UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Name of Issuer: MULTICOM PUBLISHING, INC.
Title of Class of Securities: Common stock, par value $.01 per share
CUSIP Number: 625437 10 8
Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications:
Thomas L. Slaughter
Vice President-General Counsel and Secretary
Meredith Corporation
1716 Locust Street
Des Moines, Iowa 50309-3023
(515) 284-3056
Date of Event which Requires Filing of this Statement: June 28, 1996
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with the
statement [X]. (A fee is not required only if the reporting person: (1) has
a previous statement on file reporting beneficial ownership of more than five
percent of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five percent or
less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other parties to
whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
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The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
1. NAME OF REPORTING PERSON: Meredith Corporation
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 42-0410230
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS: PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2 (E) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION: Iowa
NUMBER OF 7. SOLE VOTING POWER: 1,154,937 *
SHARES
BENEFICIALLY 8. SHARED VOTING POWER: - 0 -
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER: 1,154,937 *
REPORTING
PERSON 10. SHARED DISPOSITIVE POWER: - 0 -
WITH
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 1,154,937 *
* Does not include shares accrued as interest but not yet issued, and
which will be issued quarterly under an Issuer promissory note dated July 31,
1995, nor anti-dilution rights which grant Meredith Corporation the right to
purchase a proportionate number of shares when certain employee options and
other warrants are exercised. The purchase price in each case is the same
price per share as the affected employee options and other warrants. The
exercise prices range from $.25 per share to $6.07 per share. The anti-
dilution right expires on the date (a) the affected employee option or other
warrant expires without exercise, or (b) ten days after Meredith has received
notice of the exercise of the affected employee option or other warrant.
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 20.9%
14. TYPE OF REPORTING PERSON: CO
Item 1. Security and Issuer.
This statement relates to the common stock of Multicom Publishing, Inc.,
(hereinafter "Multicom").
The executive officers of Multicom and their business addresses are:
Tamara L. Attard, Chief Executive Officer and Chairman of the Board,
188 Embarcadero, 5th Floor, San Francisco, CA 94105
Paul G. Attard, President, Chief Operating Officer and Director,
188 Embarcadero, 5th Floor, San Francisco, CA 94105
Ellen R. M. Boyer, Vice President of Finance and Administration and
Chief Financial Officer,
1100 Olive Way, Suite 1250, Seattle, WA 98101
Edward J. Cummings, Vice President of Licensing and Legal Affairs,
1100 Olive Way, Suite 1250, Seattle, WA 98101
Item 2. Identity and Background.
Meredith Corporation (hereinafter "Meredith") is an Iowa corporation with
its principal offices at 1716 Locust Street, Des Moines, Iowa 50309-3023.
Meredith is a media company and operates businesses in magazine and book
publishing, television broadcasting, residential real estate marketing and
franchising, and brand licensing.
During the last five years, Meredith has not been convicted in any
criminal proceedings (excluding traffic violations or similar misdemeanors).
During the last five years, Meredith was not a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
thereof was not or is not subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
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The name, residence or business address, principal occupation or
employment and citizenship of each of the executive officers and directors of
Meredith are set forth in Schedule A hereto.
Within the past five years, none of the persons named in this Item 2 or
listed on Schedule A has been convicted in any criminal proceeding (excluding
traffic violations or similar misdemeanors) or has been a party to any civil
proceeding and as a result thereof was or is subject to any judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Meredith made the purchase of the common stock of Multicom which is the
subject of this filing from the personal funds of the company, in the following
manner. (All references to number of shares and share price have been adjusted
to recognize an earlier five-for-one split and a four-for-five reverse split).
In July 1995 Multicom completed a private financing under which Meredith
loaned Multicom $2,000,000 to fund Multicom operations. The terms of the loan
called for interest to be payable in common stock and for principal to be paid
quarterly based upon an established formula. The subordinated rate bears
interest at 15% and was convertible to common stock at a conversion price of
$6.07 per share.
Effective with the closing of Multicom's initial public offering, which
occurred June 28, 1996, Meredith exercised its conversion option by canceling
$1,500,000 of the note to purchase 247,219 shares of Multicom common stock.
The funds used for the July 1995 loan to Multicom were Meredith's personal
funds.
Meredith purchased Multicom shares in a previous non-reportable
transaction. On June 4, 1994, Multicom issued Meredith an aggregate of 824,000
shares of its Series B common stock in a private venture funding. The purchase
price was paid in a combination of cash and unearned royalties owing on
products created by Multicom under license from Meredith, including future
royalties from anticipated future products. The Series B shares were converted
into Multicom common stock with the closing of the Multicom initial public
offering.
The funds used by Meredith to purchase the shares in June 1994 were
Meredith's personal funds.
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Meredith may acquire additional shares of the common stock of Multicom
through interest payments on the balance of the indebtedness, as set out above,
and through the exercise of certain antidilution rights. (See discussion under
Item 4(a) below.)
Larry D. Hartsook, Meredith's Vice President - Finance and a Multicom
director, may acquire additional shares of Multicom common stock through the
exercise of option pursuant to Multicom's 1996 Outside Directors Stock Option
Plan. (See discussion under Item 4(a) below).
Item 4. Purpose of Transaction.
Meredith purchased the shares of the common stock of Multicom as an
investment.
(a) Meredith may acquire additional common stock of Multicom as
interest payable upon the balance of the loan indebtedness, as described in
Item 3 above.
Meredith may also acquire additional shares of Multicom by
virtue of certain antidilution rights granted Meredith by Multicom pursuant to
the Stock Purchase Agreement of June 4, 1994, under which Meredith purchased
shares of Multicom Series B Stock (see discussion under Item 3 above). Such
antidilution rights entitle Meredith to purchase up to 216,420 additional
shares of Multicom common stock.
Larry D. Hartsook, Meredith's Vice President - Finance and a
Multicom Director, may acquire shares of Multicom common stock pursuant to
Multicom's 1996 Outside Directors Stock Option Plan. Under this plan, Mr.
Hartsook is to receive an option to purchase 2,500 shares of Multicom common
stock on August 14, 1996, and he will receive an additional option to purchase
2,500 shares of Multicom common stock on each anniversary of that date upon
which Mr. Hartsook remains in office.
The exercise price of each of Mr. Hartsook's options will be
the fair market value of a share of common stock on the date of the grant.
(b) Meredith has no current plans with respect to an
extraordinary corporate transaction.
(c) Meredith has no current plans with respect to a sale or
transfer of a material amount of assets of Multicom.
(d) Meredith has no current plans with respect to any change in
the present board of directors or management of Multicom.
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(e) Meredith has no current plans with respect to any material
change in the present capitalization or dividend policy of Multicom.
(f) Meredith has no current plans with respect to any other
material change in Multicom's business or corporate structure.
(g) Meredith has no current plans with respect to any changes in
Multicom's charter, bylaws, or instruments corresponding thereto or other
actions which may impede the acquisition of control of Multicom by any person.
(h) Meredith has no current plans with respect to causing a class
of securities of Multicom to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association.
(i) Meredith has no current plans which would result in a class
of equity securities of Multicom becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act.
(j) Meredith has no current plans which relate to any of the
items enumerated above, except as disclosed in Item 4(a) above.
Item 5. Interest in Securities of the Issuer.
(a) Meredith has beneficial ownership of 1,143,587 shares of the
common stock of Multicom, and holds antidilution rights which entitle Meredith
to obtain up to 216,420 additional shares.
The sum of the shares beneficially owned and the shares Meredith
is entitled to obtain is 1,360,007, which would comprise 23.3 percent of the
outstanding common stock of Multicom.
Larry D. Hartsook, Vice President - Finance of Meredith and a
director of Multicom, has filed a Form 3 with the Commission listing his
indirect beneficial ownership, by virtue of his positions, of the Meredith
shares of the common stock of Multicom. However, Mr. Hartsook disclaims
beneficial ownership of these securities, and this report shall not be deemed
an admission that he is the beneficial owner of such securities for purposes of
Section 16 or for any other purpose.
(b) In connection with Meredith's initial purchase of Multicom Series
B common stock on June 8, 1994, Meredith, Multicom and Tamara L. Attard
concurrently entered into a voting agreement. Under the voting agreement
Meredith agreed to vote its shares on certain "fundamental transactions" (as
defined in the voting agreement). Additionally, Meredith agreed to vote any
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option shares it acquired at any election of directors as directed by Ms.
Attard. This voting agreement expires under certain conditions and, in all
events on the third anniversary of the closing date of Multicom's initial
public offering.
Except as set forth immediately above, Meredith possesses the sole
power to vote all of its Multicom common stock.
Larry D. Hartsook exercises no independent voting power over any
shares of Multicom common stock.
(c) Meredith has effected the following transactions in Multicom
common stock during the past 60 days:
On May 6, 1996, Meredith exercised its antidilution rights with
respect to the exercise of certain options by third parties. As a result of
its exercise of its antidilution rights, Meredith purchased a total of 20,060
shares of Multicom common stock for $5,060.
Effective with the closing of Multicom's initial public offering
on June 28, 1996, Meredith exercised its option to purchase additional Multicom
shares by canceling $1,500,000 of Multicom debt to Meredith in return for
247,219 shares of Multicom common stock (see discussion in Item 3 above).
On July 1, 1996, Meredith received a quarterly interest payment
from Multicom in connection with Meredith's July 1995 loan to Multicom (see
discussion in Item 3 above). As called for by the loan documents, the interest
was paid in the form of 11,350 shares of Multicom common stock.
(d) No other person has the right to receive or the power to direct
the receipt of dividends from, or the proceeds from the sale of, the securities
which are the subject of this report.
(e) Meredith remains the beneficial owner of more than five percent of
the common stock of Multicom.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On June 4, 1994, Multicom issued Meredith an aggregate of 824,000 shares
of its Series B Common stock (the "Meredith Shares") in a private venture
funding at a purchase price of $6.07 per share. The purchase price was paid in
a combination of $2,900,000 in cash and $2,100,000 in unearned royalties owing
on products created by Multicom under license from Meredith. Under licensing
agreements with Meredith, Multicom incurs royalty expenses based upon a
percentage of net sales. Royalties owing under these licensing agreements are
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applied against the $2,100,000 unearned royalty amount. Royalties incurred
through March 31, 1997, will be applied toward the unearned royalty amount.
Under these arrangements, royalties earned through March 31, 1996, were
$635,726 (including $272,103 in the year ended June 30, 1995, and $208,454 in
the nine months ended March 31, 1996). Any remaining unearned royalty amount
at March 31, 1997, will be forgiven, and the number of Series B common shares
will not be adjusted. Meredith was also granted an option to purchase 823,532
share of Series B common stock (the "Option Shares") at an aggregate purchase
price of $4,992,663, which expired on Multicom's initial public offering (and
pursuant to which Meredith partially exercised its option). Meredith also
committed to use its best efforts to license to Multicom content for at least
four titles per year through June 30, 1999, from Meredith publications.
Meredith committed to use reasonable efforts to utilize Multicom as its
principal optical/digital publisher through June 30, 1999. As part of this
purchase transaction, Meredith, Multicom and Tamara L. Attard concurrently
entered into a Voting Agreement (the "Meredith Voting Agreement"). Under the
Voting Agreement, Meredith agreed to vote the Meredith Shares on certain
"fundamental transactions" (as defined in the Meredith Voting Agreement) and
the Option Shares at any election of directors as directed by Ms. Attard. The
Meredith Voting Agreement expires under certain conditions and in all events on
the third anniversary of the closing date of the Offering.
Meredith has, to date, entered into eight license agreements with Multicom
whereunder Meredith has granted Multicom the rights to make, distribute and
sell various interactive multimedia compact disks bearing Meredith trademarks.
In August 1994, Multicom issued a $200,000 note payable to Meredith, the
proceeds of which were used to purchase capital equipment. This note bears
interest at 10% per annum and principal and interest is due monthly in
installments of $6,453. The balance is due in full on August 15, 1997.
On July 31, 1995, Multicom issued a $2,000,000 note payable to Meredith,
the proceeds of which were used to fund operations. This note bears interest
at 15% which is payable quarterly in common stock at a price of $6.07 per
share. Quarterly principal payments are calculated based upon 8% of certain
sales for the quarter, as defined, with a minimum amount of $60,000 due. The
note is convertible at the holder's option into Series B common stock via a
partial exercise of the Option Shares. Meredith converted $1,500,000 of the
remaining balance of this note on the effective date of Multicom's initial
public offering (June 28, 1996) into common stock pursuant to a
reclassification of Series B common stock as common stock. This note was
secured by all of Multicom's assets pursuant to a Security Agreement dated as
of January 31, 1996. The balance is due in full on July 31, 1998.
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On June 4, 1996, Tamara L. Attard, Meredith and Multicom entered into a
voting agreement pursuant to which Ms. Attard and Meredith agreed that Ms.
Attard would vote her shares for a single Meredith designee to serve on the
Board of Directors of Multicom, Meredith agreed to supply a qualified designee,
and to vote for its designee. This voting agreement does not bind either
Meredith's or Ms. Attard's shares when held by an unrelated transferee. If
despite the parties' compliance with their nomination and voting obligations
under the 1996 voting agreement, no designee of Meredith sits on the Board of
Directors of Multicom for a period of 60 days, then at its election, Meredith
may cancel its obligations under Sections 2.3(b) and 2.3(c) of the Stock
Purchase Agreement (see discussion in the first paragraph of this Item). The
1996 Voting Agreement expires upon such termination, or June 30, 1999.
None of Meredith's shares of Multicom common stock are pledged or subject
to any contingency that would give any other person voting power over the
shares.
Item 7. Material to be Filed as Exhibits.
The stock purchase agreement of June 4, 1994, between Meredith and
Multicom was filed with the Los Angeles office of the Commission as Exhibit
10.7 to Form SB-2, Registration Statement number 333-4704-LA, in connection
with Multicom's initial public offering. That agreement is incorporated as an
Exhibit herein by this reference.
The voting agreement of June 8, 1994, and the amendment to that voting
agreement of May 31, 1996, were filed with the Los Angeles office of the
Commission as Exhibit 10.22 to Form SB-2, Registration Statement number 333-
4704-LA, in connection with Multicom's initial public offering. The agreement
and amendment are incorporated as an exhibit herein by this reference.
The Multicom 1996 Outside Directors Stock Option Plan was filed with the
Los Angeles office of the Commission as Exhibit 10.3 to Form SB-2, Registration
Statement number 333-4704-LA, in connection with Multicom's initial public
offering. This plan is incorporated as an exhibit herein by this reference.
Signature
July 5, 1996 /s/ Thomas L. Slaughter
- -------------------------- --------------------------------------------
Date Signature
Thomas L. Slaughter
Vice President-General Counsel and Secretary
--------------------------------------------
Name/Title
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SCHEDULE A
The name and principal occupation or employment of each executive officer of
Meredith are set forth below. The business address of each person is 1716
Locust Street, Des Moines, Iowa 50309-3023, and the address of the corporation
or organization in which such employment is conducted is the same as his
business address. All of the persons listed below are U.S. citizens.
NAME POSITION WITH MEREDITH
Leo R. Armatis Vice President-Corporate Relations
Larry D. Hartsook Vice President-Finance
Philip A. Jones President-Broadcasting Group
William T. Kerr President and Chief Operating Officer
Christopher M. Little President-Publishing Group
E. T. Meredith III Chairman of the Executive Committee
Jack D. Rehm Chairman of the Board and Chief Executive Officer
Allen L. Sabbag President-Real Estate Group
Thomas L. Slaughter Vice President-General Counsel and Secretary
The name, principal occupation or employment, and address of the corporation or
organization in which such employment is conducted of each director of Meredith
are set forth below. All of the persons listed below are U.S. citizens.
Herbert M. Baum Chairman and CEO, Quaker State Corporation
225 E. John Carpenter Freeway, Irving, TX 75062
Robert A. Burnett Chairman and CEO ( Retired), Meredith Corporation
1716 Locust St., Des Moines, IA 50309-3023
Pierson M. Grieve Chairman and CEO (Retired), Ecolab, Inc.
4900 IDS Center, 80 S. 8th St., Minneapolis, MN 55402
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Frederick B. Henry President, The Bohen Foundation
1657 Art School Rd., Chester Springs, PA 19425
Joel W. Johnson Chairman, President and CEO, Hormel Foods Corporation
One Hormel Place, Austin, MN 55912-3680
William T. Kerr President and Chief Operating Officer
Meredith Corporation
1716 Locust St., Des Moines, IA 50309-3023
Robert E. Lee Executive Director, The Denver Foundation
455 Sherman St., Suite 220, Denver, CO 80203
Richard S. Levitt Chairman and CEO, Nellis Corporation
6001 Montrose Rd., Suite 600, Rockville, MD 20852
E.T. Meredith III Chairman of the Executive Committee, Meredith Corp.
1716 Locust St., Des Moines, IA 50309-3023
Nicholas L. Reding Vice Chairman, Monsanto Company
800 N. Lindbergh Blvd., St. Louis, MO 63167
Jack D. Rehm Chairman of the Board and Chief Executive Officer
Meredith Corporation
1716 Locust St., Des Moines, IA 50309-3023
(Dr.) Barbara S. Executive Director of the Business-Higher
Uehling Education Forum
1 DuPont Circle N.W., Suite 800
Washington, DC 20036-1193
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