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
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
For the transition period from to
Commission file number 0-6265
MULTIMEDIA, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-0173540
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
305 South Main Street, Greenville, South Carolina 29601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (803) 298-4373
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
The number of shares outstanding for each of the issuer's classes of common
stock, as of March 31, 1994:
Common Stock, $.10 par value
37,274,978 shares outstanding
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS.
The following consolidated financial statements are incorporated by
reference from the Report to Shareholders for the quarter ended
March 31, 1994.
Consolidated Statements of Earnings, three months ended March
31, 1994 and 1993.
Consolidated Balance Sheets as of March 31, 1994 and December
31, 1993.
Consolidated Statements of Cash Flows, three months ended
March 31, 1994 and 1993.
The information furnished reflects all adjustments consisting of
normally recurring accruals which are, in the opinion of management,
necessary to a fair statement of the results for the interim period.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Discussion regarding the Company's financial condition and results
of operations for the quarter ended March 31, 1994 is included in
the Report to Shareholders attached hereto as an exhibit and
incorporated herein by reference.
The net earnings of $17.3 million and earnings per share of $.45
include an after tax gain on the sale of three radio properties of
approximately $2.1 million or $.05 per share. Last year's net
earnings of $29.5 million or $.77 per share included a net benefit
of $14.3 million or $.37 per share for the cumulative effect of
changes in accounting principles and an after tax gain of $1.4
million or $.04 per share on the sale of properties in the first
quarter of 1993. Excluding the results of the sale of properties
in 1994 and 1993 and the changes in accounting principles in 1993,
the 1994 first quarter earnings per share increased 11% over 1993
first quarter earnings per share.
The Multimedia newspapers' revenue increase was due to advertising
revenue increases primarily due to volume growth in classified and
national advertising.
The Broadcasting division revenues were 5% ahead of last year's
results. Excluding the results of radio properties sold in 1994 and
the Company's video production unit sold in the first quarter of
1993, the division's revenues increased approximately 9% and
operating expenses were flat with last year.
Multimedia cable revenues were flat with last year primarily due to
the rate freeze mandated by the Federal Communications Commission
(FCC) which has been in effect since September. The operating
profit decrease for the division was due to increased depreciation
expense resulting from system rebuilds.
In February, the Company announced a $150 million technological
upgrade of its cable operations over the next five years. The first
stage of the upgrade involves a capital investment of $45 million
in each of the next two years to replace coaxial wire in our cable
systems with fiber.
The entertainment division will increase its investments in
production and promotion during 1994 in response to increased talk-
show competition and to help launch new programs. Because of these
increased investments, the Company expects the entertainment
division's 1994 operating profit to be approximately the same as the
1993 operating profit.
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As previously announced, the Company expects to launch an all-talk
24-hour cable channel in September 1994.
The Security revenue and operating profit increases are primarily
due to increases in the number of customers from approximately
38,000 at the end of the first quarter of 1993 to approximately
57,000 customers at March 31, 1994.
There have been no material adverse changes in the Registrant's
financial condition during the quarter ended March 31, 1994 and
reference is made to management's discussion and analysis relating
to liquidity and capital resources which appeared on pages 16-23 of
the Company's 1993 Annual Report.
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The following summarizes the votes at the Annual meeting of the
Company's shareholders held on April 20, 1994:
Matter For Withheld
Election of Directors:
Walter E. Bartlett 30,626,063 273,146
George H. V. Cecil 30,627,508 271,701
Rhea T. Eskew 30,625,458 273,751
David L. Freeman 30,625,870 273,339
M. Dexter Hagy 30,627,988 271,221
Robert E. Hamby, Jr. 30,626,758 272,451
John T. LaMacchia 30,626,798 272,411
Leslie G. McCraw 30,628,188 271,021
Dorothy P. Ramsaur 30,627,458 271,751
Donald D. Sbarra 30,619,387 279,822
Elizabeth P. Stall 30,626,648 272,561
William C. Stutt 30,625,618 273,591
For Against Abstentions
Ratification of appointment of KPMG
Peat Marwick as independent auditors 30,651,151 20,059 227,999
for 1994
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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits:
4. By-laws of the Company, as amended to date.
11. Computation of Primary and Fully Diluted Earnings per
Share.
15. Independent accountants' report re unaudited interim
financial information.
19. Report to Shareholders for the quarter ended March 31,
1994.
(b) Reports on Form 8-K.
Items reported on Form 8-K dated February 16, 1994.
Item 5. Other Events.
Item 7. Financial Statements and Exhibits.
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SIGNATURES
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.
Multimedia, Inc.
(Registrant)
May 12, 1994 Signature of Robert E. Hamby, Jr. appears here
------------ ----------------------------------------------
(Date) Robert E. Hamby, Jr.
Senior Vice President
Finance & Administration
Chief Financial Officer
May 12, 1994 Signature of Thomas L. Magaha appears here
------------ ----------------------------------------------
(Date) Thomas L. Magaha
Vice President
Finance and Development/Controller
MULTIMEDIA, INC. 2-28-86
BY-LAWS
Effective April 10, 1980
With Amendments Through November 1, 1985
ARTICLE I
NAME, PLACES OF BUSINESS AND REGISTERED OFFICE AND AGENT
Section 1. The name of the corporation shall be MULTIMEDIA,
INC.
Section 2. The principal place of business of the corporation
shall be 305 South Main Street, Greenville, South Carolina, 29601.
Section 3. The corporation may also have offices at such
other places, both within and without the State of South Carolina,
as the Board of Directors may from time to time determine or as the
business of the corporation may require.
Section 4. The registered office and registered agent shall
be as designated by the Board of Directors from time to time.
ARTICLE II
MEETINGS OF THE SHAREHOLDERS
Section 1. The annual meeting of the shareholders to be held
in 1985 for the election of Directors and the transaction of such
other business as may properly come before the meeting shall be held
at the principal place of business of the corporation at such date
as may be determined by the Board of Directors prior to December 31,
1985; and, subsequent to 1985, the annual meeting of the
shareholders for the election of Directors and the transaction of
such other business as may properly come before the meeting shall
be held at the principal place of business of the corporation at
11:00 a.m. on the 4th Tuesday of the 6th month after the end of the
fiscal year of the corporation or at such earlier time and place as
may be determined by the Board of Directors.
Section 2. Special meetings of the shareholders of the
corporation may be held either at the place mentioned in the
foregoing section or at any other place within or without the State
of South Carolina designated by the Board of Directors. Such
special meetings may be called by the President, the Chairman of the
Board of Directors, a majority of the Board of Directors, or by
stockholders holding in the aggregate of not less than ten percent
(10%) of the outstanding shares of stock entitled to vote at the
meeting.
Section 3. Except as otherwise provided by law, written or
printed notice shall, by or at the direction of the President, the
Secretary or the officer or persons calling the meeting, be given
each shareholder of record entitled to vote at such meeting, either
personally or mailed to his, her or its last recorded address, not
less than ten (10) nor more than fifty (50) days before the date of
said meeting, the notice to state the place, date and hour the
meeting is to be held, and in the case of a special meeting, the
purpose or purposes for which the meeting is called.
Section 4. Notice of a meeting of shareholders need not be
given any shareholder who signs a waiver of notice, in person or by
proxy, either before or after the meeting. The waiver need not
specify the purpose of or the business to be transacted at such
meeting. Attendance of a shareholder at a meeting, in person or by
proxy, shall of itself constitute waiver of notice, except when the
shareholder attends a meeting solely for the purpose of stating his
objection, at the beginning of the meeting, to the transaction of
any business on the ground that the meeting is not lawfully called
or convened.
Section 5. At all meetings of the shareholders, regular or
special, a majority of the shares entitled to vote thereat, whether
in person or by proxy, shall constitute a quorum. A majority of the
votes by the shareholders constituting such quorum may decide any
question coming before the meeting, except where otherwise provided
by law. Shareholders present at a duly called or held meeting at
which a quorum is present may continue to do business at the meeting
or at any adjournment thereof notwithstanding the withdrawal of enough
shareholders to leave less than a quorum. In the absence of a
quorum, any meeting of the shareholders may be adjourned from time
to time, by a vote of a majority of the shares present.
Section 6. When a meeting is adjourned, for whatever reason,
for thirty days or more, notice of the adjourned meeting shall be
given as provided in Section 3. Notice of a meeting adjourned for
less than thirty days need not be given if the time and place of the
adjourned meeting are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting the corporation
may transact any business which might have been transacted at the
meeting at which the adjournment was taken.
Section 7. At all shareholders meetings, regular or special,
each holder of voting stock shall be entitled to one vote for each
share of stock held or owned by him. Each holder of shares entitled
to vote at an election of Directors shall have the right to cumulate
his votes either (1) by giving to one candidate as many votes as
shall equal the number of Directors who are to be elected and for
whose election he has a right to vote, multiplied by the number of
shares owned by such holder, or (2) by distributing his votes on the
same principle among any number of candidates.
A shareholder who intends to vote his shares as provided
in the preceding paragraph shall either (1) give written notice of
such intentions to the President or other officer of the corporation
not less than forty-eight hours before the time fixed for the
meeting, or (2) announce his intention in such meeting before the
voting for Directors shall commence; and all shareholders entitled
to vote at such meeting shall without further notice be entitled to
cumulate their votes. If a shareholder intending to cumulate his
votes gives notice at the meeting, the person presiding may, or if
requested by any shareholder shall, recess the meeting not to exceed
two hours and not less than fifteen minutes. Unless a shareholder
so demands, the election of Directors need not be by ballot.
Section 8. (a) Every shareholder entitled to vote at any
meeting may appoint one or more agents to vote on his, her or its
behalf. Such appointment shall be by a printed or written proxy
executed by the shareholder or by his duly appointed attorney-in-
fact, or by a telegram or cablegram appearing to have been
transmitted by the shareholders.
(b) No proxy shall be valid after the expiration
of eleven months from the date of its execution. Every proxy shall
be dated as of its execution, and no proxy shall be undated or
postdated. Every proxy, except as otherwise provided in this
section, shall be revocable at the pleasure of the shareholder
executing it, and a proxy may be revoked by an instrument which in
terms revokes the proxy, or by a duly executed proxy bearing a later
date. The authority of a proxyholder shall not be revoked by death
or supervening incapacity of the shareholder executing the proxy
unless, before such authority is exercised, written notice of such
death or incapacity is filed with the corporate officer responsible
for maintaining the list of shareholders.
The presence of a shareholders' meeting of the shareholder
appointing a proxy shall not of itself revoke the proxy, but such
shareholder may revoke the appointment by giving notice to the
corporate officer responsible for maintaining the list of
shareholders, or by giving notice in open meeting of the
shareholders. Every proxy shall be in writing and signed by the
shareholder or his duly authorized attorney-in-fact and, when filed
with the secretary, shall, unless otherwise specified in the proxy,
continue in force from year to year until revoked by a writing duly
delivered to the secretary or until superseded by subsequent
proxies.
(c) Unless a proxy otherwise specifically
provides, any proxyholder shall have the power to appoint in writing
a substitute to act in his place.
(d) No proxy shall be solicited on the basis of
any proxy statement, form of proxy, notice of meeting, or other
communication, written or oral, containing any statement which was,
at the time and in the light of the circumstances under which it was
made, false or misleading with respect to any material fact or which
omits to state any material fact necessary in order to make the
statements therein not false or misleading.
(e) A proxy which is entitled "irrevocable proxy"
and which specifically states that it is irrevocable, shall be
irrevocable only when it is held by any of the following or by a
nominee of any of the following:
(1) a pledgee of the shares which are the subject
of the proxy;
(2) a person who has contracted to purchase the
shares which are the subject of the proxy;
(3) a creditor or creditors of the corporation
who extend or continue credit to the corporation in consideration
of the proxy, if such proxy specifically states that it was given
in consideration of such extension or continuation of credit, and
sets forth the amount of, and the name of the person extending or
continuing, credit;
(4) an officer of the corporation under an
employment contract which required a proxy, if the proxy states that
it was given in consideration of the contract, the name of the
employee, and the period of employment contracted for;
(5) a person, including an arbitrator, designated
by or under a shareholder's agreement as provided by law. Any such
proxy shall become revocable after the pledge is redeemed, or the
contract of purchase has been performed and the purchaser has become
a shareholder of record, or the debt of the corporation is paid, or
the period of employment stipulated in the contract of employment
has been terminated, or the agreement has terminated according to
law.
(f) No proxy, whether or not designated as
irrevocable as permitted by subsection (e), shall be valid after ten
years from the date of its execution, unless before the expiration
date such proxy is renewed or extended for not more than ten years
from the date of such renewal or extension.
(g) A proxy may be revoked, notwithstanding a
provision making it irrevocable, by a purchaser of shares without
knowledge of the existence of such provision, unless notice of the
proxy and of its irrevocability plainly appears on the face or back
of the certificate representing such shares.
(h) The foregoing provisions shall be applicable
to proxies given by the holders of the corporation's bonds,
debentures or other obligations where a right to vote is conferred
upon such holders by the articles of incorporation as permitted by
law.
Section 9. (a) Action taken at any meeting of shareholders,
however called and with whatever notice, or with no notice, shall
be deemed action of the shareholders taken at a meeting duly called
and held on proper notice, if:
All shareholders entitled to vote at the meeting are
present in person or by proxy, and no shareholder objects to holding
the meeting; or
If a quorum is present either in person or by proxy, no
one present objects to holding the meeting, and each absent person
entitled to vote at the meeting signs, either before or after the
meeting, a written waiver of notice, or consent to the holding of
the meeting, or approval of the action taken and shown by the
minutes thereof. All such waivers, consents or approval shall be
filed with the corporate records or made a part of the minutes of
the meeting.
Action required or permitted to be taken by shareholders
may be taken without a meeting if a written consent, setting forth
the action so taken, is signed by the holders of all outstanding
shares entitled to vote on such action and is filed with the
Secretary of the corporation as part of the corporate records. Such
written consent shall have the same effect as a unanimous vote of
the shareholders and may be stated as such in any certificate or
document, including those required to be filed with the Secretary
of State.
(b) A shareholder shall not sell his vote to any
person, nor shall he issue a proxy to vote for any sum of money or
anything of value, except so far as subsection (e) of this section
authorizes irrevocable proxies.
Section 10. The Board of Directors in advance of any meeting
of the shareholders shall appoint two or more inspectors to act at
the meeting or any adjournment thereof. Each inspector so appointed
before entering upon the discharge of his duties shall be sworn to
execute the duties of inspector at such meeting and the oath so
taken shall be subscribed by each inspector. They shall supervise,
receive and tally the vote and announce the resulting choice to the
shareholders assembled.
Section 11. Upon request of any shareholder, the vote on any
question arising at any meeting shall be by ballot. Directors shall
be elected by plurality vote and whenever any other action is to be
taken by vote of the shareholders it shall, except as otherwise
required by law, be authorized by a majority of the votes cast at
the meeting by the holders of shares entitled to vote.
ARTICLE III
DIRECTORS
Section 1. Conduct of Corporate Business
The business, property and affairs of the corporation shall be
managed and controlled by its Board of Directors.
Section 2. Number, Term and Qualifications
(a) The number of Directors comprising the Board of Directors
shall be not less than five nor more than 19. The number of
Directors elected at the shareholders' meeting at which these By-
Laws are adopted shall constitute the authorized number of Directors
unless and until changed by (1) amendment of the Articles of
Incorporation, (2) a by-law duly adopted by the shareholders, or (3)
action of the Board of Directors pursuant to a by-law duly adopted
by the shareholders.
The foregoing action may be taken at an annual meeting of
the shareholders or at a special meeting called for the purpose of
electing Directors, provided that notice of such proposed action has
been given to the shareholders.
The number of Directors to be elected at any annual or
special meeting of the shareholders shall be determined by the
Board. In the absence of such determination, the number to be
elected shall be the same as the number to be elected at the last
annual meeting. Any directorship not filled by the shareholders at
an annual or special meeting shall be deemed to be a vacancy to be
filled in accordance with Section 5 of this Article III.
No decrease in the number of Directors shall have the
effect of shortening the term of any incumbent Director.
(b) At the annual meeting of the shareholders, or at any
special meeting called for that purpose, the shareholders shall
elect Directors to hold office from the time of his election and
qualification until his resignation, removal, disqualification,
death or incapacity, or until his successor shall have been elected
and qualified, whichever event shall first occur.
(c) Directors need not be residents of South Carolina, nor
with the exception of the Chairman of the Board and President, need
they be shareholders of the corporation.
(d) With the exception of the members of the Board over 65
years of age who are serving on the effective date of these By-Laws
(April 10, 1980), no person shall be elected, appointed or serve as
a Director until he reaches the age of 25 years or after the annual
meeting of the shareholders next succeeding his 70th birthday.
Section 3. Election
Except as provided in Section 5 (Vacancy), the Directors shall
be elected at the annual meeting of the shareholders or at a special
meeting of shareholders called for that purpose.
Voting for Directors shall be held in accordance with Section
7 of Article II.
Section 4. Resignation
A Director may resign at any time and acceptance of his
resignation shall not be necessary to make it effective. Such
resignation shall take effect at the time stated. If a resignation
is to take effect at a future date, the Board of Directors or the
shareholders may elect a successor to take office when the
resignation becomes effective.
Section 5. Vacancy
A vacancy in the Board, however occurring, may be filled by the
affirmative vote of the majority of the Directors remaining in
office, even though less than a quorum, or by a sole remaining
Director. Any vacancy created by an increase in the number of
Directors, unless said vacancy is filled by vote of the
shareholders, may be filled by majority vote of the Board until the
next annual meeting of the shareholders or any special meeting
called earlier for the purpose of the election of Directors.
If a vacancy occurs with respect to a Director elected by the
votes of a particular class of shares, the vacancy shall be filled
by the remaining Director or Directors elected by that class or by
the shareholders of that class. Any Director elected to fill any
vacancy shall be elected for the unexpired term of his predecessor.
A Director who resigns may postpone the effectiveness of his
resignation to a future date or upon the occurrence of a future
event specified in a written tender or resignation. A vacancy shall
be deemed to exist at the time of such tender, and the Board of
Directors or the shareholders may, then or thereafter, elect a
successor to take office when the resignation, by its terms, becomes
effective.
ARTICLE IV
MEETINGS OF THE DIRECTORS
Section 1. Annual Meeting
(a) An annual meeting of the Board shall be held immediately
after and at the same place as the annual meeting of the
shareholders, for the purpose of organization, election of officers,
appointment of committees and the transaction of other business.
Notice of the annual meeting of the Board need not be
given.
(b) If the annual meeting of the Board is not held as required
by Section 1 (a) of this Article, then it may be held at such other
time or place as may be specified in a notice of meeting given as
provided by Section 4 (a) (Notice of Meetings), for notices of
regular meetings of the Board.
Section 2. Regular Meetings
Not less than three regular meetings of the Board shall be held
at quarterly intervals following the annual meeting as shall be
specified in the notice of meeting required by Section 4 of this
Article (Notice of Meeting) or in a waiver of the meeting signed by
all the Directors then in office.
Section 3. Special Meetings
(a) A special meeting of the Board shall be held whenever
called by or at the request of the Chairman of the Board or the
President or if the President is absent or unable or refuses to act,
by any Vice-President, or by three Directors.
(b) Special meetings shall be held at such time and place as
shall be specified in the notice of meeting required by Section 4
of this Article (Notice of Meetings).
Section 4. Notice of Meetings
(a) Notice of each meeting of the Board shall be given by any
one of the following methods of communication:
(1) by written notice delivered at least five days
before the date of the meeting. In such case notice shall be
delivered by leaving it with the director at his residence or usual
place of business, or by mailing a copy thereof to him at his last
know postoffice address or at such other address as he may have
designated. If mailed, it shall be deemed delivered when deposited
in the United States mails, with prepaid postage for the most rapid
and expeditious means of delivery; or
(2) by telegram dispatched or telephone call made at
least 48 hours before the date of the meeting. A telegram shall be
dispatched to the director's residence or usual place of business,
or at his last known postoffice address or at such other address as
he may have designated. Notice by telephone call may be given to
the director or to any apparently responsible adult person at his
residence or usual place of business or such place as he may have
designated; or
(3) by any other usual and customary means of
communication at least 48 hours before the date of the meeting.
(b) Directors need not all be notified by the same method of
communication but if any method of communication complies with
subsection (a), then the Secretary may, in his discretion and in
view of the individual circumstances of each Director, determine the
method which will most expeditiously insure timely and adequate
notice to each Director.
(c) Notice, however given, by whatever method of
communication, shall specify the time and place and, in the case of
a special meeting, also the purpose of the meeting. Specification
of the purpose of a special meeting shall not preclude the Board
from considering other business at that meeting.
(d) Notice of any meeting need not be given to any Director
who waives notice as provided in Section 5 (Waiver of Notice).
Section 5. Waiver of Notice
(a) A Director may waive notice of any meeting. A written
waiver of notice signed by the Director entitled to notice, whether
before or after the time stated therein, shall be equivalent to the
giving of notice. A waiver of notice need not specify the purpose
of the meeting, notice of which is waived.
(b) The attendance of a Director at a meeting for which notice
is required shall operate as a waiver by him of notice of the
meeting, except when the Director attends the meeting for the sole
stated purpose of objecting to the transaction of any business on
the ground that the meeting is not lawfully called or convened or
that proper notice has not been given.
Section 6. Ratification
If an otherwise valid meeting of the Board of Directors or of
any committee is held without call or notice where such is required,
any action taken at such meeting shall be deemed ratified by a
Director or committee member who did not attend, unless after
learning of the action taken and of the impropriety of the meeting,
he makes prompt objection thereto, and files the same in writing
with the Secretary of the corporation.
Section 7. Organization
(a) If the Chairman of the Board does not preside, the
President of the corporation shall preside at the meeting of the
Directors. If neither presides, a Director selected by the Board
members present at the meeting shall preside.
(b) The Secretary of the corporation shall act as secretary
of all meetings of the Board but in his absence the presiding
officer may appoint a secretary.
Section 8. Quorum
(a) At any meeting of the Board of Directors a majority of the
total number of Directors then in office shall constitute a quorum
for the transaction of the business of the corporation. The vote
of a majority of the Directors present at a meeting at which a
quorum is present shall constitute the action of the Board of
Directors.
(b) The Directors present at a duly organized meeting of the
Board may continue to transact business until adjournment,
notwithstanding withdrawal of enough Directors to leave less than
a quorum at the meeting.
(c) If a quorum is absent at any properly called meeting of
the Board, the meeting may be adjourned from time to time by a vote
of a majority of the Directors present and voting on the motion to
adjourn until a quorum is present. Thereafter, the directors may
transact any business which might lawfully have been transacted at
the original meeting of the Board.
(d) Notice of an adjourned meeting need not be given if the
time and place are fixed at the meeting adjourned and if the period
of adjournment does not exceed ten days in any one adjournment.
Section 9. Attendance and Voting
(a) Except as these By-Laws may otherwise provide, and subject
to Section 8 (Quorum), the act of the majority of the Directors
voting on any matter shall be the act of the Board.
(b) Subject to any lawful and justifiable grounds for not
attending a meeting, it shall be the duty of each Director to be
present at each meeting of the Board.
(c) It shall be the duty of each Director to vote on each
matter presented at a meeting attended by him, unless he is
disqualified by a conflict between his duties and a Director and his
personal interest. It shall be the duty of the Director in such
case promptly to disclose to the Board the relevant facts concerning
such conflict of interest.
(d) Directors may not vote by proxy at a meeting of the Board,
and each Director shall have one vote on each question.
Section 10. Action Without a Meeting
Action may be taken by the Board or a committee of Directors
without formal meeting if all the Directors or committee members,
as the case may be, sign a written document setting forth the action
taken.
Section 11. Ratification
Action taken without a meeting by a majority of Directors, or
of a committee of Directors, shall be deemed action of the Board of
Directors or of a committee if all Directors or committee members,
as the case may be, execute either before or after the action is
taken, a written consent thereto, and the consent is filed with the
records of the corporation.
Section 12. Presumption of Assent
A Director who is present at a meeting of the Board at which
any action is taken shall be presumed to have assented to the action
unless (a) his contrary vote is recorded or (b) his dissent is
otherwise entered in the minutes of the meeting or (c) he shall file
his written dissent to such action with the person acting as the
secretary of the meeting before adjournment thereof or (d) shall
forward such dissent by registered mail to the Secretary of the
corporation immediately after adjournment of the meeting. Such
right to dissent shall not be available to a Director who voted in
favor of the action taken.
Section 13. Removal of Directors
(a) The entire Board of Directors or any individual Director
may be removed, with or without cause, by a vote of the holders of
a majority of the shares then entitled to vote at an election of
Directors.
(b) The removal of Directors, with or without cause, shall be
always subject to the following:
(1) Whenever a class of shares is entitled to elect one
or more Directors under authority granted by the Articles of
Incorporation, any Director so elected may be removed only by vote
of the holders of the outstanding shares of that class voting as a
class.
(2) No Director who has been elected by cumulative
voting may be removed if the votes cast against his removal would
be sufficient to elect him if then cumulatively voted at an election
of the entire Board of Directors, or, if there be classes of
Directors, at an election of the class of Directors of which he is
a part.
(c) If any or all Directors are removed, new Directors may be
elected at the same meeting.
(d) The Court of the County where the registered office is
located may, at the suit of shareholders holding at least ten (10%)
percent of the number of outstanding shares with or without voting
rights, remove from office any Director in case of fraudulent or
dishonest acts or gross abuse of authority or discretion in the
discharge of his duties to the corporation and may bar from
reelection any Director so removed for a period prescribed by the
Court. The Corporation shall be made a party to any such action.
ARTICLE V
POWERS OF DIRECTORS
Section 1. In addition to the powers granted them by Statute
or the Articles of Incorporation, or conferred upon them elsewhere
in these By-Laws, the Board of Directors may exercise all such
powers and do all such acts and things which a corporation may
legally do, but subject to the provisions of the Statutes, the
Articles of Incorporation and of these By-Laws.
Section 2. Without limitation of the general powers conferred
by the next preceding paragraph and other powers conferred upon them
by these By-Laws and by Statute, it is hereby expressly declared
that the Board of Directors shall have the following powers:
(a) To purchase or otherwise acquire for the company any
property, rights or privileges which the corporation is authorized
to acquire at such prices and on such terms and conditions and for
such consideration as they think fit.
(b) At their discretion to pay for any property or rights
acquired by the corporation, either wholly or partially, in money
or stocks, bonds, debentures or other securities of the corporation.
(c) To appoint, and at their discretion remove, or suspend
such managers, officers, assistants, clerks, agents and servants,
permanently or temporarily, as they may from time to time think fit,
and to determine their duties and fix, and from time to time change,
their salaries or emoluments, and to require security in such
instances and in such amount as they deem expedient.
(d) To confer by resolution upon any officer of the
corporation the right to choose, remove or suspend such subordinate
officers, agents or factors.
(e) To appoint any person or persons to accept and hold in
trust for the corporation any property belonging to the corporation
or in which it is interested or for any other purposes and to
execute and do all such duties and things as may be required in
relation to any such trust.
(f) To create, make and issue deeds, mortgages, bonds, deeds
of trust, contracts, trust agreements and negotiable or transferable
instruments and securities, secured by mortgage or otherwise, and
to do every other act or thing necessary to effectuate the same.
(g) To determine who shall be authorized to sign on the
corporation's behalf deeds, mortgages, bills, notes, receipts,
acceptances, endorsements, checks, releases, contracts and
documents.
(h) From time to time to provide for the management of the
affairs of the corporation at home or abroad in such manner as they
think fit, and in particular, from time to time to delegate for a
specific transaction any of the powers of the Board of Directors to
any committee, officer or agent and to appoint any persons to be
agents of the corporation with such powers, (including the powers
to subdelegate) and upon such terms as may be deemed expedient.
(i) To fix the compensation of themselves.
ARTICLE VI
COMMITTEES OF THE BOARD
Section 1. Executive Committee
(a) The Board of Directors shall designate, from among its
members, by resolution adopted by a majority of the total number of
Directors, an Executive Committee. The members of said committee
shall serve as long as they are Directors of the corporation and
until their successors are designated or until they are relieved by
resolution adopted by a majority of the Directors.
(b) The Executive Committee shall have and may exercise all
the authority of the Board in the management of the business,
property and affairs of the corporation during the interim between
meetings of the Board. Actions may be taken by the Executive
Committee by formal meeting or by written action of the Committee
without a meeting signed by a majority of the members of the
Committee, or in case the Chairman deems it necessary or advisable
to meet an emergency situation, said action may be taken by
telephone or telegram to or from the respective members of the
Committee, provided a memorandum of said telephone communication is
made at the time and filed with the records of said Committee.
(c) The Executive Committee shall consist of no fewer than
three nor more than seven Directors. The Chairman of the Board and
President of the corporation shall be ex-officio members of said
Committee and the Chairman of the Board shall serve as Chairman and
the President as Vice Chairman of said Executive Committee.
(d) The Board may, by resolution adopted by the vote specified
in Section 1 (a) of this Article VI for a resolution designating the
members of the Executive Committee:
(1) fill any vacancy, however occurring, in the
Executive Committee;
(2) remove any member of the Executive Committee at any
time with or without cause; and
(3) designate a Vice Chairman of the Executive
Committee.
(e) A quorum of members of the Executive Committee shall
consist of a majority of the total number of members specified in
the resolution designating the members of the Executive Committee,
but no action shall be taken by the Executive Committee unless
authorized by a majority of the total number of members specified
in the resolution designating the members of the Executive
Committee.
(f) The Executive Committee shall keep written minutes of its
proceedings and furnish such minutes to the Board upon request. The
Executive Committee may make such rules not inconsistent with the
Articles of Incorporation or these By-Laws for the conduct of its
business as it may deem expedient. So far as applicable, the
provisions of these By-Laws relating to the conduct of the meetings
of the Board of Directors shall govern the meetings of the Executive
Committee or other committees.
Section 2. Other Committees
The Board, by resolution adopted by a majority of the total
number of Directors, may at any time and from time to time create
other committees of Directors (other than the Executive Committee),
including but not limited to an Audit Committee and a Compensation
Committee for such purposes as it may deem expedient for managing
the business, property and affairs of the corporation and may also
fix the number of the members of said committees.
Section 3. Limit on Authority of Committees
In no event shall any committee designated by the Board of
Directors have or exercise the authority of the Board of Directors
with respect to the following matters:
(1) The dissolution, merger or consolidation of the
corporation; or the sale, lease or exchange of all or substantially
all of the property of the corporation;
(2) the recommendation to the shareholders of any amendment
to the Articles of Incorporation;
(3) the removal of Directors or the filling of vacancies in
the Board;
(4) the designation of any committee of Directors or the
filling of vacancies in any such committee;
(5) the fixing of compensation of the Directors for serving
on the Board or any committee of Directors;
(6) the amendment or repeal of the By-Laws, or the adopting
of new By-Laws; and
(7) the amendment or repeal of any resolution of the Board
which by its terms shall not be so amendable or repealable.
Section 4. Responsibility of Board
The designation of any committee and the delegation to it of
authority shall not relieve the Board of Directors or any member
thereof of any responsibility imposed on them by law.
ARTICLE VII
DIVISIONS OF THE CORPORATION
Section 1. The Board of Directors by resolution adopted by
majority of the full Board of Directors may create one or more
operating divisions of the corporation and may create a Division
Board for the operation and management of each division so created.
Section 2. The Division Board of each division may elect a
Chairman, a President, one or more Vice Presidents, a Treasurer and
a Secretary and, at the option of such Division Board, an Assistant
Secretary and Assistant Treasurer. Any or all of such division
officers may be elected by the Board of Directors of the corporation
without creation of a Division Board.
Section 3. Such Division Board may create a Division
Executive Committee consisting of three or more of its members and
may delegate to such Committee all of the authority of said Division
Board.
Section 4. The Division Board, if created, shall manage the
business of the division, may hire and fire personnel, may set
salaries, and in general shall have all of the powers and
authorities conferred upon the Board of Directors of the corporation
subject to the advice, consent and approval of the Board of
Directors of the corporation.
ARTICLE VIII
OFFICERS OF THE CORPORATION
Section 1. (a) The officers of the corporation shall be
a Chairman of the Board, a President, one or more Vice-Presidents
(one or more of whom may be designated as Senior or Executive Vice
President), a Secretary, a Treasurer, a General Counsel, and such
other officers as the Board may from time to time elect, including
but not limited to Assistant Secretaries, Assistant Treasurers and
a Vice Chairman of the Board.
Any two or more offices may be held by the
same person but no officer may act in more than one capacity where
action by two or more officers is required, and in no event may the
same person simultaneously hold the offices of Chairman of the Board
and Secretary or the offices of President and Secretary.
(b) Subordinate Officers and Agents. The
Board of Directors may appoint such other officers and agents as it
shall deem necessary or expedient who shall hold their offices for
such terms and shall exercise such powers and perform such duties
as shall be determined from time to time by the Board of Directors
and shall hold office until he shall resign or by removal or
otherwise disqualified to serve.
Section 2. (a) Election, Term and Qualification. The
officers of the corporation shall be elected by the Board at its
annual meeting but additional officers may be elected and vacancies
filled at any other meeting of the Board.
(b) The Chairman of the Board, the President,
and the Executive Vice President, if an Executive Vice President is
elected, shall be members of the Board of Directors.
(c) Each officer elected by the Board shall
hold office for a term of one year or until his death, resignation,
retirement or disqualification or until his successor shall have
been elected and qualified, whichever occurs first.
(d) If an officer continues as an employee of
the corporation upon termination of his status as an officer, such
termination shall not be construed as a break in the continuity of
his service as an employee.
(e) Termination as an employee shall
constitute termination as an officer.
Section 3. Compensation
(a) The compensation of all officers of the
corporation shall be fixed by, or in the manner prescribed by, the
Board. The Board may delegate to a committee of directors, or to
the officers and directors of a division or subsidiary, the power
to fix or approve compensation of the officers of each division or
subsidiary.
(b) No officer or other agent or employee
shall be barred from receiving compensation by reason of the fact
that he is a Director, but no person who is also a Director shall
vote as a Director or member of a committee in determining the
amount of compensation payable to him as an officer.
Section 4. Resignation
Any officer may resign at any time and acceptance
of the resignation shall not be necessary to make it effective.
Such resignation shall take effect at the time stated.
Section 5. Removal
Any officer elected by the Board may be removed
by the Board at any time with our without cause at a regular or
special meeting of the Board.
Section 6. Absence or inability to act
In case of absence or inability to act of any
officer of the corporation, and of any person herein authorized to
act in his place, the Board of Directors may from time to time
delegate the powers or duties of such officer to any other officer
or director or any person whom it may select.
Section 7. Vacancies
Vacancies in any office arising from any cause may
be filled by the Directors at any regular or special meeting and the
persons so chosen shall hold office for the unexpired term in
respect of which such vacancy occurred.
ARTICLE IX
DUTIES OF OFFICERS
Section 1. Chairman of the Board
The Chairman of the Board shall preside at all
meetings of the Shareholders and the Board of Directors and shall
be ex-officio a member of the Executive Committee and shall perform
such other duties as these By-Laws or the Board may prescribe. In
addition, he shall perform such other duties as are usually imposed
upon such officers of said corporation and such as are required by
law.
Section 2. President
Subject to the control of the Board, the President
shall have general and active supervision and control over the
business and affairs of the corporation and over its other officers,
agents and employees. Without limiting the generality of the
foregoing, the President shall:
(a) have authority to designate, appoint and
remove, as he shall deem necessary or desirable, any officer of a
division or department or any agent or employee of the corporation,
but he shall have no authority to appoint or remove any corporate
officer;
(b) see that all resolutions, orders and
directives of the Board are carried into effect;
(c) be an ex-officio member of all committees
of the Board.
(d) keep the Board and any committee of the
Board fully informed as to the affairs of the corporation and shall
freely consult them concerning the affairs of the corporation in his
charge.
(e) have authority to sign, execute and
deliver, with any other appropriate officer, corporate instruments
of conveyance, instruments of indebtedness and obligation (including
bonds) and contracts and other instruments and documents which may
be authorized by the Board, except in cases where the signing,
execution or delivery there of shall have been delegated by these
By-Laws or by the Board to some other officer or agent of the
corporation, or shall be required by law otherwise to be signed,
executed or delivered; and
(f) perform all duties incident to the office
of President and such other duties as the Board may prescribe from
time to time.
Section 3. Executive Vice President
The Executive Vice President shall assist the
Chairman of the Board and President in the general and active
management of the business and affairs of the corporation.
In the event of the absence, disability,
resignation or death of the Chairman of the Board and the President,
he shall exercise the authority and perform the functions of such
respective offices.
In addition, the Executive Vice President shall
exercise such powers and discharge such duties as may be assigned
to him by the Chairman of the Board or the President or properly
required of him by the Board of Directors.
Section 4. Vice Presidents
Each Vice President, in the order designated by
the Board shall exercise the functions of the Chairman of the Board
of the Directors and the President during their absence or inability
to act. Each Vice President shall perform such other duties as the
Chairman of the Board, the President or the Executive Vice President
may prescribe. In the absence of the Chairman of the Board, the
President or the Executive Vice President, or in the event of the
death, inability or refusal to act by any of such officers, the
powers, duties and functions of their respective offices shall be
temporarily performed and exercised by one or more of the Vice
Presidents as prescribed or directed by the Board; and when acting
in such capacity they shall be subject to the restrictions upon such
respective offices.
Section 5. Secretary
(a) The Secretary shall attend all meetings of
the Shareholders and of the Board of Directors.
(b) Serve as Secretary of all meetings of the
Shareholders and the Board of Directors and keep, or cause to be
kept, in one or more books provided for that purpose the minutes of
all meetings and proceedings of the Board, any committees of the
Board, and of the Shareholders.
(c) See that notices are duly given to
Shareholders and Directors in accordance with the Articles of
Incorporation and these By-Laws and as required by law.
(d) Have custody of the general records and
documents of the corporation other than those required to be kept
in the custody of the Treasurer and the Controller, respectively,
or pursuant to any directive of the Board or the President
consistent with these By-Laws.
(e) Maintain custody of the seal of the
corporation and see that it is affixed to all corporate documents
required to be executed under seal.
(f) Sign all such instruments as may require
his signature.
(g) Keep the Chairman, the President,
Executive Vice President and the Board fully informed as to all
matters relating to the business and affairs of the corporation for
which he is responsible.
(h) In general, perform all duties incident to
the office of Secretary and such other duties as the Board or
the President may prescribe from time to time.
Section 6. Treasurer
The Treasurer shall:
(a) Have charge and custody of, and be
responsible for, the funds of the corporation.
(b) Disburse and invest the funds of the
corporation, as ordered or authorized by the Board.
(c) Keep full and accurate records of
investments, receipts, deposits and disbursements.
(d) Keep the President and the Board fully
informed as to all matters relating to the business and affairs of
the corporation for which he is responsible.
(e) Render to the Board, when required, an
account of his transactions as treasurer.
(f) In general, perform all duties incident to
the office of Treasurer and such other duties as the Board or
President may prescribe from time to time.
Section 7. Controller
The Controller shall:
(a) Maintain and have control of the books of
account of the corporation.
(b) See that adequate audits are regularly
made of the books of account of the corporation.
(c) Acting with other officers and employees,
initiate and enforce measures and procedures to promote conduct of
the corporation's business and affairs with maximum financial
safety, efficiency and economy.
(d) Keep the President and the Board fully
informed as to all matters relating to the business and affairs of
the corporation for which he is responsible.
(e) Prepare true statements of (1) the
corporation's assets and liabilities as of the close of its fiscal
year, (2) the results of its operations for the fiscal year, and (3)
changes in its surplus for the fiscal year; and make such statements
available to the shareholders.
(f) Render to the Board when required an
account of his transactions as Controller.
(g) In general, perform all duties incident to
the office of Controller and such other duties as the Board or
President may prescribe from time to time.
Section 8. Assistant Officers
In the event that one or more assistant officers
of the corporation shall be elected by the Board, the respective
officers may delegate to one or more of their assistant officers the
performance of any of the duties of the officers, subject to any
restrictions imposed by the Board. Each assistant officer shall
also perform all such duties as the Board or the President may
prescribe from time to time.
Section 9. Chief Executive Officer
The Board of Directors shall designate from the
elected Chairman, President or Executive Vice President a Chief
Executive Officer of the corporation who shall serve in that
capacity as long as said individual holds that office or until some
other individual from among those officers named is so designated
by the Board.
ARTICLE X
SHARES OF STOCK
Section 1. Certificates
(a) Each owner of shares of stock of the
corporation shall be entitled to a certificate representing the
number of fully paid shares which he owns.
(b) Certificates for shares shall be in such
form as the Board shall approve, and may take the form of punchcard
or other instrument suitable for electronic or computer processing.
(c) Each certificate for shares shall be
signed by the President or a Vice President of the corporation and
by the Treasurer or Secretary of the corporation, and shall also be
countersigned both by a Transfer Agent and by a Registrar of the
corporation's shares. The signature of any officer of the
corporation or of any authorized representative of the Transfer
Agent or the Registrar may be by facsimile, engraved or printed, and
if both the Transfer Agent and the Registrar are persons other than
the corporation itself or an employee of the corporation. In the
event that any officer whose signature appears on a certificate
shall have ceased for any reason to hold that office before the
certificate is issued, the certificate may nonetheless be issued
with such effect as if he were an officer at the date of issue.
(d) Each certificate for shares shall bear the
Seal of the Corporation. The seal may be a facsimile or engraved
or printed on the certificate.
(e) Each certificate for shares shall state
that the corporation is organized under the laws of South Carolina;
the name of the person to whom the certificate is issued; the number
and class of shares represented by the certificate; and the par
value of the share represented by the certificate or a statement
that such shares are without par value.
Section 2. No Preemptive Rights
Preemptive rights for all shares of stock of the
corporation are eliminated. No holder of shares of the corporation
of any class, now or hereafter authorized, shall have any
preferential or preemptive right to subscribe for, purchase or
receive any shares of the corporation of any class, now or hereafter
authorized, or any options or warrants for such shares, or any
rights to subscribe to, or to purchase such shares, or any
securities convertible into or exchangeable for such shares, which
may at any time be issued, sold or offered for sale by the
corporation.
Section 3. Record Ownership
Appropriate records of all certificates for shares
issued by the corporation shall be maintained. Such records shall
state the name and address of the holder of each certificate for
shares, the number of shares represented thereby, the class and
series (if any) of the shares, the date on which the certificate was
issued, and the date on which the certificate was cancelled if such
be the case.
Section 4. Transfer
(a) The transfer of all shares of the
corporation shall be registered on the books of the corporation by
the holder of record of the shares or by his legal representative
or by his agent or attorney duly authorized in writing. Transfer
of shares shall be registered only upon surrender of the certificate
representing such shares, and the certificate shall be cancelled
before a new certificate is issued.
(b) Transfers of stock may be made subject to
agreements between Shareholders and/or between Shareholders and the
corporation in accordance with law.
(c) The Board may make or authorize the making
of additional rules and regulations consistent with law and these
By-Laws, which it may deem expedient for the issue, transfer and
registration of transfer of all securities of the corporation.
Section 5. Lost, Stolen or Destroyed Certificates
(a) The holder of any certificate for shares
of the corporation shall immediately notify the corporation that the
certificate has been apparently lost, stolen or destroyed, or has
been mutilated.
(b) Subject to any further requirements or
limitations of the laws of the State of South Carolina and any
amendments thereto: Upon receipt of an affidavit alleging that the
certificate has been lost, stolen, destroyed or mutilated, the
corporation may issue a new certificate for shares. The corporation
may require as a condition to issuing a new certificate that the
holder furnish to the corporation a bond in such sum and with such
surety as may be deemed necessary to indemnify the corporation
against any claim which may be made with respect to the certificate
allegedly lost, stolen, destroyed or mutilated or with respect to
the new certificate issued by the corporation. The corporation may
determine that circumstances justify omission of any indemnity bond.
Section 6. Record Date
(a) The Board shall fix, in advance, a record
date to determine the identity of shareholders entitled to notice
of or to vote at any meeting of shareholders or any adjournment.
The record date shall be not less than ten nor more than fifty days
before the date of the meeting. When the Board has fixed a record
date for a meeting, only those persons who were shareholders of
record as of the record date, and no others, shall be entitled to
notice of or to vote at the meeting, not withstanding any transfer
of shares or registration thereof after the record date.
(b) The Board shall also fix a record date to
determine the identity of shareholders entitled to receive payment
of any dividend or other distribution, or the allotment of rights
to subscribe to securities of the corporation, or entitled to
exercise any rights with respect to any change, conversion or
exchange of shares or for purpose of any other lawful action. The
record date shall not be more than fifty days prior to the date on
which the action is to be taken. When the Board has fixed a record
date, only those persons who were shareholders of record as of the
record date, and no others, shall be entitled to receive any such
dividend, distribution or allotment or to exercise any rights,
notwithstanding any transfer of shares or registration thereof after
the record date.
(c) If for any reason, a record date is not
fixed as provided by subsections (a) or (b), then the record date
for determination of the identify of shareholders entitled to notice
of or to vote at a meeting shall be the date on which notice of the
meeting is mailed and in the case of the payment of a dividend,
distribution or other like action, the date on which the Board
adopts the resolution declaring the dividend or distribution or
taking other action.
(d) The stock transfer books shall not be
closed and registration of transfer of shares shall not cease after
or because of the setting of a record date for any purpose.
Section 7. Ownership or Voting by Aliens
(a) As used in these By-Laws, the word "alien"
shall be construed to include the following and their
representatives: Any individual not a national of the United States
of America; a partnership unless a majority of the partners are
nationals of the United States of America and have a majority
interest in the partnership profits; a foreign government, a
corporation, joint-stock company or association organized under the
laws of a foreign country; and any other corporation, joint-stock
company or association controlled directly or indirectly by one or
more of the above.
(b) Not more than one-fifth of the aggregate
number of shares of stock of the corporation outstanding shall at
any time be owned of record or voted by or for the account of
aliens.
(c) If the corporation is at any time
controlled directly or indirectly by any other corporation of which
any officer or more than one-fourth of the directors are aliens, or
of which more than one-fourth of the capital stock is owned of
record or voted by or for the account of aliens, then such other
corporation shall, so long as such condition continues to exist,
have no voting, dividend or other rights with respect to the shares
of this corporation which it owns, except the right to transfer such
shares in such manner that such condition will cease to exist.
(d) The ownership of record of shares of stock
by or for the account of aliens, and the nationality of transferees
thereof, shall be determined in conformity with regulations
prescribed by the Board of Directors. There shall be maintained
separate stock records, a domestic record covering citizen
shareholders and a foreign record covering alien shareholders.
(e) Every certificate representing stock
issued or transferred to an alien shall be marked "Foreign Share
Certificate", but under no circumstances shall certificates
representing more than one-fifth of the aggregate number of shares
outstanding at any one time be so marked, nor shall the total amount
of stock represented by Foreign Share Certificates, plus the amount
of stock owned by or for the account of aliens and represented by
certificates not so marked, exceed one-fifth of the aggregate number
of shares outstanding.
(f) Every certificate issued not marked
"Foreign Share Certificate" shall be marked "Domestic Share
Certificate".
(g) All stock represented by Foreign Share
Certificate may be transferred to aliens or to citizens.
(h) If, and so long as, the stock records of
the corporation shall disclose one-fifth alien stock ownership, no
transfers of shares of domestic record to aliens shall be made. If,
and so long as, the stock records of the corporation shall disclose
one-fifth alien stock ownership and it shall be found by the
corporation that stock of domestic record is, in fact, held by or
for the account of an alien, the holder of such stock shall not be
entitled to vote, to receive dividends or to any other rights,
except the rights to transfer such stock to a citizen of the United
States of America.
(i) The Directors shall be authorized at any
time and from time to time to adopt such other provisions as the
Directors may deem necessary or desirable to avoid violation of the
provisions of Section 310 (a) of the Federal Communications Act as
now in effect or as it may hereafter from time to time be amended,
and to carry out the provisions of this Article and of Article (8)
of the Restated Articles of Incorporation.
ARTICLE XI
GENERAL PROVISIONS
Section 1. Dividends
(a) The Board may from time to time declare,
and the corporation may pay, out of its unreserved and unrestricted
earned surplus, dividends and other disbursements with respect to
its outstanding shares in cash, property or its own shares.
(b) The Board of Directors is authorized to
accumulate out of the net earnings of the corporation such capital
as they deem necessary in the operation of the corporation, and to
accumulate such reserves as they deem appropriate, including
reserves to meet contingencies, for equalizing dividends, for future
dividends, or for repairing, maintaining or acquiring property
useful to the business of the corporation.
Section 2. Seal
The seal of the corporation shall be the seal
imprinted at the foot of these By-Laws.
Section 3. Fiscal Year
The fiscal year of the corporation shall be
determined by the Board of Directors.
Section 4. Dispensing With Notice
No notice required by these By-Laws need be given
to any Shareholder or Director or other person with whom
communication is made unlawful (a) by any law of the United States,
or of any state, district, territory, or dependency of the United
States, or of any area occupied or otherwise subject to control or
jurisdiction of the United States, or (b) by or pursuant to any
rule, regulation, proclamation or executive order issued pursuant
to any such law.
Section 5. Shares in Other Corporations
The Board shall designate the person who shall
have authority on behalf of the corporation to attend, vote and
execute proxies for use at, any meeting of shareholders of any
corporation in which this corporation holds shares of stock, or to
execute any waivers and consents with respect to such shares. A
resolution implementing this By-Law may designate an officer by
title who shall have authority with respect to any or all shares of
stock which the corporation may own in other corporations. In the
absence of designation by the Board, the President shall have such
authority.
ARTICLE XII
INDEMNIFICATION
The corporation shall, to the full extent permitted by Section
12-18.18 of the Code of Laws of South Carolina, 1962, as amended,
from time to time, indemnify all persons whom it may indemnify
pursuant thereto. In this connection, the corporation is authorized
to take out such insurance as it may deem necessary or desirable
consistent with the indemnification provisions of said Section 12-
18.18.
ARTICLE XIII
AMENDMENTS
Subject to any further requirements or limitations of the laws
of the State of South Carolina, and any amendments thereto:
(a) These By-Laws may be amended or repealed or new By-Laws
may be adopted by the Shareholders at any meeting, provided that (1)
the notice of the meeting states that action on the By-Laws is one
of the purposes of the meeting, and (2) the action is adopted by the
affirmative vote of the Shareholders entitled to exercise a majority
of the voting power of the corporation.
(b) The By-Laws may be amended or repealed or new By-Laws
adopted by the Board at any meeting, provided that (1) the notice
of the meeting states that action on the By-Laws is one of the
purposes of the meeting, and (2) the action is taken by an
affirmative vote of a majority of the total number of Directors
which should have been elected, pursuant to Article III, Section 2
(a), at the next preceding annual meeting of Shareholders, whether
or not such number of Directors was in fact elected.
(c) The Board shall have no power to adopt a By-Law:
(1) requiring more than a majority of the voting shares
for a quorum at any meeting of Shareholders or more than a majority
of the votes cast to constitute action by the Shareholders, except
where higher percentages are required by law;
(2) classifying and staggering the election of
Directors; and
(3) providing for management of the business and affairs
of the corporation otherwise than by the Board or its Executive or
other committee.
(d) By-Laws adopted or amended by action of the Shareholders
may be repealed, altered or amended by the Board except when the By-
Law adopted by the Shareholders shall specifically provide that it
may be altered or amended only by the shareholders.
<PAGE>
MULTIMEDIA, INC.
ACTION BY MEMBERS OF THE BOARD OF DIRECTORS
UNANIMOUS WRITTEN CONSENT
By unanimous written consent of the members of the board
of directors, the bylaws of the corporation are amended to provide,
in lieu of the language presently contained in Article III Section
2 (d), the following:
With the Exception of the members of the board who are
elected officers of the corporation, no person shall be elected,
appointed or serve as a director until he reaches the age of twenty-
five years or after the annual meeting of the shareholders' next
succeeding the earlier of his seventieth birthday or the twenty-
fifth anniversary of his service as a member of the board of
directors.
Effective the 23rd day of April, 1992.
/s/ Walter E. Bartlett /s/ Leslie G. McCraw
- - ------------------------- -------------------------
Walter E. Bartlett Leslie G. McCraw
/s/ Robert E. Hamby, Jr. /s/ John T. LaMacchia
- - ------------------------- -------------------------
Robert E. Hamby, Jr. John T. LaMacchia
/s/ David L. Freeman /s/ Donald D. Sbarra
- - ------------------------- -------------------------
David L. Freeman Donald D. Sbarra
/s/ George H. V. Cecil /s/ Elizabeth P. Stall
- - ------------------------- -------------------------
George H. V. Cecil Elizabeth P. Stall
/s/ Rhea T. Eskew /s/ William C. Stutt
- - -------------------------- -------------------------
Rhea T. Eskew William C. Stutt
/s/ James E. Jolley /s/ Dorothy P. Ramsaur
- - ------------------------- --------------------------
James E. Jolley Dorothy P. Ramsaur
<PAGE>
MULTIMEDIA, INC.
Board of Directors' Resolution
RESOLVED that the bylaws of the corporation are amended to
provide, in lieu of the language presently contained in Article III
Section 2(d), the following:
With the exception of the members of the board who are elected
officers of the corporation, no person shall be elected,
appointed or serve as a director until he reaches the age of
twenty five years or after the annual meeting of the
shareholders' next succeeding the earlier of his seventy-
second birthday or the twenty-fifth anniversary of his service
as a member of the board of directors.
Adopted December 10, 1993.
Exhibit 11
MULTIMEDIA, INC.
Computation of Primary and Fully Diluted Earnings per Share
<TABLE>
<CAPTION>
Three Months Ended
3/31/94 3/31/93
Primary
<S> <C> <C>
Earnings before cumulative effect of changes
in accounting principles $17,334,000 15,198,000
Cumulative effect of changes in accounting principles --- 14,332,000
---------- ----------
Net earnings applicable to
common and common equivalent shares $17,334,000 29,530,000
---------- ----------
Shares:
Weighted average number of
common and common equivalent
shares outstanding 38,362,000 38,246,000
---------- ----------
Earnings before cumulative effect of changes in
accounting principles $ .45 .40
Cumulative effect of changes in accounting principles -- .37
Net earnings per share .45 .77
Fully Diluted
Earnings before cumulative effect of changes
in accounting principles $17,334,000 15,198,000
Cumulative effect of changes in accounting principles --- 14,332,000
---------- ----------
Net earnings applicable to
common and common equivalent shares $17,334,000 29,530,000
---------- ----------
Shares:
Weighted average number of
common and common equivalent
shares assuming ending
market price 38,361,000 38,293,000
---------- ----------
Earnings before cumulative effect of changes in
accounting principles $ .45 .40
Cumulative effect of changes in accounting principles -- .37
Net earnings per share .45 .77
</TABLE>
KPMG Peat Marwick logo and
address appears here
The Board of Directors
Multimedia, Inc.:
We have reviewed the condensed consolidated balance sheet of
Multimedia, Inc. and subsidiaries as of March 31, 1994 and the
related condensed consolidated statements of earnings and cash flows
for the three-month periods ended March 31, 1994 and 1993. These
financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying
analytical review procedures to financial data, and making inquiries
of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the condensed consolidated financial
statements referred to above for them to be in conformity with
generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Multimedia,
Inc. and subsidiaries as of December 31, 1993, and the related
consolidated statements of earnings, stockholders' equity (deficit),
and cash flows for the year then ended (not presented herein); and
in our report dated February 11, 1994, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1993, is fairly presented, in all
material respects, in relation to the consolidated balance sheet
from which it has been derived.
Signature of KPMG Peat Marwick
appears here
April 18, 1994
<PAGE>
M U L T I M E D I A, I N C.
F I R S T Q U A R T E R
R E P O R T
1 9 9 4
1
N e w s p a p e r s
B r o a d c a s t i n g
E n t e r t a i n m e n t
C a b l e T e l e v i s i o n
S e c u r i t y
<PAGE>
A LETTER TO OUR SHAREHOLDERS
Multimedia, Inc. reported strong operating results for the quarter
ended March 31, 1994, with net earnings of $17.3 million and
earnings per share of $.45. Excluding the after-tax gain on the sale of three
radio properties, first quarter earnings per share were $.40, an 11 percent
increase over 1993 first quarter earnings from ongoing operations of $.36 per
share. Last year's net earnings of $29.5 million or $.77 per share included a
net benefit of $14.3 million or $.37 per share for the effect of changes in
accounting principles, and an after-tax gain of $1.4 million or $.04 per share
on the sale of properties in the first quarter of 1993.
Consolidated operating revenues were $146.4 million for the quarter, an
increase of five percent compared with $139.5 million posted for the same period
last year. Operating profit grew by seven percent to $40.9 million, compared
with $38.1 million in 1993.
Multimedia Newspaper Company's first quarter revenues rose nine percent to
$33.7 million compared with $31.0 million last year. The division has benefited
from excellent volume growth in classified and national advertising in recent
months. Classified advertising revenues gained 18 percent over the first quarter
in 1993, led by increases in automotive and transient advertising. Total
advertising revenues advanced 10 percent for the quarter.
Multimedia Broadcasting's revenues of $29.3 million were five percent ahead
of last year's first quarter results. Revenues were up nine percent excluding
the results of three radio stations divested in January 1994 and the video
production unit sold in the first quarter of 1993. Broadcasting has also seen
significantly improved economic conditions in its markets this quarter.
Multimedia Cablevision's first quarter revenues were $41.2 million, up
slightly compared with the same period in 1993. The slow revenue growth is
primarily due to the rate freeze mandated by the Federal Communications
Commission (FCC), which has been in effect since September. The FCC released
guidelines in late March on the second cable rate rollback in two years, but the
impact on our Company cannot be determined until later this month due to the
complexity of the regulations.
Multimedia announced in February that it would trade 39,000 of its Illinois
and Oklahoma cable customers and pay an unspecified amount of cash for 50,000
Tele-Communications, Inc. customers located primarily in suburban Wichita,
Kansas, the division's headquarters. This transaction is an excellent
opportunity to further the Company's "clustering" strategy and gain potential
new revenue streams, since it will give Multimedia 135,000 cable customers and
cable franchise rights to 95 percent of the households in the Wichita
Metropolitan Statistical Area (MSA). Cablevision's basic subscribers totaled
420,000 on March 31, an increase of two percent over the same time in 1993.
The Entertainment division produced revenues of $36.7 million for the first
quarter, an increase of one percent compared with the prior-year period. The
division introduced two new daily talk shows at the National Television
Programming Executives (NATPE) convention in January to very favorable station
response. SUSAN POWTER, a half-hour
<PAGE>
weekday program hosted by the author of the "Stop the Insanity" infomercial and
book, and DENNIS PRAGER, a late-night program hosted by a popular Los Angeles
radio personality, are slated for Fall 1994 debuts.
Multimedia Security Service currently serves over 57,000 commercial and
residential customers. In January, Security opened its seventh full-service
office, in St. Louis, and plans to open another office later this year. Security
revenues increased 68 percent to $5.6 million compared with $3.3 million in last
year's first quarter.
The Company's diversification has again produced gratifying operating
results. The core businesses of newspapers and broadcasting benefited from a
rebounding economy and continued strong cost controls, which helped to mitigate
the effect of expected slowdowns in the cable and entertainment divisions.
Multimedia's consistent record of solid earnings growth -- one that is matched
by only a few media companies -- gives us the financial stability to make the
investments that we believe are necessary for future growth and success.
May 9, 1994
Walter E. Bartlett
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
THREE MONTHS HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
1994 1993
REVENUES:
Newspapers.............................. $ 33,654 31,015
Broadcasting............................ 29,320 27,887
Cable................................... 41,223 41,007
Entertainment........................... 36,667 36,304
Security 5,555 3,308
$146,419 139,521
OPERATING PROFITS:
Newspapers.............................. $ 8,903 7,339
Broadcasting............................ 8,600 6,020
Cable................................... 12,448 14,454
Entertainment........................... 14,126 14,053
Security................................ 456 90
Corporate (3,615) (3,826)
$ 40,918 38,130
</TABLE>
<PAGE>
Multimedia, Inc. and Subsidiaries
Consolidated Statements of Earnings
THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(UNAUDITED)
(IN THOUSANDS EXCEPT PER-SHARE DATA)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Operating revenues:
Newspapers......................................................... $ 33,654 31,015
Broadcasting (Note 1).............................................. 29,320 27,887
Cable.............................................................. 41,223 41,007
Entertainment...................................................... 36,667 36,304
Security 5,555 3,308
Total operating revenues 146,419 139,521
Operating costs and expenses:
Production......................................................... 53,179 51,852
Selling, general and administrative................................ 37,643 37,255
Depreciation....................................................... 10,820 8,652
Amortization 3,859 3,632
Total operating costs and expenses 105,501 101,391
Operating profit..................................................... 40,918 38,130
Interest expense..................................................... 14,873 15,740
Other income (expense), net 3,277 2,535
Earnings before income taxes, minority interest and cumulative
effect of changes in accounting principles.................. 29,322 24,925
Income taxes......................................................... 12,169 10,219
Minority interest 181 492
Earnings before cumulative effect of changes in accounting
principles......................................................... 17,334 15,198
Cumulative effect of changes in accounting principles (Note 2) -- 14,332
Net earnings $ 17,334 29,530
Per share of common stock:
Earnings before cumulative effect of changes in
accounting principles............................................ $ .45 .40
Cumulative effect of changes in accounting principles.............. -- .37
Net earnings....................................................... $ .45 .77
Cash dividends..................................................... -- --
Weighted average shares.............................................. 38,362 38,246
</TABLE>
Note 1: Beginning January 1, 1994, Multimedia Broadcasting began reporting
operating revenues net of agency commissions and national representative fees.
The 1993 amounts have been restated to reflect this change.
Note 2: Effective January 1, 1993, the Company adopted Statements of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes" and No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions."
The cumulative effect of the adoption of SFAS No. 109 was to increase 1993 first
quarter earnings by $15.4 million ($.40 per share). The cumulative effect of the
adoption of SFAS No. 106 was a decrease in 1993 first quarter earnings, net of
tax benefit, of $1.1 million ($.03 per share).
<PAGE>
Multimedia, Inc. and Subsidiaries
Consolidated Balance Sheets
MARCH 31, 1994 AND DECEMBER 31, 1993
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, December 31,
1994 1993
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................................. $ 5,563 11,034
Net trade accounts receivable.............................. 75,770 85,756
Inventories................................................ 4,255 4,408
Deferred income tax benefits............................... 9,042 8,856
Film contract rights....................................... 6,078 8,476
Deferred program costs..................................... 11,660 9,670
Prepaid expenses 5,330 5,516
Total current assets 117,698 133,716
Property, plant and equipment, at cost....................... 511,144 500,133
Less accumulated depreciation (267,123) (259,371)
Net property, plant and equipment 244,021 240,762
Intangible assets, net....................................... 246,575 251,356
Other assets 29,734 29,340
$638,028 655,174
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current installments of long-term debt..................... $ 16,901 393
Accounts payable........................................... 19,812 20,557
Accrued interest........................................... 12,737 2,999
Accrued payroll............................................ 5,625 5,884
Accrued expenses........................................... 30,675 30,465
Income taxes payable....................................... 21,119 15,432
Film contracts payable..................................... 5,981 8,540
Unearned income 20,823 19,416
Total current liabilities 133,673 103,686
Long-term debt............................................... 597,049 664,604
Deferred income taxes........................................ 45,047 44,046
Other liabilities............................................ 3,274 2,837
Minority interest 17,340 17,521
Stockholders' equity (deficit):
Common stock............................................... 3,727 3,721
Additional paid-in capital................................. 179,514 177,689
Retained earnings (deficit) (341,596) (358,930)
Total stockholders' equity (deficit) (158,355) (177,520)
$ 638,028 655,174
</TABLE>
<PAGE>
Multimedia, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Net cash provided by operating activities $ 60,950 60,090
Additions to property, plant and equipment.......................... (14,767) (11,348)
Other 1,420 (1,815)
Net cash provided by (used for) investing activities (13,347) (13,163)
Long-term debt retired.............................................. (51,047) (47,417)
Other (2,027) (1,199)
Net cash provided by (used for) financing activities (53,074) (48,616)
Increase (decrease) in cash and cash equivalents.................... (5,471) (1,689)
Cash and cash equivalents, beginning of year 11,034 4,598
Cash and cash equivalents, end of period $ 5,563 2,909
</TABLE>
Note 1. Net cash provided by operating activities is further analyzed as
follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Operating profit plus depreciation and amortization and amortization
of stock options:
Newspapers........................................................ $ 10,455 8,836
Broadcasting...................................................... 10,826 8,334
Cable............................................................. 21,289 21,265
Entertainment..................................................... 14,600 14,524
Security.......................................................... 2,006 1,192
Corporate (2,689) (2,629)
56,487 51,522
Interest expense less amortization of debt
issue costs....................................................... (14,594) (15,461)
Change in current assets and liabilities............................ 24,015 27,470
Other (4,958) (3,441)
$ 60,950 60,090
</TABLE>
<PAGE>
MULTIMEDIA, INC. AND SUBSIDIARIES
MULTIMEDIA
NEWSPAPERS
ALABAMA
DAILY AND SUNDAY:
The Montgomery Advertiser
ARKANSAS
DAILY:
The Baxter Bulletin
(Mountain Home)
GEORGIA
DAILY:
The Moultrie Observer
NORTH CAROLINA
DAILY AND SUNDAY:
Asheville Citizen-Times
OHIO
DAILIES:
Gallipolis Daily Tribune
The Daily Sentinel
(Pomeroy)
SUNDAY:
Sunday Times-Sentinel
(Gallipolis)
SOUTH CAROLINA
DAILIES:
The Greenville News
Greenville Piedmont
SUNDAY:
The Greenville News
TENNESSEE
DAILY:
The Leaf-Chronicle
(Clarksville)
MONTHLY:
Music City News
The Gospel Voice
(Nashville)
TELEVISION PRODUCTION:
TNN Music City News
Country Awards
VIRGINIA
DAILY AND SUNDAY:
The Daily News-Leader
(Staunton)
WEST VIRGINIA
DAILY:
Point Pleasant Register
MULTIMEDIA
BROADCASTING
Television
GEORGIA
Macon: WMAZ-TV (CBS)
MISSOURI
St. Louis: KSDK (NBC)
OHIO
Cincinnati: WLWT (NBC)
Cleveland: WKYC (NBC)
TENNESSEE
Knoxville: WBIR-TV (NBC)
Radio
GEORGIA
Macon: WAYS(FM)
WMAZ-AM
SOUTH CAROLINA
Greenville: WFBC-AM/(FM)
Spartanburg: WORD-AM
MULTIMEDIA
ENTERTAINMENT
Donahue/Sally Jessy Raphael/
Pozner & Donahue/Jerry Springer/Rush Limbaugh,
The Television Show
Multimedia Motion Pictures
MULTIMEDIA
CABLEVISION
Multimedia operates more than 125 cable television franchises in Kansas,
Illinois, Indiana, North Carolina and Oklahoma and serves approximately 420,000
basic subscribers.
MULTIMEDIA
SECURITY
Multimedia serves more than 57,000 security alarm subscribers.
MULTIMEDIA, INC.
P.O. Box 1688
Greenville, SC 29602
(803) 298-4373
IMPORTANT NOTICE TO SHAREHOLDERS
Wachovia Bank of North Carolina, N.A. is the transfer agent and registrar for
Multimedia, Inc. All communications regarding shareholdings or transfer of your
shares should be directed to: Wachovia Bank of North Carolina, N.A., Corporate
Trust Department, P.O. Box 3001, Winston-Salem, North Carolina 27102.
1-800-633-4236 Toll-Free Telephone Number for Shareholder Services.
