SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MEREDITH CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
[LOGO] MEREDITH CORPORATION
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 10, 1997
------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of holders of common stock
and class B stock of Meredith Corporation (hereinafter called the "Company")
will be held at the Company's principal executive offices, 1716 Locust Street,
Des Moines, Iowa 50309-3023, on Monday, November 10, 1997, at 10:00 A.M., local
time, for the following purposes:
(1) To elect four Class II directors for terms expiring in 2000, as
provided in the Bylaws of the Company.
(2) To elect one Class III director for a term expiring in 1998, as
provided in the Bylaws of the Company.
(3) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
By resolution of the Board of Directors, only holders of record of the
Company's common stock and class B stock at the close of business on September
11, 1997, are entitled to notice of and to vote at the meeting or at any
adjournment or adjournments thereof.
By Order of the Board of Directors,
THOMAS L. SLAUGHTER
VICE PRESIDENT - GENERAL COUNSEL
AND SECRETARY
Des Moines, Iowa
October 1, 1997
PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD(S) IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE FOR MAILING IN THE UNITED STATES. YOUR VOTE IS
IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. A PROMPT RESPONSE IS
HELPFUL, AND YOUR COOPERATION WILL BE APPRECIATED.
<PAGE>
[LOGO] MEREDITH CORPORATION
------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 10, 1997
------------------
INTRODUCTION
This Proxy Statement is being sent to stockholders on or about October 1,
1997, in connection with the solicitation of proxies by the Board of Directors
of Meredith Corporation (the "Company") to be used in voting at the Annual
Meeting of holders of common stock and class B stock of the Company to be held
at the Company's principal executive offices, 1716 Locust Street, Des Moines,
Iowa 50309-3023, on Monday, November 10, 1997, at 10:00 A.M., local time, and at
any adjournment or adjournments thereof.
YOU ARE REQUESTED TO SIGN AND COMPLETE THE ENCLOSED PROXY CARD(S) AND
RETURN IT (THEM) IN THE ENCLOSED ENVELOPE.
Proxies in such form, if duly signed and received in time for voting, will
be voted in accordance with the directions of the stockholders. If no
instructions are specified in a proxy, the proxy will be voted by the proxy
holders FOR the election as directors of the nominees hereinafter named and in
their discretion upon such matters not presently known or determined which may
properly come before the meeting.
The affirmative vote of a majority of the total number of votes entitled to
be cast represented by shares present in person or by proxy, a quorum being
present, is required to elect directors and for any other matters which may
properly come before the meeting.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
The giving of a proxy does not preclude the right to vote in person or by
means of a subsequent proxy should the person giving the proxy so desire. Any
proxy may be revoked by giving notice to the Company in writing prior to the
meeting or in open meeting, but such revocation shall not affect any vote
previously taken.
The expense of soliciting proxies for the Annual Meeting, including the
cost of preparing, assembling and mailing the notice, proxy and Proxy Statement
and the reasonable costs of brokers, nominees and fiduciaries in supplying
proxies to beneficial owners, will be paid by the Company. The solicitation will
be made by the use of the mail, through brokers and banking institutions, and by
officers and regular employees of the Company.
SHARES ENTITLED TO VOTE
Each holder of common stock of record at the close of business on September
11, 1997, is entitled to one vote per share so held on all matters to come
before the meeting. At the close of business on September 11, 1997, there were
outstanding and entitled to vote at the Annual Meeting 41,080,153 shares of
common stock of the Company. Each holder of record of class B stock at the close
of business on September 11, 1997, is entitled to ten votes per share so held on
all matters to come before the meeting. At the close of business on September
11, 1997, there were outstanding and entitled to vote at the Annual Meeting
12,018,708 shares of class B stock of the Company, for a total of 161,267,233
votes.
In determining whether a quorum exists at the Annual Meeting for purposes
of all matters to be voted on, all votes, including votes to "withhold
authority," will be counted. If an individual has signed
<PAGE>
a proxy card but failed to indicate a vote "for," "withhold authority," or "for
all except," such proxy will be voted FOR the election as directors of the
nominees therein named.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Under regulations of the Securities and Exchange Commission, persons who
have power to vote or to dispose of shares of the Company, either alone or
jointly with others, are deemed to be beneficial owners of such shares. Because
the voting or dispositive power of certain stock listed in the following table
is shared, in some cases the same securities are listed opposite more than one
name in the table. In addition, in some cases, the same securities may be listed
in more than one column opposite the same person's name in the table (as for
example when a person holds sole dispositive power but shared voting power with
respect to shares). The total number of the Company's shares as listed in the
table (excluding stock options that are presently exercisable or will become
exercisable within sixty (60) days following the date of this Proxy Statement),
after elimination of such duplication is 8,958,029 shares of common stock
(approximately 22% of the outstanding common stock) and 11,059,656 shares of
class B stock (approximately 90% of the outstanding class B stock).
For all purposes of this Proxy Statement, all references to numbers of
shares and per share prices reflected herein have been adjusted to reflect a
two-for-one stock split of the Company's stock in the form of a stock dividend
effected March 14, 1997.
Set forth below is information as of June 30, 1997 (unless otherwise
indicated), concerning each person who is known to management to be the
beneficial owner of more than five percent (5%) of any class of the Company's
voting securities, and security ownership by management.
<TABLE>
<CAPTION>
COMMON STOCK OWNED CLASS B STOCK OWNED (2)
------------------------------------ -------------------------------
SOLE VOTING SHARED SOLE VOTING SHARED
OR VOTING OR OR VOTING OR
INVESTMENT INVESTMENT % OF INVESTMENT INVESTMENT % OF
NAME AND ADDRESS POWER POWER CLASS(1) POWER POWER CLASS
- - ------------------------------------------- ---------- ---------- -------- ----------- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
(a) BENEFICIAL OWNERS OF MORE THAN 5%
E.T. Meredith III, Director (3)(4) ....... 3,829,507 92,412 20% 5,239,774 92,412 43%
1716 Locust Street
Des Moines, Iowa 50309-3023
Frederick B. Henry, Director (3)(4)(8) ... 312,688 109,160 9% 1,747,048 1,579,108 27%
100 West Hallam Street
Aspen, Colorado 81611
Patrick Henry, Jr. (3)(6) ................ 0 52,000 3% 0 1,374,528 11%
P.O. Box 3077
Aspen, Colorado 81611
Norwest Corporation (5)(6) ............... 0 52,000 5% 486,200 1,371,932 15%
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Fidelity Investments (6) ................. 3,757,092 0 9% 0 0 0
FMR Corp
82 Devonshire Street
Boston, Massachusetts 02109-3614
(b) DIRECTORS, NOT LISTED ABOVE, INCLUDING
NOMINEES, AND NAMED EXECUTIVE OFFICERS
Leo R. Armatis, Vice President -
Corporate Relations (4)(7)(9) ......... 149,189 20,000 1% 771 0 *
Herbert M. Baum, Director (8) ........... 18,382 0 * 0 0 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK OWNED CLASS B STOCK OWNED (2)
-------------------------------------- ----------------------------------
SOLE VOTING SHARED SOLE VOTING SHARED
OR VOTING OR OR VOTING OR
INVESTMENT INVESTMENT % OF INVESTMENT INVESTMENT % OF
NAME AND ADDRESS POWER POWER CLASS (1) POWER POWER CLASS
- - ---------------------------------------------- ---------- ---------- -------- ----------- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
Mary Sue Coleman, Director (8) ............. 0 0 0 0 0 0
Pierson M. Grieve, Director (8) ............ 30,500 0 * 0 0 0
Larry D. Hartsook, Vice President -
Finance (7)(9) ............................ 82,382 0 * 0 0 0
Joel W. Johnson, Director (8) .............. 12,956 0 * 0 0 0
Philip A. Jones, President -
Broadcasting Group (4)(9) ................. 362,388 20,000 2% 0 0 0
William T. Kerr, Director,
President & CEO (4)(7)(9) ................. 579,130 10,000 3% 0 0 0
Robert E. Lee, Director (8) ................ 26,064 0 * 2,800 0 *
Richard S. Levitt, Director (4)(8) ......... 31,552 24,000 * 0 24,000 *
Christopher M. Little, President -
Publishing Group (7)(9) ................... 313,194 0 1% 0 0 0
Nicholas L. Reding, Director (8) ........... 22,844 0 * 0 0 0
Jack D. Rehm, Director,
Chairman of the Board (4)(7)(9) ........... 782,617 1,344 3% 45,459 1,344 *
Barbara S. Uehling, Director (8) ........... 29,518 0 * 400 0 *
(c) ALL DIRECTORS AND EXECUTIVE OFFICERS AS A
GROUP (3)(4)(5)(6)(7)(10)
(18 persons) ............................. 6,854,585 282,956 35% 7,038,589 1,696,864 71%
</TABLE>
- - ---------------------------
*Less than one percent.
(1) The calculation of percentage of class of Common Stock Owned includes any
amounts of common stock deemed to be owned by the stockholder as a result
of the stockholder's ownership of class B stock which is convertible, share
for share, into common stock. Any such conversion would have the effect of
reducing a stockholder's percentage ownership of class B stock.
(2) Class B stock is not transferable except to members of the family of the
holder and certain other related entities. Class B stock, however, is
convertible, share for share, at any time into fully transferable common
stock without the payment of any consideration.
(3) Includes shares owned by various trusts. The inclusion of these shares is
not to be taken as an admission by the named stockholder of beneficial
ownership of these shares for any other purpose.
(4) Includes shares beneficially owned by spouses and relatives living in the
same home with the named individuals.
(5) Includes shares beneficially owned by Norwest Bank Iowa, N.A., as trustee,
a subsidiary of Norwest Corporation.
(6) Information as of December 31, 1997, based on Schedule 13G filed with the
Securities and Exchange Commission and/or information provided by Norwest
Bank Iowa, N.A., the trustee.
(7) Includes shares held by Norwest Bank Iowa, N.A., as trustee under the
Meredith Savings and Investment Plan for the benefit of certain officers,
which shares are voted by the trustee only at the direction of the
individual plan participants. The inclusion of these shares is not to be
taken as an admission by the respective officers of ownership of these
shares for any other purpose.
(8) Includes shares which are subject to presently exercisable stock options or
options exercisable within sixty (60) days following the date of this Proxy
Statement by non-employee directors under the Company's 1993 Stock Option
Plan for Non-Employee Directors as follows: 8,800 shares for Messrs.
Herbert M. Baum, Frederick B. Henry and Joel W. Johnson; 12,400 shares for
Mr. Pierson M. Grieve; 12,800 shares for Messrs. Robert E. Lee, Richard S.
Levitt and Nicholas L. Reding; and 11,200 shares for Dr. Barbara S.
Uehling.
(9) Includes shares which are subject to presently exercisable stock options or
options exercisable within sixty (60) days following the date of this Proxy
Statement by executive officers under the Company's 1992 and 1996 Stock
Incentive Plans as follows: 497,392 shares for Jack D. Rehm; 455,368 shares
for William T. Kerr; 312,228 shares for Philip A. Jones; 269,256 shares for
Christopher M. Little; 39,680 shares for Larry D. Hartsook; and 128,636
shares for Leo R. Armatis.
(10) Includes 1,988,604 shares which are subject to presently exercisable stock
options or options exercisable within sixty (60) days following the date of
this Proxy Statement by the directors and the named executive officers as a
group.
<PAGE>
ELECTION OF DIRECTORS
The Restated Articles of Incorporation provide that the Board of Directors
shall consist of not fewer than three nor more than 15 persons, as may be
provided by the Bylaws, to be divided into three classes, each class to consist,
as nearly as may be possible, of one-third of the total number of directors. The
Bylaws provide that the number of directors shall be fixed from time to time by
resolution of the Board of Directors. The last resolution provided for 12
directors. The proxies cannot be voted for a greater number of persons than the
number of nominees named herein.
Listed below are the four persons who have been nominated as Class II
directors to serve three-year terms to expire in 2000. All nominees are
currently serving as directors and were previously elected by the stockholders.
Also listed below is Dr. Mary Sue Coleman, who was nominated as a Class III
director to serve a term expiring in 1998. Dr. Coleman was elected as a director
by the Board of Directors at its meeting on August 12, 1997, to fill a vacancy
due to the retirement of Robert A. Burnett. Should any of these nominees become
unable to serve prior to the upcoming Annual Meeting, an event which is not
anticipated by the Company, the proxies, except those from stockholders who have
given instructions to withhold voting for the following nominees, will be voted
for such other person as the Compensation/Nominating Committee may nominate.
Certain information concerning each of the four nominees for Class II directors,
Dr. Coleman and each of the continuing directors is set forth below.
NOMINEES FOR ELECTION AS CLASS II DIRECTORS -
TERMS TO EXPIRE IN 2000
<TABLE>
<CAPTION>
YEAR
FIRST ELECTED PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
NOMINEE AGE AS A DIRECTOR DURING THE PAST FIVE YEARS AND OTHER INFORMATION
- - -------------------- --- ------------- ------------------------------------------------------------------
<S> <C> <C> <C>
Herbert M. Baum 60 1994 Chairman and Chief Executive Officer, Quaker State Corporation
(producer of motor oil and lubricants and marketer of products
and services in the automotive aftermarket), July 1995 to present;
President, Chairman and Chief Executive Officer, Quaker State
Corporation, 1993 to June 1995; Executive Vice President and
President, Campbell North and South America, Campbell Soup
Company (producer and marketer of food products), 1992 to
1993. Mr. Baum is a director of Quaker State Corporation,
Whitman Corporation and Dial Corporation.
Frederick B. Henry 51 1969 President, The Bohen Foundation (private charitable foundation),
1985 to present.
William T. Kerr 56 1994 President and Chief Executive Officer, Meredith Corporation,
January 1997 to present; President and Chief Operating Officer,
Meredith Corporation, July 1994 to December 1996; President-
Magazine Group and Executive Vice President, Meredith
Corporation, 1991 to 1994. Mr. Kerr is a director of Principal
Mutual Life Insurance Company.
Nicholas L. Reding 62 1992 Vice Chairman, Monsanto Company (diversified company in
pharmaceuticals, food products and agricultural chemicals), 1992
to present. Mr. Reding is a director of Monsanto Company,
International Multifoods Corporation and CPI Corporation.
</TABLE>
NOMINEE FOR ELECTION AS A CLASS III DIRECTOR -
TERM TO EXPIRE IN 1998
<TABLE>
<CAPTION>
YEAR
FIRST ELECTED PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
NOMINEE AGE AS A DIRECTOR DURING THE PAST FIVE YEARS AND OTHER INFORMATION
- - ------------------ --- ------------- -------------------------------------------------------------------
<S> <C> <C> <C>
Mary Sue Coleman 53 1997 President, The University of Iowa, 1995 to present; Provost,
University of New Mexico, 1993 to 1995; Vice Chancellor, University
of North Carolina, 1991 to 1993. Dr. Coleman is a director of
Gaylord Container Corporation and Norwest Bank Iowa, N.A.
</TABLE>
<PAGE>
DIRECTORS CONTINUING IN OFFICE AS CLASS III DIRECTORS -
TERMS TO EXPIRE IN 1998
<TABLE>
<CAPTION>
YEAR
FIRST ELECTED PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
DIRECTOR AGE AS A DIRECTOR DURING THE PAST FIVE YEARS AND OTHER INFORMATION
- - -------------------- --- ------------- -----------------------------------------------------------------
<S> <C> <C> <C>
Joel W. Johnson 54 1994 Chairman, President and Chief Executive Officer, Hormel Foods
Corporation (producer and marketer of meat and food products),
December 1995 to present; President and Chief Executive Officer,
Hormel Foods Corporation, 1993 to December 1995; President,
Hormel Foods Corporation, 1992 to 1993. Mr. Johnson is a
director of Hormel Foods Corporation and Ecolab, Inc.
Richard S. Levitt 67 1971 Chairman and Chief Executive Officer, Nellis Corporation (private
capital management), 1988 to present. Mr. Levitt is a director of
Gaylord Container Corporation, Norwest Corporation and Norwest
Bank Iowa, N.A.
E. T. Meredith III 64 1966 Chairman of the Executive Committee, Meredith Corporation,
1988 to present.
</TABLE>
DIRECTORS CONTINUING IN OFFICE AS CLASS I DIRECTORS -
TERMS TO EXPIRE IN 1999
<TABLE>
<CAPTION>
YEAR
FIRST ELECTED PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
DIRECTOR AGE AS A DIRECTOR DURING THE PAST FIVE YEARS AND OTHER INFORMATION
- - -------------------- --- ------------- -----------------------------------------------------------------
<S> <C> <C> <C>
Pierson M. Grieve 69 1985 Chairman and Chief Executive Officer, Retired, Ecolab, Inc.
(developer and marketer of cleaning, sanitizing and maintenance
products and services), December 1995 to present; Chairman,
Ecolab, Inc., March 1995 to December 1995; Chairman and Chief
Executive Officer, Ecolab, Inc., January 1983 to March 1995. Mr.
Grieve is a director of St. Paul Companies, Inc.; Norwest
Corporation; U S West Inc.; Minnegasco, a subsidiary of Houston
Industries; and Danka Business Systems, PLC.
Robert E. Lee 62 1982 Executive Director, Emeritus, The Denver Foundation (community
foundation), 1996 to present; Executive Director, The Denver
Foundation, 1989 to 1996. Mr. Lee is a director of Equitable of
Iowa Companies, Storage Technology Corporation and Source
Capital Corporation.
Jack D. Rehm 64 1988 Chairman of the Board, Meredith Corporation, July 1992 to
present; Chief Executive Officer, Meredith Corporation, 1989 to
December 1996; President, Meredith Corporation, 1988 to July
1994. Mr. Rehm is a director of Equitable of Iowa Companies,
International Multifoods Corporation and Norwest Bank Iowa,
N.A.
Barbara S. Uehling 65 1980 Executive Director of the Business - Higher Education Forum
(non-profit organization that addresses issues of mutual concern
to business and higher education), February 1995 to present;
Interim Director of the Business - Higher Education Forum,
July 1994 to February 1995; Chancellor, University of California,
Santa Barbara, 1987 to July 1994.
</TABLE>
<PAGE>
BOARD COMMITTEES
There are five standing committees of the Board of Directors:
AUDIT COMMITTEE. The members of this committee are Messrs. Levitt
(Chairman), Henry and Lee and Drs. Coleman and Uehling. The committee is
composed entirely of non-employee directors. The committee reviews with the
Company's outside auditors the scope and results of the annual audit, determines
the responsibilities and scope of the Company's internal audit department and
carries on such other activities as required to give additional assurances
regarding financial information used by the Board and distributed to outsiders.
COMPENSATION/NOMINATING COMMITTEE. The members of this committee are
Messrs. Lee (Chairman), Henry, Levitt and Reding. The committee is composed
entirely of non-employee directors. The committee reviews and approves changes
in corporate officers' salaries and salary administration plans and programs,
approves prior to adoption any management incentive, bonus or stock plans or
agreements and administers such plans as required. The committee nominates
directors to serve on the Board. The committee will consider stockholder
recommendations for directors sent to the Compensation/Nominating Committee, c/o
Thomas L. Slaughter, Meredith Corporation, 1716 Locust Street, Des Moines, Iowa
50309-3023.
EXECUTIVE COMMITTEE. The members of this committee are Messrs. Meredith
(Chairman), Kerr, Levitt and Rehm. The committee has, during intervals between
meetings of the Board, all the authority of the Board in management of the
business except for the authority to declare dividends, fix compensation of any
members of the committee, amend or repeal certain resolutions of the Board, or
make fundamental changes in the corporate structure of the Company.
FINANCE COMMITTEE. The members of this committee are Messrs. Reding
(Chairman), Baum, Grieve, Johnson and Lee. The committee advises the Board with
respect to corporate financial policies and procedures, dividend policy,
specific corporate financing plans and annual operating and capital budgets. It
also provides financial advice and counsel to management, appoints depositories
of corporate funds and specifies conditions of deposit and withdrawal,
supervises corporate investment portfolios and reviews capital expenditure
requests by management within the limits established by the Board.
PENSION COMMITTEE. The members of this committee are Messrs. Grieve
(Chairman), Baum, Henry and Johnson and Dr. Uehling. The committee reviews
pension plans and amendments to ascertain that they are being administered in
accordance with their terms and are providing authorized benefits, reviews
levels and types of benefits and recommends changes. The committee recommends to
the Board investment objectives for pension funds, reviews the performance of
the funds and recommends to the Board such committees it deems desirable for the
administration of the pension plans.
During fiscal year 1996-97, the full Board met seven times, the Audit,
Finance and Compensation/Nominating Committees each met four times, the Pension
Committee met twice and the Executive Committee met three times. All directors
attended more than 75% of all meetings of the full Board and the respective
committees on which they served during fiscal year 1996-97.
Effective with the Annual Meeting held November 11, 1996, the compensation
program for non-employee directors who are not expected to retire from service
on the Board on or before February 2, 1998, was changed to provide for a $35,000
annual retainer with an additional $3,000 annual retainer for committee
chairpersons. Under the 1990 Restricted Stock Plan for Non-Employee Directors,
as amended (the "1990 Plan"), directors have the opportunity to receive either
all or 50% of the annual retainer (including the chairperson retainer) in either
restricted stock or stock equivalents equal to 105% of the amount of the annual
retainer converted. Each new non-employee director receives 1,200 shares of
restricted stock upon election to the Board. The restricted stock vests on the
fifth anniversary of the date of the grant. Stock equivalents are converted to
shares of Company common stock and delivered to the director upon the director's
retirement from the Board. During fiscal year 1996-97, all non-employee
directors, with two exceptions, elected to receive all or 50% of their retainer
in restricted stock or stock equivalents.
The 1993 Stock Option Plan for Non-Employee Directors, as amended (the
"1993 Plan"), is a further encouragement of directors' ownership of the
Company's stock. Each non-employee director expected to retire after February 2,
1998, receives an option to purchase 6,000 shares of Company
<PAGE>
common stock on the day following the Annual Meeting of Stockholders at an
exercise price equal to the average of the high and low market prices on the
date of the grant. Effective with the November 11, 1996, Annual Meeting, the
non-employee director pension and life insurance programs were ended for
directors with anticipated retirement dates after February 2, 1998. The accrued
pension balances for those directors were converted into stock equivalents as of
that date and credited to each director's account under the 1990 Plan.
Those directors who anticipate retirement from the Board prior to February
2, 1998, remain in the prior compensation program receiving an annual retainer
of $22,000 and $800 for each committee meeting ($600 for telephone meetings) and
each board meeting attended, with a $200 meeting supplement for committee
chairpersons. Each of those directors may participate in the 1990 Plan, each
receives annual options to purchase 4,000 shares of Company common stock and
each remains in the life insurance and pension program. The pension program
provides a monthly retirement benefit equal to 1/12 of the annual retainer fee
at the time of retirement for a period equal to the number of full calendar
months during which the director served on the Board, not to exceed 120 months,
or a lump sum amount equal to the present value of such benefit. As of the date
of this Proxy Statement, only one active director remains under this
compensation program. Employee directors receive no compensation for Board
service.
REPORT OF THE COMPENSATION/NOMINATING
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation/Nominating Committee reviews, considers and approves
changes in the compensation of the Company's officers. The Committee administers
various stock and other compensation-related plans provided for the benefit of
the Company's officers, directors, and other key managers, with the purpose of
encouraging the participants to achieve the Company's performance goals and to
align the interests of the participants with the interests of the Company's
stockholders. The Compensation/Nominating Committee is composed entirely of
independent outside directors. There are no Compensation Committee interlocks
and there is no insider participation on the Committee. The Committee has
provided the following report on executive compensation for inclusion in this
Proxy Statement:
COMPENSATION PHILOSOPHY
The Company's executive compensation philosophy has the following
objectives:
(1) To provide compensation opportunities competitive with those available
at comparable firms in the specific industries in which the Company conducts its
businesses and the national marketplace;
(2) To provide the opportunity to earn beyond competitive levels if
superior operating performance and stockholder returns are achieved;
(3) To design incentives that balance the need to meet or exceed annual
operating plans with the need for long-term business growth and to provide
superior stockholder returns;
(4) To provide clear, controllable and measurable objectives for the
executives to meet; and
(5) To attract, retain and motivate top-caliber executives in each market
segment in which the Company competes.
Pay for performance, which is directly linked to both short-term and
long-term compensation, is the foundation of the compensation program for the
Company's Chief Executive Officer and other executive officers. Mr. Jack D.
Rehm served as the Company's Chief Executive Officer through December 31, 1996.
Mr. William T. Kerr became the Company's Chief Executive Officer on January 1,
1997. Compensation information on both gentlemen is presented below.
Section 162(m) of the Internal Revenue Code limits the deductibility of
certain items of compensation paid to the CEO and to each of the named executive
officers to $1,000,000 annually. The Committee believes that it is in the best
interests of the Company to receive maximum tax deductibility for compensation
paid to the CEO and the other executive officers under Section 162(m). The
Committee has adopted or approved appropriate changes to the Company's long-term
and short-term incentive programs to provide for the deductibility of
compensation received under the plans, but reserves the
<PAGE>
right to provide for compensation to the CEO and other executive officers, that
may not be deductible, if in the best interests of the Company and the
stockholders.
CEO AND EXECUTIVE OFFICER COMPENSATION PROGRAM ELEMENTS
Periodic media and general industry competitive market reviews of executive
compensation are conducted with the assistance of outside compensation
consultants. The Company's compensation program strives to be competitive in
relation to the market data available. The Committee establishes CEO and other
executive officer base salaries within the mid-range of the market survey data.
Short-term and long-term incentive targets are set in the same manner. Superior
performance may result in compensation beyond the mid-range.
BASE SALARY. Salaries for the CEO and executive officer group are based on
the marketplace value of each job and on individual contributions and
performance. The performance of the CEO and each executive officer is reviewed
annually by the Committee. Salary increases are based primarily on the annual
merit reviews. The rates of increase are tied to both individual performance and
general executive compensation trends.
Mr. Rehm's annual base salary, pursuant to his employment contract, was
$600,000 for the 1996-97 fiscal year. Effective January 1, 1997, Mr. Kerr's
salary was increased to $550,000 for the balance of the 1996-97 fiscal year,
pursuant to the terms of his employment contract, and to reflect the additional
responsibilities he assumed on that date. Messrs. Rehm's and Kerr's salaries
are within the mid-range of salaries for comparable positions as reported in
the competitive markets surveyed.
SHORT-TERM INCENTIVE PROGRAM. The Company's Management Incentive Plan
provides the CEO and other executive officers with an annual incentive to attain
established financial and overall performance targets. For the 1996-97 fiscal
year, at least 85% of the incentive awards to the CEO and all other executive
officers was based on specific financial targets relating to earnings and cash
flow, with the balance relating to predetermined qualitative organizational
objectives.
The goals for each participant are reviewed and revised annually in
connection with the approval of the budget for the upcoming fiscal year. For the
1996-97 fiscal year, the incentive payments for goal achievement for the CEO
were set at 50% of base salary for achieving target and up to 130% of base
salary for achieving performance above target. The incentive payments for the
other executive officers were 40% for achieving target and up to 100% for
achieving performance above target. At each quarterly meeting of the Committee,
the progress of the CEO and the other executive officers toward meeting the
quantitative goals established for the fiscal year was reviewed.
For the 1996-97 fiscal year, the Company exceeded the target financial
performance goals established by the Committee at the beginning of the year for
Messrs. Rehm and Kerr each to receive his incentive award. Mr. Rehm received an
incentive award of $750,000, and Mr. Kerr received an incentive award of
$687,500. The awards were determined primarily by the fact that the Company
significantly exceeded budgeted earnings and cash flow. Other factors considered
by the Committee in determining the awards were the further strengthening of the
Company's core businesses through strategic acquisitions and alliances and the
continued strong performance of the Company's return on equity. In addition, the
Committee recognized the 39% improvement in the price of the Company's common
stock during the fiscal year.
For the 1996-97 fiscal year, the other executive officers named in this
Proxy Statement received incentive awards totaling $1,031,000. For the corporate
officers (other than operating group presidents), the awards were based on the
fact that the Company surpassed financial targets for earnings and cash flow and
in recognition of the achievement of qualitative goals. For the operating group
presidents, the awards were based on the performance of the relevant group
and/or operation against their respective financial targets for earnings and
cash flow, the fact that the Company surpassed financial targets for earnings
and in recognition of the achievement of qualitative goals.
LONG-TERM INCENTIVE PROGRAM. In the 1996-97 fiscal year, the Committee
utilized the grant of nonqualified stock options, under the 1992 Meredith
Corporation Stock Incentive Plan (the "1992 Plan") and under the 1996 Stock
Incentive Plan (the "1996 Plan"), to the executive officers in the
implementation of its long-term incentive program.
The nonqualified stock options awarded by the Committee under the 1992 Plan
and 1996 Plan during the 1996-97 fiscal year as part of the long-term incentive
program are exercisable either one-third
<PAGE>
per year over the three-year period commencing on the first anniversary of the
grant date or on the fifth anniversary of the grant date. The options granted
will expire on the tenth anniversary of the date of grant. All options granted
become exercisable in the event of the grantee's termination of employment due
to death, disability or retirement. Unless the grantee's employment with the
Company is terminated for reasons other than death, disability or retirement,
the grantee may exercise all exercisable stock options until the date of
expiration. All options granted during fiscal year 1996-97 carry an exercise
price at or above the fair market value on the date of grant.
During fiscal year 1996-97, in connection with his election to the office
of Chief Executive Officer, Mr. Kerr was granted a total of 466,600 nonqualified
stock options in three grants with exercise prices at the fair market value on
the date of grant, and a total of 233,400 nonqualified stock options in three
grants with exercise prices at 125% of the fair market value on the date of
grant. The options granted to Mr. Kerr are exercisable on the fifth anniversary
of the date of grant. The other named executive officers were granted an
aggregate total of 345,200 nonqualified stock options at $20.3125 per share.
These grants were in furtherance of the Committee's desire to encourage the
executive officers to focus on long-term performance and stockholder value under
the long-term incentive plan.
FIFTEEN PERCENT RETURN ON EQUITY ("ROE") PROGRAM. The Company established a
goal of achieving and maintaining a 15% ROE by the end of fiscal year 1996-97.
Subsequent to the establishment of this goal, the Company adopted a change in
accounting principle related to subscription acquisition costs which reduced the
Company's stockholder equity thus favorably affecting the calculation of ROE. As
of the end of fiscal year 1996-97, the Company's ROE was 18.2%, calculated as if
the accounting principle had not been adopted, and 20.7% as calculated under the
new accounting principle.
Under the 15% ROE Program, in fiscal year 1994-95, Mr. Rehm was granted
64,056 nonqualified stock options at $11.5625 per share and 50,000 shares of
restricted stock, Mr. Kerr was granted 155,768 nonqualified stock options at
$11.5625 and the other named executive officers were granted an aggregate total
of 329,040 nonqualified stock options at $11.5625 per share. The restrictions on
up to 75% of the restricted stock were to lapse and the vesting of up to 75% of
the nonqualified stock options was to accelerate if the Company achieved an ROE
between 14.5% and 15% by the end of fiscal year 1996-97. The restrictions on the
balance of the restricted stock were to lapse at the end of the following fiscal
year if 15% ROE was achieved for that year. Similarly, the vesting of the
balance of the nonqualified stock options was to accelerate to the end of the
following fiscal year if the 15% ROE was achieved. The Committee on August 14,
1996, acting within its authority under the plan and in recognition of the
achievement of the Company's ROE goal one year in advance of its target,
authorized the lapse of the restrictions on 75% of the restricted stock granted
to Mr. Rehm effective September 1, 1996 (subject to a limitation on the number
of shares on which the restrictions lapse on that date to ensure the
deductibility of the value of the shares under Section 162(m)), and authorized
the acceleration of the vesting of 75% of the nonqualified stock options granted
under the 15% ROE Program to August 14, 1996. Due to the continued ROE
performance during fiscal year 1996-97, the balance of the restrictions lapsed
(subject to limitation on the number of shares on which restrictions lapse on
that date to ensure the deductibility of the value of the shares under Section
162(m)), and vesting accelerated on the balance of the restricted stock and
stock options granted to September 1, 1997, and to August 10, 1997,
respectively.
EARNINGS PER SHARE ("EPS") PROGRAM. At its meeting on August 12, 1997, the
Committee adopted a program using nonqualified stock options under the 1996 Plan
to provide an incentive to the executive officers and other key employees to
achieve an annualized EPS growth rate of 15% from the 1996-97 fiscal year to the
1999-2000 fiscal year and to maintain at least an average ROE of 15% over the
three fiscal years ending June 30, 2000. On August 12, 1997, Mr. Kerr was
granted 85,000 nonqualified stock options at $29.875 per share and the other
named executive officers were granted an aggregate total of 87,000 nonqualified
stock options at $29.875 per share under the EPS program. The options will
become exercisable in February, 2007. The vesting of the options will accelerate
to August 12, 2000, for a graduated number of options beginning with the
achievement of at least an annualized EPS growth of 13% up to 100% of the number
granted if the annualized EPS growth equals or exceeds 15%.
THE MEREDITH EXECUTIVE STOCK OWNERSHIP PROGRAM. A stock ownership program
has been designed by the Committee utilizing the 1992 Plan and the 1996 Plan.
The purpose of the program is to encourage increased Company stock holdings by
executive officers. Target levels of individual stock holdings were
<PAGE>
established for the participants in the program at one or two times base pay.
Each participant, other than Mr. Rehm, is awarded restricted stock equal to 20%
of his or her personal acquisitions of Company stock up to the established
target since the last day of the prior fiscal year. The incremental stock
holdings must be maintained for a specified period of time in order for the
restrictions to lapse. The Committee believes this program will provide further
incentives to the participants to focus on long-term Company performance and
stockholder value. Mr. Rehm participated in the program and achieved his target
level, but did not receive an award of restricted stock. The other named
executive officers received an aggregate total of 10,440 shares of restricted
stock under this program during fiscal year 1996-97.
OTHER COMPENSATION
The CEO and other executive officers are eligible to participate in the
Company benefit plans described elsewhere in this Proxy Statement under the
terms of those plans and without consideration of achievement of performance
standards.
PEER GROUP SELECTION AND COMPARATIVE ANALYSIS
The Company does not believe that the published indices accurately reflect
the mix of businesses in which the Company competes. Therefore, the Company has
in good faith selected a Peer Group of 12 media and television broadcast
companies for the purpose of preparing the stockholder performance graph
contained elsewhere in this Proxy Statement. Recognizing that there are no other
companies that have the exact same combination of businesses as the Company, the
companies selected for the Peer Group have multimedia businesses primarily with
publishing and/or television broadcasting in common with the Company.
Many of the companies selected for the Peer Group are larger and/or engaged
in businesses other than the Company's core businesses. Consequently, for the
purposes of compensation comparisons, the Company and the Committee have chosen
to use broader media and general industry survey information that includes
information on members of the Peer Group. The Committee has attempted to
maintain the compensation for the CEO and other executive officers at a level
close to the mid-range of the surveyed groups.
CONCLUSION
The Committee believes that the Company's executive compensation programs
effectively tie executive pay to the performance of the Company and to
stockholder value.
Mr. Robert E. Lee, Chairman
Mr. Frederick B. Henry
Mr. Richard S. Levitt
Mr. Nicholas L. Reding
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table provides a summary of compensation paid to Messrs. Rehm
and Kerr and the other four most highly compensated executive officers of the
Company for services rendered to the Company during each of the last three
fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS
-------------------------------- -----------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING
AWARDS OPTION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1)(2)(3)(4) AWARDS(3)(5) COMPENSATION(6)
- - ------------------------------- ---- -------- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Jack D. Rehm 1997 $600,000 $750,000 0 0 $18,333
Chairman of the Board and 1996 600,000 750,000 0 200,000 17,561
Chief Executive Officer (7) 1995 525,000 650,000 $601,563 64,056 18,907
William T. Kerr 1997 $530,000 $687,500 $ 85,752 700,000 $17,836
President and Chief 1996 480,000 540,000 78,250 105,000 17,064
Executive Officer (8) 1995 440,000 490,000 211,750 256,568 14,945
Christopher M. Little 1997 $376,000 $376,000 $ 60,026 154,600 $18,400
President - Publishing Group 1996 356,000 325,000 15,650 54,600 18,700
1995 336,000 332,000 96,250 178,656 19,510
Philip A. Jones 1997 $338,000 $250,000 $ 29,156 145,000 $16,346
President-Broadcasting Group 1996 320,000 202,000 46,950 45,000 15,789
1995 302,000 293,000 197,313 159,628 16,285
Larry D. Hartsook 1997 $212,000 $205,000 $ 30,013 23,400 $16,632
Vice President - Finance 1996 193,500 190,000 3,913 21,000 16,472
1995 183,500 175,000 57,750 90,320 16,444
Leo R. Armatis 1997 $203,000 $200,000 $ 18,865 22,200 $15,482
Vice President - 1996 192,000 188,000 0 21,000 14,981
Corporate Relations
</TABLE>
- - ------------------
(1) Accumulated Restricted Stock *
AGGREGATE
SHARES YEAR-END VALUE
---------- --------------
Jack D. Rehm 254,266** $7,373,714
William T. Kerr 52,400 1,519,600
Christopher M. Little 17,200 498,800
Philip A. Jones 35,360 1,025,440
Larry D. Hartsook 15,200 440,800
Leo R. Armatis 14,560 422,240
*Adjusted for a two-for-one stock split in the form of a stock dividend on
March 14, 1997.
**Includes 109,724 shares Mr. Rehm acquired through the conversion of
deferred long-term awards, and 31,342 shares awarded with restrictions that
lapse only if the Company achieves certain ROE goals (see note 4 below).
Dividends are paid on reported restricted stock.
(2) Restricted stock awards vest five years after date of grant, except for Mr.
Rehm who has both five- and ten-year vesting restrictions and restrictions
that lapse only if the Company achieves certain ROE goals (see note 4
below) and Mr. Kerr who has shares vesting at five, six, eight and ten
years.
(3) Adjusted for a two-for-one stock split in the form of a stock dividend on
March 14, 1997.
(4) On September 1, 1994, Mr. Rehm was awarded 50,000 shares of restricted
stock with performance restrictions related to the Company's achieving at
least a 14.50% ROE for the 1996-97 fiscal year and a 15% ROE for the
1997-98 fiscal year. On August 14, 1996, the Compensation/Nominating
Committee approved the acceleration of the lapse of restrictions to
September 1, 1996, on 75% of the shares of restricted stock (subject to a
limitation on the number of shares on which the restrictions lapse on that
date to ensure the deductibility of the value of the shares under Section
162 (m)) in recognition of the Company's having achieved and surpassed the
ROE goal one year early. The restrictions on 18,658 shares lapsed on
September 1, 1996, with the restrictions on the balance to lapse on June 1,
1998, due to the application of Section 162(m).
The restrictions on 12,500 shares lapsed on September 1, 1997, due to the
Company's achieving an ROE of at least 15% for the 1996-97 fiscal year.
(5) On August 10, 1994, Mr. Rehm and the other named executive officers were
granted an aggregate of 548,864 nonqualified stock options exercisable in
February 2004, but with an acceleration of vesting to 1997 on a graduated
number up to 75% if the Company achieves an ROE for fiscal year 1996-97
equal to or greater than 14.50%, and the balance exercisable in 1998 if the
Company achieves an ROE of at least 15% for the 1997-98 fiscal year. On
August 14, 1996, the Compensation/Nominating Committee approved the
acceleration of the vesting of 75% of said options as of that date in
recognition of the Company's having achieved and surpassed
<PAGE>
the ROE goal one year early. The balance of the options became exercisable
on August 13, 1997, since the Company achieved an ROE of at least 15% for
the 1996-97 fiscal year.
(6) This column discloses: (a) matching contributions made by the Company equal
to 75% of the first 5% of the employee's contributions to the Meredith
Savings and Investment Plan, a defined contribution plan available
generally to the employees of the Company. The Company made matching
contributions to the plan of $6,536 for Mr. Rehm; $6,536 for Mr. Kerr;
$6,000 for Mr. Little; $5,686 for Mr. Jones; $5,972 for Mr. Hartsook; and
$5,682 for Mr. Armatis; and (b) life insurance premiums paid by the Company
on policies that are owned by the employees under split dollar insurance
arrangements as follows: Mr. Rehm, $11,797; Mr. Kerr, $11,300; Mr. Little,
$12,400; Mr. Jones, $10,660; Mr. Hartsook, $10,660; and $9,800 for Mr.
Armatis.
(7) Served as Chairman from July 1, 1992, to present and as Chief Executive
Officer from 1989 through December 31, 1996.
(8) Served as President from July 1, 1994, to present and as Chief Executive
Officer from January 1, 1997, to present.
OPTION GRANTS TABLE
The following table sets forth certain information with respect to options
to purchase shares of the Company's common stock awarded during the 1996-97
fiscal year to the named executive officers. All options granted were
nonqualified options. No stock appreciation rights alone or in tandem with stock
options were awarded in fiscal year 1996-97. The option exercise price is no
lower than the fair market value of the Company's common stock on the date of
the grant. All options become exercisable in installments of one-third on the
first three anniversaries of the date of grant, except for Mr. Kerr's which all
vest five years from grant date, and 100,000 shares each for Messrs. Little and
Jones, which also vest five years from award date.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM(3)
- - ---------------------------------------------------------------------------------------------- -------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED TO EXERCISE
UNDERLYING EMPLOYEES IN OR BASE EXPIRATION
NAME OPTIONS GRANTED** FISCAL YEAR(1) PRICE ($) DATE(2) 5% ($) 10% ($)
- - ----------------------- ------------------ ------------------ --------- --------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Jack D. Rehm - - - - $ 0 $ 0
William T. Kerr 116,600 7.97% 21.0938 June 30, 2006 1,546,790 3,919,869
William T. Kerr 58,400 3.99% 26.3672 June 30, 2006 968,400 2,454,116
William T. Kerr 116,600 7.97% 20.3125 August 13, 2006 1,489,498 3,774,679
William T. Kerr 58,400 3.99% 25.3905 August 13, 2006 932,528 2,363,210
William T. Kerr 116,600 7.97% 32.5390 January 1, 2007 2,386,056 6,046,734
William T. Kerr 233,400 15.96% 26.0313 January 1, 2007 3,820,978 9,683,110
Christopher M. Little 54,600 3.73% 20.3125 August 13, 2006 697,483 1,767,560
Christopher M. Little 100,000 6.84% 20.3125 August 13, 2006 1,277,442 3,237,289
Philip A. Jones 45,000 3.08% 20.3125 August 13, 2006 574,849 1,456,780
Philip A. Jones 100,000 6.84% 20.3125 August 13, 2006 1,277,442 3,237,289
Larry D. Hartsook 23,400 1.60% 20.3125 August 13, 2006 298,921 757,526
Leo R. Armatis 22,200 1.52% 20.3125 August 13, 2006 283,592 718,678
All Stockholders (4) - - - - 680,301,951 1,724,018,714
</TABLE>
- - -------------------------
**Adjusted for a two-for-one stock split in the form of a stock dividend on
March 14, 1997.
(1) Total options granted during the fiscal year were 1,462,800.
(2) Options are fully exercisable after death or termination of employment due
to disability or retirement through the expiration date.
(3) As required by the rules of the Securities and Exchange Commission, the
dollar amounts under these columns represent the hypothetical gain or
"option spread" that would exist for the options based on assumed 5% and
10% annual compounded rates of stock price appreciation over the full
option term. The prescribed rates are not intended to forecast possible
future appreciation.
(4) All stockholders are shown for comparison purposes only. The realizable
value to all stockholders is the aggregate net gain, assuming a starting
market price of $20.3125 (the fair market value on August 13, 1996), and
appreciation at assumed annual rates of 5% and 10% for a ten-year period.
<PAGE>
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth as to each named executive officer
information with respect to the status of all options granted as of June 30,
1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FY-END (#)(1) FY-END ($)(2)
--------------------------- ---------------------------
SHARES ACQUIRED
NAME ON EXERCISE VALUE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ----------------------- --------------- ------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jack D. Rehm 300,000 $5,629,500 414,710 149,346 $7,777,954 $1,717,147
William T. Kerr 0 0 347,826 842,542 6,385,507 5,114,721
Christopher M. Little 0 0 183,192 240,664 3,232,177 2,655,004
Philip A. Jones 0 0 239,220 219,608 4,526,038 2,405,040
Larry D. Hartsook 0 0 114,040 62,280 2,105,256 808,632
Leo R. Armatis 16,400 289,809 93,928 56,508 1,722,857 718,483
</TABLE>
- - ---------------------
(1) Adjusted for a two-for-one stock split in the form of a stock dividend on
March 14, 1997.
(2) Calculated based on the fair market value of the Company's common stock on
June 30, 1997 ($29.00).
<PAGE>
COMPARISON OF STOCKHOLDER RETURN
The following graph compares the performance of the Company's common stock
during the period July 1, 1992, to June 30, 1997, with the S&P 500 Index and a
Peer Group of 12 companies engaged in multimedia businesses primarily with
publishing and/or television broadcasting in common with the Company.
The S&P 500 Index includes 500 U.S. companies in the industrial,
transportation, utilities and financial sectors and is weighted by market
capitalization. The Peer Group selected by the Company for comparison, which is
also weighted by market capitalization, is comprised of the following: A.H. Belo
Corporation; Gannett Company, Inc.; Lee Enterprises, Inc.; McGraw-Hill, Inc.;
Media General, Inc.; New York Times Company; Reader's Digest Association, Inc.;
E.W. Scripps Company; Time Warner, Inc.; Times Mirror Company; Tribune Company
and Washington Post Company.
The graph depicts the results of investing $100 in the Company's common
stock, the S&P 500 Index and the Peer Group at closing prices on June 30, 1992.
It assumes that dividends were reinvested.
[PLOT POINTS GRAPH]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Meredith ......... $100 $134 $161 $196 $325 $456
S&P 500 ......... $100 $114 $115 $145 $183 $246
Peer Group ...... $100 $113 $115 $132 $157 $200
</TABLE>
<PAGE>
RETIREMENT PROGRAMS AND EMPLOYMENT AGREEMENTS
The Company maintains separate qualified defined benefit plans for its
union and nonunion employees, as well as two nonqualified supplemental pension
plans covering certain nonunion employees. Defined benefit plans and the
supplemental pension plans are actuarial plans and the amount of the
contribution with respect to a specific person cannot readily be separately
calculated by the regular actuaries for the plans. The Company makes annual
contributions to the qualified plans to the extent permitted by the funding
rules of the Internal Revenue Service.
As of January 1, 1997, the latest date for which information is available,
252 employees participated in the bargaining unit defined benefit plan and 2,109
nonunion employees participated in the nonunion defined benefit plans. Assuming
retirement at age 65, estimated annual retirement benefits under the nonunion
qualified plan as in effect for the 1997 plan year would be as follows:
PENSION TABLE
YEARS OF SERVICE*
FINAL -----------------------------------------------
AVERAGE
COMPENSATION 10 15 20 25
- - ------------ -------- -------- -------- --------
$100,000 $ 15,226 $ 22,840 $ 30,453 $ 38,066
150,000 25,226 37,840 50,453 63,066
200,000 35,226 52,840 70,453 88,066
300,000 55,226 82,840 110,453 138,066
400,000 75,226 112,840 150,453 188,066
500,000 95,226 142,840 190,453 238,066
600,000 115,226 172,840 230,453 288,066
- - ------------------
*Service prior to September 1, 1989, may cause these amounts to be increased due
to the conversion of the defined benefit plan (including the participant
contributions, if any) to the cash balance formula. Service credit is capped at
25 years, so there are no incremental retirement benefits under the qualified
plan for years after 25 years of service.
As of January 1, 1997, the credited years of service for individuals listed
in the compensation table above are as follows: Jack D. Rehm, Chairman - 34
years; William T. Kerr, President and Chief Executive Officer - 5 years; Philip
A. Jones, President-Broadcasting Group - 17 years; Christopher M. Little,
President-Publishing Group - 4 years; Larry D. Hartsook, Vice President-Finance
- - - 27 years and Leo R. Armatis, Vice President-Corporate Relations - 16 years.
For 1996, covered compensation for purposes of the supplemental pension plans
including bonuses was $1,350,000 for Jack D. Rehm, Chairman; $1,035,000 for
William T. Kerr, President and Chief Executive Officer; $531,000 for Philip A.
Jones, President-Broadcasting Group; $691,000 for Christopher M. Little,
President-Publishing Group; $392,750 for Larry D. Hartsook, Vice
President-Finance and $385,500 for Leo R. Armatis, Vice President-Corporate
Relations.
The Company has an agreement with Mr. Rehm that provides for his employment
at least through October 31, 1997, but not later than December 31, 1997, and for
his holding the office of Chairman through December 31, 1997. Prior to July 1,
1997, Mr. Rehm received an annual salary of not less than $475,000 and an annual
incentive bonus determined under the terms of the Company's Management Incentive
Plan. As of July 1, 1997, Mr. Rehm's annualized salary through the term of his
employment is not less than $500,000, and he is no longer eligible to
participate in the Company's Management Incentive Plan. In the event of the
termination of Mr. Rehm's employment due to death, his then current annual base
salary will be paid to his designated beneficiary for a period of 12 months
following the date of death. In the event Mr. Rehm becomes permanently disabled,
his annual base salary will continue to be paid at periodically reduced rates
through October 31, 1998. If Mr. Rehm is discharged for reasons other than
cause, the Company will continue to pay Mr. Rehm his annual base salary through
October 31, 1997. Mr. Rehm's contract also provides that he will serve as a
consultant to the Company, receiving not less than $150,000 per year, following
the termination of his employment through December 31, 2000.
The Company entered into an agreement effective January 1, 1997, with Mr.
Kerr that provides for his employment through December 31, 2001, subject to
automatic renewal for subsequent one-year terms. The agreement provides that
Mr. Kerr will serve as Chief Executive Officer and President of the Company or
in such other position as elected by the Board. The agreement anticipates Mr.
Kerr's
<PAGE>
election as Chairman of the Board effective January 1, 1998. Mr. Kerr receives a
minimum annual salary of $550,000 and an incentive bonus determined under the
terms of the Company's Management Incentive Plan. The agreement also provides
for the grant of nonqualified stock options, information on which is presented
elsewhere in this Proxy Statement. In the event Mr. Kerr becomes permanently
disabled, his annual base salary will continue to be paid at periodically
reduced rates through the period that would have constituted his term of
employment, but not beyond April 30, 2006. In addition to participating in the
Meredith Employees' Retirement Income Plan, the Meredith Savings and Investment
Plan and the Company's supplemental retirement plans, the Company has
established a Minimum Supplemental Retirement Benefit Program ("MSRBP") for the
benefit of Mr. Kerr. The MSRBP provides for a minimum retirement benefit equal
to the benefits Mr. Kerr would have received under the retirement plans of a
previous employer offset by benefits accrued under the Company's pension plans.
The MSRBP also provides for a death benefit related to the value of the accrued
benefit under the MSRBP.
Messrs. Rehm and Kerr and the other executive officers of the Company have
all entered into Severance Agreements with the Company. These agreements provide
for the payment to the executive of an amount equal to three times the average
annual base salary and incentive compensation paid to the executive during the
three fiscal years immediately prior to a change in control of the Company as
defined in detail in the agreements. Two Restricted Stock Agreements entered
into with Mr. Rehm in 1992 provide for the lapse of the restrictions in the
event of a change in control of the Company, as defined in the agreements. All
agreements with the executive officers with respect to grants of nonqualified
stock options under the 1996 Plan provide for the vesting of the options in the
event of a change of control in accordance with the terms of the 1996 Plan.
STOCKHOLDERS' PROPOSALS
Stockholders wishing to include proposals in the Company's Proxy Statement
and form of proxy for the 1998 Annual Meeting of Stockholders must submit the
proposals so that they are received by the Company no later than June 3, 1998.
The proposals should be addressed to Thomas L. Slaughter, Meredith Corporation,
1716 Locust Street, Des Moines, Iowa 50309-3023.
INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendations of its Audit Committee, the Board of Directors of the
Company selected KPMG Peat Marwick as independent public accountants of the
Company and its subsidiaries for the fiscal year ending June 30, 1998. KPMG Peat
Marwick examined the financial statements of the Company and its subsidiaries
for the most recently completed fiscal year. Representatives of that firm are
expected to be present at the Annual Meeting with an opportunity to make a
statement if they so desire and will be available to respond to appropriate
questions presented at the meeting by stockholders.
FURTHER BUSINESS
Except as hereinbefore stated, the management knows of no further business
intended to be presented at the meeting, but, if any further business properly
comes before the meeting, the persons named in the enclosed form of proxy will
vote all proxies in accordance with their best judgment.
THOMAS L. SLAUGHTER
VICE PRESIDENT-GENERAL COUNSEL
AND SECRETARY
Des Moines, Iowa
October 1, 1997
<PAGE>
DETACH HERE
MEREDITH CORPORATION
PROXY
CLASS B COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MEREDITH CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 10, 1997
FREDERICK B. HENRY, E.T. MEREDITH III and JACK D. REHM, and each of them are
hereby appointed proxies of the stockholder(s) signing this card on the reverse
side, with power of substitution acting by a majority of proxies present and
voting, or if only one proxy is present and voting, then acting by that one, to
vote the shares of Meredith Corporation common stock which said stockholder(s)
is (are) entitled to vote, at the ANNUAL MEETING OF STOCKHOLDERS to be held at
the company's principal executive offices, 1716 Locust Street, Des Moines, Iowa
50309-3023, on Monday, November 10, 1997, at 10:00 A.M., local time, and at any
adjournment thereof, with all the powers the signing stockholders would possess
if present. The Directors recommend a vote FOR such matters. The proxies are
instructed to vote as follows:
The shares represented by this proxy will be voted in the manner directed herein
by the undersigned stockholder(s). If no direction is made, this proxy will be
voted FOR all proposals shown on the reverse side of this card and as set forth
in the Notice of Annual Meeting dated October 1, 1997. The undersigned
acknowledges receipt of the Notice of Annual Meeting of Stockholders and the
related Proxy Statement.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE
SIDE]
<PAGE>
Detach card below, sign, date and mail in postage-paid envelope provided.
[LOGO] MEREDITH CORPORATION
PLEASE ACT PROMPTLY, SIGN, DATE & MAIL YOUR PROXY CARD TODAY.
DETACH HERE
[X] Please mark votes as in this example.
1. Election of four Class II Directors to serve until the annual meeting in
2000, as provided in the bylaws of the Company:
Nominees: Herbert M. Baum, Frederick B. Henry, William T. Kerr, and
Nicholas L. Reding
[ ] FOR [ ] WITHHELD
2. Election of one Class III Director to serve until the annual meeting in
1998, as provided in the bylaws of the Company:
Nominee: Mary Sue Coleman
[ ] FOR [ ] WITHHELD
3. In its discretion, upon such other matters as may properly come before the
meeting.
[ ] For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. When
shares are held by joint tenants, both should
sign. When signing as attorney, executor,
administrator, trustee or guardian, please give
full title as such. If a corporation, please sign
in full corporate name by President or other
authorized official. If a partnership, please
sign in partnership name by an authorized person.
Signature:_________________ Date:_______ Signature:________________ Date:_______
<PAGE>
DETACH HERE
MEREDITH CORPORATION
PROXY
COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF MEREDITH CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 10, 1997
FREDERICK B. HENRY, E.T. MEREDITH III and JACK D. REHM, and each of them are
hereby appointed proxies of the stockholder(s) signing this card on the reverse
side, with power of substitution acting by a majority of proxies present and
voting, or if only one proxy is present and voting, then acting by that one, to
vote the shares of Meredith Corporation common stock which said stockholder(s)
is (are) entitled to vote, at the ANNUAL MEETING OF STOCKHOLDERS to be held at
the company's principal executive offices, 1716 Locust Street, Des Moines, Iowa
50309-3023, on Monday, November 10, 1997, at 10:00 A.M., local time, and at any
adjournment thereof, with all the powers the signing stockholders would possess
if present. The Directors recommend a vote FOR such matters. The proxies are
instructed to vote as follows:
The shares represented by this proxy will be voted in the manner directed herein
by the undersigned stockholder(s). If no direction is made, this proxy will be
voted FOR all proposals shown on the reverse side of this card and as set forth
in the Notice of Annual Meeting dated October 1, 1997. The undersigned
acknowledges receipt of the Notice of Annual Meeting of Stockholders and the
related Proxy Statement.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE
SIDE]
<PAGE>
Detach card below, sign, date and mail in postage-paid envelope provided.
[LOGO] MEREDITH CORPORATION
PLEASE ACT PROMPTLY, SIGN, DATE & MAIL YOUR PROXY CARD TODAY.
DETACH HERE
[X] Please mark votes as in this example.
1. Election of four Class II Directors to serve until the annual meeting in
2000, as provided in the bylaws of the Company:
Nominees: Herbert M. Baum, Frederick B. Henry, William T. Kerr, and
Nicholas L. Reding
[ ] FOR [ ] WITHHELD
2. Election of one Class III Director to serve until the annual meeting in
1998, as provided in the bylaws of the Company:
Nominee: Mary Sue Coleman
[ ] FOR [ ] WITHHELD
3. In its discretion, upon such other matters as may properly come before the
meeting.
[ ] For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. When
shares are held by joint tenants, both should
sign. When signing as attorney, executor,
administrator, trustee or guardian, please give
full title as such. If a corporation, please sign
in full corporate name by President or other
authorized official. If a partnership, please
sign in partnership name by an authorized person.
Signature:_________________ Date:_______ Signature:________________ Date:_______
