NELSON THOMAS INC, S-3/A, 1995-07-13

NELSON THOMAS INC
S-3/A, 1995-07-13
BOOKS: PUBLISHING OR PUBLISHING & PRINTING

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 13, 1995

REGISTRATION NO. 33-60615

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
THOMAS NELSON, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
TENNESSEE 62-0679364
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>

NELSON PLACE AT ELM HILL PIKE
NASHVILLE, TENNESSEE 37214-1000
(615) 889-9000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------------
JOE L. POWERS
EXECUTIVE VICE PRESIDENT AND SECRETARY
THOMAS NELSON, INC.
NELSON PLACE AT ELM HILL PIKE
NASHVILLE, TENNESSEE 37214-1000
(615) 889-9000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPIES TO:

<TABLE>
<S> <C>
JAMES H. CHEEK, III, ESQ. CHARLES I. WEISSMAN, ESQ.
BASS, BERRY & SIMS SHEREFF, FRIEDMAN, HOFFMAN & GOODMAN, LLP
FIRST AMERICAN CENTER 919 THIRD AVENUE
NASHVILLE, TENNESSEE 37238 NEW YORK, NY 10022
</TABLE>

---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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<PAGE> 2

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: one to be
used in connection with a United States and Canadian offering (the "U.S.
Prospectus") and one to be used in a concurrent international offering (the
"International Prospectus"). The two prospectuses will be identical in all
respects except for the front and back cover pages, pages 22 thru 25 of the U.S.
Prospectus and pages 22 thru 27 of the International Prospectus. Final forms of
each prospectus will be filed with the Securities and Exchange Commission in
accordance with its rules.
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES
LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 27, 1995

2,500,000 SHARES

THOMAS NELSON, INC.

COMMON STOCK
------------------------

All of the shares of Common Stock offered hereby are being sold by Thomas
Nelson, Inc. (the "Company"). Of the 2,500,000 shares of Common Stock offered
hereby, 2,000,000 shares are being offered in the United States and Canada (the
"U.S. Shares") and 500,000 shares are being offered in a concurrent
international offering outside the United States and Canada. The price to the
public and aggregate underwriting discounts and commissions per share will be
identical for both offerings. See "Underwriting."

The Company has two classes of authorized and issued common stock. Holders
of the Common Stock, which is offered hereby, are entitled to one vote per
share, and holders of the Class B Common Stock are entitled to ten votes per
share on all matters submitted to a vote of shareholders of the Company. See
"Description of Capital Stock." After completion of this offering, directors and
executive officers of the Company will beneficially own Common Stock and Class B
Common Stock representing approximately 36.1% of the voting power of the
Company.

On June 19, 1995, the Common Stock and Class B Common Stock began trading
on the New York Stock Exchange (the "NYSE") under the symbols "TNM" and "TNM.B,"
respectively, and ceased to be quoted on the Nasdaq National Market System. On
June 23, 1995, the last reported sale prices of the Common Stock and Class B
Common Stock on the NYSE were $20 1/8 and $21 3/8 per share, respectively. See
"Price Range of Common Stock and Class B Common Stock."
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
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<S> <C> <C> <C>
Per Share................................ $ $ $
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Total.................................... $ $ $
- -----------------------------------------------------------------------------------------------
Total Assuming Full Exercise of Over-
Allotment Option(3).................... $ $ $
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- -----------------------------------------------------------------------------------------------
</TABLE>

(1) See "Underwriting."
(2) Before deducting expenses, estimated at $200,000, which are payable by the
Company.
(3) Assuming exercise in full of the 30-day option granted by the Company to the
U.S. Underwriters to purchase up to 375,000 additional shares of Common
Stock, on the same terms, solely to cover over-allotments. See
"Underwriting."
------------------------

The U.S. Shares are offered by the U.S. Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters, and subject
to their right to reject orders in whole or in part. It is expected that
delivery of the Common Stock will be made in New York City on or about July ,
1995.
------------------------

PAINEWEBBER INCORPORATED
MERRILL LYNCH & CO.
J.C. BRADFORD & CO.
------------------------

THE DATE OF THIS PROSPECTUS IS , 1995.
<PAGE> 4

[ARTWORK] [ARTWORK]
<S> <C>
In book publishing, the Company's new titles consistently Thomas Nelson publishes over 1,200 different Bibles and
dominate the Christian and inspirational bestseller lists, related publications in nine of ten major translations, including
while its 1,400 title backlist represents a stable source the Contemporary English Version, launched in 1995.
of recurring sales.

[ARTWORK] [ARTWORK]

The Company's music division boasts an impressive roster In 1994, the Company expanded its presence in gift products through
of Christian musical artists, both established stars and its merger with PPC, Inc., a creator of gift collections and
major new talent, spanning a broad range of styles of stationery products.
traditional and contemporary Christian and inspirational
music.
</TABLE>

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AND CLASS B COMMON STOCK OF THE COMPANY AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this prospectus or in documents incorporated
by reference in this prospectus. Unless otherwise indicated, the information in
this prospectus assumes that the Underwriters' over-allotment option is not
exercised and reflects a five-for-four stock split of the Common Stock and Class
B Common Stock in the form of a 25% stock dividend effected on March 24, 1995.

THE COMPANY

Thomas Nelson, Inc. is a leading publisher, producer and distributor of
books and recorded music emphasizing Christian, inspirational and family value
themes, and believes it is the largest commercial publisher of the Bible in
English language translations. The Company also designs and markets a broad line
of gift and stationery products. The Company believes it is the largest
publisher of Christian and inspirational books and the largest producer of
recorded Christian music in the United States.

The Company's publishing operations, which accounted for approximately 55%
of fiscal 1995 net revenues, involve the publication and distribution of
hardback and trade paperback books with Christian, inspirational or family value
themes and a broad line of Bibles and related publications. Authors published by
the Company include some of the most well-known Christian and inspirational
communicators in the field, including Chuck Colson, James Dobson, Billy Graham,
Benny Hinn, Barbara Johnson, Max Lucado, Frank Peretti, Pat Robertson, Robert
Schuller, Gary Smalley, Charles Stanley, Charles Swindoll and Bodie and Brock
Thoene. In each of the last three fiscal years, the Company published over 300
new titles and, during that period, published over 50% of the top ten best
selling Christian and inspirational books based on the monthly Bookstore Journal
Christian Hardbound Bestsellers' Lists. The Company maintains a backlist of over
1,400 active titles which provide a stable source of recurring revenues. The
Company publishes nine of the ten major English language Bible translations,
four of which are proprietary to the Company, and introduced in June 1995 the
Contemporary English Version ("CEV") Bible translation, which is designed to be
understandable at virtually any reading level.

The Company's music operations, which accounted for approximately 34% of
fiscal 1995 net revenues, are comprised of the production and distribution of
Christian and inspirational recorded music and related music publishing.
Traditional and contemporary Christian and inspirational music is a genre which
is defined by its lyrical content and encompasses a diverse range of musical
styles including gospel, praise and worship, country, rock, rhythm and blues,
rap and metal. Recording artists under contract with the Company include
Anointed, Helen Baylor, Shirley Caesar, Brian Duncan, Amy Grant, Sandi Patty,
Petra and Point of Grace. In 1995, the Company's artists received ten Dove
Awards, the Christian music industry's annual awards for outstanding recording
artists and releases. In fiscal 1995, the Company released 90 new titles, and
maintains a catalog of over 40,000 copyrighted songs which are licensed to
independent publishers, record companies, churches and other organizations. In
addition, the Company operates a music publishing business engaged in songwriter
development, print music publishing and copyright administration.

The Company has grown significantly over the last three years through a
combination of internal product development, expanded product distribution and
acquisitions, which have significantly enhanced its competitive position and
enabled it to more comprehensively serve its customer base. In November 1992,
the Company acquired Word, Incorporated ("Word"), a leading producer and
publisher of Christian music with complementary operations in Christian and
inspirational book publishing. Through the acquisition of Word and the
development of the combined music and book product lines and distribution
channels, the Company has established leading market positions in the Christian
and inspirational book and music businesses, which the Company believes are
among the fastest growing segments within the publishing and recorded music
industries. In March 1994, the Company expanded its gift products line and
related distribution channels through its combination with PPC, Inc. ("Pretty
Paper"), a designer and manufacturer of gift products and collections.

3
<PAGE> 6
In conjunction with the development and acquisition of new product lines,
the Company has significantly expanded its marketing and distribution channels.
In addition to Christian bookstores, the Company distributes its products to
general bookstores, such as B. Dalton Booksellers and Waldenbooks; to mass
market merchandisers, such as Target, K-Mart, WalMart and Sam's Wholesale Club;
and directly to consumers through direct mail, telemarketing and book and record
clubs. Utilizing an extensive direct sales force and independent sales
representatives, the Company sells its products to over 50,000 retail and 90,000
church and religious organization accounts. The Company also distributes its
products internationally in South America, Europe, Australia, New Zealand, South
Africa, the Far East, Mexico and Canada.

The Company believes that there has been increasing societal awareness of
and interest in traditional, Christian and family values, which has contributed
to a growing demand for media, educational and entertainment products and
services that convey these themes. The Company's business strategy seeks to
capitalize on this growing demand by expanding its core publishing, music and
gift product lines, developing and acquiring complementary product lines that
utilize common distribution channels, and expanding the marketing and
distribution of its products through secular channels and in new geographic
markets. The Company is also actively exploring the use of emerging digital,
interactive and multimedia technologies through strategic partnerships and
creative alliances to further capitalize on the commercial potential of its
proprietary content.

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered by the Company:
United States Offering..................... 2,000,000 shares
International Offering..................... 500,000 shares
-----------
Total Offering..................... 2,500,000 shares
-----------
-----------
Shares to be Outstanding After the Offering:
Common Stock............................... 14,869,080 shares
Class B Common Stock....................... 1,085,843 shares
-----------
Total.............................. 15,954,923 shares(1)
-----------
-----------
Voting Rights................................ The Common Stock is entitled to one vote per
share, while the Class B Common Stock is
entitled to ten votes per share. Except for
such voting rights, the Common Stock and the
Class B Common Stock have substantially the
same rights. After completion of this
offering, members of the Board of Directors
and executive officers of the Company will
beneficially own Common Stock and Class B
Common Stock representing approximately 36.1%
of the voting power of the Company. See
"Description of Capital Stock."
Use of Proceeds.............................. To repay a portion of the Company's
outstanding bank debt. See "Use of Proceeds."
Common Stock NYSE Symbol..................... "TNM"
</TABLE>

- ---------------

(1) Does not include (i) 3,235,294 shares of Common Stock issuable upon
conversion of the Company 5 3/4% Convertible Subordinated Notes due 1999
(the "Convertible Notes") and (ii) 330,765 shares reserved for issuance
upon exercise of options outstanding at June 23, 1995, under the Company's
stock option plans.

4
<PAGE> 7

SUMMARY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
MARCH 31, 1995
-------------------------
ACTUAL AS ADJUSTED(3)
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital...................................................... $129,441 $129,441
Total assets......................................................... 249,869 249,869
Long-term debt (including current portion)........................... 121,000 73,202
Shareholders' equity................................................. 72,729 120,527
</TABLE>

- ---------------

(1) Includes the operations of Word subsequent to its acquisition by the Company
on November 30, 1992.
(2) Reflects the impact of the conversion of the outstanding Convertible Notes
into 3,235,294 shares of Common Stock and exercise of stock options, in
periods in which such conversion or exercise would be dilutive.
(3) Adjusted to reflect the sale of the 2,500,000 shares of Common Stock offered
hereby and the proposed application of the estimated net proceeds
therefrom. See "Use of Proceeds."

5
<PAGE> 8

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,500,000 shares of
Common Stock offered hereby are estimated to be approximately $47.8 million
($55.0 million if the Underwriters' over-allotment option is exercised in full),
assuming a public offering price of $20.125 per share.

All of the net proceeds will be used to repay a portion of the borrowings
outstanding under the Company's $100 million bank credit facility (the "Credit
Facility"). Borrowings under the Credit Facility bear interest at either the
prime rate or, at the Company's option, the relevant London Interbank Offered
Rate ("LIBOR") plus 1.5% (7.9% at June 23, 1995). The balance outstanding under
the Credit Facility at May 31, 1997 will be converted into a four year term loan
payable in equal quarterly principal installments thereafter. At June 23, 1995,
the Company had $75.0 million outstanding, and $25.0 million available for
borrowing under the Credit Facility. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources" and Note H of Notes to Consolidated Financial Statements.

PRICE RANGE OF COMMON STOCK AND CLASS B COMMON STOCK

The Common Stock and the Class B Common Stock are traded on the NYSE under
the symbols "TNM" and "TNM.B," respectively. Until June 19, 1995, the Common
Stock and the Class B Common Stock were quoted on the Nasdaq National Market
System under the symbols "TNEL" and "TNELB," respectively. The following table
sets forth, for the periods indicated, the high and low bid prices of the Common
Stock and Class B Common Stock as reported on the Nasdaq National Market System
for each of the quarters indicated through June 16, 1995 and the high and low
sales prices as reported on the NYSE composite tape from June 19, 1995:

CLASS B
COMMON STOCK COMMON STOCK
------------ ----------------
HIGH LOW HIGH LOW
---- ---- ---- ---
<S> <C> <C> <C> <C>
FISCAL 1994:
First quarter............................................. $14 3/8 $12 $14 $12 3/8
Second quarter............................................ 17 5/8 13 5/8 16 3/4 13 5/8
Third quarter............................................. 20 3/4 15 3/4 19 5/8 15 3/4
Fourth quarter............................................ 20 1/4 15 5/8 20 17 1/4
FISCAL 1995:
First quarter............................................. 17 5/8 15 1/4 17 5/8 16 3/8
Second quarter............................................ 16 5/8 14 1/4 16 3/8 14 5/8
Third quarter............................................. 19 1/4 14 1/4 18 3/4 14 5/8
Fourth quarter............................................ 20 3/8 18 3/4 19 3/8 17 5/8
FISCAL 1996:
First quarter (through June 23, 1995)..................... 20 1/4 17 5/8 23 18 1/2
</TABLE>

The Company effected a five-for-four stock split of the Common Stock and
Class B Common Stock in the form of a 25% stock dividend on March 24, 1995. The
prices in the table set forth above have been adjusted to give effect to the
stock dividend.

On June 23, 1995, the last sale prices of the Common Stock and the Class B
Common Stock on the NYSE composite tape were $20 1/8 and $21 3/8, respectively.
As of June 22, 1995, there were 1,149 record holders of the Common Stock and 862
record holders of the Class B Common Stock.

6
<PAGE> 9

DIVIDEND POLICY

Declaration of dividends is within the discretion of the Board of Directors
of the Company. The Board considers the payment of dividends on a quarterly
basis, taking into account the Company's earnings and capital requirements as
well as financial and other conditions existing at the time. Certain covenants
of the Company's credit agreements limit the amount of cash dividends payable
based on the Company's cumulative consolidated net income. See Note H of Notes
to Consolidated Financial Statements. In each quarter in fiscal 1994 and 1995,
the Company paid a cash dividend of $.032 per share on its Common Stock and
Class B Common Stock. On May 24, 1995, the Company declared a cash dividend of
$.04 per share on its Common Stock and Class B Common Stock to be paid on August
14, 1995 to shareholders of record on July 31, 1995.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
March 31, 1995 and as adjusted to reflect the sale of the 2,500,000 shares of
Common Stock offered hereby and the proposed application of the estimated net
proceeds therefrom. See "Use of Proceeds."

<TABLE>
<CAPTION>
AT MARCH 31, 1995
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt (including current portion)(1):
Credit agreements............................................. $ 63,133 $ 15,335
5 3/4% Convertible Subordinated Notes, due in 1999(2)......... 55,000 55,000
Industrial revenue bonds, due through 2005.................... 2,700 2,700
Other......................................................... 167 167
-------- -----------
Total long-term debt........................................ 121,000 73,202
-------- -----------
Shareholders' equity:
Preferred Stock, $1.00 par value, authorized 1,000,000 shares,
none issued................................................. -- --
Common Stock, $1.00 par value, authorized 20,000,000 shares,
issued 12,362,377 shares (issued 14,862,377 shares, as
adjusted)(3)................................................ 12,362 14,862
Class B Common Stock, $1.00 par value, authorized 5,000,000
shares, issued 1,067,094 shares(3).......................... 1,067 1,067
Additional paid-in capital.................................... 18,211 63,509
Retained earnings............................................. 40,538 40,538
Foreign currency translation adjustments...................... 551 551
-------- -----------
Total shareholders' equity.................................. 72,729 120,527
-------- -----------
Total capitalization..................................... $193,729 $ 193,729
======== =========
</TABLE>

- ---------------

(1) For additional information regarding the Company's long-term debt, see Note
H of Notes to Consolidated Financial Statements.
(2) The Convertible Notes are convertible at their principal amount into shares
of Common Stock at any time prior to redemption or maturity at $17.00 per
share, subject to adjustment in certain circumstances. See Note H of Notes
to Consolidated Financial Statements.
(3) Does not include (i) 3,235,294 shares of Common Stock issuable upon
conversion of the Convertible Notes and (ii) 375,765 shares reserved for
issuance upon the exercise of options outstanding at March 31, 1995 under
the Company's stock option plans. See Notes H and J of Notes to
Consolidated Financial Statements.

7
<PAGE> 10

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected statement of income data for the fiscal years ended
March 31, 1995, 1994, 1993 and 1992 and selected balance sheet data at March 31,
1995 have been derived from the consolidated financial statements of the Company
which have been audited by Arthur Andersen LLP. All of this information should
be read in conjunction with the audited consolidated financial statements and
notes thereto contained elsewhere herein and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------
1992 1993(1) 1994 1995
------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net revenues........................................... $98,582 $143,072 $226,434 $265,107
Cost of goods sold..................................... 53,878 74,975 115,201 133,650
------- -------- -------- --------
Gross profit........................................... 44,704 68,097 111,233 131,457
Selling, general and administrative expenses........... 35,144 55,193 89,649 103,614
Amortization of goodwill and non-compete agreements.... 46 718 1,616 1,806
------- -------- -------- --------
Operating income....................................... 9,514 12,186 19,968 26,037
Other income........................................... 411 178 227 897
Interest expense....................................... 1,032 3,027 6,903 8,585
------- -------- -------- --------
Income before income taxes............................. 8,893 9,337 13,292 18,349
Provision for income taxes............................. 3,069 3,055 4,547 6,639
------- -------- -------- --------
Income before cumulative effect of change in accounting
principle............................................ 5,824 6,282 8,745 11,710
Cumulative effect of change in accounting principle for
income taxes......................................... -- -- 336 --
------- -------- -------- --------
Net income............................................. $ 5,824 $ 6,282 $ 9,081 $ 11,710
======= ======== ======== ========
Net income per share:
Income before cumulative effect of change in
accounting principle.............................. $ 0.47 $ 0.47 $ 0.65 $ 0.88
Cumulative effect of change in accounting
principle......................................... -- -- 0.03 --
------- -------- -------- --------
Net income........................................... $ 0.47 $ 0.47 $ 0.68 $ 0.88
======= ======== ======== ========
Weighted average number of shares outstanding.......... 12,500 13,268 13,355 13,374
======= ======== ======== ========
Fully diluted net income per share(2):
Income before cumulative effect of change in
accounting principle.............................. $ 0.47 $ 0.47 $ 0.65 $ 0.83
Cumulative effect of change in accounting
principle......................................... -- -- 0.02 --
------- -------- -------- --------
Net income........................................... $ 0.47 $ 0.47 $ 0.67 $ 0.83
======= ======== ======== ========
</TABLE>

- ---------------

8
<PAGE> 11

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

During the last three fiscal years, the Company's net revenues have grown
at a compound annual rate of approximately 39%. This growth in net revenues has
resulted from increased sales of existing product lines and through the
development and acquisition of new product lines. In November 1992, the Company
acquired Word for approximately $72 million in cash, and in March 1994 acquired
all of the outstanding shares of Pretty Paper in exchange for the issuance of
115,551 shares of the Company's Common Stock. The acquisition of Word was
accounted for using the purchase method of accounting with the excess of the
purchase price over the fair value of the net assets acquired allocated to
goodwill of approximately $31 million. The combination with Pretty Paper was
accounted for as a pooling of interests. See Note B of Notes to Consolidated
Financial Statements.

As a result of the acquisition of Word and the further development of the
combined product lines, there has been a shift in the Company's product revenue
mix with each of music and book products contributing a larger percentage of the
Company's net revenues than Bible products. The broader mix of products has also
enabled the Company to expand its distribution channels from bookstores to mass
market accounts, direct marketing programs, gift stores and specialty retail
stores. The acquisition of Pretty Paper expanded the Company's gift product
lines and distribution network, which enabled the gift division to grow
significantly in fiscal 1995.

This shift in sales mix and distribution channels has positively impacted
the Company's gross profit, as a percentage of net revenues, in each of fiscal
1994 and fiscal 1995. In particular, the increase in music and book products has
enabled the Company to increase sales through direct marketing. Sales through
direct marketing typically produce a higher gross margin than sales through
other distribution channels. The increase in the Company's gross margins
resulting from these factors has been partially offset by increased sales to
mass merchandisers. These customers typically earn volume discounts due to the
significantly larger quantities purchased as compared to the typical bookstore;
however, sales to mass merchandisers have relatively lower selling and marketing
costs than sales through other distribution channels.

The following table sets forth for the periods indicated certain selected
statement of income data of the Company expressed as a percentage of net
revenues and the percentage change in dollars of such data from the prior fiscal
year.

<TABLE>
<CAPTION>
FISCAL YEAR TO YEAR
YEAR ENDED MARCH 31, INCREASE
----------------------- ---------------------------
1995 1994 1993 1994 TO 1995 1993 TO 1994
----- ----- ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
NET REVENUES:
Publishing:
Book......................................... 32.8% 34.0% 33.9% 12.9% 58.7%
Bible........................................ 22.0 23.5 33.0 10.0 12.4
----- ----- -----
Total publishing.......................... 54.8 57.5 66.9 11.7 35.9
Music.......................................... 33.8 32.2 17.7 22.9 188.1
Gift........................................... 9.6 8.8 13.0 27.1 7.2
Other.......................................... 1.8 1.5 2.4 38.7 0.9
----- ----- -----
Total net revenues........................ 100.0 100.0 100.0 17.1 58.3
EXPENSES:
Cost of goods sold............................. 50.4 50.9 52.4 16.0 53.7
Selling, general and administrative expenses... 39.1 39.6 38.6 15.6 62.4
Amortization of goodwill and non-compete
agreements................................... 0.7 0.7 0.5 11.8 125.1
----- ----- -----
Total expenses............................ 90.2 91.2 91.5 15.8 57.7
----- ----- -----
Operating income............................... 9.8 8.8 8.5 30.4 63.9
Income before income taxes..................... 6.9 5.9 6.5 38.0 42.4
Income before cumulative effect of accounting
change....................................... 4.4 3.9 4.4 33.9 39.2
Net income..................................... 4.4 4.0 4.4 28.9 44.6
</TABLE>

9
<PAGE> 12

The Company's net revenues fluctuate seasonally, with net revenues in the
second and third fiscal quarters historically being greater than those in the
first and fourth fiscal quarters. This seasonality is the result of increased
consumer purchases of the Company's products during the traditional year-end
holidays. Due to this seasonality, the Company has historically incurred a loss
during the first quarter of each fiscal year. In addition, the Company's
quarterly operating results may fluctuate significantly due to the seasonality
of new product introductions, the timing of selling and marketing expenses and
changes in sales and product mixes. See Note N of Notes to Consolidated
Financial Statements.

RESULTS OF OPERATIONS

Fiscal 1995 compared to Fiscal 1994

Net revenues for fiscal 1995 increased by $38.7 million or 17.1% over
fiscal 1994 primarily due to volume increases arising from the introduction of
new products in each of the Company's product lines. Net revenues increased for
fiscal 1995 over fiscal 1994 as follows: music products increased by $16.7
million or 22.9%; book products increased by $9.9 million or 12.9%; Bible
products increased by $5.3 million or 10.0%; and gift products increased by $5.4
million or 27.1%. Price increases did not have a material effect on net
revenues.

The Company's cost of goods sold in fiscal 1995 increased by $18.4 million
or 16.0% over fiscal 1994 and, as a percentage of net revenues, decreased
slightly to 50.4% in fiscal 1995 from 50.9% in fiscal 1994. The slight decrease
in cost of goods sold, as a percentage of net revenues, resulted from a change
in the mix of product types and distribution channels. During fiscal 1995, the
Company derived a greater percentage of its net revenues from direct marketing
which typically has higher gross margins than sales through other distribution
channels, and higher music sales as a percentage of total sales, which also have
greater gross margins than other product types.

Selling, general and administrative expenses for fiscal 1995 increased by
$14.0 million or 15.6% over fiscal 1994. These expenses, expressed as a
percentage of net revenues, decreased slightly to 39.1% in fiscal 1995 from
39.6% in fiscal 1994 primarily as a result of volume increases and from cost
savings resulting from the consolidation of certain operational departments.
This improvement was partially offset by increased sales through direct
marketing programs, which have relatively higher selling and marketing costs
than sales through other distribution channels.

Other income for fiscal 1995 increased by $0.7 million over fiscal 1994 due
to a gain on the sale of substantially all of the assets of a bindery plant in
Camden, New Jersey. See Note B of Notes to Consolidated Financial Statements.

Interest expense for fiscal 1995 increased $1.7 million or 24.4% over
fiscal 1994 due to increased borrowings and an increase in interest rates.

The Company's effective tax rate in fiscal 1995 was 36.2% as compared to
34.2% for fiscal 1994. This increase resulted from an increase in the statutory
federal tax rate and proportionately more income in states and foreign countries
with higher effective tax rates. See Note M of Notes to Consolidated Financial
Statements.

Fiscal 1994 compared to Fiscal 1993

Net revenues for fiscal 1994 increased by $83.4 million or 58.3% over
fiscal 1993. This increase was due to volume increases associated with the
acquisition of Word, whose results of operations were included in all of fiscal
1994 as compared to four months in fiscal 1993, as well as the introduction of
new products and distribution channels. Net revenues increased for fiscal 1994
over 1993 as follows: music products increased by $47.7 million or 188.1%; book
products increased by $28.5 million or 58.7%; Bible products increased by $5.9
million or 12.4%; and gift products increased by $1.3 million or 7.2%. Price
increases did not have a material effect on net revenues.

The Company's cost of goods sold in fiscal 1994 increased by $40.2 million
or 53.7% over fiscal 1993 and, as a percentage of net revenues, decreased to
50.9% in fiscal 1994 from 52.4% in fiscal 1993. The decrease in

10
<PAGE> 13

cost of goods sold, as a percentage of net revenues, resulted from changes in
the mix of products and distribution channels as well as improved purchasing
power as a result of the combined operations of the Company and Word.

Selling, general and administrative expenses for fiscal 1994 increased by
$34.5 million or 62.4% over fiscal 1993. These expenses, expressed as a
percentage of net revenues, increased to 39.6% in fiscal 1994 from 38.6% in
fiscal 1993. These increases were primarily due to changes in the mix of
products and distribution channels from the prior year and Word's higher
selling, general and administrative expenses as a percentage of net revenues.

Amortization of goodwill and non-compete agreements in fiscal 1994
increased by $0.9 million over fiscal 1993 due to the acquisition of Word.
Interest expense in fiscal 1994 increased by $3.9 million over fiscal 1993 due
to increased borrowings used for working capital needs and a full year of
borrowings incurred in connection with the acquisition of Word, compared to four
months in fiscal 1993.

The Company's effective tax rate in fiscal 1994 was 34.2% as compared to
32.7% in fiscal 1993. This increase resulted from an increase in the statutory
federal tax rate, proportionately more income in states and foreign countries
with higher effective tax rates, and additional non-deductible goodwill
amortization as a result of the acquisition of Word. See Note M of Notes to
Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

The primary sources of liquidity to meet the Company's future obligations
and working capital needs are cash generated from operations and borrowings
available under bank credit facilities. At March 31, 1995, the Company had
working capital of $129.4 million. At June 23, 1995, the Company had $75.0
million outstanding, and $25.0 million available for borrowing, under its credit
facilities. The Company intends to use the net proceeds from this offering to
repay a portion of the outstanding borrowings under the Credit Facility.

Net cash used in operating activities was $9.0 million, $0.3 million and
$1.3 million in fiscal 1995, 1994 and 1993, respectively. The increase in cash
used in operations during fiscal 1995 was principally attributable to the
increase in accounts receivable and prepaid expenses. Net accounts receivable
increased by $27.1 million primarily as a result of a 31.7% increase in net
revenues in the fourth quarter of fiscal 1995 as compared to the prior year
period and increased sales through those distribution channels which typically
have slightly longer payment periods for receivables. Prepaid expenses increased
by $9.3 million principally because of increased royalty advances and advance
production costs related to the signing and re-signing of certain key authors
and artists during the year and an increase in direct marketing sales, which
resulted in an increase in prepaid direct marketing costs in connection with the
addition of new club members. As a result of the Company's focus on inventory
management, inventories increased by only $2.4 million in fiscal 1995, which did
not materially impact the Company's working capital requirements.

During fiscal 1995, capital expenditures totaled approximately $2.2
million. The majority of this amount related to capital expenditures for
computer equipment and leasehold improvements. In fiscal 1996, the Company
anticipates capital expenditures of approximately $3 million, consisting of
warehouse improvements and purchases of in-store promotional fixtures and
computer equipment.

The Company's bank credit facilities are unsecured and consist of the $100
million Credit Facility and a $5 million credit facility (collectively, the
"Credit Agreements"). Balances outstanding under the Credit Facility at May 31,
1997 will be converted into a four-year term loan payable in equal quarterly
principal installments thereafter. The Credit Facility bears interest at either
the prime rate or, at the Company's option, LIBOR plus 1.50%, subject to
adjustment based on certain financial ratios. The $5 million credit facility
bears interest at the prime rate and matures on July 31, 1996. Under the terms
of the Credit Agreements, the Company has agreed to limit the payment of
dividends and to maintain certain interest coverage, fixed charge coverage and
debt-to-total capital ratios. Due to the seasonality of the Company's business,
borrowings under the Credit Agreements typically peak during the third quarter
of the fiscal year.

11
<PAGE> 14

The Company also has outstanding $55 million of 5 3/4% Convertible
Subordinated Notes due November 30, 1999. The Convertible Notes presently are
convertible into Common Stock at $17.00 per share and are redeemable at the
Company's option on or after November 30, 1995 at 103.29% of the principal
amount, declining annually thereafter to 100% on November 30, 1999.

Management believes cash generated by operations and borrowings available
under the Credit Agreements will be sufficient to fund anticipated working
capital requirements for existing operations through fiscal 1996. Although the
Company has no present definitive agreements or agreements in principle with
respect to any acquisitions, the Company's growth strategy includes strategic
acquisitions using stock, cash, debt or a combination thereof. Depending on the
terms of any such acquisition, the Company may need to incur additional
indebtedness or issue additional equity securities.

12
<PAGE> 15

BUSINESS

The Company is a leading publisher, producer and distributor of books and
recorded music emphasizing Christian, inspirational and family value themes, and
believes it is the largest commercial publisher of the Bible in English language
translations. The Company also designs and markets a broad line of gift and
stationery products. The Company believes it is the largest publisher of
Christian and inspirational books and the largest producer of recorded Christian
music in the United States.

The following table sets forth the net revenues (in thousands) and the
percentage of total net revenues for each of the Company's principal product
lines for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
----------------------------------------------------------
1995 1994 1993
---------------- ---------------- ----------------
AMOUNT % AMOUNT % AMOUNT %
-------- ----- -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Publishing:
Book.......................... $ 86,894 32.8 $ 76,985 34.0 $ 48,507 33.9
Bible......................... 58,395 22.0 53,073 23.5 47,208 33.0
-------- ----- -------- ----- -------- -----
Total publishing........... 145,289 54.8 130,058 57.5 95,715 66.9
Music........................... 89,676 33.8 72,969 32.2 25,324 17.7
Gifts........................... 25,337 9.6 19,942 8.8 18,599 13.0
Other........................... 4,805 1.8 3,465 1.5 3,434 2.4
-------- ----- -------- ----- -------- -----
$265,107 100.0 $226,434 100.0 $143,072 100.0
======== ===== ======== ===== ======== =====
</TABLE>

STRATEGY

PUBLISHING

Books

The Company's book publishing division publishes and distributes hardcover
and trade paperback books emphasizing Christian, inspirational and family value
themes. The Company believes it is the largest publisher of Christian and
inspirational books in the United States. Books are published by the Company
under the "Nelson" and "Word" imprints and consist generally of inspirational
and personal experience books, and educational, trade and reference books
emphasizing Christian, inspirational and family value themes. The Company
distributes books primarily through Christian bookstores, general bookstores,
mass merchandisers and directly to consumers. The Company also distributes books
published by other companies to complement their marketing and distribution
capabilities. In fiscal 1995, approximately 17% of the book division's net
revenues related to the distribution of books published by other companies.

In each of the last three fiscal years, the Company has published over 300
new titles. The Company publishes some of the most well-known communicators in
the Christian and inspirational field, including Chuck Colson, James Dobson,
Billy Graham, Benny Hinn, Barbara Johnson, Max Lucado, Frank Peretti, Pat
Robertson, Robert Schuller, Gary Smalley, Charles Stanley, Charles Swindoll, and
Bodie and Brock Thoene. The Company also publishes books emphasizing positive
and inspirational themes by famous athletes and celebrities, such as Bobby
Bowden, Hugh Downs, Joe Gibbs, Evander Holyfield, Bill McCartney, Tom

13
<PAGE> 16

Osborn, Nolan Ryan and Zig Ziglar. In each of the last three fiscal years, the
Company published over 50% of the top ten best selling Christian and
inspirational books based on the monthly Bookstore Journal Christian Hardbound
Bestsellers' Lists. In addition, the Company maintains a backlist of
approximately 1,400 titles which provide a stable base of recurring revenues as
many popular titles continue to generate significant sales from year to year.
Backlist titles accounted for approximately 60% of the book division's net
revenues in fiscal 1995. Authors and titles are supported through the use of
radio, television, cooperative advertising, author appearances, in-store
promotions, direct mail catalogs, book clubs and other means.

The Company's book publishing business is enhanced by the breadth and
development of its marketing and distribution channels. In addition to enhancing
sales of its products, the Company believes its ability to sign and renew
contracts with popular authors is improved because the Company's marketing and
distribution capabilities provide exposure for the author's books to a broader
audience than its competitors. See "-- Marketing, Distribution and Production."

Bibles

The Company believes it is the largest commercial publisher of English
translations of the Bible. The Bible is based on ancient manuscripts which are
the surviving reproductions of the original writings. These manuscripts, written
in Hebrew, Aramaic or Greek, have been translated into English and other modern
languages by biblical scholars and theologians, generally under the auspices of
a major Bible society or translation organization. Each of the many English
translations available differs in some degree from the others, primarily because
of different translation guidelines and principles used as the basis for each
translation. The distinctiveness of each translation is also, in part, a result
of the evolution of the meaning and use of words within the English language.

Virtually all Bibles and Bible products currently published in the United
States are based on one of ten major translations. Of these ten translations,
nine are protected by copyright laws which grant the copyright owner the
exclusive right, for a limited term, to control the publication of such
translation. The Company publishes Bibles and Bible products based on nine of
the ten major translations, of which four are exclusive to the Company as a
result of copyright ownership or licensing arrangements. Approximately 60% of
the Company's net revenues from Bible publishing in fiscal 1995 were generated
through sales of its proprietary Bible products.

The following table sets forth the nine major Bible translations currently
published by the Company:

<TABLE>
<CAPTION>
DATE FIRST PROPRIETARY
TRANSLATION PUBLISHED TO THE COMPANY
-------------------------------------------------------------- ---------- --------------
<S> <C> <C>
King James Version (KJV)...................................... 1611 No
New American Bible (NAB)...................................... 1970 No
The Living Bible (TLB)........................................ 1971 No
New American Standard Bible (NAS)............................. 1972 No
Today's English Version (TEV)................................. 1976 Yes
New King James Version (NKJV)................................. 1982 Yes
New Century Version (NCV)..................................... 1984 Yes
New Revised Standard Version (NRSV)........................... 1990 No
Contemporary English Version (CEV)............................ 1995 Yes
</TABLE>

The KJV, currently published in its fourth revision, is the best selling of
all English translations of the Bible. In 1975, the Company commissioned the
fifth revision of the KJV resulting in the publication of the NKJV in 1982. The
NKJV and NCV are the third and fourth best selling Bible translations in the
United States, respectively. Among the Company's new products is the CEV,
translated under the auspices of the American Bible Society, which is designed
to be easy to read and understandable at virtually any reading level. The new
testament portion of the CEV was first published by the Company in 1991 and the
complete CEV Bible was released in June 1995.

14
<PAGE> 17

The Company continually seeks to expand its Bible product line by
developing or aiding in the development of new translations and editions and
seeking new publishing opportunities. The Company also continually makes
editorial, design and other changes to its existing line of Bibles and other
Bible products in an effort to increase their marketability. The Company
currently publishes over 1,200 different biblical reference products such as
commentaries, study guides and other popular Bible help texts. Styles range from
inexpensive paperbacks to deluxe leather-bound Bibles. Different editions of a
particular Bible translation are created by incorporating extra material, such
as study helps, concordances, indices and Bible outlines, or artwork, into the
biblical text. These editions (which are generally proprietary to the Company
regardless of whether or not the Company holds proprietary rights to the
underlying Bible translation) are targeted to the general market or positioned
for sale to specific market segments.

MUSIC

The Company believes it is the leading producer, distributor and publisher
of Christian and inspirational music in the United States. The Company's music
division produces a wide variety of traditional and contemporary Christian and
inspirational music, such as gospel, praise and worship, and adult contemporary,
as well as pop, country, rock, rhythm and blues, rap and metal with an emphasis
on positive, inspirational and family value themes. In addition, the music
division produces master recordings of classical music, the Bible on cassette,
children's music and video, and other products, and is a leading supplier of
value priced Christmas music to mass market, convenience and specialty stores.

The Company produces recorded music and related products under seven
proprietary recording labels and in fiscal 1995 released 90 new titles. Each
label is managed and operated by its own staff within the music division. Over
50 recording artists are currently under contract for future releases. Artists
under contract with the Company include Anointed, Helen Baylor, Shirley Caesar,
Bryan Duncan, Amy Grant, Sandi Patty, Petra, and Point of Grace. In 1993 and
1994, the Company had under exclusive contract the artists (Cindy Morgan and
Point of Grace, respectively) named "New Artist of the Year" by the Gospel Music
Association. In 1995, the Company's artists received ten Dove Awards, the
Christian music industry's annual awards for outstanding artists and releases
sponsored by the Gospel Music Association.

As is customary in the recording industry, contractual arrangements with
recording artists provide for the artist to receive as a royalty a percentage of
the suggested retail price of recorded products sold. Most artists receive
advance payments against future royalties earned. The Company enters into
exclusive multi-record agreements with its recording artists. During fiscal
1995, the Company renewed recording contracts with all major artists whose
contracts expired during the period.

The Company also distributes recordings for other companies under their
recording labels pursuant to exclusive distribution agreements. Owners of these
third party labels contract with the Company for the distribution of products
typically on an exclusive basis to Christian markets worldwide. In fiscal 1995,
approximately 26% of the music division's net revenues were attributable to
products distributed under recording labels owned or controlled by other
companies.

In addition to producing and distributing recorded music, the Company
operates a music publishing business engaged in songwriter development, print
music publishing and copyright administration. The Company has approximately 50
songwriters under contract who write for the Company's recording artists and for
licensing to independent organizations for print and recording products.
Contracts in the music publishing business range from exclusive songwriters'
arrangements to co-publishing agreements to copyright administration agreements.
The Company prints and distributes church hymnals, choral music, instrumental
music, vocal folios and solo tracks for churches and other religious
organizations. The copyright administration area oversees the Company's music
catalog of approximately 40,000 copyrighted songs which are licensed to
independent publishers, record companies, churches and other organizations.

15
<PAGE> 18

GIFTS

The Company established a gift division in fiscal 1989 to develop and
market gift and stationery items and other products for social expression. In
fiscal 1994, the gift division was expanded through the Company's combination
with Pretty Paper. Current product lines offered by the Company include 80
collections and over 800 separate items, such as journals and blank books,
diaries, address books, photo albums, gift bags, calendar and desk sets, baby
gifts, kitchen accessories, and stationery.

Products are marketed under the Markings(TM), Pretty Paper(R) and Markings
Inspirations(TM) brand names, the latter of which incorporates Christian and
inspirational text or themes. Certain product lines are marketed as collections,
with each collection including a variety of products featuring a common design
or theme. Designs include original art work licensed from artists such as Sam
Butcher, Carol Endres, Larry Stephenson and Susan Wheeler and classic oriental,
tapestry and country print fabric designs.

The Company believes the gift division has significant opportunities for
growth as a result of the range of complementary gift categories not offered
currently and the breadth of the Company's existing and potential distribution
channels. The Company sells its gift products through its primary market
channels, including Christian bookstores, general bookstores and mass
merchandisers, as well as through independent and chain gift and specialty
stores, such as Hallmark stores.

ROYAL MEDIA

In fiscal 1995, the Company formed the Royal Media division to evaluate and
implement new initiatives in the use of alternative forms of media and new
distribution technologies to further capitalize on the commercial potential of
the Company's intellectual properties. The Royal Media division includes the
existing operations of the Royal Magazine Group and the Morningstar Radio
Network. To date, revenues from the Royal Media division have not been
significant to the Company's operations.

The Company complements its publishing, music and gift operations with the
publication of four periodicals under the Royal Magazine Group tradename.
Aspire, the Company's first newsstand-distributed magazine, covers a broad range
of Christian lifestyle issues and features celebrities such as Kathie Lee
Gifford, John Tesh and Amy Grant. A Better Tomorrow, a magazine designed for
mature readers, received the 1994 Award of Excellence from the Evangelical Press
Association. The Company also publishes two controlled circulation journals:
Release, which features Christian recording artists and targets the Christian
music industry; and Release Ink, which features Christian authors and targets
the Christian book industry. These four periodicals, marketed by the Company's
sales force directly to consumers and to Christian and general bookstores,
achieved combined bi-monthly circulation in excess of 400,000 copies in fiscal
1995.

The Royal Media division also operates the Morningstar Radio Network, a
24-hour satellite delivered, digital network featuring adult contemporary
Christian music and "High Country" programming formats. At the end of fiscal
1995, the Morningstar Radio Network was broadcast on 138 affiliate stations in
130 cities nationwide. This network generates revenues through the sale of
commercial airtime to advertisers and through affiliate fees and also provides
significant exposure for the Company's products, artists and authors.

The Company also is actively exploring the use of emerging digital,
interactive and multimedia technologies, including on-line services, CD-ROM
multimedia and electronic products, as well as television and video production
and broadcasting, through strategic partnerships and creative alliances to
further capitalize on the commercial potential of its proprietary content. There
can be no assurance, however, that the Company will successfully develop or
commercialize products for these mediums.

MARKETING, DISTRIBUTION AND PRODUCTION

The principal market channels through which the Company markets its
products domestically are Christian bookstores, which are primarily
independently owned; general bookstores, including national chains such as B.
Dalton Booksellers and Waldenbooks; mass merchandisers such as Target, K-Mart,
WalMart and Sam's Wholesale Club; and directly to consumers through direct mail,
telemarketing and book and record clubs. The Company also markets its products
through other market channels, such as gift, specialty retail and convenience
stores. The Company services these market channels through its sales force, and
through wholesalers or jobbers servicing bookstores, gift stores, convenience
stores, other retail outlets and libraries.

16
<PAGE> 19

Certain recorded music products are also distributed to the secular markets
pursuant to a domestic distribution agreement with a major record distribution
company. In addition, the Company sells certain of its products for promotional
purposes and sells specially designed or imprinted products to certain
customers.

The Company's direct marketing operations sell religious and inspirational
products directly to consumers through a variety of direct marketing methods,
including direct mail, continuity programs (selling a series of products over
time) and the Company's book and record clubs. The Company's book and record
clubs include the Word Family Record and Tape Club, which has approximately
300,000 members and features contemporary, traditional and gospel music, and its
Book Club, Children's Record Club, Children's Book Club and Continuity Programs,
which have a combined membership of approximately 200,000 members. The Company
also sells products directly to churches and religious organizations by direct
mail and telemarketing. The Company markets academic and contemporary books,
hymnals, choral music, trade books and recorded music to approximately 90,000
churches, other religious organizations and pastors. Retail sales also are made
during the summer months on a door-to-door, cash sales basis through a student
sales organization operated by the Company.

As of March 31, 1995, the Company employed a sales force of approximately
160 people. In addition, the Company contracts with approximately 120
independent sales representatives, who work on a commission basis, and maintains
a 24-hour-a-day telemarketing capability to serve these accounts. These
employees and sales representatives service over 50,000 retail accounts and
90,000 church and religious organization accounts. Customer orders are usually
shipped through a variety of common carriers, as well as by UPS, RPS and parcel
post. No single customer accounted for more than 10% of net revenues during
fiscal 1995.

The Company contracts with a number of foreign publishers to translate the
Company's English titles to foreign languages. The Company typically retains
ownership rights to the titles translated. Over 200 of the titles released by
the Company in fiscal 1995 were translated into foreign languages.

The Company distributes its products internationally in South America,
Europe, Australia, New Zealand, South Africa, the Far East, Mexico and Canada.
In fiscal 1995, the Company's international and export operations accounted for
approximately 9% of the Company's total net revenues.

Substantially all of the Company's products are manufactured by domestic
and foreign commercial printers, binders and manufacturers which are selected on
the basis of competitive bids. The Company may contract separately for paper and
certain other supplies used by its manufacturers.

COMPETITION

The Company believes that it is the largest publisher of Christian and
inspirational books, the largest commercial publisher of Bibles in English
language translations and the leading producer, distributor and publisher of
Christian and inspirational music in the United States. The publishing and music
divisions each compete with numerous other companies that publish and distribute
Christian and inspirational books and/or music, many of which have significantly
longer operating histories and larger revenue bases than the Company and certain
of which are tax-exempt organizations. While the Company's prices are comparable
to those of its competitors, the Company believes that its breadth of product
line, established market channels, established sales forces and customer
service, give it a competitive advantage.

The most important factor with respect to the Company's competitive
position is the contractual relationships it establishes and maintains with
authors and recording artists. The Company competes with other book publishing,
record and music publishing companies, both Christian and secular, for signing
top authors, artists and songwriters, and for discovering new talent. The
Company's ability to sign and re-sign popular authors, recording artists and
successful songwriters depends on a number of factors, including distribution
and marketing capabilities, the Company's management team and the royalty and
advance arrangements offered. The Company believes its relationships with its
authors, artists and songwriters, which are based on its reputation in the book
publishing, recording and music publishing industries, its marketing experience
and its management expertise give it a competitive advantage in signing and
maintaining contracts with top Christian and inspirational authors, artists and
songwriters.

In the gift product line, the Company competes with numerous other
companies, many of which have significantly longer operating histories and
larger revenue bases.

17
<PAGE> 20

MANAGEMENT

Following is certain information regarding the executive officers and
directors of the Company:

<TABLE>
<CAPTION>
DIRECTOR/OFFICER
NAME AGE SINCE POSITION WITH THE COMPANY
- ------------------------------------ --- ---------------- ------------------------------------------
<S> <C> <C> <C>
Sam Moore(1)........................ 64 1961 Chairman of the Board of Directors, Chief
Executive Officer and President and
Director
S. Joseph Moore..................... 32 1995 Executive Vice President
Joe L. Powers....................... 49 1980 Executive Vice President and Secretary
Charles Z. Moore.................... 61 1983 Senior Vice President, International
Ray Capp............................ 42 1995 Senior Vice President, Operations
Roland Lundy........................ 45 1993 President, Word Records and Music Division
Byron O. Williamson................. 49 1993 President, Word Publishing Division
Vance Lawson........................ 36 1988 Vice President, Finance
Stuart A. Heaton.................... 39 1989 Vice President and General Counsel
Phyllis E. Williams................. 47 1988 Treasurer
Brownlee O. Currey, Jr.(3).......... 65 1984 Director
W. Lipscomb Davis, Jr.(2)........... 65 1984 Director
Robert J. Niebel, Sr.(2)............ 56 1973 Director
Millard V. Oakley(2)................ 64 1972 Director
Joe M. Rodgers(3)................... 60 1992 Director
Cal Turner, Jr.(1).................. 54 1991 Director
Andrew J. Young(1).................. 62 1993 Director
</TABLE>

- ---------------

(1) Term expires at the 1995 Annual Meeting of Shareholders
(2) Term expires at the 1996 Annual Meeting of Shareholders
(3) Term expires at the 1997 Annual Meeting of Shareholders

Except as indicated below, each director and executive officer has been an
employee of the firm(s) listed below as his principal occupation for more than
the past five years.

Sam Moore has been the Chairman of the Board, Chief Executive Officer,
President and a Director of the Company since its founding in 1961.

S. Joseph Moore was appointed Executive Vice President of the Company in
1995, and, prior to such appointment, he served as Divisional Vice President of
the Company in various capacities since 1991. S. Joseph Moore is the son of Sam
Moore.

Joe L. Powers was appointed Executive Vice President of the Company in 1995
and has been the Secretary of the Company since 1990. Previously, Mr. Powers
served as a Vice President of the Company since 1980.

Charles Z. Moore has been a Vice President of the Company since 1983 and
was appointed Senior Vice President, International in 1986. Charles Moore is the
brother of Sam Moore.

Ray Capp was appointed Senior Vice President, Operations of the Company in
1995. Prior to joining the Company, Mr. Capp was the President and Chief
Operating Officer of Ingram Merchandising Services and Assistant to the Chairman
of Ingram Distribution, Inc. since 1992 and Executive Vice President and Chief
Operating Officer of Ingram Entertainment from 1987 to 1992.

Roland Lundy has been the President of the Company's Word Records and Music
Division since 1993. Mr. Lundy was formerly President of Word since 1989.

Byron O. Williamson has been the President of the Company's Word Publishing
Division since 1993. Mr. Williamson was formerly Executive Vice President of
Word Publishing since 1988.

Vance Lawson has been the Vice President, Finance of the Company since
1993. Mr. Lawson was formerly Vice President of Finance and Operations at Word
since 1988.

18
<PAGE> 21

Stuart A. Heaton has been the Vice President and General Counsel of the
Company since 1991. Previous to that time, Mr. Heaton served as the Company's
corporate counsel since 1989.

Phyllis E. Williams has been the Treasurer of the Company since 1992. Mrs.
Williams was previously Controller for the Company since 1988.

Brownlee O. Currey, Jr. is the Chairman of the Board and President of the
Nashville Banner Publishing Company, a newspaper company, a Director of OCC,
Inc., the principal subsidiary of Osborn Communications Corporation, a
diversified media company, and A+ Communications Inc., a provider of paging
communications and telemessaging services.

W. Lipscomb Davis, Jr. is a Partner of Hillsboro Enterprises, an investment
company, and a Director of Third National Bank, a Tennessee bank, American
General Corporation, an insurance holding company, and Genesco, Inc., a consumer
products company.

Robert J. Niebel is the Senior Vice President of 20th Century Christian,
Inc., a publishing company.

Millard V. Oakley is a businessman managing private investments.

Joe M. Rodgers is the Chairman of the JMR Group (investments), a Director
of AMR Corporation, an airline, BellSouth Telecommunications, a
telecommunications company, Gaylord Entertainment Company, a diversified
entertainment and communications company, Gryphon Holding, Inc., an insurance
company, LaFarge Corp., a cement and construction materials company, and Willis
Corroon plc, an insurance holding company. Mr. Rogers previously was the
Chairman and CEO of Berlitz International from December 1991 until February
1993.

Cal Turner, Jr. is the Chairman and Chief Executive Officer of Dollar
General Corp., an operator of general merchandise stores, and a Director of
First American Corporation, a Tennessee bank holding company, and Shoney's,
Inc., a national restaurant company.

Andrew J. Young is the Vice President of Law Companies Group, an
engineering company, Chairman of the Atlanta Commission for Olympic Games, and a
Director of Delta Airlines and Host Marriott Corporation, a lodging company. Mr.
Young previously served as the Mayor of Atlanta, Georgia from 1980 to 1990.

DESCRIPTION OF CAPITAL STOCK

The Company is authorized to issue 26,000,000 shares of capital stock,
consisting of 20,000,000 shares of Common Stock, $1.00 par value, 5,000,000
shares of Class B Common Stock, $1.00 par value, and 1,000,000 shares of
Preferred Stock, $1.00 par value. At March 31, 1995, there were 12,362,377
shares of Common Stock outstanding, 1,067,094 shares of Class B Common Stock
outstanding and no shares of Preferred Stock outstanding.

The following summary is qualified in its entirety by reference to the
Company's Amended and Restated Charter, which sets forth the full rights, powers
and limitations of each class of the Company's capital stock.

COMMON STOCK AND CLASS B COMMON STOCK

Voting. The voting rights, powers and limitations of the shares of Common
Stock are identical in all respects with those of the shares of the Class B
Common Stock, except that each holder of Common Stock is entitled to one vote
for each share of such stock held on all matters submitted to the shareholders
and each holder of Class B Common Stock is entitled to ten votes for each share
of such stock held on all such matters. Except as otherwise provided by law, all
actions submitted to a vote of shareholders are voted on by holders of Common
Stock, Class B Common Stock and Preferred Stock, voting together as a single
class. Shareholders of the Company do not have the right to cumulate votes in
the election of directors.

At March 31, 1995, Class B Common Stock represented 7.9% of the Company's
outstanding equity, but had 46.3% of the voting power of the Company's
outstanding capital stock. The Company's Amended and Restated Charter provides
that, subject to certain exceptions, the affirmative vote of two-thirds of the

19
<PAGE> 22

outstanding capital stock of the Company, voting together as a class, is
required to approve certain actions, including an amendment to the Company's
charter or bylaws, merger, consolidation, sale of all or substantially all of
the Company's assets, dissolution or removal of a director. The holders of Class
B Common Stock currently have the ability to prevent such actions requiring a
two-thirds vote of shareholders (assuming (i) no change in the total number of
shares of capital stock currently outstanding and (ii) that all shares of Class
B Common Stock vote together).

Dividends and Other Distributions. Subject to the rights of holders of
Preferred Stock and other provisions of the Amended and Restated Charter,
holders of Common Stock and Class B Common Stock, treated together as a single
class, are entitled to receive such dividends and other distributions in cash,
stock or property of the Company when and as declared by the Board of Directors
out of assets or funds legally available therefor. In the event of a
liquidation, dissolution or winding up of the Company, holders of Common Stock
and Class B Common Stock have the right to a ratable portion with the Preferred
Stock of the assets remaining after payment of all liabilities and any
liquidation preferences of outstanding Preferred Stock, Common Stock and Class B
Common Stock, if any. Under the Credit Agreements, the Company is restricted as
to the payment of cash dividends. See "Dividend Policy."

Other Matters. The holders of Common Stock and Class B Common Stock have
no preemptive rights and are not subject to future calls or assessments by the
Company. Shares of Class B Common Stock are convertible at the option of the
holder thereof, and without cost to the shareholder, into shares of Common Stock
on a share-for-share basis. Shares of Class B Common Stock so converted shall
become authorized but unissued shares to be disposed of by resolution of the
Board of Directors of the Company. Common Stock is not convertible into Class B
Common Stock. All outstanding shares of Common Stock and Class B Common Stock
are fully paid and non-assessable.

It is expected that the voting rights of the Class B Common Stock may make
the Company less attractive as the potential target of a hostile tender offer,
proxy contest or other proposal to acquire the stock or business of the Company,
and merger proposals might be rendered more difficult, even if such actions
would be in the best interests of the holders of the Common Stock. Accordingly,
increases in the market price of the Common Stock, temporary or otherwise, which
might result from actual or rumored hostile takeover attempts, will be
inhibited. The Company is not aware of any pending effort by any person to
acquire control of the Company or to change its management or to propose to
enter into any transaction of the type to which reference is made above.

PREFERRED STOCK

The Company is authorized to issue 1,000,000 shares of Preferred Stock,
$1.00 par value, in one or more series, and to designate the rights,
preferences, limitations and restrictions of and upon shares of each series,
including voting, redemption and conversion rights. The Board of Directors also
may designate dividend rights and preferences in liquidation. It is not possible
to state the actual effect of the authorization and issuance of Preferred Stock
upon the rights of holders of Common Stock and Class B Common Stock until the
Board of Directors determines the specific terms, rights and preferences of a
series of Preferred Stock. However, such effects might include, among other
things, restricting dividends on the Common Stock and Class B Common Stock,
diluting the voting power of the Common Stock and Class B Common Stock, or
impairing liquidation rights of such shares without further action by holders of
Common Stock or Class B Common Stock. In addition, under certain circumstances,
the issuance of Preferred Stock may render more difficult or tend to discourage
a merger, tender offer or proxy contest, the assumption of control by a holder
of a large block of the Company's securities or the removal of incumbent
management. No shares of Preferred Stock are currently outstanding.

20
<PAGE> 23

DESCRIPTION OF CERTAIN PROVISIONS OF THE CHARTER AND BYLAWS OF THE COMPANY

In addition to the existence of the Class B Common Stock and the
authorization of Preferred Stock, the Company's Amended and Restated Charter and
the Amended Bylaws contain provisions that tend to make more difficult the
acquisition of control of the Company by means of a tender offer, open market
purchases, proxy fight or otherwise. These provisions are intended to discourage
certain types of coercive takeover practices and inadequate takeover bids and to
encourage persons seeking to acquire control of the Company first to negotiate
with the Company. The Company believes that the benefits of increased protection
of its potential ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to take over or restructure the Company outweigh the
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals could result in an improvement of their terms.

Classified Board and Shareholder Actions. The Company's Amended and
Restated Charter and Amended Bylaws provide for a Board of Directors that is
divided into three classes of as equal size as possible, serving staggered
three-year terms. The number of directors is to be fixed from time to time by a
vote of 75% of the members of the Board, but such number shall not be less than
three nor more than 15. The vote of 75% of the members of the Board then in
office is also required to fill vacancies occurring in the Board as well as to
adopt, amend or repeal provisions of the Amended Bylaws. In addition, the
Company's Amended Bylaws contain provisions which require strict procedural
compliance as a prerequisite for a shareholder to nominate a director or raise a
matter for consideration at a meeting of shareholders. The overall effect of
these provisions is to render more difficult a change in control of the Company
or the removal of incumbent management.

Extraordinary Corporate Transaction. The affirmative vote of at least
two-thirds of the votes represented by the outstanding shares of the Company's
Common Stock, Class B Common Stock and Preferred Stock entitled to vote at
elections of directors, voting as a class, is required to authorize (i) the
amendment, alteration or repeal of any provision of the Amended and Restated
Charter or Amended Bylaws of the Company; (ii) a merger or consolidation by the
Company; (iii) the sale of all or substantially all the Company's property and
assets; (iv) the dissolution of the Company; or (v) the removal of a director;
provided that such two-thirds approval shall not be required if shareholder
approval of any of the foregoing is not required under Tennessee law or 75% of
the Board of Directors has approved the transaction in question.

NYSE LISTING

The Common Stock and the Class B Common Stock are listed on the NYSE under
the symbols "TNM" and "TNM.B," respectively. The current rules of the NYSE
effectively preclude the listing on the NYSE of any securities of an issuer
which has issued securities or taken other corporate action that would have the
effect of nullifying, restricting or disparately reducing the per share voting
rights of holders of an outstanding class or classes of equity securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). The Company does not intend to issue any additional shares
of any stock that would make either the Common Stock or the Class B Common Stock
ineligible for continued listing or cause the Common Stock or the Class B Common
Stock to be delisted from the NYSE.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Trust Company
Bank, Atlanta, Georgia.

21
<PAGE> 24

UNDERWRITING

The U.S. Underwriters named below, for whom PaineWebber Incorporated,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.C. Bradford & Co. are
acting as the representatives (the "U.S. Representatives"), have severally
agreed, subject to the terms and conditions of the U.S. Underwriting Agreement
(the "U.S. Underwriting Agreement"), to purchase from the Company, and the
Company has agreed to sell to the U.S. Underwriters, the number of shares of
Common Stock set forth opposite their names.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
-------------------------------------------------------------------------- ---------
<S> <C>
PaineWebber Incorporated..................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................................
J.C. Bradford & Co. ......................................................

---------
Total........................................................... 2,000,000
========
</TABLE>

The Company has also entered into an International Underwriting Agreement
(the "International Underwriting Agreement") with certain International
Underwriters (the "International Underwriters", together with the U.S.
Underwriters, the "Underwriters"), for whom PaineWebber International (U.K.)
Ltd., Merrill Lynch International Limited and J.C. Bradford & Co. are acting as
the representatives. Subject to the terms and conditions of the International
Underwriting Agreement, and concurrently with the sale of 2,000,000 shares of
Common Stock to the U.S. Underwriters, the Company has agreed to sell to the
International Underwriters, and the International Underwriters have severally
agreed to purchase, an aggregate of 500,000 shares of Common Stock. The public
offering price per share and the total underwriting discounts and commissions
per share will be identical in the U.S. Underwriting Agreement and the
International Underwriting Agreement with respect to all shares of Common Stock
being purchased by the Underwriters from the Company.

The U.S. Underwriting Agreement provides that the obligations of the U.S.
Underwriters to purchase the shares of Common Stock are subject to certain
conditions. The U.S. Underwriters are committed to purchase, and the Company is
obligated to sell, all the shares of Common Stock offered by this prospectus, if
any are purchased. In general, the closing with respect to the sale of the
shares of Common Stock pursuant to the U.S. Underwriting Agreement is a
condition to the closing with respect to the sale of the shares of Common Stock
pursuant to the International Underwriting Agreement and vice versa. PaineWebber
International (U.K.) Ltd. is an affiliate of PaineWebber Incorporated, and
Merrill Lynch International Limited is an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated.

The Company has been advised by the U.S. Representatives that the U.S.
Underwriters propose initially to offer the shares of Common Stock to the public
at the public offering price set forth on the cover page of this prospectus, and
to certain securities dealers at such price less a concession not in excess of
$ per share. The U.S. Underwriters may allow, and such dealers may
reallow, concessions of not more than $ per share on sales to certain
other dealers. After the public offering, the public offering price and
concessions may be changed by the U.S. Representatives.

Each U.S. Underwriter has represented and agreed that, as part of the
distribution of the shares of Common Stock, (a) it is not purchasing any shares
of Common Stock for the account of anyone other than a U.S. or Canadian Person
and (b) it has not offered or sold, and will not offer or sell, directly or
indirectly, any shares of Common Stock or distribute this prospectus to any
person outside the United States or Canada. Each International Underwriter has
represented and agreed that, as part of the distribution of the shares of

22
<PAGE> 25

Common Stock, (a) it is not purchasing any shares of Common Stock for the
account of any U.S. or Canadian Person, and (b) it has not offered or sold, and
will not offer or sell, directly or indirectly, any shares of Common Stock or
distribute the international prospectus to any person within the United States
or to any U.S. or Canadian Person. The foregoing limitations do not apply to
stabilization transactions or to certain other transactions specified in the
Agreement Between U.S. and International Underwriters described below. As used
herein, "U.S. or Canadian Person" means any individual who is resident in the
United States or Canada, or any corporation, pension, profit-sharing or other
trust or other entity organized under or governed by the laws of the United
States or Canada or any political subdivision thereof (other than a foreign
branch of any U.S. or Canadian Person), and includes any U.S. or Canadian branch
of a non-U.S. or Canadian Person.

The U.S. Underwriters and the International Underwriters have entered into
an Agreement Between U.S. and International Underwriters that provides for the
coordination of their activities. Pursuant to the Agreement Between U.S. and
International Underwriters, sales may be made between the U.S. Underwriters and
the International Underwriters of such number of shares of Common Stock as may
be mutually agreed upon. The per share price of any shares so sold shall be the
public offering price set forth on the cover page of this prospectus, less an
amount not greater than the per share amount of the concession to dealers set
forth above. To the extent there are sales between the U.S. Underwriters and the
International Underwriters, the number of shares of Common Stock initially
available for sale by the U.S. Underwriters or by the International Underwriters
may be more or less than the amount appearing on the cover page of this
prospectus.

The Company has granted to the U.S. Underwriters an option, exercisable
within the 30-day period after the date of the prospectus, to purchase up to an
additional 375,000 shares of Common Stock at the public offering price set forth
on the cover page of this prospectus, less the underwriting discounts and
commissions. The U.S. Underwriters may exercise such option only to cover
over-allotments, if any, in the sale of the shares of Common Stock offered
hereby. To the extent that such option is exercised, each U.S. Underwriter will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional shares of Common Stock as the percentage it
was obligated to purchase pursuant to the U.S. Underwriting Agreement.

The Company and its executive officers and directors have agreed not to
sell, offer to sell or otherwise dispose of (a) shares of Common Stock, Class B
Common Stock or securities convertible into Common Stock or Class B Common Stock
or (b) sell, offer to sell or grant rights, options or warrants with respect to
Common Stock, Class B Common Stock or securities convertible into Common Stock
or Class B Common Stock prior to the expiration of 90 days from the date of this
prospectus, without the prior written consent of PaineWebber Incorporated, other
than pursuant to existing employee stock option plans or in connection with
other employee incentive compensation arrangements of the Company and issuances
of Common Stock upon conversion of securities outstanding as of the date of this
prospectus.

The Company has agreed to indemnify the U.S. Underwriters and the
International Underwriters and their controlling persons against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"), or to contribute to payments the U.S. Underwriters and
the International Underwriters may be required to make in respect thereof.

23
<PAGE> 26

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Bass, Berry & Sims, Nashville, Tennessee. Certain legal
matters relating to the offering will be passed upon for the Underwriters by
Shereff, Friedman, Hoffman & Goodman, LLP, New York, New York.

EXPERTS

The financial statements and schedules included or incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon authority of said firm as experts in giving said reports.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C., a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act, with respect to the shares of Common Stock
offered hereby. This prospectus constitutes a part of the Registration Statement
and does not contain all the information set forth therein, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. Any statements contained herein concerning the provisions of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. For further
information regarding the Company and the securities offered hereby, reference
is made to the Registration Statement and to the exhibits thereto.

The Company is subject to the informational requirements of the Exchange
Act, and, in accordance therewith, files reports, proxy statements and other
information with the Commission. The Registration Statement (with exhibits), as
well as such reports, proxy statements and other information filed by the
Company with the Commission, may be inspected and copied at the public reference
facilities maintained by the Commission at its principal offices at Judiciary
Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
following Regional Offices of the Commission: 7 World Trade Center, 13th Floor,
New York, New York, 10048; and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained from the Public
Reference Section of the Commission at 450 Fifth Street. N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates.

The Common Stock and Class B Common Stock are listed on the NYSE. The
aforementioned material also can be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005. The Company is organized under the laws
of the State of Tennessee, its executive offices are located at Nelson Place at
Elm Hill Pike, Nashville, Tennessee 37214-1000, and its telephone number is
(615) 889-9000.

24
<PAGE> 27

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents, heretofore filed by the Company with the
Commission (File No. 0-4095) pursuant to the Exchange Act, are incorporated and
made a part of this prospectus by reference, except as superseded or modified
herein:

(1) The Company's Annual Report on Form 10-K for the year ended March
31, 1995.

(2) The description of the Company's Common Stock and Class B Common
Stock contained in the Registration Statement on Form 8-A filed on May 26,
1995.

All documents subsequently filed by the Company pursuant to Section 13 (a),
13 (c), 14, or 15 (d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated by reference in this prospectus and
shall be part hereof from the date of filing of such documents. Any statement
contained herein or in any document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained herein or in any
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this prospectus.

The Company undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this prospectus is delivered, upon the
written or oral request of any such person, a copy of any document described
herein (not including exhibits to those documents unless such exhibits are
specifically incorporated by reference into the information incorporated into
this prospectus). Requests for such copies should be directed to Joe L. Powers,
Executive Vice President and Secretary, Thomas Nelson, Inc., Nelson Place at Elm
Hill Pike, Nashville, Tennessee 37214-1000, telephone number (615) 889-9000.

25
<PAGE> 28

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Public Accountants.............................................. F-2
Consolidated Statements of Income for the Years Ended March 31, 1995, 1994 and 1993... F-3
Consolidated Balance Sheets at March 31, 1995 and 1994................................ F-4
Consolidated Statements of Shareholders' Equity for the Years Ended March 31, 1995,
1994 and 1993....................................................................... F-5
Consolidated Statements of Cash Flows for the Years Ended March 31, 1995, 1994 and
1993................................................................................ F-6
Notes to Consolidated Financial Statements............................................ F-7
</TABLE>

F-1
<PAGE> 29

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of
Thomas Nelson, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Thomas
Nelson, Inc. and Subsidiaries (a Tennessee corporation) as of March 31, 1995 and
1994, and the related consolidated statements of income, shareholders' equity
and cash flows for each of the three years in the period ended March 31, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Thomas Nelson, Inc. and
Subsidiaries as of March 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period ended March 31,
1995 in conformity with generally accepted accounting principles.

As explained in Note M to the financial statements, effective April 1,
1993, the Company changed its method of accounting for income taxes.

ARTHUR ANDERSEN LLP

Nashville, Tennessee
May 19, 1995

F-2
<PAGE> 30

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
----------------------------------
1995 1994 1993
-------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
Net revenues............................................... $265,107 $226,434 $143,072
Cost of goods sold......................................... 133,650 115,201 74,975
-------- -------- --------
Gross profit............................................... 131,457 111,233 68,097
Selling, general and administrative expenses............... 103,614 89,649 55,193
Amortization of goodwill and non-compete agreements........ 1,806 1,616 718
-------- -------- --------
Operating income........................................... 26,037 19,968 12,186
Other income............................................... 897 227 178
Interest expense........................................... 8,585 6,903 3,027
-------- -------- --------
Income before income taxes................................. 18,349 13,292 9,337
Provision for income taxes................................. 6,639 4,547 3,055
-------- -------- --------
Income before cumulative effect of change in accounting
principle................................................ 11,710 8,745 6,282
Cumulative effect of change in accounting principle for
income taxes............................................. -- 336 --
-------- -------- --------
Net income............................................ $ 11,710 $ 9,081 $ 6,282
======== ======== ========
Weighted average number of shares outstanding.............. 13,374 13,355 13,268
======== ======== ========
Net income per share:
Income before cumulative effect of change in accounting
principle............................................. $ .88 $ .65 $ .47
Cumulative effect of change in accounting principle...... -- .03 --
-------- -------- --------
Net income............................................... $ .88 $ .68 $ .47
======== ======== ========
Fully diluted net income per share:
Income before cumulative effect of change in accounting
principle............................................. $ .83 $ .65 $ .47
Cumulative effect of change in accounting principle...... -- .02 --
-------- -------- --------
Net income............................................... $ .83 $ .67 $ .47
======== ======== ========
</TABLE>

See Notes to Consolidated Financial Statements

F-3
<PAGE> 31

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
MARCH 31,
---------------------
1995 1994
-------- --------
(DOLLARS IN
THOUSANDS, EXCEPT PER
SHARE DATA)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.............................................. $ 779 $ 788
Accounts receivable, less allowances of $9,029 and $8,916,
respectively......................................................... 85,100 58,038
Inventories............................................................ 69,351 66,994
Prepaid expenses....................................................... 20,683 11,400
Deferred tax asset..................................................... 7,714 13,235
-------- --------
Total current assets......................................... 183,627 150,455
Other assets........................................................... 14,688 12,054
Property, plant and equipment, net..................................... 16,226 17,359
Deferred charges....................................................... 4,149 4,179
Goodwill, less accumulated amortization of $2,046 and $1,087,
respectively......................................................... 31,179 32,278
-------- --------
Total assets................................................. $249,869 $216,325
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable....................................................... $ 32,419 $ 20,798
Accrued expenses....................................................... 19,558 18,618
Dividends payable...................................................... 537 428
Income taxes currently payable......................................... -- 4,471
Current portion of long-term debt...................................... 892 878
Current portion of capital lease obligations........................... 780 723
-------- --------
Total current liabilities.................................... 54,186 45,916
Long-term debt......................................................... 120,108 102,618
Capital lease obligations.............................................. 80 861
Deferred tax liability................................................. 1,410 1,330
Other liabilities...................................................... 1,356 2,875
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock, $1.00 par value, authorized 1,000,000 shares; none
issued............................................................... -- --
Common stock, $1.00 par value, authorized 20,000,000 shares; issued
12,362,377 and 9,891,233, respectively............................... 12,362 9,891
Class B common stock, $1.00 par value, authorized 5,000,000 shares;
issued 1,067,094 and 799,933, respectively........................... 1,067 800
Additional paid-in capital............................................. 18,211 20,982
Retained earnings...................................................... 40,538 30,651
Foreign currency translation adjustments............................... 551 401
-------- --------
Total shareholders' equity............................................. 72,729 62,725
-------- --------
Total liabilities and shareholders' equity................... $249,869 $216,325
======== ========
</TABLE>

See Notes to Consolidated Financial Statements

F-4
<PAGE> 32

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
FOREIGN
CLASS B ADDITIONAL CURRENCY
COMMON COMMON PAID-IN RETAINED TRANSLATION DEFERRED
STOCK STOCK CAPITAL EARNINGS ADJUSTMENTS COMPENSATION
------- ------- ---------- -------- ----------- ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT MARCH 31, 1992........... $ 6,565 $ 490 $ 23,349 $ 18,759 $ -- $ (120)
Net income.......................... 6,282
Common stock issued:
Executive Stock Purchase Plan --
30,733 shares.................. 30 554
Option plans -- 29,519 common and
80,038 Class B common shares... 30 80 260
Stock dividend -- 50%............... 3,243 244 (3,496)
Dividends declared -- $0.117........ (1,548)
PPC, Inc. common stock dividends
declared.......................... (30)
Contributions to ESOP............... 120
Foreign currency translation
adjustments....................... 480
Class B common stock converted to
common stock...................... 9 (9)
------- ------- ---------- -------- ----------- ------------
BALANCE AT MARCH 31, 1993........... 9,877 805 20,667 23,463 480 --
Net income.......................... 9,081
Common stock issued:
Option plans -- 9,000 common...... 9 36
Dividends declared -- $0.128........ (1,696)
PPC, Inc. common stock:
Dividends declared................ (197)
Net issued........................ 279
Foreign currency translation
adjustments....................... (79)
Class B common stock converted to
common stock...................... 5 (5)
------- ------- ---------- -------- ----------- ------------
BALANCE AT MARCH 31, 1994........... 9,891 800 20,982 30,651 401 --
Net income.......................... 11,710
Common stock issued:
Option plans -- 10,500 common and
60,000 Class B common shares... 11 60 306
Retirement for option payments
15,038 common and 180 Class B
common shares.................. (15) (348)
Dividends declared -- $0.136........ (1,823)
Executive Stock Purchase Plan
Retired 2,255 shares of common.... (2) (26)
Foreign currency translation
adjustments....................... 150
Stock dividend -- 25%............... 2,471 213 (2,703)
Class B common stock converted to
common stock...................... 6 (6)
------- ------- ---------- -------- ----------- ------------
BALANCE AT MARCH 31, 1995........... $12,362 $ 1,067 $ 18,211 $ 40,538 $ 551 $ --
======= ====== ======= ======= ========= ==========
</TABLE>

See Notes to Consolidated Financial Statements

F-5
<PAGE> 33

THOMAS NELSON, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
------------------------------
1995 1994 1993
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................................... $ 11,710 $ 9,081 $ 6,282
Adjustments to reconcile net income to net cash provided by
(used in) operations:
Depreciation and amortization................................ 5,870 5,362 3,829
Deferred income taxes........................................ 5,601 (1,062) (273)
Cumulative effect of change in accounting principle.......... (--) (336) (--)
Loss (gain) on sale of property, plant and equipment......... (702) 61 (6)
Changes in assets and liabilities, net of acquisitions and
disposals:
Accounts receivable, net.................................. (27,011) (8,327) 3,930
Inventories............................................... (2,713) (13,025) (10,869)
Prepaid expenses.......................................... (9,234) (801) (3,734)
Accounts payable and accrued expenses..................... 11,945 3,516 1,295
Income taxes currently payable and deferred............... (4,471) 5,244 (1,734)
-------- -------- --------
Net cash used in operating activities.......................... (9,005) (287) (1,280)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................................... (2,245) (2,400) (4,952)
Proceeds from sale of property, plant and equipment............ 23 34 20
Proceeds from sale of business assets.......................... 2,823 4,155 --
Purchase of net assets of acquired companies -- net of cash
received..................................................... (187) -- (67,260)
Changes in other assets and deferred charges................... (4,880) (5,867) (11,281)
-------- -------- --------
Net cash used in investing activities.......................... (4,466) (4,078) (83,473)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit................................ 18,300 9,298 25,741
Borrowings (payments) under construction and term loan......... (667) -- 3,123
Proceeds from issuance of long-term debt....................... -- -- 55,000
Payments under industrial revenue bonds........................ (225) (195) (190)
Payments under capital lease obligations....................... (723) (566) (372)
Changes in other liabilities................................... (1,646) (2,542) 1,592
Dividends paid................................................. (1,713) (1,888) (1,433)
Proceeds from issuance of common stock......................... 377 433 944
Common stock retired........................................... (391) (108) --
-------- -------- --------
Net cash provided by financing activities...................... 13,312 4,432 84,405
-------- -------- --------
Effect of translation rate changes............................. 150 (79) 480
-------- -------- --------
Net increase (decrease) in cash and cash equivalents........... (9) (12) 132
Cash and cash equivalents at beginning of year................. 788 800 668
-------- -------- --------
Cash and cash equivalents at end of year....................... $ 779 $ 788 $ 800
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Non-compete agreements......................................... $ -- $ 300 $ --
Capital lease obligations incurred to lease new equipment...... $ -- $ 764 $ 214
Contribution to ESOP using previously funded advances.......... $ -- $ -- $ 120
Dividends accrued and unpaid................................... $ 537 $ 428 $ 423
</TABLE>

See Notes to Consolidated Financial Statements

F-6
<PAGE> 34

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation: The consolidated financial statements consist
of the accounts of Thomas Nelson, Inc. and subsidiary companies (the "Company").
All intercompany transactions and balances have been eliminated. As discussed
further in Note B, the Company acquired PPC, Inc. ("Pretty Paper Company") in a
pooling-of-interests transaction in March 1994 and acquired Word, Incorporated
("Word") through a purchase effective November 30, 1992. All financial data
presented in the consolidated financial statements and notes thereto have been
restated for all periods shown to include the accounts of PPC, Inc. under the
pooling-of-interests method of accounting. The consolidated statement of income
for the year ended March 31, 1993, includes Word operations for the four months
ended March 31, 1993.

Sales Returns: Provision is made for the estimated effect of sales returns
where right-of-return privileges exist. Returns of products from customers are
accepted in accordance with standard industry practice. The full amount of the
returns allowance (estimated returns to be received net of inventory and royalty
costs) is shown, along with the allowance for doubtful accounts, as a reduction
of accounts receivable in the accompanying financial statements.

Inventories: Inventories are stated at the lower of cost or market using
the first-in, first-out (FIFO) valuation method. Costs of the production and
publication of products are included in inventory and charged to operations when
sold or when otherwise disposed. Costs of abandoned publishing projects and
appropriate provisions for inventory obsolescence and decreases in market value
are charged to operations on a current basis.

Property, Plant and Equipment: Property, plant and equipment are stated at
cost. Depreciation and amortization are provided for principally on the
straight-line method over the estimated useful lives of the individual assets.

Goodwill: Goodwill is being amortized on a straight-line basis over forty
years. Subsequent to acquisitions, the Company continually evaluates whether
later events and circumstances have occurred that indicate the remaining
estimated useful life of goodwill may warrant revision or that the remaining
balance of goodwill may not be recoverable. In the evaluation of possible
impairment, the Company uses the most appropriate method of evaluation given the
circumstances surrounding the particular acquisition, which has generally been
an estimate of the related business unit's undiscounted operating income before
interest and taxes over the remaining life of the goodwill.

Prepaid Expenses: Prepaid expenses consist primarily of royalty advances,
certain production costs of music products, direct marketing costs, and
production and distribution costs relating to marketing programs that are
expected to benefit future periods. These costs are expensed over the expected
benefit periods.

Deferred Charges: Deferred charges consist primarily of loan issuance
costs which are being amortized over the average life of the related debt. Also
included are publication costs that are expected to be of significant benefit to
future periods and other deferred charges, all of which are amortized over
periods not to exceed 60 months.

Other Assets: Other assets consist primarily of costs of copyright
production masters which are amortized over periods not to exceed 60 months, a
non-compete agreement related to the Word acquisition which is being amortized
over 60 months (the term of the agreement) and prepaid royalty and production
advances for works and projects which are not expected to be released within the
next fiscal year.

Income Taxes: Effective April 1, 1993, the Company adopted the provisions
of Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". Deferred income taxes are provided for temporary differences in
bases between financial statement and income tax assets and liabilities.

F-7
<PAGE> 35

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Foreign Currency Translation: Assets and liabilities of foreign
subsidiaries are translated at year-end rates of exchange and revenues and
expenses are translated at the average rate of exchange for the year. Gains and
losses resulting from translation are accumulated in a separate component of
shareholders' equity. Gains and losses resulting from foreign currency
transactions are not material.

Computation of Net Income Per Share: Net income per share is computed by
dividing net income by the weighted average number of common and Class B common
shares outstanding during the year. The fully diluted per share computation
reflects the effect of common shares contingently issuable upon conversion of
convertible debt securities in periods in which such conversion would cause
dilution and the effect on net income of converting the debt securities. Fully
diluted earnings per share also reflect additional dilution related to stock
options using the market price at the end of the period, when higher than the
average price for the period.

Statement of Cash Flows: For purposes of the statement of cash flows, the
Company considers as cash equivalents all highly liquid debt instruments with a
maturity of three months or less.

Reclassifications: Certain reclassifications of prior period amounts have
been made to conform to the current year's presentation.

NOTE B -- ACQUISITIONS AND DISPOSITIONS

In March 1994, Pretty Paper Company became a wholly-owned subsidiary of the
Company, and 115,551 shares of the Company's common stock were issued in
exchange for all of the outstanding common stock of Pretty Paper Company. The
combination was accounted for as a pooling of interests, and accordingly, the
accompanying financial statements have been restated to include the accounts and
operations of Pretty Paper Company for all periods prior to the combination.
Pretty Paper Company had net revenues of $8.0 million and $5.6 million, and net
income (loss) of $342,000 and ($74,000), for the fiscal years 1994 and 1993,
respectively. Costs and expenses incurred in connection with this transaction
were immaterial and have been charged to expenses in March 1994. In addition,
certain shareholders of Pretty Paper Company entered into agreements not to
compete with the Company for a period of five years from the date of the pooling
in consideration of an aggregate of $300,000.

Effective November 30, 1992, the Company consummated the acquisition of all
of the issued and outstanding capital stock of Word. Word produces and
distributes Christian recorded and printed music products, and also publishes
Christian and inspirational books and Bibles. The purchase price of the capital
stock was $68.4 million. The purchase price was funded by the Company's issuance
of $55 million of 5 3/4% Convertible Subordinated Notes due in 1999 and by
borrowings under the Company's credit facilities. The acquisition has been
accounted for as a purchase, and Word's results of operations are included in
the Company's consolidated financial statements since the date of acquisition.
The total acquisition cost was allocated to the net assets acquired and adjusted
in fiscal year 1994, primarily for the recognition of approximately $8 million
in a deferred tax asset. There may be additional tax assets available in future
years, however, at this time, the Company has not recorded these assets. Any
related tax assets recorded in the future will result in an adjustment to
goodwill. In addition, the seller entered into an agreement not to compete with
the Company for a period of five years from the date of the acquisition for a
payment of $3.6 million. Effective September 27, 1993, the Company sold certain
assets of a subsidiary of Word for approximately $4.2 million, which was
approximately book value. No gain or loss was recorded in connection therewith.
On a combined basis, the Company and Word would have had unaudited pro forma net
revenues of $223.2 million for fiscal 1993.

In March, 1995 the Company sold substantially all of the assets of a
bindery plant for $2.8 million. A $0.7 million gain on the sale is included in
other income in the accompanying financial statements.

F-8
<PAGE> 36

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE C -- INVENTORIES

Inventories consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Finished goods................................................. $59,116 $58,463
Work in process and raw materials.............................. 10,235 8,531
------- -------
$69,351 $66,994
======= =======
</TABLE>

NOTE D -- PREPAID EXPENSES

Prepaid expenses consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Direct marketing costs......................................... $ 4,562 $ 2,650
Prepaid advertising............................................ 1,423 670
Royalties and production costs................................. 11,516 7,096
Other.......................................................... 3,182 984
------- -------
$20,683 $11,400
======= =======
</TABLE>

NOTE E -- PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at March 31 (in
thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Land........................................................... $ 1,916 $ 1,933
Buildings...................................................... 11,314 11,229
Machinery and equipment........................................ 8,959 8,171
Assets under capital leases.................................... 2,800 2,800
Furniture and fixtures......................................... 3,521 3,190
------- -------
28,510 27,323
Less allowance for depreciation and amortization............... (12,284) (9,964)
------- -------
$16,226 $17,359
======= =======
</TABLE>

NOTE F -- OTHER ASSETS

Other assets consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Prepaid royalties.............................................. $ 9,050 $ 6,200
Production masters, net of accumulated amortization of $1,267
and $789, respectively....................................... 2,089 1,209
Non-compete agreements, net of accumulated amortization of
$2,121 and $1,214, respectively.............................. 2,682 3,489
Other.......................................................... 867 1,156
------- -------
$14,688 $12,054
======= =======
</TABLE>

F-9
<PAGE> 37

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE G -- ACCRUED EXPENSES

Accrued expenses consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Accrued interest............................................... $ 1,247 $ 969
Accrued royalties.............................................. 10,992 9,980
Accrued payroll................................................ 4,369 3,043
Other.......................................................... 2,950 4,626
------- -------
$19,558 $18,618
======= =======
</TABLE>

Cash payments for interest were $8.0 million in 1995, $6.2 million in 1994
and $2.4 million in 1993.

NOTE H -- LONG-TERM DEBT

Long-term debt consisted of the following at March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Industrial Revenue Bonds, 7.65% to 8.35%, due through 2005... $ 2,700 $ 2,920
Loan Agreement............................................... 4,333 5,000
Credit Agreements............................................ 58,800 40,500
5.75% Convertible Subordinated Notes, due in 1999............ 55,000 55,000
Other........................................................ 167 76
-------- --------
121,000 103,496
Less current portion......................................... (892) (878)
-------- --------
$120,108 $102,618
======== ========
</TABLE>

At March 31, 1995, Industrial Revenue Bonds were secured by property, plant
and equipment with a net book value of approximately $2.3 million.

The Loan Agreement indebtedness is secured by property, plant and equipment
related to the warehouse and distribution center expansion completed in June
1992. Interest is at the London Interbank Offered Rate ("LIBOR") plus 1.25%,
which was 7.4% at March 31, 1995. Semi-annual principal payments are due through
March 2002.

The Credit Agreements totaling $80 million were obtained in November 1992
from a group of banks, and increased in March 1995 to $105 million. The primary
credit facility provides for a $100 million facility, with any outstanding
balance at May 31, 1997 converting to a term loan payable in 16 equal quarterly
principal installments thereafter. This credit facility bears interest at either
the prime rate or, at the Company's option, at LIBOR plus 1.5%, based on certain
financial ratios. At March 31, 1995, the average interest rate was 8.0%. This
facility is guaranteed by all of the Company's subsidiaries and the Company has
agreed, among other things, to limit the payment of cash dividends to $1.6
million, plus 30% of the Company's cumulative consolidated net income earned
after March 31, 1992, and to maintain certain interest coverage, fixed charge
coverage, debt-to-total-capital ratios and working capital of at least $60
million. The maximum dividends which the Company may pay for fiscal 1996 would
be $4.2 million. Additionally, the Company has a $5 million credit facility
which matures July 31, 1996 and bears interest at the prime rate, with covenants
which are the same as the $100 million facility. At March 31, 1995, the Company
was in compliance with all covenants of the credit facilities. At March 31,
1995, the Company had $46.2 million available under its Credit Agreements.

During November 1992, the Company issued $55 million of Convertible
Subordinated Notes due November 30, 1999, priced at par to yield 5.75%. The
notes are convertible into common stock initially at

F-10
<PAGE> 38

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$17.00 per share and are redeemable at the Company's option on or after November
30, 1995, at 103.29% of the principal amount, declining thereafter to 100% on
November 30, 1999. This conversion would result in 3,235,294 additional shares
outstanding.

Maturities of long-term debt for the years ending March 31, are as follows
(in thousands):

<TABLE>
<S> <C>
1996...................................................................... $ 892
1997...................................................................... 3,207
1998...................................................................... 15,092
1999...................................................................... 15,117
2000...................................................................... 70,117
2001 and thereafter....................................................... 16,575
--------
$121,000
========
</TABLE>

NOTE I -- LEASES

Total rental expense for all operating leases, including short-term leases
of less than a year, amounted to approximately $2.2 million in 1995, $2.2
million in 1994, and $1.0 million in 1993. Generally, the leases provide that,
among other things, the Company shall pay for utilities, insurance, maintenance,
and property taxes in excess of base year amounts.

Minimum rental commitments under non-cancelable leases for the years ending
March 31, are as follows (in thousands):

<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
1996................................................................ $ 2,419 $ 818
1997................................................................ 2,058 51
1998................................................................ 1,622 34
1999................................................................ 1,103 --
2000................................................................ 495 --
2001 and thereafter................................................. 2,103 --
--------- -------
Total minimum lease payments.............................. $ 9,800 903
=======
Less amount representing interest................................... (43)
-------
Present value of net lease payments................................. 860
Less current portion................................................ (780)
-------
$ 80
=====
</TABLE>

NOTE J -- STOCK PLANS

Executive Stock Purchase Plan of 1986: The Company has adopted the
Executive Stock Purchase Plan of 1986, which is administered by the Company's
Compensation Committee. There were no offers of investment rights under the
Executive Stock Purchase Plan of 1986 that required a contribution by the
Company for fiscal 1995, 1994 and 1993. Under this plan, there were 99,186
shares of common stock and 371,809 shares of Class B common stock reserved at
March 31, 1995.

1986 Stock Incentive Plan: The Company has adopted the 1986 Stock
Incentive Plan, which is administered by the Company's Compensation Committee.
Stock options may be granted under the 1986 Stock Incentive Plan at a price not
less than the fair market value ("FMV") of the stock on the date the option is
granted and must be exercised not later than five years after the date of grant.
Stock options issued to

F-11
<PAGE> 39

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

a person then owning more than 10% of the voting power in all classes of the
Company's outstanding stock must be granted at a purchase price of not less than
110% of the FMV and exercised within five years from the date of grant. Shares
reserved and options outstanding under this plan are as follows:

<TABLE>
<CAPTION>
COMMON STOCK CLASS B COMMON STOCK
----------------------- ----------------------- FMV
REMAINING REMAINING --------------------
SHARES OUTSTANDING SHARES OUTSTANDING EXERCISE
RESERVED OPTIONED RESERVED OPTIONED PRICES
FOR GRANT SHARES FOR GRANT SHARES PER SHARE
--------- ----------- --------- ----------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
APRIL 1, 1992............... 30,000 59,000 126,700 103,700 $ 4.05 - $ 9.35
Stock Dividend.............. 16,000 26,700 63,375 51,750 (1.35) - (3.12)
Exercised................... (28,462) (80,038) 2.70 - 5.00
Cancelled................... 10,738 (10,738) 412 (412) 2.70 - 5.00
--------- ----------- --------- ----------- --------------------
MARCH 31, 1993.............. 56,738 46,500 190,487 75,000 5.00 - 6.23
Exercised................... (9,000) 5.00
Cancelled................... 1,500 (1,500) 5.00
--------- ----------- --------- ----------- --------------------
MARCH 31, 1994.............. 58,238 36,000 190,487 75,000 5.00 - 6.23
Granted..................... (60,238) 200,000 (189,762) 50,000 14.40 - 18.40
Stock Dividend.............. 54,750 181 16,250 (1.00) - (1.83)
Exercised................... (15,000) (60,000) 4.00 - 4.40
Cancelled................... 2,000 (2,000) -- 4.00
--------- ----------- --------- ----------- --------------------
MARCH 31, 1995.............. -- 273,750 906 81,250 $ 4.00 - $18.40
======== ========= ======== ========= ====================
</TABLE>

1990 Deferred Compensation Option Plan for Outside Directors: The Company
has adopted the 1990 Deferred Compensation Option Plan for Outside Directors.
Options may be awarded, on or prior to the annual meeting of shareholders or on
initial election to the Board of Directors ("Board"), to each Director of the
Company who files with the Company an irrevocable election to receive options in
lieu of not less than fifty percent (50%) of the retainer fees to be earned
during each fiscal year. The option price shall be $1.00 per share with the
number of shares being determined by dividing the amount of the annual retainer
fee by the fair market value of the shares on the option date less $1.00 per
share. The amount of annual retainer fee for options is expensed by the Company
as earned. Options granted and outstanding under this plan are as follows:

<TABLE>
<CAPTION>
COMMON STOCK
---------------------------
REMAINING
SHARES OUTSTANDING
RESERVED OPTIONED
FOR GRANT SHARES
--------- -----------
<S> <C> <C>
APRIL 1, 1992............................................... 90,630 4,228
Stock Dividend.............................................. 44,035 2,866
Exercised................................................... (1,057)
Granted..................................................... (2,560) 2,560
--------- -----------
MARCH 31, 1993.............................................. 132,105 8,597
Granted..................................................... (3,840) 3,840
--------- -----------
MARCH 31, 1994.............................................. 128,265 12,437
Stock Dividend.............................................. 31,023 4,153
Granted..................................................... (4,175) 4,175
--------- -----------
MARCH 31, 1995.............................................. 155,113 20,765
======= =========
</TABLE>

1992 Employee Stock Incentive Plan: In 1992, the Company's shareholders
approved the 1992 Employee Stock Incentive Plan. Stock options, stock
appreciation rights, restricted stock, deferred stock, stock

F-12
<PAGE> 40

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

purchase rights and other stock-based awards may be granted under this plan.
There are 562,500 shares of common stock and 375,000 shares of Class B common
stock reserved under this plan at fiscal year end. Restricted stock awards of
132,084 shares of common stock and 55,000 shares of Class B common stock were
granted during fiscal 1995. Under the provision of the restricted stock awards,
employees may earn 50% of the award in fiscal years 1995 and 1996 based upon
achieving performance goals in each year provided the employee does not
voluntarily terminate his or her employment for two years subsequent to when an
award is earned. Due to the results of fiscal 1995, the Company will issue
approximately 66,000 shares of common stock and recognize compensation of
approximately $1.3 million over two years which is the period in which the risk
of forfeiture lapses.

NOTE K -- RETIREMENT PLANS

The Company has adopted an Employee Stock Ownership Plan ("ESOP") for all
eligible officers and employees who are not covered under a profit-sharing plan
established through collective bargaining. The Company matches 25% of each
employee's 401(k) contributions annually and, in addition, may make retirement
contributions to the ESOP at its discretion. Contributions to the ESOP including
the Company's matching 401(k) contribution totaled $1.0 million, $0.9 million
and $0.7 million in 1995, 1994 and 1993, respectively.

NOTE L -- COMMON STOCK

On March 24, 1995, the Company effected a five-for-four stock split in the
form of a 25% stock dividend. All common stock, Class B common stock, dividends
per share and earnings per share data has been restated to reflect this
five-for-four stock split.

On September 30, 1992, the Company effected a three-for-two stock split in
the form of a 50% stock dividend. All common stock, Class B common stock,
dividends per share and earnings per share data has been restated to reflect
this three-for-two stock split.

NOTE M -- INCOME TAXES

The summary below sets forth the components of the federal and state income
tax provision (benefit) for the years ending March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Current:
Federal................................................... $ 97 $ 4,973 $ 3,051
State..................................................... 839 417 313
Foreign................................................... 102 219 --
------- ------- -------
1,038 5,609 3,364
Deferred.................................................... 5,601 (1,062) (309)
------- ------- -------
Total............................................. $ 6,639 $ 4,547 $ 3,055
====== ====== ======
</TABLE>

F-13
<PAGE> 41

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The deferred income tax provision (benefit) is comprised of the following
for the years ending March 31 (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
------ ------- -------
<S> <C> <C> <C>
Accelerated depreciation................................... $ 176 $ 91 $ 88
Contributions.............................................. (386) 48 147
Inventory reserve.......................................... 2,100 (539) 246
Bad debt and return reserves............................... 1,281 (468) (1,262)
Inventory -- tax over book................................. 612 (588) (1,111)
Advances and prepaid expenses.............................. 1,717 889 382
Deferred charges........................................... 95 (172) 573
Accrued liabilities........................................ 6 (323) 459
Other...................................................... -- -- 169
------ ------- -------
$5,601 $(1,062) $ (309)
====== ======= =======
</TABLE>

The effective income tax rate applicable to income differs from the U.S.
federal income tax rate ("statutory rate") for the following reasons:

<TABLE>
<CAPTION>
PERCENT OF PRE-TAX INCOME
----------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Effective tax rate......................................... 36.2% 34.2% 32.7%
State taxes on income...................................... (4.6) (3.1) (3.3)
Other...................................................... 2.9 3.1 4.6
---- ---- ----
Statutory rate............................................. 34.5% 34.2% 34.0%
==== ==== ====

</TABLE>

The deferred tax asset consists primarily of temporary differences in
inventory, accounts receivable, advances and prepaid expenses.

The Company's federal income tax returns have been examined by the Internal
Revenue Service for the fiscal years through 1987.

As discussed in Note A, the Company adopted SFAS No. 109 as of the
beginning of fiscal 1994. The cumulative effect on the prior years of this
change in accounting principle increased fiscal 1994 net income by $0.3 million,
or $.03 per share, and is reported in the consolidated statements of income for
the year ended March 31, 1994 as a cumulative effect of accounting change.
Fiscal 1993 financial statements have not been restated to apply the provisions
of SFAS No. 109.

Cash payments for income taxes were $6.0 million, $0.4 million, and $3.4
million in 1995, 1994 and 1993, respectively.

A Federal Income Tax receivable of approximately $0.9 million is included
in current year consolidated prepaid expenses.

F-14
<PAGE> 42

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE N -- QUARTERLY RESULTS (UNAUDITED)

Summarized results for each quarter in the fiscal years ended March 31,
1995 and March 31, 1994 are as follows (dollars in thousands, except per share
data):

<TABLE>
<CAPTION>
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
1995
Net revenues............................... $49,103 $70,512 $71,086 $74,406
Gross profit............................... 23,829 35,165 35,452 37,011
Net income (loss).......................... (544) 5,623 4,815 1,816
Net income (loss) per share................ (.04) .42 .36 .14
1994
Net revenues............................... $44,839 $64,363 $60,728 $56,504
Gross profit............................... 21,877 31,234 29,450 28,672
Net income (loss).......................... (829) 4,560 3,823 1,527
Net income (loss) per share................ (.06) .34 .29 .11
</TABLE>

NOTE O -- COMMITMENTS AND CONTINGENCIES

The Company has commitments to provide advances to certain artists and
authors in connection with products they are developing for the Company.
Estimated commitments totalled $28 million at March 31, 1995. The timing of
payments will be dependent upon the performance by the authors and artists of
conditions provided in the applicable contracts. It is anticipated that a
substantial portion of the commitments will be completed within the next three
years.

The Company is subject to various legal proceedings, claims and
liabilities, which arise in the ordinary course of business. In the opinion of
management, the amount of ultimate liability with respect to these actions will
not materially affect the financial position or results of operations of the
Company.

NOTE P -- FINANCIAL INSTRUMENTS

The following disclosure of estimated fair value of financial instruments
as of March 31, 1995 is made in accordance with SFAS No. 107, "Disclosures about
Fair Value of Financial Instruments". The estimated fair value amounts have been
determined by the Company using available market information as of March 31,
1995 and 1994, respectively. The estimates presented are not necessarily
indicative of amounts the Company could realize in a current market transaction.

<TABLE>
<CAPTION>
1995 1994
--------------------- ---------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
CASH AND CASH EQUIVALENTS....................... $ 779 $ 779 $ 788 $ 788
LONG-TERM DEBT:
5.75% Convertible Subordinated Notes............ 55,000 65,450 55,000 65,450
Credit Agreements............................... 58,800 58,800 40,500 40,500
Loan Agreement.................................. 4,333 4,333 5,000 5,000
Industrial Revenue Bonds........................ 2,700 2,700 2,920 2,920
</TABLE>

The fair value of the 5.75% Convertible Subordinated Notes is based on the
unofficial market for these privately placed instruments. The carrying value of
the Company's Credit Agreements and Loan Agreement approximates the fair value.
Due to the variable rate nature of the instruments, the interest rate paid by
the

F-15
<PAGE> 43

THOMAS NELSON, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company approximates the current market rate demanded by investors; therefore,
the instruments are valued at par. The carrying value of the Industrial Revenue
Bonds approximates the fair value.

Financial instruments which potentially subject the Company to credit risk
consist primarily of trade receivables. Credit risk on trade receivables is
minimized as a result of the large and diverse nature of the Company's customer
base.

F-16
<PAGE> 44

- ------------------------------------------------------
- ------------------------------------------------------

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION AND REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Use of Proceeds....................... 6
Price Range of Common Stock and Class
B Common Stock...................... 6
Dividend Policy....................... 7
Capitalization........................ 7
Selected Consolidated Financial
Data................................ 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 9
Business.............................. 13
Management............................ 18
Description of Capital Stock.......... 19
Underwriting.......................... 22
Legal Matters......................... 24
Experts............................... 24
Available Information................. 24
Incorporation of Certain Information
by Reference........................ 25
Index to Consolidated Financial
Statements.......................... F-1
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------

2,500,000 SHARES

THOMAS NELSON, INC.

COMMON STOCK

------------------------

PROSPECTUS
------------------------
PAINEWEBBER INCORPORATED

MERRILL LYNCH & CO.

J.C. BRADFORD & CO.
------------------------
, 1995
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 45

[ALTERNATE INTERNATIONAL PAGE]
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JUNE 27, 1995

2,500,000 SHARES

THOMAS NELSON, INC.

COMMON STOCK
------------------------

All of the shares of Common Stock offered hereby are being sold by Thomas
Nelson, Inc. (the "Company"). Of the 2,500,000 shares of Common Stock offered
hereby, 500,000 shares are being offered in an international offering outside
the United States and Canada (the "International Shares") and 2,000,000 shares
are being offered in a concurrent offering in the United States and Canada. The
price to the public and aggregate underwriting discounts and commissions per
share will be identical for both offerings. See "Underwriting."

On June 19, 1995, the Common Stock and Class B Common Stock began trading
on the New York Stock Exchange (the "NYSE") under the symbols "TNM" and "TNM.B,"
respectively, and ceased to be quoted on the Nasdaq National Market System. On
June 23, 1995 the last reported sale prices of the Common Stock and Class B
Common Stock on the NYSE were $20 1/8 and $21 3/8 per share, respectively. See
"Price Range of Common Stock and Class B Common Stock."
------------------------

The International Shares are offered by the International Underwriters,
subject to prior sale, when, as and if delivered to and accepted by the
International Underwriters, and subject to their right to reject orders in whole
or in part. It is expected that delivery of the Common Stock will be made in New
York City on or about July , 1995.
------------------------

PAINEWEBBER INTERNATIONAL
MERRILL LYNCH INTERNATIONAL LIMITED
J.C. BRADFORD & CO.
------------------------

THE DATE OF THIS PROSPECTUS IS , 1995.
<PAGE> 46

[ALTERNATE INTERNATIONAL PAGE]

UNITED STATES TAXATION OF NON-U.S. SHAREHOLDERS

GENERAL

The following is a general discussion of certain anticipated United States
federal tax consequences of the ownership, holding and disposition of Common
Stock by a person that, for United States federal income tax purposes, is not a
"United States Person" (a "Non-U.S. Holder"). For these purposes, a "United
States Person" means a citizen or resident of the United States, a corporation,
a partnership or other entity created or organized in or under the laws of the
United States or any state thereof, or an estate or trust, the income of which
is subject to United States federal income taxation regardless of its source.

The following discussion does not consider specific facts and circumstances
that may be relevant to a particular Non-U.S. Holder's tax position, including
the benefits that may be available to any person under an applicable tax treaty
to which the United States is a party. Specifically, without limitation, this
discussion does not address the United States tax consequences to any Non-U.S.
Holder who at any time owns (directly or through attribution) more than 5% of
the Common Stock or to any Non-U.S. Holder that is a controlled foreign
corporation, a foreign personal holding company, a foreign private foundation or
a foreign government. Furthermore, the following discussion is based on current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and on
administrative and judicial pronouncements thereunder, all of which are subject
to change possibly retroactively. Each prospective Non-U.S. Holder is urged to
consult a tax advisor with respect to the United states tax consequences of
acquiring, holding and disposing of Common Stock, as well as any tax
consequences that may arise under the laws of any foreign, state, local or other
tax jurisdiction.

DIVIDENDS

In each quarter of fiscal 1994 and 1995, the Company paid a cash dividend
of $.032 per share on its Common Stock and Class B Common Stock. On May 24,
1995, the Company declared a cash dividend of $.04 per share on its Common Stock
and Class B Common Stock to be paid on August 14, 1995 to shareholders of record
on July 31, 1995. See "Dividend Policy." Dividends paid on shares of Common
Stock will generally be subject to withholding of United States federal income
tax at a rate of 30% of such payment unless either (i) such holder is eligible
for a reduced tax rate or a tax exemption under an applicable income tax treaty
or (ii) such holder is engaged in the conduct of a trade or business within the
United States and the dividend is effectively connected with that trade or
business. If the dividend is effectively connected with the conduct of a trade
or business within the United States by a Non-U.S. Holder, the dividend (as
adjusted by any applicable deductions) will be subject to United States federal
income tax at regular rates generally applicable to United States Persons. Any
such effectively connected dividends received by a corporate Non-U.S. Holder
may, under certain circumstances, be subject to an additional "branch profits
tax" at a 30% rate or such lower rate as may be specified by an applicable
income tax treaty. Certain certification requirements may have to be satisfied
to claim treaty benefits or exemption from withholding under the foregoing
rules. Non-U.S. Holders that are partnerships or trusts may be subject to
certain additional withholding requirements and are urged to consult their tax
advisors as to the application of such requirements.

GAIN ON DISPOSITION OF COMMON STOCK

Except as described below, a Non-U.S. Holder will generally not be subject
to United States federal income tax (and no tax will generally be withheld) with
respect to gain recognized on a sale or the disposition of the Common Stock
unless the gain is effectively connected with a trade or business conducted by
the Non-U.S. Holder in the United States.

FEDERAL ESTATE TAXES

Common Stock held by a Non-U.S. holder who is a non-resident alien
individual (as specially defined for United States federal estate tax purposes)
at the date of his or her death will be included in his or her gross estate for
United States federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise.

22
<PAGE> 47

[ALTERNATE INTERNATIONAL PAGE]

UNITED STATES INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

The Company must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends and other payments distributed to
and the tax withheld with respect to such holder. These information reporting
requirements apply regardless of whether withholding is reduced or eliminated by
an applicable treaty or is not required because the dividends are effectively
connected with a U.S. trade or business of a Non-U.S. Holder. Under certain
treaties, the Internal Revenue Service may make this information available to
their tax authorities in the country of a Non-U.S. Holder's residence.

Backup withholding tax (which generally is a withholding tax imposed at the
rate of 31% on certain payments to persons that are not "exempt recipients" and
that fail to furnish certain information under United States information
reporting requirements) and information reporting relating thereto (which is
separate from the reporting described in the preceding paragraph) generally will
not apply to dividends and other payments paid to a Non-U.S. Holder that are
either (i) subject to the 30% tax discussed above (under the heading
"Dividends"), (ii) not so subject because a tax treaty applies that reduces or
eliminates such withholding or (iii) not so subject because the Non-U.S. Holder
provides to the Internal Revenue Service Form 4224, indicating that such
payments are effectively connected with a trade or business conducted by the
Non-U.S. Holder in the United States. These backup withholding requirements and
information reporting rules will apply to the gross proceeds paid by or through
a United States office of a broker to a Non-U.S. Holder upon the disposition of
shares of the Company, unless the Non-U.S. Holder certifies under penalty of
perjury that it is an exempt foreign person (as specifically defined for this
purpose) or the Non-U.S. Holder otherwise establishes an exemption. Under
existing regulations, information reporting but not backup withholding will also
apply to the payment of gross proceeds of a sale or other disposition of Common
Stock by or through a foreign office of a broker with certain United States
connections, unless the broker has documentary evidence (other than merely a
foreign address) that the holder is a Non-U.S. Holder and the broker has no
actual knowledge to the contrary. Any amounts withheld under the backup
withholding rules from a payment to a Non-U.S. Holder will be refunded (or
credited against the Non-U.S. Holder's United States federal income tax
liability, if any), provided that an appropriate claim for refund is filed with
the Internal Revenue Service. These backup withholding and information reporting
requirements are under review by the United States Treasury Department. Their
application to the ownership and disposition of shares of Common Stock could be
changed by future regulations.

23
<PAGE> 48

[ALTERNATE INTERNATIONAL PAGE]

UNDERWRITING

The International Underwriters named below, for whom PaineWebber
International (U.K.) Ltd., Merrill Lynch International Limited and J.C. Bradford
& Co. are acting as the representatives (the "International Representatives"),
have severally agreed, subject to the terms and conditions of the International
Underwriting Agreement (the "International Underwriting Agreement"), to purchase
from the Company, and the Company has agreed to sell to the International
Underwriters, the number of shares of Common Stock set forth opposite their
names.

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
- ------------------------------------- ---------
<S> <C>
PaineWebber International (U.K.) Ltd...........................................
Merrill Lynch International Limited............................................
J.C. Bradford & Co.............................................................

---------
Total................................................................ 500,000
=======
</TABLE>

The Company has also entered into a U.S. Underwriting Agreement (the "U.S.
Underwriting Agreement") with certain U.S. Underwriters (the "U.S.
Underwriters", together with the International Underwriters, the
"Underwriters"), for whom PaineWebber Incorporated, Merrill Lynch Pierce, Fenner
& Smith Incorporated and J.C. Bradford & Co. are acting as the representatives.
Subject to the terms and conditions of the U.S. Underwriting Agreement, and
concurrently with the sale of 500,000 shares of Common Stock to the
International Underwriters, the Company has agreed to sell to the U.S.
Underwriters, and the U.S. Underwriters have severally agreed to purchase, an
aggregate of 2,000,000 shares of Common Stock. The public offering price per
share and the total underwriting discounts and commissions per share will be
identical in the International Underwriting Agreement and the U.S. Underwriting
Agreement with respect to all shares of Common Stock being purchased by the
Underwriters from the Company.

The International Underwriting Agreement provides that the obligations of
the International Underwriters to purchase the shares of Common Stock are
subject to certain conditions. The International Underwriters are committed to
purchase, and the Company is obligated to sell, all the shares of Common Stock
offered by this prospectus, if any are purchased. In general, the closing with
respect to the sale of the shares of Common Stock pursuant to the International
Underwriting Agreement is a condition to the closing with respect to the sale of
the shares of Common Stock pursuant to the U.S. Underwriting Agreement and vice
versa. PaineWebber International (U.K.) Ltd. is an affiliate of PaineWebber
Incorporated, and Merrill Lynch International Limited is an affiliate of Merrill
Lynch, Pierce, Fenner & Smith Incorporated.

The Company has been advised by the International Representatives that the
International Underwriters propose initially to offer the shares of Common Stock
to the public at the public offering price set forth on the cover page of this
prospectus, and to certain securities dealers at such price less a concession
not in excess of $ per share. The International Underwriters may allow,
and such dealers may reallow, concessions of not more than $ per share on
sales to certain other dealers. After the public offering, the public offering
price and concessions may be changed by the International Representatives.

Each International Underwriter has represented and agreed that, as part of
the distribution of the shares of Common Stock, (a) it is not purchasing any
shares of Common Stock for the account of any U.S. or Canadian Person and (b) it
has not offered or sold, and will not offer or sell, directly or indirectly, any
shares of Common Stock or distribute this prospectus to any person within the
United States or Canada or to any U.S. or Canadian Person. Each U.S. Underwriter
has represented and agreed that, as part of the distribution of the shares of
Common Stock, (a) it is not purchasing any shares of Common Stock for the
account of anyone other than a U.S. or Canadian Person, and (b) it has not
offered or sold, and will not offer or sell,

24
<PAGE> 49

[ALTERNATE INTERNATIONAL PAGE]

directly or indirectly, any shares of Common Stock or distribute the U.S.
Prospectus to any person outside the United States or to anyone other than a
U.S. or Canadian Person. The foregoing limitations do not apply to stabilization
transactions or to certain other transactions specified in the Agreement Between
U.S. and International Underwriters described below. As used herein, "U.S. or
Canadian Person" means any individual who is resident in the United States or
Canada, or any corporation, pension, profit-sharing or other trust or other
entity organized under or governed by the laws of the United States or Canada or
any political subdivision thereof (other than a foreign branch of any U.S. or
Canadian Person), and includes any U.S. or Canadian branch of a non-U.S. or
Canadian Person.

Each International Underwriter has represented and agreed not to offer or
sell Common Stock in Great Britain by means of any document except to persons
whose ordinary business it is to buy or sell shares or debentures, whether as
principal or agent (except in circumstances which do not constitute an offer to
the public within the meaning of the Companies Act 1985 of Great Britain), and,
unless such International Underwriter is a person permitted to do so under the
securities laws of Great Britain, it will not distribute this prospectus or any
other offering material in respect of any proposed offer or sale of Common Stock
in or from Great Britain other than to persons whose business involves the
acquisition and disposal, or the holding, of securities whether as principal or
agent.

The Company and its executive officers and directors have agreed not to
sell, offer to sell or otherwise dispose of shares of Common Stock, Class B
Common Stock or securities convertible into Common Stock or Class B Common Stock
or sell, offer to sell or grant rights, options or warrants with respect to
Common Stock, Class B Common Stock or securities convertible into Common Stock
or Class B Common Stock prior to the expiration of 90 days from the date of this
prospectus, without the prior written consent of PaineWebber Incorporated, other
than pursuant to existing employee stock option plans or in connection with
other employee incentive compensation arrangement of the Company and issuances
of Common Stock upon conversion of securities outstanding as of the date of this
prospectus.

The Company has agreed to indemnify the International Underwriters and the
U.S. Underwriters and their controlling persons against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the
"Securities Act"), or to contribute to payments the U.S. Underwriters and the
International Underwriters may be required to make in respect thereof.

25
<PAGE> 50

[ALTERNATE INTERNATIONAL PAGE]

LEGAL MATTERS

EXPERTS

AVAILABLE INFORMATION

26
<PAGE> 51

[ALTERNATE INTERNATIONAL PAGE]

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

(1) The Company's Annual Report on Form 10-K for the year ended March
31, 1995.

(2) The description of the Company's Common Stock and Class B Common
Stock contained in the Registration Statement on Form 8-A filed on May 26,
1995.

27
<PAGE> 52

[ALTERNATE INTERNATIONAL PAGE]

- ------------------------------------------------------
- ------------------------------------------------------

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Use of Proceeds....................... 6
Price Range of Common Stock and Class
B Common Stock...................... 6
Dividend Policy....................... 7
Capitalization........................ 7
Selected Consolidated Financial
Data................................ 8
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 9
Business.............................. 13
Management............................ 18
Description of Capital Stock.......... 19
United States Taxation of Non-U.S.
Shareholders........................ 22
Underwriting.......................... 24
Legal Matters......................... 26
Experts............................... 26
Available Information................. 26
Incorporation of Certain Information
by Reference........................ 27
Index to Consolidated Financial
Statements.......................... F-1
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------

2,500,000 SHARES

THOMAS NELSON, INC.

COMMON STOCK

------------------------

PROSPECTUS
------------------------
PAINEWEBBER INTERNATIONAL

MERRILL LYNCH
INTERNATIONAL LIMITED

J.C. BRADFORD & CO.
------------------------

, 1995

- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 53

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

<TABLE>
<S> <C>
SEC Registration Fee...................................................... $ 19,456
NASD Filing Fee........................................................... 6,142
Listing Fees.............................................................. 36,900
Legal Fees and Expenses................................................... 60,000
Blue Sky Fees and Expenses................................................ 5,000
Accounting Fees and Expenses.............................................. 20,000
Printing and Engraving.................................................... 50,000
Miscellaneous............................................................. 2,502
--------
Total........................................................... $200,000
========
</TABLE>

Except for the SEC Registration Fee and the NASD Filing Fee, all expenses
are estimated. All of the above-mentioned expenses will be borne by the
Registrant.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Tennessee Business Corporation Act ("TBCA") provides that a corporation
may indemnify any of its directors and officers against liability incurred in
connection with a proceeding if (i) such person acted in good faith; (ii) in the
case of conduct in an official capacity with the corporation, such person
reasonably believed such conduct was in the corporation's best interests; (iii)
in all other cases, such person reasonably believed that his or her conduct was
at least not opposed to the best interests of the corporation; and (iv) in
connection with any criminal proceeding, such person had no reasonable cause to
believe his conduct was unlawful. In actions brought by or in the right of the
corporation, however, the TBCA provides that no indemnification may be made if
the director or officer was adjudged to be liable to the corporation. The TBCA
also provides that in connection with any proceeding charging improper personal
benefit to an officer or director, no indemnification may be made if such
officer or director is adjudged liable on the basis that such personal benefit
was improperly received. Notwithstanding the foregoing, the TBCA provides that a
court of competent jurisdiction, unless the corporation's charter provides
otherwise, upon application, may order that an officer or director be
indemnified for reasonable expenses if, in consideration of all relevant
circumstances, the court determines that such individual is fairly and
reasonably entitled to indemnification, notwithstanding the fact that (i) such
officer or director was adjudged liable to the corporation in a proceeding by or
in right of the corporation; (ii) such officer or director was adjudged liable
on the basis that personal benefit was improperly received by him; or (iii) such
officer or director breached his duty of care to the corporation.

The Company's Amended and Restated Charter and Amended Bylaws provide that
to the fullest extent permitted by law no director shall be personally liable to
the Company or its shareholders for monetary damages for breach of any fiduciary
duty as a director. Under the TBCA, this provision relieves the Company's
directors from personal liability to the Company or its shareholders for
monetary damages for breach of fiduciary duty as a director, except for
liability arising from a judgment or other final adjudication establishing (i)
any breach of the director's duty of loyalty, (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, or
(iii) any unlawful distributions.

Reference is made to the U.S. Underwriting Agreement and the International
Underwriting Agreement filed as Exhibits 1.1 and 1.2, respectively, to this
Registration Statement for certain provisions as to the indemnification of the
Company's officers and directors by the Underwriters in connection with this
offering.

The Company currently has in effect an executive liability insurance policy
which provides coverage for its directors and officers in amounts of $20 million
per claim and $20 million for annual aggregate claims. The policy covers any
error, misstatement, act or omission, or breach of duty committed by a director
or officer, subject to certain specified exclusions.

II-1
<PAGE> 54

ITEM 16. EXHIBITS

See Index to Exhibits on page II-4.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bone fide offering
thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to the initial bona fide offering thereof.

II-2
<PAGE> 55

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-3, and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Nashville, State of Tennessee, on the 13th day
of July, 1995.

THOMAS NELSON, INC.

By: /s/ JOE L. POWERS
------------------------------------
Joe L. Powers
Executive Vice President and
Secretary

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- -------------------------------- --------------

<C> <S> <C>
* Chairman of the Board of July 13, 1995
- --------------------------------------------- Directors, Chief Executive
Sam Moore Officer and President
(Principal Executive Officer)

/s/ JOE L. POWERS Executive Vice President and July 13, 1995
- --------------------------------------------- Secretary (Principal Financial
Joe L. Powers and Accounting Officer)

* Director July 13, 1995
- ---------------------------------------------
Joe M. Rodgers

Director
- ---------------------------------------------
Brownlee O. Currey, Jr.

* Director July 13, 1995
- ---------------------------------------------
W. Lipscomb Davis, Jr.

* Director July 13, 1995
- ---------------------------------------------
Robert J. Niebel, Sr.

* Director July 13, 1995
- ---------------------------------------------
Millard V. Oakley

Director
- ---------------------------------------------
Andrew Young

* Director July 13, 1995
- ---------------------------------------------
Cal Turner, Jr.

*By: /s/ JOE L. POWERS
- ---------------------------------------------
Joe L. Powers
Attorney-in-fact
</TABLE>

II-3
<PAGE> 56

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ -------------------------------------------------------------------------- ----------
<C> <S> <C> <C>
1.1 -- Form of U.S. Underwriting Agreement.*
1.2 -- Form of International Underwriting Agreement.
4.1 -- Amended and Restated Charter of the Registrant (filed as Exhibit 4.1 to
Registrant's Registration Statement on Form S-8 (Commission File No.
33-80086) and incorporated herein by reference).
4.2 -- Amended Bylaws of the Registrant (filed as Exhibit 3(b) to the
Registrant's Annual Report on Form 10-K for the fiscal year ended March
31, 1990 and incorporated herein by reference).
4.3 -- Loan Agreement dated December 1, 1976, between the Registrant and The
Industrial Development Board of Metropolitan Government of Nashville and
Davidson County (filed as Exhibit 3 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended March 31, 1977 and incorporated herein
by reference).
4.4 -- Promissory Note dated December 1, 1976, of the Registrant payable to The
Industrial Development Board of the Metropolitan Government of Nashville
and Davidson County (filed as Exhibit 4 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended March 31, 1977 and incorporated
herein by reference).
4.5 -- Deed of Trust and Security Agreement dated December 1, 1976, from the
Registrant to Third National Bank in Nashville (filed as Exhibit 5 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended March
31, 1977 and incorporated herein by reference).
4.6 -- Loan Agreement dated May 18, 1990, between the Registrant and The
Industrial Development Board of The Metropolitan Government of Nashville
and Davidson County (filed as Exhibit 4(e) to the Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31, 1990 and
incorporated herein by reference).
4.7 -- Promissory Note dated May 18, 1990, of the Registrant payable to The
Industrial Development Board of the Metropolitan Government of Nashville
and Davidson County (filed as Exhibit 4(f) to the Registrant's Annual
Report on Form 10-K for the fiscal year ended March 31, 1990 and
incorporated herein by reference).
4.8 -- Deed of Trust and Security Agreement dated May 18, 1990, from the
Registrant to Third National Bank in Nashville (filed as Exhibit 4.6 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
March 31, 1991 and incorporated herein by reference).
4.9 -- Construction and Term Loan Agreement dated March 31, 1992, between the
Registrant and Third National Bank in Nashville (filed as Exhibit 4.7 to
Registrant's Annual Report on Form 10-K for the fiscal year ended March
31, 1992 and incorporated herein by reference).
4.10 -- Promissory Note dated March 31, 1992, of the Registrant payable to Third
National Bank in Nashville (filed as Exhibit 4.8 to the Registrant's
Annual Report on
Form 10-K for the fiscal year ended March 31, 1992 and incorporated herein
by reference).
4.11 -- Deed of Trust and Security Agreement dated March 31, 1992, from the
Registrant to Third National Bank in Nashville (filed as Exhibit 4.9 to
the Registrant's Annual Report on Form 10-K for the fiscal year ended
March 31, 1992 and incorporated herein by reference).
</TABLE>

II-4
<PAGE> 57

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ -------------------------------------------------------------------------- ----------
<C> <S> <C> <C>
4.12 -- Credit Agreement dated as of November 30, 1992, among the Registrant,
Third National Bank in Nashville, First National Bank of Louisville, First
American National Bank in Nashville, Nationsbank of Texas, N.A. in Dallas,
and Creditanstalt-Bankverein in New York (filed as Exhibit 28 to the
Registrant's Form 8-K dated December 11, 1992 and incorporated herein by
reference).
4.13 -- First Amendment to Credit Agreement dated as of February 26, 1993, among
the Registrant, Third National Bank in Nashville, First National Bank of
Louisville, First American National Bank in Nashville, NationsBank of
Texas, N.A. in Dallas, and Creditanstalt-Bankverein in New York. (filed as
Exhibit 4.11 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended March 31, 1995 and incorporated herein by reference).
4.14 -- Second Amendment to Credit Agreement dated as of September 19, 1994, among
the Registrant, Third National Bank in Nashville, First National Bank of
Louisville, First American National Bank of Nashville, NationsBank of
Texas, N.A. in Dallas, and Creditanstalt-Bankverein in New York. (filed as
Exhibit 4.12 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended March 31, 1995 and incorporated herein by reference).
4.15 -- Third Amendment to Credit Agreement dated as of December 23, 1994, among
the Registrant, Third National Bank in Nashville, First National Bank of
Louisville, First American National Bank in Nashville, NationsBank of
Texas, N.A. in Dallas, and Creditanstalt-Bankverein in New York. (filed as
Exhibit 4.13 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended March 31, 1995 and incorporated herein by reference).
4.16 -- Fourth Amendment to Credit Agreement and First Amendment to Revolving
Credit Notes dated as of March 13, 1995, among the Registrant, Third
National Bank in Nashville, First National Bank of Louisville, First
American National Bank in Nashville, NationsBank of Texas, N.A. in Dallas,
and Creditanstalt-Bankverein in New York. (filed as Exhibit 4.14 to the
Registrant's Annual Report on Form 10-K for the fiscal year ended March
31, 1995 and incorporated herein by reference).
4.17 -- Indenture dated as of November 30, 1992, by and between Thomas Nelson,
Inc. and Boatman's Trust Registrant (filed as Exhibit 4 to the
Registrant's Form 8-K dated December 11, 1992 and incorporated herein by
reference).
5 -- Opinion of Bass, Berry & Sims, counsel to Registrant, as to the legality
of the Common Stock being registered.*
23.1 -- Consent of Arthur Andersen LLP.*
23.2 -- Consent of Bass, Berry & Sims (included in Exhibit 5).*
24 -- Power of Attorney.*
</TABLE>

- ---------------

* previously filed

II-5

<PAGE> 1

EXHIBIT 1.2

500,000 SHARES
THOMAS NELSON, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
(International version)

July __, 1995

PAINEWEBBER INTERNATIONAL (U.K.) LTD.
MERRILL LYNCH INTERNATIONAL LIMITED
J.C. BRADFORD & CO.
As Managers of the several International Underwriters
c/o PaineWebber International (U.K.) Ltd.
1 Finsbury Avenue
London EC2M 2PA
England

Dear Sirs:

Thomas Nelson, Inc., a Tennessee corporation (the "Company")
proposes to sell an aggregate of 500,000 shares (the "International Shares") of
the Company's Common Stock, $1.00 par value per share (the "Common Stock"), to
you and to the other underwriters named in Schedule I (collectively, the
"International Underwriters"), for whom you are acting as managers (the
"Managers"), in connection with the offering and the sale of such shares of
Common Stock outside the United States and Canada to persons other than United
States or Canadian Persons. The U.S. Shares (as hereinafter defined) and the
International Shares are referred to collectively herein as the "Shares."

It is understood that the Company is concurrently entering
into an agreement (the "U.S. Underwriting Agreement") providing for the sale by
the Company of an aggregate of 2,000,000 shares of Common Stock (the "U.S. Firm
Shares"), through arrangements with certain underwriters in the United States
and Canada (the "U.S. Underwriters"), for whom PaineWebber Incorporated,
Merrill Lynch & Co. and J.C. Bradford & Co. are acting as representatives (the
"Representatives"). The Company has also agreed to grant to the U.S.
Underwriters an option (the "U.S. Option") to purchase up to an additional
375,000 shares of Common Stock (the "U.S. Option Shares"). The U.S.
Underwriters and International Underwriters are referred to herein collectively
as the "Underwriters". As used herein, "United States or Canadian Person"
means any individual who is a resident in the United States or Canada, or any
corporation, pension, profit-sharing or other trust or other entity
<PAGE> 2

organized under or governed by the laws of the United States or Canada or any
political subdivision thereof (other than the foreign branch of any United
States or Canadian Person) and includes any United States or Canadian branch of
a person other than a United States or Canadian Person. Terms used herein but
not defined herein shall have the respective meanings ascribed to such terms in
the U.S. Underwriting Agreement.

The U.S. Underwriters have entered into an agreement with the
International Underwriters (the "Agreement Between U.S. Underwriters and
International Underwriters") contemplating the coordination of certain
transactions between the U.S. Underwriters and the International Underwriters
and any such transactions between the U.S. Underwriters and the International
Underwriters shall be governed by the Agreement Between U.S. Underwriters and
International Underwriters and shall not be governed by terms of this
Agreement.

The public offering price per share for the International
Shares and the purchase price per share for the International Shares to be paid
by the several International Underwriters shall be agreed upon by the Company
and the Managers, acting on behalf of the several International Underwriters,
and such agreement shall be set forth in a separate written instrument
substantially in the form of Exhibit A hereto (the "Price Determination
Agreement"). The Price Determination Agreement may take the form of an
exchange of any standard form of written telecommunication among the Company
and the Managers and shall specify such applicable information as is indicated
in Exhibit A hereto. The offering of the International Shares will be governed
by this Agreement, as supplemented by the Price Determination Agreement. From
and after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context otherwise indicates, all references contained herein to "this
Agreement" and to the phrase "herein" shall be deemed to include the Price
Determination Agreement. The purchase price per share to be paid by the
several U.S. Underwriters and the public offering price per share for the U.S.
Shares shall be identical to the purchase price per share to be paid by the
several International Underwriters and the public offering price per share, for
the International Shares hereunder, respectively.

The Company confirms as follows its agreements with the
Managers and the several other International Underwriters.

1. Agreement to Sell and Purchase.

(a) On the basis of the representations,
warranties and agreements of the Company herein contained and subject to all
the terms and conditions of this Agreement, the Company agrees to sell to each
International Underwriter named below, and each International Underwriter,
severally and not jointly, agrees to purchase from the Company in accordance
with Section 1(c) or 1(d) and set forth in the Price Determination Agreement,
the number of International Shares set forth opposite the name of such
International Underwriter in Schedule I, plus such additional number of
International Shares which such International Underwriter may become obligated
to purchase pursuant to Section

- 2 -
<PAGE> 3

8 hereof. If the Company elects to rely on Rule 430A (as defined), Schedule I
may be attached to the Price Determination Agreement.

(b) Intentionally omitted.

(c) If the Company has elected not to rely on
Rule 430A, the public offering price per share for the International Shares and
the purchase price per share for the International Shares to be paid by the
several International Underwriters shall be agreed upon and set forth in the
Price Determination Agreement, which shall be dated the date hereof, and an
amendment to the Registration Statement (as hereinafter defined) containing
such per share price information shall be filed before the Registration
Statement becomes effective.

(d) If the Company has elected to rely on Rule
430A, the public offering price per share for the International Shares and the
purchase price per share for the International Shares to be paid by the several
International Underwriters shall be agreed upon and set forth in the Price
Determination Agreement. In the event that the Price Determination Agreement
has not been executed by the close of business on the fourth business day
following the date on which the Registration Statement becomes effective, this
Agreement shall terminate forthwith, without liability of any party to any
other party except that Section 6 shall remain in effect.

(e) Each of the International Underwriters agrees
that (i) it has not solicited, and will not solicit offers to purchase the
International Shares, (ii) it has not sold and will not sell any of the
International Shares and (iii) it has not distributed and will not distribute
the International Preliminary Prospectus or the International Prospectus, as
the case may be, to any person or entity in any jurisdiction outside the United
States or Canada, except in each case, in compliance in all material respects
with all applicable laws of such jurisdiction.

2. Delivery and Payment. Delivery of the International
Shares shall be made (either physically or via Depository Trust Company
transfer) to the Managers for the accounts of the International Underwriters
against payment of the purchase price by wire transfer [note - this will result
in the payment of interest for one day by the Company to the Underwriters] of
funds to the account or accounts designated by the Company at the office of
Shereff, Friedman, Hoffman & Goodman, LLP, 919 Third Avenue, New York, New York
10022, at 10:00 a.m., New York City time, on the third business day following
the date of this Agreement or, if the Company has elected to rely on Rule 430A,
the third business day after the date on which the first bona fide offering of
the International Shares to the public is made by the International
Underwriters, or at such time on such other date, not later than seven business
days after the date of this Agreement, as may be agreed upon by the Company and
the International Underwriters (such date is hereinafter referred to as the
"Closing Date").

- 3 -
<PAGE> 4

Certificates evidencing the International Shares, if any,
shall be in definitive form and shall be registered in such names and in such
denominations as the International Underwriters shall request at least two
business days prior to the Closing Date by written notice to the Company. For
the purpose of expediting the checking and packaging of certificates for the
International Shares, the Company agrees to make such certificates available
for inspection at least 24 hours prior to the Closing Date.

The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the International Shares by the Company to
each of the International Underwriters shall be borne by the Company. The
Company will pay and save each International Underwriter and any subsequent
holder of the International Shares harmless from any and all liabilities with
respect to or resulting from any failure or delay in paying Federal and state
stamp and other transfer taxes, if any, which may be payable or determined to
be payable in connection with the original issuance or sale to such
International Underwriter of the International Shares.

3. Representations and Warranties of the Company.

The Company represents, warrants and covenants to each
International Underwriter that:

(a) The Company meets the requirements for use of
Form S-3 and a registration statement (Registration No. 33-60615) on Form S-3
relating to the International Shares, including a preliminary prospectus and
such amendments to such registration statement as may have been required to the
date of this Agreement, has been prepared by the Company under the provisions
of the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (collectively referred to as the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has been
filed with the Commission. The registration statement contains the forms of
two preliminary prospectuses to be used in connection with the offering and
sale of the Shares: a United States preliminary prospectus (the "U.S.
Preliminary Prospectus") relating to the U.S. Shares and an international
preliminary prospectus relating to the International Shares (the "International
Preliminary Prospectus"; the U.S. Preliminary Prospectus and the International
Preliminary Prospectus are referred to collectively herein as the "preliminary
prospectus"). The International Preliminary Prospectus is identical to the U.S.
Preliminary Prospectus, except for differences in the outside front cover page,
the back cover page and the text of the section headed "Underwriting" and
except for the inclusion in the International Preliminary Prospectus of a
section headed "United States Taxation of Foreign Shareholders." The term
"preliminary prospectus" as used herein means a preliminary prospectus as
contemplated by Rule 430 or Rule 430A of the Rules and Regulations included at
any time as part of the registration statement. Copies of such registration
statement and amendments, copies of each related U.S. Preliminary Prospectus
have been delivered to each of the Representatives and copies of each related
International Preliminary Prospectus have been delivered to the Managers. If
such registration statement has not become effective, a further amendment to

- 4 -
<PAGE> 5

such registration statement, including a form of final prospectus, necessary to
permit such registration statement to become effective will be filed promptly
by the Company with the Commission. If such registration statement has become
effective, a final prospectus containing information permitted to be omitted at
the time of effectiveness by Rule 430A of the Rules and Regulations will be
filed promptly by the Company with the Commission in accordance with Rule
424(b) of the Rules and Regulations. The term "Registration Statement" means
the registration statement as amended at the time it becomes or became
effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed to be included by Rule 430A. The term
"Prospectus" means, collectively, (i) a prospectus relating to the U.S. Shares
(the "U.S. Prospectus") and (ii) a prospectus relating to the International
Shares (the "International Prospectus"), in the respective forms they are first
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
or, if no such filing is required, the forms of final prospectus included in
the Registration Statement at the Effective Date. Any reference herein to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or before the Effective Date
or the date of such preliminary prospectus or the Prospectus, as the case may
be.

(b) On the Effective Date, the date the
Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent thereto up to and including the Closing Date
and, if later, the U.S. Option Closing Date and when any post-effective
amendment to the Registration Statement becomes effective or any amendment or
supplement to the Prospectus is filed with the Commission, the Registration
Statement and the Prospectus (as amended or as supplemented if the Company
shall have filed with the Commission any amendment or supplement thereto),
including the financial statements included or incorporated by reference in the
Prospectus, did or will comply with all applicable provisions of the Act, the
Exchange Act, the rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and the Rules and Regulations and will contain all statements
required to be stated therein in accordance with the Act, the Exchange Act, the
Exchange Act Rules and Regulations and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement, the
Prospectus or any such amendment or supplement did or will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the U.S. Option Closing Date, the Prospectus did not or
will not contain any untrue statement of a material fact or omit to state a
material fact necessary, to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
representations and warranties in this Section 3(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to any International Underwriter furnished in writing to the Company
by or on behalf of any

- 5 -
<PAGE> 6

Manager specifically for inclusion in the Registration Statement or Prospectus
or any amendment or supplement thereto. The Company acknowledges that the
statements set forth under the heading "Underwriting" in the Prospectus, the
last paragraph on the cover page of the Prospectus, and the stabilizing legend
on the inside cover page of the Prospectus constitute the only information
relating to any International Underwriter furnished in writing to the Company
by the International Underwriters specifically for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. The
Company has not distributed any offering material in connection with the
offering or sale of the International Shares other than the Registration
Statement, the preliminary prospectus, the Prospectus or any other materials,
if any, permitted by the Act.

(c) The documents which are incorporated by
reference in the preliminary prospectus and the Prospectus or from which
information is so incorporated by reference, when they become effective or were
filed with the Commission, as the case may be, complied in all material
respects with the requirements of the Act or the Exchange Act, as applicable,
the Exchange Act Rules and Regulations and the Rules and Regulations, and any
documents so filed [prior to the termination of this offering] and incorporated
by reference subsequent to the Effective Date shall, when they are filed with
the Commission, conform in all material respects with the requirements of the
Act and the Exchange Act, as applicable, the Exchange Act Rules and Regulations
and the Rules and Regulations.

(d) The only subsidiaries (as defined in the
Rules and Regulations) of the Company which are "Significant Subsidiaries" (as
defined in Rule 1-02 of Regulation S-X promulgated under the Rules and
Regulations) are the subsidiaries listed on Exhibit B hereto (the
"subsidiaries"). The Company and each of its subsidiaries is, and at the
Closing Date will be, a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. The Company
and each of its subsidiaries has, and at the Closing Date will have, full power
and authority to conduct all the activities conducted by it, to own or lease
all the assets owned or leased by it and to conduct its business as described
in the Registration Statement and the Prospectus. The Company and each of its
subsidiaries is, and at the Closing Date will be, duly licensed or qualified to
do business and in good standing as a foreign corporation in all jurisdictions
in which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification necessary
and where the failure to so qualify would have a material adverse effect upon
the Company. [Except for the stock of the subsidiaries and as disclosed in the
Registration Statement or on Exhibit C hereto, the Company does not own, and at
the Closing Date will not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or other
entity.] Complete and correct copies of the charter or certificate of
incorporation and of the by-laws of the Company and each of the subsidiaries
and all amendments thereto have been delivered to the Managers, and no changes
therein will be made subsequent to the date hereof and prior to the Closing
Date or, if later, the U.S. Option Closing Date.

- 6 -
<PAGE> 7

(e) The outstanding shares of Common Stock have
been, and the International Shares to be issued and sold by the Company upon
such issuance will be, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right. The
description of the Common Stock in the Registration Statement and the
Prospectus is complete and accurate in all material respects. Except as set
forth in the Prospectus, the Company does not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
any shares of Common Stock, any shares of capital stock of any subsidiary or
any such warrants, convertible securities or obligations.

(f) The financial statements and schedules
included or incorporated by reference in the Registration Statement or the
Prospectus present fairly the financial condition of the Company as of the
respective dates thereof and the results of operations and cash flows of the
Company for the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in the
Prospectus. No other financial statements or schedules of the Company are
required by the Act, the Exchange Act or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. Arthur Andersen LLP
(the "Accountants") who have reported on such financial statements and
schedules, are independent accountants with respect to the Company as required
by the Act and the Rules and Regulations.

(g) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; and (iii) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(h) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus and
prior to the Closing Date, except as set forth in or contemplated by the
Registration Statement and the Prospectus, (i) there has not been any material
change in the capitalization of the Company, or in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and the subsidiaries, arising for any reason whatsoever, (ii)
neither the Company nor any of the subsidiaries has incurred any material
liabilities or obligations, direct or contingent, nor has it entered into any
material transactions not in the ordinary course of business other than
pursuant to this Agreement and the transactions referred to herein and (iii)
the Company has not and will not have paid or declared any dividends or other
distributions of any kind on any class of its capital stock.

- 7 -
<PAGE> 8

(i) The Company is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended.

(j) Except as set forth in the Registration
Statement and the Prospectus, there are no actions, suits or proceedings
against or affecting the Company or any of the subsidiaries or any of their
officers in their capacity as such, before or by any Federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign which are pending, or to the knowledge of the Company
threatened, wherein an unfavorable ruling, decision or finding might materially
and adversely affect the Company or its business, properties, business
prospects, condition (financial or otherwise) or results of operations.

(k) The Company and each of the subsidiaries has
(i) all material governmental licenses, permits, consents, orders, approvals
and other authorizations necessary to carry on its business as contemplated in
the Prospectus, (ii) complied in all material respects with all laws,
regulations and orders applicable to it or its business and (iii) performed all
its obligations required to be performed by it, and is not in default, under
any material contract or other instrument to which it is a party or by which
its property is bound or affected. To the best knowledge of the Company and
each of the subsidiaries, no other party under any material contract or other
material instrument to which it is a party is in default in any material
respect thereunder. Neither the Company nor any of the subsidiaries is in
violation of any provision of its charter or certificate of incorporation or
by-laws.

(l) No consent, approval, authorization or order
of, or any filing or declaration with, any court or governmental agency or body
is required for the consummation by the Company of the transactions on its part
herein contemplated, except such as have been obtained under the Act or the
Rules and Regulations and such as may be required under state securities or
Blue Sky laws or the by-laws and rules of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the purchase and
distribution by the U.S. Underwriters of the U.S. Shares.

(m) The Company has full corporate power and
authority to enter into this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof except that no representation is being made
with respect to the enforceability under the Act or the Rules and Regulations
of any indemnification provisions contained in this Agreement. The performance
of this Agreement and the consummation of the transactions contemplated hereby
will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of the subsidiaries
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the charter or certificate of
incorporation or by-laws of

- 8 -
<PAGE> 9

the Company or any of the subsidiaries, any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company or any of the subsidiaries is a party or by
which the Company or any of the subsidiaries or any of its properties is bound,
or violate or conflict with any judgment, ruling, decree, order, statute, rule
or regulation of any court or other governmental agency or body applicable to
the business or properties of the Company or any of the subsidiaries.

(n) The Company and each of the subsidiaries has
good and marketable title to all properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges, encumbrances
or restrictions, except such as are described in the Prospectus or are not
material to the business of the Company and the subsidiaries taken as a whole.
The Company and each of the subsidiaries has valid, subsisting and enforceable
leases for the properties described in the Prospectus as leased by it, with
such exceptions as are not material and do not materially interfere with the
use made and proposed to be made of such properties by the Company and such
subsidiaries.

(o) There is no document or contract of a
character required to be described in or incorporated into the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required. All such contracts to
which the Company or any subsidiary is a party have been duly authorized,
executed and delivered by the Company or such subsidiary, constitute valid and
binding agreements of the Company or such subsidiary and are enforceable
against the Company or such subsidiary in accordance with the terms thereof.

(p) No statement, representation, warrant, or
covenant made by the Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the Managers was or will
be, when made, inaccurate, untrue or incorrect in any material respect.

(q) Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
designed, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the International Shares.

(r) No holder of securities of the Company has
rights to the registration of any securities of the Company because of the
filing of the Registration Statement.

(s) The Company owns or possesses adequate
licenses or other rights to use all of the trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights,
licenses and rights without which there would be a

- 9 -
<PAGE> 10

materially adverse impact on the business of the Company as described in, or
contemplated by the Prospectus and without any known conflict with the rights
of others.

(t) Neither the Company nor any of the
subsidiaries is involved in any material labor dispute nor, to the knowledge of
the Company, is any such dispute threatened.

(u) Neither the Company nor any of the
subsidiaries nor, to the Company's knowledge, any employee or agent of the
Company or any subsidiary has made any payment of funds of the Company or any
subsidiary or received or retained any funds in violation of any law, rule or
regulation or of a character required to be disclosed in the Prospectus.

4. Agreements of the Company.

The Company agrees with the several International Underwriters
as follows:

(a) The Company will not, either prior to the
Effective Date or thereafter during such period as the Prospectus is required
by law to be delivered in connection with sales of the U.S. Shares by a U.S.
Underwriter or dealer, file any amendment or supplement to the Registration
Statement or the Prospectus, unless a copy thereof shall first have been
submitted to the Managers within a reasonable period of time prior to the
filing thereof and the Managers shall not have objected thereto in good faith.

(b) The Company will use its best efforts to
cause the Registration Statement to become effective. The Company will notify
the Managers promptly, and will confirm such advice in writing, (1) when the
Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or
for additional information, (3) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose or the threat thereof, (4) of
the happening of any event during the period mentioned in the second sentence
of Section 4(e) that in the judgment of the Company makes any statement made in
the Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to make
the statements therein, in light of the circumstances in which they are made,
not misleading and (5) of receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission relating
to the Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430A of the Rules and Regulations, the
Company will use its best

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<PAGE> 11

efforts to comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430A and to notify the Managers promptly
of all such filings.

(c) The Company will furnish to each of the
Managers without charge, two signed copies of the Registration Statement and of
any post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus).

(d) The Company will comply with all the
provisions of any undertakings contained in the Registration Statement.

(e) On the Effective Date, and thereafter from
time to time, the Company will deliver to each of the International
Underwriters, without charge, as many copies of the Prospectus or any amendment
or supplement thereto as the Managers may reasonably request. The Company
consents to the use of the Prospectus or any amendment or supplement thereto by
the International Underwriters and by all dealers to whom the International
Shares may be sold, both in connection with the offering or sale of the
International Shares and for any period of time thereafter during which the
Prospectus is required by law to be delivered in connection therewith. If
during such period of time any event shall occur which in the judgment of the
Company or counsel to the International Underwriters should be set forth in the
Prospectus in order to make any statement therein, in the light of the
circumstances under which it was made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement
or amendment thereto, and will deliver to each of the International
Underwriters, without charge, such number of copies thereof as they may
reasonably request. The Company shall not file any document under the Exchange
Act before the termination of the offering of the International Shares by the
International Underwriters if such document would be deemed to be incorporated
by reference into the Prospectus unless a copy thereof shall have first been
submitted to the Managers within a reasonable period of time prior to the
filing thereof and the Managers shall not have objected thereto in good faith.

(f) Prior to any public offering of the
International Shares by the International Underwriters, the Company will
cooperate with the Managers and their counsel in connection with the
registration or qualification of the International Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Managers may
request including, without limitation, jurisdictions outside of the United
States; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to general service of process in any jurisdiction
where it is not now so subject.

(g) During the period of five years commencing on
the Effective Date, the Company will furnish to each of the Managers copies of
such financial statements

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<PAGE> 12

and other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and will
furnish to the Managers and each other International Underwriter who may so
request a copy of each annual or other report it shall be required to file with
the Commission.

(h) The Company will make generally available to
holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which need
not be audited but shall be in reasonable detail) for a period of 12 months
ended commencing after the Effective Date, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).

(i) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the Managers, all costs and expenses
(excluding fees and expenses of the International Underwriters counsel, except
as specifically provided in this Section 4) incident to the performance of the
obligations of the Company under this Agreement, including but not limited to
costs and expenses of or relating to (1) the preparation, printing and filing
of the Registration Statement and exhibits to it, each preliminary prospectus,
the Prospectus and any amendment or supplement to the Registration Statement or
the Prospectus, (2) the preparation and delivery of certificates representing
the International Shares, (3) the printing of this Agreement, any Agreement
among International Underwriters, any Dealer Agreements and any International
Underwriters' Questionnaire, (4) furnishing (including costs of shipping and
mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as may be
requested for use in connection with the offering and sale of the International
Shares by the International Underwriters or by dealers to whom International
Shares may be sold, (5) the listing of the International Shares on the New York
Stock Exchange (6) any filings required to be made by the International
Underwriters with the NASD, and the [fees], disbursements and other charges of
counsel for the International Underwriters in connection therewith, (7) the
registration or qualification of the International Shares for offer and sale
under the securities or Blue Sky laws of such jurisdictions designated pursuant
to Section 4(f), including the fees, disbursements and other charges of counsel
to the International Underwriters in connection therewith, and the preparation
and printing of preliminary, supplemental and final Blue Sky memoranda, (8)
counsel to the Company and (9) the transfer agent for the International Shares,
it being understood, however, that except as provided in Section 2, Section
4(j), Section 6 and this Section 4(i), the International Underwriters shall pay
all of their own costs and expenses, including the fees of their counsel and
stock transfer taxes on resale of any of the shares by them.

(j) If this Agreement shall be terminated by the
Company pursuant to any of the provisions hereof (otherwise than pursuant to
Section 8) or if for any reason the Company shall be unable to perform its
obligations hereunder, [except in either case due to a breach by the
International Underwriters of their obligations hereunder or due to the

- 12 -
<PAGE> 13

happening of any of the events set forth in Sections 7(i) - 7(iv) hereof] the
Company will reimburse the several International Underwriters for all
out-of-pocket expenses (including the [reasonable] fees, disbursements and
other charges of counsel to the International Underwriters) reasonably incurred
by them in connection herewith [,but in no event shall such obligation for
reimbursement hereunder exceed $50,000 in the aggregate.]

(k) The Company will not at any time, directly or
indirectly, take any action designed, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock or Class B Common Stock, par value $1.00 per share (the
"Class B Common Stock") of the Company, to facilitate the sale or resale of any
of the International Shares.

(l) The Company will apply the net proceeds from
the offering and sale of the International Shares to be sold by the Company in
the manner set forth in the Prospectus under "Use of Proceeds".

(m) The Company will not, and will cause its
directors and executive officers to enter into agreements with the Managers to
the effect that they will not, for a period of 90 days after the commencement
of the public offering of the International Shares without the prior written
consent of the Managers, sell, contract to sell or otherwise dispose of any
shares of Common Stock, Class B Common Stock or rights to acquire such shares
(other than pursuant to employee stock option plans or in connection with other
employee incentive compensation arrangements or pursuant to bona fide gift
transactions provided the donee is subject to, and agrees to be bound by, such
agreement).

5. Conditions of the Obligations of the International
Underwriters.

In addition to the execution and delivery of the Price
Determination Agreement, the obligations of each International Underwriter
hereunder are subject to the following conditions:

(a) Notification that the Registration Statement
has become effective shall be received by the Managers not later than 5:00
p.m., New York City time, on the date of this Agreement or at such later date
and time as shall be consented to in writing by the Managers and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations shall have been
made.

(b) (i) No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall be pending or to the knowledge of the
International Underwriters or of the Company threatened by the Commission, (ii)
no order suspending the effectiveness of the Registration Statement or the
qualification or registration of the International Shares under the securities
or Blue Sky laws of any jurisdiction shall be in effect and no proceeding for
such purpose shall be pending before or to the knowledge of the International
Underwriters or of the Company

- 13 -
<PAGE> 14

threatened or contemplated by the Commission of the authorities of any such
jurisdiction which in the good faith judgment of the International Underwriters
would make it impracticable to market the International Shares, (iii) any
request for additional information on the part of the staff of the Commission
or any such authorities shall have been complied with to the satisfaction of
the staff of the Commission or such authorities and (iv) after the date hereof
no amendment or supplement to the Registration Statement or the Prospectus
shall have been filed unless a copy thereof was first submitted to the Managers
and the Managers did not object thereto in good faith, and the Managers shall
have received certificates, dated the Closing Date and signed by the Chief
Executive Officer or the Chairman of the Board of Directors of the Company and
the Chief Financial Officer of the Company (who may, as to proceedings
threatened, rely upon the best of their information and belief), to the effect
of clauses (i), (ii) and (iii).

(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i)
there shall not have been a material adverse change in the general affairs,
business, business prospects, properties, management, condition (financial or
otherwise) or results of operations of the Company and the subsidiaries, taken
as a whole, whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (ii) neither the Company nor any
of the subsidiaries shall have sustained any material loss or interference with
its business or properties from fire, explosion, flood or other casualty,
whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree which is not set
forth in the Registration Statement and the Prospectus if [in the good faith
judgment of the Managers] any such development [would materially and adversely
affect the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company and the subsidiaries taken
as a whole] [makes it impracticable or inadvisable to consummate the sale and
delivery of the International Shares by the International Underwriters at the
public offering price.]

(d) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall have been no litigation or other proceeding instituted against the
Company or any of the subsidiaries or any of their respective officers or
directors in their capacities as such before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, in which an unfavorable ruling, decision or finding
in such litigation or proceeding would materially and adversely affect the
business, properties, business prospects, condition (financial or otherwise) or
results of operations of the Company and the subsidiaries taken as a whole.

(e) Each of the representations and warranties of
the Company contained herein shall be true and correct in all respects at the
Closing Date as if made at the Closing Date and all covenants and agreements
herein contained to be performed on the part of the Company and all conditions
herein contained to be fulfilled or complied with by the

- 14 -
<PAGE> 15

Company at or prior to the Closing Date shall have been duly performed,
fulfilled or complied with.

(f) The Managers shall have received an opinion,
dated the Closing Date and satisfactory in form and substance to counsel for
the International Underwriters, from Bass, Berry & Sims, counsel to the
Company, substantially to the effect set forth in Exhibit D.

(g) The Managers shall have received an opinion,
dated the Closing Date from Shereff, Friedman, Hoffman & Goodman, LLP, counsel
to the International Underwriters, with respect to the Registration Statement,
the Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to the Managers.

(h) Concurrently with the execution and delivery
of this Agreement, or, if the Company elects to rely on Rule 430A, on the date
of the Prospectus, the Managers shall have received from the Accountants a
signed letter, dated the date of its delivery, addressed to the Managers and in
form and substance satisfactory to the Managers, to the effect that they are
independent public accountants with respect to the Company as required by the
Act and the Rules and Regulations and their opinion that the financial
statements and schedules examined by them and included or incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and will set forth certain agreed upon procedures and the results
thereof with respect to certain financial and other statistical and numerical
information contained in the Registration Statement or incorporated by
reference therein as the Managers may reasonably request. At the Closing Date,
the Accountants shall have furnished to the Managers a letter, dated the date
of its delivery, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letter from the Accountants, that nothing
has come to their attention during the period from the date of the letter
referred to in the prior sentence to a date (specified in the letter) not more
than three days prior to the Closing Date which would require any change in
their letter dated the date hereof if it were required to be dated and
delivered at the Closing Date.

(i) Concurrently with the execution and delivery
of this Agreement or, if the Company elects to rely on Rule 430A, on the date
of the Prospectus, and at the Closing Date, there shall be furnished to the
Managers a certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer and the Chief Financial Officer of the Company, in form
and substance satisfactory to the International Underwriters, to the effect
that:

(i) Each signer of such certificate has
carefully, examined the Registration Statement and the Prospectus (including
any documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus) and (A) as of the date of such certificate, such
documents are true and correct in all material respects and do not omit to
state a material fact required to be stated therein or necessary, in order to

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<PAGE> 16

make the statements therein not untrue or misleading and (B) in the case of the
certificate delivered at the Closing Date, since the Effective Date no event
has occurred as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein not untrue or misleading in
any material respect and as to which an appropriate amendment or supplement to
the Prospectus has not been filed, and there has been no document required to
be filed under the Exchange Act and the Exchange Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference into the
Prospectus that has not been so filed.

(ii) Each of the representations and
warranties of the Company, contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true and correct in
all material respects.

(iii) Each of the covenants required
herein to be performed by the Company on or prior to the delivery of such
certificate has been duly, timely and fully performed in all material respects
and each condition herein required to be complied with by the Company on or
prior to the date of such certificate has been duly, timely and fully complied
with in all material respects.

(j) The International Shares shall be qualified
for sale in such jurisdictions as the Managers may reasonably request, each
such qualification shall be in effect and not subject to any stop order or
other proceeding on the Closing Date.

(k) The Company shall have furnished to the
Managers such certificates, in addition to those specifically mentioned herein,
as the Managers may have reasonably requested as to the accuracy and
completeness at the Closing Date of any statement in the Registration Statement
or the Prospectus or any documents filed under the Exchange Act and deemed to
be incorporated by reference into the Prospectus, as to the accuracy at the
Closing Date of the representations and warranties of the Company herein, as to
the performance by the Company of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the International Underwriters.

(l) The closing of the purchase and sale of the
U.S. Firm Shares pursuant to the U.S. Underwriting Agreement shall occur
concurrently with the closing of the purchase and sale of the International
Shares hereunder; provided however, that this condition shall not apply if the
failure of such closing is due to defaulting Underwriters referred to in
Section 8 of this Agreement and Section 8 of the U.S. Underwriting Agreement
and the number of International Shares and U.S. Firm Shares such defaulting
Underwriters agreed but failed or refused to purchase is less than one-tenth of
the aggregate amount of International Shares and U.S. Firm Shares.

- 16 -
<PAGE> 17

6. Indemnification.

(a) The Company will indemnify, and hold harmless
each International Underwriter, the directors, officers, employees and agents
of each International Underwriter and each person, if any, who controls each
International Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or in any documents filed under the Exchange Act
and deemed to be incorporated by reference into the Prospectus, or the omission
or alleged omission to state in such document a material fact required to be
stated in it or necessary to make the statements in it not misleading, provided
that the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the International Shares
in the public offering to any person by any International Underwriter and is
based on an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
International Underwriter furnished in writing to the Company by any of the
International Underwriters expressly for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that the Company might otherwise
have. The foregoing indemnification with respect to any preliminary prospectus
shall not inure to the benefit of any International Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
International Shares (or any person controlling such International Underwriter)
if a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such International Underwriter to such person, if such
is required by law, at or prior to the written confirmation of the sale of such
International Shares to such person and if delivery of the Prospectus (as so
amended or supplemented) to such person, would have cured the defect giving
rise to such loss, claim, damage or liability.

(b) Each International Underwriter will indemnify
and hold harmless the Company and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
each director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to each International Underwriter, but only insofar as losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any International Underwriter
furnished in writing to the Company by any International Underwriter expressly
for use in the

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<PAGE> 18

Registration Statement, any preliminary prospectus or the Prospectus. This
indemnity, will be in addition to any liability that each International
Underwriter might otherwise have.

(c) Any party that proposes to assert the right
to be indemnified under this Section 6 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a claim is
to be made against an indemnifying party or parties under this Section 6,
notify each such indemnifying party of the commencement of such action,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action
is brought against any indemnified party and it notifies the indemnifying party
of its commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement of the
action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel
reasonably satisfactory to the indemnified party, and after notice from the
indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will have the
right to employ its own counsel in any such action, but the fees, expenses and
other charges of such counsel will be at the expense of such indemnified party
unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from
or in addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be
at the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm admitted
to practice in such jurisdiction at any one time for all such indemnified party
or parties (including any indemnified party or parties under the U.S.
Underwriting Agreement). All such fees, disbursements and other charges will
be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld).

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<PAGE> 19

(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or the
International Underwriters, the Company and the International Underwriters will
contribute to the total losses, claims, liabilities, expenses and damages
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted, but after deducting any contribution received
by the Company from persons other than the International Underwriters, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) to which the Company and any one or more
of the International Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the International Underwriters on the other. The relative benefits
received by the Company on the one hand and the International Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
International Underwriters, in each case as set forth in the table on the cover
page of the Prospectus. If, but only if, the allocation provided by the
foregoing sentence is not permitted by applicable law, the allocation of
contribution shall be made in such proportion as is appropriate to reflect not
only the relative benefits referred to in the foregoing sentence but also the
relative fault of the Company, on the one hand, and the International
Underwriters, on the other, with respect to the statements or omissions which
resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or the International Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
International Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation (even if the International Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 6(d) shall be deemed to include, for purpose of this Section 6(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6(d), no International
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts received by it, and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The International Underwriters' obligations to contribute
as provided in this Section 6(d) are several in proportion to their respective
underwriting obligations and not

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<PAGE> 20

joint. For purposes of this Section 6(d), any person who controls a party to
this Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the
Company, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).

(e) The indemnity and contribution agreements
contained in this Section 6 and the representations and warranties of the
Company contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any investigation made by or on behalf of the
International Underwriters, (ii) acceptance of any of the International Shares
and payment therefor or (iii) any termination of this Agreement.

7. Termination.

The obligations of the several International Underwriters
under this Agreement may be terminated at any time on or prior to the Closing
Date, by notice to the Company from the Managers, without liability on the part
of any International Underwriter to the Company, if, prior to delivery and
payment for the International Shares in the sole judgment of the Managers, (i)
trading in any of the equity securities of the Company shall have been
suspended by the Commission or by the New York Stock Exchange, (ii) trading in
securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum or maximum prices shall have been generally established
on such exchange, or additional material governmental restrictions, not in
force on the date of this Agreement, shall have been imposed upon trading in
securities generally by such exchange or by order of the Commission or any
court or other governmental authority, (iii) a general banking moratorium shall
have been declared by either Federal or New York State authorities or (iv) any
material adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United States
or any outbreak or material escalation of hostilities or declaration by the
United States of a national emergency or war or other calamity or crisis shall
have occurred the effect of any of which is such as to make it, [in the sole
judgment of the Managers,] impracticable [or inadvisable] to market the
International Shares on the terms and in the manner contemplated by the
Prospectus.

8. Substitution of International Underwriters.

If any one or more of the International Underwriters shall
fail or refuse to purchase any of the International Shares which it or they
have agreed to purchase hereunder, and the aggregate number of International
Shares which such defaulting International

- 20 -
<PAGE> 21

Underwriter or International Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of International
Shares, the other International Underwriters shall be obligated, severally, to
purchase the International Shares which such defaulting International
Underwriter agreed but failed or refused to purchase in the proportions which
the number of International Shares which they have respectively agreed to
purchase pursuant to Section 1 bears to the aggregate number of International
Shares which all such nondefaulting International Underwriters have so agreed
to purchase, or in such other proportions as the Managers shall specify;
provided that in no event shall the maximum number of International Shares
which any International Underwriter has become obligated to purchase pursuant
to Section 1 be increased pursuant to this Section 8 by more than one-ninth of
the number of International Shares agreed to be purchased by such International
Underwriter without the prior written consent of such International
Underwriter. If any International Underwriter shall fail or refuse to purchase
any International Shares and the aggregate number of International Shares which
such defaulting International Underwriter agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of International Shares and
arrangements satisfactory to the Managers and the Company for the purchase of
such International Shares are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of the nondefaulting
International Underwriters or the Company for the purchase or sale of any
International Shares under this Agreement. In any such case either the
Managers or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken pursuant to this
Section 8 shall not relieve any defaulting International Underwriter from
liability in respect of any default of such International Underwriter under
this Agreement.

9. International Distribution.

Each International Underwriter represents and agrees that
except for (a) sales between the U.S. Underwriters and the International
Underwriters pursuant to Section 1 of the Agreement Between U.S. and
International Underwriters and (b) stabilization transactions contemplated in
Section 3 thereof conducted as part of the distribution of the Shares, (i) it
is not purchasing any of the International Shares for the account of any United
States or Canadian Person and (ii) it has not offered or sold, and will not
offer or sell, directly or indirectly, any of the International Shares or
distribute any prospectus relating to the International Shares in the United
States or Canada to any United States or Canadian Person and will agree that it
will not offer or resell such International Shares directly or indirectly in
the United States or Canada or to any United States or Canadian Person or to
any other dealer who does not so represent and agree.

- 21 -
<PAGE> 22

10. Miscellaneous.

Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, Nelson Place
at Elm Hill Pike, P.O. Box 141000, Nashville, Tennessee 37214-1000, Attention:
Mr. Joe L. Powers, Executive Vice President and Secretary or (b) if to the
International Underwriters, at the offices of PaineWebber International (U.K.)
Limited, 1 Finsbury Avenue, London EC2M 2PA, England, Attention: Corporate
Finance Department. Any such notice shall be effective only upon receipt. Any
notice under Section 7 or 8 may be made by telex or telephone, but if so made
shall be subsequently confirmed in writing.

This Agreement has been and is made solely for the benefit of
the International Underwriters and the Company and of the controlling persons,
directors and officers referred to in Section 6, and their respective
successors and assigns, and except as set forth in the U.S. Underwriting
Agreement, no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" as used in this Agreement
shall not include a purchaser, as such purchaser, of International Shares from
any of the several International Underwriters.

Any action required or permitted to be taken by the Managers
under this Agreement may be taken by them jointly or by PaineWebber
International (U.K.) Limited.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.

In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

[The Company and the International Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.]

- 22 -
<PAGE> 23

Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several International Underwriters.

Very truly yours,

THOMAS NELSON, INC.

By:
---------------------------
Name:
Title:

Confirmed as of the date first above mentioned:

PAINEWEBBER INTERNATIONAL (U.K.) LTD.
MERRILL LYNCH INTERNATIONAL LIMITED
J.C. BRADFORD & CO.
acting on behalf of themselves and
as the Managers of the other several
International Underwriters named in
Schedule I hereof

By: PAINEWEBBER INTERNATIONAL (U.K.) LTD.

By: -------------------------------------
Name:
Title:

- 23 -
<PAGE> 24

SCHEDULE I

International Underwriters

<TABLE>
<CAPTION> Number of
International
Shares To Be
Name Purchased
---- ---------
<S> <C>
PaineWebber International (U.K.) Ltd. . . . . . . . . . . .

Merrill Lynch International Limited . . . . . . . . . . . .

J.C. Bradford & Co. . . . . . . . . . . . . . . . . . . . .
-------
Total . . . . . . . . . . . . . . . . . . . . . . 500,000
=======
</TABLE>

<PAGE> 25

EXHIBIT A

THOMAS NELSON, INC.

------------------

INTERNATIONAL PRICE DETERMINATION AGREEMENT

July __, 1995

Dear Sirs:

Reference is made to the International Underwriting Agreement,
dated July __, 1995 (the "International Underwriting Agreement"), among Thomas
Nelson, Inc., a Tennessee corporation (the "Company") and the several
International Underwriters named in Schedule I thereto or hereto (the
"International Underwriters"), for whom PaineWebber International (U.K.) Ltd.,
Merrill Lynch International Limited and J.C. Bradford & Co. are acting as
managers (the "Managers"). The International Underwriting Agreement provides
for the purchase by the International Underwriters from the Company, subject to
the terms and conditions set forth therein, of an aggregate of 500,000 shares
(the "International Shares") of the Company's common stock, par value $1.00 per
share. This Agreement is the Price Determination Agreement referred to in the
International Underwriting Agreement.

Pursuant to Section 1 of the International Underwriting
Agreement, the Company agrees with the Managers as follows:

1. The initial public offering price per share for the
International Shares shall be $_________.

2. The purchase price per share for the International
Shares to be paid by the several International Underwriters shall be $_________
representing an amount equal to the initial public offering price set forth
above, less $_________ per share.

The Company represents and warrants to each of the
International Underwriters that the representations and warranties of the
Company set forth in Section 3 of the International Underwriting Agreement are
accurate as though expressly made at and as of the date hereof.

As contemplated by the International Underwriting Agreement,
attached as Schedule I is a complete list of the several International
Underwriters, which shall be a part of this Agreement and the International
Underwriting Agreement.

A-1
<PAGE> 26

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

If the foregoing is in accordance with your understanding of
the agreement among the International Underwriters and the Company, please sign
and return to the Company a counterpart hereof, whereupon this instrument along
with all counterparts and together with the International Underwriting
Agreement shall be a binding agreement among the International Underwriters and
the Company in accordance with its terms and the terms of the International
Underwriting Agreement.

Very truly yours,

THOMAS NELSON, INC.

By:
------------------------------
Name:
Title:

Confirmed as of the date first above mentioned:

PAINEWEBBER INTERNATIONAL (U.K.) LTD.
MERRILL LYNCH INTERNATIONAL LIMITED
J.C. BRADFORD & CO.
Acting on behalf of themselves and as
the Managers of the other
several International Underwriters named in
Schedule I hereof.

By: PAINEWEBBER INTERNATIONAL (U.K.) LTD.

By:
-----------------------------------
Name:
Title:

A-2
<PAGE> 27

EXHIBIT B

SUBSIDIARIES

<TABLE>
<CAPTION>
Name % Owned
---- -------
<S> <C>
Word Incorporated 100

Nelson/Word, Ltd. (U.K.) 100

Word DMS Partners, LP 100

Word Communications, Ltd. 100

TNI Cassette Corp. 100

Editorial Caribe, Inc. 100

PPC, Inc. 100

American Bible Company, Inc. 100

Morningstar Radio Network, Inc. 80

</TABLE>

B-1
<PAGE> 28

EXHIBIT C

OTHER SUBSIDIARIES

Name % Owned
---- -------

[To be completed]

C-2
<PAGE> 29

Form of opinion of counsel to the Company

EXHIBIT D

1. The Company and each of the subsidiaries listed on
Exhibit B to the Agreement is a corporation duly organized, validly, existing
and in good standing under the laws of the jurisdiction of its incorporation,
is duly licensed or qualified to do business and is in good standing as a
foreign corporation in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
license or qualification necessary and where the failure to so qualify would
have a material adverse effect on the Company, has full corporate power and
authority to conduct all the activities conducted by it and known to us, to own
or lease all the material assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus and to
the best of our knowledge has all governmental licenses, permits, consents,
orders, approvals and other authorizations which are material to the ability of
the Company to carry on its business as contemplated in the Prospectus. All
references to the Company's subsidiaries in this opinion shall be limited to
the subsidiaries of the Company listed on Exhibit B to the Agreement. The
Company is the sole record and beneficial owner of all of the capital stock of
each of its subsidiaries.

2. The outstanding shares of Common Stock have been, and
the Shares will be, when they are issued or sold to and paid for by the
Underwriters in accordance with the terms of the Agreement, duly authorized,
validly issued, fully paid and nonassessable and will not be subject to any
preemptive or similar right arising by law or to the best of our knowledge, any
other preemptive or similar right.

3. No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or body is
required (a) in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, (b) in connection with the execution,
delivery and performance of the Agreement by the Company or (c) in connection
with the taking by the Company of any action contemplated thereby [or, if so
required, all such consents, approvals, authorizations and orders, [specifying
the same] have been obtained and are in full force and effect], except such as
have been obtained under the Act and the Rules and Regulations and such as may
be required by the bylaws and rules of the NASD in connection with the purchase
and distribution by the Underwriters of the Shares and except such as will not,
if not obtained, have a material adverse effect on the transactions
contemplated by the Agreement.

4. The authorized and outstanding capital stock of the
Company is as set forth in the Registration Statement and the Prospectus. The
description of the Common Stock contained in the Prospectus conforms to the
terms thereof contained in the Company's charter.

D-1
<PAGE> 30

5. The Registration Statement and the Prospectus
(including any documents incorporated by reference into the Prospectus, at the
time they were filed) comply or complied in all material respects as to form
with the requirements of the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations (except that we express no opinion as
to financial statements, schedules and other financial and statistical data
contained in the Registration Statement or the Prospectus or incorporated by
reference therein).

6. We have participated in the preparation of the
Registration Statement and the Prospectus and nothing has come to our attention
which has caused us to believe that, both as of the Effective Date and as of
the Closing Date and the U.S. Option Closing Date, either the Registration
Statement or the Prospectus, or any amendment or supplement thereto including
any documents incorporated by reference into the Prospectus, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances in which they were made
(except that we express no opinion as to financial statements, schedules and
other financial or statistical data contained in the Registration Statement or
the Prospectus or incorporated by reference therein).

7. The Registration Statement has become effective under
the Act and to the best of our knowledge, no order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that
purpose has been instituted or is threatened, pending or contemplated.

8. We have reviewed all contracts or other documents
referred to in the Registration Statement and the Prospectus and such contracts
or other documents are fairly summarized or disclosed therein and filed as
exhibits thereto as required, and, after due inquiry, we do not know of any
contracts or other documents required to be so summarized or disclosed or filed
or required to be filed under the Exchange Act if upon such filing they would
be incorporated, in whole or in part, by reference therein which have not been
so summarized or disclosed or filed.

9. All descriptions in the Prospectus of statutes,
regulations or legal or governmental proceedings are accurate and fairly
present the information required to be shown.

10. The Company has full corporate power and authority to
enter into the Agreement, and the Agreement has been duly authorized, executed
and delivered by the Company, is a valid and binding agreement of the Company
and, except for the indemnification and contribution provisions thereof, as to
which we express no opinion, and subject to applicable bankruptcy laws and
general equitable principles is enforceable against the Company in accordance
with the terms thereof.

D-2
<PAGE> 31

11. The execution and delivery of the Agreement by the
Company, the consummation by the Company of the transactions therein
contemplated and the compliance by the Company with the terms of the Agreement
do not and will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company or any of its subsidiaries
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default or result in the
acceleration of any obligation under, the charter or by-laws of the Company or
any of its subsidiaries, any material indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other material agreement or
instrument known to us to which the Company or any of its subsidiaries is a
party or by which it or any of its properties is bound or any judgment, ruling,
decree or order known to us of any court or other governmental agency or body
or statute, rule or regulation applicable to the business or properties of the
Company or any of its subsidiaries (except that we express no opinion as to the
securities or Blue Sky laws of any jurisdiction other than the United States).

12. Upon payment for and delivery of the Shares with all
necessary endorsements in accordance with the terms of the Agreement, and
assuming the Underwriters are acquiring the Shares in good faith without notice
of any adverse claim, the Underwriters will be the owners of the Shares, free
and clear of any adverse claim.

13. To the best of our knowledge there are no actions,
suits or proceedings pending or threatened against or affecting the Company or
any of its subsidiaries or their respective properties or any of its
subsidiaries, or any of their respective officers in their capacities as such,
before or by any Federal or state or foreign court, commission, regulatory
body, administrative agency or other governmental body, wherein an unfavorable
ruling, decision or finding might materially and adversely affect the Company
or any of its subsidiaries or its business, properties, business prospects,
condition (financial or otherwise) or results of operations, except as set
forth in or contemplated by the Registration Statement and the Prospectus.

14. To the best of our knowledge, neither the Company nor
any of its subsidiaries is in violation of its charter or certificate of
incorporation, by-laws or other charter documents or in default (nor has an
event occurred which with notice or lapse of time or both would constitute a
default or acceleration) in the performance of any material obligation,
agreement or condition contained in any material indenture, mortgage, deed of
trust, voting trust agreement, loan agreement, bond, debenture, note agreement
or other evidence of indebtedness, lease, contract or other material agreement
or instrument known to us to which the Company or any of its subsidiaries is a
party or by which it or its properties is bound and neither the Company nor any
of its subsidiaries is in violation of any judgment, ruling, decree, order,
franchise, license or permit known to us or any statute, rule or regulation of
any court or other governmental agency or body applicable to the business or
properties of the Company or any of its subsidiaries, where such violation or
default might

D-3
<PAGE> 32

have a material adverse effect on the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company or
any of its subsidiaries.

15. The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act
of 1940, as amended.

In rendering the foregoing opinion, counsel may rely, to the
extent they deem such reliance proper, as to matters of fact, upon certificates
of officers of the Company and of government officials.

D-4