all purposes of clause
(e) of this subsection, the Company shall be deemed to have all
knowledge or knowledge of all facts attributable to the
administrator of such Plan.
SECTION 6. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Loan
Commitments remain in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Bank or the Agent
hereunder, the Company shall not, nor in the case of the agreements
set forth in subsections 6.1 or 6.2 shall it permit any of its
Subsidiaries to, directly or indirectly:
6.1 Limitation on Liens. Create, incur, assume or
-------------------
suffer to exist any Lien upon any of its properties or assets,
whether now owned or hereafter acquired, except:
(a) Liens existing on the date hereof which are
described in Schedule III hereto;
(b) Liens created in favor of the Agent, for the
ratable benefit of the Banks;
(c) Liens for taxes or assessments either (i) not yet
delinquent or (ii) the validity of which is being contested
in good faith and as to which any reserves required by GAAP
have been set aside;
(d) deposits or pledges to secure the payment of
workmen's compensation, unemployment insurance or other
social security benefits or obligations, or to secure the
performance of bids, trade contracts, leases, public or
statutory obligations, surety or appeal bonds or other
obligations of a like nature incurred in the ordinary course
of business;
(e) materialmen's, mechanics', workmen's, repairmen's,
employees', or other like Liens either (i) arising in the
ordinary course of business and securing obligations not more
than 90 days overdue or (ii) being contested in good faith
and as to which any reserves required by GAAP have been set
aside or as to which adequate bonds have been obtained;
(f) minor defects, easements, exceptions, reservations
and irregularities in the title to real property which do
not, in the aggregate, materially impair the use of such
property for the purposes for which it is or may reasonably
be expected to be held; and
<PAGE>
38
(g) Liens on assets, each of which Liens (i) existed on
such assets before the time of their acquisition by the Company
or such Subsidiary, or (ii) existed on such assets of any
Subsidiary before the time it became a Subsidiary, or (iii) was
created solely for the purpose of securing, and was created
substantially contemporaneously with the incurring of,
Indebtedness representing, or incurred to finance, the cost of
such assets; provided that, with respect to Liens
--------
referred to in clause (iii), (A) such Liens shall at all times be
confined to the assets so acquired and improvements, alterations,
replacements and modifications thereto and (B) the principal
amount of the Indebtedness secured by such Liens shall in no case
exceed 100% of the lesser of the cost or the fair market value of
the assets subject thereto at the time of acquisition thereof,
and provided, further that with
-------- -------
respect to each Lien referred to in this paragraph (g), any
extension, renewal or replacement thereof shall be permitted only
to the extent that the principal amount of Indebtedness secured
thereby shall not exceed the principal amount of Indebtedness so
secured at the time of such extension, renewal or replacement.
6.2 Limitation on Mergers and Sales of Assets. (a)
-----------------------------------------
Consolidate or merge with or into, or sell, convey, transfer or
lease in a single transaction or in a series of related
transactions any substantial part of its assets to, any other
Person, except (i) any such consolidation, merger, sale,
conveyance, transfer or lease when the only parties to such
transaction or series of transactions are one of its Subsidiaries
and one or more of its other Subsidiaries, (ii) any such sale,
conveyance, transfer or lease to the Company by one or more of its
Subsidiaries and (iii) the merger or consolidation of the Company
with another corporation, provided that the Company is the
--------
surviving corporation and that, after giving effect to such
consolidation or merger, no Default or Event of Default has
occurred and is continuing.
(b) Convey, transfer or lease, or sell and lease-back,
any significant fixed asset used or useable in its business or the
shares of the capital stock of any Subsidiary, except (i) to the
Company by any of its Subsidiaries or to any of the Company's
Subsidiaries by one or more of its other Subsidiaries, (ii) for a
sale or conveyance of such a fixed asset in connection with the
replacement thereof or in the ordinary course of business or (iii)
if such conveyance, transfer, lease or sale is for fair value as
determined by the Board of Directors or any executive officer of
the Company and not materially adverse to the Banks.
6.3 Maintenance of Consolidated Net Worth. Permit
-------------------------------------
Consolidated Net Worth to be less than $750,000,000 at any time.
<PAGE>
39
6.4 Maintenance of Ratio of Consolidated Total Liabilities
------------------------------------------------------
to Consolidated Net Worth. Permit the ratio of Consolidated Total
- -------------------------
Liabilities to Consolidated Net Worth at any time to exceed 1.75 to
1 at any time.
6.5 Maintenance of Ratio of Annualized Consolidated Cash
----------------------------------------------------
Flow. Permit the ratio of (a) Annualized Consolidated Cash Flow as
- ----
at the end of any fiscal quarter of the Company to (b) Annualized
Consolidated Interest Expense as at the end of such fiscal quarter,
to be less than 2.0 to 1.
SECTION 7. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) The Company shall fail to pay any principal of any
Notes when due in accordance with the terms thereof; or to
pay any interest on any Notes, or any other amount payable
hereunder, within five days after any such amount becomes due
in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made
by the Company herein or which is contained in any
certificate, document or financial or other statement
furnished at any time under or in connection with this
Agreement shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or
performance of any agreement contained in Section 6; or
(d) The Company shall default in any material respect
in the observance or performance of any other agreement
contained in this Agreement, and such default shall continue
unremedied for a period of 30 days; or
(e) The Company or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any
Indebtedness for more than $2,000,000 (other than the Notes)
or in the payment of any Contingent Obligation in excess of
$2,000,000 beyond the period of grace (not to exceed 30
days), if any, provided in the instrument or agreement under
which such Indebtedness or Contingent Obligation was created;
or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or
Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, if such default
or other event or condition causes, or permits the holder or
holders of such Indebtedness or beneficiary or beneficiaries
of such Contingent Obligation (or a trustee or agent on
behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if
<PAGE>
40
required, such Indebtedness to become due prior to its stated
maturity or such Contingent Obligation to become payable; or
(f) (i) The Company or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it
or its debts, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for it or for
all or any substantial part of its assets, or the Company or
any of its Subsidiaries shall make a general assignment for
the benefit of its creditors; or (ii) there shall be
commenced against the Company or any of its Subsidiaries any
case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order
for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against the
Company or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of
an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Company or
any of its Subsidiaries shall take any action in furtherance
of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Company or any of its
Subsidiaries shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (ii) any "accumulated
funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan,
(iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or
institution of proceedings or appointment of a trustee is, in
the reasonable opinion of the Required Banks, likely to
result in the termination of such Plan for purposes of Title
IV of ERISA, and, in the case of a Reportable Event, the
continuance of such Reportable Event unremedied for ten days
after notice of such Reportable Event pursuant to Section
4043(a), (c) or (d) of ERISA is given and, in the case of the
<PAGE>
41
institution of proceedings, the continuance of such
proceedings for ten days after commencement thereof, (iv) any
Single Employer Plan shall terminate for purposes of Title IV
of ERISA, or (v) any other event or condition shall occur or
exist, with respect to a Single Employer Plan; provided, that
--------
in the case of each of clauses (i) through (v) above, such
event or condition, together with all other such events or
conditions, if any, could subject the Company or any of its
Subsidiaries to any tax, penalty or other liabilities that in
the aggregate would be material in relation to the business,
operations, property or financial or other condition of the
Company and its Subsidiaries taken as a whole; or
(h) One or more judgments or decrees shall be entered
against the Company or any of its Subsidiaries involving in
the aggregate a liability (to the extent not paid or covered
by insurance) of $25,000,000 or more and all such judgments
or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 90 days from the entry thereof;
then, and in any such event, (A) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (f) above,
automatically the Loan Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes shall immediately
become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i)
with the consent of the Required Banks, the Agent may, or upon the
request of the Required Banks, the Agent shall, by notice to the
Company declare the Loan Commitments to be terminated forthwith,
whereupon the Loan Commitments shall immediately terminate; and
(ii) with the consent of the Required Banks, the Agent may, or upon
the request of the Required Banks, the Agent shall, by notice of
default to the Company, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement
and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable. Except as expressly
provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. The Banks from time to time party to
-----------
this Credit Agreement, whether as original signatories or as
Purchasing Banks pursuant to subsection 9.6, hereby irrevocably
designate and appoint Chemical Bank as the Agent of such Bank under
this Agreement, and each such Bank irrevocably authorizes Chemical
Bank, as the Agent for such Bank, to take such action on its behalf
under the provisions of this Agreement and to exercise such powers
and perform such duties as are expressly delegated to the Agent by
the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any
<PAGE>
42
provision to the contrary elsewhere in this Agreement, the Agent shall
not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist
against the Agent.
8.2 Delegation of Duties. The Agent may execute any of
--------------------
its duties under this Agreement by or through agents or attorneys-
in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care (other than
Agency Services). Without limiting the foregoing, the Agent may
appoint Agency Services as its agent to perform the functions of
the Agent hereunder relating to the advancing of funds to the
Company and distribution of funds to the Banks and to perform such
other related functions of the Agent hereunder as are reasonably
incidental to such functions.
8.3 Exculpatory Provisions. Neither the Agent nor any
----------------------
of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates (including, without limitation, Agency Services) shall
be (i) liable for any action lawfully taken or omitted to be taken
by it or such Person under or in connection with this Agreement
(except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Banks
for any recitals, statements, representations or warranties made by
the Company or any officer thereof contained in this Agreement or
in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection
with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the
Notes or for any failure of the Company to perform its obligations
hereunder. Neither the Agent nor Agency Services shall be under
any obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books
or records of the Company.
8.4 Reliance by Agent. The Agent and Agency Services
-----------------
shall be entitled to rely, and shall be fully protected in relying,
upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel
to the Company), independent accountants and other experts selected
by the Agent. The Agent may deem and treat the payee of any Note
as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed
with the Agent. The Agent shall be fully
<PAGE>
43
justified in failing or refusing to take any action under this
Agreement unless it shall first receive such advice or concurrence of
the Required Banks as it deems appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this
Agreement and the Notes in accordance with a request of the Required
Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks and all future
holders of the Notes.
8.5 Notice of Default. The Agent shall not be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Agent has received notice from a
Bank or the Company referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Banks. The
Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Banks;
provided that unless and until the Agent shall have received such
- --------
directions, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best
interests of the Banks.
8.6 Non-Reliance on Agent; Other Banks and Agency
---------------------------------------------
Services. Each Bank expressly acknowledges that neither the Agent
- --------
nor any of its officers, directors, employees, agents, attorneys-
in-fact or Affiliates has made any representations or warranties to
it and that no act by the Agent hereinafter taken, including any
review of the affairs of the Company, shall be deemed to constitute
any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent and Agency Services that it has,
independently and without reliance upon the Agent, any other Bank
or Agency Services, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial
and other condition and creditworthiness of the Company and made
its own decision to make its Loans hereunder and enter into this
Agreement. Each Bank also represents that it will, independently
and without reliance upon the Agent, any other Bank or Agency
Services, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action
under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of the Company.
Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Agent hereunder, the Agent shall not
have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, operations, property,
<PAGE>
44
financial and other condition or creditworthiness of the Company which
may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify the
---------------
Agent in its capacity as such (to the extent not reimbursed by the
Company and without limiting the obligation of the Company to do
so), ratably according to the respective amounts of their original
Loan Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may
at any time (including without limitation at any time following the
payment of the Notes) be imposed on, incurred by or asserted
against the Agent or Agency Services in any way relating to or
arising out of this Agreement, or any documents contemplated by or
referred to herein or the transactions contemplated hereby or any
action taken or omitted by the Agent or Agency Services under or in
connection with any of the foregoing; provided that no Bank shall
--------
be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Agent's
or Agency Services' gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the
Notes and all other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its
--------------------------------
Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Company as though the Agent
were not the Agent hereunder. With respect to its Loans made or
renewed by it and any Note issued to it, the Agent shall have the
same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Agent, and the terms
"Bank" and "Banks" shall include the Agent in its individual
capacity.
8.9 Successor Agent. The Agent may resign as Agent upon
---------------
10 days' notice to the Banks. If the Agent shall resign as Agent
under this Agreement, then the Required Banks shall appoint from
among the Banks a successor agent for the Banks which successor
agent shall be approved by the Company, whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent,
and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties
as Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to this
Agreement or any holders of the Notes. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 8.9
shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
<PAGE>
45
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. With the written consent of
----------------------
the Required Banks, the Agent and the Company may, from time to
time, enter into written amendments, supplements or modifications
hereto for the purpose of adding any provisions to this Agreement
or the Notes or changing in any manner the rights of the Banks or
of the Company hereunder or thereunder or waiving, on such terms
and conditions as the Agent may specify in such instrument, any of
the requirements of this Agreement or the Notes or any Default or
Event of Default and its consequences; provided, however, that (i)
-------- -------
such amendments, supplements or modifications may only be made
pursuant to this subsection 9.1 and (ii) no such waiver and no such
amendment, supplement or modification shall (a) extend the maturity
of any Note or any installment thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any fee
payable to the Banks hereunder, or reduce the principal amount
thereof, or increase the amount of any Bank's Loan Commitment or
amend, modify or waive any provision of this subsection or reduce
the percentage specified in the definition of Required Banks, or
consent to the assignment or transfer by the Company of any of its
rights and obligations under this Agreement, in each case without
the written consent of each Bank affected thereby or (b) amend,
modify or waive any provision of Section 8 without the written
consent of the then Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Banks
and shall be binding upon the Company, the Banks, the Agent and all
future holders of the Notes. In the case of any waiver, the
Company, the Banks and the Agent shall be restored to their former
position and rights hereunder and under the outstanding Notes, and
any Default or Event of Default waived shall be deemed to be cured
and not continuing; but no such waiver shall extend to any
subsequent or other default or Event of Default, or impair any
right consequent thereon.
9.2 Notices. All notices, requests and demands to or
-------
upon the respective parties hereto to be effective shall be in
writing, including by telecopy, and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made
when delivered by hand, or when deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received,
addressed as follows in the case of the Company and the Agent, and
as set forth in Schedule II in the case of the other parties
hereto, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Notes:
The Company: Dow Jones & Company, Inc.
200 Liberty Street
New York, New York 10281
Attention: Treasurer
Telecopy: 609-520-5477
<PAGE>
46
The Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Todd Plunkett
Telecopy: 212-270-6795
with copy to: Chemical Bank Securities, Inc.
270 Park Avenue
New York, New York 10017
Attention: Hector Guenther
Telecopy: 212-270-2056
with copy to: Chemical Bank Agency Services
Corporation
140 East 45th Street, 29th Floor
New York, New York 10017
Attention: Sandra Miklave
Telecopy: 212-622-0002
provided that any notice, request or demand to or upon the Agent or
- --------
the Banks pursuant to subsections 2.1(d), 2.2, 2.5 and 2.7 shall
not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to
------------------------------
exercise and no delay in exercising, on the part of the Agent or
any Bank, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided
by law.
9.4 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement
and the Notes.
9.5 Payment of Expenses and Taxes. The Company agrees
-----------------------------
(a) to pay or reimburse the Agent for all its out-of-pocket costs
and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the Notes and any other
documents prepared in connection herewith, and the consummation of
the transactions contemplated hereby and thereby, including,
without limitation, the fees and disbursements of counsel to the
Agent, (b) to pay or reimburse each Bank and the Agent for all
their costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the
Notes and any such other documents, including, without
<PAGE>
47
limitation, fees and disbursements of counsel to the Agent and to the
several Banks, (c) to pay, indemnify, and hold each Bank and the Agent
harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery
of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent
under or in respect of, this Agreement, the Notes and any such other
documents, and (d) to pay, indemnify, and hold each Bank and the Agent
harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever arising out of the
use by the Company of the proceeds of the Loans (including, without
limitation, any such use that would result in a violation of
Regulation U or X of the Board of Governors of the Federal Reserve
System). The agreements in this subsection shall survive repayment of
the Notes and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations; Purchasing
--------------------------------------------------
Banks. (a) This Agreement shall be binding upon and inure to the
- -----
benefit of the Company, the Banks, the Agent, all future holders of
the Notes, and their respective successors and assigns, except that
the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent
of each Bank.
(b) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such
------------
Bank, any Note held by such Bank, any Loan Commitment of such Bank
or any other interest of such Bank hereunder. In the event of any
such sale by a Bank of participating interests to a Participant,
such Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall remain
solely responsible for the performance thereof, such Bank shall
remain the holder of any such Note for all purposes under this
Agreement and the Company and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement. The Company agrees
that if amounts outstanding under this Agreement and the Notes are
due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect
of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under
this Agreement or any Note; provided, that such right of setoff
--------
shall be subject to the obligation of such Participant to share
with the Banks, and the Banks agree to share with such Participant,
as provided in subsection 9.7. The Company also agrees that each
Participant shall be entitled to the benefits of
<PAGE>
48
subsections 2.12, 2.13, 2.14, 2.15 and 9.5 with respect to its
participation in the Loan Commitments and the Loans outstanding from
time to time; provided, that no Participant shall be entitled to
--------
receive any greater amount pursuant to such subsections than the
transferor Bank would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Bank to
such Participant had no such transfer occurred.
(c) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time assign to one or more banks or other entities ("Bid
---
Loan Assignees") any Bid Loan owing to such Bank and any Individual
- --------------
Bid Note held by such Bank evidencing such Bid Loan, pursuant to a
Bid Loan Assignment executed by the assignor Bank and the Bid Loan
Assignee. Upon such execution, from and after the date of such Bid
Loan Assignment, the Bid Loan Assignee shall, to the extent of the
assignment provided for in such Bid Loan Assignment, be deemed to
have the same rights and benefits of payment and enforcement with
respect to such Bid Loan and Individual Bid Loan Note and the same
rights of setoff and obligation to share pursuant to subsection 9.7
as it would have had if it were a Bank hereunder; provided, that
--------
unless such Bid Loan Assignment shall otherwise specify and a copy
of such Bid Loan Assignment shall have been delivered to the Agent
for its acceptance and recording in the Register in accordance with
subsection 9.6(f), the assignor thereunder shall act as collection
agent for the Bid Loan Assignee thereunder, and the Agent shall pay
all amounts received from the Company which are allocable to the
assigned Bid Loan or Individual Bid Loan Note directly to such
assignor without any further liability to such Bid Loan Assignee.
A Bid Loan Assignee under a Bid Loan Assignment shall not, by
virtue of such Bid Loan Assignment, become a party to this
Agreement or have any rights to consent to or refrain from
consenting to any amendment, waiver or other modification of any
provision of this Agreement or any related document; provided, that
--------
(x) the assignor under such Bid Loan Assignment and such Bid Loan
Assignee may, in their discretion, agree between themselves upon
the manner in which such assignor will exercise its rights under
this Agreement and any related document, and (y) if a copy of such
Bid Loan Assignment shall have been delivered to the Agent for its
acceptance and recording in the Register in accordance with
subsection 9.6(f), neither the principal amount of, the interest
rate on, nor the maturity date of any Bid Loan or Individual Bid
Loan Note assigned to the Bid Loan Assignee thereunder will be
modified without the written consent of such Bid Loan Assignee. If
a Bid Loan Assignee has caused a Bid Loan Assignment to be recorded
in the Register in accordance with subsection 9.6(f), such Bid Loan
Assignee may thereafter, in the ordinary course of its business and
in accordance with applicable law, assign such Individual Bid Loan
Note to any Bank, to any affiliate or subsidiary of such Bid Loan
Assignee or to any other financial institution that has total
assets in excess of $1,000,000,000 and that in the ordinary course
of its business extends credit of the type evidenced by such
Individual Bid Loan
<PAGE>
49
Note, and the foregoing provisions of this paragraph (c) shall apply,
mutatis mutandis, to any such assignment by a Bid Loan Assignee.
- ------- --------
Except in accordance with the preceding sentence, Bid Loans and
Individual Bid Loan Notes may not be further assigned by a Bid Loan
Assignee, subject to any legal or regulatory requirement that the Bid
Loan Assignee's assets must remain under its control.
(d) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time sell to any Bank or any affiliate thereof all or any
part of such transferor Bank's rights and obligations under this
Agreement and the Notes, pursuant to a Commitment Transfer
Supplement, executed by such purchasing Bank and such transferor
Bank and delivered to the Agent for its acceptance and recording in
the Register. In addition, with the consent of the Company and the
Agent (which in each case shall not be unreasonably withheld), any
Bank may, in the ordinary course of its commercial banking business
and in accordance with applicable law, at any time sell to one or
more additional banks or financial institutions that are not then
Banks or affiliates thereof (together with purchasing Banks
pursuant to the preceding sentence, "Purchasing Banks"), all or any
----------------
part of its rights and obligations under this Agreement and the
Notes, pursuant to a Commitment Transfer Supplement, executed by
such Purchasing Bank, such transferor Bank, the Company and the
Agent, and delivered to the Agent for its acceptance and recording
in the Register, provided that such transferor Bank shall have
--------
obtained the consent of the Company and the Agent in order to
consummate any sale pursuant to this paragraph (d) after which the
transferor Bank's Loan Commitment would be below $10,000,000. Upon
such execution, delivery, acceptance and recording, from and after
the Transfer Effective Date determined pursuant to such Commitment
Transfer Supplement, (x) the Purchasing Bank thereunder shall be a
party hereto and, to the extent provided in such Commitment
Transfer Supplement, have the rights and obligations of a Bank
hereunder with a Loan Commitment as set forth therein, and (y) the
transferor Bank thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations
under this Agreement. Such Commitment Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Bank
and the resulting adjustment of Commitment Percentages arising from
the purchase by such Purchasing Bank of all or a portion of the
rights and obligations of such transferor Bank under this Agreement
and the Notes. On or prior to the Transfer Effective Date
determined pursuant to such Commitment Transfer Supplement, the
Company, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Revolving Credit Note a new
Revolving Credit Note to the order of such Purchasing Bank in an
amount equal to the Loan Commitment assumed by it pursuant to such
Commitment Transfer Supplement and, if the transferor Bank has
retained a Loan Commitment hereunder, new Notes to the order of the
transferor Bank in an amount equal to the Loan Commitment retained
by it hereunder. Such new Notes shall be dated the
<PAGE>
50
Closing Date and shall otherwise be in the form of the Notes replaced
thereby. The Notes surrendered by the transferor Bank shall be
returned by the Agent to the Company marked "cancelled."
(e) The Agent shall maintain at its address referred to
in subsection 9.2 a copy of each Bid Loan Assignment and each
Commitment Transfer Supplement delivered to it and a register (the
"Register") for the recordation of (i) the names and addresses of
--------
the Banks and the Loan Commitment of, and principal amount of the
Loans owing to, each Bank from time to time, and (ii) with respect
to each Bid Loan Assignment delivered to the Agent, the name and
address of the Bid Loan Assignee and the principal amount of each
Bid Loan owing to such Bid Loan Assignee. The entries in the
Register shall be conclusive, in the absence of manifest error, and
the Company, the Agent and the Banks may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of a Bid Loan Assignment executed
by an assignor Bank and a Bid Loan Assignee, together with payment
from the assignor or assignee Bank to the Agent of a registration
and processing fee of $1,000.00, the Agent shall promptly accept
such Bid Loan Assignment, record the information contained therein
in the Register and give notice of such acceptance and recordation
to the assignor Bank, the Bid Loan Assignee and the Company. Upon
its receipt of a Commitment Transfer Supplement executed by a
transferor Bank and a Purchasing Bank (and, in the case of a
Purchasing Bank that is not then a Bank or an affiliate thereof, by
the Company and the Agent) together with payment from the assignor
or assignee Bank to the Agent of a registration and processing fee
of $2,000.00, the Agent shall (i) promptly accept such Commitment
Transfer Supplement (ii) on the Transfer Effective Date determined
pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the
Banks and the Company.
(g) The Company authorizes each Bank to disclose to any
Participant, Bid Loan Assignee or Purchasing Bank (each, a
"Transferee") and any prospective Transferee any and all financial
----------
information in such Bank's possession concerning the Company and
its affiliates which has been delivered to such Bank by or on
behalf of the Company pursuant to this Agreement or which has been
delivered to such Bank by or on behalf of the Company in connection
with such Bank's credit evaluation of the Company and its
affiliates prior to becoming a party to this Agreement.
(h) If, pursuant to this subsection, any interest in
this Agreement or any Note is transferred to any Transferee which
is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Bank shall cause
such Transferee, concurrently with the effectiveness of such
<PAGE>
51
transfer, (i) to represent to the transferor Bank (for the benefit
of the transferor Bank, the Agent and the Company) that under
applicable law and treaties no taxes will be required to be
withheld by the Agent, the Company or the transferor Bank with
respect to any payments to be made to such Transferee in respect of
the Loans, (ii) to furnish to the transferor Bank, and in the case
of a Transferee that is a Bid Loan Assignee or a Purchasing Bank,
furnish to the Agent and the Company either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 1001 or
successor applicable form, as the case may be, certifying in each
case that the Transferee is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes, (iii) an Internal Revenue Service Form W-8 or
W-9 or successor applicable form, as the case may be, to establish
an exemption from United States backup withholding taxes, and (iv)
to agree (for the benefit of the transferor Bank, the Agent and the
Company) to provide the transferor Bank, the Agent and the Company
a new Form 4224 or Form 1001 and Form W-8 or W-9, or successor
applicable forms, or other manner of certification, as the case may
be, on or before the date that any such letter or form expires or
becomes obsolete or after the occurrence of any event requiring a
change in the most recent letter and form previously delivered by
it to the Company, and such extensions or renewals thereof as may
reasonably be requested by the Company, certifying in the case of a
Form 1001 or 4224 that such Transferee is entitled to receive
payments under this Agreement without deduction or withholding of
any United States federal income taxes, unless in any such cases an
event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent the Transferee from duly
completing and delivering any such letter or form with respect to
it and such Transferee advises the transferor Bank, the Agent and
the Company that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax,
and in the case of a Form W-8 or W-9, establishing an exemption
from United States backup withholding tax.
(i) Nothing herein shall prohibit any Bank from pledging
or assigning any Note to any Federal Reserve Bank in accordance
with applicable law.
9.7 Adjustments; Set-off. (a) If any Bank or Transferee
--------------------
(a "benefitted Bank") shall at any time receive any payment of all
---------------
or part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in clause (f) of Section 7, or otherwise) in a
greater proportion than any such payment to and collateral received
by any other Bank, if any, in respect of such other Bank's Loans,
or interest thereon, such benefitted Bank shall purchase for cash
from the other Banks such portion of each such other Bank's Loan,
or shall provide such other Banks with the
<PAGE>
52
benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Bank to share the excess payment or
benefits of such collateral or proceeds ratably with each of the
Banks; provided, however, that if all or any portion of such excess
-------- -------
payment or benefits is thereafter recovered from such benefitted Bank,
such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The
Company agrees that each Bank so purchasing a portion of another
Bank's Loan may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully
as if such Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks
provided by law, each Bank shall have the right, without prior
notice to the Company, any such notice being expressly waived by
the Company to the extent permitted by applicable law, upon the
occurrence and continuance of an Event of Default to set-off and
apply against any indebtedness, whether matured or unmatured, of
the Company to such Bank, any amount owing from such Bank to the
Company, at or at any time after the happening of any of the above
mentioned events, and the aforesaid right of set-off may be
exercised by such Bank against the Company or against any trustee
in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor
of the Company, or against anyone else claiming through or against
the Company or such trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such
right of set-off shall not have been exercised by such Bank prior
to the making, filing or issuance, or service upon such Bank of, or
of notice of, any such petition; assignment for the benefit of
creditors; appointment or application for the appointment of a
receiver; or issuance of execution, subpoena, order or warrant.
Each Bank agrees promptly to notify the Company and the Agent after
any such set-off and application made by such Bank, provided that
--------
the failure to give such notice shall not affect the validity of
such set-off and application.
9.8 Counterparts. This Agreement may be executed by one
------------
or more of the parties to this Agreement on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged
with the Company and the Agent.
9.9 Governing Law. This Agreement and the Notes and the
-------------
rights and obligations of the parties under this Agreement and the
Notes shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
9.10 Submission To Jurisdiction; Waivers. (A) The
-----------------------------------
Company hereby irrevocably and unconditionally:
<PAGE>
53
(i) submits for itself and its property in any lega
(i) submits for itself and its property in any legalaction or
proceeding relating to this Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the non-
exclusive general jurisdiction of the Courts of the State of New
York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to the Company at its address
set forth in subsection 9.2 or at such other address of which
the Agent shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other
jurisdiction.
(B) The Company and the Agent and each Bank hereby
irrevocably and unconditionally waive trial by jury in any legal
action or proceeding relating to this Agreement and for any
counterclaim therein.
9.11 Existing Credit Agreement. The Company and the
-------------------------
Banks hereby agree that on the date upon which this Agreement shall
have been executed by all parties hereto, the Existing Credit
Agreement shall terminate and be of no further force or effect.
<PAGE>
54
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
DOW JONES & COMPANY, INC.
By: /s/ Leonard E. Doherty
-------------------------
Title: Treasurer
CHEMICAL BANK, as Agent and as
a Bank
By: /s/ John J. Huber
------------------------
Title: Managing Director
BANK OF HAWAII
By: /s/ J. Bryan Scearce
------------------------
Title: Asst. Vice President
BAYERISCHE LANDESBANK
GIROZENTRALE CAYMAN ISLANDS
BRANCH
By: /s/ W. Freudenberger
------------------------
Title: Executive Vice President
and General Manager
By: /s/ P. Obermann
------------------------
Title: First Vice President
Manager Lending Division
THE DAI-ICHI KANGYO BANK, LTD.
(NEW YORK BRANCH)
By: /s/ Seiji Imai
------------------------
Title: A.V.P.
DEUTSCHE BANK AG, New York
Branch and/or Cayman Islands
Branch
By: /s/ Saeed Ahmad
------------------------
Title: A.V.P.
By: /s/ Alain M. Bolea
------------------------
Title: Director
<PAGE>
55
FIRST FIDELITY BANK, N.A.
By: /s/ Robert K. Strunk
------------------------
Title: Vice President
FIRST INTERSTATE BANK OF
CALIFORNIA
By: /s/ Wiliam Baird
------------------------
Title: V.P.
By: /s/ Wendy Purcell
------------------------
Title: A.V.P.
THE FUJI BANK LIMITED, NEW
YORK BRANCH
By: /s/ Gina Kearns
------------------------
Title: Vice President & Manager
LLOYDS BANK PLC
By: /s/ T. R. Walser
------------------------
Title: S.V.P.
By: /s/ Paul Briamonte
------------------------
Title: Vice President
THE LONG TERM CREDIT BANK OF
JAPAN
By: /s/ Hiroshi Sasaki
------------------------
Title: General Manager
THE NORTHERN TRUST COMPANY
By: /s/ Michael Bryan
------------------------
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Patrick H. Kinszler
------------------------
Title: Vice President
THE SAKURA BANK, LIMITED
By: /s/ H. Shimazaki
------------------------
Title: Senior Vice President and
Manager
<PAGE>
56
THE SANWA BANK LIMITED NEW
YORK BRANCH
By: /s/ Joseph E. Leo
------------------------
Title: Vice President and Area
Manager
SHAWMUT BANK CONNECTICUT, N.A.
By: /s/ Jane C. Lee
------------------------
Title: Vice President
SOCIETE GENERALE
By: /s/ Pascale Hainline
------------------------
Title: Vice President
THE SUMITOMO BANK LIMITED NEW
YORK BRANCH
By: /s/ Y. Kawamura
------------------------
Title: Joint General Manager
TORONTO-DOMINION (NEW
YORK), INCORPORATED
By: /s/ Warren Finlay
------------------------
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ Forrest Childers
------------------------
Title: S.V.P.
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, New York Branch
and/or Cayman Islands Branch
By: /s/ Lucie Guernsey
------------------------
Title: Vice President
By: /s/ Khiel McIntyre
------------------------
Title: Vice President
<PAGE>
SCHEDULE I to
Revolving Credit Agreement
--------------------------
Bank Loan Commitment
Chemical Bank $29,000,000
Bank of Hawaii $22,000,000
Bayerische Landesbank
Girozentrale Cayman Islands
Branch $20,000,000
The Dai-Ichi Kangyo Bank,
Ltd. (New York Branch) $22,000,000
Deutsche Bank AG, New York
Branch and/or Cayman
Islands Branch $15,000,000
First Fidelity Bank, N.A. $15,000,000
First Interstate Bank of California $25,000,000
The Fuji Bank Limited, New
York Branch $22,000,000
Lloyds Bank Plc. $22,000,000
The Long Term Credit Bank
of Japan $10,000,000
The Northern Trust Company $15,000,000
PNC Bank, National Association $22,000,000
The Sakura Bank, Limited $22,000,000
The Sanwa Bank Limited New
York Branch $25,000,000
Shawmut Connecticut Bank,
N.A. $22,000,000
Societe Generale $15,000,000
The Sumitomo Bank Limited
New York Branch $25,000,000
Toronto-Dominion (New
York), Incorporated $22,000,000
Wachovia Bank of Georgia,
N.A. $15,000,000
Westdeutsche Landesbank
Girozentrale New York
Branch and/or Cayman
Islands Branch $15,000,000
Total $400,000,000
<PAGE>
SCHEDULE II to
Revolving Credit Agreement
--------------------------
Names and Addresses of Banks
Bank of Hawaii
130 Merchant Street, 20th Fl.
Honolulu, Hawaii 96813
Attention: J. Bryan Scearce
Telecopy: 808-537-8301
Bayerische Landesbank Girozentrale
Cayman Islands Branch
560 Lexington Avenue
New York, New York 10022
Attention: Joanne Cicino
Telecopy: 212-310-9868
The Dai-Ichi Kangyo Bank Limited
1 World Trade Center
48th Floor
New York, New York 10048
Attention: Seiji Imai
Telecopy: 212-524-0579
Deutsche Bank AG
31 West 52nd Street
New York, New York 10019
Attention: Saeed Ahmad
Telecopy: 212-474-8212
First Fidelity Bank, N.A.
550 Broad Street-5th Floor
Newark, New Jersey 07102
Attention: Sue Scott
Telecopy: 201-565-6681
First Interstate Bank of California
885 Third Avenue, 5th Floor
New York, New York 10022
Attention: Roy Roberts
Telecopy: 212-593-5238
The Fuji Bank Limited, New York Branch
Two World Trade Center
New York, New York 10048
Attention: Chigusa Tada
Telecopy: 212-912-0516
<PAGE>
2
Lloyds Bank Plc
One Seaport Plaza
199 Water Street
New York, New York 10038
Attention: Ted Walser
Telecopy: 212-607-4999
The Long Term Credit Bank of Japan
165 Broadway
New York, New York 10006
Attention: Tetsuya Sukunaga
Telecopy: 212-608-2371
The Northern Trust Company
50 South LaSalle Street
Chicago, Illinois 60675
Attention: Mike Bryan
Telecopy: 312-444-3508
PNC Bank, National Association
One PNC Plaza, 4th Floor
Pittsburgh, Pennsylvania 15222
Attention: Dana Sallone
Telecopy: 412-762-6484
The Sakura Bank, Limited
277 Park Avenue, 45th Floor
New York, New York 10172
Attention: John Phelan
Telecopy: 212-888-7651
Sanwa Bank Ltd.
55 East 52nd Street
New York, New York 10055
Attention: Joseph Leo
Telecopy: 212-754-1304
Shawmut Bank
One Landmark Square
Stamford, Connecticut 06904
Attention: Jane Lee
Telecopy: 203-358-2076
<PAGE>
SCHEDULE IV
-----------
SUBSIDIARIES OF THE COMPANY
Name of Subsidiary
- ------------------
American Demographics, Inc.
Courrier Export (U.K.), Limited
Dow Jones Canada, Inc.
Dow Jones Courrier, N.V.
Dow Jones Courrier, GmbH
Dow Jones Courrier, GmbH
Dow Jones Courrier, bv
Dow Jones Courrier, sarl
Dow Jones International Marketing Services (U.K.), Ltd.
Dow Jones International Marketing Services GmbH
Dow Jones Newsprint Company, Inc.
Dow Jones Printing Company (Asia), Inc.
Dow Jones Publishing Company (Asia), Inc. (90% owned)
Dow Jones Publishing Company (Europe), Inc.
Dow Jones Real Estate Development Corporation
Dow Jones Southern Holding Company, Inc.
Dow Jones Virginia Company, Inc.
Federal Filings, Incorporated
Nanbei Ltd (61% owned)
National Delivery Service, Inc.
Ottaway Newspapers, Inc.
Chapel Hill Publishing Company, Inc.
News-Sun, Inc.
ONI of North Carolina
Sample Publishing Company, Inc.
The Inquirer & Mirror, Inc.
Review Publishing Company Limited
The China Phone Book Co. Ltd.
National Fair Ltd.
Societe Civile D.J.
Telerate, Inc.
Telerate Canada, Inc.
FXD/Telerate Incorporated
Telerate Research & Development Pte Ltd.
Telerate Systems Incorporated
Compu Trac, Inc.
Compu Trac Software, Inc.
Telerate Puerto Rico, Inc.
Telerate Financial Services Co.
Telerate International Inc.
Telerate International Limited
<PAGE>
2
Name of Subsidiary
- ------------------
Telerate International Company (100% owned Partnership)
Interfinet (Panama) Inc.
Servicios Informativos Telerate Limitada
Telerate (Asia Pacific) Singapore Pte Ltd
Telerate (Australia) Pty Limited
Telerate (Bahamas) Limited
Telerate (Belgium) SA
Telerate (Denmark) ApS
Telerate (Europe/Gulf) Limited
Telerate (Finland) OY
Telerate (France) SA
Telerate (Ireland) Limited
Telerate (Netherlands) BV
Telerate (Spain) SA
Telerate (Sweden) AB
Telerate (Thailand) Limited
Telerate (Technical Services) Limited
Telefin SA
Telerate AG
Telerate Argentina Limitada S.A.
Telerate Financial Information Services Pte Ltd
Telerate de Venezuela, C.A.
Telerate Financial Information Network (Hong Kong) Limited
Telerate Financial Information Network (Asia-Pacific) Limited
Telerate Financial Information Services, Inc.
Telerate Finansal Sistemler A.S.
Telerate - Instalcao e Manutencao de Equipamentos, Lda.
Telerate Internationale Finanzinformationsdienst GmbH
Telerate Luxembourg SARL
Telerate New Zealand Limited
Telerate Pacific Limited
Telerate Uruguay S.A.
Telerate Deutschland GmbH (90% owned)
Telerate Norway A/S
All of the above subsidiaries are included in the consolidated financial
statements.
<PAGE>
EXHIBIT A
---------
FORM OF REVOLVING CREDIT NOTE
PROMISSORY NOTE
$_________________ New York, New York
, 1994
FOR VALUE RECEIVED, the undersigned, DOW JONES & COMPANY, INC., hereby
unconditionally promises to pay to the order of (the "Bank")
at the office of Chemical Bank located at 270 Park Avenue, New York, New York
10017, in lawful money of the United States of America and in immediately
available funds, the principal amount of (a) or, if less, (b) the aggregate
unpaid principal amount of all Revolving Credit Loans made by the Bank to the
undersigned pursuant to subsection 2.1 of the Credit Agreement hereinafter
referred to (as the same may be amended, supplemented or otherwise modified, the
"Credit Agreement") in the amounts and on the maturity dates referred to in
the Credit Agreement. The undersigned further agrees to pay interest in like
money at such office on the unpaid principal amount hereof and, to the extent
permitted by law, accrued interest in respect hereof from time to time from
the date hereof until payment in full of the principal amount hereof and accrued
interest hereon at the rates and on the basis and on the dates referred to in
the Credit Agreement.
The holder of this Note is authorized to endorse the date and amount and
maturity date of each loan pursuant to subsection 2.1 of the Credit Agreement
and each payment of principal with respect thereto and its character as a C/D
Rate Loan, a Eurodollar Loan or an Alternate Base Rate Loan on the schedule
annexed hereto and made a part hereof, or on a continuation thereof which shall
be attached hereto and made a part hereof, which endorsement shall constitute
prima facie evidence of the accuracy of the information endorsed; provided,
however, that the failure to make any such endorsement shall not affect the
obligations of the Company in respect of such Loan or under this Note.
This Note is one of the Revolving Credit Notes referred to in the Revolving
Credit Agreement, dated as of November ____, 1994, among the undersigned, the
Bank, the other banks parties thereto and Chemical Bank, as Agent, and is
entitled to the benefits thereof and is subject to prepayment in whole or in
part as provided therein.
Upon the occurrence of any one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.
<PAGE>
2
All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, endorser or otherwise, hereby waive presentment, demand,
protest and all other notices of any kind.
Terms defined in the Credit Agreement are used herein with their defined
meanings unless otherwise defined herein. This Note shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
DOW JONES & COMPANY, INC.
By:____________________________
Title:
<PAGE>
SCHEDULE TO
REVOLVING
CREDIT NOTE
LOANS AND PAYMENTS OF PRINCIPAL
Type of Loan
Amount ------------------ Amount of Unpaid
of Euro- Maturity Principal Principal Notation
Date Loan C/D Dollar ABR Date Paid Balance Made By
- ---- ------ --- ------ --- -------- --------- --------- --------
<PAGE>
EXHIBIT B
---------
FORM OF GRID BID LOAN NOTE
--------------------------
PROMISSORY NOTE
---------------
$400,000,000 New York, New York
__________, 1994
FOR VALUE RECEIVED, the undersigned, DOW JONES & COMPANY, INC., a Delaware
corporation (the "Company"), hereby unconditionally promises to pay to the order
-------
of __________________________________________________ (the "Bank") at the
----
office of Chemical Bank located at 270 Park Avenue, New York, New York 10017, in
lawful money of the United States of America and in immediately available funds,
the principal amount of (a) FOUR HUNDRED MILLION DOLLARS ($400,000,000), or, if
less, (b) the aggregate unpaid principal amount of each Bid Loan which is (i)
made by the Bank to the Company pursuant to subsection 2.2 of the Credit
Agreement hereinafter referred to (as the same may be amended, supplemented or
otherwise modified, the "Credit Agreement") and (ii) not evidenced by an
----------------
Individual Bid Loan Note executed and delivered by the Company pursuant to
subsection 2.2(g) of the Credit Agreement. The principal amount of each Bid Loan
evidenced hereby shall be payable on the maturity date therefor set forth on the
schedule annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof (the "Grid"). The Company
----
further agrees to pay interest in like money at such office on the unpaid
principal amount of each Bid Loan evidenced hereby, at the rate per annum set
forth in respect of such Bid Loan on the Grid, calculated on the basis of a year
of 360 days and actual days elapsed from the date of such Bid Loan until the due
date thereof (whether at the stated maturity, by acceleration or otherwise) and
thereafter at the rates determined in accordance with subsection 2.2(e) of the
Credit Agreement. Interest on each Bid Loan evidenced hereby shall be payable on
the date or dates set forth in respect of such Bid Loan on the Grid. Bid Loans
evidenced by this Note may not be prepaid.
The holder of this Note is authorized to endorse on the Grid the date, amount,
interest rate, interest payment dates and maturity date in respect of each Bid
Loan made pursuant to subsection 2.2 of the Credit Agreement, each payment of
principal with respect thereto and any transfer of such Bid Loan from this Note
to an Individual Bid Loan Note delivered to the Bank pursuant to subsection
2.2(g) of the Credit Agreement, which endorsement shall constitute prima facie
-----------
evidence of the accuracy of the information endorsed; provided, however, that
-------- -------
the failure to make any such endorsement shall not affect the obligations of the
Company in respect of such Bid Loan or under this Note.
<PAGE>
2
This Note is one of the Grid Bid Loan Notes referred to in, is subject to and
entitled to the benefits of, the Revolving Credit Agreement, dated as of
November __, 1994, among the Company, the Bank, the other banks parties thereto
and Chemical Bank, as Agent.
Upon the occurrence of any one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
therein.
All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.
Terms defined in the Credit Agreement are used herein with their defined
meanings unless otherwise defined herein. This Note shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
DOW JONES & COMPANY, INC.
By __________________________
Title:
<PAGE>
SCHEDULE OF BID LOANS
---------------------
<TABLE>
<CAPTION>
Date of
Transfer
Date Amount Interest to Indi-
of of Interest Payment Maturity Payment vidual Author-
Loan Loan Rate Dates Date Date Note ization
- -------- -------- ---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
________ ________ __________ _________ _________ _________ _________ _________
</TABLE>
<PAGE>
EXHIBIT C
---------
[FORM OF INDIVIDUAL BID LOAN NOTE]
NON-NEGOTIABLE BID NOTE
$_______________ New York, New York
____________, 19__
FOR VALUE RECEIVED, the undersigned, DOW JONES & COMPANY, INC., a Delaware
corporation (the "Company"), hereby promises to pay on ___________, 19__ to
-------
the order of ____________ (the "Bank") at the office of Chemical Bank located
----
at 270 Park Avenue, New York, New York 10017, in lawful money of the United
States of America and in immediately available funds, the principal sum of
__________________ Dollars ($_______________). The Company further agrees to
pay interest in like money at such office on the unpaid principal amount hereof
from time to time from the date hereof at the rate of ____% per annum
(calculated on the basis of a year of 360 days and actual days elapsed) until
the due date hereof (whether at the stated maturity, by acceleration, or
otherwise) and thereafter at the rates determined in accordance with subsection
2.2(e) of the Revolving Credit Agreement, dated as of November __, l994, among
the Company, the Bank, the other banks parties thereto and Chemical Bank, as
Agent (as the same may be amended, supplemented or otherwise modified, the
"Credit Agreement"). Interest shall be payable on _________________. This Note
----------------
may not be prepaid.
This Note is one of the Individual Bid Loan Notes referred to in, is subject
to and is entitled to the benefits of, the Credit Agreement, which Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.
All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, guarantor, endorser or otherwise, hereby waive presentment,
demand, protest and all other notices of any kind.
Terms defined in the Credit Agreement are used herein with their defined
meanings unless otherwise defined herein. This Note shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
DOW JONES & COMPANY, INC.
By: __________________________
Title:
<PAGE>
EXHIBIT D
---------
FORM OF BORROWING NOTICE FOR REVOLVING CREDIT LOANS
Date
Chemical Bank, as Agent under the
Credit Agreement referred
to below
Gentlemen:
Pursuant to subsection 2.1 of the Revolving Credit Agreement, dated as of
November __, 1994, among Dow Jones & Company, Inc. (the "Company"), the Banks
parties thereto and Chemical Bank, as Agent (as the same may be amended,
supplemented or otherwise modified, the "Credit Agreement"), the Company hereby
----------------
requests that the following Revolving Credit Loans be made on [date] as follows:
(1). Total Amount of Revolving Credit
Loans................................... $
(2). Amount of (1) to be allocated to
Eurodollar Loans........................ $
(3). Amount of (1) to be allocated to
C/D Rate Loans.......................... $
(4). Amount of (1) to be allocated to
Alternate Base Rate Loans............... $
(5A). Interest Periods and amounts
to be allocated thereto in
respect of Eurodollar Notes
(amounts must total (2)):
(i) one month...................... $
(ii) two months..................... $
(iii) three months................... $
(iv) six months..................... $
Total Eurodollar Loans......... $
(5B). Interest Periods and
amounts to be allocated
thereto in respect of C/D
Rate Loans (amounts must
total (3)):
(i) 30 days........................ $
<PAGE>
2
(ii) 60 days........................ $
(iii) 90 days........................ $
(iv) 180 days....................... $
Total C/D Rate Loans........... $
NOTE: EACH AMOUNT APPEARING IN EACH LINE ABOVE MUST BE AT LEAST EQUAL TO
$10,000,000 AND IN A WHOLE MULTIPLE OF $1,000,000
The Company hereby certifies that the conditions set forth in Section 4.2 of
the Credit Agreement have been satisfied.
Terms defined in the Credit Agreement shall have the same meanings when used
herein.
Very truly yours,
DOW JONES & COMPANY. INC.
By: __________________________
Title:
<PAGE>
EXHIBIT E
---------
FORM OF BID LOAN REQUEST
, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Revolving Credit Agreement, dated as of November __,
1994, among Dow Jones & Company, Inc. (the "Company"), the Banks parties thereto
and Chemical Bank, as Agent (as the same may be amended, supplemented or
otherwise modified, the "Credit Agreement"). Terms defined in the Credit
----------------
Agreement are used herein as therein defined.
This is an [Index Rate] [Absolute Rate] Bid Loan Request pursuant to
subsection 2.2 of the Credit Agreement requesting quotes for the following Bid
Loans:
Aggregate Principal Amount $__________ $__________ $__________
Bid Loan Date __________ __________ __________
- ----------
Note: Pursuant to the Credit Agreement, a Bid Loan Request may be transmitted in
writing, by telex or by facsimile transmission, or by telephone, immediately
confirmed by telex or facsimile transmission. In any case, a Bid Loan Request
shall contain the information specified in the second paragraph of this form.
<PAGE>
2
[Interest Period]*
Maturity Date**
Interest Payment Dates
Very truly yours,
DOW JONES & COMPANY, INC.
By: __________________________
Title:
- ----------
* Insert only in an Index Rate Bid Request.
** In an Index Rate Bid Request, insert last day of Interest Period
<PAGE>
EXHIBIT F
---------
[FORM OF BID LOAN OFFER]
, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Revolving Credit Agreement, dated as of November __,
1994, among Dow Jones & Company, Inc. (the "Company"), the Banks parties thereto
and Chemical Bank, as Agent (as the same may be amended, supplemented or
otherwise modified, the "Credit Agreement"). Terms defined in the Credit
----------------
Agreement are used herein as therein defined.
In accordance with subsection 2.2 of the Credit Agreement, the undersigned
Bank offers to make Bid Loans thereunder in the following amounts with the
following maturity dates:
Bid Loan Date: , 19
Aggregate Maximum Amount: $
Maturity Date 1: Maturity Date 2: Maturity Date 3:
Maximum Amount $ Maximum Amount $ Maximum Amount $
Rate * Amount $ Rate * Amount $ Rate * Amount $
Rate * Amount $ Rate * Amount $ Rate * Amount $
Very truly yours,
[NAME OF BIDDING BANK]
By: __________________________
Name:
Title:
Telephone No.:
Fax No.:
- ----------
* In the case of Index Rate Bid Loans, insert margin bid. In the case of
Absolute Rate Bid Loans, insert fixed rate bid.
<PAGE>
EXHIBIT G
---------
[FORM OF BID LOAN CONFIRMATION]
, 19__
Chemical Bank, as Agent
270 Park Avenue
New York, New York 10017
Dear Sirs:
Reference is made to the Revolving Credit Agreement, dated as of November __,
1994, among Dow Jones & Company, Inc. (the "Company"), the Banks parties thereto
and Chemical Bank, as Agent (as the same may be amended, supplemented or
otherwise modified, the "Credit Agreement"). Terms defined in the Credit
----------------
Agreement are used herein as therein defined.
In accordance with subsection 2.2 of the Credit Agreement, the undersigned
accepts and confirms the offers by Bid Loan Bank(s) to make Bid Loans to the
undersigned on 19__ [Bid Loan Date] under said subsection 2.2 in the
(respective) amount(s) set forth on the attached list of Bid Loans offered.
Very truly yours,
DOW JONES & COMPANY, INC.
By ________________________
Title:
[Company to attach Bid Loan offer list prepared by Agent with accepted amount
entered by the Company to right of each Bid Loan offer].
<PAGE>
EXHIBIT H
---------
[FORM OF OFFICER'S CERTIFICATE]
OFFICER'S CERTIFICATE
Pursuant to Section 4 of the Revolving Credit Agreement, dated as of November
__, 1994, among Dow Jones & Company, Inc. (the "Company"), the Banks parties
thereto and Chemical Bank, as Agent (as the same may be amended, supplemented or
otherwise modified, the "Credit Agreement"), the undersigned ________________
----------------
of the Company hereby certifies as follows:
1. The representations and warranties of the Company set forth in the Credit
Agreement or which are contained in any certificate, document or financial or
other statement furnished pursuant to or in connection with the Credit Agreement
are true and correct on and as of the date hereof with the same effect as if
made on the date hereof; and
2. On the date hereof, no Default or Event of Default (both as defined in the
Credit Agreement) has occurred and is continuing under the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has hereunto set his name.
Title: ____________________ of the
Company
Date: , 19
<PAGE>
EXHIBIT I
---------
[FORM OF CERTIFICATE OF ASSISTANT
SECRETARY OF THE COMPANY]
SECRETARY'S CERTIFICATE
Pursuant to Section 4 of the Revolving Credit Agreement, dated as of November
__, 1994, among Dow Jones & Company, Inc. (the "Company"), the Banks parties
thereto and Chemical Bank, as Agent (as the same may be amended, supplemented or
otherwise modified, the "Credit Agreement"), the undersigned Assistant Secretary
----------------
of the Company hereby certifies as follows:
1. Attached hereto as Annex I is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Company on
19__, and such resolutions have not in any way been
rescinded or modified and have been in full force and effect since their
adoption to and including the date hereof and are now in full force and
effect; and such resolutions are the only corporate proceedings of the
Company now in force relating to or affecting the matters referred to
therein.
2. Attached hereto as Annex II is a true and complete copy of the By-
laws of the Company as in effect at all times since ,
to and including the date hereof.
3. Attached hereto as Annex III is a true and complete copy of the
Certificate of Incorporation of the Company as in effect at all times since
, to and including the date hereof.
4. The following persons are now duly elected and qualified officers
of the Company, holding the offices indicated next to their respective
names below, and such officers have held such offices with the Company at
all times since the respective dates set forth opposite their names, to and
including the date hereof, and the signature appearing opposite their
respective names below are the true and genuine signatures of such
officers, and each of such officers is duly authorized to execute and
deliver on behalf of the Company the Credit Agreement and the Notes of the
Company to be issued pursuant thereto and to act as Responsible Officers on
behalf of the Company under the Credit Agreement:
<PAGE>
2
Month & Year
Name Office Signature of Election
IN WITNESS WHEREOF, the undersigned has hereunto set his name and affixed the
corporate seal of the Company.
Assistant Secretary of the Company
(CORPORATE SEAL)
Date: , 19__
I, , Vice President of the Company, hereby certify that
, whose genuine signature appears above, is, and has been at
all times since a duly elected, qualified and acting Assistant Secretary of
the Company.
Vice President
___________________, 19__
<PAGE>
EXHIBIT J
---------
[Form of Opinion of Peter G. Skinner, Esq.]
___________________, 19
Chemical Bank
270 Park Avenue
New York, New York 10017
Dear Sirs:
In my capacity as General Counsel, I have acted as counsel for Dow Jones &
Company, Inc., a Delaware corporation (the "Company"), in connection with the
execution and delivery of the Revolving Credit Agreement, dated as of November
__, 1994, among Dow Jones & Company, Inc. (the "Company"), the Banks parties
thereto and Chemical Bank, as Agent (as the same may be amended, supplemented or
otherwise modified, the "Agreement"), and the execution and delivery pursuant
---------
thereto of Notes of the Company, dated the date hereof.
This opinion is delivered to you pursuant to Section 4 of the Agreement. Terms
used herein which are defined in the Agreement shall have the respective
meanings set forth in the Agreement, unless otherwise defined herein.
In connection with this opinion, I have examined executed copies of each of
the Agreement, the Notes and such corporate documents and records of the Company
and its Subsidiaries, certificates of public officials and officers of the
Company and its Subsidiaries, and such other documents, as I have deemed
necessary or appropriate for the purposes of this opinion. In stating my
opinion, I have assumed the genuineness of all signatures of, and the authority
of, persons signing the Agreement on behalf of parties thereto other than the
Company, the authenticity of all documents submitted to me as originals and the
conformity to authentic original documents of all documents submitted to me as
certified, conformed or photostatic copies.
Based upon the foregoing, I am of the opinion that:
1. Each of the Company and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, (b) has the corporate power and authority and the legal
right to own and operate its property, to lease the property it operates
under lease and to conduct the business in which it is currently engaged
and (c) to the best of my knowledge, is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its
<PAGE>
2
business requires such qualification and where the failure to be so
qualified would have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
2. The Company has the corporate power and authority to make, deliver
and perform the Agreement and the Notes and to borrow thereunder and has
taken all necessary corporate action to authorize the borrowings on the
terms and conditions of the Agreement and the Notes and to authorize the
execution, delivery and performance of the Agreement and the Notes. No
consent or authorization of, filing with, or other act by or in respect of
any Governmental Authority, is required to be obtained by the Company in
connection with the borrowings thereunder or with the execution, delivery,
performance, validity or enforceability of the Agreement or the Notes.
3. The Agreement, the Revolving Credit Note and the Grid Bid Note
have been duly executed and delivered on behalf of the Company, and the
Agreement, the Revolving Credit Note and the Grid Bid Note each constitutes
a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles (whether enforcement is sought by
proceedings in equity or at law). No opinion is expressed as to the
availability of the remedy of specific performance.
4. The execution, delivery and performance of the Agreement and the
Notes by the Company and the use of the proceeds of the borrowings
thereunder as provided therein, will not violate any provision of any
existing law or regulation applicable to the Company, or, to the best of my
knowledge, of any order, judgment, award or decree of any court, arbitrator
or governmental authority binding upon or applicable to the Company, or of
the Certificate of Incorporation or By-Laws of the Company, or, to the best
of my knowledge, of any securities issued by the Company, or, to the best
of my knowledge, of any mortgage, indenture, lease, contract or other
agreement, instrument or undertaking by which the Company or any of its
Subsidiaries or any of their respective assets may be bound, and, to the
best of my knowledge, will not result in or require the creation or
imposition of any Lien on any of its or their respective properties, assets
or revenues pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or undertaking.
5. To the best of my knowledge, no litigation, investigation or
proceeding of or before any court, arbitrator or governmental authority is
pending or
<PAGE>
3
threatened by or against the Company or any of its Subsidiaries or against
any of its or their respective properties or revenues (a) with respect to
the Agreement or the Notes or any of the transactions contemplated thereby,
or (b) which, if adversely determined, would have a material adverse effect
on the business, operations, property or financial or other condition of
the Company and its Subsidiaries taken as a whole.
6. The Company is not an "investment company" or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
Very truly yours,
<PAGE>
EXHIBIT K
---------
[FORM OF COMMITMENT TRANSFER SUPPLEMENT]
COMMITMENT TRANSFER SUPPLEMENT
COMMITMENT TRANSFER SUPPLEMENT, dated as of the date set forth in Item 1 of
Schedule I hereto, among the Transferor Bank set forth in Item 2 of Schedule I
hereto (the "Transferor Bank"), each Purchasing Bank set forth in Item 3 of
Schedule I hereto (each, a "Purchasing Bank"), and CHEMICAL BANK, as agent for
the Banks under the Credit Agreement described below (in such capacity, the
"Agent").
W I T N E S S E T H :
WHEREAS, this Commitment Transfer Supplement is being executed and delivered
in accordance with subsection 9.6(d) of the Revolving Credit Agreement, dated as
of November __, 1994, among Dow Jones & Company, Inc. (the "Company"), the Banks
parties thereto and the Agent (as the same may be amended, supplemented or
otherwise modified, the "Credit Agreement"; terms defined therein being used
----------------
herein as therein defined);
WHEREAS, each Purchasing Bank (if it is not already a Bank party to the Credit
Agreement) wishes to become a Bank party to the Credit Agreement; and
WHEREAS, the Transferor Bank is selling and assigning to each Purchasing Bank,
rights, obligations and commitments under the Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Upon receipt by the Agent of five counterparts of this Commitment Transfer
Supplement, to each of which is attached a fully completed Schedule I and
Schedule II, and each of which has been executed by the Transferor Bank, each
Purchasing Bank (and any other person required by the Credit Agreement to
execute this Commitment Transfer Supplement), the Agent will transmit to the
Company, the Transferor Bank and each Purchasing Bank a Transfer Effective
Notice, substantially in the form of Schedule III to this Commitment Transfer
Supplement (a "Transfer Effective Notice"). Such Transfer Effective Notice
shall set forth, inter alia, the date on which the transfer effected by this
Commitment Transfer Supplement shall become effective (the "Transfer Effective
Date, which date shall be the fifth Business Day following the date of such
Transfer Effective Notice. From and after the Transfer Effective Date each
Purchasing Bank shall be a Bank party to the Credit Agreement for all purposes
thereof.
2. At or before 12:00 Noon, local time of the Transferor Bank, on the Transfer
Effective Date, each Purchasing
<PAGE>
2
Bank shall pay to the Transferor Bank, in immediately available funds, an amount
equal to the purchase price, as agreed between the Transferor Bank and such
Purchasing Bank (the "Purchase Price"), of the portion being purchased by such
Purchasing Bank (such Purchasing Bank's "Purchased Percentage") of the
outstanding Revolving Credit Loans and other amounts owing to the Transferor
Bank under the Credit Agreement and the Revolving Credit Notes (other than any
Bid Loans and Bid Notes owing to the Transferor Bank). Effective upon receipt by
the Transferor Bank of the Purchase Price from a Purchasing Bank, the Transferor
Bank hereby irrevocably sells, assigns and transfers to such Purchasing Bank,
without recourse, representation or warranty, and each Purchasing Bank hereby
irrevocably purchases, takes and assumes from the Transferor Bank, such
Purchasing Bank's Purchased Percentage of the Loan Commitments and the presently
outstanding Revolving Credit Loans and other amounts owing to the Transferor
Bank under the Credit Agreement and the Revolving Credit Notes (other than any
Bid Loans and Bid Notes owing to the Transferor Bank) together with all
instruments, documents and collateral security pertaining thereto.
3. The Transferor Bank has made arrangements with each Purchasing Bank with
respect to (i) the portion, if any, to be paid, and the date or dates for
payment, by the Transferor Bank to such Purchasing Bank of any fees heretofore
received by the Transferor Bank pursuant to the Credit Agreement prior to the
Transfer Effective Date and (ii) the portion, if any, to be paid, and the date
or dates for payment, by such Purchasing Bank to the Transferor Bank of fees or
interest received by such Purchasing Bank pursuant to the Credit Agreement from
and after the Transfer Effective Date.
4. (a) All principal payments that would otherwise be payable from and after
the Transfer Effective Date to or for the account of the Transferor Bank
pursuant to the Credit Agreement and the Notes (other than any payments in
respect of any Bid Notes held by the Transferor Bank) shall, instead, be payable
to or for the account of the Transferor Bank and the Purchasing Banks, as the
case may be, in accordance with their respective interests as reflected in this
Commitment Transfer Supplement.
(b) All interest, fees and other amounts that would otherwise accrue for the
account of the Transferor Bank from and after the Transfer Effective Date
pursuant to the Credit Agreement and the Notes (other than any such amounts
accruing in respect of any Bid Notes held by the Transferor Bank) shall,
instead, accrue for the account of, and be payable to, the Transferor Bank and
the Purchasing Banks, as the case may be, in accordance with their respective
interests as reflected in this Commitment Transfer Supplement. In the event that
any amount of interest, fees or other amounts accruing prior to the Transfer
Effective Date was included in the Purchase Price paid by any Purchasing Bank,
the Transferor Bank and each Purchasing Bank will make appropriate arrangements
for payment by the Transferor
<PAGE>
3
Bank to such Purchasing Bank of such amount upon receipt thereof from the
Company.
5. On or prior to the Transfer Effective Date, the Transferor Bank will
deliver to the Agent its Revolving Credit Notes. On or prior to the Transfer
Effective Date, the Company will deliver to the Agent Revolving Credit Notes for
each Purchasing Bank and the Transferor Bank, in each case in principal amounts
reflecting, in accordance with the Credit Agreement, their Commitments (as
adjusted pursuant to this Commitment Transfer Supplement). AS provided in
subsection 9.6(d) of the Credit Agreement, each such new Revolving Credit Note
shall be dated the Closing Date. Promptly after the Transfer Effective Date, the
Agent will send to each of the Transferor Bank and the Purchasing Banks its new
Revolving Credit Notes and will send to the Company the superseded Revolving
Credit Note of the Transferor Bank, marked "Cancelled."
6. Concurrently with the execution and delivery hereof, the Transferor Bank
will provide to each Purchasing Bank (if it is not already a Bank party to the
Credit Agreement) conformed copies of all documents delivered to such Transferor
Bank on the Closing Date in satisfaction of the conditions precedent set forth
in the Credit Agreement.
7. Each of the parties to this Commitment Transfer Supplement agrees that at
any time and from time to time upon the written request of any other party, it
will execute and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to effect the
purposes of this Commitment Transfer Supplement.
8. By executing and delivering this Commitment Transfer Supplement, the
Transferor Bank and each Purchasing Bank confirm to and agree with each other
and the Agent and the Banks as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned hereby free and clear of any adverse claim, the Transferor Bank makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, the Notes or any
other instrument or document furnished pursuant thereto; (ii) the Transferor
Bank makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Company or the performance or
observance by the Company of any of its obligations under the Agreement, the
Notes or any other instrument or document furnished pursuant hereto; (iii) each
Purchasing Bank confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to in subsection 3.1,
the financial statements delivered pursuant to subsection 5.1, if any, and such
other documents and information as it has
<PAGE>
4
deemed appropriate to make its own credit analysis and decision to enter into
this Commitment Transfer Supplement; (iv) each Purchasing Bank will,
independently and without reliance upon the Agent, the Transferor Bank or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (v) each Purchasing Bank appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under the Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto,
all in accordance with Section 8 of the Credit Agreement; and (vi) each
Purchasing Bank agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank.
9. Each party hereto represents and warrants to and agrees with the Agent that
it is aware of and will comply with the provision of subsection 9.6(h) of the
Credit Agreement.
10. Schedule II hereto sets forth the revised Commitments and Commitment
Percentages of the Transferor Bank and each Purchasing Bank as well as
administrative information with respect to each Purchasing Bank.
11. This Commitment Transfer Supplement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Commitment Transfer
Supplement to be executed by their respective duly authorized officers on
Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.
<PAGE>
SCHEDULE I TO
COMMITMENT
TRANSFER
SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
Re: Revolving Credit Agreement with Dow Jones & Company, Inc. or borrower.
Item 1 (Date of Commitment [Insert date of Commitment
Transfer Supplement): Transfer Supplement]
Item 2 (Transferor Bank): [Insert name of Transferor
Bank]
Item 3 (Purchasing Bank[s]): [Insert name[s] of
Purchasing Bank[s]]
Item 4 (Signatures of Parties
to Commitment Transfer
Supplement):
[NAME OF BANK], as
Transferor Bank
By ____________________________
Title:
[NAME OF BANK], as a
Purchasing Bank
By ____________________________
Title:
[NAME OF BANS], as a
Purchasing Bank
By ____________________________
Title:
<PAGE>
2
CONSENTED TO AND ACKNOWLEDGED:
DOW JONES & COMPANY, INC.
By ___________________________
Title:
CHEMICAL BANK, as Agent
By ___________________________
Title:
[Consents Required only when
Purchasing Bank is not already
a Bank or affiliate thereof]
ACCEPTED FOR RECORDATION
IN REGISTER:
CHEMICAL BANK, as Agent
By ___________________________
Title:
<PAGE>
SCHEDULE II
TO COMMITMENT
TRANSFER
SUPPLEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND LOAN COMMITMENT AMOUNTS
[Name of Transferor
Bank] Revised Loan
Commitment Amounts: $________
Revised Loan
Commitment Percentage: ________
[Name of Purchasing
Bank] New Loan
Commitment Amounts: $________
Address for Notices:
New Loan
Commitment Percentage: ________
[Address]
Attention:
Telex:
Answerback:
Telephone:
Telecopier:
Eurodollar Lending Office:
Domestic Lending Office:
<PAGE>
SCHEDULE III
TO COMMITMENT
TRANSFER
SUPPLEMENT
[Form of Transfer Effective Notice]
To: Insert Name of Company, Transferor Bank and each Purchasing Bank]
The undersigned, as Agent [delegate of the Agent performing administrative
functions of the Agent] under the Revolving Credit Agreement, dated as of
November __, 1994, among DOW JONES & COMPANY, INC. (the "Company"), the Banks
parties thereto and CHEMICAL BANK, as Agent, acknowledges receipt of five
executed counterparts of a completed Commitment Transfer Supplement, as
described in Schedule I hereto. [Note: attach copy of Schedule I from
Commitment Transfer Supplement.] Terms defined in such Commitment Transfer
Supplement are used herein as therein defined.
1. Pursuant to such Commitment Transfer Supplement, you are advised that the
Transfer Effective Date will be _______________. [Insert fifth business day
following date of Transfer Effective Notice]
2. Pursuant to such Commitment Transfer Supplement, the Transferor Bank is
required to deliver to the Agent on or before the Transfer Effective Date its
Note[s].
3. Pursuant to such Commitment Transfer Supplement, the Company is required
to deliver to the Agent on or before the Transfer Effective Date the following *
Notes, each dated ___________________________________. [Insert Closing Date]
- ----------
* [Describe each new Note for Transferor Bank and Purchasing Bank as to
principal amount, payee and type of Note (e.g. Revolving Credit Note, Grid Bid
Loan Note, etc.]
<PAGE>
2
4. Pursuant to such Commitment Transfer Supplement each Purchasing Bank is
required to pay its Purchase Price to the Transferor Bank at or before 12:00
Noon on the Transfer Effective Date in immediately available funds.
Very truly yours.
CHEMICAL BANK
By ______________________________
Title:
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
Exhibit 11
DOW JONES & COMPANY, INC.
and its Subsidiaries
COMPUTATION OF EARNINGS PER SHARE
(in thousands except per share data)
1994 1993 1992
PRIMARY -------- -------- --------
- -------
<S> <C> <C> <C>
Average shares outstanding used in the computation of
reported earnings per share 99,002 99,773 101,150
Common stock equivalents (assuming the use of the proceeds from
their exercise or issuance to acquire treasury stock at the
average market value of stock during the year)--shares
granted under employee stock option and stock purchase plans 660 510 242
-------- -------- --------
Average shares and common stock equivalents outstanding--primary 99,662 100,283 101,392
======== ======== ========
Net income $178,173 $147,547 $107,586
======== ======== ========
Net income per share--primary $1.79 $1.47 $1.06
===== ===== =====
FULLY DILUTED
- -------------
Average shares outstanding used in the computation of
reported earnings per share 99,002 99,773 101,150
Common stock equivalents (assuming the use of the proceeds from
their exercise or issuance to acquire treasury stock at the
higher of average market value of stock during the year or
year-end market price)--shares granted under employee stock
option and stock purchase plans 660 862 242
-------- -------- --------
Average shares and common stock equivalents outstanding--fully diluted 99,662 100,635 101,392
======== ======== ========
Net income $178,173 $147,547 $107,586
======== ======== ========
Net income per share--fully diluted $1.79 $1.47 $1.06
===== ===== =====
</TABLE>
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
Exhibit 21
SUBSIDIARIES OF THE COMPANY
Jurisdiction of
Incorporation or
Name of Subsidiary Organization
- ------------------ ----------------
<S> <C>
American Demographics, Inc. New York
Courrier Export (U.K.), Limited United Kingdom
Dow Jones AER Company, Inc. Delaware
Economic Research Company, Inc. Delaware
Dow Jones Canada, Inc. Canada
Dow Jones Courrier, N.V. Belgium
Dow Jones Courrier, GmbH Switzerland
Dow Jones Financial Publishing Corp. Delaware
Dow Jones International Marketing Services (U.K.), Ltd. United Kingdom
Dow Jones International Marketing Services GmbH Germany
Dow Jones Newsprint Company, Inc. Delaware
Dow Jones Printing Company (Asia), Inc. Delaware
Dow Jones Publishing Company (Asia), Inc. (90% owned) Delaware
Dow Jones Broadcasting (Asia), Inc. Delaware
Dow Jones Broadcasting (Europe), Inc. Delaware
Dow Jones Publishing Company (Europe), Inc. Delaware
Dow Jones Real Estate Development Corporation Delaware
Dow Jones Southern Holding Company, Inc. Delaware
Dow Jones Virginia Company, Inc. Delaware
Dow Jones Ventures I, Inc. Delaware
Dow Jones Ventures II, Inc. Delaware
Dow Jones Ventures III, Inc. Delaware
Federal Filings, Incorporated Delaware
Nanbei Ltd (55% owned) Turks and Caicos
National Delivery Service, Inc. Delaware
Ottaway Newspapers, Inc. Delaware
Chapel Hill Publishing Company, Inc. North Carolina
News-Sun, Inc. Arizona
ONI of North Carolina, Inc. North Carolina
Sample Publishing Company, Inc. North Carolina
The Inquirer & Mirror, Inc. Massachusetts
Portuguese-American Publications, Inc. Massachusetts
Review Publishing Company Limited Hong Kong
The China Phone Book Co. Ltd. Hong Kong
National Fair Ltd. Hong Kong
Societe Civile D.J. France
Dow Jones Telerate Holdings, Inc. Delaware
Dow Jones Telerate Canada Inc. Ontario
Dow Jones Telerate Systems, Inc. California
Telerate Research & Development Pte Ltd Singapore
Dow Jones Telerate, Inc. New York
Dow Jones Telerate Sports, Inc. Delaware
CompuTrac, Inc. Louisiana
Dow Jones Telerate Software, Inc. Delaware
Dow Jones Telerate Puerto Rico, Inc. Delaware
Telerate Financial Services Co. Delaware
Telerate International Inc. Delaware
Telerate International Limited United Kingdom
</TABLE>
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
Jurisdiction of
Incorporation or
Name of Subsidiary Organization
- ------------------ ----------------
<S> <C>
Dow Jones Telerate International Company
(100% owned Partnership) Delaware
Dow Jones Telerate (Panama) Inc. Panama
Servicios Informativos Telerate Systems (Chile)
Limitada Chile
Dow Jones Telerate (Asia-Pacific) Singapore
Pte Ltd Singapore
Dow Jones Telerate (Australia) Pty Limited Australia
Telerate (Bahamas) Limited Bahamas
Dow Jones Telerate Belgium SA Belgium
Dow Jones Telerate Danmark A/S Denmark
Dow Jones Telerate Limited United Kingdom
Dow Jones Telerate Finland OY Finland
Dow Jones Telerate France SA France
HTG SA France
Valgest SA France
Dow Jones Telerate Ireland Limited Ireland
Dow Jones Telerate Netherlands BV Netherlands
Dow Jones Telerate Espana S.A. Spain
Dow Jones Telerate Sweden AB Sweden
Dow Jones Telerate (Thailand) Limited Thailand
Dow Jones Telerate Technical Services Limited United Kingdom
Telefin SA Greece
Dow Jones Telerate (Switzerland) AG Switzerland
Telerate Argentina Limitada S.A. Argentina
Dow Jones Telerate (Singapore) Pte Ltd Singapore
Dow Jones Telerate de Venezuela, C.A. Venezuela
Dow Jones Telerate (Hong Kong) Limited Hong Kong
Dow Jones Telerate (Asia Pacific) Limited Hong Kong
Dow Jones Telerate Financial Information Delaware
Services, Inc.
Telerate Finansal Sistemler A.S. Turkey
Dow Jones Telerate Informacao Financeira, Lda. Portugal
Dow Jones Telerate Ges.m.b.H. Austria
Dow Jones Telerate Luxembourg SARL Luxembourg
Dow Jones Telerate (New Zealand) Ltd. New Zealand
Advance Pacific Limited Cook Islands
Telerate Uruguay S.A. Uruguay
Dow Jones Telerate GmbH Germany
Dow Jones Telerate Norway AS Norway
Dow Jones Telerate Cyprus Limited Cyprus
Dow Jones Telerate (South Africa) (Pty) Limited South Africa
All of the above subsidiaries are included in the consolidated financial
statements.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FINANCIAL STATEMENTS IN FORM 10-K FOR DOW JONES & COMPANY, INC. FOR
THE FISCAL YEAR ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000029924
<NAME> DOW JONES & COMPANY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 10,888
<SECURITIES> 0
<RECEIVABLES> 244,557
<ALLOWANCES> 14,870
<INVENTORY> 7,832
<CURRENT-ASSETS> 310,130
<PP&E> 1,858,769
<DEPRECIATION> 1,216,680
<TOTAL-ASSETS> 2,445,766
<CURRENT-LIABILITIES> 531,298
<BONDS> 295,552
<COMMON> 102,181
0
0
<OTHER-SE> 1,532,144
<TOTAL-LIABILITY-AND-EQUITY> 2,445,766
<SALES> 2,090,977
<TOTAL-REVENUES> 2,090,977
<CGS> 1,051,416
<TOTAL-COSTS> 1,051,416
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,858
<INCOME-PRETAX> 338,812
<INCOME-TAX> 157,632
<INCOME-CONTINUING> 181,180
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> (3,007)
<NET-INCOME> 178,173
<EPS-PRIMARY> 1.80
<EPS-DILUTED> 0
</TABLE>
