<PAGE 1>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended May 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number 1-9244
_____________________________
KING WORLD PRODUCTIONS, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 13-2565808
_______________________________ ____________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12400 Wilshire Boulevard
Suite 1200
Los Angeles, California 90025
__________________________________________________
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: 310 826-1108
____________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
_____ _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Common Stock, $.01 par
value, 73,175,007 shares outstanding as of July 8, 1998.
<PAGE><PAGE 2>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in thousands)
May 31, August 31,
1998 1997
___________ __________
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $224,752 $317,782
Short-term investments 77,476 234,677
Accounts receivable (net of allowance
for doubtful accounts of $3,301 and
$4,101 at May 31, 1998 and August 31,
1997, respectively) 81,780 75,092
Producer advances and deferred costs 85,698 74,652
Other current assets 1,482 1,857
________ ________
Total current assets 471,188 704,060
________ ________
LONG-TERM INVESTMENTS, at cost,
which approximates market value 422,560 177,590
________ ________
FIXED ASSETS, at cost 29,349 21,455
Less - accumulated depreciation
and amortization (13,070) (11,706)
________ ________
16,279 9,749
________ ________
PRODUCER ADVANCES AND OTHER ASSETS 83,342 10,668
________ ________
$993,369 $902,067
======== ========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these balance sheets.
<PAGE><PAGE 3>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
(Dollars in thousands)
May 31, August 31,
1998 1997
____________ __________
(Unaudited)
CURRENT LIABILITIES:
Accounts payable and
accrued liabilities $ 16,680 $ 18,014
Payable to producers and others 78,823 69,599
Income taxes payable 28,377 30,372
__________ __________
Total current liabilities 123,880 117,985
__________ __________
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
5,000,000 shares authorized,
none issued -- --
Common stock, $.01 par value;
150,000,000 shares authorized,
88,093,701 shares and
87,664,828 shares issued
at May 31, 1998 and August 31,
1997, respectively 881 877
Paid-in capital 133,195 124,130
Retained earnings 1,103,339 1,001,190
Treasury stock, at cost; 15,250,494 and
14,413,594 shares at May 31, 1998 and
August 31, 1997, respectively (367,926) (342,115)
__________ __________
869,489 784,082
__________ __________
$ 993,369 $ 902,067
========== ==========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these balance sheets.
<PAGE><PAGE 4>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
May 31, May 31,
1998 1997 1998 1997
(Dollars in thousands except per share data)
REVENUES....................... $167,968 $166,751 $514,810
$506,207
________ ________ ________ ________
EXPENSES:
Producers' fees, programming
and other direct
operating costs............ 106,510 97,745 324,439
300,315
Selling, general and
administrative expenses.... 18,564 22,385 57,720
62,078
________ ________ ________ ________
125,074 120,130 382,159 362,393
________ ________ ________ ________
Income from operations..... 42,894 46,621 132,651 143,814
INTEREST AND
DIVIDEND INCOME.............. 7,620 8,269
21,692 22,184
________ ________ ________ ________
Income before provision
for income taxes......... 50,514 54,890 154,343 165,998
PROVISION FOR INCOME TAXES..... 16,312 19,185 52,194
58,649
________ ________ ________ ________
Net income................. $ 34,202 $ 35,705 $102,149
$107,349
======== ======== ======== ========
BASIC EARNINGS PER SHARE....... $ .47 $ .48 $ 1.40 $
1.44
======== ======== ======== ========
DILUTED EARNINGS PER SHARE..... $ .45 $ .48 $ 1.34 $
1.43
======== ======== ======== ========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
<PAGE><PAGE 5>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
May 31,
______________________
1998 1997
_________ _________
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $102,149 $107,349
Items not affecting cash:
Depreciation and amortization 1,364 1,247
Change in assets and liabilities:
Accounts receivable (6,688) (5,922)
Producer advances and
deferred costs (81,296) 55,143
Accounts payable and accrued
liabilities (1,334) 2,224
Payable to producers and others 9,224 (6,647)
Income taxes payable (1,995) (1,939)
Other, net (2,049) (50)
________ ______
Net cash provided by operating
activities 19,375 151,405
________
________
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in investments (87,769) (119,002)
Additions to fixed assets (7,894) (7,584)
________ ________
Net cash used in investing
activities (95,663) (126,586)
________
________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 9,069 6,138
Purchase of treasury stock (25,811) (24,739)
Payment of special dividend -- (74,843)
________
_______
Net cash provided by
financing activities (16,742) (93,444)
________
________
NET DECREASE IN CASH AND
CASH EQUIVALENTS (93,030) (68,625)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 317,782 344,766
________
________
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $224,752 $276,141
========
========
The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.
<PAGE><PAGE 6>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Summary of significant accounting policies
Principles of consolidation
___________________________
The accompanying consolidated financial statements include the
accounts of King World Productions, Inc. ("King World") and its wholly-owned
subsidiaries. All significant intercompany transactions have been
eliminated. Unless the context suggests otherwise, the "Company", as used
herein, means King World and its subsidiaries. All share and per share data
presented in these consolidated financial statements have been adjusted to
give effect to a two-for-one stock split, effected in the form of a 100% stock
dividend, which was paid by the Company on February 17, 1998.
The unaudited consolidated financial statements for the nine months
and three months ended May 31, 1998 have been prepared in accordance with the
instructions to Form 10-Q and include, in the opinion of management, all
adjustments (consisting only of normal recurring accruals) necessary for a
fair presentation of the results of operations for such periods. They do not,
however, include all of the information and disclosures required by generally
accepted accounting principles for complete financial statements. For further
information, reference is made to the consolidated financial statements for
the fiscal year ended August 31, 1997 and the footnotes related thereto
included in the Company's Annual Report on Form 10-K from which the August 31,
1997 balances presented herein have been derived. The results of operations
for the nine months and three months ended May 31, 1998 are not necessarily
indicative of the results of operations for the full year.
Revenue recognition
___________________
License fees from first-run syndicated television properties are
recognized at the commencement of the license period pursuant to
noncancelable agreements and as each show is made available to the licensee
via satellite transmission. Because transmission to the satellite takes
place, on the average, no more than two to three days prior to the broadcast
of the programming, revenues are recognized on or about the air date.
The Company typically receives a portion of the fees derived from
the licensing of syndicated television programming in the form of retained
advertising time, which is sold to advertisers by King World Media Sales Inc.,
a wholly-owned
<PAGE><PAGE 7>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Summary of significant accounting policies (continued)
subsidiary of the Company. Such revenues are recognized at the same time as
the cash portion of the license fees derived from such programming is
recognized, in amounts adjusted for expected ratings.
License fees for non-first-run syndicated properties are recognized
at the gross contract amount (net of discount to present value for license
periods greater than one year) at the commencement of the license period and
when certain other conditions are satisfied.
Principal properties
____________________
The Company's principal properties are licenses to distribute THE
OPRAH WINFREY SHOW, WHEEL OF FORTUNE and JEOPARDY!; and INSIDE EDITION, a
first-run syndicated series produced and distributed by the Company. THE
OPRAH WINFREY SHOW accounted for approximately 42% and 40% of revenues for the
nine months ended May 31, 1998 and 1997, respectively; WHEEL OF FORTUNE
accounted for approximately 21% and 20% of revenues for each of such periods,
respectively; JEOPARDY! accounted for approximately 18% and 17% of revenues
for each of such periods, respectively; and INSIDE EDITION accounted for
approximately 7% and 8% of revenues for each of such periods, respectively.
The Company distributes THE OPRAH WINFREY SHOW pursuant to an
agreement with Harpo, Inc., the producer of the series ("Harpo"). Under the
terms of the Company's agreement with Harpo, the Company has the exclusive
right, and has agreed, to distribute episodes of THE OPRAH WINFREY SHOW
produced through the 1999-2000 broadcast season. Pursuant to such agreement,
Harpo and Ms. Winfrey have also committed to produce and host the show through
the 1999-2000 broadcast season. Even if Harpo elects to continue to produce
THE OPRAH WINFREY SHOW after the 1999-2000 broadcast season, it will not be
obligated to distribute the series through the Company.
The Company's agreements with Columbia TriStar Television, the
producer of WHEEL OF FORTUNE and JEOPARDY!, provide that King World will be
the exclusive distributor for each such series so long as the Company has
obtained sufficient
<PAGE><PAGE 8>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Summary of significant accounting policies (continued)
broadcast commitments to cover the production and distribution costs of that
series and that the Company may not, unless otherwise agreed by Columbia
TriStar Television, distribute other game shows for first-run strip
syndication so long as the Company is distributing WHEEL OF FORTUNE or
JEOPARDY!.
The Company has entered into an agreement with Full Moon & High Tide
Productions, Inc., a company controlled by Roseanne, to co-produce THE
ROSEANNE SHOW, an hour-long strip talk show hosted by Roseanne and distributed
by the Company in first-run syndication. The series is scheduled to premiere
on September 14, 1998. Under the terms of the agreement, the Company will
have the exclusive right to distribute the show through the 2003-2004
broadcast season. As of July 8, 1998, the series had been licensed for the
1998-1999 and 1999-2000 broadcast seasons to television stations covering 90%
of the total domestic television viewing households.
The Company has also entered into an agreement with Columbia TriStar
Television to co-produce a new strip version of the game show HOLLYWOOD
SQUARES for distribution by the Company in first-run syndication. This series
is also scheduled to premiere on September 14, 1998. As of July 8, 1998, the
series had been licensed for the 1998-1999, 1999-2000 and 2000-2001 broadcast
seasons to television stations covering 80% of the total domestic television
viewing households.
Producers' fees, programming and other direct operating costs
_____________________________________________________________
Producers' fees, programming and other direct operating costs
primarily include the producers' share of both cash license fees from the sale
of programming to television stations and revenues derived from the sale of
retained advertising time to advertisers with respect to programming
distributed by the Company; participation fees payable by the Company to
producers and talent; production and distribution costs for first-run
syndicated programming; and the direct operating costs of King World Direct,
the Company's direct response marketing subsidiary. That portion of any
recognized revenue that is to be paid to producers and owners of programming
is accrued as the license fees are earned. The share of revenues payable by
the Company to such
<PAGE><PAGE 9>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Summary of significant accounting policies (continued)
producers and others is generally paid as cash license fees and revenues
derived from the sale of retained advertising time are received from
television stations and advertisers.
Stockholders' equity
____________________
In the first quarter of fiscal 1998, the Company adopted Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128").
SFAS 128 requires the presentation of "basic" earnings per share, which
excludes any common stock equivalents and their related dilution, and
"diluted" earnings per share, which includes the potential dilution from all
common stock equivalents including options, warrants and convertible
securities. Basic earnings per share has been computed using the weighted
average number of shares of Common Stock outstanding of 72,921,000 and
74,228,000 for the three months ended May 31, 1998 and 1997, respectively, and
73,193,000 and 74,569,000 for the nine months ended May 31, 1998 and 1997,
respectively. Diluted earnings per share, which includes the dilutive effect
of the assumed exercise of vested and unvested stock options outstanding as of
the end of each period reported, has been computed using the weighted average
number of shares of Common Stock outstanding of 76,512,000 and 74,906,000 for
the three months ended May 31, 1998 and 1997, respectively, and 76,458,000 and
75,320,000 for the nine months ended May 31, 1998 and 1997, respectively.
Reported earnings per share in prior periods has been restated to conform with
the provisions of SFAS 128.
On January 19, 1998 the Company's Board of Directors declared a
two-for-one stock split, effected in the form of a 100% stock dividend, which
was paid on February 17, 1998 to stockholders of record on February 3, 1998.
In connection with the stock split, the Company increased the number of
authorized shares of Common Stock from 75 million to 150 million, which
increase was approved by the stockholders of the Company on January 19, 1998.
The par value of the additional 36,738,470 shares of Common Stock issued in
connection with the stock split was credited to common stock and a like amount
charged to paid-in capital. All share and per share data presented in these
consolidated financial statements have been adjusted for all periods presented
to reflect the stock split.
<PAGE><PAGE 10>
KING WORLD PRODUCTIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(2)Producer advances
On January 2, 1996, the Company paid an advance of $65 million to
Harpo against Harpo's minimum participation payments for the 1997-1998
broadcast season which was fully recouped as of May 31, 1998. In addition, in
September 1997, the Company made advances to Harpo in the aggregate amount of
$130 million against Harpo's minimum participation payments for the 1998-1999
and 1999-2000 broadcast seasons, none of which had been recouped as of May 31,
1998. Based on the license agreements in place for such broadcast seasons,
the Company believes that revenues from the series will be sufficient to
enable the Company to recoup such advances for such seasons. All of the
advances paid to Harpo are refundable to the Company by Harpo and Ms. Winfrey
if King World terminates such license agreements with Harpo due to Harpo's
failure to deliver episodes of THE OPRAH WINFREY SHOW.
<PAGE><PAGE 11>
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition
_____________________________________________
The discussion herein contains certain forward-looking statements
covering the Company's objectives, planned or expected activities and
anticipated financial performance. These forward-looking statements may
generally be identified by words such as "expects", "anticipates", "believes",
"plans", "should", "will" "may", "projects" (or variants of these words or
phrases), or similar language indicating the expression of an opinion or view
concerning the future with respect to the Company's financial position,
results of operations, prospects or business. The Company's actual results
may differ significantly from the results described in or suggested by such
forward-looking statements.
RESULTS OF OPERATIONS
COMPARISON OF NINE MONTHS AND THREE MONTHS ENDED MAY 31, 1998 AND 1997
Revenues
________
Revenues for the first nine months of fiscal 1998 increased by
approximately 2% over revenues for the first nine months of the prior fiscal
year, primarily due to increased revenues from the sale of retained
advertising time on and increased cash license fees from THE OPRAH WINFREY
SHOW, WHEEL OF FORTUNE and JEOPARDY!, offset by lower revenues from ROLONDA
(due to the discontinuation of the show) and King World Direct. The decrease
in revenues from King World Direct was attributable to significantly lower
sales of the WILD AMERICA video series and the Sears Craftsman Robogrip
pliers. King World Direct operates in a seasonal business with revenues
heavily reliant on the Christmas selling season. Consequently, King World
Direct's revenues and earnings have historically been higher in the Company's
second fiscal quarter than in the first, third and fourth fiscal quarters.
The Company's revenues for the three months ended May 31, 1998 were
comparable to revenues for the three months ended May 31, 1997, increasing by
less than 1%, due primarily to the same factors discussed above with respect
to the nine month period.
<PAGE><PAGE 12>
The principal components of the Company's revenues for the nine
months and three months ended May 31, 1998 and 1997 are as follows:
Nine Months Ended Three Months Ended
May 31, May 31,
_________________ __________________
1998 1997 1998 1997
____ ____ ____ ____
THE OPRAH WINFREY SHOW 42% 40% 42% 41%
WHEEL OF FORTUNE 21% 20% 21% 21%
JEOPARDY! 18% 17% 18% 17%
INSIDE EDITION 7% 8% 7% 8%
AMERICAN JOURNAL (1) 4% 4% 4% 4%
ROLANDA (2) -- 1% -- 1%
King World Direct 2% 4% 1% 2%
(1) The production of AMERICAN JOURNAL will be discontinued after the current
broadcast season.
(2) The production of ROLONDA was discontinued after the 1996-1997
broadcast season.
Producers' fees, programming and other direct operating costs
_____________________________________________________________
Under the terms of its agreement with Harpo, following the 1996-1997
season, the profit sharing arrangements between Harpo and the Company
previously in effect were terminated and, in the 1997-1998 season and
thereafter, the Company instead receives distribution fees based on a
percentage of gross revenues derived from the series. These arrangements are
less favorable to the Company than those contained in prior agreements between
the Company and Harpo. As a result of these changes, the contribution of THE
OPRAH WINFREY SHOW to the Company's net profits and cash flow has declined.
Producers' fees, programming and other direct operating costs
increased by approximately 8% in the first nine months of fiscal 1998 compared
to the first nine months of fiscal 1997. The increase was primarily due to
the greater portion of revenues payable to Harpo, as discussed above, as well
as the increase in revenues generated by THE OPRAH WINFREY SHOW, WHEEL OF
FORTUNE and JEOPARDY! (a portion of which is payable to the producer of each
such series). These effects were partially offset by the lower operating
costs of King World Direct and a decrease in production costs due to the
discontinuation of ROLONDA. For the three months ended February 28, 1998,
producers' fees, programming and other direct operating costs increased by
approximately
<PAGE><PAGE 13>
9% due primarily to the same factors as those discussed above for the nine
month period.
Selling, general and administrative expenses.
The Company has entered into employment agreements with its Chairman
of the Board, its Vice Chairman and Chief Executive Officer and certain other
executive officers. Such agreements provide, among other things, for
performance-based bonuses, including bonuses payable upon the introduction of
new shows and bonuses which vary depending on the Company's net income and
Common Stock price during preestablished measurement periods. As a result,
the Company's compensation expense will increase if the Company introduces a
new series in syndication, if the Company's net income increases or if the
Company's Common Stock price exceeds the specified levels during the
applicable measurement periods. The Company has recognized the impact of
certain of these bonuses in its operating results for the first, second and
third quarters of fiscal 1998, which include all amounts payable in accordance
with the terms of such employment agreements.
Selling, general and administrative expenses for the first nine
months of fiscal 1998 were lower by approximately 7%. The decrease was
primarily due to a decrease in advertising and promotion costs for THE OPRAH
WINFREY SHOW, ROLONDA and AMERICAN JOURNAL, partially offset by increases in
the costs of programming under development and greater costs incurred in
connection with the sales of programs distributed by the Company. Selling,
general and administrative expenses for the three months ended May 31, 1998
decreased by 17% compared to the corresponding period of fiscal 1997,
primarily due to the decrease in advertising and promotion costs for THE OPRAH
WINFREY SHOW, ROLONDA and AMERICAN JOURNAL.
Net income and earnings per share
_________________________________
Due to the factors discussed above, the Company's operating income
for the nine months and three months ended May 31, 1998 decreased by
approximately 8% for each such period compared to the corresponding period of
the prior year. Net income decreased by approximately $5.2 million, or 5%,
for the nine months ended May 31, 1998 in comparison to the nine months ended
May 31, 1997, reflecting the decrease in operating income and slightly lower
interest income earned on the Company's cash and investments, partially offset
by a lower effective tax rate for the first nine months of fiscal 1998. Basic
earnings per share decreased by 3% from $1.44 per share in the first nine
months of fiscal 1997 to $1.40 per share in the first nine months of the
current fiscal year as a result of the decline in net income offset by a
decrease in the number of shares outstanding resulting from the Company's
stock repurchase program. Diluted earnings per share decreased by 6% from
$1.43 per share in the first nine months of the prior year to $1.34 in the
first nine
<PAGE><PAGE 14>
months of fiscal 1998, due primarily to a higher average Common Stock price
for the first nine months of fiscal 1998 (which resulted in a greater dilutive
effect of outstanding stock options under the method used by the Company to
calculate diluted earnings per share).
For the three months ended May 31, 1998 as compared to the same
period of the prior year, net income decreased by 4% from $35.7 million to
$34.2 million; basic earnings per share decreased by 2% from $.48 per share to
$.47 per share; and diluted earnings per share decreased by 6% from $.48 per
share to $.45 per share, all for the same reasons discussed above for the nine
month period.
Due to the success of the shows distributed by the Company and in
order to mitigate the influence of some of the factors referred to above, the
Company has been obtaining multi-year licenses and license renewals from
television stations for its principal distribution properties, extending as
far into the future as the 2001-2002 broadcast season. In general, these
licenses and renewals have been at rates as favorable or more favorable to the
Company than the rates applicable to the 1997-1998 broadcast season. All such
licenses and renewals are contingent upon the continued production of the
series by their respective producers through the broadcast seasons for which
the licenses run.
The Company believes that the impact of inflation on its operations
has not been significant.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital resources to fund development,
production and promotion costs of independently produced programming,
including, in some instances, advances to producers and talent, to produce its
own programs and to acquire distribution rights to new programming. In
acquiring distribution rights from independent producers, King World has tried
to avoid making significant capital commitments to such producers until it has
obtained broadcast commitments from a substantial number of television
stations. As a result of this strategy and the success of its existing
syndication properties, to date, King World has funded substantially all
programming acquisition, development, production and promotion costs and
advances from its operations. The Company is currently funding the
development and production costs of THE ROSEANNE SHOW and its new version of
HOLLYWOOD SQUARES.
The distribution of television programming is highly competitive and
the Company may be obliged to offer, among other things, guarantees and cash
advances to acquire, renew or extend distribution rights. Under the terms of
the Company's agreement with Harpo, the Company has the exclusive right, and
has agreed,
<PAGE><PAGE 15>
to distribute episodes of THE OPRAH WINFREY SHOW produced through the
1999-2000 broadcast season. Pursuant to such agreement, Harpo and Ms. Winfrey
have also committed to produce and host the show through the 1999-2000
broadcast season.
After the 1999-2000 broadcast season, King World's right to
distribute THE OPRAH WINFREY SHOW, if not renewed, will terminate. For
several years, the Company has been, and is now, in the process of developing
new television shows for syndication that it hopes will gain widespread
audience appeal and generate significant revenues and income for the Company.
Three such shows, THE ROSEANNE SHOW and a new version of the game show
HOLLYWOOD SQUARES, are scheduled to premiere in the 1998-1999 broadcast season
and a variety/talk show hosted by Martin Short for possible premiere in the
1999/2000 broadcast season. Although the Company hopes to renew its
distribution arrangements with Harpo for television seasons following the
1999-2000 season, there can be no assurance that (a) Harpo and Ms. Winfrey
will continue to produce and host the show beyond that season; (b) even if
they do continue to produce and host the show beyond that season, that the
Company will be able to obtain the distribution rights for any such future
season on terms favorable to the Company; or (c) that the revenues generated
by these or any other new shows will be sufficient to offset the loss of
revenues and income that would result if such future distribution rights are
not so obtained. The failure to renew such distribution rights on favorable
terms, coupled with the failure of such new shows to gain widespread audience
appeal, could be expected to have a material adverse effect on the Company's
results of operations and financial condition after the 1999-2000 broadcast
season.
On January 2, 1996 the Company paid an advance of $65 million to
Harpo against Harpo's minimum participation payments for the 1997-1998
broadcast season which was fully recouped as of May 31, 1998. In addition, in
September 1997, the Company made advances to Harpo in the aggregate amount of
$130 million against Harpo's minimum participation payments for the 1998-1999
and 1999-2000 broadcast seasons, none of which was recouped as of May 31,
1998. Based on the license agreements in place for such broadcast seasons,
the Company believes that revenues from the series will be sufficient to
enable the Company to recoup the advances for such seasons. All of the
advances paid to Harpo are refundable to the Company by Harpo and Ms. Winfrey
if King World terminates its agreement with Harpo due to Harpo's failure to
deliver episodes of THE OPRAH WINFREY SHOW.
The Company has used its cash reserves to make acquisitions of and
investments in broadcast and related properties in the entertainment field, to
repurchase shares of its Common Stock and to fund the cost of development,
production and promotion of new programming. The Company continues to
evaluate opportunities in these areas, and may seek to raise capital in public
or private securities markets to finance such activities if it
<PAGE><PAGE 16>
considers it advantageous to do so. A division of the Company, King World
Ventures, has primary responsibility for the Company's investment and
acquisition program, including analysis of new business opportunities.
On April 15, 1997, the Company announced that the Board of Directors
had approved a program to repurchase up to 10,000,000 shares of its Common
Stock from time to time in the open market and in privately negotiated
transactions. Through July 8, 1998, 3,041,700 shares of Common Stock had been
repurchased for aggregate consideration of approximately $66.0 million or
approximately $21.70 per share (such amounts have been adjusted to reflect the
two-for-one stock split). The Company intends to continue to repurchase
shares of its Common Stock in the open market and in privately negotiated
transactions if and when it deems it advantageous to do so. Purchases under
the share repurchase program will be financed out of the Company's available
cash and liquid investments.
On May 16, 1997, a special dividend distribution of $1.00 per share
was paid to stockholders of record on April 25, 1997. The Company used
approximately $74.8 million of its cash and liquid investments to pay the
special dividend. The Company has no present plan to declare additional cash
dividends in the foreseeable future.
On January 19, 1998 the Company's Board of Directors declared a
two-for-one stock split, effected in the form of a 100% stock dividend, which
was paid on February 17, 1998 to stockholders of record on February 3, 1998.
In connection with the stock split, the Company increased the number of
authorized shares of Common Stock from 75 million to 150 million, which
increase was approved by the stockholders of the Company on January 19, 1998.
The par value of the additional 36,738,470 shares of Common Stock issued in
connection with the stock split was credited to Common Stock and a like amount
charged to paid-in capital. All share and per share data presented in these
consolidated financial statements have been adjusted for all periods presented
to reflect the stock split.
PART II - OTHER INFORMATION
Item 5. Other Information
_________________
On May 8, 1998, the Board of Directors elected Avram Miller as a
director, to fill a new position on the Board created pursuant to Section 2.2
of the Company's By-Laws. Mr. Miller has been elected to the class of the
Company's directors whose term expires at the 1999 annual meeting of
stockholders.
<PAGE><PAGE 17>
Item 6. Exhibits and Reports on Form 8-K
________________________________
(a) Exhibits:
________
3.(i)Certificate of Amendment dated January 28, 1998 to Restated
Certificate of Incorporation of the Company.
3.(ii)Restated By-Laws of the Company (as of May 8, 1998).
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
___________________
None.
<PAGE><PAGE 18>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KING WORLD PRODUCTIONS, INC.
By: /s/ Steven A. LoCascio
______________________________
Steven A. LoCascio
Senior Vice President and
Chief Financial Officer
and on behalf of the Registrant
July 14, 1998
<PAGE 1>
Exhibit 3(i)
____________
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
KING WORLD PRODUCTIONS, INC.
KING WORLD PRODUCTIONS, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), DOES HEREBY
CERTIFY as follows:
FIRST: that at a meeting of the Board of Directors of the
Corporation held on October 28, 1997, a resolution was duly passed setting
forth a proposed amendment to the Restated Certificate of Incorporation of the
Corporation, declaring such amendment to be advisable and directing that such
amendment be submitted to the stockholders of the Corporation for their
approval at the annual meeting of stockholders to be held on January 19, 1998
(the "Annual Meeting"). The resolution approving the proposed amendment is as
follows:
RESOLVED, that the Board of Directors hereby proposes, approves and
declares the advisability of an amendment to Article IV of the Restated
Certificate of Incorporation of the Corporation increasing the number of
shares of Common Stock, par value $.01 per share, of the Corporation (the
"Common Stock"), that the Corporation is authorized to issue from 75,000,000
to 150,000,000 and the total number of shares which the Corporation is
authorized to issue from 80,000,000 to 155,000,000.
SECOND: that the amendment to the Restated Certificate of
Incorporation effected by this Certificate was duly authorized at the Annual
Meeting by the holders of a majority of the outstanding stock of the
Corporation entitled to vote thereon, after first having been declared
advisable by the Board of Directors of the Corporation, all in accordance with
the provisions of Section 242 of the General Corporation Law of the state of
Delaware.
THIRD: that the capital of the Corporation will not be reduced
under, or by reason of, the foregoing amendment to the Restated Certificate of
Incorporation of the Corporation.
FOURTH: that by reason of the approval of the amendment to the
Restated Certificate of Incorporation of the Corpora-
<PAGE><PAGE 2>
tion by the stockholders, the first paragraph of Article IV of the Restated
Certificate of Incorporation, as previously amended by an amendment thereto
dated as of August 27, 1986, shall henceforth read in its entirety as follows:
"The total number of shares of stock which the Corporation shall have
authority to issue is one hundred fifty-five million (155,000,000) shares,
consisting of five million (5,000,000) shares of Preferred Stock, par value
$.01 per share (hereinafter called "Preferred Stock"), and one hundred fifty
million (150,000,000) shares of Common Stock, par value $.01 per shares
(hereinafter called "Common Stock")."
IN WITNESS WHEREOF, KING WORLD PRODUCTIONS, INC. has caused this
Certificate of Amendment to the Restated Certificate of Incorporation to be
signed by an officer of the Corporation thereunto duly authorized, hereby
declaring, certifying and acknowledging under penalties of perjury that the
facts herein stated are true and that this Certificate of Amendment is the act
and deed of the Corporation this 28th day of January 1998.
KING WORLD PRODUCTIONS, INC.
By
________________________________
<PAGE 1>
Exhibit 3(ii)
_____________
BY-LAWS
OF
KING WORLD PRODUCTIONS, INC.
(Amended and Restated as of June 25, 1997)
ARTICLE I
Stockholders
Section 1.1 ANNUAL MEETINGS. (a) An annual meeting of
stockholders shall be held for the election of directors at such date, time
and place either within or without the State of Delaware as may be designated
by the Board of Directors from time to time. At any such annual meeting any
business properly brought before the meeting may be transacted.
(b) To be properly brought before an annual meeting, business
must be (i) specified in the notice of the meeting (or any supplement thereto)
given by or at the direction of the chairman of the meeting or the Board of
Directors, (ii) otherwise properly brought before the meeting by or at the
direction of the chairman of the meeting or the Board of Directors or (iii)
otherwise properly brought before the meeting by a stockholder. For business
to be properly brought before an annual meeting by a stockholder, the
stockholder must have given written notice thereof, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Corporation, not more than 120 days or less than 90 days in advance of the
anniversary date of the immediately preceding annual meeting. Any such notice
shall set forth as to each matter the stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting
and in the event that such business includes a proposal to amend either the
Certificate of incorporation or By-laws of the Corporation, the language of
the proposed amendment, (ii) the name and address of the stockholder proposing
such business, (iii) a representation that the stockholder is a holder of
record of stock of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to propose such
business, (iv) any material interest of the stockholder in such business and
(v) if the stockholder intends to solicit proxies in support of such
stockholder's proposal, a representation to that effect. No business shall be
conducted at an annual meeting of stockholders except in accordance with this
Section 1.1(b), and chairman of the meeting may refuse to permit any business
to be brought
<PAGE><PAGE 2>
before an annual meeting without compliance with the foregoing procedures or
if the stockholder solicits proxies in support of such stockholder's proposal
without such stockholder having made the representation required by clause (v)
of the preceding sentence."
Section 1.2 SPECIAL MEETINGS. Except as otherwise required by law
and subject to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation,
special meetings of the stockholders for any purpose or purposes may be called
only by the Chairman of the Board, the President, or a majority of the entire
Board of Directors. Only such business as is specified in the notice of any
special meeting of the stockholders shall come before such meeting.
Section 1.3 NOTICE OF MEETINGS. Whenever stockholders are required
or permitted to take any action at a meeting, a written notice of the meeting
shall be given which shall state the place, date and hour of the meeting, and,
in the case of a special meeting, the purpose or purposes for which the
meeting is called. Unless otherwise provided by law, the written notice of
any meeting shall be given not less than ten nor more than sixty days before
the date of the meeting to each stockholder entitled to vote at such meeting.
If mailed, such notice shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the stockholder at such
stockholder's address as it appears on the records of the Corporation.
Section 1.4 ADJOURNMENTS. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business
which might have been transacted at the original meeting. If the adjournment
is for more than thirty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
Section 1.5 QUORUM. At each meeting of stockholders, except where
otherwise provided by law or the certificate of incorporation or these
By-laws, the holders of a majority of the outstanding shares of each class of
stock entitled to vote at the meeting, present in person or represented by
proxy, shall constitute a quorum. For purposes of the foregoing, two or more
classes or series of stock shall be considered a single class if the holders
thereof are entitled to vote together as a single class at the meeting. In
the absence of a quorum the stockholders so present may, by majority vote,
adjourn the meeting from
<PAGE><PAGE 3>
time to time in the manner provided by Section 1.4 of these By-laws until a
quorum shall attend. Shares of its own capital stock belonging on the record
date for the meeting to the Corporation or to another corporation, if a
majority of the shares entitled to vote in the election of directors of such
other corporation is held, directly or indirectly, by the Corporation, shall
neither be entitled to vote nor be counted for quorum purposes; provided,
however, that the foregoing shall not limit the right of the Corporation to
vote stock, including but not limited to its own stock, held by it in a
fiduciary capacity.
Section 1.6 ORGANIZATION. Meetings of stockholders shall be
presided over by the Chairman of the Board, if any, or in the absence of the
Chairman of the Board by the Vice Chairman of the Board, if any, or in the
absence of the Vice Chairman of the Board by the President, or in the absence
of the President by a Vice President, or in the absence of the foregoing
persons by a chairman designated by the Board of Directors, or in the absence
of such designation by a chairman chosen at the meeting. The Secretary, or in
the absence of the Secretary an Assistant Secretary, shall act as secretary of
the meeting, but in the absence of the Secretary and any Assistant Secretary
the chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 1.7 VOTING; PROXIES. Unless otherwise provided in the
Certificate of Incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
such stockholder which has voting power upon the matter in question. Each
stockholder entitled to vote at a meeting of stockholders may authorize
another person or persons to act for such stockholder by proxy, but no such
proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking
the proxy or another duly executed proxy bearing a later date with the
Secretary of the Corporation. Unless required by law or determined by the
chairman of the meeting to be advisable, the vote on any matter, including the
election of directors, need not be by written ballot. In the case of a vote by
written ballot, each ballot shall be signed by the stockholder voting, or by
such stockholder's proxy, and shall state the number of shares voted. Either
the Board of Directors or, in the absence of a designation of inspectors by
the Board, the chairman of any meeting of stockholders may, in its or such
person's discretion, appoint two or more inspectors to act at any meeting of
stockholders. Such inspectors shall perform such
<PAGE><PAGE 4>
duties as shall be specified by the Board or the chairman of the meeting.
Inspectors need not be stockholders. No director or nominee for the office of
director shall be appointed such inspector. At all meetings of stockholders
for the election of directors a plurality of the votes cast shall be
sufficient to elect. With respect to other matters, unless otherwise provided
by law or by the Certificate of Incorporation or these By-laws, the
affirmative vote of the holders of a majority of the shares of all classes of
stock present in person or represented by proxy at the meeting and entitled to
vote on the subject matter shall be the act of the stockholders. Where a
separate vote by class is required, the affirmative vote of the holders of a
majority of the shares of each class present in person or represented by proxy
at the meeting shall be the act of such class, except as otherwise provided by
law or by the Certificate of Incorporation or these By-laws.
Section 1.8 ACTION BY WRITTEN CONSENT. (a) Unless otherwise
provided in the Certificate of Incorporation, any action required to be taken
at any annual or special meeting of stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without
a vote if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have
not consented in writing.
(b) Consents to corporate action shall be valid for a maximum of
60 days after the date of the earliest dated consent delivered to the
Corporation in the manner provided in Section 228(c) of the Delaware General
Corporation Law. Consents may be revoked by written notice (i) to the
Corporation, (ii) to the stockholder or stockholder soliciting consents or
soliciting revocations in opposition to action by consent (the "Soliciting
Stockholders"), or (iii) to a proxy solicitor or other agent designated by the
Corporation or the Soliciting Stockholders.
(c) Within ten business days after receipt of the earliest dated
consent delivered to the Corporation in the manner provided in Section 228(c)
of the Delaware General Corporation Law or the determination by the Board of
Directors of the Corporation that the Corporation should seek corporate action
by written consent, as the case may be, the Secretary of the Corporation shall
engage nationally recognized independent inspectors of elections for the
purpose of performing a ministerial review of the validity of the consents and
revocations. The cost of
<PAGE><PAGE 5>
retaining inspectors of elections shall be borne by the Corporation.
(d) Following appointment of the inspectors, consents and
revocations shall be delivered to the inspectors upon receipt by the
Corporation, the Soliciting Stockholder or their proxy solicitors or other
designated agents. As soon as practicable following the earlier of (i) the
receipt by the inspectors, a copy of which shall be delivered to the
Corporation, of any written demand by the Soliciting Stockholders, or (ii) 60
days after the date of the earliest dated consent delivered to the Corporation
in the manner provided in Section 228(c) of the Delaware General Corporation
Law, the inspectors shall issue a preliminary report to the Corporation and
the Soliciting Stockholders stating the number of valid and unrevoked consents
and whether, based on their preliminary count, the requisite number of valid
and unrevoked consents has been obtained to authorize or take the action
specified in the consents.
(e) Unless the Corporation and the Soliciting Stockholders shall
agree to a shorter or longer period, the Corporation and the Soliciting
Stockholders shall have 48 hours to review the consents and revocations and to
advise the inspectors and the opposing party in writing as to whether they
intend to challenge the preliminary report of the inspectors. If no written
notice of an intention to challenge the preliminary report is received within
48 hours after the inspectors' issuance of the preliminary report, the
inspectors shall issue to the Corporation and the Soliciting Stockholders
their final report containing the information from the inspectors'
determination with respect to whether the requisite number of valid and
unrevoked consents was obtained to authorize and take the action specified in
the consents. If the Corporation or the Soliciting Stockholders issue written
notice of an intention to challenge the inspectors' preliminary report within
48 hours after the issuance of that report, a challenge session shall be
scheduled by the inspectors as promptly as practicable. Following completion
of the challenge session, the inspectors shall as promptly as practicable
issue their final report to the Soliciting Stockholders and the Corporation,
which report shall contain the information included in the preliminary report,
plus any change in the vote total as a result of the challenge and a
certification of whether the requisite number of valid and unrevoked consents
was obtained to authorize or take the action specified in the consents.
Section 1.9 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF
RECORD. In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to receive payment of any dividend or other distribution
or allot-
<PAGE><PAGE 6>
ment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, which shall
not be more than sixty nor less than ten days before the date of such meeting,
nor more than sixty days prior to any other action. If no record date is
fixed, (1) the record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the day on which
the meeting is held, and (2) the record date for determining stockholders for
any other purpose shall be at the close of business on the day on which the
Board adopts the resolution relating thereto. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board may
fix a new record date for the adjourned meeting.
Notwithstanding any inconsistent provision which may be contained in
these By-Laws, in order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the
Board of Directors may fix a record date, which record date shall not precede
the date on which the resolution fixing the record date is adopted by the
Board of Directors, and which date shall not be more than ten days after the
date upon which the resolution fixing the record date is adopted by the Board
of Directors. Any stockholder of record seeking to have the stockholders
authorize or take corporate action by written consent shall, by written notice
to the Secretary of the Corporation, request the Board of Directors to fix a
record date. The Board of Directors shall thereafter promptly, but in all
events within ten days after the date on which such a request is received,
adopt a resolution fixing the record date. If no record date has been fixed
by the Board of Directors within ten days of the date upon which such a
request is received, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is required by applicable law, shall be the first
date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business,
or any officer or agent of the Corporation having custody of the book in which
proceedings of stockholders' meetings are recorded, to the attention of the
Secretary of the Corporation. Delivery shall be by hand or by certified a or
registered mail, return receipt requested. If no record date has been fixed
by the Board of Directors and prior action by the Board of Directors is
required by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a
<PAGE><PAGE 7>
meeting shall be at the close of business on the date on which the Board of
Directors adopts the resolution taking such prior action."
Section 1.10 LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary
shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place
of the meeting during the whole time thereof and may be inspected by any
stockholder who is present.
ARTICLE II
Board of Directors
Section 2.1 GENERAL POWERS. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors, which may exercise all such powers of the corporation and do all
such lawful acts and things as are not by law or by the certificate of
incorporation of the corporation directed or required to be exercised or done
by the stockholders.
Section 2.2 NUMBER, QUALIFICATION AND ELECTION. Except as
otherwise fixed by or pursuant to the provisions of Article IV of the
Certificate of Incorporation of the Corporation relating to the rights of the
holders of any class or series of stock having preference over the Common
Stock as to dividends or upon liquidation, the number of the directors of the
Corporation shall be eight (8), but, by vote of a majority of the entire Board
of Directors, the number thereof may be increased without limit, or decreased
to not less than three (3), by amendment to this Section 2.2.
The directors, other than those who may be elected by the holders of
shares of any class or series of stock having a preference over the Common
Stock of the Corporation as to dividends or upon liquidation pursuant to the
terms of Article IV of the Certificate of Incorporation or any resolution or
resolutions providing for the issuance of such stock adopted by the Board,
shall be classified, with respect to the time for which they severally hold
office, into three classes as follows: one class
<PAGE><PAGE 8>
of two (2) directors shall be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1986, another class of two (2)
directors shall be originally elected for a term expiring at the annual
meeting of stockholders to be held in 1987 and another class of three (3)
directors shall be originally elected for a term expiring at the annual
meeting of stockholders to be held in 1988, with each class to hold office
until its successors are elected and qualified. At each annual meeting of the
stockholders of the Corporation, the successors of the class of directors
whose term expires at that meeting shall be elected to hold office for a term
expiring at the annual meeting of stockholders held in the third year
following the year of their election.
Each director shall be a least 21 years of age. Directors need not
be stockholders of the Corporation.
Subject to the rights of the holders of any class or series of stock
having a preference over the Common Stock of the Corporation as to dividends
or upon liquidation, at each annual meeting of the stockholders there shall be
elected the directors of the class the term of office of which shall then
expire.
Section 2.3. NOTIFICATION OF NOMINATIONS. Subject to the rights of
the holders of any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation, nominations for the election
of directors may be made by the Board of Directors or by any stockholder
entitled to vote for the election of directors. Any stockholder entitled to
vote for the election of directors at a meeting may nominate persons for
election as directors only if written notice of such stockholders' intent to
make such nomination is given, either by personal delivery or by United States
mail, Postage prepaid, to the Secretary of the Corporation not later than (i)
with respect to an election to be held at an annual meeting of stockholders,
not more than 120 days or less than 90 days in advance of the anniversary date
of the immediately preceding annual meeting, and (ii) with respect to an
election to be held at a special meeting of stockholders for the election of
directors, the close of business an the seventh day following the date on
which notice of such meeting is first given to stockholders. Each such notice
shall set forth (a) the name and address of the stockholder who intends to
make the nomination and of the person or, persons to be nominated, (b) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice, (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder, (d)
<PAGE><PAGE 9>
such other information regarding each nominee proposed by such stockholder as
would have been required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission had each nominee be
nominated, or intended to be nominated, by the Board of Directors; (e) the
consent of each nominee to serve as a director of the corporation if so
elected and (f) if the stockholder intends to solicit proxies in support of
such stockholder's nominee(s), a representation to that effect. The chairman
of the meeting may refuse to acknowledge the nomination of any person which
was not made in accordance with the foregoing procedure or if the stockholder
solicits proxies in support of such stockholder's nominee(s) without such
stockholder having made the representation required by clause (f) of the
preceding sentence.
Section 2.4. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware
and at such times as the Board may from time to time determine, and if so
determined notice thereof need not be given.
Section 2.5. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the Chairman of the Board, if any, by the Vice
Chairman of the Board, if any, by the President or by a majority of the
members of the Board. Reasonable notice thereof shall be given by the person
or persons calling the meeting.
Section 2.6. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE
PERMITTED. Unless otherwise restricted by the Certificate of Incorporation or
these By-laws, members of the Board of Directors, or any committee designated
by the Board, may participate in a meeting of the Board or of such committee,
as the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this By-law shall
constitute presence in person at such meeting.
Section 2.7. QUORUM; VOTE REQUIRED FOR ACTION. Except as otherwise
provided by law, the Certificate of Incorporation or these By-laws, at any
meeting of the Board of Directors a majority of the entire Board shall
constitute a quorum for the transaction of business and, except as so
provided, the vote of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board. In case at any
meeting of the Board a quorum shall not be present, the members of the Board
present may adjourn the meeting from time to time until a quorum shall
attend. At any adjourned meeting at which a quorum
<PAGE><PAGE 10>
is present, any business may be transacted which might have been transacted at
the meeting originally called.
Section 2.8. ORGANIZATION. Meetings of the Board of Directors
shall be presided over by the Chairman of the Board, if any, or in the absence
of the Chairman of the Board by the Vice Chairman of the Board, if any, or in
the absence of the Vice Chairman of the Board by the President, or in their
absence by a chairman chosen at the meeting. The Secretary, or in the absence
of the Secretary an Assistant Secretary, shall act as secretary of the
meeting, but in the absence of the Secretary and any Assistant Secretary the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 2.9. ACTION BY DIRECTORS WITHOUT A MEETING. Any action
required or permitted to be taken at any meeting of the Board of Directors, or
of any committee thereof, may be taken without a meeting if all members of the
Board or of such committee, as the case may be, consent thereto in writing,
and the writing or writings are filed with the minutes of proceedings of the
Board or committee.
Section 2.10. RESIGNATIONS. Any director of the Company may at any
time resign by giving written notice to the Board of Directors, the Chairman
of the Board, the President or the Secretary of the Corporation. Such
resignation shall take effect at the time specified therein or, if the time be
not specified, upon receipt thereof; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective.
Section 2.11. VACANCIES. Subject to the rights of the holders of
any class or series of stock having a preference over the Common Stock of the
Corporation as to dividends or upon liquidation, any vacancies on the Board of
Directors resulting from death, resignation, removal or other cause shall only
be filled by the affirmative vote of a majority of the remaining directors then
in office, even though less than a quorum of the Board of Directors, or by a
sole remaining director, and newly created directorships resulting from any
increase in the number of directors shall be filled by the Board, or if not so
filled, by the stockholders at the next annual meeting thereof or at a special
meeting called for that purpose in accordance with 1.2 of these By-laws. Any
director elected in accordance with the preceding sentence shall hold office
for the remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such director's
successor shall have been elected and qualified.
<PAGE><PAGE 11>
Section 2.12. COMPENSATION OF DIRECTORS. The Board of Directors
shall have the authority to fix the compensation of directors.
ARTICLE III.
Committees
Section 3.1. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more committees,
each committee to consist of one or more of the directors of the Corporation.
The Board may designate one or more directors as alternate members of any
Committee, who may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of a member of a committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not such member or
members constitute a quorum, may unanimously appoint another member of the
Board to act at the meeting in place of any such absent or disqualified
member. Any such committee, to the extent
provided in the resolution of the Board, shall have and may exercise all the
powers and authority of the Board in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to
be affixed to all papers which may require it; but no such committee shall
have power or authority in reference to amending the certificate of
incorporation, adopting an agreement of merger or consolidation, recommending
to the stockholders the sale, lease or exchange of all or substantially all
the Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of dissolution, removing or
indemnifying directors or amending these By-laws; and, unless the resolution
expressly so provides, no such committee shall have the power or authority to
declare a dividend or to authorize the issuance of stock. The Board shall
have power at any time to change the membership of any committee, to fill all
vacancies in it and to discharge it, either with or without cause.
Section 3.2. COMMITTEE RULES. Unless the Board of Directors
otherwise provides, each committee designated by the Board may adopt, amend
and repeal rules for the conduct of its business. In the absence of a
provision by the Board or a provision in the rules of such committee to the
contrary, a majority of the entire authorized number of members of such
committee shall constitute a quorum for the transaction of business, the vote
of a majority of the members present at a meeting at the time of such vote if
a quorum is then present shall be the act of such committee, and in other
respects each committee shall
<PAGE><PAGE 12>
conduct its business in the same manner as the Board conducts its business
pursuant to Article II of these By-laws.
ARTICLE IV.
Officers
Section 4.1. OFFICERS; ELECTION. As soon as practicable after the
annual meeting of stockholders in each year, the Board of Directors shall
elect a President and a Secretary, and it may, if it so determines, elect from
among its members a Chairman of the Board and a Vice Chairman of the Board.
The Board may also elect one or more Vice Presidents, one or more Assistant
Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or
more Assistant Treasurers and such other officers as the Board may deem
desirable or appropriate and may give any of them such further designations or
alternate titles as it considers desirable. Any number of offices may be held
by the same person.
Section 4.2. TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES.
Except as otherwise provided in the resolution of the Board of Directors
electing any officer, each officer shall hold office until the first meeting
of the Board after the annual meeting of stockholders next succeeding his or
her election and until his or her successor is elected and qualified or until
his or her earlier resignation or removal. Any officer may resign at any time
upon written notice to the Board or to the President or the Secretary of the
Corporation. Such resignation shall take effect at the time specified
therein, and unless otherwise specified therein no acceptance of such
resignation shall be necessary to make it effective. The Board may remove any
officer with or without cause at any time. Any such removal shall be without
prejudice to the contractual rights of such officer, if any, with the
Corporation, but the election of an officer shall not of itself create
contractual rights. Any vacancy occurring in any office of the Corporation by
death, resignation, removal or otherwise may be filled for the unexpired
portion of the term by the Board at any regular or special meeting.
Section 4.3. CHAIRMAN OF THE BOARD. The Chairman of the Board, if
any, shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present and shall have and may
exercise such powers as may, from time to time, be assigned to him or her by
the Board and as may be provided by law.
Section 4.4. VICE CHAIRMAN OF THE BOARD. In the absence of the
Chairman of the Board, the Vice Chairman of the Board, if any, shall preside
at all meetings of the Board of
<PAGE><PAGE 13>
Directors and of the stockholders at which he or she shall be present and
shall have and may exercise such powers as may, from time to time, be assigned
to him or her by the Board and as may be provided by law.
Section 4.5. PRESIDENT. In the absence of the Chairman of the
Board and Vice Chairman of the Board, the President shall preside at all
meetings of the Board of Directors and of the stockholders at which he or she
shall be present. The President shall be the chief executive officer and
shall have general charge and supervision of the business of the Corporation
and, in general, shall perform all duties incident to the office of president
of a corporation and such other duties as may, from time to time, be assigned
to him or her by the Board or as may be provided by law.
Section 4.6. VICE PRESIDENTS. The Vice President or Vice
Presidents, at the request or in the absence of the President or during the
President's inability to act, shall perform the duties of the President, and
when so acting shall have the powers of the President. If there be more than
one Vice President, the Board of Directors may determine which one or more of
the Vice Presidents shall perform any of such duties; or if such determination
is not made by the Board, the President may make such determination; otherwise
any of the Vice Presidents may perform any of such duties. The Vice President
or Vice Presidents shall have such other powers and shall perform such other
duties as may, from time to time, be assigned to him or her or them by the
Board or the President or as may be provided by law.
Section 4.7. SECRETARY. The Secretary shall have the duty to
record the proceedings of the meetings of the stockholders, the Board of
Directors and any committees in a book to be kept for that purpose, shall see
that all notices are duly given in accordance with the provisions of these
By-laws or as required by law, shall be custodian of the records of the
Corporation, may affix the corporate seal to any document the execution of
which, on behalf of the Corporation, is duly authorized, and when so affixed
may attest the same, and, in general, shall perform all duties incident to the
office of secretary of a corporation and such other duties as may, from time
to time, be assigned to him
or her by the Board or the President or as may be provided by law.
Section 4.8. TREASURER. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation and shall deposit or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust
companies or other depositories as shall, from time to time, be selected by or
under authority of the Board of Directors. If required by the Board,
<PAGE><PAGE 14>
the Treasurer shall give a bond for the faithful discharge of his or her
duties, with such surety or sureties as the Board may determine. The
Treasurer shall keep or cause to be kept full and accurate records of all
receipts and disbursements in books of the Corporation, shall render to the
President and to the Board, whenever requested, an account of the financial
condition of the Corporation, and, in general, shall perform all the duties
incident to the office of treasurer of a corporation and such other duties as
may, from time to time, be assigned to him or her by the Board or the
President or as may be provided by law.
Section 4.9. OTHER OFFICERS. The other officers, if any, of the
Corporation shall have such powers and duties in the management of the
Corporation as shall be stated in a resolution of the Board of Directors which
is not inconsistent with these By-laws and, to the extent not so stated, as
generally pertain to their respective offices, subject to the control of the
Board. The Board may require any officer, agent or employee to give security
for the faithful performance of his or her duties.
ARTICLE V.
Stock
Section 5.1. CERTIFICATES. Every holder of stock in the
Corporation shall be entitled to have a certificate signed by or in the name
of the Corporation by the Chairman or Vice Chairman of the Board of Directors,
if any, or the President or a Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary, of the
Corporation, certifying the number of shares owned by such holder in the
Corporation. Any of the signatures on the certificate may be a facsimile. In
case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued,
it may be issued by the Corporation with the same effect as if such person
were such officer, transfer agent or registrar at the date of issue.
Section 5.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE
OF NEW CERTIFICATES. The Corporation may issue a new certificate of stock in
the place of any certificate theretofore issued by it, alleged to have been
lost, stolen or destroyed, and the Corporation may require the owner of the
lost, stolen or destroyed certificate, or such owner's legal representative,
to give the Corporation a bond in such sum and with such surety or sureties as
the Corporation may direct sufficient to indemnify the Corporation and its
transfer agents or registrars against any claim that may be made against it on
account of the
<PAGE><PAGE 15>
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.
Section 5.3. TRANSFER OF SHARES. Transfers of shares of stock of
each class of the Corporation shall be made only on the books of the
Corporation by the holder thereof, or by such holder's attorney thereunto
authorized by a power of attorney duly executed and filed with the Secretary
of the Corporation or a transfer agent for such stock, if any, and on
surrender of the certificate or certificates for such shares properly endorsed
or accompanied by a duly executed stock transfer power and the payment of all
taxes thereon. The person in whose name shares stand on the books of the
Corporation shall be deemed the owner thereof for all purposes as regards the
Corporation; provided, however, that whenever any transfer of shares shall be
made for collateral security and not absolutely, and written notice thereof
shall be given to the Secretary or to such transfer agent, such fact shall be
stated in the entry of the transfer. No transfer of shares shall be valid as
against the Corporation, its stockholders and creditors for any purpose,
except to render the transferee liable for the debts of the Corporation to the
extent provided by law, until it shall have been entered in the stock records
of the Corporation by an entry showing from and to whom transferred.
ARTICLE VI.
Miscellaneous
Section 6.1. FISCAL YEAR. The fiscal year of the Corporation shall
be determined by the Board of Directors.
Section 6.2. SEAL. The Corporation may have a corporate seal which
shall have the name of the Corporation inscribed thereon and shall be in such
form as may be approved from time to time by the Board of Directors. The
corporate seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
Section 6.3. WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS,
DIRECTORS AND COMMITTEES. Whenever notice is required to be given by law or
under any provision of the certificate of incorporation or these By-laws, a
written waiver thereof, signed by the person entitled to notice, whether
before or after the time stated therein, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting, except when the person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be
<PAGE><PAGE 16>
transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the
certificate of incorporation or these By-laws.
Section 6.4. INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES.
The Corporation shall indemnify to the full extent authorized by law any
person made or threatened to be made a party to any action, suit or
proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that such person or such person's testator or intestate is
or was a director, officer or employee of the Corporation or serves or served
at the request of the Corporation any other enterprise as a director, officer
or employee. For purposes of this By-law, the term "Corporation" shall
include any predecessor of the Corporation and any constituent corporation
(including any constituent of a constituent) absorbed by the Corporation in a
consolidation or merger; the term "other enterprise" shall include any
corporation, partnership, joint venture, trust or employee benefit plan;
service "at the request of the Corporation" shall include service as a
director, officer or employee of the Corporation which imposes duties on, or
involves services by, such director, officer or employee with respect to an
employee benefit plan, its participants or beneficiaries; any excise taxes
assessed on a person with respect to an employee benefit plan shall be deemed
to be indemnifiable expenses; and action by a person with respect to an
employee benefit plan which such person reasonably believes to be in the
interest of the participants and beneficiaries of such plan shall be deemed to
be action not opposed to the best interests of the Corporation.
Section 6.5. INTERESTED DIRECTORS; QUORUM. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation, partnership,
association or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be
void or voidable solely for this reason, or solely because the director or
officer is present at or participates in the meeting of the Board of Directors
or committee thereof which authorizes the contract or transaction, or solely
because his or her or their votes are counted for such purpose, if: (1) the
material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the Board or the
committee, and the Board or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(2) the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders
<PAGE><PAGE 17>
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (3) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified, by the Board, a committee thereof or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board or of a committee which authorizes the
contract or transaction.
Section 6.6. FORM OF RECORDS. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs or any other information
storage device, provided that the records so kept can be converted into
clearly legible form within a reasonable time. The Corporation shall so
convert any records so kept upon the request of any person entitled to inspect
the same.
Section 6.7. AMENDMENT OF BY-LAWS. These By-laws may be amended or
repealed, and new By-laws adopted, by the Board of Directors at any meeting
thereof, provided that such proposed action in respect thereof shall be stated
in the notice of such meeting. The stockholders entitled to vote shall have
the power to adopt additional By-laws and may amend or repeal any By-law,
whether or not adopted by them, only to the extent and in the manner provided
in the Certificate of Incorporation.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27.1
FINANCIAL DATA SCHEDULE
COMMERCIAL AND INDUSTRIAL COMPANIES
ARTICLE 5 OF REGULATION S-X
This schedule contains summary financial information extracted
from the Consolidated Statements of Operations and Consolidated Balance
Sheets of King World Productions, Inc. and its Subsidiaries and is quali-
fied in its entirety by reference to such financial statements.
TABLE
<S> <C>
MULTIPLIER 1,000
CURRENCY U.S. DOLLARS
PERIOD-TYPE 1st QUARTER
FISCAL-YEAR-END 08/31/98
PERIOD-START 03/01/98
PERIOD-END 05/31/98
EXCHANGE-RATE 1
CASH $224,752
SECURITIES $77,476
RECEIVABLES $78,479
ALLOWANCES $3,301
INVENTORY $0
CURRENT ASSETS $471,188
PP&E $29,349
DEPRECIATION $13,070
TOTAL-ASSETS $993,369
CURRENT-LIABILITIES $123,880
BONDS $0
COMMON $881
PREFERRED-MANDATORY $0
PREFERRED $0
OTHER-SE $1,236,534
TOTAL-LIABILITY-AND-EQUITY $993,369
SALES $0
TOTAL-REVENUES $167,968
CGS $0
TOTAL-COSTS $106,510
OTHER-EXPENSES $18,564
LOSS-PROVISION $0
INTEREST-EXPENSE $0
INCOME-PRETAX $50,514
INCOME-TAX $16,312
INCOME-CONTINUING $34,202
DISCONTINUED $0
EXTRAORDINARY $0
CHANGES $0
NET-INCOME $34,202
EPS-PRIMARY $0.47
EPS-DILUTED $0.45
