<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Commission file number 1-10881
GAYLORD ENTERTAINMENT COMPANY
-----------------------------
(Exact name of registrant as specified in its charter)
Delaware 73-0383730
- - -------------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Gaylord Drive
Nashville, Tennessee 37214
- - ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
(615) 316-6000
--------------
(Registrant's telephone number, including area code)
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 registrant's classes
of common stock, as of the latest practicable date.
Class Outstanding as of April 30, 1996
----- --------------------------------
Class A Common Stock, $.01 par value 42,653,490 shares
Class B Common Stock, $.01 par value 49,425,224 shares
<PAGE> 2
GAYLORD ENTERTAINMENT COMPANY
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Part I - Financial Information 3
Item 1. Financial Statements
Condensed Consolidated Statements of Income -
For the Three Months Ended March 31, 1996 and 1995 4
Condensed Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 5
Condensed Consolidated Statements of Cash Flows -
For the Three Months Ended March 31, 1996 and 1995 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II - Other Information
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
2
<PAGE> 3
Part I - Financial Information
Item 1. Financial Statements
GAYLORD ENTERTAINMENT COMPANY
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements include the accounts of Gaylord
Entertainment Company and subsidiaries (the "Company") and have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the financial information presented
not misleading. It is suggested that these condensed consolidated financial
statements be read in conjunction with the audited consolidated financial
statements and the notes thereto included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995, filed with the Securities and
Exchange Commission. In the opinion of management, all adjustments necessary
for a fair statement of the results of operations for the interim period have
been included. The results of operations for such interim periods are not
necessarily indicative of the results for the full year.
3
<PAGE> 4
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Revenues $ 138,857 $ 140,548
Operating expenses:
Operating costs 88,944 90,404
Selling, general and administrative 27,549 25,868
Depreciation and amortization 8,635 7,423
------------ -----------
Operating income 13,729 16,853
Interest expense (3,200) (636)
Interest income 5,561 420
Other gains (losses) 74,013 (1,024)
------------ -----------
Income before provision for income taxes 90,103 15,613
Provision for income taxes 35,725 6,011
------------ -----------
Net income $ 54,378 $ 9,602
============ ===========
Net income per share $ 0.58 $ 0.10
============ ===========
Weighted average shares outstanding, including
equivalent shares 93,165 92,879
============ ===========
Dividends per share $ 0.090 $ 0.076
============ ===========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 5
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1996 1995
------------ -----------
<S> <C> <C>
Current assets:
Cash $ 12,298 $ 12,062
Trade receivables, less allowance of $3,203 and $3,297, respectively 105,141 105,898
Program rights 12,758 26,583
Other assets 63,489 53,639
------------ -----------
Total current assets 193,686 198,182
------------ -----------
Program rights 20,485 37,641
Property and equipment, net of accumulated depreciation 589,829 571,551
Intangible assets, net of accumulated amortization 37,751 36,935
Investments 64,986 64,985
Long-term notes and interest receivable 183,210 176,356
Other assets 14,510 10,162
------------ -----------
Total assets $ 1,104,457 $ 1,095,812
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 37,350 $ 37,400
Accounts payable and accrued liabilities 102,050 115,664
Income taxes payable 37,806 14,131
Program contracts payable 15,600 23,574
------------ -----------
Total current liabilities 192,806 190,769
------------ -----------
Long-term debt 269,897 302,644
Program contracts payable 20,146 34,058
Deferred income taxes 121,388 117,361
Other liabilities 20,767 18,866
Minority interest 13,195 13,008
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 100,000 shares authorized, no shares
issued or outstanding - -
Class A common stock, $.01 par value, 150,000 shares authorized, 42,486
and 41,301 shares issued and outstanding, respectively 425 413
Class B common stock, $.01 par value, 65,000 shares authorized, 52,651
and 53,608 shares issued, 49,541 and 50,498 shares outstanding,
respectively 527 536
Additional paid-in capital 419,640 414,458
Retained earnings 114,449 68,353
Unearned restricted stock compensation (6,927) (2,798)
Treasury stock (61,856) (61,856)
------------ -----------
Total stockholders' equity 466,258 419,106
------------ -----------
Total liabilities and stockholders' equity $ 1,104,457 $ 1,095,812
============ ===========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
--------- ----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 54,378 $ 9,602
Amounts to reconcile net income to net cash flows
provided by (used in) operating activities:
Depreciation and amortization 8,635 7,423
Provision for deferred income taxes 3,627 3,531
Noncash interest income (4,971) -
Gain on sale of television station (73,850) -
Changes in:
Trade receivables (5,353) (4,290)
Program rights and program contracts payable (224) 2,922
Accounts payable and accrued liabilities 18,198 (4,085)
Other, net (9,879) (14,001)
--------- ----------
Net cash flows provided by (used in) operating activities (9,439) 1,102
--------- ----------
Cash Flows from Investing Activities:
Proceeds from sale of television station, net of selling costs paid 98,544 -
Purchases of property and equipment, net (31,551) (30,427)
Payment upon disposal of Fiesta Texas partnership interest (12,976) -
Investments in, advances to and distributions from affiliates, net (1,338) (109)
Other, net (2,472) (131)
--------- ----------
Net cash flows provided by (used in) investing activities 50,207 (30,667)
--------- ----------
Cash Flows from Financing Activities:
Repayment of long-term debt (37,050) (197)
Proceeds from issuance of long-term debt 151 400
Net borrowings under revolving credit agreement 4,102 47,406
Proceeds from exercise of stock options, net 547 -
Dividends paid (8,282) (6,994)
--------- ----------
Net cash flows provided by (used in) financing activities (40,532) 40,615
--------- ----------
Cash Flows from Discontinued Operations:
Operating activities - 4,524
Investing activities - (2,347)
Increase in cash balance - (5,088)
--------- ----------
Net cash flows used in discontinued operations - (2,911)
--------- ----------
Net change in cash 236 8,139
Cash, beginning of period 12,062 6,575
--------- ----------
Cash, end of period $ 12,298 $ 14,714
========= ==========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE> 7
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. NET INCOME PER SHARE
The computations of net income per share are based on the weighted average
number of common and equivalent (stock options) shares assumed to be
outstanding during the periods. The share amounts used in the computation of
net income per share for the quarters ended March 31, 1996 and 1995 were
93,165,000 and 92,879,000, respectively.
2. SALE OF TELEVISION STATION
In January 1996, the Company sold its Houston, Texas, television station, KHTV,
to Tribune Broadcasting Company for $99,525, including certain working capital
adjustments of approximately $6,025. The sale resulted in a pretax gain of
$73,850, which is included in other gains (losses) in the condensed
consolidated statements of income. The sale of the television station included
program rights of $48,939 and related program contracts payable of $39,619.
3. SUBSEQUENT EVENT
Subsequent to March 31, 1996, a 5% stock dividend was declared by the Company's
board of directors, which is payable on June 18, 1996 to stockholders of record
as of June 4, 1996. The condensed consolidated financial statements have not
been restated to reflect the effects of the stock dividend.
Assuming the stock dividend had been effective on March 31, 1996, the pro forma
effects of the stock dividend on the Company's stockholders' equity are as
follows:
<TABLE>
<CAPTION>
Stockholders' equity: As Reported Pro Forma
----------- ---------
<S> <C> <C>
Preferred stock $ - $ -
Class A common stock 425 446
Class B common stock 527 553
Additional paid-in capital 419,640 534,388
Retained earnings 114,449 -
Unearned restricted stock compensation (6,927) (7,273)
Treasury stock (61,856) (61,856)
--------- ---------
Total stockholders' equity $ 466,258 $ 466,258
========= =========
</TABLE>
The pro forma effects of the stock dividend on the Company's net income per
share for the three months ended March 31, assuming the stock dividend had
occurred on January 1, 1995, are as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Net income per share $ 0.56 $ 0.10
========= =========
</TABLE>
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS SEGMENTS
Gaylord Entertainment Company operates in the following business segments:
entertainment, cable networks and broadcasting.
RESULTS OF OPERATIONS
The following table contains selected summary financial data for the three
month periods ended March 31, 1996 and 1995 (in thousands, except operating
data):
<TABLE>
<CAPTION> Three Months Ended
March 31,
------------------------- %
1996 1995 change
---------- ---------- ------
<S> <C> <C> <C>
Revenues:
Entertainment $ 46,267 $ 46,292 (0.1)
Cable networks 74,295 65,004 14.3
Broadcasting 18,295 29,252 (37.5)
---------- ---------- -----
Total revenues $ 138,857 $ 140,548 (1.2)
========== ========== =====
Operating cash flow(*):
Entertainment $ 1,605 $ 2,522 (36.4)
Cable networks 18,811 17,862 5.3
Broadcasting 1,948 3,892 (49.9)
---------- ---------- -----
Total operating cash flow $ 22,364 $ 24,276 (7.9)
========== ========== =====
Operating income:
Entertainment $ (3,206) $ (1,812) (76.9)
Cable networks 15,923 15,656 1.7
Broadcasting 1,012 3,009 (66.4)
---------- ---------- -----
Total operating income $ 13,729 $ 16,853 (18.5)
========== ========== =====
Operating data:
Entertainment:
Opryland Hotel:
Occupancy rate 74.3% 82.4%
Average guest room rate $120.31 $124.26 (3.2)
Opryland theme park:
Attendance (in thousands) 29 20 45.0
Revenue per guest $ 29.07 $ 29.09 (0.1)
Cable networks:
Number of U.S. subscribers
(in thousands):
The Nashville Network 64,820 61,028 6.2
Country Music Television 32,988 26,753 23.3
</TABLE>
(*) Operating income plus depreciation and amortization. Operating cash flow
represents an alternative method of measuring cash flows and is not
intended to represent cash available for dividends, reinvestment, or other
discretionary uses. Operating cash flow is not adjusted for noncash
expenses or changes in working capital, and is not derived pursuant to
generally accepted accounting principles.
8
<PAGE> 9
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31,
1995
Revenues
Total Revenues - Total revenues decreased $1.7 million, or 1.2%, to $138.9
million in the first quarter of 1996. The decrease is attributable primarily
to a decline in revenues of the broadcasting segment, which was due primarily
to the sale of a television station in January 1996. This decline was
partially offset by increases in revenues attributable to continued growth in
the Company's cable networks segment, as discussed below.
Entertainment - Revenues in the entertainment segment were $46.3 million in
the first quarters of both 1996 and 1995. Opryland Hotel revenues were
virtually unchanged at $34.4 million. Because the hotel had an additional 385
guest rooms available in 1996, there was a decrease in the hotel's occupancy
rate to 74.3% in the first three months of 1996 compared to 82.4% in the first
three months of 1995. The hotel's average guest room rate also declined to
$120.31 in the first quarter of 1996 from $124.26 in the first quarter of 1995.
Cable Networks - Revenues increased $9.3 million, or 14.3%, to $74.3 million
in the first quarter of 1996. Advertising revenues increased 18.8% during
the first quarter of 1996 at The Nashville Network ("TNN") due to higher
advertising rates. TNN's motor sports programming continues to receive high
ratings. Subscriber revenues at TNN increased 12.6% in the first quarter of
1996 due to an increase in the number of subscribers to 64.8 million in March
1996 from 61.0 million in March 1995 and increased revenues from satellite
customers. Revenues related to the United States distribution of Country Music
Television ("CMT") were up 22.0% for the first quarter of 1996 due to increases
in both advertising and subscriber revenues. CMT subscribers increased to 33.0
million in March 1996 from 26.8 million in March 1995.
Broadcasting - Revenues decreased $11.0 million, or 37.5%, to $18.3 million
in the first quarter of 1996. Broadcasting revenues were impacted by the
Company's sale of the assets of KHTV, a Houston, Texas, television station,
in January 1996. Excluding the operations of KHTV from both quarters,
broadcasting revenues decreased 14.7% in the first three months of 1996. The
decline in broadcasting revenues reflects a decrease in advertising inventory
available for sale at the Company's Dallas and Seattle-area television
stations due to their affiliation with the CBS television network. The
affiliation with CBS was effective on March 13, 1995 in Tacoma-Seattle and on
July 2, 1995 in Ft. Worth-Dallas. In addition, revenues at the Company's
Tacoma-Seattle television station decreased in the first quarter of 1996 as a
result of ratings pressures in its highly competitive advertising
environment.
Operating expenses
Total Operating Expenses - Total operating expenses increased $1.4 million,
or 1.2%, to $125.1 million in the first quarter of 1996. Operating costs, as
a percentage of revenues, decreased slightly to 64.1% during the first three
months of 1996 as compared to 64.3% during the first three months of 1995.
Selling, general and administrative expenses, as a percentage of revenues,
increased to 19.8% in the first three months of 1996 from 18.4% in the first
three months of 1995. Total operating expenses for 1995 include the
operating expenses of KHTV.
9
<PAGE> 10
Operating Costs - Operating costs decreased $1.5 million, or 1.6%, to $88.9
million in the first quarter of 1996. Excluding the operating costs of KHTV
included in 1995, operating costs increased by $4.3 million, or 5.0%. This
increase is primarily attributable to the continued growth in the cable
networks segment including a $4.8 million increase in Group W Television,
Inc. commissions and programming costs at TNN. This increase is partially
offset by a $1.9 million decrease in operating costs at the Company's two
remaining television stations due to lower programming costs resulting from
their affiliations with CBS.
Selling, General and Administrative - Selling, general and administrative
expenses increased $1.7 million, or 6.5%, to $27.5 million in the first
quarter of 1996. The increase is primarily attributable to increased selling
and promotion costs for CMT's United States operations of $1.8 million and
higher administrative costs at the Opryland Hotel of $0.7 million. These
increases are offset, in part, by a decrease of $1.7 million attributable to
the sale of KHTV.
Depreciation and Amortization - Depreciation and amortization increased $1.2
million, or 16.3%, to $8.6 million in the first quarter of 1996. The
increase is attributable to capital improvements at the Opryland Hotel and
growth in the cable networks segment.
Operating income
Total Operating Income - Total operating income decreased $3.1 million, or
18.5%, to $13.7 million in the first quarter of 1996. This decrease reflects
lower operating income in the entertainment segment related to increased
administrative costs and depreciation expenses associated with the Opryland
Hotel expansion and lower operating income in the broadcasting segment due
primarily to the decline in revenues at the Company's Tacoma-Seattle
television station as discussed above. These decreases are offset by an
increase in operating income in the cable networks segment.
Interest expense
Interest expense increased $2.6 million to $3.2 million in the first three
months of 1996. A significant portion of the Company's interest expense for
1995 was attributable to the cable television systems segment (the "Systems")
prior to their sale. In accordance with generally accepted accounting
principles, such interest was allocated to the Systems and is therefore not
included in income from continuing operations. The Company's weighted average
interest rate on its bank debt and senior notes combined was 7.0% in the first
three months of 1996 compared to 7.2% in the first three months of 1995.
Interest income
Interest income increased $5.1 million to $5.6 million in the first three
months of 1996. This increase primarily results from $5.0 million of noncash
interest income recorded on a long-term note receivable from the sale of the
Systems.
Other gains (losses)
In January 1996, the Company sold its Houston, Texas, television station,
KHTV, for $99.5 million, including certain working capital adjustments of
approximately $6.0 million. The sale resulted in a pretax gain of $73.9
million which is included in other gains (losses) for the first three months
of 1996.
10
<PAGE> 11
Income taxes
The Company's provision for income taxes was $35.7 million for the first
three months of 1996 compared to $6.0 million for the first three months of
1995. The Company's effective tax rate on its income before provision for
income taxes was 39.6% for the first three months of 1996 and 38.5% for the
first three months of 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company currently projects capital expenditures of approximately $140
million for 1996, approximately $32 million of which had been spent as of
March 31, 1996. In addition to normal upkeep of the Company's properties,
this amount includes the following projects: the expansion of the Opryland
Hotel, the construction of a new Wildhorse Saloon location, and the opening
of four racing-themed retail stores. The Company believes that the funds
generated from its operations will exceed the amount required to fund its
operations, debt service, and dividends in 1996. The Company has an
unsecured revolving loan (the "Revolver") which provides for borrowings of up
to $400 million until its maturity on December 31, 2000. At April 30, 1996,
the Company had approximately $209 million in available borrowing capacity
under the Revolver. The Company used the cash proceeds from the sale of KHTV
to reduce indebtedness under the Revolver.
SEASONALITY
Certain of the Company's businesses are subject to seasonal fluctuation. In
general, lower revenues and operating income are generated in the first
quarter, which is the off-peak season for the Company's entertainment and
tourism properties. The Opryland theme park produces most of its revenues
and operating income in the summer months. Revenues from the Company's
broadcasting segment have also been weakest in the first quarter and
strongest in the second and fourth quarters.
RECENT DEVELOPMENTS
Subsequent to March 31, 1996, a 5% stock dividend was declared by the
Company's board of directors, which is payable on June 18, 1996 to
stockholders of record as of June 4, 1996.
11
<PAGE> 12
Part II - Other Information
Item 1. Legal Proceedings
Inapplicable
Item 2. Changes in Securities
Effective May 6, 1996, the Company's Restated Certificate of
Incorporation was amended to increase the authorized shares of
Class A Common Stock from 150,000,000 to 300,000,000 and Class B
Common Stock from 65,000,000 to 150,000,000. The additional
authorized shares of Class A Common Stock may be issued by the
Board of Directors, at their discretion without stockholder
approval, except as may be required by law or New York Stock
Exchange Rules. The additional authorized shares of Class B
Common Stock may be issued only in connection with stock dividends
and stock splits.
Item 3. Defaults Upon Senior Securities
Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
Inapplicable
Item 5. Other Information
Inapplicable
Item 6. Exhibits and Reports on Form 8-K
(a) See Index to Exhibits on page 14.
(b) No reports on Form 8-K were filed during the quarter ended
March 31, 1996.
12
<PAGE> 13
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.
Gaylord Entertainment Company
Date: May 13, 1996 By /s/ Terry E. London
------------ --------------------------------------------
Terry E. London
Senior Vice President and Chief Financial and
Administrative Officer
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
No. Exhibit Page
----- ------------------------------------------- ----
<S> <C> <C>
3 Restated Certificate of Incorporation of 15
Gaylord Entertainment Company (restated in
electronic format to incorporate amendments
dated June 18, 1993 and May 6, 1996)
27 Financial Data Schedule (for SEC use only)
</TABLE>
14
<PAGE> 1
RESTATED
CERTIFICATE OF INCORPORATION
OF
THE OKLAHOMA PUBLISHING COMPANY
The undersigned, Edward L. Gaylord and Edith Gaylord Harper,
certify that they are the President and Secretary, respectively, of The
Oklahoma Publishing Company, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), and do hereby further
certify as follows:
(1) The name of the Corporation is The Oklahoma
Publishing Company.
(2) The name under which the Corporation was originally
incorporated was "The Oklahoma Publishing Company" and the original Certificate
of Incorporation of the Corporation was filed with the Secretary of State of
the State of Delaware on June 19, 1925.
(3) This Restated Certificate of Incorporation was duly
adopted by written consent of the holders of not less than a majority of the
outstanding stock of the Corporation entitled to vote thereon, and written
notice of the corporate action has been given to the stockholders of the
Corporation who have not so consented in writing, all in accordance with the
provisions of Sections 228 and 245 of the General Corporation Law of the State
of Delaware.
(4) The text of the Restated Certificate of Incorporation
of the Corporation as amended hereby is restated to read in its entirety, as
follows:
I.
The name of this corporation is Gaylord Entertainment Company
(the "Corporation").
II.
Its principal office in the State of Delaware is located at
No. 7 West Tenth Street in the City of Wilmington, County of New Castle. The
name and address of its resident agent is The Corporation Trust Company, 1209
Orange Street, Wilmington, Delaware 19801.
<PAGE> 2
III.
The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware as set forth in Title 8 of the
Delaware Code (the "GCL").
IV.
(A) Classes and Numbers of Shares
The total number of shares of all classes authorized is
550,000,000 having a par value of $.01. The classes and the aggregate number of
shares of stock of each class that the Corporation shall have the authority to
issue is as follows:
(1) 100,000,000 shares of Preferred Stock, $.01
par value ("Preferred Stock").
(2) 300,000,000 shares of Class A Common Stock,
$.01 par value ("Class A Common Stock").
(3) 150,000,000 shares of Class B Common Stock,
$.01 par value ("Class B Common Stock" and, together with Class A
Common Stock, the "Common Stock").
Such stock may be issued by the Corporation from time to time for such
consideration as may be fixed from time to time by the Board of Directors of
the Corporation (the "Board of Directors").
(B) Preferred Stock
Shares of the Preferred Stock of the Corporation may be issued
from time to time in one or more classes or series, each of which class or
series shall have such distinctive designation or title as shall be fixed by
the Board of Directors prior to the issuance of any shares thereof. Each such
class of series of Preferred Stock shall have such voting powers, full or
limited, or no voting powers, and such preferences and relative, participating,
optional or other special rights and such qualifications, limitations or
restrictions thereof, as shall be stated in such resolution or resolu-
2
<PAGE> 3
tions providing for the issue of such class or series of Preferred Stock as may
be adopted from time to time by the Board of Directors prior to the issuance of
any shares thereof pursuant to the authority hereby expressly vested in it, all
in accordance with the laws of the State of Delaware.
(C) Powers and Rights of the Class A Common Stock and the Class B Common
Stock
(1) Voting Rights and Powers. Except as required by law,
and subject to any voting rights provided to holders of Preferred Stock by this
Restated Certificate of Incorporation, with respect to all matters upon which
stockholders are entitled to vote, the holders of the outstanding shares of
Class A Common Stock and the outstanding shares of Class B Common Stock shall
vote together without regard to class. Every holder of Class A Common Stock
shall be entitled to cast one (1) vote in person or by proxy for each share of
Class A Common Stock outstanding in such holder's name on the stock transfer
records of the Corporation, and each holder of Class B Common Stock shall be
entitled to cast five (5) votes in person or by proxy for each share of Class B
Common Stock outstanding in such holder's name on the stock transfer records of
the Corporation.
(2) Dividends; Distributions and Consideration Received
upon Merger or Consolidation. Holders of Class A Common Stock and Class B
Common Stock shall be entitled to receive, on an equal basis, such dividends,
payable in cash or otherwise, as may be declared thereon by the Board of
Directors from time to time out of the assets or funds of the Corporation
legally available therefor. In the case of dividends and other distributions in
cash, each share of Class A Common Stock shall have rights equal to the rights
of Class B Common Stock, and in the case of dividends and other distributions
of stock or property of the Corporation, each share of Class A Common Stock
shall have rights equal to the rights of Class B Common Stock; provided that,
in the case of dividends or distributions payable in stock of the Corporation,
including distributions pursuant to stock splits or divisions which occur after
the date shares of Class B Common Stock are issued, only shares of Class A
Common Stock shall be distributed with respect to Class A Common Stock and only
shares of Class B Common Stock shall be distributed with respect to Class B
Common Stock; and provided,
3
<PAGE> 4
further that, if a dividend or distribution payable in Class A Common Stock is
declared, the Board of Directors shall also declare a pro rata and simultaneous
dividend or distribution on the Class B Common Stock and that if a dividend or
distribution payable in Class B Common Stock is declared, the Board of
Directors shall also declare a pro rata and simultaneous dividend or
distribution on the Class A Common Stock. In addition, if the Corporation shall
in any manner split, subdivide or combine the outstanding shares of Class A
Common Stock, the Corporation shall proportionally split, subdivide or combine,
in the same manner and on the same basis, the outstanding shares of Class B
Common Stock and if the Corporation shall in any manner split, subdivide or
combine the outstanding shares of Class B Common Stock, the Corporation shall
proportionally split, subdivide or combine, in the same manner and on the same
basis, the outstanding shares of Class A Common Stock. In the event of a merger
or consolidation of the Corporation with or into another entity (whether or not
the Corporation is the surviving entity), each holder of Class A Common Stock
shall be entitled to receive the same per share consideration as the per share
consideration, if any, received by each holder of Class B Common Stock in such
merger or consolidation and each holder of Class B Common Stock shall be
entitled to receive the same per share consideration, if any, received by each
holder of Class A Common Stock in such merger or consolidation.
(3) Distribution of Assets Upon Liquidation. In the event
the Corporation shall be liquidated, dissolved or wound up, whether voluntarily
or involuntarily, the assets of the Corporation available for distribution
after payment of all creditors and payment of the liquidation preferences of
the Preferred Stock (the "Available Net Assets") shall be divided among the
holders of the Class A Common Stock and Class B Common Stock so that each share
of Class A Common Stock will receive an amount of Available Net Assets equal to
the amount distributed to each share of Class B Common Stock.
(4) Issuance of the Class B Common Stock. Except as
provided in section (2) above, the Corporation shall not issue additional
shares of Class B Common Stock after the date shares of Class B Common Stock
are first issued by the Corporation, and all shares of Class B Common Stock
surrendered for conversion or otherwise
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acquired by the Corporation shall be automatically converted into shares of
Class A Common Stock.
(5) Automatic Conversion of Class B Common Stock.
(i) Any purported Transfer (as defined in paragraph (xii)
of this Division (C)(5)) of record or beneficial ownership of shares
of Class B Common Stock by the person of record holding such Class B
Common Stock (a "Class B Holder"), other than to a Permitted
Transferee (a "Permitted Transfer"), shall, without any act on
anyone's part, result in the automatic conversion of each share of the
purportedly Transferred share of Class B Common Stock into one share
of Class A Common Stock effective on the later of (i) April 20, 1992
and (ii) the date of such purported Transfer, subject to any
restrictions on transfer contained in the Corporation's By-laws. The
stock certificate formerly representing such shares of Class B Common
Stock shall thereupon and thereafter be deemed to represent such
number of shares of Class A Common Stock.
(ii) The term "Permitted Transferee" has the following
meanings with respect to each Class B Holder:
(a) The Corporation or any one or more of its
directly or indirectly wholly owned subsidiaries shall be a "Permitted
Transferee".
(b) The following persons shall be "Permitted
Transferees" of each Class B Holder who in a natural person:
(I) The spouse or widow or widower (hereinafter
"Spouse") of such Class B Holder; any Family Member (as defined in
paragraph (xii) of this Division (C)(5)) of such Class B Holder; any
lineal descendant of any Family Member of such Class B Holder; or any
Spouse of a Family Member of such Class B Holder (all of whom shall be
deemed "Qualified Family Members");
(II) The trustee or trustees of a voting trust (a
"Voting Trust") of which a Controlling Number (as defined in paragraph
(xii) of this Division (C)(5)) of such trustees are any of the
following (each a "Qualified Person"): (w) such Class B
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<PAGE> 6
Holder's Qualified Family Members; (x) such Class B Holder; (y) a
director or an executive officer (as defined in Rule 3b-7 of the
General Rules and Regulations under the Exchange Act) of the
Corporation; or (z) any Qualified Person (as defined in clauses (w),
(x) and (y) above) who is the duly designated initial or subsequent
successor of any such trustee in accordance with the terms of such
Voting Trust; provided that if by reason of any change in the trustee
or trustees of such Voting Trust, such trustee or trustees would not
have qualified, at the time of the transfer of Class B Common Stock to
such trustee or trustees as a Permitted Transferee of such Class B
Holder, all shares of Class B Common Stock so Transferred to such
trustee or trustees of a Voting Trust shall, in the manner set forth
in paragraph (iv) of this Division (C)(5), be automatically converted
into an equal number of shares of Class A Common Stock;
(III) The trustee or trustees of a trust (a
"Trust") (excluding a Voting Trust) exclusively for the benefit of one
or more of (x) such Class B Holder, (y) such Class B Holder's
Qualified Family Members or (z) such organization to which
contributions are deductible under 501(c)(3) of the Internal Revenue
Code of 1986, as amended or any successor provision (the "Internal
Revenue Code") or for state or gift tax purposes (a "Charitable
Organization") as described in subclause (IV) of this paragraph
(ii)(b); provided that such Trust may include a general or special
power of appointment for such Class B Holder or Qualified Family
Members; provided, further, that if by reason of any change in the
beneficiaries of such Trust, such Trust would not have qualified, at
the time of the Transfer of Class B Common Stock to such Trust as a
Permitted Transferee of such Class B Holder, all shares of Class B
Common Stock so Transferred to such Trust shall, in the manner set
forth in paragraph (iv) of this Division (C)(5), be automatically
converted into an equal number of shares of Class A Common Stock;
(IV) A Charitable Organization established solely
by one or more of such Class B Holder or a Qualified Family Member of
such Class B Holder and the trustee or trustees of which are one or
more of such Class B Holders or a Permitted Transferee of
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<PAGE> 7
such Class B Holders; provided that if by reason of any change in the
trustee or trustees of such Charitable Organization, such Charitable
Organization would not have qualified, at the time of the Transfer of
Class B Common Stock to such Charitable Organization as a Permitted
Transferee of such Class B Holder, all shares of Class B Common Stock
so Transferred to such Charitable Organization shall, in the manner
set forth in paragraph (iv) of this Division (C)(5) be automatically
converted into an equal number of shares of Class A Common Stock;
(V) An Individual Retirement Account, as defined
in Section 408(a) of the Internal Revenue Code, of which such Class B
Holder is a participant or beneficiary, provided that such Class B
Holder has the power to direct the investment of funds deposited into
such Individual Retirement Account and to control the voting of
securities held by such Individual Retirement Account (an "IRA");
provided, further, that if by reason of any change in the
beneficiaries of such IRA, such IRA would not have qualified, at the
time of the Transfer of Class B Common Stock to such IRA, as a
Permitted Transferee of such Class B Holder, all shares of Class B
Common Stock so Transferred to such IRA shall, in the manner set forth
in paragraph (iv) of this Division (C)(5), be automatically converted
into an equal number of shares of Class A Common Stock;
(VI) A pension, profit sharing, stock bonus or
other type of plan or trust of which such Class B Holder is
participant or beneficiary and which satisfies the requirements for
qualification under Section 401(k) of the Internal Revenue Code,
provided that such Class B Holder has the power to direct the
investment of funds deposited into such plan or trust and to control
the voting of securities held by such plan or trust (a "Plan");
provided, further, that if by reason of any change in the
beneficiaries of such Plan, such Plan would not have qualified, at the
time of the Transfer of Class B Common Stock to such Plan, as a
Permitted Transferee of such Class B Holder, all shares of Class B
Common Stock so Transferred to such Plan shall, in the manner set
forth in paragraph (iv) of this Division (C)(5), be automatically
converted into an equal number of shares of Class A Common Stock;
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<PAGE> 8
(VII) Any corporation or partnership directly or
indirectly controlled, individually or as a group, only by such Class
B Holder and/or any of his Permitted Transferees as determined under
paragraph (ii) of this Division (C)(5); provided that if by reason of
any change in the direct or indirect control of such corporation or
partnership, such corporation or partnership would not have qualified,
at the time of the Transfer of Class B Common Stock to such
corporation or partnership, as a Permitted Transferee of such Class B
Holder, all shares of Class B Common Stock so Transferred to such
corporation or partnership shall, in the manner set forth in paragraph
(iv) of this Division (C)(5), be automatically converted into an equal
number of shares of Class A Common Stock; and
(VIII) The executor, executrix or other personal
representative, custodian, administrator or guardian of such Class B
Holder or such Class B Holder's estate.
(c) In the case of one or more Class B Holders
holding shares of Class B Common Stock as trustees pursuant to a
Voting Trust or any other Trust (other than a Trust described in
paragraph (d) below) as a result of a Permitted Transfer, "Permitted
Transferee" means, with respect to each share of Class B Common Stock
so transferred to such trustees, (I) any person who transferred such
share of Class B Common Stock to such trustees and (II) any Permitted
Transferee of any such transferor, except the Corporation, and, with
respect to each Subsequent Class B Share (as defined in paragraph
(xii) of this Division (C)(5)) held by such trustees, any person who
is a Permitted Transferee, except the Corporation, with respect to the
share of Class B Common Stock in respect of which such Subsequent
Class B Share was issued.
(d) In the case of one or more Class B Holders
holding shares of Class B Common Stock as trustees pursuant to a Trust
which was irrevocable on the date of effectiveness of this Restated
Certificate of Incorporation, "Permitted Transferee" means any Class B
Holder to whom or for whose benefit principal may be distributed
either during or at the end of the term of such Trust whether by power
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<PAGE> 9
of appointment or otherwise. In the case of one or more Class B
Holders holding shares of Class B Common Stock as trustees pursuant to
a Trust which was revocable on the effective date of this Restated
Certificate of Incorporation, "Permitted Transferee" means (I) any
person who transferred capital stock of the Company to such trustees
prior to such effective date and (II) any Permitted Transferee of such
person as if such person were deemed to be an Original Holder.
(e) In the case of a Class B Holder which is a
Charitable Organization, "Permitted Transferee" means (x) the Class B
Holder or Qualified Family Member of such Class B Holder who
established such Charitable Organization and transferred such Class B
Common Stock to such Charitable Organization and (y) any Permitted
Transferee of any such transferor, except the Corporation.
(f) In the case of a Class B Holder holding the
shares of Class B Common Stock in question as trustee of an IRA or a
Plan, "Permitted Transferee" means (x) the Class B Holder who
transferred Class B Common Stock or capital stock of the Company to
such IRA or such Plan, (y) any Permitted Transferee of any such Class
B Holder, except the Corporation and (z) any successor trustee or
trustees in such capacity of such IRA or such Plan in accordance with
the provisions of subclause (III) of paragraph (ii)(b) of this
Division (C)(5).
(g) In the case of a Class B Holder which is a
partnership, "Permitted Transferee" means any other person, directly
or indirectly controlling, controlled by or under direct or indirect
common control with such partnership; provided that, if by reason of
any change in the direct or indirect control of such person, such
person would not have qualified, at the time of the Transfer of the
Class B Common Stock to such person, as a Permitted Transferee of such
Class B Holder, all shares of Class B Common Stock so Transferred to
such person shall, in the manner set forth in paragraph (iv) of this
Division (C)(5), be automatically converted into an equal number of
shares of Class A Common Stock; provided, further, that if the
Transfer of such Class B Common Stock is by means of any liquidation,
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<PAGE> 10
dissolution or winding up of such partnership, "Permitted Transferee"
means such person and any of his Permitted Transferees who,
individually or as a group, directly or indirectly controlled such
partnership.
(h) In the case of a Class B Holder which is a
corporation (other than a Charitable Organization) "Permitted
Transferee" means any other person directly or indirectly controlling,
controlled by or under direct or indirect common control with such
corporation; provided that if by reason of any change in the direct or
indirect control of such person, such person would not have qualified,
at the time of the Transfer of the Class B Common Stock to such Class
B Holder, as a Permitted Transferee of such corporation, all shares of
Class B Common Stock so Transferred to such person shall, in the
manner set forth in paragraph (iv) of this Division (C)(5), be
automatically converted into an equal number of shares of Class A
Common Stock; provided, further, that if the Transfer of such Class B
Common Stock is by means of any liquidation, dissolution or winding up
of such corporation, "Permitted Transferee" means such person and any
of his Permitted Transferees who, individually or as a group, directly
or indirectly controlled such corporation.
(i) In the case of a Class B Holder which is the
estate of a deceased Class B Holder or who is the executor, executrix
or other personal representative, custodian or administrator of such
Class B Holder, or guardian of a disabled or adjudicated incompetent
Class B Holder or which is the estate of a bankrupt or insolvent Class
B Holder, which owns the shares of Class B Common Stock in question,
"Permitted Transferee" means any Permitted Transferee of such
deceased, or adjudicated incompetent, disabled, bankrupt or insolvent
Class B Holder as otherwise determined pursuant to this Division
(C)(5).
(iii) Notwithstanding anything to the contrary set
forth herein, any Class B Holder may pledge his shares of Class B Common Stock
to a pledgee, pursuant to a bona fide pledge of such shares as collateral
security for indebtedness due to the pledgee; provided, that such shares shall
not be transferred to or registered in the
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<PAGE> 11
name of the pledgee and shall remain subject to the provisions of this
Division (C)(5). In the event of foreclosure or other similar action
with respect to such shares by the pledgee, such pledged shares of
Class B Common Stock at the later of (i) April 20, 1992 and (ii) the
date of delivery of written notice by the Corporation to the pledgor
of such foreclosure or other similar action, shall, in the manner set
forth in paragraph (i) of this Division (C)(5), be automatically
converted, without further act on anyone's part, into an equal number
of shares of Class A Common Stock.
(iv) If subsequent to any Transfer, such
transferee would not have qualified, at the time of the Transfer of
the Class B Common Stock to such transferee, as a Permitted Transferee
under clause (ii)(b)(II), (ii)(b)(III), (ii)(b)(IV), (ii)(b)(V),
(ii)(b)(VI), (ii)(b)(VII), (ii)(g) or (ii)(h) of this Division (C)(5),
as the case may be, all shares of Class B Common Stock transferred
pursuant to the relevant clause to such person shall, at the later of
(a) April 20, 1992 and (b) the date of such change of the direct or
indirect control of such person, be automatically converted, without
further act on anyone's part, into an equal number of shares of Class
A Common Stock, and the stock certificates formerly representing such
shares of Class B Common Stock shall thereupon and thereafter be
deemed to represent such number of shares of Class A Common Stock.
(v) The Corporation shall, prior to the transfer
or the registration of transfer of shares of Class B Common Stock to a
purported Permitted Transferee, require the furnishing of such
affidavits or other proof as it deems necessary to establish that such
transferee is a Permitted Transferee. In the event that the Board of
Directors of the Corporation (or any committee of the Board of
Directors, or any officer of the Corporation, designated for the
purpose by the Board of Directors) shall determine, upon the basis of
facts not disclosed in any affidavit or upon the basis of such
affidavit or other document accompanying the certificate for shares of
Class B Common Stock when presented for transfer, that such shares of
Class B Common Stock have been registered in violation of the
provisions of this Division (C)(5), or shall determine that a person
is enjoying for his own benefit the special voting rights and powers
of shares of Class B Common Stock in violation of such provisions,
then the Corporation shall take such action as it deems
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<PAGE> 12
appropriate under the circumstances, including action at law or in
equity as is appropriate under the circumstances. An unforeclosed
pledge made to secure a bona fide obligation shall not be deemed to
violate such provisions.
(vi) In order to ensure compliance with the
provisions of this Division (C)(5), any Class B Holder who is not a
natural person shall, prior to any voting of the shares of Class B
Common Stock held, be required to furnish such affidavits or other
proof as the Corporation deems necessary to establish that the shares
owned by such Class B Holder have not been automatically converted to
Class A Common Stock in accordance with paragraph (i) or (iv) of this
Division (C)(5).
(vii) A good faith determination by the Corporation
(x) that a transferee of shares of Class B Common Stock is or is not a
Permitted Transferee of the transferor of such shares to such
transferee on the date of Transfer, or (y) that, by reason of any
change in the direct or indirect control of such transferee subsequent
to such Transfer, such person would have or have not qualified at the
time of the Transfer of the Class B Common Stock to such person as a
Permitted Transferee shall be conclusive.
(viii) All written notices provided for herein shall
be deemed to have been delivered three days after being sent by
registered or certified mail, return receipt requested, postage
prepaid, to the person to whom it is directed. If written notice is to
a Class B Holder, such notice should be sent to him at the address set
forth at the office of the Transfer Agent of the Corporation. If
written notice is to any other person, such notice should be sent to
him at the address known by the Corporation at the time the notice is
sent.
(ix) Anything contained in this Division (C)(5) to
the contrary notwithstanding, shares of Class B Common Stock may be
registered in the names of more than one person only if each person in
whose name the shares of Class B Common Stock are to be registered is
a Permitted Transferee of each such other person. If shares of Class B
Common Stock are registered in the names of more than one person in
accordance with this paragraph (ix), then any transfer of such shares
of Class B Common Stock
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<PAGE> 13
to any Permitted Transferee of any person in whose name such shares
are registered shall be a Permitted Transfer.
(x) Shares of Class B Common Stock shall be
issued to or registered in the names of the beneficial owners thereof,
and not in "street" or "nominee" name. The Corporation may, in
connection with preparing a list of stockholders entitled to vote at
any meeting of stockholders, require the furnishing of such affidavits
or other proof as it deems necessary to establish that the registered
owner of such shares is in fact the beneficial owner of such shares.
(xi) The Corporation shall note on the
certificates for shares of Class B Common Stock that the shares
represented by such certificates are subject to the automatic
conversion provisions of this Division (C)(5).
(xii) For purposes of this Division (C)(5):
(a) "beneficial owner" shall have the
some meaning ascribed to such term in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act.
(b) "Class B Holder" shall mean any
holder of Class B Common Stock or of the proxy to vote shares
of Class B Common Stock. Each joint owner of shares or owner
of a community property interest in shares of Class B Common
Stock shall be considered a "Class B Holder" of such shares. A
minor for whom shares of Class B Common Stock are held
pursuant to Uniform Transfer to Minors Act or similar law
shall be considered a Class B Holder of such shares.
(c) "Control" shall mean the possession,
direct or indirect, of the power to direct or cause the
direction of the management and policies of the controlled
person or entity.
(d) The term "Controlling Number" means
the minimum number of trustees of a trust whose affirmative
vote is necessary to take any action with respect to the
voting or disposition of shares of capital stock held by such
trust.
(e) The term "Exchange Act" means the
Securities Exchange Act of 1934, as amended.
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(f) The term "Family Member" of a Class
B Holder means (I) an Original Holder who is lineally
descended from a grandparent of the Class B Holder or of the
Class B Holder's Spouse, former spouse or deceased spouse; or
(II) if the Class B Holder is an Original Holder, any lineal
descendant of such Class B Holder.
(g) The term "Original Holder" means any
Person to whom shares of Class B Common Stock are issued in
connection with the first issuance of such shares as a part of
the 1991 recapitalization of the Corporation.
(h) "Person" shall mean both natural
persons and legal entities, unless otherwise specified. The
relationship of any person that a derived by or through legal
adoption shall be considered a natural relationship.
(i) The term "Subsequent Class B Share"
means any share of Class B Common Stock issued by the
Corporation to a Class B Holder in respect of an existing
share of Class B Common Stock held by such Class B Holder.
(j) "Transfer" shall mean any type of
transfer of shares of Class B Common Stock, whether by sale,
exchange, gift, operation of law, pledge, or otherwise or any
transfer of the power to vote such shares by proxy or by
transferring any proxy, and such shares of Class B Common
Stock shall refer to either (1) such shares of Class B Common
Stock so transferred, (2) the power to vote such shares so
transferred or (3) shares of Class B Common Stock for which
the power to vote was so transferred, as the case may be.
(6) Optional Conversion of Class B Common Stock.
(i) Each share of Class B Common Stock may at any
time after April 20, 1992 be converted at the election of the holder thereof
into one share of the Class A Common Stock. Any holder of shares of Class B
Common Stock may elect to convert any or all of such shares at one time or at
various times, at the holder's discretion. To exercise this conversion right,
the holder shall sur-
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render the certificate representing each share of Class B
Common Stock to be converted to the Corporation at its principal
executive offices, or, if an agent for registration of the
transfer of shares of Class B Common Stock is then duly appointed
and acting, of the Transfer Agent, accompanied by a written
notice of the election by the holder to convert and (if the
Corporation or the Transfer Agent so requires) by instruments of
transfer, in form satisfactory to the Corporation and to the
Transfer Agent, duly executed by the holder or the holder's duly
authorized attorney, and by transfer tax stamps or funds
therefor, if required by paragraph (iv) below.
(ii) As promptly as practicable after surrender for
conversion of the certificate or certificates representing shares
of Class B Common Stock and the payment of any required transfer
taxes, the Corporation will deliver to, or upon the written order
of, the holder of such certificate or certificates, a certificate
or certificates representing the number of shares of Class A
Common Stock issuable upon such conversion, in such name or names
as the holder may direct, subject to any restrictions on transfer
contained in the Corporation's By-laws. Such conversion shall be
deemed to have been made immediately prior to the close of
business on the date of the surrender of the certificate
representing shares of Class B Common Stock. All rights of the
holder of such shares shall cease at that time, and the person or
persons in whose name the shares of Class A Common Stock are to
be issued shall be treated as having become record holder or
holders of the certificate or certificates of Class A Common
Stock at that time; provided, however, that, if any such
surrender and payment occurs on a date on which the transfer
books of the Corporation shall be closed, then the transfer shall
be effective immediately prior to the close of business on the
first date thereafter that the transfer books shall be open.
(iii) The Corporation covenants that it will at
all times reserve and keep available, solely for the purpose of
issue upon conversion of the outstanding shares of Class B Common
Stock, such number of shares of Class A Common Stock as shall be
issuable upon conversion of all such outstanding shares;
provided, that nothing contained herein shall be construed to
preclude the Corporation from satisfying the obligations in
respect of the conversion of the outstanding shares of Class B
Common Stock by delivery of purchased shares of Class A
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<PAGE> 16
Common Stock which are held in the treasury of the Corporation.
The Corporation covenants that all shares of Class A Common Stock
which shall be issued upon conversion of the shares of Class B
Common Stock will, upon issue, be fully paid and nonassessable
and not subject to any preemptive rights.
(iv) The issuance of certificates for shares of
Class A Common Stock upon conversion of Class B Common Stock
shall be made without charge for any stamp or other similar tax
in respect of such issuance. However, if any such certificate is
to be issued in a name other than that of the holder of the share
or shares of Class B Common Stock converted, the person or persons
requesting the issuance thereof shall pay to the Corporation the
amount of any tax which may be payable in respect of any transfer
involved in such issuance or shall establish to the satisfaction
of the Corporation the payment of such tax.
(D) Compliance with the Communications Act of 1934 and the
Regulations Thereunder
(1) Proof of Ownership. If the Corporation has
reason to believe that the ownership, or proposed ownership, of
shares of capital stock of the Corporation by any holder or any
person presenting any shares of capital stock of the Corporation
for transfer into his name (a "Proposed Transferee") may be
inconsistent with, or in violation of, any provision of the
Federal Communications Laws (as hereinafter defined), such holder
or Proposed Transferee, upon request of the Corporation, shall
furnish promptly to the Corporation such information with respect
to citizenship and other ownership interests and affiliations, as
the Corporation shall reasonably request to determine whether the
ownership of, or the exercise of any rights with respect to,
shares of capital stock of the Corporation by such stockholder or
Proposed Transferee is inconsistent with, or in violation of, the
Federal Communications Laws.
(2) Rights of Corporation upon Inconsistency or
Violation. If any holder or Proposed Transferee from whom
information is requested should fail to respond to such request
pursuant to Section (1) of this Division (D), or if the
Corporation shall conclude that the ownership of, or the exercise
of any rights of ownership with respect to, shares of capital
stock of the Corporation by
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<PAGE> 17
such stockholder or Proposed Transferee could result in any
inconsistency with, or violation of, the Federal Communications
Laws, the Corporation may (i) refuse to permit the transfer of
shares of capital stock of the Corporation to such Proposed
Transferee, (ii) suspend those rights of stock ownership the
exercise of which would result in any inconsistency with, or
violation of, the Federal Communications Laws or (iii) redeem
such shares of capital stock of the Corporation in accordance
with Division (D)(3) hereof. In the case of clause (i) or (ii) of
the preceding sentence, such refusal of transfer or suspension
shall remain in effect until the requested information has been
received or until the Corporation has determined that such
transfer, or the exercise of such suspended rights, as the case
may be, is permissible under the Federal Communications Laws. The
Corporation may exercise any and all appropriate remedies, at law
or in equity in any court of competent jurisdiction, against any
such holder or Proposed Transferee, with a view towards obtaining
such information or preventing or curing any situation which
would cause any inconsistency with, or violation of, any
provision of the Federal Communications Laws.
(3) Redemption. Notwithstanding any other provision of
this Restated Certificate of Incorporation to the contrary,
outstanding shares of capital stock of the Corporation shall
always be subject to redemption by the Corporation, by action of
the Board of Directors, if in the judgment of the Board of
Directors such action should be taken, pursuant to Section 151(b)
of the GCL or any other applicable provision of law, to the
extent necessary to prevent the loss or secure the reinstatement
of any license or franchise from any governmental agency held by
the Corporation or any of its subsidiaries to conduct any portion
of the business of the Corporation or any of its subsidiaries,
which license or franchise is conditioned upon some or all of the
holders of the Corporation's stock possessing prescribed
qualifications. The terms and conditions of such redemption shall
be as follows:
(i) The redemption price of the shares to be
redeemed pursuant to this Division (D) shall be equal to the
lesser of (a) the Fair Market Value or (b) if such stock was
purchased by such Disqualified Holder within one year of the
Redemption Date, such Disqualified Holder's purchase price for
such shares.
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(ii) The redemption price of such shares may be
paid in cash, Redemption Securities or any combination thereof.
(iii) If less than all the shares held by
Disqualified Holders are to be redeemed, the shares to be redeemed shall be
selected in such manner as shall be determined by the Board of Directors, which
may include selection first of the most recently purchased shares thereof,
selection by lot or selection in any other manner determined by the Board of
Directors.
(iv) At least 30 days' written notice of the
Redemption Data shall be given to the record holders of the shares selected to
be redeemed (unless waived in writing by any such holder), provided that the
Redemption Date may be the date on which written notice shall be given to
record holders if the cash or Redemption Securities necessary to effect other
redemption shall have been deposited in trust for the benefit of such record
holders and subject to immediate withdrawal by term upon surrender of the stock
certificates for their shares to be redeemed.
(v) From and after the Redemption Date, any and
all rights of whatever nature, which may be hold by the owners of shares
selected for redemption (including without limitation any rights to vote or
participate in dividends declared on stock of the same class or series as such
shares), shall cease and terminate and they shall thenceforth be entitled only
to receive the cash or Redemption Securities payable upon redemption.
(vi) Such other terms and conditions as the Board
of Directors shall determine.
(vii) For purposes of this Division (D):
(a) "Disqualified Holder" shall mean any
holder of shares of stock of the Corporation whose holding of such
stock, either individually or when taken together with the holding of
shares of stock of the Corporation by any other holders, may result,
in the judgment of the Board of Directors, in the loss of, or the
failure to secure the reinstatement of, any license or franchise from
any governmental agency held by the Corporation or any of its subsid-
18
<PAGE> 19
iaries to conduct any portion of the business of the Corporation or any
of its subsidiaries.
(b) "Fair Market Value" of a share of
the Corporation's stock of any class or series shall mean the average
Closing Price for such a share for each of the 45 most recent days on
which shares of stock of such class or series shall have been traded
preceding the day on which notice of redemption shall be given
pursuant to paragraph (iv) of this Division (D)(3); provided, however,
that if shares of stock or such class or series are not traded on any
securities exchange or in the over-the-counter market, "Fair Market
Value" shall be determined by the Board of Directors in good faith.
"Closing Price" on any day means the reported closing sales price or,
in case no such sale takes place, the average of the reported closing
bid and asked prices on the principal United States securities
exchange registered under the Securities Exchange Act of 1934 on which
such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing sales price or bid quotation for such
stock on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no such
prices or quotations are available, the fair market value on the day
in question as determined by the Board of Directors in good faith.
(c) "Federal Communications Laws" shall
mean any law of the United States now or hereafter in effect (and any
regulation thereunder) pertaining to the ownership of, or the exercise
of rights of ownership with respect to capital stock of corporate
entities holding, directly or indirectly, television or radio station,
cable television or other radio authorizations, including, without
limitation, the Communications Act of 1934, as amended (the
"Communications Act"), and regulations thereunder pertaining to the
ownership, or the exercise of the rights of ownership, of capital
stock of corporate entities holding, directly or indirectly,
television or radio station, cable television or other radio
authorizations, by (1) aliens, as defined in or under the
Communications Act, as it may be amended from time to time, (2)
persons or entities having interests in television or radio stations,
newspapers or cable
19
<PAGE> 20
television systems or (3) persons or entities, unilaterally or
otherwise, seeking direct or indirect control of the corporation as
construed under the Communications Act, without having obtained any
requisite prior Federal regulatory approval to such control. The word
"regulation" shall include not only regulations but rules, published
policies and published controlling interpretations by an
administrative agency or body empowered to administer a statutory
provision of the Federal Communications Laws.
(d) "Person" shall include not only
natural persons but partnerships, associations, corporate entities,
joint ventures and other entities.
(e) "Redemption Date" shall mean the
data fixed by the Board of Directors for the redemption of any shares
of stock of the Corporation pursuant to this Division (D)(3).
(f) "Redemption Securities" shall mean
any debt or equity securities of the Corporation, any of its
subsidiaries or any other corporation, or any combination thereof,
having such terms and conditions as shall be approved by the Board of
Directors and which, together with any cash to be paid as part of the
redemption price, in the opinion of any nationally recognized
investment banking firm selected by the Board of Directors (which may
be a firm which provides other investment banking, brokerage or other
services to the corporation) has a value, at the time notice of
redemption is given pursuant to paragraph (iv) of this Division
(D)(3), at least equal to the price required to be paid pursuant to
paragraph (i) of this Division (D)(3) (assuming, in the case of
Redemption Securities to be publicly traded, such Redemption
Securities were fully distributed and subject only to normal trading
activity).
(4) The Corporation shall note on the certificates of its
capital stock that the shares represented by such certificates are subject to
the restrictions set forth in this Division (D).
20
<PAGE> 21
V.
The Corporation is to have perpetual existence.
VI.
The private property of the stockholders shall not be subject
to the payment of corporate debts to any extent whatsoever.
VII.
(A) Management by Board of Directors
The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors.
(B) Number and Classes of Directors; Election by Stockholders;
Vacancies and Removal
(1) Classified Board of Directors. The number of
directors of the Corporation shall be as from time to time fixed by,
or in the manner provided in, the By-laws of the Corporation. The
directors shall be divided into three classes, designated Class I,
Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting
the entire Board of Directors. The term of the initial Class I
directors shall terminate on the date of the 1992 annual meeting of
stockholders; the term of the initial Class II directors shall
terminate on the date of the 1993 annual meeting of stockholders and
the term of the initial Class III directors shall terminate on the
date of the 1994 annual meeting of stockholders. At each annual
meeting of stockholders beginning in 1992, successors to the class of
directors whose term expires at that annual meeting shall be elected
for a three-year term. If the number of directors is changed, any
increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as
possible, and any additional directors of any class elected to fill a
vacancy resulting from an increase in such class shall hold office
for a term that shall coincide with the remaining term of that class,
but in no case will a decrease in the number of directors shorten the
term of any incumbent director. A director shall hold office until the
annual meeting for the year
21
<PAGE> 22
in which his term expires and until his successor shall be
elected and shall qualify, subject, however, to prior death,
resignation, retirement, disqualification or removal from office. Any
vacancy on the Board of Directors, howsoever resulting, may be filled
by a majority of the directors then in office, even if less than a
quorum, or by a sole remaining director. Any director elected to fill
a vacancy shall hold office for a term that shall coincide with the
term of the class to which such director shall have been elected.
Notwithstanding the foregoing, whenever the holders of any one
or more classes or series of Preferred Stock issued by the Corporation
shall have the right, voting separately by class or series, to elect
directors at an annual or special meeting of stockholders, the
election, term of office, filing of vacancies and other features of
such directorships shall be governed by the terms of this Restated
Certificate of Incorporation or the resolution or resolutions adopted
by the Board of Directors pursuant to Article IV applicable thereto,
and such directors so elected shall not be divided into classes
pursuant to this Article VII unless expressly provided by such terms.
(2) Removal of Directors. Subject to the rights, if any,
of the holders of shares of Preferred Stock then outstanding, any or
all of the directors of the Corporation may be removed from office at
any time, but only for cause and only by the affirmative vote of the
holders of a majority of votes represented by the outstanding shares
of the Corporation then entitled to vote generally in the election of
directors, considered for purposes of this Article VII as one class.
VIII.
Any action required or permitted to be taken at any annual or
special meeting of stockholders may be taken only upon the vote of the
stockholders at an annual or special meeting duly noticed and called,
as provided in the By-laws of the Corporation, and may not be taken by
a written consent of the stockholders.
Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the Chairman of the
Board of Directors or by a majority of the members of the Board of
Directors.
22
<PAGE> 23
Special meetings of the stockholders of the Corporation may not
be called by any other person or persons.
IX.
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
To fix the amount to be reserved as working capital over and
above its capital stock paid in; to authorize and cause to be executed
mortgages and liens upon the real and personal property of the
Corporation.
Pursuant to the affirmative vote of the holders of at least a
majority of the stock issued and outstanding having voting power given
at a stockholders' meeting duly called for that purpose, the Board of
Directors shall have power and authority at any meeting to sell, lease
or exchange all of the property and assets of the Corporation,
including its good will and its corporate franchises, upon such terms
and conditions an the Board of Directors deem expedient and for the
best interest of this corporation.
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt,
repeal, alter, amend or rescind the By-laws of the Corporation. In
addition, the By-laws of the Corporation may be adopted, repealed,
altered, amended, or rescinded by the affirmative vote of sixty-six
and two-thirds percent (66-2/3%) of the outstanding stock of the
Corporation entitled to vote thereon.
Notwithstanding anything contained in this Restated Certificate
of Incorporation to the contrary, (i) the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66-2/3%) of the
issued and outstanding stock having voting power given at a
stockholders meeting duly called for that purpose, voting together as
a single class, shall be required to amend, repeal or adopt any
provision inconsistent with Articles VII, VIII, IX, X and XI of this
Restated Certificate of Incorporation and (ii) the affirmative vote of
the holders of at least a majority of the outstanding shares of Class
A Common Stock and the affirmative vote of the holders of at least a
majority of the outstanding shares
23
<PAGE> 24
of Class B Common Stock, each voting separately as a class,
shall be required to amend Article IV (C)(5) of this Restated
Certificate of Incorporation.
The Corporation may in its By-laws, and by amendment thereto
from time to time, make any lawful restriction upon the sale or
transfer of stock of the Corporation held by its stockholders; and all
persons subscribing for stock of the Corporation or purchasing stock,
whether from the Corporation itself or from any stockholder, shall
take notice of and be bound by such lawful restrictions, and shall be
deemed to agree thereto.
The Corporation may in its By-laws and by amendment thereto
from time to time, confer powers upon its Board of Directors in
addition to the foregoing, and in addition to the powers and authority
expressly conferred upon its Board of Directors by statute.
Both stockholders and the Board of Directors shall have power,
if the By-laws so provide, to hold their meetings and to have one or
more offices within or without the State of Delaware and to keep the
books of the Corporation (subject to the provisions of the statutes,)
outside the State of Delaware at such place or places as from time to
time may be designated by the Board of Directors.
X.
No director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for any
breach of fiduciary duty by such a director as a director.
Notwithstanding the foregoing sentence, a director shall be liable to
the extent provided by applicable law (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant
to Section 174 of the GCL or (iv) for any transaction from which the
director derived an improper personal benefit. No amendment to or
repeal of this provision shall apply to or have any effect on the
liability or alleged liability of any director of the Corporation for
or with respect to any acts or omissions of such director occurring
prior to such amendment or repeal.
24
<PAGE> 25
The Corporation shall indemnify to the fullest extent
authorized or permitted by the GCL (as now or hereafter in effect) any person
made, or threatened to be made, a defendant or witness to any action, suit or
proceeding (whether civil or criminal or otherwise) by reason of the fact that
he, his testator or intestate, is or was a director or officer of the
Corporation or by reason of the fact that such director or officer, at the
request of the Corporation, is or was serving any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
in any capacity.
XI.
Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under
the provisions of sec. 291 of the GCL or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of sec. 279 of the GCL order a meeting of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three fourths in value of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders of class of stockholders, of the Corporation, as the case
may be, and also on the Corporation.
25
<PAGE> 26
XII.
The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation in
the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
26
<PAGE> 27
IN WITNESS WHEREOF, The Oklahoma Publishing Company has caused
its corporate seal to be hereunto affixed and this Restated Certificate of
Incorporation to be signed by its duly authorized officers, this 30th day of
October, 1991.
THE OKLAHOMA PUBLISHING
COMPANY
By: /s/ Edward L. Gaylord
---------------------
Name:
Title:
[SEAL]
ATTEST:
By: /s/ Edith Gaylord Harper
------------------------
Name:
Title: Secretary
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