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 March 31, 1996
Commission file number 1-5128
Meredith Corporation
(Exact name of registrant as specified in its charter)
Iowa 42-0410230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1716 Locust Street, Des Moines, Iowa 50309-3023
(Address of principal executive offices) (ZIP Code)
515 - 284-3000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 30, 1996
Common Stock, $1 par value 20,426,287
Class B Stock, $1 par value 6,614,734
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Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Meredith Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
March 31 June 30
Assets 1996 1995*
- --------------------------------------------------------------------------
(in thousands)
Current assets:
Cash and cash equivalents $ 9,283 $ 11,825
Receivables, net 102,962 98,191
Inventories 30,837 46,781
Supplies and prepayments 10,874 23,774
Subscription acquisition costs 53,601 65,604
Film rental costs 12,799 4,423
---------- ----------
Total current assets 220,356 250,598
---------- ----------
Property, plant and equipment (at cost) 186,388 163,947
Less accumulated depreciation (107,361) (101,506)
---------- ----------
Net property, plant and equipment 79,027 62,441
---------- ----------
Net assets of discontinued operations 88,129 88,097
Deferred subscription acquisition costs 47,093 34,957
Deferred film rental costs 9,593 3,777
Other assets 20,189 21,290
Goodwill and other intangibles
(at original cost less accumulated amortization) 284,900 282,636
---------- ----------
Total assets $749,287 $743,796
========== ==========
*Restated to reflect the cable segment as discontinued operations.
See accompanying Notes to Interim Consolidated Financial Statements.
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(Unaudited)
March 31 June 30
Liabilities and Stockholders' Equity 1996 1995*
- --------------------------------------------------------------------------
(in thousands)
Current liabilities:
Current portion of long-term indebtedness $ 15,000 $ 15,000
Current portion of long-term film rental contracts 14,711 7,290
Accounts payable 33,982 48,601
Accrued taxes and expenses 64,819 57,216
Unearned subscription revenues 152,434 150,927
---------- ----------
Total current liabilities 280,946 279,034
---------- ----------
Long-term indebtedness 50,000 75,000
Long-term film rental contracts 11,029 4,969
Unearned subscription revenues 95,103 96,381
Deferred income taxes 22,501 18,492
Other deferred items 31,543 28,870
---------- ----------
Total liabilities 491,122 502,746
---------- ----------
Stockholders' equity:
Series preferred stock, par value $1 per share
Authorized 5,000,000 shares; none issued. -- --
Common stock, par value $1 per share
Authorized 80,000,000 shares; issued and
outstanding 20,588,386 at March 31 and
20,579,565 June 30 (net of treasury shares,
11,945,729 at March 31 and 11,601,465
at June 30.) 20,588 20,580
Class B stock, par value $1 per share,
convertible to common stock
Authorized 15,000,000; issued and outstanding
6,619,281 at March 31 and 6,905,062
at June 30. 6,619 6,905
Additional paid-in capital -- 873
Retained earnings 233,766 216,485
Unearned compensation (2,808) (3,793)
---------- ----------
Total stockholders' equity 258,165 241,050
---------- ----------
Total liabilities and stockholders' equity $749,287 $743,796
========== ==========
*Restated to reflect the cable segment as discontinued operations.
See accompanying Notes to Interim Consolidated Financial Statements.
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Meredith Corporation and Subsidiaries
Consolidated Statements of Earnings (Unaudited)
Three Months Nine Months
Ended March 31 Ended March 31
1996 1995* 1996 1995*
- ---------------------------------------------------------------------------
(in thousands, except per share)
Revenues (less returns and allowances)
Advertising $119,828 $107,644 $327,360 $284,478
Circulation 69,932 67,873 206,190 198,511
Consumer books 7,928 23,233 49,181 68,277
All other 22,693 18,618 62,490 55,046
-------- -------- -------- --------
Total revenues 220,381 217,368 645,221 606,312
-------- -------- -------- --------
Operating costs and expenses:
Production, distribution & edit 93,943 89,753 275,413 250,141
Selling, general and admin 91,040 101,897 280,759 291,261
Depreciation and amortization 8,110 5,472 19,356 13,484
-------- -------- -------- --------
Total operating costs and expenses 193,093 197,122 575,528 554,886
-------- -------- -------- --------
Income from operations 27,288 20,246 69,693 51,426
Gain on dispositions -- -- 5,898 --
Interest income - IRS settlement -- -- -- 8,554
Interest income 454 469 1,575 1,815
Interest expense (1,173) (1,900) (4,643) (1,991)
-------- -------- -------- --------
Earnings from continuing operations
before income taxes 26,569 18,815 72,523 59,804
Income taxes 12,780 8,379 33,147 26,605
-------- -------- -------- --------
Earnings from continuing operations 13,789 10,436 39,376 33,199
Discontinued operations:
Loss from cable operations -- (1,358) (717) (4,530)
Gain on dispositions -- 1,101 -- 1,101
-------- -------- -------- --------
Earnings before cumulative effect
of change in accounting principle 13,789 10,179 38,659 29,770
Cumulative effect of change in
accounting principle -- -- -- (46,160)
-------- -------- -------- --------
Net earnings (loss) $ 13,789 $ 10,179 $ 38,659 $(16,390)
======== ======== ======== ========
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Meredith Corporation and Subsidiaries
Consolidated Statements of Earnings (Unaudited), continued
Three Months Nine Months
Ended March 31 Ended March 31
1996 1995* 1996 1995*
- ---------------------------------------------------------------------------
(in thousands, except per share)
Net earnings (loss) per share:
Earnings from continuing operations $ 0.49 $ 0.38 $ 1.40 $ 1.20
Discontinued operations -- (0.01) (0.03) (0.12)
Cumulative effect of change in
accounting principle -- -- -- (1.67)
------- ------- ------- -------
Net earnings (loss) per share $ 0.49 $ 0.37 $ 1.37 $ (0.59)
======= ======= ======= =======
Dividends paid per share $ 0.11 $ 0.10 $ 0.31 $ 0.28
======= ======= ======= =======
Average shares outstanding 28,330 27,764 28,230 27,715
======= ======= ======= =======
*Restated to reflect the cable segment as discontinued operations.
See accompanying Notes to Interim Consolidated Financial Statements.
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Meredith Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended March 31 1996 1995*
- ----------------------------------------------------------------------------
(in thousands)
Cash flows from operating activities:
Earnings before cumulative effect of change in
accounting principle $ 38,659 $ 29,770
Less cumulative effect of change in
accounting principle -- (46,160)
-------- --------
Net earnings (loss) 38,659 (16,390)
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation and amortization 19,356 13,484
Amortization of film contract rights 13,421 12,971
Gain on dispositions, net of taxes (3,379) --
Loss from discontinued operations 717 3,429
(Increase) in receivables (11,882) (36,125)
Decrease (increase) in inventories 11,042 (7,322)
Decrease (increase) in supplies and prepayments 7,024 (4,422)
(Increase) decrease in subscription acquisition costs (133) 76,721
(Decrease) increase in accounts payable and accruals (17,127) 13,960
Increase in unearned subscription revenues 229 15,320
Increase (decrease) in deferred income taxes 7,310 (36,382)
Increase in other deferred items 2,673 1,794
-------- --------
Net cash provided by operating activities 67,910 37,038
-------- --------
Cash flows from investing activities:
Redemption of marketable securities -- 11,178
Proceeds from dispositions 27,894 --
Payment for purchase of business (14,500) (159,000)
Additions to property, plant, and equipment (25,391) (9,413)
Decrease in other assets 1,165 8,173
-------- --------
Net cash (used) by investing activities (10,832) (149,062)
-------- --------
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Meredith Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited), continued
For the Nine Months Ended March 31 1996 1995*
- ----------------------------------------------------------------------------
(in thousands)
Cash flows from financing activities:
Long-term indebtedness incurred $ -- $100,000
Long-term indebtedness retired (25,000) --
Payments for film rental contracts (13,076) (10,777)
Proceeds from common stock issued 4,691 2,719
Purchase of company shares (17,686) (3,759)
Dividends paid (8,549) (7,687)
-------- --------
Net cash (used) provided by financing activities (59,620) 80,496
-------- --------
Net (decrease) in cash and cash equivalents (2,542) (31,528)
Cash and cash equivalents at beginning of year 11,825 31,528
-------- --------
Cash and cash equivalents at end of period $ 9,283 $ --
======== ========
*Restated to reflect the cable segment as discontinued operations.
See accompanying Notes to Interim Consolidated Financial Statements.
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MEREDITH CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Accounting Policies
The information included in the foregoing interim financial statements is
unaudited. In the opinion of management, all adjustments, which are of a
normal recurring nature and necessary for a fair presentation of the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the entire year.
Fiscal 1995 financial statements reflect the adoption of Practice Bulletin 13,
"Direct-Response Advertising and Probable Future Benefits" as of July 1, 1994.
Practice Bulletin 13 interpreted Statement of Position 93-7, "Reporting on
Advertising Costs." Practice Bulletin 13 requires the Company to expense most
direct-response subscription acquisition costs as incurred versus the Company's
prior accounting method of deferring most of those costs over the lives of the
related subscription revenues.
2. Discontinued Operations
The Company formalized plans to sell all of its ownership interest in cable
television systems and therefore classified its cable segment as discontinued
operations effective September 30, 1995. On April 19, 1996, Meredith/New
Heritage Partnership, of which the Company indirectly owns 96 percent,
announced an agreement to sell its 70 percent ownership interest in Meredith/
New Heritage Strategic Partners, L.P. ("Strategic Partners") to Continental
Cablevision, Inc. ("Continental"). As a result of this agreement, Continental
will increase its current minority ownership interest in Strategic Partners of
approximately 30 percent to 100 percent. Strategic Partners owns systems with
126,000 subscribers which are located in the Minneapolis/St. Paul area. These
systems are the only cable television operations currently owned by Strategic
Partners. Pending approvals from local franchise authorities, the Federal
Communications Commission and others, the sale is expected to close in the
second half of calendar 1996. The total value of the systems has been placed
at $262.5 million. Meredith Corporation will receive approximately $115
million in cash (net of taxes) from the sale. Continental will assume
approximately $87 million of Strategic Partners' debt. Meredith Corporation
will recognize a gain from the sale expected to be $15 to $20 million after
taxes.
Prior year financial statements have been restated to reflect the cable segment
as discontinued operations. The following table summarizes the results of
discontinued operations prior to the measurement date:
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MEREDITH CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
Three Months Nine Months
Ended March 31 Ended March 31
------------------ --------------------
1996* 1995 1996* 1995
------- ------- ------- -------
(in thousands)
Results of operations:
Net revenues $ -- $13,081 $12,223 $39,168
===== ======= ======= =======
Income from operations $ -- $ 913 $ 721 $ 2,264
===== ======= ======= =======
(Loss) before income taxes $ -- $(1,282) $ (744) $(4,326)
Provision for tax expense
(benefit) -- 76 (27) 204
----- ------- ------- -------
Net (loss) from discontinued
operations $ -- $(1,358) $ (717) $(4,530)
===== ======= ======= =======
*For the quarter ended March 31, 1996, cable operations reported revenues of
$13.4 million, income from operations of $1,824,000, and net earnings of
$115,000 (including income tax expense of $24,000). Since September 30, 1995,
the cable operations have reported revenues of $26.2 million, income from
operations of $3,087,000, and a net loss of ($234,000) (including income tax
expense of $96,000). These losses have been deferred until the disposal
date, as the Company will record a net gain on the sale of the cable
television systems.
Interest expense is reflected in the loss from discontinued cable operations
based on debt that is specifically attributed to the cable segment and is non-
recourse to Meredith Corporation. Assets and liabilities of the discontinued
operations have been reclassified on the consolidated balance sheet from their
historic classification to separately identify them as net assets of
discontinued operations. These net assets of discontinued operations at March
31, 1996, consist of goodwill and other intangibles $138.4 million, net
property, plant and equipment $71.3 million, net of long-term debt ($87.3)
million and other net liabilities ($34.3) million.
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MEREDITH CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
3. Inventories
Major components of inventories are summarized below. Of total inventory
values shown, approximately 84 and 55 percent respectively, are under the LIFO
method at March 31, 1996 and June 30, 1995.
March 31 June 30
1996 1995
-------- --------
(in thousands)
Raw materials $26,189 $32,320
Work in process 14,077 13,801
Finished goods 6,644 13,059
-------- --------
46,910 59,180
Reserve for LIFO cost valuation (16,073) (12,399)
-------- --------
Total $30,837 $46,781
======== ========
The decrease in finished goods inventory and the increase in the percentage of
inventory under the LIFO method at March 31, 1996 primarily reflect the sale of
book clubs in December 1995.
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MEREDITH CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
4. Cable Subsidiary Long-Term Indebtedness
Strategic Partners owed $87.3 million as of March 31, 1996, to a group of ten
banks under a loan agreement. Interest was payable under interest rate swap
agreements until September 1, 1995. On September 1, 1995, interest rates on
the total outstanding borrowing of $87.3 million converted to short-term rates
based on Eurodollar, prime and/or certificate of deposit rates as provided in
the loan agreement. As of March 31, 1996, the weighted-average rate of
interest on Strategic Partners' debt was 6.4 percent.
5. Acquisition
On January 1, 1996, the Company purchased the assets of WOGX-TV, a Fox network
affiliated broadcast television station in Ocala-Gainesville, Florida, from
Wabash Valley Broadcasting. WOGX-TV serves the central Florida communities of
Ocala, Gainesville, and Inverness, the 167th largest television market in the
country based on Designated Market Area as defined by A. C. Nielsen Company.
Had this acquisition occurred on July 1, 1995, the effect on consolidated
revenues and net earnings would not have been material.
6. Downsizing of Book Operations
In July 1995, Meredith Corporation announced an alliance with The Reader's
Digest Association, Inc. whereby Reader's Digest will have the rights for
direct-response marketing of certain Meredith-trademarked products. As a
result, the Company has discontinued the majority of its book direct-response
marketing efforts. Therefore, consumer book revenues are expected to decline.
This alliance is expected to have a favorable effect on long-term operating
results of the Company's book business.
In December 1995, Meredith Corporation recorded a gain of $5,898,000
($3,379,000 post-tax) on the sale of the Better Homes and Gardens Crafts Club,
Better Homes and Gardens Cook Book Club and Country Homes and Gardens Book
Club. Had this sale occurred on July 1, 1995, the effect on consolidated
revenues and net earnings would not have been material. Looking ahead,
consumer book revenues are expected to decline but the impact on operating
results is expected to be immaterial.
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MEREDITH CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS, continued
(Unaudited)
7. Revenues, operating profit and depreciation and amortization by industry
segment are shown below:
Three Months Nine Months
Ended March 31 Ended March 31
------------------- -------------------
1996 1995* 1996 1995*
-------- -------- -------- --------
(in thousands)
Revenues
Publishing $179,999 $181,088 $517,998 $500,694
Broadcasting 34,798 30,927 109,397 87,995
Real Estate 5,593 5,361 18,181 17,662
Less: Inter-segment revenues (9) (8) (355) (39)
-------- -------- -------- --------
Total revenues $220,381 $217,368 $645,221 $606,312
======== ======== ======== ========
Operating profit
Publishing $ 22,356 $ 17,060 $ 44,959 $ 36,426
Broadcasting 9,356 7,956 37,643 27,481
Real Estate 298 43 2,414 1,386
Unallocated corporate expense (4,722) (4,813) (15,323) (13,867)
-------- -------- -------- --------
Total operating profit $ 27,288 $ 20,246 $ 69,693 $ 51,426
======== ======== ======== ========
Depreciation and amortization
Publishing $ 2,488 $ 2,542 $ 7,484 $ 7,643
Broadcasting 2,894 2,451 8,162 4,397
Real Estate 138 116 372 348
Unallocated corporate expense 2,590 363 3,338 1,096
-------- -------- -------- --------
Total depr. and amortization $ 8,110 $ 5,472 $ 19,356 $ 13,484
======== ======== ======== ========
*Restated to reflect the cable segment as discontinued operations.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
(Note: All per-share amounts are computed on a post-tax basis and reflect a
two-for-one stock split in March 1995. All prior-year information has been
reclassified to reflect cable operations as discontinued.)
Meredith Corporation net earnings for the quarter ended March 31, 1996 were
$13,789,000 (49 cents per share) versus $10,179,000 (37 cents per share) in the
prior-year quarter. For the nine months ended March 31, 1996, net earnings
were $38,659,000 ($1.37 per share) compared to a loss of $16,390,000 (59 cents
per share) in the prior-year period. Results for the nine months ended March
31, 1995 included a non-cash charge for the cumulative effect of a change in
accounting principle (related to subscription acquisition costs) of $46,160,000
($1.67 per share). The nine months ended March 31, 1996 and the quarter and
nine months ended March 31, 1995 also included losses from cable operations
which were classified as discontinued operations effective September 30, 1995.
Prior-year discontinued operations also include a gain of $1,101,000 (4 cents
per share) from the sale of the North Dakota cable television system in March
1995. In April 1996, an agreement was reached for the sale of the Company's
indirect ownership interest in the remaining cable properties to the 30 percent
minority owner, Continental Cablevision, Inc. Meredith Corporation will record
a gain from the sale. Therefore, fiscal 1996 net losses of the cable
operations since September 30, 1995, are being deferred until the disposal
date, expected to occur in the second half of calendar 1996.
Earnings from continuing operations were $13,789,000 (49 cents per share) for
the quarter ended March 31, 1996, a 29 percent per-share increase from prior-
year third quarter earnings of $10,436,000 (38 cents per share). Earnings from
continuing operations for the comparative nine-month periods, were $39,376,000
($1.40 per share) in fiscal 1996 and $33,199,000 ($1.20 per share) in fiscal
1995. Earnings for the nine months ended March 31, 1996 included a post-tax
gain of $3,379,000 (12 cents per share) on the disposition of three of the
Company's book clubs. Earnings for the nine months ended March 31, 1995
included $4,747,000 (17 cents per share) for the post-tax impact of interest
income from an IRS settlement. Excluding these one-time items, comparable
earnings for the nine-month periods were $35,997,000 ($1.28 per share) in
fiscal 1996, a 24 percent per-share increase from $28,452,000 ($1.03 per share)
in fiscal 1995. Improvements in the Company's publishing and broadcasting
operations were the biggest factors in these increases.
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In December 1995, a gain of $5,898,000 ($3,379,000 post-tax or 12 cents per
share) was recorded on the sale of the Better Homes and Gardens Crafts Club,
Better Homes and Gardens Cook Book Club and Country Homes and Gardens Book
Club. All other book club operations have been discontinued. In the third
quarter of fiscal 1996, consumer book revenues were approximately 66 percent
lower than in the prior-year third quarter due to the book club sale and lower
direct-response revenues. The decline in direct-response revenues was due to
the Company's previously announced strategic alliance with The Reader's Digest
Association, Inc. ("Reader's Digest alliance") which is currently in the
testing phase. As a result of these events, consumer book revenues are
expected to remain significantly below the level of comparable prior-year
periods through the first half of fiscal 1997. However, operating profits are
expected to benefit in fiscal 1996 as a result of these changes.
In addition to the items noted above, comparisons between fiscal 1996 and 1995
are also affected by the acquisitions of WSMV-TV in Nashville, Tennessee in
January 1995 and WOGX-TV, serving Ocala/Gainesville, Florida, in January 1996.
Fiscal 1996 year-to-date results include 9 months of WSMV-TV operations and 3
months of WOGX-TV operations. The fiscal 1995 nine-month period included three
months of WSMV-TV operations. Nashville is the 33rd largest market in the
United States and Ocala/Gainseville is the 167th largest market as measured by
A. C. Nielsen. Since station revenues are largely related to market size, the
impact of the WOGX-TV acquisition is not expected to materially effect Meredith
Corporation's revenues and profits in the near term.
Revenues for the quarter ended March 31 were $220,381,000 in fiscal 1996, a one
percent increase from fiscal 1995 third quarter revenues of $217,368,000.
Revenues for the nine months ended March 31 were $645,221,000 in fiscal 1996,
or six percent higher than comparable fiscal 1995 revenues of $606,312,000.
Increased advertising revenues in the magazine and television broadcasting
operations were the most significant factors in the increases. The
aforementioned decline in consumer book revenues partially offset the
increases. Excluding book club and direct-response revenues from all periods,
revenues increased 9 percent for the quarter and 11 percent for the fiscal
year-to-date.
Income from operations in the third quarter was $27,288,000, a 35 percent
increase from the fiscal 1995 third quarter. Year-to-date income from
operations was $69,693,000, a 36 percent increase from the prior-year period.
The operating margin rose from 9.3 percent of revenues in the fiscal 1995 third
quarter to 12.4 percent in the current quarter. For the fiscal year-to-date,
the operating margin rose from 8.5 percent of revenues in the fiscal 1995
period to 10.8 percent in the current period. Lower selling, general and
administrative ("SG&A") expenses, both in total and as a percentage of
revenues, led to the improvements. The decline in SG&A expense reflected lower
book selling and administrative expenses in the current periods due to recent
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<PAGE>
downsizing and the recovery of a previously reserved note receivable.
Production, distribution and editorial expenses increased as a percentage of
revenues in both periods primarily due to higher magazine paper prices. Higher
magazine postal rates during the first six months of fiscal 1996 also
contributed.
Depreciation and amortization expense increased as a percentage of revenues in
both the third quarter and fiscal year-to-date periods versus the comparable
fiscal 1995 periods. The write-down of approximately $2 million of goodwill
arising from a 1988 acquisition was the primary factor in the third quarter
increase. This write-down was primarily from an IRS adjustment to the value of
goodwill assigned to the purchase. Depreciation and amortization expense in
the current quarter and nine-month period also increased as a percentage of
revenues versus the prior year due to the amortization of intangibles arising
from the purchase of WSMV-TV.
Third quarter operating costs and expenses declined two percent in total
compared to the prior-year quarter. For the nine-month period, operating costs
and expenses increased four percent in total compared to prior-year period.
Lower selling and administrative expenses in book publishing, due to the sale
of the book clubs and the Reader's Digest alliance, resulted in the decline in
third quarter expenses. The increase in costs in the year-to-date period
primarily reflected higher magazine paper and postage expenses (a result of
both volume and price increases) and an additional six months of operating
costs and amortization of intangible assets for WSMV-TV.
Earnings from continuing operations (excluding gain on dispositions) before
interest, taxes, depreciation and amortization ("EBITDA") were $35,398,000 for
the three months ended March 31, 1996, up 38 percent from $25,718,000 in the
fiscal 1995 third quarter. EBITDA for the nine months ended March 31, 1996 was
$89,049,000, a 37 percent increase from $64,910,000 in the comparable prior-
year period. The increases were primarily due to improvements in publishing
and broadcasting operating results.
Third quarter net interest expense was lower than in the prior-year quarter due
to $25 million of principal payments that reduced outstanding debt. Net
interest expense (excluding income from the IRS settlement in fiscal 1995) was
higher in the current nine-month period due to debt incurred in January 1995
for the purchase of the Nashville television station.
The Company's effective income tax rate was 48.1 percent in the third quarter
and 45.7 percent for the fiscal 1996 year-to-date. This compares to an
effective tax rate of 44.5 percent in both comparable prior-year periods. The
increase in the effective tax rate in the current-year periods was due to the
reduction in goodwill, which is not tax deductible.
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<PAGE>
Operating Results by Segment:
Publishing: Revenues in the publishing segment decreased 1 percent from the
prior-year third quarter but were up 4 percent from the prior year-to-date
period. The third quarter decline reflected lower consumer book revenues due
to the sale of the book clubs and the Reader's Digest alliance. Higher
magazine publishing revenues nearly offset the decline. In the fiscal year-to-
date period, increases in magazine publishing revenues more than offset the
book revenue declines. The decline in book revenues was not as significant in
the nine-month period as it included six months of book club revenues prior to
the sale. Increased retail book revenues, up 19 percent from the prior-year
period due to higher sales volumes, also contributed. The magazine publishing
revenue increases were primarily due to higher advertising revenues that
resulted largely from increased advertising pages. The Company's flagship
title, Better Homes and Gardens magazine, recorded ad revenue increases of 27
percent for the quarter and 19 percent for the nine months. Run-of-press ad
pages increased 26 percent for the quarter and 17 percent for the nine months.
Ladies' Home Journal magazine, the Company's second largest circulation title,
reported a 3 percent decline in third quarter ad revenues due to lower average
revenue per page resulting from a previously announced rate base reduction.
The rate base reduction went into effect with the first issue of the fiscal
third quarter. Ladies' Home Journal reported a 1 percent increase in ad
revenues for the nine-month period primarily due to higher average revenue per
page prior to the rate base reduction. Higher average revenue per page for
Traditional Home and Country Home magazines and the addition of new custom
publications also contributed to the ad revenue increase in both the quarter
and nine-month periods. Publishing circulation revenues increased from the
prior-year periods primarily due to higher revenues from newer magazine titles.
An increase in magazine custom publishing volumes also contributed to the
increase in publishing revenues in both the quarter and year-to-date periods.
Publishing segment operating profits increased 31 percent from the prior-year
quarter and 23 percent from the prior year-to-date period reflecting
improvements in magazine and book operating results. The Company's book
business reported operating profits in both the current quarter and year-to-
date period compared with operating losses in the comparable prior-year
periods. Book operations now consist primarily of retail book sales. Lower
administrative expenses due to recent downsizing caused the turn-around.
Magazine operating profits increased 16 percent from the prior-year quarter and
10 percent from the prior year-to-date period. Higher advertising revenues,
especially by Better Homes and Gardens, were the primary factor in the third
quarter improvement. Increased advertising revenues and lower subscription
expenses led to the favorable year-to-date results. The decline in
subscription expenses reflected fewer promotional mailings. Promotion volumes
were down at Better Homes and Gardens due to strong response from efforts late
in fiscal 1995 and at WOOD and Country America magazines due to reductions in
rate bases. Lower new title start-up and testing costs also contributed to the
improvement in magazine operating profits in both periods.
- 16 -
<PAGE>
Paper is the major raw material required in the publishing segment.
Substantial price increases in the current and prior fiscal years have resulted
from increased global demand and limited supplies. Paper prices increased
nearly 30 percent in fiscal 1995. By October 1995, the Company's paper prices
had risen an additional twelve percent. Since then the tight market conditions
have begun to moderate and paper prices have fallen five to six percent.
However prices remain approximately 35 percent higher than two years ago.
Management does not anticipate another price increase in fiscal 1996; however,
prices are expected to increase in fiscal 1997. The Company has contractual
agreements to ensure adequate supplies of paper for planned publishing
requirements.
Selected magazine rate base reductions have occurred, largely in response to
skyrocketing paper prices. Ladies' Home Journal reduced its rate base from 5
million to 4.5 million starting with the February 1996 issue. Country America
magazine cut its rate base from 1 million to 900,000 and WOOD magazine's rate
base was dropped from 650,000 to 600,000. Country America has also reduced the
frequency of the magazine from nine to six issues per year. The Company does
not plan any across-the-board rate base reductions. In fact, Traditional Home
magazine has increased its rate base from 750,000 to 775,000.
Broadcasting: Broadcasting revenues for the fiscal third quarter increased 13
percent from the prior-year quarter due to strong advertising revenue gains by
WSMV-TV in Nashville and WOFL-TV in Orlando. The addition of revenues from
WOGX-TV, a Fox affiliate serving Ocala/Gainesville, that was acquired in
January 1996, also contributed. Increased market demand for television
advertising led to higher spot rates at the Nashville and Orlando stations.
Broadcasting operating profits increased 18 percent from the prior-year quarter
due to the revenue increases and lower administrative expenses.
For the nine months ended March 31, 1996, broadcasting segment revenues
increased 24 percent from the prior-year period primarily due to an additional
six months of revenue from WSMV-TV, acquired in January 1995. Advertising
revenues of comparable stations increased less than 1 percent from the prior-
year nine-month period. Results were mixed by market. Strong market demand
for advertising resulted in revenue growth at the Orlando station. Revenues
increased at the Phoenix station primarily due to the timing of its September
1994 affiliation with the CBS network. Revenues were down at the remaining
stations due to some softness in advertising demand and lower levels of
political advertising versus the prior-year period. Management believes lower
ratings for the CBS network have also affected the performance of the Company's
three CBS affiliates located in Phoenix, Kansas City and Flint/Saginaw,
Michigan. Broadcasting operating profits increased 37 percent for the nine
months ended March 31, 1996 primarily due to an additional 6 months of profits
from WSMV-TV. Operating profits at the five comparable stations were up 6
percent from the prior-year period due to revenue-related improvements at the
Phoenix and Orlando stations and favorable administrative expenses.
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<PAGE>
Real Estate: Revenues increased 4 percent for the quarter and 3 percent for
the nine-month period from the respective prior-year periods primarily due to
higher transaction fees from member firms. The increase resulted from strong
home resale volumes and increased membership levels. Revenues from the signing
of a master real estate franchise agreement in Thailand also contributed to the
increase in revenues in the current nine-month period. (Revenues from the
Thailand franchise agreement are not currently nor expected to be material to
consolidated net revenues.) Third quarter operating profits increased nearly
six-fold to $298,000 as a result of the revenue increase and various expense
reductions. Operating profits for the nine months ended March 31, 1996,
increased 74 percent from the prior-year period to $2,414,000. Revenue-related
improvements and the absence of prior-year expenses for the termination of a
group marketing contract were the primary factors in the improvement.
Discontinued Operations: In September 1995, plans to sell the cable television
systems owned by Meredith/New Heritage Strategic Partners, L.P., were
formalized. The Company indirectly owns approximately 70 percent of these
systems, which serve 126,000 subscribers in the Minneapolis/St. Paul area. In
April 1996, an agreement was reached to sell the Company's ownership interest
in the systems to Continental Cablevision Inc., which currently has a minority
ownership interest in these systems. Management expects the sale to close
before the end of calendar 1996. Meredith Corporation will record a gain from
the sale, currently estimated to be between $15 and $20 million, net of taxes.
This gain reflects the deferred net losses of the cable segment since the
measurement date and net losses estimated to occur until the disposal date.
Liquidity and Capital Resources
Cash and cash equivalents decreased by $2,542,000 in the nine months ended
March 31, 1996 to $9,283,000. This compares to a decrease in cash of
$31,528,000 in the first nine months of the prior year. The smaller net use of
cash in the current period was due to proceeds from the sale of the book clubs,
the purchase of WSMV-TV in January 1995 and increased cash provided by
operating activities versus the prior-year period. Higher operating income and
reductions in working capital led to the increase in cash provided by
operations. The changes in working capital between periods primarily related to
payments made to the Company for taxes and interest related to the IRS
settlement of the Ladies' Home Journal tax case, downsizing in book operations
and a decrease in accounts payable. Partially offsetting these additional cash
sources were increased use of cash for debt repayments, capital expenditures
and stock repurchases in the current period. The cumulative effect of a change
in accounting principle in the prior-year period, which reduced subscription
acquisition costs, deferred income taxes and net earnings, had no cash effect.
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In the first nine months of fiscal 1996, $17.7 million was spent for the
repurchase of 408,000 shares of Company common stock. In the comparable prior-
year period, $3.8 million was spent for the repurchase of 168,000 shares. As
of March 31, 1996, approximately 592,000 shares may be repurchased under an
existing authorization by the Board of Directors. The status of the repurchase
program is reviewed at each quarterly Board of Directors' meeting.
In January 1996, the Board of Directors increased the quarterly dividend by 10
percent (one cent per share) to 11 cents per share effective with the dividend
payable on March 15, 1996. On an annual basis, this increase will result in
the payment of approximately $1.1 million in additional dividends, at the
current number of shares outstanding. The Company paid dividends of $8.5
million (31 cents per share) in the first nine months of fiscal 1996 compared
with $7.7 million (28 cents per share) in the prior-year period.
At March 31, 1996, the Company owed $65 million under a loan agreement with
four banks. The debt was incurred in January 1995 for the purchase of WSMV-TV,
a television station located in Nashville, Tenn. A $10 million pre-payment of
this debt was made in August 1995 and a $15 million pre-payment was made in
February 1996. The loan agreement requires annual and/or semi-annual payments
through December 31, 1998, the term loan maturity date. However, due to the
pre-payments the last payment is now scheduled for June 1, 1998. Operating
cash flows of the Company are expected to provide adequate funds for principal
and interest payments.
In January 1996 the Company purchased the assets of WOGX-TV, a Fox affiliate
serving Ocala-Gainesville, Florida, using available cash. The Company
continues to pursue the acquisition of additional television broadcasting
stations.
Discontinued Operations: Long-term debt was incurred by Meredith/New Heritage
Strategic Partners, L.P. ("Strategic Partners"), in conjunction with Strategic
Partners' acquisition of North Central Cable Communications Corporation on
September 1, 1992. At March 31, 1996, $87.3 million was owed under the term
loan agreement Strategic Partners has with ten banks. Required financial ratio
tests, as amended, were met at March 31, 1996. Strategic Partners' debt is
non-recourse to Meredith Corporation.
On March 15, 1996, Strategic Partners and the banks amended the aforementioned
loan agreement. Significant amended terms and provisions relate to the
maturity date. All borrowings outstanding under the loan agreement are now due
on the earlier of December 31, 1996, or the date of sale of all or the
remaining portion of the currently-owned cable television systems. In April
1996, a contract was signed for the sale of these remaining cable systems.
Pending necessary regulatory approvals, the sale is expected to close by the
end of calendar 1996. Meredith Corporation will receive approximately $115
million (after taxes) in cash from the sale.
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<PAGE>
Capital expenditures in the nine months ended March 31, 1996, were $25.4
million versus comparable prior-year spending of $9.4 million. Fiscal 1996
caital spending for continuing operations is expected to exceed fiscal 1995
levels by approximately $20 million, or 150 percent. This increase reflects
spending for leasehold and other improvements to new consolidated office space
in New York City and planned construction of a new office building in Des
Moines. The New York project was substantially completed and employees have
moved into the new location. Spending for this project totaled approximately
$11 million in fiscal 1996. The new office building and related improvements
in Des Moines are expected to cost approximately $37.5 million. Fiscal 1996
spending for this project is expected to be approximately $8 million, with the
balance of the spending in fiscal 1997 and 1998. Funds for capital
expenditures are expected to be provided by cash from operating activities.
The Company has made no other material commitments for capital expenditures.
At this time, management expects that cash on hand, internally-generated cash
flow and short-term bank debt under existing bank lines of credit will provide
funds for any additional cash needs (e.g., cash dividends, stock repurchases)
for foreseeable periods. At March 31, 1996, Meredith Corporation had unused
lines of credit totaling $23 million. The Company does not expect the need for
any long-term source of cash to meet working capital requirements.
Results of Operations
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1) Restated Articles of Incorporation, as amended
3.2) Restated Bylaws, as amended
4) Amendment to Loan Agreement among Meredith/New Heritage Strategic
Partners L.P., The Toronto-Dominion Bank, as agent, and a group of
banks, as amended.
11) Statement re computation of per share earnings
27) Financial Data Schedule
99) Additional financial information from the Company's third quarter
press release dated April 23, 1996
(b) Reports on Form 8-K
No Form 8-K was filed during the quarter ended March 31, 1996.
- 20 -
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MEREDITH CORPORATION
Registrant
(Larry D. Hartsook)
Larry D. Hartsook
Vice President - Finance
(Principal Financial and
Accounting Officer)
Date: May 14, 1996
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<PAGE>
Index to Exhibits
Exhibit
Number Item
------- -----------------------------------------------------------
3.1 Restated Articles of Incorporation, as amended
3.2 Restated Bylaws, as amended
4 Amendment to Loan Agreement among Meredith/New Heritage
Strategic Partners L.P., The Toronto-Dominion Bank, as agent,
and a group of banks, as amended
11 Statement re computation of per share earnings
27 Financial Data Schedule
99 Additional financial information from the Company's third
quarter press release dated April 23, 1996
Exhibit 3.1
-----------
RESTATED ARTICLES OF INCORPORATION
OF
MEREDITH CORPORATION
I
The name of the corporation is MEREDITH CORPORATION.
II
The corporation is organized for the purpose of engaging in any lawful
business for which corporations may be organized under the Iowa Business
Corporation Act.
III
A. Capitalization. The total number of shares of stock of all classes
which the corporation shall have authority to issue is 21,000,000 shares, of
which 1,000,000 shares shall be preferred stock, par value $1.00 per share
(hereinafter called "series preferred stock"), and 20,000,000 shares of which
shall be common stock, par value $1.00 per share (hereinafter called "common
stock").
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the shares of each
class are as follows:
1. The series preferred stock may be issued from time to time in one
or more series, the shares of each series to have the voting powers, full
or limited, and the designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof as are stated and expressed herein or in the
resolution or resolutions providing for the issuance of the series,
adopted by the board of directors as hereinafter provided.
2. Authority is hereby expressly granted to the board of directors
of the corporation, subject to the provisions of this Article III and to
the limitations prescribed by law, to authorize the issuance of one or
more series of series preferred stock and with respect to each series to
fix by resolution or resolutions providing for the issuance of the series
the voting powers, full or limited, if any, of the shares of the series
and the designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
Page 1 of 38
<PAGE>
thereof. Each series shall consist of such number of shares as shall be
stated and expressed in the resolution or resolutions providing for the
issuance of the stock of the series together with such additional number
of shares as the board of directors by resolution or resolutions may from
time to time determine to issue as a part of the series. The board of
directors may from time to time decrease the number of shares of any
series of series preferred stock (but not below the number thereof then
outstanding) by providing that any unissued shares previously assigned to
the series shall no longer constitute part thereof and may assign the
unissued shares to an existing or newly created series.
The authority of the board of directors with respect to each series
shall include, but not be limited to, the determination or fixing of the
following:
(a) The designation of the series.
(b) The dividend rate of the series, the conditions and dates
upon which dividends shall be payable, the relation which the
dividends shall bear to the dividends payable on any other class or
classes of stock, and whether the dividends shall be cumulative or
non-cumulative.
(c) Whether the shares of the series shall be subject to
redemption by the corporation and, if made subject to redemption, the
times, prices and other terms and conditions of the redemption.
(d) The rights of the holders of the shares of the series upon
the dissolution of, or upon the distribution of assets of, the
corporation, and the amount payable on the shares in the event of
voluntary or involuntary liquidation.
(e) The terms and amount of any sinking fund provided for the
purchase or redemption of the shares of the series.
(f) Whether or not the shares of the series shall be
convertible into or exchangeable for shares of any other classes or
of any other series of any class or classes of stock of the
corporation and, if provision be made for conversion or exchange, the
times, prices, rates, adjustments, and other terms and conditions of
the conversion or exchange.
(g) The extent, if any, to which the holders of the shares of
the series shall be entitled to vote with respect to the election of
directors or otherwise.
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<PAGE>
3. The holders of shares of each series of series preferred stock
shall be entitled to receive, when and as declared by the board of
directors, out of funds legally available for the payment of dividends,
dividends at the rates fixed by the board of directors for such series,
and no more, before any dividends, other than dividends payable in common
stock, shall be declared and paid, or set apart for payment, on the common
stock with respect to the same dividend period.
4. Whenever, at any time, dividends on the then outstanding series
preferred stock as may be required with respect to any series outstanding
shall have been paid or declared and set apart for payment and after
complying with respect to any retirement or sinking fund or funds for any
series of series preferred stock, the board of directors may, subject to
the provisions of the resolution or resolutions creating any series of
series preferred stock, declare and pay dividends on the common stock, and
the holders of shares of preferred stock shall not be entitled to share
therein.
5. The holders of shares of each series of series preferred stock
shall be entitled upon liquidation or dissolution or upon the distribution
of the assets of the corporation to such preferences as provided in the
resolution or resolutions creating the series, and no more, before any
distribution of the assets of the corporation shall be made to the holders
of shares of common stock. Whenever the holders of shares of series
preferred stock shall have been paid the full amounts to which they shall
be entitled, the holders of shares of the common stock shall be entitled
to share ratably in all the remaining assets of the corporation.
6. At all meetings of the stockholders of the corporation, the
holders of shares of the common stock shall be entitled to one vote for
each share of common stock held by them. Except as otherwise required by
law and except for such voting powers with respect to the election of
directors or other matters as may be stated in the resolution or
resolutions of the board of directors providing for the issuance of any
series of series preferred stock, the holders of the series shall have no
voting power whatsoever.
7. No holder of any share of any class of stock of the corporation
shall have any preemptive right to subscribe for or acquire additional
shares of stock of any class of the corporation or warrants or options to
purchase, or securities convertible into, shares of any class of stock of
the corporation.
Page 3 of 38
<PAGE>
B. Restrictions on Ownership, Transfer and Voting. So long as the
corporation or any of its subsidiaries is subject to any law of the United
States or any state therein which restricts ownership or voting of capital
stock by aliens (as defined by the bylaws), not more than one-fifth of the
shares outstanding shall be owned of record or voted by or for the account of
aliens or their representatives or affiliates. The board of directors may
issue share certificates representing not more than one-fifth of the shares of
the stock of the corporation at any time outstanding in special form which may
be owned or held by aliens, such certificates to be known as "Foreign Share
Certificates" and to be so marked, but under no circumstances shall the total
amount of voting stock of any class represented by Foreign Share Certificates,
plus the amount of voting stock of that class owned by or for the account of
aliens and represented by certificates not so marked, exceed one-fifth of the
aggregate number of outstanding shares of such class.
Shares of stock shall be transferable on the books of the corporation by
the holder thereof, in person or by duly authorized attorney, upon the
surrender of the certificate representing the shares to be transferred,
properly endorsed; provided, however, that shares of stock other than shares
represented by Foreign Share Certificates shall be transferable to aliens or
any person holding for the account thereof only when the aggregate number of
shares of stock owned by or for the account of aliens will not then be more
than one-fifth of the number of shares of stock outstanding. The board of
directors may direct that, before shares of stock shall be transferred on the
books of the corporation, the corporation may require information as to whether
the proposed transferee is an alien or will hold the stock for the account of
an alien.
If the stock records of the corporation shall at any time disclose alien
ownership of one-fifth or more of the voting stock of any class and it shall be
found by the corporation that any certificate for shares marked "Domestic Share
Certificate" is, in fact, held by or for the account of any alien, the holder
of the shares represented by that certificate shall not be entitled to vote, to
receive dividends or to have any other rights with respect to such shares,
except the right to transfer the shares to a non-alien (as defined in the
bylaws).
If the stock records of the corporation shall at any time disclose alien
ownership of one-fifth or more of the voting stock of any class and a request
is made by an alien to have shares registered in its name or for its account,
the corporation shall be under no obligation to effect the transfer or to issue
or reissue any stock certificates to or for the account of the alien. In
addition, if a proposed transferee of any shares is an alien, and the transfer
to such alien would result in alien ownership of one-fifth or more of the
voting stock of any class, the corporation shall be under no obligation to
Page 4 of 38
<PAGE>
effect the transfer or to issue or reissue any stock certificates to or for the
account of the alien. Further, if it is determined at any time that a transfer
has resulted in alien ownership of one-fifth or more of the voting stock of any
class, the holder of the shares which resulted in the alien ownership of one-
fifth or more of the voting stock shall not be entitled to vote, to receive
dividends or have any other rights with respect to such shares, except the
right to transfer those shares to a non-alien.
Amendment or deletion of these provisions covering restrictions on
ownership, transfer and voting shall require the affirmative vote of at least
80% of each class of outstanding shares of the corporation.
The board of directors shall establish rules, regulations and procedures
to assure compliance with the enforcement of this Article III B.
IV
The number of directors of the corporation shall be fixed from time to
time in the manner provided in the bylaws but shall not be fewer than three nor
more than fifteen. The directors shall be divided into three classes: Class
I, Class II, and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors. At the annual meeting
of stockholders on November 14, 1983, Class I directors shall be elected for a
one-year term, Class II directors for a two-year term and Class III for a
three-year term. At each succeeding annual meeting of stockholders, beginning
in 1984, successors to the class of directors whose term expires at that annual
meeting shall be elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal as possible,
and any additional director of any class shall hold office for a term that
shall coincide with the remaining term of that class, but in no case will a
decrease in the number of directors shorten the term of any incumbent director.
A director shall hold office until the annual meeting for the year in which his
or her term expires and until a successor shall be elected and qualified,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office. Any vacancy occurring on the board of directors may be
filled by a majority of the directors in office, although less than a quorum,
or by a sole remaining director, and any vacancy on the board of directors that
results from an increase in the number of directors may be filled by a majority
of the board of directors in office. Any director elected to fill a vacancy
shall have the same remaining term as that of his or her predecessor.
A director may be removed only for cause and by the affirmative vote of
the holders of not less than 80 percent of the outstanding shares of voting
Page 5 of 38
<PAGE>
stock at a meeting of stockholders duly called for the consideration of such
removal. Cause shall mean conviction of a felony or adjudication of liability
for negligence or misconduct in the performance of a director's duty to the
company.
The affirmative vote of the holders of not less than 80 percent of the
outstanding shares of voting stock is required to amend this provision.
V
Notwithstanding any other provisions of the corporation's Restated
Articles of Incorporation or bylaws (and notwithstanding the fact that some
lesser percentage may be specified by law), any amendment of these Restated
Articles of Incorporation which would permit the holders of stock of the
corporation to amend, alter, change or repeal the bylaws or any part thereof,
shall require the affirmative vote of holders of not less than 80 percent of
the outstanding shares of voting stock of the corporation.
VI
No action required or permitted to be taken at any annual or special
meeting of the stockholders of the corporation may be taken without a meeting
and the power of stockholders to consent in writing, without a meeting, to the
taking of any action is specifically denied.
Any amendment or deletion of the provisions of this Article VI shall
require the affirmative vote of the holders of not less than 80 percent of the
outstanding shares of voting stock of the corporation.
VII
The affirmative vote of the holders of not less than 80 percent of the
outstanding shares of "voting stock" (as hereinafter defined) of the
corporation shall be required for the approval or authorization of any
"business combination" (as hereinafter defined) of the corporation with any
"substantial stockholder" (as hereinafter defined); provided, however, that the
80 percent voting requirement shall not be applicable if:
1. The "continuing directors" of the corporation (as hereinafter
defined) by a two-thirds vote (a) have expressly approved in advance the
acquisition of outstanding shares of voting stock of the corporation that
caused the substantial stockholder to become a substantial stockholder or
(b) have approved the business combination prior to the substantial
stockholder involved in the business combination having become a
substantial stockholder;
Page 6 of 38
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2. The business combination is solely between the corporation and
another corporation, 100 percent of the voting stock of which is owned
directly or indirectly by the corporation; or
3. The business combination is a merger or consolidation and the
cash or fair market value of the property, securities or other
consideration to be received per share by holders of common stock of the
corporation in the business combination is not less than the "fair price"
(as hereinafter defined) of the common stock.
For the purposes of this Article VII:
1. The term "business combination" shall mean (a) any merger or
consolidation of the corporation or a subsidiary with or into a
substantial stockholder, (b) any sale, lease, exchange, transfer or other
disposition, including without limitation a mortgage or any other security
device, of all or any "substantial part" (as hereinafter defined) of the
assets either of the corporation (including without limitation any voting
securities of a subsidiary) or of a subsidiary, to the substantial
stockholder, (c) any merger or consolidation of a substantial stockholder
with or into the corporation or a subsidiary of the corporation, (d) any
sale, lease, exchange, transfer or other disposition of all or any
substantial part of the assets of the substantial stockholder to the
corporation or a subsidiary of the corporation for consideration
aggregating $5,000,000 or more, (e) the issuance of any securities of the
corporation or a subsidiary of the corporation to a substantial
stockholder, (f) any reclassification or recapitalization (including any
reverse stock split) of the corporation or any of its subsidiaries or a
reorganization, in any case having the effect, directly or indirectly, of
increasing the percentage interest of a substantial stockholder in any
class of equity securities of the corporation or such subsidiary, and (g)
any agreement, contract or other arrangement providing for any of the
transactions described in this definition of business combination.
2. The term "substantial stockholder" shall mean and include any
individual, corporation, partnership or other person or entity which,
together with its "affiliates" and "associates" (as defined on September
1, 1983, in Rule 12b-2 under the Securities Exchange Act of 1934),
"beneficially owns" (as defined on September 1, 1983, in Rule 13d-3 under
the Securities Exchange Act of 1934) in the aggregate 20 percent or more
of the outstanding voting stock of the corporation, and any affiliate or
associate of any such individual, corporation, partnership or other person
or entity.
Page 7 of 38
<PAGE>
3. The term "substantial part" shall mean assets having a "fair
value" (as hereinafter defined) in excess of 10 percent of the fair market
value of the total consolidated assets of the corporation in question as
of the end of its most recent fiscal year ending prior to the time the
determination is being made.
4. Without limitation, any shares of common stock of the corporation
that any substantial stockholder has the right to acquire pursuant to any
agreement, or upon exercise of conversion rights, warrants or options, or
otherwise, shall be deemed beneficially owned by the substantial
stockholder.
5. For the purposes of this Article VII, the term "other
consideration to be received" shall include, without limitation, common
stock of the corporation retained by its existing public stockholders in
the event of a business combination in which the corporation is the
surviving corporation.
6. The term "voting stock" shall mean all outstanding shares of
capital stock of the corporation entitled to vote generally in the
election of directors and each reference to a proportion of shares of
voting stock shall refer to such proportion of the votes entitled to be
cast by such shares.
7. The term "continuing director" shall mean one elected as a
director at the 1983 annual stockholders' meeting or one elected or
appointed prior to the time the substantial stockholder in question
acquired such status, or one designated as a continuing director (prior to
his or her initial election or appointment) by a majority of the whole
board, but only if a majority of the whole board shall then consist of
continuing directors, or if a majority of the whole board does not then
consist of continuing directors, by a majority of the then continuing
directors.
8. The term "fair price" shall mean not less than the greater of (a)
the highest per share price paid by the substantial stockholder in
acquiring any of its shares of stock of the corporation or (b) an amount
which bears the same or greater percentage relationship to the market
price of the common stock of the corporation immediately prior to the
announcement of the business combination equal to the highest percentage
relationship that any per share price theretofore paid by the substantial
stockholder for any of its holdings of common stock of the corporation
immediately prior to commencement of the acquisition of the corporation's
common stock by the substantial stockholder.
Page 8 of 38
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9. The term "fair value" shall mean the fair market value thereof at
any time 90 days prior to the date of the consummation of any transaction,
which value and time shall be determined by a majority of the continuing
directors who may, if they wish, be advised on such value by an investment
banking firm selected by them. The fees of any such investment banking
firm shall be paid by the corporation.
The provisions set forth at this Article VII herein may not be repealed or
amended in any respect, unless such action is approved by the affirmative vote
of the holders of not less than 80 percent of the outstanding shares of voting
stock (as defined herein) of the corporation; provided, however, that this 80
percent vote requirement shall not apply if an amendment is recommended to
stockholders by two-thirds of the whole board of directors when a majority of
the members of the board of directors acting upon such matters are continuing
directors.
VIII
By the adoption of these Restated Articles of Incorporation, Articles I
through VII of the previously existing Restated Articles of Incorporation, as
amended, are hereby repealed, and substituted therefor are these Articles I
through VIII; these Restated Articles thus supersede the Restated Articles of
Incorporation and all amendments thereto. These Restated Articles of
Incorporation became effective upon their adoption by the shareholders on the
14th day of November, 1983.
MEREDITH CORPORATION
By: /s/ Gerald D. Thornton
-----------------------------
Gerald D. Thornton
Vice President
By: /s/ Betty Campbell Madden
-----------------------------
Betty Campbell Madden
Corporate Secretary
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<PAGE>
STATE OF IOWA )
) ss:
COUNTY OF POLK )
On this 14th day of November, A. D. 1983, before me, Lynelle D. Aller, a
notary public in and for said county, personally appeared Gerald D. Thornton,
to me personally known, who being by me duly sworn did say that he is a vice
president of said corporation, that the seal affixed to said instrument is the
seal of said corporation and that said Restated Articles of Incorporation were
signed and sealed on behalf of the said corporation by authority of its board
of directors and the said Gerald D. Thornton acknowledged the execution of said
instrument to be the voluntary act and deed of said corporation by it
voluntarily executed.
/s/ Lynelle D. Aller
----------------------------------
Lynelle D. Aller
Notary Public in and for the
State of Iowa
Page 10 of 38
<PAGE>
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
MEREDITH CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF IOWA:
Pursuant to the provisions of Section 58 of the Iowa Business Corporation
Act, Chapter 496A, Code of Iowa, the undersigned corporation adopts the
following Articles of Amendment to its Articles of Incorporation:
I. The name of the corporation is Meredith Corporation. The effective
date of its incorporation was the 9th day of August, 1905. Its original name
was Meredith Publishing Company. On October 10, 1967, the corporate name was
changed to Meredith Corporation. The most recent Restated Articles of
Incorporation were filed November 14, 1983.
II. The following amendment to the Restated Articles of Incorporation was
adopted by the shareholders of the corporation on November 12, 1984, in the
manner prescribed by the Iowa Business Corporation Act:
RESOLVED that the first paragraph of Article III of the Restated
Articles of Incorporation be and hereby is changed and amended to
read as follows:
III. A. Capitalization. The total number of shares of stock of all
classes which the corporation shall have authority to issue is
40,000,000 shares, of which 5,000,000 shares shall be preferred
stock, par value $1.00 per share (hereinafter called "series
preferred stock"), and 35,000,000 shares of which shall be common
stock, par value $1.00 per share (hereinafter called "common stock").
III. The number of shares outstanding and entitled to vote at the time of
such adoption was 9,427,155.
IV. The number of shares voted for the increase in the number of
authorized shares of common stock was 7,659,954, the number of shares voted
against was 453,977, and the number of votes abstaining was 21,743.
V. The number of shares voted for the increase in the number of
authorized shares of series preferred stock was 6,661,069, the number of shares
voted against was 1,088,991, and the number of votes abstaining was 114,190.
Page 11 of 38
<PAGE>
VI. No exchange, reclassification, or cancellation of issued shares is
provided for in the amendment.
VII. Such amendment does not effect a change in the amount of stated
capital.
Dated: November 14, 1984.
Meredith Corporation
By /s/ Gerald D. Thornton
--------------------------
Gerald D. Thornton
Its Vice President
By /s/ Betty Campbell Madden
--------------------------
Betty Campbell Madden
Its Secretary
STATE OF IOWA )
) ss.
COUNTY OF POLK )
On this 14th day of November, A.D., 1984, before me, Lynelle D. Kobe, a
Notary Public in and for said County, personally appeared Gerald D. Thornton,
to me personally known, who being by me duly sworn did say that he is vice
president of said corporation, that the seal affixed to said instrument is the
seal of said corporation and that said Articles of Amendment were signed and
sealed on behalf of the said corporation by authority of its board of directors
and the said Gerald D. Thornton and Betty Campbell Madden acknowledged the
execution of said instrument to be the voluntary act and deed of said
corporation by it voluntarily executed.
/s/ Lynelle D. Kobe
--------------------------
Lynelle D. Kobe
Notary Public in and for the
State of Iowa
Page 12 of 38
<PAGE>
ARTICLES OF MERGER
OF
MEREDITH PUBLICATIONS, INC.
INTO
MEREDITH CORPORATION
- - - - - - - - - - - - - - - - - - - -
Pursuant to the provisions of the Iowa Business Corporation Act, the
undersigned hereby certifies:
FIRST: That the following Plan of Merger has been duly approved by
the Board of Directors of the surviving corporation:
(a) The name of the subsidiary corporation is Meredith Publications,
Inc., and the name of the surviving corporation is Meredith Corporation.
(b) The terms and conditions of the proposed merger are as follows:
All outstanding shares of the wholly-owned subsidiary will be
cancelled upon effect of the merger.
SECOND: That the designation and number of outstanding shares of
each class of the subsidiary corporation and the number of such shares of each
class owned by the surviving corporation, are as follows:
Number of Designation Number of Shares
Name of Shares of Owned by
Corporation Outstanding Class Surviving Corporation
___________ ___________ ___________ _____________________
Meredith Publi- 10,000 Common 10,000 (100%)
cations, Inc.
THIRD: That there are no holders of shares of the subsidiary
corporation (Meredith Publications, Inc.) not owned by the surviving
corporation (Meredith Corporation) and the surviving corporation waived the
mailing of a copy of the plan of merger.
Page 13 of 38
<PAGE>
IN WITNESS WHEREOF, this Certificate has been signed this 24th day of
June, 1986.
MEREDITH CORPORATION
By: /s/ Gerald D. Thornton
--------------------------------------
Gerald D. Thornton
Vice President-Administrative Services
By: /s/ Betty Campbell Madden
--------------------------------------
Betty Campbell Madden
Corporate Secretary
STATE OF IOWA )
) ss:
COUNTY OF POLK )
On this 24th day of June A.D., 1986, before me, Marna G. Ford, a
Notary Public in and for said county, personally appeared Gerald D. Thornton,
to me personnally known, who being by me duly sworn did say that he is Vice
President-Administrative Services of said corporation, that the seal affixed to
said instrument is the seal of said corporation and that said Articles of
Merger were signed and sealed on behalf of the said corporation by authority of
its Board of Directors and the said Gerald D. Thornton acknowledged the
execution of said instrument to be the voluntary act and deed of said
corporation by it voluntarily executed.
______________________________________
Notary Public in and for said county
Page 14 of 38
<PAGE>
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
MEREDITH CORPORATION
__________________________________
To the Secretary of State
of the State of Iowa
Pursuant to the provisions of Section 496A.58 of the Iowa Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Restated Articles of Incorporation:
I. The name of the corporation is Meredith Corporation. The effective
date of its incorporation was the 9th day of August, 1905. Its original name
was Successful Farming Publishing Company.
II. The following amendment to the Restated Articles of Incorporation was
adopted by the shareholders of the corporation on December 15, 1986 in the
manner prescribed by the Iowa Business Corporation Act:
RESOLVED that Article IIIA of the Restated Articles of Incorporation
of the corporation be amended to read as follows:
III.
A. Capitalization. The total number of shares of stock of all classes
which the corporation shall have authority to issue is 65,000,000 shares, of
which 5,000,000 shares shall be preferred stock, par value $1.00 per share
(hereinafter called "series preferred stock"), 50,000,000 shares of which shall
be common stock, par value $1.00 per share (hereinafter called "common stock")
and 10,000,000 shares of which shall be class B common stock, par value $1.00
per share (hereinafter called "class B stock").
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions thereof, of the shares of each
class are as follows:
1. The powers, preferences and rights of the common stock and class B
stock, and the qualifications, limitations or restrictions thereof, shall be in
all respects identical, except as otherwise required by law or expressly
provided in this Article IIIA.
Page 15 of 38
<PAGE>
2. (a) At each annual or special meeting of stockholders, each holder of
common stock shall be entitled to one (1) vote in person or by proxy for each
share of common stock standing in his name on the stock transfer records of the
corporation and (except as provided in subparagraph (b) of this subdivision 2)
each holder of class B stock shall be entitled to ten (10) votes in person or
by proxy for each share of class B stock standing in his name on the stock
transfer records of the corporation. Except as required pursuant to the
Business Corporation Act of the State of Iowa, all actions submitted to a vote
of stockholders shall be voted on by the holders of common stock and class B
stock voting together as a single class.
(b) Notwithstanding subparagraph (a) of this subdivision 2, each holder of
class B stock shall be entitled to only one (1) vote, in person or by proxy,
for each share of class B stock standing in his name on the stock transfer
records of the corporation with respect to the following matters:
(i) the removal of any director of the corporation pursuant to Article IV
of these Restated Articles of Incorporation:
(ii) Any amendment to these Restated Articles of Incorporation which would
permit the holders of stock of the corporation to amend, alter, change or
repeal the bylaws or any part thereof, pursuant to Article V of these
Restated Articles of Incorporation; and
(iii) Any repeal or amendment of Article IV or Article VI of these
Restated Articles of Incorporation.
3. If and when dividends on the common stock and class B stock are
declared payable from time to time by the board of directors from funds legally
available therefor, whether payable in cash, in property or in shares of stock
of the corporation, the holders of common stock and the holders of class B
stock shall be entitled to share equally, share for share, in such dividends.
4. (a) The holder of each outstanding share of class B stock shall have
the right at any time, or from time to time, at such holder's option to convert
such share into one fully paid and non-assessable share of common stock, on and
subject to the terms and conditions hereinafter set forth.
(b) In order to exercise the conversion privilege, the holder of any
shares of class B stock to be converted shall present and surrender the
certificate representing such shares during usual business hours at any office
or agency of the corporation maintained for the transfer of class B stock and
shall deliver a written notice of the election of the holder to convert the
shares represented by such certificate or any portion thereof specified in such
notice. Such notice shall also state the name or names (with address) in which
Page 16 of 38
<PAGE>
the certificate or certificates for shares of common stock which shall be
issuable on such conversion shall be issued. If so required by the
corporation, any certificate for shares surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
corporation, duly executed by the holder of such shares or his duly authorized
representative. Except in the case of an automatic conversion pursuant to
clause (i) of subparagraph (a) of subdivision 5, subparagraph (d) of
subdivision 5 or subdivision 8, each conversion of shares of class B stock
shall be deemed to have been effected on the date (the "conversion date") on
which the certificate or certificates representing such shares shall have been
surrendered and such notice and any required instruments of transfer shall have
been received as aforesaid, and the person or persons in whose name or names
any certificate or certificates for shares of common stock shall be issuable on
such conversion shall be deemed to have become immediately prior to the close
of business on the conversion date the holder or holders of record of the
shares of common stock represented thereby.
(c) As promptly as practicable after the presentation and surrender for
conversion, as herein provided, of any certificate for shares of class B stock,
the corporation shall issue and deliver at such office or agency, to or upon
the written order of the holder thereof, certificates for the number of shares
of common stock issuable upon such conversion. In case any certificate for
shares of class B stock shall be surrendered for conversion of a part only of
the shares represented thereby, the corporation shall deliver at such office or
agency, to or upon the written order of the holder thereof, a certificate or
certificates for the number of shares of class B stock represented by such
surrendered certificate, which are not being converted. The issuance of
certificates for shares of common stock issuable upon the conversion of shares
of class B stock shall be made without charge to the converting holder for any
tax imposed on the corporation in respect of the issue thereof. The
corporation shall not, however, be required to pay any tax which may be payable
with respect to any transfer involved in the issue and delivery of any
certificate in a name other than that of the holder of the shares being
converted, and the corporation shall not be required to issue or deliver any
such certificate unless and until the person requesting the issue thereof shall
have paid to the corporation the amount of such tax or has established to the
satisfaction of the corporation that such tax has been paid.
(d) Upon any conversion of shares of class B stock into shares of common
stock pursuant hereto, no adjustment with respect to dividends shall be made;
only those dividends shall be payable on the shares so converted as may be
declared and may be payable to holders of record of shares of class B stock on
a date prior to the conversion date with respect to the shares so converted;
and only those dividends shall be payable on shares of common stock issued upon
such conversion as may be declared and may be payable to holders of record of
shares of common stock on or after such conversion date.
Page 17 of 38
<PAGE>
(e) All shares of class B stock which shall have been surrendered for
conversion as herein provided shall no longer be deemed to be outstanding, and
all rights with respect to such shares, including the rights, if any, to
receive notices and to vote, shall thereupon cease and terminate, except only
the right of the holders thereof, subject to the provisions of subparagraph (c)
of this subdivision 4, to receive shares of common stock in exchange therefor.
All shares of class B stock surrendered for conversion shall be cancelled and
may not be reissued.
(f) Such number of shares of common stock as may from time to time be
required for such purpose shall be reserved for issuance upon conversion of
outstanding shares of class B stock.
5. (a) No person holding shares of class B stock (hereinafter called a
"class B holder") may transfer, and the corporation shall not register the
transfer of, such shares of class B stock, whether by sale, assignment, gift,
bequest, appointment or otherwise, except to a Permitted Transferee of such
class B holder, which term shall have the following meanings:
(i) In the case of a class B holder who is a natural person and the
holder of record and beneficial owner of the shares of class B stock
subject to said proposed transfer, "Permitted Transferee" means (A) the
spouse of such class B holder, (B) a lineal descendant of a grandparent of
such class B holder or a spouse of any such lineal descendant, (C) the
trustee of a trust (including a voting trust) for the benefit of one or
more class B holders, other lineal descendants of a grandparent of such
class B holder, the spouse of such class B holder, the spouses of such
other lineal descendants and an organization contributions to which are
deductible for federal income, estate or gift tax purposes (hereinafter
called a "Charitable Organization"), and for the benefit of no other
person, provided that such trust may grant a general or special power of
appointment to such class B holder, the spouse of such class B holder, any
lineal descendant of such class B holder or the spouse of any such lineal
descendant, and may permit trust assets to be used to pay taxes, legacies
and other obligations of the trust or the estate of such class B holder
payable by reason of the death of such class B holder and provided that
such trust prohibits transfer of shares of class B common stock to persons
other than Permitted Transferees, as defined in clause (ii) below, (D) the
estate of such deceased class B holder, (E) a Charitable Organization
established by such class B holder, such class B holder's spouse, a lineal
descendant or a grandparent of such class B holder, or a spouse of any
such lineal descendant, and (F) a corporation all the outstanding capital
stock of which is owned by, or a partnership all the partners of which
are, one or more of such class B holders, other lineal descendants of a
grandparent of such class B holder or a spouse of any such lineal
Page 18 of 38
<PAGE>
descendant, and the spouse of such class B holder; provided that if any
share of capital stock of such a corporation (or of any survivor or a
merger or consolidation of such a corporation), or any partnership
interest in such a partnership, is acquired by any person who is not
within such class of persons, all shares of class B stock then held by
such corporation or partnership, as the case may be, shall be deemed,
without further action, to be automatically converted into shares of
common stock, and stock certificates formerly representing such shares of
class B common stock shall thereupon and thereafter be deemed to represent
the like number of shares of common stock.
(ii) In the case of a class B holder holding the shares of class B
stock subject to said proposed transfer as trustee pursuant to a trust
other than a trust described in clause (iii) below, "Permitted Transferee"
means (A) the person who established such trust and (B) a Permitted
Transferee of such person determined pursuant to clause (i) above.
(iii) In the case of a class B holder holding the shares of class B
stock subject to said proposed transfer as trustee pursuant to a trust
which was irrevocable on the record date (or the initial distribution of
shares of class B stock ("Record Date"), "Permitted Transferee" means any
person to whom or for whose benefit principal may be distributed either
during or at the end of the term of such trust whether by power of
appointment or otherwise or any "Permitted Transferee" of such person
determined pursuant to clause (i), (ii), (iv), (v) or (vi) hereof, as the
case may be.
(iv) In the case of a class B holder who is the record (but not
beneficial) owner of the shares of class B stock subject to said proposed
transfer as nominee for the person who was the beneficial owner thereof
on the Record Date, "Permitted Transferee" means such beneficial owner and
a Permitted Transferee of such beneficial owner determined pursuant to
clause (i), (ii), (ii), (v) or (vi) hereof, as the case may be.
(v) In the case of a class B holder which is a partnership and the
holder of record and beneficial owner of the shares of class B stock
subject to said proposed transfer, "Permitted Transferee" means any
partner of such partnership or any "Permitted Transferee" of such partner
determined pursuant to clause (i), (ii), (iii), (iv) or (vi) hereof, as
the case may be.
(vi) In the case of a class B holder which is a corporation (other
than a Charitable Organization described in subclause (E) of clause (i)
above) and the holder of record and beneficial owner of the shares of
class B stock subject to said proposed transfer, "Permitted Transferee"
Page 19 of 38
<PAGE>
means any stockholder of such corporation receiving shares of class B
stock through a dividend or through a distribution made upon liquidation
of such corporation and the survivor of a merger or consolidation of such
corporation or any "Permitted Transferee" of such stockholder determined
pursuant to clause (i), (ii), (iii), (iv) or (v) hereof, as the case may
be.
(vii) In the case of a class B holder which is the estate of a
deceased class B holder, or which is the estate of a bankrupt or insolvent
class B holder, and provided such deceased, bankrupt or insolvent class B
holder, as the case may be, was the record and beneficial owner of the
shares of class B stock subject to said proposed transfer, "Permitted
Transferee" means a Permitted Transferee of such deceased, bankrupt or
insolvent class B holder as determined pursuant to clause (i), (v) or (vi)
above, as the case may be.
(b) Notwithstanding anything to the contrary set forth herein, any class
B holder may pledge such holder's shares of class B stock to a pledgee pursuant
to a bona fide pledge of such shares as collateral security for indebtedness
due to the pledgee, provided that such shares shall not be transferred to or
registered in the name of the pledgee and shall remain subject to the
provisions of this subdivision 5. In the event of foreclosure or other similar
action by the pledgee, such pledged shares of class B stock may only be
transferred to a Permitted Transferee of the pledgor or converted into shares
of common stock, as the pledgee may elect.
(c) For purposes of this subdivision 5:
(i) the relationship of any person that is derived by or through
legal adoption shall be considered a natural one.
(ii) Each joint owner of shares of class B stock shall be considered
a "class B holder" of such shares.
(iii) A minor for whom shares of class B stock are held pursuant to
a Uniform Gifts to Minors Act or similar law shall be considered a class B
holder of such shares.
(iv) Unless otherwise specified, the term "person" means both
natural persons and legal entitles.
(d) Any purported transfer of shares of class B stock not permitted
hereunder shall result, without further action, in the automatic conversion of
the transferee's shares of class B stock into shares of common stock, effective
on the date of such purported transfer. The corporation may, as a condition to
Page 20 of 38
<PAGE>
the transfer or the registration of transfer of shares of class B stock to a
purported Permitted Transferee, require the furnishing of such affidavits or
other proof as it deems necessary to establish that such transferee is a
Permitted Transferee.
6. (a) Shares of class B stock shall be registered in the name(s) of the
beneficial owner(s) thereof (as hereafter defined) and not in "street" or
nominee" names; provided, however, certificates representing shares of class B
stock issued as a stock dividend on the corporation's then outstanding common
stock may be registered in the same name and manner as the certificates
representing the shares of common stock with respect to which the shares of
class B stock were issued. For the purposes of this subdivision 6, the term
"beneficial owner(s)"` of any shares of class B stock shall mean the person or
persons who possess the power to dispose, or to direct the disposition, of such
shares.
(b) The corporation shall note on the certificates representing the
shares of class B stock that there are restrictions on transfer and
registration of transfer imposed by subdivision 5 and this subdivision 6.
7. After the initial distribution of shares of class B stock, additional
shares of class B stock shall be issued by the corporation only pursuant to the
corporation's Incentive Stock Plan or Management Incentive Plan for which
shares of class B stock are duly reserved for issuance as of the Record Date.
8. If at any time following the initial issuance of shares of class B
stock the number of outstanding shares of class B stock as reflected on the
stock transfer books of the corporation is less than 9% of the aggregate number
of issued and outstanding shares of common stock and class B stock, then the
outstanding shares of class B stock shall be deemed, without further action, to
be automatically converted into shares of common stock, and stock certificates
formerly representing outstanding shares of class B stock shall thereupon and
thereafter be deemed to represent a like number of shares of common stock, and
any outstanding right to receive class B stock shall automatically become the
right to receive a like number of shares of common stock.
9. The common stock and class B stock are subject to all the powers,
rights, privileges, preferences and priorities of the series preferred stock as
may be stated herein and as shall be stated and expressed in any resolution or
resolutions adopted by the board of directors pursuant to authority expressly
granted to and vested in it by the provisions of this Article IIIA.
10. The series preferred stock may be issued from time to time in one or
more series, the shares of each series to have the voting powers, full or
limited, and the designations, preferences and relative, participating,
Page 21 of 38
<PAGE>
optional or other special rights, and qualifications, limitations or
restrictions thereof as are stated and expressed herein or in the resolution or
resolutions providing for the issuance of the series, adopted by the board of
directors as hereinafter provided.
11. Authority is hereby expressly granted to the board of directors of
the corporation, subject to the provisions of this Article IIIA and to the
limitations prescribed by law, to authorize the issuance of one or more series
of series preferred stock and with respect to each series to fix by resolution
or resolutions providing for the issuance of the series the voting powers, full
or limited, if any, of the shares of the series and the designations,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof. Each series shall
consist of such number of shares as shall be stated and expressed in the
resolution or resolutions providing for the issuance of the stock of the series
together with such additional number of shares as the board of directors by
resolution or resolutions may from time to time determine to issue as a part of
the series. The board of directors may from time to time decrease the number
of shares of any series of series preferred stock (but not below the number
thereof then outstanding) by providing that any unissued shares previously
assigned to the series shall no longer constitute a part thereof and may assign
the unissued shares to an existing or newly created series.
The authority of the board of directors with respect to each series shall
include, but not be limited to, the determination or fixing of the following:
(a) The designation of the series.
(b) The dividend rate of the series, the conditions and dates upon
which dividends shall be payable, the relation which the dividends shall
bear to the dividends payable on any other class or classes of stock, and
whether the dividends shall be cumulative or non-cumulative.
(c) Whether the shares of the series shall be subject to redemption
by the corporation and, if made subject to redemption, the times, prices
and other terms and conditions of the redemption.
(d) The rights of the holders of the shares of the series upon the
dissolution of, or upon the distribution of assets of, the corporation,
and the amount payable on the shares in the event of voluntary or
involuntary liquidation.
(e) The terms and amount of any sinking fund provided for the
purchase or redemption of the shares of the series.
Page 22 of 38
<PAGE>
(f) Whether or not the shares of the series shall be convertible
into or exchangeable for shares of any other classes or of any other
series of any class or classes of stock of the corporation and, if
provision be made for conversion or exchange, the times, prices, rates,
adjustments, and other terms and conditions of the conversion or exchange.
(g) The extent, if any, to which the holders of the shares of the
series shall be entitled to vote with respect to the election of directors
or otherwise.
12. The holders of shares of each series of series preferred stock shall
be entitled to receive, when and as declared by the board of directors, out of
funds legally available for the payment of dividends, dividends at the rates
fixed by the board of directors for such series, and no more, before any
dividends, other than dividends payable in common stock or class B common
stock, shall be declared and paid, or set apart for payment, on the common
stock or the class B common stock with respect to the same dividend period.
13. Whenever, at any time, dividends on the then outstanding series
preferred stock as may be required with respect to any series outstanding shall
have been paid or declared and set apart for payment and after complying with
respect to any retirement or sinking fund or funds for any series of series
preferred stock, the board of directors may, subject to the provisions of the
resolution or resolutions creating any series of series preferred stock,
declare and pay dividends on the common stock and the class B stock, and the
holders of shares of preferred stock shall not be entitled to share therein.
14. The holders of shares of such series of series preferred stock shall
be entitled upon liquidation or dissolution or upon the distribution of the
assets of the corporation to such references as provided in the resolution or
resolutions creating the series, and no more, before any distribution of the
assets of the corporation shall be made to the holders of shares of common
stock and class B stock. Whenever the holders of shares of series preferred
stock shall have been paid the full amounts to which they shall be entitled,
the holders of shares of the common stock and class B stock shall be entitled
to share ratably in all the remaining assets of the corporation.
15. Except as otherwise required by law and except for such voting powers
with respect to the election of directors or other matters as may be stated in
the resolution or resolutions of the board of directors providing for the
issuance of any series of series preferred stock, the holders of the series
shall have no voting power whatsoever.
16. No holder of any share of any class of stock of the corporation shall
have any preemptive right to subscribe for or acquire additional shares of
stock of any class of the corporation or warrants or options to purchase, or
securities convertible into, shares of any class of stock of the corporation.
Page 23 of 38
<PAGE>
17. No holder of any share of any class of stock of the corporation shall
sell the vote pertaining to such share or issue a proxy to vote such share in
consideration of any sum of money or anything of value.
III. The number of shares of the corporation outstanding at the time of
such adoption was 9,572,834, all of which are of one class and all of which
were entitled to vote on the aforesaid amendment.
IV. The number of outstanding shares which were voted for adoption of the
aforesaid amendment is 5,886,702, the number of said shares which voted against
the same is 1,832,526, and the number of said shares which abstained is 75,010.
V. The date on which the aforesaid amendment shall become effective is
the date on which the Iowa Secretary of State issues a Certificate of
Amendment.
Executed on December 15, 1986.
Meredith Corporation
By /s/ Robert A. Burnett
---------------------------------
Robert A. Burnett, President
By /s/ Betty Campbell Madden
---------------------------------
Betty Campbell Madden, Secretary
STATE OF IOWA )
) SS.:
COUNTY OF POLK )
On this 15th day of December, A.D., 1986, before me, a Notary Public in
and for the State and County aforesaid, personally appeared Robert A. Burnett,
to me personally known, who, being by me duly sworn, did say that he is the
President of Meredith Corporation, the corporation which executed the foregoing
instrument; that he signed said instrument upon behalf of said corporation; and
that he acknowledged said instrument to be the voluntary act and deed of said
corporation by it voluntarily executed and his signing to be his voluntary act
and deed by him voluntarily signed.
IN WITNESS WHEREOF, I have placed my hand and seal on the date aforesaid.
/s/ Marna G. Ford
--------------------------------
Marna G. Ford, Notary Public
Commission expires: May 15, 1989
Page 24 of 38
<PAGE>
STATEMENT OF CANCELLATION OF REACQUIRED SHARES
(OTHER THAN REDEEMABLE SHARES)
of
MEREDITH CORPORATION
TO THE SECRETARY OF STATE
OF THE STATE OF IOWA:
Pursuant to the provisions of Section 65 of the Iowa Business Corporation Act,
Chapter 496A, Code of Iowa, the undersigned corporation submits the following
statement of cancellation by resolution of its Board of Directors of shares of
the corporation reacquired by it, other than redeemable shares redeemed or
purchased:
1. The name of the Corporation is Meredith Corporation.
2. The effective date of incorporation was August 9, 1905.
3. A resolution was duly adopted by the Board of Directors on February 9,
1987, authorizing the cancellation of 239,114 shares, itemized as follows:
Class Series Number of Shares
_____ ______ ________________
Common N/A 235,322
The amount of stated capital represented by the shares to be cancelled is
235,322 Dollars ($235,322).
4. The aggregate number of issued shares, itemized by classes and series and
par value, if any, after giving effect to such cancellation is 19,153,346,
itemized as follows:
Class Series Par Value Number of Shares
_____ ______ _________ ________________
Common N/A $1 10,255,942
Class B N/A $1 8,897,404
5. The amount of the stated capital of the corporation, after giving effect to
such cancellation, is $19,153,346
Dated: February 10, 1987
Page 25 of 38
<PAGE>
MEREDITH CORPORATION
By: /s/ William H. Straw
--------------------------
William H. Straw,
Its Vice President-Finance
And /s/ Betty Campbell Madden
--------------------------
Betty Campbell Madden,
Its Secretary
STATE OF IOWA )
) ss.
COUNTY OF POLK )
On this 10th day of February, A.D. 1987, before me, Marna G. Ford, a
Notary Public in and for said County, personally appeared William H. Straw and
Betty Campbell Madden, to me personally known, who being by me duly sworn did
say that he is vice president of said corporation and that she is secretary of
said corporation and that said Statement of Cancellation was signed on behalf
of the said corporation by authority of its board of directors and the said
William H. Straw and Betty Campbell Madden acknowledged the execution of said
instrument to be the voluntary act and deed of said corporation by it
voluntarily executed.
/s/ Marna G. Ford
----------------------------
Marna G. Ford
Notary Public in and for the
State of Iowa
Page 26 of 38
<PAGE>
STATEMENT OF CHANGE OF REGISTERED AGENT
OF
MEREDITH CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF IOWA:
Pursuant to the provisions of Section 12 of the Iowa Business Corporation
Act, Chapter 496A, Code of Iowa, the undersigned corporation, organized under
the laws of the State of Iowa, submits the following statement for the purpose
of changing its registered office or its registered agent, or both, in the
State of Iowa:
I. The name of the corporation is Meredith Corporation.
II. The address of its present registered office is 1716 Locust Street,
Des Moines, in the County of Polk.
III. The name of its present registered agent, Gerald D. Thornton.
IV. The name of its successor registered agent, Thomas G. Fisher.
V. The address of its registered office and the address of the business
office of its registered agent as changed, will be identical.
VI. Such change was authorized by resolution duly adopted by its Board of
Directors.
Dated: May 18, 1987.
MEREDITH CORPORATION
/s/ Robert A. Burnett
--------------------------
By: Robert A. Burnett
Its: President
STATE OF IOWA )
) SS.
COUNTY OF POLK )
I, Robert A. Burnett, being first duly sworn on oath depose and state that
I am the President of Meredith Corporation, and that I executed the foregoing
instrument as President of the corporation, and that the statements contained
therein are true.
Subscribed and sworn to before me this 18th day of May, A.D., 1987.
/s/ Karen L. Hayes
--------------------------
Karen L. Hayes
Notary Public in and
for the State of Iowa
Page 27 of 38
<PAGE>
ARTICLES OF MERGER
OF
SAIL PUBLICATIONS, INC.
INTO
MEREDITH CORPORATION
Pursuant to the provisions of Section 496A.72 of the Code of Iowa,
Meredith Corporation, a corporation organized under the laws of the State of
Iowa, and owning at least ninety per cent of the shares of Sail Publications,
Inc., a corporation organized under the laws of the State of Massachusetts,
hereby executes the following articles of merger:
FIRST: The following plan of merger was approved by resolution of the
Board of Directors of Meredith Corporation adopted on May 13, 1987.
(a) The name of the subsidiary corporation is Sail Publications,
Inc., and the name of the surviving corporation owning at least ninety per cent
of its shares is Meredith Corporation.
(b) The terms and conditions of the proposed merger are as follows:
All outstanding shares of the wholly-owned subsidiary will be
cancelled upon effect of the merger.
SECOND: The number of outstanding shares of each class of the subsidiary
corporation and the number of shares of each class owned by the surviving
corporation are as follows:
No. of Shares No. of Shares
Class Outstanding Owned by Parent
_____ _____________ _______________
Common 500 500 (100%)
THIRD: There are no holders of shares of the subsidiary corporation (Sail
Publications, Inc.) not owned by the surviving corporation (Meredith
Corporation) and the surviving corporation waived the mailing of a copy of
the plan of merger.
Dated: June 9, 1987.
Page 28 of 38
<PAGE>
MEREDITH CORPORATION
By: /s/ Gerald D. Thornton
--------------------------
Gerald D. Thornton
Its Vice President-
Administrative Services
By: /s/ Betty Campbell Madden
--------------------------
Betty Campbell Madden,
Its Secretary
STATE OF IOWA )
) ss:
COUNTY OF POLK )
On this 9th day of June A.D., 1987, before me, Marna G. Ford, a Notary
Public in and for said county, personally appeared Gerald D. Thornton, to me
personally known, who being by me duly sworn did say that he is Vice President-
Administrative Services of said corporation, an Iowa corporation, that the seal
affixed to said instrument is the seal of said corporation and that said
Articles of Merger were signed and sealed on behalf of the said corporation by
authority of its Board of Directors and the said Gerald D. Thornton
acknowledged the execution of said instrument to be the voluntary act and deed
of said corporation by it voluntarily executed.
/s/ Marna G. Ford
------------------------------------
Marna G. Ford
Notary Public in and for said county
Page 29 of 38
<PAGE>
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
MEREDITH CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF IOWA:
Pursuant to the provisions of Section 58 of the Iowa Business Corporation
Act, Chapter 496A, Code of Iowa, the undersigned corporation adopts the
following Articles of Amendment to its Restated Articles of Incorporation:
I. The name of the corporation is Meredith Corporation. The effective
date of its incorporation was the 9th day of August, 1905. Its original name
was Successful Farming Publishing Company.
II. The following amendment to the Restated Articles of Incorporation was
adopted by the shareholders of the corporation on November 14, 1988, in the
manner prescribed by the Iowa Business Corporation Act, providing for a new
Article IX to be added to the Restated Articles of Incorporation to be and read
as follows:
"IX
A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the corporation or its shareholders,
(ii) for acts or omissions not in good faith or which involve the
intentional misconduct or a knowing violation of the law, (iii) for any
transaction from which the director derives an improper personal benefit,
or (iv) under Section 496A.44 of the Iowa Business Corporation Act.
Any repeal or modification of this Article shall not adversely affect any
right or protection of a director of the corporation existing at the time
of such repeal or modification."
III. The number of shares outstanding and entitled to vote at the time of
such adoption was 19,307,579, consisting of 14,171,381 shares of common stock,
each entitled to one vote and 5,136,198 shares of class B common stock, each
entitled to ten votes, voting together as a class.
IV. The number of shares voting, and votes cast, for, against and abstaining
on the proposal to amend the Restated Articles of Incorporation by adding
Article IX were as follows:
Page 30 of 38
<PAGE>
For Against Abstain
--- ------- -------
Common - Shares 10,409,982 485,589 70,098
Votes 10,409,982 485,589 70,998
Class B - Shares 3,958,428 52,676 7,869
Votes 39,584,280 526,760 78,690
Total - Shares 14,368,410 538,265 77,967
Votes 49,994,262 1,012,349 148,788
Executed December , 1988.
MEREDITH CORPORATION
By /s/ Jack D. Rehm
-------------------------
Jack D. Rehm
Its President and
Chief Operating Officer
By /s/ Thomas G. Fisher
-------------------------
Thomas G. Fisher
Its Secretary
STATE OF IOWA )
) ss.
COUNTY OF POLK )
On this 13th day of December, A.D., 1988, before me, Marna G. Ford, a
Notary Public in and for said County, personally appeared Jack D. Rehm, to me
personally known, who being by me duly sworn did say that he is Vice President
of said corporation, that the seal affixed to said instrument is the seal of
said corporation and that said Articles of Amendment were signed and sealed on
behalf of said corporation by authority of its Board of Directors and the said
Gerald D. Thornton and Thomas G. Fisher acknowledged the execution of said
instrument to be the voluntary act and deed of said corporation by it
voluntarily executed.
/s/ Marna G. Ford
-------------------------
Marna G. Ford
Notary Public in and for the
State of Iowa
Commission expires May 15, 1989
Page 31 of 38
<PAGE>
ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
MEREDITH CORPORATION
To the Secretary of State of the State of Iowa
Pursuant to the provisions of Section 496A.58 of the Iowa Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Restated Articles of Incorporation:
I. The name of the corporation is Meredith Corporation. The effective
date of its incorporation was the 9th day of August, 1905. Its original name
was Successful Farming Publishing Company.
II. The following amendment to the Restated Articles of Incorporation
was adopted by the shareholders of the corporation on November 14, 1994, in the
manner prescribed by the Iowa Business Corporation Act:
RESOLVED, that the first unnumbered paragraph of Article III.A. of the
Company's Restated Articles of Incorporation is amended in its entirety
to read as follows:
A. Capitalization. The total number of shares of stock of all classes
which the corporation shall have authority to issue is 100,000,000
shares, of which 5,000,000 shares shall be preferred, par value $1.00
per share (hereinafter called "series preferred stock"), 80,000,000
shares of which shall be common stock, par value $1.00 per share
(hereinafter called "common stock)" and 15,000,000 shares of which
shall be class B common stock, par value $1.00 per share (hereinafter
called "class B stock").
RESOLVED FURTHER, Article III.A.3. of the Company's Restated Articles of
Incorporation is amended in its entirety to read as follows:
If and when dividends on the common stock and class B stock are
declared payable from time to time by the board of directors from
funds legally available therefor, whether payable in cash, in property
or in shares of stock of the corporation, the holders of common stock
and the holders of class B stock shall be entitled to share equally,
share for share, in such dividends, except that if a share dividend
of common stock is declared on the common stock, an equal share
Page 32 of 38
<PAGE>
dividend of class B stock shall be declared on the class B stock,
and if a share dividend of class B stock is declared on the class B
stock, an equal share dividend of common stock shall be declared on
the common stock. In no case may a share dividend of class B stock
be paid on common stock, nor may a share dividend of common stock be
paid on class B stock.
RESOLVED FURTHER, Article III.A.5.(c) of the Company's Restated Articles
of Incorporation is amended in its entirety to add the following as (v):
(v) The term "grandparent" means an ancestor in any degree born after
January 1, 1876.
RESOLVED FURTHER, Article III.A.7. of the Company's Restated Articles of
Incorporation is amended in its entirety to read as follows:
Notwithstanding any other provision of these Restated Articles of
Incorporation, the authorized shares of class B stock which may be
issued after the date of this amendment to the Restated Articles of
Incorporation may only be issued in the form of a share dividend on
class B stock.
III. The number of shares of the corporation outstanding at the time of
such adoption was 13,712,741, consisting of 10,149,073 shares of common stock,
each entitled to one vote and 3,563,668 shares of class B common stock, each
entitled to ten votes, voting together as a class.
IV. The number of shares voting, and votes cash, for, against, and
abstaining on the proposal to amend the first unnumbered paragraph of Article
III.A., Article III.A.3. and Article III.A.7. of the Restated Articles of
Incorporation to increase the authorized shares of class B stock solely for
issuance as share dividends on class B stock, to increase the authorized shares
of common stock and to modify provisions relating to the payment of share
dividends were as follows:
For Against Abstain
Common - Shares 3,970,846.0 3,644,885.0 26,348.0
Votes 3,970,846.0 3,644,885.0 26,348.0
Class B - Shares 3,122,699.7 22,623.8 6,917.8
Votes 31,226,997.0 226,238.0 69,178.0
Total Shares 7,093,545.7 3,667,508.8 33,265.8
Total Votes 35,197,843.0 3,871,123.0 95,526.0
------------ ----------- --------
Page 33 of 38
<PAGE>
V. The number of shares voting, and votes cast, for, against, and
abstaining on the proposal to amend Article III.A.5.(c) of the Restated
Articles of Incorporation to broaden the class of "permitted transferees" of
class B stock were as follows:
For Against Abstain
Common - Shares 6,455,712.0 1,121,586.0 30,816.0
Votes 6,455,712.0 1,121,586.0 30,816.0
Class B - Shares 3,118,742.8 19,409.2 14,089.3
Votes 31,187,428.0 194,092.0 140,893.0
Total Shares 9,574,454.8 1,140,995.2 44,905.3
Total Votes 37,643,140.0 1,315,678.0 171,709.0
------------ ----------- ---------
Executed: December 12, 1994
MEREDITH CORPORATION
By /s/ William T. Kerr
-----------------------
William T. Kerr
President and
Chief Operating Officer
By /s/ Thomas L. Slaughter
-----------------------
Thomas L. Slaughter
Its Secretary
STATE OF IOWA )
)ss:
COUNTY OF POLK )
On this 12th day of December, A.D., 1994, before me, Teresa T. Rinker, a
Notary Public in and for said County, personally appeared WILLIAM T. KERR and
THOMAS L. SLAUGHTER, to me personally known, who being by me duly sworn, did
say that they are the President & Chief Operating Officer and Corporate
Secretary respectively of said corporation, that the seal affixed to said
instrument is the seal of said corporation and that said Articles of Amendment
were signed and sealed on behalf of said corporation by authority of its Board
of Directors and that the said JACK D. REHM and THOMAS L. SLAUGHTER
acknowledged the execution of said instrument to be the voluntary act and deed
of said corporation by it voluntarily executed.
__________________________________________
Notary Public in and for the State of Iowa
Page 34 of 38
<PAGE>
ARTICLES OF MERGER
OF
MEREDITH VIDEO PUBLISHING CORPORATION
INTO
MEREDITH CORPORATION
Pursuant to the provisions of Section 496A.72 of the Code of Iowa,
Meredith Corporation, a corporation organized under the laws of the State of
Iowa, and owning at least ninety percent of the shares of Meredith Video
Publishing Corporation, a corporation organized under the laws of the State of
Iowa, hereby executes the following Articles of Merger:
FIRST: The following plan of merger was approved by resolution of the
Board of Directors of Meredith Corporation adopted on May 10, 1995.
(a) The name of the subsidiary corporation is Meredith Video Publishing
Corporation and the name of the surviving corporation owning at least
ninety percent of its shares is Meredith Corporation.
(b) The terms and conditions of the proposed merger are as follows:
All outstanding shares of the wholly-owned subsidiary corporation
will be canceled upon effect of the merger.
SECOND: The number of outstanding shares of each class of stock of the
subsidiary corporation and the number of shares of each class of stock owned by
the surviving corporation are as follows:
No. of Shares No. of Shares
Class Outstanding Owned by Parent
----- ------------- ---------------
Common 115,000 115,000
THIRD: There are no holders of shares of the subsidiary corporation
(Meredith Video Publishing Corporation) not owned by the surviving corporation
(Meredith Corporation) and the surviving corporation waived the mailing of a
copy of the plan of merger.
Page 35 of 38
<PAGE>
Dated: May 16, 1995 MEREDITH CORPORATION
By: /s/ William T. Kerr
-----------------------------------
William T. Kerr
President & Chief Operating Officer
By: /s/ Thomas L. Slaughter
-----------------------------------
Thomas L. Slaughter
Its Secretary
STATE OF IOWA )
) SS:
COUNTY OF POLK )
On this 16th day of May, 1995, before me, Teresa T. Rinker, a Notary
Public in and for said county, personally appeared WILLIAM T. KERR and THOMAS
L. SLAUGHTER, to me personally known, who being by me duly sworn did say that
they are the President and Chief Operating Officer and the Corporate Secretary
respectively of Meredith Corporation, an Iowa corporation, that the seal
affixed to said instrument is the seal of said corporation and that said
Articles of Merger were signed and sealed on behalf of the said corporation by
authority of its Board of Directors and the said WILLIAM T. KERR and THOMAS L.
SLAUGHTER acknowledged the execution of said instrument to be the voluntary act
and deed of said corporation by it voluntarily executed.
__________________________________________
Notary Public in and for the State of Iowa
Commission expires: October 1, 1997
Page 36 of 38
<PAGE>
ARTICLES OF CORRECTION
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
MEREDITH CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF IOWA:
Pursuant to the provisions of Section 490.124 of the Iowa Business
Corporation Act, the undersigned corporation adopts the following Articles of
Correction to its Restated Articles of Incorporation:
I. The Restated Articles of Incorporation were adopted by the
shareholders of Meredith Corporation and filed with the Secretary of State of
the State of Iowa on November 14, 1983.
II. Article VII, Section 8 of the Restated Articles of Incorporation, as
filed, was incorrectly stated in that at the end of the sixth line of said
Section, the words bore to the market price of the common stock of the
corporation, which followed the word corporation and preceded the word
immediately were inadvertently omitted.
III. The correct statement of Article VII, Section 8 of the Restated
Articles of Incorporation of Meredith Corporation is as follows:
8. The term "fair price" shall mean not less than the greater of (a)
the highest per share price paid by the substantial stockholder
in acquiring any of its shares of stock of the corporation or (b)
an amount which bears the same or greater percentage relationship
to the market price of the common stock of the corporation
immediately prior to the announcement of the business combination
equal to the highest percentage relationship that any per share
price theretofore paid by the substantial stockholder for any of
its holdings of common stock of the corporation bore to the
market price of the common stock of the corporation immediately
prior to commencement of the acquisition of the corporation s
common stock by the substantial stockholder.
Page 37 of 38
<PAGE>
Dated: February 8, 1996 MEREDITH CORPORATION
By: /s/ William T. Kerr
-----------------------------------
William T. Kerr
President & Chief Operating Officer
By: /s/ Thomas L. Slaughter
-----------------------------------
Thomas L. Slaughter
Its Secretary
STATE OF IOWA )
) SS:
COUNTY OF POLK )
On this 8th day of February, 1996, before me, Teresa T. Rinker, a Notary
Public in and for said county, personally appeared WILLIAM T. KERR and THOMAS
L. SLAUGHTER, to me personally known, who being by me duly sworn did say that
they are the President and Chief Operating Officer and the Corporate Secretary
respectively of Meredith Corporation, an Iowa corporation, that the seal
affixed to said instrument is the seal of said corporation and that said
Articles of Correction were signed and sealed on behalf of the said corporation
by authority of its Board of Directors and the said WILLIAM T. KERR and THOMAS
L. SLAUGHTER acknowledged the execution of said instrument to be the voluntary
act and deed of said corporation by it voluntarily executed.
/s/ Teresa T. Rinker
------------------------------------------
Notary Public in and for the State of Iowa
Commission expires: October 1, 1997
Page 38 of 38
Exhibit 3.2
-----------
BYLAWS
OF
MEREDITH CORPORATION
Effective
January 29, 1996
ARTICLE I. OFFICES
The principal office of the corporation in the State of Iowa shall be
located in the City of Des Moines, County of Polk, or as otherwise or more
particularly identified in the most recently filed (at any time), annual report
of the corporation on file with the Iowa Secretary of State.
ARTICLE II. SHAREHOLDERS
Section 1. ANNUAL MEETING. The annual meeting of the shareholders shall
be held on the second Monday in the month of November in each year, at the hour
of 10:00 a.m., at the principal office of the corporation or at such other
date, time and place as may be fixed from time to time by resolution of the
Board of Directors and set forth in the notice of the meeting, for the purpose
of electing directors and transacting such other business as may properly come
before the meeting.
At an annual meeting of the shareholders, only such business shall be
conducted as shall have been properly brought before an annual meeting. To be
properly brought before an annual meeting, business must be (i) specified in
the notice of the meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (ii) otherwise properly brought before the
meeting by or at the direction of the Board of Directors or (iii) otherwise
properly brought before the meeting by a shareholder of the corporation who was
a shareholder of record at the time of giving of notice provided for in this
Section, who is entitled to vote at the meeting and who complied with the
notice procedures set forth in this Section. For business to be properly
brought before an annual meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the corporation at
the principal executive offices of the corporation. To be timely, a
shareholder's notice shall be delivered not less than 90 days prior to the
first anniversary of the preceding year's meeting; provided, however, that in
the event that the date of the annual meeting is advanced by more than 30 days
or delayed by more than 60 days from such anniversary date, notice by the
shareholder, to be timely, must be so delivered not later than the 90th day
prior to such annual meeting or the 10th day following the day on which public
announcement (as defined herein) of the date of such meeting is first made.
Page 1 of 28
<PAGE>
Such shareholder's notice shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the meeting and the reasons for
conducting such business at the meeting and any material interest in such
business of such shareholder and the beneficial owner, if any, on whose behalf
the proposal is made; and (ii) as to the shareholder giving the notice and the
beneficial owner, if any, on whose behalf the proposal is made (A) the name and
address of such shareholder, as they appear on the corporation's books, and the
name and address of such beneficial owner and (B) the class and number of
shares of the corporation which are owned beneficially and of record by such
shareholder and such beneficial owner; and (iii) in the event that such
business includes a proposal to amend either the Articles of Incorporation or
the Bylaws of the corporation, the language of the proposed amendment.
Notwithstanding anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with this paragraph, and
the Chairman of the Board or other person presiding at an annual meeting of
shareholders, may refuse to permit any business to be brought before an annual
meeting without compliance with the foregoing procedures. For the purposes of
this paragraph "public announcement" shall mean disclosure in a press release
reported by the Dow Jones News Service, Associated Press or comparable national
news service or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition
to the provisions of this paragraph, a shareholder shall also comply with all
applicable requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth herein. Nothing in these
Bylaws shall be deemed to affect any rights of shareholders to request
inclusion of proposals in the corporation's proxy statement pursuant to Rule
14a-8 under the Exchange Act.
Section 2. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, may be called by the Chairman of the Board, the
President, the Secretary, or the Board of Directors. The holders of shares
having not less than one-tenth of the voting power of the corporation may
demand in writing stating the purpose or purposes, and signed, dated and
delivered to the Secretary of the corporation, that a special meeting of the
shareholders be held. The time, date and place of any such special meeting
shall be determined by the Board of Directors or at its direction, by the
Chairman. Business transacted at a special meeting of the shareholders shall
be confined to the purpose or purposes of the meeting described in the notice
of the meeting.
Section 3. PLACE OF SHAREHOLDERS' MEETING. The Board of Directors may
designate any place, either within or without the State of Iowa as the place of
meeting for any annual meeting or for any special meeting of shareholders. If
no designation is made the place of meeting shall be the principal office of
the corporation in the State of Iowa.
Page 2 of 28
<PAGE>
Section 4. NOTICE OF 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 days, nor more than sixty days before the date of the meeting,
either personally or by mail, by or at the direction of the Chairman of the
Board, the President, the Secretary, or the Board of Directors, to each
shareholder 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 shareholder at the address as it appears on the stock transfer
books of the corporation, with postage thereon prepaid.
Section 5. POSTPONEMENT OF MEETINGS. Any previously scheduled annual or
special meeting of shareholders may be postponed by resolution of the Board of
Directors upon public announcement (as defined in Article II, Section 1 of
these Bylaws) made on or prior to the date previously scheduled for such annual
or special meeting.
Section 6. FIXING OF RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors of the corporation may fix in advance a
date as the record date for any such determination of shareholders, such date
in any case to be not more than seventy days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the particular
action requiring such determination of shareholders is to be taken. If no
record date is fixed for the determination of shareholders entitled to notice
of or to vote at a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the day before the first date on which notice of the
meeting is mailed or the day before 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 shareholders. In order to
determine the shareholders entitled to demand a special meeting, the record
date shall be the sixtieth day preceding the date of receipt by the corporation
of written demands sufficient to require the calling of such meeting, unless
otherwise fixed by the Board of Directors. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof, unless the Board of Directors selects a new record date or unless a
new record date is required by law.
Section 7. VOTING LISTS. After the record date for a meeting has been
fixed, the officer or agent having charge of the stock transfer books for
shares of the corporation shall make, at least ten days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at such
meeting, or any adjournment thereof, arranged by voting group and within each
Page 3 of 28
<PAGE>
voting group, in alphabetical order, with the address of and the number and
class of shares held by each, which list, for a period beginning two business
days after notice of the meeting was first given for which the list was
prepared and continuing through the meeting, shall be kept on file at the
principal office of the corporation or at the place identified in the meeting
notice in the city where the meeting will be held. The list shall be subject
to inspection by any shareholder at any time during usual business hours. 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 shareholder during the whole time
of the meeting. The list furnished to the corporation by its stock transfer
agent shall be prima facie evidence as to who are the shareholders entitled to
examine such list or transfer books or to vote at any meeting of shareholders.
Section 8. QUORUM. At any meeting of the shareholders, a majority of the
votes entitled to be cast on the matter by a voting group constitutes a quorum
of that voting group for action on that matter, unless the representation of a
different number is required by law, and in that case, the representation of
the number so required shall constitute a quorum. If a quorum shall fail to
attend any meeting, the chairman of the meeting or a majority of the votes
present may adjourn the meeting to another place, date or time. When a meeting
is adjourned to another place, date or time, notice need not be given of the
adjourned meeting if the place, date and time thereof are announced at the
meeting at which the adjournment is taken; provided, however, that if the date
of any adjourned meeting is more than one hundred twenty (120) days after the
date for which the meeting was originally noticed, or if a new record date is
fixed for the adjourned meeting, notice of the place, date and time of the
adjourned meeting shall be given in conformity herewith. At any adjourned
meeting, any business may be transacted which might have been transacted at the
original meeting.
Section 9. PROXIES. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by the shareholder's
duly authorized attorney in fact. Such proxy shall be filed with the Secretary
of the corporation before or at the time of the meeting. No proxy shall be
valid after eleven months from the date of its execution, unless otherwise
provided in the proxy. No holder of any share of any class of stock of the
corporation shall sell the vote pertaining to such share or issue a proxy to
vote such share in consideration of any sum of money or anything of value.
Section 10. VOTING OF SHARES. Each outstanding share entitled to vote
shall be entitled to vote as follows:
(a) At each annual or special meeting of shareholders, each holder
of common stock shall be entitled to one [1] vote in person or by proxy
for each share of common stock standing in the holder's name on the stock
transfer records of the corporation, and (except as provided in subsection
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[b] of this Section 9) each holder of class B stock shall be entitled to
ten [10] votes in person or by proxy for each share of class B stock
standing in the holder's name on the stock transfer records of the
corporation. Except as required pursuant to the Business Corporation Act
of the State of Iowa, all actions submitted to a vote of shareholders
shall be voted on by the holders of common stock and class B stock voting
together as a single class.
b) Notwithstanding subsection [a] of this Section 9, each holder of
class B stock shall be entitled to only one [1] vote, in person or by
proxy, for each share of class B stock standing in the holder's name on
the stock transfer records of the corporation with respect to the
following matters:
(i) The removal of any director of the corporation pursuant to
Article IV of the Articles of Incorporation;
(ii) Any amendment to the Articles of Incorporation which would
permit the holders of stock of the corporation to amend, alter,
change or repeal the Bylaws or any part thereof, pursuant to Article
V of the Articles of Incorporation; and
(iii) Any repeal or amendment of Article IV or Article VI of the
Articles of Incorporation.
Section 11. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation may be voted by such officer, agent or proxy as the
Bylaws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator may be
voted, either in person or by proxy, without a transfer of such shares. Shares
standing in the name of a trustee may be voted by the trustee, either in person
or by proxy, but no trustee shall be entitled to vote shares so held without a
transfer of such shares into the name of the trustee.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof if authority so to do be contained in an
appropriate order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
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Neither treasury shares nor, absent special circumstances, shares held by
another corporation if a majority of the shares entitled to vote for the
election of directors of such other corporation is held by the corporation,
shall be voted at any meeting or counted in determining the total number of
outstanding shares at any given time.
Section 12. VOTING BY BALLOT. Voting by shareholders on any question or
in any election may be viva voce unless the presiding officer shall order or
any shareholder shall demand that voting be by ballot.
ARTICLE III. BOARD OF DIRECTORS
Section 1. GENERAL POWERS. The business and affairs of the corporation
shall be managed by its Board of Directors.
Section 2. NUMBER, TENURE AND QUALIFICATIONS; NOMINATIONS. Within the
limits set forth in Article IV of the Articles of Incorporation, the number of
directors of the corporation shall be as fixed from time to time by resolution
of the Board of Directors. The directors shall be divided into classes, and
hold office for the terms as provided in Article IV of the Articles of
Incorporation. Directors need not be residents of the State of Iowa or
shareholders of the corporation.
Nominations of persons for election as directors may be made by the Board
of Directors or by any shareholder entitled to vote for the election of
directors. Any shareholder entitled to vote for the election of directors may
nominate a person or persons for election as director only if written notice of
such shareholder's intent is delivered to the Secretary of the corporation at
the principal executive offices of the corporation (i) with respect to an
election to be held at an annual meeting of shareholders, not later than 90
days prior to the first anniversary of the preceding year's annual meeting, or
as set out below, and (ii) with respect to an election to be held at a special
meeting of shareholders for the election of directors, not later than 10 days
following the date on which public announcement (as defined in Article II,
Section 1 of these Bylaws) of the date of such meeting is first made. In the
event that the date of the annual meeting is advanced by more than 30 days or
delayed by more than 60 days from the anniversary date of the annual meeting,
notice by the shareholder must be delivered not less than 90 days prior to such
annual meeting or the 10th day following the day on which public announcement
of the date of such meeting is first made. Notwithstanding anything in the
foregoing sentence to the contrary, in the event that the number of directors
to be elected to the Board of Directors of the corporation is increased and
there is no public announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors made by the corporation
at least 100 days prior to the first anniversary of the preceding year's annual
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meeting, a shareholder's notice required by this Section shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary of the
corporation not later than the close of business on the 10th day following the
day on which such public announcement is first made.
Such shareholder's notice shall set forth: (a) the name and address of the
shareholder who intends to make the nomination and the name, address, age, and
principal occupation or employment of the person or persons to be nominated;
(b) a representation that the shareholder is a holder of record of stock of the
corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) the number and class of shares of the corporation which are owned
by such shareholder and the beneficial owner, if any, and the number and class
of shares, if any, beneficially owned by the nominee; (d) a description of all
arrangements or understandings between the shareholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder; (e) such other
information regarding each nominee that is required to be disclosed in
connection with the solicitation of proxies for the election of directors, or
as otherwise required, in each case pursuant to Regulation 14A under the
Exchange Act (including, without limitation, such person's written consent to
being named in a proxy statement as a nominee and to serving as a director if
nominated). The Chairman of the Board or other person presiding at a meeting
of shareholders may refuse to acknowledge the nomination of any person not made
in accordance with the procedures prescribed by these Bylaws, and in that event
the defective nomination shall be disregarded.
Section 3. REGULAR MEETINGS. A regular meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately after, and at
the same place as, the annual meeting of shareholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Iowa, for the holding of additional regular meetings without other
notice than such resolution.
Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the Chairman of the Board, the President,
Secretary or any two directors. The person or persons authorized to call
special meetings of the Board of Directors may fix any place, either within or
without the State of Iowa, as the place for holding any special meeting of the
Board of Directors called by them.
Section 5. NOTICE. Notice of any special meeting of the Board of
Directors shall be given at least two days previously thereto by written notice
delivered personally or mailed to each director at the director's business
address, or by telephone, cable, telefax, wireless or telegram. If mailed,
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such notice shall be deemed to be delivered when deposited in the United States
mail so addressed, with postage thereon prepaid. If notice be given by
telegram such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any director may waive notice of any
meeting. The attendance of a director 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 to the transaction of any business because the
meeting is not lawfully called or convened. 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 6. QUORUM. A majority of the number of directors fixed pursuant
to Section 2 of this Article III shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 7. MANNER OF ACTING. Except as otherwise specified in these
Bylaws, the act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
Section 8. VACANCIES. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors. A director elected to
fill a vacancy shall be elected for a term which shall expire at the next
election of directors by the shareholders. A director elected by the
shareholders to fill a vacancy shall be elected for the unexpired term of the
director last elected by the shareholders with respect to the position being
filled. Any directorship to be filled by reason of any increase in the number
of directors by not more than thirty percent (30%) of the number of directors
last approved by the shareholders, may be filled by the Board of Directors for
a term of office continuing only until the next election of directors by the
shareholders.
Section 9. COMPENSATION. By resolution of the Board of Directors, those
directors who are not at the time active employees of the corporation may be
paid an annual retainer and a fixed sum for attendance at each meeting of the
Board of Directors. All directors may be reimbursed for expenses incurred in
connection with their services. No such payment shall preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor.
Section 10. PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
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the director's dissent shall be entered in the minutes of the meeting or unless
the director shall file a written dissent to such action with the person acting
as the Secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered or certified mail to the Secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
Section 11. INFORMAL ACTION BY DIRECTORS. Any action required to be
taken at a meeting of the directors, or any other action which may be taken at
a meeting of the directors, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
directors entitled to vote with respect to the subject matter thereof.
Section 12. EXECUTIVE COMMITTEE. An Executive Committee consisting of
two or more members of the Board of Directors may be designated by the Board of
Directors at the time of the annual meeting or at such other time as the Board
of Directors may determine. The chairman of said committee shall be the person
elected by the Board of Directors to the office of Chairman of the Executive
Committee, and such officer shall be designated a member of said committee. If
an Executive Committee is designated, it shall, during the intervals between
the meetings of the Board of Directors and so far as it lawfully may, possess
and exercise all of the authority of the Board of Directors in the management
of the business of the corporation, in all cases in which specific directions
shall not have been given by the Board of Directors, provided that
notwithstanding the foregoing, the Executive Committee shall not have
authority:
(1) to authorize dividends or other distributions;
(2) to approve or propose to shareholders actions or proposals required
by the Iowa Business Corporation Act to be approved by shareholders;
(3) to fill vacancies on the Board of Directors or any committee thereof;
(4) to amend the Articles of Incorporation of the corporation;
(5) to adopt, amend or repeal Bylaws;
(6) to approve a plan of merger not requiring shareholder approval;
(7) to authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the Board of Directors;
(8) to authorize or approve the issuance or sale of, or any contract for
sale of shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares; except
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that the Board of Directors may authorize a committee or senior
officer to do so within limits specifically prescribed by the Board
of Directors; or
(9) to remove the Chairman of the Board, Chairman of the Executive
Committee or the President, or to appoint any person to fill a
vacancy in any such office.
Section 13. FINANCE COMMITTEE. A Finance Committee consisting of two or
more members of the Board of Directors may be designated by the Board of
Directors at the time of the annual meeting or at such time as the Board of
Directors may determine. If a Finance Committee is designated, said
committee's duties shall be to:
(1) review corporate financial policies and procedures and make
recommendations to the Board of Directors or the Executive Committee
in regard thereto;
(2) provide financial advice and counsel to management;
(3) formulate dividend policy and make recommendations to the Board of
Directors in regard thereto;
(4) make provisions for the appointment of depositories of funds of the
corporation and the specification of conditions of deposit and
withdrawal of said funds;
(5) review specific corporate financing plans and advise the Board of
Directors or Executive Committee in regard thereto;
(6) supervise corporate investment portfolios;
(7) give consideration and approval or disapproval of capital expenditure
requests by management within limits established by the Board of
Directors;
(8) review annual capital end operating budgets and advise the Board of
Directors or Executive Committee regarding the financial implications
thereof;
(9) monitor the corporation's financial condition and standing in the
financial and investment communities;
(10) review and make recommendations to the Board of Directors concerning
acquisitions and dispositions;
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(11) monitor the risk management activities of the corporation; and
(12) consider any other matters concerning the corporation's financial
structure, condition, financing plans and policies and make
recommendations to the Board of Directors on such matters.
Section 14. COMPENSATION/NOMINATING COMMITTEE. A Compensation/Nominating
Committee consisting of two or more members of the Board of Directors who are
not aligned with the management of the corporation may be designated by the
Board of Directors at the time of the annual meeting, or at such other time as
the Board of Directors may determine. If a Compensation/Nominating Committee
is designated, said committee's duties shall be to:
(1) review and approve changes in corporate directors' and officers'
salaries;
(2) review and approve salary administration plans and changes therein
which are recommended by management for adoption by the corporation
or product divisions thereof;
(3) annually review the corporation's salary administration programs and
make changes therein as may be required;
(4) approve prior to adoption any management incentive, bonus or stock
plans, all agreements related thereto, and administer and supervise
such plans as the language thereof may require;
(5) review all employee benefit plans, including the levels and types of
benefits provided thereunder, and propose amendments thereto for
approval by the Board of Directors;
(6) recommend to the Board of Directors the appointment of such
management personnel or committees as it deems desirable for the
administration, detailed study, or recommendation of possible changes
in employee benefit plans;
(7) act as a nominating committee to propose and recommend to the
Board of Directors nominees for election or appointment as directors;
and
(8) engage in such additional review and assessment as it may deem
necessary or appropriate to perform the foregoing duties.
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Section 15. AUDIT COMMITTEE. An Audit Committee consisting of two or
more members of the Board of Directors who are not aligned with the management
of the corporation shall be designated by the Board of Directors at the time of
the annual meeting, or at such other time as the board may determine. The
duties of said committee shall be to:
(1) review and recommend annually to the Board of Directors the
engagement of independent public accountants to audit the books and
records of the corporation and its subsidiaries;
(2) meet prior to the start of any audit by the outside audit firm and
review the scope of the audit to be performed;
(3) meet prior to the publication of the annual report and review results
of the audit by the outside audit firm for the year;
(4) meet with and determine the responsibilities and scope of the
internal audit department and review internal audit reports;
(5) review the corporation's accounting principles and policies and
internal accounting controls;
(6) review the effect of changes in accounting principles or of other
developments emanating from the profession, its standard board or
any governmental authority;
(7) carry on such other activities so as to give additional assurance
regarding the financial information used by the Board of Directors
in making decisions;
(8) carry on such other activities so as to give additional assurance
regarding the financial information distributed to outsiders; and
(9) review the standards and policies of proper business conduct and
practices for the corporation and its employees and monitor the
implementation of, and the compliance with the standards and
policies.
Section 16. PENSION COMMITTEE. A Pension Committee consisting of two or
more members of the Board of Directors may be designated by the Board of
Directors at the time of the annual meeting or at such time as the Board of
Directors may determine. If a Pension Committee is designated, said
committee's duties shall be to:
(1) review the corporation's pension plans and propose amendments thereto
for approval by the Board of Directors;
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(2) review the levels and types of benefits provided under the
corporation's pension plans and other features thereof, including
eligibility, vesting and the form of payment of benefits;
(3) recommend to the Board of Directors investment policy and objectives
for all employee pension funds, review the investment performance of
such funds and recommend revision of the policy and objectives as may
be required;
(4) recommend to the Board of Directors the funding policies for all
employee pension funds;
(5) recommend to the Board of Directors the appointment of such
management personnel or committees as it deems desirable for the
administration, detailed study, or recommendation of possible changes
in the corporation's pension plans; and
(6) engage in such additional review and assessment as it may deem
necessary or appropriate to perform the bargaining duties.
Section 17. LEGAL AFFAIRS COMMITTEE. A Legal Affairs Committee consisting
of two or more members of the Board of Directors may be designated by the Board
of Directors at the time of the annual meeting, or such other time as the board
may determine. If a Legal Affairs Committee is designated, said committee's
duties shall be to:
1. review the structure, functions and personnel of the corporation's
internal legal staff;
2. review the procedures established for the engagement of outside
counsel and the monitoring of their activities;
3. meet with the general counsel of the corporation, and outside counsel
engaged by the corporation, to review all significant threatened,
pending and settled litigation involving the corporation; including
the impact, or potential impact, of such matters upon the policies,
planning, operations or finances of the corporation;
4. receive reports from the general counsel and outside counsel, as to
changes in the law which have or could have an effect upon the
corporation or its policies, planning, operations or finances, and
assist in the development of strategies in response thereto; and
5. inquire into the existence, and encourage the development, of
practices and procedures, including legal audits, which could benefit
the corporation in avoiding litigation or other legal problems.
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Section 18. COMMITTEE PROCEDURES. The chairman of each committee, other
than the Executive Committee, shall be selected by the Board of Directors or by
the Executive Committee. In the absence of the chairman of any committee, a
temporary chairman may be appointed from among the members of the committee.
Each committee shall keep minutes of the proceedings of its meetings which
shall be submitted to the Board of Directors at the next meeting of the Board
of Directors. A majority of members of any committee shall constitute a quorum
for the transaction of business. Meetings of any committee shall be called
upon the request of any member of the committee or the Chairman of the Board or
the Secretary, and notice of such meetings shall in each instance be given to
each member of the committee at least twenty-four hours before the meeting
either orally or in writing. A fixed sum and expenses of attendance, if any,
may be allowed and paid for attendance at each meeting of any committee, the
amount of such sum to be designated by the Board of Directors. Each director
serving on a committee shall hold such office until the annual meeting held
next after such director's designation, or until such director's successor
shall have been designated.
ARTICLE IV. OFFICERS
Section 1. NUMBER. The officers of the corporation shall be a Chairman
of the Board, a Chairman of the Executive Committee, a President who, unless
otherwise determined by the Board, shall be the Chief Executive Officer of the
corporation, and the Chief Operating Officer of the corporation), one or more
Group Presidents, one or more Executive Vice Presidents, one or more Senior
Vice Presidents or one or more Vice Presidents (the number thereof to be
determined by the Board of Directors), a Secretary, a Treasurer, and a
Controller, and such other officers as the Board of Directors may from time to
time designate by resolution, each of whom shall be elected by the Board of
Directors. Any two or more offices may be held by the same person. In its
discretion, the Board of Directors may delegate the powers or duties of any
officer to any other officer or agents, notwithstanding any provision of these
Bylaws, and the Board of Directors may leave unfilled for any such period as it
may fix, any office except those of Chairman of the Board, President, Vice
President-Finance and Secretary.
Section 2. ELECTION AND TERM OF OFFICE. The officers of the corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until such officer's
successor shall have been duly elected or until death or until such officer
shall resign or shall have been removed in the manner hereinafter provided.
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Section 3. REMOVAL. Any officer or agent 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 would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed. Any officer or agent elected by the Board of Directors
except the Chairman of the Board, Chairman of the Executive Committee and
President, may be removed by the Executive Committee. Any officer or agent
elected by the Board of Directors except the Chairman of the Board and the
Chairman of the Executive Committee may be removed by the President.
Section 4. VACANCIES. A vacancy in the office of Chairman of the Board,
Chairman of the Executive Committee or President because of death, resignation,
removal, disqualification or otherwise, may be filled only by the Board of
Directors for the unexpired portion of the term. A vacancy in any other office
may be filled either by the Executive Committee or by the Chairman of the Board
or, after consultation with the Chairman of the Board, by the President .
Section 5. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be the
Chief Executive Officer of the corporation and shall in general supervise and
control all of the business, policies and affairs of the corporation and all
other officers of the corporation. The Chairman of the Board shall preside at
all meetings of the shareholders and of the Board of Directors and shall be a
member of the Executive Committee. The Chairman of the Board shall perform
such other duties as may be prescribed by the Board of Directors from time to
time and shall have the general powers and duties usually vested in the Chief
Executive Officer of a corporation.
Section 6. CHAIRMAN OF THE EXECUTIVE COMMITTEE. The Chairman of the
Executive Committee shall be a member of that committee and preside at all of
its meetings, and in the absence of the Chairman of the Board, shall preside at
all meetings of the shareholders and the Board of Directors. The Chairman of
the Executive Committee shall perform such other duties as from time to time
may be assigned by the Board of Directors.
Section 7. PRESIDENT. The President shall be the Chief Operating Officer
of the corporation and shall have the management of and exercise general
supervision over its operating groups and all its Group Presidents. The
President shall perform such other duties as may be prescribed by the Board of
Directors or the Chairman of the Board from time to time and shall have the
general powers and duties usually vested in the Chief Operating Officer of a
corporation.
Section 8. GROUP PRESIDENTS. Each Group President, within the
limitations placed by the policies adopted by the Board of Directors, or the
Chairman of the Board, and or the President, shall be a corporate officer and
shall be the Chief Operating Officer of the operating group assigned and shall
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in general supervise and control such business and affairs of the group and
operations assigned thereto and perform such other duties as may be prescribed
from time to time by the Board of Directors, the Chairman of the Board and the
President.
Section 9. EXECUTIVE VICE PRESIDENTS, SENIOR VICE PRESIDENTS AND VICE
PRESIDENTS. Each corporate Executive Vice President, Senior Vice President or
Vice President shall perform such duties as may be assigned by the Board of
Directors, or the Chairman of the Board or the President. An Executive Vice
President, Senior Vice President or Vice President may be assigned the
operating authority for managing one or more operating units or service
operations of the company as established by the Board of Directors. Upon
assignment by the Board of Directors of operating authority for an operation or
service unit, such Executive Vice President, Senior Vice President or Vice
President shall in general supervise and control all of the business and
affairs of such operation or service unit, subject only to such supervision and
direction as the Board of Directors, the Chairman of the Board or the President
may provide. Each Executive Vice President, Senior Vice President and Vice
President shall be authorized to sign contracts and other documents related to
the corporation or to the operations under such officer's supervision and
control.
Section 10. VICE PRESIDENT FINANCE. The Vice President-Finance shall be
the principal and chief accounting and principal and chief finance officer of
the corporation. In that capacity, the Vice President-Finance shall keep and
maintain, or cause to be kept and maintained accurate, correct books and
records of accounts of the properties and business transactions of the
corporation, including accounts of the assets, liabilities, receipts,
disbursements, gains, losses, capital, retained earnings, and shares. The Vice
President-Finance shall deposit all monies and other valuables in the name and
to the credit of the corporation with such depositories as may be designated by
the Board of Directors or by the Finance Committee appointed by the Board of
Directors. The Vice President-Finance shall disburse the funds of the
corporation as may be ordered by the Board of Directors, shall render to the
Chairman of the Board, or President and or the Board of Directors, upon their
request, an account of the financial condition of the corporation, and shall
have such other powers and perform such other duties as may be prescribed from
time to time by the Board of Directors, or the Chairman of the Board or the
President.
Section 11. THE SECRETARY. The Secretary shall: (a) keep the minutes of
the shareholders, Board of Directors, and committees of the board meetings in
one or more books provided for that purpose; (b) see that all notices are duly
given in accordance with the provisions of these Bylaws or as required by law;
(c) be custodian of the corporate records and of the seal of the corporation
and see that the seal of the corporation is affixed to all documents the
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execution of which on behalf of the corporation under its seal is duly
authorized; (d) keep a register of the post office address of each shareholder
which shall be furnished to the Secretary by such shareholder, unless such
register is maintained by the transfer agent or registrar of the corporation;
(e) have general charge of the stock transfer books of the corporation; and (f)
in general perform all duties incident to the office of Secretary and such
other duties as from time to time may be assigned by the Board of Directors, or
the Chairman of the Board or the President.
Section 12. THE TREASURER. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the corporation;
receive and give receipts for monies due and payable to the corporation from
any source whatsoever, and deposit all such monies in the name of the
corporation in such banks, trust companies or other depositories as shall be
selected in accordance with the provisions of Article VI of these Bylaws; (b)
be responsible for filing all required tax returns, and (c) in general perform
all of the duties incident to the office of treasurer and such other duties as
from time to time may be assigned by the Board of Directors, or the Chairman of
the Board, or the President or the Vice President-Finance.
Section 13. THE CONTROLLER. The Controller shall maintain adequate
records showing the financial condition of the corporation and the results of
its operations by established accounting periods, and see that adequate audits
thereof are regularly and currently made. The Controller shall perform such
other duties as from time to time may be assigned by the Board of Directors, or
the Chairman of the Board, or the President or the Vice President-Finance.
Section 14. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
Assistant Secretaries, when authorized by the Board of Directors, may sign with
the Chairman of the Board or the President or a Vice President certificates for
shares of the corporation, the issuance of which shall have been authorized by
a resolution of the Board of Directors. The Assistant Secretaries, in general,
shall perform such duties as shall be assigned to them by the Secretary, or by
the Chairman of the Board, the President, or the Board of Directors. The
Assistant Treasurers, in general, shall perform such duties as shall be
assigned to them by the Treasurer or by the Chairman of the Board, or the
President, or the Board of Directors or the Vice President-Finance.
Section 15. OTHER ASSISTANT AND ACTING OFFICERS. The Board of Directors
or the Chairman of the Board or, after consultation with the Chairman of the
Board, the President shall have the power to appoint any person to act as
assistant to any officer, or to perform the duties of such officer whenever for
any reason it is impracticable for such officer to act personally, and such
assistant or acting officer so appointed by the Chairman of the Board, the
Board of Directors or, after consultation with the Chairman of the Board, by
the President, shall have the power to perform all the duties of the office to
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which the person is so appointed to be assistant, or as to which the person is
so appointed to act, except as such power may be otherwise defined or
restricted by the Board of Directors.
Section 16. SALARIES. The salaries of the officers shall be fixed from
time to time by the Board of Directors or by such committee or superior officer
as may be designated by the Board of Directors, and no officer shall be
prevented from receiving such salary by reason of also being a director of the
corporation.
ARTICLE V. GROUPS AND STAFF
Section 1. ESTABLISHMENT OF GROUPS. The Board of Directors, the Chairman
of the Board or, after consultation with the Chairman of the Board, the
President, may cause the business to be divided into one or more groups, based
upon product manufactured, geographical territory, character and type of
operations, or upon such other basis as the Board of Directors, or the Chairman
of the Board, or, after consultation with the Chairman of the Board, the
President, may from time to time determine to be advisable. The groups shall
operate under the authority and direction of a Group President and may operate
under trade names approved for such purpose as may be authorized by the Board
of Directors, or the Chairman of the Board, or the President.
Section 2. GROUP OFFICERS. The Group President of a group may appoint
any number of group officers (who shall not, by virtue of such appointment, be
corporate officers), and may remove any such group officer. Such officers
shall have such authority as may from time to time be assigned by the Group
President.
Section 3. STAFF OFFICERS. The Chairman of the Board or, after
consultation with the Chairman of the Board, the President may appoint any
number of staff officers (who shall not, by virtue of such appointment, be
corporate officers), and may remove any such staff officer as the Chairman of
the Board or, after consultation with the Chairman of the Board, the President,
may deem appropriate from time to time. Such officers shall have such
authority as may from time to time be assigned by the Chairman of the Board or
the President.
ARTICLE VI. CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Chairman of the Board, the Chairman of the
Executive Committee or the President may at any time execute and deliver any
deeds, mortgages or bonds which the Board of Directors has authorized to be
executed and delivered and may at any time execute and deliver any lease, bid,
application, note, guarantee, consent, election, notice or other contract,
Page 18 of 28
<PAGE>
document or instrument as may be required in the ordinary course and scope of
the business of the corporation or as may be specifically authorized by the
Board of Directors. The Chairman of the Board or the President may in writing
delegate the foregoing authority, and may delegate authority to redelegate such
authority, to any other officer or officers, agent or agents, or other persons
and the authority so delegated may be general or confined to specific
instances. The Board of Directors may authorize any other officer or officers,
agent or agents or other persons to execute and deliver any other contracts,
documents or instruments and such authority may be general or confined to
specific instances.
Section 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
Section 3. EVIDENCES OF INDEBTEDNESS. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in
the name of the corporation, shall be signed by such officer or officers, agent
or agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 4. DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Board of Directors or the
Finance Committee, or committees or officers to whom the Board of Directors or
the Finance Committee have delegated such authority may select.
ARTICLE VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. CERTIFICATES FOR SHARES. Certificates for shares of capital
stock of the corporation shall be in such form as shall be determined by the
Board of Directors. They shall be issued in consecutive order and shall be
numbered in the order of their issue and shall be signed by the Chairman of the
Board or the President or a Vice President and the Secretary or an Assistant
Secretary, provided, however, that if any stock certificate is countersigned by
a transfer agent, other than the corporation or its employee, or by a
registrar, other than the corporation or its employee, any other signature,
including that of any such officer, on such certificate may be a facsimile,
engraved, stamped or printed. In case any officer or agent who has signed or
whose facsimile signature shall be used on any stock certificate shall cease to
be such officer or agent of the corporation because of death, resignation or
otherwise before such stock certificate shall have been delivered by the
corporation, such stock certificate may nevertheless be issued and delivered as
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<PAGE>
though the person or agent who signed the certificate or whose facsimile
signature shall have been used thereon had not ceased to be such officer or
agent of the corporation.
Section 2. TRANSFER OF SHARES. Upon surrender to the corporation or its
transfer agent 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 on its books.
Section 3. RESTRICTIONS ON OWNERSHIP, TRANSFER AND VOTING. So long as
the corporation or any of its subsidiaries is subject to any law of the United
States or any state therein which restricts ownership or voting of capital
stock by Aliens (as defined herein), not more than one-fifth of the shares
outstanding shall be owned of record or voted by or for the account of Aliens
or their representatives or affiliates. The Board of Directors may issue share
certificates representing not more than one-fifth of the shares of the stock of
the corporation at any time outstanding in special form which may be owned or
held by Aliens, such certificates to be known as "Foreign Share Certificates"
and to be so marked, but under no circumstances shall the total amount of
voting stock of any class represented by Foreign Share Certificates, plus the
amount of voting stock of that class owned by or for the account of Aliens and
represented by certificates not so marked, exceed one-fifth of the aggregate
number of outstanding shares of such class.
Shares of stock shall be transferable on the books of the corporation by
the holder thereof, in person or by duly authorized attorney, upon the
surrender of the certificate representing the shares to be transferred,
properly endorsed; provided, however, that shares of stock other than shares
represented by Foreign Share Certificates shall be transferable to Aliens or
any person holding for the account thereof only when the aggregate number of
shares of stock owned by or for the account of Aliens will not then be more
than one-fifth of the number of shares of stock outstanding. The Board of
Directors may direct that, before shares of stock shall be transferred on the
books of the corporation, the corporation may require information as to whether
the proposed transferee is an Alien or will hold the stock for the account of
an Alien.
If the stock records of the corporation shall at any time disclose Alien
ownership of one-fifth or more of the voting stock of any class and it shall be
found by the corporation that any certificate for shares marked "Domestic Share
Certificate" is, in fact, held by or for the account of any Alien, the holder
of the shares represented by that certificate shall not be entitled to vote, to
receive dividends or to have any other rights with respect to such shares,
except the right to transfer the shares to a Non-Alien (as defined herein).
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<PAGE>
If the stock records of the corporation shall at any time disclose Alien
ownership of one-fifth or more of the voting stock of any class and a request
is made by an Alien to have shares registered in its name or for its account,
the corporation shall be under no obligation to effect the transfer or to issue
or reissue any stock certificates to or for the account of the Alien. In
addition, if a proposed transferee of any shares is an Alien, and the transfer
to such Alien would result in Alien ownership of one-fifth or more of the
voting stock of any class, the corporation shall be under no obligation to
effect the transfer or to issue or reissue any stock certificates to or for the
account of the Alien. Further, if it is determined at any time that a transfer
has resulted in Alien ownership of one-fifth or more of the voting stock of any
class, the holder of the shares which resulted in the Alien ownership of one-
fifth or more of the voting stock shall not be entitled to vote, to receive
dividends or have any other rights with respect to such shares, except the
right to transfer those shares to a Non-Alien.
The Board of Directors shall establish rules, regulations and procedures
to assure compliance with and enforcement of this Article VII, Section 3.
The term "Alien" is defined to mean and include the following:
(1) Any person (including an individual, a partnership, a corporation or
an association or any other entity) who is not a United States
citizen or is the representative of or fiduciary for any person who
is not a United States citizen;
(2) Any foreign government or the representative thereof;
(3) Any corporation any officer of which is an Alien, or of which more
than 25% of its directors are Aliens;
(4) Any corporation or association organized under the laws of any
foreign government;
(5) Any corporation of which more than 20% of its stock is owned
beneficially or of record or may be voted by Aliens, or which by any
other means whatsoever direct or indirect control of the corporation
is held or permitted to be exercised by Aliens;
(6) Any partnership, association or other entity which is owned or
controlled by Aliens;
(7) Any other person, corporation, trust, partnership or association
deemed by the Board of Directors to be an Alien as to the United
States or the corporation (or any subsidiary of the corporation).
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<PAGE>
No person, holding shares of class B stock (hereinafter such class B stock
is called "class B stock" and such holder thereof is called a "class B holder")
may transfer, and the corporation shall not register the transfer of, such
shares of class B stock, whether by sale, assignment, gift, bequest,
appointment or otherwise, except to a Permitted Transferee of such class B
holder, which term shall have the following meanings:
(i) In the case of a class B holder who is a natural person and the
holder of record and beneficial owner of the shares of class B stock
subject to said proposed transfer, "Permitted Transferee" means (A)
the spouse of such class B holder, (B) a lineal descendant of a
grandparent of such class B holder or a spouse of any such lineal
descendant, (C) the trustee of a trust (including a voting trust) for
the benefit of one or more class B holders, other lineal descendants
of a grandparent of such class B holder, the spouse of such class B
holder the spouses of such other lineal descendants and an
organization contributions to which are deductible for federal
income, estate or gift tax purposes (hereinafter called a "Charitable
Organization"), and for the benefit of no other person, provided that
such trust may grant a general or special power of appointment to
such class B holder, the spouse of such class B holder, any lineal
descendant of such class B holder or the spouse of any such lineal
descendant, and may permit trust assets to be used to pay taxes,
legacies and other obligations of the trust or the estate of such
class B holder payable by reason of the death of such class B holder
and provided that such trust prohibits transfer of shares of class B
stock to persons other than Permitted Transferees, as defined in
clause (ii) below, (D) the estate of such deceased class B holder,
(E) a Charitable Organization established by such class B holder,
such class B holder's spouse, a lineal descendant of a grandparent of
such class B holder or a spouse of any such lineal descendant, and
(F) a corporation all the outstanding capital stock of which is owned
by, or a partnership all the partners of which are, one or more of
such class B holders, other lineal descendants of a grandparent of
such class B holder or a spouse of any such lineal descendant, and
the spouse of such class B holder provided that if any share of
capital stock of such a corporation (or of any survivor of a merger
or consolidation of such a corporation), or any partnership interest
in such a partnership, is acquired by any person who is not within
such class of persons, all shares of class B stock then held by such
corporation or partnership, as the case may be, shall be deemed,
without further action, to be automatically converted into shares of
common stock, and stock certificates formerly representing such
shares of class B stock shall thereupon and thereafter be deemed to
represent the like number of shares of common stock.
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<PAGE>
(ii) In the case of a class B holder holding the shares of class B stock
subject to said proposed transfer as trustee pursuant to a trust
other than a trust described in clause (iii) below, "Permitted
Transferee" means (A) the person who established such trust and (B) a
Permitted Transferee of such person determined pursuant to clause (i)
above.
(iii) In the case of a class B holder holding the shares of class B stock
subject to said proposed transfer as trustee pursuant to a trust
which was irrevocable on the record date for the initial distribution
of shares of class B stock ("Record Date"), "Permitted Transferee"
means any person to whom or for whose benefit principal may be
distributed either during or at the end of the term of such trust
whether by power of appointment or otherwise or any "Permitted
Transferee" of such person determined pursuant to clause (i), (ii),
(iv), (v) or (vi) hereof, as the case may be.
(iv) In the case of a class B holder who is the record (but not
beneficial) owner of the shares of class B stock subject to said
proposed transfer as nominee for the person who was the beneficial
owner thereof on the Record Date, "Permitted Transferee" means such
beneficial owner and a Permitted Transferee of such beneficial owner
determined pursuant to clause (i), (ii), (iii), (v) or (vi) hereof,
as the case may be.
(v) In the case of a class B holder which is a partnership and the holder
of record and beneficial owner of the shares of class B stock subject
to said proposed transfer, "Permitted Transferee" means any partner
of such partnership or any "Permitted Transferee" of such partner
determined pursuant to clause (i), (ii), (iii), (iv) or (vi) hereof,
as the case may be.
(vi) In the case of a class B holder which is a corporation (other than a
Charitable Organization described in subclause (E) of clause (i)
above and the holder of record and beneficial owner of the shares of
class B stock subject to said proposed transfer, "Permitted
Transferee" means any stockholder of such corporation receiving
shares of class B stock through a dividend or through a distribution
made upon liquidation of such corporation or any "Permitted
Transferee" of such stockholder determined pursuant to clause (i),
(ii), (iii), (iv) or (v) hereof, as the case may be.
(vii) In the case of a class B holder which is the estate of a deceased
class B holder, or which is the estate of a bankrupt or insolvent
class B holder, and provided such deceased, bankrupt or insolvent
class B holder, as the case may be, was the record and beneficial
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<PAGE>
owner of the shares of class B stock subject to said proposed
transfer, "Permitted Transferee" means a Permitted Transferee of such
deceased, bankrupt or insolvent class B holder as determined pursuant
to clause (i), (v) or (vi) above, as the case may be.
Notwithstanding anything to the contrary set forth herein, any class B
holder may pledge such holder's shares of class B stock to a pledgee pursuant
to a bona fide pledge of such shares as collateral security for indebtedness
due to the pledgee, provided that such shares shall not be transferred to or
registered in the name of the pledgee and shall remain subject to the
provisions of this Article VII, Section 3. In the event of foreclosure or
other similar action by the pledgee, such pledged shares of class B stock may
only be transferred to a Permitted Transferee of the pledgor or converted into
shares of common stock, as the pledgee may elect.
For purposes of this Article VII, Section 3:
(i) The relationship of any person that is derived by or through legal
adoption shall be considered a natural one.
(ii) Each joint owner of shares of class B stock shall be considered a
"class B holder" of such shares.
(iii) A minor for whom shares of class B stock are held pursuant to a
Uniform Gifts or Transfers to Minors Act or similar law shall be
considered a "class B holder" of such shares.
(iv) Unless otherwise specified, the term "person" means both natural
persons and legal entities.
(v) The term "grandparent" means an ancestor in any degree born after
January 1, 1976.
Any purported transfer of shares of class B stock not permitted hereunder
shall result, without further action, in the automatic conversion of the
transferee's shares of class B stock into shares of common stock, effective on
the date of such purported transfer. The corporation may, as a condition to
the transfer or the registration of transfer of shares of class B stock to a
purported Permitted Transferee, require the furnishing of such affidavits or
other proof as it deems necessary to establish that such transferee is a
Permitted Transferee.
Shares of class B stock shall be registered in the name(s) of the
beneficial owner(s) thereof (as hereafter defined) and not in "street" or
"nominee" names; provided, however, certificates representing shares of class B
stock issued as a stock dividend on the corporation's then outstanding common
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<PAGE>
stock may be registered in the same name and manner as the certificates
representing the shares of common stock with respect to which the shares of
class B stock were issued. For the purposes of this Article VII, Section 3,
the term "beneficial owner(s)" of any shares of class B stock shall mean the
person or persons who possess the power to dispose, or to direct the
disposition, of such shares.
The corporation shall note on the certificates representing the shares of
class B stock that there are restrictions on transfer and registration of
transfer imposed by this Article VII, Section 3.
Section 4. REGISTERED SHAREHOLDERS. The corporation shall be entitled to
treat the holder of record of any share or shares of stock as the holder in
fact thereof and, accordingly, shall not be bound to recognize any equitable
claim or other 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 Iowa.
Section 5. LOST CERTIFICATES. Upon the making of an affidavit that a
certificate has been lost or destroyed, the Board of Directors may direct that
a new certificate be issued to the person alleging the loss or destruction of
such certificate. When authorizing such issuance of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate or
such owner's legal representative to give the corporation a bond in such sums
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 or
destroyed.
Section 6. STOCK REGULATIONS. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the statutes of Iowa as they may deem expedient concerning
the issue, transfer and registration of certificates representing shares of the
corporation.
ARTICLE VIII. FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of July
and end on the thirtieth day of June in each year.
ARTICLE IX. DIVIDENDS
The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Articles of Incorporation.
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<PAGE>
ARTICLE X. SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words, "Corporate Seal."
ARTICLE XI. WAIVER OF NOTICE
Whenever any notice is required to be given to any shareholder or director
of the corporation under the provisions of the Articles of Incorporation or
under the provisions of the Iowa Business Corporations Act, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice.
ARTICLE XII. INDEMNIFICATION OF DIRECTORS, OFFICERS OR EMPLOYEES
Section 1. RIGHT TO INDEMNIFICATION. Each person who was or is a party
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that such person, or a
person of whom such person is the legal representative, is or was a director,
officer or employee of the corporation or is or was serving at the request of
the corporation as director, officer or employee of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, shall be indemnified and held harmless by
the corporation to the fullest extent consistent with the laws of Iowa as the
same now or may hereafter exist (but, in the case of any change, only to the
extent that such change authorizes the corporation to provide broader
indemnification rights than said law permitted the corporation to provide prior
to such change) against all costs, charges, expenses, liabilities and losses
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to be a director, officer or employee and shall
inure to the benefit of the heirs, executors and administrators of such person;
provided, however, that the right to indemnification conferred in this Section
shall be conditioned upon the corporation being afforded the opportunity to
participate directly on behalf of such person in such proceeding and any
settlement discussions relating thereto. The right to indemnification
conferred in this Section shall be a contract right and shall, except with
respect to an action or proceeding against the corporation by an employee who
is neither a director nor an officer of the corporation, include the right to
Page 26 of 28
<PAGE>
be paid by the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition upon receipt by the corporation
of an undertaking, by or on behalf of such director, officer or employee to
repay all amounts so advanced if it shall ultimately be determined that the
director, officer or employee is not entitled to be indemnified under this
Section or otherwise.
Section 2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section I
of this Article is not paid in full by the corporation within thirty days after
a written claim has been received by the corporation, the claimant may at any
time thereafter bring suit against the corporation to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall also be
entitled to be paid the expense of prosecuting such claim. It shall be a
defense to any action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking has been tendered to the
corporation) that the claimant has failed to meet a standard of conduct which
makes it permissible under Iowa law for the corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall
be on the corporation. Neither the failure of the corporation (including its
Board of Directors, independent legal counsel, or its shareholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is permissible in the circumstances because
such person has met such standard of conduct, nor an actual determination by
the corporation (including its Board of Directors, independent legal counsel,
or its shareholders) that the claimant has not met such standard of conduct,
nor the termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall create a
presumption that the claimant has failed to meet the required standard of
conduct.
Section 3. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and
the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, bylaw, agreement, vote of
shareholders or disinterested directors or otherwise.
Section 4. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under Iowa law.
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Section 5. EXPENSES AS A WITNESS. To the extent that any director,
officer or employee of the corporation is by reason of such position, or a
position with another entity at the request of the corporation, a witness in
any proceeding, such person shall be reimbursed for all costs and expenses
actually and reasonably incurred in connection therewith.
Section 6. EFFECT OF AMENDMENT. Any amendment, repeal or modification of
any provision of this Article by the shareholders or the directors of the
corporation shall not adversely affect any right or protection of a director,
officer or employee of the corporation existing at the time of such amendment,
repeal or modification.
Section 7. SEVERABILITY. In the event any one or more of the provisions
contained in this Article shall, for any reason, be held to be invalid, illegal
or unenforceable, such invalidity, illegality, or unenforceability shall not
affect any other provisions of this Article.
ARTICLE XIII. AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted by the Board of Directors at any regular or special meeting of the
Board of Directors.
Page 28 of 28
Exhibit 4
SIXTH AMENDMENT TO LOAN AGREEMENT
AND AMENDMENT TO NOTES
THIS SIXTH AMENDMENT TO LOAN AGREEMENT AND AMENDMENT TO NOTES (the
"Amendment"), made as of this 15th day of March, 1996, among Meredith/New
Heritage Strategic Partners L.P., a partnership among Meredith/New Heritage
Partnership, Continental Cablevision of Minnesota, Inc., and New Heritage
Associates (the "Borrower"), North Central Cable Communications Corporation
("North Central" and, collectively with the Borrower, the "Borrowers"), The
Toronto-Dominion Bank and the Banks named herein whose names and signatures
appear on the signature pages hereof (collectively, the "Banks"), The Bank of
New York, The First National Bank of Chicago, and NationsBank of Texas, N.A.
(collectively, the "Co-Agents"), and Toronto Dominion (Texas), Inc., as agent
for the Co-Agents and the Banks (the "Agent"),
W I T N E S S E T H:
WHEREAS, the Borrowers, the Agent, the Co-Agents, and the Banks are
parties to that certain Loan Agreement dated as of March 31, 1992, as amended
by that certain First Amendment to Loan Agreement dated as of September 1,
1992, by that certain Second Amendment to Loan Agreement dated as of December
31, 1993, by that Third Amendment to Loan Agreement and Amendment to Notes
dated as of March 31, 1994, by that certain Fourth Amendment to Loan Agreement
and Amendment to Notes dated as of December 29, 1994, and by that certain Fifth
Amendment to Loan Agreement and Amendment to Notes dated as of May 12, 1995
(collectively, the "Loan Agreement"); and
WHEREAS, the Borrowers have located a purchaser for the North Central
Systems and intend to complete the sale of the North Central Systems no later
than December 31, 1996; and
WHEREAS, the Borrowers have requested that the Loan Agreement be amended
so as to accommodate the Borrowers in completing the above-referenced sale;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree that
all capitalized terms used herein shall have the meanings ascribed thereto in
the Loan Agreement, and further agree as follows:
1. Amendment to Article 1. Article 1 of the Loan Agreement,
Definitions, is hereby amended by deleting the existing definition of "Maturity
Date" in its entirety and by substituting in lieu thereof the following:
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<PAGE>
"'Maturity Date' shall mean the earliest of (i) December 31, 1996,
(ii) the date of the sale of all or the remaining portion of the Systems,
or (iii) any earlier date on which payment of the Loans under the
Commitments shall be due (whether by acceleration or otherwise)."
2. Amendment to Section 2.7(a). Section 2.7(a) of the Loan Agreement,
Repayment, is hereby amended by deleting existing Section 2.7(a) in its
entirety and by substituting in lieu thereof the following:
"Repayments From Contemplated Sales of Systems. The principal
balance of the Loans outstanding shall be paid by the Borrowers as follows
in full on or before the Maturity Date."
3. Amendment to Section 7.7. Section 7.7 of the Loan Agreement,
Restricted Payments and Purchases, is hereby amended by deleting the word "and"
immediately preceding section "(IV)", by replacing the period at the end
thereof with a comma, and by inserting immediately thereafter the following:
"(V) $440,000 for the calendar quarter ending June 30, 1996, and (VI)
$450,000 for the calendar quarters ending September 30, 1996 and
December 31, 1996."
4. Amendment to Section 7.8. Section 7.8 of the Loan Agreement, Total
Indebtedness to Annualized Operating Cash Flow Ratio, is hereby amended by
deleting existing Section 7.8 in its entirety and by substituting in lieu
thereof the following:
"Section 7.8 Total Indebtedness to Annualized Operating Cash Flow
Ratio. The Borrower shall not permit the ratio of its Total Indebtedness
to its Annualized Operating Cash Flow to exceed the ratio set forth below
for each fiscal quarter ending on the dates shown below:
Dates Ratio
----- -----
December 31, 1995 4.50:1
March 31, 1996 4.50:1
June 30, 1996 4.00:1
September 30, 1996 4.00:1
December 31, 1996 and thereafter 3.75:1
For purposes of this Section 7.8, "Annualized Operating Cash Flow" shall
not include any portion of Operating Cash Flow which would have otherwise
been included in respect of any Subsidiary of the Borrower or portion of
the System which has been sold, for the fiscal period in which the sale
occurs."
- 2 -
<PAGE>
5. Amendment to Section 7.10. Section 7.10 of the Loan Agreement,
Capital Expenditures, is hereby amended by deleting existing Section 7.10 in
its entirety and by substituting in lieu thereof the following:
"Section 7.10 Capital Expenditures. During the period set forth
below, the Borrower shall not permit the aggregate amount of Capital
Expenditures of the Borrower and its Subsidiaries to exceed the sum of (a)
the limit set forth below for such quarter, plus (b) any unexpended
portion of the Capital Expenditures limit for the immediately preceding
quarter.
Capital
Quarter Ended Expenditure Limit
------------- -----------------
December 31, 1995 $3,450,000
March 31, 1996 $2,400,000
June 30, 1996 $2,460,000
September 30, 1996 $3,190,000
December 31, 1996 $2,740,000"
6. No Other Amendment or Waiver. Except for the amendments expressly
set forth above, the text of the Loan Agreement and all other Loan Documents
shall remain unchanged and in full force and effect. The Borrowers
acknowledges and expressly agree that the Agent, the Co-Agents, and the Banks
reserve the right to, and do in fact, require strict compliance with all terms
and provisions of the Loan Agreement.
7. Representations and Warranties. The Borrowers hereby represent and
warrant in favor of the Agent, the Co-Agents, and the Banks as follows:
(a) The Borrowers have the partnership and corporate power and
authority, as the case may be, (i) to enter into this Amendment, and (ii) to do
all acts and things as are required or contemplated hereunder to be done,
observed and performed by them;
(b) This Amendment has been duly authorized, validly executed and
delivered by one or more Authorized Signatories of the Borrowers, and
constitutes the legal, valid and binding obligation of the Borrowers,
enforceable against them in accordance with its terms;
- 3 -
<PAGE>
(c) The execution and delivery of this Amendment and performance by
the Borrowers under the Loan Agreement, as amended hereby, do not and will not
require the consent or approval of any regulatory authority or governmental
authority or agency having jurisdiction over either Borrower which has not
already been obtained, nor contravene or conflict with the charter documents of
either Borrower, or the provision of any statute, judgment, order, indenture,
instrument, agreement, or undertaking, to which either Borrower is party or by
which any of their respective assets or properties are or may become bound; and
(d) As of the Effective Date of, and after giving effect to, this
Amendment, (i) no Default or Event of Default exists or is caused by this
Amendment, and (ii) each representation and warranty set forth in Article 4 of
the Loan Agreement is hereby restated and affirmed as true and correct in all
material respects as of such date hereof, except to the extent previously
fulfilled in accordance with the terms of the Loan Agreement, as amended
hereby, and to the extent relating specifically to the Agreement Date.
8. Conditions Precedent to Effectiveness of Amendment. This Amendment
shall be effective on the date (the "Effective Date") on which the following
conditions precedent have been satisfied:
(a) The Borrower shall have paid to the Agent, for the account of
the Banks, an amendment fee in the amount of one-tenth of one percent (.001%)
of the principal balance of the Loans outstanding as of the date of this
Amendment;
(b) The Borrowers, Banks, Agent and the Co-Agents shall have
executed and delivered this Amendment; and
(c) The Borrowers shall have executed and delivered such other
documents that the Agent may reasonably have requested.
9. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same agreement.
10. Law of Contract. This Amendment shall be deemed to be made pursuant
to the laws of the State of New York with respect to agreements made and to be
performed wholly in the State of New York and shall be construed, interpreted,
performed and enforced in accordance therewith.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as
of the day and year first above written.
- 4 -
<PAGE>
BORROWER: MEREDITH/NEW HERITAGE STRATEGIC
PARTNERS L.P., an Iowa limited
partnership
By its General Partner:
MEREDITH/NEW HERITAGE PARTNERSHIP
By a General Partner:
NEW HERITAGE ASSOCIATES, an Iowa
general partnership
By its General Partner:
INGERSOLL GROUP, INC., an Iowa
corporation
By:_______________________________
Its:___________________________
NORTH CENTRAL: NORTH CENTRAL CABLE COMMUNICATIONS
CORPORATION, a Delaware corporation
By:_______________________________
Its:___________________________
AGENT: TORONTO DOMINION (TEXAS), INC.
By:_______________________________
Its:___________________________
CO-AGENTS: THE BANK OF NEW YORK
By:_______________________________
Its:___________________________
- 5 -
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO
By:_______________________________
Its:___________________________
NATIONSBANK OF TEXAS, N.A.
By:_______________________________
Its:___________________________
BANKS: THE TORONTO-DOMINION BANK
By:_______________________________
Its:___________________________
THE BANK OF NEW YORK
By:_______________________________
Its:___________________________
THE FIRST NATIONAL BANK OF CHICAGO
By:_______________________________
Its:___________________________
NATIONSBANK OF TEXAS, N.A.
By:_______________________________
Its:___________________________
- 6 -
<PAGE>
BANK OF MONTREAL
By:_______________________________
Its:___________________________
CIBC, INC.
By:_______________________________
Its:___________________________
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By:_______________________________
Its:___________________________
FLEET BANK, N.A.
By:_______________________________
Its:___________________________
UNION BANK OF CALIFORNIA
By:_______________________________
Its:___________________________
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
GRAND CAYMAN BRANCH
By:_______________________________
Its:___________________________
- 7 -
Exhibit 11
----------
MEREDITH CORPORATION
Computation of Primary and Fully Diluted Per
Common Share Earnings - Treasury Stock Method
For the Nine Months Ended March 31, 1996 and 1995
(Unaudited)
Weighted average number of shares
(in thousands)
1996 1995
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Weighted average number of shares
outstanding in thousands 27,513 27,513 27,408 27,408
Dilutive effect of unexercised
stock options in thousands 717 765 307 333
------ ------ ------ ------
Total 28,230 28,278 27,715 27,741
====== ====== ====== ======
Primary and fully
diluted earnings per common share
1996 1995*
Fully Fully
Primary Diluted Primary Diluted
------- ------- ------- -------
Earnings per share from
continuing operations $1.40 $1.40 $1.20 $1.20
Discontinued operations ( .03) ( .03) ( .12) ( .12)
Cumulative effect of change in
accounting principle - - (1.67) (1.67)
----- ----- ----- -----
Net earnings (loss) per share $1.37 $1.37 ($ .59) ($ .59)
===== ===== ===== =====
*Restated to reflect the cable segment as discontinued operations.
Note: Primary - Based on average market prices for the period.
Fully Diluted - Based on the higher of the average market price
for the period or the market price at March 31
of each year.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM the
Consolidated Balance Sheet at March 31, 1996 and the Consolidated Statement of
Earnings for the nine months ended March 31, 1996 of Meredith Corporation and
Subsidiaries AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000065011
<NAME> MEREDITH CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 9,283
<SECURITIES> 0
<RECEIVABLES> 102,962<F1>
<ALLOWANCES> 0
<INVENTORY> 30,837
<CURRENT-ASSETS> 220,356
<PP&E> 186,388
<DEPRECIATION> 107,361
<TOTAL-ASSETS> 749,287
<CURRENT-LIABILITIES> 280,946
<BONDS> 50,000
0
0
<COMMON> 27,207
<OTHER-SE> 230,958
<TOTAL-LIABILITY-AND-EQUITY> 749,287
<SALES> 645,221
<TOTAL-REVENUES> 645,221
<CGS> 275,413
<TOTAL-COSTS> 275,413
<OTHER-EXPENSES> 19,356
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,643
<INCOME-PRETAX> 72,523
<INCOME-TAX> 33,147
<INCOME-CONTINUING> 39,376
<DISCONTINUED> (717)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,659
<EPS-PRIMARY> 1.37
<EPS-DILUTED> 1.37
<FN>
<F1>Net of allowances
</FN>
</TABLE>
Exhibit 99
----------
MEREDITH CORPORATION
THIRD QUARTER 1996 EARNINGS PER SHARE AT-A-GLANCE
- -- The chart below depicts the comparable quarterly and fiscal-year earnings
per share before non-recurring items and discontinued operations:
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Fiscal Year
-------- -------- -------- -------- -----------
F1993 .12 .18 .21 .19 .70
F1994 .17 .26 .32 .26 1.01
F1995 .27 .38 .38 .39 1.42
F1996 .34 .45 .49
- -- Third-quarter earnings per share from continuing operations increased 29
percent from 38 cents to 49 cents, marking the 15th consecutive quarter of
improved comparable earnings versus the prior-year period.
- -- Fiscal 1996 year-to-date earnings per share from continuing operations
before non-recurring items increased 24 percent to $1.28. Prior year-
to-date earnings per share from continuing operations before non-recurring
items were $1.03.
- -- Net earnings per share for the third quarter were 49 cents. Meredith
Corporation deferred current-year third-quarter cable losses since the
Company will report a gain on the sale of its remaining cable system in
fiscal 1997.
- -- Net earnings per share in the prior-year quarter were 37 cents. Prior-year
third-quarter discontinued operations included a gain from the sale of the
Bismarck cable system and cable operating losses.
- -- Net earnings per share for the year-to-date were $1.37, including a gain of
12 cents per share from the second-quarter sale of the Company's book clubs
and the first-quarter loss of three cents per share from cable operations
that have since been discontinued. In the year-to-date fiscal 1995 period,
the Company reported a net loss of 59 cents per share due to a previously-
reported non-cash charge of $l.67 per share from a change in accounting
principle.
