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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-8598
A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-0135890
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
P. O. BOX 655237
DALLAS, TEXAS 75265-5237
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (214) 977-6606
Former name, former address and former fiscal year,
if changed since last report.
NONE
Indicate by check mark whether 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT OCTOBER 30, 1998
----- -------------------------------
Common Stock, $1.67 par value *120,570,850
* Consisting of 101,759,171 shares of Series A Common Stock and 18,811,679
shares of Series B Common Stock.
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A. H. BELO CORPORATION
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements........................................................... 1
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations............................... 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk..................... 11
PART II OTHER INFORMATION
Item 1. Legal Proceedings.............................................................. 12
Item 2. Changes in Securities and Use of Proceeds...................................... 12
Item 3. Defaults Upon Senior Securities................................................ 12
Item 4. Submission of Matters to a Vote of Security Holders............................ 12
Item 5. Other Information.............................................................. 12
Item 6. Exhibits and Reports on Form 8-K............................................... 12
</TABLE>
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PART I.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF EARNINGS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
=======================================================================================================================
In thousands, except per share amounts
(unaudited) 1998 1997 1998 1997
- -------------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET OPERATING REVENUES
Broadcasting $ 137,885 $ 132,957 $ 437,735 $ 377,153
Newspaper publishing 192,043 182,958 582,791 491,495
Other 2,690 3,141 7,822 14,927
----------- ----------- ----------- -----------
Total net operating revenues 332,618 319,056 1,028,348 883,575
OPERATING COSTS AND EXPENSES
Salaries, wages and employee benefits 112,513 103,931 338,004 276,419
Other production, distribution and operating costs 90,024 86,040 260,687 233,518
Newsprint, ink and other supplies 42,894 40,170 127,972 106,756
Depreciation 20,717 18,975 63,686 52,837
Amortization 18,704 17,832 56,051 43,772
----------- ----------- ----------- -----------
Total operating costs and expenses 284,852 266,948 846,400 713,302
----------- ----------- ----------- -----------
Earnings from operations 47,766 52,108 181,948 170,273
OTHER INCOME AND EXPENSE
Interest expense (27,124) (26,903) (81,721) (63,224)
Other, net 355 998 2,477 4,601
----------- ----------- ----------- -----------
Total other income and expense (26,769) (25,905) (79,244) (58,623)
EARNINGS
Earnings before income taxes 20,997 26,203 102,704 111,650
Income taxes 11,290 11,245 49,539 52,752
----------- ----------- ----------- -----------
Net earnings $ 9,707 $ 14,958 $ 53,165 $ 58,898
=========== =========== =========== ===========
NET EARNINGS PER SHARE
Basic $ .08 $ .12 $ .43 $ .52
Diluted $ .08 $ .12 $ .42 $ .52
AVERAGE SHARES OUTSTANDING
Basic 123,784 123,914 124,605 112,816
Diluted 124,881 125,548 126,170 114,126
CASH DIVIDENDS DECLARED PER SHARE $ .12 $ .11 $ .24 $ .22
=========== =========== =========== ===========
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
1
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CONSOLIDATED CONDENSED BALANCE SHEETS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
=====================================================================================================
Dollars in thousands September 30, December 31,
(Current year unaudited) 1998 1997
- ------------------------ ------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and temporary cash investments $ 18,702 $ 11,852
Accounts receivable, net 186,959 220,297
Other current assets 48,845 44,847
------------ ------------
Total current assets 254,506 276,996
Property, plant and equipment, net 618,757 608,318
Intangible assets, net 2,563,819 2,626,953
Other assets 104,821 110,687
------------ ------------
Total assets $ 3,541,903 $ 3,622,954
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,458 $ 43,818
Accrued expenses 86,828 104,084
Other current liabilities 44,871 66,560
------------ ------------
Total current liabilities 173,157 214,462
Long-term debt 1,600,020 1,614,045
Deferred income taxes 439,761 435,695
Other liabilities 36,913 32,748
Shareholders' equity:
Preferred stock
Common stock, $1.67 par value. Authorized
450,000,000 shares:
Series A: Issued 103,156,683 shares at September 30, 1998
and 52,998,586 shares at December 31, 1997 172,272 88,508
Series B: Issued 18,781,056 shares at September 30, 1998
and 9,283,001 shares at December 31, 1997 31,364 15,503
Additional paid-in capital 900,531 1,015,345
Retained earnings 185,717 203,276
Accumulated other comprehensive income 2,272 4,144
------------ ------------
Total 1,292,156 1,326,776
Less deferred compensation - restricted shares (104) (772)
------------ ------------
Total shareholders' equity 1,292,052 1,326,004
Total liabilities and shareholders' equity $ 3,541,903 $ 3,622,954
============ ============
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</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
2
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Nine months ended September 30,
==================================================================================================
In thousands
(unaudited) 1998 1997
- ------------ ------------ ------------
<S> <C> <C>
OPERATIONS
Net earnings $ 53,165 $ 58,898
Adjustments to reconcile net earnings
to net cash provided by operations:
Depreciation and amortization 119,737 96,609
Deferred income taxes 6,895 25,876
Other, net 9,411 (706)
Net change in current assets and liabilities:
Accounts receivable 33,814 (2,301)
Other current assets (4,304) (4,510)
Accounts payable (5,560) (1,711)
Accrued expenses (19,337) (1,413)
Other current liabilities (24,781) 2,088
------------ ------------
Net cash provided by operations 169,040 172,830
INVESTING
Acquisitions -- (852,058)
Capital expenditures (59,694) (50,263)
Other, net (4,226) (6,626)
------------ ------------
Net cash used for investing (63,920) (908,947)
FINANCING
Net payments on revolving debt (10,825) (1,058,574)
Purchases of treasury stock (72,533) --
Payment of dividends on stock (22,466) (17,600)
Net proceeds from exercise of stock options 7,554 6,007
Borrowings for acquisitions -- 1,025,545
Refinancing of Providence Journal debt -- (200,000)
Net proceeds from fixed rate debt offering -- 989,994
------------ ------------
Net cash provided by (used for) financing (98,270) 745,372
Net increase in cash and temporary cash investments 6,850 9,255
Cash and temporary cash investments at beginning of period 11,852 13,829
------------ ------------
Cash and temporary cash investments at end of period $ 18,702 $ 23,084
============ ============
SUPPLEMENTAL DISCLOSURES
Interest paid, net of amounts capitalized $ 73,538 $ 44,262
Income taxes paid, net of refunds $ 79,797 $ 49,556
Value of stock issued for acquisition $ -- $ 870,399
KIRO/KMOV asset exchange $ -- $ 152,000
------------ ------------
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</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
3
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
(1) The accompanying unaudited consolidated condensed financial statements
of A. H. Belo Corporation and subsidiaries (the "Company" or "Belo")
have been prepared in accordance with generally accepted accounting
principles for interim financial information and in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. The balance sheet at December 31, 1997 has been
derived from the audited consolidated financial statements at that date
but does not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine-month periods
ended September 30, 1998 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1998. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K
for the year ended December 31, 1997.
Certain amounts for the prior periods have been reclassified to conform
to the current year presentation.
(2) As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes reporting requirements for
comprehensive income and its components, but has no effect on the
Company's net earnings or total shareholders' equity. SFAS No. 130,
among other things, requires unrealized gains and losses related to
available-for-sale securities to be included in other comprehensive
income. Previously, these amounts were reported as adjustments to
retained earnings. Total comprehensive income for the three months
ended September 30, 1998 and 1997 was $8,825 and $17,046 respectively.
Year-to-date comprehensive income was $51,293 and $62,422 for 1998 and
1997, respectively.
(3) On June 5, 1998, Belo completed a two-for-one stock split in the form
of a dividend whereby one additional share of Series A or Series B
Common Stock was issued for each corresponding share of Series A or
Series B Common Stock held on May 22, 1998. A total of 62,653,941
shares (53,306,307 shares of Series A Common Stock and 9,347,634 shares
of Series B Common Stock) were issued. In connection with the stock
split, common stock was increased and additional paid in capital was
charged for the aggregate par value of the shares that were issued. All
per share data for the prior year have been restated to retroactively
reflect the stock split.
Prior to the split, the Company's shareholders approved a proposal to
amend the Company's Certificate of Incorporation to increase the total
number of authorized shares of Common Stock from 150 million to 450
million shares.
(4) The following table sets forth the reconciliation between weighted
average shares used for calculating basic and diluted earnings per
share for the three and nine months ending September 30, 1998 and 1997
(in thousands):
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Weighted average shares for basic earnings
per share 123,784 123,914 124,605 112,816
Effect of employee stock options 1,097 1,634 1,565 1,310
-------- -------- -------- --------
Weighted average shares for diluted earnings
per share 124,881 125,548 126,170 114,126
-------- -------- -------- --------
</TABLE>
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
(5) Net operating revenues, earnings from operations, and depreciation and
amortization by industry segment are shown below (in thousands):
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET OPERATING REVENUES
Broadcasting $ 137,885 $ 132,957 $ 437,735 $ 377,153
Newspaper publishing 192,043 182,958 582,791 491,495
Other 2,690 3,141 7,822 14,927
------------ ------------ ------------ ------------
Total net operating revenues $ 332,618 $ 319,056 $ 1,028,348 $ 883,575
============ ============ ============ ============
EARNINGS FROM OPERATIONS
Broadcasting $ 24,732 $ 26,063 $ 96,365 $ 87,781
Newspaper publishing 36,390 37,418 120,846 117,120
Other (2,127) (1,648) (5,214) (8,937)
Corporate expenses (11,229) (9,725) (30,049) (25,691)
------------ ------------ ------------ ------------
Total earnings from operations $ 47,766 $ 52,108 $ 181,948 $ 170,273
============ ============ ============ ============
DEPRECIATION AND AMORTIZATION
Broadcasting $ 24,772 $ 22,874 $ 74,741 $ 60,652
Newspaper publishing 13,427 13,229 42,168 33,642
Other 289 306 818 1,282
Corporate 933 398 2,010 1,033
------------ ------------ ------------ ------------
Total depreciation and amortization $ 39,421 $ 36,807 $ 119,737 $ 96,609
============ ============ ============ ============
</TABLE>
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (DOLLARS IN THOUSANDS)
The Company owns 17 network-affiliated television stations that currently reach
14.3 percent of U.S. television households. In addition, the Company manages
four television stations through local marketing agreements ("LMA"). Belo also
publishes six daily newspapers. The following table sets forth the Company's
major media assets by segment as of September 30, 1998:
BROADCASTING
<TABLE>
<CAPTION>
- --------------------- ------------------- ------------------ ---------------- ------------------ -------------------
NETWORK
MARKET MARKET RANK(a) STATION AFFILIATION STATUS ACQUIRED
- --------------------- ------------------- ------------------ ---------------- ------------------ -------------------
<S> <C> <C> <C> <C> <C>
Dallas-Fort Worth 7 WFAA ABC Owned March 1950
Houston 11 KHOU CBS Owned February 1984
Seattle-Tacoma 12 KING NBC Owned February 1997
Seattle-Tacoma 12 KONG IND LMA February 1997
Sacramento 20 KXTV ABC Owned February 1984
St. Louis 21 KMOV CBS Owned June 1997
Portland 24 KGW NBC Owned February 1997
Charlotte 28 WCNC NBC Owned February 1997
San Antonio 37 KENS CBS Owned October 1997
Hampton-Norfolk 40 WVEC ABC Owned February 1984
New Orleans 41 WWL CBS Owned June 1994
Louisville 48 WHAS ABC Owned February 1997
Albuquerque 49 KASA FOX Owned February 1997
Tulsa 59 KOTV CBS Owned February 1984
Honolulu 71 KHNL NBC Owned February 1997
Honolulu 71 KFVE UPN LMA February 1997
Spokane 72 KREM CBS Owned February 1997
Spokane 72 KSKN UPN LMA February 1997
Tucson 78 KMSB FOX Owned February 1997
Tucson 78 KTTU UPN LMA February 1997
Boise 125 KTVB NBC Owned February 1997
- --------------------- ------------------- ------------------ ---------------- ------------------ -------------------
</TABLE>
NEWSPAPER PUBLISHING
<TABLE>
<CAPTION>
- ------------------------------- ----------------------------- ----------------- ----------------- ------------------
DAILY SUNDAY
NEWSPAPER LOCATION ACQUIRED CIRCULATION(b) CIRCULATION(b)
- ------------------------------- ----------------------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
The Dallas Morning News Dallas, TX (c) 515,181 780,084
The Providence Journal Providence, RI February 1997 167,381 239,193
The Press-Enterprise Riverside, CA July 1997 161,612 168,222
Messenger-Inquirer Owensboro, KY January 1996 31,767 34,991
The Eagle Bryan-College Station, TX December 1995 22,449 27,219
The Gleaner Henderson, KY March 1997 11,152 13,167
- ------------------------------- ----------------------------- ----------------- ----------------- ------------------
</TABLE>
6
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<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
OTHER
- --------------------------------------------------------------------------------------------------------------------
COMPANY DESCRIPTION
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
Northwest Cable News Cable news network distributed to approximately 2 million homes
dallasnews.com Web site featuring daily content from The Dallas Morning News
projo.com Web site featuring daily content from The Providence Journal
Belo Productions, Inc. Produces television programming
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Market rank is based on the relative size of the television market or
Designated Market Area ("DMA") among the 211 generally recognized DMA's in
the United States, based on July 1998 Nielsen estimates.
(b) Average paid circulation for the six months ended September 30, 1998,
according to the Audit Bureau of Circulation's FAS-FAX report.
(c) The first issue of The Dallas Morning News was published October 1, 1885.
Net earnings for the third quarter and year-to-date 1998 were $9,707 (8 cents
per share) and $53,165 (42 cents per share) compared to $14,958 (12 cents per
share) and $58,898 (52 cents per share) for the same periods in 1997. Results
for 1998 include the effect of 1997 acquisitions, including: The Providence
Journal Company ("PJC") on February 28, 1997, which included nine television
stations and a daily newspaper; The Gleaner (Henderson, KY) on March 31, 1997;
and The Press-Enterprise (Riverside, CA) on July 25, 1997. In addition to these
acquisitions, the Company exchanged KIRO-TV (Seattle, WA) for KMOV-TV (St.
Louis, MO) effective June 2, 1997 and acquired KENS-TV (San Antonio, TX) in an
exchange for Belo's interest in TVFN, a cable network, on October 15, 1997. Net
earnings and earnings per share for year-to-date 1998 were lower than comparable
1997 results due primarily to higher amortization and interest expense and a
greater number of average shares outstanding as a result of the acquisitions
described above.
To enhance comparability of the Company's segment results of operations for the
three and nine months ended September 30, 1998 and 1997, certain information
below is presented on an "as adjusted" basis and reflects the transactions noted
above as though each had occurred at the beginning of 1997. The discussion that
follows compares segment operations on an adjusted basis only.
<TABLE>
<CAPTION>
THREE MONTHS ENDED AS ADJUSTED AS REPORTED
SEPTEMBER 30, ------------------------------------ ------------------------------------
(IN THOUSANDS) 1998 1997 % CHANGE 1998 1997 % CHANGE
- -------------------------- ---------- ---------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Broadcasting $ 137,885 $ 139,484 (1.1)% $ 137,885 $ 132,957 3.7%
Newspaper publishing 192,043 190,743 .7% 192,043 182,958 5.0%
Other 2,690 2,088 28.8% 2,690 3,141 (14.4)%
Operating cash flow (1)
Broadcasting $ 49,504 $ 51,845 (4.5)% $ 49,504 $ 48,937 1.2%
Newspaper publishing 49,817 51,754 (3.7)% 49,817 50,647 (1.6)%
Other (1,838) (1,172) (56.8)% (1,838) (1,342) (37.0)%
</TABLE>
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<TABLE>
<CAPTION>
NINE MONTHS ENDED AS ADJUSTED AS REPORTED
SEPTEMBER 30, ---------------------------------- ----------------------------------
(IN THOUSANDS) 1998 1997 % CHANGE 1998 1997 % CHANGE
- -------------------------- --------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Broadcasting $ 437,735 $ 420,177 4.2% $ 437,735 $ 377,153 16.1%
Newspaper publishing 582,791 567,691 2.7% 582,791 491,495 18.6%
Other 7,822 7,004 11.7% 7,822 14,927 (47.6)%
Operating cash flow (1)
Broadcasting $ 171,106 $ 166,556 2.7% $ 171,106 $ 148,433 15.3%
Newspaper publishing 163,014 163,912 (.5)% 163,014 150,762 8.1%
Other (4,396) (2,568) (71.2)% (4,396) (7,655) 42.6%
</TABLE>
(1) Operating cash flow is defined as segment earnings from operations plus
depreciation and amortization. Operating cash flow is used in the
broadcasting and newspaper publishing industries to analyze and compare
companies on the basis of operating performance, leverage and liquidity.
However, operating cash flow should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
generally accepted accounting principles.
Broadcasting
Broadcasting revenues for the third quarter of 1998 were $137,885, a decrease of
1.1 percent compared to third quarter 1997 revenues of $139,484. On a
year-to-date basis, revenues of $437,735 were up 4.2 percent over 1997 revenues
of $420,177. Third quarter revenues were down in both local and national
advertising (3.7 percent and 9.6 percent, respectively). Local advertising
revenue declines were most significant at Belo's stations in Houston, Seattle,
Sacramento and St. Louis. The decline in national advertising was fueled by
lower automotive advertising revenues following this summer's General Motors
autoworkers' strike. These declines were partially offset by significant gains
in political advertising from local, state and national elections. The majority
of Belo's 17 television stations reported increases in political advertising
revenue in the third quarter of 1998, with the most significant increases noted
in Dallas, Houston, Sacramento, Seattle and Louisville.
Year-to-date political revenues were up $12,560 compared to the same period last
year due mostly to state-wide election campaigns in Texas, California,
Washington and Kentucky. Local advertising revenue increased 3.2 percent for
the nine-month period due to first and second quarter gains in automotive
advertising and broadcast of the Winter Olympics on the Company's six CBS
stations. National advertising revenues for the year-to-date period were down
2.5 percent primarily due to the third quarter decline in automotive
advertising as discussed above.
Broadcasting operating cash flow margins for the third quarter of 1998 and 1997
were 35.9 percent and 37.2 percent, respectively. Margins for the year-to-date
periods were 39.1 percent for 1998 and 39.6 percent for 1997. Broadcasting
operating cash flow for the quarter was $49,504 in 1998 versus $51,845 in 1997,
a decrease of 4.5 percent. Year-to-date broadcasting operating cash flow was
$171,106 in 1998, or 2.7 percent better than the prior year. Third quarter cash
expenses for broadcasting increased just .8 percent in 1998 versus 1997 due to
lower discretionary spending and bonus accruals. Year-to-date cash expenses were
up 5.1 percent in 1998 versus 1997. The increase was primarily due to higher
salaries, wages and employee benefits and higher programming costs. Contributing
to the increase in employee costs were more employees, normal merit adjustments,
overtime and higher benefit costs. Programming expenses increased due to higher
year-to-date syndicated programming costs. Cash expenses for the year-to-date
period were also higher due to costs related to Olympic coverage during the
first quarter.
Newspaper Publishing
Newspaper publishing revenues for the third quarter of 1998 were $192,043
compared to third quarter 1997 revenues of $190,743. Publishing revenues for the
year-to-date 1998 and 1997 periods were $582,791 and $567,691, respectively.
Revenues for Belo's largest newspaper, The Dallas Morning News, were down .6
percent for the quarter but were 2 percent higher in the year-to-date period.
Both third quarter and year-to-date 1998
8
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advertising revenues were affected by declines in retail advertising, due in
part to lower department store linage, along with lower telecommunications
advertising in the general category. Classified advertising revenue was up .4
percent over third quarter 1997 and 5 percent for the nine-month period due
primarily to higher rates. However, the impact of volume declines in the
classified employment category, which has a very high rate structure, has also
depressed overall revenue growth. Circulation revenues were down 5.7 percent for
the quarter due to daily and Sunday volume declines of .6 percent and 1.3
percent, respectively. Year-to-date circulation revenues were down 5.6 percent
as volumes declined 1 percent and 1.4 percent for daily and Sunday,
respectively.
Revenues for The Providence Journal were up 3.3 percent and 5.5 percent for the
three and nine-month periods of 1998 as compared to 1997. Retail advertising
revenue for both periods was up significantly due to higher average rates and
first and second quarter volume gains in the electronics, office/computer
equipment and automotive categories. Classified advertising revenues were also
higher in 1998 due to higher rates and volume gains in the employment category,
partially offset by declines in real estate and classified automotive
advertising. Third quarter 1998 general advertising revenues increased due to
higher rates. On a year-to-date basis, general advertising revenue was down due
to a loss in volume related to airline advertising. Circulation revenues for the
quarter and year-to-date periods were down slightly due to volume declines.
Circulation volumes for the quarter were down 1.7 percent daily and 1.3 percent
Sunday. Year-to-date circulation volumes were down 1.5 percent and 1.6 percent
for daily and Sunday, respectively.
Riverside Press-Enterprise revenues improved 6.6 percent for the quarter and 5.4
percent year-to-date due mostly to increases in classified advertising. For the
quarter, gains in classified advertising were volume driven, due mostly to
employment advertising. Year-to-date classified revenue gains were due to higher
rates, which were slightly offset by lower volumes.
The newspaper publishing operating cash flow margins for the third quarters of
1998 and 1997 were 25.9 percent and 27.1 percent, respectively. Year-to-date
newspaper publishing operating cash flow margins were 28 percent and 28.9
percent in 1998 and 1997, respectively. Publishing operating cash flow of
$49,817 for the quarter and $163,014 year-to-date was down 3.7 percent and .5
percent, respectively, compared to the same periods in 1997. Newsprint, ink and
other supplies expense was up 3.3 percent for the quarter and 7.4 percent for
the nine-month period due to a higher average cost per metric ton compared with
the same periods of 1997. Salaries, wages and employee benefits increased by
only .7 percent and 2.6 percent for the three and nine-month periods in 1998,
respectively, compared to the prior year periods. Other production, distribution
and operating costs increased 4 percent for the quarter and 2.4 percent for the
year-to-date period, due primarily to higher distribution costs and advertising
and promotion efforts, partially offset by lower bad debt expense.
Consolidated results
Depreciation and amortization expenses were higher for the three and nine-month
periods of 1998 versus 1997 due to the effect of the prior year acquisitions.
Higher borrowings, as a result of 1997 acquisitions and 1998 share repurchases,
resulted in higher quarter and year-to-date interest expense in 1998 compared to
1997. Additionally, approximately two-thirds of the Company's debt outstanding
during the three and nine-month periods ended September 30, 1998 was fixed-rate
debt carrying a weighted average effective interest rate of 7.3 percent. The
fixed-rate debt was issued during the second and third quarters of 1997 and
replaced borrowings under the Company's revolving credit facility, which is at
lower rates.
The effective tax rates for the quarter and year-to-date periods of 1998 were
53.8 percent and 48.2 percent, respectively. These rates are higher than the
rates for the three and nine-month periods in 1997 of 42.9 percent and 47.2
percent, respectively, due to revisions in estimated pre-tax earnings for the
year, as well as a higher effective state rate in 1998.
Liquidity and Capital Resources
Net cash provided by operations is the Company's primary source of liquidity.
During the first nine months of 1998, net cash provided by operations was
$169,040 compared to $172,830 for the same period in 1997. Increases
9
<PAGE> 12
in 1998 cash earnings (defined as net earnings plus depreciation and
amortization) and receivable collections were more than offset by greater
working capital requirements for interest, 1997 bonus payments in the current
year and the timing of payments for income taxes, including those resulting from
acquisition-related transactions. Net cash provided by operations was sufficient
to fund capital expenditures, common stock dividends and share repurchases.
At September 30, 1998, the Company had $1 billion in fixed-rate debt securities.
The weighted average effective interest rate for these debt instruments is 7.3
percent. The Company also has $500,000 available for issuance under a shelf
registration statement filed in April of 1997. Future issues of fixed-rate debt
may be used to refinance variable-rate debt in whole or in part or for other
corporate needs as determined by management.
At September 30, 1998, the Company had a $1 billion five-year variable-rate
revolving credit agreement with a syndicate of 27 banks under which borrowings
were $455,000. In addition, the Company had $122,300 of short-term unsecured
notes outstanding at September 30, 1998. These borrowings may be converted at
the Company's option to revolving debt. Accordingly, such borrowings are
classified as long-term in the Company's financial statements. The Company is
required to maintain certain ratios as of the end of each quarter, as defined in
its revolving credit agreement. As of September 30, 1998, the Company was in
compliance with all debt covenant requirements.
On June 25, 1998, the Company announced its intention to repurchase shares from
time to time under its existing share repurchase authorization. This repurchase
authority covered approximately 10.7 million shares at the time of the
announcement. As of September 30, 1998, 3,519,100 shares had been repurchased
for an aggregate purchase price of $72,533. During October, the Company
repurchased an additional 1,404,200 shares of its stock for an aggregate cost of
approximately $24,191. All treasury shares purchased during 1998 have been
retired.
Capital expenditures for the first nine months of 1998 were $59,694, the
majority of which were for publishing and broadcast equipment purchases,
including expenditures for the conversion to digital television. In October
1998, The Dallas Morning News entered into an agreement to purchase a new press
that will provide greater production flexibility. The estimated cost to purchase
and install the new press, which is included in the 1999 and 2000 capital plans,
is approximately $36 million.
The new press will replace an existing press that, because of production
limitations, contributes significantly less than The Dallas Morning News' other
presses. The current output of the existing press can be managed by the other
presses. Accordingly, in the fourth quarter of 1998, the existing press was
placed for sale. Disposal of the existing press will result in a non-cash charge
estimated to be approximately $0.06 per share in the fourth quarter of 1998.
During the first nine months of 1998, the Company paid dividends of $22,466 or
18 cents per share on Series A and Series B common stock outstanding, compared
to $17,600 or 16-1/2 cents per share during the comparable 1997 period. The
higher dividends in 1998 were due to the higher dividend rate and a larger
number of shares outstanding as a result of the February 1997 PJC acquisition.
Furthermore, during the second quarter of 1998, the Company completed a
two-for-one stock split in the form of a dividend. All record holders of Series
A and Series B common stock as of May 22, 1998 received an equal number of
Series A or Series B shares on June 5, 1998. All prior year information set
forth in this report, including earnings and dividends per share and average
shares outstanding, has been restated to retroactively reflect the stock split.
Other Matters
In the last several months, the Company has experienced a slowdown in
advertising demand at The Dallas Morning News and in national television
advertising. The Company plans to approach the next 18 months proactively by
anticipating reduced economic activity overall. This approach will include
accelerating initiatives to streamline and bolster the long-term competitive
position of the Company's franchises. In addition, the Company announced a
voluntary early retirement program that applies to certain employees of The
Dallas Morning News and the Company's Broadcast Division. It is possible that
other
10
<PAGE> 13
staff reductions will be made following the expiration of the early retirement
offer. The retirement program will result in a charge to fourth quarter
earnings, although the amount cannot be determined at this time.
The Company has performed an enterprise-wide evaluation to assess the ability
of its information technology ("IT") and non-IT systems to properly function
and execute transactions in the Year 2000. The program includes the following
phases: (1) project identification, (2) estimation of costs and target end
dates, (3) system remediation or replacement, (4) testing, (5) integration and
(6) vendor compliance assessment. The Company has substantially completed the
first two phases of the program and is actively managing projects in the other
phases. All phases of the program are expected to be completed by the year
2000. The vendor assessment phase includes contacting significant third-party
vendors in an effort to determine the state of their Year 2000 readiness. The
Company has initiated formal communications with its significant vendors and is
monitoring responses and implementing additional follow-up measures as
necessary. However, there can be no assurances that IT and non-IT systems of
third parties that the Company may rely upon will be Year 2000 compliant in a
timely manner, and therefore the Company could be adversely affected by failure
of a significant third party to become Year 2000 compliant.
The Company believes the Year 2000 issues associated with its IT systems will be
mitigated by the implementation of previously planned system replacements. Costs
associated with these system replacements have been included in the Company's
capital plans and have been funded primarily with cash provided by operations.
The Company has expensed $3 million in connection with its Year 2000 program
through September 30, 1998, including $2.8 million expensed in 1997, and does
not expect remaining Year 2000 expenses to be significant. While the Company
believes its Year 2000 projects will be completed on a timely basis, failure to
successfully complete significant portions of its Year 2000 program could have a
material adverse effect on various phases of the Company's newspaper and
broadcasting operations, and therefore, on its operating results and financial
condition.
Although, the Company has not adopted a formal contingency plan, it intends to
assess alternatives or other contingency plans at the individual project level
in the event Year 2000 issues arise.
Forward-Looking Statements
Statements in this Form 10-Q concerning the Company's business outlook or future
economic performance, anticipated profitability, revenues, expenses, cash flows
or other financial items and other statements, including Year 2000, that are not
historical facts, are "forward-looking statements" as the term is defined under
applicable Federal Securities Laws. Forward-looking statements are subject to
risks, uncertainties and other factors that could cause actual results to differ
materially from those statements.
Such risks, uncertainties and factors include, but are not limited to, changes
in advertising demand, interest rates and newsprint prices; technological
changes; development of Internet commerce; industry cycles; changes in pricing
or other actions by competitors and suppliers; regulatory changes; the effects
of Company acquisitions and dispositions; and general economic conditions, as
well as other risks detailed in the Company's filings with the Securities and
Exchange Commission ("SEC"), including the Annual Report on Form 10-K and in the
Company's periodic press releases.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No disclosure required.
11
<PAGE> 14
PART II.
ITEM 1. LEGAL PROCEEDINGS
There are a number of legal proceedings pending against the Company, including
several actions for alleged libel. In the opinion of management, liabilities, if
any, arising from these actions would not have a material adverse effect on the
operations or financial position of the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
Under the Company's Amended and Restated Bylaws, a shareholder who wishes to
propose business for consideration at the Annual Meeting or to nominate persons
for election to the Board of Directors must deliver to the Company between
February 12, 1999 and March 12, 1999 the information specified in the Company's
Bylaws regarding such proposal or nomination. Under the SEC's Rule 14a-4, as
recently amended, the Company may exercise discretionary voting authority under
proxies it solicits to vote on a proposal made by a shareholder that the
shareholder does not seek to include in the Company's proxy statement pursuant
to Rule 14a-8, unless the Company is notified about the proposal between
February 12, 1999 and March 12, 1999 and the shareholder satisfies the other
requirements of Rule 14a-4(c). Separately, under SEC Rule 14a-8, a shareholder
wishing to submit a proposal that qualifies for inclusion in the Company's proxy
statement must submit his or her proposal to the Company before December 5, 1998
and must satisfy the other requirements of SEC Rule 14a-8. Copies of the
Company's Bylaws and of SEC rules 14a-4 and 14a-8 may be obtained by contacting
the Company's Corporate Secretary at P. O. Box 655237, Dallas, Texas 75265-5237,
or by telephone at (214) 977-6606.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibits marked with an asterisk (*) are incorporated by reference to
documents previously filed by the Company with the Securities and
Exchange Commission, as indicated. Exhibits marked with a tilde (~) are
management contracts or compensatory plan contracts or arrangements
filed pursuant to Item 601 (b)(10)(iii)(A) of Regulation S-K. All other
documents are filed with this report.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
2.1 * Amended and Restated Agreement and Plan of Merger, dated as
of September 26, 1996 (Appendix A of the Joint Proxy
Statement/Prospectus of Belo and Providence Journal included
in Belo's Registration Statement on Form S-4 (Registration No.
333-19337) filed with the Commission on January 8, 1997)
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
3.1 * Certificate of Incorporation of the Company (Exhibit 3.1 to
the Company's Amended Annual Report on Form 10-K/A dated April
8, 1996 (the "1995 Form 10-K/A"))
3.2 * Certificate of Correction to Certificate of Incorporation
dated May 13, 1987 (Exhibit 3.2 to the 1995 Form 10-K/A)
3.3 * Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated April 16, 1987 (Exhibit
3.3 to the 1995 Form 10-K/A)
3.4 * Certificate of Amendment of Certificate of Incorporation of
the Company dated May 4, 1988 (Exhibit 3.4 to the 1995 Form
10-K/A)
3.5 * Certificate of Amendment of Certificate of Incorporation of
the Company dated May 3, 1995 (Exhibit 3.5 to the Company's
Annual Report on Form 10-K dated February 28, 1996 (the "1995
Form 10-K"))
3.6 * Certificate of Amendment of Certificate of Incorporation of
the Company dated May 15, 1998 (Exhibit 3.6 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1998 (the "2nd Quarter 1998 Form 10-Q"))
3.7 * Amended Certificate of Designation of Series A Junior
Participating Preferred Stock of the Company dated May 4, 1988
(Exhibit 3.6 to the 1995 Form 10-K/A)
3.8 * Certificate of Designation of Series B Common Stock of the
Company dated May 4, 1988 (Exhibit 3.7 to the 1995 Form
10-K/A)
3.9 Amended and Restated Bylaws of the Company, effective
September 18, 1998
4.1 Certain rights of the holders of the Company's Common Stock
are set forth in Exhibits 3.1-3.9 above
4.2 * Specimen Form of Certificate representing shares of the
Company's Series A Common Stock (Exhibit 4.2 to the Company's
Annual Report on Form 10-K dated March 18, 1998 (the "1997
Form 10-K"))
4.3 * Specimen Form of Certificate representing shares of the
Company's Series B Common Stock (Exhibit 4.3 to the 1997 Form
10-K)
4.4 * Amended and Restated Form of Rights Agreement as of February
28, 1996 between the Company and Chemical Mellon Shareholder
Services, L.L.C., a New York banking corporation (Exhibit 4.4
to the 1995 Form 10-K)
4.5 * Supplement No. 1 to Amended and Restated Rights Agreement
between the Company and The First National Bank of Boston
dated as of November 11, 1996 (Exhibit 4.5 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1996)
4.6 Instruments defining rights of debt securities:
(1) * Indenture dated as of June 1, 1997 between the Company
and The Chase Manhattan Bank, as Trustee (Exhibit 4.6(1)
to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1997 (the "2nd
Quarter 1997 Form 10-Q"))
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
(2) * (a) $200 million 6-7/8% Senior Note due 2002
(Exhibit 4.6 (2)(a) to the 2nd Quarter 1997 Form
10-Q)
* (b) $50 million 6-7/8% Senior Note due 2002 (Exhibit
4.6 (2)(b) to the 2nd Quarter 1997 Form 10-Q)
(3) * (a) $200 million 7-1/8% Senior Note due 2007
(Exhibit 4.6 (3)(a) to the 2nd Quarter 1997 Form
10-Q)
* (b) $100 million 7-1/8% Senior Note due 2007
(Exhibit 4.6 (3)(b) to the 2nd Quarter 1997 Form
10-Q)
(4) * $200 million 7-3/4% Senior Debenture due 2027 (Exhibit
4.6 (4) to the 2nd Quarter 1997 Form 10-Q)
(5) * Officer's Certificate dated June 13, 1997 establishing
terms of debt securities pursuant to Section 3.1 of the
Indenture (Exhibit 4.6 (5) to the 2nd Quarter 1997 Form
10-Q)
(6) * (a) $200 million 7-1/4% Senior Debenture due 2027
(Exhibit 4.6 (6)(a) to the Company's Quarterly Report
on Form 10-Q for the quarterly period ended September
30, 1997 (the "3rd Quarter 1997 Form 10-Q"))
* (b) $50 million 7-1/4% Senior Debenture due 2027
(Exhibit 4.6 (6)(b) to the 3rd Quarter 1997 Form
10-Q)
(7) * Officer's Certificate dated September 26, 1997
establishing terms of debt securities pursuant to Section
3.1 of the Indenture (Exhibit 4.6 (7) to the 3rd Quarter
1997 Form 10-Q)
10.1 Contracts relating to television broadcasting:
(1) * Form of Agreement for Affiliation between WFAA-TV in
Dallas, Texas and ABC (Exhibit 10.1 (1) to the 1995 Form
10-K/A)
10.2 Financing agreements:
(1) * Amended and Restated Credit Agreement (Five-year
$1,000,000,000 revolving credit and competitive advance
facility dated as of August 29, 1997 among the Company and
The Chase Manhattan Bank, as Administrative Agent and
Competitive Advance Facility Agent, Bank of America
National Trust and Savings Association and Bank of
Tokyo-Mitsubishi, Ltd. as Co-Syndication Agents, and
NationsBank as Documentation Agent)(Exhibit 10.2(1) to the
3rd Quarter 1997 Form 10-Q)
10.3 Compensatory plans:
~(1) The A. H. Belo Corporation Employee Savings and Investment
Plan:
* (a) The A. H. Belo Corporation Employee Savings and
Investment Plan Amended and Restated January 1, 1998
(Exhibit 10.3(1)(a) to the 1997 Form 10-K)
* (b) Restated Master Trust Agreement between the
Company and Fidelity Management Trust Company, as
restated and dated March 13, 1998 (Exhibit 10.3(1)(b)
to the 1997 Form 10-K)
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C> <C>
~(2) The A. H. Belo Corporation 1986 Long-Term Incentive Plan:
* (a) The A. H. Belo Corporation 1986 Long-Term
Incentive Plan (Effective May 3, 1989, as amended by
Amendments 1, 2, 3, 4, and 5) (Exhibit 10.3 (2) to
the Company's Annual Report on Form 10-K dated March
10, 1997 (the "1996 Form 10-K"))
* (b) Amendment No. 6 to 1986 Long-Term Incentive Plan
(Exhibit 10.3 (2)(b) to the 1997 Form 10-K)
* (c) Amendment No. 7 to 1986 Long-Term Incentive Plan
(Exhibit 10.3(9) to the 1995 Form 10-K)
* (d) Amendment No. 8 to 1986 Long-Term Incentive Plan
(Exhibit 10.3(2)(d) to the 2nd Quarter 1998 Form
10-Q)
~(3) * A. H. Belo Corporation 1995 Executive Compensation Plan as
restated to incorporate amendments through December 4,
1997 (Exhibit 10.3 (3) to the 1997 Form 10-K)
* (a) Amendment to 1995 Executive Compensation Plan
dated July 21, 1998 (Exhibit 10.3(3)(a) to the 2nd
Quarter 1998 Form 10-Q)
~(4) * Management Security Plan (Exhibit 10.3 (1) to the 1996
Form 10-K)
~(5) A. H. Belo Corporation Supplemental Executive Retirement
Plan:
* (a) A. H. Belo Corporation Supplemental Executive
Retirement Plan (Exhibit 10.3(27) to the Company's
Annual Report on Form 10-K dated March 18, 1994 (the
"1993 Form 10-K"))
* (b) Trust Agreement dated February 28, 1994, between
the Company and Mellon Bank, N.A. (Exhibit 10.3(28)
to the 1993 Form 10-K)
10.4 Agreements with officers:
~(1) * Separation Agreement between A. H. Belo Corporation and
Michael D. Perry dated June 30, 1998 (Exhibit 10.4(1) to
the 2nd Quarter 1998 Form 10-Q)
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
During the quarter covered by this report, there were no reports on
Form 8-K filed.
15
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
A. H. BELO CORPORATION
November 13, 1998 By:/s/ Dunia A. Shive
----------------------------------
Dunia A. Shive
Senior Vice President and
Chief Financial Officer
16
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
<S> <C> <C>
2.1 Amended and Restated Agreement and Plan of Merger, dated as of
September 26, 1996 (Appendix A of the Joint Proxy Statement/Prospectus
of Belo and Providence Journal included in Belo's Registration
Statement on Form S-4 (Registration No. 333-19337) filed with the
Commission on January 8, 1997) N/A
3.1 Certificate of Incorporation of the Company (Exhibit 3.1 to the
Company's Amended Annual Report on Form 10-K/A dated April 8, 1996 (the
"1995 Form 10-K/A")) N/A
3.2 Certificate of Correction to Certificate of Incorporation dated May 13,
1987 (Exhibit 3.2 to the 1995 Form 10-K/A) N/A
3.3 Certificate of Designation of Series A Junior Participating Preferred
Stock of the Company dated April 16, 1987 (Exhibit 3.3 to the 1995 Form
10-K/A) N/A
3.4 Certificate of Amendment of Certificate of Incorporation of the Company
dated May 4, 1988 (Exhibit 3.4 to the 1995 Form 10-K/A) N/A
3.5 Certificate of Amendment of Certificate of Incorporation of the Company
dated May 3, 1995 (Exhibit 3.5 to the Company's Annual Report on Form
10-K dated February 28, 1996 (the "1995 Form 10-K")) N/A
3.6 Certificate of Amendment of Certificate of Incorporation of the Company
dated May 15, 1998 (Exhibit 3.6 to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1998 (the "2nd
Quarter 1998 Form 10-Q")) N/A
3.7 Amended Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company dated May 4, 1988 (Exhibit 3.6 to the
1995 Form 10-K/A) N/A
3.8 Certificate of Designation of Series B Common Stock of the Company
dated May 4, 1998 (Exhibit 3.7 to the 1995 Form 10-K/A) N/A
3.9 Amended and Restated Bylaws of the Company, effective September 18,
1998 ___
4.1 Certain rights of the holders of the Company's Common Stock are set
forth in Exhibits 3.1-3.9 above. N/A
4.2 Specimen Form of Certificate representing shares of the Company's
Series A Common Stock (Exhibit 4.2 to the Company's Annual Report on
Form 10-K dated March 18, 1998 (the "1997 Form 10-K")) N/A
4.3 Specimen Form of Certificate representing shares of the Company's
Series B Common Stock (Exhibit 4.3 to the 1997 Form 10-K) N/A
4.4 Amended and Restated Form of Rights Agreement as of February 28, 1996
between the Company and Chemical Mellon Shareholder Services, L.L.C., a
New York banking corporation (Exhibit 4.4 to the 1995 Form 10-K) N/A
</TABLE>
E-1
<PAGE> 20
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
<S> <C> <C>
4.5 Supplement No. 1 to Amended and Restated Rights Agreement between the
Company and The First National Bank of Boston dated as of November 11,
1996 (Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1996) N/A
4.6 Instruments defining rights of debt securities:
(1) Indenture dated as of June 1, 1997 between the Company and The
Chase Manhattan Bank, as Trustee (Exhibit 4.6(1) to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1997 (the "2nd Quarter 1997 Form 10-Q")) N/A
(2) (a) $200 million 6-7/8% Senior Note due 2002 (Exhibit 4.6
(2)(a) to the 2nd Quarter 1997 Form 10-Q) N/A
(b) $50 million 6-7/8% Senior Note due 2002 (Exhibit 4.6 (2)(b) to
the 2nd Quarter 1997 Form 10-Q) N/A
(3) (a) $200 million 7-1/8% Senior Note due 2007 (Exhibit 4.6
(3)(a) to the 2nd Quarter 1997 Form 10-Q) N/A
(b) $100 million 7-1/8% Senior Note due 2007 (Exhibit 4.6 (3)(b)
to the 2nd Quarter 1997 Form 10-Q) N/A
(4) $200 million 7-3/4% Senior Debenture due 2027 (Exhibit 4.6 (4) to
the 2nd Quarter 1997 Form 10-Q) N/A
(5) Officer's Certificate dated June 13, 1997 establishing terms of
debt securities pursuant to Section 3.1 of the Indenture (Exhibit
4.6 (5) to the 2nd Quarter 1997 Form 10-Q) N/A
(6) (a) $200 million 7-1/4% Senior Debenture due 2027 (Exhibit 4.6
(6)(a) to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1997 (the "3rd Quarter
1997 Form 10-Q")) N/A
(b) $50 million 7-1/4% Senior Debenture due 2027 (Exhibit 4.6
(6)(b) to the 3rd Quarter 1997 Form 10-Q) N/A
(7) Officer's Certificate dated September 26, 1997 establishing terms
of debt securities pursuant to Section 3.1 of the Indenture
(Exhibit 4.6 (7) to the 3rd Quarter 1997 Form 10-Q) N/A
10.1 Contracts relating to television broadcasting:
(1) Form of Agreement for Affiliation between WFAA-TV in Dallas, Texas
and ABC (Exhibit 10.1 (1) to the 1995 Form 10-K/A) N/A
</TABLE>
E-2
<PAGE> 21
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
<S> <C> <C>
10.2 Financing agreements:
(1) Amended and Restated Credit Agreement (Five-year $1,000,000,000
revolving credit and competitive advance facility dated as of
August 29, 1997 among the Company and The Chase Manhattan Bank, as
Administrative Agent and Competitive Advance Facility Agent, Bank
of America National Trust and Savings Association and Bank of
Tokyo-Mitsubishi, Ltd. as Co-Syndication Agents, and NationsBank
as Documentation Agent) (Exhibit 10.2 (1) to the 3rd Quarter 1997
Form 10-Q) N/A
10.3 Compensatory plans:
(1) The A. H. Belo Corporation Employee Savings and Investment Plan:
(a) The A. H. Belo Corporation Employee Savings and Investment
Plan Amended and Restated January 1, 1998 (Exhibit 10.3(1)(a)
to the 1997 Form 10-K) N/A
(b) Restated Master Trust Agreement between the Company and
Fidelity Management Trust Company, as restated and dated March
13, 1998 (Exhibit 10.3(1)(b) to the 1997 Form 10-K) N/A
(2) The A. H. Belo Corporation 1986 Long-Term Incentive Plan:
(a) The A. H. Belo Corporation 1986 Long-Term Incentive Plan
(Effective May 3, 1989, as amended by Amendments 1, 2, 3, 4,
and 5)(Exhibit 10.3(2) to the Company's Annual Report on Form
10-K dated March 10, 1997 (the "1996 Form 10-K")) N/A
(b) Amendment No. 6 to 1986 Long-Term Incentive Plan (Exhibit
10.3(2)(b) to the 1997 Form 10-K) N/A
(c) Amendment No. 7 to 1986 Long-Term Incentive Plan (Exhibit
10.3(9) to the 1995 Form 10-K) N/A
(d) Amendment No. 8 to 1986 Long-Term Incentive Plan (Exhibit
10.3(2)(d) to the 2nd Quarter 1998 Form 10-Q) N/A
(3) A. H. Belo Corporation 1995 Executive Compensation Plan as
restated to incorporate amendments through December 4, 1997
(Exhibit 10.3(3) to the 1997 Form 10-K) N/A
(a) Amendment to 1995 Executive Compensation Plan dated July 21,
1998 (Exhibit 10.3(3)(a) to the 2nd Quarter 1998 Form 10-Q) N/A
(4) Management Security Plan (Exhibit 10.3 (1) to the 1996 Form 10-K) N/A
(5) A. H. Belo Corporation Supplemental Executive Retirement Plan:
(a) A. H. Belo Corporation Supplemental Executive Retirement Plan
(Exhibit 10.3(27) to the Company's Annual Report on Form 10-K
dated March 18, 1994 (the "1993 Form 10-K")) N/A
(b) Trust Agreement dated February 28, 1994, between the Company
and Mellon Bank, N.A. (Exhibit 10.3(28) to the 1993 Form 10-K) N/A
</TABLE>
E-3
<PAGE> 22
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
<S> <C> <C>
10.4 Agreements with officers:
(1) Separation Agreement between A. H. Belo Corporation and Michael D.
Perry dated June 30, 1998 (Exhibit 10.4(1) to the 2nd Quarter 1998
Form 10-Q) N/A
12 Ratio of Earnings to Fixed Charges ___
27 Financial Data Schedule N/A
</TABLE>
E-4
<PAGE> 1
EXHIBIT 3.9
AMENDED AND RESTATED
BYLAWS
OF
A. H. BELO CORPORATION
(A Delaware Corporation)
Effective September 18, 1998
<PAGE> 2
INDEX
TO
BYLAWS OF
A. H. BELO CORPORATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - OFFICES
Section 1. Registered Office......................................................1
Section 2. Other Offices..........................................................1
ARTICLE II - MEETINGS OF THE STOCKHOLDERS.. .................................................1
Section 1. Place of Meetings......................................................1
Section 2. Annual Meeting.........................................................1
Section 3. Special Meeting........................................................2
Section 4. Notice of Annual or Special
Meeting...............................................................2
Section 5. Business at Special Meeting............................................2
Section 6. Quorum of Stockholders.................................................2
Section 7. Act of Stockholders' Meeting...........................................3
Section 8. Voting of Shares.......................................................3
Section 9. Proxies................................................................3
Section 10. Voting List............................................................4
Section 11. Order of Business......................................................5
Section 12. Notice of Stockholder Business.........................................5
Section 13. Notice of Stockholder Nominees.........................................7
ARTICLE III - BOARD OF DIRECTORS 8
Section 1. Powers.................................................................8
Section 2. Number of Directors....................................................8
Section 3. Election and Term......................................................9
Section 4. Vacancies.............................................................10
Section 5. Resignation and Removal...............................................10
Section 6. Compensation of Directors.............................................10
ARTICLE IV - MEETINGS OF THE BOARD 11
Section 1. Regular Meetings......................................................11
Section 2. Special Meetings......................................................11
Section 3. Business at Regular or Special
Meeting..............................................................11
Section 4. Quorum of Directors...................................................11
Section 5. Act of Directors' Meeting.............................................12
Section 6. Action by Written Consent Without
a Meeting............................................................12
</TABLE>
-ii-
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE V - COMMITTEES......................................................................12
ARTICLE VI - NOTICES........................................................................14
Section 1. Methods of Giving Notice..............................................14
Section 2. Waiver of Notice......................................................14
Section 3. Attendance as Waiver..................................................15
ARTICLE VII - ACTION WITHOUT A MEETING BY USE OF A
CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT............................................................................15
ARTICLE VIII - OFFICERS.....................................................................15
Section 1. Executive Officers....................................................15
Section 2. Election and Qualification............................................16
Section 3. Division Officers.....................................................16
Section 4. Other Officers and Agents.............................................17
Section 5. Salaries..............................................................17
Section 6. Term, Removal and Vacancies...........................................17
Section 7. Chairman of the Board.................................................18
Section 8. Chief Executive Officer...............................................18
Section 9. President.............................................................18
Section 10. Vice Presidents.......................................................18
Section 11. Secretary.............................................................19
Section 12. Assistant Secretaries.................................................19
Section 13. Treasurer.............................................................19
Section 14. Assistant Treasurers..................................................20
Section 15. Officers' Bond........................................................20
ARTICLE IX - CERTIFICATES FOR SHARES........................................................20
Section 1. Certificates Representing Shares......................................20
Section 2. Transfer of Shares....................................................21
Section 3. Lost, Stolen or Destroyed Certificate.................................22
Section 4. Closing of Stock Ledger and Fixing
Record Date..........................................................22
Section 5. Foreign Share Ownership...............................................23
Section 6. Registered Stockholders...............................................25
ARTICLE X - GENERAL PROVISIONS..............................................................26
Section 1. Dividends.............................................................26
Section 2. Reserves..............................................................26
Section 3. Checks................................................................26
Section 4. Fiscal Year...........................................................26
Section 5. Seal..................................................................26
</TABLE>
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<TABLE>
<S> <C>
ARTICLE XI - INDEMNIFICATION OF OFFICERS AND DIRECTORS......................................26
Section 1. Actions, Suits, or Proceedings
Other Than by or in the Right of
the Corporation......................................................26
Section 2. Actions or Suits by or in the
Right of the Corporation.............................................27
Section 3. Indemnification for Costs, Charges,
and Expenses of Successful Party.....................................28
Section 4. Determination of Right to
Indemnification......................................................28
Section 5. Advance of Costs, Charges and
Expenses.............................................................29
Section 6. Procedure for Indemnification.........................................30
Section 7. Other Rights; Continuation of
Right to Indemnification.............................................31
Section 8. Extent of Indemnification.............................................31
Section 9. Insurance.............................................................32
Section 10. Savings Clause........................................................32
ARTICLE XII - AMENDMENTS....................................................................33
</TABLE>
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AMENDED AND RESTATED
BYLAWS
OF
A. H. BELO CORPORATION
(A Delaware Corporation)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be
located in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation also may have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or as the business of the corporation
may require.
ARTICLE II
MEETINGS OF THE STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders for
the election of directors or for any other proper purpose, including any special
meeting of stockholders regardless of by whom called, shall be held at such time
and place, within or without the State of Delaware, as the Board of Directors
may from time to time designate, as stated in the notice of such meeting or a
duly executed waiver of notice thereof.
Section 2. Annual Meeting. An annual meeting of the stockholders
shall be held on such date and at such time as shall be designated from time to
time by the Board of Directors or, in the absence of a resolution of the Board
of Directors providing otherwise, at 10:00 a.m. on the second
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Wednesday in May in each year, unless such day is a legal holiday, in which case
such meeting shall be held at the specified time on the first full business day
thereafter which is not a legal holiday. At such meeting the stockholders
entitled to vote thereat shall elect, by a plurality vote of the voting power of
all of the shares entitled to vote thereon, the successors to the directors
whose terms shall expire that year, and may transact such other business as
properly may be brought before the meeting.
Section 3. Special Meeting. Special meetings of the stockholders
may be called by the Chief Executive Officer, the Board of Directors or the
holders of not less than one-fifth of the voting power of all shares entitled to
vote at the meeting.
Section 4. Notice of Annual or Special Meeting. Written or printed
notice stating the place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than sixty (60) days before the date
of the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board or the Secretary, to each stockholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail, addressed to the stockholder at his or
her address as it appears on the records of the corporation, with postage
thereon prepaid.
Section 5. Business at Special Meeting. The business transacted at
any special meeting of the stockholders shall be limited to the purposes stated
in the notice thereof.
Section 6. Quorum of Stockholders. Unless otherwise provided in the
Certificate of Incorporation, the holders of a majority of the voting power of
all of the shares entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of the stockholders, but
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in no event shall a quorum consist of the holders of less than one-third (1/3)
of the shares entitled to vote and thus represented at such meeting. If,
however, a quorum shall not be present or represented at any meeting of the
stockholders, the stockholders present in person or represented by proxy shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 7. Act of Stockholders' Meeting. The vote of the holders of
a majority of the voting power of all of the shares entitled to vote and
represented in person or by proxy at a meeting at which a quorum is present
shall be the act of the stockholders' meeting, unless the vote of a greater
number is required by law or the Certificate of Incorporation.
Section 8. Voting of Shares. Each outstanding share shall be
entitled to the number of votes per share as provided in the Certificate of
Incorporation and the Certificate of Designation, if any, which relates to such
share, on each matter submitted to a vote at a meeting of the stockholders. At
each election of directors, every stockholder entitled to vote at such election
shall have the right to vote, in person or by proxy, the number of votes
allotted to the shares owned by him or her for as many persons as there are
directors to be elected and for whose election he or she has the right to vote.
Cumulative voting in the election of directors or otherwise is expressly
prohibited by the Certificate of Incorporation.
Section 9. Proxies. At any meeting of the stockholders, each
stockholder having the right to vote shall be entitled to vote either in person
or by proxy executed in writing by the stockholder or by his or her duly
authorized attorney-in-fact. Any such proxy shall be delivered to the secretary
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of such meeting at or prior to the time designated by the chairman of the
meeting or in the order of business for so delivering such proxies. No proxy
shall be voted or acted upon after three (3) years from its date, unless the
proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and unless otherwise made
irrevocable by law. Unless required by statute or determined by the chairman of
the meeting to be advisable, the vote on any question need not be by ballot. On
a vote by ballot, each ballot shall be signed by the stockholder voting or by
such stockholder's proxy, if there be such proxy.
Section 10. Voting List. The officer or agent having charge of the
stock ledger for shares of the corporation shall make, at least ten (10) days
before each meeting of the stockholders, a complete list of the stockholders
entitled to vote at such meeting or any adjournment thereof, arranged in
alphabetical order, with the address of and number of shares of each class or
series of the corporation's stock registered in the name of each stockholder,
which list, for a period of ten (10) days prior to such meeting, shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
at any time during the usual business hours, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or, if not so specified, at the place where the meeting is to be
held. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any stockholder during the
whole time of the meeting. The corporation shall be entitled to rely upon the
stock ledger as the only evidence as to who are the stockholders entitled to
examine the stock ledger, the aforementioned list of stockholders or the books
of the corporation, or to vote in person or by proxy at any such meeting of
stockholders.
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Section 11. Order of Business. Meetings of stockholders shall be
presided over by the Chairman of the Board, if any, or in his or her absence, by
the Vice Chairman of the Board, if any, or in his or her absence, by the Chief
Executive Officer, or in his or her absence, by the President or an Executive
Vice President or a Senior Vice President, or in the absence of the foregoing
persons, by a chairman designated by the Board of Directors. The Secretary shall
act as secretary of the meeting, but in the Secretary's absence the chairman of
the meeting may appoint any person to act as secretary of the meeting. The order
of business of each meeting of the stockholders of the corporation shall be
determined by the chairman of the meeting. The chairman of the meeting shall
have the right and authority to prescribe such rules, regulations, and
procedures and to do all such acts and things as are necessary or desirable for
the conduct of the meeting, including, without limitation, the establishment of
procedures for the dismissal of business not properly presented, the maintenance
of order and safety, limitations on the time allotted to questions or comments
on the affairs of the corporation, restrictions on entry to such meetings after
the time prescribed for commencement thereof, opening and closing of the voting
polls, and adjournment of such meetings.
Section 12. Notice of Stockholder Business. At an annual meeting of
the stockholders or, subject to Article II, Section 5 of these Bylaws, at a
special meeting of the stockholders, only such business shall be conducted as
shall have been brought before the meeting (a) by or at the direction of the
Chief Executive Officer or the Board of Directors or (b) by any stockholder of
the corporation entitled to vote at such annual or special meeting who complies
with the notice procedures set forth in this Section 12. For business to be
properly brought before an annual or special meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the corporation. To be timely, a stockholder's notice must be delivered to or
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mailed and received at the principal executive offices of the corporation, not
less than sixty (60) days nor more than ninety (90) days prior to the first
anniversary of the preceding year's annual meeting; provided, however, that in
the event that the date of the annual meeting is advanced by more than thirty
(30) days or delayed by more than thirty (30) days from such anniversary date,
then notice by the stockholder to be timely must be delivered not later than the
close of business on the later of the 60th day prior to the annual meeting or
the 10th day following the day on which the date of the meeting is publicly
announced. Such stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual or special meeting
(a) a brief description of the business desired to be brought before the annual
or special meeting and the reasons for conducting such business at the annual or
special meeting; (b) the name and address, as they appear on the corporation's
books, of such stockholder; (c) the class, series and number of shares of the
corporation which are beneficially owned by such stockholder; and (d) any
material interest of such stockholder in such business. Notwithstanding anything
in these Bylaws to the contrary, no business shall be conducted at an annual
meeting of the stockholders or, subject to Article II, Section 5 of these
Bylaws, at a special meeting except in accordance with the procedures set forth
in this Section 12. The chairman of an annual or special meeting shall, if the
facts warrant, determine that business was not properly brought before the
meeting and in accordance with the provisions of this Section 12, and if he or
she should so determine, he or she shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
Notwithstanding the foregoing provisions of this Section 12, a stockholder
seeking to have a proposal included in the corporation's proxy statement in
addition shall comply with the requirements of Regulation 14A
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under the Securities Exchange Act of 1934, as amended (including, but not
limited to, Rule 14a-8 or its successor provision).
Section 13. Notice of Stockholder Nominees. Only persons who are
nominated in accordance with the procedures set forth in these Bylaws shall be
eligible for election as directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of stockholders
(a) by or at the direction of the Chief Executive Officer or the Board of
Directors or (b) by any stockholder of the corporation entitled to vote for the
election of directors at the meeting who complies with the notice procedures set
forth in this Section 13. Nominations by stockholders shall be made pursuant to
timely notice in writing to the Secretary of the corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the corporation not less than sixty (60) days nor
more than ninety (90) days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that the date of the
annual meeting is advanced by more than thirty (30) days or delayed by more than
thirty (30) days from such anniversary date, then notice by the stockholder to
be timely must be delivered not later than the close of business on the later of
the 60th day prior to the annual meeting or the 10th day following the day on
which the date of the meeting is publicly announced. Such stockholder's notice
shall set forth (a) as to each person whom the stockholder proposes to nominate
for election or re-election as a director, all information relating to such
person that is required to be disclosed in solicitations of proxies for election
of directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (including such person's
written consent to being named in a proxy statement as a nominee and to serving
as a director if elected); and (b) as to the stockholder giving the notice (i)
the name and
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address, as they appear on the corporation's books, of such stockholder and (ii)
the class, series and number of shares of the corporation which are beneficially
owned by such stockholder. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director of the corporation unless nominated
in accordance with the procedures set forth in these Bylaws. The chairman of the
meeting shall, if the facts warrant, determine that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, and if he or she
should so determine, he or she shall so declare to the meeting and the defective
nomination shall not be admitted.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. The business and affairs of the corporation
shall be managed by its Board of Directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute,
the Certificate of Incorporation or by these Bylaws directed or required to be
exercised and done by the stockholders.
Section 2. Number of Directors. The number of directors of the
corporation constituting the Board of Directors shall be not less than nine (9)
nor more than eighteen (18), determined from time to time in accordance with
these Bylaws by resolution of the Board of Directors or of the stockholders.
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Section 3. Election and Term. The directors shall be classified
with respect to the time for which they shall severally hold office by dividing
them into three (3) classes, each consisting of approximately one-third (1/3) of
the whole number of the Board of Directors, and each director of the corporation
shall hold office until his or her successor is elected and qualified or until
his or her death, resignation, or removal. Each class of directors shall be as
nearly equal in number of directors as possible and shall be denominated in such
manner as the Board of Directors may determine. The term of office of those of
the first class will expire at the first annual meeting of stockholders after
adoption of this Bylaw provision; of the second class one year thereafter; of
the third class two years thereafter; and at each annual election held after
such classification and election, the successors to the class of directors whose
terms shall expire that year shall be elected to hold office for a term of three
(3) years, so that the term of office for one class of directors shall expire in
each year. Directors need not be residents of the State of Delaware or
stockholders of the corporation.
Notwithstanding the foregoing, no person shall be eligible to stand
for election as director if he or she has attained the age of 70 years.
Furthermore, the term of any director elected, reelected or named to the Board
of Directors after the 1998 Annual Meeting of Stockholders shall terminate at
the first annual meeting of stockholders following the date on which such
director attains the age of 70 years. Notwithstanding anything else in these
Bylaws, the term of any director elected, reelected or named to the Board of
Directors after the 1998 Annual Meeting of Stockholders who was an officer or
other employee of the corporation (or of a subsidiary of or other entity
controlled by the corporation) at the time he or she was last elected, reelected
or named to serve as a director, other than any person who at such time was
serving as Chief Executive Officer of the corporation, shall automatically
terminate at the first annual meeting of stockholders following the date on
which
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such director ceases to serve as an officer or other employee of the corporation
(or of a subsidiary of or other entity controlled by the corporation).
Section 4. Vacancies. Any vacancies occurring in the Board of
Directors and any newly created directorships resulting from any increase in the
authorized number of directors may be filled by the affirmative vote of a
majority of the remaining directors although less than a quorum of the Board of
Directors. A director elected to fill a vacancy shall be elected for the
unexpired term of his or her predecessor in office. Any directorship to be
filled by reason of an increase in the number of directors may be filled by the
affirmative vote of a majority of the directors, subject to the applicable
provisions then in effect of the Delaware General Corporation Law pertaining
thereto. A director elected to fill a newly created directorship shall hold
office until his or her successor is elected and qualified or until his or her
death, resignation, or removal.
Section 5. Resignation and Removal. Any director may resign at any
time upon giving written notice to the corporation. At any meeting of
stockholders called expressly for the purpose of removing a director or
directors, any director or the entire Board of Directors may be removed, but for
cause only (removal of directors without cause being expressly prohibited), by a
vote of the holders of a majority of the voting power of all of the shares then
entitled to vote at an election of directors.
Section 6. Compensation of Directors. As specifically prescribed
from time to time by resolution of the Board of Directors, the directors of the
corporation may be paid their expenses of attendance at each meeting of the
Board and may be paid reasonable compensation for their services as directors.
This provision shall not preclude any director from serving the corporation in
any other
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capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for their services in such
capacities.
ARTICLE IV
MEETINGS OF THE BOARD
Section 1. Regular Meetings. Regular meetings of the Board of
Directors may be held with or without notice at such time and at such place
either within or without the State of Delaware as from time to time shall be
prescribed by resolution of the Board of Directors.
Section 2. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the Chief Executive
Officer or the Secretary on the written request of two directors. Written notice
of special meetings of the Board of Directors shall be given to each director at
least three (3) days before the date of the meeting.
Section 3. Business at Regular or Special Meeting. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
Section 4. Quorum of Directors. A majority of the Board of
Directors shall constitute a quorum for the transaction of business, unless a
greater number is required by law or the Certificate of Incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement of the meeting, until a quorum shall be present.
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Section 5. Act of Directors' Meeting. The vote of a majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors, unless the vote of a greater number is required by law
or the Certificate of Incorporation.
Section 6. Action by Written Consent Without a Meeting. Any action
required or permitted to be taken at a meeting of the Board of Directors or of
any committee thereof under the applicable provisions of any statute, the
Certificate of Incorporation or these Bylaws may be taken without a meeting if a
consent in writing setting forth the action so taken is signed by all members of
the Board of Directors or of the committee, as the case may be. Such consent
shall have the same force and effect as a unanimous vote of the Board of
Directors or of the committee, as the case may be.
ARTICLE V
COMMITTEES
The Board of Directors, by resolution adopted by a majority of the
full Board of Directors, may designate from among its members an executive
committee and one or more other committees, each of which, to the extent
provided in such resolution, the Certificate of Incorporation or these Bylaws,
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers which may
require it, except that no such committee shall have the power or authority of
the Board of Directors in reference to amending the Certificate of Incorporation
(except as permitted by the Delaware General Corporation Law), adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease, or exchange
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of all or substantially all of the property and assets of the corporation
otherwise than in the usual and regular course of its business, recommending to
the stockholders a voluntary dissolution of the corporation or a revocation
thereof, amending, altering, or repealing the Bylaws of the corporation or
adopting new Bylaws for the corporation, filling vacancies in or removing
members of the Board of Directors or any such committee, fixing the compensation
of any member of such committee, or altering or repealing any resolution of the
Board of Directors which by its terms provides that it shall not be so amendable
or repealable. Unless such resolution, the Certificate of Incorporation or these
Bylaws so provides, no such committee shall have the power or authority to
declare a dividend, to authorize the issuance of shares of the corporation, or
to adopt a certificate of ownership and merger pursuant to Section 253 of the
Delaware General Corporation Law. Vacancies in the membership of any such
committee shall be filled by resolution adopted by the majority of the full
Board of Directors at a regular or special meeting of the Board. The designation
of any such committee and the delegation thereto of authority shall not operate
to relieve the Board of Directors, or any member thereof, of any responsibility
imposed upon it or him or her by law.
Any executive committee designated by the Board of Directors shall consist of
the Chief Executive Officer and such number (not less than two (2)) of other
directors as the Board may from time to time determine by resolution adopted by
the majority of the full Board of Directors, one of the members of which
committee shall be designated the chairman thereof by the Board of Directors.
The executive committee may make rules for the conduct of its business, not
inconsistent with this Article V, as it shall from time to time deem necessary
and shall keep regular minutes of its proceedings and report the same to the
Board when required. A majority of the members of the executive committee shall
constitute a quorum for the transaction of business. If a quorum is not
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present at a meeting, the members present may adjourn the meeting until a quorum
is present. The act of a majority of the members present at any meeting at which
a quorum is present shall be the act of the executive committee, except as
otherwise specifically provided by statute, the Certificate of Incorporation or
the Bylaws of the corporation. Any member of the executive committee may be
removed by the Board of Directors by the affirmative vote of a majority of the
full Board, whenever in its judgment the best interests of the corporation will
be served thereby.
ARTICLE VI
NOTICES
Section 1. Methods of Giving Notice. Whenever any notice is
required to be given to any stockholder or director under the provisions of any
statute, the Certificate of Incorporation or these Bylaws, it shall be given in
writing and delivered personally or mailed to such stockholder or director at
such address as appears on the books of the corporation, and such notice shall
be deemed to be given at the time the same shall be deposited in the United
States mail with sufficient postage thereon prepaid. Notice to directors may
also be given by telegram, telex, telecopy or similar means of visual data
transmission, and notice given by any of such means shall be deemed to be
delivered when transmitted for delivery to the recipient.
Section 2. Waiver of Notice. Whenever any notice is required to be
given to any stockholder or director under the provisions of any statute, the
Certificate of Incorporation or these Bylaws, a waiver thereof in writing signed
(either in advance or after the fact) by the person or persons entitled to said
notice shall be deemed equivalent to the giving of such notice.
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Section 3. Attendance as Waiver. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the ground that
the meeting is not lawfully called or convened.
ARTICLE VII
ACTION WITHOUT A MEETING BY USE OF A
CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT
Subject to the provisions required or permitted for notice of
meetings, unless otherwise restricted by the Certificate of Incorporation or
these Bylaws, stockholders, members of the Board of Directors or members of any
committee designated by such Board may participate in and hold a meeting of such
stockholders, Board or committee by conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in such a meeting shall
constitute presence in person at such meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
ARTICLE VIII
OFFICERS
Section 1. Executive Officers. The officers of the corporation
shall consist of a Chairman of the Board, a Chief Executive Officer, a
President, one or more Vice Presidents (with such supplemental designation to
indicate seniority or scope of duties as the Board of Directors may
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determine from time to time), a Secretary, and a Treasurer, each of whom shall
be elected by the Board of Directors as provided in Section 2 of this Article;
provided that any of such offices except President, Secretary and Treasurer may
be allowed to become vacant by failure of the Board of Directors to fill the
office. Any two or more offices may be held by the same person, except that the
Chairman of the Board or the President and the Secretary shall not be the same
person.
Section 2. Election and Qualification. The Board of Directors shall
annually choose (subject to the provisions of Section 1 of this Article) a
Chairman of the Board, a Chief Executive Officer, a President, such Executive
Vice Presidents and Senior Vice Presidents as the Board shall deem necessary, a
Secretary, and a Treasurer, none of whom, except the Chairman of the Board, the
Chief Executive Officer and the President need to be a member of the Board.
Section 3. Division Officers. The Board of Directors may from time
to time establish one or more divisions of the corporation and assign to such
divisions responsibilities for such of the corporation's business, operations
and affairs as the Board may designate. The Board of Directors may appoint or
authorize an officer of the corporation to appoint in writing officers of a
division. Unless elected or appointed an officer of the corporation by the Board
of Directors or pursuant to authority granted by the Board, an officer of a
division shall not as such be an officer of the corporation, except that he or
she shall be an officer of the corporation for the purposes of executing and
delivering documents on behalf of the corporation or for other specific
purposes, if and to the extent that he or she may be authorized to do so by the
Board of Directors. Unless otherwise provided in the writing appointing an
officer of a division, such officer shall hold office until his or her successor
is appointed and qualified. Any officer of a division may be removed with or
without cause by the Board of Directors or by the officer, if any, of the
corporation then authorized by the
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Board of Directors to appoint such officer of a division. The Board of Directors
may prescribe or authorize an officer of the corporation or an officer of a
division to prescribe in writing the duties and powers and authority of officers
of divisions and may authorize an officer of the corporation or an officer of a
division to determine the compensation for officers of divisions.
Section 4. Other Officers and Agents. The Board of Directors may
elect or appoint such Vice Presidents, other officers, assistant officers and
agents as the Board may deem necessary, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board.
Section 5. Salaries. Subject to the provisions of Section 3 of this
Article, the compensation of all officers and agents of the corporation shall be
determined by the Board of Directors.
Section 6. Term, Removal and Vacancies. Each officer of the
corporation shall hold office until his or her successor is elected and
qualified, or until his or her earlier death, resignation or removal. Any
officer may resign at any time upon giving written notice to the corporation.
Any officer or agent or member of the executive committee elected or appointed
by the Board of Directors may be removed by the Board of Directors whenever in
its judgment the best interests of the corporation will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent shall not of
itself create contract rights. Any vacancy occurring in any office of the
corporation by death, resignation, removal or otherwise shall be filled (subject
to the provisions of Sections 1 and 3 of this Article) by the Board of
Directors.
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Section 7. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors and
shall have such other powers and duties as usually pertain to such office or as
may be prescribed by the Board of Directors.
Section 8. Chief Executive Officer. The Board of Directors may
designate whether the Chairman of the Board or the President shall be the Chief
Executive Officer of the corporation. The officer so designated as the Chief
Executive Officer shall have general powers of oversight, supervision and
management of the business and affairs of the corporation, and shall see that
all orders and resolutions of the Board of Directors are carried into effect. He
or she shall execute bonds, mortgages and other contracts requiring a seal under
the seal of the corporation, except where required or permitted by law to be
otherwise signed and executed, and except where the signing and execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the corporation. The Chief Executive Officer shall have such
other powers and duties as usually pertain to such office or as may be
prescribed by the Board of Directors. If a Chief Executive Officer is not
otherwise designated by the Board of Directors, the Chairman of the Board shall
be the Chief Executive Officer of the corporation.
Section 9. President. The President, in the absence or disability
of the Chairman of the Board, shall perform the duties and exercise the powers
of the Chairman of the Board. The President shall perform such other duties and
exercise such other powers as usually pertain to such office or as may be
delegated from time to time by the Board of Directors.
Section 10. Vice Presidents. Unless otherwise determined by the
Board of Directors, the Vice Presidents, in the order of their seniority as such
seniority may from time to time be designated by the Board of Directors, shall
perform the duties and exercise the powers of the President in the
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<PAGE> 23
absence or disability of the President. They shall perform such other duties and
have such other powers as the Board of Directors may from time to time
prescribe.
Section 11. Secretary. The Secretary shall attend all meetings of
the Board of Directors and all meetings of the stockholders, and shall record
all the proceedings of the meetings of the corporation and of the Board of
Directors in a book to be kept for that purpose, and shall perform like duties
for the standing committees when required. He or she shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors. He or she shall keep in safe custody the seal of the
corporation, and, when authorized by the Board of Directors, affix the same to
any instrument requiring it. When so affixed, such seal shall be attested by his
or her signature or by the signature of the Treasurer or an Assistant Secretary.
Section 12. Assistant Secretaries. Unless otherwise determined by
the Board of Directors, the Assistant Secretaries, in the order of their
seniority as such seniority may from time to time be designated by the Board of
Directors, shall perform the duties and exercise the powers of the Secretary in
the absence or disability of the Secretary. They shall perform such other duties
and have such other powers as the Board of Directors may from time to time
prescribe.
Section 13. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation, and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He or she shall disburse the funds of the corporation as may be
ordered by the Board of Directors,
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<PAGE> 24
taking proper vouchers for such disbursements, and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
Section 14. Assistant Treasurers. Unless otherwise determined by
the Board of Directors, the Assistant Treasurers, in the order of their
seniority as such seniority may from time to time be designated by the Board of
Directors, shall perform the duties and exercise the powers of the Treasurer in
the absence or disability of the Treasurer. They shall perform such other duties
and have such other powers as the Board of Directors may from time to time
prescribe.
Section 15. Officers' Bond. If required by the Board of Directors,
any officer so required shall give the corporation a bond (which shall be
renewed as the Board may require) in such sum and with such surety or sureties
as shall be satisfactory to the Board of Directors for the faithful performance
of the duties of his or her office and for the restoration to the corporation,
in case of his or her death, resignation, retirement or removal from office, of
any and all books, papers, vouchers, money and other property of whatever kind
in his or her possession or under his or her control belonging to the
corporation.
ARTICLE IX
CERTIFICATES FOR SHARES
Section 1. Certificates Representing Shares. The corporation shall
deliver certificates representing all shares to which stockholders are entitled.
Such certificates shall be numbered and shall be entered in the books of the
corporation as they are issued, and shall be signed by the Chairman of the
Board, the President or a Vice President, and the Secretary or an Assistant
Secretary of the corporation, and may be sealed with the seal of the corporation
or a facsimile thereof. The
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<PAGE> 25
signatures of the Chairman of the Board, the President or Vice President,
Secretary or Assistant Secretary, upon a certificate may be facsimiles, if the
certificate is countersigned by a transfer agent or registered by a registrar,
either of which is other than the corporation itself or an employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the corporation with the same
effect as if he or she were such officer at the date of its issuance. If the
corporation is authorized to issue shares of more than one class of stock or
more than one series of any class, there shall be set forth upon the face or
back of the certificate, or the certificate shall have a statement that the
corporation will furnish to any stockholder upon request and without charge, a
full statement of all of the powers, designations, preferences, and rights of
the shares of each class authorized to be issued and the qualifications,
limitations or restrictions thereof, and, if the corporation is authorized to
issue any preferred or special class in series, the variations in the relative
rights and preferences between the shares of each such series so far as the same
have been fixed and determined, and the authority of the Board of Directors to
fix and determine the relative rights and preferences of subsequent series. Each
certificate representing shares shall state upon the face thereof that the
corporation is organized under the laws of the State of Delaware, the name of
the person to whom issued, the number and the class and the designation of the
series, if any, which such certificate represents and the par value of each
share represented by such certificate or a statement that the shares are without
par value. No certificate shall be issued for any share until the consideration
therefor has been fully paid.
Section 2. Transfer of Shares. Subject to the provisions of Section
5 of this Article IX and the provisions of Section 2 of Article Four of the
Certificate of Incorporation, upon surrender
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<PAGE> 26
to the corporation or the transfer agent of the corporation of a certificate for
shares duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate, and
record the transaction upon its books.
Section 3. Lost, Stolen or Destroyed Certificate. The Board of
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed upon the making of an affidavit of that fact
by the person claiming the certificate to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost, stolen or destroyed certificate or
certificates, or his or her legal representative, to advertise the same in such
manner as it shall require and/or to give the corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.
Section 4. Closing of Stock Ledger and Fixing Record Date. For the
purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend, or in order to make a determination of stockholders for
any other proper purpose, the Board of Directors may provide that the stock
ledger shall be closed for a stated period but not to exceed, in any case, sixty
(60) days. If the stock ledger shall be closed for the purpose of determining
stockholders entitled to notice of or to vote at a meeting of stockholders, such
ledger shall be closed for at least ten (10) days immediately preceding such
meeting. In lieu of closing the stock ledger, the Board of Directors may
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<PAGE> 27
fix in advance a date as the record date for any such determination of
stockholders, such date in any case to be not more than sixty (60) days, and, in
case of a meeting of stockholders, not less than ten (10) days, prior to the
date on which the particular action requiring such determination of stockholders
is to be taken. If the stock ledger is not closed and no record date is fixed
for the determination of stockholders entitled to notice of or to vote at a
meeting of stockholders, or stockholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
stockholders. When a determination of stockholders entitled to vote at any
meeting of stockholders has been made as provided in this Section 4, such
determination shall apply to any adjournment thereof, except where the
determination has been made through the closing of the stock ledger and the
stated period of closing has expired.
Section 5. Foreign Share Ownership. As used in these Bylaws, the
word "Alien" shall include any individual not a citizen of the United States of
America and any representative of any such individual; any corporation or other
entity organized under the laws of any foreign government; any foreign
government, its agencies or representatives; any partnership of which any
partner is an alien, except for limited partners insulated in accordance with
the rules and regulations of the Federal Communications Commission; any
corporation or other entity controlled directly or indirectly by other than
United States citizens; and any other entity or individual determined to be an
alien under Section 310 of the Communications Act of 1934, as amended, or the
rules and regulations of the Federal Communications Commission.
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<PAGE> 28
At no time shall Aliens (i) own, directly or indirectly, more than
one-fourth of the equity in the corporation, or in any other corporation
directly or indirectly controlling the corporation, that is represented by the
issued and outstanding capital stock of such corporation; or (ii) vote, directly
or indirectly, more than one-fourth of the total voting rights in the
corporation, or in any other corporation directly or indirectly controlling the
corporation, that are represented by the issued and outstanding capital stock of
such corporation. The percentage of voting rights and equity ownership of Aliens
in the corporation's issued and outstanding capital stock shall be determined in
accordance with the Communications Act of 1934, as amended, and the rules and
regulations of the Federal Communications Commission, taking into account direct
and indirect equity interests and direct and indirect voting rights in the
corporation as may be required. As used in these Bylaws, a "Noncompliance
Status" means the existence of circumstances in which, but for the following
provisions of this Section 5, Aliens would own or hold voting rights or
interests in the corporation in excess of the thresholds set forth in this
paragraph.
In the event a Noncompliance Status shall arise, then, so long as
the Noncompliance Status continues to exist, those stockholders causing or
contributing to the Noncompliance Status shall have no voting, dividend, or
other rights with respect to the shares of the corporation that they may hold,
except the right to transfer such shares in such a manner that the Noncompliance
Status will cease to exist. No transfers of shares of domestic record to Aliens
shall be made if a Noncompliance Status exists or if such transfer would result
in a Noncompliance Status. If the corporation shall determine that stock of
domestic record in fact is held or voted, in whole or in part, by or for the
account of an Alien, and that such interest, but for this Section 5, would give
rise to a Noncompliance Status, the holder of such stock shall not be entitled
to vote, to receive dividends,
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<PAGE> 29
or to exercise any other normal stockholder rights, except the right to transfer
such stock to a citizen of the United States of America.
Alien voting and equity interests and rights in stock of the
corporation and the citizenship of transferees of the corporation's stock shall
be determined in conformity with regulations prescribed by or upon the approval
of the Board of Directors, which shall not be less restrictive than the
requirements imposed by the Communications Act of 1934, as amended, and the
rules and regulations of the Federal Communications Commission. The Board of
Directors shall be authorized, at any time and from time to time, to adopt such
other provisions as the directors may deem necessary or desirable to avoid
violation of the provisions of Section 310 of the Communications Act of 1934 as
now in effect or as it may hereafter from time to time be amended, and to carry
out the provisions of this Section 5.
Section 6. Registered Stockholders. The corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of the
State of Delaware.
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<PAGE> 30
ARTICLE X
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors from time to time may
declare, and the corporation may pay, dividends on its outstanding shares in
cash, property, or its own shares pursuant to law and subject to the provisions
of the Certificate of Incorporation and these Bylaws.
Section 2. Reserves. The Board of Directors may by resolution
create a reserve or reserves out of earned surplus for any proper purpose or
purposes, and may abolish any such reserve in the same manner.
Section 3. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors from time to time may designate.
Section 4. Fiscal Year. The fiscal year of the corporation shall be
the calendar year.
Section 5. Seal. The corporate seal shall have inscribed thereon
the name of the corporation and may be used by causing it or a facsimile thereof
to be impressed or affixed or in any other manner reproduced.
ARTICLE XI
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. Actions, Suits, or Proceedings Other Than by or in the
Right of the Corporation. The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
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<PAGE> 31
by reason of the fact that he or she is or was or has agreed to become a
director, officer, employee or agent of the corporation, or is or was serving or
has agreed to serve at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against costs, charges, expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her or on his or her behalf in connection with such action,
suit or proceeding and any appeal therefrom, if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
Section 2. Actions or Suits by or in the Right of the Corporation.
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she is or was or has agreed to become a director,
officer, employee or agent of the corporation, or is or was serving or has
agreed to serve at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted
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<PAGE> 32
in such capacity, against costs, charges and expenses (including attorneys'
fees) actually and reasonably incurred by him or her or on his or her behalf in
connection with the defense or settlement of such action or suit and any appeal
therefrom, if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of such liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such costs, charges and expenses which the Court of Chancery or
such other court shall deem proper.
Section 3. Indemnification for Costs, Charges, and Expenses of
Successful Party. Notwithstanding the other provisions of this Article XI, to
the extent that a director, officer, employee or agent of the corporation has
been successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit or
proceeding referred to in Sections 1 and 2 of this Article, or in defense of any
claim, issue or matter therein, he or she shall be indemnified against all
costs, charges and expenses (including attorneys' fees) actually and reasonably
incurred by him or her or on his or her behalf in connection therewith.
Section 4. Determination of Right to Indemnification. Any
indemnification under Sections 1 and 2 of this Article XI (unless ordered by a
court) shall be paid by the corporation unless a determination is made (1) by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or (2) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal
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<PAGE> 33
counsel in a written opinion, or (3) by the vote of the holders of a majority of
the voting power of all of the shares entitled to vote thereon, that
indemnification of the director, officer, employee or agent is not proper in the
circumstances because he or she has not met the applicable standard of conduct
set forth in Sections 1 and 2 of this Article.
Section 5. Advance of Costs, Charges and Expenses. Costs, charges
and expenses (including attorneys' fees) incurred by a person referred to in
Sections 1 and 2 of this Article in defending a civil or criminal action, suit
or proceeding shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding, unless such action, suit or
proceeding was authorized against an officer or director of the corporation by a
majority of the directors not named as defendants therein, in which case such
costs, charges and expenses may be paid by the corporation in advance if
authorized by a majority of the directors not named as defendants therein;
provided further, however, that the payment of such costs, charges and expenses
incurred by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer) in advance of the final disposition of
such action, suit or proceeding shall be made only upon receipt of an
undertaking by or on behalf of the director or officer to repay all amounts so
advanced in the event that it shall ultimately be determined that such director
or officer is not entitled to be indemnified by the corporation as authorized in
this Article XI. Such costs, charges and expenses incurred by other employees
and agents may be so paid upon such terms and conditions, if any, as the Board
of Directors deems appropriate. The Board of Directors may, in the manner set
forth above, and upon approval of such director, officer, employee or agent of
the corporation, authorize the corporation's counsel to
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<PAGE> 34
represent such person, in any action, suit or proceeding, whether or not the
corporation is a party to such action, suit or proceeding.
Section 6. Procedure for Indemnification. Any indemnification under
Sections 1, 2 and 3, or advance of costs, charges and expenses under Section 5
of this Article, shall be made promptly, and in any event within sixty (60)
days, upon the written request of the director, officer, employee or agent. The
right to indemnification or advances as granted by this Article XI shall be
enforceable by the director, officer, employee or agent in any court of
competent jurisdiction, if the corporation denies such request, in whole or in
part, or if no disposition thereof is made within sixty (60) days. Such person's
costs and expenses incurred in connection with successfully establishing his or
her right to indemnification, in whole or in part, in any such action shall also
be indemnified by the corporation. It shall be a defense to any such action
(other than an action brought to enforce a claim for the advance of costs,
charges and expenses under Section 5 of this Article XI where the required
undertaking, if any, has been received by the corporation) that the claimant has
not met the standard of conduct set forth in Sections 1 or 2 of this Article,
but the burden of proving such defense shall be on the corporation. Neither the
failure of the corporation (including its Board of Directors, its independent
legal counsel, and its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in Sections 1 or 2 of this Article, nor the fact that there has been
an actual determination by the corporation (including its Board of Directors,
its independent legal counsel, and its stockholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
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<PAGE> 35
Section 7. Other Rights; Continuation of Right to Indemnification.
The indemnification and advancement of costs, charges and expenses provided by
this Article XI shall not be deemed exclusive of any other rights to which a
person seeking indemnification or advancement of costs, charges and expenses may
be entitled under any law (common or statutory), other Bylaw provision,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his or her official capacity and as to action in another capacity
while holding office or while employed by or acting as agent for the
corporation, and shall continue as to a person who has ceased to be a director,
officer, employee or agent as to actions taken while he or she was such a
director, officer, employee or agent, and shall inure to the benefit of the
estate, heirs, executors and administrators of such person. All rights to
indemnification under this Article shall be deemed to be a contract between the
corporation and each director, officer, employee or agent of the corporation who
serves or served in such capacity at any time while this Article is in effect.
Any repeal or modification of this Article or any repeal or modification of
relevant provisions of the Delaware General Corporation Law or any other
applicable laws shall not in any way diminish any rights to indemnification of
such director, officer, employee or agent or the obligations of the corporation
arising hereunder.
Section 8. Extent of Indemnification. In addition to the specific
indemnification provided for herein, the corporation shall indemnify each person
who is or was or has agreed to become a director, officer, employee or agent of
the corporation, or is or was serving or has agreed to serve at the request of
the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, to the
fullest extent authorized or permitted (i) by the General Corporation Law of
Delaware, or any other applicable law, or by any amendment thereof or other
statutory provisions in effect on the date hereof, or (ii) by the corporation's
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<PAGE> 36
Certificate of Incorporation as in effect on the date hereof. Subject to the
exceptions and conditions set forth in Article XI, Section 2 of these Bylaws,
the corporation shall also advance expenses to any of the foregoing individuals
to the fullest extent authorized or permitted (i) by the General Corporation Law
of Delaware, or any other applicable law, or by any amendment thereof or other
statutory provision in effect on the date hereof, or (ii) by the corporation's
Certificate of Incorporation as in effect on the date hereof.
Section 9. Insurance. Notwithstanding the foregoing, the
corporation shall have the power to purchase and maintain insurance on behalf of
any person who is or was or has agreed to become a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him or her and incurred by him or her or on his or her behalf
in any such capacity, or arising out of his or her status as such, whether or
not the corporation would have the power to indemnify him or her against such
liability under the provisions of this Article.
Section 10. Savings Clause. If this Article XI or any portion
hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the corporation shall nevertheless indemnify each director,
officer, employee and agent of the corporation as to costs, charges and expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil, criminal,
administrative or investigative, including an action by or in the right of the
corporation, to the full extent permitted by any applicable portion of this
Article XI that shall not have been invalidated and to the full extent permitted
by applicable law.
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<PAGE> 37
ARTICLE XII
AMENDMENTS
The initial Bylaws of the corporation shall be adopted by the Board
of Directors. The power to alter, amend, or repeal the Bylaws or adopt new
Bylaws, subject to repeal or change by action of the stockholders, is vested in
the Board of Directors. Thus, these Bylaws may be altered, amended, or repealed
or new Bylaws may be adopted by the affirmative vote of a majority of the Board
of Directors at any regular or special meeting of the Board, subject to repeal
or change at any regular or special meeting of stockholders at which a quorum is
present or represented by the affirmative vote of not less than two-thirds of
the voting power of all of the shares entitled to vote at such meeting, voting
together as a single class, and present or represented thereat, provided notice
of the proposed repeal or change is contained in the notice of such meeting of
stockholders.
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<PAGE> 1
EXHIBIT 12
A. H. BELO CORPORATION
Computation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
---------------------------------------------------- -------------------
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings before income taxes
and the cumulative effect
of accounting changes $ 75,578 $107,897 $111,014 $144,040 $154,122 $111,650 $102,704
Add: Total fixed charges 18,792 17,294 32,089 29,009 94,069 65,833 84,062
Less: Interest capitalized 1,961 138 957 255 510 432 273
-------- -------- -------- -------- -------- -------- --------
Adjusted earnings $ 92,409 $125,053 $142,146 $172,794 $247,681 $177,051 $186,493
======== ======== ======== ======== ======== ======== ========
Fixed Charges:
Interest $ 16,976 $ 16,250 $ 30,944 $ 27,898 $ 91,288 $ 63,656 $ 81,994
Portion of rental expense
representative of the
interest factor (1) 1,816 1,044 1,145 1,111 2,781 2,177 2,068
-------- -------- -------- -------- -------- -------- --------
Total fixed charges $ 18,792 $ 17,294 $ 32,089 $ 29,009 $ 94,069 $ 65,833 $ 84,062
======== ======== ======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges x 4.92 x 7.23 x 4.43 x 5.96 x 2.63 2.69 x 2.22 x
======== ======== ======== ======== ======== ======== ========
</TABLE>
- --------------------------------------
(1) For purposes of calculating fixed charges, an interest factor of one third
was applied to total rent expense for the period indicated.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 18,702
<SECURITIES> 0
<RECEIVABLES> 194,796
<ALLOWANCES> (7,837)
<INVENTORY> 20,890
<CURRENT-ASSETS> 254,506
<PP&E> 1,038,671
<DEPRECIATION> (419,914)
<TOTAL-ASSETS> 3,541,903
<CURRENT-LIABILITIES> 173,157
<BONDS> 1,600,020
0
0
<COMMON> 203,636
<OTHER-SE> 1,088,416
<TOTAL-LIABILITY-AND-EQUITY> 3,541,903
<SALES> 0
<TOTAL-REVENUES> 1,028,348
<CGS> 0
<TOTAL-COSTS> 726,663
<OTHER-EXPENSES> 119,737
<LOSS-PROVISION> 4,701
<INTEREST-EXPENSE> (81,721)
<INCOME-PRETAX> 102,704
<INCOME-TAX> 49,539
<INCOME-CONTINUING> 53,165
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,165
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.42
</TABLE>
