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 For the transition period from ____ to ___
June 30, 1995 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 June 30, 1995:
Common Stock, $.10 par value
37,865,078 shares outstanding
<PAGE>
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 June 30, 1995.
Consolidated Statements of Earnings, three months and six months ended
June 30, 1995 and 1994.
Consolidated Balance Sheets as of June 30, 1995 and December 31, 1994.
Consolidated Statements of Cash Flows, six months ended June 30, 1995
and 1994.
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 June 30, 1995 is included in the Report to
Shareholders attached hereto as an exhibit and incorporated herein by
reference.
Multimedia's net earnings totaled $21.2 million for the quarter that ended on
June 30, 1995, and earnings per share were $.54. These results represent
increases of 8.9% and 5.9%, respectively, over those reported for the second
quarter of last year. Excluding the after-tax loss associated with the launch
of NEWSTALK TELEVISION, the Company's news-based interactive cable service,
earnings per share were $.62, an increase of 21.6% over 1994's second quarter
earnings per share from ongoing operations of $.51.
Net earnings for the first six months of 1995 were $36.0 million and earnings
per share were $.93, decreases of 2.1% and 3.1%, respectively, from the first
six months of 1994. Excluding the impact of costs related to NEWSTALK
TELEVISION in 1995 and gains on the sale of three radio stations in 1994, net
earnings from ongoing operations for the six month period increased 20.7% to
$41.9 million, and earnings per share from ongoing operations increased 18.7%
to $1.08 per share. Revenues for the first six months of 1995 were $326.8
million, 6.9% higher than the corresponding period of the previous year.
Operating profit rose 2.8% to $93.3 million for the period and increased 13.9%
if the effects of NEWSTALK TELEVISION are excluded from the comparison.
The increase in revenue of the newspaper division was primarily due to
advertising revenue increases primarily due to volume growth in local and
classified advertising and, to a lesser extent, due to increases in circulation
revenue.
The broadcasting division revenues were 11.3% ahead of last year's results for
the quarter and 12.5% ahead year-to-date. These increases principally resulted
from a healthy advertising climate and strong ratings positions at the
Company's five television stations.
The increase in revenue of the cable division resulted primarily from an
increase in subscribers to approximately 450,000. Excluding the wireless cable
operations, sold in August 1994, cable division revenues increased 7.6% for the
second quarter and 6.4% for the first six months of 1995 as compared to the
corresponding periods of 1994.
<PAGE>
For the quarter, the entertainment division's revenues increased 2.0% to $36.9
million as compared to the same quarter in 1994, reflective of the increased
competition in the talk show marketplace. The increase in the number of
programs competing for daytime audience shares continues to decrease ratings
for the long-running shows. Excluding costs associated with the launch of
NEWSTALK TELEVISION, operating profit for the Entertainment division was down
13.8% for the second quarter and 14.9% for the six months as compared to the
same period in 1994.
The Security revenue and operating profit increases are primarily due to
increases in the number of customers from approximately 60,000 at the end of
the second quarter of 1994 to approximately 76,000 customers at June 30, 1995.
There have been no material adverse changes in the Registrant's financial
condition during the quarter ended June 30, 1995, and reference is made to
management's discussion and analysis relating to liquidity and capital
resources which appeared on pages 17-21 of the Company's 1994 Annual Report.
On July 24, Gannett Co., Inc. and Multimedia, Inc. entered into a merger
agreement by which Gannett will acquire Multimedia. Under the agreement,
Gannett will pay Multimedia shareholders $45.25 for each of the outstanding
shares of common stock. The purchase price will be adjusted if Multimedia's
debt at December 31, 1995, exceeds a specified level. Closing of the
transaction is conditioned on, among other things, shareholder approval,
receipt of certain regulatory and governmental approvals, and the Company's
debt not exceeding a specified level on the second business day prior to the
closing of the transaction. Closing of the transaction is expected to occur
promptly after Multimedia shareholder and regulatory approvals are obtained.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K:
(a) Exhibits:
10.6.5. 1995 Amendment to Contract for Services. Portions of this
exhibit have been omitted and are the subject of a request
made to the United States Securities and Exchange
Commission for confidential treatment.
10.23. Form of Multimedia, Inc. Management Committee Employment
Contract by and between the Registrant and each of its
Executive Officers.
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 June 30, 1995.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
Items reported on Form 8-K dated July 24, 1995.
Item 5. Other Events.
<PAGE>
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)
August 11, 1995
- -------------------------- -------------------------------------
(Date) Robert E. Hamby, Jr.
Senior Vice President
Finance & Administration
Chief Financial Officer
August 11, 1995
- -------------------------- -------------------------------------
(Date) Frederick G. Lohman
Vice President - Controller
EXHIBIT 10.6.5
[DELETION*] AGREEMENT
THIS AGREEMENT is entered into by and between Multimedia
Entertainment, Inc. ("Multimedia") and Phillip J. Donahue
("Donahue").
[DELETION*]
NOW, THEREFORE, it is agreed that:
[DELETION*]
*The deleted material is deemed confidential commercial or financial
information by Multimedia, Inc. and has been filed separately with
the United States Securities and Exchange Commission.
<PAGE>
[DELETION*]
*The deleted material is deemed confidential commercial or financial
information by Multimedia, Inc. and has been filed separately with the
United States Securities and Exchange Commission.
2
<PAGE>
[DELETION*]
7. The terms of this Agreement shall supersede Section 5
of the parties' 1994 Amendment to Contract for Services and such
Section shall have no further force or effect.
IN WITNESS WHEREOF, this Agreement is executed this ____ day
of ________________, 1995.
Multimedia Entertainment, Inc.
By: ______________________________
__________________________________
Phillip J. Donahue
*The deleted material is deemed confidential commercial or financial
information by Multimedia, Inc. and has been filed separately with the
United States Securities and Exchange Commission.
3
EXHIBIT 10.23
MANAGEMENT COMMITTEE
EMPLOYMENT AGREEMENT
AGREEMENT by and between Multimedia, Inc., a South Carolina
corporation (the "Company") and _________ _________ (the "Executive"), dated
as of the ___ day of _______________.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its shareholders to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or threatened Change of
Control and to encourage the Executive's full attention and dedication to the
Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change of Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into
this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date" shall mean the
first date during the Change of Control Period (as defined in Section 1(b))
on which a Change of Control (as defined in Section 2) occurs. Anything in
this Agreement to the contrary notwithstanding, if a Change of Control occurs
and if the Executive's employment with the Company is terminated by the
Company prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment
was at the request of a third party who has taken steps reasonably calculated
to effect a Change of Control, then for all purposes of this Agreement the
"Effective Date" shall mean the date immediately prior to the date of such
termination of employment.
(b) The "Change of Control Period" shall mean the period
commencing on the date hereof and ending on the third anniversary of the date
hereof; provided, however, that commencing on the date one year after the
date hereof, and on each annual anniversary of such date (such date and each
annual anniversary thereof shall be hereinafter referred to as the "Renewal
Date"), unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal
Date, unless at least 60 days prior to the Renewal Date the Company shall
give notice to the Executive that the Change of Control Period shall not be
so extended.
2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall mean:
1
<PAGE>
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of this
Section 2; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be,
of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combina-
tion, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or
2
<PAGE>
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or
(e) A sale, transfer or other disposition of [division of the
Company employing the Executive] (the "Division") immediately after which
neither the Company nor its shareholders collectively own directly or
indirectly more than 50% of the Division.
3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the third an-
niversary of such date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During
the Employment Period, (A) the Executive's position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 120-day period immediately preceding the Effective Date and (B) the
Executive's services shall be performed at the location where the Executive
was employed immediately preceding the Effective Date or any office or
location less than 35 miles from such location.
(ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours
to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use
the Executive's reasonable best efforts to perform faithfully and efficiently
such responsibilities. During the Employment Period it shall not be a
violation of this Agreement for the Executive to (A) serve on corporate,
civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C) manage
personal investments, so long as such activities do not significantly
interfere with the performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the continued conduct
of such activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive's responsibilities to the
Company.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive an annual base salary ("Annual Base
Salary"), which shall be paid at a bi-weekly rate, at least equal to twenty-
six times the highest bi-weekly base salary and any automobile or gas
allowance paid or payable, including any base salary which has been earned
but deferred, to the Executive by the Company and its affiliated companies in
respect of the twelve-month period immediately preceding the month in which
the Effective Date occurs. During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter
at least annually. Any increase in Annual Base Salary shall not serve to
limit or reduce
3
<PAGE>
any other obligation to the Executive under this Agreement. Annual Base Salary
shall not be reduced after any such increase and the term Annual Base Salary
as utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term "affiliated companies" shall
include any company controlled by, controlling or under common control with
the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "Annual Bonus") in cash at least equal to the
Executive's target bonus under the Company's annual incentive plans for the
year in which the Effective Date occurs (annualized in the event that the
Executive was not employed by the Company for the whole of such fiscal year)
(the "Target Bonus") the average bonus paid to the Participant for the three
years prior to the year in which Change of Control occurs, if the Executive
does not participate in a formal bonus plan. Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its
affiliated companies, but in no event shall such plans, practices, policies
and programs provide the Executive with incentive opportunities (measured
with respect to both regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and its
affiliated companies for the Executive under such plans, practices, policies
and programs as in effect at any time during the 120-day period immediately
preceding the Effective Date or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other peer
executives of the Company and its affiliated companies.
(iv) Welfare Benefit Plans. During the Employment Period,
the Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company and its affiliated com-
panies, but in no event shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices, policies and
programs in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.
(v) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect
4
<PAGE>
generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without
limitation, tax and financial planning services, payment of club dues, and,
if applicable, use of an automobile and payment of related expenses, in
accordance with the most favorable plans, practices, programs and policies of
the Company and its affiliated companies in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
(vii) Office and Support Staff. During the Employment
Period, the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most favorable of the
foregoing provided to the Executive by the Company and its affiliated
companies at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as provided generally
at any time thereafter with respect to other peer executives of the Company
and its affiliated companies.
(viii) Vacation. During the Employment Period, the
Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more favorable
to the Executive, as in effect generally at any time thereafter with respect
to other peer executives of the Company and its affiliated companies.
5. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate automatically upon the Executive's
death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment
Period (pursuant to the definition of Disability set forth below), it may
give to the Executive written notice in accordance with Section 12(b) of this
Agreement of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective
on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time performance of
the Executive's duties. For purposes of this Agreement, "Disability" shall
mean the absence of the Executive from the Executive's duties with the
Company on a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its insurers and
reasonably acceptable to the Executive or the Executive's legal rep-
resentative.
(b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement,
"Cause" shall mean:
5
<PAGE>
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of
its affiliates (other than any such failure resulting from incapacity
due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board or
the Chief Executive Officer of the Company which specifically identifies
the manner in which the Board or Chief Executive Officer believes that
the Executive has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted
to be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall not be deemed to
be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable notice is
provided to the Executive and the Executive is given an opportunity, together
with counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive has engaged in the conduct described in
subparagraph (i) or (ii) above, and specifying the particulars thereof in
detail.
(c) Good Reason. The Executive's employment may be terminated by
the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to the Executive of any duties inconsistent
in any material respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or
any other action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location other than as provided in Section 4(a)(i)(B) hereof
or the Company's requiring the Executive to travel on Company business
to a substantially greater extent than required immediately prior to the
Effective Date;
6
<PAGE>
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive. Anything in this
Agreement to the contrary notwithstanding, a termination by the Executive for
any reason other than death during the 30-day period immediately following
the first anniversary of the Effective Date shall be deemed to be a ter-
mination for Good Reason for all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section
12(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated and (iii) if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes
to a showing of Good Reason or Cause shall not waive any right of the
Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination
or any later date specified therein, as the case may be, (ii) if the
Executive's employment is terminated by the Company other than for Cause or
Disability, the Date of Termination shall be the date on which the Company
notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of Ter-
mination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
6. Obligations of the Company upon Termination. (a) Good Reason;
Other Than for Cause, Death or Disability. If, during the Employment Period,
the Company shall terminate the Executive's employment other than for Cause
or Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the
following amounts:
A. the sum of (1) the Executive's Annual Base Salary
through the Date of
7
<PAGE>
Termination to the extent not theretofore paid, (2) the product of
(x) the Target Bonus and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (3) any
compensation previously deferred by the Executive (together with
any accrued interest or earnings thereon) and any accrued vacation
pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the "Accrued Obligations"); and
B. $ * ; and
---------------
C. an amount equal to the excess of (a) the actuarial
equivalent of the benefit under the Company's qualified defined
benefit retirement plan (the "Retirement Plan") (utilizing actu-
arial assumptions no less favorable to the Executive than those in
effect under the Company's Retirement Plan immediately prior to
the Effective Date), and any excess or supplemental retirement
plan in which the Executive participates (together, the "SERP")
which the Executive would receive if the Executive's employment
continued for three years after the Date of Termination assuming
for this purpose that all accrued benefits are fully vested, and,
assuming that the Executive's compensation in each of the three
years is that required by Section 4(b)(i) and Section 4(b)(ii),
over (b) the actuarial equivalent of the Executive's actual
benefit (paid or payable), if any, under the Retirement Plan and
the SERP as of the Date of Termination;
(ii) for three years after the Executive's Date of Termination,
or such longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, the Company shall continue benefits
to the Executive and/or the Executive's family at least equal to those
which would have been provided to them in accordance with the plans,
programs, practices and policies described in Section 4(b)(iv) of this
Agreement if the Executive's employment had not been terminated or, if
more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies and their families, provided, however, that if the
Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer
provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining
eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits pursuant to such plans, practices,
programs and policies, the Executive shall be considered to have
remained employed until three years after the Date of Termination and to
have retired on the last day of such period;
(iii) the Company shall, at its sole expense as incurred, provide
the Executive with outplacement services the scope and provider of which
shall be selected by the Executive in his reasonable sole discretion;
and
*With respect to each individual covered by this Management Committee
Employment Agreement, the following sets forth, next to each individual's name,
the dollar amount applicable to this section 6.(i.).B.: Donald D. Sbarra,
$2,650,000; Douglas J. Greenlaw, $1,850,000; Robert E. Hamby, Jr.,
$1,500,000; Robert Turner, $1,250,000; William deB. Mebane, $1,250,000;
Michael C. Burrus, $1,250,000; and Thomas L. Magaha, $650,000.
8
<PAGE>
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall
be hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination.
With respect to the provision of Other Benefits, the term Other Benefits as
utilized in this Section 6(b) shall include, without limitation, and the
Executive's estate and/or beneficiaries shall be entitled to receive,
benefits at least equal to the most favorable benefits provided by the
Company and affiliated companies to the estates and beneficiaries of peer
executives of the Company and such affiliated companies under such plans,
programs, practices and policies relating to death benefits, if any, as in
effect with respect to other peer executives and their beneficiaries at any
time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive's estate and/or the Executive's benefi-
ciaries, as in effect on the date of the Executive's death with respect to
other peer executives of the Company and its affiliated companies and their
beneficiaries.
(c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision
of Other Benefits. Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in this
Section 6(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits at least
equal to the most favorable of those generally provided by the Company and
its affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating to dis-
ability, if any, as in effect generally with respect to other peer executives
and their families at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive and/or
the Executive's family, as in effect at any time thereafter generally with
respect to other peer executives of the Company and its affiliated companies
and their families.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (x) his Annual Base Salary
through the Date of Termination, (y) the amount of any compensation
previously deferred by the Executive, and (z) Other Benefits, in each case to
the extent theretofore unpaid. If the Executive voluntarily terminates
employment during the Employment Period, excluding a termination for Good
Reason, this Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations and the timely payment or
9
<PAGE>
provision of Other Benefits. In such case, all Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
plan, program, policy or practice provided by the Company or any of its af-
filiated companies and for which the Executive may qualify, nor, subject to
Section 12(f), shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company or
any of its affiliated companies. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any
of its affiliated companies at or subsequent to the Date of Termination shall
be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
the Executive or others. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or enforce-
ability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus
in each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986,
as amended (the "Code"). The Company and the Executive agree that this
Agreement sets forth the exclusive remedies of the Executive for a
termination of employment by the Company or the Executive.
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 9) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are herein-
after collectively referred to as the "Excise Tax"), then the Executive shall
be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. Notwithstanding the foregoing provisions of this
Section 9(a), if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Payments do not
10
<PAGE>
exceed 110% of the greatest amount (the "Reduced Amount") that could be paid
to the Executive such that the receipt of Payments would not give rise to any
Excise Tax, then no Gross-Up Payment shall be made to the Executive and the
Payments, in the aggregate, shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made
by KPMG Peat Marwick or such other nationally recognized certified public ac-
counting firm as may be designated by the Executive (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Company and
the Executive within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is requested
by the Company. In the event that the Accounting Firm is serving as ac-
countant or auditor for the individual, entity or group effecting the Change
of Control, the Executive shall appoint another nationally recognized ac-
counting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid
by the Company to the Executive within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the un-
certainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have
been made ("Underpayment"), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies pursuant
to Section 9(c) and the Executive thereafter is required to make a payment of
any Excise Tax, the Accounting Firm shall determine the amount of the Under-
payment that has occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company
of the nature of such claim and the date on which such claim is requested to
be paid. The Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which it gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Executive
in writing prior to the expiration of such period that it desires to contest
such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting
11
<PAGE>
legal representation with respect to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing
provisions of this Section 9(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at
its sole option, either direct the Executive to pay the tax claimed and sue
for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however,
that if the Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the
Executive, on an interest-free basis and shall indemnify and hold the Execu-
tive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limita-
tions relating to payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is limited solely
to such contested amount. Furthermore, the Company's control of the contest
shall be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 9(c)) promptly
pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the receipt
by the Executive of an amount advanced by the Company pursuant to
Section 9(c), a determination is made that the Executive shall not be enti-
tled to any refund with respect to such claim and the Company does not notify
the Executive in writing of its intent to contest such denial of refund prior
to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of
such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
10. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the Company or
any of
12
<PAGE>
its affiliated companies and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the
Executive's employment with the Company, the Executive shall not, without the
prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it. In no
event shall an asserted violation of the provisions of this Section 10
constitute a basis for deferring or withholding any amounts otherwise payable
to the Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable
by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina, without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
If to the Company:
Multimedia, Inc.
Attention: Mr. Robert E. Hamby, Jr.
P.O. Box 1688
Greenville, South Carolina 29602
13
<PAGE>
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
(f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between and signed by
the Executive and the Company, the employment of the Executive by the Company
is "at will" and, subject to Section 1(a) hereof, prior to the Effective
Date, the Executive's employment and/or this Agreement may be terminated by
either the Executive or the Company at any time prior to the Effective Date,
in which case the Executive shall have no further rights under this
Agreement; provided that this Agreement may not be terminated at the request
of a third party who has taken steps reasonably calculated to effect a Change
of Control. From and after the Effective Date this Agreement shall supersede
any other agreement between the parties with respect to the subject matter
hereof.
14
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from its Board of Directors, the
Company has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.
____________________________________
[Executive]
MULTIMEDIA, INC.
By__________________________________
15
EXHIBIT 11
MULTIMEDIA, INC.
Computation of Primary and Fully Diluted Earnings per Share
Three Months Ended Six Months Ended
6/30/95 6/30/94 6/30/95 6/30/94
PRIMARY
Net earnings applicable to
common and common
equivalent shares $21,165,000 19,443,000 $36,011,000 36,777,000
Shares:
Weighted average number of
common and common equivalent
shares outstanding 38,886,000 38,191,000 38,708,000 38,280,000
Net earnings per share $ .54 .51 $ .93 .96
FULLY DILUTED
Net earnings applicable to
common and common
equivalent shares $21,165,000 19,443,000 $36,011,000 36,777,000
Shares:
Weighted average number of
common and common equivalent
shares assuming ending
market price 38,889,000 38,192,000 38,860,000 38,277,000
Net earnings per share $ .54 .51 $ .93 .96
[LETTER HEAD LOGO OF KPMG PEAT MARWICK LLP EXHIBIT 15
APPEARS HERE]
The Board of Directors
Multimedia, Inc.:
We have reviewed the condensed consolidated balance sheet of Multimedia,
Inc. and subsidiaries as of June 30, 1995, and the related condensed
consolidated statements of earnings for the three-month and six-month
periods ended June 30, 1995 and 1994 and the related condensed
consolidated statements of cash flows for the six-month periods ended June
30, 1995 and 1994. These condensed consolidated 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 inquires 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, 1994, 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 10, 1995, 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, 1994, 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 LLP appears here]
July 28, 1995
(A Collage of pictures appears here) EXHIBIT 19
MULTIMEDIA, INC.
1995
SECOND QUARTER REPORT
<PAGE>
A LETTER TO OUR
SHAREHOLDERS
Multimedia's net earnings totaled $21.2 million for the quarter that ended
on June 30, 1995, and earnings per share were $.54. These results
represent increases of 8.9% and 5.9%, respectively, over those reported for the
second quarter of last year. Excluding the after-tax loss associated with the
launch of NEWSTALK TELEVISION, the Company's news-based interactive cable
service, earnings per share were $.62, an increase of 21.6% over 1994's second
quarter earnings per share from ongoing operations of $.51.
Consolidated operating revenues for the year's second quarter were $170.3
million, an increase of 7.0% compared with the same period in 1994. Operating
profit increased 5.5% over the prior-year quarter to $52.6 million. Excluding
costs related to NEWSTALK TELEVISION, Multimedia's operating profit was 15.9%
higher than the comparable quarter in 1994. Interest expense was $14.4
million, $500,000 less than last year's second quarter.
Net earnings for the first six months of 1995 were $36.0 million and
earnings per share were $.93, decreases of 2.1% and 3.1%, respectively, from
the first six months of 1994. Excluding the impact of costs related to NEWSTALK
TELEVISION in 1995 and gains on the sale of three radio stations in 1994, net
earnings from ongoing operations for the six month period increased 20.7% to
$41.9 million, and earnings per share from ongoing operations increased 18.7%
to $1.08 per share. Revenues for the first six months of 1995 were $326.8
million, 6.9% higher than the previous year. Operating profit rose 2.8% to
$93.3 million for the period and increased 13.9% if the effects of NEWSTALK
TELEVISION are excluded from the comparison.
Multimedia Newspaper Company's momentum from a strong first quarter helped
produce revenues of $41.3 million for the quarter just ended, a 10.3% gain over
the year-earlier period. Second quarter advertising revenue grew 11.1% compared
with the same quarter in 1994, fueled by substantial gains in local and
classified revenues, and circulation revenue was 6.1% ahead of the second
quarter last year. Division revenues for the first six months increased 10.2%
over last year to $78.4 million.
The Broadcasting division's second quarter revenues of $41.8 million were
11.3% more than the same period last year. Broadcasting revenues increased
12.5% to $75.2 million for the first half of the year. These increases result
from a healthy advertising climate and the strong ratings positions of the
Company's five television stations. KSDK-TV, Multimedia's St. Louis NBC
affiliate, was again ranked the nation's #1 station in the top 30 markets in
early news, late news and sign-on to sign-off in the May 1995 sweeps.
Multimedia Cablevision generated revenues of $43.5 million for the quarter,
an increase of 3.7% over the year-earlier period. For the six months,
Cablevision revenues rose 2.7% in comparison with 1994 to $85.4 million. After
eliminating the effect of the division's wireless cable operations that were
sold in August 1994, Cable revenues were up 7.6% for the quarter and 6.4% for
the first six months. On June 30, Multimedia had approximately 450,000 basic
subscribers and was ranked the 27th largest cable operator in the country.
Multimedia Entertainment's second quarter revenues increased 2.0% to $36.9
million when compared with the same quarter in 1994 and 2.1% to $74.4 million
for the first half of the year. Nielsen NSI/SNAP ratings for the May 1995
sweeps show that DONAHUE had a 3.6, off 14.0% compared with last May; SALLY
JESSY RAPHAEL produced a 4.2, the same rating as last year; JERRY SPRINGER'S
ratings grew 10.0% to a 3.3; and RUSH LIMBAUGH, THE TELEVISION SHOW had a 2.4,
an increase of 4.0% compared with the May
<PAGE>
1994 sweeps. Excluding costs associated with the launch of NEWSTALK
TELEVISION, operating profit for the Entertainment division was down
13.8% for the second quarter and 14.9% for the six months.
For the latest quarter, Multimedia Security Service posted revenues of $6.8
million, reflecting a gain of 11.9% compared with last year's second quarter.
For the first six months of this year, Security revenues were $13.4 million, up
15.0% over last year. Security had more than 76,000 customers at the end of
the quarter, an increase of approximately 9,000 since March 31, 1995. This
substantial growth reflects the purchase of more than 3,200 accounts in
Oklahoma, as well as ongoing acquisitions and sales generated by the division's
ten sales offices.
On July 24, Gannett Co., Inc. and Multimedia, Inc. entered into a merger
agreement by which Gannett will acquire Multimedia. Under the agreement,
Gannett will pay Multimedia shareholders $45.25 for each of the outstanding
shares. The purchase price will be adjusted if Multimedia's debt at
December 31, 1995, exceeds a specified level. Closing of the transaction is
conditioned on, among other things, shareholder approval, receipt of certain
regulatory and governmental approvals, and the Company's debt not exceeding a
specified level on the second business day prior to the closing of the
transaction. Closing of the transaction is expected to occur promptly after
Multimedia shareholder and regulatory approvals are obtained.
Sincerely,
(Signature - DONALD D. SBARRA)
Donald D. Sbarra
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
AUGUST 7, 1995
<TABLE>
<CAPTION>
THREE MONTHS HIGHLIGHTS
(Unaudited)(In thousands) 1995 1994
<S> <C> <C>
REVENUES:
Newspapers $ 41,304 37,447
Broadcasting 41,762 37,535
Cable 43,550 41,979
Entertainment 36,903 36,188
Security 6,808 6,082
$ 170,327 159,231
OPERATING PROFITS:
Newspapers $ 13,177 11,524
Broadcasting 18,971 13,689
Cable 14,363 12,631
Entertainment 8,150 15,497
Security 1,046 800
Corporate (3,137) (4,290)
$ 52,570 49,851
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
Three Months Six Months
(Unaudited) (In thousands except per-share data) 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating revenues:
Newspapers $ 41,304 37,447 78,355 71,101
Broadcasting 41,762 37,535 75,212 66,855
Cable 43,550 41,979 85,450 83,202
Entertainment 36,903 36,188 74,377 72,855
Security 6,808 6,082 13,380 11,637
Total operating revenues 170,327 159,231 326,774 305,650
Operating costs and expenses:
Production 64,321 55,700 125,996 108,879
Selling, general and administrative 39,877 39,036 79,768 76,679
Depreciation 9,899 10,811 20,449 21,631
Amortization 3,660 3,833 7,237 7,692
Total operating costs and expenses 117,757 109,380 233,450 214,881
Operating profit 52,570 49,851 93,324 90,769
Interest expense 14,399 14,902 28,862 29,775
Other income (expense), net (62) (1,100) (105) 2,177
Earnings before income taxes and minority
interest 38,109 33,849 64,357 63,171
Income taxes 15,816 14,047 26,709 26,216
Minority interest in subsidiaries'income, net 1,128 359 1,637 178
Net earnings $ 21,165 19,443 36,011 36,777
Per share of common stock:
Net earnings $ .54 .51 .93 .96
Cash dividends - - - -
Weighted average shares 38,886 38,191 38,708 38,280
</TABLE>
MULTIMEDIA, INC. AND SUBSIDIARIES
<PAGE>
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
June 30, December 31,
(Unaudited) (In thousands) 1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 13,299 6,202
Net trade accounts receivable 94,789 93,426
Inventories 7,782 4,643
Deferred income tax benefits 9,941 9,581
Program rights 2,762 7,570
Deferred program costs 7,088 10,923
Prepaid expenses and other 7,388 6,795
Total current assets 143,049 139,140
Property , plant and equipment, at cost 607,764 558,749
Less accumulated depreciation 301,246 283,522
Net property , plant and equipment 306,518 275,227
Intangible assets, net 249,026 242,078
Other assets 30,533 27,533
$ 729,126 683,978
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current installments of long-term debt $ 30,254 30,254
Accounts payable 19,173 24,512
Accrued interest 2,669 2,671
Accrued payroll 6,354 8,386
Accrued expenses 40,804 38,148
Income taxes payable 18,137 10,202
Program rights payable 3,108 7,793
Unearned income 21,365 20,556
Total current liabilities 141,864 142,522
Long-term debt 548,001 542,303
Deferred income taxes 53,574 54,090
Other liabilities 3,247 3,294
Minority interest 20,321 18,684
Stockholders'equity (deficit):
Common stock 3,786 3,762
Additional paid-in capital 191,223 188,224
Retained earnings (deficit) (232,890) (268,901)
Total stockholders'equity (deficit) (37,881) (76,915)
$ 729,126 683,978
</TABLE>
MULTIMEDIA, INC. AND SUBSIDIARIES
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
(Unaudited) (In thousands) 1995 1994
<S> <C> <C>
Net cash provided by operating activities $ 72,294 73,766
Additions to property, plant and equipment (47,990) (33,116)
Acquisitions of properties (21,180) (8,824)
Other 1,307 4,726
Net cash used for investing activities (67,863) (37,214)
Addition (reduction) in revolving credit, net 46,754 (23,999)
Long-term debt retired (41,056) (12,111)
Other (3,032) (4,239)
Net cash provided by (used for) financing activities 2,666 (40,349)
Increase (decrease) in cash and cash equivalents 7,097 (3,797)
Cash and cash equivalents, beginning of year 6,202 11,034
Cash and cash equivalents, end of period $ 13,299 7,237
NOTE: NET CASH PROVIDED BY OPERATING ACTIVITIES IS FURTHER
ANALYZED AS FOLLOWS:
Operating profit plus depreciation and amortization
and amortization of stock options:
Newspapers $ 26,792 23,532
Broadcasting 36,540 26,731
Cable 43,374 42,739
Entertainment 15,509 30,570
Security 4,696 4,354
Corporate (5,753) (6,055)
121,158 121,871
Interest expense less amoritzation of debt
issue costs (28,318) (29,216)
Change in current assets and liabilities 2,407 (2,260)
Other (22,953) (16,629)
Net cash provided by operating activities $ 72,294 73,766
</TABLE>
MULTIMEDIA, INC. AND SUBSIDIARIES
<PAGE>
<TABLE>
MULTIMEDIA, INC. AND SUBSIDIARIES
<S> <C> <C> <C>
MULTIMEDIA TENNESSEE MULTIMEDIA MULTIMEDIA
NEWSPAPER COMPANY Daily: BROADCASTING COMPANY ENTERTAINMENT COMPANY
305 S. MAIN ST. The Leaf-Chronicle 305 S. MAIN ST. 45 ROCKEFELLER PLAZA
P.O.BOX 1688 (Clarksville) P.O.BOX 1688 35TH FLOOR
GREENVILLE,S.C. 29602 Monthly: GREENVILLE,S.C. 29602 NEW YORK, N.Y.10111
Music City News
ALABAMA TELEVISION Donahue / Sally Jessy
The Gospel Voice
Daily and Sunday: GEORGIA Raphael / Pozner &
(Nashville
The Montgomery Macon:WMAZ-TV (CBS) Donahue / Jerry Springer /
Television Production
Advertiser Rush Limbaugh, The
TNN Music City News MISSOURI
Television Show/ Susan
ARKANSAS Country Awards St.Louis: KSDK (NBC)
Powter / Dennis Prager
Daily:
VIRGINIA OHIO
The Baxter Bulletin NewsTalk Television
Daily and Sunday: Cincinnati: WLWT (NBC)
(Mountain Home)
The Daily News-Leader Cleveland:WKYC (NBC)
MULTIMEDIA SECURITY
GEORGIA (Staunton)
TENNESSEE SERVICE
Daily:
WEST VIRGINIA Knoxville:WBIR-TV (NBC) 800 E.WATERMAN
The Observer (Moultrie)
Daily: WICHITA, KANS. 67202
RADIO
NORTH CAROLINA Point Pleasant Register
GEORGIA Multimedia serves more
Daily and Sunday:
Multimedia also publishes Macon:WAYS (FM) than 76,000 security alarm
Asheville Citizen-Times
49 non-daily products. WMAZ-AM customers.
OHIO
MULTIMEDIA
Dailies:
CABLEVISION COMPANY
Gallipolis Daily Tribune
701 E. DOUGLAS AVE.
The Daily Sentinel
P.O.BOX 3027
(Pomeroy)
WICHITA, KANS. 67202
Sunday:
Sunday Times-Sentinel Multimedia operates more
(Gallipolis) than 150 cable television
franchises in Kansas,
SOUTH CAROLINA
Illinois, Indiana, North
Dailies:
Carolina and Oklahoma
The Greenville News
and serves approximately
Greenville Piedmont
450,000 basic subscribers.
Sunday:
The Greenville News
</TABLE>
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.
<PAGE>
(Logo- Multimedia) Multimedia, Inc. BULK RATE
P.O. Box 1688 U.S. POSTAGE
Greenville, South Carolina 29602 PAID
(803) 298-4373 CHARLOTTE, N.C.
PERMIT NO. 136
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC
FORM 10-Q AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 13299
<SECURITIES> 0
<RECEIVABLES> 94789
<ALLOWANCES> 0
<INVENTORY> 7782
<CURRENT-ASSETS> 143049
<PP&E> 607764
<DEPRECIATION> (301246)
<TOTAL-ASSETS> 729126
<CURRENT-LIABILITIES> 141864
<BONDS> 548001<F1>
<COMMON> 3786
0
0
<OTHER-SE> (41667)<F2>
<TOTAL-LIABILITY-AND-EQUITY> 729126
<SALES> 0
<TOTAL-REVENUES> 170327
<CGS> 0
<TOTAL-COSTS> 117757
<OTHER-EXPENSES> (62)<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14399
<INCOME-PRETAX> 38109
<INCOME-TAX> 15816
<INCOME-CONTINUING> 21165
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21165
<EPS-PRIMARY> .54
<EPS-DILUTED> .54
<FN>
<F1>Bonds - Represents total long-term debt.
<F2>Other-SE - Represents total paid-in-capital and retained earnings.
<F3>Other Expenses - Represents net other (income)/expense.
</FN>
</TABLE>
